<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 02549
Form 10-KSB
ANNUAL REPORT UNDER SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Sept. 27, 1997 Commission File Number 0-122
EICO ELECTRONIC INSTRUMENT CO., INC.
State of Incorporation: New York I.R.S. Employer I.D. No.:11-524626
Office: 233 Broadway, #1085, N.Y., N.Y. (212) 566-4995
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $1 per share.
The registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
Revenues for the most recent fiscal year are $456,214.
There is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B and no disclosure will be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this form or any amendment to this form.
There are no documents required to be filed by Sec. 12, 13, or 15(d) of the
Exchange Act after the distribution of a plan confirmed by a court.
The aggregate market value, determined by multiplying the bid price at September
27, 1997, by the number of shares held by non affiliates of the registrant, is
$535,833.
As of September 27, 1997, 600,380 shares of the registrant's Capital Stock were
outstanding (exclusive of 7,913 shares held in treasury).
CERTAIN EXHIBITS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ARE INCORPORATED BY REFERENCE
<PAGE>
PART I
ITEM l-BUSINESS
(a) The major asset (other than cash and investment in U.S. Treasury
obligations) of the corporation is the first mortgage it holds on the property
it formerly owned, located at 131-01 39th Avenue, Flushing, N.Y. On June 25,
1993, the Company sold its real property in Flushing for $5,000,000. Pursuant to
the purchase money mortgage, the purchasers, Syng Man Rhee and Choon Ok Rhee,
are required to pay the mortgage principal of $4,250,000, with interest at 8%
per year, at the rate of $33,241 per month for 60 monthly payments that began in
September 1993, with a balloon payment of $4,000,617 due September 1998.
Registrant's prior history includes the design, production and distribution
of electronic test instruments, and security devices.
(b)(1) For the year ended September 27, 1997, the registrant's main source
of income was payments received from the mortgage described above.
(b)(2)-(10) Not applicable.
(b)(11) None.
(b)(12) The company has three employees.
ITEM 2-PROPERTIES
Registrant's office occupies a space of approximately 150 square feet at
233 Broadway, Suite 1085, New York, N.Y. The lease terminates January 31, 1999.
The monthly rental is $840.
ITEM 3-LEGAL PROCEEDINGS
None.
<PAGE>
ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company has not submitted any matter to a vote of security holders
during the fourth quarter of the fiscal year covered by this report, through the
solicitation of proxies or otherwise.
PART II
ITEM 5-MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock of the Registrant is traded in the over the counter
market. The National Quotation Bureau reported a "bid" of 1 and an "asked" of 4
on September 26, 1997 and September 27, 1996. These quotes do not reflect retail
mark-ups, mark downs, or commissions, and may not necessarily represent actual
transactions
On September 16, 1997, the Company declared a $.20 per share dividend,
payable on January 9, 1998 to shareholders of record on December 4, 1997.
On September 27, 1996, the company declared a $.20 per share dividend,
payable on January 6, 1997 to shareholders of record on December 16, 1996.
There were 482 shareholders of record as of September 27, 1997.
ITEM 6-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
On June 25, 1993, the Company sold its real property in Flushing, New York
for $5,000,000. The contract of sale required the purchasers, Syng Man Rhee and
Choon Ok Rhee, to pay $750,000 at the closing. In addition, a first mortgage of
$4,250,000 is held by the Company. The mortgage principal, with interest at 8%
per year, is payable in 60 monthly payments of $33,241 beginning September 1993,
with a balloon payment of $4,000,617 due September 1998. For financial
accounting purposes, the Company has recorded the sale on the cost recovery
method. Using this method, no profit was recognized until cash payments by the
buyers exceeded the Company's cost
<PAGE>
basis of the property plus selling expenses. Cash payments by the buyers
exceeded this level in February 1995. For the years ended September 27, 1997 and
September 28, 1996, the financial statements include interest income on the
mortgage of $326,798 and $332,323 respectively, and gain on the sale of the real
property of $72,091 and $66,566 respectively.
Mortgage interest income and gain on sale of property in the year 1997 is
the same amount received as in the prior comparative year.
General and corporate expenses decreased in the current year primarily as a
result of decreased insurance over increased compensation.
Investment interest income for this year was approximately the same amount
as in the prior comparative year.
The Company continues its operations, collecting and managing the mortgage
receivable as due. The statement of operations for the year ended September 26,
1998 should basically reflect interest income from U.S. Treasury obligations and
mortgage interest income, gain on the sale of real property, and expenses at
approximately the same level as for the year ended September 27, 1997. The gain
on the sale of real property should reflect the final balloon payment for the
year ended September 26, 1998. Future dividend payments are currently
contemplated. The Company has cash and investments in U.S. Treasury obligations
at September 27, 1997 of approximately $1,110,000.
The Company has no formal material commitment for future capital
expenditures.
ITEM 7-FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<PAGE>
Part II - Item 7
EICO ELECTRONIC INSTRUMENT CO., INC.
- I N D E X -
INDEPENDENT AUDITORS' REPORT
BALANCE SHEET AS AT SEPTEMBER 27, 1997
AND SEPTEMBER 28, 1996
STATEMENT OF OPERATIONS AND RETAINED
EARNINGS FOR THE YEARS ENDED
SEPTEMBER 27, 1997 AND SEPTEMBER 28, 1996
STATEMENT OF CASH FLOWS FOR THE YEARS
ENDED SEPTEMBER 27, 1997 AND
SEPTEMBER 28, 1996
NOTES TO FINANCIAL STATEMENTS
<PAGE>
[LETTERHEAD EISNER & LUBIN LLP]
Independent Auditors' Report
To the Board of Directors
and Stockholders
EICO Electronic Instrument Co., Inc.
We have audited the accompanying balance sheets of EICO Electronic
Instrument Co., Inc. as at September 27, 1997 and September 28, 1996, and the
related statements of operations and retained earnings and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of EICO Electronic Instrument
Co., Inc. at September 27, 1997 and September 28, 1996, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Eisner & Lubin LLP
----------------------------
CERTIFIED PUBLIC ACCOUNTANTS
New York, New York
October 28, 1997
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
BALANCE SHEET
September 27, September 28,
1997 1996
------------- -------------
A S S E T S
-----------
Cash $ 190,027 $ 189,957
Mortgage receivable (less unrecognized
gain on sale of property of
$4,045,452 in 1997 and $4,117,543
in 1996) -- --
Prepaid expenses 10,563 16,281
Deferred income taxes 567,000 576,000
Investments in U.S. Treasury obligations
(at amortized cost; approximate
market $916,000 in 1997 and $864,000
in 1996) 920,000 870,000
Other assets 8,673 11,932
---------- ----------
T O T A L $1,696,263 $1,664,170
========== ==========
L I A B I L I T I E S
---------------------
Accrued wages, taxes and other
expenses $ 40,959 $ 40,959
Income taxes payable 50,153 51,305
Dividends payable 120,076 120,076
Escrow deposit payable (less cash
in bank account of $92,650 in
1997 and $83,561 in 1996) -- --
---------- ----------
Total liabilities 211,188 212,340
---------- ----------
S T O C K H O L D E R S' E O U I T Y
-------------------------------------
Capital stock - $1 par value - authorized
1,000,000 shares; issued 608,293
shares (including treasury shares) 608,293 608,293
Additional paid-in capital 617,213 617,213
Retained earnings 279,560 246,315
---------- ----------
T o t a 1 1,505,066 1,471,821
Less cost of 7,913 of capital
stock in treasury 19,991 19,991
---------- ----------
Total stockholders' equity 1,485,075 1,451,830
---------- ----------
T O T A L $1,696,263 $1,664,170
========== ==========
The notes to financial statements are made a part hereof.
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EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
Year Ended Year Ended
September 27, September 28,
------------- -------------
1997 1996
Income:
Interest on mortgage $ 326,798 $ 332,323
Interest on investments 57,325 56,335
Gain on sale of property 72,091 66,566
--------- ---------
T o t a 1 456,214 455,224
General and corporate expenses 193,893 206,126
--------- ---------
Earnings before income taxes 262,321 249,098
Income taxes 109,000 104,000
--------- ---------
NET EARNINGS 153,321 145,098
Retained earnings - beginning of year 246,315 221,293
Dividends (120,076) (120,076)
--------- ---------
RETAINED EARNINGS - END OF YEAR $ 279,560 $ 246,315
========= =========
Net earnings per share $ .26 $ .24
========= =========
Dividends per share $ .20 $ .20
========= =========
AVERAGE NUMBER OF SHARES USED
IN COMPUTING NET EARNINGS
PER SHARE 600,380 600,388
========= =========
The notes to financial statements are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
Year Ended Year Ended
September 27, September 28,
1997 1996
------------ -------------
Cash flows from operating activities:
Cash paid to suppliers and employees $(190,483) $(200,754)
Interest received 389,690 380,050
Income taxes paid (101,152) (98,172)
--------- ---------
Net cash provided by
operating activities 98,055 81,124
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property -
collection of mortgage principal 72,091 66,566
Proceeds from redemptions of U.S.
Treasury obligations 115,000 110,000
Investments in U.S. Treasury
obligations (165,000) (50,000)
--------- ---------
Net cash provided by
investing activities 22,091 126,566
--------- ---------
Cash flows from financing activities:
Dividends paid (120,076) (180,123)
Acquisition of treasury stock (60)
--------- ---------
Net cash (used in)
financing activities (120,076) (180,183)
--------- ---------
NET INCREASE IN CASH 70 27,507
Cash - beginning of year 189,957 162,450
--------- ---------
CASH - END OF YEAR $ 190,027 $ 189,957
========= =========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
STATEMENT OF CASH FLOWS
- Sheet 2 -
Year Ended Year Ended
September 27, September 28,
1997 1996
------------- -------------
Reconciliation of net earnings to net
cash provided by operating activities:
Net earnings $ 153,321 $ 145,098
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Gain on sale of property (72,091) (66,566)
Deferred income taxes 9,000 9,000
Decrease (increase) in:
Prepaid expenses 5,718 (3,636)
Other assets 3,259 3,804
(Decrease) in:
Accrued wages, taxes and
other expenses (3,400)
Income taxes payable (1,152) (3,176)
--------- ---------
Net cash provided by
operating activities $ 98,055 $ 81,124
========= =========
The notes to financial statements are made a part hereof.
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FINANCIAL STATEMENTS
(Note A) - Summary of Significant
Accounting Policies:
(1) For financial statement purposes, EICO Electronic Instrument Co., Inc.
(the Company) has recorded the sale of property in 1993 on the cost recovery
method (no profit was recognized until cash payments by the buyer exceeded the
Company's cost basis of the property plus selling expenses). For income tax
purposes, such sale is reported on the installment sales method (profit is
prorated and recognized as collections of the total sales price are received). A
deferred tax asset is recognized on the difference between the income recognized
for tax purposes over the income recognized for financial accounting purposes.
(2) Organization - The Company continues its operation, collecting and
managing the mortgage receivable as due.
(3) Earnings Per Share - Earnings or loss per share is based on the average
number of shares of capital stock outstanding during each year, exclusive of
treasury shares.
(4) Income Taxes - Deferred taxes are recorded in the accounts to reflect
the interperiod allocation of income taxes resulting from differences in
reporting revenue and expenses for financial accounting and income tax purposes.
The principal temporary difference is reporting the sale of property on the cost
recovery method for financial accounting purposes and on the installment method
for income tax purposes.
(5) Investments in U.S. Treasury obligations are classified as being held
to maturity and measured at amortized cost.
The fair market of the investments at September 27, 1997 and September 28,
1996 approximates amortized cost. The investments at September 27, 1997 mature
between September 1997 and May 1999.
(6) Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FINANCIAL STATEMENTS
- Sheet 2 -
(Note B) - Mortgage Receivable:
On June 25, 1993, the Company sold its property for $5,000,000. The
contract of sale required the payment of $750,000 at the closing and a first
mortgage of $4,250,000 to be held by the Company. The mortgage, with interest at
8% a year, is due in 60 monthly payments of $33,241 beginning September 1993,
with a balloon payment of $4,000,617 due September 1998. For financial
accounting purposes, the Company has recorded the sale on the cost recovery
method.
The sale comprises:
Sales price $5,000,000
Less real estate transfer taxes
and other closing costs 788,876
----------
Balance 4,211,124
Cost basis 535,219
----------
Gain on sale of property 3,675,905
Interest collected (unrecognized)
to September 30, 1995 544,651
Recognized gain for year ended
September 28, 1996 (103,013)
-----------
Unrecognized gain on sale of property
at September 28, 1996 4,117,543
Recognized gain for year ended
September 27, 1997 (72,091)
-----------
Unrecognized gain on sale of property
at September 27, 1997 $4,045,452
==========
(Continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FINANCIAL STATEMENTS
- Sheet 3 -
(Note C) - Income Taxes:
(1) Income taxes on the statement of operations and retained earnings
comprises:
Year Ended Year Ended
September 27, September 28,
1997 1996
------------- -------------
Currently payable:
Federal $ 63,000 $ 60,000
State and local 37,000 35,000
Deferred:
Federal 5,000 5,000
State and local 4,000 4,000
-------- --------
Total $109,000 $104,000
======== ========
Federal income taxes are computed at statutory rates, including the effect
of surtax exemptions.
(2) The federal income tax returns of the Company have not been examined by
the Treasury Department in recent years.
(Note D) - Leases:
The Company rents office space for $10,080 a year under a lease which
expires January 31, 1999.
Rent expense was $11,000 and $10,700 for the years ended in 1997 and 1996,
respectively.
(Note E) - Dividends:
On September 16, 1997, the Company declared a $.20 per share dividend
payable on January 9, 1998 to shareholders of record on December 4, 1997.
On September 27, 1996, the Company declared a $.20 per share dividend
payable on January 6, 1997 to shareholders of record on December 16, 1996.
(continued)
<PAGE>
EICO ELECTRONIC INSTRUMENT CO., INC.
NOTES TO FINANCIAL STATEMENTS
- Sheet 4 -
(Note F) - Concentration of Credit Risk:
Cash is maintained at two large New York banks. The uninsured amounts held
in demand deposits at these banks in excess of the Federal Deposit Insurance
Corporation limit at September 27, 1997 and September 28, 1996 were $77,000 and
$87,000, respectively.
(Note G) - Fair Value of Financial
Investment:
Mortgage Receivable - Fair value of the mortgage receivable is estimated to
approximate carrying value based on estimates of market rates for similar
mortgage terms and remaining maturity.
<PAGE>
ITEM 8-DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND ITEM 11 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Company Position; and Has Shares Beneficially
Principal Occupation Served as Owned as of
During Past 5 Years a Direc- Sept. 27, 1997
Name (age) [1] tor Since (% of Class)
---------- --- --------- ------------
Linda Ashley Director, President, 1984 64,547 (10.61%)
(53)[3] Attorney
Howard S. Kaplan Director 1972 -0-
(70)[2]
Gordon Katz Director, Secretary 1995 -0-
(31)[5] Attorney
All Directors [4]
and Officers as a Group (Three in Group). 64,547 (10.61%)
- ------------------------------------------
[1] The information indicated above concerning occupations, age and beneficial
ownership of stock has been furnished to the Company by the respective nominees.
None of the nominees is a director of any other publicly-held company.
[2] Howard Kaplan practiced law for over 35 years.
[3] The number of shares beneficially owned by Linda Ashley, an attorney since
1982, includes 64,047 shares held of record by Trust f/b/o Linda Ashley ("Trust
D"). Linda Ashley is a Co-trustee of Trust A listed in the following chart of
Beneficial Owners and a Co-Trustee in Trust D. In such capacity, she shares
voting and dispositive power over 304,047 trust shares but disclaims beneficial
ownership of the 240,000 shares held in Trust A.
[4] Each executive officer is elected or appointed by the Board of Directors to
hold office until a successor is elected and qualified.
[5] Gordon Katz, Linda Ashley's son, has been an attorney since 1992.
<PAGE>
ITEM 10-EXECUTIVE COMPENSATION
No officer or director received more than $100,000.00 during this fiscal
year.
ITEM 11-SECURITY OWNERSHIP OF CERTAIN OTHER BENEFICIAL OWNERS
<TABLE>
<CAPTION>
(1) Title of (2) Name and Address (3) Amount and (4) % of Class
Class of Beneficial Owner Nature of Benefi-
cial Ownership
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Sophie Ashley 240,000 (A) 39.45
c/o Linda Ashley, Esq.
233 Broadway, #1085
New York, N.Y. 10279
Common Harriet Ehren 64,548 (B) 10.61
c/o Lance Ehren
10301 E. Bay Harbor Dr. #5
Bay Harbor Isl., Fla. 33154
Common Beverly Evangelos 64,648 (C) 10.61
c/o Dr. Daniela Assail
Olympic College
Math & Sci. Bldg. Room 110
1600 Chester Ave.
Bremerton, Wa. 98337
Common James Tarsy 54,750 9.00
151 Harbor Rd.
Harbor Acres
Sands Point, N.Y. 11050
- --------------------------------------------------------------------------------------------------
</TABLE>
(A) Shares held of record by Trust u/w/o Harry Ashley f/b/o Sophie Ashley
("Trust A").
(B) Includes 64,048 shares held of record by Trust f/b/o Harriet Ashley
("Trust B").
(C) Includes 64,048 shares held of record by Trust f/b/o Beverly Evangelos
("Trust C").
<PAGE>
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NONE.
PART IV
ITEM 13 EXHIBITS AND REPORTS ON FORM 1OKSB
(a)(1) and (2) Financial statements are filed as part of this Report. See
Index - Financial Statements - Item 7 herein.
(3) List of Exhibits
3.1 Certificate of Incorporation of EICO Electronic Instrument Co., Inc.,
as currently in effect, incorporated by reference, as Exhibit 3.1 to
Registrant's form 10K for the fiscal year ended October 3, 1981.
3.2 By-laws of EICO Electronic Instrument Co., Inc., as currently in
effect, incorporated by reference, as Exhibit 3.2 to Registrant's Form 10-K for
the fiscal year ended October 3, 1981.
3.3 Amendment to Certificate of Incorporation of EICO Electronic Instrument
Co., Inc., incorporated by reference, as number 11.1 to Registrant's Form 10-K
for the fiscal year ended September 30, 1989.
10.8 Mortgage held by Company on 131-01 39th Avenue, Queens, N.Y.
incorporated by reference, as Exhibit 10.8 to Registrant's Form 10KSB for the
fiscal year ended October 2, 1993.
12.1 Lease for office for fiscal year ended September 27, 1997.
(b) No report on Form 8-K was filed by Registrant during the last quarter
of the period covered by this Report.
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EICO ELECTRONIC INSTRUMENT CO., INC.
Nov. 26, 1997 /s/ Linda Ashley
-----------------------------
Linda Ashley, President
Nov. 26, 1997 /s/ Gordon Katz
-----------------------------
Gordon Katz, Secretary
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EICO ELECTRONIC INSTRUMENT CO., INC.
Nov. 26, 1997 /s/ Linda Ashley
-----------------------------
Linda Ashley, President
Nov. 26, 1997 /s/ Gordon Katz
-----------------------------
Gordon Katz, Secretary
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
3.1 Certificate of Incorporation of EICO Electronic
Instrument Co., Inc. as currently in effect.*
3.2 By Laws of EICO Electronic Instrument Co., Inc. as currently in
effect.*
3.3 Amendment to Certificate of Incorporation previously
numbered 11.1**
10.8 Mortgage held by Company for 131-01 39th Ave., Queens, N.Y.***
12.1 Lease for Office at 233 Broadway, #1085, N.Y., N.Y.
* Incorporated by reference to Registrant's form 10-K for the year ended October
3, 1981.
**Incorporated by reference and annexed to Registrant's form 10-K for the year
ended September 30, 1989.
***Incorporated by reference and annexed to Registrant's form 10KSB for the
fiscal year ended October 2, 1993.
<PAGE>
EXHIBIT 12.1
STANDARD FORM OF OFFICE LEASE
The Real Estate Board of New York, Inc.
AGREEMENT OF LEASE, made as of this 21ST day of JANUARY 1997, between F.W.
WOOLWORTH CO., a New York Corporation with its Executive Offices located at 233
Broadway, New York, NY 10279. party of the first part, hereinafter referred to
as OWNER, and EICO ELECTRONIC INSTRUMENT CO., INC. party of the second part,
hereinafter referred to as TENANT.
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
SUITE 1085 in the building known as 233 Broadway in the Borough of Manhattan,
City of New York, for the term of TWO ( 2 ) YEARS (or until such term shall
sooner cease and expire as hereinafter provided) to commence on the 1ST day
of FEBRUARY nineteen hundred and NINETY-SEVEN, and to end on the 31ST day of
JANUARY nineteen hundred and NINETY-NINE both dates inclusive, at an annual
rental rate as set forth in Article 38 on the Rider annexed hereto and made a
part hereof.
which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and due in public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly installment(s) on the execution hereof (unless this lease
be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another lease with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly installments of rent payable hereunder and
the same shall be payable to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby convenant
as follows:
Rent Occupancy
1. Tenant shall pay the rent as above and as hereinafter provided.
2. Tenant shall use and occupy demised premises for Offices and for no
other purpose.
Tenant Alterations
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Subject to the prior written consent of
Owner, and to the provisions of this article, Tenant at Tenant's expense, may
make alterations, installations, additions or improvements which are
non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
contractors or mechanics first approved by Owner. Tenant shall, before making
any alterations, additions, installations or improvements, at its expense,
obtain all permits, approvals and certificates required by any governmental or
quasi-governmental bodies and (upon completion) certificates of final approval
thereof and shall deliver promptly duplicates of all such permits, approvals and
certificates to Owner and Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors to carry such workman's compensation, general
liability, personal and property damage insurance as Owner may require. If any
mechanic's lien is filed against the demised premises, or the building of which
the same forms a part, for work claimed to have been done for, or materials
furnished to Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenant within thirty days thereafter, at Tenant's
expense, by filing the bond required by law. All fixtures and all paneling,
partitions, railings and like installations, installed in the premises at any
time, either by Tenant or by Owner in Tenant's behalf, shall, upon installation,
become the property of Owner and shall remain upon and be surrendered with the
demised premises unless Owner, by notice to Tenant no later than twenty days
prior to the date fixed as the termination of this lease, elects to relinquish
Owner's right thereto and to have them removed by Tenant, in which event the
same shall be removed from the premises by Tenant prior to the expiration of the
lease, at Tenant's expense. Nothing in this Article shall be construed to give
Owner title to or to prevent Tenant's removal of trade fixtures, moveable office
furniture and equipment, but upon removal of any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the condition
existing prior to installation and repair any damage to the demised premises or
the building due to such removal. All property permitted or required to be
removed, by Tenant at the end of the term remaining in the premises after
Tenant's removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner's property or may be removed from the premises by
Owner, at Tenant's expense.
Maintenance and Repairs
4. Tenant shall, throughout the term of this lease, take good care of the
demised premises and the fixtures and appurtenances therein. Tenant shall be
responsible for all damage or injury to the demised premises or any other part
of the building and the systems and equipment thereof, whether requiring
structural or nonstructural repairs caused by or resulting from carelessness,
omission, neglect or improper conduct of Tenant. Tenant's subtenants, agents,
employees, invitees or licensees, or which arise out of any work, labor, service
or equipment done for or supplied to Tenant or any subtenant or arising out of
the installation, use or operation of the property or equipment of Tenant or any
subtenant. Tenant shall also repair all damage to the building and the demised
premises caused by the moving of Tenant's fixtures, furniture and equipment.
Tenant shall promptly make, at Tenant's expense, all repairs in and to the
demised premises for which Tenant is responsible, using only the contractor for
the trade or trades in question, selected from a list of at least two
contractors per trade submitted by Owner. Any other repairs in or to the
building or the facilities and systems thereof for which Tenant is responsible
shall be performed by Owner at the Tenant's expense. Owner shall maintain in
good working order and repair the exterior and the structural portions of the
building, including the structural portions of its demised premises, and the
public portions of the building interior and the building plumbing, electrical,
heating and ventilating systems (to the extent such systems presently exist)
serving the demised premises. Tenant agrees to give prompt notice of any
defective condition in the premises for which Owner may be responsible
hereunder. There shall be no allowance to Tenant for diminution of rental value
and no liability on the part of Owner by reason of inconvenience, annoyance or
injury to business arising from Owner or others making repairs, alterations,
additions or improvements in or to any portion of the building or the demised
premises or in and to the fixtures, appurtenances or equipment thereof. It is
specifically agreed that Tenant shall not be entitled to any setoff or reduction
of rent by reason of any failure of Owner to comply with the covenants of this
or any other article of this Lease. Tenant agrees that Tenant's sole remedy in
law in such instance will be by way of an action for damages for breach of
contract. The provisions of this Article 4 shall not apply in the case of fire
or other casualty which are dealt with in Article 9 hereof.
Window Cleaning:
5. Tenant will not clean, nor require, permit, suffer or allow any window
in the demised premises to be cleaned from the outside in violation of Section
202 of the Labor Law or of any other applicable law or of the Rules of the Board
of Standards and Appeals, or any other Board or body having or asserting
jurisdiction.
Requirements of Law, Fire Insurance, Floor Loads:
6. Prior to the commencement of the lease term, Tenant is then in
possession, and at all times thereafter Tenant, at Tenant's sole cost and
expense, shall promptly comply will all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, Insurance Services Office, or any similar body which shall impose
any violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising out of Tenant's use or manner of use thereof,
(including Tenant's permitted use) or, with respect to the building if arising
out of Tenant's
<PAGE>
use or manner of use of the premises or the building (including the use
permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operations therein, violated any such laws,
ordinances, orders, rules, regulations or requirements with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties and expenses, including, but not limited to, reasonable
attorney's fees, by cash deposit or by surety bond in an amount and in a company
satisfactory to Owner, contest and appeal any such laws, ordinances, orders,
rules, regulations or requirements provided same is done with all reasonable
promptness and provided such appeal shall not subject Owner to prosecution for a
criminal offense or constitute a default under any lease or mortgage under which
Owner may be obligated, or cause the demised premises or any part thereof to be
condemned or vacated. Tenant shall not do or permit any act or thing to be done
in or to the demised premises which is contrary to law, or which will invalidate
or be in conflict with public liability, fire or other policies of insurance at
any time carried by or for the benefit of Owner with respect to the demised
premises or the building of which the demised premises form a part, or which
shall or might subject Owner to any liability or responsibility to any person or
for property damage. Tenant shall not keep anything in the demised premises
except as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization or other authority having
jurisdication, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant's occupancy. Tenant shall pay all costs, expenses, fines, penalties, or
damages, which may be imposed upon Owner by reason of Tenant's failure to comply
with the provisions of this article and if by reason of such failure the fire
insurance rate shall, at the beginning of this lease or at any time thereafter,
be higher than it otherwise would be, then Tenant shall reimburse Owner, as
additional rent hereunder, for that portion of all fire insurance premiums
thereafter paid by Owner which shall have been charged because of such failure
by Tenant. In any action or proceeding wherein Owner and Tenant are parties, a
schedule or "make-up" of rate for the building or demised premises issued by the
New York Fire Insurance Exchange, or other body making fire insurance rates
applicable to said premises shall be conclusive evidence of the facts therein
stated and the several items and charges in the fire insurance rates then
applicable to said premises. Tenant shall not place a load upon any floor of the
demised premises exceeding the floor load per square foot area which it was
designed to carry and which is allowed by law. Owner reserves the right to
prescribe the weight and position of all safes, business machines and mechanical
equipment. Such installations shall be placed and maintained by Tenant, at
Tenant's expense, in settings sufficient, in Owner's judgement, to absorb and
prevent vibration, noise and annoyance.
Subordination:
7. This lease is subject and subordinate to all ground or underlying leases
and to all mortgages which may now or hereafter affect such leases or the real
property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instument of subordination shall be required by any ground or underlying
lessor or by any mortgages, affecting any lease or the real property of which
the demised premises are a part. In confirmation of such subordination, Tenant
shall execute promptly any certificate that Owner may request.
Property -- Loss, Damage, Reimbursement, Indemnity:
8. Owner or its agents shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence of Owner, its agents, servants or
employees. Owner or its agents will not be liable for any such damage caused by
other tenants or persons in, upon or about said building or caused by operations
in construction of any private, public or quasi public work.
If at any time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked up, if
required by law) for any reason whatsoever including, but not limited to Owner's
own acts, Owner shall not be liable for any damage Tenant may sustain thereby
and Tenant shall not be entitled to any compensation therefor nor abatement or
diminution of rent nor shall the same release Tenant from its obligations
hereunder nor constitute an eviction. Tenant shall indemnify and save harmless
Owner against and from all liabilities, obligations, damages, penalties, claims,
costs and expenses for which Owner shall not be reimbursed by insurance,
including reasonable attorneys fees, paid, suffered or incurred as a result of
any breach by Tenant, Tenant's agents, contractors, employees, invitees, or
licensees, of any covenant or condition of this lease, or the carelessness,
negligence or improper conduct of the Tenant, Tenant's agents, contractors,
employees, invitees or licensees. Tentant's liability under this lease extends
to the acts and omissions of any sub-tenant, and any agent, contractor,
employee, invitee or licensee of any sub-tenant. In case any action or
proceeding is brought against Owner by reason of any such claim, Tenant, upon
written notice from Owner, will, at Tenant's expense, resist or defend such
action or proceeding by counsel approved by Owner in writing, such approval not
to be unreasonably withheld.
Destruction, Fire and Other Casualty:
9. (a) If the demised premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or rendered partially unusable
by fire or other casualty, the damage thereto shall be repaired by and at the
expense of Owner and the rent, until such repair shall be substantially
completed, shall be apportioned from the day following the casualty according to
the part of the premises which is usable. (c) If the demised premises are
totally damaged or rendered wholly unusable by fire or other casualty, then the
rent shall be proportionately paid up to the time of the casualty and
thenceforth shall cease until the date when the premises shall have been
repaired and restored by Owner subject to Owner's right to elect not to restore
the same as hereinafter provided. (d) If the demised premises are rendered
wholly unusable or (whether or not the demised premises are damaged in whole or
in part) the building shall be so damaged that Owner shall decide to demolish it
or to rebuild it, then, in any of such events, Owner may elect to terminate this
lease by written notice to Tenant, given within 90 days after such fire or
casualty, specifying a date for the expiration of the lease, which date shall
not be more than 60 days after the giving of such notice, and upon the date
specified in such notice the term of this lease shall expire as fully and
completely as if such date were the date set forth above for the termination of
this lease and Tenant shall forthwith quit, surrender and vacate the premises
without prejudice however, to Landlord's rights and remedies against Tenant
under the lease provisions in effect prior to such termination, and any rent
owing shall be paid up to such date and any payments of rent made by Tenant
which were on account of any period subsequent to such date shall be returned to
Tenant. Unless Owner shall serve a termination notice as provided for herein,
Owner shall make the repairs and restorations under the conditions of (b) and
(c) hereof, with all reasonable expedition, subject to delays due to adjustment
of insurance claims, labor troubles and causes beyond the Owner's control. After
any such casualty, Tenant shall cooperate with Owner's restoration by removing
from the premises as promptly as reasonably possible, all of Tenant's
salvageable inventory and movable equipment, furniture, and other property.
Tenant's liability for rent shall resume five (5) days after written notice from
Owner that the premises are substantially ready for Tenant's occupancy. (e)
Nothing contained hereinabove shall relieve Tenant from liability that may exist
as a result of damage from fire or other casualty. Notwithstanding the
foregoing, each party shall look first to any insurance in its favor before
making any claim against the other party for recovery for loss or damage
resulting from fire or other casualty, and to the extent that such insurance is
in force and collectible and to the extent permitted by law, Owner and Tenant
each hereby releases and waives all right of recovery against the other or any
one claiming through or under each of them by way of subrogation or otherwise.
The foregoing release and waiver shall be in force only if both releasors'
insurance policies contain a clause providing that such a release or waiver
shall not invalidate the insurance. If, and to the extent, that such waiver can
be obtained only by the payment of additional premiums, then the party
benefitting from the waiver shall pay such premium within ten days after written
demand or shall be deemed to have agreed that the party obtaining insurance
coverage shall be free of any further obligation under the provisions hereof
with respect to waiver of subrogation. Tenant acknowledges that Owner will not
carry insurance on Tenant's furniture and/or furnishings or any fixtures or
equipment, improvements, or appurtenances removable by Tenant and agrees that
Owner will not be obligated to repair any damage thereto or replace the same.
(f) Tenant hereby waives the provisions of Section 227 of the Real Property Law
and agrees that the provisions of this article shall govern and control in lieu
thereof.
Eminent Domain:
10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim for the
value of any unexpired term of said lease and assigns to Owner, Tenant's entire
interest in any such award.
Assignment, Mortgage, Etc.:
11. Tenant, for itself, its heirs, distributees, executors, administrators,
legal representatives, successors and assigns, expressly covenants that it shall
not assign, mortgage or encumber this agreement, nor underlet, or suffer or
permit the demised premises or any part thereof to be used by others, without
the prior written consent of Owner in each instance. Transfer of the majority of
the stock of a corporate Tenant shall be deemed an assignment. If this leases be
assigned, or if the demised premises or any part thereof be underlet or occupied
by anybody other than Tenant, Owner may, after default by Tenant, collect rent
from the assignee, under-tenant, or occupant, and apply the net amount collected
to the rent herein reserved, but no such assignment, underletting, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, under-tenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Owner to an assignment or underletting shall not in
any wise be construed to relieve Tenant from obtaining the express consent in
writing of Owner to any further assignment or underletting.
Electric Current:
[Hand graphic]
12. Rates and conditions in respect to submetering or rent inclusion, as
the case may be, to be added In RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service shall in no wise make Owner liable or
responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.
Access to Premises:
13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and, at
other reasonable times, to examine the same and to make such repairs,
replacements and improvements as Owner may deem necessary and reasonably
desirable to the demised premises or to any other portion of the building or
which Owner may elect to perform, Tenant shall permit Owner to use and maintain
and replace pipes and conduits in and through the demised premises and to erect
new pipes and conduits therein provided they are concealed within the walls,
floor, or ceiling. Owner may, during the progress of any work in the demised
premises, take all necessary materials and equipment into said premises without
the same constituting an eviction nor shall the Tenant be entitled to any
abatement of rent while such work is in progress, nor to any damages by reason
of loss or interruption of business or otherwise. Throughout the term hereof
Owner shall have the right to enter the demised premises at reasonable hours for
the purpose of showing the
<PAGE>
same to prospective purchasers or mortgagees of the building, and during the
last six months of the term for the purpose of showing the same to prospective
tenants. If Tenant is not present to open and permit an entry into the premises,
Owner or Owner's agents may enter the same whenever such entry may be necessary
or permissible by master key or forcibly and provided reasonable care is
exercised to safeguard Tenant's property, such entry shall not render Owner or
its agents liable therefor, nor in any event shall the obligations of Tenant
hereunder be affected. If during the last month of the term Tenant shall have
removed all or substantially all of Tenant's property therefrom, Owner may
immediately enter, alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to Tenant for any
compensation and such act shall have no effect on this lease or Tenant's
obligations hereunder.
Vault, Vault Space, Area:
14. No Vaults, vault space or area, whether or not enclosed or covered, not
within the property line of the building is leased hereunder, anything contained
in or indicated on any sketch, blue print or plan, or anything contained
elsewhere in this lease to the contrary notwithstanding. Owner makes no
representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant.
Occupancy:
15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any, in any event, Owner makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record.
Bankruptcy:
16. (a) Anything elsewhere in this lease to the contrary notwithstanding,
this lease may be cancelled by Owner by sending of a written notice to Tenant
within a reasonable time after the happening of any one or more of the following
events: (1) the commencement of a case in bankruptcy or under the laws of any
state naming Tenant as debtor; or (2) the making by Tenant of an assignment or
any other arrangement for the benefit of creditors under any state statute.
Neither Tenant nor any person claiming through or under Tenant, or by reason of
any statute or order of court, shall thereafter be entitled to possession of
the premises demised but shall forthwith quit and surrender the premises. If
this lease shall be assigned in accordance with its terms, the provisions of
this Article 16 shall be applicable only to the party then owning Tenant's
interest in this lease.
(b) It is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rent reserved hereunder for the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises for the same
period. In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum, if such premises or any
part thereof be relet by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent upon such reletting shall be
deemed to be the fair and reasonable rental value for the part or the whole of
the premises so re-let during the term of the re-letting. Nothing herein
contained shall limit or prejudice the right of the Owner to prove for and
obtain as liquidated damages by reason of such termination, an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
Default:
17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants for the payment of rent or additional rent; or if
the demised premises becomes vacant or deserted; or if any execution or
attachment shall be issued against Tenant or any of Tenant's property whereupon
the demised premises shall be taken or occupied by someone other than Tenant; or
if this lease be rejected under ss. 235 of Title 11 of the U.S. Code (bankruptcy
code); or if Tenant shall fail to move into or take possession of the premises
within fifteen (15) days after the commencement of the term of this lease,
then, in any one or more of such events, upon Owner serving a written five (5)
days notice upon Tenant specifying the nature of said default and upon the
expiration of said (5) days, if Tenant shall have failed to comply with or
remedy such default; or if the said default or omission complained of shall be
of a nature that the same cannot be completely cured or remedied within said
five (5) day period, and if Tenant shall not have diligently commenced during
such default within such five (5) day period, and shall not thereafter with
reasonable diligence and in good faith, proceed to remedy or cure such default,
then Owner may serve a written three (3) days' notice of cancellation of this
lease upon Tenant, and upon the expiration of said three (3) days this lease and
the term thereunder shall end and expire as fully and completely as if the
expiration of such three (3) day period were the day herein definitely fixed for
the end and expiration of this lease and the term thereof and Tenant shall then
quit and surrender the demised premises to Owner but Tenant shall remain liable
as hereinafter provided.
(2) If the notice provided for in (1) hereof have been given, and the term
shall expire as aforesaid; or if Tenant make default in the payment of the rent
reserved herein or any item additional rent herein mentioned or any part of
either or in making other payment herein required; then and in any such events
Owner, without notice, re-enter the demised premises either by force or
otherwise, and dispossess Tenant by summary proceedings or otherwise the legal
representative of Tenant or other occupant of demised premises and remove
their effects and hold the premises as if this lease had been made, and
Tenant hereby waives the service of notice of intent to re-enter or to
institute legal proceedings to that end. If Tenant shall default hereunder prior
to the date fixed as the commencement of renewal or extension of this lease,
Owner may cancel and terminate renewal or extension agreement by written notice.
Remedies of Owner and Waiver of Redemption:
18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent shall become due thereupon and
paid up to the time of such re-entry, dispossess and expiration, (b) Owner may
re-let the premises or part or parts thereof, either in the name of Owner or
otherwise, for a term or terms, which may at Owner's option be less than or
exceed the [ILLEGIBLE] which would otherwise have constituted the balance of the
term of the lease and may grant concessions or free rent or charge a higher
rental than that in this lease, and/or (c) Tenant or the legal representative of
Tenant shall also pay Owner as liquidated damages for the failure of Tenant to
observe and perform said Tenant's covenants herein contained, [ILLEGIBLE]
deficiency between the rent hereby reserved and/or covenanted to be paid and
the net amount, if any, of the rents collected on account of the [ILLEGIBLE] or
leases of the demised premises for each month of the period which would
otherwise have constituted the balance of the term of this lease. The failure of
Owner to re-let the premises or any part or parts thereof shall not release or
affect Tenant's liability for damages. In computing such liquidated damages
there shall be added to the said deficiency expenses as Owner may incur in
connection with the re-letting, such as [ILLEGIBLE] expenses, attorneys' fees,
brokerage, advertising and for keeping [ILLEGIBLE] demised premises in good
order or for preparing the same for re-letting. Any such liquidated damages
shall be paid in monthly installments by Tenant on the rent day specified in
this lease and any suit brought to cover the amount of the deficiency for any
month shall not prejudice in any way the rights of Owner to collect the
deficiency for any month shall not prejudice in any way the rights of Owner to
collect the deficiency of subsequent month by a similar proceeding. Owner, in
putting the demised premises in good order or preparing the same for re-rental
may, at Owner's option, make such alterations, repairs, replacements and
decorations in the demised premises as Owner, in Owner's sole judgment,
considers advisable and necessary for the purpose of re-letting the [ILLEGIBLE]
premises, and the making of such alterations, repairs, replacements and/or
decorations shall not operate or be construed to release [ILLEGIBLE] from
liability hereunder as aforesaid. Owner shall in no event be [ILLEGIBLE] any
way whatsoever for failure to re-let the demised premises, or [illegible]
event that the demised premises are re-let, for failure to collect the
[ILLEGIBLE] thereof under such re-letting, and in no event shall Tenant be
entitled to receive any excess, if any, of such net rents collected over the
[ILLEGIBLE] payable by Tenant to Owner hereunder. In the event of a breach
[ILLEGIBLE] threatened breach by Tenant of any of the covenants or provisions
hereof, Owner shall have the right of injunction and the right to [ILLEGIBLE]
any remedy allowed at law or in equity as if re-entry, summary proceedings and
other remedies were not herein provided for. Mention in the lease of any
particular remedy, shall not preclude Owner from any [ILLEGIBLE] remedy, in
law or in equity. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event of Tenant
being evicted or dispossessed for any cause, or in the event of Owner obtaining
possession of demised premises, by reason of the violation by Tenant of any of
the covenants and conditions of lease, or otherwise.
Fees and Expenses
19. If Tenant shall default in the observance [ILLEGIBLE] performance of
any term or covenant on Tenant's [ILLEGIBLE] to be observed or performed under
or by virtue of any of the terms or provisions in any article of this
lease, then, unless otherwise provided elsewhere in this lease, Owner may
immediately or at any time thereafter and without notice perform the obligation
of Tenant thereunder. If Owner, in connection with the foregoing or in
connection with any default by Tenant in the covenant to pay rent hereunder,
[ILLEGIBLE] any expenditures or incurs any obligations for the payment of money
[ILLEGIBLE] but not limited to attorney's fees, in instituting, prosecuting, or
defending any such action or proceeding, then Tenant will reimburse Owner for
such sums so paid or obligations incurred with interest and costs for the
foregoing expenses incurred by reason of Tenant's default shall be deemed
to be additional rent hereunder and shall be paid by Tenant to Owner within five
(5) days of rendition of any bill or statement to Tenant therefor. If Tenant's
lease term shall have expired at the time of making of such expenditures or
incurring of such obligations, such sums shall be recoverable by Owner as
damages.
Building Alterations and Management:
20. Owner shall have the right at any time without the same constituting an
eviction and without incurring liability to Tenant therefor to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets, and other public parts of the building
and to change the name, number and designation by which the building may be
known. There shall be no allowance to Tenant for diminution of rental value and
no liability on the part of Owner by reason of inconvenience, annoyance
or injury to business arising from Owner or other Tenants making any
repairs in the building or any such alterations, additions and improvements.
Furthermore, Tenant shall not have any claim against Owner by reason of Owner's
imposition of such controls of the manner of access to the building by Tenant's
social or business visitors as the Owner may deem necessary for the security of
the building and its occupants.
No Representation by Owner:
21. Neither Owner nor Owner's agents have [ILLEGIBLE] any representations
or promises with respect to the physical condition of the building, the land
upon which
<PAGE>
it is erected or the demised premises, the rents, leases, expenses of operation
or any other matter or thing affecting or related to the premises except as
herein expressly set forth and no rights, easements or licenses are acquired by
Tenant by implications or otherwise except as expressly set forth in the
provisions of this lease. Tenant has inspected the building and the demised
premises and is thoroughly acquainted with their condition and agrees to take
the same "as is" and acknowledges that the taking of possession of the demised
premises by Tenant shall be conclusive evidence that the said premises and the
building of which the same form a part were in good and satisfactory condition
at the time such possession was so taken, except as to latent defects. All
understandings and agreements heretofore made between the parties hereto are
merged in this contract, which alone fully and completely expresses the
agreement between Owner and Tenant and any executory agreement hereafter made
shall be ineffective to change, modify, discharge or effect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.
End Of Term:
22. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to Owner the demised premises, broom clean, in
good order and condition, ordinary wear and damages which Tenant is not required
to repair as provided elsewhere in this lease excepted, and Tenant shall remove
all its property. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this lease. If the last day of
the term of this Lease or any renewal thereof, falls on Sunday, this lease shall
expire at noon on the preceding Saturday unless it be a legal holiday in which
case it shall expire at noon on the preceding business day.
Quiet Enjoyment:
23. Owner covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing and performing all the terms, covenants
and conditions, on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the premises hereby demised, subject, never-
theless, to the terms and conditions of the lease including, but not limited to,
Article 30 hereof and to the ground leases, underlying leases and mortgages
hereinbefore mentioned.
Failure to Give Possession:
24. If Owner is unable to give possession of the demised premises on the
date of the commencement of the term hereof, because of the holding-over or
retention of possession of any tenant, undertenant or occupants or if the
demised premises are located in a building being constructed, because such
building has not been sufficiently completed to make the premises ready for
occupancy or because of the fact that a certificate of occupancy has not been
procured or for any other reason, Owner shall not subject to any liability for
failure to give possession on said date and the validity of the lease shall not
be impaired under such circumstances, nor shall the same be construed in any
wise to extend the term of this lease, but the rent payable hereunder shall be
abated (provided Tenant is not responsible for Owner's inability to obtain
possession) until after Owner shall have given Tenant written notice that the
premises are substantially ready for Tenant's occupancy. If permission is given
to Tenant to enter into the possession of the demised premises or to occupy
premises other than the demised premises prior to the date specified as the
commencement of the term of this lease. Tenant covenants and agrees that such
occupancy shall be deemed to be under all the terms, covenants, conditions and
provisions of this lease, except as to the covenant to pay rent. The provisions
of this article are intended to constitute "an express provision to the
contrary" within the meaning of Section 223-a of the New York Real Property Law.
No Waiver:
25. The failure of Owner to seek redress for violation of, or to insist
upon the strict performance of any covenant or condition of this lease or any of
the Rules or Regulations, set forth or hereafter adopted by Owner, shall not
prevent a subsequent act which would have originally constituted a violation
from having all the force and effect of an original violation. The receipt by
Owner of rent with knowledge of the breach of any covenant of this lease shall
not be deemed a waiver of such breach and no provision of this lease shall be
deemed to have been waived by Owner unless such waiver be in writing signed by
Owner. No payment by Tenant or receipt by Owner of a lesser amount than the
monthly rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated rent, nor shall any endorsement or statement of any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy in this lease provided. No act or thing done by Owner or Owner's
agents during the term hereby demised shall be deemed an acceptance of a
surrender of said premises, and no agreement to accept such surrender shall be
valid unless in writing signed by Owner. No employee of Owner or Owner's agent
shall have power to accept the keys of said premises prior to the termination of
the lease and the delivery of keys to any such agent or employee shall not
operate as a termination of the lease or surrender of the premises.
Waiver of Trial by Jury:
26. It is mutually agreed by and between Owner and Tenant that the
respective parties hereto shall and they hereby do waive trial by jury in any
action, proceeding or ________________ counterclaim brought by either of the
parties hereto against the other (except for personal injury or property damage)
on any matters whatsoever arising out of or in any way connected with this
lease, the relationship of Owner and Tenant, Tenant's use of or occupancy of
said premises, and any emergency statutory or any other statutory remedy. It is
further mutually agreed that in the event Owner commences any summary proceeding
for possession of the premises, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding including a counterclaim
under Article 4.
Inability to Perform:
27. This Lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply
[ILLEGIBLE] delayed in supplying any service expressly or impliedly to be
supplied unable to make, or is delayed in making any repair, additions,
alterations or decorations or is unable to supply or is delayed in supplying any
equipment or fixtures if Owner is prevented or delayed from so doing by reason
of strike or labor troubles of any cause whatsoever including, but not limited
to, government preemption in connection with a Natural Emergency or by reason of
any rule, order or regulation of any department or subdivision thereof of any
government agency or by reason of conditions of supply and demand which have
been or are affected by it or other emergency.
Bill and Notices
28. Except as otherwise in this lease provided, a statement, notice or
communication which Owner [ILLEGIBLE] desire or be required to give to Tenant,
shall be [ILLEGIBLE] sufficiently given or rendered if, in writing delivered to
Tenant personally or sent by registered or certified mail addressed to Tenant a
building of which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any of [ILLEGIBLE]
aforesaid premises addressed to Tenant, and the time of the rendition such bill
or statement and of the giving of such notice or communication shall be deemed
to be the time when the same is delivered to Tenant, [ILLEGIBLE] or left at the
premises as herein provided. Any notice by Tenant to Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.
Services Provided by Owners
29. As long as Tenant is not in default under any of covenant of this
lease, Owners shall provide: (a) necessary elevator facilities on business days
from 6 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m. and have one
elevator subject to call at all other times; (b) heat to demised premises when
and as required by law, on business days from 6 a.m. to 6 p.m. and on Saturdays
from 8 a.m. to 1 p.m.; (c) water for ordinary lavatory purposes, but if Tenant
uses or consumes water for other purposes or in unusual quantities (of which
fact Owner shall be the sole judge). Owner may install a water meter at Tenant's
expense which Tenant shall thereafter maintain at Tenant's expense in good
working order and repair to register such water consumption and Tenant shall pay
for water consumed as shown on said water meter as additional rent as and when
bills are rendered; (d) cleaning services for the demised premises on business
days at Owner's expense provided that the same are kept in order by Tenant. If,
however, said premises are to be kept clean by Tenant [ILLEGIBLE] shall be done
at Tenant's sole expense, in a manner satisfactory to Owner and no one other
than persons approved by Owner shall be permitted to enter said premises or the
building of which they are a part for such purpose. Tenant shall pay Owner the
cost of removal of any Tenant refuse and rubbish from the building; (e) if the
demised premises is [ILLEGIBLE] by Owner's air conditioning/cooling and
ventilating system, air conditioning/cooling will be furnished to Tenant from
May 15th through September 30th on business days (Monday through Fridays,
holidays excepted) from 8:00am to 6:00 p.m., and ventilation will be furnished
business days during the aforesaid hours except when air conditioning /cooling
is being furnished as aforesaid. If Tenant requires air conditioning/cooling or
ventilation for more extended hours or on Saturdays, Sundays, or on holidays, as
defined under Owner's contract Operating Engineers Local 94-94A, Owner will
furnish same at Tenant's expense. RIDER to be added in respect to rates and
conditions for such additional service; (1) Owner reserves the right to stop
services of the heating, elevator, plumbing, air-conditioning, power systems or
cleaning or other service if any, when necessary by reason of accident or for
repairs, alterations replacements or improvements necessary or desirable in the
judgement of Owner for as long as may be reasonably required by reason thereof.
If building of which the demised premises are a part supplies manually operated
elevator service, Owner at any time may substitute automatic control elevator
service and upon ten days' written notice to Tenant, proceed with alterations
necessary therefor without in any wise affecting the lease or the obligation of
Tenant hereunder. The same shall be done with a minimum of inconvience to Tenant
and owner shall pursue alteration with due diligence.
Captions:
30. The Captions are inserted only as a matter convenience and for
reference and in no way limit or describe the scope of this lease nor the intent
of any provision thereof.
Definitions:
31. The term "office" or "offices", wherever [ILLEGIBLE] this lease, shall
not be construed to mean premises as a store or stores, for the sale or display,
at any time, of goods, wares, merchandise, of any kind or as a restaurant, shop,
booth, bootblack or other stand, barber shop, or for other similiar purposes or
for manufacturing. The term "Owner" means a landlord or lessor, and as used in
lease means only the owner, or the mortgagee in possession for the being of the
land and building (or the owner of a lease of the building or of the land and
building) of which the demised premises form a part that in the event of any
sale or sales of said land and building or of lease or in the event of a lease
of said building, or of the land building, the said Owner shall be and hereby is
entirely freed and released of all covenants and obligations of Owners
hereunder, and it shall be deemed and construed without further agreement
between the parties, their successors in interest, or between the parties and
the purchasers of any such sale, or the said lessee of the building, or the land
building, that the purchaser or the lessee of the building has assumed and
agreed to carry out any and all covenants and obligations of Owner hereunder.
The words "re-enter" and "re-entry" as used in this lease are not restricted to
their technical legal meaning. The term "business days" as used in this lease
shall exclude Saturdays (except such portions [ILLEGIBLE] as is covered by
specific hours in Article 29 hereof). Sundays and all days observed by the State
or Federal Government as legal holidays and designated as holidays by the
applicable building service union employee service contract or by the applicable
Operating Engineers contract respect to HVAC service.
<PAGE>
Adjacent Excavation -- Shoring
32. If an excavation shall be made upon land adjacent to the demised premises,
or shall be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the demised premises
for the purpose of doing such work as said person shall deem necessary to
preserve the wall or the building of which demised premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Owner, or diminution or abatement of rent.
Rules and Regulations
33. Tenant and Tenant's servants, employees, agents, visitors, and licensees
shall observe faithfully, and comply strictly with, the Rules and Regulations
and such other and further reasonable Rules and Regulations as Owner or Owner's
agents may from time to time adopt. Notice of any additional rules or
regulations shall be given in such manner as Owner may elect. In case Tenant
disputes the reasonableness of any additional Rule or Regulation hereafter made
or adopted by Owner or Owner's agents, the parties hereto agree to submit the
question of the reasonableness of such Rule or Regulation for decision to the
New York office of the American Arbitration Association, whose determination
shall be final and conclusive upon the parties hereto. The right to dispute the
reasonableness of any additional Rule or Regulation upon Tenant's part shall be
deemed waived unless the same shall be asserted by service of a notice, in
writing upon Owner within ten (10) days after the giving of notice thereof.
Nothing in this lease contained shall be construed to impose upon Owner any
duty or obligation to enforce the Rules and Regulations or terms, covenants or
conditions in any other lease, as against any other tenant and Owner shall not
be liable to Tenant for violation of the same by any other tenant, its servants,
employees, agents, visitors or licensees.
Security:
[Hand arrow graphic]
34. Tenant has deposited with Owner the sum of $888.96 carried over from prior
lease as security for the faithful performance and observance by Tenant of the
terms, provisions and conditions of this lease; it is agreed that in the event
Tenant defaults in respect of any of the terms, provisions and conditions of
this lease, including, but not limited to, the payment of rent and additional
rent, Owner may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rent and additional rent
or any other sum as to which Tenant is in default or for any sum which Owner may
expect or may be required to expend by reason of Tenant's default in respect of
any of the terms, covenants and conditions of this lease, including but not
limited to, any damages or deficiency in the re-letting of the premises, whether
such damages or deficiency accrued before or after summary proceedings or other
re-entry by Owner. In the event that Tenant shall fully and faithfully comply
with all of the terms, provisions, covenants and conditions of this lease, the
security shall be returned to Tenant after the date fixed as the end of the
Lease and after delivery of entire possession of the demised premises to Owner.
In the event of a sale of the land and building or leasing of the building, of
which the demised premises form a part, Owner shall have the right to transfer
the security to the vendee or lessee and Owner shall thereupon be released by
Tenant from all liability for the return of such security; and Tenant agrees to
look to the new Owner solely for the return of said security, and it is agreed
that the provisions hereof shall apply to every transfer or assignment made in
the security to a new Owner. Tenant further convenants that it will not assign
or encumber or attempt to assign or encumber the money deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
Estoppel Certificate
35. Tenant, at any time, and from time to time, upon at least 10 days' prior
notice by Owner, shall execute, acknowledge and deliver to Owner, and/or to any
other person, firm or corporation specified by Owner, a statement certifying
that this Lease is unmodified and in full force and effect (or, if there has
been modifications, that the same is in full force and effect as modified, and
stating the modifications), stating the dates to which the rent and additional
rent have been paid, and stating whether or not there exists any default by
Owner under this Lease, and, if so, specifying each such default.
Successors and Assigns:
36. The covenants, conditions and agreements contained in this lease shall bind
and inure to the benefit of Owner and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns.
[Hand arrow graphic] Space to be filled in or deleted. ARTICLES 37 THROUGH 65,
INCLUSIVE OF THE RIDER ATTACHED HERETO ARE HEREBY INCORPORATED INTO THIS LEASE
BY THIS REFERENCE.
In Witness Whereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.
Witness for Owner:
- --------------------------------------------------------------------------------
F. W. WOOLWORTH CO.
- ----------------------------------------------------------------[CORPORATE SEAL]
/s/ [ILLEGIBLE]
- --------------------------------------------------------------------------[L.S.]
Witness for Tenant:
- --------------------------------------------------------------------------------
EICO Electronic Instrument [ILLEGIBLE]
- ----------------------------------------------------------------[CORPORATE SEAL]
/s/ Linda Ashley
- --------------------------------------------------------------------------[L.S.]
BY: LINDA ASHLEY, President
ACKNOWLEDGMENTS
CORPORATE OWNER
STATE OF NEW YORK, ss.:
County of
On this day of , 19 , before me personally came
to me known, who being by me duly sworn, did depose and say that he resides
in :
that he is the of
the corporation described in and which executed the foregoing instrument, as
OWNER; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
-------------------------------------------------------------
CORPORATE TENANT
STATE OF NEW YORK, ss.:
County of
On this day of , 19 , before me personally came
to me known, who being by me duly sworn, did depose and say that he resides
in :
that he is the of
the corporation described in and which executed the foregoing instrument, as
TENANT; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
-------------------------------------------------------------
INDIVIDUAL OWNER
STATE OF NEW YORK, ss.:
County of
On this day of , 19 , before me
personally came
to me known and known to me to be the individual
described in and who, as OWNER, executed the foregoing instrument and
acknowledged to me that he executed the same.
-------------------------------------------------------------
INDIVIDUAL TENANT
STATE OF NEW YORK, ss.:
County of
On this day of , 19 , before me
personally came
to me known and known to me to be the individual
described in and who, as TENANT, executed the foregoing instrument and
acknowledged to me that he executed the same.
-------------------------------------------------------------
<PAGE>
GUARANTY
FOR VALUE RECEIVED, and in consideration for, and as an inducement to
Owner making the within lease with Tenant, the undersigned guarantees to
Owner, Owner's successors and assigns, the full performance and observance of
all the covenants, conditions and agreements, therein provided to be performed
and observed by Tenant, including the "Rules and Regulations" as therein
provided, without requiring any notice of non-payment, non-performance, or
non-observance, or proof, or notice, or demand, whereby to charge the
undersigned therefor, all of which the undersigned hereby expressly waives and
expressly agrees that the validity of this agreement and the obligations of the
guarantor hereunder shall in no wise be terminated, affected or impaired by
reason of the assertion by Owner against Tenant of any of the rights or remedies
reserved to Owner pursuant to the provisions of the within lease. The
undersigned further covenants and agrees that this guaranty shall remain and
continue in full force and effect as to any renewal, modification or extension
of this lease and during any period when Tenant is occupying the premises as a
"statutory tenant." As a further inducement to Owner to make this lease and in
consideration thereof, Owner and the undersigned covenant and agree that in any
service or proceeding brought by either Owner or the undersigned against the
other on any matters whatsoever arising out of, under, or by virtue of the terms
of this lease or this guaranty that Owner and the undersigned shall and do
hereby waive trial by jury.
Dated New York City ..................................................19...
WITNESS:
- --------------------------------------------------------------------------------
STATE OF NEW YORK, ) ss.:
County of )
On this day of , 19 , before me
personally came ,
to me known and known to me to be the individual described in, and who executed
the foregoing Guaranty and acknowledged to me that he executed the same.
-----------------------------------
Notary
.........................................................................[L.S.]
Residence ......................................................................
Business Address ...............................................................
Firm Name ......................................................................
[GRAPHIC] IMPORTANT -- PLEASE READ [GRAPHIC]
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE
IN ACCORDANCE WITH ARTICLE 33.
1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by Tenant or by jobbers or others in the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and
sideguards. If said premises are situated on the ground floor of the building,
Tenant thereof shall further, at Tenant's expense, keep the sidewalk and curb in
front of said premises clean and free from ice, snow, dirt and rubbish.
2. The water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.
3. No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors or halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the buildings by reason of noise,
odors, and/or vibrations, or interfere in any way with other Tenants or those
having business therein, nor shall any animals or birds be kept in or about the
building. Smoking or carrying lighted cigars or cigarettes in the elevators of
the building is prohibited.
4. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.
5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises of the building or on the inside of the demised premises if the
same is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove same without any liability, and may charge the expense incurred
by such removal to Tenant or Tenants violating this rule. Interior signs on
doors and directory tables shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.
6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner and as Owner may direct. No Tenant shall lay linoleum, or other
similar floor covering, so that the same shall come in direct contact with the
floor of the demised premises, and, if linoleum or other similar floor covering
is desired to be used an interlining of builder's deadening felt shall be first
affixed to the floor, by a paste or other material, soluble in water, the use of
cement or other similar adhesive materials being expressly prohibited.
7. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any Tenant, nor shall any changes be made in existing locks
or mechanism thereof. Each Tenant must, upon the termination of his Tenancy,
restore to Owner all keys of stores, offices and toilet rooms, either furnished
to, or otherwise procured by, such Tenant, and in the event of the loss of any
keys, so furnished, such Tenant shall pay to Owner the cost thereof.
8. Freight, furniture, business equipment, merchandise and bulky matter of
any description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.
9. Canvassing, soliciting and peddling in the building is prohibited and
each Tenant shall cooperate to prevent the same.
10. Owner reserves the right to exclude from the building between the hours
of 6 P.M. and 8 A.M. and at all hours on Sundays, and legal holidays all persons
who do not present a pass to the building signed by Owner. Owner will furnish
passes to persons for whom any Tenant requests same in writing. Each Tenant
shall be responsible for all persons for whom he requests such pass and shall be
liable to Owner for all acts of such persons.
11. Owner shall have the right to prohibit any advertising by any Tenant
which in Owner's opinion, tends to impair the reputation of the building or its
desirability as a building for offices, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.
12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible or explosive fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.
13. If the building contains central air conditioning and ventilation,
Tenant agrees to keep all windows closed at all times and to abide by all rules
and regulations issued by the Owner with respect to such services. If Tenant
requires air conditioning or ventilation after the usual hours, Tenant shall
give notice in writing to the building superindendant prior to 3:00 P.M. In the
case of services required on week days, and prior to 3:00 P.M. on the day prior
in the case of after hours service required on weekends or on holidays.
14. Tenant shall not move any safe, heavy machinery, heavy equipment, bulky
matter, or fixtures into or out of the building without Landlord's prior written
consent. If such safe, machinery, equipment, bulky matter or fixtures requires
special handling, all work in connection therewith shall comply with the
Administrative Code of the City of New York and all other laws and regulations
applicable thereof and shall be done during such hours as Owner may designate.
Address 233 Broadway
Premises Suite 1085
================================================================================
F.W. WOOLWORTH CO.
TO
EICO, INC.
================================================================================
STANDARD FORM OF
Office
Lease
The Real Estate Board of New York, Inc.
(c)Copyright 1963. All rights Reserved.
Reproductions in whole or in part prohibited.
================================================================================
Dated January 21, 1997
Rent per Year (With Electricity)
1-2 YRS: $11,147.52
Rent per Month (With Electricity)
1-2 Yrs. $928.96
Term Two (2) Years
From February 1, 1997
To JANUARY 31, 1999
Drawn by ............................. Checked by .........................
Entered by ........................... Approved by ........................
================================================================================
<PAGE>
RIDER attached to and forming part of Agreement of Lease, dated JANUARY 21,
1997, between F.W. WOOLWORTH CO., as Owner, and EICO, INC., as Tenant, for the
premises known as SUITE 1085 in the building known and described as 233
Broadway, City of New York, State of New York.
ARTICLE 37 - CONFLICT OF TERMS
In the event that any term, covenant, condition or agreement contained in
this rider to the lease shall conflict or be inconsistent with any term,
covenant, condition or agreement contained in the printed portion of this lease,
or the rules and regulations attached to this lease, then the parties agree that
the rider provision shall prevail, and in the case of inconsistencies with such
rules and regulations, such rules and regulations shall be deemed waived with
respect to Tenant to the extent of such inconsistency.
ARTICLE 38 - BASE ANNUAL RENT
Tenant shall pay to Owner base annual rent ("Base Annual Rent"), in the
following amounts, and which shall be payable at the time, and in the manner
provided in this lease:
1) From FEBRUARY 1, 1997 to JANUARY 31, 1999, a Base Annual Rent of
$10,080.00, payable in equal successive monthly installments of $840.00 on
the first day of each month. (Does not include Electricity, see Article
41.)
ARTICLE 39 - ASSIGNMENT
A. Tenant shall not assign this lease or any of its rights, obligations or
interests in all or any part of the demised premises without Owner's express
prior written consent, which consent may be unreasonably withheld or delayed,
and any attempted assignment without Owner's prior written consent shall be null
and void. Without limiting ARTICLE 39(E), any change in ownership or control of
Tenant shall be deemed an assignment subject to the provisions of this ARTICLE.
B. Notwithstanding the foregoing, Tenant may assign all of its interest In
and to this lease if (i) said assignment is in conjunction with the sale of
Tenant's business or the transfer of all or substantially all of Tenant's assets
and (ii) Owner grants its prior written consent to such assignment, which
consent Owner agrees it will not unreasonably withhold if:
1. Tenant is not then in default under any of the terms, covenants,
conditions, provisions or agreements of this lease;
2. Any assignee shall agree to assume and to perform faithfully and to
be bound by all of the terms, conditions, covenants, provisions and
agreements of this lease; and the proposed assignment and assumption shall
be submitted to Owner for approval prior to its effective date, which
approval shall not be unreasonably withheld;
3. Such assignment is to a party who intends to carry on Tenant's
business in the manner and style as set forth in this lease;
4. The proposed assignee has sufficient financial resources and net
worth to operate its business and, without limiting the foregoing, to pay
for the cost of owning and operating Tenant's business;
6. Tenant and proposed assignee provide Owner with written
documentation and other information as Owner may reasonably require in
order that Owner shall be able to ascertain if the conditions of this
entire ARTICLE have been complied with;
<PAGE>
7. The financial condition and general reputation of the proposed
assignee are consistent with the extent of the obligations undertaken by it
in this Lease and Owner has been furnished with reasonable proof thereof;
8. The proposed assignee is (x) engaged in a business or profession
and the demised premises will be used in a manner consistent with the uses
permitted hereunder and the character of the tenancies existing in the
building at the time of the proposed assignment and (y) a United States
citizen or citizens or a corporation qualified to do business in the State
of New York and organized and existing under the laws of one of the States
of the United States;
9. Tenant shall pay as additional rent to Owner the following amount:
any consideration payable by assignee to Tenant on account of the
assignment (less actual and reasonable out-of-pocket brokerage, alteration,
legal and other customary costs incurred by Tenant in the making of such
assignment), with such additional rent payment to be made by Tenant within
10 days after receipt of same by Tenant from any assignee approved in
accordance with this ARTICLE;
10. The proposed assignee is not then an occupant of any part of the
building, nor a party who dealt with Owner or Owner's agent, directly or
through a broker, with respect to space in the building during the 12
months immediately preceding Tenant's request for Owner's consent;
11. Any such assignment shall not impose any costs whatsoever on Owner
or increase the burden on the building's operating systems;
12. An original or duplicate original of the assignment (and any other
documents relating to the assignment or the transaction of which it is a
part) shall be delivered to Owner within ten (10) days following the making
thereof; and
13. Tenant shall not have advertised or publicized in any way the
availability of the demised premises without the prior consent of Owner,
which consent shall not be unreasonably withheld or delayed, it being
agreed that discussing the possibilities for assigning with one or more
brokers shall not be construed as advertising or publicizing the
availability of the demised premises and distributing "brokers' circulars"
which do not specify a rental shall be permitted.
C. Tenant shall not be released by reason of any assignment from liability
for the past, present or future performance by the tenant of any of the terms,
covenants and conditions in this lease on the part of the tenant hereunder to be
observed
D. In no event shall Tenant be entitled to make, nor shall Tenant make, any
claim, and Tenant hereby waives any claim, for money damages, nor shall Tenant
claim any money damages by way of set-off, counterclaim or defense, based upon
any claim or assertion by Tenant that Owner has unreasonably withheld or
unreasonably delayed any consent or approval to a proposed assignment as
provided for above, but Tenant's sole remedy shall be an action or proceeding to
enforce such provision, or for specific performance, injunction or declaratory
judgment.
E. Any transfer by operation of law or otherwise of Tenant's interest in
this lease or of any percentage interest in Tenant (whether stock, partnership
interest, membership interest or otherwise) in a single transaction or a related
series of transactions or any increase in the amount of issued and/or
outstanding shares of capital stock of any corporate Tenant and/or the creation
of one or more additional classes of capital stock of any corporate Tenant, in a
single transaction or a related series of transaction, with the result that the
beneficial interest and record ownership in and to such Tenant shall no longer
be identically held in the same proportion by the beneficial and record owners
of the capital stock of such corporate Tenant as of the date hereof, or the date
on which such
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corporation shall become the Tenant hereunder (whichever is later), shall be
deemed an assignment of this lease within the meaning of ARTICLE 11, except for
a transfer or related series of transfers as a result of the death of a
shareholder or other principal in Tenant.
F. If Tenant's interest in this lease be assigned or if the demised
premises or any part thereof be sublet or occupied by anyone other than Tenant
in violation of any provision of this lease, Owner may collect rent from the
assignee, subtenant or occupant and apply the net amount collected to the Base
Annual Rent and all additional rent herein reserved, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of the provisions
of this lease or any default hereunder or the acceptance of the assignee,
subtenant or occupant as tenant or a release of Tenant from the further
observance or performance by Tenant of all of the covenants, conditions, terms
and provisions on the part of Tenant to be performed or observed.
ARTICLE 40 - SUBLETTING
A. If Tenant desires to sublet all or only part of the demised premises,
Tenant shall give written notice thereof to Owner at least sixty (60) days prior
to the commencement date of the proposed sublease, specifying the total square
foot area and location of the space Tenant wishes to sublet, as well as the
proposed term of the subletting and the identity of the subtenant and any other
information requested by Owner and requesting Owner's consent thereto. Upon
receipt of such notice, Owner shall have the option, to be exercised within 30
days after receipt of such notice, to cancel and terminate this lease only as to
such portion of the demised premises proposed to be sublet or to sublease from
Tenant such portion of the demised premises as was to be subleased on the same
material terms and conditions as the proposed sublease, such termination and
cancellation or sublease, as the case may be, to take effect as of the proposed
effective date of the sublease as stated in Tenant's notice. If Tenant's notice
stated that the proposed sublease was to be effective upon Owner's consent
thereto, then such cancellation on sublease shall be deemed to be effective
sixty (60) days after Tenant's notice. If Owner exercises such option to cancel,
rent and all other charges paid hereunder shall be proportionately adjusted as
of the date of cancellation.
B. In the event that Owner does not exercise such right to cancel or
sublease, then Owner shall not unreasonably withhold or delay its consent to the
proposed subletting if:
1. Tenant shall not have:
(i) advertised or publicized in any way the availability of the
demised premises without prior notice to and written
approval by Owner; or
(ii) listed the demised premises for subletting, whether through
a broker, agent, representative, or otherwise at a rental
rate less than the greater of (1) the Base Annual Rent and
additional rent then payable hereunder for such space, or
(2) the Base Annual Rent and additional rent at which Owner
is then offering to lease other space in the building;
2. The financial condition and general reputation of the proposed
subtenant are consistent with the extent of the obligations undertaken by
it in the proposed sublease and Owner has been furnished with reasonable
proofs thereof;
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3. The proposed subtenant is (x) engaged in a business or profession
and the demised premises (or portion thereof to be sublet) will be used in
a manner consistent with the uses permitted hereunder and the character of
the tenancies existing in the building at the time of the proposed
subletting and (y) a United States citizen or citizens or a corporation
qualified to do business in the State of New York and organized and
existing under the laws of one of the States of the United States;
4. The amount of the fixed annual rent and additional rent to be paid
by the proposed subtenant is not less than the current area market rent at
the time of the proposed subletting as determined by Owner;
5. Tenant shall pay as additional rent to Owner the amount, if any, by
which the fixed annual rent and additional rent and any other consideration
payable by subtenant to Tenant exceeds the Base Annual Rent and additional
rent paid by Tenant to Owner and allocable to that part of the demised
premises to be sublet (less actual out-of-pocket brokerage and alteration
costs incurred by Tenant in the making of such sublease, in each case
amortized on a straight-line basis over the term of the sublease), with
such additional rent payments to be made monthly by Tenant within ten (10)
days after receipt of same by Tenant from any subtenant approved in
accordance with this ARTICLE;
6. The proposed subtenant is not then an occupant of any part of the
building, nor a party who dealt with Owner or Owner's agent, directly or
through a broker, with respect to space in the building during the twelve
(12) months immediately preceding Tenant's request for Owner's consent;
7. Any such subletting shall not impose any costs whatsoever on Owner
or increase the burden on the building's operating systems;
8. Tenant is not then in default under any of the terms, covenants,
conditions, provisions or agreements of this lease;
9. An original or duplicate original of the sublease shall be
delivered to Owner within five (5) days following the making thereof;
10. The sublease shall specifically state that (a) no further
subletting and no assignments thereof shall be allowed, (b) it is subject
to all of the terms, covenants and conditions of this lease, (c) the
proposed subtenant waives the provisions of any law now or hereafter in
effect which may give the proposed subtenant any right of election to
terminate the sublease or to surrender possession of the demised premises
in the event any proceeding is brought by Owner under this lease to
terminate this lease, and (d) in the event of termination, re-entry or
dispossess by Owner under this lease Owner may, at its option, take over
all of the right, title and interest of Tenant, as sublessor, under such
sublease, and such subtenant shall, at Owner's option, attorn to Owner
pursuant to the then executory provisions of such sublease, except that
Owner shall not:
(i) be liable for any previous act or omission of Tenant under
such sublease;
(ii) be subject to any offset, not expressly provided in such
sublease, which theretofore accrued to such subtenant
against Tenant; or
(iii) be bound by any previous modification of such sublease or
by any previous prepayment of more than one month's rent;
and
11. After giving effect to the proposed sublease, there shall be no
more than one occupant of the demised premises.
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C. Tenant shall not be released by reason of any subletting from the
performance of any of the terms, covenants and conditions in this lease.
D. In no event shall Tenant be entitled to make, nor shall Tenant make, any
claim, and Tenant hereby waives any claim, for money damages, nor shall Tenant
claim any money damages by way of set-off, counterclaim or defense, based upon
any claim or assertion by Tenant that Owner has unreasonably withheld or
unreasonably delayed any consent or approval to a proposed subletting as
provided for above, but Tenant's sole remedy shall be an action or proceeding to
enforce such provision, or for specific performance, injunction or declaratory
judgment.
E. Consent by Owner to any subletting shall not be construed to relieve
Tenant from obtaining the express consent in writing of Owner to any further
subletting.
F. In the event that Tenant has given Owner written notice, as provided in
ARTICLE 40(A) hereof, that Tenant desires to sublet the demised premises, and
that Owner does not elect to cancel this lease pursuant to Owner's option in
accordance with the terms of ARTICLE 40(A) hereof, then, unless a sublease has
been duly executed, delivered and approved option in accordance with ARTICLE
40(A), within sixty (60) days after Owner's receipt of the aforementioned
written notice from Tenant, the provisions of ARTICLE 40(A) hereof shall again
be applicable and the procedure therein set forth shall be required to be
followed with respect to such subletting as if the original and/or any prior
written notice by Tenant of its intention to sublet had not been given.
G. Anything in Articles 39 and 40 notwithstanding, Linda Ashley's tenancy
and occupancy shall not be considered an assignment or sublet and landlord
consents to her occupancy and tenancy.
ARTICLE 41 - ELECTRIC CURRENT
A. Subject to the provisions hereof, Owner will redistribute or furnish
electric current for the use of Tenant in the demised premises through presently
installed facilities for Tenant's reasonable use of such lighting, electrical
equipment and appliances as Owner may permit to be installed in the demised
premises. In consideration of Owner's furnishing of electric current hereunder,
Tenant shall, on the first day of each month of the term of this lease, pay as
additional rent the sum of $88.96 (i.e., $1,067.52 annually). Such rent,
however, shall be subject to future adjustment, proportionately, in the event of
any increase or decrease in the public utility rate schedule for the supply of
electricity to the building, or if any substantial changes are made in the
electrical equipment or appliances connected in the demised premises or in the
use thereof or if Tenant uses electric current other than during normal business
hours. Owner reserves the right to make surveys from time to time in the demised
premises covering the electrical equipment, appliances and fixtures, and time
and use of current, and Owner reserves the right (effective as of a date
reasonably designated by Owner's electrical consultant performing such survey)
to increase the additional rent payable hereunder based upon Tenant's use of
such electric current. In all matters relating to increases of rent or
additional rent resulting from any electrical survey performed for Owner, the
findings of the electrical consultant selected by Owner shall be conclusive and
binding upon the parties.
B. Tenant's use of electric current in the demised premises shall not at
any time exceed the capacity of any of the electrical conductors and equipment
in or otherwise servicing the demised premises. In order to insure that such
capacity is not exceeded and to avert possible adverse effect upon the building
electric service, Tenant shall not without Owner's prior written consent connect
any additional fixtures, appliances or equipment to the building electric
distribution system or make any alteration or addition to the electric system of
the demised premises.
C. Any riser or risers to supply Tenant's electrical requirements, upon
written request of Tenant, will be installed by Owner at the sole cost and
expense of Tenant, if, in Owner's sole judgment, the same are necessary and will
not cause damage or injury to the building or the demised premises or cause or
create a dangerous or hazardous condition or
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entail excessive or unreasonable alterations, repairs or expense or interfere
with or disturb other tenants or occupants. In addition to the installation of
such riser or risers, Owner will also, at the sole cost and expense of Tenant,
install all other equipment proper and necessary in connection therewith. As a
condition to granting Tenant's request, Owner may require Tenant to agree to an
increase in the additional rent payable under this ARTICLE. The amount of such
additional rent will reflect the value to Tenant of the additional service to be
furnished by Owner, that is, the maximum potential additional electrical energy
to be made available to Tenant based upon the estimated additional capacity of
such additional risers or other equipment as may be necessary. Such additional
value shall be determined solely in Owner's discretion, exercised in good faith,
which determination will be conclusive and binding upon Tenant. Tenant shall, on
demand, pay for the cost of installation as additional rent.
D. Owner shall not in any way be liable or responsible to Tenant for any
loss, damage or expense which Tenant may sustain or incur if either the quantity
or character of the electric current is changed or is no longer available or
suitable for Tenant's requirements, or if there be any cessation, diminution, or
interruption in the electric current, of for any other reason whatsoever. Owner
or, at Owner's option, Tenant shall furnish and install all replacement lighting
tubes, lamps, bulbs or ballasts required, at Tenant's expense, with such costs
to be paid on demand.
E. Owner reserves the right to terminate the furnishing of electricity
hereunder at any time, upon thirty (30) days written notice to Tenant, without
being liable to Tenant thereof or without in any way affecting this lease or the
liability of Tenant hereunder, and without causing a diminution of rent (except
as specifically provided below in this ARTICLE 41(E)), and the same shall not be
deemed to be a lessening or diminution of services within the meaning of any
law, rule or regulation now or hereafter enacted, promulgated or issued. In the
event Owner gives such notice of discontinuance, Tenant may make application
directly to the utility company servicing the building for Tenant's entire
separate supply of electric current and Owner shall permit its then existing
feeders, risers and wiring serving the demised premises, to the extent
available, suitable and safely capable to be used for such purpose, to be used
to supply electricity to Tenant. Owner, upon the expiration of the aforesaid
thirty (30) days' written notice to Tenant, may discontinue furnishing the
electric current, in which event, commencing with the date Tenant receives such
direct service, Tenant's additional rent payable under ARTICLE 41(A) shall be
fully abated and Base Annual Rent adjusted accordingly.
ARTICLE 42 - REAL ESTATE TAXES AND OPERATING EXPENSES
INTENTIONALLY OMITTED
ARTICLE 43 - HOLDOVER
In the event that Tenant shall hold over after the scheduled or earlier
expiration of the term of this lease, and if Owner shall then not proceed to
remove Tenant from the demised premises in the manner permitted by law, the
parties hereby agree that Tenant's occupancy of the demised premises after such
expiration of the term shall be construed as a month-to-month tenancy commencing
on the first day after the expiration of the term, which tenancy shall be upon
all of the terms set forth in this lease except:
1. Tenant shall pay on the first day of each month of the holdover
period, as fixed monthly rent, an amount equal to two times the monthly
installment of Base Annual Rent and additional rent payable by Tenant
immediately prior to the holdover period, and
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2. Owner shall not be required to perform any work, furnish any
materials or make any repairs within the demised premises. Tenant agrees
that such amounts constitute a fair and reasonable sum for Tenant's use of
the demised premises after the scheduled term and is not intended to be a
penalty.
ARTICLE 44 - LATE PAYMENTS
If Tenant shall fail to pay when due any installment of Base Annual Rent or
any payments of additional rent for a period of fifteen (15) days after such
installment or payment shall become due, Tenant shall pay as a penalty or late
charge to Owner the sum of eight percent (8%) of such unpaid installment, and
such penalty or late charge shall be deemed additional rent payable on demand.
ARTICLE 45 - RELATIONSHIP OF PARTIES
It is understood and agreed that the relationship of the parties hereto is
strictly that of Owner and Tenant and that Owner has no ownership in Tenant's
enterprise and that this lease shall not be construed as a joint venture or
partnership. Tenant is not and shall not be deemed to be an agent or
representative of Owner.
ARTICLE 46 - EXECUTION AND DELIVERY OF LEASE
Submission by Owner of this lease for review and execution by Tenant shall
confer no rights nor impose any obligations on either party. This lease shall be
of no force and effect unless and until both Owner and Tenant shall have
executed this lease and duplicate originals thereof shall have been delivered to
the respective parties hereto.
ARTICLE 47 - TENANT'S CONDUCT OF BUSINESS
AND MAINTENANCE OF PREMISES
Tenant covenants and agrees:
1. To do all things necessary to keep the demised premises clean,
orderly and neat at all times;
2. That all garbage, rubbish and like matter will, at all times, be
kept within the confines of the demised premises in such manner that no
odors therefrom will emanate from the demised premises;
3. That Tenant shall conduct its operations in the demised premises in
an orderly and proper manner so as not to annoy, disturb or be offensive to
others;
4. Not, at any time, to discharge into the plumbing, sewerage or
drainage system any waste material which will result in the creation of a
blockage in said system or otherwise adversely affect the proper and clean
maintenance and operation thereof; and
5. Not, in any way, to obstruct the common areas of the building of
which the demised premises form a part.
ARTICLE 48 - OFFICE EXTERIOR
A. All signs, advertisements or notices placed within the windows or on the
doors of the demised premises by Tenant shall be subject to the prior written
approval of Owner, and, if any be affixed or inscribed without such prior
approval, Owner, at the sole cost and expense of Tenant, shall have the right to
remove such signs, advertisements or notices. Landlord consents to placement of
names "EICO Electronic Instrument Co. Inc." and LINDA ASHLEY on door and lobby
directory.
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B. Tenant shall not make or suffer any installation, change or alterations
to or decoration of the exterior of the demised premises.
ARTICLE 49 - BROKERAGE
Tenant represents and warrants to Owner that, in the negotiation of this
lease, Tenant has not dealt with any broker, finder or other person. Tenant
agrees to and shall indemnify and hold harmless Owner from any and all losses,
costs, damages and expenses arising out of or in connection with claims of any
kind which assert the inaccuracy or breach of the above representations and
warranties, including, without limitation, reasonable attorneys' fees and court
costs.
ARTICLE 50 - COVENANT AGAINST LIENS
If, because of any act or omission (or alleged act or omission) of Tenant,
any mechanic's lien or other lien, charge or order for the payment of money
shall be filed against Owner or any portion of the premises of which the demised
premises form a part (whether or not such lien, charge or order is valid or
enforceable as such), Tenant shall, at its own cost and expense, cause same to
be discharged of record within fifteen (15) days after notice to Tenant of the
filing thereof; and Tenant shall indemnify and save harmless Owner against and
from all costs, liabilities, suits, fees, costs (including reasonable attorneys'
fees) and disbursements resulting therefrom. If Tenant fails to comply with the
foregoing provisions, Owner shall have the option of discharging or bonding any
such lien, charge or order and Tenant agrees to reimburse Owner for all costs
and expenses incurred in removing said lien of record (as additional rent) with
interest at the rate of 20% per annum or the maximum legal rate which may be
charged Tenant, whichever is less, payable promptly upon demand. Nothing in this
lease contained shall be deemed or construed in any way as constituting the
consent or request of Owner, express or implied, to any contact, sub-contractor
or material man for the performance of any labor or the furnishing of any
material for any specified improvement, alteration or repair to the building of
which the demised premises are a part or as giving Tenant a right, power or
authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of any lien
against the building or any part thereof.
ARTICLE 51 - TENANT'S CERTIFICATE
A. Tenant shall execute and acknowledge at any time and from time to time
within ten (10) days after request by Owner a certificate prepared by Owner
which states:
1. That this lease is unmodified and in full force and effect (or, if
there have been modifications, that the same are in full force and effect
as modified and stating the modifications);
2. Whether there are then existing any setoffs or defenses against the
enforcement of any of the agreements, terms, covenants or conditions hereof
upon the part of Tenant to be performed or complied with (and, if so,
specifying the same); and
3. The dates, if any, to which the rental and other charges hereunder
have been paid in advance.
B. Notwithstanding the foregoing, Owner may request that Tenant provide a
full and accurate statement of facts as otherwise set forth in the certificate
prepared by Owner or at Owner's direction concerning this lease or the tenancy
permitted hereunder. Tenant shall forward the executed and acknowledged
certificate in an enclosed addressed postpaid envelope to the address stated
thereon. Tenant understands and agrees that Owner and any prospective or actual
purchaser, ground lessor, and/or mortgagee may rely upon any such certificate
delivered by Tenant.
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ARTICLE 52 - ATTORNEYS' FEES, WAIVER
OF COUNTERCLAIMS AND WAIVER OF TRIAL BY JURY
A. In the event that it shall be necessary for Owner to institute any suits
or proceedings against Tenant for the nonpayment of Base Annual Rent or
additional rent or for the violation of any of the covenants or provisions of
this lease or for the recovery of possession of the demised premises, or should
Owner be compelled or elect to intervene in any action or proceeding wherein
Tenant is a party in order to enforce or protect Owner's interest or rights,
then, and in any of such events, Tenant shall be obligated to pay Owner's
reasonable, attorneys' fees, costs and disbursements incurred for the
institution and prosecution of any such suits, proceedings or interventions.
B. In any suit or proceeding, including any summary proceeding, against
Tenant, its successors or assigns, service of process on the party in possession
of the demised premises shall be deemed good and effective personal service upon
Tenant and upon all successors to this lease, if any, for all purposes,
including for judgment of possession and money judgment for rent.
C. Tenant hereby expressly waives its right to allege or assert any
counterclaim or offset in any summary proceeding commenced in connection with
this lease. Tenant and Owner waive any right to a jury trial with respect to any
suit or proceeding regarding this lease. Tenant also agrees that it will not
move to consolidate the summary proceeding with any other action.
ARTICLE 53 - DEMISED PREMISES, FIXTURES
AND EQUIPMENT "AS IS"
A. Tenant accepts the demised premises, as well as any and all fixtures and
equipment located therein or appurtenant thereto, "as is", in their present
condition on the date of this lease. Owner shall not be obligated to do any
construction or other work to prepare the demised premises for Tenant's
occupancy.
ARTICLE 54 - SUBORDINATION; PREMISES SUBJECT TO RESTRICTIONS
OF RECORD; ATTORNMENT
A. It is expressly agreed and understood that Tenant's interest in the
demised premises and in this lease is subject to any and all easements,
covenants and restrictions of record affecting the demised premises or any
portion thereof, and Owner makes no warranties or representations with respect
thereto.
B. The ground and underlying leases and mortgages referred to in ARTICLE 7
and to which this lease is subject and subordinate are hereinafter sometimes
called "superior leases" and "superior mortgages", respectively, and the lessor
of a superior lease or its successor in interest at the time referred to is
hereinafter sometimes called the "lessor" of such superior lease. No prepayment
of more than one month's installment of the annual rental shall be valid or
binding upon the holder of a superior mortgage or the lessor of a superior lease
unless expressly approved in writing by such holder or lessor or any of its
predecessors in interest.
C. If the lessor of a superior lease or the holder of a superior mortgage
shall succeed to Owner's estate in the building or the rights of Owner under
this lease, whether through possession or foreclosure action or delivery of a
new lease or a deed or otherwise, then at the election of such party so
succeeding to Owner's rights (herein sometimes called "successor landlord"),
Tenant shall attorn to and recognize such successor landlord as Tenant's
landlord under this lease, and shall promptly execute and deliver any instrument
in recordable form that such successor landlord may reasonably request to
evidence such attornment. In confirmation thereof, Tenant also hereby
irrevocably appoints such successor landlord Tenant's attorney-in-fact to
execute and deliver such instrument for and
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on behalf of Tenant. Tenant hereby waives any right Tenant may have under any
present or future law to terminate this lease or surrender the demised premises
by reason of the institution of any proceeding to terminate a superior lease or
action to foreclose a superior mortgage and this lease shall not be affected by
any such proceeding or action unless and until the lessor of the superior lease,
or holder of the superior mortgage, elects in such proceeding or action to
terminate this lease. Nothing contained herein will be deemed to impair any
right, privilege or option of any lessor of a superior lease or holder of a
superior mortgage. Without limiting the foregoing, the provisions of this
ARTICLE 54(C) shall be self-operative.
ARTICLE 55 - ADDITIONAL RENT
All payments, charges or assessments of whatsoever nature to be made by
Tenant in accordance with this lease, other than Base Annual Rent, shall be
construed so as to constitute additional rent hereunder and shall be payable
without set-off or deduction, whether or not so specified elsewhere in this
lease. The failure to make any such payment, charge or assessment shall be
deemed to be a default by Tenant in the payment of the rent reserved herein, and
Owner shall have all remedies available for the non-payment of rent, which
remedies shall be cumulative and not exclusive.
ARTICLE 56 - NON-LIABILITY
Owner shall have no responsibility to Tenant for the protection of the
demised premises or the contents thereof, it being the express sole
responsibility of Tenant to secure the demised premises. Tenant understands and
agrees that Owner will not be obligated to carry insurance of any kind on any
personal property in the demised premises (regardless of whether such property
shall be owned by Tenant) including, but not limited to, Tenant's goods,
supplies, furnishings, furniture, fixtures, equipment, improvements,
betterments, installations or appurtenances. Tenant hereby waives any and all
right of recovery which it might otherwise have against Owner, any managing
agent, fee owner or mortgagee and their respective officers, directors, agents,
contractors, servants and employees for loss or damage to such property or any
part thereof, to the same extent that Tenant's insurer's right of subrogation
would be waived if insurance coverage with waiver of subrogation provisions were
being maintained by Tenant upon all of such property. The provisions of this
ARTICLE shall also apply to each permitted assignee, if any, and each permitted
subtenant, if any, at any time occupying the demised premises or any part
thereof.
ARTICLE 57 - BUILDING DIRECTORY
Owner's acceptance of any name for listing on the Building Directory will
not be deemed, nor will it substitute for, Owner's consent, as required by this
lease, to any sublease, assignment, or other occupancy of the demised premises.
ARTICLE 58 - SEVERABILITY
If any part or provision of this lease shall be deemed invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity of this lease but such invalid or unenforceable provision
shall be deemed deleted and the remainder of the agreement shall remain in full
force and effect as if such invalid or unenforceable provision had never been
contained herein.
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ARTICLE 59 - ENTIRE AGREEMENT
This lease embodies all of the terms and conditions of the agreement
between the parties with respect to the subject matter hereof. All prior
agreements, communications or understandings between the parties with respect to
the subject matter hereof are merged herein and shall be of no further force or
effect.
ARTICLE 60 - LIMITATION OF LIABILITY
Notwithstanding anything contained to the contrary in this lease, whether
express or implied, it is agreed that Tenant will look only to Owner's interest
in and to the Property for the collection of any judgment (or other judicial
process) requiring the payment of money by Owner in the event of a breach or
default under this lease by Owner or any other dispute between Tenant and Owner,
and no other property or assets of Owner or its directors, officers,
shareholders, partners, members, managers or other principals (disclosed or
undisclosed) shall be subject to levy, execution or other enforcement procedures
for the satisfaction of any such judgment (or other judicial process) under or
with respect to this lease, the relationship of Owner and Tenant hereunder, or
Tenant's use and occupancy of the demised premises.
ARTICLE 61 - LEASE MODIFICATIONS
If, in connection with obtaining financing or refinancing for the building,
a banking, insurance or other institutional lender shall request reasonable
modifications to this lease as a condition to such financing or refinancing,
Tenant will not unreasonably withhold, delay or defer its consent thereto,
provided that such modifications do not increase the obligations of Tenant
hereunder (except, perhaps, to the extent that Tenant may be required to give
notices of any defaults by Owner to such lender and/or permit the curing of such
defaults by such lender together with the granting of such additional time for
such curing as may be required for such lender to get possession of the said
building) or materially adversely affect the leasehold interest hereby created.
In no event shall a requirement that the consent of any such lender be given for
any modification of this lease or for any assignment or sublease be deemed to
materially adversely affect the leasehold interest hereby created.
ARTICLE 62 - INDEMNIFICATION
Supplementing and not limiting ARTICLE 8 of the printed form of this lease,
Tenant covenants and agrees to indemnify and save harmless, Owner and any
managing agent, fee owner and any mortgagee and any lessor under any ground or
underlying lease, and their respective contractors, agents, officers and
employees, licensees and invitees, from and against any and all liability
(statutory or otherwise), claims, suits, demands, damages, judgments, costs,
interest and expenses (including, but not limited to, counsel fees and
disbursements incurred in the defense of any action or proceeding), to which
they may be subject or which they may suffer by reason of, or by reason of any
claim for, any injury to, or death of, any person or persons (including, without
limitation, Owner, its agents, contractors, employees, licensees and invitees)
or damage to property (including any loss of use thereof) or otherwise arising
from or in connection with the occupancy or use of or from any work,
installation or thing whatsoever done in, at or about the demised premises prior
to, during, or subsequent to, the term or arising from any condition of the
demised premises or resulting from any default by Tenant in the performance of
Tenant's obligations under this lease or from any act, omission or negligence of
Tenant or any of Tenant's officers, directors, agents, contractors, employees,
subtenants, licensees or invitees.
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ARTICLE 63 - OWNER'S PROFESSIONALS' FEES
If Tenant or (with Tenant's authorization) any subtenant requests Owner's
consent or approval to alterations, subletting or any other matter or thing
requiring Owner's consent or approval under this lease, and if in connection
with such request Owner seeks the advice of its attorneys, architect and/or
engineer, then Owner, as a condition precedent to granting its consent or
approval, may require (in addition to any other requirements of Owner in
connection with such request) that Tenant pay the fee of Owner's attorneys,
architect and/or engineer in connection with the consideration of such request
and/or the preparation of any documents pertaining thereto, and Tenant shall pay
such costs on demand, whether or not the requested consent or approval is
granted.
ARTICLE 64 - RENT RESTRICTION
A. If at any time prior to, during or subsequent to the term, the rent,
additional rent and/or any other amounts payable by Tenant to Owner pursuant to
this lease (hereinafter collectively referred to as "Rents") shall be or become
uncollectible, reduced or required to be refunded, or shall be limited,
prohibited or in any way restricted for any period of time, by virtue of any
Federal, State, Municipal, public, governmental or quasi-governmental law,
decision, statute, ordinance, order, rule, requirement or regulation or
direction of any public officer or body (hereinafter individually and
collectively referred to as "Rent Restriction"), or if any such Rent Restriction
shall in any way adversely affect the terms and conditions of this lease as
originally contemplated and intended by and between Owner and Tenant, then in
any of such events Tenant hereby covenants and agrees promptly to enter into
such agreements and take such other steps as Owner may request and as may be
legally permissible to allow Owner to collect the maximum Rents which from time
to time during the continuance of any Rent Restriction may be legally
permissible, but not in excess of the amounts provided under this lease. Upon
the termination or repeal of any Rent Restriction or following any order,
decision or ruling that substantially restrains or prohibits the enforcement of
any Rent Restriction: (i) the Rents shall become and thereafter be payable in
accordance with the amounts originally contained herein for the period following
such termination, repeal, restraint or prohibition, all calculated as though
there had been no intervening Rent Restriction; and (ii) Tenant shall
immediately pay to Owner, as additional rent, to the maximum extent legally
permissible, an amount equal to (a) the Rents which would have been payable
pursuant to this lease but for the Rent Restriction, less (b) the Rents paid by
Tenant during the period the Rent Restriction was in effect.
B. Supplementing the provisions of ARTICLE 64 A but not in limitation
thereof, if prior to or during the term any Rent Restriction is adopted, enacted
or becomes effective, which grants Tenant any rights and/or privileges beyond
the date originally scheduled for the expiration of this lease or the sooner
termination of the term, Owner shall have the right, at its sole option, to
terminate this lease by giving Tenant written notice specifying the effective
date of termination which shall be not less than three (3) months from the date
of such notice.
C. The aforesaid provisions of this ARTICLE shall be in addition to and not
to the exclusion of any other remedies or payments that may be available to
Owner or to which Owner is entitled under this lease, at law, or in equity,
including, but not limited to, damages for holding over.
ARTICLE 65 - INSURANCE
In addition to the insurance required to be maintained by Tenant pursuant
to the provisions of ARTICLE 52D hereof, Tenant, at its expense, agrees to
obtain and keep in full force and effect at all times during the term of this
lease, and during any use, occupancy or possession of the demised premises prior
to the commencement date or subsequent to the expiration date, comprehensive
public liability and property damage
12
<PAGE>
insurance with a broad form contractual liability endorsement with a minimum
limit of liability of $1,000,000 for injury or death and damages to any one
person, of $1,000,000 for injury or death arising out of one occurrence, and
$1,000,000 for damage to property, naming Tenant as the insured and Owner,
Owner's managing agent and any superior lessors and mortgagees Tenant is
notified of as additional insureds, against any and all claims for personal
injury, death or property damage occurring in, upon, adjacent to, or connected
with the demised premises or any part thereof. Said insurance is to be written
in form reasonably satisfactory to Owner by good and solvent insurance companies
of recognized standing, admitted to do business in the State of New York which
shall be reasonably satisfactory to Owner. Tenant shall pay all premiums and
charges therefor. Such policies shall be noncancellable except upon ten (10)
days' advance written notice to Owner. The original insurance policies or
certificates shall be deposited with Owner together with any renewals or
replacements thereof or endorsements thereto. In the event Tenant shall fail to
obtain or to maintain such insurance, Owner may, but shall not be obligated to,
obtain the same, in which event the amount of the premium paid shall be paid by
Tenant to Owner upon demand as additional rent. Owner shall have the right at
any time and from time to time during the term of this lease on not less than
fifteen (15) days' notice to Tenant to require that Tenant reasonably increase
the amounts and/or types of coverage reasonably required to be maintained under
this ARTICLE to the amounts and or types of coverages then required by Owner of
tenants entering into new leases in the building and required in similar office
buildings in downtown Manhattan.
On or prior to the Commencement Date, Tenant shall deliver to Owner
appropriate certificates of insurance with respect to the insurance required to
be carried by Tenant pursuant to this ARTICLE. Evidence of each renewal or
replacement of a policy shall be delivered by Tenant to Owner at least twenty
(20) days prior to the expiration of such policy.
IN WITNESS WHEREOF, the parties have duly executed this Rider the day and
year first above written.
OWNER:
F. W. WOOLWORTH CO.
By: [ILLEGIBLE]
-----------------------------------
Name:
Title:
TENANT:
EICO Electronic Instrument Co. INC.
By: /s/ Linda Ashley
-----------------------------------
Name: Linda Ashley
Title: President
13
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