Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from
____________ to ______________
Commission File Number 0-15339
THE STROBER ORGANIZATION, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-2822910
(State of Organization (IRS Employer Identification Number)
or other Jurisdiction
of Incorporation)
550 Hamilton Avenue
BROOKLYN, NEW YORK 11232
(Address of principal executive office)
(718) 832-1212
(Registrant's telephone number,
including area code)
Indicate by check mark whether 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 (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to
filing requirements for the past 90 days.
Yes X No _____
COMMON STOCK $.01 PAR - SHARES ISSUED AND OUTSTANDING AT AUGUST 9, 1996 -
5,027,447
(Number of shares outstanding of each class of the Registrant's Common Stock)
<PAGE>
THE STROBER ORGANIZATION, INC. AND SUBSIDIARIES
INDEX
PAGE
Face Sheet............................................................1
Index.................................................................2
Part I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995........................3
Consolidated Statements of Operations for the
Three Months Ended June 30, 1996 and 1995..................4
Consolidated Statements of Operations
for the Six Months Ended June 30, 1996
and 1995...................................................5
Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1996 and 1995............6
Notes to Consolidated Financial Statements.................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................................8
Part II Other Information.........................................12
Part III Exhibits and Reports on Form 8-K..........................13
Signature............................................................14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The Strober Organization, Inc. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(In Thousands)
<S> <C> <C>
ASSETS JUNE 30, DEC. 31,
1996 1995
Current assets:
Cash $4,000 $6,007
Accounts receivable, net of allowance for 19,549 15,907
doubtful
accounts of $2,876 and $2,321 in 1996 and 1995,
respectively
Inventory 12,548 10,305
Deferred income taxes 921 921
Other current assets 505 347
Total current assets 37,523 33,487
Property and equipment, net 4,279 3,627
Goodwill, net of accumulated amortization of 6,621 6,726
$1,765
and $1,660 in 1996 and 1995, respectively
Other assets 752 704
Total assets $49,175 $44,544
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $510 $908
Revolving line of credit - -
Accounts payable 8,120 4,738
Accrued expenses and taxes 4,139 4,150
Total current liabilities 12,769 9,796
Long-term debt, less current installments 1,837 1,224
Total liabilities 14,606 11,020
Stockholders' equity:
Preferred stock, $.01 par value, 1000 shares -- --
authorized and unissued
Common stock, $.01 par value, 20,000 shares 52 52
authorized; issued: 5,218 and 5,027
outstanding
in 1996 and issued 5,178 and outstanding 4,987
in
1995
Additional paid-in capital 7,099 7,029
Retained earnings 28,201 27,189
Less: Treasury stock at cost, 191 shares in (783) (746)
1996
and 1995
Total stockholders' equity 34,569 33,524
Total liabilities and stockholders' equity $49,175 $44,544
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
The Strober Organization, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
(In thousands, except per share data) 1996 1995
<S> <C> <C>
Net sales $36,016 $34,035
Cost of goods sold 26,509 25,225
Gross profit 9,507 8,810
Selling, general and administrative 7,519 7,159
expenses
Income from operations 1,988 1,651
Other income (expense)
Interest expense (39) (58)
Interest income 113 84
Equity in earnings of joint venture 96 -
Gain on sale of fixed assets and other 163 (2)
income
Net income before income taxes 2,321 1,675
Provision for income taxes 975 687
Net income $1,346 $988
Net income per share $0.26 $0.19
Weighted average number of shares 5,173 5,227
outstanding
</TABLE>
The computation of fully diluted earnings per share
does not materially differ from that presented above.
See accompanying notes to consolidated financial statements.
<PAGE>
The Strober Organization, Inc. and Subsidiaries
Consolidated Statements of Operations
Six Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
(In thousands, except per share data) 1996 1995
<S> <C> <C>
Net sales $59,108 $62,202
Cost of goods sold 43,086 46,002
Gross profit 16,022 16,200
Selling, general and administrative 14,708 14,226
expenses
Income from operations 1,314 1,974
Other income (expense)
Interest expense (92) (112)
Interest income 232 189
Equity in earnings of joint venture 96 -
Gain on sale of fixed assets and other 193 28
income
Net income before income taxes 1,743 2,079
Provision for income taxes 732 852
Net income $1,011 $1,227
Net income per share $0.20 $0.24
Weighted average number of shares 5,153 5,217
outstanding
</TABLE>
The computation of fully diluted earnings per share
does not materially differ from that presented above.
See accompanying notes to consolidated financial statements.
<PAGE>
The Strober Organization, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995
(In thousands)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $1,011 $1,227
Adjustments to reconcile net income to net cash
(used
by) provided by operating activities:
Depreciation and amortization 720 695
Provision for estimated losses on accounts 358 384
receivable
Changes in operating assets and liabilities:
Accounts receivable (4,000) (1,422)
Inventory (2,243) (1,097)
Other assets (214) 38
Accounts payable 3,382 1,699
Accrued expenses and taxes (11) (224)
Net cash provided by (used by) operating (997) 1,300
activities
Cash flows from investing activities:
Additions to property and equipment, net (316) (392)
Cash flows from financing activities:
Repayment of long-term debt (727) (931)
Proceeds from exercise of stock options 70 9
Purchase of treasury stock (37)
Net cash (used by) financing activities (694) (922)
Net decrease in cash (2,007) (14)
Cash at beginning of period 6,007 3,890
Cash at end of period $4,000 $3,876
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
THE STROBER ORGANIZATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) UNAUDITED STATEMENTS
The accompanying unaudited consolidated financial statements and other
related financial information furnished reflect all adjustments which are, in
the opinion of management, necessary to a fair presentation of the financial
position as of June 30, 1996 and the results of operations and cash flows for
the six months ended June 30, 1996 and 1995.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is suggested
that these consolidated condensed financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's December 31, 1995 financial statements. The results of operations
for the period ended June 30, 1996 are not necessarily indicative of the
operating results for the full year.
(2) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. Significant intercompany balances and
transactions have been eliminated.
(3) STATEMENTS OF CASH FLOWS-SUPPLEMENTAL DISCLOSURES
Schedule of amounts paid for interest, income taxes and capital lease
obligations.
<TABLE>
<CAPTION>
In thousands
<S> <C> <C>
1996 1995
Interest paid $70 $ 95
Income taxes paid $280 $733
Capital lease obligations $940 $880
incurred for purchase of
equipment
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table sets forth certain income statement amounts expressed as a
percentage of sales:
<TABLE>
<CAPTION>
Three Three Six Months Six Months
Months Months Ended Ended
Ended Ended 6/30/96 6/30/95
6/30/96 6/30/95
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 73.6% 74.1% 72.9% 74.0%
Gross profit 26.4% 25.9% 27.1% 26.0%
SG&A expenses 20.9% 21.0% 24.9% 22.9%
Income from operations 5.5% 4.9% 2.2% 3.1%
Other income (expense) .9% .1% .7% .2%
Net income before income 6.4% 5.0% 2.9% 3.3%
taxes
Provision for income taxes 2.7% 2.0% 1.2% 1.3%
Net income 3.7% 3.0% 1.7% 2.0%
</TABLE>
RESULT OF OPERATIONS
SECOND QUARTER ENDED JUNE 30, 1996 COMPARED TO SECOND QUARTER ENDED JUNE 30,
1995
Net sales for the quarter ended June 30, 1996 increased by $2.0 million (6%)
compared to the same period in 1995. The increase in sales is primarily the
result of increased construction activity experienced in the Company's
marketing regions.
Gross profit increased by $697,000 (8%) in the second quarter of 1996 as
compared to the same period in 1995 due to the higher sales volume. Gross
profit as a percentage of sales increased from 25.9% to 26.4% in the second
quarter of 1996 compared to the same period in 1995.
Selling, general and administrative expenses increased by $360,000 (5%) in the
second quarter of 1996 compared to the same period in 1995.
The following table shows the components of the SG&A expenses:
THREE MONTHS ENDED
IN THOUSANDS 6/30/96 6/30/95
Delivery $3,004 $2,763
Selling 1,096 1,037
Administrative 3,419 3,359
$7,519 $7,159
The increase in delivery expenses of $241,000 resulted from increases in
variable delivery labor and trucking costs. Selling expenses increased by
$59,000 resulting from higher sales salaries and advertising costs.
Administrative expenses increased by $60,000 primarily due to higher legal
fees, facility maintenance and bad debt provisions (due to the higher second
quarter 1996 sales volume). The increase in administrative costs were
partially offset by reductions in insurance and health insurance benefits and
bonus provisions.
Other income-income from equity in joint venture of $96,000 represents the
Company's 50% ownership share of the earnings of Architectural Wall Systems LLC
(formed October 1995) for the six month period ended June 30, 1996. Gain on
sale of fixed assets and other income increased by $165,000 in the second
quarter of 1996 due primarily to gains on the sale of delivery equipment which
were replaced with new equipment during the quarter.
Income from operations increased $337,000 in the second quarter of 1996 to
$1,988,000 compared to $1,651,000 in the same period in 1995. This increase
resulted primarily from higher gross margin dollars resulting from higher sales
volume and partially offset by higher operating expenses. Net income before
taxes increased $646,000 in the 1996 second quarter to $2,321,000 compared to
$1,675,000 in the same period in 1995 due to increased operating income and
higher net interest and other income.
The net income for the second quarter of 1996 reflects an income tax provision
of $975,000 compared to a provision of $687,000 for the same period in 1995.
Net income for the second quarter ended June 30, 1996 increased $358,000 to
$1,346,000 compared to $988,000 in the same period in 1995.
SIX MONTH PERIOD ENDED JUNE 30, 1996 COMPARED TO SIX MONTH PERIOD ENDED JUNE
30, 1995
Net sales for the six month period ended June 30, 1996 decreased by $3.2
million (5%) compared to the same period in 1995. The decrease in sales is
primarily due to extremely severe weather conditions experienced in the
Northeast this winter as compared to milder weather conditions of the first
quarter of 1995. The record breaking snow that occurred during the first
quarter of 1996 halted outside construction activity for many of the Company's
customers and greatly hampered jobsite deliveries to those customers who could
continue to work.
Gross profit decreased by $178,000 (1%) in the first six months of 1996 as
compared to the same period in 1995 due to the lower first quarter sales
volume. Gross profit as a percentage of sales was 27.1% during the first six
months of 1996 compared to 26.0% in the same period in 1995.
Selling, general and administrative expenses increased by $481,000 (3%). The
following table shows the components of the SG&A expenses.
SIX MONTHS ENDED
IN THOUSANDS 6/30/96 6/30/95
Delivery $5,749 $5,452
Selling 2,129 2,039
Administrative 6,830 6,735
$14,708 $14,226
Delivery expenses increased $297,000 due primarily to higher facility rent,
delivery labor and trucking costs. Selling expenses increased by $90,000 due
to higher selling salaries partially reduced by lower advertising costs.
Administrative expenses increased $95,000 due primarily to higher legal fees,
facility maintenance and partially reduced by lower insurance, health benefits,
bad debt provisions and bonus provisions.
Income from operations decreased $660,000 in the six month period ended June
30, 1996 to $1,314,000 compared to $1,974,000 in the same period in 1995. This
decrease resulted primarily from the inclement weather related decrease in
sales volume that occurred in the first quarter of 1996. Net income before
taxes decreased $336,000 in the six month period ended June 30, 1996 to
$1,743,000 compared to $2,079,000 in the same period in 1995.
The net income for the six month period ended June 30, 1996 reflects an income
tax provision of $732,000 compared to $852,000 in the same period of 1995. Net
income for the six month period ended June 30, 1996 decreased $216,000 to
$1,011,000 compared to $1,227,000 in the same period in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company financed its operations in the first six months of 1996 without the
necessity of any borrowings other than capital lease transactions to fund
capital expenditures. The Company also maintains a revolving working capital
line of credit in the amount of $10,000,000 with the Chase Manhattan Bank, N.A.
Borrowings under the credit facility are made as needed, up to a maximum of 75%
of eligible accounts receivable and bear interest at the prime rate plus 1/2 a
percentage point or at the option of the Company at various fixed London
Interbank Offered Rate interest rates. The Company pledged as collateral for
the credit facility its accounts receivable and is required to maintain certain
financial covenants. At June 30, 1996, there were no balances owed under this
credit line. The Company believes that this credit facility will provide
sufficient working capital to support current and future operations and that an
extension or replacement of the revolving working capital line of credit will
be obtained.
In March 1995, the Company entered into a master lease agreement with Chase
Equipment Leasing Inc. to lease certain trucks and forklift equipment. The
agreement provides for a monthly rental payment adjusted upon changes in the 30
day London Interbank Offered Rate. The Company leased $804,000 of new delivery
equipment during the six month period ended June 30, 1996.
At June 30, 1996, the Company had no outstanding balance of subordinated notes
payable compared to $583,000 at December 31, 1995. These notes were issued
pursuant to the acquisition of The General Building Supply Company in January
1988. Although the notes were due September 1, 1996, a final payment was made
on June 1, 1996.
Capital expenditures, net of dispositions, amounted to $316,000 in the six
month period ended June 30, 1996, compared to $392,000 in the same period in
1995.
The Company will be relocating its Brooklyn, New York facility and corporate
headquarters when the current lease expires on December 31, 1996. The Company
has executed a new 10 year lease with The Port Authority of New York and New
Jersey covering premises at Pier 3 at the Brooklyn Marine Terminals. This
larger facility is approximately 2 miles from the present Brooklyn location.
Facility improvements and fixtures associated with the relocation is estimated
at $1,400,000. See "Other Information--Legal Proceedings."
The Company has entered into a 10 year renewal lease expiring on December 31,
2006 for its facility located at Valley Stream, New York.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
On July 31, 1996, an action entitled BROOKLYN BRIDGE PARK COALITION, INC.
V. PORT AUTHORITY OF NEW YORK AND NEW JERSEY AND THE STROBER ORGANIZATION, INC.
was commenced in the United States District Court, Eastern District of New
York. The Complaint alleges, among other things, common law prospective
nuisance arising out of the Company's planned relocation of its existing
Brooklyn, New York facility from the waterfront at 550 Hamilton Avenue to Pier
3, a distance of approximately two miles. The Plaintiff is seeking to restrain
the Company from constructing a building materials supply center on Pier 3.
The Company is currently evaluating the claims and intends to aggressively
defend the claim against the Company.
The Company is not a party to any other material legal proceedings. It
is, however, involved in litigation relating to claims arising out of its
operations in the normal course of business. Such claims against the Company
are generally covered by insurance. It is the opinion of management that any
uninsured liability resulting from such litigation would not have a material
adverse effect on the Company's business, financial position or earnings.
<PAGE>
PART III
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
10.1 Agreement of Lease made as of the 29th day of March, 1996 by
and between The Port Authority of New York and New Jersey and
Strober Bros., Inc. Building Supply Centers
10.2 Indenture of Lease made as of 1986 by and between JNR Realty
Company and Strober-L.I. Building Supply Centers, Inc. together
with lease amendatory agreement made as of July 1996 between
and among JNR Realty Company, Strober Long Island Building
Supply Centers, Inc. and The Strober Organization, Inc.
27 Financial Data Schedule
(b) Reports on Form 8-K:
There was a Report on Form 8-K filed on July 1, 1996 which
reported that the Company issued a press release on each of June 27,
1996 and July 1, 1996 announcing that the Company will be relocating
its Brooklyn, New York Facility and Corporate Headquarters and that
the Company had entered into a purchase agreement to acquire the
assets of Rowley Building Products Corp. and all the capital stock
of Rowley Building Products of New Jersey, Inc., respectively.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE STROBER ORGANIZATION, INC.
By: /S/ DAVID J. POLISHOOK
--------------------------------------
David J. Polishook
Chief Financial Officer and Treasurer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C> <C>
10.1 Agreement of Lease made as of the 29th day of March,
1996 by and between The Port Authority of New York and
New Jersey and Strober Bros., Inc. Building Supply
Centers
10.2 Indenture of Lease made as of 1986 by and between JNR
Realty Company and Strober-L.I. Building Supply
Centers, Inc. together with lease amendatory agreement
made as of July 1996 between and among JNR Realty
Company, Strober Long Island Building Supply Centers,
Inc. and The Strober Organization, Inc.
27 Financial Data Schedule
</TABLE>
<PAGE>
EXHIBIT 10.1
Agreement of Lease made as of the 29th day of March, 1996 by and between
The Port Authority of New York and New Jersey and Strober Bros., Inc. Building
Supply Centers
<PAGE>
MLPF-11551.1 LEASE NO. BP-276
AGREEMENT
between
THE PORT AUTHORITY
OF NEW YORK AND NEW JERSEY
and
STROBER BROS., INC.
BUILDING SUPPLY CENTERS
Dated as of March 29, 1996
<PAGE>
THIS AGREEMENT OF LEASE made as of the 29th day of March, 1996 by and
between THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called
"the Port Authority") body corporate and politic created by Compact between
the States of New York and New Jersey with the consent of the Congress of
the United States of America and having an office and place of business at
One World Trade Center, New York, New York 10048 and STROBER BROS., INC.
BUILDING SUPPLY CENTERS a New York corporation (hereinafter called "the
Lessee"), with an office and place of business at 550 Hamilton Avenue,
Brooklyn, New York 11232 whose representative is: Mr. Richard W. Young
WITNESSETH THAT:
The Port Authority and the Lessee, for and in consideration of the
covenants and mutual agreements hereinafter contained, do hereby agree as
follows:
ARTICLE I.The Port Authority hereby lets to the Lessee and the Lessee
and the Lessee hereby hires and takes from the Port Authority at Brooklyn-
Port Authority Marine Terminal (sometimes hereinafter called "the
Facility") in the City of New York, County of Kings, State of New York, the
following described premises:
The covered and enclosed are of the shed on Pier 3 shown in diagonal
crosshatching and its associated Building 174 and the open area shown in
diagonal crosshatching and stipple on the sketch attached hereto, hereby
made a part hereof and marked "Exhibit A", together with the buildings,
structures, fixtures, improvements, and other property, if any, of the Port
Authority located or to be located therein or thereon, the said areas,
buildings, structures, fixtures, improvements and other property of the
Port Authority being hereinafter called "the premises". The Port Authority
and the Lessee hereby acknowledge that the foregoing premises constitute
non-residential property.
ARTICLE II.The term of the letting shall commence at 12:01 o'clock
A.M. on July 1, 1996 and, unless sooner terminated, shall expire at 11:59
o'clock P.M. on June 30, 2006.
ARTICLE III.The Lessee shall pay a basic rental as set forth in
Special Endorsement No. 3.
ARTICLE IV.The Lessee shall use and occupy the premises for the
following purposes only, and for no other purpose whatsoever:
For the receipt, storage and/or distribution of lumber and
construction materials, a substantial portion of which is waterborne to the
Port of New York and New Jersey, as shall have the prior and continuing
consent of the Port Authority; and for the loading and unloading of
vehicles in connection with the operations being conducted by the Lessee at
the premises.
ARTICLE V.The Port Authority and the Lessee agree that the letting
shall be subject to and in accordance with, and the Lease and the Port
Authority each for itself agrees that it will perform all the obligations
imposed upon it by, the Terms and Conditions (Sections 1 through 30) hereof
and the following endorsements and attachments, all annexed hereto and made
a part hereto and made a part hereof, with the same effects as if the same
were set forth herein in full:
TITLE NUMBER DATE
Services Standard Endorsement No. L5.1 10/06/75
Brooklyn-Port Authority
Marine Terminal " " No. L19.7 10/06/64
Insurance " " No. 21.1 3/25/82
Abatement " " No. L27.4 10/06/68
Special Endorsements
Space Plan - Exhibit A
Schedule naming Rules, Regulations, Rates and Charges applying at Port
Authority Marine Terminals - Exhibit R
ARTICLE VI.The within, together with the said Terms and Conditions,
endorsements and attachments, constitutes the entire agreement of the Port
Authority and the Lessee on the subject matter, and may not be changed,
modified, discharged or extended except by written instrument duly executed
by the Port Authority and the Lessee. The Lessee agrees that no
representations or warranties shall be binding upon the Port Authority
unless expressed in writing in this agreement.
IN WITNESS WHEREOF, the Port Authority and the Lessee hereto have
executed these presents as of the date first above written.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY
ATTEST: By____________________________________
_________________ Title_________________________________
(SEAL)
STROBER BROS., INC. BUILDING SUPPLY CENTERS
ATTEST: By____________________________________
_________________ Title__________________________PRESIDENT
Secretary (CORPORATE SEAL)
<PAGE>
TERMS AND CONDITIONS
SECTION 1.INGRESS AND EGRESS
The Lessee shall have the right of ingress and egress between the
premises and the city streets outside the Facility. Such right shall be
exercised by means of such pedestrian or vehicular ways, to be used in
common with others having rights of passage within the Facility, as may
from time to time be designated by the Port Authority for the use of the
public. The use of any such way shall be subject to the rules and
regulations of the Port Authority which are now in effect or which may
hereafter be promulgated for the safe and efficient operation of the
Facility. The Port Authority may, at any time, temporarily or permanently
close, or consent to or request the closing of, any such way or any other
area at, in or near the Facility presently or hereafter used as such, so
long as a means of ingress and egress as provided above remains available
to the Lessee. The Lessee hereby releases and discharges the Port
Authority, and all municipalities and other governmental authorities, and
their respective successors and assigns, of and from any and all claims,
demands, or causes of action which the Lessees may now or at any time
hereafter have against any of the foregoing, arising or alleged to arise
out of the closing of any way or other area whether within or outside the
Facility. The Lessee shall not do or permit anything to be done which will
interfere with the free access and passage of others to space adjacent to
the premises or in any streets, ways and walks near the premises.
SECTION 2.GOVERNMENTAL AND OTHER REQUIREMENTS
(a) The Lessee shall procure from all governmental authorities having
jurisdiction of the operations of the Lessee hereunder, all licenses,
certificates, permits or other authorization which may be necessary for the
conduct of such operations.
(b) The Lessee shall promptly observe, comply with and execute the
provisions of any and all present and future governmental laws, rules,
regulations, requirements, orders and directions which may pertain or apply
to its operations or the use and occupancy of the premises hereunder, and
in addition shall make all improvements, repairs and alterations which may
be so required.
(c) The obligation of the Lessee to comply with governmental
requirements is provided herein for the purpose of assuring proper
safeguards for the protection of persons and property in or near the
Facility and proper operation by the Lessee. Such provision herein is not
to be construed as a submission by the Port Authority to the application to
itself of such requirements or any of them.
SECTION 3.RULES AND REGULATIONS
(a) The Lessee covenants and agrees to observe and obey (and to
compel its officers, employees and others on the premises with its consent
to observe and obey) the Rules and Regulations of the Port Authority as now
supplemented and now in effect, and such further reasonable rules and
regulations (including amendments and supplements thereto) for the
government of the conduct and operations of the Lessee as may from time to
time during the letting be promulgated by the Port Authority for reasons of
safety, health, or preservation of property, or for the maintenance of the
good and orderly appearance of the premises, or for the safe or efficient
operation of the Facility. The Port Authority agrees that, except in cases
of emergency, it will give notice to the Lessee of every such further rule
or regulation at least five (5) days before the Lessee shall be required to
comply therewith.
(b) If a copy of the Rules and Regulations is not attached, then the
Port Authority will notify the Lessee thereof by either delivery of a copy,
or by publication in a newspaper published in the Port of New York District
by making a copy available at the office of the Secretary of the Port
Authority.
(c) No statement or provision in the said Rules and Regulations shall
be deemed a representation or promise by the Port Authority that the
services or privileges described shall be or remain available, or that the
charges, prices, rates or fees stated therein shall be or remain in effect
throughout the letting, all of the same being subject to change by the Port
Authority from time to time whenever it deems a change advisable.
SECTION 4.METHOD OF OPERATION
(a) In the performance of its obligations hereunder and in the use of
the premises the Lessee shall conduct its operations in an orderly and
proper manner, so as not to annoy, disturb or be offensive to others near
the premises or at the Facility and within twenty four hours remove the
cause of any objection made by the Port Authority relative to the demeanor,
conduct or appearance of any of the employees of the Lessee or others on
the premises with the consent of the Lessee.
(b) The Lessee shall not allow any garbage, debris or other waste
materials (whether solid or liquid) to collect or accumulate on the
premises and the Lessee shall remove from the premises and from the
Facility all garbage, debris and other waste materials (whether solid or
liquid) arising out of its operations hereunder. Any such material which
may be temporarily stored shall be kept in suitable waste receptacles, the
same to be made of metal and equipped with tight-fitting covers, and in any
case to be designed and constructed to contain safely the waste material
placed by the Lessee therein. The receptacles shall be provided and
maintained by the Lessee and shall be kept covered except when being filled
or emptied. The Lessee shall use extreme care when effecting removal of
all such material, shall effect such removal at such times and by such
means as first approved by the Port Authority, and shall in no event make
use of any facilities or equipment of the Port Authority except with the
prior consent thereof.
(c) The Lessee shall not do or permit to be done anything which may
interfere with the effectiveness or accessibility of the utility,
mechanical, electrical and other systems installed or located anywhere at
the Facility.
(d) The Lessee shall not commit any nuisance or permit its employees
or others on the premises with its consent to commit or create or continue
or tend to create any nuisance on the premises or in or near the Facility.
(e) The Lessee shall take all reasonable measures to keep the sound
level of its operations as low as possible and to eliminate vibrations
tending to damage the premises or the Facility or any part thereof.
(f) The Lessee shall not cause or permit to be caused or produced
upon the premises, to permeate the same or to emanate therefrom, any
unusual, noxious or objectionable smokes, gases, vapors or odors.
(g) The Lessee shall not do or permit to be done any act or thing at
the Facility which shall or might subject the Port Authority to any
liability or responsibility for injury to any person or persons or damage
to any property.
(h) The Lessee shall not overload any floor, roof, land surface,
bulkhead, pavement, landing, pier or wharf at the Facility, and shall
repair, replace or rebuild any such, including but not limited to
supporting members, damaged by overloading. For the purpose of this
paragraph (h), any placing on the premises of a load per square foot in
excess of the number of pounds avoirdupois, if any, stated in any Special
Endorsement hereto shall constitute overloading, but an overload may be
created by a lesser weight. Nothing in this paragraph or elsewhere in this
Agreement shall be or be construed to be a representation by the Port
Authority of the weight capacity of any part of the Facility.
(i) The Lessee shall not do or permit to be done any act or thing
upon the premises or at the Facility which (1) will invalidate or conflict
with any fire insurance policies covering the premises or any part thereof,
or the Facility, or any part thereof or (2) which, in the opinion of the
Port Authority, may constitute an extra-hazardous condition, so as to
increase the risks normally attendant upon the operations permitted by this
Agreement, or (3) which will increase the rate of any fire insurance,
extended coverage or rental insurance on the Facility or any part thereof
or on the contents of any building thereon. The Lessee shall promptly
observe, comply with and execute the provisions of any and all present and
future rules and regulations, requirements, orders and directions of the
National Fire Protection Association and, if the premises are located in
New York, of the Insurance Services Office of New York, or, if the premises
are located in New Jersey, of the Insurance Services Office of New Jersey,
or of any other board or organization exercising or which may exercise
similar functions, which may pertain or apply to the operations of the
Lessee on the premises, and the Lessee shall, subject to and in accordance
with the provisions of this Agreement relating to construction by the
Lessee, make any and all structural and nonstructural improvements,
alterations or repairs of the premises that may be required at any time
hereafter by any such present or future rule, regulation, requirement,
order or direction. If by any reason of any failure on the part of the
Lessee to comply with the provisions of this paragraph any fire insurance,
extended coverage or rental insurance rate on the premises or any part
thereof, or on the Facility or any part thereof, shall at any time be
higher than it otherwise would be, then the Lessee shall pay to the Port
Authority that part of all premiums paid by the Port Authority which shall
have been charged because of such violation or failure by the Lessee.
(j) From time to time and as often as required by the Port Authority,
the Lessee shall conduct pressure, water-flow, and other appropriate tests
of the fire extinguishing system and fire-fighting equipment on the
premises whether furnished by the Port Authority or by the Lessee. The
Lessee shall keep all fire-fighting and fire extinguishing equipment well
supplied with a fresh stock of chemicals and with sand, water or other
materials as the case may be for the use of which such equipment is
designed, and shall train its employees in the use of all such equipment,
including in such training periodic drills.
SECTION 5.SIGNS
(a) Except with the prior consent of the Port Authority, the Lessee
shall not erect, maintain or display any advertising, signs, posters or
similar devices at or on the premises or elsewhere at the Facility.
(b) Upon demand by the Port Authority, the Lessee shall remove,
obliterate, or paint out any and all advertising, signs, posters and
similar devices placed by the Lessee on the premises or elsewhere on the
Facility and in connection therewith at the expiration or earlier
termination of the letting, shall restore the premises and the Facility to
the same condition as at the commencement of the letting. In the event of
a failure on the part of the Lessee so as to remove, obliterate or paint
out each and every sign or piece of advertising and so to restore the
premises and the Facility, the Port Authority may perform the necessary
work and the Lessee shall pay the costs thereof to the Port Authority on
demand.
SECTION 6.INDEMNITY
The Lessee shall indemnify and hold harmless the Port Authority, its
Commissioners, officers, employees and representatives, from all claims and
demands of third persons including but not limited to claims and demands
for death, claims and demands for personal injuries, and claims and demands
for property damages, arising out of the use or occupancy of the premises
by the Lessee or by others with its consent or out of any other acts or
omissions of the Lessee, its officers and employees on the premises or
elsewhere at the Facility, or out of the acts or omissions of others on the
premises with the consent of the Lessee, including claims and demands of
the party from which the Port Authority derives its rights in the Facility
for indemnification arising by operation of law or through agreement of the
Port Authority with such party.
SECTION 7.MAINTENANCE AND REPAIR
(a) The Lessee shall at all times keep the premises clean, and in an
orderly condition and appearance, together with all the fixtures, equipment
and personal property of the Lessee located in or on the premises.
(b) The Lessee shall repair, replace, rebuild and paint all or any
part of the premises which may be damaged or destroyed by the acts or
omissions of the Lessee or by those of its officers, employees or of other
persons on or at the premises with the consent of the Lessee.
(c) With respect to all parts of the premises, including but without
limitation thereto, such of the following as are or may be during the term
of the letting located in or on the premises: fences, the exterior and
interior of the building walls, the exterior and interior and operating
mechanisms of and attachments to windows and skylights, screens, roofs,
foundations, steel work, columns, the exterior and interior and operating
mechanisms of and attachments to doors, partitions, floors, ceilings,
inside and outside paved and unpaved areas, glass of every kind, and the
utility, mechanical, electrical and other systems, the Lessee shall take
the same good care of the premises that would be taken by a reasonably
prudent owner who desired to keep and maintain the same so that at the
expiration or termination of the letting and at all times during the
letting, the same (or a reconstruction of all or any part thereof) will be
in as good condition as at the commencement thereof (or, in the case of
improvements made during the letting hereunder, in as good condition as at
the time of the installation or construction thereof), except for
reasonable wear which does not adversely affect the watertight condition or
structural integrity of the building or other structures on the premises or
adversely affect the efficient or the proper utilization of any part of the
premises. To that end, the Lessee shall make frequent periodic inspections
and, from time to time as the necessity therefor arises and regardless of
the cause of the condition requiring the same, the Lessee shall perform all
necessary preventive maintenance including but not limited to painting (the
exterior of the building, areas of joint or common use and areas visible to
the general public to be painted in colors which have been approved by the
Port Authority), and, except under circumstances as set forth in paragraph
(a) of Section 8 of these Terms and Conditions, the Lessee shall make all
necessary repairs and replacements and do all necessary rebuilding with
respect to all parts of the premises, all of which shall be in quality
equal to the original in materials and workmanship and regardless of
whether such repairs and replacements are structural or non-structural,
ordinary or extraordinary, foreseen or unforeseen. The Lessee shall
commence to perform each of its obligations hereunder within twenty days
after notice from the Port Authority and shall thereafter continue the same
to completion with reasonable diligence.
(d) The obligation of the Lessee as set forth in paragraphs (b) and
(c) of this Section, in the event of damage or destruction covered by any
contract of insurance under which the Port Authority is the insured, is
hereby released to the extent that the loss is recouped by actual payment
to the Port Authority of the proceeds of such insurance; PROVIDED, HOWEVER,
that, if this release shall invalidate any such policy of insurance or
reduce, limit or void the rights of the Port Authority thereunder, then the
release shall be void and of no effect.
SECTION 8.CASUALTY
(a) In the event that, as a result of a casualty insured against in
favor of the Port Authority under the standard form of fire insurance
policy and extended coverage endorsement carried by it on any structure,
building or portion of a building which is or is a part of the premises,
the same is damaged (without the fault of the Lessee, its officers,
employees, or others on or at the premises with its consent) so as to
render it untenantable in whole or substantial part, then
(1) if, in the opinion of the Port Authority, the necessary
repairs or rebuilding can be completed within ninety (90) days after
the occurrence of the damage, the Port Authority shall repair or
rebuild with due diligence, and the rental hereunder shall be abated
as provided in this Agreement, for the period from the occurrence of
the damage to the completion of the repairs or rebuilding, whether or
not the work of repair or rebuilding is actually completed within the
said ninety (90) days; or
(2) if, in the opinion of the Port Authority, such repairs or
rebuilding cannot be completed within ninety (90) days after the
occurrence of the damage, or if one or more of the structures or
buildings which are a part of the premises or the entire premises
require rebuilding, then the Port Authority shall have options: (i)
to proceed with due diligence to repair or to rebuild as necessary or
(ii) to terminate the letting as to the damaged structure or
structures, building or buildings or portion thereof only; or (iii) to
cancel this Agreement and terminate the letting as to the entire
premises; and the rental payable under this Agreement shall be abated,
as provided in this Agreement, either, as the case may require, for
the period from occurrence of the damage to the completion of repairs
and rebuilding, or for the period from the occurrence of the damage to
the completion of repairs and rebuilding, or for the period from the
occurrence of the damage to the effective date of termination, for the
area or areas involved.
(b) "Substantial part" shall mean for the purposes of this Section at
least twenty-(25%) of the usable floor space in the structure or
building or part thereof comprising the premises, or, if there is more
than one structure or building on the premises, at least twenty-five
percent (25%) of the aggregate usable floor space comprising the
premises in all of the structures and buildings covered by insurance.
(c) The parties hereby stipulate that if the premises are in New
Jersey neither the provisions of Title 46:8-6 and 46:8-7 of the
Revised Statutes of New Jersey nor those of any other similar statute
shall extend or apply to this Agreement and if the premises are in New
York, neither the provisions of Section 227 of the Real Property Law
of New York nor those of any other similar statute shall extend or
apply to this Agreement.
(d) In the event of damage to or a partial or total destruction of
the premises, the Lease shall within five days of the occurrence
commence to remove all of its damaged property and all debris thereof
from the premises or from the portion thereof destroyed and thereafter
shall diligently continue such removal and if the Lessee does not
perform its obligation hereunder, the Port Authority may remove such
debris and dispose of the same and may remove such property to a
public warehouse for deposit or may retain the same in its own
possession and sell the same at public auction, the proceeds of which
shall be applied first to the expenses of removal, storage and sale,
second to any sums owed by the Lessee to the Port Authority, with any
balance remaining to be paid to the Lessee; if the expenses of such
removal, storage and sale shall exceed the proceeds of sale, the
Lessee shall pay such excess to the Port Authority upon demand.
SECTION 9.ASSIGNMENT AND SUBLEASE
(a) The Lessee covenants and agrees that it will not sell, convey,
transfer, assign, mortgage or pledge this Agreement or any part thereof, or
any rights created thereby or the letting thereunder or any part thereof.
(b) The Lessee shall not sublet the premises or any part thereof.
(c) If the Lessee assigns, sells conveys, transfers, mortgages,
pledges or sublets in violation of subdivisions (a) or (b) of this Section
or if the premises are occupied by anybody other than the Lessee, the Port
Authority may collect rent from any assignee, sublessee or anyone who
claims a right to this Agreement or letting or who occupies the premises
and shall apply the net amount collected to the rental herein reserved; and
no such collection shall be deemed a waiver by the Port Authority of the
covenants contained in subdivisions (a) and (b) of this Section nor an
acceptance by the Port Authority of any such assignee, sublessee, claimant
or occupant as tenant, nor a release of the Lessee by the Port Authority
from the further performance by the Lessee of the covenants contained
herein.
(d) The Lessee further covenants and agrees that it will not use or
permit any person whatsoever to use the premises or any portion thereof for
any purpose other than as provided in Article IV of this Agreement.
SECTION 10.CONDEMNATION
(a) In any action or other proceedings by any governmental agency or
agencies for the taking for a public use of any interest in all or part of
the premises, or in case of any deed, lease or other conveyance in lieu
thereof (all of which are in this Section referred to as "taking or
conveyance"), the Lessee shall not be entitled to assert any claim to any
compensation, award or part thereof made or to be made therein or therefor
or any claim to any consideration or rental or any part thereof paid
therefor, or to institute any action or proceeding or to assert any claim
against such agency or agencies or against the Port Authority for any such
taking or conveyance, it being understood and agreed between the parties
hereto that the Port Authority shall be entitled to all compensation or
awards made or to be made or paid, and all such considerations or rental,
free of any claim or right of the Lessee.
(b) In the event that all or any portion of the premises is required
by the Port Authority to comply with any present or future governmental
law, rule, regulation, requirement, order or direction, the Port Authority
may by notice given to the Lessee terminate the letting with respect to all
or such portion of the premises so required. Such termination shall be
effective on the date specified in the notice. The Lessee hereby agrees to
deliver possession of all or such portion of the premises so required upon
the effective date of such termination in the same condition as that
required for the delivery of the premises upon the date originally fixed by
this Agreement for the expiration of the term of the letting. No taking
authority as described in paragraph (a) of this Section, nor any delivery
by the Lessee nor taking by the Port Authority pursuant to this paragraph,
shall be or be construed to be an eviction of the Lessee or a breach of
this Agreement or be made the basis of any claim by the Lessee against the
Port Authority for damages, consequential or otherwise.
(c) In the event that the taking or conveyance covers the entire
premises, or in the event that the letting is terminated with respect to
the entire premises pursuant to paragraph (b) of this Section, then this
Agreement shall, as of the date possession is taken by such agency or
agencies from the Port Authority, or as of the effective date of such
termination, cease and determine in the same manner and with the same
effect as if the said date were the original date of expiration hereof.
(d) In the event that the taking or conveyance covers a part only of
the premises, or in the event that the letting is terminated pursuant to
paragraph (b) of this Section with respect to a part only of the premises,
then the letting as to such part shall, as of the date possession thereof
is taken by such agency or agencies, or as of the effective date of such
termination, cease and determine in the same manner and with the same
effect as if the term of the letting had on that date expired, and the
basic rental shall be abated as provided hereinafter.
(e) In the event that the taking or conveyance or the delivery by the
Lessee or taking by the Port Authority pursuant to paragraph (b) of this
Section covers fifty per cent (50%) or more of the total usable area of the
premises including both open and enclosed space, then the Lessee and the
Port Authority shall each have an option exercisable by notice given within
ten (10) days after such taking or conveyance to terminate the letting
hereunder, as of the date of such taking, and such termination shall be
effective as if the date of such taking were the original date of
expiration hereof.
SECTION 11.CONSTRUCTION BY THE LESSEE
Except with the prior consent of the Port Authority, the Lessee shall
not erect any structures, make any improvements or do any other
construction work on the premises or alter, modify, or make additions,
improvements or repairs to or replacements of, any structure now existing
or built at any time during the letting, or install any fixtures, and in
the event any construction, improvement, alteration, modification,
addition, repair or replacement is made with or without such consent and
unless the consent of the Port Authority shall expressly provide otherwise,
the same shall immediately become the property of the Port Authority, and
the Lessee shall have no right to remove the same either during the letting
or at the expiration thereof unless the Port Authority, at any time prior
to the expiration of the term of the letting, or any extension or renewal
thereof, or within sixty (60) days after expiration or earlier termination
of the term of the letting, shall give notice to the Lessee to remove the
same, or to cause the same to be changed to the satisfaction of the Port
Authority, in which case the Lessee agrees to remove the same, or change it
in compliance with such notice. In case of any failure on the part of the
Lessee to comply with such notice, the Port Authority may effect the
removal or change, and the Lessee hereby agrees to pay the cost thereof to
the Port Authority upon demand.
SECTION 12.ADDITIONAL RENT AND CHARGES
(a) If the Port Authority has paid any sum or sums or has incurred
any obligations or expense which the Lessee has agreed to pay or reimburse
the Port Authority for, or if the Port Authority is required or elects to
pay any sum or sums or incurs any obligations or expense by reason of the
failure, neglect or refusal of the Lessee to perform or fulfill any one or
more of the conditions, covenants or agreements contained in this Agreement
or as a result of an act or omission of the Lessee contrary to the said
conditions, covenants and agreements, the Lessee shall pay to the Port
Authority the sum or sums so paid or the expense so incurred, including all
interest, costs, damages and penalties and the same may be added to any
installment of rent thereafter due hereunder and each and every part of the
same shall be and become additional rent, recoverable by the Port Authority
in the same manner and with like remedies as if it were originally a part
of the basic rent as set forth in Article III hereof.
(b) For all purposes under this Section and in any suits, action or
proceeding of any kind between the parties hereto, any receipt showing any
payment of sum or sums by the Port Authority for any work done or material
furnished shall be PRIMA FACIE evidence against the Lessee that the amount
of such payment was necessary and reasonable. Should the Port Authority
elect to use its operating and maintenance staff in performing any work and
to charge the Lessee with the cost of same, any time report of any employee
of the Port Authority showing hours of labor or work allocated to such
work, or any stock requisition of the Port Authority showing the issuance
of materials for use in the performance thereof shall likewise be PRIMA
FACIE evidence against the Lessee that the amount of such charge was
necessary and reasonable.
(c) The term "cost" in this Agreement shall mean and include: (1)
Payroll costs, including contributions to the Retirement System, or the
cost of participation in other pension plans or systems, insurance costs,
sick leave pay, holiday, vacation and authorized absence pay; (2) Cost of
materials and supplies used; (3) Payments to contractors; (4) Any other
direct costs; and (5) 30% of the sum of the foregoing.
SECTION 13.RIGHTS OF ENTRY RESERVED
(a) The Port Authority, by its officers, employees, agents,
representatives and contractors shall have the right at all reasonable
times to enter upon the premises for the purpose of inspecting the same,
for observing the performance by the Lessee of its obligations under this
Agreement, and for the doing of any act or thing which the Port Authority
may be obligated or have the right to do under this Agreement or otherwise.
(b) Without limiting the generality of the foregoing, the Port
Authority, by its officers, employees, agents, representatives, and
contractors, and furnishers of utilities and other services, shall have the
right, for its own benefit, for the benefit of the Lessee, or for the
benefit of others than the Lessee at the Facility, to maintain existing and
future utility, mechanical, electrical and other systems and to enter upon
the premises at all reasonable times to make such repairs, replacements or
alterations as may be, in the opinion of the Port Authority, be deemed
necessary or advisable and, from time to time, to construct or install
over, in or under the premises new systems or parts thereof, and to use the
premises for access to other parts of the Facility otherwise not
conveniently accessible; PROVIDED, HOWEVER, that in the exercise of such
rights of access, repair, alteration or new construction the Port Authority
shall not unreasonably interfere with the use and occupancy of the premises
by the Lessee.
(c) In the event that any property of the Lessee shall obstruct the
access of the Port Authority, its employees, agents or contractors to any
of the existing or future utility, mechanical, electrical and other systems
and thus shall interfere with the inspection, maintenance or repair of any
such system, the Lessee shall move such property, as directed by the Port
Authority, in order that the access may be had to the system or part
thereof for its inspection, maintenance or repair, and, if the Lessee shall
fail to so move such property after direction from the Port Authority to do
so, the Port Authority may move it and the Lessee hereby agrees to pay the
cost of such moving upon demand.
(d) Nothing in this Section shall or shall be construed to impose
upon the Port Authority any obligations so to construct or maintain or to
make repairs, replacements, alterations or additions, or shall create any
liability for any failure so to do. The Lessee is and shall be in
exclusive control and possession of the premises and the Port Authority
shall not in any event be liable for any injury or damage to any property
or to any person happening on or about the premises nor for any injury or
damage to the premises nor to any property of the Lessee or of any other
person located in or thereon (other than those occasioned by the acts of
the Port Authority).
(e) At any time and from time to time during ordinary business hours
within the three (3) months next preceding the expiration of the letting,
the Port Authority, by its agents and employees, whether or not accompanied
by prospective lessees, occupies or users of the premises, shall have the
right to enter thereon for the purpose of exhibiting and viewing all parts
of the same and during such three-month period the Port Authority may place
and maintain on the premises, the usual "to Let" signs, which signs the
Lessee shall permit to remain without molestation.
(f) If, during the last month of the letting, the Lessee shall have
removed all or substantially all its property from the premises, the Port
Authority may immediately enter and alter, renovate and redecorate the
premises.
(g) The exercise of any or all of the foregoing rights by the Port
Authority or others shall not be or be construed to be an eviction of the
Lessee nor be made the grounds for any abatement of rental nor any claim or
demand for damages consequential or otherwise.
SECTION 14.LIMITATION OF RIGHTS AND PRIVILEGES GRANTED
(a) The premises are let to the Lessee and the Lessee takes the same
subject to all the following: (i) easements, restrictions, reservations,
covenants and agreements if any, to which the premises may be subject,
rights of the public in and to any public street (ii) rights, if any, of
any enterprise, public or private which is engaged in furnishing heating,
lighting, power, telegraph, telephone, steam, or transportation services
and of the municipality and State in which the premises are located (iii)
permits, licenses, regulations and restrictions, if any, of the United
States, the municipality or State in which the premises are located, or
other governmental authority.
(b) No greater rights or privileges with respect to the use of the
premises or of the facility or any part thereof are granted or intended to
be granted to the Lessee by this Agreement, or by any provision thereof,
than the rights and privileges expressly and specifically granted.
(c) Nothing in this Agreement contained shall grant to the Lessee any
rights whatsoever in the air space above the roof of the building or
buildings or portion of a building or buildings, if any are included in the
premises (except to the extent required in either case for the performance
of any of the obligations of the Lessee hereunder), or more than twenty
(20) feet above the present ground level of any open area included in the
premises.
SECTION 15.PROHIBITED ACTS
(a) Unless otherwise expressly permitted so to do, the Lessee shall
not install, maintain or operate, or permit the installation, maintenance
or operation on the premises of any vending machine or device designed to
dispose or sell food, beverages, tobacco, tobacco products or merchandise
of any kind, whether or not included in the above categories, or of any
restaurant, cafeteria, kitchen stand or other establishment of any type for
the preparation, dispensing or sale of food, beverages, tobacco, tobacco
products or merchandise of any kind, whether or not included in the above
categories, or of any equipment or device for the furnishing to the public
of service of any kind, including therein, without limitation thereto,
telephone pay-stations.
(b) The Port Authority, by itself or by contractors, lessees or
permittees, shall have the exclusive right to install, maintain and receive
and retain the revenues from all coin-operated or other machines or devices
for the sale of merchandise of all types, or for the rendering of services,
which may be operated on the premises; PROVIDED, HOWEVER, that no such
machine or device shall be installed except upon the request of the Lessee.
This provision shall not be construed to confer upon the Lessee any right
to have such machines installed except at the sole discretion of the Port
Authority.
SECTION 16.TERMINATION
(a) If any one or more of the following events shall occur, that is
to say:
(1) The Lessee shall become insolvent, or shall take the benefit
of any present or future insolvency statute, or shall make a general
assignment for the benefit of creditors, or file a voluntary petition
in bankruptcy or a petition or answer seeking an arrangement or its
reorganization or the readjustment of its indebtedness under the
federal bankruptcy laws or under any other law or statute of the
United States or of any State thereof, or consent to the appointment
of a receiver, trustee, or liquidator of all or substantially all of
its property; or
(2) By order or decree of a court the Lessee shall be adjudged
bankrupt or an order shall be made approving a petition filed by any
of its creditors or, if the Lessee is a corporation, by any of its
stockholders, seeking its reorganization or the readjustment of its
indebtedness under the federal bankruptcy laws or under any law or
statute of the United States or of any State thereof; or
(3) A petition under any part of the federal bankruptcy laws or
an action under any present or future insolvency law or statute shall
be filed against the Lessee and shall not be dismissed within thirty
(30) days after the filing thereof; or
(4) The letting or the interest of the Lessee under this
Agreement shall be transferred to, pass to or devolve upon, by
operation of law or otherwise, any other person, firm or corporation;
or
(5) The Lessee, if a corporation, shall, without the prior
approval of the Port Authority, become a possessor or merged
corporation in a merger, a constituent corporation in a consolidation,
or a corporation in dissolution; or
(6) If the Lessee is a partnership, and the said partnership
shall be dissolved as the result of any act or omission of its
partners or any of them, or by operation of law or the order or decree
of any court having jurisdiction, or for any other reason whatsoever;
or
(7) By or pursuant to, or under authority of any legislative
act, resolution or rule, or any other or decree of any court or
governmental board, agency or officer, a receiver, trustee, or
liquidator shall take possession or control of all or substantially
all of the property of the Lessee, and such possession or control
shall continue in effect for a period of fifteen (15) days; or
(8) The Lessee shall voluntarily abandon, desert or vacate the
premises or discontinue its operations at the premises or at the
Facility or, after exhausting or abandoning any right of further
appeal, the Lessee shall be prevented for a period of thirty (30) days
by action of any governmental agency from conducting its operations on
the premises, regardless of the fault of the Lessee; or
(9) Any lien shall be filed against the premises because of any
act or omission of the Lessee and shall not be discharged within
twenty (20) days; or
(10) The Lessee shall fail duly and punctually to pay the rental
or to make any other payment required hereunder when due to the Port
Authority; or
(11) The Lessee shall fail to keep, perform and observe each and
every other promise, covenant and agreement set forth in this
agreement, on its part to be kept, performed or observed, within ten
(10) days after its receipt of notice of default thereunder from the
Port Authority (except where fulfillment of its obligation requires
activity over a period of time, and the Lessee shall have commenced to
perform whatever may be required for fulfillment within ten (10) days
after receipt of notice and continues such performance without
interruption except for causes beyond its control);
then upon the occurrence of any such event or at any time thereafter during
the continuance thereof, the Port Authority may by five (5) days' notice
terminate the letting and the Lessee's rights hereunder, such termination
to be effective upon the date specified in such notice. Such right of
termination and the exercise thereof shall be and operates as a conditional
limitation.
(b) If any of the events enumerated in paragraph (a) of this Section
shall occur prior to the commencement of the letting, the Lessee shall not
be entitled to enter into possession of the premises, and the Port
Authority, upon the occurrence of any such event, or at any time
thereafter, during the continuance thereof, by twenty-four (24) hours'
notice, may cancel the interest of the Lessee under this agreement, such
cancellation to be effective upon the date specified in such notice.
(c) No acceptance by the Port Authority of rentals, fees, charges or
other payments in whole or in part for any period or periods after a
default of any of the terms, covenants and conditions hereof to be
performed, kept or observed by the Lessee shall be deemed a waiver of any
right on the part of the Port Authority to terminate the letting. No
waiver by the Port Authority of any default on the part of the Lessee in
performance of any of the terms, covenants or conditions hereof to be
performed, kept or observed by the Lessee shall be or be construed to be a
waiver by the Port Authority of any other or subsequent default in
performance of any of the said terms, covenants and conditions.
(d) The rights of termination described above shall be in addition to
any other rights of termination provided in this Agreement and in addition
to any rights and remedies that the Port Authority would have at law or in
equity consequent upon any breach of this Agreement by the Lessee, and the
exercise by the Port Authority of any right of termination shall be without
prejudice to any other such rights and remedies.
SECTION 17. RIGHT OF RE-ENTRY
The Port Authority shall, as an additional remedy upon the giving of a
notice of termination as provided in Section 16 of these Terms and
Conditions, have the right to re-enter the premises and every part thereof
upon the effective date of termination without further notice of any kind,
and may regain and resume possession either with or without the institution
of summary or any other legal proceedings or otherwise. Such re-entry, or
regaining or resumption of possession, however, shall not in any manner
affect, alter or diminish any of the obligations of the Lessee under this
Agreement, and shall in no event constitute an acceptance of surrender.
SECTION 18.WAIVER OF REDEMPTION
The Lessee hereby waives any and all rights to recover or regain
possession of the premises and all rights of redemption, granted by or
under any present or future law in the event it is evicted or dispossessed
for any cause, or in the event the Port Authority obtains possession of the
premises in any lawful manner.
SECTION 19.SURVIVAL OF THE OBLIGATIONS OF THE LESSEE
(a) In the event that the letting shall have been terminated in
accordance with a notice of termination as provided in Section 16 of these
Terms and Conditions, or the interest of the Lessee shall have been
cancelled pursuant thereto, or in the event that the Port Authority has re-
entered, regained or resumed possession of the premises in accordance with
the provisions of Section 17 of these Terms and Conditions, all of the
obligations of the Lessee under this Agreement shall survive such
termination or cancellation, re-entry, regaining or resumption of
possession and shall remain in full force and effect for the full term of
the letting, as originally fixed in Article II hereof, and the amount or
amounts of damages or deficiency shall become due and payable to the Port
Authority to the same extent, at the same time or times and in the same
manner as if no termination, cancellation, re-entry, regaining or
resumption of possession had taken place. The Port Authority may maintain
separate actions each month to recover the damage or deficiency then due or
at its option and at any time may sue to recover the full deficiency less
the proper discount, for the entire unexpired term.
(b) The amount of damages for the period of time subsequent to
termination or cancellation (or re-entry, regaining or resumption of
possession) on account of the Lessee's rental obligations, shall be the sum
of the following:
(1) The amount of the total of all annual rentals, less the
installments thereof prior to the effective date of termination except
that the credit to be allowed for the installment paid on the first
day of the month in which the termination is effective shall be
prorated for the part of the month the letting remains in effect on
the basis of a 30-day month; and
(2) An amount equal to all expenses incurred by the Port
Authority in connection with regaining possession and restoring and
reletting the demised premises, for legal expenses, boiler insurance
premiums, if any, putting the premises in order including without
limitation, cleaning, decorating and restoring (on failure of the
Lessee to restore), maintenance and brokerage fees.
SECTION 20.RELETTING BY THE PORT AUTHORITY
The Port Authority, upon termination or cancellation pursuant to
Section 16 of these Terms and Conditions, or upon any re-entry, regaining
or resumption of possession pursuant to Section 17 of these Terms and
Conditions, may occupy the premises or may relet the premises and shall
have the right to permit any person, firm or corporation to enter upon the
premises and use the same. Such reletting may be of part only of the
premises or of the premises or a part thereof together with other space,
and for a period of time the same as or different from the balance of the
term hereunder remaining, and on terms and conditions the same as or
different from those set forth in this Agreement. The Port Authority shall
also, upon termination or cancellation pursuant to Section 16 of these
Terms and Conditions, or upon re-entry, regaining or resumption of
possession pursuant to Section 17 of these Terms and Conditions have the
right to repair and to make structural or other changes in the premises,
including changes which alter the character of the premises and the
suitability thereof for the purposes of the Lessee under this Agreement,
without affecting, altering or diminishing the obligations of the Lease
hereunder. In the event either of any reletting or of any actual use and
occupancy by the Port Authority (the mere right to use and occupy not being
sufficient however) there shall be credited to the account of the Lessee
against its survived obligations hereunder any net amount remaining after
deducting from the amount actually received from any lessee, license,
permittee or other occupier in connection with the use of the said premises
or portion thereof during the balance of the term of the letting as the
same is originally stated in this Agreement, or from the market value of
the occupancy of such portion of the premises as the Port Authority may
itself during such period actually use and occupy, all expenses, costs and
disbursements incurred or paid by the Port Authority in connection
therewith. No such reletting or such use and occupancy shall be or be
construed to be an acceptance of a surrender.
SECTION 21.REMEDIES TO BE NONEXCLUSIVE
All remedies provided in this Agreement shall be deemed cumulative and
additional and not in lieu of or exclusive of each other or of any other
remedy available to the Port Authority at law or in equity, and the
exercise of any remedy, or the existence herein of other remedies or
indemnities shall not prevent the exercise of any other remedy.
SECTION 22.SURRENDER
(a) The Lessee covenants and agrees to yield and deliver peaceably to
the Port Authority possession of the premises on the date of the cessation
of the letting, whether such cessation be by termination, expiration or
otherwise, promptly and in the same condition as at the commencement of the
letting, reasonable wear arising from use of the premises to the extent
permitted elsewhere in this Agreement, excepted.
(b) Unless the same are required for the performance by the Lessee of
its obligations hereunder, the Lessee shall have the right at any time
during the letting to remove from the premises, and, on or before the
expiration or earlier termination of the letting, shall so remove its
equipment, removable fixtures and other personal property, and all property
of third persons for which it is responsible, repairing all damage caused
by such removal. If the Lessee shall fail to remove such property on or
before the termination or expiration of the letting, the Port Authority may
remove such property to a public warehouse for deposit or may retain the
same in its own possession and in either event may sell the same at public
auction, the proceeds of which shall be applied: first, to the expenses of
removal, including repair required thereby, and of storage and sale;
second, to any sums owed by the Lessee to the Port Authority, with any
balance remaining to be paid to the Lessee; if the expenses of such
removal, repair, storage and sale shall exceed the proceeds of sale, the
Lessee shall pay such excess to the Port Authority upon demand. The Lessee
shall indemnify the Port Authority against all claims based on Port
Authority action hereunder.
SECTION 23.ACCEPTANCE OF SURRENDER OF LEASE
No agreement of surrender or to accept a surrender shall be valid
unless and until the same shall have been reduced to writing and signed by
the duly authorized representatives of the Port Authority and of the
Lessee. Except as expressly provided in this Section, neither the doing
of, nor any omission to do, any act or thing, by any of the officers,
agents or employees of the Port Authority, shall be deemed an acceptance of
a surrender of the letting or of this Agreement.
SECTION 24.NOTICES
(a) All notices, permissions, requests, consents and approvals given
or required to be given to or by either party shall be in writing (which
shall include a telegram when delivered to the telegraph company), and all
such notices and requests shall be telegraphed or personally delivered to
the party or to the duly designated officer or representative of such party
or delivered to an office or residence of such party, officer or
representative during regular business hours, or delivered to the residence
of such party, officer or representative or delivered to the premises, or
forwarded to him or to the party at the office or residence address by
registered mail. The Lessee shall designate an office within the Port of
New York District and an officer or representative whose regular place of
business is at such office. Until further notice, the Port Authority
hereby designates its Executive Director, and the Lessee designates the
person whose name appears ons the first page of this Agreement as their
respective officers or representatives upon whom notices and requests may
be served, and the Port Authority designates its office at One World Trade
Center, New York, New York 10048, and the Lessee designates its office, the
address of which is set forth on the first page of this Agreement, as their
respective offices where notices and requests may be served.
(b) If any notice is mailed or delivered, the giving of such notice
shall be complete upon receipt or, in the event of a refusal by the
addressee, upon the first tender of the notice to the addressee or at the
permitted address. If any notice is sent by telegraph, the giving of such
notice shall be complete upon receipt or, in the event of a refusal by the
addressee, upon the first tender of the notice by the telegraph company to
the addressee or at the address thereof.
SECTION 25.GENERAL
(a) Wherever in this Agreement the Lessee agrees or is required to do
or has the rights to do, any act or thing, the following shall apply:
(1) If the Lessee is a corporation, its obligation shall be
performed by it and its rights shall be exercised only by its officers
and employees or
(2) If the Lessee is a partnership, its obligations shall be
performed and its rights shall be exercised by its partners and
employees only or
(3) If the Lessee is an individual, his obligations shall be
performed and his rights shall be exercised by himself and his
employees only;
(4) None of the provisions of this paragraph (a) shall be taken
to alter, amend or diminish any obligation of the Lessee assumed in
relation to its invitees, business visitors, agents, representatives,
contractors, customers, guests, or other persons firms or corporations
doing business with it or using or on or at the premises with its
consent.
(b) If more than one individual or other legal entity is the Lessee
under this Agreement, each and every obligation hereof shall be the joint
and several obligation of each such individual or other legal entity.
(c) Unless otherwise stated in Article IV on page 2 of this
Agreement, the rights of user thereby granted to the Lessee with respect to
the premises shall be exercised by the Lessee only for its own account and,
without limiting the generality of the foregoing, shall not be exercised as
agent, representative, factor, broker, forwarder, bailee, or consignee
without legal title to the subject matter of the consignment.
(d) The Lessee's representative, hereinbefore specified in this
Agreement (or such substitute as the Lessee may hereafter designate in
writing) shall have full authority to act for the Lessee in connection with
this Agreement and any things done or to be done hereunder, and to execute
on the Lessee's behalf any amendments or supplements to this Agreement or
any extension thereof.
(e) The Section headings in these Terms and Conditions and in the
endorsements, if any, attached hereto are inserted only as a matter of
convenience and for reference, and they in no way define or limit or
describe the scope or intent of any provisions hereof.
(f) All payments required of the Lessee by this Agreement shall be
made at the office of the Treasurer of the Port Authority, One World Trade
Center, New York, New York 10048, or to such other officer or address as
may be substituted therefor. If the commencement date of the letting under
this Agreement is other than the first day of a calendar month, the basic
rental for the portion of the month during which the letting is effective
shall be the amount of the monthly installment prorated on a daily basis
using the actual number of days in the month, and if the expiration or
termination date of the letting is other than the last day of a calendar
month, the basic rental for the portion of the month during which the
letting is effective shall be the amount of the monthly installment
similarly prorated.
(g) This Agreement does not constitute the Lessee the agent or
representative of the Port Authority for any purpose whatsoever. Neither a
partnership nor any joint adventure is hereby created, notwithstanding the
fact that all or a portion of the rental to be paid hereunder may be
determined by gross receipts from the operations of the Lessee hereunder.
(h) The phrase "utility, mechanical, electrical and other systems"
shall mean and include (without limitation thereto) the following:
machinery, engines, dynamos, boilers, elevators, escalators, incinerators
and incinerator flues, systems for the supply of fuel, electricity, water,
gas and steam, plumbing, heating, sewerage, drainage, ventilating, air
conditioning, communications, fire-alarm, fire-protection, sprinkler,
telephone, telegraph and other systems, fire hydrants, fire hoses, and
their respective wires, mains, conduits, lines, tubes, pipes, equipment,
motors, cables, fixtures and other equipment.
(i) All designations of time herein contained shall refer to the
time-system then officially in effect in the municipality wherein the
premises are located.
SECTION 26.PREMISES
(a) The Lessee acknowledges that it has not relied upon any
representation or statement of the Port Authority or its Commissioners,
officers, employees or agents as to the condition of the premises or the
suitability thereof for the operations permitted on the premises by this
Agreement. The Lessee, prior to the execution of this Agreement, has
thoroughly examined the premises and has found them to be in good order and
repair and determined them to be suitable for the Lessee's operations
hereunder. Without limiting any obligation of the Lessee to commence
operations hereunder at the time and in the manner stated elsewhere in this
Agreement, the Lessee agrees that no portion of the premises will be used
initially or at any time during the letting which is in a condition unsafe
or improper for the conduct of the Lessee's operations hereunder so that
there is possibility of injury or damage to life or property and the Lessee
further agrees that before any use it will immediately correct any such
unsafe or improper condition.
(b) The Port Authority shall not be liable to the Lessee, or to any
person, for injury or death to any person or persons whomsoever, or damage
to any property whatsoever at any time in the premises or elsewhere at the
Facility, including but not limited to any such injury, death or damage
from falling material, water, rain, hail, snow, gas, steam, or electricity,
whether the same may leak into, or fall, issue, or flow from any part of
the Facility, or from any other place or quarter.
(c) If permission is given to the Lessee to enter into the possession
of the premises or to occupy space other than the premises prior to the
date specified in Article II as the commencement of the term of the
letting, the Lessee agrees that such possession or occupancy shall be
deemed to be under all the terms, covenants, conditions and provision of
this Agreement except as to the covenant to pay rent and except as may be
expressly provided otherwise by the written instrument, if any, giving such
possession or occupancy; in either case, rent shall commence on the date
specified in the Agreement, and in the event of possession of the premises,
the date of such possession shall be the date of commencement of the term
hereunder.
SECTION 27.POSTPONEMENT
If the Port Authority shall not give possession of the premises on the
date fixed in Article II for the commencement of the term, by reason of the
fact that the premises or any part thereof are in the course of
construction, repair, alteration or improvement or by reason of the fact
that the occupant thereof failed or refused to deliver possession to the
Port Authority, or by reason of any cause or condition beyond the control
of the Port Authority, the Port Authority shall not be subject to any
liability for the failure to give possession on said date. No such failure
to give possession on the date of commencement of the term shall in any
wise affect the validity of this Agreement or the obligations of the Lessee
hereunder, nor shall the same be construed in any wise to extend the term
beyond the date stated in Article II for expiration. However, the rent
shall not commence until possession of the premises is tendered by the Port
Authority to the Lessee; the tender and in the event that such notice of
tender is not given for possession to commence on or before one hundred
eighty-five (185) days after the date stated in Article II for commencement
of the term then this Agreement shall be deemed cancelled, except that each
party shall and does hereby release the other party of and from any and all
claim or demands based on this Agreement, or a breach or alleged breach
thereof.
SECTION 28.FORCE MAJEURE
(a) The Port Authority shall not be liable for any failure, delay or
interruption in performing its obligations hereunder due to causes or
conditions beyond its control, including, without limitation thereto,
strikes, boycotts, picketing, slow-downs, work stoppages or labor troubles
of any other type (whether affecting the Port Authority, its contractors,
or subcontractors.) Further, the Port Authority shall not be liable unless
the failure, delay or interruption shall result from failure on the part of
the Port Authority to use reasonable care to prevent or reasonable efforts
to cure such failure, delay or interruption.
(b) The Port Authority shall be under no obligation to supply any
service or services if and to the extent and during any period that the
supplying of any such service or services or the use of any component
necessary therefor shall be prohibited or rationed by any federal, state or
municipal law, rule, regulation, requirement, order or direction and if the
Port Authority deems it in the public interest to comply therewith, even
though such law, rule, regulation, requirement, order or direction may not
be mandatory on the Port Authority as a public agency.
(c) No abatement, diminution or reduction of the rest or other
charges payable by the Lessee, shall be claimed by or allowed to the Lessee
for any inconvenience, interruption, cessation or loss of business or other
loss caused, directly or indirectly, by any present or future laws, rules,
requirements, orders, directions, ordinances or regulations of the United
States of America, or of the state, county or city governments, or of any
other municipal, governmental or lawful authority whatsoever, or by
priorities, rationing or curtailment of labor or materials, or by war or
any matter or thing resulting therefrom, by any other cause or causes
beyond the control of the Port Authority, nor shall this Agreement be
affected by any such causes.
SECTION 29.BROKERAGE
The Lessee represents and warrants that no broker has been concerned
in the negotiation of this Agreement and that there is no broker who is or
may be entitled to be paid a commission in connection therewith. The
Lessee shall indemnify and serve harmless the Port Authority of and from
any claim for commission or brokerage made by any and all persons, firms or
corporations whatsoever for services in connection with the negotiation and
execution of this Agreement.
SECTION 30.NON-LIABILITY OF INDIVIDUALS
Neither the Commissioners of the Port Authority nor any of them, nor
any officer, agent, or employee thereof, shall be charged personally by the
Lessee with any liability, or held liable to the Lease under any term or
provision of this Agreement, or because of its execution or attempted
execution, or because of any breach, or attempted or alleged breach,
thereof.
(a) The Port Authority agrees to grant (if requested so to do by the
Lessee), to suppliers of water, gas, electricity and telephone service
operating in the vicinity a right of way or rights of way under the
Facility from the streets outside of the Facility to the premises for the
sole purpose of supplying such service or services to the Lessee. No such
right of way shall include the right to use any system, equipment or
portion thereof constructed or owned by or leased to the Port Authority.
(b) The Lessee shall promptly pay all water bills covering its own
consumption. Such payment shall include any factor which may have been
included by the appropriate governmental authority as a sewer-rent or other
charge for the use of a sewer system. In the event that any such water
bill shall remain unpaid for a period of six (6) months after the same
becomes due and payable, or in the event that any such bill remains unpaid
at the date of expiration or earlier termination of the letting under this
Agreement, the Port Authority may pay the same and any interest or
penalties thereon, and the total payment or payments at any time so made
shall constitute an additional item for rental, payable to the Port
Authority upon demand. Where sewerage is contained in tanks periodically
cleaned by a contractor paid by the Port Authority the Lessee shall pay
such portion of the contract charge as may be reasonably determined by the
Port Authority, on demand.
(c) Unless the Port Authority has expressly undertaken to heat the
enclosed portions of the premises, if any, the Lessee agrees to heat the
enclosed portions of the premises to a sufficient temperature so that the
plumbing, fire-protection and sprinkler systems, if any, will not be
damaged by reason of low temperatures.
(d) If any federal, state, municipal or other governmental body,
authority or agency, or any public utility, assesses, levies, imposes,
makes or increases any charge, fee, rent or assessment on the Port
Authority, for any service, system or utility now or in the future supplied
to or available at the premises or to any tenant, lessee, occupant or user
thereof, or to the structures or buildings which, or a portion or portions
of which, are included in the premises, (including but not limited to any
sewer-rent or other charge for the use of a sewer system or systems), the
Lessee shall, at the option of the Port Authority exercised at any time and
from time to time by notice to the Lessee, pay, in accordance with such
notice, such charge, fee, rent or assessment or such increase thereof (or
the portion thereof allocated by the Port Authority to the premises or to
the operations of the Lessee under this Agreement) either directly to the
governmental body, authority or agency, or to the public utility, or
directly to the Port Authority, as such notice may direct. All payments to
be made by the Lessee hereunder shall constitute items of additional
rental.
(e) No failure, delay or interruption in any service or services,
whether such service or services shall be supplied by the Port Authority or
by others, shall relieve or be construed to relieve the Lessee of any of
its obligations hereunder or shall be or be construed to be an eviction of
the Lessee, or shall constitute grounds for any diminution or abatement of
the rental or rentals payable under this Agreement, or grounds for any
claim by the Lessee for damages, consequential or otherwise.
(f) In the event any one or more structures within or attached to the
premises but not accessible directly from the enclosed portion of the
premises is or are in use as a valve-room or valve-rooms for a sprinkler
system, the same shall not be deemed a portion of the premises hereunder,
and the Lessee shall afford access thereto through and across the premises
at all times as required by the Port Authority for itself or its
contractors, with or without tools, equipment, parts and supplies.
<PAGE>
(a) As used in this Agreement:
(1) "Brooklyn-Port Authority Marine Terminal", "Brooklyn-Port
Authority Piers", "Facility", or "marine terminal" shall mean the real
property, buildings, structures, fixtures, improvements and other property,
including without limitation thereto leasehold interests in property,
located in the Boroughs of Manhattan and Brooklyn, in the Counties of New
York and Kings, in the City and State of New York, transferred or assigned
to the Port Authority under the provisions of any one or more (including
all) of the following deeds and agreements:
(i) Deed dated March 1, 1956 from New York Dock Company to
the Port Authority, recorded in the office of the City Register,
New York County, on March 6, 1956 in Liber 4956 of Conveyances,
on pp. 356 et seq., and in the Office of the City Register, Kings
County, on March 6, 1956 in Liber 8422 of Conveyances on pp. 458
et seq.;
(ii) Deed dated March 1, 1956 from the Trustees and
Associates of the Brooklyn Benevolent Society to the Port
Authority, recorded in the Office of the City Register, Kings
County, on March 7, 1956 in Liber 8423 of Conveyances on pp. 96
et seq.;
(iii)Agreement of lease dated June 2, 1916, made between the
City of New York and New York Dock Company, referred to as "the
Montage Street Lease", recorded in the Office of the City
Register, Kings County, on March 7, 1956 in Liber 8423 of
Conveyances on pp. 150 et seq.;
(iv) Agreement dated March 21, 1950, made between the City
of New York and New York Dock Company renewing the lease
described in paragraph (iii) above, recorded in the Office of the
City Register, Kings County, on March 7, 1956 in Liber 8423 of
Conveyances on pp. 118 et seq.;
(v) Agreement of lease dated June 2, 1916, made between the
City of New York and New York Dock Company, referred to as "the
Joralemon Street Lease", recorded in the Office of the City
Register, Kings County, on March 7, 1956 in Liber 8423 of
Conveyances on pp. 186 et seq.;
(vi) Agreement dated October 23, 1946, made between the City
of New York and New York Dock Company renewing the lease
described in paragraph (v) above, recorded in the Office of the
City Register, Kings County, in Liber 8423 of Conveyances on pp.
111 et seq.; and
(vii)Assignment of leasehold interest mentioned in
paragraphs (iii) (iv) (v) and (vi) as of March 1, 1956 by New
York Dock Company to The Port of New York Authority, recorded in
the Office of the City Register, Kings County, on March 7, 1956
in Liber 8423 of Conveyances on pp. 130 et seq.;
and such additional property adjacent thereto (not including any property
to the sough of Conover Street as the Port Authority may have heretofore or
may hereafter acquire for marine terminal purposes and additional
buildings, structures, fixtures, improvements and other property which may
have been heretofore or may hereafter be installed or constructed for
marine terminal purposes on any property or properties heretofore
mentioned.
(2) "Letting" shall include any extension of the letting under this
Agreement, whether made by agreement or by operation of law.
(3) "Manager of the Facility" or "Manager" shall mean the person or
persons from time to time designated by the Port Authority to exercise the
powers and functions vested i the said manager or in the Superintendent of
the Facility by this Agreement; but until further notice from the Port
Authority to the Lessee, it shall mean the Manager for the Acting Manager
Port Authority Marine Terminals New York, for the time being or his duly
designated representative or representatives.
(b) The rights of the Port Authority in the Facility are those
acquired by it pursuant to the deeds and agreements described in paragraph
(a)(1) of this Standard Endorsement, and by subsequent conveyances, and no
greater rights are granted or intended to be granted to the Lessee
hereunder that the Port Authority has power thereunder to grant. In the
event the premises under this Agreement or any portion thereof constitute
all or a portion of the premises as to which the Port Authority is the
Lessee under any one or more of the agreements described in subparagraphs
(ii), (iv), (v) and (vii) of the said paragraph (a)(1), or under any other
agreement of lease, the letting under this Agreement shall in any event
terminate simultaneously with the termination or expiration of the letting
under such agreement or agreements of lease; provided, however, that in the
event only a portion of the premises hereunder is included within the
premises under such expiring agreement or agreements of lease, the letting
hereunder shall continue, as to the balance of the premises hereunder, in
accordance with the terms of this Agreement.
(c) No designation in this Agreement of any area as a street,
highway, roadway or other comparable characterization, whether or not by
name, shall be or be deemed to be an admission, recognition or
acknowledgment of any public or private rights in the area so designated,
or as a dedication for a consent to any public or private use of the same.
All use in this Agreement of names and designations in connection with such
areas is merely for the purpose of fixing geographical locations.
(d) The Port Authority covenants and agrees that as long as it
remains the owner (or the lessee) of the premises, the Lessee, upon paying
all rentals hereunder and performing all the covenants, conditions and
provisions of this Agreement on its part to be performed, shall and may
peaceably and quietly have, hold and enjoy the premises free of any act or
acts of the Port Authority except as expressly permitted in this Agreement.
(e) This Agreement and the letting hereunder are subject and
subordinate to all mortgages which may now or hereafter affect the premises
or the Facility and to all renewals, modifications, consolidations,
replacements, and extensions thereof and the Lessee agrees to execute any
instrument which may be deemed necessary or desirable further to effectuate
the subordination of this Agreement and the letting hereunder to any such
mortgage or mortgages.
(f) The rights and operations of the Lessee under this Agreement are
subject to the terms of a certain agreement of lease made between the Port
Authority and New York Dock Railway dated March 1 1956, as the same may be
extended or amended. The said agreement of lease covers premises and
rights-of-way at the Facility and grants rights and privileges at the
Facility in connection with the operations of a railway thereat. The
Lessee shall not do, or permit its employees, contractors, invitees or
those doing business with it to do, anything which will interfere or
conflict with the exercise of rights or operations under the said agreement
of lease.
(g) Without in any way limiting the obligations of the Lessee as
elsewhere stated in this Agreement, the Lessee shall be liable to the Port
Authority for any damage done to the Facility or to any part thereof or to
any property of the Port Authority thereon through any act or omission of
those in charge of or operating any vessels, steamers, barges, lighters or
other floating equipment or in charge of or operating any trucks, other
vehicles or other transportation equipment, while the same shall be a
coming to, or leaving the premises.
(h) The Lessee acknowledges that The National Cold Storage Co., Inc.,
as successor Lessee under various assignments, is occupying premises which
are part of the Facility, in accordance with certain agreements of lease
originally made between Sir William Vestey and New York Dock Company, and
that each of the said agreements of lease contains the following
provisions:
"That the Landlord shall not engage in or permit any other
person, firm or corporation other than manufacturers where cold
storage is a necessary adjunct to such business, to engage in a
refrigerating or cold storage business upon any part of its real
estate during the period of this lease or any renewal thereof."
The grant of rights and privileges to the Lessee under this Agreement
insofar as such grant relates to the portion or portions (including all) of
the premises under this Agreement, if any, which are included in the lands
and interests in land conveyed to the Port Authority by New York Dock
Company, is expressly subject to the above restriction, and the Lessee will
not do or allow to be done anything on the premises which will or may
subject the Port Authority to liability for a breach of such provision.
<PAGE>
(a) The Lessee in its own name as assured shall secure and pay the
premium or premiums for such of the following policies of insurance
affording those coverages as to which minimum limits are fixed in the
schedule set forth below. Each such policy shall be maintained in at least
the limit fixed with respect thereto, shall cover the operations of the
Lessee under this Agreement, and shall be effective throughout the terms of
the letting.
SCHEDULE
POLICY MINIMUM LIMIT
(1) Comprehensive general liability
insurance (to include contractual
liability endorsement)
(i) Bodily-injury liability:
For injury or wrongful death $2,000,000.00
to one person
For injury or wrongful death $2,000,000.00
to more than one person in any one
occurrence;
(ii) Property-damage liability: $2,000,000.00
For all damages arising out of
injury to or destruction of property in
any one occurrence:
(iii)Products liability $2,000,000.00
(2) Automotive liability insurance $2,000,000.00
(i) Bodily-injury liability
For injury or wrongful death
to one person $2,000,000.00
For injury or wrongful death $2,000,000.00
to more than one person in any
occurrence
(ii) Property-damage liability $2,000,000.00
For all damages arising out of
injury to or destruction of property in
any one occurrence
(3) Plate and mirror glass insurance, $
covering all plate and mirror glass
in the premises, and the lettering,
signs, or decorations, if any, on
such plate and mirror glass
(4) Boiler and machinery insurance, $
covering all boilers, pressure vessels
and machines operated by the Lessee in
the premises
(5) "Additional Interest" policy of $
boiler and machinery insurance,
covering all boilers, pressure
vessels and machines operated by
the Lessee in the premises
(6) Garagekeepers' legal liability $
<PAGE>
(a) If at any time the Lessee shall become entitled to an abatement
of basic rental under the provisions of this Agreement or otherwise, such
abatement shall be computed as follows:
1) For each square foot of usable open area the use of
which is denied to the Lessee, at the annual rate of$ 1.10*
2) For each square foot of usable covered area the use of
which is denied to the Lessee, at the annual rate of$ 3.30**
(b) If no rates are filled in above then the abatement of basic
rental shall be made on an equitable basis, giving effect to the amount and
character of the area the use of which is denied the Lessee, as compared
with the entire area of such character included in the premises.
(c) If an exemption amount is fixed in this Agreement, it shall be
reduced in the same proportion as the total basic rental is abated.
(d) For the purposes of this Endorsement, the number of square feet
of covered area shall be computed as follows: by measuring from the inside
surface of outer building walls to the surface of the public area side, or
of the non-exclusive area side, as the case may require, of all partitions
separating the area measured from adjoining areas designated for the use of
the public or for use by the Lessee in common with others, and to the
center of partitions separating the area measured from adjoining area
exclusively used by others; no deduction will be made for columns,
partitions, pilasters or projections necessary to the building and
contained within the area measured. Permanent partitions enclosing
elevators shafts, stairs, fire towers, vents, pipe shafts, meter closets,
flues, stacks and any vertical shafts have the same relation to the area
measured as do outer building walls.
(e) In the event that during the term of the letting under this
Agreement the Lessee shall be partially evicted (actually or
constructively) and shall remain in possession of the premises or the
balance thereof, the Lessee agrees that notwithstanding it might have the
right to suspend payment of the rent in the absence of this provision, it
will pay at the times and in the manner herein provided, the full basic
rental less only an abatement thereof computed in accordance with the
above.
* for the period from January 1, 1997 through June 30, 2000, both dates
inclusive; at the annual rate of $1.1440 for the period from July 1,
2000, through June 30, 2002, both dates inclusive; at the annual rate
of $1.2012 for the period from July 1, 2002 through June 30, 2004,
both dates inclusive; and at the annual rate of $1.2733 for the period
from July 1, 2004 through June 30, 2006, both dates inclusive.
** for the period from January 1, 1997 through June 30, 2000, both dates
inclusive; at the annual rate of $3.4320 for the period from July 1,
2000 through June 30, 2002, both dates inclusive; at the annual rate
of $3,6036 for the period from July 1, 2002 through June 30, 2004,
both dates inclusive; and at the annual rate of $3.8198 for the period
from July 1, 2004 through June 30, 2006, both dates inclusive.
<PAGE>
SPECIAL ENDORSEMENTS
1. MAINTENANCE. Notwithstanding the provisions of paragraph (c) of
Section 7 of the Terms and Conditions of this Agreement, the Lessee shall
not be obligated, except as provided in paragraph (b) of Section 7 and
except as provided hereinafter in this Special Endorsement, to make any
repairs to the sprinkler and stand pipe systems on or serving the premises,
or any structural repairs or replacements to the substructure (all
structural components below the interior floor surface) of the pier. After
receipt by the Port Authority of notice from the Lessee that repair or
replacement of any of the foregoing parts of the premises is needed
(stating precisely the items of work required), the Port Authority shall
make the same to the extent necessary to keep such part of the premises in
a reasonably good condition for the operations of the Lessee under this
Agreement; but the Port Authority shall not be obligated to make repairs or
replacements to bring the said parts of the premises to a better condition
than that existing at the commencement of the letting. The Port Authority
shall have no obligation whatsoever under this Special Endorsement to make
repairs or replacements of any structure, building, installation or
fixture, or any part of any of them, which have been brought to or built or
installed on the premises by the Lessee or its contractor, whether or not
with the prior consent of the Port Authority, whether or not the same has
become part of the premises under this Agreement and whether or not title
thereto has vested in the Port Authority. The responsibility of the Port
Authority under this Special Endorsement shall be limited to bearing the
expense of the repair or replacement and, without limitation of the
foregoing, the Port Authority shall have no obligation whatsoever with
respect to any repairs or replacements which are the obligation of the
Lessee under other provisions of this Agreement. The Port Authority shall
have no obligation with respect to any repairs or replacements required
because of a casualty, whether or not insured or insurable, except as
expressly provided in Section 8 of the said Terms and Conditions. If the
Port Authority shall fail after a reasonable time to perform its
obligations hereunder, the Lessee, as its sole remedy, shall perform the
work, and the Port Authority shall on demand pay to the Lessee its actual
certified cash expenditures therefor or, at the option of the Port
Authority, shall extend to the Lessee in an amount equal to such
expenditures a credit against its rental obligations under this Agreement.
Furthermore, prior to commencement by the Port Authority of any work set
forth in the Lessee's notice to the Port Authority, the Lessee shall take
all precautions necessary to protect persons or property at the Facility,
including the immediate performance by the Lessee of such work as may be
required to correct conditions which involve danger to persons or property,
and the Port Authority will reimburse the Lessee for such work as
hereinabove provided. Without limiting any obligation of the Lessee under
this Agreement, the Port Authority, at any time and from time to time
during the letting, may enter the premises for the purpose of making
repairs or replacements, or for the purpose of performing maintenance,
whether or not the Port Authority is obligated hereunder to do the same and
whether or not the Port Authority has received a notice, request or other
communication from the Lessee concerning any such repair or replacement,
provided that this right of the Port Authority shall not constitute or be
deemed to constitute any obligation or duty on the Port Authority either to
the Lessee or others to make any repairs or replacements, do any
maintenance or do anything else in connection therewith. The Lessee shall
indemnify and hold harmless the Port Authority, its Commissioners,
officers, agents, employees and representatives from and against all claims
and demands of any and all third persons whatsoever, including without
limitation thereto the Lessee's employees, officers, agents and
representatives, for personal injuries (including death) or property
damage, which may arise from the condition of the premises or any part
thereof or from failure of the Lessee to notify the Port Authority of
conditions requiring repair or replacement, or from failure of the Lessee
to make timely corrections of dangerous or potentially dangerous conditions
in or on the premises. The Lessee hereby releases and discharges the Port
Authority, its Commissioners, officers, agents, employees, contractors and
subcontractors, and their employees, from all liability for damage to the
Lessee, consequential or otherwise, in connection with any provision of
this Special Endorsement concerning repair or replacement of any portion of
the premises, including without limitation thereto any failure on the part
of the Port Authority for any reason whatsoever to make any repair or
replacement, and including without limitation thereto any act or omission
of the Port Authority, its officers, agents, employees, contractors of
their employees, connected with the performance of such repairs or
replacement.
2. RENTAL PAYMENT START DATE. As used herein the term "Rental
Payment Start Date" shall mean the earlier of the following dates:
(a) January 1, 1997; or
(b) such earlier date on which the Lessee makes use of any area
of the premises for any purpose set forth in Article IV of this Agreement.
3. BASIC RENTAL. The Lessee shall pay basic rental to the Port
Authority during the term of the letting as follows: (a) during the period
from the Rental Payment Start Date through June 30, 2000, both dates
inclusive, at the annual rate of Seven Hundred Ninety-four Thousand Six
Hundred Forty Dollars and No Cents ($794,640.00) payable in advance in
equal monthly installments of Sixty-six Thousand Two Hundred Twenty Dollars
and No cents ($66,220.00) on the Rental Payment Start Date and on the first
day of each calendar month thereafter during such period, PROVIDED,
HOWEVER, THAT, if the Rental Payment Start Date shall occur other than on
the first day of a calendar month the basic rental for the portion of the
month in which the Rental Payment Start Date shall occur following such
date shall be the amount of the monthly installment set forth in this
Special Endorsement prorated on a daily basis; (b) during the period from
July 1, 2000 through June 30, 2002, both dates inclusive, at the annual
rate of Eight Hundred Twenty-six Thousand Four Hundred Twenty-eight Dollars
and No Cents ($826,428.00) payable in advance in equal installments of
Sixty-eight Thousand Eight Hundred Sixty-Nine Dollars and No Cents
($68,869.00) on July 1, 2000 and on the first day of each calendar month
thereafter during such period; (c) during the period from July 1, 2002
through June 30, 2004, both dates inclusive, at the annual rate of Eight
Hundred Sixty-seven Thousand Seven Hundred Forty-four Dollars and No Cents
($867,744.00) payable in advance in equal monthly installments of Seventy-
two Thousand Three Hundred Twelve Dollars and No Cents ($72,312.00) on July
1, 2002 and on the first day of each calendar month thereafter during such
period; and (d) during the period from July 1, 2004 through June 30, 2006,
both dates inclusive, at the annual rate of Nine hundred Nineteen Thousand
Eight Hundred Twelve Dollars and No cents ($919,812.00) payable in advance
in equal monthly installments of Seventy-six Thousand Six Hundred Fifty-one
Dollars and No Cents ($76,651.00) on July 1, 2004 and on the first day of
each calendar month thereafter during such period.
4. ABATEMENT. Abatement of basic rental, if any, to which the
Lessee may be entitled shall be computed in accordance with the provisions
of Standard Endorsement No. L27.4 attached hereto and hereby made a part of
this Agreement.
5. BERTHING. The Lessee shall have no right to berth vessels in the
water area on the sides of Pier 3 except in accordance with and subject to
the Port Authority's tariff, as incorporated in FMC Schedule PA-10, as
amended from time to time, including, without limitation, payment to the
Port Authority with respect to each vessel of dockage and wharfage charges
as set forth therein from time to time.
6. PIER APRON. (a) The Lessee understands that subject to such
rules and regulations as the Port Authority may have or may hereafter
promulgate for the safe and efficient operation of the Facility, the Port
Authority hereby grants to the Lessee the exclusive right to use the pier
apron alongside the northerly, westerly and southerly exteriors of the pier
shed, as shown on Exhibit A ("Pier Apron") between the hours of 06:00
o'clock A.M. Monday to 02:00 o'clock P.M. Saturday. The Lessee hereby
agrees to provide reasonable ingress to and egress from the Pier Apron and
shall not do anything or permit anything to be done which will interfere
with the rights of the general public to have access to and use the Pier
Apron between the hours of 02:00 o'clock P.M. Saturday and 06:00 o'clock
A.M. Monday for recreational purposes; and the Port Authority agrees to
require its other authorized users not to interfere with the Lessee's to
use the Pier Apron, as set forth herein. Nothing in this paragraph shall
be deemed or construed to be a grant or letting to the Lessee of any berth,
roadway, utility lines or structures, or common area, or of any facility
forming a part of the Pier Apron.
(b) The Port Authority hereby agrees that in the event the Port
Authority (i) leases or grants permission to a third party to use and
occupy the Pier Apron or (ii) sells, conveys or transfers the fee ownership
of the pier during the term of this Lease, it shall (x) require the Lessee
or permittee or (y) use its best effort to require the new fee owner to
agree to indemnify and hold harmless the Lessee, its officers and employees
from all claims and demands of third persons including but not limited to
claims and demands for death, claims and demands for personal injuries and
claims and demands for property damages, arising out of the use of the Pier
Apron and the means of access thereto over and through the premises by such
third persons, as provided in this Lease.
7. PORT AUTHORITY'S WORK. Subject to all the provisions of this
Agreement (including but not limited to Section 28 hereof entitled "Force
Majeure"), the Port Authority, through its employees, agents,
representatives, contractors and subcontractors shall perform the following
work (hereinafter called the "Port Authority's Work") to prepare the
premises for the Lessee's use and occupancy;
(i) replacing non-working light bulbs;
(ii) patching holes in siding; and
(iii) correcting any gap between the bottom of roll-up doors
and the floor.
Except as specifically provided in this Special Endorsement, the Port
Authority shall not be obligated to make any improvements or do any
construction work in or on the premises. In addition to any other rights
of entry reserved to the Port Authority under this Agreement, the Port
Authority reserves for itself, its employees, agents, representatives,
contractors and subcontractors the right to enter the premises at any time
and from time to time during the term of the letting in order to perform
the Port Authority's Work.
8. LESSEE' CONSTRUCTION WORK. (a) The Lessee shall have the right,
subject to the provisions of this Special Endorsement, to perform
construction and installation work within the premises (which work is
hereinafter called the "Lessee's Construction Work"):
(i) installation of office and display space on the pier;
(ii) replacement of overhead doors;
(iii) installation of windows;
(iv) installation of additional lavatories; and
(v) reconfiguration of entryways.
The Lessee's Construction Work shall be performed at the Lessee's sole cost
and expense and the Port Authority shall have no obligation to make any
payment to the Lessee on account of the performance of the Lessee's
Construction Work.
(b) With respect to the Lessee's Construction Work the Lessee
shall be the insurer of the Port Authority, and its Commissioners,
officers, agents and employees against the following distinct and several
risks, whether they arise from acts or omissions of the Lessee, any
contractors of the Lessee, the Port Authority, third persons, or from acts
of God or the public enemy, or otherwise, excepting only risks which result
solely from intentional tortious acts done by the Port Authority subsequent
to commencement of the work:
(i) The risk of loss or damage to all such construction
prior to the completion thereof. In the event of such loss or
damage, the Lessee shall forthwith repair, replace and make good
the work without cost to the Port Authority;
(ii) The risk of death, injury or damage, direct or
consequential, to the Port Authority, and its Commissioners,
officers, agents and employees, and to its or their property,
arising out of or in connection with the performance of the work.
The Lessee shall indemnify the Port Authority, and its
Commissioners, officers, agents and employees, for all such
injuries and damages, and for all loss suffered by reason
thereof;
(iii) The risk of claims and demands, just or unjust, by
third persons against the Port Authority, and its Commissioners,
officers, agents and employees, arising or alleged to arise out
of the performance of the work. The Lessee shall indemnify the
Port Authority, and its Commissioners, officers, agents and
employees, against and from all such claims and demands, and for
all loss and expense incurred by it and by them in the defense,
settlement or satisfaction thereof including without limitation
thereto, claims and demands for death, for personal injury or for
property damage, direct or consequential.
(c) Prior to the commencement of any of the Lessee's
Construction Work, the Lessee shall submit to the Port Authority for its
approval a Construction Application in the form supplied by the Port
Authority, and containing such terms and conditions as the Port Authority
may include, setting forth in detail by appropriate plans and
specifications the work the Lessee proposes to perform and the manner of
and time periods for performing the same, including without limitation a
schedule listing each contract proposed to be entered into for the
performance of the work and the estimated cost of the work to be performed
under each such contract. The data to be supplied by the Lessee shall
identify each of the items constituting the Lessee's Construction Work, and
shall describe in detail the systems, improvements, fixtures and equipment
to be installed by the Lessee. The Lessee shall be responsible at its sole
expense for retaining all architectural, engineering and other technical
consultants and services as may be directed by the Port Authority and for
developing, completing and submitting detailed plans and specifications for
the work. The plans and specifications to be submitted by the Lessee shall
be in sufficient detail for a contractor to perform the work and shall bear
the seal of a qualified architect or professional engineer who shall be
responsible for the administration of the work in accordance with the Port
Authority's requirements. In connection with review by the Port Authority
of the Lessee's submissions under this paragraph, the Lessee shall submit
to the Port Authority at the Port Authority's request, such additional
data, detail or information as the Port Authority may find necessary.
Following the Port Authority's receipt of the Lessee's Construction
Application and complete plans and specifications, the Port Authority shall
give its written approval or rejection thereof, or shall request such
revisions or modifications thereto as the Port Authority may find
necessary. The Lessee shall not engage any contractor or permit the use of
any subcontractor unless and until each such contractor or subcontractor,
and the contract such contractor is operating under, have been approved by
the Port Authority. The Lessee shall include in any such contract or
subcontract such provisions as are required in accordance with the
provisions of this Agreement and the Construction Application approved by
the Port Authority. The Lessee shall obtain and maintain or cause each
contractor to obtain and maintain in force such insurance coverage as is
described in paragraphs (j) and (k) of this Special Endorsement and such
performance bonds as the Port Authority may specify. All of the Lessee's
Construction Work shall be performed by or on behalf of the Lessee in
accordance with the Construction Application and final plans and
specifications approved by the Port Authority, shall be subject to
inspection by the Port Authority during the progress of the work and after
the completion thereof, and the Lessee shall redo or replace at its own
expense any work not done in accordance therewith. Upon final completion
of all of the Lessee's Construction Work the Lessee shall deliver to the
Port Authority a certificate to such effect signed by an executive officer
of the Lessee and by the architect or engineer who sealed the Lessee's
plans pursuant to the provisions of this paragraph certifying that all of
the work has been performed in accordance with the approved plans and
specifications and the provisions of this Agreement, and the Lessee shall
supply the Port Authority with as-built drawings of the Lessee's
Construction Work in such form and number requested by the Port Authority.
The Lessee shall keep said drawings current during the term of the letting
under this Agreement. No changes or modifications to such work shall be
made without prior Port Authority consent. Following its receipt of the
Lessee's certificate, the Port Authority shall inspect the work and, unless
such certification is not correct, or the Port Authority determines that
the premises are unsuitable for occupancy and use by the Lessee, a
certificate of final completion shall be delivered to the Lessee by the
Port Authority.
(d) Except as set forth in paragraph (e) of this Special
Endorsement, the Lessee shall not commence any portion of the Lessee's
Construction Work until the Construction Application and plans and
specifications covering such work, referred to in paragraph (c) of this
Special Endorsement, have been finally approved by the Port Authority.
(e) If the Lessee desires to commence construction of portions
of the Lessee's Construction Work prior to the approval by the Port
Authority of the complete Construction Application and plans and
specifications covering all of such work pursuant to paragraph (c) of this
Special Endorsement, the Lessee shall submit to the Port Authority a
separate Construction Application for each portion of the Lessee's
Construction Work the Lessee so desires to commence (each such portion of
the Lessee's Construction Work being hereinafter designated as "Partial
Approval Work") which shall be executed by an authorized officer of the
Lessee and shall be accompanied by final and complete plans,
specifications, drawings, and data with respect to such portion of the
Lessee's Construction Work (the final and complete plans, specifications,
drawings, and data covering each such portion of the Lessee's Construction
Work are hereinafter referred to as the "Partial Approval Work Plans" with
respect to such portion of the Lessee's Construction Work) setting forth in
detail the work to be performed in connection with each such portion of the
Lessee's Construction Work. The Port Authority shall have full and
complete discretion as to whether to permit the Lessee to proceed with the
performance of any Partial Approval Work. If the Port Authority consents
to the performance of any Partial Approval Work, the Port Authority shall
review the Construction Application covering such work and shall give its
written approval or rejection of the Partial Approval Work Plans with
respect thereto or shall request such revisions or modifications thereto as
the Port Authority may find necessary. Upon the Port Authority's approval
of the Construction Application covering an item of Partial Approval Work
and its approval of the Partial Approval Work Plans with respect thereto,
the Lessee may proceed to perform such item of Partial Approval Work
subject to and in accordance with the following terms and conditions:
(1) The performance by the Lessee of any item of Partial
Approval Work in accordance with the Port Authority's approval will be at
its sole risk and if for any reason the plans and specifications for the
balance of the Lessee's Construction Work or, any part thereof, are not
approved by the Port Authority or if the approval thereof calls for
modifications or changes in any item of Partial Approval Work undertaken by
the Lessee under any approval granted by the Port Authority pursuant to
this paragraph, the Lessee will, as directed by the Port Authority, and at
the Lessee's sole cost and expense, either restore the area affected to the
condition existing prior to the commence of such item of Partial Approval
Work or make such modifications and changes to such work as may be required
by the Port Authority.
(2) Nothing contained in any approval given pursuant to
this paragraph shall constitute a determination or indication by the Port
Authority that the Lessee has complied with any laws, rules, orders,
ordinances, enactments, resolutions, regulations, statutes, requirements,
codes, directions, and executive orders, including but not limited to those
of the City of New York, which may pertain to the Partial Approval Work to
be performed and which the Lessee is required to comply with pursuant to
this Agreement.
(3) Each item of Partial Approval Work shall be performed
in accordance with and subject to the terms and provisions of this
Agreement covering the Lessee's Construction Work and in accordance with
the approved Construction Application covering such item of Partial
Approval Work and in accordance with the approved Partial Approval Work
Plans constituting a part of such Construction Application, and subject to
any requirements, stipulations, and provisions which the Port Authority may
impose in its approval of the performance of such item of Partial Approval
Work.
(4) No Partial Approval Work performed by the Lessee
pursuant to the provisions of this paragraph shall affect or limit the
obligations of the Lessee under any prior approvals it may have obtained
with respect to the Lessee's Construction Work.
(5) The fact that the Lessee has performed any item of
Partial Approval Work and that the Port Authority has consented to the
performance thereof shall not affect or limit the obligations of the Lessee
under this Agreement with respect to the Lessee's Construction Work. The
Lessee specifically understands that neither the Port Authority's approval
of any Construction Application and Partial Approval Work Plans covering
any item of Partial Approval Work nor the performance by the Lessee of any
item of Partial Approval Work pursuant to such approval shall obligate the
Port Authority to approve the Construction Application and plans and
specifications submitted by the Lessee for the balance of the Lessee's
Construction Work or shall create or be deemed to create any obligation on
the part of the Port Authority to permit subsequent Partial Approval Work
to be performed. Without limiting the generality of the provisions of this
paragraph, it is specifically understood that the Port Authority may
withhold its approval of a Construction Application and Partial Approval
Work Plans covering any item of Partial Approval Work if the Port Authority
determines that review of subsequent items of Partial Approval Work is
required before the Port Authority can approve, reject, or comment upon
such Partial Approval Work Plans.
(6) In the event that in the opinion of the Port Authority
the Lessee at any time during the performance of any portion of any item of
Partial Approval Work under the approval granted by the Port Authority
pursuant to this paragraph shall fail to comply with all of the provisions
of this Agreement with respect to such work or shall fail to comply with
the provisions of the Construction Application covering such work and the
plans and specifications forming a part thereof, or shall fail to comply
with any requirements, stipulations, or provisions imposed by the Port
Authority in its approval of the performance of such item of Partial
Approval Work, or if in the Port Authority's opinion the Lessee shall be in
breach of any of the provisions of this Agreement covering such work or
shall be in breach of any of the provisions of the Construction Application
and plans and specifications covering the performance of such work, or
shall be in breach of any requirements, stipulations, or provisions imposed
by the Port Authority in its approval of the work, the Port Authority shall
have the right to cause the Lessee to cease all or such part of such item
of the Partial Approval Work as is being performed in violation of this
Agreement, the Construction Application and plans and specifications, or
the conditions of the Port Authority's approval. Upon written direction
from the Port Authority, the Lessee shall promptly cease performance of the
portion of the Partial Approval Work specified. The Lessee shall thereupon
submit to the Port Authority for its written approval the Lessee's proposal
for making modifications, corrections or changes in or to the item of
Partial Approval Work that has been or is to be performed so that the same
will comply with the provisions of this Agreement, the Construction
Application and plans and specifications, or the conditions of the Port
Authority's approval covering such work. The Lessee shall not commence
construction of the portion of the Partial Approval Work that has been
halted until it has received written approval of the proposed
modifications, corrections or changes.
(7) It is hereby expressly understood and agreed that the
Port Authority has no duty or obligation of any kind whatsoever to inspect
or police the performance of any Partial Approval Work by the Lessee and
the rights granted to the Port Authority hereunder shall not create or be
deemed to create such a duty or obligation. Accordingly, the fact that the
Port Authority has not exercised its right to require the Lessee to cease
performance of all or any part of the Partial Approval Work shall not be or
be deemed to be an agreement or acknowledgment on the part of the Port
Authority that the Lessee has in fact performed such work in accordance
with the terms of this Agreement, the Construction Application and plans
and specifications covering such work, or the conditions of the Port
Authority's approval of such work, nor shall such fact be or be deemed to
be a waiver by the Port Authority of any of the requirements of this
Agreement with respect to such work, or any of the requirements of the
Construction Application and plans and specifications covering such work,
or any of the conditions of the Port Authority's approval of such work.
(f) Without limiting the generality of any of the provisions of
this Agreement, the Lessee's Construction Work (including any Partial
Approval Work performed by the Lessee) shall be performed in such a manner
that there will be at all times during construction a minimum of air
pollution, water pollution or any other type of pollution, and a minimum of
noise emanating from, arising out of, or resulting from construction.
Subject to the provisions of this Agreement, the Lessee shall construct
such reasonable structures, fences, equipment, devices and other facilities
as may be necessary or appropriate to accomplish the objectives set forth
in this paragraph, and, without limiting the generality of the foregoing,
such construction shall be subject to the Port Authority's review and
approval in accordance with the provisions of this Special Endorsement.
(g) Without limiting the generality of paragraph (c) of this
Special Endorsement, the Lessee shall be solely responsible for the plans
and specifications used by it and for the adequacy or sufficiency of such
plans, specifications and all the improvements, fixtures, and equipment
depicted thereon or covered thereby, regardless of the consent thereto or
approval thereof by the Port Authority or the incorporation therein of any
Port Authority requirements or recommendations. The Port Authority shall
have no obligation or liability in connection with the performance of any
of the Lessee's Construction Work or for the contracts for the performance
thereof entered into by the Lessee. Any warranties extended or available
to the Lessee in connection with the aforesaid work shall be for the
benefit of the Port Authority as well as the Lessee. The Lessee recognizes
that its obligation to pay the basic rental provided for in this Agreement
shall commence on the Rental Payment Start Date established pursuant to the
provisions of Special Endorsement 2 of this Agreement whether or not the
Lessee's Construction Work is then completed and regardless of whether the
Lessee is then conducting any public operations in the premises. The
Lessee shall conduct no public operations in the premises with respect to
any improvements, fixtures or equipment constituting the Lessee's
Construction Work until the Port Authority shall have notified the Lessee
in writing that the Lessee's Construction Work has been completed or
substantially completed to its satisfaction. In the event of any
inconsistency between the provisions of this Agreement and those of the
Construction Application referred to in paragraph (c) of this Special
Endorsement the provisions of this Agreement shall control.
(h) Without limiting or affecting any other term or provision of
this Agreement, the Lessee shall be solely responsible for the design,
adequacy and operation of all utility, mechanical, electrical,
communications and other systems installed in the premises by the Lessee
and all other improvements, additions, fixtures, finishes, decorations and
equipment made or installed by the Lessee in the premises and shall do all
preventive maintenance and make all repairs, replacements, rebuilding
(ordinary or extraordinary, structural or non-structural) and painting
necessary to keep such systems, improvements, additions, fixtures,
finishes, decorations and equipment (whether the same involves structural
or non-structural work) in the condition they were in when made or
installed except for reasonable wear which does not adversely affect the
efficient or proper utilization of any part of the premises.
(i) The Lessee shall pay all claims lawfully made against it by
its contractors, subcontractors, materialmen and workmen, and all claims
lawfully made against it by other third persons arising out of or in
connection with or because of the performance of the work, and shall cause
its contractors and subcontractors to pay all such claims lawfully made
against them. Nothing herein contained shall be deemed to constitute
consent to the creation of any lien or claim against the premises or any
part thereof, nor to prevent the Lessee from contesting claims in good
faith.
(j) In addition to all policies of insurance otherwise required
by this Agreement, the Lessee shall procure and maintain or cause to be
procured and maintained in effect during the performance of the Lessee's
Construction Work;
(i) Comprehensive General Liability Insurance including but
not limited to coverage for Products Liability-Completed
Operations and for Broad Form Property Damage and Independent
Contractor coverage, with a contractual liability endorsement
covering the obligations assumed by the Lessee under paragraph
(b) of this Special Endorsement, and which are customarily
insured under such a policy, with a minimum combined single limit
coverage for bodily injury and property damage of $2 million.
Said insurance shall also include coverage for explosion,
collapse and underground property damage hazards.
(ii) Comprehensive Automobile Liability Insurance covering
all owned, non-owned or hired vehicles used in connection with
said construction with a minimum combined single limit coverage
for bodily injury and property damage of $2 million.
(iii) Workers' Compensation and Employer's Liability
Insurance in accordance with the requirements of law.
(k) In addition to the insurance required pursuant to the
provisions of paragraph (j) of this Special Endorsement, the Lessee shall
procure or cause to be procured prior to the commencement of any work
Builder's Risk Insurance (All Risk) covering loss or damage (including any
loss or damage resulting from flood or earthquake) to any structures,
improvements, fixtures and equipment and furnishing and materials on the
premises during said construction, whether or not attached to the land, in
an amount equal to the full replacement cost. Such insurance shall name
the Port Authority as an insured and such policy shall provide that the
loss shall be adjusted with the Port Authority, and that the proceeds
thereof shall be paid to the Port Authority and shall be made available to
the Lessee for and applied strictly and solely to the payment of the cost
of the repair, replacement, rebuilding or other performance of the Lessee's
Construction Work.
(l) With the exception of the Workers' Compensation and
Employer's Liability Insurance policy each policy of insurance described in
paragraph (j) of this Special Endorsement shall include the Port Authority
as an additional insured, and no such policy shall contain any care,
custody or control exclusions, or any exclusion of bodily injury to or
sickness, disease or death of any employee of the Lessee or of any of its
contractors which would conflict with or in any way impair the coverages
resulting from the Port Authority's status as an additional insured or the
coverage under the contractual liability endorsement described in
subparagraph (i) of paragraph (__) of this Special Endorsement. Such
insurance shall also contain an endorsement providing that the protection
afforded the Lessee thereunder with respect to any claim or action against
the Lessee by a third party shall pertain and apply with like effect with
respect to any claim or action against the Lessee by the Port Authority and
against the Port Authority by the Lessee, but said endorsement shall not
limit, vary, change or affect the protections afforded the Port Authority
as an additional insured. Such insurance shall contain a provision that
the insurer shall not, without obtaining express advance permission from
the General Counsel of the Port Authority, raise any defense involving in
any way the jurisdiction of the tribunal over the person of the Port
Authority, the immunity of the Port Authority, its Commissioners, officers,
agents or employees, the governmental nature of the Port Authority or the
provisions of any statutes respecting suits against the Port Authority.
(m) Unless otherwise set forth herein, each policy of insurance
described in paragraphs (j) and (k) of this Special Endorsement shall be
subject to the applicable provisions of Standard Endorsement No. L21.1 to
this Agreement.
(n) Title to and property in all improvements and fixtures
placed, constructed or installed in or on the premises, including all such
improvements and fixtures as shall constitute the Lessee's Construction
Work, shall vest in the Port Authority upon placement, construction or
installation thereof and title to and property in any and all equipment and
trade fixtures removable without substantial injury to the premises placed
in or installed upon the premises shall vest in the Lessee upon the
installation thereof. No equipment or trade fixtures shall be removed by
the Lessee prior to the expiration date of the letting under this Agreement
unless replaced with identical property of equal or greater value. Without
limiting any other term of this Agreement, and notwithstanding the
foregoing provisions, upon notice given by the Port Authority either prior
to or within sixty (60) days after expiration or earlier termination of the
letting of the premises under this Agreement the Lessee shall remove from
the premises any improvements, fixtures, trade fixtures, or equipment as
the Port Authority may specify in its notice, and shall repair any damage
to the premises caused by such removal.
(o) In the performance of the Lessee's Construction Work the
Lessee shall not permit any situation or condition to continue that may
cause or be conducive to any labor troubles at the Facility which
interferes with the progress of other construction work at the Facility.
The determinations of the Port Authority shall be conclusive on the Lessee
and, upon notice from the Port Authority, the Lessee shall or shall cause
its contractor to immediately rectify any condition specified in the
notice. In the event of failure by the Lessee or any of its contractors to
immediately comply with the requirements of this paragraph (whether or not
such failure is due to the Lessee's fault) the Port Authority by notice
shall have the right to suspend the Port Authority's permission to the
Lessee to proceed with any portion of the Lessee's Construction Work being
performed by or on behalf of the Lessee, and the Lessee shall thereupon
immediately cease the same. When labor troubles shall be so settled that
such interference or the danger thereof no longer exists, the Port
Authority by notice to the Lessee shall reinstate the permission to the
Lessee to perform the work on all the same terms and conditions as before
the suspension. "Labor troubles" shall mean and include strikes, boycotts,
picketing, work-stoppages, slowdowns, complaints, disputes, controversies
or any other type of labor trouble, regardless of the employer of the
person involved or their employment status, if any.
(p) No contractor or third party shall or shall be deemed to
have acquired any rights against the Port Authority by virtue of the
execution of this Agreement and nothing contained herein shall operate or
give to any such contractor or third party any claim or right of action
against the Port Authority and its Commissioners, officers, agents and
employees.
9. INSURANCE. (a) The Lessee shall secure and maintain in its own
name as assured and shall pay the premiums on the following policy of
insurance in the limit set forth below, which policy shall be effective
during the term of the letting under this Agreement:
(1) All risk property damage insurance covering the
full replacement cost of any property owned, leased, or within
the care, custody or control of the Lessee and now or in the
future located on or constituting a part of the premises, except
for any personal property owned by the Port Authority. Full
replacement cost of the premises is currently estimated by the
Port Authority to be not less than $520,000.00. No omission on
the part of the Port Authority to make such determination shall
relieve the Lessee of its obligations to maintain the appropriate
insurance under this Special Endorsement. Such insurance shall
cover and insure against such hazards and risks as at least would
be insured against under the Standard Form of Fire Insurance
policy in the State of New York, or any successor thereto, and
the broadest form of extended coverage endorsement prescribed as
of the effective date of said insurance by the rating
organization having jurisdiction, including without limitation
hazards and risks of flood, earthquake, windstorm, cyclone,
tornado, hail, explosion, riot, civil commotion, aircraft,
vehicles and smoke, and, if the Port Authority so requests, also
covering nuclear property losses and contamination and boiler and
machinery hazards and risks (if said coverage regarding nuclear
property losses and contamination is or becomes available.
(2) Unless otherwise directed by the Port Authority, the
property damage insurance policy required by this Special Endorsement shall
name the Port Authority and the Lessee (with insurance clauses consistent
with the provisions of this Agreement) as the insureds, as their respective
interests may appear, and shall provide that loss, if any, shall be
adjusted with and payable to the Port Authority. As to any insurance
required by this Special Endorsement, a certificate of insurance, or
binders, shall be delivered by the Lessee to the Port Authority
simultaneously with the delivery of an executed copy of this Agreement by
the Lessee. In the event any binder is delivered, it shall be replaced
within thirty (30) days by a certificate of insurance. Each such policy
shall contain a valid provision or endorsement that the policy may not be
cancelled, terminated, changed or modified, without giving at least thirty
(30) days' written advance notice thereto to the Port Authority and an
endorsement to the effect that the insurance as to the interest of the Port
Authority shall not be invalidated by any act or negligence of the Lessee
or any other insured. Each policy of insurance shall have attached thereto
an endorsement that the Port Authority will be given at least thirty (30)
days' prior notice of any material change in the policy. A certificate of
insurance with respect to a renewal policy shall be delivered to the Port
Authority at least fifteen (15) days prior to the expiration date of each
expiring policy, except for any policy expiring after the date of
expiration of the effective term hereof. If at any time the policy
required by this Special Endorsement shall be or become unsatisfactory to
the Port Authority as to form or substance, or if the carrier issuing such
policy shall be or become unsatisfactory to the Port Authority, the Lessee
shall promptly obtain a new and satisfactory policy in replacement.
Except as may be otherwise determined by the Port Authority pursuant to the
provisions of Section 8 of the Terms and Conditions of this Agreement, the
proceeds of insurance from coverages secured in accordance with this
Special Endorsement shall be made available to the Lessee and shall be
applied by the Lessee strictly and solely to the repair, replacement, or
rebuilding of the premises as provided in this Agreement.
(b) The policy of comprehensive general liability insurance
required by Standard Endorsement No. L21.1 to this Agreement shall include
a contractual liability endorsement covering the Lessee's indemnity
obligations under this Agreement. The policy of automobile liability
insurance required by said Standard Endorsement No. L21.1 shall cover all
owned, non-owned and hired vehicles. Each policy of insurance required by
said Standard Endorsement No. L21.1 shall contain an endorsement providing
that the protections afforded the Lessee thereunder with respect to any
claim or action against the Lessee by a third party shall pertain and apply
with like effect with respect to any claim or action against the Lessee by
the Port Authority and against the Port Authority by the Lessee, but said
endorsement shall not limit, vary, change or effect the protections
afforded the Port Authority as an additional insured.
(c) Notwithstanding anything contained in Standard Endorsement
No. L21.1 annexed to this Agreement, it is specifically understood and
agreed that the Port Authority shall have the right upon notice to the
Lessee given from time to time and at any time to require the Lessee to
increase any or all of the limits set forth in said Standard Endorsement
No. L21.1 and the Lessee shall promptly comply therewith and shall promptly
submit a certificate or certificates evidencing the same to the Port
Authority.
10. LATE CHARGES. If the Lessee shall fail to pay any amount
required under this Agreement when due to the Port Authority, including
without limitation any payment of basic rental, additional rental or any
payment of utility fees or charges or other charges or fees, or if any such
amount is found to be due as the result of an audit, then, in such event,
the Port Authority may impose (by statement, bill or otherwise) a late
charge with respect to each such unpaid amount for each late charge period
hereinbelow described during the entirety of which such amount remains
unpaid, each such late charge not to exceed an amount equal to eight-tenths
of one percent of such unpaid amount for each late charge period. there
shall be twenty-four late charge periods during each calendar year; each
late charge period shall be for a period of at least fifteen (15) calendar
days except one late charge period each calendar year may be for a period
of less than fifteen (but not less than thirteen) calendar days. Without
limiting the generality of the foregoing, late charge periods in the case
of amounts found to have been owing to the Port Authority as the result of
Port Authority audit findings shall consist of each late charge period
following the date the unpaid amount should have been paid under this
Agreement. Each late charge shall be payable immediately upon demand made
at any time therefor by the Port Authority. No acceptance by the Port
Authority of payment of any unpaid amount or of any unpaid late charge
amount shall be deemed a waiver of the right of the Port Authority to
payment of any late charge or late charges payable under the provisions of
this paragraph, with respect to such unpaid amount. Each late charge shall
be and become additional rent, recoverable by the Port Authority in the
same manner and with like remedies as if it were originally a part of the
rental set forth in this Agreement. Nothing in this paragraph is intended
to, or shall be deemed to, affect, alter, modify or diminish in any way (i)
any rights of the Port Authority under this Agreement, including without
limitation the Port Authority's rights set forth in Section 16 of the Terms
and Conditions of this Agreement entitled "Termination" or (ii) any
obligations of the Lessee under this Agreement. In the event that any late
charge imposed pursuant to this paragraph shall exceed a legal maximum
applicable to such late charge, then, in such event, each such late charge
payable under this paragraph shall be payable instead at such legal
maximum.
11. ADDRESS FOR PAYMENTS. The words "shall be made at the office of
the Treasurer of the Port Authority, One World Trade Center, New York, New
York 10048" appearing int he first and second lines of paragraph (f) of
Section 25 of the Terms and Conditions of this Agreement shall be deemed
deleted and the words "shall be mailed to the Port Authority of New York
and New Jersey, P.O. Box 17309, Newark, New Jersey 07194" shall be deemed
inserted in lieu thereof.
12. CORPORATE GUARANTY. The Lessee shall cause to be executed by The
Strober Organization, Inc. simultaneously with the execution and delivery
by the Lessee of this Agreement to the Port Authority, a Contract of
Guaranty in the form attached hereto and hereby made a part hereof, which
Contract of Guaranty shall guarantee the full, faithful and prompt
performance of and compliance with, on the part of the Lessee, all of the
terms, provisions, covenants and conditions of this Agreement, and the
Lessee shall keep and maintain said Contract of Guaranty in full force and
effect. The existence of the contract of guaranty described in this
Special Endorsement shall not limit or alter any other remedies of the Port
Authority under this Agreement, and the Port Authority may from time to
time and at any time elect to pursue (or not to pursue) its rights under
this contract of guaranty without thereby limiting, voiding or
relinquishing any of its other rights or remedies under this Agreement.
13. FLOOR LOAD. The number of pounds avoirdupois contemplated in
paragraph (h) of Section 4 of the terms and Conditions of this Agreement
shall be 500 on the pier shed floor, 125 in the pier office and toilet
space, and 250 in all other portions of the premises.
14. LESSEE'S ADDITIONAL TERMINATION RIGHTS. It is specifically
understood and agreed that in the event of a casualty described in
Paragraph (a) of Section 8 of the Terms and Conditions of this Agreement
and the work of repair or rebuilding specified in Subparagraph (a)(1) or
(2) of said Paragraph (a) is not completed in 180 days after the occurrence
of the damage, then the Lessee shall have the right, on thirty (30) days's
prior written notice to the Port Authority, to terminate this Agreement and
the letting hereunder, PROVIDED, HOWEVER, that the Lessee shall not have
such right if either on the date of giving said notice it is in default
under any of the terms, covenants and conditions of this Agreement to be
performed, kept or observed by the Lessee. In the event of termination
pursuant to this provision, this Agreement and the letting hereunder shall
cease and expire as if the effective date of termination stated in said
notice were the date originally set forth therein for the expiration of
this Agreement.
15. REAL ESTATE TAXES. Notwithstanding anything contained in
Standard Endorsement No. 5.1 annexed to this Agreement, it is specifically
understood and agreed that the provisions of Paragraph (d) of said Standard
Endorsement shall not be deemed to include any real estate taxes on the
premises under this Agreement.
16. BROKERAGE. Section 29 of the Terms and Conditions of this
Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
"Section 29.BROKERAGE.
The Lessee represents and warrants that no broker has been
concerned in the negotiation of this Agreement or the letting
hereunder except Kalmon Dolgin Affiliates, Inc., a New York
corporation with an office and place of business at 101
Richardson Street, Brooklyn, New York 11211, and Robert S. Klein,
an employee of Kalmon Dolgin Affiliates, Inc., residing at 105
Church Road, Morganville, New Jersey 07751, and that there is no
broker who is or may be entitled to be paid by the Port Authority
a commission in connection with this Agreement except Kamon
Dolgin Affiliates, Inc. and Robert S. Klein, pursuant to a
separate brokerage agreement. The Lessee shall indemnify the
Port Authority and save it harmless from any and all claims which
have been or may be made by any other persons, firms or
corporations for services in connection with the negotiation and
execution of this Agreement or in connection with any letting,
expansion or renewal of the premises referred to herein."
For the Port Authority
Initialed:
For the Lessee
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
On this day of , 1996, before me personally came
to me known, who,
being by me duly sworn, did depose and say that he resides at ;
that he is the of the Port Authority of New York and
New Jersey (one of) the corporations described in and which executed the
foregoing instrument; that he knows the seal of the said corporation; that the
seal affixed to the said instrument is such corporate seal; that it was so
affixed by order of the Board of Commissioners of the said corporation; and
that he signed his name thereto by like order.
(notarial seal and stamp)
STATE OF )
) SS.
COUNTY OF )
On this day of , 1996, before me personally came
to me known, who, being by me duly sworn,
did depose and say that he resides at ;
that he is the President of STROBER BROS, INC. BUILDING SUPPLY CENTERS one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of the said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by order of the Board
of Commissioners of the said corporation; and that he signed his name thereto
by like order.
(notarial seal and stamp)
STATE OF )
) SS.
COUNTY )
On this day of , 1996, before me personally came
to me known, who, being by me duly sworn, did depose
and say that he resides at ; that he is the
President of THE STROBER ORGANIZATION, INC. one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of the
said corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by order of the Board of Commissioners of
the said corporation; and that he signed his name thereto by like order.
(notarial seal and stamp)
<PAGE>
CONTRACT OF GUARANTY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter
called the "Port Authority"), a body corporate and politic, created by
Compact between the States of New Jersey and New York, with the consent of
the Congress of the United States of America, and having an office at One
World Trade Center, in the Borough of Manhattan, in the City, county and
State of New York 10048, has under consideration the attached agreement of
lease dated as of March 29, 1996 and bearing Port Authority file number BP-
276 covering the letting of certain premises at the Brooklyn - Port
Authority Marine Terminal (which agreement of lease is hereinafter called
the "Lease") by and between the Port Authority and Strober Bros., Inc.
Building Supply Centers (hereinafter called the "Lessee"), a corporation
organized and existing under the laws of the State of New York and having
an office and place of business at 550 Hamilton Avenue, Brooklyn, New York
11232 which said Lease includes, without limitation thereto, a provision
for the guaranty of the obligations of the Lessee under the Lease; and
WHEREAS, The Strober Organization, Inc. (hereinafter called the
"Guarantor"), a corporation organized and existing under the laws of the
State of Delaware and having an office and place of business at 550
Hamilton Avenue, brooklyn, New York 11232, in order to induce the Port
Authority to enter into the Lease, is willing to guarantee the payment by
the Lessee of the rentals and other monetary obligations which the Lessee
has under the Lease and to guarantee the performance, fulfillment and
observance by the Lessee of all the other terms, provisions, covenants and
conditions of the Lease on the part of the Lessee to be performed,
fulfilled and observed;
NOW, THEREFORE, for and in consideration of the foregoing, the
Guarantor hereby covenants and agrees with the Port Authority as follows:
1. The Guarantor hereby absolutely and unconditionally guarantees,
promises and agrees that the Lessee will duly and punctually pay all
rentals and other monetary obligations which it has or shall have under the
Lease, and that the Lessee faithfully and fully perform, fulfill and
observe all the other terms, provisions, covenants and conditions of the
Lease on the part of the Lessee to be performed, fulfilled and observed.
2. The Guarantor hereby waives and dispenses with any notice of non-
payment, non-performance or non-observance or proof of notice or demand
whereby to charge it therefor, and agrees that the validity of this
Contract of Guaranty and the obligations of the Guarantor hereunder shall
in no wise be terminated, affected or impaired by reason of any failure on
the part of the Port Authority to insist upon strict performance under the
Lease, or by the assertion by the Port Authority against the Lessee of any
of the rights or remedies reserved to the Port Authority under the
provisions of the Lease, or by the institution, prosecution, withdrawal,
discontinuance or settlement of any judicial or other proceeding by the
Port Authority against the Lessee.
3. The obligations of the Guarantor hereunder shall not be released
or affected in any way by the Port Authority's receipt, application or
release of security given for the performance and observance of the terms,
conditions and provisions to be performed, observed or fulfilled under the
Lease, and the receipt of such security shall not limit or alter the
remedies of the Port Authority under this Contract of Guaranty and the Port
Authority may from time to time and at any time elect to pursue (or not to
pursue) its rights under this Contract of Guaranty without thereby
limiting, voiding or relinquishing any of its rights or remedies under the
Lease.
4. The liability of the Guarantor hereunder shall in no way be
affected by:
(a) The release or discharge of the Lessee in any creditors',
receivership, bankruptcy or other similar proceeding; or
(b) The impairment, limitation or modification of the liability
of the Lessee or its estate in bankruptcy, or of any remedy for the
enforcement of the liability of the Lessee under the Lease, resulting from
the operation of any present or future provision of the Bankruptcy Code or
any other statute or from the decision of any court having jurisdiction
over the Lessee or its estate; or
(c) The rejection or disaffirmance of the Lease in any
creditors', receivership, bankruptcy or other similar proceeding; or
(d) Any disability or any defense of the Lessee.
5. This Contract of Guaranty shall remain and continue in full force
and effect as to any and every renewal, modification or extension of the
Lease, whether in accordance with the terms thereof or by a separate or
additional document, and notwithstanding any such renewal, modification or
extension, whether or not the Guarantor has specifically consented to such
renewal, modification or extension. The liability of the Guarantor
hereunder shall in no way be affected by the failure of the Port Authority
to obtain the Guarantor's consent to any such renewal, modification or
extension, notwithstanding that the Port Authority may have previously
obtained such consent with respect to a prior renewal, modification or
extension.
6. Acceptance of this Contract of Guaranty and reliance thereon by
the Port Authority shall be evidenced by the execution of the Lease by the
Port Authority without any further act or notice. If, for any reason, any
part of the obligations of the Guarantor hereunder shall be held invalid or
unenforceable, the balance of the said obligations shall nevertheless
remain in full force and effect. Failure physically to attach a copy of
the Lease to this Contract of Guaranty shall not void, alter or affect this
Contract of Guaranty, or alter or amend the obligations of the Guarantor
hereunder.
IN WITNESS WHEREOF, the Guarantor has caused these presents to be executed
as of the day of , 1996.
ATTEST: THE STROBER ORGANIZATION, INC.
- ---------------------- By:____________________________________
(Title) PRESIDENT
-------------------------
(Corporate Seal)
<PAGE>
EXHIBIT 10.2
Indenture of Lease made as of 1986 by and between JNR Realty Company
and Strober-L.I. Building Supply Centers, Inc. together with lease
amendatory agreement made as of July 1996 between and among JNR
Realty Company, Strober Long Island Building Supply Centers, Inc.
and The Strober Organization, Inc.
<PAGE>
THIS INDENTURE OF LEASE, made and executed as of the day of
, 1986, by and between J N R REALTY COMPANY (hereinafter referred to
as "Landlord", and STROBER-L.I. BLDG. SUPPLY CENTERS, INC. (hereinafter referred
to as "Tenant").
W I T N E S S E T H:
ARTICLE 1
Demised Premises
That the Landlord, for and in consideration of the rents, terms,
covenants, conditions, provisions and agreements herein reserved and
contained on the part of the Tenant, to be paid, kept and performed, does
by these presents demise and lease unto the Tenant, and the Tenant, does by
these presents demise and lease unto the Tenant, and the Tenant, does
hereby hire and take from the Landlord, upon and subject to the terms,
covenants, conditions, provisions and agreements, hereinafter contained,
the property more particularly described in Exhibit "A" annexed hereto,
(said premises hereinafter called the "Demised Premises", or "demised
premises") together with all right, title and interest of Landlord, if any,
in and to any street or avenues abutting the Demised Premises and the
easements appurtenant to the ownership thereof,
SUBJECT (in so far as the same may be in effect or applicable) TO:
(a) Building restrictions and regulations now in force and
present and future zoning laws, ordinances, resolutions and regulations
affecting the Demised Premises and all present and future ordinances, laws,
regulations and orders of all boards, bureaus, commissions and bodies of
any municipal, county, state or federal sovereigns, now or thereafter
having acquired jurisdiction of the Demised Premises and the use and
improvement thereof.
(b) Revocable nature of the right, if any, to maintain vaults,
vault spaces, basement and subbasement spaces, areas, marquees or signs,
beyond the building lines.
(c) Violations of law, ordinances, orders or requirements noted
as of the commencement date or that might be disclosed by an examination
and inspection or search of the Demised Premises by any federal, state or
municipal departments or authority having jurisdiction, as the same may
exist on the date of the commencement of the term of this Lease.
(d) The condition and state of repair of the Demised Premises as
the same may be on the date of the commencement of the term of this Lease.
(e) Any state of facts which an accurate survey of the Demised
Premises may show.
(f) All taxes, assessments, water charges and sewer rents,
accrued or unaccrued, fixed or not fixed (subject to the same being pro-
rated for the period prior to and after the commencement or expiration of
the demised term).
(g) Covenants, easements, restrictions, utility and other
agreements of record.
TO HAVE AND TO HOLD the Demised Premises for a term to commence
on _________, 1986 and to expire on _____________, unless this Lease shall
be sooner terminated as herein provided.
IT IS MUTUALLY COVENANTED AND AGREED by and between Landlord and
Tenant that this Indenture is made upon the foregoing and upon the
following agreements, terms, covenants and conditions:
ARTICLE 2
Rent
SECTION 2.01. The Tenant shall pay to the Landlord in lawful money of
the United States, without any offset or deductions whatsoever, a net
annual rental, in equal monthly installments, in advance on the first day
of each and every month as more particularly described in Exhibit "B"
annexed hereto.
SECTION 2.02. It is the purpose and intent of Landlord and Tenant
that the net rent shall be absolutely net to Landlord, so that this Lease
shall yield, net, to Landlord the net rent specified in Section 2.01
hereof, in each year during the term of this Lease and that all costs,
expenses and obligations of every kind and nature whatsoever relating to
the Demised premises and the appurtenances thereto and the use and
occupation thereof (except the taxes of Landlord referred to in Section
3.02 of Article 3 hereof) which may arise or become due during or out of
the term of this Lease shall be paid by Tenant, and that Landlord shall be
indemnified and saved harmless by Tenant from and against the same.
SECTION 2.03. The net rent shall be paid to Landlord without notice
or demand and without abatement, deduction or set-off, and Tenant shall
also pay without notice, except as may be required in this Lease, and
without abatement, deduction or set-off, as additional rent, all sums,
Impositions (as defined in Article 3 hereof), costs, expenses and other
payments which Tenant in any of the provisions of this Lease assumes or
agrees to pay, and, in the event of any non-payment thereof, Landlord shall
have (in addition to all other rights and remedies) all the rights and
remedies provided for herein or by law in the case of non-payment of the
net rent. In the event that the term of the Lease shall commence on a date
other than the first day of the calendar month, an appropriate adjustment
shall be made and thereafter rent shall be due and payable on the first day
of each and every month.
ARTICLE 3
Payment of Utilities, Taxes, Assessments, Etc.
SECTION 3.01. Tenant shall pay as additional rent all charges for
public utilities and all water and sewer rents, rates and charges furnished
or attributable to the demised premises.
SECTION 3.02. Tenant shall also pay as additional rent Tenant's
share, as hereinafter more particularly described in Exhibit C, of all
taxes, assessments, transit taxes, excises, levies, license and permit fees
and other governmental charges, general and special, ordinary and
extraordinary, unforeseen and foreseen, of any kind and nature whatsoever
which at any time prior to or during the term of this Lease may be
assessed, levied, confirmed, imposed upon, or grow or may be assessed,
levied, confirmed, imposed upon, or grow or become due and payable out of
or in respect, or become a lien on, the Demised Premises or any part
thereof or any appurtenance thereto, the rent and income received by Tenant
from subtenants, or for any use or occupation of the Demised Premises, and
such franchises as may be appurtenant to the use of the Demised Premises,
this transaction or any document to which Tenant is a party, creating or
transferring an interest or estate in the Demised Premises (all such taxes,
assessments, transit taxes, rates and charges, excises, levies, license
fees and other governmental charges being hereinafter referred to as
"impositions", and any of the same being hereinafter referred to as an
"Imposition"); provided, however, that any Imposition, relating to a fiscal
period of the taxing authority, a part of which is included within the term
of this Lease and a part of which is included in a period of time before or
after the expiration of the term of this Lease, shall (whether or not such
Imposition shall be assessed, levied, confirmed, imposed upon or in respect
of or become a lien upon the Demised Premises, or shall become payable,
during the term of this Lease) be adjusted between Landlord and Tenant as
of the commencement or expiration of the term of this Lease, so that Tenant
shall pay that portion of such Imposition which that part of such fiscal
period included in the period of the time after the commencement or before
the expiration of the term of this Lease bears to such fiscal period, and
Landlord shall pay the remainder thereof, provided, however, that Tenant
shall not be entitled to receive any apportionment after the expiration of
the term, if Tenant shall be in default in the performance of any of
Tenant's covenants, agreements and undertakings in this lease provided.
Tenant shall pay its share of any Imposition the amount thereof become
fixed and within ten (10) days after demand therefor by Landlord and shall
be collectable as additional rent. Tax bills shall be conclusive evidence
for the purpose of determining Tenant's share of Impositions and shall be
used for the calculation of the amounts to be paid by Tenant.
SECTION 3.03 Nothing herein contained shall require Tenant to pay
municipal, state or federal income taxes assessed against Landlord,
municipal, state or federal capital levy, estate, succession, inheritance
or transfer taxes of Landlord, or corporation franchise taxes imposed upon
any corporate owner of the fee of the Demised Premises; provided, however
that if at any time during the term of this Lease the methods of taxation
prevailing at the commencement of the term hereof shall be altered so as to
cause the whole or any part of the taxes, assessments, levies, impositions
or charges now levied, assessed or imposed on real estate and the
improvements thereon to be levied, assessed and imposed, wholly or
partially as a capital levy, or otherwise, on the rents received therefrom,
and shall be imposed upon Landlord, then all such taxes, assessments,
levies, impositions or charges, or the part thereof so imposed shall be
deemed to be included within the term "Impositions" for the purposes hereof
to the extent that such Imposition would be payable if the Demised Premises
were the only property of Landlord subject to such Impositions, and Tenant
shall pay and discharge the same as herein provided in respect of the
payment of Impositions.
SECTION 3.04. Tenant may in its own name or in the name of Landlord
or both, but at Tenant's sole cost and expense, contest or review the
amount of any Imposition with respect to the Demised Premises. The
Landlord shall keep Tenant advised of the amount of such Impositions, shall
fully cooperate with Tenant, shall execute all documents reasonably
necessary for such contest or review, produce all necessary cancelled
checks showing payment of any Impositions and shall, if necessary, furnish
Tenant with written authorization for such contest or review. Nothing
herein contained shall be deemed to modify Tenant's obligation to pay its
share of the Impositions. Tenant shall be beneficiary of its pro rata
share of any refund obtained through such contest or review. This
provision shall survive the expiration of this Lease.
ARTICLE 4
Mortgage Subordination
This Lease and the lien thereof upon the Demised Premises and all
right of the Tenant hereunder are and shall at all times be subject and
subordinate to all mortgages of consolidated mortgages on the premises at
the date of commencement of this Lease, or which may hereafter be placed
upon the premises, and to any renewals or extensions or consolidations
thereof. Landlord agrees to request, from each mortgagee to which this
Lease is subordinate, a non-disturbance agreement in the lender's standard
form to the effect that this Lease shall not be cancelled or disturbed if
the Demised Premises is foreclosed, as long as Tenant is not in default
under this Lease. Tenant agrees that if any mortgagee shall become the
owner of the leasehold premises by reason of the foreclosure of any
mortgage or the acceptance of a deed or assignment in lieu of foreclosure
or otherwise, and this Lease shall not have been terminated or affected
thereby and shall continue in full force and effect as a direct lease
between the mortgagee and Tenant upon all the terms, covenants and
conditions set forth in this Lease, then and in that event Tenant agrees to
attorn to mortgagee; provided, however, that such mortgagee shall not be
liable for any accrued obligations of Landlord for any act or omission of
Landlord prior to such foreclosure or sale or subject to any offsets or
counterclaims which shall have accrued to Tenant against Landlord prior to
the date such mortgagee shall become the owner of the premises.
ARTICLE 5
Vault Space
SECTION 5.01. Vaults and areas, if any, now or hereafter built
extending beyond the building line of Demised Premises are not included
within the Demised Premises, but Tenant may occupy and use the same during
the term of this Lease, subject to such laws, permits, rules and
regulations as may be imposed by appropriate governmental authorities with
respect thereto.
SECTION 5.02. No revocation on the part of any governmental
department or authority of any license or permit to maintain and use any
such vault shall in any way affect this Lease or the amount of the rent or
any other charge payable by Tenant hereunder. If any such license or
permit shall be revoked, Tenant will, at its sole cost and expense, do and
perform all such work as may be necessary to comply with any order revoking
the same.
ARTICLE 6
Surrender
SECTION 6.01. Tenant shall and will on the last day of the term
hereof or upon any earlier termination of this Lease, or upon any reentry
by landlord upon the Demised Premises pursuant to Article 23 hereof,
willfully and truly surrender and deliver up the Demised Premises,
including the personal property as herein defined, into the possession and
use of Landlord without fraud or delay, free and clear of all lettings and
occupancies other than subleases then terminable at the option of the
Landlord thereof or sublease to which Landlord shall have specifically
consented, and free and clear of all liens and encumbrances other than
those, if any, created by landlord or subsequent owners of the Demised
Premises.
SECTION 6.02. Where furnished by or at the expense of Tenant or any
subtenant, furniture, trade fixtures and business equipment (not
constituting part of the Demised Premises) may be removed by the Tenant at
or prior to the termination of this Lease or by such subtenant at or prior
to the termination of its sublease; provided, however, that the removal
thereof will not structurally injure the buildings or improvements on the
Demised Premises (the "Building") or necessitate fundamental changes in or
repairs to the Building. Tenant shall pay or cause to be paid to landlord
the cost of repairing any damage arising from such removal.
SECTION 6.03. Any personal property of Tenant or subtenant which
shall remain in the Building after the termination of this Lease and the
removal of Tenant or such subtenant from the Building, may, at the option
of Landlord be deemed to have been abandoned by Tenant or such subtenant
and either may be retained by landlord as its property or be disposed of,
without accountability, at Tenant's cost and expense, in such manner as
Landlord may see fit.
SECTION 6.04. Landlord shall not be responsible for any loss or
damage occurring to any property owned by Tenant or subtenant.
SECTION 6.05. The provisions of this Article 6 shall survive any
termination of this Lease.
ARTICLE 7
Insurance
SECTION 7.01. Tenant, at its sole cost and expense, shall keep any
building and improvements now or hereafter erected on the demised premises,
including the personal property, as herein defined, insured for the mutual
benefit of Landlord, Tenant, and mortgagee(s), such as their interests may
appear during the term of this Lease, against loss or damage by fire and
against loss or damage by other risks now or hereafter embraced by "All-
Risk Coverage", so called, in amounts sufficient to prevent Landlord or
Tenant from becoming a co-insurer under the terms of the applicable
policies, but in any event in an amount not less than the then "full
replacement cost" (exclusive of the cost of excavations, foundations and
footings, below the lowest basement floor). Such "full replacement cost"
shall be determined from time to time (but not more frequently than once in
any twenty-four calendar months) at the request of Landlord by an
appraiser, engineer, architect or contractor designated by Tenant and
approved in writing by Landlord (such approval not to be unreasonably
withheld) and paid by Tenant. No omission on the part of the Landlord to
request any such determination shall relieve Tenant of any of its
obligations under this article.
SECTION 7.02. Tenant, at its sole cost and expense, but for the
mutual benefit of Landlord and tenant, shall maintain:
(a) personal injury and property damage liability insurance
against claims for bodily injury, death or property damage, occurring on,
in or about the Demised Premises or the elevators or any escalators therein
and on, in or about the adjoining streets, property and passageways, such
insurance to afford minimum protection during the term of this Lease, of
not less than Ten Million Dollars in respect of bodily injury or death with
respect of any one accident, and of not less than Two Hundred Fifty
Thousand Dollars for property damage;
(b) if requested by Landlord, plate glass insurance and boiler
insurance;
(c) war risk insurance upon the Building as and when such
insurance is obtainable from the United States of America, or any agency or
instrumentality thereof, in an amount equal to the "full replacement cost"
thereof or in the maximum amount of insurance obtainable;
(d) rent insurance against loss of rent due to fire and the
risks now or hereafter embraced by "All-Risk Coverage", so called, for the
full annual rental value of the Demised Premises, and in the event that the
Existing Structures or the New Building or any building or improvements now
or hereafter erected on the Demised Premises, shall be destroyed or
seriously damaged, shall assign to Landlord so much of the proceeds of such
insurance as shall equal the net rent and additional rent for one year;
such amount to be held by Landlord and applied on account of the payment of
such net rental and additional rent hereunder until the restoration of the
same; but the Tenant shall not be released of his obligation hereunder;
(e) if the demised premises are located in a flood zone, then as
and when obtainable from the United States of America, or any agency or
instrumentality thereof, flood insurance in the maximum amount of insurance
obtainable; and
(f) such other insurance, and in such amount as may from time to
time be reasonably required by landlord against other insurable hazards
which at the time are commonly insured against in the case of premises
similarly situated, due regard being, or to be given, to the type of
building, its construction, use and occupancy.
SECTION 7.03. All insurance provided for in this Article shall be
effected under valid and enforceable policies issued by insurers of
recognized responsibility which are licensed to do business in the State of
New York, are rated "very good" or better by Best, and have been approved
in writing by Landlord, such approval not to be unreasonably withheld.
Upon the execution of this Lease, and thereafter not less than thirty (30)
days prior to the expiration dates of the expiring policies theretofore
furnished pursuant to this Article, originals of the policies (or, in the
case of a blanket insurance policy, certificates of the insurers
satisfactory to Landlord) bearing notations evidencing the payment of
premiums or accompanied by other evidence satisfactory to Landlord of such
payment, shall be delivered by Tenant to Landlord.
SECTION 7.04. All policies of insurance provided for in Section 7.01
and 7.02 hereof shall name Landlord and tenant as the insureds as their
respective interests may appear. Subject to the provisions of Article 17
hereof and to the limitations set forth below in this section, such
policies shall also be payable, if either Landlord or Tenant so require, to
any Fee Mortgagee, as the interest of any such mortgagee may appear,
pursuant to a standard mortgagee clause, subject to the prior rights, if
any, of any fee mortgagee the loss, if any under any policies provided for
in such Sections shall be adjusted with the insurance companies (a) by
Tenant in the case of any particular casualty resulting in damage or
destruction not exceeding Ten Thousand (?10,000) Dollars in the aggregate,
or (b) by Landlord, and Tenant in the case of any particular casualty
resulting in damage or destruction exceeding Ten Thousand ($10,000) Dollars
in the aggregate. The proceeds of any such insurance shall be payable,
subject to the prior rights, if any, of any fee mortgagee;
(i) To Tenant in the case of any particular casualty resulting
in damage or destruction not exceeding Ten Thousand ($10,000) Dollars in
the aggregate, or
(ii) To landlord, in the case of any particular casualty
resulting in damage or destruction exceeding Ten Thousand ($10,000) Dollars
in the aggregate, for the purposes set forth in Article 17 of this Lease.
All policies provided in Section 7.01, 7.02(b), 7.02(c) and
7.02(e) hereof, if the amount insured thereunder shall exceed Ten Thousand
($10,000) Dollars and all other such policies, regardless of the amount
insured thereunder, which insure against the same risks and in respect of
which the aggregate amount of the risk insured against shall exceed Ten
Thousand ($10,000) Dollars shall provide that the loss, if any, thereunder
shall be adjusted and paid as hereinabove provided, and that any loss which
shall be payable to Landlord shall be so payable (if such provision is
obtainable without additional premium) notwithstanding any act or omission
of Tenant.
SECTION 7.05. Each such policy or certificate therefor issued by the
insurer shall to the extent obtainable contain an agreement by the insured
that such policy shall not be cancelled or modified without at least ten
(10) days prior written notice to Landlord and to any mortgage to whom a
loss thereunder may be payable.
SECTION 7.06. If, at any time during the term of this Lease, landlord
shall request that the amount of liability insurance provided by Tenant, as
required by the provisions of Section 7.02, be increased on the ground that
such coverage is inadequate properly to protect the interest of Landlord,
and Tenant shall refuse to comply with such request, the dispute shall be
submitted to arbitration as provided in Article 29 hereof. Tenant shall
thereafter carry the amount of insurance determined by such arbitration to
be adequate, but in no event less than the amounts specified in Section
7.02.
ARTICLE 8
Landlord's Right to Perform Tenant's Covenants
SECTION 8.01. If Tenant shall at any time fail to pay any Imposition
in accordance with the provisions of Article 3, or to take out, pay for,
maintain or deliver any of the insurance policies provided for in Article 7
hereof, or shall fail to make any other payment or perform any other act on
its part to be made or performed, then Landlord, after the time provided in
Article 22 for Tenant to cure such default, after notice thereof from
Landlord, has expired (or without notice in case of an emergency) and
without waiving or releasing Tenant from any obligation of Tenant contained
in this Lease, may (but shall be under no obligation to).
(a) pay any Imposition payable by Tenant pursuant to the
provisions of Article 3 hereof, or
(b) take out, pay for and maintain any of the insurance policies
provided for in Article 7 hereof, or
(c) make any other payment or perform any other act on Tenant's
part to be made or performed as in this Lease provided and may enter upon
the Demised Premises for the purpose and take all such action thereon as
may be necessary therefor.
SECTION 8.02. All sums so paid by Landlord and all cost and expenses
incurred by Landlord in connection with the performance of any such act,
together with interest thereon at the rate of twelve percent (12%) per
annum from the respective dates of Landlord's making of each such payment
or incurring of each such cost and expense shall constitute additional rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord
on demand, and Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of
Tenant's failure to provide and keep in force insurance as aforesaid, to
the amount of the insurance premium or premiums not paid or incurred by
Tenant and which would have been payable upon such insurance, but Landlord
shall also be entitled to recover as damages for such breach, the uninsured
amount of any loss, to the extent of any deficiency in the insurance
required by the provisions of this Lease, damages, costs and expenses of a
suit suffered or incurred by reason of damage to, or destruction of, the
Demised Premises, occurring during any period when Tenant shall have failed
or neglected to provide insurance as aforesaid. However, any such damages
so recovered by the Landlord shall be subject to the provisions of Article
17 hereof.
ARTICLE 9
Repairs and Maintenance of the Property
SECTION 9.01. Throughout the term of this Lease, Tenant, at its sole
cost and expense, will take good care of the Demised Premises and the
Personal Property as herein defined and the sidewalks, curbs and vaults
adjoining the Demised Premises and will keep the same in good order and
condition, and make all necessary repairs thereto, interior and exterior,
structural and non-structural, ordinary and extraordinary and unforeseen
and foreseen. When used in this Article, the term "repairs" shall include
all necessary replacements, renewals, alterations, additions and
betterments. All repairs made by Tenant shall be equal in quality and
class to the original work. Tenant will do or cause others to do all
necessary shoring of foundations and wall of the building and every other
act or thing for the safety and preservation thereof which may be necessary
by reason of any excavation or other building operation upon any adjoining
property or street, alley or passageway.
SECTION 9.02. The necessity for and adequacy of repairs pursuant to
Section 9.01 hereof shall be measured by the standard which is appropriate
for buildings of similar construction and class, provided that Tenant shall
in any event make all repairs necessary to avoid any structural damage or
injury to the Demised Premises and to keep premises in a rentable
condition.
SECTION 9.03. Tenant shall put, keep and maintain all portions of the
Demises Premises and the sidewalks, curbs and passageways adjoining the
same in a clean and orderly condition, free of dirt, rubbish, snow, ice,
and unlawful obstructions.
SECTION 9.04. Landlord shall not be required to furnish any services
or facilities or to make any repairs or alterations in or to the Demised
Premises. Tenant hereby assumes the full and sole responsibility for the
condition, operation, repair, replacement, maintenance and management of
the Demised Premises.
SECTION 9.05. In case any dispute shall arise at any time between
Landlord and Tenant as to the standard of care and maintenance of the
Demised Premises, such dispute shall be determined by arbitration.
ARTICLE 10
Compliance With Laws Ordinances, etc.
SECTION 10.01. Throughout the term of this Lease, Tenant at its sole
cost and expense, will promptly comply with all present and future laws,
ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments, courts, departments, commissions, boards
and officers, and all orders, rules and regulations of the National Board
of Fire Underwriters or any other body exercising similar functions,
foreseen or unforeseen, ordinary as well as extraordinary, which may be
applicable to Demised Premises and the sidewalks, curbs and vaults
adjoining the Demises Premises or to the owners, tenant or occupants
thereof, whether or not such law, ordinance, order, rule, regulation or
requirement shall necessitate structural changes or improvements or
interfere with the use and enjoyment of the Demised Premises.
SECTION 10.02. Tenant shall likewise observe and comply with the
requirements of all policies of public liability, fire and all other
policies of insurance at any time in force with respect to the Demised
Premises.
SECTION 10.03. Tenant shall have the right, after prior written
notice to Landlord, to contest by appropriate legal proceedings diligently
conducted in good faith, in the name of Tenant or Landlord or both, without
cost or expense to Landlord, the validity or application of any law,
ordinance, order, rule, regulation or requirement of the nature referred to
in Section 10.01 hereof, subject to the following:
(a) If by the terms of any such law, ordinance, order, rule,
regulation or requirement, compliance therewith pending the prosecution of
any such proceeding may legally be delayed without the incurrence of any
lien, charge of liability of any kind against the Demised Premises or
Tenant's leasehouse interest therein and without subjecting Tenant or
Landlord to any liability, civil or criminal, for failure so to comply
therewith, Tenant may, subject to the consent of any mortgagee, if required
by the mortgage terms, delay compliance therewith until the final
determination of such proceeding.
(b) If any lien, charge or civil liability would be incurred by
reason of any such delay, Tenant nevertheless, on the prior written consent
of Landlord (such consent not to be unreasonably withheld), may contest as
aforesaid and delay as aforesaid, provided that such delay would not
subject Landlord criminal liability and Tenant (i) furnishes Landlord
security, reasonably satisfactory to Landlord against any loss or injury by
reason of such contest or delay, and (ii) prosecutes the contest with due
diligence, and (iii) obtains fee mortgagee's consent if required by the
mortgage terms.
Landlord will execute and deliver any appropriate papers which
may be necessary or proper to permit Tenant so to contest the validity or
application of any such law, ordinance, order, rule, regulation or
requirement.
ARTICLE 11
Changes and Alterations by Tenant
SECTION 11.01 Tenant shall have the right at any time and from time
to time during the term of this Lease to make, at its sole cost and
expense, changes and alterations in or of the Building, subject, however,
in all cases to the following:
(a) No one change or alteration involving an estimated cost of more
than $10,000 shall be undertaken except after 20 days' prior written notice
to Landlord.
(b) No one change or alteration, involving an estimated cost of more
than $10,000, including any restoration required by Article 17 or 18
hereof, shall be made without the prior written consent of Landlord, such
consent not to be withheld if the change or alteration would not in the
reasonable opinion of the Landlord impair the value or usefulness of the
Building or any part thereof.
(c) No one change or alteration shall be undertaken until Tenant
shall have procured and paid for, so far as the same may be required from
time to time, all permits and authorization of all municipal departments
and governmental subdivisions having jurisdiction. Landlord shall join in
the application for such permits or authorizations whenever such action is
necessary.
(d) Any one structural change or alteration involving an estimated
cost of more than $10,000 shall be conducted under the supervision of an
architect or engineer selected by Tenant and approved in writing by
Landlord (such approval not to be unreasonably withheld), and no such
structural change or alteration shall be made except in accordance with
detailed plans and specifications and cost estimates prepared and approved
in writing by such architect or engineer selected by tenant and approved in
writing by Landlord (such approval not to be unreasonably withheld).
(e) Any change or alteration shall, when completed, be of such a
character as not to reduce the value of the Demised Premises below its
value immediately before such change or alteration.
(f) Any change or alteration shall be made promptly (unavoidable
delays excepted) and in a good and workmanlike manner and in compliance
with all applicable permits and authorizations and building and zoning laws
and with all other laws, ordinances, orders, rules, regulations and
requirements of all federal, state, and municipal governments, departments,
commissions, boards and officers, and in accordance with the orders, rules
and regulations of the National Board of Fire Underwriters or any other
body hereafter exercising similar functions.
(g) The cost of any such change or alteration shall be paid in cash
or its equivalent, so that the Demised Premises shall at all times be free
of liens for labor and materials supplied or claimed to have been supplied
to the Demised Premises.
(h) Workmen's compensation insurance, covering all person employed in
connection with the work and with respect to whom death or bodily injury
claims could be asserted against Landlord, Tenant or the demised premises,
and general liability insurance for the mutual benefit of Tenant and
Landlord with limits of not less than Three Million Dollars in the event of
bodily injury to one person and not less than Three Million Dollars in the
event of bodily injury to any number of persons in any one accident, and
with limits of not less than Two Hundred Fifty Thousand Dollars for
property damage, shall be maintained by Tenant at Tenant's sole cost and
expense at all times when any work is in progress in connection with any
change or alteration. All such insurance shall be in a company or
companies of recognized responsibility, and all policies or certificates
therefor issued by the respective insurers, bearing notations evidencing
the payment of premiums or accompanied by other evidence satisfactory to
Landlord of such payment, shall be delivered to Landlord. Landlord, as a
condition to its consents, may require Tenant to carry general liability
insurance greater than the amounts heretofore provided.
(i) If the estimated cost of any such one change or alteration shall
be in excess of $10,000, Tenant shall, at the request of Landlord, and
before commencement of work, at Tenant's sole cost and expense, furnish to
Landlord a surety company performance bond, issued by a surety company
acceptable to Landlord, or other security reasonably satisfactory to
Landlord, in an amount at least equal to 110% of the estimated cost of such
change or alteration, guaranteeing the completion thereof within a
reasonable time, free and clear of all liens, encumbrances, financing
agreements, and other charges, and in accordance with the plans and
specifications approved by Landlord. No performance bond or other security
shall be required except to the extent that such estimated costs exceed the
amounts deposited pursuant to Sections 17.02, 17.04 and 18.04 of this
Lease, if such change or alteration is being made in accordance with the
provisions of Section 17 and 18.
(j) For the purpose of the Article 11 the term "one change or
alteration" shall mean such change(s) or alteration(s) which under good
construction practice would be regarded as a single change, notwithstanding
how and when performed.
(k) All changes and alterations made at any time by Tenant shall
immediately become the property of Landlord and shall remain upon and be
surrendered with the Demised Premises unless Landlord, by notice to Tenant
no later than twenty (20) days prior to the date fixed for the termination
of this Lease, elects to relinquish Landlord's right thereto and to have
them removed by Tenant, in which event the same shall be removed by Tenant
prior to the expiration of the term. Nothing herein contained shall be
construed to give Landlord title to or to prevent Tenant's removal of trade
fixtures, movable office furniture and equipment, but upon removal of any
such from the Demised Premises or upon removal of any changes or
alterations as may be required by Landlord, Tenant shall immediately, and
at its expense, repair and restore the Demised Premises to the condition
existing prior to any such change or alteration and repair any damages to
the Demised Premises due to such removal. All property permitted or
required to be removed by Tenant at the end of the term remaining in the
Demised Premises after Tenant's removal shall be deemed abandoned and may,
at the election of Landlord, either be retained as Landlord's property or
be removed form the Demised Premises by Landlord, at Tenant's expense.
ARTICLE 12
Discharge of Liens
SECTION 12.01. Tenant will not create or permit to be created or to
remain, and will discharge, any lien, encumbrance or charge (levied on
account of any imposition or any mechanic's, laborer's or materialman's
lien or any mortgage, conditional sale, title retention agreement or
chattel mortgage, or otherwise) which might be or become a lien,
encumbrance or charge upon the Demised Premises or the personal property
thereof, or any part thereof or the income therefrom, having any priority
or preference over or ranking on a parity with the estate, rights and
interest of Landlord in the Demised Premises or any part thereof or the
income therefrom, and Tenant will not suffer any other matter or thing
whereby the estate, rights and interest or the income therefrom, and Tenant
will not suffer any other matter or thing whereby the estate, rights and
interest of Landlord in the Demised Premises or any part thereof might be
impaired; provided that any Imposition may, after the same becomes a lien
on the Demised Premises, be paid or contested in accordance with Article 3
hereof and any mechanic's, laborer's or materialman's lien may be
discharged in accordance with Section 12.02 hereof.
SECTION 12.02. If any mechanic's, laborer's or materialman's lien
shall at any time be filed against the Demised Premises or any part
thereof, Tenant, within 20 days after notice of the filing thereof, will
cause the same to be discharged of record by payment, deposit, bond, order
of a court of competent jurisdiction, or otherwise. If Tenant shall fail
to cause such lien to be discharged within the period aforesaid, then, in
addition to any other right or remedy, Landlord may, but shall not be
obligated to, discharge the same either by paying the amount claimed to be
due or by procuring the discharge of such lien by deposit or by bonding
proceedings, and in any such event Landlord shall be entitled, if Landlord
so elects, to compel the prosecution of any action for the foreclosure of
such lien by the lienor and to pay the amount of the judgment in favor of
the lienor with interest, costs and allowances. Any amount so paid by
Landlord and all costs and expenses incurred by Landlord in connection
therewith, together with interest thereon at the rate of 12% per annum from
the respective dates of Landlord's making of the payment or incurring of
the cost and expense shall constitute additional rent payable by Tenant
under this Lease and shall be paid by Tenant to Landlord on demand.
SECTION 12.03. Nothing in this Lease contained shall be deemed or
construed in any way as constituting the consent or request of Landlord,
express or implied by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for the performance of any labor or
the furnishing of any materials for any specific improvement, alteration to
or repair of the Demised Premises or any part thereof, nor as giving Tenant
any right, power or authority for or permit the rendering of any services
of the furnishing of any materials that would give rise to the filing of
any lien against the Demised Premises or any part thereof.
ARTICLE 13
No Waste
SECTION 13.01 Tenant will not do, permit, or suffer any waste or
damage, disfigurement or injury of the Demised Premises or any part
thereof.
ARTICLE 14
Use of Property
SECTION 14.01. Tenant shall use the Demised Premises only as a
warehouse and for sales as an appurtenant thereto and for office purposes.
Tenant will not use or allow the Demised Premises or any part thereof to be
used or occupied for any unlawful purpose or in violation of any
certificate of occupancy or certificate of compliance covering or affecting
the use of the Demised Premises or any part thereof and will not suffer any
act to be done or any condition to exist on the Demised Premises or any
part thereof or any article to brought thereon, which may be dangerous,
unless safeguarded as required by law, or which may, in law, constitute a
nuisance, public or private, or which may make void or voidable any
insurance then in force with respect thereto.
SECTION 14.02. Tenant shall not suffer or permit the Demised Premises
or any portion thereof to be used by the public as such, without
restriction or in such manner as might reasonably tend to impair Landlord's
title to the Demised Premises or any portion thereof, or in such manner as
might reasonably make possible a claim or claims of adverse usage or
adverse possession by the public, as such, or of implied dedication of the
Demised Premises or any portion thereof.
ARTICLE 15
Entry on Property by Landlord, etc.
SECTION 15.01. Tenant will permit Landlord and its authorized
representatives to enter the Demised Premises at all reasonable times for
the purpose of (a) inspecting the same, and (b) making any necessary
repairs thereto and performing any work therein that may be necessary by
reason of Tenant's failure to make any such repairs or perform any such
work or to commence the same within the period provided in Article 23 after
written notice from Landlord. Nothing shall imply any duty upon the part
of Landlord to do any such work; and performance thereof by Landlord shall
not constitute a waiver of Tenant's default in failing to perform the same.
SECTION 15.02. Landlord may during the progress of any work in the
Demised Premises keep and store therein or elsewhere upon the Demised
Premises all necessary materials, tools, supplies and equipment. Such
right if exercised, shall not be deemed to constitute an eviction.
Landlord shall not be liable for inconvenience, annoyance, disturbance,
loss of business or other damage of Tenant or by any sub-tenant by reason
of making such work, or on account of bringing materials, tools, supplies
and equipment into or through the Demised Premises during the course
thereof and the obligations of Tenant under this Lease shall not be
affected thereby.
SECTION 15.03. Landlord shall have the right to enter the Demised
Premises at all reasonable times during usual business hours for the
purpose of showing the same to prospective purchasers thereof, and, at any
time within 15 months prior to the expiration of the term of this Lease for
the purpose of showing the same to prospective tenants.
ARTICLE 16
Indemnification of Landlord
SECTION 16.01. Tenant will indemnify and save harmless Landlord
against and from liabilities, obligations, damages, penalties, claims,
costs, charges and expenses, including reasonable architects' and attorneys
fees, which may be imposed upon or incurred by or asserted against Landlord
by reason of any of the following occurring during the term of this Lease;
(a) any matter, cause or thing arising out of use, occupancy,
control, or management of Demised Premises and any part thereof;
(b) any work or thing done in, or about the Demised Premises or any
part thereof;
(c) any use, non-use, possession, occupation, condition, operation,
maintenance or management of the Demised Premises or any part thereof or
any street, alley, sidewalk, curb, vault, passageway or space adjacent
thereto;
(d) any negligence on the part of Tenant or any of its agents,
contractors, servants, employees, licensees or invitees;
(e) any accident, injury or damage to any person or property
occurring in, or about the Demised Premises or any part thereof or any
street, alley, sidewalk, curb, vault, passageway or space adjacent thereto;
(f) any failure on the part of Tenant to perform or comply with any
of the covenants, agreements, terms or conditions contained in this Lease,
or any sub-lease, on its part to be performed or complied with; or
(g) any tax upon in the execution, delivery or recording of this
Lease.
In case any action or proceeding is brought against Landlord by reason
of any such claim, Tenant upon timely written notice from Landlord will at
Tenant's expense resit or defend such action or proceeding by counsel
approved by Landlord in writing, such approval not to be unreasonably
withheld and will pay any judgement or perform any decree resulting
therefrom. Landlord hereby agrees, without the necessity of further
consents, to be represented by counsel designated by the insurance company
which has issued insurance policies for the benefit of Landlord.
ARTICLE 17
Damage or Destruction
SECTION 17.01. In case of casualty to the Demised Premises resulting
in damage or destruction exceeding $10,000 in the aggregate, Tenant will
promptly give written notice thereof to Landlord. Tenant, regardless of
the amount of such damage, shall at its sole cost and expense, and whether
or not the insurance proceeds, if any, shall be sufficient for the purpose,
restore, repair, replace, rebuild or alter the same as nearly as possible
to its value, condition and character immediately prior to such damage or
destruction or with such changes or alterations as may be made at Tenant's
election in conformity with and subject to the conditions of Article 11
hereof. Such restoration, repairs, replacements, rebuilding or alterations
shall be commenced promptly and prosecuted with reasonable diligence,
unavoidable delays excepted.
SECTION 17.02. Subject to the provisions of Section 17.04 hereof all
insurance money paid to Landlord on account of such damage or destruction,
less the actual cost, and reasonable fees and expenses, if any, incurred in
connection with adjustment of the loss, shall be applied by Landlord to the
payment of the cost of the aforesaid restoration, repairs, replacement,
rebuilding or alterations, including the cost of temporary repairs or for
the protection of property pending the completion of permanent restoration,
repairs, replacements, rebuilding or alterations (all of which temporary
repairs, protection of property and permanent restoration, repairs,
replacement, rebuilding or alterations are hereinafter collectively
referred to as the "restoration"), and shall be paid out from time to time
as such restoration progress upon the written request of Tenant which shall
be accompanied by the following:
(1) A certificate signed by Tenant, dated not more than 15 days prior
to such request, setting forth the following:
(A) That the sum then requested either has been paid by
Tenant, or is justly due to contractors, subcontractors,
materialmen, engineers, architects or other persons who have
rendered services or furnished materials for the restoration
therein specified, and giving a brief description of such
services and materials and the several amounts so paid or due to
each of said persons in respect thereof, and stating that no part
of such expenditures has been or is being made the basis, in any
previous or then pending request, for the withdrawal of insurance
money or has been made out of the proceeds of insurance received
by Tenant, and that the sum then requested does not exceed the
value of the services and materials described in the certificate.
(B) That except for the amount, if any, stated (pursuant to
the foregoing subclause (1) (A)) in such certificate to be due
for services or materials, there is no outstanding indebtedness
known to the person signing such certificate, after due inquiry,
which is then due for labor, wages, materials, supplies or
services in connection with such restoration which, if unpaid,
might become the basis of a vendor's, mechanic's, laborer's or
materialmen's statutory or similar lien upon such restoration or
upon the Demised Premises or any part thereof or upon the
Tenant's leasehold interest therein.
(C) That the cost, as estimated by the persons signing such
certificate, of the restoration required to be done subsequent to
the date of such certificate in order to complete the same, does
not exceed the insurance money, plus any amount deposited by
Tenant to defray such cost and remaining in the hands of Landlord
after payment of the sum requested in such certificate.
(2) An opinion of counsel or other evidence, reasonably satisfactory
to Landlord, to the effect that there has not been filed with respect to
the Demised Premises or any part thereof or upon the Tenant's leasehold
interest therein any vendor's, mechanic's, laborer's materialman's or other
lien which has not been discharged or record, except such as will be
discharged by payment or the amount then requested.
In the event that such restoration involves expenditures in excess of
$10,000 the certificate required by clause (1) of this Section shall be a
certificate signed by the architect or engineer in charge of the
restoration, who shall be selected by Tenant and approved in writing by
Landlord, such approval not to be unreasonably withheld.
Upon compliance with the foregoing provisions of this Section,
Landlord shall, out of such insurance money, pay or cause to be paid to
Tenant or the persons named (pursuant to subclause (1)(A) of this Section)
in such certificate the respective amounts stated therein to have been paid
by Tenant or to be due to them, as the case may be, less 10% thereof.
If the insurance money at the time held by Landlord, less the actual
cost, fees and expenses, if any, incurred in connection with the adjustment
of the loss, shall be insufficient to pay the entire cost of such
restoration, Tenant will pay the deficiency.
Upon receipt by Landlord of satisfactory evidence, of the character
required by clauses (1) and (2) of this Section, that the restoration has
been completed and paid for in full and that there are no liens of the
character referred to therein, any balance of the insurance money at the
time held by the Landlord shall be paid to the Tenant.
If the amount of any insurance moneys payable for damage or
destruction to the premises under policies herein provided to be carried by
Tenant are claimed by a mortgagee of the fee instead of being received by
the Landlord or Tenant, then the Landlord agrees to make a like amount
available to Tenant for repair or restoration of the damage, and if
Landlord fails to do so then Tenant may deduct such amount, with interest
at an amount equal to one percent (1%) above the prime rate of Chemical
Bank, from ensuing rent, anything elsewhere notwithstanding.
SECTION 17.03. Except as otherwise expressly provided herein, no
destruction of or damage to the Demised Premises or any part thereof by
fire or any other casualty shall permit Tenant to surrender this Lease or
shall relieve Tenant from its liability to pay the full net rent and
additional rent and other charges payable under this Lease or from any of
its other obligations under this Lease, and Tenant waives any rights now or
hereafter conferred upon it by statute or otherwise to quit or surrender
this Lease or the Demised Premises or any part thereof, or to any
suspension, diminution, abatement or reduction of rent on account of any
such destruction or damage.
SECTION 17.04. In the event that any moneys, or the equivalent
thereof, in excess of $10,000 shall be required to be deposited with
Landlord pursuant to the provisions of this Article or of Article 7, 11 and
18 of this Lease, then at the election of Tenant all such amounts shall be
deposited for the benefit of Landlord and Tenant, and of any Mortgagee, as
their respective interests may appear, with a bank or trust company having
an office in The City of New York or the county in which the Demised
Premises are located and selected by Landlord, for the purposes set forth
in said Articles 7, 11, 17 and 18, to be disbursed in accordance therewith.
Tenant shall pay all charges and fees, including attorneys' fees, of the
bank or trust company that performs the functions provided for in Article
7, 11, 17, and 18.
SECTION 17.05. Notwithstanding anything to the contrary herein
contained, in the event a total damage or total destruction shall occur
during the last year of the lease term provided herein, Tenant shall not be
required to rebuild the premises, but shall have an option, exercisable
within thirty (30) days after said total damage or total destruction of
either terminating the Lease, in which case, all rents and charges shall be
adjusted, or in the alternative, rebuilding the premises as provided for in
this section. In the event Tenant fails to notify Landlord within said 30
day period, Tenant shall be deemed to waive its option to terminate this
Lease and shall be obligated to rebuild in accordance herewith.
ARTICLE 18
Condemnation
SECTION 18.01. (a) if at any time during the term of this Lease or
any renewal thereof, the whole or materially all of the Demised Premises
shall be taken for any public or quasi-public purpose of any lawful power
or authority by the exercise of the right of condemnation or eminent domain
or by agreement between Landlord, Tenant and those authorized to exercise
such right, this Lease, the term hereby granted, any rights of renewal
hereof and any renewal terms hereof, shall terminate and expire on the date
of such taking and the net rent, additional rent and other sum or sums of
money and other charges herein reserved and provided to be paid by the
Tenant shall be apportioned and paid to the date of such taking. As used
in this paragraph, the term "materially all of the Demised Premises" shall
be deemed to mean such portion of the Demised Premises, as when so taken,
would leave remaining a balance of the Demised Premises which, due either
to the area so taken or the location of the part so taken in relation to
the part not so taken, would not under economic conditions, zoning laws or
building regulations then existing or prevailing, readily accommodate a new
building or buildings of a nature similar to the building or buildings
existing upon the Demised Premises at the date of such taking and of floor
area sufficient, together with buildings not taken in the condemnation, to
permit the Demised Premises to reasonably be used by Tenant for its
intended purposes. If there be any dispute with same, it shall be
submitted to and determined by arbitration.
(b) In the event of the taking of the whole or materially all of the
Demised Premises, the award or awards shall belong to the Landlord.
(c) The term "taking" as used in this paragraph 18 and as used in
paragraph 19(a) is defined as the time when actual possession of the
premises in whole or in part is taken by any lawful power or authority.
(d) In the event of a condemnation as in this paragraph provided, the
Tenant waives all claim for any value for its leasehold or lease.
SECTION 18.02. (a) If during the term of this Lease, less than
materially all of the Demised Premises shall be taken by virtue of eminent
domain or be condemned for any public improvement, as above defined, this
Lease shall continue in full force and effect as to the part not so taken,
and an equitable abatement of net annual rent shall be made so that the net
annual rental payable by the Tenant shall be in the proportion which the
rental value of the area remaining after all repairs and restorations have
been made bears to the rental value of the Demised Premises prior to the
aforesaid taking, but said net annual rent shall not be reduced below the
amount necessary to carry the then existing mortgages to which this lease
is subordinate; and if an equitable abatement requires a greater reduction
Landlord may terminate the Lease by at least thirty (30) days notice to
Tenant mailed within sixty (60) days after the taking and in such case (i)
the amount of the equitable abatement shall be in force until such
termination and (ii) the awards shall be apportioned as provided in Section
18.01.
(b) If the buildings and improvements now or hereafter erected on the
Demised Premises shall be damaged or partially destroyed by any such taking
of less than the whole or materially all thereof, Tenant shall give prompt
notice thereof to Landlord and Tenant shall proceed with reasonable
diligence to conduct any necessary demolition and to repair and restore, at
Tenant's own cost and expense, any remaining part of said buildings and
improvements not so taken so as to constitute such remaining part or parts
thereof of a complete, rentable building in good condition and repair.
Landlord agrees to make available to Tenant that portion, if any, of the
condemnation award received by the Landlord to the extent required by
Tenant for repairs and restoration of the leased premises as reimbursement
to Tenant for costs and expenses actually incurred by Tenant in
effectuating such repairs and restorations provided, however, that in no
event shall Landlord be obligated to make available to Tenant any sum
exceeding the amount actually received by the Landlord less all necessary
and proper expenses paid or incurred by the Landlord in the condemnation
proceedings and as a result thereof. Before the commencement of work
necessary to repair and restore the building following a condemnation,
Tenant shall comply with the requirements set forth in Article 11 of this
Lease.
(c) In the event of a condemnation as in this paragraph provided,
where less than the whole or materially all of the Demised Premises shall
be so condemned, the entire award for such condemnation shall belong to and
be the property of the Landlord, without any claim on the part of the
Tenant with respect thereto except as hereinabove set forth and Tenant
waives all claim for any value for its leasehold except as hereinabove set
forth.
(d) If the Landlord and Tenant are unable to agree upon the amount of
the rental deduction under subparagraph (a) of this paragraph within thirty
(30) days after such taking, then the matter shall be submitted to
arbitration as provided in Article 27 hereof. Pending determination by
agreement of the parties or by arbitration, rent shall be paid
provisionally in the manner and at the rate provided in this Lease subject
to adjustment upon the completion of such determination.
SECTION 18.03. If the temporary use of the whole or any part of the
Demised Premises shall be taken at any time during the term of this Lease
or of any renewal hereof for any public or quasi-public purpose by any
lawful power or authority, by the exercise of the right of condemnation or
eminent domain, or by agreement between Tenant and those authorized to
exercise such right, Tenant shall give prompt notice thereof to Landlord
and the term of this Lease and of any renewal hereof shall not be reduced
or affected in any way and Lessee shall continue to pay in full the net
rent, additional rent and other sum or sums of money and charges reserved
and provided to be paid by Tenant, but Tenant shall be entitled to, and
shall, receive the entire award for such taking (whether paid by way of
damages, rent or otherwise) unless the period of occupation and use by the
sovereign shall extend beyond the termination of this Lease and of any
renewals hereof, in which case the award made for such taking shall be
apportioned between Landlord and Tenant as of the date of such termination.
In any proceedings for such taking or condemnation Landlord shall have the
right to intervene and participate in such proceeding; provided, however,
that if such intervention shall not be permissible or permitted by the
court, Tenant shall, at Tenant's expense, consult with Landlord, its
attorneys and experts and make all reasonable efforts to cooperate with
Landlord in the prosecution or defense of such proceedings. At the
termination of any such use or occupation of the Demised Premises by the
sovereign, Tenant will, at its sole cost and expense, repair and restore
the buildings and improvements then upon the Demised Premises to the
condition, as nearly as may be reasonably possible, in which the same were
at the time of such taking, but Tenant shall not be required to make such
repairs and restoration if the term of this Lease or of any renewal hereof
shall expire prior to, or within one year after, the date of termination of
the temporary use so taken, and in any such event Landlord shall be
entitled to claim, sue for and recover from the sovereign all damages and
awards therefor arising out of the failure of the sovereign so to repair
and restore the buildings and improvements at the expiration of such
temporary taking. Any recovery or sum received by Tenant as an award or
compensation for physical damage to the premises caused by and during the
temporary taking shall be deemed a trust fund held by the party who
receives the same for the purpose of repairing or restoring such damage.
ARTICLE 19
Covenants to Bind and Benefit Respective Parties
SECTION 19.01. All of the covenants and agreements herein contained
shall bind and inure to the benefit of Landlord, its legal representatives,
successors and assigns, and Tenant, its legal representatives, successors,
and assigns, except as otherwise provided herein.
ARTICLE 20
Condition of and Title to Property
SECTION 20.01. Tenant represents that the Demised Premises, the title
thereto, the sidewalks and structures adjoining the same, any sub-surface
conditions thereof, and the present occupancies, uses and non-uses thereof,
are accepted by Tenant, in the condition or state in which they or any of
them now are, without representation or warranty, express or implied in
fact or by law, by Landlord and without recourse to Landlord, as to the
title thereto, the nature, condition or useability thereof of the use or
uses to which the Demised Premises or any part thereof may be put.
ARTICLE 21
Assigning and Subletting; Mortgaging
SECTION 21.01. Except as hereinafter specifically provided, Tenant,
for itself, its successors and assigns, expressly covenants that it shall
not assign, mortgage or encumber this Lease, nor underlet, or suffer or
permit the Demised Premises or any part thereof to be used by others,
without the prior written consent of Landlord in each instance. If this
Lease be assigned, or if the Demised Premises or any part thereof be sublet
or occupied by anybody other than Tenant, Landlord may, after default by
Tenant, collect rent from the assignee, subtenant or occupant, and apply
the net amount collected to the rent herein reserved, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of
this covenant, or the acceptance of the assignee, subtenant or occupant,
and apply the net amount collected to the rent herein reserved, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of
this covenant, or the acceptance of the assignee, subtenant or occupant as
tenant, or a release of Tenant from further performance by Tenant of
covenants on the part of the Tenant herein contained. The consent of
Landlord to an assignment or subletting shall not in any wise be construed
to relieve Tenant from obtaining the express consent in writing of Owner to
any further assignment of subletting. Notwithstanding anything herein to
the contrary, Tenant shall have the right, without Landlord's consent to
assign this Lease or sublet the demised premises, in whole or in part, to a
wholly owned subsidiary.
ARTICLE 22
Conditional Limitations - Default Provisions
SECTION 22.01. If any one or more of the following events (hereinafter
sometimes called "Events of Default") shall occur:
(a) If Tenant shall desert or abandon the Demised Premises; or
(b) If this Lease or the estate of Tenant hereunder shall be
transferred, assigned sublet or mortgaged to any other person or party
without Landlord's prior consent, and Tenant shall fail to remedy or
correct the same within fifteen (15) days after notice by Landlord; or
(c) If default shall be made in the due and punctual payment of the
net rent or additional rent payable under this Lease or any part thereof
when and as the same shall become due and payable, and such default shall
continue for a ;period of ten (10) days after notice by Landlord; or
(d) If Tenant shall fail to deposit with the Landlord the real estate
taxes assessed or imposed against the Demises Premises as provided by the
provisions of Section 3.01 of Article 3, and any such default shall
continue for a period of ten (10) days after notice by Landlord; or
(e) If default shall be made by Tenant in the performance of or
compliance with any of the other covenants, agreements, terms or conditions
contained in this Lease, and such default shall continue for a period of
thirty (30 days' after written notice thereof from Landlord to Tenant,
provided, that if Tenant proceeds with due diligence during such thirty
(30) days' period to cure such default and is unable by reason of the
nature of the work involved, to cure the same within the said thirty (30)
days, its time to do so shall be extended for an additional period not to
exceed the time necessary to cure the same, provided, however, that such
extension of time shall not subject Landlord or Tenant to any liability,
civil or criminal, and the interest of Landlord in this Lease of Demised
Premises shall not be jeopardized by reason thereof; or
(f) If at any time during the term hereby demised, there shall be
filed by Tenant in any court pursuant to any statute, either of the United
States or any State, a petition in bankruptcy or insolvency, or for
reorganization, or for the appointment of a receiver or trustee of all or a
portion of Tenant's property, or if Tenant makes an assignment for the
benefit of creditors or petitions for or entering into an arrangement; or
(g) If at any time during the term hereby demised, there shall be
filed against Tenant in any court pursuant to any statute either of the
Untied States or of any State, a petition in bankruptcy or insolvency, or
for reorganization, or for appointment of a receiver or trustee of all or a
portion of Tenant's property, and if within sixty (60) days after the
commencement of any such proceedings against Tenant the same shall not have
been dismissed; then and in any such event, Landlord may serve a written
five (5) day notice of cancellation and termination of this Lease, and upon
the expiration of said five (5) days, this Lease and the term thereunder
shall end and expire as fully and completely as if the date of expiration
of such five (5) 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 to Landlord the Demised Premises and each and every
part thereof, but Tenant shall remain liable as hereinafter provided.
SECTION 22.02. Upon any such expiration or termination of this Lease,
Tenant shall quit and peacefully surrender the Demised Premises to
Landlord, and Landlord, upon or at any time after any such expiration or
termination, may without further notice, enter upon and re-enter the
Demised Premises and possess and repossess itself thereof, by force,
summary proceedings, ejectment or otherwise; and may dispossess Tenant and
remove Tenant and all other persons and property from the Demised Premises
and may have, hold and enjoy the Demised Premises and the right to receive
all rental income of and from the same.
SECTION 22.03. At any time or from time to time after any such
expiration or termination, Landlord may relet the Demised Premises or any
part thereof, in the name of Landlord or otherwise, for such term or terms
(which may be greater or less than the period which would otherwise have
constituted the balance of the term of this Lease) and on such conditions
(which may include concessions or free rent) as Landlord, in its
uncontrolled discretion, may determine and may collect and receive the rent
therefor. Landlord shall in no way be responsible or liable for any
failure to relet the Demised Premises or any part thereof, or for any
failure to collect any rent due upon any such reletting.
SECTION 22.04. No such expiration or termination of this Lease shall
relieve Tenant of its liability and obligations under this Lease, and such
liability and obligations shall survive any such expiration or termination.
In the event of any such expiration or termination, whether or not the
Demised Premises or any part thereof shall have been relet, Tenant shall
pay to the Landlord the net rent, additional rent and all other charges
required to be paid by Tenant up to the time of such expiration or
termination of this Lease, and thereafter Tenant, until the end of what
would have been the term of this Lease in the absence of such expiration or
termination, shall be liable to Landlord for, and shall pay to Landlord, as
and for liquidated and agreed current damages for Tenant's default.
(a) The equivalent of the amount of the net rent, additional rent and
the other rent charges which would be payable under this Lease by Tenant if
this Lease were still in effect, less
(b) the net proceeds of any reletting affected pursuant to the
provisions of Section 22.03 hereof, after deducting all Landlord's expenses
in connection with such reletting, including without limitation, all
repossession costs, brokerage commissions, legal expenses, reasonable
attorneys' fees, alteration costs, and expenses of preparation for such
reletting.
Tenant shall pay such current damages (herein called "deficiency") to
Landlord monthly on the days on which the net rent would have been payable
under this Lease if this Lease were still in effect, and Landlord shall be
entitled to recover from Tenant each monthly deficiency as the same shall
arise. At any time after such expiration or any monthly deficiencies as
aforesaid, Landlord shall be entitled to receive from Tenant, and Tenant
shall pay to Landlord, on demand, as and for liquidated and agreed final
damages for Tenant's default, an amount equal to the difference between the
net rent and all additional rent reserved hereunder for the unexpired
portion of the term demised and the then 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 the Demised Premises or any part thereof by re-
let by the Landlord 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 reserved upon such re-
letting shall be deemed prima facie 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 Landlord 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.
SECTION 22.05. Tenant hereby expressly waives, so far as permitted by
law, the service of any notice of intention to re-enter provided for in any
statute, or in the institution of legal proceedings to that end, and
Tenant, for and on behalf of itself and all persons claiming through or
under Tenant also waives any and all right of redemption or re-entry or re-
possession or to restore the operation of this Lease in case Tenant shall
be dispossessed by a judgment or by warrant or any court or judge or in
case of re-entry or re-possession by Landlord or in case of any expiration
or termination of this Lease, Landlord and Tenant, so far as permitted by
law, waive and will waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on
any matters whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy
of said premises, or any claim or injury or damage. The terms "enter",
"re-enter", "entry" or "re-entry", as used in this Lease are not restricted
to their technical meaning.
SECTION 22.06. No failure by either party to insist upon the strict
performance of any covenant, agreement, term or condition of this Lease or
to exercise any right or remedy consequent upon a breach thereof, and no
acceptance of full or partial rent during the continuance of any such
breach, shall constitute a waiver of any such breach or of such covenant,
agreement, term or condition. No covenant, agreement, term or condition of
this Lease to be performed or complied with by either party and no breach
thereof, shall be waived, altered or modified except by a written
instrument executed by the party charged with such waiver or modification.
No waiver of any breach shall affect or alter this Lease, but each and
every covenant, agreement, term and condition of this Lease shall continue
in full force and effect with respect to any other then existing or
subsequently breach thereof.
SECTION 22.07. In the event of any breach or threatened breach by
either party of any of the covenants, agreements, terms or conditions
contained in this Lease, the other party shall be entitled to enjoin such
breach or threatened breach and shall have the right to invoke any right
and remedy allowed at law or in equity or by statute or otherwise as though
the remedies specified in the Lease were not provided for therein.
SECTION 22.08. Each right and remedy of Landlord and Tenant provided
for in this lease shall be cumulative and shall be in addition to every
other right or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise
or beginning of the exercise by either party of any one or more of the
rights or remedies provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by such party of any or all other rights or
remedies provided for in this Lease or now or hereafter existing at law or
in equity or by statute or otherwise.
ARTICLE 23
Certificates by Landlord and Tenant
SECTION 23.01. Tenant agrees at any time and from time to time upon
not less than twenty (20) days' prior notice by landlord to execute,
acknowledge and deliver to Landlord a statement in writing and certifying
that this Lease is unmodified and in full force and effect (or if there
have been modifications, that the same is in full force and effect as
modified and stating the modifications), and the dates to which the net
rent and other charges have been paid in advance, if any, and stating
whether or not to the best knowledge of the signer of such certificate
Landlord is in default in performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such default
of which the signer may have knowledge, it being intended that any such
statement delivered pursuant to this Section may be relied upon by any
prospective purchaser of the fee or any mortgagee thereof or any assignee
of any mortgage upon the fee of the Demised Premises.
SECTION 23.02. Landlord agrees at any time and from time to time upon
not less than twenty (20) days' prior notice by Tenant to execute,
acknowledge and deliver to Tenant a statement in writing certifying that
this Lease is unmodified and in full force and effect (or if there shall
have been modifications, that the same is in full force and effect as
modified and stating the modifications), and the dates to which the net
rent and other charges have been paid in advance, if any, and stating
whether or not to the best knowledge of the signer of such certificate
Tenant is in default in performance of any covenant, agreement or condition
contained in this Lease and, if so, specifying each such default of which
the signer may have knowledge, it being intended that any such statement
delivered pursuant to this Section may be relied upon by any prospective
assignee of the Tenant's interest in this Lease or any mortgagee thereof or
any assignee of any mortgage upon the leasehold estate hereby created.
ARTICLE 24
Invalidity of Particular Provisions
SECTION 24.01 If any term or provision of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Lease shall be valid and be enforced to
the fullest extent permitted by law.
ARTICLE 25
Notices
SECTION 25.01. All notices, demands and requests required under this
Lease shall be in writing. All such notices, demands and requests shall be
deemed to have been properly given if served personally, or if sent by
United States certified or registered mail, postage prepaid. Notices to
Tenant shall be sent to:
Notices to Landlord shall be sent to:
or to such other persons and addresses as Landlord and Tenant may from time
to time designate by written notice addressed to one another.
SECTION 25.02. Notices, demands and requests which shall be served by
registered or certified mail upon Landlord, or Tenant, or any Leasehold
Mortgage in the manner aforesaid, shall be deemed sufficiently served or
given for all purposes hereunder at the time such notice, demand or request
shall be mailed by United States certified or registered mail as aforesaid
in any Post Office or Branch Post Office regularly maintained by the United
States Government in the State of New York.
ARTICLE 26
Quiet Enjoyment - Conveyance by Landlord
SECTION 26.01. Tenant, upon paying the net rent and all additional
rent and other charges herein provided for and observing and keeping all
covenants, agreements and conditions of this Lease on its part to be kept,
shall quietly have and enjoy the Demised Premises during the term of this
Lease without hindrance or molestation by anyone claiming by, or through
Landlord, subject, however, to the exceptions, reservations and conditions
of this Lease, and the fee mortgages to which this Lease shall be subject
and subordinate.
SECTION 26.02. In case Landlord hereto or any successor owner of the
Demised Premises shall convey or otherwise dispose of the Demised Premises
and turn over to the transferee any funds held by it hereunder in which the
Tenant has an interest hereunder, all liabilities and obligations on the
part of Landlord or successor owner as Landlord under this Lease accruing
after such conveyance or disposal shall terminate upon such conveyance or
disposal, and thereupon all such liabilities and obligations shall be
binding upon the new owner of the Demised Premises.
SECTION 26.03. If the Landlord, or any successor in interest, shall
be an individual, joint venture, tenancy in common, firm or partnership,
general or limited, it is specifically understood and agreed that there
shall be no personal liability on such individual, or the members of that
firm, partnership or joint venture, in respect to any of the covenants or
conditions of this Lease, except that such individuals shall not be
relieved of any obligation in this Lease for the application of deposits
made by the Tenant for the real estate taxes or insurance or other specific
payments to be made by landlord. Except as provided in the preceding
sentence, in the event of any breach of the Lease each party shall look for
the satisfaction of its remedies solely to the equity of the other party in
the Demised Premises or leasehold estate, as the case may be.
ARTICLE 27
Arbitration
SECTION 27.01. In any case in which it is expressly provided by the
terms of this Lease that any matter be settled or determined by
arbitration, then any such controversy, claim or dispute shall be settled
by arbitration held in the City of New York in accordance with the rules
then obtaining of the American Arbitration Association, and judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
ARTICLE 28
Waiver of Trial by Jury
SECTION 28.01. It is mutually agreed by and between Landlord 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 Landlord and Tenant,
Tenant's use and occupancy of the Demised Premises, and any emergency
statutory or other statutory remedy. It is further mutually agreed that in
the event Landlord commences any summary proceedings for possession of the
Premises hereto, it shall not interpose in any counterclaim of whatever
nature or description in any such proceeding.
ARTICLE 29
Tax Deposits
SECTION 29.01. The Tenant shall, at the election of the Landlord,
given at any time and/or from time to time, deposit with the Landlord on
the same date that monthly installments of rent are due and payable, a sum
equal to one-twelfth of Tenant's share of real estate, school, village, and
town taxes assessed or imposed against the Demised Premises by the
appropriate tax authorities having jurisdiction over the Demised Premises.
All such deposits shall be deposited in a separate special bank account
(hereinafter referred to as the "Tax Account"). It is agreed that if by
the terms of any fee mortgage to which this Lease is subordinate, the
Landlord is required to deposit with such mortgagee any real estate taxes,
then Landlord shall make such deposits with such mortgagee out of the
moneys deposited by the Tenant with such mortgagee out of the moneys
deposited by the Tenant with the Landlord for such purpose and upon payment
of such taxes by the Landlord herein to the said mortgagee, the Landlord
shall be relieved and released from the provisions hereof. At least ten
(10) days after the date when such taxes become due and payable, and
provided Landlord has received from the Tenant sufficient moneys to pay
such taxes, Landlord shall pay the same and shall promptly forward to the
Tenant receipted bill showing such payment. In the event that the amount
of such taxes assessed or imposed against the Demised Premises has not been
definitely ascertained at the time when any such deposit should be made,
Tenant shall make the deposit based upon the amount of such taxes as
assessed or imposed against the Demised Premises for the preceding year
subject to the adjustment as and when the amount of such taxes is
ascertained. If at the time when such taxes become due and payable Tenant
has deposited an insufficient amount to pay the same, Tenant shall
forthwith upon demand deposit any deficiency with the Landlord so that such
taxes may be paid without penalty. If Tenant shall have deposited more
than sufficient funds to pay the same, the excess shall forthwith be
refunded by Landlord to Tenant. In the event that Landlord shall fail to
pay any such taxes as provided herein and provided that the Landlord has
received from Tenant sufficient moneys for the purpose of paying the same,
Tenant may, at its option, pay the same and anything elsewhere herein
notwithstanding deduct the amount so paid, with interest thereon at the
rate of 12% per annum from the date of such payment from the next
installment of net rent payable under this Lease. Landlord shall give
Tenant notice of each payment of tax within ten (10) days after the due
date thereof, and failure to give such notice shall be deemed non-payment
for the purpose of permitting the Tenant to cure such default as provided
for in this Lease.
ARTICLE 30
Definition of Certain Terms, etc.
SECTION 30.01. For purposes of this Lease, unless the context
otherwise requires:
(a) The term "Demised Premises" shall mean the land as described
in Article 1 hereof, together with any buildings or improvements now or
hereafter erected thereon and any replacements thereof, including without
limitation all machinery, dynamos, equipment, motors, elevators, heating
and hot water boilers, heating and hot water systems, plumbing fixtures,
equipment and systems, gas, steam, water and electrical fittings, fixtures
and equipment, radiators, air conditioning units, ducts and equipment, all
lighting fixtures, and decoration and landscaping, said improvements herein
referred to as "personal property".
(b) The term "Fee Mortgage" shall mean a mortgage on the fee
title, or reversionary interest and estate of the Landlord in and to the
Demised Premises, placed pursuant to Article 4 hereof, and shall be deemed
to include a Trust Indenture under which such fee title or reversionary
interest and estate shall have been mortgaged. The term "Fee Mortgagee"
shall mean the mortgagee under any such mortgage and shall be deemed to
include the Trustee under any such Trust Indenture.
(c) The term "Landlord" as used in this Lease shall be deemed to
include the plural and means only the fee owner for the time being of the
land and building constituting the Demised Premises so that in the event of
any transfer or sale of the said Demised Premises, and the turning over by
the Landlord to its successor in interest of all funds held by it hereunder
in which Tenant has an interest, the said Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord
hereunder, and it shall be deemed and construed without further agreement
between the parties of their successors in interest that the transferee or
purchaser has assumed and agreed to carry out any and all of the covenants
and obligations of the Landlord hereunder.
(d) The term "Tenant" shall mean the person at the time in
possession of the Demised Premises pursuant to the terms of this Lease and
shall be deemed to include the plural.
(e) The term "subtenant" shall mean any tenant or licensee of
space in or on the Building (other than Tenant); the term "sublease" shall
mean any lease or other agreement for the use or occupancy of such space;
and the term "sub-rent" shall means any rent or other charge for such use
or occupancy.
(f) Any reference herein to the termination of this Lease shall
be deemed to include any termination hereof by expiration, or pursuant to
Article 17, 18 or 22 hereof, or otherwise.
(g) The term "unavoidable delays" shall mean delays due to
strikes, acts of God, the provisions of any Federal, State or Municipal
laws and regulations, or the decision or judgment of any court of competent
jurisdiction, inability to obtain labor or materials, governmental
restrictions, enemy action, weather, civil commotion, fire, unavoidable
casualty or similar causes beyond the control of Tenant.
(h) The term "person" shall mean and include an individual,
corporation, partnership, unincorporated organization or government or any
agency or political subdivision thereof.
SECTION 30.02. The captions of this Lease are for convenience and
reference only and in no way define, limit or describe the scope or intent
of this Lease nor in any way affect this Lease.
SECTION 30.03. The table of contents preceding this Lease under the
same cover is for the purpose of convenience and reference only and is not
to be deemed or construed in any way as part of this Lease, nor as
supplemental thereto or amendatory thereof.
SECTION 30.04. This Lease shall be construed and enforced in
accordance with the laws of the State of New York.
SECTION 30.05. Upon the execution and delivery hereof, this instrument
shall constitute the entire lease between the Landlord and Tenant for the
Demised Premises and any existing Lease shall be deemed modified, merged
and superseded by the terms of this agreement. This Lease cannot be
changed orally but only by an agreement in writing and signed by the party
against whom enforcement of any waiver, change, modification or discharge
is sought.
ARTICLE 31
Additional Demised Premises
SECTION 31.01. Landlord agrees to complete the construction of a
building on the property, described in Exhibit A-1, substantially in
accordance with plans to be agreed upon between the parties. The said
building shall contain approximately 16,000 square feet and is hereinafter
referred to as the "Additional Demised Premises". Upon notice from
landlord to Tenant the completion of the construction and the issuance of a
certificate of occupancy for the building (temporary or permanent) (the
"Completion Date"), to said building shall be deemed part of the Demised
Premises subject to all of the terms of this Lease, except that
(a) The net annual rental shall be increase as follows:
(i) the net annual rental from the Completion Date to the
end of the next twelve calendar months shall be an amount equal to the
actual footage in the Additional Demised Premises (calculated from the
outside of all perimeter walls) as determined by Landlord's architect,
multiplied by seven ($7) dollars.
(ii) the net annual rental during each succeeding twelve
month period and until the expiration of the fifth Lease year of the
originally demised premises shall be an amount equal to the net annual
rental payable during each preceding twelve month period multiplied by
three (3%) percent.
(iii) The net annual rental from the sixth Lease Year and
until the expiration of the term shall be determined in the same manner as
described in Exhibit B.
(b) Tenant shall notify Landlord within thirty (30) days after
the delivery of the additional premises of any incomplete or open items of
work ("punch list") and Landlord shall promptly complete such punch list
items in a manner as not to unreasonably interfere with the operation of
Tenant's business.
(c) Landlord shall assign to Tenant all guarantees of
workmanship and materials for the Additional Demised Premises. Tenant
shall look only to the guarantor for any damages Tenant may sustain by
reason of any defect in workmanship or materials. In no event shall
Landlord be liable to Tenant for any damages which Tenant for any damages
which Tenant may sustain by reason of any defect in the design, workmanship
or materials, installed in or furnished for the Additional Demised
Premises.
IN WITNESS WHEREOF the parties have executed this Lease.
By:
By:
<PAGE>
EXHIBIT A
DEMISED PREMISES
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Incorporated
Village of Valley Stream, Town of Hempstead, County of Nassau, State of New
York, bounded and described as follows:
BEGINNING at a corner formed by the intersection of the new southerly side
of Merrick Road, with the easterly side of Montgomery Street;
RUNNING THENCE south 66 degrees 49 minutes 13 seconds east along the new
southerly side of Merrick Road, 255.88 feet;
THENCE south 20 degrees 18 minutes 50 seconds west, 157.89 feet to land now
or formerly of Joseph and Louise Buscher;
THENCE along land now or formerly of Joseph and Louise Buscher, the
following two courses and distances:
1) North 71 degrees 01 minutes 09 seconds west, 81.09 feet;
2) North 66 degrees 38 minutes 50 seconds west, 121.78 feet;
THENCE south 20 degrees 02 minutes 50 seconds west, 10.60 feet;
THENCE north 62 degrees 06 minutes 10 seconds west, 80.90 feet to the
easterly side of Montgomery Street;
THENCE north 29 degrees 53 minutes 50 seconds east along the easterly side
of Montgomery Street, 168.41 feet to the corner at the point or place of
BEGINNING.
<PAGE>
EXHIBIT A-1
ADDITIONAL DEMISED PREMISES
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Incorporated
Village of Valley Stream, Town of Hempstead, County of Nassau, State of New
York, bounded and described as follows:
BEGINNING at a point on the new northerly line of Merrick Road, distant
198.18 feet easterly from the corner formed by the intersection of the said
northerly line of Merrick road and the easterly line of Montgomery Street,
said point of beginning being at the easterly side of land now or formerly
of John W. Gathard, and from said point of beginning;
RUNNING THENCE along said northerly side of Merrick Road south 68 degrees
33 minutes 40 seconds east, 251.68 feet to a point;
THENCE north 26 degrees 48 minutes east, 90.99 feet to a point;
THENCE north 67 degrees 54 minutes west, 250.67 feet to land now or
formerly of Gathard;
THENCE along said land south 27 degrees 15 minutes 28 seconds west, 93.96
feet to a point on the said northerly line of Merrick Road at the point or
place of BEGINNING.
<PAGE>
EXHIBIT B
NET ANNUAL RENTAL
I. The net annual rental for the term shall be as follows:
(1) For the period from the Commencement Date until December 31, 1987
at the rate of $206,800 per annum;
(2) For the period from January 1, 1988 to December 31, 1988 at the
rate of $213,000;
(3) For the period from January 1, 1989 to December 31, 1989 at the
rate of $219,395;
(4) For the period from January 1, 1990 to December 31, 1990 at the
rate of $225,975;
(5) For the period from January 1, 1991 to December 31, 1991 at the
rate of $232,750; and
(6) For the period from January 1, 1992 to December 31, 1992 (the
"sixth lease year") the net annual rent shall be the fair market
value (exclusive of any additional rent payable by Tenant) of the
Demised Premises determined as hereinafter provided as of a date
three months prior to the commencement of such sixth lease year.
Landlord shall notify Tenant in writing of Landlord's reasonable
estimate of the fair annual net market rental value of the
Demised Premises for the sixth lease year three months prior to
the commence thereof. Such estimate shall take into
consideration the size and nature of the Demised Premises as if
the same were operated in a high-class manner for its intended
purpose. Tenant shall have ten days from the date of Landlord's
notice in which to accept the same. If Tenant shall fail to
accept Landlord's estimation of the annual fair market rental
value for the sixth lease year and the parties have not agreed
upon the same within ten days after Landlord's notice then such
annual market rental value shall be determined by appraisal as
follows: within ten days thereafter Landlord and Tenant shall
each designate the arbitrator and shall notify the other party of
such designation. The two arbitrators so chosen shall meet
within ten days of their appointment and if within twenty days
from their appointment the two arbitrators shall not agree upon a
determination in accordance with the provisions of this paragraph
they shall together appoint a third arbitrator. If the two
arbitrators cannot agree upon the appointment of a third
arbitrator within ten days after such twenty-day period then
either party, on behalf of both and on notice to the other, may
request such appointment by the American Arbitration Association
(or any successor organization) shall fail to appoint the third
arbitrator within ten days after such twenty-day period then
either party, on behalf of both and on notice to the other, may
request such appointment by the American Arbitration Association
(or any successor organization) in accordance with its then
prevailing rules. If the American Arbitration Association (or
any successor organization) shall fail to appoint the third
arbitrator within ten days after such request is made then either
party may apply on notice to the other to the Supreme Court in
the county in which the Demised Premises are located for the
appointment of such third arbitrator.
Each arbitrator selected as herein provided shall have at least
five years experience in the leasing or management of similarly
situated properties.
Each party shall pay the fees and expenses of the arbitrator
selected by it. The fees and expenses of the third arbitrator
and all other expenses (including attorneys' fees, witness fees
and similar expenses of the parties shall be borne separately by
each of the parties) of the arbitrator shall be borne equally by
the parties.
The majority of the arbitrators shall determine the fair annual
net market rent value for the sixth year of the lease term.
In no event shall the net annual rental for the sixth lease year
be less than the net annual rental for the immediately preceding
calendar year.
(7) For each of the four next succeeding calendar years the net
annual rental payable in the immediately preceding lease year by
an amount equal to the net annual rental payable during each of
the immediately preceding calendar year multiplied by three (3%)
percent.
The rent with respect to the additional Demised Premises is more
particularly set forth in Article 31 hereof.
<PAGE>
This lease amendatory agreement (the "Lease Amendment"), made this
_____ day of July, 1996, between and among JNR REALTY COMPANY, a New York
partnership, having an office in care of David W. Bernstein, 14 Aliso Road,
Carmel Valley, CA 93924-9442 (hereinafter referred to as "Landlord"),
STROBER LONG ISLAND BUILDING SUPPLY CENTERS, INC. (hereinafter referred to
as "Tenant"), and THE STROBER ORGANIZATION, INC. (hereinafter referred to
as "Guarantor").
WHEREAS:
A. Landlord and Tenant entered into a lease dated November 7, 1986
(the "Lease"), which by its terms is to expire on December 31, 1996;
B. Guarantor entered into a guarantee of the Lease dated December
1986 (the "Guaranty");
C. The parties hereto desire to extend the terms of the Lease and the
Guaranty for a further period of ten (10 years until December 31, 2006 (the
"Extended Termination Date"), pursuant to the terms, conditions and
provisions as hereinafter set forth;
NOW, THEREFORE, THE PARTIES HERETO MUTUALLY AGREE AS FOLLOWS:
1. All the terms, provisions and conditions of the Lease shall
continue without modification or amendment for ten (10) years until the
extended Termination Date (hereinafter, the "Extended Term"), except as may
hereinafter be provided.
2. Exhibit B to the Lease is hereby deleted in its entirety and the
following substituted in its place and stead:
"EXHIBIT B
"NET ANNUAL RENT
"The net annual rental for the Demised Premises and the Additional
Demised Premises for the period from January 1, 1997 (hereinafter, the
"Extended Commencement Date"), to and until December 31, 2006 (hereinafter
the "Extended Termination Date") shall be as follows:
"(1). The rent for the initial period of five (5) years from the
Extended Commencement Date to and until December 31, 2001, shall be at the
rate of Four Hundred and Three Thousand Eight Hundred and Fifty and 76/100
($403,850.76) Dollars per annum, payable monthly on the first day of the
month in advance at the rate of Thirty Three Thousand Six Hundred Fifty
Four and 23/100 ($33,654.23) Dollars (hereinafter, the "Basic Rent");
"(2). As of January 1, 2002 (hereinafter, the "First Calculation
Date"), the Basic Rent shall be increased by the increase in the Consumer
Price Index (hereinafter, the "CPI") as presently published by the United
States Department of Labor. In making the determination of said increase,
the CPI as of the Extended Commencement Date will be compared to the CPI as
of the First Calculation Date, and the increase in such index, from and
between the said two dates, expressed both as a fraction of and as a
percentage rate increase of the CPI as of the Extended Commencement Date,
shall be applied to the Basic Rent, to determine the increase in the Basic
Rent for the year from January 1, 2002 to December 31, 2002. In no event
shall the Basic Rent ever be reduced.
"For example, if the CPI as of January 1, 1997, is 1000 and the CPI as
of the First Calculation Date is 1104, then the increase in the CPI between
the two dates is 104, the fraction is 104/1000 and the percentage of
increase is 10.4%, and, as so expressed, said increase shall result in an
increase in the Basic Rent for the year of 2002 to Four Hundred Forty Five
Thousand Eight Hundred Fifty One and 24/100 ($445,851.24) Dollars, payable
monthly on the first day of the month in advance at the rate of Thirty
Seven Thousand One Hundred Fifty Four and 27/100 ($37,154.27) Dollars.
(3). As of January 1, 2003, and as of each anniversary thereof during
the Extended Term (hereinafter, each, a "Subsequent Calculation Date," and
all such calculation dates and the First Calculation Date, collectively
being "Calculation Dates"), the Basic Rent paid in the prior calendar year
(for January 1, 2003, the rent paid in 2003 shall be used, for January 1,
2004, the rent paid in 2003 shall be used, etc.) shall be increased by the
increase in the CPI from the preceding Calculation Date to the Subsequent
Calculation Date for the year. In making the determination of said
increase, the CPI as of the year-earlier Calculation Date will be compared
to the CPI as of the following Subsequent Calculation Date, and the
increase in such index, from and between the said two dates, expressed both
as a fraction of and as a percentage rate increase of the CPI as of the
Calculation Date for the preceding calendar year, shall be applied to the
Basic Rent paid for the preceding calendar year, to determine the increase
in the Basic Rent for the year from January 1, 2003 to December 31, 2003.
In no event shall the Basic Rent, once increased, ever be reduced.
"For example: If the CPI as of January 1, 2002, is 1,104 and the CPI
as of January 1, 2003, is 1126, then the increase in the CPI between the
two dates is 22, the fraction is 22/1000 and the percentage of increase is
2%, and, as so expressed, said increase shall result in an increase from
the above Basic Rent to the Basic Rent for the year of 2003 to Four Hundred
Fifty Four Thousand Seven Hundred Sixty Eight and 26/100 ($454,768.26)
Dollars, payable monthly on the first day of the month in advance at the
rate of Thirty Seven Thousand Eight Hundred Ninety Seven and 36/100
($37,897.36) Dollars."
3. Exhibit C to the Lease is hereby deleted in its entirety and the
following substituted in its place and stead.
"EXHIBIT C
"IMPOSITIONS
"Landlord shall only the required to pay in each calendar year up to
the sum of One Hundred Thousand ($100,000) Dollars of all Impositions
imposed on the Demised Premises and the Additional Demised Premises.
Accordingly, Tenant's share of Impositions for each calendar year during
the Extended Term of the Lease shall be the entire amount of all
Impositions imposed on the Demised Premises and the Additional Demised
Premises in excess of said limit."
4. Article 31 of the Lease is hereby deleted in its entirety.
5. Guarantor, by executing this Lease Amendment, confirms that the
Guaranty is amended by this provision and renewed in all respects as herein
provided. The Guaranty shall continue to be effective until the Extended
Termination Date to guarantee, absolutely and unconditionally, to Fleet
Bank (formerly the National Westminster Bank) and to Landlord, their
successors and assigns, full and prompt payment and performance of any and
all obligations and liabilities o Tenant under the Lease, as renewed,
including, without limitations, payment of all rental thereunder, together
with all attorneys' fees, costs and expenses of collections incurred by
said creditors in connection with the enforcement of this Guaranty.
6. Except as so modified and amended, the Lease and the Guaranty are
hereby confirmed in all respects.
IN WITNESS WHEREOF, the parties hereto have executed this Lease
Amendment.
JNR REALTY COMPANY
By: Strober Enterprises Company
By: _____________________________
Sue Strober, Partner
STROBER LONG ISLAND BUILDING SUPPLY
CENTERS, INC.
By: _____________________________
President
THE STROBER ORGANIZATION, INC.
By: _____________________________
President
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STROBER ORGANIZATION, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> QTR-2
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,000
<SECURITIES> 0
<RECEIVABLES> 22,425
<ALLOWANCES> 2,876
<INVENTORY> 12,548
<CURRENT-ASSETS> 37,523
<PP&E> 13,259
<DEPRECIATION> 8,980
<TOTAL-ASSETS> 49,175
<CURRENT-LIABILITIES> 12,769
<BONDS> 0
<COMMON> 52
0
0
<OTHER-SE> 34,517
<TOTAL-LIABILITY-AND-EQUITY> 49,175
<SALES> 59,108
<TOTAL-REVENUES> 59,108
<CGS> 43,086
<TOTAL-COSTS> 43,086
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 358
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 1,743
<INCOME-TAX> 732
<INCOME-CONTINUING> 1,011
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,011
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
