SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
(mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File No. 0-16355
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PRINCETON MEDIA GROUP, INC.
(Exact name of small business issuer as specified in its Charter)
Ontario, Canada 98-0082860
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
214 Brazilian Avenue, Suite 300, Palm Beach, Florida 33480
(Address of principal executive offices)
561/659-0121
(Issuer's telephone number)
-----------------------------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The number of shares outstanding of the issuer's common stock no par value,
as of August 14, 1997 was 2,369,633.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
PRINCETON MEDIA GROUP, INC.
FORM 10-QSB
For the Quarterly Period Ended June 30, 1997
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet June 30, 1997
Consolidated Statements of Operations
and Accumulated Deficit
For the Six Months Ended June 30, 1997 and 1996
and for the three months ended June 30, 1997 and 1996
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1997 and 1996
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
PRINCETON MEDIA GROUP, INC.
Consolidated Balance Sheet
(Unaudited)
June 30, 1997
Assets
Current assets
Cash $ 391,399
Accounts receivable, net 1,870,803
Inventories 891,794
Deferred income tax benefit 271,300
Prepaid expenses 376,616
Total current assets 3,801,912
Property and equipment, net 1,757,475
Other assets 39,844
Trademarks, copyrights and other intangibles, net 12,711,576
Total assets $ 18,310,807
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 1,119,412
Accrued expenses 590,824
Current portion of long-term debt 752,047
Line of credit 428,333
Deferred revenue 1,145,397
Accrued interest 362,822
Total current liabilities 4,398,835
Long-term debt, less current portion 8,308,822
Deferred taxes 166,900
Shareholders' equity:
Series A Preference shares 28,923
Series C Preference shares 739,696
Series E Preference shares 898,861
Common stock 16,897,938
Accumulated deficit (13,129,168)
Total shareholders' equity 5,436,250
Total liabilities and shareholders equity $ 18,310,807
See accompanying notes to consolidated financial statements.
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Operations and Accumulated Deficit
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Distribution, circulation, and
other income $ 1,945,739 $1,172,574 $ 4,589,768 $ 1,173,007
Advertising income 418,615 643,109 1,407,043 643,109
Printing income 181,593 211,642 579,838 211,641
Net revenues 2,545,947 2,027,325 6,576,649 2,027,757
Cost of sales 2,380,851 1,037,523 4,903,232 1,039,069
Gross profit 165,096 989,802 1,673,417 988,688
Operating expenses 1,319,419 964,305 2,687,929 1,008,234
Income (loss) from operations (1,154,323) 25,497 (1,014,512) ( 19,546)
Interest and other income 9,347 860 9,347 13,580
Interest and other expense (240,375) (139,308) (472,888) (158,217)
Net loss (1,385,351) (112,951) (1,478,053) (164,183)
Accumulated deficit, beginning of period (11,743,817) (6,010,749) (11,368,215) (5,959,517)
Preferred stock dividend (Note 10) - - ( 282,900) -
Accumulated deficit, end of period ($13,129,168) ($6,123,700) ($13,129,168) ($6,123,700)
Net loss per share ($0.65) ($.40) ($1.16) ($.60)
Weighted average number of
shares outstanding 2,199,167 344,631 1,584,941 284,938
See accompanying notes to consolidated financial statements.
</TABLE>
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
Six months ended June 30,
<S> <C> <C>
1997 1996
Cash flows from operating activities:
Net loss $(1,478,053) $( 164,183)
Adjustments to reconcile net loss
to net cash used in
operating activities
Depreciation 150,194 220,770
Amortization 183,136
Gain on forgiveness of debt - ( 866)
Stock issued as payment for acquisition
and related services 903,344 67,734
Net income (loss) adjusted for noncash items ( 241,379) 123,455
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 664,865 (744,570)
Increase in inventories (235,769) (159,082)
Increase in prepaid expenses and deposits (230,705) ( 29,945)
Increase in other assets (355,073) ( 9,861)
Increase in debt issue costs - (387,711)
Increase in accounts payable 331,303 45,956
Increase (decrease) in accrued expenses (952,160) 163,398
Decrease in due to related party ( 6,975) ( 37,497)
Increase in deferred revenue 375,530 96,677
Increase in accrued interest 201,827 131,986
Net cash used in operating
activities ( 448,536) (807,194)
Cash flows from investing activities:
Capital expenditures (78,133) (1,049,640)
Net cash used in
investing activities (78,133) (1,049,640)
Cash flows from financing activities:
Proceeds from issuance of common stock 150,000 3,156,800
Payment of short-term note (1,000,000)
Redemption of Series E preferred (274,298) -
Proceeds from note payable 620,000 -
Payments of principal (207,797) -
Net cash provided by
financing activities 287,905 2,156,800
Net increase (decrease) in cash (238,764) 299,966
Cash, December 31, 1996 and 1995 630,163 13,859
Cash, June 30, 1997 and 1996 $ 391,399 $ 313,825
Supplemental disclosures of cash flow information:
1997 1996
Interest paid $ 257,914 $ 25,386
Noncash Investing and Financing Activities:
Common stock issued for consulting and acquisition fees $ 862,111 -
Employee stock option plan $ 16,233 -
Common stock issued for franchise rights $ 25,000 -
Common stock issued upon conversion of
convertible debt $ 3,213,817 $ 128,165
Common stock issued for settlement of debt $ - $ 162,925
Contribution from shareholder through
forgiveness of debt $ - $ 146,447
Inventory transferred in settlement of debt $ - $ 289,451
</TABLE>
During the first quarter of 1997, the Company purchased the trademark of a
magazine valued at $400,000 in exchange for a credit of $300,000 in advertising
in the Company's publications and $100,000 to be paid over a one year period.
The Company purchased printing equipment valued at $77,000 for a note. The
Company also issued stock valued at $25,000 as final payment for franchise
rights on environmentally safe ink.
In 1996 the Company purchased equipment appraised at $1,814,000 and trademarks
and copyrights valued at $5,186,000 for $1,000,000 in cash, a 90-day note of
$1,000,000 and a long-term note of $5,000,000. The Company also purchased
trademarks and copyrights valued at $107,390 for $32,390 in cash and an
installment loan payable of $75,000.
See accompanying notes to consolidated financial statements.
PRINCETON MEDIA GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Presentation
The accompanying unaudited interim financial statements consolidate the accounts
of Princeton Media Group, Inc. ("Princeton" or the "Company") and its wholly
owned subsidiaries. All significant intercompany transactions and balances have
been eliminated in consolidation. In the opinion of management, the
accompanying unaudited interim consolidated financial statements contain all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the financial position as of June 30, 1997, and the results of their
operations and their cash flows for the quarters ended June 30, 1997 and 1996
and for the six month periods ended June 30, 1997 and 1996. The results of
operations for the quarter ended June 30, 1997 and for the six months ended
June 30, 1997 are not necessarily indicative of the results to be expected for
the full year. These statements should be read in conjunction with the
Company's annual report on Form 10-KSB as amended for the year ended
December 31, 1996.
2. Net Loss Per Share
Net loss per share is computed using the weighted average number of shares of
common stock outstanding. Common equivalent shares from stock options and
warrants, and additional shares assuming the conversion of debentures and
preferred shares, are excluded from the computation as their effect is
antidilutive.
Cumulative dividends of $22,000 ($11,000 per quarter related to preferred Series
C), $51,503 related to Series E and a preferred stock dividend of $282,900 (see
Note 10) on preferred shares have been added to net loss in the loss per share
computation.
3. Accounts Receivable
Accounts receivable at June 30, 1997 consisted of the following:
Accounts receivable, gross $5,399,759
Less:
Allowance for returns and miscellaneous charges 3,493,956
Allowance for doubtful accounts 35,000
Total accounts receivable, net $1,870,803
4. Inventories
Inventories at June 30, 1997 consisted of the following:
Paper $ 706,035
Ink 12,180
Work in process 173,579
Total inventories $ 891,794
5. Property and equipment
Property and equipment as of June 30, 1997 consisted of the following assets,
all depreciated between 5 and 7 years:
Printing equipment $1,925,542
Computer equipment 118,822
Office furniture and equipment 66,795
2,111,159
Less accumulated depreciation (353,684)
Total property and equipment, net $1,757,475
6. Trademarks, copyrights and other intangibles
Trademarks, copyrights and other intangibles at June 30, 1997 consisted of
the following:
Trademarks and copyrights $12,643,592
Acquisition Costs 364,559
Organizational costs 34,387
Franchise rights 35,000
13,077,538
Less accumulated amortization (365,962)
Trademarks, copyrights, and
other intangibles, net $12,711,576
7. Line of Credit
The Company has a line of credit with a distributor for working capital of up
to $500,000 which may be drawn down in multiples of $10,000. Any draw will
bear interest at prime plus 2% and will be payable with equal monthly payments
of principal and interest over a one year period. At June 30, 1997 $428,333 was
payable on the line of credit.
8. Assignment of Accounts Receivable
During 1996, the Company had assigned $639,000 of certain accounts receivable
as collateral for its obligation to a paper vendor. Per the agreement, the
Company paid $200,000 to the vendor. Payments of assigned receivables began in
January 1997 and final payment will be in August 1997. The balance due
reflected in accrued expenses as of June 30, 1997 was $95,044.
9. Long-term Debt
Long-term debt at June 30, 1997 consisted of the following:
Note payable - First Seller $5,000,000
Note payable - Second Seller 4,000,000
Note payable - Equipment and capital leases 60,869
9,060,869
Less current portion 752,047
Total long-term debt $8,308,822
10. Convertible Securities
In March 1997, the Company reached an agreement (the "Agreement") with the
holders of all of its outstanding convertible debentures and convertible
preferred Series D and certain of its convertible preferred Series E
stockholders to convert their holdings to common stock. Under the Agreement, the
debentures and preferred Series D and E stock (collectively the "Securities"),
were converted into approximately 1.1 million shares of the Company's common
stock over the ensuing five months. Had the conversion occurred pursuant to the
original conversion terms of the Securities, the Securities holders would have
received approximately 885,000 shares of common stock.
Under the Agreement, the Securities holders agreed that if they chose to
sell their common stock holdings, then sales would be made during specified
periods during 1997. Further, if at the end of the selling period the cash
proceeds and market value of any unsold shares of common stock do not equal
approximately $4,422,800, the Company will either issue additional shares of
common stock or cash to make up any short fall.
In April the Company issued 1,105,700 shares into escrow per the Agreement. The
Company will charge earnings (as debt conversion expense), or will charge
deficit, for any additional differences between the carrying amount of the
debentures or preferred shares and the cash paid or additional shares issued
when the transactions are completed in the third quarter of 1997.
Certain of the preferred securities holders were granted warrants at exercise
prices ranging from $4.85 to $8.85 to purchase 102,510 shares of the Company's
common stock. The estimated value of these warrants of $282,900 was accounted
for as a dividend to these shareholders.
11. Changes in Preferred and Common Shares
Changes in preferred shares Series D and E for the six months ended June 30,
1997, were as follows:
Preferred Stock Series D and Series E:
Series D Series E
Shares Amount Shares Amount
Balance at January 1, 1997 1,200 $1,005,000 1,634 $1,549,484
Conversion to common shares (1,200) ( 1,005,000) ( 300) ( 251,250)
Redemption of Series E ( 400) ( 399,373)
Balance at June 30, 1997 - - 934 $ 898,861
Change in common shares for the six months ended June 30, 1997 was as follows:
Shares Amount
Balance at December 31, 1996 865,969 $12,197,802
Issuance of shares for consulting fees,
acquisition fees, and severance 353,639 1,162,186
Issuance of shares for franchise rights 5,000 25,000
Issuance under Employee Stock Option Plan 6,825 16,233
Redemption of convertible preferred stock
and conversion of debentures 1,105,700 3,213,817
Dividend - warrants - 282,900
Balance at June 30, 1997 2,337,133 $16,897,938
Item 2. Management's Discussion and Analysis
Forward-looking Statements
CAUTION: Statements contained in this Form 10-QSB regarding the Company's
future prospects or operating results constitute forward-looking statements and
as such, must be considered with caution and with the understanding that various
factors could cause actual results to differ materially from those in such
forward-looking statements. Such factors include but are not limited to
changes in revenues from distribution, advertising and subscriptions; changes in
costs of materials and operations; and failure of pending or anticipated
acquisitions to be consummated.
General
The Company, through its wholly-owned subsidiaries, Princeton Publishing, Inc.,
and Firestone Publishing, Inc., is engaged in the publishing, printing, and
distribution of approximately 25 periodical consumer lifestyle magazines. The
Princeton and Firestone editorial staffs and offices are located in New York
City and Miami, respectively. A wholly-owned subsidiary of Princeton, Kingston
Press, Inc., leases and maintains a printing plant in Sussex, Wisconsin. The
plant is used for the printing of the Company's magazines and to perform
printing work for third parties on a contract basis. The Company's executive
offices are located in Palm Beach, Florida.
The six month period ended June 30, 1997 compared to the six month period ended
June 30, 1996:
The Company discontinued operations of its prior business as of December 31,
1995. Operations for the Company's new business of publishing and printing
began in the second quarter of 1996.
Revenues for the six month period ended June 30, 1997 amounted to $6,576,649
compared to operating revenue of $2,027,757 for the same period in 1996.
Revenues are almost entirely derived from magazine sales, subscriptions,
advertising, and outside printing.
Costs of sales for the six month period ended June 30, 1997 were $4,903,232
compared with $1,039,069 for the six month period ended June 30, 1996.
Operating expenses for the six month period ended June 30, 1997 were $2,687,929
compared with $1,008,234 for the six month period ended June 30, 1996. Operating
expenses include approximately $192,000 of non-cash expense for issuance of
common shares of stock for consulting services in connection with the
settlement of the Company's convertible securities. Management
anticipates that this will be a nonrecurring expense.
The increase in revenues, cost of goods sold, and operating expenses is
attributed to the acquisition of Princeton Publishing on March 29, 1996 which
was included in the statement of operations for only one quarter in 1996 and two
full quarters in 1997, and the revenues and cost of goods sold of Firestone
Publishing acquired on September 6, 1996 which was included only in the 1997
operations.
During the six month period ended June 30, 1997, $472,887 in interest expense
was charged to operations compared to $158,217 in interest expense for the six
month period ended June 30, 1996. The interest expense was accrued pursuant to
two promissory notes executed by Princeton and Firestone in connection with the
purchases of the magazine publishing assets.
Monthly interest payments of approximately $43,000 are due pursuant to a $5
million promissory note executed upon acquisition of the publishing assets
acquired March 29, 1996. Interest on the $4 million promissory note executed
upon acquisition of the publishing assets acquired on September 6, 1996 will
be accrued for one year, at which time accrued interest will be added to
principal and payments of principal and interest will be due on a
straight-line amortization schedule over forty-eight months. Accordingly, the
Company will not incur any debt service obligations on the $4 million note
prior to October, 1997. The Company anticipates that cash flows from operations
will be sufficient to pay all debt service obligations of the two subsidiaries.
Net loss for the six month period ended June 30, 1997 was $1,478,053 which
represents an increase of $1,313,870 from the net loss of $164,183 for the six
month period ended June 30, 1996.
Liquidity and Capital Resources
Liquidity and capital resources are hereinafter discussed in three broad
categories: operating activities, investing activities and financing
activities.
Cash decreased $238,764 to $391,399 at June 30, 1997 from $630,163 at
December 31, 1996. Net cash used in operating activities was $448,536 during
the six month period ended June 30, 1997 compared to cash used by operating
activities of $808,833 during the six month period ended June 30, 1996. The
decrease of $360,297 is primarily attributable to the establishment of
continuing operations in connection with the change in business of the Company
from telecommunications equipment sales to magazine publishing and printing.
During the six month period ended June 30,1997, net cash used in investing
activities was $78,133 primarily for computer and printing equipment
representing a decrease of $971,507 from net cash used in investing activities
of $1,049,640 for initial investment in printing equipment and trademarks and
copyrights during the six month period ended June 30,1996.
During the six month period ended June 30,1997, net cash provided by financing
activities was $287,905 representing a decrease of $1,868,895 from net cash
provided by financing activities of $2,156,800 during the six month period ended
June 30,1996. The funds provided in the first six months of 1996 were primarily
from proceeds from issuance of common stock for the purpose of acquiring
publishing acquisitions. The funds provided in the first six months of 1997
were primarily a draw on the line of credit for working capital.
The Company intends to continue the operations of the businesses acquired during
1996 and to expand these operations into new areas of distribution, including
international editions and the establishment of Internet web sites for
several of its well-known magazine titles. The expansion of distribution
channels for the Company's brand-name magazine titles, combined with the
Company's continuing program of cost reduction through consolidation of its
operations, is anticipated to substantially increase the net revenues from
the Company's operations. Among the Company's plans for cost savings is to
complete the transition to printing all Princeton publications in-house. The
Company has upgraded and expanded its printing plant to accomodate the printing
of all Company publications as well as third party printing contracts. As of
the third quarter of 1997, all Princeton titles will be printed in-house at
an annual savings of approximately $466,000.
Management of the Company believes that the results of 1996 and the first six
months of 1997 operations were consistent with the expectations established
during the due diligence investigation completed prior to the purchases of the
two businesses with the exception of advertising revenue as detailed below.
Management further anticipates that the implementation of its business plan
during 1997, which includes, among other things, production efficiencies,
cost-saving measures, new market exploration, expansion of the printing plant,
and acquisition of additional businesses, will realize a substantial growth in
assets as well as increases in revenues and profits.
In the second quarter of 1997 the Company experienced a decline in advertising
revenue due to the effects of financial difficulties of several of the Company's
advertisers. Subsequent to June 30, 1997, the Company executed an agreement
with a major advertiser that will increase advertising revenues by $1 million
during the twelve to eighteen months beginning on or before September 15, 1997.
The Company is pursuing additional long-term advertising contracts and expects
improved advertising revenue levels in the remainder of 1997.
As detailed in Note 10 of the financial statements, in March 1997, the Company
reached agreement with the holders of its convertible preferred stock and
debentures to convert into approximately 1.1 million shares of the Company's
common stock over a five-month period. The agreement provided that if the
holders chose to sell their shares, such sales would be made in a scheduled
manner during 1997. The Company has agreed to make up any shortfall to the
holders if sale proceeds and the market value of any unsold shares do not equal
approximately $4,422,800.
Several acquisitions and significant transactions were either completed or in
the process of negotiation as of the date of this report as follows:
The Company has executed a trademark license agreement with Spice Direct, Inc.,
a subsidiary of Spice Entertainment, Inc. (Nasdaq: SPZE), for use of its "Spice"
trademark. The agreement grants PMG an exclusive nontransferable right and
license to use the "Spice" trademark throughout the United States in conjunction
with both a printed and electronic (Internet) published magazine. The magazine
will include entertainment content and a monthly guide to programming carried on
Spice cable television and satellite channels which are available in 23 million
U.S. households and which are carried by more than 500 cable systems. The
agreement includes provision for cross promotion between the publishing and
programming partners.
The Company has executed a letter of intent for the acquisition of the assets
and operations of a business that will produce and service an Internet website
hub for all of the Company's publications. The Internet operations will be
acquired through a wholly-owned subsidiary of the Company and will be combined
with its existing profitable web site operations. Beginning in August, 1997,
the Company plans to introduce four new web sites per month and to have
available on dedicated and interlinked web sites, the text, graphics,
advertisers, products and services of most of its approximately 25 publications,
which will comprise one of the largest commonly-owned groups of well-known,
name brand leisure and special interest titles connected to the Internet.
Revenues from the web sites are anticipated to be derived from monthly
memberships, subscriptions, advertising pages, banners, product sales, and sale
of services from the Company's dedicated electronic mall. Interconnectivity
among the various sites is expected to add incrementally to total revenues.
On March 17, 1997, the Company purchased the trademark of a magazine in exchange
for $300,000 of advertising space valued at standard rates in the Company's
publications together with $100,000 to be paid from advertising revenues
received in excess of $10,000 per issue of the acquired magazine with the
balance due, if any, to be paid upon publication of the August, 1998 issue.
The Company is in active negotiation for the acquisition of a group of magazine
titles that would add significant revenue to the Company. Due diligence work is
in process and is being performed by an outside consulting group which
specializes exclusively in magazine acquisitions. The Company is also in the
process of negotiating financing for the above acquisitions, which if
consummated, would more than triple the Company's existing $18.3 million in
assets.
In conjunction with the acquisition process, Princeton has executed an agreement
with an investment banking firm which has expressed a commitment to the Company
to arrange up to $40 million in financing for such acquisitions, including
financial restructure of the Company. On behalf of other clients, the
California-based investment banking firm has participated in capital
transactions of more than $3 billion over the past seven years. The firm will
advise Princeton regarding due diligence matters, valuation, and negotiation of
purchase agreements. It is expected that financing will be accomplished
principally through an offering of corporate debt.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit Exhibit
Number
10.1 Service Agreement with Clark Distribution Systems, Inc. dated May 23,
1997.
10.2 Properties Purchase Agreement with Paradise Magazine, Inc. dated
March 17, 1997.
10.3 Letter Agreement with Kable Distribution Services dated April 10,
1997.
10.4 Lease with 12 West 27th Street Associates dated January 23, 1997.
10.5 Guaranty in favor of 12 West 27th Street Associates dated January
23, 1997.
27.1 Financial Data Schedule
(b) Reports on Form 8-K and Form 10-KSB/A.
During the quarter, the Company filed a Form 10-KSB/A for the year ended
December 31, 1996 restating the financial statements to reflect the effect of a
prior period adjustment presented in the Form 10-Q for the quarter ended March
31, 1997.
The following reports on Form 8-K were filed during the quarter ended June 30,
1997 by the Company:
On April 11, 1997 the Company filed Form 8-K detailing issuance of 500 shares of
common stock under Regulation S. No financial statements were included.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 19, 1997
PRINCETON MEDIA GROUP, INC.
/s/ James J. McNamara
By: James J. McNamara,
Chairman of the Board and
Acting Chief Executive Officer
Exhibit 10.1
CLARK DISTRIBUTION SYSTEMS, INC.
A MEMBER OF THE CLARK GROUP, INC.
121 New York Avenue
PO Box 438
Trenton, New Jersey 08603
Telephone: (609) 396-1100
FAX: (609) 396-2709
SERVICE AGREEMENT
SERVICE AGREEMENT between Clark Distribution Systems, Inc. (CDS), located at
121 New York Avenue, Trenton, NJ 08638 and Princeton Publishing (PRINCETON),
located at 12 West 27th Street, New York, NY 10001, dated this 23rd day of
May, 1997.
1. PRINCETON appoints CDS to provide the physical distribution of the
newsstand copies of all publications it publishes consigned to ID wholesalers
and international freight forwarders as listed in the 1997 issue of "Magazine
& Bookseller."
The rate for distribution is $7.40 per 100 lbs. which is applicable ex CDS'
dock to ID wholesalers. It is predicated on a national distribution pattern
with allotments to 200+ U.S. and Canada wholesalers. A change in pattern may
cause a change in the distribution rate. Shipments to other than ID
wholesalers in the continental U.S., weighing less than 300 lbs., will be
rated at 48¢ per pound. Except for any fuel surcharges which may be
imposed, these rates will remain in effect for one and one-half years,
providing the average weekly tonnage remains at 130,000 lbs. The average
tonnage will be measured quarterly. If the average weekly tonnage drops below
this threshold for two consecutive quarters, the rate for subsequent shipments
will revert to the attached scale.
2. PRINCETON agrees to unitize copies into bundles of a standard quantity,
preparing the appropriate amount of full and odd quantity packages to fulfill
the individual wholesaler allotments. PRINCETON will separate fulls and odds
into four sorts, one for each CDS terminal (located in Matteson, Nashville,
Abingdon and Scranton). Bundles will be placed on pallets and stretch
wrapped. Pallets will be marked to show title, issue, edition, total bundles
and copies on the pallet.
Bundles will be marked to show edition. The edition code must be coordinated
with and be the same as that used by the national distributor on their galley.
3. CDS agrees to transport at its expense all trailers containing a
minimum of 38,000 lbs. that move directly to its terminals beyond Matteson,
IL.
4. PRINCETON agrees to prepay all transportation charges. Existing
assignments shall remain in effect. For titles distributed by Curtis, CDS
shall invoice PRINCETON and be paid directly by Curtis per the assignment.
5. PRINCETON agrees that CDS shall be responsible for forty percent (40%)
of wholesale invoice value for any shipment for which it cannot prove
delivery. Consignees are required to report delivery exceptions to CDS or its
agent within 24 hours from delivery by fax. CDS will provide an 800 fax
number to facilitate this requirement. CDS will provide the consignee with a
reference number to substantiate that a fax was received. Claims must include
a copy of the signed delivery receipt and the reference number. Otherwise,
they will be denied.
The term of this Agreement shall be for a period of one and one half (1-1/2)
years commencing June 1, 1997 through January 1, 1999.
PRINCETON PUBLISHING CLARK DISTRIBUTION SYSTEMS, INC.
By: /s/ Henry McQueeney By: /s/
Title: President Title: Vice President
Date: 6/12/97 Date: June 12, 1997
PRINCETON RATE SCALE
Weekly average of 130,000 lbs. $7.50 per 100 lbs.
Under 100,000 lbs. $ 9.00
100,000 - 110,000 8.50
110,000 - 120,000 8.00
120,000 - 130,000 7.80
130,000 - 140,000 7.40
140,000 - 150,000 7.30
150,000 - 160,000 7.25
160,000 - 200,000 7.20
Over 200,000 lbs. 7.00
Exhibit 10.2
PROPERTIES PURCHASE AGREEMENT
AGREEMENT, made this 17th of March, 1997, by and between Paradise
Magazine, Inc. ("Seller"), a New York corporation with offices at 350 Fifth
Avenue, New York, New York 10118, and Princeton Publishing, Inc., a Delaware
Corporation with offices at 12 West 27th Street, New York, New York 10010
("Purchaser").
WHEREAS, Seller is the owner of, and has adopted and used in his
business, the trade name "Leg Scene," which has continuously been used by
Seller in connection with the publication of a periodical (the "Tradename"),
and for which the Seller has accumulated and retained certain associated
materials comprised of subscriptions, subscription lists, advertising lists,
back issues, promotional, advertising and publicity materials, display racks,
works in progress, bi-pad numbers, mechanicals, art work, film, slides (as
described in the annexed schedule), photographs, separations, editorial
materials, circulation records, LTPC code numbers, releases, and all other
books, records, correspondence and memoranda concerning the Tradename and/or
publications bearing the Tradename, whether Seller had first or second rights
to the materials (the "Associated Materials") (the Tradename, any and all
logos associated therewith, and the Associated Materials hereinafter
collectively referred to as the "Properties"); and
WHEREAS, Seller is desirous of selling to Purchaser any and all of
Seller's rights in and to and respecting the Properties, and Purchaser is
desirous of purchasing such rights, upon the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties agree as follows:
1. Termination of Prior Agreements. Any and all prior agreements,
if any, between Purchaser and Seller regarding the Properties are hereby
canceled as of the date hereof and neither party to this agreement shall have
any further obligation to the other pursuant to any such agreement. This
Agreement shall exclusively govern the rights and obligations of the parties
with respect to the Properties.
2. Sale of Properties.
2.1. Sale of Properties. Seller warrants and represents that it
has continuously used the Tradename, and has copyrighted any and all materials
containing the same, for the entire period of time that the same has been used
in commerce in the United States of America. Seller further warrants and
represents that there are no presently pending legal actions or proceedings
concerning the Properties, nor has Seller received any notification that any
such action or proceeding is threatened or imminent. Seller hereby sells,
conveys and transfers to Purchaser any and all of Seller's rights, title,
interest and benefits in and to the Properties upon the terms and conditions
hereinafter set forth. Purchaser hereby purchases any and all of Seller's
rights and benefits in and to the Properties upon the terms and conditions
hereinafter set forth. Simultaneously with the execution of this Agreement,
Seller shall execute and deliver to Purchaser a written Tradename Assignment
of all of Purchaser's right, title and interest in and to the Tradename.
Additionally, Seller shall execute and deliver to Purchaser a written
Assignment of all of Seller's right, title and interest in and to the
Associated Materials and deliver the Associated Materials to Purchaser.
Seller agrees to execute any and all other documents that may reasonably be
requested by Purchaser as necessary and proper in order to effectuate this
Agreement and/or obtain and maintain Tradename registrations for the
Tradename.
3. Covenant Not to Compete. Seller agrees that, for a period of
three (3) years after the date of execution of this Agreement, it will not,
(i) whether as an owner, shareholder, partner, employee or agent of, or
consultant to, any person or company, furnish services relating to the
publication of any adult magazine focusing on the female's lower extremities.
Seller's obligations under this paragraph shall extend to all areas of the
United States and to each foreign nation in which Purchaser is offering any
product bearing the Tradename for sale, either directly or indirectly through
Purchaser, distributors or otherwise. Seller acknowledges that this provision
is a reasonable one in both duration and geographic scope for purposes of
protecting Purchaser's goodwill and its investment pursuant to this Agreement,
and forms an instrumental basis for Purchaser's consent to enter into this
Agreement. Seller represents that its own knowledge and abilities are
sufficient to permit it, during this period of restriction, to earn a
livelihood satisfactory to it without violating this provision.
4. Payment of Purchase Price. As consideration for the conveyance of
the Properties (i) Purchaser shall make available to Seller for a period of
three (3) years from the date of this Agreement, at standard Agency Rates (as
set forth on the annexed schedule), advertising pages in Seller's magazines
(as identified on the annexed schedule, which Purchaser represents are
Magazines owned or licensed by it) in the aggregate amount of $300,000.00
(comprised of at least two pages in Leg Scene magazine and in each of the
magazines identified on the annexed Schedule, provided, however that Purchaser
may exclude such advertisements in two issues of each of the identified
magazine during any calendar year), and (ii) advertising revenues received by
Purchaser as a result of the publication of Leg Scene magazine by Purchaser in
excess of $10,000 for each issue published (such amounts to be received upon
publication), to an aggregate of $100,000.00. In the event that Seller has
not received the entirety of the sum of $100,000.00 on or before one year from
the date of this Agreement, Purchaser shall pay to Seller the difference
between $100,000.00 and such sums as were actually received by Seller pursuant
hereto, upon the publication of the August 1998 issue.
5. Indemnities.
(a) Any and all liabilities of Seller (including, but not limited to,
any past due Retail Display Allowances or National Distributor payables) shall
remain exclusively the obligation of Seller, and Purchaser assumes no
liability whatsoever for any debts of Seller. The first issue of Leg Scene
magazine to be published by Purchaser shall be the September, 1997 issue. Any
revenues attributable to the publication of any issue of Leg Scene magazine
prior to the September, 1997 issue shall be the property of, and paid to,
Seller. Any revenues attributable to the publication of any issue of Leg
Scene magazine subsequent to the May, 1997 issue shall be the property of, and
paid to, Purchaser. Seller agrees to indemnify and hold Purchaser harmless
against any judgment, costs, damages and/or attorneys' fees incurred in
connection with any claim, action or proceeding contesting the validity,
legality or ownership of the Properties, or any part thereof, or based upon
the prior publication of any periodical by Seller bearing the Tradename. In
the event that Purchaser is named as a party to any action stemming from any
such claim, Seller shall be responsible for defending the interests of
Purchaser at Seller's sole cost and expense. In the event that Seller is
named as a party to any action stemming from any such claim, Seller shall be
responsible for defending its interests at Seller's sole cost and expense.
Each party shall give the other prompt notice of any claim or suit covered by
the provisions of this paragraph. Seller shall have the option to settle, or
to undertake and conduct the defense of, any suit so brought; except that
Seller shall not, without Purchaser's consent, enter into any settlement
agreement which prohibits or impairs the use of the Properties by Seller or
Purchaser. Each party shall cooperate with the other in the defense of any
such suit.
(b) Purchaser agrees to indemnify, defend and hold Seller harmless
against any claims or suits of third parties arising out of Purchaser's acts
of publication subsequent to the date of this Agreement. Each party shall
give the other prompt notice of any such claim or suit. In the event that
Seller is named as a party to any action stemming from any such use of the
Properties by Purchaser, Purchaser shall defend such action in the name of
Seller, shall provide counsel mutually agreeable to Seller with respect
thereto, and shall indemnify Seller against any judgment, costs, damages
and/or attorneys' fees, obtained against Seller in connection therewith.
Purchaser shall have the option to settle or to undertake and conduct the
defense of any suit so brought. Each party shall cooperate with the other in
the defense of any such suit.
6. Governing Law and Arbitration. This Agreement shall be governed
by the law of the State of New York, USA. Any controversy arising from, or
related to, this Agreement shall be determined by arbitration in the City of
New York, State of New York, USA, in accordance with the rules of the American
Arbitration Association, and judgment upon any such determination or award may
be entered in any court having jurisdiction.
7. Notices. All notices and reports required or permitted by the
terms of this Agreement shall be in writing and shall be sent to Purchaser at
the address first above noted with a copy to The Law Firm of Michael Levine,
130 William Street, New York, New York 10038, Attention: Michael L. Levine,
and to Seller at the address first above noted with a copy to Braff & Michael,
17 John Street, New York, New York 10038, or to such different or additional
parties and addresses as either party may hereafter designate as the address to
which such notices or reports are to be sent. Notices required by the terms
of this Agreement shall be sent by overnight carrier or personal delivery,
with copies being sent by overnight carrier or facsimile transmission, and
shall be effective one (1) day after sending.
8. Resale of Properties. Purchaser shall have the right to resell or
discontinue the Properties; provided, however, that (i) in the event of any
such resale or discontinuance Purchaser shall remain liable for all
obligations assumed by Purchaser Hereunder and (ii) in the event of a resale,
such resale takes place by way of a simultaneous written agreement obligating
any transferee to adhere to the terms of this Agreement (although specific
reference to this Agreement, or its terms, need not be made in such resale
agreement).
9. Security Interest. Seller shall maintain a security interest in
the Properties until all funds due, and owing by Purchaser pursuant to this
Agreement are paid in full. Purchaser hereby agrees to execute and promptly
deliver to Seller a UCC-1 financing statement in favor of Seller with respect
to the Properties. Seller shall simultaneously execute and deliver to
Purchaser's attorney a UCC-3 termination statement, which termination
statement may be filed by Seller's attorney upon the payment by Seller to
Purchaser of all funds due and owing by Purchaser to Seller pursuant to this
Agreement.
10. Construction.
(a) The rights and powers herein granted to Purchaser are those of a
Purchaser only and this Agreement shall not, and is not intended to, create
any other relationship nor make, constitute or appoint Seller an agent or
employee of Purchaser.
(b) This Agreement cannot be modified, changed, discharged or
terminated, except by an instrument in writing signed by the party against
whom the enforcement of a waiver, change, discharge or termination is sought.
(c) Neither party has relied on any representation or warranty made
by the other party as an inducement to enter into this Agreement except for
those warranties and representations expressly set forth in this Agreement.
(d) No waiver of a breach or default under any provision hereof shall
be deemed a waiver of such provisions or of any subsequent breach or default
of the same or similar nature.
(e) Each party hereto has been represented by independent counsel of
its own choosing in connection with this Agreement; and that Seller has had
its independent counsel review this agreement and advise Seller with respect
thereto. Neither party hereto shall be deemed the drafter of this Agreement
for an [sic] purpose.
IN WITNESS WHEREOF, the parties have set their hands as of the day and
year first above written.
Paradise Magazine, Inc.
By: /s/
Princeton Publishing, Inc.
By: /s/ Henry McQueeney, President
/s/ James McNamara, Chairman
Agency Rate Card
TITLE PAGE RATE
Oui $2,115
Oui Int'l $900
Oriental Women $900
ACR $900
Blueboy $1,080
Jock $1,080
Stars $1,080
Numbers $1,080
Obsessions $900
Iniquity/Hard $900
Machismo $900
Jock All Stars $900
Gent $1,785
Nugget $1,285
DECEMBER LEG SCENE 1996
Chaz Vincent
Sid Deuce
FEBRUARY LEG SCENE 1997
Selena
MARCH LEG SCENE 1997
Kristi Myst
Randi Storm
Exhibit 10.3
KABLE DISTRIBUTION SERVICES Michael P. Duloc
a Division of KABLE NEWS COMPANY, INC. President & Chief Operating Officer
April 10, 1997
Paradise Publishing Group
350 Fifth Avenue, Ste. 2208
New York, NY 10118
Princeton Publishing, Inc.
12 West 27th St., 14th Fl.
New York, NY 10001-6903
Re: Kable News Company, Inc. Distribution Agreement dated October 25,
1993 with Paradise Publishing Group ("Paradise Distribution Contract")
Kable News Company, Inc. Distribution Agreement date May 14, 1996 with
Princeton Publishing, Inc. ("Princeton Distribution Contract")
Gentlemen:
You have advised us that Princeton Publishing, Inc. ("PPI") has purchased
certain assets of Paradise Publishing Group ("PPG") including all right, title
and interest in and to the trademark, name, title and magazine LEG SCENE, and
all goodwill associated therewith (hereinafter the "Magazine"). In addition,
you have advised us that, subject to approval by Kable News Company, Inc.
("KABLE"), LEG SCENE will be deleted from the Paradise Distribution Contract
and added to the Princeton Distribution Contract.
KABLE will agree to the foregoing, provided that all of the parties agree to
the following terms and conditions by signing and returning four executed copies
of this letter:
1. PPG and PPI represent that on March 17, 1997, PPG sold, transferred and
conveyed to PPI all of its right, title and interest to the trademarks, title
and trade dress to the magazine LEG SCENE, together with all the goodwill
associated therewith.
2. PPG hereby agrees that, effective with the September 1997 issue of the
LEG SCENE, the Magazine shall be deleted as a Publication under Schedule "A"
of the Paradise Distribution Contract, and all of its rights, duties and
obligations as "PUBLISHER" of the Magazine shall thereafter be assumed by PPI.
3. PPI hereby agrees that effective with the September 1997 issue of LEG
SCENE, the Magazine shall be added as a Publication under Schedule "A" of the
Princeton Distribution Contract, and thereafter shall assume all of the
rights, duties and obligations as "PUBLISHER" of the Magazine under the above
referenced Distribution Contract effective with said issue.
4. KABLE agrees to the foregoing deletion of LEG SCENE from Schedule "A"
of the Paradise Distribution Contract and its addition to Schedule "A" of the
Princeton Distribution Contract, and the aforesaid assignment and assumption.
5. The above shall be effective as of the September 1997 issue of LEG
SCENE. All issues shipped prior to the September 1997 issue of LEG SCENE, and
all sums due PUBLISHER for LEG SCENE prior to the September 1997 issue of LEG
SCENE shall belong and be paid to PPG which shall also be obligated to pay
KABLE for any sums that may be due for all outstanding issues prior to the
September 1997 issue of LEG SCENE.
6. All sums due for any issue distributed commencing with the September
1997 issue of LEG SCENE shall be paid to PPI which shall assume all obligation
and liabilities to KABLE for all issues distributed, effective with the
September 1997 issue.
7. PPI represents that it is a corporation in good standing organized to
the laws of the State of New York. Its current President and Chief Executive
Officer is Hank McQueeney.
8. PPG represents that it is a corporation in good standing organized to
the laws of the State of New York. Its current President and Chief Executive
Officer is Ted Liebowitz.
7. This letter when signed by all parties, and returned to KABLE shall
constitute an amendment to both the Paradise Distribution Contract and the
Princeton Distribution Contract. All other terms and conditions of both
Paradise Distribution Contract and the Princeton Distribution Contract shall
remain unchanged and in full force and effect.
AGREED:
PRINCETON PUBLISHING, INC.
Dated: 5/14/97 By: /s/ Hank McQueeney
Hank McQueeney, President
Dated: PARADISE PUBLISHING GROUP
By: /s/ Ted Liebowitz,
Ted Liebowitz, President
Dated: 5/21/97 KABLE DISTRIBUTION SERVICES,
DIVISION OF KABLE NEWS COMPANY, INC.
By: /s/ Michael Duloc
Michael Duloc, President
Exhibit 10.4
STANDARD FORM OF LOFT LEASE
The Real Estate Board of New York, Inc.
Agreement of Lease, made as of this 23d day of January, 1997, between 12
WEST 27TH STREET ASSOCIATES, a New York Partnership having an office c/o
Meringoff Equities, 30 West 26th Street, New York, NY 10010, party of the
first part, hereinafter referred to as LANDLORD, and PRINCETON PUBLISHING,
INC., a New York [sic] Corporation having an office at 28 West 25th Street,
7th floor, New York, NY, party of the second part, hereinafter referred to as
TENANT,
Witnesseth:
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
entire 14th floor as shown on Exhibit A attached hereto in the building known
as 12 West 27th Street in the Borough of Manhattan, City of New York, for the
term of Five years(or until such term shall sooner cease and expire as
hereinafter provided) to commence on the 1st day of February, nineteen hundred
and ninety-seven, and to end on the 31st day of January, two thousand-two,
both dates inclusive, at an annual rental rate of [See Article 41] which
Tenant agrees to pay in lawful money of the United States which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, in equal monthly installments in advance on the first day of each
mouth during said term, at the office of Landlord or such other place as
Landlord may designate, without any set off or deduction whatsoever, except
that Tenant shall pay the first monthly installment(s) on the execution hereof
(unless this lease be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Landlord
pursuant to the terms of another lease with Landlord or with Landlord's
predecessor in interest, Landlord may at Landlord's option and without notice
to Tenant add the amount of such arrearages to any monthly installment of rent
payable hereunder and the same shall be payable to Landlord as additional
rent.
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors hereby covenant as follows:
Rent:
1. Tenant shall pay the rent as above and as hereinafter provided.
Occupancy:
2. Tenant shall use and occupy demised promises for general and executive
offices and for no other purpose.
Alterations:
3. Tenant shall make no changes in or to the demised premises of any nature
without Landlord's prior written consent. Subject to the prior written
consent of Landlord, and to the provisions of this article, Tenant at Tenant's
expense, may make alterations, installations, additions or improvements which
are non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
Contractors or mechanics first approved by Landlord. All fixtures and all
paneling, partitions, railings and like installations, installed in the
premises at any time, either by Tenant or by Landlord in Tenant's behalf,
shall, upon installation, 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 days prior to the date fixed as 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 from the premises
by Tenant prior to the expiration of the lease at Tenant's expense. Nothing
in this article shall he construed to give Landlord title to or to prevent
Tenant's removal of trade fixtures, moveable office furniture and equipment,
but upon removal of any such from the premises or upon removal of other
installations as may be required by Landlord, Tenant shall immediately and at
its expense, repair and restore the premises to the condition existing prior
to installation and repair any damage to the demised premises or the building
due to such removal. All property permitted or required to be removed by
Tenant at the end of the term remaining in the premises after Tenant's removal
shall be deemed abandoned and may, at the election of Landlord, either be
retained as Landlord's property or may be removed from the premises by
Landlord at Tenant's expense. Tenant shall, before making any alterations,
additions, installations or improvements, at its expense, obtain all permits,
approvals and certificates required by any governmental or quasi-governmental
bodies and (upon completion) certificates of final approval thereof and shall
deliver promptly duplicates of all such permits, approvals and certificates to
Landlord and Tenant agrees to carry and will cause Tenant's contractors and
sub-contractors to carry such workman's compensation, general liability,
personal and property damage insurance as Landlord may require. If any
mechanic's lien is filed against the demised premises, or the building of
which the same forms a part, for work claimed to have been done for, or
materials furnished to, Tenant, whether or not done pursuant to this article,
the same shall be discharged by Tenant within ten days thereafter, at Tenant's
expense, by, filing the bond required by law.
Repairs:
4. Landlord shall maintain and repair the public portions of the building,
both exterior and interior. Tenant shall, throughout the term of this lease,
take good care of the demised premises and the fixtures and appurtenances
therein and at Tenant's sole cost and expense, make all non-structural repairs
thereto as and when needed to preserve them in good working order and
condition, reasonable wear and tear, obsolescence and damage from the
elements, fire or other casualty, excepted. Notwithstanding the foregoing,
all damage or injury to the demised premises or to any other part of the
building, or to its fixtures, equipment and appurtenances, whether requiring
structural or nonstructural repairs, caused by or resulting from carelessness,
omission, neglect or improper conduct of Tenant, Tenant's servants, employees,
invitees, or licensees, shall be repaired promptly by Tenant at its sole cost
and expense, to the satisfaction of Landlord reasonably exercised. Tenant
shall also repair all damage to the building and the demised premises caused
by the moving of Tenant's fixtures, furniture or equipment. All the aforesaid
repairs shall be of quality or class equal to the original work or
construction. If Tenant fails after ten days notice to proceed with due
diligence to make repairs required to be made by Tenant, the same may be made
by the Landlord at the expense of Tenant and the expenses thereof incurred hy
Landlord shall be collectible as additional rent after rendition of a bill or
statement therefor. If the demised premises be or become infested with
vermin, Tenant shall at Tenant's expense, cause the same to be exterminated
from time to time to the satisfaction of Landlord. Tenant shall give Landlord
prompt notice of any defective condition in any plumbing, heating system or
electrical lines located in, servicing or passing through the demised premises
and following such notice, Landlord shall remedy the condition with due
diligence but at the expense of Tenant if repairs are necessitated by
Tenant's servants, agents, employees, invitees or licensees as aforesaid.
Except as specifically provided in Article 9 or elsewhere in this lease, there
shall be no allowance to the Tenant for a diminution of rental value and no
liability on the part of Landlord by reason of inconvenience, annoyance or
injury to business arising from Landlord, Tenant or others making or failing
to make any repairs, alterations, additions or improvements in or to any
portion of the building or the demised promises or in and to the fixtures,
appurtenances or equipment thereof. The provisions of this Article 4 with
respect to the making of repairs shall not apply in the case of fire or other
casualty which are dealt with in Article 9 hereof.
Window Cleaning:
5. Tenant will not clean nor require, permit, suffer or allow any window in
the demised premises to be cleaned from the outside in violation of Section
202 of the New York State Labor Law or any other applicable law or of the
Rules of the Board of Standards and Appeals, or of any other Board or body
having or asserting jurisdiction.
Requirements of Law, Fire Insurance, Floor Loads:
6. Prior to the commencement of the lease term, if Tenant is then in
possession, and at all times thereafter, Tenant, at Tenant's sole cost and
expense, shall promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments,
departments, commissions and boards and any direction of any public officer
pursuant to law, and all orders, rules and regulations of the New York Board
of Fire Underwriters or any similar body which shall impose any violation,
order or duty upon Landlord or Tenant with respect to the demised premises
arising out of Tenant's use or manner of use thereof, or with respect to the
building if arising out of Tenant's use or manner of use of the premises or
the building (including the use permitted under the lease). Except as
provided in Article 29 hereof, nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has by its manner of use of
the demised premises or method of operation therein, violated any such laws,
ordinances, orders, rules, regulations, or requirements with respect thereto.
Tenant may, after securing Landlord to Landlord's satisfaction against all
damages, interest, penalties and expenses, including, but not limited to,
reasonable attorneys' fees, by cash deposit or by surety bond in an amount and
in a company satisfactory to Landlord, contest and appeal any such laws,
ordinances, orders, rules, regulations or requirements provided same is done
with all reasonable promptness and provided such appeal shall not subject
Landlord to prosecution for a criminal offense or constitute a default under
any lease or mortgage under which Landlord may be obligated, or cause the
demised premises or any part thereof to be condemned or vacated. Tenant shall
not do or permit any act or thing to be done in or to the demised premises
which is contrary to law, or which will invalidate or be in conflict with
public liability, fire or other policies of insurance at any time carried by
or for the benefit of Landlord with respect to the demised premises or the
building of which the demised premises form a part, or which shall or might
subject Landlord to any liability or responsibility to any person or for
property damage, nor shall Tenant keep anything in the demised premises except
as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization or other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
promises in a manner which will increase the insurance rate for the building
or any property located therein over that in effect prior to the commencement
of Tenant's occupancy. Tenant shall pay all costs, expenses, fines, penalties
or damages, which may be imposed upon Landlord by reason of Tenant's failure
to comply with the provisions of this article and if by reason of such failure
the fire insurance rate shall, at the beginning of this lease or at any time
thereafter, be higher than it otherwise would be, then Tenant shall reimburse
Landlord, as additional rent hereunder, for that portion of all fire insurance
premiums (hereafter paid by Landlord which shall have been charged because of
such failure by Tenant, and shall make such reimbursement upon the first day
of the month following such outlay by Landlord. In any action or proceeding
wherein Landlord and Tenant arc parties a schedule or "make-up" of rate for
the building or demised premises issued by the rates applicable to said
premises shall be conclusive evidence of the facts therein stated and of the
several items and charges in the fire insurance rate then applicable to said
premises. Tenant shall not place a load upon any floor of the demised
premises exceeding the floor load per square foot area which it was designed
to carry and which is allowed by law. Landlord reserves the right to
prescribe the weight and position of all safes, business machines and
mechanical equipment. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Landlord's judgment,
to absorb and prevent vibration, noise and annoyance. To Landlord's knowledge,
the premises are presently free from any violations and are in compliance with
any fire law regarding general office use.
Subordination:
7. This lease is subject and subordinate to all ground or underlying leases
and to all mortgages which may now or hereafter affect such leases or the real
property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of all such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessee or by any mortgagee, affecting any lease or the real
property of which the demised premises arc a part. In confirmation of such
subordination, Tenant shall execute promptly any certificate that Landlord may
request.
Property Loss, Damage, Reimbursement, Indemnity:
8. Landlord or its agents shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury to
persons or property resulting from any cause of whatsoever nature, unless
caused by or due to the negligence of Landlord, its agents, servants or
employees; nor shall Landlord or its agents be liable for any such damage
caused by other tenants or persons in, upon or about said building or caused
by operations in construction of any private, public or quasi public work. If
at any time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked up, if
required by law) for any reason whatsoever including, but not limited to
Landlord's own acts, Landlord shall not he liable for any damage Tenant may
sustain thereby and Tenant shall not be entitled to any compensation therefor
nor abatement or diminution of rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction.
Tenant shall not move any safe, heavy machinery, heavy equipment, bulky
matter, or fixtures into or out of the building without Landlord's prior
written consent. If such safe, machinery, equipment, bulky matter or fixtures
requires special handling, all work in connection therewith shall comply with
the Administrative Code of the City of New York and all other laws and
regulations applicable thereto and shall be done during such hours as Landlord
may designate. Tenant shall indemnify and save harmless Landlord against and
from all liabilities, obligations, damages, penalties, claims, costs and
expenses for which Landlord shall not be reimbursed by insurance, including
reasonable attorneys fees, paid, suffered or incurred as a result of any
breach by Tenant, Tenant's agents, contractors, employees, invitees, or
licensees, of any covenant or condition of this lease, or the carelessness,
negligence or improper conduct of the Tenant, Tenant's agents, contractors,
employees, invitees or licensees. Tenant's liability under this lease extends
to the acts and omissions of any subtenant, and any agent, contractor,
employee, invitee or licensee of any subtenant. In case any action or
proceeding is brought against Landlord by reason of any such claim, Tenant,
upon written notice from Landlord, will, at Tenant's expense, resist or defend
such action or proceeding by counsel approved by Landlord in writing, such
approval not to be unreasonably withheld.
Destruction, Fire and Other Casualty
9. (a) If the demised premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give immediate notice thereof to Landlord and
this lease shall continue in full force and effect except as hereinafter set
forth. (b) If the demised premises are partially damaged or rendered partially
unusable by fire or other casualty, the damages thereto shall be repaired by
and at the expense of Landlord and the rent, until such repair shall be
substantially completed, shall be apportioned from the day following the
casualty according to the part of the premises which is usable. (c) If the
demised premises arc totally damaged or rendered wholly unusable by fire or
other casualty, then the rent shall be proportionately paid up to the time of
the casualty and thenceforth shall cease until the date when the premises
shall have been repaired and restored by Landlord, subject to Landlord's right
to elect not to restore the same as hereinafter provided. (d) If the demised
premises arc rendered wholly unusable or (whether or not the demised premises
are damaged in whole or in part) if the building shall be so damaged that
Landlord shall decide to demolish it or to rebuild it, then, in any of such
events, Landlord may elect to terminate this lease by written notice to Tenant
given within 90 days after such fire or casualty specifying a date for the
expiration of the lease, which date shall not be more than 60 days after the
giving of such notice, and upon the date specified in such notice the term of
this lease shall expire as fully and completely as if such date were the date
set forth above for the termination of this lease and Tenant shall forthwith
quit, surrender and vacate the premises without prejudice however, to
Landlord's rights and remedies against Tenant under the lease provisions in
effect prior to such termination, and any rent owing shall be paid up to such
date and any payments of rent made by Tenant which were on account of any
period subsequent to such date shall be returned to Tenant. Unless Landlord
shall serve a termination notice as provided for herein, Landlord shall make
the repairs and restorations under the conditions of (b) and (c) hereof, with
all reasonable expedition subject to delays due to adjustment of insurance
claims, labor troubles and causes beyond Landlord's control. After any such
casualty, Tenant shall cooperate with Landlord's restoration by removing from
the premises as promptly as reasonably possible, all of Tenant's salvageable
inventory and movable equipment, furniture, and other property. Tenant's
liability for rent shall resume five (5) days after written notice from
Landlord that the premises are substantially ready for Tenant's occupancy. (e)
Nothing contained hereinabove shall relieve Tenant from liability that may
exist as a result of damage from fire or other casualty. Notwithstanding the
foregoing, each party shall look first to any insurance in its favor before
making any claim against the other party for recovery for loss or damage
resulting from fire or other casualty, and to the extent that such insurance
is in force and collectible and to the extent permitted by law, Landlord and
Tenant each hereby releases and waives all right of recovery against the other
or any one claiming through or under each of them by way of subrogation or
otherwise. The foregoing release and waiver shall be in force only if both
releasors' insurance policies contain a clause providing that such a release
or waiver shall not invalidate the insurance and also, provided that such a
policy can be obtained without additional premiums. Tenant acknowledges that
Landlord will not carry insurance on Tenant's furniture and/or furnishings or
any fixtures or equipment, improvements, or appurtenances removable by Tenant
and agrees that Landlord will not be obligated to repair any damage thereto or
replace the same. (f) Tenant hereby waives the provisions of Section 227 of
the Real Property Law and agrees that the provisions of this article shall
govern and control in lieu thereof.
Eminent Domain:
10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose,
then and in that event, the term of this lease shall cease and terminate from
the date of title vesting in such proceeding and Tenant shall have no claim
for the value of any unexpired term of said lease.
Assignment, Mortgage, Etc.:
11. Tenant, for itself. its heirs, distributees, executors, administrators,
legal representatives, successors and assigns, expressly covenants that it
shall not assign, mortgage or encumber this agreement, nor underlet, or suffer
or permit the demised or any part thereof to be used by others, except to any
parent or subsidiary of Tenant provided Tenant remains liable under the Lease,
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 underlet or
occupied by anybody other than Tenant, Landlord may, after default by Tenant,
collect rent from the assignee, under-tenant or occupant, and apply the net
amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of this
covenant or the acceptance of the assignee, under-tenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. The consent by Landlord to
an assignment or underletting shall not in any wise be construed to relieve
Tenant from obtaining the express consent in writing of Landlord to any
further assignment or underletting.
Electric Current:
12. Rates and conditions in respect to submetering or rent inclusion, as the
case may be, to be added in RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in
Landlord's opinion, reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the building. The change
at any time of the character of electric service shall in no wise make
Landlord liable or responsible to Tenant, for any loss, damages or expenses
which Tenant may sustain.
Access to Premises:
13. Landlord or Landlord's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and, at
other reasonable times, to examine the same and to make such repairs,
replacements and improvements as Landlord may deem necessary and reasonably
desirable to the demised premises or to any other portion of the building on
which Landlord may elect to perform following Tenant's failure to make repairs
or perform any work which Tenant is obligated to perform under this lease, or
for the purpose of complying with laws, regulations and other directions of
governmental authorities. Tenant shall permit Landlord to use and maintain
and replace pipes and conduits in and through the demised premises and to
erect new pipes and conduits therein. Landlord may, during the progress of
any work in the demised premises, take all necessary materials and equipment
into said premises without the same constituting an eviction nor shall the
Tenant be entitled to any abatement of rent while such work is in progress nor
to any damages by reason of loss or interruption of business or otherwise.
Throughout the term hereof Landlord shall have the right to enter the demised
premises at reasonable hours for the purpose of showing the same to
prospective purchasers or mortgagees of the building, and during the last six
months of the term for the purpose of showing the same to prospective tenants
and may, during said six months period, place upon the premises the usual
notices "To Let" and "For Sale" which notices Tenant shall permit to remain
thereon without molestation. If Tenant is not present to open and permit an
entry into the premises, Landlord or Landlord's agents may enter the same
whenever such entry may be necessary or permissible by master key or forcibly
and provided reasonable care is exercised to safeguard Tenant's property and
such entry shall not render Landlord or its agents liable therefor, nor in any
event shall the obligations of Tenant hereunder be affected. If during the
last month of the term Tenant shall have removed all or substantially all of
Tenant's property therefrom. Landlord may immediately enter alter, renovate
or redecorate the demised premises without limitation or abatement of rent, or
incurring liability to Tenant for any compensation and such act shall have no
effect on this lease or Tenant's obligations hereunder. Landlord shall have
the right at any time, without the same constituting an eviction and without
incurring liability to Tenant therefor to change the arrangement and/or
location of public entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets, or other public parts of the building and to
change the name, number or designation by which the building may be known.
Notwithstanding anything to the contrary, if Landlord's work takes more
than 30 consecutive days then Tenant shall receive a rent credit for each
day over the 30 days.
Vault, Vault Space, Area:
14. No Vaults, vault space or area, whether or not enclosed or covered, not
within the property line of the building is leased hereunder, anything
contained in or indicated on any sketch, blue print or plan, or anything
contained elsewhere in this lease to the contrary notwithstanding. Landlord
makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the
property line of the building, which Tenant may be permitted to use and/or
occupy, is to be used and/or occupied under a revocable license, and if any
such license be revoked, or if the amount of such space or area be diminished
or required by any federal, state or municipal authority or public utility,
Landlord shall not be subject to any liability nor shall Tenant be entitled to
any compensation or diminution or abatement of rent, nor shall such
revocation, diminution or requisition be deemed constructive or actual
eviction. Any tax, fee or charge of municipal authorities for such vault or
area shall be paid by Tenant.
Occupancy:
15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts
them as is, subject to the riders annexed hereto with respect to Landlord's
work, if any. In any event, Landlord makes no representation as to the
condition of the premises and Tenant agrees to accept the same subject to
violations whether or not of record. To Landlord's knowledge, there are no
existing violations and that the premises are in compliance with law and
Tenant's intended use is in accordance with the C of 0 and all applicable
laws.
Bankruptcy:
16. (a) If at the date fixed as the commencement of the term of this lease or
if at any time during the term hereby demised there shall be filed by or
against Tenant in any court pursuant to any statute either of the United
States or of 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, and within 60 days thereof, Tenant fails to
secure a dismissal thereof, or if Tenant make an assignment for the benefit of
creditors or petition for or enter into an arrangement, this lease, at the
option of Landlord, exercised within a reasonable time after notice of the
happening of any one or more of such events, may be cancelled and terminated
by written notice to the Tenant (but if any of such events occur prior to the
commencement date, this lease shall be ipso facto cancelled and terminated)
and whether such cancellation and termination occur prior to or during the
term, neither Tenant nor any person claiming through or under Tenant by virtue
of any statute or of any order of any court, shall be entitled to possession
or to remain in possession of the premises demised but shall forthwith quit
and surrender the premises, and Landlord, in addition to the other rights and
remedies Landlord has by virtue of any other provision herein or elsewhere in
this lease contained or by virtue of any statute or rule of law, may retain as
liquidated damages, any rent, security deposit or moneys received by him from
Tenant or others in behalf of Tenant. If this lease shall be assigned in
accordance with its terms, the provisions of this Article 16 shall be
applicable only to the party then owning Tenant's interest in this lease.
(b) It is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Landlord shall forthwith, notwithstanding
any other provisions of this lease to the contrary, be entitled to recover
from Tenant as and for liquidated damages an amount equal to the difference
between the rent reserved hereunder for the unexpired portion of the term
demised and the fair and reasonable rental value of the demised premises for
the same period. In the computation of such damages the difference between
any instalment 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 instalment was payable shall be discounted to the date
of termination at the rate of four per cent (4%) per annum. If such premises
or any part thereof be 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 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.
Default
17. (1) If Tenant defaults in fulfilling any of the covenants of this lease
other than the covenants for the payment of rent or additional rent; or if the
demised premises become vacant or deserted; or if the demised premises are
damaged by reason of negligence or carelessness of Tenant, its agents,
employees or invitees: or if any execution or attachment shall be issued
against Tenant or any of Tenant's property whereupon the demised shall be
taken or occupied by someone other than Tenant; or if Tenant shall make
default with respect to any other lease between Landlord and Tenant; or if
Tenant shall fail to move into or take possession of the premises within
forty-five days after the commencement of the term of this lease, of which
fact Landlord shall be the sole judge; then, in any one or more of such
events, upon Landlord serving a written ten days notice upon Tenant specifying
the nature of said default and upon the expiration of said ten days, if Tenant
shall have failed to comply with or remedy such default, or if the said
default or omission complained of shall be of a nature that the same cannot be
completely cured or remedied within said ten day period, and if Tenant shall
not have diligently commenced curing such default within such ten day period,
and shall not thereafter with reasonable diligence and in good faith proceed
to remedy or cure such default, then Landlord may serve a written five days'
notice of cancellation of this lease upon Tenant, and upon the expiration of
said five days, this lease and the term thereunder shall end expire as fully
and completely as if the expiration of such five day period were the day
herein definitely fixed for the end and expiration of this lease and the term
thereof and Tenant shall then quit and surrender the demised premises to
Landlord but Tenant shall remain liable as hereinafter provided.
(2) If the notice provided for in (1) hereof shall have been given, and
the term shall expire as aforesaid; or if Tenant shall make default in the
payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein
required; then and in any of such events Landlord may without notice, re-enter
the demised premises either by force or otherwise, and dispossess Tenant by
summary proceedings or otherwise, and the legal representative of Tenant or
other occupant of demised premises and remove their effects and hold the
premises as if this lease had not been made, and Tenant hereby waives the
service of notice of intention to re-enter or to institute legal proceedings
to that end. If Tenant shall make default hereunder prior to the date fixed
as the commencement of any renewal or extension of this lease, Landlord may
cancel and terminate such renewal or extension agreement by written notice.
Remedies of Landlord and Waiver of Redemption
18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent shall become due thereupon and
be paid up to the time of such re-entry, dispossess and/or expiration,
together with such expenses as Landlord may incur for legal expenses,
attorneys' fees, brokerage, and/or putting the demised premises in good order,
or for preparing the same for re-rental; (b) Landlord may re-let the premises
or any part or parts thereof, either in the name of Landlord or otherwise, for
a term or terms, which may at Landlord's option be less than or exceed the
period which would otherwise have constituted the balance of the term of this
lease and may grant concessions or free rent or charge a higher rental than
that in this lease, and/or (c) Tenant or the legal representatives of Tenant
shall also pay Landlord as liquidated damages for the failure of Tenant to
observe and perform said Tenant's covenants herein contained, any deficiency
between the rent hereby reserved and/or covenanted to be paid and the net
amount, if any, of the rents collected on account of the lease or leases of
the demised premises for each month of the period which would otherwise have
constituted the balance of the term of this lease. The failure of Landlord to
re-let the premises or any part or parts thereof shall not release or affect
Tenant's liability for damages. In computing such liquidated damages there
shall be added to the said deficiency such expenses as Landlord may incur in
connection with re-letting, such as legal expenses, attorneys' fees,
brokerage, advertising and for keeping the demised premises in good order or
for preparing the same for re-letting. Any such liquidated damages shall be
paid in monthly installments by Tenant on the rent day specified in this lease
and any suit brought to collect the amount of the deficiency for any month
shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord, in
putting the demised premises in good order or preparing the same for re-rental
may, at Landlord's option, make such alterations, repairs, replacements,
and/or decorations in the demised premises as Landlord, in Landlord's sole
judgment, considers advisable and necessary for the purpose of re-letting the
demised premises, and the making of such alterations, repairs, replacements,
and/or decorations shall not operate or be construed to release Tenant from
liability hereunder as aforesaid. Landlord shall in no event be liable in any
way whatsoever for failure to re-let the demised premises, or in the event
that the demised premises are re-let, for failure to collect the rent thereof
under such re-letting, and in no event shall Tenant be entitled to receive any
excess, if any, of such net rents collected over the sums payable by Tenant to
Landlord hereunder. Landlord shall expeditiously use its best efforts to
relet the premises at a rental not in excess. In the event of a breach or
threatened breach by Tenant of any of the covenants or provisions hereof,
Landlord shall have the right of injunction and the right to invoke any
remedy allowed at law or in equity as if re-entry, summary proceedings and
other remedies were not herein provided for. Mention in this lease of any
particular remedy, shall not preclude Landlord from any other remedy, in law
or in equity. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of demised premises, by reason of the violation by Tenant of any of
the covenants and conditions of this lease, or otherwise.
Fees and Expenses
19. If tenant shall default in the observance or performance of any term or
covenant on tenant's part to be observed or performed under or by virtue of
any of the terms or provisions in any article of this lease, then, unless
otherwise provided elsewhere in this lease, landlord may immediately or at any
time thereafter and without notice perform the obligation of tenant
thereunder, and if landlord, in connection therewith or in connection with any
default by tenant in the covenant to pay rent hereunder, makes any
expenditures or incurs any obligations for the payment of money, including but
not limited to attorney's fees, in instituting, prosecuting or defending any
action or proceeding, such sums so paid or obligations incurred with interest
and costs shall be deemed to be additional rent hereunder and shall be paid by
tenant to landlord within five (5) days of rendition of any bill or statement
to tenant therefor, and if tenant's lease term shall have expired at the time
of making of such expenditures or incurring of such obligations, such sums
shall be recoverable by landlord as damages.
No Representations by Landlord
20. Neither Landlord nor Landlord's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other matter or thing affecting or related to the premises
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth
in the provisions of this lease. Tenant has inspected the building and the
demised premises and is thoroughly acquainted with their condition, and agrees
to take the same "as is" and acknowledges that the taking of possession of the
demised premises by Tenant shall be conclusive evidence that the said premises
and the building of which the same form a part were in good and satisfactory
condition at the time such possession was so taken, except as to latent
defects. All understandings and agreements heretofore made between the
parties hereto are merged in this contract, which alone fully and completely
expresses the agreement between Landlord and Tenant and any executory
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of it in whole or in part, unless such executory
agreement is in writing and signed by the party against whom enforcement of
the change, modification, discharge or abandonment is sought.
End of Term
21. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to Landlord the demised premises, broom clean,
in good order and condition, ordinary wear excepted, and Tenant shall remove
all its property. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of this lease. If the last
day of the term of this lease or any renewal thereof, falls on Sunday, this
lease shall expire at noon on the preceding Saturday unless it be a legal
holiday in which case it shall expire at noon on the preceding business day.
Quiet Enjoyment
22. Landlord covenants and agrees with Tenant that upon Tenant paying the rent
and additional rent and observing and performing all the terms, covenants and
conditions, on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to, Article 33 hereof and to the ground leases, underlying leases and
mortgages hereinbefore mentioned.
Failure to Give Possession
23. If Landlord is unable to give possession of the demised premises on the
date of the commencement of the term hereof, because of the holding-over or
retention of possession of any tenant, undertenant or occupants, or if the
premises are located in a building being constructed, because such building
has not been sufficiently completed to make the premises ready for occupancy
or because of the fact that a certificate of occupancy has not been procured
or for any other reason, Landlord shall not be subject to any liability for
failure to give possession on said date and the validity of the lease shall
not be impaired under such circumstances, nor shall the same be construed in
any wise to amend the term of this lease, but the rent payable hereunder shall
be abated (provided Tenant is not responsible for the inability to obtain
possession) until after Landlord shall have given Tenant written notice that
the premises are substantially ready for Tenant's occupancy. If permission is
given to Tenant to enter into the possession of the demised premises or to
occupy premises other than the demised premises prior to the date specified as
the commencement of the term of this lease, Tenant covenants and agrees that
such occupancy shall be deemed to be under all the terms, covenants,
conditions and provisions of this lease, except as to the covenant to pay
rent. The provisions of this article are intended to constitute "an express
provision to the contrary" within the meaning of Section 223-a of the New York
Real Property Law.
No Waiver:
24. The failure of Landlord to seek redress for violation of, or to insist
upon the strict performance of any covenant or condition of this lease or of
any of the Rules or Regulations set forth or hereafter adopted by Landlord,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Landlord of rent with knowledge of the breach of any covenant of
this lease shall not be deemed a waiver of such breach and no provision of
this lease shall be deemed to have been waived by Landlord unless such waiver
be in writing signed by Landlord. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any
endorsement or statement of any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this lease provided. No act
or thing done by Landlord or Landlord's agents during the term hereby demised
shall be deemed an acceptance of a surrender of said premises and no agreement
to accept such surrender shall be valid unless in writing signed by Landlord.
No employee of Landlord or Landlord's agent shall have any power to accept the
keys of said premises prior to the termination of the lease and the delivery
of keys to any such agent or employee shall not operate as a termination of
the lease or a surrender of the premises.
Waiver of Trial by Jury
25. 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, proceedings 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 of or occupancy of said
premises, and any emergency statutory or any other statutory remedy. It is
further mutually agreed that in the event Landlord commences any summary
proceeding for possession of the premises, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceeding.
Inability to Perform
26. This lease and the obligation of Tenant to pay rent hereunder and perform
all of the other covenants and agreements hereunder on part of Tenant to be
performed shall in no wise be affected, impaired or excused because Landlord
is unable to fulfill any of its obligations under this lease or to supply or
is delayed in supplying any service expressly or impliedly to be supplied or
is unable to make, or is delayed in making any repair, additions, alterations
or decorations or is unable to supply or is delayed in supplying any equipment
or fixtures if Landlord is prevented or delayed from so doing by reason of
strike or labor troubles including but not limited to, government preemption
in connection with a National Emergency or by reason of any rule, order or
regulation of any department or subdivision thereof of any government agency
or by reason of the conditions of supply and demand which have been or are
affected by war or other emergency.
Bills and Notices
27. Except as otherwise in this lease provided, a bill, statement, notice or
communication which Landlord may desire or be required to give to Tenant,
shall be deemed sufficiently given or rendered if, in writing, delivered to
Tenant personally or sent by registered or certified mail addressed to Tenant
at the building of which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any of the
aforesaid premises addressed to Tenant, and the time of the rendition of such
bill or statement and of the giving of such notice or communication shall be
deemed to be the time when the same is delivered to Tenant, mailed, or left at
the premises as herein provided. Any notice by Tenant to Landlord must be
served by registered or certified mail addressed to Landlord at the address
first hereinabove given or at such other address as Landlord shall designate
by written notice.
Water Charges
28. If Tenant requires, uses or consumes water for any purpose in addition to
ordinary lavatory purposes (of which fact Tenant constitutes Landlord to be
the sole judge) Landlord may install a water meter and thereby measure
Tenant's water consumption for all purposes. Presently, Landlord does not
intend to install a water meter. Tenant shall pay Landlord for the cost of the
meter and the cost of the installation thereof and throughout the duration of
Tenant's occupancy Tenant shall keep said meter and installation equipment in
good working order and repair at Tenant's own cost and expense in default of
which Landlord may cause such meter and equipment to be replaced or repaired
and collect the cost thereof from Tenant. Tenant agrees to pay for water
consumed, as shown on said meter as and when bills are rendered, and on
default in making such payment Landlord may pay such charges and collect the
same from Tenant. The bill rendered by Landlord shall be payable by Tenant as
additional rent. If the building or the demised premises or any part thereof
be supplied with water through a meter through which water is also supplied to
other premises Tenant shall pay to Landlord as additional rent, on the first
day of each month, $50.00 as its total monthly charge for water and sewer
usage as Tenant's portion. Independently of and in addition to any of the
remedies reserved to Landlord hereinabove or elsewhere in this lease, Landlord
may sue for and collect any monies to be paid by Tenant or paid by Landlord
for any of the reasons or purposes hereinabove set forth.
Sprinklers:
29. Anything elsewhere in this lease to the contrary notwithstanding, if the
New York Board of Fire Underwriters or the New York Fire Insurance Exchange or
any bureau, department or official of the federal, state or city government
require or recommend the installation of a sprinkler system or that any
changes, modifications, alterations, or additional sprinkler heads or other
equipment be made or supplied in an existing sprinkler system by reason of
Tenant's business, or the location of partitions, trade fixtures, or other
contents of the demised premises, or for any other reason, or if any such
sprinkler system installations, changes, modifications, alterations,
additional sprinkler heads or other such equipment, become necessary to
prevent the imposition of a penalty or charge against the full allowance for a
sprinkler system in the fire insurance rate set by any said Exchange or by any
fire insurance company, Tenant shall, at Tenant's expense, promptly make such
sprinkler system installations, changes, modifications, alterations, and
supply additional sprinkler heads or other equipment as required whether the
work involved shall be structural or nonstructural in nature. Tenant shall
pay to Landlord as additional rent the sum of $50.00 on the first day of each
month during the term of this lease, as Tenant's portion of the contract price
for sprinkler supervisory service.
Elevators, Heat, Cleaning
30. As long as Tenant is not in default under any of the covenants of this
lease Landlord shall: (a) provide necessary elevator facilities on business
days from 8 a.m. to 6 p.m.; (b) furnish heat to the demised premises, when and
as required by law, on business days from 8 a.m. to 6 p.m.; (c) at Landlord's
expense cause to be kept clean the public halls and public portions of the
building, which are used in common by all tenants. Tenant shall at Tenant's
expense, keep the demised premises clean and in order, to the satisfaction of
Landlord, and for that purpose shall employ the person or persons or
corporation approved by Landlord at a reasonable and customary cost. Tenant
shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish from the building. Bills for the same shall be rendered by Landlord
to Tenant at such time as Landlord may elect and shall be due and payable when
rendered, and the amount of such bills shall be deemed to be, and be paid as,
additional rent. Tenant shall, however, have the option of independently
contracting for the removal of such rubbish and refuse in the event that
Tenant does not wish to have same done by employees of Landlord. Under such
circumstances, however, the removal of such refuse and rubbish by others shall
be subject to such rules and regulations as, in the judgment of Landlord, are
necessary for the proper operation of the building. Landlord reserves the
right to stop service of the heating, elevator, plumbing and electric systems,
when necessary, by reason of accident, or emergency, or for repairs,
alterations, replacements or improvements, in the judgment of Landlord
desirable or necessary to be made, until said repairs, alterations,
replacements or improvements shall have been completed. And Landlord shall
have no responsibility or liability for failure to supply heat, elevator,
plumbing and electric service during said period or when prevented from so
doing by strikes, accident or by any cause beyond Landlord's control, or by
laws, orders or regulations of any Federal, State or Municipal Authority, or
failure of coal, oil or other suitable fuel supply, or inability by exercise
of reasonable diligence to obtain coal, oil or other suitable fuel. If the
building of which the demised premises are a part supplies manually operated
elevator service, Landlord may proceed with alterations necessary to
substitute automatic control elevator service upon ten (10) day written notice
to Tenant without in any way affecting the obligations of Tenant hereunder,
provided that the same shall be done with the minimum amount of inconvenience
to Tenant, and Landlord pursues with due diligence the completion of the
alterations. Notwithstanding the foregoing, if heat, elevator service or
plumbing to the demised premises are disrupted by Landlord's repairs or
alterations for a period of more than ten (10) consecutive business days,
Tenant will receive a rent credit beginning the 11th day and continuing until
service is restored.
Captions:
32. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.
Definitions:
33. The term "Landlord" as used in this lease means only the owner, or the
mortgagee in possession, for the time being of the land and building (or the
owner of a lease of the building or of the land and building) of which the
demised premises form a part, so that in the event of any sale or sales of
said land and building or of said lease, or in the event of a lease of said
building, or of the land and building, 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 or their successors in interest, or between the parties
and the purchaser, at any such sale, or the said lessee of the building, or of
the land and building, that the purchaser or the lessee of the building, or of
the land and building has assumed and agreed to carry out any and all
covenants and obligations of Landlord hereunder. The words "re-enter" and
"re-entry" as used in this lease are not restricted to their technical legal
meaning. The term "business days" as used in this lease shall exclude
Saturdays (except such portion thereof as is covered by specific hours in
Article 30 hereof), Sundays and all days observed by the State or Federal
Government as legal holidays and those designated as holidays by the
applicable building service union employees service contract or by the
applicable Operating Engineers contract with respect to HVAC service.
Adjacent Excavation - Shoring
34. If an excavation shall be made upon land adjacent to the demised premises,
or shall be authorized to be made, Tenant shall afford to the person causing
or authorized to cause such excavation, license to enter upon the demised
premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form
a part from injury or damage and to support the same by proper foundations
without any claim for damages or indemnity against Landlord, or diminution or
abatement of rent.
Rules and Regulations
35. Tenant and Tenant's servants, employees, agents, visitors, and licensees
shall observe faithfully, and comply strictly with, the Rules and Regulations
and such other and further reasonable Rules and Regulations as Landlord or
Landlord's agents may from time to time adopt. Notice of any additional rules
or regulations shall be given in such manner as Landlord may elect. In case
Tenant disputes the reasonableness of any additional Rule or Regulation
hereafter made or adopted by Landlord or Landlord's agents, the parties hereto
agree to submit the question of the reasonableness of such Rule or Regulation
for decision to the New York office of the American Arbitration Association,
whose determination shall be final and conclusive upon the parties hereto.
The right to dispute the reasonableness of any additional Rule or Regulation
upon Tenant's part shall be deemed waived unless the same shall be asserted
by service of a notice, in writing upon Landlord within (10) days after the
giving of notice thereof. Nothing in this lease contained shall be construed
to impose upon Landlord any duty or obligation to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against
any other Tenant and Landlord shall not be liable to Tenant for violation of
the same by any other tenant, its servants, employees, agents, visitors or
licensees.
Glass
36. Landlord shall replace, at the expense of Tenant, any and all plate and
other glass damaged or broken from any cause whatsoever in and about the
demised premises. Landlord may insure, and keep insured, at Tenant's expense,
all plate and other glass in the demised premises for and in the name of
Landlord. Bills for the premiums therefor shall be rendered by Landlord to
Tenant at such times as Landlord may elect, and shall be due from, and payable
by, Tenant which rendered, and the amount thereof shall be deemed to be, and
be paid as, additional rent.
Successors and Assigns
37. The covenants, conditions and agreements contained in this lease shall
bind and inure to the benefit of Landlord and Tenant and their respective
heirs, distributees, executors, administrators, successors, and except as
otherwise provided in this lease, their assigns.
Rider and Exhibits attached hereto are made a part hereof.
RIDER TO LEASE DATED AS OF THIS 27th DAY OF JANUARY, 1997
BETWEEN 12 WEST 27TH STREET ASSOCIATES, LANDLORD,
AND PRINCETON PUBLISHING, INC., TENANT.
38. If any conflict shall arise between any of the provisions of this
Rider and any of the terms, printed or typewritten, of the printed portion of
the Lease to which this Rider is attached, all such conflicts shall be
resolved in favor of the provisions of this Rider.
39. Notwithstanding anything to the contrary contained in this Lease,
any monies due Landlord other than the annual rental are deemed to be
additional rent, and any default in the payment of additional rent shall give
to Landlord the same remedies as it has with respect to a default in the
payment of rent.
40. (a) Tenant shall pay, as additional rent, 6.33 percent (6.33%) of
any and all increases in real estate taxes or assessments for public
betterments covering the land and the building of which the demised premises
form a part. Said increases shall be the amount charged during any Tax Year
above the amount charged during the Base Tax Year.
(b) Tax Year shall mean each period of twelve months commencing
on the first day of July in which occurs any part of the term of this Lease or
such other period of twelve months occurring during the term of this Lease as
hereafter may be adopted as the fiscal year for real estate tax purposes of
the City of New York or any other governmental authority.
(c) Base Tax Year shall mean the Tax Year commencing July 1,
1997.
(d) Tenant shall pay, as additional rent, 6.33 percent (6.33%) of
any reasonable and customary costs and expenses including, without limitation,
counsel fees incurred by Landlord which result in a reduction of the assessed
value of the land and building as proposed by the City of New York or any
other governmental authority for any Tax Year after the Base Tax Year.
(e) Payment of additional rental pursuant to paragraphs (a) and
(d) above shall be made within fifteen (15) days after demand based upon a
statement furnished by Landlord to Tenant with each such demand. Landlord
will furnish copies of tax bills, if available, upon request.
(f) The term "real estate taxes" shall mean all taxes and
assessments levied, assessed or imposed at any time by the City of New York or
by any other governmental authority upon or against the land and/or building
of which the demised premises form a part, and also any tax or assessment
levied, assessed or imposed at any time by any governmental authority in
connection with the receipt of income or rents from said land and/or building,
to the extent that same shall be in lieu of all or a portion of any of the
aforesaid taxes or assessments upon or against said land and/or building. If,
due to a future change in the method of taxation or in the taxing authority, a
franchise, license, income, transit, profit or other tax, fee, or governmental
imposition, however designated, shall be levied, assessed or imposed against
Landlord in substitution, in whole or in part, for the said real estate taxes,
or in lieu of additional real estate taxes, then such franchise, license,
income, transit, profit, or other tax, fee, or governmental imposition shall
be deemed to be included within the definition of "real estate taxes" for the
purposes hereof.
(g) Any delay or failure of Landlord in billing any amount payable
under this Article shall not constitute a waiver or in any way impair the
continuing obligation of Tenant to make all payments hereunder.
(h) If Landlord shall receive a refund of the Taxes for any Tax Year
subsequent to the Base Tax Year, Landlord shall promptly pay to Tenant 6.33
percent (6.33%) of the refund and the interest received thereon, if any (after
deducting from such refund the costs and expenses, including, without
limitation, counsel fees, of obtaining same); provided, however, such payment
to Tenant shall in no event exceed the amounts paid by Tenant for such Tax
Year.
41. In addition to any other amounts due under this Lease, Tenant agrees
to pay the following in equal monthly installments on the first day of each
month:
i) $ 12.00 per annum commencing February 1, 1997 and ending March 31,
1997;
ii) $65,000.00 per annum commencing April 1, 1997 and ending January
31, 1998;
iii) $67,600.00 per annum commencing February 1, 1998 and ending
January 31, 1999;
iv) $70,304.00 per annum commencing February 1, 1999 and ending
January 31, 2000;,
v) $73,116.16 per annum commencing February 1, 2000 and ending
January 31, 2000;
vi) $76,040.81 per annum commencing February 1, 2001 and ending
January 31, 2002.
42. If at any time during the term of this Lease, any law
requirements of the City of New York ("Law Requirements") impose any
obligations or requirements upon Landlord to perform any alterations,
installations, changes or improvements (collectively "changes") to the
building or the demised premises, then Tenant shall pay ("Tenant's Payment")
to Landlord an additional rent, Tenant's Percentage (6.33%) of all reasonable
costs and expenses incurred by Landlord in complying with the Law
Requirements. If such required Law Requirements constitute a capital
expenditure as determined in accordance with Generally Accepted Accounting
Principals then, Tenant's payment shall be limited to Tenant's Percentage of
the costs associated to the period of time remaining in the Lease term divided
by the useful life of the capital expenditure as reasonably determined by
Landlord in accordance with industry standards for the type of improvement.
Tenant's Payment shall be due and payable to Landlord within thirty (30) days
after rendition of a bill therefore accompanied by a statement setting forth
the changes performed by Landlord. The obligation of Tenant in respect of
such additional rent shall survive the expiration of this Lease. Tenant shall
have the right to pay Tenant's Payment in equal monthly installments during
the balance of the Lease term.
43. Tenant shall use and occupy the demised premises only for the
purposes stated in Article 2 of the Lease and for no other purpose. Without
limiting the generality of the foregoing, it is an express condition of this
Lease and Tenant expressly warrants and agrees that at no time and in no event
may the demised premises, or any portion thereof, be used for residential
purposes.
44. Tenant has examined the demised premises and agrees to take
possession of same in its "as is" condition. Landlord shall have no
obligation to furnish, render, or supply any work, labor, services, materials,
fixtures, furniture, equipment or decoration to make the demised premises ready
or suitable for Tenant's occupancy.
45. Landlord shall have the right at any time, without the same
constituting an actual or constructive eviction, and without incurring any
liability to Tenant, to change the arrangement and/or location of entrances of
passageways, corridors, elevators, stairs, toilets or other public parts of
the Building, and to change the name or number by which the Building is known,
provided it does not interfere with Tenant's use or access to the Demised
Premises.
46. (a) The use of gas and electricity is not included in the rent.
Tenant is to pay for its use of gas if any and electricity directly to the
Consolidated Edison Company of New York, Inc., or any other appropriate public
utility service.
(b) Notwithstanding anything to the contrary contained in this
Lease, Tenant shall, at Tenant's sole cost and expense, maintain, and promptly
make all repairs, structural or otherwise, ordinary and extraordinary, to all
components of the electrical system from the meters to and within the demised
premises.
(c) Tenant shall not be released or excused from the performance
of any of it obligations under this Lease for any failure or for interruption
or curtailment of electric or gas service, for any reason whatsoever, and no
such failure, interruption or curtailment shall constitute a constructive or
partial eviction.
47. Tenant, at its own cost and expense, shall arrange for the
removal of all its rubbish from the Building in accordance with any and all
applicable municipal codes and regulations and in accordance with any rules
and regulations of the Building which, in the judgment of Landlord, are
necessary for the proper operation of the Building. Landlord shall without
cost to Tenant regularly remove Tenant's rubbish from the freight area within
the Demised Premises to the basement of the Building. Tenant shall pay a
private sanitation service to remove Tenant's rubbish from the basement.
48. (a) If the demised premises, or any part thereof, are partially
damaged by fire or other casualty, rent, until such damage is repaired, shall
be apportioned as described in Article 9 of this Lease only to the extent that
the demised premises are rendered untenantable.
(b) In addition to the events described in Article 9(d) of the
Lease, if the repair of any damage to the Building would, in Landlord's
judgment, require an expenditure of more than forty percent of the full
insurable value of the Building immediately prior to the fire or other
casualty, Landlord will have the options given to it pursuant to Article 9,
subsection (d) of the Lease.
49. (a) Tenant, at its sole cost and expense, shall maintain at all
times during the terms of this Lease and at all times when Tenant is in
possession of the demised premises, a comprehensive policy of general
liability insurance in which Landlord, Landlord's managing agent, any Superior
Lessor (as hereinafter defined), any mortgagees designated by Landlord, and
Tenant, are the named insureds, for any and all claims arising during the term
of this Lease for damages or injuries to goods, wares, merchandise and
property and/or for any personal injury or loss of life , in, upon or about
the demised premises; protecting Landlord, Landlord's managing agent, any
Superior Lessor, any mortgagees designated by Landlord, and Tenant against any
liability whatsoever occasioned by accidents on or about the demised premises
or any appurtenances thereto. Such policy is to be written by a good and
solvent insurance company, satisfactory to Landlord, in the amount of One
Million Dollars ($1,000,000) in respect to any one accident; and in the amount
of Five Hundred Thousand Dollars ($500,000) in respect to property damage.
Tenant agrees to deliver to Landlord a certificate of endorsement of the
aforesaid insurance policy and upon Tenant's failure to provide and keep in
force the aforementioned insurance, it shall be regarded as a material
default, entitling Landlord to exercise any or all of the remedies as provided
in this Lease.
(b) Tenant shall deliver to Landlord such policies or
certificates of such policies prior to the commencement of the term of this
Lease. Tenant shall procure and pay for renewals of such insurance from time
to time before the expiration thereof, and Tenant shall deliver to Landlord
and any additional named insureds such renewal policy or certificate at least
thirty (30) days before the expiration of any existing policy. All such
policies shall be for a period of not less than one year and shall contain a
provision whereby the same cannot be cancelled or modified unless Landlord and
any additional named insureds are given at least thirty (30) days' prior
written notice of such cancellation or modification, including, without
limitation, any such cancellation resulting from the nonpayment of premiums.
Landlord shall have the right at any time and from time to time, but not more
frequently than once every year, to require Tenant to increase the amount of
the insurance maintained by Tenant under this Article by no more than ten
percent (10%).
(c) Tenant shall secure an appropriate clause in, or an
endorsement upon, each insurance policy obtained by it and covering or
applicable to the demised premises or the personal property, fixtures, and
equipment located therein or thereon, pursuant to which the insurance company
waives subrogation or permits the insured, prior to any loss, to agree with a
third party to waive any claim it might have against said third party without
invalidating the coverage under the insurance policy. The waiver of
subrogation or permission for waiver of any claim shall extend to Landlord and
its agents and their respective employees.
(d) Tenant shall also obtain, at its own cost and expense,
naming both Landlord, Landlord's managing agent, any Superior Lessor, any
mortgagees designated by Landlord, and Tenant as named insureds, fire
insurance for all Tenant's personal property which may be so affixed to the
realty now located in the leased premises as to be considered part of the
realty under law and including any such future Tenant installations.
(e) Notwithstanding anything herein to the contrary, nothing
herein shall prevent Landlord from recovering in the event of fire or other
loss under Landlord's fire or other insurance coverage for all betterments and
improvements by Tenant so affixed to the demised premises as to be considered
part of the realty under law.
(f) Tenant hereby releases Landlord, Landlord's partners or
principals, disclosed or undisclosed, and its agents and their respective
employees in respect of any claim (including a claim for negligence) which it
might otherwise have against Landlord, Landlord's partners or principals,
disclosed or undisclosed, and its agents and their respective employees for
loss, damage or destruction with respect to Tenant's property by fire or other
casualty (including rental value or business interest, as the case may be)
occurring during the term of this Lease and normally covered under a fire
insurance policy with extended coverage endorsement in the form normally used
in respect of similar property in New York County.
(g) In the event Tenant shall fail to promptly furnish any
insurance herein required, Landlord may, but shall have no obligation to,
effect same and pay the premium therefor for a period not exceeding one
(1) year, and the premium so paid by Landlord shall be payable by Tenant upon
demand as additional rent.
50. Tenant shall give notice to Landlord, in writing, promptly after
Tenant learns of any accident in or about the demised premises. This
notification shall not be deemed to imply or impose any liability upon
Landlord relating to such accident.
51. Tenant agrees, at any time and from time to time, as requested
by Landlord, upon not less than ten (10) days' prior notice, to execute and
deliver a statement 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
as modified and stating the modifications), certifying the dates to which the
rent and additional rent have been paid, and stating whether or not, to the
best knowledge of Tenant, Landlord is in default in performance of any of its
obligations under this Lease, and, if so, specifying each such default of
which Tenant may have knowledge, and stating whether or not, to the best
knowledge of Tenant, any event has occurred which with the giving of notice or
passage of time, or both, would constitute such a default, and if so,
specifying each such event, it being intended that any such statement
delivered pursuant hereto shall be deemed a representation and warranty to be
relied upon by Landlord and by others with whom Landlord may be dealing,
regardless of independent investigation.
52. (a) This Lease, and all rights of Tenant hereunder, are and shall
be subject and subordinate to a certain ground lease of the property of which
the lease premises are a part, and all renewals, extensions, modifications and
replacements thereof, and to all mortgages which may now or hereafter affect
the property of which the demised premises are a part and/or any of such
leases, whether or not such mortgages shall also cover other lands and/or
buildings and/or leases, to each and every advance made or hereafter to be
made under such mortgages, and to all renewals, modifications, replacements
and extensions of such leases and such mortgages and all consolidations of
such mortgages. The foregoing shall not apply to any fee mortgage which is
subordinate to such ground lease. This Section shall be self-operative and no
further instrument of subordination shall be required. In confirmation of
such subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, the lessor under any such lease or the holder of any
such mortgage or any of their respective successors in interest may reasonably
request to evidence such subordination. Any lease to which this Lease is, at
the time referred to, subject and subordinate, is herein called "Superior
Lease" and the lessor of a Superior Lease or its successor in interest, at the
time referred to, is herein called "Superior Mortgage" and ,the holder of a
Superior Mortgage is herein called "Superior Mortgagee".
(b) If any Superior Lessor or Superior Mortgagee or the nominee
or designee of any or Superior Lessor or Superior Mortgagee shall succeed to
the rights of Landlord under this Lease, whether through possession or
foreclosure action or delivery of a new lease or deed, or otherwise, then at
the request of such party so succeeding to Landlord's rights (herein called
"Successor Landlord") and upon such Successor Landlord's written agreement to
accept Tenant's attornment, Tenant shall attorn to and recognize such
Successor Landlord as Tenant's Landlord under this Lease and shall promptly
execute and deliver any instrument that such Successor Landlord may reasonably
request to evidence such attornment. Upon such attornment, this Lease shall
continue in full force and effect as a direct lease between the Successor
Landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in this Lease, except that the Successor Landlord shall not be (i)
liable in any way to Tenant for any act or omission, neglect or default on the
part of Landlord under this Lease, (ii) responsible for any monies owning by
or on deposit with Landlord to the credit of Tenant, except to the extent
turned over to the Successor Landlord, (iii) subject to any counterclaim or
set off which theretofore accrued to Tenant against Landlord, (iv) bound by
any previous modification of this Lease or by any previous prepayment of fixed
rent for more than one (1) month, which was not approved in writing by the
Superior Lessor or the Superior Mortgagee thereto or by reason of which the
Successor Landlord shall have succeeded to the rights of Landlord under this
Lease, (v) liable to Tenant beyond the Successor Landlord's interest in the
property of which the demised premises are a part and the rents, income,
receipts, revenues, issues and profits issuing from such property, (vi)
responsible for the performance of any work to be done by Landlord under this
Lease to render the demised premises ready for occupancy by Tenant, or (vii)
required to remove any person occupying the demised premises or any part
thereof, except if such person claims by, through, or under the Successor
Landlord.
53. Tenant shall look only to Landlord's estate and property in the
Building for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by
Landlord in the event of any default or breach by Landlord hereunder, and no
other property or assets of Landlord or its partners or principals, disclosed
or undisclosed, shall be subject to lien, levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to
this Lease, the relationship of Landlord and Tenant hereunder or Tenant's use
or occupancy of the demised premises; and if Tenant shall acquire a lien on
such other property or assets by judgment or otherwise, Tenant shall promptly
release such lien by executing and delivering to Landlord an instrument to
that effect prepared by Landlord.
54. If Tenant shall request Landlord's approval or consent and
Landlord shall fail or refuse to give such approval or consent, Tenant shall
not be entitled to any damages for any withholding or delay of such approval
or consent by Landlord, it being intended that Tenant's sole remedy shall be
an action for injunction or specific performance (the rights to money damages
or other remedies being hereby specifically waived), and that such remedy
shall be available only in those cases where Landlord shall have expressly
agreed in writing not to unreasonably withhold its consent or approval or
where as a matter of law Landlord may not unreasonably withhold its consent or
approval.
55. Tenant shall and hereby does waive its right and agrees not to
interpose any counterclaim or set off, of whatever nature or description, in
any non-payment, dispossess or hold-over proceeding which may be instituted by
Landlord against Tenant to recover rent, additional rent or other charges
arising out of or in any way connected with this Lease, or any renewal,
extension, holdover, or modification thereof, ,the relationship of Landlord
and Tenant, or Tenant's use or occupancy of said premises. This clause, as
well as the "waiver of jury trial" provision of this Lease, shall survive the
expiration, early termination, or cancellation of this Lease or the term
thereof. Nothing herein contained, however, shall be construed as a waiver of
Tenant's right to commence a separate action on a bona fide claim against
Landlord.
56. (a) If Tenant is in arrears in payment of rent or additional
rent, Tenant waives Tenant's right, if any, to designate the items against
which any payments made by Tenant are to be credited, and Tenant agrees that
Landlord may apply any payments made by Tenant to any items Landlord sees fit,
irrespective of and notwithstanding any designation or request by Tenant as to
the items against which any such payment shall be credited.
(b) No payment by Tenant or receipt by Landlord of a lesser
amount than any installment or payment of Rent due shall be deemed to be other
than on account of the amount due, and no endorsement or statement on any
check or payment of Rent shall be deemed an accord and satisfaction. Landlord
may accept such check or payment without prejudice to Landlord's right to
recover the balance of such installment or payment of Rent, or pursue any
other remedies available to Landlord.
(c) In case Tenant shall default in the payment of any fixed
rent, percentage rent, additional rent or any other charge payable hereunder
by Tenant to Landlord on any date upon which the same becomes due, and such
default shall continue for 10 (ten) days after Landlord shall have given to
Tenant a notice of intention to end the term of this Lease at the expiration
of 5 (five) days from the date of the giving of such notice, and, in the event
such notice is given, this Lease and the term and estate hereby granted
(whether or not the term shall theretofore have commenced) shall expire and
terminate upon the expiration of said five (5) days with the same effect as if
that day were the date hereinbefore set for the expiration of the term of this
Lease, but Tenant shall remain liable for damages as provided in Article 18
hereof.
57. Landlord, at Landlord's option, shall have the right, when Tenant
is in default in the payment of rent or additional rent, to demand payment by
certified, bank or teller's check or by postal money order.
58. In the event any payment under this Lease shall be made in the
form of a check from any other person, firm or corporation other than the
person, firm or corporation named in this Lease, the acceptance of same by
Landlord shall not, under any circumstances, be deemed recognition of a
subletting or an assignment of this Lease, regardless of the number of times
that such payment shall be made by such other person, firm or corporation.
59. If, at the request of and as an accommodation to Tenant, Landlord
shall place upon such directory board, as Landlord may from time to time
maintain in the lobby of the Building, one or more names of persons, firms or
corporations other than Tenant, this shall not be deemed to operate as an
attornment to Landlord or as a consent by Landlord to an assignment or
subletting by Tenant of all or any portion of the demised premises to such
persons, firms or corporations.
60. If, in connection with obtaining financing for the Building, a
bank, insurance company or other lending institution shall request reasonable
modifications in this Lease as a condition to such financing, Tenant will not
unreasonably withhold, delay, or defer it's consent thereto, provided that
such modifications do not increase the obligations of Tenant hereunder or
materially adversely affect the leasehold interest hereby created.
61. Deleted prior to execution.
62. If Tenant shall fail to pay all or any part of any instalment of
fixed annual rent or additional rent for more than three (3) days after the
same shall have become due and payable, Tenant shall pay as additional rent
hereunder to Landlord a late charge of six (6) cents for each dollar of the
amount of such fixed annual rent or additional rent which shall not have been
paid to Landlord within such three (3) days after becoming due and payable.
Tenant may give its monthly rent payments to building employees for delivery
to the Landlord. Such delivery to building employees shall be deemed delivery
to Landlord.
63. (a) Tenant agrees it shall indemnify and save Landlord harmless
against all costs, claims, loss or liability resulting from delay by Tenant in
surrendering the demised premises upon the expiration of this Lease,
including, without limitation, any claims made by any succeeding tenant
founded on such delay.
(b) The parties recognize and agree that the damage to Landlord
resulting from any failure by Tenant timely to surrender the demised premises
will be substantial, will exceed the amount of monthly rent theretofore
payable hereunder, and will be impossible of accurate measurement. Tenant
therefore agrees that if possession of the demised premises is not surrendered
to Landlord within two 2 days after the date of the expiration of the term of
this Lease (December 31, 2001), then Tenant will pay Landlord, as liquidated
damages for each month and pro rata for each portion of any month during which
Tenant holds over in the demised premises after expiration of the term of this
Lease, sum equal to two times the average rent and additional rent which was
payable per month under this Lease during the last six months of the term
hereof.
(c) The provisions of paragraphs (a) and (b) above are
independent of one another and Tenant agrees that payments made pursuant to
paragraph (b) shall not in any way reduce Tenant's obligation to indemnify
Landlord pursuant to paragraph (a). The payments required to be made by
Tenant pursuant to paragraphs (a) and (b) above shall be (i) payable on demand
and (ii) without prejudice to any of Landlord's rights and remedies hereunder
at law or in equity for Tenant's delay in surrendering the demised premises in
accordance with the terms of this Lease upon the expiration of this Lease.
64. In the event the rent or additional rent or any part thereof
provided to be paid by Tenant under the provisions of this Lease shall become
uncollectible or shall be reduced or required to be reduced or refunded by
virtue of any Federal, State, County or City law, order or regulation, or by
any direction of a public officer or body pursuant to law, or the orders,
rules, codes, or regulations of any organization or entity formed pursuant to
law, whether such organization or entity be public or private, then Landlord,
at its option, may at any time thereafter terminate this Lease, by not less
than thirty (30) days' written notice to Tenant, on a date set forth in said
notice, in the date fixed in said notice as if the said date were the date
originally fixed herein for the termination of this Lease. Landlord shall not
have the right to terminate this Lease if Tenant within such period of thirty
(30) days shall, in writing, lawfully agree that the rental and additional
rent herein reserved is a reasonable rental and additional rental, and agrees
to continue to pay such rental and additional rental and if such agreement by
Tenant shall then be legally enforceable by Landlord.
65. Any default by Tenant under any other lease of space in the Building
shall be deemed a default of the same nature under this Lease.
66. Any obligation of Tenant which can only be, or which, by the
provisions of the Lease, may be performed after the expiration or earlier
termination of this Lease, and Tenant's liability to make any payment which is
allocable to any period ending at the time of expiration or termination of
this Lease, shall, unless expressly otherwise provided in this Lease, survive
the expiration or termination of this Lease.
67. Tenant covenants, represents and warrants that Tenant has had no
dealings or negotiations with any broker or agent other than Plymouth
Partners, LTD. in connection with the negotiation or consummation of this
Lease, and Tenant covenants and agrees to pay, hold harmless and indemnify
Landlord from and against any and all cost, expense (including, without
limitation, attorneys' fees and expenses) or liability for any compensation
with respect to this Lease or the negotiation thereof. Landlord agrees to
compensate Plymouth Partners, LTD. pursuant to a separate agreement.
68. This Lease shall not be binding upon Landlord unless and until
(a) it has been duly executed by Landlord and delivered by Landlord to Tenant
and (b) Tenant has paid to Landlord the security deposit, prepaid rent and
first months' rent as provided for in this Lease by certified check, bank
check or other collected funds.
69. (a) Landlord and Tenant acknowledge that Tenant has paid
$16,250.00 upon the execution of this Lease representing payments toward the
third, fifty-ninth and sixtieth monthly installments of fixed rent due
hereunder (hereinafter "Prepaid Rent").
(b) (i) In the event that Tenant shall default in the payment of
rent or additional rent and such default shall continue beyond any grace
periods provided in this Lease, then in that event, Landlord at its option may
apply all or any part of the Prepaid Rent in satisfaction of all or any part
of such default (hereinafter "Default Amount").
(ii) Within ten days of Landlord's written notice to Tenant that
Landlord has applied all or any part of Prepaid Rent in satisfaction of a
default, Tenant shall pay to Landlord, the Default Amount. Upon receipt of
the Default Amount, Landlord shall reinstate as Prepaid Rent the full value of
the Default Amount received, which shall be applied to the last monthly
installments of fixed rent due under this Lease in accordance with the
provisions of Article 69(a).
(iii) Tenant's failure to promptly pay the Default Amount to
Landlord shall constitute a default of a substantial obligation of this Lease
and the sums due hereunder shall be deemed additional rent under the terms of
this Lease.
70. Tenant expressly acknowledges and agrees that Landlord has not
made and is not making, and Tenant, in executing and delivering this Lease, is
not relying upon any warranties, representations, promises or statements,
except to the extent that the same are expressly set forth in this Lease.
71. Irrespective of the place of execution or performance, this Lease
shall be governed by and construed in accordance with the laws of the State of
New York. If any provision of this Lease or the application thereto to any
person or circumstances for any reason and to any extent, be invalid or
unenforceable, the remainder of this Lease and the application of that
provision to other persons or circumstances shall not be affected but rather
shall be enforced to the extent permitted by law. This Lease shall be
construed without regard to any presumption or other rule requiring
construction against the party causing this Lease or any part thereof to be
drafted. Each covenant, agreement, obligation, or other provision of this
Lease on Tenant's part to be performed shall be deemed and construed as a
separate and independent covenant of Tenant, not dependent on any other
provision of this Lease. All terms and words used in this Lease, regardless
of the number or gender in which they are used, shall be deemed to include any
other number and any other gender as the content may require.
72. Tenant understands and agrees that no changes in or to the
demised premises, of whatever nature, may be made without the prior written
consent of Landlord. Subject to the prior written consent of Landlord, and
the provisions of Article 3 of the Lease, Tenant understands and agrees that
all work to be done in or to the demised premises shall be performed in
accordance with the rules and regulations listed in Exhibit B of the Lease.
Landlord reserves the right at any time during the terms of this Lease to make
reasonable changes to the rules and regulations which Landlord believes are
necessary.
73. The Demised Premises comes equipped with an air conditioning
system which is in working order. Throughout the term of this Lease, Tenant
at Tenant's sole cost and expense shall maintain the air conditioning system
in working order and shall provide a maintenance and service contract for the
air conditioning system throughout the Demised Premises. Landlord reserves
the right to purchase such a service contract at Tenant's sole cost and
expense in the event that Tenant fails to provide a service contract as herein
required.
74. (a) Supplementing Article 11 of this Lease, Tenant, if it
requests Landlord's consent to an assignment of this Lease or a subletting of
all or any part of the demised premises, shall submit to Landlord in writing a
counterpart of the proposed assignment or subleasing agreement and the name of
the proposed assignee or subtenant, the name and character of its business,
the terms of the proposed assignment or sublease, such information as to its
financial responsibility and standing and any other information as Landlord
may reasonably require. Upon the receipt of such request and information from
Tenant, Landlord shall have an option, to be exercised in writing within
thirty (30) days after such a receipt, to cancel and terminate this Lease, if
the request is to assign this Lease or to sublet all or substantially all of
the demised premises, or if the request is to sublet a portion of the demised
premises only, to cancel and terminate this Lease with respect to such
portion, in each case as of the date set forth in Landlord's notice of
exercise of such option, which shall be not less than sixty (60) days
nor more than one hundred twenty (120) days following the service of such
notice.
(b) If Landlord shall exercise such option, Tenant shall
surrender possession of the entire demised premises, or the portion which is
the subject of the option, as the case may be, on the date set forth in such
notice in accordance with the provisions of this Lease relating to surrender
of the demise premises at the expiration of the term. If the Lease shall be
cancelled as to a portion of the demised premises only, the rent and
additional rent payable by Tenant under this Lease shall be abated
proportionately according to the ratio that the rentable area in the portion
of the space surrendered bears to the rentable area of the entire demised
premises.
(c) If Landlord shall not exercise the option to cancel the
Lease in whole or in part as above provided, and Tenant is not in default
hereunder, then Landlord's consent to such request shall not be unreasonably
withheld or delayed, provided that:
(i) The proposed assignee or subtenant shall use the demised
premises, or the relevant part thereof, solely for the purposes enumerated in
Article 2A of this Lease and, the Landlord's reasonable judgement the proposed
assignee or subtenant is engaged in a business and the demised premises, or
the relevant part thereof, will be used in a manner which (a) is in keeping
with the then standards of the Building and (b) will not violate any negative
covenant as to use contained in any other lease of space in the Building;
(ii) The proposed assignee or subtenant is a reputable person
of good character and with sufficient financial worth considering the
responsibility involved, and Landlord has been furnished with reasonable proof
thereof;
(iii) Neither (a) the proposed assignee or subtenant nor (b) any
person which, directly or indirectly, controls is controlled by, or is under
common control with, the proposed assignee or subtenant or any person who
controls the proposed assignee or subtenant, is then an occupant of any part
of the Building;
(iv) The proposed assignee or subtenant is not a person with whom
Landlord is then negotiating the lease of space in the Building;
(v) The form of the proposed sublease or assignment shall be in
form reasonably satisfactory to Landlord and shall comply with the applicable
provisions of this Article;
(vi) There shall not be more than two (2) subtenants in the
demised premises;
(vii) Tenant shall not have (a) advertised or publicized in any
way the availability of the demised premises without prior notice to and
approval by Landlord, nor shall any advertisement state the name (as
distinguished from the address) of the Building or the proposed rental, (b)
listed the demised premises for subletting, whether through a broker, agent,
representative, or otherwise at a rental rate less than the lesser of (1) the
fixed rent and additional rent then payable hereunder for such space, or (2)
the fixed rent and additional rent at which Landlord is then offering to lease
comparable space in the Building.
(d) In no event shall any assignment or subletting to which
Landlord may have or may not have consented, release Tenant from its
obligations under this Lease, nor constitute consent to further assignment or
subletting.
(e) If Landlord shall consent to any proposed assignment or
sublease, or shall decline to give its consent to any proposed assignment or
sublease, or if Landlord shall exercise any of its options under paragraph (a)
of this Article, Tenant shall indemnify, defend and hold harmless Landlord
against and from any and all loss, liability, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
resulting from any claims that may be made against Landlord by the proposed
assignee or subtenant or by any brokers or other persons claiming a commission
or similar compensation in connection with the proposed assignment or
sublease.
(f) If this Lease is assigned and Landlord consents to such
assignment, any change, alternation or modification of this Lease after such
assignment which shall have the effect of increasing or enlarging Tenant's
obligation or responsibility under this Lease shall not, to the extent only of
such increases or enlargement, be binding upon Tenant and not withstanding
such change, alteration or modification, Tenant shall remain liable for the
performance of Tenant's obligations under this Lease except for any such
change, alteration or modification.
(g) Upon submitting its request to Landlord, Tenant shall
enclose an additional months rent, to be held by Landlord as additional
prepaid rent pursuant to 1, Article 69 of this Lease. If Landlord fails to
give its consent or exercises its option pursuant to paragraph (a) of this
Article, Landlord will return the additional prepaid rent to Tenant.
(h) With respect to each and every sublease or subletting authorized
by Landlord under the provisions of this Lease, it is further agreed:
(i) No subletting shall be for a term ending later than one (1)
day prior to the expiration date of this Lease.
(ii) No sublease shall be valid, and no subtenant shall take
possession of the demised premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Landlord.
(iii) Each sublease shall provide that it is subject and
subordinate to this Lease and to the matters to which this Lease is or shall
be subordinate, and that in the event of termination, re-entry or dispossess
by Landlord under this Lease Landlord may, at its option, take over all the
right, title and interest of Tenant, as sublessor under such sublease, and
such subtenant shall, at Landlord's option, attorn to Landlord pursuant to the
then executory provisions of such sublease, except that Landlord shall not (a)
be liable for any previous act or omission of Tenant under such sublease, (b)
be subject to any offset, not expressly provided in such sublease, which
theretofore accrued, to such subtenant against Tenant, or (c) be bound by any
previous modification of such sublease or by any previous prepayment of more
than one month's rent.
(iv) In the event that (a) Landlord fails to exercise its option
under paragraph (a) of this Article and consents to a proposed assignment or
sublease, and (b) Tenant fails to execute and deliver the assignment or
sublease to which Landlord consented within sixty (60) days after the giving
of such consent, then Tenant shall again comply with all of the provisions and
conditions of paragraph (a) of this Article before assigning this Lease or
subletting all or part of the demised premises.
(j) If Landlord exercises its option to terminate this Lease in
part in any case where Tenant desire to sublet part of the demised premises,
then Tenant shall pay to Landlord, upon demand, the reasonable costs incurred
by Landlord in physically separating such part of the demised premises from
the balance of the demised premises and in complying with any laws and
requirements of any public authorities and insurance bodies relating to such
separation. Such costs shall not include costs to alter the current
certificate of occupancy for the Building.
(k) If Landlord shall give its consent to any assignment of this
lease or to any sublease, Tenant shall in consideration therefor pay to
Landlord, as additional rent:
(i) in the case of an assignment, an amount equal to all sums
and other considerations paid to Tenant by the assignee for or by reason of
such assignment (including, but not limited to, sums paid for the sale or
rental of Tenant's fixtures, leasehold improvements, equipment, furniture,
furnishings or other personal property, less the then net unamortized or
undepreciated cost of any such fixtures, improvements, equipment, furniture,
furnishings and other personal property which remain in the demised premises
after such assignment, determined on the basis of Tenant's federal income tax
returns); and
(ii) in the case of a sublease, any rents, additional charges or
other considerations payable under the sublease to Tenant by the subtenant
which is in excess of the fixed rent and additional rent accruing during the
term of the sublease in respect of the subleased space (at the rate per square
foot payable by Tenant hereunder) pursuant to the terms hereof (including, but
not limited to, sums paid for the sale of rental or Tenant's fixtures,
leasehold improvements, equipment, furniture or other personal property, less
the then net unamortized or undepreciated cost of any such fixture,
improvements, equipment, furniture, furnishings and other personal property
which remain in the subleased space during the term of such sublease,
apportioned to the term thereof and determined on the basis of Tenant's
federal income tax returns). The sum payable under this paragraph shall be
paid to Landlord as and when payable by the subtenant to Tenant.
75. Deleted prior to execution.
76. Supplementing Article 3 and Exhibit B hereof, Landlord shall not
unreasonably withhold or delay its consent to any change or alteration, which
(i) does not adversely affect the structure of the building in which the
demised premises are located or adversely affect the building's utility
services, plumbing or electrical lines and (ii) cannot be seen from the
exterior of the building in which the demised premises are located.
77. Landlord warrants to Tenant that the Demised Premises may be
lawfully used for the use specified in this Lease.
78. Landlord agrees that any expenditures made pursuant to Article 19
shall be reasonable.
79. Landlord hereby warrants to Tenant that the Superior Lease has a
remaining term longer than the term of this Lease.
80. Supplementing Articles 9 and 48, in the event the Demised
Premises are rendered partially or wholly unusable, Tenant shall have the
option to cancel and terminate this Lease if (a) the Premises are not restored
within 90 days of the date of casualty or (b) if Landlord notifies Tenant that
it will be unable to restore the Premises within 90 days of the date of
casualty. If Tenant elects to terminate or cancel the Lease, Tenant must
notify Landlord of its [text missing from original] to occur of (a) the date
on which Landlord notified Tenant in writing that it will be unable to restore
the Demised Premises within 90 days of the date of casualty or (b) the date
that occurs 90 days after the date of casualty. In the event Tenant gives
such notice to Landlord, the Lease will end on a date 5 days after Tenant's
notice to Landlord. Tenant shall receive from Landlord any rent or additional
rent prepaid by Tenant for any period after the last day of the Lease as such
date is determined by Tenant's termination notice to Landlord. Landlord and
Tenant shall each have the right to cancel the Lease if such casualty occurs
in the last year of the lease, upon 30 days written notice by the other party,
provided such notice is given within 30 days of such casualty.
81. Deleted prior to execution.
EXHIBIT B
1. Tenant, at its sole cost and expense, shall cause to be prepared
complete finished and detailed architectural and engineering drawings and
mechanical plans ("Tenant's Plans") including all dimensions and
specifications for all improvements and other work to be performed in the
demised premises ("Tenant's Work"). Tenant's Plans shall be prepared by a
licensed architect, shall comply with all applicable laws, statutes,
ordinances, orders, rules, regulations and requirements of all federal, state
and municipal governments, and the appropriate agencies, officers,
departments, boards and commissions thereof, applicable to the demised
premises or the building in which the demised premises are located
("Building"). Tenant's Plans, together with the name of the contractor who
shall perform Tenant's Work and a true copy of the contract covering Tenant's
Work, shall be delivered to Landlord for approval. If Landlord shall have
grounds for withholding its approval of Tenant's Plans and/or Tenant's
contractor, Landlord shall notify Tenant as to such grounds and within fifteen
days after Landlord's notice is given, Tenant shall amend Tenant's Plans
accordingly and/or substitute a new contractor and deliver the amended plans
and/or the name of the new contractor to Landlord for approval. The same
procedure as for the original Tenant's Plans and Tenant's contractor shall be
applicable to any amendments of Tenant's Plans and/or the substitution of a
new contractor under the preceding sentence. If Tenant's Plans and Tenant's
contractor have been approved by Landlord, they shall not be changed without
Landlord's consent. Tenant shall pay to Landlord upon demand the reasonable
costs and expenses of Landlord in (i) reviewing Tenant's Plans and each
amendment thereof and (J) inspecting Tenant's Work, including, without
limitation, the fees of any architect or engineer employed by Landlord for
such purpose. Any review or approval by Landlord of Tenant's Plans is solely
for Landlord's benefit and without any representation or warranty whatsoever
to Tenant with respect to the adequacy, correctness or efficiency thereof or
otherwise.
2. Tenant, at its sole cost and expense, shall (i) cause Tenant's Plans to
be filed, if filing is required by law, with the appropriate governmental
authorities or agencies having jurisdiction thereover and (ii) promptly obtain
all necessary certificates for the final approval of Tenant's Work, including,
without limitation, certificates of occupancy, both temporary and permanent,
if necessary.
3. No Tenant's Work shall be commenced unless all required municipal and
other governmental permits, authorizations and approvals shall have been
obtained by Tenant, at its sole cost and expense, and unless the originals
thereof (or true copies thereof if such originals are required by law to be
kept on the demised premises) shall have been delivered to Landlord. Landlord
shall, upon the written request of Tenant, execute any documents necessary to
be signed by Landlord to obtain any such permits, authorizations and
approvals, provided and upon condition that same shall be without cost,
liability or expense to Landlord.
4. All Tenant's Work shall be done under the supervision of a licensed
professional engineer or architect. If Tenant's Work includes any electrical
work such electrical work shall be performed by a licensed electrician. If
Tenant's Work includes any plumbing work such plumbing work shall be performed
by a licensed plumber.
5. No Tenant's Work shall be commenced unless Tenant shall have delivered
to Landlord a performance bond and a labor and material payment bond in an
amount equal to the contract price for Tenant's Work issued by a corporate
surety licensed to do business in the State of New York in favor of Landlord.
The corporate surety and the form and substance of such bonds shall be
reasonably satisfactory to Landlord.
6. Tenant, at its sole cost and expense, shall perform or cause to be
performed all repairs, restorations, building, rebuilding, alterations and
other work shown in Tenant's Plans.
7. Tenant's Work shall be performed in a first-class workmanlike manner
and in accordance with (i) all laws, statutes, ordinances, orders, rules,
regulations and requirements of all federal state and municipal governments,
and the appropriate agencies, offices, departments, boards and commissions
thereof, whether now or hereafter in force, applicable to the demised
premises, (ii) all insurance requirements, whether now or hereafter in force,
(iii) Tenant's Plans, (iv) the plans for the Buildings referred to above and
(v) all of the other provisions of this Exhibit and this Lease.
8. All Tenant's Work shall be commenced promptly after Tenant receives the
required approvals and shall be performed with due diligence. In no event
shall Tenant's Work delay or interfere with the performance of work to be done
by Landlord elsewhere in the Building. If in Landlord's judgment such delay
or interference shall exist, Tenant shall promptly discontinue Tenant's Work
until the work being done by Landlord which was delayed or interfered with
shall have been completed. Tenant shall pay for all of the Tenant's Work
promptly, in cash, so that the demised premises, the Building, and the
interests therein of Landlord and Tenant shall at all times be free from any
possible (a) liens for labor performed or claimed to have been performed or
materials supplied or claimed to have been supplied and (b) chattel mortgages,
conditional sales, contracts, title retention agreements, security interests
and agreements, financing agreements, financing statements and any similar
agreements (collectively "Liens").
9. If any Liens shall at any time be recorded or filed against the demised
premises, the Building, or the interests therein of Landlord or Tenant as a
result of or arising out of Tenant's Work, Tenant shall cause the same to be
discharged of record within ten days after the notice of the recording or
filing of the same, by either payment deposit or bond. If Tenant shall fail
to cause any Lien to be discharged of record within such period, Landlord
shall have the right (in addition to all other remedies), but not the
obligation, to cause the discharge of such Lien of record either by paying the
amount claimed to be due, by deposit in court or by bond. Tenant shall
reimburse Landlord upon demand as additional rent for any amount paid or
deposited by Landlord therefore (including, without limitation, all incidental
costs and expenses, attorneys' fees, bond premiums and any other sums required
to be paid to a surety) in connection therewith, together with interest on all
such amounts at the rate of one and one-half percent per calendar month or
part thereof, or the then maximum lawful interest rate, whichever shall be
less, from the date of payment or deposit by Landlord.
10. Nothing contained in this paragraph shall be deemed to be, or
construed in any way as constituting, the consent or request of Landlord to
any person for the performance of any labor or the furnishing of any materials
at or to the demised premises or the Building, or any part thereof, nor as
giving Tenant any right, power or authority to contract for or permit the
performance of any labor or the furnishing of any material which might give
rise to the right to record or file any Lien against the demised premises, the
Building or any part thereof or against the interests therein of Landlord or
Tenant, it being intended that all persons who may perform any labor or
furnish any materials to Tenant at the demised premises shall look only to the
credit of Tenant and such security as Tenant may furnish to such persons for
the payment of all such labor and materials, and that Landlord does not
consent to the recording or filing of any Lien against the interest or estate
of Landlord in the demised premises or the Building.
11. At all times when any Tenant's Work is in progress, Tenant shall, in
addition to the insurance required to be maintained by Tenant as elsewhere
provided in this Lease, maintain or cause to be maintained (a) worker's
compensation insurance covering all persons employed in connection with
Tenant's Work, in an amount at least equal to the minimum amount of such
insurance required by law and (b) such builder's risk (completed value forms)
or similar insurance in respect of the demised premises as Landlord may
reasonably require, naming Landlord, Landlord's managing agent, and any
Superior Lessor and any mortgagee designated by Landlord on such policy or
policies as their interests may appear. Tenant shall deliver to Landlord such
fully paid for policies (or certificates thereof), together with proof of
payment, at least ten days prior to the commencement of any Tenant's Work.
Such policies shall (x) be issued by companies satisfactory to Landlord, (y)
contain a provision whereby the same cannot be cancelled unless Landlord and
any additional named insureds are given at least 30 days' prior written notice
of such cancellation and (z) include a clause or endorsement whereby the
insurer waives any rights of subrogation against Landlord.
12. Tenant shall pay, and shall indemnify and hold harmless Landlord from
and against, any and all claims, liabilities, losses, damages, expenses and
costs (including, without limitation, attorneys' fees), obligations and
charges of every kind and nature whatsoever, which shall arise out of, result
from or be incurred in connection with Tenant's Work. Landlord shall have no
obligation whatsoever during the term of this Lease to make any repairs,
changes, alterations or replacements, structural or otherwise, in or to the
demised premises or to the utility, heating, air-conditioning, electrical and
plumbing systems servicing the demised premises which shall arise out of or
result from the performance of Tenant's work or any defects therein. Tenant
shall, at its sole cost and expense, make or cause to be made any such
repairs, changes, alterations or replacements whether such repairs, changes,
alterations or replacements are required to be made to the demised premises or
elsewhere in the Building.
Exhibit 10.5
GUARANTY
THIS GUARANTY, made this day of December, 1996, by Princeton Media
Group, Inc. ("Guarantor"); located at 14411 Commerce Way, The Shula Bldg.,
Suite 420, Miami Lakes, Florida 33016.
WITNESSETH:
WHEREAS, Princeton Publishing, Inc., a New York Corporation ("Lessee"),
is about to enter into a lease of even date herewith (the "Lease"), among 12
West 27th Street Associates, as lessor ("Lessor"), and Lessee, as Lessee, of
certain premises in the building located at and known as 12 West 27th Street,
New York, New York and more particularly described in the Lease; and
WHEREAS, Lessor is unwilling to enter into the Lease unless Guarantor
executes and delivers this Guaranty.
NOW, THEREFORE, in order to induce Lessor to enter into the Lease and for
$1.00 and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Guarantor agrees with Lessor as follows:
1. Guarantor unconditionally guarantees the due and punctual payment
by Lessee of all fixed rent, additional rent and other charges and the
performance and observance of all of the terms, covenants and conditions of
the Lease to be paid, performed and observed by Lessee during the term of the
Lease.
2. If, at any time during the term of the Lease, default shall be
made by Lessee in the payment of any fixed rent, additional rent or other
charges due under the Lease, Guarantor shall forthwith upon demand pay the
same, as the case may be, in the place and stead of Lessee.
3. Any act of Lessor, or the successors or assigns of Lessor,
consisting of a waiver of any of the terms or conditions of the Lease, or the
giving of any consent to any matter or thing relating to the Lease, or the
granting of any indulgences or extensions of time to Lessee, may be done
without notice to or consent from Guarantor, and without releasing any
obligations of Guarantor hereunder. Guarantor also waives notice of acceptance
of this Guaranty and notice of any default or defaults under the Lease by
Lessee.
4. The obligations of Guarantor hereunder shall not be released by
Lessor's receipt, application or release of any security given for the
payment, performance and observance of any covenant or condition in the Lease;
nor by any modification of the Lease, but in the case of any such modification
the liability of Guarantor shall be deemed modified in accordance with the
terms of any such modification.
5. The liability of Guarantor hereunder shall in no way be affected
by (a) the release or discharge of Lessee in any Creditor's, receivership,
bankruptcy or other proceedings, (b) the impairment, limitation or
modification of the liability of Lessee or its estate in bankruptcy, or of any
remedy for the enforcement of Lessee's liability under the Lease, resulting
from the operation of any present or feature provision of the U.S. Bankruptcy
Act or other statute or from the decision of any court; (c) the rejection or
disaffirmance of the Lease in any such proceedings, unless such rejection or
disaffirmance relates solely to a specific matter of performance or payment
which would be illegal, (d) the assignment or transfer of the Lease by Lessee,
unless the Assignee delivers to Landlord a guaranty in a form similar to this
Guaranty from a third party which in Landlord's reasonable judgment provides a
guaranty reasonably similar in value to that of Guarantor; or (c) any
disability or other defense of Lessee (other than a defense by or available to
Lessee under, by virtue of or pursuant to the Lease).
6. Until all the covenants and conditions in the Lease on Lessee's
part to be paid, performed and observed during the term of the Lease are fully
paid, performed and observed, Guarantor will subordinate any liability or
indebtedness of Lessee now or hereafter held by Guarantor to the obligations
of Lessee to Lessor under the Lease.
7. Lessor may, at its option, join Guarantor as a party in any
action, suit or proceeding commenced against Lessee for the non-payment of
fixed rent, additional rent or other charges. In any event, (a) judgment is
also taken or had against Lessee, and (b) this Guaranty may be enforced
against Guarantor without first proceeding against Lessee.
8. Guarantor agrees that if judgment shall be entered against
Guarantor in any action, suit or proceeding to enforce this Guaranty,
Guarantor will reimburse Lessor for all reasonable costs and expenses incurred
by Lessor in connection therewith, including, without limitation, reasonable
counsel fees.
9. Guarantor and Lessor each waive trial by jury of any and all
issues arising in any action, suit or proceeding tow hich Lessor and Guarantor
may be parties upon, under or connected with this Guaranty or any of its
provisions, directly or indirectly.
10. The obligations of Guarantor under this Guaranty shall be
absolute and unconditional, shall not be subject to any counterclaim, set-off,
deduction or defense based upon claim Guarantor may have against Lessor and
shall remain in full force and effect without regard to, and shall not be
released, discharged or terminated or in any other way affected by, any
circumstance or condition (whether or not Guarantor shall have any knowledge
or notice thereof), including, without limitation: (a) any amendment,
modification, extension or renewal of the Lease (except that the liability of
Guarantor hereunder shall be deemed to apply to the Lease as so amended,
modified, extended or renewed); (b) any exercise or non-exercise by Lessor of
any right, power or remedy under or in respect of the Lease, or any waiver,
consent, indulgence or other action, inaction or omission under or in respect
of the Lease; (c) a sale, sublease, surrender, forfeiture, re-entry, reletting
or other transfer in respect of the Lease or any or all of or any interest in
the building of which the demised premises are a part by Lessor or Lessee; (d)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding involving or affecting
Lessee or Lessor or their properties or creditors, or any action taken with
respect to the Lease, by any trustee or receiver of Lessor or Lessee, or by
any court, in any such proceeding; (e) any limitation on the liability or
obligations of Lessee under the Lease, or any invalidity or unenforceability,
in whole or in part, of any obligation of Lessee under the Lease or of any
term of the Lease; or (f) any transfer by Guarantor of any or all of the
capital stock of Lessee.
11. Guarantor at its expense will execute, acknowledge and deliver
all such instruments and take all such action as lessor from time to time may
reasonably request for the assuming to Lessor the full benefits intended to be
created by this Guaranty.
12. This Guaranty shall continue in full force and effect throughout
the Guaranty Period and thereafter so long as any obligation or liability of
Lessee provided for in the Lease shall remain unperformed or unsatisfied
(whether or not the Lease shall have terminated).
13. Any notice or other communication hereunder shall be in writing
and shall be deemed duly served if mailed by registered or certified mail in
any United States post office station or letter box, addressed if to Guarantor
to it at the address of Guarantor set forth herein or such other address as
Guarantor shall last designated by notice to Lessor, and addressed it to
Lessor to it at 30 West 26th Street, 8th floor, New York, New York 10010 or
such other address as Lessor shall have last designated by notice to
Guarantor.
14. This Guaranty shall inure to the benefit of and may be enforced
by Lessor, its successors or assigns, and shall be binding upon and be
enforceable against Guarantor and its successor and assigns.
15. This Guaranty may not be changed, modified, discharged or
terminated orally or in any manner other than by an agreement in writing
signed by Guarantor and Lessor, or their respective successors and assigns.
16. This Guaranty and any issues arising hereunder shall be governed
by the law of New York.
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty on the day
and year first above written.
/s/ James McNamara, Chairman
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the 23 day of Jan., before me personally came James McNamara, who
being by me duly sworn, did depose and say that he resides at New York, that
he is the Chairman of Princeton Media Group, Inc., the corporation described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation
and that he signed his name thereto by like order.
/s/
Notary Public
HOWARD LONDA
Notary Public, State of New York
No. 7589235
Qualified in Rockland County
Certified in New York County
Commission Expires June 30, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FINANCIAL STATEMENTS INCLUDED IN FORM 10-QSB AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 391,399
<SECURITIES> 0
<RECEIVABLES> 5,399,759
<ALLOWANCES> 3,528,956
<INVENTORY> 891,794
<CURRENT-ASSETS> 3,801,912
<PP&E> 2,111,159
<DEPRECIATION> 353,684
<TOTAL-ASSETS> 18,310,807
<CURRENT-LIABILITIES> 4,398,835
<BONDS> 8,308,822
1,667,480
0
<COMMON> 16,897,938
<OTHER-SE> (13,129,168)
<TOTAL-LIABILITY-AND-EQUITY> 18,310,807
<SALES> 6,576,649
<TOTAL-REVENUES> 6,585,996
<CGS> 4,903,232
<TOTAL-COSTS> 7,591,161
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 472,888
<INCOME-PRETAX> (1,478,053)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,478,053)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,478,053)
<EPS-PRIMARY> (1.16)
<EPS-DILUTED> (1.16)
</TABLE>
