AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 18, 1996.
REGISTRATION NO. 333-05273
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
GKN HOLDING CORP.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 6211 13-3414302
(State of Incorporation) (Primary Standard Industrial (IRS Employer I.D. No.)
Classification Code Number)
</TABLE>
-------------------
61 BROADWAY
NEW YORK, NEW YORK 10006
(212) 509-3800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
-------------------
DAVID M. NUSSBAUM
CHAIRMAN OF THE BOARD
GKN HOLDING CORP.
61 BROADWAY
NEW YORK, NEW YORK 10006
(212) 509-3800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
<TABLE><CAPTION>
<S> <C>
DAVID ALAN MILLER, ESQ. ALAN R. DYNNER, ESQ.
GRAUBARD MOLLEN & MILLER KIRKPATRICK & LOCKHART
600 THIRD AVENUE 1251 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10016 NEW YORK, NEW YORK 10020
(212) 818-8800 (212) 536-3900
FAX: (212) 818-8881 FAX: (212) 536-3901
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended ("Act"), check the following box. X
Shares of Common Stock have also been registered on Registration Statement
No. 33-80224 on Form S-1 pursuant to Rule 429 of the Act.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 18, 1996
PROSPECTUS
2,500,000 SHARES
[LOGO] HOLDING CORP.
COMMON STOCK
-------------------
Prior to this Offering, there has been no public market for the Common Stock
of GKN Holding
Corp. (the "Company") and there can be no assurance that any such market will
develop. The Company has applied for the Common Stock to be quoted on the Nasdaq
National Market under the symbol "GKNS". It is currently anticipated that the
initial public offering price of the shares will be between $6.00 and $8.00. For
information regarding the factors considered in determining the initial public
offering price of the Common Stock, see "Underwriting."
-------------------
SEE "RISK FACTORS" ON PAGE 6 FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE DISCOUNTS PROCEEDS TO
TO PUBLIC AND COMMISSIONS COMPANY(1)
<S> <C> <C> <C>
Per Share........................ $ $ $
Total(2)......................... $ $ $
</TABLE>
(1) Before deducting expenses payable by the Company, estimated at $ .
(2) The Company has granted the Underwriters an option, exercisable within 45
days from the date of this Prospectus, to purchase up to 375,000 additional
shares on the same terms set forth above solely to cover over-allotments, if
any. If such over-allotment option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions and Proceeds to Company will
be $ , $ and $ , respectively. See "Underwriting."
-------------------
The shares of Common Stock are offered, subject to prior sale, when, as and
if delivered to and accepted by the Underwriters and subject to the approval of
certain legal matters by counsel and certain other conditions. The Underwriters
reserve the right to withdraw, cancel or modify this Offering and to reject any
order in whole or in part. It is expected that delivery of certificates will be
made against payment therefor, at the offices of Pennsylvania Merchant Group Ltd
in Radnor, Pennsylvania on or about , 1996.
PENNSYLVANIA MERCHANT GKN SECURITIES
GROUP LTD
, 1996.
<PAGE>
THIS REGISTRATION STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO
COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY AN OFFER TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. UNDER NO CIRCUMSTANCES SHALL THIS
REGISTRATION STATEMENT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON NASDAQ, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
FURTHER INFORMATION
The Company intends to furnish to its stockholders annual reports containing
audited financial statements, quarterly reports containing unaudited financial
information and such other periodic reports as the Company may determine to be
appropriate or as may be required by law.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information and the
financial statements (including the notes thereto) appearing elsewhere in this
Prospectus. Certain of the information contained in this summary and elsewhere
in this Prospectus, including under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" are forward-looking statements.
For a discussion of important factors that could cause actual results to differ
materially from the forward-looking statements, see "Risk Factors" and
"Management's Discussion and Anaylsis of Financial Condition and Results of
Operations." Each prospective investor is urged to read this Prospectus in its
entirety.
THE COMPANY
GKN Holding Corp. (the "Company") is primarily engaged in securities
brokerage, securities trading and investment banking through GKN Securities
Corp. ("GKN"), its principal operating subsidiary. GKN is a full service
securities brokerage and investment banking firm which is a registered
broker-dealer with the Securities and Exchange Commission ("Commission"), in all
50 states, the District of Columbia and Puerto Rico and a member firm of the
National Association of Securities Dealers, Inc. ("NASD"). GKN's principal
office is located in New York City, New York and its branch offices are located
in Great Neck, New York, Boca Raton, Florida, Miami, Florida, and Stamford,
Connecticut.
The Company began operations in 1987 following the October stock market
decline, at which time the founders perceived an opportunity for the creation of
a high quality investment bank serving emerging growth and small capitalization
corporate clients and investors. From its inception, the Company's plan has been
to develop a high quality firm serving this market niche. Since October 1990,
when GKN managed its first underwriting, GKN has acted as managing or
co-managing underwriter in a total of 43 public offerings, raising approximately
$430 million. GKN also regularly participates as a selling group member or
participating underwriter in public offerings managed by other underwriters,
including national and regional firms. Thirteen of the offerings managed or
co-managed by GKN (raising approximately $170 million) were for Specified
Purpose Acquisition Companies(R) ("SPAC(R)"), a new publicly-traded financing
vehicle developed and introduced by GKN in 1993. A SPAC combines the
characteristics of a traditional acquisition or buyout fund and a more liquid,
publicly traded industry-specific investment vehicle. The Company believes that
the number and dollar amount of GKN's underwritings and the introduction of
SPACs have contributed significantly to increased public and industry awareness
of the Company and has resulted in increased demand for GKN's investment banking
services. See "Business--Investment Banking Activities."
The Company has grown significantly over the last five years, primarily
through increasing the size of its sales force, but more recently by acquisition
and expansion into new areas of business. In March 1995, GKN Fund Management,
Inc., a wholly-owned subsidiary of the Company, entered the money management
business by becoming the general partner and administrator of Kaleidoscope
Partners, L.P., a "fund of funds" with approximately $8.1 million in assets at
April 30, 1996. In November 1995, the Company acquired all of the outstanding
stock of Shochet Securities, Inc. ("Shochet"), a full-service discount brokerage
firm with four branches operating in Southern Florida. In February 1996, GKN
Securities AG ("GKN AG"), a wholly-owned subsidiary of the Company, commenced
operations in Zurich, Switzerland, distributing securities and providing
brokerage services to European institutional money managers.
As of April 30, 1996, the Company, through its three brokerage subsidiaries,
employed 260 registered representatives, serving primarily retail and, to a
lesser extent, institutional customers, representing, in the aggregate, more
than 27,000 active accounts.
3
<PAGE>
The Company was incorporated under the laws of the State of Delaware on
January 30, 1987. GKN was incorporated under the laws of the State of New York
on May 31, 1985. The Company and GKN maintain their principal offices at 61
Broadway, New York, New York 10006, and their telephone number is (212)
509-3800.
THE OFFERING
<TABLE>
<S> <C>
Common Stock Offered......................... 2,500,000 Shares
Common Stock Outstanding Prior
to the Offering............................ 5,559,125 Shares
Common Stock to be Outstanding
After the Offering......................... 8,059,125 Shares
Use of Proceeds.............................. The Company intends to apply the net
proceeds of this Offering to expand its
existing business by: (i) increasing GKN's
equity capital to permit it to underwrite
larger offerings and increase its principal
trading and market making activities; (ii)
expanding GKN's retail and institutional
sales forces and Shochet's retail sales
force; (iii) enhancing GKN's investment
banking and research capabilities; (iv)
expanding the Company's money management
operations and commencing merchant banking
activities; and (v) expanding the Company's
international operations.
Proposed Nasdaq National Market Symbol....... GKNS
</TABLE>
4
<PAGE>
SUMMARY FINANCIAL DATA
The summary financial information set forth below is derived from the
financial statements appearing elsewhere in this Prospectus. This information
should be read in conjunction with such financial statements, including the
notes thereto.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
JANUARY 31, APRIL 30,
------------------------------------- -----------------------
1996 1995 1994 1996 1995
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Total revenues..................... $43,019,000 $32,410,000 $32,956,000 $18,444,000 $7,157,000
Total expenses..................... 36,732,000 31,516,000 25,534,000 14,449,000 7,526,000
Income (loss) before provision for
income taxes....................... 6,287,000 894,000 7,422,000 3,995,000 (369,000)
Net income (loss).................. $3,469,000 $381,000 $4,006,000 $2,246,000 $(256,000)
Primary earnings (loss)
per share(1)..................... $0.61 $0.07 $0.72 $0.40 $(0.04)
Primary weighted average number of
shares outstanding(1).............. 5,729,000 5,695,000 5,530,000 5,638,000 5,784,000
OTHER FINANCIAL DATA:
Ratio of total assets to
stockholders' equity............. 1.89 1.37 1.43 1.95 1.35
Pre-tax return on average
equity........................... 47.4% 7.8% 80.3% 25.1% (3.2)%
Book value per common share
outstanding........................ $3.02 $2.30 $2.27 $3.40 $2.25
Registered Representatives(2)...... 224 163 126 260 175
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
APRIL 30, 1996
-----------------------------
ACTUAL AS ADJUSTED(3)
----------- --------------
<S> <C> <C>
Total assets..................................................... $33,117,000 $ 46,117,000
Total liabilities (excluding subordinated debt).................. 15,348,000 15,348,000
Subordinated debt................................................ 868,000 868,000
Total stockholders' equity....................................... $16,901,000 $ 29,901,000
</TABLE>
- ------------
(1) Fully diluted earnings per share and fully diluted average number of shares
outstanding are not materially different from the primary numbers indicated
above.
(2) The Registered Representatives data is based upon unaudited personnel
records of the Company.
(3) Gives effect to the sale of the shares of Common Stock offered hereby
("Shares") at an assumed price of $6.00 per Share and the application of net
proceeds therefrom.
Unless otherwise indicated, the information in this Prospectus does not give
effect to the exercise of the Underwriters' over-allotment option and does not
include (i) 5,000,000 shares of Common Stock reserved for issuance under the
Company's 1991 Employee Incentive Plan ("1991 Plan"), of which options to
purchase 998,506 shares of Common Stock have been granted and are outstanding as
of June 30, 1996; (ii) 125,000 shares of Common Stock issuable upon exercise of
options and warrants issued outside of the 1991 Plan; or (iii) any shares of
Common Stock which may be issued under the Company's 1996 Incentive Compensation
Plan ("IC Plan").
5
<PAGE>
RISK FACTORS
The Shares offered hereby involve risk. Prospective purchasers of the Shares
should consider carefully the risk factors set forth below as well as the other
information set forth in this Prospectus.
INDUSTRY FACTORS; ECONOMIC AND MARKET CONDITIONS
The securities business is, by its nature, subject to various risks,
particularly in volatile or illiquid markets, including the risk of losses
resulting from the underwriting or ownership of securities, customer fraud,
employee errors and misconduct, failures in connection with the processing of
securities transactions and litigation. The Company's business and its
profitability are affected by many factors, including the volatility and price
level of the securities markets; the volume, size and timing of securities
transactions; the demand for investment banking services; the level and
volatility of interest rates; the availability of credit; legislation affecting
the business and financial communities; and the economy in general. Markets
characterized by low trading volumes and depressed prices generally result in
reduced commissions and investment banking revenues as well as losses from
declines in the market value of securities positions. Moreover, since a portion
of the Company's revenues are derived from underwriting the initial public
offerings ("IPOs") of companies, any decline in the overall IPO market, among
other factors, could have a material adverse effect on the operations of the
Company. See "Business-- Brokerage and Distribution Activities," "--Investment
Banking Activities" and "--Principal Transactions."
SMALL CAPITALIZATION COMPANIES
The Company's business is focused on the underwriting, brokerage and trading
of securities of small capitalization companies, a segment of the securities
industry which may be subject to greater risks than the securities industry as a
whole and, consequently, may be marketable to only a limited segment of the
investing public. The Company believes that certain small capitalization
companies have significant potential for growth, although such companies
generally have limited product lines, markets, market shares and financial
resources and their securities may trade less frequently and in more limited
volume than those of more established companies. Additionally, in recent years,
the stock market has experienced a high degree of price and volume volatility
for the securities of many small capitalization companies. In particular, small
capitalization companies that trade in the over-the-counter markets have
experienced wide price fluctuations not necessarily related to the operating
performance of such companies. See "Business--Brokerage and Distribution
Activities," "--Investment Banking Activities" and "--Principal Transactions."
INVESTMENT BANKING
The Company's investment banking activities subject the Company's capital to
certain risks. Such risks include market, credit and liquidity risks, which
risks arise primarily when underwritten securities cannot be resold, for any
reason, at anticipated price levels. Further, under applicable securities laws
and court decisions with respect to underwriters' liability and limitations on
indemnification by issuers, an underwriter may be exposed to substantial
securities liability arising out of public and private offerings of equity and
debt instruments. See "Business--Investment Banking Activities" and "--Legal
Proceedings."
PRINCIPAL TRANSACTIONS
As a market maker, the Company uses its capital to maintain substantial
inventories of long and/or short positions in securities in order to engage in
principal transactions with customers as well as with other broker-dealers.
These securities are marked to market with resulting unrealized gains and
6
<PAGE>
losses reported as revenue from principal transactions. The maintenance of such
positions exposes the Company to the possibility of significant losses when
market prices of the securities comprising such positions change. See
"Business--Principal Transactions."
INVESTMENT ACCOUNT
The Company maintains an investment account in which securities are held for
potential long-term appreciation. Securities in this account consist principally
of common stock and warrants and rights to purchase same, most of which are
restricted and non-marketable for varying periods of time. As required by
generally accepted accounting principles for broker-dealers, these securities
are marked to market with resulting unrealized gains and losses being reported
as revenue from the investment account. Values of the securities in the
investment account are volatile. Fluctuations due to general market conditions,
the fundamentals of the issuer of such securities, or otherwise, may have a
material effect on the Company's earnings. The recent increase in the value of
the securities in the investment account represented a substantial portion of
the Company's earnings for the year ended January 31, 1996 and quarter ended
April 30, 1996. See "Business--Principal Transactions."
GOVERNMENT REGULATION; NET CAPITAL REQUIREMENTS
The Company's business, and the securities industry generally, are subject
to extensive regulation at both the federal and state levels. In addition,
self-regulatory organizations, such as the NASD, require strict compliance with
their rules and regulations. Among other things, these regulatory authorities
impose restrictions on sales methods, trading practices, use and safekeeping of
customer funds and securities, record keeping and the conduct of principals and
employees. The extensive regulatory framework applicable to broker-dealers, the
purpose of which is to protect customers and the integrity of the securities
markets, imposes significant compliance burdens on the Company. Failure to
comply with any of the laws, rules or regulations of any independent, state or
federal regulatory authority could result in a fine, injunction, suspension or
expulsion from the industry, which could have a material adverse impact upon the
Company. The Commission and the NASD also have stringent provisions with respect
to net capital requirements applicable to the operation of securities firms. A
significant operating loss or any charge against the net capital of the Company
could adversely affect its ability to operate, expand or, depending upon the
magnitude of the loss or charge, maintain its present level of business.
Furthermore, amendments to existing statutes and regulations or the adoption of
new statutes and regulations could require the Company to alter its methods of
operation at costs which could be substantial. See "Business--Government
Regulation," "--Net Capital Requirements" and "--Legal Proceedings."
CREDIT RISKS
The Company's brokerage subsidiaries clear all transactions for their
customers on a fully disclosed basis with their clearing agent, which carries
and clears all customer securities accounts. The clearing firm also lends funds
to customers of the Company's brokerage subsidiaries through the use of margin
credit. These loans are made to customers on a secured basis, with the clearing
firm maintaining collateral in the form of saleable securities, cash or cash
equivalents. Pursuant to the terms of the agreement between the Company's
brokerage subsidiaries and the clearing agent, in the event that customers fail
to pay for their purchases, to supply the securities that they have sold, or to
repay funds they have borrowed, and the clearing agent satisfies any customer
obligations, the Company's brokerage subsidiaries would be obligated to
indemnify the clearing agent for any resulting losses. See "Business--Clearing
Agent."
7
<PAGE>
LEGAL PROCEEDINGS
Many aspects of the Company's business involve substantial risks of
potential liability and regulatory enforcement by state and federal regulators.
In recent years, there has been an increasing incidence of litigation involving
participants in the securities industry. Underwriters and agents are subject to
substantial potential liability for material misstatements and omissions in
prospectuses and other communications with respect to underwritten offerings of
securities. Claims by dissatisfied customers for fraud, unauthorized trading,
churning, mismanagement and breach of fiduciary duty are regularly made against
broker-dealers.
GKN is the subject of an investigation by the Commission arising primarily
from certain sales practices of GKN's registered representatives in 1991 and
1992. GKN is also the subject of an investigation by the NASD staff arising
primarily from mark-ups and mark-downs taken on customer transactions in
warrants of certain issuers whose offerings were underwritten by GKN, and sales
practices in connection with such transactions. There can be no assurance that
any such proceedings will not have a material adverse legal or economic effect
on the Company. Moreover, as a result of increased publicity regarding legal
proceedings against broker-dealers and the resulting heightened public awareness
of such matters, it is possible that certain legal proceedings which can be
settled or otherwise resolved without a material adverse economic effect on the
Company, could generate adverse publicity which in turn could have a material
adverse effect on the Company's operations. See "Business--Legal Proceedings."
CURRENT AND POTENTIAL REFORMS IN THE NASDAQ MARKET
The Nasdaq market has come under intense scrutiny in the media and political
arenas during the past few years and has been the subject of SEC investigations
into its operations. Concerns have been raised with respect to the size of the
spreads between the price paid by investors purchasing Nasdaq-listed securities
and the dealers who process the transactions. Concerns also have been raised
with respect to whether Nasdaq's listing requirements are sufficiently stringent
and whether the NASD, the trade organization controlling the Nasdaq market,
carefully polices Nasdaq-listed companies. In response, the NASD has begun to
boost its internal compliance and monitoring programs, including establishing a
new separate regulatory unit, NASD Regulation, Inc. ("NASDR"). More
specifically, the NASDR has been hiring numerous new enforcement aides to better
monitor trading activities among dealers and to scrutinize companies' compliance
with applicable listing standards, and heightening its overall monitoring of
small capitalization companies. Additionally, Nasdaq is in the process of
developing an electronic audit system, expected to be in place by 1997, that
will enable it to detect possible price manipulation and front running by
brokerage firms almost instantaneously. Nasdaq is also currently evaluating the
thorough revision of its listing standards for inclusion on the Nasdaq Market to
possibly make such requirements more stringent.
The effects of current and proposed Nasdaq reform on the operations of
brokerage firms, especially those specializing in the securities of small
capitalization companies, cannot be fully anticipated. The cost of compliance
with any new rules, regulations and procedures instituted by the NASDR could be
significant. Additionally, the implementation of stricter standards for initial
and continued inclusion of companies on Nasdaq could adversely affect the
prospects of small capitalization companies, the stock performance of such
companies, and the liquidity of investors' investments in such companies.
Increased compliance costs or the inability to attain or maintain the listing of
underwriting clients on the Nasdaq system, or a combination thereof, could
adversely affect the financial performance of the Company.
8
<PAGE>
INTERNATIONAL OPERATIONS
The Company, through GKN AG, has established an office in Zurich,
Switzerland, to facilitate the provision of the Company's financial services and
products in Europe. Although the Company attempts to structure its international
sales in dollar-denominated transactions only, certain transactions may be
denominated in the local currency. The Company's foreign revenues may be
disrupted by currency fluctuations or other events beyond the Company's control,
including political or regulatory changes. GKN AG is also subject to local rules
and regulations which can substantially affect the profitability or ability of
the Company to operate internationally. These rules and regulations could have
the effect of delaying the introduction of new services or products to European
customers, and increase the cost of the Company's operations in Europe. See
"Business--Government Regulation."
COMPETITION
The Company encounters intense competition in all aspects of the securities
business and competes directly with other securities firms, a significant number
of which have greater capital and other resources than the Company. In addition
to competition from firms currently in the securities business, recently there
has been increasing competition from other sources, such as commercial banks and
insurance companies offering financial services, and from other investment
alternatives. See "Business--Competition."
POTENTIAL CONFLICTS CAUSED BY SELF-UNDERWRITING; NEED FOR QUALIFIED INDEPENDENT
UNDERWRITER
Pennsylvania Merchant Group Ltd and GKN (which is a wholly-owned subsidiary
of the Company) are acting as Underwriters of this Offering. As a wholly-owned
subsidiary of the Company, GKN's role as an Underwriter may involve certain
conflicts of interest. Pursuant to the by-laws of the NASD, the Shares are being
offered at a price no higher than that recommended by Pennsylvania Merchant
Group Ltd, which, in addition to being an Underwriter of this Offering, is also
acting as a "qualified independent underwriter." Although Pennsylvania Merchant
Group Ltd has participated in the preparation of the Registration Statement of
which this Prospectus forms a part and is required to exercise the usual
standards of "due diligence" with respect thereto, there can be no assurance
that certain conflicts will not arise with respect to this Offering, or if
conflicts do arise, that they will be resolved in a manner favorable to
investors. See "Underwriting."
NO PRIOR PUBLIC MARKET FOR AND POSSIBLE PRICE VOLATILITY OF THE SHARES;
LIMITATIONS ON MARKET MAKING ABILITIES
Prior to this Offering, there has been no public trading market for the
Shares and there is no assurance that an active public market for the Shares
will develop or, if developed, that it will continue after the Offering. In the
absence of an active public trading market, an investor may be unable to
liquidate his investment. The trading prices of the Shares could be subject to
wide fluctuations in response to quarterly variations in operating results,
announcements of material business events by the Company or its competitors and
other events or factors. Moreover, due to regulatory stances of both the
Commission and the NASD relating to the circumstances under which a company may
engage in market making transactions in its own securities, GKN will not be
able, in the absence of a current market making prospectus, to engage in trading
or market making activities relating to the Shares following consummation of
this Offering. GKN has no present intention of maintaining a current market
making prospectus. The Underwriters believe that there will be sufficient
additional market makers to sustain an orderly and liquid market for the Shares.
No firms, however, are under any obligation to make a market in the Shares and
any firm which commences market making activities may cease such activities at
any time. Further, other rules, including those relating to the use of
"insider information," may prevent GKN's registered representatives from
recommending the Shares to its customers. To the extent that GKN is unable to
make a market in, or recommendations regarding,
9
<PAGE>
the Shares following this Offering, the ability of investors to sell the Shares
in the secondary market may be limited and the price of the Shares may be
adversely affected. See "Underwriting."
RECENT AND PROPOSED EXPANSION
The Company recently expanded through the acquisition of Shochet and the
opening of GKN AG's office in Zurich, Switzerland. Although Shochet has been an
established business for over 16 years, there can be no assurance that the
business of Shochet will be successfully integrated with that of the Company.
GKN AG's business commenced in February 1996. Accordingly, GKN AG has only a
limited operating history upon which an evaluation of future performance can be
made. GKN AG's prospects must be considered in light of the risks, expenses,
delays and difficulties frequently encountered in the establishment of a new
business in an industry characterized by intense competition. See
"Business--Brokerage and Distribution."
The Company intends to apply a portion of the net proceeds of this Offering
to further expand its operations. There can be no assurance that the Company
will be able to expand its operations successfully. Moreover, the proposed
expansion of the Company's operations may materially increase the Company's
operating expenses and could adversely affect the Company's profits.
The Company may seek to expand its operations by acquiring suitable
broker-dealers, research and/or trading firms or other complementary businesses,
or by establishing or acquiring additional branch offices. As of the date of
this Prospectus, the Company has no agreements, understandings or commitments,
and is not engaged in any negotiations, relating to potential acquisitions.
There can be no assurance that the Company will effect any acquisitions or that
the Company will be able to successfully integrate into its operations any
acquired business or branch office.
DEPENDENCE ON KEY PERSONNEL
For the foreseeable future, the Company will place substantial reliance upon
the personal efforts and abilities of David M. Nussbaum, Chairman of the Board
of the Company and GKN, Roger N. Gladstone, President of the Company and GKN,
and Peter R. Kent, Chief Operating and Financial Officer of the Company and GKN.
The loss of the services of any of them likely would have a material adverse
effect on the business, operations, revenues and/or prospects of the Company.
The Company maintains key man life insurance on each of Messrs. Nussbaum and
Gladstone in the amount of $1,000,000. The success of the Company is also
dependent upon its ability to retain and hire additional highly skilled
personnel. Competition among broker-dealers for experienced personnel is
intense. There can be no assurance that the Company will be able to retain such
personnel or hire and retain additional qualified and skilled personnel. See
"Business--Competition" and "Management."
CONTROL BY PRINCIPALS
David M. Nussbaum, Roger N. Gladstone and Robert Gladstone will beneficially
own in the aggregate approximately 36% of the outstanding shares of Common Stock
immediately after this Offering (assuming all options held by them are exercised
and no other options or warrants are exercised) and, accordingly, will have
significant influence over the outcome of all matters submitted to the
stockholders for approval, including the election of directors of the Company.
See "Management" and "Principal Stockholders."
AUTHORIZATION AND DISCRETIONARY ISSUANCE OF PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance of "blank
check" preferred stock with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without stockholder approval, to
10
<PAGE>
issue preferred stock with dividend, liquidation, conversion, voting or other
rights that could adversely affect the voting power or other rights of the
holders of the Company's Common Stock. In the event of issuance, the preferred
stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company, which
could have the effect of discouraging bids for the Company and thereby prevent
stockholders from receiving the maximum value for their shares. Although the
Company has no present intention to issue any shares of its preferred stock,
there can be no assurance that the Company will not do so in the future. See
"Description of Capital Stock--Preferred Stock."
SHARES ELIGIBLE FOR FUTURE SALE
All of the shares of Common Stock outstanding prior to the date of this
Prospectus are "restricted securities", as that term is defined under Rule 144
promulgated under the Securities Act of 1933, as amended (the "Act").
Substantially all of the shares outstanding prior to this Offering will be
available for resale in the public market under Rule 144 commencing on the date
of this Prospectus. Sales of a significant number of shares of Common Stock in
the public market could have an adverse effect on the market price of the Common
Stock. All of the officers and directors of the Company have agreed not to sell
the shares of Common Stock they currently own (an aggregate of 3,224,250 shares
of Common Stock) for a period of fifteen months from the date of this Prospectus
without the consent of Pennsylvania Merchant Group Ltd. See "Shares Eligible for
Future Sale."
DILUTION
This Offering involves immediate and substantial dilution of $2.49 per
share, or 41.5%, to investors because the net tangible book value per share of
Common Stock after completion of this Offering will be substantially less than
the per-share offering price, assuming a $6.00 per-share offering price. See
"Dilution."
OUTSTANDING OPTIONS
At June 30, 1996, options to purchase 998,506 shares of Common Stock at an
average exercise price of $4.62 per share were outstanding, of which options to
purchase 132,222 shares are presently exercisable, options to purchase an
additional 246,429 shares will become exercisable during the balance of 1996,
and options to purchase 263,178 shares will become exercisable during 1997. To
the extent that such options are exercised, dilution to the ownership interests
of the Company's stockholders will occur. Moreover, the terms upon which the
Company will be able to obtain additional equity capital may be adversely
affected since the holders of the outstanding options can be expected to
exercise them, to the extent they are able, at a time when the Company would, in
all likelihood, be able to obtain any needed capital on terms more favorable to
the Company than those provided in the options. See "Management--Executive
Compensation--1991 Employee Incentive Plan."
NO DIVIDENDS
To date, the Company has not paid any cash dividends on its Common Stock and
does not expect to declare or pay any cash dividends in the foreseeable future.
The Company intends to retain all earnings in the foreseeable future for the
Company's continued growth. Moreover, the Company's ability to pay dividends in
the future may be restricted by its brokerage subsidiaries' obligations to
comply with the net capital rules applicable to broker-dealers. See "Dividend
Policy" and "Business--Net Capital Requirements."
11
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Shares offered hereby,
assuming a $6.00 per share offering price, are estimated to be $13,000,000
($15,025,000 if the Underwriters' over-allotment option is exercised in full).
The Company expects to use the net proceeds principally to expand its existing
business, approximately as follows: (i) $4,000,000 to increase GKN's equity
capital to permit it to underwrite larger offerings of securities and increase
its principal trading and market making activities; (ii) $3,000,000 to expand
GKN's retail and institutional sales forces and Shochet's retail sales force;
(iii) $2,000,000 to expand GKN's investment banking and research capabilities;
(iv) $2,000,000 to expand the Company's money management operations and commence
merchant banking activities; and (v) $1,000,000 to expand the Company's
international operations. The balance of $1,000,000 of the net proceeds of this
Offering will be used by the Company for working capital and general corporate
purposes of the Company and its subsidiaries. If the Underwriters exercise their
over-allotment option in full, the Company will realize additional net proceeds
of $2,025,000, which will be added to the Company's working capital.
The Company may seek to expand its operations by acquiring suitable
broker-dealers, research and/or trading firms or other complementary businesses,
or by establishing or acquiring additional branch offices. As of the date of
this Prospectus, the Company has no agreements, understandings or commitments
and is not engaged in any negotiations relating to potential acquisitions. There
can be no assurance that the Company will effect any acquisitions or that the
Company will be able to successfully integrate into its operations any acquired
business or branch office.
The allocation of net proceeds of this Offering represents the Company's
best estimates based upon its current plans and certain assumptions regarding
industry and general economic conditions and the Company's future revenues and
expenditures. If any of these factors change, the Company may find it necessary
or advisable to reallocate some of the proceeds within the above-described
categories or to use portions thereof for other purposes or may be required to
seek additional financing. There can be no assurance that additional financing
will be available to the Company on acceptable terms, or at all. Any failure to
obtain additional financing, if required, could have an adverse effect on the
Company, including possibly requiring the Company to curtail its operations.
Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest-bearing
investments.
12
<PAGE>
DILUTION
The difference between the public offering price per share of Common Stock
and the net tangible book value per share of Common Stock after this Offering
constitutes the dilution to investors in this Offering. Net tangible book value
per share is determined by dividing the net tangible book value (total tangible
assets less total liabilities) by the number of outstanding shares of Common
Stock.
At April 30, 1996, and after giving effect to subsequent exercise of
options, the Company had a net tangible book value of $15,320,000 or $2.76 per
share of Common Stock (based on 5,559,125 shares outstanding). After giving
effect to the sale of the Shares offered hereby at an assumed offering price of
$6.00 per share (less underwriting discounts and estimated expenses of this
Offering) the pro forma net tangible book value at that date would have been
$28,320,000 or $3.51 per share. This represents an immediate increase in net
tangible book value of $0.75 per share to existing stockholders and an immediate
dilution of $2.49 per share to new investors.
The following table illustrates the per share dilution without giving effect
to results of operations of the Company subsequent to April 30, 1996:
<TABLE>
<S> <C> <C>
Assumed initial public offering price....................... $6.00
Net tangible book value before this Offering.............. $2.76
Increase attributable to new investors.................... 0.75
-----
Pro forma net tangible book value after this Offering....... 3.51
-----
Dilution to new investors................................... $2.49
-----
-----
</TABLE>
The following table summarizes the number and percentage of shares of Common
Stock purchased from the Company, the amount and percentage of consideration
paid and the average price per share paid by existing stockholders and by new
investors pursuant to this Offering, assuming a $6.00 per share offering price:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
---------------------- ------------------------ PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders........ 5,559,125 69.0% $ 3,636,000 19.5% $0.65
New investors................ 2,500,000 31.0% 15,000,000 80.5% $6.00
--------- --------- ----------- ---------
Total.................. 8,059,125 100.0% $18,636,000 100.0%
--------- --------- ----------- ---------
--------- --------- ----------- ---------
</TABLE>
13
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at April
30, 1996, and as adjusted to give effect to the exercise of options after April
30, 1996, the sale of the Shares offered hereby at an assumed price of $6.00 per
share and the application of the estimated net proceeds therefrom:
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
Long Term Borrowings:
Subordinated seller notes............................... $ 868,000 $ 868,000
Stockholders' equity:
Preferred stock--$.10 par value; 5,000,000 shares
authorized, 0 shares issued or outstanding.................. -- --
Common stock--$.0001 par value; 35,000,000 shares
authorized, 5,602,875 shares issued (5,054,125 shares
outstanding); 8,842,875 shares issued (8,059,125
shares outstanding), as adjusted...................... 1,000 1,000
Additional paid-in capital.............................. 3,487,000 16,691,000
Retained earnings....................................... 14,164,000 14,164,000
Cumulative translation adjustment....................... (18,000) (18,000)
Less cost of treasury stock (548,750 shares; 783,750
shares as adjusted)................................... (733,000) (937,000)
----------- -----------
Total stockholders' equity............................ 16,901,000 29,901,000
----------- -----------
Total capitalization................................ $17,769,000 $30,769,000
----------- -----------
----------- -----------
</TABLE>
DIVIDEND POLICY
The Company has never declared or paid cash or other dividends on its Common
Stock and does not anticipate doing so in the foreseeable future. The payment of
dividends, if any, in the future is within the discretion of the Board of
Directors and will depend upon the Company's earnings, its capital requirements
and financial condition, and other relevant factors. The Company intends to
retain all earnings in the foreseeable future for the Company's continued
growth. The Company's ability to pay dividends in the future also may be
restricted by its brokerage subsidiaries' obligation to comply with the net
capital requirements imposed on broker-dealers under regulations and rules
promulgated by both the Commission and the NASD.
14
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data presented below, as of and for the years ended
January 31, 1996, 1995, 1994, 1993 and 1992 have been derived from the Company's
Financial Statements which have been audited by KPMG Peat Marwick LLP for 1996
and 1995, and Goldstein Golub Kessler & Company, P.C. for 1994, 1993 and 1992,
each independent certified public accountants. The data for the three months
ended April 30, 1996 and 1995 has been derived from unaudited financial
statements of the Company. In the opinion of management, the unaudited financial
statements have been prepared on the same basis as the audited financial
statements and include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the results of these periods.
This data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Financial
Statements, including the notes thereto, appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA:
YEAR ENDED THREE MONTHS ENDED
JANUARY 31, APRIL 30,
------------------------------------------------------------------- ------------------------
1996 1995 1994 1993 1992 1996 1995
----------- ----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues...... $43,019,000 $32,410,000 $32,956,000 $25,278,000 $18,284,000 $18,444,000 $7,157,000
Total expenses...... 36,732,000 31,516,000 25,534,000 21,657,000 13,590,000 14,449,000 7,526,000
Income (loss) before
income taxes and
extraordinary
item................ 6,287,000 894,000 7,422,000 3,621,000 4,694,000 3,995,000 (369,000)
Net income (loss)... $3,469,000 $381,000 $4,006,000 $2,189,000 $2,779,000(1) $2,246,000 $(256,000)
Primary earnings
(loss) per
share(2)............ $0.61 $0.07 $0.72 $0.42 $0.58 $0.40 $(0.04)
Primary weighted
average number of
shares
outstanding(2)..... 5,729,000 5,695,000 5,530,000 5,153,000 4,820,000 5,638,000 5,784,000
OTHER FINANCIAL
DATA:
Ratio of total
assets to total
stockholder equity.. 1.89 1.37 1.43 1.81 2.95 1.95 1.35
Pre-tax return on
average equity..... 47.4% 7.8% 80.3% 65.6% 223.3% 25.1% (3.2)%
Book value per
Common Share
outstanding......... $3.02 $2.30 $2.27 $1.46 $0.81 $3.40 $2.25
Registered
Representatives(3).... 224 163 126 108 75 260 175
BALANCE SHEET DATA:
</TABLE>
<TABLE>
<CAPTION>
JANUARY 31, APRIL 30, 1996
------------------------------------------------------------------- ----------------------------
1996 1995 1994 1993 1992 ACTUAL AS ADJUSTED(4)
----------- ----------- ----------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets....... $27,853,000 $16,096,000 $16,123,000 $13,055,000 $11,278,000 $33,117,000 $ 46,117,000
Total liabilities
(excluding
subordinated
debt).............. 12,143,000 4,339,000 4,685,000 5,683,000 7,224,000 15,348,000 15,348,000
Subordinated
debt............... 934,000 -0- -0- -0- -0- 868,000 868,000
Convertible
subordinated
notes.............. -0- -0- 162,000 162,000 225,000 -0- -0-
Total stockholder's
equity............. $14,776,000 $11,757,000 $11,276,000 $ 7,210,000 $ 3,829,000 $16,901,000 $ 29,901,000
</TABLE>
- ------------
(1) Includes an extraordinary item of income tax benefits of $271,000 arising
from the utilization of net operating loss carryforwards.
(2) Fully diluted earnings per share and fully diluted average number of shares
outstanding are not materially different from the primary numbers indicated
above.
(3) The Registered Representatives data is based upon unaudited personnel
records of the Company.
(4) Gives effect to the sale of the Shares offered hereby at an assumed price of
$6.00 per share and the application of net proceeds therefrom.
15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements, including the notes thereto, and the Selected Financial Data
included elsewhere in this Prospectus.
OVERVIEW AND GENERAL INDUSTRY CONDITIONS
The Company, which was incorporated in 1987, began meaningful operations
through GKN in the fiscal year ended January 31, 1991. That year, GKN underwrote
one public equity offering, raising $2.8 million for the issuer, and the
Company's financial results reflected $2.6 million of revenues and a net loss of
$511,000. As of June 30, 1996, GKN has managed or co-managed a total of 43
public offerings, raising approximately $430,000,000 for the issuers. In the
fiscal year ended January 31, 1996, the Company generated revenues of
$43,019,000, net income of $3,469,000, and a pre-tax return on average equity of
47.4%.
As did many firms in the investment banking and securities brokerage
industry, the Company has experienced a significant increase in the volume of
activity during the quarter ended April 30, 1996, primarily as a result of
declining interest rates and improving economic conditions. There is no
assurance that this environment will continue. During the quarter, the Company
experienced record revenues, income and returns on equity. First quarter
financial results reflected revenues of $18,444,000, net income of $2,246,000,
and a pre-tax return on average equity of 25.1%. As experienced during June and
July 1996, the securities market can be highly volatile. The Company's revenues,
including revenues from commissions, investment banking and principal
transactions could be adversely affected by the volatility and related price
level of the securities markets, which in turn would adversely affect the
business and profitability of the Company. See "Risk Factors--Industry Factors;
Economic and Market Conditions."
The Company's primary sources of revenues are commissions earned on the
brokerage of securities, investment banking fees, and gains and losses in the
investment account. The Company's principal business activities are, by their
nature, affected by many factors, including general economic and financial
conditions, the level and volatility of interest rates, security valuations in
the marketplace, competitive conditions, transactional volume and market
liquidity. Consequently, commission revenues, investment banking fees and
investment account results can be volatile. While the Company maintains
stringent cost controls, a significant portion of the Company's expenses are
fixed and do not vary with market activity. As a result, substantial
fluctuations can occur in the Company's revenues and net income from period to
period.
16
<PAGE>
RESULTS OF OPERATIONS
The following table reflects items in the Statements of Operations as dollar
amounts and as percentages of total revenues.
<TABLE>
<CAPTION>
(DOLLAR AMOUNTS IN THOUSANDS)
-----------------------------------------------------------------------------------------------
QUARTER ENDED QUARTER ENDED
FISCAL 1996 FISCAL 1995 FISCAL 1994 4/30/96 4/30/95
---------------- ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Commissions........ $30,418 70.6% $21,804 67.4% $19,803 60.1% $12,068 65.5% $5,268 73.6%
Investment
banking............. 6,003 14.0% 9,607 29.6% 10,027 30.4% 3,413 18.5% 1,431 20.0%
Principal
transactions........ 5,683 13.2% 433 1.3% 2,739 8.3% 2,477 13.4% 266 3.7%
Interest........... 717 1.7% 262 0.8% 203 0.6% 337 1.8% 126 1.8%
Other.............. 198 0.5% 304 0.9% 184 0.6% 149 0.8% 66 0.9%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
Total.......... 43,019 100.0% 32,410 100.0% 32,956 100.0% 18,444 100.0% 7,157 100.0%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
Expenses
Compensation &
benefits............ 27,121 63.0% 22,856 70.5% 18,819 57.1% 10,728 58.2% 5,241 73.2%
Communications..... 2,631 6.1% 2,563 7.9% 1,990 6.0% 839 4.5% 619 8.6%
Brokerage, clearing
and exchange fees... 1,350 3.1% 908 2.8% 695 2.1% 631 3.4% 267 3.7%
Occupancy and
equipment........... 2,180 5.1% 1,711 5.3% 1,260 3.8% 655 3.6% 519 7.3%
Business
development......... 851 2.0% 780 2.4% 702 2.1% 273 1.5% 208 2.9%
Professional
fees................ 703 1.6% 1,251 3.9% 917 2.8% 733 4.0% 237 3.3%
Other.............. 1,896 4.4% 1,447 4.5% 1,151 3.5% 590 3.2% 435 6.1%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
Total.......... 36,732 85.3% 31,516 97.3% 25,534 77.4% 14,449 78.4% 7,526 105.1%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
Income (loss) before
income taxes........ 6,287 14.7% 894 2.7% 7,422 22.6% 3,995 21.6% (369) (5.1)%
Income taxes........ 2,818 6.6% 513 1.6% 3,416 10.4% 1,749 9.5% (113) (1.6)%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
Net income (loss)... $ 3,469 8.1% $ 381 1.1% $ 4,006 12.2% $ 2,246 12.1% $ (256) (3.5)%
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
------- ------ ------- ------ ------- ------ ------- ------ ------ ------
</TABLE>
Three Months Ended April 30, 1996 Compared to Three Months Ended April 30,
1995
Total revenues for the first three months of fiscal 1997 increased by 157.7%
to $18,444,000 from $7,157,000, or an increase of $11,287,000. Revenues
increased in all of the Company's major areas of activity during the first three
months of fiscal 1997.
Commission revenues increased by $6,800,000, or 129.1%, to $12,068,000 over
the first three months of fiscal 1996 as a result of increased business with the
Company's retail customers. The Company's total volume of trades processed
during the three months increased by 147.6% over the same period in fiscal 1996.
Investment banking revenues increased to $3,413,000 from $1,431,000, an
increase of $1,982,000, or 138.5%. During the first three months of fiscal 1997,
the Company raised $31,900,000 for corporate clients through two public
offerings and three private placements. During the same period of the prior year
the Company raised $12,700,000 for corporate clients through one public offering
and one private placement.
Principal transaction revenues increased by $2,211,000 from $266,000 to
$2,477,000. This increase was primarily generated through market making
activities for over-the-counter equity securities, which increased by $1,437,000
to $1,553,000. This increase was generated by widespread gains across the
Company's market making universe and is reflective of general market conditions.
During the
17
<PAGE>
same periods, the Nasdaq Composite Index and Russell 2000 Index increased by
41.1% and 30.8%, respectively, year over year. Additionally, revenue from the
Company's investment account was $924,000 during the quarter, reflecting a
$774,000 increase over the same period in the prior year. The increase was
directly reflective of the increases in the prices of the shares underlying the
underwriter warrants the Company holds, all of which are issued by companies
which are or were investment banking clients.
Interest income increased by $211,000 to $337,000. The increase is due to
the Company's increased cash balances, the increased utilization of margin loans
by the Company's customers, and a renegotiated interest sharing arrangement with
the Company's clearing firm.
Total expenses for the first three months of fiscal 1997 were $14,449,000,
representing an increase of $6,923,000, or 92.0%, over the same period in fiscal
1996. As a percentage of revenues, total expenses for the period decreased to
78.4% of revenues as compared to 105.1% of revenues for the same period in the
prior year.
Compensation and benefit expenses increased by $5,487,000, or 104.7%, to
$10,728,000. These expenses decreased to 58.2% of revenues from 73.2% for the
prior period. Compensation expenses are largely variable in nature, as they
represent percentage payments on commissions generated. Commissions generated,
including sales commissions on underwritings and private placements, increased
by 118.3% and the percentage of commissions paid to brokers increased to 47.5%
from 42.2%, accounting for the majority of the change in compensation and
benefit expense. The remainder of the increase was due to the higher number of
employees. As of April 30, 1996, the Company had 469 employees, of which 260, or
55.4%, were registered representatives who were paid on commission. As of April
30, 1995, the Company had 336 employees, of which 175, or 52.1%, were registered
representatives.
Communications expenses increased by 35.5% to $839,000, from $619,000. This
was caused by the 39.6% increase in the number of employees and the 147.6%
increase in the number of trades processed for the comparable periods.
Brokerage, clearing and exchange fees increased by 136.3% to $631,000, from
$267,000. This increase is attributable to the aforementioned increase in the
number of trades processed and registered representatives employed by the
Company.
Occupancy and equipment expenses increased by 26.2%, to $655,000 from
$519,000, due to the four new locations acquired in the Shochet acquisition.
Business development expenses increased by $65,000, or 31.3% due to
increased promotional activities.
Professional fees increased to $733,000 from $237,000, or by $496,000, as
the result of increased legal fees and reserves provided for potential
settlement of the SEC and NASD investigations. Management believes that the
Company has adequately provided for any financial exposure related to these
matters. See "Business--Legal Proceedings."
Other expenses increased by $155,000 to $590,000, or by 35.6%. This increase
was attributable to the first two months of operation of GKN AG and interest
expense of $26,000 recognized on the note issued in the Shochet acquisition.
The Company's income tax provision for the first three months of fiscal 1997
was $1,749,000, representing an effective income tax rate of 43.8%, compared to
an income tax benefit of $113,000 recognized in the same period of the prior
year.
Net income for the first three months of fiscal 1997 was $2,246,000, an
increase of $2,502,000 over a loss of $256,000 for the first three months of
fiscal 1996.
18
<PAGE>
Fiscal Year Ended January 31, 1996 Compared to Fiscal Year Ended January 31,
1995
Revenues for the twelve months ended January 31, 1996 totaled $43,019,000
versus $32,410,000 for the twelve months ended January 31, 1995, representing an
increase of $10,609,000, or 32.7%. The overall increase is entirely attributable
to an increase in commission revenue of $8,614,000 and increases in revenue from
the investment account of $4,873,000.
Commissions increased by $8,614,000, or 39.5%, from $21,804,000 to
$30,418,000. The increase reflects an overall change in general market
conditions, a 37.4% increase in the number of registered representatives
employed by the Company, and a 35.3% increase in the volume of trades processed
by the Company.
Revenues from investment banking decreased from $9,607,000 to $6,003,000, or
$3,604,000 and 37.5%. During fiscal 1996 the Company raised $72,728,000 for its
investment banking clients through five public underwritings and five private
placements, representing a significant decrease from fiscal 1995 when the
Company raised $122,032,000 for its investment banking clients through eleven
public underwritings and six private placements. The decrease in underwriting
activity was the result of general market conditions and the reorientation of
the Company's underwriting efforts from the SPAC program to operating companies.
See "Business--Investment Banking Activities."
Revenues associated with principal transactions increased by $5,250,000,
from $433,000. Market making activities contributed to the increase by $377,000,
or 85.5%, from $441,000 to $818,000. The increase was attributable to an
increased capital commitment by the Company to market making activities and a
general improvement in market conditions in fiscal 1996 versus fiscal 1995. More
significantly, the Company's investment account generated revenues of $4,865,000
in fiscal 1996 versus a loss of $8,000 in fiscal 1995. The increase was due to
the general stock price performance of the Company's underwriting clients during
the year, which, in turn, was reflected in the valuation of the underwriter
warrants contained in the Company's investment account.
Interest income increased by $455,000, from $262,000 to $717,000. The
increase was due to increased cash and cash equivalent positions held by the
Company and increased utilization of margin loans by the Company's customers.
Other revenues decreased by $106,000, from $304,000 to $198,000.
Total expenses for fiscal 1996 were $36,732,000 versus $31,516,000 for
fiscal 1995, an increase of $5,216,000, or 16.6%. As a percentage of total
revenues, total expenses for the period decreased to 85.3% as compared to 97.3%
of revenues.
Compensation and benefit expenses increased $4,265,000, or 18.7%, from
$22,856,000 to $27,121,000. As a percent of revenues, compensation and benefit
expenses decreased from fiscal 1995 to fiscal 1996, from 70.5% to 63.0%.
Compensation expenses are largely variable in nature as they represent
percentage payments on commissions generated. Although the percentage of
commissions paid to brokers decreased slightly by 1.4%, the total amount of
commissions paid increased by 25.8%, as a result of commissions generated which
increased by $7,831,000 or 29.7% (including sales concessions on underwritings
and private placements).
Communications expenses for fiscal 1996 were $2,631,000, compared to
$2,563,000 for fiscal 1995, reflecting an increase of $68,000, or 2.7%. During
fiscal 1996, the Company negotiated an improved cost structure with its long
distance voice communications carrier.
Brokerage, clearing and exchange fees increased by $442,000, or 48.7%, from
$908,000 to $1,350,000. This was caused by a 35.3% increase in the volume of
trades processed by the Company and an overall decrease in the amounts charged
to brokers for processing trades.
19
<PAGE>
Occupancy and equipment expenses increased by 27.4%, or $469,000, from
$1,711,000 to $2,180,000. Contractual increases in the per square foot lease
rate in the Company's New York location and the impact of a full year's lease
expense for the Company's Stamford, Connecticut location caused the majority of
the increase.
Business development expenses were $851,000 in fiscal 1996 versus $780,000
in fiscal 1995, an increase of $71,000, or 9.1%. The increase was due to
additional promotional expenses.
Professional fees decreased by $548,000, or 43.8%, from $1,251,000 to
$703,000. This was primarily caused by the higher costs incurred during fiscal
1995 related to the filing of documents for an initial public offering of the
Company's securities, which was postponed until market conditions improved.
Other expenses increased from $1,447,000 to $1,896,000, an increase of
$449,000, or 31.0%, reflecting the recognition of recruiting payments made to
new registered representatives.
The Company's fiscal 1996 income tax provision was $2,818,000 and
represented an effective tax rate of 44.8%. In fiscal 1995, the income tax
provision was $513,000 and represented an effective tax rate of 57.4%. The
higher effective rate in fiscal 1995 was the result of minimum taxes due.
Net income for fiscal 1996 was $3,469,000, an increase of $3,088,000
compared to fiscal 1995.
Fiscal Year Ended January 31, 1995 Compared to Fiscal Year Ended January 31,
1994
Revenues for the twelve months ended January 31, 1995 totaled $32,410,000
versus $32,956,000 for the twelve months ended January 31, 1994, representing a
decrease of $546,000, or 1.7%. The decrease is entirely attributable to a
decrease in revenue generated from principal transactions and the investment
account.
Commissions increased by $2,001,000, or 10.1%, from $19,803,000 to
$21,804,000. The increase represents the impact of a 29.4% increase in the
number of registered representatives and a 7.1% increase in the volume of trades
processed by the Company.
Revenues from investment banking activities decreased from $10,027,000 to
$9,607,000, a change of $420,000, or 4.2%. In fiscal 1995, the Company raised
$122,032,000 for its investment banking clients through eleven public offerings
and six private placements, while in fiscal 1994 the Company raised $115,196,000
for its investment banking clients through eleven public offerings. While the
gross amounts raised for clients increased, the average underwriting discount
decreased, thereby causing the decrease in the associated revenue.
Principal transactions generated revenues of $433,000 in fiscal 1995 and
$2,739,000 in fiscal 1994, a decrease of $2,306,000, or 84.2%. This decrease was
in part attributable to a decrease in revenues generated by market making
activities of $1,266,000 from fiscal 1994 to fiscal 1995. Similarly, the
investment account generated a loss of $8,000 in fiscal 1995 versus gains of
$1,032,000 in fiscal 1994. These significant decreases were caused by weak
general market conditions, particularly as they applied to small capitalization
stocks. The Nasdaq Composite Index and the Russell 2000 each decreased by 5.7%
and 7.4%, respectively, during the relevant fiscal periods.
Interest income increased by $59,000, or 29.1%, from $203,000 to $262,000.
This increase was primarily due to higher average cash balances held by the
Company during fiscal 1995 versus fiscal 1994.
Other income increased from $184,000 to $304,000.
Total expenses increased to $31,516,000 in fiscal 1995 from $25,534,000 in
fiscal 1994, an increase of $5,982,000, or 23.4% and represented 97.3% of
revenues as compared to 77.4% of revenues.
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Compensation and benefit expenses increased from $18,819,000 to $22,856,000,
an increase of $4,037,000, or 21.5%. Fiscal 1995 was a year in which the Company
experienced substantial growth. Employees increased from 231 at January 31, 1994
to 335 at January 31, 1995, an increase of 45.0%. The increase in the employee
base and a 4% increase in the percentage of commissions paid to brokers were the
primary causes for the increase in the compensation and benefit expenses.
During fiscal 1994 and fiscal 1995, the Company significantly expanded its
physical facilities, through the opening of its Great Neck, New York office in
June 1993, a doubling of its office space in Boca Raton, Florida in November
1993, and the opening of its Stamford, Connecticut office in June 1994. This
expansion, in conjunction with the aforementioned increase in employees, was the
direct cause of the increases in communication expenses and occupancy expenses.
Communication expenses increased from $1,990,000 to $2,563,000, an increase of
$573,000, or 28.8%, while occupancy and equipment expenses increased by
$451,000, or 35.8%, from $1,260,000 to $1,711,000.
Brokerage, clearing and exchange fees increased from $695,000 to $908,000,
an increase of $213,000, or 30.6%. This was directly related to the 7.1%
increase in the volume of trades processed by the Company.
Business development expenses stayed relatively constant as a percentage of
revenues from fiscal 1994 to fiscal 1995, as the absolute dollar amounts
increased by $78,000, or 11.1%, from $702,000 to $780,000.
Professional fees increased significantly in fiscal 1995 to $1,251,000 from
$917,000 in fiscal 1994, an increase of $334,000, or 36.4%. This increase was
primarily caused by the costs incurred during fiscal 1995 related to the filing
of documents for an initial public offering of the Company's securities, which
was postponed until market conditions improved.
Other operating expenses remained relatively constant as a percentage of
revenues, from $1,151,000, or 3.5% of revenues to $1,447,000 or 4.5% of
revenues.
The Company's income tax provision for fiscal 1995 was $513,000,
representing an effective tax rate of 57.4%, while its income tax provision for
fiscal 1994 was $3,416,000, representing an effective tax rate of 46.0%. The
high effective rate in fiscal 1995 was the result of minimum taxes due on a
significantly lower tax base.
Net income for fiscal 1995 was $381,000, a decrease of $3,625,000 from
results in fiscal 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's assets are highly liquid with the majority consisting of
securities inventories, receivables from other broker-dealers and the Company's
clearing firm, and cash and cash equivalents, all of which fluctuate depending
upon the levels of customer business and trading activity. Receivables from
broker-dealers and the Company's clearing firm turn over rapidly. As a
securities dealer, the Company may carry significant levels of trading
inventories to meet customer needs. The Company's inventory of market making
securities is readily marketable; however, holding large blocks of the same
security may limit liquidity and prevent realization of full market value for
the securities. Securities owned, but not readily marketable, represent
underwriter warrants and the securities underlying such warrants. The liquidity
of these securities is limited. A relatively small percentage of the Company's
total assets are fixed. The Company's total assets or the individual components
of total assets may vary significantly from period to period because of changes
relating to customer demand, economic and market conditions, and proprietary
trading strategies. The Company's total assets at April 30, 1996, January 31,
1996, and January 31, 1995, were $33,117,000, $27,853,000, and $16,096,000,
respectively.
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GKN and Shochet, the Company's operating broker-dealer subsidiaries, are
subject to the net capital rules of the NASD. As such, they and the Company are
subject to certain restrictions on the use of capital and its related liquidity.
GKN's and Shochet's respective net capital positions as of April 30, 1996 were
$10,807,000 and $491,000, which were $10,557,000 and $391,000 in excess of their
respective net capital requirements. See "Business--Government Regulation."
Historically, the Company has financed its operations through the private
placement of debt and equity securities and cash flow from operations. The
Company has not employed any significant leverage or debt. In conjunction with
the Company's acquisition of Shochet, the Company issued the seller a
subordinated note for $934,000 as part of the purchase price. The Company
intends to use debt prudently in the future and intends to arrange for lines of
credit following this Offering. During the twelve months ended April 30, 1996,
the Company repurchased 261,250 shares at a price of $2.00 per share, resulting
in a total repurchase of $522,500. These repurchases were funded from cash flow
from operations.
The Company's overall capital and funding needs are continually reviewed to
ensure that its capital base can support the estimated needs of its business
units. These reviews take into account business needs as well as regulatory
capital requirements of the subsidiaries. Based upon these reviews, management
believes that the Company's capital structure is adequate for current
operations.
CASH FLOWS
The Company's statements of consolidated cash flows classify cash flow into
three broad categories: cash flows from operating activities, investing
activities and financing activities. The Company's net cash flows are
principally associated with operating and investing activities, which support
the Company's brokerage and distribution, investment banking and principal
transactions activities.
Three Months Ended April 30, 1996 and 1995
Cash and cash equivalents at April 30, 1996 and 1995 totaled $10,923,000 and
$5,358,000, respectively, an increase of $3,050,000 and $2,235,000,
respectively, for the comparable three month periods. The increases are all
primarily the result of cash provided by operating activities.
Cash provided by operating activities totaled $3,381,000 in the three months
ended April 30, 1996. This was primarily generated from net income, adjusted for
non cash items, of $2,026,000, a decrease in securities owned, at market value,
of $2,460,000, and increases in securities sold, not yet purchased, of
$2,152,000, commissions payable of $657,000, and income taxes payable of
$1,790,000. These amounts were partially offset by an increase in receivables
due from the Company's clearing firm of $5,388,000 and a decrease in accrued
expenses and liabilities of $1,500,000. For the three months ended April 30,
1995, cash provided from operating activities totaled $2,277,000. This was
primarily generated by decreases in receivables from the Company's clearing firm
of $543,000, securities owned, at market value, of $3,155,000, and an increase
in deferred compensation of $684,000. These amounts were partially offset by a
decrease in net cash from a net loss, adjusted for non cash items, of $163,000,
increases in loans receivable of $460,000 and other assets of $754,000, and a
decrease in accrued expenses and other liabilities of $585,000.
Cash used in investing activities was $162,000 and $42,000 in the periods,
respectively. Both of these amounts represent purchases of office furniture,
equipment and leasehold improvements.
For the three months ended April 30, 1996, cash used in financing activities
totaled $169,000. This amount primarily reflects the repayment of promissory
notes. No cash was generated or used in financing activities during the three
months ended April 30, 1995.
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Fiscal Years 1996, 1995 and 1994
Cash and cash equivalents at January 31, 1996, 1995, and 1994 totaled
$7,873,000, $3,123,000, and $2,922,000, respectively, reflecting increases of
$4,750,000, $201,000, and $208,000 in each of the respective years. The
increases are all the result of cash provided by operating activities, partially
offset by the use of cash in investing activities.
Cash provided by operating activities totaled $6,078,000, $909,000, and
$528,000 in fiscal 1996, 1995, and 1994, respectively. In fiscal 1996, cash
provided by operating activities was primarily generated from net income,
adjusted for non cash items, of $5,090,000, and increases in securities sold,
not yet purchased, of $2,222,000, commissions payable of $788,000, and accrued
expenses and other liabilities of $3,418,000. These were partially offset by
increases in amounts due from the Company's clearing firm of $1,209,000,
securities owned, at market value, of $2,712,000, and securities owned, not
readily marketable, of $1,270,000. In fiscal 1995, cash provided by operating
activities was primarily generated through a decrease in securities purchased
under agreements to resell of $3,057,000, which was partially offset by
increases in securities owned, at market value, of $1,867,000 and loans
receivable of $1,205,000, and a decrease in accrued expenses and other
liabilities of $568,000. In fiscal 1994, cash provided by operating activities
was generated from net income, adjusted for non cash items, of $4,349,000, a
decrease in the receivable from the Company's clearing firm of $1,888,000, and
an increase in accrued expenses and liabilities of $598,000. These amounts were
offset by increases in securities purchased under agreements to resell of
$3,057,000, securities owned, not readily marketable, of $550,000, and other
assets of $645,000, and a decrease in securities sold, not yet purchased, of
$1,993,000.
In fiscal 1996, 1995, and 1994, the Company used cash in investing
activities of $1,812,000, $646,000, and $380,000, respectively. All of these
amounts represent the purchase of office furniture, equipment, and leasehold
improvements, except that in fiscal 1996 the Company used cash of $1,606,000 in
its acquisition of Shochet resulting in goodwill.
The Company generated cash from financing activities of $484,000 in fiscal
1996 and $60,000 in fiscal 1994, while it used cash in financing activities of
$62,000 in fiscal 1995. In fiscal 1996, the Company generated cash through the
issuance of a subordinated note of $934,000, in conjunction with its acquisition
of Shochet, which was partially offset by the purchase of stock into treasury.
The amounts provided by, or used in financing activities for fiscal 1995 and
1994, represent the issuance or retirement of common shares.
EFFECTS OF INFLATION
The Company's assets are, to a large extent, liquid in nature, and, as a
result, are not significantly affected by inflation. To the contrary, market
prices of securities are generally influenced by changes in inflation. Moreover,
the rate of inflation affects the Company's expenses, such as employee
compensation, occupancy expenses and communications costs, which may not be
readily recoverable in the prices of services offered to the Company's
customers. To the extent inflation results in rising interest rates or has
adverse effects upon the securities markets, it may adversely affect the
Company's financial position and results of operations.
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BUSINESS
GENERAL
The business of GKN Holding Corp. (the "Company") is transacted primarily
through four operating subsidiaries: GKN Securities Corp. ("GKN"), Shochet
Securities, Inc. ("Shochet"), GKN Securities AG ("GKN AG") and GKN Fund
Management, Inc. ("GKN Fund"). Collectively, GKN, Shochet and GKN AG are all
involved in various aspects of the investment banking and stock brokerage
business. GKN Fund is involved in money management.
The Company began operations in 1987 following the October stock market
decline, at which time the founders perceived an opportunity for the creation of
a high quality investment bank serving emerging growth and small capitalization
corporate clients and investors. Since its inception, the Company's plan has
been to develop a high quality firm serving this market niche. Since October
1990, when GKN managed its first underwriting, GKN has acted as managing or
co-managing underwriter in a total of 43 public offerings, raising approximately
$430 million.
The Company anticipates that acquisitions will be an integral part of its
future growth. In November 1995, the Company acquired all of the outstanding
stock of Shochet, a full-service discount brokerage firm with four branches
operating in Southern Florida. Shochet has been in business since 1980. During
the twelve-month period ended January 31, 1996, Shochet generated approximately
$5.5 million in revenue (only $1,128,000 of which is included in the Company's
financial statements for the year ended January 31, 1996). The Shochet
acquisition was the Company's first in the investment banking and securities
brokerage business.
The Company has also grown recently by expanding into other areas of
business. In March 1995, GKN Fund entered the money management business by
becoming the general partner and administrator of Kaleidoscope Partners, L.P., a
"fund of funds" with approximately $8.1 million in assets at April 30, 1996. In
February 1996, GKN AG commenced operations in Zurich, Switzerland, distributing
securities and providing brokerage services to European institutional money
managers.
The Company intends to continue its emphasis on investment banking
opportunities for emerging growth and small capitalization companies. While
enhancing this core capability, the Company plans to further expand its related
distribution, brokerage, research, money management and merchant banking
functions, either through internal growth or by acquisition.
BROKERAGE AND DISTRIBUTION ACTIVITIES
A significant portion of the Company's revenues are derived from
commissions, concessions, mark-ups and mark-downs (collectively "commissions").
For the fiscal year ended January 31, 1996, commissions accounted for
approximately 70.6% of the Company's revenues. Commissions are charged to the
Company's individual and institutional clients for executing buy and sell orders
of securities on national and regional exchanges and in the over-the-counter
("OTC") markets. When a buy or sell order for a security in which GKN makes a
market or has inventory is received, GKN may act as a principal and purchase
from, or sell to, its customers the desired security on a disclosed basis at a
price set in accordance with applicable securities regulations. The Company's
brokerage and distribution activities are performed through GKN, Shochet and GKN
AG, its brokerage subsidiaries. As of April 30, 1996, these brokerage
subsidiaries employed an aggregate of 260 registered representatives and
serviced more than 27,000 active customer accounts. Each of these brokerage
subsidiaries serves a diverse clientele with different investment
characteristics.
GKN
As of April 30, 1996, GKN had 214 registered representatives located in five
offices in New York City and Great Neck, New York, Stamford, Connecticut, and
Boca Raton and Miami, Florida. During fiscal 1996, GKN's registered
representatives generated approximately $29,500,000 in commissions on
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secondary trades and $6,000,000 in sales concessions on public offerings and
private placements (such $6,000,000 are included in Investment Banking Revenues
on the Company's Financial Statements). GKN's sales force serves a clientele
which is primarily composed of individuals who invest primarily in OTC equity
securities. GKN intends to expand its brokerage business through the continued
recruitment and hiring of additional registered representatives for existing
offices, as well as potentially opening or acquiring additional offices in new
geographic locations. GKN believes that it can add an aggregate of approximately
45 brokers in its various branch offices without acquiring any additional space.
Shochet
As of April 30, 1996, Shochet had 45 registered representatives located in
four offices in Hallandale, Miami Beach, South Miami and Tamarac, Florida.
During fiscal 1996, Shochet's registered representatives generated approximately
$5 million in commissions, primarily on secondary trades. Shochet sets
commissions to its customers on a discounted basis. The clientele served by
Shochet's registered representatives is generally older, retired individuals who
invest in exchange-listed equity securities, fixed income securities and mutual
funds. The Company intends to expand Shochet's business through the recruitment
and hiring of additional registered representatives for existing offices, as
well as potentially opening or acquiring additional offices in new geographic
locations.
GKN AG
In February 1996, the Company opened its first international office in
Zurich, Switzerland, through GKN AG. The primary emphasis of this office is to
serve European institutional money managers and clients investing in U.S.-traded
small capitalization equity securities. GKN AG currently has one registered
representative. The Company plans to expand its international operations through
the recruitment and hiring of additional registered representatives and
potentially opening additional international offices.
Institutional Sales
Historically, institutional sales have represented an insignificant source
of revenue for GKN. During 1995, GKN established an Institutional Sales
Department to develop and service institutional money manager clients. The firm
intends to expand this business through the recruitment and hiring of additional
registered representatives, the development of new institutional client
relationships and the potential acquisition of brokerage firms whose primary
emphasis is serving institutional clients.
INVESTMENT BANKING ACTIVITIES
Corporate Finance
GKN's investment banking revenues are principally derived from managing or
co-managing public offerings of equity securities, although the private
placement of equity or equity-related securities for both private and
publicly-held companies has recently become an increasingly important source of
investment banking revenues. For the fiscal year ended January 31, 1996,
investment banking activities, including sales concessions, accounted for
approximately 14.0% of the Company's revenues. The Company's underwriting
activities have historically focused on public equity underwritings for small
capitalization, emerging growth companies in a variety of industries. GKN
believes that its expertise and proven ability to assist emerging growth
companies (which often have limited access to other sources of capital) has
created a significant source of ongoing and potential new investment banking
clients. GKN intends to continue this small capitalization emphasis,
concentrating its activities on certain core industries, initially the
communications/technology and leisure/ entertainment/recreation industries.
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In 1993, GKN developed and introduced a new publicly-traded financing
vehicle known as the Specified Purpose Acquisition Company(R) ("SPAC(R)"). A
SPAC combines the characteristics of a traditional acquisition or buyout fund
and a more liquid, publicly traded industry-specific investment vehicle. The
purpose of a SPAC is to acquire an operating business in a specified target
industry. Each SPAC is managed by a management team combining operating
experience and mergers and acquisitions expertise in the specified target
industry. SPACs feature important investor safeguards, including (i) a
conversion right which entitles SPAC common stock investors to the return of a
substantial portion of their initial investment (81%, plus interest) should a
target acquisition not be made within 24 months from the closing of the SPAC's
public offering, (ii) a requirement that 90% of the net proceeds of the SPAC
offering be placed in trust and invested in short-term government securities and
released only upon the successful consummation by the SPAC of the acquisition of
a target business or the liquidation of the SPAC (the balance of the net
proceeds are used to pay the costs incurred in connection with identifying and
evaluating prospective acquisition candidates, and structuring, negotiating and
consummating a business combination), (iii) a requirement for stockholder
approval by the outside stockholders of the target acquisition and (iv) various
other requirements eliminating or reducing potential conflicts of interests
between SPAC management and the investors in SPAC offerings. Since the
introduction of the SPAC, GKN has lead-managed public offerings for thirteen
SPACs, raising approximately $170 million in aggregate gross proceeds. As of the
date of this Prospectus, nine of the 13 SPACs have consummated their mergers,
one SPAC is in the process of liquidation, two mergers are pending and one SPAC
management team continues its acquisition search.
The Company is not currently involved in any new SPAC offerings and
currently does not expect that future SPAC offerings, if any, will represent a
material portion of its revenues from investment banking activities in
subsequent periods.
Corporate Advisory
To date, the Company has not derived significant revenues from corporate
advisory services. Through its relationships with its investment banking
clients, GKN intends to expand this business with a concentration on mergers and
acquisitions, strategic partnering, fairness opinions and corporate
recapitalizations.
Syndicate
GKN has a Syndicate Department which has historically served as an
additional source of product (through selling group or underwriter
participation) for distribution through the Company's various distribution
channels. GKN anticipates that the emphasis of this department will shift to
enhance the marketing and distribution of GKN's underwritings to other
broker-dealers. To date, revenues generated by the Syndicate Department have
been insignificant.
PRINCIPAL TRANSACTIONS
A portion of GKN's revenue is derived from various principal trading
activities, including making markets in equity securities, proprietary position
trading, and the results of an investment account. For the fiscal year ended
January 31, 1996, these activities accounted for 13.2% of the Company's
revenues.
Market Making
GKN's market making activities have been primarily an accommodation to its
retail customers. Inventories of securities are carried to facilitate brokerage
transactions with customers and other dealers and principal transactions with
customers are effected at prices in accordance with applicable security
regulations. As of April 30, 1996, GKN made markets in more than 80 securities.
For the fiscal year ended January 31, 1996, principal transactions related to
securities in which GKN makes a market, including realized and unrealized gains
and losses, accounted for $818,000, or 1.9%, of the Company's revenues.
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Proprietary Trading
Historically, GKN has devoted insignificant amounts of capital and derived
insignificant revenues from taking proprietary trading positions. During fiscal
1996, GKN employed a maximum of $1 million of capital at any one time to
proprietary trading positions. GKN intends to increase its capital allocation to
principal trading activities after this Offering.
Investment Account
In connection with its investment banking activities, GKN usually receives
warrants which entitle it to purchase securities of the companies for which GKN
raises capital or provides advisory services. These warrants, which are placed
in GKN's investment account, vary in value based upon the market prices of the
underlying securities. Warrants are usually exercisable for four years beginning
one year after issuance and are valued by management based on a significant
discount to the current market values of the underlying securities. As of April
30, 1996, GKN owned warrants to purchase securities of 45 companies for which it
has performed investment banking services. These warrants had an underlying
market value of $3,143,000, as of April 30, 1996, of which GKN recognized
$1,779,000 in value, or 56.6%. During the fiscal year ended January 31, 1996 and
quarter ended April 30, 1996, GKN recognized gains (both realized and
unrealized) on such warrants of $4,865,000, or 11.3% of revenues, and $924,000,
or 5.0% of revenues, respectively. From inception through April 30, 1996, GKN
has recognized, in the aggregate, more than $9,100,000 in realized and
unrealized gains from such warrants.
RESEARCH SERVICES
GKN's research activities are an integral part of, and provide significant
support to, its investment banking, and securities brokerage activities.
Research services are directed primarily towards creating support, sponsorship
and independent analysis for the securities of companies which have been
underwritten by GKN and identifying attractive investment opportunities in the
securities of other companies. The research department conducts a review and
analysis of fundamental elements of individual company performance, industry
trends and economic events and incorporates its findings into published reports.
GKN distributes its research publications through each of its brokerage
subsidiaries--GKN, Shochet and GKN AG.
OTHER RETAIL PRODUCTS AND SERVICES
GKN is a registered Investment Adviser under the Investment Advisers Act of
1940 and provides retirement planning and mutual fund investment services
through its Retirement Services department. This department assists clients with
establishing retirement plans tailored to their specific needs, solving problems
with their existing plans, locating appropriate plan administrators, and
performing asset allocation studies for investment allocations. Retirement
services also sources and administers the relationships with third party mutual
funds, as well as advising customers concerning such investments. In February
1996, GKN introduced a "wrap-investment" product known as "NavigatorTM."
Navigator performs asset allocation models for customers based on their
individual risk profiles. Based upon each investor's specific model results,
investments are made in a number of specified third party mutual funds. To date,
revenues generated by retirement services and mutual fund investments have been
insignificant.
Both Shochet and GKN source and execute buy and sell orders for fixed income
securities, which are purchased on an agency or principal basis. Amounts
retained in inventory overnight and on an intraday basis are not significant.
During fiscal 1996, the execution of buy and sell orders for fixed income
securities accounted for 12% of Shochet's revenues and an insignificant
percentage of GKN's revenues.
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MONEY MANAGEMENT
In 1995, the Company entered the money management business through the
establishment of GKN Fund Management, Inc., which serves as the general partner
and administrator of Kaleidoscope Partners, L.P. ("Kaleidoscope"), a "fund of
funds" investment partnership which invests its capital in other funds managed
by independent money managers. The primary investment objective of Kaleidoscope
is to achieve superior investment returns and diversification by placing its
capital in a number of different carefully selected investment funds. As of
April 30, 1996, Kaleidoscope had total assets of approximately $8.1 million
invested in eight independent funds. GKN intends to expand its money management
activities after this Offering.
MERCHANT BANKING
The Company intends to enter into the merchant banking business by using a
portion of the proceeds of this Offering to invest in development-stage and
operating companies. Such investments may represent a minority or controlling
interest in the subject companies. It is anticipated that most companies in
which investments would be made will be privately-held at the time of the
investment. The Company will attempt to focus on those companies for which GKN
might be willing to manage offerings sometime after the Company's original
investment. As of the date of this Prospectus, the Company has no specific plans
with respect to any particular investment opportunity.
MARKETING STRATEGY
In October 1987, after the stock market decline, the founders of the Company
perceived an opportunity for the creation of a high-quality investment bank
serving emerging growth and small capitalization corporate clients and
investors. Since its inception, the Company's plan has been to develop a
high-quality firm serving this market niche. The Company's marketing strategy is
to capitalize on this positioning within this market niche.
When marketing its services to prospective investment banking clients, GKN
highlights the success of its prior underwritings and refers the principals of
the prospective clients to principals of existing and prior investment banking
clients. When marketing to prospective brokerage clients, GKN promotes its small
capitalization market niche and attempts to distinguish itself from other
similar investment banks through its research and other services.
CLEARING AGENT
The Company's brokerage subsidiaries currently utilize, on a fully disclosed
basis, the services of Schroder Wertheim & Co. Incorporated as its clearing
agent, which, on a fee basis, processes all securities transactions and
maintains the accounts of its customers. Customer accounts are protected through
the Securities Investor Protection Corporation for up to $500,000, of which
coverage for cash balances is limited to $100,000. Additional protection is
provided by the clearing agent through Aetna Casualty and Surety Co. for up to
$25,000,000 per account. The services of the clearing agent include billing,
credit control, receipt, and custody and delivery of securities. The clearing
agent provides operational support necessary to process, record, and maintain
securities transactions for the Company's brokerage and distribution activities.
The clearing agent provides these services to the Company and its customers at a
total cost which is less than it would cost the Company to process such
transactions on its own.
CUSTOMER CREDIT
The clearing firm for the Company's brokerage subsidiaries lends funds to
the Company's customers through the use of margin credit. These loans are made
to customers on a secured basis, with the clearing firm maintaining collateral
in the form of saleable securities, cash or cash equivalents.
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Under the terms of the clearing agreements, the Company's brokerage subsidiaries
indemnify the clearing firm for any loss on these credit arrangements. As of
April 30, 1996, the Company had $52 million of margin credit outstanding to its
customers through its clearing firm. In the fiscal year ended January 31, 1996,
the Company's losses from the margin credit activity were de minimus, while net
interest earned totaled $199,000.
RISK MANAGEMENT/CONTROL STRUCTURE
The Company maintains a management structure which includes an Operating
Committee, which meets weekly to monitor the results of operations, levels of
risk exposure and other key management decisions. Additionally, the Company
maintains a rigorous and comprehensive risk management and control structure for
all three operating brokerage subsidiaries through its risk management group,
legal and compliance departments, and financial control mechanisms.
Risk Management Group
In conjunction with the staff of the clearing agent, the Company monitors
and maintains firm-wide and customer margin credit and securities concentration
exposure, and monitors firm adherence to the appropriate securities and lending
regulations. Position limits in trading and inventory accounts are established
and monitored on an ongoing basis. Current and proposed underwriting, corporate
development and other commitments are subject to due diligence reviews by senior
management and, if appropriate, professionals in the appropriate industry.
Legal and Compliance
The Company currently maintains a full time staff of seven individuals,
including two attorneys, in its legal and compliance departments to monitor the
Company's compliance position. These individuals are supplemented by the daily
compliance and control functions of the local branch managers. As the Company
continues to expand, it intends to appropriately increase the relative size of
these departments.
Financial Control Group
The Company's finance and accounting department, consisting of nine
full-time staff, maintains a comprehensive system of internal controls
concerning its financial, operational and trading activities.
GOVERNMENT REGULATION
The securities business is subject to extensive and frequently changing
federal and state laws and substantial regulation under such laws by the
Commission and various state agencies and self-regulatory organizations, such as
the NASD. GKN and Shochet are registered as broker-dealers with the Commission
and are member firms of the NASD. Much of the regulation of broker-dealers has
been delegated to self-regulatory organizations, principally the NASD, which has
been designated by the Commission as the Company's primary regulator. The NASD
adopts rules (which are subject to approval by the Commission) that govern its
members and conducts periodic examinations of member firms' operations.
Securities firms are also subject to regulation by state securities
administrators in those states in which they conduct business. GKN is registered
as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico.
Shochet is registered as a broker-dealer in 15 states.
Broker-dealers are subject to regulations which cover all aspects of the
securities business, including sales methods and supervision, trading practices
among broker-dealers, use and safekeeping of customers' funds and securities,
capital structure of securities firms, record keeping and the conduct of
directors, officers and employees. Additional legislation, changes in rules
promulgated by the Commission and self-regulatory organizations, or changes in
the interpretation or enforcement of existing laws and rules, may directly
affect the mode of operation and profitability of broker-dealers.
29
<PAGE>
The Commission, self-regulatory organizations and state securities commissions
may conduct administrative proceedings which can result in censure, fine, the
issuance of cease-and-desist orders or the suspension or expulsion of a
broker-dealer, its officers or employees. The principal purpose of regulation
and discipline of broker-dealers is the protection of customers and the
integrity of the securities markets.
GKN AG is subject to certain Swiss Federal and Cantonal (State) laws.
Securities trading and brokerage in Switzerland is currently governed by the
provisions of Cantonal law. Residing in Zurich, Switzerland, GKN AG is regulated
by The Law on Professional Trading of Securities in the Canton of Zurich. In
order to transact security trades in Switzerland, GKN AG must be granted a
"B-license." GKN AG has made application for such license and believes that it
will be granted the license in the near future; however, there can be no
assurances that GKN AG will receive the license. In the interim, the brokerage
of securities are executed and settled through GKN's principal office in New
York City.
Under The Law on Professional Trading of Securities, GKN AG must initially
have equity capital equal to 500,000 Swiss francs (approximately $400,000).
According to the draft of the Ordinance to the Federal Stock Exchange and
Security Dealer's Law, the equity capital will have to be increased to the
amount of 1,500,000 Swiss francs (approximately $1,200,000). Distributions of
equity capital by GKN AG are governed by the Swiss Code of Obligations, wherein
any distributions are limited to profits or reserves created for such purpose.
GKN AG was initially capitalized in February 1996 with 500,000 Swiss francs
(approximately $400,000). If the equity capital of GKN AG and its legal reserves
fall to less than half the initial requirement, it must be recapitalized. (Swiss
francs have been converted to U.S. dollars in the foregoing parentheticals
utilizing the July 1, 1996 spot rate.)
Net Capital Requirements
As registered broker-dealers and member firms of the NASD, GKN and Shochet
are subject to the Commission's net capital rule. The net capital rule, which
specifies minimum net capital requirements for registered brokers and dealers,
is designed to measure the general financial integrity and liquidity of a
broker-dealer and requires that at least a minimum part of its assets be kept in
relatively liquid form. Net capital is essentially defined as net worth (assets
minus liabilities), plus qualifying subordinated borrowings and less certain
mandatory deductions that result from excluding assets not readily convertible
into cash and from valuing certain other assets, such as a firm's positions in
securities, conservatively. Among these deductions are adjustments in the market
value of securities to reflect the possibility of a market decline prior to
disposition.
GKN has elected to compute its net capital using the alternative method
permitted by the Rule, which requires that GKN maintain minimum net capital, as
defined, to be greater than or equal to, $250,000. At April 30, 1996, GKN had
net capital of $10,807,000, which was $10,557,000 in excess of required net
capital of $250,000.
Shochet has elected to compute net capital under the standard aggregate
indebtedness method permitted by the Rule, which requires that the ratio of
aggregate indebtedness to net capital, both as defined, shall not exceed
15-to-1. At April 30, 1996, Shochet had net capital and a net capital
requirement of $491,000 and $100,000, respectively. Shochet's net capital ratio
was 0.75-to-1.
Failure to maintain the required net capital may subject a firm to
suspension or expulsion by the NASD, the Commission and other regulatory bodies
and ultimately may require its liquidation. The net capital rule also prohibits
payments of dividends, redemption of stock and the prepayment or payment in
respect of principal of subordinated indebtedness if net capital, after giving
effect to the payment, redemption or repayment, would be less than specified
percentage (120%) of the minimum net capital requirement. Compliance with the
net capital rule could limit those operations of the Company's brokerage
subsidiaries that require the intensive use of capital, such as underwriting and
trading activities, and also could restrict the Company's ability to withdraw
capital from its operating
30
<PAGE>
subsidiaries, which in turn, could limit the Company's ability to pay dividends,
repay debt and redeem or purchase shares of its outstanding capital stock.
COMPETITION
The Company encounters intense competition in all aspects of the securities
business and competes directly with other securities firms, a significant number
of which have greater capital and other resources. In addition to competition
from firms currently in the securities business, there has recently been
increasing competition from other sources, such as commercial banks and
insurance companies offering financial services, and from other investment
alternatives. The Company believes that the principal factors affecting
competition in the securities industry are the quality and abilities of
professional personnel, including their ability to effectuate a firm's
commitments, and the quality, range and relative prices of services and products
offered.
OTHER OPERATIONS
Historically, the Company has maintained limited operations in the
acquisition, management, syndication and operation of real estate projects,
through its subsidiaries, GKN Realty Corp. and GKN Property Management, Inc. To
date, the operations of GKN Realty and GKN Property have had no significant
impact on the Company. The Company intends to wind down its real estate
operations over the next several years.
PERSONNEL
At April 30, 1996, the Company had 469 full-time employees, including 260
registered representatives. None of the Company's personnel is covered by a
collective bargaining agreement. The Company considers its relationships with
its employees to be very good.
PROPERTIES
The principal executive offices of the Company and GKN are located at 61
Broadway, New York, New York 10006 where the Company leases or subleases
approximately 25,000 square feet of office space. The sublease and leases for
these premises all expire in February 1998. The following information relates to
the branch offices of GKN and Shochet:
GKN
<TABLE>
<CAPTION>
OFFICE LOCATION APPROXIMATE SQUARE FOOTAGE EXPIRATION
- --------------------------------------------------- -------------------------- ---------------
<S> <C> <C>
Boca Raton, Florida................................ 10,000 October 1999
1,500 October 1997
Great Neck, New York............................... 5,000 September 1998
Stamford, Connecticut.............................. 5,000 November 2004
Miami, Florida..................................... 4,000 June 2003
</TABLE>
Shochet
<TABLE>
<CAPTION>
OFFICE LOCATION APPROXIMATE SQUARE FOOTAGE EXPIRATION
- --------------------------------------------------- -------------------------- ---------------
<S> <C> <C>
Hallandale, Florida................................ 5,000 February 2006
Miami Beach, Florida............................... 3,000 April 1998
South Miami, Florida............................... 3,000 November 1998
Tamarac, Florida................................... 3,000 June 2001
</TABLE>
31
<PAGE>
LEGAL PROCEEDINGS
Many aspects of the Company's business involve substantial risks of
liability, including exposure under federal and state securities laws in
connection with the underwriting and distribution of securities. The Company
does not presently maintain an errors and omissions insurance policy insuring it
against these risks. In recent years, there has been an increasing incidence of
litigation involving the securities industry, including class actions which
generally seek rescission and substantial damages. Additionally, securities
brokerage firms, including the Company, become parties to arbitrations brought
by dissatisfied customers in the general course of business.
GKN is the subject of an SEC staff investigation that arose primarily from
certain sales practices and the supervision of certain registered
representatives in 1991 and 1992. GKN expects to submit to the Commission
shortly an Offer of Settlement that has been discussed with the SEC staff. There
is no assurance that the SEC staff will support the proposed settlement nor that
the Commission will agree to it. Under the proposed Offer of Settlement, without
admitting or denying the findings, GKN would agree to the entry of an Order
finding that, during 1991 and 1992, GKN and Robert Gladstone failed reasonably
to supervise a number of registered representatives with a view to preventing
certain securities law violations. The proposed Order would recite that from
1990 through 1992, GKN hired a large number of registered representatives and
that the number of customer complaints received by GKN rose substantially and
included multiple complaints against certain of the registered representatives.
The proposed Order would also contain GKN's representation that, since the
latter part of 1992, it has undertaken a number of specific efforts to improve
its supervisory and compliance systems and its undertaking to maintain these
policies and procedures. Under the terms of the proposed settlement, GKN would
pay a penalty of $100,000, implement and maintain the policies and procedures
previously undertaken, and retain an independent consultant to conduct a review
of the firm's policies and procedures and report its recommendations to GKN and
the SEC staff. GKN has agreed (subject to certain safeguards) to adopt the
independent consultant's recommendations. Under the proposed settlement, Robert
Gladstone would pay a $50,000 penalty and agree not to be associated in a
supervisory capacity with any broker-dealer, municipal securities dealer,
investment company or investment adviser (with a right to reapply after 18
months). Mr. Gladstone would remain an officer and principal stockholder of the
Company. The terms of the Offer of Settlement, are the subject of continuing
discussions with the SEC staff and there is no assurance that any proposed
settlement will be accepted by the SEC staff.
GKN is the subject of an NASD staff investigation which, the Company
believes, arises primarily from mark-ups and mark-downs taken on customer
transactions in warrants of certain issuers whose offerings were managed by GKN,
and sales practices in connection with such transactions. The purpose of the
investigation is to determine whether GKN or any persons associated with the
firm have engaged in any violation of the federal securities laws or the NASD
Rules of Fair Practice. The NASD staff has not advised GKN whether it intends to
recommend any enforcement action and GKN cannot predict when the investigation
might end, or its outcome. GKN is cooperating fully with the NASD staff in the
investigatory process. The NASD has broad authority to sanction persons subject
to its jurisdiction, including the levying of financial penalties, disgorgement,
the imposition of censures, suspensions or bars on its supervisors and
principals, and the imposition of sanctions. Accordingly, the outcome of the
NASD investigation could restrict GKN's business activities, have a substantial
adverse financial impact on GKN and otherwise have a material adverse effect on
the Company.
In addition, the outcome of the SEC and NASD investigations could generate
adverse publicity which in turn could have a material adverse effect on the
Company's operations.
32
<PAGE>
MANAGEMENT
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------- --- -----------------------------------------------
<S> <C> <C>
David M. Nussbaum................. 42 Chairman of the Board and Chief Executive
Officer of the Company and GKN
Roger N. Gladstone................ 42 President and Director of the Company and GKN
Peter R. Kent..................... 43 Chief Operating Officer, Chief Financial
Officer and Director of the Company and GKN
Lester Rosenkrantz................ 55 Executive Vice President and Director of the
Company and GKN
Robert H. Gladstone............... 38 Executive Vice President of the Company and GKN
James I. Krantz................... 41 Director of the Company
John P. Margaritis................ 47 Director of the Company*
Arnold B. Pollard................. 53 Director of the Company*
</TABLE>
- ------------
* Will become a Director upon consummation of the Offering.
DAVID M. NUSSBAUM has been Chairman of the Board and Chief Executive Officer
of the Company since September 1990 and a Director of the Company since January
1987. He is also Chairman of the Board and Chief Executive Officer of GKN and is
the principal executive officer of GKN's New York operations. He is also a
director of Shochet and a director and executive officer of GKN Fund. Mr.
Nussbaum serves on the Board of Arbitrators of the National Association of
Securities Dealers, Inc. He is also a member of the Young Presidents
Organization and a member of the Board of Directors of the Sid Jacobson Jewish
Community Center in Roslyn, New York. From 1984 through 1986, Mr. Nussbaum was
engaged primarily in the acquisition, management, syndication and operation of
real estate projects. In connection with Mr. Nussbaum's real estate activities,
he was an executive officer and director of the corporate general partners of
River Village Associates ("River Village") and Frontage Realty Limited
Partnership ("Frontage"), limited partnerships formed to acquire real estate.
River Village and Frontage filed for protection under Chapter 11 of the
bankruptcy law in 1992 and 1993, respectively. From 1980 through 1984, Mr.
Nussbaum was engaged in the private practice of law at the firm of Rosenman
Colin Freund Lewis & Cohen in New York. Mr. Nussbaum graduated from the
University of Michigan, magna cum laude. He received his law degree (cum laude;
Order of the Coif) from New York University School of Law.
ROGER N. GLADSTONE has been President and a Director of the Company since
January 1987. He is also President and a Director of GKN and is the principal
executive officer of GKN's Florida operations. He is also a director and
executive officer of Shochet, GKN AG and GKN Fund. Mr. Gladstone serves on the
Board of Arbitrators of the National Association of Securities Dealers, Inc. He
is also a member of the Young Presidents Organization and a member of the Board
of Directors of the Sid Jacobson Jewish Community Center in Roslyn, New York.
Mr. Gladstone is the Director of No Small Affair South, a charitable foundation
which provides positive experiences for disadvantaged children. From 1984
through 1986, Mr. Gladstone was engaged primarily in the acquisition,
management, syndication and operation of real estate projects. Mr. Gladstone was
an executive officer and director of the corporate general partners of River
Village and Frontage. River Village and Frontage filed for protection under
Chapter 11 of the Bankruptcy law in 1992 and 1993, respectively. From 1980
through 1984, Mr. Gladstone was engaged in the private practice of law in New
York. Mr. Gladstone graduated from Stanford University. He received his Masters
Degree in Business Administration from New York University and his law degree
from the Benjamin N. Cardozo School of Law, Yeshiva University.
33
<PAGE>
PETER R. KENT has been Chief Financial Officer of the Company and GKN since
July 1995, Chief Operating Officer of the Company and GKN since February 1996
and a Director of the Company and GKN since May 1996. He has also served as
Chief Financial Officer and director of Shochet since its acquisition in
November 1995. From September 1991 through February 1995, Mr. Kent served
initially as Chief Financial Officer, and subsequently as President, Chairman of
the Board, and Chief Executive Officer, of Consolidated Waste Services of
America, Inc., a solid waste management and recycling company. From 1988 until
1991, Mr. Kent was employed by the securities firm of Wessels, Arnold &
Henderson, where he served as a member of the Corporate Finance Department in
charge of its Environmental Services Group. From 1984 to 1988, Mr. Kent was
employed by Henry Ansbacher, Inc., a firm involved in the field of media mergers
and acquisitions, initially as Chief Financial Officer and subsequently, as its
President and Chief Operating Officer. Previous to 1984, Mr. Kent had been
employed by Sutro & Co. Incorporated, Wells Fargo Bank, and Arthur Andersen &
Co. Mr. Kent is a Certified Public Accountant. Mr. Kent graduated from the
University of California at Berkeley, where he also received his Masters in
Business Administration.
LESTER ROSENKRANTZ has been a Director and Executive Vice President of the
Company and GKN since February 1994. Mr. Rosenkrantz was Vice Chairman and
Director of Corporate Finance of Reich & Co., Inc. (formerly Vantage
Securities), a member of the New York Stock Exchange ("NYSE"), from November
1990 until January 1994. He has also served in various management positions at
Rosenkrantz, Lyon and Ross, Incorporated, a NYSE member firm from 1973 to 1990,
serving as Vice Chairman at the time of completion of his tenure. Mr.
Rosenkrantz was employed by Andresen & Company from 1963 to 1973, lastly as a
General Partner and head of institutional and retail sales. Mr. Rosenkrantz
graduated from Pennsylvania State University.
ROBERT H. GLADSTONE has been the Executive Vice President of the Company
since November 1993 and a Director of the Company from January 1992 to May 1996.
He has also been an executive officer of GKN since January 1990 and is now
Executive Vice President of GKN. Mr. Gladstone was employed by Stuart James &
Co. from July 1984 until December 1989, starting as an account executive,
becoming Branch Manager of the Darien, Connecticut office in January 1986 and
Area Manager supervising four branch offices employing more than 100 registered
representatives in 1989. Prior to July 1984, Mr. Gladstone was an account
executive at Ladenburg, Thalmann & Co. (October 1983 to June 1984) and at
Advest, Inc. (October 1980 to September 1983). Mr. Gladstone graduated from
Boston University. Mr. Gladstone is involved in an SEC Staff investigation of
GKN. Under a proposed settlement, which has been discussed with the SEC Staff,
Mr. Gladstone would pay a $50,000 penalty and agree not to be associated in a
supervisory capacity with any broker-dealer, municipal securities dealer,
investment company or investment advisor (with a right to reapply after 18
months). The proposed settlement remains under discussion with the SEC and may
be modified with respect to Mr. Gladstone. Mr. Gladstone would remain an officer
and principal stockholder of the Company. See "Business--Legal Proceedings."
JAMES I. KRANTZ has been a Director of the Company since September 1990.
Since 1977, Mr. Krantz has served as a Property, Casualty and Life Insurance
Broker and has been engaged in real estate management and investment. Mr. Krantz
was an executive officer and director of the corporate general partner of River
Village. River Village filed for protection under Chapter 11 of the bankruptcy
law in 1992. Mr. Krantz is currently President and Chief Executive Officer of
York International Agency, Inc., a full service insurance agency located in
Westchester, New York. Mr. Krantz graduated from Syracuse University. He
received his Chartered Property Casualty Underwriter (CPCU) designation in 1989.
JOHN P. MARGARITIS will become a Director of the Company upon consummation
of this Offering. Mr. Margaritis has been the President and Chief Executive
Officer of Ogilvy Adams & Rinehart, a public relations firm, since January 1994,
and was the President and Chief Operating Officer from January 1992 to January
1994. From July 1988 until January 1992, Mr. Margaritis was
34
<PAGE>
Chairman and Chief Executive Officer of Ogilvy & Mathers, Public Relations. Mr.
Margaritis is a director of the Young President's Organization/Metro Chapter,
the Arthur Ashe Institution for Urban Health and Research America, a non-profit
organization to promote government's support of medical research. Mr. Margaritis
is a member of the President's Advisory Counsel for the Museum of Television and
Radio. Mr. Margaritis is also a trustee of Washington and Jefferson College. Mr.
Margaritis graduated from Washington and Jefferson College and received his
masters degree from the New School for Social Research.
ARNOLD B. POLLARD will become a Director of the Company upon consummation of
this Offering. Since 1993, he has been the President and Chief Executive Officer
of Chief Executive Group, which publishes "Chief Executive" magazine. For nearly
20 years, he has been President of Decision Associates, a management consulting
firm specializing in organizational strategy and structure. Mr. Pollard was a
founding member of the Strategic Decision Analysis Group of SRI, a company
engaged in management consulting and contract research. From 1989 to 1991, Mr.
Pollard served as Chairman and Chief Executive Officer of Biopool International,
a biodiagnostic company focusing on blood related testing. From 1970 to 1973,
Mr. Pollard served as an adjunct professor at the Columbia Graduate School of
Business. Mr. Pollard graduated from Cornell University (Tau Beta Pi) and
received his Masters and Ph.D degrees from Stanford University.
The Board of Directors of the Company is divided into three classes, each of
which generally serves for a term of three years, with only one class of
directors being elected in each year. The term of the office of the first class
of directors (Class I), presently consisting of Lester Rosenkrantz , James
Krantz and Arnold Pollard will expire in 1997; the term of the second class of
directors (Class II), presently consisting of Peter R. Kent and John Margaritis,
will expire in 1998; and the term of office of the third class of directors
(Class III), presently consisting of David M. Nussbaum and Roger N. Gladstone,
will expire in 1999. In each case, each director will hold office until the next
meeting of stockholders at which his/her class of directors is to be elected or
until his/her successor is duly appointed and qualified. Roger N. Gladstone is
the brother of Robert H. Gladstone and the brother-in-law of David M. Nussbaum.
No other family relationships exist between any executive officers or directors
of the Company or its subsidiaries.
The Board of Directors has designated an Audit Committee of the Board of
Directors consisting initially of Mr. Peter R. Kent, Mr. John P. Margaritis and
Mr. Arnold B. Pollard, which will review the performance of the independent
accountants as auditors for the Company, discuss and review the scope and the
fees of the prospective annual audit and review the results with the auditors.
The Board of Directors has designated a Compensation Committee of the Board of
Directors consisting initially of Mr. David M. Nussbaum, Mr. John P. Margaritis
and Mr. Arnold B. Pollard, which will review and make recommendations to the
Board regarding salaries, compensation and benefits (other than with respect to
the 1991 Plan and IC Plan) of executive officers and key employees of the
Company. The Board of Directors has also designated an Employee Incentive
Committee of the Board of Directors consisting initially of Mr. James Krantz,
Mr. John P. Margaritis and Mr. Arnold B. Pollard, which will administer and make
all decisions with respect to the grant of awards under, the 1991 Plan and IC
Plan. The responsibilities of the aforementioned committees will commence upon
the consummation of this Offering.
It is anticipated that Messrs. Margaritis and Pollard will be paid $2,500
per fiscal quarter during their terms as directors.
35
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued, during the
fiscal years ended January 31, 1996, 1995 and 1994, to the Chief Executive
Officer of the Company and the four most highly compensated executive officers
(other than the Chief Executive Officer) whose compensation was $100,000 or
greater during the fiscal year ended January 31, 1996 ("Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
FISCAL -------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS COMPENSATION (1)
- ------------------------------------ ------ -------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
David M. Nussbaum................... 1996 $240,000 $250,000 20,000 $521,000
Chairman of the Board and Chief 1995 240,000 50,000 -0- 482,000
Executive Officer of the 1994 163,000 -0- -0- 811,000
Company and GKN
Roger N. Gladstone.................. 1996 240,000 250,000 20,000 534,000
President of the Company and GKN 1995 240,000 50,000 -0- 505,000
1994 163,000 -0- -0- 775,000
Peter R. Kent (2)................... 1996 92,000 85,000 70,000 -0-
Chief Operating and Financial 1995 -0- -0- -0- -0-
Officer of the Company 1994 -0- -0- -0- -0-
and GKN
Lester Rosenkrantz (3).............. 1996 150,000 20,000 -0- 19,000
Executive Vice President of the 1995 150,000 15,000 25,000 26,000
Company and GKN 1994 -0- -0- -0- -0-
Robert H. Gladstone................. 1996 240,000 250,000 20,000 549,000
Executive Vice President of the 1995 240,000 50,000 -0- 553,000
Company and GKN 1994 $138,000 $ -0- -0- $829,000
</TABLE>
- ------------
(1) Primarily commissions paid on the brokerage of securities.
(2) Mr. Kent began employment with the Company on July 24, 1995.
(3) Mr. Rosenkrantz began employment with the Company on February 1, 1994.
36
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth each grant of stock options made by the
Company during the fiscal year ended January 31, 1996 to each of the Named
Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/
UNDERLYING SARS GRANTED TO EXERCISE PRICE
OPTION/SARS EMPLOYEES IN OR BASE PRICE EXPIRATION 5% 10%
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE (1) (1)
- ---------------------------- ----------- --------------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
David M. Nussbaum........... 20,000(2) 5.42% $ 4.95 1/31/00 $ 27,400 $ 60,800
Chairman of the Board and
Chief Executive Officer
of the Company and GKN
Roger N. Gladstone.......... 20,000(2) 5.42% $ 4.95 1/31/00 $ 27,400 $ 60,800
President of the Company
and GKN
Peter R. Kent............... 70,000(3) 18.98% $ 4.50 7/23/05 $198,800 $504,000
Chief Operating and
Financial Officer of the
Company and GKN
Lester Rosenkrantz.......... -0- 0% -0- -- -0- -0-
Executive Vice President
of the Company and GKN
Robert H. Gladstone......... 20,000(4) 5.42% $ 4.50 1/31/05 $ 56,800 $144,000
Executive Vice President
of the Company and GKN
</TABLE>
- ------------
(1) Represents potential realizable value at the indicated assumed annual rates
of stock price appreciation for the term of the options.
(2) Options become exercisable in three equal annual installments on December
31, 1996, December 31, 1997, and December 31, 1998.
(3) 22,222 of these options are exercisable. 22,222 become exercisable on each
of July 23, 1996 and July 23, 1997. The remainder become exercisable on July
23, 1998.
(4) Options become exercisable on February 1, 2000. However, in May 1996 these
options were converted into 6,666 options which become exercisable in three
equal annual installments on December 31, 1996, December 31, 1997, and
December 31, 1998. The exercise price and expiration date remain the same.
37
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning the number and value
of unexercised options held by each of the Named Officers as of January 31,
1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
SHARES UNDERLYING UNEXERCISED IN-THE-
ACQUIRED UNEXERCISED OPTIONS/SARS MONEY OPTIONS/SARS
ON AT FISCAL YEAR-END (#)(1) FISCAL YEAR-END (2)
EXERCISE ------------------------------ ---------------------------
NAME (#) EXERCISABLE(3) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- -------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
David M. Nussbaum....................... -0- 250,000 20,000 $1,280,000 $21,000
Chairman of the Board and Chief
Executive Officer of the Company and
GKN
Roger N. Gladstone...................... -0- 250,000 20,000 $1,280,000 $21,000
President of the Company and GKN
Peter R. Kent........................... -0- 22,222 47,778 $33,333 $71,667
Chief Operating and Financial Officer
of the Company and GKN
Lester Rosenkrantz...................... -0- -0- 25,000 -0- -0-
Executive Vice President of the
Company
and GKN
Robert H. Gladstone..................... -0- 125,000 20,000 $650,000 $30,000
Executive Vice President of the
Company
and GKN
</TABLE>
- ------------
(1) Represents shares issuable upon exercise of options granted under the 1991
Plan. See "Management--1991 Employee Incentive Plan."
(2) Based on the difference between the $6.00 assumed initial offering price of
the Shares and the exercise price of the option multiplied by the number of
shares of Common Stock subject to the option.
(3) In May 1996, David M. Nussbaum, Roger N. Gladstone and Robert H. Gladstone
exercised options to purchase 250,000, 250,000 and 125,000 shares,
respectively, at an exercise price of $0.88 per share for David Nussbaum and
Roger Gladstone, and $0.80 per share for Robert Gladstone.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements, dated as of May 1, 1996,
with each of David M. Nussbaum, Roger N. Gladstone and Robert H. Gladstone,
which expire on April 30, 1999. The agreements provide for an annual salary of
$240,000 to each and the issuance to each of up to 15% of any underwriter
warrants issuable to the Company in connection with its corporate finance and
investment banking activities. Messrs. Nussbaum, Gladstone and Gladstone each
receive payments of 20% of the gross brokerage commissions generated under any
of his or each other's customer accounts and they are also entitled to bonuses
under the IC Plan, described below. The Company has entered into an employment
agreement, dated as of May 1, 1996, with Peter R. Kent, which expires April 30,
1999. The agreement provides for an annual salary of $200,000. Mr. Kent is also
entitled to bonuses under the IC Plan. The agreements with Messrs. David
Nussbaum, Roger N. Gladstone, Robert H. Gladstone and Peter R. Kent contain
non-compete provisions which expire one year after termination of employment.
The Company has entered into an employment agreement, dated as of July 1, 1996,
with Lester Rosenkrantz, which expires June 30, 1997. The agreement provides for
an annual salary of $157,500, plus commissions earned. Mr. Rosenkrantz is also
entitled to bonuses under the IC Plan.
38
<PAGE>
UNDERWRITER WARRANTS
As discussed under "Employment Agreements" above, each of David M. Nussbaum,
Roger N. Gladstone and Robert H. Gladstone are issued up to 15% of the
underwriter warrants issuable to GKN in connection with its corporate finance
and investment banking activities (prior to May 1996, each were issued between
15% and 20% of such warrants). Generally, the balance of the underwriter
warrants (55%) are held by GKN, except that in certain circumstances, up to 20%
of the aggregate number of underwriter warrants issued by a client, issued on a
particular deal, may be issued to certain GKN employees involved in the
transaction.
1996 INCENTIVE COMPENSATION PLAN
The Company has established its 1996 Incentive Compensation Plan ("IC Plan")
effective August 1, 1996. The IC Plan establishes an incentive compensation pool
equal to 25% of all pre-tax, pre-incentive compensation profits, once a 10%
pre-tax, pre-incentive return on beginning equity has been achieved. The pool
will be distributed to executive management and business unit managers on the
basis of business unit and individual performance, as determined by the Employee
Incentive Committee of the Board of Directors. It is currently anticipated that
approximately 25% of all awards will be paid in shares of Common Stock.
1991 EMPLOYEE INCENTIVE PLAN
In June 1991, the Company adopted and its stockholders approved the 1991
Plan which, as amended, provides for the issuance of stock, stock options and
other stock purchase rights to executive officers and other key employees and
consultants who render significant services to the Company and its subsidiaries.
The 1991 Plan was adopted to provide the Board of Directors with sufficient
flexibility regarding the forms of incentive compensation which the Company will
have at its disposal to reward these persons. Under the 1991 Plan, both options
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended, and non-qualified options may be granted.
Directors of the Company who are not employees of the Company or its
subsidiaries are not eligible to receive any awards under the 1991 Plan. The
Employee Incentive Committee of the Board of Directors determines the
distribution of awards under the 1991 Plan.
Management believes that, in view of the anticipated expansion of the
Company's operations over the next several years, the Company will be faced with
an increasing need for additional qualified personnel. The Company believes that
its ability to offer employees potential equity ownership through the grant of
stock, stock options and other stock purchase rights will enhance the Company's
ability to attract and retain qualified personnel, without unnecessarily
depleting the Company's cash reserves.
A total of 5,000,000 shares of Common Stock is currently reserved for
issuance under the Plan. At June 30, 1996 there were outstanding options under
the 1991 Plan to purchase an aggregate of 998,506 shares, exercisable at an
average exercise price of $4.62 per share, of which more than half are held by
non-executive officers and other employees of the Company. The Company's
executive officers and directors own options to purchase an aggregate of 152,666
shares of Common Stock at exercise prices ranging from $2.20 per share to $6.00
per share, with expiration dates ranging from January 2000 through July 2005.
OTHER OPTIONS AND WARRANTS
Messrs. Margaritis and Pollard, each of whom will become a director upon the
consummation of this Offering, were awarded options to purchase 10,000 shares of
Common Stock at a price equal to the per share offering price. These options
become exercisable on the day the optionees become directors of the Company and
remain exercisable for a period of ten years.
In connection with the Company's acquisition of Shochet, the Company agreed
to issue to the sellers, upon consummation of this Offering, five-year warrants
to purchase 25,000 shares of Common Stock at an exercise price equal to the
per-share Offering price.
39
<PAGE>
In February 1996, the Company issued warrants to purchase 80,000 shares of
the Company's Common Stock to Mr. Joachim Stahler, the Managing Director of GKN
AG, in connection with his employment by GKN AG. These warrants are exercisable
until January 30, 2001 at the per-share Offering price.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
As permitted by the Delaware General Corporation Law ("DGCL"), the Company's
Restated Certificate of Incorporation limits the personal liability of a
director of the Company for monetary damages for breach of fiduciary duty of
care as a director. Liability is not eliminated for (i) any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) unlawful payment of dividends or stock purchases or
redemptions pursuant to Section 174 of the DGCL, or (iv) any transaction from
which the director derived an improper personal benefit.
The Company's Restated Certificate of Incorporation permits the Company to,
and the Company will, indemnify a director and/or officer of the Company against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
any civil, criminal, administrative or investigative action, suit or proceeding,
including a derivative action, if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interest of the Company, and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful. The Company also has
entered into indemnification agreements with each of its directors and executive
officers. The indemnification agreements provide that the directors and
executive officers will be indemnified to the fullest extent permitted by
applicable law against all expenses (including attorneys' fees), judgments,
fines and amounts reasonably paid or incurred by them for settlement in any
civil, criminal, administrative or investigative action, suit or proceeding,
including a derivative action. No indemnification will be provided under the
indemnification agreements, however, to any director or executive officer in
certain limited circumstances, including on account of knowingly fraudulent,
deliberately dishonest or willful misconduct. To the extent the provisions of
the indemnification agreements exceed the indemnification permitted by
applicable law, such provisions may be unenforceable or may be limited to the
extent they are found by a court of competent jurisdiction to be contrary to
public policy.
40
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of shares of the Company's Common Stock as of June 30, 1996, and as
adjusted to reflect the sale of the Shares offered hereby by (i) each person
known by the Company to own beneficially 5% or more of its outstanding shares of
Common Stock, (ii) each director and director-nominee, (iii) the Chief Executive
Officer and each of the Company's next four most highly compensated executive
officers whose individual compensation exceeded $100,000 in the fiscal year
ended January 31, 1996, and (iv) all directors and executive officers of the
Company as a group. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole voting and investment power with respect to
such shares, subject to community property laws where applicable.
<TABLE>
<CAPTION>
PERCENTAGE
BENEFICIALLY OWNED
SHARES BENEFICIALLY ------------------------
OWNED BEFORE BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OFFERING(2) OFFERING OFFERING
- ------------------------------------------------------------------------ -------- --------
<S> <C> <C> <C>
David M. Nussbaum(3)................................. 1,226,111(4) 21.7% 15.0%
Roger N. Gladstone(3)................................ 1,226,111(4) 21.7% 15.0%
c/o GKN Securities Corp.
433 Plaza Real
Suite 245
Boca Raton, Florida 33432
Peter R. Kent........................................ 44,444(5) * *
Lester Rosenkrantz................................... -0-(6) * *
Robert H. Gladstone(3)(7)............................ 452,778(7) 8.0% 5.5%
James I. Krantz...................................... 152,375(8) 2.7% 1.9%
c/o York International Agency, Inc.
1 Executive Boulevard
Yonkers, NY 10701
John P. Margaritis................................... 10,000(9) * *
c/o Ogilvy, Adams & Rinehart
708 Third Avenue
New York, NY 10017
Arnold B. Pollard.................................... 10,000(9) * *
c/o Chief Executive Magazine
733 Third Avenue
New York, NY 10017
All Executive Officers and Directors (8 persons) 3,121,819 54.9% 38.1%
(10).................................................
</TABLE>
- ------------
* Represents beneficial ownership of less than 1% of the Common Stock.
(1) Unless otherwise indicated, the holders' address is c/o GKN Holding Corp.,
61 Broadway, New York, New York 10006.
(2) Each stockholder has sole voting and sole investment power with respect to
all shares for which beneficial ownership is shown, except where otherwise
indicated.
(3) Roger N. Gladstone and Robert H. Gladstone are brothers. David M. Nussbaum
is Roger N. Gladstone's brother-in-law.
(Footnotes continued on following page)
41
<PAGE>
(Footnotes continued from preceding page)
(4) Does not include shares issuable upon exercise of options to purchase 20,000
shares at $4.95 per share, which become exercisable in three annual
installments commencing December 31, 1996.
(5) Represents shares issuable upon exercise of options at $4.50 per share. Does
not include 25,556 shares issuable upon exercise of options exercisable at
$4.50 per share, which become exercisable in two annual installments
beginning in July 1997.
(6) Does not include 25,000 shares issuable upon exercise of options exercisable
at $6.00 per share, which become exercisable in three equal annual
installments beginning in January 1997.
(7) Includes 50,000 shares issuable upon exercise of options held by Shawn
Gladstone, Robert H. Gladstone's wife, at $2.20 per share. Does not include
2,500 shares issuable upon exercise of other options held by Mrs. Gladstone,
which do not become exercisable until December 1996, and options to purchase
6,666 shares at $4.50 per share, which become exercisable in three annual
installments commencing December 31, 1996.
(8) Includes 3,125 shares held by Mr. Krantz' wife and 10,000 shares issuable
upon exercise of options, 5,000 of which are exercisable at $2.20 per share
and 5,000 of which are exercisable at $6.00 per share. Does not include
shares issuable upon exercise of options to purchase 1,000 shares at $4.50
per share, which become exercisable February 2000.
(9) Includes 10,000 shares issuable upon exercise of options at $6.00 per share.
(10) Includes the shares subject to options and included in the table, as set
forth in footnotes (5), (7), (8), and (9), and excludes those shares
indicated in footnotes (4), (5), (6), (7) and (8) as being excluded
therefrom.
CERTAIN TRANSACTIONS
In March 1991, the Company agreed to lend to Messrs. David M. Nussbaum,
Roger N. Gladstone, James I. Krantz and Jonathan Krantz (James Krantz' brother)
up to an aggregate of $250,000 to cover capital calls made on them in their
capacity as limited partners of Heather Croft Associates Limited Partnership
("Heather Croft"). All such loans are due and payable three years from the date
each loan was made, together with interest at 10% per annum. All such loans had
been repaid as of January 31, 1996. Prior to such repayment, the maximum amount
outstanding under this arrangement, including accrued interest was $305,000.
Messrs. Nussbaum, Gladstone, Krantz and Krantz, in the aggregate, own 66% of the
limited partnership interests of Heather Croft. In consideration of the Company
agreeing to make the above-described loans, each of Messrs. Nussbaum and
Gladstone agreed to pay to the Company, when and as received by him, 25% of any
distributions from Heather Croft (other than repayment of indebtedness) over and
above his original capital contribution to Heather Croft ("Partner's Profits")
and each of James Krantz and Jonathan Krantz agreed to pay 10% of his Partner's
Profits to the Company. As of the date hereof, no Partner's Profits have been
distributed.
The Company has purchased and continues to purchase insurance using York
International Agency, Inc. ("York") as its agent. James Krantz, a director of
the Company, is President and Chief Executive Officer, a director and a
stockholder of York. In the years ended January 31, 1994, 1995 and 1996, the
Company paid premiums for insurance policies purchased through York (a portion
of which amounts are paid by the insurer to York) of $92,000, $114,000 and
$98,000, respectively.
In the fiscal year ended January 31, 1995, the Company loaned Mr. Lester
Rosenkrantz, Executive Vice President and a Director of the Company, an
aggregate of $99,000. An additional $25,000 loan was made in the year ended
January 31, 1996. Mr. Rosenkrantz repaid $10,000 in December 1995 and $20,000 in
March 1996, leaving an aggregate outstanding principal balance as of May 31,
1996 of $94,000. These loans are payable without interest and are collateralized
through the pledge by Mr. Rosenkrantz of his interest in certain underwriter
warrants.
42
<PAGE>
In March 1995, the Company loaned Mr. Roger Gladstone $200,000, which was
repaid by Mr. Gladstone by offset against his salary over a period of ten
months, without interest.
In October 1995, the Company repurchased from the mother of Messrs. Roger
and Robert Gladstone an aggregate of 100,000 shares of Common Stock for
$200,000, or $2.00 per share. The shares were originally purchased in 1991 at a
price of $.80 per share.
In May 1996, David Nussbaum, Roger Gladstone and Robert Gladstone exercised
stock options to purchase 250,000 shares, 250,000 shares and 125,000 shares of
Common Stock, respectively, at purchase prices of $.88, $.88 and $.80,
respectively, which purchase prices were paid by delivery to the Company of
shares of the Company's Common Stock owned by optionholders, valued for this
purpose at $4.50 per share.
In connection with its corporate finance and investment banking activities,
GKN is often issued warrants to purchase securities of the issuer for whom its
services are rendered ("Underwriter Warrants"). Generally, a portion of the
Underwriter Warrants issuable to GKN are issued to its executive officers and,
in certain circumstances, to other personnel involved in the transaction
(collectively the "Individual Holders"). GKN has, in the past, and may, in the
future, purchase Underwriter Warrants from the Individual Holders at a price
equal to the market price of the underlying securities less the exercise price
of the Underwriter Warrants. Additionally, GKN has, in the past, and may, in the
future, lend to the Individual Holders funds to pay the exercise price of the
Underwriter Warrants, which loans are repaid, without interest, within a period
of no more than two weeks.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 35,000,000 shares of
Common Stock, par value $.0001 per share, and 5,000,000 shares of Preferred
Stock, par value $.10 per share ("Preferred Stock").
COMMON STOCK
There are currently 5,559,125 shares of Common Stock issued and outstanding
(excluding 783,750 shares held in the Company treasury), held of record by 78
stockholders. After completion of this Offering, there will be 8,059,125 shares
of Common Stock issued and outstanding.
Holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Stockholders do not
have cumulative voting rights. Subject to preferences that may be applicable to
any then outstanding Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends as may be declared from time to time by the Board
of Directors out of funds legally available therefor. See "Dividend Policy." In
the event of a dissolution, liquidation or winding-up of the Company, holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preference of any then outstanding Preferred
Stock. Holders of Common Stock have no right to convert their Common Stock into
any other securities. The Common Stock has no preemptive or other subscription
rights. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are, and the Common Stock
to be outstanding upon completion of this Offering will be, duly authorized,
validly issued, fully paid and nonassessable.
PREFERRED STOCK
The Board of Directors has the authority, without further action by the
stockholders, to issue up to 5,000,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption,
43
<PAGE>
liquidation preferences and the number of shares constituting any series or the
designation of such series. The issuance of Preferred Stock could adversely
affect the voting power of holders of Common Stock and could have the effect of
delaying, deferring or preventing a change in control of the Company.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
Upon the closing of this Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law. In general,
this statute prohibits a publicly-held Delaware corporation from engaging, under
certain circumstances, in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person becomes an interested stockholder, unless either (i) prior to
the date at which the stockholder became an interested stockholder the Board of
Directors approved either the business combination or the transaction in which
the person becomes an interested stockholder, (ii) the stockholder acquires more
than 85% of the outstanding voting stock of the corporation (excluding shares
held by directors who are officers or held in certain employee stock plans) upon
consummation of the transaction in which the stockholder becomes an interested
stockholder or (iii) the business combination is approved by the Board of
Directors and by two-thirds of the outstanding voting stock of the corporation
(excluding shares held by the interested stockholder) at a meeting of
stockholders (and not by written consent) held on or subsequent to the date of
the business combination. An "interested stockholder" is a person who, together
with affiliates and associates, owns (or at any time within the prior three
years did own) 15% or more of the corporation's voting stock. Section 203
defines a "business combination" to include, without limitation, mergers,
consolidations, stock sales and asset based transactions and other transactions
resulting in a financial benefit to the interested stockholder.
The Company's Amended and Restated Certificate of Incorporation and its
By-laws also contain provisions relating to corporate governance and to the
rights of stockholders. Certain of these provisions may be deemed to have a
potential "anti-takeover" effect, in that such provisions may delay, defer or
prevent a change of control of the Company. These provisions include the
authority of the Board of Directors to issue series of Preferred Stock with such
voting rights and other powers as the Board of Directors may determine, a
staggered board of directors consisting of three classes, such that after the
next annual meeting of stockholders only one class of directors is elected at
any one annual meeting of stockholders, and a provision requiring that
notification of nominations for directors made by stockholders be furnished to
the Company at least 90 days prior to the date of the meeting at which the
election of such nominees is to be considered and voted upon by the stockholders
of the Company. See "Management."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.
44
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering, the Company will have outstanding
8,059,125 shares of Common Stock. All shares acquired in this Offering, other
than shares that may be acquired by "affiliates" of the Company as defined by
Rule 144 under the Act, will be freely transferable without restriction or
further registration under the Act.
All of the shares of Common Stock outstanding prior to the date of this
Prospectus are "restricted securities," as that term is defined under Rule 144
promulgated under the Act. Substantially all of the 5,559,125 shares outstanding
prior to this Offering will be available for resale in the public market under
Rule 144 commencing on the date of this Prospectus; however, all of the officers
and directors of the Company have agreed not to sell the shares they currently
own (an aggregate of 3,224,250 shares of Common Stock) for a period of fifteen
months from the date of this Prospectus without the prior written consent of
Pennsylvania Merchant Group Ltd. No prediction can be made as to the effect, if
any, that sales of shares of Common Stock or the availability of such shares for
sale will have on the market prices prevailing from time to time. Nevertheless,
the possibility that substantial amounts of Common Stock may be sold in the
public market may adversely affect the prevailing market price for the Common
Stock and could impair the Company's ability to raise capital through the sale
of its equity securities.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are required to be aggregated), including any affiliate of the
Company, who beneficially owns "restricted shares" for a period of at least two
years is entitled to sell within any three-month period, shares equal in number
to the greater of (i) 1% of the then-outstanding shares of Common Stock
(approximately 80,591 shares immediately after this Offering) or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of the required notice of sale with the Securities and
Exchange Commission. The seller also must comply with the notice and manner of
sale requirements of Rule 144, and there must be current public information
available about the Company. In addition, any person (or persons whose shares
are aggregated) who is not, at the time of the sale, nor during the preceding
three months, an affiliate of the Company, and who has beneficially owned
restricted shares for at least three years, can sell such shares under Rule 144
without regard to notice, manner of sale, public information or the volume
limitations described above.
UNDERWRITING
Pennsylvania Merchant Group Ltd and GKN (collectively, the "Underwriters")
have severally agreed, subject to the terms and conditions of the Underwriting
Agreement, to purchase from the Company a total of 2,500,000 Shares. Each of
Pennsylvania Merchant Group Ltd and GKN has agreed to purchase one-half of the
Shares offered hereby. The Underwriting Agreement provides that the obligations
of the Underwriters are subject to approval of certain legal matters by counsel
and various other conditions precedent, and that the Underwriters are obligated
to purchase all of the Shares offered by this Prospectus (other than the Shares
covered by the over-allotment option described below), if any are purchased.
The Underwriters have advised the Company that they propose to offer the
Shares to the public at the initial offering price set forth on the cover page
of this Prospectus and to certain dealers at that price less a concession not in
excess of $ per Share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per Share to certain other
dealers. After the initial public offering, the offering price and other selling
terms may be changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Act. The Company has also agreed to
pay to the Underwriters an expense allowance on a nonaccountable basis equal to
2% of the gross proceeds derived from the sale of the Shares underwritten
(including the sale of any Shares subject to the Underwriters' over-allotment
45
<PAGE>
option). The Company also has agreed to pay all expenses in connection with
qualifying the Shares offered hereby for sale under the laws of such states as
the Underwriters may designate, including fees and expenses of counsel retained
for such purposes by the Underwriters.
The Company has granted to the Underwriters an option, exercisable during
the 45-day period after the date of this Prospectus, to purchase from the
Company at the offering price, less underwriting discounts and the
nonaccountable expense allowance, up to an aggregate of 375,000 additional
Shares for the sole purpose of covering over-allotments, if any.
DETERMINATION OF PUBLIC OFFERING PRICE
Under Schedule E of the By-Laws of the NASD, when a member of the NASD, such
as GKN, participates in the public distribution of securities of an "affiliate,"
such as the Company, the public offering price can be no higher than recommended
by a qualified independent underwriter. In accordance with this requirement,
Pennsylvania Merchant Group Ltd has agreed to act in such role and to recommend
an initial public offering price in compliance with the requirements of Schedule
E. Pennsylvania Merchant Group Ltd, in its role as qualified independent
underwriter, has participated in the preparation of the Registration Statement
of which this Prospectus forms a part and has performed "due diligence" with
respect thereto. Pennsylvania Merchant Group Ltd has agreed to undertake the
legal responsibilities and liabilities of an underwriter under the Act,
specifically including those inherent in Section 11 thereof. The Company and GKN
have agreed to indemnify Pennsylvania Merchant Group Ltd against certain
liabilities under the Act.
Prior to this Offering, there has been no public market for the Common
Stock. The initial price to the public for the shares of Common Stock offered
hereby has been determined by negotiation between the Company and Pennsylvania
Merchant Group Ltd. The factors considered in determining the initial price to
the public include the history of and the prospects for the industry in which
the Company and its subsidiaries compete, the past and present operations of the
Company, the historical results of operations of the Company, the prospects for
future earnings of the Company, market valuations of other companies engaged in
activities similar to the Company, the Company's management and the general
condition of the securities market at the time of the Offering.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for the
Company by Graubard Mollen & Miller. Kirkpatrick & Lockhart has acted as counsel
for the Underwriters in connection with this Offering. Graubard Mollen & Miller
represents GKN, one of the Underwriters, in other matters.
EXPERTS
The financial statements of the Company as of January 31, 1995 and 1996 and
for each of the two years in the period ended January 31, 1996 have been
included herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing. The financial
statements of the Company for the year ended January 31, 1994 have been included
herein in reliance upon the report of Goldstein Golub Kessler & Company, P.C.,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
46
<PAGE>
ADDITIONAL INFORMATION
The Company has filed with the Commission in Washington, D.C., a
Registration Statement under the Act with respect to the Shares offered by this
Prospectus. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and this Offering, reference is made to the Registration
Statement, including the exhibits filed therewith, copies of which may be
obtained at prescribed rates from the Commission at the public reference
facilities maintained by the Commission at Judiciary Plaza Building, 450 Fifth
Street, N.W., Washington, D.C. 20549; and its regional offices located at Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661, and Seven World Trade Center, 13th Floor, New York, New York 10048.
Descriptions contained in this Prospectus as to the contents of any contract or
other documents filed as an exhibit to the Registration Statement are not
necessarily complete and each such description is qualified by reference to such
contract or document.
47
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGES
-----
<S> <C>
Consolidated Statements of Financial Condition as of January 31, 1996 and 1995, and
as of April 30, 1996 (Unaudited)................................................... F-2
Consolidated Statements of Operations for the years ended January 31, 1996, 1995 and
1994, and the three months ended April 30, 1996 and 1995 (Unaudited)................. F-3
Consolidated Statements of Changes in Stockholders' Equity for the years ended
January 31, 1994, 1995 and 1996, and the three months ended April 30, 1996
(Unaudited).......................................................................... F-4
Consolidated Statements of Cash Flows for the years ended January 31, 1996, 1995 and
1994, and the three months ended April 30, 1996 and 1995 (Unaudited)................. F-5
Notes to Consolidated Financial Statements........................................... F-6
Independent Auditors' Report (KPMG Peat Marwick LLP)................................. F-13
Independent Auditor's Report (Goldstein Golub Kessler & Company, P.C.)............... F-14
</TABLE>
F-1
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
JANUARY 31, APRIL 30,
--------------------------
1996 1995 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents............................ $ 7,873,000 $ 3,123,000 $10,923.000
Due from clearing firm............................... 4,338,000 3,129,000 9,726,000
Commissions receivable............................... 106,000 128,000 152,000
Syndicate fees receivable............................ 369,000 -- 43,000
Securities owned, at market value.................... 8,152,000 5,440,000 5,692,000
Securities owned, not readily marketable, at fair
value................................................ 1,744,000 474,000 1,781,000
Investments, at cost................................. 292,000 -- 160,000
Office furniture, equipment and leasehold
improvements
(net of accumulated depreciation and amortization
of $1,027,000, $690,000 and $1,109,000,
respectively)........................................ 964,000 1,162,000 1,008,000
Goodwill (net of accumulated amortization of $11,000
at January 31, 1996 and $27,000 at April 30,
1996)................................................ 1,595,000 -- 1,581,000
Loans receivable..................................... 1,435,000 1,566,000 761,000
Income taxes receivable (including deferred taxes of
$22,000 at January 31, 1995)......................... -- 448,000 --
Other assets......................................... 985,000 626,000 1,290,000
----------- ----------- -----------
Total assets................................... $27,853,000 $16,096,000 $33,117,000
----------- ----------- -----------
----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Securities sold, not yet purchased, at market
value................................................ $ 4,015,000 $ 1,793,000 $ 6,167,000
Commissions payable................................ 1,992,000 1,204,000 2,649,000
Deferred compensation.............................. 331,000 144,000 789,000
Income taxes payable (including deferred taxes of
$1,292,000 and $940,000 at January 31, 1996
and April 30, 1996).............................. 1,610,000 -- 3,048,000
Accrued expenses and other liabilities............. 4,195,000 1,198,000 2,695,000
----------- ----------- -----------
12,143,000 4,339,000 15,348,000
Liability subordinated to the claims of general
creditors............................................ 934,000 -- 868,000
----------- ----------- -----------
Total liabilities.............................. 13,077,000 4,339,000 16,216,000
----------- ----------- -----------
Stockholders' equity:
Series A preferred stock $.10 par value; 5,000,000
shares authorized, 1,000 shares issued and
outstanding at January 31, 1995 (liquidation
value $1 per share).................................. -- -- --
Common stock, $.0001 par value; 35,000,000 shares
authorized, 5,397,875, 5,397,875 and 5,602,875
shares issued, respectively, and 4,885,375,
5,110,375 and 5,054,125 shares outstanding,
respectively......................................... 1,000 1,000 1,000
Additional paid-in capital......................... 3,487,000 3,487,000 3,487,000
Retained earnings.................................. 11,918,000 8,449,000 14,164,000
Cumulative translation adjustment.................. -- -- (18,000)
----------- ----------- -----------
15,406,000 11,937,000 17,634,000
Less treasury stock--at cost; 512,500, 287,500 and
548,750 shares, respectively......................... (630,000) (180,000) (733,000)
----------- ----------- -----------
Total stockholders' equity..................... 14,776,000 11,757,000 16,901,000
----------- ----------- -----------
Total liabilities and stockholders' equity..... $27,853,000 $16,096,000 $33,117,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
----------------------------------------- -------------------------
1996 1995 1994 1996 1995
----------- ----------- ----------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions............. $30,418,000 $21,804,000 $19,803,000 $12,068,000 $5,268,000
Investment banking...... 6,003,000 9,607,000 10,027,000 3,413,000 1,431,000
Principal
transactions.............. 5,683,000 433,000 2,739,000 2,477,000 266,000
Interest................ 717,000 262,000 203,000 337,000 126,000
Other................... 198,000 304,000 184,000 149,000 66,000
----------- ----------- ----------- ----------- ----------
Total revenues...... 43,019,000 32,410,000 32,956,000 18,444,000 7,157,000
----------- ----------- ----------- ----------- ----------
Expenses:
Compensation and
benefits.................. 27,121,000 22,856,000 18,819,000 10,728,000 5,241,000
Communications.......... 2,631,000 2,563,000 1,990,000 839,000 619,000
Brokerage, clearing and
exchange fees............. 1,350,000 908,000 695,000 631,000 267,000
Occupancy and
equipment................. 2,180,000 1,711,000 1,260,000 655,000 519,000
Business development.... 851,000 780,000 702,000 273,000 208,000
Professional fees....... 703,000 1,251,000 917,000 733,000 237,000
Other................... 1,896,000 1,447,000 1,151,000 590,000 435,000
----------- ----------- ----------- ----------- ----------
Total expenses...... 36,732,000 31,516,000 25,534,000 14,449,000 7,526,000
----------- ----------- ----------- ----------- ----------
Income (loss)
before provision
(benefit) for
income taxes.............. 6,287,000 894,000 7,422,000 3,995,000 (369,000)
----------- ----------- ----------- ----------- ----------
Income tax expense
(benefit):
Current................. 1,612,000 747,000 3,262,000 2,101,000 (117,000)
Deferred................ 1,206,000 (234,000) 154,000 (352,000) 4,000
----------- ----------- ----------- ----------- ----------
Provision (benefit)
for income taxes.......... 2,818,000 513,000 3,416,000 1,749,000 (113,000)
----------- ----------- ----------- ----------- ----------
Net income
(loss).................... $ 3,469,000 $ 381,000 $ 4,006,000 $ 2,246,000 $ (256,000)
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Income (loss) per common
share*.................... $ .61 $ .07 $ .72 $ .40 $ (.04)
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Weighted average common
shares outstanding........ 5,729,360 5,694,966 5,529,684 5,638,260 5,784,300
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
</TABLE>
- ------------
* Represents primary earnings per share. The difference between primary and
fully diluted earnings per share is not material.
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED JANUARY 31, 1994, 1995 AND 1996 AND THREE MONTHS ENDED APRIL 30,
1996 (UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK ADDITIONAL CUMULATIVE TREASURY STOCK
------------------- ---------------- PAID-IN RETAINED TRANSLATION --------------------
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENT SHARES AMOUNT
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January
31, 1993........... 5,241,000 $1,000 1,000 $-- $3,327,000 $ 4,062,000 $ -- 287,500 $(180,000)
Net income......... -- -- -- -- -- 4,006,000 -- -- --
Stock issued....... 10,000 -- -- -- 60,000 -- -- -- --
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
Balance at January
31, 1994........... 5,251,000 1,000 1,000 -- 3,387,000 8,068,000 -- 287,500 (180,000)
Net income......... -- -- -- -- -- 381,000 -- -- --
Stock issued in
conversion of
subordinated debt.. 162,500 -- -- -- 162,000 -- -- -- --
Retirement of
shares issued...... (15,625) -- -- -- (62,000) -- -- -- --
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
Balance at January
31, 1995........... 5,397,875 1,000 1,000 -- 3,487,000 8,449,000 -- 287,500 (180,000)
Net income......... -- -- -- -- -- 3,469,000 -- -- --
Expiration of
preferred shares... -- -- (1,000) -- -- -- -- -- --
Purchase of
treasury shares.... -- -- -- -- -- -- -- 225,000 (450,000)
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
Balance at January
31, 1996........... 5,397,875 1,000 -- -- 3,487,000 11,918,000 -- 512,500 (630,000)
Net income......... -- -- -- -- -- 2,246,000 -- -- --
Stock issued....... 205,000 -- -- -- 342,000 -- -- -- --
Subscription
receivable......... -- -- -- -- (121,000) -- -- -- --
Notes receivable... -- -- -- -- (221,000) -- -- -- --
Purchase of
treasury shares.... -- -- -- -- -- -- -- 36,250 (103,000)
Translation
adjustment......... -- -- -- -- -- -- (18,000) -- --
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
Balance at April
30, 1996........... 5,602,875 $1,000 -- $-- $3,487,000 $14,164,000 $ (18,000) 548,750 $(733,000)
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
--------- ------ ------ ------ ---------- ----------- ----------- ------- ---------
<CAPTION>
TOTAL
-----------
<S> <C>
Balance at January
31, 1993........... $ 7,210,000
Net income......... 4,006,000
Stock issued....... 60,000
-----------
Balance at January
31, 1994........... 11,276,000
Net income......... 381,000
Stock issued in
conversion of
subordinated debt.. 162,000
Retirement of
shares issued...... (62,000)
-----------
Balance at January
31, 1995........... 11,757,000
Net income......... 3,469,000
Expiration of
preferred shares... --
Purchase of
treasury shares.... (450,000)
-----------
Balance at January
31, 1996........... 14,776,000
Net income......... 2,246,000
Stock issued....... 342,000
Subscription
receivable......... (121,000)
Notes receivable... (221,000)
Purchase of
treasury shares.... (103,000)
Translation
adjustment......... (18,000)
-----------
Balance at April
30, 1996........... $16,901,000
-----------
-----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
--------------------------------------- ------------------------
1996 1995 1994 1996 1995
----------- ----------- ----------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................... $ 3,469,000 $ 381,000 $ 4,006,000 $ 2,246,000 $ (256,000)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Deferred taxes..................... 1,206,000 (234,000) 154,000 (352,000) 4,000
Depreciation....................... 138,000 287,000 189,000 68,000 33,000
Amortization....................... 277,000 -- -- 64,000 56,000
----------- ----------- ----------- ----------- ----------
5,090,000 434,000 4,349,000 2,026.000 (163,000)
(Increase) decrease in operating
assets:
Securities purchased under
agreements to resell............. -- 3,057,000 (3,057,000) -- --
Due from clearing firm............. (1,209,000) 404,000 1,888,000 (5,388,000) 543,000
Commissions receivable............. 22,000 (20,000) -- (46,000) (17,000)
Syndicate fees receivable.......... (369,000) -- -- 326,000 --
Securities owned, at market
value................................. (2,712,000) (1,867,000) (303,000) 2,460,000 3,155,000
Securities owned, not readily
marketable............................ (1,270,000) 277,000 (550,000) (37,000) (127,000)
Investments........................ (292,000) -- -- 132,000 --
Loans receivable................... 131,000 (1,205,000) -- 674,000 (460,000)
Income taxes receivable............ 448,000 (448,000) -- -- 448,000
Other assets....................... (359,000) 387,000 (645,000) (305,000) (754,000)
Increase (decrease) in operating
liabilities:
Securities sold, not yet
purchased............................. 2,222,000 171,000 (1,993,000) 2,152,000 (137,000)
Commissions payable................ 788,000 178,000 156,000 657,000 (306,000)
Deferred compensation.............. 187,000 (27,000) -- 458,000 684,000
Income taxes payable............... (17,000) 136,000 85,000 1,790,000 (4,000)
Accrued expenses and other
liabilities........................... 3,418,000 (568,000) 598,000 (1,500,000) (585,000)
Translation adjustment............. -- -- -- (18,000) --
----------- ----------- ----------- ----------- ----------
Net cash provided by operating
activities............................ 6,078,000 909,000 528,000 3,381,000 2,277,000
----------- ----------- ----------- ----------- ----------
Cash flows from investing activities:
Purchase of office furniture,
equipment and leasehold
improvements.......................... (206,000) (646,000) (380,000) (162,000) (42,000)
Goodwill resulting from
acquisition........................... (1,606,000) -- -- -- --
----------- ----------- ----------- ----------- ----------
Net cash used in investing
activities............................ (1,812,000) (646,000) (380,000) (162,000) (42,000)
----------- ----------- ----------- ----------- ----------
Cash flows from financing activities:
Issuance (retirement) of common
shares................................ -- (62,000) 60,000 -- --
Purchase of treasury stock........... (450,000) -- -- (103,000) --
Issuance in subordinated debt........ 934,000 -- -- -- --
Repayment of subordinated debt....... -- -- -- (66,000) --
----------- ----------- ----------- ----------- ----------
Net cash provided by (used) in
financing activities.................. 484,000 (62,000) 60,000 (169,000) --
----------- ----------- ----------- ----------- ----------
Net increase in cash and cash
equivalents........................... 4,750,000 201,000 208,000 3,050,000 2,235,000
Cash and cash equivalents at beginning
of period............................ 3,123,000 2,922,000 2,714,000 7,873,000 3,123,000
----------- ----------- ----------- ----------- ----------
Cash and cash equivalents at end of
period................................ $ 7,873,000 $ 3,123,000 $ 2,922,000 $10,923,000 $5,358,000
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Supplemental disclosures of cash flow
information:
Cash paid during the period for
income taxes....................... $ 900,000 $ 1,456,000 $ 2,837,000 $ 1,551,000 $ --
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Cash paid during the period for
interest.............................. $ -- $ -- $ 25,000 $ 17,000 $ --
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Non cash financing activities:
Conversion of subordinated notes to
common shares......................... $ -- $ 162,000 $ -- $ -- $ --
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF APRIL 30, 1996 AND FOR THE THREE MONTHS
ENDED APRIL 30, 1996 AND 1995 IS UNAUDITED)
(1) ORGANIZATION AND BUSINESS
GKN Holding Corp. and subsidiaries (the "Company") are primarily engaged in
securities brokerage, investment banking and trading. The Company's principal
wholly owned subsidiaries, GKN Securities Corp. ("GKN Securities") and Shochet
Securities, Inc. ("Shochet"), are both broker-dealers registered with the
Securities and Exchange Commission. Through its broker-dealer subsidiaries, the
Company executes principal and agency transactions, makes markets in
over-the-counter securities and performs underwriting and investment banking
services. GKN Securities' and Shochet's customers are located throughout the
United States. Both companies execute and clear all customer transactions with
the same unaffiliated broker-dealer on a fully disclosed basis. As discussed in
note 12, Shochet was acquired at the close of business, November 30, 1995.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of GKN Holding
Corp. and its subsidiaries. All intercompany accounts and transactions are
eliminated in consolidation. These consolidated financial statements reflect, in
the opinion of management, all adjustments (consisting of normal, recurring
accruals) necessary for a fair presentation of the consolidated financial
position of the Company.
The Company records securities transactions, including due from clearing
firm, income from security transactions and commission revenue and expense on a
trade-date basis.
Securities owned and securities sold, not yet purchased, principally
comprised of equities, are stated at quoted market values. Securities owned, not
readily marketable, principally comprised of warrants, are carried at
management's estimate of fair value based on a percentage of the market value of
the underlying securities. Changes in unrealized appreciation (depreciation)
arising from fluctuations in market value or upon realization of security
positions are reflected in the statements of operations. Included in revenues
from principal transactions is unrealized appreciation (depreciation) of
$3,130,000, ($250,000) and $472,000 for the years ended January 31, 1996, 1995
and 1994, respectively, and ($816,000) and $64,000 for the quarters ended April
30, 1996 and 1995, respectively.
Investment banking revenues from management fees and underwriting fees are
recognized on a trade-date basis. Advisory fee revenues are recorded when
services are substantially completed and the revenues are reasonably
determinable.
Primary income per common share is calculated based on the weighted average
number of shares of common stock and common stock equivalents outstanding.
Common stock equivalents represent the dilutive effect of the assumed exercise
of certain outstanding stock options. All assumed exercises of the outstanding
stock options were done using the treasury stock method.
Investments primarily represent the Company's investment in limited
partnerships which are shown at cost.
Office furniture and equipment is depreciated using the modified accelerated
cost recovery method over their estimated useful lives. Leasehold improvements
are amortized over the terms of the applicable leases or the useful lives of the
assets, whichever is less. Goodwill, representing the difference
F-6
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
between the purchase price of Shochet and the underlying net assets at the date
of acquisition, is amortized over 25 years on a straight-line basis.
For purposes of the consolidated statements of cash flows, the Company
considers all demand deposits held in banks and highly liquid investments with
maturities of 90 days or less to be cash equivalents.
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these consolidated financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
Certain reclassifications have been made to prior year financial statements
to conform to the 1996 presentation.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123 ("FAS 123"), Accounting for Stock Based
Compensation, in October, 1995. The adoption of FAS 123, which will become
effective for fiscal years beginning after December 15, 1995, would not have a
material effect on the Company's consolidated financial statements.
(3) DUE FROM CLEARING FIRM
The clearing and depository operations for brokerage transactions are
provided by an unaffiliated broker-dealer. At January 31, 1996 and 1995,
substantially all of the securities owned, securities sold, not yet purchased,
and the amount due from the clearing firm reflected in the consolidated
statements of financial condition are positions with and amounts due from this
firm.
The Company's broker-dealer subsidiaries have agreed to indemnify its
clearing firm for losses that the clearing firm may sustain from the customer
accounts introduced by the broker-dealers. As of January 31, 1996 and 1995,
substantially all of the amounts owed to the clearing firm by these customers
are collateralized by securities owned by the customers.
(4) RELATED PARTY TRANSACTIONS
Included in loans receivable, at January 31, 1996 and 1995, and at April 30,
1996, are amounts due from officers of the Company amounting to approximately
$198,000, $186,000 and $94,000, respectively. At January 31, 1996 and 1995, and
at April 30, 1996, $557,000, $939,000 and $382,000, respectively, included in
loans receivable represent payments made to brokers in anticipation of these
brokers generating commission revenue in accordance with the loan agreement over
the life of the agreement. Until the specified amount of commission revenue is
generated, the broker is liable to the Company for all amounts advanced to the
broker. These advances are not collateralized, nor do they bear interest. All
amounts are amortized on a monthly basis over the time period specified in the
agreement. At January 31, 1996 advances were being amortized over a period of
five months to three years.
F-7
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(5) NET CAPITAL REQUIREMENTS
The broker-dealers are subject to the Securities and Exchange Commission's
Uniform Net Capital Rule 15c3-1 (the "Rule"), which requires the maintenance of
minimum net capital.
GKN Securities has elected to compute its net capital using the alternative
method permitted by the Rule, which requires that GKN Securities maintain
minimum net capital, as defined, to be greater than or equal to $250,000. At
January 31, 1996, GKN Securities had net capital of $9,407,000, which was
$9,157,000 in excess of required net capital of $250,000. At January 31, 1995,
GKN Securities had net capital of $4,327,000, which was $4,077,000 in excess of
required net capital of $250,000. At April 30, 1996, GKN Securities had net
capital of $10,807,000, which was $10,557,000 in excess of required net capital
of $250,000.
Shochet has elected to compute net capital under the standard aggregate
indebtedness method permitted by the Rule, which requires that the ratio of
aggregate indebtedness to net capital, both as defined, shall not exceed 15 to
1. At January 31, 1996, Shochet had net capital of $314,000 and a net capital
requirement of $100,000. Shochet's net capital ratio at January 31, 1996 was 1.4
to 1.
(6) COMMITMENTS AND CONTINGENCIES
The Company is obligated under noncancelable leases or subleases for office
facilities. The leases are subject to escalations for the Company's share of
increases in operating costs. Rent expense included in occupancy and equipment
expense for the years ended January 31, 1996, 1995 and 1994, and for the three
months ended April 30, 1996 and 1995, totaled $1,218,000, $977,000, $752,000,
$362,000 and $319,000, respectively.
The future aggregate minimum rental commitments under these leases are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING JANUARY 31, AMOUNT
- --------------------------------------------------------------- ----------
<S> <C>
1997........................................................... $1,146,000
1998........................................................... 1,089,000
1999........................................................... 482,000
2000........................................................... 243,000
2001........................................................... 127,000
Thereafter..................................................... 506,000
----------
$3,593,000
----------
----------
</TABLE>
Various legal proceedings are pending against the broker-dealers. Management
believes that, other than as reflected in the consolidated financial statements,
the aggregate liability resulting from these proceedings will not be material.
(7) STOCKHOLDERS' EQUITY
Effective May 31, 1994, the Company approved a 1-for-2 reverse stock split
of its common stock (the "Reverse Split") and amended and restated the
Certificate of Incorporation to effect such Reverse Split and to reduce the
number of authorized shares to 40,000,000, consisting of 35,000,000 shares of
common stock, $.0001 par value ("Common Stock") and 5,000,000 shares of
preferred stock, $.10 par value ("Preferred Stock"). All references in the
consolidated financial statements and related notes to
F-8
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(7) STOCKHOLDERS' EQUITY--(CONTINUED)
number of shares and exercise, conversion and purchase prices have been restated
to reflect the Reverse Split on a retroactive basis.
The 1991 Employee Incentive Plan of the Company (the "Incentive Plan")
currently provides for the granting of up to 5,000,000 shares of common stock by
the Board of Directors, at its discretion, in the form of incentive stock
rights, stock options, stock appreciation rights, limited stock appreciation
rights or the sale of shares of common stock pursuant to restricted stock
purchase agreements (collectively such rights, options and shares are referred
to herein as "Awards"). Stock options granted under the Incentive Plan may
qualify as "Incentive Stock Options" under Section 422 of the Internal Revenue
Code of 1986, as amended. Awards may be granted to executive officers, employees
and consultants of the Company and its subsidiaries.
The exercise price of all stock options granted under the Incentive Plan is
determined by the Board of Directors of the Company at the time of grant.
However, the exercise price of all Incentive Stock Options granted under the
Incentive Plan must be at least equal to the fair market value of the common
stock on the date of grant or, in the case of Incentive Stock Options granted to
a holder of more than 10% of the Company's common stock, at least 110% of the
fair market value of such shares on the date of the grant. In the case of other
options granted under the Incentive Plan, the exercise price must be at least
equal to 65% of the fair market value of the common stock on the date of grant.
The maximum exercise period for which options may be granted under the Incentive
Plan is ten years from the date of grant for Incentive Stock Options (five years
in the case of Incentive Stock Options granted to an individual owning more than
10% of the Company's common stock) and 13 years for other options. At January
31, 1996, the Company had 1,896,673 stock options outstanding, of which
1,813,173 are Incentive Stock Options and 83,500 are nonqualified stock options.
At January 31, 1995, the Company had 1,662,086 stock options outstanding, of
which 1,579,586 are Incentive Stock Options and 82,500 are nonqualified stock
options.
The following table summarizes activity in the Company' s stock options:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE
SHARES PER SHARE
--------- --------------
<S> <C> <C>
Balance at January 31, 1994....................... 1,814,249 $ .80-$6.00
Options granted during the year................... 105,000 $6.00
Options canceled during the year.................. (257,163) $ 2.20-$6.00
---------
Balance at January 31, 1995....................... 1,662,086 $ .80-$6.00
Options granted during the year................... 368,825 $ 2.00-$2.30
Options canceled during the year.................. (134,238) $ 2.20-$6.00
---------
Balance at January 31, 1996....................... 1,896,673 $ .80-$6.00
---------
---------
</TABLE>
Note 13, Subsequent Events, discusses a subsequent event related to the
change in terms of certain options previously granted.
At January 31, 1995, the Company had outstanding 1,000 shares of Preferred
Stock designated as Series A Preferred Stock, which were held by the two largest
common stockholders of the Company, and are entitled to one vote per share. All
of the shares of Series A Preferred Stock expired on October 4, 1995.
F-9
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(8) INCOME TAXES
The Company files consolidated Federal income tax returns and combined New
York State and New York City income tax returns.
The deferred income tax asset of $22,000 at January 31, 1995, included in
income taxes receivable, principally results from depreciation expense. No
valuation allowance was recorded as management has established a plan by which
the Company will be able to utilize the deferred tax asset. The deferred tax
liability of $1,292,000 and $940,000 at January 31, 1996 and April 30, 1996,
included in income taxes payable, results primarily from unrealized gains on
securities.
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1996 1995 1994
---------- -------- ----------
<S> <C> <C> <C>
Current:
Federal.............................................. $1,110,000 $492,000 $2,011,000
State and local...................................... 502,000 255,000 1,251,000
---------- -------- ----------
Total current.................................... 1,612,000 747,000 3,262,000
Deferred tax expense (benefit)........................... 1,206,000 (234,000) 154,000
---------- -------- ----------
Total............................................ $2,818,000 $513,000 $3,416,000
---------- -------- ----------
---------- -------- ----------
</TABLE>
The difference between income taxes computed at the statutory Federal rate
of 34% for the years ended January 31, 1996, 1995 and 1994 and the provision for
income taxes relates to the following:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------- --------------------- -----------------------
PERCENT PERCENT PERCENT
OF PRE-TAX OF PRE-TAX OF PRE-TAX
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Provision at Federal statutory
rate............................... $2,138,000 34% $304,000 34% $2,523,000 34%
State income taxes, net of Federal
income tax benefit................. 326,000 5 166,000 18 853,000 11
Other.............................. 354,000 6 43,000 5 40,000 1
---------- --- -------- --- ---------- ---
Total...................... $2,818,000 45% $513,000 57% $3,416,000 46%
---------- --- -------- --- ---------- ---
---------- --- -------- --- ---------- ---
</TABLE>
(9) CONCENTRATION OF CREDIT RISK AND OFF-BALANCE-SHEET RISKS
In the normal course of business, the broker-dealers execute securities
transactions on behalf of customers through a clearing broker. The execution of
these transactions includes the purchase and sale (including "short sales") of
securities. These activities may expose the Company to off-balance-sheet risk in
the event the customer is unable to fulfill its contractual obligations and
margin requirements are not sufficient to fully cover losses. In these
situations, the Company may be required to purchase or sell financial
instruments at prevailing market prices which may not fully cover the
obligations of its customers. Subsequent market fluctuations may require
purchasing the securities sold, not yet purchased, at prices that differ from
the market value that is reflected on the statements of financial condition. The
Company limits its risk by requiring customers to maintain margin collateral
that is in compliance with regulatory and internal guidelines and by making
credit inquiries when establishing customer relationships.
F-10
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(9) CONCENTRATION OF CREDIT RISK AND OFF-BALANCE-SHEET RISKS--(CONTINUED)
Additionally, securities sold, not yet purchased, expose the broker-dealers
to off-balance-sheet market risk, in that subsequent market fluctuations may
require purchasing the securities at prices which differ from the market value
reflected in the consolidated statements of financial condition.
(10) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 107, Disclosures About Fair Value of Financial
Instruments, which requires that all entities disclose the fair value of
financial instruments, as defined, for both assets and liabilities recognized
and not recognized in the statement of financial condition. Virtually all of the
Company's financial instruments, as defined, are carried at, or approximate,
fair value because of their short-term nature. Fair value for these financial
instruments is based on quoted market prices for similar financial instruments.
(11) 401(K) PLAN
The Company, excluding Shochet, is covered under the GKN Securities Corp.
401(k) Plan (the "Plan"). Under the provisions of the Plan, all covered
employees who have attained the age of 21 are eligible to participate in the
plan after one full year of employment. Contributions to the Plan by employees
are determined based on an elected percentage of annual compensation, subject to
an annual limit prescribed by the Internal Revenue Service. GKN Securities may
make contributions on behalf of the employees, which are determined on an annual
basis, but in no event can such contributions exceed 1% of a participant's
annual compensation or 25% of the elected deferral, as defined, of a
participant. GKN Securities has reserved the right to terminate the Plan at its
discretion. For the years ended January 31, 1996, 1995 and 1994 and for the
three months ended April 30, 1996 and 1995, GKN Securities made contributions of
approximately $62,000, $31,000, $20,000, $16,000 and $15,000 to the Plan,
respectively.
(12) ACQUISITION OF SHOCHET
As of the close of business, November 30, 1995, the Company acquired 100% of
the issued and outstanding shares of Shochet for approximately $2,099,000. The
acquisition was accounted for using the purchase method of accounting and,
accordingly, the Company's results of operations include the results of Shochet
from the acquisition date. The Company recognized $1,605,000 of goodwill in
connection with the acquisition, which will be amortized on a straight line
basis over 25 years.
In connection with the purchase of Shochet, the Company has signed a 7%
$1,000,000 subordinated note due in three years. Payments are made quarterly.
The estimated fair value of the subordinated note is $934,000 and $868,000 at
January 31, 1996 and April 30, 1996, respectively.
Pro forma information with respect to this acquisition has not been
presented in the accompanying consolidated financial statements as it would not
differ materially from historical information.
F-11
<PAGE>
GKN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(13) SUBSEQUENT EVENTS
Commitments and Contingencies
The Company has entered into employment arrangements with three officers of
the Company who are also stockholders of the Company. These arrangements provide
for annual salaries and bonuses at the discretion of the Board of Directors, up
to 18% each of the stock purchase warrants or options that may be issued to GKN
Securities in connection with any public offering and private placement or other
transactions, as well as certain other benefits. In May 1996, the percentage was
changed to 15%.
Stockholders' Equity
In May 1996, the Board of Directors set the exercise price of options
granted during the year ended January 31, 1996 at $4.50 per share.
At April 30, 1996, the Company had 1,758,673 stock options outstanding, of
which 1,675,173 are Incentive Stock Options and 83,500 are nonqualified stock
options.
During May 1996, the Company offered certain of its option holders the
opportunity to swap their options for new options. Option holders could receive
one new option for every two or three options exchanged, depending upon the
original grant date. The new options have accelerated vesting dates and strike
prices equal to the estimated fair value of $4.50 at April 30, 1996.
During May 1996, 625,000 options were exercised by certain of the firm's
principals. 120,000 shares of previously owned stock were delivered as payment
for the option exercise. The shares accepted as payment were valued at $4.50 per
share.
The following table summarizes activity in the Company's stock options
during the first quarter of fiscal year 1997 and to May 28, 1996, the last day
of the option swap offer:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE
SHARES PER SHARE
--------- --------------
<S> <C> <C>
Balance at January 31, 1996....................... 1,896,673 $ .80-$6.00
Options granted during the period................. --
Options canceled during the period................ (13,000) $ 2.20-$6.00
Options exercised during the period............... (125,000) $.80
---------
Balance at April 30, 1996......................... 1,758,673 $ .80-$6.00
Options granted during the period................. 184,845 $4.50
Options canceled during the period................ (444,380) $ 4.50-$6.00
Options exercised during the period............... (625,000) $ .80-$ .88
---------
Balance at May 28, 1996........................... 874,138 $ 2.20-$6.00
---------
---------
</TABLE>
401(k) Plan
On May 1, 1996, the Shochet 401(k) Plan merged into the GKN Securities Corp.
401(k) Plan. All account balances of former participants in the Shochet 401(k)
Plan were transferred into the GKN Securities Corp. 401(k) Plan.
F-12
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders of
GKN Holding Corp.:
We have audited the accompanying consolidated statements of financial
condition of GKN Holding Corp. and subsidiaries as of January 31, 1996 and 1995
and the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the years in the two-year period ended January
31, 1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. The accompanying
consolidated statements of operations, changes in stockholders' equity and cash
flows for the year ended January 31, 1994 were audited by other auditors whose
report thereon dated March 29, 1994 expressed an unqualified opinion on those
financial statements. A copy of the report of the other auditors is attached
hereto.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1996 and 1995 consolidated financial statements referred
to above present fairly, in all material respects, the financial position of GKN
Holding Corp. and subsidiaries as of January 31, 1996 and 1995 and the results
of their operations and their cash flows for each of the years in the two-year
period ended January 31, 1996 in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
New York, New York
April 12, 1996,
except as to Note 13, which is
as of May 28, 1996
F-13
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
GKN Holding Corp.
We have audited the accompanying consolidated statements of income, changes
in stockholders' equity, and cash flows of GKN Holding Corp. and Subsidiaries
for the year ended January 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the results of operations and cash
flows of GKN Holding Corp. and Subsidiaries for the year ended January 31, 1994
in conformity with generally accepted accounting principles.
/s/ GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
New York, New York
March 29, 1994
F-14
<PAGE>
========================================= ====================================
- ----------------------------------------- ------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER
PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS
IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION 2,500,000 SHARES
OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE UNDERWRITERS. [LOGO] HOLDING CORP.
THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN
THE SECURITIES OFFERED BY THIS
PROSPECTUS, OR AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IS UNLAWFUL. THE COMMON STOCK
DELIVERY OF THIS PROSPECTUS SHALL NOT,
UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
-------------------
TABLE OF CONTENTS
PAGE
----
----------------
Prospectus Summary............. 3 PROSPECTUS
Risk Factors................... 6 ----------------
Use of Proceeds................ 12
Dilution....................... 13
Capitalization................. 14
Dividend Policy................ 14
Selected Financial Data........ 15
Management's Discussion
and Analysis of Financial
Condition and Results
of Operations................ 16
Business....................... 24
Management..................... 33
Principal Stockholders......... 41
Certain Transactions........... 42
Description of Capital
Stock........................ 43
Shares Eligible for
Future Sale.................. 45
Underwriting................... 45 PENNSYLVANIA MERCHANT
GROUP LTD
Legal Matters.................. 46
Experts........................ 46
Additional Information......... 47
Index to Financial
Statements................... F-1
GKN SECURITIES
-------------------
UNTIL , 1996 (25 DAYS
AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE
SHARES OF COMMON STOCK OFFERED HEREBY,
WHETHER OR NOT PARTICIPATING IN THE
DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN , 1996
ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- ---------------------------------------- -------------------------------------
======================================== =====================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses payable by it in connection with the
offering described in this registration statement (other than the underwriting
discount and commissions and reasonable expense allowance) will be as follows:
<TABLE>
<CAPTION>
EXHIBIT NO.
- ----------------------------------------------------------------------------
<S> <C>
SEC registration fee.......................................... $ 4,124.14
NASD filing fee............................................... 1,696.00
Printing and engraving expenses............................... 75,000.00
Accounting fees and expenses.................................. 90,000.00
Legal fees and expenses (including Blue Sky).................. 185,000.00
Miscellaneous................................................. 44,179.86
-----------
Total................................................... $400,000.00
-----------
-----------
</TABLE>
- ------------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Restated Certificate of Incorporation eliminates, to the
fullest extent permitted by Delaware law, personal liability of directors to the
Registrant and its stockholders for damages arising out of certain alleged
breaches of the directors' duty to the corporation.
The Registrant's Restated Certificate of Incorporation also provides that
the Registrant shall, to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law ("DGCL"), as the same may be amended and
supplemented, indemnify any and all persons whom it shall have the power to
indemnify under said section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by Section 145 of the
DGCL. Section 145(a) of the DGCL provides in relevant part that "a corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor ... [by
reason of his service in one of the capacities specified in the preceding
sentence] against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but
II-1
<PAGE>
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnify for such expenses which the Court of Chancery
or such other court shall deem proper."
The Company also has entered into indemnification agreements with each of
its directors and executive officers. The indemnification agreements provide
that the directors and executive officers will be indemnified to the fullest
extent permitted by applicable law against all expenses (including attorney's
fees), judgments, fines and amounts reasonably paid or incurred by them for
settlement in any civil, criminal, administrative or investigative action, suit
or proceeding, including any derivative action. No indemnification will be
provided under the indemnification agreements, however, to any director or
executive officer in certain limited circumstances, including on account of
knowingly fraudulent, deliberately dishonest or willful misconduct. To the
extent the provisions of the indemnification agreements exceed the
indemnification permitted by applicable law, such provisions may be enforceable
or may be limited to the extent they are found by a court of competent
jurisdiction to be contrary to the public policy.
Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, the Registrant has agreed to indemnify the Underwriters
and the Underwriters have agreed to indemnify the Registrant and its directors,
officers and controlling persons against certain civil liabilities that may be
incurred in connection with this offering, including certain liabilities under
the Securities Act of 1933, as amended (the "Securities Act").
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the following securities were issued by the
Registrant without registration under the Securities Act:
From February 1, 1993 to April 30, 1996, the Registrant, in the usual course
of its business, issued options to purchase 948,243 shares of its Common Stock
to its employees and consultants under its 1991 Employee Incentive Plan at
prices ranging from $4.50 to $6.00 per share. A number of such options were
terminated and in May 1996, the Registrant offered employees the opportunity to
convert their options into options for a fewer number of shares, but with lower
exercise prices and/or shorter vesting periods. As a result of such offer, the
aggregate number of outstanding options under the Plan decreased (after giving
effect to the exercises described below) from 1,758,673 (the aggregate amount of
shares, subject to options issued since inception of the plan) to 866,388. In
May and June 1996, additional options to purchase 145,000 shares were granted to
employees in the usual course of business at exercise prices of $4.50 per share
and options to purchase 12,882 shares were forfeited by terminated employees. At
June 30, 1996, options to purchase 998,506 shares of Common Stock were
outstanding. The exemptions claimed for these issuances are Rule 701 and Section
3(a)(9) of the Securities Act. Rule 701 of the Securities Act provides an
exemption for offers and sales of securities pursuant to certain compensatory
benefit plans and contracts relating to compensation. Four conditions must be
satisfied in order to claim the Rule 701 exemption, (1) the issuer cannot be a
reporting or investment company, (2) the securities were issued pursuant to the
terms of (a) a written compensatory benefit plan, or (b) a written contract, (3)
offerees and purchasers must be an employee, officer, director, partner,
consultant or advisor of the Company, and (4) the aggregate amount of securities
offered and sold during any twelve-month period pursuant to Rule 701 is a
minimum of $500,000 and a maximum of $5,000,000. Section 3(a)(9) of the
Securities Act exempts from the registration requirements any security that a
company exchanges voluntarily and exclusively for its outstanding
securities--with no commission or other remuneration for soliciting such an
exchange.
In February 1993, the Registrant issued 10,000 shares of Common Stock
pursuant to a private offering in the aggregate amount of $60,000. In June 1994,
the Registrant issued 162,500 shares of Common Stock in the conversion of
$162,500 of subordinated debt. The exemptions claimed for this issuance is
Section 4(2) under the Securities Act and Regulation D promulgated under the
Securities
II-2
<PAGE>
Act. Section 4(2) provides an exemption from the registration requirements of
the Securities Act for "private" offerings. Specific objective criteria for
determining whether an offering is "private" and therefore outside the
registration requirements of the Securities Act, includes, whether the number of
purchasers in the transaction are limited, a prohibition against general
solicitation or general advertising and whether the purchaser or purchaser's
representative has a certain level of financial and business sophistication.
Regulation D promulgated under the Securities Act provides an exemption for
private offerings. There are several general conditions that apply to all offers
and sales effected pursuant to Regulation D, including, availability of
information, prohibition against general solicitation and general advertising
and limitation on resale. Regulation D provides an exemption for limited offers
and sales of securities (1) not exceeding an annual aggregate amount of $1
million, (2) to a limited number of people in an aggregate amount not exceeding
$5 million, and (3) in an unlimited amount to an unlimited number of accredited
investors (as such term is defined in Rule 501 of Regulation D) and a limited
number of nonaccredited investors.
In connection with Registrant's acquisition of Shochet in November 1995,
Registrant agreed to issue to the sellers of the Shochet business, upon
consummation of this Offering, five-year warrants to purchase 25,000 shares of
Common Stock at an exercise price equal to the per-share offering price. The
exemption claimed for this issuance was Section 4(2) of the Securities Act.
In January 1996, in connection with Mr. Joachim Stahler's employment with
the Registrant, the Registrant agreed to sell 80,000 shares of Common Stock to
Mr. Joachim Stahler, the Managing Director of GKN AG, at a purchase price of
$3.02 per share, payable 50% in cash and 50% by promissory note. The shares were
issued in April 1996. The Registrant also issued to Mr. Stahler, in connection
with his employment, warrants to purchase 80,000 shares of Common Stock,
exercisable until January 30, 2001, at a purchase price equal to the per-share
offering price. The exemption claimed for these issuances is Section 4(2) of the
Securities Act.
In February 1996, Richard Buonocore, a Vice President and the head trader of
GKN, exercised an option to purchase 125,000 shares of Common Stock at $.80 per
share, which purchase price was paid by promissory note. The exemption claimed
for the issuance of the shares pursuant to the option exercise is Section 4(2)
of the Securities Act.
In May 1996, David Nussbaum, Roger Gladstone and Robert Gladstone exercised
stock options to purchase 250,000 shares, 250,000 shares and 125,000 shares of
Common Stock, respectively, at purchase prices of $.88, $.88 and $.80,
respectively, which purchase prices were paid by delivery to Registrant of
shares of Registrant's Common Stock owned by optionholders, valued for this
purpose at $4.50 per share. The exemption claimed for the issuance of the shares
pursuant to the option exercises is Section 4(2) of the Securities Act.
In May 1996, the Company agreed to issue to Messrs. Margaritis and Pollard,
each of whom will become a director upon the consummation of this Offering,
options to purchase 10,000 shares of Common Stock, at a price equal to the
per-share offering price. The exemption claimed for these issuances is Section
4(2) of the Securities Act.
All of the foregoing securities were issued under exemption from the
registration requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act and the rules and regulations promulgated under Section 4(2),
Regulation D promulgated under the Securities Act, Rule 701 promulgated under
the Securities Act, and/or Section 3(a)(9) of the Securities Act.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------
<S> <C> <C>
1.1 * Form of Underwriting Agreement.
1.2 * Form of Selected Dealers Agreement.
3.1 + Registrant's Restated Certificate of Incorporation.
3.1 (a)+ Amendment, effective as of May 31, 1994, to Registrant's Restated Certificate of
Incorporation.
3.2 + Registrant's By-laws.
3.2 (a) * Amendment to Registrant's By-laws.
4.1 * Form of Common Stock Certificate.
5.1 * Opinion of Graubard Mollen & Miller.
10.1 + Lease for 61 Broadway, New York, New York 10006.
10.2 + Lease for Mizner Park (Suite 245), Boca Raton, Florida office space.
10.3 + Lease for Mizner Park (Suite 405), Boca Raton, Florida office space.
10.4 + Lease for Great Neck, New York office space.
10.5 + Lease for Stamford, Connecticut office space.
10.6 + Lease for Hallandale, Florida office space.
10.7 + Lease for Miami Beach, Florida office space.
10.8 + Lease for South Miami Beach, Florida office space.
10.9 + Agreement between GKN Securities Corp. and managers of Miami, Florida branch
office.
10.10 * Employment Agreement between the Company and David M. Nussbaum.
10.11 * Employment Agreement between the Company and Roger N. Gladstone.
10.12 * Employment Agreement between the Company and Robert H. Gladstone.
10.13 * Employment Agreement between the Company and Peter R. Kent.
10.14 + Warrant Agreement with Joachim Stahler.
10.15 + Stock Purchase Agreement with Marvin and Sally Shochet, including form of Option
Agreement.
10.16 * Option Agreement with director nominees.
10.17 + 1991 Employee Incentive Plan.
10.18 + Clearing Agent Agreement.
10.19 + Form of Stock Option Agreement.
10.20 * 1996 Incentive Compensation Plan
10.21 * Form of Indemnification Agreement.
21 / / Subsidiaries of the Registrant.
23.1 + Consent of KPMG Peat Marwick LLP.
23.2 + Consent of Goldstein Golub Kessler & Company, P.C.
23.3 * Consent of Graubard Mollen & Miller (included in Exhibit 5.1).
23.4 + Consent of John P. Margaritis.
23.5 + Consent of Arnold B. Pollard.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------
<S> <C> <C>
24 / / Power of Attorney [Reference is made to the signature page of the Registration
Statement]
27 / / Financial Data Schedule.
</TABLE>
- ------------
* To be filed by amendment.
+ Filed herewith.
/ / Previously filed (unless otherwise indicated) as the same number of exhibit
included in the Company's Registration Statement on Form S-1 filed on June
5, 1996 (Reg. No. 333-05273).
(b) Financial Statement Schedules: None
Other schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions or
are not applicable, and therefore have been omitted.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate Offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the Offering.
(b) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
II-5
<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Act"), the registrant has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on July 17, 1996.
GKN HOLDING CORP.
By: /s/ DAVID M. NUSSBAUM
..................................
David M. Nussbaum, Chief Executive
Officer
Pursuant to the requirements of the Act, the Amendment No. 1 to the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ DAVID M. NUSSBAUM Chairman of the Board, Chief July 17, 1996
...................................... Executive Officer and Director
David M. Nussbaum (Principal Executive Officer)
/s/ ROGER N. GLADSTONE* President and Director July 17, 1996
......................................
Roger N. Gladstone
/s/ PETER R. KENT* Chief Operating Officer, Chief July 17, 1996
...................................... Financial Officer and Director
Peter R. Kent (Principal Accounting and
Financial Officer)
/s/ LESTER ROSENKRANTZ* Executive Vice President and July 17, 1996
...................................... Director
Lester Rosenkrantz
/s/ JAMES KRANTZ* Director July 17, 1996
......................................
James Krantz
*By /s/ DAVID M. NUSSBAUM Attorney-in-Fact July 17, 1996
..................................
David M.
Nussbaum
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE NO.
- ---------- ---------------------------------------------------------------------- --------
<S> <C> <C> <C>
3.1 Registrant's Restated Certificate of Incorporation.
3.1 (a) Amendment, effective as of May 31, 1994, to Registrant's Restated
Certificate of Incorporation.
3.2 Registrant's By-laws.
10.1 Lease for 61 Broadway, New York, New York 10006.
10.2 Lease for Mizner Park (Suite 245), Boca Raton, Florida office space.
10.3 Lease for Mizner Park (Suite 405), Boca Raton, Florida office space.
10.4 Lease for Great Neck, New York office space.
10.5 Lease for Stamford, Connecticut office space.
10.6 Lease for Hallandale, Florida office space.
10.7 Lease for Miami Beach, Florida office space.
10.8 Lease for South Miami Beach, Florida office space.
10.9 Agreement between GKN Securities Corp. and managers of Miami, Florida
branch office.
10.14 Warrant Agreement with Joachim Stahler.
10.15 Stock Purchase Agreement with Marvin and Sally Shochet, including form
of Option Agreement.
10.17 1991 Employee Incentive Plan.
10.18 Clearing Agent Agreement.
10.19 Form of Stock Option Agreement.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Goldstein Golub Kessler & Company, P.C.
23.4 Consent of John P. Margaritis.
23.5 Consent of Arnold B. Pollard.
</TABLE>
EXHIBIT 3.1
STATE OF DELAWARE
[EMBLEM OF THE STATE OF DELAWARE]
Office of Secretary of State
----------
I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "GKN HOLDING CORP." FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF
SEPTEMBER, A.D. 1992, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO KENT COUNTY
RECORDER OF DEEDS ON THE FIFTEENTH DAY OF SEPTEMBER, A.D. 1992 FOR RECORDING.
****************
[SEAL OF THE STATE OF DELAWARE]
/s/ MICHAEL RATCHFORD
----------------------------
SECRETARY OF STATE
AUTHENTICATION: *3589749
DATE: 09/15/1992
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/15/92
922595235 -- 2116322
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
GKN HOLDING CORP.
------------------------
Under Section 242 of the
General Corporation Law
------------------------
The undersigned, Roger Gladstone, President, and Andrea B. Goldman,
Assistant Secretary, of GKN Holding Corp. (the "Corporation"), hereby certify as
follows:
1. The name of the Corporation is GKN Holding Corp.
2. The Restated Certificate of Incorporation of the Corporation is hereby
amended by striking out Sub-paragraph A of Article Fourth and substituting in
lieu thereof the following:
A. Authorized Capital Stock. The total number of shares of all classes
------------------------
of stock which the Corporation shall have authority to issue is 75,000,000
shares, consisting of 70,000,000 shares of Common Stock, par value $.0001
per share (hereinafter the "Common Stock"), and 5,000,000 shares of
Preferred Stock, par value $.10 per share (hereinafter, the "Preferred
Stock"), of which 1,000 shares have been designated Series A Preferred
Stock, the relative rights, preferences and limitations of which are as set
forth in sub-paragraph B of this Article FOURTH. The relative rights,
preferences and limitations of shares of undesignated Preferred Stock shall
be as provided in sub-paragraph C of this Article FOURTH.
3. This amendment to the Restated Certificate of Incorporation herein
certified was duly adopted, in accordance with provisions of Section 242 of the
General Corporation Law of the State of
<PAGE>
Delaware, by resolution of the Board of Directors followed by the affirmative
vote of the holders of a majority of the outstanding stock of the Corporation
entitled to vote thereon at a meeting of stockholders.
IN WITNESS WHEREOF, the undersigned have signed this Certificate and
affirm, under penalties of perjury, that the Certificate is the act and deed of
the Corporation and the facts stated herein are true.
Date: September 11, 1992
/s/Roger Gladstone
------------------------------
Roger Gladstone
President
ATTEST: /s/ Andrea B. Goldman
- ---------------------------------------
Andrea B. Goldman
Assistant Secretary
[SEAL]
<PAGE>
STATE OF DELAWARE
[EMBLEM OF THE STATE OF DELAWARE]
Office of Secretary of State
----------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF RESTATED
CERTIFICATE OF INCORPORATION OF GKN HOLDING CORP, FILED IN THIS OFFICE ON THE
SIXTH DAY OF JUNE, A.D. 1991, AT 9 O'CLOCK A.M.
************
[SEAL OF THE STATE OF DELAWARE]
/s/Michael Harkins
----------------------------------
Michael Harkins, Secretary of State
AUTHENTICATION: *3074125
DATE: 06/10/1991
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/06/1991
911575188 -- 2116322
RESTATED
CERTIFICATE OF INCORPORATION
OF
GKN HOLDING CORP.
The undersigned corporation, in order to amend and restate its Certificate
of Incorporation, hereby certifies as follows:
FIRST: The name of the corporation is
GKN HOLDING CORP.
SECOND: The corporation was originally incorporated in Delaware on January
30, 1987 under its present name.
THIRD: The Certificate of Incorporation is hereby amended, to effect the
following:
To amend the total authorized shares of the Corporation to authorize
TWENTY FIVE MILLION (25,000,000) shares of Common Stock, $.0001 par value and
FIVE MILLION (5,000,000) shares of Preferred Stock, $.10 par value.
The text of the Certificate of Incorporation, as amended, is hereby
restated as follows:
"FIRST: The name of the corporation (hereinafter the "Corporation") is
-----
GKN HOLDING CORP.
SECOND: The address of the registered office of the Corporation in the
------
State of Delaware is 32 Loockerman Square, Suite L-100 City of Dover,
County of Kent, and the name of the registered agent of the Corporation in
the State of Delaware at such address is The Prentice-Hall Corporation
System, Inc.
THIRD: The nature of the business and the purposes to be conducted and
-----
promoted by the Corporation, which shall be in addition to the authority of
the Corporation to conduct any lawful business, to promote any lawful
purpose and to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of
Delaware, is as follows:
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest
therein, wherever situated, and to sell, convey, lease, exchange, transfer
or
<PAGE>
otherwise dispose of, or mortgage or pledge, all or any of its real or
personal property and assets, or any interest therein, wherever situated.
To carry on a general mercantile, industrial, investing, and trading
business in all its branches; to devise, invent, manufacture, fabricate,
assemble, install, service, maintain, alter, buy, sell, import, export,
license as licensor or licensee, lease as lessor or lessee, distribute,
job, enter into, negotiate, execute, acquire, and assign contracts in
respect of, acquire, receive, grant, and assign licensing arrangements,
options, franchises, and other rights in respect of, and generally deal in
and with, at wholesale and retail, as principal, and as sales, business,
special, or general agent, representative, broker, factor, merchant,
distributor, jobber, advisor, and in any other lawful capacity, goods,
wares, merchandise, commodities, and unimproved, improved, finished,
processed, and other real, personal, and mixed property of any and all
kinds, together with the components, resultants , and by-products thereof.
To guarantee, purchase, take, receive, subscribe for, and otherwise
acquire, own, hold, use, and otherwise employ, sell, lease, exchange,
transfer, and otherwise dispose of, mortgage, lend, pledge, and otherwise
deal in and with, securities, which term, for the purpose of this Article
THIRD, includes, without limitation, any shares of stock, bonds,
debentures, notes, mortgages, other obligations, and any certificates,
receipts or other instruments representing rights to receive, purchase or
subscribe for the same, or in any property or assets, of any persons,
domestic or foreign firms, associations, and corporations, and by any
government or agency or instrumentality thereof; to make payment therefor
in any lawful manner; and, while owner of any such securities, to exercise
any and all rights, powers and privileges in respect thereof, including the
right to vote.
To make, enter into, perform and carry out contracts of every kind and
description with any person, domestic or foreign firm, association,
corporation or government or agency or instrumentality thereof.
To acquire by purchase, exchange or otherwise, all or any part of, or
any interest in, the properties, assets, business and good will of any one
or more persons, domestic or foreign firms, associations or corporations
heretofore or hereafter engaged in any business for which a corporation may
now or hereafter be organized under the laws of the State of Delaware; to
pay for the same in cash, property or
2
<PAGE>
its own or other securities; to hold, operate, reorganize, liquidate, sell
or any other manner dispose of the whole or any part thereof; and in
connection therewith, to assume or guarantee performance of any
liabilities, obligations or contracts of such persons, firms, associations
or corporations, and to conduct the whole or any part of any business thus
acquired.
To lend money in furtherance of its corporate purposes and to invest
and reinvest its funds from time to time to such extent, to such persons,
foreign or domestic firms, associations, corporations, governments or
agencies or instrumentalities thereof, and on such terms and on such
security, if any, as the Board of Directors of the Corporation may
determine.
To make contracts of guaranty and suretyship of all kinds and to
endorse or guarantee the payment of principal, interest or dividends upon,
and to guarantee the performance of a sinking fund or other obligations of,
any securities, and to guarantee in any way permitted by law the
performance of any of the contracts or other undertakings in which the
Corporation may otherwise be or become interested, of any persons, foreign
or domestic firms, associations, corporations, governments or agencies or
instrumentalities thereof, or of any other combination, organization or
entity whatsoever.
To borrow money without limit as to amount and at such rates of
interest as it may determine; to issue from time to time and to sell its
own securities, including its shares of stock, notes, bonds, debentures,
and other obligations, in such amounts, on such terms and conditions, for
such purposes and for such prices, now or hereafter permitted by the laws
of the State of Delaware and by this Certificate of Incorporation, and the
Board of Directors of the Corporation may determine; and to secure any of
its obligations by mortgage, pledge, or other encumbrance of all or any of
its property, franchises and income.
To be a promoter or manager of other corporations of any type or kind;
and to participate with others in any corporation, partnership, limited
partnership, joint venture, or other association of any kind, or in any
transaction, undertaking or arrangement which the Corporation would have
the power to conduct by itself, whether or not such participation involves
sharing or delegation of control with or to others.
To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds, debentures,
and other negotiable or transferable
3
<PAGE>
instruments and evidences of indebtedness, whether secured by mortgage or
otherwise, as well as to secure the same by mortgage or otherwise, so far
as may be permitted by the laws of the State of Delaware.
To purchase, receive, take, reaquire or otherwise acquire, own and
hold, sell, lend, exchange, reissue, transfer or otherwise dispose of,
pledge, use, cancel, and otherwise deal in with its own shares and its
other securities from time to time to such extent and in such manner and
upon such terms as the Board of Directors of the Corporation shall
determine; provided that the Corporation shall not use its funds or
property for the purchase of its own shares of capital stock when its
capital is impaired or when such use would cause any impairment of its
capital, except to the extent permitted by law.
To organize, as an incorporator, or cause to be organized under the
laws of the State of Delaware, or of any other State of the United States
of America, or of the District of Columbia, or of any commonwealth,
territory, dependency, possession, agency or instrumentality of the United
States of America, or of any foreign country, a corporation or corporations
for the purpose of conducting and promoting any business or purpose for
which corporations may be organized, and to dissolve, wind up, liquidate,
merge or consolidate any such corporation or corporations or to cause the
same to be dissolved, wound up, liquidated, merged or consolidated.
To promote and exercise all or any part of the foregoing purposes and
powers in any and all parts of the world, and conduct its business in all
or any of its branches as principal, agent, broker, factor, contractor, and
in any other lawful capacity, either alone or through or in conjunction
with firms, trustee, syndicates, individuals, organizations, and other
entities in any part of the world, and, in conducting its business and
promoting any of its purposes, to maintain offices, to make and perform any
contracts and to do any acts and things, and to carry on any business, and
to exercise any powers and privileges suitable, convenient, or proper for
the conduct, promotion, and attainment of any of the business and purposes
herein specified or which at any time may be incidental thereto or may
appear conducive to or expedient for the accomplishment of any of such
business and purposes and which might be engaged in or carried on by a
corporation incorporated or organized under the General Corporation Law of
the State of Delaware, and to have and to exercise all of
4
<PAGE>
the powers conferred by the laws of the State of Delaware upon corporations
incorporated or organized under the General Corporation Law of the State of
Delaware.
To have, in furtherance of the foregoing corporate purposes, all of
the powers conferred upon corporations organized under the General
Corporation Law of the State of Delaware.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to
limit or restrict in any manner the purposes and powers of the Corporation,
and the purposes and powers herein specified shall not, except when
otherwise provided in this Article THIRD, be limited or restricted by
reference to, or inference from, the terms of any provision of this or any
other Article of this Certificate of Incorporation.
FOURTH: A. Authorized Capital Stock. The total number of shares of all
------ ------------------------
classes of stock which the Corporation shall have authority to issue is
THIRTY MILLION (30,000,000) shares, consisting of TWENTY-FIVE MILLION
(25,000,000) shares of Common Stock, par value $.0001 per share
(hereinafter the "Common Stock"), and FIVE MILLION (5,000,000) shares of
Preferred Stock, par value $.10 per share (hereinafter, the "Preferred
Stock"), of which One Thousand (1,000) shares have been designated Series A
Preferred Stock, the relative rights, preferences and limitations of which
are as set forth in sub-paragraph B of this Article FOURTH. The relative
rights, preferences and limitations of shares of undesignated Preferred
Stock shall be as provided in sub-paragraph C of this Article FOURTH.
The NINE HUNDRED SEVENTEEN THOUSAND, FIVE HUNDRED (917,500) shares of
Common Stock, $.0001 par value, which are presently issued and outstanding
are herewith changed into NINE MILLION, ONE HUNDRED SEVENTY FIVE THOUSAND
(9,175,000) shares of issued and outstanding common Stock, $.0001 par
value.
B. Designated Series A Preferred Stock.
-----------------------------------
(1) Designation.
-----------
The designation of this class of preferred shares shall be "Series A
Preferred Stock", $.10 par value.
5
<PAGE>
(2) Issuance of Shares.
------------------
No shares of Series A Preferred Stock shall be issued by the
Corporation to anyone other than Roger Gladstone and David Nussbaum.
(3) Voting Rights.
-------------
(i) Except as otherwise provided herein, the holders of Series A
Preferred Stock shall have equal right to vote, or consent in lieu of
voting, at all meetings of the shareholders of the Corporation, or
otherwise, in respect of any matter upon which the vote, or consent in lieu
of voting of the shareholders is required, including without limitation the
election of directors. Each share of Series A Preferred Stock shall be
entitled to one vote.
(ii) At such times as there are outstanding shares of Series A
Preferred Stock, the Board of Directors shall be comprised of such odd
number of Directors as shall be fixed by the Board of Directors in the
Corporation's By-Laws; provided, however, that such number of Directors
shall not be less than five nor more than fifteen.
The holders of Series A Preferred Stock voting as a separate class
shall have the sole right to vote for and elect a majority of the directors
of the Corporation who shall be known as the Preferred Directors, and to
remove any Preferred Director with or without cause at any time and to fill
all vacancies of Preferred Directors. All newly created vacancies in the
Board of Directors shall be filled by the Board of Directors until the next
meeting of shareholders.
(4) Liquidation.
-----------
In the event of any voluntary or involuntary dissolution, liquidation,
or winding up of the Corporation, there shall be paid to the holders of the
shares of Series A Preferred Stock after payment or provision for payment
of the debts and other liabilities of the Corporation, the sum of $1.00 per
share in cash before any sums shall be paid of any distributions made to
the holders of Common Stock. The entire assets of the Corporation shall be
distributed ratably among the holders of Series A Preferred Stock if the
amounts payable upon liquidation are not paid in full.
(5) Dividends.
---------
Shares of Series A Preferred Stock shall not be entitled to receive or
earn any dividends thereon.
6
<PAGE>
(6) Cancellation of Series A Preferred Stock.
----------------------------------------
(i) All shares of Series A Preferred Stock then issued to Mr. Roger
Gladstone and Mr. David Nussbaum shall be deemed canceled and no longer
designated, issued or outstanding on a date which is the earlier of (a) the
fifth anniversary of the original filing of the Certificate of Designation
with the Secretary of State of the State of Delaware (the "Anniversary
Date"), (b) the death prior to the Anniversary Date of both Roger Gladstone
and David Nussbaum, (c) the disability prior to the Anniversary Date of
both Roger Gladstone and David Nussbaum for a period of nine consecutive
months; or (iv) the disability prior to the Anniversary Date of both Roger
Gladstone and David Nussbaum for more than 270 days during any 12 month
period.
(ii) Anything to the contrary notwithstanding in sub-paragraph 6 (i)
hereof, shares of Series A Preferred Stock issued to either Roger Gladstone
or David Nussman shall, as to Roger Gladstone or David Nussbaum, as the
case may be, be canceled no longer designated, issued or outstanding if
prior to the Anniversary Date he (a) shall be finally adjudged by any
court, Securities and Exchange Commission, state securities commission or
stock exchange or National Association of Securities Dealers, Inc., after
the exhaustion of all available appellate process or the lapse of time to
initiate same, to have willfully violated the provisions of any federal or
state securities law, rule or regulation thereunder, or rule or regulation
of any self regulatory organization and by reason of such violation has
been permanently barred from association with a registered broker-dealer or
has been required, as part of any final order, judgment or decree from
exercising control over the management of or policies of a registered
broker-dealer.
(iii) The happening or occurrence of an event under sub-paragraph (6)
(i) or (6) (ii) resulting in the cancellation of Series A Preferred Stock
owned by either Roger Gladstone or David Nussbaum shall not result in the
cancellation of any Series A Preferred Stock owned by the other unless an
event under sub-paragraph (6) (i) or (6) (ii) shall have independently
occurred as to the other.
C. Undesignated Preferred Stock.
----------------------------
Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors. Each series shall be distinctly designated. All shares of any
one series of the Preferred Stock shall be alike in every particular event
except that there may be difference dates from which dividends thereon, if
any, shall be cumulative, if made
7
<PAGE>
cumulative. The powers, preferences and relative, participating, optional
and other rights of each series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding. Subject to the provisions of subparagraph
(4) of Paragraph (D) of this Article FOURTH, the Board of Directors of this
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of each particular
series of Preferred Stock, the designation, powers, preferences and
relative, participating, optional and other rights, and the qualifications,
limitations and restrictions thereof, if any, of such series, including,
but without limiting the generality of the foregoing, the following:
(1) The distinctive designation of and the number of shares of
Preferred Stock which shall constitute the series, which number may be
increased (except as otherwise fixed by the Board of Directors) or
decreased (but not below the number of shares thereof then outstanding)
from time to time by action of the Board of Directors;
(2) the rate and times at which, and the terms and conditions upon
which, dividends, if any on shares of the series shall be paid, the extent
of preferences or relation, if any, of such dividends to the dividends
payable on any other class or classes of stock of this Corporation, or on
any series of Preferred Stock or of any other class or classes of stock of
this Corporation, and whether such dividends shall be cumulative or
non-cumulative;
(3) the right, if any, of the holders of shares of the series to
convert the same into, or exchange the same for, shares of any other class
or classes of stock of this Corporation, or of any series of Preferred
Stock of this Corporation, and the terms and conditions of such conversion
or exchange;
(4) whether shares of the series shall be subject to redemption, and
the redemption price or prices including, without limitation, a redemption
price or prices payable in shares of the Common Stock and the time or times
at which, and the terms and conditions upon which, shares of the series may
be redeemed;
(5) the rights, if any, of the holders of shares of the series upon
voluntary or involuntary liquidation, merger, consolidation, distribution
or sale of assets, dissolution or winding up of this Corporation;
8
<PAGE>
(6) the terms of the sinking fund or redemption or purchase account,
if any, to be provided for shares of the series; and
(7) the voting powers, if any, of the holders of shares of the series
which may, without limiting the generality of the foregoing, include (i)
the right to more or less than one vote per share on any or all matters
votes upon by the stockholders and (ii) the right to vote, as a series by
itself or together with other series of Preferred Stock or together with
all series of Preferred Stock as a class, upon such matters, under such
circumstances and upon such conditions as the Board of Directors may fix,
including, without limitation, the right, voting as a series by itself or
together with other series of Preferred Stock or together with all series
of Preferred Stock as a class, to elect one or more directors of this
Corporation, or to elect a majority of the members of the Board, under such
circumstances and upon such conditions as the Board may determine.
D. Common Stock.
------------
(1) After the requirements with respect to preferential dividends on
Preferred Stock (fixed in accordance with provisions of paragraph (C) of
this Article FOURTH), if any, shall have been met and after this
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of paragraph
(C) of this Article FOURTH) and subject further to any other conditions
which may be fixed in accordance with the provisions of paragraph (C) of
this Article FOURTH, then but not otherwise, the holders of Common Stock
shall be entitled to receive such dividends, if any, as may be declared
from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount (fixed in
accordance with the provisions of paragraph (C) of this Article FOURTH), if
any, to be distributed to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or sale of assets,
dissolution or winding-up of this Corporation, the holders of the Common
Stock shall be entitled to receive all the remaining assets of this
Corporation, tangible and intangible, of whatever kind available for
distribution to stockholders, ratable in proportion to the number of shares
of Common Stock held by each.
9
<PAGE>
(3) Except as otherwise be required by law, this Certificate of
Incorporation or the provisions of the resolution or resolutions as may be
adopted by the Board of Directors pursuant to paragraph (C) of this Article
FOURTH, each holder of Common Stock shall have one vote in respect of each
share of Common Stock held by such holder on each matter voted upon by the
stockholders.
E. Other Provisions.
----------------
(1) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each
other series of Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in Paragraph (C) of this Article FOURTH, and
the consent, by class or series vote or otherwise, of the holders of the
Preferred Stock or such of the series of the Preferred Stock as are from
time to time outstanding shall not be required for the issuance by the
Board of Directors of any other series of Preferred Stock whether the
powers, preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them,
provided, however, that the Board of Directors may provide in such
resolution or resolutions adopted with respect to any series of Preferred
Stock that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other shares of Preferred Stock.
(2) Subject to the provisions of subparagraph (1) of this paragraph,
shares of any series of Preferred Stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(3) Shares of the Common Stock may be issued from time to time as the
Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(4) No holder of any of the shares of any class or series of stock or
of options, warrants or others rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or
10
<PAGE>
series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the Corporation of
any class or series, or carrying any right to purchase stock of any class
or series.
FIFTH: The incorporator of the Corporation is Robert D. Raicht, whose
-----
mailing address is c/o Lefrak, Newman & Myerson, 575 Madison Avenue, New
York, New York 10022.
SIXTH: Elections of Directors need not be by written ballot unless the
-----
By-Laws of the Corporation so provide.
SEVENTH: Whenever a compromise or arrangement is proposed between this
-------
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of this Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
this Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as
the case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or on all
the stockholders or class of stockholders of this Corporation, as the case
may be, and also on this Corporation.
EIGHTH: The personal liability of the directors of the Corporation is
------
hereby eliminated to the fullest extent permitted by paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State
of Delaware, as the same may be amended and supplemented.
NINTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against
11
<PAGE>
any and all of the expenses, liabilities, or other matters referred to in
or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person."
FOURTH: The amendment effected herein was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms the facts set forth herein are true under penalties of perjury this
5th day of June, 1991.
/s/ ROGER GLADSTONE
-----------------------------------
ROGER GLADSTONE, President
/s/ David Nussbaum
Attest: -----------------------------------
DAVID NUSSBAUM, Secretary
12
<PAGE>
STATE OF DELAWARE) INDEXED
KENT COUNTY )
RECORDED in the Office for the Recording of Deeds, Etc. At
Dover, In and for said County of Kent, In Corp. Record B
Vol. 135 Page 104 Etc. the 11th day of June A.D. 1991
WITNESS my hand and the Seal of said office.
/s/ [ILLEGIBLE], Recorded
- ---------------
EXHIBIT 3.1(a)
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "GNK HOLDING CORP.", FILED IN THIS OFFICE ON THE THIRTY-FIRST DAY
OF MAY, A.D. 1994, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS FOR RECORDING.
[SEAL] /s/ William T. Quillen
--------------------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: 7136059
DATE: 06-01-94
<PAGE>
CERTIFICATE OF AMENDMENT
OF
THE RESTATED CERTIFICATE OF INCORPORATION
OF
GKN HOLDING CORP.
------------------------------------
Pursuant to Section
242 of the
General Corporation Law
of the State of Delaware
------------------------------------
It is hereby certified that:
FIRST: The name of the corporation is GKN Holding Corp. ("Corporation").
SECOND: The Restated Certificate of Incorporation of the Corporation is
hereby amended to effect a one-for-two reverse stock split of the issued and
outstanding Common Stock of the Corporation whereby every two shares of Common
Stock, par value $.0001 per share, currently outstanding will be converted into
one share of Common Stock, par value $.0001 per share. The number of authorized
shares of Common stock will also be reduced to 35,000,000 shares from 70,000,000
shares. The foregoing amendments are effected by deleting existing subparagraph
A of Article FOURTH in its entirety and by substituting the following new
subparagraph A of Article FOURTH in lieu thereof:
A. Authorized Capital Stock. The total number of shares
of all classes of stock which the Corporation shall have
authority to issue is 40,000,000 shares, consisting of
35,000,000 shares of Common Stock, par value $.0001 per
<PAGE>
share (hereinafter the "Common Stock"), and 5,000,000 share
of Preferred Stock, par value $.10 per share (hereinafter,
the "Preferred Stock"), of which 1,000 shares have been
designated Series A Preferred Stock, the relative rights,
preferences and limitations of which are as set forth in
subparagraph B of this Article FOURTH. The relative rights,
preferences and limitations of shares of undesignated
Preferred Stock shall be as provided in subparagraph C of
this Article FOURTH.
and by adding to subparagraph D of Article FOURTH, a subsection (4), which reads
as follows:
D. Common Stock
(4) At 5:00 p.m., E.S.T., on May 31, 1994, the Corporation shall
effect a one-for-two reverse stock split of its shares of Common Stock
issued and outstanding on that date, whereby every two shares of Common
Stock, par value $.0001 per share ("Old Common Stock"), will be converted
into one share of Common Stock, par value $.0001 per share ("New Common
Stock"). On that date, the one-for-two reverse stock split shall occur
automatically without any further action on the part of the holders of the
Common Stock or the Corporation. No fractional shares of New Common stock
will be issued. All fractional shares of New Common Stock resulting from
the one-for-two reverse stock split shall be rounded up to the nearest
whole share.
THIRD: The foregoing amendments to the Restated Certificate of
Incorporation were duly adopted by the Corporation's Board of Directors in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware and thereafter were duly adopted by the written consent of
the majority of the outstanding shares of Common Stock of the Corporation in
accordance with the provisions of Section 228 of the General Corporation law of
<PAGE>
the State of Delaware, written notice of such adoption having been given in
accordance with the provisions of the aforestated Section 228 to all
stockholders of the Corporation not so consenting.
IN WITNESS WHEREOF, we have hereunto set our hands this 26th day of May,
1994.
GKN HOLDING CORP.
By: /s/ Robert Gladstone
-------------------------------
Robert Gladstone,
Executive Vice President
ATTEST:
By: /s/ Katherine Nathan
---------------------------
Katherine Nathan, Secretary
EXHIBIT 3.2
Adopted: January 16, 1992
BY-LAWS
OF
GKN HOLDING CORP.
ARTICLE I
OFFICES
1.1 Registered Office: The registered office shall be established and
maintained at 229 South State Street, in the City of Dover, in the County of
Kent, in the State of Delaware and The Prentice-Hall Corporation System, Inc.
shall be the registered agent of the corporation in charge thereof.
1.2 Other Offices: The corporation may have other offices, either within or
without the State of Delaware, at such place or places as the Board of Directors
may from time to time appoint or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings. All meetings of the stockholders of
the corporation shall be held at such place or places, within or outside the
State of Delaware as may be fixed by the Board of Directors from time to time or
as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders. An annual meeting of
stockholders shall be held each year at such place, either within or without the
State of Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the meeting. In
the event the Board of Directors fails to so determine the time, date and place
of the meeting, the annual meeting of stockholders shall be held at the main
headquarters of the corporation on a day in the month of April as shall be
determined by the Board of Directors. If the date of the annual meeting shall
fall upon a legal holiday, the meeting shall be held on the next succeeding
business day.
<PAGE>
2.3 Purposes of Annual Meetings. At each annual meeting, the stockholders
shall elect the members of the Board of Directors for the succeeding year. At
any such annual meeting any further proper corporate business may be transacted.
2.4 Special Meetings of Stockholders. Special meetings of the stockholders
or of any class or series thereof entitled to vote may be called for any
corporate purpose other than the election of directors by the President or by
the Board of Directors, or at the request in writing by stockholders of record
owning a majority of the issued and outstanding shares of Common Stock of the
corporation, which request shall state the purpose of the proposed meeting and
may be held at such time and place, within or without the State of Delaware, as
shall be stated in the notice of the meeting.
2.5 Notice of Meetings of Stockholders. Except as otherwise expressly
required or permitted by law, not less than ten days nor more than sixty days
before the date of every stockholders' meeting the Secretary shall give to each
stockholder of record entitled to vote at such meeting, written notice, served
personally, by mail or by telegram, stating the place, date and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. Such notice, if mailed, shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address for notices to such stockholder as it appears on the
records of the corporation.
2.6 Quorum of Stockholders.
(a) Unless otherwise provided by the Certificate of Incorporation or by
law, at any meeting of the stockholders, the presence in person or by proxy of
stockholders entitled to cast a majority of the votes thereat shall constitute a
quorum.
(b) At any meeting of the stockholders at which a quorum shall be present,
a majority of those present in person or by proxy may adjourn the meeting from
time to time without notice other than announcement at the meeting. In the
absence of a quorum, the officer presiding thereat shall have power to adjourn
the meeting from time to time until a quorum shall be present. Notice of any
adjourned meeting, other than announcement at the meeting, shall not be required
to be given, except as provided in paragraph (d)
2
<PAGE>
below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting
originally called but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof, unless a new record date is fixed by the Board of Directors.
(d) If an adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
2.7 Chairman and Secretary of Meeting. The President, or, in his absence, a
Vice President, shall preside at meetings of the stockholders. The Secretary or,
in his absence, an Assistant Secretary, shall act as secretary of the meeting,
or if neither is present, then the presiding officer may appoint a person to act
as secretary of the meeting.
2.8 Voting by Stockholders. Except as may be otherwise provided by the
Certificate of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
stock standing in his name on the books of the corporation on the record date
for the meeting. All elections and questions shall be decided by the vote of a
majority in interest of the stockholders present in person or represented by
proxy and entitled to vote at the meeting. All other matters shall be decided by
majority vote except as otherwise provided by the Certificate of Incorporation
or the laws of the State of Delaware.
2.9 Proxies. Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors. The election of directors and any other vote by ballot at
any meeting of the stockholders shall be supervised by at least two inspectors.
Such inspectors shall be appointed by the Board of Directors in advance of the
meeting; if one or both inspectors so appointed shall refuse to serve or shall
not be present,
3
<PAGE>
such appointment shall be made by the officer presiding at the meeting.
2.11 List of Stockholders.
(a) At least ten days before every meeting of stockholders the Secretary
shall prepare and make a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
(b) During ordinary business hours, for a period of at least ten days prior
to the meeting, such list shall be open to examination by any stockholder for
any purpose germane to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
(c) The list shall also be produced and kept at the time and place of the
meeting during the whole time of the meeting, and it may be inspected by any
stockholder who is present.
(d) The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings. Except as otherwise provided by
these by-laws or any resolutions adopted by the stockholders or Board of
Directors, the order of business and all other matters of procedure at every
meeting of stockholders shall be determined by the presiding officer. Not less
than 15 minutes following the presentation of any resolution to any meeting of
stockholders, the presiding officer may announce that further discussion on such
resolution shall be limited to not more than three persons who favor and not
more than three persons who oppose such resolution, each of whom shall be
designated by the presiding officer and shall thereupon be entitled to speak
thereon for not more than five minutes. After such person, or such a lesser
number thereof as shall advise the presiding officer or their desire so to
speak, shall have spoken on such resolution, the presiding officer may direct a
vote on such resolution without further discussion thereon at the meeting.
4
<PAGE>
2.13 Action by Consent Without Meeting. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
3.1 Powers of Directors. The property, business and affairs of the
corporation shall be managed by its Board of Directors which may exercise all
the powers or the corporation except such as are by the law of the State of
Delaware or the Certificate of Incorporation or these by-laws required to be
exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors. The number of
directors which shall constitute the Board of Directors shall be odd number from
five to fifteen, such number being fixed by resolution of the Board of
Directors. Each Director shall hold office until the next annual meeting of
stockholders and until his successor is elected and qualified, provided,
however, that a director may resign at any time. Directors need not be
stockholders.
3.3 Vacancies on Board of Directors; Removal.
(a) Any director may resign his office at any time be delivering his
resignation in writing to the President or the Secretary. It will take effect at
the time specified therein or, if no time is specified, it will be effective at
the time of its receipt by the corporation. The acceptance of resignation shall
not be necessary to make it effective, unless expressly so provided in the
resignation.
5
<PAGE>
(b) Any vacancy, or newly created directorship resulting from any increase
in the authorized number of directors, may be filled by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director, and any director so chosen shall hold office until the next annual
election of directors by the stockholders and until his successor is duly
elected and qualified or until his earlier resignation or removal.
(c) Removal. Any director may be removed with or without cause at any time
by the affirmative vote of stockholders holding of record in the aggregate at
least a majority of the outstanding shares of stock of the corporation, given at
a special meeting of the stockholders called for that purpose.
3.4 Meetings of the Board of Directors.
(a) The Board of Directors may hold their meetings, both regular and
special, either within or outside the State of Delaware.
(b) Regular meetings of the Board of Directors may be held at such time and
place as shall from time to time be determined by resolution of the Board of
Directors. No notice of such regular meetings shall be required. If the date
designated for any regular meeting be a legal holiday, then the meeting shall be
held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors shall be
held immediately following the annual meeting of the stockholders for the
election following the annual meeting of the stockholders for the election of
officers and the transaction of such other business as may come before it. If
such meeting is held at the place of the stockholders' meeting, no notice
thereof shall be required.
(d) Special meetings of the Board of Directors shall be held whenever
called by direction of the President or at the written request of any one
director.
(e) The Secretary shall give notice to each director of any special meeting
of the Board of Directors by mailing the same at least three days before the
meeting or by telegraphing, telexing, or delivering the same not later than the
day before the meeting. Unless required by law, such notice need not include a
statement of the business to be transacted at, or the purpose of, any such
meeting. Any and all business may be transacted at any meeting of the
6
<PAGE>
Board of Directors. No notice of any adjourned meeting need be given. No notice
to or waiver by any director shall be required with respect to any meeting at
which the director is present.
3.5 Quorum and Action. Unless provided otherwise by law or the Certificate
of Incorporation, a majority of the whole board shall constitute a quorum for
the transaction of business; but if there shall be less than a quorum at any
meeting of the Board, a majority of those present may adjourn the meeting from
time to time. The vote of a majority of the directors present at any meeting at
which a quorum is present shall be necessary to constitute the act of the Board
of Directors.
3.6 Presiding Officer and Secretary of Meeting. The Chairman of the Board,
or, in his absence, the President, or, in their absence a member of the Board of
Directors selected by the members present, shall preside at meetings of the
Board. The Secretary shall act as secretary of the meeting, but in his absence
the presiding officer may appoint a secretary of the meeting.
3.7 Action by Consent Without Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes or proceedings of the Board or committee.
3.8. Action by Telephonic Conference. Members of the Board of Directors, or
any committee designated by such board, may participate in a meeting of such
board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting.
3.9 Committees.
(a) The Board of Directors may, by resolution or resolutions passed by a
majority of the whole board, designate one or more committees, each committee to
consist of two or more of the directors of the corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the
7
<PAGE>
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any such meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
(b) Any such committee, to the extent provided in the resolution or
resolution of the Board of Directors, or in these by-laws, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers which may require it; but no
such committee shall have the power of authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
or amending the by-laws of the corporation; and unless the resolution, these
by-laws, or the Certificate of Incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
3.10.Compensation of Directors. Directors shall receive such reasonable
compensation for their service on the Board of Directors or any committees
thereof, whether in the form of salary or a fixed fee for attendance at
meetings, or both, with expenses, if any, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving the corporation in any other capacity and receiving
compensation therefor.
3.11 Contracts.
(a) No contract or other transaction between this corporation and any other
corporation shall be impaired, affected or invalidated, nor shall any
director be liable in any way by reason of the fact that any one or more of
the directors of this corporation is or are interested in, or is a director
or officer, or are directors or officers of such other corporation,
provided that such facts are disclosed or made known to the Board of
Directors.
8
<PAGE>
(b) Any director, personally and individually, may be a party to or may be
interested in any contract or transaction of this corporation, and no director
shall be liable in any way be reason of such interest, provided that the fact of
such interest be disclosed or made known to the Board of Directors, and provided
that the Board of Directors shall authorize, approve or ratify such contract or
transaction by the vote (not counting the vote of any such director) of a
majority of a quorum, notwithstanding the presence of any such director at the
meeting at which such action is taken. Such director or directors may be counted
in determining the presence of a quorum at such meeting. This Section shall not
be construed to impari or invalidate or in any way affect any contract or other
transaction which would otherwise be valid under the law (common, statutory or
otherwise) applicable thereto.
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms.
(a) The elected officers of the corporation shall be a Chairman, a
President, one or more Vice Presidents, a Treasurer and a Secretary, who shall
be elected by the Board of Directors at its annual meeting following the annual
meeting of the stockholders, to serve at the pleasure of the Board or otherwise
as shall be specified by the Board at the time of such election and until their
successors are elected and qualify.
(b) The Board of Directors may elect or appoint at any time, and from time
to time, additional officers or agents with such duties as it may deem necessary
or desirable. Such additional officers shall serve at the pleasure of the Board
or otherwise as shall be specified by the Board at the time of such election or
appointment. Two or more offices may be held by the same person.
(c) Any vacancy in any office may be filled for the unexpired portion of
the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such resignation shall
be made in writing and shall take effect at the time specified therein or, if no
time be
9
<PAGE>
specified, at the time of its receipt by the corporation. The acceptance of
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
(e) The salaries of all officers of the corporation shall be fixed by the
Board of Directors.
4.2 Removal of Elected Officers. Any elected officer may be removed at any
time, either with or without cause, by resolution adopted at any regular or
special meeting of the Board of Directors by a majority of the directors then in
office.
4.3 Duties.
(a) Chairman. The Chairman of the Board of Directors shall preside at all
meetings of the Board of Directors and he shall have and perform such other
duties as from time to time may be assigned to him by the Board of Directors.
(b) President. The President shall be the principal executive officer of
the corporation and, subject to the control of the Board of Directors, shall
supervise and control all the business and affairs of the corporation. He shall,
when present, preside at all meetings of the stockholders. He shall see that all
orders and resolutions of the Board of Directors are carried into effect (unless
any such order or resolution shall provide otherwise), and in general shall
perform all duties incident to the office of president and such other duties as
may prescribed by the Board of Directors from time to time.
(c) Vice President. Each Vice President, if any, shall have such powers and
perform such duties as the Board of Directors may determine or as may be
assigned to him by the President. In the absence of the President or in the
event of his death, or inability or refusal to act, the Vice President (or in
the event there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any
designation, then in the order of their election, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President and when so acting, shall have all the powers and be subject to
all the restrictions upon the President.
(d) Treasurer. The Treasurer shall (1) have charge and custody of and be
responsible for all funds and
10
<PAGE>
securities of the Corporation; (2) receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever; (3) deposit all such
moneys in the name of the Corporation in such banks, trust companies, or other
depositories as shall be selected by resolution of the Board of Directors; and
(4) in general perform all duties incident to the office of treasurer and such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors. He shall, if required by the Board of Directors, give a
bond for the faithful discharge of his duties in such sum and with such surety
or sureties as the Board of Directors shall determine.
(e) Secretary. The Secretary shall (1) keep the minutes of the meetings of
the stockholders, the Board of Directors, the Executive Committee (if
designated), and all other committees, if any, of which a secretary shall not
have been appointed, in one or more books provided for that purpose; (2) see
that all notices are duly given in accordance with the provisions of these
by-laws and as required by law; (3) be custodian of the corporate records and of
the seal of the Corporation and see that the seal of the Corporation is affixed
to all documents, the execution of which on behalf of the Corporation under its
seal, is duly authorized; (4) keep a register of the post office address of each
stockholder which shall be furnished to the Secretary by such stockholder; (5)
have general charge of stock transfer books of the Corporation; and (6) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors.
(f) Assistant Secretaries and Assistant Treasurers. At the request of the
Secretary or in his absence or disability, one or more Assistant Secretaries
designated by him or by the Board of Directors shall have all the powers of the
Secretary for such period as he or it may designate or until he or it revokes
such designation. At the request of the Treasurer or in his absence or
disability, one or more Assistant Treasurers designated by him or by the Board
of Directors shall have all the powers of the Treasurer for such period as he or
it may designate or until he or it revokes such designation. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
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<PAGE>
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates.
(a) Every holder of stock in the corporation shall be entitled to have a
certificate signed by, or in the name of, the corporation by the Chairman or the
President or a Vice President, and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, certifying the number of shares owned
by him.
(b) If such certificate is countersigned by a transfer agent other than the
corporation or its employee, or by a registrar other than the corporation or its
employee, the signatures of the officers of the corporation may be facsimiles,
and, if permitted by law, any other signature may be a facsimile.
(c) In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not inconsistent
with the Certificate of Incorporation shall be numbered and registered in the
order in which they are issued.
(e) All certificates surrendered to the corporation shall be cancelled with
the date of cancellation, and shall be retained by the Secretary, together with
the powers of attorney to transfer and the assignments of the shares represented
by such certificates, for such period of time as shall be prescribed from time
to time by resolution of the Board of Directors.
5.2 Record Ownership. A record of the name and address of the holder of
each certificate, the number of shares represented thereby and the date of issue
thereof shall be made on the corporation's book. The corporation shall be
entitled to treat the holder of any share of stock as the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
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not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership. Transfers of stock shall be made on the
books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and transferee request the corporation to do so.
5.4 Lost, Stolen or Destroyed Certificates. Certificates representing
shares of the stock of the corporation shall be issued in place of any
certificate alleged to have been lost, stolen or destroyed in such manner and on
such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates. The
corporation may maintain one or more transfer offices or agencies where stock of
the corporation shall be transferable. The corporation may also maintain one or
more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
5.6 Fixing Record Date for Determination of Stockholders of Record. The
Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in any
case shall be not more than sixty days nor less than ten days before the date of
a meeting of the stockholders, nor more than sixty days prior to any other
action requiring such determination of the stockholders. A determination of
stockholders of record entitled to notice or to vote at a meeting of
stockholders shall apply to any adjournment of
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the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
5.7 Dividends. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Board of Directors from time to time in
their discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interest of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting. Unless the Board of Directors shall otherwise order, the
Chairman, the President, any Vice President, the Secretary or the Treasurer
shall have full power and authority, on behalf of the corporation, to attend,
act and vote at any meeting of the stockholders of any corporation in which the
corporation may hold stock, and at such meeting to exercise any or all rights
and powers incident to the ownership of such stock, and to execute on behalf of
the corporation a proxy or proxies empowering another or others to act as
aforesaid. The Board of Directors from time to time may confer like powers upon
any other persons or persons.
6.2 General Authorization to Transfer Securities Held by the Corporation.
(a) Any of the following officers, to wit: the Chairman, the President, any
Vice President and the Treasurer shall be, and they hereby are, authorized and
empowered to transfer, convert, endorse, sell, assign, set over and deliver any
and all shares of stock, bonds, debentures, notes, subscription warrants, stock
purchase warrants, evidence of indebtedness, or other securities now or
hereafter standing in the name of or owned by the corporation, and to make,
execute and deliver, under the seal of the corporation, any and all written
instruments of assignment and transfer necessary or proper to effectuate the
authority hereby conferred.
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(b) Whenever there shall be annexed to any instrument of assignment and
transfer executed pursuant to and in accordance with the foregoing paragraph
(a), a certificate of the Secretary of the corporation in office at the date of
such certificate setting forth the provisions of this Section 6.2 and stating
that they are in full force and effect and setting forth the names of persons
who are then officers of the corporation, then all persons to whom such
instrument and annexed certificate shall thereafter come, shall be entitled,
without further inquiry or investigation and regardless of the date of such
certificate, to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were therefore duly
and properly transferred, endorsed, sold, assigned, set over and delivered by
the corporation, and that with respect to such securities the authority of these
provisions of the by-laws and of such officers is still in full force and
effect.
ARTICLE VII
MISCELLANEOUS
7.1 Signatories. All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers of such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal. The seal of the corporation shall be in such form and shall have
such content as the Board of Directors shall from time to time determine.
7.3 Notice and Waiver of Notice. Whenever any notice of the time, place or
purpose of any meeting of the stockholders, directors or a committee is required
to be given under the law of the State of Delaware, the Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance at the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
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7.4 Amendment of By-Laws.
(a) By Board of Directors. The by-laws of the corporation may be altered,
amended or repealed or new by-laws may be made or adopted by the Board of
Directors at any regular or special meeting of the Board; provided that
paragraph (c) of Section 3.3 and Section 7.4(b) of these By-Laws may be altered,
amended or repealed only by action of the stockholders acting pursuant to
Section 7.4(b) hereof.
(b) By Stockholders. The by-laws of the corporation may also be altered,
amended or repealed or new by-laws may be made or adopted by the vote of a
majority in interest of the stockholders represented and entitled to vote upon
the election of directors, at any meeting at which a quorum is present.
7.5 Indemnity. The corporation shall indemnify its directors, officers,
employees and/or agents to the fullest extent allowed by law.
7.6 Fiscal Year. Except as from time to time otherwise determined by the
Board of Directors, the fiscal year of the corporation shall end on January 31.
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SUPERCEDED on Jan. 16, 1992
BY-LAWS
of
GKN HOLDING CORP.
ARTICLE I - OFFICES
SECTION I. REGISTERED OFFICE. -- The registered office shall be established
and maintained at 229 South State Street, in the County of Kent in the State of
Delaware.
SECTION 2. OTHER OFFICES. -- The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require.
ARTICLE II - MEETING OF STOCKHOLDERS
SECTION I. ANNUAL MEETINGS. -- Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Delaware on a day in the month of March as shall be determined by
the Board of Directors.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
may transact such other corporate business as shall be stated in the notice of
the meeting.
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SECTION 2. OTHER MEETINGS. -- Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting.
SECTION 3. VOTING. -- Each stockholder entitled to vote in accordance with
the terms and provisions of the Certificate of Incorporation and these By-Laws
shall be entitled to one vote, in person or by proxy, for each share of stock
entitled to vote held by such stockholder, but no proxy shall be voted after
three years from its date unless such proxy provides for a longer period. Upon
the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot. All elections for directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Certificate of Incorporation or the laws of
the State of Delaware.
SECTION 4. STOCKHOLDER LIST. -- The officer who has charge of the stock
ledger of the corporation shall at least 10 days before each meeting of
stockholders prepare a complete alphabetical addressed list of the stockholders
entitled to vote at the ensuing election, with the number of shares held by
each. Said list shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for a period of
at least ten days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall be available for inspection at the meeting.
SECTION 5. QUORUM. -- Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote shall be present. At any such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
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SECTION 6. SPECIAL MEETINGS. -- Special meetings of the stockholders, for
any purpose, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the directors
or stockholders entitled to vote. Such request shall state the purpose of the
proposed meeting.
SECTION 7. NOTICE OF MEETINGS. -- Written notice, stating the place, date
and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than fifty days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. -- No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the stockholders entitled to vote thereat.
SECTION 9. ACTION WITHOUT MEETING. -- Except as otherwise provided by the
Certificate of Incorporation, whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or the Certificate of Incorporation or
of these By-Laws, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action if
such meeting were held, shall consent in writing to such corporate action being
taken.
ARTICLE III - DIRECTORS
SECTION I. NUMBER AND TERM. -- The number of directors shall be from 3 to
9. The directors shall be elected at the annual meeting of the stockholders and
each director shall be elected to serve until his successor shall be elected and
shall qualify. The number of directors may not be less than three except that
where all the shares of the corporation are owned beneficially and of record by
either one or two stockholders, the number of directors may be less than three
but not less than the number of stockholders.
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SECTION 2. RESIGNATIONS. -- Any director, member of a committee or other
officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. -- If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. -- Any director or directors may be removed either for
or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.
SECTION 5. INCREASE OF NUMBER. -- The number of directors may be increased
by amendment of these By-Laws by the affirmative vote of a majority of the
directors, though less than a quorom, or by the affirmative vote of a majority
in interest of the stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional directors may be chosen
at such meeting to hold office until the next annual election and until their
successors are elected and qualify.
SECTION 6. COMPENSATIONS. -- Directors shall not receive any stated salary
for their services as directors or as members of committees, but by resolution
of the board a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
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<PAGE>
SECTION 7. ACTION WITHOUT MEETING. -- Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the board, or of such committee as the case
may be, and such written consent is filed with the minutes of proceedings of the
board or committee.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. -- The officers of the corporation shall consist of a
President, a Treasurer, and a Secretary, and shall be elected by the Board of
Directors and shall hold office until their successors are elected and
qualified. In addition, the Board of Directors may elect a Chairman, one or more
Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as it
may deem proper. None of the officers of the corporation need be directors. The
officers shall be elected at the first meeting of the Board of Directors after
each annual meeting. More than two offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS. -- The Board of Directors may appoint
such officers and agents as it may deem advisable, who shall hold their offices
for such terms and shall exercise such power and perform such duties as shall be
determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. -- The Chairman of the Board of Directors if one be
elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. -- The President shall be the chief executive officer
of the corporation and shall have the general powers and duties of supervision
and management usually vested in the office of President of a corporation. He
shall preside at all meetings of the stockholders if present thereat, and in the
absence or non-election of the Chairman of the Board of Directors, at all
meetings of the Board of Directors, and shall have general supervision,
direction and control of the business of the corporation. Except as the Board of
Directors shall authorize the execution thereof in some other manner, he shall
execute bonds, mortgages, and other contracts in behalf of the corporation, and
shall cause the seal to be affixed to any instrument requiring it and when so
affixed the seal shall be attested by the signature of the Secretary or the
Treasurer or an Assistant Secretary or an Assistant Treasurer.
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SECTION 5. VICE-PRESIDENT. -- Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the directors.
SECTION 6. TREASURER. -- The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be ordered
by the Board of Directors, or the President, taking proper vouchers for such
disbursements. He shall render to the President and Board of Directors at the
regular meetings of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial condition of
the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the board shall prescribe.
SECTION 7. SECRETARY. -- The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the President, or by the directors, or stockholders, upon whose requisition
the meeting is called as provided in these By-Laws. He shall record all the
proceedings of the meetings of the corporation and of directors in a book to be
kept for that purpose. He shall keep in safe custody the seal of the
corporation, and when authorized by the Board of Directors, affix the same to
any instrument requiring it, and when so affixed it shall be attested by his
signature or by the signature of any assistant secretary.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES -- Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
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<PAGE>
ARTICLE V
SECTION 1. CERTIFICATES OF STOCK. -- Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the chairman or vice-chairman of the board of directors,
or the president or a vice-president and the treasurer or an assistant
treasurer, or the secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be authorized to issue
more than one class of stock or more than one series of any class, the
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations, or restrictions of such preferences and/or rights shall be set
forth in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class of series of stock, provided
that, except as other wise provided in section 202 of the General Corporation
Law of Delaware, in lieu of the foregoing requirements, there may be set forth
on the face or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the corporation will
furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Where a
certificate is countersigned (1) by a transfer agent other than the corporation
or its employee, the signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES -- New certificates of stock may be issued in
the place of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost or destroyed certificate or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against it on
account of the alleged loss of any such new certificate.
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<PAGE>
SECTION 3. TRANSFER OF SHARES. -- The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other persons as the directors may designate, by who they shall be
canceled, and new certificates shall thereupon be issued. A record shall be made
of each transfer and whenever a transfer shall be made for collateral security,
and not absolutely, it shall be so expressed in the entry of the transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. -- In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercised any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall not be more than sixty nor less than ten
days before the day of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 5. DIVIDENDS. -- Subject to the provisions of the Certificate of
Incorporation the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividends there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. -- The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"CORPORATE SEAL DELAWARE." Said seal may be used by causing it for facsimile
thereof to be impressed or affixed or otherwise reproduced.
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SECTION 7. FISCAL YEAR. -- The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS -- All checks, drafts, or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by the officer or officers, agent or agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE -- Whenever any notice is required
by these By-Laws to be given, personal notice is not meant unless expressly
stated, and any notice so required shall be deemed to be sufficient if given by
depositing the same in the United States mail, postage prepaid, addressed to the
person entitled thereto at his address as it appears on the records of the
corporation, and such notice shall be deemed to have been given on the day of
such mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under the provisions
of any law, or under the provisions of the Certificate of Incorporation of the
corporation or these By-Laws, a waiver thereof in writing signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed proper notice.
ARTICLE VI - CLOSE CORPORATIONS: MANAGEMENT BY SHAREHOLDERS
If the certificate of incorporation of the corporation states that the
business and affairs of the corporation shall be managed by the shareholders of
the corporation rather than by a board of directors, then, whenever the context
so requires the shareholders of the corporation shall be deemed the directors of
the corporation for purposes of applying any provision of these by-laws.
ARTICLE VII - AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
thereof is contained in the notice of such special meeting by the affirmative
vote of a majority of the stock issued and outstanding or entitled to vote
thereat, or by the regular meeting of the Board of Directors, at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors, if notice thereof is contained in the notice of such special meeting.
bl 9
EXHIBIT 10.1
SUBLEASE DOCUMENTS
12TH FLOOR, 61 BROADWAY
NEW YORK, NEW YORK
SMITH NEW COURT CARL MARKS, INC.
AS SUBLANDLORD AND GEN HOLDINGS
CORP., AS SUBTENANT.
<PAGE>
THE GALBREATH COMPANY
437 MADISON AVENUE
NEW YORK, NEW YORK 10022
July 16, 1992
ALL TENANTS AND OCCUPANTS
OF 61 BROADWAY
NEW YORK, NEW YORK
Effective July 16, 1992, the present owners have assigned their rights
under your leases and have transferred, conveyed and delivered possession of the
building located at 61 Broadway, New York, New York, to Metropolitan Life
Insurance Company.
Henceforth all rental payments and other charges, including any delinquency
payments and escalation payments now or hereafter becoming due under your lease
are, until you are otherwise notified in writing, to be made payable to and
delivered to:
The Galbreath Company, as agent for
Metropolitan Life Insurance Company
437 Madison Avenue, 38th Floor
New York, N.Y. 10022
Attn: Robert Hughes
All notices to the lessor under the lease should be sent to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attn: Senior Vice-President, Real Estate Investments
with copies to: Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Attn: Vice-President and Investment Counsel, Law Dept,
Real Estate Investments
The Galbreath Company
61 Broadway - room 700
New York, N.Y. 10006
Attn: John V. Wheeler, Managing Director
Very truly yours,
By: /s/Joanne Douvas
-------------------------------
Joanne Douvas, Managing Director
The Galbreath Company, as agent for
The Metropolitan Life Insurance Company
<PAGE>
Consented and Agreed to By:
61 BROADWAY ASSOCIATES, a
Massachusetts general partnership
By: 61PT Realty Corporation, a
Delaware Corporation, a
general partner
By: /s/Robert A. Silpe
---------------------------------
Name: Robert A. Silpe
Title: Vice President
By: 61 Broadway PT Associates
Limited Partnership,
a Delaware limited
partnership, a general partner
By: /s/Robert A. Silpe
-----------------------------------
Name: Robert A. Silpe
Title: Vice President
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/W.F. Dickerson Jr.
------------------------------------
Name: W.F. Dickerson, Jr.
Title: Asst Vice-President
<PAGE>
INDEX
Agreement of Sublease (the "Sublease") dated
as of August 27, 1990 between Smith New Court
Carl Marks, Inc., as Sublandlord, and GKN
Holdings Corp., as Subtenant, with respect to
a portion of the 12th floor of the building
known as 61 Broadway, New York, New York ................................... 1
Letter Agreement among 61 Broadway Associates,
Smith New Court Carl Marks, Inc. and GKN Holdings
Corp. dated September 13, 1990, pursuant to which,
61 Broadway Associates, as Landlord, consented to
the Sublease ............................................................... 2
Amendment of Sublease (the "Amendment") dated as
of October 15, 1991 between Smith New Court Carl
Marks, Inc., as Sublandlord, and GKN Holdings Corp.,
as Subtenant, with respect to the balance of the
12th floor in the building known as 61 Broadway,
New York, New York (the obligations of Subtenant
thereunder having been guaranteed by GKN Securities,
Corp.) ..................................................................... 3
Letter Agreement between Smith New Court Carl
Marks, Inc. and GKN Holdings Corp. dated October
4, 1991, pursuant to which Sublandlord agreed to
give Subtenant a credit against "base rental" for
up to $100,000 of alteration work performed within
the premises demised under the Amendment ................................... 4
Letter Agreement among 61 Broadway Associates,
Smith New Court Carl Marks, Inc. and GKN Holdings
Corp. dated October 17, 1991, pursuant to which,
61 Broadway Associates, as Landlord, consented to
the Amendment .............................................................. 5
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HEF8183R/261
AGREEMENT OF SUBLEASE
AGREEMENT OF SUBLEASE (this "Sublease") made as of the 27th day of August,
1990 between SMITH NEW COURT CARL MARKS, INC. (successor in interest to Smith
New Court, Inc.), a New York corporation having an office at 61 Broadway, New
York, New York 10006 ("Sublandlord") and GKN HOLDINGS CORP., a New York
corporation having an office at 500 Fifth Avenue, Suite 2822, New York, New
10110 ("Subtenant").
W I T N E S S E T H :
WHEREAS, pursuant to an Agreement of Lease dated as of January 15, 1986 as
amended by the Amendment To Agreement of Lease (the "Amendment") dated as March
31, 1986 (the "First Amendment") and the Second Amendment to Agreement of Lease
dated as of August 7, 1987 (the "Second Amendment") (the Agreement of Lease, as
so amended, the "Overlease"), a copy of which is attached hereto, Nineteen New
York Properties Limited Partnership ("Overlandlord") leased to Sublandlord a
portion of the twelfth (12th) floor as more particularly described in the
Overlease comprising approximately 10,733 rentable square feet of floor area as
indicated as "A" & "B" on the floor plan annexed hereto as Exhibit A (the
"Premises" or the "Sublet Space") in the building located at 61 Broadway, New
York, New York (the "Building"); and
WHEREAS, Sublandlord desires to sublet to Subtenant and Subtenant desires
to hire from Sublandlord, the Premises.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Sublandlord hereby subleases to Subtenant and Subtenant hereby hires
from Sublandlord the Sublet Space, subject to the Overlease and all ground,
underlying or superior leases and mortgages to which the Overlease is or may
hereafter be subject and subordinate in accordance with its terms and upon the
rentals, terms, covenants, conditions and provisions herein set forth.
2. All Article and Section references contained herein are references to
Articles and Sections in the Overlease, except as
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otherwise specifically provided herein. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Overlease.
3. Subtenant shall use the Sublet Space only for the Permitted Uses and for
no other purposes.
4. The term of this Sublease (the "Term") shall commence (the "Commencement
Date") five (5) business days following the day Sublandlord notifies Subtenant
the Overlandlord has granted its consent (the "Consent") to this Sublease in
accordance with the terms of the Overlease and this Sublease and shall expire on
February 27, 1988 (the "Expiration Date"), unless sooner terminated pursuant to
any provision hereof. Sublandlord shall notify Subtenants promptly after the
Consent is granted or denied. If the Consent is not granted by the date which is
ninety days from the date hereof, then either party to this Sublease may
terminate this Sublease. Sublandlord shall promptly request from Overlandlord
the Consent, and shall use all reasonable efforts to secure the Consent in a
timely fashion. At either party's request, the other party shall within 5 (five)
business days after such request is made enter into an agreement in form
reasonably satisfactory to both parties, setting forth the Commencement Date,
but no such agreement shall be necessary to effectuate the Commencement Date.
5. A. Throughout the Term, Subtenant shall pay to Sublandlord, without
abatement, deduction of setoff of any amount whatsoever (except as otherwise
expressly set forth herein), in lawful money of the United States of America, by
check drawn to Sublandlord's order on a bank which is a member of the New York
Clearinghouse Association, at Sublandlord may designate, (i) base rent for the
Sublet Space (the "Base Rent") at an annual rate equal to (a) One Hundred Eighty
Three Thousand Three Hundred and Ninety Three Dollars ($183,393.00) for the
period from the date (the "Rent Commencement Date") which is the first day of
the calendar month following the thirteenth (13th) month anniversary day after
the Commencement Date and ending on the date (the "Increase Date") which is the
nineteenth (19th) month anniversary day after the Commencement Date; (b) Two
Hundred Twenty Five Thousand Three Hundred and Ninety Three Dollars
($225,393.00) for the period from the day immediately following the Increase
Date and ending on February 28, 1994 and(C)Two Hundred Sixty Thousand Three
Hundred Twenty Five Dollars ($260,325.00) for the period from March 1, 1994
through the Expiration Date; and (ii) Additional Rent (as defined below) as
hereinafter provided. The term "rent" as used in this Sublease shall include
Base Rent and Additional Rent.
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B. Base Rent shall be payable in equal monthly installments, in
advance on the first day of each and every month commencing with the month in
which the Rent Commencement Date occurs, without notice or demand and without
setoff or deduction (except as otherwise expressly set forth herein). If the
Rent Commencement Date occurs on a day other than the first day of a calendar
month, or if the Term shall terminate on a day other than the last day of a
calendar month, a proportional per diem reduction in the first or last, as the
case may be, installment or Base Rent shall be made. On the Rent Commencement
Date, Subtenant shall deliver to Sublandlord payment of the Base Rent payable
for the month in which the Rent Commencement Date occurs.
C. Subtenant shall pay to Sublandlord, within three business days
after receiving a bill therefor (which bill shall include a copy of
Overlandlord's bill to Sublandlord with respect to items (i), (ii), (iii), (iv)
and (v) below) (appropriately redacted insofar as it relates to Base Rent), as
"Additional Rents", from and after the Commencement Date:
(i) One Hundred percent (100%) of any payments on account of
Taxes (as defined in the Overlease) payable by Sublandlord to Overlandlord under
Article 28 of the Overlease, provided that for purposes of this Sublease, the
Subtenant's Share of any Taxes shall be calculated as if Base Tax Year (as
defined in the Overlease) refers to the real estate fiscal tax year of the City
of New York commencing on July 1, 1990 and ending on June 30, 1991;
(ii) One Hundred percent (100%) of any payments on account of
Operating Expenses (as defined in the Overlease) payable by Sublandlord to
Overlandlord under Article 28 of the Overlease, provided that for purposes of
this Sublease, the Subtenant's Share of any Operating Expenses shall be
calculated as if the Base Expense Year (as defined in the Overlease) refers to
the average of the twelve month periods for the years 1990 and 1991. All
payments made by Subtenant to Sublandlord shall be subject to reconciliation as
provided for in Article 28 of the Overlease.
(iii) If a separate meter shall measure the consumption of
electrical energy in the Sublet Space (and no other space), Subtenant shall pay
for such consumption on the basis of Overlandlord's average cost of electricity
for the Building per KWH (determined in accordance with the Overlease) plus an
additional eight percent (8%) thereof to reimburse Sublandlord for overhead and
supervision payable by Sublandlord to Overlandlord under the Overlease, as
described in, and as may be adjusted from time to time pursuant to, Article 29.
If no such meter shall exist, but
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rather one meter shall measure electrical consumption for the Premises and all
other premises, then Subtenant shall pay Subtenant's Share of all charges for
electrical consumption (including the eight percent (8%) surcharge for
Overlandlord's overhead and supervision) (collectively, "Electrical Charges")
relating to the Premises based upon Overlandlord's bills therefore; provided,
however, that if in Sublandlord's or Subtenant's reasonable judgment such
allocation of Electrical Charges shall be inequitable, Sublandlord shall engage
the services of an independent electrical consultant reasonably acceptable to
the Subtenant to determine a fair allocation of Electrical Charges based upon
Subtenant's consumption and demand for Electrical Energy and Subtenant shall
from and after the date of such determination pay as its share of Electrical
Charges the percentage so determined by such consultant. The determination of
such consultant shall be binding on both Sublandlord and Subtenant.
(iv) Except as otherwise provided herein, any additional rent
atttributable to the Sublet Space with respect to the terms of this Sublease
payable to Overlandlord under the Overlease; and
(v) Any other amounts payable to Sublandlord under this Sublease.
D. Sublandlord agrees to send to Subtenant copies of all bills and
other notices received by Sublandlord from Overlandlord relating to any item
with respect to which Additional Rent shall be payable hereunder promptly after
receipt thereof by Sublandlord. Any delay or failure of Sublandlord in billing
any Additional Rent shall not constitute a waiver of or in any way impair the
continuing obligation of Subtenant to pay Additional Rent. Notwithstanding
anything else contained herein to the contrary, Sublandlord shall use its best
efforts to consolidate all bills relating to Additional Rent into one invoice
which invoice shall include the charge for Base Rent and shall be sent to
Subtenant on a monthly basis.
E. The parties agree that for all purposes of this Sublease the Sublet
Space shall be deemed to contain 10,733 rentable square feet.
6. Subtenant has inspected the Sublet Space and shall accept the same "as
is" as of the date hereof and Sublandlord shall not be required to perform any
work therein whatsoever except that Sublandlord shall, prior to the Commencement
Date, clean the Sublet Space and replace any missing or broken ceiling tiles and
light fixtures.
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7. Subtenant shall make no alterations, installations, additions or
improvements ("Alterations") in or to the Sublet Space without in each instance
obtaining (a) the prior written consent of Sublandlord, which consent shall not
be unreasonably withheld or delayed (except as provided below) and (b) if
required under the Overlease, the Overlandlord's Consent. Sublandlord's good
faith determination that Overlandlord's consent is so required shall be binding,
which determination shall be deemed made in good faith in the event that the
Overlandlord notifies Sublandlord that Overlandlord's consent is required.
Sublandlord agrees to reasonably cooperate, at Subtenant's sole cost and
expense, in obtaining Overlandlord's consent. Subtenant shall reimburse
Sublandlord for all costs and expenses it may reasonably incur in connection
with Alterations, including reasonable attorneys' fees and the reasonable fees
of any independent professional reviewing plans and specifications for the
Alterations. Subtenant shall perform all Alterations in accordance with the
requirements of the Overlease, including without limitation Article 3, as if
Subtenant were the tenant thereunder. Notwithstanding anything to the contrary
herein, with respect to the employment of contractors, and the making of
structural Alterations and Alterations which affect the HVAC, mechanical,
electrical or plumbing systems, Sublandlord may not unreasonably withhold nor
unreasonably delay any such consent. If Overlandlord or Sublandlord shall incur
any increase in their insurance premiums relating to the Sublet Space, the
Premises or any other portion of the Building by reason of any Alterations,
Subtenant shall pay the amount of such increase to Sublandlord.
8. A. Subtenant shall indemnify and hold harmless Sublandlord and its
partners, joint venturers, directors, officers, invitees, agents, servants and
employees (each a "Sublandlord Indemnitee" for purposes of this provision), from
and against any loss, damage, liability, cost, claim or expense (including
reasonable attorneys' fees) arising from or in connection with (a) any act,
omission or negligence of Subtenant or its respective partners, joint venturers,
directors, officers, invitees, agents, servants and employees, arising from or
in connection with the Sublease or the Sublet Space, (b) any accident, injury or
damage whatsoever occurring in or about the Sublet Space, (c) the use or
occupation of the Sublet Space by Subtenant or anyone claiming under or through
Subtenant or (d) any breach of this Sublease or the Overlease by Subtenant. This
provision shall not apply to, be construed to exculpate a Sublandlord
Indemnitee, or to make Subtenant responsible for, any loss, damage, liability,
cost, claim or expense resulting from or caused by the intentional acts or
negligence of Sublandlord or any such Sublandlord Indemnitee to the extent
caused by such intentional acts or negligence.
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B. Sublandlord covenants and agrees to use best efforts to faithfully
observe and perform all terms, covenants or conditions on Sublandlord's part to
be observed or performed under any other lease it or any affiliate of it may
have with respect to space in the Building and to use all reasonable efforts to
keep the Overlease in full force and effect throughout the term of this
Sublease.
9. A. This Sublease is subject and subordinate to, and Subtenant accepts
this Sublease subject and subordinate to, all of the terms, covenants,
provisions, conditions and agreements contained in the Overlease and the matters
to which the Overlease is or shall be subject and subordinate and in the event
of termination, re-entry or dispossession by Overlandlord under the Overlease,
Overlandlord may, at its option, take over all of the right, title and interest
of Sublandlord under this Sublease, and Subtenant shall, at Overlandlord's
option, attorn to Overlandlord, except that Overlandlord shall not (i) be liable
for any previous act or omission of Sublandlord under this Sublease, (ii) be
subject to any counterclaim, offset or defense which theretofore accrued to
Subtenant against Sublandlord, or (iii) be bound by any previous modification of
this Sublease not consented to by Overlandlord or by any previous prepayment of
more than one (1) month's rent. Sublandlord agrees to request the Overlandlord
to deliver a Non-Disturbance Subordination and Attornment Agreement to
Subtenant. Sublandlord shall use reasonable efforts to obtain such Agreement
from the Overlandlord; provided, however, that the failure of Sublandlord to
obtain any such Agreement shall not alter the obligations of Subtenant hereunder
including the Subordination of the Sublease and the attornment to the
Overlandlord. This Sublease is also subject to, and Subtenant accepts this
Sublease subject to, any amendments to the Overlease hereafter made between the
Overlandlord and Sublandlord, provided that same shall not materially increase
the obligations, or materially or adversely affect the rights of Subtenant.
Subtenant acknowledges that Sublandlord cannot convey to Subtenant any greater
estate than Sublandlord has been granted pursuant to the Overlease.
B. The provisions of the Overlease are incorporated herein by
reference with the same force and effect as if they were fully set forth herein,
except as otherwise specifically provided herein and except that:
(i) Any reference in the Overlease to (a) "Landlord" shall mean the
Sublandlord, to "Tenant" shall mean the Subtenant and to "party(ies)" shall mean
the Sublandlord and/or Subtenant (as the case may be); (b) the "Lease" shall
mean this Sublease; (c) the "demised premises" or the "premises" shall mean the
Sublet Space;
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(d) "Term" shall mean the Term herein specified; (e) "rent" shall mean Rent and
Additional Rent, respectively; (f) the "Commencement Date" and the "Expiration
Date" and "Rent Commencement Date" shall mean the Commencement Date, Expiration
Date and Rent Commencement Date specified herein, respectively; and (g) any
rights granted to the tenant under the Overlease that are greater than the
rights granted to Subtenant hereunder shall be restricted to the rights granted
hereunder.
(ii) Article 1 is modified by deleting the definition of Landlord's Initial
Construction in Article 1.B.(iv) and substituting for the Rent Commencement Date
Base Tax Year and Base Expense Year specified in Articles 1.B(u) 1.B.(vii) and
1.B.(ix), the applicable Rent Commencement Date specified in Section 5.A above
and the Base Tax Year and Base Expense Year specified in Section 5.C above.
(iii) Article 3 is modified by making all references to Landlord refer to
Overlandlord.
(iv) Article 6 is modified by making all references to Landlord refer to
Overlandlord and Sublandlord except for the final sentence thereof which shall
be deemed to refer to Overlandlord or Sublandlord.
(v) Article 7.C is not incorporated into this Sublease; provided, however,
that Sublandlord shall, for the benefit of Subtenant, enforce any rights it may
have under any "non-disturbance agreements" affecting the Premises.
(vi) Article 8 is modified by making all references to Landlord refer to
Overlandlord or Sublandlord.
(vii) Article 9.A is modified by making all references to Landlord refer to
Overlandlord or Sublandlord.
(viii) Articles 10, 11 and 12 are not incorporated into this Sublease.
(ix) The reference to Landlord's Initial Construction are deleted from
Section 13 insofar as it is incorporated into this Sublease.
(x) Subject to Paragraph D of this Article IX, Article 14 is modified by
making all references to Landlord refer to Overlandlord or Sublandlord.
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(xi) The last sentence of Article 15 and all of Article 16 are not
incorporated into this Sublease.
(xii) Article 17 is modified by deleting 17.A(3) in its entirety and by
changing all references from sixty (60) days to forty-five (45) days; from
fifteen (15) days to ten (10) days; from ten (10) days to five (5) days; and
from five (5) days to three (3) days.
(xiii) The phrase "except as may be permitted under Article 12 hereof"
appearing in 17.(A)(5) is deleted and replaced with this phrase" in
contravention of the terms hereof".
(xiv) For purposes of calculating amounts of rent received under
18.(B)(1)(b), the fair market value of the benefit to Sublandlord for the use
and occupancy of the Sublet Space shall be imputed to Sublandlord if Sublandlord
uses and occupies the Sublet Space.
(xv) The references in Articles 19.A and 19.B to ten (10) days are changed
to five (5) days.
(xvi) Article 22 is not incorporated into this Sublease.
(xvii) Sublandlord acknowledges that Overlandlord, and not Sublandlord,
shall have the right to promulgate rules and regulations under Article 24.
(xviii) Article 26 is modified by making all references to Landlord refer
to Overlandlord or Sublandlord.
(xix) Article 27 is not incorporated into this Sublease.
(xx) Article 28.D.(2) is modified by changing the reference from thirty
(30) days to fifteen (15) days.
(xxi) Article 29 is modified; (1) to provide that all of the services
therein described are to be provided by Overlandlord; (2) to omit the first
sentence of Article 29.H.(2); (3) if Subtenant requires any of the additional
feeders or risers or other equipment described in the second sentence of Article
29.H.(2), Sublandlord will, upon Subtenant's written request and at Subtenant's
will, upon Subtenant's written request and at Subtenant's sole cost and expense,
exercise whatever rights it may have in the Overlease to obtain such additional
feeders or riders or other equipment from Overlandlord; (4) the reference in the
fourth sentence of Article 29.H.(2) to Landlord shall be deemed to refer to
Overlandlord; (5) the first two sentences of Article 29.H.(3) are not
incorporated into this Sublease; (6) the reference in the
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first sentence of Article 29.H.(4) to thirty (30) days is modified to refer to
twenty (20) days and the last sentence of said provision is not incorporated
into this Sublease; (7) Article 29.H.(6) is not incorporated into this Sublease
and (8) Article 29.I is modified by making all references to Landlord refer to
Overlandlord or Sublandlord and by changing the reference therein from thirty
(30) days to twenty (20) days. Notwithstanding the foregoing, Sublandlord shall
not cause to cease to provide (or permit to be provided) any of the services
described in Article 29 unless Overlandlord shall have exercised any rights it
may have to do so under the Overlease.
(xxii) Articles 32 and 36 are not incorporated into this Sublease.
(xxiii) Article 37 is modified by making all references to Landlord refer
to Overlandlord or Sublandlord.
(xxiv) Article 41 and 42 and Schedule B are not incorporated into this
Sublease.
(xxv) The Rules and Regulations in Schedule A are modified by making all
references to Landlord refer to Overlandlord.
C. To the extent that the Overlease may conflict or be inconsistent
with the provisions of this Sublease, whether or not such inconsistency is
expressly noted herein, the provisions of the Overlease shall prevail (but only
if and to the extent such provisions of the Overlease are made applicable, by
the terms of the Overlease, to Subtenant or the Premises). Nothing herein
contained shall be deemed or construed to modify, waive, impair or affect any of
the provisions, covenants, agreements, terms or conditions contained in the
Overlease, or to waive any breach thereof, or any right of Overlandlord against
Sublandlord, or to enlarge or increase Overlandlord's obligations under the
Overlease. To the extent any rights granted to the tenant under the Overlease
are greater than any rights granted to Subtenant hereunder, such rights shall be
restricted to the rights granted hereunder.
D. In any case where "Overlandlord" reserves the right to enter the
Premises such right shall inure to the benefit of Overlandlord as well as to
Sublandlord; provided, however, that insofar as Sublandlord's rights are
concerned Sublandlord agrees to enter the Premises only during normal business
hours and upon reasonable notice to Subtenant prior to such entry.
E. It is understood and agreed that the obligations, work, repairs and
services (collectively, "Services") to be
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performed and furnished by Overlandlord pursuant to any provision of the
Overlease, including, without limitation Articles 4, 10, 11 and 29, will in fact
be performed and furnished by Overlandlord and not by Sublandlord and
Sublandlord's sole obligation with respect thereto shall be to use its
reasonable efforts to obtain the same from Overlandlord (at Subtenant's
expense). Subtenant at its option may, in its own name or in the name of
Sublandlord (if necessary), conduct such proceedings as may be reasonably
required to obtain from Overlandlord of the duties and obligations under or
pursuant to the Overlease, and Sublandlord shall reasonably cooperate with
Subtenant in connection therewith provided that Subtenant pays to Sublandlord
all costs and expenses (including reasonable attorneys' fees) reasonably
incurred by Sublandlord in connection therewith. In the event Overlandlord
discontinues furnishing electric energy to the Premises pursuant to Article
29.H. of the Overlease, this Sublease shall continue in full force and effect
and shall be unaffected except that Subtenant shall be responsible for obtaining
electric energy and otherwise performing the obligations of Tenant under said
Article 29.H.
F. In any case in which Subtenant must obtain the consent or approval
of Sublandlord under this Sublease, and Sublandlord must obtain the consent or
approval of Overlandlord under the Overlease, and Overlandlord shall fail to
refuse to consent to or approve the matter in question (within any applicable
period given for any such consent or approval), then Sublandlord's refusal or
failure to so consent or approve shall conclusively be deemed to be reasonable.
G. Subtenant covenants and agrees that Subtenant will not do anything
in or with respect to the Sublet Space or omit to do anything which Subtenant is
obligated to do under the terms of this Sublease which would constitute a
default under the Overlease or might cause the Overlease or the rights of
Sublandlord as tenant thereunder to be cancelled, terminated or forfeited or
might make Sublandlord liable for any damages, claims or penalties. Sublandlord
covenants and agrees that Sublandlord will not do anything in or with respect to
the Sublet Space or any other part of the Premises or omit to do anything which
Sublandlord is obligated to do under the terms of this Sublease or the overlease
which would constitute a default under the Overlease or might cause this
Sublease or the rights of Subtenant to be cancelled, terminated or forfeited or
might cause the Overlease or the rights of Sublandlord as tenant thereunder to
be cancelled, terminated or forfeited or might make Subtenant liable for any
damages, claims or penalties, except as otherwise provided herein in the event
of fire, casualty or condemnation.
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H. Subtenant hereby acknowledges and agrees that it shall observe
faithfully and comply strictly with (a) any and all rules and regulations with
respect to the Building or the Premises in accordance with the requirements of
the Overlease, including without limitation Article 8, as if Subtenant were the
tenant thereunder.
I. The parties acknowledge that the Sublet Space contains the personal
property (the "Subject Property"), with the exception of the conference room
furniture contained in the main conference room located in the Premises which is
owned by others and which Subtenant intends to purchase, which Subject Property
is owned, free and clear of liens and encumbrances, by Sublandlord. Sublandlord
shall leave the Subject Property at the Sublet Space for use by Subtenant free
and clear of any additional charge or expense, and Subtenant shall have the
right and authority to use the Subject Property. Subtenant shall maintain the
Subject Property in good repair with reasonable wear and tear excepted. After
the expiration of the fifth lease year, Subtenant shall have the right and
authority to sell or otherwise dispose of the Subject Property, in its sole
discretion, without the consent or approval of Sublandlord and without being
accountable to Sublandlord. Prior to the expiration of the fifth lease year,
Subtenant shall notify Sublandlord of its intention to sell or otherwise dispose
of the Subject Property and Sublandlord shall have ten (10) business days
following such notice to remove the Subject Property from the Premises. If after
the expiration of such ten (10) day period Sublandlord has not informed
Subtenant of its intention to remove the Subject Property, then Subtenant shall
have the right and authority to sell or otherwise dispose of the Subject
Property.
10. Sublandlord and Subtenant represent to each other that in the
negotiation of this Sublease they have dealt with no broker other than Cushman &
Wakefield, Inc. (which is representing Sublandlord) and V.J. Peters Assocites,
L.P. (which is representing Subtenant) (collectively, the "Brokers") and that no
conversations or negotiations were had with any broker except the Brokers
concerning the subletting of the Sublet Space. Sublandlord and Subtenant each
agrees to hold the other harmless against any claims for a brokerage commission
arising out of any conversations or negotiations had by either with any broker
other than the Brokers. Sublandlord shall be responsible for any commission
payable to the Brokers in connection with this Sublease pursuant to separate
agreements between Sublandlord and the Brokers.
11. A. Subtenant hereby agrees to comply with each and all of the
provisions of the Overlease respecting assignments and subletting and where the
prior written consent of Overlandlord is
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required, the same shall, as to Overlandlord, be granted or denied as provided
in the Overlease.
B. Provided that Subtenant has obtained Overlandlord's written consent
in accordance with the provisions of the Overlease, as between Sublandlord and
Subtenant. Subtenant shall have the right, without Sublandlord's consent, to
assign all or any part of its interests under this Sublease or sublet all or any
part of the space subleased hereunder to any of the following:
(i) any affiliate (an affiliate for purposes hereof being (a) any
partner, stockholder, officer, director or employee or Subtenant; (b) any
corporation, trust or other entity controlling, controlled by or under common
control with Subtenant or any such partner, stockholder, officer or director of
Subtenant; (c) any officer, director, trustee, partner or employee of any
corporation, partnership, trust or other entity controlling, controlled by or
under common control with Subtenant or any such partner, stockholder, director
or officer of Subtenant; and (d) any parent, spouse or descendant of the
foregoing who are natural persons, or any trust for the benefit thereof) or
(ii) any corporation or other entity (a) with whom Subtenant or
any such affiliate merges; (b) resulting from the consolidation of Subtenant or
any such affiliate and any other corporation(s) or entity(ies); or (C) which
acquires all or substantially all of the assets of Subtenant.
C. Except as provided in Subsection 11.B. above, Subtenant shall not,
directly or indirectly, without in each instance obtaining the prior written
consent of Overlandlord and Sublandlord, whose consents shall, as to
Overlandlord, be granted or denied as provided in the Overlease and, as to
Sublandlord, shall be granted or denied as provided in Subsection 11.G. below,
(x) assign or otherwise transfer this Sublease or the term and estate hereby
granted or (y) sublet all or part of the Sublet Space or allow the same to be
used or occupied by others. No consent by Sublandlord or Overlandlord to any
such assignment, transfer or sublease shall be deemed a consent to any further
assignment, transfer or sublease, and any such further assignment, transfer or
sublease shall be made in accordance with the preceding sentence.
D. Any proposed assignment, transfer or sublease by Subtenant (or any
permitted sub-subtenant) shall be made subject to and in accordance with (x) the
provisions of Article 12 of the Overlease and (y) the provisions of this Section
11.
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E. For purposes of this Section 11, (i) the transfer of (x) a majority
of the issued and outstanding capital stock of Subtenant or of any permitted
tenant by assignment or sublease, or (y) a majority of the total interests in
any partnership entity comprising Subtenant or in any permitted tenant by
assignment or sublease, or (z) the ability to control the management of
Subtenant or of any permitted tenant by assignment or sublease, however
accomplished, whether in a single transaction or in a series of related or
unrelated transactions, directly or indirectly, shall be deemed an assignment of
this Sublease, (ii) any agreement whereby any party agrees to perform or take
over the obligations of Subtenant hereunder whether or not embodied in a
sublease or assignment, shall be deemed a transfer of this Sublease, and (iii)
any person or legal representative of Subtenant, to whom Subtenant's interest
under this Sublease passes by operation of law, or otherwise, shall be bound by
the provisions of this Section 11. Subtenant agrees to furnish to Sublandlord
upon demand at any time and from time to time such information and assurances as
Sublandlord may reasonably request that neither Subtenant nor any assignee or
Subtenant of Subtenant has violated the provisions of this Section 11.
F. Any assignment or transfer shall not be effective unless and until
the assignee shall execute, acknowledge and deliver to Sublandlord an agreement,
in form and substance reasonably satisfactory to Sublandlord, whereby the
assignee shall (i) assume the obligations and performance of this Sublease and
agree to be personally bound by all of the covenants, agreements, terms,
provisions and conditions hereof on the part of Subtenant to be performed or
observed on and after the effective date of any such assignment and (ii) agree
that the provisions of this Section 11 shall, notwithstanding such assignment or
transfer, continue to be binding upon it in the future. Subtenant covenants
that, notwithstanding any assignment or transfer, whether or not in violation of
the provisions of this Sublease or the Overlease, and notwithstanding the
acceptance of rent by Sublandlord from an assignee or transferee or any other
party, Subtenant shall remain fully and primarily and jointly and severally
liable for the payment of all rent due under this Sublease and for the
performance and observance of all of the covenants, agreements, terms,
provisions and conditions of this Sublease on the part of Subtenant to be
performed or observed.
G. Notwithstanding the provisions of Subsection 11.C. above,
Sublandlord shall not unreasonably withhold its consent to a subletting of the
entire Sublet Space or to the space cross-hatched on Exhibit A attached hereto
to one person or entity provided Overlandlord has granted its consent to such
Subletting.
13
<PAGE>
12. A. If before or during the Term the Sublet Space shall be damaged by
fire or other casualty, the Rent and the Additional Rent payable pursuant to
paragraphs (i), (ii) and (iii) of Section 5(C) hereof shall be abated in
proportion to the number of square feet of the Sublet Space which are
untenantable and which Subtenant does not occupy for the conduct of its
business, but only to the extent to which Sublandlord's rental obligations under
the Overlease with respect thereto shall have been abated, from the date of such
fire or other casualty to the date the resulting damage shall have been repaired
or restored by Overlandlord pursuant to Article 10 of the Overlease. Subtenant
shall be entitled to have the Sublet Space repaired and restored by Overlandlord
pursuant to the Overlease (provided that Overlandlord elects to repair and
restore the Sublet Space), but in no event shall Sublandlord have any obligation
to repair or restore the Sublet Premises.
B. Nothing contained in this Sublease shall affect in any way the
right of Overlandlord to terminate the Overlease pursuant to Article 10 of the
Overlease, regardless of the extent of damage, or the lack thereof, to the
Sublet Space. In the event that the Overlease shall be terminated by
Overlandlord as a result of fire or other casualty or other cause, this Sublease
shall terminate at the same time. Sublandlord shall notify Subtenant of any such
termination of the Overlease promptly after same has been effected. Sublandlord
and Subtenant agree that in the event that Sublandlord is entitled to terminate
the Overlease pursuant to Article 10 thereof, then (1) Sublandlord may exercise
said right to terminate when Overlease without the prior consent of Subtenant
and (ii) Subtenant may terminate this Sublease by giving written notice to
Sublandlord five (5) business days earlier than Sublandlord is required by the
Overlease to give notice to Overlandlord to terminte the Overlease.
C. The provisions of this Section 12 shall be considered an "express
agreement to the contrary" for purposes of Section 227 of the Real Property Law
of the State of New York, providing for destruction of or injury to leased
premises in the absence of an express agreement, and said Section 227 and any
other law of like import, now or hereafter in force, shall have no application
to this Sublease.
13. A. In the event that the Overlease shall be terminated pursuant to
Article 11 of the Overlease as a result of a taking of the whole or any part of
the Premises for any public or quasi-public purpose by the exercise of the power
of eminent domain, this Sublease and the estate hereby granted shall terminate
as of the date of such taking, regardless of whether such taking shall affect
the Sublet Space, and any and all prepaid Rent and
14
<PAGE>
Additional Rent shall be refunded to Subtenant. If this Sublease is not so
terminated, then the Rent and the Additional Rent payable pursuant to paragraphs
(i), (ii) and (iii) of Section 5(C) hereof shall be abated in proportion to the
number of square feet of the Sublet Space so taken, effective as of the date of
taking. In the event of any taking, Subtenant shall not be entitled to any award
which may be made or paid in connection with such taking or any portion thereof
except as expressly provided in paragraph B below.
B. Nothing contained in this Article 13 shall prohibit Subtenant from
bringing a separate proceeding against the condemning authority for the value of
its trade fixtures installed in the Sublet Space at Subtenant's own cost and
expense or for Subtenant's moving and relocation expenses, provided that
Sublandlord's and Overlandlord's awards are not adversely affected thereby.
14. This Sublease contains all of the covenants, agreements, terms,
provisions, conditions and understandings relating to the leasing of the Sublet
Space and Sublandlord's obligations in connection therewith and neither
Sublandlord nor any agent or representative of Sublandlord has made or is
making, and Subtenant, in executing and delivering this Sublease, is not relying
upon, any warranties, representations, promises or statements whatsoever, except
to the extent expressly set forth in this Sublease. All understandings and
agreements, if any, heretofore had between the parties are merged in this
Sublease, which alone fully and completely expresses the agreement of the
parties.
15. The failure of Sublandlord to insist in any instance upon the strict
keeping, observance or performance of any covenant, agreement, term, provision
or condition of this Sublease shall not be construed as a waiver or
relinquishment by Sublandlord for the future of such covenant, agreement, term,
provision or condition, but the same shall continue and remain in full force and
effect. No waiver or modification of any covenant, agreement, term, provision or
condition of this Sublease shall be deemed to have been made unless expressed in
writing and signed by Sublandlord. No surrender of possession of the Sublet
Space or of any part thereof or of any remainder of the Term shall release
Subtenant from any of its obligations hereunder unless accepted by Sublandlord
in writing. Neither the payment by Subtenant of rent nor the receipt and
retention by Sublandlord of rent from anyone other than Subtenant shall be
deemed a waiver of the breach by such party of any covenant, agreement, term,
provision or condition herein contained, or the acceptance by Sublandlord of
such other person as a tenant, or a release of Subtenant from the further
keeping, observance or performance by Subtenant of the covenants, agreements,
terms, pro-
15
<PAGE>
visions and conditions herein contained. Neither the payment by Subtenant nor
the receipt and retention by Sublandlord of rent with knowledge of the breach of
any covenant, agreement, term, provision or condition herein contained shall be
deemed a waiver of such breach by such party.
16. All notices, demands, consents or requests which may or are required to
be given hereunder shall be in writing and shall be deemed properly given if
delivered personally or if sent by United States registered or certified mail,
postage prepaid, return receipt requested, addressed to the party for which
intended as follows (or at such other address in the United States as either
party shall hereafter designated by notice to the other, given as herein
provided):
If to Sublandlord:
Smith New Court Carl Marks, Inc.
61 Broadway
New York, New York 10016
Attn: Mr. John Dritz
If to Subtenant:
GKN HOLDINGS CORP.
500 Fifth Avenue
Suite 2822
New York, New York 10110
Attn: Mr. Roger N. Gladstone
with a copy to:
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004
Attn: Roger M. Roisman, Esq.
A notice shall be deemed to have been given, rendered or made on the day
when the same is received or, if delivery thereof cannot be made because of
change of address of which no notice was given as herein provided or refusal to
accept delivery, on the date of attempted delivery.
17. This Sublease may be executed in counterparts, each of which shall be
deemed an original, and all of which together
16
<PAGE>
shall constitute one and the same instrument.
18. If for any reason the term of the Overlease shall be terminated prior
to the Expiration Date, this Sublease shall thereupon be ipso facto terminated,
and the Sublandlord shall not be liable to Subtenant by reason thereof, unless
said termination shall have been effected because of the breach or default of
Sublandlord under the Overlease not the result of Subtenant's acts or omissions.
19. This Sublease shall not take effect unless Sublandlord and Subtenant
shall have received the Consent. If for any reason whatsoever such Consent is
not received within forty-five (45) days after the date hereof, either party may
upon ten (10) days' notice to the other terminate this Sublease and upon the
giving of such notice and the expiration of such ten (10) day period this
Sublease shall be deemed void and of no force and effect and, in such event, the
parties hereto shall be relieved and released from all further liability
hereunder. Notwithstanding the foregoing, in the event the Consent shall be
obtained prior to the expiration of the ten (10) day period referred to above,
then any cancellation notice shall be null and void and this Sublease shall
remain in full force and effect.
20. [Intentionally Deleted]
21. The covenants, conditions and agreements contained in this Sublease
shall bind and inure to the benefit of Sublandlord and Subtenant and their
respective heirs, distributees, executors, administrators, successors, and
assigns.
22. A. Subtenant has deposited with Sublandlord either (as Subtenant shall
elect) (i) a sum ("Cash Security") or (ii) a letter of credit (the "Letter of
Credit") in an amount equal to One Hundred Twelve Thousand Six Hundred
Ninety-Six and 50/100 Dollars ($112,696.50), as security (the "Security") for
the full and punctual performance by Subtenant of all of the terms of this
Sublease. In the event that Subtenant deposits Cash Security with Sublandlord,
subsection C below shall not apply. In the event that Subtenant shall have
deposited the Letter of Credit with Sublandlord, subsection B below shall not
apply.
B. (i) In the event Subtenant defaults after notice and lapse of any
applicable grace period in the performance of any of the terms of this Sublease,
Sublandlord may apply the whole or any part of the Cash Security and interest
thereon, if any, to the extent required for the payment of (i) any Rent and/or
Additional Rent or (ii) any sum which Sublandlord may expend or may be
17
<PAGE>
required to expend by reason of Subtenant's default including, without
limitation, any damages or deficiency in the re-letting of the Sublet Space,
whether accruing before or after summary proceedings or other re-entry by
Sublandlord. Upon each such application Subtenant shall, within five (5)
business days following demand, pay to Sublandlord the sum so applied which
shall be added to the Cash Security so that the same shall be restored to the
amount first set forth in subsection A above. If Subtenant shall fully and
punctually comply with all of the terms of this Sublease, the amount of the Cash
Security and interest thereon if any (less the portion thereof to which
Sublandlord is entitled as described in paragraph (ii) below), shall be returned
promptly to Subtenant after the termination of this Sublease, delivery of
exclusive possession of the Sublet Space to Sublandlord and the payment to
Sublandlord of all amounts payable hereunder.
(ii) Sublandlord shall, within five (5) business days from the
date hereof, deposit the Cash Security in a separate interest bearing account in
a bank located in the State of New York and a member of the New York
Clearinghouse Association and which is insured by the Federal Deposit Insurance
Corporation. Sublandlord shall annually pay over or credit to Subtenant all
interest earned on the Cash Security, except that to the extent not prohibited
by law, Sublandlord shall be entitled to receive and retain as an administrative
expense that portion of the interest received on such account which represents
the maximum fee permitted under applicable law, which fee Sublandlord shall have
the right to withdraw from time to time, as Sublandlord may determine, which fee
shall not exceed one (1%) percent per annum. Sublandlord shall not be required
to credit Subtenant with any interest for any period during which Sublandlord
does not receive interest on the Cash Security deposited. Sublandlord shall not
change the bank in which the Cash Security is deposited without having first
given Subtenant not less than ten (10) days notice. Any account in which the
Cash Security is deposited shall be identified as a rent security account for
Subtenant's benefit.
C. (i) The Letter of Credit shall be in form of Exhibit B attached
hereto, issued by a bank which is a member of the New York Clearinghouse
Association and payable to Sublandlord upon presentation solely of a sight draft
and written certification by an officer of Sublandlord to the issuer of the
Letter of Credit stating that Sublandlord is entitled to draw the amount set
forth in such draft by the terms of this Sublease. The Letter of Credit shall be
payable in multiple drafts and shall expire, or shall be renewed or replaced so
as to expire, no earlier than thirty (30) days following the date set forth in
the Sublease as the Expiration Date.
18
<PAGE>
(ii) In the event Subtenant defaults after notice and lapse of any
applicable grace period in the performance of any of the terms of this Sublease,
Sublandlord may draw upon the Letter of Credit, in whole or in part, to the
extent required for the payment of (x) any Rent and/or Additional Rent or (y)
any sum which Sublandlord may expend or may be required to expend by reason of
Subtenant's default including, without limitation, any damages or deficiency in
the re-letting of the Sublet Space, whether accruing before or after summary
proceedings or other re-entry by Sublandlord. In the case of any such drawing
upon the Letter of Credit, Subtenant shall deposit with Sublandlord a
supplemental or new letter of credit meeting the same requirements set forth in
paragraph (i) above such that the total of all letters of credit issued on
behalf of Subtenant and then held by Sublandlord pursuant to this Section 22
shall not be less than the amount first set forth in subsection A above.
(iii) (a) Notwithstanding anything in paragraph (i) above to the
contrary, Subtenant may deliver a Letter of Credit that expires prior to the
Expiration Date, provided that at least thirty (30) days prior to the expiration
of said Letter of Credit, Subtenant shall deliver to Sublandlord a supplemental
or new letter of credit meeting the same requirements set forth in said
paragraph (i). Without limiting the generality of Section 17 of the Overlease,
as incorporated herein, the failure of Subtenant to timely deliver a new or
supplemental letter of credit in accordance with the provisions of this
subsection C shall entitle Sublandlord to draw down the Letter of Credit then
held by Sublandlord without notice to Subtenant, and hold and apply such
proceedings on the same terms and conditions as the Letter of Credit.
(b) Upon delivery, any supplemental or new letter of credit shall
become the "Letter of Credit".
(c) Promptly after delivery of the supplemental or new Letter of
Credit pursuant to this subsection C, Sublandlord shall return the previous
Letter of Credit to Subtenant.
(iv) If, as of the Expiration Date or if the Consent is not obtained
as provided in Section 4 hereof, Sublandlord has not drawn upon the Letter of
Credit, the Letter of Credit and/or any supplemental Letters of Credit held by
Sublandlord shall be promptly returned to Subtenant.
D. In the event of a transfer or assignment of the Sublease by
Sublandlord, Sublandlord shall transfer the Security to the transferee.
19
<PAGE>
E. Subtenant shall not assign or encumber or attempt to assign or
encumber the Cash Security deposited herein as Security, or any interest thereon
to which Subtenant is entitled, which if assigned or encumbered shall be without
force or effect and neither Sublandlord nor its successors or assigns shall be
bound by any such assignment or encumbrance. In the event that any bankruptcy,
insolvency, reorganization or other debtor-creditor proceedings shall be
instituted by or against subtenant, its succesors or assigns, or any guarantor
of Subtenant hereunder, the Security shall be deemed to be applied to the
payment of any rent due Sublandlord for periods prior to the institution of such
proceedings and the balance, if any may be retained by Sublandlord in partial
satisfaction of Sublandlord's damages.
F. Provided that Subtenant has not defaulted in the performance of any
of the terms and conditions or provisions of this Sublease or such default has
not continued beyond the applicable grace period herein provided, Sublandlord
shall rebate to Subtenant the sum of Eighteen Thousand Seven Hundred Eighty-Two
and 75/100 Dollars ($18,782.75) on the eighteenth (18th) month anniversary date
of the Commencement Date and an additional Eighteen Thousand Seven Hundred
Eighty-Two and 75/100 Dollars ($18,782.75) on the twenty-fourth (24th) month
anniversary date of the Commencement Date.
23. Sublandlord covenants that so long as this Sublease shall be in full
force and effect, Subtenant shall peaceably and quietly have, hold and enjoy the
Sublet Space without hindrance, ejection or molestation by subject,
nevertheless, to the provisions of this Sublease and to the Overlease and to the
matters to which the Overlease is or shall be subject and subordinate.
24. When in this Sublease Overlandlord's or Sublandlord's consent or
approval is required and the Overlease or Sublease provides that Overlandlord's
or Sublandlord's consent or approval shall not be unreasonably withheld and
Overlandlord or Sublandlord shall refuse such consent or approval, or in any
instance in which Overlandlord or Sublandlord shall delay its consent or
approval, Subtenant in no event shall be entitled to make, not shall Subtenant
make, any claim, and Subtenant hereby waives any claim, for money damages (nor
shall Subtenant claim any money damages by way of set-off, counterclaim or
defense) based upon any claim or assertion by Subtenant that Overlandlord or
Sublandlord unreasonably withheld or unreasonably delayed its consent or
approval. Subtenant's sole remedy shall be an action or proceeding to enforce
any such provision, for specific performance, injunction or declaratory
judgment.
20
<PAGE>
IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this
Sublease as of the day and year first above written.
SMITH NEW COURT CARL MARKS INC.
By: /s/ [ILLEGIBLE]
---------------------
GKN HOLDINGS CORP.
By: /s/ [ILLEGIBLE]
---------------------
21
<PAGE>
EXHIBIT 1-A
[layout of 61 Broadway 12 fl sublease space]
<PAGE>
507-161
EXECUTION COPY
================================================================================
AGREEMENT OF LEASE
Between
NINETEEN NEW YORK PROPERTIES LIMITED PARTNERSHIP
Landlord,
AND
SMITH NEW COURT INC.
Tenant.
Premises:
Portion of the 12th Floor
61 Broadway
New York, New York
================================================================================
<PAGE>
TABLE OF CONTENTS
Caption
Page
----
Article 1 Demise, Premises, Term, Rent 1
Article 2 Use and Occupancy 2
Article 3 Alterations 3
Article 4 Repairs-Floor Load 4
Article 5 Window Cleaning 5
Article 6 Requirements of Law 5
Article 7 Subordination 5
Article 8 Rules and Regulations 6
Article 9 Insurance 7
A. Tenant's Insurance 7
B. Waiver of Subrogation 7
Article 10 Destruction of the Premises;
Property Loss or Damage 8
Article 11 Eminent Domain 9
Article 12 Assignment and Subletting 10
Article 13 Condition of the Premises 19
Article 14 Access to Premises 19
Article 15 Certificate of Occupancy 21
Article 16 Landlord's Liability 21
Article 17 Default 21
Article 18 Remedies and Damages 23
Article 19 Fees and Expenses 25
A. Curing Tenant's Defaults 25
B. Late Charges 25
Article 20 No Representations by Landlord 25
<PAGE>
Article 21 End of Term 25
Article 22 Quiet Enjoyment 26
Article 23 Failure to Give Possession 26
Article 24 No Waiver 26
Article 25 Waiver of Trial by Jury 27
Article 26 Inability to Perform 27
Article 27 Bills and Notices 28
Article 28 Escalation 28
Article 29 Services 33
A. Elevator 33
B. Heating 33
C. Cooling 33
D. After Hours Services 33
E. Cleaning 34
F. Sprinkler System 34
G. Water 34
H. Electricity Service 35
I. Interruption of Services 36
Article 30 Partnership Tenant 36
Article 31 Vault Space 37
Article 32 Security Deposit 37
Article 33 Captions 38
Article 34 Additional Definitions 38
Article 35 Parties Bound 38
Article 36 Broker 39
Article 37 Indemnity 39
<PAGE>
Article 38 Adjacent Excavation-Shoring 39
Article 39 Miscellaneous 39
A. No Offer 39
B. Signatories 39
C. Certificates 40
D. Directory Listings 40
Article 40 Intentionally Deleted 40
Article 41 Additional Premises 40
Article 42 Tenant's Right of First Offer 42
Schedule A Rules and Regulations A-1
Schedule B Landlord's Initial Construction B-1
Schedule C Work Letter C-1
Exhibit 1 Floor Plan of Premises
Exhibit 2 Floor Plan of Additional Premises
<PAGE>
INDEX OF DEFINED TERMS
TERM ARTICLE
Additional Premises 41
Additional Premises Commencement Date 41
Alterations 3
Assessed Valuation 28
Base Expense Year 1
Base Operating Expenses 28
Base Tax Year 1
Base Taxes 28
Broker 1
Building 1
Business Days 34
Commencement Date 1
Comparison Year 28
Deficiency 18
Events of Default 17
Expiration Date 1
Final Plans Schedule B
Governmental Entity 12
Interim Lease 41
Landlord Preface
Landlord's Initial Construction 1, Schedule B
Landlord's Notice 42
Landlord's Statement 28
Leaseback Space 12
Mortgages 7
<PAGE>
Office(s) 34
Operating Expenses 28
Overtime Periods 29
Parties 16
Partnership Tenant 30
Permitted Uses 1
Premises 1
Real Property 1
Reenter 34
Reentry 34
Related Corporation 12
Rent 1,34
Rent Commencement Date 1
Rules and Regulations 8
Security Deposit 1
Substantial Completion Date Schedule B
Superior Leases 7
Tax year 28
Taxes 28
Tenant Preface, 39
Tenant's Delay Schedule B
Tenant's Proportionate Share 1, 28
Tentative Monthly Expense Charge 28
Term 1
Work Letter Schedule B
<PAGE>
AGREEMENT OF LEASE, made as of this 15th day of January, 1986, between NINETEEN
NEW YORK PROPERTIES LIMITED PARTNERSHIP, having an office c/o First Winthrop
Corporation, 757 Third Avenue, New York, New York 10017 (hereinafter called
"Landlord") and SMITH NEW COURT INC., having an office at 1 Rockefeller Center,
New York, New York 10022 (hereinafter called "Tenant").
WITNESSETH:
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
1. DEMISE, PREMISES, TERM, RENT.
A. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord a
portion of the twelfth (12th) floor, as more particularly shown on Exhibit 1
annexed hereto and made a part hereof (hereinafter called the "Premises") in the
building known as 61 Broadway, in the Borough of Manhattan, County, City and
State of New York (said building is hereinafter called the "Building" and the
Building, together with the plot of land upon which it stands, is hereinafter
called the "Real Property") for a term (hereinafter called the "Term) to
commence on the Commencement Date (hereinafter defined) and to end on the
Expiration Date (hereinafter defined) both dates inclusive unless the Term shall
sooner end pursuant to any of the terms, covenants or conditions of this Lease
or pursuant to law at the Rent (hereinafter defined which Rent shall also
include any additional rent payable hereunder), which Rent 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, commencing on the Rent Commencement Date (hereinafter
defined) and on the first (1st) day of each calendar month thereafter during the
Term (except as hereinafter otherwise provided), at the office of Landlord or
such other place as Landlord may designate, without any set-off, offset,
abatement or deduction whatsoever, except that Tenant shall pay the first
monthly installment on the execution hereof. If the Rent Commencement Date shall
occur on a date other than the first (1st) day of any calendar month, Tenant
shall pay to Landlord, on the first (1st) day of the month next succeeding the
month during which the Rent Commencement Date shall occur, an amount equal to
such proportion of an equal monthly installment of Rent as the number of days
from and including the Rent Commencement Date bears to the total number of days
in said calendar month. Such payment, together with the sum paid by Tenant upon
the execution of this Lease, shall constitute payment of the Rent for the period
from the Rent Commencement Date to and including the last day of the next
succeeding calendar month.
B. The following definitions contained in this subsection B of this Article
1 shall have the meanings herein after set forth used throughout this Lease,
Exhibits, Schedules, and Riders (if any).
(i) "Commencement Date" shall mean the Substantial Completion Date
(hereinafter defined in Schedule B).
(ii) "Expiration Date" shall mean the date which is ten (10) calendar years
and two (2) calendar months from the last day of the month in which
the Commencement Date occurs.
<PAGE>
(iii) "Rent" shall mean Two Hundred Fifty Seven Thousand Five Hundred
Thirty One ($257,531.00) Dollars annually, payable in equal monthly
installments of Twenty One Thousand Four Hundred Sixty and 92/100
($21,460.92) Dollars.
(iv) "Landlord's Initial Construction" shall mean the work and
installations at the Premises as set forth in Schedule B. All of the
terms, covenants and conditions of Schedule B are incorporated in this
Lease by reference and shall be deemed a part of this Lease as though
more fully set forth in the body of this Lease.
(v) "Rent Commencement Date" shall mean the date which is two (2) months
next succeeding the Commencement Date.
(vi) "Permitted Uses" shall mean general and executive offices for a
general securities, stock brokerage and investment banking business
only.
(vii) "Base Tax Year" shall mean the Tax Year (as defined in Article 28
hereof) 1986/87.
(viii) "Tenant's Proportionate Share" shall mean one and seventy-four one-
hundredths of one percent (1.74%).
(ix) "Base Expense Year" shall mean the calendar year 1986.
(x) "Security Deposit" shall mean the sum of $42,921.83.
(xi) "Broker" shall mean Edward S. Gordon Company, Inc. and Wm. A.
White/Tishman East Inc.
Notwithstanding anything to the contrary contained in this subsection B of
this Article 1, Articles 1 through 42 shall control the rights and obligations
of the parties hereto except that the provisions of any Riders shall supersede
any inconsistent provisions in Articles 1 through 42, as the case may be.
2. USE AND OCCUPANCY
A. Tenant shall use and occupy the Premises for the Permitted Uses, and for
no other purpose.
B. Tenant hereby represents, warrants and agrees that Tenant's business is
not and shall not be photographic, multilith or multigraph reproductions or
offset printing. Anything contained herein to the contrary notwithstanding,
Tenant shall not use the Premises or any part thereof, or permit the Premises or
any part thereof to be used, (i) for the business of photographic, multilith or
multigraph reproductions or offset printing, (ii) for a commercial and/or retail
banking, trust company, depository, guarantee or safe deposit business, (iii) as
a savings bank, a savings and loan association, or as a loan company, (iv) for
the sale of travelers checks, money orders, drafts, foreign exchange or letters
of credit, (v) as a "retail" stock broker's or dealer's office which shall be
open to the general public (except pursuant to prior appointment), (vi) as a
restaurant or bar or for the sale of confectionery, soda, beverages, sandwiches,
ice cream or baked goods or for the preparation, dispensing or consumption of
food or beverages in any manner whatsoever (except to employees, customers and
guests of Tenant from any permitted kitchen facilities), (vii) as a news or
cigar stand, (viii) as an employment agency, labor union
<PAGE>
office, physician's or dentist's office, dance or music studio, school (except
for the training of employees of Tenant), (ix) as a barber shop or beauty salon,
or (x) for the direct sale, at retail or otherwise, of any goods or products.
Nothing in this subsection B shall preclude Tenant from using any part of the
Premises for photographic, photocopy, facsimile reproduction, multilith or
multigraph reproductions in connection with, either directly or indirectly, its
own business and/or activities.
3. ALTERATIONS. Tenant shall not make or perform or permit the making or
performance of, any alterations, installations, improvements, additions or other
physical changes in or about the Premises (hereinafter collectively called
"Alterations") without Landlord's prior consent. Landlord agrees not to withhold
unreasonably its consent to any Alterations which are nonstructural or which do
not adversely affect the Building's mechanical systems or services, proposed to
be made by Tenant to adapt the Premises for those business purposes permitted by
subsection A of Article 2 hereof, provided that such Alterations are performed
only by contractors or mechanics approved by Landlord, which approval Landlord
agrees not to unreasonably withhold or delay, do not adversely affect any part
of the Building other than the Premises, do not adversely affect any service
required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the Building and do not reduce the value or utility of the Building.
All Alterations shall be done at Tenant's expense and at such times and in such
manner as Landlord may from time to time reasonably designate pursuant to the
conditions for Alterations prescribed by Landlord for the Premises. All
furniture, furnishings and movable fixtures and partitions installed by Tenant
and all Alterations in and to the Premises which may be made by Tenant at its
own cost and expense prior to and during the Term, or any renewal thereof, shall
remain the property of Tenant and upon the Expiration Date or earlier end of the
Term or any renewal thereof, may be removed from the Premises by Tenant at
Tenant's option, provided, however, that Tenant shall repair and restore in a
good and workmanlike manner to Building standard original condition (reasonable
wear and tear excepted) any damage to the Premises or the Building caused by
such removal. Any of such fixtures or installations not so removed by Tenant at
or prior to the Expiration Date or earlier termination of the Term shall become
the property of Landlord, and shall remain upon and be surrendered with the
Premises as part thereof at the end of the Term. Prior to making any
Alterations, Tenant (i) shall submit to Landlord detailed plans and
specifications (including layout, architectural, mechanical and structural
drawings) for each proposed Alteration and shall not commence any such
Alteration without first obtaining Landlord's approval of such plans and
specifications, (ii) shall, at its expense, obtain all permits, approvals and
certificates required by any governmental or quasi-governmental bodies, and
(iii) shall furnish to Landlord duplicate original policies of worker's
compensation insurance (covering all persons to be employed by Tenant, and
Tenant's contractors and subcontractors in connection with such Alteration) and
comprehensive public liability (including property damage coverage) insurance in
such form, with such companies, for such periods and in such amounts as Landlord
may reasonably require, naming Landlord and its agents as additional insureds.
Upon completion of such Alteration, Tenant at Tenant's expense, shall obtain
certificates of final approval of such Alteration required by any governmental
or quasi-governmental bodies and shall furnish Landlord with copies thereof. All
Alterations shall be made and performed in accordance with the Rules and
Regulations (hereinafter defined); all materials and equipment to be
incorporated in the Premises as a result of all Alterations shall be new and
first quality; no such materials or equipment shall be subject to any lien,
encumbrance, chattel mortgage or title retention or security agreement. Any
mechanic's lien filed against the Premises, or the Real Property, for work
claimed to have been done for, or materials claimed to have been furnished to,
Tenant shall be discharged by Tenant within ten (10) days thereafter, at
Tenant's expense, by payment or filing the bond required by law. Tenant shall
not, at any
<PAGE>
time prior to or during the Term, directly or indirectly employ, or permit the
employment of, any contractor, mechanic or laborer in the Premises, whether in
connection with any Alteration or otherwise, if, in Landlord's sole discretion,
such employment will interfere or cause any conflict with other contractors,
mechanics, or laborers engaged in the construction, maintenance or operation of
the Building by Landlord, Tenant or others. In the event of any such
interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, mechanics or laborers causing such interference or conflict to
leave the Building immediately.
4. REPAIRS-FLOOR LOAD. Landlord shall maintain and repair the public portions of
the Building, both exterior and interior. Tenant shall, throughout the Term,
take good care of the 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 and damage for which Tenant is not responsible under the terms of
this Lease excepted. Landlord shall, at Tenant's expense, not to exceed
competitive rates, promptly after notice from Tenant make all replacements to
the lamps, tubes, ballasts and starters in the lighting fixtures installed in
the Premises. Notwithstanding the foregoing, all damage or injury to the
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 or
Alterations made by Tenant, Tenant's servants, employees, invitees or licensees,
shall be repaired promptly by Tenant, at its sole cost and expense, to the
reasonable satisfaction of Landlord. Tenant also shall repair all damage to the
Building and 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 and shall be made in accordance with the
provisions of Article 3 hereof. If Tenant fails after ten (10) days' notice to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by Landlord, at the expense of Tenant, and the reasonable
expenses thereof incurred by Landlord shall be collectible by Landlord as
additional rent after rendition of a bill or statement therefor. Tenant shall
give Landlord prompt notice of any defective condition in any plumbing,
electrical, air-cooling or heating system located in, servicing or passing
through the Premises. Tenant shall not place a load upon any floor of the
Premises exceeding 100 lbs. live load per square foot area. Landlord reserves
the right to prescribe the weight and position of all safes, business machines
and heavy equipment and installations. Business machines and mechanical
equipment 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. Except as provided in Article 10 hereof, there shall be no
allowance to 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 Premises, or in or to fixtures, appurtenances, or equipment thereof. If the
Premises be or become infested with vermin, Tenant, at Tenant's expense, shall
cause the same to be exterminated from time to time to the reasonable
satisfaction of Landlord and shall employ such exterminators and such
exterminating company or companies as shall be approved by Landlord. Landlord
shall at regular intervals exterminate the public areas of the Building so as to
keep them free of vermin. The water and wash closets and other plumbing fixtures
shall not be used for any purpose other than those for which they were designed
as constructed, and no sweepings, rubbish, rags, acids or other substances shall
be deposited therein.
<PAGE>
5. WINDOW CLEANING. Tenant shall not clean, nor require, permit, suffer or allow
any window in the Premises to be cleaned, from the outside in violation of
Section 202 of the 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.
6. REQUIREMENTS OF LAW. Tenant at its sole expense shall comply with all laws,
orders and regulations of federal, state, county and municipal authorities and
with any direction of any public officer or officers, pursuant to law, and all
rules, orders, regulations or requirements of the New York Board of Fire
Underwriters, or any other similar body which shall impose any violation, order
or duty upon Landlord or Tenant with respect to the Premises as a result of the
use or occupation thereof by Tenant for any purpose other than the Permitted
Uses or the conduct by Tenant of its business in the Premises in a manner
different from the ordinary and proper conduct of such business. Tenant shall
not do or permit to be done any act or thing upon the Premises which will
invalidate or be in conflict with any insurance policies covering the Building
and fixtures and property therein; and shall not do, or permit anything to be
done in or upon the Premises, or bring or keep anything therein, except as now
or hereafter permitted by the New York City Fire Department, New York Board of
Fire Underwriters, New York Fire Insurance Rating Organization or other
authority having jurisdiction and then only in such quantity and manner of
storage as not to increase the rate for the fire insurance applicable to the
Building, or use the Premises in a manner which shall increase the rate of fire
insurance on the Building or on property located therein, over that in similar
type buildings or in effect prior to this Lease. Any Alterations made or
performed by or on behalf of Tenant or any person claiming through or under
Tenant pursuant to this Article shall be made in conformity with, and subject to
the provisions of, Article 3 hereof. If by reason of failure of Tenant to comply
with the provisions of this Article, 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 part of all fire insurance premiums thereafter paid by Landlord which
shall have been charged because of such failure of use 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 are parties, a
schedule or "make up" of rates for the Building or the Premises issued by the
New York Fire Insurance Rating Organization, or other body fixing such fire
insurance rates, shall be conclusive evidence of the facts therein stated and of
the several items and charges in the fire insurance rates then applicable to the
Premises.
7. SUBORDINATION.
A. This Lease is subject and subordinate to each and every ground or
underlying lease of the Real Property or the Building heretofore or hereafter
made by Landlord (collectively the "Superior Leases") and to each and every
trust indenture and mortgage (collectively the "Mortgages") which may now or
hereafter affect the Real Property, the Building or any such Superior Lease and
the leasehold interest created thereby, and to all Building or any such Superior
Lease and the leasehold interest created thereby, and to all renewals,
extensions, supplements, amendments, modifications, consolidations, and
replacements thereof or thereto, substitutions therefor, and advances made
thereunder. This clause shall be self-operative and no further instrument or
subordination shall be required to make the interest of any lessor under a
Superior Lease, or trustee or mortgagee of a Mortgage superior to the interest
of Tenant hereunder. In confirmation of such subordination, however, Tenant
shall execute promptly any certificate that Landlord may request and Tenant
hereby irrevocably constitutes and appoints Landlord as Tenant's
attorney-in-fact to execute any such certificate or certificates for and on
behalf of
<PAGE>
Tenant. If the date of expiration of any Superior Lease shall be the same day as
the Expiration Date, the Term shall end and expire twelve (12) hours prior to
the expiration of the Superior Lease. Tenant covenants and agrees that, except
as expressly provided herein, Tenant shall not do anything that would constitute
a default under any Superior Lease or Mortgage, or omit to do anything that
Tenant is obligated to do under the terms of this Lease so as to cause Landlord
to be in default under any of the foregoing. If, in connection with the
financing of the Real Property, the Building or the interest of the lessee under
any Superior Lease, any lending institution shall request reasonable
modifications of this Lease that do not materially increase the obligations or
materially and adversely affect the rights of Tenant under this Lease, Tenant
covenants to make such modifications.
B. If at any time prior to the expiration of the Term, any Superior Lease
shall terminate or be terminated for any reason, Tenant agrees, at the election
and upon demand of any owner of the Real Property or the Building, or the lessor
under any such Superior Lease, or of any mortgagee in possession of the Real
Property or the Building, to attorn, from time to time, to any such owner,
lessor or mortgagee, upon the then executory terms and conditions of this Lease,
for the remainder of the term originally demised in this Lease, provided that
such owner, lessor or mortgagee, as the case may be, or receiver caused to be
appointed by any of the foregoing, shall not then be entitled to possession of
the Premises. The provisions of this subsection B shall inure to the benefit of
any such owner, lessor or mortgagee, shall apply notwithstanding that, as a
matter of law, this Lease may terminate upon the termination of any such
Superior Lease, and shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to said provisions. Tenant, however,
upon demand of any such owner, lessor or mortgagee, agrees to execute, from time
to time, instruments in confirmation of the foregoing provisions of this
subsection B, satisfactory to any such owner, lessor or mortgagee, acknowledging
such attornment and setting forth the terms and conditions of its tenancy.
Nothing contained in this subsection B shall be construed to impair any right
otherwise exercisable by any such owner, lessor or mortgagee.
C. Landlord agrees to request the Trustees of General Electric Pension
Trust to deliver a Non-Disturbance, Subordination and Attornment Agreement to
Tenant. Landlord shall use reasonable efforts to obtain such an Agreement from
such Trustees; provided, however, that the failure of Landlord to obtain any
such Agreement shall not affect the validity of this Lease or the obligations of
Tenant hereunder including the subordination of this Lease to the mortgage held
by such Trustees.
8. RULES AND REGULATIONS. Tenant and Tenant's servants, employees, agents,
visitors, and licensees shall observe faithfully, and comply strictly with, the
Rules and Regulations annexed hereto and made part hereof as Schedule A (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 on such
notice to be given 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 Chairman of
the Board of Directors of the Management Division of The Real Estate Board of
New York, Inc., or to such impartial person or persons as he may designate,
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 ten (10) days after receipt
by Tenant of written notice of the adoption of any such additional Rule or
Regulation. Nothing in this Lease contained shall be
<PAGE>
construed to impose upon Landlord any duty or obligation to enforce the Rules
and Regulations or terms, covenants or conditions in any other lease, 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.
9. INSURANCE.
A. Tenant's Insurance. Tenant shall obtain and keep in full force and
effect during the Term a policy of comprehensive general public liability and
property damage insurance with a broad form contractual liability endorsement
under which Tenant is named as the insured, and Landlord is named as an
additional insured, and, subject to Tenant's ability to obtain the same, under
which the insurer agrees to indemnify and hold Landlord harmless from and
against all cost, expense and/or liability arising out of or based upon any and
all claims, accidents, injuries and damages mentioned in Article 37 hereof
except clause (d) thereof. Tenant shall use its best efforts to obtain and keep
in full force and effect a broad form contractual liability endorsement under
which the insurer agrees to indemnify and hold Landlord harmless from and
against all cost, expense and/or liability arising out of or based upon any and
all claims, accidents, injuries and damages mentioned in Article 37 hereof
except clause (d) thereof. Notwithstanding anything contained in the preceding
sentence to the contrary, Tenant's failure to obtain or keep in full force and
effect such a broad form contractual liability endorsement shall not affect or
limit Tenant's obligations under Article 37 hereof including, without
limitation, Tenant's obligation to indemnify and save harmless Landlord from and
against all cost, expenses and/or liability arising out of or based upon any and
all claims, accidents, injuries and damages mentioned in Article 37 hereof. Such
policy shall contain a provision that no act or omission of Tenant shall affect
or limit the obligation of the insurance company to pay the amount of any loss
sustained and shall be non-cancellable with respect to Landlord without thirty
(30) days' written notice to Landlord by certified mail, return receipt
requested, which notice shall contain the policy number and the names of the
insured and certificate holder. A certificate thereof shall be delivered to
Landlord and shall have printed thereon clauses (a), (b) and (c) of Article 37
hereof. The minimum limits of liability shall be a combined single limit with
respect to each occurrence in an amount of not less than $1,000,000 for injury
(or death) and damage to property or such greater amount as Landlord may, from
time to time, require. All insurance required to be carried by Tenant pursuant
to the terms of this Lease shall be effected under valid and enforceable
policies issued by reputable and independent insurers permitted to do business
in the State of New York, and rated in Best's Insurance Guide, or any successor
thereto (or if there be none, an organization having a national reputation) as
having a general policyholder rating of "A" and a financial rating of at least
"13".
B. Waiver of Subrogation. The parties hereto shall procure an appropriate
clause in, or endorsement on, any fire or extended coverage insurance covering
the Premises and the Building, as well as personal property, fixtures and
equipment located thereon or therein, pursuant to which the insurance companies
waive Subrogation or consent to a waiver of right of recovery, and each party
hereby agrees that it will not make any claim against or seek to recover from
the other for any loss or damage to its property or the property of others
resulting from fire or other hazards covered by such fire and extended coverage
insurance. If the payment of an additional premium is required for the inclusion
of such waiver of subrogation provision, each party shall advise the other of
the amount of any such additional premiums and the other party shall pay the
same. It is expressly understood and agreed that Landlord will not carry
insurance on Tenant's fixtures, furnishings, equipment or other property or
effects or insurance against interruption of Tenant's business.
<PAGE>
10. DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE.
A. If the Premises shall be damaged by fire or other casualty, and if
Tenant shall give prompt notice thereof to Landlord, the damages shall, upon
completion of any insurance adjustment, and subject to force majeure be promptly
repaired by and at the expense of Landlord and the Rent until such repairs shall
be made shall be reduced in the proportion which the area of the part of the
Premises which is not usable by Tenant bears to the total area of the Premises,
provided that Tenant may occupy the undamaged area for the conduct of Business.
In the event the undamaged portion of the Premises is not adequate for the
conduct of Tenant's business as a whole, and provided Tenant does not occupy
such space; the Rent shall be fully abated until the entire Premises are
useable. Landlord shall have no obligation to repair any damage to, or to
replace, any fixtures, furniture, furnishings, equipment or other property or
effects of Tenant.
B. Anything in subsection A of this article 10 to the contrary
notwithstanding, if the Premises are totally damaged or are rendered wholly
untenantable, and if Landlord shall decide not to restore the Premises, or if
the Building shall be so damaged by fire or other casualty that, in Landlord's
opinion, substantial alteration, demolition, or reconstruction of the building
shall be required (whether or not the Premises shall have been damaged or
rendered untenantable), then in any of such events, Landlord, at Landlord's
option, may, as soon as a determination has been made, but in any event not
later than ninety (90) days following the damage, give Tenant a notice in
writing terminating this Lease. If Landlord elects to terminate this Lease, the
Term shall expire upon the tenth (10th) day after such notice is given, and
Tenant shall vacate the Premises and surrender the same to Landlord. If Tenant
shall not be in default under this Lease, then upon the termination of this
Lease under the conditions provided for in the next preceding sentence, Tenant's
liability for Rent shall cease as of the day following such damage. In the event
Landlord does not elect to terminate this Lease, Landlord shall arrange for the
prompt repair of the Premises in accordance with subsection A. hereof.
C. Landlord shall not be liable for reasonable delays which may arise by
reason of adjustment of fire insurance on the part of Landlord and/or Tenant,
and for reasonable delays on account of "labor troubles" or any other cause
beyond Landlord's control.
D. The parties agree that this Article 10 constitutes an express agreement
governing any case of damage or destruction of the Premises or the Building by
fire or other casualty, and that Section 227 of the Real Property Law of the
State of New York, which provides for such contingency in the absence of an
express agreement, and any other law of like import now or hereafter in force
shall have no application in any such case. Notwithstanding anything contained
in this Article 10 to the contrary, in the event that the repair of the Premises
in accordance with the provisions of either subsection A or subsection B hereof
shall not be commenced by Landlord within one hundred eighty (180) days
following the date of such fire or other casualty and shall not be diligently
prosecuted to substantial completion within two hundred seventy (270) days
following the date of such fire or other casualty, Tenant shall have the right,
in either event, provided Tenant is not responsible for such delay, to rescind
this Lease upon five (5) days' written notice to Landlord given on or before one
hundred ninety (190) or two hundred eighty (280) days following the date of such
fire or other casualty, respectively, in which event, the Term shall expire on
the tenth (10th) day after such notice is given, and Tenant shall vacate the
Premises and surrender the same to Landlord.
E. Any Building employee to whom any property shall be entrusted by or on
behalf of Tenant shall be deemed to be acting as Tenant's agent with respect to
such property and neither Landlord nor its agents shall be liable for any damage
to property of Tenant or of others entrusted to employees of the Building, nor
for the loss of or damage to any property of Tenant by theft or otherwise.
Neither Landlord nor its agents shall be
<PAGE>
liable for any injury or damage to persons or property or interruption of
Tenant's business resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow or leaks from any part of the Building or from
the pipes, appliances or plumbing works or from the roof, street or subsurface
or from any other place or by dampness or by any other cause of whatsoever
nature; nor shall Landlord or its agents be liable for any such damage caused by
other tenants or persons in the Building or caused by construction of any
private, public or quasi-public work; nor shall Landlord be liable for any
latent defect in the Premises or in the Building. Anything in this Article 10 to
the contrary notwithstanding, nothing in this Lease shall be construed to
relieve Landlord from responsibility directly to Tenant for any loss of damage
caused directly to Tenant wholly or in part by the negligence or misconduct of
Landlord. Nothing in the foregoing sentence shall affect any right of Landlord
to the indemnity from Tenant to which Landlord may be entitled under Article 37
hereof in order to recoup for payments made to compensate for losses of third
parties. If at any time any windows of the Premises are temporarily closed,
darkened or bricked-up for any reason whatsoever including, but not limited to,
Landlord's own acts, or any of such windows are permanently closed, darkened or
bricked-up if required by law or related to any construction upon property
adjacent to the Real Property by Landlord or others, Landlord shall not be
liable for any damage Tenant may sustain thereby and Tenant shall not be
entitled to any compensation therefor nor abatement of Rent nor shall the same
release Tenant from its obligations hereunder nor constitute an eviction.
Notwithstanding the foregoing in the event more than twenty-five percent (25%)
of the windows in the Premises are permanently closed, darkened or bricked up,
the Rent payable by Tenant hereunder shall be equitably adjusted. In addition,
if fifty-one percent (51%) or more of the windows in the Premises are
permanently closed or bricked up or are in the process of being permanently
closed or bricked up, Tenant shall have the right to cancel this Lease upon five
(5) days' written notice to Landlord given on or before thrity (30) days
following the date that such windows are premanently bricked-up, in which event,
the Term shall expire on the date specified in such notice, which date shall not
be more than ninety (90) days from the date of such notice and Tenant shall
vacate the Premises and surrender the same to Landlord on such date. Tenant
shall reimburse and compensate Landlord as additional rent within five (5) days
after rendition of a statement for all expenditures made by, or damages or fines
sustained or incurred by, Landlord due to non-performance or non-compliance with
or breach or failure to observe any term, covenant or condition of this Lease
upon Tenant's part to be kept, observed, performed or complied with. Tenant
shall give immediate notice to Landlord in case of fire or accident in the
Premises or in the Building. Tenant shall not move any safe, heavy machinery,
heavy equipment, freight, bulky matter or fixtures into or out of the building
without Landlord's prior consent, which consent shall not be unreasonably
withheld, and payment to Landlord of Landlord's costs in connection therewith.
If such safe, machinery, equipment, freight, bulky matter or fixtures requires
special handling, Tenant agrees to employ only persons holding a Master Rigger's
License to do said work, and that 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. Notwithstanding said consent of Landlord, Tenant shall indemnify
Landlord for, and hold Landlord harmless and free from, damages sustained by
persons or property and for any damages or monies paid out by Landlord in
settlement of any claims or judgments, as well as for all expenses and
attorneys' fees incurred in connection therewith and all costs incurred in
repairing any damage to the Building or appurtenances.
11. EMINENT DOMAIN
A. If the whole of the Real Property, the Building or the Premises shall be
acquired or condemned for any public or quasi-public use or purpose, this Lease
and the Term shall end as of the date of the vesting of title with the same
effect as if said date
<PAGE>
were the Expiration Date. If only a part of the Real Property shall be so
acquired or condemned then, (a) except as hereinafter provided in this
subsection A, this Lease and the Term shall continue in force and effect but, if
a part of the Premises is included in the part of the Real Property so acquired
or condemned, from and after the date of the vesting of title, the Rent shall be
reduced in the proportion which the area of the part of the Premises so acquired
or condemned bears to the total area of the Premises immediately prior to such
acquisition or condemnation; (b) if the Premises shall be affected thereby,
Landlord, at Landlord's option, may give to Tenant, within sixty (60) days next
following the date upon which Landlord shall have received notice of vesting of
title, a five (5) days' notice of termination of this Lease; and (c) if the part
of the Real Property so acquired or condemned shall contain more than thirty
percent (30%) of the total area of the Premises immediately prior to such
acquisition or condemnation, or if, by reason of such acquisition or
condemnation, Tenant no longer has reasonable means of access to the Premises or
the total area of the Premises after such acquisition or condemnation is no
longer suitable for the conduct of Tenant's business as a whole, Tenant, at
Tenant's option, may give to Landlord, within sixty (60) days next following the
date upon which Tenant shall have received notice of vesting of title, a five
(5) days' notice of termination of this Lease. If any such five (5) days' notice
of termination is given by Landlord or Tenant this Lease and the Term shall come
to an end and expire upon the expiration of said five (5) days with the same
effect as if the date of expiration of said five (5) days were the Expiration
Date. If a part of the Premises shall be so acquired or condemned and this Lease
and the Term shall not be terminated pursuant to the foregoing provisions of
this subsection A, Landlord, at Landlord's expense, shall restore that part of
the Premises not so acquired or condemned to a self-contained rental unit to
meet Tenant's requirements for the conduct of business therein. In the event of
any termination of this Lease and the Term pursuant to the provisions of this
subsection A, the Rent shall be apportioned as of the date of sooner termination
and any prepaid portion of Rent for any period after such date shall be refunded
by Landlord to Tenant.
B. In the event of any such acquisition or condemnation of all or any part
of the Real Property, Landlord shall be entitled to receive the entire award for
any such acquisition or condemnation, Tenant shall have no claim against
Landlord or the condemning authority for the value of any unexpired portion of
the Term and Tenant hereby expressly assigns to Landlord all of its right in and
to any such award. Nothing contained in this subsection B shall be deemed to
prevent Tenant from making a claim in any condemnation proceedings for the then
value of any furniture, furnishings and fixtures installed by and at the sole
expense of Tenant and included in such taking, provided that such award shall
not reduce the amount of the award otherwise payable to Landlord.
12. ASSIGNMENT AND SUBLETTING.
A. Tenant, for itself, its heirs, distributees, executors, administrators,
legal representatives, successors and assigns, expressly covenants that it shall
not assign, mortgage, pledge, encumber, or otherwise transfer this Lease, nor
underlet, nor suffer, nor permit the Premises or any part thereof to be used or
occupied by others (whether for desk space, mailing privileges or otherwise),
without the prior written consent of Landlord in each instance. If this Lease be
assigned, or if the 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, undertenant or occupant, and apply the net amount collected
to the rent herein reserved, but no assignment, underletting, occupancy or
collection shall be deemed a waiver of the provisions hereof, the acceptance of
the assignee, undertenant 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 and conditions by Landlord to an assignment or
underletting shall not in any way be construed to relieve Tenant from obtaining
the express consent in writing of Landlord to
<PAGE>
any further assignment or underletting. In no event shall any permitted
sublessee assign or encumber its sublease or further sublet all or any portion
of its sublet space, or otherwise suffer or permit the sublet space or any part
thereof to be used or occupied by others, without Landlord's prior written
consent in each instance. Any assignment, sublease, mortgage, pledge,
encumbrance or transfer in contravention of the provisions of this Article 12
shall be void.
B. If Tenant shall at any time or times during the Term desire to assign
this Lease or sublet all or part of the Premises, Tenant shall give notice
thereof to Landlord, which notice shall set forth (i) in the event of a
sublease, the term thereof and the portion(s) of the Premises which Tenant
desires to sublease, (ii) the effective or commencement date of the proposed
assignment or sublease which shall be not less than twenty (20) nor more than
one hundred and eighty (180) Business Days after the giving of such notice,
(iii) a statement setting forth in reasonable detail the identity of the
proposed assignee or subtenant, the nature of its business and its proposed use
of the Premises, (iv) the economic terms of the proposed transaction including,
without limitation, the rents, additional rents, additional charges and other
consideration payable under the proposed assignment or sublease including,
without limitation, the extent and nature of any rent and other concessions to
be given to the proposed assignee or subtenant, (v) utility charges and
escalations payable under the terms of the proposed assignment or sublease, (vi)
current financial information with respect to the proposed assignee or
subtenant, including, if available, its most recent financial report, and (vii)
an agreement by Tenant to indemnify Landlord against liability resulting from
any claims that may be made against Landlord by the proposed assignee or
subleasee or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease. The
aforesaid notice shall be deemed an offer from Tenant to Landlord whereby
Landlord may, at its option, (a) if the proposed transaction is a sublease of
all or substantially all of the Premises or, in the event the proposed
transaction is a sublease of a portion of the Premises, greater than one-third
(1/3) of the total number of rentable square feet then comprising the Premises
is subleased to and/or occupied by others (including the number of rentable
square feet then subleased and/or occupied in any prior transaction and the
number of rentable square feet to be subleased under the proposed transaction)
or, if the proposed term of such sublease shall extend beyond the commencement
of the eighth (8th) calendar year of the Term, sublease such space (hereinafter
called the "Leaseback Space") from Tenant upon the terms and conditions
hereinafter set forth, or (b) if the proposed transaction is an assignment or a
sublease of all or substantially all of the Premises, terminate this Lease. Said
options may be exercised, if at all, by Landlord by notice to Tenant given as
expeditiously as reasonably possible but, in all events, within twenty (20)
Business Days after the aforesaid notice and information has been given by
Tenant to Landlord; and during such twenty (20) Business Day period Tenant shall
not assign this Lease nor sublet such space. Notwithstanding anything contained
in the preceding sentence to the contrary, in the event that (a) the proposed
transaction is subject to Landlord's options as herein provided, and (b)
Tenant's notice to Landlord shall be accompanied by a fully-executed and true
and complete copy of the proposed assignment or sublease, the effective or
commencement date of which shall be not less than twenty (20) nor more than one
hundred eighty (180) Business Days after the giving of such notice, together
with the material specified in clauses (iii), (vi) and (vii) of this subsection
B, Landlord's options must be exercised, if at all, by Landlord by notice to
Tenant given as expeditiously as reasonably possible but, in all events, within
ten (10) Business Days after the aforesaid notice and information has been given
by Tenant to Landlord; and during such ten (10) Business Day Period Tenant shall
not assign this Lease nor sublet such space. In the event Landlord shall fail to
exercise such options within said ten (10) or twenty (20) Business Day Periods,
as the case may be, Landlord shall be deemed to have waived such options.
<PAGE>
C. If Landlord exercises its option to terminate this Lease in the case
where Tenant desires either to assign this Lease or sublet all or substantially
all of the Premises, then, this Lease shall end and expire on the date that such
assignment or sublet was to be effective or commence, as the case may be, and
the Rent and additional rent due hereunder shall be paid and apportioned to such
date.
D. If Landlord exercises its option to terminate this Lease pursuant to
subsection B of this Article 12, Landlord shall be free to and shall have no
liability to Tenant if Landlord should lease the Premises (or any part thereof)
to Tenant's prospective assignee or subtenant.
E. If Landlord exercises its option to sublet the Leaseback Space, such
sublease to Landlord shall be at the lower of (i) the rental rate per rentable
square foot of Rent and additional rent then payable pursuant to this Lease, or
(ii) the rentals set forth in the proposed sublease, and shall be for the same
term as that of the proposed subletting, and such sublease:
(a) shall be expressly subject to all of the covenants, agreements,
terms, provisions and conditions of this Lease except such as are irrelevant or
inapplicable, and except as otherwise expressly set forth to the contrary in
this Article 12;
(b) shall be upon the same terms and conditions as those contained in
the proposed sublease, except such as are irrelevant or inapplicable and except
as otherwise expressly set forth to the contrary in this Article 12;
(c) shall give Landlord the unqualified and unrestricted right,
without Tenant's permission, to assign such sublease or any interest therein
and/or to sublet the space covered by such sublease or any part or parts of such
space and to make any and all changes, alterations and improvements in the space
covered by such sublease, and if the proposed sublease will result in all or
substantially all of the Premises being sublet, grant Landlord the option to
extend the term of such sublease for the balance of the term of this Lease less
than one (1) day;
(d) shall provide that assignee or further subtenant of Landlord may,
at the election of Landlord, be permitted to make alterations, decorations and
installations in such space or any part thereof and shall also provide in
substance that any such alterations, decorations and installations in such space
therein made by any assignee or subtenant of Landlord may be removed, in whole
or in part, by such assignee or subtenant, at its option, prior to or upon the
expiration or other termination of such sublease provided that such assignee or
subtenant, at its expense, shall repair any damage and injury to such space so
sublet caused by such removal; provided, however, that such sublease shall
provide that either Landlord or its assignee or further subtenant shall, at
Tenant's election, restore such space to substantially the same condition as
existed prior to such sublease; and
(e) shall also provide that (i) Landlord and Tenant expressly engage
any intention that any estate created under such sublease be merged with any
other estate held by either of said parties, (ii) any assignment or subletting
by Landlord (as the subtenant) may be for any general and executive office
purpose or purposes that Landlord, in Landlord's uncontrolled discretion, shall
deem suitable or appropriate, (iii) Tenant, at Tenant's expense, shall and will
at all times provide and permit reasonably appropriate means of ingress to and
egress from such space so sublet by Tenant to Landlord; provided, however, that
Tenant shall not be required to permit such party access through the space
<PAGE>
then being occupied by Tenant or other assignees, subtenants or occupants
pursuant to subsection R hereof unless the same is the only practicable means of
ingress to and egress from the space so sublet, (iv) Landlord may make such
alterations as may be required or deemed necessary by Landlord to physically
separate the subleased space from the balance of the Premises and to comply with
any legal or insurance requirements relating to such separation, and (v) that at
the expiration of the term of such sublease, Tenant will accept the space
covered by such sublease in substantially the same condition as existed prior to
such sublease, ordinary wear and tear excepted and subject to the obligations of
the sublesee pursuant to the provisions of this Section E to make such repairs
thereto as may be necessary to preserve the premises demised by such sublease in
good order and condition.
F. (i) If Landlord exercises its option to sublet the Leaseback Space,
Landlord shall indemnify and save Tenant harmless from all obligations under
this Lease as to the Leaseback Space during the period of time it is so sublet
to Landlord. (ii) Performance by Landlord under a sublease of the Leaseback
Space shall be deemed performance by Tenant of any similar obligation under this
Lease and any default under any such sublease shall not give rise to a default
under a similar obligation contained in this Lease nor shall Tenant be liable
for any default under this Lease or deemed to be in default hereunder if such
default is occasioned by or arises from any act or omission of the tenant under
such sublease or is occasioned by or arises from any act or omission of any
occupant holding under or pursuant to any such sublease. (iii) Tenant shall have
no obligation, at the expiration or earlier termination of the Term, to remove
any alteration, installation or improvement made in the Leaseback Space by
Landlord.
G. In the event (i) Landlord does not exercise, or shall be deemed to have
waived, the options provided to it pursuant to subsection B of this Article 12
or (ii) such options do not arise by virtue of the fact that the proposed
transaction is a sublease of space within the Premises for a term which does not
extend beyond the commencement of the eighth (8th) calendar year of the Term and
which, together with space then subleased by Tenant to one or more subtenants
and/or occupied by one or more occupants pursuant to the provisions of
subsection R of this Article 12, is for one-third (1/3) or less of the total
number of rentable square feet then comprising the Premises and is for a Term
which does not extend beyond the commencement of the eighth (8th) calendar year
of the Term, and providing that Tenant is not in default of any of Tenant's
obligations under this Lease (after notice and the expiration of any applicable
grace period) as of the time of Tenant's notice to Landlord pursuant to
subsection B of this Article 12, Landlord's consent (which must be in writing
and form reasonably satisfactory to Landlord) to the proposed assignment or
sublease shall not be unreasonably withheld or delayed (and if not denied within
the number of days specified in subsection B of this Article 12, shall be deemed
granted), provided and upon condition that:
(i) Tenant shall have complied with the provisions of subsection B of
this Article 12 and Landlord shall not have exercised any of its options, if
any, under said subsection B of this Article 12 within the time permitted
therefor;
(ii) In Landlord's reasonable judgment the proposed assignee or
subtenant is engaged in a business or activity, and the Premises, or the
relevant part thereof, will be used in a manner, which (a) is in keeping with
the then standards of the Building, (b) is limited to the use of the Premises as
general and executive offices, and (c) will not violate any negative covenant as
to use contained in any other lease of office space in the Building;
<PAGE>
(iii) The proposed assignee or subtenant is a reputable person of good
character and with sufficient financial worth considering the financial
obligations involved, and Landlord has been furnished with reasonable proof
thereof;
(iv) Neither (a) the proposed assignee or sublessee nor (b) any person
which, directly or indirectly, controls, is controlled by, or is under common
control with, the proposed assignee or sublessee, is then an occupant of any
part of the Building;
(v) Intentionally omitted.
(vi) The form of the proposed sublease or instrument of assignment
shall be in form reasonably satisfactory to Landlord (exercising reasonable
discretion) and shall comply with the applicable provisions of this Article 12;
(vii) There shall not be more than three (3) subtenants (including
Landlord or its designee)of the Premises;
(viii) The rental and other terms and conditions of the sublease are
the same as those contained in the notice or proposed sublease, as the case may
be, furnished to Landlord pursuant to subsection B of this Article 12;
(ix) Tenant shall reimburse Landlord on demand for the reasonable
costs that may be incurred by Landlord in connection with said assignment or
sublease, including without limitation, the costs of making investigations as to
the acceptability of the proposed assignee or subtenant, and legal costs
incurred in connection with the granting of any requested consent;
(x) Tenant shall not have (a) advertised in any way the availability
of the 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 rate, (b) listed the Premises for subletting or
assignment, with a broker, agent or representative without prior notice to and
approval by Landlord, such approval not to be unreasonably withheld or delayed;
(xi) The proposed occupancy shall not increase the office cleaning
requirements or impose an extra burden upon services to be supplied by Landlord
to Tenant the cost of which is not paid to Landlord by Tenant; and
(xii) The proposed subtenant or assignee shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity and shall be subject
to the service of process in, and the jurisdiction of the courts of New York
State.
Except for any subletting by Tenant to Landlord pursuant to the
provisions of this Article 12, each subletting pursuant to this subsection G of
this Article 12 shall be subject to all of the covenants, agreements, terms,
provisions and conditions contained in this Lease. Notwithstanding any such
subletting to Landlord or any such subletting to any other subtenant and/or
acceptance of Rent or additional rent by Landlord from any subtenant, subject to
the provisions of subsection F of this Article 12 Tenant shall and will remain
fully liable for the payment of the Rent and additional rent due and to become
due hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this Lease on the part of Tenant to be
performed and all acts and omissions of any licensee or subtenant or anyone
claiming under or through any subtenant (other than Landlord or any assignee or
subtenant of Landlord) which shall be in violation of any of the obligations of
this Lease shall be deemed to be a violation by
<PAGE>
Tenant. Tenant further agrees that notwithstanding any such subletting, no other
and further subletting of the Premises by Tenant or any person claiming through
or under Tenant shall or will be made except upon compliance with and subject to
the provisions of this Article 12. If Landlord shall reasonably decline to give
its consent to any proposed assignment or sublease, or if Landlord shall
exercise either of its options under subsection B of this Article 12, Tenant
shall indemnify, defend and hold harmless Landlord against and from any and all
loss, liability, damages, costs, and expenses (including reasonable counsel
fees) resulting from any claims that may be made against Landlord by the
proposed assignee or sublessee or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease.
H. In the event that (i) Landlord fails to exercise either of its options
under subsection B of this Article 12 and consents to a proposed assignment or
sublease, and (ii) Tenant fails to execute and deliver the assignment or
sublease to which Landlord consented within ninety (90) days after the giving of
such consent, then, Tenant shall again comply with all of the provisions and
conditions of subsection B of this Article 12 before assigning this Lease or
subletting all or part of the Premises.
I. With respect to each and every sublease or subletting authorized by
Landlord under the provisions of this Lease, it is further agreed that:
(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 delivered, and no subtenant shall take
possession of the 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 dispossession by Landlord
under this Lease Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublessor, under such sublease, and such subtenant
shall, at 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 counterclaim, offset or defense, 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 made without Landlord's consent or by
any previous prepayment of more than one (1) month's Rent. The provisions of
this Article 12 shall be self-operative and no further instrument shall be
required to give effect to this provision.
J. If the Landlord shall give its consent to any assignment of this Lease
or to any sublease or if Tenant shall enter into any other assignment or
sublease permitted hereunder, 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 of Tenant's
fixtures, leasehold improvements, equipment, furniture, furnishings or other
personal property (to the extent paid for by Tenant and not reimbursed by
Landlord)), less, in the case of a sale thereof, the then fair market value
thereof as jointly determined by Landlord and Tenant and, in the event Landlord
and Tenant are unable to agree thereon, as determined by an independent
appraiser selected by the President of the Real Estate Board of New York, Inc.,
less all expenses reasonably and actually incurred by Tenant on account of
brokerage
<PAGE>
commissions, advertising costs and reasonable attorneys' fees and disbursements
in connection with such assignment;
(ii) in the case of a sublease, the term of which does not extend
beyond the commencement of the eighth (8th) calendar year of the Term, so long
as the total number of rentable square feet then subleased by Tenant to any one
or more subtenants and/or occupied by any one or more occupants pursuant to the
provisions of subsection R of this Article 12 is one-third (1/3) or less of the
total number of rentable square fee then comprising the Premises, fifty (50%)
percent of any rents, additional charges or other consideration payable under
the sublease to Tenant by the subtenant which is in excess of the 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 or rental of Tenant's fixtures, leasehold improvements, equipment,
furniture or other personal property (to the extent paid for by Tenant and not
reimbursed by Landlord), less, in the case of the sale thereof, the then fair
market value thereof as jointly determined by Landlord and Tenant and, in the
event Landlord and Tenant are unable to agree thereon, as determined by an
appraiser selected by the President of the Real Estate Board of New York, Inc.,
less all expenses reasonably and actually incurred by Tenant on account of
brokerage commissions, advertising costs and reasonable attorneys' fees and
disbursements and the reasonable cost of demising the premises so sublet in
connection with such sublease. The sums payable under this subsection J(ii) of
this Article 12 shall be paid to Landlord as and when received from the
subtenant by Tenant; and
(iii) in the case of a sublease the term of which extends beyond the
commencement of the eighth (8th) calendar year of the Term, and/or when the
total number of rentable square feet then subleased by Tenant to one or more
subtenants and/or occupied by any one or more occupants pursuant to the
provisions of subsection R of this Article 12 is greater than one-third (1/3) of
the total number of rentable feet then comprising the Premises, one hundred
(100%) percent of any rents, additional charges or other consideration payable
under the sublease to the Tenant by the subtenant which is in excess of the 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 or rental of Tenant's fixtures, leasehold improvements, equipment,
furniture or other personal property (to the extent paid for by Tenant and not
reimbursed by Landlord), less, in the case of a sale thereof, the then fair
market value thereof is jointly determined by Landlord and Tenant and, in the
event Landlord and Tenant are unable to agree thereon, as determined by an
independent appraiser selected by Landlord with the consent of Tenant (such
consent not to be unreasonably withheld or delayed), less all expenses
reasonably and actually incurred by Tenant on account of brokerage commissions,
advertising costs and reasonable attorneys' fees and disbursements and the
reasonable cost of demising the premises so sublet in connection with such
sublease. The sums payable under this subsection J(iii) of this Article 12 shall
be paid to Landlord as and when received from the subtenant by Tenant.
Tenant covenants that it shall use its best efforts to collect any
rents, additional rents or other consideration payable to Tenant with respect to
any assignment or subletting but the foregoing shall not require Tenant to
commence any action or proceeding if, to do so, would not be commercially
reasonable. In the event that Tenant shall commence any action or proceeding,
all costs and expenses thereof, including, without limitation, attorneys' fees
and disbursements, shall be paid by Tenant; provided, however, that if Landlord
requires Tenant to commence any action or proceeding when the same is not
commercially reasonable, the parties shall share the cost of such action or
<PAGE>
proceeding (including, without limitation, attorneys' fees and disbursements)
equally. Tenant covenants that it shall, upon demand of Landlord, commence
litigation against such subtenants, even if the same shall not be commercially
reasonable, in order to collect any rents, additional charges or other
consideration payable under the sublease to Tenant by the subtenant.
K. (i) If Tenant is a corporation other than a corporation whose stock
is listed and traded on a nationally recognized stock exchange (hereinafter
referred to as a "public corporation"), the provisions of subsection A of this
Article 12 shall apply to a transfer (by one or more transfers) of a majority of
the stock of Tenant as if such transfer of a majority of the stock of Tenant
were an assignment of this Lease; but said provisions shall not apply to
transactions with a corporation into or with which Tenant is merged or
consolidated or to which substantially all of Tenant's assets are transferred,
provided that in any of such events (a) the successor to Tenant has a net worth
computed in accordance with generally accepted accounting principles at least
equal to the greater of (1) the net worth of Tenant immediately prior to such
merger, consolidation or transfer, or (2) the net worth of Tenant herein named
on the date of this Lease and (b) proof reasonably satisfactory to Landlord of
such net worth shall have been delivered to Landlord at least ten (10) days
prior to the effective date of any such transaction.
(ii) If Tenant is a partnership, the provisions of subsection A of this
Article 12 shall apply to a transfer (by one or more transfers) of a majority
interest in the partnership, as if such transfer were an assignment of this
Lease.
(iii) If Tenant is a subdivision, authority, body, agency,
instrumentality or other entity created and/or controlled pursuant to the laws
of the State of New York or any city, town or village of such state or of
federal government ("Governmental Entity", the provisions of subsection A of
this Article 12 shall apply to a transfer (by one or more transfers) of any of
Tenant's rights and occupy the Premises, to any other Governmental Entity, as if
such transfer of the right of use and occupancy were an assignment of this
Lease; but said provisions shall not apply to a transfer of any of Tenant's
rights in and to the Premises to any Governmental Entity which shall replace or
succeed to substantially similar public functions, responsibilities, and areas
of authority as Tenant, provided that in any of such events the successor
Governmental Entity (a) shall utilize the Premises in a manner substantially
similar to Tenant, and (b) shall not utilize the Premises in any manner which,
in Landlord's judgment, would impair the reputation of the Building as a
first-class office building.
L. Tenant may, upon notice to Landlord, permit any corporations or
other business entities (but not including Governmental Entities) which control,
are controlled by, or are under common control with Tenant (herein referred to
as "related corporation") to sublet all or part of the Premises for any of the
purposes permitted to Tenant, subject however to compliance with Tenant's
obligations under this Lease. Such subletting shall not be subject to the
provisions of subsection B of this Article 12. Such subletting shall not be
deemed to vest in any such related corporation any right or interest in this
Lease or the Premises nor shall it relieve, release, impair or discharge any of
Tenant's obligations hereunder. For the purposes hereof, "control" shall be
deemed to mean ownership of not less than fifty percent (50%) of all of the
voting stock of such corporation or not less than fifty percent (50%) of all of
the legal and equitable interest in any other business entities.
M. Any assignment or transfer, whether made with Landlord's consent
pursuant to subsection A of this Article 12 or without Landlord's consent
pursuant to subsections K or L of this Article 12, shall be made only if, and
shall not be effective until, the assignee
<PAGE>
shall execute, acknowledge and deliver to Landlord an agreement in form and
substance satisfactory to Landlord whereby the assignee shall assume the
obligations of this Lease on the part of Tenant to be performed or observed and
whereby the assignee shall agree that the provisions in subsection A of this
Article 12 shall, notwithstanding such assignment or transfer, continue to be
binding upon it in respect of all future assignments and transfers. The original
named Tenant covenants that, notwithstanding any assignment or transfer, whether
or not in violation of the provisions of this Lease, and notwithstanding the
acceptance of Rent and/or additional rent by Landlord for an assignee,
transferee, or any other party, the original named Tenant shall remain fully
liable for the payment of the Rent and additional rent and for the other
obligations of this Lease on the part of Tenant to be performed or observed.
N. The joint and several liability of Tenant and any immediate or
remote successor in interest of Tenant and the due performance of the
obligations of this Lease on Tenant's part to be performed or observed shall not
be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time for performance, or modifying
any of the obligations, of this Lease, or by any waiver or failure of Landlord
to enforce any of the obligations of this Lease.
O. The listing of any name other than that of Tenant, whether on the
doors of the Premises or the Building directory, or otherwise, shall not operate
to vest any right or interest in this Lease or in the Premises, nor shall it be
deemed to be in the consent of Landlord to any assignment or transfer of this
Lease or to any sublease of the Premises or to the use or occupancy thereof by
others.
P. Intentionally Omitted.
Q. If the Landlord shall recover or come into possession of the
Premises before the date herein fixed for the termination of this Lease,
Landlord shall have the right, at its option, to take over any and all subleases
or sublettings of the Premises or any part thereof made by Tenant and to succeed
to all the rights of said subleases and sublettings or such of them as it may
elect to take over. Tenant hereby expressly assigns and transfers to Landlord
such of the subleases and sublettings as Landlord may elect to take over at the
time of such recovery of possession, such assignment and transfer not to be
effective until the termination of this Lease or re-entry by Landlord hereunder
or if Landlord shall otherwise succeed to Tenant's estate in the Premises, at
which time Tenant shall upon request of Landlord, execute, acknowledge and
deliver to Landlord such further instruments of assignment and transfer as may
be necessary to vest in Landlord the then existing subleases and sublettings.
Every subletting hereunder is subject to the condition and by its acceptance of
and entry into a sublease, each subtenant thereunder shall be deemed
conclusively to have thereby agreed from and after the termination of this Lease
or re-entry by Landlord hereunder of or if Landlord shall otherwise succeed to
Tenant's estate in the Premises, that such subtenant shall waive any right to
surrender possession or to terminate the sublease and, at Landlord's election,
such subtenant shall be bound to Landlord for the balance of the term of such
sublease and shall attorn to and recognize Landlord, as its landlord, under all
of the then executory terms of such sublease, except that Landlord shall not (i)
be liable for any previous act, omission or negligence of Tenant under such
sublease, (ii) be subject to any counterclaim, defense or offset not expressly
provided for in such sublease, which theretofore accrued to such subtenant
against Tenant, (iii) be bound by any previous modification or amendment of such
sublease not consented to by Landlord or by any previous prepayment of more than
one (1) month's rent and additional rent (excluding excess payments of
additional rent made on account of reasonably estimated increases in operating
expenses or other payments which are customarily paid more than one (1) month in
advance), which shall be payable as provided
<PAGE>
in the sublease, (iv) be obligated to repair the subleased space or the Building
or any part thereof, in the event of total or substantial total damage beyond
such repair as can reasonably be accomplished from the net proceeds of insurance
actually made available to Landlord, (v) be obligated to repair the subleased
space or the Building or any part thereof, in the event of partial condemnation
beyond such repair as can reasonably be accomplished from the net proceeds of
any award actually made available to Landlord as consequential damages allocable
to the part of the subleased space or the Building not taken or (vi) be
obligated to perform any work in the subleased space of the Building or to
prepare them for occupancy beyond Landlord's obligations under this Lease, and
the subtenant shall execute and deliver to Landlord any instruments Landlord may
reasonably request to evidence and confirm such attornment. Each subtenant or
licensee of Tenant shall be deemed automatically upon and as a condition of
occupying or using the Premises or any part thereof, to have given a waiver of
the type described in and to the extent and upon the conditions set forth in
this Article 12.
R. Notwithstanding anything to the contrary contained in this Article
12, Tenant named herein shall have the right to permit others to occupy desk and
office space in the Premises, provided that:
(i) Tenant is not in default of any of Tenant's obligations
under this Lease (after notice and the expiration of any applicable grace
period) and this Lease is in full force and effect;
(ii) At the time of such occupancy, no more than one-third
(1/3) of the total number of rentable square feet then comprising the Premises
shall be occupied by or subleased to parties other than Tenant named herein, and
this Lease has not been assigned by Tenant;
(iii) Notice of each such occupancy and a copy of the
occupancy agreement, if any, is delivered to Landlord within ten (10) days of
its execution;
(iv) Such occupancy agreement shall specifically state that it
is subject to the provisions of this Lease; and
(v) The area to be occupied shall not be separated from the
Premises by a demising wall nor shall there be a separate entrance to such
occupant's desk or office space from the common areas.
In the event Tenant shall enter into such occupancy agreements, the provisions
of subsection B and subsection J of this Article 12 shall not apply to any such
occupancy.
13. CONDITION OF THE PREMISES. Tenant agrees to accept possession of the
Premises in the condition which shall exist on the Commencement Date "as is",
except for Landlord's Initial Construction and further agrees that Landlord
shall have no other obligation, to perform any work or make any installations in
order to prepare the Premises for Tenant's occupancy. The taking of possession
of the Premises by Tenant shall be conclusive evidence as against Tenant that,
at the time such possession was so taken, the Premises and the building were in
good and satisfactory condition and that Landlord's Initial Construction was
substantially completed.
14. ACCESS TO PREMISES. Tenant shall permit Landlord, Landlord's agents and
public utilities servicing the Building to erect, use and maintain, concealed
ducts, pipes and conduits in and through the Premises. Landlord and Landlord's
agents shall be able
<PAGE>
to enter the Premises at all reasonable times and at reasonable intervals to
examine the same, to show them to prospective purchasers, mortgagees or lessees
of the Building or space therein, and to make such decorations, repairs,
alterations, additions as Landlord may deem necessary or desirable to the
Premises or to any other portion of the building or 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 or other requirements of government authorities and
Landlord shall be allowed to take all material into and upon the Premises that
may be required therefor without the same constituting an eviction or
constructive eviction of Tenant in whole or in part and the rent shall in no
wise abate while said decorations, repairs, alterations, improvements, or
additions are being made, by reason of loss or interruption of business of
Tenant, or otherwise. Landlord shall use its best efforts to minimize any
inconvenience to Tenant, without any requirement for the use of overtime labor.
During the six (6) month period prior to the Expiration Date or the expiration
of any renewal or extended term, Landlord may exhibit the Premises to
prospective tenants thereof. If, during the last six (6) months of the Term,
Tenant shall have removed all or substantially all of Tenant's property
therefrom, Landlord may immediately enter and alter, renovate and redecorate the
Premises, without elimination or abatement of rent, or incurring liability to
Tenant for any compensation, and such acts shall not be deemed an actual or
constructive eviction and shall have no effect upon this Lease. If Tenant shall
not be personally present to open and permit an entry into the Premises, at any
time, when for any reason any entry therein shall be necessary or permissible,
Landlord or Landlord's agents may enter the same by a master key, or may
forcibly enter the same, without rendering Landlord or such agents liable
therefor (if during such entry Landlord or Landlord's agents shall accord
reasonable care to Tenant's property), and without in any manner affecting the
obligations and covenants of this Lease. Nothing herein contained, however,
shall be deemed or construed to impose upon Landlord any obligation,
responsibility or liability whatsoever, for the care, supervision or repair of
the building or any part thereof, other than as herein provided. Landlord also
shall have the right at any time, without the same constituting an actual or
constructive eviction and without incurring any liability to Tenant therefor, to
change the arrangement and/or location of entrances or passageways, doors and
doorways, and corridors, elevators, stairs, toilets, or other public parts
of the Building and to change the name, number or designation by which the
Building is commonly known; provided, however, that Landlord shall not change
the arrangement and/or location of entrances or passageways, doors and doorways,
and corridors, elevators or other public parts of the Building located on the
12th floor of the Building unless such change shall be required in connection
with changes being performed in other portions of the Building. In addition,
Tenant understands and agrees that Landlord intends to perform substantial
renovation work in and to the public parts of the Building and the mechanical
systems serving the Building (which work may include the replacement of the
building exterior facade and window glass, requiring access to the same from
within the premises), and that Landlord shall incur no liability to Tenant, nor
shall Tenant be entitled to any abatement of rent, on account of any noise,
vibration or other disturbance to Tenant's business at the Premises (provided
that Tenant is not denied access to said Premises) which shall arise out of the
performance by Landlord of the aforesaid renovations of the building. Landlord
shall use its best efforts to minimize any inconvenience to Tenant, without any
requirement for the use of overtime labor. Tenant understands and agrees that
all parts (except surfaces facing the interior of the Premises) of all walls,
windows and doors bounding the Premises (including exterior Building walls, core
corridor walls, doors and entrances), all balconies, terraces and roofs adjacent
to the Premises, all space in or adjacent to the Premises used for shafts,
stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating, air
cooling, plumbing and other mechanical facilities, service closets and other
building facilities are not part of the Premises, and Landlord shall have the
use thereof, as well as access
<PAGE>
SCHEDULE A
RULES AND REGULATIONS
I. The rights of each tenant in the Building to the entrances,
corridors and elevators of the Building are limited to ingress to and egress
from such tenant's premises and no tenant shall use, or permit the use of the
entrances, corridors, or elevators for any other purpose. No tenant shall invite
to its premiss, or permit the visit of persons in such numbers or under such
conditions as to interfere with the use and enjoyment of any of the plazas,
entrances, corridors, elevators and other facilities of the Building by other
tenants. No tenant shall encumber or obstruct, or permit the encumbrances or
obstruction of any of the sidewalks, plazas, entrances, corridors, elevators,
fire exists or stairways of the Building. Landlord reserves the right to control
and operate the public portions of the Building, the public facilities, as well
as facilities furnished for the common use of the tenants, in such manner as
Landlord deems best for the benefit of the tenants generally.
II. Landlord may refuse admission to the Building outside of ordinary
business hours to any person not known to the watchman in charge or not having a
pass issued by Landlord or not properly identified, and may require all persons
admitted to or leaving the building outside of ordinary business hours to
register. Tenants' employees, agents and visitors shall be permitted to enter
and leave the Building whenever appropriate arrangements have been previously
made between Landlord and the Tenant with respect thereto. Each tenant shall be
responsible for all persons for whom it requests such permission and shall be
liable to Landlord for all acts of such persons. Any person whose presence in
the Building at any time shall, in the judgment of Landlord, be prejudicial to
the safety, character, reputation or interests of the Building or its tenants
may be denied access to the Building or may be ejected therefrom. In case of
invasion, riot, public excitement or other commotion Landlord may prevent all
access to the Building during the continuance of the same, by closing the doors
or otherwise, for the safety of the tenants and protection of property in the
Building. Landlord may require any person leaving the Building with any package
or other object to exhibit a pass from the tenant from whose premises the
package or object is being removed, but the establishment and enforcement of
such requirement shall not impose any responsibility on Landlord for the
protection of any tenant against the removal of property from the premises of
tenant. Landlord shall, in no way, be liable to any tenant for damages or loss
arising from the admission, exclusion or ejection of any person to or from a
tenant's premises or the Building under the provisions of this rule.
III. No tenant shall obtain or accept for use in its premises ice,
drinking water, towels, barbering, boot blacking, floor polishing, lighting
maintenance, cleaning or other similar services from any persons not authorized
by Landlord in writing to furnish such services. Such services shall be
furnished only at such hours, in such places within the tenant's premises and
under such regulation as may be fixed by Landlord.
IV. No window or other air-conditioning units shall be installed by any
tenant, and only such window coverings as are supplied or permitted by Landlord
shall be used in a tenant's premises.
V. There shall not be used in any space, nor in the public halls of the
Building, either by any tenant or by jobbers, or other in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.
<PAGE>
VI. All entrance doors in each tenant's premises shall be left locked
when the tenant's premises are not in use. Entrance doors shall not be left open
at any time. All windows in each tenant's premises shall be kept closed at all
times and all blinds therein above the ground floor shall be lowered when and as
reasonably required because of the position of the sun, during the operation of
the Building air-conditioning system to cool or ventilate the tenant's premises.
VII. No noise, including the playing of any musical instruments, radio
or television, which, in the judgment of Landlord, might disturb other tenants
in the Building, shall be made or permitted by any tenant. No dangerous,
inflammable, combustible or explosive object, material or fluid shall be brought
into the Building by any tenant or with the permission of any tenant.
VIII. All damages resulting from any misuse of the plumbing fixtures
shall be borne by the tenant who, or whose servants, employees, agents, visitors
or licensees, shall have caused the same.
IX. No signs, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any tenant on any part of the
outside of the premises or the Building without the prior written consent of
Landlord, which consent Landlord shall not unreasonably withhold. Signs and
lettering on doors shall be inscribed, painted, or affixed for each tenant by
Landlord at the expense of such tenant, and shall be of a size and color
reasonably acceptable to Landlord. Landlord may remove same without any
liability and may charge the expense incurred by such removal to the tenant or
tenants violating this rule. No tenant shall use any advertising which impairs
the reputation of the building.
X. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows in any tenant's premises and no lock on any door therein
shall be changed or altered in any respect unless Landlord has a means of
emergency access. Duplicate keys for a tenant's premises and toilet rooms shall
be procured only from Landlord, which may make a reasonable charge therefore.
Upon the termination of a tenant's lease, all keys of the tenant's premises and
toilet rooms shall be delivered to Landlord.
XI. Each tenant, shall, at its expense, provide artificial light in the
premises for Landlord's agents, contractors and employees while performing
janitorial or other cleaning services and making repairs or alterations in said
premises.
XII. No tenant shall install or permit to be installed any vending
machines, except for the sole use of Tenant's employees.
XIII. No animals or birds, bicycles, mopeds or vehicles of any kind
shall be kept in or about the Building or permitted therein.
XIV. No furniture, office equipment, packages or merchandise will be
received in the Building or carried up or down in the elevator, except between
such hours as shall be designated by Landlord. Landlord shall prescribe the
charge for freight elevator use and the method and manner in which any
merchandise, heavy furniture, equipment or safes shall be brought in or taken
out of the Building, and also the hours at which such moving shall be done.
XV. All electrical fixtures hung in offices or spaces along the
perimeter of any tenant's Premises must be fluorescent, of a quality, type,
design and bulb color approved by Landlord unless the prior consent of Landlord
has been obtained for other lamping.
<PAGE>
EXHIBIT 2
[BLUEPRINT OF PREMISES]
Not to scale.
All dimensions approximate.
<PAGE>
XVI. The exterior windows and doors that reflect or admit light and air
into any premises or the halls, passageways or other public places in the
building, shall not be covered or obstructed by any tenant, nor shall any
articles be placed on the windowsills.
XVII. Canvassing, soliciting and peddling in the Building is prohibited
and each tenant shall cooperate to prevent same.
XVIII. Except to the extent contemplated by the approved installation
of a Dwyer Unit or kitchenette (which kitchenette facilities may utilize hot
plate (as opposed to gas) burners), no tenant shall do any cooking, conduct any
restaurant, luncheonette or cafeteria for the sale or service of food or
beverages to its employees or to others. In addition, no tenant shall cause or
permit any odors of cooking or other processes or any unusual or objectionable
odors to emanate from the premises. The foregoing shall not preclude tenant from
having food or beverages delivered to the premises, provided that no cooking or
food preparation shall be carried out at the premises.
<PAGE>
SCHEDULE B
LANDLORD'S INITIAL CONSTRUCTION
I. Plans and Work.
Tenant shall submit to Landlord complete and detailed architectural,
mechanical and engineering plans and specifications showing the alterations
required by Tenant to the Premises in order to prepare the entire Premises for
Tenant's occupancy, which plans and specifications shall be prepared by Tenant
at Tenant's own cost and expense. Tenant's plans and specifications shall be
prepared in accordance with, and Landlord's responsibility shall be limited to,
the specifications set forth in the work letter (the "Work Letter") annexed
hereto as Schedule C. Tenant's plans and specifications shall be submitted to
Landlord on or before February 13, 1986 for Landlord's approval, which approval
shall be in Landlord's sole discretion. The plans and specifications, as
approved by Landlord are hereinafter referred to as the "Final Plans" and all
work specified in the Final Plans is hereinafter referred to as "Landlord's
Initial Construction". The approval of the Final Plans by Landlord shall be
deemed authorization by Tenant for Landlord to proceed with Landlord's Initial
Construction.
Landlord shall solicit bids from no less than three (3) contractors,
one of whom shall be designated by Tenant (and reasonably acceptable to
Landlord) at the time Tenant submits its plans and specifications to Landlord
for Landlord's approval, and shall promptly notify Tenant of the amount of
Tenant's Costs (hereinafter defined) which Tenant shall be required to pay
pursuant to Section III hereof under each bid. In the event the bid accepted by
Landlord (exercising commercial reasonableness) would result in Tenant becoming
liable to Landlord for Tenant's Costs as hereinafter provided, Landlord shall
give Tenant notice thereof and Tenant may, at its option exercised within three
(3) days following Landlord's notice, waive the performance by Landlord of such
portions of Landlord's Initial Construction as Tenant shall designate. In the
event Landlord does not receive notice as aforesaid (time being of the essence
with respect to the giving of such notice), Landlord shall perform Landlord's
Initial Construction as specified in the Final Plans and Tenant shall reimburse
Landlord for any Tenant's Costs, as hereinafter provided.
Landlord shall notify Tenant of the anticipated date of substantial
completion of Landlord's Initial Construction ("Substantial Completion Date") in
a notice given at least five (5) days prior to the Substantial Completion Date
stated therein. The phrase "substantial completion" shall mean that, with the
exception of minor punch-list items, Landlord's Initial Construction shall have
been substantially completed in accordance with the Final Plans and all
mechanical systems serving or affecting the Premises shall then be in working
order. After the determination of the Substantial completion Date, Tenant
agrees, upon demand of Landlord, to execute, acknowledge and deliver to Landlord
an instrument, in form satisfactory to Landlord, setting forth the Commencement
Date, Rent Commencement Date and Expiration Date.
II. Delays.
The term "Tenant's Delay" shall mean any delay that Landlord may
encounter in the completion of Landlord's Initial Construction by reason of any
act, neglect, failure or omission of Tenant, its agents, servants, or employees,
or in the performance of Tenant's obligations under this Schedule, including,
without limitation;
<PAGE>
1. Any delay in submission of Tenant's plans and specifications
or in submission of the Final Plans for the Premises.
2. Any delay due to changes made by or on behalf of Tenant in the
Final Plans.
3. Any delay due to Tenant's request for items to be installed
within the Premises not set forth in the Work Letter or that
have a delivery date which does not provide sufficient time
for installation prior to the otherwise anticipated
Substantial Completion Date.
If the Substantial Completion Date shall be delayed by reason of
Tenant's Delay, the Premises shall be deemed to be substantially completed for
purposes of the Commencement Date as of the date that the Premises would have
been substantially completed but for any such Tenant's Delay as determined by
Landlord in its reasonable discretion.
III. Tenant's Costs
Tenant shall be liable to Landlord for costs incurred by Landlord in
the completion of Landlord's Initial Construction to the extent that such costs
are incurred as a result of a change by Tenant in the work as shown on the Final
Plans, or if the Final Plans require the performance of work or installation of
items not described in the Work Letter or if Landlord shall perform Landlord's
Initial Construction during Overtime Periods at Tenant's request (hereinafter
"Tenant's Costs"). Any Tenant's Costs, together with an additional fifteen
percent (15%) of such costs to reimburse Landlord's "out-of-pocket" expenses for
overhead and supervision, shall be paid by Tenant as additional rent within ten
(10) days of Landlord's delivery to Tenant of an invoice for such costs.
<PAGE>
July 31, 1983
Page 1 of 5
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
Partitions:
1. Demolition: Space shall be cleared of all unwanted
existing partitions, flooring, ceiling,
lighting, electrical and telephone outlets,
finishes, etc. as pursuant to tenant's
needs in regards to the execution of
this workletter.
2. Demising Wall: Install in accordance with NYC code,
one hour fire-rated slab-to-slab drywall
partitions as required to demise
premises.
3. Drywall Partition: 2-1/2" metal studs, 24" on center, to slab Linear footage to be
with 5/8" gypsum board (two sides) to equal to 10% of rentable
6" above suspended ceiling. area or 10 LF for each
100 RSF.
Doors:
4. Entrance Door: One pair entrance doors of solid mineral One pair.
core with oil finished mahogany veneer.
Lock set shall be Schlage, heavy duty
levers design No. 17, keyed to building
master; Finish: oil rubbed bronze.
Welded hollow metal buck; door closer
and two floor mounted door stops.
</TABLE>
<PAGE>
July 31, 1985
Page 2 of 5
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
5. Doors: 3'0"x8'0", 18 gauge hollow metal door with One door per 30 LF partitioning
8'2" high 16 gauge hollow metal (K.D.) or 1/3 of a door per 100 SqFt.
buck. Latch set shall be Schlage, Orbit
design finished in oil rubbed bronze, or
equal, with two pair of butts, silencers
and floor mounted door stop.
6. Closet: One 5'0" wide x 8'0" high coat closet with One closet for each
hollow metal double sliding doors with 3,000 RSF.
wooden hat shelf and one standard chrome-
finished metal clothes pole.
Ceiling:
7. Suspended Ceiling: 8'6" high concealed metal suspension system Suspended ceiling
with mineral fissured acoustic tiles: 1'x1' throughout the premise
Armstrong, Travertone #554 white, or equal.
Continuous line pocket at head of windows
and open return air.
Electrical & Telephone:
8. Light Fixtures: 2' x 4', 4 - Lamp, 48" tube, recessed One fixture for even
flourescent fixture with air return 125 RSF.
electrical ceiling outlet, warm white lamps
and 1-1/2" x 1-1/2" chrome finished parabolic lens.
</TABLE>
<PAGE>
July 31, 1985
Page 3 of 5
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
9. Exit Lights: Up to two lighted exit lights at primary
and/or secondary means of agress.
10. Wall Switches: Brushed stainless steel coverplate One setting for each private
office and sufficient switches to
open area to comply with code
(2 fix/1 sw/per office)
11. Duplex outlets: 120v base receptacle (wall mounted) 12" One for each 150 RSF
A.F.F. Brushed stainless steel cover
plate.
12. Telephone Outlets: Wall outlet for telephone 3/4" conduit, One for each 200 RSF.
stub-up to above hung ceiling. Brushed
stainless steel coverplate. 12" A.F.F.
Finishes
13. Carpet: Furnish and install carpet by Philadelphia To be installed in private
Carpets, IMPACT 30 ps #50030, direct blue. offices, halls, conference room
Dolor: To be chosen by Tenant from and common area. (except coffee room,
Landlord's selection. kitchen, private bathroom, filing,
storage and equipment room) Credits
will be allowed in for upgrading only.
</TABLE>
<PAGE>
July 31, 1985
Page 4 of 5
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
14. VAT: Furnish and install 12" x 12" VAT by To be installed in coffee room,
Asrock, "General Marble pattern. kitchen, privte bathroom, filing,
Colors: storage and equipment rooms.
VL-110 Black Pearl
VL-109 Sandstone
VL-108 Agate White
VL-106 White Sands
or equal
15. Base: Furnish and install continuous 4"
rubber base by Roppe. Colors:
00 Black
52 Chestnut
or equal
16. Paint: All surfaces shall receive two costs of All walls including
standard paint, one color per room, doore-bucks-trim.
semi-gloss on all doors, bucks and
metal enclosures. Colors: (All Benjamin
Moore)
CN-5
OW-14
OW-9
0W-4
or equal
</TABLE>
<PAGE>
July 31, 1985
Page 5 or 5
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
17. Window Treatment: Wall, 1" blinds; color: $112 Alabaster. Allow for all windows
</TABLE>
Note: Unless otherwise stated, credits will be allowed in kind for upgrading
only.
<PAGE>
July 31, 1985
Page 1 of 1
61 BROADWAY
ADDENDUM - WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
1. Windows Side-hinged casement type aluminum window One unit per opening.
with a duranodic bronze finish. Window
has a limited opening stay feature for
ventilation purposes. Insulated double
pane glass vision panel with a green tint
exterior pane and a clear interior pane.
Window has CA3-HP-60 AAMA test criteria
rating which is the highest commercial
rating.
2. Parimeter Walls and One layer of gypsum board laminated to From edge to edge of
Columns existing surfaces, where necessary, existing window frame
Taped, spackled and ready for painting.
3. Floors Finish patch holes and irregularities As determined by space
to tolerances necessary to receive conditions.
finish materials such as carpet.
4. Radiator Enclosures Heavy gauge painted metal enclosure with One continuous unit
removable aluminum top grille and from face to face of
removable front panel. column piers.
5. HVAC Package system including interior office 3 tons/1,000 usable
distribution ducts, registers and grills. sq. ft.
</TABLE>
<PAGE>
EXHIBIT 1
[BLUEPRINT OF PREMISES]
Not to scale.
All dimensions approximate.
<PAGE>
[BLUEPRINT OF PREMISES]
Not to scale.
All dimensions approximate.
<PAGE>
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
Partitions:
1. Demolition: Space shall be cleared of all unwanted
existing partitions, flooring, ceiling,
lighting, electrical and telephone outlets,
finishes, etc. as pursuant to tenant's
needs in regards to the execution of
this workletter.
2. Demising Wall: Install in accordance with NYC code,
one hour fire-rated slab-to-slab drywall
partitions as required to demise
premises.
3. Drywall Partition: 2-1/2" metal studs, 24" on center, to slab Linear footage to be
with 5/8" gypsum board (two sides) to equal to 10% of rent
6" above suspended ceiling. area or 10 LF for ea
100 RSF.
Doors:
4. Entrance Door: One pair entrance doors of solid mineral One pair.
core with oil finished mahogany veneer.
Lock set shall be Schlage, heavy duty
levers design No. 17, keyed to building
master; Finish: oil rubbed bronze.
Welded hollow metal buck; door closer
and two floor mounted door stops.
</TABLE>
<PAGE>
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
5. Doors: 3'0"x8'0", 18 gauge hollow metal door with One door per 30 LF of
8'2" high 16 gauge hollow metal (K.D.) partitioning or 1/3 of
buck. Latch set shall be Schlage, Orbit a door per 100 SF.
design finished in oil rubbed bronze, or
equal, with two pair of butts, silencers
and floor mounted door stop.
6. Closet: One 5'0" wide x 8'0" high coat closet with One closet for each
hollow metal double sliding doors with 3,000 RSF.
wooden hat shelf and one standard chrome-
finished metal clothes pole.
Ceiling:
7. Suspended Ceiling: 8'6" high concealed metal suspension system Suspended ceiling
with mineral fissured acoustic tiles: 1'x1' throughout the premise
Armstrong, Travertone #554 white, or equal.
Continuous line pocket at head of windows
and open return air.
Electrical & Telephone:
8. Light Fixtures: 2' x 4', 4 - Lamp, 48" tube, recessed One fixture for every
fluorescent fixture with air return 125 RSF.
electrical ceiling outlet, warm white lamps
and 1-1/2" x 1-1/2" chrome finished parabolic lens.
</TABLE>
<PAGE>
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
9. Exit Lights: Up to two lighted exit lights at primary
and/or secondary means of agress.
10. Wall Switches: Brushed stainless steel coverplate One setting for each private
office and sufficient switches
in open area to comply with code
(2 fixt/1 sw/per office)
11. Duplex outlets: 120v base receptacle (wall mounted) 12" One for each 150 RSF
A.F.F. Brushed stainless steel cover
plate.
12. Telephone Outlets: Wall outlet for telephone 3/4" conduit, One for each 200 RSF.
stub-up to above hung ceiling. Brushed
stainless steel coverplate. 12" A.F.F.
Finishes
13. Carpet: Furnish and install carpet by Patrick To be installed in private
Carpet Mills, "Talmage" pattern, direct offices, halls, conference
blue, Color: rooms, and common areas (except
coffee rooms, kitchens, private
87388 Grey Linen bathrooms, filing, storage and
87398 Almond Blossom equipment rooms)
87402 Clove Rose
87412 Greyed Mallard
</TABLE>
<PAGE>
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
14. VAT: Furnish and install 12" x 12" VAT by To be installed in coffee rooms,
Asrock, "General Marble pattern. kitchens, and private bathrooms,
Colors: filing, storage and equipment
room. (No credits will be allowed)
VL-110 Black Pearl
VL-109 Sandstone
VL-108 Agate White
VL-106 White Sands
or equal
15. Base: Furnish and install continuous 4"
rubber base by Roppe. Colors:
00 Black
52 Chestnut
or equal
16. Paint: All surfaces shall receive two costs of All walls including
standard paint, one color per room, doore-bucks-trim.
semi-gloss on all doors, bucks and
metal enclosures. Colors: (All Benjamin
Moore)
CN-5
OW-14
OW-9
0W-4
or equal
</TABLE>
<PAGE>
61 BROADWAY
WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
17. Window Treatment: Wall, 1" blinds; color: $112 Alabaster. Allow for all windows
Mechanical:
18. HVAC Package system including interior 3 tons/1,000 usable
office distribution ducts, registers sq. ft.
and grills.
</TABLE>
Note: Unless otherwise stated, credits will be allowed in kind for upgrading
only.
<PAGE>
61 BROADWAY
ADDENDUM - WORKLETTER
BASE BUILDING WORK
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
- --------------------------------------------------------------------------------
<S> <C> <C>
1. Windows Side-hinged casement type aluminum window One unit per opening.
with a duranodic bronze finish. Window
has a limited opening stay feature for
ventilation purposes. Insulated double
pane glass vision panel with a green tint
exterior pane and a clear interior pane.
Window has CA3-HP-60 AAMA test criteria
rating which is the highest commercial
rating.
2. Parimeter Walls and One layer of gypsum board laminated to From edge to edge of
Columns existing surfaces, where necessary, existing window frame
Taped, spackled and ready for painting.
3. Floors Finish patch holes and irregularities As determined by space
to tolerances necessary to receive conditions.
finish materials such as carpet.
4. Radiator Enclosures Heavy gauge painted metal enclosure with One continuous unit
removable aluminum top grille and from face to face of
removable front panel. column piers.
</TABLE>
<PAGE>
thereto through the Premises for the purposes of operation, maintenance,
alteration and repair.
15. CERTIFICATE OF OCCUPANCY. Tenant shall not at any time use or occupy the
Premises in violation of the certificate of occupancy issued for the Premises or
for the Building and in the event that any department of the City or State of
New York shall hereafter at any time contend and/or declare by notice,
violation, order or in any other manner whatsoever that the Premises are used
for a purpose which is a violation of such certificate of occupancy, Tenant
shall, upon five (5) days' written notice from Landlord, immediately discontinue
such use of the Premises. Failure by Tenant to discontinue such use after such
notice shall be considered a default in the fulfillment of a covenant of this
Lease and Landlord shall have the right to terminate this Lease immediately, and
in addition thereto shall have the right to exercise any and all rights and
privileges and remedies given to Landlord by and pursuant to the provisions of
Articles 17 and 18 hereof. Landlord represents that the certificate of occupancy
for the Building allows use of the premises for the Permitted Uses.
16. LANDLORD'S LIABILITY. The obligations of Landlord under this Lease shall not
be binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, 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, grantee, assignee or other transferee that such purchaser,
grantee, assignee or other transferee has assumed and agreed to carry out any
and all covenants and obligations of Landlord hereunder. Neither the
shareholders, directors or officers of Landlord, if Landlord is a corporation,
nor the partners comprising Landlord (nor any of the shareholders, directors or
officers of such partners), if Landlord is a partnership (collectively, the
"Parties"), shall be liable for the performance of Landlord's obligations under
this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The liability of Landlord for Landlord's obligations under this Lease shall not
exceed and shall be limited to Landlord's interest in the Building and the Real
Property and Tenant shall not look to any other property or assets of Landlord
or the property or assets of any of the Parties in seeking either to enforce
Landlord's obligations under this Lease or to satisfy a judgment for Landlord's
failure to perform such obligations.
17. DEFAULT.
A. Upon the occurrence, at any time prior to or during the Term, of any
one or more of the following events (referred to as "Events of Default"):
(1) if Tenant shall default in the payment when due of any
installment of Rent or in the payment when due of any additional rent,
and such default shall continue for a period of ten (10) days after
notice by Landlord to Tenant of such default; or
(2) if Tenant shall default in the observance or performances
of any term, covenant or condition of this Lease on Tenant's part to be
observed or performed rent in effect immediately prior to the date upon
which this
<PAGE>
(other than the covenants for the payment of Rent and additional rent)
and Tenant shall fail to remedy such default within fifteen (15) days
after notice by Landlord to Tenant of such default, or if such default
is of such a nature that it cannot be completely remedied within said
period of fifteen (15) days and Tenant shall not commence within said
period of fifteen (15) days, or shall not thereafter diligently
prosecute to completion all steps necessary to remedy such default; or
(3) if Tenant shall default in the observance or performance
of any term, covenant or condition of Tenant's part to be observed or
performed under any other lease with Landlord or Landlord's predecessor
in interest of space in the Building and such default shall continue
beyond any grace period set forth in such other lease for the remedying
of such default; or
(4) if the Premises shall become deserted or abandoned; or
(5) if Tenant's interest in this Lease shall devolve upon or
pass to any person, whether by operation of law or otherwise, except as
may be expressly permitted under Article 12 hereof and such default has
not been cured by Tenant within fifteen (15) days after notice of such
default; or
(6) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or shall be adjudicated a bankrupt or insolvent, or shall
file any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under the present or any future federal bankruptcy act or any of the
present or future applicable federal, state or other statute or law, or
shall make an assignment for the benefit of creditors or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator Tenant or of all or any part of Tenant's property; or
(7) if, within sixty (60) days after the commencement of any
proceeding against Tenant, whether by the filing of a petition or
otherwise, seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy act or any other present or
future applicable federal, state or other statute or law, such
proceeding shall not have been dismissed, or of, within sixty (60) days
after the appointment of any trustee, receiver or liquidator of Tenant,
or of all or any part of Tenant's property, without the consent or
acquiescence of Tenant, such appointment shall not have been vacated or
otherwise discharged, or if any execution or attachment shall be issued
against Tenant or any of Tenant's property pursuant to which the
Premises shall be taken or occupied or attempted to be taken or
occupied;
then, upon the occurrence, at any time prior to or during the Term, of any one
or more of such Events of Default, Landlord, at any time thereafter, at
Landlord's option, may give to Tenant a five (5) days' notice of termination of
this Lease and, in the event such notice is given, this Lease and the Term shall
come to an end and expire (whether or not the Term shall have commenced) upon
the expiration of said five (5) days with the same effect as if the date of
expiration of said five (5) days were the Expiration Date, but Tenant shall
remain liable for damages as provided in Article 18 hereof.
B. If, at any time, (i) Tenant shall be comprised of two (2) or more
persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease shall have been assigned, the word "Tenant", as used in clauses (6) and
(7) of subsection A of this Article 17, shall be deemed to mean anyone or more
of the persons primarily or secondarily liable for Tenant's obligations
<PAGE>
under this Lease. Any monies received by Landlord from or on behalf of Tenant
during the Tenant pendency of any proceeding ding of the types referred to in
said clauses (6) and (7) shall be deemed paid as compensation for the use and
occupation of the Premises and the acceptance of any such compensation by
Landlord shall not be deemed an acceptance of rent or a waiver on the part of
Landlord of any rights under said subsection A.
18. REMEDIES AND DAMAGES.
A. (1) If Tenant shall default in the payment when due of any
installation of Rent or in the payment when due of any additional rent, or if
any execution or attachment shall be issued against Tenant or any of Tenant's
property whereupon the Premises shall be taken or occupied or attempted to be
taken or occupied by someone other than Tenant, or if this Lease and the Term
shall expire and come to an end as provided in Article 17:
(a) Landlord and its agents and servants may
immediately, or at any time after such default or after the date upon which this
Lease and the Term shall expire and come to an end, re-enter the Premises or any
part thereof, without notice, either by summary proceedings, or by any other
applicable action or proceeding, or by force or otherwise (without being liable
to indictment, prosecution or damages therefor), and may repossess the Premises
and dispossess Tenant and any other persons from the Premises and remove any and
all of their property and effects from the Premises; and
(b) Landlord, at Landlord's option, may relet the
whole or any part or parts of the Premises from time to time, either in the name
of Landlord or otherwise, to such tenant or tenants, for such term or terms
ending before, on or after the Expiration Date, at such rental or rentals and
upon such other conditions, which may include concessions and free rent periods,
as Landlord, in its sole discretion, may determine. Landlord shall have no
obligation to relet the Premises or any part thereof and shall in no event be
liable for refusal or failure to relet the Premises or any part thereof, or, in
the event of any such reletting, for refusal or failure to collect any rent due
upon any such reletting, and no such refusal or failure shall operate to relieve
Tenant of any liability under this Lease or otherwise to affect any such
liability; Landlord, at Landlord's option, may make such repairs, replacements,
alterations, additions, improvements, decorations and other physical changes in
and to the Premises as Landlord, in its sole discretion, considers advisable or
necessary in connection with any such reletting or proposed reletting, without
relieving Tenant of any liability under this Lease or otherwise affecting any
such liability.
(2) Tenant hereby waives the service of any notice of
intention to re-enter or to institute legal proceedings to that end which may
otherwise be required to be given under any present or future law. Tenant, on
its own behalf and on behalf of all persons claiming through or under Tenant,
including all creditors, does further hereby waive any and all rights which
Tenant and all such persons might otherwise have under any present or future law
to redeem the Premises, or to re-enter or repossess the Premises, or to restore
the operation of this Lease, after (i) Tenant shall have been dispossessed by a
judgment or by warrant of any court or judge, or (ii) any re-entry by Landlord,
or (iii) any expiration or termination of this Lease and the Term, whether such
dispossess, re-entry, expiration or termination shall be by operation of law or
pursuant to the provisions of this Lease. The words "re-enter", "re-entry" and
"re-entered" as used in this Lease shall not be deemed to be restricted to their
technical legal meanings. In the event of a breach or threatened breach by
Tenant, or any persons claiming through or under Tenant, of any term, covenant
or condition of this Lease on Tenant's part to be observed or performed.
Landlord shall have the right to enjoin such breach and the right to invoke any
other
<PAGE>
remedy allowed by law or in equity as if re-entry, summary proceedings and other
special remedies were not provided in this Lease for such breach. The right to
invoke the remedies hereinbefore set forth are cumulative and shall not preclude
Landlord from invoking any other remedy allowed at law or in equity.
B. (1) If this Lease and the Term shall expire and come to an end as
provided in Article 17, or by or under any summary proceeding or any other
action or proceeding, or if Landlord shall re-enter the Premises as provided in
subsection A of this Article 18, or by or under any summary proceeding or any
other action or proceeding, then, in any of said events:
(a) Tenant shall pay to Landlord all Rent, additional
rent and other charges payable under this Lease by Tenant to Landlord to the
date upon which this Lease and the Term shall have expired and come to an end or
to the date of re-entry upon the Premises by Landlord, as the case may be;
(b) Tenant also shall be liable for and shall pay to
Landlord, as damages, any deficiency (referred to as "Deficiency") between the
Rent reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the Term and the net amount, if any, of
rents collected under any reletting effected pursuant to the provisions of
subsection A(1) of this Article 18 for any part of such period (first deducting
from the rents collected under any such reletting all of Landlord's expenses in
connection with the termination of this Lease, or Landlord's reentry upon the
Premises and with such reletting including, but not limited to, all reasonable
repossession costs, brokerage commissions, legal expenses, attorneys' fees and
disbursements, alteration costs and other expenses of preparing the Premises for
such reletting); any such Deficiency shall be paid in monthly installments by
Tenant on the days specified in this Lease for payment of installments of Rent,
Landlord shall be entitled to recover from Tenant each monthly Deficiency as the
same shall arise, and no suit to collect the amount of the Deficiency for any
month shall prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding; and
(c) whether or not Landlord shall have collected any
monthly Deficiencies as aforesaid, Landlord shall be entitled to recover from
Tenant, and Tenant shall pay to Landlord, on demand, in lieu of any further
deficiencies as and for liquidated and agreed final damages, a sum equal to the
amount by which the Rent reserved in this Lease for the period which otherwise
would have constituted the unexpired portion of the Term exceeds the then fair
and reasonable rental value of the Premises for the same period, less the
aggregate amount of Deficiencies theretofore collected by Landlord pursuant to
the provisions of subsection B(1)(b) of this Article 18 for the same period if,
before presentation of proof of such liquidated damages to any court, commission
or tribunal, the Premises, or any part thereof, shall have been relet by
Landlord for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Premises so relet during the term of the
reletting.
(2) If the Premises, or any part thereof, shall be relet
together with other space in the Building, the rents collected or reserved under
any such reletting and the expenses of any such reletting shall be equitably
apportioned for the purposes of this subsection B. Tenant shall in no event be
entitled to any rents collected or payable under any reletting, wether or not
such rents shall exceed the Rent reserved in this Lease. Solely for the purposes
of this Article, the term "Rent" as used in subsection B(1) of this Article 18
shall mean the rent in effect immediately prior to the date upon which this
<PAGE>
Lease and the Term shall have expired and come to an end, or the date of
re-entry upon the Premises by Landlord, as the case may be, adjusted to reflect
any increase or decrease pursuant to the provisions of Article 28 hereof for the
Comparison Year (as defined in said Article 28) immediately preceding such
event. Nothing contained in Article 17 or this Article 18 shall be deemed to
limit or preclude the recovery by Landlord from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums
or damages to which Landlord may be entitled in addition to the damages set
forth in subsection B(1) of this Article 18.
19. FEES AND EXPENSES.
A. Curing Tenant's Defaults. 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, Landlord may immediately or at any time thereafter on ten (10) days'
notice perform the same for the account of Tenant, and if Landlord makes any
expenditures or incurs any obligations for the payment of money in connection
therewith including, but not limited to reasonable attorneys' fees and
disbursements in instituting, prosecuting or defending any action or proceeding,
such sums 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
ten (10) days of rendition of any bill or statement to Tenant therefor.
B. Late Charges. If Tenant shall fail to make payment of any
installment of Rent or any additional rent within ten (1) days after notice that
such payment is due, Tenant shall pay to Landlord, in addition to such
installment of Rent or such additional rent, as the case may be, as a late
charge and as additional rent, a sum based on a rate equal to the lessor of (i)
two (2%) percent per annum above the then current prime rate charged by
Citibank, N.A. or its successor and (ii) the maximum rate permitted by
applicable law, of the amount unpaid computed from the date such payment was due
to and including the date of payment.
20. NO REPRESENTATIONS BY LANDLORD. Landlord or Landlord's agents have made no
representations or promises with respect to the Building, the Real Property, the
Premises or Taxes (as defined in Article 28 hereof) 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 herein. All references in
this Lease to the consent or approval of Landlord shall be deemed to mean the
written consent of Landlord or the written approval of Landlord and no consent
or approval of Landlord shall be effective for any purpose unless such consent
or approval is set forth in a written instrument executed by Landlord.
21. END OF TERM. Upon the expiration of other termination of the Term, Tenant
shall quit and surrender to Landlord the Premises, broom clean, in good order
and condition, ordinary wear and tear and damage for which Tenant is not
responsible under the terms of this Lease excepted, and Tenant may remove all of
its property pursuant to Article 3 hereof. Tenant's obligation to observe or
perform this covenant shall survive the expiration or sooner termination of the
Term. If the last day of the Term or any renewal thereof falls on Saturday or
Sunday this Lease shall expire on the business day immediately preceding. Tenant
expressly waives, for itself and for any person claiming through or under
Tenant, any rights which Tenant or any such person may have under the provisions
of Section 2201 of the New York Civil Practice Law and Rules and of any
<PAGE>
successor law of like import then in force in connection with any holdover
summary proceedings which Landlord may institute to enforce the foregoing
provisions of this Article 21. In addition, the parties recognize and agree that
the damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises as aforesaid will be substantial, will exceed the
amount of the monthly installments of the Rent theretofore payable hereunder,
and will be impossible to accurately measure. Tenant therefore agrees that if
possession of the Premises is not surrendered to Landlord within twenty-four
(24) hours after the Expiration Date or sooner termination of the Term, in
addition to any other rights or remedy Landlord may have hereunder or at law,
Tenant shall pay to Landlord for each month and for each portion of any month
during which Tenant holds over in the Premises after the Expiration Date or
sooner termination of this lease, a sum equal to two (2) times the aggregate of
that portion of the Rent which was payable under this Lease during the last
month of the Term. Nothing herein contained shall be deemed to permit Tenant to
retain possession of the Premises after the Expiration Date or sooner
termination of this Lease and no acceptance by Landlord of payments from Tenant
after the Expiration Date or sooner termination of the Term shall be deemed to
be other than on account of the amount to be paid by Tenant in accordance with
the provisions of this Article 21, which provisions shall survive the Expiration
Date or sooner termination of this Lease.
22. QUIET ENJOYMENT. 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 subject, nevertheless, to the terms
and conditions of this Lease including, but not limited to, Article 16 hereof
and to all Superior Leases and Mortgages.
23. FAILURE TO GIVE POSSESSION. Tenant waives any right to rescind this Lease
under Section 223-a of the New York Real Property Law or any successor statute
of similar import then in force and further waives the right to recover any
damages which may result from Landlord's failure to deliver possession of the
Premises on the date set forth in Article 1 hereof for the commencement of the
Term. If Landlord shall be unable to give possession of the Premises on such
date, and provided Tenant is not responsible for such inability to give
possession, the Rent reserved and covenanted to be paid herein shall not
commence until the possession of the Premises is given or the Premises are
available for occupancy by Tenant, and no such failure to give possession on
such date shall in any wise affect the validity of this Lease or the obligations
of Tenant hereunder or give rise to any claim for damages by Tenant or claim for
rescission of this Lease, nor shall same be construed in any wise to extend the
Term. If permission is given to Tenant to enter into the possession of the
Premises or to occupy premises other than the Premises prior to the Commencement
Date, Tenant covenants and agrees that such occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this Lease,
including the covenant to pay Rent.
24. NO WAIVER. If there be any agreement between Landlord and Tenant providing
for the cancellation of this Lease upon certain provisions or contingencies
and/or an agreement for the renewal hereof at the expiration of the Term, the
right to such renewal or the execution of a renewal agreement between Landlord
and Tenant prior to the expiration of the Term shall not be considered an
extension thereof or a vested right in Tenant to such further term, so as to
prevent Landlord from cancelling this Lease and any such extension thereof
during the remainder of the original Term; such privilege, if and when so
exercised by Landlord, shall cancel and terminate this Lease and any such
<PAGE>
renewal or extension previously entered into between Landlord and Tenant or the
right of Tenant to any such renewal or extension; any right herein contained on
the part of Landlord to cancel this Lease shall continue during any extension or
renewal hereof; any option on the part of Tenant herein contained for an
extension or renewal hereof shall not be deemed to give Tenant any option for a
further extension beyond the first renewal or extended term. No act or thing
done by Landlord or Landlord's agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept such
surrender shall be valid unless in writing signed by Landlord. No employee of
Landlord or of Landlord's agents shall have any power to accept the keys of the
Premises prior to the termination of this Lease. The delivery of keys to any
employee of Landlord or of Landlord's agents shall not operate as a termination
of this Lease or a surrender of the Premises. In the event Tenant at any time
desires to have Landlord sublet the Premises for Tenant's account, Landlord or
Landlord's agents are authorized to receive said keys for such purpose without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant's
effects in connection with such subletting. 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 any of the Rules and Regulations set
forth or hereafter adopted by Landlord, shall not prevent a subsequent act,
which would have originally constituted a violation, from having all 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. The failure of Landlord to enforce any of the Rules and Regulations set
forth, or hereafter adopted, against Tenant and/or any other tenant in the
Building shall not be deemed a waiver of any such Rules and Regulations. 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 mount than the monthly Rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated Rent, or as
Landlord may elect to apply same, nor shall any endorsement or statement on 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. This Lease contains the entire agreement
between the parties and all prior negotiations and agreements are merged in this
Lease. 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.
25. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord and
Tenant that the respective parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, and/or any claim of injury or damage,
or for the enforcement of any remedy under any statute, emergency or otherwise.
It is further mutually agreed that in the event Landlord commences any summary
proceeding for non-payment of rent, Tenant will not interpose any counterclaim
(except for mandatory or compulsory counterclaims) of whatever nature or
description in any such proceeding.
26. INABILITY TO PERFORM. This Lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements hereunder on the
part of Tenant to be performed shall in no wise be affected, impaired or excused
because
<PAGE>
Landlord is unable to fulfill any of its obligations under this Lease expressly
or impliedly to be performed by Landlord or because Landlord is unable to make,
or is delayed in making any repairs, additions, alterations, improvements 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 strikes
or labor troubles or by accident or by any cause whatsoever reasonably beyond
Landlord's control, including but not limited to, laws, governmental preemption
in connection with a National Emergency or by reason of any rule, order or
regulation of any federal, state, county or municipal authority or any
department or subdivision thereof or any government agency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency.
27. BILLS AND NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be deemed sufficiently given or
rendered if in writing, sent by registered or certified mail (return receipt
requested) addressed (a) to Tenant (i) at Tenant's address set forth in this
Lease if mailed prior to Tenant's taking possession of the premises, or (ii) at
the Building if mailed subsequent to Tenant's occupying the Premises for the
conduct of business, or (iii) at any place where Tenant or any agent or employee
of Tenant may be found if mailed subsequent to Tenant's vacating, deserting,
abandoning or surrendering the Premises, in any of such events with a copy to:
Ashinoff, Ross & Goldman, 747 Third Avenue, New York, New York 10017, Attention:
Samuel Goldman, Esq., or (b) to Landlord at Landlord's address set forth in this
Lease, with a copy to: Demov, Morris & Hammerling, 40 West 57th Street, New
York, New York 10019, Attn: Norman J. Wachtel, Esq., or (c) to such other
address as either Landlord or Tenant may designate as its new address for such
purpose by notice given to the others in accordance with the provisions of this
Article 27. Any such bill, statement, demand, request or other communication
shall be deemed to have been rendered or given on the date when it shall have
been mailed as provided in this Article 27.
28. ESCALATION.
A. In a determination of any increase in the Rent under the provisions
of this Article 28, Landlord and Tenant agree as follows:
(1) "Taxes" shall mean the aggregate amount of real estate
taxes and any special assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property (including, without limitation, (i) assessments
made upon or with respect to any "air rights", and (ii) any assessments levied
after the date of this Lease for public benefits to the Real Property or the
Building (excluding an amount equal to the assessments payable in whole or in
part during or for the Base Tax Year (hereinafter defined), which assessments,
if payable in installments, shall be deemed payable in the maximum number of
permissible installments (in the manner in which such taxes and assessments are
imposed as of the date hereof); provided, that if because of any change in the
taxation of real estate, any other tax or assessment (including, without
limitation, any occupancy, gross receipts or rental tax) is imposed upon
Landlord or the owner of the Real property or the Building, or the occupancy,
rents or income therefrom, in substitution for or in addition to, any of the
foregoing Taxes, such other tax or assessment shall be deemed part of the Taxes.
With respect to any Comparison Year (hereinafter defined) all expenses,
including attorneys' fees and disbursements, experts' and other witnesses' fees,
incurred in contesting the validity or amount of any Taxes or in obtaining a
refund of Taxes shall be considered as part of the Taxes for such year.
<PAGE>
(2) "Assessed Valuation" shall mean the amount for which the
Real Property is assessed pursuant to applicable provisions of the New York city
Charter and of the Administrative Code of the city of New York for the purpose
of imposition of Taxes.
(3) "Tax Year" shall mean the period July 1 through June 30
(or such other period as hereinafter may be duly adopted by the City of New York
as its fiscal year for real estate tax purposes).
(4) "Base Taxes" shall mean the Taxes payable for the Base Tax
year.
(5) "Comparison year" shall mean (i) with respect to Taxes,
any Tax Year subsequent to the Base Tax Year, and (ii) with respect to Operating
Expenses (hereinafter defined) any calendar year subsequent to the Base Expense
Year (hereinafter defined), for any part or all of which there is an increase in
the Rent pursuant to subsection B of this Article 28.
(6) (a) "Operating Expenses" shall mean the aggregate of those
costs and expenses (and taxes, if any, thereof)paid or incurred by or on behalf
of Landlord (whether directly or through independent contractors) in respect of
the operation, maintenance and management of the land and/or the Building and
the sidewalks and areas adjacent thereto (hereinafter called "Operation of the
Property") which, in accordance with the accounting practices used by Landlord
(and which is in accordance with sound management principles respecting the
operation of non-institutional first class office buildings in New York City)
are properly chargeable to the Operation of the Property together with and
including (without limitation) the financial expenses incurred in connection
with the Operation of the Property such as increases in ground rent, if any,
insurance premiums, attorneys' fees and disbursements (exclusive of any such
fees and disbursements incurred in applying for any abatement of Taxes) and
auditing and other professional fees and expenses, but specifically excluding
(i) Taxes, (ii) franchise or income taxes imposed upon Landlord, (iii) mortgage
interest, (iv) leasing commissions, (v) the cost of tenant installations and
decorations incurred in connection with preparing space for a new tenant, (vi)
ground rent, if any, other than increases therein, (vii) any expenses which are
reimbursable to Landlord by any other Tenant in the Building, (viii) capital
improvements, except, however, that (A) if any capital improvement results in
reducing Operating Expenses (as, for example, a labor-saving improvement), then
with respect to the Comparison Year in which the improvement is made and each
subsequent Comparison Year during the Term the amount by which the Operating
Expenses have been reduced shall be deemed deducted from the Base Operating
Expenses (hereinafter defined) and (B) if Landlord is not furnishing any
particular work or service (the cost of which if performed by Landlord would
constitute an Operating Expense) to a tenant who has undertaken to perform such
work or service in lieu of the performance thereof by Landlord, Operating
Expenses shall be determined to be increased by an amount equal to the
additional Operating Expense which reasonably would have been incurred during
such period by Landlord if it had at its own expense furnished such work or
services to such tenant, and (ix) attorneys' fees and disbursements and auditing
and other professional fees and expenses incurred with respect to particular
tenants as opposed to the operating and management of the Building as a whole.
(b) In determining the amount of Operating Expenses for the
Base Expense Year or any Comparison Year, if less than ninety-five percent (95%)
of the Building rentable area shall have been occupied by tenant(s) at any time
during any such Base Expense Year or Comparison Year, Operating Expenses shall
be determined for such Base Expense Year or Comparison Year to be an amount
equal to the like expenses which would normally be expected to be incurred had
such occupancy been ninety-five percent (95%) throughout such Base Expense Year
or Comparison Year.
<PAGE>
(c) If any capital improvement is made during any Comparison
Year in compliance with requirements of any federal, state or local law or
governmental regulation, whether or not such law or regulation is valid or
mandatory, then the reasonable annual amortization, with interest, of the cost
of such improvements shall be deemed an Operating Expense in each of the
Comparison years during which such amortization occurs.
(7) "Base Operating Expenses" shall mean the Operating Expenses for the
Base Expense Year.
(8) "Landlord's Statement" shall mean an instrument or instruments
containing a comparison of any increase or decrease in the Rent for the
preceding Comparison Year pursuant to the provisions of this Article 28.
B. (1) if the Taxes payable for any Comparison Year (any part of all of
which falls within the Term) shall represent an increase above the Base Taxes,
then the Rent for such Comparison Year and continuing thereafter until a new
Landlord's Statement is rendered to Tenant, shall be increased by Tenant's
proportionate Share of such increase. The Taxes shall be initially computed on
the basis of the Assessed Valuation in effect at the time Landlord's Statement
is rendered (as the Taxes may have been settled or finally adjudicated prior to
such time) regardless of any then pending application, proceeding or appeal
respecting the reduction of any such Assessed Valuation, but shall be subject to
subsequent adjustments as provided in subsection D(1)(a) of this Article 28.
(2) If the Operating Expenses for any Comparison Year (any part or all
of which falls within the Term) shall be greater than the Base Operating
Expenses, then the Rent for such Comparison year and continuing thereafter until
a new Landlord's Statement is rendered to Tenant, shall be increased by Tenant's
proportionate Share of such increase.
C. (1) At any time during or after any Comparison Year Landlord shall
render to Tenant, either in accordance with the provisions of Article 27 hereof
or by personal delivery at the Premises, a Landlord's Statement or Statements
showing separately or together (i) a comparison of the Taxes payable for the
Comparison Year with the Base Taxes, (ii) a comparison of the operating Expenses
for the Comparison Year with the Base Operating Expenses, and (iii) the amount
of the increase in the Rent resulting from each of such comparisons. Landlord's
failure to render a Landlord's Statement during or with respect to any
Comparison Year shall not prejudice Landlord's right to render a Landlord's
Statement during or with respect to any subsequent Comparison year, and shall
not eliminate or reduce Tenant's obligation to pay increases in the Rent
pursuant to this Article 28 for such Comparison Year.
(2) (a) Tenant's obligations with respect to increases in Operating
Expenses, shall be payable by Tenant on the first day of the month following the
furnishing to Tenant of a Landlord's Statement with respect to Operating
Expenses in an amount equal to 1/12th of such increase in the Rent multiplied by
the number of months (and any fraction thereof) of the Term then elapsed since
the commencement of the Comparison year for which the increase in Operating
Expenses is applicable, together with a sum equal to 1/12th of such increase
with respect to the month following the furnishing to Tenant of a Landlord's
Statement; and thereafter, commencing with the next succeeding monthly
installment of Rent and continuing monthly thereafter until rendition of the
next succeeding Landlord's Statement, the monthly installments of Rent shall be
increased by an amount equal to 1/12th of such increase in Operating Expenses.
Any increase in the Rent shall be collectible by landlord in the same manner as
Rent
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(b) With respect to an increase in the Rent resulting from an
increase in the Taxes for any Comparison Year above the Base Taxes, Tenant shall
pay to Landlord, a sum equal to 1/2 of such increase on the first day of June
and a sum equal to 1/2 of such increase on the first day of December of each
calendar year. If Landlord's Statement shall be furnished to Tenant after the
commencement of the Comparison Year to which it relates, then (i) until
Landlord's Statement is rendered for such Comparison Year, Tenant shall pay
Tenant's Proportionate Share of Taxes for such Comparison Year in semi-annual
installments, as described above, based upon the last prior Landlord's Statement
rendered to Tenant with respect to Taxes, and (ii) Tenant shall, within 10 days
after Landlord's Statement is furnished to Tenant, pay to Landlord an amount
equal to any underpayment of the installments of Taxes theretofore paid by
Tenant for such Comparison year and, in the event of an overpayment by Tenant,
Landlord shall permit Tenant to credit against subsequent payments under this
subsection (C)(2)(b) of this Article 28 the amount of such overpayment. If
during the Term of this Lease, Taxes are required to be paid (either to the
appropriate taxing authorities or as tax escrow payments to a mortgagee or
ground lessor) in full or in monthly, quarterly, or other installments, on any
other date or dates than as presently required, then, at Landlord's option,
Tenant's Proportionate Share with respect to Taxes shall be correspondingly
accelerated or revised so that Tenant's Proportionate Share is due at least 30
days prior to the date payments are due to the taxing authorities or the
superior mortgagee or ground lessor, as the case may be. The benefit of any
discount for any early payment or prepayment of Taxes shall accrue solely to the
benefit of Landlord, and such discount shall not be subtracted from Tenant's
Proportionate Share of such Taxes.
(c) following each Landlord's Statement, a reconciliation
shall be made as follows: Tenant shall be debited with any increase in the Rent
shown on such Landlord's Statement and credited with the aggregate, if any, paid
by Tenant on account in accordance with the provisions of subsection C(2)(a) or
C(2)(b) for the Comparison Year in question; Tenant shall pay any net debit
balance to Landlord within fifteen (15) days next following rendition by
Landlord, either in accordance with the Provisions of Article 27 hereof or by
personal delivery to the Premises, of an invoice for such net debit balance; any
net credit balance shall be applied against the next accruing monthly
installment of Rent.
(3) (a) As used in this subsection C(3), the words "Tentative Monthly
Expense Charge" shall mean a sum equal to 1/12th of Tenant's Proportionate Share
multiplied by the difference between (x) the Base Operating Expenses and (y)
108% of the Operating Expenses for the immediately preceding Comparison Year.
(b) At any time in any Comparison Year (any part or all of
which falls within the Term), Landlord, at its option, in lieu of the payments
required under subsection C(2)(a) of this Article 28, may demand and collect
from Tenant, as additional rent, commencing with the month in which the demand
is made and continuing thereafter for each month remaining in said Year, the
monthly installments of Rent shall be deemed increased by the Tentative Monthly
Expense Charge. Any amount due to Landlord under this subsection C(3)(b) may be
included by Landlord in any Landlord's Statement rendered to Tenant as provided
in subsection C(1) of this Article 28.
(c) After the end of the comparison year in which a demand is
made pursuant to the provisions of subsection C(3)(b) of this Article 28 and at
any time the Landlord renders a Landlord's Statement or Statements to Tenant as
provided in subsection C(1) of this Article 28, the amounts, if any, collected
by Landlord from Tenant under subsection C(3)(b) hereof on account of Tentative
Monthly Expense Charge shall be adjusted, and, if the amount so collected is
less than or exceeds the amount actually due
<PAGE>
under said Landlord's Statement for the Comparison Year, a reconciliation shall
be made in the same manner as provided in subsection C(2)(c) of this Article 28.
D. (1)(a) In the event that, after a Landlord's Statement has been sent
to Tenant, an Assessed Valuation which had been utilized in computing the Taxes
for a Comparison Year is reduced (as a result of settlement, final determination
of legal proceedings or otherwise), and as a result thereof a refund of Taxes is
actually received by or on behalf of Landlord, then, promptly after receipt of
such refund, Landlord shall send Tenant, a statement adjusting the Taxes for
such Comparison Year (taking into account the expenses mentioned in the last
sentence of subsection A(1) of this Article 28) and setting forth Tenant's
Proportionate Share of such refund and Tenant shall be entitled to receive such
Share by way of a credit against the Rent next becoming due after the sending of
such Statement; provided, however, that Tenant's Share of such refund shall be
limited to the amount, if any, which Tenant had theretofore paid to Landlord as
increased Rent for such Comparison Year on the basis of the Assessed Valuation
before it had been reduced.
(b) In the event that, after a Landlord's Statement has been
sent to Tenant, the Assessed Valuation which had been utilized in computing the
Base Taxes is reduced (as a result of settlement, final determination of legal
proceedings or otherwise) then, and in such event: (i) the Base Taxes shall be
retroactively adjusted to reflect such reduction, (ii) the monthly installment
of rent shall be increased accordingly, and (iii) all retroactive additional
rent resulting from such retroactive adjustment shall be forthwith payable when
billed by Landlord. Landlord promptly shall send to Tenant a statement setting
forth the basis for such retroactive adjustment and additional rent payments.
(2) Any Landlord's Statement sent to Tenant shall be conclusively
binding upon Tenant unless, within thirty (30) days after such statement is
sent, Tenant shall (i) pay to Landlord the amount set forth in such statement,
without prejudice to Tenant's right to dispute the same, and (ii) send a written
notice to Landlord objecting to such statement and specifying the respects in
which such statement is claimed to be incorrect. If such notice is sent, the
parties recognize the unavailability of Landlord's books and records because of
the confidential nature thereof and hence agree that either party may refer the
decision of the issues raised to a reputable independent firm of certified
public accountants selected by Landlord and reasonably acceptable to Tenant, and
the decision of such accountants shall be conclusively binding upon the parties.
The fees and expenses involved in such decision shall be borne by the
unsuccessful party (and if both parties are partially unsuccessful, the
accountants shall apportion the fees and expenses between the parties based on
the degree of success of each party).
(3) Anything in this Article 28 to the contrary notwithstanding, under
no circumstances shall the rent payable under this Lease be less than the Rent
set forth in Article 1 hereof.
(4) The expiration or termination of this Lease during any Comparison
Year for any part or all of which there is an increase in the Rent under this
Article shall not affect the rights or obligations of the parties hereto
respecting such increase and any Landlord's Statement relating to such increase
may, on a pro rata basis, be sent to Tenant subsequent to, and all such rights
and obligations shall survive, any such expiration or termination. Any payments
due under such Landlord's Statement shall be payable within twenty (20) days
after such statement is sent to Tenant.
<PAGE>
29. SERVICES.
A. Elevator. Landlord shall provide passenger elevator facilities on
business days from 8:00 a.m. to 6:00 p.m. and shall have one passenger elevator
in the bank of elevators servicing the Premises available at all other times.
B. Heating. Landlord shall furnish heat to the Premises when and as
required by law, on business days from 8:00 a.m. to 6:00 p.m. Landlord is not
responsible for the adequacy, design or capacity of the heat distribution system
serving the Building.
C. Cooling. Landlord, at Landlord's expense, shall furnish air-cooling
on business days from 8:00 a.m. to 6:00 p.m. from May 15 through October 15 of
each year during the Term, when, in the judgment of Landlord, reasonably
exercised, it may be required for the comfortable occupancy of the Premises, and
shall ventilate the Premises on business days and for similar hours during other
months of the year. Anything in this subsection C to the contrary
notwithstanding, Landlord shall not be responsible if the normal operation of
the Building air-cooling system shall fail to provide cooled air at reasonable
temperatures, pressures or degrees of humidity or any reasonable volumes or
velocities in any parts of the Premises by reason of (i) human occupancy factors
and any machinery or equipment installed by or on behalf of Tenant or any person
claiming through or under Tenant that have an electrical load in excess of the
average electrical load for the Building air-cooling system as designed, (ii)
any rearrangement of partitioning or other Alterations made or performed by or
on behalf of Tenant or any person claiming through or under Tenant, or (iii) the
inadequate capacity of the existing air-cooling system. Tenant agrees to keep
and cause to be kept closed all of the windows in the Premises whenever the air-
cooling system is in operation and agrees to lower and close the blinds when
necessary because of the sun's position whenever the air-cooling system is in
operation. Tenant at all times agrees to cooperate fully with Landlord and to
abide by the regulations and requirements which Landlord may prescribe for the
proper functioning and protection of the air-cooling system. Landlord,
throughout the Term, shall have free access to any and all mechanical
installations of Landlord, including but not limited to air-cooling, fan,
ventilating, machine rooms and electrical closets.
D. After Hours Service. The Rent does not reflect or include any charge
to Tenant for the furnishing or distributing of any necessary freight elevator
facilities at any time, or any necessary heat, cooled air or mechanical
ventilation to the Premises during periods other than the hours and days set
forth above in this Article 29 for the furnishing and distributing of such
services (referred to as "Overtime Periods"). Accordingly, if Landlord shall
furnish any such freight elevator facilities at any time, or any such heat,
cooled air or mechanical ventilation to the Premises at the request of Tenant
during Overtime Periods, Tenant shall pay Landlord additional rent for such
services at the standard rates then fixed by Landlord for the Building or, if no
such rates are then fixed, at reasonable rates. Landlord shall not be required
to furnish any such services during any Overtime Periods unless Landlord has
received advance notice from Tenant requesting such services twenty-four (24)
hours prior to the time when such services shall be required. If Tenant fails to
give Landlord such advance notice requesting such services during any Overtime
Periods, then, whether or not the Premises are inhabitable during such Periods,
failure by Landlord to furnish or distribute any such services during such
Periods shall not constitute an actual or constructive eviction, in whole or in
part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord or its agents by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business or otherwise. In no event
shall Landlord be required to furnish such services to Tenant during Overtime
Periods for more than twenty (20) hours in any one week. If more than
<PAGE>
one tenant utilizing the same system as Tenant requests the same overtime
Periods for the same services as Tenant, the charge to Tenant shall be adjusted
pro rata.
E. Cleaning. Landlord, at Landlord's expense, shall cause the Premises
to be kept clean in building standard manner. If, however, the Premises are to
be kept clean by Tenant, it shall be done at Tenant's sole expense, in a manner
satisfactory to Landlord and no one other than persons approved by Landlord
shall be permitted to enter the Premises or the Building for such purpose.
Tenant shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish from the Premises and the Building to the extent that the same exceeds
the refuse and rubbish usually attendant upon the use of such Premises as
offices. 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 paid as additional rent. Tenant shall,
however, have the option of independently contracting for the removal of such
refuse and rubbish 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.
F. Sprinkler System. If there now is or shall be installed in the
Building a "sprinkler system," and such system or any of its appliances shall be
damaged or injured or not in proper working order by reason of any act or
omission of Tenant, Tenant's agents, servants, employees, licensees or visitors,
Tenant shall forthwith restore the same to good working condition at its own
expense; and if the New York Board of Fire Underwriters or the New York Fire
Insurance Rating Organization or any bureau, department or official of the state
or city government, shall require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of Tenant's business, or the location of the partitions, trade
fixtures, or other contents of the Premises, Tenant shall, at Tenant's expense,
promptly make and supply such changes, modifications, alterations, additional
sprinkler heads or other equipment.
G. Water. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary drinking, cleaning or lavatory purposes, Landlord may
install a water meter and thereby measure Tenant's water consumption for all
purposes. In such event (a) Tenant shall pay Landlord for the cost of the meter
and the cost of the installation thereof and through 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; (b) 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; and (c) Tenant covenants and agrees to pay the sewer rent, charge or any
other tax, rent, levy or charge which now or hereafter is assessed, imposed or
shall become a lien upon the Premises or the realty of which they are part
pursuant to law, order or regulation made or issued in connection with any such
metered use, consumption, maintenance or supply of water, water system, or
sewage or sewage connection or system. The bill rendered by Landlord for the
above shall be based upon Tenant's consumption and shall be payable by Tenant as
additional rent within five (5) days of rendition. Any such costs or expenses
incurred or payments made by Landlord for any of the reasons or purposes
hereinabove stated shall be deemed to be additional rent payable by Tenant and
collectible by Landlord as such. 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 herein above set forth.
<PAGE>
H. Electricity Service. (1) Landlord shall redistribute or furnish
electrical energy to or for the use of Tenant in the Premises for the operation
of the lighting fixtures and the electrical receptacles installed in the
Premises through sub-meters which shall measure Tenant's consumption of
electrical energy in the Premises. If either the quantity or character of
electrical service is changed by the public utility or other company supplying
electrical service to the Building or is no longer available or suitable for
Tenant's requirements, no such change, unavailability or unsuitability shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Landlord, or its
agents, by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business, or otherwise.
(2) Landlord shall, at the sole cost and expense of Tenant, which cost
shall not exceed $3,000 per meter, install, maintain, repair and/or replace the
sub-meters which measure Tenant's consumption of electrical energy in the
Premises. Any additional feeders or risers to be installed to supply Tenant's
additional electrical requirements, and all other equipment proper and necessary
in connection with such feeders or risers, shall be installed by Landlord upon
Tenant's request, at the sole cost and expense of Tenant, provided that, in
Landlord's judgment, such additional feeders or risers are necessary and are
permissible under applicable laws and insurance regulations and the installation
of such feeders or risers will not cause permanent damage or injury to the
Building or the Premises or cause or create a dangerous or hazardous condition
or entail excessive or unreasonable alterations or interfere with or disturb
other tenants or occupants of the Building. Tenant covenants that at no time
shall the use of electrical energy in the Premises exceed the capacity of the
existing feeders or wiring installations then serving the Premises. Tenant shall
not make or perform, or permit the making or performance of, any Alterations to
wiring installations or other electrical facilities in or serving the Premises
or any additions to the business machines, office equipment or other appliances
in the Premises which utilize electrical energy without the prior consent of
Landlord in each instance. Any such Alterations, additions or consent by
Landlord shall be subject to the provisions of this Article 29, as well as to
other provisions of this Lease including, but not limited to, the provisions of
Article 3 hereof.
(3) Tenant shall payable to Landlord, as additional rent, on demand,
from time to time, but no more frequently than monthly, for its consumption of
electrical energy at Landlord's average cost of electricity for the Building per
KWH, plus an additional eight (8%) percent charge to reimburse Landlord for
overhead and supervision. For the purpose of this subsection H(3) the rate to be
paid by Tenant in connection with such sub-metering shall include any taxes or
other charges imposed upon Landlord in connection therewith. If any tax shall be
imposed upon Landlord's receipts from the sale or resale of electrical energy to
Tenant, the pro rate share allocable to the electrical energy service received
by Tenant shall be passed on to, included in the bill of, and paid by Tenant if
and to the extent permitted by law.
(4) Landlord reserves the right to discontinue furnishing electricity
to Tenant in the Premises on not less than thirty (30) days' notice to Tenant.
If Landlord exercises such right to discontinue, or is compelled to discontinue
furnishing electricity to Tenant, this Lease shall continue in full force and
effect and shall be unaffected thereby, except only that from and after the
effective date of such discontinuance, Landlord shall not be obligated to
furnish electricity to Tenant. If Landlord so discontinues furnishing
electricity to Tenant, Tenant shall arrange to obtain electricity directly from
the public utility or other company servicing the Building. Such electricity may
be furnished to Tenant by means of the then existing facilities serving the
Premises to the extent that the same are available, suitable and safe for such
purposes. All meters and all
<PAGE>
additional panel boards, feeders, risers, wiring and other conductors and
equipment which may be required to obtain electricity, of substantially the same
quantity, quality and character, shall be installed by Landlord, at Tenant's
sole cost and expense. Notwithstanding the foregoing, Landlord shall not
voluntarily discontinue furnishing electricity to Tenant unless it likewise
discontinues furnishing electricity to all tenants of office space above the
second floor of the Building, and Tenant is able to receive electricity directly
from the public utility or other company servicing the Building.
(5) Landlord shall not be liable to Tenant in any way for any
interruption, curtailment or failure, or defect in the supply or character of
electricity furnished to the Premises by reason of any requirement, act or
omission of Landlord or of any public utility or other company servicing the
Building with electricity or for any other reason except Landlord's gross
negligence or willful misconduct.
(6) In the event Tenant shall occupy the Premises prior to the Rent
Commencement date, Landlord shall bill Tenant from time to time, but no more
frequently than monthly, for the cost of Tenant's consumption of electricity in
the premises and Tenant shall pay the same, together with eight (8%) percent
charge specified in subsection H(3), as additional rent within ten (10) days of
receipt of each bill.
L. Interruption of Services. Landlord reserves the right to stop
service of the HVAC System during any period after reasonable notice (in no
event less then thirty (30) days in the event of a monetary default) to Tenant
of a violation or breach by Tenant of the provisions of this Article 29 and
Tenant's failure to promptly cure such breach, and to stop the service of the
HVAC System or the elevator, electrical, plumbing or other mechanical systems or
facilities in the Building when necessary, by reason of accident or emergency,
or for repairs, additions, alterations, replacements, decorations or
improvements in the judgment of Landlord desirable or necessary to be made,
until said repairs, alterations, replacements or improvements shall have been
completed: Landlord shall have no responsibility or liability for interruption,
curtailment or failure to supply cooled or outside air, heat, elevator, plumbing
or electricity when prevented by exercising its right to stop service or by
strikes, labor troubles or accidents or by any cause whatsoever reasonably
beyond Landlord's control, or by failure of independent contractors to perform
or by laws, orders, rules or regulations of any federal, state, county or
municipal authority, or failure of suitable fuel supply, or inability by
exercise of reasonable diligence to obtain suitable fuel or by reason of
governmental preemption in connection with a National Emergency or by reason of
the conditions of supply and demand which have been or are affected by war or
other emergency. The exercise of such right or such failure by Landlord shall
not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any compensation or to any abatement or diminution of rent, or
relieve tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise.
30. PARTNERSHIP TENANT. If Tenant is a partnership (or is comprised of two (2)
or more persons, individually and as co-partners of a partnership) or if
Tenant's interest in this Lease shall be assigned to a partnership (or to two
(2) or more persons, individually and as co-partners of a partnership) pursuant
to Article 12 (any such partnership and such persons are referred to in this
Article 30 as "Partnership Tenant"), the following provisions of this Article 30
shall apply to such Partnership Tenant: (i) the liability of each of the parties
comprising Partnership Tenant shall be joint and several, and (ii) each of the
parties comprising Partnership Tenant hereby consents in advance to, and agrees
to be bound by any written instrument which may hereafter be executed, changing
<PAGE>
modifying or discharging this Lease, in whole or in part, or surrendering all or
any part of the Premises to Landlord, and by any notices, demands, requests or
other communications which may hereafter be given by Partnership Tenant or by
any of the parties comprising Partnership Tenant, and (iii) any bills,
statements, notices, demands, requests or other communications given or rendered
to Partnership Tenant and to all such parties shall be binding upon Partnership
Tenant and all such parties, and (iv) if Partnership Tenant shall admit new
partners, all of such new partners shall, by their admission to Partnership
Tenant, be deemed to have assumed performance of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, and (v)
Partnership Tenant shall give prompt notice to Landlord of the admission of any
such new partners, and upon demand of Landlord, shall cause each such new
partner to execute and deliver to Landlord an agreement in form satisfactory to
Landlord, wherein each such new partner shall assume performance of all the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed (but neither Landlord's failure to request any such agreement nor
the failure of any such new partner to execute or deliver any such agreement to
Landlord shall vitiate the provisions of subdivision (iv) of this Article 30).
31. VAULT SPACE. Any vaults, vault space or other space outside the boundaries
of the Real Property, notwithstanding anything contained in this Lease or
indicated on any sketch, blueprint or plan are not included in the Premises.
Landlord makes no representation as to the location of the boundaries of the
Real Property. All vaults and vault space and all other space outside the
boundaries of the Real Property which Tenant may be permitted to use or occupy
is to be used or occupied under a revocable license, and if any such license
shall be revoked, or if the amount of such space shall be diminished or required
by any Federal, State or Municipal authority or by any public utility company,
such revocation, diminution or requisition shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord. Any fee, tax or charge imposed by
any governmental authority for any such vaults, vault space or other space shall
be paid by Tenant.
32. SECURITY DEPOSIT. Tenant shall deposit with Landlord on the signing of this
Lease the Security Deposit (as defined in Article 1 of this Lease) as security
for the faithful performance and observance by Tenant of the terms, conditions
and provisions of this Lease, including without limitation the surrender of
possession of the Premises to Landlord as herein provided. Landlord agrees to
deposit the Security Deposit in a money market interest bearing bank account
located in New York State. To the extent not prohibited by law, Landlord shall
be entitled to receive and retain as an administrative expense that portion of
the interest received on such account equal to one percent (1%) per annum of the
Security Deposit, which fee Landlord shall have the right to withdraw from time
to time, at Landlord's discretion. The balance of the interest shall be added to
and held as part of the Security Deposit subject to and in accordance with the
provisions of this Lease; provided, however, that Landlord shall pay the same to
Tenant, but not more frequently than annually, and not during the last calendar
year preceding the Expiration Date, within a reasonable time following Tenant's
request therefor. Landlord shall not be required to credit Tenant with any
interest for any period during which Landlord does not receive interest on the
Security Deposit, nor shall Landlord have any liability or obligation for loss
of all or any portion of the Security Deposit by reason of the insolvency or
failure of the bank in which the Security Deposit is deposited. It is agreed
that in the event Tenant defaults in respect of any of the terms, provisions and
conditions of this Lease, including but not limited to, the payment of Rent and
additional rent, Landlord may, after notice and the expiration of any applicable
grace period apply or
<PAGE>
retain the whole or any part of the Security Deposit so deposited to the extent
required for the payment of any Rent and additional rent or any other sum as to
which Tenant is in default or for any sum which Landlord may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this Lease, including but not limited to, any
damages or deficiency in the reletting of the Premises, whether such damages or
deficiency accrue or accrues before or after summary proceedings or other
reentry by Landlord. If Landlord applies or retains any part of the Security
Deposit so deposited, Tenant, upon demand, shall deposit with Landlord the
amount so applied or retained so that Landlord shall have the full Security
Deposit on hand at all times during the Term. If Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions of
this Lease, the security shall be returned to Tenant after the Expiration Date
and after delivery of the entire possession of the Premises to Landlord. In the
event of a sale of the Real Property or the Building or leasing of the Building,
Landlord shall have the right to transfer the Security Deposit to the vendee or
lessee and Landlord shall thereupon be released by Tenant from all liability for
the return of the Security Deposit; and Tenant agrees to look solely to the new
Landlord for the return of the Security Deposit; and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
Security Deposit to a new Landlord. Tenant further covenants that it will not
assign or encumber or attempt to assign or encumber the Security Deposit and
that neither Landlord nor its successors or assigns shall be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance.
33. CAPTIONS. 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.
34. ADDITIONAL DEFINITIONS.
A. The term "office" or "offices," wherever used in this Lease, shall
not be construed to mean premises used as a store or stores, for the sale or
display, at any time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or for other
similar purposes or for manufacturing.
B. The words "reenter" and "reentry" as used in this Lease are not
restricted to their technical legal meaning.
C. The term "rent" as used in this Lease shall mean and be deemed to
include Rent, any increases in Rent, all additional rent and any other sums
payable hereunder.
D. the term "business days" as used in this Lease shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and union holidays for those unions that materially affect the
delivery of services in the Building.
35. PARTIES BOUND. 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.
<PAGE>
36. BROKER. Tenant represents and warrants that Tenant has dealt directly with
(and only with), the Broker (as defined in Article 1 herein) as broker in
connection with this Lease, and that insofar as Tenant knows no other broker
negotiated this Lease or is entitled to any commission in connection therewith,
and the execution and delivery of this Lease by Landlord shall be conclusive
evidence that Landlord has relied upon the foregoing representation and
warranty.
37. INDEMNITY. Tenant shall not do or permit any act or thing to be done upon
the Premises which may subject Landlord to any liability or responsibility for
injury, damages to persons or property or to any liability by reason of any
violation of law or of any legal requirement of public authority, but shall
exercise such control over the Premises as to fully protect Landlord against any
such liability. Tenant agrees to indemnify and save harmless Landlord from and
against (a) all claims of whatever nature against Landlord arising from any act,
omission or negligence of Tenant, its contractors, licenses, agents, servants,
employees, invitees or visitors, including any claims arising from any act,
omission or negligence of Landlord or Landlord and Tenant, (b) all claims
against Landlord arising from any accident, injury or damage whatsoever caused
to any person or to the property of any person and occurring during the Term in
or about the Premises, (c) all claims against Landlord arising from any
accident, injury or damage occurring outside of the Premises but anywhere within
or about the Real property, where such accident, injury or damage results or is
claimed to have resulted from an act or omission of Tenant or Tenant's agents,
employees, invitees or visitors, including any claims arising from any act,
omission or negligence of Landlord or Landlord and Tenant, and (d) any breach,
violation or non-performance of any covenant, condition or agreement in this
Lease set forth and contained on the part of Tenant to be fulfilled, kept,
observed and performed. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof.
38. ADJACENT EXCAVATION SHORING. If an excavation shall be made upon land
adjacent to the 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 Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building 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.
39. MISCELLANEOUS.
A. No Offer. This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord unless and until
Landlord shall have executed and delivered a fully executed copy of this Lease
to Tenant.
b. Signatories. If more than one person executes this Lease as Tenant,
each of them understands and hereby agrees that the obligations of each of them
under this Lease are and shall be joint and several, that the term "Tenant" as
used in this Lease shall mean and include each of them jointly and severally and
that the act of or notice from, or notice or refund to, or the signature of, any
one or more of them, with respect to the tenancy and/or this Lease, including,
but not limited to, any renewal, extension, expiration, termination or
modification of this Lease, shall be binding upon each and all of
<PAGE>
the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund
or so signed.
C. From time to time, within seven (7) days next following Landlord's request,
Tenant shall deliver to Landlord a written statement executed and acknowledged
by Tenant, in form satisfactory to Landlord, (i) stating that this Lease is then
in full force and effect and has not been modified (of if modified, setting
forth all modifications), (ii) setting forth the date to which the Rent,
additional rent and other charges hereunder have been paid, together with the
amount of fixed base monthly Rent then payable, (iii) stating whether or not, to
the best knowledge of Tenant, Landlord is in default under this Lease, and, if
Landlord is in default, setting forth the specific nature of all such defaults,
(iv) stating the amount of the security deposit under this Lease, (v) stating
whether there are any subleases affecting the Premises, (vi) stating the address
of Tenant to which all notices and communication under the Lease shall be sent,
the Commencement Date and Expiration Date, and (vii) as to any other matters
requested by Landlord. Tenant acknowledges that any statement delivered pursuant
to this subsection C may be relied upon by any purchaser or owner of the Real
Property or the Building, or Landlord's interest in the Real Property or the
Building or any Superior Lease, or by any mortgagee of a Mortgage, or by any
assignee of any mortgagee of a Mortgage, or by any lessor under any Superior
Lease.
D. Directory Listings. Landlord agrees to provide Tenant, at Landlord's
sole cost and expense, with a single listing of Tenant's name on the directory
in the lobby of the Building. Upon written request by Tenant, Landlord agrees to
provide Tenant with additional listings on such directory, at Tenant's sole cost
and expense, provided Tenant shall be limited to the greater of (i) ten (10)
listings or (ii) a number of listings determined by multiplying Tenant's
Percentage by the total number of spaces for listings on such directory.
40. Intentionally Deleted.
41. ADDITIONAL PREMISES. A. Upon the date which is five (5) calendar years
following the Commencement Date (the "Additional Premises Commencement Date)),
Article 1 of this Lease shall be deemed modified as follows:
(i) The "Premises" as defined in subparagraph A shall include the
balance of the twelfth (12th) floor in the Building as more particularly shown
on Exhibit 2 annexed hereto and made a part hereof (hereinafter called the
"Additional Premises");
(ii) The Rent specified in clause (iii) of subparagraph B shall be
increased by One Hundred Eighty-Nine Thousand Eight Hundred Fifty and 00/100
Dollars ($189,850.00) annually, payable in equal monthly installments of Fifteen
Thousand Eight Hundred Twenty and 83/100 Dollars ($15,820.83) from the
Additional Premises commencement Date through the Expiration Date;
(iii) Clause (viii) subparagraph B shall be deemed to read as follows:
"Tenant's proportionate Share" shall mean two and ninety-two
one-hundredths of one percent (2.92%); and
(iv) The Security Deposit specified in clause (x) of subparagraph B
shall be increased by the sum of $31,646.66 less any sums previously paid to
Landlord by Tenant
<PAGE>
pursuant to the provisions of clause (iii) of Article 42, which sum shall be
paid to Landlord on or before the Additional Premises Commencement Date and held
by Landlord, together with the sums deposited by Tenant upon the signing of this
Lease and pursuant to the provisions of clause (iii) of Article 42, in
accordance with the provisions of Article 32 hereof.
B. Notwithstanding anything contained in this Article 41 to the
contrary, Landlord shall have the absolute right to lease all or any portion of
the Additional Premises to one or more parties for a term or terms to expire no
later than the Additional Premises Commencement Date, and upon such other terms
and conditions as Landlord shall deem acceptable (the "Interim Lease").
C. (i) In the event the Additional Premises, or any portion thereof,
shall have been prepared for occupancy pursuant to the terms of an Interim
Lease, Tenant agrees to accept possession of the Additional Premises, or such
portion as the case may be, in the condition which shall exist on the Additional
Premises Commencement Date "as is"; provided, however, that
Landlord at its sole cost and expense shall (a) paint the Additional Premises in
Tenant's choice of then Building-standard color, (b) provide and install a then
Building-standard door and accessories or a door-sized opening between the
Additional Premises and the Premises and repair any damage caused by such
installation, and (c) deliver vacant and broom clean possession of the
Additional Premises to Tenant. Tenant further agrees that Landlord shall have no
other obligation to perform any work or make any installation in order to
prepare the Additional premises for Tenant's occupancy.
(ii) In the event the Additional Premises, or any portion thereof,
shall not have been prepared for occupancy pursuant to the terms of an Interim
Lease, Tenant agrees to accept possession of the Additional Premises in the
condition which shall exist on the Additional Premises Commencement Date "as
is", except that Landlord at its sole cost and expense within a reasonable time
prior to the Additional Premises Commencement Date shall perform Landlord's
Initial Construction for that portion of the Additional Premises which shall not
have been previously prepared for occupancy, in which event, (1) all references
in Schedule B to the Premises shall be deemed to mean the Additional Premises,
(2) Tenant's plans and specifications shall be delivered to Landlord for
Landlord's approval within thirty (30) days following Landlord's demand
therefor, (3) such work shall be performed with a minimum of inconvenience to
Tenant and (4) Tenant shall vacate such portions of the Premises as shall be
reasonably necessary in order for Landlord to perform such work. Tenant further
agrees that Landlord shall have no other obligation to perform any work or make
any installations in order to make the Additional Premises ready for Tenant's
occupancy.
D. Tenant waives any right to rescind this Lease under Section 223-a of
the New York Real Property Law or any successor statute of similar import then
enforce and further waives the right to recover any damages which may result
from Landlord's failure to deliver possession of the Additional Premises on the
date set forth herein for the Additional Premises Commencement Date. If Landlord
shall be unable to give possession of the Additional Premises on such date, and
provided Tenant is not responsible for such inability to give possession, the
modifications to Article 1 of this Lease hereinabove specified shall not be
effective until the Additional Premises are available for occupancy by Tenant,
and no such failure to give possession on such date shall in any wise affect the
validity of this Lease or the obligations of Tenant hereunder or give rise to
any claim for damages by Tenant or claim for rescission of this Lease, nor shall
the same be construed in any wise to extend the Term. In the event Landlord
shall be unable to give possession of the Additional Premises on the Additional
Premises Commencement Date by reason of the holding-over or retention of
possession of any tenant, undertenant or occupant, and in
<PAGE>
the Additional Premises for more than thirty (30) days following the Additional
Premises Commencement Date, Landlord shall, at its sole cost and expense,
commence summary proceedings against such tenant, undertenant or occupant, as
the case may be.
42. TENANT'S RIGHT OF FIRST OFFER.
If, at any time subsequent to the expiration or earlier termination of the
term of an Interim Lease but prior to the Additional Premises Commencement Date,
Landlord shall receive a bona-fide offer to lease all or any portion of the
Additional Premises from an unrelated third party, Landlord shall first give
Tenant notice ("Landlord's Notice") of the portion of the Additional Premises
which such party desires to Lease. Provided this Lease shall be in full force
and effect and that Tenant shall not be in default hereunder, Tenant shall have
the option, exercisable by notice to Landlord given within seven (7) days
following the date of Landlord's Notice, the time of giving of such notice to be
of the essence of this agreement, to lease that portion of the Additional
Premises specified in Landlord's Notice, in which event, Landlord and Tenant
shall enter into an amendment of this Lease reasonably acceptable to Landlord to
provide for (i) the inclusion of such portion of the Additional Premises in the
Premises, (ii) an increase in the Rent by an amount equal to (a) Twenty-Four
Dollars ($24.00) per rentable square foot per annum of the Additional Premises
to be leased from the effective date of such amendment to the day proceeding the
Additional Premises Commencement Date and (b) Twenty-Five Dollars ($25.00) per
rentable square foot per annum of such space from the Additional Premises
Commencement Date to the Expiration Date, (iii) an increase in the Security
Deposit specified in clause (x) of subparagraph B of Article 1 by two (2) times
the then payable Rent, and (iv) a modification of the definition of Tenant's
Proportionate Share to accurately represent the percentage that the Landlord's
calculation of the rentable area of the Premises, together with the portion of
the Additional Premises leased to Tenant, bears to the total rentable area of
the Building. In all other respects, the terms and conditions contained in this
Lease (including, without limitation, the Term, Escalations and Base Years)
shall remain unmodified. In the event that Tenant fails to exercise its option
as aforesaid within seven (7) days of the date of Landlord's Notice, Tenant
shall be deemed to have waived its rights under this Article 42 with respect to
that portion of the Additional Premises described in Landlord's Notice and,
subject to the provisions of Article 41 of this Lease, Landlord shall have the
absolute right to lease that portion of the Additional Premises specified in
Landlord's Notice to any other person or entity and Landlord shall be relieved
of its obligations under this Article 42 with respect to that portion of the
Additional Premises specified in Landlord's Notice. In the event that Landlord
and Tenant shall not have executed an amendment of this Lease as aforesaid
within fourteen (14) days from the date of Landlord's Notice, this Lease shall
be deemed amended to provide for the items specified in (i) through (iv) above.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
NINETEEN NEW YORK PROPERTIES LIMITED
PARTNERSHIP, Landlord
By: First Winthrop Corporation,
General Partner
By:/s/ [ILLEGIBLE]
SMITH NEW [ILLEGIBLE]
<PAGE>
AMENDMENT TO AGREEMENT OF LEASE
This Amendment of Agreement of Lease, made as of this 31st day of March,
1986, between NINETEEN NEW YORK PROPERTIES LIMITED PARTNERSHIP, having an office
c/o First Winthrop Corporation, 757 Third Avenue, New York, New York 10017
(hereinafter called "Landlord") and SMITH NEW COURT INC., having an office at
One Rockefeller Plaza, New York, New York 10022 (hereinafter called "Tenant"),
WITNESSETH:
WHEREAS, by Agreement of Lease dated as of the 15th day of January, 1986
between Landlord and Tenant (the "Lease"), Landlord leased to Tenant and Tenant
hired from Landlord portion of the twelfth (12th) floor (the "Premises") in the
building known as 61 Broadway, New York, New York (the "Building"); and
WHEREAS, Landlord and Tenant desire to amend the Lease;
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration each to the other paid, the receipt and
sufficiency whereof is hereby acknowledged, Landlord and Tenant hereby agree as
follows:
1. Subdivision (i) of subsection B of Article 1 is hereby deleted in its
entirety and the following substituted in its place:
"Commencement Date" shall mean June 11, 1986.
2. Subdivision (ii) of subsection B of Article 1 is hereby deleted in its
entirety and the following substituted in its place:
"Expiration Date" shall mean August 10, 1996.
3. Subdivision (v) of subsection B of Article 1 is hereby deleted in its
entirety and the following substituted in its place:
"Rent Commencement Date" shall mean August 11, 1986.
4. Subsection B of Article 1 is hereby modified by the addition of
the following:
<PAGE>
"(xii) `Additional Premises Commencement Date' shall be June 1, 1991.
5. The second sentence of Article 23 is hereby deleted in its entirety.
6. The first clause of subsection A of Article 41 is hereby deleted in its
entirety and the following substituted in its place:
"Upon the Additional Premises Commencement Date, Article 1 of this
Lease shall be deemed modified as follows:"
7. Exhibit 1 and Exhibit 2 of the Lease are hereby deleted in their
entirety and Exhibit 1-A and Exhibit 2-A, annexed hereto, are substituted in
their place.
8. Schedule B and Schedule C of the lease are hereby deleted in their
entirety and Schedule B-1 and Schedule C-1 annexed hereto, are substituted in
their place.
9. The Premises are hereby designated as Suite 1200.
10. Tenant hereby represents and warrants that neither Tenant nor, to the
best of its knowledge, Landlord, is in default of its obligations under the
Lease and that Tenant has no claims, defenses or offsets to the payment of Rent
or any additional rent payable under the Lease.
11. All references in the Lease and this Agreement to the "Lease" shall be
deemed to include this Agreement.
12. Except as herein specifically amended and modified, all of the terms,
covenants and conditions of the Lease shall continue in full force and effect,
and such terms, covenants and conditions, as amended and modified, are ratified
and confirmed.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Agreement as of the date and year first above written.
NINETEEN NEW YORK PROPERTIES
LIMITED PARTNERSHIP, Landlord
By: First-Winthrop Corporation
By: /s/ [ILLEGIBLE]
-----------------------------
<PAGE>
[PHOTO]
<PAGE>
[PHOTO]
<PAGE>
SCHEDULE B-1
LANDLORD'S INITIAL CONSTRUCTION
I. Landlord's Work.
Landlord shall cause the work set forth in the work letter to addendum
(collectively, the "Work Letter") annexed hereto as Schedule C-1 to be performed
to the Tenant's reasonable satisfaction in accordance with the plans and
specifications dated 2/10/86, prepared by J.P. Maggio Design Associates, Inc., a
copy of which are annexed hereto as Schedule D-1 (the "Final Plans"); provided,
however, that Landlord's responsibility shall be limited to the specifications
set forth in the Work Letter. All work Plans is hereinafter referred to as
"Landlord's Initial Construction". Nothing herein contained shall be deemed to
create any liability on the part of Landlord with respect to the design or
specifications set forth in the Final Plans.
II. Tenant's Work.
1. All work, other than Landlord's Initial Construction, which may be
required in order to prepare the Premises for Tenant's occupancy, shall be
performed by or on behalf of the Tenant at Tenant's sole cost and expense in
accordance with the Final Plans (the "Tenant's Work"). Tenant shall retain the
firm of B.R. Fries & Associates Inc. as general contractor with respect to
Tenant's Work.
2. Tenant shall submit to Landlord's architect, upon the execution of
the Amendment, the following information:
A. The names and addresses of the sub-contractors that Tenant intends
to engage for the construction of Tenant's Work; and
B. Evidence of insurance as required by the Lease.
3. All contractors retained by Tenant shall be union, licensed and
capable of performing quality workmanship and working in harmony with Landlord's
general contractor and other contractors in the Building. Landlord and Tenant
shall use their best efforts to cause all work to be performed by Landlord and
Tenant pursuant to the provisions of this Lease to be coordinated by the
respective contractors for Landlord and Tenant. Landlord agrees to coordinate
the work being performed in the public corridor adjoining the Premises with
Tenant's Work and further agrees to use reasonable efforts to substantially
complete such public corridor work as soon as practicable but in any event
within thirty (30) days following the substantial completion of Tenant's Work.
4. The construction of Tenant's Work shall comply with all applicable
laws, rules, and regulations of governmental authorities having or asserting
jurisdiction thereover. All required building and other permits in connection
with the construction and completion of Tenant's work shall be obtained and paid
for by Tenant.
<PAGE>
5. Tenant shall cause its contractors to provide warranties for not
less than one year against defects in workmanship, materials and equipment.
6. Tenant's Work shall be subject to the general inspection of
Landlord's architect and general contractor at reasonable times and at
reasonable intervals without cost to Tenant.
7. Upon (i) Tenant's substantial completion of Tenant's Work; (ii)
receipt by Landlord of waivers of lien and sworn statements from all persons who
have performed labor or supplied material in connection with Tenant's Work,
showing that they have been compensated in full; (iii) receipt by Landlord of
all building department and other approvals issued with respect to Tenant's
Work; and (iv) receipt by Landlord of invoices showing payments due to persons
who have performed labor or supplied materials in connection with Tenant's Work;
Landlord shall pay to Tenant the lesser of the sum expended by Tenant in
performing Tenant's Work, or the sum of
8. Except and only to the extent that any item of Landlord's Work is
being performed by or under the supervision of Tenant's general contractor,
Landlord's Work shall be substantially completed within two (2) weeks following
the date hereof; provided, however, that all windows to be installed as part of
Landlord's Work shall be installed prior to the final painting of the Premises.
9. The term "Landlord's Delay" shall mean any delay that Tenant may
encounter in the substantial completion of Tenant's Work by reason of any act,
neglect, failure or omission of Landlord, its agents, servants or employees;
provided, however, that the term "Landlord's Delay" shall not include any delay
caused by or resulting from any act, neglect, failure or omission of Tenant, its
agents, servants or employees or from any of the conditions specified in Article
26 of the Lease. If the substantial completion of Tenant's Work shall be delayed
by reason of Landlord's Delay, Tenant shall give Landlord written notice
thereof, specifying with particularity the nature of Landlord's Delay and the
condition causing the same, and if Landlord shall not cause such condition to be
cured within five (5) days following Tenant's notice (or shall not commence to
cure such condition with said five (5) day period and diligently prosecute the
cure to completion if such condition is incapable of cure within five (5) days,
the Rent Commencement Date shall be extended by the time period during which
Landlord's Delay continued, as determined by Landlord in its reasonable
discretion.
<PAGE>
Schedule C-1
Work Letter
Landlord agrees, at its sole cost and expense and without charge to Tenant,
to do the following work in the Premises, all of which shall be of design,
capacity, finish and color of the building standard adopted by Landlord for the
Building hereinafter called "Building Standard".
1. Provide and install the electrical and plumbing hookups to the HVAC.
2. Provide and install demising wall.
3. Remove debris associated with Landlord's Work.
<PAGE>
61 BROADWAY
ADDENDUM - WORKLETTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM DESCRIPTION [ILLEGIBLE]
- --------------------------------------------------------------------------------
<S> <C> <C>
1. Windows Side-hinged casement type aluminum One unit
window with a duranodic bronze
finish. Window has a limited opening ILLEGIBLE]
stay feature for ventilation
purposes. Insulated double pane
glass vision panel with a green tint
exterior pane and a clear interior
pane. Window has CA3-HP-60 AAMA test
criteria rating which is the highest
commercial rating.
2. Perimeter Walls and One layer of gypsum board laminated From edge to [illegible]
Columns to existing surfaces, where existing window [illegible]
necessary. Taped, spackled and ready
for painting.
3. Floors Flash patch holes and irregularities As determined [illegible]
to tolerance necessary to receive conditions [illegible]
finish material such as carpet.
4. Radiator Enclosures Heavy gauge painted metal enclosure One continuous [illegible]
with removable aluminum top grills from face to [illegible]
and removable front panel.
5. HVAC Package system including interior 3 tons/1,000 [illegible]
office distribution ducts, registers
and grills.
</TABLE>
<PAGE>
SECOND AMENDMENT TO AGREEMENT OF LEASE
THIS SECOND AMENDMENT OF AGREEMENT OF LEASE, made of this 7th day of
August, 1987, between NINETEEN NEW YORK PROPERTIES LIMITED PARTNERSHIP, having
an office c/o First Winthrop Corporation, 757 Third Avenue, New York, New York
10017, hereinafter called "Landlord") and SMITH NEW COURT INC., having an office
at 61 Broadway, New York, New York (hereinafter called "Tenant"),
WITNESSETH:
WHEREAS, by Agreement of Lease dated as of the 15th day of January, 1986
between Landlord and Tenant as amended by Amendment to Agreement of Lease dated
March 31, 198[illegible] (collectively, the "Lease"), Landlord leased to Tenant
and Tenant hired from Landlord a portion of the twelfth (12th) floor (the
"Premises"); in the building known as 61 Broadway, New York, New York (the
"Building"); and
WHEREAS, Landlord and Tenant desire to amend the Lease;
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration each to the other paid, the receipt and
sufficiency whereof is hereby acknowledged, Landlord and Tenant hereby agree as
follows:
1. Subdivision (ii) of subsection B of Article [illegible] is hereby
deleted in its entirety and the following is substituted in its place:
"Expiration Date" shall mean February 28, 1998.
2. Subdivision (iii) of subsection B of Article [illegible] is hereby
deleted in its entirety and the following is substituted in its place:
"Rent" shall mean (a) for the period from the Rent Commencement Date
to August 10, 1996,
Dollars annually, payable in equal monthly installments [illegible]
Dollars, and (b) for the period from August 11, 1996 to February 28,
1998,
Dollars annually, payable in equal monthly installments of _______
Dollars.
<PAGE>
3. Tenant hereby represents and warrants that neither Tenant nor, to the
best of its knowledge, Landlord, is in default of its obligations under the
Lease and that Tenant has no claims, defenses or offsets to the payment of Rent
or any additional rent payable under the Lease.
4. All references in the Lease and this Agreement to the "Lease" shall be
deemed to include this Agreement.
5. Tenant represents and warrants that Tenant has dealt directly with (and
only with) The Peregrine White Company and Winthrop Financial Co., Inc. as
brokers in connection with this Second Amendment and that insofar as Tenant
knows no other broker negotiated this Second Amendment or is entitled to any
commission in connection therewith, and the execution and delivery of this
Second Amendment by Landlord shall be conclusive evidence that Landlord has
relied upon the foregoing representation and warranty.
6. Except as herein specifically amended and modified, all of the terms,
covenants and conditions of the Lease shall continue in full force and effect,
and such terms, covenants and conditions, as amended and modified, are ratified
and confirmed.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Agreement as of the date and year first above written.
NINETEEN NEW YORK PROPERITIES
LIMITED PARTNERSHIP, Landlord
By: First Winthrop Corporation
By: /s/ Stephen DeNardo
--------------------------
Vice President
SMITH NEW COURT INC., TENANT
By: /s/ James T. Stevens
--------------------------
2
<PAGE>
SPINOFF DOCUMENT 0130x
88690-1
61 BROADWAY ASSOCIATES
c/o The Galbreath Company
61 Broadway
New York, NY 10006
September 13, 1990
Smith New Court Carl Marks, Inc.
61 Broadway
New York, New York 10006
Re: Lease dated January 15, 1986 between Nineteen New York Properties
Limited Partnership successor in interest to 61 Broadway ("Landlord"),
and Smith New Court Inc., predecessor in interest to Smith New Court
Carl Marks, Inc. ("Tenant"), covering a portion of the twelfth (12th)
floor (the "Premises") in the building known as 61 Broadway, New York,
New York (the "Building"). (Said lease as amended is referred to
herein as the "Lease".)
Gentlemen:
In accordance with your request, Landlord hereby grants permission to
Tenant to sublease a portion of the Premises (the "Sublet Space") pursuant to an
agreement dated August 27, 1990 (the "Sublease Agreement"), between Tenant and
GKN Holdings Corp (the "Subtenant"), a copy of which Sublease Agreement is
annexed hereto and made a part hereof as Exhibit A,
<PAGE>
for a term commencing on about October 1, 1990, and ending on February 27, 1998,
which subletting, however, shall be subject to the following terms and
conditions:
1. Neither this letter agreement, nor the Sublease, nor any acceptance of
rent by Landlord from Subtenant shall operate to waive, modify, release or in
any manner affect Tenant's liability under the Lease. No other sublease of all
or of any part of the Premises affected by the Lease shall be made by Tenant
without the prior written approval of Landlord, except as provided in the Lease.
2. Tenant and Subtenant represent and warrant that no rent or other
consideration is being paid or is payable to Tenant by Subtenant for the right
to use or occupy the Sublet Space or for the use, sale or rental of Tenant's
fixtures, leasehold improvements, equipment, furniture or other personal
property in excess of the pro rata portion of the rent for the Sublet Space now
being paid by Tenant to Landlord pursuant to the terms of the Lease, and Tenant
and Subtenant represent and warrant that the Sublease is complete, true and
correct agreement between the parties. If such rent or other consideration
exceeds such pro rata portion of the rent, Tenant shall pay to Landlord such
excess in accordance with, and subject to, the provisions of the Lease.
3. Subtenant will use and occupy the Sublet Space for executive offices
relating to Subtenant's business;
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<PAGE>
Subtenant shall not use or occupy, or permit the use or occupancy of, the Sublet
Space or any part thereof, for any purpose other than the purpose specifically
set forth above in this sentence, or in any manner which, in Landlord's
judgment, shall adversely affect or interfere with any services required to be
furnished by Landlord to Tenant or to any other tenant or occupant of the
Building, or with the proper and economical rendition of any such service, or
with the use or enjoyment of any part of the Building by any other tenant or
occupant. No alterations shall be made by Tenant or Subtenant in the Sublet
Space without the prior written consent of Landlord, except as provided in the
Lease.
4. If, at any time prior to the expiration of the term of the Sublease, the
term of the Lease shall terminate or be terminated as a result of any default
under the Lease or by operation of law, the Sublease and the term granted
thereby shall terminate, and, on or prior to the date of such termination of the
Sublease, Subtenant, at Subtenant's sole cost and expense, (i) shall quit and
surrender the Sublet Space to Landlord, broom clean and in good order and
condition, ordinary wear excepted, and (ii) shall repair all damage to the
Sublet Space occasioned by such removal. Landlord shall have the right to retain
any property and effects which shall remain in the Sublet Space after such
termination, and any net proceeds from
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the sale thereof, without waiving Landlord's rights with respect to any default
by Subtenant under the foregoing provisions of this paragraph. Subtenant
expressly waives, for itself and for any person claiming through or under
Subtenant, any rights which Subtenant or any such person may have under the
provisions of Section 2201 of the New York Civil Practice Law and Rules and of
any successor law of like import then in force, in connection with any holdover
summary proceedings which Landlord may institute to enforce the foregoing
provisions of this paragraph. If the date of such termination shall fall on a
Sunday or holiday, then Subtenant's obligations under the first sentence of this
paragraph shall be performed on or prior to the Saturday or business day
immediately preceding such Sunday or holiday. Subtenant's obligations under this
paragraph shall survive the expiration or sooner termination of the terms of the
Lease and the Sublease. Notwithstanding the foregoing provisions of this
paragraph, in the event that Subtenant shall be required to attorn pursuant to
the provisions of paragraph 5 of this letter agreement, the foregoing provisions
of this paragraph shall have no force or effect.
5. If, at any time prior to the expiration of the term of the Sublease, the
term of the Lease shall terminate or be terminated for any reason, Subtenant
agrees, at the election and upon demand of Landlord or any other owner of the
real
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<PAGE>
property, or of the holder of any mortgage in possession of the real property or
the Building, or of any lessee under the lease to which the Sublease shall be
subject and subordinate, to attorn, from time to time, to Landlord or any such
owner, holder or lessee, upon the then executory terms and conditions set forth
in the Sublease for the remainder of the term demised in the Sublease, provided
that Landlord or such owner, holder or lessee, as the case may be, shall then be
entitled to possession of the Sublet Space. The foregoing provisions of this
paragraph shall enure to the benefit of any such owner, holder or lessee, shall
apply notwithstanding that, as a matter of law, the Sublease may terminate upon
the termination of the Lease, shall be self-operative upon any such demand, and
no further instrument shall be required to give effect to said provisions. Upon
demand of Landlord or any such owner, holder or lessee, Subtenant agrees,
however, to execute, from time to time, instruments in confirmation of the
foregoing provisions of this paragraph, satisfactory to Landlord or any such
owner, holder or lessee, in which Subtenant shall acknowledge such attornment
and shall set forth the terms and conditions of its tenancy. Nothing contained
in this paragraph shall be construed to impair any right otherwise exercisable
by Landlord or any such owner, holder or lessee. Upon request of Landlord or any
such owner, holder or lessee, whether or not made prior to such termination,
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<PAGE>
Tenant and Subtenant shall deliver an executed counterpart of the Sublease to
Landlord.
6. Subtenant shall obtain and maintain throughout the term of the Sublease,
in Subtenant's fire insurance policies covering Subtenant's property in the
Sublet Space, and Subtenant's use and occupancy of the Sublet Space (and shall
cause any other permitted occupants of the Sublet Space to obtain and maintain,
in similar policies), provisions to the effect that such policies shall not be
invalidated should the insured waive, in writing prior to a loss, any or all
right of recovery against any party for loss occasioned by fire or other
casualty which is an insured risk under such policies. In the event that at any
time the fire insurance carriers issuing such policies shall exact an additional
premium for the inclusion of such or similar provisions, Subtenant shall give
Landlord and Tenant notice thereof. In such event, Tenant shall reimburse
Subtenant for such additional premium for the remainder of the term of the
Sublease. As long as such or similar provisions are included in such fire
insurance policies then in force, Subtenant hereby waives (and agrees to cause
any other permitted occupants of the Sublet Space to execute and deliver to
Landlord written instruments waiving) any right of recovery against Landlord,
Tenant, any lessors under any ground or underlying leases, any other tenants and
occupants of the Building, and any
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<PAGE>
servants, employees, agents or contractors of Landlord, Tenant or of any such
lessor, or of any such other tenants or occupants, for any loss occasioned by
fire or other casualty which is an insured risk under such policies. In the
event that at any time any such fire insurance carriers shall not include such
or similar provisions in any such fire insurance policy, the waiver set forth in
the foregoing sentence shall, upon notice given by Subtenant to Landlord and
Tenant, be deemed of no further force or effect from and after the giving of
such notice. During any period while the foregoing waiver of right or recovery
is in effect, Subtenant, or any other permitted occupant of the Sublet Space, as
the case may be, shall look solely to the proceeds of such policies to
compensate Subtenant or such other permitted occupants for any loss occasioned
by fire or other casualty which is an insured risk under such policies.
7. Subtenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, covenants that,
without the prior consent of Landlord in each instance, it shall not (i) assign,
mortgage or encumber its interest in the Sublease, or (ii) sublet, or permit the
subletting of, the Sublet Space or any part thereof, or (iii) permit the Sublet
Space or any part thereof to be occupied, or
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<PAGE>
used for desk space, mailing privileges or otherwise, by any person other than
Subtenant.
8. In the event Landlord shall grant its consent to any subletting or
assignment by Tenant or Subtenant, the form of the proposed sublease or
instrument of assignment (a) shall be in form reasonably satisfactory to
Landlord, and, without limitation, (I) shall not provide for a rental or other
payment for the use, occupancy or utilization of the space demised thereby based
in whole or in part on the income or profits derived by any person from the
property so leased, used, occupied or utilized other than an amount based on a
fixed percentage or percentages of gross receipts or sales and (II) shall
provide that no person having an interest in the possession, use, occupancy or
utilization of the space demised thereby shall enter into any lease, sublease,
license, concession or other agreement for use, occupancy or utilization of such
space which provides for a rental or other payment for such use, occupancy or
utilization based in whole or in part on the income or profits derived by any
person from the property so leased, used, occupied or utilized other than an
amount based on a fixed percentage or percentages of gross receipts or sales,
and that any such purported lease, sublease, concession or other agreement shall
be absolutely void and ineffective ab initio and
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<PAGE>
(b) such assignment or subletting shall comply with the applicable provisions of
Article 12 of the Lease.
9. The Sublease is subject and subordinate in all respects to the Lease and
to all of the terms, covenants and conditions thereof. Subtenant shall not
violate or permit the violation of any of the terms, covenants and conditions of
the Lease including, but not limited to, the Building Rules and Regulations. The
principal terms and conditions of the Sublease set forth above in the agreement
shall not be modified without the prior written consent of Landlord. If Tenant
shall terminate or shall give any notice to Subtenant terminating the Sublease,
Tenant shall notify Landlord thereof promptly thereafter. Any notices, demands,
requests or other communications given or required to be given under this letter
agreement shall be effective only if given in writing, sent by registered or
certified mail (return receipt requested).
10. The parties agree that (a) Subtenant may deal directly with Landlord
and/or the manager of the Building with respect to repairs, maintenance,
overtime HVAC, porter activities and the like within the Sublet Space and, (b)
such items may (at Landlord's option) be billed directly from Landlord to
Subtenant provided, however, that (i) the cost of such items shall not exceed
$2,500 per request by Subtenant,
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<PAGE>
(ii) Tenant shall remain jointly and severally liable with Subtenant for the
payment of all such services to Landlord as additional rent under the Lease and
(iii) the performance or providing of such work or services, or the billing
therefor, directly to Subtenant shall not create, or be deemed to create, a
direct lease or any privity of estate or contract between Landlord and Subtenant
nor be deemed a recognition or consent by Landlord to the Sublease or
Subtenant's rights thereunder beyond those otherwise specifically covered in the
letter agreement nor modify, abrogate or change Tenant's agreements or
obligations under the Lease or Tenant's and Subtenant's agreements and
obligations under this letter agreement.
11. If any laws, orders, rules or regulations of any applicable
governmental authority require that any asbestos or other hazardous material
contained in or about the Sublet Space be dealt with in any particular manner in
connection with any change of the Sublet Space or otherwise, then it shall be
Subtenant's obligation, at Subtenant's expense, to deal with such asbestos or
any other hazardous material in accordance with all such laws, orders, rules and
regulations. In the event Subtenant is required to deal with asbestos or other
hazardous material in accordance with the foregoing provisions of this
subparagraph, then, notwithstanding anything herein to the
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<PAGE>
contrary, Landlord, at Landlord's election, shall have the option to deal with
such asbestos or other hazardous material itself and, in such event, Subtenant
shall reimburse Landlord for all of Landlord's costs and expenses in connection
therewith within ten (10) days next following the rendition of a statement by
Landlord to Subtenant requesting such reimbursement. If Subtenant shall fail to
so reimburse Landlord for the aforesaid costs and expenses within the ten (10)
day period referred to above, then notwithstanding anything contained in the
Lease to the contrary, such costs and expenses shall, at Landlord's option, be
paid by Tenant to Landlord, within ten (10) days next following of Landlord's
demand therefor.
12. In the event that there shall be any conflict between the terms,
covenants and conditions of this letter agreement and the terms, covenants and
conditions of the Sublease, then the terms, covenants and conditions of this
letter agreement shall prevail in each instance, and any conflicting terms,
covenants or conditions of the Sublease shall be deemed modified to conform with
the terms, covenants and conditions of this agreement.
13. Tenant will pay Landlord a $1,000 administration fee to reimburse
Landlord for the time expended in reviewing and processing the request for
subletting the
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<PAGE>
Sublet Space at Tenant's execution hereof and will pay Landlord's legal fees
incurred in connection with the preparation of this letter agreement within five
(5) days after receipt of a bill therefor.
14. Except as herein expressly modified, the Lease is hereby ratified in
all aspects.
If this letter agreement accurately reflects your understanding and
agreement as to the matters hereinabove set forth, please sign this letter
agreement and have Subtenant sign this letter agreement where indicated below
and return six (6) executed copies to the undersigned.
Very truly yours,
61 BROADWAY ASSOCIATES, Landlord
By: 61 PT Realty Corporation
By: /s/ [ILLEGIBLE]
----------------------------
Vice President
Accepted and Agreed to this
_____ day of September, 1990
GKN Holdings Corp
- ----------------------------
(Subtenant)
By: /s/ Robert Gladstone
------------------------
Name: Robert Gladstone
Title: Managing Director
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<PAGE>
Accepted and Agreed to this
14 day of September, 1990.
Smith New Court Carl Marks, Inc.
- --------------------------------
(Tenant)
By: /s/ James Stevens
----------------------------
Name: James Stevens
Title: Executive Vice President
Chief Financial Officer
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<PAGE>
EXHIBIT A
Attach Copy of Sublease Agreement
<PAGE>
[PHOTO]
<PAGE>
61 BROADWAY ASSOCIATES
c/o The Galbreath Company
61 Broadway
New York, New York 10006
October 17, 1991
Smith New Court Carl Marks, Inc.
114 West 47 Street
New York, NY 10036
Re: Agreement of Lease dated as of January 15, 1986 as amended by the
Amendment to Agreement of Lease dated as of March 31, 1986 and the
Second Amendment to Agreement of Lease dated as of August 7, 1987
between Nineteen New York Properties Limited Partnership predecessor
in interest to 61 Broadway Associates ("Landlord") and Smith New Court
Carl Marks, Inc. ("Tenant"), covering premises (the "Demised
Premises") located at 61 Broadway, New York, New York (the Agreement
of Lease as so amended, the "Lease).
Gentlemen:
In accordance with your request, Landlord hereby grants permission to
Tenant to sublease a portion of the Demised Premises consisting of approximately
7,600 rentable square feet (the "Additional Space") as more particularly
described in a certain Amendment of Sublease (the "Amendment") dated the 15th
day of October, 1991, a copy of which Amendment is annexed hereto and made a
part hereof as Exhibit A to GKN Holdings Corp. ("Subtenant") for a term
commencing on the date hereof and ending on February 27, 1998 upon the following
terms and conditions:
1. Neither this letter agreement, nor the Amendment, nor any acceptance of
rent by Landlord from Subtenant, shall operate to waive, modify, release or in
any manner affect Tenant's liability under the Lease.
<PAGE>
2. All of the representations, covenants, terms and conditions of that
certain letter agreement dated September 13, 1990 among Tenant, Subtenant and
Landlord shall remain in full force and effect and shall be applicable to the
Additional Space and to the Amendment with the further proviso that all
representations contained therein or made by Tenant and Subtenant shall be
deemed restated and made as of the date hereof. Reference in the aforesaid
letter agreement to the Sublet space shall be deemed to include the Additional
Space and the term "Sublease" as contained therein shall be deemed to include
the Amendment of Sublease.
3. Tenant shall pay to Landlord Landlord's legal fees incurred in
connection with the preparation of this letter agreement within five (5) days
after receipt of a bill therefore.
The Lease, as amended is hereby ratified in all aspects.
Kindly sign this letter agreement and cause Subtenant to sign this letter
agreement where indicated below, thereby evidencing their and your agreement to
the foregoing.
Very truly yours,
61 BROADWAY ASSOCIATES, Landlord
By: 61 PT Realty Corporation
By: [ILLEGIBLE]
-----------------------------
V Pres
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<PAGE>
Agreed and accepted this
_____ day of October, 1991.
GKN HOLDINGS CORP.
By: [ILLEGIBLE]
------------------------
Agreed and accepted this
15 day of October, 1991.
SMITH NEW COURT CARL MARKS, INC.
By: /s/ James T. Stevens
----------------------------
Name: James T. Stevens
Title: Executive Vice President
Chief Financial Officer
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<PAGE>
AMENDMENT OF SUBLEASE
THIS AMENDMENT OF SUBLEASE (the "Agreement"), made as of this 15th day of
October, 1991, by and between SMITH NEW COURT CARL MARKS, INC. (successor in
interest to Smith New Court, Inc.), a New York corporation having an office at
114 West 47th Street, New York, New York 10036 ("Sublandlord") and GKN HOLDINGS,
CORP., a New York corporation having an office at 500 Fifth Avenue, Suite 2282,
New York, New York, 10110 ("Subtenant").
W I T N E S S E T H
WHEREAS, pursuant to an Agreement of Lease dated as of January 15, 1986 as
amended by the Amendment to Agreement of Lease (the "Amendment") dated as of
March 31, 1986 (the "First Amendment") and the Second Amendment to Agreement of
Lease dated as of August 7, 1987 (the "Second Amendment") (the Agreement of
Lease, as so amended, the "Overlease"), Nineteen New York Properties Limited
Partnership ("Overlandlord") leased to Sublandlord a portion of the twelfth
(12th) floor in the building located at 61 Broadway, New York, New York (the
"Building"); and
WHEREAS, Sublandlord and Subtenant entered into an Agreement of Sublease,
dated as of August 27, 1990 (as hereby amended, the "Sublease""), pursuant to
which Sublandlord sublet to Subtenant a portion of the twelfth (12th) floor in
the Building; and
WHEREAS, Subtenant desires to sublet, from Sublandlord, the remainder of
the twelfth (12th) floor of the Building comprising approximately 7,600 rentable
square feet of floor, as more particularly shown, on the floor plan annexed
hereto as "Exhibit A" (the "Additional Space"), and Sublandlord desires to
sublet, to Subtenant, such space; and
WHEREAS, Sublandlord is agreeable to such subletting on the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
<PAGE>
1. Definitions. All capitalized terms used herein which are not otherwise
defined shall have the meanings ascribed to them in the Sublease.
2. Premises. Upon approval by Overlandlord, the Additional Space shall be
added to, and thereafter included in, the Premises for a term commencing on such
date and ending on February 27, 1998. For purposes hereof, Sublandlord and
Subtenant conclusively agree that the rentable square footage of the Additional
Space shall be Seven Thousand Six Hundred (7,600) rentable square feet.
3. Base Rent. From and after December 15, 1991 (the "Additional Rent
Commencement Date"), the Base Rent payable under the Sublease shall be increased
by an amount equal to the base rent payable with respect to the Additional Space
(the "Additional Space Base Rent"). The Additional Space Base Rent shall be
equal to an annual rate of (i) One Hundred Twenty Eight Thousand and Sixty
Dollars ($128,060.00) for the period commencing on the Additional Rent
Commencement Date and ending on February 28, 1994; and (ii) One Hundred Fifty
Thousand Eight Hundred Sixty Dollars ($150,860.00) for the period commencing on
March 1, 1994 and ending on the Expiration Date.
4. Additional Rent. From and after the Additional Rent Commencement Date,
but only with respect to the Additional Space, Subtenant shall pay to
Sublandlord, within three business days after receiving a bill therefor (which
bill shall include a copy of Overlandlord's bill to Sublandlord with respect to
items (i), (ii) and (iii) below) (appropriately redacted as it relates to Base
Rent), as "Additional Rents", from and after the Additional Rent Commencement
Date:
(i) One Hundred percent (100%) of any payments on account of
Taxes (as defined in the Overlease) payable by Sublandlord to
Overlandlord under Article 28 of the Overlease, provided that for
purposes of this Agreement, the subtenant's share of any Taxes shall
be calculated as if Base Tax Year shall mean 1992 (an average of
1991/1992 and 1992/1993 fiscal years);
(ii) One Hundred percent (100%) of any payments on account
of Operating Expenses (as defined in the Overlease) payable by
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Sublandlord to Overlandlord under Article 28 of the Overlease,
provided that for purposes of this Agreement, the subtenant's share of
any Operating Expenses shall be calculated as if the Base Expense Year
(as defined in the Overlease) refers to 1992. All payments made by
Subtenant to Sublandlord shall be subject to reconciliation as
provided for in Article 28 of the Overlease.
(iii) A separate meter shall measure the consumption of
electrical energy in the Additional Space and Subtenant shall pay for
the consumption of electrical energy on the basis of Overlandlord's
average cost of electricity for the Building per KWH (determined in
accordance with the Overlease) plus an additional eight percent (8%)
thereof to reimburse Sublandlord for overhead and supervision payable
by Sublandlord to Overlandlord under the Overlease, as described in,
and as may be adjusted from time to time pursuant to, Article 29.
5. Subletting and Assignment. Subject to Paragraph 11 of the Sublease,
Subtenant shall have the right to sublease or assign a portion or all of the
Additional Space and/or the Premises.
6. Brokerage. Sublandlord and Subtenant represent to each other that in the
negotiation of this Agreement they have dealt with no brokers other than Cushman
& Wakefield, Inc. and Galbreath Company (collectively, the "Brokers"), and that
no conversations or negotiations were had with any broker except the Brokers
concerning the subletting of the Additional Space. Sublandlord and Subtenant
each agree to hold the other harmless against any claims for a brokerage
commission arising out of any conversations or negotiations had by either with
any broker other than the Brokers. Sublandlord shall be responsible for any
commission payable to the Brokers in connection with this Agreement pursuant to
separate agreements between Sublandlord and the Brokers.
7. Guarantee. GKN Securities Corp. has agreed to guarantee to Sublandlord
the performance of the obligations of Subtenant under this Agreement and under
the Sublease.
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8. Conflicts. If and to the extent that any of the provisions of this
Agreement conflict with or are otherwise inconsistent with any of the provisions
of the Sublease, whether or not such inconsistency is expressly noted in this
Agreement, the provisions of this Agreement shall prevail.
9. No Modifications. Except as modified by this Agreement, all covenants,
agreements, terms and conditions of the Sublease shall remain in full force and
effect and are hereby in all respects ratified and confirmed.
10. Binding on Successors and Assigns. The covenants, agreements, terms and
conditions contained in this Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors (except as otherwise provided
in the Sublease) and their respective assigns.
11. Amendments. This Agreement may not be changed orally, but only by
agreement, in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
12. Reference to Sublease. Except as amended hereby, the Sublease remains
in full force and effect and all future references to the Sublease shall mean
and refer to the Sublease as amended and modified by this Agreement.
13. Consent of Overlandlord. This Agreement shall be of no force or effect
unless and until consented to by the Overlandlord.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SMITH NEW COURT CARL MARKS, INC.
By: /s/ James T. Stevens
----------------------------
GKN HOLDINGS CORP.
By: /s/ David M. Nussbaum
----------------------------
As to Paragraph 7
GKN SECURITIES, CORP.
By: /s/ David M. Nussbaum
----------------------------
AGREED TO AND ACCEPTED BY:
NINETEEN NEW YORK PROPERTIES
LIMITED PARTNERSHIP
By:_________________________
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61 Broadway
12th Floor
GKN Expansion Space
7,600 RSF
Area C
<PAGE>
Smith New Court
Carl Marks, Inc.
114 West 47th Street
New York, New York 10036
October 4, 1991
GKN Holdings Corp.
500 Fifth Avenue
Suite 2282
New York, New York 10110
Re: Amendment of Sublease dated on
even date hereof by and between
Smith New Court Carl Marks, Inc.,
as Sublandlord ("Sublandlord"), and
GKN Holdings, Corp., as Subtenant
Subtenant") (the "Agreement")
Reference is hereby made to (i) that certain Agreement of Lease dated as of
January 15, 1986 as amended by the Amendment to Agreement of Lease (the
"Amendment") dated as of March 31, 1986 (the "First Amendment") and the Second
Amendment to Agreement of Lease dated as of August 7, 1987 (the "Second
Amendment") (the Agreement of Lease, as so amended, the "Overlease") and (ii)
that certain Sublease dated as of August 27, 1990 (as amended by the Agreement,
the "Sublease"). All capitalized terms used herein shall have the meanings
ascribed to them in the Sublease.
In consideration of the execution of the Agreement this letter shall
confirm our understanding and agreement that:
1. Subtenant shall make any and all necessary or desired Alterations to the
Additional Space, in accordance with the requirements of Article 3 of the
Overlease and Paragraph 7 of the Sublease.
2. Sublandlord shall reimburse Subtenant for the cost and expense Subtenant
may reasonably incur in connection with such Alterations, provided, however,
that in no event shall the Sublandlord be responsible for the
<PAGE>
GKN Holdings Corp
October 4, 1991
Page Two
cost of such Alterations in excess of one hundred thousand dollars ($100,000.00)
(the "Reimbursement").
3. Sublandlord shall credit the Reimbursement against Subtenant's Base Rent
for the calendar month immediately following Sublandlord's receipt from
Subtenant of (i) a written request for such credit from Subtenant, and (ii)
copies of all receipts, bills and invoices (collectively, the "Bills") which
have been submitted by contractors to Subtenant in connection with the
Alterations.
4. Sublandlord shall use reasonable efforts to cause Overlandlord to comply
with the terms of Article 41(C)(i) of the Overlease.
This letter agreement may be executed in one or more counterparts, and each
counterpart will, for all such purposed be deemed an original instrument, but
all such counterparts together will constitute but one and the same instrument.
Sublandlord acknowledges that Subtenant is not in default under the terms
of the Sublease.
Please indicate you agreement to the provisions contained herein by
executing a counterpart of this letter agreement where indicated below and
returning the same to the undersigned.
SMITH NEW COURT,
CARL MARKS, INC.
By: [ILLEGIBLE]
-----------------------
Accepted and agreement to
this day
of October, 1991
GKN HOLDINGS CORP, INC.
By: [ILLEGIBLE]
----------------------------
<PAGE>
[Letterhead of ILLEGBILE]
October 24, 1990
Mr. Lester Rosenkrantz
VFS Rosenkrantz Securities
Vantage International
Raritan Plaza III, Raritan
Edison, NJ 08837
Re: Sublease agreement between
GKN Holding Corporation and
VFS Rosenkrantz Securities Corporation.
Dear Mr. Rosenkrantz:
This letter shall act to set forth the understanding between GKN Holding
Corporation (the "Sublandlord") and VFS Rosenkrantz Securities Corporation (the
"Subtenant") whereas Sublandlord and Subtenant agreement (the "Sublease")
covering Suite 2822 (the "Premises") in the building commonly known as 500 Fifth
Avenue, New York, NY (the "Building). Pursuant to above, the parties hereto for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, covenant and agree as follows:
1. The term of the Sublease shall be twelve months, commencing on November
1, 1990 and ending on October 30, 1991 and ending on October 30, 1991 (the
"Expiration Date").
2. The annual rental pursuant to the Sublease shall be $90,000, payable as
follows:
a. Seven thousand and 00/100 ($7,000.00) Dollars per month beginning
November 1, 1990 and ending April 30, 1991;
b. Eight thousand and 00/100 ($8,000.00) Dollars per month beginning
May 1, 1991 and ending on the Expiration Date.
3. The rental payments pursuant to item 2 above shall be paid directly to
500 Fifth Associates (the "Landlord") and Subtenants obligations to so pay rent
shall not cease upon payment of rent to Sublandlord.
4. Subtenant shall be required to pay $7,000.00 to Landlord
<PAGE>
upon execution of this agreement which sum shall be held by Landlord as a
security deposit for the full and faithful compliance of this agreement and the
underlying lease. Notwithstanding anything herein to the contrary, Landlord
shall have the right to apply the security deposit upon the default of the
Subtenant and/or the Sublandlord.
5. Subtenant acknowledges receipt of the underlying lease and agrees to
abide by all applicable terms and provisions therein.
6. Subtenant agrees to be responsible for all ongoing expenses with respect
to plumbing, electrical and HVAC or any other expense incurred by Subtenant in
the ordinary course of doing business.
7. Sublandlord agrees to pay any and all commissions or other costs
involved with this Sublease. Landlord shall have no responsibility nor incur any
costs, expenses or any other obligations of any sort arising out of or in
relation to this Sublease.
8. If for any reason the underlying lease between Landlord and Sublandlord
shall terminate prior to the Expiration Date, this Sublease shall terminate at
the same time and neither party shall have any further liability to the other.
Notwithstanding anything herein to the contrary, Subtenant shall be obligated to
pay rent up to and including the date of termination.
9. This sublease is subject to Landlord's consent and the premises may not
be further assigned or sublet unless specifically agreed to in writing by
Landlord.
IN WITNESS WHEREOF, Sublandlord and Subtenant have respectively executed
this agreement as of the day and year first above written.
GKN HOLDING CORPORATION
By: [ILLEGIBLE]
--------------------------------
VFS ROSENKRANTZ SECURITES CORPORATION
By: [ILLEGIBLE]
--------------------------------
2
<PAGE>
AGREEMENT OF SUBLEASE
AGREEMENT OF SUBLEASE (this "Sublease") made as of the _______ day of June,
1990 between SMITH NEW COURT CARL MARKS, INC. (successor in interest to Smith
New Court Inc.), a New York corporation having and office at 61 Broadway, New
York, New York 10006 (Sublandlord") and GKN HOLDING CORP., [ ] corporation
having an office at ________________, ________________ ("Subtenant").
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement of Lease dated as of January 15, 1986 as
amended by the Amendment To Agreement of Lease (the "Amendment") dated as of
March 31, 1986 (the "First Amendment") and the Second Amendment to Agreement of
Lease dated as of August 7, 1987 (the "Second Amendment") (the Agreement of
Lease, as so amended, the "Overlease"), a copy of which is attached hereto,
Nineteen New York Properties Limited Partnership (Overlandlord") leased to
Sublandlord a portion of the twelfth (12th) floor as more particular described
in the Overlease (the "Premises") in the building located at 61 Broadway, New
York, New York (the "Building"); and
WHEREAS, Sublandlord desires to sublet to Subtenant and Subtenant desires
to hire from Sublandlord, a portion of the Premises comprising approximately
8,733 rentable square feet of floor area as shown cross-hatched on the floor
plan annexed hereto as Exhibit A ("Sublet Space A") and a portion of the
Premises comprising approximately 2000 rentable square feet of floor area as
shown cross-hatched on the floor plan annexed hereto as Exhibit B ("Sublet Space
B", and together with Sublet Space A, the "Sublet Space").
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Sublandlord hereby subleases to Subtenant and Subtenant hereby hires
from Sublandlord the Sublet Space, subject to the Overlease and all ground,
underlying or superior leases and mortgages to which the Overlease is or may
hereafter be subject and
<PAGE>
subordinate and upon the rentals, terms, covenants, conditions and provisions
herein set forth.
2. All Article and Section references contained herein are references to
Articles and Sections in the Overlease, except as otherwise specifically
provided herein. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Overlease.
3. Subtenant shall use the Sublet Space for the Permitted Uses and for no
other purpose.
4. The term of the Sublease (the "Term") shall commence on the date (the
Commencement Date") which is the day Sublandlord notifies Subtenant the
Overlandlord has granted its consent (the "Consent") to this Sublease in
accordance with the terms of the Overlease and this Sublease and shall expire on
February 27, 1998 (the "Expiration Date"), unless sooner terminated pursuant to
any provision hereof. Sublandlord shall notify Subtenant promptly after
Landlord's consent is granted or denied. At either party's request, the other
party shall within 5 (five) business days after such request is made enter into
an agreement in form reasonably satisfactory to both parties, setting forth the
Commencement Date, but not such agreement shall be necessary to effectuate the
Commencement Date.
5. A. Throughout the Term, Subtenant shall pay to Sublandlord, without
abatement, deduction or setoff of any amount whatsoever (except as otherwise
expressly set forth herein), in lawful money of the United Stated of America, by
check drawn to Sublandlord's order on a bank which is a member of the New York
Clearinghouse Association, at Sublandlord's address set forth above, or at such
other place as Sublandlord may designate, (i) base rent for Sublet Space A
("Base Rent A") at an annual rate equal to (a) One Hundred Eighty-Three Thousand
Three Hundred and Ninety three Dollars ($183,393.00) (computed at the rate of
Twenty-One Dollars ($21) per rentable square foot multiplied by the rentable
square footage of Sublet Space A, which for all purposes hereof shall be deemed
to 8,733 rentable square feet) for the period from the date ("Rent Commencement
Date A" which is the one year anniversary day after the Commencement Date and
ending on February 28, 1994 and (b) Two Hundred Eighteen Thousand Three Hundred
Twenty-Five Dollars ($218,325.00) (computed at the rate of Twenty-Five Dollars
($25) per rentable square foot multiplied by the rentable square footage of
Sublet Space A) for the period from March 1, 1994 through the Expiration Date;
(ii) base rent ("Base Rent B", and together with Base Rent A, the Base Rent") at
an annual rate equal to Forty-Two Thousand Dollars ($42,000) (computed at the
rate
2
<PAGE>
of Twenty-One Dollars ($21.00) per rentable square footage of Sublet Space B,
which for all purposes hereof shall be deemed 2,000 rentable square feet) for
the period from the date ("Rent Commencement Date B" which is the eighteenth
month anniversary day after the Commencement Date and through the Commencement
Date and through the Expiration Date; and (iii) Additional Rent (as defined
below) as hereinafter provided. The term "rent" as used in this Sublease shall
include Base Rent and Additional Rent.
B. Base Rent shall be payable in equal monthly installments, in advance on
the first day of each and every month commencing with the month in which the
applicable Rent Commencement Date occurs, without setoff or deduction (except as
otherwise expressly set forth herein). If the Rent Commencement Date occurs on a
day other than the first day of a calendar month, or if the Term shall terminate
on a day other than the last day of a calendar month, a proportional per diem
reduction in the first or last, as the case may be, installment of Base Rent
shall be made. On the Rent Commencement Date, Subtenant shall deliver to
Sublandlord payment of the Base Rent payable for the month in which the Rent
Commencement Date occurs.
C. Subtenant shall pay to Sublandlord, within three business days after
receiving a bill therefor (which bill shall) include a copy of Overlandlord's
bill to Sublandlord with respect to items (i), (ii), (iii), (iv) and (v) below
(approximately redacted insofar as it relates to Base Rent), as "Additional
Rents", from and after the Commencement Date:
(i) Subtenant's Share (as hereinafter defined) of any payments on
account of Taxes (as defined in the Overlease) payable by Sublandlord to
Overlandlord under Article 28 of the Overlease, provided that for purposes of
the subparagraph (i) the Subtenant's Share of any Taxes shall be calculated as
if Base Tax year (as defined in the Overlease) refers to the real estate fiscal
tax year of the City of New York commencing on July 1, 1990 and ending on June
30, 1991;
(ii) Subtenant's Share of any payments on account of Operating
Expenses (as defined in the Overlease) payable by Sublandlord to Overlandlord
under Article 28 of the Overlease, provided that for purposes of this
subparagraph (ii), the Subtenant's Share of any Operating Expenses shall be
calculated as if the Base Expense Year (as defined in the Overlease) refers to
the average of the twelve month periods for the years 1990 and 1991.
(iii) If a separate meter shall measure the consumption of electrical
energy in the Sublet Space (and no other
3
<PAGE>
IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this
Sublease as of the day any year first above written.
SMITH NEW COURT CARL MARKS INC.
By: ___________________________
GKN
By: ___________________________
21
<PAGE>
61 BROADWAY ASSOCIATES
c/o the Galbreath Company
61 Broadway
New York, New York 10006
October 17, 1991
Smith New Court Carl Marks, inc.
114 West 47 Street
New York NY 10036
Re: Agreement of Lease dated as of January 15, 1986 as amended by the
Amendment to Agreement dated as of March 31, 1986 and the Second
Amendment to Agreement of Lease dated as of August 7, 1987 between
Nineteen New York Properties Limited Partnership predecessor in
interest to 61 Broadway Associates ("Landlord") and Smith New Court
Marks, Inc. ("Tenant"), covering premises (the "Demised Premises")
located at 61 Broadway, New York, New York ( the Agreement of Lease as
so amended, the "Lease").
Gentlemen:
In accordance with your request, Landlord hereby grants permission to
Tenant to sublease a portion of the Demised Premises consisting of approximately
7,600 rentable square feet (the "Additional Space") as more particularly
described in a certain amendment of Sublease (the "Amendment") dated the 15th
day of October, 1991, a copy of which Amendment is annexed hereto and made a
part hereof as Exhibit A to GKN Holdings Corp. ("Subtenant") for a term
commencing as of the date hereof and ending on February 27, 1998 upon the
following terms and conditions:
1. Neither this letter agreement, nor the Amendment, nor any
acceptance of rent by Landlord from subtenant, shall operate to waive, modify,
release or in any manner affect Tenant's liability under the Lease.
<PAGE>
2. All of the representatives, covenants, terms and conditions of that
certain letter agreement dated September 13, 1990 among Tenant, Subtenant and
Landlord shall remain in full force and effect and shall be applicable to the
Additional Space and to the Amendment with the further proviso that all
representations contained therein or made by Tenant and Subtenant shall be
deemed restated and made as of the date hereof. Reference in the aforesaid
letter agreement to the Sublet space shall be deemed to include the Additional
Space and the term "Sublease' as contained therein shall be deemed to include
the Amendment of Sublease.
3. Tenant shall pay to Landlord Landlord's legal fees incurred in
connection with the preparation of this letter agreement within five (5) days
after receipt of a bill therefore.
The Lease, as amended is hereby ratified in all respects.
Kindly sign this letter agreement and cause Subtenant to sign this
letter agreement where indicated below, thereby evidencing their and your
agreement to the foregoing.
Very truly yours,
61 BROADWAY ASSOCIATES, Landlord
By: 61 PT Realty Corporation
By: [ILLEGIBLE]
-------------------------
V. Pres.
2
<PAGE>
Agreed and accepted this
________ day of October, 1991
GKN HOLDINGS CORP.
By: [ILLEGIBLE]
--------------------------
Agreed and accepted this
15 day of October, 1991.
SMITH NEW COURT CARL MARKS, INC.
By: /s/ James T. Stevens
--------------------------
Name James T. Stevens
Title Executive Vice President
Chief Financial Officer
3
<PAGE>
AMENDMENT OF SUBLEASE
THIS AMENDMENT OF SUBLEASE (the "Agreement") made as of this 15th day of
October, 1991, by and between SMITH NEW COURT CARL MARKS, INC. (successor in
interest to Smith New Court, Inc.), a New York corporation having an office at
114 West 47th Street, New York, New York 10036 ("Sublandlord") and GKN HOLDINGS,
CORP., a New York corporation having an office at 500 Fifth Avenue, Suite 2282,
New York, New York 10110 (Subtenant").
W I T N E S S E T H
WHEREAS, pursuant to an Agreement of Lease dated as of January 15, 1986 as
amended by the Amendment to Agreement of Lease (the "Amendment) dated as of
March 31, 1986 (the "First Amendment") and the Second Amendment to Agreement of
Lease dated as of August 7, 1987 (the "Second Amendment") (the Agreement of
Lease, as so amended, the "Overlease"), Nineteen New York Properties Limited
Partnership ("Overlandlord") leased to Sublandlord a portion of the twelfth
(12th) floor in the building located at 61 Broadway, New York, New York (the
"Building); and
WHEREAS, Sublandlord and Subtenant entered into an Agreement of Sublease,
dated as of August 27, 1990 (as hereby amended, the "Sublease"), pursuant to
which Sublandlord sublet to Subtenant a portion of the twelfth (12th) floor in
the Building; and
WHEREAS, Subtenant desires to sublet, from Sublandlord, the remainder of
the twelfth (12th) floor of the Building comprising approximately 7,600 rentable
square feet of floor, as more particularly shown, on the floor plan annexed
hereto as "Exhibit A" (the "Additional Space"), and Sublandlord desires to
sublet, to Subtenant such space; and
WHEREAS, Sublandlord is agreeable to such subletting on the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
<PAGE>
1. Definitions. All capitalized terms used herein which are not otherwise
defined shall have the meaning ascribed to them in the Sublease.
2. Premises. Upon approval by Overlandlord, the Additional Space shall be
added to, and thereafter included in, the Premises for a term commencing on such
date and ending on February 27, 1998. For purposes hereof, Sublandlord and
Subtenant conclusively agree that the rentable square footage of the Additional
Space shall be Seven Thousand Six Hundred (7,600) rentable square feet.
3. Base Rent. From and after December 15, 1991 (the "Additional Rent
Commencement Date"), the Base Rent payable under the Sublease shall be increased
by an amount to the base rent payable with respect to the Additional Space (the
"Additional Space Base Rent"). The Additional Space Base Rent shall be equal to
an annual rate of (i) One Hundred Twenty Eight Thousand and Sixty Dollars
($128,060.00) for the period commencing on the Additional Rent Commencement Date
and ending on February 28, 1994 and (ii) One Hundred Fifty Thousand Eight
Hundred Sixty dollars ($150,860.00) for the period commencing on March 1, 1994
and ending on the Expiration Date.
4. Additional Rent. From and after the Additional Rent Commencement Date,
but only with respect to the Additional Space, Subtenant shall pay to
Sublandlord, within three business days after receiving a bill therefor (which
bill shall include a copy of Overlandlord's bill to Sublandlord with respect to
items (i), (ii) and (iii) below) (approximately redacted as it relates to Base
Rent), as "Additional Rents", from and after the Additional Rent Commencement
Date:
(i) One Hundred percent (100%) of any payments on account of Taxes (as
defined in the Overlease) payable by Sublandlord to Overlandlord under
Article 28 of the Overlease, provided that for purposes of this Agreement,
the subtenant's share of any Taxes shall be calculated as if Base Tax Year
shall mean 1992 (an average of 1991/1992 and 1992/1993 fiscal years);
(ii) One Hundred percent (100%) of any payments of account of
Operating Expenses (as defined in the Overlease) payable by
2
<PAGE>
Sublandlord to Overlandlord under Article 28 of the Overlease, provided
that for purposes of this Agreement, the subtenant's share of any Operating
Expenses shall be calculated as if the Base Expense Year (as defined in the
Overlease) refers to 1992. All payments made by Subtenant to Sublandlord
shall be subject to reconciliation as provided for in Article 28 the
Overlease.
(iii) A separate meter shall measure the consumption of electrical
energy in the Additional Space and Subtenant shall pay for the consumption
of electrical energy on the basis of Overlandlord's average cost of
electricity for the Building per KWH (determined in accordance with the
Overlease) plus an additional eight percent (8%) thereof to reimburse
Sublandlord for overhead and supervision payable by Sublandlord to
Overlandlord under the Overlease, as described in, and as may be adjusted
from time to time pursuant to, Article 29.
5. Subletting and Assignment . Subject to Paragraph 11 of the Sublease,
Subtenant shall have the right to sublease or assign a portion or all of the
Additional Space and/or the Premises.
6. Brokerage. Sublandlord and Subtenant represent to each other that in the
negotiation of this Agreement they have dealt with no brokers other than Cushman
& Wakefield, Inc. and Galbreath Company (collectively, the "Brokers"), and that
no conversations or negotiations were had with any broker except the Brokers
concerning the subletting of the Additional Space. Sublandlord and Subtenant
each agree to hold the other harmless against any claims for a brokerage
commission arising out of any conversations or negotiations had by either with
any broker other than the Brokers. Sublandlord shall be responsible for any
commission payable to the Brokers in connection with the Agreement pursuant to
separate agreements between Sublandlord and the Brokers.
7. Guarantee. GKN Securities Corp. has agreed to guarantee to Sublandlord
the performance of the obligations of Subtenant under this Agreement and under
the Sublease.
3
<PAGE>
8. Conflicts. If and to the extent that any of the provisions of this
Agreement conflict with or are otherwise inconsistent with any of the provisions
of the Sublease, whether or not such inconsistency is expressly noted in this
Agreement, the provisions of this Agreement shall prevail.
9. No Modifications. Except as modified by this Agreement, all covenants,
agreements, terms and conditions of the Sublease shall remain in full force and
effect and are hereby in all respects ratified and confirmed.
10. Binding on successors and Assigns. The covenants, agreements, terms and
conditions contained in this Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors (except as otherwise provided
in the Sublease) and their respective assigns.
11. Amendments. This Agreement may not be changed orally, but only by
agreement, in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
12. Reference to Sublease. Except as amended hereby, the Sublease remains
in full force and effect and all future reference to the Sublease shall mean and
refer to the Sublease as amended and modified by this Agreement.
13. Consent of Overlandlord. This Agreement shall be of no force or effect
unless and until consented to by the Overlandlord.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SMITH NEW COURT CARL MARKS, INC.
By: [ILLEGIBLE]
---------------------------------
GKN HOLDINGS CORP.
By: [ILLEGIBLE]
---------------------------------
As to Paragraph 7
GKN SECURITIES, CORP.
By: [ILLEGIBLE]
---------------------------------
AGREED TO AND ACCEPTED BY:
NINETEEN NEW YORK PROPERTIES
LIMITED PARTNERSHIP
By: ___________________________
5
<PAGE>
[EXHIBIT A]
[GKN Expansion Space Floor Plan]
<PAGE>
Smith New Court
Carl Marks, Inc.
114 West 47th Street
New York, New York 10036
October 4, 1991
GKN Holdings Corp
500 fifth Avenue
Suite 2282
New York, New York 10110
Re: Amendment of Sublease dated on even date hereof by and between Smith
New Court Carl Marks, Inc., as Sublandlord ("Sublandlord") and GKN
Holdings, Corp., as Subtenant ("Subtenant") (the "Agreement")
Reference is hereby made to (i) that certain Agreement of Lease dated as of
January 15, 1986 as amended by the Amendment to Agreement of Lease (the
"Amendment") dated as of March 31, 1986 (the "First Amendment") and the Second
Amendment to Agreement of Lease dated as of August 7, 1987 (the "Second
Amendment") (the Agreement of Lease, as so amended, the "Overlease") and (ii)
that certain Sublease dated as of August 27, 1990 (as amended by the Agreement,
the "Sublease"). All capitalized terms used herein shall have the meaning
ascribed to them in the Sublease.
In consideration of the execution of the Agreement this letter shall
confirm our understanding and agreement that:
1. Subtenant shall make any and all necessary or desired Alteration to the
Additional Space, in accordance with the requirements of Article 3 of the
Overlease and Paragraph 7 of the Sublease.
2. Sublandlord shall reimburse Subtenant for the cost and expense subtenant
may reasonably incur in connection with such Alterations, provided, however,
that in no event shall the Sublandlord be responsible for the
<PAGE>
GKN Holdings Corp
October 4, 1991
Page Two
cost of such Alterations in excess of one hundred thousand dollars ($100,000.00)
(the "Reimbursement").
3. Sublandlord shall credit the Reimbursement against Subtenant's Base Rent
for the calendar month immediately following Sublandlord's receipt from
Subtenant of (i) a written request for such credit from Subtenant, and (ii)
copies of all receipts, bills and invoices (collectively, the "Bills") which
have been submitted by contractors to Subtenant in connection with the
Alterations.
4. Sublandlord shall use reasonable efforts to cause Overlandlord to comply
with the terms of Article 41(C)(i) of the Overlease.
This letter agreement may be executed in one of more counterparts, and each
counterpart will, for all such purposes be deemed an original instrument, but
all such counterparts together will constitute but one and the same instrument.
Sublandlord acknowledges that Subtenant is not in default under the terms
of the Sublease.
Please indicate your agreement to the provisions contained herein by
executing a counterpart of this letter agreement where indicated below and
returning the same to the undersigned.
SMITH NEW COURT
CARL MARKS, INC.
By: [ILLEGIBLE]
--------------------------
Accepted and agreed to
this day
of October, 1991
GKN HOLDINGS CORP, INC.
By: [ILLEGIBLE]
-------------------------------
<PAGE>
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK 10022-3897
(212) 735-3000
FAX: (212) 735-2000 BOSTON
BRUSSELS
DIRECT DIAL CHICAGO
HONG KONG
LONDON
LOS ANGELES
SAN FRANSISCO
SYDNEY
TOKYO
TORONTO
WASHINGTON D.C.
WILMINGTON
September 13, 1990
By Hand
Mr. David K. Nussbaum
GKN Holdings Corp.
500 Fifth Avenue
Suite 2822
New York, New York 10110
Re: Sublease between Smith New Court, Carl Marks, Inc., as Sublandlord,
and GKN Holdings, Inc., as Subtenant.
Dear David:
At Roger Roisman's request, enclosed herein please find five (5) execution
copies of the Consent to Sublease. After execution please deliver the documents
to Cushman and Wakefield, Inc., 100 Wall Street, New York, New York 10005;
Attention: Mr. Robert Lowe.
Very truly yours
/s/ Andrew J. Bernstein
Andrew J. Bernstein
<PAGE>
SPINOFF DOCUMENT 0130X
88690-1
61 BROADWAY ASSOCIATES
c/o The Galbreath Company
61 Broadway
New York, New York 10006
September 13, 1990
Smith New Court Carl Marks, Inc.
61 Broadway
New York, New York 10006
Re: Lease dated January 15, 1986 between Nineteen New York Properties
Limited Partnership successor in interest to 61 Broadway ("Landlord"),
and Smith New Court Inc., predecessor in interest to Smith New Court
Carl Marks, Inc. ("Tenant"), covering a portion of the twelfth (12th)
floor (the "Premises") in the building known as 61 Broadway, New York,
New York (the "Building"). (Said lease as amended is referred to
herein as the "Lease".)
Gentlemen:
In accordance with your request, Landlord hereby grants permission to
Tenant to sublease a portion of the Premises (the "Sublet Space") pursuant to an
agreement dated August 27, 1990 (the "Sublease Agreement"), between Tenant and
GKN Holdings Corp (the "Subtenant"), a copy of which Sublease Agreement is
annexed hereto and made a part hereof as Exhibit A,
<PAGE>
for a term commencing on about October 1, 1990, and ending on February 27, 1998,
which subletting, however, shall be subject to the following terms and
conditions:
1. Neither this letter agreement, nor the Sublease, nor any acceptance of
rent by Landlord from Subtenant, shall operate to waive, modify, release or in
any manner affect Tenant's liability under the Lease. No other sublease of all
or of any part of the Premises affected by the Lease shall be made by Tenant
without the prior written approval of Landlord, except as provided in the Lease.
2. Tenant and Subtenant represent and warrant that no rent or other
consideration is being paid or is payable to Tenant by Subtenant for the right
to use or occupy the Sublet Space or for the use, sale or rental of Tenant's
fixtures, leasehold improvements, equipment, furniture or other personal
property in excess of the pro rata portion of the rent for the Sublet Space now
being paid by Tenant to Landlord pursuant to the terms of the Lease, and Tenant
and Subtenant represent and warrant that the Sublease is the complete, true and
correct agreement between the parties. If such rent or other consideration
exceeds such pro rata portion of the rent, Tenant shall pay to Landlord such
excess in accordance with, and subject to, the provisions of the Lease.
3. Subtenant will use and occupy the Sublet Space for executive offices
relating to Subtenant's business;
2
<PAGE>
Subtenant shall not use or occupy, or permit the use or occupancy of, the
Sublet Space or any part thereof, for any purpose other than the purpose
specifically set forth above in this sentence, or in any manner which, in
Landlord's judgment, shall adversely affect or interfere with any services
required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the building, or with the proper and economical rendition of any
such service, or with the use or enjoyment of any part of the Building by any
other tenant or occupant. No alternations shall be made by Tenant or Subtenant
in the Sublet Space without the prior written consent of Landlord, except as
provided in the Lease.
4. If, at any time prior to the expiration of the term of the Sublease, the
term of the Lease shall terminate or be terminated as a result of any default
under the Lease or by operation of law, the Sublease and the term granted
thereby shall terminate, and, on or prior to the date of such termination of the
Sublease, Subtenant, at Subtenant's sole cost and expense, (i) shall quit and
surrender the Sublet Space to Landlord, broom clean and in good order and
condition, ordinary wear excepted, and (ii) shall repair all damage to the
Sublet Space occasioned by such removal. Landlord shall have the right to retain
any property and effects which shall remain in the Sublet Space after such
termination, and any net proceeds from
3
<PAGE>
the sale thereof, without waiving Landlord's rights with respect to any default
by Subtenant under the foregoing provisions of this paragraph. Subtenant
expressly waives, for itself and for any person claiming through or under
Subtenant, any rights which Subtenant or any such person may have under the
provisions of Section 2201 of the New York Civil Practice Law and Rules and of
any successor law of like import then in force, in connection with any holdover
summary proceedings which Landlord may institute to enforce the foregoing
provisions of this paragraph. If the date of such termination shall fall on a
Sunday or holiday, then Subtenant's obligations under the first sentence of this
paragraph shall be performed on or prior to the Saturday or business day
immediately preceding such Sunday or holiday. Subtenant's obligations under this
paragraph shall survive the expiration or sooner termination of the terms of the
Lease and the Sublease. Notwithstanding the foregoing provisions of this
paragraph, in the event that Subtenant shall be required to attorn pursuant to
the provisions of paragraph 5 of this letter agreement, the foregoing provisions
of this paragraph shall have no force or effect.
5. If, at any time prior to the expiration of the term of the Sublease, the
term of the Lease shall terminate or be terminated for any reason, Subtenant
agrees, at the election and upon demand of Landlord or any other owner of the
real
4
<PAGE>
property, or of the holder of any mortgage in possession of the real property or
the Building, or of any lessee under the lease to which the Sublease shall be
subject and subordinate, to attorn, from time to time, to Landlord or any such
owner, holder or lessee, upon the then executory terms and conditions set forth
in the Sublease for the remainder of the term demised in the Sublease, provided
that Landlord or such owner, holder or lessee, as the case may be, shall then be
entitled to possession of the Sublet Space. The foregoing provisions of this
paragraph shall ensure to the benefit of any such owner, holder or lessee, shall
apply notwithstanding that, as a matter of law, the Sublease may terminate upon
the termination of the Lease, shall be self-operative upon any such demand, and
no further instrument shall be required to give effect to said provisions. Upon
demand of Landlord or any such owner, holder or lessee, Subtenant agrees,
however, to execute, from time to time, instruments in confirmation of the
foregoing provisions of this paragraph, satisfactory to Landlord or any such
owner, holder or lessee, in which Subtenant shall acknowledge such attornment
and shall set forth the terms and conditions of its tenancy. Nothing contained
in this paragraph shall be construed to impair any right otherwise exercisable
by Landlord or any such owner, holder or lessee. Upon request of Landlord or any
such owner, holder or lessee, whether or not made prior to such termination,
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<PAGE>
Tenant and Subtenant shall deliver an executed counterpart of the Sublease to
Landlord.
6. Subtenant shall obtain and maintain throughout the term of the Sublease,
in Subtenant's fire insurance policies covering Subtenant's property in the
Sublet Space, and Subtenant's use and occupancy of the Sublet Space (and shall
cause any other permitted occupants of the Sublet Space to obtain and maintain,
in similar policies), provisions to the effect that such policies shall not be
invalidated should the insured waive, in writing prior to a loss, any or all
right of recovery against any party for loss occasioned by fire or other
casualty which is an insured risk under such policies. In the event that at any
time the fire insurance carriers issuing such policies shall exact an additional
premium for the inclusion of such or similar provisions, Subtenant shall give
Landlord and Tenant notice thereof. In such event, Tenant shall reimburse
Subtenant for such additional premium for the remainder of the term of the
Sublease. As long as such or similar provisions are included in such fire
insurance policies then in force, Subtenant hereby waives (and agrees to cause
any other permitted occupants of the Sublet Space to execute and deliver to
Landlord written instruments waiving) any right of recovery against Landlord,
Tenant, any lessors under any ground or underlying leases, any other tenants and
occupants of the Building, and any
6
<PAGE>
servants, employees, agents or contractors of Landlord, Tenant or of any such
lessor, or of any such other tenants or occupants, for any loss occasioned by
fire or other casualty which is an insured risk under such policies. In the
event that at any time any such fire insurance carriers shall not include such
or similar provisions in any such fire insurance policy, the waiver set forth in
the foregoing sentence shall, upon notice given by Subtenant to Landlord and
Tenant, be deemed of no further force or effect from and after the giving of
such notice. During any period while the foregoing waiver of right of recovery
is in effect, Subtenant, or any other permitted occupant of the Sublet Space, as
the case may be, shall look solely to the proceeds of such policies to
compensate Subtenant or such other permitted occupants for any loss occasioned
by fire or other casualty which is an insured risk under such policies.
7. Subtenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns, covenants that,
without the prior consent of Landlord in each instance, it shall not (i) assign,
mortgage or encumber its interest in the Sublease, or (ii) sublet, or permit the
subletting of, the Sublet Space or any part thereof, or (iii) permit the Sublet
Space or any part thereof to be occupied, or
7
<PAGE>
used for desk space, mailing privileges or otherwise, by any person other than
Subtenant.
8. In the event Landlord shall grant its consent to any subletting or
assignment by Tenant or Subtenant, the form of the proposed sublease or
instrument of assignment (a) shall be in form reasonably satisfactory to
Landlord, and, without limitation, (I) shall not provide for a rental or other
payment for the use, occupancy or utilization of the space demised thereby based
in whole or in part on the income or profits derived by any person from the
property so leased, used, occupied or utilized other than an amount based on a
fixed percentage or percentages of gross receipts or sales and (II) shall
provide that no person having an interest in the possession, use, occupancy or
utilization of the space demised thereby shall enter into any lease, sublease,
license, concession or other agreement for use, occupancy or utilization of such
space which provides for a rental or other payment for such use, occupancy or
utilization in whole or in part on the income or profits derived by any person
from the property so leased, used, occupied or utilized other than an amount
based on a fixed percentage or percentages of gross receipts or sales, and that
any such purported lease, sublease, concession or other agreement shall be
absolutely void and ineffective ab initio and
8
<PAGE>
(b) such assignment or subletting shall comply with the applicable provisions of
Article 12 of the Lease.
9. The Sublease is subject and subordinate in all respects to the Lease and
to all of the terms, covenants and conditions thereof. Subtenant shall not
violate or permit the violation of any of the terms, covenants and conditions of
the Lease including, but not limited to, the Building Rules and Regulations. The
principal terms and conditions of the Sublease set forth above in this agreement
shall not be modified without the prior written consent of Landlord. If Tenant
shall terminate or shall give any notice to Subtenant terminating the Sublease,
Tenant shall notify Landlord thereof promptly thereafter. Any notices, demands,
requests or other communications given or required to be given under this letter
agreement shall be effective only if given in writing, sent by registered or
certified mail (return receipt requested).
10. The parties agree that (a) Subtenant may deal directly with Landlord
and/or the manager of the Building with respect to repairs, maintenance,
overtime HVAC, porter activities and the like within the Sublet Space and, (b)
such items may (at Landlord's option) be billed directly from Landlord to
Subtenant provided, however, that (i) the cost of such items shall not exceed
$2,500 per request by Subtenant,
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(ii) Tenant shall remain jointly and severally liable with Subtenant for the
payment of all such services to Landlord as additional rent under the Lease and
(iii) the performance or providing of such work or services, or the billing
therefor, directly to Subtenant shall not create, or be deemed to create, a
direct lease or any privity of estate or contract between Landlord and Subtenant
nor be deemed a recognition or consent by Landlord to the Sublease or
Subtenant's rights thereunder beyond those otherwise specifically covered in
this letter agreement nor modify, abrogate or change Tenant's agreements or
obligations under the Lease or Tenant's and Subtenant's agreements and
obligations under this letter agreement.
11. If any laws, orders, rules or regulations of any applicable
governmental authority require that any asbestos or other hazardous material
contained in or about the Sublet Space be dealt with in any particular manner in
connection with any change of the Sublet Space or otherwise, then it shall be
Subtenant's obligation, at Subtenant's expense, to deal with such asbestos or
any other hazardous material in accordance with all such laws, orders, rules and
regulations. In the event Subtenant is required to deal with asbestos or other
hazardous material in accordance with the foregoing provisions of this
subparagraph, then, notwithstanding anything herein to the
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<PAGE>
contrary, Landlord, at Landlord's election, shall have the option to deal with
such asbestos or other hazardous material itself and, in such event, Subtenant
shall reimburse Landlord for all of Landlord's costs and expenses in connection
therewith within ten (10) days next following the rendition of a statement by
Landlord to Subtenant requesting such reimbursement. If Subtenant shall fail to
so reimburse Landlord for the aforesaid costs and expenses within the ten (10)
day period referred to above, then notwithstanding anything contained in the
Lease to the contrary, such costs and expenses shall, at Landlord's option, be
paid by Tenant to Landlord, within ten (10) days next following of Landlord's
demand therefor.
12. In the event that there shall be any conflict between the terms,
covenants and conditions of this letter agreement and the terms, covenants and
conditions of the Sublease, then the terms, covenants and conditions of this
letter agreement shall prevail in each instance, and any conflicting terms,
covenants or conditions of the Sublease shall be deemed modified to conform with
the terms, covenants and conditions of this agreement.
13. Tenant will pay to Landlord a $1,000 administration fee to reimburse
Landlord for the time expended in reviewing and processing the request for
subletting the
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Sublet Space at Tenant's execution hereof and will pay Landlord's legal fees
incurred in connection with the preparation of this letter agreement within five
(5) days after receipt of a bill therefor.
14. Except as herein expressly modified, the Lease is hereby ratified in
all respects.
If this letter agreement accurately reflects your understanding and
agreement as to the matters hereinabove set forth, please sign this letter
agreement and have Subtenant sign this letter agreement where indicated below
and return six (6) executed copies to the undersigned.
Very truly yours,
61 BROADWAY ASSOCIATES, Landlord
By: 61 PT Realty Corporation
By:_____________________________
Vice President
Accepted and Agreed to this
_____ day of September, 1990.
GKN Holdings Corp
- ---------------------------------
(Subtenant)
By: /s/ Robert Gladstone
-----------------------------
Name Robert Gladstone
Title: Managing Director
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<PAGE>
Accepted and Agreed to this
_______ day of _____________, 1990.
Smith New Court Carl Marks, Inc.
- ------------------------------------
(Tenant)
By:_________________________________
Name_____________________________
Title:___________________________
13
<PAGE>
EXHIBIT A
Attach Copy of Sublease Agreement
<PAGE>
AGREEMENT OF LEASE
between
METROPOLITAN LIFE INSURANCE COMPANY,
Landlord
and
GKN SECURITIES CORP.,
Tenant
Dated: December 30, 1993
Premises:
61 Broadway
New York, New York 10006
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
1 GLOSSARY ........................................... 2
2 DEMISE, PREMISES, TERM, RENT ....................... 7
3 ESCALATION ......................................... 11
4 ELECTRICITY ........................................ 20
5 USE AND OCCUPANCY .................................. 24
6 ALTERATIONS ........................................ 25
7 REPAIRS; FLOOR LOAD ................................ 28
8 WINDOW CLEANING .................................... 30
9 REQUIREMENTS OF LAW ................................ 30
10 SUBORDINATION ...................................... 33
11 RULES AND REGULATIONS .............................. 36
12 INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT... 36
13 DESTRUCTION BY FIRE OR OTHER CAUSE ................. 41
14 EMINENT DOMAIN ..................................... 44
15 ASSIGNMENT, SUBLETTING, MORTGAGE, ETC .............. 45
16 ACCESS TO PREMISES ................................. 55
17 CERTIFICATE OF OCCUPANCY ........................... 56
18 DEFAULT ............................................ 57
19 REMEDIES AND DAMAGES ............................... 60
20 FEES AND EXPENSES .................................. 62
21 NO REPRESENTATIONS BY LANDLORD ..................... 63
22 END OF TERM ........................................ 63
23 POSSESSION ......................................... 64
24 NO WAIVER .......................................... 65
25 WAIVER OF TRIAL BY JURY ............................ 66
<PAGE>
26 INABILITY TO PERFORM ............................... 66
27 BILLS AND NOTICES .................................. 67
28 SERVICES AND EQUIPMENT ............................. 68
29 PARTNERSHIP TENANT ................................. 73
30 VAULT SPACE ........................................ 74
31 SIGNS .............................................. 74
32 BROKER ............................................. 75
33 INDEMNITY .......................................... 75
34 ADJACENT EXCAVATION; SHORING ....................... 76
35 RESERVED ........................................... 76
36 RENT REGULATION .................................... 76
37 COVENANT OF QUIET ENJOYMENT ........................ 77
38 MISCELLANEOUS ...................................... 77
SCHEDULE A - Floor Plan of the Premises
SCHEDULE B - Rules and Regulations
SCHEDULE C - Heating and Cooling Specifications
SCHEDULE D - Cleaning Services
SCHEDULE E - General Partners Comprising Tenant
SCHEDULE F - Commencement Date Agreement
SCHEDULE G - Landlord's Work
<PAGE>
AGREEMENT OF LEASE, made as of the 30 day of December, 1993, between
Metropolitan Life Insurance Company, a New York corporation, having an address
at One Madison Avenue, New York, New York 10010, as Landlord, and GKN Securities
Corp., a Delaware corporation having an address at 61 Broadway, New York, New
York, as Tenant.
REFERENCE PAGE
In addition to other terms elsewhere defined in this Lease, the following
terms whenever used in this Lease shall have the meanings set forth in this
Reference Page.
(1) Premises: The portion of the twenty-seventh (27th) floor of
the Building, known as approximately shown
hatched on the floor plan annexed hereto as
Schedule A.
(2) Commencement Date: The Substantial Completion Date or the date
Tenant or any Person claiming under or through
Tenant first occupies the Premises for the
conduct of its business, whichever occurs
earlier.
(3) Rent Commencement
Date: The date which is four (4) months after the
Commencement Date.
(4) Fixed Expiration
Date: February 28, 1998.
(5) Term: The period from the Commencement Date to the
Fixed Expiration Date.
(6) Fixed Rent: $108,846.25 per annum from the Rent Commencement
Date to and including the Fixed Expiration Date.
(7) Monthly Installment
of Fixed Rent: $9,070.52 per month from the Rent Commencement
Date to and including the Fixed Expiration Date.
<PAGE>
(8) Electric Inclusion
Amount: $12,603.25, subject to adjustment in accordance
with Article 4.
(9) Tenant's Share: .7359%
(10) Base Tax Factor: The Taxes payable for the calendar year beginning
January 1, 1994.
(11) Base Operating
Factor: The Operating Expenses paid or incurred with
respect to the Operating Year beginning January
1, 1994.
(12) Permitted Use: General, executive and administrative offices.
(13) Broker(s): Galbreath Riverbank, L.P.
WITNESSETH:
The parties hereto, for themselves, their legal representatives, successors
and assigns, hereby agree as follows:
ARTICLE 1
GLOSSARY
The following terms shall have the meanings indicated below:
"Additional Rent" shall have the meaning set forth in Section 2.2
"Administrative Code" shall mean the Administrative Code of the City of New
York, as amended.
"Alterations" shall mean alterations, installations, repairs, improvements,
additions, replacements or other physical changes in or about the Premises,
other than those, if any, made by Landlord in accordance with any provisions of
this Lease in order to prepare the Premises for Tenant's initial occupancy.
"Applicable Rate" shall mean the lesser of (x) twelve (12%) per annum, and
(y) the maximum rate permitted by applicable law.
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<PAGE>
"ASHRAE" shall mean the American Society of Heating, Refrigeration and
Air-Conditioning Engineers.
"Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or any statute,
federal or state, of similar nature and purpose.
"Base Rate" shall mean the rate of interest publicly announced from time to
time by Citibank, N.A., or its successor, as its "base rate" (or such other term
as may be used by Citibank, N.A., from time to time, for the rate presently
referred to as its "base rate").
"Building" shall mean the buildings, equipment and other improvements and
appurtenances of every kind and description now located or hereafter erected,
constructed or placed upon the Land and any and all alterations, renewals, and
replacements thereof, additions thereto and substitutions therefor.
"Building Systems" shall mean the base building mechanical, electrical,
sanitary, heating, air conditioning, ventilating, elevator, plumbing,
life-safety and other service systems of the Building, but shall not include
installations made by Tenant or fixtures or appliances.
"Business Days" shall mean all days, excluding Saturdays, Sundays and all
days observed as holidays by the State of New York, the federal government or
the labor unions servicing the Building.
"Control" shall have the meaning set forth in Section 15.3.
"Deficiency" shall have the meaning set forth in Section 19.2.
"Electric Inclusion Amount" is the amount set forth in the Reference Page
(as adjusted pursuant to Article 4) and is the amount included in the Fixed Rent
for the purposes set forth in Section 4.1.
"Escalation Rent" shall mean payments required to be made by Tenant
pursuant to Article 3.
"Event of Default" shall have the meaning set forth in Section 18.1.
"Expiration Date" shall mean the Fixed Expiration Date or such earlier or
later date on which the Term sooner or later ends pursuant to any of the terms,
conditions or covenants of this Lease or pursuant to Law.
3
<PAGE>
"Government Authority (Authorities)" shall mean the United States of
America, the State of New York, the City of New York, any political subdivision
thereof and any agency, department, commission, board, bureau or instrumentality
of any of the foregoing, now existing or hereafter created, having jurisdiction
over the Real Property or any portion thereof.
"HVAC" shall mean heat, ventilation and air conditioning.
"HVAC Systems" shall mean the Building Systems providing HVAC.
"Hazardous Materials" shall have the meaning set forth in Section 9.2.
"Indemnitees" shall mean Landlord, its partners, shareholders, officers,
directors, employees and agents only with respect to their activities relating
to the Real Property or any portion thereof.
"Land" shall mean the land known by the address of 61 Broadway, New York,
New York 10006.
"Landlord" on the date as of which this Lease is made, shall mean
Metropolitan Life Insurance Company, a New York corporation, but thereafter,
"Landlord" shall mean only the fee owner of the Real Property or, if there then
exists a Superior Lease, the tenant thereunder.
"Landlord's Operating Statement" shall mean a statement containing a
computation of Escalation Rent due pursuant to the provisions of Section 3.3
furnished by Landlord to Tenant.
"Landlord's Statement" shall mean either a Landlord's Operating Statement
or a Landlord's Tax Statement.
"Landlord's Tax Statement" shall mean a statement containing a computation
of Escalation Rent due pursuant to the provisions of Section 3.2 furnished by
Landlord to Tenant.
"Landlord's Work" shall have the meaning set forth in Schedule G annexed
hereto.
"Lessor(s)" shall mean a lessor under a Superior Lease.
"Manager" shall mean Galbreath Riverbank, L.P. or any successor contractor
under Landlord's contract for the management of the Building.
"Mortgage(s)" shall mean any trust indenture or mortgage which may now or
hereafter affect the Real Property, the Building
4
<PAGE>
or any Superior Lease and the leasehold interest created thereby, and all
renewals, extensions, supplements, amendments, modifications, consolidations and
replacements thereof or thereto, substitutions therefor, and advances made
thereunder.
"Mortgagee(s)" shall mean any trustee under or mortgagee or holder of a
Mortgage.
"Notice(s)" shall have the meaning set forth in Section 27.1.
"Operating Expenses" shall have the meaning set forth in Section 3.1.
"Operating Hours" shall mean 8:00 a.m. to 6:00 p.m. on Business Days.
"Operating Year" shall mean each calendar year that includes any part of
the Term.
"Overtime Periods" shall have the meaning set forth in Section 28.2.
"Parties" shall have the meaning set forth in Section 38.2.
"Partnership Tenant" shall have the meaning set forth in Article 29.
"Person(s) or person(s)" shall mean any natural person or persons, a
partnership, a corporation and any other form of business or legal association
or entity.
"Persons Within Recapture Subtenant's Control" shall mean and include
Recapture Subtenant (as defined in Article 15), all of Recapture Subtenant's
respective principals, officers, agents, contractors, servants, employees,
licensees and invitees.
"Persons Within Tenant's Control" shall mean and include Tenant, all of
Tenant's respective principals, officers, agents, contractors, servants,
employees, licensees and invitees.
"Prevailing Rate" shall have the meaning set forth in Section 15.4.
"Real Property" shall mean the Building and the Land.
"Recapture Space" shall have the meaning set forth in Section 15.4.
"Recapture Sublease" shall have the meaning set forth in Section 15.4.
5
<PAGE>
"Recapture Subtenant" shall have the meaning set forth in Section 15.4.
"Rental" shall mean and be deemed to include Fixed Rent, Additional Rent
and any other sums payable by Tenant hereunder.
"Requirements" shall mean (i) all present and future laws, rules,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary as well as ordinary, retroactive and prospective, of all
Governmental Authorities now existing or hereafter created, and of any
applicable fire rating bureau, or other body exercising similar functions,
affecting the Real Property, or any street, avenue or sidewalk comprising a part
or in front thereof or any vault in or under the same, or requiring removal of
any encroachment, or affecting the maintenance, use or occupation of the Real
Property, (ii) all requirements, obligations and conditions of all instruments
of record on the date of this Lease, and (iii) all requirements, obligations and
conditions imposed by the carrier of Landlord's hazard insurance policy for the
Building.
"Rules and Regulations" shall mean the rules and regulations annexed hereto
as Schedule B, and such other and further reasonable rules and regulations as
Landlord and Landlord's agents may from time to time adopt, on notice to Tenant
to be given in accordance with the terms of this Lease.
"Sublease Additional Rent" shall have the meaning set forth in Section
15.5.
"Substantially Completed" or "Substantial Completion" shall, whenever used
in this Lease with respect to Landlord's Work, be deemed to mean that state of
the progress of such work as shall enable Tenant to have (a) the services to be
provided to Tenant pursuant to Article 28 hereof, and (b) access to the Premises
to commence Tenant's use and occupancy of the Premises for Tenant's normal
business purposes without material interference by reason of the completion of
unfinished details of Landlord's Work. Within 10 days after the Commencement
Date, Tenant shall deliver to Landlord a punchlist of items of unfinished
Landlord's Work ("Tenant's Punchlist"). Landlord shall diligently complete the
unfinished items of work identified in Tenant's Punchlist.
"Substantial Completion Date" shall mean the date that Landlord's Work
shall be Substantially Completed.
"Superior Lease(s)" shall mean all ground or underlying leases of the Real
Property or the Building heretofore or hereafter made by Landlord and all
renewals, extensions, supplements and modifications thereof.
6
<PAGE>
"Taxes" shall have the meaning set forth in Section 3.1.
"Tax Year" shall mean each period of twelve (12) months, commencing on the
first day of July of each year, that includes any part of the Term, or such
other period of twelve (12) months as may be duly adopted as the fiscal year for
real estate tax purposes by the City of New York.
"Tenant", on the date as of which this Lease is made, shall mean the Tenant
named in this Lease, but thereafter "Tenant" shall mean only the tenant under
this Lease at the time in question; provided, however, that the Tenant named in
this Lease and any successor tenant hereunder shall not be released from
liability hereunder in the event of any assignment of this Lease.
"Tenant's Operating Payment" shall have the meaning set forth in Section
3.3.
"Tenant's Projected Operating Share" shall have the meaning set forth in
Section 3.3.
"Tenant's Property" shall mean Tenant's movable fixtures and movable
partitions, telephone and other equipment, furniture, furnishings and other
movable items of personal property.
"Tenant's Tax Payment" shall have the meaning set forth in Section 3.2.
"Unavoidable Delays" shall have the meaning set forth in Article 26.
ARTICLE 2
DEMISE, PREMISES, TERM, RENT
Section 2.1. Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord the Premises for the Term to commence, subject to Article 23, on the
Commencement Date and to end on the Fixed Expiration Date, unless earlier
terminated or extended as provided herein.
Section 2.2. Commencing upon the Rent Commencement Date, Tenant shall pay
to Landlord, in lawful money of the United States of America, without notice or
demand, by good and sufficient check drawn to Landlord's order on a bank or
trust company with an office in the Borough of Manhattan, the City of New York,
State of New York, at the office of Landlord or at such other place as Landlord
may designate from time to time, the following:
7
<PAGE>
(A) the Fixed Rent, at the annual fixed rental rate set forth in the
Reference Page, which shall be payable in equal Monthly Installments of Fixed
Rent in advance on the first day of each and every calendar month during the
Term, except that the first Monthly Installment of Fixed Rent shall be payable
by Tenant upon execution of this Lease; and
(B) additional rent ("Additional Rent") consisting of all other sums
of money (including, without limitation, Escalation Rent) as shall become due
from and be payable by Tenant hereunder (for default in the payment of which
Landlord shall have the same remedies as for a default in the payment of Fixed
Rent).
Section 2.3. If the Rent Commencement Date is other than the first day of a
calendar month, or the Fixed Expiration Date is other than the last day of a
calendar month, Fixed Rent for such month shall be prorated on a per diem basis.
Section 2.4. If prior to the Rent Commencement Date, Tenant shall occupy
any portion of the Premises for the performance of work in the Premises or
otherwise, Tenant shall, commencing as of the date of such occupancy, pay
Landlord's charges for (i) electricity, at the rate of $2.75 per rentable square
foot per year (with respect to the portion of the Premises so occupied) and (ii)
such items for which Tenant is separately billed hereunder, including, without
limitation, overtime use of freight elevator and HVAC service and extra cleaning
services. Such charges and items shall be payable to Landlord within 30 days
after demand.
Section 2.5. Tenant shall pay the Fixed Rent and Additional Rent when due
without abatement, deduction, counterclaim, setoff or defense for any reason
whatsoever, except said abatement as may be occasioned by the occurrence of any
event permitting an abatement of Fixed Rent and Escalation Rent as specifically
set forth in Articles 13 and 14.
Section 2.6. Landlord will give Tenant written notice at least ten (10)
days in advance of the date when Landlord expects the Premises to be
Substantially Completed, but Landlord shall not incur any liability whatsoever
to Tenant in the event the Premises are not Substantially Completed by such
date.
Section 2.7. Landlord may submit to Tenant a written agreement,
substantially in the form annexed as Schedule F, confirming the dates filed by
Landlord, in accordance with the provisions of this Lease, as the Commencement
Date and the Fixed Expiration Date and Tenant shall execute such agreement and
return it to Landlord within fifteen (15) calendar days thereafter. Any failure
of the parties to execute such written agreement shall not affect the validity
of the Commencement Date or
8
<PAGE>
the Fixed Expiration Date as fixed and determined by Landlord as aforesaid.
Section 2.8. Landlord will send bills or invoices to Tenant for the Rental
due hereunder, but Landlord's failure to send, or Tenant's failure to receive,
any such bills or invoices shall not affect Tenant's obligations to pay the
Rental due under this Lease.
Section 2.9. Landlord and Tenant agree that, notwithstanding any method of
measurement of the rentable square footage of the Premises or the Building that
may now or subsequently be employed, (i) the rentable square footage of the
Premises for the purposes of this Lease is 4,583 square feet and (ii) the
rentable square footage of the Building is 622,729 square feet. Neither Landlord
nor Tenant may dispute or seek to change such measurements.
Section 2.10. Notwithstanding anything contained in Article 23 to the
contrary, if the Commencement Date shall not have occurred on or before January
23, 1994 (such date, the "Finish Date") and provided that no Event of Default
shall have occurred and be continuing, then Tenant shall be granted an
additional credit against Fixed Rent (the "Finish Date Rent Credit") equal to
$131.84 for each day beyond the Finish Date that the Commencement Date is
delayed (subject to the last sentence of this Section 2.10). The Finish Date
Rent Credit shall be applied to the first Monthly Installments of Fixed Rent
accruing under this Lease after the Rent Commencement Date. To the extent that
the Commencement Date shall be delayed beyond the Finish Date by reason of a
"Tenant's Delay" (as hereinafter defined) or by Article 26, the date that shall
constitute the Finish Date shall not be the sixtieth day after the date of this
Lease but shall be delayed by the period of time equal to the duration of all
such delays. As used herein, the term "Tenant's Delay" shall mean a delay in the
Substantial Completion of Landlord's Work, or any portion thereof, due to any
act or omission of Tenant, its contractors, subcontractors, architects, space
designers, agents or employees, including, without limitation, delays due to
failure by Tenant timely to deliver plans, Tenant's making changes in its plans
or in Landlord's Work, delays in submission of information or giving
authorizations or approvals, or delays resulting from the fact that, under good
construction practice, portions of Landlord's Work must be scheduled after the
completion of certain items of Tenant's Installations (as hereinafter defined).
The parties recognize that a Tenant's Delay may be aggravated or extended by a
strike, labor problem, materials or labor shortage, or loss of time due to
construction scheduling changes occasioned by such Tenant's Delay or other
Unavoidable Delays, any or all of which would not have adversely affected the
timely completion of Landlord's Work in the absence of such
9
<PAGE>
Tenant's Delay, and agree that the duration of Tenant's Delay should include all
delays resulting from such other causes, notwithstanding that as a result
thereof, the Tenant's Delay in question may substantially exceed, in duration,
the length of time during which the act or omission of Tenant or Persons Within
Tenant's Control causing such Tenant's Delay may have occurred or continued.
Section 2.11. In the event Tenant shall desire to make any installations
(herein called "Tenant's Installations") which are not to be made by Landlord
for Tenant, the following shall apply:
(i) On condition that such Tenant's Installations will not require any
structural change, and further provided that all Landlord's Work required to be
made by Landlord therein shall have reached a point with respect to which, in
Landlord's sole judgment, exercised in good faith, the making of Tenant's
Installations will not delay or hamper Landlord in the completion of Landlord's
Work, prior to the Commencement Date, Tenant may enter the Premises for the
purpose of making Tenant's Installations subject, however, to the applicable
provisions of Article 6 of this Lease.
(ii) Prior to the Commencement Date, any entry by Tenant in or on the
Premises shall be at Tenant's sole risk. Tenant's Installations shall be
completed free of all liens and encumbrances.
(iii) Tenant agrees that in performing any work for or on behalf of Tenant
the labor employed by Tenant shall always be harmonious and compatible with the
labor employed by Landlord and/or any contractors or subcontractors of Landlord.
Should such labor, in Landlord's sole opinion, be incompatible, Landlord may
require Tenant to withdraw from the Premises immediately.
(iv) In the event Tenant or any agent or contractor of Tenant shall enter
upon the Premises or any other part of the Building, Tenant agrees to indemnify
and save Landlord free and harmless from and against any and all claims
whatsoever arising out of said entry or any work performed by such contractor.
Tenant's agents, contractors and their employees shall comply with the special
rules, regulations and requirements of Building management for the performance
of work and coordination of said agents, contractors and their employees so as
to avoid the intrusion into the operation of the Building and the business
operation of other tenants.
(v) In no event shall the scope of Landlord's Work be broadened to include
any repairs, Alterations or restorations made necessary due to the performance
by Tenant of Tenant's Installations in the Premises.
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ARTICLE 3
ESCALATION
Section 3.1. For the purposes of this Article 3, the following terms shall
have the meanings set forth below:
(A) "Operating Expenses" shall mean the aggregate of those costs and
expenses (and taxes thereon, if any) paid or incurred by Landlord or on behalf
of Landlord with respect to the operation, cleaning, repair, safety,
replacement, management, security and maintenance solely of the Real Property,
Building Systems, sidewalks, curbs, plazas, and other areas adjacent to the
Building, and with respect to the services provided to tenants, including,
without limitation: (i) salaries, wages and bonuses paid to, and the cost of any
hospitalization, medical, surgical, union and general welfare benefits
(including group life insurance), any pension, retirement or life insurance
plans and other benefits or similar expenses relating to employees of Landlord
engaged in the operation, cleaning, repair, safety, replacement, management,
security or maintenance solely of the Real Property and the Building Systems or
in providing services to tenants; (ii) social security, unemployment and other
payroll taxes, the cost of providing disability and worker's compensation
coverage imposed by any Requirement, union contact or otherwise with respect to
said employees; (iii) the cost of gas, oil, steam, water, sewer rental, HVAC and
other utilities furnished to the Building and utility taxes (other than those
costs paid by other tenants for their respective portion of the Building); (iv)
the expenses incurred for casualty, rent, liability, fidelity, plate glass and
any other insurance; (v) the cost of repairs, maintenance and painting,
including the cost of acquiring or renting all supplies, tools, materials and
equipment used in operating or repairing the Building; (vi) expenditures,
whether by purchase or lease, for capital improvements and capital equipment
that under generally accepted accounting principles, consistently applied are
expensed or regarded as deferred expenses and capital expenditures, whether by
purchase or lease, that are made by reason of Requirements (except as set forth
below) or for labor-saving devices or in lieu of a repair, in each case such
capital expenditures to be included in Operating Expenses for the Operating Year
in which such costs are incurred and every subsequent Operating Year, on a
straight-line basis, to the extent that such items are amortized over their
useful life, with interest calculated at an annual rate equal to two (2%)
percent over the Base Rate in effect at the time of Landlord's having made said
expenditure; (vii) the cost or rental of all supplies, tools, materials and
equipment; (viii) the cost of uniforms, work clothes and dry cleaning; (ix) the
cost of window cleaning, janitorial, concierge, guard, watchman or other
security person-
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nel, service or system, if any; (x) management fees; (xi) charges of independent
contractors performing work included within this definition of Operating
Expenses; (xii) telephone and stationery costs for the management office of the
Building; (xiii) legal, accounting and other professional fees and disbursements
incurred in connection with the operation and management of the Real Property;
(xiv) the cost of decorations; (xv) exterior and interior landscaping; and (xvi)
40% of all electrical costs incurred in the operation of the Real Property.
Notwithstanding any provision in this Section 3.1(A) to the contrary, if
Landlord shall discontinue the redistribution or furnishing of electrical energy
to all tenants in the Building, then the cost and expense incurred by Landlord
for electricity shall thereafter be deemed to be one hundred (100%) percent of
the total cost and expenses to Landlord of purchasing electricity for the Real
Property.
Provided, however, that the foregoing costs and expenses shall exclude or
have deducted from them, as the case may be:
(a) executives' salaries above the grade of building manager;
(b) amounts received by Landlord through proceeds of insurance to the
extent they are compensation for sums previously included in Operating
Expenses;
(c) cost of repairs or replacements incurred by reason of fire or
other casualty or condemnation to the extent Landlord is compensated
therefor;
(d) costs incurred in performing work or furnishing services or
utilities for any tenant, whether at such tenant's or Landlord's
expense, to the extent that such work or service is in excess of any
work or service or utilities that Landlord is obligated to furnish to
Tenant at Landlord's expense;
(e) Taxes;
(f) refinancing costs and mortgage interest and amortization payments;
(g) leasing commissions, rental concessions and lease buy-outs;
(h) any expense for which Landlord is entitled to be reimbursed by any
tenant as an additional charge in excess of Fixed Rent and Escalation
Rent;
(i) depreciation;
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(j) rental under any ground or underlying lease;
(k) advertising and promotional expenses with respect to the Property;
(l) 60% of all electrical costs incurred in the operation of the Real
Property;
(m) costs to comply with Requirements in effect as of the date of this
Lease;
(n) cost of electricity or HVAC consumed in any other leased space in
the Building;
(o) cost of permanent works of art (as distinct from decorations,
which are includible in Operating Expenses);
(p) any management fees paid to Landlord or an affiliate (as such term
is defined in Section 15.3(A)) of Landlord in excess of the amount
that would be paid in the absence of such relationship (but only to
the extent of the excess portion of same);
(q) franchise, gains, estate or income taxes imposed upon the income
of Landlord;
(r) professional fees not allocated to the operation or management of
the Real Property and professional fees relating to disputes with, or
preparation of leases for, other tenants and prospective tenants;
(s) expenses of constructing tenant improvements for any tenant in the
Building;
(t) damages imposed on Landlord by any judgment, settlement or
arbitration award which, in any such case, shall result from any tort
liability of Landlord; provided, however, that any portion of the
judgment, settlement or arbitration award that by its nature is
otherwise an Operating Expense pursuant to this Section 3.1(A) (e.g.,
the cost of repairs and maintenance) shall, notwithstanding the
foregoing, be included in Operating Expenses;
(u) professional fees incurred in connection with any action to reduce
Taxes; and
(v) expenditures for capital improvements or capital equipment, other
than those referred to in clause (vi)
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above and in the next succeeding (unlettered) paragraph.
If Landlord purchases any item of capital equipment or makes any capital
expenditure that is intended to have the effect of reducing the expenses that
would otherwise be included in Operating Expenses, then the costs of such
capital equipment or capital expenditure shall be included in Operating Expenses
for the Operating Year in which the costs are incurred and every subsequent
Operating Year on a straight-line basis, to the extent that such items are
amortized over their useful life, with interest calculated at an annual rate of
two (2%) percent over the Base Rate in effect at the time of Landlord's having
made said expenditure. If Landlord leases any item of capital equipment designed
to result in savings or reductions in expenses that would otherwise be included
in Operating Expenses, then the rentals and other costs paid with respect to
such leasing shall be included in Operating Expenses for the Operating Years in
which such rentals and costs are incurred. Notwithstanding the provisions of
this paragraph, the maximum amount that may be included in any Operating Year
for any such capital equipment or capital expenditure shall be the amount of
savings realized by such capital equipment or capital expenditure. To the extent
that the amount of such savings is less than the amortized cost plus interest in
any one Operating Year, Landlord shall include in subsequent Operating Years
until fully recovered the amount not included in an Operating Year by reason of
such limitation (provided that such limitation is not exceeded in any subsequent
Operating Year).
(B) "Taxes" shall mean the aggregate amount of real estate taxes and
any general or special assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property (including, without limitation, (i) assessments
made upon or with respect to any "air" and "development" rights now or hereafter
appurtenant to or affecting the Real Property, (ii) any fee, tax or charge
imposed by any Government Authority for any vaults, vault space or other space
within or outside the boundaries of the Real Property, and (iii) any assessments
levied after the date of this Lease for public benefits to the Real Property or
the Building provided that if any assessment affecting the Premises may be paid
in installments but Landlord shall elect to pay any part of the same prior to
the date any such installment shall be due, the amount of such assessment which
shall be included in Taxes for the Tax Year in which such excess payment is made
shall be equal to the portion of such payment that would have been included in
Taxes had Landlord elected to pay such assessment in the maximum number of
installments available to Landlord; provided that if, because of any change in
the
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taxation of real estate, any other tax or assessment, however denominated
(including, without limitation, any franchise, income, profit, sales, use,
occupancy, gross receipts or rental tax) is imposed upon Landlord or the owner
of the Real Property or the Building, or the occupancy, rents or income
therefrom, in substitution for any of the foregoing Taxes or for an increase in
any of the foregoing Taxes, such other tax or assessment shall be deemed part of
Taxes computed as if Landlord's sole asset were the Real Property. With respect
to any Tax Year, all expenses, including attorneys' fees and disbursements and
experts' and other witnesses' fees, incurred in contesting the validity or
amount of any Taxes or in obtaining a refund of Taxes shall be considered as
part of the Taxes for such Tax Year. Anything contained herein to the contrary
notwithstanding, Taxes shall not be deemed to include (a) any taxes on
Landlord's income, (b) franchise taxes, (c) estate or inheritance taxes, (d) any
similar taxes imposed on Landlord, unless such taxes are levied, assessed or
imposed as a substitute for the whole or any part of, or as a substitute for an
increase in, the taxes, assessments, levies, fees, charges and impositions that
now constitute Taxes or (e) any charges and/or taxes that are paid by individual
tenants (including, by way of example only, vault fees for a tenant using such
vaults, and water and sewer taxes for a restaurant tenant).
Section 3.2.
(A) From and after January 1, 1995, Tenant shall pay as Escalation Rent for
each Tax Year, an amount ("Tenant's Tax Payment") equal to Tenant's Share of the
amount by which the Taxes for such Tax Year are greater than the Base Tax
Factor. Tenant's Tax Payment shall be payable by Tenant to Landlord in twelve
(12) equal monthly installments, (subject to the further provisions of this
Section 3.2), within ten (10) days after receipt of a Landlord's Tax Statement,
regardless of whether such Landlord's Tax Statement is received prior to, on or
after the first day of such Tax Year. If there is any increase in Taxes for any
Tax Year, whether during or after such Tax Year, or if there is any decrease in
the Taxes for any Tax Year during such Tax Year, Landlord may furnish a revised
Landlord's Tax Statement for any Tax Year affected, and Tenant's Tax Payment for
such Tax Year shall be adjusted and, (a) within ten (10) days after Tenant's
receipt of such revised Landlord's Tax Statement, Tenant shall (with respect to
any increase in Taxes for such Tax Year) pay the appropriate increase in
Tenant's Tax Payment to Landlord, or (b) (with respect to any decrease in Taxes
for such Tax Year) Landlord shall, at its election, either credit such decrease
in Tenant's Tax Payment against the next installment of Rental payable by Tenant
or refund the amount of such decrease by check to the order of Tenant. If at the
end of the Term, there shall
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be no Rental remaining against which Landlord can credit any decrease in Taxes
due Tenant, Landlord shall refund the amount of such decrease due Tenant by
check to the order of Tenant within 60 days after Tenant shall first be entitled
to a credit for an overpayment. If, during the Term, Taxes are required to be
paid (either to the appropriate taxing authorities or as tax escrow payments to
the Lessor or the Mortgagee), in full or in monthly, quarterly or other
installments on any other date or dates than as presently required, then
Tenant's Tax Payments shall be correspondingly accelerated or revised so that
Tenant's Tax Payments are due at least thirty (30) days prior to the date
payments are due to the taxing authorities, the Lessor or the Mortgagee. The
benefit of any discount for any early payment or prepayment of Taxes shall
accrue solely to the benefit of Landlord and Taxes shall be computed without
subtracting such discount.
(B) Only Landlord shall be eligible to institute tax reduction or
other proceedings to reduce Taxes. If, after a Landlord's Tax Statement has been
sent to Tenant, a refund of Taxes is actually received by or on behalf of
Landlord, then, promptly after receipt of such refund, Landlord shall send
Tenant a Landlord's Tax Statement adjusting the Taxes for such Tax Year (taking
into account Landlord's expenses therefor) and setting forth Tenant's share of
such refund, and Tenant shall be entitled to receive such amount by way of a
credit against Rental; provided, however, that Tenant's Share of such refund
shall be limited to the amount of Tenant's Tax Payment, if any, which Tenant had
theretofore paid to Landlord attributable to increases in Taxes for the Tax Year
to which the refund is applicable.
(C) Tenant's Tax Payment and any credits with respect thereto as
provided in this Section 3.2 shall be made as provided in this Section 3.2
regardless of the fact that Tenant may be exempt, in whole or in part, from the
payment of any taxes by reason of Tenant's diplomatic or other tax exempt status
or for any other reason whatsoever.
(D) Tenant shall pay to Landlord within fifteen days after demand
therefor as Additional Rent any occupancy tax or rent tax now in effect or
hereafter enacted, if payable by Landlord in the first instance or hereafter
required to be paid by Landlord.
(E) Each Landlord's Tax Statement furnished by Landlord with respect
to Tenant's Tax Payment shall be accompanied by a copy of the real estate tax
bill or bills for the Tax Year referred to therein, but Landlord shall have no
obligation to deliver more than one such copy of the real estate tax bill or
bills in respect of any Tax Year, and Landlord's failure to deliver such copy
shall not affect Tenant's obligations as to amount or due date(s) thereof.
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(F) If the Base Tax Factor subsequently shall be adjusted, corrected
or reduced whether as the result of protest, by means of agreement or as the
result of legal proceedings, the Base Tax Factor for the purpose of computing
any additional rent payable pursuant to this Article shall be the Base Tax
Factor as so adjusted, corrected or reduced. Until the Base Tax is so adjusted,
corrected or reduced, if ever, Tenant shall pay additional rent hereunder based
upon the unadjusted, uncorrected or unreduced Base Tax Factor and upon such
adjustment, correction or reduction occurring, any additional rent payable by
Tenant prior to the date of such occurrence shall be recomputed and Tenant shall
pay to Landlord any Escalation Rent found due by such recomputation within
thirty (30) days after being billed therefor (which bill shall set forth in
reasonable detail the pertinent data causing and comprising such recomputation).
Section 3.3.
(A) From and after January 1, 1995, Tenant shall pay as Escalation
Rent for each Operating Year an amount ("Tenant's Operating Payment") equal to
Tenant's Share of the amount by which Operating Expenses for such Operating Year
are greater than the Base Operating Factor.
(B) Landlord shall furnish to Tenant, with respect to each Operating
Year, a Landlord's Operating Statement setting forth Landlord's estimate of
Tenant's Operating Payment for such Operating Year ("Tenant's Projected
Operating Share"). Tenant shall pay to Landlord on the first day of each month
during such Operating Year, as Escalation Rent, an amount equal to one-twelfth
of Tenant's Projected Operating Share for such Operating Year. If, however,
Landlord furnishes any such Landlord's Operating Statement for an Operating Year
subsequent to the commencement of such Operating Year, then (a) until the first
day of the month following the month in which such Landlord's Operating
Statement is furnished to Tenant, Tenant shall pay to Landlord on the first day
of each month an amount equal to the monthly sum payable by Tenant to Landlord
under this Section 3.3 in respect of the last month of the preceding Operating
Year; (b) after such Landlord's Operating Statement is furnished to Tenant or
together therewith, Landlord shall give notice to Tenant stating whether the
installments of Tenant's Projected Operating Share previously made for such
Operating Year were greater or less than the installments of Tenant's Projected
Operating Share to be made for such Operating Year in accordance with such
estimate, and (i) if there is a deficiency, Tenant shall pay the amount thereof
within thirty (30) days after demand therefor, or (ii) if there was an
overpayment, Landlord shall credit the amount thereof against subsequent
payments of Rental; and (c) on the first day of the month following the month in
which such Landlord's Operating Statement is furnished to Tenant,
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and monthly thereafter throughout the remainder of such Operating Year, Tenant
shall pay to Landlord an amount equal to one-twelfth of Tenant's Projected
Operating Share shown in such Landlord's Operating Statement. Landlord may
furnish to Tenant a revised Landlord's Operating Statement with a new estimate
of Tenant's Projected Operating Share for such Operating Year and, in such case,
Tenant's Projected Operating Share for such Operating Year shall be adjusted and
paid or credited, as the case may be, substantially in the same manner as
provided in the preceding sentence.
(C) After the end of each Operating Year, Landlord shall furnish to
Tenant a Landlord's Operating Statement for such Operating Year. Each such
year-end Landlord's Operating Statement shall be accompanied by a computation of
Operating Expenses for the Building prepared by the Manager or a certified
public accountant designated by Landlord from which Landlord shall make the
computation of Escalation Rent due in respect of Operating Expenses hereunder.
In making computations of Operating Expenses, the certified public accountant or
the Manager may rely on Landlord's reasonable estimates and allocations whenever
said estimates and allocations are needed for this Article 3. If the Landlord's
Operating Statement shows that the sums paid by Tenant under Section 3.3(B)
exceeded Tenant's Operating Payments required to be paid by Tenant for such
Operating Year, Landlord shall credit the amount of such excess against
subsequent payments of Rental; and if the Landlord's Operating Statement for
such Operating Year shows that the sums so paid by Tenant were less than
Tenant's Operating Payment due for such Operating Year, Tenant shall pay the
amount of such deficiency within thirty (30) days after demand therefor.
Section 3.4. Landlord's failure to render any Landlord's Statement with
respect to any Tax Year or Operating Year shall not prejudice Landlord's right
thereafter to render a Landlord's Statement with respect thereto or with respect
to any subsequent Tax Year or Operating Year, as the case may be, nor shall the
rendering of a Landlord's Statement prejudice Landlord's right thereafter to
render a corrected Landlord's Statement for that Tax Year or Operating Year,
provided that if Landlord shall have failed to render a Landlord's Statement
with respect to any Tax Year or Operating Year within eighteen months after the
end of such the Tax Year or Operating Year, as the case may be, Tenant shall
not be obligated to make the payment shown to be due with respect to such Tax
Year or Operating Year.
Section 3.5. If the Commencement Date or the Expiration Date occurs on a
date other than January 1 or December 31, respectively, any Tenant's Tax Payment
under this Article 3 for the Tax Year in which such Commencement Date or
Expiration Date occurs shall be apportioned in that percentage which the number
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of days in the period from the Commencement Date to December 31 or from January
1 to the Expiration Date, as the case may be, both inclusive, bears to the total
number of days in such Tax Year. If the Commencement Date or the Expiration Date
occurs on a date other than January 1 or December 31, respectively, any Tenant's
Operating Payment under this Article 3 for the Operating Year in which such
Commencement Date or Expiration Date occurs shall be apportioned in that
percentage which the number of days in the period from the Commencement Date to
December 31 or from January 1 to the Expiration Date, as the case may be, both
inclusive, bears to the total number of days in such Operating Year. In the
event of a termination of this Lease, any Escalation Rent under this Article 3
shall be paid or adjusted within thirty (30) days after submission of a
Landlord's Statement. In no event shall Fixed Rent ever be reduced by operation
of this Article 3 and the rights and obligations of Landlord and Tenant under
the provisions of this Article 3 with respect to any Escalation Rent shall
survive the Expiration Date.
Section 3.6. Any Landlord's Statement sent to Tenant shall be conclusively
binding upon Tenant unless, within thirty (30) days after such Landlord's
Statement is sent, Tenant shall send a written notice to Landlord objecting to
such Landlord's Statement and specifying, to the extent reasonably practicable,
the respects in which such Landlord's Statement is disputed. If Tenant shall
send such notice with respect to a Landlord's Operating Statement, Tenant may
select and pay an independent certified public accountant who may examine
Landlord's books and records relating to the Operating Expenses to determine the
accuracy of Landlord's Operating Statement. Tenant recognized the confidential
nature of Landlord's books and records, and agrees that any information obtained
by Tenant's accountant during any examination shall be maintained in strict
confidence by such accountant, without revealing same to any person, other than
Tenant, which shall maintain such information in strict confidence. If, after
such examination, such accountant shall dispute such Landlord's Operating
Statement, and such dispute is not resolved within 30 days, then the same shall
be determined by two firms of reputable independent certified public
accountants. The decision of such accountants shall be conclusively binding upon
the parties. If such accountants are unable to resolve such dispute, such
accountants shall select a third reputable independent firm of certified public
accountants and the determination of a majority of such accountants shall be
binding on the parties. All information disseminated to the accountants shall be
maintained in strict confidence by such accountants, except for the
dissemination of such information to Landlord and Tenant. The fees and expenses
involved in resolving such dispute shall be borne by the unsuccessful party (and
if both parties are partially unsuccessful, the accountants shall apportion the
fees and expenses between the parties based upon the degree of success of each
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party). Notwithstanding the giving of such notice by Tenant, and pending the
resolution of any such dispute, Tenant shall pay to Landlord when due the amount
shown on any such Landlord's Statement, as provided in this Article 3.
Section 3.7. In determining the amount of the Base Operating Factor and
Operating Expenses, if less than 95% of the Building's rentable area shall have
been occupied by tenant(s) at any time during the calendar year 1994 or any
Operating Year, Operating Expenses, for the purposes of the Base Operating
Factor and for any Operating Year, shall be adjusted to the amount which would
normally be expected to be incurred had 95% of all such areas been occupied
throughout 1994 or any Operating Year. The provisions of this paragraph with
respect to adjustments of Operating Expenses for vacancy, shall apply only to
Operating Expenses which are variable and which increase in the same
relationship to the increase in occupancy in the Building and shall not apply to
any Operating Expenses which do not vary with the level of occupancy in the
Building.
Section 3.8. Tenant shall not be required to make payments of Escalation
Rent relating to the period prior to January 1, 1995.
ARTICLE 4
ELECTRICITY
Section 4.1. Landlord shall furnish the electric energy that Tenant
reasonably requires in the Premises on a rent inclusion basis. That is, the
Fixed Rent includes the "Electric Inclusion Amount" (as adjusted pursuant to
this Article 4), which the parties have agreed is the reasonable value to Tenant
of normal electric service for lighting, light office equipment and the usual
small business machines during Operating Hours. Accordingly, there shall be no
charge to Tenant for such electric energy by way of measuring the same on any
meter or otherwise, such electric energy being included in Landlord's services
which are covered by the Fixed Rent. Landlord shall not be liable in any way to
Tenant for any interruption or failure of or defect in the supply or character
of electric energy furnished to the Premises or for any loss, damage or expense
Tenant may sustain if either the quantity or character of electric service is
changed or is no longer suitable for Tenant's requirements, whether by reason of
any requirement, act or omission of the public utility serving the Building with
electricity or for any other reason.
Section 4.2. Tenant shall at all times comply with the rules, regulations,
terms and conditions applicable to service, equipment, wiring and requirements
of the public utility supplying electricity to the Building. Tenant agrees that
at no time
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will the connected electrical load in the Premises exceed in the aggregate six
watts per rentable square foot of the Premises, exclusive of the HVAC Systems.
Tenant shall not, without Landlord's prior written consent in each instance,
which consent shall not be unreasonably withheld or delayed provided the
provisions of Section 6.1(A)(i)-(v) are not violated, connect any fixtures,
machinery, appliances or equipment to the Building electric distribution system
or make any alteration or addition to Tenant's machinery, appliances or
equipment, or the electric system of the Premises, if the effect thereof would
be to increase the electrical load in the Premises over the load specified in
this Section 4.2 or in Section 4.4. Should Landlord grant such consent, all
additional risers or other equipment required therefor shall be provided by
Landlord and the cost thereof shall be paid by Tenant upon Landlord's demand.
Landlord agrees that it shall not unreasonably withhold or delay its consent to
the installation by Tenant of Tenant's communications and business equipment in
the Premises.
Section 4.3 If the public utility rate schedule for the supply of electric
energy to the Building and/or the surcharge for fuel cost or any other charge
made by the public utility supplying electric energy to the Building and/or the
taxes payable by Landlord with respect to such electric energy are increased or
decreased after the date of this Lease and/or the service classification at
which Landlord purchases electric energy is changed after the date of this Lease
resulting in an increase or decrease in the cost to Landlord of electrical
energy, the Fixed Rent shall be increased or decreased by an amount equal to the
product of (i) the then-existing Electric Inclusion Amount and (ii) the
percentage or increase or decrease in such public utility rate schedule, fuel
adjustment or other charge, taxes or cost. Any such increase or decrease shall
be effective as of the date of such increase or decrease and shall be made
retroactively if necessary. Upon the request of either party, Landlord and
Tenant shall execute a supplementary agreement confirming the increase or
decrease. In no event shall the provisions of this Section 4.3 operate to reduce
the Fixed Rent below the amount stated in the Reference Page nor the Electric
Inclusion Amount below the amount stated in the Reference Page.
Section 4.4. The Electric Inclusion Amount is based upon Landlord's
assumption that Tenant's initial electrical installation will not result in a
total connected electrical load for lighting and equipment in excess of six
watts per rentable square foot (exclusive of the HVAC Systems) and that Tenant
will, except for the purpose of office cleaning, use electrical energy only
during Operating Hours Accordingly, if Tenant's initial electrical installation
exceeds such criteria, or if from time to time Tenant makes material use of
electricity during hours other than Operating Hours, or if from time to time
Tenant after
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completion of its initial installation adds or changes any machinery, appliances
or equipment which materially increases the aggregate electrical load in the
Premises, the Electric Inclusion Amount and the Fixed Rent shall from time to
time be equitably adjusted to reflect the resulting increase in such use.
Landlord shall furnish a statement of Landlord's determination as to the amount
of the adjustment, and the same shall become binding upon the parties unless,
within thirty (30) days, Tenant notifies Landlord that it disputes the amount of
such adjustment, in which event the parties shall in good faith make reasonable
attempts to come to agreement, and, if Landlord and Tenant cannot agree thereon,
the amount of such adjustment shall be determined, based on standard practices,
by an independent electrical consultant selected by Landlord and approved by
Tenant, which approval shall not be unreasonably withheld. Tenant shall permit
said consultant to have access to the Premises and Tenant's electrical
facilities for the foregoing purpose at all reasonable times. The fee of such
consultant shall be paid by Tenant unless such consultant finds that Tenant's
use does not justify an increase in Fixed Rent, in which case the fee shall be
paid by Landlord. When the amount of such adjustment is so determined, Landlord
and Tenant shall execute a supplementary agreement to reflect such adjustment,
which shall be effective from the date of the increase of such usage as
determined by such electrical consultant and be made retroactively if necessary.
Any adjustment shall be effective even if such supplementary agreement is not
executed and delivered. Pending the determination of the adjustment, Tenant
shall pay to Landlord the amount of such adjustment as specified in Landlord's
statement. Thereafter if it is determined that Tenant has overpaid, Tenant shall
receive a credit against Fixed Rent in the amount of the overpayment, said
credit to be applied against the next accruing installment(s) of Fixed Rent.
Section 4.5. Landlord reserves the right to discontinue furnishing electric
energy to the Premises at any time upon not less than thirty (30) days notice
("Landlord's Discontinuance Notice") to Tenant provided that Landlord shall not
exercise such right unless it discontinues furnishing electricity to at least
60% of the rentable area of the Building under lease immediately prior to
Landlord's determination. If Landlord exercises such right of termination, this
Lease shall continue in full force and effect and shall be unaffected thereby,
except only that, from and after the effective date of such discontinuance,
Landlord shall not be obligated to furnish electric energy to Tenant and the
Fixed Rent payable under this Lease shall be reduced by the Electric Inclusion
Amount then in effect. If Landlord voluntarily discontinues furnishing electric
energy to Tenant, Landlord shall, prior to the effective date of such
discontinuance, at Landlord's expense, make such changes in panel boards,
feeders, risers, wiring and other conductors and equipment to the extent
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required to permit Tenant to obtain electric energy directly from the public
utility company. If, on the other hand, Landlord is required by any Requirements
to discontinue furnishing electric energy to Tenant, Tenant shall reimburse
Landlord promptly upon demand for the cost incurred by Landlord in making such
changes in panel boards, feeders, risers, wiring and other conductors and
equipment in order to permit Tenant to obtain electric energy directly from the
public utility company. Notwithstanding the foregoing, Landlord shall not
discontinue furnishing electric energy to Tenant in the Premises until such time
as Tenant has arranged for the public utility company furnishing electric energy
to the Building to supply electric energy to the Premises unless the public
utility company will not furnish electric energy to the Premises on the date
specified by Landlord in Landlord's Discontinuance Notice due to (i) delay or
negligence by Tenant in arranging for same after receipt of Landlord's
Discontinuance Notice or (ii) refusal by Tenant to provide the public utility
company with a deposit or other security requested by such public utility
company.
Section 4.6. If any tax is imposed upon Landlord with respect to electrical
energy furnished as a service to Tenant by any Governmental Authority, Tenant
agrees that, where permitted by law or applicable regulations, Tenant's pro rata
share of such taxes shall be reimbursed by Tenant to Landlord upon demand.
Section 4.7. Landlord shall have the option of installing submeters at
Landlord's expense to measure Tenant's consumption of electrical energy. If
Landlord exercises such option, the Fixed Rent shall be reduced by an amount
equal to the then Electric Inclusion Amount with such reduction to be effective
as of the commencement of the operation of such submeters and, commencing at
such time, Tenant shall pay to Landlord, as additional rent, on demand made from
time to time but no more frequently than monthly, for its use of electrical
energy in the Premises, based upon both consumption and demand factors, at the
seasonally adjusted rate then payable by Landlord to the utility company, plus
an amount equal to seven (7%) percent thereof to reimburse Landlord for its
overhead, administration and supervision in connection therewith. For the
purpose of this Section 4.7 the rate to be paid by Tenant in the event of
submetering shall include any taxes, energy charges, demand charges, fuel
adjustment charges, rate adjustment charges, or other charges actually imposed
in connection therewith. If any tax is imposed upon Landlord's receipts from the
sale or resale of electrical energy to Tenant by any federal, state, city or
local authority, the pro rata share of such tax allocable to the electrical
energy service received by Tenant shall be passed on to and paid by Tenant as
additional rent if an to the extent permitted by law.
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ARTICLE 5
USE AND OCCUPANCY
Section 5.1. Tenant shall use and occupy the Premises for the Permitted Use
and for no other purpose.
Section 5.2. Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used, (1) for the business of
photographic, multilith or multigraph reproductions or offset printing, (2) for
a retail commercial banking, thrift institution, loan company, retail trust
company, depository or safe deposit business accepting deposits from the general
public, (3) for the sale of travelers checks, money orders, drafts, foreign
exchange or letters of credit or for the receipt of money for transmission, (4)
as a "retail" stockbroker's or dealer's office which shall be open to the
general public for off-the-street traffic (but not prohibiting general office
use and telephone solicitations), (5) by the United States government, the City
or State of New York, any foreign government, the United Nations or any agency
or department of any of the foregoing having or asserting sovereign immunity,
(6) for the preparation, dispensing or consumption of food or beverages in any
manner whatsoever (except for a pantry for the purpose of dispensing or
consumption of food or beverages to or by employees of Tenant employed at the
Premises), (7) as an employment agency, day-care facility, labor union, school,
or vocational training center (except for the training of employees of Tenant
intended to be employed at the Premises), (8) as a barber shop, beauty salon or
manicure shop, (9) for product display activities (such as those of a
manufacturer's representative), (10) offices of any public utility company, (11)
for data processing activities (other than those which are ancillary to an
otherwise Permitted Use), (12) for health care activities, (13) for clerical
support services or offices of public stenographers or typists (other than those
which are ancillary to an otherwise Permitted Use), (14) as a news or cigar
stand, (15) for retail or manufacturing use, (16) for any pornographic,
disreputable purpose, (17) as studios for radio, television or other media, or
(18) for any unlawful business purpose. Furthermore, the Premises shall not be
used for any purpose that would, in Landlord's reasonable judgment, tend to
lower the first-class character of the Building, create unreasonable or
excessive elevator or floor loads, impair or interfere with any of the Building
operations or the proper and economic heating, air-conditioning, cleaning or any
other services of the Building, interfere with the use of the other areas of the
Building by any other tenants, or impair the appearance of the Building.
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ARTICLE 6
ALTERATIONS
Section 6.1.
(A) Tenant shall not make or permit to be made any Alterations without
Landlord's prior written consent, which consent shall not be unreasonably
withheld or delayed, provided that: (i) he outside appearance of the Building
shall not be affected; (ii) the strength of the Building shall not be affected;
(iii) the structural parts of the Building shall not be adversely affected; (iv)
no part of the Building outside of the Premises shall be affected; and (v) the
Building Systems shall not be affected and the use of such systems by Tenant
shall not be increased beyond Tenant's allocable portion of the reserve capacity
thereof, if any. If consent to any Alterations is not given, Landlord shall
notify Tenant in sufficient detail to enable Tenant to amend its plans and
specifications regarding such Alterations to comply with Landlord's objections.
Notwithstanding the foregoing, Tenant, without Landlord's prior written consent,
may make non-structural Alterations (x) for which the cost of labor and
materials (as estimated by Landlord's architect, engineer or contractor) is less
than Fifty Thousand ($50,000.00) Dollars, either individually or in the
aggregate with any other Alteration constructed in any twelve (12) month period
and (y) that do not violate the provisions contained in clauses (i) through (v)
above; provided that (I) at least ten (10) days prior to commencing any such
Alterations, Tenant shall provide Landlord with five (5) sets of detailed plans
and specifications (except as otherwise provided in Section 6.2(B)) that comply
with all Requirements and (II) Tenant shall comply with all other requirements
of this Article 6.
(B) (1) Prior to making any Alterations, Tenant shall (i) submit to
Landlord five (5) sets of detailed plans and specifications (including layout,
architectural, electrical, mechanical and structural drawings), that comply with
all Requirements, for each proposed Alteration, and Tenant shall not commence
any such Alteration without first obtaining Landlord's approval of such plans
and specifications, which approval shall not be unreasonably withheld or delayed
provided that the conditions set forth in Section 6.1(A)(i)-(v) are complied
with, (ii) at Tenant's expense, obtain all permits, approvals and certificates
required by any Governmental Authorities, and (iii) furnish to Landlord
duplicate original policies or certificates thereof of worker's compensation
insurance (covering all personal to be employed by Tenant, and Tenant's
contractors and subcontractors, in connection with such Alteration) and
commercial general liability insurance (including premises operation, bodily
injury, personal injury, death, independent contrac-
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tors, products and completed operations, broad form contractual liability and
broad form property damage coverages) in such form, with such companies, for
such periods and in such amounts as Landlord may reasonably approve, naming
Landlord and its agents, any Lessor and any Mortgagee, as additional insured.
Upon completion of such Alteration, Tenant, at Tenant's expense, shall obtain
certificates of final approval of such Alterations required by any Governmental
Authority and shall furnish Landlord with copies thereof, together with the
"as-built" plans and specifications for such Alterations. All Alterations shall
be made and performed in accordance with the plans and specifications therefor
as approved by Landlord, all Requirements and the Rules and Regulations (subject
to the provisions of Article 11). All materials and equipment to be incorporated
in the Premises as a result of any Alterations shall be first quality and no
such materials or equipment shall be subject to any lien, encumbrance, chattel
mortgage, title retention or security agreement. In addition, no such Alteration
for which the cost of labor and materials (as estimated by Landlord's architect,
engineer or contractor) is in excess of Fifty Thousand ($50,000.00) Dollars,
either individually or in the aggregate with any other Alteration constructed in
any twelve (12) month period, shall be undertaken prior to Tenant's delivering
to Landlord such security for timely lien-free completion thereof as is
reasonably satisfactory to Landlord, and such Alteration shall be performed only
under the supervision of a licensed architect satisfactory to Landlord.
(2) Subject to Landlord's obligation not to unreasonably withhold
or delay its consent as set forth in Section 6.1(A), Landlord reserves the right
to disapprove any plans and specifications in part, to reserve approval of items
shown thereon pending its review and approval of other plans and specifications,
and to condition its approval upon Tenant making revisions to the plans and
specifications or supplying additional information. Tenant agrees that any
review or approval by Landlord of any plans and/or specifications with respect
to any Alteration is solely for Landlord's benefit, and without any
representation, warranty or liability whatsoever to Tenant or any other Person
with respect to the adequacy, correctness or sufficiency thereof in compliance
with Requirements, or otherwise.
(C) Except as otherwise provided herein, Tenant shall be permitted to
perform Alterations (for which Tenant has obtained Landlord's consent pursuant
to Sections 6.1(A) and 6.1(B) above), during Operating Hours, provided that such
work does not interfere with or interrupt the operations and maintenance of the
Building (as determined by Landlord) or unreasonably interfere with or interrupt
the use and occupancy of the Building by any other tenants in the Building.
Otherwise, Alterations shall be performed at such times and in such manner as
Landlord may from time to time reasonably designate. All Alterations shall
become
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a part of the Building and shall be Landlord's property from and after the
installation thereof and may not be removed or changed without Landlord's
consent. Notwithstanding the foregoing, if, on or before the date Landlord
approves Tenant's plans and specifications (or other documentation) for such
Alterations, Landlord notifies Tenant that Landlord is reserving the right to
require Tenant to remove those Alterations that exceed or are different than the
customary standard types of Alterations for general, executive and
administrative business offices in the Borough of Manhattan, City and State of
New York, then Landlord prior to the Expiration Date, may require Tenant to
remove such specified Alterations and to repair and restore in a good and
workmanlike manner to Building standard condition (reasonable wear and tear
excepted) any damage to the Premises or the Building caused by such removal. All
Tenant's Property shall remain the property of the Tenant and, on or before the
Expiration Date, may be removed from the Premises by Tenant at Tenant's option,
provided, however, that Tenant shall repair and restore in a good and
workmanlike manner any damage to the Premises or the Building caused by such
removal. The provisions of this Section 6.1(C) shall survive the expiration or
earlier termination of this Lease.
(D) All Alterations shall be performed, at Tenant's sole cost and
expense, by contractors, subcontractors or mechanics approved by the Landlord,
which approval shall not be unreasonably delayed. Prior to Tenant making any
Alterations, Landlord or Manager, at Tenant's request, shall furnish Tenant with
a list of contractors, subcontractors and mechanics who may perform Alterations
in or to the Premises on behalf of Tenant. Landlord's list shall include at
least three (3) contractors for each category of trade.
(E) (1) Any mechanic's lien filed against the Premises or the Real
Property for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be cancelled or discharged by Tenant, at
Tenant's expense, within sixty (60) days after Tenant receives notice that such
lien has been filed, by payment or filing of the bond required by law, and
Tenant shall indemnify and hold Landlord harmless from and against any and all
costs, expenses, claims, losses or damages resulting therefrom by reason
thereof.
(2) If Tenant shall fail to discharge such mechanic's lien within
the aforesaid period, then, in addition to any other right or remedy of
Landlord, Landlord may, but shall not be obligated to, discharge the same either
by paying the amount claimed to be due or by procuring the discharge of such
lien by deposit in court or bonding, and in any such event, Landlord shall be
entitled, if Landlord so elects, to compel the prosecution of an action for the
foreclosure of such mechanic's
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lien by the lienor and to pay the amount of the judgment, if any, in favor of
the lienor, with interest, costs and allowances.
(3) Any amount paid by Landlord for any of the aforesaid charges
and for all expenses of Landlord (including, but not limited to, reasonable
attorneys' fees and disbursements) incurred in defending any such action,
discharging said lien or in producing the discharge of said lien, with interest
on all such amounts at the maximum legal rate of interest then chargeable to
Tenant from the date of payment, shall be repaid by Tenant within ten (10) days
after written demand therefor, and all amounts so repayable, together with such
interest, shall be considered Additional Rent.
Section 6.2. Tenant shall reimburse Landlord, within five (5) Business Days
after demand therefor, for any reasonable out-of-pocket expense incurred by
Landlord for reviewing the plans and specifications for such Alterations or
inspecting the progress of completion of the same. Notwithstanding the
foregoing, there shall be no charge to Tenant for reviewing plans and
specifications for Alterations or for inspecting the progress of Alterations
made in connection with Tenant's initial move into the Premises.
Section 6.3. Tenant shall furnish to Landlord copies of records of all
Alterations and of the cost thereof within fifteen (15) days after the
completion of such Alterations.
ARTICLE 7
REPAIRS; FLOOR LOAD
Section 7.1. Tenant, at Tenant's sole cost and expense, shall take good
care of the Premises and the fixtures, equipment and appurtenances therein and
make all repairs thereto as and when needed to preserve them in good working
order and condition, except for (a) reasonable wear and tear, (b) obsolescence
and (c) damage for which Tenant is not responsible pursuant to the provisions of
Article 13. Except as otherwise provided in this Section 7.1, Tenant shall not
be obligated to repair any Building System. The design and decoration of the
elevator areas of each floor of the Premises and the public corridors of any
floor of the Premises occupied by more than one (1) occupant shall be under the
sole control of Landlord. Notwithstanding any provision contained in this Lease
to the contrary, all damage or injury to the Premises, and all damage or injury
to any other part of the Building, or to its fixtures, equipment and
appurtenances (including Building Systems), whether requiring structural or
non-structural repairs, caused by the moving of Tenant's
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Property or caused by or resulting from any act or omission of, or Alterations
made by, Tenant or Persons Within Tenant's Control, shall be repaired by Tenant,
at Tenants' sole cost and expense, to the reasonable satisfaction of Landlord
(if the required repairs are non-structural in nature and do not affect any
Building System), or by Landlord at Tenant's sole cost and expense (if the
required repairs are structural in nature or affect any Building System). All of
the aforesaid repairs shall be performed in a manner and with materials and
design of first-class and quality consistent with first-class office buildings
in Manhattan and shall be made in accordance with the provisions of Article 6.
If Tenant shall fail, after five (5) days notice (or such shorter period as may
be required because of an emergency), to proceed with due diligence to make
repairs required to be made by Tenant, the same may be made by Landlord, at the
expense of Tenant, and the expenses thereof incurred by Landlord, with interest
thereon at the Applicable Rate, shall be paid to Landlord, as Additional Rent,
within ten (10) days after rendition of a bill or statement therefor. Tenant
shall give Landlord notice of any defective condition in any Building System
located in, servicing or passing through the Premises promptly after Tenant
becomes aware of same.
Section 7.2. Tenant shall not place a load upon any floor of the Premises
which exceeds 50 pounds per square foot "live load". Tenant shall not locate or
move any safe, heavy machinery, heavy equipment, business machines, freight,
bulky matter or fixtures into or out of the Building without Landlord's prior
consent, which consent shall not be unreasonably withheld, and Tenant shall make
payment to Landlord of Landlord's costs in connection therewith (if such move is
not part of an Alteration). If such safe, machinery, equipment, freight, bulky
matter or fixture requires special handling (as determined by Landlord), Tenant
shall employ only persons holding a Master Rigger's license to do said work. All
work in connection therewith shall comply with the Requirements, and shall be
done during such hours as Landlord may designate. Business machines and
mechanical equipment shall be placed and maintained by Tenant, at Tenant's
expense, in settings sufficient, in Landlord's reasonable judgment, to absorb
and prevent vibration, noise and annoyance.
Section 7.3. Landlord shall operate, maintain and make all necessary
repairs (both structural and non-structural) to the Building Systems and the
public portions of the Building, both exterior and interior, in conformance with
standards applicable to non-institutional, first-class office buildings in
Manhattan, except for those repairs for which Tenant is responsible pursuant to
any other provision of this Lease. Landlord shall use reasonable efforts to
minimize interference with Tenant's use and occupancy of the Premises in making
any repairs, alterations, additions or improvements; provided, however, that
Landlord shall
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have no obligation to employ contractors or labor at so-called overtime or other
premium pay rates or to incur any other overtime costs in connection with such
repairs, alterations, additions or improvements. Notwithstanding the foregoing,
if Tenant shall so request, Landlord shall employ contractors or labor at
so-called overtime or other premium pay rates or incur other overtime costs in
making such repairs, alterations, additions or improvements, provided Tenant
shall pay to Landlord, as Additional Rent, within ten (10) days after demand
therefor, an amount equal to the excess costs incurred by Landlord by reason of
compliance with Tenant's request. Except as expressly provided in this Lease,
there shall be no allowance to 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 Premises, or its fixtures, appurtenances or equipment.
ARTICLE 8
WINDOW CLEANING
Section 8.1. Tenant shall not clean, nor require, permit, suffer or allow
any window in the Premises to be cleaned, from the outside in violation of
Section 202 of the 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.
ARTICLE 9
REQUIREMENTS OF LAW
Section 9.1. Tenant shall not do, and shall not permit Persons Within
Tenant's Control to do, any act or thing in or upon the Premises or the Building
which will violate any Requirements. Tenant shall, at Tenant's sole cost and
expense, take all action, including making any required Alterations necessary to
comply with all Requirements (including, but not limited to, applicable terms of
Local Laws No. 5 of 1973, No. 16 of 1984, No. 76 of 1985, No. 58 of 1987 and the
Americans With Disabilities Act of 1990 (the "ADA"), each as modified and
supplemented from time to time) which shall impose any violation, order or duty
upon Landlord or Tenant arising from, or in connection with, the Premises,
Tenant's occupancy, use or manner of use of the Premises (including, without
limitation, any occupancy, use or manner of use that constitutes a "place of
public accommodation" under the ADA), or any installations in the Premises, or
required by
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reason of a breach of any of Tenant's covenants or agreements under this Lease,
whether or not such Requirements shall now be in effect or hereafter enacted or
issued, and whether or not any work required shall be ordinary or extraordinary
or foreseen or unforeseen at the date hereof. Notwithstanding the preceding
sentence, Tenant shall not be obligated to perform any Alterations necessary to
comply with any Requirements, unless compliance shall be required by reason of
(i) any cause or condition arising out of any Alterations or installations in
the Premises (whether made by Tenant or by Landlord on behalf of Tenant), or
(ii) Tenant's particular use, manner of use or manner of occupancy on behalf of
Tenant of the Premises (in contra-distinction to mere office use), or (iii) any
breach of any of Tenant's covenants or agreements under this Lease, or (iv) any
wrongful act or omission by Tenant or Persons Within Tenant's Control, or (v)
Tenant's use or manner of use or occupancy of the Premises as a "place of public
accommodation" within the meaning of the ADA, except that, with respect to
Alterations necessary to comply with the requirements of the ADA, Tenant shall
only be obligated to perform Alterations in the Premises and not in common areas
of the Building and/or the Real Property. On the Commencement Date the Premises
shall comply with the provisions of the ADA.
Section 9.2. (A) Tenant covenants and agrees that Tenant shall, at Tenant's
sole cost and expense, comply at all times with all Requirements governing the
use, generation, storage, treatment and/or disposal of any "Hazardous Materials"
(as defined below), the presence of which results from or in connection with the
act or omission of Tenant or Persons Within Tenant's Control or the breach of
this Lease by Tenant or Persons Within Tenant's Control. The term Hazardous
Materials shall mean any biologically or chemically active or other toxic or
hazardous wastes, pollutants or substances, including, without limitation,
asbestos, PCBs, petroleum products and by-products, substances defined or listed
as "hazardous substances" or "toxic substances" or similarly identified in or
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601, et seq., and as a hazardous wastes under the
Resource Conservation and Recovery Act, 42 U.S.C. ss. 6010, et seq., any
chemical substance or mixture regulated under the Toxic Substance Control Act of
1976, as amended, 15 U.S.C.; 2601, et seq., any "toxic pollutant" under the
Clean Water Act, 33 U.S.C. ss. 466, et seq., as amended, any hazardous air
pollutant under the Clean Air Act, 42 U.S.C. ss. 7401, et seq., hazardous
materials identified in or pursuant to the Hazardous Materials Transportation
Act, 49 U.S.C. ss. 1802, et seq., and any hazardous or toxic substances or
pollutant regulated under any other Requirements. Tenant shall agree to execute,
from time to time, at Landlord's request, affidavits, representations and the
like concerning Tenant's best knowledge and belief regarding the presence of
Hazardous Materials in, on, under or about the Premises, the Building or the
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Land. Tenant shall indemnify and hold harmless all Indemnitees from and against
any loss, cost, damage, liability or expense (including attorneys' fees and
disbursements) arising by reason of any clean up, removal, remediation,
detoxification action or any other activity required or recommended of any
Indemnitees by the Building or the Premises of any Hazardous Materials, as a
result of or in connection with the act or omission of Tenant or Persons Within
Tenant's Control or the breach of this Lease by Tenant or Persons Within the
Tenant's Control. The foregoing covenants and indemnity shall survive the
expiration or any termination of this Lease.
(B) Prior to the Commencement Date, Landlord shall deliver to Tenant a
so-called "ACP-5" Certificate with respect to the Premises.
Section 9.3. If Tenant shall receive notice of any violation of, or
defaults under, any Requirements, liens or other encumbrances applicable to the
Premises, Tenant shall give prompt notice thereof to Landlord.
Section 9.4. If any governmental license or permit shall be required for
the proper and lawful conduct of Tenant's business and if the failure to secure
such license or permit would, in any way, affect Landlord or the Building, then
Tenant, at Tenant's expense, shall promptly procure and thereafter maintain,
submit for inspection by Landlord, and at all times comply with the terms and
conditions of, each such license or permit.
Section 9.5. Tenant, at Tenant's sole cost and expense and after notice to
Landlord, may contest, by appropriate proceedings prosecuted diligently and in
good faith, the legality or applicability of any Requirement affecting the
Premises provided that: (a) neither Landlord nor any Indemnitees shall be
subject to criminal penalties, nor shall the Real Property or any part thereof
be subject to being condemned or vacated, nor shall the certificate of occupancy
for the Premises or the Building be suspended or threatened to be suspended, by
reason of non-compliance or by reason of such contest; (b) before the
commencement of such contest, if Landlord or any Indemnitees may be subject to
any civil fines or penalties or if Landlord may be liable to any independent
third party as a result of such non-compliance, then Tenant shall furnish to
Landlord either (i) a bond of a surety company satisfactory to Landlord, in form
and substance reasonably satisfactory to Landlord, and in an amount at least
equal to Landlord's estimate of the sum of (A) the cost of such compliance, (B)
the penalties or fines that may accrue by reason of such non-compliance (as
reasonably estimated by Landlord) and (C) the amount of such liability to
independent third parties, and shall indemnify Landlord (and any Indemnities)
against the
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cost of such compliance and liability resulting from or incurred in connection
with such contest or non-compliance; or (ii) other security satisfactory in all
respects to Landlord; (c) such non-compliance or contest shall not constitute or
result in a violation (either with the giving of notice or the passage of time
or both) of the terms of any Mortgage or Superior Lease, or if such Superior
Lease or Mortgage conditions such non-compliance or contest upon the taking of
action or furnishing of security by Landlord, such action shall be taken or such
security shall be furnished at the expense of Tenant; and (d) Tenant shall keep
Landlord regularly advised as to the status of such proceedings.
Section 9.6. Landlord shall perform any Alterations necessary to comply
with the requirements of the ADA which impose a duty on Landlord or Tenant with
respect to the common areas of the Building to the extent that Landlord's
failure so to comply impairs Tenant's use or enjoyment of the Premises.
Section 9.7. Landlord shall comply with all Requirements which shall impose
a duty on Landlord or Tenant with respect to the Premises or the Real Property
with which Tenant is not required to comply, if an solely to the extent that,
such non-compliance by Landlord prevents or impairs Tenant from using the
Premises for its normal business operations.
ARTICLE 10
SUBORDINATION
Section 10.1. This Lease shall be subject and subordinate to each Superior
Lease and to each Mortgage, whether made prior to or after the execution of this
Lease, and to all renewals, extensions, supplements, amendments, modifications,
consolidations and replacements thereof or thereto, substitutions therefor, and
advances made thereunder. This clause shall be self-operative and no further
agreement of subordination shall be required to make the interest of any Lessor
or Mortgagee superior to the interest of the Tenant hereunder. In confirmation
of such subordination, however, Tenant shall promptly execute and deliver, at
its own cost and expense, any document, in recordable form if requested, that
Landlord, any Lessor or any Mortgagee may request to evidence such
subordination. If, in connection with the financing of the Real Property, the
Building or the interest of the lessee under any Superior Lease, or if, in
connection with the entering into of a Superior Lease, any lending institution
or Lessor, as the case may be, requests reasonable modifications of this Lease
that do not increase rent or change the Term of this Lease, or materially and
adversely affect the rights or obligations of Tenant under this Lease, Tenant
shall make such modifications.
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Section 10.2. If, at any time prior to the expiration of the Term, any
Superior Lease shall terminate or shall be terminated for any reason, or any
Mortgagee comes into possession of the Real Property or the Building or the
estate created by any Superior Lease by receiver or otherwise, Tenant agrees, at
the election and upon demand of any owner of the Real Property or the Building,
or of the Lessor, or of any Mortgagee in possession of the Real Property or the
Building, to attorn, from time to time, to any such owner, Lessor or Mortgagee
or any person acquiring the interest of Landlord as a result of any such
termination, or as a result of a foreclosure of the Mortgage or the granting of
a deed in lieu of foreclosure, upon the then executory terms and conditions of
this Lease (except as provided below), for the remainder of the Term, provided
that such owner, Lessor or Mortgagee, as the case may be, or receiver caused to
be appointed by any of the foregoing, is then entitled to possession of the
Premises. The provision of this Section 10.2 shall inure to the benefit of any
such owner, Lessor or Mortgagee, shall apply notwithstanding that, as a matter
of law, this Lease may terminate upon the termination of any such Superior
Lease, and shall be self-operative upon any such demand, and no further
agreement shall be required to give effect to said provisions. Tenant, however,
upon demand of any such owner, Lessor or Mortgagee, shall execute, from time to
time, agreements in confirmation of the foregoing provisions of this Section
10.2 shall be construed to impair any right otherwise exercisable by any such
owner, Lessor or Mortgagee.
Section 10.3. If requested by any Mortgagee, any Lessor or Landlord, Tenant
shall promptly execute and deliver, at no cost or expense to Tenant, any
document in accordance with the terms of this Article 10, in recordable form, to
evidence such subordination.
Section 10.4. At any time and from time to time upon not less than ten (10)
days' prior notice to Tenant or Landlord given by the other, or to Tenant given
by a Lessor or Mortgagee, Tenant or Landlord, as the case may be, shall, without
charge, execute, acknowledge and deliver a statement in writing addressed to
such party as Tenant, Landlord, Lessor or Mortgagee, as the case may be, may
designate, in form satisfactory to Tenant, Landlord, Lessor or Mortgagee, as the
case may be, certifying all or any of the following: (i) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that this Lease is in full force and effect as modified and stating the
modifications); (ii) whether the Term has commenced and Fixed Rent and
Additional Rent have become payable hereunder and, if so, the dates to which
they have been paid; (iii) whether or not,
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to the best knowledge of the signer of such certificate, Landlord is in default
in performance of any of the terms of this Lease and, if so, specifying each
such event of default of which the signer may have knowledge; (iv) whether
Tenant has accepted possession of the Premises; (v) whether Tenant has made any
claim against Landlord under this Lease and, if so, the nature thereof and the
dollar amount, if any, of such claim; (vi) either that Tenant does not know of
any default in the performance of any provision of this Lease or specifying the
details of any default of which Tenant may have knowledge and stating what
action Tenant is taking or proposes to take with respect thereto; (vii) that, to
the knowledge of Tenant, there are no proceedings pending or threatened against
Tenant before or by any court or administrative agency which, if adversely
decided, would materially and adversely affect the financial condition or
operations of Tenant or, if any such proceedings are pending or threatened to
the knowledge of Tenant, specifying and describing the same; and (viii) such
further information with respect to the Lease or the Premises as Landlord may
reasonably request or Lessor or Mortgagee may require; it being intended that
any such statement delivered pursuant hereto may be relied upon by any
prospective purchaser of the Real Property or any part thereof or of the
interest of Landlord in any part thereof, by any Mortgagee or prospective
Mortgagee, by any Lessor or prospective Lessor, by any tenant or prospective
tenant of the Real Property or any part thereof, or by any prospective assignee
of any Mortgage or by any assignee of Tenant or by any subtenant.
The failure of either Tenant or Landlord to execute, acknowledge and
deliver to the other statement in accordance with the provisions of this Section
10.4 within said ten (10) day period shall constitute an acknowledgment by
Tenant or Landlord, as the case may be, which may be relied on by any person who
would be entitled to rely upon any such statement, that such statement as
submitted by Landlord or Tenant, as the case may be, is true and correct.
Section 10.5. As long as any Superior Lease or Mortgage exists, Tenant
shall not seek to terminate this Lease by reason of any act or omission of
Landlord until Tenant has given written notice of such act or omission to all
Lessors and Mortgagees at such addresses as may have been furnished to Tenant by
such Lessors and Mortgagees and, if any such Lessor or Mortgagee, as the case
may be, notifies Tenant within thirty (30) days following receipt of such notice
of its intention to remedy such act or omission, until a reasonable period of
time shall have elapsed following the giving of such notice, during which period
such Lessors and Mortgagees shall have the right, but not the obligation, to
remedy such act or omission.
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Section 10.6. Landlord represents that, as the date of this Lease, there
are no existing liens (other than liens for real estate taxes, water and sewer
charges) to which this Lease is subject or subordinate and which by their
foreclosure could result in termination of this Lease.
ARTICLE 11
RULES AND REGULATIONS
Section 11.1. Tenant and Persons Within Tenant's Control shall comply with
the Rules and Regulations. Nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to enforce the Rules and Regulations
or the terms, covenants or conditions in any other lease against any other
tenant, and Landlord shall not be liable to Tenant for violation of the same by
any other tenant, its employees, agents, visitors or licenses. Landlord shall
not discriminate in enforcing the Rules and Regulations.
ARTICLE 12
INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT
Section 12.1.
(A) No Tenant shall entrust any property to any Building employee. Any
Building employee to whom any property is entrusted by or on behalf of Tenant in
violation of the foregoing prohibition shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor its agents shall be
liable for any damage to property of Tenant or of others entrusted to employees
of the Building, nor for the loss of or damage to property of Tenant by theft or
otherwise. Neither Landlord nor Landlord's agents shall be liable for any injury
or damage to persons or property, or interruption of Tenant's business,
resulting from fire or other casualty; nor shall Landlord or Landlord's agents
be liable for any such damage issued by other tenants or persons in the Building
or caused by the construction of any private, public or quasi-public work. The
foregoing shall not be deemed to release Landlord or Landlord's agents from
liability for any injury or damage to persons or property directly resulting
from (i) any latent defect in the Premises or the Building or (ii) Landlord's
negligent acts or omissions.
(B) If at any time any windows of the Premises are temporarily closed,
darkened or covered for any reason whatsoever, including Landlord's own acts, or
any of such windows are
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permanently closed, darkened or bricked-up by reason of any Requirements,
Landlord shall not be liable for any damage Tenant may sustain thereby, and
Tenant shall not be entitled to any compensation therefor nor abatement of Fixed
Rent or any other item of Rental, nor shall the same release Tenant from
Tenant's obligations hereunder not constitute an eviction. Landlord shall
endeavor to (i) give Tenant notice (which notice may be given orally) prior to
any temporary closing, darkening or bricking-up of any windows by reason of
repairs, maintenance, alterations or improvements, and (ii) cause any such work
to be performed as expeditiously as is practicable, but Landlord's failure to so
notify Tenant or to cause such work to be completed expeditiously shall not
impose any liability upon Landlord.
(C) Tenant shall give notice to Landlord, promptly after Tenant learns
thereof, of any accident, emergency, occurrence for which Landlord might be
liable, fire or other casualty and all damages to or defects in the Premises or
the Building for the repair of which Landlord might be responsible or which
constitutes Landlord's property. Such notice shall be given by telecopy or
personal delivery to the address(es) of Landlord in effect for notice.
Section 12.2. Tenant shall not do or permit to be done any act or thing in
or upon the Premises which will invalidate or be in conflict with the terms of
the New York State standard form of fire insurance with extended coverage, or
with rental, liability, boiler, sprinkler, water damage, war risk or other
insurance policies covering the Building and the fixtures and property therein
(hereinafter referred to as "Building Insurance"); and Tenant, at Tenant's own
expense, shall comply with all rules, orders, regulations and requirements of
the carriers of the Building Insurance (the "Insurance Requirements"), and shall
not do or permit anything to be done in or upon the Premises or bring or keep
anything therein or use the Premises in a manner which increases the rate of
premium for any of the Building Insurance or any property or equipment located
therein over the rate then in effect. Landlord shall notify Tenant of any
Insurance Requirements with which Tenant is to comply and which is not
specifically set forth in this Lease. Tenant's use of the Premises for the
Permitted Use does not violate any Insurance Requirements.
Section 12.3.
(A) If, by any reason of any failure of Tenant to comply with the
provisions of this Lease or the occurrence of any event covered by Tenant's
indemnity in Section 12.4(E), the rate of premium for Building Insurance or
other insurance on the property and equipment of Landlord or any other tenant or
subtenant in the Building shall be higher than it otherwise would be, Tenant
shall
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reimburse Landlord and/or such other tenants or subtenants in the Building for
that part of the insurance premiums thereafter paid by Landlord or by the other
tenants or subtenants in the Building which shall have been charged because of
such failure by Tenant; provided, however, Tenant's obligation to reimburse any
other tenant or subtenant in the Building shall be limited to only those tenants
or subtenants which have a similar obligation to reimburse under their leases or
subleases. Tenant shall make said reimbursement within 30 days after Landlord
shall have made demand for payment therefor.
(B) In any action or proceeding wherein Landlord and Tenant are
parties, a schedule or "make-up" of any insurance rate for the Building or
Premises issued by any Insurance Board establishing insurance premium rates for
the Building shall be prima facie evidence of the facts therein stated and of
the several items and charges in the insurance premium rates for then applicable
to the Building.
Section 12.4.
(A) Tenant shall, at Tenant's own cost and expense, obtain, maintain
and keep in full force and effect during the Term, for the benefit of Landlord,
the Manager, any Lessors, any Mortgagees and Tenant, commercial general
liability insurance (including premises operation, bodily injury, personal
injury, death, independent contractors, products and completed operations, broad
form contractual liability and broad form property damage coverages) in a
combined single limit amount of not less than Three Million and 00/100
($3,000,000.00) Dollars, against all claims, demands or actions with respect to
damage, injury death made by or on behalf of any person or entity, arising from
or relating to the conduct and operation of Tenant's business in, on or about
the Premises (which shall include Tenant's signs, if any), or arising from or
related to any act or omission of Tenant or of Persons Within Tenant's Control.
If Tenant shall install or maintain one or more pressure vessels to serve
Tenant's operations at the Premises, Tenant shall, at Tenant's own cost and
expense, obtain, maintain and keep in full force and effect, for the benefit of
Landlord, the Manager, any Lessors, any Mortgagees and Tenant, appropriate
boiler or other insurance coverage therefor in an amount not less than One
Million and 00/100 ($1,000,000.00) Dollars (it being understood and agreed,
however, that the foregoing shall not be deemed a consent by Landlord to the
installation and/or maintenance of any such pressure vessels in the Premises,
which installation and/or maintenance shall at all times be subject to the prior
written consent of Landlord). Whenever, in Landlord's reasonable judgment, good
business practice and changing conditions indicate a need for additional amounts
or different types of insurance coverage, Tenant shall, within thirty (30) days
after Landlord's request, obtain such
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Section 12.5.
(A) Landlord shall cause each policy carried by Landlord insuring the
Building against loss, damage or destruction by fire or other casualty, and
Tenant shall cause each insurance policy carried by Tenant and insuring the
Premises and Tenant's Alterations, leasehold improvements, space equipment,
furnishings, furniture, contents and fixtures against loss, damage or
destruction by fire or other casualty, to be written in a manner so as to
provide that the insurance company waives all rights of recovery by way of
subrogation against Landlord or Tenant in connection with any loss or damage
covered by any such policy. Neither party shall be liable to the other for the
amount of such loss or damage which is in excess of the applicable deductible,
if any, caused by fire or any of the risks enumerated in its policies, provided
that such waiver was obtainable at the time of such loss or damage. However, if
such waiver cannot be obtained, or shall be obtainable only by the payment of an
additional premium charge above that which is charged by companies carrying such
insurance without such waiver of subrogation, then the party undertaking to
obtain such waiver shall notify the other party of such fact and such other
party shall have a period of ten (10) days after the giving of such notice to
agree in writing to pay such additional premium if such policy is obtainable at
additional cost (in the case of Tenant, pro rata in proportion of Tenant's
rentable area to the total rentable area covered by such insurance); and if such
other party does not so agree or the waiver shall not be obtainable, then the
provisions of this Section 12.5 shall be null and void as to the risks covered
by such policy for so long as either such waiver cannot be obtained or the party
in whose favor a waiver of subrogation is desired shall refuse to pay the
additional premium. If the release of either Landlord or Tenant, as set forth in
the second sentence of this Section 12.5, shall contravene any law with respect
to exculpatory agreements, the liability of the party in question shall be
deemed not released, but no action or rights shall be sought or enforced against
such party unless and until all rights and remedies against the other's insurer
are exhausted and the other party shall be unable to collect such insurance
proceeds.
(B) The waiver of subrogation referred to in Section 12.5 (A) above
shall extend to the agents and employees of each party, but only if and to the
extent that such waiver can be obtained without additional charge (unless such
party shall pay such charge). Nothing contained in this Section 12.5 shall be
deemed to relieve either party from any duty imposed elsewhere in this Lease to
repair, restore and rebuild.
Section 12.6. Landlord (other than the Landlord named in this Lease) shall
maintain and keep in full force and effect or cause to be maintained and kept in
full force and effect, such
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insurance as any institutional mortgagee of the Building shall require. If there
is no institutional mortgage encumbering the Building, then Landlord (other than
the Landlord named in this Lease) shall maintain and keep in full force and
effect, with a reputable, good and solvent insurance company licensed to do
business in the State of New York, "all-risk" insurance, to the extent of 100%
of the replacement value of the building.
ARTICLE 13
DESTRUCTION BY FIRE OR OTHER CAUSES
Section 13.1. If the Premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give prompt written notice thereof to Landlord.
Landlord shall, subject to the provisions of Sections 13.2 and 13.3 below,
proceed with reasonable diligence, after receipt of the net proceeds of
insurance, to repair or cause to be repaired such damage at its expense, but in
no event greater than the scope of Landlord's construction of the Premises on
the Commencement Date; and, if the Premises, or any part thereof, shall be
rendered untenantable by reason of such damage and such damage shall not be due
to the fault of Tenant or Persons Within Tenant's Control, then the Fixed Rent
and the Escalation Rent hereunder, or an amount thereof apportioned according to
the area of the Premises so rendered untenantable (if less than the entire
Premises shall be so rendered untenantable), shall be abated for the period from
the date of such damage to the date when the repair of such damage shall have
been substantially completed. If Landlord, any Mortgagee or any Lessor shall be
unable to collect the insurance proceeds (including rent insurance proceeds)
applicable to such damage because of some action or inaction on the part of
Tenant or Persons Within Tenant's Control, then, after Tenant has been notified
by Landlord and Tenant has failed to correct such action or inaction within five
days after such notice has been given, the cost of repairing such damage shall
be paid by Tenant and there shall be no abatement of Fixed Rent or Escalation
Rent. Tenant covenants and agrees to cooperate with Landlord and any Lessor or
any Mortgagee in their efforts to collect insurance proceeds (including rent
insurance proceeds) payable to such parties. Landlord shall not be liable for
any delay which may arise by reason of adjustment of insurance on the part of
Landlord and/or Tenant, or any cause beyond the control of Landlord or
contractors employed by Landlord.
It is expressly understood that if Landlord is prevented from substantially
completing the repairs by reason of any acts of Tenant or Persons Within
Tenant's Control, including, without limitation, by reason of the performance of
any Alterations, or by reason of Tenant's failure or refusal to comply or to
cause
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its architects, engineers, designers and contractors to comply with any of
Tenant's obligations described or referred to in this Lease, then such work
shall be deemed Substantially Completed on the date when the work would have
been Substantially Completed but for such delay, and the expiration of the
abatement of Tenant's obligations to pay Fixed Rent and Escalation Rent shall
not be postponed by reason of such delay. Any additional costs to Landlord to
complete any work occasioned by such delay shall be paid by Tenant to Landlord,
as Additional Rent, within ten (10) days after demand therefor by Landlord.
Section 13.2. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or injury to the business of Tenant resulting in any way
from damage from fire or other casualty or the repair thereof. Nothing herein
contained shall be deemed to relieve Landlord from liability for damage to
persons or property directly resulting from Landlord's negligent acts or
omissions. Tenant understands that Landlord, in reliance upon Section 12.4, will
not carry insurance of any kind on Tenant's furnishings, furniture, contents,
fixtures, space equipment and leasehold improvements, and that Landlord shall
not be obligated to repair any damage thereto or replace the same.
Section 13.3
(A) Notwithstanding anything to the contrary contained in Sections
13.1 and 13.2 above, in the event that:
(i) 160,000 rentable square feet or more of the Building shall be
damaged by a fire or other casualty so that substantial alteration or
reconstruction of the Building shall, in Landlord's sole opinion, be required
(whether or not the Premises shall have been damaged by such fire or other
casualty and without regard to the structural integrity of the Building); or
(ii) the Premises shall be totally or substantially damaged or
shall be rendered wholly or substantially untenantable (and at least 150,000
rentable square feet of the Building other than the Premises also shall have
been totally or substantially damaged or shall be rendered wholly or
substantially untenantable),
then Landlord may, in Landlord's sole and absolute discretion, terminate this
Lease and the term and estate hereby granted, by notifying Tenant in writing of
such termination within sixty (60) days after the date of such damage. In the
event that such a notice of termination shall be given, then this Lease and the
term and estate hereby granted shall expire as of the date of termination stated
in said notice with the same effect as if that were the Fixed Expiration Date,
and the Fixed Rent and Escalation
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Rent hereunder shall be apportioned as of the date of such damage.
(B) Notwithstanding anything to the contrary contained in this Section
13.3, upon the written request of Tenant, Landlord shall deliver to Tenant an
estimate prepared by a reputable contractor selected by Landlord setting forth
such contractor's estimate as to the time reasonably required to repair such
damage. If the period to repair set forth in any such estimate exceeds 9 months,
Tenant may elect to terminate this Lease by notice to Landlord given not later
than thirty (30) days following Tenant's receipt of such estimate. If Tenant
exercises such election, this Lease and the term and estate hereby granted shall
expire as of the 30th day after notice of such election given by Tenant with the
same effect as if that were the Fixed Expiration Date, and the Fixed Rent and
Escalation Rent hereunder shall be apportioned as of such date.
Section 13.4. Except as may be provided in Section 12.5, nothing herein
contained shall relieve Landlord or Tenant from any liability to the other or to
the other's insurers in connection with any damage to the Premises or the
Building by fire or other casualty if Landlord or Tenant shall be legally liable
in such respect.
Section 13.5. This Lease shall be considered an express agreement governing
any case of damage to or destruction of the Building or any part thereof by fire
or other casualty, and Section 227 of the Real Property Law of the State of New
York providing for such a contingency in the absence of express agreement and
any other law of like import now or hereafter in force, shall have no
application in such case.
Section 13.6. (A) If the period to repair any damage to the Premises set
forth in the estimate referred to in Section 13.3 exceeds three (3) months,
then, provided Tenant has not exercised its option to cancel this Lease in
accordance with Section 13.3 (B), upon the written request of Tenant, Landlord
shall provide Tenant with temporary premises in the Building (the "Casualty
Temporary Premises"), if such premises are available, for any area of the
Premises that is rendered untenantable, until such time as the repair of the
Premises has been substantially completed in accordance with Section 13.1 of
this Lease and upon such substantial completion, Tenant shall surrender the
Casualty Temporary Premises in accordance with the provisions of this Lease,
including, but not limited to, Article 22.
Tenant's lease of the Casualty Temporary Premises shall be upon all of the
same terms and conditions as are contained in this Lease except that:
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(i) The Fixed Rent for the Casualty Temporary Premises shall be payable at
a rate per rentable square foot of Casualty Temporary Premises per annum equal
to the Fixed Rent then payable by Tenant pursuant to the terms of this Lease at
the rate per rentable square foot payable by Tenant for the Premises.
(ii) Tenant's Share shall be adjusted to reflect the rentable square feet
included in the casualty Temporary Premises.
(iii) Tenant shall accept the Casualty Temporary premises in their then
"as-is" condition and Landlord shall not be required to perform any work or
furnish any materials in order to prepare such Casualty Temporary Premises for
Tenant's occupancy or reimburse Tenant for any work performed by Tenant to ready
such space for occupancy.
(B) All costs incurred in connection with Tenant's relocation to the
Casualty Temporary Premises shall be borne solely by Tenant.
ARTICLE 14
EMINENT DOMAIN
Section 14.1. If the whole of the Real Property, the Building or the
Premises is acquired or condemned for any public or quasi-public use or purpose,
this Lease and the Term shall end as of the date of the vesting of title with
the same effect as if said date were the Fixed Expiration Date. If only a part
of the Real Property and not the entire Premises is so acquired or condemned
then, (1) except as hereinafter provided in this Section 14.1, this Lease and
the Term shall continue in effect but, if a part of the Premises is included in
the part of the Real Property so acquired or condemned, from and after the date
of the vesting of title, the Fixed Rent and Tenant's Share shall be reduced in
the proportion which the area of the part of the Premises so acquired or
condemned bears to the total area of the Premises immediately prior to such
acquisition or condemnation; (2) whether or not the Premises are affected
thereby, Landlord, at Landlord's option, may give to Tenant, within sixty (60)
days next following the date upon which Landlord receives notice of vesting of
title, a thirty (30) day notice of termination of this Lease; and (3) if the
part of the Real Property so acquired or condemned contains more than thirty
(30%) percent of the total area of the Premises immediately prior to such
acquisition or condemnation,or if, by reason of such acquisition or
condemnation, Tenant no longer has access to the Premises, Tenant, at Tenant's
option, may give to Landlord, within sixty (60) days next following the date
upon which Tenant receives notice of
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vesting of title, a thirty (30 day notice of termination of this Lease. If any
such thirty (30) day notice of termination is given, by Landlord or Tenant, this
Lease and the Term shall come to an end and expire upon the expiration of said
thirty (30) days with the same effect as if the date of expiration of said
thirty (30) days were the Fixed Expiration Date. If a part of the Premises is so
acquired or condemned and this Lease and the Term are not terminated pursuant to
the foregoing provisions of this Section 14.1, Landlord, at Landlord's cost and
expense, shall restore that part of the Premises not so acquired or condemned to
a self-contained rental unit, exclusive of Tenant's Alterations and Tenant's
Property. In the event of any termination of this Lease and the Term pursuant to
the provisions of this Section 14.1, the fixed Rent shall be apportioned as of
the date of sooner termination and any prepaid portion of the Fixed Rent or
Escalation Rent for any period after such date shall be refunded by Landlord to
Tenant.
Section 14.2. In the event of any such acquisition or condemnation of all
or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation. Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award. Nothing contained in this Section
14.2 shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the value of any Tenant's Property included in such
taking, and for any moving expenses, so long as Landlord's award is not reduced
thereby.
ARTICLE 15
ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.
Section 15.1. Except as otherwise provided in this Article 15, Tenant shall
not (a) assign this Lease (whether by operation of law, transfers of interests
in Tenant or otherwise); or (b) mortgage or encumber Tenant's interest in this
Lease, in whole or in part; or (c) sublet, or permit the subletting of, the
Premises or any part thereof; or (d) subject to the provisions of Section 15.8,
permit the Premises or any part thereof to by occupied or used for desk space,
mailing privileges or otherwise by any person other than Tenant. Tenant shall
not advertise or authorize a broker to advertise for a subtenant or assignee,
without in each instance, obtaining the prior written consent of Landlord, which
consent shall not be reasonably withheld or delayed.
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Section 15.2. If Tenant's interest in this Lease shall be assigned in
violation of the provisions of this Article 15, such assignment shall be invalid
and of no force and effect against Landlord; provided, however, that Landlord
may collect an amount equal to the then Fixed Rent plus any other item of Rental
from the assignee as a fee for its use and occupancy. If the Premises or any
part thereof are sublet to, or occupied by, or used by, any person other than
Tenant, whether or not in violation of this Article 15, Landlord, after default
by Tenant under this Lease, may collect any item of Rental or other sums paid by
the subtenant, user or occupant as a fee for its use and occupancy, and shall
apply the net amount collected to the Fixed Rent and the items of Rental
reserved in this Lease. No such assignment, subletting, occupancy, or use,
whether with or without Landlord's prior consent, nor any such collection or
application of Rental or fee for use and occupancy, shall be deemed a waiver by
Landlord of any term, covenant or condition of this Lease or the acceptance by
Landlord of such assignee, subtenant, occupant or user as Tenant hereunder, nor
shall the same, in any circumstances, relieve Tenant of any assignment,
subletting, occupancy or use shall not relieve Tenant from its obligation to
obtain the express prior consent of Landlord to any further assignment,
subletting, occupancy or use. Any person to which this Lease is assigned with
Landlord's consent shall be deemed without more to have assumed all of the
obligations arising under this Lease from and after the date of such assignment
and shall execute and deliver to Landlord, upon demand, an instrument confirming
such assumption. Notwithstanding and subsequent to any assignment, Tenant's
primary liability hereunder shall continue notwithstanding (a) any subsequent
amendment hereof, or (b) Landlord's forbearance in enforcing against Tenant any
obligation or liability, without notice to Tenant, to each of which Tenant
hereby consents in advance. If any such amendment operates to increase the
obligations of Tenant under this Lease, the liability under this Section 15.2 of
the assigning Tenant shall continue to be no greater than if such amendment had
not been made (unless such party shall have expressly consented in writing to
such amendment).
Section 15.3.
(A) For purposes of this Article 15, (i) the transfer of a majority of the
issued and outstanding capital stock of any corporate tenant, or of a corporate
subtenant, or the transfer of a majority of the total interest in any
partnership tenant or subtenant, or the transfer of control in any limited
partnership tenant or subtenant, however accomplished, whether in a single
transaction or in a series of related or unrelated transactions, shall be deemed
an assignment of this Lease, or of such sublease, as the case may be, except
that the transfer of the outstanding
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capital stock of any corporate tenant, or subtenant, shall be deemed not to
include the sale of such stock by persons or parties, other than those deemed
"affiliates" of Tenant within the meaning of Rule 144 promulgated under the
Securities act of 1933, as amended through the "over-the-counter market" or
through any recognized stock exchange, (ii) any increase in the amount of issued
and/or outstanding capital stock of any corporate tenant, or of a corporate
subtenant, and/or the creation of one or more additional classes of capital
stock of any corporate tenant or any corporate subtenant, in a single
transaction or a series or related or unrelated transactions, resulting in a
change in the legal or beneficial ownership of such tenant or subtenant so that
the shareholders of such tenant or subtenant existing immediately prior to such
transaction or series of transactions shall no longer own a majority of the
issued and outstanding capital stock of such tenant to subtenant, shall be
deemed an assignment of this Lease, (iii) an agreement by any other person or
entity, directly or indirectly, to assume Tenant's obligations under this Lease
shall be deemed an assignment, (iv) any person or legal representative of
Tenant, to whom Tenant's interest under this lease passes by operation of law,
or otherwise, shall be bound by the provisions of this Article 15, and (v) a
modification, amendment or extension of a sublease shall be deemed a sublease.
Tenant agrees to furnish to Landlord on request at any time such information and
assurances as Landlord may reasonably request that neither Tenant, nor any
previously permitted subtenant, has violated the provisions of this Article 15.
(B) The provisions of clauses (a), (c) and (d) of Section 15.1 shall not
apply, and the prior consent or approval of Landlord is not required, to
transactions with a corporation into or with which Tenant is merged or
consolidated or consolidated or with a Person to which substantially all of
Tenant's assets are transferred (provided such merger, consolidation or transfer
of assets is for a good business purpose and not principally for the purpose of
transferring the leasehold estate created by this Lease, and provided further,
that the assignee has an "Acceptable Net Worth" (as hereinafter defined), or, if
Tenant is a partnership, with a successor partnership, nor shall the provisions
of clauses (a), (c) and (d) of Section 15.1 apply to transactions with an entity
(an "affiliate") that controls or is controlled by Tenant or is under common
control with Tenant. As used in the preceding sentence, the term "acceptable Net
Worth" shall mean a net worth equal to not less than the product achieved by
multiplying the number 5 by the aggregate amount of Rental required to be paid
by Tenant under this Lease. Tenant shall notify Landlord before any such
transaction is consummated.
(C) The term "control" as used in this Lease (i) in the case of a
corporation shall mean ownership of more than fifty
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(50%) percent of the outstanding capital stock of that corporation, (ii) in the
case of a general partnership, shall mean more than fifty (50%) percent of the
general partnership interest of the partnership, and (iii) in the case of a
limited partnership, shall mean more than fifty (50%) percent of the general
partnership interests of such limited partnership.
(D) Notwithstanding any provisions contained in this Article 15 to the
contrary, clauses (c) and (d) of Section 15.1 of this Article 15 or, so long as
the assignee has a net worth of at least equal to or in excess of the net worth
of Tenant as of the date of this Lease, clause (a) of Section 15.1 of this
Article 15 shall not apply to transactions with a Person that controls, is
controlled by or is under common control with any of the following Persons or
any combination (without duplication) of any of the following Persons: Robert
Gladstone, Roger Gladstone, James Krantz*, Controllers' spouses, any of
Controllers' children and any spouse of Controllers' children, any of
Controllers' grandchildren and any trust established for the benefit of any of
the Persons referred to in this clause. Jonathan Krantz and David Nussbaum
(collectively, the "Controllers")
Section 15.4
(A) If Landlord shall not exercise its rights pursuant to paragraph (B) of
this Section 15.4, Landlord shall not unreasonably withhold or delay its consent
to a proposed subletting of the Premises, or an assignment of this Lease,
provided that in each such instance, the following requirements shall have been
satisfied (if Tenant proposes a partial sublet, references in this Section 15.4
to the Premises shall, unless the context otherwise requires, refer to such
portion):
(1) in the case of a proposed subletting, the listing for subletting of the
Premises shall not have included a proposed rental rate that is less than the
prevailing rate (the "Prevailing Rate") set by Landlord for comparable space in
the Building for a comparable space for a comparable term, as reasonably
determined by Landlord);
(2) without the prior consent of Landlord, which consent shall not be
unreasonably withheld or delayed, neither the availability of the Premises nor
the name and address of the Building shall be used in any advertising for
subletting of the Premises (or portion thereof) or an assignment of this Lease;
(3) no Event of Default shall have occurred and be continuing;
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(4) the proposed subtenant or assignee shall have a financial standing, be
of a character and be engaged in a business, and propose to use the Premises in
a manner in keeping with the standards in such respects of the other tenancies
in first class office buildings located in the Borough of Manhattan;
(5) if Landlord has or within four (4) months thereafter reasonably expects
to have comparable space available in the Building, the proposed subtenant or
assignee shall not be (x) a Person with whom Landlord is then negotiating or
discussing the leasing of space in the Building; or (y) a tenant in or occupant
of the Building or any Person that, directly or indirectly, is controlled by,
controls or is under common control with any such tenant or occupant;
(6) any subletting shall be expressly subject to all of the terms,
covenants, conditions and obligations on Tenants part to be observed and
performed under this Lease and any assignment or subletting shall be subject to
the further condition and restriction that this Lease or the sublease shall not
be further assigned, encumbered or otherwise transferred or the subleased
premises further sublet by the subtenant in whole or in part, or any part
thereof suffered or permitted by the assignee or subtenant to be used or
occupied by others, without the prior written consent of Landlord in each
instance, which consent shall not be unreasonable withheld or delayed;
(7) no subletting shall be for less than one-half of the Premises and shall
be regular in shape and at no time shall there be more than two (2) occupants,
including Tenant, in the Premises, all of whom shall have direct access through
existing public corridors to elevators, fire stairs and core rest rooms;
(8) Tenant shall reimburse Landlord on demand for any reasonable costs that
may be incurred by Landlord in connection with said assignment or sublease,
including, without limitation, an administrative fee of $1,000, and processing
fees, attorneys' fees and disbursements, and the costs of making investigations
as to the acceptability of the proposed assignee or subtenant;
(9) any sublease shall expressly provide that in the event of termination,
re-entry or dispossession of Tenant by Landlord under this Lease, Landlord may,
at its option, take over all of the right, title and interest of Tenant as
sublessor under such sublease, and such subtenant shall, at Landlord's option,
attorn to Landlord pursuant to the then executory provisions of such sublease,
except that Landlord shall not be (i) liable for any previous act or omission of
Tenant under such sublease, (ii) subject to any offset that theretofore accrued
to such
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subtenant against Tenant, (iii) bound by any previous modification of such
sublease or by any previous prepayment or more than one month's rent unless
previously approved by Landlord, (iv) bound by any covenant to undertake or
complete or make payment to or on behalf of a subtenant with respect to any
construction of the Premises or any portion thereof demised by such sublease and
(v) bound by any obligations to make any other payment to or on behalf of the
subtenant, except for services, repairs, maintenance and restoration provided
for under the sublease to be performed after the date of such termination,
reentry or dispossession by Landlord under this Lease and which Landlord is
required to perform hereunder with respect to the subleased space at Landlord's
expense;
(10) Tenant shall have complied with the requirements of paragraph (d) of
this section 15.4; and
(11) the nature of the occupancy, the use and the manner of use of the
Premises by the proposed subtenant or assignee shall not impose on Landlord any
requirements of the ADA in excess of those requirements imposed on Landlord in
the absence of such proposed subtenant or assignee or such occupancy, use or
manner of use, unless such proposed subtenant or assignee shall have agreed to
comply with each of such excess requirements and, at Landlord's option, shall
have furnished Landlord with such security as Landlord may require to assure
that such subtenant or assignee shall so comply.
(B) should Tenant desire to assign this Lease or sublet the Premises or
any portion thereof, other than as contemplated by Section 15.3(B), Tenant shall
give written notice (the "Sublease or Assignment Statement") thereof to Landlord
specifying the financial terms on which Tenant is willing to assign this Lease
of sublet the Premises or the applicable portion thereof and the effective date
of such assignment or subletting, which shall be no less than thirty (30) nor
more than ninety (90) days after the date of Tenant's notice to Landlord.
Landlord shall have the right, exercisable within twenty (20) days after
Landlord's receipt of the Sublease or Assignment Statement (including any
additional information reasonably requested by Landlord), to sublet (in its own
name or that of its designee) such portion of the Premises ("Recapture Space")
from Tenant on the terms and conditions set forth in the Sublease or Assignment
Statement, subject to the further provisions of paragraph (C) of the Section
15.4, or in the case of an assignment, the additional right to terminate this
Lease. If Landlord shall fail to notify Tenant within said twenty (20) day
period of Landlord's intention to exercise its rights pursuant to this Section
15.4(B), Landlord shall be deemed to have not exercised its right to sublet or
terminate, and Tenant shall be free to consummate a subletting or assignment on
the same material terms and conditions set forth in
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the Sublease or Assignment Statement, subject to the terms and conditions of
this Lease, including paragraph (A) of this Section 15.4. If Tenant shall not
enter into a sublease or assignment having financial terms (when measured in
their entirety), including the term thereof not more than ten (10%) percent more
favorable to the subtenant or assignee than the financial terms set forth in the
Sublease or Assignment Statement within two hundred seventy (270) days after the
delivery of the Sublease of Assignment Statement to Landlord, then the
provisions of Section 15.1 and this Section 15.4 shall again be applicable to
any other proposed subletting or assignment.
(C) (1) If Landlord shall exercise its option to sublet the Recapture
Space, then, notwithstanding the terms contained in the Sublease or Assignment
Statement, such sublease (a "Recapture Sublease") to Landlord or its designee as
subtenant (the "Recapture Subtenant") or assignee shall:
(a) be at a rate, at all times throughout the term of the
Recapture Sublease, equal to the lesser at that time of (i) the rent per square
foot payable under this Lease or (ii) (if Tenant had proposed to sublet the
Premises) the rate set forth in the Sublease or Assignment Statement;
(b) otherwise be upon the same terms and conditions as those
contained in the Sublease or Assignment Statement (other than, in the case of an
assignment, payment of consideration therefor to Tenant) and (except as modified
by the Sublease or Assignment Statement) the terms and conditions contained in
this Lease, except such as are irrelevant or inapplicable and except as
otherwise expressly set forth to the contrary in this paragraph (c);
(c) give the Recapture Subtenant the unqualified and unrestricted
right, without Tenan's permission, to assign such sublease and to further sublet
the Recapture Space or any part thereof and to make any and all changes,
alterations, and improvements in and to the Recapture space;
(d) provide in substance that any such changes, alterations, and
improvements made in the Recapture space may be removed, in whole or in part,
prior to or upon the expiration or other termination of the Recapture Sublease
provided that any material damage and injury caused thereby shall be repaired;
(e) provide that (i) the parties to such Recapture Sublease
expressly negate any intention that any estate created under the Recapture
Sublease be merged with any estate held by either of said parties, (ii) prior to
the commencement of the term of the Recapture Sublease, Tenant, at its expense,
shall
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make such alterations as may be required or reasonably deemed necessary by the
Recapture Subtenant to physically separate the Recapture Space from the balance
of the Premises and to provide appropriate means of access thereto and to the
public portions of the balance of the floor such as toilets, janitor's closets,
telephone and electrical closets, fire stairs, elevator lobbies, etc., and (iii)
at the expiration of the term of such Recapture Sublease, Tenant will accept the
Recapture Space in its then existing condition, broom clean; and
(f) provide that the Recapture Subtenant or occupant shall use and
occupy the Recapture Space for any purpose approved by Landlord (without regard
to any limitation set forth in the Sublease or Assignment statement).
(2) Until the Termination of a Recapture sublease, performance by Recapture
Subtenant under a Recapture Sublease shall be deemed performance by Tenant of
any similar obligation under this Lease and Tenant shall not be liable for any
default under this Lease or deemed to be in default hereunder or be liable for
any damages arising from any acts or omissions of the Recapture Subtenant
(including, without limitation, for the payment of items of rent which would be
payable by Recapture Subtenant under the Recapture Sublease or for the holding
over beyond the expiration of the term of the Recapture sublease by Recapture
Subtenant) or any "Person Within Recapture Subtenant's Control" if such default
is occasioned by or arises from any act or omission of Recapture subtenant under
the Recapture Sublease or is occasioned by or arises from any act or omission of
any occupant under the Recapture sublease or any Person Within Recapture
Subtenant's Control.
(3) If Recapture Subtenant is unable to give Tenant possession of the
Recapture Space at the expiration of the term of the Recapture Sublease by
reason of the holding over of retention of possession of any tenant or other
occupant, then (w) Recapture Subtenant shall continue to pay all charges
previously payable, and comply with all other obligations under the Recapture
Sublease until the date upon which Recapture Subtenant gives Tenant possession
of such Recapture Space free of occupancies, (x) neither the Expiration Date nor
the validity of this Lease shall be affected and (y) Tenant waives any rights
under Section 223-a of the Real Property Law of New York, or any successor
statute of similar import, to rescind this Lease and further waives the right to
recover any damages from Landlord or Recapture Subtenant that may result from
the failure of the Landlord to deliver possession of the Recapture Space at the
end of the term of the Recapture Sublease. If Recapture Subtenant holds over
beyond the term of the Recapture Sublease, Landlord shall use reasonable efforts
to remove Recapture Subtenant from the Recapture Space. Nothing in this Section
15.4 (C) (3) shall prohibit
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Tenant from exercising any rights available to it at law or in equity to evict
Recapture Subtenant or to otherwise obtain possession of the Recapture space at
the expiration of the term of the Recapture Sublease.
(4) The failure by the Landlord to exercise its option under Sections 15.4
(B) or (D) with respect to any subletting or assignment shall not be deemed a
waiver of such option with respect to any extension of such subletting or
assignment or any subsequent subletting or assignment.
(D) Upon obtaining a proposed assignee or subtenant, upon terms
satisfactory to Tenant, Tenant shall submit to Landlord in writing (i) the name
and business address of the proposed assignee or subtenant; (ii) in the case of
a sublease, a description of the portion of the Premises to be sublet; (iii) the
terms and conditions of the proposed assignment or subletting, including the
Sublease Rent or consideration payable for the assignment; (iv) the nature and
character of the business and credit of the proposed assignee or subtenant, and
(v) any other information that Landlord may reasonably request. if the financial
terms (when measured in their entirety), including the term thereof, of such
subletting or assignment are more favorable to the subtenant or the assignee by
more than ten (10%) percent than those offered to Landlord pursuant to Section
15.4 (B) of this Lease, Landlord shall have the further option, to be exercised
within 10 Business Days from submission of the information and documents
referred to in the preceding sentence, to sublet (in its own mane or that of its
designee) the Recapture Space from Tenant on the same terms and conditions of
such proposed assignment or subletting, subject to the further provisions of
paragraph (C) of this Section 15.4, or in the case of an assignment, the
additional right to terminate this Lease.
(E) Tenant shall deliver to Landlord, within five (5) days after execution
thereof by Tenant, but no less than 10 days prior to the effective date of the
contemplated sublease or assignment, an original counterpart of any executed
sublease or instrument of assignment, together with (i) Tenant's and the
subtenant's (or assignee's) affidavit that such sublease of assignment
instrument is the true and complete statement of the subletting or assignment
and reflects all sums and other consideration passing between the parties to the
sublease or assignment and (ii) all reports, returns, transferor and transferee
questionnaires and other documents required to be filed under Articles 31 and
31-B of the New York State Tax Law and under Chapter 21 of the New York City
Administrative Code.
Section 15.5. If Tenant sublets any portion of the Premises, Landlord
shall be entitled to and Tenant shall pay to Landlord, as Additional Rent (the
"Sublease Additional Rent"), a
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sum equal to fifty (50%) percent of any rents, additional charges and other
consideration payable under the sublease to Tenant by the subtenant in excess of
the Fixed Rent and Escalation Rent accruing during the term of the sublease in
respect of the subleased space (at the rate per square foot payable by Tenant
under this Lease) pursuant to the terms of this Lease (including, by not limited
to, sums paid for the sale or rental of Tenant's Property and Alterations made
by Tenant but less the then net unamortized or undepreciated cost of Tenant's
Property and Alterations make by Tenant on the basis of Tenant's federal income
tax return except that depreciation shall be computed on a straight-line basis
without regard to any renewal options) less all expenses reasonably and actually
incurred by Tenant on account of brokerage commissions, advertising costs, legal
fees, rent concessions and demising the premises so sublet. such sublease
Additional Rent shall be payable as and when received by Tenant.
Section 15.6. If Tenant shall assign this Lease, Landlord shall be entitled
to and Tenant shall pay to Landlord, as Additional Rent, an amount equal to
fifty (50%) percent of all sums and other consideration 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 Property and Alterations made by
Tenant but less the then net unamortized or undepreciated cost of Tenant's
Property and Alterations made by Tenant on the basis of Tenant's federal income
tax return except that depreciation shall be computed on a straight-line basis
without regard to any renewal options) less all expenses reasonably and actually
incurred by Tenant on account of brokerage commissions, legal fees, rent
concessions and advertising costs in connection with such assignment. such
Additional Rent shall be payable as and when received by Tenant from the
assignee.
Section 15.7. Landlord shall have no liability for brokerage commissions
incurred with respect to any assignment of this Lease or any subletting of all
or any part of the Premises by or on behalf of Tenant. Tenant shall pay, and
shall indemnify and hold Landlord harmless from and against, any and all cost,
expense (including reasonable attorneys' fees and disbursements) and liability
in connection with any compensation, commissions or charges claimed by any
broker or agent with respect to any such assignment or subletting.
Section 15.8. Notwithstanding anything to the contrary contained in this
Article 15, offices in the Premises may be used by or occupied by "affiliates"
of Tenant (as such term is defined in Section 15.3) for use only as executive
and general offices without the prior consent of Landlord, provided that Tenant
shall have given prior written notice to Landlord of such intended use and
occupancy.
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Section 15.9. Notwithstanding anything to the contrary contained in this
Article 15, Tenant may, upon prior written notice to Landlord, permit
"affiliates" of Tenant (as such term is defined in Section 15.3) to sublet all
or any part of the Premises for the Permitted Use subject however to compliance
with Tenant's obligations under this Lease. Such subletting shall not be subject
to the provisions of Sections 15.4 (B) and (D) of this Lease. such subletting
shall not be deemed to vest in any such "affiliate" any right or interest in
this Lease or the Premises nor shall it relieve, release, impair or discharge
any of Tenant's obligations hereunder.
ARTICLE 16
ACCESS TO PREMISES
Section 16.1.
(A) Tenant shall permit Landlord, Landlord's agents and public utilities
servicing the building to erect, use and maintain concealed ducts, pipes and
conduits in and through the Premises, provided the same do not unreasonably
interfere with Tenant's use of the Premises or decrease the usable area by more
than a de minimis amount. Landlord or Landlord's agents shall have the right to
enter the Premises at all reasonable times upon (except in case of emergency)
reasonable prior notice, which notice may be oral, to examine the same, to show
the same to prospective purchasers, Mortgagees or lessees of the building or
space therein, and to make such repairs, alterations, improvements or additions
(i) as Landlord may deem necessary or desirable to the Premises or to any other
portion of the Building, provided the same do not unreasonably interfere with
Tenant's use of the Premises or decrease the usable area by more than a de
minimis amount, of (ii) which Landlord may elect to perform at least ten (10)
days after notice (except in an emergency when no notice shall be required)
following Tenant's failure to make repairs or perform any work which Tenant is
obligated to make or perform under this Lease, or (iii) for the purpose of
complying with Requirements, and Landlord shall be allowed to take all material
into and upon the Premises that may be required therefor without the same
constituting an eviction or constructive eviction of Tenant in whole or in part,
provided the same do not unreasonably interfere with Tenant's use of the
Premises or decrease the usable area by more than a de minimis amount, and the
Fixed Rent (and any other item of Rental) shall in no respect abate or be
reduced by reason of said repairs, alterations, improvements or additions,
wherever located, or while the same are being made, by reason of loss or
interruption of business of Tenant, or otherwise.
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occupancy. If during the Term, a certificate of occupancy is issued for the
Building and/or the Premises, (i) Landlord shall provide Tenant with a copy of
such certificate(s) of occupancy, and (ii) Tenant shall not at any time use or
occupy the Premises in violation of such certificate(s) of occupancy and in the
event that any Government Authority shall hereafter at any time contend and/or
declare by notice, violation, order or in any other manner whatsoever that the
Premises are used for a purpose which is a violation of such certificate of
occupancy whether or not such use shall be a Permitted Use, Tenant shall, upon
five (5) days' written notice from Landlord, immediately discontinue such use of
the Premises.
ARTICLE 18
DEFAULT
SECTION 18.1. Each of the following events shall be an "Event of Default"
under this lease:
(A) if Tenant shall on any occasion default in the payment when due of
any installment of Fixed rent or in the payment when due of any other item of
Rental and such default shall continue for five (5) business days after Landlord
shall have given Tenant written notice of such default; or
(B) if Tenant shall fail more than three (3) times in any consecutive
period of twelve months to make a payment when due of any Rental, and Landlord
shall have given Tenant notice after the third such occurrence advising Tenant
of such occurrence; or
(C) if Tenant shall default in the observance or performance of any
other term, covenant or condition of this Lease on Tenant's part to be observed
or performed and Tenant shall fail to remedy such default within 15 days after
notice by Landlord to Tenant of such default, or if such default is of such a
nature that it cannot with due diligence by completely remedied within said
period of 15 days and the continuation of which for the period required for cure
will not subject Landlord to the risk of criminal liability or termination of
any Superior Lease or foreclosure of any Mortgage, if Tenant shall not, (i)
within said 15 day period advise Landlord of Tenant's intention duly to
institute all steps necessary to remedy such situation, (ii) duly institute
within said 15 day period, and thereafter diligently and continuously prosecute
to completion all steps necessary to remedy the same and (iii) complete such
remedy within such time after the date of the giving of said notice by Landlord
as shall reasonably be necessary; or
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(D) if Tenant shall fail to take occupancy of the Premises within
thirty (30) days after the Commencement Date or if the Premises shall become
abandoned; or
(E) if Tenant's interest in this Lease shall devolve upon or pass to
any person, whether by operation of law or otherwise, except as expressly
permitted under Article 15 hereof; or
(F) (1) if Tenant shall not, or shall be unable to, or shall admit in
writing Tenant's inability to, as to any obligation, pay Tenant's debts as they
become due; or
(2) if Tenant shall commence or institute any case, proceeding or
other action (a) seeking relief on Tenant's behalf as debtor, or to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
Tenant or Tenant's debts under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, or (b) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
property; or
(3) if Tenant shall make a general assignment for the benefit of
creditors; or
(4) if any case, proceeding or other action shall be commenced or
instituted against Tenant (a) seeking to have an order for relief entered
against Tenant as debtor or to adjudicate Tenant a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to Tenant or Tenant's
debts under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, or (b)
seeking appointment of a receiver, trustee, custodian or other similar official
for Tenant or for all or any substantial part of Tenant's property, which either
(i) results in any such entry of an order for relief, adjudication of bankruptcy
or insolvency or such an appointment or the issuance or entry of any other order
having a similar effect or (ii) remains undismissed for a period of sixty (60)
days; or
(5) if a trustee, receiver or other custodian shall be appointed
for any substantial part of the assets of Tenant which appointment is not
vacated or effectively stayed within sixty (60) days.
Section 18.2. If an Event of Default shall occur, Landlord may, at any time
thereafter, at Landlord's option, give written
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notice to Tenant stating that this Lease and the Term shall expire and terminate
on the date specified in such notice, which date shall not be less than five (5)
days after the giving of such notice, whereupon this Lease and the Term and all
rights of Tenant under this Lease shall automatically expire and terminate as if
the date specified in the notice given pursuant to this Section 18.2 were the
Fixed Expiration Date and Tenant immediately shall quit and surrender the
Premises, but Tenant shall remain liable for damages as provided herein or
pursuant to law. Anything contained herein to the contrary notwithstanding, if
such termination shall be stayed by order of any court having jurisdiction over
any proceeding described in Section 18.1(F), or by federal or state statute,
then, following the expiration of any such stay, or if the trustee appointed in
any such proceeding, Tenant or Tenant as debtor-in-possession fails to assume
Tenant's obligations under this Lease within the period prescribed therefor by
law or within one hundred twenty (120) days after entry of the order for relief
or as may be allowed by the court, or if said trustee, Tenant or Tenant as
debtor-in-possession shall fail to provide adequate protection of Landlord's
right, title and interest in and to the Premises or adequate assurance of the
complete and continuous future performance of Tenant's obligations under this
Lease, Landlord, to the extent permitted by law or by leave of the court having
jurisdiction over such proceeding, shall have the right, at its election, to
terminate this Lease on five (5) days' notice to Tenant, Tenant as
debtor-in-possession or said trustee and upon the expiration of said five (5)
day period this Lease shall cease and expire as aforesaid and Tenant, Tenant as
debtor-in-possession or said trustee shall immediately quit and surrender the
Premises as aforesaid.
Section 18.3. If, at any time, (i) Tenant shall consist of two (2) or more
persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease has been assigned, the word "Tenant" as used in Section 18.1(F), shall be
deemed to mean any one or more of the persons primarily or secondarily liable
for Tenant's obligations under this Lease. Any monies received by Landlord from
or on behalf of Tenant during the pendency of any proceeding of the types
referred to in Section 18.1(F) shall be deemed paid as compensation for the use
and occupancy of the Premises and the acceptance of any such compensation by
Landlord shall not be deemed an acceptance of rental or a waiver on the part of
Landlord of any rights under Section 18.2.
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ARTICLE 19
REMEDIES AND DAMAGES
Section 19.1.
(A) If any Event of Default shall occur, or this Lease and the Term
shall expire and come to an end as provided in Article 18:
(1) Tenant shall quit and peacefully surrender the Premises to
Landlord, and Landlord and its agents may immediately, or at any time after such
Event of default or after the date upon which this Lease and the Term shall
expire and come to an end, re-enter the Premises or any part thereof, without
notice, either by summary proceedings, or by any other applicable action or
proceeding or otherwise (without being liable to indictment, prosecution or
damages therefor), but excluding by force, and my repossess the Premises and
dispossess Tenant and any other persons from the Premises by summary proceedings
or otherwise (excluding by force) and remove any and all of their property and
effects from the Premises (and Tenant shall remain liable for damages as
provided herein or pursuant to law); and
(2) Landlord, at Landlord's option, may relet the whole or any part or
parts of the Premises from time to time, either in the name of Landlord or
otherwise, to such tenant or tenants, for such term or terms ending before, on
or after the Fixed Expiration Date, at such rent or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
Landlord's sole discretion, may determine; and Landlord, at Landlord's option,
may make such Alterations, in and to the Premises as Landlord, in Landlord's
sole discretion, shall consider advisable or necessary in connection with any
such reletting or proposed reletting, without relieving Tenant of any liability
under this Lease or otherwise affecting any such liability. Notwithstanding the
foregoing, Landlord agrees to list the availability of the Premises with one
independent leasing broker.
(B) Tenant hereby waives the service of any notice of intention to re-enter
or to institute legal proceedings to that end that may otherwise be required to
be given under any present or future law. Tenant, on its own behalf and on
behalf of all persons claiming through or under Tenant, including all creditors,
does further hereby waive any and all rights that Tenant and all such persons
might otherwise have under any present or future law to redeem the Premises, or
to re-enter or repossess the Premises, or to restore the operation of this
Lease, after (a) Tenant shall have been dispossessed by a judgment or by
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warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
re-entry, expiration or termination is by operation of law or pursuant to the
provisions of this Lease. The works "re-entry", "re-enter" and "re-entered" as
used in this Lease shall not be deemed to be restricted to their technical legal
meanings. In the event of a breach or anticipatory breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to enjoin such breach and the right to
invoke any other remedy allowed by law or in equity as if re-entry, summary
proceedings and other special remedies were not provided in this Lease for such
breach. The right to invoke the remedies hereinbefore set forth are cumulative
and shall not preclude Landlord from invoking any other remedy allowed at law or
in equity.
Section 19.2.
(A) If this Lease and the Term shall expire and come to an end as
provided in Article 18, or by or under any summary proceeding or any other
action or proceeding, or if Landlord shall re-enter the Premises as provided in
Section 19.1, or by or under any summary proceeding or any other action or
proceeding, then, in any of said events:
(1) Tenant shall pay to Landlord all Fixed Rent, Escalation Tent,
other Additional Rent and other items of Rental payable under this Lease by
Tenant to Landlord to the date upon which this Lease and the Term shall have
expired and come to an end or to the date of re-entry upon the Premises by
Landlord, as the case may be; and
(2) Tenant also shall be liable for and shall pay to Landlord, as
damages, any deficiency ("Deficiency") between the Rental for the period which
otherwise would have constituted the unexpired portion of the Term and the net
amount, if any, of rents collected under any reletting effected pursuant to the
provisions of Section 19.1(A)(2) for any part of such period (after first
deducting from the rents collected under any such reletting all of Landlord's
expenses in connection with the termination of this Lease, Landlord's re-entry
upon the Premises and such reletting including, but not limited to, all
repossession costs, brokerage commissions, attorneys' fees and disbursements,
alteration costs and other expenses of preparing the Premises for such
reletting); any such Deficiency shall be paid in monthly installments by Tenant
on the days specified in this Lease for payment of installments of Fixed Rent;
Landlord shall be entitled to recover from Tenant each monthly Deficiency as the
same shall arise, and no suit to collect the amount of the Deficiency for any
month shall prejudice Landlord's right to
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collect the Deficiency for any subsequent month by a similar proceeding.
(B) If the Premises, or any part thereof, shall be relet together with
other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Section 19.2. Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
exceed the fixed Rent reserved in this Lease. solely for the purposes of this
Article 19, the term "Escalation Rent" as used in Section 19.2(a) shall mean the
Escalation Rent in effect immediately prior to the Expiration Date, or the date
of re-entry upon the Premises by Landlord, as the case may be, adjusted to
reflect any increase pursuant to the provisions of Article 3 hereof for the
Operating Year immediately preceding such event. Nothing contained in Article 18
or this Article 19 shall be deemed to limit or preclude the recovery by Landlord
from Tenant of the maximum amount allowed to be obtained as damages by any
statute or rule of law, or of any sums or damages to which Landlord may be
entitled in addition to the damages set forth in this Section 19.2.
ARTICLE 20
FEES AND EXPENSES
Section 20.1. If an Event of Default shall have occurred, Landlord may (1)
perform the same for the account of Tenant, or (2) make any expenditure or incur
any obligation for the payment of money in connection with any obligation owed
to Landlord, including, but not limited to, reasonable attorneys' fees and
disbursements in instituting, prosecuting or defending any action or proceeding,
and in either case the cost thereof, with interest thereon at the Applicable
Rate, shall be deemed to be Additional Rent hereunder and shall be paid by
Tenant to Landlord within ten (10) days after rendition of any bill or statement
to Tenant therefor. In addition, Tenant shall pay Landlord any reasonable
attorneys' fees and disbursements incurred by Landlord in connection with any
proceeding in which the value for the use and occupancy of the Premises by
Tenant is being determined following a default by Tenant under this Lease.
Section 20.2. If Tenant shall fail to pay any installment of Fixed Rent,
Additional Rent or any other item of Rental for a period longer than ten (10)
days after the same shall have become due, Tenant shall pay to Landlord, in
addition to such installment of Fixed Rent, Additional Rent or other item of
Rental, as the case may be, as a late charge and as Additional Rent, a sum equal
to interest at the Applicable Rate on the amount unpaid,
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computed from the date such payment was due, without regard to any such grace
period, to and including the date of payment.
ARTICLE 21
NOR REPRESENTATIONS BY LANDLORD
Section 21.1. Landlord and Landlord's agents have made no representations
or promises with respect to the Building, the Real Property or 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
herein. Tenant shall accept possession of the premises in its "as is" condition
on the Commencement Date, subject to the completion of any Landlord's Work, and
Landlord shall have no obligation to perform any work or make any installations
in order to prepare the Premises for Tenant's occupancy. The taking of occupancy
of the whole or any part of the Premises by Tenant shall be conclusive evidence,
as against Tenant, that Tenant accepts possession of the same and that the
Premises and the Building were in good and satisfactory condition at the time
such occupancy was so taken and that the Premises were substantially as shown on
Schedule A. All references in this Lease to the consent or approval of Landlord
shall be deemed to mean the written consent or approval executed by Landlord and
no other consent or approval of Landlord shall be effective for any purpose
whatsoever.
ARTICLE 22
END OF TERM
Section 22.1. Upon the expiration or other termination of this Lease,
Tenant shall quit and surrender to Landlord the Premises, vacant, broom clean,
in good order and condition, ordinary wear and tear excepted, and Tenant shall
remove all Tenant's Alterations as may be required pursuant to Article 6. Tenant
shall also remove all of Tenant's Property and all other personal property and
personal effects of all persons claiming through or under Tenant, and shall pay
the cost of repairing all damage to the Premises and the Real Property
occasioned by such removal. Any Tenant's Property or other personal property
that remains in the Premises after the termination of this Lease shall be deemed
to have been abandoned and either may be retained by Landlord as its property or
may be disposed of in such manner as Landlord may see fit. If such Tenant's
Property or other personal property or any part thereof is sold, Landlord may
receive and retain the proceeds of such sale as the property of Landlord. Any
expense incurred by Landlord in removing or disposing of such
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Tenant's Property or other personal property or Alterations required to be
removed as provided in Article 6, as well as the cost of repairing all damage to
the Building or the Premises caused by such removal, shall be reimbursed to
Landlord by Tenant, as Additional Rent, on demand.
Section 22.2. If the expiration Date falls on a day which is not a Business
Day, then Tenant's obligation under Section 22.1 shall be performed on or prior
to the immediately preceding Business Day.
Section 22.3. Deleted.
Section 22.4. If the Premises are not surrendered upon the expiration or
other termination of this Lease, Tenant hereby indemnifies Landlord against
liability resulting from delay by Tenant in so surrendering the Premises,
including any claims made by any succeeding tenant or prospective tenant founded
upon such delay and agrees to be liable to Landlord for (i) any payment or rent
concession which Landlord may be required to make to any tenant obtained by
Landlord for all or any part of the Premises in order to induce such tenant not
to terminate its lease by reason of the holding-over by Tenant and (ii) the loss
of the benefit of the bargain if any such tenant shall terminate its lease by
reason of the holding-over by Tenant.
Section 22.5. Tenant's obligation under this Article shall survive the
expiration or termination of this Lease.
ARTICLE 23
POSSESSION
Section 23.1. If Landlord shall be unable to deliver possession of the
Premises on the Commencement Date or any additional space to be included within
the Premises on the specific date (if any) designated in this Lease, Landlord
shall not be subject to any liability therefor and the validity of this Lease
shall not be impaired thereby nor the Expiration Date extended, but (a) the
Commencement Date shall be postponed until five (5) Business Days following
notice from Landlord that the Premises or such additional space, as the case may
be, are available for occupancy by Tenant, and (b) the Rent Commencement Date
shall be postponed for the same number of days as the Commencement Date has been
postponed. Tenant expressly waives any right to rescind this Lease under Section
223-a of the New York Real Property Law or under any present or future statute
of similar import then in force and further expressly waives the right to
recover any damages that may result from Landlord's failure to deliver
possession of the Premises or such additional space on
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the specific date (if any) designated for the commencement of the Term. Tenant
agrees that the provisions of this Article 23 are intended to constitute "an
express provision to the contrary" within the meaning of said Section 223-a.
ARTICLE 24
NO WAIVER
Section 24.1. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid unless in writing signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord or Landlord's agents shall no
operate as a termination of this Lease or a surrender of the Premises. If Tenant
shall at any time desire to have Landlord sublet the Premises for Tenant's
account, Landlord or Landlord's agents are authorized to receive the keys for
such purpose without releasing Tenant from any of the obligations under this
Lease, and Tenant hereby relieves Landlord of any liability for loss of or
damage to any of Tenant's effects in connection with such subletting. Nothing
herein contained shall be deemed to operate to release Landlord from liability
for any injury or damage to persons or property directly resulting from
Landlord's negligent acts or omissions.
Section 24.2. 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 any of the Rules and Regulations, shall not prevent a subsequent act,
which would have originally constituted a violation, from having all of the
force and effect of an original violation. The receipt by Landlord of Fixed
Rent, Additional Rent or any other item of Rental with knowledge of the breach
of any covenant of this Lease shall not be deemed a waiver of such breach. The
failure of Landlord to enforce any of the Rules and Regulations against Tenant
or any other tenant in the Building shall not be deemed a waiver of any such
Rules and Regulations. No provision of this Lease shall be deemed to have been
waived by Landlord, unless such waiver shall be in writing and shall be signed
by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than
the Rental then due and payable shall be deem to be other than on account of the
earliest item(s) of Rental, or as Landlord may elect to apply the same, nor
shall any endorsement or statement on any check or any letter accompanying any
check or payment on any check or any letter accompanying any check or payment be
deemed an accord and satisfaction, and Landlord's right to recover the balance
due of the Rental or pursue any other remedy in this
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Lease provided. This Lease contains the entire agreement between the parties and
all prior negotiations and agreements are merged herein. Any executory agreement
hereafter made shall be ineffective to change, discharge or effect an
abandonment of this Lease in whole or in part unless such executory agreement is
in writing and signed by the party against whom enforcement of the change,
discharge or abandonment is sought.
ARTICLE 25
WAIVER OF TRIAL BY JURY
Section 25.1. Landlord and Tenant shall and they hereby do waive trial by
jury in any action, proceeding or counterclaim brought by either of them against
the other on any matters whatsoever arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy
of the Premises, whether during or after the Term, or for the enforcement of
any remedy under any statute, emergency or otherwise. If Landlord shall
commence any summary proceeding against Tenant, Tenant will not interpose
any counterclaim of whatever nature or description in any such proceeding
(unless failure to impose such counterclaim would preclude Tenant from asserting
in a separate action the claim which is the subject of such counterclaim), and
will not seek to consolidate such proceeding with any other action which may
have been or will be brought in any other court by Tenant or Landlord.
ARTICLE 26
INABILITY TO PERFORM
Section 26.1. This Lease and the obligation of Tenant to pay Rental
hereunder and to perform all of the other covenants and agreements hereunder on
the part of Tenant to be performed shall in no way be affected, impaired or
excused because Landlord is unable to fulfill any of Landlord's obligations
under this Lease, expressly or implicitly to be performed by Landlord, or
because Landlord is unable to make or is delayed in making any repairs,
additions, alterations, improvements or decorations, or is unable to supply or
is delayed in supplying any services, equipment or fixtures, if Landlord is
prevented from or delayed in so doing by reason of acts of God, casualty,
strikes or labor troubles, accident, government preemption in connection with an
emergency, Requirements, conditions of supply and demand which have been or are
affected by war or other emergency, or any other cause whatsoever, whether
similar or dissimilar to the foregoing, beyond Landlord's reasonable control
("Unavoidable Delays"). The inability of Landlord to pay for goods or services
or to meet its
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debts shall not excuse Landlord from performing its obligations under this
Lease.
ARTICLE 27
BILLS AND NOTICES
Section 27.1.
(A) Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications given
or required to be given under this Lease ("Notice(s)") shall be in writing and
shall be deemed sufficiently given or rendered if delivered by nationally
recognized overnight courier service against a signed receipt or if deposited in
a securely fastened, postage prepaid envelope in a depository that is regularly
maintained by the U.S. Postal Service, sent by registered or certified mail
(return receipt requested) and, in each case, addressed:
if to Tenant (a) at Tenant's address set forth in this Lease, if
given prior to Tenant's taking possession of the Premises, or (b) at
the Building, if given subsequent to Tenant's taking possession of the
Premises, or (c) at any place where Tenant or any agent or employee of
Tenant may be found if given subsequent to Tenant's vacating,
deserting, abandoning or surrendering the Premises, in each instance
with a copy to Graubard Mollen Horowitz Pomeranz & Shapiro, 600 Third
Avenue, New York, New York 10016-1903, Attn: Lester N. Henner, Esq.,
or
if to Landlord, at One Madison Avenue - Area 6Y, New York, New
York 10010. Attn: Associate General Counsel Real Estate Investments
and at 640 Fifth Avenue, 9th Floor, New York, New York 10019, Attn:
Regional Manager - Real Estate, and with copies to (x) Corbin
Silverman & Sanseverino, 805 Third Avenue, New York, New York 10022,
Attn: Raymond A. Sanseverino, Esq., (y) the Manager, and (z) any
Mortgagee or Lessor who may have requested the same, by Notice given
in accordance with the provisions of this Article 27, at the address
designated by such Mortgage or Lessor, or
to such other address(es) as either Landlord or Tenant may designate as its new
address(es) for such purpose by notice given to the other in accordance with the
provisions of this Article 27.
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(B) Notices shall be deemed to have been rendered or given (a) on the
date delivered if delivered by nationally recognized overnight courier service,
and (b) on the date mailed, if mailed as provided in Section 27.1(A). Notice
given by counsel for either party on behalf of such party or by the Manager on
behalf of Landlord shall be deemed valid notices if addressed and sent in
accordance with the provisions of this Article.
Section 27.2.
(A) Notwithstanding the provisions of Section 27.1, Notices requesting
services for Overtime Periods pursuant to Article 28 may be given by delivery to
the Building superintendent or any other person in the Building designated by
Landlord to receive such Notices, and bills may be rendered by delivering them
to the Premises without the necessity of a receipt.
(B) If there shall occur any interruption of certified and registered
mail service, lasting more than five (5) consecutive Business Days, Notices may
be given by telegram or telecopy (fax).
ARTICLE 28
SERVICES AND EQUIPMENT
Section 28.1. Landlord shall, at Landlord's expense:
(A) Provide passenger elevator service to the Premises on Business
Days during Operating Hours and, subject to Section 28.3, have one elevator on
call at all other times. Tenant agrees that Landlord may, at its election,
install elevators with or without operators and may change the same from time to
time.
(B) Provide one (1) freight elevator serving the Premises on call on a
"first come, first served" basis on Business Days from 7:00 a.m. to 4:30 p.m.,
and on a reservation, "first come, first served" basis from 4:30 p.m. to 7:00
a.m. on Business Days and at any time on days other than Business Days.
(C) Furnish and distribute to the Premises, through the HVAC System,
during Operating Hours, air-conditioning from May 15 through October 15 and
heating from October 16 through May 14 in accordance with the heating and
cooling specifications annexed hereto as Schedule C. Landlord will not be
responsible for the failure of the HVAC System if such failure results from the
occupancy of the Premises by more than such an average of one person for each
100 square feet in any separate room or area or if Tenant shall install and
operate machines, incandescent
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lighting and appliances the total connection electrical load of which exceeds
six watts per square foot in any separate room or area. If Tenant shall occupy
the Premises at an occupancy rate of greater than that for which the HVAC System
was designed, or if the total connected electrical load shall exceed six watts
per square foot, or if Tenant's partitions shall be arranged in such a way as to
interfere with the normal operation of the HVAC System, Landlord may elect to
make changes to the HVAC System or the ducts through which it operates required
by reason thereof, and the cost thereof shall be reimbursed by Tenant to
Landlord, as Additional Rent, within ten (10) days after presentation of a bill
therefor. Landlord, throughout the Term, shall have free access to all
mechanical installations of Landlord, included by not limited to air-cooling,
fan, ventilating and machine rooms and electrical closets, and Tenant shall not
construct partitions or other obstructions that may interfere with Landlord's
access thereto, or interfere with the moving of Landlord's equipment to and from
the enclosures containing said installations. Neither Tenant nor its agents,
employees or contractors shall at any time enter the said enclosures or tamper
with, adjust, touch or otherwise in any manner affect said mechanical
installations. Landlord's obligations under this Section 28.1 and under Section
28.2 are subject to applicable Requirements that may limit the hours or the
extent to which Landlord is permitted to supply HVAC. Tenant agrees to keep and
cause to be kept closed all of the windows in the Premises whenever the
air-cooling system is in operation and agrees to lower and close the blinds when
necessary because of the sun's position whenever the air-cooling system is in
operation. Landlord makes no representation as the habitability of the Premises
at any time the HVAC System is not in operation. Tenant hereby expressly waives
any claims against the Landlord arising out of the cessation of operation of the
HVAC System, or the suitability of the Premises when the same is not in
operation, whether due to normal scheduling or the reasons set forth in Section
28.3.
(D) Provide hot and cold water for ordinary drinking, cleaning, and
lavatory purposes. If Tenant requires, uses or consumes water for any purposes
in addition to ordinary drinking, cleaning or lavatory purposes, Landlord may
install a water meter and thereby measure Tenant's water consumption for all
such additional purposes. In such event (1) Tenant shall pay Landlord for the
cost of the meter and the cost of the installation thereof as Additional Rent
and through the duration of Tenant's occupancy Tenant shall keep said meter and
equipment in good working order and repair at Tenant's own cost and expense; (2)
Tenant shall pay for water consumed as shown on said meter, as and when bills
are rendered, as Additional Rent, and on default in making such payment Landlord
may pay such charges and collect the same from Tenant; and (3) Tenant shall not
pay the sewer rent or any other tax, rent, levy or charge that now or hereafter
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is assessed or imposed or becomes a lien upon the Premises or the Real Property
pursuant to any Requirements made or issued in connection with any such metered
use, consumption, maintenance or supply of water, water system, or sewage
connection or system. The bill rendered by Landlord for the charges described in
clause (3) above shall be based upon Tenant's consumption and shall be payable
by Tenant as Additional Rent within ten (10) days of rendition.
(E) Provided Tenant shall keep the Premises in order, Landlord, at
Landlord's expense, shall cause the Premises, excluding any portions thereof
used as security areas or used for the storage, preparation, service or
consumption of food or beverages, to be cleaned on Business Days in accordance
with the cleaning specifications annexed to this Lease as Schedule D. If,
however, any additional cleaning of the Premises is to be done by Tenant, it
shall be done at Tenant's sole expense, in a manner reasonably satisfactory to
Landlord and no one other than persons approved by Landlord shall be permitted
to enter the Premises or the Building for such purpose. Tenant shall pay to
Landlord the cost of removal of any of Tenant's refuse and rubbish from the
Premises and the Building (i) to the extent that the same, in any one day,
exceeds the average daily amount of refuse and rubbish usually attendant upon
the use of such Premises as offices (the "Average Rubbish Amount"), as described
and included in Landlord's cleaning contract for the Building or recommended by
Landlord's cleaning contractor, and (ii) related to or deriving from the
preparation or consumption of food or drink. The Average Rubbish Amount is one
waste basket per employee and one waste basket per particular service area (such
as a pantry or photocopying room). Bills for the same shall be rendered by
Landlord to Tenant at such time as Landlord may elect and shall be due and
payable as Additional Rent, within ten (10) days after the time rendered.
Tenant, at Tenant's expense, shall cause the Premises to be exterminated on a
monthly basis to the satisfaction of Landlord and additionally shall cause all
portions of the Premises used for the storage, preparation, service or
consumption of food or beverages to be cleaned daily in a manner reasonably
satisfactory to Landlord, and to be treated against infestation by vermin,
rodents or roaches, whenever there is evidence of any infestation. Tenant shall
not permit any person to enter the Premises or the Building for the purposes of
providing such extermination services, unless such persons have been approved by
Landlord. If so requested by Landlord, Tenant, at Tenant's expense, shall store
any refuse generated by the consumption of food or beverages on the Premises in
a cold box or similar facility.
Section 28.2. The Fixed Rent does not reflect or include any charge to
Tenant for the furnishing of any freight elevator facilities or HVAC to the
Premises during periods ("Overtime
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Periods") other than the hours and days set forth above. Accordingly, if
Landlord furnishes such freight elevator facilities or HVAC to the Premises at
the request of Tenant during Overtime Periods, Tenant shall pay Landlord
Additional Rent for such services at the standard rates then fixed by Landlord
for the Building or if no such rates are then fixed, at comparable rates then
being charged by first-class office buildings in the Borough of Manhattan, the
City and State of New York. Notwithstanding the foregoing, Tenant shall not be
required to pay for use of the freight elevator during Overtime Periods in
connection with its initial move into the Premises. Landlord shall not charge
Tenant a higher rate for services during Overtime periods than is being charged
by Landlord to any other tenant of the Building. If more than one tenant
utilizing the same system as Tenant requests the identical service during the
same Overtime Periods as Tenant, charge to Tenant will be adjusted on a pro rata
basis. Landlord shall not be required to furnish any such services during any
Overtime Periods (i) unless Landlord has received advance notice from Tenant
requesting such services at least twenty-four (24) hours prior to the day upon
which such services are requested or by 2:00 p.m. of the last preceding Business
Day if such Overtime Periods are to occur on a day other than a Business Day or
(ii) if Tenant is in material default in its obligations under this Lease, then
failure by Landlord to furnish or distribute any such services during such
Overtime Periods shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any abatement or diminution of Rental, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business or otherwise.
Section 28.3. (A) Landlord shall maintain the Building Systems in
accordance with the provisions of Section 7.3. Landlord reserves the right to
stop the furnishing of the Building services and to stop service of the Building
Systems, when necessary, by reason of accident, or emergency, or for Alterations
in the judgment of Landlord desirable or necessary to be made, until said
Alterations shall have been completed; and Landlord shall have no responsibility
or liability for failure to supply air-conditioning, ventilation, heat,
elevator, plumbing, electric, or other services during said period or when
prevented from so doing by strikes, lockouts, difficulty of obtaining materials,
accidents or by any cause beyond Landlord's reasonable control, or by
Requirements or failure of electricity, water, steam, coal, oil or other
suitable fuel or power supply, or inability by exercise of reasonable diligence
to obtain electricity, water, steam, coal, oil or other suitable fuel or power.
No diminution or abatement of rent or other compensation shall or
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will be claimed by Tenant as a result therefrom, nor shall this Lease or any of
the obligations of Tenant be affected or reduced by reason of such interruption,
curtailment or suspension, nor shall the same constitute an actual or
constructive eviction. Landlord shall use reasonable efforts to minimize
interference with Tenant's use and occupancy of the Premises in making any
repairs, Alterations, additions or improvements, provided, however, that
Landlord shall have no obligations to employ contractors or labor at so-called
overtime or other premium pay rates or to incur any other overtime costs in
connection with such repairs, Alterations, additions or improvements.
(B) If, by reason of Landlord's failure to make repairs or
replacements required to be made by Landlord pursuant to this Lease (a "Landlord
Failure"), the Building air-conditioning system or the Building electrical
system or the Building elevators serving the Premises shall become inoperable,
and as a result thereof a material portion of the Premises is rendered
untenantable and Tenant ceases to use such portion of the Premises for the
conduct of its business and such Landlord Failure continues unremedied for more
than ten (10) consecutive Business Days after Tenant gives written notice to
Landlord of the Landlord Failure and the fact that a material portion of the
Premises has been rendered untenantable by reason of such Landlord Failure and
that Tenant shall have ceased using such portion of the Premises for the conduct
of its business, then the Fixed Rent and the Escalation Rent hereunder shall be
abated during the time that such portion remains untenantable and unused by
reason of such Landlord Failure after such tenth (10th) Business Day,
apportioned according to the rentable area of the Premises so rendered
untenantable and unused. Nothing contained in this Section 28.3(B) is intended
to, or shall be deemed to, make any event described in or contemplated by
Articles 13, 14, 26 or 34 or Sections 7.3 or 28.3(A) or any event resulting from
an act or omission of Tenant or Persons Within Tenant's Control a Landlord
Failure.
Section 28.4. Tenant agrees to abide by all requirements which Landlord may
prescribe for the proper protection and functioning of its Building Systems and
the furnishing of the Building services. Tenant further agrees to cooperate with
Landlord in any conservation effort pursuant to a program or procedure
promulgated or recommended by ASHRAE or any Requirements.
Section 28.5. Landlord shall have no obligation to clean, repair, replace
or maintain any "private" plumbing fixtures or facilities (i.e., plumbing
fixtures and facilities other than those that would be the common toilets in a
multi-tenant floor) or the rooms in which they are located.
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ARTICLE 29
PARTNERSHIP TENANT
Section 29.1 If Tenant is a partnership, or is comprise, of two (2) or more
persons, individually or as co-partners of a partnership (any such partnership
and such persons are referred to in this Article 29 as "Partnership Tenant"), or
if Tenant's interest in this Lease shall be assigned to a Partnership Tenant,
the following provisions shall apply to such Partnership Tenant: (a) the
liability of each of the parties comprising Partnership Tenant shall be joint
and several; (b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by (i) any written agreement that
may hereafter be executed by Partnership Tenant or any successor entity,
changing, extending or discharging this lease, in whole or in part, or
surrendering all or any part of the Premises to Landlord, and (ii) any Notices
that may hereafter be given by Partnership Tenant or by any of the parties
comprising Partnership Tenant; (c) any Notices given or rendered to Partnership
Tenant or to any of such parties shall be binding upon Partnership Tenant and
all such parties; (d) if Partnership Tenant admits new partners, all of such new
partners shall, by their admission to Partnership Tenant, be deemed to have
assumed joint and several liability for the performance of all of the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed; (e) Partnership Tenant shall give prompt notice to Landlord of the
admission of any such new partners, and upon demand of Landlord, shall cause
each such new partner to execute and deliver to Landlord an agreement in form
satisfactory to Landlord, wherein each such new partner assumes joint and
several liability for the performance of all the terms, covenants and conditions
of this Lease on Tenant's part to be observed and performed (but neither
Landlord's failure to request any such agreement nor the failure of any such new
partner to execute or deliver any such agreement to Landlord shall vitiate the
provisions of clause (d) of this Article 29); and (f) any present or future
partner of Partnership Tenant who is no longer a partner of Partnership Tenant
at the time of any default under this Lease shall, nevertheless, remain liable
for the obligations of Tenant under this Lease, as if any such partner had been
a partner of Partnership Tenant on the date of such default. Schedule E annexed
sets forth the names and residence addresses of each natural person who is a
partner of Partnership Tenant and the names and business addresses of each such
entity which is a partner of Partnership Tenant.
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ARTICLE 30
VAULT SPACE
Section 30.1. Notwithstanding anything contained in this Lease or indicated
on any sketch, blueprint or plan, any vaults, vault space or other space outside
the boundaries of the Real Property are not included in the Premises. Landlord
makes no representation as to the location of the boundaries of the Real
Property. All vaults and vault space and all other space outside the boundaries
of the Real Property which Tenant may be permitted to use or occupy are to be
used or occupied under a revocable license, and if any such license is revoked,
or if the amount of such space is diminished or required by any Government
Authority or by any public utility company, such revocation, diminution or
requisition shall not constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of Rental, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord. Any fee, tax or charge imposed by any Government Authority for
any such vaults, vault space or other space occupied by Tenant shall be paid by
Tenant.
ARTICLE 31
SIGNS
Section 31.1. The location, size, materials, quality, design, color and
lettering of any signs (collectively, the "Sign Qualities") desired by Tenant
and to be installed in any area which is visible from outside the Premises shall
be subject to the prior approval of Landlord, which approval shall not be
unreasonably withheld or delayed. Landlord hereby approves a sign on the door to
the Premises which is substantially the same in quality, color, design,
lettering and materials as Tenant's sign on the twelfth floor of the Building;
provided, however, the foregoing shall not be deemed to indicate Landlord's
prior approval to any other Sign Qualities. Landlord's prior approval of the
Sign Qualities shall not be required with respect to any sign desired by tenant
which shall not be visible from outside the Premises. At Landlord's option,
Landlord shall install any such signs following Tenant's request therefor, and
Tenant shall pay all costs associated with such installation, as Additional
Rent, within ten (10) days after demand therefor.
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ARTICLE 32
BROKER
Section 32.1. Tenant represents and warrants to Landlord that Tenant has
not dealt with any broker or Person in connection with this Lease other than the
Broker(s). The execution and delivery of this Lease by Tenant shall be
conclusive evidence that Tenant acknowledges that Landlord has relied upon the
foregoing representation and warranty. Tenant shall indemnify and hold harmless
Landlord from and against any and all claims for commission, fee or other
compensation by any Person other than the Broker(s) who claims to have dealt
with Tenant in connection with this Lease and for any and all costs incurred by
Landlord in connection with such claims, including, without limitation,
attorneys' fees and disbursements. This provision shall survive the expiration
or earlier termination of this Lease.
ARTICLE 33
INDEMNITY
Section 33.1. Tenant shall indemnify and save harmless the Indemnitees from
and against (a) all claims of whatever nature against the Indemnitees arising
from any act, omission or negligence of Tenant or Persons Within Tenant's
control, (b) all claims against the Indemnitees arising from any accident,
injury or damage whatsoever caused to any person or to the property of any
person and occurring in or about the Premises during the Term or during Tenant's
occupancy of the Premises, unless and to the extent caused by the act, omission
or negligence of Landlord or its principals, officers and employees, (c) all
claims against the Indemnitees arising from any accident, injury or damage
occurring outside of the Premises but anywhere within or about the Real
Property, where such accident, injury or damage results or is claimed to have
resulted from an act, omission or negligence of Tenant or Persons Within
Tenant's Control, and (d) any breach, violation or non-performance of any
covenant, condition or agreement contained in this Lease to be fulfilled, kept,
observed and performed by Tenant. This indemnity and hold harmless agreement
shall include indemnity from and against any and all liability, fines, suits,
demands, costs and expenses of any kind or nature (including, without
limitation, attorneys' fees and disbursements) incurred in or in connection with
any such claim or proceeding brought thereon, and the defense thereof.
Section 33.2. If any claim, action or proceeding is made or brought against
any Indemnitee, against which claim, action or
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proceeding Tenant is obligated to indemnify such Indemnitee pursuant to the
terms of this Lease, then, upon demand by the Indemnitee, Tenant, at its sole
cost and expense, shall resist or defend such claim, action or proceeding in the
Indemnitee's name, if necessary, by such attorneys as the Indemnitee may select,
including, without limitation, attorneys for the Indemnitee's insurer. The
provisions of this Article 33 shall survive the expiration or earlier
termination of this Lease.
ARTICLE 34
ADJACENT EXCAVATION; SHORING
Section 34.1. If an excavation shall be made upon land adjacent to the
Building, or shall be authorized to be made, Tenant shall, upon reasonable
advance notice, afford to the person causing or authorized to cause such
excavation, license to enter upon the Premises for the purpose of doing such
work as said person shall deem necessary to preserve the walls of the Building
from injury or damage and to support the same by proper foundations without any
claim for eviction or constructive eviction, damages or indemnity against
Landlord, or diminution or abatement of Rental, provided that Tenant continues
to have access to the Premises.
ARTICLE 35
RESERVED
ARTICLE 36
RENT REGULATION
Section 36.1. If at any time or times during the Term of this Lease, the
Rental reserved in this Lease is not fully collectible by reason of any
Requirement, Tenant shall enter into such agreements and take such other steps
(without additional expense to Tenant) as Landlord may request and as may be
legally permissible to permit Landlord to collect the maximum rents that may
from time to time during the continuance of such legal rent restriction be
legally permissible (and not in excess of the amounts reserved under this
Lease). Upon the termination of such legal rent restriction (a) the Rental shall
become and thereafter be payable hereunder in accordance with the amounts
reserved in this Lease for the remainder of the Term, and (b) Tenant shall pay
to Landlord, if legally permissible, an amount equal to (i) the items of Rental
that would have been paid pursuant to
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this Lease but for such legal rent restriction less (ii) the rents paid by
Tenant to Landlord during the period or periods such legal rent restriction was
in effect. This provision shall survive the expiration of earlier termination of
this Lease to the maximum enforceable extent.
ARTICLE 37
COVENANT OF QUIET ENJOYMENT
Section 37.1. Landlord covenants that, upon Tenant paying the Fixed Rent
and Additional Rent and observing and performing all the terms, agreements,
covenants, provisions and conditions of this Lease on Tenant's part to be
observed and performed, Tenant may peaceably and quietly enjoy the Premises,
subject nevertheless to the terms and conditions of this Lease, and provided,
however, that no eviction of Tenant by reason of the foreclosure of any Mortgage
now or hereafter affecting the Premises or by reason of any termination or any
Superior Lease to which this Lease is subject and subordinate, whether such
termination is effected by operation of law, by agreement or otherwise, shall be
construed as a breach of this covenant nor shall any action by reason thereof be
brought against Landlord, and provided further that this covenant shall bind and
be enforceable against Landlord or any successor to Landlord's interest, subject
to the terms hereof, only so long as Landlord or any successor to Landlord's
interest, is in possession and is collecting rent from Tenant but not
thereafter.
ARTICLE 38
MISCELLANEOUS
Section 38.1. This lease is presented for signature by Landlord and Tenant
and it is understood that this Lease shall not constitute an offer by or be
binding upon either Landlord or Tenant unless and until Landlord and Tenant
shall have executed and delivered a fully executed copy of this Lease to the
other.
Section 38.2. The obligations of Landlord under this Lease shall not be
binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent Landlord or its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby
is entirely freed and relieved of all covenants and obligations of Landlord
under this Lease thereafter arising, and the transferee shall be deemed to have
assumed,
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subject to the remaining provisions of this Section 38.2, all obligations of the
Landlord under this Lease arising after the effective date of the transfer. No
partner, shareholder, director or officer of landlord, or of any partner or
shareholder of Landlord (collectively, the "Parties") shall have any direct or
personal liability for the performance of landlord's obligations under this
lease, and Tenant shall look solely to Landlord's interest in the Real Property
to enforce Landlord's obligations hereunder and shall not otherwise seek any
damages against Landlord personally or any of the Parties whatsoever. Tenant
shall not look to any other property or assets of Landlord or any property or
assets of any of the Parties in seeking either to enforce Landlord's obligations
under this Lease or to satisfy a judgment for Landlord's failure to perform such
obligations.
Section 38.3. Notwithstanding anything contained in this lease to the
contrary, all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated Fixed Rent, Escalation Rent,
Additional Rent or Rental, shall constitute rent for the purposes of Section
502(b)(7) of the Bankruptcy Code.
Section 38.4. Neither this Lease nor any memorandum of this Lease shall be
recorded.
Section 38.5. Except as otherwise expressly stated in this Lease, any
consent or approval required to be obtained from Landlord may be granted by
Landlord in its sole discretion. In any instance in which Landlord agrees not to
act unreasonably, Tenant hereby waives any claim for damages against or
liability of Landlord that Tenant may have based upon any assertion that
Landlord has unreasonably withheld or unreasonably delayed any consent or
approval request by Tenant, and Tenant agrees that its sole remedy shall be an
action or proceeding to enforce any related provision or for specific
performance, injunction or declaratory judgment. If with respect to any required
consent or approval Landlord is required by the express provisions of this Lease
not to unreasonably withhold or delay its consent or approval, and if it is
determined in any such proceeding referred to in the preceding sentence that
Landlord acted unreasonably, the requested consent or approval shall be deemed
to have been granted; however, Landlord shall have no liability whatsoever to
Tenant for its refusal or failure to give such consent or approval. Tenant's
sole remedy for Landlord's unreasonably withholding or delaying consent or
approval shall be as provided in this Section 38.5. The foregoing provisions of
this Section 38.5, exculpating Landlord from liability, shall be inapplicable to
any unreasonable withholding or delay by Landlord of its consent to any
subletting or assignment in accordance with the provisions of this Lease.
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Section 38.6. If Tenant shall remain in possession of the Premises after
the Expiration Date, without the execution by both Tenant and Landlord of a new
lease, Tenant, at the election of Landlord, shall be deemed to be occupying the
Premises as a Tenant from month-to-month, at a monthly rental equal to one and
one-half times the Rental payable during the last month of the Term, subject to
al the other conditions, provisions and obligations of this Lease insofar as the
same are applicable to a month-to-month tenancy.
Section 38.7. Landlord shall make available to Tenant on the directory in
the lobby of the Building not less than four listings, which listings may
include subtenants occupying the Premises in accordance with the terms hereof.
The initial single listing shall be without charge to Tenant. Landlord shall
make available to Tenant such additional listings as Tenant may request provided
that Landlord has space available on the lobby directory for existing tenants
and has an adequate number of listings reserved for future tenants.
Section 38.8. If any of the provisions of this Lease, or the application
thereof to any person or circumstance, shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such
provisions to persons or circumstances other than those as to whom or which it
is held invalid or unenforceable, shall not be affected thereby and shall remain
valid and enforceable, and every provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
Section 38.9. Tenant hereby represents to Landlord that it is not entitled,
directly or indirectly, to diplomatic or sovereign immunity and Tenant agrees
that in all disputes arising directly or indirectly out of this Lease Tenant
shall be subject to service of process in, and the jurisdiction of the courts of
the State of New York. The provisions of this Section 38.9 shall survive the
expiration of this Lease.
Section 38.10. This lease contains the entire agreement between the parties
and all prior negotiations and agreements are merged into this Lease. This Lease
may not be changed, abandoned or discharged, in whole or in part, nor may any of
its provisions be waived except by a written agreement that (a) expressly refers
to this Lease and (b) is executed by the party against whom enforcement of the
change, abandonment, discharge or waiver is sought. The covenants, conditions
and agreements contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and their respective legal representatives, successors, and,
except as otherwise provided in this Lease, their assigns.
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Section 38.11. The laws of the State of New York applicable to contracts
made and to be performed wholly within the State of New York shall govern and
control the validity, interpretation, performance and enforcement of this Lease.
Section 38.12. If Tenant is a corporation, each person executing this Lease
on behalf of Tenant hereby covenants, represents and warrants that Tenant is a
duly incorporated or duly qualified (if foreign) corporation and is authorized
to do business in the State of New York (a copy of evidence thereof to be
supplied Landlord upon request); and that each person executing this Lease on
behalf of Tenant is an officer of Tenant and that he or she is duly authorized
to execute, acknowledge and deliver this Lease to Landlord (a copy of a
resolution to that effect to be supplied to Landlord upon request).
Section 38.13. 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.
Section 38.14. For the purposes of this Lease and all agreements
supplemental to this Lease, unless the context otherwise requires:
(a) Reference to "termination of this Lease" or "expiration of this
Lease" and words of like import includes expiration or sooner termination
of this Lease and the Term and the estate hereby granted or cancellation of
this Lease pursuant to any of the provisions of this Lease or to law. Upon
the termination of this Lease, the Term and estate granted by this Lease
shall end at noon on the date of termination as if such date were the Fixed
Expiration Date, and neither party shall have any further obligation or
liability to the other after such termination except (i) as shall be
expressly provided for in this Lease, and (ii) for such obligations as by
their nature under the circumstances can only be, or by the provisions of
this Lease, may be, performed after such termination, and, if any event,
unless expressly otherwise provided in this Lease, any liability for a
payment (which shall be apportioned as of such termination) which shall
have accrued to or with respect to any period ending at the time of
termination shall survive the termination of this Lease.
Section 38.15 The property remaining in the Premises on the Commencement
Date from a prior tenant, including without limitation the video screen and
blackboard, shall become Tenant's Property.
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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the
day and year first above written.
METROPOLITAN LIFE INSURANCE
COMPANY, Landlord
By: [ILLEGIBLE]
--------------------------------
GKN SECURITIES CORP., Tenant
By: [ILLEGIBLE] CFO 12//30/93
--------------------------------
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SCHEDULE A
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE.
<PAGE>
such requirement shall not impose any responsibility on Landlord for the
protection of any tenant against the removal of property from the
premises of tenant. Landlord shall, in no way, be liable to any tenant
for damages or loss arising from the admission, exclusion or ejection of
any person to or from a tenant's premises or the Building under the
provisions of this rule.
III. No tenant shall obtain or accept for use in its premises ice, drinking
water, towels, barbering, boot blacking, floor polishing, lighting
maintenance, cleaning or other similar services from any persons not
authorized by Landlord in writing to furnish such services. Such services
shall be furnished only at such hours, in such places within the tenant's
premises and under such regulation as may be fixed by Landlord.
IV. No window or other air-conditioning units shall be installed by any
tenant, and only such window coverings as are supplied or permitted by
Landlord shall be used in a tenant's premises.
V. There shall not be used in any space, nor in the public halls of the
Building, either by any tenant or by jobbers, or other in the delivery or
receipt of merchandise, any hand trucks, except those equipped with
rubber tires and side guards.
VI. All entrance doors in each tenant's premises shall be left locked when
the tenant's premises are not in use. Entrance doors shall not be left
open at any time. All windows in each tenant's premises shall be kept
closed at all times and all blinds therein above the ground floor shall
be lowered when and as reasonably required because of the position of the
sun, during the operation of the Building air-conditioning system to cool
or ventilate the tenant's premises.
VII. No noise, including the playing of any musical instruments, radio or
television, which, in the judgment of Landlord, might disturb other
tenants in the Building, shall be made or permitted by any tenant. No
dangerous, inflammable, combustible or explosive object, material or
fluid shall be brought into the Building by any tenant or with the
permission of any tenant.
VIII. All damages resulting from any misuse of the plumbing fixtures shall be
borne by the tenant who, or whose servants, employees, agents, visitors
or licensees, shall have caused the same.
B-2
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IX. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows in any tenant's premises and no lock on any door therein
shall be changed or altered in any respect. Duplicate keys for a tenant's
premises and toilet rooms shall be procured only from Landlord, which may
make a reasonable charge therefore. Upon the termination of a tenant's
lease, all keys of the tenant's premises and toilet rooms shall be
delivered to Landlord.
X. Each tenant, shall, at its expense, provide artificial light in the
premises for Landlord's agents, contractors and employees while
performing janitorial or other cleaning services and making repairs or
alterations in said premises.
XI. No tenant shall install or permit to be installed any vending machines.
XII. No animals or birds, bicycles, mopeds or vehicles of any kind shall be
kept in or about the Building or permitted therein.
XIII. No animals or birds, bicycles, mopeds or vehicles of any kind shall be
kept in or about the Building or permitted therein.
XIII. No furniture, office equipment, packages or merchandise will be received
in the Building or carried up or down in the elevator, except between
such hours as shall be designated by Landlord. Landlord shall prescribe
the charge for freight elevator use and the method and manner in which
any merchandise, heavy furniture, equipment or safes shall be brought in
or taken out of the Building, and also the hours at which such moving
shall be done. No furniture, office equipment, merchandise, large
packages or parcels shall be moved or transported in the passenger
elevators at any time.
XIV. All electrical fixtures hung in offices or spaces along the perimeter of
any tenant's Premises must be fluorescent, of a quality, type, design and
bulb color approved by Landlord unless the prior consent of Landlord has
been obtained for other lamping.
XV. The exterior windows and doors that reflect or admit light and air into
any premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by any tenant, nor shall any
articles be placed on the windowsills.
XVI. Canvassing, soliciting and peddling in the Building is prohibited and
each tenant shall cooperate to prevent same.
B-3
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XVII. No tenant shall do any cooking, conduct any restaurant, luncheonette or
cafeteria for the sale or service of food or beverages to its employees
or to others, except as expressly approved in writing by Landlord. In
addition, no tenant shall cause or permit any odors of cooking or other
processes or any unusual or objectionable odors to emanate from the
premises. The foregoing shall not preclude tenant from having food or
beverages delivered to the premises, provided that no cooking or food
preparation shall be carried out at the premises.
XVIII. No tenant shall generate, store, handle, discharge or otherwise deal with
any hazardous or toxic waste, substance or material or oil or pesticide
on or about the Real Property.
B-4
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SCHEDULE C
HEATING AND COOLING SPECIFICATIONS
Indoor Conditions
Summertime Cooling will be an average through the space of 78(Degree)F Dry Bulb
and 50% relative humidity when the outdoor temperature is 93(Degree)F Dry Bulb
and 75(Degree)F Wet Bulb.
Heating Conditions: Maintain an average of 70(Degree)F Dry Bulb when outdoor
temperature is 5(Degree)F Dry Bulb.
<PAGE>
SCHEDULE D
CLEANING SPECIFICATIONS
TENANT OFFICE AREA
Nightly:
Sweep all uncarpeted flooring using chemically treated dust mop to
prevent dust dispersion.
Sweep or vacuum all private stairway structures.
All carpeting and rugs are to be carpet swept four (4) nights per week
and vacuumed once (1) each week.
Empty and clean all ashtrays and screen and sand urns.
Empty wastebaskets and other trash receptacles and remove rubbish to
designated areas within the building. Plastic and/or burlap bags used for
removal of rubbish are to be furnished by OWNER and shall be adequate to
hold contents without breaking.
Hand dust and wipe clean with chemically treated cloth all furniture,
file cabinets, fixtures, window sills and convector enclosed tops within
arm's reach.
Move and dust under all desk equipment and phones, replacing and dusting
said equipment.
Dust metal doors of all elevator cabs.
Remove all gum and foreign matter on sight.
Scour and wash clean all water coolers and fountains.
All slop sink and storage areas are to be kept neat and clean.
During cleaning operation, a minimum number of lights are to be left on.
Upon completion of said operation, all lights must be turned off.
Remove fingerprints and smudges around light switches and door jambs.
D-1
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Perform all high dusting, including the following, four (4) times a year:
Hand dust all pictures, frames, charts, graphs and similar wall hangings
not reached in nightly cleaning.
Dust vertical surfaces such as partitions, ventilating louvers, high
moldings, etc. not reached in nightly cleaning.
Dust overhead pipes, air-conditioning louvers, ducts, etc. not reached in
nightly cleaning.
Dust window frames.
Dust exterior of lighting fixtures.
PUBLIC LAVATORIES
Nightly:
Scour, wash and disinfect all basins, bowls and urinals with an approved
germicidal detergent solution.
Wash and disinfect both sides of all toilets seats with an approved
germicidal detergent solution.
Wash and polish with a non-acid polish all mirrors, powder shelves,
bright work and enamel surfaces in all lavatories.
Hand dust and clean, washing where necessary, all partitions, dispensers
and receptacles.
Sweep and wash all lavatory flooring with an approved disinfectant.
Empty and clean all paper towel and sanitary disposal receptacles,
transporting waste to the designated location.
Fill toilet tissue holders, soap dispensers and paper towel dispensers.
Report all mechanical deficiencies, dripping faucets, etc. to the
Building Manager.
D-2
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Periodic:
Clean and wash with proper disinfectant all partitions once (1) a month.
Machine scrub flooring as necessary, but not less than once (1) each
month.
Hand dust, clean and wash all tile walls as necessary, but not less than
once (1) every three (3) months.
High dust lights, walls, grilles, etc. once (1) every three (3) months.
Wash all lighting fixtures as necessary (but not less than twice (2) each
year).
WINDOW CLEANING
Wash and clean all building windows, inside and outside, wiping clean all
metal and mullions and sashes. Service shall be performed four (4) times
per year.
D-3
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SCHEDULE E
GENERAL PARTNERS COMPRISING TENANT
E-1
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SCHEDULE F
COMMENCEMENT DATE AGREEMENT
AGREEMENT made as of the __ day of ________, 1993, between Metropolitan
Life Insurance, a New York corporation, having an address at One Madison Avenue,
New York, New York 10017, as Landlord, and GKN Securities Corp., having an
address at 61 Broadway, New York, New York 10006, as Tenant.
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered in an Agreement of Lease, dated
as of _________, 1993 (the "Lease"), pursuant to which Landlord leased to Tenant
certain space in the Building known as 61 Broadway, New York, New York, as more
fully described in the Lease; and
WHEREAS, pursuant to the provisions of the Lease, the parties agreed to
executed a written agreement confirming the Commencement Date and the Fixed
Expiration Date of the Lease.
NOW, THEREFORE, Landlord and Tenant confirm that the "Term" of the Lease
has commenced on __________, 1993, and that such date constitutes the
"Commencement Date" of the Lease, as such quoted term is defined in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Commencement Date Agreement as of the day and year first above written.
LANDLORD:
METROPOLITAN LIFE INSURANCE COMPANY
By:________________________________
TENANT:
GKN SECURITIES CORP.
By:________________________________
F-1
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SCHEDULE G
LANDLORD'S WORK
Landlord, at its sole cost and expense, shall perform the following items
of work in the Premises (hereinafter "Landlord's Work"):
1. Relocate the partition walls in the Premises as substantially
shown on Schedule G-2 annexed hereto.
2. Paint the Premises with 2 coats of Building standard quality paint
in a color to be selected by Tenant from the Building standard
colors in use at the Premises; and
3. Install in the Premises Building standard quality carpet selected
by Tenant from the selection of Building standard carpet in use at
the Building.
4. Remove the wall coverings in the two offices in the Premises
marked with an "x" on Schedule G-2 annexed hereto and paint such
offices in accordance with item 2 above.
5. Perform those other items of work set forth in that certain
Proposal P93-399D by Katselnik & Katselnik, Inc.
G-1
<PAGE>
AMENDMENT OF LEASE
THIS AGREEMENT, dated as of April 14, 1994, between METROPOLITAN LIFE
INSURANCE COMPANY ("Landlord"), a New York corporation having an office at One
Madison Avenue, New York, New York 10010, and GKN SECURITIES CORP. ("Tenant"), a
Delaware corporation having an office at 61 Broadway, New York, New York 10006.
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into a lease dated as of December
30, 1993 (the "Lease") for premises (the "Original Premises") on the 27th floor
of the building at 61 Broadway, New York, New York (the "Building");
WHEREAS, Landlord and Tenant desire to amend the Lease to (i) add
certain additional premises to the Original Premises and (ii) otherwise amend
the provisions of the Lease, all on the terms and conditions provided in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, Landlord and Tenant agree as follows:
1. The area on the 10th floor of the Building, substantially as shown
hatched on the plan annexed hereto as Exhibit A (the "Additional Premises") is
hereby added to, and shall be considered a part of the "Premises" (as such term
is defined in the Lease), commencing on the date (the "Second Commencement
Date") that is the earlier to occur of (a) the date when Landlord's Additional
Work (as defined in Paragraph 6) is Substantially Completed (as defined in the
Lease), or (b) the date Tenant or any Person (as defined in the Lease) claiming
under or through Tenant first occupies the Additional Premises for the conduct
of its business, through and including the Fixed Expiration Date (as such term
is defined in the Lease).
2. To reflect the demise of the Additional Premises, effective on the
Second Commencement Date, (i) the Fixed Rent set forth in the Reference Page of
the Lease shall be increased by the amount of $63,822.00 (ii) the Monthly
Installment of Fixed Rent set forth in the Reference Page of the Lease shall be
increased by the amount of $5,323.50. Monthly Installments of Fixed Rent shall
be made by Tenant upon the execution of this Agreement. If the Second
Commencement Date is other than the first day of a calendar month, Fixed Rent
for such month shall be prorated on a per diem basis.
<PAGE>
3. Electricity will be supplied to the Premises in accordance with
Article 4 of the Lease. To reflect the demise of the Additional premises,
effective on the Second Commencement Date, the electric Inclusion Amount (as
defined in the Lease) set forth in the Reference Page of the Lease shall be
increased by the amount of $7,722.00.
4. Notwithstanding the foregoing provisions, the Fixed Rent (exclusive
of the Electric Inclusion Amount for the Additional Premises) for the Additional
premises only shall be abated for the four (4) - month period (the "Abatement
Period") commencing on the Second Commencement Date. However, nothing in this
paragraph 4 shall be deemed to abate any sums due under other provisions of the
lease, as amended by this Agreement, with respect to the Abatement Period, which
sums shall be due and payable in the manner and at the time provided in the
Lease, as amended by this Agreement, as if the Fixed Rent for the Additional
Premises had not been abated under this Paragraph 4.
5. To reflect the demise of the Additional Premises, effective on the
Second Commencement Date, (a) Tenant's Share set forth in the Reference Page of
the Lease shall be increased by .4509%, and (b) the rentable square footage of
the Premises set forth in Section 2.9 of the Lease shall be increased by the
amount of 2,808 square feet.
6. (a) Landlord, at its expense, shall cause (i) the carpeting currently
located in the Additional Premises to be shampooed, (ii) the Additional Premises
to be painted using two (2) coats of Building-standard quality paint in a color
to be selected by Tenant from the Building-standard colors in use at the
Building, (iii) the broken blinds in the Additional Premises to be repaired or
replaced (as Landlord shall elect), (iv) the baseboard throughout the Additional
Premises to be replaced and (v) the damaged ceiling tiles in the Additional
Premises to be repaired or replaced. Such work is hereinafter referred to as
"Landlord's Additional Work". All other installations, materials and work that
may be undertaken by or for the account of Tenant to prepare, equip, decorate
and furnish the Additional Premises for Tenant's occupancy shall be at Tenant's
expense and are hereinafter called "Tenant's Additional Finish Work." Tenant's
Additional Finish Work shall be performed in accordance with Article 6 of the
Lease.
(b) Notwithstanding anything contained in this Paragraph 6 to the
contrary, if the Second Commencement Date shall not have occurred on or before
the date which is thirty (30) days after the date of this Agreement (such date,
the "Additional Work Finish Date") and provided that no Event of Default shall
have occurred and be continuing, then Tenant shall be granted an additional
credit against Fixed Rent (the "Additional Work Finish Date Rent Credit") equal
to $87.51 for each day beyond the Additional Work Finish Date that the Second
Commencement Date is delayed (subject
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<PAGE>
to the last three sentences of this subparagraph (b)). The Additional Finish
Date Rent Credit shall be applied to the first Monthly Installaments of Fixed
Rent accruing under the Lease after the Second Commencement Date. To the extent
that the Second Commencement Date shall be delayed beyond the Additional Work
Finish Date by reason of a "Tenant's Delay" (as hereinafter defined) or by
Article 26 of the Lease, the date that shall constitute the Additional Work
Finish Date shall not be the date which is thirty days after the date of this
Agreement but shall be delayed by the period of time equal to the duration of
all such delays. As used herein, the term "Tenant's Delay" shall mean a delay in
the Substantial Completion of Landlord's Additional Work, or any portion
thereof, due to any act or omission of Tenant or Persons Within Tenant's Control
(as defined in the Lease), including, without limitation, delays in submission
of information or giving authorizations or approvals or delays resulting from
the fact that, under good construction practice, portions of Landlord's
Additional Work must be scheduled after the completion of certain items of
Tenant's Additional Finish Work. The parties recognize that a Tenant's Delay may
be aggravated or extended by a strike, labor problem, materials or labor
shortage, or loss of time due to construction scheduling changes occasioned by
such Tenant's Delay or other Unavoidable Delays (as defined in the Lease), any
or all of which would not have adversely affected the timely completion of
Landlord's Additional Work in the absence of such Tenant's Delay, and agree that
the duration of Tenant's Delay should include all delays resulting from such
other causes, notwithstanding that as a result thereof, the Tenant's Delay in
question may substantially exceed, in duration, the length of time during which
the act or omission of Tenant Delay may have occurred or continued.
(c) Landlord will give Tenant written notice at least five (5) Business
Days (as defined in the Lease) in advance of the date when Landlord expects
Landlord's Additional Work in the Additional Premises to be Substantially
Completed, but Landlord shall not incur any liability whatsoever to Tenant if
Landlord's Additional Work in the Additional Premises is not Substantially
Completed as set forth in such notice and no further notice shall be required to
be given by Landlord.
(d) The Second Commencement Date shall be deemed to have occurred on the
date when Landlord's Additional work is the Additional Premises reasonably would
have been substantially completed except for any Tenant's Delay, even though the
work to be done by Landlord has not been commenced or completed.
(e) Landlord may submit to Tenant a written agreement confirming the date
fixed by Landlord, in accordance with the foregoing, as the Second Commencement
Date and Tenant shall execute such agreement and return it to Landlord within
fifteen (15) calendar days thereafter. Any failure of the parties to execute
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<PAGE>
such written agreement shall not affect the validity of the Second Commencement
Date as fixed and determined by Landlord as aforesaid.
(f) Neither Landlord nor Landlord's agents have made any representations
or promises with respect to the Additional 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 herein. Tenant shall
accept possession of the Additional Premises in its "as is" condition on the
Second Commencement Date, subject to the completion of any Additional Landlord's
Work, and Landlord shall have no further obligation to perform any work or make
any installations in order to prepare the Additional premises for Tenant's
occupancy. The taking of occupancy of the whole or any part of the Additional
Premises by Tenant (for performance of Tenant's Additional Finish Work or
otherwise) shall be conclusive evidence, as against Tenant, that Tenant accepts
possession of the same and that the Additional Premises and the Building were in
good and satisfactory condition at the time such occupancy was so taken and that
the Additional Premises were substantially as shown on Exhibit A.
(g) Promptly after Tenant's Additional Finish Work shall have been
completed, Tenant shall deliver to Landlord a set of as-built plans showing
Tenant's Additional Finish Work.
(h) If Landlord shall be unable to deliver possession of the Additional
Premises on the Additional Work Finish Date, Landlord shall be subject to any
liability therefor and the validity of the Lease, as modified by this Agreement,
shall not be impaired thereby nor the Expiration Date (as defined in the Lease)
extended, it being hereby agreed by Tenant that the application of the
Additional Work Finish Date Rent Credit shall be Tenant's only remedy in respect
thereof. Tenant expressly waives any right to rescind the Lease under Section
223-a of the New York Real Property Law or under any present or future statute
of similar import then in force and further expressly waives the right to
recover any damages (other than the Additional Work Finish Date Rent Credit)
that may result from Landlord's failure to deliver possession of the Additional
Premises on the Additional Work Finish Date or any other specific date. Tenant
agrees that the provisions of this subsection (h) are intended to constitute "an
express provision to the contrary" within the meaning of said Section 223-a.
(i) In addition to the items of Landlord's Additional Work set forth in
Paragraph 6(a) above, Landlord, at its expense, shall also cause the entrance
door to the Original Premises to be replaced with reasonable diligence,
provided, however, that (i) such replacement shall not be deemed to be part of
Landlord's Additional Work under this Agreement and (ii) there shall be no time
limit with respect to Landlord's obligation to cause such replacement to be made
nor shall there be any abatement of rent or
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<PAGE>
rent credit if such replacement is not made by the Additional Work Finish Date
or any other specific date.
7. Simultaneously with the execution of this Agreement, Tenant shall
deliver to Landlord an endorsement to Tenant's insurance policy(ies) required to
be maintained by Tenant pursuant to Article 12 of the Lease, reflecting the
demise of the Additional Premises to Tenant.
8. Landlord shall deliver to Tenant a so-called "ACP-5" Certificate with
respect to the Additional Premises.
9. In addition to the parties set forth in Section 27.1 of the Lease,
copies of all Notices (as defined in the Lease) to Landlord shall also be sent
to Galbreath Riverbank, L.P., 437 Madison Avenue, New York, New York 10022,
Attention: Mr. Andrew Feder; provided, however, that the failure to send a copy
of any Notice to such party shall not affect the effectiveness of any Notice
otherwise sent in accordance with the Lease.
10. Tenant represents and warrants to Landlord that Tenant has not dealt
with any broker or Person in connection with this Agreement other than Galbreath
Riverbank, L.P. ("Broker"). The execution and delivery of this Agreement by
Tenant shall be conclusive evidence that Tenant acknowledges that Landlord has
relied upon the foregoing representation and warranty. Tenant shall indemnify
and hold harmless Landlord from and against any and all claims for commission,
fee or other compensation by any Person other than the Broker who claims to have
dealt with Tenant in connection with this Agreement and for any and all costs
incurred by Landlord in connection with such claims, including, without
limitation, attorneys' fees and disbursements. This provision shall survive the
expiration or earlier termination of the Lease.
11. In addition to the other provisions of the Lease that have been made
inapplicable to the Additional Premises by the terms of this Agreement, the
definitions in the Reference Page of the Lease ascribed to "Commencement Date",
"Rent Commencement Date" and "Term", Section 2.10, the second and third
sentences of Section 21.1, Section 23.1, Section 38.15 and Schedules G and G-2
of the Lease shall not apply to the Additional Premises.
12. This Agreement is offered for signature by Tenant and it is
understood that this Agreement shall not be binding upon Landlord unless and
until Landlord shall have executed and delivered a fully executed copy of this
Agreement by Tenant.
13. This Agreement may not be changed or terminated orally, but only by
an agreement in writing signed by Landlord and Tenant.
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<PAGE>
14. Except as modified by this Agreement, the provisions of the Lease are
confirmed and approved and shall continue in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as
of the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Robert W. Morgan
------------------------------------
Name: Robert W. Morgan
Title: AVP
GKN SECURITIES CORP,
By: /s/ Carl Goodman
------------------------------------
Name: Carl Goodman
Title: CFO
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<PAGE>
SCHEDULE A
FLOOR PLAN OF ADDITIONAL PREMISES
ALL AREAS, DIMENSIONS AND CONDITIONS ARE APPROXIMATE.
EXHIBIT 10.2
MIZNER PARK
PROFESSIONAL OFFICE LEASE AGREEMENT
By and between
CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES
as Landlord
and
GKN HOLDINGS CORP.
as Tenant
DATE: 2/10, 1992
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Summary of Lease Provisions .................... 1
1.1 Basic Data ..................................... 1
Section 2. Basic Lease Provisions ......................... 2
2.1 Premises ....................................... 2
2.2 Use of Common Areas ............................ 3
2.3 Length of Term ................................. 3
2.4 Commencement of Rent and Term .................. 3
2.5 Obligations of Tenant before
Lease Term Begins ............................ 4
2.6 Failure of Tenant to Open ...................... 4
2.7 Excuse of Landlord's Performance ............... 4
Section 3. Rent and Assessments of Tenant ................. 5
3.1 Fixed Minimum Annual Rent ...................... 5
3.2 Sales, Use and Rent Taxes,
Personal Property Taxes ........................ 5
3.3 Real Estate Taxes and Improvement
Assessments .................................. 5
3.4 Tenant to Bear Proportionate
Share of Common Costs ........................ 6
3.5 Additional Rent ................................ 9
3.6 Rent Defined ................................... 9
Section 4. Common Areas ................................... 9
4.1 Use of Center Common Areas
and Project Common Areas ..................... 9
4.2 License to Use Common Areas .................... 10
Section 5. Construction of Premises ....................... 10
5.1 Landlord's Work ................................ 10
5.2 (a) Tenant's Work .................................. 10
(b) Mechanics Liens ................................ 10
5.3 Acceptance by Tenant ........................... 11
5.4 Changes to Center and Center
Common Areas ................................. 11
Section 6. Conduct of Business by Tenant .................. 12
6.1 Use of Premises ................................ 12
6.2 Operation of Business .......................... 12
Section 7. Security Deposit ............................... 12
7.1 Amount and Use of Deposit ...................... 12
7.2 Return of Deposit .............................. 13
7.3 Transfer of Deposit ............................ 13
(i)
<PAGE>
Page
----
Section 8. Signs, Awnings, Canopies,
Fixtures, Alterations ........................ 13
8.1 Installation by Tenant ......................... 13
8.2 Responsibility of Tenant ....................... 13
8.3 Bonds .......................................... 13
8.4 Signs .......................................... 14
Section 9. Repairs and Maintenance of Premises ............ 14
9.1 Responsibilities of Landlord ................... 14
9.2 Responsibilities of Tenant ..................... 15
Section 10. Insurance and Indemnity ........................ 16
10.1 Liability Insurance ............................ 16
10.2 Plate Glass Insurance .......................... 17
10.3 Fire and Extended Coverage Insurance ........... 17
10.4 Increase in Fire Insurance Premium ............. 17
10.5 Indemnification of Landlord .................... 18
10.6 Waiver of Subrogation .......................... 18
Section 11. Services and Utilities ......................... 19
Section 12. Subordination and Attornment ................... 19
12.1 Subordination .................................. 19
12.2 Attornment ..................................... 20
12.3 Financing Agreements ........................... 20
Section 13. Assignment and Subletting ...................... 20
13.1 Consent Required ............................... 20
13.2 Significant Change of Ownership ................ 20
Section 14. Waste, Governmental Regulations ................ 20
14.1 Waste or Nuisance .............................. 20
14.2 Governmental Regulations ....................... 20
14.3 Hazardous Substances ........................... 21
Section 15. Tenant's Compliance ............................ 21
Section 16. Advertising, Promotion Fund .................... 21
16.1 Solicitation of Business ....................... 21
16.2 Advertised Name and Address .................... 21
16.3 Letters and Marks .............................. 21
Section 17. Destruction of Leased Premises ................. 22
17.1 Total or Partial Destruction ................... 22
17.2 Destruction of Shopping Center ................. 22
17.3 Damage Near End of Term ........................ 22
17.4 Reconstruction of Improvements ................. 23
17.5 Termination .................................... 23
(iii)
<PAGE>
Page
----
Section 18. Eminent Domain ................................. 23
18.1 Total Condemnation ............................. 23
18.2 Partial Condemnation ........................... 23
18.3 Landlord's Damages ............................. 23
18.4 Tenant's Damages ............................... 24
18.5 Sale Under Threat of Condemnation .............. 24
Section 19. Default of Tenant .............................. 24
19.1 Event(s) of Default ............................ 24
19.2 Remedies of Landlord ........................... 25
19.3 Waiver ......................................... 26
19.4 Expenses of Enforcement ........................ 27
19.5 Legal Expenses ................................. 27
Section 20. Access by Landlord ............................. 27
20.1 Right of Entry ................................. 27
Section 21. Tenant's Property .............................. 28
21.1 Taxes of Leasehold ............................. 28
21.2 Loss and Damage ................................ 28
21.3 Notice by Tenant ............................... 28
21.4 Lien for Rent .................................. 28
Section 22. Holding Over, Successors ....................... 29
22.1 Holding Over ................................... 29
22.2 Successors ..................................... 29
Section 23. Quiet Enjoyment ................................ 29
Section 24. Miscellaneous .................................. 29
24.1 Accord and Satisfaction ........................ 29
24.2 Entire Agreement ............................... 29
24.3 No Partnership ................................. 30
24.4 Notices ........................................ 30
24.5 Captions and Section Numbers ................... 31
24.6 Use of Pronoun ................................. 31
24.7 Brokers Commission ............................. 31
24.8 Partial Invalidity ............................. 31
24.9 Estoppel Certificate ........................... 31
24.10 Recording ...................................... 32
24.11 Liability of Landlord .......................... 32
24.12 Waiver by Tenant ............................... 32
24.13 Time of Essence ................................ 33
24.14 Guaranty ....................................... 32
EXHIBITS
Exhibit A - Site Plan of Project Exhibit A-l - Floor Plan
Exhibit B - Space Plan
Exhibit C - Schedule of Adjustments in Fixed Minimum Annual Rent
Exhibit D - Landlord's Work and Tenant's Work
Exhibit F - Rules and Regulations
RIDERS
Rider No. 1 - Tenant Finish Work Requirements
Rider No. 2 - Radon Disclosure
Rider No. 3 - Renewal Option
Rider No. 4 - Right of First Refusal
Rider No. 5 - Assignment and Subletting
Rider No. 6 - Tenant's Right to Terminate
(iii)
<PAGE>
INDEX OF DEFINED TERMS
Section (or page)
Additional Rent ............................................... 3.6
Agency ........................................................ 3.4(b)
Agency Intangibles Tax ........................................ 3.4(b)
Agency Payment ................................................ 3.4(b)
Anticipated Lease Term Commencement Date ...................... 1.1(a)
Association ................................................... 3.5(a)
Center ........................................................ 1.1(b)
Center Common Areas ........................................... 4.1
Center Operating Costs ........................................ 3.5(a)
Commencement Date ............................................. 2.4
Declaration ................................................... 3.5(a)
Event of Default .............................................. 19.1
Fixed Minimum Annual Rent ..................................... 1.1(c)
Gross Leasable Area of the Premises ........................... 1.1(d)
Ground Lease .................................................. 3.4(b)
Guarantor(s) .................................................. 1.1(e)
Guarantor's Address ........................................... 1.1(e)
Landlord ...................................................... 1
Landlord's Address ............................................ 1.1(f)
Landlord's Work ............................................... 5.1
Lease Term .................................................... 1.1(g)
Leasing Broker ................................................ 1.1(h)
Parking Spaces ................................................ 1.1(j)
Permitted Use of Premises ..................................... 1.1(l)
Premises ...................................................... 1.1(m)
Project ....................................................... 2.1(a)
Project Common Areas .......................................... 4.1
Proportionate Share ........................................... 1.1(n)
Rent .......................................................... 3.7
Security Deposit .............................................. 1.1(o)
Substantially Ready For Occupancy ............................. 2.4
Substituted Space ............................................. 2.1(c)
Tenant ........................................................ 1
Tenant's Address .............................................. 1.1(p)
Tenant's General Office Address ............................... 1.1(r)
Tenant's Trade Name ........................................... 1.1(s)
Tenant's Work ................................................. 5.2(a)
(iv)
<PAGE>
MIZNER PARK
PROFESSIONAL OFFICE LEASE AGREEMENT
THIS LEASE, made as of the 10 day of Feb, 1992, by CROCKER DOWNTOWN
DEVELOPMENT ASSOCIATES, A Florida general partnership ("Landlord"), and GKN
Holdings Corp. ("Tenant").
W I T N E S S E T H:
Section I. Summary of Lease Provisions.
1.1 Basic Data. All references in this Lease to the following terms will be
accorded the meanings hereinafter provided, as though such meaning was fully set
forth in the text hereof. This subsection, together with the terms herein
referenced shall constitute an integral part of this Lease.
(a) Anticipated Lease Term Commencement: Date June 1, 1992 (see
section 2.4).
(b) Center: The retail and professional office center located in the
Project and the parking areas and other improvements appurtenant thereto, as
illustrated on Exhibit "A" attached hereto.
(c) Fixed Minimum Annual Rent: See Exhibit "C" attached hereto,
together with all applicable sales tax thereon (see Section 3.1).
(d) Gross Leasable Area of the Premises: Approx. 5,700 square feet
(see Section 2.1).
(e) Guarantor(s): None (see Section 24.14.)
Guarantor's Address:__________________________________________________
_______________________________________________________________________________.
(f) Landlord's Address: 5355 Town Center Road, Suite 300, Boca Raton,
Florida 33486 (see Section 24.4).
(g) Lease Term: Sixty (60) calendar months (see Section 2.3).
(h) Leasing Broker: None (see Section 24.7).
(i) Parking Spaces: Four (4) reserved
(j) Permitted Use of Premises: General office space for securities
brokerage firm. (see Section 6.1).
<PAGE>
(k) Premises: Suite No. 245 located on the 2nd floor of the Center,
all within the Project, as delineated in Exhibit "A" of this Lease (see Section
2.1).
(l) Proportionate Share: Tenant's Proportionate Share of amounts
allocable to tenants of the Center shall be Five and eight tenths percent
(5.8%). Landlord reserves the right, in its discretion, to change Tenant's
Proportionate Share percentage, such that charges shall be equitably borne by
tenants of the Center. (See Section 3.4, 3.5).
(m) Security Deposit: $7,500.00 (See Section 7.1).
(n) Tenant's Address: 61 Broadway - 12th Floor New York, New York
10006 (see Section 24.4).
(o) Tenant's General Office Address (if different from above):
(p) Tenant's Trade Name: GKN Securities (see Section 16.1).
Section 2. Basic Lease Provisions.
2.1 Premises.
(a) In consideration of the rents, covenants and agreements hereafter
reserved and contained on the part of Tenant to be observed and performed,
Landlord demises and leases to Tenant, and Tenant rents from Landlord, the
Premises, as specified in Section 1.1(k), now existing or hereafter to be
erected in Boca Raton, Palm Beach County, Florida, located within and being a
portion of a mixed-use development known as Mizner Park (the "Project"). No
deduction or exclusion from leasable area shall be made in computing Gross
Leasable Area of the Premises as specified in Section 1.1(d) by reason of
columns, stairs, or other interior construction or equipment, or alteration of
the Premises in any manner by Tenant, and all dimensions shall be measured from
the center line of interior walls or from the exterior face of the exterior
lease line, as shown on the Floor Plan attached hereto as Exhibit "B". The Gross
Leasable Area of the Premises as specified in Section 1.1(d) shall be used in
the calculation of rent and other sums as appropriate under this Lease.
(b) Landlord reserves the right to make such amendments, changes and
revisions to the site plan or buildings of the Project as Landlord, in its sole
discretion, may deem proper.
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<PAGE>
2.2 Use of Common Areas. The use and occupation by Tenant of the Premises
shall include the non-exclusive use (subject to Section 2.1(b)), in common with
other persons or entities entitled thereto, of the Center Common Areas and the
Project Common Areas (as hereinafter defined) as such common areas now exist or
as such common areas may hereafter be constructed for the benefit of or as a
part of the Center, and other facilities as may be designated from time to time
by Landlord, subject however to the terms and conditions of this Lease and to
the rules and regulations for the use thereof as prescribed from time to time.
2.3 Length of Term. The term of this Lease shall be as provided in Section
1.1(g) hereof.
2.4 Commencement of Rent and Term. The term of this Lease (and Tenant's
obligation to pay rent and all forms of additional rent due hereunder for all of
the Premises unless otherwise set forth herein) shall commence one hundred
eighty (180) days after Landlord has delivered to Tenant a fully executed Lease,
at which time Tenant shall have access to the Premises to commence
construction. Landlord shall, in accordance with the foregoing, fix the
Commencement Date of the term of this Lease (the "Commencement Date"), and shall
notify Tenant of the date so fixed. The parties agree, if Landlord so requests,
thereafter to execute a written memorandum confirming such Commencement Date as
well as the expiration date of this Lease, which memorandum shall become a part
of this Lease. The Failure of the parties to execute such memorandum shall not
affect the validity of the Commencement Date as fixed by Landlord. The
Commencement Date notwithstanding, Tenant may occupy the Premises upon issuance
of a Certificate of Occupancy.
The Premises shall be deemed Substantially Ready for Occupancy on the date
that a Certificate of Occupancy or equivalent instrument is issued with respect
to the Premises
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<PAGE>
by the City of Boca Raton, Florida, notwithstanding that minor punchlist or
insubstantial details of construction, decoration or mechanical adjustment
remain to be performed.
Under no circumstances, however, may Tenant enter into possession of the
Premises prior to receipt by Tenant from Landlord of the notice that the
Premises are ready for Tenant's Work or otherwise upon the express written
consent of Landlord and subject to any terms of such consent. Should the term of
this Lease and Tenant's obligation to pay rent commence on a day other than the
first day of a month, then the term of this Lease, for purposes of Section 2.3
only, shall commence on the first day of the following month. Tenant shall pay
rent for the fractional month preceding the Commencement Date if the
Commencement Date is on a day other than the first day of a month, on a per diem
basis (calculated on the basis of a thirty-day month) payable upon occupancy of
the Premises by Tenant. Any rent payment hereunder for any other fractional
month shall likewise be calculated and paid on such per diem basis.
2.5 Obligations of Tenant Before Lease Term Begins. Tenant shall observe
and perform all of its obligations under this Lease (except its obligations to
conduct business and to pay Fixed Minimum Annual Rent, its Proportionate Share
of the Center Operating Costs as provided in Section 3.5, and its pro rata
share of real estate taxes as provided in Section 3.4) from the date upon which
the Premises are delivered to Tenant for its Tenant's Work until the
Commencement Date (if same shall occur thereafter) in the same manner as though
the Lease Term began when the Premises were delivered to Tenant.
2.7 Excuse of Landlord's Performance. Anything in this Lease to the
contrary notwithstanding, Landlord shall not be deemed in default with respect
to failure to perform any of the terms, covenants and conditions of this Lease
if such failure to perform shall be due to any strike, lockout, civil
commotion, war-like operation, invasion, rebellion, hostilities, military or
usurped power, sabotage,
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<PAGE>
government regulations or controls, inability to obtain any material, utilities,
service or financing, through Act of God or other cause beyond the control of
Landlord. If construction of the Center is not commenced within one (l) year
after the date of this Lease as evidenced by the issuance of a building permit
therefor, this Lease may be terminated at the option of either party by written
notice to the other within ten (10) days subsequent to the expiration of the
said one (1) year period, whereupon this Lease shall cease and terminate and the
parties shall be released and discharged from any and all liability hereunder.
Section 3. Rent and Assessments of Tenant.
3.1 Fixed Minimum Annual Rent. The Fixed Minimum Annual Rent as provided in
Section 1.1(c) hereof shall be payable by Tenant during the term of this Lease,
in equal monthly installments, together with all applicable sales taxes thereon,
on the first day of each month, in advance, at Landlord's Address as provided in
Section 1.1(f) of this Lease, or at such other place designated by Landlord,
without any prior demand therefor and without any deduction, holdback, setoff or
defense whatsoever. The Fixed Minimum Annual Rent payable hereunder shall be
adjusted in accordance with the terms and provisions of Exhibit "C" attached
hereto as a part of this Lease.
3.2 Sales, Use and Rent Taxes, Personal Property Taxes. Tenant shall pay,
as additional rent, its Proportionate Share, as defined in Section 1.1(1), of
all sales, use and other taxes imposed by any governmental authorities upon the
manufacture, sale, use, transmission, distribution or other process necessary or
incidental to the furnishing of sewer, water, electricity, and domestic water or
other services to the Premises. Tenant shall pay before delinquency all personal
taxes and assessments on the furniture, fixtures, equipment, and other property
of Tenant located in the Premises and on additions and improvements in the
Premises belonging to Tenant. Tenant shall also pay, as Additional Rent, all
sales taxes assessed by governmental authority against the Fixed Minimum Annual
Rent and Additional Rent, if applicable, even though the taxing statute or
ordinance may purport to impose such sales tax against Landlord. The payment of
all sales tax shall be made by Tenant on a monthly basis, concurrently with
payment of the Fixed Minimum Annual Rent.
3.3 Real Estate Taxes and Improvements Assessments.
(a) Tenant shall pay as Additional Rent during the term of this Lease
its Proportionate Share, as provided in Section 1.1(1) of this Lease, of all ad
valorem and real property taxes levied or assessed by any lawful authority
against all the real property which is now or hereafter becomes a part of the
Center, or Center Common Areas, and all other costs and fees incurred by
Landlord in contesting any such taxes, assessments, or charges and/or
negotiating with any such lawful authority with respect thereto. In the event
any governmental authority having jurisdiction shall levy any general or special
assessment against the real property, including without limitation capital
improvements which is now or hereafter becomes a part of the Center for public
betterments or improvements, Tenant shall also pay to Landlord as Additional
Rent its Proportionate Share of such assessment. Landlord shall have
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the option to take the benefit of any statute or improvements to be paid over a
period of time in which case Tenant shall be obligated to pay only the said
fraction of the installments of any such assessments which shall become due and
payable during the term of this Lease. Landlord shall estimate the taxes and
assessments referred to in this Section and Tenant shall pay one-twelfth (l/12)
thereof monthly in advance, together with the payment of Fixed Minimum Annual
Rent. After the end of each Lease Year Landlord shall furnish Tenant a statement
of the actual taxes and assessments, and there shall be an adjustment between
Landlord and Tenant with payment to or repayment by Landlord, as the case may
require, to the end that Landlord shall receive the entire amount of Tenant's
Proportionate Share for such annual period.
(b) Tenant acknowledges that the real property upon which the Center
is constructed is ground leased by Landlord from the Boca Raton Community
Redevelopment Agency, a governmental subdivision of the State of Florida (the
"Agency"), pursuant to an Agreement of Lease dated as of May l, 1989 (the
"Ground Lease"). Pursuant to Section 199.023 (d) of the Florida Statutes, the
leasehold interest of Landlord in such real property evidenced by the Ground
Lease may be subject to a tax as intangible personal property (the "Agency
Intangibles Tax"). In addition, the Ground Lease provides that if the real
property upon which the Center is constructed is exempted from the payment of
real property taxes as a result of the ownership thereof by a governmental
entity, Landlord is required to pay to the Agency each year in lieu of such tax
payment an amount equal to the amount of real property tax that would be payable
if the real property were not exempt (the "Agency Payment"). Without limiting
the generality of Section 3.4(a), Tenant agrees to pay as Additional Rent in the
manner set forth in Section 3.4(a) its Proportionate Share of (i) the Agency
Intangibles Tax levied or assessed against the leasehold interest of Landlord
evidenced by the Ground Lease and (ii) the Agency Payment payable by Landlord
pursuant to the Ground Lease. Notwithstanding the foregoing, the sum of Tenant's
Proportionate Share of the Agency Intangibles Tax (if any) shall not exceed the
amount of real property taxes that would otherwise be payable.
3.4 Tenant to Bear Proportionate Share of Common Costs.
(a) In each Lease Year or partial Lease Year, as defined herein,
Tenant will pay to Landlord, in addition to all other rentals specified in this
Section 3, as Additional Rent, Tenant's Proportionate Share of the "Center
Operating Costs," as hereinafter defined. "Center Operating Costs" means an
amount equal to Forty-Six percent (46%) of the total cost and expense
incurred in operating, managing, maintaining and repairing the Center Common
Areas, available for use by Tenant and the employees, agents, servants,
customers and other invitees of Tenant, including, without limitation, the total
amount assessed against Landlord by the Mizner Park Maintenance Association,
Inc. (the "Association") pursuant to the Mizner Park Declaration of Covenants,
Restrictions and Reciprocal Easements, dated May l, 1989, as recorded in the
Public Records of Palm Beach County, Florida, in Official Records Book 6065, at
Page 1509 (the "Declaration"). The items and charges comprising Center
Operating Costs shall specifically include, without limitation, gardening and
landscaping; the cost of public liability, business interruption, property
damage and other insurance; repairs and maintenance; line painting, paving and
resurfacing; lighting; electricity; sewer and water allocable to the Center
Common Areas sign
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maintenance; Center advertising; music systems; sanitary control; removal of
trash, rubbish, garbage and other refuse from the Center Common Areas;
depreciation on machinery and equipment used in such maintenance; reasonable
operating reserves; janitorial services for the Center Common Areas; service and
maintenance agreements for the Center and Center Common Areas; attorneys' and
accountants' fees; and the cost of personnel, including management and
administrative charges, necessary or convenient to implement the services
specified in this lease, with all employment and normal retirement benefits
incident thereto, including without limitation, pension and medical and life
insurance benefits, and personnel necessary to direct parking and to police the
Center Common Areas, including watchmen and security personnel, if such
equipment and personnel are employed. Landlord shall have the right with regard
to any and all management and maintenance obligations of Landlord under this
Lease, to contract with such person(s) or entity or entities for the performance
and accomplishment of such of the obligations as Landlord shall deem proper,
including entities in which Landlord may hold an ownership or other interest.
The following costs and expenses are expressly excluded from Center Operating
Costs:
(i) leasing commissions, rent concessions to tenants, tenant
improvements and advertising expenses;
(ii) expenditures for capital improvements, except those which under
generally accepted accounting principles are expenses or regarded as
deferred expenses and except for capital expenditures required by law, in
either of which cases the cost thereof shall be included in expenses for
the calendar year in which the costs are incurred and subsequent years,
appropriately allocated to such years on a straight-line basis, to the
extent that such items are amortized over an appropriate period, but not
more than ten (10) years, within an interest factor equal to the prime rate
of the Chase Manhattan Bank, N.A., but in no event greater than the
highest rate of interest permitted to be charged by law at the time of
Landlord's having incurred said expenditure;
(iii) painting, redecorating or other work which Landlord performs for
any tenant or prospective tenant of the Center other than painting,
redecorating or other work which is standard for the Center Common Areas
and performed for a tenant in connection with its initial occupancy;
(iv) repairs or other work (including rebuilding) occasioned by fire,
windstorm or other casualty or condemnation;
(v) depreciation ;
(vi) interest on, and amortization of, any mortgages placed upon the
Center by Landlord;
(vii) rent payable under any lease to which this Lease is subject;
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(viii) costs and expenses of enforcing leases against lessees,
including attorneys' fees; and
(ix) penalties for the late payment of any real estate taxes.
If Landlord shall purchase any item of capital equipment or make any
capital expenditure designed to result in savings or reductions in any of the
elements of Center Operating Costs, then the costs for such capital equipment or
capital expenditure are to be included within the definition of "Center
Operating Costs" for the Lease Year in which the costs are incurred and
subsequent years, on a straight-line basis, to the extent that such items are
amortized over such period of time as reasonably can be estimated as the time in
which such savings or reductions in Center Operating Costs are expected to equal
Landlord's costs for such capital equipment or capital expenditure, with an
interest factor equal to the prime rate of the Chase Manhattan Bank, N.A., but
in no event greater than the highest rate of interest permitted to be charged by
law at the time of Landlord's having incurred said costs. If Landlord shall
lease any such item of capital equipment designed to result in savings or
reductions in Center Operating Costs, then the rentals and other costs paid
pursuant to such leasing shall be included in Center Operating Costs for the
year in which they are incurred.
(b) Tenant also agrees to pay to Landlord Tenant's Proportionate Share
of the total costs and expenses (other than Center Operating Costs) incurred in
operating, managing, maintaining and repairing all or any portion of the Center
that are attributable to, or are for the exclusive or primary benefit of, the
professional office tenants of the Center located on the second and third floors
of the Center.
(c) Tenant shall be informed as to Tenant's Proportionate Share which
shall be based upon Landlord's estimate thereof, and Tenant shall pay
one-twelfth (1/12) thereof monthly in advance, together with the payment of
Fixed Minimum Annual Rent. After the end of each Lease Year, Landlord shall
furnish Tenant, upon request, a reasonably detail statement of the actual Center
Operating Costs, and there shall be an adjustment with payment by or credit to
Tenant, as the case may require. Any payment adjustment owed by Tenant will be
due within thirty (30) days after Landlord requests such reimbursement. Any
refund will be credited against Tenant's monthly rent obligation. Tenant
covenants and agrees that Tenant shall remain liable for and shall pay its
Proportionate Share of Center Operating Costs in the amounts and times as set
forth herein, notwithstanding the expiration or earlier termination of this
Lease.
(d) Tenant acknowledges that Center Operating Costs, or any item or
component of assessment or charge thereunder, may be made or assessed by either
Landlord and/or the owner or other entity controlling the Project Common Areas,
and Tenant shall pay such charge to the party making such assessment.
Additionally, Tenant acknowledges that Tenant's Proportionate Share of charges
and assessments (other than Fixed Minimum Annual Rent) under this Lease may be
as specified in Section 1.1(1) of this Lease, or may be based upon one or more
of the following manners of assessment: (i) direct charge for services provided
for the exclusive benefit of the Premises which are subject to precise cost
measurement; (ii) allocation of
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charges based upon relative intensity or quantity of use of services shared with
others; (iii) pro rata based upon the proportion that the gross square footage
of leasable area of the Premises bears to the gross square footage of leasable
area within the Center; (iv) pro rata based upon the proportion that the gross
square footage of leasable area of the Premises bears to the gross square
footage of leasable area within the Project for services provided tenants or
other users of services within the Project. Landlord and the owner or other
entity controlling the Project Common Areas reserve the right at all times and
from time to time to change Tenant's Proportionate Share or other method of
allocation of any costs, charges or assessments, including without limitation,
Center Operating Costs, in any manner which they may, in their reasonable
discretion, deem to be a fairer or more equitable allocation thereof.
(e) The provisions of this Lease notwithstanding, starting one (1)
year after the Commencement Date, in no event shall Tenant's Proportionate Share
of "controllable" Center Operating Costs be increased in any Lease Year in
excess of five percent (5%) per annum. For purposes of this Lease, Controllable
Center Operating Costs shall include costs within the reasonable control of
Landlord and shall exclude utilities, insurance and Real Estate Taxes/Agency
Intangible Tax.
3.5 Additional Rent. Any and all sums of money, assessments or charges
required to be paid by Tenant under this Lease other than Fixed Minimum Annual
Rent shall be considered "Additional Rent" whether or not the same be so
designated and Landlord shall have all rights to enforce due and timely payment
by Tenant of Additional Rent as are available to Landlord with regard to Fixed
Minimum Annual Rent. If such amounts or charges are not paid at the time
provided in this Lease, they shall nevertheless be collectible as Additional
Rent with the next installment of Fixed Minimum Annual Rent thereafter falling
due hereunder, but nothing herein contained shall be deemed to suspend or delay
the payment of any amount of money or charges as the same becomes due and
payable hereunder, or limit any remedy of Landlord for enforcement
<PAGE>
of the immediate collection of same, nor any other remedy available to Landlord
therefor. Terms of this subsection shall survive the expiration or earlier
termination of this Lease.
3.6 Rent Defined. The term "rent" as used in this Lease shall mean Fixed
Minimum Annual Rent and all monies and sums due to Landlord hereunder as
Additional Rent.
Section 4. Common Areas.
4.1 Use of Center Common Areas and Project Common Areas. The use and
occupation by Tenant of the Premises shall include the non-exclusive use, in
common with others entitled thereto, of the elevators, stairways, malls, waiting
areas and other areas for the non-exclusive use of tenants, and agents,
employees, customers and invitees of Tenants, within the Center (collectively,
the "Center Common Areas") as such Center Common Areas now exist or as may
hereafter be constructed for the benefit of or as a part of the Center, and
other facilities as may be designated from time to time by Landlord, subject,
however, to the terms and conditions of this Lease and the rules and regulations
for the use thereof as prescribed from time to time by Landlord. All Center
Common Areas shall at all times be subject to the exclusive control and
management of Landlord, and Landlord shall have the full right and authority to
employ all personnel and to make all rules and regulations as Landlord may in
its sole discretion deem proper, pertaining to the proper operation and
maintenance of the Center Common Areas. Additionally, the use by Tenant of the
Premises shall include the non-exclusive use of the "Common Areas" as such term
is defined in the Declaration (herein referred to as the "Project Common
Areas"), as such Project Common Areas now exist or as may hereafter be
constructed for the benefit of or as a part of the Project, subject however to
the terms
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and conditions of this Lease, the Declaration and the rules and regulations
for the use thereof as prescribed from tine to time. Tenant acknowledges that
the Project Common Areas shall at all times be subject to the exclusive control
and management of the owner or other entity controlling the Project Common Areas
which shall have the right to do and perform such acts in and to the Project
Common Areas and improvements thereon as, in the use of good business judgment,
it shall determine to be advisable with a view to the improvement of the
convenience and use thereof by authorized users of the Project Common Areas.
4.2 License to Use Common Areas. All Center Common Areas and Project Common
Areas, as constituted from time to time, which Tenant may be permitted to use
and occupy, are to be used and occupied under a license, revocable under default
of this Lease, and if such license is revoked, or if the amount of such areas be
temporarily closed or permanently diminished, Tenant shall not be entitled to
any compensation, damages or diminution or abatement of rent, nor shall such
revocation or diminution of such area be deemed constructive or actual eviction.
Section 5. Construction of Premises.
5.1 Landlord's Work. Landlord agrees that it will supply, at its own
expense, its standard space, as more particularly described and set forth on
Exhibit "D" annexed hereto and made a part hereof ("Landlord's Work").
5.2 (a) Tenant's Work. Tenant agrees to perform, at its own cost and
expense, all work other than Landlord's Work, including without limitation that
work, as particularly described in Exhibit "D" annexed hereto ("Tenant's Work"),
which is necessary to make the Premises conform with Tenant's plans as approved
by Landlord. Within sixty (60) days after the execution of this Lease, Tenant
shall furnish to Landlord, for Landlord's written approval, within five (5)
business days thereafter (which, if no response is given, shall be deemed a
consent), which approval shall not be unreasonably withheld, plans and
specifications for Tenant's Work, showing a layout, lighting plan, fixturing
plan, interior finish and material samples, typical display technique, interior
and exterior signage plan, store front and any work or equipment to be done or
installed by Tenant affecting any structural, mechanical or electrical part of
the Premises or the Center; and failure to deliver the same within such period
will constitute an Event of Default. Design elements as aforesaid will be
displayed in color renderings in detail as may be sufficient for Landlord's
needs. Tenant's Premises will be fixtured, designed and laid out so as not to be
a detriment to the other tenants in the Center and Tenant's Work shall not be
detrimental to the construction of improvements by Landlord or other tenants
therein, and Landlord's approval of the plans and specifications as aforesaid
for Tenant's Work shall be at Landlord's sole discretion. Tenant agrees and
acknowledges that all Tenant's Work, improvements, alterations or additions
performed by Tenant (collectively, the "Alterations") whether pursuant to this
Section or otherwise, is performed and accomplished solely for the benefit and
convenience of Tenant, and not for the benefit of Landlord, such Alterations
being nevertheless subject to each and every of the provisions of this Lease.
(b) Mechanic's Lien. Nothing contained in this Lease shall be
construed as a consent on the part of Landlord to subject the estate of Landlord
to liability under the Mechanics' Lien Law of the State of Florida, it
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being expressly understood that Landlord's estate shall not be subject to such
liability. Tenant shall strictly comply with Chapter 713, Florida Statutes, as
modified from time to time. In the event that a mechanics', laborers' or
materialmen's claim of lien is filed against the Premises or the Center in
connection with any work performed or material supplies by or on behalf of
Tenant, Tenant shall satisfy such claim, or shall transfer same to security,
within ten (10) days from the date of filing. In the event that Tenant fails to
satisfy or transfer such claim within said ten (10) day period, Landlord may do
so and thereafter charge Tenant, as Additional Rent, all costs incurred by
Landlord in connection with the satisfaction or transfer of such claim,
including attorneys' fees, and an administrative charge of fifteen percent (15%)
of all sums incurred by Landlord in the satisfaction or transfer of such claim.
Further, Tenant agrees to indemnify, defend and save Landlord harmless from and
against any damage or loss incurred by Landlord as a result of any such
mechanics' claim of lien. If so requested by Landlord, Tenant shall execute a
short form or memorandum of this Lease, which may, in Landlord's discretion be
recorded in the Public Records of Palm Beach County, Florida, for the purpose of
protecting Landlord's estate from mechanics' claims of lien, as provided in
Section 713.10, Florida Statutes. In the event such short form or Memorandum of
Lease is executed, Tenant hereby grants to Landlord a power of attorney, which
shall be a power coupled with an interest to execute and deliver to Landlord an
instrument terminating Tenant's interest in the real property upon which the
Premises are located, which instrument may be recorded by Landlord at the
expiration of the term of this Lease, or such earlier termination hereof. The
security deposit paid by Tenant may be used by Landlord for the satisfaction or
transfer of any mechanics' claim of lien, as provided in this Section. This
Section shall survive the termination of this Lease.
5.3 Acceptance by Tenant.
(a) If Landlord's Work has been completed at the time this Lease is
executed, Tenant certifies that it has inspected the Premises and accepts same
in its existing condition. No repair, work, alterations or remodeling of the
Premises is required to be done by Landlord as a condition of this Lease.
(b) If Landlord's Work is not completed at the time this Lease is
executed, Tenant agrees that the acceptance by Tenant of possession of the
Premises for the purpose of construction of Tenant improvements, shall be deemed
an acceptance of the Premises in its then existing condition.
5.4 Changes to Center and Center Common Areas. Landlord hereby reserves the
right, at any time, to perform maintenance operations and to make repairs,
alterations, or additions to, and to build additional stories on, the Center and
to construct buildings and/or other improvements adjoining the same. Landlord
also reserves the right to construct other buildings or improvements, including,
but not limited to, structures for motor vehicle parking. Tenant agrees to
cooperate with Landlord, permitting Landlord to accomplish any such maintenance,
repairs, alterations, additions or construction. The purpose of the site plan
attached hereto as Exhibit "A" is to show the approximate location of the
Premises. Landlord reserves the right, at any time, to add to or reduce or to
relocate the
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various buildings (other than the Premises), automobile parking areas, and
other Center Common Areas as shown on the site plan. The foregoing
notwithstanding, Landlord shall take reasonable measures to minimize any
disruption to Tenant's business.
Section 6. Conduct of Business by Tenant.
6.1 Use of Premises. Tenant shall occupy the Premises without delay upon
commencement of the term of this Lease, and covenants continuously to conduct
its permitted business therein. Tenant shall use the Premises solely for the
permitted use as stated in Section 1.1 (j) of this Lease. Tenant shall not use,
permit or suffer the use of the Premises for any other business or purpose.
Tenant further agrees to conduct its business in the Premises solely under the
name or trade name as stated in Section 1.1 (p) of this Lease. Tenant agrees to
conduct its business upon the Premises in accordance with the highest ethical
and operating standards of the retail industry, and the standards, rules and
regulations of the Center, as the same may be determined in Landlord's sole
discretion, and further to correct any deficiencies or failures to adhere to
such standards within twenty-four (24) hours of notice by Landlord of such
deficiencies.
6.2 Operation of Business. Tenant shall operate its business upon one
hundred percent (100%) of the Premises during the entire term of this Lease with
due diligence and efficiency. Tenant shall not perform any acts or carry on any
practices which may damage the Project or Center, its physical plant, its
reputation or its customers, employees or invitees, or which will result in an
increase of casualty insurance premiums. Tenant shall not use the Center Common
Areas or the Project Common Areas for the sale of goods and other promotions.
Section 7. Security Deposit.
7.1 Amount and Use of Deposit. Tenant, simultaneously with the execution of
this Lease, has deposited with Landlord as a Security Deposit the sum stated in
Section 1.1(m) of this Lease. The Security Deposit shall be held by Landlord,
may be commingled with other funds of Landlord, and Landlord shall have no
liability for the accrual or payment of any interest thereon. If at any time
during the term of this Lease any of the rent herein reserved shall be overdue
and unpaid, or any other sum payable by Tenant to Landlord hereunder shall be
overdue and unpaid, or if Tenant shall fail to keep and perform any of the
terms, covenants an conditions of this Lease to be kept and performed by Tenant,
then Landlord, at its option may appropriate and apply said deposit, or so much
thereof as Landlord may deem necessary, to the payment of such overdue rent or
other sum, or to compensate Landlord for all loss or damage sustained or
suffered by Landlord due to such default or failure on the part of Tenant.
Should the entire Security Deposit, or any portion thereof, be appropriated and
applied by Landlord for the payment of overdue Fixed Minimum Annual Rent or
Additional Rent, or to other sums due and payable by Tenant hereunder, then
Tenant shall, upon demand by Landlord, forthwith remit to Landlord a sufficient
amount in order to restore said Security Deposit to the original sum deposited,
and Tenant's failure to do so within five (5) days after receipt of such demand
shall constitute an Event of Default.
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7.2 Return of Deposit. Should Tenant comply with all of said terms,
covenants and conditions and promptly pay all of the Fixed Minimum Annual Rent
and Additional Rent herein provided for as it falls due, and all other sums
payable by Tenant to Landlord hereunder, the Security Deposit shall be returned
in full promptly to Tenant at the end of the term of this Lease, or upon the
earlier termination hereof.
7.3 Transfer of Deposit. Landlord may deliver the Security Deposit to the
purchaser of Landlord's interest in the Premises, in the event that such
interest be sold, and thereupon Landlord shall be discharged from any further
liability with respect thereto.
Section 8. Signs, Awnings, Canopies, Fixtures, Alterations.
8.1 Installation by Tenant. All fixtures and equipment installed in the
Center by Tenant shall be new. Tenant shall not make or cause to be made any
Alterations, other than non-structural decorating changes or install or cause
to be installed any exterior signs, exterior lighting, plumbing fixtures,
shades or awnings, or make any changes to the Center or install, create or alter
any interior improvements or displays visible outside the Premises without first
obtaining Landlord's written approval and consent, which consent may be
arbitrarily withheld by Landlord; it being the intention of Landlord and Tenant
that Landlord shall maintain complete aesthetic control over any and every
portion of the Premises visible from outside the Premises. Tenant shall present
to Landlord complete plans and specifications for work at the time approval is
sought and if approved, the work will comply in all respects with the approved
plan.
8.2 Responsibility of Tenant. All Alterations made by Tenant, or made by
Landlord on Tenant's behalf by agreement under this Lease, shall remain the
property of Tenant for the term of this Lease, or any extension or renewal
hereof. Tenant shall at all times maintain fire insurance with extended coverage
in the name of Landlord and Tenant, in an amount adequate to cover the cost of
replacement of all Alterations in the event of fire or extended coverage loss.
Tenant shall deliver to Landlord certificates of such insurance policies which
shall contain a clause requiring the insurer to give Landlord thirty (30) days
notice of cancellation of such policies. Alterations shall not be removed from
the Premises without prior consent in writing from Landlord. Tenant, at the
expiration of the Lease, provided Tenant shall not be in default under the
Lease, may remove non-structural Alterations as long as such removal shall not
damage the Premises.
8.3 Bonds. Tenant shall furnish a payment bond and a performance bond or
other security, in form
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satisfactory to Landlord, for the prompt and faithful performance by Tenant of
all Tenant's Work, within seven (7) days of Landlord's approval of Tenant's
plans and specifications for Tenant's Work.
8.4 Signs.
(a) Tenant will not place or permit to be placed or maintained on any
exterior door, wall or window of the Premises, or within the interior of the
Premises which is visible outside the Premises, any signage or advertising
matter of any kind, without first obtaining Landlord's written approval and
consent, which may be arbitrarily withheld.
(b) Tenant shall at its cost promptly erect an exterior sign of type,
composition and design in conformance with Landlord's Center standard signage,
within the area designated by Landlord, which sign shall be subject to the prior
written approval of Landlord. Tenant further agrees that such signs, awning,
canopy, decoration, lettering, advertising matter or other thing as may be
approved shall be maintained in good condition and repair at all times and shall
conform to the criteria established from time to time by Landlord for the
section of the Center within which the Premises is located.
Section 9. Repairs and Maintenance of Premises.
9.1 Responsibilities of Landlord.
(a) Landlord agrees to repair and maintain in good order and condition,
ordinary wear and tear excepted, the roof, roof drains, outside walls, the
structural portions (both interior and exterior) of the Premises, and the
electrical, plumbing and HVAC systems serving the Premises. There is excepted
from the preceding covenant, however: (i) repair or replacement of broken plate
or window glass (except in case of damage by fire or other casualty covered by
Landlord's fire and extended coverage insurance policy); (ii) repair of damage
caused by Tenant, its employees, agents, contractors, customers, licensees or
invitees; and (iii) interior repainting, refixturing, remodeling and
redecoration. In no event, however, shall Landlord be liable for damages or
injuries arising from the failure to make said repairs, nor shall Landlord be
liable for damages or injuries arising from defective workmanship or materials
in making any such repairs. Landlord shall have no obligation to repair until a
reasonable time after the receipt by Landlord of written notice of the need for
repairs. Tenant waives the provision of any law, or any right Tenant may have
under common law, permitting Tenant to make repair at Landlord's expense. Such
repair and maintenance obligations of Landlord shall be included in and
constitute "Center Operating Costs."
(b) Except as provided in Subsection (a), Landlord shall not be
obligated or required to make any other repairs, and all other portions of the
Premises shall be kept in good repair and condition by Tenant, and at the end of
the term of this Lease, Tenant shall deliver the Premises to Lessor in good
repair and condition, reasonable wear arising from Tenant's permitted use of the
Premises as specified herein only excepted.
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9.2 Responsibilities of Tenant.
(a) Without limiting the generality of the foregoing Section 9.1(a),
Tenant agrees to repair and maintain in good and operational order and condition
the non-structural interior portions of the Premises, including doors, windows,
plate and window glass, floor coverings, facilities and appliances.
(b) Tenant will not install any equipment which exceeds the capacity
of the utility lines leading into the Premises or the Center.
(c) Except for decorative and non-structural changes, Tenant, its
employees or agents shall nor mark, paint, drill or in any way deface any walls,
ceilings, roof, partitions, floors, wood, stone, plaster or drywall or ironwork
without Landlord's specific prior written consent.
(d) Tenant shall comply with the requirements of all laws, orders,
ordinances and regulations of all governmental authorities and will not permit
any waste of or upon the Premises or the Project Common Areas or Center Common
Areas to be committed and will take good care of and keep in a neat, clean and
sanitary condition, the Premises at all times.
(e) If Tenant refuses or neglects to maintain and/or repair properly
as required hereunder and to the reasonable satisfaction of Landlord, or its
representative, as soon as reasonably possible after written demand, Landlord,
or its representative, may perform such maintenance and/or make such repairs
without liability to Tenant for any loss or damage that may occur to Tenant's
fixtures or other property, or to Tenant's business by reason thereof, and upon
completion thereof, Tenant shall pay as additional rent Landlord's cost for
making such repairs plus ten percent (10%) for overhead, upon presentation of a
bill therefor. Said bill shall include interest at fifteen percent (15%) on said
cost from the date of the expenditure by Landlord. In the event that Landlord
shall undertake any maintenance or repair in the course of which it shall be
determined that such maintenance or repair work was made necessary by the
negligence or willful act of Tenant or any of its employees or agents or that
the maintenance or repair is, under the terms of this Lease, the responsibility
of Tenant, Tenant shall pay Landlord's costs therefore plus overhead and
interest as above provided in this Section.
(f) Tenant shall give Landlord prompt written notice of any accident,
fire or damage occurring on or to the Premises, and of any lawsuits or claims,
notices, complaints, summons filed against or received by Tenant with regard to
same and of any notices, complaints, citations or the like received from any
governmental or quasi-governmental agency, board of fire underwriters, or any
other person or entity, concerning or alleging any condition existing upon or
around the Premises in violation of any statute, law, ordinance or regulation or
presenting any risk of injury to persons or property.
(g) Neither Landlord nor Landlord's agents or servants shall be liable
for any damages caused by or a growing out of any breakage, leakage, or
defective condition of the electric wiring, air conditioning or heating pipes
and equipment, closets, plumbing, appliances, sprinklers,
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other equipment, or other facilities, serving the Premises or the Project unless
caused by the gross negligence or willful misconduct of Landlord. Neither
Landlord nor Landlord's agents or servants shall be liable for any damages
caused by, or growing out of, any defect in the Center, the Project or any part
thereof, or in said Premises or any part thereof attributable to fire, rain,
wind or other cause.
(h) All property belonging to Tenant or any occupant of the Premises
or the Center shall be there at the risk of Tenant or such other person only,
and Landlord shall not be liable for damage thereto or theft or
misappropriation thereof.
(i) At the expiration of the tenancy hereby created, Tenant shall
surrender the Premises In good condition, reasonable wear arising from Tenant's
permitted use of the Premises as specified herein excepted, and shall surrender
all keys for the Premises to Landlord. Tenant shall remove all its trade
fixtures, and shall repair any damage to the Premises caused thereby. Tenant
shall remove only those Alterations and improvements constituting Tenant's Work
as shall be requested by Landlord for removal, and all such Alterations and
improvements remaining upon the Premises upon the expiration or termination of
this Lease shall become the property of Landlord. Tenant's obligation to
observe or perform this covenant shall survive the expiration or other
termination of the term of this Lease.
Section 10. Insurance and Indemnity.
10.1 Liability Insurance. Tenant shall, during the entire term hereof, keep
in full force and effect: bodily injury and public liability insurance in an
amount not less than Five Hundred Thousand Dollars ($500,000)/One Million
Dollars ($l,000,000) per injury and accident, respectively; property damage
insurance in an amount not less than One Hundred Thousand Dollars ($100,000);
and worker's compensation insurance in the maximum amount permitted under
Florida law. The policy shall name Landlord and Tenant as insured and shall
contain a clause that the insurer will not cancel or change the insurance
without first giving Landlord thirty (30) days prior written notice.
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The insurance shall be with an insurance company approved by Landlord and a copy
of the policy or a certificate of Insurance shall be delivered to Landlord
prior to the commencement of the term of this Lease. *see page 17(a) In no event
shall the limits of said insurance policies be considered as limiting the
liability of Tenant under this Lease. In the event that Tenant shall fail to
obtain or maintain in full force and effect any insurance coverage required to
be obtained by Tenant under this Lease, Landlord may, but will not be obligated
to, procure same from such insurance carriers as Landlord may deem proper,
irrespective that a lesser premium for such insurance coverage may have been
obtained from another insurance carrier, and Tenant shall pay as Additional
Rent, upon demand of Landlord, any and all premiums, costs, charges and expenses
incurred or expended by Landlord in obtaining such insurance. Notwithstanding
the foregoing sentence, in the event Landlord shall procure insurance coverage
required of Tenant hereunder, Landlord shall in no manner be liable to Tenant
for any insufficiency, failure or non-renewal of coverage with regard to such
insurance or any loss to Tenant occasioned thereby, and additionally, the
procurement of such insurance by Landlord shall not relieve Tenant of its
obligations under this Lease to maintain insurance coverage in the types and
amounts herein specified, and Tenant shall nevertheless hold Landlord harmless
from any loss or damage incurred or suffered by Landlord from Tenant's failure
to maintain such insurance.
10.3 Fire and Extended Coverage Insurance. Tenant shall at all times during
the term hereof, and at its cost and expense, maintain in effect policies of
insurance covering all Alterations made by or on behalf of Tenant (including
without limitation all Tenant's Work) and Tenant's fixtures and equipment
located on the Premises, in an amount not less than eighty (80%) percent of
their full replacement value, providing protection against any peril included
within the standard classification of "Fire and Extended Coverage," together
with insurance against sprinkler damage, vandalism, theft and malicious
mischief. The proceeds of such insurance, so long as this Lease remains in
effect, shall be used to repair or replace the Alterations, fixtures and
equipment so insured.
10.4 Increase in Fire Insurance Premium. Tenant agrees that it will not
keep, use, sell or offer for sale in or upon the Premises any article which may
be prohibited by the standard form of fire and extended risk insurance policy.
Tenant agrees to pay any increase in premiums for fire and extended coverage
insurance that may be charged during the term of this Lease on the amount
of such
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* The foregoing notwithstanding, Tenant may maintain one (1) policy for both the
retail and professional space at the Project or insure both spaces through a
blanket policy acceptable to Landlord.
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insurance which may be carried by Landlord on the Premises or the Center
resulting from Tenant's use of the Premises, whether or not Landlord has
consented to the same. In determining whether increased premiums are the result
of Tenant's use of the Premises, a schedule issued by the organization making
the insurance rate on the Premises, showing the various components of such rate,
shall be conclusive evidence of the several items and charges which make up the
fire insurance rate on the Premises. Tenant agrees to promptly make, at Tenant's
cost, any repairs, alterations, changes and/or improvements to fixtures and
equipment in the Premises required by the company issuing Landlord's fire
insurance so as to avoid the cancellation of, or the increase in premiums on
said insurance.
In the event Tenant's occupancy and use of the Premises causes any increase
of premium for the fire, boiler and/or casualty insurance rates on the Premises
or any part thereof above the rate for the least hazardous type of occupancy
legally permitted in the Premises, Tenant shall pay the additional premium on
the fire, boiler and/or casualty insurance policies by reason thereof. Tenant
also shall pay in such event, any additional premium on the rent insurance
policy that may be carried by Landlord for its protection against rent loss
through fire. Bills for such additional premiums shall be rendered by Landlord
to Tenant at such times as Landlord may elect and shall be due from, and
payable by, Tenant when rendered, and the amount thereof shall be deemed to be
Additional Rent.
10.5 Indemnification of Landlord. Tenant shall indemnify, defend and save
Landlord harmless from and against any and all claims, notions, damages,
liability and expense in connection with loss of life, personal injury and/or
damage to or destruction of property arising from or out of any occurrence in,
upon or at the Premises, or the occupancy or use by Tenant of the Premises or
any part thereof, or occasioned wholly or in part by any act or omission of
Tenant, its agents, contractors, employees, servants, customers, invitees,
licensees, lessens or concessionaires. In case Landlord shall be made a party to
any litigation commenced by or against Tenant, then Tenant shall protect and
hold Landlord harmless and pay all costs and attorney's fees incurred by
Landlord in connection with such litigation, and any appeals thereof. Tenant
shall also pay all costs, expenses and reasonable attorneys' fees that may be
incurred or paid by Landlord in enforcing the covenants and agreements in this
Lease provided Landlord prevails in litigation.
10.6 Waiver of Subrogation. Landlord and Tenant waive, unless said waiver
should invalidate any such insurance, their right to recover damages against
each other for any reason whatsoever to the extent the damaged party recovers
indemnity from its insurance carrier. Any insurance policy procured by either
Tenant or Landlord which does not name the other as a named insured shall, if
obtainable, contain an express waiver of any right of subrogation by the
insurance company, including but not limited to Tenant's worker's compensation
insurance carrier, against Landlord or Tenant, whichever the case may be. All
public liability and property damage policies shall contain an endorsement that
Landlord, although named as insured, shall nevertheless be entitled to recover
for damages caused by the negligence of Tenant.
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Section 11. Services and Utilities.
Landlord covenants that it will, during the normal business hours for the
Center (8:00 a.m. to 6:00 p.m.) furnish to the Premises elevator service,
electricity, seasonal air-conditioning and heating, and water for lavatory
purposes. Additionally, Landlord will provide janitorial service for the
Premises and Center Common Areas and will cause the Center Common Areas to be
cleaned and generally maintained. Tenant shall pay to Landlord, as Additional
Rent, any cost associated with providing any building services for Tenant at
times other than the normal operating hours of the Center (including, but not
limited to during the initial build-out of the Premises, unless Tenant has
commenced the payment of rent hereunder), as determined from time to time by
Landlord, and the costs of any modification to any Center utility or service
system necessary to accommodate Tenant. Notwithstanding the aforesaid, Landlord
shall not be required to make any alteration to any service or utility system of
the Center on behalf of Tenant. Landlord shall not be liable for temporary
failure of services due to circumstances not within the direct control of
Landlord, and same shall not be deemed to constitute actual or constructive
eviction, nor entitle Tenant to any abatement or diminution in rent payable
under this Lease; provided, however, Landlord shall use reasonable efforts to
restore service.
Tenant shall be solely responsible for and promptly pay all charges for
water, electricity or any other utility used or consumed in the Premises. In the
event that any utility to the Premises shall not be separately metered, Landlord
shall apportion the cost of such utility among the various lessees served
thereby on either a square footage basis (based upon the proportion of the Gross
Leasable Area of the Premises as to the gross leasable area of the areas of the
Center served by the utility) or based upon the intensity of use by Tenant,
such basis to be determined by Landlord in its sole discretion. In the event of
such apportionment, Tenant shall pay to Landlord monthly, as Additional Rent,
Tenant's portion of the cost of such utility, within three (3) days of receipt
of a statement from Landlord therefor. In no event shall Landlord be liable for
an interruption or failure in the supply quality or quantity of any utilities or
failure in the supply quality or quantity of any utilities within the Premises
or Center, and same shall in no manner constitute an actual or constructive
eviction of Tenant, nor entitle Tenant to any abatement of any rent under this
Lease.
Tenant covenants and agrees that at all times its use of electric current
shall not exceed the capacity of actual feeders to the Center or the Center
risers or wiring installation. Tenant agrees not to connect any additional
electrical equipment to the Center electric distribution system, other than
lamps, typewriters, computers and other standard office machines which consume
comparable amounts of electricity, without Landlord's express prior written
consent.
Section 12. Subordination and Attornment.
12.1 Subordination. Tenant hereby subordinates its rights hereunder to the
lien of any ground or underlying leases, any mortgage or mortgages, or the lien
resulting from any other method of financing or refinancing, now or hereafter
in force against the Project and the Center, and to all advances made or
hereafter to be made upon the security thereof. This Section shall be
self-operative and
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no further instrument of subordination shall be required by any mortgagee, but
Tenant agrees upon request of Landlord, from time to time, to promptly execute
and deliver any and all documents evidencing such subordination, and failure to
do so shall constitute an Event of Default under this Lease.
12.2 Attornment. In the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under, any
mortgage made by Landlord or for the termination of any ground lease covering
the Premises or in the event a deed is given in lieu of foreclosure of any such
mortgage, Tenant shall attorn to the purchaser, or grantee in lieu of
foreclosure, upon any such foreclosure or sale and recognize such purchaser or
ground lessor, or grantee in lieu of foreclosure, as the lessee under this
Lease.
12.3 Financing Agreements. Tenant shall not: enter into, execute or deliver
any financing agreement that can be considered as having priority over any
mortgage or deed of trust that Landlord may have placed upon the Premises.
Section 13. Assignment and Subletting.
13.1 Consent Required. Tenant may not assign this Lease in whole or in
part, nor sublet all or any portion of the Premises. This prohibition against
assignment or subletting shall be construed to include prohibition against any
assignment or subleasing by operation of law, legal process, receivership,
bankruptcy or otherwise, whether voluntary or involuntary and a prohibition
against any encumbrance of all and any part of Tenant's leasehold interest.
Tenant acknowledges and agrees that any and all right and interest of the
Landlord in and to the Premises, the Center and the Project, and all right and
interest of the Landlord in this Lease, may be conveyed, assigned or encumbered
at the sole discretion of the Landlord at any time.
Section 14. Waste, Governmental Regulations.
14.1 Waste or Nuisance. Tenant shall not commit or suffer to be committed
any waste upon the Premises or any nuisance or other act or thing which may
disturb the quiet enjoyment of any other tenant in the Center, or which may
adversely affect Landlord's fee interest in the Premises, the Center or the
Project.
14.2 Governmental Regulations. Tenant shall, at Tenant's sole cost and
expense, comply with all regulations of all county, municipal, state, federal
and other applicable governmental authorities, now in force, or which may
hereafter be in force, pertaining to Tenant or its use of the Premises, and
shall faithfully observe in the use of the Premises or in the performance of any
Alterations
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(including, without limitation, Tenant's Work) all municipal and county
ordinances, codes and regulations any state and federal statutes and regulations
now in force or which may hereafter be in force. Tenant shall indemnify (and
such indemnity will survive the termination or expiration of the Lease), defend
and save Landlord harmless from penalties, fines, costs, expenses, suits,
claims, or damages resulting from Tenant's failure to perform its obligations in
this Section.
14.3 Hazardous Substances. Tenant shall not generate, store, keep, maintain
or use or dispose of or deposit in or upon the Premises or the Center any
"hazardous substance" or other toxic substance or matter; including, without
limitation, any such substance defined in the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601.
Section 15. Tenant's Compliance.
Tenant agrees to comply with all Rules and Regulations set Forth in Exhibit
"F" attached hereto and by this reference incorporated herein. Landlord shall
have the right from time to time to prescribe additional rules and regulations,
which in its judgment, may be desirable for the use, entry, operation and
management of the Premises, the Center and the Project, each of which rules and
regulations shall be deemed incorporated herein and made a part hereof by this
reference. No failure of Landlord to enforce such rules and regulations against
any other tenant will be deemed a default by Landlord hereunder, or excuse
compliance therewith by Tenant.
Section 16. Advertising.
16.1 Solicitation of Business. Tenant shall not distribute any handbills or
other advertising matter to customers or to automobiles parked in the Center
Common Areas or Project Common Areas.
16.2 Advertised Name and Address. Tenant shall not use the name of the
Center or Project for any purpose other than as the address of the business to
be conducted by Tenant in the Premises, and Tenant shall not acquire any
property right in or to any name which contains the name of the Center or
Project as a part thereof. Any permitted use by Tenant of the name of the
Center or Project during the term of this Lease shall not permit Tenant to use,
and Tenant shall not use, such name of the Center or Project either after the
termination of this Lease or at any other location. Tenant shall not use the
name of Landlord in any advertisement or otherwise.
16.3 Letters and Marks. Landlord shall have the right to prohibit the use
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by Tenant of the name, marks and symbols of the Center or Project in any manner
determined to be unacceptable to Landlord in its sole discretion.
Section 17. Destruction of Leased Premises.
17.1 Total or Partial Destruction. If the Premises shall be damaged by
fire, the elements, accident or other casualty, without the fault of Tenant, but
are not thereby rendered untenantable in whole or in part, Landlord shall at its
own expense cause such damage, except to Tenant's equipment and trade fixtures,
to be repaired in a reasonable period of time, but only to the extent of
Landlord's original obligation to construct pursuant hereto, and the rent
payable by Tenant hereunder shall not be abated. If by reason of such occurrence
the Premises shall be rendered untenantable only in part, Landlord shall at its
own expense cause the damage, except to Tenant's equipment and trade fixtures,
to be repaired, but only to the extent of Landlord's original obligation to
construct pursuant hereto, and the Fixed Minimum Annual Rate meanwhile shall be
abated proportionately as to the portion of the Premises rendered untenantable,
until the Premises has been restored as required hereby. If the Premises shall
be rendered wholly untenantable by reason of such occurrence, Landlord shall at
its own expense cause such damage, except to Tenant's equipment and trade
fixtures, to be repaired, but only to the extent of Landlord's original
obligation to construct pursuant hereto and the Rent meanwhile shall be abated
in whole, until the Premises has been restored as required hereby, except that
Landlord shall have the right, to be exercised by notice in writing delivered to
Tenant within ninety (90) days after said occurrence, to elect not to
reconstruct the destroyed Premises, and in such event this Lease and the tenancy
hereby created shall cease as of the date of the said occurrence. Nothing in
this Section shall be construed to permit any abatement in Additional Rent or
Fixed Minimum Annual Rent if such damage is caused by an act or omission of
Tenant.
17.2 Destruction of Center. In the event that Fifty (50%) percent or more
of the rentable area of the Center shall be damaged or destroyed by fire or
other cause, notwithstanding any other provisions contained herein and that the
Premises may be unaffected by such fire or other cause, Landlord shall have the
right, to be exercised by notice in writing delivered to Tenant within ninety
(90) days after said occurrence, to elect to cancel and terminate this Lease.
Upon the giving of such notice to Tenant, the term of this Lease shall expire by
lapse of time upon the third day after such notice is given, and Tenant shall
vacate the Premises and surrender the same to Landlord.
17.3 Damage Near End of Term. If the Premises are destroyed or damaged
during the last eighteen (18) months of the term of this Lease and the estimated
cost of repair exceeds ten percent (10%) of the Fixed Minimum Annual Rent then
remaining to be paid by Tenant For the balance of the term, Landlord may at its
option cancel and terminate this Lease as of the date of occurrence of such
damage by giving written notice to Tenant of its election to do so within thirty
(30) days after the data of occurrence of such
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damage. If Landlord shall not so elect to terminate this Lease, the repair of
such damage shall be governed by Section 17.1.
17.4 Reconstruction of Improvements. In the event of any reconstruction of the
Premises under this Article, said reconstruction shall be in substantial
conformity with the provisions of Exhibit "D" hereof to the extent of the work
as therein set forth as Landlord's Work. Tenant, at its sole cost and expense,
shall be responsible for the repair and restoration of all items set forth as
Tenant's Work in exhibit "D" and the replacement of its trade fixtures,
furniture, furnishing and equipment. Tenant shall commence the installation of
fixtures, equipment, and merchandise hereof promptly upon delivery to it of
possession of the Premises and shall diligently prosecute such installation to
completion.
17.5 Termination. Upon any termination of this Lease under any of the
provisions of this Article, the parties shall be released thereby without
further obligation to the other party coincident with the surrender of
possession of the Premises to Landlord, except all indemnities for matters which
have theretofore accrued and are then unpaid, for which Tenant shall remain
liable to Landlord.
Section 18. Eminent Domain.
18.1 Total Condemnation. If the whole of the Premises shall be acquired or
condemned by eminent domain or under threat thereof, then the term of this Lease
shall cease and terminate as of the date of title vesting in the condemning
governmental body or other authority pursuant to such proceeding and all rentals
and other charges shall be paid up to that date and Tenant shall have no claim
against Landlord or the condemning authority (except as specifically set forth
in Section 18.4), for the value of any unexpired term of this Lease.
18.2 Partial Condemnation. If a part of the Premises shall be acquired or
condemned by eminent domain or under threat thereof, and such partial taking or
condemnation shall render the Premises unsuitable for the business of Tenant,
then the term of this Lease shall cease and terminate as of the date of title
vesting in the condemning governmental body or other authority pursuant to such
proceeding and Tenant shall have no claim against Landlord or the condemning
authority (except as specifically set forth in Section 18.4) for the value of
any unexpired term of this Lease. In the event of a partial taking or
condemnation which is not extensive enough to render the Premises unsuitable for
the business of Tenant, then Landlord shall promptly restore the Premises to a
condition comparable to its condition at the time of such condemnation less the
portion lost in the taking, and this Lease shall continue in full force and
effect except that the Fixed Minimum Annual Rent shall be reduced in proportion
to the portion of the Premises lost in the taking and, if appropriate, there
shall be an equitable reduction in Additional Rent as a result of such
partial taking or condemnation.
18.3 Landlord's Damages. In the event of any condemnation or taking as
hereinbefore provided, whether whole or partial, Tenant shall not be entitled to
any part of the award, as damages or otherwise, for such condemnation, and
Landlord is to receive the full amount of such award,
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Tenant hereby expressly waives any right or claim to any part thereof.
18.4 Tenant's Damages. Although all damages in the event of any
condemnation are to belong to Landlord whether such damages are awarded as
compensation for diminution in value of the leasehold or the fee of the
Premises, Tenant shall have the right to claim and recover from the condemning
authority, but not from Landlord, such compensation as may be separately awarded
or recoverable by Tenant in Tenant's own right on account of any damage to
Tenant's business by reason of the condemnation and for or on account of any
cost or loss to which Tenant might be put in removing Tenant's merchandise,
furniture, fixtures, leasehold improvements and equipment from the Premises.
18.5 Sale Under Threat of Condemnation. A sale by Landlord to any authority
having the power of eminent domain, either under threat of condemnation or while
condemnation proceedings are pending, shall be deemed a taking under the power
of eminent domain for all purposes under this Article.
Section 19. Default of Tenant.
19.1 Event(s) of Default. Upon the happening of one or more of the events
set forth below in (a) to (i), inclusive (each, an "Event of Default"),
Landlord shall have any and all rights and remedies hereinafter set forth:
(a) In the event Tenant should fail to pay any installment of Fixed
Minimum Annual Rent or any other sums required to be paid hereunder as
Additional Rent within five (5) days of as and when the same become due;
(c) In the event a petition in bankruptcy under any present or future
bankruptcy laws (including but not limited to reorganization proceedings or
voluntary insolvency filing) be filed by or against Tenant or any Guarantor and
such petition is not dismissed within sixty (60) days from the filing thereof,
or in the event Tenant or any Guarantor is adjudged a bankrupt;
(d) In the event an assignment for the benefit of creditors is made by
Tenant;
(e) In the event of an appointment by any court of a receiver of other
court officer of Tenant's property and such receivership is not dismissed within
sixty (60) days from the date of such appointment;
(f) In the event Tenant removes, attempts to remove, or permits to be
removed from the Premises, except in the usual course of trade, the goods,
furniture, effects or other property of Tenant brought thereon;
(g) In the event Tenant, before the expiration of the term of this
Lease, and without the written consent of Landlord, vacates the Premises or
abandons the possession thereof, or uses the same for purposes other than the
purposes for which the same are
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hereby leased, or ceases to use the Premises for the purposes herein contained;
(h) In the event an execution or other legal process is levied upon
the goods, furniture, effects or other property of Tenant brought on the
Premises, or upon the interest of Tenant in this Lease, and the same is not
satisfied or dismissed within ten (10) days from such levy; or
(i) In the event Tenant violates any other term, condition or covenant
herein on the part of Tenant to be performed, and fails to commence and proceed
with diligence and dispatch to remedy the same within thirty (30) days after
written notice thereof is given by Landlord to Tenant.
19.2 Remedies of Landlord.
(a) If any Event of Default occurs, Landlord shall have the right, at
the option of Landlord, to terminate this Lease upon three (3) days written
notice to Tenant, and to thereupon re-enter and take possession of the Premises
with or without legal process. If any Event of Default occurs, Landlord shall
have the right, at its option, from time to time, without terminating this
Lease, to re-enter and re-let the Premises, or any part thereof, with or without
legal process, as the agent and for the account of Tenant upon such terms and
conditions as Landlord may deem advisable or satisfactory, in which event the
rents received on such re-letting shall be applied first to the expenses of such
re-letting and collection including but not limited to, necessary renovation and
alterations of the Premises, reasonable attorneys' fees, any real estate
commissions paid, and thereafter toward payment of all sums due or to become due
to Landlord hereunder, and if a sufficient sum shall not be thus realized or
secured to pay such sums and other charges, (i) at Landlord's option, Tenant
shall pay Landlord any deficiency immediately upon demand therefor,
notwithstanding that Landlord may have received periodic rental in excess of the
periodic rental stipulated in this Lease in previous or subsequent rental
periods, and Landlord may bring an action therefore as such deficiency shall
arise, or (ii) at Landlord's option, the entire deficiency, which is subject to
ascertainment for the remaining term of this Lease, shall be immediately due and
payable by Tenant. Nothing herein, however, shall be construed to require
Landlord to re-enter and re-let the Premises in any event. Landlord shall not,
in any event, be required to pay Tenant any surplus of any sums received by
Landlord on a re-letting of said Premises in excess of the rent provided in this
Lease.
(b) If any Event of Default occurs, Landlord shall have the right to
obtain injunctive and declaratory relief, temporary and/or permanent, against
Tenant or any acts, conduct or omissions of Tenant, and to further obtain
specific performance of any term, covenant or condition of this Lease.
(c) If any Event of Default occurs, Landlord shall have the right, at
its option, to declare all rent (or any portion thereof) for the entire
remaining term, and other indebtedness owing by Tenant to Landlord, if any,
immediately due and payable without regard to whether
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possession of the Premises shall have been surrendered to or taken by Landlord,
and may commence action immediately thereupon and recover judgment therefor.
(d) If any Event of Default occurs, Landlord, in addition to other
rights and remedies it may have, shall have the right to remove all or any part
of Tenant's property from the Premises and any property removed may be stored in
any public warehouse or elsewhere at the cost of, and for the account of Tenant
and Landlord shall not be responsible for the care or safekeeping thereof
whether in transport, storage or otherwise, and Tenant hereby waives any and all
claim against Landlord for loss, destruction and/or damage or injury which may
be occasioned by any of the aforesaid acts.
(e) No such re-entry or taking possession of the Premises by Landlord
shall be construed as an election on Landlord's part to terminate this Lease
unless a written notice of such intention is given to Tenant. Notwithstanding
any such re-letting without termination, Landlord may at all times thereafter
elect to terminate this Lease for such previous default. Any such re-entry shall
be allowed by Tenant without hindrance, and Landlord shall not be liable in
damages for any such re-entry, or guilty of trespass or forcible entry.
(f) Any rent which may be due Landlord, whether by acceleration or
otherwise, as herein provided in this Article, shall include Fixed Minimum
Annual Rent and any other rents, costs and expenses denominated as Additional
Rent in this Lease.
(g) It is expressly agreed that the forbearance on the part of
Landlord in the institution of any suit or entry of judgment for any part of the
rent herein reserved to Landlord, shall not serve as a defense against nor
prejudice a subsequent action for such rent. Tenant hereby expressly waives
Tenant's right to claim a merger or waiver of such subsequent action in any
previous suit or in the judgment entered therein. Furthermore, it is expressly
agreed that claim for liquidated Fixed Minimum Annual Rent may be regarded by
Landlord, if it so elects, as separate and independent claims capable of being
separately assigned.
(h) Any and all rights, remedies and options given in this Lease to
Landlord shall be cumulative and in addition to and without waiver of, or in
derogation of, any right or remedy given to it under any laws now or hereafter
in effect.
19.3 Waiver. The waiver (either expressed or implied by law) by Landlord of
any default of any term, condition or covenant herein contained shall not be a
waiver of any subsequent default of the same or any other term, condition or
covenant herein contained. The consent or approval by Landlord to or of any act
by Tenant requiring Landlord's consent or approval shall not be deemed to waive
or render unnecessary Landlord's consent to or approval of any subsequent
similar act by Tenant. No re-entry hereunder shall bar the recovery of rents or
damages for the default or delay on the part of Landlord to enforce any right
hereunder shall not be deemed a waiver of any preceding default by Tenant of any
term, covenant or condition of this Lease, or a waiver of the right of Landlord
to annul this Lease or to re-enter the Premises or to re-let same.
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19.4 Expenses of Enforcement. In the event any payment due Landlord under
this Lease shall not be paid within (5) days of the due date, Tenant agrees to
pay, in addition to the payment then due, the greater of (i) the sum of Ten and
00/100 Dollars ($10.00), or (ii) one-half percent (.5%) of the monthly
installment of Fixed Minimum Annual Rent, for each day and for each such
delinquent payment until made, and in the event that any check, bank draft,
order for payment or negotiable instrument given to Landlord for any payment
under this Lease shall be dishonored for any reason whatsoever not attributable
to Landlord, Landlord shall be entitled to make an administrative charge to
Tenant of One Hundred and 00/100 Dollars ($100.00). In the event that it shall
be necessary for Landlord to give more than one (l) written notice to Tenant of
any violation of this Lease, Landlord shall be entitled to make an
administrative charge to Tenant of Twenty-Five and 00/100 Dollars ($25.00) for
each such notice. Tenant recognizes and agrees that the charges which Landlord
is entitled to make upon the conditions stated in this Section represent, at the
time this Lease is made, a fair and reasonable estimate and liquidation of the
costs of Landlord in the administration of the Center resulting from the events
described which costs are not contemplated or included in any rent or other
charges provided to be paid by Tenant to Landlord in this Lease. Any charges
becoming due under this Section of this Lease shall be added to and become due
with the late payment for which the charge was assessed and shall be collectible
as a part thereof.
19.5 Legal Expenses. In the event that it shall become necessary for
Landlord to employ the services of an attorney to enforce any of its right under
this Lease or to collect any sums due to it under this Lease or to remedy the
breach of any covenant of this Lease on the part of Tenant to be kept or
performed, regardless of whether suit be brought, Tenant shall pay to Landlord
such reasonable fees and costs as shall be charged by Landlord's attorney or
paralegals for such services. Should suit be brought for the recovery of
possession of the Premises, or for rent or any other sum due Landlord under this
Lease, or because of the default of any of Tenant's covenants under this Lease,
Tenant shall pay to Landlord all expenses of such suit and any appeal thereof,
including a reasonable attorneys' fee.
Section 20. Access by Landlord.
20.1 Right of Entry. Landlord and Landlord's agents shall have the right to
enter the Premises at all times upon reasonable notice (except in the case of an
emergency when no notice is required), to examine the same, and to show them to
prospective purchasers or lessees of the Center, and to make such repairs,
alterations, improvements or additions as Landlord may deem necessary or
desirable, and Landlord shall be allowed to take all material into and upon the
Premises that may be required therefor without the same constituting an eviction
of Tenant in whole or in part, and the rent reserved shall not abate while said
repairs, alterations, improvements, or additions are being made unless Tenant is
prevented in any material respect or for any material length of time from
operating in the Premises in whole or in part, in which event Rent shall be
proportionately abated during said period. Landlord shall use reasonable efforts
to minimize disruption to Tenant's business and, to the extent practical, shall
give prior notice of the need to perform work. During the six (6) months prior
to the expiration of the term of this Lease or any renewal term, Landlord may
exhibit the Premises to prospective tenants or purchasers, and place upon the
Premises the usual notices "To Let" or "For Sale," or similar notices, which
notices Tenant shall permit to remain
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<PAGE>
thereon without molestation. If Tenant shall not be personally present to open
and permit entry into the Premises at any time when for any reason an entry
therein shall be necessary or permissible, Landlord or Landlord's agents may
enter the same without in any manner affecting the obligations and covenants of
this Lease. Nothing herein contained, however, shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever, for
the care, maintenance or repair of the Premises or the Center or any part
thereof, except as otherwise herein specifically provided.
Section 21. Tenant's Property.
21.1 Taxes on Leasehold. Tenant shall be responsible for and shall pay
before delinquent all municipal, county or state taxes assessed during the term
of this Lease against any leasehold interest or personal property of any kind,
owned by or placed in, upon or about the Premises by Tenant.
21.2 Loss and Damage. Unless caused by the gross negligence or willful
misconduct of Landlord, Landlord shall not be responsible for any damage to any
property of Tenant (including without limitation appliances, equipment,
machinery, stock, inventory, fixtures, furniture, improvements, displays,
decorations, carpeting and painting) or of others located on the Premises, nor
for the loss of or damage to any property of Tenant or of others by theft or
otherwise. Landlord shall not be liable for any injury or damage to persons or
property resulting from fire, smoke, explosion, falling plaster, steam, gas,
electricity, water, rain, or leaks from any part of the Premises or from the
pipes, appliances or plumbing works or from the roof, street or subsurface or
from any other place of by dampness or by any other cause of whatsoever nature.
Landlord shall not be liable for any such damage caused by other tenants or
persons on the Premises, occupants of the adjacent property, of the Center, or
the public, or caused by operations or construction of any private, public or
quasi-public works, or for failure to enforce against any other tenant the
provisions of such tenant's lease for Premises in the Center or Project.
Landlord shall not be liable for any latent defect in the Premises or in the
Center, unless discovered within one (1) year from the Commencement Date. All
property of Tenant kept or stored on the Premises shall be so kept or stored at
the risk of Tenant only and Tenant shall hold Landlord harmless from any and all
claims arising out of damage to same, including subrogation claims by Tenant's
insurance carriers.
21.3 Notice by Tenant. Once Tenant discovers same, Tenant shall give
immediate notice to Landlord in case of fire or accidents in the Premises or of
defects therein or in any fixtures or equipment.
21.4 Lien for Rent. In consideration of the mutual benefits arising under
this Lease, Tenant hereby grants to Landlord a lien on all property of Tenant
now or hereafter placed in or upon the Premises, and such property shall be and
remain subject to such lien of Landlord for payment of all rent and other sums
agreed to be paid by Tenant herein. Said lien shall be in addition to and
cumulative of Landlord's liens and other remedies provided by law.
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Section 22. Holding Over, Successors.
22.1 Holding Over. In the event Tenant remains in possession of the
Premises after the expiration of the tenancy created hereunder, and without the
execution of a new Lease, Tenant, at the option of Landlord, shall be deemed to
be occupying the Premises as a tenant at sufferance at a monthly rental equal to
two (2) times the Fixed Minimum Annual Rent payable during the last month of the
term hereof. In addition, Tenant agrees to pay monthly (a) one-twelfth (1/12) of
the taxes payable for the Lease Year immediately prior to the Lease Year in
which the expiration occurs, (b) the monthly Center Operating Costs (and costs
payable pursuant to Section 3.5 (b) hereof) charge payable for such month, (c)
cost of insurance for which Tenant would have been responsible if this Lease had
been renewed on the same terms contained herein, (d) all sales taxes assessed
against such increased rent, and (e) any and all Additional Rent otherwise
payable by Tenant hereunder. Such tenancy shall be subject to all the other
conditions, provisions and obligations of this Lease. Tenant's obligation to pay
any rents or sums provided in this Lease shall survive the expiration or earlier
termination of this Lease.
22.2 Successors. All rights and liabilities herein given to, or imposed
upon, the respective parties hereto shall extend to and bind the several
respective heirs, executors, administrators, successors, and permitted assigns
of the said parties and if there shall be more than one Tenant, they shall be
bound jointly and severally by the terms, covenants and agreements herein. No
rights, however, shall inure to the benefit of any assignee of Tenant unless the
assignment to such assignee has been approved by Landlord in writing as provided
herein. Nothing contained in this Lease shall in any manner restrict Landlord's
right to assign or encumber this Lease and, in the event Landlord sells its
interest in the Center and the purchaser assumes Landlord's obligations and
covenants, Landlord shall thereupon be relieved of all further obligations
hereunder.
Section 23. Quiet Enjoyment. Upon payment by Tenant of the rents and other
charges herein provided, and upon the observance and performance of all the
covenants, terms and conditions on Tenant's part to be observed and performed,
Tenant shall peaceably and quietly hold and enjoy the Premises for the term
hereby demised without material hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through or under
Landlord, subject, nevertheless, to the terms and conditions of this Lease.
Section 24. Miscellaneous.
24.1 Accord and Satisfaction. No payment by Tenant or receipt by Landlord
of a lesser amount than the rent herein stipulated to be paid shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any
endorsement or statement on 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 provided herein or by law.
24.2 Entire Agreement. This lease and the Exhibits attached hereto and
forming a part thereof as if
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<PAGE>
fully set forth herein constitute all covenants, promises, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises and the Center and there are no covenants, promises, conditions or
understandings, either oral or written, between them other than are herein set
forth. Neither Landlord nor Landlord's agents have made nor shall be bound to
any representations with respect to the Premises or the Center except as herein
expressly set forth, and all representations, either oral or written, shall be
deemed to be merged into this Lease. Except as herein otherwise provided, no
subsequent alteration, change or addition to this Lease shall be binding upon
Landlord or Tenant unless reduced to writing and signed by them. This Agreement
has been negotiated "at arm's length" by and between Landlord and Tenant, each
having the opportunity to be represented by legal counsel of its choice and to
negotiate the form and substance of this Lease, and therefore in construing the
provisions of this Lease neither party will be deemed disproportionately
responsible for draftsmanship.
24.3 No Partnership. Landlord does not, in any way or for any purpose,
become a partner of Tenant in the conduct of its business, or otherwise, or
joint adventurer or a member of a joint enterprise with Tenant, nor does
anything in this Lease confer any interest in Landlord in the conduct of
Tenant's business. Nothing contained herein shall be deemed or construed by the
parties hereto, or by any third party, as creating the relationship of principal
and agent, or of partnership or of joint venture between the parties hereto, it
being understood and agreed that neither the method of computation of rent nor
any other provision contained herein, nor any acts of the parties hereto, shall
be deemed to create any relationship of Landlord and Tenant.
24.4 Notices.
(a) Any notice by Tenant to Landlord must be served by certified mail
return receipt requested, addressed to Landlord at Landlord's Address as
specified in Section 1.1(f) of this Lease or at such other address as Landlord
may designate by written notice.
(b) After the Commencement Date, notices by Landlord to Tenant may be
given by certified mail, return receipt requested, or by contract carrier
providing proof of delivery, addressed to Tenant at the Premises or at such
other address as Tenant shall designate by written notice, or by delivery by
Landlord to the premises or to such other address. Prior to the Commencement
Date such notice may be given by Landlord by certified mail, return receipt
requested, or by contract carrier providing proof of delivery, delivered at
Tenant's Address specified in Section 1.1(n) hereof.
(c) All notices given hereunder shall be effective and deemed to have
been given upon receipt by the party to which notice is being given, said
receipt being deemed to have occurred upon hand delivery or posting, or upon
such date as the postal authorities shall show the notice to have been
delivered, refused, or undeliverable, as evidenced by the return receipt or
proof of delivery. Notwithstanding any other provision hereof, Landlord shall
also have the right to give notice to Tenant in any other manner provided by
law. If there shall be more than one Tenant, any notice required or permitted by
the terms of this Lease may be
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<PAGE>
given by or to any one thereof, and shall have the same force and effect as if
given to all thereof.
24.5 Captions and Section Numbers. The captions, section numbers, and
article numbers appearing in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the slope or
intent of such sections or articles of this Lease nor in any way affect this
Lease.
24.6 Use of Pronoun.
(a) The word "Tenant" shall be deemed and taken to mean each and every
person or party mentioned as a Tenant herein, and the permitted sublessees,
assigns and successors thereof. The use of the neuter singular pronoun to refer
to Landlord or Tenant shall be deemed a proper reference even though Landlord or
Tenant may be an individual, a partnership, a corporation, or a group of two or
more individuals or corporations. The necessary grammatical changes required to
make the provisions of this Lease apply in the plural sense where there is more
than one Landlord or Tenant and to either corporations, associations,
partnerships, or individuals, males or females, shall in all instances be
assumed as though in each case fully expressed.
(b) The word "Landlord" as used in this Lease shall mean only the
owner from time to time of Landlord's interest in this Lease. In the event of
any assignment of Landlord's interest in this Lease, the assignor shall no
longer be liable for the performance or observance of any agreements or
conditions on the part of Landlord to be performed or observed.
24.7 Brokers Commission. Each party represents and warrants that there are
no claims for brokerage commissions or finders' fees in connection with the
execution of this Lease, except as listed in Section 1.1(h) of this Lease, and
agrees to indemnify, defend and save the other harmless from all liabilities
arising from any such claim including, without limitation, the cost of counsel
fees, paralegal fees and costs in connection therewith.
24.8 Partial Invalidity. If any term, covenant or condition of this Lease
or the application thereof to any person or circumstances shall, to any extent,
be invalid or unenforceable, the remainder of this Lease, the application of
such term, covenant or condition to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Lease shall be valid and enforceable to
the fullest extent permitted by law.
24.9 Estoppel Certificate. Tenant agrees that it will, at any time and from
time to time, within ten (10) days following written notice by Landlord
specifying that it is given pursuant to this Section, execute, acknowledge and
deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect and stating the modifications), and
the date to which the Fixed Minimum Annual Rent, Annual Percentage Rent and any
other payments due hereunder from Tenant have been paid in advance, if any, and
stating whether or not there are defenses or offsets claimed by Tenant and
whether or not to the best of knowledge of
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<PAGE>
Tenant, Landlord is in default in performance of any covenant, agreement or
condition contained in this Lease, and if so, specifying each such default of
which Tenant may have knowledge and if requested, such financial information
concerning Tenant and Tenant's business operations (and the Guarantor of this
Lease, if this Lease be guaranteed) as may be reasonably requested by any
mortgagee or prospective mortgagee or purchaser. The failure of Tenant to
execute, acknowledge and deliver to Landlord a statement in accordance with the
provisions of this Section within said ten (10) business day period shall
constitute an acknowledgment by Tenant, which may be relied on by any person
holding or proposing to acquire an interest in the Center or any party thereof
or the Premises or this Lease from or through the other party, that this Lease
is unmodified and in full force and effect and that such rents have been duly
and fully paid to and including the respective due dates immediately preceding
the date of such notice and shall constitute, as to any person entitled as
aforesaid to rely upon such statements, waiver of any defaults which may exist
prior to the date of such notice. It is agreed that nothing contained in the
provisions of this Section shall constitute waiver by Landlord of any default in
payment of rent or other charges existing as of the date of such notice and,
unless expressly consented to in writing by Landlord, and Tenant shall still
remain liable for the same. Tenant shall also have the right to obtain an
estoppel certificate in a commercially reasonable form from Landlord within
twenty (20) days after request.
24.10 Recording. Tenant shall not record this Lease, or any memorandum or
short form thereof, without the written consent and joinder of Landlord; and any
such recording shall constitute an Event of Default.
24.11 Liability of Landlord. Tenant shall look solely to the estate and
property of Landlord in the Center for the collection of any judgment, or in
connection with any other judicial process, requiring the payment of money by
Landlord in the event of any default by Landlord with respect to any of the
terms, covenants and conditions of this Lease to be observed and performed by
Landlord, and no other property or estates of Landlord shall be subject to levy,
execution or other enforcement procedures for the satisfaction of Tenant's
remedies and rights under this Lease.
24.12 Waiver by Tenant. Tenant expressly waives all of the following: (a)
the requirement under Section 83.12 of the Florida Statutes that the plaintiff
in his distress for rent action file a bond payable to Tenant in at least double
the sum demanded by the plaintiff, it being understood that no bond shall be
required in any such action; (b) the right of tenant under Section 83.14 of the
Florida Statutes to replevy destrained property; (c) in the event of suit by or
against Landlord, then the venue of such suit shall be in Palm Beach County,
Florida, and Tenant hereby waives for itself whatever rights it may have in the
selection of venue; (d) TRIAL BY JURY IN CONNECTION WITH THE PROCEEDINGS OR
CLAIMS BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER, AND (e) the right of
non-compulsory counterclaim in any action brought by Landlord against Tenant for
damages or for possession of the Premises due to nonpayment of Fixed Minimum
Annual Rent or other sums required of Tenant under this Lease.
24.13 Time of the Essence. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, or have
caused the same to be executed as of the date and year first above written.
LANDLORD:
Signed, sealed and
delivered in the presence CROCKER DOWNTOWN DEVELOPMENT
of: ASSOCIATES, a Florida general
partnership
By: CROCKER MIZNER PARK I, LTD.,
a Florida limited partnership,
General Partner
By: CROCKER MIZNER PARK I, INC.
a Florida corporation,
General Partner
[ILLEGIBLE] 2/7/92 By: /s/ Thomas J. Crocker
- --------------------------- --------------------------------
Thomas J. Crocker
- --------------------------- President
TENANT: GKN HOLDINGS CORP.
[ILLEGIBLE] 1/28/92 By: [ILLEGIBLE]
- --------------------------- --------------------------------
- ---------------------------
<PAGE>
EXHIBIT A
SITE PLAN
<PAGE>
EXHIBIT "B"
SPACE PLAN OF PREMISES
<PAGE>
Office/Professional Space
<PAGE>
EXHIBIT "C"
SCHEDULE OF ADJUSTMENTS IN FIXED ANNUAL RENT
Suite No. 245, 5,700 Approx. Gross Leasable Sq. Ft.
The term of this Lease shall be sixty months (60) and shall begin in accordance
with Section 2.4.
The rent rates and Fixed Minimum Annual Rent (stated monthly) during the initial
term shall be:
PERIOD RATE/S.F. RENT
Months 01 - 12 7/1/92 - 6/30/93 $ 10.00 NNN $ 4,750.00
13 - 24 7/93 - 6/94 $ 11.00 NNN $ 5,225.00
25 - 36 7/94 - 6/95 $ 16.34 NNN $ 7,762.00
37 - 48 7/95 - 6/96 $ 16.34 NNN $ 7,762.00
49 - 60 7/96 - 6/97 $ 16.34 NNN $ 7,762.00
<PAGE>
EXHIBIT "D"
LANDLORD'S WORK AND TENANT'S WORK
GKN Holdings Corp.
Landlord will provide Tenant a tenant improvement allowance of $18.00 per usable
square foot total. Tenant will be responsible for all architectural and
mechanical fees related to the interior construction of the space.
All construction must be done by a licensed contractor providing a Performance
and Payment Bond.
Landlord has provided Tenant with a perimeter exterior enclosed building shell,
with concrete floors.
Tenant agrees to take space "AS IS, WHERE IS".
<PAGE>
EXHIBIT "F"
RULES AND REGULATIONS FOR
-----------------------------
1. The sidewalks and public portions of the Building, such as entrances,
passages, courts, parking areas, elevators, vestibules, stairways, corridors or
halls shall not be obstructed or encumbered by Tenant or its employees, agents,
invitees or guests nor shall they be used for any purpose other than ingress and
egress to and from the Premises.
2. No awnings or other projections shall be attached to the outside walls
of the Building. No curtains, blinds, shades, louvered openings or screens shall
be attached to or hung in, or used in connection with, any window or door of the
Premises, without the prior written consent of Landlord, unless installed by
Landlord. No aerial or antenna shall be erected on the roof or exterior walls of
the Premises or on the Building without the prior written consent of Landlord in
each instance.
3. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part of the outside of the
Premises or Building or on corridor walls or doors or mounted on the inside of
any windows without the prior written consent of Landlord. Signs on any entrance
door or doors shall conform to Building standards and shall, at Tenant's
expense, be inscribed, painted or affixed for Tenant by sign makers approved by
Landlord. In the event of the violation of the foregoing by Tenant, Landlord may
install and/or remove same without any liability and may charge the expense
incurred to Tenant.
4. The sashes, sash doors, skylights, windows, heating, ventilating and air
conditioning vents and doors that reflect or admit light and air into the halls,
passageways or other public places in the Building shall not be covered or
obstructed by Tenant, or its employees, agents, invitees or guests nor shall any
bottles, parcels, or other articles be placed outside of the Premises.
5. No show cases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the public halls,
corridors or vestibules without the prior written consent of Landlord.
6. From and after the Commencement Date, whenever Tenant shall submit to
Landlord any plan, agreement or other document for Landlord's consent or
approval, Tenant agrees to pay Landlord, on demand, a processing fee in a sum
equal to the reasonable fee for review of the same, including the services of
any architect, engineer or attorney employed by Landlord to review said plan,
agreement or document.
7. The water and wash closets and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
<PAGE>
damages resulting from any misuse of fixtures shall be borne by the Tenant who,
or whose employees, agents, invitees or guests shall have caused the same.
8. Tenant shall not in any way deface any part of the Premises or the
Building. Tenant shall not lay linoleum, or other similar floor covering, so
that the same shall come in direct contact with the floor of the Building, and,
if linoleum or other similar floor covering is desired to be used, an interling
of builder's deadening felt shall be first affixed to the floor, by a paste or
other material, soluble in water, the use of cement or other similar adhesive
material being expressly prohibited.
9. No animals of any kind (except seeing eye dogs) shall be brought upon
the Premises or Building. No cooking shall be done or permitted by Tenant on the
Premises except in conformity to law and then only in the utility kitchen (if a
utility kitchen was provided for in approved plans for the Premises or if
Landlord has consented in writing thereto), which is to be primarily used by
Tenant's employees for heating beverages and light snacks. No refrigeration or
heating equipment may be placed inside the Premises without the prior written
consent of Landlord in each instance. Tenant shall not cause or permit any
unusual or objectionable odors to be produced upon or permeate from the
Premises.
10. No office space in the Building shall be used for the distribution or
for the storage of merchandise or for the sale at auction or otherwise of
merchandise, goods or property of any kind.
11. Tenant shall not make or permit to be made, any unseemly or disturbing
noises or disturb or interfere with occupants of the Building or neighboring
Premises or those having business with them, whether by the use of any musical
instrument, radio, talking machine, unmusical noise, whistling, singing, or in
any other way. Tenant shall not throw anything out of the doors or windows or
down the corridors, stairwells or elevator shafts of the Building.
12. Neither Tenant nor any of Tenant's employees, agents, invitees or
guests shall at any time bring or keep upon the Premises any inflammable,
combustible or explosive substance or any chemical substance, other than
reasonable amounts of cleaning fluids and solvents required in the normal
operation of Tenant's business.
13. Landlord shall have a valid pass key to all spaces within the Premises
at all times during the term of this Lease. No additional locks or bolts of any
kind shall be placed upon any of the doors or windows by Tenant, nor shall any
changes be made in existing locks or the mechanism thereof, without the prior
written consent of the Landlord and unless and until a duplicate key is
delivered to Landlord. Tenant must, upon the termination of its tenancy, restore
to the Landlord all keys to stores, offices and toilet rooms, either furnished
to or otherwise procured by such Tenant, and in the event of the loss of any
keys so furnished, Tenant shall pay Landlord for the cost thereof.
14. All deliveries, removals and/or the carrying in or out of any safes,
freights, furniture or bulky matter of any description may be accomplished only
with the prior approval of Landlord and then only in approved areas, through the
approved loading/service area doors and during
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<PAGE>
approved hours. Tenant shall assume all liability and risk with respect to such
movements. Landlord may restrict the location where such heavy or bulky
matters may be placed inside the Premises. Landlord reserves the right to
inspect all freight to be brought into the Building and to exclude from the
Building all freight which can or may violate any of these Rules and Regulations
or the Lease of which these Rules and Regulations are a part.
15. Tenant shall not, unless otherwise approved by Landlord, occupy or
permit any portion of the Premises demised to it to be occupied as, by or for a
public stenographer or typist, barber shop, bootblacking, beauty shop or
manicuring, beauty parlor, telephone or telegraph agency, telephone or
secretarial service, messenger service, travel or tourist agency, employment
agency, public restaurant or bar, commercial document reproduction or offset
printing service, public vending machines, retail, wholesale or discount shop
for sale of merchandise, retail service shop, labor union, school or classroom,
governmental or quasi-governmental bureau, department or agency, including an
autonomous governmental corporation, a firm the principal business of which is
real estate brokerage, or a company engaged in the business of renting office or
desk space or for a public finance (personal loan) business or for
manufacturing. Tenant shall not engage or pay any employees on the Premises
except those actually working for Tenant on said Premises, nor advertise for
labor giving an address at said Premises.
16. Tenant shall not create or use any advertising mentioning or exhibiting
any likeness of the Building without the prior written consent of Landlord.
17. Landlord reserves the right to exclude from the Building between the
hours of 6:00 P.M. and 8:00 A.M. and at all hours on non-business days all
persons who do not present a pass to the Building on a form or card approved by
Landlord. Tenant shall be responsible for all its employees, agents, invitees or
guests who have been issued such a pass at the request of Tenant and shall be
liable to Landlord for all acts of such persons.
18. The Premises shall not be used for lodging or sleeping, or for any
immoral, disreputable or illegal purposes, or for any purpose which may be
dangerous to life, limb or property.
19. Any maintenance requirements of Tenant will be attended to by Landlord
only upon application at the Landlord's office at the Building. Landlord's
employees shall not perform any work or do anything outside of their regular
duties, unless under specific instructions from the office of Landlord.
20. Canvassing, soliciting and peddling within the Building or in Building
Common Areas is prohibited and Tenant shall cooperate to prevent the same.
21. There shall not be used in any space, or in the public halls of the
Building, either by Tenant or by jobbers or others, in the delivery or receipt
of merchandise
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<PAGE>
to Tenant, any hand trucks, except those equipped with rubber tires and side
guards. No hand trucks shall be used in elevators other than those designated by
Landlord as service elevators. All deliveries shall be confined to the service
areas and through the approved service entries.
22. In order to obtain maximum effectiveness of the cooling system, Tenant
shall lower and/or close venetian or vertical blinds or drapes when the sun's
rays fall directly on the exterior windows of the Premises.
23. In the event that, in Landlord's reasonable opinion, the replacement of
ceiling tiles becomes necessary after they have been removed on behalf of Tenant
by telephone company installers or others (in both the Premises and the public
corridors), the cost of such replacements shall be charged to Tenant on a per
tile basis.
24. All panelling or other wood products not considered furniture which
Tenant shall install in the Premises shall be of fire-retardant materials. Prior
to the installation of any such materials, Tenant shall submit to Landlord a
satisfactory (in the reasonable opinion of Landlord) certification of such
materials' fire-retardant characteristics.
25. Usage of non-reserved parking spaces shall be in common with all other
Tenants of the Building and their employees, agents, invitees and guests. All
parking space usage shall be subject to such reasonable rules and regulations
for the sale and proper use thereof as Landlord may prescribe. Tenant's
employees, agents, invitees and guests shall abide by all posted roadway signs
in and about the parking facilities.
26. All trucks and delivery vans shall be parked in designated areas only
and not parked in spaces reserved for cars. All delivery service doors are to
remain closed except during the time that deliveries, garbage removal or other
approved uses are taking place therein. All loading and unloading of goods shall
be done only at such times, in the areas and through the entrances designated
for such purposes by Landlord.
27. Tenant shall be responsible for the removal and proper disposition of
all crates, oversized trash, boxes and items termed garbage from the Premises.
The corridors, parking and delivery areas are to be kept clean from such items.
Tenant shall provide convenient and adequate receptacles for the collection of
standard items of trash and shall facilitate the removal of such trash by
Landlord. Tenant shall ensure that liquids are not disposed of in such
receptacles.
28. Tenant shall not conduct any business, loading or unloading, assembling
or any other work connected with Tenant's business in any public areas.
-4-
<PAGE>
29. If and when requested by Landlord, Tenant shall, at its sole cost
and expense, promptly cause the Premises to be treated for pests by a licensed
pest extermination contractor.
32. Tenant shall give Landlord prompt notice of all accidents to or defects
in air conditioning equipment, plumbing, electric facilities or any part or
appurtenance of the Premises.
33. Tenant agrees and fully understands that the overall aesthetic
appearance of the Project is of paramount importance; thus Landlord shall
maintain complete aesthetic control over any and every portion of the Premises
visible from outside the Premises including but not limited to all fixtures,
equipment, signs, exterior lighting, plumbing fixtures, shades, awnings,
merchandise, displays, art work, wall covering or any other object used in
Tenant's business. Landlord's control over the visual aesthetics shall be
complete and arbitrary. Landlord will notify Tenant in writing of any aesthetic
deficiencies and Tenant will have seven (7) days to correct the deficiencies to
Landlord satisfaction or Tenant shall be in default of this Lease and Section
19.02 shall apply.
34. Whenever and to the extent that the above Rules and Regulations
conflict with any of the rights or obligations of Tenant pursuant to the
provisions of the Lease, the provisions of the Lease shall govern.
-5-
<PAGE>
RIDER N0. 1 ANNEXED TO AND MADE A PART OF LEASE
CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD
GKN HOLDINGS CORP., AS TENANT
DATED ___________, 19__
TENANT FINISH WORK REQUIREMENTS
LANDLORD'S CONSTRUCTION COMPANY DESIGNEE COMPLETION OF ALL IMPROVEMENTS
1. In the event Tenant elects Landlord's construction company designee to
construct the improvements to the Premises, Landlord shall proceed in accordance
with the Floor Plan approved by Landlord and Tenant. In connection herewith,
Tenant shall furnish to Landlord, in writing, the exact location of all
telephone and electrical outlets within sixty (60) days of the date hereof or
accept placement of same by Landlord in its sole discretion. Tenant shall
furnish to Landlord, in writing, any selections, specifications, or colors
required by Tenant including but not limited to millwork, flooring, wallpaper,
paint, carpeting and any other furnish details within sixty (60) days of the
date hereof or accepts selection and/or installation of same by Landlord in its
sole discretion.
2. The construction of the improvements to the Premises as stated above
shall proceed unless Tenant specifically requests at a meeting with a
representative of Landlord (at Landlord's place of business) in writing that
Landlord, if in its sole discretion deems necessary, halt all improvements to
the Premises and provide Tenant information regarding the feasibility, cost, and
time delay, if any (a "Change Estimate"), associated with any modification,
addition, change, or deletion to the Floor Plan and Cost Estimate and Scope of
Work Schedule. Tenant shall be responsible for any and all delays necessitated
by halting all improvements and providing such Change Estimate information.
Further, Tenant shall pay for the costs, if any, incurred with respect to such
Change Estimate information including but not limited to costs related to
obtaining governmental approvals, architectural/engineering fees, subcontractor
costs and costs of materials.
Tenant shall review such Change Estimate information at Landlord's place of
business and Tenant shall immediately approve or disapprove such Change
Estimate. Landlord's construction company designee shall only implement changes
to the Floor Plan and Cost Estimate and Scope of Work Schedule specifically
authorized in Writing by Tenant. Tenant shall be responsible for any delay(s)
and/or increase in the cost of the improvements to the Premises resulting from
changes to the Floor Plan and Cost Estimate and Scope of Work Schedule.
3. Exhibit D to the Lease may provide an allowance for construction of
certain of the improvements to the Premises. Tenant shall not receive cash or
any credit against Fixed Minimum Annual Rent or Additional Rent for any unused
portion of such allowance.
4. Tenant shall adopt a schedule for construction and installation of any
work to be performed by Tenant's contractor in conformance with the schedule of
Landlord's contractor and conduct its work in such a manner as to maintain
harmonious labor relations and not as to unreasonably interfere with or delay
the work of Landlord's contractor. All of Tenant's contractors and
subcontractors shall employ union labor if required by Landlord. All said work
and labor to be performed by Tenant shall be subject to the administrative
supervision of Landlord's contractor (at no cost or expense to Tenant for such
administrative supervision).
5. Landlord shall give to Tenant and Tenant's contractors and
subcontractors access and entry to the Premises, reasonable use of the Building
facilities (including loading platforms, lifts, freight elevators, temporary
power, facilities for storage and protection of materials and all other
facilities available to subcontractors of Landlord's general contractors to the
same extent and upon the same terms and conditions as such facilities are
available for the use of subcontractors of Landlord's general contractor in
order to allow Tenant to adapt the Premises for Tenant's use.
<PAGE>
6. Tenant shall not be allowed to install any plumbing, mechanical work,
electrical wiring or fixtures, or modify, alter or install any apparatus which
would affect the Building's systems (other than those previously approved
writing in connection with Landlord's approval of the Floor Plans) without prior
written approval of Landlord in each instance.
8. Any difference between the tenant finish work allowance stated in
Exhibit D and the total cost for tenant improvements shall be paid by Tenant to
Landlord prior to Tenant's occupancy of the Premises. Tenant shall not receive
cash or any credit against Fixed Minimum Annual Rent or Additional Rent for any
unused portion of such fixed price tenant finish work allowance. Any increase in
the cost of the improvements to the Premises resulting from modifications,
additions, changes or deletions authorized in writing by Tenant shall be paid to
Landlord, at Landlord's option, upon authorization of any changes or prior to
Tenant's taking possession of the Premises or any part thereof. Until Landlord
has received full payment for any such increases proof of insurance as required
under the Lease, Tenant shall not be permitted to occupy the Premises
notwithstanding that Tenant's obligation to pay Fixed Minimum Annual Rent and
Additional Rent under the Lease remain in full force and effect. Additionally,
no less than three (3) days prior to Tenant's occupancy of the Premises,
Landlord's construction company designee and Tenant shall agree upon any
punchlist or insubstantial details of construction, decoration or mechanical
adjustment remaining to be performed, completed, repaired or adjusted (based
upon the construction standards prevailing in the county for similar property),
and the existence of such punchlist items shall not in any event constitute a
basis for postponing the commencement of the term of, or the accrual of rent
pursuant to, the Lease, provided, however, that none of the punchlist items
would interfere with Tenant's ability to do its work or open for and conduct its
business.
<PAGE>
RIDER NO. 2 TO LEASE AGREEMENT
BETWEEN
CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD
AND
GKN HOLDINGS CORP., AS TENANT
In accordance with the requirements of Florida Statutes Section 404.056(8),
the following notice is hereby given:
RADON GAS: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon testing may be obtained from your county public health unit.
LANDLORD:
/s/ Thomas J. Crocker
--------------------------------
By: Thomas J. Crocker, President
TENANT: GKN HOLDINGS CORP.
--------------------------------
By: [ILLEGIBLE]
-----------------------------
<PAGE>
RIDER NO. 3 ANNEXED TO AND MADE A PART OF LEASE
BETWEEN CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD
AND
GKN HOLDINGS CORP., AS TENANT
DATED __________, 19__
RENEWAL OPTION
Landlord hereby grants to Tenant, so long as Tenant shall not be in default
of any terms, covenants, payments or conditions of this Lease, the right and
option to renew the term of this Lease for two (2) periods of sixty (60) months
each (the "Renewal Term(s)"), commencing upon the expiration of the initial term
of this Lease. The terms of Lease during the Renewal Term(s) shall be upon the
same terms and conditions as during the initial term hereof, except that the
Fixed Minimum Annual Rent payable by Tenant during each twelve (12) months of
the Renewal Term(s) shall be ninety percent (90%) of the then prevailing market
rate.
If Landlord and Tenant fail to agree on the Fixed Annual Rent for each year
of the Renewal Term(s) within thirty (30) days after Tenant's exercise of its
option to renew, Landlord and Tenant shall each designate a MAI Appraiser to
request a valuation of the fair market rental value of the Premises for the
coming Renewal Term. On the failure of either party to designate an appraiser
within sixty (60) days after Tenant's exercise of its option to renew, the other
party shall have the right to designate an appraiser for the non-designating
party. Each party shall advise the other of the choice of appraiser. Each party
shall bear the expense of its designated appraiser and shall furnish the other
party with a copy of its completed appraisal. The Fixed Annual Rent for each
year of the coming Renewal Term shall be the average of the fair market rental
value established by the two appraisals, provided, however, in the event the
parties fail to agree that such average is a fair rental for the Premises and
the two appraisals differ by more than $1.00 per square foot, then and in that
event, a third appraiser shall be mutually selected by the first two appraisers.
The third appraiser shall establish the Fixed Annual Rent for each year of the
coming Renewal Term by selecting the valuation of one or the other of the first
two appraisers. The third appraiser shall not have the right to establish any
other rental rate. The Fixed Annual Rent for each year of the coming Renewal
Term as determined by the third appraiser shall be final and binding on the
parties. The expense of the third appraiser shall be shared equally by Landlord
and Tenant.
Tenant shall exercise its option to any Renewal Term, if at all, by written
notice to Landlord received by Landlord on or before six (6) months prior to the
expiration of the existing term. Tenant may not exercise its option to renew
during any period in which Tenant is in default of this Lease beyond applicable
grace period, and upon any such default hereunder by Tenant, Landlord may revoke
any extension option of Tenant remaining hereunder. Failure of Tenant to duly
and timely exercise its renewal options hereunder shall be conclusively deemed
to constitute a waiver of all renewal rights of Tenant hereunder. Failure of
Tenant to exercise any renewal option shall be deemed a waiver of Tenant's right
to any further or future renewal options.
<PAGE>
RIDER NO. 4 ANNEXED TO AND MADE A PART OF LEASE
BETWEEN CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD
AND
GKN HOLDINGS CORP., A TENANT
DATED ____________, 19__
Right of First Refusal (Right to Negotiate)
During the first twelve (12) months of the Lease Term, upon thirty (30)
days written notice to Landlord, Tenant shall have the option to lease the 4,713
rentable square feet described as the Expansion Space on Exhibit B to the Lease,
on the same terms and conditions as contained in the Lease.
Provided not less than twelve (12) months remain in the Lease Term
(including any Renewal Term), starting the first anniversary of the Commencement
Date, if the Expansion Space becomes the subject of negotiation by and between
Landlord and a prospective tenant for the space, interested in leasing such
space at a rent and on other terms acceptable to Landlord, then, provided that
Tenant shall not be in default under the Lease beyond applicable grace period,
Landlord shall promptly advise Tenant in writing of such available space and
provide Tenant with the opportunity to lease the Expansion Space on the same
terms and conditions as then in effect for the Premises or, at Tenant's option,
upon same terms and conditions offered by prospective tenant. Tenant shall
notify Landlord in writing, within ten business (10) day of the aforementioned
notice, of its intent to lease such space. Failure of Tenant to respond in
writing within ten business (10) days shall be deemed by Landlord to be a
refusal by Tenant to lease the Expansion Space provided, however, that in the
event such prospective tenant falls to lease upon the terms and conditions
offered to Tenant, then Landlord shall again offer the Expansion Space to Tenant
at such time as it again becomes the subject of negotiation.
<PAGE>
RIDER NO. 5 ANNEXED TO AND MADE A PART OF LEASE
BETWEEN CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD
AND
GKN HOLDINGS CORP., AS TENANT
DATED ___________, 19__
Subletting and Assignment
Supplementing the provisions set forth in Section 13 of this Lease, after
the first three (3) years of the Lease Term, Landlord shall not unreasonably
withhold its consent to Tenant's request to assign the Lease or sublet a portion
of the Premises, or any part of the Premises provided that the following terms
and conditions are satisfied.
1. Tenant shall submit in writing to Landlord, not later than thirty (30)
days prior to any anticipated assignment or subletting, (i) the name and address
of the proposed assignee or sublessee, (ii) a counterpart of the proposed
assignment or sublease, (iii) reasonably satisfactory information as to the
nature and character of the business of the proposed assignee or sublessee, and
as to the nature and character of its proposed use of the space, and (iv)
banking, financial or other credit information relating to the proposed assignee
or sublessee reasonably sufficient to enable Landlord to reasonably determine
the financial responsibility and character of the proposed assignee or
sublessee. The information submitted in accordance with this paragraph must
indicate that the assignee or sublessee is, in Landlord's sole opinion,
compatible with the nature and quality of the other tenants of the Project, and
the financial ability of the assignee or sublessee is, in Landlord's sole
opinion, sufficient to perform the monetary obligations under the Lease.
2. There shall be no default by Tenant, beyond any grace period, under any
of the terms, covenants and conditions of this Lease at the time that Landlord's
consent to any such assignment or subletting is requested and on the date of the
commencement of the term of any such proposed assignment or sublease.
3. Any such assignment or sublease shall provide that the assignee or
sublessee shall comply with all applicable terms and conditions of this Lease to
be performed by Tenant hereunder and the form and substance of the proposed
agreement shall be reasonably satisfactory to Landlord's attorney in all other
respects.
4. In no event shall the rent, additional rent or other consideration
payable under the proposed assignment or sublease be less than the Fixed Annual
Rent and all forms of additional rent due hereunder (or a pro rata portion
thereof based upon the square footage subleased) then being paid by Tenant to
Landlord under this Lease.
5. No assignment or subletting shall be made:
(a) To any person or entity which shall at that time be a tenant,
subtenant or other occupant of any part of the Project, or who dealt with
Landlord (directly or through a broker) with respect to space in the Project
during the six (6) months immediately preceding Tenant's request for Landlord's
consent;
<PAGE>
(b) By the legal representatives or successors in interest, by
operation of law, of the Tenant, except in compliance with the provisions of
this Rider; or
(c) To any person or entity for the conduct of a business which is not
in keeping with the standards and the general character of the Project.
(d) Where Tenant, assignee or sublessee has an interest in the
possession, use, occupancy, or utilization of the Premises which provides for
rental or other payments for such use, occupancy, or utilization based, in whole
or in part, on the net income or profits derived by any person from the Premises
leased, used, occupied or utilized (other than an amount based on a fixed
percentage or percentages of receipts of sales) and any such proposed lease,
assignment, sublease, license, concession or other agreement shall be absolutely
void and ineffective as a conveyance of any right or interest in the possession,
use, occupancy or utilization of any part of the Premises.
6. In the event that Tenant effects such assignment or subletting, then
Tenant thereafter shall pay to Landlord any rent, additional rent or other
consideration paid to Tenant by any assignee or sublessee which is in excess of
the rent then being paid by Tenant to Landlord under this Lease for the portion
of the Premises so assigned or sublet (on a pro-rated, square footage basis).
All sums payable hereunder by Tenant shall be payable to Landlord as additional
rent immediately upon receipt thereof by Tenant.
7. In the event that Tenant effects a subletting, then, at any time Tenant
shall be in default under the Lease, all rental payments of any kind due
Tenant/sublessor from the sublessee shall be paid directly to the Lessor, until
such time that the default is cured. Tenant shall deliver a fully-executed
photographic copy of any assignment or sublease to Landlord within ten (10) days
of its execution.
8. The permitted use of the Premises shall not change and no other or
further assignment or subletting of the Premises shall be made except in
compliance with the provisions of this Rider.
9. Tenant shall remain liable to Landlord for the prompt and continuing
payment of all forms of rent, additional rent or other considerations payable
under this Lease.
10. Notwithstanding anything hereinabove contained or contained in the body
of the Lease, Landlord agrees that an assignment of this Lease which is
delivered simultaneously to and in connection with assignments of substantially
all of the other assets of Tenant, to a single person or entity, so as to effect
an "asset transfer" of Tenant, shall not be an assignment as to which Landlord's
consent is required and such assignment can be made without Landlord's consent,
provided that Landlord shall be given not less than ten days prior written
notice of any such assignment.
<PAGE>
CROCKER & COMPANY
April 28, 1992
VIA FAX: 750-1947
Mr. Roger Gladstone
GKN Securities Corp.
185 NW Spanish River Blvd.
Suite 270
Boca Raton, Florida 33431
Re: Additional Space and Lease Modification at Mizner Park
Dear Roger:
Please allow this letter to follow-up my memorandum dated April 23, 1992
(enclosed). Based on your commitment to lease an additional 1,410 rentable
square feet on the second floor of Quadrant IV at Mizner Park, we hereby agree
to change your commencement date of base rent and operating expenses from the
current commencement date of September 10, 1992 to November 1, 1992.
This November 1, 1992 commencement date will apply to a total of 8,270 rentable
square feet: 6,770 on the second floor and 1,500 square feet on the first floor.
Roger, I will have my attorney incorporate both this letter and my April 23,
1992 memo into a formal lease modification agreement.
On behalf of Tom Crocker and Richard Ackerman, I want to thank you for your
cooperation on this matter.
Sincerely,
CROCKER & COMPANY
Dean J. Borg
Vice President
DJB/dr
<PAGE>
CROCKER & COMPANY
November 9, 1993
Mr. Roger N. Gladstone
President
GKN Securities Corp.
433 Plaza Real
Suite 245
Boca Raton, Florida 33432
Re: Second Amendment to Lease Agreement for Second Floor Expansion
Dear Roger:
Enclosed please find a fully executed agreement for the above-referenced
project.
If you should have any questions, please do not hesitate to call.
Thank you for your cooperation in this matter.
Sincerely,
CROCKER & COMPANY
/s/ L. Scott Rosenstein
L. Scott Rosenstein
Vice President
<PAGE>
SECOND AMENDMENT TO LEASE ENDORSEMENT
This Second Amend to Lease Agreement (the "Amendment") is made as of the
8th day of November, 1993 by and between CROCKER DOWNTOWN DEVELOPMENT
ASSOCIATES, a Florida general partnership (the "Landlord") and GKN SECURITIES
CORP., a New York corporation authorized to transact business in Florida (the
"Tenant").
RECITALS
I. Landlord and GKN HOLDINGS CORP., a New York corporation (the "Original
Tenant"), entered into that certain Mizner Park Professional Office Lease
Agreement dated February 10, 1992 (the "Lease") with respect to Suite No. 245 in
the Mizner Park project located in Boca Raton, Florida (the "Premises").
II. Landlord and the Original Tenant entered into that certain Lease
Modification Agreement dated June 4, 1992, pursuant to which the Premises were
expanded.
III. The Original Tenant has assigned its interest under the Lease to
Tenant.
IV. Landlord and Tenant are desirous of further amending and modifying the
Lease on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
conditions contained in this Amendment and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree to amend the
Lease as follows:
1. Incorporation of Recitals. The parties hereby warrant and represent that
the foregoing Recitals are accurate and correct hereby incorporate them in this
Amendment. All capitalized, defined terms used in this Amendment shall have the
same definitions as those set forth in the Lease unless otherwise specifically
indicated or unless the context clearly indicates to the contrary.
2. Expansion of Premises. Effective upon the Expansion Space Commencement
Date, the Premises shall be expanded to include all of the space outlined in red
on EXHIBIT "A" attached to this Amendment and made a part of this Amendment (the
"Expansion Space" ) as well as all of the space previously demised under the
Lease as previously amended. The Gross Leasable Area of the Premises, including
the Expansion Space, shall be 10,413 square feet.
10/25/93
<PAGE>
3. Construction of Premises. A. Landlord has made no representation or
promise as to the condition of the Expansion Space. Landlord shall not perform
any alterations, additions, or improvements in order to make the Expansion Space
suitable for Tenant, except that Landlord shall act as Tenant's construction
manager pursuant to Rider No. 1 attached hereto and made a part hereof and shall
provide Tenant a tenant finish work allowance pursuant to Subparagraph 5C.
Tenant has inspected the Expansion Space, is fully familiar with the physical
condition thereof, and shall accept the Expansion Space in "as is" condition.
Landlord shall not be liable for any latent or patent defect in the Expansion
Space.
B. Tenant shall, at its sole cost and expense, perform all work
necessary or desirable in connection with Tenant's occupancy of the Expansion
Space (the "Tenant's Work"). Within twenty-one (21) days after the date of this
Lease, Tenant shall furnish to Landlord, for Landlord's written approval, plans
and specifications for Tenant's Work, showing a layout, lighting plan, fixturing
plan, interior finish and material samples, signage plan, and any work to be
done or equipment to be installed by Tenant affecting any structural,
mechanical, or electrical portion of the Premises or the Project. Failure to
deliver such plans and specifications within such time period will constitute a
material default under this Lease. Design elements will be displayed in color
renderings in such detail as may be required by Landlord. The plans and
specifications will be prepared by a licensed architect and the electrical and
mechanical plans will be prepared by a licensed professional engineer. The plans
and specifications shall comply with all applicable laws, ordinances,
directives, rules, regulations, and other requirements imposed by any and all
governmental authorities having or asserting jurisdiction over the Premises.
Landlord shall review the plans and specifications and either approve or
disapprove them, in Landlord's sole discretion, within a reasonable period of
time. Tenant's Work shall be constructed by a general contractor selected and
paid for by Tenant and approved by Landlord. Tenant shall cooperate as
reasonably necessary so that its general contractor will cause the Tenant's Work
to be completed promptly and with due diligence. Tenant's Work shall be
performed in accordance with the plans and specifications as approved by
Landlord and shall be done in a good and workmanlike manner using new materials.
All such work shall be done in compliance with all other applicable provisions
of this Lease and with all applicable laws, ordinances, directives, rules,
regulations, and other requirements of any governmental authorities having or
asserting jurisdiction over the Premises, and Tenant shall, prior to the
commencement of any such work, at its sole cost and expense, obtain and exhibit
to Landlord all building and/or other governmental permits required in
connection with such work. Prior to the commencement of any work by Tenant,
Tenant shall furnish to Landlord a certificate evidencing the existence of
workers' compensation insurance complying with the requirements set
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-2-
<PAGE>
forth in the Insurance section of the Lease. Any damage to any part of the
Project which occurs as a result of Tenant's Work shall be promptly repaired by
Tenant.
C. If and so long as Tenant is not in default under the Lease, beyond
any applicable grace period, Tenant shall be entitled to a fixed price tenant
finish work allowance in an amount equal to $95,220.00. The tenant finish work
allowance shall be applied to the Work Cost (as defined in Rider No. 1). This
tenant finish work allowance is being paid by Landlord as an inducement to
Tenant to enter into this Amendment and as consideration for the execution of
this Amendment by Tenant and the performance by Tenant under the Lease for the
full term of the Lease.
4. Expansion Space Commencement Date. The "Expansion Space Commencement
Date" shall mean the earlier of the date when Tenant takes possession of the
Expansion Space or any portion of the Expansion Space for its business purposes
or the date of substantial completion of Tenant's Work. Substantial completion
shall be deemed to have occurred on the later of (i) the date that the architect
who has prepared the plans and specifications for Tenant's Work certifies that
Tenant's Work is substantially complete, and (ii) the date a Certificate of
Occupancy or its equivalent is issued by the City of Boca Raton with respect to
Tenant's Work, notwithstanding that minor punchlist items or insubstantial
details with respect to construction, decoration, or mechanical adjustment
remain to be performed as of such date. No less than three (3) days prior to
Tenant's occupancy of the Expansion Space, Landlord's designee and Tenant shall
agree upon a punchlist of the remaining work to be performed. Landlord shall
complete the items reflected in such punchlist as soon as reasonably possible
thereafter. Landlord shall, in accordance with the foregoing, fix the Expansion
Space Commencement Date and shall notify Tenant of the date so fixed. Tenant
shall, if Landlord so requests, thereafter execute a written memorandum
confirming the Expansion Space Commencement Date. The failure of Tenant to
execute such memorandum shall not effect the validity of the Expansion Space
Commencement date as fixed by Landlord.
5. Lease Term. The Lease Term is hereby increased from sixty (60) calendar
months to eighty-four (84) calendar months. The Lease Term shall expire on
October 31, 1999.
6. Proportionate Share. As of the Expansion Space Commencement Date,
Tenant's Proportionate Share shall be ten and fifty-nine one hundredths percent
(10.59%).
7. Fixed Minimum Annual Rent. As of the Expansion Space Commencement Date,
EXHIBIT "C" to the Lease shall be deleted and replaced by the new EXHIBIT "C"
attached to this amendment and made a part of this Amendment. The rent payments
set forth in the attached EXHIBIT "C" will be effective as of the Expansion
Space
10/25/93
-3-
<PAGE>
Commencement Date. By way of example, if the Expansion Space Commencement Date
occurred prior to November 1, 1993, the monthly Fixed Minimum Annual Rent
(excluding sales tax) would be $8,677.50. If the Expansion Space Commencement
Date occurred on or after November 1, 1993, the monthly Fixed Minimum Annual
Rent (excluding sale tax) would be $12,148.50.
8. Rent Credit. Notwithstanding anything contained in the Lease or this
Amendment to the contrary, as an inducement to Tenant to enter into this
Amendment and as consideration for the execution of this Amendment by Tenant,
Landlord agrees that if and so long as Tenant is not in default under the Lease,
beyond any applicable grace period, Tenant shall have a rent credit in the
amount of the Fixed Minimum Annual Rent payable with respect to the Expansion
Space only (and not the previously demised Premises) for the six month period
commencing on the Expansion Space Commencement Date.
9. Release of Original Tenant. Landlord hereby releases the Original Tenant
from liability under the Lease, as previously modified and as modified by this
Amendment. Tenant hereby consents to such release and agrees that such release
shall in no way affect its liability under the Lease, as amended.
10. Parking. Tenant shall have the use of a total of sixty (60) parking
spaces within the Project. Tenant, at its option, will have the right to use a
total of fifteen (15) additional parking spaces in the northwest or southwest
parking structures of the Project.
11. Ratification. Except as modified by this Amendment, the Lease shall
remain otherwise unmodified and in full force and effect and the parties hereby
ratify and confirm the terms of the Lease as previously modified and as modified
by this Amendment. Tenant hereby certifies that it has no offsets, defenses, or
claims with respect to its obligations under the Lease. All future references to
the Lease shall mean the Lease as amended and modified by this Amendment.
12. Benefit and Binding Effect. This Amendment shall be binding upon and
inure to the benefit of the parties to this Amendment, their legal
representatives, successors, and permitted assigns.
13. Amendment. This Amendment may not be changed, modified, or discharged
in whole or in part except by an agreement in writing signed by both parties to
this Amendment.
10/25/93
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment to Lease Agreement as of the date first above stated.
WITNESSES: LANDLORD
CROCKER DOWNTOWN DEVELOPMENT
ASSOCIATES, A Florida general
partnership
By: CROCKER MIZNER PARK I, LTD.,
a Florida limited partnership,
general partner
By: CROCKER MIZNER PARK I, INC.,
A Florida corporation, general
partner
[ILLEGIBLE] By: [ILLEGIBLE]
- ---------------------------- --------------------------------
[ILLEGIBLE]
- ----------------------------
TENANT:
GKN SECURITIES CORP., a New York
corporation authorized to transact
business in Florida
[ILLEGIBLE] By: [ILLEGIBLE]
- ---------------------------- --------------------------------
[ILLEGIBLE]
- ----------------------------
<PAGE>
EXHIBIT "A"
<PAGE>
EXHIBIT "C"
SCHEDULE OF ADJUSTMENTS
AND FIXED MINIMUM ANNUAL RENT
Suite number 245, 10,413 gross leasable sq. ft.
The Fixed Minimum Annual Rent (stated monthly and excluding sales tax)
during the initial term shall be:
PERIOD RATE/S.F. RENT
Commencement
Date through
October 31, 1993 $10.00 NNN $ 8,677.50
November 1, 1993 - $14.00 NNN $12,148.50
October 31, 1999
<PAGE>
RIDER NO. 1 ANNEXED TO AND MADE A PART OF
SECOND AMENDMENT TO LEASE AGREEMENT BETWEEN
CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES, AS LANDLORD,
AND
GKN SECURITIES CORP., AS TENANT
DATED NOVEMBER 8TH, 1993
1. Definitions. For purposes of this Rider and the Amendment to which it is
attached, the following terms shall have the following definitions:
1.1 "Plans" shall mean the plans and specifications for Tenant's Work
described in Subparagraph 3B of the Amendment.
1.2 "Work" shall mean all of the work required in connection with the
Plans and any extra work or changes performed pursuant to revisions to the
Plans.
1.3 "Work Cost" shall mean the aggregate of (i) engineering and
architectural fees in connection with the Work plus (ii) filing fees and permit
costs incurred in connection with the Work plus (iii) the actual cost of all
labor and materials furnished in connection with the Work, including all costs
associated with extra work or change orders plus (iv) ___% [Ten (10%) percent
if nothing is inserted in the blank] of such total actual costs of the Work,
including extra work or change orders, representing the Landlord's fee for
overhead and supervision.
2. Performance of Work. Landlord, or its designee, shall act as
construction manager for Tenant with respect to the Work. The terms of the
Standard Form of Agreement between Owner and Construction Manager, AGC Document
No. 510, and General Conditions for Trade Contractors under Construction
Management Agreements, AGC Document No. 520, are incorporated into this Rider to
the extent not inconsistent with the terms of this Rider or the Lease.
3. Bid Procedures. Within sixty (60) days after receipt of the Plans,
Landlord will procure and negotiate bids from not less than three (3)
contractors to act as the general contractor with respect to performance of the
Work. Landlord shall submit such bids to Tenant. Tenant shall, within five (5)
days of its receipt of such bids, select one of the three bidders to perform the
Work as the general contractor and will enter into a contract with such
contractor.
4. Construction Costs. Within ten (10) days after Tenant's selection of a
bid pursuant to the procedure set forth above, Tenant shall pay Landlord, in
cash, the difference between the Work Cost, as calculated by use of the amount
of the bid selected by Tenant, and the tenant finish work allowance to Tenant
pursuant to Subparagraph 3C of the Amendment. Tenant shall not receive cash or
<PAGE>
any credit against rent due under the Lease for any unused portion of the tenant
finish work allowance.
5. Changes in the Work. Tenant shall have the right to make changes from
time to time in the Plans by submitting to Landlord revised plans and
specifications. All costs associated with any such changes in the Plans shall be
included in the Work Cost. Tenant shall pay to Landlord the full amount of any
excess of the Work Cost over the tenant finish work allowance resulting from any
such changes within five (5) days of receipt of a notice from Landlord as to the
amount of such extra costs. Until Landlord has received full payment of such
increases, Tenant shall not be permitted to occupy the Expansion Space
notwithstanding that Tenant's obligation to pay Annual Base Rent and additional
rent under the Lease remains in full force and effect. Landlord may refuse to
consent to any proposed changes which would delay the Expansion Space
Commencement Date unless, in conjunction therewith, Tenant agrees to pay rent
for the Premises as of date Landlord reasonably determines that the Expansion
Space Commencement Date would have occurred but for completion of the changes.
6. Tenant's Access. Landlord will permit Tenant and its agents to enter the
Expansion Space prior to the Commencement Date for the purpose of making
inspections and taking measurements, provided that (i) in Landlord's sole
judgment, such entry will not delay or hamper the completion of the Work, and
(ii) Tenant's access to the Expansion Space shall be subject to all of the terms
and provisions of the Lease, except as to the payment of rent. Landlord may deny
Tenant access to the Expansion Space and may require that Tenant withdraw
therefrom and cease all work being performed by it or on its behalf by anyone
other than Landlord if Landlord shall determine that the commencement or
continuation, or both, of such work interferes with, hampers, or prevents
completion of the Work at the earliest possible date. Any entry by Tenant in the
Expansion Space prior to the Expansion Space Commencement Date shall be at
Tenant's sole risk and subject to Tenant obtaining Landlord's prior permission.
Tenant shall adopt a schedule for construction and installation of any work to
be performed on behalf of Tenant in addition to the Work in conformance with
Landlord's schedule for the Work and shall conduct its work in such a manner as
to maintain harmonious labor relations and so not as to interfere unreasonably
with or delay the Work. All of Tenant's contractors and subcontractors shall
employ union labor if required by Landlord. All of the work to be performed by
Tenant shall be subject to the administrative supervision of Landlord and the
general contractor.
7. Building Systems. Tenant shall not be allowed to install any plumbing,
mechanical work, electrical wiring, or fixtures or modify, alter, or install any
apparatus which would affect the Building's systems without the prior written
approval of Landlord in each instance.
<PAGE>
8. Delays. If Tenant's occupancy of the Expansion Space is delayed by any
cause within Tenant's control, then, any outside date set forth in the
Amendment for completion of the Work shall be extended by a period commensurate
with the length of such delay and Landlord may, at its option, require Tenant to
commence the payment of Fixed Minimum Annual Rent and additional rent on the
date Landlord reasonably determines that the Expansion Space Commencement Date
would have occurred but for such delay.
9. Punchlist. No less than three (3) days prior to Tenant's occupancy of
the Expansion Space, Landlord's designee and Tenant shall agree upon any
punchlist or insubstantial details of construction, decoration, or mechanical
adjustment remaining to be performed, completed, repaired, or adjusted (based
upon construction standards prevailing in Palm Beach County for similar
property), and the existence of such punchlist items shall not in any event
constitute a basis for postponing the commencement of the term of, or the
accrual of rent pursuant to, the Lease, provided, however, that none of the
punchlist items would materially interfere with Tenant's ability to open for and
conduct its business in the Expansion Space.
IN WITNESS WHEREOF, this Rider has been executed on behalf of Landlord and
Tenant as of the date set forth above.
CROCKER DOWNTOWN DEVELOPMENT
ASSOCIATES, A Florida General
partnership
By: CROCKER MIZNER PARK I, LTD.,
A Florida limited partnership,
general partner
By: CROCKER MIZNER PARK I, INC.,
A Florida corporation, general
partner
By: [ILLEGIBLE]
--------------------------------
GKN SECURITIES CORP., a New York
corporation authorized to transact
business in Florida
By: [ILLEGIBLE]
--------------------------------
<PAGE>
Schedule G-2
EXHIBIT 10.4
STANDARD FORM OF OFFICE LEASE
The Real Estate Board of New York, Inc.
Agreement of Lease, made as of this 25th day of June 1993, between THE TOWERS,
having an office at 111 Great Neck Road, Great Neck, New York, party of the
first part, hereinafter referred to as OWNER, and/or Landlord GKN Securities
Corp., 61 Broadway, New York, NY 10006 party of the second part, hereinafter
referred to as TENANT,
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
those premises known as the Main Floor, West Wing in the building known as THE
TOWERS, 111 Great Neck Road in the Village of Great Neck Plaza, for the term of
5 years (or until such term shall sooner cease and expire as hereinafter
provided) to commence on the first day of October nineteen hundred and ninety
three, and to end on the thirtieth day of September nineteen hundred and ninety
eight both dates inclusive, at an annual rental rate of 5216 sq. ft. $126,488.00
annually; $10,540.66 monthly; rent is $22.00/sq.ft.+$2.25/sq. ft for electric,
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
month during said term, at the office of Owner or such other place or at such
agent and at such place as Owner may designate, without any set off or deduction
whatsoever, except that Tenant shall pay the first _______ monthly
installment(s) on the execution hereof (unless the lease be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another lease with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly installment of rent payable hereunder and
the same shall be payable to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
Rent: 1. Tenant shall pay the rent as above and as hereinafter provided.
Occupancy: 2. Tenant shall use and occupy demised premises for general business
use, including brokerage business and investment banking (but not discount
brokerage business) and for no other purpose.
Tenant Alterations: 3. Tenant shall make no changes in or to the demised
premises of any nature without Owner's prior written consent which consent will
not be unreasonably withheld or delayed. Subject to the prior written consent of
Owner, and to the provisions of this article, Tenant, at Tenant's expense, may
make alterations, installations, additions or improvements, which are
nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved in each instance by Owner. Tenant shall,
before making any alterations, additions, installations or improvements, at its
expense, obtain all permits, approvals and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates of
final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner and Tenant agrees to carry and will
cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as Owner
may require. If any mechanic's lien is filed against the demised premises, or
the building of which the same forms a part, for work claimed to have been done
for, or materials furnished to, Tenant, whether or not done pursuant to this
article, the same shall be discharged by Tenant within sixty days after notice,
at Tenant's expense, filing the bond required by law. All fixtures and all
paneling, partitions, railings and like installations, installed in the premises
at any time, either by Tenant or by Owner on Tenant's behalf, shall, upon
installation, become the property of Owner and shall remain upon and be
surrendered with the demised premises unless Owner, by notice to Tenant no later
than twenty days prior to the date fixed as the termination of this lease,
elects to relinquish Owner's right thereto and to have them removed by Tenant,
in which event the same shall be removed from the demised premises by Tenant
prior to the expiration of the lease, at Tenant's expense. Nothing in this
Article shall be construed to give Owner title to or to prevent Tenant's removal
of trade fixtures, moveable office furniture and equipment, but upon removal of
any such from the premises or upon removal of other installations as may be
required by Owner, Tenant shall immediately and at its expense, repair any
damage to the demised premises or the building due to such removal. All property
permitted or required to be removed by Tenant at the end of the term remaining
in the premises after Tenant's removal shall be deemed abandoned and may, at the
election of Owner, either be retained as Owner's property or removed from the
premises by Owner, at Tenant's expense. Tenant shall not be obligated to remove
alterations consented to by Landlord.
Maintenance and Repairs: 4. Tenant shall, throughout the term of this lease,
take good care of the demised premises including and the fixtures and
appurtenances therein. Tenant shall be responsible for all damage or injury to
the demised premises or any other part of the building and the systems and
equipment thereof, whether requiring structural or nonstructural repairs caused
by or resulting from carelessness, omission, neglect or improper conduct of
Tenant, Tenant's subtenants, agents, employees, invitees or licensees, or which
arise our or any work, labor, service or equipment done for or supplied to
Tenant or any subtenant or arising out of the installation, use or operation of
the property or equipment of Tenant or any subtenant. Landlord is responsible
for the maintenance and repair of the building and all building systems and for
all [illegible] Tenant shall also repair all damage to the building and the
demised premises caused by the moving of Tenant's fixtures, furniture and
equipment. Tenant shall promptly make, at Tenant's expense, all repairs in and
to the demised premises for which Tenant is responsible, using only the
contractor for the trade or trades in question, selected from a list of at least
two contractors per trade submitted by Owner. Any other repairs in or to the
building or the facilities and systems thereof for which Tenant is responsible
shall be performed by Owner at the Tenant's expense. Owner shall maintain in
good working order and repair the exterior and the structural portions of the
building, including the structural portions of its demised premises, and the
public portions of the building interior and the building plumbing, electrical,
heating and ventilating systems (to the extent such systems presently exist)
serving the demised premises. Tenant agrees to give prompt notice of any
defective condition in the premises for which Owner may be responsible
hereunder. There shall be no allowance to the Tenant for a diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner or others making repairs,
alterations, additions or improvements in or to any portion of the building or
the demised premises or in and to the fixtures, appurtenances or equipment
thereof. It is specifically agreed that Tenant shall not be entitled to any
setoff or reduction of rent by reason of any failure of Owner to comply with the
covenants of this or any other article of this Lease. Tenant agrees that
Tenant's sole remedy at law in such instance will be by way of any action for
damages for breach of contract. The provisions of this Article 4 shall not apply
in the case of fire or other casualty which are dealt within Article 9 hereof.
Window Cleaning: 5. Tenant will not clean nor require, permit, suffer or allow
any window in the demised premises to be cleaned from the outside in violation
of Section 202 of the Labor Law or 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, Insurance Services Office, or any similar
body which shall impose any violation, order or duty upon Owner or Tenant with
respect to the demised premises, arising out of Tenant's use or manner of use
thereof, or, with respect to the building if arising out of Tenant's
<PAGE>
use or manner or use of the premises or the building (including the use
permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violate any such laws,
ordinances, orders, rules, regulations or requirements with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties, and expenses, including but not limited to, reasonably
attorney's fees, by cash deposit or by surety bond in an amount and in a company
satisfactory to Owner, consent and appeal any such laws, ordinances, orders,
rules, regulations or requirements provided same is done with all reasonable
promptness and provided such appeal shall not subject Owner to prosecution for a
criminal offense or constitute a default under any lease or mortgage under which
Owner may be obligated, or cause the demised premises or any part thereof to be
condemned or vacated. Tenant shall not do or permit any act or thing to be done
in or to the demised premises which is contrary to law, or which will invalidate
or be in conflict with public liability, fire or other policies of insurance at
any time carried by or for the benefit of Owner with respect to the demised
premises or the building of which the demised premises form a part, or which
shall or might subject Owner to any liability or responsibility to any person or
for property damage. Tenant shall not keep anything in the demised premises
except as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity as so not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant's occupancy. Tenant shall pay all costs, expenses, fines, penalties, or
damages, which may be imposed upon Owner by reason of Tenant's failure to comply
with the provisions of this article and if by reason of such failure the fire
insurance rate shall, at the beginning of this lease or at any time thereafter,
be higher than it otherwise would be, then Tenant shall reimburse Owner, as
additional rent hereunder, for that portion of all fire insurance premiums
thereafter paid by Owner which shall have been charged because of such failure
by Tenant. In any action or proceeding wherein Owner and Tenant are parties, a
schedule or "make-up" of rate for the building or demised premises issued by the
New York Fire Insurance Exchange, or other body making fire insurance rates
applicable to said premises shall be conclusive evidence of the facts therein
stated and of the several items and charges in the fire insurance rates then
applicable to said premises. Tenant shall not place a load upon any floor of the
demised premises exceeding the floor load per square foot area which it was
designed to carry and which is allowed by law. Owner reserves the right to
prescribe the weight and position of all safes, business machines and mechanical
equipment. Such installations shall be placed and maintained by Tenant, at
Tenant's expense, in settings sufficient, in Owner's reasonable judgement, to
adsorb and prevent vibration, noise and annoyance.
Subordination: 7. This lease is subject and subordinate to all mortgages which
may now or hereafter affect such leases or the real property of which demised
premises are a part and to all renewals, modifications, consolidations,
replacements and extensions of any such underlying leases and mortgages. This
clause shall be self-operative and no further instrument or subordination shall
be required by any ground or underlying lessor or by any mortgagee, affecting
any lease or the real property of which the demised premises are a part. In
confirmation of such subordination, Tenant shall from time to time execute
promptly any certificate that Owner may request. Landlord represents that it is
the fee owner of said real property.
Property - Loss, Damage, Reimbursement, Indemnity: 8. Owner or its agents shall
not be liable for any damage to property of Tenant or of others entrusted to
employees of the building, nor for loss of or damage to any property of Tenant
by theft or otherwise, nor for any injury or damage to persons or property
resulting from any cause of whatsoever nature, unless caused by or due to the
negligence of Owner, its agents, servants or employees. Owner or its agents
shall not be liable for any such damage caused by other tenants or persons in,
upon or about said building or caused by operations in construction of any
private, public or quasi public work.
If at any time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked up, if
required by law) for any reason whatsoever including, but not limited to Owner's
own acts, Owner shall not be liable for any damage Tenant may sustain thereby
and Tenant shall not be entitled to any compensation therefor nor abatement or
diminution of rent nor shall the same release Tenant from its obligations
hereunder nor constitute an eviction. Tenant shall indemnify and save harmless
Owner against and from all liabilities, obligations, damages, penalties, claims,
costs and expenses for which Owner shall not be reimbursed by insurance,
including reasonable attorney's 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 sub-tenant, and any agent, contractor, employee,
invitee or licensee of any sub-tenant. In case any action or proceeding is
brought against Owner by reason of any such claim, Tenant, upon written notice
from Owner, will, at Tenant's expense, resist or defend such action or
proceeding by counsel approved by Owner in writing, such approval not to be
unreasonably withheld.
Destruction, Fire and Other Casualty: 9. (a) If the demised premises or any part
thereof shall be damaged by fire or other casualty, Tenant shall give immediate
notice thereof to Owner and this lease shall continue in full force and effect
except as hereinafter set forth. (b) If the demised premises are partially
damaged or rendered partially unusable by fire or other casualty, the damages
thereto shall be repaired by and at the expense of Owner and the rent, until
such repair shall be substantially completed, shall be apportioned from the day
following the casualty according to the part of the premises which is usable.
(c) If the demised premises are totally damaged or rendered wholly unusable by
fire or other casualty, then the rent shall be proportionately paid up to the
time of the casualty and thenceforth shall cease until the date when the
premises shall have been repaired and restored by Owner, subject to Landlord's
right to elect not to restore the same as hereinafter provided. (d) If the
demised premises are rendered wholly unusable or (whether or not the demised
premises are damaged in whole or in part) if the building shall be so damaged
that Owner shall decide to demolish it or to rebuild it, then, in any such
events, Owner may elect to terminate this lease by written notice to Tenant,
given within 30 days after such fire or casualty, specifying a date for the
expiration of the lease, which date shall not be more than 60 days after the
giving of such notice, and upon the date specified in such notice the term of
this lease shall expire as fully and completely as if such date were the date
set forth above for the termination of this lease and Tenant shall forthwith
quit, surrender and vacate the premises without prejudice however, to Landlord's
rights and remedies against Tenant under the lease provisions in effect prior
to such termination, and any rent owing shall be paid up to such date and any
payments of rent made by Tenant which were on account of any period subsequent
to such date shall be returned to Tenant. Unless Owner shall serve a termination
notice as provided herein, Owner shall make the repairs and restorations under
the conditions of (b) and (c) hereof, with all reasonable expedition, subject to
delays due to adjustment of insurance claims, labor troubles and causes beyond
Owner's control. After any such casualty, Tenant shall cooperate with Owner's
restoration by removing from the premises as promptly as reasonably possible,
all of Tenant's salvageable inventory and movable equipment, furniture, and
other property. Tenant's liability for rent shall resume five (5) days after
written notice from Owner that the premises are substantially ready for Tenant's
occupancy. (e) Nothing contained hereinabove shall relieve Tenant from liability
that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing; each party shall look first to any insurance in
its favor before making any claim against the other party for recovery for loss
or damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery against the
other or any one claiming through or under each of them by way of subrogation or
otherwise. The foregoing release and waiver shall be in force only if both
releasors, insurance policies contain a clause providing that such a release or
waiver shall not invalidate the insurance. If, and to the extent, that such
waiver can be obtained only by the payment of additional premiums, then the
party benefitting from the waiver shall pay such premium within ten days after
written demand or shall be deemed to have agreed that the party obtaining
insurance coverage shall be free of any further obligation under the provisions
hereof with respect to waiver or subrogation. Tenant acknowledges that Owner
will not carry insurance on Tenant's furniture and/or furnishings or any
fixtures or equipment, improvements, or appurtenances removable by Tenant and
agrees that Owner will not be obligated to repair any damage thereto or replace
the same. (f) Tenant hereby waives the provisions of Section 227 of the Real
Property Law and agrees that the provisions of this article shall govern and
control in lieu thereof. Notwithstanding anything contained herein to the
contrary, if the premises have not been repaired within five (5) months of the
date of the casualty; Tenant may terminate this Lease.
Eminent Domain: 10. If the whole or any part of the demised premises shall be
acquired or condemned by Eminent Domain for any public or quasi public use or
purpose, then and in that event, the term of this lease shall cease and
terminate from the date of title vesting in such proceeding and Tenant shall
have no claim for the value of any unexpired term of said lease and assigns to
Owner, Tenant's entire interest in any such award. Tenant may make its own claim
for its improvements.
Assignment, Mortgage, Etc. 11. Tenant, for itself, its heirs, distributees,
executors, administrators, legal representatives, successors and assigns,
expressly covenants that it shall not assign, mortgage or encumber this
agreement, nor underlet, or suffer or permit the demised premises or any part
thereof to be used by others, without the prior written consent of Owner in each
instance. Transfer of the majority of the stock of a corporate Tenant shall be
deemed an assignment. If this lease be assigned, or if the demised premises or
any part thereof be underlet or occupied by anybody other than Tenant, Owner
may, after default by Tenant, collect rent from the assignee, under-tenant or
occupant, and apply the net amount collected to the rent herein reserved, but
not such assignment, underletting, occupancy or collection shall be deemed a
waiver of this covenant, or the acceptance of the assignee, under-tenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. The consent by
Owner to an assignment or underletting shall not in any wise be construed to
relieve Tenant from obtaining the express consent in writing of Owner to any
further assignment or underletting.
Electric Current: See Rider Annexed.
Access to Premises: 13. Owner or Owner's agents shall have the right (but shall
not be obligated) to enter the demised premises in any emergency at any time,
and, at other reasonable times on reasonable notice, to examine the same and to
make such repairs, replacements and improvements as Owner may deem necessary and
reasonably desirable to the demised premises or to any other portion of the
building or which Owner may elect to perform. Tenant shall permit Owner to use
and maintain and replace pipes and conduits in and through the demised premises
and to erect new pipes and conduits therein provided they are concealed within
the walls, floor, or ceiling. Owner may, during the progress of any work in the
demised premises, take all necessary materials and equipment into said premises
without the same constituting an eviction nor shall the Tenant be entitled to
any abatement of rent while such work is in progress nor to any damages by
reason of loss or interruption of business or otherwise. Landlord shall not
interfere with or interrupt the operation of Tenant's business. Throughout the
term hereof Owner shall have the right to enter the demised premises at
reasonable hours for the purpose of showing the
<PAGE>
same to prospective purchasers or mortgagees of the building, and during the
last three months of the term for the purpose of showing the same to prospective
tenants. If Tenant is not present to open and permit an entry into the premises
Owner or Owner's agents may enter the same whenever such entry may be necessary
or permissible by master key or forcibly and provided reasonable care is
exercised to safeguard Tenant's property, such entry shall not render Owner or
its agents liable therefor, nor in any event shall the obligations of the
Tenant hereunder be affected. If during the last month of the term Tenant shall
have removed all or substantially all of Tenant's property therefrom, Owner may
immediately enter, alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to Tenant for any
compensation and such act shall have no effect on this lease or Tenant's
obligation hereunder.
Vault, Vault Space, Area: 14. No vaults, vault space or area, whether or not
enclosed or covered, not within the property line of the building is leased
hereunder anything contained in or indicated on any sketch, blue print or plan,
or anything contained elsewhere in this lease to the contrary notwithstanding.
Owner makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the property
line of the building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area be diminished or required by any
federal, state or municipal authority or public utility, Owner shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
municipal authorities for such vault or area shall be paid by Tenant.
Occupancy: 15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event, Owner makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record.
Bankruptcy: 16. (a) Anything elsewhere in this lease to the contrary
notwithstanding, this lease may be cancelled by Owner by the sending of a
written notice to Tenant within a reasonable time after the happening of any
one or more of the following events: (1) the commencement of a case in
bankruptcy or under the laws of any state naming Tenant as debtor; or (2) the
making by Tenant of an assignment or any other arrangement for the benefit of
creditors under any state statute. Neither Tenant nor any person claiming
through or under Tenant, or by reason of any statute or order of court, shall
thereafter be entitled to possession of the premises demised but shall
forthwith quit and surrender the premises. If this lease shall be assigned in
accordance with its terms, the provisions of this Article 16 shall be
applicable only to the party then owning Tenant's interest in this lease.
(b) it is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rent reserved hereunder for the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises for the same
period. In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be relet by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent 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 Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
Default: 17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease including the covenants for the payments of rent or additional rent; or if
the demised premises becomes vacant or deserted; or if the demised premises
becomes vacant or deserted; or if any execution or attachment shall be issued
against Tenant or any of Tenant's property whereupon the demised premises shall
be taken or occupied by someone other than Tenant; or if this lease be rejected
under Section 235 of Title 11 of the U.S. Code (bankruptcy code); or then, in
any one or more of such events, upon Owner 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 during 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 Owner 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
and expires 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 Owner 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 Owner 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 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, Owner may cancel and terminate such
renewal or extension agreement by written notice.
Remedies of Owner and Waiver of Redemption: 18. In case of any such default,
re-entry, expiration and/or dispossess by summary proceedings or otherwise,
(a) the rent, shall become due thereupon and be paid up to the time of such
re-entry, dispossess and/or expiration, (b) Owner may re-let the premises or
any part or parts thereof, either in the name of Owner or otherwise, for a term
or terms, which may at Owner's option be less than or exceed the 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
Owner 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 Owner to re-let the premises or any part or
parts thereof shall not release or affect Tenant's liability for damages. In
computing such liquidated damages there shall be added to the said deficiency
such expenses as Owner may incur in connection with re-letting, such as legal
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 Owner
to collect the deficiency for any subsequent month by a similar proceeding.
Owner, in putting the demised premises in good order or preparing the same for
re-rental may, at Owner's option, make such alterations, repairs, replacements,
and/or decorations in the demised premises as Owner, in Owner's sole judgment,
considers advisable and necessary for the purpose or 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. Owner 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 Owner
hereunder. In the event of a breach or threatened breach by Tenant of any of
the covenants or provisions hereof, Owner 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 Owner 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 Owner
obtaining possession of demised premises, be 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, Owner may immediately or at
any time thereafter and without notice perform the obligation of Tenant
thereunder. If Owner, in connection with the foregoing or in connection with
any default by Tenant in the covenant to pay rent hereunder, 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 proceedings, then Tenant will reimburse Owner for such sums so paid
or obligations incurred with interest and costs. The foregoing expenses
incurred by reason of Tenant's default shall be deemed to be additional
rent hereunder and shall be paid by Tenant to Owner within fifteen days of
rendition of any bill or statement to Tenant therefor. If Tenant's lease term
shall have expired at the time of making of such expenditures or incurring of
such obligations, such sums shall be recoverable by Owner as damages.
Building Alterations and Management: 20. Owner shall have the right at any time
without the same constituting an eviction and without incurring liability to
Tenant therefor to change the arrangement and/or location or 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. There shall be no allowance to Tenant for
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner or other
Tenants making any repairs in the building or any such alterations, additions
and improvements. Furthermore, Tenant shall not have any claim against Owner by
reason of Owner's imposition of such controls of the manner of access to the
building by Tenant's social or business visitors as the Owner may deem necessary
for the security of the building and its occupants.
No Representations by Owner: 21. Neither Owner nor Owner's agents have made any
representations or promises with respect to physical condition of the building,
the land upon which
<PAGE>
it is erected or the demised premises, the rents, leases, expenses of operation
or any other matter or thing affecting or related to the premises except as
herein expressly set forth and no rights, easements or licenses are acquired
by Tenant by 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 Owner and Tenant and any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part, unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
End of Term: 22. Upon the expiration or other termination of the term of this
lease, Tenant shall quit and surrender to Owner the demised premises, broom
clean, in good order and condition, ordinary wear and damages which Tenant is
not required to repair as provided elsewhere in this lease excepted, and Tenant
shall remove all its property. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of this lease. If the
last day of the term of this Lease or any renewal thereof, falls on Sunday, this
lease shall expire at noon on the preceding Saturday unless it be a legal
holiday in which case it shall expire at noon on the preceding business day.
Quiet Enjoyment: 23. Owner covenants and agrees with Tenant that upon Tenant
paying the rent and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to, Article 31 hereof and to the ground leases, underlying leases and
mortgages hereinbefore mentioned.
Failure to Give Possession: 24. If Owner is unable to give possession of the
demised premises on the date of the commencement of the term hereof, because of
the holding-over or retention of possession of any tenant, undertenant or
occupants or if the demised premises are located in a building being
constructed, because such building has not been sufficiently completed to make
the premises ready for occupancy or because of the fact that a certificate of
occupancy has not been procured or for any other reason, Owner shall not 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 extend the term of this lease, but the rent
payable hereunder shall be abated (provided Tenant is not responsible for
Owner's inability to obtain possession) until after Owner shall have given
Tenant written notice that the premises are substantially ready for Tenant's
occupancy. If permission is given to Tenant to enter into the possession of
the demised premises or to occupy premises other than the demised premises
prior to the date specified as the commencement of the term of this lease,
Tenant covenants and agrees that such occupancy shall be deemed to be under
all the terms, covenants, conditions and provisions of this lease, except as
to the covenant to pay rent. The provisions of this article are intended to
constitute "an express provision to the contrary" within the meaning of
Section 233-a of the New York Real Property Law. Landlord represents the
demised premises are vacant.
No Waiver: 25. The failure of Owner to seek redress for violation of, or to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation.
The receipt by Owner of rent with knowledge of the breach of any covenant of
this lease shall not be deemed a waiver of such breach and no provision of
this lease shall be deemed to have been waived by Owner unless such waiver
be in writing signed by Owner. No payment by Tenant or receipt by Owner of
a lesser amount than the monthly rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any
endorsement or statement of any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and Owner may
accept such check or payment without prejudice to Owner's right to recover
the balance of such rent or pursue any other remedy in this lease provided.
No act or thing done by Owner or Owner's agents during the term hereby
demised shall be deemed an acceptance of a surrender of said premises;
and no agreement to accept such surrender shall be valid unless in
writing signed by Owner. No employee of Owner or Owner's agent shall
have 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: 26. It is mutually agreed by and between Owner and
Tenant that the respective parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or ____ counterclaim brought by either of the
parties hereto against the other (except for personal injury or property damage)
on any matters whatsoever arising out of or in any way connected with this
lease, the relationship of Owner and Tenant, Tenant's use of or occupancy of
said premises, and any emergency statutory or any other statutory remedy. It is
further mutually agreed that in the event Owner commences any summary proceeding
for possession of the premises, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding including a counterclaim
under Article 4.
Inability to Perform: 27. This Lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements hereunder on
part of Tenant to be performed shall in no wise be affected, impaired or excused
because Owner is unable to fulfill any of its obligations under this lease or to
supply 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 Owner is prevented or delayed from doing so by reason
of strike or labor troubles or any cause whatsoever 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
which have been or are affected by war or other emergency.
Bills and Notices: 28. Except as otherwise in this lease provided, a bill,
statement, notice or communication which Owner 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 Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.
Services Provided by Owners. 29. Owners shall provide: (a) necessary elevator
facilities on business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m.
to 12 p.m. and have one elevator subject to call at all other times; (b) heat to
the demised premises when and as required by law, on business days from 8 a.m.
to 6 p.m. and on Saturdays from 8 a.m. to 12 p.m.; (c) water for ordinary
lavatory purposes, but if Tenant uses or consumes water for any other purposes
or in unusual quantities (of which fact Owner shall be the sole judge), Owner
may install a water meter at Tenant's expense which Tenant shall thereafter
maintain at Tenant's expense in good working order and repair to register such
water consumption and Tenant shall pay for water consumed as shown on said meter
as additional rent as and when bills are rendered; (d) cleaning service for the
demised premises on business days at Owner's expense provided that the same are
kept in order by Tenant. If, however, said premises are to be kept clean by
Tenant, it shall be done at Tenant's sole expense, in a manner satisfactory to
Owner and no one other than persons approved by Owner shall be permitted to
enter said premises or the building of which they are a part of such purpose.
Tenant shall pay Owner the cost of removal of any of Tenant's refuse and rubbish
from the building; (e) air conditioning/cooling will be furnished to tenant from
May 15th through September 30th on business days (Mondays through Fridays,
holidays excepted) from 8:00 a.m. to 6:00 p.m. and on Saturday from 8:00 a.m. to
12:00 p.m. and ventilation will be furnished on business days during the
aforesaid hours except when air conditioning/cooling is being furnished as
aforesaid. If Tenant requires air conditioning/cooling or ventilation for more
extended hours or on Saturdays, Sundays or on holidays, as defined under Owner's
Contract with Operating Engineers Local 94-94A, Owner will furnish the same at
Tenant's expense. Rider to be added in respect to rates and conditions for such
additional service. (f) Owner reserves the right to stop services of the
heating, elevators, plumbing, air-conditioning, power systems or cleaning or
other services, if any, when necessary by reason of accident or for repairs,
alterations, replacements or improvements necessary or desirable in the judgment
of Owner for as long as may be reasonably required by reason thereof. If the
building of which the demised premises are a part supplies manually-operated
elevator service, Owner at any time may substitute automatic-control elevator
service and upon ten days' written notice to Tenant, proceed with alterations
necessary therefor without in any wise affecting this lease or the obligation of
Tenant hereunder. The same shall be done with a minimum of inconvenience to
Tenant and Owner shall pursue the alteration with due diligence.
Captions: 30. 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: 31. The term "office", or "offices", wherever used in this lease,
shall not be construed to mean premises used as a store or stores, for the sale
or display, at any time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or for other
similar purposes or for manufacturing. The term "Owner" means a landlord or
lessor, and 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 Owner shall be and hereby is entirely freed and relieved of
all covenants and obligations of Owner 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 has assumed and agreed to carry out any and all
covenants and obligations of Owner, hereunder. The words "re-enter" and
"re-entry" as used in this lease are not restricted to their technical legal
meaning. The term "business days" are used in this lease, shall exclude
Saturdays (except such portion thereof as is covered by specific hours in
Article 29 hereof), Sundays and all days observed by the State or Federal
Government as legal holidays and 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.
<PAGE>
Adjacent Excavation-Shoring: 32. If an excavation shall be made upon land
adjacent to the demised premises, or shall be authorized to be made, Tenant
shall afford to the person causing or authorized to cause such excavation,
license to enter upon the demised premises for the purpose of doing such work as
said person shall deem necessary to preserve the wall or the building of which
demised premises form a part from injury or damage and to support the same by
proper foundations without any claim for damages or indemnity against Owner, or
diminution or abatement of rent.
Rules and Regulations: 33. Tenant and Tenant's servants, employees, agents,
visitors, and licensees shall observe faithfully, and comply strictly with, the
Rules and Regulations and such other and further reasonable Rules and
Regulations as Owner or Owner's agents may from time to time adopt. Notice
of any additional rules or regulations shall be given in such manner as Owner
may elect. In case Tenant disputes the reasonableness of any additional Rule
or Regulation hereafter made or adopted by Owner or Owner's agents, the parties
hereto agree to submit the question of the reasonableness of such Rule or
Regulation for decision to the New York office of the American Arbitration
Association, whose determination shall be final and conclusive upon the parties
hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Owner within ten (10) days
after the giving of notice thereof. Nothing in this lease contained shall be
construed to impose upon Owner any duty or obligation to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against any
other tenant and Owner shall not be liable to Tenant for violation of the same
by any other tenant, its servants, employees, agents, visitors or licensees.
Security: 34. Tenant has deposited with Owner the sum of $21,081.32 as security
for the faithful performance and observance by Tenant of the terms, provisions
and conditions of this lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease, including,
but not limited to, the payment of rent and additional rent. The security
deposit shall be kept in a separate account and not co-mingled with Landlord's
general funds. Owner may use, apply or retain the whole or any part of the
security so deposited to the extent required for the payment of any rent and
additional rent or any other sum as to which Tenant is in default or for any sum
which Owner may expend or may be required to expend by reason of Tenant's
default in respect of any of the terms, covenants and conditions of this lease,
including but not limited to, any damages or deficiency in the reletting of the
premises, whether such damages or deficiency accrued before or after summary
proceedings or other re-entry by Owner. In the event that Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions of
this lease, the security shall be returned to Tenant after the date fixed as the
end of the Lease and after delivery of entire possession of the demised premises
to Owner. In the event of a sale of the land and building or leasing of the
building, of which the demised premises form a part, Owner shall have the right
to transfer the security to the vendee or lessee and Owner shall thereupon be
released by Tenant from all liability for the return of such security; and
Tenant agrees to look to the new Owner solely for the return of said security,
and it is agreed that the provisions hereof shall apply to every transfer or
assignment made of the security to a new Owner. Tenant further covenants that
it will not assign or encumber or attempt to assign or encumber the monies
deposited herein as security and that neither Owner nor its successors or
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.
Estoppel Certificate: 35. Tenant, at any time, and from time to time, upon at
least 10 days' prior notice by Owner, shall execute, acknowledge and deliver to
Owner, and/or to any other person, firm or corporation specified by Owner, a
statement certifying that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that the same is in full force
and effect as modified and stating the modifications), stating the dates to
which the rent and additional rent have been paid, and stating whether or not
there exists any default by Owner under this Lease, and, if so, specifying
each such default. Landlord shall furnish similar statements to Tenant upon
request.
Successors and Assigns: 36. The covenants, conditions and agreements contained
in this lease shall bind and inure to the benefit of Owner and Tenant and their
respective heirs, distributees, executors, administrators, successors, and
except as otherwise provided in this lease, their assigns.
In Witness Whereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.
Witness for Owner: THE TOWERS (CORP. SEAL)
-------------------------------------------
[ILLEGIBLE] [L.S.]
- ------------------------ -------------------------------------------
Witness for Tenant: GKN SECURITIES CORP. (CORP. SEAL)
-------------------------------------------
[ILLEGIBLE] [L.S.]
- ------------------------ -------------------------------------------
ACKNOWLEDGMENTS
CORPORATE OWNER
STATE OF NEW YORK, ss.:
County of
On this ____ day of _____________________, 19__, before me personally came
_______________________________________ to me known, who bring by me duly sworn,
did depose and say that he resides
in
that he is the ___________________ of ____________________
the corporation described in and which executed the foregoing instrument, as
OWNER; that he knows the seal of said corporation; that the seal of affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
---------------------------------------
INDIVIDUAL OWNER
STATE OF NEW YORK ss.:
County of
On this ____ day of _____________________, 19__, before me personally came
_______________________________________ to me known and known to me to be the
individual ______________________ described in and who, as OWNER, executed the
foregoing instrument and acknowledged to me that ______________________________
he executed the same.
---------------------------------------
CORPORATE TENANT
STATE OF NEW YORK, ss.:
County of
On this ____ day of _____________________, 19__, before me personally came
_______________________________________ to me known, who bring by me duly sworn,
did depose and say that he resides
in
that he is the ___________________ of ____________________
the corporation described in and which executed the foregoing instrument, as
TENANT; that he knows the seal of said corporation; that the seal of affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
---------------------------------------
INDIVIDUAL TENANT
STATE OF NEW YORK ss.:
County of
On this ____ day of _____________________, 19__, before me personally came
_______________________________________ to me known and known to me to be the
individual ______________________ described in and who, as TENANT, executed the
foregoing instrument and acknowledged to me that ______________________________
he executed the same.
---------------------------------------
<PAGE>
GUARANTY
FOR VALUE RECEIVED, and in consideration for, and as an inducement to Owner
making the within lease with Tenant, the undersigned guarantees to Owner,
Owner's successors and assigns, the full performance and observance of all the
covenants, conditions and agreements, therein provided to be performed and
observed by Tenant, including the "Rules and Regulations" as therein provided,
without requiring any notice of non-payment, non-performance, or non-observance,
or proof of, or notice, or demand, whereby to charge the undersigned therefor,
all of which the undersigned hereby expressly waives and expressly agrees that
the validity of this agreement and the obligations of the guarantor hereunder
shall in no wise be terminated, affected or impaired by reason of the assertion
by Owner against Tenant of any of the rights or remedies to Owner pursuant to
the provisions of the within lease. The undersigned further covenants and agrees
that this guaranty shall remain and continue in full force and effect as to any
renewal, modification or extension of this lease and during any period when
Tenant is occupying the premises as a "statutory tenant." As a further
inducement to Owner to make this lease and in consideration thereof, Owner and
the undersigned covenant and agree that in any action or proceeding brought by
either Owner or the undersigned against the other on any matters whatsoever
arising out of, under, or by virtue of the terms of this lease or of this
guaranty that Owner and the undersigned shall and do hereby waive trial by jury.
Dated New York City __________________________________________________ 19__
WITNESS:
- --------------------------------------------------------------------------------
STATE OF NEW YORK, ) ss.:
County of )
On this __________ day of __________________, 19__ before me personally
came _________________________________, to me known and known to me to be the
individual described in, and who executed the foregoing Guaranty and
acknowledged to me that he executed the same.
---------------------------------
Notary
__________________________________________________________________________[L.S.]
Residence ______________________________________________________________________
Business Address________________________________________________________________
Firm Name_______________________________________________________________________
Address
Premises
================================================================================
TO
================================================================================
STANDARD FORM OF
(SEAL) OFFICE (SEAL)
LEASE
The Real Estate Board of New York, Inc.
(C) Copyright 1993. All rights Reserved.
Reproduction in whole or in part prohibited.
================================================================================
Dated 19
Rent Per Year
Rent Per Month
Term
From
To
Drawn by_____________________________________________________________________
Checked by___________________________________________________________________
Entered by___________________________________________________________________
Approved by__________________________________________________________________
================================================================================
<PAGE>
RIDER TO LEASE DATED JUNE 25, 1993
BETWEEN THE TOWERS, as OWNER, AND
GKN SECURITIES CORP., AS TENANT
ARTICLE 37
APPLICATION OF THIS RIDER
A. Rider Provisions Paramount. If and to the extent that any of the
provisions of this Rider conflict or are otherwise inconsistent with any of the
preceding printed provisions of this Lease, or of the Rules and Regulations
attached to this Lease, whether or not such inconsistency is expressly noted in
this Rider, the provisions of this Rider shall prevail, and in case of
inconsistency with said Rules and regulations, shall be deemed a waiver of such
Rules and Regulations with respect to Tenant to the extent of such
inconsistency.
B. Additional Definitions. For the purposes of this Lease and all
agreements supplemental to this Lease, and all communications with respect
thereto, unless the context otherwise requires:
(1) The term "fixed rent" shall mean rent at the annual rental rate or
rates provided for in the granting clause appearing at the beginning of
this Lease.
(2) The term "additional rent" shall mean all sums of money, other
than fixed rent, as shall become due and payable form Tenant to Owner
hereunder, and Owner shall have the same remedies therefor as for a default
in payment of fixed rent.
(3) The term "rents" shall mean fixed rent and additional rent
hereunder.
(4) The terms "Commencement Date" and "Expiration Date" shall mean the
dates fixed in this Lease, or to be determined pursuant to the provisions
of this Lease, respectively, as the beginning and the end of the term for
which the Demised Premises are hereby leased.
(5) Tenant's obligations hereunder shall be construed in every
instance as conditions as well as covenants.
(6) The term "Tenant" shall mean Tenant herein named or any assignee
or other successor in interest (immediate or remote) of Tenant herein
named, when Tenant herein named or such assignee or other successor in
interest, as the case may be, is in possession of the Demised Premises as
Owners of the Tenant's estate and interest granted by this Lease, and also,
if Tenant is not an individual or corporation, all of the individuals,
firms and/or corporations or other entities comprising Tenant.
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(8) All references in this Lease to numbered Articles and lettered
Exhibits are references to Articles of this Lease and Exhibits annexed to
(and thereby made part of) this Lease, as the case may be, unless expressly
otherwise designated in the context.
(9) The term "Land" shall mean that certain parcel of land located at
111 Great Neck Road, Great Neck, County of Nassau, State of New York, and
the term "Building" shall mean the office building erected or to be erected
on the Land by Owner.
C. Modifications of Certain Preceding Printed Articles.
(1) Supplementing the provisions of Articles 2 & 15 and notwithstanding any
provision of this Lease to the contrary: Tenant shall not use the Demised
Premises or any part thereof for any unlawful business, use or purpose nor any
business, use or purpose deemed disreputable or extra-hazardous nor for any
purpose in any manner which is in violation of any present or future
governmental laws, rules or regulations or which is inconsistent with the
purposes or functions of a first-class office building. Tenant shall not use or
occupy the Demised Premises in violation of the Certificate of Occupancy issued
for the Building. Tenant shall not use or occupy the Demised Premises or do or
permit anything to be done thereon in any manner which shall make it impossible
for Owner to carry any insurance required by this Lease or any prior Lease or
which will invalidate or increase the cost of such insurance to Owner, or which
will cause structural injury to the Building, or which would constitute a public
or private nuisance, or which will violate any present or future ordinary or
extraordinary, foreseen or unforeseen, laws, regulations, ordinances or
requirements of the Federal, State or local governments, or of any department,
subdivision, bureaus, or offices thereof, or any other governmental public or
quasi-public authorities now existing or hereafter created having jurisdiction
over Owner, and/or the Demised Premises. Landlord represents that the
Certificate of Occupancy for the Building permits the use set forth in Article 2
hereof,
(2) Supplementing Article 3:
(a) Tenant, at its expense, shall cause any permitted alterations,
decorations, installations,
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additions, or improvements in or about the Demised Premises referred to in
Article 3 (herein called "Tenant's Changes"), to be performed in compliance
with all applicable requirements of insurance bodies having jurisdiction,
and in such manner as not to interfere with, delay, or impose any
additional expenses upon Owner in the construction , maintenance or
operation of the Building. Tenant at its expense, and with diligence and
dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with Tenant's Changes which
shall be issued by the Department of Buildings or any other public
authority having or asserting jurisdiction.
(b) Owner may require submission to it of plans and specifications for
any proposed Tenant's Change and in granting its consent to any Tenant's
Change may impose such (in addition to those expressly provided in this
Lease) as to guaranty of completion and payment and of restoration and
otherwise as Owner may reasonably consider desirable. In no event shall
Owner be required to consent to any Tenant's Change which would physically
affect any part of the Building outside of the Demised Premises or would
adversly affect the proper functioning of any of the mechanical, sanitary
or other service systems of the Building.
(c) Notwithstanding the provisions of Article 3: Tenant shall not be
required to restore the Demised Premises to their condition prior to the
making of any Tenant's Change except if and to the extent that such
restoration is made an express condition of Owner's consent to such
Tenant's Change; and all counters, screens, grilles, railing, movable
partitions, lighting fixtures, special cabinet work, machines and equipment
which are installed in the Demised Premises by or for the account of
Tenant, without expense to Owner, and can be removed without permanent
structural damage to or defacement of the Building, and all furniture,
furnishings and other articles of personal property owned by Tenant and
located in the Demised Premises (all of which are herein called "Tenant's
Property") shall be and remain the property of Tenant and may be removed by
it at any time during the term of this Lease. However, if any of Tenant's
Property is removed, Tenant shall repair or pay the cost of repairing any
damage to the Building resulting from such removal. Any fixtures, equipment
or other property for which Owner shall have granted any allowance to
Tenant as a credit or substitution in kind shall not be deemed to have been
installed by or for the account of Tenant, without expense to Owner, and
shall not be considered Tenant's Property. Any items of Tenant's Property
(except money, securities, and other like valuables) which shall remain in
the Demised Premises after Tenant surrenders the Demised Premises may, at
the option of Owner, be deemed to have been abandoned as its property or
may be disposed of, without accountability, in such manner as Owner may see
fit. Landlord hereby consents to the Tenant's Changes planned by Tenant in
connection with its occupancy of the Demised Premises. Landlord agrees that
Landlord's consent shall not be required for non-structural alterations to
be made by Tenant.
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(3) Supplementing Article 4:
Tenant shall make all non-structural repairs to the Demised Premises and
the fixtures and appurtenances therein as may be required by reason of the
making of Tenant's Changes in the Demised Premises by Tenant, the existence
thereof, or the use or operation of Tenant's Property in the Demised Premises.
Except if required by the neglect or other fault of Owner, Tenant at its
expense, shall replace all broken doors or other glass in the Demised Premises
and shall be responsible for all maintenance and repair of lighting fixtures and
wall and floor coverings in the Demised Premises.
(4) Supplementing Article 9:
Owner may obtain rent insurance against loss of rent due to the occurrence
of fire or other casualty described in Article 9 (a) for the full rental value
of the Demised Premises and the Building in an amount sufficient to prevent
Owner from becoming a co-insurer under such rental value policy, or, in any
event, in an amount not less than the aggregate amount of fixed rent and, at
Owner's sole option, the aggregate amount of additional rent or any portion
thereof herein provided to be paid by Tenant and all other Tenants of the Land
and Building.
Tenant will reimburse to Owner its pro rata share of the cost of the
insurance premium for said policy or policies no later than five (5) days
subsequent to receipt of written notice from Owner of the charge for the
insurance premium for the aforesaid policy or policies. Such change shall be
deemed additional rent under this Lease. Notwithstanding anything contained
herein to the contrary, in no event shall the charge to Tenant exceed $100 per
year.
(5) Supplementing Article 29:
(a) Owner shall have free and unrestricted access to all HVAC
equipment located in or access to all HVAC equipment located in or
accessible through the Demised Premises.
(b) The Building's HVAC system shall be capable of providing and
maintaining heat and air-conditioning within the Demised Premises the
following design criteria:
Inside Condition Outside Condition*
-------------------- --------------------
Heating Season 68(Degree)F dry bulb 10(Degree)F dry bulb
Cooling Season 75(Degree)F dry bulb 91(Degree)F dry bulb
*with 15 m.p.h. wind velocity
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Temperature Standards as outlined above are subject to those revisions
mandated by Federal, State, or Local ordinances.
(c) In keeping the Demised Premises clean, Owner shall provide
cleaning services (including window cleaning) equal in scope, character and
standards to cleaning services than generally provided by Owners to office
Tenants of comparable first-class office buildings in Nassau County. Such
cleaning services in accordance with such standards currently in effect are
described in Exhibit "C". Tenant agrees that it shall not without Owner's
prior written consent permit any person, firm or corporation to perform any
cleaning, maintenance, or related services in the Demised Premises other
than the person, firm or corporation authorized by the Owner to perform
such services in the Building containing the Demised Premises.
(6) If Tenant shall fail to pay any installment of fixed rent or any
amount of additional rent for more than ten (10) days after ten notice,
Tenant shall pay Owner a late charge of two (2) cents for each dollar of
the amount of such fixed rent or additional rent as shall not have been
paid to Owner within five (5) days after becoming due and payable. Such
late charge shall be without prejudice to any of Owner's rights and
remedies hereunder or at law for non-payment or late payment of rent and
shall be in addition thereto.
(7) In every case in which Tenant is required, by the terms of this
Lease, to pay the Owner a sum of money and payment is not made within ten
(10) days written notice after written notice such sum of money shall
become due, unless expressly otherwise provided in this Lease, interest
shall be payable on such sum or so much thereof as shall be unpaid from the
date it becomes due until it is paid. Such interest shall be at the highest
rate of interest than required to be paid on judgments for sums of money
recovered in actions in the Supreme Court of the State of New York (the
"legal rate"). Any late charges paid pursuant to subparagraph (6) above
shall be setoff against interest accrued hereunder for the same late
payment but not in excess of the amount of such accrued interest.
(8) Supplementing article 22 if the premises are not surrendered at
the end of the Term, Tenant shall indemnify Owner against loss or liability
resulting from delay by Tenant in so surrendering the Demised Premises,
including, without limitation, any claims made by any succeeding Tenant
founded on such delay, and Tenant shall pay to the Owner for use and
occupancy of the Premises an amount equal to the last Basic Annual Rent
specified herein plus all Additional Rent reserved herein for the period
during which Tenant so remains in possession.
ARTICLE 38
ELECTRICITY
A. Subject to the provisions of subparagraph E below, Owner shall furnish
the electric energy that Tenant shall reasonably require for ordinary office use
in the Demised Premises on a "rent inclusion" basis. That is, the fixed rent set
forth at the beginning of this Lease includes as a part
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thereof a sum attributable solely to electric energy. There shall be no charge
to Tenant for such electric energy by way of measuring the same on any meter or
otherwise, such electric energy being included in Owner's services which are
covered by the fixed rent reserved hereunder. Owner shall not be liable in any
way to Tenant for any failure or defect in the supply or character of electric
energy furnished to the Demised Premises by reason of any requirement, act or
omission of the public utility serving the Building with electricity or for any
other reason not attributable to Owner. Tenant shall furnish and install all
replacement lighting tubes, lamps, bulbs and ballasts required in the Demised
Premises, at Tenant's expense, or shall pay Owner's reasonable charges therefor
on demand.
B. Tenant covenants and agrees that at no time shall its use of electric
energy in the Demised Premises exceed a connected load of four (4) watts per
square foot. In order to insure that such capacity is not exceeded and to avoid
possible adverse effect upon the Building's electric service, Tenant shall not,
without Owner's prior written consent in each instance (which shall not be
unreasonably withheld or delayed), connect any additional fixtures, appliances
or equipment (other than lamps, typewriters and other usual small business
office machines having electric current requirements similar to electric
typewriters to the Building electric distribution system of the Demised
Premises. Should Owner grant such consent, all additional risers or other
conductors or equipment required therefor shall be provided by Owner and the
cost thereof shall be paid by Tenant upon Owner's demand. As a condition to
granting such consent, Owner may require Tenant to agree to an increase in the
fixed rent by an amount which will reflect the value to Tenant of the additional
service to be furnished by Owner, that is, the potential additional electric
energy to be made available to Tenant based upon the estimated additional
capacity of such additional risers, conductors or other equipment. If Owner and
Tenant cannot agree thereon with 10 days after such consent is granted, such
amount shall be determined by a reputable, independent electrical engineer or
consultant to be selected by Owner and Tenant and paid equally by both parties.
When the amount of such increase is so determined, the parties shall execute an
agreement supplementary hereto to reflect such increase in the amount of fixed
rent stated in this Lease and in the amount set forth in Part E of this Article,
effective from the date such additional service is made available to Tenant; but
such increase shall be effective from such date even if such supplementary
agreement is not executed. Notwithstanding anything contained herein to the
contrary, Landlord consents to the installation and use of Tenant's standard
business machinery, including, without limitation, computers, word processing
equipment, quotrons, photocopying machines, etc. Landlord represents to Tenant
that the electric energy serving the demised premises is sufficient to operate
Tenant's machinery and equipment.
C. If at any time or times after the date of this Lease the rates at which
Owner purchases electricity from the public utility serving the Building shall
be increased (including, but not limited to, increase by reason of fuel
adjustment), or any charges or taxes shall be imposed upon Owner in connection
therewith or shall be increased, the fixed rent reserved hereunder shall be
increased in an annual cost to Owner of furnishing electricity to Tenant under
the provisions of this Article. Tenant shall pay the increase to Owner within
ten (10) days after written demand therefor by Owner. At Owner's option, such
amount may be determined by an independent electrical engineer or consultant
selected by Owner and Tenant and paid equally by both parties, whose
determination shall be conclusive. The parties shall execute an agreement
supplementary to this Lease, to reflect such increase in the amount of fixed
rent reserved under this Lease and in the amount stated in Part E below from the
date of the above-mentioned demand; but such adjustments shall be
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effective from the effective date of the change in rates or imposition of or
change in charges or taxes, as the case may be, whether or not such
supplementary agreement is executed.
D. At any time or times after the date of this Lease, Owner may cause a
survey and inspection of the Demised Premises and Tenant's equipment and
installations therein, to make a determination of the value of the electrical
service furnished to the Tenant. If such inspection and survey shows that the
fixed rent than reserved hereunder does not fairly reflect the cost of
electrical service to the Tenant, such fixed rent shall be increased/decreased
by an amount reflecting the cost of such service to the Tenant. Any such survey
and inspection shall be made by an independent electrical engineer or consultant
to be selected by Owner and Tenant and paid equally by both parties, who shall
determine the amount of such increase. Following such determination Owner and
Tenant shall execute an agreement supplementary to this Lease to reflect such
increase in the amount of the fixed rent than reserved under this Lease and in
the amount set forth in Part E below effective from the date of such inspection
and survey; but such adjustments shall be effective from such date whether or
not such a supplementary agreement is executed. All valuations of the electrical
service to the Demised Premises to be made pursuant to this Article shall be
based upon the current public utility rates applicable to Owner for purchase of
the electricity then to be used in the Demised Premises without regard to the
electricity to be used in the rest of the Building.
E. Owner reserves the right to discontinue furnishing electricity to Tenant
in the Demised Premises on not less than 60 days' notice to Tenant or upon such
shorter notice as may be required by the public utility serving the Building. If
Owner exercises such right to discontinue, or is compelled to discontinue,
furnishing electricity to Tenant, this Lease shall continue in full force and
effect and shall be unaffected thereby, except only that, from and after the
effective date of such discontinuance, Owner shall not be obligated to furnish
electricity to Tenant and the fixed rent payable under this Lease shall be
reduced by the amount then included for the cost of electricity pursuant to this
article. If Owner so discontinues furnishing electricity to Tenant, Tenant shall
arrange to obtain electricity directly from the public utility serving the
Building. Such electricity may be furnished to Tenant by means of the then
existing building system feeders, risers and wiring to the extent that the same
are available, suitable and safe for such purposes. All meters and all
additional panel boards, feeders, risers, wiring and other conductors and
equipment which may be required to obtain electricity of substantially the same
quantity, quality and character, directly from such public utility shall be
installed by Owner, at Owner's expense, if Owner shall have discontinued
furnishing electricity to Tenant voluntarily or shall have been compelled to do
so by reason of any act or omission of Owner in violation of any law or any rule
or regulation of the public utility; or at Tenant's expense, if Owner shall have
been compelled to discontinue furnishing electricity to Tenant by reason of any
act or omission of Tenant in violation of any law or any rule or regulation of
the public utility; or at the equal expense of Owner and Tenant, if such
discontinuance shall have been by compulsion of law or of any rule or regulation
of the public utility and not by reason of any act or omission of Owner or
Tenant in violation of any law or any rule or regulation of the utility.
Landlord cannot discontinue furnishing electricity until Tenant has obtained
electricity directly from the public utility serving the Building.
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ARTICLE 39
NOTICE TO SUPERIOR LESSORS AND MORTGAGEES
In connection with the procurement, continuation or renewal of any
financing for which the Land and/or the Building or the interest of the lessee
therein under a superior Lease represents collateral in whole or in part, an
institutional lender shall request reasonable modifications of this Lease as a
condition of such financing, Tenant will not withhold its consent thereto
provided that such modifications do not increase the obligations of Tenant under
this Lease or affect or decrease any rights of Tenant under this Lease. Any
change which increases the rents of costs payable by Tenant shall be deemed to
materially affect Tenant's rights under this Lease.
ARTICLE 40
ESTOPPEL CERTIFICATE, MEMORANDUM
A. Each party shall, at any time and from time to time, at the request of
the other party, upon not less than five (5) days' notice, if given in person,
or ten (10) days' notice, if given by mail, execute and deliver to the other 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 and effect
as modified and stating the modifications), certifying the dates to which the
fixed rent and additional rent have been paid, and stating whether or not, to
the best knowledge of the signer, the other party is in default in performance
of any of its obligations under this Lease, and, if so, specifying each such
default of which the signer may have knowledge, it being intended that any such
statement delivered pursuant hereto may be relied upon by others with whom the
party requesting such certificate may be dealing.
B. At the request of either party, Owner and Tenant shall promptly execute,
acknowledge and deliver a memorandum with respect to this Lease sufficient for
recording. Such memorandum shall not in any circumstance be deemed to change or
otherwise affect any of the obligations or provisions of this Lease. The parties
agree that this Lease shall not be recorded. The Tenant agrees that Tenant shall
not record this Lease.
ARTICLE 41
INDEMNIFICATION AND LIABILITY OF OWNER
A. Tenant shall indemnify and save harmless Owner and its agents against
and from (a) any and all claims (i) arising from (x) the conduct of business in
or management (other than by Owner) of the Demised Premises or (y) any work or
thing whatsoever done, or any condition created (other than by Owner) in or
about the Demised Premises during the term of this Lease or during the period of
time, if any, prior to the Commencement Date that Tenant may have been given
access to the Demised Premises pursuant to this Lease, or (ii) arising from any
negligent or otherwise wrongful act or omission of Tenant or any of its
[UNINTELLIGABLE] or contractors, and (b) all costs, expenses and liabilities
incurred in or in connection with each such claim or action or
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proceeding brought thereon. In case any action or proceeding be brought against
Owner by reason of any such claim, Tenant, upon notice from Owner, shall resist
and defend such action or proceeding by counsel chosen by Tenant who shall be
reasonably satisfactory to Owner. Tenant or its counsel shall keep Owner fully
apprised at all times of the status of such defense. Counsel for Tenant's
insurer shall be deemed satisfactory to Owner.
B. Tenant shall look only to Owner's Fee interest in the Land and Building
(or the proceeds thereof) for the satisfaction of Tenant's remedies for the
collection of any judgment (or other judicial process) requiring the payment of
money by Owner in the event of any default by Owner under this Lease, and no
other property or other assets of Owner shall be subject to levy, execution or
other enforcement, procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease, the relationship of Owner and Tenant hereunder or
Tenant's use and occupancy of the Demised Premises.
ARTICLE 42
ESCALATION FOR INCREASES IN REAL ESTATE TAXES
A. The terms defined below shall for the purposes of this Lease have the
meanings herein specified:
(1) "Taxes" shall mean all real estate taxes and assessments, special
or otherwise levied, assessed or imposed by the Town of Hempstead, County
of Nassau, all school and water districts, and all other taxing authorities
upon or with respect to the land on which the Building is erected (the
"Land") and the Building. Penalties and interest on Taxes, and income,
franchise, transfer, inheritance and capital stock taxes shall be deemed
excluded from the term Taxes for the purposes hereof. However, if and to
the extent that, due to a change in the method of assessment or taxation,
any franchise, capital stock, capital rents, income, profits or other tax
or charge shall be substituted for the Taxes now or hereafter imposed upon
said Land and the Building, such franchise, capital stock, capital rents,
income, profits or other tax or charge, computed as if Owner owned or
operated no property other than said Land and the Building, shall be deemed
included in the term Taxes for the purposes hereof.
(2) "Tax Year" shall mean a fiscal or calendar year for which Taxes
shall be imposed and falling partly or wholly within the term of this
Lease.
(3) "Base Tax" shall mean the Taxes for the period October 1, 1993
through September 30, 1994.
(4) "Tenant's Proportionate Share" shall be deemed to be 3.478%.
B. If the Taxes at any time during the term of this Lease shall be greater
than the Base Tax, whether by reason of an increase in the tax rate or in the
assessed valuation, Tenant shall pay as additional rent for such Tax Year a sum
equal to Tenant's Proportionate Share of the amount by which the Taxes for such
Tax Year are greater than the Base tax (which amount is
Base year for taxes is October 1, 1993 through September 30, 1994.
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hereinafter called the "Tax Payment"). "Should this Lease terminate prior to the
expiration of a Tax Year, such Tax Payment shall be prorated to, and shall be
payable on, or as and when ascertained after the Expiration Date." Tenant's
obligation to pay such additional rent and Owner's obligation to refund pursuant
to Part C below, as the case may be, shall survive the termination of this
Lease. If the Taxes for any Tax Year, or an installment thereof, shall be
reduced before such Taxes, or such installment, shall be paid, the amount of
Owner's reasonable costs and expenses of obtaining such reduction (but not
exceeding the amount of such reduction) shall be added to and be deemed part of
the Taxes for such Tax Year. Payment of additional rent for any Tax Payment due
from Tenant shall be made as and subject to the conditions hereinafter provided
in this Article.
C. Owner shall be under no obligation to contest the Taxes or the assessed
valuation of the Land and the Building for any Tax Year or to refrain from
contesting the same, and may settle any such contest on such terms as Owner in
its sole judgment considers proper. If Owner shall receive a refund for any Tax
Year for which a tax Payment shall have been made by Tenant pursuant to Part B
above, Owner shall repay to Tenant, with reasonable promptness, Tenant's
Proportionate Share of such refund and of any interest received thereon after
deducting from such refund and interest the reasonable costs and expenses
(including experts' and attorneys' fees) of obtaining such refund. If the
assessment to the Base Tax Year shall be reduced from the amount originally
imposed after Owner shall have rendered a comparative originally imposed after
Owner shall have rendered a comparative statement (as provided in Part D below)
to Tenant with respect to a Tax Year, the amount of the Tax Payment shall not be
adjusted in accordance with such change and Tenant, on Owner's demand, shall pay
any increase in additional rent resulting from such adjustment.
D. At any time during a tax Year after the Taxes for such Tax Year become
known Owner may, or else with reasonable promptness after the end of each Tax
Year Owner shall, render to Tenant a comparative statement showing the amount of
the Base Tax, the amount of the Taxes for such Tax Year and the Tax Payment, if
any, due from Tenant for such Tax Year, indicating thereon in reasonable detail
the computation of such Tax Payment. The Tax Payment shown on such comparative
statement may, be payable in semi-annual installments. Tenant shall pay the
amount of the Tax Payment shown on such comparative statement (or the balance or
a proportionate installment thereon, if only a installment is involved)
concurrently with the installment of fixed rent then due or next due, or if such
statement shall be rendered at or after the termination of this Lease within 30
days after such rendition. Whenever so requested, but not more often than once a
year, Owner will furnish Tenant with a reproduced copy of the bill (or receipted
bill) for the Taxes for the current or next preceding Tax Year.
E. In no event shall the fixed annual rent payable under this Lease
(exclusive of the additional rents payable under this paragraph 42) be reduced.
F. If the term of this Lease expires on a day other than the last day of a
Tax Year, rental increases pursuant to subparagraph (B) above shall be pro-rated
as of said expiration
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date. The provisions of this paragraph 42 shall survive the expiration or
termination of this Lease.
G. In the event of a taking, pursuant to the power of eminent domain, of a
portion of the Building under such circumstances as shall not result in a
termination of this Lease, then from and after the date of such taking (i) the
Base Tax Amount shall be deemed reduced in proportion to the reduction in the
number of square feet of rental space in the Building resulting from such
taking.
I. Tenant acknowledges and agrees that the Owner is or may be accorded
certain real estate tax abatement advantages pursuant to Section 485-b of the
Real Property Tax Law (1976 Law of New York, Chapter 278) or any other State and
Local Laws, and Tenant shall not derive or share in the benefit of any such real
estate tax abatement, which savings shall inure solely to the benefit of Owner.
Any such abatement shall not affect the Base Tax set forth in subparagraph A (3)
above.
J. It is agreed between the parties hereto that in addition to the items of
additional rent specified herein, the Tenant will pay all increases in taxes
which may be attributable to additions or improvements to the Demised Premises
made by the Tenant, or on the Tenant's behalf. Payments of these items of Taxes
shall be made by the Owner and reimbursed by the Tenant to the Owner no later
than fifteen (15) days prior to the date the same are due and payable to the
appropriate taxing authorities.
K. Special Assessment for Improvements. Tenant shall pay to Owner as
additional rent, within thirty (30) days after the same shall be paid by Owner,
an amount equal to 3.478% of any assessment or installment thereof for public
betterments or improvements which may be levied from the date of execution of
this Lease upon "the Land and/or Building." Owner shall take the benefit of the
provisions of any statue or ordinance permitting any such assessment to be paid
over a period of time and Tenant shall be obligated to pay only the said
percentage of the installments of any such assessments, together with interest
thereon which shall become due and paid during the term of this Lease and any
extension thereof.
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ARTICLE 44
ASSIGNMENT AND SUBLETTING
Notwithstanding the provisions of Article 11 and in modification and
amplification thereof:
A. If Tenant shall desire to assign this Lease or to sublet the Demised
Premises as a whole or in part, Tenant shall submit to Owner a written request
for Owner's consent to such assignment or subletting, which request shall
contain or be accompanied by the following information: (i) the name and address
of the proposed assignee or subtenant; (ii) a description identifying the space
to be sublet and Tenant's improvements included therein; (iii) the terms and
conditions of the proposed assignment or subletting; (iv) the nature and
character of the business of the proposed assignee or subtenant and of its
proposed use of the Demised Premises; and (v) current financial information and
any other information Owner may reasonably request with respect to the proposed
assignee or subtenant. Owner may then, by notice to such effect given to Tenant
within 30 days after receipt of Tenant's request for consent and of such further
information as Owner may reasonably request pursuant to clause (v) above,
terminate this Lease on a date to be specified in said notice (the "Termination
Date") which shall be not earlier than one day before the effective date of the
proposed assignment or subletting or later than sixty-one (61) days after said
effective date. Tenant shall then vacate and surrender the Demised Premises on
or before the Termination Date and the term of this Lease shall end on the
Termination Date as if that were the Expiration Date and Tenant shall be
released from any further liability hereunder. Owner shall be free to, and shall
have no liability to Tenant if Owner should, Lease the Demised Premises to
Tenant's prospective assignee or subtenant. Notwithstanding anything contained
herein to the contrary, Landlord shall not have the right to terminate this
Lease in the event of Tenant's subletting of a portion of the Demised Premises.
B. If Owner shall not exercise its option to terminate this Lease pursuant
to Part A above, Owner shall not unreasonably withhold or delay its consent to
the proposed assignment or subletting referred to in Tenant's notice given
pursuant to said Part A, provided that the following further conditions shall be
fulfilled.
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(1) The Demised Premises shall not have been listed or otherwise
publicly advertised for assignment or subletting, without Owner's prior
written consent at a rental rate less than the rate of fixed rent and
additional rent than payable hereunder for such space. However, this shall
not be deemed to prohibit Tenant from negotiating or consummating a
sublease at a lower rental rate, if and only if Tenant shall first have
offered to sublet the space involved to Owner for the same rents and term
by notice given with or after Tenant's request for consent to the
subletting. Owner may accept said offer within thirty (30) days from
receipt of the request for consent to the proposed subletting or twenty
(20) days after receipt of the offer, whichever is later.
(2) Tenant shall not then be in default hereunder after notice and the
expiration of any applicable grace period.
(3) In case of subletting, it shall be expressly subject to all of the
obligations of Tenant under this Lease and the further condition and
restriction that the sublease shall not be assigned, encumbered or
otherwise transferred or the subleased premises further sublet by the
sublessee in whole or in part, or any part thereof suffered or permitted by
the sublessee to be used or occupied by others, without the prior written
consent of Owner in each instance.
(4) No subletting shall end later than one day before the Expiration
Date of this Lease or shall be for a term of less than two (2) years unless
it ends not more than one (1) month before the Expiration Date.
C. Every subletting hereunder is subject to the express condition, and by
accepting a sublease hereunder each subtenant shall be conclusively deemed to
have agreed, that if this lease should be terminated prior to the Expiration
Date or if Owner shall succeed to Tenant's estate in the Demised Premises, then
at Owner's election the subtenant shall attorn to and recognize Owner as the
subtenant's Owner under the sublease and the subtenant shall promptly execute
and deliver any instruction Owner may reasonably request to evidence such
attornment.
D. Tenant shall furnish Owner with a duplicate original of each sublease or
assignment made hereunder within ten (10) days after the date of its execution.
Tenant shall remain fully liable for the performance of all of Tenant's
obligations hereunder notwithstanding any subletting provided for herein, and
without limiting the generality of the foregoing, shall remain fully responsible
and liable to Owner for all acts and omissions of any subtenant or anyone
claiming under or through any subtenant which shall be in violation of any of
the obligations of this Lease and any such violation shall be deemed to be in
violation by Tenant. Tenant shall pay Owner on demand any expense which Owner
may reasonably be required to incur in acting upon any request for consent to
assignment or subletting pursuant to this Article not to exceed $500 in the
aggregate.
E. Notwithstanding any assignment and assumption by the assignee of the
obligations of Tenant hereunder, Tenant herein named shall remain liable jointly
and severally (as a primary obligor) with its assignee and all subsequent
assignees for the performance of Tenant's obligations hereunder, and without
limiting the generality of the foregoing, shall remain fully and directly
responsible and liable to Owner for all acts and omissions on the part of any
assignee subsequent to it in violation of any of the obligations of this Lease.
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F. Notwithstanding anything to the contrary hereinabove set forth, no
assignment of this Lease shall be binding upon Owner unless the assignee shall
execute and deliver to Owner an agreement, in recordable form, whereby such
assignee agrees unconditionally to be personally bound by and to perform all of
the obligations of Tenant hereunder and further expressly agrees that
notwithstanding such assignment the provisions of this Article shall continue to
be binding upon such assignee with respect to all future assignments and
transfers. A failure or refusal of such assignee to execute or deliver such an
agreement in recordable form shall no release the assignee from its liability
for the obligations of Tenant hereunder assumed by acceptance of the assignment
of this Lease.
ARTICLE 45
INSURANCE
A. Tenant shall provide and keep in full force for the benefit of Owner and
Tenant jointly and severally comprehensive general public liability policies in
insurance companies licensed to do business in New York State and in standard
form, protecting Owner and Tenant jointly and severally, such public liability
to be in the amount of not less than a combined single limit of One Million
($1,000,000) Dollars in respect to injury to one or more than one person arising
out of any one accident or disaster and with respect to property damage. Such
general liability insurance shall cover the entire Demised Premises. Tenant
shall deliver certificates of such insurance to Owner at the beginning of the
term of this Lease and thereafter, not less than fifteen (15) days prior to the
expiration of any such policies.
B. Tenant shall also maintain at its own cost and expense and as additional
rent vandalism and malicious mishief insurance, if available, and sprinkler
leakage insurance in an amount sufficient for the Demised Premises.
C. In the event that Tenant shall fail promptly to furnish any insurance
herein required, Owner may effect the same and pay the premium therefor for a
period not exceeding one (1) year, and the premium so paid by Owner shall be
payable by Tenant as additional rent on demand.
D. All insurance provided by Tenant as required of Tenant by this Article
45 shall be carried in favor of Owner and Tenant and other parties to
instruments to which this Lease is subordinate, as their respective interests
may appear, in insurance companies licensed to do business in New York and in
such form as shall be satisfactory to Owner and shall comply with the
requirements of any such instruments. All policies shall provide that loss, if
any, payable thereunder shall be payable to Owner and Tenant and to the other
parties to instruments to which this Lease is subordinate as their respective
interests may appear.
E. At least ten (10) days prior to the expiration of each policy which
Tenant is required to procure, Tenant shall deliver to Owner the Certificate for
renewal insurance.
F. Tenant and Owner shall cooperate in connection with the collection of
any insurance monies that may be due in the event of loss, and Tenant and Owner
shall execute and deliver such proofs of loss and other instruments which may be
required
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for the purpose of obtaining the recovery of any such insurance monies.
G. Each policy required of Tenant (including renewal insurance) or
certificate therefor issued by the insurer shall constitute an agreement by the
insurer that such policy shall not be canceled or materially modified without at
least ten (10) days prior written notice to Owner unless such policies are
replaced by equal or better coverage and in no event shall such policies be
canceled by tenant without Owner's prior written consent.
H. Any insurance provided for in this Article 45 may be effected by a
policy or policies of blanket insurance, provided, however, that the amount of
the total insurance allocated to the Demised Premises or Building or Land shall
be such as to furnish in protection the equivalent or separate policies in the
amounts herein required, and provided further that in all other respects, any
such policy or policies shall comply with the other provisions of this Lease,
except that no such policy shall be submitted to Owner less than thirty (30)
days prior to the expiration of an existing policy. In any such case it shall
not be necessary to deliver the original of any such blanket policy to Owner,
but Owner shall be furnished with a certificate or duplicate of such policy
acceptable to Owner.
I. The Owner and the Tenant and all parties claiming under them hereby
mutually release and discharge each other from all claims and liabilities
arising from or caused by any hazard covered by insurance on the Demised
Premises, or covered by insurance in connection with property on or activities
conducted on the Demised Premises, regardless of the cause of the damage or
loss. This release shall be in effect only so long as the applicable insurance
policies contain a clause to the effect that this release shall not affect the
right of the insured to recover under such policies. Such clauses shall be
obtained by the parties whenever possible.
J. In the event, however, that any such increase in premiums shall be due
to any act or omission to act of the Tenant, other than Tenant's mere use of the
Premises as Executive Offices and as permitted herein, Tenant shall pay the
entire amount of such increase. Conversely, if any such increase is due to any
act or omission to act of any other Tenant in the Building, Tenant shall not be
required to pay any portion of such increase.
ARTICLE 46
RENT CONTROL
If at the commencement of, or at any time(s) during the term of this Lease,
the rent(s) reserved in this Lease shall not be fully [UNINTELLIGABLE], State,
County or local law, proclamation, order or regulation, or direction of a public
officer or body pursuant to law, Tenant shall enter into such agreement(s) and
take such other steps (without additional
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expense to Tenant) as Owner may request and may be legally permissible to permit
Owner to collect the maximum rents which may from time to time during the
continuance of such legal rent restriction be legally permissible (and not in
excess of the amounts reserved therefor under this Lease). Upon the termination
of such legal rent restriction prior to the expiration of the term of this
Lease, (a) the rents shall become and thereafter be payable hereunder in
accordance with the amounts reserved in this Lease for the periods following
such termination and (b) Tenant shall pay to Owner, if legally permissible, an
amount equal to (i) the rents which would have been paid pursuant to this Lease
but for such legal rent restriction less (ii) the rents paid by Tenant to Owner
during the period(s) such legal rent restriction was in effect.
ARTICLE 47
BROKER
Landlord and Tenant represent that they have dealt with no broker in
connection with the negotiation of this Lease and that insofar as each is aware,
no broker was responsible for or participated in the procurement of this Lease.
Each shall indemnify and hold the other harmless from and against any claims for
broker's commissions or similar compensation brought by any party by reason of a
breach of the indemnifying party's representations.
ARTICLE 48
PREPARATION FOR OCCUPANCY
A. The Demised Premises shall be altered or initially prepared for Tenant's
occupancy in the manner, and subject to the terms, conditions and covenants, set
forth in Exhibit "D". The facilities, materials and work so to be furnished,
installed and performed in the Demised Premises by Owner at its expense are
hereinafter and in Exhibit "D" referred to as "Owner's Work". Such other
installations, materials and work which may be undertaken by or for the account
of Tenant to equip, decorate and furnish the Demised Premises for Tenant's
occupancy, commonly called "finishing trades work", are hereinafter and in
Exhibit "D" called "Tenant's Work." Owner shall afford Tenant and its employees,
agents and contractors access to the Demised Premises, at reasonable times and
at Tenant's sole risk and expense, for the purposes of inspecting and verifying
the performance of Owner's Work and of making preparations for and performing or
inspecting and verifying the performance of Tenant's Work. Such access for such
purposes shall not be deemed to constitute possession or occupancy accelerating
the Commencement Date or Tenant's obligation to pay rent under this Lease. If
and to the extent that Tenant's Work is not performed by Owner for Tenant's
account, Tenant and its contractors shall be entitled to such rights, privileges
and immunities, and shall be subject to such obligations, restrictions and
reservations, with respect to the performance of Tenant's Work as may be
provided in Exhibit "D" with respect thereto.
B. Owner shall perform the Owner's Work in accordance with Exhibit "D",
provided, however, that Owner shall have the right to make any changes required
by any governmental department or bureau having jurisdiction of the Demised
Premises. Said work shall be performed by Owner only once, it being understood
that Owner's obligation to perform the work is a single non-recurring
obligation.
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C. If Tenant shall request that Owner perform any additional work, or
provide additional materials or installations either in preparation for initial
occupancy or during the term of this Lease, Owner agrees to perform such work at
cost, without charge for overhead, supervisory fees or the like.
ARTICLE 49
READINESS FOR OCCUPANCY AND COMMENCEMENT AND EXPIRATION OF TERM
A. The Demised Premises shall be deemed ready for occupancy when Owner
shall have substantially completed Owner's Work in the Demised Premises and
shall have given notice to Tenant to such effect. Owner's Work in the Demised
Premises shall be deemed substantially completed notwithstanding the fact that
minor or insubstantial details of construction, mechanical adjustment or
decoration remain to be performed, the non-completion of which does not
materially interfere with Tenant's use of the Demised Premises.
ARTICLE 48A
Tenant is permitted to place their own sign in the existing stantion of on
the front lawn of The Towers.
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ARTICLE 50
COMMON AREAS
A. All common areas and other common facilities (hereinafter collectively
called "common area") made available by Owner in or about the Land and Building
shall be subject to the exclusive control and management of Owner, expressly
reserving to Owner, without limitation, the right to erect and install within or
upon the Building or the parking areas, planters, pools, sculpture,
free-standing buildings, additional stories to buildings, or otherwise. Common
areas (as initially constructed or as the same may be enlarged or reduced at any
time thereafter) shall mean all areas, space, facilities, equipment, signs and
special services from time to time made available by Owner for common and joint
use and benefit of Owner, the Tenant and other Tenants and occupants of the
Building, and their respective employees, agents, subtenants, concessionaires,
licensees, customers and invitees, which may include (but shall not be deemed a
representation as to their availability) the sidewalks, parking areas, access
roads, driveways, landscaped areas, courts, stairs, ramps, elevators,
escalators, comfort and first aid stations and public washrooms. Owner hereby
expressly reserves the right from time to time, to construct, maintain and
operate lighting and other facilities, equipment and signs on all of said common
areas; to police the same; to change the area, level, location and arrangement
of the parking areas and other facilities forming a part of said common areas;
to build multi-story parking facilities; to restrict parking by Tenants and
other occupants of the Building and their employees, agents, subtenants,
concessionaires and licensees; to close temporarily all or any portion of the
common areas for the purpose of making repairs or changes thereto and to
discourage non-customer parking, and to establish, modify and enforce reasonable
rules and regulations with respect to the common areas and the use to be made
thereof. Owner shall operate, manage, equip, light and maintain the common areas
in such manner as Owner may from time to time determine, and Owner shall have
the right and exclusive authority to employ and discharge all personnel with
respect thereto. Tenant is hereby given a non-exclusive license to use, during
the term hereof, the common areas as they may now or at any time during the term
exist, provided, however, that if the size, location or arrangement or such
common areas of the type of facilities at any time forming a part thereof be
enhanced or diminished, Owner shall not be subject to any liability therefor,
not shall Tenant be entitled to any compensation or diminution or abatement of
rent therefor, nor shall such change or diminution
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of such areas be deemed a constructive or actual eviction. Owner reserves the
right to grant to third persons the non-exclusive right to cross over and use in
common with Owner and all Tenants of the Building the common areas as designated
from time to time by Owner. In order to establish that the Building and any
portion thereof is and will continue to remain private property and to prevent a
dedication thereof or the accrual of any rights to any person or the public
therein, Owner hereby reserves the unrestricted right to close any portion of
the common areas located outside the Building owned, leased or controlled by
Owner to the general public for one (1) day in each calendar year, and, in
connection therewith, to seal off all entrances to such common areas, or any
portion thereof.
B. Tenant shall have the non-exclusive right to use in common with Owner
and other Tenants of the Building and their employees and invitees and parking
area provided by Owner for the parking of passenger automobiles. Owner may issue
parking permits, install a gate system, and impose any other system as Owner
deems necessary for the use of the parking area. Tenant agrees that it and its
employees and invitees shall comply with such rules and regulations for use of
the parking are as Owner may from time to time prescribe. Owner shall not be
responsible for any damage or theft of any vehicle in the parking area, and
shall not be required to keep parking spaces clear of unauthorized vehicles or
to otherwise supervise the use of the parking area. Owner agrees that Tenant may
park up to fifty-five (55) cars on a non-exclusive basis.
ARTICLE 51
OWNER'S LIABILITY
If Owner or a successor in interest is an individual (which term as used
herein includes aggregates of individuals, such as joint ventures, general or
limited partnerships or associations) such individual shall be under no personal
liability with respect to any of the provisions of this Lease, and if such
individual is in breach or default with respect to its obligations under this
Lease, Tenant shall look solely to the equity of such individual in the Land and
Building of which the Demised Premises form a part for the satisfaction of
Tenant's remedies and in no event shall Tenant attempt to secure any personal
judgment against Owner or against any partner, employee or agent of Owner by
reason of such default by Owner.
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ARTICLE 53
SIGNS
Except as provided in Article 48a hereof, Tenant shall have no right to
affix any sign to the Demised Premises, or to any part of the public corridors,
or to any other part of the building until the sign has been approved by Owner
which approval shall not be unreasonably withheld or delayed, as identical or
harmonious with Owner's criteria for color, type, size and design of all signs
in the Building. Owner shall have the right to remove any sign affixed by Tenant
prior to such approval. Tenant shall otherwise strictly comply with the
requirement of Regulation 5.
ARTICLE 54
PARTNERSHIP TENANT
If Tenant is a partnership (or is comprised of two (2) or more persons,
individually or as co-partners of a partnership) or if Tenant's interest is in
Lease shall be validly assigned to a partnership or to two (2) or more persons,
individually or as co-partners of a partnership (any such partnership and such
persons are referred to in this paragraph as "Partnership Tenant"), the
following provisions shall apply to such Partnership Tenant: (i) the liability
of each of the parties comprising Partnership Tenant shall be joint and several,
and (ii) each of the parties comprising Partnership Tenant hereby consents in
advance to, and agrees to be bound by, any modifications of this Lease which may
hereafter be made and by any notices demands, requests or other communications
which may hereafter be given by Partnership Tenant or by any of the parties
comprising Partnership Tenant, and (iii) any bills, statements, notices, demands
requests, or other communications given or rendered to Partnership Tenant or to
any of the parties comprising Partnership Tenant shall be deemed given or
rendered to Partnership Tenant and to all such parties and shall be binding upon
Partnership Tenant and all such parties, and (iv) if Partnership Tenant shall
admit new partners, all of such new partners shall, by their admission to
Partnership Tenant, be deemed to have assumed performance of all of the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed, and (v) Partnership Tenant shall give prompt notice to Owner of the
admission of any such new partners, and upon demand of Owner, shall cause each
such new partner to execute and deliver to Owner an agreement in form
satisfactory to Owner, wherein each such new partner shall assume performance of
all of the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed (but neither Owner's failure to request any such
agreement nor the failure of any such new partner to execute or deliver any such
agreement to Owner shall vitiate the provisions of the subdivision (iv) of this
paragraph).
ARTICLE 55
EFFECTIVENESS
This Lease shall not be binding upon Owner until a copy or counterpart
hereof shall have been executed and delivered by Owner.
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ARTICLE 56
RE-ARRANGEMENT OF TENANT'S SPACE
Intentionally Omitted
ARTICLE 57
CONCESSION
Notwithstanding anything contained herein to the contrary, Landlord agrees
that Tenant may occupy the demised premises for the period from and after the
execution hereof through September 30, 1993 without the obligation to pay any
rent for such period provided, however, that such occupancy shall be under all
of the terms and provisions of this Lease except the covenant to pay any rent to
Landlord during said period. It is understood that rent commences October 1,
1993.
ARTICLE 58
OPTION TO RENEW
(a) Tenant shall have the option to extend the term of this Lease for an
additional five (5) year term to commence on October 1, 1998 and to end on
September 30, 2003 (the "Extended Term").
(b) The annual rent, including electricity, during the extended term shall
be as follows:
(i) From October 1, 1998 to September 30, 1999 - $152,568 per annum;
(ii) From October 1, 1999 to September 30, 2000 - $157,784 per annum;
(iii) From October 1, 2000 to September 30, 2001 - $163,000 per annum;
(iv) From October 1, 2001 to September 30, 2002 - $168,216 per annum;
(v) From October 1, 2002 to September 30, 2003 - $173,432 per annum.
(c) The Base Year for taxes under Article 42 during the Extended Term shall
be the Taxes levied during the period October 1, 1998 through September 30,
1999.
(d) The option to extend the Lease must be exercised by Tenant by written
notice to Landlord given no later than April 1, 1998. With the exception of the
change in rent and Base Year for taxes, all other terms and conditions of the
Lease will remain in effect during the Extended Term.
ARTICLE 59
BANKRUPTCY
Notwithstanding any provision of Article 16 to the contrary, Landlord may
not cancel this Lease if:
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(a) rent is being paid;
(b) in the event of an involuntary proceeding commenced against Tenant,
Tenant has caused the dismissal of such proceeding within ninety (90) days.
ARTICLE 60
DIRECTORY LISTINGS
Tenant shall be entitled to as many listings in the Building's lobby
directory as tenant shall require, not to exceed twenty (20) listings.
ARTICLE 61
ELECTRICITY - DIRECT METER
Notwithstanding anything contained in this Lease to the contrary, Tenant
shall have the option to purchase electricity directly from the public utility
serving the Building, by notifying Landlord of its election to do so by April
30, 1994. If Tenant exercises said option, Tenant, at its cost, shall cause a
separate meter to be installed to measure Tenant's consumption and such
electricity may be furnished to Tenant by means of the then existing building
system feeders, risers and wiring. Thereafter, Tenant shall pay directly to said
public utility for electrical consumption at the demised premises, inclusive of
air-conditioning, and the fixed rent payable under this Lease shall be reduced
by the amount then included for the cost of electricity pursuant to this Article
and Tenant shall have no further obligation to make payments pursuant to Article
64 (e).
ARTICLE 62
ASSIGNMENT AND SUBLETTING
(a) Notwithstanding anything to the contrary contained herein, Tenant shall
have the privilege without the consent of Landlord and without Landlord having
the right granted in Article 44 hereof to terminate this Lease, to assign its
interest in this Lease or to sublet all or a portion of the Demised Premises to
one or more corporations or one or more entities which shall (1) control, (2) be
under the control of, or (3) be under common control with Tenant (the term
"control" as used herein shall be deemed to mean direct or indirect ownership of
50% or more of the outstanding voting stock of a corporation, or other majority
equity and controlling interest if tenant is not a corporation or the possession
of power to direct or cause the direction of the management and policy of such
entity) (any such entity being a "Related Entity").
(b) In addition, Tenant shall have the privilege, without the consent of
Landlord, to assign its interest in this Lease to a purchaser of all or
substantially all of Tenant's assets or to any corporation which is a successor
to Tenant by merger or consolidation.
(c) Tenant may sublet all or any portion of the Demised Premises with the
Landlord's consent, such consent not to be unreasonably withheld or delayed.
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(d) Tenant shall deliver to Landlord either (x) a duplicate original
instrument of assignment duly executed by the assignee, in which such assignee
shall assume observance and performance of, all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, or (y) a
duplicate original sublease duly executed by Tenant and any such subtenant.
ARTICLE 63
In lieu of Article 43 there shall be an increase of $1.00/sq. ft. annually
and cumulatively (i.e., Year one $24.25/sq. ft., Year two $25.25/sq. ft., Year
three $26.25/sq. ft., Year four $27.25/sq. ft./ Year five $28.25/sq. ft.). Base
rent inclusive of electricity, but subject to the provisions of Articles 38 and
61 hereof, shall be as follows:
Year one - October 1, 1993- September 30, 1994 - $126,488 per annum
Year two - October 1, 1994 - September 30, 1995 - $131,704 per annum
Year three - October 1, 1995 - September 30, 1996 - $136,920 per annum
Year four - October 1, 1996 - September 30, 1997 - $142,136 per annum
Year five -October 1, 1997 - September 30, 1998 - $147, 352 per annum
ARTICLE 64
LANDLORD'S WORK
Landlord will perform the following work at Landlord's sole cost and
expense ("Landlord's Work"):
(a) Landlord shall install carpet from Landlord's samples at a maximum cost
of $10.00 per square yard including vinyl base. If Tenant does not desire to use
such carpet, Tenant may (i) receive a credit form Landlord equal to $10.00 per
square yard (based on 4173 useable square feet) or (ii) purchase more expensive
carpet and be responsible for the cost in excess of $10.00 per square yard
(based on 4,173 useable square feet).
(b) Landlord shall paint the entire Demised Premises (2 coats) in color
chosen by Tenant.
(c) Landlord shall install new ceiling tile throughout the Demised Premises
and clean lenses or install new lenses (where necessary).
(d) Landlord will cause the removal of partitions as shall be requested by
Tenant; Landlord will be responsible for labor cost and Tenant shall pay for
carting.
(e) Landlord shall pay for the installation of an auxiliary air condition
(at least 12 tons) for the Demised Premises. Said auxiliary unit shall be on a
separate switch with a clock. Tenant shall pay $12.00/hr. to Landlord for actual
usage of said unit, unless Tenant
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purchases electricity directly from the utility serving the Building.
(f) Landlord's Work shall be completed within thirty days after the date
hereof. If Landlord's Work shall not be completed by such date (unless such
delay has been caused by Tenant), Tenant's rent concession period as herein
provided shall be extended for a similar length of time.
ARTICLE 65
Landlord shall deliver the Demised Premises in compliance with all local
laws and codes and free of all violations and conditions which would constitute
violations. Landlord represents that the Demised Premises are entirely free of
asbestos.
OWNER:
THE TOWERS
By: [unintelligible]
--------------------
TENANT:
GKN SECURITIES CORP.
By: [unintelligible]
--------------------
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EXHIBIT C
CLEANING AND JANITORIAL SERVICE
I. OFFICE AREA
A. Daily: (Monday through Friday, inclusive, holidays excepted.)
1. Empty all waste receptacles and return to proper locations.
2. Sweep and dust mop all uncarpeted areas.
3. Vacuum all rugs and carpeted areas.
4. Dust all horizontal surfaces of furniture and equipment within
normal reach.
5. Clean and sanitize all drinking fountains and water coolers.
6. Remove fingermarks from glass doors.
7. Wipe clean all brass and other metal surfaces within normal reach.
B. Monthly:
1. Remove all fingermarks from doors, door jambs, and light switches.
2. Spray buff tile floor areas, where needed.
C. Quarterly:
1. Dust all pictures, frames, chart boards and similar wall hangings.
II. LAVATORIES
A. Daily:
1. Sweep and mop floors.
2. Clean and sanitize all floors, toilet seats, bowls, urinals and
fixtures.
3. Clean all mirrors and shelves.
4. Refill towel dispensers, tissue holders; materials to be furnished
by Owner.
5. Empty paper tower receptacles.
6. Dust all partitions.
B. Monthly:
1. Wash all partitions, dispensers, and splash areas.
2. Dust all light fixtures and ventilation grilles.
C. Quarterly:
Wash all tile walls.
Tenant requiring services in excess of those described above shall request the
same through Owner, at Tenant's expense.
27
EXHIBIT 10.5
TWO STAMFORD PLAZA
[NAME OF BUILDING]
STANDARD FORM OFFICE LEASE
BETWEEN
ZML-STAMFORD ATLANTIC FORUM LIMITED PARTNERSHIP
("LANDLORD"),
by its agent, EQUITY OFFICE PROPERTIES, INC.
AND
GKN Securities Corp.
("TENANT")
<PAGE>
TABLE OF CONTENTS
I. Basic Lease Information; Definitions .......................... 1
II. Lease Grant ................................................... 3
III. Adjustment of Commencement Date/Possession .................... 3
IV. Use ........................................................... 4
V. Rent .......................................................... 4
VI. Security Deposit .............................................. 5
VII. Services to be Furnished by Landlord .......................... 5
VIII. Leasehold Improvements ........................................ 6
IX. Graphics ...................................................... 6
X. Repairs and Alterations by Tenant ............................. 6
XI. Use of Electrical and HVAC Services by Tenant ................. 7
XII. Entry by Landlord ............................................. 7
XIII. Assignment and Subletting ..................................... 7
XIV. Liens ......................................................... 8
XV. Indemnity and Waiver of Claims ................................ 8
XVI. Tenant's Insurance ............................................ 9
XVII. Subrogation ................................................... 10
XVIII. Landlord's Insurance .......................................... 10
XIX. Casualty Damage ............................................... 10
XX. Demolition .................................................... 11
XXI. Condemnation .................................................. 11
XXII. Events of Default ............................................. 11
XXIII. Remedies ...................................................... 12
XXIV. LIMITATION OF LIABILITY ....................................... 13
XXV. No Waiver ..................................................... 13
XXVI. Event of Bankruptcy ........................................... 13
XXVII. Quiet Enjoyment ............................................... 14
XXVIII. Relocation .................................................... 14
XXIX. Holding Over .................................................. 14
XXX. Subordination Mortgages ....................................... 15
XXXI. Attorneys Fees ................................................ 15
XXXII. Notice ........................................................ 15
XXXIII. Landlord's Lien ............................................... 15
XXXIV. Excepted Rights ............................................... 16
XXXV. Surrender of Premises ......................................... 16
XXXVI. Miscellaneous ................................................. 16
XXXVII. Entire Agreement .............................................. 17
<PAGE>
OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease"), is made and entered into as of the
_____ day of _____, 19____, by and between ZML-STAMFORD ATLANTIC FORUM LIMITED
PARTNERSHIP, an Illinois Limited Partnership ("Landlord"), by its agent, Equity
Office Properties, Inc. and GKN Securities Corp. ________________________, a New
York Corporation ("Tenant").
I. Basic Lease Information: Definitions.
A. The following is some of the basic lease information and defined
terms used in this Lease.
1. "Broker" means Newmark & Company Real Estate, Inc.
2. "Building" shall mean the office building located at 281
Tressor Boulevard Stamford, Fairfield County, State of
Connecticut, commonly known as Two Stamford Plaza.
3. If Landlord is not required to perform Landlord Work
(hereinafter defined) in the Premises, the "Commencement
Date," "Lease Term" and "Termination Date" shall be as set
forth in subsection I.A.3.a. below. If Landlord is required to
perform Landlord Work in the Premises, pursuant to subsection
I.A.3.b. below (delete one):
a. The "Lease Term" shall mean a period of 10 years 6
months commencing on the earlier of (i) June 1, 1994 or
(ii) the day Tenant or anyone claiming under or through
tenant shall take possession of any part of the
Premises, (the "Commencement Date") and, unless sooner
terminated as provided herein, ending on November 30,
2004 (the "Termination Date"). Notwithstanding the
foregoing, if tenant is delayed in completing the
Initial Alterations by the Commencement Date as a result
of events of Force Majeure, Tenant shall have the option
to postpone the Commencement Date by the lesser of
ninety (90) days and the number of days that Tenant is
delayed in completing the Initial Alterations due to
events of Force Majeure. In order to be entitled to
claim a delay due to Force Majeure, Tenant must notify
landlord of the existence of such delay within five (5)
days after Tenant first becomes aware of such delay.
5. "Landlord Work" shall mean the work, if any, that Landlord is
obligated to perform in the Premises pursuant to the Work
Letter Agreement attached hereto as Exhibit "C."
6. "Notice Addresses" shall mean the following addresses for
Tenant and Landlord, respectively:
Tenant:
Prior to the Commencement Date, notices shall be sent to
Tenant at the following address:
with a copy to:
GKN Securities Corp. Graubard Mollen Horowitz Pomeranz & Shapiro
61 Broadway 600 Third Avenue
New York, NY 10006 New York, NY 10016-1903
ATTN: Lester N. Henner
On or after the Commencement Date, notices shall be sent to
Tenant at the Premises.
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Landlord:
Equity Office Properties, Inc.
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901
Attention: Building Manager
With a copy to:
Equity Office Properties, Inc.
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Attention: General Counsel
Payments of Rent only shall be made payable to the order of
ZML-STAMFORD ATLANTIC FORUM LIMITED PARTNERSHIP at the
following address:
c/o Fleet Bank N.A.
Dept. 192-6
P.O. Box 9125
Stamford, CT 06925
Acct# 9361708515
7. "Permitted Use" shall mean: General Office Use Executive
offices, securities and investment sales.
8. "Premises" shall mean the area located on the 15th floor(s) of
the Building and outlined on Exhibit A attached hereto and
incorporated herein and known as Suite #1503.
9. "Prepaid Rental": Eight Thousand Four Hundred Seventy Five and
58/100 Dollars ($8,475.58) payable by Tenant upon execution of
this Lease by Tenant in accordance with Article V hereof.
10. "Rentable Area of the Premises" shall mean the area contained
within the demising walls of the Premises and any other area
designated for the exclusive use of Tenant, without deduction
for any columns or projections necessary to the Building, plus
a proportionate share of any Common Areas located on the
floor(s) on which the Premises is located and a proportionate
share of the Building's public areas, management office,
engineer's office and "Mechanical Spaces" i.e. spaces housing
service areas, equipment and/or access corridors for HVAC and
communications facilities, plumbing, fire protection and
elevators. The Rentable Area of the Premises is deemed for all
purposes under this Lease to be 5,353 square feet. The
"Rentable Area of the Building" is deemed for all purposes
under this Lease to be 253,020 square feet. The square footage
amounts set forth for the Rentable Area of the Premises and
the Rentable Area of the Building constitute a material part
of the economic basis of this Lease and the execution thereof
by Landlord and shall not be adjusted without the written
consent of Landlord.
11. "Security Deposit" shall mean the sum of Twenty Five Thousand
Four Hundred Twenty Six and 75/100 Dollars ($25,426.75).
12. "Tenant's Pro Rata Share" shall mean Two and Twelve Hundredths
percent (2.12%), which is the sum derived by dividing the
Rentable Area of the Premises by the Rentable Area of the
Building and multiplying the result thereof by one hundred
(100).
B. The following are additional definitions of some of the defined
terms used in the Lease.
1. "Basic Costs" shall mean all direct and indirect and indirect
costs and expenses incurred in connection with the Property as
more fully defined in Exhibit B-2.
2. "Building Standard" shall mean the type, grade, brand, quality
and/or quantity of materials Landlord designates from time to
time to be the minimum quality and/or quantity to be used in
the Building.
3. "Business Day(s)" shall mean Mondays through Fridays exclusive
of the normal business holidays ("Holidays") of New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day, and such other days as Landlord may
designate.
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4. "Common Areas" shall mean those areas provided for the common
use or benefit of all tenants generally and/or the public,
such as corridors, elevator foyers, common mail rooms,
restrooms, vending areas, and lobby areas (whether at ground
level or otherwise), and other similar facilities.
5. "Maximum Rate" shall mean the greatest per annum rate of
interest permitted from time to time under applicable federal
and state law.
6. "Normal Business Hours" for the Building shall mean 8:00 a.m.
to 6:00 p.m. Mondays through Fridays, exclusive of Holidays,
and such other hours as Landlord may designate from time to
time.
7. "Prime Rate" shall mean the per annum interest rate publicly
announced by First National Bank of Chicago from time to time
(whether or not charged in each instance) as its prime or base
rate.
8. "Property" shall mean the Building, the Building Garage, if
any, all other improvements serving the Building and the
tenants thereof and the parcel(s) of land on which they are
located.
II. Lease Grant. Subject to and upon the terms herein set forth, Landlord
leases to Tenant and Tenant leases from Landlord the Premises.
III. Adjustment of Commencement Date/Possession.
A. Promptly after the determination of the Commencement Date by
Landlord, Landlord shall prepare a letter agreement (the
"Commencement Letter") setting forth the Commencement Date, the
Termination Date and any other dates that are affected by the
adjustment of the Commencement Date. Tenant, within (5) days after
receipt thereof from
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Landlord, shall execute the Commencement Letter and return the same
To Landlord.
B. By taking possession of the Premises, Tenant is deemed to have:
1. accepted the Premises and agreed that the Premises is in good
order and satisfactory condition, with no representation or
warranty by Landlord as to the condition or suitability of the
Premises or of the Building for Tenant's use thereof; and
2. agreed that Landlord has no obligation to clean, decorate,
alter, remodel, improve or repair the Premises or the Building
unless said obligation is specifically set forth in this
Lease.
D. If Tenant takes possession of the Premises prior to the Commencement
Date for any reason whatsoever such possession shall be subject to
all the terms and conditions of the Lease and Tenant shall pay Base
Rental and Additional Base Rental to Landlord on a per diem basis
for each day of occupancy prior to the Commencement Date.
IV. Use. The Premises shall be used for the Permitted Use and for no other
purpose. Tenant agrees not to use or permit the use of the Premises for
any purpose which is illegal, dangerous to life, limb or property or
which, in Landlord's opinion, creates a nuisance or which would increase
the cost of insurance coverage with respect to the Building. Landlord
hereby represents that so long as Tenant complies with all of this Lease,
the use of the Premises for the Permitted Use will not result in an
increase in the cost of insurance coverage for which Tenant will be
responsible (other than through inclusion in Basic Costs). Tenant shall
conduct its business and control its agents, servants, contractors,
employees, customers, licensees, and invitees in such a manner as not to
interfere with, annoy or disturb other tenants, or in any way interfere
with Landlord in the management and operation of the Building. Tenant will
maintain the Premises in a clean healthful condition, and comply with all
laws, ordinances, orders, rules and regulations of any governmental entity
with reference to the operation of Tenant's business and to the use,
condition, configuration or occupancy of the Premises, including without
limitation, the Americans with Disabilities Act. Tenant will comply with
the rules and regulations of the Building adopted and altered by Landlord
form time to time and will cause all of its agents, servants, contractors,
employees, customers, licensees and invitees to do so. All changes to such
rules and regulations will be sent by Landlord to Tenant in writing. A
copy of the existing rules and regulations is attached hereto as Exhibit D
and made a part hereof. Landlord shall make reasonable efforts to enforce
all such rules and regulations in a non-discriminatory and uniform manner.
Tenant agrees not to commit or allow any waste to be committed on any
portion of the Premises, and at the termination of this Lease to deliver
up the Premises to Landlord in accordance with Article XXXV hereof.
Anything in this section to the contrary notwithstanding, Landlord, not
Tenant, shall be responsible for complying with any laws, ordinances,
orders, rules and regulations which are imposed on the Building generally
and which would have to be complied with by Landlord whether Tenant or any
other tenants were then in possession of the Premises. Landlord, to the
best of its knowledge, represents that, as of the date Landlord provides
Tenant with possession of the Premises for the purpose of performing the
Initial Alterations, the Premises shall be in compliance with all
applicable laws, ordinances orders, rules and regulations with respect to
the Premises, including, without limitation, all Environmental Laws.
Notwithstanding anything contained herein or in the Addendum to this
Lease, Landlord shall be responsible for the cost of correcting any such
violations that exist in the Premises on the date Tenant is provided with
possession of the Premises. In addition, Landlord shall be responsible for
complying with Title III of the Americans with Disabilities Act (ADA) with
respect to the Common Areas of the Building. Landlord shall have the right
to contest any alleged violation in good faith, including, without
limitation, the right to apply for or obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by law and
the right to appeal any decisions, judgments or rulings to the fullest
extend permitted by law. Landlord, after the exhaustion of any and all
rights to appeal or contest, will make all repairs, additions, alterations
or improvements necessary to comply with the terms of any final order or
judgment, provided that if Landlord elects not to contest any alleged
violation, Landlord will promptly make all repairs, additions, alterations
or improvements necessary to comply with notice of violation.
V. Rent
A. Tenant covenants and agrees to pay to Landlord during the Lease
Term, without any setoff or deduction whatsoever, the full amount of
all Base Rental payments, and any adjustments thereof, due in
accordance with the rental schedule set forth in Exhibit B-1 hereof
(the "Base Rental"), the full amount of all payments of Additional
Base Rental due in accordance with Exhibit B-2 hereof and the full
amount of all parking charges, if any, due in accordance with this
Lease (the "Additional Base Rental") and all such other sums of
money as shall become due under this Lease (including, without
limitation, any charges for replacement of electric lamps and
ballasts and any other services, goods or materials furnished by
Landlord at Tenant's request), all of which hereinafter may be
collectively called "Rent." Except as otherwise provided herein, the
Base Rental and Additional Base Rental for each calendar year or
portion thereof during the Lease Term, shall be due and payable in
advance in equal monthly installments on the first day of each
calendar month during the Lease Term and any extensions or renewals
hereof, and Tenant hereby agrees to pay such Base Rental for the
first full calendar month of the Lease Term shall be payable upon
the execution of this Lease by Tenant. If the Lease Term commences
on a day other than the first day of a month or terminates on a day
other than the last day of a month, then the installments of Base
Rental and Additional Base Rental for such month or months shall be
prorated, based on the number of days in such month. All such
payments shall be by a good and sufficient check. No
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render Landlord liable in any respect nor be construed as an
eviction of Tenant, nor give rise to an abatement of Rent, nor
relieve Tenant from the obligation to fulfill any covenant or
agreement hereof. Should any of the equipment or machinery used in
the provision of such services for any cause cease to function
properly, Landlord shall use reasonable diligence to repair such
equipment or machinery, but except as otherwise expressly provided
herein, Tenant shall have no claim for offset or abatement of Rent
or damages on account of an interruption in service or resulting
therefrom. Landlord's entire obligation with respect to the repair
and maintenance of the Premises are set forth above.
C. Tenant expressly acknowledges that if Landlord, from time to time,
elects to provide security services, Landlord shall not be deemed to
have warranted the efficiency of such security personnel, services,
procedures or equipment and Landlord shall not be liable in any
manner for the failure of any such security personnel, services,
procedures or equipment to prevent or control, or apprehend any one
suspected of personal injury or property damage in, on or around the
Property.
VIII. Leasehold Improvements.
A. Except as otherwise specifically provided elsewhere in this Lease or
in the Work Letter Agreement, if any, attached hereto as Exhibit C
and incorporated herein, all installations and improvements now or
hereafter placed on or in the Premises shall be for Tenant's account
and at Tenant's cost, which cost shall be payable by Tenant to
Landlord upon demand as additional Rent.
B. Any and all alterations, additions and improvements to the Premises,
all attached furniture, equipment and non-trade fixtures
(collectively, "Leasehold Improvements") shall be owned and insured
by Landlord and shall remain upon the Premises, all without
compensation, allowance or credit to Tenant. Any unattached and
movable equipment or furniture, trade fixtures or other personalty
of Tenant ("Tenant's Property") shall be owned and insured by
Tenant. Landlord may, nonetheless, require Tenant to remove any
Leasehold Improvements performed by or for the benefit of Tenant and
all electronic, phone and data cabling as are designated by Landlord
(the "Required Removables") at Tenant's sole cost. In the event that
Landlord so elects, Tenant shall remove such Required Removables on
or before the expiration or earlier termination of this Lease and
repair any damage caused by such removal. If Tenant fails to remove
the Required Removables after Landlord's request therefor, Landlord
may remove, store or dispose of the Required Removables at Tenant's
cost, and repair any damage caused by such removal and Tenant shall
pay Landlord as additional Rent hereunder, on demand, all such
costs". Notwithstanding the foregoing, Tenant may request in writing
at the time it submits its plans and specifications for an
alteration, addition or improvement (including initial alteration
plans) that Landlord advise Tenant whether Landlord will require
Tenant to remove, at the termination of this Lease or Tenant's right
to possession hereunder, such alteration, addition or improvement,
or any particular portion thereof and Landlord shall advise Tenant
within twenty (20) days after receipt of Tenant's request as to
whether Landlord will require removal; provided, however, Landlord
shall have the right to require Tenant to remove any vault or
stairway installed in the Premises, regardless of whether Landlord
timely notified Tenant that it would require such removal.
IX. Graphics. Landlord shall provide and install, at Tenant's cost, all
letters or numerals on the exterior of the Premises; all such letters and
numerals shall be in the standard graphics for the Building and no others
shall be used or permitted on the Premises without Landlord's prior
written consent not to be unreasonably withheld or delayed.
X. Repairs and Alterations by Tenant
A. Tenant shall, at Tenant's own cost and expense, keep the Premises in
good condition and repair. Such repairs shall restore the Premises
to as good a condition as it was in prior to such damage and shall
be effected in compliance with the reasonable directions of
Landlord. If Tenant fails to make such repairs to the Premises
promptly, Landlord may, at its option, make such repairs, and Tenant
shall pay the cost thereof to the Landlord on demand as additional
Rent.
B. Tenant shall not make or allow to be made any alterations, additions
or improvements to the Premises, nor install any vending machines,
safes or other heavy property or equipment within the Premises, nor
place signs or window coverings on the Premises which are visible
from outside the Premises, without first obtaining the written
consent of Landlord which consent shall not be unreasonably withheld
or delayed, in each such instance. Notwithstanding the foregoing,
Landlord's consent shall not be required for any alteration,
addition or improvement that satisfies all of the following
criteria: 1) costs less than Five Thousand and 00/100 Dollars
($5,000.00), 2) is of a cosmetic nature such as painting,
wallpapering, hanging pictures and installing carpeting, 3) is not
visible from the exterior of the Premises or Building, and 4) will
not affect the systems or structure of the Building and does not
require work to be performed inside the walls or above the ceiling
of the Premises; provided that even if consent is not required,
Tenant shall still comply with all the other provisions of the
Section X.B. Prior to commencing any such work, Tenant must furnish
Landlord with plans and specifications; names and addresses of
contractors; copies of contracts; necessary permits; evidence of
contractor's and subcontractor's insurance in accordance with
section XVI.B. hereof; and indemnification in form and amount
satisfactory to Landlord. All such improvements, alterations or
additions shall be installed in a good workmanlike manner using new
materials. Upon completion, Tenant shall furnish "as-built" plans,
contractor's affidavits and full and final waivers of lien and
receipted bills covering all labor and materials. All improvements,
alterations and additions shall comply with all insurance
requirements, codes, ordinances, laws and regulations, including
without limitation, the Americans with Disabilities Act: Except for
Tenants initial installation Tenant shall reimburse Landlord upon
demand as additional Rent for all sums expended by Landlord for
examination of the architectural, mechanical, electric and plumbing
plans for any alterations, additions or improvements and for the
costs of repairing any damage done to the Building caused by Tenant
or Tenant's agents, servants, employees, customers, licensees, or
invitees. If Landlord so requests, Tenant shall permit Landlord to
supervise construction operations, but no such supervision shall
impose any liability upon Landlord. Landlord's approval of Tenant's
plans and specifications or supervision of any work performed for or
on behalf of Tenant shall not be deemed to be a representation by
Landlord that such plans and specifications comply with applicable
insurance requirements, building codes, ordinances, laws or
regulations.
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XI. Use of Electrical and HVAC Services by Tenant.
A. All electricity used by Tenant in the Premises shall, at Landlord's
option, be paid for by Tenant (2) by a separate charge billed
directly to Tenant by Landlord and payable by Tenant as additional
Rent the current charge for electricity is $1.53/SF and is subject
to utility rate increases. Tenant's use of electrical and heating,
ventilating and air conditioning ("HVAC") services furnished by
Landlord shall not exceed, either in voltage, rated capacity, use or
overall load, that which Landlord deems to be standard for the
Building. In the event Tenant shall request that it be allowed to
consume electrical or HVAC services in excess of that deemed by
Landlord to be standard for the Building, Landlord may refuse to
consent to such usage or may consent upon such conditions as
Landlord elects, including the installation of utility service
upgrades, submeters, air handlers or cooling units), and all such
additional usage (to the extent permitted by law) installation and
maintenance thereof shall be paid for by the Tenant as additional
Rent. Landlord shall have the right to separately meter electrical
usage for the Premises at any time during the Lease Term or to use
any other method of measuring electrical usage that Landlord, in its
reasonable judgment, deems to be appropriate.
B. If Landlord generates or distributes electric current for the
Building, Tenant shall obtain all current from Landlord and pay as
additional Rent Landlord's charges therefor, provided, however, that
if the cost of providing electricity is not included Base Rental or
Basic Costs, the charges to Tenant shall not exceed the rate that
would be charged Tenant if billed directly by the local utility for
the same services. Landlord may cease to furnish electricity upon
thirty (30) days prior written notice, provided within the thirty
(30) days Landlord connects with another source of electric supply.
XII. Entry by Landlord. Landlord and its agents or representatives shall have
the right to enter the Premises to inspect the same, or to show the
Premises to prospective purchasers, mortgages, tenants or insurers, or to
clean or make repairs, alterations or additions thereto, including any
work that Landlord deems necessary for the safety, protection or
preservation of the Building or any occupants thereof, or to facilitate
repairs, alterations or additions to the Building or any other tenants
premises. If reasonably necessary for the protection and safety of Tenant
and its employees, Landlord shall have the right to temporarily close the
Premises to perform repairs, alterations or additions in the Premises,
provided that Landlord shall use reasonable efforts to perform all such
work on weekends and after Normal Business Hours. Entry by Landlord
hereunder shall not constitute a constructive eviction or entitle Tenant
to any abatement or reduction of Rent by reason thereof.
XIII. Assignment and Subletting.
A. Tenant shall not assign, sublease, transfer or encumber this Lease
or any interest therein or grant any license, concession or other
right of occupancy of the Premises or any portion thereof or
otherwise permit the use of the Premises or any portion thereof by
any party other than Tenant (any of which events is hereinafter
called a "Transfer") without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed with
respect to any proposed assignment or subletting. Notwithstanding
anything to the contrary contained herein or in Section XIII.D.,
Tenant may assign its entire interest under this Lease or sublet the
Premises to a wholly owned corporation or controlled subsidiary or
parent of Tenant or to any successor to Tenant by purchase, merger,
consolidation or reorganization (hereinafter collectively referred
to as "Corporate Transfer") without the consent of Landlord,
provided: (i) Tenant is not in default under his Lease; (ii) if such
proposed transferee is a successor to Tenant by purchase, said
proposed transferee shall acquire all or substantially all of the
stock or assets of Tenant's business or, if such proposed transferee
is a successor to Tenant by merger, consolidation or reorganization,
the continuing or surviving corporation shall own all or
substantially all of the assets of Tenant; (iii) such proposed
transferee shall have a net worth which is at least equal to
Tenant's net worth at the date of the Transfer; (iv) such proposed
transferee operates the business in the Premises for the Permitted
Use and no other purpose; and (v) in no event shall any Transfer
release or relieve Tenant from any of its obligations under this
Lease. Tenant shall give Landlord written notice at least twenty
(20) days prior to the effective date of such Corporate Transfer. As
used herein, the terms "controlled" or "subsidiary" shall mean a
corporate entity wholly owned by Tenant or at least fifty-one
percent (51%) whose voting stock is owned by Tenant. Landlord's
consent shall not be considered unreasonably withheld if (1) the
proposed transferee's financial responsibility does not meet the
same criteria Landlord uses to select Building tenants, (2) the
proposed transferee's business is not suitable for the Building
considering the business of the other tenants and the Building's
prestige or would result in a violation of an exclusive right
granted to another tenant in the Building, (3) the proposed use is
different than the Permitted Use, (4) the proposed transferee is a
government agency or occupant of the Building, or (5) Tenant is in
default and such default is not cured within the applicable grace
period provided in this Lease.
Tenant acknowledges that the foregoing is not intended to be an
exclusive list of the reasons for which Landlord may reasonably
withhold its consent to a proposed Transfer. Any attempted Transfer
in violation of the terms of this Article shall, at Landlord's
option, be void. Consent by Landlord to one or more Transfers shall
not operate as a waiver of Landlord's rights as to any subsequent
Transfers. In addition, Tenant shall not, without Landlord's
consent, publicly offer or advertise the Lease for Transfer in any
media for a price not lower than the Landlord's asking price for
available space in the building. In the event Tenant or anyone
acting on behalf of Tenant or with Tenant's knowledge violates the
provisions of the foregoing sentence, Landlord, in addition to its
other remedies, shall be entitled to seek injunctive relief
preventing such action, and Tenant shall be responsible for all
costs incurred by Landlord in connection therewith.
B. If Tenant requests Landlord's consent to a Transfer, Tenant shall
notify Landlord in writing at least thirty (30) days prior to the
effective date of the proposed Transfer of the name of the proposed
transferee and the nature of the business of the proposed
transferee, the term, use, rental rate and all other material terms
and conditions of the proposed Transfer, including, without
limitation, evidence reasonably satisfactory to Landlord that the
proposed transferee is financially responsible. Notwithstanding the
provisions of Section XIII.A. above, Landlord may, during said 30
period (1) consent to or refuse to consent to such Transfer in
writing, (2) negotiate directly with the proposed transferee and (in
the event Landlord is able to reach agreement with such proposed
transferee) upon execution of a lease with such transferee,
terminate this Lease (in part or in whole, as appropriate) upon
thirty (30) days notice, or (3) cancel and terminate this Lease, in
whole or in part as appropriate, upon thirty (30) days notice. In
the event Landlord consents to any such
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Transfer, the Transfer shall be in a form approved by Landlord, and
Tenant shall bear all costs and expenses incurred by Landlord in
connection with the review and approval of such documentation, which
costs and expenses shall be deemed to be Seven Hundred Fifty Dollars
($750.00). Notwithstanding the foregoing, Landlord shall not have
the right to terminate this Lease pursuant to 2 or 3 above if the
proposed transferee is a wholly owned corporation or controlled
subsidiary of Tenant or a successor to Tenant by purchase, merger,
consolidation or reorganization. In addition, Landlord shall not
have the right to terminate this Lease pursuant to 2 or 3 above
unless Tenant proposes to assign this Lease or sublet the entire
Premises for substantially the balance of the then remaining Lease
Term.
C. In addition to the Rent hereunder, Tenant hereby covenants and
agrees to pay to Landlord fifty percent (50%) of all rent and other
consideration which it receives which is in excess of the Rent
payable hereunder within ten (10) days following receipt thereof by
Tenant. In determining excess rent in connection with an assignment
or subletting, Tenant may, on an amortized basis, deduct the
following expenditures resulting from such subletting or assignment:
(1) brokerage and marketing fees; (2) legal fees; (3) construction
costs and (4) financial concessions granted in such sublease or
assignment. In addition to any other rights Landlord may have,
Landlord shall have the right to contact any transferee and require
that all payments made pursuant to the Transfer shall be made
directly to Landlord. Notwithstanding the foregoing, Landlord shall
not be entitled to share in any excess Rent received by Tenant in
connection with a merger, consolidation or reorganization of
Tenant's business.
D. If Tenant is a corporation and if at any time during the Lease Term
the person or persons who own the voting shares at the time of the
execution of this Lease cease for any reason, including but not
limited to merger, consolidation or other reorganization involving
another corporation, to own a majority of such shares, or if Tenant
is a partnership and if at any time during the Lease Term the
general partner or partners who own the general partnership
interests in the partnership at the time of the execution of this
Lease, cease for any reason to own a majority of such interests
(except as the result of transfers by gift, bequest or inheritance
to or for the benefit of members of the immediate family of such
original shareholder(s) or partner(s)), such an event shall be
deemed to be a Transfer. The preceding sentence shall not apply
whenever Tenant is a corporation the outstanding stock of which is
listed on a recognized security exchange, or if at least eighty per
cent (80%) of its voting stock is owned by another corporation, the
voting stock of which is so listed. Notwithstanding the foregoing,
any change in control resulting from a transfer of stock among
shareholders or immediate family members existing as of the date of
this Lease shall not require Landlord's prior consent, provided
Landlord shall be notified of such change in control thirty (30)
days following the effective date of such change in control. In no
event shall may Transfer release or relieve Tenant from any of its
obligations under this Lease.
E. Any Transfer consented to by Landlord in accordance with this
Article XIII shall be only for the Permitted Use and for no other
purpose, and in no event shall any Transfer release or relieve
Tenant or any Guarantors from any obligations under this Lease.
XIV. Liens. Tenant will not permit any mechanic's liens or other liens to be
placed upon the Premises or Tenant's leasehold interest therein, the
Building, or the real estate associated therewith. Landlord's title to the
Building and Property is and always shall be paramount to the interest of
Tenant, and nothing herein contained shall empower Tenant to do any act
that can, shall or may encumber Landlord's title. In the event any such
lien does attach, Tenant shall, within ten (10) days of notice of the
filing of said lien, either discharge or bond over such lien to
satisfaction of Landlord and Landlord's Mortgage (as hereinafter defined),
and in such a manner as to stay the enforcement or foreclosure of such
lien. If Tenant shall fail to so discharge or bond over such lien, then,
in addition to any other right or remedy of Landlord, Landlord may, but
shall not be obligated to, discharge the same. Any amount paid by Landlord
for any of the aforesaid purposes, including reasonable attorneys fees (if
and to the extent permitted by law) shall be paid by Tenant to Landlord on
demand as additional Rent. Notwithstanding the foregoing, if it is not
reasonably possible to bond over a lien placed on property in Stamford,
Connecticut within the ten (10) day period provided above, Tenant shall
have such longer period of time as is reasonably necessary to secure such
bond, provided that Tenant commences the necessary proceedings within five
(5) days after Tenant receives notice of the filing of such lien. If
Landlord is notified that it is in default of its Mortgage due to a lien
filed against the Building or Premises in connection with work performed
by or on behalf of Tenant and Tenant, within three (3) days after notice
from Landlord does not discharge or bond over such lien, Landlord shall
have the option to bond over such lien on Tenant's behalf and at Tenant's
sole cost and expense.
XV. Indemnity and Waiver of Claims.
A. Except for losses, liabilities, obligations, damages, penalties,
claims, costs, charges, and expenses resulting from the negligence
of Landlord and/or its agents, employees or contractors, and subject
to the provisions of Article XVII hereof, Tenant shall indemnify,
defend and hold Landlord, its principals, beneficiaries, partners,
officers, directors, agents, employees and any Mortgagee(s)
(collectively the "Landlord Related Parties") harmless against and
from all liabilities, obligations, damages, penalties, claims,
costs, charges and expenses, including, without limitation,
reasonable architects and attorneys fees (if and to the extent
permitted by law), which may be imposed upon, incurred by, or
asserted against Landlord or any of the Landlord Related Parties and
arising, directly or indirectly, out of or in connection with the
use, occupancy or maintenance of the Premises by, through or under
Tenant, and (without limiting the generality of the foregoing) any
of the following: (1) any work or thing done in, on or about the
Premises or any part thereof by Tenant or any of its transferees,
agents, servants, contractors, employees, customers, licensees or
invitees; (2) any use, non-use, possession, occupation, condition,
operation or maintenance of the Premises or any part thereof; (3)
any act or omission of Tenant or any of its transferees, agents,
servants, contractors, employees, customers, licensees or invitees,
regardless of whether such act or omission occurred within the
Premises; (4) any injury or damage to any person or property
occurring in, on or about the Premises or any part thereof; or (5)
any failure on the part of Tenant to perform or comply with any of
the covenants, agreements, terms or conditions contained in this
Lease with which Tenant must comply or perform. In case any action
or proceeding is brought against Landlord or any of the Landlord
Related Parties by reason of any of the foregoing, Tenant shall, at
Tenant's sole cost and expense, resist and defend such action or
proceeding with counsel approved by Landlord or, at Landlord's
option, reimburse Landlord for the cost of any counsel retained
directly by Landlord to defend and resist such action or proceeding.
B. Landlord and the Landlord Related Parties shall not be liable for,
and Tenant waives, all claims for loss or damage to Tenant's
business or damage to person or property sustained by Tenant or any
person claiming by, through or under Tenant (including Tenant's
employees) resulting from any accident or occurrence in, on or about
the Premises, the Building or the Property, including, without
limitation, claims for loss, theft or damage resulting from (1) the
Premises, Building, or Property, or any equipment or appurtenances
becoming out of repair, (2) wind or weather, (3) any defect in or
failure to operate, for whatever reason, any sprinkler, heating or
air-conditioning equipment, electric wiring, gas, water or steam
pipes, (4) broken glass, (5) the backing up of any sewer pipe or
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downspout, (6) the bursting, leaking or running of any tank, water
closet, drain or other pipe, (7) the escape of steam or water, (8)
water, snow or ice being upon or coming through the roof, skylight,
stairs, doorways, windows, walks or any other place upon or near the
Building, (9) the falling of any fixture, plaster, tile or other
material, (10) any act, omission or negligence of other tenants,
licensees or any other persons or occupants of the Building or of
adjoining or contiguous buildings, of owners of adjacent or
contiguous property or the public, or by construction of any
private, public or quasi-public work, or (11) any other cause of any
nature except, as to items (1)-(9), where such loss or damage is due
to Landlord's willful failure to make repairs required to be made
pursuant to other provisions of this Lease, after the expiration of
a reasonable time after written notice to Landlord of the need for
such repairs. To the maximum extent permitted by law, Tenant agrees
to use and occupy the Premises, and to use such other portions of
the Building as Tenant is herein given the right to use, at Tenant's
own risk.
XVI. Tenant's Insurance.
A. At all times commencing on and after the earlier of the Commencement
Date and the date Tenant or its agents, employees or contractors
enters the Premises for any purpose, Tenant shall carry and
maintain, at its sole cost and expense:
1. Commercial General Liability Insurance with a Broad Form
General Liability Endoresement applicable to the Premises and
its appurtenances providing, on an occurrence basis, a minimum
combined single limit of Two Million Dollars ($2,000,000).
2. All Risks of Physical Loss Insurance written at replacement
cost value and with a replacement cost endorsement covering
all of Tenant's Property in the Premises.
3. Workers' Compensation Insurance as required by the state in
which the Premises is located and in amounts as may be
required by applicable statute, and Employers Liability
Coverage of One Million Dollars ($1,000,000) per occurrence.
4. Whenever good business practice, in Landlord's reasonable
judgment, indicates the need of additional insurance coverage
or different types of insurance in connection with the
Premises or Tenant's use and occupancy thereof, Tenant shall,
upon request, obtain such insurance at Tenant's expense and
provide Landlord with evidence thereof.
B. Except for items for which Landlord is responsible under the Work
Letter Agreement, before any repairs, alterations, additions,
improvements, or construction are undertaken by or on behalf of
Tenant, Tenant shall carry and maintain, at its expense, or Tenant
shall require any contractor performing work on the Premises to
carry and maintain, at no expense to Landlord, in addition to
Workers' Compensation insurance as required by the jurisdiction in
which the building is located, All Risk Builder's Risk Insurance in
the amount of the replacement cost of any alterations, additions or
improvements (or such other amount reasonably required by Landlord)
and Commercial General Liability Insurance (including, without
limitation, Contractor's Liability coverage, Contractual Liability
coverage, Completed Operations coverage, a Broad Form Property
Damage coverage and Contractor's Protective liability) written on an
occurrence basis with a minimum combined single limit of Two Million
Dollars ($2,000,000); such limit may be accomplished by means of an
umbrella policy.
C. Any company writing any insurance which Tenant is required to
maintain or cause to be maintained pursuant to the terms of this
Lease ( all such insurance as well as any other insurance pertaining
to the Premises or the operation of Tenant's business therein being
referred to as "Tenant's Insurance"), as well as the form of such
insurance, shall at all times be subject to the Landlord's
reasonable approval, and each such insurance company shall have an
A.M. Best rating of "A7" or better and shall be licensed and
qualified to do business in the state in which the Premises are
located. All policies evidencing Tenant's Insurance (except for
Workers Compensation) shall specify Tenant and the "owner[s] of the
Building and its (or their) respective principals, beneficiaries,
partners, officers, directors, employees, agents, and mortgagee[s]"
(and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds. Provided that the
coverage afforded Landlord and any designees of Landlord shall not
be reduced or otherwise adversely affected, all of Tenant's
Insurance may be carried under a blanket policy covering the
Premises and any other of Tenant's locations. All policies of
Tenant's Insurance shall contain endorsements that the insurer(s)
will give to Landlord and its designees at least thirty (30) days
advance written notice of any change, cancellation, termination or
lapse of said insurance. Tenant shall be solely responsible for
payment of all premiums for all of Tenant's Insurance. Tenant shall
deliver to Landlord at least fifteen (15) days prior to the time
Tenant's Insurance is first required to be carried by Tenant, and
upon renewals at least fifteen (15) days prior to the expiration of
any such insurance coverage, a certificate of insurance of all
policies procured by Tenant in compliance with its obligations under
this Lease. The limits of Tenant's Insurance shall in no event limit
Tenant's liability under this Lease.
D. Tenant shall not do or fail to do anything in, upon or about the
Premises which will (1) violate the terms of any of Landlord's
insurance policies, (2) prevent Landlord from obtaining policies of
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insurance acceptable to Landlord or any Mortgagees, or (3) result in
an increase in the rate of any insurance on the Premises, the
Building, ant other property of Landlord or of others within the
Building. In the event of the occurrence of any of the events set
forth in this Section, Tenant shall pay Landlord upon demand, as
additional Rent, the cost of the amount of any increase in any such
insurance premium. If Tenant fails to obtain the insurance coverage
required by this Lease, Landlord may, at its option, obtain such
insurance for Tenant, and Tenant shall pay, as additional Rent, the
cost of all premiums thereon and all of Landlord's costs associated
therewith.
XVII. Subrogation. Notwithstanding anything set forth in this Lease to the
contrary, Landlord and Tenant do hereby waive any and all right of
recovery, claim, action, or cause of action against the other, their
respective principals, beneficiaries, partners, officers, directors,
agents, and employees, and, with respect to Landlord, its Mortgagee(s),
for any loss or damage that may occur to Landlord or Tenant or any party
claiming by, through or under Landlord or Tenant, as the case may be, with
respect to their respective property, the Building, the Property or the
Premises or any addition or improvements thereto, or any contents therein,
by reason of fire, the elements or any other cause, regardless of cause or
origin, including the negligence of Landlord or Tenant, or their
respective principals, beneficiaries, partners, officers, directors,
agents and employees and, with respect to Landlord, its Mortgagee(s),
which loss or damage is (or would have been, had the insurance required by
this Lease been carried) covered by insurance. Since this mutual waiver
will preclude the assignment of any such claim by subrogation (or
otherwise) to an insurance company (or any other person), Landlord and
Tenant each agree to give each insurance company which has issued, or in
the future may issue, its policies of fire, extended coverage or material
damage insurance, written notice of the terms of this mutual waiver, and
to have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of any of the coverage provided by such insurance
policies by reason of such mutual waiver. For the purpose of the foregoing
waiver, the amount of any deductible applicable to any loss or damage
shall be deemed covered by, and recoverable by the insured under the
insurance policy to which such deductible relates. In the event that
Tenant is permitted to and self-insures any risk which would have been
covered by the insurance required to be carried by Tenant pursuant to
Article XVI of the Lease, or if Tenant fails to carry any insurance
required to be carried by Tenant pursuant to Article XVI of this Lease,
then all loss or damage to Tenant, its leasehold interest, its business,
its property, the Premises or any additions or improvements thereto or
contents thereof shall be deemed covered by and recoverable by Tenant
under valid and collectible policies of insurance.
XVIII.Landlord's Insurance. Landlord shall maintain property insurance on the
Building in such amounts as Landlord reasonably elects. The cost of such
insurance shall be included as a part of the Basic Costs, and payments for
losses thereunder shall be made solely to Landlord or the Mortgagees of
Landlord as their interests shall appear.
XIX. Casualty Damage. If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged that substantial
alteration or reconstruction of the Building shall, in Landlord's sole
opinion, be required (whether or not the Premises shall have been damaged
by such casualty) or in the event the Premises have been damaged and there
is less than two (2) years of the Lease Term remaining on the date of such
casualty or in the event any Mortgagee should require that the insurance
proceeds payable as a result of a casualty be applied to the payment of
the mortgage debt or in the event of any material uninsured loss to the
Building, Landlord may, at its option, terminate this Lease by notifying
Tenant in writing of such termination within ninety (90) days after the
date of such casualty. Such termination shall be effective as of the date
of fire or casualty, with respect to any portion of the Premises that was
rendered untenantable, and the date specified in Landlord's notice, with
respect to any portion of the Premises that remained tenantable.
Notwithstanding anything in this Article XIX to the contrary, if all or
any portion of the Premises shall be made untenantable by a fire or other
casualty, Landlord shall with reasonable promptness, cause an architect or
general contractor selected by Landlord to estimate the amount of time
required to substantially complete repair and restoration of the Premises
and make the Premises tenantable again, using standard working methods
(the "Completion Estimate"). If the Completion Estimate indicates that the
Premises cannot be made tenantable within nine (9) months from the date
the repair and restoration is started, either party shall have the right
to terminate this Lease by giving written notice to the other of such
election within ten (10) days after its receipt of the completion
Estimate. If the Completion Estimate indicates that the Premises can be
made tenantable within nine (9) months from the date the repair and
restoration is started and Landlord has not otherwise exercised its right
to terminate the Lease pursuant to the terms hereof, or if the Completion
Estimate indicates that the Premises cannot be made tenantable within nine
(9) months but neither party terminates this Lease pursuant to this
Article XIX, Landlord shall proceed with reasonable promptness to repair
and restore the Premises. Notwithstanding the foregoing, if Landlord does
not substantially complete the repair and restoration of the Premises
within two (2) months after the expiration of the estimated period of time
set forth in the Completion Estimate, which period shall be extended to
the extent of any Reconstruction Delays, then Tenant may terminate this
Lease by written notice to Landlord within fifteen (15) days after the
expiration of such period, as the same may be extended. For purposes of
this Lease, the term "Reconstruction Delays" shall mean: (i) any delays
cause by Tenant, and (ii) any delays caused by events of Force Majeure. If
neither Landlord nor Tenant elects to terminate this Lease, Landlord shall
commence and proceed with reasonable diligence to restore the Building
(provided that Landlord shall not be required to restore any unleased
premises in the Building) and the Leasehold Improvements (but excluding
any improvements, alterations or additions made by Tenant in violation of
this Lease) located within the Premises, if any, which Landlord has
insured to substantially the same condition they were in immediately prior
to the happening of the casualty. Notwithstanding the foregoing,
Landlord's obligation to restore the Building, and the Leasehold
Improvements, if any, shall not require Landlord to expend for such repair
and restoration work more than the insurance proceeds actually received by
the Landlord as a result of the casualty. When repairs to the Premises
have been completed by Landlord, Tenant shall complete the restoration or
replacement of all Tenant's Property necessary to permit Tenant's
reoccupancy of the Premises, and Tenant shall present Landlord with
evidence satisfactory to Landlord of Tenant's ability to pay such costs
prior to Landlord's commencement of repair and restoration of the
Premises. Landlord shall not be liable for any inconvenience or annoyance
to Tenant or injury to the business of Tenant resulting in any way from
such damage or the repair thereof, except that, subject to the provisions
of the next sentence, Landlord shall allow Tenant a fair diminution of
Rent on a per diem basis during the time and to the extent the Premises
are untenantable. Notwithstanding anything contained herein to the
contrary, in the event a casualty to fifty percent (50%) or more of the
Premises results in Tenant being unable to operate its business in the
entire Premises (and Tenant actually ceases to operate its business in the
entire Premises) and provided that the casualty is not caused by or
attributable to Tenant, its agents, assignees, concessionaires, employees,
contractors, or invitees, Base Rental and Additional Base Rental for the
entire Premises shall abate during the period of untenantability pursuant
to the terms hereof. Notwithstanding the foregoing, Landlord shall have
the right to perform any work necessary, such as the erection of demising
walls and construction of alternate exits and entrances, to allow Tenant
to operate its business in that portion of the Premises not damaged or
destroyed. If Landlord performs such work and Tenant is reasonably able to
operate its business in the portion of the Premises not damaged or
destroyed, Rent for such space shall cease to abate on the date that such
work by Landlord is substantially complete. If the Premises or any other
portion of the Building is damaged by fire or other casualty resulting
from the fault or negligence of Tenant or any of Tenant's agents,
employees, or contractors, the Rent hereunder shall not be diminished
during any period during which the Premises, or any portion thereof, is
untenantable, and Tenant shall be liable to Landlord for the cost of the
repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds. Landlord and Tenant
hereby waive the provisions of any law from time to time in effect during
the Lease Term relating to the effect upon leases of partial or total
destruction of leased property. Landlord
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and Tenant agree that their respective rights in the event of any damage
to or destruction of the Premises shall be those specifically set forth
herein.
XXI. Condemnation. If (1) the whole or any substantial part of the Premises or
(2) any portion of the Building or Property which would leave the
remainder of the Building unsuitable for use as an office building
comparable to its use on the Commencement Date, shall be taken or
condemned for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private
purchase in lieu thereof, then Landlord may, at its option, terminate this
Lease effective as of the date the physical taking of said Premises or
said portion of the Building or Property shall occur. In the event this
Lease is not terminated, the Rentable Area of the Building, the Rentable
Area of the Premises and Tenant's Pro Rata Share shall be appropriately
adjusted. In addition, Rent for any portion of the Premises so taken or
condemned shall be abated during the unexpired term of this Lease
effective when the physical taking of said portion of the Premises shall
occur. All compensation awarded for any such taking or condemnation, or
sale proceeds in lieu thereof, shall be the property of Landlord, and
Tenant shall have no claim thereto, the same being hereby expressly waived
by Tenant, except for any portions of such award or proceeds which are
specifically allocated by the condemning or purchasing party for the
taking of or damage to trade fixtures of Tenant which Tenant specifically
reserves to itself.
XXII. Events of Default. The following shall be deemed to be events of default
under this Lease:
A. Tenant shall fail to pay when due any Base Rental, Additional Base
Rental, or other Rent under this Lease, and such failure shall
continue for ten (10) days after delivery of notice to Tenant,
(hereinafter sometimes referred to as a "Monetary Default.")
B. Any failure by Tenant (other than a Monetary Default) to comply with
any term, provision, or covenant of this Lease, which failure is not
cured within twenty (20) days after delivery to Tenant of notice of
the occurrence of such failure, (or such longer period of time as
may be reasonably necessary to cure (not to exceed 60 days),
provided that Tenant commences to cure such default within fifteen
(15) days after notice from Landlord and, from time to time upon
request of Landlord, furnishes Landlord with evidence that
demonstrates, in Landlord's reasonable judgment, that Tenant is
diligently pursuing a course that will remedy such failure) provided
that if any such failure creates a hazardous condition, such failure
must be cured immediately.
C. Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall commit an act of bankruptcy or shall make an
assignment for the benefit of creditors, or Tenant shall admit in
writing its inability to pay its debts as they become due.
D. Tenant shall file a petition under any section or chapter of the
United States Bankruptcy Code, as amended, pertaining to bankruptcy,
or under any similar law or statute of the United States or any
State thereof, or Tenant shall be adjudged bankrupt or insolvent in
proceedings filed against Tenant thereunder; or a petition or answer
proposing the adjudication of Tenant as a debtor or its
reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such
petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof.
E. A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant or of the Premises or for any of
Tenant's property located thereon in any proceeding brought by
Tenant or any such receiver or trustee shall be appointed in any
proceeding brought against Tenant and shall not be discharged within
sixty (60) days after such appointment or Tenant shall consent to or
acquiesce in such appointment.
F. The leasehold estate hereunder shall be taken on execution or other
process of law or equity in any action against Tenant.
G. Tenant shall abandon or vacate any substantial portion of the
Premises without the prior written permission of Landlord.
H. (omitted)
I. The liquidation, termination, dissolution, forfeiture of right to do
business or death of Tenant.
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J. Tenant shall be in default beyond any notice and cure period under
any other lease with Landlord.
XXIII. Remedies
A. Upon the occurrence of any event or events of default under this
Lease, whether enumerated in Article XXII or not, Landlord shall
have the option to pursue any one or more of the following remedies
without any notice (except as expressly prescribed herein) or demand
whatsoever (and without limiting the generality of the foregoing):
1. Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord. If Tenant fails to
surrender the Premises upon termination of the Lease
hereunder, Landlord may without prejudice to any other remedy
which it may have, enter upont and take possession of the
Premises and expel or remove Tenant and any other person who
may be occupying said Premises, or any part thereof, by force,
if necessary, without being liable for prosecution or any
claim of damages therefor, and Tenant hereby agrees to pay to
Landlord on demand the amount of all loss and damage which
Landlord may suffer by reason of such termination, whether
through inability to relet the Premises on satisfactory terms
or otherwise, specifically including but not limited to all
Costs of Reletting (hereinafter defined) and any deficiency
that may arise by reason of any reletting or failure to relet.
Landlord agrees to use reasonable efforts to mitigate damages,
provided that such reasonable efforts shall not require
Landlord to relet the Premises in preference to any other
space in the Building or to relet the Premises in preference
to any other space in the Building or to relet the Premises to
any party Landlord could reasonably reject as a transferee
pursuant to Article XIII hereof.
2. Enter upon and take possession of the Premises and expel or
remove Tenant or any other person who may be occupying said
Premises, or any part thereof, by force, if necessary, without
having any civil or criminal liability therefor and without
terminating this Lease. Landlord may (but shall be under no
obligation to) relet the Premises or any part thereof for the
account of Tenant, in the name of Tenant or Landlord or
otherwise, without notice to Tenant for such term or terms
which may be greater or less than the period which would
otherwise have constituted the balance of the Lease Term and
on such conditions (which may include concessions, free rent,
and alterations of the Premises) and for such uses as Landlord
in its absolute discretion may determine, and Landlord may
collect and receive any rents payable by reason of such
reletting. Tenant agrees to pay Landlord on demand all Costs
of Reletting and any deficiency that may arise by reason of
such reletting or failure to relet. Landlord shall not be
responsible or liable for any failure to relet the Premises or
any part thereof or for any failure to collect any Rent due
upon any such reletting. No such re-entry or taking of
possession of the Premises by Landlord shall be construed as
an election on Landlord's part to terminate this Lease unless
a written notice of such termination is given to Tenant.
3. Enter upon the Premises by force if necessary without having
any civil or criminal liablility therefor, and do whatever
Tenant is obligated to do under the terms of this Lease, and
Tenant agrees to reimburse Landlord on demand for any expense
which Landlord may incur in thus affecting compliance with
Tenant's obligations under this Lease together with interest
at the lesser of a per annum rate equal to (a) the Maximum
Rate, or (b) the Prime Rate plus five percent (5%), and Tenant
further agrees that Landlord shall not be liable for any
damages resulting to Tenant from such action, whether caused
by the negligence of Landlord or otherwise.
4. In order to regain possession of the Premises and to deny
Tenant access thereto in any instance in which Landlord has
terminated this Lease or Tenant's right to possession, or to
limit access to the Premises in accordance with local law in
the event of a default by Tenant, Landlord or its agent may,
at the expense and liability of the Tenant, alter or change
any or all locks or other security devices controlling access
to the Premises without posting or giving notice of any kind
to Tenant. Landlord shall have no obligation to provide Tenant
a key or grant Tenant access to the Premises so long as Tenant
is in default under this Lease. Tenant shall not be entitled
to recover possession of the Premises, terminate this Lease,
ro recover any actual incidental, consequential, punitive,
statutory or other damages or award of attorneys fees, by
reason of Landlord's alteration or change of any lock or other
security device and the resulting exclusion from the Premises
of the Tenant or Tenant's agents, servants, employees,
customers, licensees, invitees or any other persons from the
Premises. Landlord may, without notice, remove and either
dispose of or store, at Tenant's expense, any property
belonging to Tenant that remains in the Premises after
Landlord has regained possession thereof.
5. Terminate this Lease, in which event, Tenant shall immediately
surrender the Premises to Landlord and pay to Landlord the sum
of (a) all Rent accrued hereunder through the date of
termination, and, upon Landlord's determination thereof, and
(b) an amount equal to (i) the total Rent that Tenant would
have been required to pay for the remainder of the lease Term
discounted to present value at the prime rate then in effect,
minus (ii) the then present fair rental value of the Premises
for the remainder of the Lease Term, similarly discounted ,
after deducting all anticipated Costs of Reletting, subject
only to manifest error.
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B. For purposes of this Lease, the term "Costs of Reletting" shall mean
all reasonable costs and expense incurred by Landlord in connection
with the reletting of the Premises, including without limitation,
Rent loss by Landlord in connection with the reletting of the
Premises, the cost of cleaning, renovation, repairs, decoration and
alteration of the Premises for a enw tenant or tenants,
advertisement, marketing, brokerage and legal fees (if and to the
extent permitted by law), the cost of cleaning, renovation, repairs,
decoration and alteration of the Premises for a new tenant or
tenants, advertisement, marketing, brokerage and legal fees (if and
to the extent permitted by law), the cost of protecting or caring
for the Premises while vacant, the coast of removing and storing any
property located on the premises, any increase in insurance premiums
caused by the vacancy of the Premises and any other out-of-pocket
expenses incurred by Landlord including tenant inducements such as
the cost of moving the new tenant or tenants and the cost of
assuming any portion of the existing lease(s) of the new tenant(s).
C. Except as otherwise herein provided, no repossession or re-entering
on the Premises or any part thereof pursuant to Article XXIII hereof
or otherwise shall relieve Tenant or any Guarantor of its
liabilities and obligations hereunder, all of which shall survive
such repossession or re-entering. Notwithstanding any such
repossession or re-entering by reason of the occurrence of an event
of default, Tenant will pay to Landlord the Rent required to be paid
by Tenant pursuant to this Lease.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any
other right or remedy given hereunder now or hereafter existing by
agreement, applicable law or in equity. In addition to other
remedies provided in this Lease, Landlord shall be entitled to the
extent permitted by applicable law, to injunctive relief, or to a
decree compelling performance of any of the covenants, agreements,
conditions or provision of this Lease, or to any other remedy
allowed to Landlord at law or in equity. Forbearance by Landlord to
enforce one or more of the remedies herein provided upon an event of
default shall not be deemed or construed to constitute a waiver of
such default.
E. This Article XXIII shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the
unenforceability of any portion thereof shall not thereby render
unenforceable any other portion.
XXIV. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR
LANDLORD HEREUNDER) TO TENANT SHALL BE LIMITED TO THE INTEREST OF LANDLORD
IN THE BUILDING, AND TENANT AGREES TO LOOK SOLELY TO LANDLORD'S INTEREST
IN THE BUILDING FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST THE
LANDLORD, IT BEING INTENDED THAT LANDLORD SHALL NOT BE PERSONALLY LIABLE
FOR ANY JUDGMENT OR DEFICIENCY. LANDLORD REPRESENTS THAT IT HOLDS FEE
SIMPLE TITLE TO THE BUILDING. TENANT HEREBY COVENANTS THAT, PRIOR TO THE
FILING OF ANY SUIT FOR AN ALLEGED DEFAULT BY LANDLORD HEREUNDER, IT SHALL
GIVE LANDLORD AND ALL MORTGAGEES WHOM TENANT HAS BEEN NOTIFIED HOLD
MORTGAGES OR DEED OF TRUST LIENS ON THE PROPERTY, BUILDING OR PREMISES
NOTICE AND REASONABLE TIME TO CURE SUCH ALLEGED DEFAULT BY LANDLORD. IN
ADDITION, TENANT ACKNOWLEDGES THAT EQUITY OFFICE PROPERTIES INC., IS
ACTING SOLELY IN ITS CAPACITY AS AGENT FOR LANDLORD AND SHALL NOT BE
LIABLE FOR ANY OBLIGATIONS, LIABILITIES, LOSSES, OR DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THIS LEASE, ALL OF WHICH ARE EXPRESSLY WAIVED BY
TENANT.
XXV. No Waiver. Failure of Landlord or Tenant to declare any default
immediately upon its occurrence, or delay in taking any action in
connection with an event of default shall not constitute a waiver of such
default, nor shall it constitute an estoppel, but Landlord or Tenant, as
the case may be, shall have the right to declare the default at any time
and take such action as is lawful or authorized under this Lease. Failure
by Landlord or Tenant to enforce its rights with respect to any one
default shall not constitute a waiver of its rights with respect to any
subsequent default. Receipt by Landlord of Tenant's keys to the Premises
shall not contitute an acceptance or surrender of the Premises.
XXVI. Event of Bankruptcy. In addition to, and in no way limiting the other
remedies set forth herein, Landlord and Tenant agree that if Tenant ever
becomes the subject of a voluntary or involuntary bankruptcy,
reorganization, composition, or other similar type proceeding under the
federal bankruptcy laws, as now enacted or hereinafter amended, then:
A. "Adequate protection" of Landlord's interest in the Premises
pursuant to the provisions of Section 361 and 363 (or their
successor sections) of the Bankruptcy Code, 11 U.S.C. Section 101 et
seq., (such Bankruptcy Code as amended from time to time being
herein referred to as the "Bankruptcy Code"), prior to assumption
and/or assignment of the Lease by Tenant shall include, but not be
limited to all (or any part) of the following:
1. the continued payment by Tenant of the Base Rental and all
other Rent due and owing hereunder and the performance of all
other covenants and obligations hereunder by Tenant;
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2. the hiring of security guards to protect the Premises if
Tenant abandons and/or ceases operations; such obligation of
Tenant only to be effective so long as Tenant remains in
possession and control of the Premises to the exclusion of
Landlord;
3. the furnishing of an additional/new security deposit by Tenant
in the amount of three (3) times the then-current monthly Base
Rental.
B. "Adequate assurance of future performance" by Tenant and/or any
assignee of Tenant pursuant to Bankruptcy Code Section 365 will
include (but not be limited to) payment of an additional/new
security deposit in the amount of three (3) times the then-current
Base Rental payable hereunder.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed without further
act or deed to have assumed all of the obligations of tenant arising
under this Lease on and after the effective date of such assignment.
Any such assignee shall, upon demand by Landlord, execute and
deliver to Landlord an instrument confirming such assumption of
liability.
D. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of the Landlord under this Lease,
whether or not expressly denominated as "Rent", shall constitute
"rent" for the purposes of Section 502(b) (6) of the Bankruptcy
Code. Landlord shall be entitled to 50% of any profits if any in
accordance with the provisions of Section XIIC hereof.
E. If Tenant assumes this Lease and proposes to assign the same
pursuant to the provision s of the Bankruptcy Code to any person or
entity who shall have made a bona fide offer to accept an assignment
of this Lease on terms acceptable to the Tenant, then notice of such
proposed offer/assignment, setting forth (1) the name and address of
such person or entity, (2)all of the terms and conditions of such
offer, and (3) the adequate assurance to be provided Landlord to
assure such person's or entity's future performance under the Lease,
shall be given to Landlord by Tenant no later than twenty (20) days
after receipt by Tenant, but in any event no later than ten (10)
days prior to the date that Tenant shall make application to a court
of competent jurisdiction for authority and approval to enter into
such assumption and assignment, and Landlord shall thereupon have
the prior right and option, to be exercised by notice to Tenant
given at any time prior to the effective date of such proposed
assignment, to accept an assignment of this Lease upon the same
terms and conditions and for the same consideration, if any, as the
bona fide offer made by such persons or entity, less any brokerage
commission which may be payable out of the consideration to be paid
by such person for the assignment of this Lease.
G. To the extent permitted by law, Landlord and Tenant agree that this
Lease is a contract under which applicable law excuses Landlord from
accepting performance from (or rendering performance to) any person
or entity other than Tenant within the meaning of Sections 365(c)
and 365(3) (2) of the Bankruptcy Code.
XXVII. Quiet Enjoyment. Tenant shall, and may peacefully have, hold, and enjoy
the Premises, subject to the other terms of this Lease (including, without
limitation, Article XXX hereof), provided that Tenant pays the Rent herein
recited to be paid by Tenant and performs al of Tenant's covenants and
agreements herein contained. This covenant and any and all other covenants
of Landlord shall be binding upon Landlord and its successors only during
its or their respective periods of ownership of the Landlord's interest
hereunder.
XXVIII. Relocation No sooner than twenty-four(24) months after the Commencement
Day, Landlord, at its expense, shall be entitled to cause Tenant to
relocate from the Premises to comparable space containing approximately
the same Rentable Area as the Premises (the "Relocation Space") within the
building or adjacent buildings within the same project at any time upon
one hundred twenty (120) days prior written notice to Tenant. For the
purposes hereof comparable Premises shall mean having the same or better
quality finishes and installation of the Premises. In addition, in order
for the Relocation Space to be considered comparable to the Premises,
Landlord must provide Tenant with expansion rights that are comparable to
the expansion rights, if any, that are in effect on the day Landlord
provides Tenant with a notice of relocation. Such a relocation shall not
affect this Lease except that from and after the date of such relocation
in the Base Rental for the Relocation Space per annum on a per square foot
of Rentable Area basis shall be the same as the Base Rental per annum
immediately prior to such relocation for the original Premises on per
square foot of Rentable Area basis, provided that the Base Rental and
Additional Base Rental for the Relocation Space shall in no event exceed
the Base Rental and Additional Base Rental for the Premises. Landlord
agrees to reimburse Tenant (or, at Tenant's option to pay Tenant's
contractors Directly) for all reasonable costs actually incurred in
connection with the Relocation, including the cost of reprinting existing
stationary and business cards, moving , telephones, graphics, moving and
installation of computers, and similar items of expense. Notwithstanding
anything herein to the contrary in no event shall the Relocation Space
contain less square footage than the Premises. Tenant shall not be
required to move into the Relocation Space prior to the date the
Relocation Space is ready for occupancy.
XXIX Holding Over. In the event of holding over by Tenant after expiration or
other termination of this Lease or in the event Tenant continues to occupy
the Premises after the termination of Tenant's right of possession
pursuant to Articles XXII and XXIII hereof, occupancy of the Premises
subsequent to such termination or expiration shall be that of a tenancy at
sufferance and in no event for month-to-month or year-to-year, but Tenant
shall, throughout the entire holdover period, pay rent (on a per month
basis without reduction for any partial months during any such holdover)
equal to twice the sum of the Base
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Rental and Additional Base Rental due of the period immediately preceding
such holding over, provided that in no event shall Base Rental and
Additional Base Rental during the holdover period be less than the fair
market rental for the Premises. No holding over by Tenant or payments of
money by Tenant ot Landlord after the expiration of the term of this Lease
shall be construed to extend the Lease Term of prevent Landlord from
recovery of immediate possession of the Premises by summary proceedings or
otherwise. Tenant shall be liable to Landlord for all damage, including
any consequential damage, which Landlord may suffer by reason of any
holding over by Tenant, and Tenant shall indemnify Landlord against any
and all claims made by any other tenant or prospective tenant against
Landlord for delay by Landlord in delivering possession of the Premises to
such other tenant or prospective tenant. Notwithstanding the foregoing,
Tenant shall not be liable for consequential damages unless (1) Landlord,
after the expiration of this Lease, notifies Tenant that it has entered
into a lease for the Premises or has received a bona fide offer to lease
the Premises, and (2) Tenant fails to vacate the Premises within thirty
(30) days after the alter of the (I) the date of Landlord's notice or (ii)
the expiration of this Lease Term.
XXX. Subordination to Mortgages. Tenant accepts this lease subject and
subordinate to any mortgage, deed of trust, ground lease or other lien
presently existing or hereafter arising upon the Premises, or upon the
Building and/or the Property and to any renewals, modifications,
refinancings and extensions thereof (any such mortgage, deed of trust,
lease or other lien being hereinafter referred to as a "Mortgage", and the
person or entity having the benefit of same being referred to hereinafter
as a "Mortgagee"), but Tenant agrees that any such Mortgagee shall have
the right at any time to subordinate such Mortgage to this Lease on such
terms and subject to such conditions as such Mortgagee may deem
appropriate in its discretion. This clause shall be self-operative and no
further instrument of subordination shall be required. However, Landlord
is hereby irrevocably vested with full power and authority to subordinate
this Lease to any Mortgage, and Tenant agrees upon demand to execute such
further instruments subordinating this Lease, acknowledging the
subordination of this lease or attorning to the holder of any such
Mortgage as Landlord may request. Landlord will use reasonable efforts to
obtain a non-disturbance, subordination and attornment agreement from
landlord's then current mortgagee on such mortgagee's then current
standard form of agreement. "Reasonable efforts" of Landlord shall not
require Landlord to incur any cost, expense or liability to obtain such
agreement, it being agreed that Tenant shall be responsible for any fee or
review costs charged by the mortgagee. Upon request of Landlord, Tenant
will execute the mortgagees form of nondisturbance, subordination and
attornment agreement and return the same to Landlord for execution by the
mortgagee. Landlord's failure to obtain a non-disturbance, subordination
and attornment agreement for Tenant shall have no effect on the rights,
obligations and liabilities of Landlord and Tenant or be considered to be
a default by Landlord hereunder. The terms of this Lease are subject to
approval by the Landlord's existing lender(s) and any lender(s) who , at
the time of the execution of this Lease, have committed or are considering
committing to Landlord to make a loan secured by all or any portion of the
Property, and such approval is a condition precedent to Landlord's
obligations hereunder. In the event that Tenant should fail to execute any
subordination or other agreement required by this Article promptly as
requested, Tenant hereby irrevocably constitutes Landlord as its
attorney-in-fact to execute such instrument in Tenant's name, place and
stead, it being agreed that such power is one coupled with an interest in
landlord and is accordingly irrevocable. If any person shall succeed to
all or part of Landlord's interests in the Premises whether by purchase,
foreclosure, deed in lieu of foreclosure, power of sale, termination of
lease or otherwise, and if and as so requested or required by such
successor-in-interest, Tenant shall, without charge, attorn to such
successor-in-interest. Tenant agrees that it will from time to time upon
request by Landlord and, within five (5) days of the date of such request,
execute and deliver to such persons as Landlord shall request an estoppel
certificate or other similar statement in recordable form certifying that
this lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in faull force and effect as so
modified), stating the dates to which Rent and other charges payable under
this lease have been paid, stating that landlord is not in default
hereunder (or if Tenant a default stating the nature of such alleged
default) and further stating such other matter as Landlord shall
reasonably require.
XXXI. Attorneys Fees. In the event that Landlord should retain counsel and/or
institute any suit against Tenant for violation of or to enforce any of
the covenants or conditions of this Lease, or should Tenant institute any
suit against Landlord for violation of any of the covenants or conditions
of this Lease, or should either party intervene in any suit in which the
other is a party to enforce or protect its interest or rights hereunder,
the prevailing party in any such suit shall be entitled to all of its
costs, expenses and reasonable fees of its attorney(s) (if and to the
extent permitted by law) in connection therewith.
XXXII. Notice. Whenever any demand, request, approval, consent or notice
("Notice") shall or may be given to either of the parties by the other,
each such Notice shall be in writing and shall be sent by registered or
certified mail with return receipt requested, or sent by overnight courier
service (such as Federal Express) at the respective addresses of the
parties for notices as set forth in Section I .A. 6 of this Lease,
provided that if Tenant has vacated the Premises or is in default of this
Lease Landlord may serve Notice by any manner permited by Law. Any Notice
under this Lease delivered by registered or certified mail shall be deemed
to have been given and effective on the earlier of (a) the third day
following the day on which the same shall have been mailed with sufficient
postage prepaid or (b) the delivery date indicated on the return receipt.
Notice sent by overnight courier service shall be deemed given and
effective upon the day after such notice is delivered to or picked up by
the overnight courier service. Either party may, at any time, change its
Notice Address by giving the other party Notice stating the change and
setting forth the new address.
XXXIII. Landlord's Lien. In addition to any statutory lien for rent in
Landlord's favor, Landlord (the secured party for purposes hereof) shall
have and Tenant (the debtor for purposes hereof) hereby grants to
Landlord, an express contract lien and a continuing security interest to
secure the payment of all Rent due hereunder from Tenant, upon all goods,
wares, equipment, fixtures, furniture, inventory owned by Tenant, (and any
transferees or other occupants of the Premises) presently or hereafter
situated on the Premises and upon all proceedsof any insurance which may
accrue to Tenant by reason of damage or destruction of any such property.
In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies provided herein or by law, all rights and
remedies under the Uniform Commercial Code of the state in which the
Premises is located, including without limitation the right to sell the
property described in this paragraph at public or private sale upon ten
(10) days notice to Tenant, which notice Tenant hereby agrees is
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adequate and reasonable. Tenant hereby agrees to execute such other
instruments necessary or desirable in landlord's discretion to perfect the
security interest hereby created. Any statutory lien for rent is not
hereby waived, the express contractual lien herein granted being in
addition and supplementary thereto. Landlord and Tenant agree that this
Lease and the security interest granted herein serve as a financing
statement and a copy of photographic or other reproduction of this
Paragraph of this Lease may be filed of record by Landlord and have the
same force and effect as the original. Tenant warrants and represents
that the collateral subject to the security interest granted herein is not
purchased or used by Tenant for personal, family, or household purposes.
Tenant further warrants and represents to Landlord that the lien granted
herein constitutes a first and superior lien and that Tenant will not
allow the placing of any other lien upon any of the property described in
this paragraph without the prior written consent of Landlord.
Notwithstanding the foregoing, provided Tenant is not in default
hereunder, Landlord agrees to subordinate its security interest as
described in this Article XXXIII to Tenant's lenders, ("Lender") if any
requiring a priority position under the following circumstances:
(a) Lender is financing Tenant's purchase of the equipment or inventory
in which Landlord is subordinating its interest (the "Equipment");
(b) Tenant shall furnish Landlord with a complete schedule of the
Equipment financed pursuant to the terms hereof, which schedule
shall be updated in the event of any changes;
(c) Tenant shall be prohibited from financing any non-moveable fixture
or permanent improvement in the event of any changes;
(d) Tenant shall cause any and all Lenders to give Landlord notice of
the date for the removal of Tenant's Equipment;
(e) no public or private sale by an Lender shall be held on the
premises; and
(f) Lender can enter the Premises for purpose of removal of Equipment
only if:
(1) permitted by the agreement between Lender and Tenant; and
(2) Lender agrees to restore or repair all damage to the Premises
caused by such removal; and
(3) Lender gives Landlord notice in the event that any of Tenant's
moveable trade fixtures or Equipment are removed from the
Premises; and
(4) Lender indemnifies Landlord for any claim, liability or
expense (including reasonable attorney's fees arising out of
or in connection with Lender's removal of the Equipment and
activities upon the Premises.
(g) Landlord's subordination shall not be effective unless and until a
separate agreement is entered into between Lender and Landlord
respecting the foregoing items.
The statutory lien for Rent is not hereby waived, the express contractual
lien herein granted being in addition and supplementary thereto.
XXXIV. Excepted Rights This Lease does not grant any rights to light or air over
or about the Building. Landlord specifically excepts and reserves to itself
the use of any roofs, the exterior portions of the Premises, all right to
and the land and improvements below the improved floor level of the
Premises, the improvements and air rights above the Premises and the
improvements and air rights located outside the demising walls of the
Premises, and such areas within the Premises as are required to serve any
occupants of the Building and the right to maintain and repair the same,
and no rights with respect thereto are conferred upon Tenant unless
otherwise specifically provided herein. Landlord further reserves to itself
the right from time to time (A) to change the Building's name or street
address, (B) to install, fix, and maintain signs on the exterior and
interior of the Building, (C) to designate and approve window coverings,
(D) subject to the terms of Article XII hereof, to make any decorations,
alterations, additions, improvements to the Building, or any part thereof
(including the Premises) which Landlord shall desire, or deem necessary for
the safety protection preservation or improvement of the Building, or as
Landlord may be required to do by law, (E) subject to the terms of Article
XII hereof, to have access to the Premises to perform its duties and
obligations and to exercise its rights under this Lease, (F) to retain at
all times and to use pass-keys to all locks within and into the Premises,
(G) to approve the weight, size, or location of heavy equipment, articles
in and about the Premises, (H) to close or restrict access to the Building
at all times other than Normal Business Hours subject to Tenant's right to
admittance at all items under such regulations as landlord may prescribe
from time to time, or to close (temporarily or permanently) any of the
entrances to the Building, (I) to change the arrangement and/or location of
entrances of passageways, doors and doorways, corridors, elevators, stairs,
toilets and public parts of the Building, and (J) to grant to anyone the
exclusive right to conduct any business or undertaking in the Building.
Landlord, in accordance with Arciel XII hereof, shall have the right to
enter the Premises in connection with the exercise of any of the rights
sets forth therein shall not constitute a constructive eviction or entitle
Tenant to any abatement or reduction of Rent by reason thereof.
XXXV. Surrender of Premises At the expiration or earlier termination of this
Lease or Tenants' right of possession hereunder, Tenant shall quit and
surrender the Premises to Landlord, broom clean, and in good order,
condition and repair, ordinary wear and tear and damage by fire or other
casualty excepted. If Tenant fails to remove any of Tenant's Property
within one (1) day after the termination of this Lease or Tenants' right to
possession hereunder, such Tenant's Property, or any portion thereof
designated by Landlord, shall at Landlord's option, and without notice to
Tenant, (A) be conclusively presumed to have been abandoned by Tenant and
title to such items shall pass to Landlord, and/or (B) be removed and/or
stored by Landlord at the risk, cost and expense of Tenant and Landlord
shall in no event be responsible for the value, preservation or safekeeping
thereof. Tenant shall pay Landlord, upon demand, any and all expenses
caused by such removal and all storage charges against such property so
long as the same shall be in the possession of Landlord or under the
control of Landlord.
XXXVI. Miscellaneous.
A. If any term or provision of this Lease, or the application thereof
to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Lease shall be
valid and enforced to the fullest extent permitted by law.
B. Tenant agrees not to record this Lease or any memorandum hereof
without Landlord's prior written consent.
C. This Lease and the rights and obligations of the parties hereto
shall be interpreted, construed, and enforced in accordance with the
laws of the state in which the Building is located.
D. Events of "Force Majeure" shall include strikes, riots, acts of God,
shortages of labor or materials and war. Whenever a period of time
is herein prescribed for the taking of any action by Landlord or
Tenant, as the case may be, other than the payment of Rent or any
other sums due hereunder, such party shall not be liable or
responsible for, and there shall be excluded from the computation of
such period of time, any delays due to events of Force Majeure.
E. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the
Building and Property referred to herein, and in such event and
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upon transfer Landlord shall be released form any further
obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such
obligations.
F. Tenant hereby represents to Landlord that it has dealt directly with
the Broker as a broker in connection with this Lease. Tenant agrees
to indemnify and hold Landlord and the Landlord Related Parties
harmless from all claims of any brokers claiming to have represented
Tenant in connections with this Lease. Landlord agrees to indemnify
and hold Tenant harmless from all claims of any brokers claiming to
have represented Landlord in connection with this Lease. Landlord
shall be responsible for paying a commission to the Broker in
accordance with the terms of a separate agreement entered into
between the Landlord and the Broker.
G. If there is more than one Tenant, or if the Tenant is comprised of
more than one person or entity, the obligations hereunder imposed
upon Tenant shall be joint and several obligations of all such
parties. All notices, payments, and agreements given or made by,
with or to any one of such persons or entities shall be deemed to
have been given or made by, with or to all of them.
H. In the event Tenant is a corporation (including any form of
professional association), partnership (general or limited), or
other form of organization other than an individual, then each
individual executing or attesting this Lease on behalf of Tenant
hereby covenants, warrants and represents (1) that such individual
is duly authorized to execute or attest and deliver this Lease on
behalf of Tenant in accordance with the organizational documents of
Tenant, (2) that this Lease is binding upon Tenant, (3) that Tenant
is duly organized and legally existing in the state of its
organization, and is qualified to do business in the state in which
the Premises is located, (4) that upon request, Tenant will provide
Landlord with true and correct copies of all organizational
documents of Tenant, and any amendments thereto, and (5) that the
execution and delivery of this Lease by Tenant will not result in
any breach of, or constitute a default under any mortgage, deed of
trust, lease, loan, credit agreement, partnership agreement or other
contract or instrument to which Tenant is a party or by which Tenant
may be bound. If Tenant is a corporation, Tenant will, prior to the
Commencement Date, deliver to Landlord a copy of a resolution of
Tenant's board or directors authorizing or ratifying the execution
and delivery of this Lease, which resolution will be duly certified
to Landlord's satisfaction by the secretary or assistant secretary
of Tenant.
I. Tenant acknowledges that the financial capability of Tenant to
perform its obligations hereunder is material to Landlord and that
Landlord would not enter into this Lease but for its belief, based
on its review of Tenant's financial statements, that Tenant is
capable of performing such financial obligations. Tenant hereby
represents, warrants and certifies to Landlord that its financial
statements previously furnished to Landlord were at the time given
true and correct in all material respects and that there have been
no material subsequent changes thereto as of the date of this Lease.
At any time during the Lease Term, Tenant shall provide Landlord
upon ten (10) days prior written notice from Landlord, with a
current financial statement and financial statements of the two (2)
years prior to the current financial statement year. Such statement
shall be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant.
Notwithstanding the foregoing, Landlord shall not request financial
statements more than once in each consecutive two (2) year period
during the Lease Term unless Landlord reasonably believes that there
has been a materially adverse change in Tenant's financial position
since the last financial statement provided to Landlord.
J. This Lease shall create the relationship of Landlord and Tenant
between the parties hereto, and no estate shall pass out of
Landlord. Tenant has only a usufruct, not subject to purchase or
sale, which may not be assigned by Tenant except as expressly
provided in this Lease.
K. This Lease and the covenants and conditions herein contained shall
inure to the benefit of and be binding upon Landlord and Tenant and
their respective permitted successors and assigns.
L. Notwithstanding anything to the contrary contained in this Lease,
the expiration of the Lease Term, whether by lapse of time or
otherwise, shall not relieve Tenant from Tenant's obligations
accruing prior to the expiration of the Lease Term.
M. The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no effect upon the construction or
interpretation of any part hereof.
N. Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only, and the delivery hereof does not constitute an offer to
Tenant or option. This Lease shall not be effective until an
original of this Lease executed by both Landlord and Tenant is
delivered to and accepted by Landlord, and Tenant and this Lease has
been approved by Landlord's Mortgagees, if required.
XXXVII. Entire Agreement. This Lease Agreement, including the following
Exhibits:
Exhibit A - Outline and Location of Premises
Exhibit B-1 - Schedule of Base Rental
Exhibit B-2 - Payment of Basic Costs
Page 17
<PAGE>
Exhibit C - Work Letter Agreement (if required)
Exhibit D - Rules and Regulations
Exhibit E - Additional Terms
Addendum - Addendum
--------- -
--------- -
constitutes the entire agreement between the parties hereto with respect
to the subject matter of this Lease. 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. ALL UNDERSTANDINGS AND
AGREEMENTS HERETOFORE MADE BETWEEN THE PARTIES ARE MERGED IN THIS LEASE
WHICH ALONE FULLY AND COMPLETELY EXPRESSES THE AGREEMENT OF THE PARTIES,
NEITHER PARTY RELYING UPON ANY STATEMENT OR REPRESENTATION NOT EMBODIED IN
THIS LEASE. THIS LEASE MAY BE MODIFIED ONLY BY A WRITTEN AGREEMENT SIGNED
BY LANDLORD AND TENANT. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE ARE
AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILTIY, HABITABILITY,
SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING
OUT OF THIS LEASE, ALL OF WHICH ARE HEREBY WAIVED BY TENANT, AND THAT
THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN
THIS LEASE.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple original counterparts as of the day and year first above written.
ATTEST: LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
BY: Equity Office Properties, Inc.
as agent
___________________________ By:________________________________
Name (print): Name:______________________________
___________________________ Title:_____________________________
Name (print):________________
ATTEST: TENANT: GKN Securities Corp.
_________________________ By: /s/ Carl Goodman
--------------------------------
Name (print)______________ Name: Carl Goodman
-------------------------------
________________________ Title: Chief Financial Officer
------------------------------
Name (print)_____________
Page 18
<PAGE>
EXHIBIT A
OUTLINE AND LOCATION OF PREMISES
This Exhibit is attached to and made a part of the Lease dated __________,
199_ by and between ZML-STAMFORD ATLANTIC FORUM LIMITED PARTNERSHIP,
("Landlord") by its agent Equity Office Properties, Inc. and GKN Securities
Corp. ("Tenant") for space in the Building located at Two Stamford Plaza,
Stamford, CT.
Floor diagram of the 16th floor.
Landlord: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
ATTEST: BY: EQUITY OFFICE PROPERTIES,
INC., as agent
________________________________ By:__________________________________
Name (print):_____________________ Name:________________________________
________________________________ Title:_______________________________
Name (print):_____________________
ATTEST: TENANT:
________________________________ GKN Securities Corp.
Name (print):_____________________ By: /s/ Carl Goodman
----------------------------------
________________________________ Name: Carl Goodman
--------------------------------
Name (print):_____________________ Title: Chief Financial Officer
------------------------------
1
<PAGE>
EXHIBIT B-1
SCHEDULE OF BASE RENTAL
This Exhibit is attached to and made a part of the Lease dated __________,
199_ by and between ZML-STAMFORD ATLANTIC FORUM LIMITED PARTNERSHIP,
("Landlord") by its agent Equity Office Properties, Inc. and GKN Securities
Corp. ("Tenant") for space in the Building located at Two Stamford Plaza,
Stamford, CT.
A. Tenant shall pay Landlord the sum of One Million Two Hundred Seventy One
Thousand Three Hundred Thirty Seven 50/100 Dollars ($1,271,337.50) as Base
Rental for the Lease Term in monthly installments as follows (except to the
extent such schedule is adjusted as provided below):
1. 12 equal monthly installments of $8,475.58 each payable on or
before the first day of each month during the period beginning
June 1, 1994 and ending May 31, 1995.
2. 12 equal monthly installments of $8,921.67 each payable on or
before the first day of each month during the period beginning
June 1, 1995 and ending May 31, 1996.
3. 12 equal monthly installments of $9,367.75 each payable on or
before the first day of each month during the period beginning
June 1, 1996 and ending May 31, 1997.
4. 12 equal monthly installments of $9,813.83 each payable on or
before the first day of each month during the period beginning
June 1, 1997 and ending May 31, 1998.
5. 12 equal monthly installments of $9,813.83 each payable on or
before the first day of each month during the period beginning
June 1, 1998 and ending May 31, 1999.
6. 12 equal monthly installments of $10,259.92 each payable on or
before the first day of each month during the period beginning
June 1, 1999 and ending May 31, 2000.
7. 12 equal monthly installments of $10,706.00 each payable on or
before the first day of each month during the period beginning
June 1, 2000 and ending May 31, 2001.
8. 12 equal monthly installments of $10,706.00 each payable on or
before the first day of each month during the period beginning
June 1, 2001 and ending May 31, 2002.
9. 12 equal monthly installments of $11,152.08 each payable on or
before the first day of each month during the period beginning
June 1, 2002 and ending May 31, 2003.
10. 12 equal monthly installments of $11,152.08 each payable on or
before the first day of each month during the period beginning
June 1, 2003 and ending May 31, 2004.
11. 6 equal monthly installments of $11,152.08 each payable on or
before the first day of each month during the period beginning
June 1, 2004 and ending November 30, 2004.
B. Landlord and Tenant acknowledge that the foregoing schedule is based on
the assumption that the Lease Term will commence on the Target Commencement
Date. If the Lease Term does not commence on the Target Commencement Date, the
beginning and ending dates set forth above with respect to the payment of any
installment(s) of Base Rental shall be appropriately adjusted on a per diem
basis and set forth in the Commencement Letter to be prepared by Landlord. In
the event that the Base Rental rate adjusts (up or down) on any day other than
the first day of the month, Base Rental for the month on which such adjustment
occurs shall be determined based on the number of days in such month for which
each particular Base Rental rate is applicable.
For example, by way of illustration only, assume that tenant is
required to pay base rental pursuant to the following schedule based on a lease
term of two years and a target commencement date of January 1, 1992: 1. 12 equal
installments of $100.00 each payable on or before the first day of each month
during the period beginning January 1, 1992 and ending December 31, 1992; and
2. 12 equal installments of $200.00 each payable on or before the
first day of each month during the period beginning January 1,
1993 and ending December 31, 1993.
If the actual commencement date is determined to be January 15, 1992,
the base rental schedule shall be adjusted as follows:
1. 1 partial monthly installment of $54.91 ($3.23 (per day) X 17 (#
of days)) payable on or
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January 31, 1992; and
2. 11 equal monthly installments of $100.00 each payable on or
before the first day of each month during the period beginning
February 1, 1992 and ending December 31, 1992; and
3. 1 monthly installment of $154.87 ([$3.23 X 14] + [$6.45 X 17])
payable on or before January 1, 1993 with respect to the period
beginning January 1, 1993 and ending January 31, 1993; and
4. 11 equal installments of $200.00 each payable on or before the
first day of each month during the period beginning February 1,
1993 and ending December 31, 1993; and
5. 1 partial monthly installment of $90.30 ($6.45 X 14) payable on
or before January 1, 1994 with respect to the period beginning
January 1, 1994 and ending January 14, 1994, provided if Landlord
elected to extend the Lease Term for an additional 17 days so
that the Termination Date fell on January 31, 1994, Tenant shall
pay Landlord a monthly installment of $200.00 for the period
beginning January 1, 1994 and ending January 31, 1994.
C. All such Base Rental shall be payable by Tenant in accordance with the
terms of Article V of the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first written above.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
BY: EQUITY OFFICE PROPERTIES,
INC., as agent
__________________________________ By:_______________________________
Name (print):_____________________ Name:_____________________________
__________________________________ Title:____________________________
Name (print):_____________________
ATTEST: TENANT:
__________________________________ GKN Securities Corp.
Name (print):_____________________ By: /s/ Carl Goodman
------------------------------
__________________________________ Name: Carl Goodman
-----------------------------
Name (print):_____________________ Title: Chief Financial Officer
---------------------------
2
<PAGE>
EXHIBIT B-2
PAYMENT OF BASIC COSTS
This Exhibit is attached to and made a part of the Lease dated
____________, ________by and between ZML-STAMFORD ATLANTIC FORUM LIMITED
PARTNERSHIP, ("Landlord") by its agent Equity Office Properties, Inc. and GKN
Securities Corp. ("Tenant") for space in the Building located at Two Stamford
Plaza, Stamford, CT 06901.
BASIC COST ADJUSTMENT. During each calendar year, or portion thereof,
falling within the Lease Term, Tenant shall pay to Landlord as Additional Base
Rental hereunder Tenant's Pro Rata Share of the amount, if any, by which Basic
Costs (as defined below) for the applicable calendar year exceed the Basic Costs
for the Base Year (the "Excess"). For purposes hereof, the "Base Year" shall
mean the calendar year 1994. Prior to January 1, 1995 and prior to each
subsequent calendar year during the Lease Term, or as soon thereafter as
practical, Landlord shall make a good faith estimate of the Excess for the
applicable calendar year. Commencing as of 01/01/95, on or before the first day
of each month during each calendar year, Tenant shall pay Landlord, as
Additional Base Rental, a monthly installment equal to one-twelfth of Tenant's
Pro Rata Share of Landlord's estimate of the Excess. Landlord shall have the
right from time to time during any such calendar year to revise the estimate of
the Excess for such year and provide Tenant with a revised statement therefor,
and thereafter the amount Tenant shall pay each month shall be based upon such
revised estimate. If Landlord does not provide Tenant with an estimate of the
Excess by January 1 of any calendar year, Tenant shall continue to pay a monthly
installment based on the previous year's estimate until such time as Landlord
provides Tenant with an estimate of the Excess for the current year. Upon
receipt of such current year's estimate, an adjustment shall be made for any
month during the current year with respect to which Tenant paid monthly
installments of Additional Base Rental based on the previous years estimate of
the Excess. Tenant shall pay Landlord for any underpayment upon demand. Any
overpayment shall, at Landlord's option, be refunded to Tenant or credited
against the installment of Additional Base Rental due for the month immediately
following the furnishing of such estimate, provided if such overpayment cannot
be fully applied within two (2) calendar months, such overpayment shall be
applied to both Base Rental and Additional Base Rental. Any amounts paid by
Tenant based on any estimate shall be subject to adjustment pursuant to
Paragraph A below, when actual Basic Costs are determined for such calendar
year.
A. Basic Costs Reconciliation. As soon as is practical following the end of
each calendar year during the Lease Term, Landlord shall furnish to Tenant
a statement of Landlord's actual Basic Costs and the actual Excess for the
previous calendar year. If for any calendar year the Additional Base Rental
collected for the prior year, as a result of Landlord's estimate of Basic
Costs, is in excess of Tenant's actual Pro Rata Share of the Excess for
such prior year, then Landlord shall refund to Tenant any overpayment (or
at Landlord's option, apply such amount against Additional Base Rental due
or to become due hereunder). Likewise, Tenant shall pay to Landlord, on
demand, any underpayment with respect to the prior year, whether or not the
Lease has terminated prior to receipt by Tenant of a statement for such
underpayment, it being understood that this clause shall survive the
expiration of the Lease. Notwithstanding the foregoing, if Landlord fails
to provide Tenant with a final statement of Basic Costs within twenty four
(24) months after the Termination Date (or such later date that Tenant
actually vacates the Premises) and such failure continues for thirty (30)
days after written notice from Tenant requesting that Landlord provide it
with such final statement, Tenant shall be released from any obligation to
pay Landlord for any statement, Tenant shall be released from any
obligation to pay Landlord for any underpayment of Basic Costs with respect
to the final calendar year of the Lease Term.
B. Basic Costs Defined. Basic Costs shall mean all direct and indirect
costs and expenses paid or incurred in each calendar year in connection
with operating, maintaining, repairing, managing and owing the Building and
the Property (inclusive of the Exterior Common Areas), including, without
limitation, the following:
(i) All labor costs for all persons performing services required or
utilized in connection with the operation, repair and maintenance of
and control of access to the Building and the Property, including but
not limited to amounts incurred for wages, salaries and other
compensation for services, payroll, social security, unemployment and
other similar taxes, workmen's compensation insurance, uniforms,
disability benefits, pensions, hospitalization, retirement plans,
group insurance or any other similar or like expenses incurred under
the provisions of any collective bargaining agreement.
(ii) All management fees, the cost of maintaining a management office
at the Building, and all fees for legal accounting services relating
to the Building and the Property, except as set forth herein.
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<PAGE>
(iii) All rental and/or purchase costs of materials, supplies, hand
tools and equipment used in the operation, repair, replacement and
maintenance and the control of access to the Building and the
Property.
(iv) All amounts charged to Landlord by contractors and/or suppliers
for services, materials, equipment and supplies furnished in
connection with the operation, repair, maintenance, replacement of and
control of access to any part of the Building, or the Property
generally, including the heating, air conditioning, ventilating,
plumbing, electrical, elevator and other systems.
(v) All premiums and deductibles paid by Landlord for fire and
extended coverage insurance, earthquake and extended coverage
insurance, liability and extended coverage insurance, rental loss
insurance, elevator insurance, boiler insurance and other insurance
customarily carried from time to time by lessors of comparable office
buildings or required to be carried by Landlord's Mortgagee.
(vi) Charges for all utilities, including but not limited to water,
electricity, gas and sewer, but excluding those charges for which
tenants are individually responsible.
(vii) Taxes, including (i) all real estate taxes and assessments on
the Property, the Building or the Premises, and taxes and assessments
levied in substitution or supplementation in whole or in part of such
taxes, (ii) all personal property taxes for the Building's personal
property, including license expenses, (iii) all franchise fees, (iv)
all taxes imposed on services of Landlord's agents and employees, (v)
all sales, use or other tax, excluding state and/or federal income
tax, now or hereafter imposed by any governmental authority upon Rent
received by Landlord, (vi) all other taxes, fees or assessments now or
hereafter levied by any governmental authority on the Property, the
Building or its contents or on the operation and use thereof (except
as relate to specific tenants), and (vii) all costs and fees incurred
in connection with seeking reductions in or refunds in Taxes
including, without limitation, any costs incurred by Landlord to
challenge the tax valuation of the Building, but excluding income
taxes. Notwithstanding the foregoing, if Landlord seeks a reduction of
Taxes on a contingency fee basis, any contingency fee paid by Landlord
shall be offset against the reduction in Taxes realized by Landlord.
(viii) All landscape expenses and costs of repairing, resurfacing and
striping of the parking areas of the Property, if any.
(ix) Cost of all maintenance service agreements, including those for
equipment, alarm service, window cleaning, drapery or venetian blind
cleaning, janitorial services, pest control, uniform supply,
landscaping, and any parking equipment.
(x) Cost of all other repairs, replacements and general maintenance of
the Property and Building neither specified above nor directly billed
to tenants.
(xi) The amortized cost of capital improvements made to the Building
or the Property which are primarily for the purpose of reducing
operating expense costs or otherwise improving the operating
efficiency of the Property or Building or which are required to comply
with any laws, rules or regulation of any governmental authority, the
cost of such items to be amortized over a period of at least five (5)
years. Such amortization shall be in accordance with generally
accepted accounting principles and shall include interest at the
greater of (i) 10%, or (ii) three (3) percent over prime.
C. "Exterior Common Areas" shall mean those areas of the Property which are
not located within the Building and which are provided and maintained for
the use and benefit of Landlord and tenants of the Building generally and
the employees, invitees and licensees of Landlord and such tenants,
including, without limitation, any parking garage, plaza, roads, sidewalks
and landscapes.
2
<PAGE>
D. Exclusions From Basic Costs. Basic Costs shall not include the cost of
capital improvements or equipment (except as above set forth),
depreciation, interest (except as provided above with respect to the
amortization of capital improvements), lease commissions, and principal
payments on mortgage and other non-operating debts of Landlord.
1) Repairs or other work occasioned by (i) fire, windstorm, or other
casualty of the type which Landlord has insured (to the extent that
Landlord has received insurance proceeds and provided that the amount
of any deductible paid by Landlord shall be included in Basic Costs),
or (ii) the exercise of the right of eminent domain (to the extent
that such repairs or other work are covered by the proceeds of the
award, if any, received by Landlord);
2) Leasing commissions, brochures, marketing supplies, attorney's
fees, costs, and disbursements and other expenses incurred in
connection with negotiation of leases with prospective tenants;
3) Rental concessions granted to specific tenants and expenses
incurred in renovating or otherwise improving or decorating, painting,
or redecorating space for specific tenants, other than ordinary
repairs and maintenance provided to all tenants;
4) Landlord's costs of electricity and other services sold or provided
to tenants in the Building and for which Landlord is entitled to be
reimbursed by such tenants as a separate additional charge or rental
over and above the base rental or additional base rental payable under
the lease with such tenant or other space available for Tenants.
5) Overhead, profit increment, and management fees paid to
subsidiaries or other affiliates of Landlord for services on or to the
Property, Building and/or Premises to the extent only that the costs
of such services exceed the competitive cost for such services
rendered by persons or entities of similar skill, competence and
experience.
6) All items (including repairs) and services for which Tenant or
other tenants pay directly to third parties or for which Tenant or
other tenants reimburse Landlord ( other than through Basic Costs);
7) Advertising and promotional expenditures;
8) Costs incurred in connection with the sale, financing, refinancing,
mortgaging or sale of the building or Property, including brokerage
commissions, attorneys' and accountants' fees, closing costs, title
insurance premiums, transfer taxes and interest charges;
9) Costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to the late payments of taxes, utility bills
and other costs incurred by Landlord's failure to make such payments
when due unless such failure is due to Landlord's good faith and
reasonable efforts in contesting the amount of such payments;
10) Costs incurred by Landlord for trustee's fees, partnership
organizational expenses and accounting fees to the extent relating to
Landlord's general corporate overhead and general administrative
expenses;
11) Any penalties, or liquidated damages that Landlord pays to third
parties or Tenant under this Lease or to any other tenants in the
Development under their respective leases;
12) Attorney's fees, costs and disbursements and other expenses
incurred in connection with negotiations or disputes with tenants or
other occupants of the Building or with prospective tenants (other
than attorney's fees, costs and disbursements and other expenses
incurred by Landlord in seeking to enforce Building rules and
regulations).
13) Ground rents or rentals payable by Landlord pursuant to any
over-lease;
14) Franchise, capital gains, or income taxes imposed upon Landlord;
15) Costs for which Landlord is actually compensated by insurance
proceeds;
16) executive salaries above the level of building manager;
17) costs incurred for the purchase of works of art such as paintings
and statues; and
18) damages imposed upon and paid by Landlord for adjudicated or
admitted liability
E. Occupancy. Notwithstanding any language in the Lease seemingly to the
contrary, if the Building is not fully occupied during any calendar year of
the Lease Term including the Base Year, actual Basic Costs for purposes of
this Exhibit B-2 shall be determined as if the Building had been fully
occupied during such year.
F. Audit Rights. Tenant at its sole cost and expense, shall have the right,
within ninety (90) days after receiving Landlord's statement of actual
Basic Costs for a particular calendar year, to provide Landlord with
written notice (the "Review Notice") of its intent to review Landlord's
books and records relating to the Basic Costs for such year. Landlord,
within thirty (30) days after receipt of the Review Notice, shall, make
such books and records available to Tenant or Tenant's agent for its review
at the office Building. If Tenant elects to review Landlord's books and
records, within thirty (30) days after such books and records are made
available to Tenant, Tenant shall have the right to give Landlord written
notice stating in reasonable detail any objection to Landlord's statement
of actual Basic Costs for such calendar year. If Tenant fails to give
Landlord written notice of objection within such thirty (30) day period or
fails to provide Landlord with a Review Notice within the ninety (90) day
period provided above, Tenant shall be deemed to have approved such
statement in all respects. Upon Landlord's receipt of a timely objection
notice from Tenant, Landlord and Tenant shall work together in good faith
to resolve the discrepancy between Landlord's statement and Tenant's
review. If Landlord and Tenant determine that Basic Costs are less than
reported, Landlord shall provide Tenant with a credit against future
Additional Base Rental in the amount of such overpayment. Provided if such
overpayment cannot be fully applied within two (2) calendar months, such
overpayment shall be applied to both Base Rental and Additional Base
Rental, Like wise, if Landlord and Tenant determine that Basic Costs are
greater than reported, Tenant shall forthwith pay the amount of such
underpayment to Landlord. In addition, if Landlord and Tenant determine
that Basic Costs were less than stated by more than ten percent (10%) then
Landlord shall pay the reasonable cost of such review by Tenant. Any
information obtained by Tenant pursuant to the provisions of the Section
shall be treated as confidential. Notwithstanding anything herein to the
contrary, Tenant shall not be permitted to examine Landlord's books and
records or to dispute any statement of Basic Costs unless Tenant has paid
to Landlord the amount due as shown on Landlord's statement of actual Basic
Costs, said payment being a condition precedent to said examination and/or
dispute.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first written above.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
ATTEST: BY:EQUITY OFFICE PROPERTIES, INC., as agent
______________________________ By:_____________________________________
Name (print):_________________ Name:___________________________________
______________________________ Title:__________________________________
Name (print):_________________
ATTEST: TENANT: GKN Securities Corp.
________________________________ By: /s/ Carl Goodman
------------------------------------
Name (print):_____________________ Name: Carl Goodman
----------------------------------
________________________________ Title: Chief Financial Officer
---------------------------------
Name (print):_____________________
3
<PAGE>
EXHIBIT C
TENANT IMPROVEMENTS
This Exhibit is attached to and made a part of the Lease dated
____________, 199_ by and between ZML-STAMFORD ATLANTIC FORUM LIMITED
PARTNERSHIP, ("Landlord") by its agent Equity Office Properties, Inc. and GKN
Securities Corp. ("Tenant") for space in the Building located at Two Stamford
Plaza, Stamford, CT.
Initial Alterations. Tenant, upon the full and final execution and delivery
of this Lease, shall have the right to perform alterations and improvements in
the Premises (the "Initial Alterations"). Notwithstanding the foregoing, Tenant
and its contractors shall not have the right to perform Initial Alterations in
the Premises unless and until Tenant has complied with all of the terms and
conditions of Article X.B of this Lease, including, without limitation, approval
by Landlord, which approval shall not be unreasonably withheld or delayed, of
the final plans for the Initial Alterations and the contractors to be retained
by Tenant to perform such Initial Alterations. Landlord agrees to contribute the
(the "Work Allowance") an amount not to exceed One Hundred Eighty Two Thousand
Two and 00/100 Dollars ($182,002.00), (Thirty Four and 00/100 ($34.00) per
rentable square foot of the Premises toward the cost of performing Initial
Alterations in the Premises, including, without limitation, the cost of labor,
materials, space planning, design and related architectural and engineering
services and the cost of preparing mechanical, electrical and plumbing plans for
the Initial Alterations. The Work Allowance shall be paid as follows: During
construction of the Initial Alterations, upon receipt by Landlord of necessary
waivers of liens from the general contractor and the subcontractors retained by
the Tenant, percentage completion certificates from Tenant, the general
contractor and Tenant's architect, a sworn contractor's affidavit from the
general contractor and request to disburse from Tenant containing an approval by
Tenant of the work done, Landlord shall disburse the Work Allowance funds within
thirty (30) days of receipt of the documentation provided above, subject to ten
percent (10%) retention, to the order of the general contractor or, at
Landlord's election, to the joint order of the general contractor and all
included subcontractors; provided that Landlord shall not be obligated to
disburse any portion of the Work Allowance during the continuance of an uncured
monetary or material non-monetary default under this Lease, and Landlord's
obligation to disburse shall only resume when and if such default is cured. Upon
substantial completion of the Initial Alterations, and prior to final
disbursement of the Work Allowance, Tenant shall furnish Landlord with: a)
general contractor and architectural completion affidavits, b) full and final
waivers of lien conditioned only upon receipts of payment, c) within fifteen
(15) days after payment of receipted bills covering all labor and materials
expended and used, d) as-built plans of the Initial Alterations, including
architectural, electrical, mechanical and plumbing and e) the certification of
Tenant and its architect that the Initial Alterations have been installed in a
good and workmanlike manner in accordance with the approved plans, and in
accordance with applicable codes and ordinances. In the event the cost of the
Initial Alterations is less than the Work Allowance, such unused Work Allowance
shall accrue to the sole benefit of Landlord. Landlord shall have the right to
supervise the Initial Alterations with a construction manager selected by
Landlord, provided that such supervision shall be at no cost to Tenant and,
provided further, that Landlord will not unreasonably interfere with or
unreasonably delay Tenant's construction of the Initial Alterations. Subject to
the Terms of this paragraph Landlord approves Shankle Construction as Tenant's
General Contractor.
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<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Addendum to
the Lease as of the date first set forth above.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
ATTEST: BY: EQUITY OFFICE PROPERTIES,
INC., as agent
__________________________________ By:______________________________
Name (print):_____________________ Name:____________________________
__________________________________ Title:___________________________
Name (print):_____________________
ATTEST: TENANT: GKN Securities Corp.
__________________________________
Name (print):_____________________ By: /s/ Carl Goodman
-----------------------------
__________________________________ Name: Carl Goodman
---------------------------
Name (print):_____________________ Title: Chief Financial Officer
2
<PAGE>
EXHIBIT D
BUILDING RULES AND REGULATIONS
This Exhibit is attached to and made a part of the Lease dated
____________, ________ by and between ZML-STAMFORD ATLANTIC FORUM LIMITED
PARTNERSHIP, ("Landlord") by its agent Equity Office Properties, Inc. and GKN
Securities Corp. ("Tenant") for space in the Building located at Two Stamford
Plaza, Stamford, CT.
The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage associated therewith (if any),
the Property and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any
purpose other any ingress and egress to and form the Premises. No
rubbish, litter, trash, or material of any nature shall be placed,
emptied, or thrown in those areas,. At no time shall Tenant permit
Tenant's employees to loiter in common areas or elsewhere in or about
the Building or Property.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other
unsuitable material shall be thrown or placed therein. Damage
resulting to any such fixtures or appliances form misuse by Tenant or
its agents, employees or invitees, shall be paid for by Tenant, and
Landlord shall not in any case be responsible therefor.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows, doors or other parts of the Building, except those of
such color, size, style and in such places as shall be first approved
in writing by Landlord which approval shall not unreasonably withheld
or delayed. No nails, hooks or screws shall be driven or inserted into
any part of the Premises or Building except by the Building
maintenance personnel, nor shall any part of the Building be defaced
by Tenant.
4. Landlord may provide and maintain in the first floor (main lobby) of
the Building an alphabetical directory board listing all Tenants, and
no other directory shall be permitted unless previously consented to
by Landlord in writing. Tenant shall be entitled to five (5) lines on
the main building directory.
5. Tenant shall not place any additional lock or locks on any door in the
Premises or Building without Landlord's prior written consent. A
reasonable number of keys to the locks on the doors in the Premises
shall be furnished by Landlord to Tenant at the cost of Tenant, and
Tenant shall not have any duplicate keys made. All keys shall be
returned to Landlord at the expiration or earlier termination of this
Lease.
6. Tenant will refer to Landlord for Landlord's supervision, approval,
and control all contractors, contractors' representatives, and
installation technicians rendering any service to Tenant, before
performance of any contractual service. Such supervisory action by
Landlord shall not render Landlord responsible for any work performed
for Tenant. This provision shall apply to all work performed in the
Building, including but not limited to the installation of telephones,
computer wiring, cabling, equipment, electrical devices, attachments
and installations of any nature. Tenant shall be solely responsible
for complying with all applicable laws, codes and ordinances pursuant
to which said work shall be performed.
7. Movement in or out of the Building of furniture or office equipment,
or dispatch or receipt by Tenant of any merchandise or materials which
require the use of elevators, stairways, lobby areas, or loading dock
areas, shall be restricted to hours designated by Landlord. Tenant
must seek Landlord's prior approval by providing in wring a detailed
listing of any such activity. If approved by Landlord, such activity
shall be under the supervision of Landlord and performed in the manner
stated by Landlord. Landlord may prohibit any article, equipment or
any other item from being brought into the Building. Tenant is to
assume all risk for damage to articles moved and injury to any persons
resulting from such activity. If any equipment, property, and/or
personnel of Landlord or any of any other tenant is damaged or injured
as a result of or in connection with such activity, Tenant shall be
solely liable for any and all damage or loss resulting therefrom.
8. Landlord shall have the power to prescribe the weight and position of
safes and other heavy equipment or items, which in all cases shall not
in the opinion of Landlord exceed acceptable floor loading and weight
distribution requirements. All damage done to the Building by the
installation or removal of any property of Tenant, or done by Tenant's
property while in the Building, shall be repaired at the expense of
Tenant.
9. Corridor doors, when not in use, shall be kept closed.
10. Tenant shall not (i) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in
any way with other tenants or persons having business with them, (ii)
solicit business or distribute, or cause to be distributed, in any
portion of the Building any handbills, promotional material or other
advertising, or (iii) conduct or permit any other activities in the
Building that might constitute a nuisance.
11. No animals, except seeing eye dogs, shall be brought into or kept in,
on or about the Premises.
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<PAGE>
12. No inflammable, explosive or dangerous fluid or substance shall be
used or kept by Tenant in the Premises or Building. Tenant shall not,
without Landlord's prior written consent, use, store, install, spill,
remove, release or dispose of within or about the Premises or any
other portion of the Property, any asbestos-containing materials or
any solid, liquid or gaseous material now or hereafter considered
toxic or hazardous under the provisions or 42 U.S.C ss. 9601 et seq.
Or any other applicable environmental law which may now or hereafter
be in effect. If Landlord does give written consent to Tenant pursuant
to the foregoing sentence, Tenant shall comply with all applicable
laws, rules and regulations pertaining to and governing such use by
Tenant, and shall remain liable for all costs of cleanup or removal in
connection therewith.
13. Tenant shall not use or occupy the Premises in any manner or for any
purpose which would injure the reputation or impair the present or
future value of the Premises or the Building; without limiting the
foregoing, Tenant shall not use or permit the Premises or any portion
thereof to be used for lodging, sleeping of for any illegal purpose.
14. Tenant shall not take any action which would violate Landlord's labor
contracts affecting the Building or which would cause any work
stoppage, picketing, labor disruption or dispute, or any interference
with the business of Landlord or any other tenant or occupant of the
Building or with the rights and privileges of any person lawfully in
the Building. Tenant shall take any actions necessary to resolve any
such work stoppage, picketing, labor disruption, dispute or
interference and shall have pickets removed and, at the request of
Landlord, immediately terminate at any time any construction work
being performed in the Premises giving rise to such labor problems,
until such time as Landlord shall have given its written consent for
the resumption of such work. Tenant shall have no claim for damages of
any nature against Landlord or any or of the Landlord Related parties
in connection therewith, nor shall the date of the commencement of the
Term be extended as a result thereof.
15. Tenant shall utilize the termite and pest extermination service
designated by Landlord to control termites and pests in the Premises.
Tenant shall bear the cost and expense of such extermination services,
provided that Tenant shall not be obligated to pay more for its
participation in such termite and pest extermination services than the
prevailing competitive rates charged by reputable independent termite
and pest control exterminators for the same service on a direct and
individual basis.
16. Tenant shall not install, operate or maintain in the Premises or in
any other area of the Building, any electrical equipment which does
not bear the U/L (Underwriters Laboratories) seal of approval, or
which would overload the electrical system or any part thereof beyond
its capacity for proper, efficient and safe operation as determined by
Landlord, taking into consideration the overall electrical system and
the present and future requirements therefor in the Building. Tenant
shall not furnish any cooling or heating to the Premises, including,
without limitation the use of any electronic or gas heating devices,
without Landlord's prior written consent.
17. Tenant shall not operate or permit to be operated on the Premises any
coin or token operated vending machine or similar device (including,
without limitation, telephones, lockers, toilets, scales, amusement
devices and machines for sale of beverages, foods, candy, cigarettes
or other goods), except for those vending machine or similar devices
which are for the sole and exclusive use of Tenant's employees, and
then only if such operation does not violate the lease of any other
tenant of the Building.
18. Bicycles and other vehicles are not permitted inside or on the
walkways outside the Building, except in those areas specifically
designated by Landlord for such purposes.
19. Landlord may from time to time adopt appropriate systems and
procedures for the security or safety of the Building, its occupants,
entry and use, or its contents. Tenant, Tenant's agents, employees,
contractors, guests and invitees shall comply with Landlord's
reasonable requirements relative thereto.
20. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in the Landlord's
opinion may tend to impair the reputation of the Building or its
desirability for Landlord or other tenants. Upon written notice from
Landlord, Tenant will refrain from and/or discontinue such publicity
immediately.
21. Tenant shall carry out Tenant's permitted repair, maintenance,
alterations and improvements in the Premises only during times agreed
to in advance by Landlord and in a manner which will not interfere
with rights of other tenants in the Building.
22. Canvassing, soliciting, and peddling in or about the Building is
prohibited. Tenant shall cooperate and use its best efforts to prevent
the same.
23. At no time shall Tenant permit or shall Tenant's agents, employees,
contractors, guests, or invitees smoke in any common area of the
Building, unless such common area has been declared a designated
smoking area by Landlord.
24. Tenant shall observe Landlord's rules with respect to maintaining
standard window coverings at all windows in the Premises so that the
Building presents a uniform exterior appearance. Tenant shall ensure
that to the extent reasonably practicable, window coverings are closed
on all windows in the Premises while they are exposed to the direct
rays of the sun.
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<PAGE>
25. All deliveries to or from the Premises shall be made only at such
times, in the areas and through the entrances and exits designated for
such purposes by Landlord. Tenant shall not permit the process of
receiving deliveries to or from the Premises outside of said areas or
in a manner which may interfere with the use by any other tenant of
its premises or of any common areas, any pedestrian use of such area,
or any use which is inconsistent with good business practices.
26. The work of cleaning personnel shall not be hindered by Tenant after
5:30 p.m., and such cleaning work may be done at any time when the
offices are vacant. Windows, doors and fixtures may be cleaned at any
time. Tenant shall provide adequate waste and rubbish receptacles
necessary to prevent unreasonable hardship to Landlord regarding
cleaning service.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
ATTEST: BY: EQUITY OFFICE PROPERTIES,
INC., as agent
__________________________________ By:______________________________
Name (print):_____________________ Name:_______________________________
__________________________________ Title:______________________________
Name (print):_____________________
ATTEST: TENANT: GKN Securities Corp.
__________________________________ By: /s/ Carl Goodman
------------------------------
Name (print):_____________________ Name: Carl Goodman
---------------------------
__________________________________ Title: Chief Financial Officer
--------------------------
Name (print):_____________________
Page 3
<PAGE>
EXHIBIT E
ADDITIONAL TERMS
This Exhibit is attached to and made a part of the Lease dated ____________,
________by and between ZML-STAMFORD ATLANTIC FORUM LIMITED PARTNERSHIP,
("Landlord") by its agent EQUITY OFFICE PROPERTIES, INC. and GKN Securities
Corp. ("Tenant") for space in the Building located at Two Stamford Plaza,
Stamford, CT.
1. PARKING
Tenant shall, at no additional cost, have the non-exclusive right to use the
parking garages located adjacent to and below the Building. Tenant shall receive
twenty five (25) parking cards from Landlord for parking in said garage. Tenant
must provide the name and registration of vehicle for each person in its employ
who will have the right to use said parking cards. Use of the parking cards is
subject to all rules and regulations applicable to users of the garage regarding
the use of parking cards and the parking garage. Subject to availability, Tenant
shall have the right to purchase additional parking cards at the monthly rate
charged to tenants.
2. RENEWAL OPTION
A. Tenant, provided it is not in default after notice and expiration of any
applicable grace period and has not sublet the Premises or assigned this Lease,
shall have the right to extend the Lease Term for one additional period of Five
(5) years commencing December 1, 2004 and ending November 30, 2009 (the "Renewal
Term"). Such Renewal Option shall be exercised by providing written notice to
Landlord on or before March 1, 2004.
B. The Basic Rental rate per rentable square foot for the Premises during the
Renewal Term shall equal ninety five percent (95%) of the then prevailing market
rate for such space as determined in Landlord's reasonable judgment. Within
thirty (30) days after receipt of Tenant's initial renewal notice, Landlord
shall advise Tenant of the applicable Base Rental rate for the Premises for the
Renewal Term, which rate shall reflect the Prevailing Market rate for the
Premises. Tenant, within fifteen (15) days after the date on which Landlord
advises Tenant of the applicable Base Rental rate for the Renewal Term, shall
either (i give Landlord final binding written notice ("Binding Notice") of
Tenant's exercise of its option, or (ii) if Tenant disagrees with Landlord's
determination of the Prevailing Market rate, provide Landlord with written
notice of rejection ("the Rejection Notice"). If Tenant fails to provide
Landlord with either a Binding Notice or Rejection Notice within such fifteen
(15) day period, Tenant's Renewal Option shall be null and void and of no
further force and effect. If Tenant provides Landlord with a Binding Notice,
Landlord and Tenant shall enter into the Renewal Amendment upon the terms and
conditions set forth herein. If Tenant provides Landlord with a Rejection
Notice, Landlord and Tenant shall work together in good faith to agree upon the
Prevailing Market Base Rental rate for the Premises during the Renewal Term.
Upon agreement, Landlord and Tenant shall enter into the Renewal Amendment in
accordance with the terms and conditions hereof. Notwithstanding the foregoing,
if Landlord and Tenant are unable to agree upon the Prevailing Market Base
Rental rate for the Premises within thirty (30) days after the date on which
Tenant provides Landlord with a Rejection Notice, Tenant's Renewal Option shall
be null and void and of no force and effect.
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C. If Tenant is entitled to and properly exercises its Renewal Option, Landlord
shall prepare and amendment (the "Renewal Amendment") to reflect changes in the
Base Rental, Lease Term, Termination Date and other appropriate terms. Tenant
shall execute and return such Renewal Amendment to Landlord within fifteen (15)
days after Tenant's receipt thereof from Landlord.
D. For the purposes hereof, "Prevailing Market" shall mean the arms length fair
market annual rate per rentable square foot under renewal leases and amendments
for space comparable to the Premises in the Building and office buildings
comparable to the Building in the Stamford central business district, taking
into account any rent abatement, construction costs, [ILLEGIBLE] and other
related concessions and the effect that such concessions have upon the rental
rate.
3. BASE RENT ABATEMENT
Notwithstanding Article V and Exhibit B-1 of the Lease to the contrary, as long
as Tenant is not in default, Tenant shall be entitled to abatement of Base
Rental in the amount of Fifty Thousand Eight Hundred Fifty Three and 48/100
dollars ($50,853.48) to be credited against the Base Rental due for the first
Six (6) months of the lease term, ("Abated Base Rental"). In the event Tenant
defaults at any time during the Lease Term after notice of default is given to
Tenant and Tenant's cure period has expired, all abated Base Rental shall
immediately become due and payable. The payment by Tenant of the abated Base
Rental in the event of a default shall not limit or affect any of the Landlord's
other rights, pursuant to this Lease or at law or in equity. The Abated Base
Rental shall be credited against Base Rental for the months provided above only
and all Additional Base Rental and other costs and charges specified in this
Lease for any month for which Tenant receives a credit against Base Rental shall
remain as due and payable pursuant to the provisions of this Lease.
4.RIGHT OF FIRST OFFER
A. During the period commencing on the Execution of this Lease and, subject
to earlier termination pursuant to paragraphs E and F below, ending on
April 31, 2004 (the "ROFO Termination Date"), Tenant shall have the right
of first offer (the "ROFO") with respect to the 5,000 square feet on the
15th floor of the Building shown cross-hatched on the demising plan
attached hereto as attachment #1 (the "Offering Space"), which Right of
First Offer shall be exercised as follows: when Landlord has a prospective
tenant ("Prospect") interested in leasing all or any portion of the
Offering Space, Landlord shall advise Tenant, in writing (the "Advice"), of
the terms under which Landlord is prepared to lease the Offering Space (or
applicable portion thereof) to such Prospect and Tenant may lease such
Offering Space (or any applicable portion thereof), delivering written
notice of exercise to Landlord ("Notice of Exercise") within ten (10) days
after Tenant's receipt of the Advice, In the event the lease term set forth
in the Advice would expire prior to the Termination Date of this Lease,
Tenant shall have the right to lease such Offering Space for the remainder
of the Lease Term under the terms set forth in the Advice, provided that
the rent payable by Tenant with respect to the period beginning on the day
following the expiration date set forth in the Advice and ending on the
Termination Date of this Lease shall equal the Prevailing Market Rate
determined by Landlord in its reasonable judgement. Notwithstanding
anything herein to the contrary, Tenant shall have no such ROFO and
Landlord need not provide Tenant with an Advice, if:
1. Tenant is in default under the Lease after notice of default is
given to Tenant and Tenant's cure period has expired, at the time
Landlord would otherwise deliver the Advice; or
2. the Premises, or any portion thereof, is sublet at the time
Landlord would otherwise deliver the Advice; or
3. the Lease has been assigned (except in connection with a merger or
consolidation by Tenant) at the time Landlord would otherwise deliver
the Advice; or
4. Tenant is not an occupant of the Building after the Commencement
Date under this Lease at the time Landlord would otherwise deliver the
Advice; or
5. the Offering Space is not intended, at the time the Notice of
Exercise is given for the exclusive use of Tenant during the Lease
Term; or
6. the Prospect is interest in leasing 20,000 rentable square feet in
the Building in addition to the Offering Space; or
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<PAGE>
7. the Prospect is a tenant in the Offering Space that is interested
in extending its lease.
B. The ROFO shall be deemed exercised upon Landlord's receipt of the Notice
of Exercise executed by Tenant within the time period stated in paragraph A
above. If Tenant exercises the ROFO, Tenant shall execute and deliver the
Offering Amendment (hereinafter defined) to Landlord within ten (10) days
of the submission of such Offering Amendment by Landlord to Tenant.
C. The Offering Space (including improvements and personalty, if any) shall
be accepted by Tenant in its condition and as-built configuration existing
on the earlier of the date Tenant takes possession of the Offering Space or
as of the date the term for such Offering Space commences, unless the
Advice specifies any work to be performed by Landlord in the Offering
Space, in which case Landlord shall perform such work in the Offering
Space.
D. 1. If Tenant exercises its ROFO, Landlord shall prepare and amendment
(the "Offering Amendment") adding the Offering Space to the Premises
on the terms set forth in the Advice and reflecting the changes in the
Base Rental, Rentable Area of the Premises, Tenant's Pro Rata Share
and other appropriate terms.
2. The term for the Offering Space shall commence upon the
commencement date as stated in the Offering Amendment and thereupon
such Offering Space shall be considered a part of the Premises,
provided that all of the terms stated in the Advice (including,
without limitation, the expiration date set forth in the Advice for
the length of Tenants term or longer) shall govern Tenant's leasing of
the Offering Sapce and only to the extent that they do not conflict
with the Advice, the terms and conditions of this Lease shall apply to
the Offering Space.
3. A copy of the Offering Amendment shall be (i) sent to Tenant within
a reasonable time after receipt of the Notice of Exercise executed by
Tenant, and (ii) executed by Tenant and returned to Landlord in
accordance with paragraph B, above.
E. Subject to paragraph F below, the rights of Tenant hereunder with
respect to any portion of the Offering Space for which Landlord has a
Prospect shall terminate on the earliest to occur of the date Tenant
notifies Landlord that it is not interested in leasing such Offering Space
or ten (10) days after Tenant's receipt of the Advice. If Landlord provides
Tenant with an Advise for less than all of the offering space, Tenant's
Right of First Offer with respect to any portion on the Offering space not
included under the Advice shall continue in full force and effect until
terminated in accordance with the Terms hereof.
F. If Landlord has a Prospect for Offering Space an Landlord is not
obligated to send Tenant and Advice under paragraph A above, Landlord may
lease such Offering Space to the Prospect on whatever terms Landlord deems
appropriate and Tenant shall have no further rights with respect to such
Offering Space.
5. CONSENT
Except with regard to requests for consent or approval that require
Landlord to make a determination of the aesthetics of certain signage,
alterations or other things that would be visible from outside the Premises
or Building or to assume certain risks, including, without limitation, the
risk that a certain alteration, addition and/or improvement could adversely
affect the mechanical systems or structure of the Building or require
excess removal costs, Landlord agrees to act reasonably in granting its
approval or disapproval of any requests by Tenant for the consent or
approval of Landlord.
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<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first written above.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
ATTEST: BY: EQUITY OFFICE PROPERTIES,
INC., as agent
__________________________________ By:__________________________________
Name (print):_____________________ Name:________________________________
Title:_______________________________
ATTEST: TENANT: GKN Securities Corp.
__________________________________ By: /s/ Carl Goodman
--------------------------------
Name (print):_____________________ Name: Carl Goodman
------------------------------
__________________________________ Title: Chief Financial Officer
-----------------------------
4
<PAGE>
ATTACHMENT #1
Diagram of 15th floor:
5,00sf
ROFO SPACE
15TH FLOOR
<PAGE>
ADDENDUM
This Addendum is attached to and made a part of that certain lease (the
"Lease") dated ____________, 199_ by and between ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP, an Illinois Limited Partnership ("Landlord"), by its agent
Equity Office Properties, Inc., and GKN Securities Corp. ("Tenant") for space in
the Building commonly known as Two Stamford Plaza and located in Stamford,
Connecticut. In consideration of the mutual covenants set forth herein and in
the Lease, the receipt and sufficiency of which is hereby acknowledged, Landlord
and Tenant hereby agree as follows:
1) Hazardous Materials
A. During the term of this Lease, Tenant shall comply with all
Environmental Laws and Environmental Permits (each as defined in Section 1.D
hereof) applicable to the operation or use of the Premises, shall cause all
other persons occupying or using the Premises to comply with all such
Environmental Laws and Environmental Permits, shall immediately pay all costs
and expenses incurred by reason of such compliance, and shall obtain and renew
all Environmental Permits required for operation or use of the Premises. Tenant
shall not generate, use, treat, store, handle, release of dispose of, or permit
the generation, use treatment, storage, handling, release or dispose, of
Hazardous Materials (as defined in Section 1.D. hereof) on the Premises, the
Building or the property by Tenant, its agents, employees, independent
contractors, licensees or invitees, except for limited quantities used or stored
at the premises and required in connection with the routine operation and
maintenance of the Premises, and than only in compliance with all applicable
Environmental Laws and Environmental Permits.
B. Tenant will immediately advise Landlord in writing of any of the
following: (1) the Tenant's receipt of written notice of written notice of any
Environmental Claim (as defined in Section 1.D. hereof) against Tenant relating
to the Premises, the Building or the Property; (2) any condition or occurrence
on the Premises, the Building or the Property that (a) results in noncompliance
by Tenant with any applicable Environmental Law, or (b) could reasonably be
anticipated to form the basis of an Environmental Claim against Tenant and/or
Landlord or the Premises and (3) the actual or anticipated taking of any removal
or remedial action in response to presence of any Hazardous Material on the
Premises. All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
Tenant's response thereto. In addition, Tenant will provide Landlord with copies
of all communication regarding the Premises with any person relating to
Environmental Claims, and such detailed reports of any such Environmental Claim
as may reasonably be requested by Landlord. At any time and from time to time
during the term of this Lease, and at Tenant's sole cost and expense, Landlord
or its agents may perform an environmental inspection of the Premises, and
Tenant hereby grants to Landlord and its agents access to the Premises to
undertake such an inspection following reasonable prior notice from Landlord
except that no such notice shall be required in case of emergency.
Notwithstanding the foregoing, if the first environmental inspection performed
by Landlord does not reveal any Hazardous Materials introduced into the Premises
by Tenant, its agents, employees independent contractors, licensees or invitees,
Landlord shall be responsible for the cost of any subsequent inspections unless
Landlord, in its reasonable judgment, believes that Hazardous Materials have
been introduced into the Premises subsequent to the date of such first
inspection by Tenant, its agents, employees, independent contractors, licensees
or invitees.
C. Tenant agrees to defend, indemnify and hold harmless Landlord and its
officers, directors, agents, employees, attorneys and contractors (collectively,
the "Indemnities") from and against all obligations (including removal and
remedial actions), losses, claims, suits, judgments, liabilities, penalties
(including, by way of illustration and not by way of limitation, civil fines),
damages, costs, and expenses (including attorneys' and consultants' fees and
expenses) of any kind or nature whatsoever that may at any time be incurred by,
imposed on or asserted against such indemnities based on, or arising or
resulting from (a) the presence of
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<PAGE>
Hazardous Material on the Premises, in the Building or on the Property which is
caused or permitted by Tenant, its agents, employees, independent contractors,
licensees or invitees and/or (b) any Environmental Claim relating in any way to
Tenant's operation or use of the Premises, the building or the Property. The
provisions of this Section 1.C shall survive the expiration or sooner
termination of this Lease.
D. 1. "Hazardous Materials" means (a) petroleum products, natural or
synthetic gas asbestos in any form, urea formaldehyde foam insulation, and radon
gas; (b) any substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any applicable
Environmental Law; and (c) any other substance exposure which is regulated by
any governmental authority; (2) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code, policy or rule of common
law now or hereafter in effect and each case as amended, and any Environmental
Law or any Environmental Permit, including, without limitation, (a) any and all
environmental Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and/or (b) any and all Environmental Claims by any
third party seeking damages, or arising from alleged injury or threat of injury
to health,, safety or the environment; and (4) "Environmental Permits: means all
permits, approvals, identification numbers licenses and other authorizations
required under any applicable Environmental Law.
2. Failure of Landlord to Consent
If Tenant shall request Landlord's consent hereunder and Landlord shall fail or
refuse to give such consent, Tenant shall not be entitled to any damages
(monetary or otherwise, for the withholding of such consent and tenant hereby
waives any claim for damages, or any claim for damages by way of setoff,
counterclaim or defense), it being intended that Tenant's sole remedy shall be
an action for specific performance or injunction , and that such remedy shall be
available only in those cases where Landlord has expressly agreed in writing
not to unreasonably withhold such consent of Landlord or where, as a matter of
law, Landlord may not unreasonably withhold its consent.
3. Subordination to Mortgages. Article XXX or the Lease is hereby modified by
adding the following before the last sentence of Article XXX.
"Upon such attornment this Lease shall continue in full force and effect
as, or as if it were, a direct lease between the successor Landlord and
Tenant upon all of the terms, conditions and covenants as are set forth in
this Lease and shall be applicable after such attornment except that the
successor Landlord shall not: (a) be liable for any previous default of
Landlord under this Lease; (b) be subject to any offset, not expressly
provided for in this Lease which shall have theretofore accrued to Tenant
against Landlord; (c) be bound by any previous modification of this Lease
not expressly provided for in this Lease without the consent of such
Mortgagee unless such consent was not required under the Mortgage, or by
any previous prepayment of more than one month's rent or additional rent,
unless such modification or prepayment shall have been expressly approved
in writing by the Mortgagee; (d) be obligated to perform any alteration of
the Premises which obligation to perform alterations shall have arisen
prior to the mutual execution and delivery of the Lease; (e) by obligated
to repair the Premises to the Building or any part thereof , in the event
of total or substantial total damage beyond such repair as can reasonable
be accomplished from the net proceeds of insurance
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<PAGE>
actually made available to successor Landlord; provided, however, that
Tenant is entitled to any rights or remedies it may have under the Lease,
if any, for Landlord's failure to complete such repair in the event of such
damage; or (f) be obligated to repair the Premises or the Building or any
part thereof in the event of partial condemnation beyond such repair as can
reasonably be accomplished from the net proceeds of any award actually made
available to successor Landlord, as consequential damages allocable to the
part of the Premises or the Building not taken; provided, however, that
Tenant is entitled to any rights or remedies it may have under the Lease,
if any, for Landlord's failure to complete such repair in the event of such
condemnation."
4. Repairs and Alterations. Notwithstanding anything in Section X.A. of the
Lease to the contrary, Tenant hereby agrees that any and all repairs performed
by Tenant shall be performed in accordance with applicable law.
5. Notice. The following is hereby added following the last sentence of Article
XXXII:
"Notwithstanding the foregoing to the contrary, in the event that Tenant
sends a notice to Landlord in connection with an alleged default by
Landlord hereunder, Tenant shall also send a copy of such notice to
Landlord's then current Mortgagee, provided that Tenant has been provided
with the name and address of such Mortgagee.
In Witness Whereof, Landlord and Tenant have entered into this Addendum to
the Lease as of the date set forth above.
LANDLORD: ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP an Illinois
Limited Partnership
ATTEST: BY: EQUITY OFFICE PROPERTIES,
INC., as agent
__________________________________ By:__________________________________
Name (print):_____________________ Name:________________________________
Title:_______________________________
ATTEST: TENANT: GKN Securities Corp.
__________________________________ By: /s/ Carl Goodman
--------------------------------
Name (print):_____________________ Name: Carl Goodman
------------------------------
__________________________________ Title: Chief Financial Officer
-----------------------------
3
<PAGE>
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT made and entered
into as of the __ day of _____, 199_by and among ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP, an Illinois Limited Partnership (the "Owner"), Citicorp
Real Estate, Inc. a Delaware Corporation having an office at 599 Lexington
Avenue, New York, New York 10043 (the "Mortgagee") and GKN Securities Corp., a
_________________ (the "Tenant").
WITNESSETH:
WHEREAS, the Owner owns the improved real property described in Schedule A
annexed hereto (the "Premises");
WHEREAS, the Mortgagee is the owner and holder of the mortgages listed in
Schedule B annexed hereto (which mortgages, together with all amendments,
increases, renewals, modifications, consolidations, spreaders, replacements,
combinations, supplements, substitutions and extensions thereof, now or
hereafter made, are hereinafter collectively referred to as the "MORTGAGE");
WHEREAS, puruant to a lease agreement, dated___, 19__(the "Lease"), the
Tenant has leased from the owner, as landlord, a portion of the Premises (the
"Leased Premises) more particularly described therein; and
WHEREAS, the Mortgagee has agreed to recognize the status of the Tenant as
tenant under the Lease in the event the Mortgagee shall acquire the title to the
Premises by foreclosure or by the acceptance of a deed in lier thereof, and the
Tenant has agreed to confirm the subordination of the Lease to the Mortgage and
to attorn to the Mortgagee in any such event, all on the terms more particularly
set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter mentioned and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. The Mortgagee hereby consents to the execution and delivery by the Owner
of the Lease.
2. The Tenant hereby agrees that the Lease is and shall be under, subject
and subordinate at all times to the lien, right, title and terms of the
Mortgage. In confirmation thereof, the Tenant shall promptly execute,
acknowledge and deliver instruments that the Mortgagee may reasonably request
from time to time to evidence the foregoing.
3. So long as (a) the Tenant is not in default under the Lease or hereunder
beyond any applicable notice and/or cure periods, (b) the Lease has not been
cancelled or terminated by the Owner or the Tenant pursuant to the terms of the
Lease, (c) the Tenant has not surrendered, vacated or abandoned the Leased
Premises and remains in actual possession of the Leased Premises, and (d) except
as required by the terms of the Lese, the Tenant has not made any advance
payment of rent or additional rent in excess of one month, then, in the event
that the Mortgagee shall commence an action to foreclose the Mortgage (or any of
them) or to otherwise acquire title to, and possession of, the Premises, the
Tenant shall not be joined as a party defendant in any such action or proceeding
and the Tenant shall not be disturbed by the Mortgagee in its possession of the
Leased Premises as provided in the Lease, nor shall the Lease
<PAGE>
be terminated by the Mortgagee unless, as a condition precedent to commencing or
proceeding with any such action to foreclose the Mortgage (or any of them) or to
otherwise acquire title to, and possession of, the Premises, the Mortgagee is
required by statute, rule, judicial decision or the court in which such action
or proceeding has been commenced ro is pending to so name the Tenant as a party
defendant. For the purposes of this Agreement, rent abatements or free rent
periods expressly provided for in the Lease shall not be deemed to be an advance
payment of rent or additional rent.
4. If (a) the Mortgagee shall acquire title to, and possession of, the
Premises upon foreclosure in an action in which the Mortgagee shall have named
the Tenant as a party defendant and the conditions set forth in Paragraphs 3(a),
(b), (c) and (d) are then satisifed, then in such event, the Mortgagee and the
Tenant shall enter into ta new lease upon the same terms and conditions as were
contained in the Lease, except that (x) the obligations and liabilities of the
Mortgagee under any such new lease shall be subject to the terms and conditions
of this Agreement, (y) without limiting the generality of clause (x) above, the
Mortgagee shall, in no event, have any obligation or liability to the Tenant
under any such new lease beyond those of the Owner as were contained in the
Lease and the Mortgagee's liability shall be only to the extent assumed by the
Mortgagee under Agreement, and (z) the expriation date of such new lease shall
coincide with the original expiration date of the Lease, giving effect to
renewal or extension options contained in the Lease. The Tenant shall execute
promptly any such new lease and shall attorn to the mortgagee so as to extablish
direct privity between the Mortgagee and the Tenant.
5. If the Mortgagee shall acquire title to, and possession of, the Premises
upon foreclosure in an action in which the Tenant has not been named as a party
defendant, or by deedin which the Tenant has not been named as a party
defendant, or by deed in lieu of foreclosure (or if the Tenant has been so named
by the Lease has not been terminated), or by any other means, and the conditions
set forth in Paragraphs 3(a), (b), (c) and (d) are then satisfied, then, in such
event:
(a) the Tenant shall be deemed to have made a full and complete
attornment to the Mortgagee so as to establish direct privity between the
Mortgagee and the Tenant and in confirmation thereof, the Tenant shall promptly
execute, acknowledge and deliver any instruments that the Mortgagee may
reasonably request form time to time to evidence the foregoing;
(b) all obligations of the Tenant under the Lease shall continue in
full force and effect and be enforceable against the Tenant by the Mortgage,
with the same force and effect as if the Lease had originally been made and
entered into directly by and between the Mortgagee, as landlord thereunder, and
the Tenant; and
(c) the Mortgagee shall recognize and accept the rights of the Tenant
under the Lease and shall thereafter assume the obligations of the Owner under
the Lease first falling due after acquisition of title to possession of the
Premises, all of the foregoing being subject, in all events, to (i) the
provisions of Paragraphs 6,7, and 8 below and (ii) the Tenant's unconditional
and irrevocable waiver, as against the Mortagee, of any defaults of the Owner
(whether or not curable) which occurred prior to the Mortgagee acquiring title
to, and paossession of, the Premises, which waiver shall be deemed to have been
given upon the Mortgagee's acquisition of title to the Premises.
6. If the Mortgagee shall acquire title to, and possession of, the Premises
upon foreclosure in an action, whether or not the Tenant has been named as a
party defendant, or by deed in lieu of foreclosure, or by any other means, the
provisions of this Agreement shall supersede any provisions of the Lesae which
expressly conflict with the provisions of this
<PAGE>
Agreement.
7. (a) Nothing herein contained shall impose any obligation upon the
Mortgagee to perform any of the obligations of the Owner under the Lease unless
and until the Mortgagee shall acquire title to, and take possession of, the
Premises, and in any event, the Mortgagee shall have no liability with respect
to any default of the Owner under the Lease occurring prior to the date on which
the Mortgagee shall acquire title to, and take possession of, the Premises.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in the Lease, neither the Mortgagee nor any of the officers,
directors, shareholders, agents, representatives, servants, employees of, or
partners in the Mortgagee shall have any personal liability to the Tenant, and
the liability of the Mortgagee, in any event, shall not exceed and shall be
limited to the Mortgagee's interest in the Premises.
8. The Tenant hereby agrees that, notwithstanding anything to the contrary
continued in this Agreement or the Lease:
(a) no amendment, modification, termination, assignment or sublease of
the Lease and no surrender of all or any portion of the Leased Premises shall be
effective against the Mortgagee, without consent thereto having been given in
writing by the Mortgagee unless such consent by the Mortgagee was not required
to be obtained by the Owner under the Mortgage and/or related loan documents;
(b) the Mortgagee shall not be bound by any advance payment of rent or
additional rent to the Owner in excess of one (1) month, in the case of rent, or
in excess of one (1) periodic payment in advance, in the case of additional
rent, except as specifically required in the Lease or expressly approved in
writing by the Mortgagee;
(c) the Mortgagee shall not be subject to any offsets, claims,
counterclaims or defenses which arise out of a default by the Owner accruing
prior to the date on which the Mortgagee shall acquire title to, and take
possession of, the Premises;
(d) the Mortgagee shall not be bound by any covenant to undertake or
complete any construction of the Premises, the Leased Premises or any portion
thereof or to make any payment or incur any liability in connection therewith;
(e) the Mortgagee shall not be bound by any obligation of the Owner to
make any payment to the Tenant, except that (i) subject to the terms of the
Lease, the Mortgagee shall be liable for the timely return on any security or
other deposit actually received by the Mortgagee and acknowledged in writing by
the Mortgagee to be a security deposit for the Tenant, and (ii) the Mortgagee
shall be liable on account any prepayments of rent or other charges owing to the
Tenant if the funds are actually received by the Mortgagee and acknowledged by
the Mortgagee in writing as a prepayment of rent by the Tenant;
(f) the Mortgagee shall not be bound by any obligation to repair,
replace, rebuild or restore the Premises, the Leased Premises, or any part
thereof, or to make any payment or incur any liability in connection therewith,
in the event of damage by fire or other casualty, or in the event of partial
condemnation, beyond such repair, replacement, rebuilding or restoration as can
reasonably be accomplished with the use of the net insurance proceeds or the net
condemnation award actually received by or made available to the Mortgagee with
respect to the Leased Premises, and in the event Mortgagee does not make such
repair, replacement, rebuilding or restoration, the Tenant shall be entitled to
exercise whatever rights or remedies it may have under the Lease, if any, for
Owner's failure to complete such repair, replacement, rebuilding or restoration
in the event of damage, destruction or condemnation under the Lease;
<PAGE>
and
(g) the Mortgagee shall not be required to remove any person occupying
the Leased Premises, or any part thereof, and shall not be liable for any acts
or omissions of any other tenant, subtenant or other party who may have
possession of any portion of the Leased Premises.
9. The Tenant hereby agrees to provide the Mortgagee with prompt notice of
any asserted default by the Owner of its obligations under the Lease, and copies
of all documents relating thereto. In the event any such asserted default
constitutes a basis for the cancellation of the Lease by the Tenant, the Tenant
hereby agrees that the Lease shall not be cancelled or terminated until the
Mortgagee shall have a reasonable period of time within which to (a) obtain
possession of the Leased Premises, and (b) cure such default; provided, however
that (i) the Tenant will use reasonable efforts to cooperate with any actions by
the Mortgagee to effect any such cure, and (ii) nothing contained here shall
obligate the Mortgagee to effect any such cure.
10. The Tenant and the Owner hereby agree that, in the event that the
Mortgagee delivers to the Tenant a notice (i) stating that an Event of Default
(as defined in the Mortgage) has occurred under the Mortgage (or any of them),
and (ii) requesting that all rent and additional rent due under the Lease be
thereafter paid to the Mortgagee, the Tenant shall pay, and is hereby authorized
and directed by the Owner to pay, such rent and additional rent directly to the
Mortgagee. Delivery to the Tenant of the aforedescribed notice from the
Mortgagee shall be conclusive evidence of the right of the Mortgagee to receive
such rents and payment of the rents by the Tenant to the Mortgagee pursuant to
such notice shall constitute performance in full of the Tenant's obligation
under the Lease to pay such rents to the Owner. If and to the extent that the
Lease or any provision of law shall entitle the Tenant to notice of any
mortgage, the Tenant acknowledges and agrees that this Agreement shall
constitute such notice to the Tenant of the existence of the Mortgage(s). The
Tenant acknowledges that it has notice that the Lease and the rent and all other
sums due thereunder have been assigned to the Mortgagee as part of the security
for the Mortgage.
11. Each of the Owner and the Tenant represents and warrants to the
Mortgagee that, as of the date hereof, (i) there are no agreements other than
the Lease in existence of contemplated between the Owner and the Tenant,
relating to the Premises or the Leased Premises or with respect to any other
matter related to the Tenant's occupancy of the Leased Premises, and (ii)
neither the Owner nor the Tenant is in default beyond applicable notice and/or
cure periods under the Lease and, to the best of its knowledge, no event has
occurred which with the giving of notice, the passage of time or both would
constitute a default under the Lease.
12. The Owner, by its execution of this Agreement, agrees to be bound by
and to act in accordance with the terms and conditions hereinabove contained.
13. This Agreement (i) shall be governed by, and construed and interpreted
in accordance with, the internal laws of the State of Connecticut without regard
to principles of conflicts of law, (ii) contains the entire agreement among the
parties with respect to the subject matter hereof, and (iii) may not be
modified, nor may any provision hereof be waived, orally or in any manner other
than by an agreement in writing signed by the parties hereto or their respective
successors, administrators and assigns.
14. All notices, demands, offers, elections, or other communications
required or permitted hereunder shall be in writing and shall be personally
delivered, deliveries by overnight courier, or mailed by registered or certified
mail, postage prepaid, with return receipt requested and addressed to the party
at its address set forth below or sent by facsimile, at the facsimile
<PAGE>
numbers set forth below:
if to the Tenant, to:
with copies to:
if to the Owner, to:
ZML-Stamford Atlantic Forum
Limited Partnership
c/o Equity Office Properties, Inc.
Two North Riverside Plaza
Suite 2244
Chicago, Illinois 60606
Telephone No: (312) 454-1800
Facsimile No: (312) 454-1499
Attention: Senior Vice President
Office Buildings
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza
Suite 1601
Chicago, Illinois 60606
Telephone No: (312) 466-3456
Facsimile No: (312( 454-0335
Attention: Bruce C. Strohm, Esq.
and a copy to:
Equity Office Properties, Inc.
Two North Riverside Plaza
Suite 2244
Chicago, Illinois 60606
Telephone No.: (312) 454-1800
Facsimile No: (312) 454-0805
Attention: Mr. Richard D. Kincaid
if to the Mortgagee, to:
Citicorp Real Estate, Inc.
599 Lexington Avenue
New York, New York 10043
Telephone No.: (212)_____-_______
Facsimile No.: (212) _____-________
Attention: Tri-State Department,
Department Head
Reference:____________(Borrower)
__________
__________(Premises)
599 Lexington Avenue
New York, New York 10043
<PAGE>
Attention:______________
(Booking Office)
with a copy to:
Citicorp Real Estate, Inc.
599 Lexington Avenue
New York, New York 10043
Telephone No.: (212)_____-_______
Facsimile No.: (212) _____-________
Attention: Michael W. Broido, Esq.
General Counsel
Reference:____________(Borrower)
____________(Premises)
____________
599 Lexington Avenue
New York, New York 10043
Attention:_______________
(Booking Office)
with an additional copy to :
Schulte Roth & Zabel
900 Third Avenue
New York, New York 10022
Telephone No.: (212) 758-0404
Facsimile No.: (212) 593-5955
Attention: Lester M. Bliwise, Esq.
or at such other address or facsimile number, as from time to time, shall be
supplied by a party to the others by like notice, and shall be deemed to have
been given or delivered, if personally delivered, upon deliver, if sent by
overnight courier, on the first (1st) business day after being sent, if sent by
mail, on the third (3rd) business day after mailing, and if sent by facsimile,
on the date of receipt of such facsimile. Each party shall be entitled to rely
on all communications which purport to be on behalf of the party and purport to
be signed by and authorized party or the above indicated attorneys.
15. All rights of the Mortgagee hereunder shall inure to the benefit of,
and all obligations of the Mortgagee shall e binding upon, the Mortgagee and,
its successors, assigns and nominees, including, without limitation, the grantee
under a deed in lieu of foreclosure and/or the purchaser of the Premises at a
foreclosure sale or at any sale of the Premises following the granting of a deed
in lieu of foreclosure or following foreclosure; provided, however, that
following any sale or other transfer of its interest in the Premises, the
Mortgagee and any such grantee or purchaser (as the case may be) shall be fully
released and discharged of and from any and all obligations and liabilities of
any kind hereunder or under the Lease and/or under any new lease given pursuant
to Paragraph 4 hereof. Without limiting the generality of the foregoing, (a)
upon any sale or other transfer by the Mortgagee of its interest in the
Premises, the purchase or transferee of such interest shall be deemed to have
assumed and agreed to carry out any and all covenants and obligations of the
Mortgage hereunder and under the Lease and (b) this Agreement shall be binding
upon and inure to the benefit of the successors, administrators and permitted
assigns of the Owner and Tenant hereto.
<PAGE>
IN WHITNESS WHEREOF, this Agreement has been executed as of the day and year
first set forth above.
OWNER:
ZML-STAMFORD ATLANTIC FORUM
LIMITED PARTNERSHIP
BY: Equity Office Properties,
Inc., as its agent
By:___________________________________
Name:_________________________________
Title:________________________________
MORTGAGEE
CITICORP REAL ESTATE, INC., A Delaware
Corporation
By:___________________________________
Name:_________________________________
Title:________________________________
TENANT:
GKN Securities Corp.
By: /s/ Carl Goodman
----------------------------------
Name: Carl Goodman
--------------------------------
Title: Chief Financial Officer
-------------------------------
EXHIBIT 10.6
THREE ISLANDS ASSOCIATES RETAIL.
1001 Cherry Street Centre 23123 South State Road 7
Suite 308 Suite 255
Columbia, Missouri 65201 Boca Raton, FL 33428
STANDARD SHOPPING CENTER LEASE
This lease of January 19, 1996, by and between Three Islands Associates
Retail, A Missouri General Partnership (Lessor) and Shochet Securities, Inc.
(Lessee) is as follows:
SECTION ONE - Description of Premises
(a) Lessor, in consideration of the rents, covenants and agreements herein
contained, leases to Lessee premises, which are a portion of the Seawalk Pointe
Shopping Center, containing approximately 5,000 square feet, in Hallandale,
Broward County, Florida which premises are shown on the diagram annexed hereto
on Schedule A (the "premises" of "demised premises").
(b) This lease includes the non-exclusive right of Lessee and its agents,
servants, successors, assigns, licensees, invitees, sublessees,
concessionaires, customers, suppliers, and patrons to use and enjoy throughout
the term of this lease the "common areas" of shopping center, including: the
driveways, entrances, exists, roadways, parking areas, sidewalks, exterior faces
of walls, walls, strollways, malls, truck, routes and rights-of-way, and other
features and facilities provided for the general uses and purposes of all
Lessees in the shopping center.
SECTION TWO - Term
(a) The term of this lease is ten (10) years and fifteen (15) days
commencing on February 15, 1996 and ending on February 28, 2006.
SECTION THREE - Construction of Improvements
(b) Lessor reserves the right to construct additional improvements in the
shopping center even though such additional improvements are not shown on said
plans and specifications.
SECTION FIVE - Rent and Related Matters
(a) Minimum rent. Lessee shall pay Lessor the yearly minimum fixed of
Ninety-Five Thousand Dollars & 00/100 ($95,000.00) payable in advance in equal
monthly installments of Seven Thousand Nine Hundred Sixteen Dollars & 67/100
($7,916.67) on the First day of each and every month during the first year of
this lease (February 15, 1996 - February 28, 1997).
In the event Lessee is delinquent with the rental payment during a
particular month and has been delinquent for two of the previous three months,
Lessor has the right to accelerate the rent payments and demand the entire three
months. Lessor has the right to accelerate the rent payments and demand he
entire minimum yearly rent paid at that time. In other words, if rent is not
received by Lessor by the fifth day of the month in which it is due and has been
received after the fifth of the month in which it was due for two of the
previous three month, Lessor has the right to demand the entire yearly minimum
rent be paid in advance.
1
<PAGE>
(e) Rent Due. It shall not be necessary for Lessor to demand the rent or
any other payment or payments of money required to be made under the terms of
this lease. Lessee shall pay each installment of rent and other payments as the
same shall become due Lessor.
SECTION SIX - Late Charge
If any payment due is not received by Lessor by the tenth (10th) day of the
month in which it is first due, a late charge of an additional five percent (5%)
of the payment shall be paid to Lessor.
SECTION SEVEN Adjustment of Rent - See Addendum
SECTION EIGHT - Security Deposit
SECTION NINE - Use of Premises
(a) Lessee shall use the premises for the maintenance and operation of
professional offices and for no other purpose including, without limitation,
a stock brokerage.
(b) Lessee shall keep the leased premises open, stocked and staffed for
business during the hours of 9:00 o'clock a.m. to 5:00 o'clock p.m. five (5)
days a week, except on Saturday and Sunday.
SECTION TEN - Advertising.
(a) Lessee agrees to install an interior-lit, professionally-made sign on
the premises and maintain such sign for the duration of this lease and any
extensions thereof. Detailed drawings and specifications will be
2
<PAGE>
submitted to Lessor for written approval prior to installation and any
subsequent changes to the sign must be made only after express written consent
of Lessor. Lessee shall not install any sign or signs on the premises without
Lessor's written consent, which consent shall not be unreasonably withheld or
delayed. (b) Lessee shall not maintain any wall or window display or advertising
which is not in good taste.
SECTION ELEVEN - Common Area Maintenance and Repair
(a) Landlord will operate, manage, maintain and repair or cause to be
operated, managed, maintained or repaired the common area of the center.
"Landlord's common area costs" shall mean all costs of operating and maintaining
the common area in a manner deemed by Landlord appropriate for the best interest
of Tenants and other occupants of the center. Included among the costs and
expenses which constitute Landlord's common area costs but not limited thereto
shall be, at the option of Landlord, all costs and expenses of protecting,
operating, managing, repairing, repaving, lighting, cleaning, painting,
striping, insuring (including but not limited to fire and extended coverage
insurance on common area, insurance protecting Lessor against liability for
personal injury, death and property damage and worker's compensation insurance),
removing of snow, ice and debris, police protection, security and security
patrol, fire protection, regulating traffic, inspecting, repairing and
maintaining of machinery and equipment used in the operation of the common area,
depreciation of machinery and equipment, cost and expense of inspecting,
maintaining, repairing and replacing storm and sanitary drainage systems and the
expense of installing, maintaining and repairing burglar and fire alarm systems,
cost and expense of landscaping and shrubbery, expenses of utilities and
administrative and overhead cost equal to fifteen percent (15%) of all of the
foregoing and all other of Lessor's common area cost.
(b) The cost of roof repair, the cost of maintenance, repair and deferred
maintenance and the cost of utilities, including the maintenance and repair of
any heating and/or cooling units shall be borne by the small rental tenants of
the shopping center, and shall be prorated and paid by Lessee in the proportion
to the square feet occupied by Lessee as it bears to the total leasable square
feet of the shopping center, excluding outlots and anchors which are required to
maintain themselves. Additionally, Lessee will be responsible for its prorata
share of administration costs charged by Lessor, not to exceed fifteen percent
(15%) to the total common area maintaining charges.
Lessee shall escrow with Lessor a portion of the maintenance costs equal to
One Dollar and Seventy-Five Cents ($1.75) per square foot per annum in the
demised premises payable in equal monthly installments on the first day of each
month during this lease, equaling Seven Hundred Twenty-Nine Dollars and 17/100
($729.17) or Eight Thousand Seven Hundred Fifty Dollars and 00/100 ($8,750.00)
per year.
(c) The maintenance charges and the costs of utilities will be adjusted
every year to an amount equal to the average per square foot cost of the
preceding year and this amount will be added to Lessee's monthly rent. If
expenditures exceed the amount escrowed, then Lessee will promptly pay Lessor
such increased amounts as a part of the next rent payment.
(d) Lessee's prorata share of all common area maintenance charges is equal
to Lessee's square feet divided by the total leasable square footage in the
shopping center, excluding outlots and anchors which are required to maintain
themselves.
SECTION TWELVE -- Sprinkler System
If a sprinkler system is provided by Lessor, Lessee shall pay to Lessor as
additional rent Ten Cents ($0.10) per square foot of floor area per year,
prorated for partial lease year, in equal monthly installments in advance on the
first day of each full calendar month during the lease year equaling Forty-One
Dollars and 67/100 ($41.67).
SECTION THIRTEEN -- Repairs and Maintenance in General
(a) Lessee shall clean, repair, maintain and provide preventive maintenance
for all of the demised premises including but not limited to non-structural
interior portions thereof, show windows and moldings, doors, windows, plate and
window glass, floors, and shall clean, repair and replace when necessary the
plumbing (in the interior of the demised premises), heating, air-conditioning,
electrical (including meter bases that serve the demised premises) and sewage
systems, filters, facilities and appliances located in the demised premises and
on the roof thereof, if any. Upon request Lessee shall provide written evidence
each year that all preventative maintenance measures have been made or taken by
it in connection with the air-conditioning.
(b) Lessee shall use licenses exterminators to keep the demised premises
free from termites and common pests.
(c) Lessee shall be liable for Lessor for all cleaning, repairs and
maintenance causes by it, its agents, invitees, guests, servants, independent
contractors or employees.
(d) Lessor shall maintain the foundations and exterior walls.
Three Islands Associates Retail 3
<PAGE>
SECTION FOURTEEN -- Utilities
Lessee shall pay for all utilities, including gas, water, electricity and
sewer charges for the demised premises. If Lessor supplies any utilities to the
demises premises, Lessee will reimburse Lessor therefor as a part of the next
rent payment.
SECTION FIFTEEN -- Attorney's Fees
If it is necessary for Lessor to employ an attorney to enforce any of the
provisions of this lease, Lessee shall reimburse Lessor for the attorney's fee
incurred and court costs, as well as the other expenses of litigation, if Lessor
is successful.
SECTION SIXTEEN -- Alterations
Lessee shall not make any alterations or additions to the demised premises
without Lessor's written consent. All alterations, additions and improvements
made by Lessee to or on the demised premises become the property of Lessor.
SECTION SEVENTEEN -- Repairs and Destruction of Improvements
(a) Damage, destruction or partial destruction of any improvements in the
shopping center shall not release Lessee from any obligation of this lease
unless the demised premises are untenantable for two hundred ten (210) days; if
the demised premises are untenantable for two hundred ten (210) days either
party may terminate this lease.
(b) If the premises are untenantable after 210 days and Lessor is
proceeding to rebuild the premises, then from the 210th day until Lessor's
delivery of the premises to Lessee the yearly minimum fixed rent and all triple
net fees (i.e., CAM, insurance and real estate taxes) shall abate. The proceeds
of any policy or policies in insurance covering this destruction or partial
destruction of the demised premises are the property of Lessor.
SECTION EIGHTEEN -- Liens
(a) Lien of Lessor. Lessor shall have a lien on all improvements placed in
or on the demised premises by Lessee and on all fixtures, furniture, and
merchandise kept or used on the premises to secure payment of all sums due
Lessor and to secure performance of all Lessee's obligations under this lease.
(b) Mechanic's Lien. Lessee shall, within thirty (30) days of filing, cause the
discharge of record of any mechanics' liens filed against the demised premises
by payment, deposit, bond or court order. Breach of this provision shall be
treated as the failure to pay the rent due Lessor under this lease.
SECTION NINETEEN -- Indemnification of Lessor
Unless caused by the intentional act, intentional omission or negligence of
Lessor, Lessor shall not at any time be liable for any injury or death to
persons including customers and employees of Lessee, or loss, destruction or
damage to property caused by water, rain, snow, frost, fire, storm and
accidents, occurring in, on, or about the demised premises, whether such shall
be caused by or arise out of any act, omission, or negligence of Lessee or of
any occupant, subtenant, visitor or use of any portion of the demised premises.
Lessor shall not be liable for any breakage, stoppage or leaking of water, gas,
heating, sewer pipes or plumbing, on, about or adjacent to said premises.
SECTION TWENTY -- Waiver of Subrogation
Each of the parties hereto does hereby release the other party and all
other tenants of the shopping center known as The Seawalk Point Shopping Center
from all liability for damage due to any act or neglect of the other party
(except as hereinafter provided) occasioned to the property owned by said
parties which is or might be incident to or the result of a fire or any other
casualty against loss from which either of the parties is now carrying or
hereafter may carry insurance; provided, however, that the releases herein
contained shall not apply to any loss or damage occasioned by the willful acts
of either of the parties hereto. The parties further covenant that any insurance
obtained on their respective properties shall contain an appropriate provision
whereby the insurance company or companies consent to the mutual release of
liability contained in this paragraph.
SECTION TWENTY-ONE -- Insurance
(a) Lessee shall purchase and continue in force, in the names of Lessor and
Lessee, general liability insurance against any and all claims for injuries to
persons occurring in, on, or about the demised premises, during the term of this
lease; such insurance at all times will be in an amount not less that $1,000,000
combined single limit for bodily injury and property damage in one occurrence.
Policy must be issued by a company approved by Lessor, and certificates of
coverage shall be furnished to Lessor annually.
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(b) During the term of this lease, Lessor will carry standard property and
casualty insurance upon the building(s) and other improvements comprising the
Lessor's portion of the shopping center, including the parking lot area. Lessee
will pay to Lessor its prorata share of the premium for such insurance placed
upon the shopping center, which prorata share shall be ascertained by
multiplying the amount of such insurance premium by a fraction whose numerator
is the total number of square feet of floor area in Lessee's premises and whose
denominator is the square feet of the shopping center which are insured by
Lessor including Lessee's premises. Lessor will make demand for the
reimbursement from Lessee for such insurance premium within one hundred eighty
(180) days of the day upon which Lessor shall pay such insurance premium, which
will be paid by Lessee within thirty (30) days of its receipt thereof. Each such
demand for reimbursement shall be accompanied by a copy of the insurance premium
invoice.
(d) Lessee agrees to hold Lessor harmless from all claims which may arise
from, on, in or about the demised premises when such claims arise out of or are
caused in whole or in part of defective, dangerous or unsafe condition of the
premises, equipment, fixtures or appurtenances required by law or the terms of
this lease to be maintained by Lessee.
(e) In consideration of the large volume of business that the tenancy of
Wal-Mart Stores, Inc. generates for the shopping center, and in consideration of
the fact that Wal-Mart Stores, Inc. has executed a similar waiver in favor of
all tenants in the shopping center, including Lessee, which Lessee acknowledges
to be sufficient consideration, Lessee, and its employees, agents and every
person claiming by, through or under Lessee, hereby releases Wal-Mart Stores,
Inc. and its employees and agents, from any and all liability or responsibility
(to Lessee or anyone claiming by, through or under Lessee by way of subrogation
or otherwise) for any loss or damage to any property (real or personal) caused
by fire or any other insured peril covered by any insurance policies or the
benefit of either Lessee, or Wal-Mart Stores, Inc. even if such loss or damage
shall have been caused by the fault or negligence of Wal-Mart Stores, Inc., its
employees or agents.
(f) Lessee shall escrow with Lessor a portion of the insurance costs equal
to Thirty Cents ($0.30) per square foot per annum in the demised premises
payable in equal monthly installments on the first day of each month during this
lease equaling One Hundred Twenty-Five Dollars and 00/100 ($125.00) or Fifteen
Hundred Dollars and 00/100 ($1,500.00) per year. Should Lessee's actual prorata
share if insurance costs exceed the amount escrowed, then upon presentation by
Lessor of the receipted insurance premium invoices for the year just ended and
the amount of the Lessee's proportionate share of said charges, Lessee will
promptly pay Lessor the balance due.
SECTION TWENTY-TW0 -- Real Estate Taxes, General Taxes and Assessments
(a) Lessor will pay all real estate taxes, general taxes and assessments by
a governmental authority for land and improvements which may be levied or
assessed by any lawful authority against the shopping center where the demised
premises are situated. Commencing with the date Lessee shall open its premises
for business and during the term of this lease for each full calendar year and
proportionately for any part of a calendar year, Lessee agrees to pay Lessor its
prorata share of any such taxes and assessments levied or assessed against the
shopping center.
(b) Lessee's prorata share of any such taxes and assessments shall be
ascertained by multiplying the amount of such tax by a fraction whose numerator
is the total amount of square feet of floor area in Lessee's premises and whose
denominator is the total amount of leased square feet of all the buildings in
the lessor's portion of the shopping center, including Lessee's premises,
excluding outlots and anchors. If they are separately assessed. Lessor will make
demand for reimbursement from Lessee and each such demand shall be accompanied
by a copy of the receipted tax statements for the taxes in respect of which
reimbursement by a copy of the receipted tax statements for the taxes in respect
of which reimbursement is requested for the tax year just ended and the amount
of Lessee's proportionate share of the said taxes. Lessee will pay to Lessor
within thirty (30) days following its receipt of Lessor's statement the amount
shown as due thereon.
(c) If it is deemed that the taxes are over-assessed, the Lessor has the
right to hire a company on a contingency basis to have the assessment reduced to
its proper level. The tenant will be responsible for his prorata share of the
costs to have this assessment reduced to its proper level. The tenant will be
responsible for its prorata share of the costs to have this assessment reduced;
however, it is understood that the cost of this service will be less than
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the realized savings and in no event will the tenant be responsible for an
amount greater than the original assessment dictates.
(d) Lessee shall escrow with Lessor a portion of such tax costs equal to
One Dollar and Forty-Five Cents ($1.45) per square foot per annum in the demised
premises payable in equal monthly installments on the first day of each month
during this lease equaling Six Hundred Four Dollars and 17/100 ($604.17) or
Seven Thousand Two Hundred Fifty Dollars and 00/100 ($7,250.00) per year. Should
Lessee's actual prorata share of taxes exceed the amount escrowed, then upon
presentation by Lessor of the receipted tax statements for the year just ended
and the amount of the Lessee's proportionate share of said charges, Lessee will
promptly pay Lessor the balance due.
SECTION TWENTY-THREE -- Assignment and Sublease
Lessee will not assign this lease or sublet (which term shall, without
limitation, include the granting of concessions, license and the like) the whole
or any part of the leased premises without first receiving the written consent
of Lessor. In the event Lessor does consent does consent to any assignment
subletting, Lessee herein named shall remain fully liable for all of the
obligations of the Lease. Lessee's obligation shall continue throughout the term
of this lease despite any assignments or subletting. In other words, if Lessor
consents to an assignment or subletting and the assignee or subtenant or any
subsequent assignees or subtenants default in the performance of any obligation
of this lease, Lessee shall be liable therefor. In the event Lessor consents to
an assignment or subletting, Lessee shall immediately pay Lessor $500.00 to
compensate Lessor for Lessor's expense incurred in subletting.
SECTION TWENTY-FOUR -- Service of Notice
Service of any notice served by Lessor on Lessee shall be sufficient on
Lessee or any of its agents or employees, or ported on or near the front door of
the premises, or if sent by certified or registered mail with sufficient postage
attached to Lessee at the latest address furnished by Lessee.
SECTION TWENTY-FIVE -- Default
(a) Failure of Lessee to pay any installment of rent or other sum when due
shall be a default. Failure of Lessee to promptly perform each and every
provision of this lease shall be a default. If Lessee vacates the premises, that
shall be a default. If Lessee defaults, Lessor at its option may terminate
Lessee's rights under this lease, but Lessor's declaration shall not relieve
Lessee of its obligation under this lease.
Possession of the demised premises and all additions and improvements
thereon shall be delivered to Lessor upon ten (10) days' written notice that
lessor has exercised its option, and Lessor and its representatives without
further notice to Lessee and without issuance or service of any summons,
petition or complaint shall be entitled to any may reenter, take immediate
possession of the demised premises by whatever means are necessary and remove
all persons and property from the demised premises. In any such event, Lessee
hereby expressly waives the service of any notice in writing of intention to
reenter.
(b) Lessee's obligation shall continue throughout the term of this lease
despite any default or repossession by Lessor.
(c) If Lessor takes possession of the demised premises and is unable to
rent it for an amount equal to the highest rent paid by LSessee in any year of
this lease, Lessee shall pay Lessor the difference throughout the term of this
lease.
SECTION TWENTY-SIX -- Termination
At the end of the term of this lease, Lessee shall surrender to Lessor the
demised premises, together with all improvements therein in good condition,
except for ordinary wear and tear. No items of personal property or fixtures
will be removed from the demised premises including, but not limited to,
carpeting, walls, lighting, without the Lessor's written approval.
SECTION TWENTY-SEVEN -- Entry by Lessor
Lessor and its agents shall have free access to the demised premises during
all reasonable hours after reasonable prior notice, except in case of emergency,
for the purposes of inspection and repair. Within six (6) months prior to the
end of this lease, Lessor may place "For Lease" signs on the demised premises,
not to be affixed to the building.
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SECTION TWENTY-EIGHT -- Effect of Bankruptcy
If Lessee becomes bankrupt or makes an assignment for benefit of creditors,
or in the event a receiver is appointed for Lessee, then Lessor may terminate
this lease and take possession of the demised premises without waiving any of
its rights.
SECTION TWENTY-NINE -- Condemnation
Should the demised premises of sufficient portion thereof be condemned so
as to render the remainder unusable, Lessee have the option to terminate this
lease from the date of the taking of possession by the condemnor.
SECTION THIRTY -- Holding Over
If Lessee holds over or continues possession after the termination of this
lease, Lessee shall pay three (3) times the rent computed on a daily basis of
the highest rent paid by Lessee during the term of this lease.
SECTION THIRTY-ONE -- Subordination
This lease is subject and subordinate to all ground or underlying leases
and to all deeds of trust or mortgages which may now or hereafter effect the
real property of which the demised premises are a part, and to all renewals,
modifications, consolidations, replacements and extensions thereof.
SECTION THIRTY-TWO -- Terms Not to Be Revealed
Lessee shall not reveal any of the terms of this lease to anyone except top
its lender, attorney and/or accountant.
SECTION THIRTY-THREE -- No Waivers
No waiver of any causes for termination, by acceptance of rent or
otherwise, shall constitute a waiver of any past, present or future causes for
termination. Any failure of Lessor to exercise any powers conferred by this
lease, or to insist upon strict compliance by Lessee of its obligations under
this lease, and not custom or practice which may become established which varies
the terms of this lease shall constitute a waiver of Lessor's right to enforce
the terms of this lease as they are written.
SECTION THIRTY-FOUR -- Miscellaneous
Any amendments or changes to this lease must be in a written form and
attached to this lease agreement as an Amendment or Addendum by the parties
hereto and this lease is binding to the parties, their successors, heir or
assigns. This lease agreement supersedes any and all verbal agreements.
SECTION THIRTY-FIVE -- Governing Law
The laws of Florida shall govern this lease.
SECTION THIRTY-SIX -- Expansion
If, at any time during the term of this Lease or any extension thereof,
Lessor determines that the premises leased to Lessee hereunder are needed to
accommodate and facilitate expansion of the Wal-Mart store located in the
shopping center, then Lessee shall, at Lessor's sole expense, move the location
of Lessee's business to another site in the shopping center. Rent shall abate
for the period of time Lessee's business is interrupted as a result of such
move, but Lessee shall be entitled to no other compensation from Lessor other
than abatement of rent as aforesaid for the business interruption.
SECTION THIRTY-SEVEN -- Estoppels
Lessee hereby agrees to execute subordination agreements, non-disturbance
agreements, attornment agreements, estoppel certificates and any other
instruments required in connection with the sale of the Leased Premises or the
temporary or permanent financing or refinancing of the Leased Premises within
five (5) days after request by Lessor, provided, however, that such agreements
shall not require Lessee to surrender its rights to possession under this lease
agreement so long as Lessee pays all rentals and complies with all terms of this
lease agreement. Lessor shall execute and deliver to Lessee estoppel
certificates in connection with this Lease within five (5) days after request by
Lessee. Lessee further agrees to furnish to Lessor within (5) days after request
by Lessor a current financial statement for Lessee and for any guarantor of
Lessee's obligations under this lease agreement. If Lessee fails to execute and
furnish any such requested subordination agreement, non-disturbance agreement,
attornment agreement, estoppel certificate, other instrument or current
financial statement within five (5) days after request by Lessor, Lessee shall
be obligated to pay Lessor a delinquency penalty of $20.00
Three Islands Associates Retail 7
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per day for each day thereafter until the same has been furnished. Lessor shall
have the right at any time to assign Lessor's interest under this lease
agreement to secure payment of any mortgage or mortgages now or hereafter placed
upon the Lease premises and to subordinate this lease agreement to any lien or
liens now or hereafter placed upon the Leased Premises to secure the payment of
any such mortgage or mortgages.
SECTION THIRTY-EIGHT -- Certificate of Occupancy
Lessee is to present to Lessor his permanent Certificate of Occupancy
within thirty (30) days from the date of occupancy.
SECTION THIRTY-NINE -- Bad Checks
If the Lessee shall issue a check to the Lessor which is returned unpaid
for any reason, Lessee shall pay Lessor an addition charge of one hundred
($100.00) Dollars for Lessor's expense in connection therewith.
SECTION FORTY -- Exculpation
Notwithstanding anything to the contrary set forth in this lease, it is
specifically understood and agreed by Lessee that there shall be absolutely no
personal liability on the part of Lessor or on the part of the Partners of
Lessor with respect to any of the terms, covenants and conditions of the lease,
and Lessee shall look solely to the equity, if any, of Lessor, in the shopping
center for the satisfaction of each and every remedy of Lessee in the event of
any breach by Lessor of any of the terms, covenants and conditions of the lease
to be performed by Lessor, such exculpation of personal liability to be absolute
and without any exception whatsoever.
SECTION FORTY-ONE -- Hazardous Materials
(a) Lessee covenants and warrants that Lessee, Lessee's Work and any
alterations thereto and Lessee's use of leased premises will at all times comply
with and conform to, at Lessee's own cost and expense, all laws, statues,
ordinances, rules and regulations of any governmental, quasi-governmental or
regulatory authorities ("Laws") which relate to the transportation, storage
placement, handling, treatment, discharge, generation, production or disposal
(collectively "Treatment") of any waste, petroleum product, waste products,
radioactive waste, poly-chlorinated biphenyls, asbestos, hazardous materials of
any kind, and any substance which is regulated by any law, statute ordinance,
rule of regulation (collectively "Waste"). Lessee further covenants and warrants
that it will not engage in or permit any person or entity to engage in any
Treatment of any Waste on or which effects the leased premises.
(b) Immediately upon receipt of any Notice (as hereinafter defined) from
any person or entity, Lessee shall deliver to Lessor a true, correct and
complete copy of any written Notice. "Notice" shall mean any note, notice or
report of any suit, proceeding, investigation, order, consent order, injunction,
writ, award or action related to or effecting or indicating the Treatment of any
Waste in or effecting the leased premises.
(c) Lessee hereby agrees it will indemnify, defend, save and hold harmless
Lessor and Lessor's officers, directors, shareholders, employees, agents,
partners, and their respective, heirs, successors and assigns (collectively
"indemnified Partners") against and from, and to reimburse the indemnified
Parties with respect to, any and all damages, claims, liabilities, loss, costs
and expense (including, without limitation, all attorney's fees and expenses,
court costs, administrative costs and costs of appeals), incurred by or asserted
against the indemnified Parties by reason of or arising out of: (a) the breach
of any representation or undertaking of Lessee under this section or (b) arising
out of the Treatment of any Waste by Lessee or any licensee, concessionaire,
manager or other party occupying or using the leased premises, in or effecting
the leased premises.
(d) Lessor is given the right, but not the obligation, to inspect and
monitor the leased premises and Lessee's use of the leased premises in order to
confirm Lessee's compliance with the terms of this section and the
representations set forth in this section. Lessor may require that Lessee
deliver to Lessor concurrent with Lessee's vacating the leased premises upon the
expiration of this lease, or any earlier vacation of the leased premises by
Lessee, at Lessee's expense, a certified statement by licensed engineers
satisfactory to Lessor, in form and substance satisfactory to Lessor, stating
that Lessee, Lessee's Work and any conformed to all Laws which relate to the
Treatment of any Waste in or effecting the leased premises, however this
provision shall not apply so long as Shochet Securities, Inc. is the Lessee of
the premises.
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SEE ADDENDUM 1 AND ADDENDUM 2 ANNEXED HERETO AND INCORPORATED HEREIN BY THIS
REFERENCE.
(e) Lessee agrees to deliver upon request from
Lessor estoppel certificates to Lessor expressly stipulating whether Lessee is
engaged in or has engaged in the Treatment of any Waste in or effecting the
leased premises, and whether Lessee has caused any spill, contamination,
discharge, leakage, release or escape of any Waste in or effecting the leased
premises, whether sudden or gradual, accidental or anticipated, or any other
nature, at or affecting the leased premises and whether, to the best of Lessee's
knowledge, such an occurrence has otherwise occurred at or effecting the leased
premises.
LESSOR: DATE: WITNESS
THREE ISLAND ASSOCIATES RETAIL ____________ ______________________
By:____________________________ ____________ ______________________
LESSEE:
SHOCHET SECURITIES, INC. ____________ ______________________
By:____________________________
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ADDENDUM - 1
RENT ABATEMENT: Lessor shall grant Lessee nine (9) months "free rent" from
March 1, 1996 through November 30, 1996. Lessee's obligation to pay rent shall
commence at the end of said nine (9) month period, i.e., from December 1, 1996.
During this "free rent" period. Lessee shall be obligated to escrow with Lessor
all triple net fees (i.e., CAM, insurance and real estate taxes).
RENT SCHEDULE:
Second Year of Term: (March 1, 1997 - February 28, 1998) Lessee shall pay
Lessor the yearly minimum fixed rent of Ninety-Seven Thousand Eight Hundred
Fifty Dollars and 00/100 ($97,850.00) payable in advance in equal monthly
installments of Eight Thousand One Hundred Fifty-Four Dollars and 17/100
($8,154.17) on the first day of each and every month during the second year of
this lease.
Third Year of Term: (March 1, 1998 - February 28, 1999) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Thousand Seven Hundred
Eighty-Five Dollars and 50/100 ($100,785.50) payable in advance in equal monthly
installments of Eight Thousand Three Hundred Ninety-Eight Dollars and 79/100
($8,398.79) on the first day of each and every month during the third year of
this lease.
Fourth Year of Term: (March 1, 1999 - February 29, 2000) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Three Thousand Eight Hundred
Nine Dollars and 07/100 ($103,809.07) payable in advance in equal monthly
installments of Eight Thousand Six Hundred Fifty Dollars and 76/100 ($8,650.76)
on the first day of each and every month during the forth year of this lease.
Fifth Year of Term: (March 1, 2000 - February 28, 2001) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Six Thousand Nine Hundred
Twenty-Three Dollars and 34/100 ($106,923.34) payable in advance in equal
monthly installments of Eight Thousand Nine Hundred Ten Dollars and 28/100
($8,910.28) on the first day of each and every month during the fifth year of
this lease.
Sixth Year of Term: (March 1, 2001- February 28, 2002) Lessee shall pay the
Lessor yearly minimum fixed rent of One Hundred Ten Thousand One Hundred
Thirty-One Dollars and 04/100 ($110,131.04) payable in advance in equal monthly
installments of Nine Thousand One Hundred Seventy-Seven Dollars and 59/100
($9,177.59) on the first day of each and every month during the sixth year of
this lease.
Seventh Year of Term: (March 1, 2002 - February 28, 2003) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Thirteen Thousand Four
Hundred Thirty-Four Dollars and 97/100 ($113,434.97) payable in advance in equal
monthly installments of Nine Thousand Four Hundred Fifty-Two Dollars and 91/100
($9,452.91) on the first day of each and every month during the seventh year of
this lease.
Eight Year of Term: (March 1, 2003 - February 29, 2004) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Sixteen Thousand Eight
Hundred Thirty-Eight Dollars and 02/100 ($116,838.02) payable in advance in
equal monthly installments of Nine Thousand Seven Hundred Thirty-Six Dollars and
50/100 ($9,736.50) on the first day of each and every month during the eighth
year of this lease.
Ninth Year of Term: (March 1, 2004 - February 28, 2005) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Twenty Thousand Three
Hundred Forty-Three Dollars and 16/100 ($120,343.16) payable in advance in equal
monthly installments of Ten Thousand Twenty-Eight Dollars and 60/100
($10,028.60) on the first day of each and every month during the ninth year of
this lease.
Tenth Year of Term: (March 1, 2005 - February 28, 2006) Lessee shall pay
Lessor the yearly minimum fixed rent of One Hundred Twenty-Three Thousand
Nine-Hundred Fifty-Three Dollars and 45/100 ($123,953.45) payable in advance in
equal monthly installments of Ten Thousand Three Hundred Twenty-Nine Dollars and
45/100 ($10,329.45) on the first day of each and every month during the tenth
year of this lease.
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RENEWAL OPTIONS: If Lessee faithfully performs and keeps all covenants of
this lease during the initial term, the Lessee shall have the option of renewing
the lease for two (2) additional periods of five (5) years from that date.
Lessee shall pay Lessor the yearly minimum fixed rent as stated below, in
advance in equal monthly installments as stated below on the first day of each
and every month during the option terms of this lease. Said option is to be
exercised by sending notice thereof by certified mail, postage prepaid, to
Lessor at the address to which rent is then being paid, at least one hundred
eighty (180) days prior to the expiration of the initial lease term.
OPTION 1:
---------
Option year 11 $127,672.05 annually; $10,639.34 monthly
Option year 12 $131,502.21 annually; $10,958.52 monthly
Option year 13 $135,447.28 annually; $11,287.27 monthly
Option year 14 $139,510.69 annually; $11,625.89 monthly
Option year 15 $143,696.02 annually; $11,974.87 monthly
OPTION 2:
---------
Option year 16 $148,006.90 annually; $12,333.91 monthly
Option year 17 $152,447.10 annually; $12,703.93 monthly
Option year 18 $157,020.52 annually; $13,085.04 monthly
Option year 19 $161,731.13 annually; $13,477.59 monthly
Option year 20 $166,583.06 annually; $13,881.92 monthly
TENANT FINISH: (See Plans)
WATER AND SEWER CONNECTION FEES: Governmental authorities in charge of water and
sewer service have imposed certain fees in connection with water and sewer
service. Therefore, simultaneously with Lessee's first rental payment, Lessee
will reimburse Lessor for any of Lessor's costs incurred in hooking up Lessee's
water and sewer, and metering Lessee's water and sewer.
RADON GAS: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risk to
persons who are exposed to it over time. Levels of radon that exceed Federal and
State guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
unit.
SALES TAX ON RENTAL: Lessee will be wholly responsible for the cost of any sales
tax due on rents during the term of this lease or any option periods.
REPAIRS OF DAMAGE CAUSED BY TENANT'S IMPROVEMENTS: Notwithstanding anything to
the contrary, contained herein or in any attachment, Lessee agrees to repair any
damage caused by adding its improvements or by the operation of its business,
ordinary wear and tear excepted. This shall include, but not be limited to,
damage caused by roof penetrations or installation of equipment, fixtures and
furnishings.
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ADDENDUM - 2
ADDENDUM TO LEASE dated as of January 19, 1996 by and between THREE ISLAND
ASSOCIATES RETAIL ("Lessor") and SHOCHET SECURITIES, Inc. ("Lessee").
1. In the event of a conflict between the terms and conditions set forth in
the Lease and Addendum 1 and this Addendum-2, the terms and conditions of this
Addendum-2 shall control.
2. Supplementing the provisions of Section Five of the Lease, upon the
execution hereof, Lessee shall pay to Lessor (a) the sum of $3,958.33,
representing the minimum fixed rent for the period February 15-29, 1996, and (b)
one-half (1/2) of the monthly installment of the required escrow for triple net
fees (i.e., CAM, insurance and real estate taxes) for the period February 15-29,
1996.
3. Section Eight of the Lease is amended to read as follows:
"Upon the execution hereof Lessee will deposit with Lessor the amount of
Sixteen Thousand Seven Hundred Eighty-Three and 33/100 ($16,783.33) which
is equal to two (2) months' rent, plus six (6%) percent sales tax, which
sum shall be applied by Lessor on account of minimum fixed rent for the
months of December 1996 and January 1997."
4. Supplementing the provisions of Section Nine (a) of the Lease,
throughout the Lease term, as same may be extended in accordance with the
provisions hereof, Lessor will not lease or permit the leasing of any portion of
the center (excluding the anchors) containing 2,500 square feet or less to be
used as a stock brokerage.
5. Whenever in the Lease the term "shopping center" is used, same shall be
deemed to mean the entire center but excluding the outlots and anchors, which
area is indicated on the diagram annexed hereto as Schedule A-1. Lessor
represents and warrants that the square footage of the shopping center is 10,500
square feet.
6. Supplementing Sections Eleven, Twelve, Twenty-One and Twenty-Two, it is
agreed that:
(a) Lessee shall have the right to inspect and audit Lessor's books
and records with respect to charges to Lessee for common area maintenance, real
estate taxes and insurance costs for which Lessor is collecting escrow.
<PAGE>
(b) Lessee's pro rata share shall be deemed to be 47.6% which is
calculated as Lessee's square footage, i.e., 5,000 divided by the square footage
of the shopping center, i.e. 10,500.
(c) If the amount escrowed under these sections shall exceed the
amount actually expended during any lease year, then the excess amount of such
escrow from any such year shall be credited towards Lessee's account in
calculating the estimated escrow to be collected for the ensuing lease year.
(d) Lessor represents and warrants to Lessee that the shopping center
is a separate is tax lot for real estate tax purposes.
7. Supplementing Section Thirteen of the Lease:
(a) Lessee shall furnish Lessor with a punch list of items that are in
need of repair in the demised premises within ten (10) days of the date hereof
and Lessor shall promptly cause the repair of such punch list items.
(b) Notwithstanding anything contained to the contrary in the Lease,
throughout the term of the Lease and extensions, Lessor shall be responsible for
the maintenance and repair of the structure of the premises.
(c) Lessor will cause all warranties to be assigned to Lessee or shall
cause Lessee to be named in any warranties affecting the premises, including
without limitation, any warranties relating to the roof, air conditioning,
heating system, etc.
8. Supplementing Section Sixteen of the Lease, Lessor agrees that Lessor's
written consent shall not be unreasonably withheld or delayed. Lessee's consent
to any proposed alterations or additions to the demised premises shall be deemed
to have been granted if Lessor fails to respond to Lessee's request for consent
within ten (10) business days after Lessor's receipt of Lessee's receipt of
Lessee's written request for consent, which request shall be sent by registered
or certified mail or overnight courier, with receipt requested.
9. Notwithstanding anything contained in Section Seventeen of the Lease to
the contrary, if the demised premises are untenantable then the yearly minimum
fixed rent and all triple net fees shall abate from the date said
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premises are untenantable until the premises have been rebuilt by Lessor.
10. Supplementing Section Twenty-One of the Lease, Lessor represents to
Lessee that there shall be no double billing of the amounts for insurance
premiums under this Section and the amounts collected under Section Eleven of
the Lease.
11. Notwithstanding anything contained in Section Twenty-Two (c) of the
Lease to the contrary, it is agreed that Lessee's pro rate share in connection
with any attempts to have the tax assessment reduced shall be collected from any
tax reduction that may be obtained. Furthermore, in the event Lessor shall not
hire a company to have the assessment reduced, Lessee shall have the right to do
so and Lessor agrees to cooperate with Lessee in connection therewith and
execute such documents as may be required. Lessee shall be entitled to a pro
rata share of any tax refund or reduction.
12. Supplementing Section Twenty-Three of the Lease, Lessor's consent in
connection with any proposed assignment or sublet not be unreasonably withheld
or delayed. Lessor's consent shall be deemed to have been granted if Lessor
fails to respond to Lessee's request for consent within ten (10) business days
after Lessor's receipt of Lessee's written request for consent which request
shall be sent by registered or certified mail or overnight courier, with receipt
requested.
13. Notwithstanding anything contained in SectionTwenty-Five of the Lease
to the contrary, Lessee shall not be deemed to be in default under the Lease
unless Lessee has received written notice of such alleged default by registered
or certified mail, and Lessee shall have failed to cure such default within five
(5) days (in the case of monetary default) or fifteen (15) days (in the case of
a non-monetary default) after Lessee's receipt of such notice, or in the case of
a non-monetary default which is not capable of being cured within said fifteen
(15) days, so long as Lessee is diligently proceeding to cure such default, but
in no event more than one hundred eighty (180) days. Lessor shall not be
obligated to give Lessee notice of a monetary default more than two times in any
lease year.
14. Notwithstanding anything contained in Section Twenty-Six of the Lease
to the contrary, Lessee may remove its personal property, equipment, furniture
and trade fixtures from the demised premises.
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15. Notwithstanding anything contained in Section Thirty-Six of the Lease
to the contrary, if Lessor shall exercise its right to relocate Lessee under
this Section, such relocation shall be at Lessor's sole cost and expense to
relocate Lessee to comparable space containing not less than the same square
footage (i.e., 5,000 square feet) at the shopping center (the "Relocation
Space"). In such event Lessor shall give Lessee not less than six (6) months'
prior written notice of its desire to relocate Lessee. Lessor agrees to
reimburse Lessee for all reasonable costs actually incurred in connection with
the relocation, including, without limitation, the cost of reprinting stationery
and business cards, moving expenses, new telephones, equipment and other similar
items of expense. In no event shall the fixed rent and the triple net lease
items for the Relocation Space exceed the yearly rent and escalations as set
forth in this Lease for the premises. Lessor further agrees that Lessee shall
not be required to relocate to the Relocation Space until the Relocation Space
is ready for Lessee's occupancy. At such time Lessee shall be permitted to
occupy the Relocation Space without having any obligation to pay the fixed
yearly minimum rent for the first nine months of Lessee's occupancy of the
Relocation Space. At such time as Lessee vacates the premises Lessor shall
accept the premises in its "as is" condition.
16. Supplementing Section Forty-One of the Lease:
(a) Prior to the execution of this Lease, Lessor shall furnish Lessee
with a Phase I environmental report.
(b) Notwithstanding anything set forth in Section Forty-One to the
contrary, Lessee shall not be responsible for the remediation of any Waste
unless the need for same has arisen as a result of Lessee's acts during the
Lease term.
17. Supplementing the provisions of Addendum-1 dealing with Renewal
Options, Lessor and Lessee agree that Lessee has been granted two separate
options to renew the Lease term, each for an additional five (5) year period.
The first such five (5) year option shall be exercised no later than 180 days
prior to the expiration of the initial lease term and the second five (5) year
option shall be exercised no later than 180 days prior to the expiration of the
first five (5) year option term. Lessee shall not be in default of its
obligations under the Lease, beyond the
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expiration of any notice and cure periods, at the time of the exercise of each
of the respective options.
18. Wherever in the Lease Lessor's consent of Lessor or approval is
required, such approval or consent shall not be unreasonably withheld or
delayed.
19. Wherever in the Lease the phrase "satisfactory to Lessor" is used, same
shall be deemed to read "reasonably satisfactory to Lessor."
LESSOR:
THREE ISLANDS ASSOCIATES RETAIL
By: _____________________________
LESSEE:
SHOCHET SECURITIES, INC.
By: _____________________________
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Lease
HALLANDALE PLACE HALLANDALE, FLORIDA
-------------------------------------------------------------
Shopping Center
JULIUS MUFSON, TRUSTEE, and ALAN J. GOLDSTEIN,
TRUSTEE, d/b/a HALLANDALE PLACE JOINT VENTURE
-------------------------------------------------------------
Landlord
AND
SHOCHET SECURITIES INC., a Florida corporation
-------------------------------------------------------------
Tenant
Date: November 30, 1984
------------------
- --------------------------------------------------------------------------------
<PAGE>
THIS LEASE dated this 30th day of November 1984,
between JULIUS MUFSON, TRUSTEE, and ALAN J. GOLDSTEIN, Landlord,
TRUSTEE, d/b/a HALLANDALE PLACE JOINT VENTURE
c/o CHARLES A. VON STEIN, INC.,
4875 N. FEDERAL HIGHWAY, SUITE 3-C
FORT LAUDERDALE, FLORIDA 33308
and SHOCHET SECURITIES INC., a Florida corporation ,the Tenant
1295 E. Hallandale Beach Boulevard
Hallandale, Florida 33009
WITNESSETH:
The Landlord does hereby lease and demise to the Tenant, the following: The
premises (hereinafter sometimes referred to as "Demised Premises") as outlined
in red on the Plan attached hereto, made a part hereof, and marked Schedule "A",
being a part of the HALLANDALE PLACE (hereinafter sometimes referred to as
"Shopping Center"), said Demised Premises contains approximately 3,380 sq. ft.
(but shall in no event extend beyond the rear wall or window of the proposed
store or beyond the actual store front thereof) to be used for only
a discount stock brokerage office
for a term of three (3) ------------------- years See Option to Renew Rider
Para. 45
beginning February 1, 1985 and expiring January 31, 1988.
As rent for said Demised Premises Tenant agrees to pay Landlord a guaranteed
minimum rental of SEE RENTAL SCHEDULE "D" Dollars ( ) per annum; in addition to
said guaranteed minimum rental, Tenant agrees to pay Landlord percentage rental
as set out in Paragraph 20 hereof, and all other sums specified herein.
The parties hereto, intending to be legally bound hereby, further covenant with
each other as follows:
START OF CONSTRUCTION AND COMMENCEMENT DATE
ONE.--This lease is drawn for the interior of a store built as a part of a
Shopping Center in accordance with Schedule "A" attached hereto and the
conditions of this Lease. term shall expire on the last day of the month three
years after the aforementioned Commencement Date. If the Commencement Date is
not on the first day of a calendar month, rent for the period between
Commencement Date and the first day of the following month shall be apportioned
at the annual rate hereinabove provided (based on a 360 day annual basis) and
shall be due and payable on the Commencement Date.
Within (10) days after written demand from Landlord therefor, the Tenant
shall deliver to Landlord an instrument satisfactory to Landlord setting out
that the Lease has commenced, that Tenant is in possession of the premises ,
that payment of rent has commenced, and that Tenant has accepted the premises,
or, if any of the above shall not be the case, the Tenant shall specify with
particularity the reasons why such is not the case. The Tenant agrees to
execute, if Landlord shall request, a Memorandum of Lease in form and substance
satisfactory to Landlord.
PAYMENT OF RENT
TWO.--All guaranteed minimum rents which commence March 1, 1985 are payable
in equal monthly installments in advance without set-off or deduction of any
kind, upon the first day of each calendar month of the tenancy at the office of
the Landlord, or such other place as the Landlord may from time to time
designate, all without relief from valuation and appraisement laws, and at the
expiration of the term Tenant will peacefully yield up to the Landlord said
premises in good order and repair, and broom clean.
REPAIRS ORDINANCES AND VIOLATIONS
THREE.--The Tenant covenants: that no waste or damage shall be committed
upon or to the said Demised Premises; that the premises shall be used for only
the purpose hereinabove stated; that said premises shall not be used for any
unlawful purpose and no violations of law or ordinance or duly constituted
authority shall be committed thereon. Throughout said term, Tenant shall: take
good care of the Demised Premises, fixtures and appurtenances and all
alterations, additions and improvements to same; make all repairs and
replacements in and about the same necessary to preserve them in good order and
condition, which repairs and replacements shall be equal in quality to the
original work; promptly pay the expense of such repairs and replacements; suffer
no waste or injury to Demised Premises; give prompt notice to the Landlord of
any damage that may occur; execute and comply with all laws, rules, orders,
ordinances and regulations at any time issued or in force, applicable to the
Demised Premises or to the Tenant's use and occupancy thereof, of the Municipal,
City, County, State and Federal Governments and Landlord, and of each and every
department, bureau and official thereof, and of the Board of Fire Underwriters
having jurisdiction thereof.
Landlord will keep in repair the structural exterior of the Demised
Premises except any doors, moldings, trim, window frames, door frames, closure
devices, door hardware, door hinges and/or windows, provided that Tenant shall
give Landlord written notice of the necessity of such repairs, and provided that
the damage thereto shall not have been caused by negligence or act of Tenant, in
which event Tenant shall be responsible therefor. Landlord's obligation with
respect to repairs to Demised Premises shall be only as expressly set forth in
this paragraph.
INCREASED FIRE INSURANCE RATE
FOUR.--Tenant shall not do, suffer to be done, or keep, or suffer to be
kept anything in, upon or about the Demised Premises which will contravene
Landlord's policies insuring against loss or damage by fire or other hazards,
including but not limited to public liability or which will prevent Landlord
from procuring such policies in companies acceptable to Landlord. If anything be
done, omitted to be done or suffered to be done by Tenant or kept or suffered by
Tenant to be kept in, upon or about the premises that shall cause the rate of
fire or other insurance on the premises or other property of Landlord in
companies acceptable to Landlord to be increased beyond the minimum rate from
time to time applicable to the Demised Premises for use for the purposes
permitted under this lease or with such other property for the use or uses made
thereof, Tenant will pay the amount of such increase promptly upon Landlord's
demand as additional rent.
(1)
<PAGE>
*Tenant shall reimburse Landlord for all reasonable legal fees incurred by
Landlord in conjunction with all matters, specifically including, but not
limited to, notices of default, settlement negotiations, filing of suit on trial
and appellate levels, etc., in enforcing any provisions of this lease.
ASSIGNMENT SUBLETTING
FIVE.--Tenant expressly covenants that it will not assign, mortgage or
encumber this agreement nor under-let or suffer or permit the Demised Premises
or any part thereof to be used by others without the prior written consent of
Landlord in each instance. In the event the Tenant hereunder shall be a
corporation, any transfer, sale, pledge or other disposition of the corporate
stock or voting securities of the Tenant shall be deemed an assignment of this
Lease and therefore prohibited without the express written consent of Landlord.
At all times during the term of this Leas and any renewal thereof, it is hereby
agreed that the persons signing on behalf of the Tenant corporation shall be
officers and directors of the said Tenant corporation and that they will
collectively own at least 75% or more of all the stocks, equities and securities
of said Tenant.
If this Lease be assigned or if the Demised Premises or any part thereof be
under-let or occupied by anyone other than Tenant without the expressed written
consent of Landlord had and obtained, Landlord may collect rent from the
assignee, under-tenant or occupant and apply the net amount collected to all
rent herein reserved, but no assignment, under-letting , 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 the performance of the
covenants on Tenant's part herein contained.
In the event the Landlord's written consent is given to an assignment or
sub-letting, the Tenant shall, nevertheless, remain liable to perform all
covenants and conditions thereto and to guarantee such performance by his
assignee or sub-tenant.
BANKRUPTCY OR INSOLVENCY
SIX.--To more effectually secure the Landlord against loss of the rent and
other payments herein provided to be made by the Tenant, it is agreed as a
further condition of this Lease that filing of any petition in bankruptcy, any
assignment for the benefit of creditors, insolvency or other debtors'
proceedings by or against the Tenant, or the adjudication in Bankruptcy of the
Tenant or the appointment of a Receiver for Tenant by any Court shall be deemed
to constitute a breach of this Lease, and thereupon without entry or other
action by the Landlord, this Lease shall, at the option of Landlord, become and
be terminated; notwithstanding any other provisions of this Lease, the Landlord
shall forthwith upon any such termination be entitled to recover the rent
reserved in this Lease for the residue of the term hereof less the fair rental
value of the premises for the residue of said term.
Any such action, proceeding, or filing on behalf of or against any
Guarantor, Assignor, and/or Assignee of this Lease shall be deemed a breach of
this Lease and shall entitle Landlord to any or all remedies set out herein.
LITIGATION
SEVEN.--In the event the Landlord or its Agents, without fault on its/their
part, become involved, through or on account of the terms of this Lease, or
through or on account of the occupancy of the Demised Premises by the Tenant, or
the conduct of Tenant's business upon said Demised Premises, in any controversy
or litigation, the Tenant shall upon notice from Landlord or its Agents,
immediately take all necessary steps to remove said Landlord's connection with,
or liability under such controversy or litigation, and particularly if such
controversy or litigation throws any cloud or incumbrance upon the title of said
Landlord to its property provided, that if the Tenant believes it has a good and
valid defense, or claim, in such controversy or litigation which Tenant desires
to set up and maintain by and throughout court procedure and litigation, the
Tenant shall have the right to do so, provided it fires executes and delivers to
the Landlord and indemnifying bond with surety satisfactory to Landord, and
discharges any and all final judgments, liens, costs, damages, expenses and
obligations of Landlord whatsoever, in, or arising out of the controversy or
litigation involving the Landlord or its Agents, including all costs, expenses
and attorney's fees incurred by Landlord or its Agents in protecting their
interest or defending themselves in such controversy or litigation. Tenant and
Guarantor, if any, hereby waives, and agrees that it will waive, all rights to
trial by jury in any and all legal proceedings arising under this Lease, out of
the termination of this Lease, or with respect to the Demised Premises or the
Shopping Center or the use thereof.*
UTILITIES
EIGHT.-- Tenant shall, at its own cost and expense, pay all charges when
due for water, gas, electricity, heat, sewer rentals or charges and any other
utility charges incurred in the use of the Demised Premises. If Landlord shall
elect to supply water, gas, electricity, or any other utility service, Tenant
agrees to purchase same from Landlord and to pay the charges therefor when bills
are rendered at the applicable rates. The Tenant shall use reasonable diligence
in the conservation of these utilities.
COMMON AREA MAINTENANCE
NINE.--Tenant agrees that it will pay to the Landlord as and when bills are
rendered therefor, a proportionate share of the following costs incurred in
Shopping Center; operation, painting, lighting, municipal or local fire
protection or hydrant charges, cleaning, premiums on insurance policies,
sewerage and garbage disposal, installation and removal of community projects,
exterminating, policing and maintenance of the parking area, walks and ways and
for areas common to all occupants of the Shopping Center, as may be necessary
from time to time. The share of costs to be paid by Tenant shall be computed in
one of the following manners, at Landlord's sole election: either (a) 50 (cents)
for each square foot of the total floor area of the Demised Premises per annum,
or (b) the proportionate share of costs on the basis that the total floor area
of the Demised Premises bears to the total leasable area of the Shopping Center.
Unless Landlord shall designate Landlord's choice in writing, it shall be deemed
that Landlord has selected the payment designated in (a). However, Landlord
shall have the privilege and option, from time to time, of selecting either (a)
or (b). In any event, payment shall be made by the Tenant monthly,
simultaneously with the payment of rent, and there shall be no abatement, refund
or diminishment of these sums even though there may be interruptions in the
service, so long as there shall be reasonable diligence by the Landlord to
effectuate the necessary repairs.
Tenant further covenants that if its Lease is terminated by reason of
default on its part, or if it fails to take possession of Demised Premises or
leaves the Demised Premises prior to the expiration of this Lease, that it shall
remain liable to pay such share of such costs. Tenant agrees that this is not be
construed as a penalty and that it shall be liable therefor only for such period
or periods of time as during the term of this Lease, the Demised Premises are
vacant.
STORE APPEARANCE OUTSIDE
TEN.--Tenant shall maintain its show windows in a neat and clean condition,
shall keep sidewalk adjoining the Demised Premises clean and free from rubbish,
refuse or garbage and shall store all trash and garbage within the Demised
Premises and shall arrange for the regular pick up of trash and garbage. In the
event that Tenant shall fail to keep the property adjoining the Demised Premises
clean and free from rubbish, refuse or garbage, Landlord shall, in addition to
all other rights afforded to Landlord herein, have the right to cause the
removal of such material and to charge Tenant the cost therefor, which cost
shall be due and payable immediately upon presentation of a bill to Tenant for
payment therefor. Tenant shall not burn any trash of any kind in or about the
building, nor shall Tenant permit rubbish, refuse or garbage to accumulate or
fire hazard to exist about the Demised Premises.
PARKING
ELEVEN.--In addition to the Demised Premises, Tenant shall have the right
of non-exclusive use, in common with others, of (a) automobile parking areas,
driveways and footways, and of (b) such loading facilities as may be designated,
from time to time, by Landlord; all to subject to the terms and conditions of
this Lease and to reasonable rules and regulations for the use thereof as
prescribed from time to time by Landlord.
All common areas and facilities not within the Demised Premises, which
Tenant may be permitted to use and occupy, are to be used and occupied under a
revocable license, and if any such license be revoked, or if the amount of such
areas be diminished, 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 or diminution of such areas be deemed constructive or
actual eviction.
Tenant and its employees shall not park cars in parking space provided for
customers on property of which Demised Premises are a part or in alleys or
service courts serving buildings or Landlord except in areas which may be
designated by Landlord for tenant parking. Where there is a rear entrance, all
loading and unloading of goods shall be made at the rear entrance. Tenant agrees
that upon written notice from Landlord it will, within five days, furnish
Landlord with the state automobile license numbers assigned to its car and the
cars of all its employees. If Tenant or its employees shall park their cars in
space provided for customer parking, Tenant shall pay additional rent to the
Landlord at the rate of $10.00 per day per car.
SIGNS
TWELVE.--The Tenant shall not display any sign, picture, advertisement,
awning, merchandise, or notice on the outside of the building of which the
Demised Premises are a part, nor on the outside or inside of the Demised
Premises, except as shall conform to the requirements of the Landlord. In the
event that Tenant shall fail to comply with the provisions of this Paragraph,
Landlord shall have the right, in addition to all other remedies granted
Landlord herein, to cause the immediate removal of such signs at the cost of
Tenant, which cost shall be due and payable immediately upon presentation of a
bill to Tenant for payment therefor. To accomplish the provisions of this
Paragraph, the Landlord shall have the right to enter Tenant's premises and to
do all things necessary to cause the removal of all signs not in compliance with
the provisions of this Paragraph.
OUTSIDE DISPLAYS
THIRTEEN.--The Tenant shall not display any merchandise, place vending
machines or showcases or other obstructions on the outside of the building, or
the Demised Premises, or in any lobby or passageway adjoining the same which
shall extend beyond the store front of the Demised Premises.
INTERIOR ALTERATIONS
FOURTEEN.--Tenant may, at its expense, make such alterations and
improvements to the Demised Premises and install interior partitions as it may
require, provided that the written approval of the Landlord be first obtained
and that such improvements and alterations are done in a workmanlike manner in
keeping with all building codes and regulations and in no way harm the structure
of the Demised Premises, provided that at the expiration of this Lease or any
extension thereof, Tenant, if requested to do so by Landlord, at its expense,
shall restore the within Demised Premises to its original condition and repair
any damage to the premises
(2)
<PAGE>
resulting from the installation or removal of such partitions, fixtures, or
equipment as may have been installed by Tenant.
The Landlord reserves the right, before approving any such changes,
additions, or alterations, to require the Tenant to furnish it a good and
sufficient bond, conditioned that it will save Landlord harmless from the
payment of any claims, either by way of damages or liens. All of such changes,
additions, or alterations shall be made solely at the expense of the Tenant; and
the Tenant agrees to protect, indemnify and save harmless the Landlord on
account of any injury to third persons or property, by reason of any such
changes additions, or alterations, and to protect, indemnify and save harmless
Landlord from the payment of any claim of any kind or character on account of
bills for labor or material in connection therewith.
FIRE
FIFTEEN.--If the Demised Premises are damaged by fire or other insured
casualty, not occurring through any act or failure to act on the part of Tenant,
its agents, servants or employees, and such damage can be repaired within 120
days of the date of such occurrence; this Lease shall remain full force and
effect, and the Landlord shall promptly repair such damage at its expense, and
in that event, there shall be a proportionate abatement of rent for so much of
the Demised Premises as may be untenantable during the period of repair or
restoration. If in the opinion of a registered Architect or Engineer appoi8nted
by the Landlord the Demised Premises are damaged by fire or other casualty to
such an extent that the damage cannot be repaired or restored within 120 days
from the date of such occurrence, or that such damage is due to any act or
failure to act on the part of Tenant, its agents, servants or employees, this
Lease shall terminate at the option of Landlord upon written notice given within
thirty (30) days after such occurrence. If this option is not exercised by
Landlord, then this Lease shall continue in full force and effect. If 25% or
more of the buildings of which the Demised Premises form a part are damaged by
fire or other casualty to such an extent that the same cannot be restored within
120 days of the date of such occurrence, this Lease may be cancelled at the
option of the Landlord upon thirty (30) days written notice from the date of
such occurrence, even though the premises occupied by the Tenant have not become
untenantable, and there shall be an adjustment of rent to said date of
termination. In addition, there shall be no obligation upon the part of Landlord
to repair or rebuild during the last three (3) lease years of the term of this
Lease unless Tenant shall, within fifteen (15) days after such occurrence,
exercise any option to extend the term of this Lease that may be afforded to
Tenant under the terms hereof. Landlord's obligation to repair or rebuild
pursuant to this paragraph Fifteen shall be limited to a basic building and the
replacement of any interior work which may have originally been installed at
Landlord's cost. Except as herein provided, there shall be no obligation to
repair or rebuild in the case of fire or other casualty.
HOLDOVER
SIXTEEN.--If the Tenant shall occupy said premises with the consent of the
Landlord after the expiration of this Lease, and rent is accepted from said
Tenant, such occupancy and payment shall be construed as an extension of this
Lease for the term of one month only from the date of such expiration, and
occupation and payment thereafter shall operate to extend the term of this Leas
for but one month at a time unless other terms of such extension are indorsed
hereon in writing and signed by the parties hereto. In such event if either
Landlord or Tenant desires to terminate said occupancy at the end of any month
after the termination of this Lease, the party so desiring to terminate the same
shall give the other party at least thirty (30) days written notice to that
effect. Failure on the part of the Tenant to give such notice shall obligate it
to pay rent for an additional calendar month, following the month in which the
Tenant has vacated the Demised Premises. If such occupancy continues without the
consent of the Landlord, Tenant shall pay to the Landlord, as liquidated
damages, double the amount of rent at the highest rate specified in this Lease
for the time Tenant retains possession of the premises or any part thereof after
termination of the term by lapse of time or otherwise.
INSPECTION
SEVENTEEN.--Landlord expressly reserves the following rights; (a) to enter
said premises at any time to examine or to make such repairs, additions or
alterations as it may deem necessary for the safety, improvement or preservation
thereof, or of said building, but Landlord assumes no obligation to make repairs
to said premises or said building other than as expressly stated in this Lease;
and (b) to enter the Demised Premises and display a notice or sign "FOR RENT"
and/or "FOR SALE" at any time within six months before the expiration or on the
sooner termination of this Lease, and to maintain the same as placed; and (c)
during or after the time Tenant abandons or vacates the premises or otherwise
defaults hereunder, to enter and decorate, remodel, repair, alter or otherwise
prepare the premises for reoccupancy. The exercise of any reserved right by
Landlord shall never be deemed an eviction or disturbance of Tenant's use and
possession of the premises and shall never render Landlord liable in any manner
to Tenant or to any other person.
LIABILITY
EIGHTEEN.--Landlord shall not be under any responsibility or liability in
any way whatsoever for the quality, quantity, impairment, interruption,
stoppage, or other interference with service involving water, heat gas, electric
current for light and power, telephone, or any other service. Landlord shall not
be liable for any damage to property of Tenant or of others located on the
Demised Premises, nor for the loss of or damage to any property of Tenant or of
others by theft or otherwise. Landlord shall not be liable for any injury or
damage to persons or property resulting from (but not limited to) fire,
explosion, falling plaster, steam, gas, electricity, water, rain, snow or leaks
from any part of the Demised Premises or from the pipes, appliances or plumbing
works or from the roof, street or sub-surface or from any other place or by
dampness or by any other cause of whatsoever nature. Landlord shall not be
liable for any such damage caused by other tenants or persons in the Demised
Premises, occupants of adjacent property. of the Shopping Center, or the public,
or caused by operations in construction of any private, public or quasi-public
work. All property of Tenant kept or stored on the Demised Premises shall be so
kept or stored at the risk of Tenant only and Tenant shall hold Landlord
harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant's insurance carriers.
LIABILITY FOR DAMAGES AND PLATE GLASS TENANT
NINETEEN.--The Tenant agrees to be responsible for any damage to the
property of the Landlord which may result from any use of the Demised Premises,
or any act done thereon by the Tenant or any person coming or being thereon by
the license or permission of the Tenant, express or implied, and also to save
the Landlord harmless from any liability to any person or estate, for damage to
person or property, resulting from any such causes, and to protect such
liability with Public Liability insurance and to furnish Landlord at the
commencement of the term a certificate issued by the insurance carrier showing
such insurance in force and with Landlord covered thereby with limitations of at
least $250,000/$500,000 in case of bodily injury or death and at least $50,000
in case of property damage. Tenant agrees to replace all glass broken, damaged
or destroyed in any manner whatever, the Tenant assuming all responsibility for
the glass in the Demised Premises, and to cause such liability to be protected
by plate glass insurance at Tenant's expense, and further to deposit such plate
glass insurance policy or certificate showing such insurance in force with
Landlord during the term of this Lease.
In the event that Tenant does not procure such insurance as aforesaid,
Landlord may at its option purchase the same in the name of Tenant and/or may at
its option include such coverage in any master policy carried by Landlord. If
Landlord exercises its rights hereunder the Tenant shall, upon demand, pay all
costs thereof to Landlord together with an administrative charge of $25.00 for
each such coverage made by Landlord on behalf of Tenant. Tenant agrees, at
Tenant's expense to keep all plumbing and heating lines from the point of
entrance to Demised Premises to the point of actual use, tight and free from
leakage and stoppage at all times and to use reasonable diligence in the
conservation of these supplies. If Tenant shall enter the Demised Premises prior
to the term hereof, Tenant shall be liable as herein set out such occupancy
shall be upon all the terms and conditions hereof except that rent shall be due
at the time set forth in Paragraph One hereof. Such prior occupancy shall be
Tenant at its own risk.
(3)
<PAGE>
BUSINESS OPERATION
TWENTY-ONE.--Tenant shall, during the term of this Lease, continuously use
the Demised Premises for the purpose stated in this Lease, carrying on therein
Tenant's business undertaking diligently, assiduously and energetically. Tenant
shall maintain on the premises a substantial stock of goods, wares and
merchandise and equipment, adequate to assure successful operation of Tenant's
business. Tenant shall keep the premises open and available for business
activity therein during all usual days and hours for such business in the
vicinity and during such period and hours as are set by the Landlord and/or
Merchants' Association except when prevented by strikes, fire, casualty or other
causes beyond Tenant's reasonable control. Tenant shall include the address and
identity of its business activity of like character conducted by Tenant shall be
mentioned, and shall not divert elsewhere any trade, commence or business which
ordinarily would be transacted by Tenant or from the Demised Premises. The
Tenant shall not at any time conduct o the premises in an auction sale, nor
shall it conduct the type of business which is commonly referred to as a "second
hand" store, army, navy or governmental" surplus" store.
Tenant shall not conduct any "fire sale", "dress sale", "bankruptcy sale",
"going out of business sale", or any other sale designed to convey to the public
that business operations are to be discontinued and Tenant shall not apply for
or cause to be applied for any municipal, state, local, or federal license or
permit applicable to such sales.
The parties recognize and acknowledge that the Tenant's agreement to
operate its business with the public within the Demised Premises is a material
inducement to Landlord to enter into this Lease and the parties further
recognize and acknowledge that the damages that Landlord might sustain by reason
of Tenant's inability or unwillingness to operate its business during the hours
and days set by the Landlord and/or Merchants' Association is incapable of exact
calculation. Accordingly, the Tenant expressly agrees that the Landlord may
enforce the requirement that Tenant operate during such times and days by
injunction or any other legal or equitable remedy, whether such relief may
require mandatory enforcement or otherwise.
WAIVERS
TWNETY-TWO.--The failure of the Landlord to insist, in any one or more
instances upon a strict performance of any of the covenants of this Lease, or to
exercise any option contained, shall not be construed as a waiver or a
relinquishment for the future of such covenant or option, but the same shall
continue and remain in full force and effect. The receipt by the Landlord of
rent, with knowledge of the breach of any covenant hereof, shall not be deemed a
waiver of such breach and no waiver by the Landlord of any provision hereof
shall be deemed to have been made unless expressed in writing and signed by the
Landlord. Even though the Landlord shall consent to an assignment and/or
sub-letting hereof no further assignment and/or sub-letting shall be made
without express consent in writing by the Landlord.
SUBORDINATION
TWENTY-THREE.--This Lease, at the option of Landlord, shall be subject and
subordinate at all times, to the lien of the mortgages now on the Demised
Premises, and to all advances made or hereafter to be made upon the security
thereof, and subject and subordinate to the lien of any mortgage or mortgages
which at any time may be made a lien upon the premises, and subject and
subordinate to any lease or other arrangement or right to possession under which
Landlord is in control of Demised Premises and to the rights of the owner or
owners of the Demised Premises and of the land or buildings of which the Demised
Premises are a part. The Tenant will execute and deliver such further instrument
or instruments subordinating this Lease to the lien of any such mortgage or
mortgages as shall be desired by any mortgagee or proposed mortgagee. The Tenant
hereby appoints the Landlord the attorney-in-fact of the Tenant, irrevocable, to
execute and deliver any such instrument or instruments for the Tenant.
The Tenant shall have no power to do any act or make any contract which may
create or be the foundation for any lien, mortgage or other encumbrance upon the
estate of the Landlord or of any interest of the Landlord in the Demised
Premises, or upon or in the building or buildings or improvements there on or
hereafter erected or placed thereon, it being agreed that should the Tenant
cause any improvements, alterations or repairs to be made to the Demised
Premises, or material furnished or labor performed therein, or thereon, neither
the Landlord nor the Demised Premises nor any improvements shall under any
consideration be liable for the payment of any expenses incurred or for the
value of any work done or material furnished to the Demised Premises or any part
thereof: but all such improvements, alterations, repairs, materials and labor
shall be done at the Tenant's expense and the Tenant shall be solely and wholly
responsible to cont5ractors, laborers and materialmen furnishing labor and
material to said premises and building or buildings and improvements or any part
thereof and all such laborers, materialmen and contractors are hereby charged
with notice that they must look solely and wholly to the Tenant and the Tenant's
interest in the premises, to secure the payment of any bills for work done and
materials furnished.
DEFAULT
TWENTY-FOUR.--(a): (1) If Tenant shall default in the payment of any rent
or other payments required of Tenant, or any part thereof and if such default
shall continue for five (5) days after the payment shall be due, or (2) if
Tenant shall default in the performance or observance of any other agreement or
condition on its part to be performed or observed and if Tenant shall fail to
cure said default within ten (10) days after notice of said default from
Landlord, or (3) if any person shall levy upon, take, or attempt to take this
leasehold interest or any part thereof upon execution, attachment or other
process of law, or (4) if Tenant or any affiliate of Tenant shall make default
with respect to any other Lease or agreement between it and Landlord or any
affiliate Landlord, or (5) if the premises shall be deserted, vacated,
abandoned, or business operations shall not be conducted therein for a period of
three or more days, or (6) if this lease or any interest therein shall be
operation of law devolve upon or pass to any person or persons other than
Tenant, or (7) if Tenant shall fail to move into and take possession of the
Demised Premises and open for
(4)
<PAGE>
business within thirty (30) days after Landlord's giving notice to Tenant that
the Demised Premises are ready for occupancy by Tenant, then, in any of said
cases (notwithstanding any license of any former breach of agreement or
condition or waiver of the benefit hereof or consent in a former instance).
Landlord lawfully may immediately, or at any time thereafter, and without any
further notice or demand, terminate this Lease and Tenant will forthwith quit
and surrender the Demised Premises, but Tenant shall remain liable as
hereinafter provided.
(b) If this Lease shall be terminated, as provided in this paragraph:
(1) The Landlord may immediately, or at any time thereafter, re-enter and
resume possession of the Demised Premises and remove all persons and property
therefrom either by summary dispossess proceedings or by a suitable action or
proceeding at law or in equity, or by force or otherwise, without being liable
for any damages therefor. No re-entry by the Landlord shall be deemed and
acceptance of a surrender of this Lease.
(2) The Landlord may relet the whole or any part of the Demised Premises
for a period equal to, or greater or less than the remainder of the then term of
this Lease, at such rental and upon such terms and concessions as the Landlord
shall deem reasonable, to any person which it may deem suitable and satisfactory
and for any use and purpose which it may deem appropriate. In no event shall the
Landlord be liable in any respect for failure to relet the Demised Premises, or
in the event of such reletting, for failure to collect the rent thereunder. Any
sums or other consideration received by the Landlord on a reletting in excess of
the rent reserved in this Lease shall belong to the Landlord. (c) If this Lease
shall be terminated as provided in this Paragraph, or by summary proceedings or
otherwise, and whether or not the premises shall be relet, the Landlord shall be
entitled to recover from the Tenant and the Tenant shall pay to the Landlord,
the following;
(1) (A) An amount equal to all expenses, including reasonable counsel fees
incurred by the Landlord in recovering possession of the Demised Premises, and
(B) all reasonable costs and charges for the care of the Demised Premises while
vacant, and C) and amount equal to all expenses incurred by the Landlord in
connection with the reletting of the Demised Premises or any part thereof,
including broker's commissions, advertising expenses, and the cost of repairing,
renovating or remodeling the Demised Premises; which amounts set forth in this
subdivision (1) shall be due and payable by the Tenant to the Landlord at such
times as the expenses, costs and charges shall have been incurred; and
(2) An amount equal to a minimum rent and other charges required to be paid
by the Tenant under this Lease, less the net rent, if any, collected by the
Landlord on reletting the Demised Premises: which amount shall be due and
payable by the Tenant to the Landlord on the several days on which such minimum
rent and other charges would have become due and payable had this Lease not been
terminated, and the Tenant shall pay to the Landlord the amount of any
deficiency then existing. The net rent collected by the Landlord on reletting
shall be computed by deducting from the gross rents collected, the expenses,
costs and charges referred to in sub-division (1) of this sub-paragraph. Without
any previous notice or demand separate actions may be instituted by the Landlord
against the Tenant from time to time to recover any damages which at the
commencement of any such action shall then or theretofore have become due and
payable to the Landlord under any provisions hereof without waiting until the
end of the original term of this Lease, and neither the institution of suit or
suits, proceeding or proceedings, nor the entering of judgment therein shall bar
the Landlord from bringing a subsequent suit or proceeding for damages of any
kind theretofore or thereafter suffered. It is expressly agreed that the
forbearance on the part of the Landlord in the institution of any suit or entry
of judgment for any part of the rent herein reserved to the Landlord, including
gut not limited to the unliquidated percentage rent then due, shall in no wise
serve as a defense against nor prejudice a subsequent action for such rent. The
Tenant hereby expressly waives Tenant's right to claim a merger of such
subsequent action in any previous suit or in the judgment entered therein.
Furthermore, it is expressly agreed that claims for liquidated or minimum annual
rent and those for unliquidated percentage rent may be regarded by the Landlord,
if it so elects, as separate claims capable of being assigned.
The Landlord, at its election, which shall be exercised by the service of a
written notice on the Tenant, may collect from the Tenant and the Tenant shall
pay in lieu of the sums becoming due after the service of such notice under the
provisions of sub-division (2) of this sub-paragraph, an amount equal to the
difference between the minimum rent, additional rent and other charges required
to be paid by the Tenant under this Lease, (from the date of the service of such
notice to and including the date of the expiration of the term of this Lease
which had been in force immediately prior to any termination effected under this
Paragraph), and the then fair and reasonable rental value of the Demised
Premises for the same period, is counted to the date of the service of such
notice at the rate of six (6%) percent per annum. In determining the rental
value of the Demised Premises, the rental realized by any reletting shall be
deemed prima facie evidence thereof.
(d) 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 Demised Premises, by reason of
the violation by Tenant of any of the covenants and conditions of this Lease, or
otherwise.
(e) The Tenant hereby waives any notice which may be required by statute or
otherwise prior to the commencement of an action to obtain possession of the
premises by summary proceedings or otherwise.
(f) Notwithstanding any other provision of this Lease, if Tenant shall
default in the payment of any rent and/or any other payments required of Tenant,
or any part thereof, and if such default shall continue for five (5) days after
the payment thereof shall be due, then without any previous notice or demand,
and without terminating this Lease, Landlord may institute any action, suit or
proceeding provided for by law (notwithstanding the fact that such is not
otherwise provided for herein), against the Tenant from time to time to recover
any of the aforesaid sums which at the commencement of any such action, suit or
proceeding shall then or theretofore have become due and payable to the Landlord
under any provisions hereof, without waiting until the end of the original term
of this Lease, and neither the institution of such action, suit or proceeding
nor the settlement thereof or entering of judgment therein shall terminate this
Lease, nor shall it bar the Landlord from bringing subsequent actions, suits or
proceedings from time to time for any sum or sums of any kind which shall
thereafter become due and owing from the Tenant to the Landlord under any of the
terms hereof or otherwise. The Tenant hereby expressly waives any right or
defense which it may have to claim a merger of such subsequent actions, suits or
proceedings in any previous action, suit or proceeding or in the settlement
thereof or judgments entered therein.
(g) All sums other than minimum rent payable hereunder by the Tenant are
hereby deemed and declared to be additional rent under the terms of this Lease
and the Landlord shall have any and all rights afforded it hereunder to collect
the same. Such sums shall include, but not be limited to: minimum rent,
percentage rent, parking area maintenance charges, excess real estate taxes
attorneys' fees, court costs, utility bills, merchants' association assessments
and dues.
REMOVAL OF FIXTURES
TWENTY-FIVE.--If after default in payment of rent or violation of any other
provision of this Lease, or upon the expiration of this Lease, or prior to the
issuance of final order or execution of warrant, then and in that event, the
said fixtures, signs and property shall be deemed abandoned by Tenant and shall
be come the property of the Landlord, or Landlord may notify Tenant to remove
same at Tenant's own cost and expense, and upon the failure of Tenant so to do,
Landlord may, in addition to any other remedies available to it, remove said
trade fixtures, signs or other property as the duly authorized agent of Tenant,
and store the same in the name and at the expense of Tenant or those claiming
through or under it under any usual or proper form of warehouse receipt, whether
or not authorizing the sale of same for non-payment of storage charges, without
in any way being liable for trespass, conversion or negligence by reason of the
acts of Landlord or anyone claiming under it or by reason of the negligence of
any person in caring for the same while in storage and Tenant will pay to
Landlord upon demand any and all expenses and charges incurred upon such removal
and storage, irrespective of the length of time of storage. Landlord shall have
a lien as security for the payment of the rent and other charges hereby reserved
upon all goods and chattels which are or may be placed in and upon the said
premises during the term hereby crested: and that such lien may be enforced, on
the nonpayment of the rent hereby reserved or other default of Tenant hereunder,
by the seizure and sale of the said goods and chattels pursuant to a distress
warrant issued by the Landlord.
ATTORNEYS' FEES
TWENTY-SIX.--If Tenant shall make any default or defaults under this Lease,
Landlord may, at its election, immediately or at any time thereafter, without
waiving any claim for breach of agreement, and without notice to Tenant, cure
such default or defaults for the account of Tenant; if the Landlord shall
institute an action or summary proceeding against the Tenant based upon such
default, or if the Landlord shall cure such default or defaults for the account
of Tenant, then the Tenant will reimburse the Landlord for the expense of
attorneys' fees and disbursements thereby incurred by the Landlord, so far as
the same are reasonable in amount. The cost to Landlord thereof shall be due and
payable on demand or and shall be deemed to be additional rent and shall be
added to the installment of rent next accruing or to any subsequent installment
of rent, at the election of Landlord. Landlord shall not be responsible to
Tenant for any loss or damage resulting in any manner by reason of its
undertaking any acts in accordance with the provisions of this Lease.
(5)
<PAGE>
Tenant agrees that in the event its default in performance of any of the
terms, conditions or covenants of this Lease requires the Landlord, in the
exercise of it sole discretion, to use the services of an attorney whether or
not an employee of Landlord to attempt to, or to successfully remedy such
default, that Tenant will reimburse Landlord for any and all expenses incurred
in its use of such attorney and in any action which said attorney may take. Such
expenses shall include, but are not limited to: legal fees, court costs, costs
of filing and serving summons and/or complaints, etc. The term "default" as used
in this paragraph shall mean, but is not to be construed as limited in meaning,
to: nonpayment of : minimum rent, percentage rents, utility bills, real estate
taxes, real estate assessments, merchants' association assessments or dues,
common area contribution.
SECURITY
TWENTY-SEVEN.--As security for the faithful performance by Tenant of all of
the terms and conditions upon the Tenant's part to be performed, Tenant has this
day deposited with Landlord the sum of THREE THOUSAND ----- Dollars, which shall
be returned to Tenant, without interest, thirty (30) days after the day set
forth for the expiration of the term herein (notwithstanding this Lease may be
sooner terminated), provided, however, that Tenant has fully and faithfully
carried out all of the terms, covenants and conditions on its part to be
performed. Landlord shall have the right to apply any part of said deposit to
cure any default of Tenant and if Landlord does so, Tenant shall upon demand
deposit with Landlord the amount so applied so that Landlord shall have the full
deposit on hand at all times during the term of this Lease.
In the event of a sale of the building or lease of the land on which it
stands, subject to this Lease, the Landlord shall have the right to transfer
this security to the vendee or lessee and the Landlord shall be considered
released by the Tenant from all liability for the return of such security and
the Tenant shall look solely to the new Landlord for the return of the said
security, and it is agreed that this shall apply to every transfer or assignment
made of the security to a new Landlord. The security deposited under this lease
shall not be mortgaged, assigned or encumbered by the Tenant without the written
consent of the Landlord and any attempt to do so shall be void. In the event of
any rightful and permitted assignment of this Lease, the said security deposit
shall be deemed to be held by Landlord as a deposit made by the assignee and
Landlord shall have no further liability with respect to the return of said
security deposit to the assignor. Any mortgagee of Landlord shall be relieved
and released from any obligation to return such security in the event such
mortgagee comes into possession of the Demised Premises and/or the Shopping
Center by reason of foreclosure of its security interest or any proceeding in
lieu thereof.
In the event of any bankruptcy or other proceeding against or by Tenant
under Paragraph Six hereof, it is hereby agreed that all security held hereunder
shall be deemed to be applied first to rent and other charges first due to
Landlord for all periods prior to the filing of any such proceedings.
REAL ESTATE TAXES
TWENTY-EIGHT.--As used herein, the term "Taxes" shall mean and include all
real estate taxes, assessments, license and permit fees, charges for any
easement maintained for the benefit of the Demised Premises and other
governmental levies and charges of every kind and nature whatsoever, general and
special, extraordinary as well as ordinary, foreseen and unforeseen, and each
and every installment thereof which shall or may during the term of this Lease
be levied, assessed, imposed, become due and payable or liens upon, or arise in
connection with the use, occupancy or possession of, or grow due and payable out
of, or for, the entire Shopping Center or any part thereof, or any rent or
income received therefrom, or any land, buildings or other improvements therein,
including interest on installment payments and all costs and fees (including
reasonable attorneys' fees) incurred by Landlord in contesting Taxes,
assessments and/or negotiating with public authorities with respect to the same.
For the purpose of this Article 28, the term "Taxes" shall not include any
charge (such as a water meter charge and the sewer rent based thereon) which is
measured by the consumption by the actual user of the item or service for which
such charge is made. Further, nothing herein contained shall be construed to
include as Taxes any inheritance, estate, succession, transfer, gift, franchise,
corporation, net income or profit tax or capital levy that is or may be imposed
upon Landlord, provided, however, that if at any time during the term of this
Lease the methods and/or bases of taxation prevailing at the Commencement Date
shall be altered so that in addition to, or in lieu of or as a substitute for
the whole or any part of the Taxes now levied, assessed or imposed on real
estate as such, there shall be levied, assessed or imposed (i) a tax on the
rents received from such real estate, or (ii) a license fee measured by the
rents receivable by Landlord from the Shopping Center or any portion thereof. pr
(iii) a tax or license fee imposed upon Landlord which is otherwise measured by
or based in whole or in part upon rents derived from the whole Shopping Center
or any portion thereof, then and in any of such events the same shall be
included in the computation hereunder of Taxes.
Landlord shall pay or cause to be paid (subject to the provisions regarding
contributions by Tenant hereinafter set forth) all Taxes which may be levied,
assessed, or imposed by the lawful tax authorities against the land, buildings
or other improvements in the entire Shopping Center. The official tax Bill or
bills, as the case may be, issued by such lawful taxing authorities shall be
conclusive evidence as to the amount of any such tax (or installment thereof)
levied, assessed or imposed upon the Shopping Center.
On the first day of each month during the term of this Lease, Tenant shall
pay to Landlord, as additional rent in advance, the amount obtained by (i)
computing 1/12 of all Taxes levied, assessed or imposed upon the Shopping Center
during each tax year in which the month in question falls, (ii) multiplying the
sum resulting from the computation in step (i) by a fraction, the numerator of
which shall be the floor area of the Demised Premises, and the denominator of
which shall be the floor area of all leasable space in the entire Shopping
Center (the resultant amount being hereinafter referred to as the "Per Square
Foot Taxes"), the status of such floor area in each instance to be determined as
of the first day of the month in question. If on the first day of the month in
question the amount of any Tax payable during the then current tax year shall
not have been determined by the taxing authorities, then the amount payable by
Tenant shall be based on the amount of the corresponding Tax of the immediately
preceding tax year, subject to immediate adjustment when the amount of such Tax
for the then current tax year shall be determined and Tenant shall pay such
adjustment upon being billed therefor by Landlord. If any Tax shall be levied,
assessed or imposed for any fiscal period which does not contain 12 months, then
in making the computation of Tenant's obligation for Taxes for each month in
such fiscal period, there shall be substituted in the computation under step
(i), in lieu of 1/12 of such Tax, that fraction thereof arrived at by dividing
such Tax by the number of months in such fiscal period.
EMINENT DOMAIN
TWENTY-NINE. - If 10% or more the Demised Premises or 15% or more of the
Shopping Center of which the Demised Premises are a part shall be acquired or
condemned by right of eminent domain for any public or quasi public use or
purpose, then landlord at its election may terminate this Lease by giving notice
to Tenant of its election, and in such event rentals shall be apportioned and
adjusted as of the date of termination. If the term of this Lease shall not be
terminated as aforesaid, then the term of this Lease shall continue in full
force and effect, and Landlord shall within a reasonable time after possession
is physically taken (subject to delays due to shortage of labor, materials or
equipment, labor difficulties, breakdown of equipment, government restrictions,
fires, other casualties or other causes beyond the reasonable control of
Landlord) repair or rebuild what may remain of the Demised Premises for the
occupancy of Tenant; and a just proportion of the minimum rent shall be abated,
according to the nature and extent of the injury to the Demised Premises, until
what may remain of the Demised Premises shall be repaired and rebuilt as
aforesaid; and thereafter a just proportion of the minimum rent shall be abated,
according to the nature and extent of the part of the Demised Premises acquired
or condemned, for the balance of the term of the Lease.
Landlord reserved to itself, and Tenant assigns to Landlord, all rights to
damages accruing on account of any such taking or condemnation or by reason of
any act of any public or quasi authority for which damages are payable. Tenant
agrees to execute such instruments of assignment as may be required by Landlord,
to join with Landlord in any petition for the recover of damages, if requested
by Landlord, and to turn over to Landlord any such damages that may be recovered
in any such proceeding. If Tenant shall fail to execute such instruments as may
be required by Landlord, or to undertake such other steps as may be requested as
herein stated, then and in any such event, Landlord shall be deemed the duly
authorized irrevocable agent and attorney-in-fact of Tenant to execute such
instruments and undertake such steps as herein stated in and on behalf of
Tenant. It is agreed and understood, however, that Landlord does not reserve to
itself, and Tenant does not assign to Landlord, any damages payable or trade
fixtures installed by Tenant at its own cost and expense and which are not part
of the realty.
LAY-OUT OF SHOPPING CENTER
THIRTY. - This Lease does not guarantee a continuance of light and air over
the Demised Premises or any property adjoining the Demised Premises; the
reference herein made to the Plan setting forth the general lay-out of the
buildings, parking areas, and other improvements shall not be deemed to be a
warranty, or representation. However, the Demised Premises when constructed,
will be substantially in dimensions and size as indicated on the Plan.
Landlord hereby reserves the right at any time to make alterations or
additions to and to build additional stories on the buildings in which the
Demised Premises are contained and to build additions adjoining the same or
elsewhere in the Shopping Center. Landlord also reserves the right to construct
other buildings or improvements in the Shopping Center from time to time and to
make alteration thereof or additions thereto and to build additional stories on
any such building or buildings and to build adjoining same.
INTERPRETATION
THIRTY-ONE. - It is agreed that if any provision of this Lease shall be
determined to be void by any court of competent jurisdiction then such
determination shall not affect any other provision of this Lease, all of which
other provisions shall remain in full force and effect; and it is the intention
of the parties hereto that if any provision of this Lease is capable of tow
constructions, on of which would render the provision void and the other of
which would render the provision valid, then the provision shall have the
meaning which renders it valid.
(6)
<PAGE>
ENTIRE AGREEMENT
THIRTY-TWO. - It is agreed that neither Landlord nor anyone acting on its
behalf has made any statement, promise or agreement, or taken upon itself any
engagement whatever, verbally or in writing, in conflict with the terms of this
Lease, or that in any way modifies, varies, alters, enlarges or invalidates any
of its provisions, and that no obligations of the Landlord shall be implied in
addition to the obligations herein expressed.
All notices to be given hereunder by either party shall be in writing and
given to the Landlord or the Tenant, and shall be sent by registered or
certified mail postage prepaid addressed to the party intended to be notified at
the post office address of such party last known to the party giving notice, and
notice given as aforesaid shall be a sufficient service thereof and shall be
deemed given as of the date when deposited in any office, or in any post office
box regularly maintained by the Federal Government. A duplicate copy of all
notices from the Tenant shall be sent to mortgagee if Landlord has informed
Tenant of the name and address of the mortgagee. A mortgagee shall have the same
rights to cure any default which landlord has.
Within ten days after request thereof by Landlord, or in the event that
upon any sale, assignment or hypothecation of the Demised Premises and/or the
land thereunder by Landlord, Tenant agrees to deliver in recordable form a
certificate to any proposed mortgagee or purchaser, or to Landlord, certifying
(if such be the case) that this Lease is in full force and effect and that there
are no defenses or offsets thereto (or stating those claimed by Tenant) and such
other relevant facts as may be therein requested.
It is understood that the term Landlord and Tenant used herein, shall be
construed to mean Landlords and Tenants where there is more than one, and the
necessary grammatical changes required to make the provisions hereof apply
either to corporations or individuals, masculine or feminine, shall in all cases
be assumed as though fully expressed.
The word "Landlord" as used in this Lease means only the owner for the time
being of Landlord's interest in this Lease. In the event any assignment of
Landlord's interest in this Lease, the assignor shall no longer be liable for
the performance or observance of any agreements or conditions on the part of
Landlord to be performed or observed.
In the event the Tenant hereunder shall be a corporation, the parties
executing this Lease hereby covenant and warrant that: the Tenant is a duly
qualified corporation and all steps have been taken prior to the date hereof to
qualify Tenant to do business in the state wherein the Demised Premises are
located; all franchise and corporate taxes have been paid to date; all future
forms, report, fees and other documents necessary to comply with applicable laws
will be taken or filed when due.
HAVE AND HOLD
The Landlord covenants that the Tenant, subject to the conditions and
covenants herein contained, on paying the rent and performing the covenants
aforesaid, shall and may peacefully and quietly have, hold and enjoy the demised
premises for the term aforesaid.
The convenants and agreements contained in the foregoing Lease are binding
upon the parties hereto and their respective heirs, executors, administrators,
successors, legal representatives and assigns.
SUBMISSION OF LEASE
THIRTY-THREE. - The submission of this Lease for examination does not
constitute and offer to lease, and this Lease becomes effective only upon
execution thereof by Landlord and Tenant. Upon the execution of this Lease by
the Tenant, the Landlord is granted by the Tenant an option on the part of the
Landlord for thirty days to execute and complete this Lease. Said option may not
be withdrawn during said thirty day period. If Landlord shall not execute this
Lease within said period and immediately thereafter return a fully executed copy
to Tenant, Tenant may withdraw its offer hereunder.
INSURANCE
THIRTY-FOUR. - The Landlord has purchased fire and extended coverage and
public liability insurance insuring the Shopping Center of which these Demised
Premises are a part. The Landlord may hereafter raise such coverage in such
amounts as may from time to time be prudent to Landlord within its sole
discretion. Such policies may insure the Shopping Center of which these Premises
are a part and other properties and locations; in such event, there shall be a
just and equitable allocation of the insurance costs chargeable to the Shopping
Center of which these Demised Premises are a part. Tenant agrees to pay to
Landlord on the first day of each and every month as Tenant's contribution
toward such costs the amount obtained computing one-twelfth (1/12th) of the
annual insurance costs, multiplying the sum resulting from such computation by a
fraction, the numerator of which shall be the floor area of the Demised Premises
and the denominator of which shall be the floor area of all leaseable space in
the entire Shopping Center. In the event that it is from time to time necessary
to make adjustment in such computation, the Landlord shall do so and the Tenant
shall promptly make such payment upon being billed therefor.
REPAIR LABOR
THIRTY-SIX. - Provided that the laws of the State wherein the Demised
Premises are located or the Federal laws do not make the following provision
unlawful, then, whenever the Tenant makes any repairs, alterations or
improvements (including original improvements and fixturing), it shall use only
union labor of a recognized building trade. The Landlord shall not enforce the
foregoing provision unless and until a work stoppage or strike is in progress or
is threatened in any part of the Shopping Center.
DELIVERIES
THIRTY-SEVEN. - Tenant shall complete or cause to be completed all
deliveries, loading, unloading and servicing at the Demised Premises prior to 10
A.M. of each day. No delivery trucks or other vehicles servicing the Demised
Premises shall park or stand in front of or at the rear of the Demised Premises
after 10 A.M. of each day. The Landlord reserves the right to further regulate
the activities of the Tenant in regard to deliveries and servicing of the
Demised Premises; and Tenant agrees to abide by such further regulations of
Landlord.
LIMITED LIABILITY
THIRTY-EIGHT. - If the Landlord or any successor in interest shall be an
individual, joint venture, tenancy in common, firm or partnership, general or
limited, there shall be no personal liability on such individual or on the
members of such joint venture, tenancy in common, firm or partnership, or on
such joint venture, tenancy in common, firm or partnership, in respect to any of
the covenants or conditions of this lease. Tenant shall look solely to the
estate and property of the Landlord in the land and buildings comprising the
Shopping Center of which the demised premises are a part, for collection of any
judgment (or other judicial process) requiring the payment of money by the
Landlord or in the event of any default or breach by the Landlord with respect
to any of the terms, covenants and conditions of this Lease to be observed
and/or performed by Landlord, and no other property or assets of the Landlord
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies.
(7)
<PAGE>
RECORDATION
FORTY. - Landlord may, whenever Landlord deems it necessary, record this
Lease and abstracts and memoranda thereof, whether required or permitted by law,
in whatever States or jurisdictions in which the same is recordable, at Tenant's
sole cost and expense (including, but not limited to, the recording fees, taxes
and other costs and expenses of recordation), which tenant shall pay to Landlord
immediately upon any such recordation; and further, Landlord shall have such
right of recordation notwithstanding any recordation, if any, of this Lease or
any abstracts or memoranda thereof by Tenant, or any other act of Tenant.
TERMINATION
FORTY-ONE. - In the event the Commencement Date of this Lease shall not
have in fact occurred within four (4) years of the date hereof, this Lease
thereupon shall be automatically null and void and of no force and effect.
SUSPENSION OF POSSESSION
FORTY-TWO. - If Landlord is unable to tender Tenant possession of the
Demised Premises as herein provided, buy reason of the holding-over of a
previous occupant or by reason of any other cause beyond the control of
Landlord, Landlord shall not be liable to the Tenant therefor and during the
period that Landlord is unable to give possession, all rights, remedies and
obligations of both parties hereunder shall be suspended.
NO LIEN PROVISION
FORTY-THREE. - Certain rights are afforded under this lease to the Tenant
permitting the Tenant to make certain renovations and improvements in the
premises demised hereunder. Notwithstanding this, however, the parties
understand and agree that the Tenant shall never have the right to undertake any
act which would allow the imposition of a lien on the interest of the Landlord
in the property and improvements constituting the Shopping Center of which the
Demised Premises are a part, and the Tenant agrees that it will undertake to
present to all of those persons who may deal with Tenant, where applicable, that
it has no authority, right or privilege to allow, suffer or permit the
imposition of any lien contrary to that set out herein.
This Lease consists of 43 paragraphs, a plan marked Schedule "A", sign
requirements marked Schedule "B" and construction requirements marked Schedule
"C", Rider Paragraphs 44 and 45, Rider to Paragraph 12 and rental Schedule "D".
IN WITNESS WHEREOF, this Lease has been duly executed by the parties
hereto, intending to be legally bound thereby, under seal as of the day and year
first written above.
Witnesses:
LANDLORD:
JULIUS MUFSON, TRUSTEE, AND ALAN J.
/s/ [ILLEGIBLE] GOLDSTEIN, TRUSTEE d/b/a HALLANDALE
- ----------------------------------- PLACE JOINT VENTURE
/s/ Ruth Cezzik By: /s/ Julius Mufson
- ----------------------------------- ------------------------------
As to Landlord
TENANT:
/s/ Patricia Riccio SHOCHET SECURITIES INC., a Fla. corp.,
- -----------------------------------
/s/ [ILLEGIBLE] By:/s/ Marvin A. Shochet
- ----------------------------------- ------------------------------
As to Tenant Marvin A. Shochet, President
Attest: /s/ Sally Shochet
--------------------------
Sally Shochet, Sec./Treas.
(8)
<PAGE>
RIDER ATTACHED TO LEASE BY AND BETWEEN
HALLANDALE PLACE JOINT VENTURE, AS LANDLORD, and
SHOCHET SECURITIES INC., AS TENANT,
ANNEXED THERETO AND MADE A PART THEREOF,
DATED NOVEMBER 30, 1984.
RIDER TO PARAGRAPH TWELVE: In furtherance of the restrictions imposed upon the
Tenant herein, and not in limitation thereof, the Tenant agrees that it shall
not display, within or without the premises, any handmade or handlettered signs
and shall maintain the signs within the premises of similar quality to those of
other tenants in the Shopping Center of which the demised premises are a part.
Any breach of the foregoing shall be deemed to be a material breach and a
default entitling the Landlord to all of the rights and remedies provided in
this Lease.
RIDER PARAGRAPH FORTY-FOUR: Reference is made to lease dated December 22, 1977,
between E.M. Loew's Theatres, Inc., as landlord and Landlord, as Tenant, of
certain premises of which the leased premises is a part. A Memorandum of Lease
has been recorded with the Public Records of Dade County, Florida OR Book 7466
at Page 385. Notwithstanding anything contained in this Lease to the contrary,
this Lease and the rights of Tenant hereunder are subject to the provisions of
the Parent Lease, insofar as they shall be applicable, and if there are any
provisions of this Lease which are inconsistent with any of the provisions of
the Parent Lease shall control and the repugnant provisions of this Lease shall
be modified to the extent necessary to remove the inconsistency, without any
claim for damages by Tenant against Landlord. If for any reason the term of the
Parent Lease shall terminate (including, but without limitation, by the exercise
by the landlord or tenant thereunder of any election to it therein), then the
term of this Lease shall likewise terminate simultaneously with such
termination, and neither party hereto shall acquire any right or cause of action
against the other as the result of such termination. Wherever Tenant is
obligated to name Landlord as an additional insured, Tenant will, upon request
of Landlord, also name Overlandlord.
<PAGE>
RIDER ATTACHED TO LEASE BY AND BETWEEN
JULIUS MUFSON, ET AL, AND LANDLORD, and
SCHOCHET SECURITIES INC., a Florida Corp.,
AS TENANT, ANNEXED THERETO AND MADE A
PART THEREOF AND DATED NOVEMBER 30, 1984.
RIDER PARAGRAPH FORTY-FIVE: Option to Renew: Provided the Tenant shall have
fully performed its obligations to be performed hereunder in strict compliance
with the terms hereof, the Tenant shall have the right and privilege of electing
to renew the term of this lease for a period of three (3) years, said term to
commence immediately upon the expiration of the term conferred hereunder, and to
terminate at midnight on the third anniversary hereof. Said additional term
shall be under terms and conditions as set out herein, excepting, however, that
the minimum guaranteed annual rents for such term shall be as follows:
During the first year of the option term, THIRTY-TWO THOUSAND ONE HUNDRED
TEN and 08/100 DOLLARS ($32,110.08) payable in equal monthly installments
of TWO THOUSAND SIX HUNDRED SEVENTY-FIVE and 84/100 DOLLARS ($2,675.84)
each, plus applicable taxes and any and all other charges provided for as
set forth in this lease.
During the second year of the option term, THIRTY-THREE THOUSAND EIGHT
HUNDRED and 04/100 DOLLARS ($33,800.04) payable in equal monthly
installments of TWO THOUSAND EIGHT HUNDRED SIXTEEN and 67/100 DOLLARS
($2,816.67) each, plus applicable taxes and any and all other charges
provided for as set forth in this lease.
During the third year of the option term, THIRTY-FIVE THOUSAND FOUR HUNDRED
NINETY and 00/100 DOLLARS ($35,490.00) payable in equal monthly
installments of TWO THOUSAND NINE HUNDRED FIFTY-SEVEN and 50/100 DOLLARS
($2,957.50) each , plus applicable taxes and any and all other charges
provided for as set forth in this lease.
Such option to renew shall be exercised by Tenant's delivering to Landlord
written notice of such intent not later than one hundred eighty (180) days prior
to the expiration of this Lease. Delivery of such notice to the place where
Tenant's rent is paid, by Certified Mail, shall constitute sufficient
notification to Landlord by Tenant.
<PAGE>
[This page is map of SITE DEVELOPMENT PLAN of the
Hallandale Place located on Hallandale Beach Boulevard.]
SCHEDULE "A"
<PAGE>
RIDER ATTACHED TO LEASE BY AND BETWEEN
HALLANDALE PLACE JOINT VENTURE, AS LANDLORD
AND SHOCHET SECURITIES INC., AS TENANT,
ANNEXED THERETO AND DATED November 30, 1984
SCHEDULE "B" --- TENANTS SIGN SPECIFICATION
Tenant shall be required to conform with the following construction
specifications unless Tenant obtains a waiver thereof in writing from Landlord
for mall front and/or exterior signs.
LOCATION OF SIGN
The location of the Tenant's sign shall be for mall front and/or exterior signs
as approved by the Landlord. The sign may be placed on the face of the mall wall
between the mall opening and the beam above for mall fronting stores and on the
face of the building above the doors and below the parapet or roof overhand
where exterior signs are specifically approved.
Signs may not be placed above canopies or on mansard facing without the consent
of the Landlord. The location of all signs shall be as approved by the Landlord.
SIZE OF TENANT'S SIGN
(a) For mall store fronts, the sign shall fit within the designated sign facia
panel if sign is of applied lettering type and shall be contained within a
rectangular space not exceeding 2/3 of the area of the designated sign panel.
Box signs may be used only by special permission of the Landlord and shall cover
the entire designation sign facia panel or the box shall be proportioned to
provide esthetically proportioned edge spaces.
(b) For exterior store fronts the sign shall be proportioned to be contained
within a rectangular area not to exceed 15% of the exterior wall surface,
including openings, allocated to the tenant's rental unit.
PROJECT OF TENANT'S SIGN
(a) The sign shall not project above the canopy, bottom of Mansard, Parapet, or
mall beam of Tenant's rental unit.
(b) The sign shall not project more than 8 inches from the wall surface
designated for the mounting of signs.
TYPES OF SIGNS PERMITTED - ALL SIGNS MUST BE ILLUMINATED
The tenant shall install a sign of one of the following types of construction,
depending upon which sign type the landlord requires for that particular
location. No other types of sign shall be permitted.
(a) Plastic or metal silhouette letters, not less than 1-inch thickness.
(b) Metal channeled letters.
ERECTION, MAINTENANCE AND REMOVAL OF TENANT'S SIGN
(a) All work shall be done in a workmanlike manner by master mechanics and when
exposed to the weather, shall be on non-corrosive materials and secured with
non-corrosive fastenings in a manner not to cause staining of the face of the
building.
(b) Any damages to facia shall be repaired by Tenant at Tenant's expense and to
Landlord's satisfaction and approval. Exterior signs shall not disturb the
weatherproofing of the structure.
(c) Signs shall comply with the applicable building and fire codes and shall not
reduce the fire resistivity of the building.
(d) All local ordinances must be complied with.
(e) Tenant's sign company must carry adequate insurance to cover any accident or
damage.
(f) No painting of any type will be permitted on the building.
(g) Transformers must be located in the attic space, inside above Tenant's
rental store front, or within the sign letter or box.
(h) Wiring must be concealed except for face mounted exterior signs where
jumpers may be permitted between individual letters.
(i) Signs shall be properly maintained and operated. Illuminated signs shall
have burned out lamps, tubes, etc., promptly replaced. Visible surfaces shall
not be permitted to deteriorate and shall be restored if damage of such occurs.
(j) Upon removal of the sign or vacating the demised premises Tenant shall
remove sign and restore facia to original condition of the Tenant's expense, and
to the satisfaction and approval of the Landlord.
APPROVAL
The shop drawing for Tenant's sign must be submitted to the Landlord in
Triplicate for approval, no work shall commence until said approval is received
by the Tenant from the Landlord. Landlord's approval shall not relieve the
tenant from the duty of conforming with any and all applicable [ILLEGIBLE]
<PAGE>
RIDER ATTACHED TO LEASE BY AND BETWEEN
HALLANDALE PLACE JOINT VENTURE, AS
LANDLORD, AND SHOCHET SECURITIES INC.,
AS TENANT, ANNEXED THERETO AND MADE A
PART THEREOF AND DATED November 30, 1984.
CONSTRUCTION SCHEDULE "C"
1. Tenant agrees to take the demised premises in an "as is" condition.
2. Air conditioning will be checked and leaks repaired.
<PAGE>
RIDER ATTACHED TO LEASE BY AND BETWEEN
JULIUS MUFSON, ET AL, AS LANDLORD, and
SHOCHET SECURITIES INC., AS TENANT,
ANNEXED THERETO AND MADE A PART THEREOF
AND DATED November 30, 1984.
RENTAL SCHEDULE "D"
The minimum guaranteed annual rental during the first year of the term of this
lease shall be TWENTY-SEVEN THOUSAND FORTY and 08/100 DOLLARS ($27,040.08)
payable in equal monthly installments of TWO THOUSAND TWO HUNDRED FIFTY-THREE
and 34/100 DOLLARS ($2,253.34) each, plus applicable taxes and any and all
other charges provided for as set forth in this lease.
The minimum guaranteed annual rental during the second year of the term of this
lease shall be TWENTY-EIGHT THOUSAND SEVEN HUNDRED THIRTY and 04/100 DOLLARS
($28,730.04) payable in equal monthly installments of TWO THOUSAND THREE HUNDRED
NINETY-FOUR and 17/100 DOLLARS ($2,394.17) each, plus applicable taxes and any
and all other charges provided for as set forth in this lease. The minimum
guaranteed annual rental during the third year of the term of this lease shall
be THIRTY THOUSAND FOUR HUNDRED TWENTY and 00/100 DOLLARS ($30,420.00) payable
in equal monthly installments of TWO THOUSAND FIVE HUNDRED THIRTY-FIVE and
00/100 DOLLARS ($2,535.00) each, plus applicable taxes and any and all other
charges provided for as set forth in this lease.
Annual Rental for first year to be adjusted to reflect 11 months rent 3/85 to
2/86.
Square footage adjustment to be made if additional footage is used for
Morrison's Cafe.
<PAGE>
REVISED SCHEDULE "A" is contained on this page. It is the site plan for
Hallandale Place located on Hallandale Beach Boulevard.
<PAGE>
AMENDMENT TO LEASE
THIS AMENDMENT, made and entered into this 25th day of July, 1986, by and
between JULIUS MUFSON, TRUSTEE, and ALAN J. GOLDSTEIN, TRUSTEE, d/b/a HALLANDALE
PLACE JOINT VENTURE, as Landlord, hereinafter referred to as "Landlord", and
SHOCHET SECURITIES INC., as Tenant, hereinafter referred to as "Tenant."
WITNESSETH:
WHEREAS, the Parties desire to amend certain terms and conditions of that
certain Lease entered into on the 30th day of November, 1984, by and between
JULIUS MUFSON, TRUSTEE, and ALAN J. GOLDSTEIN, TRUSTEE, d/b/a HALLANDALE PLACE
JOINT VENTURE, AND SHOCHET SECURITIES INC. covering certain premises in Broward
County, Florida, more particularly described on Exhibit "A" attached hereto and
by this reference made a part thereof, said Lease being hereinafter designated
as the "Lease".
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable considerations, the receipt and sufficient whereof is hereby
acknowledged, the Parties do agree as follows:
1. Page 1, paragraph after "Witnesseth:" delete "3,380" and in place insert
"6,305".
2. The term of this lease shall be extended for three (3) years commencing
February 1, 1988 and expiring January 31, 1991.
3. Rental Schedule "D" delete the third paragraph and in place insert the
following:
"The minimum guaranteed monthly rental payable February 1, 1987 and March
1, 1987 shall be TWO THOUSAND FIVE HUNDRED THIRTY-FIVE and 00/100 DOLLARS
($2,535.00) each month, plus applicable taxes and any and all other charges
provided for as set forth in this lease.
The minimum guaranteed monthly rental commencing April 1, 1987 through
January 31, 1988 shall be FOUR THOUSAND SEVEN HUNDRED TWENTY-EIGHT and
75/100 DOLLARS ($4,728.75) each, plus applicable taxes and any and all
other charges provided for as set forth in this lease."
<PAGE>
4. The following paragraphs shall be added to Rental Schedule "D":
"The minimum guaranteed annual rental during the fourth year of the term of
this lease shall be FIFTY-NINE THOUSAND EIGHT HUNDRED NINETY-SEVEN and
52/100 DOLLARS ($59,897.52) payable in equal monthly installments of FOUR
THOUSAND NINE HUNDRED NINETY-ONE and 46/100 DOLLARS ($4,991.46) each, plus
aplicable taxes and any and all other charges provided for as set forth in
this lease.
The minimum guaranteed annual rental during the fifth year of the term of
this lease shall be SIXTY-THREE THOUSAND FIFTY and 04/100 DOLLARS
($63,050.04) payable in equal monthly installments of FIVE THOUSAND TWO
HUNDRED FIFTY-FOUR and 17/100 DOLLARS ($5,254.17) each, plus applicable
taxes and any and all other charges provided for as set forth in this
lease.
The minimum guaranteed annual rental during the sixth year of the term of
this lease shall be SIXTY-SIX THOUSAND TWO HUNDRED TWO and 56/100 DOLLARS
($66,202.56) payable in equal monthly installment of FIVE THOUSAND FIVE
HUNDRED SIXTEEN and 88/100 DOLLARS ($5,516.88) each, plus applicable taxes
and any and all other charges provided for as set forth in this lease."
5. Rider Paragraph Forty-five: Option to Renew: shall be deleted in its
entirely and in place inserted the following:
RIDER PARAGRAPH FORTY-FIVE: Option to Renew: Provided the Tenant shall have
fully performed its obligations to be performed hereunder in strict compliance
with the terms hereof, the Tenant shall have the right and privilege of electing
to renew the term of this lease for a period of three (3) years, said term to
commence immediately upon the expiration of the term conferred hereunder, and to
terminate at midnight on the third anniversary hereof. Said additional term
shall be under terms and conditions as set out herein, excepting, however, that
the minimum guaranteed annual rents for such term shall be as follows:
During the first year of the option term, SIXTY-NINE THOUSAND THREE HUNDRED
FIFTY-FIVE and 08/100 DOLLARS ($69,355.08) payable in equal monthly
installments of FIVE THOUSAND SEVEN HUNDRED SEVENTY-NINE and 59/100 DOLLARS
($5,779.59) each, plus applicable taxes and any and all other charges
provided for as set forth in this lease.
During the second year of the option term, SEVENTY-TWO THOUSAND FIVE
HUNDRED SEVEN and 60/100 DOLLARS ($72,507.60) payable in equal monthly
installments of SIX THOUSAND FORTY-TWO and 30/100 DOLLARS ($6,042.30) each,
plus applicable taxes and any and all other charges provided for as set
forth in this lease.
During the third year of the option term, SEVENTY-FIVE THOUSAND SIX HUNDRED
SIXTY and 00/100 DOLLARS ($75,660.00) payable in equal monthly installments
of SIX THOUSAND THREE HUNDRED FIVE and 00/100 DOLLARS ($6,305.00) each,
plus applicable taxes and any and all other charges provided for as set
forth in this lease.
Such option to renew shall be exercised by Tenant's delivering to landlord
written notice of such intent not later than one hundred eighty (180) days prior
to the expiration of this Lease. Delivery of such notice to the place where
Tenant's rent is paid. by Certified Mail, shall constitute sufficient
notification to Landlord by Tenant.
<PAGE>
6. It is understood and agreed Tenant's employees shall park in the parking
spaces provided the shopping center by St. Mathews Church along the north end of
the Church property line.
7. Schedule "A" is to be replaced with Revised Schedule "A" attached
hereto.
8. As so modified and amended, the Lease is hereby adopted, ratified and
confirmed effective July 1, 1986.
IN WITNESS WHEREOF, the Landlord and the Tenant have respectively signed
and sealed this Lease as of the day and year first above written.
WITNESSES: LANDLORD: JULIUS MUFSON, TRUSTEE,
AND ALAN J. GOLDSTEIN, TRUSTEE,
/s/ [ILLEGIBLE] d/b/a HALLANDALE PLACE JOINT VENTURE
- -------------------------
By: /s/ Julius Mufson
/s/ Loretta I. Dodds -------------------------
- -------------------------
TENANT: SHOCHET SECURITIES INC.,
/s/ [ILLEGIBLE] a Florida corporation,
- -------------------------
By: /s/ Marvin A. Shochet
----------------------------
/s/ Robert D. Smith Marvin A. Shochet, President
- -------------------------
Attest: /s/ Sally Shochet
----------------------
Sally Shochet, Sec/Treas.
<PAGE>
SECOND AMENDMENT TO LEASE
THIS AMENDMENT, made and entered into the 1st day of November, 1990, by and
between SHOCHET SECURITIES INC., as tenant, and JULIUS MUFSON, TRUSTEE, and ALAN
J. GOLDSTEIN, TRUSTEE, d/b/a HALLANDALE PLACE JOINT VENTURE, as Landlord,
hereinafter referred to as "Landlord".
WITNESSETH:
WHEREAS, the Parties desire to amend certain terms and conditions of that
certain Lease entered into on the 30th day of November, 1984, by and between
SHOCHET SECURITIES, INC., and JULIUS MUFSON, TRUSTEE, and ALAN J. GOLDSTEIN,
TRUSTEE, d/b/a HALLANDALE PLACE JOINT VENTURE covering certain premises in
Broward County, Florida, more particularly described on Exhibit "A" attached
hereto and by this reference made a part thereof, said Lease being hereinafter
designated as the "Lease".
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable considerations, the receipt and sufficiency whereof is hereby
acknowledged, the Parties do agree as follows:
1. The term of this Lease shall be extended for two (2) years eleven (11)
months commencing February 1, 1991 through December 31, 1993.
2. The last paragraph of Rental Schedule "D" shall be deleted and in place
inserted the following:
"The minimum guaranteed monthly rental commencing February 1, 1990 through
December 31, 1990 shall be FIVE THOUSAND FIVE HUNDRED SIXTEEN and 88/100
DOLLARS ($5,516.88) each, plus applicable state taxes and any and all other
charges provided for as set forth in this lease."
3. The minimum guaranteed annual rental commencing January 1, 1991 through
December 31, 1993 shall be SIXTY-THREE THOUSAND FIFTY and 04/100 DOLLARS
($63,050.04) per year payable in equal monthly installments of FIVE THOUSAND TWO
HUNDRED FIFTY-FOUR and 17/100 DOLLARS ($5,254.17) each, plus applicable taxes
and any and all other charges provided for as set forth in this lease.
<PAGE>
4. It is understood and agreed Tenant shall not be obligated to pay base
rent for the months of January, February and March 1991 but shall pay only
prorata common area maintenance, prorata real estate taxes and prorata insurance
plus applicable taxes as called for in paragraphs 9, 28, 34, respectively, of
the lease for the months of January, February and March 1991.
5. As so modified and amended, the Lease is hereby adopted, ratified and
confirmed.
IN WITNESS WHEREOF, the Landlord and the Tenant have respectively signed
and sealed this Lease as of the day and year first above written.
WITNESSES: LANDLORD: JULIUS MUFSON, TRUSTEE,
AND ALAN J. GOLDSTEIN, TRUSTEE,
d/b/a HALLANDALE PLACE JOINT
/s/ [ILLEGIBLE] VENTURE
- -----------------------------------
By: /s/ Julius Mufson, TRUSTEE
/s/ [ILLEGIBLE] ------------------------
- -----------------------------------
TENANT: SHOCHET SECURITIES INC.
/s/ Alicia Brown
- ----------------------------------- By:/s/ Marvin A. Shochet
----------------------------
Marvin A. Shochet, President
/s/ Alicia Brown
- -----------------------------------
By: /s/ Sally Shochet
/s/ Grace [Illegible] ----------------------------
- ----------------------------------- Sally Shochet, Sec./Treas.
<PAGE>
[TEXT OMMITTED]
During the third year of the option, EIGHTY-FIVE THOUSAND ONE HUNDRED
SEVENTEEN and 56/100 DOLLARS ($85,117.56) payable in equal monthly
installments of SEVEN THOUSAND NINETY-THREE and 13/100 DOLLARS ($7,093.13)
each, plus applicable taxes and any and all other charges provided for as
set forth in this lease.
Such option to renew shall be exercised by Tenant's delivering to Landlord
written notice of such intent not later than one hundred eighty (180) days
prior to the expiration of this Lease. Delivery of such notice to the place
where Tenant's rent is paid, by Certified Mail, shall constitute sufficient
notification to Landlord Tenant."
2. All other terms and conditions of the lease shall remain in full force
and effect.
3. As so modified and amended, the Lease is hereby adopted, ratified and
confirmed.
4. The submission of this Amendment to Lease to the parties herein does not
constitute and offer to amend the Landlord's Lease and this Amendment to Lease
becomes effective only upon execution thereof by the Landlord and the Tenant.
IN WITNESS WHEREOF, the Landlord and the Tenant have respectively signed and
sealed this Lease as of the day and year first above written.
WITNESSES: LANDLORD: JULIUS MUFSON, TRUSTEE, AND
/s/ [ILLEGIBLE] ALAN J. GOLDSTEIN, TRUSTEE, d/b/a
- ----------------------------------- HALLANDALE PLACE JOINT VENTURE
/s/ Olga M. Zuniga By: /s/ Julius Mufson, TRUSTEE
- ----------------------------------- --------------------------
TENANT: SHOCHET SECURITIES INC.
/s/ [ILLEGIBLE] By:/s/ Marvin A. Shochet
- ----------------------------------- ----------------------------
Marvin A. Shochet, President
/s/ [ILLEGIBLE] By: /s/ Sally Shochet
- ----------------------------------- --------------------------
Sally Shochet, Sec./Treas.
<PAGE>
THIRD AMENDMENT TO LEASE
THIS AMENDMENT, made and entered into the 29th day of September, 1993, by
and between SHOCHET SECURITIES INC., as Tenant, and JULIUS MUFSON, TRUSTEE, and
ALAN J. GOLDSTEN , TRUSTEE, d/b/a HALLANDALE PLACE JOINT VENTURE, as Landlord,
hereinafter referred to as "Landlord".
WITNESSETH:
WHEREAS, the Parties desire to amend certain terms and conditions of that
certain Lease entered into on the 30th day of November, 1984, and amended on
July 25, 1986 and November 1, 1990 by and between Tenant and Landlord covering
certain premises in Broward County, Florida, more particularly described on
Exhibit "A" attached hereto and by this reference made a part thereof, said
Lease being hereinafter designated as the "Lease".
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable considerations, the receipt and sufficiency whereof is hereby
acknowledged, the Parties do agree as follows:
1. The following paragraph shall be added to the lease:
"RIDER PARAGRAPH FORTY-SIX" SECOND OPTION TO RENEW: Provided the Tenant
shall have fully performed its obligations to be performed hereunder in
strict compliance with the terms hereof, the Tenant shall have the right
and privilege of electing to renew the term of this lease for a period of
three (3) years, said term to commence immediately upon the expiration of
the first option term conferred hereunder, and to terminate at midnight on
the third anniversary hereof. Said additional term shall be under the same
terms and conditions as set out in the lease, excepting, however, that the
minimum guaranteed annual rent for the option shall be as follows:
During the first year of the option, SEVENTY-EIGHT THOUSAND EIGHT HUNDRED
TWELVE and 52/100 DOLLARS ($78,812.52) payable in equal monthly
installments of SIX THOUSAND FIVE HUNDRED SIXTY-SEVEN and 71/100 DOLLARS
($6,567.71) each, plus applicable taxes and any and all other charges
provided for as set forth in this lease.
During the second year of the option, EIGHTY-ONE THOUSAND NINE HUNDRED
SIXTY-FIVE and 04/100 DOLLARS ($81,965.04) payable in equal monthly
installments of SIX THOUSAND EIGHT HUNDRED THIRTY and 42/100 DOLLARS
($6,830.42) each, plus applicable taxes and any and all other charges
provided for as set forth in this lease.
EXHIBIT 10.7
ASSIGNMENT OF SUBLEASE AND MASTER LEASE
TERMINATION AGREEMENT
THIS ASSIGNMENT OF SUBLEASE AND MASTER LEASE TERMINATION AGREEMENT dated
this 21st day of April, 1993 between SHELDON REALTY d/b/a MURRAY M. SHELDON,
4014 Chase Avenue, Suite 210, Miami Beach, Florida 33140 ("Master Landlord") and
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, 214 N.
Hogan Street, 6th Floor, Jacksonville, Florida 32202 ("Sublandlord").
W I T N E S S E T H
WHEREAS, Master Landlord is the landlord under that certain lease dated
April 23, 1975 (the "Master Lease") between Emmanuel Green, as landlord, and Mr.
Chips of 41st Street, Inc., concerning space in a building located at 519 Arthur
Godfrey Road, Miami Beach, Dade County, Florida more particularly described in
the Master Lease ("the Premises"). The interests of the landlord under the
Master Lease was assigned by successive assignments to the Master Landlord, and
the interest of the tenant under the Master Lease was assigned by successive
assignments to Sublandlord; and
WHEREAS, Sublandlord has, with the prior written consent of the Master
Landlord agreed to sublet the Premises to Shochet Securities, Inc., a Florida
corporation (the "Subtenant") pursuant to that certain Sublease between the
Sublandlord and Subtenant dated April 26, 1993 (the "Sublease"); and
WHEREAS, Sublandlord has requested that the Master Landlord accept
assignment of the Sublease and attornment by the Subtenant thereunder, and that
the Master Landlord terminate the Master Lease following the acceptance of such
assignment and release Sublandlord from any and all further liabilities
thereunder; and
WHEREAS, Master Landlord has agreed to do so, but only on the condition
that the Sublandlord pay to it the sum of $34,973.00 representing the difference
between the rent to be paid under the sublease and the rent due and owing under
the Master Lease for the remainder of the current term, and the Sublandlord has
agreed to make such payment.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the payment of rent in the amount of $34,973.00 by the Sublandlord to the
Master Landlord, and for other good and valuable consideration, the receipt in
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The foregoing recitations are fact are true and correct and are
incorporated herein by Sublease to the Master Landlord, together with all rents
and other fees and charges due thereunder, from and after the date hereof.
<PAGE>
3. Simultaneously with the execution of this Agreement, the Sublandlord has
paid over and delivered to the Master Landlord the security deposit of the
Subtenant under the Sublease of $7,250.00, (the "Deposit") and has paid to the
Master Landlord the sum of $37,246.25 constituting that portion of the rent due
under the Master Lease for the remainder of the current term of $34,973.00, plus
$2,273.25 for the Florida sales tax due thereon. Master Landlord accepts the
Deposit and agrees to hold it in accordance with the terms of the Sublease.
4. Master Landlord hereby accepts assignment of the Sublease and accepts
attornment from the Subtenant thereunder. Master Landlord recognizes the
Sublease and the Subtenant thereunder as if the Master Landlord had been a party
to the Sublease from the beginning, and does hereby ratify and affirm the
covenants of non-disturbance and peaceful and quiet enjoyment set forth therein.
From and after the date hereof, the Sublease shall be the sole leasehold estate
in the Premises granted by the Master Landlord.
5. Master Landlord and Sublandlord do hereby terminate the Master Lease
effective immediately, and release, exonerate and discharge each other from any
and all further duties, obligations and liabilities thereunder. Notwithstanding
the foregoing, however, neither releases or discharges the other from any
obligation or liability accruing prior to the date hereof. Master Landlord
accepts the payment of $34,973.00 in full settlement of any and all sums due
from the Sublandlord.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
effective the day and year first above written.
/s/ Recette Muller SHELDON REALTY d/b/a MURRAY M. SHELDON
- --------------------------------
Recette Muller
- --------------------------------
(Print Name) By: /s/ Murray M. Sheldon
-----------------------------------
/s/ Ann J. Robbins - UDEL Murray M. Sheldon
- -------------------------------- -----------------------------------
Ann J. Robbins - UDEL Name (Please Print)
- -------------------------------- Its: Owner
(Print Name) Date: April 21, 1993
/s/ Richard E. Day FIRST UNION NATIONAL BANK OF
- -------------------------------- FLORIDA
Richard E. Day
- --------------------------------
(Print Name)
/s/ Melissa Margolis By: /s/ [ILLEGIBLE]
- -------------------------------- [_________________________________]
Melissa Margolis Name (Please Print)
- -------------------------------- Its: SVP
(Print Name) Date: 4/26/93
<PAGE>
SUBLEASE
THIS SUBLEASE, dated this 26 day of April, 1993, between FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association, whose address for
purposes hereof is 214 Hogan Street, 6th Floor, Jacksonville, Florida 32202
("Sublandlord"), and SHOCHET SECURITIES, INC., a Florida corporation, whose
address for purposes hereof is 519 Arthur Godfrey Road, Miami Beach, Florida
("Subtenant").
W I T N E S S E T H:
Sublandlord is the tenant under that certain lease dated April 23, 1975
(the "Master Lease") between Emmanuel Green, as landlord and Mr. Chip's of 41st
Street, Inc., concerning space in a building located at 519 Arthur Godfrey Road,
Miami Beach, Dade County, Florida more particularly described in the lease (the
"Premises"). The interest of the landlord under the Master Lease was assigned by
successive assignments to Sheldon Realty d/b/a Murray M. Sheldon, and the
interest of the tenant under the Master Lease was assigned by successive
assignments to Sublandlord. Subtenant has requested that Sublandlord lease to it
the space covered by the Master Lease, and Sublandlord has agreed to do so on
the terms and conditions contained herein. Accordingly, Sublandlord leases to
Subtenant and Subtenant leases from Sublandlord the following described
Premises:
Space known as the Southeast Bank space, consisting of approximately 3,000
square feet, in a building (the "building"), located at 519 Arthur Godfrey Road,
Miami Beach, Florida subject always to the terms and conditions hereof, to wit:
1. Term. The Lease term shall be sixty (60) months commencing on May 1,
1993 (the "Commencement Date"). Sublandlord agrees to deliver the Premises to
Subtenant on the Commencement Date, subject to extension because of strike,
lockout, acts of God, unavailability of materials, weather, governmental
restrictions, enemy action, civil commotion, terrorism, fire and other casualty,
and other reasons beyond the control of Sublandlord (in which event the
commencement and termination dates shall be adjusted comparably). Subtenant's
taking possession of the Premises shall constitute Subtenant's acknowledgment
that the Premises have been properly prepared and are in satisfactory condition
except for items specifically enumerated in writing by Subtenant and agreed to
by Sublandlord. At the conclusion of the term Subtenant shall return the
Premises to Sublandlord broom-clean and in as good condition as when possession
was delivered to Subtenant, ordinary wear and tear excepted.
2. Use. The Premises shall be used for the rendering of brokerage,
investment, financial and related services, and for no other purpose. Subtenant
shall not use or permit the use of the Premises for any purpose when is illegal
or which creates a nuisance.
3. Rent.
(a) Subtenant agrees to pay to Sublandlord during the full term of
this Sublease the monthly base rent specified in the Rent Schedule attached
hereto as Exhibit "A", each payment of rent being due on the first day of
each calendar month, in advance. The first month's rent shall be due and
payable on the date of execution hereof. The monthly base rent shall be
adjusted from time to time as provided in the Rent Schedule. Base rent for
the first and last calendar months of the Lease Term shall
<PAGE>
be prorated on a daily basis as if each were a thirty day month.
(b) the rent due each month hereunder shall be increased on January 1
of each year by an amount equal to one-twelfth of increase, if any, in the
pro rata share of the ad valorem taxes allocable to the Premises over the
ad valorem taxes allocable to the Premises for the preceding year. The
first such adjustment shall be made on January 1, 1994, with the 1993 tax
year as the base year. A similar adjustment shall be made on January 1 of
each year thereafter so long as this Sublease is in effect.
(c) Subtenant shall pay all sales and use taxes levied or assessed
against the sums due hereunder as and when said taxes are due.
(d) If any payment due under this Sublease is not paid within seven
(7) days after its due date, Subtenant agrees to pay a late charge equal to
six percent of the amount of the then outstanding monthly rental payment
due Sublandlord and a similar charge on the first day of each succeeding
monthly imposed on each monthly amount that then remains unpaid (including
prior unpaid late charges).
4. Services. Subtenant acknowledges that any and all services supplied to
the Premises are supplied by the landlord under the Master Lease, and hereby
approves of and accepts the delivery of such services in their current form,
quantity and quality. Subtenant shall be responsible for and shall pay all costs
of all electrical, sewer and water utility services used by the Subtenant in the
Premises.
5. Graphics. Any and all exterior and interior signage shall be the
responsibility of the Subtenant and shall be installed upon the Premises only
following written approval of the landlord under the Master Lease and of the
Sublandlord, which approval by Sublandlord shall not be unreasonably withheld.
All signage shall comply with all laws, ordinances and rules applicable to the
same.
6. Care of the Premises. The Landlord under the Master Lease shall be
responsible for all repairs to the roof and the exterior walls of the Building,
and the exterior walls of the Premises. Subtenant shall maintain the Premises in
good repair and condition and shall not commit or permit any waste to the
Premises. Subtenant shall promptly repair any damage done to Premises and to the
Building, or any part thereof, including replacement of damaged portions or
items, caused by Subtenant or Subtenant's agents, employees, invitees, or
visitors. All such work or repairs by Subtenant shall be effected in compliance
with all applicable laws. If Subtenant fails to make such repairs or
replacements promptly, Sublandlord may, at its option and following ten (10)
days written notice from Sublandlord to Subtenant, make the repairs or
replacements, and Suntenant shall pay the cost thereof to the Sublandlord within
ten (10) days of Sublandlord's demand therefor. Subtenant shall not make or
allow to be made any alterations to the Premises, or install any vending
machines on the Premises, without the prior written consent of the landlord
under the Master Lease, and the Sublandlord, which consent of Sublandlord shall
not be unreasonably withheld. Any and all alterations to the Premises shall
become the property of Sublandlord upon termination of this Sublease (except for
movable equipment or furniture owned by Subtenant). Sublandlord may,
nonetheless, require Subtenant to remove any and all fixtures, equipment and
other improvements installed on the Premises. If Subtenant fails to do so,
Sublandlord may remove the same and Subtenant agrees to pay Sublandlord on
demand the cost of making repairs to the Premises caused by such removal. All
equipment, pipes, conduits, outlets, wires, ducts, vents and other things
supplying utility services to
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<PAGE>
the Premises which are located within the Premises shall be maintained at its
expense by the Subtenant in good condition and repair at all times. All of such
items located outside the Premises shall be maintained by the Sublandlord, at
its expense, in good condition and repair at all times.
7. Parking. Subtenant shall have the right to use those portions of the
designated parking areas serving the Building in common with other tenants to
whom similar rights are granted on a "first-come/first-served" basis.
8. Laws and Regulations. Subtenant agrees to comply with all applicable
laws, ordinances, rules and regulations of any governmental authority having
jurisdiction of the Premises or Subtenant's use thereof and the Building Rules
and Regulations attached hereto as Exhibit "B", and such other nondiscriminatory
rules as are published from time to time by Sublandlord for the operation of the
Building.
9. Entry by Sublandlord. Sublandlord may enter into and upon any part of
the Premises at all reasonable hours (and in emergencies at all times) to
inspect the condition, occupancy or use thereof, or to show the Premises to
prospective purchasers, mortgagees, tenants or insurers, or to clean or make
repairs, alterations or additions thereto, and Subtenant shall not be entitled
to any abatement or reduction of rent by reason thereof.
10. Assignment and Subletting. Subtenant shall not assign, sublease,
transfer, pledge, or encumber this Sublease or any interest therein without
Sublandlord's prior written consent. For purposes hereof the transfer of all or
a controlling interest in Subtenant shall be deemed an assignment of this lease.
Any attempted assignment, sublease or other transfer or encumbrance by Subtenant
in violation of the terms and covenants of this paragraph shall be void. Should
Subtenant desire to assign or sublet the Premises (or any portion thereof)
Subtenant shall notify Sublandlord in writing and furnish to Sublandlord the
name and address of the proposed assignee or subtenant together with a narrative
of the business in which the Subtenant is engaged, financial statements for the
immediate prior three (3) years and the proposed agreement of assignment or
sublease. Within fifteen (15) business days of the furnishing of such notice and
other items Sublandlord shall either (1) approve the request; (2) deny the
request, stating with such denial the reasons therefor; or (3) agree to sublet
the Premises (or portion thereof) from Subtenant for the balance of the term of
this Sublease, on the same terms and conditions as stated in the proposed
agreement of assignment or sublease, in which latter event Subtenant shall enter
into the said agreement with Sublandlord as provided in the proposed agreement
theretofore furnished to Sublandlord within thirty days thereafter. No
assignment or subletting shall relieve Subtenant of any obligation hereunder.
11. Mechanic's Liens. Subtenant will not permit any mechanic's liens to be
placed upon the Premises or the Building. In the event any such lien is claimed
against the Premises or Building because of work done for or materials furnished
to Subtenant, then Subtenant shall promptly cause same to be discharged. If
Subtenant fails to do so within ten (10) days after demand, then, in addition to
any other right or remedy of Sublandlord, Sublandlord may, discharge the same.
Any amount paid by Sublandlord for any of the aforesaid purposes and
Sublandlord's reasonable attorneys' fees shall be paid by Subtenant to
Sublandlord upon demand.
12. Indemnity; Insurance. Subtenant shall indemnify and hold Sublandlord
harmless for all damage to person and property occurring in, on or about the
Premises, and for the acts and omissions of Subtenant and/or its employees and
invitees whether in the Premises or not. Subtenant shall maintain a policy or
policies of comprehensive general liability insurance satisfactory
-3-
<PAGE>
in all respects to Sublandlord, and casualty and extended coverage insurance
insuring the full replacement value of all Subtenant's fixtures and personalty.
All policies shall name Sublandlord as an additional insured, with the premiums
thereon fully paid by Subtenant on or before their due date. The liability
insurance policy shall afford minimum protection of not less than $1,000,000
combined single limit coverage of bodily injury, property damage or combination
thereof. Prior to its occupancy of the Premises and from time to time thereafter
as requested by Sublandlord, Subtenant shall furnish to Sublandlord certificates
of the insurers providing the insurance required hereby certifying that such
coverages are in full force and effect and that all premiums therefor have been
paid.
13. Waiver of Subrogation. Sublandlord and Subtenant each hereby waives any
and all rights of recovery, claim, action, or cause of action, against the
other, its agents, officers, or employees, for any loss or damage that may occur
to the Premises or the Building or any personal property of such party therein,
by reason of fire, the elements, or any other cause(s) which are insured against
under the terms of insurance policies, regardless of cause or origin, including
negligence of the other party hereto, its agents, officers, or employees. This
waiver shall be applicable only if the same does not violate the terms of the
insurance policies carried by each which insure against such loss or damage.
Each party agrees to use its best efforts to obtain a waiver of subrogation
endorsement on its insurance policies provided the same can be obtained without
additional premium.
14. Casualty Damage. If the Premises or any part thereof is damaged by fire
or other casualty, Subtenant shall give prompt written notice thereof to
Sublandlord. If the building shall be so damaged that substantial alteration or
reconstruction of the Building shall, in Sublandlord's sole opinion, be required
(whether or not the Premises shall have been damaged by such casualty)or in the
event any mortgagee of Sublandlord should require that the insurance proceeds
payable as a result of a casualty be applied to the payment of the mortgage
debt, or in the event of any material uninsured loss to the Building,
Sublandlord may, at its option, terminate this Sublease by notifying Subtenant
in writing of such termination within ninety (90) days after the date of such
damage. In such event, Subtenant shall have ninety (90) days in which to vacate
the Premises following the notice of termination. If Sublandlord does not elect
to terminate this Sublease, Sublandlord shall commence and proceed with building
to substantially the same condition in which it was immediately prior to the
happening of the casualty. When the Building has been restored by Sublandlord,
Subtenant shall complete the restoration of the Premises and the replacement of
Subtenant's furniture and equipment. Sublandlord shall not be liable for any
inconvenience or annoyance to Subtenant or injury to the business of Subtenant
resulting in any way from such damage or the repair thereof, except that,
subject to the provisions of the next sentence, Sublandlord shall allow
Subtenant an abatement of base rent during the time the Premises are
untenantable. If the Premises or any other portion of the Building be damaged by
fire or other casualty resulting from the fault or negligence of Subtenant or
any of Subtenant's agents, employees, or invitees, the rent hereunder shall not
be diminished during the repair of such damage and Subtenant shall be liable to
Sublandlord for the cost of the repair and restoration of the Building caused
thereby to the extent such cost and expense is not covered by Sublandlord's
insurance proceeds.
15. Condemnation. If the whole or substantially the whole of the Building
or the Premises should be taken for any public or quasi-public use, by right of
eminent domain or otherwise, or if it should be sold in lieu of condemnation,
then this Sublease shall terminate as of the date when physical possession of
the Building or the Premises is taken by the condemning authority. If less than
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<PAGE>
the whole or substantially the whole of the Building or the Premises is thus
taken or sold, Sublandlord (whether or not the Premises are affected thereby)
may terminate this Sublease by giving written notice thereof to Subtenant; in
which event this Sublease shall terminate as of the date when physical
possession of such portion of the Building or Premises is taken by the
condemning authority. If this Sublease is not so terminated upon any such taking
or sale, the base rental payable hereunder shall be diminished by an amount
equal to the percentage of the Building or Premises taken by such condemnation,
and Sublandlord shall, to the extent Sublandlord deems feasible, restore the
Building and the Premises to substantially their former condition, but such work
shall not exceed the scope of the work done by Sublandlord in originally
constructing the Building, nor shall Sublandlord in any event be required to
spend for such work an amount in excess of the amount received by Sublandlord as
compensation for such damage. All amounts awarded upon a taking of any part or
all of the Building or the Premises shall belong to Sublandlord and Subtenant
shall not be entitled to and expressly waives any claim to such compensation.
Subtenant shall however be entitled to make a separate claim for its trade
fixtures, personalty and relocation expenses.
16. Damages From Certain Causes. Sublandlord shall not be liable to
Subtenant and Subtenant hereby releases Sublandlord of all liability for loss or
damage to any property or person occasioned by theft, fire, act of God, public
enemy, injunction, riot, strike, insurrection, war, court order, requisition, or
order of governmental body or authority or by any other cause beyond the control
of Sublandlord and from liability for water damage and similar consequential
damages to the Premises or to Subtenant's personalty from any cause whatsoever.
17. Default; Remedies.
(a) It shall be a default hereunder if (i) Subtenant shall fail to pay
any rent or any other sums of money within seven (7) days after the same is
due; (ii) Subtenant shall fail to comply with any provision of this
Sublease or any other agreement between Sublandlord and Subtenant; (iii)
the leasehold hereunder demised shall be taken on execution or other
process of law in any action against Subtenant; (iv) Subtenant shall fail
to promptly taken possession of and open for business in the Premises when
the Premises are delivered to it; (v) Subtenant shall become insolvent or
unable to pay its debts as they become due, or Subtenant notifies
Sublandlord that it anticipates either condition; (vi) Subtenant takes any
action to, or notifies Sublandlord that Subtenant intends to file a
petition under any section or chapter of the National Bankruptcy Act, as
amended, or under any similar law or statute of the United States or any
State thereof; or a petition shall be filed against Subtenant under any
such statute or Subtenant or any creditor of Subtenant notifies Sublandlord
that it knows such a petition will be filed or Subtenant notifies
Sublandlord that it expects such a petition to be filed; or (vii) a
receiver or trustee shall be appointed for Subtenant's leasehold interest
in the Premises or for all or a substantial part of the assets of
Subtenant.
(b) Upon the happening of any such events, Sublandlord may (i) cancel
and terminate this Sublease and dispossess Subtenant; (ii) declare all
amounts and rents due under this Sublease for the remainder of the existing
term to be immediately due and payable, and thereupon all rents and other
charges due hereunder to the end of the initial term or any renewal term,
if applicable, shall be accelerated (in which event
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<PAGE>
Subtenant shall be liable to Sublandlord in damages for the excess of the
amounts due hereunder over the fair rental value of the Premises over the
remaining term); (iii) enter and repossess the Premises and relet the
Premises for Subtenant's account, holding Subtenant liable in damages for
all expenses incurred in any such reletting and for any difference between
the amount of rent received from such reletting, and that due and payable
under the terms of this Sublease; or (iv) enter upon the Premises and do
whatever Subtenant is obligated to do under the terms of this Sublease (and
Subtenant agrees to reimburse Sublandlord on demand for any expenses which
Sublandlord may incur in effecting compliances with Subtenant's obligations
under this Sublease and Subtenant further agrees that Sublandlord shall not
be liable for any damages resulting to the Subtenant from such action).
(c) All such remedies of Sublandlord shall be cumulative, and in
addition, Sublandlord may pursue any other remedies that may be permitted
by law or in equity. Forbearance by Sublandlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed
or construed to constitute a waiver of such default.
(d) In the event of a default by the Sublandlord hereunder, the
Subtenant shall be entitled to all remedies provided by law including, but
not limited to, the right to seek money damages from the Sublandlord.
18. Peaceful Enjoyment. Subtenant shall, and may peacefully have, hold, and
enjoy the Premises against all persons claiming by through or under Sublandlord,
subject to the other terms hereof, provided that Subtenant pays the rent and
other sums herein required to be paid by Subtenant and performs all of
Subtenant's covenants and agreements herein contained.
19. Holding Over. In the event of holding over by Subtenant without
Sublandlord's written consent Subtenant shall pay rent equal to twice the
applicable base rent plus other sums due from time to time hereunder (including
Subtenant's proportionate share of Operating Expenses and Taxes). Possession by
Subtenant after the expiration of this Sublease shall not be construed to extend
its term. Subtenant shall be responsible for all damages suffered by Sublandlord
on account of any such holding over.
20. Subordination. This Sublease is and shall be subject and subordinate to
any mortgage, deed of trust or other lien created by Sublandlord, whether
presently existing or hereafter arising, upon the Premises, or upon the
building, and to any renewals, refinancing and extensions thereof, but Subtenant
agrees that any such mortgagee shall have the right at any time to subordinate
such mortgage, deed of trust or other lien to this Sublease on such terms and
subject to such conditions as such mortgagee may deem appropriate in its
discretion. Subtenant agrees that it will from time to time upon request by
Sublandlord execute and deliver to such persons as Sublandlord shall request a
statement in recordable form certifying that this Sublease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as so modified), stating the dates to which rent and other
charges payable under this Sublease have been paid, stating that Sublandlord is
not in default hereunder (or if Subtenant alleges a default stating the nature
of such alleged default) and further stating such other matters as Sublandlord
or its mortgagee shall reasonably require.
21. Attorney's Fees. Subtenant agrees that Subtenant will pay, in addition
to the rents and other sums agreed to be paid hereunder, all collection and
court costs incurred by Sublandlord
6
<PAGE>
and Sublandlord's reasonable attorneys' fees incurred for the enforcement of
Sublandlord's rights under this Sublease. If suit be brought the prevailing
party shall be entitled to recover from the other the prevailing party's costs,
including reasonable attorney's fees, whether such fees and costs be incurred at
trial, on appeal, in bankruptcy proceedings or otherwise.
22. No Implied Waiver. The failure of Sublandlord to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in this Sublease shall not be construed
as a waiver or a relinquishment thereof for the future. No payment by Subtenant
or receipt by Sublandlord of a lesser amount than the monthly installment of
rent due under this Sublease shall be deemed to be other than on account of the
earliest rent due hereunder, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Sublandlord may accept such check or payment without prejudice
to Sublandlord's right to recover the balance of such rent or pursue any other
remedy in this Sublease provided.
23. Security Deposit. Subtenant has deposited with Sublandlord the sum
specified as a Security Deposit in the Rent Schedule, which sum shall be
retained by Sublandlord without interest as security for Subtenant's faithful
performance of this Sublease. Sublandlord may commingle the security deposit
with Sublandlord's other funds and Sublandlord may, from time to time, without
prejudice to any other remedy, use the security deposit to the extent necessary
to make good any arrearages of rent or to satisfy any other covenant or
obligation of Subtenant hereunder. Following any such application of the
security deposit, Subtenant shall pay to Sublandlord on demand the amount so
applied in order to restore the security deposit to its original amount. If
Subtenant is not in default at the termination of this Sublease, the balance of
the security deposit remaining after any such applications shall be returned by
Sublandlord to Subtenant. If Sublandlord transfers its interest in the Premises
during the term of this Sublease, Sublandlord may assign the security deposit to
the transferee and thereafter Sublandlord shall have no further liability for
the return of such Security Deposit.
24. Notice. All notices shall be in writing, and shall be given by
depositing the same in the United States mail, postpaid and certified and
addressed to the party to be notified, with return receipt requested, or by
delivering the same in person to an officer of such party, or by prepaid
telegram, when appropriate, addressed to the party to be notified at the address
stated in this Sublease or such other address, notice of which has been given to
the other party. Alternatively, notice to Subtenant may be effectuated by mail
or delivery to the Premises. Notice shall be deemed to be given on the earlier
of its delivery or the expiration of three (3) days after it is deposited in the
mail in the manner described above.
25. Severability. If any term or provision of this Sublease, or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Sublease, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Sublease shall be valid and enforced to the fullest
extent permitted by law.
26. Time of Performance, except as expressly otherwise herein provided,
with respect to all required acts of Subtenant, time is of the essence of this
Sublease.
27. Commissions. Sublandlord represents that it has not dealt with any real
estate broker or salesman in connection with this Sublease except C.B.
Commercial Real Estate Group, Inc., whose
-7-
<PAGE>
commission shall be paid by Sublandlord ("Broker"). Subtenant has dealt with no
other person or entity under circumstances which would create any liability for
the payment of a commission by the Sublandlord, and if any other person claims a
commission, Subtenant shall indemnify and hold Sublandlord harmless from
liability therefor, including without limitation, the costs of defense of such
claim and the fees and costs of the Sublandlord's attorney.
28. Exhibits. Exhibits "A" and "B" are attached hereto and incorporated
herein.
29. Compliance with Master Lease. Sublandlord shall comply with all of the
terms and covenants of the Master Lease. The occurrence of a default under the
Master Lease which is not promptly and fully cured by the Sublandlord shall
constitute a default under this Sublease. In such event, the Subtenant shall be
entitled to cure the default under the Master Lease on behalf of the
Sublandlord, and to offset the cost thereof against the rent due under this
Sublease.
30. Alterations to Leased Premises. Subtenant may make non-structural
modifications and alterations to the interior of the Leased Premises at its own
expense, and may make non-structural alterations or modifications to the
exterior of the Leased Premises with prior written consent of the Sublandlord,
so long as any such alterations or modifications are permitted under the Master
Lease. Sublandlord's consent to any requested modifications or alterations to
the exterior of the Leased Premises shall not be unreasonably withheld.
Sublandlord will cooperate with and assist the Subtenant in making application
for any necessary permits to the City of Miami Beach, but shall not be obligated
to expend any time or money in doing so.
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this Sublease
in multiple original counterparts as of the day and year first above written.
Witnesses:
FIRST UNION NATIONAL BANK OF
FLORIDA
/s/ Richard Day
- -----------------------------------
Richard Day
- ----------------------------------- By: /s/ [ILLEGIBLE]
Name (Please Print) [__________________________]
Name (Please Print)
Its: SVP
/s/ Melissa Margolis
- ----------------------------------- "Sublandlord"
Melissa Margolis
- -----------------------------------
Name (Please Print)
As to Sublandlord
SCHOCHET SECURITIES, INC., a
Florida corporation
- -----------------------------------
[_________________________________]
Name (Please Print)
By: /s/ L. Donald Yarkin
--------------------------------
L. Donald Yarkin
Its President
- -----------------------------------
[_________________________________]
Name (Please Print) "Subtenant"
As to Subtenant
-8-
<PAGE>
EXHIBIT "B"
Building Rules and Regulations
Subtenant's use of the Building and Premises shall be governed by the
following rules, which Sublandlord shall enforce on a uniform basis. Sublandlord
reserves the right to unilaterally amend or add to the rules, and such
amendments and additions shall be effective when notice of the same is given to
Subtenant in the manner provided in the Lease.
1. Except as otherwise provided in the Sublease, nothing shall be
displayed, painted or affixed by Subtenant on any part of the exterior or
interior of the Building (except within the Premises) without the prior consent
of Sublandlord, and then only of such color, size, style and material as shall
be approved by Sublandlord. Nothing shall be placed in the Premises which may be
visible from the exterior of the Building (including window treatments) without
the prior written consent of Sublandlord.
2. No additional or replacement locks shall be placed on any door of the
Premises and Subtenant shall not permit duplicate keys to be made. Additional
keys shall be procured from Sublandlord and paid for by Subtenant. Subtenant
shall be solely responsible for the security of keys to the Premises. All keys
furnished to subtenant shall be surrendered to Sublandlord at the termination of
the Term.
3. If Subtenant desires additional wiring connections, Sublandlord shall
direct the electricians as to where the wires are to be introduced and without
such directions no boring or cutting for wiring shall be permitted.
4. Subtenant shall not install or operate any steam or internal combustion
engine, boiler, machinery, refrigerating or heat generating device or air
conditioning apparatus or kitchen equipment in or about the Premises or carry on
any mechanical business therein. Subtenant shall not install any vending
machines other than for use by its employees.
5. The common areas of the Building shall not be obstructed by Subtenant or
used in any way except for ingress and egress to and from the offices. Subtenant
shall place no objects outside its premises.
6. The bathroom fixtures shall not be used for purposes other than those
for which they were constructed. The cost of repairing any damage caused by
Subtenant resulting from misuse of such fixtures shall be borne by Subtenant.
7. Subtenant shall not permit littering of the common areas of the
Building.
8. Subtenant shall not make any noises, cause disturbances or vibrations or
use of any electrical or electronic devices or other devices that emit sound or
other waves or disturbances or create odors, any of which may be offensive to
other tenants of the Building or which would interfere with the operation of any
device or equipment or radio or television broadcasting or reception from or
within the Building or elsewhere, and shall not place or install any musical
instrument or equipment or ior approval of Sublandlord. The use thereof, if
permitted, shall be subject to the control of Sublandlord to the end that others
shall not be disturbed or annoyed.
9. Subtenant shall not waste utility services and shall cooperate fully
with Sublandlord to assure the most effective operation of the Building's HVAC
system and shall not adjust any controls other than thermostats installed for
Subtenant's use. Subtenant shall keep corridor door(s) closed.
<PAGE>
EXHIBIT "A"
Rent Schedule
A. The rent due for the first three months of the initial lease term shall
be abated and shall not be paid by the Subtenant to the Sublandlord. The payment
of rent shall commence on August 1, 1993 and continue throughout the initial
lease term and all renewals. The monthly base rent payable in advance on the
first day of each month during the term hereof is:
1. For the nine months commencing August 1, 1993 and ending on the
last day of April, 1994, the sum of $3,833.33 per month.
2. For each of the next succeeding twelve months, commencing with the
payment due May 1, 1994, the sum of $4,000.00 per month.
3. For each of the next succeeding twelve months, commencing with the
payment due May 1, 1995, the sum of $4,250.00 per month.
4. For each of the next succeeding twelve months, commencing with the
payment due May 1, 1996, the sum of $4,750.00 per month.
5. For each of the next succeeding twelve months, commencing with the
payment due May 1,1 997, the sum of $5,000.00.
B. In addition to the foregoing payments of rent, Subtenant shall pay to
Sublandlord the applicable Florida sales tax due thereon.
C. The security deposit required by paragraph 24 of the Sublease is
$7,250.00, + $4,750 carry over from prior lease at 523 A.G.R.
<PAGE>
10. Subtenant assumes full responsibility for protecting its space from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secure.
11. No animals, birds, bicycles or other vehicles shall be allowed in any
part of the Building without the prior consent of Sublandlord.
12. Any person or persons (other than the janitor of Sublandlord) who shall
be employed for the purpose of cleaning or maintaining the Premises shall be
employed at Subtenant's cost, subject to the terms of the Lease, and Sublandlord
shall in no way be responsible for any loss of property on or from the Premises,
however occurring, by a janitor. Subtenant shall report any deficiency in the
services provided by Sublandlord or its agent.
13. Subtenant shall not accumulate or store on the Premises any waste
paper, discarded records, books, paper files, sweepings, rags, rubbish or other
combustible matter.
14. Subtenant shall not make any room to room canvass to solicit business
from other tenants in the Building and shall not exhibit, sell or offer to sell,
use, rent or exchange any item or service in or from the Premises unless within
the Permitted Use.
15. Sublandlord reserves the right to exclude from the Building all
disorderly persons, persons under the influence of alcohol or controlled
substances, idlers and peddlers, solicitors, and persons entering in crowds or
in such unusual numbers as to cause inconvenience to the tenants of the
Building.
16. Any parking spaces included in the Lease shall be used only for the
personal automobiles of Subtenant and its employees and guests (no trucks, motor
homes and the like), Sublandlord reserves the right to designate locations for
one or more of such parking spaces. Upon Sublandlord's request, Subtenant
promptly shall furnish Sublandlord and the names, vehicle descriptions and
vehicle license numbers of each authorized user of Subtenant's parking spaces.
Subtenant shall be liable for all costs and expenses suffered or incurred by
Sublandlord in the towing of illegally parked vehicles of Subtenant, its
employees or guests.
17. Subtenant shall comply with all conditions of the Lease in connection
with its use and occupancy of the Premises.
18. All deliveries to the Premises shall be subject to the reasonable
control of Sublandlord as to place and time.
<PAGE>
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 26th day of April,
1993, by Neil C. King, as SVP of First Union National Bank of Florida, a
national banking association, on behalf of the association. He/she is personally
known to me.
/s/ Gail Olsen
----------------------------------
Gail Olsen (Print Name)
----------------------------------
Notary Public, State of Florida
My Commission expires:
#067593
GAIL M. OLSEN, NOTARY PUBLIC
STATE OF FLORIDA
MY COMMISSION EXPIRES 11/29/94
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing instrument was acknowledged before me this ____ day of 30
March, 1993, by L. Donald Yarkin, as President of Shochet Securities, Inc., a
Florida corporation, on behalf of the corporation. He is personally known to me
or has produced Driv. Lic. as identification and did (did not) take an oath.
/s/ Lynn Herman
----------------------------------
Lynn Herman (Print Name)
----------------------------------
Notary Public, State of Florida
My Commission expires:
NOTARY PUBLIC STATE OF FLORIDA
MY COMMISSION EXP. DEC. 11, 1994
BONDED THRU GENERAL INS. UND.
JOINDER AND CONSENT
The undersigned, SHELDON REALTY, d/b/a MURRAY M. SHELDON, as landlord under
the Master Lease (as defined in the foregoing Sublease) consents to the
subletting of the Premises pursuant to the Sublease, and agrees that in all
instances under the Master Lease in which the right of consent or approval is
reserved unto the undersigned, it will not unreasonably withhold such consent or
approval. The undersigned acknowledges that the Sublandlord's term under the
Master Lease expires at midnight on January 14, 1996 and that the Sublandlord
may elect to permit the Master Lease to terminate rather than to exercise its
right to renew for an additional term. Should the Sublandlord elect to permit
the Master Lease to expire in 1996, and the Sublease is then in effect, and so
long as no default exists under the Master Lease or under the Sublease, the
undersigned agrees that is will recognize the Sublease and the Ssubtenant
thereunder as fully and completely as if the undersigned were the Sublandlord
thereunder, and will at that time ratify and affirm the covenants of
non-disturbance and peaceful and quiet enjoyment contained therein. Should there
be a default under the Master Lease, the undersigned agrees to give written
notice to the Subtenant of such default within twenty (20) days of the
Sublandlord's failure to cure the same, and to permit the Subtenant an
opportunity to cure such default swithin twenty (20) days following notice
threof. Should the Subtenant cure the default within the time provided, the
undersigned shall terminate the Master Lease and recognize the Sublease and the
Subtenant thereunder as fully and completely as if the undersigned were the
Sublandlord thereunder, and will at that time ratify and affirm the covenants of
non-disturbance and peaceful and quiet enjoyment contained therein.
DATED the 23 day of March, 1993.
SHELDON REALTY, d/b/a MURRAY M.
SHELDON
By: /s/ Murray M. Sheldon
--------------------------------
Its owner
-9-
<PAGE>
EXHIBIT "B"
Building Rules and Regulations
Subtenant's use of the Building and Premises shall be governed by the
following rules, which Sublandlord shall enforce on a uniform basis. Sublandlord
reserves the right to unilaterally amend or add to the rules, and such
amendments and additions shall be effective when notice of the same is given to
Subtenant in the manner provided in the Lease.
1. Except as otherwise provided in the Sublease, nothing shall be
displayed, painted or affixed by Subtenant on any part of the exterior or
interior of the Building (except within the Premises) without the prior consent
of Sublandlord, and then only of such color, size, style and material as shall
be approved by Sublandlord. Nothing shall be placed in the Premises which may be
visible from the exterior of the Building (including window treatments) without
the prior written consent of Sublandlord.
2. No additional or replacement locks shall be placed on any door of the
Premises and Subtenant shall not permit duplicate keys to be made. Additional
keys shall be procured from Sublandlord and paid for by Subtenant. Subtenant
shall be solely responsible for the security of keys to the Premises. All keys
furnished to Subtenant shall be surrendered to Sublandlord at the termination of
the Term.
3. If Subtenant desires additional wiring connections, Sublandlord shall
direct the electricians as to where the wires are to be introduced and without
such directions no boring or cutting for wiring shall be permitted.
4. Subtenant shall not install or operate any steam or internal combustion
engine, boiler, machinery, refrigerating or heat generating device or air
conditioning apparatus or kitchen equipment in or about the Premises or carry on
any mechanical business therein. Subtenant shall not install any vending
machines other than for use by its employees.
5. The common areas of the Building shall not be obstructed by Subtenant or
used in any way except for ingress and egress to and from the offices. Subtenant
shall place no objects outside its premises.
6. The bathroom fixtures shall not be used for purposes other than those
for which they were constructed. The cost of repairing any damage caused by
Subtenant resulting from misuse of such fixtures shall be borne by Subtenant.
7. Subtenant shall not permit littering of the common areas of the
Building.
8. Subtenant shall not make noises, cause disturbances or vibrations or use
any electrical or electronic devices or other devices that emit sound or other
waves or disturbances or create odors, any of which may be offensive to other
tenants of the Building or which would interfere with the operation of any
device or equipment or radio or television broadcasting or reception from or
within the Building or elsewhere, and shall not place or install any musical
instrument or equipment or any similar device inside or outside the Premises
without the prior approval of Sublandlord. The use thereof, if permitted, shall
be subject to the control of Sublandlord to the end that others shall not be
disturbed or annoyed.
9. Subtenant shall not waste utility services and shall cooperate fully
with Sublandlord to assure the most cost effective operation of the Building's
HVAC system and shall not adjust any controls other than thermostats installed
for Subtenant's use. Subtenant shall keep corridor door(s) closed.
<PAGE>
10. Subtenant assumes full responsibility for protecting its space from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secure.
11. No animals, birds, bicycles or other vehicles shall be allowed in any
part of the Building without the prior consent of Sublandlord.
12. Any person or persons (other than the janitor of Sublandlord) who shall
be employed at Subtenant's cost, subject to the terms of the Lease, and
Sublandlord shall in no way be responsible for any loss of property on or from
the Premises, however occurring, by a janitor. Subtenant shall report any
deficiency in the services provided by Sublandlord or its agent.
13. Subtenant shall not accumulate or store on the Premises any waste
paper, discarded records, books, paper files, sweepings, rags, rubbish or other
combustible matter.
14. Subtenant shall not make any room t0 room canvass to solicit business
from other tenants in the Building and shall not exhibit, sell or offer to sell,
use, rent or exchange any item or service in or from the Premises unless within
the Permitted Use.
15. Sublandlord reserves the right to exclude from the Building all
disorderly persons, persons under the influence of alcohol or controlled
substances, idlers and peddlers, solicitors, and persons entering in crowds or
in such unusual numbers as to cause inconvenience to the tenants of the
Building.
16. Any parking spaces included in the Lease shall be used only for the
personal automobiles of Subtenant and its employees and guests (no trucks, motor
homes and the like). Sublandlord reserves the right to designate locations for
one or more of such parking spaces. Upon Sublandlord's request, Subtenant
promptly shall furnish Sublandlord the names, vehicle descriptions and vehicle
license numbers of each authorized user of Subtenant's parking spaces. Subtenant
shall be liable for all costs and expenses suffered or incurred by Sublandlord
in the towing of illegally parked vehicles of Subtenant, its employees or
guests.
17. Subtenant shall comply with all conditions of the Lease in connection
with its use and occupancy of the Premises.
18. All deliveries to the Premises shall be subject to the reasonable
control of Sublandlord as to place and time.
Exhibit 10.8
- --------------------------------------------------------------------------------
SHOPPING CENTER LEASE AGREEMENT
Between
GATOR DADELAND PARTNERS, LTD.,
------------------------------
as Landlord
and
SHOCHET SECURITIES, INC.,
------------------------------
as Tenant
for premises located at
DADELAND PLAZA SHOPPING CENTER
---------------
DADE County
---------------
MIAMI FLORIDA
---------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX
Page
----
ARTICLE I FUNDAMAENTAL LEASE PROVISIONS 1
ARTICLE II DEFINITIONS 2
2.01 Additional Rent 2
2.02 Alterations 2
2.03 Architect 2
2.04 Business Tax 2
2.05 Commencement Date 3
2.06 Common Areas 3
2.07 Consumer Price Index 3
2.08 CPI Percentage Increase 3
2.09 Expiration Date 3
2.10 First Partial Month 3
2.11 Fixturing Period 3
2.12 Force Majeure 3
2.13 Fundamental Lease Provisions 3
2.14 Gross Rentable Area of the Premises 3
2.15 Gross Rentable Area of the Shopping Center 4
2.16 Gross Revenue 4
2.17 Guarantor 4
2.18 Land 4
2.19 Landlord 4
2.20 Landlord's Agent s 4
2.21 Landlord's Work 4
2.22 Laws 4
2.23 Lease 5
2.24 Lease Year 4
2.25 Leasehold Improvements 5
2.26 Major Store 5
2.27 Minimum Rent 5
2.28 Mortgage 5
2.29 Mortgagee 5
2.30 Opening Date 5
2.31 Percentage Rent 5
2.32 Percentage Rent Period 5
2.33 Percentage Rent Rate 5
2.34 Person 5
2.35 Premises 5
2.36 Proportionate Share 5
2.37 Rent 6
2.38 Rules and Regulations 6
2.39 Shopping Center 6
2.40 Taxes 6
2.41 Tenant 6
2.42 Tenant's Agents 6
2.43 Tenant's Work 6
2.44 Term 6
2.45 Trade Fixtures
2.46 Transfer 6
2.47 Transferee 7
ARTICLE III PREMISES 7
3.01 Grant and Premises 7
3.02 Acceptance of Premises 7
3.03 Construction of Premises 7
3.04 Fixturing Period 8
ARTICLE IV TERM 8
4.01 Term 8
4.02 Opening Date 8
4.03 Initial Deposit 8
(i)
<PAGE>
Page
----
ARTICLE V RENT 8
5.01 Covenant to Pay 8
5.02 Minimum Rent and CPI Percentage Increase 9
5.03 Payment of Business Taxes 9
5.04 Payment of Operating Costs 9
5.05 Percentage Rent 10
5.06 Rent Past Due 11
5.07 Security Deposit 11
5.08 Net Lease 11
5.09 No Abatement of Rent 11
ARTICLE VI COMMON AREAS AND OPERATING COSTS 11
6.01 Designation 11
6.02 Rules and Regulations 11
6.03 Employee Parking 12
6.04 Operating Costs Defined 12
ARTICLE VII USE OF PREMISES 13
7.01 Permitted Use and Business Name 13
7.02 Hours of Business 13
7.03 Opening, Continuous Occupancy and Inventory 13
7.04 Tenant's Covenants as to Use and Occupancy 14
7.05 Microwave Transmission 15
7.06 Promotion of Name 15
7.07 Display Windows 15
7.08 Compliance with Laws 15
7.09 Advertising, Trade Names and Restricted Marks 15
7.10 Signs 15
7.11 Prohibited Uses 16
7.12 Hazardous Waste 16
ARTICLE VIII ACCESS AND ENTRY 17
8.01 Right of Access 17
8.02 Right to Show Premises 17
8.03 Entry not Forfeiture 17
ARTICLE IX MAINTENANCE, REPAIRS AND ALTERATIONS 17
9.01 Maintenance and Repairs by Landlord 17
9.02 Maintenance and Repairs by Tenant 17
9.03 Approvals of Tenant's Alterations 18
9.04 Repairs Where Tenant at Fault 18
9.05 Removal of Improvement and Fixtures 18
9.06 Liens 18
9.07 Notice by Tenant 19
ARTICLE X UTILITIES/HVAC 19
10.01 Utilities 19
10.02 Heating, Ventilating and Air Conditioning 19
ARTICLE XI INSURANCE AND INDEMNITY 20
11.01 Tenant's Insurance 20
11.02 Increase in Insurance Premiums 21
11.03 Cancellation of Insurance 21
11.04 Loss or Damage 21
11.05 Landlord's Insurance 22
11.06 Indemnification of Landlord 22
ARTICLE XII DAMAGE AND DESTRUCTION 22
12.01 Rent Abatement 22
12.02 Damage of Premises 22
12.03 Termination for Damages to Premises 23
12.04 Destruction of Shopping Center 23
12.05 Architect's Certificate 23
(ii)
<PAGE>
Page
----
ARTICLE XIII ASSIGNMENT, SUBLETTING AND TRANSFERS 24
13.01 Assignments, Subleases and Transfers 24
13.02 Landlord's Right to Terminate 24
13.03 Conditions of Transfer 25
13.04 Change of Control 26
13.05 No Advertisement 26
13.06 Assignment by Landlord 26
ARTICLE XIV DEFAULT 26
14.01 Defaults 26
14.02 Remedies 27
14.03 Costs 27
14.04 Allocation of Payments 27
ARTICLE XV ATTORNMENT AND SUBORDINATION 27
15.01 Estoppel Certificate 27
15.02 Subordination 28
15.03 Attornment 28
ARTICLE XVI CONTROL OF SHOPPING CENTER BY LANDLORD 29
16.01 Use and Maintenance of Common Areas 29
16.02 Alterations by Landlord 29
16.03 Tenant Relocation 29
16.04 Competition 30
16.05 Landlord Services 30
16.06 Tenant Removal 30
ARTICLE XVIII PROMOTION OF THE SHOPPING CENTER 30
17.01 Promotional Fund 30
17.02 Grand Opening Charge 31
17.03 Special Advertising 31
17.04 Landlord's Contribution 31
ARTICLE XVIII CONDEMNATION 31
18.01 Total Taking 31
18.02 Partial Taking 31
18.03 Award 31
ARTICLE XIX GENERAL PROVISIONS 32
19.01 Quiet Enjoyment 32
19.02 Holding Over 32
19.03 Waiver 33
19.04 Recording 33
19.05 Notices 33
19.06 Liability of Landlord 33
19.07 Waiver of Jury Trial 33
19.08 Radon Gas 33
19.09 Successors 34
19.10 Joint and Several Liability 34
19.11 Captions and Section Numbers 34
19.12 Extended Meanings 34
19.13 Partial Invalidity 34
19.14 Entire Agreement 34
19.15 Governing Law 34
19.16 Time 34
19.17 No Partnership 34
19.18 Accord and Satisfaction 34
19.19 Counterparts 34
SCHEDULES
A - Site Plan on Premises
B - Legal Description of Shopping Center and Land
C - Landlord's and Tenant's Work
D - Rules and Regulations
E - Commencement Agreement
(iii)
<PAGE>
SHOPPING CENTER LEASE AGREEMENT
THIS SHOPPING CENTER LEASE AGREEMENT ("Lease") is made between GATOR
DADELAND PARTNERS LTD. (hereinafter referred to as "Landlord") and SHOPPING
SECURITIES INC. (hereinafter referred to as "Tenant"). Certain capitalized words
used herein are defined terms and have meanings as defined in this Lease.
ARTICLE I
FUNDAMENTAL LEASE PROVISIONS
The following is a summary of basic lease provisions with respect to the
Lease. All of the terms contained in this Article I are an integral part of the
Lease and terms defined or dollar amounts specified hereon shall have the
meanings or amounts set forth hereon, unless other meanings are expressly set
forth or expanded upon in the text of this Lease or the Schedules attached
hereto. The section references following some of the headings refer to sections
of the Lease where additional provisions appear.
A. DATE OF LEASE EXECUTION: November , 1993
B. LANDLORD: Gator Dadeland Partners, Ltd.
C. LANDLORD'S ADDRESS: 2250 NE 163 Street #6
N Miami Beach FL 33160
D. TENANT: Shochet Securities, Inc.
E. TENANT'S ADDRESS: Dadeland Plaza
S. Dixie Highway
Miami, FL 33156
(Former Sports Physical Therapists Store)
F. NAME OF TENANT'S BUSINESS: Shochet Securities, Inc.
G. GUARANTOR:
H. GUARANTOR'S ADDRESS: 1484 E. Hallandale Beach Blvd.
Hallandale, FL 33009
I. PREMISES (SECTION 3.01): Store #27-29
(Former Sports Physical Therapists Store)
J. GROSS RENTABLE AREA OF PREMISES
(SECTION 3.01): Approximately 3,155 square feet
K. PERMITTED USE OF PREMISES:
(SECTION 7.01): The operation of a full service discount
brokerage firm dealing with the sales
and servicing of stocks, bonds and
securities.
<PAGE>
L. TERM OF LEASE (SECTION 4.01): 5 Years, Commencing
December 1, 1993
(if determined on execution date)
Ending November 30, 1998
(if determined on execution date)
M. INITIAL MINIMUM RENT (SECTION 5.02): Per Square Foot: $15.00
Annual: $47,325.00
Monthly: $3,943.75
Term Aggregate: $
N. INITIAL OPERATING COSTS
(SECTION 5.04): $5.00 Per Square Foot
O. SECURITY DEPOSIT (SECTION 5.07): $10,516.66
P. PERCENTAGE RENT (SECTION 5.05): Percentage Rent Date: N/A %
Percentage Rent Period: a calendar
month period
Q. INITIAL DEPOSIT (SECTION 4.03): $ None
R. CPI RENT (SECTION 5.02): The increase in Minimum Rent every year
based on the "CPI Percentage Increase"
in the "Consumer Price Index," as such
terms are defined in Article II hereof.
In any given lease year the base minimum
rent shall not increase by more than 5%
or less than 2% per year.
S. MONTHLY PROMOTIONAL CHARGE
(SECTION 17.01): $ N/A
T. GRAND OPENING CHARGE (SECTION
17.02) $ N/A
U. FIXTURING PERIOD
(SECTION 3.04): Tenant shall have 90 days from lease
commencement in buildout the lease
premises. Base minimum rent shall be
abated during this 90 day period.
Section 5.04 Operating Cost shall not be
abated during this 90 day period.
V. OTHER: Landlord to deliver electric and
plumbing in good repaid and condition.
Otherwise, Tenant accepts the premises
in "As Is" condition. Tenant shall only
be responsible for operating expenses
during the 90 days if open for business.
ARTICLE II
DEFINITIONS
In this Lease, Schedules to this Lease, and any riders, addenda or
modifications hereto, the following terms shall have the meanings herein set
forth:
Section 2.01 "Additional Rent" means all sums of money required to be paid
by Tenant under this Lease (except Minimum Rent and Percentage Rent), whether or
not the same are designated "Additional Rent" or are payable to Landlord or
otherwise.
Section 2.02 "Alterations" means all repairs, replacements, additions or
modifications to the Premises by Tenant set forth in Section 9.03 and elsewhere
in this Lease, including, but not limited to, "Tenant's Work," described in
Section 3.03 hereof.
Section 2.03 "Architect" means the architect from time to time named by
Landlord.
Section 2.04 "Business Tax" means all taxes (whether imposed on Landlord or
Tenant) attributable to the personal property, trade fixtures, business, income,
occupancy or sales of Tenant, or any other occupant of the Premises, and to the
use of the Shopping Center or the "Land" (hereinafter defined) by Tenant.
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Section 2.05 "Commencement Date" means the date on which the Term
commences, as provided under Section 4.01 hereof.
Section 2.06 "Common Areas" means those areas, facilities, utilities,
improvements, equipment and installations in or adjacent to the Shopping Center
which serve or are employed for the mutual convenience, use or benefit of more
than one tenant or occupant of the Shopping Center, including their respective
agents, employees, customers and invitees, in common with others entitled to the
use or benefit of same, and which are not from time to time designated or
intended by Landlord to be leased. The Common Areas of the Shopping Center shall
include, without limitation, all parking areas, landscaped areas, walkways,
corridors, alleyways, common restrooms, elevators, escalators, stairways,
lobbies, loading docks, and all other areas and improvements which may be
provided by Landlord for the convenience and use of the tenants and occupants of
the Shopping Center, including their respective agents, employees, customers and
invitees, which are not from time to time designated or intended by Landlord to
be leased; provided however, Landlord reserves the right hereunder to
specifically designate any of said Common Areas for the limited use of a
particular tenant or tenants to the exclusions of all others.
Section 2.07 "Consumer Price Index" means the Consumer Price Index - for
all Urban Consumers, U.S. City Average, All Items (1982-1984 = 100), issued and
published by the Bureau of Labor Statistics of the United States Department of
Labor (hereinafter called the "CPI"). In the event that the CPI becomes
unavailable, a reasonable successor or substitute index prepared by the U.S.
Department of Labor or other source as selected by Landlord shall be used and
considered as the CPI hereunder for all purposes. The application of the CPI is
more fully set forth in Section 5.02 of this Lease.
Section 2.08 "CPI Percentage Increase" means the product of (i) a fraction,
the numerator of which is the CPI for January for the year following the year in
which the Commencement Date occurred, and for each annual adjustment thereafter,
equal to the C.P.I. for each successive January during the balance of the "Term"
(as hereinafter defined), as applicable, and the denominator of which is the CPI
for the month in which the Commencement Date occurred, times (ii) the Minimum
Rent for the initial "Lease Year" (as hereinafter defined). The application of
this Section 2.08 is more fully described in Section 5.02 of this Lease.
Section 2.09 "Expiration Date" means the date on which the Term expires, as
provided in Article I, Paragraph I. of this Lease, or any sooner date on which
this Lease is terminated pursuant to the provisions hereof.
Section 2.10 "First Partial Month" means, in the event the Commencement
Date is not the first day of the month, the period from the Commencement Date to
the first day of the next month.
Section 2.11 "Fixturing Period" means the period set forth in Article I,
Section U hereof, as more fully described in Section 3.04 of this Lease.
Section 2.12 "Force Majeure" means any period of delay in which arises from
or through any causes beyond the reasonable control of a party, including,
without limitation, an Act of God, strike, lockout or labor difficulty,
explosion, sabotage, riot or civil commotion, act of war, fire or other
casualty, or moratorium.
Section 2.13 "Fundamental Lease Provisions" means the outline of basic
terms, dollar amounts, and other information forming a part of this Lease, as
more particularly set forth in Article I hereof.
Section 2.14 "Gross Rentable Area of the Premises" means the number of
square feet or space in the Premises, and shall be calculated by the Architect
to extend to the centerline of the structural portion of every wall or division
separating the Premises from rented or rentable space to the exterior face of
any other wall or division marking the boundaries of the Premises, except in the
case of any storefront, which shall be measured to the lease lines shown on the
sketch of the Premises contained within the site plan attached hereto as
Schedule "A". If Tenant constructs a mezzanine in the
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Premises, as approved by Landlord, the square footage of such mezzanine shall
not be included in the computation of Gross Rentable Area of the Premises and
neither the Minimum Rent nor any other charges based upon Gross Rentable Area of
the Premises shall be increased due to such mezzanine. The vertical boundaries
of the Premises shall extend from the top surface of the structural subfloor to
the bottom of the structural ceiling, and shall include all interior space,
whether or not occupied by interior projections, stairways, escalators,
elevators, mezzanines, lofts, shafts, ventilation spaces, columns, pipes,
conduits or the like, and other physical features.
Section 2.15 "Gross Rentable Area of the Shopping Center" means the sum of
aggregate gross rentable areas of all portions of the Shopping Center which are
leased or designated for lease, excluding all "Major Stores" (hereinafter
defined), if any, with the area for all such portions to be calculated on a
similar basis as the Gross Rentable Area of the Premises was calculated.
Section 2.16 "Gross Revenue" means the total dollars derived, whether for
cash or otherwise, of all sales (including rentals) of merchandise and services
and all other receipts whatsoever (including gift and merchandise certificates)
in respect of all business conducted at, in, upon or from the Premises, although
orders for same may be filled elsewhere, including, without limitation, (a) all
sales by any sublessee, concessionaire, licensee, vending machine, coin operated
machine or otherwise in the Premises, (b) all insurance proceeds received in
respect of loss or damage to stock and compensation for loss of business, sales
or profits, (C) all allowances, bonuses, stipends, or other payments to Tenant
made by any of its suppliers, merchandisers, vendors, or wholesalers; and (d)
any other income earned by Tenant as promotional considerations, marketing
incentives, or otherwise. Gross Revenue shall not include, however, (i) any sums
(other than any commission or service fee to Tenant) shown separately from the
price, collected and paid out for any sales, service or similar tax, levied by
any governmental authority which Tenant is required to remit to such authority,
(ii) the exchange of goods or merchandise between the stores of Tenant, if any,
where such exchange of goods or merchandise is made solely for the convenient
operation of the business of Tenant and not for the purpose of consummating a
sale which has been made at, in, from or upon the Premises, (iii) the amount of
any discount on sales actually given to bona fide employees or agents of Tenant,
(iv) the amount of returns to shippers or to manufacturers, (v) the amount of
merchandise sold or some part thereof which is thereafter returned by the
purchaser and accepted by Tenant, (vi) sales of fixtures or other capital items
sold by Tenant after use thereof in the conduct of Tenant's business in the
Premises, (vii) deposits on merchandise until the sale becomes final of the
deposit is permanently retained by Tenant, (viii) uncollected credit accounts,
or (ix) income from sales made to bona fide charitable organizations.
Section 2.17 "Guarantor" means any "Person," as hereinafter defined, who
has executed or has agreed to execute any guaranty of Tenant's obligations
hereunder.
Section 2.18 "Land" means the land situated in the city of _____________,
_________________ County, Florida, on which the Shopping Center is or will be
constructed, as more particularly described in Schedule "B," or as such lands
may be expanded or reduced from time to time.
Section 2.19 "Landlord" means _____________________________, its successors
and assigns and its duly authorized agents.
Section 2.20 "Landlord's Agents" means the agents, officers, owners,
directors, partners, contractors, servants, employees, suppliers, and
materialmen of Landlord.
Section 2.21 "Landlord's Work" means that work to be performed by Landlord
described in Section 3.03 hereof.
Section 2.22 "Laws" means all rules, regulations, orders, ordinances,
building and zoning restrictions, statutes, laws, and other requirements of
governmental or quasi-governmental authorities, including, without limitation,
the Fire Insurance Rating Organization, Environmental Protection Agency,
Occupational Safety and Health Administration, or any other bodies or agencies
having jurisdiction over any portion of the Shopping Center,
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including the Premises, which in any manner regulates the cleanliness, safety,
use and occupancy thereof, at any time enacted, promulgated or issued.
Section 2.23 "Lease" means this Agreement, together with all Schedules
attached to and made a part hereof, as well as any riders, addenda or
modifications hereof.
Section 2.24 "Lease Year" means the twelve (12) full calendar months
commencing on the first day of the month immediately following the month in
which the Commencement Date occurs unless the Commencement Date is the first day
of a month, in which event the first Lease Year shall commence on the
Commencement Date. However, the final Lease Year may contain less than twelve
(12) months due to the expiration or sooner termination of the Term. If
applicable, the First Month shall be deemed included in the first Lease Year.
Section 2.25 "Leasehold Improvements" means leasehold improvements to the
Premises determined according to common law and this Lease and shall include,
without limitation; all fixtures, improvements, installations, alterations and
additions from time to time made, erected or installed in the Premises by or on
behalf of Tenant or any previous occupant of the Premises, including signs and
lettering, partitions, doors and hardware, however affixed and whether or not
moveable; all mechanical, electrical and utility installations; all carpeting
and window coverings. Leasehold improvements shall not include Tenant's "Trade
Fixtures" (hereinafter defined), or furniture, equipment and other personal
property owned or to be used by Tenant, not in the nature of fixtures.
Section 2.26 "Major Store" means any building or portion thereof in the
Shopping Center leased to a single tenant or named or occupied by a single user
comprising ________________ thousand (_________) square feet or more of Gross
Rentable Area of the Shopping Center.
Section 2.27 "Minimum Rent" means the minimum rent payable by Tenant
pursuant to Section 5.02 hereof.
Section 2.28 "Mortgage" means any and all mortgages, security agreements or
like instruments resulting from any financing, refinancing or collateral
financing (including renewals or extensions thereof) made or arranged by
Landlord of its interest in all or any part of the Shopping Center.
Section 2.29 "Mortgagee" means the holders of, or secured party under, any
Mortgage and includes any trustee for bondholders.
Section 2.30 "Opening Date" means the opening for the Chopping Center, as
designated by Landlord.
Section 2.31 "Percentage Rent" has the meaning attributed thereto in
Section 5.05 of this Lease.
Section 2.32 "Percentage Rent Period" means the period specified in Article
I hereof commencing on the Commencement Date is such date is the first day of a
month, or otherwise commencing on the first day of the next month following the
Commencement Date; provided, however, the first Percentage Rent Period shall
include any partial month following the Commencement Date to the start of the
next calendar month.
Section 2.33 "Percentage Rent Rate" is the percentage rate so specified in
Article I. Paragraph O of this Lease.
Section 2.34 "Person" means any individual, firm, joint venture,
association, partnership, corporation, trust, syndicate, fiduciary or any group
or combination of the foregoing.
Section 2.35 "Premises" means the space leased to Tenant described in
Section 3.01 and includes Leasehold Improvements in such Premises.
Section 2.36 "Proportionate Share" means a fraction which has as its
numerator the Gross Rentable Area of the Premises and as its denominator the
Gross Rentable Area of the Shopping Center; provided, however, in the event
Landlord, acting in good faith and in a reasonable manner, determines that the
foregoing fraction does not accurately reflect Tenant's proper share of
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"Operating Costs," as defined in Section 6.04 hereof, as to any one or more
items of Operating Costs, then Landlord shall have the right to adjust Tenant's
share of Operating Costs as to those items, and such adjusted fraction shall be
Tenant's Proportionate Share as to those items. In making such determination,
Landlord may consider the nature and intensity of use of any service or facility
made by Tenant, and any use or improvement made by Tenant affecting the Promises
or the Shopping Center.
Section 2.37 "Rent" means the aggregate of Minimum Rent, Percentage Rent
and Additional Rent.
Section 2.38 "Rules and Regulations" means the rules and regulations
adopted and promulgated by Landlord from time to time pertaining to the
operation and administration of the Shopping Center pursuant to Section 6.02
hereof. The Rules and Regulations existing as of the Commencement Date are those
set out in Schedule "D" attached to this Lease.
Section 2.39 "Shopping Center" means the office and shopping center
buildings and the Land on which same is erected, included the Common Areas,
known generally as___and includes all facilities and buildings erected from time
to time on the Land, and further includes each and very part of any such
building or facilities, whether or not rented or rentable, together with areas
and facilities serving the Shopping Center or having utility in connection
therewith, such as malls, corridors, sidewalks, parking facilities, mechanical
areas, truck and receiving areas, loading docks, driveways and the like.
Landlord reserves the right to add to or sever the ownership of or title to any
portion of the Shopping Center at any time, and limit the use of any Common
Areas to one or more tenants from time to time.
Section 2.40 "Taxes" means all real estate, personal property and other ad
valorem taxes, and any other levies, charges, impact fees, and local improvement
rates and assessments whatsoever assessed or charged against the Shopping
Center, the equipment and improvements therein contained, or any part thereof,
by any lawful taxing authority, and including any amounts assessed or charged in
substitution for or in lieu of any such taxes, excluding only business tax and
income or capital gains taxes, to the extent such taxes are not levied in lieu
of any of the foregoing against the Shopping Center or Landlord.
Section 2.41 "Tenant" means the party so identified on the first page of
this Lease, such party's permitted successors and assigns, and is deemed to
include the word "lessee" and every Person mentioned as Tenant in this Lease.
Section 2.42 "Tenant's Agents" means the agents, officers, owners,
directors, partners, contractors, servants, employees, licensee, invitees,
suppliers, subtenants, materialmen and concessionaires of Tenant.
Section 2.43 "Tenant's Work" means that work to be performed by Tenant
described in Section 3.03 hereof.
Section 2.44 "Term" means the period set out in Section 4.01 of this Lease,
in addition to any renewal periods, in any.
Section 2.45 "Trade Fixtures" means equipment and furnishings installed by
Tenant and affixed to the Premises, which are removable from the Premises
without damage thereto, required by Tenant for the conduct of its business.
Trade Fixtures shall not include: (a) heating, ventilating or air conditioning
systems, facilities and equipment in or serving the Premises; (b) floor
coverings affixed to the floor of the Premises; (C) light fixtures; (d) internal
stairways and doors; (e) vaults; and (f) any fixtures, facilities, equipment or
installations installed by or at the expense of Landlord, all of which are
Leasehold improvements.
Section 2.46 "Transfer" means and includes any of the following (i) an
assignment of this Lease, in whole or in part; (ii) a sublease of all or any
part of the Premises; (iii) any transaction whereby the rights of Tenant under
this Lease or to the Premises are transferred or collaterally assigned to
another; (iv) any transaction by which any right of use or occupancy of all or
any part of the Premises is conferred upon anyone; (v) any mortgage or
encumbrance of this Lease or the Premises, or any part thereof, or other
arrangement under which either this Lease or the Premises becomes security for
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any indebtedness or other obligations, and includes any transaction or
occurrence whatsoever, including, but not limited to, expropriation,
receivership proceedings, seizure by legal process and transfer by operation of
law, which has changed or might change the identity of the Persons having lawful
use or occupancy of any part of the Promises; and (vi) any change of control
whereby a corporation, trust, partnership, unincorporated association or other
entity transfer or issues by sale, assignment, subscription, transmission on
death, mortgage, charge, security interest, operation by law or otherwise, of
any shares, voting rights or partnership or beneficial interests, resulting in
the transfer of a majority interest in, or a change in the effective control of,
such corporation, trust, partnership, unincorporated association, or other
entity, including any of the foregoing which directly or indirectly controls
Tenant, unless such change occurs as a result of trading in the shares of a
corporation listed on a recognized stock exchange in the United States, and then
only so long as Landlord receives assurances reasonably satisfactory to it that
there will be a continuity of management and of the business practice of such
entity notwithstanding such change of control. Any change, assignment or
transfer described above is a prohibited Transfer and assignment of this Lease
within the meaning of this Section 2.46, unless Tenant complies with Article
XIII of this Lease.
Section 2.47 "Transferee" means the Person or Persons to whom a Transfer is
to be made.
ARTICLE III
PREMISES
Section 3.01 Grant and Premises. In consideration of the performance by
Tenant of its obligations under this Lease in accordance with the terms and
conditions set forth herein, Landlord leases to Tenant and Tenant does hereby
lease from Landlord the Premises to Tenant for the Term, more fully described in
Article I, Paragraph I of this Lease. The approximate location and boundaries of
the Premises are shown outline in red on the site plan attached hereto as
Schedule "A." The Gross Rentable Area of the Premises is approximately as is
stated in Article I, Paragraph J hereof. If construction of the Premises is
completed as of the Date of Lease Execution, as evidenced by a certificate of
occupancy or certificate of completion from the appropriate governmental
authority, the Gross Rentable Area of the Premises and Minimum Rent calculation,
as provided in Section 5.02 hereof, shall be binding on the parties and not
subject to recomputation. If construction is not completed at the Date of Lease
Execution, as soon as reasonably possible after such completion of construction,
the Architect, whose decision shall be final and binding on the parties, shall
measure the Premises, and the Gross Rentable Area of the Premises and the
Minimum Rent as set out in this Lease shall be adjusted accordingly.
Section 3.02 Acceptance of Premises. The Premises are hereby leased to
Tenant subject to: (i) any and all conditions that an accurate survey and
examination of the Premises would disclose; (ii) any and all Laws, as
applicable, now in force or hereafter enacted; and (iii) any title matter of
record or otherwise disclosed to Tenant. If construction of the Premises is
completed as of the Date of Lease Execution, Tenant certifies that it has
inspected the Premises in the Shopping Center in which the Premises are
contained and, in reliance on such inspection, acknowledges and accepts (a) the
existing co-tenant; (b) the design and construction of the Shopping Center; (c)
the parking and access areas of the Shopping Center; and (d) the other Common
Areas, all of which Tenant confirms as being satisfactory. Tenant further
acknowledges that the Premises, including all fixtures, equipment and
furnishings contained therein, are in satisfactory or excellent condition and
accepts the Premises in its "AS IS" condition, without requiring Landlord to
make any repairs or replacements thereof. Tenant hereby waives any objection to
and releases Landlord from any liability arising from the condition of the
Premises for and after the Date of Lease Execution.
Section 3.03 Construction of Premises. Landlord will, at its sole expense,
perform all work specified to be performed by Landlord more specifically set
forth in Schedule "C" attached hereto as "Landlord's Work." Tenant will, at its
sole expense, perform all other work necessary to complete the Premises for its
business purposes including, without limitation, the work specified to be
performed by Tenant more particularly described in Schedule "C" attached hereto
as "Tenant's Work"; provided however, all of Tenant's Work
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shall be performed by licensed contractors acceptable to Landlord, in accordance
with its final plans, specifications and drawings furnished to Landlord, which
shall be in compliance with all Laws, including applicable building and zoning
codes. Tenant shall complete Tenant's Work within the Fixturing Period described
in Section 3.04 below. Tenant will also pay any additional charges, if any,
specifically set forth in Schedule "C." Nothing in this Lease shall prevent
Landlord, in its construction of the Shopping Center or completion of Landlord's
Work, from making such variations, alterations or additions in such work and in
any plans and specifications relating thereto as it may see fit, so long as the
Shopping Center and its facilities as finally construed are generally similar to
the Shopping Center and its facilities as set out in the plans and
specifications presented to Tenant by Landlord at or prior to the execution of
this Lease. Landlord agrees to attempt to complete construction of the Shopping
Center in good faith prior to ________________, 19__, subject to Force Majeure;
in the event any such construction is not completed on or prior to such date,
for any reason, Landlord shall have the right to cancel this Lease by written
notice to Tenant accompanied by any deposits made by Tenant whereupon the
parties shall each be relieved of all further obligations hereunder and Tenant
shall have no claim against Landlord in law or equity arising from such
cancellation.
Section 3.04 Fixturing Period. Tenant shall be granted the Fixturing Period
specified in Article I, Paragraph U hereof in which to complete Tenant's Work,
commencing seven (7) days following oral in written notice from Landlord to
Tenant indicating that Landlord's Work for the Premises is sufficiently
completed to enable Tenant's Work to commence. During the Fixturing Period
Tenant shall not be required to pay Minimum Rent, Percentage Rent or Tenant's
Proportionate Share of Operating Costs, but such occupancy shall in all other
respects be subject to the terms of this Lease. If during the Fixturing Period
Tenant causes interference with the completion of any construction being
performed by or for Landlord, Landlord may require Tenant to vacate the Premises
until completion of the work then being performed by or for Landlord. In such
event, however, the Fixturing Period shall be commensurately extended.
ARTICLE IV
TERM
Section 4.01 Term. The Term of the Lease is the period from the
Commencement Date through the Expiration Date which is set forth in Article I,
Paragraph I of this Lease. The Commencement Date is the earliest of (i) the
opening of Tenant's business in any part of the Premises, or (ii) the expiration
of Tenant's Fixturing Period. Upon request of Landlord, Tenant shall execute a
"Commencement Agreement" confirming the Commencement Date of this Lease, in form
similar to that which is attached hereto as Schedule "E."
Section 4.02 Opening Date. Tenant, at Landlord's request, shall cooperate
to effect a joint opening of the Premises and the Shopping Center (defined in
Section 2.29 hereof as the "Opening Date") or any expansion thereof,
notwithstanding that it may cause a delay in Tenant's opening for business. If
Tenant so delays its opening, then, notwithstanding any provisions in this Lease
to the contrary, the Commencement Date shall occur on the Opening Date and the
Expiration Date shall be extended accordingly.
Section 4.03 Initial Deposit. On or before the execution of this Lease,
Tenant shall pay to Landlord the Initial Deposit set forth under Article I,
Paragraph Q hereof. Provided Tenant is not in default under any of the terms or
conditions of this Lease, the Initial Deposit shall be either applied towards
the next Rent payment due under this Lease, or returned to Tenant within thirty
(30) days after Tenant opens the Premises for business, at the option of
Landlord. The Initial Deposit shall, in either event, be retained by Landlord,
without interest earned for the benefit of Tenant, and the application of the
Initial Deposit shall be disclosed in wiring to Tenant after the Commencement
Date.
ARTICLE V
RENT
Section 5.01 Covenant to Pay. Tenant shall pay Rent to Landlord from the
Commencement Date without prior demand, together with all applicable Florida
sales tax thereon as provided by Law from time to time, provided
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however, unless otherwise provided in this Lease, Additional Rent shall be
payable by Tenant to Landlord within five (5) days following demand. Minimum
Rent and Additional Rent for any Lease Year greater or less than twelve (12)
months shall be pro-rated on a per diem basis, based upon the number of days
elapsed over a 365-day year. Tenant agrees that its covenant to pay Rent to
Landlord is an independent covenant and that all such amounts are payable
without counterclaim, set-off, deduction, abatement or reduction whatsoever,
except as expressly provided for in this Lease.
Section 5.02 Minimum Rent and CPI Percentage Increase. Subject to any
escalation which may be provided for in this Lease, Tenant shall pay Minimum
Rent for the Term in the initial amount specified in Article I hereof, which
shall be payable throughout the Term in equal, monthly installments in advance
on the first day of each calendar month of each year of the Term. Each of the
monthly installments during the Term, shall be in the amounts specified in
Article I, Paragraph M of this Lease, subject to the CPI Percentage Increase.
The Minimum Rent shall be adjusted on January 1 of the year following the year
in which the Commencement Date occurred, and thereafter on each successive
January 1 during the balance of the Term (and any renewal thereof) by adding to
the Minimum Rent payment an amount equal to the CPI Percentage Increase, as it
adjusts from time to time. Anything herein to the contrary notwithstanding, in
no event shall any adjustment to the Minimum Rent in accordance with this
Section 5.02 produce an amount which is less than the Minimum Rent previously
paid. Minimum Rent shall continue to be payable in equal, monthly installments
as otherwise described above until Landlord notifies Tenant of the new monthly
Minimum Rent installment amount. Failure of Landlord to timely notify Tenant of
the new monthly Minimum Rent installment amount shall not be deemed a waiver by
Landlord of the increased rental; the new monthly amount (or any portion not
previously paid) shall be payable, retroactive to the commencement of the year
for which the adjustment was made, upon notification by Landlord to Tenant of
the new monthly Minimum Rent installment amount.
Section 5.03 Payment of Business Taxes. Tenant shall pay when due all
Business Tax. If Tenant's Business Tax is payable by Landlord to the relevant
taxing authority, Tenant shall pay the amount thereof to Landlord, or as
Landlord directs.
Section 5.04 Payment of Operating Costs. In addition to payments of Rent,
Tenant shall pay to Landlord Tenant's Proportionate Share of "Operating Costs"
(defined in Section 6.04 hereof), initially as set forth in Article I, Paragraph
II hereof. The amount of Operating Costs payable to Landlord may be estimated by
Landlord for such period as Landlord determines from time to time (not to exceed
24 months), and Tenant agrees to pay to Landlord the amounts so estimated in
equal installments, in advance, on the first day of each month during such
period. Notwithstanding the foregoing, when bills for all or any portion of
Operating Costs so estimated are actually received by Landlord, Landlord may
bill Tenant for Tenant's Proportionate Share thereof, less any amount previously
paid by Tenant to Landlord on account of such item(s) by way of estimated
Operating Costs payments. Within a reasonable period of time after the end of
the period for which estimate payments have been made, Landlord shall submit to
Tenant a statement setting forth the actual amounts payable by Tenant based on
actual costs. If the amount Tenant has paid based on estimates is less than the
amount due based on actual costs, Tenant shall pay Landlord such deficiency
within five (5) days after submission of such statement to Tenant. If the amount
paid by Tenant is greater than the amount actually due, the excess may be
retained by Landlord to be credited and applies by Landlord to the next due
installment(s) of Tenant's Proportionate Share of Operating Costs, or as to the
final Lease Year, provided Tenant is not in default, Landlord will refund such
excess to Tenant or credit such Tenant's Proportionate Share of actual Operating
costs for the final estimate period of the Term of this Lease shall be due and
payable even though it may not be finally calculated until after the expiration
of the Term. Accordingly, Landlord shall have the right to continue to hold
Tenant's Security Deposit following expiration of the Term until Tenant's share
of actual Operating Costs has been paid, unless an alternative security (letter
of credit or otherwise) is furnished to the satisfaction of Landlord.
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Section 5.06 Rent Past Due. In the event any installment of Rent shall
become overdue, a later charge of ten percent (10%) of the delinquent sum may be
charged by Landlord. If any installment of Rent shall remain overdue for more
than fifteen (15) days, an additional late charge in an amount equal to one and
one-half percent (1.5%) per month (10% per annum) of the delinquent amount may
be charged by Landlord, such charge to be computed for the entire period for
which the amount is overdue and which shall be in additional to and not in lieu
of the ten percent (10%) late charge or any other remedy available to Landlord.
Section 5.07 Security Deposit. Landlord acknowledges receipt of a Security
Deposit in the amount specified in Article I, Paragraph O of this Lease, to be
held by Landlord, without any liability for interest thereon, as security for
the performance by Tenant of all its obligations under this Lease. In the event
of default by Tenant of any of its obligations under this Lease, Landlord may at
its option, but without prejudice to any other rights which Landlord may have,
apply all or part of the Security Deposit to compensate Landlord for any loss,
damage or expense sustained by Landlord as a result of such default, If all or
any part of the Security Deposit is so applied, Tenant shall restore the
Security Deposit to its original amount on demand of Landlord. subject to the
provisions of Sections 5.04 and 5.05 hereof, within thirty (30) days following
termination of this Lease, if Tenant is not then in default, the Security
Deposit will be returned by Landlord to Tenant. If Landlord sells its interest
in the Premises, it may deliver the Security Deposit to the purchaser and
Landlord will thereupon be released from any further liability with respect to
the Security Deposit or its return to Tenant and the purchaser shall become
directly responsible to Tenant.
Section 5.08 Net Lease. This Lease is a completely net lease to Landlord,
except as otherwise expressly herein stated. Landlord is not responsible for any
expenses or outlays of any nature arising from or relating to the Premises, the
use or occupancy thereof, the contents thereof or the business carried on
therein. Tenant shall pay all costs, expenses, charges, assessments, impositions
and outlays of every nature and kind relating to the Premises except as
expressly herein stated.
Section 5.09 No Abatement of Rent. Except as specifically provided to the
contrary in Article XII of this Lease, there shall be no abatement from or
reduction of the Rent due, nor shall Tenant be entitled to damages, losses,
costs or disbursements from Landlord during the Term caused by or on account of
the fire, water or sprinkler systems, or the partial or temporary failure or
stoppage of any heating, cooling, lighting, plumbing or other services in or to
the Premises or the Shopping Center, whether due to Force Majeure or the making
of alterations, repairs, renewals, improvements or structural changes to the
Premises, the Shopping Center, the equipment or systems supplying the services,
or from any cause whatsoever, provided that the said failure or stoppage is
remedies within a reasonable time.
ARTICLE VI
COMMON AREAS AND OPERATING COSTS
Section 6.01 Designation. Landlord grants to Tenant and Tenant's Agents, a
non-exclusive license to use the Common Areas in common with others during the
Term, subject to the exclusive control and management thereof as all time by
Landlord, and subject further to the rights of Landlord set forth below.
Section 6.02 Rules and Regulations. Landlord shall operate and maintain any
areas designated by Landlord as Common Areas in a manner deemed by Landlord to
be reasonable and appropriate and in the best interests of the Shopping Center,
except to the extent that such operation and/or maintenance is the obligation of
any Major Store. Landlord shall have the right, from time to time, to: (i)
establish, modify and enforce reasonable rules and regulations with respect to
the Common Areas, and to impose parking charges therefore; (ii) enter into,
modify and terminate easements, licenses and other
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agreements pertaining to the use and maintenance of the Common Areas, and any
portions thereof and any additions thereto or exclusions therefrom; (iii) close
any or all portions of the Common Areas to such extent as may, in the opinion of
Landlord, be necessary to prevent a dedication thereof or to the accrual of any
rights by any person or by the public therein; (iv) temporarily close any
portions of the Common Areas; and (v) do and perform such other acts which
relate to, concern or arise out of the Common Areas and improvements thereon as
Landlord shall reasonably determine to be advisable or necessary, Tenant shall
comply with all rules and regulations, and amendments thereto, adopted by
Landlord from time to time including those set forth in Schedule "D", provided
such rules and regulations are not inconsistent with and do not contradict this
Lease. The rules and regulations may differentiate between different types of
businesses in the Shopping Center. Landlord shall not be responsible to any
tenant for any non-observance of such rules or regulations by any other tenants
of the Shopping Center.
Section 6.03 Employee Parking. Tenant agrees that Tenant, as well as its
employees, will park their vehicles only in such places designated by Landlord
form time to time as the employee parking areas(s), is do required by Landlord.
Such employee parking area(s) need not be within the parcel of land described in
Schedule "B" attached hereto, provided it is reasonably convenient thereto. If
applicable, such adjacent parking areas shall, notwithstanding such location, be
deemed to be part of the Common Areas hereof. Tenant further agrees to furnish
Landlord with the motor vehicle license numbers assigned to the vehicles of
Tenant and its employees, within five (5) days after taking possession of the
Premises and shall notify Landlord of any changes or any additions to such list
within five (5) days after such change. In the event any vehicle is parked by
Tenant, or its employees, in a non-employee parking area, Landlord shall have
the right to cause the vehicle to be towed to a location designated by Landlord
and Tenant shall reimburse Landlord for all towing charges. If Tenant or its
employees fail to park their vehicles in the designated parking areas, then,
without failure, Landlord, after giving notice to Tenant, may charge Tenant, as
additional rent, the sum of fifty dollars ($50.00) per day for each car parked
in violation of the provisions of this Section 6.03.
Section 6.04 Operating Costs Defined. Operating Costs shall mean any amount
paid or payable, whether by Landlord or by other on behalf of Landlord, arising
out of Landlord's ownership, maintenance, operation, repair, replacement and
administration of the Shopping Center, including without limitation: (a) the
cost of Taxes including all costs associated with the appeal of any assessment
on Taxes; (b) the cost of Insurance which Landlord is obligated or permitted to
obtain under this Lease, including, but not limited to, rent interruption
insurance, and any deductible amount applicable to any claim made by Landlord
under such insurance; (c) the cost of security, janitorial, landscaping, window
cleaning, garbage removal and trash removal services; (d) the cost of heating,
ventilating and air conditioning to the extent incurred with respect to Common
Areas or with respect to any shared systems; (e) the cost of all gas, water,
sewer, electricity, telephone and any other utilities used in the maintenance,
operation or administration of the Shopping Center; (f) salaries, wages and
other amounts paid or payable for all personnel involved in the repair,
maintenance, operation, leasing, security, supervision or cleaning of the
Shopping Center, including fringe benefits, unemployment and workmen's
compensation insurance premiums, pension plan contributions and other
employment costs, as well as the cost of engaging independent contractors to
perform any of the foregoing services; (g) auditing accounting and legal fees
and costs; (h) the cost of repairing, replacing, operating and maintaining the
Shopping Center, and the equipment serving the Shopping Center; (i) the cost of
the rental of any equipment and signs (not including Tenant's signage); (j)
amortization of the costs referred to in subsection (h) immediately above to
the extent not charged fully in the year in which they are incurred, all as
determined by Landlord in accordance with sound accounting principles,
together with interest on any unamortized balance of such costs calculated at
three percent (3%) per annum above the "Prime Rate" during the period of
calculation, as stated in the Wall Street Journal, or similar publication in
the event the Wall Street Journal ceases publication; (k) all management and
leasing fees; (l) administration costs and fees; (m) capital expenditures which
are required by law and/or which results in a substantial labor or cost saving
device or operation, in which case the capital expenditures shall be amortized
over ten (10) years and included on an annual basis in the Operating Costs; and
(n) costs incurred by Landlord to
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conduct any environmental tests required by state or federal law, including
administrative agencies, or by Landlord.
Operating Costs shall reflect and be reduced by any contribution made to
Landlord by Major Stores, if any. There shall be added to the Operating Costs a
management and administration fee equal to ____________ (______%) of the
Operating Costs, which fee may be payable to Landlord or to any other party
managing the Shopping Center or administering maintenance of the Common Areas,
as directed by Landlord. Operating Costs shall exclude only: (1) all amounts
which otherwise would be included in Operating Costs which are actually
recovered by Landlord from specific tenants by separate agreement or as a result
of any act, omission, default or negligence of such tenants; (2) Income taxes on
Landlord's income from the Shopping Center; (3) such of the Operating Costs as
are recovered from Insurance proceeds; (4) interest on debt and retirement of
debt principal (except as above provided); and (5) the cost of any additional
capital item not part of the initial construction of the Shopping Center.
It is acknowledged that certain Operating Costs may apply to only the
office building component, if any, of the Shopping Center, other Operating Costs
may apply only to the retail component of the Shopping Center, and other
Operating Costs apply to both components in varying degrees. Landlord shall
determine, acting reasonably and in good faith, which items of Operating Costs
are totally or partially inapplicable to the retail component of the Shopping
Center, and such items or portions of items as so determined by Landlord shall
not be deemed included in Operating Costs hereunder, anything above to the
contrary notwithstanding.
ARTICLE VII
USE OF PREMISES
Section 7.01 Permitted Use and Business Name. The Premises shall be used
and occupied only for the use as permitted in Article I, Paragraph K of the
Lease. The business of Tenant in the Premises shall be carried on under the name
and style specified in Article I, Paragraph F hereof and under no other name and
style unless approved by Landlord in writing. Tenant shall not have any
exclusive right to sell merchandise or dispense services of any type and
character, it being understood that Landlord reserves the absolute right to
lease other space in the Shopping Center to Tenants selling merchandise or
dispensing services similar to that which is being sold or dispensed by Tenant.
Section 7.02 Hours of Business. During the Term. Tenant shall conduct its
business in the Premises, at a minimum on Monday through Friday from ______ a.m.
to _____ p.m., on Saturday from ______ a.m. to ______ p.m., and on Sunday from
______ a.m. to ______ p.m. Landlord may require other minimum hours if such
requirement is made of at least fifty percent (50%) of all other tenants in the
retail component of the Shopping Center. Tenant may conduct business on the
Premises in addition to the foregoing times, at Tenant's sole expense, provided
prior written approval of Landlord is obtained by Tenant. However, during such
additional times, Landlord shall not be responsible for providing Common Area or
other services during such additional hours.
Section 7.03 Opening, Continuous Occupancy and Inventory. Tenant shall open
the whole of the Premises for business to the public, fully fixtured, stocked
and staffed on the Commencement Date. However, Tenant shall not open its
business prior to the Opening Date without Landlord's prior written consent.
Tenant shall continuously, actively and diligently carry on the business
specified in Section 7.01 hereof within all of the Premises during the Term,
during such hours and upon such days as are herein required, except when
prevented from doing so by Force Majeure. Tenant acknowledges that its continued
occupancy of the Premises and the regular conduct of its business therein are of
utmost importance to neighboring tenants and to Landlord in the renting of space
in the Shopping Center, the renewal of other leases therein, the efficient and
economic supply of services and utilities, and the maintenance of Percentage
Rent. Tenant acknowledges that Landlord is executing this Lease in reliance
thereupon and that Tenant's representation of this Section 7.03 is a material
element inducing Landlord to execute this Lease. Tenant shall maintain at all
times throughout the Term hereof an available and substantial stock of goods,
wares and merchandise adequate to ensure successful operation of Tenant's
business and produce maximum sales; provided, however, Tenant shall store and
stock in the Premises only such
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Inventories as Tenant intends to sell at retail from or upon the Premises, and
unless otherwise agreed by Landlord, Tenant shall use for office, storage and
other non-selling purposes only such space in the Premises as is reasonably
required to maintain Tenant's retail sales therein. Tenant shall employ and
maintain sales and other personnel sufficient at all times for proper service to
its customers. Tenant shall install and maintain at all times in the Premises
modern and high-quality fixtures, furnishings, fittings and equipment adequate,
appropriate and properly laid out to maximize Tenant's retail sales.
Section 7.04 Tenant's Covenants as to Use and Occupancy.
(A) Tenant shall carry on its business on the Premises in a reputable
manner and shall not cause, permit or suffer to be done or exist upon the
Premises anything which shall result in a danger, hazard or bring about a breach
of any provision of this Lease or any applicable Law.
(B) Tenant shall be prohibited from conducting any use, or making any
modification, which would in any manner (i) violate any certificate of
occupancy, or similar governmental approval, (ii) cause structural injury to all
or any part of the Premises or to any improvements constructed thereon, or (iii)
constitute a public or private nuisance.
(C) Tenant shall not use in the Premises any traveling or flashing lights
or signs or any loudspeakers, television, phonographs, radio or other
audio-visual or mechanical devices in a manner so that they can be heard or seen
outside the Premises without obtaining in each case prior written consent of
Landlord. If Tenant uses any such equipment without receiving the prior written
consent of Landlord, Landlord shall be entitled to remove such equipment without
notice at any time and at the cost of Tenant payable as Additional Rent
forthwith on demand.
(D) Tenant shall not burn any trash or garbage in or about the Premises or
anywhere else in the Shopping Center, nor cause, permit or suffer upon the
Premises or anywhere else in the Shopping Center any unusual or objectionable
noises or odors or anything which may disturb the enjoyment of the Shopping
Center and all the Common Areas and facilities thereof by other tenants,
customers and invitees of the Shopping Center, or any adjacent property owners.
(E) Tenant shall not keep or display any merchandise which in any manner
shall obstruct the Common Areas, and shall not sell, advertise, conduct or
solicit business anywhere within the Shopping Center other than in the Premises.
Tenant shall not cause, permit or suffer any machine selling merchandise,
services or entertainment, including vending machines or other machines operated
by coins to be present on the Premises without prior written consent of
Landlord.
(F) Tenant shall not overload any floor in the Premises, or any utility or
service, or commit any act of waste or damage any part of the Premises.
(G) Tenant shall (i) ship and receive supplies, fixtures, equipment,
furnishings, wares and merchandise only through the appropriate service and
delivery facilities provided by Landlord, (ii) not park its trucks or other
delivery vehicles or allow suppliers or others making deliveries to or receiving
shipments from the Premises to park in the parking areas, except in those parts
those parts thereof as may from time to time be allocated by Landlord for such
purpose.
(H) Tenant shall not store or bring on the Premises any articles of any
combustible, toxic or dangerous nature and shall at all times keep the Premises
in such condition as to comply with all Laws. Tenant shall keep and maintain on
the Premises all safety apparatus or appliances required by Law. Tenant shall
not cause, permit or suffer any act, occurrence, or series of acts or
occurrences upon the Premises which shall cause the rate of Insurance on the
Premises and/or Shopping Center, or any part thereof, to be cancelled, result in
an increase in the premiums for coverages of same or preclude the obtaining of
such Insurance.
(I) No aspect of Tenant's business operation shall feature the display of
any nude body parts or pornographic material, whether or not violative of Law,
unless consented to by Landlord.
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(J) Tenant shall not install in, on, or over its storefront any lights,
shades, awnings or similar items without the prior written consent of Landlord.
Section 7.05 Microwave Transmission. Landlord shall have the absolute right
to regulate any emission or transmission of microwaves, radioactive isotopes, or
other chemical or physical process which, in Landlord's opinion, is or can be
detrimental to other tenants, occupants or invitees of the Shopping Center. If
the Premises emits or transmits any of the foregoing, then Landlord shall have
the right to deem this as harmful to the Shopping Center, in which event
Tenant's conduct or permissive action shall be a nuisance, and Tenant, upon
written notice from Landlord, shall Immediately abate such conduct or activity,
to the satisfaction of Landlord. For purposes hereof, Landlord shall be
permitted to effectuate the purposes hereof If the omissions or transmissions
are causing any reasonable discomfort or medical harm to the use and occupancy
of any other tenants in the Shopping Center.
Section 7.06 Promotion of Name. Tenant shall display such name as Landlord
may from time to time designate for the Shopping Center in Tenant's stationery
used upon the Premises, and in material which is given, visible or available to
customers of Tenant. Tenant shall promote such name in any advertisements or
promotional material published or initiated by Tenant In regard to Its business
from the Premises.
Section 7.07 Display Windows. Tenant shall keep display windows neatly
dressed as determined by Landlord. Display windows and lighted signs, If any,
shall be kept illuminated by Tenant on all business days until at least one (1)
hour after the Shopping Center closes for business, or as otherwise required by
Landlord.
Section 7.08 Compliance with Laws. Tenant shall not cause, permit or suffer
the Premises to be used and occupied in an unsafe or hazardous condition and
hereby warrants that at times throughout the Term hereof Tenant shall use,
occupy and operate the Premises in a clean and proper manner so as not to
contravene any Laws, or the requirements of Landlord's or Tenant's Insurers. If
due to Tenant's use of the Premises, repairs, improvements or alterations are
necessary to comply with any of the foregoing, Tenant shall pay the entire cost
thereof.
Section 7.09 Advertising, Trade Names and Restricted Marks.
(A) Tenant shall throughout the Term hereof advertise its business and its
products and/or services In advertising media directed at residents of the trade
area of the Shopping Center. In its advertising, Tenant shall use the name of
the Shopping Center and such trade names, symbols and slogans as may be
designated by Landlord, but Tenant shall not indulge in any advertising or sales
promotion which, in the opinion of Landlord (i) is undiginified or not in
conformity with the higher standards of practice among stores dealing in similar
merchandise, (ii) might tend to harm the business reputation of Landlord or
reflect unfavorably on the Shopping Center, or (iii) might tend to confuse or
mislead the public.
(B) The name of the Shopping Center which Landlord may from time to time
adopt and every name or mark adopted by Landlord In connection with the Shopping
Center shall be used by Tenant only in association with sales made at or from
the business carried on in the Premises during the Term and Tenant's use thereof
shall be subject to such regulations as Landlord may from time to time impose.
Tenant shall not acquire any rights in any such restricted name or mark, and
upon the termination of this Lease all of Tenant's Interest herein shall be
deemed to have been surrendered to Landlord and Tenant shall thereafter cease
and abandon all use thereof. If Landlord so requests, Tenant shall execute
registered user applications to protect Landlord's trademark rights.
Section 7.10 Signs. Tenant shall, at its sole expense and undertaking,
erect and maintain identification signs upon the storefront of the Premises. The
design and specification of such signs shall be prepared by Tenant In accordance
with Landlord's sign and storefront rules, as adopted from time to time, and
shall be submitted for Landlord's prior approval. Except with the prior written
consent of Landlord, which consent may be withheld in Landlord's sole and
absolute discretion, Tenant shall not erect, install, display, inscribe, paint
or affix any signs, Lettering or advertising medium upon or
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above any exterior portion of the Premises, Including the strorefront and all
interior as well as exterior glass surfaces thereof. All signs located in the
interior of the Premises shall be professionally printed and in good taste so as
not to detract from the general appearance of the Premises or the Shopping
Center. Tenant is prohibited from exhibiting any handwritten signs. All signs,
even if approved by Landlord, must be in conformance with applicable Laws.
Section 7.11 Prohibited Uses. Notwithstanding any other provisions of this
Lease to the contrary, Tenant shall not cause or Permit use the Premises for any
of the following purposes: (A) for the sale by Tenant, as its principal business
purpose, of any merchandise which Tenant, in the course of its normal business
practice, purchases at manufacturers' clearances or purchases of ends-of-runs,
bankruptcy stock, seconds or other similar merchandise; (B) for the sale of
second-hand goods, war surplus articles, Insurance salvage stock, fire sale
stock, merchandise damages by or held out to be damaged by fire, except
merchandise damaged by fire or smoke occurring in the Shopping Center, and then
only for thirty (30) days after the date of any such damage; (C) as an auction
or flea market; (D) for a bankruptcy sale or going-out-of-business sale or
liquidation sale or any similar sale, unless Tenant Is in fact in bankruptcy, is
going out of business, or is in liquidation, in which case such sale shall not
continue beyond thirty (30) days; (E) a business primarily used for an order
office, distribution center, mail order office or catalogue store; (F) any
business in which Tenant is engaged in intentionally deceptive or fraudulent
advertising or selling practices or any other act or business practice contrary
to honest retail practices; or (G) any businesses which are precluded by
building and zoning Laws, deed restrictions, or the like.
Section 7.12 Hazardous Waste. Tenant agrees that it will comply with all
environmental laws, whether local, state or federal, including, without
limitation, (a) Federal Clean Air Act, 42 U.S.C. ss.1857 et seq.; (b) Federal
Water Pollution Act, 33 U.S.C. ss.1151, et seq.; (c) Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.6901, et seq.; (d) Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.9601, et
esq.; (e) Federal Clean Water Act, 33 U.S.C. ss.1251, et seq.; (f) Toxic
Substances Control Act, 15 U.S.C. ss.2301, et seq.; and (g) Florida Air and
Water Pollution Act, Chapter 403, Florida Statutes, as each shall be amended
from time to time. Without limiting the foregoing, Tenant agrees that it will
(i) give written notice to Landlord at least seven (7) days in advance of any
production, generation, handling, storage, treatment, transportation, disposal,
release or removal of "Hazardous Waste" (as defined below) from or on the
Premises; (ii) not use or employ the Premises or any portion of the Land to
handle, transport, store, treat or dispose of any Hazardous Waste, whether or
not it was generated or produced on the Premises; and (iii) defend, indemnify
and hold Landlord harmless from and against any and all claim, damage,
liability, expense or cost of any kind whatsoever, including, but not limited
to, attorneys' fees and costs at all tribunal levels, which Landlord may suffer,
incur or pay resulting from or arising out of any act or omission of Tenant, or
Tenant's Agents, or any other person on the Premises under color of authority of
Tenant, effecting the handling, storage, treatment, transportation, disposal,
release or threat of release, or removal of Hazardous Waste from or on the
Premises or any portion of the Land.
The term "Hazardous Waste" shall include, without limitation, any toxic
waste, chemical pollutant, solid waste, combination of solid waste, or similar
environmental hazard, which, because of its quantity, concentration, or
physical, chemical or infectious characteristics may cause or significantly
contribute to (i) an increase in mortality, (ii) an irreversible or
incapacitating illness, or (iii) a substantial, present, or potential hazard to
human health or the environment, when improperly treated, stored, transported or
disposed, or otherwise managed, whether at such time of occurrence it shall be
deemed a violation of any Law.
The obligations of Tenant, as well as the foregoing indemnity, in
connection with this Section 7.12, shall survive the expiration or earlier
termination of this Lease, anything herein to the contrary notwithstanding.
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ARTICLE VIII
ACCESS AND ENTRY
Section 8.01 Right of Access. Landlord reserves the right to enter the
Premises at all reasonable times (and in emergencies at all times in order to:
(i) make such repairs, alterations or improvements to the Shopping Center as
Landlord considers necessary or desirable; (ii) have access to underfloor
facilities and access panels to mechanical shafts; (iii) check, calibrate,
adjust and balance controls and other parts of the heating, air conditioning,
ventilating and climate control systems; and (iv) install, maintain, repair or
replace pipes, ducts, conduits, vents and wires leading in, through, over or
under the Premises. Tenant shall not unduly obstruct any pipes, conduits or
mechanical or other electrical equipment so as to prevent reasonable access
thereto. Landlord further reserves unto itself the right to use all exterior
walls and roof area. Landlord shall exercise its rights under this Section 8.01,
to the extent possible in each circumstance, in a manner which minimizes
interference with Tenant's use and enjoyment of the Premises, including Tenant's
decorations or operations within the selling area of the Premises. If any
excavation is made on the Land, the person making such excavation may enter the
Premises or other portions of or the Shopping Center to support them by proper
foundations. Rent will not abate or be reduced while the maintenance repairs,
alterations, installations, replacements or improvements are being made.
Section 8.02 Right to Show Premises. Landlord and Landlord's Agents have
the right to enter the Premises at all reasonable times to show them to
prospective purchasers or mortgages and, during the last six (6) months of the
Term (or the last six (6) months of any renewal term if this Lease is renewed),
to show the Premises then to prospective tenants. During the period commencing
six (6) months prior to the expiration of the Lease Term (or any renewal
thereof), Landlord may place upon the exterior of the Premises or the inside
portion of the glass storefront of the Premises, "For Lease" or "For Rent" signs
of reasonable size, which signs shall not be removed, tampered with or hidden by
Tenant.
Section 8.03 Entry not Forfeiture. No entry into the Premises by Landlord
pursuant to a right granted by this Lease shall constitute a breach of any
covenant for quiet enjoyment, or (except where expressed by Landlord in writing)
shall constitute a retaking of possession by Landlord or forfeiture of Tenant's
rights hereunder.
ARTICLE IX
MAINTENANCE, REPAIRS AND ALTERATIONS
Section 9.01 Maintenance and Repairs by Landlord. Landlord covenants to
keep the following in good order, repair and condition: (i) the structure of the
Shopping Center, including all of the exterior walls, structural columns, beams,
joists, footings and stem walls and roofs; (ii) the mechanical, electrical, and
other base building systems (except such as may be installed by or be the
property of Tenant and except for the heating, ventilating and air conditioning
equipment installed for the Premises where such equipment is not part of a
shared or central system; and (iii) the entrances, sidewalks, corridors, parking
areas and other facilities from time to time comprising the Common Areas. The
cost of such maintenance and repairs shall be included in Operating Costs. So
long as Landlord is acting in good faith, Landlord shall not be responsible for
any damages caused to Tenant by reason of failure of any equipment or facilities
serving the hopping Center or delays in the performance of any work for which
Landlord is responsible pursuant to this Lease.
Section 9.02 Maintenance and Repairs by Tenant. Tenant shall, at its sole
cost, maintain the Premises, including all exterior plate glass, in good order,
condition and repair, exclusive of base building mechanical, plumbing and
electrical systems, all to a standard consistent with a first class shopping
center, with the exception only of those repairs which are the obligation of
Landlord set forth in Section 9.01 above, and subject further to the provisions
of Article XII of this Lease. All repair and maintenance
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performed by Tenant in the Premises shall be performed by contractors or workmen
designated or approved by Landlord. At the expiration or earlier termination of
the Term, Tenant shall surrender the Premises to Landlord in as good condition
and repair as Tenant is required to maintain the Premises throughout the Term.
Without limiting the generality of the foregoing, Tenant shall keep the interior
of the Premises (including, without limitation, walls, ceilings, utility meters,
HVAC systems, and pipes and conduits which are installed by Tenant or which
exclusively serve the Premises, whether inside or outside the Premises, together
with all electrical, plumbing and other replacements thereof as are from time to
time required by any governmental agency having jurisdiction.
Section 9.03 Approval of Tenant's Alterations. Tenant shall have the right
to make non-structural interior Alterations to the Premises which are not
visible from outside the Premises (excluding electrical, mechanical and HVAC
alterations) without obtaining Landlord's prior written approval. Tenant shall
submit to Landlord details of the proposed work including drawings and
specifications prepared by qualified architects or engineers conforming to good
engineering practice. All such Alterations shall be performed: (i) at the sole
cost of Tenant; (ii) by contractors and workmen approved in writing by Landlord;
(iii) in a good and workmanlike manner; (iv) in accordance with drawings and
specifications approved in writing by Landlord; (v) in accordance with all
applicable Laws; (vi) subject to the reasonable regulations, supervision,
control and inspection of Landlord; and (vii) subject to such indemnification
against liens and expenses as Landlord reasonably requires. Landlord's
reasonable cost of supervising all such work shall be paid by Tenant. If any
Alterations would affect the structure of the Shopping Center or any of the
electrical, plumbing, mechanical, heating, ventilating or air conditioning
systems or other base building systems, Landlord shall, at the option of
Landlord, but not the obligation of Landlord, perform such work at Tenant's
cost. In such cases, Tenant shall be required to pay Landlord upon demand, as
Additional Rent, an amount equal to the costs of Landlord making such repairs,
together with an administration fee equal to fifteen percent (15%) of such
costs.
Section 9.04 Repair Where Tenant at Fault. Notwithstanding any other
provisions of this Lease, if any part of the Shopping Center is damaged or
destroyed or requires repair, replacement or alteration as a result of the act
or omission of Tenant or Tenant's Agent, Landlord shall have the right to
perform, same and the cost of such repairs, replacement or alterations, plus an
administration fee equal to twenty percent (20%) of such cost, shall be paid by
Tenant upon demand by Landlord, as Additional Rent.
Section 9.05 Removal of Improvements and Fixtures. All Leasehold
Improvements, other than Trade Fixtures, shall immediately upon their placement
in the Premises become Landlord's property without compensation to Tenant.
Except as otherwise agreed by Landlord in writing, no Leasehold Improvements
shall be removed from the Premises by Tenant either during or at the expiration
or sooner termination of the Term except that: (a) Tenant may, during the Term,
in the usual course of its business, remove its Trade Fixtures, provided that
Tenant is not in default under this Lease; and (b) Tenant shall, at the
expiration or earlier termination of the Term, at its sole cost, remove such of
the Leasehold Improvements and Trade Fixtures in the Premises as Landlord shall
require to be removed and restore the Premises as Landlord shall require to be
removed and restore the Premises to Landlord's then current Shopping Center
standard to the extent required by Landlord. Tenant shall at its own expense
repair any damage caused to the Shopping Center by such removal. If Tenant does
not remove its Trade Fixtures shall, at the option of Landlord, become the
property of Landlord and may be removed from the Premises and sold or disposed
of by Landlord and may be removed from the Premises and sold or disposed of by
Landlord in such manner as it deems advisable without any accounting to Tenant.
Section 9.06 Liens. Tenant shall promptly pay for all materials supplied
and work done in respect of the Premises so as to ensure that no lien is
recorded against any portion of the Land or Shopping Center or against
Landlord's or Tenant's interest therein. If a lien is so recorded, Tenant shall
discharge it promptly by payment or bonding. If any such lien against the Land,
Shopping Center or Landlord's interest therein is recorded and not
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discharged by Tenant as above required within fifteen (15) days following
recording, Landlord shall have the right to remove such lien by bonding or
payment and the cost thereof shall be paid immediately from Tenant to Landlord.
Tenant has no right or authority to create any mechanics' or materialmen's lien
on the Land, Shopping Center or Landlord's interest therein and Tenant in
compliance with ss.713.10, Florida Statutes, shall provide written notice (and
provide written acknowledgment thereof to Landlord) to all suppliers of labor or
materials, as well as all contractors and subcontractors, as applicable, prior
to ordering such labor or materials or executing any agreement for construction
of Leasehold Improvements.
Section 9.07 Notice of Tenant. Tenant shall notify Landlord of any
accident, defect, damage or deficiency in any part of the Premises or the
Shopping Center, which comes to the attention of Tenant, its employees or
contractors, notwithstanding that Landlord may have no obligation in respect
thereof.
ARTICLE X
UTILITIES/HVAC
Section 10.01 Utilities. Tenant shall hook-up and use the utilities
hereinafter described and shall pay the charges therefore in accordance with (i)
the criteria set forth in Exhibit "C" attached hereto (ii) the Rules and
Regulations attached hereto as Exhibit "D," and (iii) public or governmental
agencies, if any, supplying or regulating such utilities. Tenant shall pay to
Landlord, or directly to the utility provider if requested by Landlord, for all
costs of providing any utility services, including, without limitation, gas,
electricity, water, cable television, and any other utilities applicable to the
Premises. All utilities which are not separately metered shall be included as
part of Tenant's Proportionate Share of Operating Costs. Separate sub-meters may
be installed for the Premises; provided, however, Tenant shall pay the cost of
any meters installed at the request of Landlord or Tenant to measure the usage
of utilities in the Premises. Landlord reserves the right to stop or reduce the
level of any or all of the utility services contemplated hereunder when
necessary by reason of (i) accident or emergency, (ii) mechanical breakdown,
(iii) requirements of law, (iv) any other cause beyond Landlord's reasonable
control, or (v) repairs, alterations, replacements or improvements, which, in
the judgment of Landlord, are desirable or necessary, until the cause of such
stoppage shall have been remedied. Tenant covenants that at no time shall it
overburden or exceed the capacity of the mains, feeders, ducts, conduits or
other facilities by which such utilities supply, distribute to or serve the
Premises. In such an event, Tenant shall be obligated to contract with the
successor entity supplying such utility service(s) whereby Tenant shall obtain
such utility service(s) directly.
Section 10.02 Heating, Ventilating and Air Conditioning. At Tenant's sole
expense, Tenant shall install, maintain and operate heating, ventilating and air
conditioning equipment installed solely for the Premises (not including such
equipment which is part of a shared or central system controlled by Landlord),
including the replacement thereof when necessary, in such manner as to maintain
comfortable conditions of temperature and humidity within the Premises, subject
only to Force Majeure. Landlord may stipulate reasonable conditions of
temperature and humidity from time to time to be maintained and Tenant shall
comply with such requirements and with all reasonable regulations of Landlord
pertaining to the maintenance and operation of such equipment. Tenant shall, if
required by Landlord, have such equipment and systems maintained by contractors,
under service contracts or otherwise, designated or approved by Landlord.
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ARTICLE XI
INSURANCE AND INDEMNITY
Section 11.01 Tenant's Insurance. Tenant shall, throughout the Term (and
any other period when Tenant is in possession of the Premises), maintain at its
sole cost the following insurance:
(A) All risks property insurance, naming Tenant and Landlord as insured
parties, containing a waiver of subrogation rights which Tenant's insurers may
have against Landlord and against those for whom Landlord is responsible under
Law, including, without limitation, its directors, officers, agents and
employees, and (except with respect to Tenant's chattels) incorporating a
standard New York mortgagee endorsement (without contribution). Such insurance
shall insure (i) property of every kind owned by Tenant, or for which Tenant is
legally liable, or installed by or on behalf of Tenant, located on or in the
Shopping Center, including, without limitation, Leasehold Improvements, in an
amount not less than the full replacement cost thereof (new), with such cost to
be adjusted no less than annually; and (ii) twelve months direct or indirect
loss of earnings including prevention of access to the Premises or to the
Shopping Center. Such policy or policies, except with respect to Tenant's
chattels and loss of earnings insurance, shall provide that loss thereon shall
be adjusted and payable to Landlord, with the proceeds to be held in trust to be
used for repair and replacement of the property so insured. Tenant shall insure
pursuant to this Section 11.01(A), unless waived by Landlord: all
stock-in-trade, furniture, fittings, installations, alterations, additions,
partitions, fixtures and anything in the nature of Leasehold Improvements, with
coverage against the perils of fire and such other risks as are, from time to
time, included in standard extended coverage endorsements, including, without
limitation, vandalism, malicious mischief, sprinkler leakage, earthquake, flood
and collapse and special broad form coverages in the locality in which the
Shopping Center is located.
(B) Comprehensive boiler and machinery insurance on a blanket repair and
replacement basis with limits for each accident in an amount of at least their
replacement cost of all Leasehold Improvements and all boilers, air conditioning
equipment, miscellaneous electrical apparatus, boilers and other pressure
vessels or systems, whether fired or unfired, owned, operated or installed by
Tenant or by others (except for Landlord) on behalf of Tenant in the Premises,
or relating to, or serving the Premises.
(C) Plate glass insurance, covering all plate glass in the Premises, shall
be obtained to insure against any lo9ss, damage or fracture, unless waived by
Landlord.
(D) Broad form comprehensive general liability insurance. Such policy shall
contain inclusive limits of not less than $2,000,000.00 per occurrence, provided
for cross liability, and include Landlord and Mortgagee as named insureds. The
policy shall also contain a personal injury endorsement covering claims arising
out of false arrest, false imprisonment, defamation of character, liable and
slander, wrongful eviction and invasion of privacy, without exclusion of
coverage for claims of personal injury brought by employees, agents or
contractors of an insured.
(E) Worker's compensation and employer's liability insurance in compliance
with applicable legal requirements.
(F) All risks tenants legal liability insurance for the actual cash value
of the Premises, including loss of use thereof.
(G) Comprehensive automobile liability insurance including contractual
liability, covering all licensed vehicles operated by or on behalf of Tenant,
which insurance shall have inclusive limits of not less than $2,000,000.00 per
occurrence.
(H) Any other form of insurance which Tenant, Landlord or Mortgagee, acting
reasonably, shall require from time to time, in form, in amounts and for risks
against which a prudent tenant would insure.
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All policies referred to above shall: (i) be taken out with insurers
licensed to do business in Florida and reasonably acceptable to Landlord; (ii)
issued by insurers with general policy holder's rating of not less than "A" or
better and financial size of XII or better, as rated in the most current and
available "Best's Key Rating Guide"; (iii) be in a form reasonably satisfactory
to Landlord; (iv) be non-contributing with, and shall apply only as primary and
not as excess to any other insurance available to Landlord or the Mortgagee; and
(v) contain an undertaking by the insurers to notify Landlord by certified mail
not less than thirty (30) days prior to any material change, cancellation or
termination. Certificates of Insurance on the Landlord's standard form or, if
required by the Mortgagee, copies of such insurance policies certified by
authorized officer of Tenant's insurer as being complete and current, shall be
delivered to Landlord promptly upon request. If (a) Tenant fails to take out or
to keep in force any insurance referred to in this Section 11.01, or should any
such insurance not be approved by either Landlord or the Mortgagee, and (b)
Tenant does not commence and continue to diligently cure such default within
forty-eight (48) hours after written notice by Landlord to Tenant specifying the
nature of such default, then Landlord has the right, without assuming any
obligation in connection therewith, top effect such insurance at the sole cost
of Tenant and all outlays by Landlord shall be Additional Rent, immediately
owing and payable by Tenant to Landlord, without prejudice to any other rights
or remedies of Landlord under this Lease.
Section 11.02 Increase in Insurance Premiums. Tenant shall not keep or use
in the Premises any article which may be prohibited by any fire or casualty
insurance policy in force form time to time covering the Premises or the
Shopping Center. Tenant will comply promptly with the requirements of any
insurer pertaining to the Premises or the Shopping Center. If (a) the conduct of
business in the Premises, or (b) any acts or omissions of Tenant in the Shopping
Center or any part thereof, shall cause or result in any increase in premiums
for the insurance carried from time to time by Landlord with respect to the
Shopping Center, whether or not Landlord allows such act or omission to
continue, Tenant shall pay any such increase in premium. In determining whether
increased premiums are caused by or result from the use or occupancy of the
Premises, a schedule issued by the organization computing the insurance rate on
the Shopping Center showing the various components of such rate, shall be
conclusive evidence of the several items and charges which make up such rate.
Section 11.03 Cancellation of Insurance. If any insurance policy upon the
Shopping Center or any part thereof shall be cancelled or shall be threatened by
the insured to be cancelled or the coverage thereunder reduced in any way by the
insurer by reason of the use of the Premises by Tenant or any assignee or
subtenant of Tenant, or by anyone permitted by Tenant to be upon the, Premises,
and if Tenant fails to remedy such condition with forty-eight (48) hours after
notice thereof by Landlord, Tenant shall be deemed to have committed a material
default of this Lease. In such an event, in addition to any other remedies
available to Landlord, Landlord may enter upon the Premises and remedy the
condition giving rise to such cancellation, threatened cancellation or
reduction, including removal of any offending article, and Tenant shall pay the
cost of such remedy to Landlord. Landlord shall not be liable for any damage or
injury caused to any property of Tenant or of others located on the Premises as
a result of any such entry.
Section 11.04 Loss or Damage. Landlord shall not be liable for any death or
injury due to, caused by, or arising out of any occurrence in, upon, or in any
fashion relating to the Shopping Center or damage to property of Tenant or of
others located on the Premises or for any loss of or damage to any property of
Tenant or others form any cause, WHETHER OR NOT ANY SUCH DEATH, INJURY, LOSS OR
DAMAGE RESULTS FROM THE NEGLIGENCE OF LANDLORD. Without limiting the generality
of the foregoing, Landlord shall not be liable for any injury or damage to
persons or property resulting form fire, explosion, shifting or collapsing soil
or sub-soil conditions, including sinkholes, falling plaster, falling ceiling
tile, falling fixtures, steam, gas, electricity, water, rain, flood, or leakage
from any part of the Shopping Center or adjacent structures, as well as roof,
windows or subsurface of any floor or ceiling of the Shopping Center or from the
street or any other place or by dampness or by any other cause whatsoever,
including ultra-hazardous activities. Landlord shall not be liable for any such
damage caused by other activities. Landlord shall not be liable for any such
damage caused by other tenants or persons in the Shopping Center or by occupants
of adjacent property thereto, or the public, or caused by construction or by any
private, public or
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quasi-public work. All property of Tenant kept or stored on the Premises shall
be so kept or stored at the risk of Tenant only. Tenant shall save all others,
including Landlord harmless from and against any claims or liability arising out
of any damage to all of the foregoing, including, without limitation, any
subrogation claims by Tenant's insurers. Tenant covenants with Landlord that
Tenant shall not bring or abet any claim or action based on any [illegible] for
which Tenant has above agreed Landlord shall not be responsible or liable.
Section 11.05 Landlord's Insurance. Landlord shall throughout the Term
carry:
(A) "all risks" insurance on the Shopping Center and the machinery and
equipment contained therein or servicing the Shopping Center and owned by
Landlord (excluding and property with respect to which Tenant and other tenants
are obliged to insure pursuant to Section 11.01 hereof or similar sections of
their respective leases);
(B) public liability and property damage insurance with respect to
Landlord's operations in the Shopping Center; and
(C) such other forms of insurance as Landlord or the Mortgagee reasonably
considers advisable. Such insurance shall be in such reasonable amounts and with
such reasonable deductions as would be carried by a prudent owner of a similar
shopping center, predicated on similar size, age and location. Notwithstanding
Landlord's covenant contained in this Section 11.05 and notwithstanding any
contribution by Tenant to the cost of insurance premiums provided herein, Tenant
acknowledges and agrees that: (i) Tenant is not relieved of any liability
arising from or contributed to by its negligence or its willful act or
omissions, (ii) no insurable interest is conferred upon Tenant under any
policies of insurance carried by Landlord, and (iii) Tenant has no right to
receive proceeds of any such insurance policies carried by Landlord.
Section 11.06 Indemnification of Landlord. Notwithstanding any other
provision of this Lease, Tenant agrees to indemnify Landlord and hold it
harmless from and against any and all loss (including any and all Rent payable
in respect to the Premises) claims, actions, damages, liability and expense of
any kind whatsoever (including attorneys' fees and costs at all tribunal level),
WHETHER OR NOT CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE O LANDLORD OR
LANDLORD'S AGENTS, arising from any occurrence in, upon or at the Premises, or
the occupancy, use or improvement by Tenant or Tenant's Agents of the Premises
or any part thereof. The foregoing indemnification is applicable whether
occasioned wholly or in part by any act or omission of Tenant, Tenant's Agents,
or by any other party permitted to be on the Premises by Tenant. Landlord may,
at its option and at Tenant's expense as part of the foregoing indemnity,
participate in our assume carriage of all or any part of any litigation or
settlement discussions relating to the foregoing or any other matter for which
Tenant is required to indemnify Landlord hereunder.
ARTICLE XII
DAMAGE AND DESTRUCTION
Section 12.01 Rent Abatement. If the Premises or the Shopping Center are
damaged or destroyed in whole or part by fire or any other occurrence, this
Lease shall continue in full force and effect and there shall be no abatement of
Rent except as specifically provided in this Article XII.
Section 12.02 Damage to Premises. If the Premises are at any time destroyed
or damaged as a result of fire or any other casualty required to be insured
against by Landlord pursuant to Section 11.05 of this Lease, or otherwise
insured against by Landlord, then, provided Landlord has received full insurance
proceeds covering the damage incurred and Landlord has obtained the required
governmental approvals and permits which may be necessary for the completion of
the repairs, the following provisions shall apply:
(A) If only a portion of the Premises are rendered untenantable Landlord
shall repair the Premises, limited to its obligations under Section 9.01 hereof,
and Minimum Rent shall abate proportionately to the portion of
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the Premises rendered untenantable from the date of destruction or damage until
Landlord's repairs have been substantially completed.
(B) If the Premises are rendered wholly untenantable, Landlord shall repair
the Premises only to the extent of its obligations pursuant to Section 9.01
hereof, and Minimum Rent shall abate entirely form the date of destruction or
damage to such date which is the earlier of (i) the date tenantable, or (ii)
thirty (30) days after Landlord's repairs have been substantially completed.
(C) If the Premises are not rendered untenantable in whole or in part,
Landlord shall perform such repairs to the Premises to the extent only of its
obligations under Section 9.01 of this Lease, but in such circumstances Minimum
Rent shall not terminate or abate.
(D) Upon being notified by Landlord that Landlord's repairs have been
substantially completed, Tenant shall diligently perform all repairs to the
Premises which are Tenant's responsibility under Section 9.02 hereof, and all
other work required to fully restore the Premises for use in Tenant's business,
in every case at Tenant's cost and without any contribution to such cost by
Landlord, whether or not Landlord has at any time made any contribution to the
cost of supply, installation or construction of Leasehold Improvements in the
Premises.
(E) Nothing in this Section 12.02 requires Landlord to rebuild the Premises
in the condition which existed before any such damage or destruction so long as
the Premises as rebuilt will have reasonably similar facilities to those in the
Premises prior to such damage or destruction, having regard, however, to the age
of the Shopping Center at such time.
Section 12.03 Termination for Damage to Premises. Notwithstanding Section
12.02 above, if the damage or destruction which has occurred to the Premises is
such that in the reasonable opinion of Landlord the Premises cannot be rebuilt
or made fit for the purposes of Tenant within two hundred forty (240) days of
the happening of the damage or destruction, Landlord may, at its option,
terminate this Lease on notice to Tenant given within thirty (30) days after
such damage or destruction and Tenant shall immediately deliver vacant
possession of the Premises in accordance with the terms of this Lease.
Section 12.04 Destruction of Shopping Center. Notwithstanding any other
provision of this Lease, if (i) twenty percent (20%) or more of the Gross
Rentable Area of the retail component of the Shopping Center is destroyed or
damaged by any cause, or (ii) portions of the Shopping Center which affect
access or services essential thereto are damaged or destroyed and, in the
reasonable opinion of Landlord, cannot reasonably be repaired within two hundred
forty (240) days after the occurrence of the damage or destruction, then
Landlord may, by notice to Tenant given within thirty (30) days of such damage
or destruction, terminate this Lease. In such event, neither Landlord nor Tenant
shall be bound to repair and Tenant shall surrender the premises to Landlord
within thirty (30) days after delivery of its notice of termination. Rent shall
be apportioned and paid promptly to Landlord through the date on which Tenant
delivers vacant possession of the Premises, subject to any abatement to which
Tenant may be entitled pursuant to Section 12.02 above. If Landlord is entitled
to, but does not elect to, terminate this Lease, Landlord shall, following such
damage or destruction, diligently repair that part of the Shopping Center
damaged or destroyed, but only to the extent of Landlord's obligations pursuant
to the terms of this Lease and the various other leases for other rentable space
in the Shopping Center (as to such other damaged rentable space), excluding any
tenant's responsibilities with respect to such repair. If Landlord elects to
repair the Shopping Center, Landlord may do so in accordance with plans and
specifications which may be different from those used in the original
construction of the Shopping Center.
Section 12.05 Architect's Certificate. The certificate of the Architect
shall bind the parties as to: (a) the percentage of the Gross Rentable Area of
the retail component of the Shopping Center damaged or destroyed; (b) whether or
not the Premises are rendered partially or wholly untenantable and the
percentage of the Gross Rentable Area of the Premises rendered
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untenantable; (c) the date upon which either Landlord's or Tenant's
reconstruction or repair is substantially completed; and (d) the date when the
Premises are rendered tenantable.
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND TRANSFERS
Section 13.01 Assignment, Subleases and Transfers. Tenant shall not enter
into, consent to or permit any Transfer without the prior written consent of
Landlord in each instance, which consent shall not be unreasonably withheld, but
shall be subject to Landlord's rights under the following Sections 13.02 and
13.03. It shall not be considered unreasonable for Landlord to take into account
the following factors (and other reasonable factors) in deciding whether to
grant or withhold its consent:
(A) Whether such Transfer (or the potential consequences thereof) might
result in violation or breach of any covenants or restrictions made or granted
by Landlord to other tenants or occupants or prospective tenants or occupants of
the Shopping Center.
(B) Whether, in Landlord's opinion, the financial background, business
history and capability of the proposed Transferee is satisfactory, in this
regard, it is agreed that the Transferee (i) must be an experienced and
successful owner/operator of a business of the same type and quality and
respecting the same type of merchandise which is required to be operated in the
Premises pursuant to this Lease, (ii) has agreed to operate its business in the
Premises under a name which is as well known as and of equal or better
reputation than the name under which Tenant is required to conduct its business,
in the Premises, and (iii) has demonstrated to Landlord's satisfaction that it
is likely to attract as large a number of members of the public to the Shopping
Center as Tenant and to generate as high a volume of sales from its business
being conducted in the Premises as by Tenant.
(C) Whether the transfer is to an existing tenant of Landlord.
(D) Whether the conduct of business in the Premises by the Transferee would
adversely affect the tenant-mix or merchandising balance within the Shopping
Center.
Consent by Landlord to any Transfer, if granted, shall not constitute a waiver
of the necessity for such consent to any subsequent Transfer. This prohibition
against Transfer shall include a prohibition against any Transfer by operation
of law and no Transfer shall take place by reason of the failure of Landlord to
give notice to Tenant within thirty (30) days as required by the following
Section 13.02.
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Section 13.03 Conditions of Transfer.
(A) If there is a permitted Transfer, Landlord may collect Rent from the
Transferee and apply the net amount collected to the Rent required to be paid
pursuant to this Lease, but no acceptance by Landlord of any payments by a
Transferee shall be deemed a waiver of any provisions hereof regarding Tenant.
Any consent by Landlord shall be subject to Tenant and Transferee executing an
agreement with Landlord agreeing: (i) that the Transferee will be bound by all
of the terms of this Lease as if such Transferee had originally executed this
Lease as tenant, and (ii) to amend this Lease to incorporate such terms,
covenants and conditions as are necessary so that this Lease will be in
accordance with Landlord's standard form of lease in use for the Shopping Center
at the time of the Transfer, and so as to incorporate therein any conditions
imposed by Landlord in its consent to such Transfer and such further conditions
as may be required by the provisions of this Section 13.03.
(B) Notwithstanding any Transfer permitted or consented to by Landlord, or
acceptance of Rent from the Transferee, Tenant (and Guarantor if applicable)
shall be jointly and severally liable with the Transferee under this Lease and
shall not be released from performing any of the terms of this Lease.
(C) Landlord's consent to any Transfer shall be subject to the condition
that the minimum Rent payable by Tenant or any Transferee from and after the
effective date of any Transfer will be increased to be equal to the mean average
of the aggregate of Minimum Rent (including CPI adjustments) and Percentage Rent
paid or payable by Tenant for the two full Lease Years immediately preceding the
effective date of the Transfer or, if less than two (2) Lease Years have elapsed
prior to such effective date or there has been an abatement of Rent during such
period, such Minimum Rent shall be increased to equal the product obtained by
multiplying 365 times the mean average daily Minimum Rent (including CPI
adjustments) and Percentage Rent paid or payable during the entire period of the
Term preceding the effective date of the Transfer (excluding from such
calculations all days during which there has been an abatement of Rent).
(D) Landlord's consent to any Transfer shall be subject to the further
condition that if the Minimum Rent, Additional Rent and Percentage Rent pursuant
to such Transfer exceeds the Minimum Rent, Additional Rent and Percentage Rent
payable under this Lease, the amount of such excess shall be paid to Landlord.
If, pursuant to a permitted Transfer, Tenant receives from the Transferee,
either directly or indirectly, any consideration other than Minimum Rent,
Additional Rent and Percentage Rent for such Transfer, either in the form of
cash, goods or services Tenant shall, upon receipt thereof, pay to Landlord an
amount equivalent to such consideration. Tenant and the Transferee shall execute
any agreement required by Landlord to effect the foregoing provisions.
(E) Notwithstanding the effective date of any permitted Transfer as between
Tenant and the Transferee, all Minimum Rent, Percentage Rent and Additional Rent
for the month in which such effective date occurs shall be paid by Tenant so
that Landlord will not be required to accept partial payments of Minimum Rent,
Percentage Rent and Additional Rent for such month form either Tenant or
Transferee.
(F) Any document evidencing any Transfer permitted by Landlord, or setting
out any terms applicable to such Transfer or the rights and obligations of
Tenant or Transferee thereunder, shall be prepared by Landlord or its attorneys
and all legal costs with respect thereto shall be paid by Tenant.
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(G) Landlord, at its option, shall have the right to collect an
administrative fee of Three Hundred Dollars ($300.00) from Tenant at the time of
application for any Transfer pursuant to this Section 13.03. In addition,
Landlord shall have the right to be reimbursed an amount equal to its reasonable
costs incurred for attorneys' and other professional fees and costs paid.
Tenant's payment to Landlord of all of the foregoing fees and costs shall be a
condition precedent to Landlord's obligation to approve of any Transfer
hereunder.
Section 13.04 Change of Control. Tenant shall make available to Landlord or
its representatives all of its corporate, partnership, trust, or other similar
records, as the case may be, for inspection at all reasonable times, in order to
ascertain whether there has been any change of control of Tenant, as described
in Section 2.45 of this Lease.
Section 13.05 No Advertisement. Tenant shall not advertise the whole or any
part of the Premises for the purposes of a Transfer and shall not permit any
broker or other person to do so unless the complete text and format of any such
advertisement is first approved in writing by Landlord. No such advertisement
shall contain any reference to the rental rate of the Premises.
Section 13.06 Assignment by Landlord. Landlord shall have the unrestricted
right sell, lease, convey, encumber, or otherwise dispose of the Shopping Center
or any part thereof and this Lease or any interest of Landlord in this Lease. To
the extent that the obligations of Landlord under this Lease, Landlord shall
thereupon and without further agreement be released of all liability under this
Lease.
ARTICLE XIV
DEFAULT
Section 14.01 Defaults. A default by Tenant shall be deemed to have
occurred hereunder, if and whenever: (A) any Minimum Rent or Percentage Rent is
in arrears whether or not any notice or demand for payment has been made by
Landlord; (B) any Additional Rent is in arrears and is not paid within five (5)
days after written demand by Landlord; (C) Tenant has breached any of its
obligations in this Lease (other than the payment of Rent) and Tenant fails to
remedy such breach within fifteen (15) days (or such shorter period as may be
provided in this Lease), or if such breach cannot reasonably be remedied within
fifteen days (or such shorter period), then if Tenant fails to immediately
commence to remedy and thereafter proceed diligently to remedy such breach, in
each case after notice in writing from Landlord; (D) Tenant or any Guarantor
becomes bankrupt, insolvent (i.e., unable to pay its debts as they arise, or
with liabilities greater than assets), or takes the benefit of any statute for
bankrupt or insolvent debtors or makes any proposal assignment or arrangement
with its creditors, or any steps are taken or proceedings commenced by any
person for the dissolution, winding-up or other termination of Tenant's
existence or the liquidation of its assets; (E) a trustee, receiver, or like
person is appointed with respect to the business or assets of Tenant or any
Guarantor; (F) Tenant makes a sale in bulk of all or a substantial portion of
its assets other than in conjunction with a Transfer approved by Landlord; (G)
this Lease or any of Tenant's assets are taken under a writ of execution; (H)
Tenant proposes to make a Transfer other than in compliance with the provisions
of this Lease; (I) Tenant abandons or attempts to abandon the Premises or
disposes of its goods so that there would not after such disposal be sufficient
goods of Tenant on the Premises subject to distress to satisfy Rent for at least
three (3) months, or the Premises become vacant, unoccupied or not open for
business during the required hours pursuant to Section 7.02 hereof, for a period
of five (5) consecutive days or more without the consent of Landlord; (J) any of
Landlord's policies of insurance with respect to the Shopping Center are
actually or threatened to be cancelled or adversely changed as a result of any
use or occupancy of the Premises; or (K) any obligations of Tenant or any
Guarantor owing to Landlord, whether or not related to this Lease and however
arising (whether by operation of Law, contract, acquired, or otherwise) shall be
in default.
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Section 14.02 Remedies. In the event of any default hereunder by Tenant,
then without prejudice to any other rights which it has pursuant to this Lease
or at law or in equity, Landlord shall have the following rights and remedies,
some or all of which may be exercised by Landlord:
(A) Landlord may terminate this Lease by notice to Tenant and retake
possession of the Premises for Landlord's account.
(B) Landlord may enter the Premises as agent of Tenant to take possession
of any property of Tenant on the Premises, to store such property at the expense
and risk of Tenant or to sell or otherwise dispose of such property in such
manner as Landlord may see fit without notice to Tenant, which shall be credited
towards any Rent owed Landlord pursuant hereunder.
(C) Landlord may re-take possession of the Premises for the account of
Tenant and recover from Tenant all of Landlord's retaking of possession. If this
remedy is elected by Landlord, Landlord's damages shall be the value of the
Premises for the remaining Term of this Lease after Tenant's default. For the
purposes computing the "value" of the unexpired Lease term each Lease Year of
the unexpired term shall be deemed to increase ten percent (10%) per year. The
amount so calculated shall be added to it all sums owing to Landlord which have
accrued prior to Tenant's default, plus all of Landlord's costs, direct and
consequential, of re-taking possession, preparing the Premises for re-rental,
and re-renting the Premises. If the Premises are not re-rented at the time
Landlord brings its action for damages under this provision, or if the term of
the re-rental is for a period less than the remaining Term of this Lease and
therefore additional re-rentals may be required to fill the remaining Term, then
in either case Landlord shall make a reasonable estimate of such costs and such
estimate shall be binding on the parties. The costs referred to above shall
include, but not be limited to legal fees, cleaning, painting, re-fixturing,
partitioning, repairs, advertising, lease commissions and an administrative fee
to Landlord equal to twenty percent (20%) of all the costs referred to in this
Subsection 14.02(C).
(D) Landlord may remedy or attempt to remedy any default of Tenant under
this Lease for the account of Tenant and to enter upon the Premises for such
purposes. No notice of Landlord's intention to perform such covenants need be
given Tenant unless expressly required by this Lease. Landlord shall not be
liable to Tenant for any loss or damage caused by acts of Landlord in remedying
or attempting to remedy such default and Tenant shall pay to Landlord all
expenses incurred by Landlord in connection with remedying or attempting to
remedy such default.
(E) Landlord may recover from Tenant all damages and expenses incurred by
Landlord as a result of any breach by Tenant.
(F) Landlord may accelerate all Rent for the entire Term.
Section 14.03 Costs. Tenant shall pay to Landlord on demand all costs
incurred by Landlord, including attorneys' fees and costs at all tribunal
levels, incurred by Landlord in enforcing any of the obligations of Tenant under
this Lease.
Section 14.04 Allocation of Payments. Landlord may at its option apply any
sums received from Tenant against any amounts due and payable by Tenant under
this Lease in such manner as Landlord sees fit and regardless of the endorsement
placed on the check by which payment is made.
ARTICLE XV
ATTORNMENT AND SUBORDINATION
Section 15.01 Estoppel Certificate. At any time and from time to time, upon
not less than ten (10) days prior notice by Landlord, the "Superior Lessor," or
the "Superior Mortgagee" (as both are hereinafter defined) to Tenant, Tenant
shall comply with, execute, acknowledge and deliver in writing addressed to such
party as designated by Landlord or the Superior Lessor or
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the Superior Mortgagee, as the case may be (hereinafter collectively called the
"Requesting Party"), certifying to the following: (i) that this Lease is
unmodified and in full force and effect, or if there have been modifications,
that the Lease is in full force and effect, as modified, and stating the
modifications; (ii) whether the Term has commenced and Minimum Rent, Percentage
Rent and Additional Rent have become payable hereunder and, if so, the dates to
which they have been paid; (iii) whether or not Landlord is in default in
performance of any of the terms of this Lease, and if so, specifying each such
default of which the signor may have knowledge; (iv) whether Tenant has accepted
possession of the Premises; (v) whether Tenant has made any claim against
Landlord under this Lease and, if so, the nature thereof and the dollar amount,
if any, of such claim; (vi) whether there are any offsets or defenses existing
against enforcement of any of the terms of this Lease upon the part of Tenant to
be performed, and, if so, specifying same; (vii) either the Tenant does not know
of any default in the performance of any provisions of this Lease or specifying
any default of which Tenant may have knowledge and stating what action is taken
or proposes to take with respect thereto; (viii) that, to the best knowledge of
Tenant, there are no proceedings pending or threatened against Tenant before or
by any court or administrative agency which, if adversely decided, would
materially and adversely effect the financial condition or operations of Tenant,
or, if any such proceedings are pending or threatened to the best knowledge of
Tenant, specifying and describing same; and (ix) such further information with
respect to the Lease or the Premises as the Requesting Party may reasonably
request or require, it being intended that any such statement delivered pursuant
to this Section 15.01 may be relied upon by any prospective purchaser of the
Shopping Center or any part thereof or the interest of Landlord in any part
thereof, by any prospective Superior Mortgagee or any prospective Superior
Lessor, or by any prospective assignees of such parties. The failure of Tenant
to provide a completed statement in accordance with the provisions of this
Section 15.01 pursuant to Article XIV of this Lease.
Section 15.02 Subordination. This Lease and all rights of Tenant hereunder
are and shall be subject and subordinate in all respects to (i) all present and
future ground leases, operating leases, superior leases, overriding leases and
underlying leases and grants of term of the Land and buildings constructed
thereon, including the Shopping Center, or any portion thereof (hereinafter
collectively referred to as a "Superior Lease," and (ii) all mortgages, deeds of
trust, deeds to secure debt and building loan agreements, including leasehold
mortgages and spreader and consolidation agreements, which may now or hereafter
effect the Land and buildings constructed thereon, including the Shopping
Center, or any portion thereof, including all future advances made thereunder
(hereinafter collectively referred to as the "Superior Mortgage") whether or not
the Superior Mortgage covers any other lands or buildings. All references
hereunder to Superior Lessor shall refer to the lessor at the time of execution
of a Superior Lease, while each reference to Superior Mortgagee shall mean the
holder at any time of a Superior Mortgage, as well as each of their respective
successors and assigns. The provisions of this Section 15.02 shall be
self-operative and no further instrument of subordination shall be required. If
any Requesting Party shall seek confirmation of such subordination, Tenant shall
promptly execute and deliver, at its own cost and expense, an instrument, in
recordable form, to evidence such subordination; if Tenant fails to execute,
acknowledge or deliver any such instrument within ten (10) days after request
therefor, Tenant hereby irrevocably constitutes and appoints Landlord as
Tenant's attorney-in-fact, coupled with an interest, to execute, acknowledge and
deliver any such instruments for and on behalf of Tenant. Tenant shall not
cause, permit or suffer anything to be done which would constitute a default
under any Superior Mortgage or Superior Lease or cause Superior Lease to be
terminated or forfeited by virtue of any rights of termination or forfeiture
reserved or vested in the Superior Lessor.
Section 15.03 Attornment. If, at any time prior to the termination of this
Lease, the Superior Lessor or Superior Mortgagee, or their successors or
assigns, who acquire the interest of Landlord under this Lease through
foreclosure action or a deed-in-lieu thereof, whereby the Superior Lessor or
Superior Mortgagee succeeds to the rights of Landlord under this Lease through
possession or foreclosure or delivery of a new lease or deed or otherwise,
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Tenant agrees, at the election and upon request of any such party (hereinafter
called the "Successor Landlord"), to attorn fully and completely from time to
time, and to recognize any such Successor Landlord as Tenant's landlord under
this Lease upon the executory terms of this Lease; provided, however, such
Successor Landlord shall agree in writing to accept Tenant's attornment. The
foregoing provisions of this Section 15.03 shall inure to the benefit of any
such Successor Landlord, shall apply notwithstanding that, as a matter of law,
this Lease may terminate upon the termination of a Superior Lease, shall be
self-operative upon any such demand, and no further instrument shall be required
to give effect to said provisions. Tenant, however, upon demand of any such
Successor Landlord, agrees to execute any instrument to evidence and confirm the
foregoing provisions of this Section 15.03, satisfactory to any such Successor
Landlord, acknowledging such attornment and setting forth the terms and
conditions of its tenancy and Tenant hereby constitutes and appoints Landlord
attorney-in-fact for Tenant to execute any such instrument for and on behalf of
Tenant, such appointment being coupled with an interest.
ARTICLE XVI
CONTROL OF SHOPPING CENTER BY LANDLORD
Section 16.01 Use and Maintenance of Common Areas. Tenant and those doing
business with Tenant for purposes associated with Tenant's business on the
Premises, shall have a non-exclusive right to use the Common Areas for their
intended purposes during normal business hours in common with others entitled
thereto and subject to any rules and regulations imposed by Landlord. Landlord
shall keep the Common Areas in good repair and condition and shall clean the
Common Areas when necessary. Tenant acknowledges that its non-exclusive right to
use any parking facilities forming part of the Shopping Center shall be subject
to Section 6.03 hereof, as well as the Rules and Regulations as imposed by
Landlord from time to time. Tenant acknowledges that all Common Areas shall at
all times be under the exclusive control and management of Landlord.
Section 16.02 Alterations by Landlord. Landlord may (a) alter, add to,
subtract from, construct improvements on, re-arrange, and construct additional
facilities in, adjoining or proximate to the Shopping Center; (b) relocate the
facilities and improvements in or comprising the Shopping Center or erected on
the Land; (c) do such things on or in the Shopping Center as required to comply
with any laws, by-laws, regulations, orders or directives affecting the Land or
any part of the Shopping Center; and (d) do such other things on or in the
Shopping Center as Landlord, in the use of good business judgment, determines to
be advisable, provided that notwithstanding anything contained in this Section
16.02, access to the Premises shall be available at all times. Landlord shall
not be in breach of its covenants for quiet enjoyment or liable for any loss,
costs or damages, whether direct or indirect, incurred by Tenant due to any of
the foregoing.
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Section 16.04 Competition. In recognition of the fact that this Lease
provides for Percentage Rent based on gross revenue generated by Tenant in or
from the Premises, Tenant agrees, to the extent lawful, that neither Tenant nor
any affiliate or subsidiary of Tenant, directly or indirectly, shall operate,
manage or have any interest in any other competing store or business for the
sale of merchandise, at retail, including a department or concession in another
store, within a five (5) mile radius from any point on the perimeter of the
Shopping Center. If Tenant should violate this Section 16.04, Landlord, at its
option (in addition to Landlord's other remedies), may include an amount equal
to fifty percent (50%) of the gross sales of such other competing store or
business in the Gross Revenue transacted in the Premises for the purpose of
computing Percentage Rent due hereunder, as though those said sales had actually
been made from the Premises. Tenant shall comply with the provisions of Section
5.05 hereof pertaining to such other competing store or business and Landlord
shall have all of the audit rights contained in Subsection 5.05 (E) hereof as if
the gross sales of such competing stores or business were deemed to be Gross
Revenue hereunder. Excluded from this covenant shall be any such business
existing as of the Commencement Date hereof; provided, however, such competing
business shall not increase the floor area of such store or facility and all
advertisements containing the address of other stores of Tenant shall also
contain an equally conspicuous disclosure of the address of Tenant's location at
the Premises in the Shopping Center.
Section 16.05 Landlord's Services. Landlord shall have the right, but not
the obligation, to provide certain services to the Shopping Center, or contract
with third parties for purposes of providing such services, for which, if
provided, the costs thereof shall be charged to Tenant on a monthly basis as
Additional Rent. Landlord's Services may include garbage and refuse removal. In
the event Landlord elects to furnish or designate services for the removal of
garbage and other refuse, Tenant shall use and pay for the service furnished or
designated by Landlord; provided, however, Tenant shall not be obligated to pay
more for such garbage and refuse removal service designated or furnished by
Landlord than the prevailing competitive rates charged by reputable independent
trash removal contractors for the same service on a direct and individual basis.
If furnished or billed by Landlord, Tenant shall pay for such service monthly as
Additional Rent. In lieu of foregoing provisions of this Section 16.05,
Landlord, at its option, may purchase or lease a garbage compactor for the use
of tenants and occupants of the Shopping Center. If Landlord purchases or leases
a garbage compactor for the use of tenants in the Shopping Center, Tenant agrees
to use such compactor for the disposal of its garbage and refuse. Tenant shall
pay monthly, in advance, as Additional Rent, the charges therefor based upon
Landlord's reasonable estimate of the amount of the refuse and garbage generated
and the frequency of use by Tenant. Tenant shall cause its garbage and refuse to
be taken to such compactor, and it is understood and agreed that Tenant's
monthly charge will not include pick-up service. The aforementioned monthly
charge to Tenant as estimated by Landlord shall be adjusted on an annual basis.
ARTICLE XVII
PROMOTION OF THE SHOPPING CENTER
Section 17.01 Promotional Fund. Landlord may, at its option and at its sole
discretion, establish a promotional fund (the "Promotional Fund") for the
Shopping Center. If applicable, Tenant agrees to pay to Landlord the sum
specified in Article I, Paragraph 5 hereof, in advance, on the first day of each
calendar month during the Term (prorated as to any partial month), subject to
adjustment as provided below (the "Promotional Charge"). The Promotional Charge
shall be a contribution by Tenant towards advertising,
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promotion, and public relations expenses regarding the Shopping Center. The
Promotional Charge payable by Tenant to Landlord will be subject to annual
increase by a percentage equal to the percentage increase of the CPI from the
three months prior to the date of execution hereof to the month three months
prior to the annual increase date for the Promotional Charge. However,
notwithstanding any decrease in the CPI, the Promotional Charge payable by
Tenant to Landlord shall at any time be reduced.
Section 17.04. Landlord's Contribution. Landlord agrees to contribute an
amount not less than twenty percent (20%) of the total amount of Promotional
Charges paid to the Promotional Fund by the tenants of the Shopping Center.
However, Landlord, at its option, may elect to contribute all of or part of the
services of either or both a marketing director and/or secretary and their
respective offices, in lieu of such cash contribution. Whether the promotional
services are furnished pursuant to the Promotional Fund or a "Merchants
Association" (as described in Section 17.05 below), the marketing director an/or
secretary shall be under the exclusive control and supervision of Landlord and
Landlord shall have the sole right and exclusive authority to employ and
discharge such personnel.
ARTICLE XVIII
CONDEMNATION
Section 18.01 Total Taking. If the whole of the Premises shall be taken by
any public authority under the power of eminent domain or sold to public
authority under threat or in lieu of such taking, the Term shall cease as of the
day possession or title shall be taken by such public authority, whichever is
earlier ("Taking Date"), whereupon the Rent shall be paid up to the Taking Date
with a proportionate refund by Landlord of any Rent paid for a period subsequent
to the Taking Date.
Section 18.02. Partial Taking.
(A) If less than the whole but more than twenty-five percent (25%) of the
Premises, or more than fifty percent (50%) of the Gross Rentable Area of the
retail component of the Shopping Center shall be taken under eminent domain, or
sole to public authority under threat or in lieu of such a taking, Tenant
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shall have the right upon notice to Landlord within ten (10) days after the
Taking Date either to terminate this Lease as of the Taking Date, or, subject to
Landlord's right of termination as set forth in Subsection 18.02(C) below, to
continue in possession of the remainder of the Premises. In the event Tenant
elects to remain in possession, all of the terms of this Lease shall continue in
effect, except that as of the Taking Date, Minimum Rent and other charges
payable by Tenant shall be reduced in proportion to the floor area of the
Premises taken. Landlord shall, at its cost, but only to the extent of net
proceeds of condemnation received by Landlord, make all necessary repairs or
alterations within the scope of Landlord's Work and Landlord's duties under
Section 9.01 hereof, so as to constitute the remaining Premises a complete
architectural unit, and Tenant, at Tenant's cost, shall be obligated to perform
all of Tenant's Work and Tenant's duties under Section 9.02 and otherwise
restore the Premises and Tenant's Trade Fixtures.
(B) If twenty-five percent (25%) or less of the Premises shall be so taken,
the Term shall cease only as to the part so taken as of the Taking Date, and
Tenant shall pay Rent and other charges up to the Taking Date, with appropriate
credit by Landlord (toward the next installment of Rent due from credit by
Landlord toward the next installment of Rent due from Tenant) of any Rent or
charges paid for a period subsequent to the Taking Date. Minimum Rent and other
charges payable to Landlord shall be reduced in proportion to the amount of the
Premises taken. Landlord shall, at its expense, but only to the extent of next
proceeds of condemnation received by Landlord, make all necessary repairs or
alterations within the scope of Landlord's Work so as to constitute the
remaining Premises a complete architectural unit, and Tenant, at Tenant's
expense, shall be obligated to perform all of Tenant's Work and otherwise
restore the Premises and Tenant's trade fixtures.
(C) If more than twenty percent (20%) of (i) the area of that portion of
Common Areas serving the retail component of the Shopping Center, (ii) the Gross
Rentable Area of the retail component of the Shopping Center, or (iii) the
Premises shall be taken under power of eminent domain, or sold to public
authority under the threat or in lieu of such a taking, Landlord may, by notice
to Tenant delivered on or before the thirtieth (30th) day following the Taking
Date, terminate this Lease as of the Taking Date. Rent and other charges shall
be paid up to the Taking Date, with an appropriate refund by Landlord or any
Rent paid for a period subsequent thereto.
Section 18.03 Award. All compensation awarded or paid upon a total or
partial taking of the Premises, Common Areas or Shopping Center, including the
value of the leasehold estate created hereby, shall belong to and be the
property of Landlord without any participation by Tenant; Tenant shall have no
claim to any such award based on Tenant's leasehold interest. However, nothing
contained herein shall be construed to preclude Tenant, at its cost, from
independently prosecuting any claim directly against the condemning authority in
such condemnation proceeding for damage to, or cost of removal of, stock, trade
fixtures, furniture and other personal property belonging to Tenant; provided,
however, that no such claim shall diminish or otherwise adversely affect
Landlord's award or the award of any Mortgagee.
ARTICLE XIX
GENERAL PROVISIONS
Section 19.01 Quiet Enjoyment. Tenant, upon paying the Rent, charges and
other sums reserved hereunder, and performing and observing all of the other
terms, covenants and conditions of this Lease set forth herein, shall peaceably
and quietly have, hold and enjoy the Premises during the Term without hindrance
by Landlord or any other person lawfully claiming through or under Landlord,
subject, however, to the terms of this Lease, and of any Superior Lease or
Superior Mortgage, if applicable, and such other agreements and encumbrances to
which this Lease may be subordinate. This covenant shall be construed as a
covenant running with the Land and shall not be construed as a personal covenant
or obligation of Landlord.
Section 19.02 Holding Over. If Tenant remains in possession of the Premises
after the end of the Term hereof, there shall be no tacit renewal of this Lease,
and Tenant shall be deemed to be a tenant at sufferance. In such event, Tenant
shall pay to Landlord, for each day Tenant remains in possession of the Premises
without the written consent of Landlord, an amount equal to
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the Rent for the last twelve (12) months of the Term, divided by Three Hundred
Sixty-Five (365), and then multiplied by two (2). Such amount shall accrue and
be due and payable on a daily basis commencing on the first day following the
end of the Term and terminating on the data that either (i) possession of the
Premises is restored to Landlord, or (ii) a new lease is entered into between
Landlord and Tenant. All other obligations of Tenant under this Lease, other
than the payment of Rent (which is payable in accordance with the foregoing
calculation) shall be applicable to Tenant during the period the Tenant is a
tenant at sufferance.
Section 19.03 Waiver. If either Landlord or Tenant excuses or condones any
default by the other of any obligation under this Lease, this shall not be a
waiver of such obligation in respect of any continuing or subsequent default and
no such waiver shall be implied.
Section 19.04 Recording. Neither Tenant nor anyone claming under Tenant
shall record this Lease or any memorandum hereof in any public records without
the prior written consent of Landlord.
Section 19.05 Notices. Any notice, consent or other instrument required or
permitted to be given under this Lease shall be in writing and shall be
delivered in person, or sent by certified mail, return receipt requested,
postage prepaid, or by Federal Express or similar overnight courier service,
addressed (a) if to Landlord, at the address set forth in Article I of this
Lease; and (b) if to Tenant, at the Premises or, prior to Tenant's occupancy of
the Premises, at the address set forth in Article I of this Lease. Any such
notice or other instruments shall be deemed to have been given and received on
the day upon which personal delivery is made or, if mailed, then forty-eight
(48) hours following the date of mailing. Either party may give notice to the
other of any change of address and after the giving of such notice, the address
therein specified is deemed to be the address of such party for the giving of
notices. If postal service is interrupted or substantially delayed, all notices
or other instruments shall be delivered in person, or by Federal Express, or
similar overnight courier service.
Section 19.06 Liability of Landlord. Tenant shall look solely to Landlord's
estate and interest in the Shopping Center and the rentals therefrom for the
satisfaction of any right of Tenant for the collection of a judgment or other
judicial process or arbitration award requiring the payment of money by
Landlord, subject, however, to any prior rights of any Mortgagee, and no other
property or assets of Landlord, Landlord's Agents, including all of Landlord's
general partners, incorporators, shareholders, officers, directors, or other
principals, disclosed or otherwise, or affiliates, shall be subject to levy,
lien, execution, attachment or other enforcement procedure for the satisfaction
of Tenant's rights and remedies under or with respect to this Lease, the
relationship of Landlord and Tenant hereunder, or under Law, including Tenant's
use and occupancy of the Premises, or any liability of Landlord to Tenant. The
limitation of Landlord's liability under this Section 19.06 shall be absolute
and without exception, and shall survive the expiration or earlier termination
of this Lease.
Section 19.07 Waiver of Jury Trial. TENANT HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS, CROSS-CLAIMS, OR
THIRD PARTY CLAIMS, ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS LEASE, OR
THE TRANSACTION CONTEMPLATED HEREIN. TENANT HEREBY CERTIFIES THAT NO
RESPRESENTATIVE OR AGENT OF LANDLORD OR ITS COUNSEL HAS REPRESENTED, EXPRESSELY
OR OTHERWISE, THAT LANDLORD WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION, TENANT ACKNOWLEDGES THAT
LANDLORD HAS BEEN INDUCED TO ENTER INTO THIS LEASE BY, INTER ALIA, THE
PROVISIONS OF SECTION 19.07.
Section 19.00 Radon Gas. In compliance with ss.404.056, Florida Statutes,
Tenant is hereby made aware of the following: RADON GAS IS A NATURALLY OCCURRING
RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT
QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME.
LEVELS OF RADON THAT EXCEED FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN
BUILDINGS IN FLORIDA. ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING
MAY BE OBTAINED FROM YOUR COUNTY HEALTH UNIT.
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Section 19.09 Successors. The rights and liabilities created by this Lease
extend to and bind the successors and assigns of Landlord and the heirs,
executors, administrators and permitted successors and assigned of Tenant. No
rights, however shall inure to the benefit of any Transferee unless the
provisions of Article XIII are complied with.
Section 19.10 Join and Several Liability. If there is at any time more than
one Tenant or more than one person constituting Tenant, their covenants shall be
considered to be joint and several and shall apply to each and every one of
them.
Section 19.11 Captions and Section Numbers. The captions, section numbers,
article numbers and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way affect the substance of this Lease.
Section 19.12 Extended Meanings. The word "hereof", "hereto" and
"hereunder" and similar expressions used in this Lease relate to the whole of
this Lease and not only to the provisions in which such expressions appear. This
Lease shall be read with all changes in number and gender as may be appropriate
or required by the context. Any reference to Tenant includes, where the context
allows, the employees, agents, invitees and licensees of Tenant and all others
over whom Tenant might reasonably be expected to exercise control. This Lease
has been fully reviewed and negotiated by each party and their counsel and shall
not be more strictly construed against either party.
Section 19.13 Partial Invalidity. All of the provisions of this Lease are
to be construed as covenants even though not expressed as such. If any such
provision is held or rendered illegal or unenforceable it shall be considered
separate and severable from this Lease and the remaining provisions of this
Lease shall remain in force and bind the parties as though the illegal or
unenforceable provisions had never been included in this Lease.
Section 19.14 Entire Agreement. This Lease and the Schedules and Riders, if
any, attached hereto are incorporated herein and set forth the entire agreement
between Landlord and Tenant concerning the Premises and there are no other
agreement or understandings between them. This Lease and its Schedules and
Riders may not be modified except by agreement in writing executed by Landlord
and Tenant.
Section 19.15 Governing Law. This Lease shall be construed in accordance
with and governed by the laws of the State of Florida, without giving effect to
principals of conflict of laws, except where specifically preempted by Federal
Law.
Section 19.16. Time. Time is of the essence in this Lease. Any time period
herein specified of five (5) days or less shall mean business days; any period
in excess of five (5) days shall mean calendar days.
Section 19.17 No Partnership. Nothing in this Lease creates any
relationship between the parties other than that of lessor and lessee and
nothing in this Lease constitutes Landlord a partner of Tenant or a joint
venture or member of a common enterprise with Tenant.
Section 19.18 Accord and Satisfaction. No endorsement or statement on a
check of letter accompanying any check or payment by Tenant to Landlord shall be
deemed an accord and satisfaction or a release of liability, and Landlord may
accept such check or payment without prejudice to Landlord's rights to recover
the balance of all sums due to Landlord hereunder, or to pursue any other remedy
set forth in this Lease or granted by law or in equity.
Section 19.19 Counterparts. This Lease may be executed in several
counterparts, each of which shall be deemed an original, and all such
counterparts shall together constitute one in the same instrument.
(SIGNATURES CONTAINED ON FOLLOWING PAGE)
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SITE INFORMATION FOR
DADELAND PLAZA SHOPPING CENTER
<PAGE>
SECTION 20 - OPTIONS
Tenant, provided the lease is in good standing and Tenant is not in default
hereunder, shall have the right to extend this lease for (2) five year options.
All of the terms, conditions and covenants of the initial lease term shall apply
to the option period, including the payment of base minimum rent and the annual
increase thereto.
SECTION 21 - BROKERAGE FEES (All see Section 23 Contingency)
The Landlord agrees to pay CB Commercial Real Estate Group, Inc. leasing fees
as set forth more specifically below:
CB Commercial Real Estate Group, Inc. will be the sole broker on this
transaction and will be paid a real estate commission in the amount of
three (3%) of the base minimum rent payments for the initial lease term.
Commission shall be considered due and payable upon lease occupancy by
Tenant.
Landlord's obligation to pay said commission is contingent upon the Section 23
Contingency here in after set forth.
SECTION 22 - EMPLOYEE PARKING
The Landlord shall designate (10) ten parking spaces in the roof top parking
area for the exclusive use by the Tenant. The Tenant agrees that all of the
Tenant's employees shall park their cars in this roof top parking area.
SECTION 23 - CONTINGENCY
This lease agreement is contingent upon the Landlord obtaining a release of
lease agreement from the present Tenant, Sport Physical Therapists. In the event
the Landlord is unable to obtain said release of lease agreement from the
present Tenant, Sports Physical Therapists, then this lease agreement shall be
null and void and of no further effect, in which case Landlord shall refund
Tenant their security deposit and NO BROKERAGE FEE would be owed to Coldwell
Banker Commercial Real Estate Group, Inc. (as set forth in Section 21 of this
lease).
EXECUTED as of the day and year first above written
WITNESSES: LANDLORD: GATOR DADELAND PARTNERS, LTD.
BY: GATOR DIXIE, INC., GENERAL PARTNER
[ILEGIBLE] BY: [ILLEGIBLE]
- ----------------------------- ---------------------------------
[ILEGIBLE] DATED: Nov 23, 1993
- ----------------------------- -------------------------------
[ILEGIBLE] TENANT: SHOCHET SECURITIES, INC.
- -----------------------------
[ILEGIBLE]
- -----------------------------
BY: /s/ Sally Shochet
----------------------------------
Sally Shochet, President
DATED: 11/23/95
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION
Parcel 1:
All of Tract A of DADELAND PLAZA, according to the Plat thereof, as recorded in
Plat Book 110, at Page 25, of the Public Records of Dade County, Florida.
Parcel 2:
All that portion of Florida State Road No. 826 as shown on Florida State Road
Department Right of Way Map for Section 07260-2104, and lying in Section 2,
Township 55 South, Range 40 East, Dade County, Florida, being more particularly
described as follows:
Begin at the point of intersection with the South line of Tract "A" FRANKLIN
PROPERTY according to the plat thereof as recorded in Plat Book 106 and Page 49
of the Public Records of Dade County, Florida, and with the Easterly Limited
Access Right of Way Line of said Florida State Road No. 826; thence run
N5(degree) 26'05"W for a distance of 193.83 feet to a point; thence run
N50(degree) 24'20"W for a distance of 57.31 feet to a point of intersection with
the Southeasterly Right of Way line of Florida State Road No. 5 as shown on
Florida State Road Department Right of Way Map for section 870030-2100, and with
the Southwesterly boundary of said Tract "A" thence run S56(degree) 10'50"E
along the Southwesterly boundary of said Tract "A" for a distance of 56.08 feet
to a point on the Westerly boundary of said Tract "A", thence run
S2(degree)28'39"E along the Westerly boundary of said Tract "A", for a distance
of 193.57 feet to the Point of Beginning.
<PAGE>
SCHEDULE "C"
1. LANDLORD'S WORK
Tenant takes premises "As Is", subject to Article I Section V.
2. TENANT'S WORK
Tenant's work shall consist of the work so specified in Section 3.02,
including all work (other than Landlord's work) shown on plans for the
Premises approved by Landlord pursuant to Section 9.03, initialed by
Landlord and Tenant, and prepared __________________________, under Job No.
____________________, dated ____________________.
<PAGE>
SCHEDULE "D"
RULES AND REGULATIONS
1. Security. Landlord may from time to time adopt appropriate systems and
procedures for the security or safety of the Shopping Center, any Persons
occupying, using or entering the same, or any equipment, furnishings or contents
thereof, and Tenant shall comply with Landlord's reasonable requirements
relative thereto.
2. Return of Keys. At the end of the Term, Tenant shall promptly return to
Landlord all keys for the Shopping Center and Premises which are in the
possession of Tenant. In the event any Tenant falls to return keys, Landlord may
retain $50.00 of Tenant's Security Deposit for locksmith work and
administration.
3. Repair, Maintenance, Alterations and Improvements. Tenant shall carry
out Tenant's repair, maintenance, alterations and improvements in the Premises
only during times agreed to in advance by Landlord and in a manner which will
not interfere with the right of other tenants in the Shopping Center.
4. Water Fixtures. Tenant shall not use water fixtures for any purpose for
which they are not intended, nor shall water be wasted by tampering with such
fixtures. Any cost or damage resulting from such misuse by Tenant shall be paid
for by Tenant.
5. Personal Use of Premises. The Premises shall not be used or permitted to
be used for residential, loading or sleeping purposes or for the storage of
personal effects or property not required for business purposes.
6. Heavy Articles. Tenant shall not place in or move about the Premises,
without Landlord's prior written consent, any safe or other heavy article which,
in Landlord's prior written consent, any safe or other heavy article which, in
Landlord's reasonable opinion; may damage the Shopping Center, and Landlord may
designate the location of any such articles in the Premises.
7. Bicycles, Animals. Tenant shall not bring any animals or birds into the
Shopping Center, and shall not permit bicycles or other vehicles inside or on
the sidewalks outside the Shopping Center except in areas designated from time
to time by Landlord for such purposes.
8. Deliveries. Tenant shall ensure that deliveries of supplies, fixtures,
equipment, furnishings, ware and merchandise to the Premises are made through
such entrances, elevators and corridors and at such times as may from time to
the time be designated by Landlord, and shall promptly pay or cause to be paid
to Landlord the cost of repairing any damage in the Shopping Center causes by
any person making improper deliveries.
9. Solicitations. Landlord reserves the right to restrict or prohibit
canvassing, soliciting or peddling in the Shopping Center.
10. Food and Beverage. Only persons approved from time to time by Landlord
may prepare, solicit orders for, sell, serve or distribute foods or beverages in
the Shopping Center, or use the Common Areas for any such purpose. Except with
Landlord's prior written consent and, in accordance with arrangements approved
by Landlord, Tenant shall not permit on the Premises the use of equipment for
dispensing food or beverage or for the preparations, solicitation of orders for,
sale, serving or distribution of food or beverages.
11. Refuse. Tenant shall place all refuse in proper in proper receptacles
provided by Tenant at its expense in the Premises or in receptacles (if any)
provided by Landlord for the Shopping Center, and shall keep sidewalks and
driveways outside the Shopping Center, and shall keep sidewalks and driveways
outside the Shopping Center and lobbies, corridors, stairwells, ducts and shafts
of the Shopping Center, free of all refuse.
1
<PAGE>
12. Obstructions. Tenant shall not abstract or place anything in or on the
sidewalks or driveways outside the Shopping Center or in the lobbies, corridors,
stairwells or other Common Areas, or use such locations for any purpose except
access to and exit from the Premise without Landlord's prior written consent.
Landlord may remove at Tenant's expense any such obstruction of thing caused or
placed by Tenant (and unauthorized by Landlord) without notice or obligation to
Tenant.
13. Proper Conduct. Tenant shall not conduct itself in any manner which is
inconsistent with the character of the Shopping Center as a first quality
shopping center or which will impair the comfort and convenience of other
tenants in the Shopping Center.
14. Employees, Agents and Invitees. As applicable in these Rules and
Regulations, the term "Tenant" shall include Tenant's Agents, as defined in
Section 2.42 of the Lease, as well as others permitted by Tenant to use of
occupy the Premises.
15. Parking. If Landlord designates tenant parking areas in the Shopping
Center, Tenant shall park its vehicles and shall cause its employees and agents
to park their vehicles and shall cause its employees and agents to park their
vehicles only such designated parking areas pursuant to Section 6.03 of the
Lease. Landlord may itself or through any agent designated for such purpose,
make, administer and enforce additional rules and regulations regarding parking
by tenants and by their employees or agents in the Shopping Center, including,
without limitation, rules and regulations permitting Landlord or such agent to
move any vehicles improperly parked to the designated tenant or employee parking
areas. No disabled vehicle shall be left in the parking areas of the Shopping
Center for more than 24 hours.
16. Pest Control. In order to maintain satisfactory and uniform pest
control throughout the Shopping Center, Tenant shall engage for its own Premises
and at its sole cost, a qualified pest extermination contractor either
designated or approved by Landlord, who shall perform pest control and
extermination services in the Premises at such intervals as reasonably required
or as may be directed by Landlord.
17. Signage. Tenant shall be allowed channel letters on exterior of the
building over Tenant's space. Said signage will be subject to Landlord's
approval, not to be unreasonably withheld.
2
<PAGE>
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE IS MADE AND ENTERRED INTO THIS _________ DAY OF
_____________ 1995, BY AND BETWEEN GATOR DADELAND PARTNERS, LTD. (LANDLORD),
SHOCHET SECURITIES, INC. (ASSIGNOR) AND GKN HOLDING CORPORATION (ASSIGNEE).
W I T N E S S E T H
WHEREAS, Assignor in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledges, herein seeks to assign to Assignee
all of the Assignor's rights, title and interest in and to that certain lease
entered into by and between Gator Dadeland Partners, Ltd. as Landlord, and
Shochet Securities, Inc., as Tenant, dated the 23rd day of November, 1993, (the
Lease), for the premises known as Store No. 27-29, 9515 South Dixie Highway,
located in the Dadeland Plaza Shopping Center, Dade County, Florida, and,
WHEREAS, Shochet Securities, Inc. has entered into an Agreement with GKN
Holding Corporation dated October 3, 1995, for the purchase of all of their
right, title and interest and to the company; and
WHEREAS, Assignee hereby seeks assume the Lease and agrees to observe and
perform each obligation under the Lease to be performed by the Tenant, and
whereas the Assignee seeks to recognize and attorn to Landlord under the Lease
commencing the date first written above, and,
WHEREAS, the parties agree that nothing contained herein shall release, relieve
or in any manner modify the duties and obligations of Assignor(s) under the
Lease, and Assignor(s) shall remain fully liable for the payment and performance
of each and every duty and obligation on the part of the Tenant to be observed
and performed pursuant to the Lease, whether occurring prior to or subsequent to
this Assignant, and,
WHEREAS, Assignor and Assignee hereby agree to the transfer of Assignor's
security deposit, in the amount of $10,516.66, to Assignee.
NOW, THEREFORE, the parties hereby agree to the above mentioned Assignment of
Lease.
Gator Dadeland Partners, Ltd., as Landlord, hereby consents to this Assignment
of Lease from Assignor to Assignee and to the assumption by Assignee of the
Tenant's duties and obligations thereunder.
The consent by Landlord to this Assignment of Lease shall not constitute a
waiver of the necessity for such consent to any subsequent assignment or
modification.
<PAGE>
Further, inasmuch as Landlord is executing this Assignment of Lease prior
to execution of the same by Assignee or Assignor, the Landlord's consent shall
only be valid if both Assignee and Assignor execute this Assignment of Lease on
or before November 30, 1995.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and year first written above.
LANDLORD: GATOR DADELAND PARTNERS, LTD.
BY: GATOR DIXIE, INC.
GENERAL PARTNER
[ILLEGIBLE] BY: /s/ William Goldsmith
- ---------------------------- ------------------------------------
WITNESS WILLIAM GOLDSMITH, PARTNER
[ILLEGIBLE]
- ----------------------------
WITNESS
ASSIGNOR: SHOCHET SECURITIES, INC.
BY: /s/ Sally Shochet
- ----------------------------
WITNESS SALLY SHOCHET, PRESIDENT
- ----------------------------
WITNESS
ASSIGNEE: GKN HOLDING CORPORATION
BY:
- ----------------------------
WITNESS PETER KENT, PRESIDENT
- ----------------------------
WITNESS
<PAGE>
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE IS MADE AND ENTERED INTO THIS 30TH DAY OF
NOVEMBER , 1995, BY AND BETWEEN GATOR DADELAND PARTNERS, LTD., (LANDLORD),
SHOCHET SECURITIES, INC. (ASSIGNOR) AND GKN HOLDING CORPORATION (ASSIGNEE)
W I T N E S S E T H
WHEREAS, Assignor in consideration of the mutual covenants and agreements
contained herein and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, herein seeks to assign to Assignee
all of the Assignor's rights, title and interest in and to that certain lease
entered into by and between Gator Dadeland Partners, Ltd., as Landlord, and
Shochet Securities, Inc., as Tenant, dated the 23rd day of November, 1993 (the
Lease), for the premises known as Store No. 27-28, 9515 South Dixie Highway,
located in the Dadeland Plaza Shopping Center, Dade County, Florida, and,
WHEREAS, Shochet Securities, Inc., has entered into an Agreement with GKN
Holding Corporation dated October 3, 1995, for the purchases of all of their
right, title and interest in and to the company; and
WHEREAS, Assignee hereby seeks to assume the Lease and agrees to observe and
perform each obligation under the Lease to be performed by the Tenant, and
whereas the Assignee seeks to recognize and attorn to Landlord under the Lease
commencing the date first written above, and,
WHEREAS, the parties agree that nothing contained herein shall release, relieve
or in any manner modify the duties and obligations of Assignor(s) under the
Lease, and Assignor(s) shall remain fully liable for the payment and performance
of each and every duty and obligation on the part of the Tenant to be observed
and performed pursuant to the Lease, whether occurring prior to or subsequent to
this Assignment, and,
WHEREAS, Assignor and Assignee hereby agree to the transfer of Assignor's
security deposit, in the amount of $10,516.00 to Assignee.
NOW, THEREFORE, the parties hereby agree to the above mentioned Assignment of
Lease.
Gator Dadeland Partners, Ltd., as Landlord, hereby consents to this Assignment
of Lease from Assignor to Assignee and to the assumption by Assignee of the
Tenant's duties and obligations thereunder.
The consent by Landlord to this Assignment of Lease shall not constitute a
waiver of the necessity for such consent to any subsequent assignment or
modification.
<PAGE>
Further, inasmuch as Landlord is executing this Assignment of Lease prior
to execution of the same by Assignee or Assignor, the Landlord's consent shall
only be valid if both Assignee and Assignor execute this Assignment of Lease on
or before November 30, 1995.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and year first written above.
LANDLORD: GATOR DADELAND PARTNERS, LTD.
BY: GATOR DIXIE, INC.
GENERAL PARTNER
[ILLEGIBLE] BY: /s/ William Goldsmith
- ---------------------------- ------------------------------------
WITNESS WILLIAM GOLDSMITH, PARTNER
__[ILLEGIBLE]
WITNESS
ASSIGNOR: SHOCHET SECURITIES, INC.
Rich Miller BY: /s/ Sally Shochet
- ---------------------------- ------------------------------------
WITNESS SALLY SHOCHET, PRESIDENT
[ILLEGIBLE]
- ----------------------------
WITNESS
ASSIGNEE: GKN HOLDING CORPORATION
Lawrence Graham BY: [ILLEGIBLE]
- ---------------------------- ------------------------------------
WITNESS PETER KENT, PRESIDENT
Chief Financial Officer
[ILLEGIBLE]
- ----------------------------
WITNESS
Exhibit 10.9
[Letterhead of GKN Securities]
March 14, 1996
Kevin Neumark
GKN Securities Corp.
12000 Biscayne Boulevard
Miami, FL 33181
Dear Kevin,
In response to your recent discussions with the principals of GKN
concerning various matters, I would like to confirm the following items.
1. The Miami Office will receive a credit of 10% of the gross office
production for the months of November 1995, December 1995, January
1996 and February 1996. This amount totals $104,226. This credit will
be utilized towards the expense of upgrading the Miami office and
taking new space. We will allocate specific invoices against this
credit, as so indicated by you. In return for this credit, you agree
that if you leave GKN voluntarily prior to March 1, 1999 and are no
longer affiliated with the Company you will repay such amounts to GKN.
2. The Miami Office will receive an 8% override monthly on Ed Martin's
production for the twelve months ending February 28, 1997.
3. The Miami Office will continue to increase the level of its deposit
with GKN in accordance with our prior agreement.
4. If David Macias joins your office during the next twelve months GKN
will be responsible for the costs of terminating his current contract
with Gruntal, and for any registration fees and related draw.
5. GKN and the Miami Office agree to mutual veto power concerning any
future intracompany transfers.
Kevin, if this letter accurately describes your understanding please so
indicate by signing below and returning an original to us. Thank you for your
cooperation.
Very truly yours,
/s/ Peter R. Kent
Peter R. Kent
Chief Operating Officer
/s/ Kevin Neumark /s/ Ronald Neumark /s/ Maico Winer
- ----------------- ------------------ ---------------
Kevin Neumark Ronald Neumark Maico Winer
cc. Robert Gladstone
<PAGE>
GKN
- --------------------------------------------------------------------------------
GKN SECURITIES CORP.
61 Broadway, Suite 1200
New York, New York 10006
(212) 508-3800 o 1-800-338-8964 o Fax: (212) 425-5861
September 11, 1991
Ronald Neumark, as Representative
c/o Neuco Investments, Inc.
4000 Tower Side Terrace, Apt. 1108
Miami Florida 33138
Re: Independently-Owned Branch Office Agreement
in North Miami, Florida
Dear Messrs. Neumark, Neumark and Winer:
The following represents our agreement for you and Neuco Investments, Inc.
("Neuco") to own and to operate an independently-owned branch office ("Branch
Office") of GKN Securities Corp. ("GKN").
1. Neuco will own and operate the Branch Office at 12000 Biscayne Blvd.,
Suite 600, North Miami, Florida 33161, or such other location in North
Miami as you and GKN shall mutually agree to. Neuco shall bear all the
costs, expenses and liabilities associated with the ownership and
operation of the Branch Office, except as specifically set forth
herein. It is understood and agreed that, except as specifically set
forth herein, GKN shall not be responsible for any of such costs,
expenses and liabilities.
2. Compensation:
A. The Branch Office compensation will be at the following
percentages of gross commissions generated by the Branch Office,
minus costs: 100% during the
<PAGE>
first three months from the date the office commences operations,
85% during the next three months and 80% thereafter;
B. All direct costs associated with Branch Office trades (including
clearing, interest, ticket charges, overnight mail...) shall be
deducted from the net commissions to be paid to the Branch
Office;
C. GKN agrees to provide Neuco with a full reconciliation of the net
amount due to the Branch Office, together with payment of such
amount in accordance with its normal commission payment policy;
D. The cost of maintaining client accounts (including unsecured
debits, interest charges...) shall be borne solely by Neuco.
3. This Agreement shall remain in full force and effect unless terminated
as provided herein. The Agreement may be terminated by GKN at any time
without cause upon giving Neuco one hundred and twenty (120) days
written notice of the intention to terminate. The Agreement may be
terminated by Neuco at any time without cause upon giving GKN 120 days
written notice of the intention to terminate; provided, however, that
such notice cannot be given prior to one hundred and eighty (180) days
from the date hereof. Notwithstanding the foregoing, GKN can terminate
this Agreement immediately for cause, including breach of this
Agreement, upon written notice thereof to Neuco.
4. The Principals and Neuco jointly and severally represent and warrant
that (i) they currently maintain General Securities Principal (Series
24) licenses, (ii) will be registered as the General Securities
Principals of the Branch Office, and (iii) except as set forth in
their respective NASD registrations, they have not been parties to or
the subjects of any SEC or NASD disciplinary proceeding or action or
any civil or criminal lawsuit in any
<PAGE>
manner to the purchase or sale of securities or operations of an NASD
broker-dealer.
5. All securities orders generated by the Branch Office will be placed
only through GKN's New York City office and neither the Principals,
nor any member or broker of the Branch Office shall be allowed to
represent the ability to purchase securities or place orders or "give
GKN's name out to the street." The Branch Office shall operate at all
times under the name of GKN, which name shall be used on all
letterhead and signage of the Branch Office in a manner approved by
GKN in advance. Any goodwill developed by the Branch Office in the GKN
name shall inure to the benefit of GKN, as Neuco and the Principals
understand and agree that they have absolutely no right in or to the
GKN name and may only use it as provided in this Agreement.
6. All corporate finance and investment banking and consulting activities
and opportunities of the Branch Office will be directed through GKN
and subject to GKN's sole approval.
7. GKN agrees to provide facilities for carrying customer accounts. Such
facilities shall include customer statements and confirmations all by
a member in good standing with the NYSE; the member through and by
whom such accounts are carried presently is Bear Stearns & Co. GKN
further agrees to execute selling agreements as a dealer of and for
such various limited partnerships and mutual funds as GKN may
reasonably approve in its sole discretion after appropriate due
diligence.
8. GKN agrees to pay the registration fees for up to a maximum of ten
registered representatives of the Branch Office in no more than five
states and the transfer fees for such registered representatives.
<PAGE>
9. (a) The Principals shall have no liability under paragraph (b) below
if Neuco (i) deposits with GKN the sum of $25,000 upon commencement of
operation, and (ii) it is understood that Neuco will deposit an
additional $25,000 with GKN prior to September 11, 1992, to be held
under the terms set forth below (such sums being referred to herein as
the "Deposit"). GKN shall be entitled to hold the deposit as security
for, and apply the Deposit against any amounts to become owed to the
Indemnities under paragraph (b) below. GKN shall also be entitled to
deduct from any amounts payable to the Branch Office hereunder such
amounts as may be required for Neuco to fulfill its obligation to make
the additional $25,000 payment referred to in (ii) above. GKN shall
refund the Deposit to Neuco by the later of (i) 90 days after the
termination of this Agreement, or (ii) the date on which all claims or
threatened claims which could give rise to indemnification hereunder
have been finally resolved and settled.
(b) In the event that the deposits described in paragraph (a) above
are not made on a timely basis, Neuco and the Principals agree to
jointly and severally indemnify GKN and its officers, directors, and
shareholders (collectively, the "Indemnitees") and hold them harmless
from and against any and all costs, damages, claims, expenses,
arbitrations, litigations, inquiries, investigations and liabilities,
including reasonable attorney fees, arising out of or relating to (i)
a breach by Neuco or any of the Principals of this Agreement or the
representations and warranties included herein, (ii) any third party
claim for damages or other monies the responsibility for which is
Neuco's and the Principals' under the terms of this Agreement or (iii)
any violation or alleged violation by Neuco, the Principals and/or any
representatives or brokers of the Branch Office of any law, rule,
regulation or guideline of the SEC, NASD or other regulatory body or
jurisdiction or of any policy or procedure contained in GKN's
compliance manual.
<PAGE>
10. GKN hereby agrees not to offer to any other party the right to own or
operate an independently owned GKN Branch Office in Dade County,
Florida for a period of two years from the date hereof or such shorter
period as this Agreement remains in effect.
Upon your signature below you may consider yourselves the owners and
operators of an independently-owned North Miami, Florida based Branch office of
GKN. We wish you luck in this venture.
Sincerely,
GKN SECURITIES CORP.
By:/s/ Roger Gladstone
----------------------
Roger Gladstone, Pres.
ACCEPTED AND AGREED:
NEUCO INVESTMENTS, INC.
By: /s/ Ronald Neumark
-------------------------
Ronald Neumark, President
By: /s/ Maico Winer
-------------------------
Maico Winer, Vice-President
By: /s/ Kevin Neumark
-------------------------
Kevin Neumark, Secretary/Treasurer
EXHIBIT 10.14
GKN Holding Corp. 212-509-3800
61 Broadway Fax 212-425-5861
New York, NY 10006
GKN HOLDING
Joachim Stahler
Employee Name
GKN HOLDING CORP.
WARRANT AGREEMENT
AGREEMENT, made as of January 30, 1996 between GKN HOLDING CORP., a
Delaware corporation ("Company"), and Joachim Stahler ("Employee" or "Grantee").
WHEREAS, on January 31, 1996 the Board of Directors of the Company
authorized the sale to the Employee of warrants to purchase an aggregate of
80,000 of the authorized but unissued or treasury shares of the Common Stock of
the Company ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desires to acquire said warrants on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. The Company hereby grants to the Employee the right and option to
purchase all or any part of an aggregate of 80,000 shares of Common Stock on the
terms and conditions set forth herein (the "Warrant").
2. The purchase price of each share of Common Stock subject to the Warrant
("Warrant Shares") shall be equal to the price (after appropriate adjustment, if
any, for stock splits, dividends, and the like) at which the Company sells its
common stock in its initial public offering of securities ("IPO"); provided,
however, that if the Warrant is exercised prior to the consummation of the IPO,
the purchase price will be equal to 150% of the per-share book value of the
Company as of the end of the Company's last fiscal year prior to exercise, as
such book value is determined, in accordance with United States GAAP, by the
Company's independent auditors.
3. (a) The Warrant shall be exercisable at any time, in whole or in part,
commencing January 30, 1996 and shall remain exercisable, except as otherwise
provided herein, until the close of business on January 30, 2001, provided,
however, that the Warrant may be exercised, except as provided in subparagraph
(b) below, only if the Employee at the time of exercise is employed by the
Company or any wholly or majority owned Subsidiary thereof ("Subsidiary") and
shall have been so employed continuously since the date of this Agreement.
<PAGE>
(b) If the Employee's employment with the Company or a Subsidiary
terminates for any reason prior to the time that the Warrant has been fully
exercised, the portion of the Warrant which has not yet been exercised shall
expire on the earlier of 90 days after such termination or January 30, 2001.
(c) The Warrant shall not be assignable or transferable except (i) to
members of Employee's immediate family and trusts formed for their benefit and
(ii) in the event of the death of the Employee, by will or by the laws of
descent and distribution. No transfer of the Warrant by the Employee by will or
by the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will; and no transfer shall be effective to bind the Company unless
the Company shall be furnished such evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Warrant.
4. The Employee shall not have any of the rights of a stockholder with
respect to the Warrant Shares until such shares have been issued after the due
exercise of the Warrant.
5. In the event of a reorganization, recapitalization, reclassification,
stock split or exchange, stock dividend, combination of shares, or any other
similar change in the Common Stock of the Company, the Board of Directors of the
Company shall, in its sole discretion, make such equitable, proportionate
adjustments, if any, as it deems appropriate in the number and kind of shares
covered by the Warrant and in the option price thereunder, in order to preserve
the Employee's proportionate interest in the Company and to maintain the
aggregate option price; provided, however, that upon the dissolution or
liquidation of the Company, or upon any merger, consolidation or other form of
reorganization, or upon the sale of all or substantially all of the Company's
assets, the Warrant may be terminated by the Company or its successor and be of
no further effect.
6. The Company hereby represents and warrants to the Employee that the
Warrant Shares, when issued and delivered by the Company to the Employee in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.
7. The Employee hereby represents and warrants to the Company that he is
acquiring the Warrant and shall acquire the Warrant Shares for his own account
and not with a view to the distribution thereof.
8. Anything in this Agreement to the contrary notwithstanding, the Employee
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him without registration under the Securities
Act of 1933, as amended ("Act"), or in the event that they are not so
registered, unless (a) an exemption from the Act is available thereunder, and
(b) the Employee has furnished the Company with notice of
2
<PAGE>
such proposed transfer and the Company's legal counsel, in its reasonable
opinion, shall deem such proposed transfer to be so exempt.
9. The Employee hereby acknowledges that:
(a) All reports and documents required to be filed by the Company with
the National Association of Securities Dealers, Inc. and Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 and other applicable
laws within the last 12 months have been made available to the Employee for his
inspection.
(b) If he exercises the Warrant he must bear the economic risk of the
investment in the Warrant Shares for an indefinite period of time because the
Warrant Shares will not have been registered under the Act and cannot be sold by
him unless they are registered under the Act or an exemption therefrom is
available thereunder.
(c) In his position with the Company, he has had both the opportunity
to ask questions of and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and conditions
of the offer made hereunder and to obtain any additional information to the
extent to the Company possesses or may possess such information or can acquire
it without unreasonable effort or expense necessary to verify the accuracy of
the information obtained pursuant to subparagraph (a) above.
(d) The Company shall place stop transfer orders with its transfer
agent against the transfer of the Warrant Shares in the absence of registration
under the Act or an exemption therefrom.
(e) The certificates evidencing the Warrant Shares shall bear the
following legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
10. Subject to the terms and conditions of the Agreement, the Warrant may
be exercised by written notice to the Company at its principal place of
business. Such notice shall state the election to exercise the Warrant and the
number of Warrant Shares in respect to which it is being exercised, shall
contain a representation and agreement by the person or persons so exercising
the Warrant that the Warrant Shares are being purchased for investment and not
with a view to the distribution or resale thereof, and shall be signed by the
person or persons so exercising the Warrant. Such notice shall be accompanied by
payment of the full purchase price of the Warrant
3
<PAGE>
Shares and any withholding or other taxes which may be payable by the Employee.
As soon as practicable after the notice and payment is received and cleared the
banking system, the certificate or certificates evidencing the Warrant Shares
shall be issued in the name of the person or persons so exercising the Warrant.
11. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall either be delivered personally or sent by
facsimile transmission or certified mail, return receipt requested, postage
prepaid, to the parties at their respective addresses set forth below, or to
such other address as either shall have specified by notice in writing to
the other, and shall be deemed duly given hereunder when so delivered, faxed or
mailed, as the case may be.
12. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter thereof.
14. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto and
as provided above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or liabilities.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
30th day of January, 1996.
GKN HOLDING CORP. EMPLOYEE:
By:/s/ David M. Nussbaum /s/ Joachim Stahler
--------------------------- -------------------------------
David M. Nussbaum, Chairman Joachim Stahler
Address: Address:
- ------------------------------ MEIENBERGWEG 53
8645 JONA
- ------------------------------ SWITZERLAND
- ------------------------------
Fax No: Fax No:
- ------------------------------ -------------------------------
5
EXHIBIT 10.15
STOCK PURCHASE AGREEMENT dated October 3, 1995, among GKN HOLDING CORP., a
Delaware corporation (the "Purchaser"), MARVIN SHOCHET and SALLY SHOCHET
(collectively, the "Sellers") and SHOCHET SECURITIES, INC., a Florida
corporation (the "Company").
WHEREAS, the Company is engaged in the discount retail sale of securities
and related financial activities (the foregoing is referred to hereinafter as
the "Business"); and
WHEREAS, the Sellers are the owners of all of the outstanding capital stock
of the Company and are the sole directors of the Company; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Purchaser desires to purchase from the Sellers, and the Sellers desire to sell
to the Purchaser, all of the capital stock of the Company;
IT IS AGREED:
ARTICLE I
PURCHASE AND SALE
SECTION 1.01. Definitions. Certain capitalized terms used in this Agreement
shall have the meanings specified in Article IX.
SECTION 1.02. Transferred Shares. Subject to the terms and conditions of
this Agreement, the Sellers shall sell, transfer, assign and convey to the
Purchaser, and the Purchaser shall purchase from the Sellers, on the Closing
Date all of the issued and outstanding capital stock of the Company, consisting
of 200,000 shares of the Company's Common Stock, par value $0.50 per share (the
"Shares").
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SECTION 1.03. Purchase Price. Subject to adjustment as hereinafter set
forth, the purchase price (the "Purchase Price") to be paid to the Sellers by
the Purchaser for the Shares shall be $1,940,000, payable as follows:
(a) Upon execution of this Agreement, Purchaser shall deliver to
Graubard Mollen Horowitz Pomeranz & Shapiro, as escrow agent (the "Escrow
Agent"), the sum of $50,000, the proceeds of which will be held in Escrow
Agent's interest bearing trust account (the $50,000 and all interest earned
thereon are hereinafter referred to as the "Deposit"). The Deposit shall be
delivered by Escrow Agent to (i) the Sellers at the Closing in partial payment
of the Purchase Price; (ii) the Purchaser, upon notice to Escrow Agent that this
Agreement has been terminated pursuant to Section 8.01 other than by Sellers
pursuant to Section 8.01(b); or (iii) the Sellers, as liquidated and agreed upon
damages, the exact amount of damages being impossible to ascertain, upon notice
to Escrow Agent that this Agreement has been terminated by Sellers pursuant to
Section 8.01(b). Copies of all notices given to the Escrow Agent by a Party
shall also be given to the other Parties. If the Escrow Agent is given notice by
a Party to the effect that it objects to a direction or notice given to the
Escrow Agent by another Party, the Escrow Agent shall retain the Deposit until
it is notified by all Parties that the objection has been resolved;
(b) $890,000 (the "Closing Payment") at the Closing by certified or
official bank check to the order of Seller; and
(c) $1,000,000 in twelve equal quarterly payments of principal
commencing three months after the Closing Date together with interest at the
rate of 7% per annum, which balance shall be represented by a promissory note
("Note") in the form of Exhibit A annexed hereto to be delivered to the Sellers
at the
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Closing.
SECTION 1.04. Revenue Adjustments.
(a) If average monthly commission revenue of the Company (based upon
settled trades during each month) during the Adjustment Period ("Average Monthly
Adjustment Period Revenue") is $256,000 (which represents approximately 80% of
the average monthly commission revenue of the Company for the period January 1,
1995 through June 30, 1995) or less, the Purchase Price shall be reduced in
accordance with the following schedule:
Average Monthly Adjustment Total Reduction In
Period Revenue Purchase Price
-------------------------- ------------------
$240,001 to $256,000 $ 50,000
$224,001 to $240,000 $ 75,000
$208,001 to $224,000 $100,000
$192,001 to $208,000 $150,000
$178,001 to $192,000 $200,000
$160,001 to $178,000 $250,000
$160,000 or less $300,000
(b) (i) If the employment of a registered representative of the
Company (other than one located at the Tamarac office) is terminated by the
Company other than for cause during the Adjustment Period, the average monthly
commission revenue of such representative for the portion of the Adjustment
Period prior to such termination shall be deemed to be the average monthly
commission revenue of such representative for the entire Adjustment Period and
such amount shall be included in computing Average Monthly Adjustment Period
Revenue, except that if such terminated representative is replaced by a new
registered representative the average monthly commission revenue of such new
representative for the portion of his employment during the Adjustment Period
shall be used in computing Average Monthly Adjustment Period
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Revenue.
(ii) If a registered representative of the Company (other than
one located at the Tamarac office) voluntarily terminates his employment with
the Company during the Adjustment Period and the Company hires a new registered
representative as a replacement, the average monthly commission revenue of such
new representative for the portion of his employment during the Adjustment
Period shall be used in computing Average Monthly Adjustment Period Revenue.
(iii) If the employment of a registered representative from the
Tamarac office ceases, for any reason, during the Adjustment Period, then each
amount of Average Monthly Adjustment Period Revenue set forth in paragraph (a)
above shall be reduced by that representative's average monthly commission
revenue for the period January 1, 1995 through June 30, 1995. As used herein,
"cause" shall mean (i) improper, illegal, fraudulent or dishonest action by a
representative in his relations with the Company, the Purchaser or any of its
affiliates, or with any of their customers or business contacts or (ii)
conviction of a representative of any crime involving an act of moral turpitude.
(c) The calculation of Average Monthly Adjustment Period Revenue shall
be made by Purchaser's Accountants and submitted to Sellers for review by the
Company's Accountants within the 45-day period following the end of the
Adjustment Period and shall be final and binding upon the Parties except in the
case of manifest error. Such calculation shall be conclusively accepted unless
an objection thereto is made within ten days after it is submitted to the
Sellers.
SECTION 1.05. Office Transition Adjustments.
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(a) If, after the Closing Date, the Purchaser or the Company pays a
bonus to any registered representative employed by the Company on the Closing
Date in the Hallendale, South Miami and Miami Beach offices of the Company to
induce such representative to continue to be employed by the Company during the
period ending on the twelfth full calendar month following the Closing Date (the
"Retention Period"), the Purchase Price shall be reduced by an amount equal to
50% of the aggregate amount of all such bonuses; provided that any such bonus
shall not exceed 3% of the gross commission revenues of any such representative
during the Retention Period between $100,000 and $150,000 and 5% of the gross
commission revenues of any such representative during the Retention Period in
excess of $150,000; and provided further that the maximum amount of such
Purchase Price reduction shall be $50,000.
(b) If the gross commissions earned by the Company during the
Retention Period from trades effected by the registered representatives listed
on Schedule 1.05 who transfer from the Tamarac office to the Hallendale office
are less than the Retention Period Threshold, the Purchase Price shall be
reduced by an amount equal to 50% of the difference; provided that the maximum
amount of such Purchase Price reduction shall be $50,000. As used herein,
"Retention Period Threshold" means $300,000 less $5,000 per month for each full
calendar month for those months, if any, during the Retention Period in which a
registered representative presently employed at the Tamarac office and listed in
Schedule 1.05 is not employed by the Company. Such deduction shall be made with
respect to each such registered representative whose employment terminates
during the Retention Period.
(c) If, after the Closing Date, the Company institutes an enhanced
compensation program with respect to the registered representatives listed on
Schedule 1.05 which provides
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that such representatives will receive up to 55% of the gross commissions earned
by the Company on trades effected by them, the Purchase Price shall be reduced
by an amount equal to 50% of the commissions earned by such representatives upon
trades effected during the Retention Period in excess of the commissions that
would have been earned by them upon such trades calculated at commission rates
in effect prior to the Closing Date; provided that the maximum amount of such
Purchase Price reduction shall be the lesser of (i) 7.5% of the commissions
earned by such representatives during the Retention Period or (ii) $50,000.
(d) During the Retention Period, the Company shall pay each
representative listed on Schedule 1.05 not less than the amount designated
therein as the "Floor Salary" for such representative, provided that such
representative shall remain in the employ of the Company during the entire
Retention Period and executes an association agreement with the Company
regarding the terms and conditions pertaining to the payment of such Floor
Salary.
SECTION 1.06 Net Liquid Assets Adjustment. If the Net Liquid Assets of the
Company at the Closing Date are less than $340,000, the Purchase Price and the
Closing Payment shall each be reduced by the amount of the difference. If the
Net Liquid Assets of the Company at the Closing Date are more than $340,000, the
excess shall be paid to the Sellers by the Company at the Closing.
SECTION 1.07 Adjustment of Note Payment. At any time a reduction in the
Purchase Price is made pursuant to Section 1.04, Section 1.05, Section 3.05A or
Section 7.01(b), the Purchaser shall deduct the amount of such reduction from
the next quarterly payments of principal due under the Note provided that the
amount of any such deduction from any principal payment shall not reduce
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the amount of such payment below $20,000 and any excess shall be carried forward
as a deduction from succeeding payments. In the event of any such reduction,
interest due upon the principal balance of the Note shall be recalculated based
upon the adjusted and reduced Purchase Price as of the Closing Date and any
interest attributable to the amount of such reduction actually paid by the
Purchaser shall be deducted from the next quarterly payments of interest. If the
amount of any deduction is in excess of the principal amount then due upon the
Note, the Sellers shall promptly pay the excess to the Purchaser upon demand.
ARTICLE II
CLOSING
SECTION 2.01. The Closing. Subject to the terms and conditions of this
Agreement, the consummation of the sale and purchase of the Shares pursuant
hereto shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
New York time, on the fourth Business Day after the date on which the last of
the conditions to Closing set forth in Article VI hereof is fulfilled, at the
offices of the Purchaser, Mizner Park, 433 Plaza Real, Suite 245, Boca Raton,
Florida 33432, or at such other time, date or place as the Parties may agree
upon in writing.
SECTION 2.02. Sellers' Deliveries at the Closing. At the Closing, the
Sellers shall deliver to the Purchaser (i) the Shares, duly endorsed or with
appropriately executed stock powers attached in form for transfer, free and
clear of any liens, claims, charges, restrictions or encumbrances (collectively,
a "Lien") and (ii) the opinions, certificates and other agreements contemplated
by Article VI hereof.
SECTION 2.03. Purchaser's Deliveries at the Closing. At the
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Closing, the Purchaser shall deliver to the Sellers (i) the Closing Payment,
(ii) the Note and (iii) the opinions, certificates and other agreements
contemplated by Article VI hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE COMPANY
Each of the Sellers and the Company, jointly and severally, represent and
warrant to the Purchaser as follows:
SECTION 3.01. Organization of Company. The Company is a corporation duly
organized, validly existing and in good standing under the law of the State of
Florida. The Company has no subsidiaries and the Company does not own, directly
or indirectly, any capital stock or any other securities of any issuer or any
equity interest in any other entity (except for securities owned in the ordinary
course of business) and is not a party to any agreement to acquire any such
securities or interest. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each of the jurisdictions in
which the property owned, leased or operated by the Company or the nature of the
business which it conducts requires qualification, or if not so qualified, such
failure or failures, in the aggregate, would not have a material adverse effect
on the business or operations of the Company. The Company has all requisite
power to own, lease and operate its properties and to carry on its business as
now being conducted and as presently contemplated to be conducted.
SECTION 3.02. Authority and Corporate Action. The Sellers have all
necessary power and authority to enter into this Agreement and to transfer the
Shares as contemplated hereby. All corporate action necessary to be taken by the
Company to authorize the
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execution, delivery and performance of this Agreement and all other agreements
and instruments delivered by the Company in connection with this transaction has
been duly and validly taken. Subject to the terms and conditions hereof, this
Agreement constitutes the valid, binding, and enforceable obligation of the
Sellers and the Company, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, or other laws generally affecting
creditors' rights or as may be modified by a court of equity in an action for
specific performance. The execution, delivery and performance of this Agreement
does not and will not violate or result in any default under any provision of
the Certificate of Incorporation or By-Laws of the Company or any material
default under any indenture, license or other agreement to which either the
Sellers or the Company is a party or any law, regulation, order, writ, judgment
or decree applicable to it and by which the ability of the Sellers and the
Company to consummate the transactions to be consummated by them hereunder would
be adversely affected.
SECTION 3.03. The Shares.
(a) Ownership. The Sellers are the registered and beneficial owners of
the Shares and the Sellers shall continue to own the Shares until delivery
thereof at the Closing. There are no options, warrants or other contractual
rights outstanding which require, or give any person the right to require the
issuance of any capital stock of the Company whether or not such rights are
presently exercisable. At the Closing, the Shares shall be owned by the Sellers
and delivered to the Purchaser free and clear of any Lien whatsoever and subject
to no restrictions with respect to the transferability thereof except as to the
Federal and State securities laws.
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(b) Capitalization. The Shares represent all the issued and
outstanding shares of the capital stock of the Company and are duly authorized,
validly issued, fully paid and non-assessable. There are 200,000 shares of
Common Stock in the Company's treasury.
SECTION 3.04. Compliance with Laws; Customer Complaints.
(a) Except as set forth in Schedule 3.04(a), the Company has not
received notice of any material, unremedied violation of any applicable law,
rule, regulation, order, writ or decree of any court or any governmental agency
or instrumentality (collectively, "Regulations"), where the consequences of such
violation would be materially adverse to the Company or the Business.
(b) Customer complaints reportable on Form U-4 which have been made
against the Company or its registered representatives since January 1, 1990 are
set forth in Schedule 3.04(b) and copies of each such Form U-4 have been
furnished to the Purchaser. Such complaints which are pending as of the date of
this Agreement are appropriately noted on Schedule 3.04(b). None of such
complaints which have been disposed of requires any payment or other action to
be made by the Company after the date of this Agreement.
SECTION 3.05. Financial Statements. The Sellers have delivered to the
Purchaser a balance sheet of the Company at December 30, 1994, and statements of
income and source and application of funds for the year then ended, all
certified by the Company's Accountants, and the notes, comments, schedules, and
supplemental data therein (the "Audited 1994 Financial Statement"). In addition,
the Sellers have delivered to the Purchaser an
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unaudited balance sheet of the Company at August 31, 1995 (the "1995 Balance
Sheet") and statement of income for the eight months then ended (together with
the 1995 Balance Sheet, the "Unaudited 1995 Financial Statement"), a copy of
which is attached hereto as Exhibit 3.05. The Audited 1994 Financial Statement
and the Unaudited 1995 Financial Statement (collectively, the "Financial
Statements") have been prepared in accordance with GAAP throughout the periods
indicated and fairly present the financial condition of the Company at their
respective dates and the results of the operations of the Company for the
periods covered thereby in accordance with GAAP.
SECTION 3.05A. Accounts Receivable. To the best of the Sellers' knowledge,
all accounts receivable of the Company are believed to be good and have either
been collected or are believed to be collectible within six (6) months of the
Closing Date, and are to the best of the Sellers' knowledge subject to no
defenses, set-offs or counterclaims. All accounts receivable are shown on the
books of the Company, and have been disclosed to the Purchaser. In the event
that any accounts receivable existing prior to the Closing are collected within
six (6) months following the Closing in excess of the amount of accounts
receivable shown on the books of the Company as of the Closing Date, that excess
shall belong to the Company. Provided that the Purchaser diligently pursues the
collection thereof, accounts receivable outstanding as of the Closing Date which
are not collected within six (6) months after the Closing Date shall become the
obligation of Sellers, and the Purchase Price shall be reduced by the amount
thereof and payments upon the Note shall be reduced as set forth in Section
1.07.
SECTION 3.06. Licenses and Permits. The Company has all material
governmental licenses, permits and authorizations (the "Permits") necessary to
carry on the Business as currently
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conducted and is in compliance with the requirements thereof.
SECTION 3.07. Real Property. The Company owns no real property.
SECTION 3.08. Leased Properties; Contracts.
(a) All leases for the real property (the "Leases") leased by the
Company are listed on Schedule 3.08(a), and copies thereof have been furnished
to the Purchaser.
(b) All material leases for personal property and all material
contracts and commitments related to the conduct of the Business to which the
Company is a party (the "Contracts") are listed on Schedule 3.08(b). For
purposes of this Section 3.08, a material lease, contract or commitment
requiring the payment of money means any lease, contract or commitment pursuant
to which the unliquidated amount required to be paid by the Company or which the
Company is entitled to receive, as of the date hereof, is $5,000 or more. Copies
of the Contracts have been furnished to the Purchaser.
(c) All Contracts and Leases are valid and binding, enforceable in
accordance with their terms and are in full force and effect and there is no
material default by the Company, or, to the best of the Sellers' knowledge, any
other party thereto, under any such Contract or Lease. None of the other parties
to the Contracts or Leases has notified the Company of any intention to
terminate its Contract or Lease.
(d) The closing of the Company's Tamarac office, the lease for which
terminates on November 30, 1995, is contemplated by the Parties. However, the
Purchaser may renew or extend the
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term of such lease at its sole option.
SECTION 3.09. Litigation. Except as set forth in Schedule 3.09, there are
no actions, suits, arbitrations or other proceedings (including arbitrations
with any registered representative or customer of the Company) pending or, to
the best of the Sellers' knowledge, threatened against the Company at law or in
equity before any court, federal, state, municipal or other governmental
department or agency or other tribunal the adverse resolution of which would
materially and adversely affect the Business, the Company. As of the date
hereof, neither the Company nor its property is subject to any order, judgment,
injunction or decree which materially and adversely affects the Business, the
Company.
SECTION 3.10. Taxes, Tax Returns and Audits. All federal, state, and local
income Tax returns required to be filed by or on behalf of the Company have been
duly filed, or extensions have been obtained, and all Taxes shown thereon to be
due and payable have been paid or are reflected on the 1995 Balance Sheet or are
being contested by the Company or the Sellers on behalf of the Company in good
faith.
SECTION 3.11. Consents and Approvals. The execution and delivery of this
Agreement by the Sellers and the Company do not, and the performance of this
Agreement by the Sellers and the Company will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority or other third party, except (i) as
described in Schedule 3.11, and (ii) where failure to obtain such consents,
approvals, authorizations or actions, or to make such filings or notifications,
would not prevent the Sellers or the Company from performing any of their
material obligations under this Agreement and would not materially and adversely
affect the
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Business or the Company.
SECTION 3.12. Absence of Certain Changes. The Company has not, since August
31, 1995 (since December 31, 1994, with respect to paragraph (j)):
(a) issued, delivered or agreed to issue or deliver any stock, bonds
or other corporate securities (whether authorized and unissued or held in the
treasury), or granted or agreed to grant any options (including employee stock
options), warrants or other rights for the issue thereof;
(b) borrowed or agreed to borrow any funds except current bank
borrowings not in excess of the amount thereof shown on the 1995 Balance Sheet;
(c) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, except current
liabilities for trade obligations incurred in the ordinary course of business
and consistent with prior practice;
(d) discharged or satisfied any encumbrance (as hereinafter defined)
other than those then required to be discharged or satisfied, or paid any
obligation or liability other than current liabilities shown on the 1995 Balance
Sheet and liabilities incurred since August 31, 1995 in the ordinary course of
business and consistent with prior practice;
(e) sold, transferred, leased to others or otherwise disposed of any
assets, except for inventories sold in the ordinary course of business and
assets no longer used or useful in the conduct of its business, or canceled or
compromised any debt or claim, or waived or released any right of substantial
value;
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(f) received any notice of termination of any Contract, Lease or other
agreement, or suffered any damage, destruction or loss (whether or not covered
by insurance) which, in any case or in the aggregate, has had, or might
reasonably be expected to have, a material adverse effect on its Business,
condition (financial or otherwise), property, assets, liabilities, operations,
or prospects;
(g) encountered any labor union organizing activity labor disputes or
had any material change in its relations with its employees or agents, clients
or insurance carriers;
(h) made any accrual or arrangement for any payment or any bonus, or
any increase in compensation or any severance or termination pay to (A) any
present or former officer or employee of the Company; or (B) any person, firm or
corporation which is or was furnishing professional or consulting services to
the Company;
(i) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, invention or similar rights, or modified any
existing rights with respect thereto;
(j) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to any
shareholder of the Company or any affiliate of any shareholder of the Company,
or purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock, or made or agreed to make any payment to any shareholder of the Company
or any affiliate of any shareholder of the Company, whether on account of debt,
management fees or otherwise;
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(k) suffered any material adverse change, in any case or in the
aggregate, in its assets, liabilities, financial condition, results of
operations or Business; or
(l) entered into any agreement or made any commitment to take any of
the types of action described in any of the foregoing clauses (other than
clauses (f), (g) or (k)).
SECTION 3.13. Employment Agreements and Bonus Plans. Except as set forth on
Schedule 3.13 or in the Company's employee handbook, a copy of which has been
furnished to the Purchaser, there are no employment agreements or bonus or other
benefit plans, arrangements or policies (written or unwritten) between the
Company and any of its employees, including but not limited to any thereof
relating to sick pay, vacations and severance.
SECTION 3.14. Employee Plans.
(a) Except as set forth on Schedule 3.14, the Company does not
maintain or contribute to, and is not a party to or a participating employer in,
any "employee pension benefit plan," as defined in Section 3(2) of ERISA
(collectively, the "Employee Benefit Plans"). The Company, at all times, has
complied in all material respects with the provisions of the Employee Benefit
Plans. The Company is not a party to any multiemployer plan as defined in
Section 3(37) of ERISA.
(b) Each Employee Benefit Plan (i) except with respect to any Employee
Benefit Plan not intended to qualify under Section 401(a) of the Code, has
received a determination letter from the Internal Revenue Service to the effect
that such plan satisfies the requirements of Section 401(a) of the Code and that
any related trust is exempt from tax pursuant to Section 501(a) of
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the Code; (ii) has been operated in all material respects in accordance with
ERISA, the Code and all other applicable law; (iii) has not engaged in any
prohibited transactions (as such term is defined for purposes of ERISA and the
Code) (other than those that are exempt pursuant to statute, regulation or
otherwise) which would subject the Company to an excise tax under Section 4975
of the Code or a penalty under Section 502(i) of ERISA; (iv) has not, since the
last annual report filed, been amended so as to materially increase benefits
thereunder (other than as a direct or indirect result of changes in applicable
law or regulations) or experienced a material increase (more than 20%) in the
number of participants covered thereunder; and (v) if terminated on the date
hereof, would not subject the Company to liability to the PBGC pursuant to the
provisions of Title IV of ERISA.
(c) Except as set forth in Schedule 3.14, there are no "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA) maintained by
Company or to which Company contributes or is required to contribute (the
"Employee Welfare Plans").
(d) The Sellers have furnished to the Purchaser true and complete
copies of the following items with respect to each Employee Benefit Plan and
each Employee Welfare Plan (i) each plan document; (ii) each related trust
document; (iii) each determination letter issued by the Internal Revenue Service
relating to qualification of the respective plans under the Code; (iv) the most
recently filed annual reports; and (v) the most recent actuarial valuation, if
any.
(e) The Company has filed all reports and other documents required to
be filed with any governmental agency with respect to the Employee Benefit Plans
and Employee Welfare Plans or has received currently effective extensions for
any such reports
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and other documents which have not been filed.
SECTION 3.15. Insurance Policies. Schedule 3.15 sets forth a complete list
of all insurance policies maintained by the Company and which are in force as of
the date hereof.
SECTION 3.16. Intangible Rights.
(a) Shochet Name. The Company has the exclusive and unrestricted right
to use the name "Shochet" in its corporate name and in connection with the
Business. Neither the Sellers nor the Company has granted any third party the
right to use the name "Shochet" in any capacity whatsoever. No third party has
made any claim or assertion against the Company or the Sellers that the use by
the Company of the name "Shochet" infringes any rights of such third party.
(b) Other Rights. Set forth on Schedule 3.16(b) is a list and brief
identification of all trademarks, trade names, copyrights and applications
therefor owned by or registered in the name of the Company or in which the
Company has any rights as licensee or otherwise, and which are presently used in
the operation of the Business. Except as disclosed in Schedule 3.16(b), no
interest in any of such trademarks, trade names, copyrights or applications
therefor, or any trade secrets owned or used by the Company, has been assigned,
transferred or licensed to any third party by the Company, and to the best of
the Sellers' knowledge there is no and has not been any infringement or asserted
infringement by the Company of any trademarks, trade names, copyrights or
application therefor of another. Except as disclosed in Schedule 3.16(b), (i) no
claim is pending by the Company against others to the effect that the present or
past operations of such parties infringe upon or conflict with the rights of the
Company, and, to
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the best of the Sellers' knowledge, no reasonable grounds for such action exist,
and (ii) the Sellers are not aware of any pending or threatened cancellation or
revocation of any agreement granting to the Company rights under trademarks,
trade names, copyrights or "know-how" of others.
SECTION 3.17. Title to Properties. The Company has good and marketable
title to all its properties and assets. None of such properties and assets is
subject to any encumbrance or adverse claim of any nature whatsoever, direct or
indirect, whether accrued, absolute, contingent or otherwise, other than liens
imposed by law. All the tangible properties and assets owned or leased by the
Company are in good operating condition and repair, are suitable for the
purposes used, and have been adequate and sufficient for the Company's
operations prior to the date hereof. The Purchaser has had an opportunity to
inspect such tangible properties and assets prior to entering into this
Agreement.
SECTION 3.18. No Guarantees. The Company is not a party to or bound by any
agreement of guarantee, indemnification, assumption, or endorsement or any other
like commitment of the obligations, liabilities (contingent or otherwise) or
indebtedness of any other person, firm or corporation.
SECTION 3.19 Bank Accounts. Schedule 3.19 sets forth the name of each bank
in which the Company has an account or safe deposit box, vault, lock-box or
other arrangement, the account number and description of each account at each
bank and the names of all persons authorized to draw thereon or to have access
thereto; and the names of all persons, if any, holding tax or other powers of
attorney from the Company.
SECTION 3.20. Labor Matters. The Company is not a party to
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any collective bargaining agreement or other labor union contract applicable to
persons employed by it in connection with the operation of the Business.
SECTION 3.21. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Sellers or the Company.
SECTION 3.22. Records. The books of account, minute books, stock
certificate books and stock transfer ledgers of the Company are complete and
correct in all material respects, and there have been no material transactions
involving the Company which are required to be set forth therein and which have
not been so set forth.
SECTION 3.23. No Undisclosed Liabilities. The Company has no liabilities,
whether known or unknown, absolute, accrued, contingent or otherwise, except (a)
as and to the extent reflected or reserved against on the 1995 Balance Sheet,
and (b) those incurred since August 31, 1995 in the ordinary course of business
and consistent with prior practice.
SECTION 3.24 Disclosure. No representation or warranty by the Sellers or
the Company contained in this Agreement and no information contained in any
Schedule or other instrument furnished or to be furnished to the Purchaser
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order to make the statements
contained therein no misleading.
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SECTION 3.25. Survival of Representations and Warranties. The
representations and warranties of the Sellers and the Company set forth in this
Agreement shall survive the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01. Organization of the Purchaser. The Purchaser is a corporation
duly organized, validly existing and in good standing under the law of Delaware.
SECTION 4.02. Authority and Corporate Action. The Purchaser has all
necessary corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate action necessary
to be taken by the Purchaser to authorize the execution, delivery and
performance of this Agreement and all other agreements delivered in connection
with this transaction has been duly and validly taken. Subject to the terms and
conditions hereof, this Agreement constitutes, valid, binding, and enforceable
obligation of the Purchaser, enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, or other laws generally
affecting creditors' rights or as may be modified by a court of equity in an
action for specific performance. The execution, delivery and performance of this
Agreement by the Purchaser does not and will not violate or result in any
default under any provision of the Certificate of Incorporation or By-Laws of
the Purchaser or any material default under any indenture, license, or other
agreement to which the Purchaser is a party or any law, regulation, order, writ,
judgment or decree applicable to it and by which the Purchaser's ability to
consummate the transactions to be consummated by it hereunder would be adversely
affected.
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SECTION 4.03. Investment Intent. The Purchaser is acquiring the Shares for
its own account, and not with any present intention of distributing or selling
the Shares or any part thereof.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending or, to the best knowledge of the Purchaser, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or would, if successful, have a material adverse effect on
the ability of the Purchaser to consummate the transactions contemplated hereby.
SECTION 4.05. Consents and Approvals. The execution and delivery of this
Agreement by the Purchaser do not, and the performance of this Agreement by the
Purchaser will not, require the Purchaser to obtain any consent, approval,
authorization or other action by, or to make any filing with or notification to,
any governmental or regulatory authority, except (i) as described in Schedule
4.05, and (ii) where failure to obtain such consents, approvals, authorizations
or actions, or to make such filings or notifications, would not prevent the
Purchaser from performing any of its obligations under this Agreement.
SECTION 4.06. Purchaser's Financial Statements. The Purchaser has delivered
to the Sellers a consolidated balance sheet of the Purchaser at January 31,
1995, and consolidated statements of income and source and application of funds
for the year then ended, all certified by the Purchaser's Accountants, and the
notes, comments, schedules and supplemental data therein (the "Purchaser's
Audited 1995 Financial Statement"). In addition, the Purchaser has delivered to
the Sellers an unaudited consolidated balance sheet of the Purchaser at July 31,
1995 (the "Purchaser's 1995 Balance Sheet") and statement of income for the six
months then ended (together with the Purchaser's 1995 Balance Sheet, the
"Purchaser's
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Unaudited 1995 Financial Statement"), a copy of which is attached hereto as
Exhibit 4.06. The Purchaser's Audited 1995 Financial Statement and the
Purchaser's Unaudited 1995 Financial Statement have been prepared in accordance
with GAAP throughout the periods indicated and fairly present the consolidated
financial position of the Purchaser at their respective dates.
SECTION 4.07. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transaction contemplated by this Agreement based upon arrangements made by or on
behalf of the Purchaser.
SECTION 4.08. Survival of Representations and Warranties. The
representations and warranties of the Purchaser set forth in this Agreement
shall survive the Closing.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business. The Sellers and the Company covenant and
agree that, from the date hereof through the Closing Date, except as otherwise
set forth in this Agreement, they shall, and shall use their best efforts to
cause the Company to:
(a) conduct the Business only in the ordinary course and in a manner
consistent with the current practice of the Business, to preserve substantially
intact the business organization of the Company, to keep available the services
of the current employees of the Company, to preserve the current relationships
of the Company with customers and other persons with which the Company has
significant business relations with respect to the Business and to comply with
all Regulations the violation of which would have a
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material adverse effect on the Company or the Business;
(b) not pledge, sell, transfer, dispose or otherwise encumber or grant
any rights or interests to others of any kind with respect to all or any part of
the Shares or enter into any discussions or negotiations with any other party to
do so;
(c) not pledge, sell, lease, transfer, dispose of or otherwise
encumber any property or assets of the Company other than consistent with past
practices and in the ordinary course of business of the Company or enter into
any discussions or negotiations with any other party to do so;
(d) not issue any shares of capital stock of the Company (the "Company
Stock"), any securities convertible into or exchangeable for Company Stock, or
any other class of securities, whether debt (other than debt incurred in the
ordinary course of business and consistent with past practice) or equity, of the
Company;
(e) not declare any dividend or make any distribution in cash,
securities or otherwise on the outstanding shares of Company Stock or directly
or indirectly redeem or purchase any Company Stock;
(f) not, in any manner whatsoever, advance, transfer (other than in
payment for goods received or services rendered in the ordinary course of
business), or distribute to the Sellers or any of their affiliates or otherwise
withdraw, cash or cash equivalents in any manner inconsistent with established
cash management practices, except to pay existing indebtedness of the Company;
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(g) not make, agree to make or announce any general wage or salary
increase or enter into any employment contract or, unless provided for on or
before the date of this Agreement, increase the compensation payable or to
become payable to any officer or employee of the Company or adopt or increase
the benefits of any bonus, insurance, pension or other employee benefit plan,
payment or arrangement, except for those increases, consistent with past
practices, normally occurring as the result of regularly scheduled salary
reviews and increases, and except for increases directly or indirectly required
as a result of changes in applicable law or regulations; and
(h) not make any capital expenditures.
SECTION 5.02. Access to Information; Confidentiality.
(a) Between the date of this Agreement and the Closing Date, the
Sellers and the Company will (i) permit the Purchaser and its Representatives
reasonable access to all of the books, records, reports and other related
materials, offices and other facilities and properties of the Company and the
Business; (ii) permit the Purchaser and its Representatives to make such
inspections thereof as the Purchaser may reasonably request; and (iii) furnish
the Purchaser and its Representatives with such financial and operating data
(including without limitation the work papers of the Company's Accountants) and
other information with respect to the Company and the Business as the Purchaser
may from time to time reasonably request.
(b) Between the date of this Agreement and the Closing Date, the
Purchaser may meet with and interview all registered representatives and other
employees of the Company, but only in the presence of one or both of the
Sellers. Prior to the
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Closing Date, the Purchaser shall not communicate with or interfere with any of
the Company's customers who are not separately customers of the Purchaser or its
subsidiaries or otherwise unreasonably interfere with the Company's ability to
conduct or operate its business, without the prior written approval of the
Sellers.
(c) The Sellers and the Company, on the one hand, and the Purchaser,
on the other hand, shall hold and shall cause their respective Representatives
to hold in strict confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all documents and
information concerning the other Party furnished it by such other Party or its
Representatives in connection with the transactions contemplated by this
Agreement (except to the extent that such information can be shown to have been
(a) previously known by the Party to which it was furnished, (b) in the public
domain through no fault of such Party or (c) later lawfully acquired from other
sources, which source is not the agent of the other Party, by the Party to which
it was furnished), and each Party shall not release or disclose such information
to any other person, except its auditors, actuaries, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. Each Party shall be deemed to have satisfied its obligations to hold
confidential information concerning or supplied by the other Party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
SECTION 5.03. Books and Records.
(a) On and after the Closing Date Purchaser will permit the Sellers
and their Representatives, during normal business hours, to have access to and
to examine and make copies of
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all books and records of the Company which are delivered to the Purchaser
pursuant to this Agreement and which relate to the Business or the Company or to
events occurring prior to the Closing Date or to transactions or events
occurring subsequent to the Closing Date which arise out of transactions or
events occurring prior to the Closing Date to the extent reasonably necessary to
the Sellers in connection with preparation of Tax Returns, Tax audits,
government or regulatory investigations, lawsuits or any other matter in which
the Sellers are a party to the proceeding or in which they have a reasonable
business interest. Additionally, the Sellers will have the right to reasonably
examine all books and records of the Purchaser to the extent that they relate to
amounts due to the Sellers hereunder.
(b) Purchaser shall preserve and keep all books and records with
respect to the Company and the Business for a period of at least seven years
from the Closing Date. After such seven year period, before the Purchaser shall
dispose of any such books and records, at least 90 days' prior written notice to
such effect shall be given by the Purchaser to the Sellers, and the Sellers
shall be given an opportunity, at their cost and expense, to remove and retain
all or any part of such books or records as they may select.
(c) The Parties will provide each other with such cooperation and
information as either of them reasonably may request of the other in filing any
Tax return, amended return or claim for refund, determining a liability for
Taxes or a right to refund of Taxes, preparation for litigation or investigation
of claims in conducting any audit or other proceeding in respect of Taxes. Such
cooperation and information shall include providing copies of all relevant Tax
returns, documents and records, or portions thereof, relating exclusively to the
Business (but not
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including income or franchise tax returns or portions thereof). Each Party shall
make its employees available on a mutually convenient basis to provide
explanation of any documents or information provided hereunder. Notwithstanding
Section 6.03(b), each Party will retain all returns, schedules and work papers
and all material records or other documents relating to Tax matters of the
Business for the taxable year of the Sellers ending after the Closing Date and
for all previous years, until the expiration of the statute of limitations of
the taxable years to which such returns and other documents relate (and, to the
extent notified by the other Party in writing, any extensions thereof). Any
information obtained under this Section 5.03(c) shall be kept confidential,
except as may be otherwise necessary in connection with the filing of returns or
claims for refund or in conducting an audit or other proceeding.
(d) If in order to properly prepare documents required to be filed
with governmental authorities or its financial statements, it is necessary that
either Party be furnished with additional information relating to the Company or
the Business, and such information is in the possession of the other Party, such
Party agrees to use its best efforts to furnish such information in a timely
manner to such other Party, at the cost and expense of the Party being furnished
such information.
SECTION 5.04. Regulatory and Other Authorizations. Within ten days after
the execution of this Agreement, the Purchaser, at its expense, will promptly
make all necessary filings and use its best efforts to obtain all
authorizations, consents, orders and approvals of all Federal, state and other
regulatory bodies and officials that are required for the transfer of the Shares
pursuant to this Agreement and the Sellers and the Company will cooperate fully
with the Purchaser in connection therewith. Should the
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Purchaser be unable to obtain the authorizations, consents, orders and approvals
due to its own conduct or affairs, then, and in such event, the Deposit shall
promptly be tendered to the Sellers as and for liquidated damages and this
Agreement shall thereupon terminate and no Party shall be under further
obligation hereunder.
SECTION 5.05. Insurance. Through the Closing Date, the Sellers shall cause
the Company to maintain insurance policies providing insurance coverage for the
Business and the assets of the Company of the kinds, in the amounts and against
the risks as are commercially reasonable for the businesses and risks covered.
After the Closing Date, the Purchaser shall provide all insurance coverage for
the Business.
SECTION 5.06. Mail Received After Closing.
(a) If the Purchaser or the Company receives after the Closing any
mail or other communications addressed to the Sellers, the Purchaser may open
such mail or other communications and deal with the contents thereof in its
discretion to the extent that such mail or other communications and the contents
thereof relate to the Company. The Purchaser agrees to deliver promptly or cause
to be delivered to the Sellers all other mail addressed to the Sellers and the
contents thereof which does not relate to the Company or the Business.
(b) If the Sellers receive after the Closing Date mail or other
communications addressed to the Sellers which relate to the Company, the Sellers
shall promptly deliver or cause to be delivered all such mail and the contents
thereof to the Purchaser.
SECTION 5.07. Consultation; Commissions. For a period of three months from
the Closing Date (which period may be extended
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for a further three months by mutual agreement), each of the Sellers shall make
themselves available, for up to 20 hours per week each, to the Purchaser and the
Company to assist them in their relationships with the Company's customers and
to provide such assistance to be given in such manner as the Purchaser may
reasonably request with respect to other matters pertaining to the Company and
the Business. In consideration for such services, the Company shall pay to each
Seller the sum of $5,000 per month. In addition, for the twelve month period
after the Closing Date, the Company shall pay each Seller brokerage commissions
at the rate of 60% of the gross commissions received by the Company with respect
to all personal and immediate family (spouse and children) related trades
effected by such Seller and at the rate of 50% of the gross commissions received
by the Company with respect to trades effected by such Seller for all other
clients (including 12B-1 fees). After the conclusion of such twelve month
period, the Sellers shall be paid brokerage commissions at rates in effect for
the Company's registered representatives generally.
SECTION 5.08. Protection of Confidential Information; Non- Competition.
(a) Confidential Information. Each of the Sellers acknowledges that:
(i) As a result of the Sellers' stock ownership in and employment
by the Company, Sellers have obtained secret and confidential information
concerning the business of the Company, including, without limitation, financial
information, trade secrets and "know-how," customers, and certain methodologies
("Confidential Information").
(ii) The Company will suffer substantial damage
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which will be difficult to compute if Sellers should divulge Confidential
Information or enter a business competitive with that of the Company.
(iii) The provisions of this Section are reasonable and necessary
for the protection of the business of the Company.
(b) Maintain Confidentiality. Each of the Sellers agrees that he or
she will not at any time after the date hereof divulge to any person or entity
any Confidential Information obtained or learned by him or her as a result of
his or her stock ownership in and employment by the Company, except (a) with the
Company's express written consent; (b) to the extent that any such information
is in the public domain other than as a result of Seller's breach of any of his
or her obligations hereunder; or (c) where required to be disclosed by court
order, subpoena or other government process. If a Seller shall be required to
make disclosure pursuant to the provisions of clause (c) of the preceding
sentence, such Seller promptly, but in no event more than 72 hours after
learning of such subpoena, court order, or other government process, shall
notify, by personal delivery or by electronic means, confirmed by mail, the
Company and, at the Company's expense, such Seller shall: (i) take all
reasonably necessary steps required by the Company to defend against the
enforcement of such subpoena, court order or other government process, and (ii)
permit the Company to intervene and participate with counsel of their choice in
any proceeding relating to the enforcement thereof. This shall not preclude such
Seller from obtaining counsel of his or her own choosing, at his or her expense,
and the Purchaser and the Company shall reasonably cooperate with such Seller
and his or her counsel.
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(c) Records. At the Closing, the Sellers will promptly deliver to the
Company all original memoranda, notes, records, reports, manuals, formula and
other documents relating to the business of the Company and all property
associated therewith, which they now possesses or have under their control;
provided, however, that Sellers shall be entitled to retain copies of such
documents reasonably necessary to document their financial relationship with the
Company.
(d) Non-Compete. During the five-year period beginning with the
Closing Date, neither Seller, without the prior written permission of the
Company, shall, anywhere in the State of Florida, directly or indirectly, (a)
enter into the employ of or render any services to any person, firm or
corporation engaged in any business which is a "Competitive Business" (as
defined below); (b) engage in any Competitive Business for his or her own
account; (c) become associated with or interested in any Competitive Business as
an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, trustee, consultant, advisor or in any other relationship or
capacity; (d) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by the Company in the
six-month period prior to the date hereof or between the date hereof and the
Closing Date; or (e) solicit, interfere with, or endeavor to entice away from
the Company, for the benefit of a Competitive Business, any of its customers or
other persons with whom the Company has a business relationship. However,
nothing in this Agreement shall preclude the Sellers from investing their
personal assets in the securities of any corporation or other business entity
which is engaged in a Competitive Business if such securities are traded on a
national stock exchange or in the over-the-counter market and if such investment
does not result in their beneficially owning, at any time, more than 1% of the
publicly-
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traded equity securities of such Competitive Business. In the event of a
material breach or default in payment by the Purchaser under this Agreement or
the Note, the provisions of this Section 5.08(d) and Section 5.10 shall
immediately terminate.
(e) Injunctive Relief. If a Seller breaches, or threatens to breach,
any of the provisions of Sections 5.08 (b), (c) or (d), the Company shall have
the right and remedy to have the provisions of this Section 5.08 specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed by the Sellers that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy in the Company.
(f) Modification of Scope. If any provision of Sections 5.08 (b) or
(d) is held to be unenforceable because of the scope, duration or area of its
applicability, the tribunal making such determination shall have the power to
modify such scope, duration, or area, or all of them, and such provision or
provisions shall then be applicable in such modified form.
(g) Competitive Business. As used in this Agreement, the term
"Competitive Business" shall mean all aspects of the securities business,
including but not limited to the retail securities business and any other
activity which would require registration on Form BD with the United States
Securities and Exchange Commission.
SECTION 5.09. Transfer of Clients. From and after the date of Marvin
Shochet's retirement as a registered representative, the Sellers shall use their
best efforts to effectuate a transfer of the retail securities business of their
personal clients to a registered representative or representatives designated by
the
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Purchaser. In no event shall a Seller refer any of their personal clients to a
brokerage firm other than the Company or an affiliate of the Purchaser even if
requested by a client.
SECTION 5.10. Non-Use of Name. From and after the date hereof, neither
Seller shall establish or otherwise be associated with, as an owner, partner,
shareholder, employee or otherwise, any firm engaged in any aspect of the
securities business which utilizes the name "Shochet" or any variant thereof as
part of its business name other than the Company or grant to any other person or
entity the right to use the name "Shochet" or any variant thereof in connection
with any aspect of the securities business.
SECTION 5.11. Further Action. Each of the Parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Upon the terms and subject to the conditions hereof, each
of the Parties shall use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
SECTION 5.12. Schedules. The Parties shall have the obligation to
supplement or amend the Schedules being delivered concurrently with the
execution of this Agreement and annexed hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules. The obligations of the Parties to amend or supplement the Schedules
being delivered herewith shall terminate on the Closing Date. Notwithstanding
any such amendment or supplementation, for purposes of Sections 6.01(a) and
6.02(a), the representations and warranties
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of the Parties shall be made with reference to the Schedules as they exist at
the time of execution of this Agreement.
SECTION 5.13. Post-Closing Assurances. The Sellers from time to time after
the Closing, at the Purchaser's request, will take such other actions and
execute and deliver such other documents, certifications and further assurances
as Purchaser may reasonably require in order to manage and operate the Company
and the Business, including but not limited to executing such certificates as
may be reasonably requested by the Purchaser's Accountants in connection with
any audit of the financial statements of the Company for any period through the
Closing Date. Each of the parties hereto will cooperate with the other and
execute and deliver to the other such other instruments and documents and take
such other actions as may be reasonably requested from time to time by the other
party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.
SECTION 5.14. Company Automobiles. At or before the Closing, the Company
shall convey and transfer to the Seller's the two Lexus automobiles currently
owned by the Company.
SECTION 5.15. Stock Options. If, during the five-year period beginning on
the Closing Date, the Purchaser makes an initial public offering of its common
stock pursuant to the Securities Act of 1933, on the effective date of such
public offering the Purchaser shall issue to the Sellers five-year options to
purchase 25,000 shares of common stock of the Purchaser exercisable at the
initial public offering price, in accordance with the terms and conditions set
forth in the form of stock option agreement annexed hereto as Exhibit B.
ARTICLE VI
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CONDITIONS TO CLOSING
SECTION 6.01. Conditions to Obligations of the Sellers. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct as of the Closing, with the same force and effect as if made as of the
Closing, and all the covenants contained in this Agreement to be complied with
by the Purchaser on or before the Closing Date shall have been complied with,
and the Sellers shall have received a certificate of the Purchaser to such
effect signed by a duly authorized officer thereof;
(b) Litigation. No order, stay, judgment or decree shall have been
issued by any court restraining or prohibiting the consummation of the
transactions contemplated hereby; and
(c) Legal Opinion. The Sellers shall have received from Graubard
Mollen Horowitz Pomeranz & Shapiro, counsel to the Purchaser, a legal opinion
addressed to the Sellers and dated the Closing Date, in form of Exhibit C
annexed hereto.
(d) No Adverse Change. At the Closing, there shall have been no
material adverse change in the assets, liabilities, financial condition or
business of the Purchaser from that shown or reflected in the Purchaser's 1995
Balance Sheet and the related statement of income. Between the date of this
Agreement and the Closing Date, there shall not have occurred an event which, in
the reasonable opinion of the Sellers, materially and adversely affects
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or may materially or adversely affect the operations or prospects of the
Purchaser or its business. Notwithstanding the foregoing, the Purchaser may
repurchase shares of its outstanding capital stock from the holders thereof.
SECTION 6.02. Conditions to Obligations of the Purchaser. The obligations
of the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Sellers and the Company contained in this Agreement shall be
true and correct as of the Closing, with the same force and effect as if made as
of the Closing, and all the covenants contained in this Agreement to be complied
with by the Sellers or the Company on or before the Closing Date shall have been
complied with, and the Purchaser shall have received a certificate of the
Sellers to such effect;
(b) Litigation. No order, stay, judgment or decree shall have been
issued by any court restraining or prohibiting the consummation of the
transactions contemplated hereby and no action or proceeding shall be pending or
threatened by any person, firm, corporation, or governmental authority which
questions, or seeks to enjoin or prohibit (a) the purchase and sale of the
Shares or (b) the right of the Company to conduct its operations and carry on
its Business in the normal course and in accordance with past practice;
(c) Legal Opinion. The Purchaser shall have received from Gerald E.
Cowen, Esq., counsel to the Sellers, a legal opinion addressed to the Purchaser,
dated the Closing Date, in form of Exhibit D annexed hereto;
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(d) Consents. The Sellers shall have obtained and delivered to the
Purchaser consents of all third parties required by the Leases, Contracts and
Permits set forth in Schedule 6.02 (d);
(e) Resignations. The Sellers shall have delivered to the Purchaser
resignations executed by each officer, director and attorney-in-fact of the
Company and Employee Benefit Plan or Employee Welfare Plan trustee or
administrator from all of his or her offices and positions;
(f) Regulatory Approvals. The NASD and the Florida Department and any
other governmental agency whose approval or consent is required each shall have
unconditionally approved of the transactions contemplated by this Agreement and
the Purchaser shall have received written confirmation thereof;
(g) Clearing Agent. Schroder Wertheim shall have agreed in writing to
act as clearing agent for the Company and to charge the Company fees for its
services not in excess of those set forth in Schedule 6.02(g);
(h) Customer Complaints. There shall not have been lodged against the
Company or any of its registered representatives between the date hereof and the
Closing Date customer complaints as to which notification must be given on Form
U-4 which, individually or in the aggregate, in the reasonable judgment of
Purchaser, may have a material adverse effect upon the Company or its Business;
(i) Performance of Agreements. All covenants, agreements and
obligations required by the terms of this Agreement to be performed by the
Sellers or the Company at or prior to the Closing shall have been duly and
properly performed or fulfilled in
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all material respects;
(j) No Adverse Change. At the Closing, there shall have been no
material adverse change in the assets, liabilities, financial condition or
Business of the Company from that shown or reflected in the 1995 Balance Sheet
and the related statement of income. Between the date of this Agreement and the
Closing Date, there shall not have occurred an event which, in the reasonable
opinion of the Purchaser, materially and adversely affects or may materially or
adversely affect the operations or prospects of the Company or the Business;
(k) Supplemental Disclosure. If the Sellers shall have supplemented or
amended any Schedule pursuant to their obligations set forth in Section 5.12 in
any material respect, the Purchaser shall not have given notice to Sellers that,
as a result of information provided to the Purchaser in connection with any or
all of such amendments or supplements, the Purchaser has determined not to
proceed with the consummation of the transactions contemplated hereby;
(l) Necessary Proceedings. All proceedings, corporate or otherwise, to
be taken by the Sellers and the Company in connection with the consummation of
the transactions contemplated by this Agreement shall have been duly and validly
taken, and copies of all documents, resolutions and certificates incident
thereto, duly certified by the Sellers or officers of the Company, as
appropriate, as of the Closing, shall have been delivered to the Purchaser;
(m) Administrative Complaint. The Administrative Complaint filed by
the Florida Department against the Company and others on or about February 15,
1994 (Administrative Proceeding
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Numbers 1625-S-1/92, 1625a-S-1/92, 1625b-S-1/92 and 1625c-S-1/92) shall have
been resolved in a manner satisfactory to the Purchaser in its sole judgment;
and
(n) Customer List. The Sellers shall have caused Schroder Wertheim to
deliver to the Purchaser a complete list, as of a date no earlier than five
Business Days prior to the Closing Date, broken down by responsible registered
representative, of all of the customers of the Company who have effected
transactions through the Company since January 1, 1993, which shall show the
aggregate dollar amount of purchases and sales by each such customer during such
period.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Indemnification by the Sellers.
(a) The Sellers shall jointly and severally indemnify and hold
harmless the Purchaser and the Company from and against, and shall reimburse the
Purchaser and the Company for, any Damages which may be sustained, suffered or
incurred by them, whether as a result of any Third Party Claim or otherwise, and
which arise from or in connection with or are attributable to (i) the breach of
any of the Sellers' covenants, representations, warranties, agreements,
obligations or undertakings contained in this Agreement or (ii) the operation of
the Company or the Business on or prior to the Closing Date. This indemnity
shall survive the Closing.
(b) The Purchaser shall have the right to deduct from its payment on
the Note the amount of any indemnification payment(s) required to be paid by the
Sellers under this Section
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7.01.
SECTION 7.02. Indemnification by the Purchaser. The Purchaser shall
indemnify and hold harmless the Sellers from and against, and shall reimburse
the Sellers for, any Damages which may be sustained, suffered or incurred by the
Sellers, whether as a result of Third Party Claims or otherwise, and which arise
or result from or in connection with or are attributable to (i) the breach of
any of the Purchaser's covenants, representations, warranties, agreements,
obligation or undertakings contained in this Agreement or (ii) the operation of
the Company or the Business after the Closing Date. This indemnity shall survive
the Closing.
SECTION 7.03 Notice, etc. A party required to make an indemnification
payment pursuant to this Agreement ("Indemnifying Party") shall have no
liability with respect to Third Party Claims or otherwise with respect to any
covenant, representation, warranty, agreement, undertaking or obligation under
this Agreement unless the party entitled to receive such indemnification payment
("Indemnified Party") gives notice to the Indemnifying Party specifying (i) the
covenant, representation or warranty, agreement, undertaking or obligation
contained herein which it asserts has been breached, (ii) in reasonable detail,
the nature and dollar amount of any Claim the Indemnified Party may have against
the Indemnifying Party by reason thereof under this Agreement, and (iii) whether
or not the Claim is a Third Party Claim. With respect to Third Party Claims, an
Indemnified Party (a) shall give the Indemnifying Party prompt notice of any
Third Party claim, (b) prior to taking any action with respect to such Third
Party Claim, shall consult with the Indemnifying Party as to the procedure to be
followed in defending, settling, or compromising the Third Party Claim, (c)
shall not consent to any settlement or compromise of the Third Party Claim
without the written consent of the Indemnifying
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Party (which consent shall not be unreasonably withheld or delayed). If the
Indemnified Party will assume the defense of a Third Party Claim, the
Indemnifying Party will not compromise or settle any such Third Party Claim
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed) if the relief provided is other than monetary
damages.
SECTION 7.04. Adjustment to Purchase Price. Any indemnification payments
made pursuant to Sections 7.01 and 7.02 shall be deemed to be an adjustment to
the Purchase Price.
ARTICLE VIII
TERMINATION AND ABANDONMENT
SECTION 8.01. Methods of Termination. The transactions contemplated herein
may be terminated and/or abandoned at any time but not later than the Closing:
(a) By mutual written consent of the Purchaser and the Sellers;
(b) By either the Sellers or the Purchaser if a material default or
breach shall be made by the other Party with respect to the due and timely
performance of any of its covenants and agreements contained herein, or with
respect to the due compliance with any of the other Party's representations and
warranties, and such default cannot be cured and has not been waived;
(c) By the Purchaser if the Sellers amend or supplement any Schedule
hereto in accordance with Section 5.12 hereof and such amendment or supplement
constitutes a material
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adverse change in the condition or operations of the Company or the
Business after the date hereof; or
(d) By the Purchaser or the Sellers if the Closing has not occurred
within 90 days of the date hereof for any reason unless the Parties agree to an
extension in writing.
SECTION 8.02. Effect of Termination. In the event of termination and
abandonment by the Purchaser or by the Sellers, or both, pursuant to Section
8.01 hereof, written notice thereof shall forthwith be given to the other Party
and all further obligations of the Parties shall terminate, no Party shall have
any right against the other Party hereto, except as set forth in this Section
8.02, and each Party shall bear its own costs and expenses, except that if this
Agreement is so terminated by one Party because one or more of the conditions to
such Party's obligations hereunder is not satisfied as a result of the other
Party's failure to comply with its obligations under this Agreement (other than
a failure by Sellers, after the good faith exercise of reasonable best efforts,
to obtain any consent, approval or other permission required pursuant to
Sections 6.02(d) and (f)), it is expressly agreed and understood that the
terminating Party's right to pursue all legal remedies for breach of contract or
otherwise, including, without limitation, damages relating thereto, shall
survive such termination unimpaired. If the transactions contemplated by this
Agreement are terminated and/or abandoned as provided herein:
(a) Each Party hereto will return all documents, work papers and other
material (and all copies thereof) of the other Party, and, in the case of the
Purchaser, of the Company, relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the Party
furnishing the same;
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(b) All confidential information received by either Party hereto with
respect to the business of the other Party, or in the case of the Sellers, of
the Company, hereto shall be treated in accordance with Section 5.02(c) hereof.
ARTICLE IX
DEFINITIONS
SECTION 9.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Adjustment Period" means the first six full calendar months following the
month in which the Closing occurs.
"Audited 1994 Financial Statement" has the meaning specified in Section
3.05.
"Average Monthly Adjustment Period Revenue" has the meaning specified in
Section 1.04(a).
"Business" has the meaning specified in the preamble hereof.
"Business Day" means a day of the year on which banks are not required or
authorized to be closed in the City of New York.
"Closing" has the meaning specified in Section 2.01.
"Closing Date" means the date specified in Article II on which the Closing
shall take place.
"Closing Payment" has the meaning specified in Section 1.03(b).
44
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"Code" means the Internal Revenue Code of 1986, as amended.
"Company's Accountants" means William M. Lapsley & Company, P.A.
"Company Stock" has the meaning specified in Section 5.01(d).
"Confidential Information" has the meaning specified in Section 5.08(a).
"Contracts" has the meaning specified in Section 3.08 (b).
"Damages" means the dollar amount of any loss, damage, expense or
liability, including, without limitation, reasonable attorneys' fees and
disbursements incurred by an Indemnified Party in any action or proceeding
between the Indemnified Party and the Indemnifying Party or between the
Indemnified Party and a third party, which is determined (as provided in Article
VII) to have been sustained, suffered or incurred by a Party or the Company and
to have arisen from or in connection with an event or state of facts which is
subject to indemnification under this Agreement; the amount of Damages shall be
the amount finally determined by a court of competent jurisdiction or
appropriate governmental administrative agency (after the exhaustion of all
appeals) or the amount agreed to upon settlement in accordance with the terms of
this Agreement, if a Third Party Claim, or by the parties, if a Direct Claim.
"Deposit" has the meaning specified in Section 1.03(a).
"Direct Claim" means any claim other than a Third Party Claim.
"Employee Benefit Plans" has the meaning specified in Section
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3.14.
"Employee Welfare Plans" has the meaning specified in Section 3.14.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" has the meaning specified in Section 1.03(a).
"Financial Statements" has the meaning specified in Section 3.05.
"Florida Department" means the Department of Banking and Finance, Division
of Securities and Investor Protection, of the State of Florida.
"GAAP" means generally accepted accounting principles, consistently applied
in the United States.
"Indemnified Party" has the meaning specified in Section 7.03.
"Indemnifying Party" has the meaning specified in Section 7.03.
"Leases" has the meaning specified in Section 3.08 (a).
"Lien" has the meaning specified in Section 2.02.
"NASD" means National Association of Securities Dealers, Inc.
"Net Liquid Assets" means the sum of the sum of the Company's current
assets, including prepaid expenses, and security deposits
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less the Company's total liabilities, all determined in the same manner as such
items were determined in the preparation of the 1995 Balance Sheet.
"1995 Balance Sheet" has the meaning specified in Section 3.05.
"Note" has the meaning specified in Section 1.03(c).
"Party" means the Purchaser, on the one hand, and the Sellers and/or the
Company, on the other hand (collectively, "Parties").
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permits" has the meaning specified in Section 3.06.
"Purchase Price" has the meaning specified in Section 1.03.
"Purchaser's Accountants" means KPMG Peat Marwick LLP or any successor firm
appointed by the Purchaser.
"Purchaser's Audited 1995 Financial Statement" has the meaning specified in
Section 4.06.
"Purchaser's 1995 Balance Sheet" has the meaning specified in Section 4.06.
"Purchaser's Unaudited 1995 Financial Statement" has the meaning specified
in Section 4.06.
"Regulations" has the meaning specified in Section 3.04.
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"Representatives" of either Party means such Party's employees,
accountants, auditors, actuaries, counsel, financial advisors, bankers,
investment bankers and consultants.
"Retention Period" has the meaning specified in Section 1.05(a).
"Retention Threshold" has the meaning specified in Section 1.05(b).
"Shares" has the meaning specified in Section 1.01.
"Tax" or "Taxes" means all income, gross receipts, sales, stock transfer,
excise, bulk transfer, use, employment, franchise, profits, property or other
taxes, fees, stamp taxes and duties, assessments, levies or charges of any kind
whatsoever (whether payable directly or by withholding), together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority with respect thereto.
"Third Party Claim" means a claim, demand, suit, proceeding or action
("Claim") by a person, firm, corporation or government entity other than a party
hereto or any affiliate of such party.
"Unaudited 1995 Financial Statement" has the meaning specified in Section
3.05.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses. Except as otherwise provided herein, all costs and
expenses, including, without limitation, fees and disbursements of
Representatives, incurred in connection with
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this Agreement and the transactions contemplated hereby shall be paid by the
Party incurring such costs and expenses, whether or not the Closing shall have
occurred. The Sellers shall pay all such expenses incurred by the Company.
SECTION 10.02. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally or by
nationally recognized courier or mailed by registered mail (postage prepaid,
return receipt requested) or by telecopy to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
(a) If to the Sellers:
Marvin Shochet and Sally Shochet
19195 Mystic Point Drive - Apt. 1707
Aventura, Florida 33180
Telecopier No.:__________________
with a copy to:
Gerald E. Cowen, Esq.
950 S. Federal Highway
Hollywood, Florida 33020
Telecopier No.: 305-921-1713
(b) If to the Purchaser:
GKN Holding Corp.
61 Broadway
New York, New York 10006
Attention: Peter Kent
Telecopier No.: 212-363-4284
with a copy to:
Graubard Mollen Horowitz Pomeranz & Shapiro
600 Third Avenue
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New York, New York 10016
Attention: David Alan Miller, Esq.
Telecopier No.: 212-687-6989
SECTION 10.03. Press Release; Public Announcements. The Parties shall not
make any public announcements in respect of this Agreement or the transactions
contemplated herein without prior consultation and approval as to the form and
content thereof, except to the extent required by law.
SECTION 10.04. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by the Parties.
SECTION 10.05. Waiver. At any time prior to the Closing, either Party may
(a) extend the time for the performance of any of the obligations or other acts
of the other Party, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the Party to be bound thereby.
SECTION 10.06. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.07. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
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adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.08. Entire Agreement. This Agreement and the Schedules and
Exhibits hereto constitute the entire agreement and supersede all prior
agreements and undertakings, both written and oral, between the Sellers and the
Purchaser with respect to the subject matter hereof and, except as otherwise
expressly provided herein, are not intended to confer upon any other person any
rights or remedies hereunder.
SECTION 10.09. Benefit. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Parties.
SECTION 10.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Florida.
SECTION 10.11. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which when
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first written above.
GKN HOLDING CORP.
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By:____________________________
Name:
Title:
-------------------------------
MARVIN SHOCHET
-------------------------------
SALLY SHOCHET
SHOCHET SECURITIES, INC.
By:____________________________
Name: Marvin Shochet
Title: President
The undersigned agrees to act as Escrow Agent pursuant to the provisions of
Section 1.03(a) of the above Agreement.
GRAUBARD MOLLEN HOROWITZ
POMERANZ & SHAPIRO
By:____________________________
Title: Partner
-------------------------
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EXHIBIT B
STOCK OPTION AGREEMENT
AGREEMENT, made as of [effective date of initial public offering] between
GKN HOLDING CORP., a Delaware corporation ("Company"), and MARVIN SHOCHET and
SALLY SHOCHET as joint tenants with right of survivorship (collectively, the
"Optionee").
IT IS AGREED:
1. The Company hereby grants to the Optionee the right and option to
purchase all or any part of an aggregate of 25,000 shares of the common stock of
the Company, $.01 par value ("Common Stock") on the terms and conditions set
forth herein ("Option"). The Option is a non-qualified stock option, not
intended to qualify under any section of the Internal Revenue Code of 1986, as
amended.
2. The purchase price of each share of Common Stock subject to the Option
("Option Shares") is [the price at which the Common Stock is offered to the
public at the initial public offering price. If the initial public offering
consists of units of shares of Common Stock and warrants to purchase such
shares, no value shall be attributed to the warrants in determining the initial
public offering price of the Common Stock.]
3. This Option is exercisable until the close of business on the fifth
anniversary of the day and year first above written.
4. Optionee will not have any of the rights of a stockholder with respect
to the Option Shares until the Option Shares have been issued.
5. In the event of a reorganization, recapitalization, reclassification,
stock split or exchange, stock dividend, combination of shares or any other
similar change in the Common Stock of the Company as a whole, the Board of
Directors of the Company will make such equitable,
<PAGE>
proportionate adjustments, in the number and kind of shares covered by the
Option and in the option price thereunder, in order to preserve Optionee's
proportionate interest in the Company and to maintain the aggregate option
price. [Note: This provision shall also apply to such events occurring between
Closing Date of Stock Purchase Agreement and effective date of initial public
offering.]
6. The Company hereby represents and warrants to Optionee that the Option
Shares, when issued and delivered by the Company to Optionee in accordance with
the terms and conditions hereof, will be duly and validly issued and fully paid
and nonassessable.
7. The Optionee hereby represents and warrants to the Company that it is
acquiring the Option and shall acquire the Option Shares for its own account and
not with a view towards the distribution thereof.
8. Anything in this Agreement to the contrary notwithstanding, the Optionee
agrees that it shall not sell, transfer by any means or otherwise dispose of the
Option or Option Shares acquired by it without registration under the Securities
Act of 1933 (the "Act"), or in the event that they are not so registered, unless
(a) an exemption from the Act thereunder, and (b) Optionee has furnished the
Company with notice of such proposed transfer and the Company's legal counsel,
in its reasonable opinion, shall deem such proposed transfer to be so exempt.
9. (a) Until the Option expires the Optionee shall have the right to
"piggyback" the Option Shares upon any registration statement filed by the
Company after the date of this Agreement, other than registration statements on
Form S-8 or S-4; provided, however, that if the offering to which such
registration statement relates is underwritten by an unaffiliated third-party
underwriter and such underwriter objects in writing to the inclusion of the
Option Shares, then Optionee shall not be entitled to piggyback onto such
registration statement. The Company shall bear the cost and expenses (other than
Optionee's professional fees and commissions on the sale of the Option Shares)
of piggybacking Optionee's Option Shares onto any such registration statement.
The Company shall give Optionee at least fifteen days notice of its intent to
file any such registration statement and Optionee shall advise the Company of
its decision to exercise its
2
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registration rights within five days of its receipt of such notice.
(b) Notwithstanding the foregoing, (i) the Company shall have no
obligation hereunder in connection with any registration statement or amendment
thereto unless the Optionee provides to the Company information with respect to
their ownership of the Option Shares, manner or proposed disposition and such
other matters as the Company shall reasonably request for disclosure in the
registration statement or any amendment thereto; (ii) the foregoing registration
rights are not assignable and shall be exercisable only at such time when the
Optionee cannot publicly sell any of the Option Shares under an exemption from
registration requirements of the Act; and (iii) the Company shall not be
obligated to register any Option Shares unless such registration is permitted by
law and the policy of the Securities and Exchange Commission. The Company's
obligations hereunder shall also be subject to the rights of other persons who,
as of the date of this Agreement, hold similar rights with respect to the
registration of the Company's securities.
(c) Optionee and the Company shall provide each other with such
customary indemnity agreements as counsel for the Company shall reasonably
request.
10. Optionee hereby acknowledges that:
(a) If it exercises the Option, Optionee may have to bear the economic
risk of the investment in the Option Shares for an indefinite period of time
because the Option Shares may not have been registered under the Act and cannot
be sold unless they are registered under the Act or an exemption therefrom is
available thereunder.
(b) Optionee has had both the opportunity to ask questions of and
receive answers from the officers and directors of the Company and all persons
acting on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the Company
possesses or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of the information about the
Company provided to it.
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(c) The Company shall place stop transfer orders with its transfer
agent against the transfer of, and appropriate legends on, the Option Shares in
the absence of registration under the Act or an exemption therefrom.
(d) The Optionee is an "accredited investor", as such term is defined
in Regulation D, promulgated under the Securities Act of 1933, as amended.
11. Subject to the terms and conditions of the Agreement, the Option may be
exercised by written notice to the Company at its principal place of business,
which (i) states the election to exercise the Option and the number of Option
Shares in respect to which its is being exercised, (ii) contains a
representation and agreement by the Optionee that the Option Shares are being
purchased for investment and not with a view to the distribution or resale
thereof, and (iii) is signed by both persons who constitute the Optionee. The
notice shall be accompanied by payment of the full purchase price of the Option
Shares to be purchased in cash or by check, bank draft or money order payable to
the order of GKN Holding Corp. The Company will issue a certificate or
certificates evidencing the Option Shares as soon as practicable after the
notice and payment is received and the Company has confirmed the receipt of good
and available funds. The certificate or certificates evidencing the Option
Shares shall be registered jointly in the names of both persons who constitute
the Optionee.
12. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under this Agreement
must be in writing and must be either delivered personally or sent by registered
or certified mail, or by private courier, return receipt requested, postage
prepaid to the parties at their respective addresses set forth herein, or to
such other address as either has specified by notice in writing to the other.
Notice shall be deemed duly given hereunder when delivered or mailed as provided
herein.
13. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
14. This Agreement constitutes the entire agreement between the parties
with
4
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respect to the subject matter thereof.
15. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and, to the extent not prohibited herein, their respective heirs,
successors, assigns, and representatives. Nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties hereto
and as provided above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or liabilities.
16. This Agreement will be governed by and construed in accordance with the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
GKN HOLDING CORP. Address: 61 Broadway
New York, NY 10006
By:_________________________
Title:______________________
OPTIONEE:
____________________________ Address: 19195 Mystic Point Drive
MARVIN SHOCHET Apt. 1707
Aventura, Florida 33180
____________________________
SALLY SHOCHET
5
Exhibits 10.17
1991 EMPLOYEE INCENTIVE PLAN OF
GKN HOLDING CORP.
1. PURPOSE
The purpose of the 1991 Employee Incentive Plan (the "Plan") of GKN Holding
Corp. (the "Company") is to provide an incentive to key management employees and
consultants whose present and potential contributions to the Company and its
Subsidiaries (as such term is defined in Section 2 below) are or will be
important to the success of the Company by affording them an opportunity to
acquire a proprietary interest in the Company. It is intended that this purpose
will be effected through (a) the granting of incentive stock rights, stock
options, stock appreciation rights and limited stock appreciation rights and (b)
the sale of shares of Common Stock, $.0001 par value per share, of the Company
("Common Stock"), pursuant to restricted stock purchase agreements
(collectively, such rights, options and shares are referred to herein as
"Awards"). Stock options may be granted under the Plan which qualify as
"Incentive Stock Options" under Section 422A of the Internal Revenue Code of
1986, as it may be hereafter amended (the "Code"). Such options are sometimes
referred to as an "ISO" or collectively as "ISOs".
2. ELIGIBILITY
Awards may be made or granted to key Management employees and consultants
who are deemed to render significant services to the Company or its Subsidiaries
and who are deemed to have the potential to contribute to the future success of
the Company (such eligible persons being referred to herein as "Eligible
Participants"). The term "Management employees" includes executive officers who
are employees of the Company or of a Subsidiary, as well as other employees of
the Company and its Subsidiaries. A director of the Company or of any Subsidiary
who is not also an employee of the Company or of one of its Subsidiaries will
not be eligible to receive any Awards under the Plan. No ISO shall be granted to
any person who is not an employee of the Company or a Subsidiary at the time of
grant. No ISO shall be granted to an employee who, at the time of option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of capital stock of the employer corporation (as such term is
used in the Code) or any Parent or Subsidiary of the employer corporation,
provided, however, that an ISO may be granted to such an employee, if at the
time such ISO is granted, the option price is at least 110 percent of the fair
market value of stock subject to the ISO on the date of grant (as determined
pursuant to Subsection 8(a)
<PAGE>
hereof) and such ISO is by its terms not exercisable after the expiration of the
five years from the date such option is granted. The terms "Subsidiary" and
"Parent" as used herein shall have the meanings given them in Section 425 of the
Code. Awards may be made to employees or consultants who hold or have held
options, rights or shares under this Plan or any other plans of the Company.
3. STOCK SUBJECT TO THE PLAN
The shares that may be issued upon exercise of options and rights and which
may be sold under the Plan shall not exceed in the aggregate of 3,500,000 shares
of Common Stock, as adjusted to give effect to the anti-dilution provisions
contained in Section 12 hereof. Such shares may be authorized and unissued
shares, or shares purchases by the Company and reserved for issuance under the
Plan. If a stock option or incentive stock right for any reason expires or is
terminated without having been exercised in full, or if shares issued pursuant
to restricted stock purchase agreements are repurchased by the Company in
accordance with the terms thereof, those shares relating to an unexercised stock
option or incentive stock rights or shares which have been repurchased shall
again become available for grant and/or sale under the Plan.
4. AWARDS UNDER THE PLAN
Awards under the Plan may be of five types. They are "incentive stock
rights", "stock options", "stock appreciation rights", "limited stock
appreciation rights", and "restricted stock purchases". "Incentive stock rights"
are composed of incentive stock units which give the holder the right to
receive, without payment of cash or property to the Company, shares of Common
Stock, subject to the terms, conditions and restrictions described in Section 7
hereof. An option, including an ISO, is a right to purchase Common Stock in
accordance with Section 8 hereof. A "stock appreciation right" is a right given
to a holder of a stock option to receive, upon surrender of all or a portion of
his stock option, without payment of cash or property to the Company, a number
of shares of Common Stock of the Company and/or cash, determined pursuant to a
formula in accordance with Section 9 hereof. A "limited stock appreciation
right" is a stock appreciation right which is exercisable only upon the terms,
conditions and restrictions set forth in Section 10 hereof. A "restricted stock
purchase" is the purchase, at a price determined by the Board of Directors or
Committee (as hereinafter defined), of Common Stock, which is nontransferable
and subject to substantial risk of forfeiture until specific conditions based on
continuing employment or achievement of preestablished performance obectives are
met. All references to "cash" herein shall mean "cash or certified check".
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5. ADMINISTRATION
(a) Procedure. The Plan shall be administered by the Board of Directors or
by a Committee of the Board of Directors, if one is appointed for this purpose
(the "Committee"). Committee members shall serve for such term as the Board of
Directors may in each case determine, and shall be subject to removal at any
time by the Board of Directors. Members of the Board of Directors who are either
eligible for awards or have been granted awards may not vote on any matters
affecting the administration of the Plan or the grant of any Award pursuant to
the Plan.
(b) Powers of the Board of Directors or Committee. As used herein, except
as the powers of the Committee are specifically limited in Sections 5, 6, 19 and
20 hereof, reference to the Board of Directors shall mean such Board or
Committee, whichever is then acting with respect to the Plan. Subject to the
provisions of the Plan, the Board of Directors shall have the authority in its
discretion: (i) to determine, upon review of relevant information, the fair
market value of the Common Stock; (ii) to determine the exercise price per share
of the stock options to be granted; (iii) to determine the Eligible Participants
to whom, and time or times at which, Awards shall be granted and the number of
shares to be issuable upon exercise of each stock option or right or sold
pursuant to restricted stock purchase agreements; (iv) to construe and interpret
the Plan; (v) to prescribe, amend and rescind rules and regulations relating to
the Plan; (vi) to determine the terms and provisions of each Award (which need
not be identical); and (vii) to make all other determinations necessary to or
advisable for the administration of the Plan. Notwithstanding the foregoing, in
the event any employee of the Company or any of its Subsidiaries granted an
Award under the Plan is, at the time of such grant, a member of the Board of
Directors of the Company, the grant of such award shall, in the event the Board
of Directors at the time such Award is granted is not deemed to satisfy the
requirement of Rule 16(b)-3(b)(2)(i) or (ii) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), be subject to the
approval of an auxiliary committee consisting of not less then three persons who
qualify as "disinterested person" within the meaning of Rule 16b-(3)(d)(3)
promulgated under the Exchange Act.
6. DURATION OF THE PLAN
The Plan shall become effective upon the approval of the requisite vote of
the stockholders of the Company. The Plan shall remain in effect for a term of
ten (10) years from June 3, 1991 unless sooner terminated under Section 20
hereof. Notwithstanding any of the foregoing to the contrary, the Board
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of Directors (but not the Committee) shall have the authority to amend the Plan
pursuant to Section 20 hereof; provided, however, that Awards already made shall
remain in full force and effect as if the Plan had not been amended or
terminated.
7. INCENTIVE STOCK RIGHTS
The Board of Directors, in its discretion, may grant to Eligible
Participants incentive stock rights composed of incentive stock units. Incentive
stock rights shall be granted pursuant to incentive stock rights agreements in
such form, and not inconsistent with the Plan, as the Board of Directors shall
approve from time to time and shall include substantially the following terms
and conditions as determined by the Board of Directors:
(a) Incentive Stock Units. An incentive stock rights agreement shall
specify the number of incentive stock units to which it pertains. Each
incentive stock unit shall be equivalent to one share of Common Stock. Each
incentive stock unit shall entitle the holder thereof to receive, without
payment of cash or property to the Company, one share of Common Stock in
consideration for services performed for the Company or any Subsidiary by
the Eligible Participant, subject to the lapse of the incentive periods (as
hereinafter defined).
(b) Incentive Period. The holder of incentive stock rights shall be
entitled to receive shares of Common Stock only after the lapse of such
incentive periods, and in such manner, as shall be fixed in the discretion
of the Board of Directors at the time of the grant of such incentive stock
rights. (Such period or periods so fixed is or are herein referred to as an
"incentive period".) To the extent the holder of incentive stock rights
receives shares of Common Stock on the lapse of an incentive period, an
equivalent number of incentive stock units subject to such rights shall be
deemed to have been discharged.
(c) Termination by Reason of Death or Disability. In the event that the
recipient of incentive stock rights ceases to be and employee or consultant
of the Company or any of its Subsidiaries during an incentive period due to
death or permanent disability (as determined by the Board of Directors),the
holder of incentive stock rights or, in the case of the death of the holder,
the personal representatives, heirs or legatees of such holder, shall be
entitled to receive a number of shares equal to an amount determined by
multiplying the total number of incentive stock units applicable to such
incentive period by a fraction, the numerator of which shall be the number
of full calendar months between the date of grant of the incentive
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stock rights and the date of such termination and the denominator of which
shall be the number of full calendar months between the date of grant and
the date such incentive period for such units would, but for such
termination, have lapsed. For purposes of this Subsection 7(c), this shall
constitute a lapse of the incentive period with respect to the number of
incentive stock units equal to the number of shares issued. Units upon which
the incentive period do not lapse pursuant to the foregoing sentence shall
terminate and be null and void on the date on which the recipient ceases to
be employed by or act as a consultant to the Company or any of its
Subsidiaries.
(d) Termination for Any Other Reason. In the event that the employment
or retention as a consultant by the Company of the recipient to whom
incentive stock rights have been issued under the Plan terminates for any
reason (including dismissal by the Company with or without cause), other
than death or permanent disability, such rights as to which the incentive
period has not lapsed shall terminate and be null and void on termination of
the relationship.
(e) Issuance of Shares. Upon the lapse of an incentive period, the
Company shall deliver to the holder of the related incentive stock unit a
certificate or certificates representing the number of shares of Common
Stock equal to the number of incentive stock units with respect to which an
incentive period has lapsed. The Company shall pay all applicable transfer
or issue taxes.
8. OPTIONS
Options shall be evidenced by stock option agreements in such form, and not
inconsistent with the Plan, as the Board of Directors shall approve from time to
time, which agreements shall contain in substance the following terms and
conditions:
(a) Option Price; Number of Shares. The option price, which shall be
approved by the Board of Directors, shall in no event by less than one
hundred percent (100%), in the case of ISOs, and sixty-five percent (65%),
in the case of other options, of the fair market value of the Common Stock
at the time the option is granted. The fair market value of the Common
Stock, for the purpose of the Plan, shall mean: (i) if the Common Stock is
traded on a national securities exchange or on the NASDAQ National Market
System ("NMS"), the per share closing price of the Common Stock on the
principal securities exchange on which they are listed or on NMS, as the
case may be, on the date of grant (or if there is no closing price for such
date of grant, then the last preceding business day on which there was a
closing price);
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or (ii) if the Common Stock is traded in the over-the-counter market and
quotation are published on the NASDAQ quotation system (but not on NMS), the
mean between the per share closing bid and asked prices of the Common Stock
on the date of grant as reported by NASDAQ (or if there are no closing bid
and asked prices for such date of grant, the last preceding business day
on which there were closing bid and asked prices); (iii) if the Common Stock
is traded in the over-the-counter market but bid and asked quotations are
not published on NASDAQ, the mean between the closing bid and asked prices
per share for the Common Stock as furnished by a broker-dealer which
regularly furnishes price quotations for the Common Stock; or (iv) in the
event the Common Stock is not publicly traded, the fair market value shall
be determined by the Board of Directors, but shall not be less than the per
share book value of the Common Stock.
The option agreement shall specify the total number of shares to which
it pertains and whether such options are ISOs or are not ISOs. With respect
to ISOs granted under the Plan, the aggregate fair market value (determined
at the time an ISO is granted) of the shares of Common Stock with respect to
which ISOs are exercisable for the first time by such employee during any
calendar year shall not exceed $100,000 under all plans of the employer
corporation or its Parents or Subsidiaries.
(b) Waiting Period and Exercise Dates. At the time an option is granted,
the Board of Directors will determine the terms and conditions to be
satisfied before shares may be purchased, including the dates on which
shares subject to the option may first be purchased. (The period from the
date of grant of an option until the date on which such option may first be
exercised is referred to herein as the "waiting period"). At the time an
option is granted, the Board of Directors shall fix the period within which
it may be exercised which, unless the Board of Directors determines
otherwise, shall not be less than one (1) year nor, for an ISO, more than
ten (10) years from the date of grant or for a non-ISO for more than
thirteen (13) years from the date of grant. (Any of such periods is referred
to herein as the "exercise period.")
(c) For and time of Payment. Stock purchased pursuant to an option
agreement shall be paid for at the time of purchase either in cash or by
certified check, or, in the discretion of the Board of Directors, as set
forth in the stock option agreement (i) in a combination of cash and a
promissory note, (ii) through the delivery of shares of Common Stock, or
(iii) in a combination of the methods
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described above. Upon receipt of payment, the Company shall, without
transfer or issue tax to the option holder or other person entitled to
exercise the options, deliver to the option holder (or such other person) a
certificate or certificates for the shares so purchased.
(d) Effect of Termination, Disability or Death. In the event that an
option holder ceases to be an employee or consultant of the Company or of
any of its Subsidiaries for any reason other than permanent disability (as
determined by the Board of Directors) and death, any option, including any
unexercised portion thereof, which was otherwise exercisable on the date of
termination, shall expire unless exercised within a period of three months
from the date on which the option holder ceased to be so employed, but in no
event after the expiration of the exercisable period; provided, however,
that, if the Board of Directors shall determine that an option holder shall
have been discharged for cause, options granted and not yet exercised shall
terminate immediately and be null and void as of the date of discharge. In
the event of the death of an option holder during this three month period,
the option shall be exercisable by his or her personal representatives,
heirs or legatees to the same extent that the option holder could have
exercised the option if he or she had no died, for the three months from the
date of death, but in no event after the expiration of the exercise period.
In the event of the permanent disability of an option holder while an
employee or consultant of the company or of any Subsidiary, an option
granted to such employee or consultant shall be exercisable for twelve (12)
months after the date of permanent disability, but in no event after the
expiration of the exercise period. In the event of the death of an option
holder while an employee or consultant of the Company or any of its
Subsidiaries, or during the twelve (12) month period after the date of
permanent disability of the option holder, that portion of the option which
had become exercisable on the date of death shall be exercisable by his or
her personal representatives, heirs or legatees at any time prior to the
expiration of one (1) year from the date of the death of the option holder,
but in no event after the expiraation of the exercise period. Except as the
Board of Directors shall provide otherwise, in the event an option holder
ceases to be an employee or consultant of the Company or of any Subsidiary
for any reason, including death, prior to the lapse of the waiting period,
his or her option shall terminate and be null and void.
(e) Other Provisions. Each option granted under the Plan may contain
such other terms, provisions, and conditions not inconsistent with the Plan
as may be determined by the Board of Directors.
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9. STOCK APPRECIATION RIGHTS
The Board of Directors may grant, in its discretion, stock appreciation
rights to Eligible Participants who are granted stock options under the Plan.
Such rights shall be granted pursuant to a stock appreciation rights agreement
in such for, and not inconsistent with the Plan, as the Board of Directors shall
approve from time to time (and which may be incorporated in the stock option
agreement government the terms of the related option) and shall include
substantially the following terms and conditions as the Board of Directors shall
determine:
(a) Grant. Each right shall related to a specific option granted under
the Plan and shall be granted to the option holder either concurrently with
the grant of such option, or at such later time as determined by the Board
of Directors.
(b) Exercise. A stock appreciation right shall entitle an option holder
to receive, without payment of cash or property to the Company, a number of
shares of Common Stock, cash, or a combination thereof in the amount
determined pursuant to Subsection 9(c) below. The Board of Directors shall
determine whether such payment shall be made in Common Stock, cash, or a
combination thereof. Unless otherwise determined by the Board of Directors,
a right shall be exercisable to no greater extent nor upon any more
favorable conditions than its related option is exercisable under
Subsection 8(b) hereof. An option holder wishing to exercise a right in
accordance with this Subsection 9(b) shall give written notice of such
exercise to the Company, which notice shall state that the holder of the
right elects to exercise the right and the number of shares in respect of
which the right is being exercise. The effective date of exercise of a
right shall be the date on which the Company shall have received such
notice. Upon receipt of such notice, the Company shall: (i) deliver to the
option holder or other person entitled to exercise the right, a certificate
of certificates representing such shares; and/or (ii) pay cash. The Company
shall pay all applicable transfer or issue taxes. Notwithstanding the
provisions of this section, no stock appreciation right may be exercised
within a period of six months of the date of grant of such stock
appreciation right and no stock appreciation right granted with respect to
an ISO may be exercised unless the fair market value of the Common Stock on
the date of exercise exceeds the exercise price of an ISO.
(c) Number of Shares or Amount of Cash. The number of shares which shall
be issued pursuant to the exercise of a stock appreciation right shall be
determined by dividing
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(i) that portion, as elected by the option holder, of the total number of
shares which the option holder is eligible to purchase pursuant to
Subsection 8(b) hereof (and as adjusted pursuant to Section 12 hereof),
multiplied by the amount (if any) by which the fair market value (as
determined in accordance with Subsection 8(a) hereof) of a share of Common
Stock on the exercise date exceeds the option exercise price of the related
option; by (ii) the fair market value of a share of Common Stock on the
exercise date. In lieu of issuing shares of Common Stock on the exercise of
a right, the Board of Directors may elect to pay the cash equivalent of the
fair market value on the exercise date of any or all the shares which would
otherwise be issuable on exercise of the right. No fractional shares shall
be issued under this Subsection 9(c). In lieu of the fractional shares, the
option holder shall be entitled to receive a cash adjustment equal to the
same fraction of the fair market value per share of Common Stock on the date
of exercise.
(d) Effect of Exercise. Upon the exercise of stock appreciations rights,
the related option shall be considered to have been exercised to the extent
of the number of shares of Common Stock with respect to which such stock
appreciation rights are exercised, and shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
Common Stock available for the grant of options under the Plan. Upon the
exercise or termination of the related option, the stock appreciation rights
with respect to such related option shall be considered to have been
exercised or terminated to the extent of the number of shares of Common
Stock with respect to which the related option was so exercised or
terminated.
(e) Effect of Termination or Death. If the event that an option holder
ceases to be an employee or consultant of the Company or any of its
Subsidiaries for any reason, his stock appreciation rights shall be
exercisable only to the extent and upon the conditions that its related
option is exercisable under Subsection 8(d).
10. LIMITED STOCK APPRECIATION RIGHTS
The Board of Directors may grant, in its discretion, limited stock
appreciation rights ("Limited Rights") to the holder of any option with respect
to all or a portion of the shares subject to such option. Such Limited Rights
shall be granted pursuant to an agreement in such form, and not inconsistent
with the Plan, as the Board of Directors shall approve from time to time (and
which may be incorporated in the stock option agreements governing the terms of
the related option) and shall include substantially the following terms and
conditions as the Board shall determine:
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(a) Grants. A Limited Right may be granted concurrently with the grant
of the related option or at such later time as determined by the Board of
Directors.
(b) Exercise. Unless otherwise determined by the Board of Directors, a
Limited Right may be exercised only during the period (a) beginning on the
first day following any one of (i) the date of approval by the stockholders
of the Company of an Approved Transaction (as defined in Subsection 10(e)
below), (ii) the date of a Control Purchase (as defined in Subsection 10(e)
below), or (iii) the date of a Board Change (as defined in Subsection 10(e)
below); and (b) ending on the thirtieth day (or such other date specified in
the stock option agreement) following such date (such period herein referred
to as the "Limited Right Exercise Period"). Each Limited Right shall be
exercisable during the Limited Right Exercise Period only to the extent the
related option is then exercisable, and in no event after the termination of
the related option. Limited Rights granted under the Plan shall be
exercisable in whole or in part by notice to the Company. Such notice shall
state that the holder of the Limited Rights elects to exercise the Limited
Rights and the number of shares in respect of which the Limited Rights are
being exercised. The effective date of exercise of a Limited Right shall be
deemed to be the date on which the Company shall have received such notice.
(c) Amount Paid Upon Exercise. Upon the exercise of Limited Rights, the
holder shall receive in cash an amount equal to the excess of the fair
market value (as determined pursuant to Subsection 8(a) above) on the date
of exercise of such Limited Rights of each share of Common Stock with
respect to which such Limited Right shall have been exercised over the
exercise price per share of Common Stock subject to the related option.
(d) Effect of Exercise. Upon the exercise of Limited Rights, the related
option shall be considered to have been exercised to the extent of the
number of shares of Common Stock with respect to which such Limited Rights
are exercised, and shall be considered to have been exercised to that extent
for purposes of determining the number of shares of Common Stock available
for the grant of options under the Plan. Upon the exercise or termination of
the related option, the Limited Rights with respect to such related option
shall be considered to have been exercised or terminated to the extent of
the number of shares of Common Stock with respect to which the related
option was so exercised or terminated.
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(e) Definitions. For purposes of this Section 10:
(i) An "Approved Transaction" shall mean (A) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of Common Stock would be
converted into cash, securities or other property, other than a merger of
the Company in which the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (B) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company,
or (C) the adoption of any plan or proposal for the liquidation or
dissolution of the Company.
(ii) A "Control Purchase" shall mean circumstances in which any
person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act), corporation or other entity (other than the Company or any
employee benefit plan sponsored by the Company or any Subsidiary) (A) shall
purchase any Common Stock (or securities convertible into the Company's
Common Stock) for cash, securities or any other consideration pursuant to a
tender offer or exchange offer, without the prior consent of the Board of
Directors, or (B) shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the then outstanding securities of the Company
ordinarily (and apart from rights occurring under special circumstances)
having the right to vote in the election of directors (calculated as
provided in paragraph (d) of such Rule 13d-3 in the case of rights to
acquire the Company's securities).
(iii) A "Board Change" shall mean circumstances in which, during
any period of two consecutive years or less, individuals who at the
beginning of such period constitute the entire Board shall cease for any
reason to constitute a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least a majority of the directors then still
in office.
11. RESTRICTED STOCK PURCHASES
The Board of Directors may authorize, in its discretion, the issuance of
restricted shares of Common Stock to Eligible Participants pursuant to
restricted share agreements in such form, and not inconsistent with the Plan, as
the Board of Directors shall approve from time to time. Any amount of restricted
shares issued shall be subject to the following terms:
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(a) Restricted Period and Price. The Board of Directors shall prescribe
restrictions, terms and conditions, including but not limited to the period
("restricted period") during which the holder must continue to render
services to the Company in order to retain the restricted shares. The Board
shall determine the price, if any, to be paid by the holder for the
restricted shares. Upon forfeiture of any restricted shares, any amount paid
by the holder shall be repaid in full by the Company.
(b) Issuance of Restricted Shares. Restricted shares, when issued, will
be represented by a stock certificate or certificates registered in the name
of the holder to whom such restricted shares shall have been awarded. During
the restricted period, certificates representing the restricted shares and
any securities constituting retained distributions (as defined below in
Subsection 10(c)) shall bear a restrictive legend to the effect that
ownership of the restricted shares, and the enjoyment of all rights
appurtenant thereto, are subject to the restrictions, terms and conditions
provided in the Plan and the applicable shares agreement. Such certificates
shall be deposited by such holder with the Company, together with stock
powers or other instruments of assignment, each endorsed in blank, which
will permit transfer tot he Company of all or any portion of the restricted
shares and any retained distributions that shall be forfeited or that shall
not become vested in accordance with the Plan and the applicable restricted
shares agreement.
(c) Rights With Respect to Restricted Shares. Restricted shares shall
constitute issued and outstanding shares of Common Stock for all corporate
purposes. The holder will have the right to vote such restricted shares, to
receive and retain all regular cash dividends, and such other distributions
as the Board may in its sole discretion designate, pay, or distribute on
such restricted shares and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to such restricted
shares, with the exception that (i) the holder will not be entitled to
delivery of the stock certificate or certificates representing such
restricted shares until the restricted period shall have expired and unless
all other vesting requirements with respect thereto shall have been
fulfilled; (ii) the Company will retain custody of the stock certificate or
certificates representing the restricted shares during the restricted
period; (iii) other than regular cash dividends and such other distributions
as the Board may in its sole discretion designate, the Company will retain
custody of all distributions ("retained distributions") made or declared
with respect to the
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restricted shares (and such retained distributions will be subject to the
same restrictions, terms and conditions as are applicable to the restricted
shares) until such time, if ever, as the restricted shares with respect to
which such retained distributions shall have been made, paid or declared
shall have become vested, and such retained distributions shall not bear
interest or be segregated in separate accounts; (iv) the holder may not
sell, assign, transfer, pledge, exchange, encumber or dispose of the
restricted shares or any retained distributions during the restricted
period; and (v) a breach of any restrictions, terms or conditions provided
in the Plan or established by the Board with respect to any restricted
shares or retained distributions will cause a forfeiture of such restricted
shares and any retained distributions with respect thereto.
(c) Completion of Restricted Period. On the last day of the restricted
period with respect to each Award of restricted shares, and the satisfaction
of any other applicable restrictions, terms and conditions (i) all or part
of such restricted shares shall become vested and (ii) any retained
distributions with respect to such restricted shares shall become vested.
Unless the Administrator determines otherwise, any such restricted shares
and retained distributions that shall not have become vested upon the
termination of employment of the holder shall be forfeited to the Company
and the holder shall not thereafter have any rights (including dividend and
voting rights) with respect to such restricted shares and retained
distributions that shall have been so forfeited, provided, however, that if
the holder shall die, become totally disabled or is terminated by the
Company without cause during a restricted period with respect to any
restricted shares, then, unless the restricted share agreement relating to
such shares provided otherwise, the restricted period applicable to each
award of restricted shares to such holder shall be deemed to have expired
and all such restricted shares and retained distributions shall become
vested.
12. RECAPITALIZATION
In the event that dividends are payable in Common Stock or in the event
there are splits, subdivisions or combinations of shares of Common Stock, the
number of shares available under the Plan shall be increased or decreased
proportionately, as the case may be, and the number of shares delivered upon the
exercise thereafter of any stock option, stock appreciation right or limited
stock appreciation right, upon distribution pursuant to incentive stock rights
theretofore granted or upon sale pursuant to restricted stock purchase
agreements theretofore entered into, and the price per share with respect
thereto, shall be increased or decreased proportionately, as the case may be,
without change in the aggregate purchase price (where applicable).
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13. ACCELERATION
Notwithstanding any contrary waiting period in any stock option agreement,
any incentive period in any incentive stock rights agreements or any Restricted
Period with respect to any shares issued pursuant to any restricted stock
purchase agreement, or in the Plan, but subject to any determination by the
Board of Directors to provide otherwise at the time such Award is granted or
subsequent thereto, each outstanding option granted under the Plan shall become
exercisable in full for the aggregate number of shares covered thereby, and each
share issuable upon lapse of an incentive period or issued pursuant to a
restricted stock purchase agreement shall vest unconditionally on the first day
following the occurrence of any of the following: (a) the approval by the
stockholders of the Company of an Approved Transaction; (b) a Control Purchase;
or (c) a Board Change.
14. CONTINUATION OF RELATIONSHIP; LEAVE OF ABSENCE.
(a) Nothing in the Plan or any Award made hereunder shall interfere with or
limit in any way the right of the Company or of any Subsidiary to terminate any
eligible Participant's employment at any time, nor confer upon any Eligible
participant any right to continue any such relation with the Company or
Subsidiary.
(b) For purposes of the Plan, a transfer of an employee from the Company to
a Subsidiary or vice versa, or from one Subsidiary to another, or a leave of
absence duly authorized by the Company shall not be deemed a termination of
employment or a break in an incentive, waiting, exercise or Restricted Period,
as the case may be. In the case of any employee on an approval leave of absence,
the Board of Directors may make such provisions with respect to continuance of
incentive stock rights, options or shares previously granted while on leave from
the employ of the Company or a Subsidiary as it may deem equitable.
15. GENERAL RESTRICTION
Each Award made under the Plan shall be subject to the requirement that, if
at any time the Board of Directors shall determine, in its sole and subjective
discretion, that the registration or qualification or listing of the shares
subject to such Award upon a securities exchange or under any state or federal
law, or the consent or approval of any government regulatory body, is necessary
or desirable as a condition of, or in connection with, the granting or exercise
of such Award, the Company shall not be required to issue such shares unless
such registration, qualification, listing, consent or approval shall have been
effected or obtained free of any conditions not
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acceptable to the Board of Directors. Nothing in the Plan or any agreement or
grant hereunder shall obligate the Company to effect any such registration,
qualification or listing.
16. RIGHTS AS A STOCKHOLDER
The holder of a stock option, incentive stock right, stock appreciation
right or limited stock appreciation right shall have no rights as a stockholder
with respect to any shares covered by the stock option, incentive stock right,
stock appreciation right or limited stock appreciation right, as the case may
be, until the date of issuance of a stock certificate to him for such shares
related to the exercise or discharge thereof. No adjustment shall be made for
the dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
17. NONASSIGNABILITY OF INCENTIVE STOCK RIGHTS, STOCK OPTIONS, STOCK
APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.
No incentive stock right, stock option, stock appreciation right or limited
stock appreciation right shall be assignable or transferable by an Eligible
Participant except by will or by the laws of descent and distribution and during
the lifetime of an Eligible Participant may only be exercised by him.
18. WITHHOLDING TAXES
Whenever under the Plan shares are to be issued in satisfaction of stock
options, incentive stock rights, stock appreciation rights or limited stock
appreciation rights granted thereunder, or pursuant to restricted stock
purchases, the Company shall have the right to require the Eligible Participant
to remit to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of May certificates for such
shares or at such later time as when the Company any determine that such taxes
are due. Whenever under the Plan payments are to be made in cash, such payment
shall be net of an amount sufficient to satisfy federal, state and local
withholding tax requirements.
19. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board of Directors nor any
provision of the Plan shall be construed as creating any limitations on the
power of the Board of Directors (but not the Committee) to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the Plan,
including, without limitation, the granting of stock options otherwise than the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.
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20. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Board of Directors (but not the Committee) may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuance shall be made which would impair the rights of any recipient
of a stock option, incentive stock right, stock appreciation right or limited
stock appreciation right under any agreement theretofore entered into hereunder,
without his consent, or which, without the requisite vote of the stockholders of
the Company approving such action, would:
(a) except as is provided in Section 12 of the Plan, increase the total
number of shares of stock reserved for the purpose of the Plan; or
(b) extend the duration of the Plan; or
(c) materially increase the benefits accruing to participants under the
Plan; or
(d) change the category of persons who can be Eligible Participants under
the Plan.
Without limiting the foregoing, the Board of Directors may, at any time or
from time to time, authorize the Company, with the consent of the respective
recipients, to issue new options or rights in exchange for the surrender and
cancellation of any or all outstanding options or rights.
21. LIMITATIONS ON EXERCISE
Notwithstanding anything to the contrary contained in the Plan, any
agreement evidencing any Award hereunder may contain such provisions as the
Board of Directors deems appropriate to ensure that the penalty provisions of
Section 499 of the Code, or any successor thereto, will not apply to any stock
or cash received by the holder from the Company.
22. GOVERNING LAW
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
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GKN HOLDING CORP.
WRITTEN CONSENT OF SHAREHOLDERS
REPRESENTING A MAJORITY OF THE
ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF
GKN HOLDING CORP.
Pursuant to Section 228 of the General Corporation Law of the State of
Delaware, the undersigned holders of a majority of the outstanding shares of the
Common Stock of GKN Holding Corp., a Delaware corporation (the "Company"), do
hereby consent to the adoption of, and adopt the following resolutions:
RESOLVED, the Company split and divide each issued and
outstanding share of Common Stock into ten shares of Common Stock
resulting in the 917,500 shares of issued and outstanding shares of
Common Stock being changed into 9,175,000 shares of Common Stock ((the
"Split"); and it is further
RESOLVED, that the Certificate of Incorporation be amended and
restated to effect the Split and to increase the Company's authorized
capital to 30,000,000 shares of which 25,000,000 shares shall be Common
Stock, $.0001 par value, and 5,000,000 shares shall be Preferred Stock,
$.10 par value; and it is further
RESOLVED, that the Amended and Restated Certificate of
Incorporation, in the form attached hereto as Exhibit A, be and it is
ratified and confirmed and shall be filed with the Secretary of State
of the State of Delaware; and it is further
RESOLVED, that the 1991 Employee Stock Option Plan, in the
form attached hereto as Exhibit B, be and the same hereby is adopted;
and it is further
RESOLVED, that the officers of the Company be, and the same
hereby are, authorized, empowered and directed to execute and deliver
all documents, instruments and other agreements, to waive any and all
conditions and to do things necessary and helpful to carry out the
purposes of the foregoing resolutions; and all acts and deeds of the
officers and agents of the Company which are consistent with
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the purpose and intent of the above resolutions shall be, and the same
hereby are, in all respects, ratified, confirmed, adopted and approved,
as the acts and deeds of the Company.
IN WITNESS WHEREOF, we have each executed this written consent
to the adoption of the foregoing resolutions this 3rd day of June,
1991.
/s/ DAVID NUSSBAUM
------------------------------------
DAVID NUSSBAUM
Shareholder (205,000 Shares)
/s/ /s/ ROGER GLADSTONE
------------------------------------
ROGER GLADSTONE
Shareholder (205,000 Shares)
/s/ ROBERT GLADSTONE
------------------------------------
ROBERT GLADSTONE
Shareholder (60,000 Shares)
Exhibit 10.18
AGREEMENT
This agreement, made this 15th day of May 1993 (the "Agreement") between
Wertheim Schroder & Co. Incorporated, a Delaware corporation ("Wertheim" or the
"Clearing Firm"), and GKN Securities Corporation (the "Introducing Firm").
WITNESSETH THAT:
WHEREAS, the Introducing Firm desires to avail itself of the clearing services
of Wertheim as more fully set forth herein, and
WHEREAS, Wertheim desires to extend such clearing services to the Introducing
Firm;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and other good and valuable considerations the receipt of which is hereby
acknowledged, the parties hereby covenant and agree as follows:
I. Services to be Performed by Wertheim.
A. Wertheim will carry individually on its books on a fully disclosed basis
the securities accounts on behalf of the Introducing Firm's customers whose
accounts have been introduced by the Introducing Firm and are accepted by
Wertheim and will similarly carry all of the Introducing Firm's firm accounts
(collective the "Introduced Accounts") commencing with the trade date of
____________.
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B. Wertheim will prepare and mail to the Introduced Accounts confirmations of
purchases and sales of securities imprinted "upon Instructions of" the
Introducing Firm and monthly statements of account (or quarterly statements
where appropriate due to inactivity) imprinted "In account with" the Introducing
Firm and bearing the name of Wertheim and reflecting all transactions reported
to Wertheim as having been executed by the Introducing Firm for the Introduced
Accounts pursuant to paragraph I.A. above.
C. Wertheim shall be responsible for establishing and implementing procedures
for the transmission or execution of orders for the Introduced Accounts.
D. Wertheim will settle all transactions reported to it pursuant to Paragraph
I.B. above and all related contracts.
E. Wertheim will perform all cashiering functions in connection with
transactions reported to it by the Introducing Firm for the Introduced Accounts
including, but not limited to, the receipt, transfer and delivery of securities
purchased, sold, borrowed and loaned, making and receiving payment therefore,
and if requested by the Introducing Firm, holding in custody and safekeeping all
securities and cash so received.
F. Wertheim will process warrants, exchange offers, rights offerings, tender
offers and redemptions for securities which are held by Wertheim in the same
manner such offers and redemptions are processed for Wertheim's own accounts, or
as mutually agreed between Wertheim and the Introducing Firm.
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G. Wertheim will forward all annual reports, proxy materials, proxies and
other reports with respect to securities which are held by Wertheim in
accordance with applicable rules and regulations, to the extent such material is
provided on a timely basis to Lewco Securities Corp. by the applicable company.
H. Wertheim will accept and remit dividends and interest for securities which
are held by Wertheim (or in its name of any subsidiary or nominee) for
Introduced Accounts.
I. In accordance with the requirements of the Securities and Exchange
Commission ("SEC") and all the national securities exchanges and associations
having jurisdiction over such activities, Wertheim will prepare, maintain and
preserve for the required periods books, records and documentation of all
transactions with respect to which it has performed clearance or cashiering
services for the Introduced Accounts. Provided, however, that Wertheim shall not
be responsible for the filing of any regulatory reports required of the
Introducing Firm by the SEC, the National Association of Securities Dealers,
Inc. ("NASD"), or any national securities, commodities or other exchange, which
shall be the sole responsibility of the Introducing Firm.
J. Wertheim will maintain appropriate stock inventory records for securities
which are deposited with Wertheim in connection with transactions cleared by
Wertheim for the Introduced Accounts.
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K. Wertheim will prepare and deliver to the Introducing Firm duplicate
confirmations and statements with respect to transactions cleared for the
Introduced Accounts and daily and monthly computer summaries of all transactions
cleared by Wertheim for the Introduced Accounts on the same schedule as
comparable reports are prepared for Wertheim's own accounts, or as mutually
agreed.
L. Wertheim will comply with all applicable rules and regulations governing
the handling of accounts for employees or officers of member organizations and
self-regulatory organizations including, but not limited to, sending duplicate
confirmations to the proper employer for all transactions executed by or cleared
through Wertheim for all Introduced Accounts so identified to Wertheim.
M. Wertheim expressly disclaims any obligation to furnish investment advice to
any Introduced Account. The furnishing of investment advice is to be the
responsibility of the Introducing Firm or any third party investment adviser who
may be employed by the customer.
II. Charges.
A. For the services to be performed by Wertheim hereunder, the Introducing
Firm agrees to pay the charges listed on Exhibit I attached hereto and made a
part hereof.
B. In the event that the Introducing Firm or any customer of the Introducing
Firm shall direct any securities transactions (other than those referred to
above) to Wertheim during the term of this Agreement, Wertheim will either, as
mutually agreed, (i) give appropriate recognition thereto by the reduction of
one or more amounts payable by the Introducing Firm to Wertheim hereunder or
(ii) provide additional compensation to the Introducing Firm.
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III. Opening of Accounts.
A. At the opening of each Introduced Account, the Introducing Firm shall
furnish Wertheim with all customary information concerning its customer which
Wertheim requests. At the time of the opening of an Introduced Account, Wertheim
shall cause to be delivered to and solicit the return from the customer,
Customers' Agreement on Wertheim's forms (or assignments, in form satisfactory
to Wertheim, of existing agreements between the customer and the Introducing
Firm) and such other documents as Wertheim shall deem necessary with respect to
the account. Wertheim's failure to receive any of the above documents required
to be executed and returned shall not be deemed a waiver of the above
requirements. Wertheim shall also inform the customer of the existence of this
Agreement pursuant to Rule 382(C) of the New York Stock Exchange. In addition,
on Wertheim's request, the Introducing Firm shall furnish Wertheim with any
other documents, letters and/or agreements which may be reasonably requested by
Wertheim in connection with the opening, operating or maintaining of any
Introduced Account.
B. The Introducing Firm and Wertheim shall each have the right to reject any
account. Wertheim shall have the right, in its sole discretion, to reject any
account accepted by the Introducing Firm which is then referred to Wertheim, and
the right to terminate any account previously accepted by it. Any such action
will be discussed in advance with the Introducing Firm. Any account previously
accepted by Wertheim may not be terminated by the Introducing Firm except by
written notice to Lewco Securities Corp., 2 Broadway, New York, NY 10004, on a
form provided by Lewco Securities Corp. in order to permit the closing of all
open transactions.
5
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IV. Interest.
Wertheim will charge interest on debit balances of Introduced Accounts, whether
cash or margin, in accordance with Wertheim's cash or margin account agreement
then in use, with Wertheim's letter to customers regarding Credit Charges and
Margin Requirements and with Regulation T of the Board of Governors of the
Federal Reserve System and other applicable laws, rules and regulations.
Consistent with the foregoing, the Introduced Accounts shall be charged interest
at such rates as shall be mutually agreed by the parties hereto. Wertheim shall
be responsible for compliance with Regulation T of the Federal Reserve Board and
New York Stock Exchange regulation, with respect to any margin accounts accepted
by it.
V. Transactions and Margin.
A. Wertheim will advise the Introducing Firm promptly of initial and
maintenance margin deposits by Introduced Accounts required by law, rule or
regulation or in accordance with Wertheim's Margin Account Agreement. The
Introducing Firm shall be responsible for assuring that any initial margin so
required is deposited on or before the settlement date for each margin
transaction and that full payment is made on the settlement date for each cash
transaction. In addition, the Introducing Firm will use its best efforts to
assist Wertheim in obtaining the deposit of any maintenance margin so required.
The maintenance margin required by Wertheim for the Introduced Accounts shall be
the same that Wertheim requires of its own customers. This requirement, which
may be changed at any time in Wertheim's sole discretion, shall initially be
35%.
6
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B. In the event any such deposit is not timely made, Wertheim will inform the
Introducing Firm of such situation and discuss with the Introducing Firm
appropriate action; provided, however, that whenever Wertheim deems action
appropriate pursuant to the applicable margin agreement, it may, after notice to
the Introducing Firm, exercise any and all rights granted to it under said
margin agreement.
C. The Introducing Firm shall be responsible, and hereby agrees to indemnify
Wertheim, for any loss or expense, including interest expense, suffered by
Wertheim because of the failure of any Introduced Account, without fault on the
part of Wertheim, after prior notice to such Introduced Account and the
Introducing Firm, (i) to pay for securities purchased for its account by
settlement date; (ii) to promptly deliver securities sold or otherwise disposed
of for such account in proper negotiable form; (iii) to deposit by settlement
date sufficient and adequate initial margin in connection with any margin
transactions; or (iv) to promptly deposit sufficient and adequate maintenance
margin upon Wertheim's request to the Introducing Firm. The Introducing Firm
agrees to pay promptly any loss or expense as determined by Wertheim under this
paragraph V.C., such determinations shall be in a manner consistent with that
charged both internal Wertheim departments and all other clearing firms.
D. In the event any designated officer of the Introducing Firm requests in
writing that Wertheim withhold contemplated actions to "sell out" or "buy in" on
Introduced Accounts for a specified period of time and Wertheim complies in full
or in part with such request, the Introducing Firm agrees to reimburse Wertheim
promptly for any loss or expenses (including but not limited to interest on any
such loss or expense) sustained by any total or partial compliance with such
request.
7
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E. Where the Introducing Firm designates the contra broker in any transaction
executed by Wertheim on the Introducing Firm's instruction, the Introducing Firm
shall assume the risk of default by the contra broker and shall indemnify
Wertheim for any loss of expense including loss or expense resulting from
failure or liquidation of the contra broker which latter loss or expense shall
be shared in the same ratio as commissions are shared hereunder. Wertheim shall
similarly indemnify the Introducing Firm if Wertheim designates the contra
broker on any transaction it executes.
VI. Supervision.
A. The Introducing Firm shall maintain an organized program of supervision and
compliance, consistent with the rules and regulations of the SEC, the National
Association of Securities Dealers, Inc., if applicable, and any applicable
national securities exchanges. Such program shall include, but not be
necessarily limited to, the following types of procedures:
(i) Inquiry review, verification and approval of all new accounts for the
purpose of establishing the identity, capacity to contract, reputability,
financial condition, credit worthiness, investment objectives and needs of each
prospective client for whom it is proposed to open an Introduced Account (and,
if applicable, essential information concerning his agent).
(ii) Review and approval of the basis for any suitability of all stock, bond or
option recommendations.
8
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(iii) Establish an implement procedures for the transmission and execution of
orders received by the Introducing Firm and from its customers or initiated by
the Introducing Firm pursuant to discretionary authority or power of attorney.
(iv) Screen all orders transmitted and all transactions reported by the
Introducing Firm to Wertheim prior to execution and all transactions prior to
settlement.
(v) Review of all daily transactions and monthly account statements on a timely
basis.
(vi) Review and approval of all restricted or insider securities transactions,
with prior notification of such transactions to and clearance by the Compliance
Department of Wertheim and such other persons as shall, from time to time, be
designated by Wertheim.
(vii) Review and approval of all discretionary account trading authorizations
and all discretionary transactions.
(viii) Review and approval of all customer purchases of new and secondary
issues.
(ix) Registration of the Introducing Firm as a broker/dealer and of its sales
personnel in all states in which the Introducing Firm conducts business and such
registration is required.
9
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B. The Introducing Firm represents that one or more of its officers has been
designated as having supervisory responsibility for all of the Introduced
Accounts and that the Introducing Firm has established, and will implement on a
continuous basis, written supervisory procedures to assure that all transactions
cleared by Wertheim for Introduced Accounts are in compliance with applicable
Federal and state securities laws and the rules and regulations of the NASD and
applicable exchanges.
C. The Introducing Firm further represents that it is in compliance with the
applicable net capital requirements of the SEC, the NASD, if applicable, and any
applicable securities exchanges and that it will provide to persons designated
by Wertheim copies of each Statement of Financial Condition contained in a
Financial and Operational Uniform Single ("FOCUS") Report filed by the
Introducing Firm with the SEC, and any other applicable regulatory authority
simultaneous with the filing thereof.
D. The Introducing Firm shall be responsible, and hereby agrees to indemnify
Wertheim, for any loss, liability, damage and expense, including reasonable fees
and expense of legal counsel, which Wertheim may incur or sustain because of
failure of the Introducing Firm or any of its officers to perform the
supervision provided in this paragraph VI.
VII. Payment.
A. Payment for services hereunder, and reimbursement to the Introducing Firm
for commissions received on its behalf by Wertheim shall be made in the
following manner:
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(i) On the 15th day of each month (or the next business day if the 15th is not
a business day) the Introducing Firm shall be paid 90% of the net amount due it
hereunder for transactions settled through the end of the last complete calendar
week ending prior to such 15th day;
(ii) On the last business day of each month the Introducing Firm shall be paid
90% of the net amount due it hereunder for transactions settled through the end
of the last complete calendar week ending prior to such last business day (less
any amounts paid pursuant to paragraph (i) immediately above); and
(iii) On the 15th day of each month (or the next business day if such 15th day
is not a business day) the Introducing Firm shall be paid the net balance due it
for all transactions settled through the last business day of the preceding
calendar month and not previously paid to it pursuant to paragraphs (i) and (ii)
immediately above.
B. Wertheim shall deliver to the Introducing Firm a monthly reconciliation
summarizing the calculation of such amounts on the 15th of each month during the
term hereof.
C. All payments to be made by Wertheim to the Introducing Firm hereunder shall
be by funds wired to the bank designated by the Introducing Firm or by a
transfer of funds to one or more accounts of the Introducing Firm at Wertheim.
11
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VIII. Errors, Controversies and Indemnities.
A. Errors, misunderstandings or controversies, except those specifically
otherwise covered in this Agreement, with Introduced Accounts which shall arise
out of the acts or omissions of the Introducing Firm or its employees when not
at the direction of Wertheim, without fault on the part of Wertheim, shall be
the responsibility and liability of the Introducing Firm. In the event, however,
that by reason of such error, misunderstanding or controversy, the Introducing
Firm at its discretion deems it advisable to commence an action or proceeding
against an Introduced Account, the Introducing Firm shall provide prior notice
to Wertheim of such commencement and shall indemnify and hold the Clearing Firm
harmless from any loss, liability, damage, cost or expense (including but not
limited to fees and expenses of legal counsel) which the Clearing Firm may incur
or sustain in connection therewith or under any settlement thereof.
B. Errors, misunderstandings or controversies, except those specifically
otherwise covered in this agreement, with Introduced Accounts which shall arise
out of the acts or omissions of Wertheim or its employees when not at the
direction of the Introducing Firm, without fault on the part of the Introducing
Firm, shall be the responsibility and liability of Wertheim. In the event,
however, that by reason of such error, misunderstanding or controversy, Wertheim
in its discretion deems it advisable to commence an action or proceeding against
the Introduced Account, Wertheim shall provide prior notice to the Introducing
Firm of such commencement and shall indemnify and hold the Introducing Firm
harmless from any loss, liability, damage, cost or expense (including, but not
limited, to fees and expenses of legal counsel), which the Introducing Firm may
incur or sustain in connection therewith or under any settlement thereof.
12
<PAGE>
Wertheim recognizes that it would be desirable to resolve any such errors,
misunderstandings or controversies without litigation, and, if possible, by
negotiation between Wertheim and the Introducing Firm. To this end, Wertheim
will give the Introducing Firm as much prior notice before commencing an action
or proceeding against an Introduced Account as Wertheim deems consistent with
adequate protection of its interests.
C. (i) Wertheim shall have the right to take whatever action it deems
necessary to promptly effect a mitigation of damages or mitigation of losses
arising out of a controversy or misunderstanding between Wertheim and an
Introduced Account without obtaining the consent of the Introducing Firm,
provided such action shall be without prejudice to the rights of either party
hereunder. Wertheim recognizes the Introducing Firm's desire to preclude
Wertheim's direct contact with the client with respect to any such action
referred to above, without initially contacting the Introducing Firm whenever
such contact is possible, consistent with Wertheim's protection of its
interests.
(ii) If any error, controversy or misunderstanding shall result in the
bringing of an action or proceeding against the Introducing Firm or Wertheim by
an Introduced Account, the party against whom such action or proceeding is
brought shall give written notice to the other party to this Agreement if a
claim is intended to be asserted against such other party with respect to any
loss, liability, damage or expense arising out of such action or proceeding, and
such other party shall be entitled to participate in the defense thereof at its
own expense.
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D. Wertheim and the Introducing Firm each agrees to indemnify the other and
hold the other harmless from any against any loss, liability, damage, cost or
expense (including but not limited to reasonable fees and expenses of legal
counsel) arising out of or resulting from any failure by the indemnifying party
or any of its employees to carry out fully the duties and responsibilities
assigned to the indemnifying party herein or any breach of any representation or
warranty made herein by the indemnifying party.
E. The indemnification provisions of this Agreement, including but not limited
to those in paragraphs V, VI, VIIIA, VIIIB, VIIIC and VIIID above shall remain
operative and in full force and effect, regardless of the termination of this
Agreement, and shall survive any such termination.
IX. Customer Complaints.
Each of the Introducing Firm and Wertheim shall notify the other of any
complaints and regulatory inquiries received. In the event, however, that by
reason of any such complaint or inquiry, either the Introducing Firm or Wertheim
deems it advisable to settle the complaint, the settling party shall (provided
the non-settling party is without fault with respect thereto) indemnify and hold
the other harmless from any loss, liability, damage, cost or expense (including
by not limited to reasonable fees and expenses of legal counsel) which it may
incur or sustain in connection therewith or any settlement thereof.
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X. Representations and Warranties.
A. The Introducing Firm represents and warrants as follows:
(i) The Introducing Firm is in compliance, and during the term of this
Agreement will remain in compliance with (a) the capital requirements of the
SEC, the NASD, if applicable, and all applicable Exchanges and (b) the capital
requirements of every state in which the Introducing Firm is licensed as a
broker/dealer.
(ii) The Introducing Firm will immediately notify Wertheim should it be in
violation of the net capital rules and regulations of any regulatory or
self-regulatory organization to whose jurisdiction the Introducing Firm is
subject.
(iii) The Introducing Firm is a member in good standing of the NASD. The
Introducing Firm will promptly notify Wertheim of any changes in its exchange or
association memberships or affiliations.
(iv) The Introducing Firm is and during the term of this Agreement will
remain duly registered or licensed and in good standing as a broker/dealer under
all applicable Federal and state laws, rules and regulations as well as under
the constitutions, rules and regulations of all applicable self-regulatory
organizations.
(v) The Introducing Firm shall keep confidential any information it may
acquire as a result of this Agreement regarding the business and affairs of the
Clearing Firm, which requirement shall survive the termination of this
Agreement.
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B. Wertheim represents and warrants as follows:
(i) Wertheim is in compliance, and during the term of this Agreement will
remain in compliance with (a) the capital and financial reporting requirements
of every national securities exchange and national securities brokers or dealers
association of which it is a member, (b) the capital requirements of the SEC,
and (c) the capital requirements of every state in which it is licensed as a
broker/dealer.
(ii) Wertheim will immediately notify the Introducing Firm should it be in
violation of the net capital rules and regulations of any regulatory or
self-regulatory organization to whose jurisdiction Wertheim is subject.
(iii) Wertheim is a member in good standing of the NYSE, the Chicago Board
Options Exchange and the Boston, Midwest and Philadelphia Stock Exchanges, AMEX,
and the NASD. Wertheim will promptly notify the Introducing Firm of any changes
in its exchange memberships or affiliations.
(iv) Wertheim is and during the term of this Agreement will remain duly
registered or licensed and in good standing as a broker/dealer under all
applicable laws, rules and regulations as well as under the constitutions, rules
and regulations of all applicable self-regulatory organizations.
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(v) The names and addresses of the Introducing Firm's customers which have
or which may come to Wertheim's attention in connection with the clearing and
related functions it has assumed under this Agreement are confidential and shall
not be utilized by Wertheim except in connection with the functions performed by
Wertheim pursuant to this Agreement.
(vi) Wertheim shall keep confidential any information it may acquire as a
result of this Agreement regarding the business, affairs and Introduced Accounts
(unless required by legal process) of the Introducing Firm which requirement
shall survive termination of this Agreement, and shall provide to the
Introducing Firm reasonable access to Wertheim's records pertaining to the
Introduced Accounts.
XI. Termination - Events of Default.
Notwithstanding any provision in the Agreement, the occurrence of any of
the following events shall constitute an Event of Default under this Agreement:
(i) Either Wertheim or the Introducing Firm shall fail to perform or
observe any term, covenant or condition to be performed or observed by it
hereunder and such failure shall continue to be unremedied for a period of
thirty (30) days after written notice from the non-defaulting party to the
defaulting party specifying the failure and demand that the same be remedied; or
(ii) any representation or warranty made by either Wertheim or the
Introducing Firm herein shall prove to be incorrect at any time in any material
respect; or
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(iii) a receiver, liquidator or trustee of Wertheim or the Introducing Firm
or any of the property of either, is appointed by court order and such order
remains in effect for more than 30 days; or Wertheim or the Introducing Firm is
adjudicated bankrupt or insolvent; or any of the property of either is
sequestered by court order and such order remains in effect for more than 30
days; or a petition is filed against Wertheim or the Introducing Firm under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in
effect, and is not dismissed within 30 days after such filing; or
(iv) Wertheim or the Introducing Firm files a petition in voluntary
bankruptcy or seeking relief under any provision of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, or
consents to the filing of any petition against it under any such law; or
(v) Wertheim or the Introducing Firm makes an assignment for the benefit of
its creditors, or admits in writing its inability to pay its debts generally as
they become due, or consents to the appointment of a receiver, trustee or
liquidator of Wertheim or the Introducing Firm or of all or any part of its
property. Upon the occurrence of any such Event of Default, the nondefaulting
party may, at its opinion, by written notice to the defaulting party declare
that this Agreement shall be thereby terminated and such termination shall be
effective as of the date such notice has been received by the defaulting party.
Upon the termination of this Agreement, whether pursuant to this Paragraph XI,
Paragraph XIII hereof or otherwise, Wertheim shall cause the Introduced Accounts
to be transferred to the Introducing Firm or its designee.
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XII. Remedies Cumulative.
The enumeration herein of specific remedies shall not be exclusive of any
other remedies. Any delay or failure by any party to this Agreement to exercise
any right, power, remedy or privilege herein contained, or now or hereafter
existing under any applicable statute or law, shall not be construed to be a
waiver of such right, power, remedy or privilege or to limit the exercise of
such right, power, remedy or privilege. No single, partial or other exercise of
any such right, power, remedy or privilege shall preclude the further exercise
thereof or the exercise of any other right, power, remedy or privilege.
XIII. Miscellaneous.
A. This Agreement may be cancelled by either party upon sixty (60) days written
notice. Notice shall be effective only upon receipt. Notice shall be given at
the addresses listed below or such other address as shall be specified in a
written notice delivered in accordance herewith. Notices to Wertheim shall be
delivered to Michael F. Dura and Patrick J. Borruso, at the office of Wertheim
Schroder & Co. Incorporated, Equitable Center, 787 Seventh Avenue, New York, NY
10019. Notice to the Introducing Firm shall be delivered to:
Bernard Golembe
Executive Vice President and
Chief Operations Officer
GKN Securities Corporation
61 Broadway, 12th Floor
New York, NY 10006
19
<PAGE>
B. This Agreement shall be submitted to and effective only upon approval by any
national securities exchange or regulatory or self-regulatory body having
authority to approve this Agreement.
C. Any dispute or controversy between parties to this Agreement relating to or
arising out of this Agreement, including but not limited to matters reserved for
mutual agreement, shall be settled by arbitration in accordance with the rules
then obtaining of (i) the NYSE if NYSE arbitration is available and (ii) the
American Arbitration Association in all other cases. The award of the
arbitrators hereunder shall be final, and judgment upon the award rendered may
be entered in any court having jurisdiction and the parties hereto submit
themselves and their personal representatives to the jurisdiction of any such
court for the purpose of such arbitration and the entering of such judgment.
D. Any assignment of this agreement shall be subject to the requisite review
and/or approval of any regulatory or self-regulatory agency or body whose review
and/or approval must be obtained prior to the effectiveness and validity of such
assignment. No assignment of this Agreement shall be valid unless the
non-assigning parties consent to such an assignment in writing. Anything herein
to the contrary notwithstanding, Wertheim shall have the right unilaterally to
assign this agreement as part of the sale of all or substantially all of the
assets or a majority interest in Wertheim.
E. Neither this Agreement nor any operation hereunder is intended to be, shall
not be deemed to be, and shall not be treated as a general or limited
partnership, association or joint venture or agency relationship between the
Introducing Firm and Wertheim.
20
<PAGE>
F. Whenever hereinabove reference is made to services to be rendered by or
rights or indemnification of Wertheim, such references shall be deemed to
include Wertheim's subsidiary Lewco Securities Corp. which may perform services
contemplated hereby at the direction of Wertheim, but the performance of
services by Lewco Securities Corp. shall in no way affect Wertheim's obligations
to the Introducing Firm hereunder and, for the purposes of this Agreement, any
services performed by Lewco Securities Corp. shall be deemed to have been
performed by Wertheim.
G. The construction and effect of every provision of this Agreement, the rights
of the parties hereunder and any questions arising out of the Agreement shall be
subject to the statutory and common law of the State of New York.
H. The headings preceding the text and paragraphs hereof have been inserted for
convenience and reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
I. If any provision or condition of this Agreement shall be held to be invalid
or unenforceable by any court, or regulatory or self-regulatory agency or body,
such invalidity or unenforceability shall attach only to such provision or
condition. The validity of the remaining provisions and conditions shall not be
affected thereby and this Agreement shall be carried out as if any such invalid
or unenforceable provision or condition were not contained herein.
21
<PAGE>
J. Wertheim will make available money market funds or other investment vehicles
as mutually agreed, for investment of credit balances of the Introduced
Accounts, and, with regard to money market funds, will provide automatic
features for the investment of cash and the liquidation of shares of such funds
to pay for purchases of other securities. These features will be made available
for other investment vehicles to the extent legally permissible.
K. Wertheim will reserve the right to pass along to the Introducing Firm
applicable costs associated with a deconversion.
22
<PAGE>
Made and executed at New York, New York on the date first hereinabove set forth.
WERTHEIM SCHRODER & CO. INCORPORATED
BY: /s/Michael F. Dura
------------------------------
Michael F. Dura
Managing Director
AGREED & ACCEPTED:
GKN SECURITIES CORPORATION
BY: /s/Bernard Golembe
---------------------------
Bernard Golembe
Executive Vice President and
Chief Operations Officer
23
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
GKN SECURITIES CORPORATION
Revised Schedule Of Rates & Charges
April 14, 1993
<TABLE>
<CAPTION>
ITEM WERTHEIM SCHRODER RETENTION
- ---- ---------------------------
<S> <C> <C> <C>
A. Listed & OTC Agency
Customer Principal $17.50 per ticket
B. Brokerage (i) DOT Trades - no charge
(ii) Non-DOT Trades - 1.50 cents per share on
listed transactions executed through
Wertheim.
C. Principal Equity - Firm $10.00 per ticket ticket (street side only)
D. Options $14.00 per ticket, plus contract charges as follows:
Option Price Contract Charge
------------ ---------------
$1/16 - $15/16 $1.00
$1 - $2 15/16 $1.50
$3 and over $2.00
E. Principal Fixed Income - Customer $30.00 per ticket
F. Principal Fixed Income - Firm $25.00 per ticket
G. Mutual Funds/UIT's $30.00 per ticket
H. Average Price Trades $0 per ticket
I. Money Market Trades $0 per ticket
J. Postage & Handling Wertheim charges a $2.85 fee on rental
accounts, of which Wertheim will retain
$1.00. Introducing Firm has the option to
increase this fee, and retain part or all of
the increase.
</TABLE>
<PAGE>
K. Interest (i) Introducing Firm will receive a rebate on
Cortland Money Market Fund balances
as follows:
$0 - $20 million 25 basis points
$20 million and over 30 basis points
(ii) On debit balances, equal to and exceeding
credit balances, Introducing Firm will
receive 50% of the interest income
earned.
(iii) On credit balances in excess of debit
balances, Introducing Firm will receive
50% of the spread between the Fed Funds
rate and the rate paid to customers.
(iv) On aggregate short credit balances,
Introducing Firm will receive 50% of the
actual interest income earned.
L. Miscellaneous
CASH/C.O.D. Debits Brokers Call Rate
Cash Management Account $50.00
IRA/KEOGH Account $25.00 Set Up, $38.00 Annual Fee
Bank Wires $15.00 for wires under $5000,
no charge above $5000
Extensions $3.00
Bounced Checks/Stop Payment $25.00
Mailgrams/Telegrams no charge
Reog Items no charge
Cancels/Corrections no charge
Post Settlement Date Corrections no charge
Corrections Away Trades no charge
Special Transfers no charge
Liquidations no charge
Restricted Accounts no charge
Statement Mailings no charge
ACATS no charge
2
<PAGE>
M. Communications Wertheim will pay a monthly allowance
equal to $500 per each 100 average daily
billable trades.
N. Other (i) Wertheim will supply Introducing Firm a
monthly S&P Stock Guide for each
executive.
(ii) Wertheim will supply Introducing Firm 10
monthly S&P Bond Guides.
(iii) Introducing Firm will receive both hard
and fiche copies of monthly statements.
(iv) Wertheim will place a Tombstone Ad in the
Wall Street Journal announcing the
Clearing Agreement.
(v) Wertheim will provide Introducing Firm
Compliance and Operations Manual.
(vi) Wertheim will provide Introducing Firm 2
direct lines into Wertheim.
(vii) The annual fee for IRA accounts will be
waived for year 1.
(viii) Introducing Firm will be compensated at a
rate to be negotiated on a case-by-case
basis for any introduction which results
in a clearing relationship with Wertheim.
(ix) Introducing Firm will be provided with an
OTC Trading System.
(x) Wertheim will provide the Introducing
Firm with all forms, documentation and
order tickets.
3
<PAGE>
WERTHEIM SCHRODER & CO.
Incorporated
Amendment to Agreement between Wertheim Schroder & Co. Incorporated (the
"Wertheim Clearing Firm") and GKN Securities Corp. (the "Introducing Firm").
W I T N E S S E T H :
WHEREAS, Wertheim and the Introducing Firm entered into an Agreement dated May
15, 1993 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Paragraph 1 of the Agreement is amended by inserting at the end thereof new
paragraph "N" to read as follows:
N. For purposes of The Securities Investor Protection Act and the Securities and
Exchange Commission's financial responsibility rules, Introduced Accounts are
accounts of the Clearing Firm, and not the Introducing Firm.
2. Except as provided above, the Agreement shall remain in full force and effect
as it exists on the date hereof.
IN WITNESS WHEREOF, the parties have set their hands as of the 14th day of June,
1993.
WERTHEIM SCHRODER & CO. INCORPORATED
BY: /s/Michael F. Dura
---------------------------------
Michael F. Dura
Managing Director
GKN SECURITIES CORP.
BY: /s/Bernard Golembe
------------------------
<PAGE>
[LETTERHEAD OF WERTHEIM SCHRODER & CO.]
September 27, 1994
Richard Barber
GKN Securities
61 Broadway - 10th Floor
NY, NY 10006
Dear Richard,
Effective October 1, 1994, we have made the following changes to your
schedule of rates and charges:
ITEM Wertheim Schroder Retention
- ---- ---------------------------
Listed and OTC Agency $17.00 per ticket
Customer Principal If 400 average daily billable trades per month -
$16.50 per ticket
Syndicate $16.50 per ticket
Brokerage Non dot trades -
One cent per share on listed transactions
executed through Wertheim
Principal Fixed Income - $25.00 per ticket
Customer
Principal Fixed Income - $20.00 per ticket
Firm
Mutual Fund/UIT's $25.00 per ticket
<PAGE>
ITEM Wertheim Schroder Retention
- ---- ---------------------------
Postage and Handling Wertheim will retain 50 cents of the $15.00
service fee charged by GKN. If 400 average daily
billable trades per month - 0 retention. If GKN
increases service fee above $15.00 an amount
greater than .50 will be retained by Wertheim. This
amount will be discussed at that time.
We look forward to continuing our relationship and stand ready to help you
wherever possible in expanding and growing business.
Very truly yours,
/s/Joseph Golden
Joseph Golden
Vice President
cc: M. Dura
G. Salamone
S. Wood
<PAGE>
[LETTERHEAD OF SCHRODER WERTHEIM & CO. INCORPORATED]
March 11, 1996
Peter Kent
Chief Operation Officer
GKN Securities
61 Broadway - 10th Floor
New York, NY
Dear Peter:
This letter will confirm the following changes in our clearance charges,
effective March 1, 1996.
EQUITIES
Listed & Agency 0 - 250 16.50
251 - 500 16.00
501 - 750 15.50
751 - 1000 15.00
1001+ 14.50
Syndicate Same as Listed and Agency
Principal firm 9.00
FIXED INCOME
Principal, customer 22.50
Principal, firm 10.00
INTEREST
On the first $15 million of paired balances (debits equal to credits), GKN will
retain 50% of the interest spread; for paired balances above $15 million, GKN
will retain 60% of the interest spread on the increment by which such balances
exceed $15 million.
Concerning excess credits, to the extent in any given month that customers on
average are paid at a rate that is less than the average Fed Funds rate for that
period, GKN will retain the first 37.5 basis points of the difference and will
split 50/50 with Schroder Wertheim after that. If there is no profit or there is
a negative spread (i.e., customers are paid more than the average Fed Funds
rate), such negative spread will be applied against and will reduce GKN's
interest retention from other sources.
If you have any questions please let me know.
Very truly yours,
/s/Joseph Golden
Joseph Golden
Vice President
EXHIBIT 10.19
-------------
Employee Name
GKN HOLDING CORP.
STOCK OPTION AGREEMENT
AGREEMENT, made as of February 1, 1995, between GKN HOLDING CORP., A
Delaware corporation ("Company"), and _____________ ("Employee" or "Grantee").
WHEREAS, on February 1, 1995 the Board of Directors of the Company or a
committee thereof (in either event, "Company") authorized the grant to the
Employee of an option to purchase an aggregate of _______ of the authorized but
unissued or treasury shares of the Common Stock of the Company ("Common Stock"),
pursuant to the 1991 Employee Incentive Plan of GKN Holding Corp. ("Plan"), on
the terms and conditions set forth in this Agreement and subject to provisions
of the Plan; and
WHEREAS, the Employee desires to acquire said option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. The Company hereby grants to the Employee the right and option to
purchase all or any part of an aggregate of ______ shares of the Common Stock on
the terms and conditions set forth herein and subject to the provisions of the
Plan ("Option"). The Option is designed to qualify as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended
("Code").
2. The purchase price of each share of Common Stock subject to the Option
("Option Shares") shall be equal to the price at which the Company shall issue
common stock to the public during 1995.
<PAGE>
3. (a) The Option shall be exercisable commencing February 22, 1995. No
Option Shares may be purchased hereunder prior to such date. After the Option
becomes exercisable, it shall remain exercisable, except as otherwise provided
herein, until the close of business on February 21, 2004 ("Exercise Period").
The Option may be exercised, except as provided in subparagraph (b) below, only
if the Employee at the time of exercise is employed by the Company or any
Subsidiary (as defined in Section 424 of the Code) and shall have been so
employed continuously since the date of this Agreement.
(b) If the Employee's employment with the Company or any Subsidiary
terminates for any reason prior to the time that the Option has been fully
exercised, the portion of the Option not yet exercisable on the date of
termination of employment shall immediately expire. Any portion of the Option
which is exercisable on the date of termination of employment and which has
not yet been exercised ("Exercisable Portion") shall also expire unless
exercised within three months after such termination, but in no event after
expiration of the Exercise Period; provided, however, that (i) in the event of
the death of the Grantee during this three month period, the person or persons
to whom the Grantee's rights are transferred by will or the laws or descent and
distribution ("Heir") shall have a period of three months from the date of the
Grantee's death to exercise any Exercisable Portion, but in no event after
expiration of the Exercise Period; (ii) if the board of Directors determines
that the Grantee's employment was terminated for cause, the Exercisable
Portion will immediately expire; (iii) if the Grantee's employment is terminated
by reason of the Grantee's permanent disability (as determined by the Board of
Directors), the Exercisable Portion may be exercised by the Grantee within
twelve months after such termination, but in no event after expiration of the
Exercise Period; and (iv) in the event of the death of the Grantee while in
the employment of the Company or any Subsidiary or during the twelve (12)
month period referred to in (iii) above, the Heir shall have a period of twelve
months from the date of Grantee's death to exercise the Exercisable Portion,
but in no event after expiration of the Exercise Period.
2
<PAGE>
(c) The Option shall not be assignable or transferable except in the
event of the death of the Employee, by will or by the laws of descent and
distribution. No transfer of the Option by the Employee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and such other evidence as the Company may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of the Option.
4. The Employee shall not have any of the rights of a stockholder with
respect to the Option Shares until such shares have been issued after the due
exercise of the Option.
5. In the event of a reorganization, recapitalization, reclassification,
stock split or exchange, stock dividend, combination of shares, or any other
similar change in the Common Stock of the Company, the Board of Directors of the
Company shall, in its sole discretion, make such equitable, proportionate
adjustments, if any, as it deems appropriate in the number and kind of shares
covered by the Option and in the option price thereunder, in order to preserve
the Employee's proportionate interest in the Company and to maintain the
aggregate option price; provided however, that upon the dissolution or
liquidation of the Company, or upon any merger, consolidation or other form of
reorganization, or upon the sale of all or substantially all of the Company's
assets, the Option may be terminated by the Company or its successor and be of
no further effect.
6. The Company hereby represents and warrants to the Employee that the
Option Shares, when issued and delivered by the Company to the Employee in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.
7. The Employee hereby represents and warrants to the Company that s/he is
acquiring the Option and shall acquire the Option Shares for his/her own account
and not with a view to the distribution thereof.
3
<PAGE>
8. Anything in this Agreement to the contrary notwithstanding, the Employee
hereby agrees that s/he shall not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by him/her without registration under the
Securities Act of 1933, as amended ("Act"), or in the event that they are not so
registered, unless (a) an exemption from the Act is available thereunder, and
(b) the Employee has furnished the Company with notice of such proposed transfer
and the Company's legal counsel, in its reasonable opinion, shall deem such
proposed transfer to be so exempt.
9. The Employee hereby acknowledges that:
(a) All reports and documents required to be filed by the Company with
the National Association of Securities Dealers, Inc. and Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 and other applicable
laws within the last 12 months have been made available to the Employee for
his/her inspection.
(b) If s/he exercises the Option, s/he must bear the economic risk of
the investment in the Option Shares for an indefinite period of time because the
Option Shares will not have been registered under the Act and cannot be sold by
him/her unless they are registered under the Act or an exemption therefrom is
available thereunder.
(c) In his/her position with the Company, s/he has had both the
opportunity to ask questions of and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning the
terms and conditions of the offer made hereunder and to obtain any additional
information to the extent to the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense necessary
to verify the accuracy of the information obtained pursuant to subparagraph (a)
above.
(d) The Company shall place stop transfer orders with its transfer
agent against the transfer of the Option Shares in the absence of registration
under the Act or an exemption therefrom.
4
<PAGE>
(e) The certificates evidencing the Option Shares shall bear the
following legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
10. Subject to the terms and conditions of the Agreement, the Option may be
exercised by written notice to the Company at its principal place of business.
Such notice shall state the election to exercise the Option and the number of
Option Shares in respect to which it is being exercised, shall contain a
representation and agreement by the person or persons so exercising the Option
that the Option Shares are being purchased for investment and not with a view to
the distribution or resale thereof, and shall be signed by the person or persons
so exercising the Option. Such notice shall be accompanied by payment of the
full purchase price of the Option Shares as soon as practicable after the notice
and payment is received. The certificate or certificates evidencing the Option
Shares shall be registered in the name of the person or persons so exercising
the Option.
11. In the event of a conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of the Plan shall in all respects
be controlling.
12. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall either be delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the parties at
their respective addresses set forth below, or to such other address as either
shall have specified by notice in the writing to the other, and shall be deemed
duly given hereunder when so delivered or mailed, as the case may be.
5
<PAGE>
13. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
14. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter thereof.
15. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto and
as provided above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or liabilities.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
31st day of March, 1995.
GKN HOLDING CORP. EMPLOYEE:
61 Broadway,
New York, New York 10006 ____________________________
Signature
By: __________________________ ____________________________
Print Name
Address:
____________________________
____________________________
____________________________
6
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
GKN HOLDING CORP.:
We consent to the use of our report included herein and to the reference to
our firm under the headings "Selected Financial Data" and "Experts" in the
Prospectus.
/s/ KPMG Peat Marwick LLP
New York, New York
July 16, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
GKN HOLDING CORP.:
We hereby consent to the use in the Prospectus constituting part of the
Registration Statement of our report dated March 29, 1994 relating to the
consolidated statements of income, changes in stockholders' equity, and cash
flows for the year ended January 31, 1994 of GKN Holding Corp. and Subsidiaries
which appears in such Prospectus. We also consent to the reference of our firm
under the caption "Experts" which also appears in such Prospectus.
/s/ GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
New York, New York
July 16, 1996
EXHIBIT 23.4
CONSENT OF JOHN P. MARGARITIS
The undersigned hereby consents to being named in the Registration
Statement on Form S-1 of GKN Holding Corp. ("Registrant") as a nominee director
of the Registrant.
Dated: June 3, 1996 /s/ John P. Margaritis
----------------------
John P. Margaritis
EXHIBIT 23.5
CONSENT OF ARNOLD B. POLLARD
The undersigned hereby consents to being named in the Registration
Statement on Form S-1 of GKN Holding Corp. ("Registrant") as nominee director of
the Registrant.
Dated: June 3, 1996 /s/ Arnold B. Pollard
---------------------
Arnold B. Pollard
