FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 2, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ___________________
Commission File Number 0-4485
WESTERN BEEF, INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-3266114
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
47-05 Metropolitan Avenue, Ridgewood, New York 11385
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (718) 417-3770
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock par value $.05 per share ("Common Stock")
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on the $7.565 average of the closing bid and asked prices
reported by NASDAQ/NMS on March 16, 1998 was $11,659,027.
As of March 16, 1998, the registrant had issued and outstanding 5,469,220 shares
of Common Stock.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents or the indicated portions thereof have been incorporated
herein by reference:
(1) Specifically identified information in the registrant's definitive
proxy material for its 1998 Annual Meeting of Stockholders is
incorporated by reference as Part III hereof, which definitive proxy
material shall be filed not later than 120 days after January 2,
1998.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF
"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Annual Report on Form 10-K is forward-looking, such as information relating to
the renovation of the Company's existing stores and the construction or
acquisition of new stores, the recoverability of deferred taxes, the continued
availability of credit lines for capital expansion, the suitability of
facilities, access to suppliers, implementation of technological improvement
programs and year 2000 issues relating to computer applications. Such
forward-looking information involves important risks and uncertainties that
could significantly affect expected or actual results in the future from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. These risks and uncertainties include, but are not limited to,
uncertainties relating to economic conditions; delays and other hazards inherent
in building and construction; competition in both the retail and wholesale
markets; government and regulatory policies and certifications (in particular
those relating to the United States Department of Agriculture food stamp
program); the pricing and availability of the products the Company sells and
distributes, including Western Beef label brand products; potential delays in
the implementation of the Company's technological improvement programs; and the
effectiveness of such programs upon the implementation of, and the Company's
ability to resolve, any and all year 2000 computer applications.
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PART 1
ITEM 1. BUSINESS
General
Western Beef, Inc. ("Western Beef" or the "Company") consists principally
of a retail food business that currently operates 19 high-volume, warehouse-type
supermarkets, one outlet-type foodstore and a wholesale food business that
primarily deals in beef, pork, poultry, provisions, produce and private label
groceries. The Company's supermarkets serve the New York Metropolitan area,
while the Company's wholesale business operates in the New York, New Jersey and
Eastern Pennsylvania markets. In the fiscal years ended January 2, 1998
("1997"), January 3, 1997 ("1996") (a fifty-three week fiscal year), and
December 29, 1995 ("1995"), the retail supermarket business accounted for
approximately 73%, 70% and 69% respectively, of the Company's total net sales.
See ITEM 7. Management Discussion and Analysis of Financial Condition and
Results of Operations.
Western Beef's supermarkets are distinguishable from traditional
supermarket formats by their unusually broad selection of meat and produce items
and their limited selection of "non-food" items, such as health and beauty aids.
Western Beef's supermarkets are truly "food stores".
Key elements in Western Beef's business strategy include:
o Competitive Prices - Western Beef's objective is to be perceived as the
"value leader" in its markets by offering the best values to its customers
on a consistent basis. Western Beef reinforces its image as a value leader
by offering a large selection of high quality grocery items under the
"Western Beef" label. These private label items are priced substantially
below comparable national brand items. Western Beef sets its prices based
on "everyday low pricing" policies rather than the "high-low" pricing
strategy, i.e., high regular prices with deep discounts on sale items,
utilized by many other retailers.
o Neighborhood/Ethnic Appeal - Western Beef's supermarkets are located in
densely populated, culturally diverse neighborhoods in the New York
Metropolitan area. The merchandise offerings in Western Beef's
supermarkets are tailored to the preferences, i.e., specific items, brand
names and packaging, of the various ethnic groups represented in each
store's market area. Some of these products are not generally available in
supermarkets operated by national chains.
o Low-Cost Warehouse Format - In order to offer the lowest possible prices
to its customers, Western Beef uses a low cost, no-frills warehouse store
format. Management believes it can be successful in providing superior
value to Western Beef's customers by carefully controlling all operating
costs on a continuous basis.
The retail and wholesale food businesses are generally characterized by
low profit margins with earnings primarily dependent on rapid inventory
turnover, careful cost control and the ability to achieve high sales volume.
Since many food products, particularly produce, meat and dairy products, are
subject to spoilage and become unmarketable with the passage of time, it is
important to avoid overstocking and to reduce excess inventories when they
occur. This is usually accomplished by promotional sales at reduced prices. It
is advantageous to combine wholesale and retail businesses under common
ownership because overstocking in the wholesale business can be relieved by
promotional sales in commonly owned retail stores. Commonly owned operations can
also more readily take advantage of opportunities for bargain purchases,
including stocks with shorter than usual shelf life, as they become available in
wholesale markets.
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For a description of certain financial information of the Company relative
to the Company's industry segments, see Note 11. Segments of Business to the
Company's Consolidated Financial Statements attached hereto.
History
Western Beef, Inc. was incorporated in Delaware on June 3, 1991 under the
name New Southern Blvd. Supermarkets, Inc. The Company is the successor of the
October 30, 1992 combination (the "Combination") of the food businesses of
Quarex Industries, Inc. ("Quarex"), P.S.L. Food Market, Inc. ("PSL") and
Southern Blvd. Supermarkets, Inc. ("Southern"). Certain members of the
Castellana family and their affiliates were controlling stockholders (the
"Principal Stockholders") of each of these entities. Since the consummation of
the Combination, the Principal Stockholders have held in excess of 70% of the
outstanding Common Stock of the Company. In January 1993, the Company's name was
changed to "Western Beef, Inc."
The Company leases certain retail food stores, office and warehouse
facilities from the Principal Stockholders. Concurrent with the Combination,
independent appraisals were obtained of the rentals under all then existing
Company leases in which the Principal Stockholders had an interest as landlord
or tenant (other than one food store lease which was fixed on a formula basis).
Any necessary revisions to the leases were made so that in the aggregate, such
rentals did not exceed fair market value. The Company and the Principal
Stockholders agreed that any future leases from such affiliates would be based
on fair market value as established by independent appraisal. All Company leases
in which the Principal Stockholders had an interest have been amended
periodically, so that the rentals thereunder do not exceed fair market value
1997 Developments
The Company did not open any supermarkets in 1997; however, it commenced
construction of two outlet-type food stores. These two stores, to be located on
Rockaway Boulevard in Queens, N.Y. and Myrtle Avenue in Brooklyn, N.Y., will
each be approximately 11,000 square feet in size. The Rockaway Boulevard store
opened for business on March 30, 1998, and the Myrtle Avenue store is expected
to be opened in mid-1998. Through January 2, 1998, the Company has expended a
total of $1,866,000 for these two outlet-type stores out of a total estimated
construction cost of $2,500,000. Unlike conventional supermarkets, these two
stores will sell a limited selection of food staples, most of which will be
Western Beef brand grocery products, as well as prepackaged meats, cheese and
fish. These products will be distributed from the Company's Central Cutting
operation, where they are cut into convenient sizes, custom packed and
distributed to the Company's supermarkets. This operation produces uniform
packaging, saves expensive store butcher labor costs and employs new packaging
concepts which reduce moisture and eliminate bacteria. As a result, product
shelf life is increased from one week to as much as six weeks. Consequently,
spoilage is significantly reduced and customer acceptance is increased.
Recognizing the importance of maintaining clean, modern stores, the
Company continued its existing store renovation program. In 1997, the Company
completed the renovation of four stores located in East New York, Springfield
Gardens, Elmont and Mineola at an aggregate cost of approximately $1,600,000.
The Company installed new shelving in all four stores, and new light fixtures
and produce and frozen food display cases in three of the stores. Other store
renovations included new front door vestibules in two stores, roof and parking
lot repairs, new ceilings and floors and new cash register check out counters
where needed.
To improve office efficiency and to reduce overhead costs, the Company
added approximately 2,100 square feet of office space to its executive and
administrative office building at a cost of approximately $190,000. The Company
intends to consolidate all administrative personnel into one building as opposed
to the three buildings currently in use.
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To pay for these and other capital improvements, the Company borrowed the
remaining $647,000 of a $3,000,000 credit facility obtained from Amplicon
Financial in 1995. This borrowing was made at the interest rate of 7.75% per
annum and is payable over a five year period. In December 1997, the Company
entered into a sale/leaseback agreement in the amount of $2,332,000 with General
Electric Capital Corporation ("G.E.C.C."). This agreement is for a six-year term
(including three-one year renewals) with a combined interest rate of 7.48% per
annum and provides for monthly lease payments of $33,659 commencing January 1,
1998. At the end of the initial three-year term and each subsequent anniversary
date, the Company has the option to purchase the leased equipment at a reducing
percentage of the original cost of the equipment leased under this agreement.
G.E.C.C. has committed to provide a total credit line of $5,500,000 under this
agreement. The Company also has a $3,000,000 working capital line of credit from
North Fork Bank, all of which is available to fund future operating and
construction programs.
Technology and Year 2000 Issues
The Company is committed to improving its operating efficiencies through
computer technology and automation. All of the Company's stores are equipped
with scanning registers, automated time clocks and hand held inventory ordering
equipment. The Company supports all its operating technology through an
integrated data and voice wide area network ("WAN") connecting the headquarters
office to its stores and distribution facilities. The WAN allows the Company to
integrate all its computer applications into a complete accounting and
management reporting system.
During 1997, the Company greatly expanded its supplier participation in
its electronic data interchange ("EDI") invoicing program. Expanded
implementation of this program has allowed for reduction in clerical
administration and improved price accuracy. During 1997, the Company also
installed electronic article surveillance ("EAS") equipment in all its retail
stores to help control retail theft and improve selling margins.
The Company has certain existing computer programs that were written using
two digits rather than four to define the applicable year. As a result, those
computer programs have time sensitive software that recognizes a date using "00"
as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including among
other things, a temporary inability to process transactions, send orders and
invoices, or engage in similar normal business activities.
The Company has completed the identification of its "legacy" applications
that are not year 2000 compliant and has commenced modification or replacements
of such systems, as necessary. In addition, the Company has received
representations from all vendors from whom it has purchased software in the last
three years that such software is year 2000 compliant. Given the information
known at this time about the Company's systems that are non-compliant and the
Company's ongoing efforts to upgrade or replace critical systems, Management
does not expect the year 2000 compliance of the Company's systems to have a
material adverse effect on either the retail or wholesale segments of the
Company's business. No assurance can be given, however, that all of the
Company's systems will be year 2000 compliant or that compliance costs or the
impact of a failure by the Company to achieve substantial year 2000 compliance
will not have a material adverse effect on either the retail or wholesale
segments of the Company's business.
The Company has initiated communications with its significant suppliers
and customers to determine the extent to which the Company is vulnerable to the
failure of such parties to remediate their year 2000 compliance issues. In
addition, the Company has undertaken a project to create a software "patch"
which would convert any data sent to the Company which was not year 2000
compliant into a format that is compliant. No assurance can be given, however,
that the systems of these outside parties will be made year 2000 compliant in a
timely manner or that the noncompliance of the systems of any of these parties
would not have a material adverse effect on either the retail or wholesale
segments of the Company's business.
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Retail Operations
Western Beef operates nineteen retail supermarkets in the New York
Metropolitan area under the trade name "Western Beef" and one outlet-type food
store that operates under the trade name "Junior's Food Outlet" ("Junior's").
Its first two stores were opened in 1973 and 1979. In the late 1980's,
management decided to pursue a more aggressive growth and expansion program
consisting of new store acquisitions and remodeling and/or closing of smaller
stores. Since that time, the Company has continued to search for suitable
locations in the New York Metropolitan area to open new stores. In 1996 and 1995
the Company opened two and three stores, respectively. No new stores were opened
in 1997.
During 1997, 1996 and 1995, the Company's capital expenditures for its
retail business were $7,085,000, $12,933,000 and $9,027,000, respectively.
All stores are owned or leased by separate subsidiaries of the Company,
with the exception of two subsidiaries, which each have two stores. Most stores
are free standing. All stores are open seven days a week, including evenings,
and are high-volume operations. Most stores are refrigerated, warehouse-type
facilities which are divided into separate areas kept at different temperatures.
Non-perishable items are displayed in an area maintained at normal room
temperatures. In most of the Company's stores, meat is displayed in large
refrigerated rooms where the Company sells both bulk meat, which is custom cut
by store butchers, as well as a full variety of pre-packaged meats. In seventeen
of its stores, the Company sells produce which is displayed in refrigerated
cases maintained at 37 degrees Fahrenheit and where moisture content is
regulated by automatic misting equipment. Dairy and deli products are sold in
separate areas of the Company's stores, maintained at 30-40 degrees Fahrenheit.
Most of the Company's stores also contain stand-alone freezers, which maintain
temperatures suitable for storage of frozen foods, such as ice cream, vegetables
and dinner entrees. The Company's stores also sell a complete line of dry
groceries and some non-food products such as paper products and household
utensils.
Four of the Company's stores operate scratch brick oven bakeries, which
bake a large variety of old world bread and rolls from basic ingredients. One of
these stores supplies three other Company stores with fresh baked goods. It is
anticipated that as capacity permits these baked goods will be introduced into
all of the Company's stores. Thirteen stores also operate full service
delicatessen departments, which cut-to-order the various cheese and processed
meats displayed. The Company's other stores have self-service delicatessen
departments.
The Company promotes its "Western Beef" retail food stores in full color
store circulars and local newspapers, generally at least once a week. In
addition, advertisements are also placed on local radio stations and smaller
cable television networks in both the English and Spanish languages. The Company
distributes its weekly circulars door-to-door in selected neighborhoods and
through insertions in local newspapers. Advertising expenditures for 1997 were
$2,066,000, covering ad promotion, preparation, placement and distribution.
The Company's nineteen retail supermarkets range in size from 9,000 square
feet to 83,000 square feet, with an average of 30,000 square feet per store.
They are supported by the Company's wholesale division warehouses totaling
117,000 square feet. In 1997, approximately 47% of the Company's retail
purchases were derived from the Company's warehouses; the remaining purchases
being delivered directly to the stores from manufacturers or outside
wholesalers.
Junior's was designed and constructed using a "non-frills" approach from
initial construction to daily operation. The building structure is of
pre-fabricated material which reduced the cost of construction and is designed
to be energy efficient. Refrigerated dairy, meat and frozen food products are
merchandised in rear-fed door display units. Dry grocery products are displayed
on floor pallet stacks and "warehouse" type racking utilizing "cut case" display
techniques. This merchandising format is unlike conventional supermarket formats
in that it features a limited selection of high turnover food staples with a
heavy emphasis on the Company's own Western Beef label brand products. In
addition, Junior's sells a wide selection of pre-packaged meat and cheese
products which are distributed from the Company's Central Cutting food
processing facility thereby eliminating the need for expensive store butcher
labor costs.
In 1997, the Company made an evaluation of its warehouse operations
including, the costs of acquiring and maintaining inventories and supplying the
Company's stores. Based on this evaluation, the Company decided not to renew a
grocery warehouse lease and decided instead to increase its purchases from White
Rose Foods ("White Rose") currently, the Company's largest outside supplier. As
a result, the Company has reduced certain overhead costs and reduced its
inventory by approximately $2,600,000, thereby improving the Company's cash flow
from operations. The Company does not have a formal supply agreement with White
Rose. From time-to-time, the Company meets with other wholesale suppliers to
ascertain if the service and prices charged by White Rose are as favorable as
could be received from other sources. Based on these meetings, the Company has
determined that purchasing from White Rose continues to be competitive with
other supply sources and in the best interest of the Company.
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In 1997, White Rose accounted for approximately 16% of the Company's
retail purchases. In 1997, no other supplier accounted for more than 10% of the
Company's purchases. Management believes that the loss of White Rose as a
supplier would not have a long-term adverse effect on the Company's performance
since the Company has access to several other similar suppliers.
During 1997, the Company increased both the number and diversity of the
products marketed under the Western Beef brand label. These products are
purchased from national and local food manufacturers. Western Beef brand
products are generally well accepted by the Company's retail customers and more
Western Beef brand products are expected to be introduced. In general, Western
Beef brand products, which are priced 20% to 50% lower than the comparable
national brand products, generate higher gross profit margins for the Company
than brand name merchandise.
Wholesale Operations
The Company also conducts a wholesale food business. It purchases beef,
pork, poultry and provisions directly from major slaughterhouses, meat and
poultry processors and other suppliers on a daily basis to ensure a supply of
fresh products and to be responsive to customer needs. The Company does not have
formal supply agreements with any of these entities. It purchases merchandise
for its wholesale business by purchase orders, the terms of which are subject to
normal market conditions such as pricing and availability at the time of
purchase. None of these suppliers are material to the Company. Additionally, the
Company's wholesale business warehouses and distributes grocery, produce, dairy
and frozen food products to the Company's own retail food stores.
The Company distributes products from its warehouses in Ridgewood, New
York, which operate 24 hours a day. On average, the perishable inventory is
turned over approximately once a week. Not withstanding such turnover, the
wholesale business requires large amounts of working capital for financing
inventory and accounts receivable.
To facilitate its wholesale business and retail distribution, the Company
(through a subsidiary) owns and operates a fleet of tractors, trailers and
trucks, most of which are refrigerated. At various times since 1989, the Company
has transported food products for others on a limited basis; however,
substantially all trucking operations now are conducted for the Company's own
distribution facilities. In addition, to enhance profitability, the Company
"back hauls" merchandise inventory to achieve reduced product cost.
Competition
The wholesale and retail segments of the food industry are competitive
throughout the market areas served by the Company. These businesses are
generally characterized by low profit margins, with earnings primarily dependent
on rapid inventory turnover, careful cost control and the ability to achieve
high sales volume.
Competition manifests itself in virtually every aspect of the retail food
business, including pricing, advertising and promotion, store size, location and
attractiveness, hours of operation, product selection and quality, employee
friendliness, service and parking facilities. Although Management believes the
Company's retail stores price their products competitively, such pricing has
been made possible principally because of the low overhead costs incurred by
presenting the food in no-frills, warehouse type, bulk display settings without
the typical shelving, lighting, decor and other amenities offered by most
suburban supermarkets. In the past, the Company's retail food business has grown
by opening food stores in locations in Metropolitan New York City areas where
its stores were larger than existing independent supermarkets and convenience
food stores and where there had been a limited presence of national or regional
chain supermarkets. In recent years, however, the Company has experienced
competition from larger supermarket chains, some of which have greater resources
than the Company, as well as with other independent operators. Such competitors
have expanded and are likely to continue expanding, by opening retail food
stores within the Company's markets. Although Management believes it will be
able to continue to compete on the basis of quality, price and reputation, there
can be no assurance that the Company will be able to maintain or improve its
current competitive position.
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Wholesale competition is based principally on price, quality and service,
including the extension of favorable credit terms. Financially stronger
wholesale competitors may be better suited to take advantage of distressed,
"bargain" price opportunities, which arise during periods of over-supply, and to
finance the cost of carrying large inventories and receivables during periods of
market weakness. The wholesale division competes with several other companies on
the wholesale level, some of which are larger than the Company and may have
greater resources. Currently, there are adequate suppliers and multiple sources
of the products which the Company distributes and sells. However, there is a
trend toward consolidation in the food industry with many smaller suppliers
being acquired by larger concerns.
Government Regulation
The food business is subject to, and affected by, substantial and complex
federal, state and local laws and regulations that apply to the sale of food at
both the wholesale and retail level, and it is required to obtain certain
federal, state and local permits and/or licenses for accepting United States
Department of Agriculture ("USDA") food stamps and WIC (Women, Infants and
Children) checks (assistance checks which can only be used to purchase certain
dairy and grocery items), operating a bakery, processing meat, selling produce,
beer and wine coolers, and otherwise in order to conduct business. In addition,
such regulation includes unannounced inspections by government officials
investigating sanitary conditions, weights, measures and other matters. The
Company believes it currently holds all licenses and permits required to conduct
its business and is in compliance in all-material respects with applicable
regulations. For fiscal 1997, 1996 and 1995, respectively, food stamp
redemptions accounted for approximately 20%, 24% and 25% of the Company's retail
sales. There would be a material adverse effect on the Company if it were to
suffer the loss of its USDA permits to accept food stamps or if the Government
was to reduce or eliminate the food stamp program. Management believes that the
decline in 1997 food stamp redemptions resulted from modifications made by the
USDA regarding eligibility requirements for obtaining food stamps.
Employees
As of March 18, 1998, the Company's retail business employed approximately
1,800 people and its wholesale business employed approximately 100 people.
During the year, an attempt was made to unionize the Company's store and
warehouse employees under a collective bargaining agreement. In November 1997,
this unionization effort was defeated in a vote by the Company's employees.
Seasonality
No material portion of the Company's business is affected by seasonal
fluctuations, except that sales are generally strongest around holidays,
particularly the Fourth of July and Easter.
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Environmental Laws
The Company is subject to various applicable federal, state and local laws
and regulations relating to environmental matters. Under such laws, the Company
is exposed to liability primarily as an owner or operator or real property and,
as such, the Company may be responsible for the proper management or remediation
of hazardous substances. Such substances for which the Company may be liable
could include historic contamination of real property, asbestos-containing
material in improvements and hazardous substances and oil used in the course of
regular business operations. Remediation requirements may be imposed whether or
not the owner or operator knew of, or was responsible for, the presence of
contamination by hazardous substances. Also, the presence of contamination may
hinder the owner or operator's ability to lease or sell property or to use the
property as loan collateral.
The Company believes that it does not have any material environmental
liability and that compliance with environmental laws and regulations will not,
individually or in the aggregate, have a material adverse effect on the
Company's operations or its financial condition. There can be no assurance,
however, that new or amended environmental laws or regulations or the future
discovery of environmental conditions will not require additional expenditures
by the Company.
Dependence on Major Customers
The business of the Company is not dependent on a single or a few
customers.
Order Backlog
The Company does not have any backlog of orders.
Research and Development Activity
The Company has not expended material amounts on research and development
activities.
Government Contracts
Other than licenses to accept USDA food stamps and WIC checks, the Company
does not have any material contracts or sub-contracts with any governmental
agency. See "Government Regulation".
ITEM 2. PROPERTIES-GENERAL
The buildings utilized by the Company were constructed at various dates
between 1918 and 1998. The Company considers its warehouse facilities to be in
good condition. All of the Company's retail facilities have been opened or
modernized in recent years and the Company considers these facilities to be in
good condition. The Company believes, to the best of its knowledge, that all its
physical facilities, both owned and leased, are suitable and adequate for their
intended uses and purposes.
Property-Retail
The Company's nineteen retail supermarkets range in size from 9,000 square
feet to 83,000 square feet, with an average of 30,000 square feet per store.
They are supported by Company warehouses totaling 117,000 square feet.
As of January 2, 1998, the Company owned four and leased fifteen of its
stores currently in operation. Nine of the leased stores are rented from
non-affiliated real estate developers and the other six are leased from entities
owned by the Principal Stockholders. See "Item 1. Business-History".
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In January 1997, the Company signed a lease with the Principal
Stockholders for a building located on Rockaway Boulevard in Queens, New York.
The Company renovated this building converting it into its first outlet-type
store of approximately 11,000 square feet. This store opened for business on
March 30, 1998.
In 1996 and 1997 the Company purchased several adjoining parcels of land
for $366,000 on Myrtle Avenue in Brooklyn, N.Y. The Company is building its
second outlet-type store on this site. This store will be approximately 11,000
square feet in size and is expected to open in mid-1998.
The Company has made a deposit on a piece of property in the Bronx.
Subject to meeting certain zoning requirements, the Company intends to construct
a retail supermarket with satellite rental units. The estimated cost of this
project for the purchase of the land and the renovation of this existing
building is estimated to be $5,000,000.
The Company's supermarkets are leased for terms, including options, of up
to 40 years under leases which generally require the Company to pay for all real
estate taxes, repairs and insurance. The average remaining life, including
renewal options, on supermarkets leased from non-affiliates and from the
Principal Stockholders is 24 and 11 years, respectively.
Property-Wholesale
Under a lease purchase agreement, the Company occupies a two-story
warehouse building located in Ridgewood, New York, of approximately 178,000
square feet with an adjacent parking area, requiring annual base rental payments
of approximately $251,000 per year plus taxes, utilities and all other operating
costs with the final payment scheduled for August 2004. The Company utilizes
approximately half of the building for its wholesale operations and the
remainder for its retail operations.
ITEM 3. LEGAL PROCEEDINGS
The Company has various outstanding litigation matters which it considers
to be in the ordinary course of business. In the opinion of Management, the
outcome of these litigation matters will not materially, adversely affect the
Company's financial position.
The Company was a party to a lawsuit commenced in April 1991 in New York
Supreme Court, Putnam County wherein the plaintiffs sought to prevent a
scheduled auction of property held as collateral for a loan to one of the
plaintiffs and brought three actions against the Company seeking compensatory
and exemplary damages for fraud and abuse of process allegedly committed by the
Company. In February 1998 these matters were settled for an amount, not
considered by the Company to be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's Common Stock is traded over-the-counter in the NASDAQ National
Market System ("NASDAQ") under the symbol "BEEF".
The range of the high and low bid prices per share of the Common Stock during
the last two years, listed under the name Western Beef, Inc. as reported by
NASDAQ, is set forth below:
1997 HIGH LOW
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1st Quarter 14 10 3/8
2nd Quarter 12 1/4 8
3rd Quarter 10 3/4 7 3/4
4th Quarter 9 1/2 6
1996 HIGH LOW
---- ---- ---
1st Quarter 8 1/8 5 1/8
2nd Quarter 9 3/4 8 1/8
3rd Quarter 11 1/8 9 1/8
4th Quarter 11 1/8 10 1/4
As of March 16, 1998, there were 313 holders of record of the Company's
Common Stock whose closing bid price on NASDAQ was $7 3/8 per share.
The Company has never paid cash dividends on its Common Stock. Payment of
dividends if any, will be within the discretion of the Company's Board of
Directors and will depend, among other factors, on earnings, capital
requirements and the operating and financial condition of the Company. At the
present time, the Company's anticipated capital requirements are such that it
intends to follow a policy of retaining earnings, if any, in order to finance
the development of its business.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data set forth below is derived from the Company's
consolidated financial statements and should be read in conjunction with the
consolidated financial statements and related notes included elsewhere in this
Annual Report. See ITEM 7. Management Discussion and Analysis of Financial
Condition and Results of Operations.
11
<PAGE>
WESTERN BEEF, INC.
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------
January 2, January 3, December 29, December 30, December 31,
1998 1997 (2) 1995 1994 1993
- - ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $ 317,079 $ 340,873 $ 301,387 $ 291,886 $ 274,107
Net income $ 3,203 $ 5,989 $ 4,934 $ 4,773 $ 4,422
Net income per
share of common
stock-basic(1) $ .59 $ 1.10 $ .90 $ .87 $ .81
Net income per
share of common
stock-diluted (1) $ .58 $ 1.09 $ .90 $ .87 $ .81
Total assets $ 76,254 $ 74,499 $ 63,313 $ 54,731 $ 48,530
Long-term obligations $ 8,837 $ 11,011 $ 7,691 $ 7,224 $ 5,614
- - ------------------------------------------------------------------------------------------------
</TABLE>
(1) Adjusted to reflect a 1.1 for 1 stock split in January 1993.
(2) Fifty-three week fiscal year. The other fiscal years presented have
fifty-two weeks.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following should be read in conjunction with the Company's financial
statements and the related notes included herein.
OVERVIEW
The Company expects competition in the retail segment from major chains as
the Company expands and continues to open new retail supermarkets. Several of
the Company's retail stores have been impacted by this competition; however, the
Company believes that its ability to serve its customers with quality
merchandise at the lowest price should allow it to stay profitable and maintain
a significant part of its market share.
General
In March 1998, the Company opened one outlettype supermarket and is
constructing a second outlet-type store which is expected to open in mid-1998.
The first store was constructed on property leased from the Principal
Stockholders and the second store is being constructed on several adjoining
parcels of land purchased by the Company in 1996 and 1997. Through January 2,
1998, the Company has expended a total of $1,866,000 for the two outlettype
stores. When completed these stores are expected to cost a combined total of
$2,500,000. The Company is actively seeking more sites for possible openings of
new stores in 1998.
The Company has made a deposit on a piece of property in the Bronx.
Subject to meeting certain zoning requirements, the Company intends to construct
a retail supermarket with satellite rental units. The estimated cost of this
project for the purchase of the land and the renovation of this existing
building is estimated to be $5,000,000.
The cost of opening a new supermarket is dependent upon the size of the
supermarket and the amount of building renovations necessary to convert the
property into a supermarket. Other factors involved would be the amount of
equipment to be installed along with the number of product departments in the
store. There can be no assurance that the Company can implement this strategy in
a timely manner or at the costs stated above or that such strategy, when
implemented, will be successful. The Company's growth and expansion program is
susceptible to the hazards inherent in building and construction, including
delays, cost overruns and zoning issues. While in the past such issues have not
materially affected the Company's growth and expansion program, there can be no
assurance that in the future such issues will not delay the implementation of
this program or have a material effect on this program and the Company.
12
<PAGE>
For 1998, the Company plans on improving its inventory management system
in both the distribution facilities and stores. The wholesale division warehouse
will be equipped with hand held terminals to allow for scanning of product bar
codes in billing and inventory management applications. To allow for this and
future software enhancements the Company has completed an upgrade of its host
client server hardware.
Year 2000 Issues
The Company has completed the identification of its "legacy" applications
that are not year 2000 compliant and has commenced modification or replacements
of such systems, as necessary. In addition, the Company has received
representations from all vendors from whom it has purchased software in the last
three years that such software is year 2000 compliant. Given the information
known at this time about the Company's systems that are non-compliant and the
Company's ongoing efforts to upgrade or replace critical systems, Management
does not expect the year 2000 compliance of the Company's systems to have a
material adverse effect on the Company's liquidity or results of operations.
No assurance can be given, however, that all of the Company's systems will be
year 2000 compliant or that compliance costs or the impact of a failure by the
Company to achieve substantial year 2000 compliance will not have a material
adverse effect on the Company's future liquidity or results of operations.
The Company has initiated communications with its significant suppliers
and customers to determine the extent to which the Company is vulnerable to the
failure of such parties to remediate their year 2000 compliance issues. In
addition, the Company has undertaken a project to create a software "patch"
which would convert any data sent to the Company which was not year 2000
compliant into a format that is compliant. No assurance can be given, however,
that the systems of these outside parties will be made year 2000 compliant in a
timely manner or that the noncompliance of the systems of any of these parties
would not have a material adverse effect on the Company's liquidity or results
of operations.
RESULTS OF OPERATIONS
1997 Compared to 1996
For 1997, the Company achieved net income of $3,203,000, or $.58 per
share, on net sales of $317,079,000 as compared to 1996 net income of
$5,989,000, or $1.09 per share, on net sales of $340,873,000.
The 7.0% decrease in net sales in 1997 compared to 1996 resulted from (i)
1996 being a 53-week fiscal year, whereas 1997 was a 52-week fiscal year; (ii) a
decline in retail and wholesale net sales as a result of lower food stamp
redemptions, which the Company believes resulted from modifications made by the
USDA to food stamp eligibility requirements; (iii) a decline of 16.3% in
wholesale net sales as a result of a tighter credit policy adopted by the
Company; (iv) low food price inflation; (v) increased competition; and was
partially offset by the full year's sales in 1997 of the two stores that opened
in 1996. The retail segment provided 73.3% of total net sales in 1997, as
compared with 70.3% of total net sales in 1996.
Gross profits, as a percentage of net sales, for 1997 and 1996 were 25.0%
and 24.2%, respectively. The increase in the gross profit percentage for 1997
resulted primarily from the increased ratio of retail to wholesale sales in 1997
as compared with 1996. For the years 1997 and 1996, the retail segment
contributed 90.9% and 89.0% of the gross profit, respectively.
Selling, general and administrative expenses expressed as a percentage of
sales increased to 23.5% in 1997 from 21.3% in 1996 primarily as a result of (i)
the inclusion of the full year's cost in 1997 of the two stores that opened in
1996; (ii) certain occupancy costs, such as utilities, rent and depreciation
which do not vary directly with sales declines thereby increasing the expense
ratio; and (iii) wage and related benefit costs which were unfavorably impacted
by increases in the federal minimum wage.
13
<PAGE>
Income from operations decreased 51.3% to $4,732,000 in 1997 from
$9,717,000 in 1996. This decrease was principally the result of (i) decreased
sales partially offset by an increase in the gross profit percentage; and (ii)
higher selling, general and administrative expenses.
Income Taxes
The effective tax rate of the Company decreased to 40.0% for 1997 from
43.3% for 1996 as a result of the utilization of low income housing tax credits
and lower state and local income taxes resulting from investment tax credits.
The Company's deferred tax asset resulted from temporary differences of
this asset in reporting depreciation expense for income tax and financial
reporting purposes which accelerated the reporting of taxable income for income
tax purposes. These temporary differences are expected to reverse themselves in
future periods and Management believes the Company will recover the entire
amount of this asset.
The Company's investment in low income housing credits reduced the
Company's effective tax rate approximately 4.3% in 1997 and 2.1% in 1996. In
addition to the low income housing credits, the Company participated in the
federally sponsored Work Opportunity Tax Credit ("WOTC") program which helped to
reduce the 1997 effective tax rate by 1.3%.
Retail Segment
Net sales in the retail segment decreased 3.0% in 1997 compared to 1996 as
a result of (i) 1996 being a 53-week fiscal year, whereas 1997 was a 52-week
fiscal year; (ii) a decline in food stamp redemptions, which the Company
believes resulted from modifications made by the USDA to food stamp eligibility
requirements; (iii) low food price inflation; and (iv) increased competition.
These declines were partly offset by the inclusion in 1997 net sales of full
year net sales for the two stores opened by the Company in 1996. Same stores
sales decreased 4.01% in 1997 as compared to 1996 due to 1997 being a shorter
fiscal year and decreased food stamp redemptions.
Retail gross profits as a percentage of sales increased to 31.0% in 1997
from 30.6% in 1996, principally as a result of the increased ratio of retail to
wholesale sales, as well as the capital expansion program, which increased the
selling square footage dedicated to the higher gross profit dairy, frozen and
bakery merchandise categories. Retail income from operations decreased 46.2% to
$4,727,000 in 1997 from $8,793,000 in 1996. This decrease was principally the
result of (i) decreased net sales; and (ii) higher selling, general and
administrative expenses.
Wholesale Segment
Wholesale net sales decreased 16.3% to $84,679,000 from $101,162,000 in
1996. This decrease in wholesale net sales resulted primarily from (i) an
adjustment of the Company's credit policy to sell only to customers who have the
requisite credit worthiness; (ii) low food price inflation; and (iii) reduced
food stamp redemptions at wholesale customers of the Company. Wholesale gross
profit for 1997 and 1996 was 8.6% and 8.9%, respectively. Wholesale income from
operations decreased 99.5% to $5,000 in 1997 as compared with $924,000 in 1996
due principally to increased write offs of uncollectable receivables.
Wholesale gross profits as a percentage of sales decreased to 8.6% in 1997
from 8.9% in 1996, principally as a result of (i) higher purchase costs; and
(ii) increased competition.
14
<PAGE>
Recent Accounting Standards
In 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components within financial statements.
Comprehensive income consists of all changes in equity during a period except
those resulting from investments by and distributions to owners. SFAS No. 130
also requires that all components of comprehensive income be disclosed in a
separate financial statement or on the face of the income statement. This
statement is effective for the Company beginning in 1998 and requires
reclassification of prior period information for comparative purposes.
In 1997, the FASB also issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprises and Related Information"
("SFAS No. 131"). SFAS No. 131 replaces the products and services approach of
SFAS No. 14's to reporting business segments with the management approach. Under
the provision of SFAS No. 131, business segments are based on the way that the
chief operating decision maker organizes the segments within the enterprises,
for deciding how to allocate resources and in assessing performance. SFAS No.
131 is effective for the Company in 1998, and segment information that is
reported with corresponding information for the initial year must be restated
unless it is impractical to do so.
In 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 132, "Employers' Disclosures about Pensions
and Other Post-retirement Benefits" ("SFAS No. 132"), an amendment of FASB
Statements No. 87, 88 and 106. SFAS No. 132 revises employers' disclosure about
pension and other post-retirement benefit plans. SFAS No. 132 is effective for
the Company in 1998.
The adoption of these statements is not expected to have a material effect
on the consolidated financial statements of the Company.
1996 Compared to 1995
For 1996, the Company achieved net income of $5,989,000, or $1.09 per
share, on net sales of $340,873,000, as compared to 1995 net income of
$4,934,000, or $.90 per share, on net sales of $301,387,000.
The 13.0% increase in net sales in 1996 compared with 1995 net sales
resulted from (i) inclusion of the full year sales for the three stores that
were opened in mid-1995; (ii) inclusion of sales of the two stores that were
opened in 1996; (iii) a 8.8% increase in wholesale sales; and (iv) 1996 being a
53-week fiscal year, whereas 1995 was a 52- week fiscal year. Net sales from the
new retail stores raised net sales of the retail segment to 70.3% of total net
sales in 1996, as compared with 69.2% of total net sales in 1996.
Gross profits as a percentage of net sales for 1996 and 1995 were 24.2%
and 24.0%, respectively. This increase was principally the result of the
increased ratio of retail to wholesale sales in 1996 as compared to 1995. The
retail segment contributed 89% of the gross profit for both years.
Selling, general and administrative expenses expressed as a percentage of
net sales increased to 21.3% in 1996 from 21.17% in 1995 principally as a result
of (i) the costs of the two new stores that opened in 1996; and (ii) the full
year costs in 1996 of the stores that opened in 1995. Income from operations
increased 9.3% to $9,717,000 in 1996 from $8,889,000 in 1995. This increase
income from operatons was
15
<PAGE>
principally the result of the total of (i) increased net sales; and (ii) higher
gross profit percentage; which was partially offset by increased selling,
general and administrative expense.
Retail Segment
Net sales in the retail segment increased 15.0% in 1996 compared to 1995
as a result of (i) 1996 being a 53-week fiscal year, whereas 1995 was a 52-week
fiscal year; and (ii) inclusion of sales of the two stores that were opened in
1996. Same store sales increased 1.1% in 1996 as compared to 1995 due to 1996
being a longer fiscal year. Gross profits for 1996 and 1995 were 30.6% and
30.8%, respectively. Income from operations for the retail segment increased
13.0% to $8,793,000 in 1996 from $7,781,000 in 1995.
In 1996, the Company incurred competition in the retail segment from major
chains as the Company expanded and continued to open new retail supermarkets.
Several of the Company's retail stores were impacted by this competition;
however, the Company was able to stay profitable and believes that it has
retained a significant part of its market share.
Wholesale Segment
Wholesale net sales increased 8.8% to $101,162,000 in 1996 from
$92,961,000 in 1995. This increase was the result of higher net sales to an
existing supermarket chain customer and expanded sales in Philadelphia, PA. The
Company believes this increase in sales also arose as a result of the closure of
a competitor of the Company. Wholesale gross profit for 1996 and 1995 remained
constant at the 1995 level of 8.9%. Wholesale income from operations decreased
16.6% to $924,000 from $1,108,000 in fiscal 1995 due to higher delivery, general
and administrative expenses. The wholesale division continued to have
competition in its market segment in 1996 compared with 1995.
Income Taxes
The effective tax rate of the Company decreased to 43.3% for 1996 from
45.5% for 1995, primarily as a result of the utilization of low income housing
tax credits and lower state and local income taxes.
The Company's deferred tax asset resulted from temporary differences of
this asset in reporting depreciation expense for income tax and financial
reporting purposes which accelerated the reporting of taxable income for income
tax purposes. These temporary differences are expected to reverse themselves in
future periods and Management believes the Company will recover the entire
amount of this asset.
The Company's investment in low income housing credits reduced the
Company's effective tax rate approximately 2.1% in 1996 and 1.6% in 1995.
Liquidity and Capital Resources
Net cash flow from operations was $12,046,000 for 1997. The Company had
capital expenditures of $7,322,000 in 1997, primarily on (i) equipment
purchases and improvements at the two outlet-type food stores under
construction; (ii) the renovation of four older stores; and (iii) the expanded
office space at the Company's executive and administrative office building. The
Company also repaid long-term debt of $3,006,000 in 1997. As of January 2, 1998,
the Company had $7,527,000 in cash and cash equivalents available for
acquisitions and expansion.
These additions and improvements were funded by cash flow from operations,
the drawdown of $647,000 under a loan obtained from Amplicon Financial and
$2,232,000 received from General Electric Capital Corporation pursuant to a
sale/leaseback agreement. The Amplicon Financial loan drawdown, the
16
<PAGE>
final drawdown under a $3,000,000 facility, was at the interest rate of 7.75%
per annum and is payable over a five year period. The General Electric Capital
Corporation sale/leaseback agreement was at a rate of 7.48% per annum payable
over a three year period, with three-one year renewals, and a declining balloon
payment option at the end of each rental term.
The Company has available a $3,000,000 working capital line of credit from
North Fork Bank expiring on July 1, 1998, which the Company expects will be
renewed for another year on similar terms. At January 2, 1998, the entire
balance was available for use by the Company. The Company also has several
financial institutions that it believes would be available to finance new store
equipment, usually over a five to ten year period.
The Company plans to utilize most of its available cash flow to fund
capital expenditures for renovating existing stores and for opening new retail
outlets. There are no restrictions on the transfer of assets between segments,
though the Company intends to let each segment develop its own growth. The
Company expects that available cash flow from the wholesale segment will be used
to expand its customer base, which should result in higher levels of inventory
and accounts receivable. Although Management believes that these expenditures
will enable the Company to expand its customer base, there can be no assurance
that this strategy will be successful.
The Company believes that its cash flow from operations will be sufficient
to meets its current obligations and commitments for the next twelve months. In
addition to the two outlet-type stores currently under construction and the
property being developed in the Bronx, the Company has no other material capital
commitments. The Company expects the aggregate 1998 capital commitments for
these projects to be approximately $6,000,000. See "Overview" for a description
of the factors that may effect the costs of opening a new supermarket, and the
risks inherent in the Company's growth and expansion plan.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Pursuant to a resolution of the Company's Board of Directors and the Audit
Committee thereof, dated September 15, 1997, the Company discontinued the
engagement of BDO Seidman, LLP ("BDO") and engaged Price Waterhouse LLP as the
Company's independent accountants for the Company's 1997 fiscal year.
During the 1995 and 1996 fiscal years and the subsequent interim period
preceding the termination of BDO, the Company had no disagreements with BDO on
any matter of accounting principles or practices, financial statement disclosure
or auditory scope or procedure, which disagreements, if not resolved to the
satisfaction of BDO, would have caused it to make reference to the subject
matter of the disagreements in connection with its reports.
PART III
All items under this section are incorporated by reference to the
Company's proxy statement that will be filed no later than 120 days after
January 2, 1998.
17
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K
The following documents are being filed as a part of this report:
(a) 1. Financial Statements
2. Financial Statement Schedule
All other schedules are omitted since the required information is either not
required or not present.
3. Exhibits
3.1 Certificate of Incorporation of the Company, as amended
(1)
3.2 Certificate of Amendment to the Certificate of
Incorporation of the Company, dated January 13, 1993 (3)
3.3 By-Laws of the Company (2)
10.1 Agreement of Combination (2)
10.2 Agreement of Merger (1)
10.3 Certificate of Merger (1)
10.4 Master Lease Agreement dated December 29, 1997 between
the Company and General Electric Capital Corporation (4)
10.5 $3,000,000 Line of Credit Agreement expiring July 1,
1998 between the Company and North Fork Bank in the form
of a Promissory Note dated September 17, 1997 from the
Company to North Fork Bank (4)
10.6 Lease Agreement dated November 1, 1991 between P.M.C.
Supermarket, Inc. d/b/a/ Western Beef Forest Avenue Inc.
and Forest Associates, an affiliate of the Principal
Stockholders for the rental of the Company's Forest
Avenue store. (4)
10.7 Store Lease dated February 6, 1990 between the Company
and 130-35 Merrick Boulevard Associates, L.P., an
affiliate of the Principal Stockholders, for the rental
of the Company's Merrick Boulevard Store. (4)
10.8 Parking Lot Lease dated February 6, 1990 between the
Company and CM Boulevard Associates, L.P., an affiliate
of the Principal Stockholders, for the rental of the
parking lot at the Company's Merrick Boulevard Store.
(4)
10.9 Agreement of Lease dated July 6, 1989 between Quarex,
Inc. and Elmont Q. Properties, an affiliate of the
Principal Stockholders, for the rental of the Company's
Elmont Store. (4)
18
<PAGE>
10.10 Lease Agreement dated November 1, 1992 between Western
Beef - 173rd Street Inc. and Peter Castellana, Jr. and
Marie Castellana for the rental of the Company's 173rd
Street Store. (4)
10.11 Lease Agreement dated March 1, 1990 between western Beef
East New York Inc. and Elmont Q. Properties, Inc., an
affiliate of the Principal Stockholders, for the rental
of the Company's East New York Store. (4)
10.12 Store Lease dated January 30, 1997 between the Company
and ANT Realty Corp., an affiliate of the Principal
Stockholders, for the lease of the Company's Rockaway
Boulevard Store. (4)
10.13 Lease Agreement dated January 23, 1992 between Quarex
Inc. and 61 2nd Street Associates, an affiliate of the
Principal Stockholders for the lease of the Company's
Mineola Store. (4)
10.14 Agreement dated September 18, 1995 between the Company
and Amplicon Financial Corp. (4)
10.15 Assignment dated March 19, 1996 between Western
Beef-Steinway Street, Inc. and Metlife Capital Financial
Corporation (4)
10.16 Amended and Restated Mortgage dated March 19, 1996
between Western Beef - Steinway Street, Inc. and Metlife
Capital Financial Corporation (4)
10.17 Amended and Restated Promissory Noted dated March 19,
1996 between Western Beef-Steinway Street, Inc. and
Metlife Capital Financial Corporation (4)
10.18 Indenture dated September 17, 1993 between Ranbar
Packing, Inc. and Astoria Federal Savings and Loan
Association (4)
10.19 Note dated September 17, 1993 between Ranbar Packing,
Inc. and Astoria Federal Savings and Loan Association
(4)
10.20 Contract of Sale dated June 29, 1993 between Ranbar
packing, Inc. and Astoria Federal Savings and Loan
Association (4)
21 Subsidiaries (4)
23.1 Consent of Price Waterhouse LLP (4)
23.2 Consent of BDO Seidman, LLP (4)
27 Financial Data Schedule (4)
- - --------------------------------------------------------------------------------
(1) Incorporated by reference to the Form 8-K Current Report
filed November 13, 1992 (the "8-K")
(2) Incorporated by reference to Form S-4 File No. 33-44494.
(3) Filed with the Annual Report on Form 10-K for the fiscal
year 1992.
19
<PAGE>
(4) Filed herewith.
(b) No reports on Form 8-K have been filed during the last quarter of the
fiscal year covered by this report on Form 10-K.
(c) See Item 14(a)3, above
(d) Not applicable
20
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15 (d) of the securities
exchange act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WESTERN BEEF, INC.
By: /s/Peter Castellana, Jr.,
Peter Castellana, Jr.,
President, Chief Executive Officer
and Director
Date: March 30, 1998
SIGNATURE TITLE DATE
--------- ----- ----
/s/Peter Castellana, Jr. President, Chief Executive March 30, 1998
- - -------------------------- Officer and Director
Peter Castellana, Jr.
/s/Chris Darrow Principal Financial March 30, 1998
- - -------------------------- and Accounting Officer
Chris Darrow
/s/Joseph Castellana Director March 30, 1998
- - --------------------------
Joseph Castellana
/s/Stephen R.Bokser Director March 30, 1998
- - --------------------------
Stephen R. Bokser
/s/Arnold B. Becker Director March 30, 1998
- - --------------------------
Arnold B. Becker
<PAGE>
Western Beef, Inc. and Subsidiaries
Consolidated Financial Statements
Years Ended January 2, 1998,
January 3, 1997 and December 29, 1995
<PAGE>
Western Beef, Inc. and Subsidiaries
Contents
Reports of Independent Accountants F - 1-2
Consolidated financial statements:
Consolidated balance sheets F - 3
Consolidated statements of income F - 4
Consolidated statements of stockholders' equity F - 5
Consolidated statements of cash flows F - 6
Notes to consolidated financial statements F - 7-24
Report of Independent Accountants on consolidated
financial statement schedule F - 25
Schedule II - Valuation and Qualifying Accounts F - 26
<PAGE>
Report of Independent Accountants
To the Board of Directors and
Stockholders of Western Beef, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows present
fairly, in all material respects, the financial position of Western Beef, Inc.
and Subsidiaries at January 2, 1998 and the results of their operations and
their cash flows for the fifty-two week period then ended in conformity with
generally accepted accounting principles. 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
of these statements in accordance with generally accepted auditing standards
which 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, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
March 5, 1998
F-1
<PAGE>
Report of Independent Certified Public Accountants
To the Stockholders and Directors of Western Beef, Inc.:
We have audited the accompanying consolidated balance sheet of Western Beef,
Inc. and Subsidiaries as of January 3, 1997, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the two
years in the period ended January 3, 1997. We have also audited the schedule
listed in the accompanying index. These consolidated financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and schedule
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements and
schedule are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements and schedule. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements and
schedule. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Western Beef, Inc.
and Subsidiaries as of January 3, 1997, and the results of their operations and
their cash flows for each of the two years in the period ended January 3, 1997,
in conformity with generally accepted accounting principles.
Also, in our opinion, the schedule presents fairly, in all material respects,
the information set forth therein for each of the two years in the period ended
January 3, 1997.
BDO Seidman, LLP
New York, New York
March 5, 1997
F-2
<PAGE>
Western Beef, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Par Value)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
January 2, January 3,
1998 1997
<S> <C> <C>
Assets
Current:
Cash and cash equivalents $ 7,527 $ 2,634
Accounts receivable, net of allowance for
doubtful accounts of $552 and $386 6,275 8,434
Inventories 14,113 17,668
Prepaid expenses and other current assets 2,933 1,461
Deferred income taxes 1,235 1,253
-------- --------
Total current assets 32,083 31,450
Property, plant and equipment, net 42,258 41,276
Other assets 1,913 1,773
-------- --------
Total assets $ 76,254 $ 74,499
======== ========
Liabilities and Stockholders' Equity
Current:
Current portion of long-term debt $ 1,571 $ 1,505
Current portion of obligations under capital leases 1,090 1,341
Accounts payable 8,903 10,617
Accrued expenses and other current liabilities 4,834 4,720
Accounts payable-related party 1,997 797
-------- --------
Total current liabilities 18,395 18,980
Long-term debt, net of current portion 5,707 7,310
Obligations under capital leases, net of current portion 3,130 3,701
Deferred income taxes payable 2,059 1,484
Other non-current liabilities 1,834 1,142
-------- --------
Total liabilities 31,125 32,617
-------- --------
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $.05 par value - 2,000 shares
authorized; none issued -- --
Common stock, $.05 par value - 15,000 shares authorized;
5,466 and 5,463 shares, respectively, issued and outstanding 273 273
Capital in excess of par value 11,390 11,379
Retained earnings 33,563 30,360
Deferred compensation (97) (130)
-------- --------
Total stockholders' equity 45,129 41,882
-------- --------
$ 76,254 $ 74,499
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
Western Beef, Inc. and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Net sales $317,079 $340,873 $301,387
Cost of sales 237,808 258,402 228,923
-------- -------- --------
Gross profit 79,271 82,471 72,464
Selling, general and administrative expenses 74,539 72,754 63,575
-------- -------- --------
Income from operations 4,732 9,717 8,889
Other income, net 603 837 162
-------- -------- --------
Income before provision for income taxes 5,335 10,554 9,051
Provision for income taxes 2,132 4,565 4,117
-------- -------- --------
Net income $ 3,203 $ 5,989 $ 4,934
======== ======== ========
Net income per share of common stock-basic $ .59 $ 1.10 $ .90
======== ======== ========
Net income per share of common
stock - diluted $ .58 $ 1.09 $ .90
======== ======== ========
Weighted average shares outstanding - basic 5,465 5,463 5,463
======== ======== ========
Weighted average shares outstanding - diluted 5,503 5,497 5,477
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
Western Beef, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(In Thousands)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Capital in
-------------------- excess of Retained Deferred
Shares Par value par value Earnings Compensation
<S> <C> <C> <C> <C> <C>
Balance, December 30, 1994 5,463 $ 273 $ 11,516 $ 19,437 $ --
Net income for 1995 -- -- -- 4,934 --
Other -- -- (305) -- --
Granting of below-market stock
options -- -- 168 -- (168)
Amortization of deferred
compensation -- -- -- -- 4
-------- -------- -------- -------- --------
Balance, December 29, 1995 5,463 273 11,379 24,371 (164)
Net income for 1996 -- -- -- 5,989 --
Amortization of deferred
compensation -- -- -- -- 34
-------- -------- -------- -------- --------
Balance, January 3, 1997 5,463 273 11,379 30,360 (130)
Net income for 1997 -- -- -- 3,203 --
Amortization of deferred
compensation -- -- -- -- 33
Stock options exercised 3 -- 11 -- --
-------- -------- -------- -------- --------
Balance, January 2, 1998 5,466 $ 273 $ 11,390 $ 33,563 $ (97)
======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
Western Beef, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 3,203 $ 5,989 $ 4,934
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,172 3,395 2,747
Provision for losses on accounts receivable 955 611 539
Deferred income taxes 593 (316) 916
(Gain) loss on disposal of property, plant and equipment (80) (20) 19
(Increase) decrease in current assets:
Accounts receivable 1,204 (291) (2,386)
Inventories 3,555 (1,709) (2,620)
Prepaid expenses and other current assets (1,472) 559 780
Other assets (140) (59) 240
(Decrease) increase in current liabilities:
Accounts payable and accounts payable - related party (514) (1,720) 537
Accrued expenses and other current liabilities 114 1,530 1,711
Increase in non-current liabilities 456 1,142 --
-------- -------- --------
Net cash provided by operating activities 12,046 9,111 7,417
-------- -------- --------
Cash flows from investing activities:
Capital expenditures (7,322) (13,121) (9,304)
Investment in low-income housing credits -- -- (1,067)
-------- -------- --------
Net cash (used in) investing activities (7,322) (13,121) (10,371)
-------- -------- --------
Cash flows from financing activities:
Proceeds from sale of property, plant and equipment 2,517 112 228
Proceeds on issuance of long-term debt 647 6,377 2,777
Payments on long-term debt (3,006) (2,276) (1,931)
Issuance of common stock 11 -- --
-------- -------- --------
Net cash provided by financing activities 169 4,213 1,074
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 4,893 203 (1,880)
Cash and cash equivalents, beginning of year 2,634 2,431 4,311
-------- -------- --------
Cash and cash equivalents, end of year $ 7,527 $ 2,634 $ 2,431
======== ======== ========
Cash paid during the year for:
Interest $ 1,086 $ 1,071 $ 775
Income taxes $ 2,569 $ 4,442 $ 2,741
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Description of Business
Western Beef, Inc. and Subsidiaries, all of which are wholly-owned,
(the "Company") operate high-volume, warehouse-type, retail food stores
and a wholesale meat and poultry business. During 1997 and 1996, the
Company operated nineteen retail food stores. During 1995, the Company
operated seventeen retail stores. The Company also sells poultry, beef,
pork and provisions through its wholesale operations to supermarket
chains, retailers and other distributors. The retail stores serve the New
York/New Jersey metropolitan area and the wholesale business operates
principally in the New York, New Jersey and Eastern Pennsylvania markets.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
Fiscal Year
The Company uses a 52-53 week fiscal year, with the year ending on the
Friday closest to December 31. The fiscal years ended January 2, 1998,
January 3, 1997 and December 29, 1995 are referred to as 1997, 1996 and
1995, respectively, throughout the financial statements. Fiscal years 1997
and 1995 include 52 weeks and fiscal year 1996 includes 53 weeks.
Revenue Recognition
Retail revenues are recorded at the time of sale. Wholesale revenues are
recorded at the time the products are shipped.
Inventories
Inventories consisting of meats, poultry, groceries and other food
products held for resale, are stated at the lower of cost (first-in,
first-out retail method) or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Depreciation and
amortization are computed on the straight-line method over the estimated
useful lives of the assets. The buildings under capital lease and
leasehold improvements are being amortized over their useful lives.
Repairs and maintenance are charged to operations. Renewals and
improvements are capitalized.
F-7
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
121"), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" requires that long-lived assets held
and used by the Company be reviewed for impairment whenever events or
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment is recognized, to the extent that the sum of
undiscounted estimated future cash flows expected to result from the
asset's use is less than its carrying value. The Company has evaluated its
asset base under the guidelines established by SFAS No. 121 and determined
that no impairment is present.
Estimated Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"),
"Disclosure about Fair Value of Financial Instruments", requires
disclosures of fair value information about financial instruments for
which it is practicable to estimate the value, whether or not recognized
on the balance sheet. The fair value of financial instruments, including
cash, accounts receivable, accounts payable and accrued expenses,
approximate carrying value. The carrying amounts of long-term debt and
obligations under capital leases approximate fair value because the
interest rates approximate current market rates.
Income Taxes
Deferred income taxes are recognized for temporary differences between the
basis of assets and liabilities for financial statement and income tax
purposes. Deferred income taxes represent the future tax return
consequences of those differences which will either be taxable or
deductible when the assets and liabilities are recovered or settled.
Other Assets
Included in other assets are investments of approximately $901,000 and
$974,000 at January 2, 1998 and January 3, 1997, respectively, which the
Company made in two limited partnerships during 1995. These investments
have generated low income housing tax credits to be used to offset future
federal income taxes. In accordance with Emerging Issues Task Force Issue
No. 94-1, "Accounting for Tax Benefits Resulting from Investments in
Affordable Housing Projects", these investments are accounted for under
the effective yield method. The credits are guaranteed by an
indemnification agreement in the partnership contract.
Net Income Per Share
Effective January 1997, the Company accounts for its net income per share
in accordance with Statement of Financial
F-8
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
Accounting Standards No. 128, "Earnings Per Share" ("SFAS No. 128"). Under
SFAS No. 128, the Company is required to report both basic net income per
share based on the weighted average number of common shares outstanding
and diluted net income per share based on the weighted average number of
common shares outstanding plus all potentially dilutive common shares
issuable. In accordance with SFAS No. 128, all prior period net income per
share data have been restated. Net income per share calculations for 1997,
1996 and 1995 are presented in Note 5.
Cash Equivalents
Cash equivalents include all highly liquid debt instruments with an
original maturity of three months or less. Cash equivalents consist
primarily of money market accounts.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of cash and trade accounts
receivable. The Company maintains some of its cash balances in accounts
which exceed federally insured limits, but has not experienced any losses
to date resulting from this policy. The Company sells primarily to retail
customers and wholesale food businesses located in the New York
metropolitan area. Although the Company is directly affected by the
well-being of the food industry, management does not believe significant
credit risk exists.
Store Opening Costs
Costs associated with the opening of new stores are expensed as incurred.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues, costs and
expenses during the reporting period. Actual results could differ from
those estimates.
Recent Accounting Standards
In 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No. 130"). SFAS No.130 establishes standards
for reporting and display of comprehensive income and its components
within financial
F-9
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
statements. Comprehensive income consists of all changes in equity during
a period except those resulting from investments by and distributions to
owners. SFAS No. 130 also requires that all components of comprehensive
income be disclosed in a separate financial statement or on the face of
the income statement. This statement is effective for the Company
beginning in 1998 and requires reclassification of prior period
information for comparative purposes.
In 1997, the FASB also issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"). SFAS No. 131 replaces the products and
services approach of SFAS No. 14 to reporting business segments with the
management approach. Under the provisions of SFAS No. 131, business
segments are based on the way that the chief operating decision maker
organizes the segments within the enterprise for deciding on how to
allocate resources and in assessing performance. SFAS No. 131 is effective
for the Company in 1998, and segment information that is reported with
corresponding information for the initial year must be restated, unless it
is impractical to do so.
In 1998, the FASB issued Statement of Financial Accounting Standards No.
132, "Employers' Disclosures about Pensions and Other Post Retirement
Benefits" ("SFAS No. 132"), an amendment of FASB Statements Nos. 87, 88
and 106. SFAS No. 132 is effective for the Company in 1998.
The adoption of these statements is not expected to have a material effect
on the consolidated financial statements.
Reclassifications
Certain reclassifications have been made to the prior year amounts to
conform to the fiscal 1997 presentation.
F-10
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
2. Property, Plant and Equipment
Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
Depreciable
life January 2, January 3,
in years 1998 1997
<S> <C> <C> <C>
Land $ 2,723 $ 2,703
Land under capital leases 650 650
Buildings 35 to 39 4,053 4,053
Buildings under capital leases 35 to 39 1,950 1,950
Improvements 10 to 30 30,811 26,599
Machinery and equipment 6 to 20 12,253 12,462
Equipment under capital leases 10 to 30 7,341 6,382
Furniture and fixtures 5 to 7 2,814 2,692
Transportation equipment 5 189 720
------- -------
62,784 58,211
Less: accumulated depreciation and amortization 20,526 16,935
------- -------
$42,258 $41,276
======= =======
</TABLE>
F-11
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
3. Debt
Installment Notes
January 2, January 3,
1998 1997
Long-term debt consists of the following
(in thousands):
Installment notes payable in monthly
installments of $133 including
interest at rates ranging from 7.55%
to 10.0%, expiring at various dates
through 2001 and collateralized by
certain accounts receivable,
inventory and equipment $3,407 $4,731
Installment notes payable in monthly
installments of $44 including
interest at rates ranging from 8.25%
to 9.38%, expiring at various date
through 2006 and collateralized by
land and buildings 3,711 3,924
Installment note payable in annual
principal payments of $16, plus
interest at 8%; payments commence
in 2001 through 2010 160 160
------ ------
7,278 8,815
Less: Current maturities 1,571 1,505
------ ------
$5,707 $7,310
====== ======
As of January 2, 1998, debt matures as follows (in thousands):
1998 $1,571
1999 1,523
2000 943
2001 358
2002 195
Thereafter 2,688
------
$7,278
======
At January 2, 1998, land, property and equipment with a net book value of
$9,061,000 was pledged as collateral for the debt.
For fiscal years 1997, 1996 and 1995, interest expense (net of interest
income of $106,000, $164,000 and $142,000, respectively) was $965,000,
$907,000 and $633,000, respectively.
F-12
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
Bank Facility
During 1997, the Company renewed its agreement for a credit facility that
permits borrowings of up to $3,000,000, expiring July 1, 1998. The
facility is available for working capital purposes and is secured by all
monies possessed by the bank that are at any time credited by or due from
the bank to the Company. Borrowings under the facility bear interest at
the bank's prime rate. The facility provides for an additional fee payable
(at the bank's prime rate plus 4%) if and to the extent that the aggregate
average monthly balance in non-interest bearing deposit accounts is less
than $1,000,000. During 1997, the Company had no borrowings under this
facility.
Capital Lease Obligations
The Company utilizes certain land, buildings and equipment in its
operations pursuant to lease agreements which are accounted for as capital
leases. Future minimum lease payments under capital lease obligations,
together with the present value of the net minimum lease payments at
January 2, 1998, were as follows (in thousands):
Fiscal Year
1998 $1,396
1999 932
2000 932
2001 932
2002 553
Thereafter 418
------
5,163
Less: Amounts representing interest 943
------
Present value of net minimum lease payments 4,220
Less: Current portion 1,090
------
$3,130
======
F-13
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
4. Income Taxes
The provision for income taxes consists of the following (dollars in
thousands):
1997 1996 1995
Federal:
Current $ 704 $ 2,744 $ 1,474
Deferred 467 (183) 515
------- ------- -------
1,171 2,561 1,989
------- ------- -------
State and local:
Current 837 2,137 1,727
Deferred 124 (133) 401
------- ------- -------
961 2,004 2,128
------- ------- -------
$ 2,132 $ 4,565 $ 4,117
======= ======= =======
The deferred income tax provision (benefit) results primarily from the
annual change in temporary differences between the basis of assets and
liabilities for financial reporting purposes and such amounts as measured
by income tax laws.
A reconciliation of income taxes at the 34% federal statutory income tax
rate for 1997, 1996 and 1995 to income taxes as reported is as follows:
1997 1996 1995
Statutory federal income tax rate 34.0% 34.0% 34.0%
State and local income taxes, net of federal
income tax benefit 12.2 12.1 13.1
Low income housing tax credits (4.3) (2.1) (1.6)
Work opportunity tax credit (1.3) -- --
Other (.6) (.7) --
---- ---- ----
Effective income tax rate 40.0% 43.3% 45.5%
==== ==== ====
The Company has qualified low income housing tax credits of $1,464,000
which are available to reduce future regular federal income taxes.
F-14
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
Thecomponents of net deferred tax assets (liabilities) are as follows
(dollars in thousands):
January 2, January 3,
1998 1997
Deferred tax assets:
Capitalized costs for income tax purposes $ 877 $ 1,078
Accounts receivable allowance 280 175
Lease obligations 78 --
------- -------
Deferred income taxes included
in current assets $ 1,235 $ 1,253
======= =======
Non-current assets:
Investment in low-income housing credit $ 37 $ 42
Non-current liabilities:
Depreciation and amortization (2,096) (1,526)
------- -------
Deferred income taxes payable $(2,059) $(1,484)
======= =======
F-15
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
5. Reconciliation of Basic and Diluted Net Income per Share (in thousands,
except per share amounts)
Weighted
Average
Net Shares Per Share
Income Outstanding Amount
1997
Basic net income per share $3,203 5,465 $ .59
Effect of dilutive securities:
Stock options -- 38 (.01)
------ ------ --------
Diluted net income per share $3,203 5,503 $ .58
====== ====== ========
1996
Basic net income per share $5,989 5,463 $ 1.10
Effect of dilutive securities:
Stock options -- 34 (.01)
------ ------ --------
Diluted net income per share $5,989 5,497 $ 1.09
====== ====== ========
1995
Basic net income per share $4,934 5,463 $ .90
Effect of dilutive securities:
Stock options -- 14 --
------ ------ --------
Diluted net income per share $4,934 5,477 $ .90
====== ====== ========
A total of 27,700 options were not included in the 1997 effect of diluted
securities due to the anti-dilutive nature of the options.
6. Stock Options
At January 2, 1998, the Company has two stock option plans which are
described below. The Company applies APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for
the plans. Under APB Opinion No. 25, when the exercise price of the stock
option equals the market price of the underlying stock on the date of
grant, no compensation cost is recognized. In 1997 and 1996, no options
were granted with exercise prices below market. Certain options were
granted in 1995 at below-market exercise prices. Related compensation
expense, totaling $168,000, was deferred and is being amortized over five
years.
Pursuant to the 1995 Stock Option Plan (the "Plan"), options to purchase
an aggregate of not more than 1,300,000 shares of
F-16
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
common stock may be granted from time to time to key employees, officers,
directors, advisors and independent consultants to the Company or to any
of its subsidiaries. The total number of shares of common stock for which
options may be granted under the Plan shall not exceed 2% cumulatively of
the number of shares issued as of January 1 of each year. The Plan is
administered by a committee of the Board of Directors. The per share
exercise price for incentive stock options ("ISO's") will not be less than
100% of the fair market value of a share of common stock on the date the
option is granted (ISO's may not be granted if the optionee owns more than
10% of the Company's common stock and nonqualified stock options will not
be less than 25% of the fair market value on the date the option is
granted. Options may be granted for a term, to be determined by the
committee, of not more than ten years from the date of grant.
Pursuant to the 1995 Nonemployee Director Stock Option Plan (the
"Directors' Plan"), options to purchase an aggregate of not more than
200,000 shares of common stock may be granted from time to time to
directors who are neither employees nor officers of the Company. The
Directors' Plan is administered by a committee of the Board of Directors.
Each option granted prior to December 31, 1996 shall vest one year from
the date granted and will expire at a term, determined by the committee,
not to exceed ten years. Options granted after January 1, 1997 will vest
over a five year period, at equal percentages, and will expire at a term,
determined by the committee, not to exceed ten years.
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"), requires the Company, if
material, to provide pro forma information regarding net income and net
income per share as if compensation cost for the Company's stock option
plans had been determined in accordance with the fair value based method
prescribed in SFAS No. 123. The compensation costs associated with the
Company's stock option plan determined in accordance with SFAS No. 123
would have been $77,000, $70,000 and $0 for 1997, 1996 and 1995,
respectively.
The following table contains information regarding the 1995 Stock Option
Plan and the 1995 Nonemployee Director Stock Option Plan:
F-17
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
Exercise Weighted
Option price range average
shares per share price
Balance, December 31, 1994 -- -- --
Granted during 1995 81,949 $1.50 to $6.00 $ 3.93
-------
Balance, December 29, 1995 81,949 $1.50 to $6.00 3.93
Granted during 1996 15,000 $9.31 9.31
Canceled during 1996 (7,000) $5.88 to $6.00 5.91
-------
Balance, January 3, 1997 89,949 $1.50 to $9.31 4.67
Granted during 1997 32,300 $11.50 11.50
Exercised during 1997 (2,833) $1.50 to $6.00 3.88
Canceled during 1997 (16,600) $6.00 to $11.50 8.52
-------
Balance, January 2, 1998 102,816 $1.50 to $11.50 $ 6.22
=======
As of January 2, 1998, approximately 43,000 of the options granted were
exercisable and approximately 355,000 options were available for future
grants.
F-18
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
7. Commitments and Contingencies
Operating Leases
The Company has commitments for various noncancellable operating leases
which expire at various dates through January 2017. Certain of the leases
are with related parties (see Note 9). Many of the leases have renewal
options and most contain provisions for passing through incremental costs.
Future minimum rental payments required under noncancellable operating
leases at January 2, 1998 are as follows (in thousands):
Fiscal Year
1998 $ 5,143
1999 4,952
2000 4,426
2001 4,327
2002 3,322
Thereafter 15,739
-------
Total future minimum rentals $37,909
=======
For fiscal years 1997, 1996 and 1995, rent expense was $5,225,000,
$4,838,000 and $4,195,000, respectively.
The Company has entered into sublease agreements for certain space located
within its various retail facilities. For fiscal years 1997, 1996 and 1995
rental income from subleases was $997,000, $906,000 and $681,000,
respectively. The Company retains the right to sublease the additional
unoccupied space. The subleases currently in effect provide for future
rental income as follows (in thousands):
Fiscal Year
1998 $1,015
1999 967
2000 957
2001 786
2002 689
Thereafter 867
------
$5,281
======
Litigation
The Company is engaged in various outstanding litigation
F-19
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
matters which arose in the ordinary course of business. In the opinion of
management, the outcome of such matters will not have a material adverse
effect on the Company's financial position or operating results.
F-20
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
Standby Letter of Credit
The Company has outstanding letters of credit totaling $3,558,000 to
collateralize incurred but unpaid insurance claims.
8. Profit Sharing Plans
The Company has a profit sharing plan which covers all eligible employees.
The plan allows for salary deferral arrangements under the provisions of
Section 401(k) of the Internal Revenue Code. The Company does not
contribute to this plan.
Additionally, the Company has a noncontributory profit sharing plan for
its employees. Funding requirements for the plan are nonobligatory. For
fiscal years 1997, 1996 and 1995, the noncontributory profit sharing plan
expense was $750,000, $625,000 and $602,000, respectively.
9. Related Party Transactions
The Company leases land, various retail food stores and warehouse storage
and office space from affiliates of the principal stockholders under
various leases which expire through January 2017. For fiscal years 1997,
1996 and 1995 rent expense relating to these leases was $2,829,000,
$2,737,000 and $2,772,000, respectively (see Note 7). The Company made
capital expenditures of approximately $2,022,000, $725,000 and $374,000
during 1997, 1996 and 1995, respectively, at leaseholds owned by
affiliates of the principal stockholders.
For fiscal years 1997, 1996 and 1995, the Company purchased various food
products in the amounts of $37,111,000, $27,423,000 and $21,954,000
respectively, from a company in which an officer is also a director of the
Company. As of January 2, 1998 and January 3, 1997, the Company had
accounts payable of $1,997,000 and $797,000, respectively, due to such
company.
For fiscal years 1997, 1996 and 1995, the Company had sales to related
parties of $894,000, $335,000 and $528,000, respectively.
The Company does its banking at a bank which has an officer who was a
member of the Company's Board of Directors until April 1, 1996. The credit
facility described in Note 3 is
F-21
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
with the same bank.
F-22
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
10. Segments of Business
The Company operates in two industry segments. The wholesale segment
primarily sells poultry, beef, pork and provisions to retailers,
restaurants and institutions. The retail segment sells various meat and
grocery items to the general public. A summary of certain aspects of such
segments is as follows (in thousands):
1997 1996 1995
Net sales:
Retail $232,400 $239,711 $208,426
Wholesale 84,679 101,162 92,961
-------- -------- --------
$317,079 $340,873 $301,387
======== ======== ========
Intersegment sales:
Wholesale $ 53,931 $ 60,775 $ 28,790
======== ======== ========
Income from operations:
Retail $ 4,727 $ 8,793 $ 7,781
Wholesale 5 924 1,108
-------- -------- --------
$ 4,732 $ 9,717 $ 8,889
======== ======== ========
Identifiable assets:
Retail $ 63,738 $ 60,475 $ 49,124
Wholesale 12,516 14,024 14,189
-------- -------- --------
$ 76,254 $ 74,499 $ 63,313
======== ======== ========
Depreciation and amortization:
Retail $ 4,034 $ 3,214 $ 2,541
Wholesale 138 181 206
-------- -------- --------
$ 4,172 $ 3,395 $ 2,747
======== ======== ========
Capital expenditures:
Retail $ 7,085 $ 12,933 $ 9,027
Wholesale 237 188 424
-------- -------- --------
$ 7,322 $ 13,121 $ 9,451
======== ======== ========
F-23
<PAGE>
Western Beef, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
- - --------------------------------------------------------------------------------
11. Quarterly Information (Unaudited)
The summarized quarterly financial data presented below (in thousands
except per share amounts) reflects all adjustments which, in the opinion
of management, are of a normal and recurring nature necessary to present
fairly the results of operations for the periods presented.
<TABLE>
<CAPTION>
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
<S> <C> <C> <C> <C>
Fiscal year ended January 2, 1998
Sales $72,795 $81,881 $86,372 $76,031
Gross profit 18,142 19,939 21,605 19,585
Net income 813 779 867 744
Net income per share
of common stock - basic .15 .14 .16 .14
==============================================
Sales $79,349 $84,180 $85,167 $92,177
Gross profit on sales 19,589 20,014 20,680 22,188
Net income 1,262 1,520 1,522 1,685
Net income per share
of common stock - basic .23 .28 .28 .31
==============================================
Fiscal year ended December 29, 1995
Sales $67,574 $73,058 $78,407 $82,348
Gross profit 15,526 17,705 19,209 20,024
Net income 797 1,154 1,360 1,623
Net income per share
of common stock - basic .15 .21 .25 .29
==============================================
</TABLE>
F-24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and
Stockholders of Western Beef, Inc.
Our audit of the consolidated financial statements referred to in our report
dated March 5, 1998 appearing on page F-1 of this 1997 Annual Report on Form
10-K also included an audit of the financial statement schedule listed on page
F-26 of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statement.
PRICE WATERHOUSE LLP
New York, New York
March 5, 1998
F-25
<PAGE>
Western Beef, Inc. and Subsidiaries
Schedule II - Valuation and Qualifying Accounts
(In Thousands)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additions
-------------------------
Balance at Charged to Balance at
beginning of cost and Charge to end of
year expenses other accounts Deductions year
<S> <C> <C> <C> <C> <C>
Year ended January 2, 1998:
Allowance for doubtful accounts $386 $955 $ -- $(789) $552
Year ended January 3, 1997:
Allowance for doubtful accounts $326 $611 $ -- $(551) $386
</TABLE>
F-26
EX. 10.4
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement") is made as of the 29th day of
December, 1997, between GENERAL ELECTRIC CAPITAL CORPORATION, with an office at
4 North Park Drive, Suite 500, Hunt Valley, Maryland 21030 (hereinafter called,
together with its successors and assigns, if any, "Lessor"), and WESTERN BEEF,
INC., a Delaware corporation with its mailing address and chief place of
business at 47-05 Metropolitan Avenue, Ridgewood, NY 11385 (hereinafter called
"Lessee").
WITNESSETH:
1. LEASING:
(a) This Agreement shall be effective from and after the date of execution
hereof. Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("Equipment") described in Annex A to any schedule hereto ("Schedule"). Terms
defined or specified in a Schedule and not otherwise defined herein shall have
the meanings ascribed to them in such Schedule.
(b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or prior to
the earlier of the Lease Commencement Date or Last Delivery Date therefor, of
each of the following documents in form and substance satisfactory to Lessor:
(i) a Schedule relating to the Equipment then to be leased hereunder, (ii) a
Bill of Sale, in the form of Annex B to the applicable Schedule, in favor of
Lessor, (iii) evidence of insurance which complies with the requirements of
Section 6, and (iv) such other documents as Lessor may reasonably request.
Simultaneously with the execution of the Bill of Sale, Lessee shall also
execute a Certificate of Acceptance, in the form of Annex C to the applicable
Schedule, covering all of the Equipment described in the Bill of Sale.
Upon execution by Lessee of any Certificate of Acceptance, the Equipment
described thereon shall be deemed to have been delivered to, and irrevocably
accepted by, Lessee for lease hereunder.
(c) LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY
ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT
MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED
HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY MATERIALS OR WORKMANSHIP,
MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY, PATENT,
TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All such risks, as between Lessor
and Lessee, are to be borne by Lessee. Without limiting the foregoing, Lessor
shall have no responsibility or liability to Lessee or any other person with
respect to any of the following (i) any liability, loss or damage caused or
alleged to be caused directly or indirectly by any Equipment, any inadequacy
thereof, any deficiency or defect (latent or otherwise) therein, or any other
circumstance in connection therewith; (ii) the use, operation or performance of
any Equipment or any risks relating thereto; (iii) any interruption of service,
loss of business or anticipated profits or consequential damages; or (iv) the
delivery, operation, servicing, maintenance, repair, improvement or replacement
of any Equipment. If, and so long as, no Default (as hereinafter defined) exists
under this Agreement, Lessee shall be, and hereby is, authorized during the Term
(as hereinafter defined) to assert and enforce, at Lessee's sole cost and
expense, from time to time, in the name of and for the account of Lessor and/or
Lessee, as their interests may appear, whatever claims and rights Lessor may
have against any Supplier of the Equipment.
2. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder (the "Rent") and Lessee's right to use the
Equipment shall commence on the date of execution by Lessee of the Certificate
of Acceptance for such Equipment (the
<PAGE>
"Lease Commencement Date"). The term of this Agreement (the "Term") shall be the
period specified in the applicable Schedule. If any Term is extended or renewed,
the word "Term" shall be deemed to refer to all extended or renewed terms, and
all provisions of this Agreement shall apply during any extended or renewed
terms, except as otherwise may be specifically provided in writing.
(b) Rent shall be paid to Lessor electronic funds transfer in the manner
prescribed by Lessor, or by such other method as Lessor may direct in writing;
and shall be effective upon receipt. Payments of Rent shall be in the amount set
forth in, and due in accordance with, the provisions of the applicable Schedule.
In no event shall any Rent payments be refunded to Lessee. If Rent is not paid
within ten (10) days of its due date, Lessee agrees to pay a late charge of
Three Cents ($0.03) per dollar on, and in addition to, the amount of such Rent
but not exceeding the lawful maximum, if any.
(c) This Agreement is a net lease. Lessee's obligation to pay Rent and
other amounts due hereunder shall be absolute and unconditional. Lessee shall
not be entitled to any abatement or reductions of, or set-offs against, said
Rent or other amounts, including, without limitation, those arising or allegedly
arising out of claims (present or future, alleged or actual, and including
claims arising out of strict liability in tort or negligence of Lessor) of
Lessee against Lessor under this Agreement or otherwise. This Agreement shall
not terminate and the obligations of Lessee shall not be affected by reason of
any defect in or damage to, or loss of possession, use or destruction of, any
Equipment from whatsoever cause. It is the intention of the parties that Rents
and other amounts due hereunder shall continue to be payable in all events in
the manner and at the times set forth herein unless the obligation to do so
shall have been terminated pursuant to the express terms hereof.
3. TAXES:
Lessee shall have no liability for taxes imposed by the United States of America
or any State or political subdivision thereof which are on or measured by the
net income of Lessor. Lessee shall report (to the extent that it is legally
permissible) and pay promptly all other taxes, fees and assessments due,
imposed, assessed or levied against any Equipment (or the purchase, ownership,
delivery, leasing, possession, use, or operation thereof), this Agreement (or
any rentals or receipts hereunder), any Schedule, Lessor or Lessee by any
foreign, Federal, state or local government or taxing authority during or
related to the term of this Agreement, including, without limitation, all
license and registration fees, and all sales, use, personal property, excise,
gross receipts and franchise taxes (but excluding those imposed in lieu of
income taxes), stamp or other taxes, imposts, duties and charges, together with
any penalties, fines or interest thereon (all hereinafter called "Taxes").
Lessee shall (i) reimburse Lessor on an after-tax basis upon receipt of written
request for reimbursement for any Taxes charged to or assessed against Lessor,
(ii) on request of Lessor, submit to Lessor written evidence of Lessee's payment
of Taxes, (iii) on all reports or returns show the ownership of the Equipment
by Lessee, and (iv) send a copy thereof to Lessor. Lessee's obligations under
this Section 3 shall survive the expiration of termination of this Agreement.
4. DELIVERY, USE AND OPERATION:
(a) The parties acknowledge that this is a sale/leaseback transaction and
the Equipment is in Lessee's possession as of the Lease Commencement Date.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable Federal,
state, and local laws and regulations, and any applicable insurance policies,
and Lessee shall not discontinue use of the Equipment.
(c) Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor.
5. MAINTENANCE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and
2
<PAGE>
tear excepted. Lessee shall, if at any time reasonably requested by Lessor,
affix in a prominent position on each unit of Equipment plates, tags or other
identifying labels showing the interest therein of Lessor.
(b) Lessee will not, without the prior consent of Lessor, affix or install
any accessory, equipment or device on any Equipment if such addition will impair
the value, originally intended function or use of such Equipment. All additions,
repairs, parts, supplies, accessories, equipment, and devices furnished,
attached or affixed to any Equipment which are not readily removable shall be
made only in compliance with applicable law, shall be free and clear of all
liens, encumbrances or rights of others, and shall become the property of
Lessor. Lessee will not, without the prior written consent of Lessor and subject
to such conditions as Lessor may impose for its protection, affix or install any
Equipment to (unless readily removable) or in any other personal or real
property.
(c) Any alterations or modifications to the Equipment that may, at any
time during the term of this Agreement, be required to comply with any
applicable law, rule or regulation shall be made at the expense of Lessee.
6. INSURANCE:
Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts as specified in Paragraph D of the Equipment Schedule and against such
hazards as Lessor may require, including, but not limited to, insurance for
damage to or loss of such Equipment and liability coverage for personal
injuries, death or property damage, with Lessor named as additional insured and
with a loss payable clause in favor of Lessor, as its interest may appear,
irrespective of any breach of warranty or other act or omission of Lessee. All
such policies shall be with companies, and on terms, satisfactory to Lessor.
Lessee agrees to deliver to Lessor evidence of insurance satisfactory to Lessor.
No insurance shall be subject to any co-insurance clause. Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to make proof of loss and claim for
insurance, and to make adjustments with insurers and to receive payment of and
execute or endorse all documents, checks or drafts in connection with payments
made as a result of such insurance policies. Any reasonable expense of Lessor in
adjusting or collecting insurance shall be borne by Lessee. Lessee will not make
adjustments with insurers except (i) with respect to claims for damage to any
unit of Equipment where the repair costs do not exceed ten (10%) of such unit's
fair market value, or (ii) with Lessors written consent. Said policies shall
provide that the insurance may not be altered or cancelled by the insurer until
after thirty (30) days written notice to Lessor. Lessor may, at its option,
apply proceeds of insurance, in whole or in part, to (i) repair or replace
Equipment or any portion thereof, or (ii) satisfy any obligation of Lessee to
Lessor hereunder.
7. LOSS OR DAMAGE:
(a) Lessee hereby assumes and shall bear the entire risk of any loss,
theft, damage to, or destruction of, any unit of Equipment from any cause
whatsoever from the time the Equipment is shipped to Lessee.
(b) Lessee shall promptly and fully notify Lessor in writing if any unit
of Equipment shall be or become worn out, lost, stolen, destroyed, irreparably
damaged in the reasonable determination of Lessee, or permanently rendered unfit
for use from any cause whatsoever (such occurrences being hereinafter called
"Casualty Occurrences"). On the Rental Payment Date next succeeding a Casualty
Occurrence (the "Payment Date"), Lessee shall pay Lessor the sum of (x) the
Stipulated Loss Value of such unit calculated in accordance with Annex D as of
the Rent Payment Date next preceding such Casualty Occurrence ("Calculation
Date"); and (y) all rental and other amounts which are due hereunder as of the
Payment Date. Upon payment of all sums due hereunder, the term of this lease as
to such unit shall terminate and transfer title, to such units, to Lessee.
8. REPORTS:
(a) Lessee will notify Lessor in writing, within ten (10) days after any
tax or other lien shall attach to any Equipment, of the full particulars thereof
and of the location of such Equipment on the date of such notification.
3
<PAGE>
(b) Lessee will deliver to Lessor, within ninety (90) days of the close of
each fiscal year of Lessee, Lessee's balance sheet and profit and loss
statement, prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied, certified by a recognized firm of certified
public accountants, together, if applicable, with Lessee's Form 10K filed with
the Securities and Exchange Commission ("SEC"). Lessee will, if applicable,
deliver to Lessor quarterly, within ninety (90) days of the close of each fiscal
quarter of Lessee, in reasonable detail, copies of Lessee's quarterly financial
report certified by the chief financial officer of Lessee, together with
Lessee's Form 10Q filed with the SEC.
(c) Lessee will permit Lessor to inspect any Equipment during normal
business hours upon reasonable notice.
(d) Lessee will keep the Equipment at the Equipment Location (specified in
the applicable Schedule) within the Continental United States and will promptly
notify Lessor of any relocation of Equipment. Upon the written request of
Lessor, Lessee will notify Lessor forthwith in writing of the location of any
Equipment as of the date of such notification.
(e) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost or damaged (where the estimated repair costs would exceed ten
percent (10%) of its then fair market value), or is otherwise involved in an
accident causing personal injury or property damage.
(f) Within thirty (30) days after any request by Lessor, Lessee will
furnish a certificate of an authorized officer of Lessee stating that he has
reviewed the activities of Lessee and that, to the best of his knowledge, there
exists no Default or event which, with the giving of notice or the lapse of time
(or both), would become such a Default.
9. END OF LEASE OPTIONS:
Upon the expiration of the Term of each Schedule, Lessee shall return, or
purchase, or extend or renew the Term with respect to, all (but not less than
all) of the Equipment leased under all Schedules executed hereunder upon the
following terms and conditions. The end of lease option selected by Lessee with
respect to the first Schedule to be executed under this Agreement shall be
applicable with respect to all Schedules executed under this Agreement.
(a) Renewal. So long as Lessee shall not have exercised its option to
return the Equipment or its purchase option pursuant to this Section, Lessee
shall have the option, upon the expiration of the Basic Term of the first
Schedule to be executed under this Agreement, and/or the first two (2) Renewal
Terms of the first Schedule to be executed under this Agreement, to renew the
Agreement with respect to all, but not less than all, of the Equipment leased
under all Schedules executed hereunder for an additional term of twelve (12)
months (each, a "Renewal Term"). Including all Renewal Terms, the maximum term
of each Schedule shall be six (6) years (the Basic Term plus three (3) Renewal
Terms) (the "Maximum Lease Term").
(b) Purchase. So long as Lessee shall not have exercised its extension
option or its option to renew this Agreement or its option to return the
Equipment pursuant to this Section, Lessee shall have the option, upon the
expiration of the Term of each Schedule, to purchase all (but not less than all)
of the Equipment described on all Schedules executed hereunder upon the
following terms and conditions: If Lessee desires to exercise this option with
respect to the Equipment, Lessee shall pay to Lessor on the last day of the Term
with respect to each individual Schedule (the "Termination Date"), in addition
to the scheduled Rent (if any) then due on such date and all other sums then due
hereunder, in cash the purchase price for the Equipment so purchased, determined
as hereinafter provided. The purchase price of the Equipment shall be an amount
equal to the Fixed Purchase Price of such Equipment (as specified on the
Schedule), plus the Make Whole Amount, if any, plus all taxes and charges upon
sale and all other reasonable and documented expenses incurred by Lessor in
connection with such sale, including, without limitation, any such expenses
incurred based on a notice from Lessee to Lessor that Lessee intended to return
any such items of Equipment. Upon satisfaction of the conditions specified in
this Paragraph, Lessor will transfer, on an AS IS, WHERE IS BASIS, without
recourse or warranty, express or
4
<PAGE>
implied, of any kind whatsoever ("AS IS BASIS"), all of Lessors interest in and
to the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of such Equipment
and other matters (except that Lessor shall warrant that it has conveyed
whatever interest it received in the Equipment free and clear of any lien or
encumbrance created by Lessor). Lessor shall execute and deliver to Lessee such
Uniform Commercial Code Statements of Termination as reasonably may be required
in order to terminate any interest of Lessor in and to the Equipment. For
purposes of this Section 9, "Make Whole Amount" shall mean that amount equal to
the excess, if any, of (i) the aggregate present value as of the Termination
Date of the sum of (A) the remaining scheduled Rent payments during the Maximum
Lease Term, plus (B) the full amount of the Fixed Purchase Price that but for
exercise of the option contained in this Section 9 would have been payable on
the last Rent Payment Date during the Maximum Lease Term, discounted to the date
of payment at the Reinvestment Rate, over (ii) the aggregate present value as of
the Termination Date of the sum of (A) the remaining scheduled Rent payments
during the Maximum Lease Term, plus (B) the full amount of the Fixed Purchase
Price that but for exercise of the option contained in this Section 9 would have
been payable on the last Rent Payment Date during the Maximum Lease Term,
discounted to the date of payment at the Assumed Interest Rate (specified in the
applicable Schedule); provided, however, that if the Reinvestment Rate is equal
to or higher than the Assumed Interest Rate, the Make Whole Amount shall be
zero. As used herein, "Reinvestment Rate" shall mean the sum of (i) the
Applicable Treasury Yield plus (ii) fifty (50) basis points. As used herein,
"Applicable Treasury Yield" at any time shall mean the yield to maturity of
United States Treasury Notes with a maturity equal to the average life of the
remaining Maximum Lease Term as published in The Wall Street Journal three (3)
Business Days prior to the Termination Date. If no maturity exactly corresponds
to such remaining Maximum Lease Term, the Applicable Treasury Yield shall be
interpolated on a straight-line basis, utilizing the yields for the two
maturities which most closely correspond to the requisite maturity.
(c) Return. Unless Lessee shall have exercised its extension option or its
purchase option pursuant to this Section, upon the expiration of the Term of
each Schedule, Lessee shall return all (but not less than all) of the Equipment
described on all Schedules executed hereunder, to Lessor upon the following
terms and conditions: Lessee shall (i) pay to Lessor on the last day of the Term
with respect to each individual Schedule, in addition to the scheduled Rent then
due on such date and all other sums then due hereunder, a terminal rental
adjustment amount equal to the Fixed Purchase Price of such Equipment, plus the
Make Whole Amount, if any, and (ii) return the Equipment to Lessor in accordance
with the provisions of Annex F attached hereto. Thereafter, upon return of all
of the Equipment described on all Schedules executed hereunder, Lessor and
Lessee shall arrange for the commercially reasonable sale, scrap or other
disposition of the Equipment. Upon satisfaction of the conditions specified in
this Paragraph, Lessor will transfer, on an AS IS BASIS, all of Lessors interest
in and to the Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as the condition of such
Equipment and other matters (except that Lessor shall warrant that it has
conveyed whatever interest it received in the Equipment free and clear of any
liens or encumbrances created by Lessor). Lessor shall execute and deliver to
Lessee such Uniform Commercial Code Statements of Termination as reasonably may
be required in order to terminate any interest of Lessor in and to the
Equipment. Upon the sale, scrap or other disposition of the Equipment the net
sales proceeds with respect to the Equipment sold will be paid to, and held and
applied by, Lessor as follows: Lessor shall promptly thereafter pay to Lessee an
amount equal to the Residual Risk Amount (as specified in the Schedule) of the
Equipment (less all reasonable costs, expenses and fees, including storage,
reasonable and necessary maintenance and other remarketing fees incurred in
connection with the sale, scrap, or disposition of such Equipment) plus all net
proceeds, if any, of such sale in excess of the Residual Risk Amount of the
Equipment and applicable taxes, if any. Lessor shall be obligated to pay to
Lessee the residual risk amount regardless of the amount of net sales proceeds.
(d) Extension. So long as Lessee shall not have exercised its option to
return the Equipment or its purchase option pursuant to this Section, and
provided that Lessee shall have exercised its option to renew this Agreement
pursuant to this Section with respect to all available Renewal Terms, Lessee
shall have the option, upon the expiration of all available Renewal Terms, to
extend the Agreement with respect to all, but not less than all, of the
Equipment for an additional term of twelve (12) months (the "Extension Term") at
a monthly rental to be paid in arrears on the same day of each month on which
the prior Renewal Term Rent installment was paid, and calculated as the product
of (i) the Capitalized Lessor's
5
<PAGE>
Cost, times (ii) a lease rate factor calculated by Lessor, which when so
multiplied times the Capitalized Lessor's Cost, will result in a product that is
equal to the amount necessary to fully repay to Lessor any unpaid balance of the
Capitalized Lessors Cost (determined as of the date on which the last available
Renewal Term expired), together with interest thereon at a rate per annum equal
to three hundred (300) basis points over the then current yield to maturity of
U.S. Treasury Notes having a one year maturity, in twelve (12) equal monthly
installments. At the end of the Extension Term, provided that Lessee is not then
in Default under this Agreement, Lessee shall purchase all, and not less than
all, of such Equipment for $1.00 cash, together with all Rent and other sums
then due on such date, plus all taxes and charges upon transfer and all other
reasonable and documented expenses incurred by Lessor in connection with such
transfer. Upon satisfaction of the conditions specified in this Paragraph,
Lessor will transfer, on an AS IS BASIS, all of Lessors interest in and to the
Equipment. Lessor shall not be required to make and may specifically disclaim
any representation or warranty as to the condition of the Equipment and any
other matters (except that Lessor shall warrant that it has conveyed whatever
interest it received in the Equipment free and clear of any lien or encumbrance
created by Lessor).
(e) Notice of Election. Lessee shall give Lessor written notice of its
election of the options specified in this Section not less than one hundred
twenty (120) days nor more than three hundred sixty-five (365) days before the
expiration of the Basic Term or any Renewal Term of the first Schedule to be
executed under this Agreement. Such election shall be effective with respect to
all Equipment described on all Schedules executed hereunder. If Lessee fails
timely to provide such notice, without further action Lessee automatically shall
be deemed to have elected (1) to renew the Term of this Agreement pursuant to
Paragraph (a) of this Section if a Renewal Term is then available hereunder, or
(2) to purchase the Equipment pursuant to Paragraph (a) of this Section if a
Renewal Term is not then available hereunder.
10. DEFAULT; REMEDIES:
(a) Lessor may in writing declare this Agreement in default ("Default")
if: (1) Lessee breaches its obligation to pay Rent or any other sum when due and
fails to cure the breach within ten (10) days; (2) Lessee breaches any of its
insurance obligations under Section 6 hereof; (3) Lessee breaches any of its
other obligations hereunder and fails to cure that breach within thirty (30)
days after written notice thereof; (4) any representation or warranty made by
Lessee in connection with this Agreement shall be false or misleading in any
material respect; (5) Lessee becomes insolvent or ceases to do business as a
going concern; (6) a petition is filed by or against Lessee under any bankruptcy
or insolvency laws and, if filed against Lessee, shall not be dismissed within
ninety (90) days; (7) Lessee shall have terminated its corporate existence,
consolidated with, merged into, or conveyed or leased substantially all of its
assets as an entirety to any person (such actions being referred to as an
"Event"), unless not less than sixty (60) days prior to such Event: (x) such
person is organized and existing under the laws of the United States or any
state, and executes and delivers to Lessor an agreement containing an effective
assumption by such person of the due and punctual performance of this Agreement;
and (y) Lessor is reasonably satisfied as to the creditworthiness of such
person; (8) there occurs a default under any guaranty executed in connection
with this Agreement; or (9) Lessee shall be in default under any other agreement
between Lessor and Lessee; or (10) Lessee shall be in default under any other
material obligation for borrowed money, for the deferred purchase price of
property or any lease agreement. Such declaration shall apply to all Schedules
except as specifically excepted by Lessor.
(b) After Default, Lessee shall, without further demand, forthwith pay to
Lessor (i) as liquidated damages for loss of a bargain and not as a penalty, the
Stipulated Loss Value of the Equipment (calculated in accordance with Annex D as
of the Rent Payment Date next preceding the declaration of default), and (ii)
all Rents and other sums then due hereunder. If Lessee fails to pay the amounts
specified in the preceding sentence, then, at the request of Lessor, Lessee
shall comply with the provisions of Section 10(a) hereof. Lessee hereby
authorizes Lessor to enter, with or without legal process, any premises where
any Equipment is located and take possession thereof. Lessor may, but shall not
be required to, sell Equipment at private or public sale, in bulk or in parcels,
with or without notice, and without having the Equipment present at the place of
sale; or Lessor may, but shall not be required to, lease, otherwise dispose of
or keep idle all or part of the Equipment; and Lessor may use Lessee's premises
for any or all of the foregoing without liability for rent, costs, damages or
otherwise. The proceeds of sale, lease or other disposition, if any, shall be
applied in the following order of priorities:
6
<PAGE>
(1) to pay all of Lessors costs, charges and expenses incurred in taking,
removing, holding, repairing and selling, leasing or otherwise disposing of
Equipment; then, (2) to the extent not previously paid by Lessee, to pay Lessor
all sums due from Lessee hereunder; then (3) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (4) any surplus shall be
paid to Lessee. Lessee shall pay any deficiency in clauses (1) and (2)
forthwith.
(c) In addition to the foregoing rights, Lessor may terminate the lease as
to any or all of the Equipment.
(d) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. If
permitted by law, Lessee shall pay reasonable attorney's fees actually incurred
by Lessor in enforcing the provisions of this Lease and any ancillary documents.
Waiver of any default shall not be a waiver of any other or subsequent default.
(e) Any default under the terms of this or any other agreement between
Lessor and Lessee may be declared by Lessor a default under this and any such
other agreement.
11. ASSIGNMENT:
(a) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT
OR THE INTEREST OF LESSEE HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
EXCEPT IN A TRANSACTION SATISFYING THE REQUIREMENTS OF SECTION 10(a)(7).
(b) Lessor may, without the consent of Lessee, assign this Agreement or
any Schedule, or the right to enter into any Schedule. Lessee agrees that it
will pay all Rent and other amounts payable under each Schedule to the Lessor
named therein; provided, however, if Lessee receives written notice of an
assignment from Lessor, Lessee will pay all Rent and other amounts payable under
any assigned Schedule to such assignee or as instructed by Lessor. Each
Schedule, incorporating by reference the terms and conditions of this Agreement,
constitutes a separate instrument of lease, and the Lessor named therein or its
assignee shall have all rights as "Lessor" thereunder separately exercisable by
such named Lessor or assignee as the case may be, exclusively and independently
of Lessor or any assignee with respect to other Schedules executed pursuant
hereto. Without limiting the generality of the foregoing, the grant of security
interest in Section 13(b) hereof shall, as it relates to the Equipment leased
under each Schedule (and to the proceeds and other collateral referred to in
Section 13(b) hereof), be deemed to have been granted solely to the Lessor named
therein, or to its assignee, as applicable and such Equipment (and other related
collateral) shall not be deemed to collateralize Lessee's obligations under any
of the Schedules to which such named Lessor or assignee, as the case may be, is
not a party. Lessee further agrees to confirm in writing receipt of a notice of
assignment as reasonably may be requested by assignee. Lessee hereby waives and
agrees not to assert against any such assignee any defense, set-off, recoupment
claim or counterclaim which Lessee has or may at any time have against Lessor or
any other person for any reason whatsoever.
(c) Subject always to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
12. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor, its
agents, employees, successors and assigns, from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature, in contract or tort, and including, but
not limited to, Lessor's strict liability in tort, arising out of (i) the
selection, manufacture, purchase, acceptance or rejection of Equipment, the
ownership of Equipment during the Term, and the delivery, lease, possession,
maintenance, uses, condition, return or operation of the Equipment (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for
7
<PAGE>
patent, trademark or copyright infringement or environmental damage), or (ii)
the condition of Equipment sold or disposed of after use by Lessee, any
sublessee or employees of Lessee. Lessee shall, upon request, defend any actions
based on, or arising out of, any of the foregoing.
(b) All of Lessors rights, privileges and indemnities contained in this
Section shall survive the expiration or other termination of this Agreement and
the rights, privileges and indemnities contained herein are expressly made for
the benefit of, and shall be enforceable by Lessor, its successors and assigns.
13. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY INTEREST; USURY SAVINGS:
(a) For income tax purposes, Lessor will treat Lessee as the owner of the
Equipment. Accordingly, Lessor agrees (i) to treat Lessee as the owner of the
Equipment on its federal income tax return, (ii) not to take actions or
positions inconsistent with such treatment on or with respect to its federal
income tax return, and not claim any tax benefits available to an owner of the
Equipment on or with respect to its federal income tax return. The foregoing
undertakings by Lessor shall not be violated by Lessor's taking a tax position
through inadvertence so long as such inadvertent tax position is reversed by
Lessor promptly upon its discovery. Subject to the foregoing, Lessor shall in no
event be liable to Lessee if Lessee fails to secure any of the tax benefits
available to the owner of the Equipment.
(b) In order to secure the prompt payment of the Rent and all of the other
amounts from time to time outstanding under and with respect to the Schedules,
and the performance and observance by Lessee of all the agreements, covenants
and provisions thereof (including, without limitation, all of the agreements,
covenants and provisions of the Lease that are incorporated therein), Lessee
hereby grants to Lessor a first priority security interest in the Equipment
leased under the Schedules, together with all additions, attachments,
accessions, accessories and accessions thereto whether or not furnished by the
supplier of the Equipment and any and all substitutions, replacements or
exchanges therefor, in each such case in which Lessee shall from time to time
acquire an interest, and any and all insurance and/or other proceeds (but
without power of sale) of the property in and against which a security interest
is granted hereunder.
(c) It is the intention of the parties hereto to comply with any
applicable usury laws to the extent that any Schedule is determined to be
subject to such laws; accordingly, it is agreed that, notwithstanding any
provision to the contrary in any Schedule or the Lease, in no event shall any
Schedule require the payment or permit the collection of interest in excess of
the maximum amount permitted by applicable law. If any such excess interest is
contracted for, charged or received under any Schedule or the Lease, or in the
event that all of the principal balance shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received
under any Schedule or the Lease shall exceed the maximum amount of interest
permitted by applicable law, then in such event (1) the provisions of this
paragraph shall govern and control, (2) neither Lessee nor any other person or
entity now or hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of the maximum
amount of Interest permitted by applicable law, (3) any such excess which may
have been collected shall be either applied as a credit against the then unpaid
principal balance or refunded to Lessee, at the option of the Lessor, and (4)
the effective rate of interest shall be automatically reduced to the maximum
lawful contract rate allowed under applicable law as now or hereafter construed
by the courts having jurisdiction thereof. It is further agreed that without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received under any Schedule or the Lease which are made for the
purpose of determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the indebtedness evidenced hereby, all interest at any time
contracted for, charged or received from Lessee or otherwise by Lessor in
connection with such indebtedness; provided, however, that if any applicable
state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for Lessor to receive a greater
interest per annum rate than is presently allowed, the Lessee agrees that, on
the effective date of such amendment or preemption, as the case may be, the
lawful maximum hereunder shall be increased to the maximum interest per annum
rate allowed by the amended state law or the law of the United States of America
(but not in excess of the interest rate contemplated hereunder).
14. REPRESENTATIONS AND WARRANTIES OF LESSEE:
8
<PAGE>
Lessee hereby represents and warrants to Lessor that on the date hereof and on
the date of execution of each Schedule:
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Agreement and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies therein provided may be limited under applicable bankruptcy and
insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's articles of incorporation, charter or by-laws; or (ii)
result in any breach of, constitute a default under or result in the creation of
any lien, charge, security interest or other encumbrance upon any Equipment
pursuant to any indenture, mortgage, deed of trust, bank loan or credit
agreement or other instrument (other than this Agreement) to which Lessee is a
party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which will have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each financial statement delivered to Lessor has been prepared in
accordance with GAAP, and since the date of the most recent such financial
statement, there has been no material adverse change.
(h) Lessee is duly incorporated and will be at all times validly existing
and in good standing under the laws of the state of its incorporation (specified
in the first sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business
purposes.
15. CHOICE OF LAW; JURISDICTION:
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties agree that any action
or proceeding arising out of or relating to this Agreement may be commenced in
the United States District Court for the Southern District of New York.
16. MISCELLANEOUS:
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS LEASE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
9
<PAGE>
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE
AND LESSOR. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
(b) Any cancellation or termination by Lessor, pursuant to the provision
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(c) All Equipment shall at all times remain personal property of Lessee
regardless of the degree of its annexation to any real property and shall not by
reason of any installation in, or affixation to, real or personal property
become a part thereof.
(d) Time is of the essence of this Agreement. Lessor's failure at any time
to require strict performance by Lessee of any of the provisions hereof shall
not waive or diminish Lessor's right thereafter to demand strict compliance
therewith.
(e) Lessee agrees, upon Lessor's request, to execute any instrument
necessary or expedient for filing, recording or perfecting the interest of
Lessor.
(f) All notices required to be given hereunder shall be in writing,
personally delivered, delivered by overnight courier service, or sent by
certified mail, return receipt requested, addressed to the other party at its
respective address stated above or at such other address as such party shall
from time to time designate in writing to the other party; and shall be
effective from the date of receipt.
(g) This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(h) The representations, warranties and covenants of Lessee herein shall
be deemed to survive the dosing hereunder. Lessors obligations to acquire and
lease specific items of Equipment shall be conditioned upon Lessee providing to
Lessor such information with respect to Lessee's financial condition as Lessor
may require, and Lessor being satisfied that there shall have been no material
adverse change in the business or financial condition of Lessee from the date of
execution hereof. The obligations of Lessee under Sections 3, 9(c), 12 and 16(l)
hereof which accrue during the term of this Agreement and obligations which by
their express terms survive the termination of this Agreement, shall survive the
termination of this Agreement.
(i) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated, to effect
such compliance, in whole or in part; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance (together
with interest thereon at the rate specified in Paragraph (j) of this Section)
shall constitute additional Rent due to Lessor within five (5) days after the
date Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(j) Any Rent or other amount not paid to Lessor when due after default
hereunder shall bear interest, both before and after any judgment or termination
hereof, at the lesser of fifteen percent (15%)
10
<PAGE>
per annum or the maximum rate allowed by law.
(k) Any provisions in this Agreement and any Schedule which are in
conflict with any statute, law or applicable rule shall be deemed omitted,
modified or altered to conform thereto.
(l) Lessee agrees to pay on demand all reasonable costs and expenses
incurred by Lessor in connection with the preparation, execution, delivery,
filing, recording, and administration of any of the Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for Lessor, and all costs and expenses, if any, in connection with the
enforcement of any of the Documents. In addition, Lessee shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of any of the Documents and
the other documents to be delivered under the Documents, and agrees to save
Lessor harmless from and against any and all liabilities with respect to or
resulting from any delay attributed to Lessee in paying or failing to pay such
taxes and fees.
17. CHATTEL PAPER: To the extent that any Schedule would constitute chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest therein may be created through
the transfer or possession of this Agreement in and of itself without the
transfer or possession of the original of a Schedule executed pursuant to this
Agreement and incorporating this Agreement by reference; and no security,
interest in this Agreement and a Schedule may be created by the transfer or
possession of any counterpart of the Schedule other than the original thereof,
which shall be identified as the document marked "Original" and all other
counterparts shall be marked "Duplicate".
REMAINDER OF PAGE INTENTIONALLY BLANK
11
<PAGE>
IN WITNESS WHEREOF, Lessee and Lessor have caused this Master Lease Agreement to
be executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
12
<PAGE>
EQUIPMENT SCHEDULE
SCHEDULE NO G-1
DATED THIS 29TH DAY OF DECEMBER, 1997
TO MASTER LEASE AGREEMTN DATED AS OF DECEMBER 29, 1997
Lessor & Mailing Address: Lessee & Mailing Address:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF INC.
4 North Park Drive 47-05 Metropolitan Avenue
Suite 500 Ridgewood, NY 11385
Hunt Valley, Maryland 21030
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement said Agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement
constitutes a separate instrument of lease.
A. Equipment
Pursuant to the terms of the Lease Lessor, agrees to acquire and lease to lessee
the Equipment on Annex A attached hereto and made a part hereof.
B. Financial Terms
1. Capitalized Lessor's Cost: $753,380.83
2. Daily Lease Rate Factor: .050273633%
3. Basic Term: Thirty-Six months
4. Basic Term Commencement Date: January 1, 1998
5. Renewal Term: Three twelve(12) month terms.
6. Maximum Lease Term: Seventy-two months
7. Last Delivery Date: December 31, 1997
8. Stipulated Loss Values: See Annex D
9. Assumed Interest Rate: 7.50% (which will be determined three (3)
Business Days before the date of execution of the Certificate of
Acceptance).
10. Equipment Location: Various - See Attachment to Annex A.
11. Lessee Federal Tax ID No.:
12. Supplier: Various - See Attachment to Annex A.
13. Lessee agrees and acknowledges that the Capitalized Lessor's Cost of
the Equipment as stated on the Schedule is equal to the fair market value
of the Equipment on the date hereof.
C. Term and Rent
1. Interim Rent. For the period from and including the Lease Commencement
date to the Basic Term Commencement Date ("Interim Period"), Lessee shall
pay as rent ("Interim Rent") for each unit of Equipment the product of the
Daily Lease Rate Factor times the Capitalized Lessor's Cost of such unit
times the number of days in the Interim Period. Interim Rent shall be due
on December 31, 1997 (the "Interim Rent Payment Date").
2. Basic Term Rent. Commencing on January 1, 1998, and on the same day of
each month thereafter (each a "Rent Payment Date") during the Basic Term,
Lessee shall pay as Rent ("Basic Term Rent") the product of the Basic Term
Lease Rate Factor time the Capitalized Lessor" Cost of all Equipment on
this Schedule. Said Rent consists of principal and interest components as
provided in the Amortization Schedule attached hereto.
<PAGE>
3. If the Interim Rent Payment Date or any rent Payment Date is not a
Business Day, the Rent otherwise due on such date shall be payable on the
immediately preceding business Day. As used herein, "Business Day" shall
mean any day other than Saturday, Sunday, and any day on which banking
institutions located in the States of Connecticut, Maryland or New York
are authorized by law or other governmental action to close.
D. Insurance
1. Public Liability: $1,000,000.00 total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment.
E. Fixed Purchase Price and Residual Risk Amount
End of Month Fixed Purchase Price Residual Risk Amount
- - ------------ -------------------- --------------------
36 64.467082% 12.639606%
48 50.736256% 7.016677%
60 35.943408% 5.522397%
72 20.000000% 3.912113%
expressed as a percent of the Capitalized lessor's Cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement or
Equipment until executed on behalf of lessor and Lessee by authorized
representative of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
Attest:
By:_________________________________
Name:_______________________________
Title:______________________________
2
<PAGE>
(FISCAL AGENT)
NOTICE AND ACKNOWLEDGMENT OF ASSIGNMENT
Reference is hereby made to that certain Master Lease Agreement dated as
of December 29, 1997 (the "Lease"), between General Electric Capital Corporation
("Lessor") and Western Beef, Inc. ("Lessee").
Lessor hereby gives Lessee notice, and Lessee hereby acknowledges receipt
of notice, that Lessor has assigned to THE FIFTH THIRD LEASING COMPANY
("Assignee"), whose offices are at 38 Fountain Square, Fifth Third Center, 5th
Floor, Cincinnati, OH 45263, all right, title, interest and obligations of
Lessor in Schedules to the Lease and, to the extent incorporated therein by
reference, the Lease, The Fifth Third Leasing Company will act as Lessor for all
intents and purposes. Pursuant to such assignment, it is contemplated that
Assignee will acquire and lease to Lessee certain equipment (the "Equipment") to
be described on Equipment Schedule No. G-l executed pursuant to the Lease by
Assignee and Lessee (collectively the "Assigned Schedules"). From and after the
date of this Notice, all payments of rent and other sums now or hereafter
becoming due pursuant to the Assigned Schedules or with respect to the equipment
described on the Assigned Schedules (the "Equipment") shall be paid directly to
Lessor as Fiscal Agent of Assignee, unless and until Assignee notified Lessee of
the termination of the fiscal agency (whereupon Lessee shall make payment as
directed in Assignee's invoices).
In recognition of Assignee's reliance upon this Notice and Acknowledgment
of Assignment, Lessee certifies, confirms and agrees as follows:
1. The Lease and the Equipment Schedule have been duly authorized,
executed and delivered by Lessee; constitute the legal, valid and
binding obligation of Lessee, enforceable against Lessee in
accordance with the terms thereof; are in full force and effect on
the date of execution of this notice by such party; are free from
all defenses, set-offs and counterclaims; and no default or event
which, with the passage of time or the giving of notice, or both,
would constitute a default under the Lease has occurred.
2. There are no modifications, amendments or supplements to the Lease
which relate to the Assigned Schedule; and any future modification,
termination, amendment or
<PAGE>
supplement to the Lease which relates to the Assigned Schedule, or
settlement of amounts due thereunder which relates to the Assigned
Schedule, shall be ineffective without Assignee's prior written
consent.
3. There has been no prepayment of rent or other sums payable under the
Assigned Schedule and no casualty has occurred with respect to the
Equipment.
4. Lessee acknowledges and agrees that (i) Assignee shall be the owner
of the Equipment and Lessor shall have no interest or authority of
any nature regarding the Equipment or the Assigned Schedule, (ii) If
Assignee notifies Lessee of the termination of Lessor's fiscal
agency, Lessee will deal exclusively with respect to the Assigned
Schedule with Assignee, and Lessee will deliver all payments and
copies of all notices and other communications given or made by
Lessee to Assignee at the address listed above, (iii) so far as
enforcement of the Assigned Schedule is concerned, notwithstanding
the existence of other schedules or supplements thereto, the
Assigned Schedule is separate and severable and Assignee may take
enforcement action independently of other lessors, equipment owners
or financing parties having an interest in the Lease and other
equipment schedules not included in the Assigned Schedule, and (iv)
Lessee will execute such other instruments and take such actions as
Assignee reasonably may require to further confirm the vesting of
rights under the Lease in Assignee and Assignee's ownership of the
Equipment.
5. Lessee has not received notice of a prior sale, transfer,
assignment, hypothecation or pledge of the Assigned Schedule or the
rents reserved thereunder.
6. Lessee will keep the Lease, the Assigned Schedule and the Equipment
free and clear of all liens and encumbrances (other than the
interest of Lessor, Assignee or parties claiming by, through or
under them).
7. All representations and duties of Lessor intended to induce Lessee
to enter into the Lease, whether required by the Lease or otherwise,
have been fulfilled.
<PAGE>
8. Lessee has executed one (1) original each of the Lease and the
Equipment Schedule (which were delivered to Lessor), and currently
has no original of either in its possession.
9. All representations and warranties of the Lessee in the Lease are
true and correct.
10. The documents described on the attached Schedule A are all the
documents executed or delivered to or by Assignor and Lessee in
connection with the Assigned Schedule and the Equipment, and such
documents constitute the entire agreement of the parties with
respect to the Assigned Schedule and the Equipment.
Accepted and agreed to on this. ____ day of December, 1997.
GENERAL ELECTRIC CAPITAL Western Beef, Inc.
CORPORATION Lessee
Lessor
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
THE FIFTH THIRD LEASING COMPANY
Assignee
By: _________________________________
Name: _______________________________
Title: ______________________________
<PAGE>
(FISCAL AGENT)
NOTICE AND ACKNOWLEDGMENT OF ASSIGNMENT
Reference is hereby made to that certain Master Lease Agreement dated as
of December 29, 1997 (the "Lease"), between General Electric Capital Corporation
("Lessor") and Western Beef, Inc. ("Lessee").
Lessor hereby gives Lessee notice, and Lessee hereby acknowledges receipt
of notice, that Lessor has assigned to THE FIFTH THIRD LEASING COMPANY
("Assignee"), whose offices are at 38 Fountain Square, Fifth Third Center, 5th
Floor, Cincinnati, OH 45263, all right, title, interest and obligations of
Lessor in Schedules to the Lease and, to the extent incorporated therein by
reference, the Lease, The Fifth Third Leasing Company will act as Lessor for all
intents and purposes. Pursuant to such assignment, it is contemplated that
Assignee will acquire and lease to Lessee certain equipment (the "Equipment") to
be described on Equipment Schedule No. F-1 executed pursuant to the Lease by
Assignee and Lessee (collectively the "Assigned Schedules"). From and after the
date of this Notice, all payments of rent and other sums now or hereafter
becoming due pursuant to the Assigned Schedules or with respect to the equipment
described on the Assigned Schedules (the "Equipment") shall be paid directly to
Lessor as Fiscal Agent of Assignee, unless and until Assignee notified Lessee of
the termination of the fiscal agency (whereupon Lessee shall make payment as
directed in Assignee's invoices).
In recognition of Assignee's reliance upon this Notice and Acknowledgment
of Assignment, Lessee certifies, confirms and agrees as follows:
1. The Lease and the Equipment Schedule have been duly authorized,
executed and delivered by Lessee; constitute the legal, valid and
binding obligation of Lessee, enforceable against Lessee in
accordance with the terms thereof; are in full force and effect on
the date of execution of this notice by such party; are free from
all defenses, set-offs and counterclaims; and no default or event
which, with the passage of time or the giving of notice, or both,
would constitute a default under the Lease has occurred.
2. There are no modifications, amendments or supplements to the Lease
which relate to the Assigned Schedule; and any future modification,
termination, amendment or
<PAGE>
supplement to the Lease which relates to the Assigned Schedule, or
settlement of amounts due thereunder which relates to the Assigned
Schedule, shall be ineffective without Assignee's prior written
consent.
3. There has been no prepayment of rent or other sums payable under the
Assigned Schedule and no casualty has occurred with respect to the
Equipment.
4. Lessee acknowledges and agrees that (i) Assignee shall be the owner
of the Equipment and Lessor shall have no interest or authority of
any nature regarding the Equipment or the Assigned Schedule, (ii) If
Assignee notifies Lessee of the termination of Lessor's fiscal
agency, Lessee will deal exclusively with respect to the Assigned
Schedule with Assignee, and Lessee will deliver all payments and
copies of all notices and other communications given or made by
Lessee to Assignee at the address listed above, (iii) so far as
enforcement of the Assigned Schedule is concerned, notwithstanding
the existence of other schedules or supplements thereto, the
Assigned Schedule is separate and severable and Assignee may take
enforcement action independently of other lessors, equipment owners
or financing parties having an interest in the Lease and other
equipment schedules not included in the Assigned Schedule, and (iv)
Lessee will execute such other instruments and take such actions as
Assignee reasonably may require to further confirm the vesting of
rights under the Lease in Assignee and Assignee's ownership of the
Equipment.
5. Lessee has not received notice of a prior sale, transfer,
assignment, hypothecation or pledge of the Assigned Schedule or the
rents reserved thereunder.
6. Lessee will keep the Lease, the Assigned Schedule and the Equipment
free and clear of all liens and encumbrances (other than the
interest of Lessor, Assignee or parties claiming by, through or
under them).
7. All representations and duties of Lessor intended to induce Lessee
to enter into the Lease, whether required by the Lease or otherwise,
have been fulfilled.
<PAGE>
8. Lessee has executed one (1) original each of the Lease and the
Equipment Schedule (which were delivered to Lessor), and currently
has no original of either in its possession.
9. All representations and warranties of the Lessee in the Lease are
true and correct.
10. The documents described on the attached Schedule A are all the
documents executed or delivered to or by Assignor and Lessee in
connection with the Assigned Schedule and the Equipment, and such
documents constitute the entire agreement of the parties with
respect to the Assigned Schedule and the Equipment.
Accepted and agreed to on this ____ day of December, 1997.
GENERAL ELECTRIC CAPITAL Western Beef, Inc.
CORPORATION Lessee
Lessor
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
THE FIFTH THIRD LEASING COMPANY
Assignee
By: _________________________________
Name: _______________________________
Title: ______________________________
<PAGE>
EQUIPMENT SCHEDULE
SCHEDULE NO. F-1
DATED THIS 29th DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29. 1997
Lessor & Mailing Address: Lessee & Mailing Address:
THE FIFTH THIRD LEASING COMPANY WESTERN BEEF, INC.
38 Fountain Square 47-05 Metropolitan Avenue
Fifth Third Center, 5th Floor Ridgewood, NY 11385
Cincinnati, OH 45263
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement,
constitutes a separate instrument of lease.
A. Equipment.
Pursuant to the terms of the Lease, Lessor agrees to acquire and lease to Lessee
the Equipment listed on Annex A attached hereto and made a part hereof.
B. Financial Terms.
1. Capitalized Lessor's Cost: $1,478,183.15
2. Daily Lease Rate Factor: .050273633%
3. Basic Term: Thirty-six (36) months
4. Basic Term Commencement Date: January 1, 1998.
5. Renewal Term: Three twelve (12) month terms.
6. Maximum Lease Term: Seventy-two months.
7. Last Delivery Date: December 31, 1997.
8. Stipulated Loss Values: See Annex D.
9. Assumed Interest Rate: 7.50% (which will be determined three (3) Business
Days before the date of execution of the Certificate of Acceptance).
10. Equipment Location: Various - See Attachment to Annex A.
11. Lessee Federal Tax ID No.:________________________________________________
12. Supplier: Various - See Attachment to Annex A.
13. Lessee agrees and acknowledges that the Capitalized Lessors Cost of the
Equipment as stated on the Schedule is equal to the fair market value of
the Equipment on the date hereof.
C. Term and Rent.
1. Interim Rent. For the period from and including the Lease Commencement
Date to the Basic Term Commencement Date ("Interim Period"), Lessee shall pay as
rent ("Interim Rent") for each unit of Equipment, the product of the Daily Lease
Rate Factor times the Capitalized Lessor's Cost of such unit times the number of
days in the Interim Period. Interim Rent shall be due on December 31, 1997 (the
"Interim Rent Payment Date").
2. Basic Term Rent. Commencing on January 1, 1998, and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic Term,
Lessee shall pay as Rent ("Basic Term Rent") the product of the Basic Term Lease
Rate Factor times the Capitalized Lessor's Cost of all Equipment on this
Schedule. Said Rent consists of principal and interest components as provided in
the Amortization Schedule attached hereto.
<PAGE>
3. If the Interim Rent Payment Date or any Rent Payment Date is not a
Business Day, the Rent otherwise due on such date shall be payable on the
immediately preceding Business Day. As used herein, "Business Day" shall mean
any day other than Saturday, Sunday, and any day on which banking institutions
located in the States of Connecticut, Maryland or New York are authorized by law
or other governmental action to close.
D. Insurance.
1. Public Liability: $1,000,000.00, total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment.
E. Fixed Purchase Price and Residual Risk Amount
End of Month Fixed Purchase Price Residual Risk Amount
- - ------------ -------------------- --------------------
36 64.467282% 12.639606%
48 50.738256% 7.016677%
60 35.943409% 5.522397%
72 20.000000% 3.912113%
expressed as a percent of the Capitalized Lessor's Cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement or
Equipment until executed on behalf of Lessor and Lessee by authorized
representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
THE FIFTH THIRD LEASING COMPANY WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
Attest:
By: _________________________________
Name: _______________________________
Title: ______________________________
2
<PAGE>
ANNEX A
TO
SCHEDULE NO. F-1
DATED THIS 29th DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29,1997
DESCRIPTION OF EQUIPMENT
Manufacturer Serial Numbers Type and Model Number of Units Cost per Unit
of Equipment
================================================================================
See Attachment to Annex A
Initials: PC JR
------ ---------
Lessor Lessee
<PAGE>
Attachment to Annex A
Lessee: Western Beet, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 01): 47-05 Metropolitan Avenue
Ridgewood, NY 11385
<TABLE>
<CAPTION>
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADMIRAL AIR CONDITIONING, INC. air conditioning system 4/2/97 65,500.00
ALARMINGLY AFFORDABLE, INC. PA system 22001 16,610.96
BULLDOG GRAPHICS Furnish & install sign 970517 27,197.81
DARBY TENT CO., INC. Fiesta Frame tent, canopy 111561 14,500.00
DEVALTRONIX 2-Multiline Display High Intensity REO LEOs 1845 52,773.00
M. FRIED STORE FIXTURES Store fixtures more fully descr. on inv. 3359 117,126.50
K & D ENTERPRISES Adamatic Roll/Bread Divider, SN:221088159 280 20,500.00
ON-SITE ENERGY COMPANY Onan Model 60 ENA gas fueled generator 19,945.06
JOHN TARA INC. Supply and install custom made canopy 200 44,000.00
JOHN TARA INC. Supply and install custom made canopy 199 5,400.00
TECHNIBUILT Shevling more fully described on invoice 43802 17,158.99
UNARCO 500-shopping carts 564892 50,709.71
VHB REFRIGERATION & EQUIP. 601 Deck produce 96-375 19,229.53
VHB REFRIGERATION & EQUIP. Condensing unit racks 96-396 98,909.11
VHB REFRIGERATION & EQUIP. Condensers 96-410 65,312.64
VHB REFRIGERATION & EQUIP. 32' OIP Island Produce 96-411 33,825.96
VHB REFRIGERATION & EQUIP. 31 doors 96-485 39,600.02
VHB REFRIGERATION & EQUIP. 32' 5-deck frozen meat case, model 05Z 97-019 20,246.00
------------
TOTAL $ 728,545.29
============
</TABLE>
INITIAL PC JR
--------
Page 1
<PAGE>
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 19): 12-03 East New York Avenue
Brooklyn, NY 11212
<TABLE>
<CAPTION>
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADMIRAL AIR CONDITIONING INC. air conditioning system 6356 37,640.00
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3390 40,172.87
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3524 7,388.60
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3525 4,160.59
M. FRIED STORE FIXTURES Gondolas & shelving as more fully descr. on inv. 3526 1,058.72
KYSOR/WARREN Refrigerated cases 62803 47,509.84
KYSOR/WARREN Refrigerated cases 70285 5,981.90
ON-SITE ENERGY Onan Model 60 ENA gas fueled generator 17,211.75
WT WINTER ASSOC. Auto wrapper and accessories 16058 40,258.29
WT WINTER ASSOC. Step-saver equipment more fully descr. on inv. 10798 22,202.00
------------
TOTAL $ 223,584.56
============
</TABLE>
INITIAL PC JR
--------
Page 2
<PAGE>
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 9) _____________________________
<TABLE>
<CAPTION>
SUPPLIER Equipment Description INV.# AMOUNT
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CBS WHITCOM Newbridge 3624 Channel Bank & access. Purch. agree 25,180.00
GATES/ARROW DISTRIBUTIONS 2-AST Bravo Computers & access.- See inv. for SN 6133088 4,629.50
GATES/ARROW DISTRIBUTIONS 2-76H0945 - See invoice for S/N 5632489 2,117.15
GATES/ARROW DISTRIBUTIONS 2-AST Systems - See inv. for S/N 5634084 6,335.00
ON SITE ENERGY CO. Onan Model 60 ENA gas fueled generator 17,211.75
-----------
TOTALS $ 55,473.40
===========
</TABLE>
INITIAL PC JR
--------
Page 3
<PAGE>
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 45): 322 Nassau Road
Roosevelt, NY 11575
<TABLE>
<CAPTION>
SUPPLIER Equipment Description INV.# AMOUNT
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA396725 55,857.00
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA409129 9,149.78
ACCU-SAFE Safe 6031 3,221.00
ADVANCE ENERGY TECH. Retrofix Cooler Combo 7235 44,389.00
ALARMINGLY AFFORDABLE Complete supermarket installation per invoice 20256 31,922.93
ALLTEC PRODUCTS Cold pressure washer 97537 5,493.38
CROWN EQUIPMENT PW 3000 Series Walkie Pallet Trucks 26042 15,190.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2864 38,699.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2941 1,380.19
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2957 4,120.59
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2962 1,550.44
GLOBE-MONTE METROPOLITAN Hickory 7G Rotisserie, S/N: 07907 19504 5,279.35
GLOBE-MONTE METROPOLITAN Henny Penny #500 Fryer, SIN: GBO26IF 19506 6,836.59
MID SOUTH DATA SYSTEMS Computers as more fully described on invoice 22330A 129,738.17
SIEGMEISTER SALES 8 - New machines more fully desc. on quote and del. ticket 30425 27,531.00
TREIF USA PUMA CE 700 Power Cutter 1274 21,260.00
WT WINTER ASSOCIATES Combo station, master step saver 11962 39,718.98
WT WINTER ASSOCIATES Auto wrapping weigh & accessories 12068 29,242.50
--------------
TOTAL $ 470,579.90
==============
TOTAL CAPITALIZED LESSOR'S COST $ 1,478,183.15
</TABLE>
INITIAL PC JR
--------
Page 4
<PAGE>
Attachment to Annex A
Lessee: Western Beef, Inc.
Lessor: The Fifth Third Leasing Company
Equipment Location (Store 45): 322 Nassau Road
Roosevelt, NY 11575
<TABLE>
<CAPTION>
SUPPLIER Equipment Description INV.# AMOUNT
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA396725 55,857.00
ABCO REFRIGERATION Refrigeration Equipment more fully described on inv. MA409129 9,149.78
ACCU-SAFE Safe 6031 3,221.00
ADVANCE ENERGY TECH. Retrofix Cooler Combo 7235 44,389.00
ALARMINGLY AFFORDABLE Complete supermarket installation per invoice 20256 31,922.93
ALLTEC PRODUCTS Cold pressure washer 97537 5,493.38
CROWN EQUIPMENT PW 3000 Series Walkie Pallet Trucks 26042 15,190.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2864 38,699.00
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2941 1,380.19
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2957 4,120.59
M. FRIED STORE EQUIP. Gondolas & shelving as more fully descr. on inv. 2962 1,550.44
GLOBE-MONTE METROPOLITAN Hickory 7G Rotisserie, S/N: 07907 19504 5,279.35
GLOBE-MONTE METROPOLITAN Henny Penny #500 Fryer, SIN: GBO26IF 19506 6,836.59
MID SOUTH DATA SYSTEMS Computers as more fully described on invoice 22330A 129,738.17
SIEGMEISTER SALES 8 - New machines more fully desc. on quote and del. ticket 30425 27,531.00
TREIF USA PUMA CE 700 Power Cutter 1274 21,260.00
WT WINTER ASSOCIATES Combo station, master step saver 11962 39,718.98
WT WINTER ASSOCIATES Auto wrapping weigh & accessories 12068 29,242.50
--------------
TOTAL $ 470,579.90
==============
TOTAL CAPITALIZED LESSOR'S COST $ 1,478,183.15
</TABLE>
INITIAL
--------
Page 4
<PAGE>
ANNEX B
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: Western Beef, Inc. ("Seller"), for and in
consideration of the sum of One Dollar ($1) and other good and valuable
consideration, provided by THE FIFTH THIRD LEASING COMPANY ("Buyer"), with
offices at 38 Fountain Square, Fifth Third Center, Fifth Floor, Cincinnati, OH
45263, the receipt of which is hereby acknowledged, does hereby sell, assign,
transfer, set over and convey to Buyer the equipment (`the Equipment") leased
under Schedule No. F-1 dated as of December 29, 1997, between Seller and Buyer,
executed pursuant to the Master Lease Agreement dated December 29,1997, between
Seller and Buyer, a copy of which is attached hereto and made a part hereof.
Buyer and Seller agree and acknowledge that ;the sale and conveyance
contemplated hereby is solely for the purpose of granting to Buyer a security
interest in the Equipment and Seller shall retain legal title to such Equipment.
All Equipment in which an interest is conveyed hereby shall remain in the
possession of Seller pursuant to the Lease.
Buyer is purchasing the Equipment described above in reliance upon its personal
inspection and knowledge of the Equipment and in an "AS-IS, WHERE-IS",
condition.
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE EXCEPT
THAT (1) SELLER HAS GOOD TITLE TO THE EQUIPMENT, FREE AND CLEAR OF ALL LIENS,
CLAIMS AND ENCUMBRANCES, (2) BUYER WILL ACQUIRE ITS INTEREST IN THE EQUIPMENT
FREE FROM ALL LIENS, CLAIMS AND ENCUMBRANCES, AND (3) SELLER HAS THE RIGHT TO
SELL AND CONVEY THE EQUIPMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SELLER MAKES NO WARRANTIES WITH RESPECT TO THE QUALITY, CONBTENT, CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE EXUIPMENT AND NO
WARRANTIES AGAINST PATENT INFRINGEMENT OR THE LIKE.
IN WITNESS WHEREOF, Buyer and Seller have executed this Bill of Sale this 30th
day of December, 1997.
BUYER: SELLER:
THE FIFTH THIRD LEASING COMPANY, WESTERN BEEF, INC.
By: By: /s/ Peter Castellana, Jr
---------------------------------- ---------------------------------
Name: Name: Peter Castellana, Jr
-------------------------------- -------------------------------
Title: Title: President
------------------------------- ------------------------------
NORTH FORK BANK
PROMISSORY NOTE
BORROWER: WESTERN BEEF, INC
PRINCIPAL: $3,000,000.00 DATE:
PROMISE TO PAY: The undersigned, jointly and severally if more than one signer,
does hereby promise to pay to the order of NORTH FORK BANK (the "Bank") at its
offices at 245 Love Lane, Mattituck, New York, or any of its branches, the sum
of THREE MILLION AND 00/100 ($3,000,000.00) DOLLARS or the aggregate unpaid
amount of all advances made to the undersigned by the Bank, whichever is less,
plus interest thereon, from the date hereof in the manner set below.
RATE AND PAYMENT: Interest only on the unpaid balance hereof at the rate of
North Fork Bank's Prime Rate payable on October 1, 1997 and on the 1st day of
each month thereafter until July 1, 1998 when all unpaid principal and interest
shall be due in full. All interest payments shall be made by automatic debit
from an account maintained at the Bank in which borrower shall maintain balances
sufficient to pay the monthly interest payments. Account #012398
Payments shall be applied first to interest on unpaid principal balances to the
date payment is received by the Bank and then to reduction of principal. If the
interest rate is based on the Bank's announced Prime Rate, the interest rate
shall change when the Prime Rate changes and nothing herein shall prevent the
Bank from loaning money at less than Prime on such terms and conditions as it
deems advisable. Interest shall be calculated on a 360 day year and actual
number of days elapsed.
GRID NOTE: The Borrower may borrow, repay in whole or in part, and reborrow on a
revolving basis amounts up to $3,000.000.00. However, the Bank reserves the
right to make or decline any rrequest for an advance in its sole discretion and
may condition the availability of an advance upon, among other things, the
maintenance of a satisfactory financial condition. Borrower authorizes the Bank
to keep a record of the amounts and dates of all advances and repayments
hereunder, which record shall, in the absence of manifest error, be conclusive
as to the outsanding principal amount due hereunder; provided, however, that the
failure to record any advance or repayment shall not limit or other wise affect
the obligation of Borrower under this Note.
PREPAYMENT: Prepayment in whole or in part may be made at any time without
penalty. Any prepayment will be applied inn inverse order of maturity and will
not defer the payment schedule.
DEFAULT INTEREST RATE: The unpaid principal sum due under this Note shall bear
interest at a rate equal to five (5%) per centum above the Rate set forth above
on and after the occurrence of any event of default and until the entire
principal sum hereof has been fully paid, both before and after the entry of any
judgment with respect to such event, but in no event shall the rate either
before or after the occurrence of an event of default exceed the highest rate of
interest, if any permitted under applicable New York or Federal Law.
SECURITY: A security interest in and assignment and pledge of all monies,
deposits, or other sums now or hereafter held by the bank on deposit, in
safekeeping, transit or otherwise, at any time credited by or due from Bank to
the undersigned, or in which the undersigned shall have an interest.
RIGHT OF OFFSET: If any payment is not made on time, if the entire balance
becomes due and payable and is not paid, all or part of the amount due may be
offset out of any account or other property which the undersigned has at the
Bank without prior notice or demand.
LATE CHARGES: Undersigned will pay a charge of 4% of the amount of any payment
which is not made within 10 days of when due, or, if applicable, which cannot be
debited from its account due to insufficient balance on the debit date.
COMPENSATION BALANCES: If at any time prior to the maturity of this note, the
aggregate average monthly ledger balance maintained in the non-interest bearing
deposit accounts of the undersigned are less than $1,000,000.00, the undersigned
agrees to pay to the Bank an additional fee, calculated as (a) the difference
between $1,000,000.00, and the aggregate average monthly ledger balance
maintained in the non-interest bearing deposit accounts, multiplied by (b) a
fixed rate ("the Deficiency Rate") equal to North Fork Bank's Prime rate plus
four (4%) percent based on a 360 day year and actual number of days elapsed.
Such Deficiency Rate shall be established on each January and July first and
shall be applicable for the ensuing six month period.
Such fee shall be due and payable quarterly within (15) fifteen days following
the end of every calendar quarter. The fee shall be debited by the Bank from
Account #3124-012398 or from any other account in which the undersigned
maintains sufficient funds. The undersigned agrees to maintain sufficient funds
in its accounts to permit such debit.
Nothing contained herein shall be deemed to require the undersigned to maintain
Demand Deposit Balances in the amount described above. In no event shall the
interest rate referenced in any Note(s) executed by the undersigned either
before or after the occurrence of any event of default, together with the
deficiency fee payable hereunder exceed the highest rate, if any, permitted
under applicable New York State or Federal law.
2
<PAGE>
FINANCIAL STATEMENTS: Borrower and Guarantor shall furnish to the Bank the
following: a) As soon as available, but in no event later than 120 days after
the end of each fiscal year, with annual audited financial statements, including
balance sheets as of the last day of the fiscal year, statements of income and
retained earnings and statements of cash flows for such fiscal year each
prepared in accordance with generally accepted accounting principles,
consistently applied for the period and prior periods by an independent
certified public accountant satisfactory to the Bank. b) Borrower and Guarantor
shall furnish the Bank with Quarterly financial statements within 90 days. c)
Borrower shall furnish the Bank with a 10-K Report within 120 days of the
companies fiscal year end.
FINANCIAL COVENANTS:
The Borrower and or Guarantor (the "Parties") hereby agree that as long as the
commitment remains in effect, the promissory note together with accrued interest
thereon remains unpaid, and any other amounts, including but not limited to late
charges and fees, are due and owing to the Bank, the Parties shall maintain at
all times, the following financial covenants measured in accordance with
generally accepted accounting principles ("GAAP") consistently applied:
During the term of this loan, Borrower will repay all principal and interest
outstanding so that no amounts are outstanding hereunder for a period of not
less than 30 consecutive days.
Negative Pledge not to further encumber inventory and receivable without the
consent of the Bank.
DEFAULT: The Bank may declare the entire unpaid balance of the Note due and
payable on the happening of any of the following events:
(a) Failure to pay any amount required by this Note when due, or any other
obligation owed to the Bank by undersigned or any guarantor, or, if applicable,
failure to have sufficient funds in its account for loan payments to be debited
on the due date.
(b) Failure to perform or keep or abide by any term, covenant or condition
contained in this Note, any Guaranty or any other document given to the Bank in
connection with this loan;
(c) The filing of a bankruptcy proceeding, assignment for the benefit of
creditors, issuance of a judgement in excess of $100,000.00 that remains
unsatisfied for more than 30 days or the issuance pursuant thereto of an
execution, garnishment, or levy against, or the appointment of a representative
of any kind for the commencement of any proceeding for relief from indebtedness
by or against the undersigned or any Guarantor;
(d) The happening of any event which, in the judgement of the Bank,
adversely affects Borrower's or Guarantor's ability to repay or the value of any
collateral;
(c) If any written representation or statement made to the Bank by
Borrower or Guarantors is untrue;
3
<PAGE>
(f) If any written representation or warranty made to the Bank by Borrower
or Guarantors is breached;
(g) The occurrence of a default under any Guaranty or any other document
or instrument given to the Bank in connection with the loan;
(h) Death or inability to manage the affairs of any individual borrower or
guarantor; dissolution or a change in composition of a partnership borrower;
dissolution, merger, or consolidation of a corporate borrower;
(i) Failure to provide any financial information on request or permit an
examination of books and records.
Notwithstanding the foregoing, the balance of this Note shall become immediately
due and payable upon the occurrence of any of the events set forth in (c) above,
and, if this is a demand note, the Bank may declare the balance of this Note due
at any time.
ATTORNEYS FEES: In the event the Bank retains counsel with respect to
enforcement of this Note or any other document or instrument given to the Bank,
the undersigned agrees to pay the Bank's reasonable attorney's fees (whether or
not an action is commenced and whether or not in the court of original
jurisdiction, appellate court, bankruptcy court, or otherwise).
MISCELLANEOUS: Delay or failure of the Bank to exercise any of its rights under
this Note shall not be deemed a waiver thereof. No waiver of any condition or
requirement shall operate as a waiver of any other or subsequent condition or
requirement. The Bank or any other holder of this Note does not have to present
it before requiring payment. The undersigned waives trial by jury with respect
to any action arising out of or relating to this Note. This Note may not be
modified or terminated orally. This Note shall be governed by the laws of the
State of New York without regard to its conflicts of laws rules. The undersigned
irrevocably consents to the jurisdiction and venue of the New York State Supreme
Court, Suffolk County in any action concerning this note. The Bank may accept
partial payments marked "in full" without waiving any of its rights hereunder.
Any payments made after maturity or acceleration will not reinstate the Note.
This Note is binding upon the undersigned, its heirs, successors and assigns.
IN WITNESS WHEREOF, the undersigned has signed this note as of the 17 day
of Sept., 1997.
WESTERN BEEF, INC.
BY: /s/ Peter Castellana, Jr.
-----------------------------------
BY:
-----------------------------------
4
<PAGE>
ANNEX C
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
CERTIFICATE OF ACCEPTANCE
To: The Fifth Third Leasing Company
Pursuant to the provisions of the above Schedule and Master Lease Agreement
(collectively, the "Lease"), Lessee hereby certifies and warrants that (a) all
Equipment listed in the related invoice is in good condition and appearance,
installed (if applicable), and in working order; and (b) Lessee accepts the
Equipment for all purposes of the Lease and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the Lease; and (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof.
- - --------------------------------------
Lessee's Authorized Representative
Dated: December 30, 1997
<PAGE>
ANNEX D
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
STIPULATED LOSS VALUE TABLE*
Rent Payment Rent Payment
Date SLV% Date SLV%
0 102.000000 37 64.334216
1 101.089013 38 63.194242
2 100.172506 39 62.047316
3 99.250445 40 60.893396
4 98.322794 41 59.732438
5 97.389520 42 58.564397
6 96.450585 43 57.389229
7 95.505956 44 56.206890
8 94.555597 45 55.017335
9 93.599472 46 53.820519
10 92.637544 47 52.616397
11 91.669778 48 51.404922
12 90.696137 49 50.186050
13 89.716585 50 48.959733
14 88.731084 51 47.725925
15 87.739597 52 46.484579
16 86.742087 53 45.2356949
17 85.738516 54 43.979086
18 84.728846 55 42.714844
19 83.713040 56 41.442874
20 82.691058 57 40.163127
21 81.662862 58 38.875556
22 80.628414 59 37.580110
23 79.587675 60 36.276742
24 78.540604 61 34.965402
25 77.487163 62 33.646039
26 76.427311 63 32.318604
27 75.361009 64 30.983046
28 74.288216 65 29.639315
29 73.208892 66 28.287358
30 72.122995 67 26.927126
31 71.030485 68 25.558565
32 69.931321 69 24.181625
33 68.825461 70 22.796253
34 67.712862 71 21.402395
35 66.593484 72 20.000000
36 65.467282
Initials: PC JR
-------- ------------
Lessor Lessee
- - ----------
* The stipulated Loss Value for any unit of Equipment shall be equal to the
Capitalized Lessor's Cost of such unit multiplied by the appropriate percentage
derived from the above table. In the event that the lease is for any reason
extended, then the last percentage figure shown above shall control throughout
any such extended term.
<PAGE>
ANNEX E
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
AMORTIZATION SCHEDULE*
OUTSTANDING PRINCIPAL
RENT PAYMENT DATE PRINCIPAL* INTEREST* BALANCE*
- - ----------------- ---------- --------- --------
1 0.883209% 0.625000% 99.116791%
2 0.888729% 0.619480% 98.228062%
3 0.894284% 0.613925% 97.333778%
4 0.899873% 0.608336% 96.433906%
5 0.905497% 0.602712% 95.528408%
6 0.911156% 0.597053% 94.617252%
7 0.916851% 0.591358% 93.700401%
8 0.922581% 0.585628% 92.777819%
9 0.928348% 0.579861% 91.849472%
10 0.934150% 0.574059% 90.915322%
11 0.939988% 0.568221% 89.975334%
12 0.945863% 0.562346% 89.029471%
13 0.951775% 0.556434% 88.077696%
14 0.957723% 0.550486% 87.119972%
15 0.963709% 0.544500% 86.156263%
16 0.969732% 0.538477% 85.186531%
17 0.975793% 0.532416% 84.210738%
18 0.981892% 0.526317% 83.228846%
19 0.988029% 0.520180% 82.240817%
20 0.994204% 0.514005% 85.186531%
21 1.000418% 0.507791% 80.246196%
22 1.006670% 0.501539% 79.239525%
23 1.012962% 0.495247% 78.226563%
24 1.019293% 0.488916% 77.207270%
25 1.025664% 0.482545% 76.181607%
26 1.032074% 0.476135% 75.149533%
27 1.038524% 0.469685% 74.111009%
28 1.045015% 0.463194% 73.065993%
29 1.051547% 0.456662% 72.014447%
30 1.058119% 0.450090% 70.956328%
31 1.064732% 0.443477% 69.891596%
32 1.071387% 0.436822% 68.820210%
33 1.078083% 0.430126% 67.742127%
34 1.084821% 0.423388% 66.657306%
35 1.091601% 0.416608% 65.565706%
36 1.098423% 0.409786% 64.467282%
37 1.105288% 0.402921% 63.361994%
38 1.112197% 0.396012% 62.249797%
- - ----------
* The Principal, Interest and Outstanding Principal Balance as of any Rent
Payment Date shall be equal to the Capitalized Lessor's Cost of such unit
multiplied by the appropriate percentage derived from the above table.
<PAGE>
ANNEX E
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December , 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
AMORTIZATION SCHEDULE*
OUTSTANDING PRINCIPAL
RENT PAYMENT DATE PRINCIPAL* INTEREST* BALANCE*
- - ----------------- ---------- --------- --------
39 1.119148% 0.389061% 61.130650%
40 1.126142% 0.382067% 60.004507%
41 1.133181% 0.375028% 58.871326%
42 1.140263% 0.367946% 57.731063%
43 1.147390% 0.360819% 56.583673%
44 1.154561% 0.353648% 55.429112%
45 1.161777% 0.346432% 54.267335%
46 1.169038% 0.339171% 53.098297%
47 1.176345% 0.331864% 51.921952%
48 1.183697% 0.324512% 50.738256%
49 1.191095% 0.317114% 49.547161%
50 1.198539% 0.309670% 48.348622%
51 1.206030% 0.302179% 47.142591%
52 1.213568% 0.294641% 45.929024%
53 1.221153% 0.287056% 44.707871%
54 1.228785% 0.279424% 43.479086%
55 1.236465% 0.271744% 42.242622%
56 1.244193% 0.264016% 40.998429%
57 1.251969% 0.256240% 39.746460%
58 1.259794% 0.248415% 38.486667%
59 1.267667% 0.240542% 37.218999%
60 1.275590% 0.232619% 35.943409%
61 1.283563% 0.224646% 34.659846%
62 1.291585% 0.216624% 33.368261%
63 1.299657% 0.208552% 32.068604%
64 1.307780% 0.200429% 30.760824%
65 1.315954% 0.192255% 29.444870%
66 1.324179% 0.184030% 28.120691%
67 1.332455% 0.175754% 26.788237%
68 1.340783% 0.167426% 25.477454%
69 1.349162% 0.159047% 24.098292%
70 1.357595% 0.150614% 22.740697%
71 1.366080% 0.142129% 21.374618%
72 1.374618% 0.133591% 20.000000%
Initials: PC JR
-------- ------------
Lessor Lessee
- - ----------
* The Principal, Interest and Outstanding Principal Balance as of any Rent
Payment Date shall be equal to the Capitalized Lessor's Cost of such unit
multiplied by the appropriate percentage derived from the above table.
<PAGE>
ANNEX F
TO
SCHEDULE NO. F-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
RETURN PROVISIONS: Upon the expiration or any termination of the Term of this
Schedule provided that Lessee has elected not to exercise its extension option
or its purchase option pursuant to Section 9 of the Lease, Lessee shall, at its
expense
(A) (i) Perform any testing and repairs required to place the Equipment
in the same condition and appearance as when received by Lessee
(reasonable wear and tear accepted) and in good working order for
its originally intended purpose; (ii) if deinstallation ,
disassembly or crating is required, cause the Equipment to be
deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other service person as is satisfactory to
Lessor; and (iii) return the Equipment, free and clear of all liens
and encumbrances, to a location within the continental United States
as Lessor shall direct.
(B) Until Lessee fully has complied with the requirements of Paragraph
(A) above, Lessee's Rent payment obligation and all other
obligations under the Agreement shall continue from month to month
notwithstanding any expiration or termination of the Term. Lessor
may terminate such continued leasehold interest upon ten (10) days'
notice to Lessee. In addition to these Rents, Lessor shall have all
of its other rights and remedies available as a result of this
nonperformance.
(C) At least one hundred eighty (180) days and not more than two hundred
forty (240) days prior to expiration or earlier termination of the
Lease, provide to Lessor a detailed inventory of all components of
the Equipment. The inventory should include, but not be limited to,
a listing of model, serial numbers and size description (length,
width, height, diameter) for all components comprising the
Equipment.
(D) At least one hundred eighty (180) days prior to expiration or
earlier termination of the Lease, upon receiving reasonable notice
from Lessor, provide or cause the vendor(s) or manufacturer(s) to
provide ton Lessor the following documents: (1) one set of service
manuals, blue prints, process flow diagrams and operating manuals
including replacements and/or additions thereto, such that all
documentation is completely up-to-date; and (2) one set of
documents, detailing equipment configuration, operating
requirements, maintenance records, and other technical data
concerning the set-up and operation of the Equipment, including
replacements and/or additions thereto, such that all documentation
is completely up-to-date.
(E) At least one hundred eighty (180) days prior to expiration or
earlier termination of the Lease, upon receiving reasonable notice
from Lessor, make the Equipment available for On-site operational
inspections by potential purchasers, under power , and provide
personnel, power and other requirements necessary to demonstrate
electrical, mechanical and functionality of each item of the
Equipment.
(F) At least forty-five (45) days prior to expiration or earlier
termination of the Lease, cause the manufacturer's representative(s)
or qualified equipment maintenance provider(s), acceptable to
Lessor, to perform a comprehensive physical inspection, including
testing all material and workmanship of the Equipment.. The
authorized inspector should ensure the equipment is clean and
cosmetically acceptable, and in such condition so that it mayu be
immediately installed and placed into use in a similar retail store
environment. There shall be no missing screws, bolts, fasteners,
etc. The equipment will be free from all large scratches, marks
gouges, dents, discoloration or stains. There shall be no evidence
of extreme use or overloading, i.e. bowed or sagging shelves,etc. If
during such inspection, examination and test, the authorized
inspector finds any of the material or workmanship to be defective
or the Equipment not operating within manufacturer's specifications,
then Lessee shall repair or replace such defective material and,
after corrective measures are completed, Lessee will provide for a
follow-up inspection of the Equipment by the authorized inspector as
outlined in the preceding clause.
<PAGE>
(G) Have each item of Equipment returned with an in-depth field service
report detailing said inspection as outlined in Section D of this
Annex F. The report shall certify that the Equipment has been
properly inspected, examined and tested and is operating within the
manufacturer's specifications.
(H) Properly remove all Lessee installed markings which are not
necessary for the operation, maintenance or repair of the Equipment.
(I) Ensure all Equipment and equipment operations conform to all
applicable local, state , and federal laws, health and safety
guidelines.
(J) The Equipment shall be redelivered with all component parts in good
operating condition. All components must meet or exceed the
manufacturer's minimum recommended specifications unless otherwise
specified.
(K) Provide for the deinstallation, packing, transporting, and
certifying of the Equipment to include, but not be limited to, the
following: (1) the manufacturer's representative shall de-install
all Equipment (including all wire, cable and mounting hardware) in
accordance with the specifications of the manufacturer; (2) each
item of the Equipment will be returned with a certificate supplied
by the manufacturer's representative qualifying the Equipment to be
in good condition and (where applicable) to be eligible for the
manufacturer's maintenance plan; the certificate of eligibility
shall be transferable to another operator of the Equipment; (3) the
Equipment shall be packed properly and in accordance with the
manufacturer's recommendations; and (4) Lessee shall transport the
Equipment in a manner consistent with the manufacturer's
recommendations and practices.
(L) Upon sale of the Equipment to a third party, provide transportation
to any locations anywhere in the continental United Stated selected
by Lessor.
(M) Obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment
and Lessor shall be named as the loss payee on all such policies of
insurance.
Initials: PC JR
-------- ------------
Lessor Lessee
<PAGE>
STATE OF_________________________
COUNTY OF_______________________
AFFIDAVIT OF OWNERSHIP
The undersigned, being duly sworn according to law, upon his oath deposes and
says:
I am the Chief Executive Officer of WESTERN BEEF, INC. ("Lessee") and I am
authorized to make this affidavit on behalf of Lessee.
As of the date of this Affidavit, Lessee has good and marketable title to all of
the Equipment (as such term is defined in that certain Master Lease Agreement
dated as of December 29, 1997, between The Fifth Third Leasing Company
("Lessor"), as lessor, and Lessee, as Lessee), free and clear of all liens,
claims, security interests and encumbrances, except for the liens granted in
favor of Lessor under the aforesaid Master Lease Agreement.
Signed and sealed as of the 30th day of December, 1997
/s/ Peter Castellana, Jr
- - ---------------------------------------------
Name: Peter Castellana, Jr
----------------------------------------
Title: Chief Executive Officer
- - ---------------------------------------------
Notary Public
SEAL
My Commission Expires:___________________,1997
<PAGE>
EQUIPMENT SCHEDULE
SCHEDULE NO. G-1
DATED THIS 29TH DAY OF December, 1997
TO MASTER LEASE AGREEMENT DATED AS OF December 29, 1997
Lessor & Mailing Address: Lessee & Mailing Address
GENERAL ELECTRIC CAPITAL CORPORATION WESTERN BEEF, INC.
4 North Park Drive 47-05 Metropolitan Avenue
Suite 500 Ridgewood, NY 113;85
Hunt Valley, Maryland 21030
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement,
constitutes a separate instrument of lease.
A. Equipment
Pursuant to the terms of the Lease, Lessor agrees to acquire and lease to Lessee
the Equipment listed on Annex A attached hereto and made a part hereof.
B. Financial Terms:
1. Capitalized Lessor's Cost: $753, 280.83
2. Daily Lease Rate Factor: .050273633%
3. Basic Term: Thirty-six (36) months
4. Basic Term Commencement Date: January 1, 1998
5. Renewal Term: Three twelve (12) month terms
This Lease made the 1st day of Nov. 1991, between
FOREST ASSOCIATES
hereinafter referred to as LANDLORD, and
P.M.C. SUPERMARKET, INC. A DIVISION OF P.S.L. FOOD MARKET, INC.
D/B/A Western Beef Forest Ave. Inc.
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant
hereby hires and takes from the Landlord approximately 15,000 sq. ft.
in the building known as 2295 FOREST AVE. STATEN ISLAND. N.Y.
to be used and occupied by the Tenant
AS A RETAIL SUPERMARKET
and for no other purpose, for a term to commence on NOVEMBER 1 1991, and to end
on OCTOBER 31, 2001, unless sooner terminated as hereinafter provided, at the
ANNUAL RENT of One Hundred Fifty One Thousand Eight Hundred Seventy Five Dollars
(151,875.) with an annual increase of 5% based on $9406.26, which is the
original monthly rent.
all payable in equal monthly installments in advance on the first day of each
and every calendar month during said term, except the first installment, which
shall be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
REPAIRS
ORDINANCES
AND
VIOLATIONS
ENTRY
INDEMNIFY
LANDLORD
SECOND.--That, throughout said term the Tenant will take good care of the
demised premises, fixtures and appurtenances, and all alterations, additions and
improvements to either; make all repairs in and about the same necessary to
preserve them in good order and condition, which repairs shall be, in quality
and class, equal to the original work; promptly pay the expense of such repairs;
suffer no waste or injury; give prompt notice to the Landlord of any fire that
may occur; execute and comply with all laws, rules, orders, ordinances and
regulations at any time issued or in force (except those requiring structural
alterations), applicable to the demised premises or to the Tenant's occupation
thereof, of the Federal, State and Local Governments, and of each and every
department, bureau and official thereof, and of the New York Board of Fire
Underwriters; permit at all times during usual business hours, the Landlord and
representatives of the Landlord to enter the demised premises for the purpose of
inspection, and to exhibit them for purposes of sale or rental; suffer the
Landlord to make repairs and improvements to all parts of the building, and to
comply with all orders and requirements of governmental authority applicable to
said building or to any occupation thereof; suffer the Landlord to erect, use,
maintain, repair and replace pipes and conduits in the demised premises and to
the floors above and below; forever indemnify and save harmless the Landlord for
and against any and all liability, penalties, damages, expenses and judgments
arising from injury during said term to person or property of any nature,
occasioned wholly or in part by any act or acts, omission or omissions of the
Tenant, or of the employees, guests, agents, assigns or undertenants of the
Tenant and also for any matter or thing growing out of the occupation of the
demised premises or of the streets, sidewalks or vaults adjacent thereto;
permit, during the six months next prior to the expiration of the term the usual
notice to "To Let" to be placed and to remain unmolested in a conspicuous place
upon the exterior of the demised premises; repair, at or before the end of the
term, all injury done by the installation or removal of furniture and property;
and at the end of the term, to quit and surrender the demised premises with all
alterations, additions and improvements in good order and condition.
MOVING
INJURY
SURRENDER
NEGATIVE
COVENANTS
OBSTRUCTION
SIGNS
AIR
CONDITIONING
THIRD.--That the Tenant will not disfigure or deface any part of the building,
or suffer the same to be done, except so far as may be necessary to affix such
trade fixtures as are herein consented to by the Landlord; the Tenant will not
obstruct, or permit the obstruction of the street or the sidewalk adjacent
thereto; will not do anything, or suffer anything to be done upon the demised
premises which will increase the rate of fire insurance upon the building or any
of its contents, or be liable to cause structure injury to said building; will
not permit the accumulation of waste or refuse matter, and will not, without the
written consent of the Landlord first obtained in each case, either sell,
assign, mortgage or transfer this lease, underlet the demised premises or any
part thereof, permit the same or any part thereof to be occupied by anybody
other than the Tenant and the Tenant's employees, make any alterations in the
demised premises, use the demised premises or any part thereof for any purpose
other than the one first above stipulated, or for any purpose deemed extra
hazardous on account of fire risk, nor in violation of any law or ordinance.
That the Tenant will not obstruct or permit the obstruction of the light, halls,
stairway or entrances to the building, and will not erect or inscribe any sign,
signals or advertisements unless and until the style and location thereof have
been approved by the Landlord; and if any be erected or inscribed without such
approval, the Landlord may remove the same. No water cooler, air conditioning
unit or system or other apparatus shall be installed or used without the prior
written consent of Landlord.
IT IS MUTUALLY COVENANTED AND AGREED, THAT
FIRE CLAUSE
FOURTH.--If the demised premises shall be partially damaged by fire or other
cause without the fault or neglect of Tenant, Tenant's servants, employees,
agents, visitors or licensees, the damages shall be repaired by and at the
expense of Landlord and the rent until such repairs shall be made shall be
apportioned according to the part of the demised premises which is usable by
Tenant. But if such partial damage is due to the fault or neglect of Tenant,
Tenant's servants, employees, agents, visitors or licensees, without prejudice
to any other rights and remedies of Landlord and without prejudice to the rights
of subrogation of Landlord's insurer, the damages shall be repaired by Landlord
but there shall be no apportionment or abatement of rent. No penalty shall
accrue for reasonable delay which may arise by reason of adjustment of insurance
on the part of the Landlord and/or Tenant, and for reasonable delay on account
of "labor troubles," or any other cause beyond Landlord's control. If the
demised premises are totally damaged or are rendered wholly untenantable by fire
or other cause, and if Landlord shall decide not to restore or not to rebuild
the same, or if the building shall be so damaged that Landlord shall decide to
demolish it or to rebuild it, then or in any of such events Landlord may, within
ninety (90) days after such fire or other cause, give Tenant a notice in writing
of such decision, which notice shall be given as in Paragraph Twelve hereof
provided, and thereupon 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
demised 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 sentence immediately preceding. Tenant's
liability for rent shall cease as of the day following the casualty. Tenant
hereby expressly waives the provisions of Section 227 of the Real Property Law
and agrees that the foregoing provisions of this Article shall govern and
control in lieu thereof. If the damage or destruction be due to the fault of
neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
EMINENT DOMAIN
FIFTH.--If the whole or any part of the premises hereby demised shall be taken
or condemned by any competent authority for any public use or purpose then the
term hereby granted shall cease from the time when possession of the part so
taken shall be required for such public purpose and without apportionment of
award, the Tenant hereby assigning to the Landlord all right and claim to any
such award, the current rent, however, in such case to be apportioned.
LEASE NOT
IN EFFECT
DEFAULTS
TEN DAY
NOTICE
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated a
bankrupt, or make a "general assignment," or take the benefit of any insolvent
act, or if a Receiver or Trustee be appointed for the Tenant's property, or if
this lease or the estate of the Tenant hereunder be transferred or pass to or
devolve upon any other person or corporation, or if the Tenant shall default in
the performance of any agreement by the Tenant contained in any other lease to
the Tenant by the Landlord or by any corporation of which an officer of the
Landlord is a Director, this lease shall thereby, at the option of the Landlord,
be terminated and in that case, neither the Tenant nor anybody claiming under
the Tenant shall be entitled to go into possession of the demised premises. If
after the commencement of the term, any of the events mentioned above in this
subdivision shall occur, or if Tenant shall make default in fulfilling any of
the covenants of this lease, other than the covenants for the payment of rent or
"additional rent" or if the demised premises become vacant or deserted, the
Landlord may give to the Tenant ten days' notice of intention to end the term of
this lease, and thereupon at the expiration of said ten days' (if said condition
which was the basis of said notice shall continue to exist) the term under this
lease shall expire as fully and completely as if that day were the date herein
definitely fixed for the expiration of the term and the Tenant will then quit
and surrender the demised premises to the Landlord, but the Tenant shall remain
liable as hereinafter provided.
RE-POSSESSION
BY LANDLORD
RE-LETTING
WAIVER BY TENANT
If the Tenant shall make default in the payment of the rent reserved hereunder,
or any item of "additional rent" herein mentioned, or any part of either or in
making any other payment herein provided for, or if the notice last above
provided for shall have been given and if the condition which was the basis of
said notice shall exist at the expiration of said ten day's period, the Landlord
may immediately, or at any time thereafter, re-enter the demised premises and
remove all persons and all or any property therefrom, either by summary
dispossess proceedings, or by any suitable action or proceeding at law, or by
force or otherwise, without being liable to indictment, prosecution or damages
therefor, and re-possess and enjoy said premises together with all additions,
alterations and improvements. In any such case or in the event that this lease
be "terminated" before the commencement of the term, as above provided, the
Landlord may either re-let the demised premises or any part or parts thereof for
the Landlord's own account, or may, at the Landlord's option, re-let the demised
premises or any part or parts thereof as the agent of the Tenant, and receive
the rents therefor, applying the same first to the payment of such expenses as
the Landlord may have incurred, and then to the fulfillment of the covenants of
the Tenant herein, and the balance, if any, at the expiration of the term first
above provided for, shall be paid to the Tenant. Landlord may rent the premises
for a term extending beyond the term hereby granted without releasing Tenant
from any liability. In the event that the term of this lease shall expire as
above in this subdivision "Sixth" provided, or terminate by summary proceedings
or otherwise, and if the Landlord shall not re-let the demised premises for the
Landlord's own account, then, whether or not the premises be re-let, the Tenant
shall remain liable for, and the Tenant hereby agrees to pay to the Landlord,
until the time when this lease would have expired but for such termination or
expiration, the equivalent of the amount of all of the rent and "additional
rent" reserved herein, less the avails of reletting, if any, and the same shall
be due and payable by the Tenant to the Landlord on the several rent days above
specified, that is, upon each of such rent days the Tenant shall pay to the
Landlord the amount of deficiency then existing. The Tenant hereby expressly
waives any and all right of redemption in case the Tenant shall be dispossessed
by judgment or warrant of any court or judge, and the Tenant waives and will
waive all right to trial by jury in any summary proceedings hereafter instituted
by the Landlord against the Tenant in respect to the demised premises. The words
"re-enter" and "re-entry" as used in this lease are not restricted to their
technical legal meaning.
REMEDIES ARE
CUMULATIVE
In the event of a breach or threatened breach by the Tenant of any of the
covenants or provisions hereof, the 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.
LANDLORD
MAY
PERFORM
ADDITIONAL
RENT
SEVENTH.--If the Tenant shall make default in the performance of any covenant
herein contained, the Landlord may immediately, or at any time thereafter,
without notice, perform the same for the account of the Tenant. If a notice of
mechanic's lien be filed against the demised premises or against premises of
which the demised premises are part, for, or purporting to be for, Tenant shall
fail to take such action as shall cause such lien to be discharged within
fifteen days after the filing of such notice, the Landlord may pay the amount of
such lien or discharge the same by deposit or by bonding proceedings, and in the
event of such deposit or bonding proceedings, the Landlord may require the
lienor to prosecute an appropriate action to enforce the lienor's claim. In such
case, the Landlord may pay any judgment recovered on such claim. Any amount paid
or expense incurred by the Landlord as in this subdivision of this lease
provided, and any amount as to which the Tenant shall at any time be in default
for or in respect to the use of water, electric current or sprinkler supervisory
service, and any expense incurred or sum of money paid by the Landlord by reason
of the failure of the Tenant to comply with any provision hereof, or in
defending any such action, shall be deemed to be "additional rent" for the
demised premises, and shall be due and payable by the Tenant to the Landlord on
the first day of the next following month, or, at the option of the Landlord, on
the first day of any succeeding month. The receipt by the Landlord of any
installment of the regular stipulated rent hereunder or any of said "additional
rent" shall not be a waiver of any other "additional rent" then due.
AS TO
WAIVERS
EIGHTH.--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 herein 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 hereof no
further assignment shall be made without express consent in writing by the
Landlord.
COLLECTION
OF RENT
FROM OTHERS
NINTH.--If this lease be assigned, or if the demised premises or any part
thereof be underlet or occupied by anybody other than the Tenant the Landlord
may collect rent from the assignee, under-tenant or occupant, and apply the net
amount collected to the rent herein reserved, and no such collection shall be
deemed a waiver of the covenant herein against assignment and underletting, or
the acceptance of the assignee, under-tenant or occupant as tenant, or a release
of the Tenant from the further performance by the Tenant of the covenants herein
contained on the part of the Tenant.
MORTGAGES
TENTH.--This lease 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. 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 delivery any such instrument or instruments for the
Tenant.
IMPROVEMENTS
ELEVENTH.--All improvements made by the Tenant to or upon the demised premises,
except said trade fixtures, shall when made, at once be deemed to be attached to
the freehold, and become the property of the Landlord, and at the end or other
expiration of the term, shall be surrendered to the Landlord in as good order
and condition as they were when installed, reasonable wear and damages by the
elements excepted.
NOTICES
TWELFTH.--Any notice or demand which under the terms of this lease or under any
statute must or may be given or made by the parties hereto shall be in writing
and shall be given or made by mailing the same by certified or registered mail
addressed to the respective parties at the addresses set forth in this lease.
NO LIABILITY
THIRTEENTH.--The Landlord shall not be liable for any failure of water supply or
electrical current, sprinkler damage, or failure or sprinkler service nor for
injury or damage to person or property caused by the elements or by other
tenants or persons in said building, or resulting from steam, gas, electricity,
water, rain or snow, which may leak or flow from any part of said buildings, or
from the pipes, appliances or plumbing works of the same, or from the street or
sub-surface, or from any other place, nor for interference with light or other
incorporeal hereditaments by anybody other than the Landlord, or caused by
operations by or for a governmental authority in construction of any public or
quasi-public work, neither shall the Landlord be liable for any latent defect in
the building.
NO
ABATEMENT
FOURTEENTH.--No diminution or abatement of rent, or other compensation shall be
claimed or allowed for inconvenience or discomfort arising from the making of
repairs or improvements to the building or to its appliance, nor for any space
taken to comply with any law, ordinance or order of a governmental authority. In
respect to the various "services," if any, herein expressly or impliedly agreed
to be furnished by the Landlord to the Tenant, it is agreed that there shall be
no diminution or abatement of the rent, or any other compensation, for
interruption or curtailment of such "service" when such interruption or
curtailment shall be due to accident, alterations or repairs desirable or
necessary to be made or to inability to difficulty in securing supplies or labor
for the maintenance of such "service" or to some other cause, not gross
negligence on the part of the Landlord. No such interruption or curtailment of
any such "service" shall be deemed a constructive eviction. The Landlord shall
not be required to furnish, and the Tenant shall not be entitled to receive, any
of such "services" during any period wherein the Tenant shall be in default in
respect to the payment of rent. Neither shall there be any abatement or
diminution of rent because of making of repairs, improvements or decorations to
the demised premises after the data above fixed for the commencement of the
term, it being understood that rent shall, in any event, commence to run at such
date so above fixed.
RULES, ETC.
FIFTEENTH.--The Landlord may prescribe and regulate the placing of safes,
machinery, quantities of merchandise and other things. The Landlord may also
prescribe and regulate which elevator and entrances shall be used by the
Tenant's employees, and for the Tenant's shipping. The Landlord may make such
other and further rules and regulations as, in the Landlord's judgment, may from
time to time be needful for the safety, care or cleanliness of the building, and
for the preservation of good order therein. The Tenant and the employees and
agents of the Tenant will observe and conform to all such rules and regulations.
SHORING OF
WALLS
SIXTEENTH.--In the event that an excavation shall be made for building or other
purposes upon land adjacent to the demised premises or shall be contemplated to
be made, the Tenant shall afford to the person or persons causing or to cause
such excavation, license to enter upon the demised premises for the purpose of
doing such work as said person or persons shall deem to be necessary to preserve
the wall or walls, structure or structures upon the demised premises from injury
and to support the same by proper foundations.
VAULT SPACE
SEVENTEENTH.--No vaults or space not within the property line of the building
are leased hereunder. Landlord makes no representation as to the location of the
property line of the building. Such vaults or space as Tenant may be permitted
to use or occupy are to be used or occupied under a revocable license and if
such license be revoked by the Landlord as to the use of part or all of the
vaults or space Landlord shall not be subject to any liability; Tenant shall not
be entitled to any compensation or reduction in rent nor shall this be deemed
constructive or actual eviction. Any tax, fee or charge of municipal or other
authorities for such vaults or space shall be paid by the Tenant for the period
of the Tenant's use or occupancy thereof.
ENTRY
EIGHTEENTH.--That during seven months prior to the expiration of the term hereby
granted, applicants shall be admitted at all reasonable hours of the day to view
the premises until rented; and the Landlord and the Landlord's agents shall be
permitted at any time during the term to visit and examine them at any
reasonable hour of the day, and workmen may enter at any time, when authorized
by the Landlord or the Landlord's agents, to make or facilitate repairs in any
part of the building; and if the said Tenant shall not be personally present to
open and permit an entry into said premises, at any time, when for any reason
and without rendering the Landlord or such agents liable to any claim or cause
of action for damages by reason thereof (if during such entry the Landlord shall
accord reasonable care to the Tenant's property) and without in any manner
affecting the obligations and covenants of this lease; it is, however, expressly
understood that the right and authority hereby reserved, does not impose, nor
does the Landlord assume, by reason thereof, any responsibility or liability
whatsoever for the care or supervision of said premises, or any of the pipes,
fixtures, appliances or appurtenances therein contained or therewith in any
manner connected.
NO REPRESENTATIONS
NINETEENTH.--The Landlord has made no representations or promises in respect to
said building or to the demised premises except those contained herein, and
those, if any, contained in some written communication to the Tenant, signed by
the Landlord. This instrument may not be changed, modified, discharged or
terminated orally.
ATTORNEY'S
FEES
TWENTIETH.--If the Tenant shall at any time be in default hereunder, and if the
Landlord shall institute an action or summary proceeding against the Tenant
based upon such default, 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. Also so long as the Tenant shall be
a tenant hereunder the amount of such expenses shall be deemed to be "additional
rent" hereunder and shall be due from the Tenant to the Landlord on the first
day of the month following the incurring of such respective expenses.
POSSESSION
TWENTY-FIRST.--Landlord shall not be liable for failure to give possession of
the premises upon commencement date by reason of the fact that premises are not
ready for occupancy, or due to a prior Tenant wrongfully holding over or any
other person wrongfully in possession or for any other reason: in such event the
rent shall not commence until possession is given or is available, but the term
herein shall not be extended.
THE TENANT FURTHER COVENANTS:
IF A FIRST
FLOOR
TWENTY-SECOND.--If the demised premises or any part thereof consist of a store,
or of a first floor, or of any part thereof, the Tenant will keep the sidewalk
and curb in front thereof clean at all times and free from snow and ice, and
will keep insured in favor of the Landlord, all plate glass therein and furnish
the Landlord with policies of insurance covering the same.
INCREASED
FIRE
INSURANCE
RATE
TWENTY-THIRD.--If by reason of the conduct upon the demised premises of a
business not herein permitted, or if by reason of the improper or careless
conduct of any business upon or use of the demised premises, the fire insurance
rate shall at any time be higher than it otherwise would be, then the Tenant
will reimburse the Landlord, as additional rent hereunder, for that part of all
fire insurance premiums hereafter paid out by the Landlord which shall have been
charged because of the conduct of such business not so permitted, or because of
the improper or careless conduct of any business upon or use of the demised
premises, and will make such reimbursement upon the first day of the month
following such outlay by the Landlord; but this covenant shall not apply to a
premium for any period beyond the expiration date of this lease, first above
specified. In any action or proceeding wherein the Landlord and the Tenant are
parties, a schedule or "make up" of rate for the building on the demised
premises, purporting to have been issued by New York Fire Insurance Exchange, or
other body making fire insurance rates for the demised premises, shall be prima
facie evidence of the facts therein stated and of the several items and charges
included in the fire insurance rate then applicable to the demised premises.
WATER RENT
SEWER
TWENTY-FOURTH.--If a separate water meter be installed for the demised premises,
or any part thereof, the Tenant will keep the same in repair and pay the charges
made by the municipality or water supply company for or in respect to the
consumption of water, as and when bills therefor are rendered. If the demised
premises, or any part thereof, be supplied with water through a meter which
supplies other premises, the Tenant will pay to the Landlord, as and when bills
are rendered therefor, the Tenant's proportionate part of all charges which the
municipality or water supply company shall made for all water consumed through
said meter, as indicated by said meter. Such proportionate part shall be fixed
by apportioning the respective charge according to floor area against all of the
rentable floor area in the building (exclusive of the basement) which shall have
been occupied during the period of the respective charges, taking into account
the period that each part of such area was occupied. Tenant agrees to pay as
additional rent the Tenant's proportionate part, determined as aforesaid, of the
sewer rent or charge imposed or assessed upon the building of which the premises
are a part.
ELECTRIC
CURRENT
TWENTY-FIFTH.--That the Tenant will purchase from the Landlord, if the Landlord
shall so desire, all electric current that the Tenant requires at the demised
premises and will pay the Landlord for the same, as the amount of consumption
shall be indicated by the meter furnished therefor. The price for said current
shall be the same as that charged for consumption similar to that of the Tenant
by the company supplying electricity in the same community. Payments shall be
due as and when bills shall be rendered. The Tenant shall comply with like
rules, regulations and contract provisions as those prescribed by said company
for a consumption similar to that of the Tenant.
SPRINKLER
SYSTEM
TWENTY-SIXTH.--If there now is or shall be installed in said building a
"sprinkler system" the Tenant agrees to keep the appliances thereto in the
demised premises in repair and good working condition, and if the New York Board
of Fire Underwriters or the New York Fire Insurance Exchange or any bureau,
department of official of the State or local government requires or recommends
that any changes, modifications, alterations or additional sprinkler heads or
other equipment be made or supplied by reason of the Tenant's business, or the
location of partitions, trade fixtures, or other contents of the demised
premises, or if such changes, modifications, alterations, additional sprinkler
heads or other equipment in the demised premises are necessary to prevent the
imposition of a penalty or charge against the full allowance for a sprinkler
system in the fire insurance rate as fixed by said Exchange, or by any Fire
Insurance Company, the Tenant will at the Tenant's own expense, promptly made
and supply such changes, modifications, alterations, additional sprinkler heads
or other equipment. As additional rent hereunder the Tenant will pay to the
Landlord, annually in advance, throughout the term $ toward the contract price
for sprinkler supervisory service.
SECURITY
TWENTY-SEVENTH.--The sum of Dollars is deposited by the Tenant herein with the
Landlord herein as security for the faithful performance of all the covenants
and conditions of the lease by the said Tenant. If the Tenant faithfully
performs all the covenants and conditions on his part to be performed, then the
sum deposited shall be returned to said Tenant.
NUISANCE
TWENTY-EIGHTH.--This lease is granted and accepted on the especially understood
and agreed condition that the Tenant will conduct his business ins such a
manner, both as regards noise and kindred nuisances, as will in no wise
interfere with, annoy, or disturb any other tenants, in the conduct of their
several businesses, or the Landlord in the management of the building; under
penalty of forfeiture of this lease and consequential damages.
BROKERS
COMMISSIONS
TWENTY-NINTH.--The Landlord hereby recognizes as the broker who negotiated and
consummated this lease with the Tenant herein, and agrees that if, as, and when
the Tenant exercises the option, if any, contained herein to renew this lease,
or fails to exercise the option, if any, contained therein to cancel this lease,
the Landlord will pay to said broker a further commission in accordance with the
rules and commission rates of the Real Estate Board in the community. A sale,
transfer, or other disposition of the Landlord's interest in said lease shall
not operate to defeat the Landlord's obligation to pay the said commission to
the said broker. The Tenant herein hereby represents to the Landlord that the
said broker is the sole and only broker who negotiated and consummated this
lease with the Tenant.
WINDOW
CLEANING
THIRTIETH.--The Tenant agrees that it will not require, permit, suffer, nor
allow the cleaning of any windows, or windows, in the demised premises from the
outside (within the meaning of Section 202 of the Labor Law) unless the
equipment and safety devices required by law, ordinance, regulation or rule,
including, without limitation, Section 202 of the New York Labor Law, are
provided and used, and unless the rules, or any supplemental rules of the
Industrial Board of the State of New York are fully completed with; and the
Tenant hereby agrees to indemnify the Landlord, Owner, Agent, Manager and/or
Superintendent, as a result of the Tenant's requiring, permitting, suffering, or
allowing any window, or windows in the demised premises to be cleaned from the
outside in violation of the requirements of the aforesaid laws, ordinances,
regulations and/or rules.
VALIDITY
THIRTY-FIRST.--The invalidity or unenforceability of any provision of this lease
shall in no way affect the validity or enforceability of any other provision
hereof.
EXECUTION
& DELIVERY
OF LEASE
THIRTY-SECOND.--In order to avoid delay, this lease has been prepared and
submitted to the Tenant for signature with the understanding that it shall not
bind the Landlord unless and until it is executed and delivered by the Landlord.
EXTERIOR OF
PREMISES
THIRTY-THIRD.--The Tenant will keep clean and polished all metal, trim, marble
and stonework which are a part of the exterior of the premises, using such
materials and methods as the Landlord may direct, and if the Tenant shall fail
to comply with the provisions of this paragraph, the Landlord may cause such
work to be done at the expense of the Tenant.
PLATE GLASS
THIRTY-FOURTH.--The Landlord shall replace at the expense of the Tenant any and
all broken glass in the skylights, doors and walls in and about the demised
premises. The Landlord may insure and keep insured all plate glass in the
skylights, doors and walls in the demised premises, for and in the name of the
Landlord and bills for the premiums therefor shall be rendered by the Landlord
to the Tenant at such times as the Landlord may elect, and shall be due from and
payable by the Tenant when rendered, and the amount thereof shall be deemed to
be, and shall be paid as, additional rent.
WAR
EMERGENCY
THIRTY-FIFTH.--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 nowise be affected, impaired or excused because Landlord
is unable 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
repairs, additions, alterations or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of governmental preemption in connection with a
National Emergency declared by the President of the United States or in
connection with any rule, order or regulation of any department or subdivision
thereof of any government agency or by reason of the conditions of supply and
demand which have been or are affected by war or other emergency.
THE LANDLORD COVENANTS
QUIET
POSSESSION
FIRST.--That if and so long as the Tenant pays the rent and "additional rent"
reserved hereby, and performs and observes the covenants and provisions hereof,
the Tenant shall quietly enjoy the demised premises, subject, however, to the
terms of this lease, and to the mortgages above mentioned, provided however,
that this covenant shall be conditioned upon the retention of title to the
premises by Landlord.
ELEVATOR
HEAT
SECOND.--Subject to the provisions of Paragraph "Fourteenth" above the Landlord
will furnish the following respective services: (a) Elevator service, if the
building shall contain an elevator or elevators, on all days except Sundays and
holidays, from A.M. to P.M. on Saturdays from A.M. to P.M.: (b) Heat, during the
same hours on the same days in the cold season in each year.
THIS IS A TRIPLE NET LEASE.
And it is mutually understood and agreed that the covenants and agreements
contained in the within lease shall be binding upon the parties hereto and upon
their respective successors, heirs, executors and administrators.
In Witness Whereof, the Landlord and Tenant have respectively signed and sealed
these presents th day and year first above written.
/s/ Peter Castellana Jr
Landlord
IN PRESENCE OF:
/s/ Frank Castellana
Tenant
State of New York, County of ss:
On the day of 19 , before me personally came
, to me known, who, being by me duly sworn, did depose and say that he resides
at ; that he is of , the corporation described in and which executed the within
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
State of New York, County of ss:
On the day of 19 , before me personally came
, to me known, who, being by me duly sworn, did depose and say that he resides
at ; that he is of , the corporation described in and which executed the within
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
State of New York, County of ss:
On the 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 instrument, and duly acknowledged that he executed the same.
State of New York, County of ss:
On the day of 19, , before me personally came
, subscribing witness to the foregoing instrument, with whom I am personally
acquainted, who, being by me duly sworn, did depose and say, that he resided, at
the time of the execution of said instrument, and still resides, in that he is
and then was acquainted with , and knew to be the individual described in and
who executed the foregoing instrument; and that he, said subscribing witness,
was present and saw execute the same; and that he, said witness, thereupon at
the same time subscribed his name as witness thereto.
GUARANTY
In consideration of the letting of the premises within mentioned to the Tenant
within named, and of the sum of One Dollar, to the undersigned in hand paid by
the Landlord within named, the undersigned hereby guarantees to the Landlord and
to the heirs, successors and/or assigns of the Landlord, the payment by the
Tenant of the rent, within provided for, and the performance by the Tenant of
all of the provisions of the within lease. Notice of all defaults is waived, and
consent is hereby given to all extensions of time that any Landlord may grant.
Dated, 19
L.S.
STATE OF COUNTY OF ss:
On this day of , 19 , before me personally appeared
to me known and known to me to be the individual described in and who executed
the foregoing instrument, and duly acknowledged to me that he executed the same.
STORE LEASE
The Landlord and the Tenant agree to lease the Rental Space for the Term and at
the Rent stated as follows: (The words Landlord and Tenant include all landlords
and all tenants under this lease.)
Landlord: 130-35 Merrick Boulevard Associates, L.P.
Address: 47-05 Metropolitan Avenue
Flushing, New York 11385
Tenant: WESTERN BEEF, MERRICK BLVD., INC..
Address: 130-35 Merrick Blvd.
Springfield Gardens, New York
Rental Space: Approximately 37,000 square feet of ground floor space
constituting the entire underroof area,
In the Building at: 130-35 Merrick Blvd., Springfield Gardens, New York,
together with abutting parking areas, the property being more particularly
described on the Queens County Assessor's Records as Section 53 Block 12494 Lots
8, 37 & 39 Volume 3.
Date of Lease: February 6, 1990
Term: 20 years, ending June 30, 2015.
Rent: The rent is payable in advance at the Offices of Landlord beginning June
1, 2015 and thereafter on the first day of each and every month in accordance
with the "Schedule of Rents" annexed hereto and made a party hereof.
Security: none
Insurance : A. Liability - Minimum $5,000,000.00-$10,000,000.00 (See P. 6A)
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B. Property/Rental (See P. 6B)
Use of Rental Space - as and for the operation of a Supermarket and no other
purpose.
1. Possession and Use
Landlord shall give possession of the Rental Space to Tenant for the Term.
Tenant shall take possession of and use the Rental Space for the purpose stated
above. Tenant may not use the Rental Space for any other purpoe without the
written consent of the Landlord.
Tenant shall not allow the Rental Space to be used for any unlawful or
hazardous purpose. Tenant is satisfied that the Rental Space is for the Use
stated. Tenant shall obtain and maintain any necessary certificate of occupancy
or other certificate permitting Tenant to use the Rental Space.
Tenant shall not use the Rental Space in any manner that results in (1) an
increase in the rate of fire or liability insurance or (2) cancellation of any
fire or liability insurance policy on the Rental Space. Tenant shall comply with
all requirements of the insurance companies insuring the Rental Space. Tenant
shall not abandon the Rental Space during the Term of this Lease or permit it to
become vacant for more than sixty (60) continuous days.
2. Delay in Giving of Possession
[This section has been intentionally deleted.]
3. No Assignment or Subletting
Tenant may not do any of the following without the Landlord's prior
written consent: (a) assign this Lease (if Tenant is a corporation, the sale of
a majority of its shares shall be treated as an assignment), (b) sublet all or
any part of the Rental Space or (c) permit any other person or business to use
the Rental Space.
4. Rent and Additional Rent
[This section has been intentionally deleted]
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5. Security
[This section has been intentionally deleted]
6. Insurance
A. Liability
Tenant shall obtain, pay for, and keep in effect for the benefit of
Landlord and Tenant, public liability insurance on the Rental Space. The
insurance company and the broker must be acceptable to the Landlord. This
coverage must be in at least the minimum amounts stated above and shall include
Landlord as a direct insured party.
Tenant shall deliver the original policy to the Landlord with proof of
payment of the first year's premiums. This shall be done not less than 15 days
before the Beginning of the Term. Tenant shall deliver a renewal policy to the
Landlord with proof of payment not less than 20 days before the expiration date
of each policy.
B. Property/Casualty/Rental
Tenant shall throughout the term of this lease, for the benefit of both
Landlord and Tenant as named insureds, maintain insurance against loss or damage
by fire, and such other risks and hazards as are insurable under present and
future standard forms of fire and extended coverage insurance policies on the
Building and all structures, appurtenances, sprinklers, boilers and on Tenant's
personal property, furniture, furnishings, and fixtures located in the demised
premises, for their respective full insurable value with Broad Extended
Occupancy Endorsement in amounts at all times sufficient to prevent Landlord or
Tenant from becoming a co-insurer under the terms of any such policies.
Tenant shall also obtain and keep in force rental insurance against loss
of rental under a rental value insurance policy covering risk of loss due to the
occurrence of any of the hazards insured against under Tenant's Fire and
Extended Insurance on the building, in an amount sufficient to prevent Landlord
from becoming a co-insurer but in any event, in an amount sufficient to pay, for
not less than one year, the rent payable under this Lease. All proceeds received
by Landlord under rent insurance policies will be credited as received against
the rent due.
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Each such policy shall provide that not less than ten days before
expiration, evidence of its renewal, or a new certificate, together with
evidence of payment of premiums for the renewal period of insurance policy, as
the case may be, shall be delivered to Landlord. In the event of any fire or
other casualty insured against by Tenant's policy, Landlord may assign to Tenant
all of the Landlord's right, title, and interest in and to the insurance
proceeds. Tenant shall accept such proceeds as full payment for any loss or
damage to its property, and shall not make any claim against Landlord for any
other sum therefor, even if the loss or damage is due to the carelessness or
negligence of Landlord or its servants, agents, or employees. If any insured
casualty occurs, Tenant shall have full authority, and shall take all necessary
measures, to file, negotiate, compromise, or adjust any loss under its policy,
subject to Landlord'[s approval which may not unreasonably be withheld.
C. On Tenant's default in obtaining or delivery any such policy or
policies or failure to pay the charges therefor, Landlord may secure or pay the
charges for any such policy or policies and charge Tenant as additional rent
therefor.
D. All policies shall state that the insurance company shall not cancel or
refuse to renew without at least 30 days written notice to the Landlord.
E. If during the term of the Lease, higher limits of insurance than those
mentioned above are appropriate, customary, and generally required for like
premises utilized for similar uses, Tenant shall, upon Landlord's request,
procure such increased limits insurance.
Insurance required hereunder shall be in companies rated AAA or better in
"Best's Insurance Guide," which shall be qualified to do business in the State
of New York.
Neither party shall be liable to the other for any business interruption
or any loss or damage to property or injury or death of persons occurring in the
Building (including all the Rental Sp), or in any manner growing out of or
connected with Tenant's use and occupation thereof, the Building or the
condition thereof, whether caused by the negligence or other fault of Landlord
or Tenant, or of their respective agents, employees, subtenants, licensees, or
assignees. The release in favor of Landlord contained herein, is in addition to,
and not in substitution for, or in dimunition of the hold harmless and
indemnification provisions provided in paragraph "8" of this Lease.
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7. Water Damage
Landlord shall not be liable for any damage or injury to any persons or
property caused by the leak of low of water from or into any part of the
Building, unless caused by its own act or omission.
8. Liability of Landlord, Tenant and Indemnity.
A. Landlord and its agents shall not 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 or Persons Within Tenant's Control by
theft or otherwise. Landlord and its agents shall not be liable for any injury
or damage to persons or property 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, sprinklers 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, unless caused by or due to the active
negligence of Landlord, its agents, or employees; nor shall Landlord or its
agents be liable for any such damage caused by other tenants or persons in the
Building or caused by operations in construction of any private, public or
quasi-public work, nor shall Landlord be liable for any latent defect in the
Demised Premises or in the Building.
B. If at any time any windows of the Demised Premises are temporarily or
permanently closed, darkened or bricked up for any reason whatsoever including
Landlord's own acts, 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 form its obligations
hereunder or constitute an
C. Tenant agrees, irrespective of whether Tenant shall be negligent, to
indemnify, defend and save harmless, Landlord and its partners, officers,
directors, contractors, agents and employees from and against any and all
liability (statutory or otherwise), claims, suits, demands, damages, judgments,
costs, fines penalties, interest and expenses (including counsel fees and
disbursements incurred in any action or proceeding), to which Landlord or any
such partners, officer, director, contractor, agent or employee may be subject
or which Landlord may suffer arising from, or in connection with, (I) any
liability or claim for any injury to, or death of, any person or person or
damage to property (including any loss of use thereof), or (ii) the use and
occupancy of the Demised Premises or from any work, installation or thing
whatsoever done or omitted (other than by Landlord or its
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<PAGE>
contractors or the agents or employees of either) in the Demised Premises during
the Term and during the period of time, if any, prior to the Commencement Date
that Tenant may have been given access to the Demised Premises, or (iii) any
default by Tenant in the performance of Tenant's obligation of Tenant or Persons
within Tenant's Control.
D. Tenant shall reimburse and compensate Landlord as additional rent
within five (5) days after rendition of a statement for all expenditures ,
costs, fees, expenses, judgments, penalties, damages, and fines sustained or
incurred by Landlord (including counsel fees and disbursements incurred in
connection with any action or proceeding) due to the operation of this Article,
or non-performance or non-compliance with or breach or provision or condition of
this Lease, or breach of any warranty or representation by Tenant made in this
Lease. If in any action or proceeding naming both Landlord and Tenant, liability
arising out of the negligence of Tenant is established, Tenant agrees (I) to
indemnify Landlord in accordance with the provisions of this Article and (ii) to
waive any right of contribution against Landlord. Reference in this Article to
Landlord shall for all purposes be deemed to include the lessor of any
Underlying Leases and each Mortgagee.
E. Tenant agrees that its sole remedy in cases where Landlord's
reasonableness in exercising its judgment or withholding its consent or approval
is applicable pursuant to a specific provision of this Lease, or any rider or
separate agreement relating to this Lease, if any, shall be those in the nature
of an injunction, declaratory judgment, or specific performance, the rights to
money damages or other remedies being hereby specified waived.
Landlord shall not be liable for injury or damage to any persons or
property unless due to the Landlord's act. Tenant is liable for any loss, injury
or damage to any person or property caused by the act or neglect of Tenant or
Tenant's employees. Tenant shall defend the Landlord from and reimburse the
landlord for all liability and costs resulting from any injury or damage due to
threat or neglect of Tenant or the Tenant's employees.
9. Acceptance of Rental Space
Tenant has inspected the Rental Space and agrees that the Rental Space is
in satisfactory condition. Tenant accepts the Rental Space "as is".
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10. Quiet Enjoyment
Landlord has the right to enter into this Lease. If Tenant complies with
this Lease, the Landlord must provide Tenant with undisturbed possession of the
Rental Space.
11. Taxes, Utilities, Securities and Services
Tenant shall arrange for any pay for all real estate taxes, assessments
and all Federal, State, or Local or Municipal levies of any kind or nature; all
heat, lighting, water and other utilities; and all costs of security or other
services required for the intended use of the Rental Space.
Tenant shall maintain and clean the demised premises at its own cost and
expense.
Landlord is not liable for any inconvenience or harm caused by any
stoppage or reduction of utilities and services nor shall such stoppage or
reduction excuse Tenant from paying Rent.
12. Tenant's Repairs, Maintenance, and Compliance
Tenant Shall:
(a) Promptly comply with all laws, orders, rules and requirements of
governmental authorities, insurance carriers, board of fire underwriters, or
similar groups.
(b) Maintain the Rental Space and all equipment, fixtures and sprinklers
in it.
(c)Make all necessary repairs to the Rental Space and all equipment,
sprinklers and fixtures in it.
(d)Maintain the Rental Space in a neat, clean, safe , and sanitary
condition, free of all garbage.
(e) Use all electric, plumbing and other facilities in the Rental Space
safely.
(f) Use no more electricity than the wiring or feeders to the Rental Space
can safely carry.
(g) Promptly replace all broker glass in the Rental Space.
(h) Do nothing to destroy, deface, damage, or remove any part of the
Rental Space.
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(i)Keep nothing in the Rental Space which is inflammable, dangerous or
explosive or which might increase the danger of fire or other casualty/
(j) Promptly notify Landlord when there are conditions which need repair.
(k) Do nothing to destroy the peace and quite of Landlord, other tenants,
or persons in the neighborhood.
(l) Avoid littering in the building or on its grounds.
Tenant shall pay any and all expenses involved in complying with the
above.
13. Landlord's Repairs and Maintenance
Landlord shall have no responsibility to:
(a) Maintain the public areas, roof and exterior walls in good condition.
(b) Make structural repairs unless these repairs are made necessary by the
act of Landlord.
(c) Make necessary replacements of the plumbing, cooling, heating and
electrical system, except when made necessary by the act of Landlord.
(d) Maintain the elevators in the Building, if any.
14. No Alterations.
Tenant may not make any changes or additions to the Rental Space without
Landlord's written consent which consent shall not be unreasonably withheld. Any
changes or additions made without landlord's written consent shall be removed by
Tenant on demand.
All changes or additions made with Landlord's written consent shall become
the property of Landlord when completed and paid for Tenant. They shall remain
as part of the Rental Space t the end of the Term. Landlord may demand that
Tenant remove any changes or additions at the end of the Term. Tenant shall
promptly pay for all costs of any permitted changes or additions. Tenant shall
not allow any mechanic's lien or other claim to be filed against the Building.
If any lien or claim is filed against the Building, Tenant shall have it
promptly removed.
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15. Signs
[This section has been intentionally deleted.]
16. Access to Rental Space
Landlord shall have access to the Rental Space on reasonable notice to
Tenant to (a) inspect the Rental Space and (b) show it to prospective buyers,
mortgage lenders, contractors or insurers.
Landlord may enter the Rental Space at any time without notice to Tenant
in case of emergency.
17. Fire and Other Casualty
Tenant shall notify the Landlord at once of any fire or casualty in the
Rental Space. Tenant is not required to pay Rent when the Rental Space is
unusable. If Tenant uses part of the Rental Space, Tenant must pay pro-rata for
the usable part.
If the Rental Space is partially damaged by fire or other casualty, Tenant
shall repair it as soon possible. This includes the damage to the Rental Space
and all fixtures installed by either Tenant or Landlord.
Either party may cancel this Lease if the Rental Space is so damaged by
fire or other casualty that it cannot be repaired within 90 days. If the parties
cannot agree, the opinion of a contractor chose by Landlord will be binding on
both parties.
This lease shall end if the Rental Space is totally destroyed. Tenant
shall pay Rent to the date of destruction.
If the fire or other casualty is caused by the act or neglect of Tenant or
Tenant's employees, Tenant shall pay for all repairs and all other damage.
18. Eminent Domain
Eminent Domain is the right of a government to lawfully condemn and take private
property for public use. Fair value must be paid for the property. The taking
occurs either by court order or by deed to the condemning party. If any part of
the Rental Space is taken by eminent domain, either party may cancel this lease
on 30 days notice to the other. Tenant shall not share in
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any payment or award to Landlord. Tenant shall have the right to file its own
claim against the condemning authority, so long as landlords rights are not
prejudiced.
19. Tenant's Certificate
At the request of the Landlord, Tenant shall sign a certificate stating
(a) this Lease has not been amended and is in effect, (b) Landlord has fully
performed all of the Landlord's agreements in this Lease, (c) Tenant has no
rights to the Rental Space except as stated in this Lease, (d) Tenant has paid
all Rent to date, and (e) Tenant has not paid Rent for more than one month in
advance. The Certificate shall also list all the property attached to the Rental
Space owned by the Tenant.
20. Violation, Eviction, Re-entry and Damages
Landlord reserves a right of re-entry which allows the Landlord to end
this Lease and re-enter the Rental Space if Tenant violates any agreement in
this Lease. This is done by eviction. Eviction is a court procedure to remove a
tenant. Eviction is stayed by filing of a complaint in court and the service of
a summons on a tenant to appear in court. Landlord may also evict Tenant for any
one of the other grounds of good cause provided by law. After a court order of
eviction and compliance with the warrant of removal, Landlord may re-enter and
take back possession of the Rental Space. If the cause for eviction is
non-payment of Rent, notice does not have to be given to Tenant because Landlord
files a complaint. If there is any other cause to evict, Landlord must give
Tenant the notice required by law before Landlord files a complaint for
eviction.
Tenant is liable for damages caused by Tenant's violation of any
agreement, in this Lease. This includes reasonable attorney's fees and costs.
After eviction Tenant shall pay the Rent for the balance of the Term or
until the Landlord re-rents the Rental Space, if sooner. If the Landlord
re-rents the Rental Space for less than the Tenant's Rent, Tenant shall pay the
difference until the end of the Term. Tenant shall not be entitled to any excess
resulting from the re-renting. Tenant shall also pay (a) all reasonable expenses
incurred by the Landlord in preparing the Rental space for re-renting and (b)
commissions paid to a broker for finding a new tenant.
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21. Bankruptcy
Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be canceled by Landlord 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: (i ) Tenant shall (a) have applied for or consented to the appointment
of a receiver, trustee, liquidator, or other custodian of Tenant or any of its
properties or assets, (b) unable to pay its debts generally s they become due or
shall have taken any other action which could result in it becoming the subject
of an insolvency or bankruptcy proceeding, (c) have made a general assignment
for the benefit of creditors, (d) have commenced a voluntary case for relief as
a debtor under the Untied States Bankruptcy Code or filed a petition to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debts,
dissolution or liquidation law or statute or an answer admitting the material
allegations of a petition filed against it in any proceeding under such law, or
(e) be adjudicated a bankrupt or insolvent, or (ii) without the acquiescence or
consent of Tenant an order, judgment or decree shall have been entered by any
court of competent jurisdiction (a) approving as properly filed a petition
seeking relief under the Untied States Bankruptcy Code or any bankruptcy,
reorganization, insolvency, adjustment of debts, dissolution or liquidation law
or statute with respect to Tenant or all or a substantial part of its properties
or assets or (b) appointing a receiver, trustee, liquidator or other custodian
or all or a substantial part of its properties or assets, and such order,
judgment or decree shall have continued unstayed and in effect for any period
claiming thorough or under Tenant or by reason of any statute or order of court
shall thereafter be entitled to possession of the Demised Premises but shall
forthwith quit and surrender the Demised Premises. If this lease shall be
assigned in accordance with its terms the provisions of this Article shall be
applicable only to the party then owning Tenant's interest in this lease.
22. No Representations by Landlord
Neither Landlord nor Landlord's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, leases, expenses
of operation or any other matter or thing affecting or related to the premises
except as herein expressly se 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, applicable zoning,
permissible
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uses, and occupancy requirements, 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 understanding and
agreements heretofore made between the parties hereto are merged in this
contract, which alone fully and completely expresses the agreement between the
Landlord and Tenant and any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of it in whole
or in part, unless such executory agreement is in writing and signed by the
party against whom enforcement of the change, modification, discharge or
abandonment is sought.
23. Notices
All notices given under this Lease must be in writing. Each party must
accept and claim the notices given by the other. Unless otherwise provided by
law, they may e given by (a) personal delivery, or (b) certified mail, return
receipt requested. Notices shall be addressed to Landlord at the address written
at the beginning of this Lease and to the Tenant at the Rental Space.
24. No Waiver
The Landlord's failure to enforce any agreement in this Lease shall not
prevent the Landlord from enforcing the agreement for any violations occurring
at a later time.
25. Survival
If any agreement in this Lease is contrary to law, the rest of the Lease
shall remain in effect.
26. End of Term
At the end of the term, Tenant shall (a) leave the Rental Space clean, (b)
remove all of Tenant's property, (c) remove all signs and restore that portion
of the Rental Space on which they were placed, (d) repair all damage caused by
moving and (e) return the Rental Space to the Landlord in the same condition as
it was at the beginning of the Term except for normal wear and tear.
If Tenant leaves any property in the Rental Space, the Landlord may (a)
dispose of it and charge Tenant for the cost of disposal (b) keep it as
abandoned property.
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27. Binding
This Lease binds Landlord and Tenant and all parties who lawfully succeed
to their rights or take their places.
28. Assignment and Subletting.
The Tenant shall have the right to assign this Lease or sublet the
Premises or any part thereof, to its parent or any affiliate, subsidiary or
related entity or any entity into which or with which Tenant is merged or
consolidated without limitation and without the consent of Landlord. Landlord
shall have the right to approve any other subtenant or assignee, which approval,
however, shall not release the Tenant from any liability under this Lease and
shall not be unreasonably withheld or delayed.
29. Interruption of Services or use.
Interruption or curtailment of any service maintained in the building or
use of the premises, caused by Force majeure (as defined in Section3 1 hereof),
shall not entitle the Tenant to any claim against the Landlord or to any
abatement in rent, and shall not constitute a constructive or partial eviction,
unless the Lessor fails to take measures as may be reasonable under the
circumstances to restore the service without undue delay.
30. Broker.
Each party represents to the other that no real estate commission is due
to any broker or agent as a result of this transaction, and each agrees to hold
the other harmless and to indemnify the other against any claims of or
liabilities to any broker based on alleged dealings with the indemnifying party.
31. Force Majeure.
As used in this Lease, the term "Force Majeure" shall mean and include
those situations beyond Landlord's control, including by way of example and not
by way of limitation, acts of God; accidents; strikes; shortages of labor,
supplies or materials; or inclement weather.
32. Non Disturbance.
Landlord will make a good faith attempt upon Tenant's request to obtain a
non-disturbance clause from the mortgage lender upon refinancing.
33. Full Agreement.
The parties have read this lease. It contains their full agreement. It may
not be changed except in writing signed by Landlord and Tenant. Both parties
hereby waive trial by jury of any matters whatsoever arising out of, under or by
virtue of this Lease.
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Signatures: Landlord and Tenant agree to the terms of this Lease by signing
below. If a party is a corporation, this Lease is signed by its proper corporate
officers and its corporate seal is affixed.
Witnessed or attested by 130-35 MERRICK BOULEVARD
ASSOCIATES, LP.
________________________ By: /s/ Michael Castellana
--------------------------------
Landlord
__________________________ WESTERN BEEF MERRICK BLVD., INC.
As to Tenant
By: /s/ Peter Castellana, Jr.
--------------------------------
Tenant
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GUARANTY OF WESTERN BEEF, INC.
(A Delaware Corporation)
FOR VALUE RECEIVED, and in consideration for, and as an inducement to Landlord
making the Lease with Tenant, Western Beef, Inc. guarantees to Landlord,
Landlord'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 without requiring any notice of non-payment, performance or
non-observance or proof or notice or demand, whereby to charge Western Beef,
Inc., all of which Western Beef, Inc. hereby expressly waives and expressly
agreed that the validity of this agreement and the obligations of the guarantor
hereunder shall in o wise be terminated, affected or impaired by reason of the
assertion by Landlord against Tenant of any of the rights or remedies reserved
to Landlord pursuant to the provisions of the Lease. Western Beef, Inc. further
covenants and agrees that this guaranty shall remain and continue in full force
and effect as to any renewal, modification or extension of the Lease and during
any period when Tenant is occupying the premises as a "statutory tenant." As a
further inducement to Landlord to make the Lease and in consideration thereof,
Landlord and Western Beef, Inc. covenant and agree that in any action or
proceeding brought by either Landlord or Western Beef, Inc. against the other on
any matters whatsoever arising out of , under or virtue of the terms of_________
or this guarantee that Landlord and Western Beef, Inc. shall and do hereby waive
trial by jury.
\WITNESS WESTERN BEEF, INC.
____________________________ BY: /s/ Peter Castellana, Jr.
-------------------------------
GUARANTOR
47-05 Metropolitan Avenue
Flushing, New York 11385
15
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SCHEDULE OF RENTS
FOR
PERIOD JULY 1, 1990 through JUNE 30, 2000
MONTHLY RENT
$13,400.00 from July 1, 1990 to June 30, 1991
$13,800.00 from July 1, 1991 to June 30, 1992
$14,200.00 from July 1, 1992 to June 30, 1993
$14,600.00 from July 1, 1993 to June 30, 1994
$15,000.00 from July 1, 1994 to June 30, 1995
$15,400.00 from July 1, 1995 to June 30, 1996
$15,800.00 from July 1, 1996 to June 30, 1997
$16,200.00 from July 1, 1997 to June 30, 1998
$16,600.00 from July 1, 1998 to June 30, 1999
$17,000.00 from July 1, 1999 to June 30, 2000
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SCHEDULE OF RENTS
FOR
PERIOD JULY 1, 2000 through JUNE 30, 2015
Beginning July 1 2000 and for the next year through June 30, 2001, the
Annual Base Kent shall be increased by the greater of either (a) five percent
(5%) of the immediately preceding year, or (b) to the then fair market rental
value of the of the Rental Space determined by a Licensed Real Estate Appraiser
selected by Landlord. Thereafter and throughout the balance of this Rental
period the Annual Base Rent shall be increased annually by the factor of five
percent (5%) above each immediately preceding year. All rent shall continue to
be paid in advance in equal monthly installments.
WITNESS
130-35 MERRICK BOULEVARD ASSOCIATES
____________________________
As to Landlord By: /s/ Michael Castellana
------------------------------------
Landlord
_____________________________ WESTERN BEEF MERRICK BLVD., INC.
As to Tenant
By: /s/ Peter Castellana, Jr.
--------------------------------
Tenant
17
PARKING LOT LEASE
The Landlord and the Tenant agree to lease the Rental Space for the Term and at
the Rent stated as follows: (The words Landlord and Tenant include all tenants
under this lease.)
Landlord: CM Boulevard Associates, L.P.
Address: 47-05 Metropolitan Avenue
Flushing, New York 11385
Tenant: WESTERN BEEF, MERRICK BLVD, Inc.
Address: 130-35 Merrick Blvd
Spring Gardens, New York
Rental Space: Approximately 22,760 square feet of vacant ground space
constituting the entire property known as 0 Merrick Blvd, Springfield Gardens,
New York, the property being more particularly described on the Queens County
Assessor's Records as Section 54 Block 12696 Lot 63 Volume 2.
Date of Lease: February 6, 1990
Term: 20 years, ending June 30, 2015
Rent: The Rent is payable in advance at the Offices of Landlord beginning July
1, 1990 and thereafter on the first day of each and every month in accordance
with the "Schedule of Rents" annexed hereto and made a part hereof.
Security: none
Insurance: A. Liability - Minimum $1,000.00 - $500,000 (See P. 6A)
B. Property/Rental - Minimum (See P. 6B)
Use of Rental Space - as and for the operation of a Parking Lot in conjunction
with Tenant's Supermarket operation at 130-135 Merrick Boulevard, Springfield
Gardens, New York and for no other purpose.
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1. Possession and Use
Landlord shall give possession of the Rental Space to Tenant for the Term.
Tenant shall take possession of and use the Rental Space for the purpose
stated above. Tenant may not use the Rental Space for any other purpose
without the written consent of the Landlord.
Tenant shall not allow the Rental Space to be used for any unlawful or
hazardous purpose. Tenant is satisfied that the Rental Space is zoned for
the Use stated. Tenant shall obtain and maintain any necessary certificate
of occupancy or other certificate permitting Tenant to use the Rental
Space.
Tenant shall not use the Rental Space in any manner that results in (1) an
increase in the rate of fire or liability insurance or (2) cancellation of
any fire or liability insurance policy on the Rental Space. Tenant shall
comply with all requirements of the insurance companies insuring the
Rental Space. Tenant shall not abandon the Rental Space during the Term of
this Lease or permit it to become vacant for more than sixty (60)
continuous days.
2. Delay in Giving of Possession
[This section has been intentionally deleted.]
3. No Assignment or Subletting
Tenant may not do any of the following without the Landlord's prior
written consent: (a) assign this Lease (if Tenant is a corporation, the
sale of a majority of its shares shall be treated as an assignment), (b)
sublet all or any part of the Rental Space or (c) permit any other person
or business to use the Rental Space.
4. Rent and Additional Rent
[This section has been intentionally deleted.]
5. Security
[This section has been intentionally deleted.]
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6. Insurance
A. Liability
Tenant shall obtain, pay for, and keep in effect for the benefit of
Landlord and Tenant, public liability insurance on the Rental Space. The
insurance company and the broker must be acceptable to Landlord. This coverage
must be in at least the minimum amounts stated above and shall include Landlord
as a direct insured party.
Tenant shall deliver the original policy to the Landlord with proof of
payment of the first year's premiums. This shall be done not less than 15 days
before the Beginning of the Term. Tenant shall deliver a renewal policy to the
Landlord with proof of payment not less than 20 days before the expiration date
of each policy.
B. Property/Casualty/Rental
Tenant shall throughout the term of this lease, for the benefit of both
Landlord and Tenant as named insureds, maintain insurance against loss or damage
by fire, and such other risks and hazards as are insurable under present and
future standard forms of fire and extended coverage insurance policies on the
Building and all structures, appurtenances, sprinklers, boilers and on Tenant's
personal property, furniture, furnishings, and fixtures located in the demised
premises, for their respective full insurable value with Broad Extended
Occupancy endorsement in amounts at all times sufficient to prevent Landlord or
Tenant from becoming a co-insurer under the terms of any such policies.
Tenant shall also obtain and keep in force rental insurance against loss
of rental under a rental value insurance policy covering risk of loss due to the
occurrence of any of the hazards insured against under Tenant's Fire and
Extended Insurance on the building, in an amount sufficient to prevent Landlord
from becoming a co-insurer but in any event, in an amount sufficient to pay, for
not less than one year, the rent payable under this Lease. All proceeds received
by Landlord under rent insurance policies will be credited as received against
the rent due.
Each such policy shall provide that not less than ten days before
expiration, evidence of its renewal, or a new certificate, together with
evidence of payment of premiums for the renewal period or insurance policy, as
the case may be, shall be delivered to Landlord. In the event of any fire or
other casualty insured against by Tenant's policy, Landlord may assign to Tenant
all of Landlord's right, title, and interest in and to the insurance proceeds.
Tenant shall accept such proceeds as full payment for
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any loss or damage to its property, and shall not make any claim against
Landlord for any other sum therefor, even if the loss or damage is due to the
carelessness or negligence of Landlord or its servants, agents, or employees. If
any insured casualty occurs, Tenant shall have full authority, and shall take
all necessary measures, to file, negotiate, compromise, or adjust any loss under
its policy, subject to Landlord's approval which may not unreasonable be
withheld.
C. On Tenant's default in obtaining or delivering any such policy or
policies or failure to pay the charges therefor, Landlord may secure or pay the
charges for any such policy or policies and charge Tenant as additional rent
therefor.
D. All policies shall state that the insurance company shall not cancel or
refuse to renew without at least 30 days written notice to the Landlord.
E. If during the term of the Lease, higher limits of insurance than those
mentioned above are appropriate, customary, and generally required for like
premises utilized for similar uses, Tenant shall, upon Landlord's request,
procure such increased limits insurance.
Insurance required hereunder shall be in companies rated AAA or better in
"Best's Insurance Guide," which shall be qualified to do business in the State
of New York.
Neither party shall be liable to the other for any business interruption
or any loss or damage to property or injury or death of persons occurring in the
Building (including all the Rental Space), or in any manner growing out of or
connected with Tenant's use and occupation thereof, the Building or the
condition thereof, whether caused by the negligence or other fault of Landlord
or Tenant, or of their respective agents, employees, subtenants, licensees, or
assignees. The release in favor of Landlord contained herein, is in addition to,
and not in substitution for, or in diminution of the hold harmless and
indemnification provisions provided in Paragraph "8" of this Lease.
7. Water Damage
Landlord shall not be liable for any damage or injury to any persons or
property caused by the leak or flow of water from or into any part of the
Premises, unless caused by its own act or omission.
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8. Liability of Landlord, Tenant and Indemnity
A. Landlord and its agents shall not 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 or Persons Within Tenant's Control by
theft or otherwise. Landlord and its agents shall not be liable for any injury
or damage to persons or property 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, sprinklers 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, unless caused by or due to the active
negligence of Landlord, its agents, or employees; nor shall Landlord or its
agents be liable for any latent defect in the Demised Premises or in the
Building
B. [This section has been intentionally deleted.]
C. Tenant agrees, irrespective of whether Tenant shall be negligent, to
indemnify, defend and save harmless, Landlord and its partners, officers,
directors, contractors, agents and employees from and against any and all
liability (statutory or otherwise), claims, suits, demands, damages, judgments,
costs, fines, penalties, interest and expenses (including counsel fees and
disbursements incurred in any action or proceeding), to which Landlord or any
such partner, officer, director, contractor, agent or employee may be subject or
which Landlord may suffer arising from, or in connection with, (i) any liability
or claim for any injury to, or death of, any person or persons or damage to
property (including any loss of use thereof), or (ii) the use and occupancy of
the Demised Premises or from any work, installation or thing whatsoever done or
omitted (other than by Landlord or its contractors or the agents or employees of
either) in the Demised Premises during the Term and during the period of time,
if any, prior to the Commencement Date that Tenant may have been given access to
the Demised Premises, or (iii) any default by Tenant in the performance of
Tenant's obligations under this Lease or any act, omission, carelessness, or
negligence of Tenant or Persons Within Tenant's Control.
D. Tenant shall reimburse and compensate Landlord as additional rent
within five (5) days after rendition of a statement for all expenditures, costs,
fees, expenses, judgments, penalties, damages, and fines sustained or incurred
by Landlord (including counsel fees and disbursements incurred in connection
5
<PAGE>
with any action or proceeding) due to the operation of this Article, or
non-performance or non-compliance with or breach or failure by Tenant to observe
any term, covenant, agreement, provision or condition of this Lease, or breach
of any warranty or representation by Tenant made in this Lease. If in any action
or proceeding naming both Landlord and Tenant, liability arising out of the
negligence of Tenant is established, Tenant agrees (i) to indemnify Landlord in
accordance with the provisions of this Article and (ii) to waive any right of
contribution against Landlord. Reference in this Article to Landlord shall for
all purposes be deemed to include the lessor of any Underlying Lease and each
Mortgage.
E. Tenant agrees that its sole remedy in cases where Landlord's
reasonableness in exercising its judgment or withholding its consent or approval
is applicable pursuant to a specific provision of this Lease, or any rider or
separate agreement relating to this Lease, if any, shall be those in the nature
of an injunction, declaratory judgment, or specific performance, the rights to
money damages or other remedies being hereby specifically waived.
Landlord shall not be liable for injury or damage to any person or
property unless due to the Landlord's act. Tenant is liable for any loss, injury
or damage to any person or property caused by the act or neglect of Tenant or
Tenant's employees. Tenant shall defend the Landlord from and reimburse the
Landlord for all liability and costs resulting from any injury or damage due to
the act or neglect of Tenant or the Tenant's employees.
9. Acceptance of Rental Space
Tenant has inspected the Rental Space and agrees that the Rental Space is
in satisfactory condition. Tenant accepts the Rental Space "as is".
10. Quite Enjoyment
Landlord has the right to enter into this Lease. If Tenant complies with
this Lease, the Landlord must provide Tenant with undisturbed possession of the
Rental Space.
11. Taxes, Utilities, Security and Services
Tenant shall arrange for and pay for all real estate taxes, assessments
and municipal levies of any kind or nature; all heat, lighting, water and other
utilities; and all costs of security or other services required for the intended
use of the Rental Space.
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Tenant shall maintain and clean the demised premises at its own cost and
expense.
Landlord is not liable for any inconvenience or harm caused by any
stoppage or reduction of utilities and services nor shall such stoppage or
reduction excuse Tenant from Paying Rent.
12. Tenant's Repairs, Maintenance, and Compliance
Tenant Shall:
(a) Promptly comply with all laws, orders, rules, and requirements of
governmental authorities, insurance carriers, board of fire underwriters, or
similar groups.
(b) Maintain the Rental Space and all equipment and fixtures in it.
(c) Make all necessary repairs to the Rental Space and all equipment and
fixtures in it.
(d) Maintain the Rental Space in a neat, clean, safe, and sanitary
condition, free of all garbage.
(e) Use all electric, plumbing and other facilites in the Rental Space
safely.
(f) Use no more electricity than the wiring or feeders to the Rental Space
can safely carry.
(g) Do nothing to destroy, deface, damage, or remove any part of the
Rental Space.
(h) Keep nothing in the Rental Space which is inflammable, dangerous or
explosive or which might increase the danger of fire or other casualty.
(i) Promptly notify Landlord when there are conditions which need repair.
(j) Do nothing to destroy the peace and quiet of Landlord, other tenants,
or persons in the neighborhood.
(k) Avoid littering in the Rental Space.
Tenant shall pay any and all expenses involved in complying with the
above.
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13. Landlord's Repairs and Maintenance
Landlord shall have no responsibility to:
(a) Maintain the paving, fencing, security or public areas.
(b) Make any paving, equipment or fixture repairs unless these repairs are
made necessary by the act of Landlord.
(c) Make necessary replacements of the pluming and electrical system,
except when made necessary by the act of Landlord.
14. No Alterations
Tenant may not make any changes or additions to the Rental Space without
Landlord's written consent which consent shall not be unreasonable withheld. Any
changes or additions made without Landlord's written consent shall be removed by
Tenant on demand.
All changes or additions made with Landlord's written consent shall become
the property of Landlord when completed and paid for by Tenant. They shall
remain as part of the Rental Space at the end of the Term. Landlord may demand
that Tenant remove any changes or additions at the end of the Term. Tenant shall
promptly pay for all costs of any permitted changes or additions. Tenant shall
not allow any mechanic's lien or other claim to be filed against the Building.
If any lien or claim is filed against the Building, Tenant shall have it
promptly removed. If any permanent or temporary structures are erected upon the
Premises, Tenant shall provide property or casualty insurance coverages thereon,
at its sole cost and expense in amounts agreeable to and with Landlord named as
a direct insured party. In such event Paragraphs 6C and D above shall be
applicable thereto.
15. Signs
[This section has been intentionally deleted.]
16 Access to Rental Space
Landlord shall have access to the Rental Space on reasonable notice to
Tenant to (a) inspect the Rental Space and (b) show it to prospective buyers,
mortgage lenders, contractors or insurers.
Landlord may show the Rental Space to rental applicants at reasonable
hours on notice to Tenant within 6 months before the end of the Term.
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Landlord may enter the Rental Space at any time without notice to Tenant
in case of emergency.
17. Fire and Other Casualty
Tenant shall notify the Landlord at once of any fire or casualty in the
Rental Space. Tenant is not required to pay Rent when the Rental Space is
unusable. If Tenant uses part of the Rental Space, Tenant must pay Rent pro-rata
for the usable part.
If the Rental Space is partially damaged by fire or other casualty, Tenant
shall repair it as soon as possible. This includes the damage to the Rental
Space and all fixtures installed by either Tenant or Landlord.
Either party may cancel this Lease if the Rental space is so damaged by
fire or other casualty that it cannot be repaired within 90 days. If the parties
cannot agree, the opinion of a contractor chosen by Landlord will be binding
both parties.
This Lease shall end if the Rental Space is totally destroyed. Tenant
shall pay Rent to the date of destruction.
If the fire or other casualty is caused by the act or neglect of Tenant or
Tenant's employees, Tenant shall pay for all repairs and all other damage.
18. Eminent Domain
Eminent Domain is the right of a government to lawfully condemn and take
private property for public use. Fair value must be paid for the property. The
taking occurs either by court order or by deed to the condemning party. If any
part of the Rental Space is taken by eminent domain, either party may cancel
this lease on 30 days notice to the other. Tenant shall not share in any payment
or award to Landlord. Tenant shall have the right to file its own claim against
the condemning authority, so long as Landlord's rights are not prejudiced.
19. Tenant's Certificate
At the request of the Landlord, Tenant shall sign a certificate stating
that (a) this Lease has not been amended and is in effect, (b) Landlord has
fully performed all of the Landlord's agreements in this Lease, (c) Tenant has
no rights to the Rental Space except as stated in this Lease, (d) Tenant has
paid all Rent to date, and (e) Tenant has not paid Rent for more
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than one month in advance. The Certificate shall also list all the property
attached to the Rental Space owned by the Tenant.
20. Violation, Eviction, Re-entry and Damages
Landlord reserves a right of re-entry which allows the Landlord to end
this Lease and re-enter the Rental Space if Tenant violates any agreement in
this Lease. This is done by eviction. Eviction is a court procedure to remove a
tenant. Eviction is started by the filing of a complaint in court and the
service of a summons on a tenant to appear in court. Landlord may also evict
Tenant for any one of the other grounds of good cause provided by law. After a
court order of eviction and compliance with the warrant of removal, Landlord may
re-enter and take back possession of the Rental Space. If the cause for eviction
is non-payment of Rent, notice does not have to be given to Tenant before
Landlord files a complaint. If there is any other cause to evict, Landlord must
give Tenant the notice required by law before Landlord files a complaint for
eviction.
Tenant is liable for all damages caused by Tenant's violation of any
agreement in this Lease. This includes reasonable attorney's fees and costs.
After eviction Tenant shall pay the Rent for the balance of the Term or
until the Landlord re-rents the Rental Space, if sooner. If the Landlord
re-rents the Rental Space for less than Tenant's Rent, Tenant shall pay the
difference until the end of the Term. Tenant shall not be entitled to any excess
resulting from the re-renting. Tenant shall also pay (a) all reasonable expenses
incurred by the Landlord in preparing the Rental Space for re-renting and (b)
commissions paid to a broker for finding a new tenant.
21. Bankruptcy
Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be canceled by Landlord 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: (i) Tenant shall (a) have applied for or consented to the appointment of
a receiver, trustee, liquidator, or other custodian of Tenant or any of its
properties or assets, (b) be unable to pay its debts generally as they become
due or shall have taken any other action which could result in it becoming the
subject of an insolvency or bankruptcy proceeding, (c) have made a general
assignment for the benefit of the creditors, (d) have commenced a voluntary case
for relief as a debtor under the United States Bankruptcy Code or filed a
petition to take advantage of any
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bankruptcy, reorganization, insolvency, readjustment of debts, dissolution or
liquidation law or statute or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law, or (e) be
adjudicated a bankrupt or insolvent, or (ii) without the acquiescence or consent
of Tenant an order, judgment or decree shall have been entered by any court of
competent jurisdiction (a) approving as properly filed a petition seeking relief
under the United States Bankruptcy Code or any bankruptcy, reorganization,
insolvency, readjustment of debts, dissolution or liquidation law or statute
with respect to Tenant or all or a substantial part of its properties or assets
or (b) appointing a receiver, trustee, liquidator or other custodian or all or a
substantial part of its properties or assets, and such order, judgment or decree
shall have continued unstayed and in effect for any period claiming through or
under Tenant or by reason of any statute or order of court shall thereafter be
entitled to possession of the Demised Premises but shall forthwith quit and
surrender the Demised Premises. If this lease shall be assigned in accordance
with its terms the provisions of this Article shall be applicable only to the
party then owning Tenant's interest in this lease.
22. No Representations by Landlord
Neither Landlord nor Landlord's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other matter or thing affecting or related to the premises
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth in
the provisions of this lease Tenant has inspected the building and the demised
premises and is thoroughly acquainted with their condition, applicable zoning,
permissible uses, and occupancy requirements, and agrees to take the same "as
is" and acknowledges that the taking of possession of the demised premises by
Tenant shall be conclusive evidence that the said premises and the building of
which the same form a part were in good and satisfactory condition at the time
such possession was so taken, except as to latent defects. All understandings
and agreements heretofore made between the parties hereto are merged in this
contract, which alone fully and completely expresses the agreement between
Landlord and Tenant and any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of it in whole
or in part, unless such executory agreement is in writing and signed by the
party against whom enforcement of the change, modification, discharge or
abandonment is sought.
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23. Notices
All notices given under this Lease must be in writing. Each party must
accept and claim the notices given by the other. Unless otherwise provided by
law, they may be given by (a) personal delivery, or (b) certified mail, return
receipt requested. Notices shall be addressed to Landlord at the address written
at the beginning of this Lease and to the Tenant at the Rental Space.
24. No Waiver
The Landlord's failure to enforce any agreement in this Lease shall not
prevent the Landlord from enforcing the agreement for any violations occurring
at a later time.
25. Survival
If any agreement in this Lease is contrary to law, the rest of the Lease
shall remain in effect.
26. End of Term
At the end of the Term, Tenant shall (a) leave the Rental Space clean, (b)
remove all of Tenant's property, (c) remove all signs and restore that portion
of the Rental Space on which they were placed, (d) repair all damage caused by
moving and (e) return the Rental Space to the Landlord in the same condition as
it was at the beginning of the Term except for normal wear and tear.
If Tenant leaves any property in the Rental Space, the Landlord may (a)
dispose of it and charge Tenant for the cost of disposal (b) keep it as
abandoned property.
27. Binding
This Lease binds Landlord and Tenant and all parties who lawfully succeed
to their rights or take their places.
28. Assignment and Subletting
The Tenant shall have the right to assign this Lease or sublet the
Premises or any part thereof, to its parent or any affiliate, subsidiary or
related entity or any entity into which or with which Tenant is merged or
consolidated without limitation and without the consent of Landlord. Landlord
shall have the right to approve any other subtenant or assignee, which approval,
however, shall not release
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the Tenant from any liability under this Lease and shall not be unreasonable
withheld or delayed.
29. Interruption of Services or use
Interruption or curtailment of any service maintained in the building or
use of the premises, caused by Force majeure (as defined in Section 31 hereof),
shall not entitle the Tenant to any claim against the Landlord or to any
abatement in rent, and shall not constitute a constructive or partial eviction,
unless the Lessor fails to take measures as may be reasonable under the
circumstances to restore the services without undue delay.
30. Broker
Each party represents to the other that no real estate commission is due
to any broker or agent as a result of this transaction, and each agrees to hold
the other harmless and to indemnify the other against any claims of or
liabilities to any broker based on alleged dealings with the indemnifying party.
31. Force Majeure
As used in this Lease, the term "Force Majeure" shall mean and include
those situations beyond Landlord's control, including by way of example and not
by way of limitation, acts of God; accidents; strikes; shortages of labor,
supplies or materials; or inclement weather.
32. Non-Disturbance
Landlord will make a good faith attempt upon Tenant's request to obtain a
non-disturbance clause from the mortgage lender upon refinancing.
33. Full Agreements
The parties have read this lease. It contains their full agreement. It may
not be changed except in writing signed by Landlord and Tenant. Both parties
hereby waive trial by jury of any matters whatsoever arising out of, under or by
virtue of this Lease.
Signatures: Landlord and Tenant agree to the terms of this Lease by signing
below. If a party is a corporation, this Lease is signed by its proper corporate
officers and its corporate seal is affixed.
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Witnessed or attested by CM BOULEVARD ASSOCIATES, LP
_______________________________ By: /s/ Michael Castellana
As to Landlord -----------------------------
Landlord
_______________________________ WESTERN BEEF MERRICK BLVD, INC.
As to Tenant
By: /s/ Peter Castellana, Jr.
-----------------------------
Tenant
GUARANTY OF WESTERN BEEF, INC.
(A Delaware Corporation)
FOR VALUE RECEIVED, and in consideration for, and as an inducement to Landlord
making the Lease with Tenant, Western Beef, Inc. guarantees to Landlord,
Landlord'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 without requiring any notice of non-payment, non-performance
or non-observance or proof or notice or demand, whereby to charge Western Beef,
Inc., all of which Western Beef, Inc. hereby expressly waives and expressly
agreed 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 Landlord against Tenant of any of the rights or remedies reserved
to Landlord pursuant to the provisions of the Lease. Western Beef, Inc. further
covenants and agrees that this guaranty shall remain and continue in full force
and effect as to any renewal, modification or extension of the Lease and during
any period when Tenant is occupying the premises as a "statutory tenant." As a
further inducement to Landlord to make the Lease and in consideration thereof,
Landlord and Western Beef, Inc. covenant and agree that in any action or
proceeding brought by either Landlord or Western Beef, Inc. against the other on
any matters whatsoever arising out of, under or virtue of the terms of the Lease
or of this guarantee that Landlord and Western Beef, Inc. shall and do hereby
waive trial by jury.
WITNESS WESTERN BEEF, INC.
____________________________ By: /s/ Peter Castellana, Jr.
-----------------------------
GUARANTOR
47-05 Metropolitan Avenue
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factor of five percent (5%) above each immediately preceding year. All rent
shall continue to be paid in advance in equal monthly installments.
Witnessed or attested by CM BOULEVARD ASSOCIATES, LP
_______________________________ By: /s/ Michael Castellana
As to Landlord -----------------------------
Landlord
_______________________________ WESTERN BEEF MERRICK BLVD, INC.
As to Tenant
By: /s/ Peter Castellana, Jr.
-----------------------------
Tenant
STANDARD FORM OF STORE LEASE
The Real Estate Board of New York, Inc.
Agreement of Lease, made as of this 6th day of July 1989, between ELMONT Q.
PROPERTIES, INC., 4705 Metropolitan Avenue, Ridgewood, New York part of the
first part, hereinafter referred to as OWNER, and QUAREX ELMONT, INC., 4705
Metropolitan Avenue, Ridgewood, New York party of the second part, hereinafter
referred to as TENANT,
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
1717, 1725 Dutch Broadway, Elmont, New York, and all land and buildings per
survey attached in the County of Nassau, State of New York, for the term of
seven (7) years (or until such term shall sooner cease and expire as hereinafter
provided) to commence on the 6th day of July, 1988 and to end on the 30th day of
June, 1995 both dates inclusive, at an annual rental rate of Eight Hundred
Fifty-Two Thousand ($852,000.00) Dollars, and Seveny-One Thousand ($71,000.00)
Dollars per month to increase in the third (3rd) year of this Lease and every
year thereafter at three (3%) percent per year compounded, 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 as Owner may designate, without
any set off or deduction whatsoever, except that Tenant shall pay the first
monthly installment(s) on the execution hereof (unless this lease be a renewal).
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
Rent Occupancy
1. Tenant shall pay the rent as above and as hereinafter provided.
2. Tenant shall use and occupy demised premises for any lawful purpose.
and for no other purpose. Tenant shall at all times conduct its business in a
high grade and reputable manner, shall not violate Article 37 hereof, and shall
keep show windows and signs in a neat and clean condition.
Alterations:
3. Tenant shall make no changes in or on the demised premises of any
nature without Owner's prior written consent. Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant at Tenant's
expense, may make alterations, installations, additions or improvements which
are non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
contractors or mechanics first approved by Owner. Tenant shall, before making
any alterations, additions, installations or improvements, at its expense,
obtain all permits, approvals and certificates required by any governmental or
quasi governmental bodies and (upon completion) certificates of final approval
thereof and shall deliver promptly duplicates of all such permits, approvals and
certificates to Owner and Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors to carry such workman's compensation, general
liability, personal and property damage insurance as Owner may require. If any
mechanic's lien is filed against the demised premises, or the building of which
the same forms a part, for work claimed to have done for, or materials furnished
to, Tenant, whether or not done pursuant to this article, the same shall be
discharged by Tenant within ten days thereafter, at Tenant's expense, by filing
the bond required by law. All fixtures and all paneling, partitions, railings
and like installations, installed in the premises at any time, either by Tenant
or by Owner in Tenant's behalf, shall, upon installation, become the property of
Owner and shall remain upon and be surrendered with the demised premises unless
Owner, by notice to Tenant no later than twenty days prior to the date fixed as
the termination of this lease, elects to relinquish Owner's rights thereto and
to have them removed by Tenant, in which event, the same shall be removed from
the premises by Tenant prior to the expiration of the lease, at Tenant's
expense. Nothing in this article shall be construed to give Owner title to or to
prevent Tenant's removal of trade fixtures, moveable office furniture and
equipment, but upon removal of any such from the premises or upon removal of
other installations as may be required by Owner, Tenant shall immediately and at
his expense, repair and restore the premises to the condition existing prior to
installation and repair any damage to the demised premises or the building due
in 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 at the end
of the term remaining in the premises after Tenant's removal shall be deemed
abandoned and may, at the election of Owner, either be retained as Owner's
property or may be removed from the premises by Owner at Tenant's expense.
Repairs
4. Owner shall maintain and repair the public portions of the building,
both exterior and interior, except that if Owner allows Tenant to erect on the
outside of the building a sign or signs, or a hoist, lift or sidewalk elevator
for the exclusive use of Tenant, Tenant shall maintain such exterior
installations in good appearance and shall cause the same to be operated in a
good and workmanlike manner and shall make all repairs thereto necessary to keep
same in good order and condition, at Tenant's own cost and expense, and shall
cause the same to be covered by the insurance provided for hereafter in Article
8. Tenant shall, throughout the term of this lease, take good care of the
demised premises and the fixtures and appurtenances therein, and the sidewalks
adjacent thereto, and at its sole cost and expense, make all non-structural
repairs thereto as and when needed to preserve them in good working order and
condition, reasonable wear and tear, obsolescence and damage from the elements,
fire or other casualty, excepted. If the demised premises be or become infested
with vermin, Tenant shall at Tenant's expense, cause the same to be exterminated
from time to time to the satisfaction of Owner. Except as specifically provided
in Article 9 or elsewhere in this lease, there shall be no allowance to the
Tenant for the diminution of rental value and no liability on the part of Owner
by reason of inconvenience, annoyance or injury to business arising from Owner,
Tenant or other making or failing to make any repairs, alterations, additions or
improvements in or to any portion of the building including the erection or
operation of any crane, derrick or sidewalk shed, or in or to the demised
premises or the fixtures, appurtenances or equipment thereof. The provisions of
this article 4 with respect to the making of repairs shall not apply in the case
of fire or other casualty which are dealt with in article 9 hereof.
Window Cleaning:
5. Tenant shall not clean nor require, permit, suffer or allow any window
in the demised premises to be cleaned from the outside in violation of Section
202 of the New York State Labor Law or any other applicable law or of the Rules
of the Board of Standards and Appeals, or of any other Board or body having or
asserting jurisdiction.
Requirements of Law, Fire Insurance:
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
<PAGE>
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire Underwriters
or the 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, and with respect to the portion of the sidewalk adjacent to the
premises, if the premises are on the street level, whether or not arising out of
Tenant's use or manner of use thereof, or with respect to the building if
arising out of Tenant's use or manner of use of the premises or the building
(including the use permitted under the lease). Except as provided in Article 29
hereof, nothing herein shall require Tenant to make structural repairs or
alterations unless Tenant has by its manner of use of the demised premises or
method of operation therein, violated any such laws, ordinances, orders, rules,
regulations or requirements with respect thereto. Tenant 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.
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. If the fire insurance rate shall, at the beginning of the 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, to comply with the terms of this article. In
any action or proceeding wherein Owner and Tenant are parties, a schedule or
"make-up" of rate for the building or demised premises leased by a 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 rate then applicable to said premises.
Subordination:
7. This lease is subject and subordinated to all ground or underlying
leases and to all mortgages which may now or hereafter affect such leases or the
real property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of 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 secure promptly any certificate that Owner may request.
Tenant's Liability Insurance Property Loss, Damage, Indemnity:
8. Owner or its agents shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence of Owner, its agents, servants or
employees. Owner or its agents will not be liable for any such damage caused by
other tenants or persons, in, upon or about said building or caused by
operations in construction of any private, public or quasi public work. Tenant
agrees, at Tenant's sole cost and expense, to maintain general public liability
insurance in standard form in favor of Owner and Tenant against claims for
bodily injury or death or property damage occurring in or upon the demised
premises, effective from the date Tenant enters into possession and during the
term of this lease. Such insurance shall be in an amount and with carriers
acceptable to the Owner. Such policy or policies shall be delivered to the
Owner. On Tenant's default in obtaining or delivering any such policy or
policies or failure to pay the charges therefor, Owner may secure or pay the
charges for any such policy or policies and charge the Tenant as additional rent
therefor. 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 agent, contractors, employees, invitees, or licensees, of any covenant
on condition of this lease, or the carelessness, negligence or improper conduct
of the Tenant, Tenant's agents, contractors, employees, invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
subtenant, and any agent, contractor, employee, invitee or licensee of any
subtenant. In case any action or proceeding is brought against 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 Owner's right to elect not to restore
the same as hereinafter provided. (d) If the demised premises are rendered
wholly unusable or (whether or not the demised premises are damaged in whole or
in part) if the building shall be so damaged that Owner shall decide to demolish
it or to rebuild it, then, in any of such events, Owner may elect to terminate
this lease by written notice to Tenant given within 90 days after such fire or
casualty specifying a date for the expiration of the lease, which date shall not
be more than 60 days after the giving of such notice, and upon the date
specified in such notice the term of this lease shall expire as fully and
completely as if such date were the date set forth above for the termination of
this lease and Tenant shall forthwith quit, surrender and vacate the premises
without prejudice however, to Owner's rights and remedies against Tenant under
the lease provisions in effect prior to such termination, and any rent owing
shall be paid up to such date and any payments of rent made by Tenant which were
on account of any period subsequent to such date shall be returned to Tenant.
Unless Owner shall serve a termination notice as provided for herein, Owner
shall make the repairs and restorations under the conditions of (b) and (c)
hereof, with all reasonable expedition subject to delays due to adjustment of
insurance claims, labor troubles and causes beyond 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 release or waiver shall not invalidate the
insurance and also, provided that such a policy can be obtained without
additional premiums. 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 provision of this article shall govern and control in lieu thereof.
Eminent Domain:
10. If the whole or any part of the demised premises shall be acquired or
condensed by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim for the
value of any unexpired term of said lease.
Assignment, Mortgage, Etc.:
11. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors and assigns expressly
covenants that it shall not assign, mortgage or encumber this agreement, nor
underlet, or suffer or permit the demised premises or any part thereof to be
used by others, without the prior written consent of Owner in each instance. If
this lease be assigned, or if the demised premises or any part thereof be
underlet or occupied by anybody other than Tenant, Owner may, after default by
Tenant, collect rent from the assignee, under-tenant or occupant, and apply the
net amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of the covenant,
or the acceptance of the assignee, under-tenant or occupancy 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:*
12. Rates and conditions in respect to submetering or rent inclusion, as
the case may be, to be added in RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service shall in no wise make Owner liable or
responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.
- - ------------
* Rider to be added if necessary.
Access to Premises:
13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and, at
other reasonable times, to examine the same and to make such repairs,
replacements and improvement as Owner may deem necessary and reasonably
desirable to any portion of the building or which Owner may elect to perform, in
the premises, 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, regualtions and other directions of government authorities.
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 within the walls. 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 lost or interruption of business or otherwise. Throughout
the term hereof Owner shall have the
<PAGE>
right to enter the demised premises at reasonable hours for the purpose of
showing the same to prospective purchasers or mortgages of the building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants and may, during said six months period, place upon the
premises the usual notice "To Let" and "For Sale" which notices Tenant shall
permit to remain thereon without molestation. If Tenant is not present to open
and permit an entry into the premises, 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 and such entry shall not render Owner or its agents liable therefor,
nor in any event shall the obligations of Tenant hereunder be affected. If
during the last month of term Tenant shall have removed all or substantially all
of Tenant's property therefrom, Owner may immediately enter, alter, renovate or
redecorate the demised premises without limitation or abatement of rent, or
incurring liability to Tenant for any compensation and such act shall have no
effect on this lease or Tenant's obligations hereunder. Owner shall have the
right at any time, without the same constituting an eviction and without
incurring liability to Tenant therefor to change the arrangement and/or location
of public entrances, passageways, doors, doorways, corridors, elevators, stairs,
toilets, or other public parts of the building and to change the name, number or
designation by which the building may be known.
Vault, Vault Space, Area:
14. No vaults, vault space or areas, 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, Articles 2 or 37 hereof, or 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 Landlord 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 the 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 per cent (4%) per annum. If such premises or any
part thereof be re-let by the Owner for the unexpired term of said lease, on any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent received upon such reletting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises, to be let during the terms of the re-letting. Nothing
hereon contained shall shall limit or prejudice the right of the Owner to prove
for and obtain as liquidated damages by reasons 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 fulfillingany of the covenants of this lease
other than the covenants for the payment of rent or additional rent; or if the
demised premises become vacant or deserted; or if 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 Tenants or if this
lease be rejected under Section 365 of Title II of the U.S. Code (Bankrupty
Code) or if Tenant shall fail to move into or take possession of the premises
within fifteen (15) days after the commencement of the terms of this lease, of
which fact Owner shall be the sole judge; then, in any one or more of such
events, upon Owner serving a written five (5) days notice upon Tenant specifying
the nature of said default and upon the expiration of said five (5) days, if
Tenant shall have failed to comply with or remedy such default, or if the said
default or omission complained of shall be of a nature that the same cannot be
completely cured or remedied within said five (5) day period, and if Tenant
shall not have diligently commenced curing such default within such five (5) day
period, and shall not thereafter with reasonable diligence and in good faith
proceed to remedy or cure such default, then Owner may serve a written three (3)
days notice of cancellation of this lease upon Tenant, and upon the expiration
of said three (3) days, this lease and the term thereunder shall end and expire
as fully and completely as if the expiration of such three (3) day period were
the day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
Owner but Tenant shall remain liable as hereinafter provided.
(2) If the notice provided for in (1) hereof 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 the service of notice
of intention to re-enter or to institute legal proceedings to that end.
Remedies of Owner and Waiver of Redemption:
18. In case of any such default, re-entry, expiration and/or dispossess by
summary roceedings or otherwise, (a) the rent, and additional rent, shall become
due thereupon and be paid up to the time of such reentry, disposses and/or
expiration. (b) Owner may re-let the premises or any part of 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 subsequent 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 of 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
expenses, attorneys' fees, brokerage, advertising and for keeping the demised
premises in good order or for preparing the same for re-letting. Any such
liquidated damages shall be paid in monthly installments by Tenant on the rent
day specified in this lease. 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, consider advisable and necessary for the
purpose of re-letting the demised premises, and the making of such alterations,
repairs, replacements, and/or decorations shall not operate or be construed to
release Tenant from liability. 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 rent collected over the sums payable by Tenant to Owner
hereunder. In the event of a breach of or threatened breach by Tenant or 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 case 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.
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, and
if Owner, in connection therewith or in connection with any default by Tenant in
the covenant to pay rent hereunder, makes any expenditures or incurs any
obligations for the payment of money, including but not limited to attorney's
fees, in instituting, prosecuting or defending any actions or proceedings, such
sums so paid or obligations incurred with interest and costs shall be deemed to
be additional rent hereunder and shall be paid by Tenant to Owner within five
(5) days of rendition of any bill or statement to Tenant therefor, and if
Tenant's lease 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.
No Representations by Owner:
20. Neither Owner nor Owner's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation, or any other matter or thing affecting or related to the premises
except as herein expressly set forth and no rights, easements or licenses are
<PAGE>
required 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 any any executory agreement hereafter made
shall be ineffective to change, modify, discharge or affect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.
End of Term:
21. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to Owner the demised premises, broom clean, in
good order and condition, ordinary wear excepted, and Tenant shall remove all of
its property. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this lease. If the last day of
the term of this lease or any renewal thereof, falls on Sunday, this lease shall
expire at noon on the preceding Saturday unless it be a legal holiday in which
case it shall expire at noon on the preceding business day.
Quiet Enjoyment:
22. 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, but not limited to, Article 33 hereof
and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.
Failure to Give Possession:
23. If Owner is unable to give possession of the demised premises on the
date of the commencement of the term hereof, because of the building-over or
retention of possession of any tenant, undertenant or occupants, or if the
premises are located in a building being constructed, because such building has
not been sufficiently completed to make the premises ready for occupancy or
because of the fact that a certificate of occupancy has not been procured or for
any other reason, 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 the inability to obtain possession) until after
Owner shall have given Tenant written notice that the premises are substantially
ready for Tenant's occupancy. If permission is given to Tenant to enter into the
possession of the demised premises or to occupy premises other than the demised
premises prior to the date specified as the commencement of the term of this
lease. Tenant covenants and agrees that such occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this lease, except
as to the covenant to pay rent. The provisions of this article are intended to
constitute "an express provision to the contrary" within the meaning of Section
223-a of the New York Real Property Law.
No Waiver:
24. 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 terms hereby demised shall be deemed in 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:
25. It is usually 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.
Inability to Perform:
26. This lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under the lease or to supply or is
delayed in supplying any service expressly or implied 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 so doing by reason of strike or
labor troubles, government preemption in connection with a National Emergency or
by reason of any rule, order or regulation of any department or subdivision
thereof of any government agency or by reason of the conditions of supply and
demand which have been or are affected by war or other emergency, or when, in
the judgement of Owner, temporary interruption of such services is necessary by
reason of accident, mechanical breakdown, or to make repairs, alterations or
improvements.
Bills and Notices:
27. 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 of 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 or at the address first
hereinabove given or at such other Address as Owner shall designation by written
notice.
Water Charges:
28. If Tenant requires, uses or consumes water for any purpose in addition
to ordinary lavatory purposes (of which fact Tenant constitutes Owner to be the
sole judge) Owner may install a water meter and thereby measures Tenant's water
consumption for all purposes. Tenant shall pay Owner for the cost of the meter
and the cost of the installation thereof and throughout the duration of Tenant's
occupancy Tenant shall keep said meter and installation equipment in good
working order and repair at Tenant's own cost and expense. Tenant agrees to pay
for water consumed, as shown on said meter as and when bills are rendered.
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 a lien upon
the demised premises or the realty of which they are part pursuant to law, order
or regulation made or leased in connection with the use, consumption,
maintenance or supply of water, water system or sewage or sewage connection or
system. The bill rendered by Owner shall be payable by Tenant as additional
rent. If the building or the demised premises or any part thereof be supplied
with water through a meter through which water is also supplied to other
premises, Tenant shall pay to Owner as additional rent, on the first day of each
month, ____ % ($ ) of the total meter charges, as Tenant's portion,
independently of and in addition in any of the remedies reserved to Owner
hereinabove or elsewhere in this lease. Owner may sue for and collect any monies
to be paid by Tenant or paid by Owner for any of the reasons or purposes
hereinabove set forth.
Sprinklers:
29. Anything elsewhere in this lease to the contrary notwithstanding, if
the New York Board of Fire Underwriters or the Insurance Services Office or any
bureau, department or official of the federal, state or city government require
or recommend the installation of a sprinkler system in that any changes,
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied in an existing sprinkler system by reason of Tenant's business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason, or if any such sprinkler system
installations, changes, modifications, alterations, additional sprinkler heads
or other such equipment, become necessary to prevent the imposition of a penalty
or charge against the full allowance for a sprinkler system in the fire
insurance rate set by any said exchanger or by any fire insurance company,
Tenant shall, at Tenant's expense, promptly make such sprinkler system
installations, changes, modifications, alterations, and supply additional
sprinkler heads or other equipment as required whether the work involved shall
be structural or non-structural in nature. Tenant shall pay to Owner as
additional rent the sum $ , on the first day of each month during the term of
this lease, as Tenant's position of the contract price for sprinkler supervisory
service.
Heat, Cleaning:
30. As long as Tenant is not in default under any of the covenants of this
lease Owner shall, if and insofar as existing facilities permit furnish heat to
the demised premises, when and as required by law, on business days from 8:00
a.m. to 6:00 p.m. and on Saturdays from 8:00 a.m. to 1:00 p.m. Tenant shall at
Tenant's expense, keep demised premises clean and in order, to the satisfaction
to owner, and if demised premises are situated on the street floor, Tenant
shall, at Tenant's own expense, make all repairs and replacements to the
sidewalks and curbs adjacent thereto, and keep said sidewalks and curbs free
from snow, ice, dirt and rubbish. Tenant shall pay to Owner the cost of removal
of any of Tenant's refuse and rubbish from the building, bills for the same
shall be rendered by Owner to Tenant at such times as Owner may elect and shall
be due and payable when
<PAGE>
rendered and the amount of such bills shall be deemed to be, and be paid as
additional rent. Tenant shall, however, have the option of independently
contracting for the removal of such rubbish and refuse in the event that Tenant
does not wish to have same done by employees of Owner. 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 Owner, are necessary for the
proper operation of the building.
Security:
31. Deleted
Captions:
32. The captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease or the
intent of any provision thereof.
Definitions:
33. The term "Owner" as used in this lease means only the Owner, or the
mortgages 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 of
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" as used in this lease shall exclude Saturdays
(except such portion thereof as is covered by specific hours in Article 30
hereof). Sundays and all days designated as holidays by the applicable building
service union employees service contract or by the applicable Operating
Engineers contract with respect to H V A C service.
Adjacent Excavation -- Shoring:
34. If an excavation shall be made upon land adjacent to the demised
premises, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter upon the
demised premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form a
part from injury or damage and to support the same by property foundations
without any claim for damages or indemnity against Owner, or diminution or
abatement of rent.
Rules and Regulations:
36. Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully, and comply strictly with the Rules and
Regulations and such others 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 Rules 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 with 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.
Glass:
37. Owner shall replace, at the expense of Tenant, any and all plate and
other glass damaged or broken from any cause whatsoever in and about the demised
premises. Owner may insure, and keep insured, at Tenant's expense, all plate and
other glass in the demised premises for and in the name of Owner. Bills for the
premiums therefor shall be rendered by Owner to Tenant at such times as Owner
may elect, and shall be due from, and payable by, Tenant when rendered, and the
amount thereof shall be deemed to be, and be paid as, additional rent.
Pornographic Uses Prohibited:
38. Tenant agrees that the value of the demised premises and the
reputation of the Owner will be seriously injured if the premises are used for
any obscene or pornographic purposes or any sort of commercial sex establisment.
Tenant agrees that Tenant will not bring or permit any obscene or pornographic
material on the premises, and shall not permit or conduct any obscene, nude, or
semi-nude live performances on the premises, nor permit use of the premises for
nude modelling, rap sessions, or as a so-called rubber goods shops, or as a sex
club of any sort, or as a "massage parlor." Tenant agrees further that Tenant
will not permit any of these uses by any sublessee or assignee of the premises.
This Article shall directly bind any successors in interest to the Tenant.
Tenant agrees that if at any time Tenant violates any of the provisions of this
Article, such violation shall be deemed a breach of a substantial obligation of
the terms of this lease and objectionable conduct. Pornographic material is
defined for purposes of this Article as any written or pictorial matter with
prurient appeal or any objects of instrument that are primarily concerned with
lewd or prurient sexual activity. Obscene material is defined here as it is in
Penal Law ss. 235.00.
Estoppel Certificate:
39. 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 which the rent and additional rent
have been paid, and stating whether or not there exists any defaults by Owner
under this lease, and, if so, specifying each such default.
Successors and Assigns:
40. 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: ELMONT Q. PROPERTIES, INC.
/s/ Frank Castellana
Witness for Tenant: QUAREX ELMONT, INC.
/s/ Peter Castellana, Jr.
<PAGE>
ACKNOWLEDGEMENTS
CORPORATE OWNER
STATE OF NEW YORK, ss.:
County of .
On this day of , 19 , before me
personally came
to me know, who being by me duly sworn, did depose and say that he resides
in
that he is the of
the corporation described in and which executed the foregoing instrument, as
OWNER; that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of said corporation, and that he signed his name thereto by like
order.
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.
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE
IN ACCORDANCE WITH ARTICLE 35
1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and safeguards.
2. If said premises are situated on the ground floor of the building,
Tenant thereof shall further, at Tenant's expense, keep the sidewalk and curb in
front of said premises clean and free from ice, snow, etc.
3. The water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or constructed.
4. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the demised premises, or permit or suffer the
demised premises to be occupied or used in a manner offensive or objectionable
to Owner or other occupants of the buildings by reason of noise, odors, and/or
vibrations, or interfere in any way with other Tenants or those having business
therein.
5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premises if the
name is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove sign without any liability, and may charge the expense incurred
by such removal to Tenant or Tenants violating this rule. Signs on interior
doors and directory tablet shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.
6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner, and as Owner may direct. No Tenant shall lay linoleum, or
other similar floor covering, so that the same shall come in direct contact with
the floor of the demised premises, and, if linoleum or other similar floor
covering is desired to be used an interlining of builder's deadening felt shall
be first affixed to the floor, by a paste or other material, soluble in water,
the use of cement or other similar adhesive material being expressly prohibited.
7. Freight, furniture, business equipment, merchandise and bulky matter of
any description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.
8. Owner reserves the right to exclude from the building, between the
hours of 6 p.m. and 8 a.m. and at all hours on Sundays, and legal holidays all
persons who do not present a pass to the building signed by Owner. Owner will
furnish passes to persons for whom any Tenant requests same in writing. Each
Tenant shall be responsible for all persons for whom he requests such pass and
shall be liable to Owner for all acts of such persons.
9. Owner shall have the right to prohibit any advertising by any Tenant
which, in Owner's opinion, tends to impair the reputation of Owner or its
desirability as a building for stores or offices, and upon written notice from
Owner, Tenant shall refrain from or discontinue such advertising.
10. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible or explosive fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.
11. Tenant shall not place a load on 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
setting sufficient in Owner's judgement to absorb and prevent vibration, noise
and annoyance.
GUARANTY
The undersigned Guarantor guarantees to Owner, Owner's successors and
assigns, the full performance and observance of all the agreements to be
performed and observed by Tenant in the attached lease, including the "Rules and
Regulations" as therein provided, without requiring any notice to Guarantor of
nonpayment or, nonperformance, or proof, or notice of demand, to hold the
undersigned responsible under this guaranty, all of which the undersigned hereby
expressly waives and expressly agrees that the legality of this agreement and
the agreements of the Guarantor under this agreement shall not be ended, or
changed by reason of the claims to Owner against Tenant of any of the rights ore
remedies given to Owners as agreed in the attached lease. The Guarantor further
agrees that this guaranty shall remain and continue in full force and effect as
to any renewal, change or extension of the lease. As a further inducement to
Owner to make the lease Owner and Guarantor agree that in any action or
proceeding brought by either Owner or the Guarantor against the other on any
matters concerning the Lease or of this guaranty that Owner and the undersigned
shall and do waive trial by jury.
...................................................................Guarantor
<PAGE>
RIDER ANNEXED TO AND
FORMING PART OF LEASE
LANDLORD: ELMONT Q. PROPERTIES, INC.
TENANT: QUAREX ELMONT, INC.
PREMISES: 1717, 1725 Dutch Broadway, Elmont, New York
40. This rider is made a part of the lease described above to which it is
attached, and in each instance in which the provisions, or any part thereof, of
this rider shall contradict or be inconsistent with the provisions, or any part
thereof, of said lease as constituted without this rider, the provisions of this
rider shall prevail and govern and the contradicted or inconsistent provisions
of said lease shall be deemed amended accordingly.
41. In addition to the rent herein specified, and as part of the rent
hereunder, the Tenant shall at all times and from time to time, keep up,
maintain, preserve and keep in good order and repair at its own cost and
expense, the entire demised premises, both inside and outside, including the
plumbing and fixtures therein, and including maintenance and repairs of damages
by the elements, and in case the Tenant shall not make such repairs of damages
and provide for such
<PAGE>
maintenance and upkeep of the said premises as herein provided, the Landlord may
make the same after the failure of the Tenant to commence the same within
fifteen (15) days after the Landlord gives notice of the necessity thereof, and
add the cost thereof to the installment of the rental next due, and the failure
of the Tenant to pay the same shall be construed the same as a failure of the
Tenant to pay an installment of rent.
42. As a part of the rent hereunder, the Tenant shall during the whole
period of this lease, at its own cost and expense, comply with, conform to,
fulfill and perform all present and future requirements of the law, and all
present and future ordinances, rules, orders, regulations and requirements of
all federal, state, municipal and local public authorities and all rules,
orders, regulations and requirements of the Board of Fire Underwriters, and of
each and all of the insurance companies insuring the said building on the
premises hereby demised against loss of fire in relation to and in connection
with the said demised premises, or any part thereof, notwithstanding that any
such present or future laws, ordinances, rules, orders, regulations or
requirements result from a change of policy excepting, however, such ordinances,
rules, orders, regulations or requirements which require structural changes. In
case of the failure of the Tenant to
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comply with such present and future requirements of the law, ordinances, rules,
orders, regulations and requirements, as herein provided, the Landlord may cause
the same to be done and the cost thereof shall be added to the installment of
the rental next due and be paid to the Landlord by the Tenant and the failure to
pay an installment of rent.
43. The Tenant may make any interior and exterior alteration, addition or
improvements necessary for the proper conduct of its business without Landlord's
consent. Tenant may also use the land and parking area for additions or
improvements. Such alterations, additions or improvements shall be made at the
Tenant's own cost and expense, and shall be made in accordance with the laws,
order, rules and regulations of federal, state, city and county authorities
applicable thereto then in effect. The Tenant shall at its own cost and expense
file plans and specifications for any such alterations, additions or
improvements whenever required to do so by law and shall obtain the necessary
permits therefor whenever required, and whenever plans and specifications are
required to be filed in connection with the same the Tenant shall carry adequate
Workmen's Compensation and General Liability Insurance. If a notice of
mechanic's lien be filed against the demised premises for labor or material
alleged to
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<PAGE>
have been furnished or to be furnished to or for the Tenant, the Tenant shall
cause the same to be removed or bonded. If the Tenant shall fail to take such
action as may be necessary to cause the said lien to be discharged or bonded
within ten (10) days after filing of such notice and receipt of such notice the
Landlord may cause the same to be discharged or bonded. Any amount paid or
expense incurred by the Landlord hereunder shall be deemed to be additional rent
for the demised premises and shall be added to and become part of, the rent to
be paid then or next to become due.
44. Nothing herein contained shall in any wise be construed so as to
entitle any persons furnishing labor or supplying materials in the construction
of any improvements in or about the said premises, to any charge or lien against
the fee of the premises, it being specifically understood and agreed that such
person will look solely to the Tenant for payment of any moneys due therefor,
nor shall anything herein contained be deemed a consent under the mechanic's
lien or any other statutory provision of law, so as to entitle such person so
supplying materials or furnishing labor, to have any charge against the said
property.
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<PAGE>
45. Tenant shall at his own cost and expense, pay for his own utility
service including heat, electric, and water, sprinkler and sewer service to the
demised premises. Tenant shall also pay the cost of the maintenance, repair and
replacement, and service of said utility systems.
46. (a) Tenant is and shall be in control and possession of the demised
premises as provided herein, and Landlord shall not in any event whatsoever be
liable for any injury or damage to any property or to any person happening on or
about the demised premises, nor for any injury or damage to the demised
premises, nor to any property of Tenant, or of any other person contained
therein.
(b) Tenant shall indemnify and save harmless Landlord against and from all
costs, expenses, liabilities, losses, damages, suits, fines, penalties, claims
and demands of every kind and nature, including reasonable counsel fees, by or
on behalf of any person, party or governmental authority, whomsoever, arising
out of any accident, injury or damages which shall happen in, or about the
demised premises or appurtenance, and on or under the streets, sidewalks, curbs
or vaults in front of or adjacent thereto, however occurring, and for any matter
or thing growing out of the condition, occupation, maintenance, alteration,
repair, use or operation
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<PAGE>
of the demised premises, or of any part thereof, and/or of the streets,
sidewalks, curbs or vaults adjacent thereto during the term.
47. Tenant shall permit Landlord or its agent, and any mortgagee or its
agent, to enter the demised premises at all reasonable hours for the purpose of
inspection, or of making repairs that Tenant may neglect or refuse to make in
accordance with the agreements, terms, covenants and conditions hereof (but
nothing herein shall imply or impose any duty upon Landlord to do any such
work), and also for the purpose of showing the demised premises to persons
wishing to purchase the same, and at any time within six (6) months prior to the
expiration of the term to persons wishing to rent the same; and Tenant shall
within six (6) months prior to the expiration of the term permit the usual
notice of "To Let" and "For Sale" to be placed on the demised premises and to
remain thereon without hindrance and molestation.
48. The Tenant shall indemnify the Landlord against any and all claims
which may be established or made against the Landlord for damages, including the
defense and cost thereof, which may result from the death of or injury to any
person or persons who may be in or about the property during the same
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<PAGE>
term and any renewal or extension thereof and, as security for the payment of
such claim, shall, at the Tenant's expense, pay for and maintain throughout said
term, fire insurance on the premises in an amount of at least $2,000,000.00 and
public liability insurance with limits of at least $3,000,000.00 for the death
of or injury to one person and $3,000,000.00 per occurrence, and $500,000.00
property damage. The policy shall be written by a responsible company authorized
to do business in the State of New York, reasonably acceptable to the Landlord,
and shall be in favor of the Landlord and Tenant, as interests may appear. The
original policy with due proof of payment of premiums thereon shall be delivered
to the Landlord not later than ten (10) days from the date of execution of this
Agreement. Tenant will deliver renewal policies together with due proof of
payment of premiums thereon. In the event Tenant shall fail to provide and
maintain the aforesaid insurance, Landlord shall have the right, but not the
obligation, after giving Tenant ten (10) days' notice, to procure and pay for
such insurance, and Tenant shall reimburse Landlord the cost thereof together
with interest at the then maximum legal rate on the amount paid from the date of
payment to the date of reimbursement. Failure of the Tenant to pay the premium
for the insurance shall be construed the same as a failure of the Tenant to pay
an installment of rent, and shall be added to the
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installment of the rental next due and payable to the Landlord. Each policy
shall provide that such policy cannot be cancelled without at least ten (10)
days prior written notice to Landlord, if this clause is obtainable from the
insurance carrier.
49. (a) Tenant shall pay as additional rent 100% of the real estate taxes
for the premises, plot and structure wherein the demised premises are located
whether by reason of increased rate or assessed valuation over the year 1988/89.
Such increase shall be applicable only to the actual demised area.
(b) Taxes shall be deemed to include all real estate taxes,
assessments, County taxes, transit taxes or any other governmental charge of a
similar nature whether general, special, ordinary or extraordinary, foreseen or
unforseen, which may hereafter be levied or assessed against the realty. If, due
to a change in the method of taxation, any franchise, income, profit, sales,
rental, use and occupancy or other tax shall be substituted for or levied
against the Landlord or any owner of the building or realty in lieu of taxes
hereinabove defined upon or with respect to the building or the realty, such tax
shall be included in the term "Taxes" for the purpose of this.
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(c) Any amounts due to the Landlord under the provisions of this
Article shall be paid as additional rent annually within ten (10) days after the
Landlord shall have submitted a copy of the bill received from the taxing
authorities and a breakdown of the actual amount charged to the Tenant, and
statement to Tenant showing the amount due to Landlord. Any such tax increase
for the fiscal tax year falling part within the year in which the term of this
lease shall end shall be apportioned so that Tenant shall pay his aforesaid
share of only that portion thereof which corresponds with the portion of said
fiscal tax year which is within the term of this lease. The amount of taxes
comprising Landlord's Basic Tax Liability against which Tenant's liability for
additional rent for subsequent years is determined shall be the amount thereof
finally determined to be legally payable by legal proceedings or otherwise.
(d) The Landlord reserves the right, through available legal remedies,
to contest the validity of any taxes or the amount of the assessed valuation of
the realty or any part thereof for any fiscal tax year. If the Landlord shall
receive any tax refund, remission or abatement in respect to the taxes for any
fiscal year for which the Tenant has paid a share of the taxes, as herein
provided, then Landlords shall reimburse Tenant for his proportionate share
thereof, after
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first deducting therefrom the share of Landlord's cost and expense in procuring
such refund, remission or abatement proportionately due to Tenant. Tenant may,
if Landlord does not pursue the above mentioned remedies, pursue them
themselves.
50. If title to the fee of the whole of the leased premises shall be taken
or condemned by any competent authority for any public or quasi-public use, this
lease shall cease and terminate, and all rent paid or payable by the Tenant
hereunder shall be apportioned as of the date of vesting of title in such
condemnation proceeding, and the Tenant shall have no claim against the Landlord
for the value of any unexpired term of this lease.
In the event of any such condemnation, the entire award(s) shall belong to
Landlord without any deduction therefrom for any estate or interest now or
hereafter vested in Tenant, or any damage thereto, and Tenant hereby assigns to
Landlord all of Tenant's right, title and interest now existing or hereafter
arising in and to any and all such award(s) or any part thereof, provided,
however, that nothing herein contained shall be construed to preclude Tenant
from participating in such condemnation proceedings and prosecuting directly
against the condemning authority any claim for loss of business, or
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damage to, or the cost of removal of, trade fixtures and other personal property
belonging to Tenant.
51. 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 said premises and/or any claim of injury or damage, and any
emergency statutory or any other statutory remedy. It is further mutually agreed
that in the event Landlord commences any summary proceedings for nonpayment of
rent, Tenant will not interpose any counterclaim of whatever nature or
description in any such proceeding, it being distinctly understood, however,
that the noninterposition of any counterclaim shall not be deemed a waiver by
Tenant of any counterclaim it may possess, nor shall the interposition of the
facts as a defense which may be the basis of a counterclaim be deemed a waiver
of any counterclaim.
52. Any and all alterations, trade fixtures and appliances, machinery,
tools, equipment, articles or personal property, installed by the Tenant and
used by the Tenant in the
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conduct of its business shall be and shall remain the property of the Tenant and
shall be removed by the Tenant upon any termination of the lease or the
surrender of possession by the Tenant. Damage caused by such removal shall be
repaired by Tenant and this obligation shall survive the termination of the
lease.
53. The receipt of any rent, whether the same be that originally reserved
or that which may become payable under any covenant herein contained, or of any
portion thereof or any interest thereon, shall not operate as a waiver of the
right of the Landlord to enforce the payment of additional unpaid rent or the
obligations of this lease by such remedies as may be appropriate; and, also, the
failure of the Landlord to enforce the same covenants and conditions on the
occasion of a subsequent breach or default.
54. It is expressly understood and agreed that any and all rights and
remedies granted to the Landlord under and by virtue of the terms and conditions
of this lease shall be in addition to and not by way of limitation of any and
all other rights and remedies given or afforded to the Landlord by reason of any
statute, law, ordinance or otherwise.
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55. Tenant is fully familiar with the physical condition of the Demised
Premises and accepts same in their "As Is" condition.
56. The Tenant may place or cause or allow to be placed any sign of any
kind whatsoever, in or about the said premises, and the Tenant may keep or place
or permit to be kept or placed such signs as are usual in connection with the
business conducted on the premises, provided that proper permits for the
erection of such sign or signs shall be procured by the Tenant at its expense,
from the proper authorities, municipal or otherwise, having jurisdiction, and
provided that the said sign or signs be erected and maintained in the manner
provided by law and in accordance with the rules and regulations of the
departments having jurisdiction, and provided further that the Tenant will save
and keep harmless the Landlord of and from any and all charges or damages by
reason of the erection and maintenance of such signs.
57. In the event that the Landlord shall pay any sum of money, or do any
act which shall require the expenditure of any sums by reason of the failure of
the Tenant to perform any of the covenants, terms or conditions herein
contained, the Tenant covenants to repay such sums to the Landlord upon demand
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on the next rent day, and in default thereof the sum so paid by the Landlord,
together with interest thereon at the maximum legal rate of interest may be
added as additional rent to the net annual rental becoming due upon the next
rent day, or any subsequent rent day and shall be payable as such. Nothing
contained herein shall be construed to postpone the right of the Landlord
immediately upon expending such sums, to collect such sums with interest at the
maximum legal rate of interest by action or otherwise.
58. Tenant represents and warrants that it has dealt with no broker in
connection with the negotiation of this lease.
59. No change, amendment, modification, waiver, cancellation or discharge
of this Lease, or any part thereof, shall be valid unless in writing and signed
by the party or parties against whom enforcement of any such change, amendment,
modification, waiver, cancellation or discharge is sought, and no surrender of
the premises or the remainder of the term herein shall be valid unless accepted
by the Landlord in writing.
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60. Landlord hereby consents to a subleasing or an assignment of the
entire demised premises or any part thereof.
61. Tenant understands that Landlord has a number of leases with other
tenants on the demised premises. Tenant takes subject to all leases now in
effect. Landlord agrees to transfer all security deposits now held. See Rider
Attached (Rent Schedule).
62. All notices, demands and requests required under this Lease shall be
in writing and shall be deemed to have been properly given if sent by United
States registered or certified mail, postage prepaid, addressed to the parties
at the addresses first above written or to such other addresses as Landlord or
Tenant, as the case may be, shall from time to time designate by notice give to
the other. All notices, properly addressed, shall be deemed served on the date
of mailing, as provided in this paragraph.
63. Tenant will be solely responsible for the removal of all rubbish,
refuse and garbage from the demised premises and will do so at its sole cost and
expense. Tenant shall keep said demised premises clean and in order. Tenant
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shall also provide for removal of snow and ice from the premises and parking
area.
64. Tenant, at any time, and from time to time, upon at least ten (10)
days prior notice by Landlord, shall execute, acknowledge and deliver to
Landlord, and/or to any other person, firm or corporation specified by Landlord,
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 which the
rent and additional rent have been paid, and stating whether or not there exists
any defaults by Landlord under this lease, and, if so, specifying each such
default.
65. This lease shall be governed by the laws of the State of New York.
66. This lease shall be acknowledged by both parties, and Tenant shall
have the right to record the same with the County Clerk's office.
67. In the event of any default by Tenant in the performance of any
obligation under this lease, Tenant shall
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have a reasonable opportunity to cure same after notice, except for rental and
other default items where specified time periods have been heretofore set forth
in this lease.
68. (a) Provided that the Tenant shall not then be in default under any of
the terms, covenants or conditions of this Agreement on the Tenant's part to be
observed or performed, then, in the event that the Landlord shall desire to sell
the premises, the Tenant shall have the single, non-recurring right ("Right of
First Offer") to have the Landlord submit written notice ("Sale Notice") to the
Tenant of the desire to sell, which Sale Notice shall be deemed an offer of the
premises to the Tenant and shall be submitted to the Tenant before the Landlord
enters into negotiations with any independent third party not related to or
affiliated with the Landlord (but excluding, however, brokers) to sell the
premises. The Sale Notice shall set forth (i) the price (the "Sale Price") at
which the Landlord is then considering the sale of the Premises, indicating in
the Sale Notice whether the Sale Price is "all cash" or whether the Landlord
would accept purchase money financing and terms thereof and such other matters
as the Landlord may deem appropriate for such Sale Notice.
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(b) The Tenant shall have fifteen (15) days after the giving of the Sale
Notice to deliver to the Landlord written notice of the Tenant's desire to enter
into a contract to purchase the premises for the Sale Price and on such terms as
may be contained in the Sale Notice, which notice of election to purchase shall
be accompanied by a bank or certified check in the amount of ten (10%) percent
of the Sale Price, to be held in escrow and applied to the downpayment agreed
upon in a contract of sale. Time shall be of the essence with respect to said
fifteen (15) day period and the failure of the Tenant to accept the offer for
any reason whatsoever shall be deemed an irrevocable waiver of the Tenant's
Right of First Offer. If the Tenant fails to accept the offer contained in the
Sale Notice to the Tenant or if after accepting any such offer, the Tenant fails
to execute and deliver a contract of sale submitted to the Landlord within ten
(10) days after such submission, then the Landlord shall return any deposit and
shall be entirely free, for a period of one hundred eighty (180) days following
such rejection, to sell the premises, or any portions or portion thereof, to
others, upon terms and conditions substantially equivalent to those first
offered to the Tenant and at a Sale Price not less than that specified in the
Sale Notice. If, by the expiration of said one hundred eighty (180) day period,
the Landlord shall not
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have executed a contract of sale for the sale of the premises upon terms and
conditions no more favorable to the purchase than those contained in the Sale
Notice, the Landlord shall again be obligated to offer to purchase the premises
to the Tenant before offering the same to any third party, and the procedure set
forth shall be repeated.
(c) The provisions of Paragraph 68(a) are not violated upon a merger,
consolidation or transfer to subsidiary corporations of the stock of ELMONT Q.
PROPERTIES, INC.
69. Provided that the Tenant shall not then be in default under any of the
terms, covenants or conditions of this agreement, the Tenant, by written notice
(certified mail, return receipt requested) to Landlord, at any time during the
initial term, but no later than six (6) months prior to the expiration of said
initial term or any renewal periods thereafter, may renew and extend the term of
the Lease for a further terms of two five (5) year periods. All the terms,
covenants and conditions of the initial lease shall remain the same. The rent
for the two (2) renewal periods shall be computed six (6) months prior to the
renewal periods at fair market value, but in no event shall the rent be less
than the rent in the last year of this Lease.
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<PAGE>
If the parties cannot agree as to fair market value, then the Landlord
shall retain a real estate broker to determine the fair market value for the
rental of the property. If the Tenant does not agree with the Landlord's real
estate brokers valuation, then the Tenant shall retain a real estate broker to
determine the fair market value for the rental value of the property. If the
Landlord and Tenant cannot agree, then the two real estate brokers shall select
a third real estate broker and the value as computed by the third real estate
broker shall be binding. The expenses for the preceding shall be borne by both
parties.
IN WITNESS WHEREOF, Landlord and Tenant have respectfully signed and
sealed this lease as of the day and year first above written.
WITNESS FOR LANDLORD ELMONT Q. PROPERTIES, INC.
/s/ Peter R. Admirand By: Frank Castellana, President
WITNESS FOR TENANT QUAREX ELMONT, INC.
By: Jules Veaner, Treasurer
<PAGE>
SUPPLEMENTAL RIDER TO LEASE
LANDLORD: ELMONT Q. PROPERTIES, INC.
TENANT: QUAREX ELMONT, INC.
PREMISES: 1717, 1725 Dutch Broadway, Elmont, New York
The printed provisions of this Lease are hereby modified and supplemented
as follows. Wherever there is any conflict between this rider and the printed
part of the Lease, the provisions of this rider are paramount and the Lease
shall be construed accordingly.
Article 7: It is agreed that as to any mortgages hereafter placed on the
premises, the subordination provided for in Article 7 shall extend only to
mortgages under which the mortgagee (by agreement in the mortgage or in a
separate instrument) contracts in substance not to disturb Tenant's occupancy so
long as Tenant performs its obligations in this lease on condition that Tenant,
when requested by the mortgagee, shall execute an attornment agreement to the
mortgagee should the mortgagee succeed to the rights of the Landlord under this
lease.
Article 9: Promptly after its receipt of any notice of any damage,
Landlord will give Tenant a notice of the time within which in Landlord's
judgment, the restoration of the premises can be effected. If the Landlord
elects not to
<PAGE>
RIDER (RENT SCHEDULE)
LEASES IN EFFECT JULY 6, 1988
TENANT TERM RENT SECURITY
Sands Salvage Corp. To 3/31/91 $ 8,333.00 $ 16,666.00
Philip Carretta Month to Month $ 650.00 NONE
838 Rome Street
836 Rome Street VACANT
<PAGE>
QUAREX ELMONT, INC.
CERTIFICATE
The undersigned, Secretary of Quarex Elmont, Inc. a New York Corporation,
hereby certifies that set forth below is a true and correct copy of the
resolution duly adopted by the Board of Directors of the Corporation on , 1988,
and that such resolution has not been amended or rescinded and it is in full
force and effect on the date hereof.
RESOLVED, that the Corporation enter into a lease with ELMONT Q.
PROPERTIES, INC. for the premises known as the 1717, 1725 Dutch Broadway,
Elmont, New York, pursuant to which the Company shall lease such premises for a
term of seven (7) years commencing __________ __, 198_, at an annual rental of
$852,000.00 per year during the first term thereof and escalating thereafter,
and that the offices of the corporation and each of them are hereby authorized
and directed to execute and deliver such lease on behalf of the corporation with
such additional terms and conditions as they may deem necessary or desirable.
IN WITNESS WHEREOF, the undersigned has made this Certificate this day of
, 1989.
Secretary
(Seal)
<PAGE>
ELMONT Q. PROPERTIES, INC.
CERTIFICATE
The undersigned, Secretary of Elmont Q. Properties, Inc. a New York
Corporation, hereby certifies that set forth below is a true and correct copy of
the resolution duly adopted by the Board of Directors of the Corporation on ,
1989, and that such resolution has not been amended or rescinded and it is in
full force and effect on the date hereof.
RESOLVED, that the Corporation enter into a lease with QUAREX ELMONT, INC.
for the premises known as the 1717, 1725 Dutch Broadway, Elmont, New York,
pursuant to which the Company shall lease such premises for a term of seven (7)
years commencing ____________ , 198_, at an annual rental of $852,000.UU per
year during the first term thereof and escalating thereafter, and that the
offices of the corporation and each of them are hereby authorized and directed
to execute and deliver such lease on behalf of the corporation with such
additional terms and conditions as they may deem necessary or desirable.
IN WITNESS WHEREOF, the undersigned has made this Certificate this day of
, 1989.
Secretary
(Seal)
<PAGE>
THIS LEASE RENEWAL BY AND BETWEEN Elmont Q. Properties, Inc. and (F/K/A
Quarex-Elmont) Western Beef Elmont, Inc., WITH OFFICES AT 47-05 Metropolitan
Avenue, Ridgewood, New York 11385, DATED THIS 1ST DAY OF JULY, 1995.
It is understood and agreed by and between the parties herein that the
Lease dated July 6, 1989, by and between Elmont Q. Properties, Inc. and Western
Beef Elmont, Inc., for premises at 1717 Dutch Broadway, shall be renewed and
extended upon the following terms and conditions:
a) The lease term shall be renewed for an additional 10 years commencing
July 1, 1995 and terminating June 30, 2005.
b) The rental for each and every year of the lease renewal term shall be
as follows:
Year 1 July 1, 1995-June 30, 1996 $1,027,209.33 per year
85,600.78 per month
Year 2 July 1, 1996-June 30, 1997 1,068,297.70 per year
89,024.81 per month
Year 3 July 1, 1997-June 30, 1998 1,111,029.61 per year
92,585.80 per month
Year 4 July 1, 1998-June 30, 1999 1,155,470.79 per year
96,289.24 per month
Year 5 July 1, 1999-June 30, 2000 1,201,689.62 per year
100,140.81 per month
Year 6 July 1, 2000-June 30, 2001 1,249,757.21 per year
104,146.44 per month
Year 7 July 1, 2001-June 30, 2002 1,299,747.50 per year
l08,312.29 per month
Year 8 July 1, 2002-June 30, 2003 1,351,737.40 per year
112,644.78 per month
Year 9 July 1, 2003-June 30, 2004 1,405,806.81 per year
117,150.57 per month
Year 10 July 1, 2004-June 30, 2005 1,462,039.17 per year
121,836.60 per month
c) All other terms and conditions of the Lease dated July 6, 1989, by and
between the parties shall remain in full force and effect and apply to the
renewal term herein.
ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
By:_________________________ By:_________________________
ELMONT Q. PROPERTIES, INC. WESTERN BEEF, INC.
F/K/A QUAREX ELMONT, INC.
Dated:
Witness:
<PAGE>
THIS LEASE RENEWAL BY AND BETWEEN Elmont Q. Properties, Inc. and (F/K/A
Quarex-Elmont) Western Beef Elmont, Inc., WITH OFFICES AT 47-05 Metropolitan
Avenue, Ridgewood, New York 11385, DATED THIS 1ST DAY OF JULY, 1995.
It is understood and agreed by and between the parties herein that the
Lease dated July 6, 1989, by and between Elmont Q. Properties, Inc. and Western
Beef Elmont, Inc., for premises at 1717 Dutch Broadway, shall be renewed and
extended upon the following terms and conditions:
a) The lease term shall be renewed for an additional 10 years commencing
July 1, 1995 and terminating June 30, 2005.
b) The rental for each and every year of the lease renewal term shall be
as follows:
Year 1 July 1, 1995-June 30, 1996 $1,027,209.33 per year
85,600.78 per month
Year 2 July 1, 1996-June 30, 1997 1,068,297.70 per year
89,024.81 per month
Year 3 July 1, 1997-June 30, 1998 1,111,029.61 per year
92,585.80 per month
Year 4 July 1, 1998-June 30, 1999 1,155,470.79 per year
96,289.24 per month
Year 5 July 1, 1999-June 30, 2000 1,201,689.62 per year
100,140.81 per month
Year 6 July 1, 2000-June 30, 2001 1,249,757.21 per year
104,146.44 per month
Year 7 July 1, 2001-June 30, 2002 1,299,747.50 per year
l08,312.29 per month
Year 8 July 1, 2002-June 30, 2003 1,351,737.40 per year
112,644.78 per month
Year 9 July 1, 2003-June 30, 2004 1,405,806.81 per year
117,150.57 per month
Year 10 July 1, 2004-June 30, 2005 1,462,039.17 per year
121,836.60 per month
c) All other terms and conditions of the Lease dated July 6, 1989, by and
between the parties shall remain in full force and effect and apply to the
renewal term herein.
ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
By:_________________________ By:_________________________
ELMONT Q. PROPERTIES, INC. WESTERN BEEF, INC.
F/K/A QUAREX ELMONT, INC.
Dated:
Witness:
LEASE
BY AND BETWEEN
PETER CASTELLANA, JR. and MARIE CASTELLANA
(LANDLORD)
AND
WESTERN BEEF -- 173RD STREET INC.
(TENANT)
<PAGE>
INDEX TO LEASE
LANDLORD: PETER CASTELLANA, JR. and MARIE CASTELLANA
TENANT: WESTERN BEEF -- 173RD STREET INC.
ARTICLE I REFERENCE PROVISIONS,
LEASED PREMISES AND TERM
Section 1.1 Reference Provisions
Section 1.2 Term and Leased Premises
Section 1.3 Acceptance of Leased Premises
Section 1.4 Quiet Enjoyment
ARTICLE II RENT AND OTHER CHARGES
Section 2.1 Minimum Rent
Section 2.2 Taxes
Section 2.3 Utilities Charges and Services
ARTICLE III CONSTRUCTION OF LEASED PREMISES
Section 3.1 Construction of Leased Premises
ARTICLE IV USE OF LEASED PREMISES
Section 4.1 Use of Leased Premises
Section 4.2 Additional Covenants of Tenant
Section 4.3 Signs, Awnings and Canopies
ARTICLE V INSURANCE REQUIRED OF TENANT
Section 5.1 Insurance Required of Tenant
Section 5.2 Fire Insurance Rate and Requirements
Section 5.3 Waiver of Subrogation
ARTICLE VI REPAIRS AND MAINTENANCE
Section 6.1 Repairs and Maintenance by Tenant
Section 6.2 Inspection
ARTICLE VII ADDITIONS AND ALTERATIONS
Section 7.1 Additions and Alterations by Landlord
Section 7.2 Additions and Alterations by Tenant
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<PAGE>
ARTICLE VIII DAMAGE, DESTRUCTION OR CONDEMNATION OF
THE LEASED PREMISES
Section 8.1 Damage or Destruction
Section 8.2 Condemnation
ARTICLE IX FINANCING
Section 9.1 Financing
Section 9.2 Subordination
Section 9.3 Non-Disturbance Protection
ARTICLE X DEFAULT BY TENANT
Section 10.1 Default
Section 10.2 Landlord's Rights on Default
Section 10.3 Landlord's Self--Help
Section 10.4 Non--Waiver Provisions
Section 10.5 Landlord's Expenses
Section 10.6 Assignment of Lease on Default
ARTICLE XI OTHER PROVISIONS
Section 11.1 Definition and Liability of Landlord
Section 11.2 Relationship of the Parties
Section 11.3 Security
Section 11.4 Indemnity
Section 11.5 Property in Leased Premises
Section 11.6 Damage to Property or Persons
Section 11.7 Assignment or Subletting
Section 11.8 Surrender of Premises and Holding Over
Section 11.9 Liens
Section 11.10 Interest
Section 11.11 Lien of Landlord for Rent, Taxes and
Other Sums
Section 11.12 Late Payments
Section 11.13 Waiver by Tenant
Section 11.14 Notices
Section 11.15 Broker
Section 11.16 Short Form Lease
Section 11.17 Entire and Binding Agreement
Section 11.18 Provisions Severable
Section 11.19 Captions
Section 11.20 Force Majeure
Section 11.21 Warranty of Title and Authority
Section 11.22 No Jury Trial
Section 11.23 Renewal Option
Section 11.24 Miscellaneous
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<PAGE>
THIS LEASE made and entered into as of the 1st day of November, 1992, by
and between PETER CASTELLANA, JR. and MARIE CASTELLANA, (collectively
"Landlord") and WESTERN BEEF - 173RD STREET INC., a New York corporation
("Tenant").
ARTICLE I
REFERENCE PROVISIONS, LEASED PREMISES AND TERM
Section 1.1. Reference Provisions.
(a) LEASED PREMISES -- The building (the "Building") commonly known as 1564
Southern Boulevard, Bronx, New York.
(b) TERM -- Shall be for a period of ten (10) years commencing on November 1,
1992 and ending on October 31, 2002.
(c) RENEWAL OPTION - One (1) five (5) year option, to be exercised by Tenant
on not less than six (6) months' written notice to Landlord (more
particularly described in Section 11.23 hereof).
(d) MINIMUM RENT -
November 1, 1992
October 31, 1993 An amount per annum equal to EIGHTY
TWO THOUSAND ONE HUNDRED and 00/100
($82,100.00) DOLLARS ($6,841.67/month).
November 1, 1993
October 31, 1994 An amount per annum equal to EIGHTY
SIX THOUSAND TWO HUNDRED FIVE and 00/100
($86,205.00) DOLLARS ($7,183.75/month).
November 1, 1994
October 31, 1995 An amount per annum equal to NINETY
THOUSAND FIVE HUNDRED FIFTEEN and
25/100 ($90,515.25)DOLLARS
($7,542.94/month).
November 1, 1995
October 31, 1996 An amount per annum equal to NINETY
FIVE THOUSAND FORTY ONE and 01/100
($95,041.01) DOLLARS ($7,920.08/month).
November 1, 1996
October 31, 1997 An amount per annum equal to NINETY
NINE THOUSAND SEVEN HUNDRED NINETY THREE and
06/100 ($99,793.06) DOLLARS
($8,316.09/month).
November 1, 1997
October 31, 1998 An amount per annum equal to ONE
HUNDRED FOUR THOUSAND SEVEN HUNDRED EIGHTY
TWO and 71/100 ($104,782.71) DOLLARS
($8,731.89/month).
November 1, 1998
October 31, 1999 An amount per annum equal to ONE
HUNDRED TEN THOUSAND TWENTY ONE and 84/100
($110,021.84) DOLLARS ($9,168.49/month).
<PAGE>
November 1, 1999
October 31, 2000 An amount per annum equal to ONE HUNDRED
FIFTEEN THOUSAND FIVE HUNDRED TWENTY TWO and
93/100 ($115,522.93) DOLLARS
($9,626.91/month).
November 1, 2000
October 31, 2001 An amount per annum equal to ONE HUNDRED
TWENTY ONE THOUSAND TWO HUNDRED NINETY NINE
and 07/100 ($121,299.07) DOLLARS
($10,108.26/month).
November 1, 2001
October 31, 2002 An amount per annum equal to ONE HUNDRED
TWENTY SEVEN THOUSAND THREE HUNDRED SIXTY
FOUR and 02/100 ($127,364.02) DOLLARS
($10,613.67/ month).
RENEWAL TERM:
November 1, 2002
October 31, 2003 An amount per annum equal to ONE HUNDRED
THIRTY THREE THOUSAND SEVEN HUNDRED THIRTY
TWO and 22/100 ($133,732.22) DOLLARS
($l1,144.35/ month).
November 1, 2003
October 31, 2004 An amount per annum equal to ONE HUNDRED
FORTY THOUSAND FOUR HUNDRED EIGHTEEN and
83/100($140,418.83)- DOLLARS
($11,701.57/month).
November 1, 2004
October 31, 2005 An amount per annum equal to ONE HUNDRED
FORTY SEVEN THOUSAND FOUR HUNDRED THIRTY
NINE and 77/100 ($147,439.77) DOLLARS
($12,286.65/ month).
November 1, 2005
October 31, 2006 An amount per annum
equal to ONE HUNDRED FIFTY FOUR THOUSAND
EIGHT HUNDRED ELEVEN and 75/100
($154,811.75) DOLLARS ($12,900.98/month).
November 1, 2006
October 31, 2007 An amount per annum equal to ONE HUNDRED
SIXTY TWO THOUSAND FIVE HUNDRED FIFTY TWO
and 33/100 ($162,552.33) DOLLARS
($13,546.03/month).
(e) USE - The operation of a retail supermarket. The use of the Leased
Premises by Tenant is and shall continue to be expressly subject to all
applicable zoning ordinances and rules and regulations of any governmental
instrumentality, board or bureau having jurisdiction. No other use of the
Leased Premises shall be permitted without Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed).
(f) SECURITY -- None
(g) NOTICE ADDRESS - TO LANDLORD:
Mr. Peter Castellana, Jr.
Mrs. Marie Castellana
47--05 Metropolitan Avenue
Ridgewood, New York 11385
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<PAGE>
TO TENANT:
Western Beef -- 173rd Street Inc.
47-05 Metropolitan Avenue
Ridgewood, New York 11385
Attn: Mr. Jules Verner
(h) INTERPRETATION -- The provisions of Section 1.1 of this lease set forth
some of the business terms of this lease and are a part of this lease.
Nonetheless, the provisions of Section 1.1 are subject to the specific
language contained elsewhere in this lease.
Section 1.2. Term and Leased Premises. (a) Landlord hereby leases to
Tenant and Tenant rents from Landlord those certain premises (the "Leased
Premises") described in Section 1.1(a), but reserving and excepting to Landlord
the right to install, maintain, use, repair and replace pipes, ductwork,
conduits, utility lines and wires through hung ceiling space, column space, and
partitions in or beneath the floor slab or above or below the Leased Premises or
other parts of the Building.
(b) The Term, as described in Section 1.1(b), shall commence on November
1, 1992 (the "Commencement Date"). The Term shall continue to and include
October 31, 2002 (the "Expiration Date") (subject to Tenant's renewal option).
Section 1.3. Acceptance of Leased Premises. As often as may reasonably be
requested by either party, the other party shall promptly and without cost to
the requesting party execute, acknowledge and deliver to the requesting party
and/or its mortgagee a written acceptance or estoppel certificate with respect
to the Leased Premises in form and substance acceptable to the requesting party.
Section 1.4. Quiet Enjoyment. Tenant, upon paying the rents herein
reserved and performing and observing all of the other terms, covenants and
conditions of this lease on Tenant's part to be performed and observed, shall
peaceably and quietly have, hold and enjoy the Leased Premises during the Term,
subject, nevertheless, to the terms of this lease and to any encumbrances to
which this lease is subordinate.
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<PAGE>
ARTICLE II
RENT AND OTHER CHARGES
Section 2.1. Minimum Fixed Rent. Tenant shall pay to Landlord without
previous demand therefor and without any setoff or deduction whatsoever, the
Minimum Rent provided in Section 1.1(d), payable in equal monthly installments,
in advance, on the first day of each and every calendar month throughout the
Term. The Minimum Rent for any fractional part of a calendar month at the
beginning or end of the Term shall be a proportionate part of the Minimum Rent
for a full calendar month.
Section 2.2. Taxes. Tenant shall pay promptly when due or make
reimbursement to Landlord for all taxes imposed upon Tenant's rent, lease and
business operation, including, without limitation, all documentary stamps or
similar taxes assessed upon the consideration to be received by Landlord for
this lease, and upon all personal property of Tenant.
Tenant shall also pay to Landlord, as additional rent, (i) all real estate
taxes (as such term is hereinafter defined) assessed and levied against, or
imposed upon, the Property (as hereinafter defined), and (ii) any and all
expenses directly incurred by Landlord in contesting the validity of, in seeking
a reduction in, or in seeking to prevent an increase in any real estate taxes,
which said payment of additional rent shall be due and payable with respect to
every Lease Year or part thereof during the term of this lease. Notwithstanding
the fact that the aforesaid additional rent is measured by the real estate
taxes, such additional rent shall be paid by Tenant as provided herein
regardless of the fact that Tenant may be exempt, in whole or in part, from the
payment of any real estate taxes by reason of Tenant's diplomatic status or for
any other reason whatsoever.
The term "real estate taxes" shall mean all taxes and assessments and
other governmental charges and levies, general and special, ordinary and
extraordinary, unforeseen as well as foreseen of any kind and nature (including
interest on such assessments whenever the same are payable in installments),
levied or assessed directly or indirectly against the land, buildings and/or
improvements of which the Leased Premises form a part (as the same may be
enlarged or reduced from time to time) (the "Property"), and other taxes arising
out of the use and/or occupancy of the Leased Premises imposed by federal,
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<PAGE>
state or local governmental authority or any other taxing authority having
jurisdiction over the Property, but shall exclude franchise, capital stock,
income, estate or inheritance taxes personal in nature to Landlord.
"Assessments" as used in this definition shall be deemed to include the costs of
all road, highway and transportation improvements (including, without
limitation, traffic signals and systems) installed and paid for by Landlord.
The amounts due hereunder shall be collectible as additional rent without
set off or deduction, and shall be paid within fifteen (15) days after written
demand by Landlord. Landlord's failure during the Term to prepare and deliver
any tax bills, statements or bills, or Landlord's failure to make a demand,
shall not in any way or cause Landlord to forfeit or surrender its rights to
collect any of the foregoing items, of additional rent which may have become due
during the Term. Tenant's liability for the amounts due under this Section shall
survive the expiration of the Term. In no event shall any rent adjustment
hereunder result in a decrease in the Minimum Rent as the same may be increased
or decreased from time to time pursuant to any other provision of this lease.
Should the taxing authorities include in such real estate taxes the value
of any machinery, equipment, fixtures, inventory or other personal property or
assets of Tenant, then Tenant agrees to pay its share of the taxes attributable
to such items in addition to, but not in duplication of, the real estate taxes
referred to in this Section.
If at any time during the Term, a tax or excise on rents or other tax,
however described (except any franchise, estate, inheritance, capital stock,
income or excess profits taxes imposed upon Landlord) is levied or assessed
against Landlord by any lawful taxing authority on account of the Landlord's
interest in this lease or the rents expressly reserved hereunder as a substitute
in whole or in part, or in addition to, the real property taxes hereinbefore
described, Tenant agrees to pay Landlord, as additional rent hereunder, its
share of the amount of such tax or excise on rents. In the event any such tax or
excise on rents or other tax, however described, is levied or assessed directly
against Tenant by any lawful taxing authority on account of Tenant's interest in
this lease or the leasehold estate hereby created or the rents to be paid by
Tenant hereunder, then Tenant shall be responsible therefor and agrees to pay
the same before delinquency; or should any lawful taxing authority require that
any such tax or
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<PAGE>
excise on rents or other tax, however described, for which Tenant is responsible
hereunder, other than the real property taxes levied or assessed against the
Property be paid by Tenant, but collected by Landlord, for and on behalf of such
taxing authority and from time to time forwarded by the Landlord to such taxing
authority, then the same shall be paid by Tenant to Landlord at such times as
such taxing authority shall require and be collectible by Landlord and the
payment thereof enforced in the same fashion as provided for the enforcement of
payment of rent hereunder and for the purpose of enforcing payment thereof shall
be deemed additional rent hereunder.
Section 2.3. Utilities Charges and Services. Tenant shall pay promptly, as
and when the same become due and payable, all charges for electricity, gas,
heat, steam, hot and/or chilled water, air-conditioning, ventilating, lighting
systems, fuel and other utilities supplied to the Leased Premises by the public
utility company. All electricity and gas consumed by Tenant shall be separately
metered and Tenant shall be responsible for payment of such utilities directly
to the public utility company. Tenant shall arrange with the utility serving the
Building for installation of all necessary meters and arrange for the provision
of such service. Landlord shall not be responsible for the supply to Tenant of
any utilities or services whatsoever to the Leased Premises (including, but not
limited to, said utilities, elevator, air--conditioning, gas, steam or cleaning)
and Tenant shall obtain all such services in Tenant's name at no charge to
Landlord.
Tenant's use of electric current in the Leased Premises shall not at any
time exceed the capacity of any of the electrical conductors and equipment in or
otherwise serving the Leased Premises. Tenant shall not make or perform or
permit the making or performing of, any alterations to wiring installation or
other electrical facilities in or serving the Leased Premises without the prior
consent of Landlord in each instance (which consent shall not be unreasonably
withheld or delayed).
Landlord 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 Leased
Premises by reason of any requirement, act or omission of the public utility
serving the Building with electricity or for any other reason not
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<PAGE>
attributable to Landlord's willful acts in default of this lease or gross
negligence.
Tenant shall pay to Landlord, within fifteen (15) days after rendition of
a bill therefor, all charges for water consumed at the Leased Premises as shown
by the water bills. In addition Tenant shall pay all sewer rents and charges
imposed upon its water usage.
ARTICLE III
CONSTRUCTION OF LEASED PREMISES
Section 3.1. Construction of Leased Premises. Tenant accepts the Leased
Premises "as is" with no representations or warranties by Landlord as to the
physical condition thereof.
ARTICLE IV
USE OF LEASED PREMISES
Section 4.1. Use of Leased Premises. Tenant agrees to use the Leased
Premises only for the permitted uses set forth in Section 1.1(e) and for no
other purpose.
Tenant covenants that during the Term, the Leased Premises shall be used
only and exclusively for lawful and moral purposes, and no part of the Leased
Premises or improvements thereon shall be used in any manner whatsoever for any
purposes in violation of the laws, ordinances, regulations, or orders of the
United States, or of the State, County, and/or City or other applicable
governmental subdivisions where the Leased Premises are located. Tenant shall
comply with all such laws, ordinances, regulations or orders now in effect or
hereafter enacted or passed during the Term insofar as the Leased Premises and
any signs of the Tenant are concerned, including, but not limited to zoning
ordinances, building codes and fire codes, and shall make at Tenant's own cost
and expense all additions and alterations to the Leased Premises ordered or
required by such authorities, whether in order to meet the special needs of
Tenant, or by reason of the occupancy of Tenant, or otherwise.
Section 4.2. Additional Covenants of Tenant. Tenant's use of the Property
shall be subject at all times during the Term to reasonable rules and
regulations adopted by Landlord not in conflict with any of the express
provisions
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<PAGE>
hereof governing the use of the Property and the Leased Premises. Tenant agrees
to comply with all such rules and regulations upon notice to Tenant from
Landlord. Tenant expressly agrees as follows:
(a) The sidewalks and loading areas adjacent to the Leased Premises shall
not be obstructed and shall be free from snow, ice, trash, litter, hazardous
materials and any other obstructions. Garbage and refuse shall be kept in sealed
containers (with food scraps and refuse kept in a self-contained, cleanable,
sealed, metal container) (or such containers as may be used in the future with
improved technology, provided garbage and refuse is continued to be stored and
disposed of without odors emanating and without resulting in unsightly
conditions). Tenant shall provide or designate a service for picking up refuse
and garbage, at its sole cost and expense. Tenant shall maintain all loading
areas in a clean manner. Tenant shall use a trash compactor located outside the
Leased Premises.
(b) No radio or television aerial or other device shall be erected on the
roof or exterior walls of the Leased Premises or the building in which the
Leased Premises are located without first obtaining in each instance the
Landlord's consent in writing (which consent shall not be unreasonably withheld
or delayed). Any aerial or device installed without such written consent shall
be subject to removal at Tenant's expense without notice at any time.
(c) No loud speakers, televisions, phonographs, radios, tape players or
other devices shall be used in a manner so as to be heard or seen outside the
Leased Premises without the prior written consent of Landlord (which consent
shall not be unreasonably withheld or delayed).
(d) The plumbing and sanitary facilities shall be kept in a good state of
repair and operating condition, and shall not be used for any other purpose
other than that for which they are constructed; no foreign substance of any kind
shall be thrown therein, and the expense of any breakage, stoppage, or damage
resulting from a violation of this provision shall be borne by Tenant. All
grease traps, if any, shall be installed and maintained by Tenant in accordance
with applicable law and in accordance with Landlord's requirements. Tenant shall
furnish sufficient heat at all times so as to prevent any damage to the Leased
Premises, including, but not limited to, any freezing or breaking of pipes, any
mechanical
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systems or fixtures. Tenant shall, at Tenant's sole cost and expense, obtain and
maintain licenses and permits, and pay all fees and charges, in connection with
the existence of any air-conditioning equipment and/or any other equipment in or
upon the Leased Premises.
(e) Tenant at its expense shall contract for regular termite and pest
extermination services covering the Leased Premises, to keep same free of
vermin.
(f) Tenant shall keep and maintain the Leased Premises (including, without
limitation, exterior and interior portions of all windows, doors and all other
glass, including, in each case, the frames therefor) in a neat and clean
condition, and Tenant will not require, permit, suffer or allow any such window
or door to be cleaned in violation of the Labor Law of the State of New York or
of any other law or ordinance or of any rule, order or regulation of any
governmental authority having jurisdiction thereof, and, at Tenant's expense,
clean and polish the inside and outside of the store fronts of the Leased
Premises whenever necessary in the reasonable judgment of Landlord.
(g) Tenant shall take no action (including, but not limited to, using
employees, contractors, labor or materials) which would create any work
stoppage, picketing, labor disruption or dispute, or any interference with the
business of Landlord or any other tenant or occupant in the Building or with the
rights and privileges of any customer or other person(s) lawfully in and upon
the Property. If such disturbance results from Tenant's use of non--union labor,
Landlord shall have the right to order Tenant to have pickets removed and, if
necessary, to terminate any construction work at any time being performed in the
Leased Premises, until such time as Landlord shall have given its written
consent for the resumption of such work. If such disturbance results from a
jurisdictional dispute between unions, Tenant shall be obligated to promptly
take all legal steps to have the pickets removed. If such pickets are not
removed within three (3) days, Landlord shall have the right to terminate the
construction work in the Leased Premises. Tenant shall have no claim for damages
of any nature against Landlord in connection with Landlord's remedies provided
herein.
(h) Tenant shall pay before delinquency all license or permit fees and
charges of a similar nature for the conduct of any business in the Leased
Premises.
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(i) Tenant shall store and/or stock in the Leased Premises only such
merchandise as Tenant is permitted to offer for sale in the Leased Premises
pursuant to this lease.
(j) Tenant shall not perform any act or carry on any practice which may
damage, mar or deface the Property.
(k) Tenant shall not place a load on any floor in the interior delivery
system, if any, or in the Leased Premises, or in any area of the Building,
exceeding the floor load which such floor was designed to carry, nor shall
Tenant install, operate or maintain therein any heavy item or equipment except
in such manner as to achieve a proper distribution of weight.
(l) Tenant shall not install, operate or maintain in the Leased Premises
or in any other area of the Building any electrical equipment which does not
bear underwriter's approval, or which would overload the electrical system or
any part thereof beyond its capacity for proper and safe operation as reasonably
determined by Landlord, and unless the same is performed by a licensed
electrical engineer or contractor.
(m) Tenant shall not suffer, allow or permit any vibration, noise, light,
odor or other effect to emanate from the Leased Premises, or from any machine or
other installation therein, or otherwise suffer, allow or permit the same to
constitute a nuisance or otherwise interfere with the safety, comfort or
convenience of Landlord or any of the other occupants of the Building or their
customers, agents or invitees or any others lawfully in or upon the Property.
Upon notice by Landlord to Tenant that any of the aforesaid is occurring, Tenant
agrees to forthwith remove or control the same.
(n) Tenant shall not store, display, sell, or distribute any alcoholic
beverages (other than beer and wine coolers) or any dangerous materials
(including, without limitation, fireworks) unless specifically permitted by this
lease.
(o) Tenant shall not use or occupy the Leased Premises or do or permit
anything to be done thereon in any manner which shall prevent Landlord and/or
Tenant from obtaining at standard rates any insurance required or desired, or
which would invalidate or increase the cost to Landlord of any existing
insurance, or which might cause structural injury
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to Building, or which would constitute a public or private nuisance or which
would violate any present or future laws, regulations, ordinances or
requirements (ordinary or extraordinary, foreseen or unforeseen) of the federal,
state or municipal governments, or of any department, subdivisions, bureaus or
offices thereof, or of any other governmental public or quasi--public
authorities now existing or hereafter created having jurisdiction in the Leased
Premises or the Property.
(p) All roof penetrations required by Tenant shall be performed by a
roofing contractor reasonably acceptable to Landlord.
Section 4.3. Signs, Awnings and Canopies. (a) Tenant may erect and
maintain, at Tenant's sole cost and expense, subject to all applicable state and
local ordinances, codes, rules and regulations and Landlord's prior written
approval (which approval shall not unreasonably withheld or delayed), such
signs, awnings and canopies as it may deem appropriate on the Leased Premises.
Tenant shall submit to Landlord detailed drawings of its signs, together with
copies of all required governmental approvals, permits or licenses, for review
and approval by Landlord prior to erecting said signs on the Leased Premises.
(b) Tenant shall keep insured and maintain, repair, restore and replace
all such signs in good condition, repair and operating order at all times. If
any damage is done to Tenant's signs, Tenant shall commence to repair same
within ten (10) working days or Landlord may, at its option, repair same at
Tenant's expense, and the same shall be collectible from Tenant as extra and
additional rent, payable upon demand. Tenant shall pay for all electricity, if
any, consumed by said signs directly to the public utility company.
ARTICLE V
INSURANCE REQUIRED OF TENANT
Section 5.1. Insurance Required of Tenant. (a) Tenant shall obtain and
provide, on or before the earlier of the commencement of the Term or Tenant's
entering the Leased Premises for any purpose, and keep in force at all times
thereafter, the following insurance coverages with respect to the Leased
Premises:
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(i) Comprehensive General Liability Insurance, with contractual liability
endorsement, relating to the Leased Premises and its appurtenances on an
occurrence basis with a minimum single limit of Three Million ($3,000,000.00)
Dollars for bodily or personal injury (including death) and in the amount of
Five Hundred Thousand ($500,000.00) Dollars in respect of property damage.
(ii) Fire and Lightning, Extended Coverage, Vandalism and Malicious
Mischief and Flood (if required by Landlord, any mortgagee or governmental
authority and if obtainable) Insurance in an amount adequate to cover the
replacement cost of all personal property, decorations, trade fixtures,
furnishings, equipment and all contents therein.
(iii) Boiler or Machinery Insurance covering all pressure vessels,
boilers, air--conditioning equipment, or similar equipment, if any, in, on,
adjoining, above or beneath the Leased Premises, in the amount of One Million
($1,000,000.00) Dollars.
(iv) Worker's Compensation Insurance covering all persons employed,
directly or indirectly, in connection with any finish work performed by Tenant
or any repair or alteration authorized by this lease or consented to by
Landlord, and all employees and agents of Tenant with respect to whom death or
bodily injury claims could be asserted against Landlord or Tenant, as required
by the law of the State of New York.
(v) Plate Glass Insurance.
(vi) Comprehensive Automobile Liability Insurance providing third party
liability insurance with One Million ($1,000,000.00) Dollars inclusive limits,
covering all licensed vehicles owned or operated by or on behalf of Tenant.
(b) Before undertaking any alterations, additions, improvements or
construction, Tenant shall obtain at its expense a public liability insurance
policy insuring Tenant and Landlord against any liability which may arise on
account of such proposed alterations, additions, improvements or construction on
an occurrence basis with the minimum limits set forth in this Section.
(c) All of the aforesaid insurance except the Worker's Compensation
Insurance required by subparagraph (a) (iv) above shall be written in the name
of Landlord (and any
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designee(s) of Landlord) and Tenant and shill be written by one or more
responsible insurance companies with a general policy-holder's rating of not
less than A and a financial rating of AA as rated in the most current available
"Best's" insurance reports, licensed to do business in New York and authorized
to issue such policy(ies) in form reasonably satisfactory to Landlord; all such
insurance shall contain endorsements that: such insurance may not be cancelled
or amended with respect to Landlord (or its designees) except upon thirty (30)
days' prior written notice to Landlord (and any such designees) by the insurance
company; Tenant shall be solely responsible for payment of premiums and Landlord
(or its designees) shall not be required to pay any premium for such insurance;
in the event of payment of any loss covered by such policy, Landlord (or its
designees) shall be paid first by the insurance company for Landlord's loss. The
minimum limits of the comprehensive general liability policy of insurance shall
in no way limit or diminish Tenant's liability hereunder. Tenant shall deliver
to Landlord at least fifteen (15) days prior to the time such insurance is first
required to be carried by Tenant, and thereafter at least fifteen (15) days
prior to the expiration of such policy, either a duplicate original or a
certificate of insurance on all policies procured by Tenant in compliance with
its obligations hereunder, together with evidence satisfactory to Landlord of
the payment of the premiums therefor. If Tenant fails to obtain and provide any
or all of the aforesaid insurance, then Landlord may, but shall not be required
to, purchase such insurance on behalf of Tenant and add the cost of such
insurance as additional rent payable with the next installment of Minimum Rent.
Tenant's failure to keep in force the aforementioned insurance shall be regarded
as a material default hereunder entitling Landlord to exercise any or all of the
remedies provided in this lease in the event of Tenant's default.
(d) The minimum limits of the comprehensive general liability policy of
insurance shall be subject to increase at any time, and from time to time, if
Landlord shall deem same reasonably necessary for adequate protection to reflect
changed circumstances, reflecting without limitation (i) changes required by any
mortgagee of the Property, (ii) changes indicated by the amount of plaintiffs'
verdicts in personal injury actions in New York, or (iii) changes consistent
with the standards required by other landlords for supermarkets in New York.
Within thirty (30) days after demand therefor by Landlord, Tenant shall furnish
Landlord with evidence of Tenant's compliance with such demand.
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Section 5.2. Fire Insurance Rate and Requirements. (a) Tenant agrees that
it will pay to Landlord, on demand, as additional rent, premiums for all fire
insurance policies in force with respect to the Property and its contents. In
addition, Tenant agrees to comply, at its own cost and expense, with any rules
and regulations of the Fire Insurance Rating Organization and any similar body
and any governmental authority having jurisdiction if noncompliance will result
in Landlord's inability to obtain insurance coverage. If any electrical
equipment is installed that overloads the lines in the Building, Tenant shall,
at Tenant's own cost and expense, promptly make whatever changes are necessary
to remedy such condition and to comply with all requirements of the Landlord and
the Board of Fire Insurance Underwriters and any similar body and any
governmental authority having jurisdiction thereof. For the purpose of this
paragraph, any finding or schedule of the Fire Insurance Rating Organization
having jurisdiction thereof shall be deemed to be conclusive.
(b) In the event that this lease so permits and Tenant engages in the
preparation of food or packaged foods or engages in the use, sale or storage of
inflammable or combustible material, Tenant shall install chemical extinguishing
devices (such as ansul) approved by the Fire Insurance Rating Organization
(which devices, when installed, shall become Landlord's property) and shall keep
such devices under service as required by such organization. A copy of such
service contract shall be delivered to Landlord at least fifteen (15) days prior
to the commencement of the Term, and copies of all maintenance reports shall be
sent simultaneously to Landlord and Tenant (and said service contracts shall so
provide).
(c) If gas is used in the Leased Premises, Tenant shall install at its
expense gas cut--off devices (manual and automatic).
Section 5.3. Waiver of Subrogation. Neither party to this lease shall be
liable for any damage by fire or other peril includable in the coverage afforded
by the standard form of fire insurance policy with extended coverage endorsement
attached (whether or not such coverage is in effect), no matter how caused, it
being understood that the damaged party will look solely to its insurer for
reimbursement. Any waiver of rights contained in this Section shall be
ineffective if such
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waiver shall be unobtainable, or result in an increase in the cost of insurance
of the waiving party, unless the other party shall pay such increase within ten
(10) days after notice thereof.
ARTICLE VI
REPAIRS AND MAINTENANCE
Section 6.1. Repairs and Maintenance by Tenant. Tenant shall make and pay
for all repairs to the Building, whether structural or non-structural,
mechanical or non--mechanical, including (without limitation) necessary repairs
to the exterior walls, the roof, the slab, foundations, load bearing members,
plumbing, pipes, and conduits located outside the Leased Premises and necessary
repairs to the sidewalks, parking areas (if any) and curbs, the fixtures and
appurtenances in the Leased Premises and all equipment and systems serving the
Building and shall replace all things which are necessary to keep the same in a
good state of repair and operating order. Tenant shall also maintain, replace
and keep in good repair and operating order all plumbing, sprinklering,
electrical installations, ceilings, inside walls and carpeting and floor
surfaces, and all air-conditioning, ventilating and heating installations
(whether located within or without the Leased Premises). Tenant shall at all
times keep the Leased Premises and all exterior entrances, glass and show
moldings, partitions, doors, floor surfaces, fixtures, equipment and
appurtenances thereof in good order, condition and repair, and in a reasonably
satisfactory condition of cleanliness, including reasonably periodic painting of
the interior of the Leased Premises, and Tenant shall make all other necessary
repairs in and to the Property. Tenant shall, at its expense, promptly replace
all broken or damaged glass or substitutes therefor, as the case may be.
If (i) Tenant does not repair or restore properly as required hereunder
and to the reasonable satisfaction of Landlord, or (ii) Landlord, in the
exercise of its sole discretion, determines that emergency repairs are
necessary, or (iii) repairs or replacements to the to the Property are made
necessary by any act or omission or negligence of Tenant, its agents,employees,
subtenants, assignees, concessionaires, contractors, invitees, licensees or
visitors, then in any of such events Landlord may, after written notice to
Tenant (except in case of emergency in which case no notice shall be required),
make such repairs or replacements without liability
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to Tenant for any loss or damage that may accrue to Tenant's merchandise,
fixtures or other property or to Tenant's business by reason thereof, and upon
completion thereof, or upon Landlord's obtaining or maintaining said contract
Tenant shall pay Landlord's costs plus fifteen (15%) percent for overhead, upon
presentation of a bill therefor, as additional rent. Said bill shall include
Interest (as defined in Section 11.10) from the date such repairs were paid by
Landlord to the contractor(s) making such repairs. The performance by Landlord
of any such obligation shall not constitute a release or waiver of Tenant
therefrom.
Anything elsewhere in this lease to the contrary notwithstanding, if the
Fire Insurance Exchange or any bureau, department or official of the federal,
state or city government require or recommend the installation of a sprinkler
system or that any changes, modifications, alterations, or additional sprinkler
heads or other equipment be made or supplied to an existing sprinkler system by
reason of Tenant's business, or the location of partitions, trade fixtures, or
other contents of the Leased Premises, or if any such sprinkler system
installations, changes, modifications, alterations, additional sprinkler heads
or other such equipment, become necessary to obtain Landlord's insurance
coverage or to prevent the imposition of a penalty or charge against the full
allowance for a sprinkler system in the fire insurance rate set by any said
Exchange or by any fire insurance company, Tenant shall, at Tenant's expense,
promptly make such sprinkler system installations, changes, modifications,
alterations, and supply additional sprinkler heads or other equipment as
required whether the work involved shall be structural or non--structural in
nature.
Section 6.2. Inspection. Landlord or its representatives shall have the
right to enter the Leased Premises at reasonable times and upon reasonable
notice (and in emergencies at all times and without notice) during the Term.
Tenant acknowledges that, in addition to Landlord's right to enter the Leased
Premises as set forth herein, Landlord or its representatives, or the utility
companies, may need, and shall have the right to gain, immediate access to any
mechanical equipment, pipes, conduits, etc., in the Leased Premises for the
purpose of inspecting, repairing, installing, altering or changing the location
of any pipes valves or other building facilities or equipment.
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ARTICLE VII
ADDITIONS AND ALTERATIONS BY TENANT
Section 7.1. By Landlord. In event Landlord shall hereafter determine
during the Term to erect additional structures, add stories to existing
buildings, enclose any open portions of the Property enlarge or reduce the
Building by addition(s) thereto or by the diminution thereof, Tenant hereby
consents thereto and to the performance of work necessary to effect the same and
any inconvenience caused thereby. The design, materials and performance of
necessary work therefor shall be in the sole unrestricted discretion of
Landlord.
Section 7.2. Additions and Alterations by Tenant. Upon Landlord's prior
written consent (not to be unreasonably withheld or delayed), Tenant may from
time to time (if Tenant shall not then be in default), at its own expense, make
alterations, renovations, improvements or other installments in or to the Leased
Premises or any part thereof, provided the same be performed in a good and
workmanlike manner, in accordance with all applicable terms and conditions of
this lease, accepted building practices and applicable laws, including, but not
limited to, building codes and zoning ordinances, and so as not to weaken or
impair the strength or lessen the value of the Building. No such work shall be
commenced and no material shall be fabricated unless and until Tenant shall have
caused plans and specifications therefor to have been prepared, at Tenant's sole
cost and expense, by a licensed architect or other duly licensed and qualified
person, and shall have obtained Landlord's written approval thereof, which
approval shall not be unreasonably withheld or delayed. In the event Landlord's
written approval is granted, and prior to commencement of all such work Tenant
shall cause Landlord's requirements for bonding, insurance and other contractor
requirements to be satisfied. Any work done by Tenant shall not unreasonably
interfere with the use by any other tenants of their premises in the Property.
Tenant shall submit to Landlord, within thirty (30) days after completion of
such work, three (3) full sets of "as built" plans and specifications. Tenant
shall not perform or permit to be performed any electrical work, alterations or
modifications unless (i) same is performed by a licensed electrical engineer or
contractor, and (ii) plans therefore have been filed with and approved by the
New York City Department of Buildings and any other agency having jurisdiction.
Tenant shall cause such work to be performed, at its sole expense, promptly,
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efficiently and competently by duly qualified or licensed persons or entities,
which have been approved by Landlord in writing (which approval shall not be
unreasonably withheld or delayed), without interference to or disruption of the
operations of any other tenants or occupants of the Property.
Tenant shall have the right to make non--structural interior alterations
to the Leased Premises without Landlord's prior consent. Notwithstanding the
foregoing, in the event Tenant makes any non--structural interior alterations,
Tenant shall be required to comply with Landlord's requirements for bonding,
insurance and other contractor requirements. Tenant shall cause such work to be
performed, at its sole expense, promptly, efficiently and competently by duly
qualified or licensed persons or entities, which have been approved by Landlord
in writing (which approval shall not be unreasonably withheld or delayed),
without interference to or disruption of the operations of other tenants or
occupants of the Property. Upon completion of any such work, Tenant shall
promptly deliver "as-built" plans to Landlord.
ARTICLE VIII
DAMAGE, DESTRUCTION OR CONDEMNATION OF THE LEASED PREMISES
Section 8.1. Damage or Destruction. (a) If all or any part of the Leased
Premises shall be damaged or destroyed by fire or other casualty insured under
the standard fire insurance policy with approved standard extended coverage
endorsement applicable to the Leased Premises, Landlord shall, except as
otherwise provided herein, repair and/or rebuild the same with reasonable
diligence, but Landlord's obligation hereunder shall be limited to rebuilding
the shell of the Leased Premises. Nothing herein above contained shall impose
upon Landlord any liability or responsibility to repair, rebuild or replace any
property belonging to Tenant. Unless this lease is terminated by Landlord, as
hereinafter provided, Tenant shall repair the Leased Premises and shall
redecorate and refixture the Leased Premises and restock the contents thereof in
a manner and to at least a condition equal to that existing prior to its
destruction or casualty, and the proceeds of all insurance carried by Tenant on
its personal property, decorations, trade fixtures, furnishings, equipment and
contents in the Leased Premises shall be held in trust by Tenant for such
purposes. Tenant agrees to exercise reasonable diligence to reopen for business
in the Leased Premises as soon
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as practicable unless this lease is terminated by Landlord, as hereinafter
provided.
(b) Notwithstanding anything else to the contrary contained in this
Section or elsewhere in this lease, Landlord, at its option, may terminate this
lease on thirty (30) days notice to Tenant given within ninety (90) days after
the occurrence of any of the following:
(i) The Leased Premises and/or Building shall be damaged or destroyed as
a result of an occurrence which is not covered by Landlord's
all-risk insurance; or
(ii) The Leased Premises and/or Building shall be damaged or destroyed
and the cost to repair the same shall amount to more than forty
(40%) percent of the cost of replacement thereof.
(c) Except to the extent specifically provided for in this lease, none of
the Minimum Rent and other sums payable by Tenant, nor any of Tenant's other
obligations under any provisions of this lease, shall be affected by any damage
to or destruction of the Leased Premises by any cause whatsoever, and Tenant
hereby specifically waives all other rights it might otherwise have under any
law or statute.
(d) In the event of any damage or destruction as described in subparagraph
(b) above, which occurs during the last two (2) years of the Term, Tenant shall
have the right to terminate this lease upon thirty (30) days' written notice to
Landlord given within ninety (90) days of such damage or destruction.
(e) The term "cost of replacement" as used in subparagraph (b) (ii) above
shall be determined by the company or companies selected by Landlord insuring
Landlord against the casualty in question, or if there shall be no insurance,
then as the parties hereto shall agree, or in absence of an insurance company
determination or an agreement, as shall be determined by arbitration in New York
according to the rules and practices of the American Arbitration Association
then in effect.
(f) Tenant shall give to Landlord and to all mortgagees of record prompt
written notice of any damage to or destruction of any portion of the Leased
Premises resulting from fire or other casualty.
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Section 8.2. Condemnation. (a) If the entire Leased Premises shall be
appropriated or taken under the power of eminent domain by any public or
quasi-public authority, or conveyance shall be made in lieu thereof, this lease
shall terminate and expire as of the date of such taking, and the parties shall
thereupon be released from all liability hereunder which accrues after the date
of such taking.
(b) Anything in this lease to The contrary notwithstanding, in the event
more than forty (40%) percent of the Leased Premises and/or the Property shall
be appropriated or taken, or conveyance made in lieu thereof, Landlord shall
have the right to cancel and terminate this lease as of the date of such taking
upon giving notice to Tenant of such election within thirty (30) days after such
taking. In the event of such cancellation, the parties shall thereupon be
released from any further liability under this lease (except for obligations
existing on the effective date of such termination).
(c) If a portion of the Leased Premises is taken, or conveyance made in
lieu thereof, and if This lease shall not be terminated as provided in the
preceding paragraph, Then the Minimum Rent shall be ratably apportioned
according to the space so taken, and Landlord shall, at its own expense, restore
the remaining portion of the Leased Premises to a complete architectural unit.
The cost of Landlord's obligation hereunder shall be limited to that portion of
the net proceeds of the condemnation award actually received and retained by
Landlord which are allocable to the Leased Premises.
(d) All compensation awarded or paid upon such a total or partial taking
of the Leased Premises shall belong to and be the property of Landlord without
any participation by Tenant; provided, however, that Tenant may make a separate
claim to The condemning authority for the unamortized value of its leasehold
improvements.
(e) In the event more than forty (40%) percent of the Leased Premises
and/or Property shall be appropriated or taken, or conveyance made in lieu
thereof, during the last two (2) years of the Term, Tenant shall have the right
to terminate this lease upon thirty (30) days' written notice after such taking.
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ARTICLE IX
FINANCING
Section 9.1. Financing. If any lending institution and/or any bonding
authority with which Landlord or any such bonding authority has negotiated or
may negotiate interim or long term financing for the Property or part thereof
does not approve the credit rating of Tenant, or if such lending institution or
bonding authority shall require change(s) in this lease as a condition of its
approval of this lease for such financing; and if within fifteen (15) days after
notice from Landlord if Tenant fails or refuses to execute with Landlord the
amendment or amendments to this lease accomplishing the change(s) which are
stated by Landlord to be needed in connection with approval of this lease for
purposes of such financing Landlord shall have the right to cancel this lease.
In the event of cancellation by Landlord hereunder, this lease shall be and
become null and void and both parties shall automatically be released as of the
date of Landlord's cancellation notice from any and all liability or obligation
under this lease, except that Landlord shall return the security, if any, made
by Tenant. Notwithstanding anything contained herein to the contrary, Tenant
shall not be required to agree, and Landlord shall not have any right of
cancellation for Tenant's refusal to agree, to any modification of the
provisions of this lease relating to the amount of Minimum Rent reserved, the
size and/or location of the Leased Premises, the duration and/or commencement
date of the Term.
Section 9.2. Subordination. (a) This lease shall be subject and
subordinate at all times to the lien of any mortgage or other encumbrance now or
hereafter placed on the real property of which the Leased Premises form a part
or any part thereof without the necessity of any further instrument or act on
the part of Tenant to effectuate such subordination, but Tenant covenants and
agrees to execute and deliver upon demand such further instrument or instruments
evidencing such subordination of this lease to any ground lease or the lien of
any such mortgage or other encumbrance as shall be desired by a ground lessor or
a mortgagee, or proposed lessor or mortgagee, or by any person.
(b) If any mortgagee requires that this lease be prior rather than
subordinate to any such mortgage, Tenant shall, promptly upon request therefor
by Landlord or such mortgagee, and without charge therefor, execute a document
effecting
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and/or acknowledging such priority, which document shall contain, at the option
of such mortgagee, an attornment obligation to the mortgagee as Landlord in the
event of foreclosure or to any party acquiring title through such mortgagee in
such event.
(c) Upon request of any mortgagee of record, Tenant shall give prompt
written notice in the manner provided in Section 11.14 of any default of
Landlord hereunder, and Tenant shall allow such mortgagee a reasonable length of
time (in any event, not less than sixty (60) days from the date of such notice)
in which to cure any such default. Any such notice shall be sent to the Mortgage
Loan Department of any such mortgagee at its home office address.
Section 9.3 Non-Disturbance Protection. Landlord agrees to request and use
its best efforts (without incurring any monetary obligations) to obtain
non-disturbance protection for Tenant from any current or future mortgagee of
the Property.
ARTICLE X
DEFAULT BY TENANT
Section 10.1. Default. Tenant shall be in default hereunder if (i) Tenant
fails to pay when due Minimum Rent and any other sums due under this lease and
such default shall continue for more than fifteen (15) days after written notice
from Landlord to Tenant; or (ii) Tenant fails to observe and perform any of the
other terms, covenants and/or conditions of this lease and such default shall
continue for more than thirty (30) days after written notice from Landlord to
Tenant; or (iii) Tenant fails to pay when due the Minimum Rent and any other sum
payable under this lease three (3) or more times in any period of twelve (12)
consecutive months; or (iv) Tenant transfers its interest in this lease in
violation of the provisions of Section 11.7 hereof; or (v) the interest of
Tenant in the Leased Premises shall be sold under execution or other legal
process; or (vi) any representation or warranty of Tenant contained in this
lease shall prove to be incorrect in any material respect on the date upon which
it was made. If the nature of a default under (ii) above is such that it cannot
reasonably be cured within the aforesaid cure period, and work thereon shall be
commenced within said period and diligently prosecuted to completion, then
Landlord's rights under Section 10.2 shall be abated. The Leased Premises and
all trade fixtures, equipment and inventory therein shall be conclusively
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deemed abandoned by Tenant upon (a) twenty (20) consecutive days' absence from
the Leased Premises by Tenant or its agents (unless such absence results from
fire or other casualty) together with the failure to pay Minimum Rent, or (b)
removal of all or a substantial portion of Tenant's trade fixtures, equipment or
inventory from the Leased Premises together with a failure to pay Minimum Rent.
In such event and in addition to Landlord's remedies set forth in Section 10.2
Landlord may enter the Leased Premises and may remove all such remaining trade
fixtures, equipment and inventory at Tenant's expense. All such property shall,
at Landlord's option, become the property of Landlord, or said property may be
placed in storage at Tenant's cost and expense, or may be sold or otherwise
disposed of, in which event The proceeds of such sale or other disposition shall
belong to Landlord.
If at any time there shall be filed by or against Tenant or any successor
tenant then in possession or any guarantor of either under this lease, in any
court pursuant to any statute either of the United States or of any state, a
petition (i) in bankruptcy, (ii) alleging insolvency, (iii) for reorganization,
(iv) for the appointment of a receiver, or (v) for an arrangement under the
Bankruptcy Code, Landlord may terminate Tenant's rights under this lease by
notice in writing to Tenant, and thereupon Tenant shall immediately quit and
surrender the Leased Premises to Landlord, but Tenant shall continue to be
liable for the payment of rent and all other sums due hereunder.
In the event Landlord may not, for any reason, terminate Tenant's rights
under this lease, and Tenant is in default of any of the terms, covenants or
conditions of this lease, then the Trustee of the debtor may assume this lease
only after he undertakes the following:
1. cures any default, or provides adequate assurance that he will
promptly cure such default;
2. compensates, or provides adequate assurance that he will promptly
compensate Landlord for any actual pecuniary loss resulting from
such default; and
3. provides adequate assurance of future performance.
Adequate assurance of future performance includes, but is not limited to,
adequate assurance: 1) of the source of rent and other consideration due under
the lease and 2) that assumption or assignment of the lease will not breach
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substantially any provisions, including, but not limited to, location, use or
exclusivity provisions, in any other lease, financing agreement, or master
agreement relating to the Property.
To assign the lease, the Trustee must assume the lease in accordance with
the Bankruptcy Code and provide adequate assurance of future performance by the
assignee, and must not be in default of any of the terms hereunder.
Section 10.2. Landlord's Rights on Default. In the event of any default by
Tenant, Landlord may (1) apply the Security specified in Section 1.1(f), if any,
toward the satisfaction and cure of such a default, and/or (2) re--enter the
Leased Premises and remove all persons and all or any property therefrom, by any
suitable action or proceeding at law, or by force or otherwise, without being
liable for any prosecution therefor or damages therefrom, and repossess and
enjoy the Leased Premises, with all additions, alterations and improvements, and
Landlord may, at its option, repair, alter, remodel and/or change the character
of the Leased Premises as it may deem fit, and/or (3) at any time relet the
Leased Premises or any part or parts thereof, as the agent of Tenant or in
Landlord's own right, and/or (4) terminate this lease upon not less than three
(3) days written notice to Tenant. The exercise by Landlord of any right granted
in this Section shall not relieve Tenant from the obligation to make all rental
payments, and to fulfill all other covenants required by this lease, at the time
and in the manner provided herein, and if Landlord so desires all current and
future rent and other monetary obligations due hereunder less the fair rental
value of the Leased Premises shall become immediately due and payable. Tenant,
throughout the remaining Term hereof, shall pay Landlord, no later than the last
day of each month during the Term, the then current excess, if any, of the sum
of the unpaid rentals and costs to Landlord resulting from such default by
Tenant over the proceeds, if any, received by Landlord from such reletting, if
any, but Landlord shall have no liability to account to Tenant for any excess.
Landlord shall not be required to relet the Leased Premises nor exercise any
other right granted to Landlord hereunder, nor shall Landlord be under any
obligation to minimize Tenant's loss as a result of Tenant's default, except
that Landlord agrees to use reasonable efforts to relet the Leased Premises. If
Landlord attempts to relet the Leased Premises, Landlord shall be the sole judge
as to whether or not a proposed tenant is suitable and acceptable.
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In the event of a breach by Tenant of any of the covenants or provisions
hereof, Landlord shall have, in addition to any other remedies which it may
have, the right to invoke any remedy allowed at law or in equity to enforce
Landlord's rights or any of them, as if re--entry and other remedies were not
herein provided for Tenant agrees that no demand for rent and no re--entry for
condition broken and no notice to quit possession or other notices prescribed by
statute shall be necessary to enable Landlord to recover such possession, but
that all right to any such demand and any such re-entry and any notice to quit
possession or other statutory notices or prerequisites are hereby expressly
waived by Tenant.
Section 10.3. Landlord's Self-Help. In addition to Landlord's rights of
self-help set forth elsewhere in this lease, if Tenant at any time fails to
perform any of its obligations under this lease in a manner satisfactory to
Landlord, Landlord shall have the right but not the obligation, upon giving
Tenant at least five (5) days' prior written notice of its election to do so (in
the event of any emergency no prior notice shall be required) to perform such
obligations on behalf of and for the account of Tenant and to take all such
action to perform such obligations. In such event, Landlord's costs and expenses
incurred therein including, but not limited to, attorneys' fees in instituting,
prosecuting or defending any action or proceeding, shall be paid for by Tenant
as additional rent, forthwith, with Interest (as defined in Section 11.10). The
performance by Landlord of any such obligation shall not constitute a release or
waiver of Tenant therefrom.
Section 10.4. Non-Waiver Provisions. The failure of either party to
insist upon a strict performance of any of the terms, conditions and covenants
herein shall not be deemed to be a waiver of any rights or remedies that that
party may have and shall not be deemed a waiver of any subsequent breach or
default in the terms, conditions and covenants herein contained except as may be
expressly waived in writing.
The maintenance of any action or proceeding to recover possession of the
Leased Premises, or any installment or installments of rent or any other moneys
that may be due or become due from Tenant to Landlord, shall not preclude
Landlord from thereafter instituting and maintaining subsequent actions or
proceedings for the recovery of possession of the Leased Premises or of any
other moneys that may be due or become due
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from Tenant. Any entry or re-entry by Landlord shall not be deemed to absolve or
discharge Tenant from liability hereunder.
Section 10.5. Landlord's Expenses. If Tenant shall at any time, be in
default hereunder, Tenant will reimburse Landlord for The expenses incurred by
Landlord by reason thereof, including but not limited to brokerage fees, court
costs and reasonable attorney's fees.
ARTICLE XI
OTHER PROVISIONS
Section 11.1. Definition and Liability of Landlord. The term "Landlord" as
used in this lease means only the owner or mortgagee in possession for the time
being of (or the managing agent of any such owner or mortgagee) so that in the
event of the sale of said Property an assignment of this lease, or a demise of
said Property together with any security deposit held therefore, Landlord shall
be and hereby is entirely freed and relieved of all obligations of Landlord
subsequently accruing and with respect to such security deposit. In addition to,
and without limiting the generality of the foregoing, Tenant hereby agrees not
to look to any mortgagee, mortgagee in possession or successor in title to the
property for accountability for any security deposit required by Landlord,
unless said sums have actually been received by said mortgagee as security for
Tenant's performance under the terms of the lease.
It is specifically understood and agreed that there shall be no personal
liability of Landlord (nor Landlord's agent, if any) in respect to any of the
covenants, conditions or provisions of this lease. In the event of a breach or
default by Landlord of any of its obligations under this lease, Landlord's
liability hereunder shall be limited to Landlord's equity in the Property. In no
event shall Tenant make any claim against or seek to impose any personal
liability upon any principal of any firm or corporation or any general or
limited partner of Landlord that may hereafter be or become the landlord for the
satisfaction of Tenant's remedies, or for the collection of a judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default by Landlord hereunder.
Tenant agrees that its sole remedies in cases where Landlord's
reasonableness in exercising its judgment or
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withholding its consent or approval is applicable pursuant to a specific
provision of this lease, or any rider or separate agreement relating to this
lease, if any, shall be those in the nature of an injunction, declaratory
judgment, or specific performance, the rights to money damages or other remedies
being hereby specifically waived.
Section 11.2. Relationship of the Parties. Nothing contained in this lease
shall be deemed or construed as creating the relationship of principal and agent
or of partnership or joint venture between the parties hereof, it being
understood and agreed that neither the method of computing rent nor any other
provisions contained herein nor any acts of the parties hereto shall be deemed
to create any relationship between the parties other than that of Landlord and
Tenant.
Section 11.3. Security Deposit. In the event Tenant has deposited any
security with Landlord, said sum shall be deposited in an interest--bearing
account, with interest to accrue, less one (1%) percent thereof to be retained
by Landlord as an administrative fee. Landlord may use, apply on Tenant's behalf
or retain during the Term the whole or any part of the security so deposited
(including any interest earned thereon) to the extent required for the payment
of any rent or other sums as to which Tenant may be in default hereunder or for
any sum which Landlord may expend by reason of Tenant's default in respect of
any of the terms of this lease, including but not limited to any deficiency or
damage incurred in reletting the Leased Premises. The covenants in this Section
11.3 are personal covenants between Landlord and Tenant and not covenants
running with the land, and in no event will Landlord's mortgagee(s) or any
purchaser at a foreclosure sale or a sale in lieu of foreclosure be liable to
Tenant for the return of the security deposit. After each application from
Tenant's security deposit, Tenant shall upon demand replenish said deposit to
the amount set forth herein.
Provided Tenant shall comply with all the terms of this lease, any
remaining security shall be returned to Tenant upon termination of this lease
and after surrender of possession of the Leased Premises to Landlord, together
with any accrued interest (less the administrative fee to be retained by
Landlord, as provided herein). In the event of a sale of the Property or
assignment of this lease by Landlord to any person other than a mortgagee,
Landlord shall have the right to transfer the security to its vendee or
assignee,
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subject to Tenant's aforesaid rights upon termination, and thereupon Landlord
shall be released from any liability with respect to the return of such security
to Tenant, such vendee or assignee to be solely responsible to Tenant therefor.
Tenant shall not assign or encumber its interest in the security deposit,
and neither Landlord nor its successors and assigns shall be bound by any
attempted assignment or encumbrance.
Section 11.4. Indemnity. Tenant agrees to indemnify and save Landlord
harmless from and against any and all claims and demands for, or in connection
with, any accident, injury or damage whatsoever caused to any person or property
arising directly or indirectly, out of the business conducted in or the use
and/or occupancy of the Leased Premises or occurring in or on the Leased
Premises or any part thereof, or arising directly or indirectly, from any act or
omission of Tenant or any concessionaire or subtenant or their respective
licensees, servants, agents, employees or contractors, and from and against any
and all cost, expense and liabilities incurred in connection with any such
claims and/or proceedings brought thereon. The comprehensive general liability
coverage maintained by Tenant pursuant to this lease shall specifically insure
the contractual obligations of Tenant as set forth in this Section and/or as
provided in this lease.
Section 11.5. Property in Leased Premises. All leasehold improvements,
such as light fixtures and heating and air--conditioning equipment, and other
construction which may be done by Tenant, shall when installed attach to the
freehold and become and remain the property of Landlord. Notwithstanding the
foregoing, all store fixtures or trade fixtures and drapes shall remain the
property of Tenant, subject at all times to Landlord's lien for rent and other
sums which may become due to Landlord under this lease.
All Tenant's personal property of every kind or description which may at
any time be in the Leased Premises shall be at Tenant's sole risk, or at the
risk of those claiming under Tenant, and Landlord shall not be liable for any
damage to said property or loss suffered by the business or occupation of Tenant
caused by water from any source whatsoever or from the bursting, overflowing or
leaking of sewer or steam pipes or from the heating or plumbing fixtures or from
electric wires or from gas or odors or caused in any manner whatsoever.
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Tenant shall pay before delinquency all taxes assessed against Tenant's
fixtures, furnishings, leasehold, improvements, equipment and stock-in-trade
placed in or on the Leased Premises. Any such taxes paid by Landlord shall be
due and payable within ten (10) days after billings therefor are rendered to
Tenant.
Section 11.6. Damage to Property or Persons. Landlord shall not be liable
for any loss of or damage to property of Tenant or of others located in the
Leased Premises or the Property, by theft or otherwise, nor for any loss or
damage whatsoever to any property which Tenant could remove at the end of the
Term as provided in Section 11.8 hereof. Landlord shall not be liable for any
injury or damage to persons or property or to the interior of the Leased
Premises resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, ice or snow or leaks from any part of the Leased
Premises 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. Landlord shall not be liable for any such injury or
damage caused by other tenants or any person(s) either in the Leased Premises or
elsewhere on the Property, or by occupants of property adjacent to the Property,
or by the public, or by operations in the construction of any private, public or
quasi-public work. Landlord shall not be responsible for damage or loss of
property of Tenant kept or stored on the Leased Premises, no matter how caused.
Section 11.7. Assignment or Subletting. (a) Tenant shall not assign its
interest under this lease or sublet all of the Leased Premises, nor shall Tenant
mortgage or hypothecate this lease or Tenant's interest in and to the Leased
Premises (hereinafter collectively referred to as "Transfer"), without the prior
written consent of Landlord. Consent by Landlord to any Transfer shall not
constitute a waiver of the necessity for such consent to any subsequent
Transfer. Any Transfer by Tenant in accordance with this Section shall be only
for the purposes specified in Section 1.1(e) hereof and for no other purpose,
and in no event shall any Transfer release or relieve Tenant from any
obligations of this lease.
(b) If the Tenant is a corporation (other than one whose shares are
regularly and publicly traded on a recognized stock exchange), any change in the
ownership (legal or equitable) of and/or power to vote fifty (50%) percent or
more of the outstanding capital stock of Tenant, whether such change
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of ownership is by sale, assignment, bequest, inheritance, operation of law or
otherwise, shall be deemed a Transfer and shall be subject to the provisions of
this Section.
(c) Notwithstanding anything to the contrary contained in this lease,
Tenant shall have the right to sublet a part (but not all) of the Leased
Premises or to enter into license or concession agreements for part (but not
all) of the Leased Premises with Landlord's prior written consent (which consent
shall not be unreasonably withheld or delayed)
Section 11.8. Surrender of Premises and Holding Over. At the expiration of
the tenancy hereby created, Tenant shall surrender the Leased Premises in good
condition, reasonable wear and tear excepted, and damage by unavoidable casualty
excepted to the extent that the same is covered by Landlord's all-risk fire
insurance policy, and Tenant shall surrender all keys for the Leased Premises to
Landlord at the place then fixed for the payment of rent and shall inform
Landlord of all combinations on locks, safes and vaults, if any, in the Leased
Premises. Tenant's obligation to observe or perform this covenant shall survive
the expiration or other termination of the Term. If, after notice in writing by
Landlord to deliver possession, Tenant shall default in so surrendering the
Leased Premises, Tenant's occupancy subsequent to such expiration, whether or
not with the consent or acquiescence of Landlord, shall be deemed to be that of
a tenancy at will and in no event from month to month or from year to year, and
it shall be subject to all the terms, covenants, conditions of this lease
applicable thereto, except that Minimum Rent shall be twice the amount payable
in the last year of the Term, and no extension or renewal of this lease shall be
deemed to have occurred by such holding over.
Prior to the expiration or sooner termination of this lease, Tenant shall
remove any and all trade fixtures, equipment and other unattached items which
Tenant may have installed, stored or left in the Leased Premises or elsewhere on
the Property, including but not limited to counters, shelving, showcases, chairs
and unattached movable machinery purchased or provided by Tenant and which are
susceptible of being moved without damage to the Building. Tenant shall repair
any damage to the Leased Premises caused by its removal of such fixtures and
movables. In the event Tenant does not make such repairs, Tenant shall be liable
for and agrees to pay Landlord's costs and expenses in making such repairs
together with a sum equal to fifteen (15%) percent of such costs and
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expenses to cover Landlord's overhead in making such repairs for Tenant. Tenant
shall not remove any plumbing or electrical fixtures or equipment, heating or
air-conditioning equipment, floor coverings (including but not limited to wall
to wall carpeting), walls or ceilings, all of which shall be deemed to
constitute a part of the freehold and/or leasehold interest of Landlord, as set
forth above, nor shall Tenant remove any fixtures or machinery that were
furnished or paid for by Landlord (whether initially installed or replaced).
Landlord shall have the right to inspect the Leased Premises within ninety (90)
days prior to the expiration or sooner termination of this lease, and within
fifteen (15) days after receipt of written notice from Landlord, Tenant shall
repair any damage to any of the above-mentioned equipment or to the said floor
coverings, walls or ceilings. In the event Tenant does not repair properly as
required hereunder and to the reasonable satisfaction of Landlord, then Landlord
may make such repairs without liability to Tenant and Tenant shall pay
Landlord's costs for making such repairs upon presentation of a bill therefor,
as additional rent. Said bill shall include Interest (as defined in Section
11.10) from the date such repairs were billed by the contractor(s) making such
repairs. The Leased Premises shall be left in a broom-clean condition. If Tenant
shall fail to remove its trade fixtures or other property as provided in this
Section 11.8, such fixtures and other property not removed by Tenant shall be
deemed abandoned by Tenant and at the option of Landlord shall become the
property of Landlord, or at Landlord's option may be removed by Landlord at
Tenant's expense plus fifteen (15%) percent as hereinabove provided, or placed
in storage at Tenant's expense, or sold or otherwise disposed of, in which event
the proceeds of such sale or other disposition shall belong to Landlord.
Section 11.9. Liens. Tenant shall discharge any lien filed against the
Property or any part thereof for work done or materials furnished with respect
to the Leased Premises within ten (10) days after it receives notice of the
filing of such lien. If Tenant fails to keep this covenant, in addition to any
other remedies available, to Landlord under this lease or otherwise, Landlord
may at its option discharge such lien, in which event Tenant agrees to pay
Landlord a sum equal to the amount of the lien thus discharged plus Landlord's
internal administrative costs, reasonable attorney's fees, expenses and damages
thereby caused Landlord.
Section 11.10. Interest. Whenever this lease refers to "Interest" same
shall be computed at a rate equal to the
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Prime Rate (as hereinafter defined) plus four (4) percentage points. If,
however, payment of interest at such rate Tenant (or by the tenant then in
possession having succeeded to the Tenant's interest in accordance with the
terms of this lease) should be unlawful, that is, violative of usury statutes or
otherwise, then "Interest" shall, as against such party, be computed at the
maximum contract rate payable by such party. Such amounts shall be payable as
additional rent hereunder. "Prime Rate" shall mean the rate being charged at the
time in question by Chase Manhattan Bank of New York, New York for short term
(90 day) unsecured loans made to its preferred customers.
Section 11.11. Lien of Landlord for Rent, Taxes and Other Sums. Landlord
shall have, and Tenant hereby grants a security interest in any furnishings,
equipment, fixtures, inventory, accounts receivable, or other personal property
of any kind belonging to Tenant, or the equity of Tenant therein, on the Leased
Premises. The security interest is granted for the purpose of securing The
payment of rent, other charges, assessments, penalties and damages herein
covenanted to be paid by Tenant and for the purpose of securing the performance
of all other obligations of Tenant hereunder. Upon Tenant's default or breach of
any covenants of this lease, Landlord shall have all remedies available under
the laws of the State of New York, including but not limited to the right to
take possession of the above mentioned property and dispose of it by public or
private sale in a commercially reasonable manner. Tenant hereby agrees to
execute and deliver from time to time Financing Statements at Landlord's request
for the purpose of serving notice to third parties of the security interest
herein granted. Tenant shall upon demand reimburse Landlord for all filing and
recording fees and taxes incurred in connection with filing and recording such
Financing Statements. The statutory lien for rent is not hereby waived, the
express contractual lien herein granted being in addition and supplementary
thereto.
Section 11.12. Late Payments. Should Tenant fail to pay when due any
installment of Minimum Rent or any other sum payable to Landlord under the terms
of this lease, then Interest shall accrue from and after the date which is five
(5) days after the date on which such sum shall be due and payable, and such
Interest shall be paid by Tenant to Landlord at the time of payment of the
delinquent sum.
Section 11.13. Waiver by Tenant. Tenant hereby expressly waives any and
all rights of redemption conferred by
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statute or otherwise, and, with respect to any litigation arising out of this
lease, and to the extent permitted by law, Tenant waives the right to file any
counterclaims or cross--claims against Landlord other than compulsory
counterclaims or cross-claims.
Section 11.14. Notices. Whenever notice may or shall be given to either of
the parties by the other, each such notice shall be by registered or certified
mail with return receipt requested, at the respective addresses of the parties
as contained herein or to such other address as either party may from time to
time designate in writing to the other, or, if to Tenant, such notice may also
be mailed in the manner described above, or delivered by hand, at the Leased
Premises. Any notice under this lease delivered by mail shall be deemed to have
been given at the time it is placed in the mails with sufficient postage
prepaid.
Section 11.15. Broker. The parties represent and warrant to each other
that no broker was involved on its behalf in negotiating or consummating this
lease and each agrees to indemnify and hold the other harmless from and against
any and all claims for brokerage commissions arising out of any communications
or negotiations had by either with any other broker regarding the Leased
Premises and/or the consummation of this lease.
Section 11.16. Short Form Lease. Tenant agrees not to record this lease
without the express written consent of Landlord, which consent shall not be
unreasonably withheld, and further agrees to execute, acknowledge and deliver at
any time after the date of this lease, at the request of Landlord, a "short form
lease" suitable for recording.
Section 11.17. Entire and Binding Agreement. This lease contains all of
the agreements between the parties hereto, and it may not be modified in any
manner other than by an agreement in writing signed by all the parties hereto or
their successors in interest. The terms, covenants, and conditions contained
herein shall inure to the benefit of and be binding upon Landlord and Tenant and
their respective successors and assigns, except as may be otherwise expressly
provided in this lease. Tenant acknowledges that neither Landlord nor any broker
has made any representations to or agreements with Tenant which are not
contained in this lease.
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Section 11.18. Provisions Severable. If any term or provision of this
lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this lease shall be valid and be enforced
to the fullest extent permitted by law.
Section 11.19. Captions. The captions contained herein are for convenience
and reference only and shall not be deemed as part of this lease or construed as
in any manner limiting or amplifying the terms and provisions of this lease to
which they relate.
Section 11.20. Force Majeure. Each party shall be excused for the period
of any delay in the performance of any obligations hereunder (other than the
non-specifically abated payment of Minimum Rent and all payments of additional
rent due under this lease), when prevented from so doing by cause or causes
beyond that party's control which shall include, without limitation, all labor
disputes, civil commotion, war, war--like operations, invasion, rebellion,
hostilities, military or usurped power, sabotage, governmental regulations or
controls, fire or other casualty, or through acts of God.
Section 11.21. Warranty of Title and Authority. The persons executing this
lease on behalf of Tenant hereby covenant and warrant that Tenant is a duly
constituted corporation qualified to do business in the state in which the
Property is located; and such persons are duly authorized by the board of
directors of Tenant to execute and deliver this lease on behalf of Tenant.
Section 11.22. No Jury Trial. Landlord and Tenant hereby mutually waive
their rights to 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, Tenant's use or
occupancy of the Leased Premises, and any claim of injury or damage.
Section 11.23 Renewal Option. In the event Tenant is not in default under
the terms of this lease, Tenant shall have the right to renew this lease for a
period of five (5) years (the "Renewal Term") upon written notice given to
Landlord not
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less than six (6) months' prior to the expiration of the original Term. Any such
renewal shall be upon the terms and conditions contained in this lease, except
that Tenant shall have no further right to renew. All references to the "Term"
in this lease shall be deemed to include the Renewal Term where appropriate.
Section 11.24. Miscellaneous. (a) All payments made by Tenant other than
Minimum Rent, including but not limited to Taxes and Utilities Charges, shall
constitute "additional rent" and Landlord shall have the same remedies for
Tenant's failure to pay additional rent as for failure to pay Minimum Rent.
(b) This lease shall be governed in all respects by the laws of the State
of New York. Any suit arising out of this lease only shall be brought in the
State or Federal Courts located in the State of New York. In the event of any
such suit, the parties hereto consent to the personal jurisdiction of such
courts and waive any defense based on improper venue.
(c) Tenant shall not be entitled to exercise any right of termination or
other option granted to it by This lease (if any) at any time when Tenant is in
default in the performance or observance of any of the covenants, terms,
provisions or conditions on its part to be performed or observed under this
lease.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this lease as
of the day and year first above written, each acknowledging receipt of an
executed copy hereof.
WITNESS: LANDLORD:
___________________________ /s/ Peter Castellana, Jr.
---------------------------
Peter Castellana, Jr.
___________________________ ___________________________
Marie Castellana
ATTEST: TENANT:
Western Beef -- l73rd Street Inc.
By: /s/ Frank Castellana
Tenant's Federal Employer
Identification Number:
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STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On the day of October , 1992, before me personally came Peter Castellana,
Jr., to me known, to be the individual described in, and who executed, the
foregoing instrument, and acknowledged that he executed the same.
PETER R. ADMIRAND
Notary Pubic. State of New York
No. 304964094
Qualified in Nassau County
Commission Expires March 24,1994
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the day of , 1992, before me personally came Marie Castellana, to me
known, to be the individual described in, and who executed, the foregoing
instrument, and acknowledged that she executed the same.
Notary Public
STATE OF NEW YORK )
) as.:
COUNTY OF NASSAU )
On the 21 day of October, 1992, before me personally came Frank
Castellana, to me known, who, being by me duly sworn, did depose and say that he
resides at 8698 86 St., Brooklyn, NY and that he is the President of Western
Beef--173rd Street Inc., the corporation described in, and which executed the
foregoing instrument; that he knows the seal of the corporation; that the seal
affixed to said instrument is such corporate seal: that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
Notary Public
PETER R. ADMIRAND
Notary Public. State of New York
No- 304964094
Qualified in Nassau County
Commission Expires March 24, 1994
-36-
This Lease made the 1st day of March 1990, between
Elmont Q. Properties, Inc.
Hereinafter referred to as LANDLORD, and
Western Beef - East New York, Inc.
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant
hereby hires and takes from the Landlord Entire Building and Parking Lot in the
building known as 1213 East New York Avenue, Brooklyn, N.Y. 11212 to be used and
occupied by the Tenant As a Retail Supermarket
And for no other purpose, for a term to commence on March 1, 1990, and to end on
30 April 2000, unless sooner terminated as hereinafter provided, at the ANNUAL
RENT of $211,557.00 ($17,629.75 per month) with a 3% Annual Increase Plus a 5
Year Option.
all payable in equal monthly installments in advance on the first day of each
and every calendar month during said term, except the first installment, which
shall be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
SECOND.--That, throughout said term the Tenant will take good care of the
demised premises, fixtures, and appurtenances, and all alterations, additions
and improvements to either; make all repairs in and about the same necessary to
preserve them in good order and condition, which repairs shall be, in quality
and class, equal to the original work; promptly pay the expense of such repairs;
suffer no waste or injury; give prompt notice to the Landlord of any fire that
may occur; execute and comply with all laws, rules, orders, ordinances and
regulations at an time issued or in force (except those requiring structural
alterations), applicable to the demised premises or to the Tenant's occupation
thereof, of the Federal, State and Local Governments, and of each and every
department, bureau and official thereof, and of the New York Board of Fire
Underwriters; permit at all times during usual business hours, the Landlord and
representatives of the Landlord to enter the demised premises for the purpose of
inspection, and to exhibit them for purposes of sale or rental; suffer the
Landlord to make repairs and improvements to all parts of the building, and to
comply with all orders and requirements of governmental authority applicable to
said building or to any occupation thereof; suffer the Landlord to erect, use,
maintain, repair and replace pipes and conduits in the demised premises and to
the floors above and below; forever indemnify and save harmless the Landlord for
and against any and all liability, penalties, damages, expenses and judgments
arising from injury during said term to person or property of any nature,
occasioned wholly or in part by any act or acts, omission or omissions of the
tenant, or of the employees, guests, agents, assigns or undertenants of the
Tenant and also for any matter or thing growing out of the occupation of the
demised premises or of the streets, sidewalks or vaults adjacent thereto;
permit, during the six months next prior to the expiration of the term the usual
notice "To Let" to be placed and to remain unmolested in a conspicuous place
upon the exterior of the demised premises; repair, at or before the end of the
term, all injury done by the installation or removal of furniture and property;
and at the end of the term, to quit and surrender the demised premises with all
alterations, additions and improvements in good order and condition.
THIRD.--That the Tenant will not disfigure or deface any part of the building,
or suffer the same to be done, except as for as may be necessary to affix such
trade fixtures as are herein consented to be the Landlord; the Tenant will not
obstruct, or permit the obstruction of the street or the sidewalk adjacent
thereto; will not do anything, or suffer anything to be done upon the demised
premises which will increase the rate of fire insurance upon the building upon
the building or any of its contents, or be liable to cause structural injury to
said building; will not permit the accumulation of waste or refuse matter, and
will not, without the written consent of the Landlord first obtained in each
case, either sell, assign, mortgage or transfer this lease, underlet the demised
premises or any part thereof, permit the same or any part thereof to be occupied
by anybody other than the Tenant and the Tenant's employees, make any
alterations in the demised premises, use the demised premises or any part
thereof for any purpose other than the one first above stipulated, or for any
purpose deemed extra hazardous on account of fire risk, nor in violation of any
law or ordinance. That the Tenant will not obstruct or permit the obstruction of
the light, halls, stairway or entrances to the building, and will not erect or
inscribe any sign, signals or advertisements unless and until the style and
location thereof have been approved by the Landlord; and if any be erected or
inscribed without such approval, the Landlord may remove the same. No water
cooler, air conditioning unit or system or other apparatus shall be installed or
used without the prior written consent of Landlord.
IT IS MUTUALLY CONVENANTED AND AGREED, THAT
FOURTH.--If the demised premises shall be partially damaged by fire or other
cause without the fault or neglect of Tenant, Tenant's servants, employees,
agents, visitors or licenses, the damages shall be repaired by and at the
expense of the Landlord and the rent until such repairs shall be made shall be
apportioned according to the part of the demised premises which is usable by
Tenant. But if such partial damage is due to the fault or neglect of Tenant,
Tenant's servants, employees, agents, visitors or licensees, without prejudice
to any other rights and remedies of Landlord and without prejudice to the rights
of subrogation of Landlord's insurer, the damages shall be repaired by Landlord
but there shall be no apportionment or abatement of rent. No penalty shall
accrue for reasonable delay which may arise by reason of adjustment or insurance
of the part of Landlord and/or Tenant, and for reasonable delay on account of
"labor troubles", or any other cause beyond Landlord's control. If the demised
premises are totally damaged or are rendered wholly untenantable by fire or
other cause, and if Landlord shall decide not to restore or not to rebuild the
same, or if the building shall be so damaged that Landlord shall decide to
demolish it or to rebuild it, then or in any of such events Landlord may, within
ninety (90) days after such fire or other cause, give Tenant a notice in writing
of such decision, which notice shall be given as in Paragraph twelve hereof
provided, and thereupon 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
demised 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 sentence immediately preceding, Tenant's
liability for rent shall cease as of the day following the casualty. Tenant
hereby expressly waives the provisions of Section 227 of the Real Property Law
and agrees that the foregoing provisions of the Article shall govern and control
in lieu thereof. If the damage or destruction be due to the fault or neglect of
Tenant the debris shall be removed by, and at the expense of, Tenant.
FIFTH.--If the whole or any part of the premises hereby demised shall be taken
or condemned by any competent authority for any public use or purpose then the
term hereby granted shall case from the time when possession of the part so
taken shall be required for such public purpose and without apportionment of
award, the Tenant hereby assigning to the Landlord all right and claim to any
such award, the current rent, however, in such cases to be apportioned.
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated a
bankrupt, or make a "general assignment," or take the benefit of any insolvent
act, or if a Receiver or Trustee by appointed for the tenant's property, or if
this lease or the estate of the Tenant hereunder be transferred or pass or to
devolve upon any other person or corporation, or if the Tenant shall default in
the performance of an agreement by the Tenant contained in any other lease to
the Tenant by the Landlord or by any corporation of which an officer of the
Landlord is a Director, this lease shall thereby, at the option of the Landlord,
be terminated and in that case, neither the Tenant nor anybody claiming under
the Tenant shall be entitled to go into possession of the demised premise. If
after the commencement of the term, any of the events mentioned above in the
subdivision shall occur, or if Tenant shall make default in fulfilling any of
the covenants of this lease, other than the covenants for the payment of rent or
"additional rent" or if the demised premises become vacant or deserted, the
Landlord may give to the Tenant ten day's notice of intention to end the term of
this lease, and thereupon at the expiration of said ten day's (if said condition
which was the basis of said notice shall continue to exist) the term under this
lease shall expire as fully and completely as if that day were the date herein
definitely fixed for the expiration of the term and the Tenant will then quit
and surrender the demised premises to the Landlord, but the Tenant shall remain
liable as hereinafter provided.
If the Tenant shall make default in the payment of the rent reserved hereunder,
or any item of "additional rent" herein mentioned, or any part of either or in
making any other payment herein provided for, or if the notice last above
provided for shall have been given and if the condition which was the basis said
notice shall exist at the expiration of said ten day's period, the Landlord may
immediately, or at any time thereafter, re-enter the demised premises and remove
all persons and all or any property therefrom, either by summary dispossess
proceedings, or by any suitable action or proceeding at law, or by force or
otherwise, without being liable to indictment, prosecution or damages therefor,
and re-possess and enjoy said premises together with all additions, alterations
and improvements. In any such case or in the event that this lease by
"terminated" before the commencement of the term, as above provided, the
Landlord may either re-let the demised premises or any part or parts thereof for
the Landlord's own account, or may, at the Landlord's option, re-let the demised
premises or any part or parts thereof as the agent of the Tenant, and receive
the rents therefore, applying the same first to the payment of such expenses as
the Landlord may have incurred, and then to the fulfillment of the covenants of
the Tenant herein, and the balance, if any, at the expiration of the term first
above provided for, shall be paid to the Tenant, Landlord may rent the premises
for a term extending beyond the term hereby granted without releasing Tenant
from any liability. In the event that the term of this lease shall expire as
above in this subdivision "Sixth" provided, or terminate by summary proceedings
or otherwise, and if the Landlord shall not re-let the demised premises for the
Landlord's own account, then, whether or not the premises be re-let, the Tenant
shall remain liable for, and Tenant hereby agrees to pay to the Landlord, until
the time when this leas would have expired but for such termination or
expiration, the equivalent, of the amount of all of the rent and "additional
rent" reserved herein, less the avails of reletting, if any, and the same shall
be due and payable by the Tenant to the Landlord on the several rent days above
specified, that is, upon each of such rent days the Tenant shall pay to the
Landlord the amount of deficiency then existing. The Tenant hereby expressly
waives any and all right of redemption in case the Tenant shall be dispossessed
by judgment or warrant of any court or judge, and the tenant waives and will
waive all right to trial by jury in any summary proceedings hereafter instituted
by the Landlord against the Tenant waives and will waive all right to trial by
jury in any summary proceedings hereafter instituted by the Landlord against the
Tenant in respect to the demised premises. The words "re-enter" and "re-entry"
as used in this lease are not restricted to their technical legal meaning.
In the event of a breach or threatened breach by the Tenant of any of the
covenants, or provisions hereof, the 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.
SEVENTH.--If the tenant shall make default in the performance of any covenant
herein contained, the Landlord may immediately, or at any time thereafter,
without notice, perform the same for the account of the Tenant If a notice of
mechanic's lien be filed against the demised premises or against premises or
which the demise premises are part, for, or purporting to be for, labor or
material alleged to have been furnished, or to be furnished to be or for the
Tenant at the demised premises, and if the Tenant shall fail to take such action
as shall cause such lien to be discharged within fifteen days after the filing
of such notice, the Landlord may pay the amount of such lien or discharge the
same by deposit or by bonding proceedings, and in the event of such deposit or
bonding proceedings, the Landlord may pay any judgement recovered on such claim.
Any amount paid or expense incurred by the Landlord as in this subdivision of
this lease provided, an any amount as to which the Tenant shall at an time be in
default for or in respect to the use of water, electric current or sprinkler
supervisory service, and any expense incurred or sum of money paid by the
Landlord by reason of the failure of the Tenant to comply with any provision
hereof, or in defending any such action, shall be deemed to be "additional rent"
for the demised premises, and shall be due and payable by the Tenant to the
Landlord on the first day of the next following month, or at the option of the
Landlord, on the first day of any succeeding month. The receipt by the Landlord
of any installment of the regular stipulated rent hereunder or any of said
"additional rent" shall not be a waiver of any other "additional rent" then due.
EIGHTH.--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 herein 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 hereof no
further assignment shall be made without express consent in writing by the
Landlord.
NINTH.--If this lease be assigned, or if the demised premises or any part
thereof be underlet or occupied by anybody other than the Tenant the Landlord
may collect rent from the assignee, under-tenant or occupant, and apply the net
amount collected to the rent herein reserved, and no such collection shall be
deemed a waiver of the covenant herein against assignment and under-letting, or
the acceptance of the assignee, under-tenant or occupant as tenant, or a release
of the Tenant from the further performance by the Tenant of the covenants herein
contained on the part of the Tenant.
TENTH.--This lease 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 line upon the
premises. 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.
ELEVENTH.--All improvements made by the Tenant to or upon the demised premises,
except said trade fixtures, shall when made, at once be deemed to be attached to
the freehold, and become the property of the Landlord, and at the end or other
expiration of the term, shall be surrendered in the Landlord in as good order
and condition as they were when installed, reasonable wear and damages by the
elements excepted.
TWELFTH.--Any notice or demand which under the terms of this lease or under any
statute must or may be given or made by the parties hereto shall be in writing
and shall be given or made by mailing the saem by certified or registered mail
addressed to the respective parties at the addresses set forth in this lease.
THIRTEENTH.--The Landlord shall not be liable for any failure of water supply or
electrical current, sprinkler damage, or failure of sprinkler service, nor for
injury or damage to person or property caused by the elements or by other
tenants or persons in said building or resulting from steam, gas, electricity,
water, rain or snow, which may leak or flow from any part of said buildings, or
from the pipes, appliances or plumbing works of the same, or from the street or
sub-surface, or from any other place, n or for interference with light or other
incorporeal heerditaments by anybody other than the Landlord, or caused by
operations by or for a governmental authority in construction of any public or
quasi-public work, neither shall the Landlord be liable for any latent defect in
the building.
FOURTEENTH.--No diminution or abatement of rent, or other compensation shall be
claimed or allowed for inconvenience or discomfort arising form the making of
repairs or improvements to the building or to its appliances, nor for any space
taken to comply with any law, ordinance or order of a governmental authority. In
respect to the various "services," if any, herein expressly or impliedly agreed
to be furnished by the Landlord to the Tenant, it is agreed that there shall be
no diminution or abatement of the rent, or any other compensation, for
interruption or curtailment of such "service" when such interruption or
curtailment shall be due to accident, alterations or repairs desirable or
necessary to be made or to inability or difficulty in securing supplies or labor
for the maintenance of such "service" or to some other cause, not gross
negligence on the part of the Landlord. No such interruption or curtailment of
any such "service" shall be deemed a constructive eviction. The Landlord shall
not be required to furnish, and the Tenant shall not be entitled to receive, any
of such "services" during any period wherein the Tenant shall be in default in
respect to the payment of rent. Neither shall there by any abatement or
diminution of rent because of making of repairs, improvements or decorations to
the demised premises after the date above fixed for the commencement of the
term, it being understood that rent shall, in any event, commence to run at such
date so above fixed.
FIFTEENTH.--The Landlord may prescribe and regulate the placing of safes,
machinery, quantities of merchandise and other things. The Landlord may also
prescribe and regulate which elevator and entrances shall be used by the
Tenant's employees and for the Tenant's shipping. Th Landlord may make such
other and further rules and regulations as, in the Landlord's judgment, may from
time to time be needul for the safety, care or cleanliness of the building, and
for the preservation of good order therin. The Tenant and the emplyoees and
agents of the Tenant will observe and conform to all such rules and regulations.
SIXTEENTH.--In the event that na excavation shall be made for building or other
purposes upon land adjacent to the demised premises or shall be contemplated to
be made, the Tenant shall afford to the person or persons causing or to cause
such excavation, license to enter upon the demised premises for the purpose of
doing such work as said person or persons shall deem to be necessary to perserve
the walls, sturcture or structures upon the demised premises from injury dn to
support the same by proper foundations.
SEVENTEENTH.--No vaults or space not within the property line of the building
are lease hereunder. Landlord makes no representation as to the location of the
property line of the building. Such vaults or space as Tenant may be permitted
to sue or occupy are to be used or occupied under a revocable license and if
such license be revoked by the Landlord as to the use of part or all of the
vaults or space Landlord shall not be subject to any liability; Tenant shall not
be entitled to any compensation or reduction in rent nor shall this be deemed
constructive or actual eviction. Any tax, fee or charge of municipal or other
authorities for such vaults or space shall be paid by the Tenant for the period
of the Tenant's use or occupancy thereof.
EIGHTEENTH.--That during seven months prior to the expiration of the term hereby
granted, applicants shall be admitted at all reasonable hours of the day to view
the premises until rented; and the Landlord and the Landlord's agents shall be
permitted at any time during the term to visit and examine them at any
reasonable hour of the day, and workmen may enter at any time, when authorized
by the Landlord or the Landlord's agents, to make or facilitate repairs in any
part of the building; and if the said Tenant shall not be personally present to
open and permit an entry into said promises at any time, when for any reason an
entry therein shall be necessary or permissible hereunder, the landlord or the
Landlord's agents may forcibly enter the same without rendering the Landlord or
such agents liable to any claim or cause of action for damages by reason thereof
(if during such entry the Landlord shall accord reasonable care to the Tenant's
property) and without in any manner affecting the obligations and covenants of
this lease; it is, however, expressly understood that the right and authority
hereby reserved, does not impose, nor does the Landlord assume, by reason
thereof, any responsibility or liability whatsoever for the care of supervision
of said premises, or any of the pipes, fixtures, appliances or appurtenances
therein contained or therewith in any manner connected.
NINETEENTH.--The Landlord has made no representations or promises in respect to
said building or to the demised premises except those contained herein, and
those, if any, contained in some written communication to the Tenant, signed by
the Landlord. This instrument may not be changed, modified, discharged or
terminated orally.
TWENTIETH.--If the Tenant shall at any time be in default hereunder, and if the
Landlord shall institute an action or summary proceeding against the Tenant
based upon such default, 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. Also so long as the Tenant shall be
a tenant hereunder the amount of such expenses shall be deemed to be "additional
rent" hereunder and as the Tenant shall be a Tenant to the Landlord on the first
day of the month following the incurring of such respective expenses.
TWENTY-FIRST.--Landlord shall not be liable for failure to give possession of
the premises upon commencement date by reason of the fact that premises are not
ready for occupancy, or due to a prior Tenant wrongfully holding over or any
other person wrongfully in possession or for any other reason; in such event the
rent shall not commence until possession is given or is available, but the term
herein shall not be extended.
THE TENANT FURTHER COVENANTS:
IF A FIRST
FLOOR
TWENTY-SECOND.--If the demised premises or any part thereof consist of a store,
or of a first floor, or of any part thereof, the Tenant will keep the sidewalk
and curb in front thereof clean at all times and free from snow and ice, and
will keep insured in favor of the Landlord, all plate glass therein and furnish
the Landlord with policies of insurance covering the same.
INCREASED
FIRE
INSURANCE
RATE
TWENTY-THIRD.--If by reason of the conduct upon the demised premises of a
business not herein permitted, or if by reason of the improper or careless
conduct of any business upon or use of the demised premises, the fire insurance
rate shall at any time be higher than it otherwise would be, then the Tenant
will reimburse the Landlord, as additional rent hereunder, for that part of all
fire insurance premiums hereafter paid out by the Landlord which shall have been
charged because of the conduct of such business not so permitted, or because of
the improper or careless conduct of any business upon or use of the demised
premises, and will make such reimbursement upon the first day of the month
following such outlay by the Landlord; but this covenant shall not apply to a
premium for any period beyond the expiration date of this lease, first above
specified. In any action or proceeding wherein the Landlord and the Tenant are
parties, a schedule or "make up" of rate for the building on the demised
premises, purporting to have been issued by New York Fire Insurance Exchange, or
other body making fire insurance rates for the demised premises, shall be prima
facie evidence of the facts therein stated and of the several items and charges
included in the fire insurance rate then applicable to the demised premises.
WATER RENT
SEWER
TWENTY-FOURTH.--If a separate water meter be installed for the demised premises,
or any part thereof, the Tenant will keep the same in repair and pay the charges
made by the municipality or water supply company for or in respect to the
consumption of water, as and when bills therefor are rendered. If the demised
premises, or any part thereof, be supplied with water through a meter which
supplies other premises, the Tenant will pay to the Landlord, as and when bills
are rendered therefor, the Tenant's proportionate part of all charges which the
municipality or water supply company shall made for all water consumed through
said meter, as indicated by said meter. Such proportionate part shall be fixed
by apportioning the respective charge according to floor area against all of the
rentable floor area in the building (exclusive of the basement) which shall have
been occupied during the period of the respective charges, taking into account
the period that each part of such area was occupied. Tenant agrees to pay as
additional rent the Tenant's proportionate part, determined as aforesaid, of the
sewer rent or charge imposed or assessed upon the building of which the premises
are a part.
ELECTRIC
CURRENT
TWENTY-FIFTH.--That the Tenant will purchase from the Landlord, if the Landlord
shall so desire, all electric current that the Tenant requires at the demised
premises and will pay the Landlord for the same, as the amount of consumption
shall be indicated by the meter furnished therefor. The price for said current
shall be the same as that charged for consumption similar to that of the Tenant
by the company supplying electricity in the same community. Payments shall be
due as and when bills shall be rendered. The Tenant shall comply with like
rules, regulations and contract provisions as those prescribed by said company
for a consumption similar to that of the Tenant.
SPRINKLER
SYSTEM
TWENTY-SIXTH.--If there now is or shall be installed in said building a
"sprinkler system" the Tenant agrees to keep the appliances thereto in the
demised premises in repair and good working condition, and if the New York Board
of Fire Underwriters or the New York Fire Insurance Exchange or any bureau,
department of official of the State or local government requires or recommends
that any changes, modifications, alterations or additional sprinkler heads or
other equipment be made or supplied by reason of the Tenant's business, or the
location of partitions, trade fixtures, or other contents of the demised
premises, or if such changes, modifications, alterations, additional sprinkler
heads or other equipment in the demised premises are necessary to prevent the
imposition of a penalty or charge against the full allowance for a sprinkler
system in the fire insurance rate as fixed by said Exchange, or by any Fire
Insurance Company, the Tenant will at the Tenant's own expense, promptly made
and supply such changes, modifications, alterations, additional sprinkler heads
or other equipment. As additional rent hereunder the Tenant will pay to the
Landlord, annually in advance, throughout the term $ toward the contract price
for sprinkler supervisory service.
SECURITY
TWENTY-SEVENTH.--The sum of Dollars is deposited by the Tenant herein with the
Landlord herein as security for the faithful performance of all the covenants
and conditions of the lease by the said Tenant. If the Tenant faithfully
performs all the covenants and conditions on his part to be performed, then the
sum deposited shall be returned to said Tenant.
NUISANCE
TWENTY-EIGHTH.--This lease is granted and accepted on the especially understood
and agreed condition that the Tenant will conduct his business ins such a
manner, both as regards noise and kindred nuisances, as will in no wise
interfere with, annoy, or disturb any other tenants, in the conduct of their
several businesses, or the Landlord in the management of the building; under
penalty of forfeiture of this lease and consequential damages.
BROKERS
COMMISSIONS
TWENTY-NINTH.--The Landlord hereby recognizes as the broker who negotiated and
consummated this lease with the Tenant herein, and agrees that if, as, and when
the Tenant exercises the option, if any, contained herein to renew this lease,
or fails to exercise the option, if any, contained therein to cancel this lease,
the Landlord will pay to said broker a further commission in accordance with the
rules and commission rates of the Real Estate Board in the community. A sale,
transfer, or other disposition of the Landlord's interest in said lease shall
not operate to defeat the Landlord's obligation to pay the said commission to
the said broker. The Tenant herein hereby represents to the Landlord that the
said broker is the sole and only broker who negotiated and consummated this
lease with the Tenant.
WINDOW
CLEANING
THIRTIETH.--The Tenant agrees that it will not require, permit, suffer, nor
allow the cleaning of any windows, or windows, in the demised premises from the
outside (within the meaning of Section 202 of the Labor Law) unless the
equipment and safety devices required by law, ordinance, regulation or rule,
including, without limitation, Section 202 of the New York Labor Law, are
provided and used, and unless the rules, or any supplemental rules of the
Industrial Board of the State of New York are fully completed with; and the
Tenant hereby agrees to indemnify the Landlord, Owner, Agent, Manager and/or
Superintendent, as a result of the Tenant's requiring, permitting, suffering, or
allowing any window, or windows in the demised premises to be cleaned from the
outside in violation of the requirements of the aforesaid laws, ordinances,
regulations and/or rules.
VALIDITY
THIRTY-FIRST.--The invalidity or unenforceability of any provision of this lease
shall in no way affect the validity or enforceability of any other provision
hereof.
EXECUTION
& DELIVERY
OF LEASE
THIRTY-SECOND.--In order to avoid delay, this lease has been prepared and
submitted to the Tenant for signature with the understanding that it shall not
bind the Landlord unless and until it is executed and delivered by the Landlord.
EXTERIOR OF
PREMISES
THIRTY-THIRD.--The Tenant will keep clean and polished all metal, trim, marble
and stonework which are a part of the exterior of the premises, using such
materials and methods as the Landlord may direct, and if the Tenant shall fail
to comply with the provisions of this paragraph, the Landlord may cause such
work to be done at the expense of the Tenant.
PLATE GLASS
THIRTY-FOURTH.--The Landlord shall replace at the expense of the Tenant any and
all broken glass in the skylights, doors and walls in and about the demised
premises. The Landlord may insure and keep insured all plate glass in the
skylights, doors and walls in the demised premises, for and in the name of the
Landlord and bills for the premiums therefor shall be rendered by the Landlord
to the Tenant at such times as the Landlord may elect, and shall be due from and
payable by the Tenant when rendered, and the amount thereof shall be deemed to
be, and shall be paid as, additional rent.
WAR
EMERGENCY
THIRTY-FIFTH.--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 nowise be affected, impaired or excused because Landlord
is unable 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
repairs, additions, alterations or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of governmental preemption in connection with a
National Emergency declared by the President of the United States or in
connection with any rule, order or regulation of any department or subdivision
thereof of any government agency or by reason of the conditions of supply and
demand which have been or are affected by war or other emergency.
THE LANDLORD COVENANTS
QUIET
POSSESSION
FIRST.--That if and so long as the Tenant pays the rent and "additional rent"
reserved hereby, and performs and observes the covenants and provisions hereof,
the Tenant shall quietly enjoy the demised premises, subject, however, to the
terms of this lease, and to the mortgages above mentioned, provided however,
that this covenant shall be conditioned upon the retention of title to the
premises by Landlord.
ELEVATOR
HEAT
SECOND.--Subject to the provisions of Paragraph "Fourteenth" above the Landlord
will furnish the following respective services: (a) Elevator service, if the
building shall contain an elevator or elevators, on all days except Sundays and
holidays, from A.M. to P.M. on Saturdays from A.M. to P.M.: (b) Heat, during the
same hours on the same days in the cold season in each year.
THIS IS A TRIPLE NET LEASE.
And it is mutually understood and agreed that the covenants and agreements
contained in the within lease shall be binding upon the parties hereto and upon
their respective successors, heirs, executors and administrators.
In Witness Whereof, the Landlord and Tenant have respectively signed and sealed
these presents th day and year first above written.
/s/ Peter Castellana, Jr
Landlord
IN PRESENCE OF:
/s/ Frank Castellana
Tenant
STORE LEASE
BETWEEN
ANT REALTY CORP., Landlord
and
WESTERN BEEF, ROCKAWAY BLVD., INC., Tenant
THE VINCENT A. DeIORIO LAW FIRM
2975 Westchester Avenue
Purchase, NY 10577
(914) 696-5555
<PAGE>
STORE LEASE
The Landlord and the Tenant agree to lease the Rental Space for the Term
and at the Rent stated as follows: (The words Landlord and Tenant include all
landlords and all tenants under this lease.)
Landlord: ANT Realty Corp.
Address: 47-05 Metropolitan Avenue
Flushing, New York 11385
Tenant: WESTERN BEEF, ROCKAWAY BLVD., Inc.
Address: 145-35 Rockaway Blvd.
Queens, New York
Rental Space: Approximately 4,500 square feet of ground floor space constituting
the entire underroof area,
in the Building at: 145-35 Rockaway Blvd., Queens, New York, together with all
abutting parking areas, the property being more particularly described on the
Queens County Assessor's Records as Block 12049 Lot 114, the total lot
consisting of approximately 25,000 square feet.
Date of Lease: January 30, 1997
Term: 20 years, ending January 31, 2017 with option to extend for five (5)
years. See Exhibit "B" attached.
Rent: The Rent is payable in advance at the Offices of Landlord beginning
February 1, 1997 and thereafter on the first day of each and every month in
accordance with the "Schedule of Rents" annexed hereto and made a part hereof.
Security: none
Insurance: A. Liability - Minimum $5,000,000-$20,000,000 (See para. 6A)
B. Property/Rental (See para. 6B)
Use of Rental Space - as and for the operation of a Supermarket and no other
purpose.
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1. Possession and Use
Landlord shall give possession of the Rental Space to Tenant for the Term.
Tenant shall take possession of and use the Rental Space for the purpose stated
above. Tenant may not use the Rental Space for any other purpose without the
written consent of the Landlord.
Tenant shall not allow the Rental Space to be used for any unlawful or
hazardous purpose. Tenant is satisfied that the Rental Space is zoned for the
Use stated. Tenant shall obtain and maintain any necessary certificate of
occupancy or other certificate permitting Tenant to use the Rental Space.
Tenant shall not use the Rental Space in any manner that results in (1) an
increase in the rate of fire or liability insurance or (2) cancellation of any
fire or liability insurance policy on the Rental Space. Tenant shall comply with
all requirements of the insurance companies insuring the Rental Space. Tenant
shall not abandon the Rental Space during the Term of this Lease or permit it to
become vacant for more than sixty (60) continuous days.
2. Delay in Giving of Possession
[This section has been intentionally deleted.]
3. No Assignment or Subletting
Tenant may not do any of the following without the Landlord's prior
written consent: (a) assign this Lease (if Tenant is a corporation, the sale of
a majority of its shares shall be treated as an assignment), (b) sublet all or
any part of the Rental Space or (c) permit any other person or business to use
the Rental Space.
The foregoing notwithstanding, Tenant shall have the right to grant
license or concession agreements, utilizing a portion of the premises, without
need for obtaining Landlord's consent, provided that the aggregate total usage
or utilization by Licensees and/or Concessionaires does not exceed 1000 square:
4. Rent and Additional Rent
[This section has been intentionally deleted]
5. Security
[This section has been intentionally deleted]
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6. Insurance
A. Liability
Tenant shall obtain, pay for, and keep in effect for the benefit of
Landlord and Tenant, public liability insurance on the Rental Space. The
insurance company and the broker must be acceptable to Landlord. This coverage
must be in at least the minimum amounts stated above and shall include Landlord
as a direct insured party.
Tenant shall deliver the original policy to the Landlord with proof of
payment of the initial premium. This shall be done not less than 15 days before
the Beginning of the Term. Tenant shall deliver a renewal policy to the Landlord
with proof of payment not less than 20 days before the expiration date of each
policy.
B. Property/Casualty/Rental
Tenant shall throughout the term of this lease, for the benefit of both
Landlord and Tenant as named insureds, maintain insurance against loss or damage
by fire, and such other risks and hazards as are insurable under present and
future standard forms of fire and extended coverage insurance policies on the
Building and all structures, appurtenances, sprinklers, boilers and on Tenant's
personal property, furniture, furnishings, and fixtures located in the demised
premises, for their respective full insurable value with Broad Extended
Occupancy Endorsement in amounts at all times sufficient to prevent Landlord or
Tenant from becoming a co-insurer under the terms of any such policies.
Tenant shall also obtain and keep in force rental insurance against loss
of rental under a rental value insurance policy covering risk of loss due to the
occurrence of any of the hazards insured against under Tenant's Fire and
Extended Insurance on the building, in an amount sufficient to prevent Landlord
from becoming a co-insurer but in any event, in an amount sufficient to pay, for
not less than one year, the rent payable under this Lease. All proceeds received
by Landlord under rent insurance policies will be credited as received against
the rent due.
Each such policy shall provide that not less than ten days before
expiration, evidence of its renewal, or a new certificate, together with
evidence of payment of premiums for the renewal period or insurance policy, as
the case may be, shall be delivered to Landlord. In the event of any fire or
other casualty insured against by Tenant's policy, Landlord may assign to Tenant
all of Landlord's right, title, and interest in and to the insurance proceeds.
Tenant shall accept such proceeds as full payment for any loss or damage to its
property, and shall not make any claim against Landlord for any other sum
therefor, even if the loss or damage is due to the carelessness or negligence of
Landlord or its servants, agents, or employees. If any insured casualty occurs,
Tenant shall have full authority, and shall take all necessary measures, to
file, negotiate, compromise, or adjust any loss under its policy, subject to
Landlord's approval which may not unreasonably be withheld.
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C. On Tenant's default in obtaining or delivering any such policy or
policies or failure to pay the charges therefor, Landlord may secure or pay the
charges for any such policy or policies and charge Tenant as additional rent
therefor after giving Tenant Notice of Default and an opportunity to cure same
within ten (10) days from Notice of such default. However, no such Notice of
Default or cure period shall apply if such insurance coverage has lapsed or is
in jeopardy of lapsing.
D. All policies shall state that the insurance company shall not cancel or
refuse to renew without at least 30 days written notice to the Landlord.
E. If during the term of the Lease, higher limits of insurance than those
mentioned above are appropriate, customary, and generally required for like
premises utilized for similar uses, Tenant shall, upon Landlord's request,
procure such increased limits insurance.
Insurance required hereunder shall be in companies rated AAA or better in
"Best's Insurance Guide," which shall be qualified to do business in the State
of New York.
Neither party shall be liable to the other for any business interruption
or any loss or damage to property or injury or death of persons occurring in the
Building (including all the Rental Space), or in any manner growing out of or
connected with Tenant's use and occupation thereof, the Building or the
condition thereof, whether caused by the negligence or other fault of Landlord
or Tenant, or of their respective agents, employees, subtenants, licensees, or
assignees. The release in favor of Landlord contained herein, is in addition to,
and not in substitution for, or in diminution of the hold harmless and
indemnification provisions provided in Paragraph "8" of this Lease.
7. Water Damage
Landlord shall not be liable for any damage or injury to any persons or
property caused by the leak or flow of water from or into any part of the
Building, unless caused by its own act or omission.
8. Liability of Landlord, Tenant and Indemnity.
A. Landlord and its agents shall not 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 or Persons Within Tenant's Control by
theft or otherwise. Landlord and its agents shall not be liable for any injury
or damage to persons or property 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, sprinklers 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, unless caused by or due to the active
negligence of Landlord, its agents, or employees; nor shall Landlord or its
agents be liable for any such damage caused by other tenants or persons in the
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Building or caused by operations in construction of any private, public or
quasi-public work; nor shall Landlord be liable for any latent defect in the
Demised Premises or in the Building.
B. If at any time any windows of the Demises Premises are temporarily or
permanently closed, darkened or bricked up for any reason whatsoever including
Landlord's own acts, 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 or constitute an eviction.
C. Tenant agrees, irrespective of whether Tenant shall be negligent, to
indemnify, defend and save harmless, Landlord and its partners, officers,
directors, contractors, agents and employees from and against any and all
liability (statutory or otherwise), claims, suits, demands, damages, judgments,
costs, fines, penalties, interest and expenses (including counsel fees and
disbursements incurred in any action or proceeding), to which Landlord or any
such partner, officer, director, contractor, agent or employee may be subject or
which Landlord may suffer arising from, or in connection with, (i) any liability
or claim for any injury to, or death of, any person or persons or damage to
property (including any loss of use thereof), or (ii) the use and occupancy of
the Demised Premises or from any work, installation or thing whatsoever done or
omitted (other than by Landlord or its contractors or the agents or employees of
either) in the Demised Premises during the Term and during the period of time,
if any, prior to the Commencement Date that Tenant may have been given access to
the Demised Premises, or (iii) any default by Tenant in the performance of
Tenant's obligations under this Lease or any act, omission, carelessness, or
negligence of Tenant or Persons Within Tenant's Control.
D. Tenant shall reimburse and compensate Landlord as additional rent
within five (5) days after rendition of a statement for all expenditures, costs,
fees, expenses, judgments, penalties, damages, and fines sustained or incurred
by Landlord (including counsel fees and disbursements incurred in connection
with any action or proceeding) due to the operation of this Article, or
non-performance or non-compliance with or breach or failure by Tenant to observe
any term, covenant, agreement, provision or condition of this Lease, or breach
of any warranty or representation by Tenant made in this Lease. If in any action
or proceeding naming both Landlord and Tenant, liability arising out of the
negligence of Tenant is established, Tenant agrees (i) to indemnify Landlord in
accordance with the provisions of this Article and (ii) to waive any right of
contribution against Landlord. Reference in this Article to Landlord shall for
all purposes be deemed to include the lessor of any Underlying Lease and each
Mortgagee.
E. Tenant agrees that its sole remedy in cases where Landlord's
reasonableness in exercising its judgment or withholding its consent or approval
is applicable pursuant to a specific provision of this Lease, or any rider or
separate agreement relating to this Lease, if any, shall be those in the nature
of an injunction, declaratory judgment, or specific performance, the rights to
money damages or other remedies being hereby specifically waived.
Landlord shall not be liable for injury or damage to any person or
property unless due to the Landlord's act. Tenant is liable for any loss, injury
or damage to any person or property caused by the act or neglect of Tenant or
Tenant's employees. Tenant shall defend the Landlord
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<PAGE>
from and reimburse the Landlord for all liability and costs resulting from any
injury or damage due to the act or neglect of Tenant or the Tenant's employees.
9. Acceptance of Rental Space
Tenant has inspected the Rental Space and agrees that the Rental Space is
in satisfactory condition. Tenant accepts the Rental Space "as is".
10. Quiet Enjoyment
Landlord has the right to enter into this Lease. If Tenant complies with
this Lease, the Landlord must provide Tenant with undisturbed possession of the
Rental Space.
11. Taxes, Utilities, Security and Services
Tenant shall arrange for and pay for all real estate taxes, assessments
and all Federal, State, or Local or Municipal levies of any kind or nature; all
heat, lighting, water and other utilities; and all costs of security or other
services required for the intended use of the Rental Space.
Tenant shall maintain and clean the demised premises at its own cost and
expense.
Landlord is not liable for any inconvenience or harm caused by any
stoppage or reduction of utilities and services nor shall such stoppage or
reduction excuse Tenant from paying Rent.
12. Tenant's Repairs, Maintenance, and Compliance
Tenant Shall:
(a) Promptly comply with all laws, orders, rules and requirements of
governmental authorities, insurance carriers, board of fire underwriters, or
similar groups.
(b) Maintain the Rental Space and all equipment, fixtures and sprinklers
in it.
(c) Make all necessary repairs to the Rental Space and all equipment,
sprinklers and fixtures in it.
(d) Maintain the Rental Space in a neat, clean, safe, and sanitary
condition, free of all garbage.
(e) Use all electric, plumbing and other facilities in the Rental Space
safely in accordance with applicable Law, Codes, Rules, Regulations and/or Fire
Underwriter requirements.
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(f) Use no more electricity than the wiring or feeders to the Rental Space
can safely carry.
(g) Promptly replace all broken glass in the Rental Space.
(h) Do nothing to destroy, deface, damage, or remove any part of the
Rental Space.
(i) Keep nothing in the Rental Space which is inflammable, dangerous or
explosive or might increase the danger of fire or other casualty.
(j) Use its best efforts to promptly notify Landlord when there are
conditions which need repair.
(k) Do nothing to destroy the peace and quiet of Landlord, other tenants,
or persons in the neighborhood.
(l) Avoid littering in the building or on its grounds
Tenant shall pay any and all expenses involved in complying with the above.
13. Landlord's Repairs and Maintenance
Landlord shall have no responsibility to:
(a) Maintain the public areas, roof and exterior walls in good condition.
(b) Make any structural repairs unless these repairs are made necessary by
the act of Landlord.
(c) Make necessary replacements of the plumbing, cooling, heating and
electrical system, except when made necessary by the act of Landlord.
(d) Maintain the elevators in the Building, if any.
14. No Alterations
Tenant may not make any changes or additions to the Rental Space without
Landlord's written consent which consent shall not be unreasonably withheld. Any
changes or additions made without Landlord's written consent shall be removed by
Tenant on demand.
All construction, improvements, changes or additions made with Landlord's
written consent shall be paid for by Tenant and shall remain as part of the
Rental Space at the end of the Term as the property of the Landlord all to be in
good order and repair, reasonable wear and tear excepted. Also, Landlord may
demand that Tenant remove any changes or additions at the end of the Term.
Tenant shall promptly pay for all costs of any permitted changes or additions.
Tenant
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<PAGE>
shall not allow any mechanic's lien or other claim to be filed against the
Building. If any lien or claim is filed against the Building, Tenant shall have
it promptly removed by payment or provision of an appropriate Lien Discharge
Bond and Order of a Court of competent jurisdiction.
15. Signs
[This section has been intentionally deleted.]
16. Access to Rental Space
Landlord shall have access to the Rental Space on reasonable notice to
Tenant to (a) inspect the Rental Space and (b) show it to prospective buyers,
mortgage lenders, contractors or insurers.
Landlord may show the Rental Space to rental applicants at reasonable
hours on notice to Tenant within 6 months before the end of the Term.
Landlord may enter the Rental Space at any time without notice to Tenant
in case of emergency.
17. Fire and Other Casualty
Tenant shall notify the Landlord at once of any fire or casualty in the
Rental Space.
If the Rental Space is partially damaged by fire or other casualty,
Tenant shall repair it as soon as possible. This includes the damage to the
Rental Space and all fixtures installed by either Tenant or Landlord.
If the fire or other casualty is caused by the act or neglect of Tenant or
Tenant's employees, Tenant shall pay for all repairs and all other damage.
18. Eminent Domain
Eminent Domain is the right of a government to lawfully condemn and take
private property for public use. Fair value must be paid for the property. The
taking occurs either by court order or by deed to the condemning party. If any
part of the Rental Space is taken by eminent domain, either party may cancel
this lease on 30 days notice to the other. Tenant shall
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<PAGE>
eminent domain, either party may cancel this lease on 30 days notice to the
other. Tenant shall not share in any payment or award to Landlord. Tenant shall
have the right to file its own claim against the condemning authority, so long
as Landlord's rights to its claim and any Award are not prejudiced.
19. Tenant's Certificate
At the request of the Landlord, Tenant shall sign a certificate stating
that (a) this Lease has not been amended and is in effect, (b) Landlord has
fully performed all of the Landlord's agreements in this Lease, (c) Tenant has
no rights to the Rental Space except as stated in this Lease, (d) Tenant has
paid all Rent to date, and (e) Tenant has not paid Rent for more than one month
in advance. The Certificate shall also list all the property attached to the
Rental Space owned by the Tenant.
20. Violation, Eviction, Re-entry and Damages
Landlord reserves a right of re-entry which allows the Landlord to end
this Lease and re-enter the Rental Space if Tenant violates any agreement in
this Lease. This is done by eviction. Eviction is a court procedure to remove a
tenant. Eviction is started by the filing of a complaint in court and the
service of a summons on a tenant to appear in court. Landlord may also evict
Tenant for any one of the other grounds of good cause provided by law. After a
court order of eviction and compliance with the warrant of removal, Landlord may
re-enter and take back possession of the Rental Space. If the cause for eviction
is non-payment of Rent, notice does not have to be given to Tenant before
Landlord files a complaint. If there is any other cause to evict, Landlord must
give Tenant the notice required by law before Landlord files a complaint for
eviction.
Tenant is liable for all damages caused by Tenant's violation of any
agreement in this Lease. This includes reasonable attorney's fees and costs.
After eviction Tenant shall pay the Rent for the balance of the Term or
until the Landlord re-rents the Rental Space, if sooner. If the Landlord
re-rents the Rental Space for less than Tenant's Rent, Tenant shall pay the
difference until the end of the Term. Tenant shall not be entitled to any excess
resulting from the re-renting. Tenant shall also pay (a) all reasonable expenses
incurred by the Landlord in preparing the Rental space for re-renting and (b)
commissions paid to a broker for finding a new tenant.
21. Bankruptcy
Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be canceled by Landlord 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: (i) Tenant shall (a) have applied for or consented to the appointment of
a receiver, trustee, liquidator, or other custodian of Tenant or any of its
properties or assets, (b) be unable to pay its debts generally as they become
due or shall have taken any other action which could result in it becoming the
subject of an insolvency or
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bankruptcy proceeding, (c) have made a general assignment for the benefit of
creditors, (d) have commenced a voluntary case for relief as a debtor under the
United States Bankruptcy Code or filed a petition to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debts, dissolution or
liquidation law or statute or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law, or (e) be
adjudicated a bankrupt or insolvent, or (ii) without the acquiescence or consent
of Tenant an order, judgment or decree shall have been entered by any court of
competent jurisdiction (a) approving as properly filed a petition seeking relief
under the United States Bankruptcy Code or any bankruptcy, reorganization,
insolvency, readjustment of debts, dissolution or liquidation law or statute
with respect to Tenant or all or a substantial part of its properties or assets
or (b) appointing a receiver, trustee, liquidator or other custodian or all or a
substantial part of its properties or assets, and such order, judgment or decree
shall have continued unstayed and in effect for any period claiming through or
under Tenant or by reason of any statute or order of court shall thereafter be
entitled to possession of the Demised Premises but shall forthwith quit and
surrender the Demised Premises. If this lease shall be assigned in accordance
with its terms the provisions of this Article shall be applicable only to the
party then owning Tenant's interest in this lease.
22. No Representations by Landlord
Neither Landlord nor Landlord's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other mater 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, applicable zoning,
permissible uses, and occupancy requirements, and agrees to take the same "as
is" and acknowledges that the taking of possession of the demised premises by
Tenant shall be conclusive evidence that the said premises and the building of
which the same form a part were in good and satisfactory condition at the time
such possession was so taken, except as to latent defects. All understandings
and agreements heretofore made between the parties hereto are merged in this
contract, which alone fully and completely expresses the agreement between
Landlord and Tenant and any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of it in whole
or in part, unless such executory agreement is in writing and signed by the
party against whom enforcement of the change, modification, discharge or
abandonment is sought.
23. Notices
All notices given under this Lease must be in writing. Each party must
accept and claim the notices given by the other. Unless otherwise provided by
law, they may be given by (a) personal delivery, or (b) certified mail, return
receipt requested. Notices shall be addressed to Landlord at the address written
at the beginning of this Lease and to the Tenant at the Rental Space.
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24. No Waiver
The Landlord's failure to enforce any agreement in this Lease shall not
prevent the Landlord from enforcing the agreement for any violations occurring
at a later time.
25. Survival
If any agreement in this Lease is contrary to law, the rest of the Lease
shall remain in effect.
26. End of Term
At the end of the term, Tenant shall (a) leave the Rental Space clean, (b)
remove all of Tenant's property, (c) remove all signs and restore that portion
of the Rental Space on which they were placed, (d) repair all damage caused by
moving and (e) return the Rental Space to the Landlord in the same condition as
it was at the beginning of the Term except for normal wear and tear.
If Tenant leaves any property in the Rental Space, the Landlord may (a)
dispose of it and charge Tenant for the cost of disposal (b) keep it as
abandoned property.
27. Binding
This Lease binds Landlord and Tenant and all parties who lawfully succeed
to their rights or take their places.
28. Assignment and Subletting.
The Tenant shall have the right to assign this Lease or sublet the
Premises or any part thereof, to its parent or any affiliate, subsidiary or
related entity or any entity into which or with which Tenant is merged or
consolidated without limitation and without the consent of Landlord. Landlord
shall have the right to approve any other subtenant or assignee, which approval,
however, shall not release the Tenant from any liability under this Lease and
shall not be unreasonably withheld or delayed.
29. Interruption of Services or use.
Interruption or curtailment of any service maintained in the building or
use of the premises, caused by Force majeure (as defined in Section 31 hereof),
shall not entitle the Tenant to any claim against the Landlord or to any
abatement in rent, and shall not constitute a constructive or partial eviction,
unless the Lessor fails to take measures as may be reasonable under the
circumstances to restore the service without undue delay.
30. Broker. Each party represents to the other that no real estate commission is
due to any broker or agent as a result of this transaction, and each agrees to
hold the other harmless and to
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indemnify the other against any claims of or liabilities to any broker based on
alleged dealings with the indemnifying party.
31. Force Majeure.
As used in this Lease, the term "Force Majeure" shall mean and include
those situations beyond Landlord's control, including by example and not
by way of limitations, acts of God; accidents, strikes, shortages of labor,
supplies or materials; or inclement weather.
32. Non-Disturbance.
Landlord will make a good faith attempt upon Tenant's request to obtain a
non-disturbance clause from the mortgage lender upon refinancing.
33. Full Agreements
The parties have read this lease. It contains their full agreement. It may
not be changed except with writing signed by Landlord and Tenant. Both parties
hereby waive trial by jury of any matters whatsoever arising out of, under or by
virtue of this Lease.
Signatures: Landlord and Tenant agree to the terms of the Lease by signing
below. If a party is a corporation, this Lease is signed by its proper corporate
officers and its corporate seal is affixed.
Witnessed or attest by ANT REALTY CORP.
/s/ Santino Montalbano by: /s/ Peter Castellana, Jr.
- - ------------------------ ----------------------------
Landlord
WESTERN BEEF ROCKAWAY BLVD., INC.
by: /s/ Chris Darrow
- - ------------------------ ----------------------------
As to Tenant Tenant
<PAGE>
GUARANTY OF WESTERN BEEF, INC.
(A Delaware Corporation)
FOR VALUE RECEIVED, and in consideration for, and as an inducement to Landlord
making the Lease with Tenant, Western Beef, Inc. guarantees to Landlord,
Landlord'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 without requiring any notice of non-payment, non-performance
or non-observance or proof or notice or demand, whereby to charge Western Beef,
Inc. all of which Western Beef, Inc. hereby expressly waives and expressly
agreed 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 Landlord against Tenant any of the rights or remedies reserved
to Landlord pursuant to the provisions of the Lease. Western Beef, Inc. further
covenants and agrees that this guaranty shall remain and continue in full force
and effect as to any renewal, modification or extension of the Lease and during
the period when Tenant is occupying the premises as a "statutory tenant." As a
further inducement to Landlord to make the Lease and in consideration thereof,
Landlord and Western Beef, Inc. covenant and agree that in any action or
proceeding brought by either Landlord or Western Beef, Inc. against the other on
any matters whatsoever arising out of, under or virtue of the terms of the Lease
or of this guarantee that Landlord and Western Beef, Inc. shall and do hereby
waive trial by jury.
WITNESS WESTERN BEEF, INC.
by: /s/ Chris Darrow
- - ---------------------- ----------------------------
GUARANTOR
47-05 Metropolitan Avenue
Flushing, New York
<PAGE>
SCHEDULE OF RENTS FOR LEASE DATED JANUARY 30, 1997,
BY AND BETWEEN ANT REALTY, INC., AS LANDLORD
AND WESTERN BEEF ROCKAWAY BLVD., INC., AS TENANT
The base monthly rental rate for the demised premises shall be as set
forth below and shall be payable the first day of each month:
1. 2/97 - 1/98 $4,000.00 Per Month
2. 2/98 - 1/99 $4,000.00 Per Month
3. 2/99 - 1/2000 $5,625.00 Per Month
4. 2/2000 - 1/2001 $5,798.97 Per Month
5. 2/2001 - 1/2002 $5,978.32 Per Month
6. 2/2002 - 1/2003 $6,163.22 Per Month
7. 2/2003 - 1/2004 $6,353.83 Per Month
8. 2/2004 - 1/2005 $6,550.34 Per Month
9. 2/2005 - 1/2006 $6,752.93 Per Month
10. 2/2006 - 1/2007 $6,961.78 Per Month
11. 2/2007 - 1/2008 $7,177.09 Per Month
12. 2/2008 - 1/2009 $7,399.07 Per Month
13. 2/2009 - 1/2010 $7,627.90 Per Month
14. 2/2010 - 1/2011 $7,863.82 Per Month
15. 2/2011 - 1/2012 $8,107.03 Per Month
16. 2/2012 - 1/2013 $8,357.79 Per Month
17. 2/2013 - 1/2014 $8,616.25 Per Month
18. 2/2014 - 1/2015 $8,882.73 Per Month
19. 2/2015 - 1/2016 $9,157.45 Per Month
20. 2/2016 - 1/20l7 $9,441.67 Per Month
[Annexed hereto as Exhibit A is the Appraisal Report of
Property Appraisal Services, January 30, 1997]
Witnessed or attested by ANT REALTY CORP.
by:
- - -------------------------------- ---------------------------------
As to Landlord Landlord
WESTERN BEEF ROCKAWAY BLVD., INC.
by: /s/ Chris Darrow
- - -------------------------------- ---------------------------------
As to Landlord Landlord
Agreement of Lease, made as this 23rd day of January 19, 1992, between 61 2nd
Street Associates, a New York limited partnership, having its place of business
at 4705 Metropolitan Avenue, Ridgewood, New York,
Party of the first part, hereinafter referred to as OWNER, and
with offices at
Quarex Inc., a New York corporation having its place of business at 4705
Metropolitan Avenue, Ridgewood, New York,
party of the second part, hereinafter referred to as TENANT, Witnesseth:
Owner hereby leases to Tenant and Tenant hereby hires from Owner
CPI (5% to 10%) per year
in the building known as 61 2nd Street. Mineola, New York
in the County of Nassau, City of New York, for the term of five (5) years,
(or until such term shall sooner cease and expire as hereinafter provided) to
commence on the 1st day of February nineteen hundred and ninety-two, and to the
end on the
31st day of January nineteen hundred and ninety-seven
both dates inclusive, at an annual rental rate of THREE HUNDRED AND FIFTY
THOUSAND ($350,000.00) PER ANNUM (TWENTY NINE THOUSAND ONE HUNDRED SIXTY-SIX AND
67/100 ($29,166.67) DOLLARS PER MONTH
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 as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first 1 monthly installment on the execution hereof (unless this lease
be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another lease with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly 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:
Occupancy:
1. Tenant shall pay the rent as above and as hereinafter provided.
Use:
2. Tenant shall use and occupy demised premises for warehouse supermarket for
the sale of food and related products provided such use is in accordance with
the Certificate of Occupancy for the building, if any, and for no so other
purpose.
<PAGE>
Alterations:
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's pilot written consent. Subject to the prior written consent
of Owner, and to the provisions of this article, Tenant a t Tenant's expense,
may make alterations, installations, additions or improvements which are
non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved by Owner. Tenant shall, at its
expense, before making any alterations, additions, installations or
improvements obtain all permits, approval 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. 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 filled against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done (or, for materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within
thirty days thereafter, at Tenant's expense, by filling the bond resulted by
law or otherwise. 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 at ___ expense, repair and restore the
premises to the condition existing prior to installation and repair any
damage to the demised premises or the building due to such removal. All
property permitted or required to be moved, 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.
4. Owner shall maintain and repair the exterior of and the public portions of
the building. Tenant shall, throughout the term of this lease, take good care
of the demised premises including the bathrooms and lavatory facilities (of
the demised Premises encompass the entire floor of the building) and the
winnows and window frames and, the fixtures and appurtenances therein and
Tenant's sole cost and expense promptly make all repairs thereto and to ___
building, whether structural or non-structural in nature, caused by or
resulting from the carelessness, omission, neglect or improper conduct of
Tenant, Tenant's servants, employees, invitees, or licensees, and whether or
not arising from such Tenant conduct or omission, when require by other
provisions of this lease, including Article 6. Tenant shall also repair all
damage to the building and demised premises caused by the moving of Tenant's
fixtures, furniture or equipment. All the aforesaid repairs shall be of
quality or class equal to the original work or construction. If Tenant fails,
after ten days notice, to proceed with due diligence to make repairs required
to be made by Tenant, the same may be made by the Owner at the expense of
Tenant, and the expenses thereof incurred by Owner shall be collectible, as
additional rent, after rendition of a bill or statement therefor. If the
demised premises be or become infested with vermin, Tenant shall, at its
expense, cause the same to be exterminated. Tenant shall give Owner prompt
notice of any defective condition in any plumbing, heating system or
electrical lines located in the demised premises and following such notice,
Owner shall remedy the condition with due diligence, but at the expense of
Tenant, if repairs are necessitated by damage or injury attributable to
Tenant, Tenant's servants, agents, employees, invitees or licensees as
aforesaid. Except as specifically provided in Article 9 or elsewhere in this
lease, there shall be no allowance to the Tenant for a diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner, Tenant or others making
or failing to make any repairs, alternations, additions or improvements in or
to any position of the building or the demised premises or in and to the
fixtures, appurtenances or equipment thereof. The provisions of this Article
4 with respect to the making of repairs shall not apply in the case of fire
or other casualty with regard to which Article 9 hereof shall apply.
Window Cleaning:
5. Tenant will not clean nor require, permit, suffer or allow any window in the
demised premises to be cleaned from the outside in violation of Section 202 of
the New York State Labor Law or any other applicable law or of the Rules of the
Board of Standards and Appeals, or of any other Board or body having or
asserting jurisdiction.
Requirements of Law, Fire Insurance, Floor Leads:
6. Prior to the commencement of the lease term, if Tenant is then in possession,
and at all times thereafter, Tenant shall, at Tenant's sole cost and expense,
promptly comply with all present and future laws, orders and regulations of all
state, federal, municipal and local governments, departments, commissions and
boards and any direction of any public officer pursuant to law, and all orders,
rules and regulations of the New York Board of Fire Underwriters, or the
Insurance Services Office, or any similar body which shall impose any violation,
order or duty upon Owner or Tenant with respect to the demised premises whether
or not arising out of Tenant's use or manner of use thereof, or, with respect to
the building, if arising out of Tenant's use or manner of use of the demised
premises or the building (including the use permitted under the by its manner of
use of the demised premises or method of operation therein, violated any such
laws, ordinances, orders, rules, regulations or requirements with respect
thereto. Tenant 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. 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 so
as not to increase the rate for fire insurance applicable to the building, nor
use the premises in a manner which will increase the Insurance rate for the
building or any property located therein over that in effect prior to the
commencement of Tenant's occupancy. If by reason of failure to comply with the
foregoing 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 position 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" or rate for the building or demised
premises issued by a body making fire insurance rates therein state 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 sales, business machines and mechanical equipment. Such
Installations shall be placed and maintained by Tenant, at Tenant's expense, in
settings sufficient, in Owner's judgement, to absorb and prevent vibration,
noise and annoyance.
Subordination:
7. This lease is subject and subordinate to all ground or underlying leases and
to all mortgages which may now or hereafter affect such leases or the real
property of which demises 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 executive promptly any certificate that Owner may
request.
Property -- Loss, Damage, Reimbursement, Indemnity:
8. Owner or its agents shall not be liable for any damage to property of Tenant
or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence of Owner, its agents, servants or
employees; Owner or its agents shall not be liable for any damage caused by
other tenants or persons in, upon or about said building or caused by
operations in connection 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 reasons 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. Tenant's liability under this
lease extends to the acts and omissions 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 partly
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 repaid and restored by Owner, subject to
Owner's right to elect not to restore the same as hereinafter provided.
(d)If the demised premises are rendered wholly unusable or (whether or not
the demised premises are damaged in whole or in part) if the building
shall be so damaged that Owner shall decide to demolish it or to rebuild
it, then, in any of such events, Owner may elect to terminate this lease
by written notice to Tenant, given with 90 days after such fire or
casualty, specifying a date for the expiration of the lease, which date
shall not be more than 60 days after the giving of such notice, an 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 Owner's rights and
remedies against Tenant under the lease provisions in effect prior to such
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 troubled 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 moveable 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 shall be in force only if both ......
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 premises 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.
Eminent Domain:
10.If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose,
then and in that event, the term of this lease shall cease and terminate from
the date of title vesting in such proceeding and Tenant shall have no claim
for the value of any unexpired term of said lease.
Assignment, Mortgage, Etc.:
11.Tenant, for itself, its heirs, distributees, executors, administrators,
legal representatives, successors and assigns, expressly covenants that it
shall not assign, mortgage or encumber this agreement, nor underlet, or
suffer or permit the demised 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., of if the demised premises or any
part thereof be underlet or occupied by anybody other than Tenant, Owner may,
after default by Tenant, collect rent from the assignee, under-tenant or
occupant, and apply the net amount collected to the rent herein reserved, but
no such assignment, underletting, occupancy or collection shall be deemed a
waiver of this covenant, or the acceptance of the assignee, under-tenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. The consent by
Owner to an assignment or underletting shall not in any wise be construed to
relieve Tenant from obtaining the express consent in writing of Owner to any
further assignment or underletting.
Electric Current:
12.Rates and conditions in respect to submetering or rent inclusion, as the
case may be, to be added in RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing leeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in
Owner's opinion, reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the building. The change
at any time of the character of electric service shall in no wise make Owner
liable or responsible to Tenant, for any loss, damages or expenses which
Tenant may sustain.
Access to Premises:
13. Owner or Owner's agents shall have the right (but shall not be obligated) to
enter the demised premises in any emergency at any time, and, at other
reasonable times, to examine the same and to make such repairs, replacements and
improvements as Owner may deem necessary and reasonably desirable to any portion
of the building or which Owner may elect to perform in the premises after
Tenant's failure to make repairs or perform any work of complying with laws,
regulations and other directions of governmental authorities. 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,
wherever possible, they are within walls or otherwise concealed. Owner may,
during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise. Throughout the term hereof Owner shall have the right to
enter the demised premises at reasonable hours for the purpose of showing the
same to prospective purchasers or mortgagees of the building, and during the
last six months of the term for the purpose of showing the same to prospective
tenants and may, during said six months period, place upon the premises the
usual notices "To Let" and "For Sale" which notices Tenant shall permit to
remain thereon without molestation. If Tenant is not present to open and permit
an entry into the premises, Owner or Owner's agents may enter the same whenever
such entity may be necessary or permissible by master key or forcibly provided
reasonable care is exercised to safeguard Tenant's property, such entry shall
not render Owner or its agents liable therefor, nor in any event shall the
obligations of Tenant hereunder be affected. If during the last month of the
term Tenant shall have removed all or substantially all of Tenant's property
therefrom. Owner may immediately enter, alter, renovate or redecorate the
demised premises without limitation or abatement of rent, or Incurring liability
to Tenant for any compensation and such act shall have no effect on this lease
or Tenant's obligations hereunder.
[Text not continuous: see note above]
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 of actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.
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, of 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. If any governmental license or permit shall be required for the proper
and lawful conduct of Tenant's business, Tenant shall be responsible for and
shall procure and maintain such license or permit.
Bankruptcy:
16.(a) Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be cancelled by Owner by sending of a written notice to Tenant
within a reasonable time after the happening of any one or more of the
following events: (1) the commencement of a case in bankruptcy or under the
laws of any state
naming Tenant as the 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 rental 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 an 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 liquidate damages ..... any court,
commission or tribunal, the amount of rent reserved upon such reletting
shall be deemed to be the fair and reasonable rental value for the part or
the whole of the premises so re-let during the term of the re-letting.
Nothing herein contained shall limit or prejudice the right of the Owner
to prove for and obtain as liquidate 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 provided, whether or not such amount be greater,
equal to, or less than the amount of the difference referred to above.
Default:
17. (1) If Tenant defaults in fulfilling any of the covenants of this lease
other than the covenants for the payment of rent or additional rent; or if the
demised premises becomes vacant or deserted "or if this lease be rejected under
ss. 235 of Title 11 of the U.S. Code (bankruptcy code);" 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; of
if Tenant shall make default with respect to any other lease between Owner and
Tenant; or if Tenant shall have failed, after five (5) days written notice, to
redeposit with Owner any portion of the security deposited hereunder
[thereunder?] which Owner has applied to the payment of any rent and additional
rent due and payable hereunder or failed to move into or take possession of the
premises within fifteen (15) days after the commencement of the term of this
lease, of which fact Owner shall be the sole judge; when in any one or more of
such events, upon Owner serving a written five (5) days notice upon Tenant
specifying the nature of said default and upon the expiration of said five (5)
days, if Tenant shall have failed to comply with or remedy such default, of if
the said default or omission complained of shall be of a nature that the same
cannot be completely cured or remedied within said five (5) day period, and if
Tenant shall not have diligently commenced during such default within such five
(5) day period, and shall not thereafter with reasonable diligence and in good
faith, proceed to remedy or cure such default, then Owner may serve a written
three (3) day's notice of cancellation of this lease upon Tenant, and upon the
expiration of said three (3) days this lease and the term hereunder shall end
and expire as fully and completely as if the expiration of such three (3) day
period were the day herein definitely fixed for the end and expiration of this
lease and the term thereof and Tenant shall then quit and surrender the demised
premises to Owner but Tenant shall remain liable as hereinafter provided.
(2) If the notice provided for in (1) hereof 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 the service of notice of intention to re-enter or to
institute legal proceedings to that end. If Tenant shall make default hereunder
prior to the date fixed as the commencement of any renewal or extension of this
lease, Owner may cancel and terminate such renewal or extension agreement by
written notice.
<PAGE>
Remedies of Owner and Waiver of Redemption:
18. In case of any such default, re-entry, expiration and/or disposes by summary
proceedings or otherwise, (a) the rent, and additional 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 the lease,
(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 constrained, 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 subsequent lease or leases of the demised
premised 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 expenses, attorneys' fees, brokerage,
advertising and for keeping the demised premises in good order or for
preparing the same for re-letting. Any such liquidated damages shall be paid
in monthly installments by Tenant on the rent day specified in this lease and
any suit brought to collect the amount of the deficiency for any month shall
not prejudice in any way the rights off 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 Owners sole judgement, considers advisable
and necessary for the purpose of re-letting the demised premises, and the
making of such alterations, repairs, replacements, and/or decorations shall
not operate or be construed to release Tenant from liability hereunder as
aforesaid. 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.
Fees and Expenses:
19. If Tenant shall default in the observance or performance of any term or
covenant by 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 an 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
proceeds, 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 five (5) days of rendition of any bill or
statement to Tenant therefor. If Tenant's lease tem shall have expired at the
time or making of such expenditures or incurring of such obligations, such sums
shall be recoverable by Owner as damages.
Building Alterations and Management:
20. Owner shall have the right at any time without the same constituting an
eviction and without incurring liability to Tenant therefor to change the
arrangement and or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets 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 Tenant 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
any 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 the physical condition of the building, the land upon which it
is erected or the demised premises, the rents, leases, expenses of operations or
any other matter or thing affecting or related to the demised premises or the
building 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" on the date possessions is tendered 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
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 from the demised premises. 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 34 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 if Owner has
not completed any work required to be performed by Owner, 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 or complete
any work required) until after Owner shall have given Tenant notice that the
premises are substantially ready for Tenant's occupancy. If permission is given
to Tenant to enter into the possession of the demised premises or to occupy
premises other than the demised premises prior to the date specified as the
commencement of the term of this lease, Tenant covenants and agrees that such
occupancy shall be deemed to be under all the terms, covenants, conditions and
provisions of this lease, except as to the covenant to pay rent. The provisions
of this article are intended to constitute "an express provision to the
contrary" within the meaning of Section 223-a of the New York Real Property Law.
No Waivers:
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
as 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. All checks tendered to Owner as and for the rent of the
demised premises shall be deemed payments for the account of Tenant. Acceptance
by Owner of rent from anyone other than Tenant shall not be deemed to operate as
an attornment to Owner by the payor of such rent or a s a consent by Owner to an
assignment or subletting by Tenant of the demised premises to such payor, or as
a modification of the provisions of this lease. 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 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.
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
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 of Owner is prevented or delayed from so doing by
reason of strike or labor troubles or any cause whatsoever beyond Owner's
sole control including, but not limited to, government preemption in
connection with a National Emergency or by reason of any rule order or
regulation of any department or subdivision thereof of any government agency
or by reason of the conditions of supply and demand which have been or are
affected by war or other emergency.
Bills and Notices:
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.
Water Charges:
29. If Tenant requires, uses or consumes water for any purpose in addition to
ordinary lavatory purposes (of which fact Tenant constitutes Owner to be the
sole judge) Owner may install a water meter and thereby measure Tenant's
water consumption for all purposes. Tenant shall pay Owner for the cost of
the meter and the cost of the installation, thereof and throughout the
duration of Tenant's occupancy Tenant shall keep said meter and installation
equipment in good working order and repair at Tenant's own cost and expense
in default of which Owner may cause such meter and equipment to be replaced
or repaired and collect the cost thereof from Tenant, as additional rent.
Tenant covenants and agrees to pay, as additional rent, the sewer rent,
charge or any other tax, rent, levy or charge which now or hereafter is
assessed, imposed or a lien upon the demised premises or the realty of which
they are part pursuant to law, order or regulation made or issued in
connection with the use, consumption, maintenance or supply of water, water
system or sewage or sewage connection or system. If the building or the
demised premises or any part thereof is supplied with water through a meter
through which water is also supplied to other premises Tenant shall pay to
Owner, as additional rent, on the first day of each month, _______ %
($________) of the total meter charges as Tenant's portion. Independently of
an in addition to any of the remedies reserved to Owner hereinabove or
elsewhere in this lease, Owner may sue for and collect any monies to be paid
by Tenant or paid by Owner for any of the reasons or purposes hereinafter
set forth.
Sprinklers:
30. Anything elsewhere in this lease to the contrary notwithstanding, if the New
York Board of Fire Underwriters or the New York Fire Insurance Exchange or any
bureau, department or official of the federal, state, or city government
recommend or require the installation of a sprinkler system or that any changes,
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied in an existing sprinkler system by reason of Tenant's business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reasons, or if any such sprinkler system
installati9ons, modifications, alterations, additional sprinkler heads or other
such equipment, become necessary to prevent the imposition of a penalty or
change against he full allowance for a sprinkler system in the first insurance
rate set by any said Exchange or by any fir insurance company, Tenant shall, at
Tenant's expense, promptly make such sprinkler system installations, changes,
modifications, alternations, and supply additional sprinkler heads or other
equipment as required whether the work involved shall be structural or
non-structural in nature, Tenant shall pay to Owner as additional rent the sum
of $___________, on the first day of each month during the term of this lease,
as Tenant's portion of the contract price for sprinkler supervisory service.
Elevators, Heat, Cleaning:
31. As long as Tenant is not in default under any of the covenants of this lease
Owner shall:
(a) provide necessary passenger elevator facilities on business days
from 8 a.m. to 6 p.m. and on Saturdays from 8. a.m. to 1 p.m.;
(b) If freight elevator service is provided, same shall be provided only
on regular business days Monday through Friday inclusive, and on
those days only between the hours of 9 a.m. and 12 noon and between
1 p.m. and 5 p.m.;
(c) Furnish heat, water and other services supplied by owner 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 1 p.m.;
(d) Clean the public halls and public portions of the building which are
used in common by all tenants. Tenant shall, at Tenant's expense,
keep the demised premises, including the windows, clean and in
order, to the satisfaction of Owner, and for that purpose shall
employ the person or persons, or corporation approved by Owner.
Tenant shall pay to Owner the cost of removal of any of Tenant's
refuse and rubbish from the building. Bills for the same shall be
rendered by Owner to Tenant at such time as Owner may elect and
shall be due and payable hereunder, and the amount of such bills
shall be deemed to be, and be paid as, additional rent. Tenant
shall,, however, have the option of independently contracting for
the removal of such rubbish and refuse in the event that Tenant does
not wish to have same done by employees of Owner. Under such
circumstances, however, the removal of such refuse and rubbish by
others shall be subject to such rules and regulations as, in the
judgement of Owner, are necessary for the proper operation of the
building. Owner reserves the right to stop service of the heating,
elevator, plumbing and electric systems, when necessary, by reason
of accident, or emergency, or for repairs, alterations, replacements
or improvements in the judgement of Owner desirable or necessary to
be made, until said repairs, alterations, replacements or
improvements, in the judgement of Owner desirable or necessary to be
made, until such repairs, alterations, replacements or improvements
shall have been completed. If the building of which the demised
premises are a part supplies an annually operated elevator service,
Owner may proceed with alterations necessary to substitute automatic
control elevator service upon ten (10) day written notice to Tenant
without in any way affecting the obligations of Tenant hereunder,
provided that the same shall be done with the minimum amount of
inconvenience to Tenant, and Owner pursues with due diligence the
completion of the alterations.
Captions:
32. The Captions are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope of this lease nor the intent
of any provision thereof.
Definitions:
33. The term "Owner" as used in this lease means only the owner of the fee or
the leasehold of the building, 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 lessees 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 "rent"
includes the annual rental rate whether so-expressed or expressed in monthly
installments, and "additional rent" "Additional rent" means all sums which shall
be due to the Owner from Tenant under this lease, in addition to the annual
rental rate. The term "business days" as used in this lease, shall exclude
Saturdays (except such portion thereof as is covered by specific hours in
Article 31 hereof), Sundays and all days observed by the State or Federal
Government as legal holidays and those designated as holidays by the applicable
building service union employees service contract or by the applicable Operating
Engineers contract with respect to HVAC service.
Adjacent Excavation
35.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 premised 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
36.Tenant and Tenant's servants, employees, agents, visitors, and licensees
shall observe faithfully, and comply strictly with, the Rules and Regulations
annexed hereto and such other 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.
Glass:
36.Owner shall replace, at the expense of the Tenant, any and all plate and
other glass damaged or broken from any cause whatsoever in and about the
demised premises. Owner may insure, and keep insured, at Tenant's expense,
all plate and other glass in the demised premises for and in the name of
Owner. Bills for the premiums therefor shall be rendered by Owner to Tenant
at such times as Owner may elect, and shall be due from, and payable by,
Tenant when rendered, and the amount thereof shall be deemed to be, and be
paid, as additional rent.
<PAGE>
Estoppel Certificate:
37.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 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 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.
Directory Board Listing:
38.If, at the request of and as accommodation to Tenant, Owner shall place upon
the directory board in the lobby of the building, one or more names of
persons other than the Tenant, such directory board listing shall not be
construed as the consent by Owner to an assignment or subletting by Tenant to
such person or persons.
Successors and Assigns:
39. 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 Thereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written:
Witness for Owner:
Witness for Tenant:
By: 61 2nd Street Associates
/s/ Peter Castellana, Jr
By: Quarex Inc.
Frank Castellana
<PAGE>
CORPORATE TENANT
STATE OF NEW YORK,
County of _______________
On this ______ day of ______________, 19 _______, before me
personally came ___________________
to me known, who being by me duly sworn, did depose and say that he resides
in
that he is the _________________ of
- - ------------------------------------------------------------------------------
the corporation described in and which executed the foregoing instrument, , as
TENANT; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and he signed his name thereto by like
order
- - ------------------------------------------------------------------------------
INDIVIDUAL TENANT,
STATE OF NEW YORK
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>
IMPORTANT -- PLEASE READ
RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE IN ACCORDANCE
WITH ARTICLE 36.
1. The sidewalks, entrances, driveways, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by any
Tenant or used for any purpose other than for ingress or egress from the demised
premises and for delivery of merchandise and equipment in a prompt and efficient
manner using elevators and passageways designed for such delivery by Owner.
There shall not be used in any space, or in the public hall of the building,
either by any Tenant or by jobbers or others in the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and
sideguards. If said premises are situated on the ground floor of the building,
Tenant shall further, at Tenant's expense, keep the sidewalk and curb in front
of said premises clean and free from ice, snow, dirt and rubbish.
2. The water and wash closets and plumbing fixtures shall not be used for any
purposes other than those for which they were designed or constructed an no
sweepings, rubbish, rags, acids or other substances shall bee deposited
therein, and the expense of any breakage, stoppage, or damage resulting from
the violation of this rule shall be borne by the Tenant, who, or whose
clerks, agents, employees or visitors, shall have caused it.
3. No carpet, rug or other article shall be hung or shaken out of any window of
the building; and no Tenant shall sweep or throw or permit to be swept or
thrown from the demised premises any dirt or other substances into any of the
corridors or halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the buildings by reason of
noise, odors, and/or vibrations, or interfere in any way, with other Tenants
or those having business therein, nor shall any animals or birds be kept in
or about the building. Smoking or carrying lighted cigars or cigarettes in
the elevators of the building is prohibited.
4. No awnings or other projects shall be attached to thee outside walls of the
building without the prior written consent of Owner.
5. No sign, advertisement,, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises if the same is visible from the outside of the premises
without the prior written consent of Owner, except that the name of Tenant
may appear on the entrance door of the premises. In the event of the
violation of the foregoing by any Tenant, Owner may remove same without any
liability and may charge the expense incurred by such removal to Tenant or
Tenants violating this rule. Interior signs on doors and director tablet
shall be inscribed, painted or affixed for each Tenant by Owner at the
expense of such Tenant, and shall be of a size, color and style acceptable to
Owner.
6. No Tenant shall mark, paint, drill into, or in any way deface any part of the
demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior
written consent of Owner, and as Owner may direct. No Tenant shall lay
linoleum, or other similar floor covering so that the same shall come in
direct contact with the floor of the demised premises, and, if linoleum or
other similar floor covering is desired to be used an interlining of
builder's deadening felt shall first be affixed to the floor, by a paste or
other material, soluble in water, the use of cement or similar adhesive
material being expressly prohibited.
7. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof. Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by, such Tenant, and in the event
of the loss of any keys, so furnished, each Tenant shall pay to Owner the
cost thereof.
8. Freight, furniture, business equipment, merchandise and bulky matter of any
description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease of which these Rules and Regulations are a part.
9. No Tenant shall obtain for use upon the demised premises ice, drinking water,
towel and other similar services, or accept barbering or bootblacking
services in the demised premises, except from persons authorized by Owner,
and at hours and under regulations fixed by Owner. Canvassing, soliciting and
peddling in the building is prohibited and each Tenant shall cooperate to
prevent the same.
10.Owner reserves the right to exclude from the building between the hours of 6
p.m. and 8 p.m. on business days, after 1 p.m. on Saturdays, and at all hours
on Sundays and legal holidays all persons who do not present a pass to the
building signed by Owner. Owner will furnish passes to persons for whom any
Tenant requests same in writing. Each Tenant shall be responsible for all
persons for whom he requests such pass and shall be liable to Owner for all
acts of such persons. Notwithstanding the foregoing, Owner shall not be
required to allow Tenant or any person to enter or remain in the building,
except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays from
8:00 a.m. to 1:00 p.m.
11.Owner shall have the right to prohibit any advertising by any Tenant which
in Owner's opinion, tends to impair the reputation of the building or its
desirability as a loft building, and upon written notice from Owner, Tenant
shall refrain from or discontinue such advertising.
12.Tenant shall not bring or permit to be brought or kept in or on the demised
premises, any inflammable, combustible or explosive fluid, material, chemical
or substance, or cause or permit any odors of cooking or other processes, or
any unusual or other objectionable odors to permeate in or emanate from the
demised premises.
13. Tenant shall not used the demised premises in a manner which disturbs or
interferes with other Tenants in the beneficial use of their premises.
<PAGE>
Address:
Premises:
TO
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STANDARD FORM OF LOFT LEASE
The Real Estate Board of New York, Inc.
(C)Copyright 1982. All Rights Reserved.
Reproduction in whole or in part prohibited.
Dated:
Rent Per Year:
Rent Per Month:
Term
From:
To:
Drawn by:
Checked by:
[......] by:
Approved by:
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AMENDMENT TO LEASE
Between
61 2nd Street Associates ("Landlord")
and
Western Beef Mineola, Inc. ("Tenant")
b Premises: 61 2nd Street
Mineola, New York
This Amendment is made and entered into this 1st day of February, 1997
("Effective Date") between 61 2nd Street Associates, as Landlord and Western
Beef Mineola, Inc. ("Western"), as Tenant.
WHEREAS, on January 23, 1992, Landlord and Quarex, Inc. ("Quarex") entered
into a certain Lease Agreement ("Lease") for the building known as 61 2nd
Street, Mineola, New York.
WHEREAS, on January 30, 1997, Quarex, as Assignor, Western, as Assignee
and Western Beef, Inc. as Guarantor, with the approval of Landlord, entered into
a certain Assignment and Assumption of Lease whereby Quarex assigned to Western
all of Quarex's rights, title and interest in the lease.
WHEREAS, 61 2nd Street Associates, as Landlord, and Western Beef, Inc., as
Tenant, desire to amend the Lease as follows:
1. The Parties restate Paragraph 67 as follows:
"Provided the Tenant is not in default under any provisions of this
Lease, the Parties agree to extend the Lease Term for and additional
fifteen (15) year period to wit: February 1, 1997 through January
31, 2012."
Commencing February 1, 1997, through January 31, 1998, the annual
base rent shall be $466,698.44 ($37,224.87 per month). Thereafter
the annual base rent shall be as provided in Paragraph 42, below.
2. The Parties restate Paragraph 42 as follows:
"For the purposes of this Lease, "Lease Year" shall be deemed to be
the period from February 1st through January 31st. Commencing
February 1,
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1998, and each year thereafter, such annual base rent shall be
adjusted in accordance with the provisions of this Article.
The annual base rent for each Lease Year shall be increased by five
(5%) percent of the prior Lease Year's rent. (Annexed hereto and
made a part hereof as Schedule "A" is the base rent schedule for the
term hereunder.)
Such percentage increase shall be multiplied by the then current
annual base rent to determine the amount required to be paid by the
Tenant as additional rent for the then current Lease Year. The
Landlord shall give the Tenant a written statement of the
calculation of the amount of any increase so determined prior to the
end of a Lease Year.
For each Lease Year, the annual base rent and increase thereto shall
be due and payable to the Landlord in twelve (12) equal monthly
installments beginning February 1st of each Lease Year (however in
the event increased to the annual base such accrued by unpaid
additional rent for any such month(s) subsequent to February 1st
shall be due with the next rent payment as herein provided).
Adjustments hereunder shall survive the termination of this Lease.
3. All other terms and conditions of the Lease, its Assignment and
Guaranty shall remain in full force and effect for term hereunder.
The Parties have signed this Lease Amendment as of the date and year first
written above.
LANDLORD
61 2nd STREET ASSOCIATES
By: MICHAEL CASTELLANA
--------------------------
TENANT
WESTERN BEEF MINEOLA, INC.
By: PETER CASTELLANA, JR
--------------------------
GUARANTOR
WESTERN BEEF, INC. (A Delaware Corporation)
By: PETER CASTELLANA, JR
--------------------------
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SCHEDULE A
BASE RENT SCHEDULE
MONTHLY YEARLY
YEAR RENT RENT
---- ---- ----
02/01/1998-01/31/1999 39,086.11 469,033.36
02/01/1999-01/31/2000 41,040.42 492,485.03
02/01/2000-01/31/2001 43,092.44 517,109.28
02/01/2001-01/31/2002 45,247.06 542,964.74
02/01/2002-01/31/2003 47,509.41 570,112.98
02/01/2003-01/31/2004 49,884.88 598,618.63
02/01/2004-01/31/2005 52,379.13 628,549.56
02/01/2005-01/31/2006 54,998.08 659,977.04
02/01/2006-01/31/2007 57,747.99 692,975.89
02/01/2007-01/31/2008 60,635.39 727,624.69
02/01/2008-01/31/2009 63,667.15 764,005.92
02/01/2009-01/31/2010 66,850.51 802,206.22
02/01/2010-01/31/2011 70,193.04 842,316.53
02/01/2011-01/31/2012 73,702.69 884,432.35
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ASSIGNMENT AND ASSUMPTION
OF LEASE
AGREEMENT made this 30th day of January, 1997 by and between
QUAREX, INC., 47-05 Metropolitan Avenue, Ridgewood, New York
("QUAREX"/"ASSIGNOR"), and
WESTERN BEEF MINEOLA, INC., 47-05 Metropolitan Avenue, Ridgewood, New York
("WESTERN"/ASSIGNEE");
LEASE ASSIGNED
The Lease which is assigned herein is identified as follows:
-Landlord - 61 2nd STREET ASSOCIATES
-Tenant - QUAREX, INC.
-Date - January 23, 1992
The Premises, the building commonly known as 61 2nd Street, Mineola, New
York.
CONSIDERATION
ASSIGNOR has received Ten and 00/100 ($10.00) Dollars and other good and
valuable consideration for this Assignment.
ASSIGNMENT
ASSIGNOR, QUAREX, assigns to WESTERN, as ASSIGNEE, all of QUAREX'S right,
title and interest in the Lease.
ASSUMPTION
WESTERN as ASSIGNEE agrees to pay the monthly rent promptly and perform
all of the terms and conditions of the Lease as of the date of this Assignment,
as if fully substituted as the original Tenant in said Lease.
BENEFIT TO LANDLORD
WESTERN also agrees that the obligations assumed herein shall be for the
benefit of the Landlord named in the Lease, as well as the Assignor.
CONTINUING LIABILITY OF QUAREX
It is understood that this Assignment to and Assumption by WESTERN of said
Lease is not intended to, nor will it act in any fashion or fashion as a release
by the Landlord of the responsibility and obligations of QUAREX, as expressed in
said Lease.
GUARANTY OF WESTERN BEEF, INC. (A Delaware Corporation)
FOR VALUE RECEIVED, and in consideration for, and as an inducement to
Landlord
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making the lease with Tenant, Western Beef, Inc. guarantees to Landlord,
Landlord'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 without requiring any notice of non-payment, non-performance
or non-observance or proof or notice or demand, whereby to charge Western Beef,
Inc., all of which Western Beef, Inc. hereby expressly waives and expressly
agreed 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 Landlord against Tenant of any of the rights or remedies reserved
to Landlord pursuant to the provisions of the Lease. Western Beef, Inc. further
covenants and agrees that this guaranty shall remain and continue in full force
and effect as to any renewal, modification or extension of the Lease and during
any period when Tenant is occupying the premises as a "statutory tenant." As a
further inducement to Landlord to make the Lease and in consideration thereof,
Landlord and Western Beef, Inc. covenant and agree that in any action or
proceeding brought by either Landlord or Western Beef, Inc. against the other on
any matters whatsoever arising out of, under or by virtue of the terms of the
Lease or of this guarantee that Landlord and Western Beef, Inc. shall and do
hereby waive trial by jury.
SUCCESSORS
This Assignment shall be binding on all parties who lawfully succeed to
its rights.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the date first above written.
WITNESS QUAREX, INC.
By: /s/ Frank Castellana
- - ---------------------- ---------------------------
WESTERN BEEF MINEOLA, INC.
By: /s/ Peter Castellana, Jr.
- - ---------------------- ---------------------------
APPROVAL OF LANDLORD:
Landlord hereby approves of the foregoing Assignment.
WITNESS 61 2nd STREET ASSOCIATES
By: /s/ Michael Castellana
- - ---------------------- ---------------------------
GUARANTOR
WITNESS WESTERN BEEF, INC.
/s/ Santino Montalbano By: /s/ Peter Castellana, Jr.
- - ---------------------- ---------------------------
LEASE AGREEMENT
ORDER NO. OL
LESSEE CITY STATE COUNTY ZIP
WESTERN BEEF, INC. RIDGEWOOD, NY QUEENS 11385
STREET NAME AND TITLE
47-05 METROPOLITAN AVE. MR. BOB LUDLOW, CHIEF FINANCIAL OFFICER
TERMS AND CONDITIONS OF LEASE
1. LEASED PROPERTY: Subject to the following terms and conditions, Amplicon
Inc., ("Lessor") hereby leases to and/or grants to Lessee the right to use
certain Hardware and Software as described on the attached Lease Schedule(s)
annexed hereto and made a part hereof (hereafter "Leased Property"). Lessee
agrees to hire and take and agrees to accept the right to use that certain
Leased Property, and such other Leased Property described on supplemental
Schedule(s) that the parties from time to time may annex to this Lease.
2. TERM: This Lease, with respect to any Schedule, shall become effective upon
acceptance by Lessor and the term for any Schedule(s) shall commence on the day
that the Manufacturer/Vendor/Licensor certifies that the Leased Property has
been delivered to and is usable by Lessee ("Commencement Date"), Lessee agrees
that its remedies, should it find fault with any of the Leased Property, shall
be and are solely against the Manufacturer/Vendor/Licensor. This Lease shall
give Lessee the right to use the Hardware at the location(s) and Software on the
serial number specific Central Processing Unit ("CPU"), or replacement CPU, or
site specific location, delineated on the Schedule(s). The initial base term of
the Lease, with respect to any Schedule(s), shall be as indicated on the
respective Schedule(s) and shall be calculated from the first day of the
calendar month following the Commencement Date ("Initial Base Lease Term"). The
Initial Base Lease Term shall be extended for an additional one-year period at
the rate delineated on the respective Schedule(s) unless Lessee provides to
Lessor written notice of Lessee's election not to extend the Initial Base Lease
Term at least one hundred eighty (180) days prior to its expiration.
Notwithstanding the provisions of Section 20 below, such written notice may be
delivered to Lessor by hand or by mail and shall not be effective unless it is
actually received by Lessor at least one hundred eighty (180) days prior to
expiration of the Initial Base Lease Term. At the expiration of the Initial Base
Lease Term (or, if extended, the expiration of the extended Term), Lessee shall
do one of the following: (A) purchase all of the Leased Property for a mutually
agreeable purchase price; (B) extend the Schedule(s) for a period of one (1)
additional year at the rate delineated on the respective Schedule(s); or (C)
enter into a new lease with Lessor to lease property which replaces the Leased
Property and which has a cost greater than or equal to the original cost of the
Leased Property. With respect to options (A) and (C); Lessor and Lessee shall
each have absolute discretion regarding their agreement or lack of agreement to
the terms of either such arrangement. If the parties have not agreed to either
option (A) or option (C) by the expiration of the initial or extended Base Lease
Term, then option (B) shall prevail. At the end of the extension provided by
Option (B), this Lease shall continue subject to termination by either Lessor or
Lessee at the end of any calendar month, provided at least one hundred twenty
(120) days prior written notice of such termination is delivered to the other
party. Each Schedule shall be deemed to incorporate therein these specific terms
and conditions and shall have an independent Initial Base Lease Term and
extension period(s).
3. RENTALS: The monthly rent payable shall be the amount shown on each
Schedule(s). Lessee shall pay to Lessor the monthly rent, in advance, for each
month or any part thereof that this Lease, with respect to said Schedule(s), is
in effect. The first such payment shall be made on the first day of the calendar
month following the Commencement Date. A prorata portion of the monthly rental
charges based on a daily rental of one-thirtieth (1/30th) of the monthly rental
calculated from the Commencement Date to the end of the calendar month, shall be
due and payable at the Commencement Date. Installments of rent which are not
paid within ten (10) days of their due date shall bear interest at a
"Delinquency Rate" equal to five percent (5%) of each installment of rent. For
delinquent installments of rent which remain unpaid at the end of each month,
interest shall continue to accrue and compound at a delinquency rate equal to
five percent (5%) of the cumulative unpaid balance. All rent shall be paid at
the place of business of Lessor shown above or such other place as Lessor may
designate by written notice to Lessee. Except as otherwise provided in this
Lease, Lessee's obligation to pay rent shall be absolute and unconditional under
all circumstances, notwithstanding: (i) any setoff, counterclaim, recoupment,
defense or other right which Lessee may have against Lessor for any reason
whatsoever, (ii) any defect in the title, right to use, condition, operation,
fitness for use, damage or destruction of or to the Leased Property or any
interruptions or cessations in use or possession thereof for any reason
whatsoever, (iii) any insolvency, bankruptcy, reorganization or similar
proceedings instituted by or against Lessee. Unless otherwise delineated on the
Lease Schedule, any Deposit shall be returned to Lessee if Lessor does not
accept the transaction. Otherwise, upon acceptance by Lessor, any Deposit shall
be treated as a transaction fee to be retained by Lessor and is not to be
applied to rental or other payments due and owing under the Lease. Lessee hereby
waives, to the extent permitted by applicable law, any and all right which it
may now, or at any time hereafter, have to cancel, terminate, or surrender this
lease except in accordance with the express terms hereof.
4. ADDITIONS AND MODIFICATIONS: Without the prior consent of Lessor, which
consent shall be conditioned upon delivery of documentation of a form and
substance required by Lessor, Lessee shall make no addition, modification,
alteration, or attachment with respect to any of the Leased Property. All
additions, modifications, alterations and attachments placed upon the Leased
Property shall become part of the Leased Property and shall be the property of
Lessor. If not purchased, leased or financed by Lessor, Lessee shall, upon
written consent of Lessor and at Lessee's sole expense, have the Hardware
Manufacturer remove said items and restore the hardware to its original
condition. Software, as described on any Schedule(s); shall also include all
updates, revisions, new versions, enhancements, modifications, derivative works,
maintenance fixes, translations, adaptations, and copies of the foregoing or of
the original version of the Software, and references to the Software shall also
be interpreted as references to any portion or parts thereof. Lessor, at its
sole option, may provide financing for any Additions and Modifications to Leased
Property required by Lessee during the Lease term subject to the then prevailing
interest rates and the Lessee's credit standing. Lessee shall not move the
Leased Property from the location set forth in the Schedule(s) without Lessor's
prior written approval and then only to another location within the continental
United States and upon such terms and conditions as Lessor may then stipulate.
5. NO WARRANTIES: Lessor not being the manufacturer, developer, publisher,
distributor, or licensor of the Leased Property, MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY, DESIGN,
CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE LEASED
PROPERTY OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING AGREED THAT THE
LEASED PROPERTY IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND
LESSEE ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE. LESSEE REPRESENTS
THAT ALL OF THE LEASED PROPERTY ARE OF A SIZE, DESIGN, AND CAPACITY SELECTED BY
IT, AND THAT IT IS SATISFIED THAT THE SAME IS SUITABLE FOR LESSEE'S PURPOSES.
This provision shall survive termination of the respective Lease Term and of
this Lease, Lessor, at its sole option, may supply items of Leased Property,
either new or used, that meet the specification of items of Leased Property
delineated on the Schedule(s).
6. USE, OPERATION AND MAINTENANCE: Lessee, at its expense will provide a
suitable place for the installation, operation and maintenance of all Leased
Property with all such facilities fully complying with the installation and
operational specifications outlined in pertinent
Manufacturer's/Vendor's/Licensor's manuals. Lessee, without expense to Lessor,
will enter into and keep in force during the entire term of this Lease the best
standard Manufacturer's/Vendor's/Licensor's Maintenance Agreement in form and
substance approved by Lessor which will cause Manufacturer's/Vendor's/Licensor's
to make all of the necessary repairs, adjustments, and replacements in
accordance with such Agreement and entitle Lessee (through Lessor, if necessary)
to obtain enhancements, updates and changes available under the License or
Maintenance Agreement. Lessee will provide full free access to the Leased
Property for maintenance purposes. Lessee shall not do anything, or fail to do
anything, to impair the Manufacturer's/Vendor's/Licensor's warranty with respect
to any Leased Property such as (but not limited to) using a version of software,
other than the version specified by the License to be used, making unauthorized
modifications of the Leased Property, failing to follow
Manufacturer's/Vendor's/Licensor's operations or maintenance instructions, or
abusing, misusing or allowing negligent acts to be caused by Lessee or those to
whom Lessee gives access to the Leased Property. Lessee will comply with all
laws, rules, regulations or orders of any governmental agency with respect to
the Leased Property or to the use, operation, maintenance or storage thereof.
7. RISK OF LOSS: During the period the Leased Property is in transit or in the
possession of Lessee, Lessee shall assume all responsibility for loss or damage
and shall hold Lessor harmless against the same. In the event that, during the
term of the Lease or until the Leased Property shall have been returned, if any
of the Leased Property shall be confiscated, taken, requisitioned, lost, stolen,
destroyed or irreparably damaged for any cause whatsoever (such occurrences
hereinafter called "Casualty Occurrences"), Lessee shall immediately and fully
inform Lessor. In the case of Software, the erasure, inoperability or other
incapacity of the Software triggered by a preprogrammed termination or limiting
design or routine embedded in the Software shall also be deemed a "Casualty
Occurrence." Following a Casualty Occurrence, on the next succeeding rent
payment date, Lessee shall pay to Lessor, in addition to all past due rentals
and other amounts then late and outstanding, an amount equal to the Casualty
Value as determined by the attached Casualty Schedule as of the date of the
Casualty Occurrence. Upon the making of such payment by Lessee, the rental for
such Schedule(s) shall cease to accrue as of the date of such payment and the
term of the Lease as to such Schedule(s) shall terminate. Insurance proceeds
received by Lessor as the result of a Casualty Occurrence with respect to any
Schedule(s) shall be applied in reduction of Lessee's obligation to pay the
Casualty Value. The Casualty Value as of any rent payment date (or as of any
other date on which Casualty Value is payable) shall be an amount equal to that
percentage of the Purchase Price or License Fee as is set forth in the Casualty
Schedule attached hereto, opposite the number of such rent payment date or such
other date. Except as hereinabove in this paragraph provided, Lessee shall not
be released from its obligations hereunder in the event of, and shall bear the
risk of, any Casualty Occurrence to any of the Leased Property. The Purchase
Price or License Fee of any Leased Property shall be the invoice price/fee
therefor, including any applicable sales, use or other taxes then payable, and
normal delivery charges.
8. INDEMNITY AND INSURANCE: Lessor shall have no responsibility or liability to
Lessee, its successors or assigns, or to any other person, with respect to any
or all liabilities, and Lessee hereby assumes liability for, and hereby agrees,
at its own cost and expense, to indemnify, protect, defend, save and keep
harmless Lessor, its agents, employees, officers, directors, successors and
assigns, from and against, any and all liabilities, obligations, losses,
damages, injuries, claims (including without limitation, claims based upon
strict liability); demands, penalties, actions, costs and expenses, including
legal expenses, of every kind or nature arising out of the use, condition
(including but not limited to, latent and other defects, whether or not
discoverable by Lessee or Lessor), operation, ownership, selection, delivery,
leasing or return of any item of Leased Property (including without limitation,
any claim for patent, trademark or copyright infringement), regardless of where,
how and by whom operated, or any failure on the part of Lessee to perform or
comply with any conditions of this Lease or for any interruption of service,
loss of business or consequential damages. The indemnities and assumptions of
liabilities and obligations herein provided for shall continue in full force and
effect notwithstanding the expiration or other termination of this Lease.
Lessee, at its expense, shall procure and maintain in full force and effect at
all times that this Lease is in force and effect such public liability
(including, without limitation, contractual liability insurance), property
damage liability, fire with extended coverage, theft, and other insurance in
such form and amounts and with such companies as shall be satisfactory to
Lessor. Lessor shall be named as an additional insured and loss payee on all
policies which shall provide that no cancellation thereof shall be effective
without thirty (30) days prior written notice to Lessor and shall not be
invalidated as to Lessor by any act, omission, or neglect of Lessee.
THIS LEASE CAN ONLY BE MODIFIED BY WRITTEN ADDENDUM DULY SIGNED BY PERSONS
AUTHORIZED TO SIGN AGREEMENTS ON BEHALF OF LESSEE AND BY A DULY AUTHORIZED
OFFICER OF AMPLICON, INC.
LESSEE /S/ Peter Castellana, Jr. LESSOR
------------------------- --------------------------
Authorized Signature Authorized Signature
By execution hereof, the signer hereby certifies that he has read this Lease,
INCLUDING THE REVERSE SIDE HEREOF, and that he is duly authorized to execute
this Lease on behalf of Lessee. Until this document (or an identical couterpart
thereof) has been signed by a duly authorized officer of Amplicon, Inc. it shall
constitute an offer by Lessee to enter into this Lease Agreement on the terms
stated herein with Lessor.
OFFER ACCEPTANCE
LESSEE WESTERN BEEF, INC. AMPLICON, INC.
By/Title /s/ Peter Castellana, Jr.
Name Peter Castellana, Jr., President
Date _____________________________ By:_____________________Date_______
<PAGE>
9. TAXES: Lessee shall pay directly, all License fees, registration fees,
assessments and taxes which may now or hereafter be imposed upon the ownership,
sale (if authorized), possession or use of the Leased Property, excepting only
those based on Lessor's income, and shall keep the Leased Property free and
clear of all levies, liens or encumbrances arising therefrom. ALL REQUIRED
PERSONAL PROPERTY TAX RETURNS RELATING TO THE LEASED PROPERTY SHALL BE FILED BY
LESSEE UNLESS OTHERWISE PROVIDED IN WRITING. Lessor shall not be responsible for
contesting any valuation or tax imposed on the Leased Property, but may do so
strictly as an accommodation to Lessee and shall not be liable or accountable to
Lessee therefor.
10. OWNERSHIP: Title to any Hardware shall at all times remain in Lessor. To the
extent that any Software License allows title to Software to pass to Licensee,
such title shall vest and remain in Lessor. To the extent that such vesting
requires a specific written conveyance, Lessee hereby conveys to Lessor any
title it has or may hereafter acquire in the Software and relinquishes any
subsequent claim of title in the Software, including any rights to purchase the
Software and/or to retain rights to use the same beyond this Lease. If any
provision of this paragraph requires for its effectiveness Licensor's prior
written consent because the License limits transfers, encumbrance, or assignment
of the Software, then Lessee shall assist Lessor, if so requested, in obtaining
such consent. Lessee will at all times protect and defend, at its own cost and
expense, the title and/or License rights of Lessor from and against all claims,
liens and legal processes and keep all Leased Property free and clear from all
such claims, liens and processes. The Leased Property is and shall remain
personal property of Lessor. Upon the expiration and termination of this Lease
with respect to a particular Schedule(s), the Lessee at its expense shall return
said items of Leased Property unencumbered to Lessor at such place within the
continental limits of the United States as Lessor shall designate.
11. EFFECTS OF TERMINATION OR EXPIRATION OF LEASE TERM: Immediately upon
expiration or termination of each and every Lease Term as defined under this
Lease, Lessee shall discontinue its use of the Leased Property. In the case of
Software, Lessee shall destroy all intangible items constituting such Software,
and shall deliver to Lessor all tangible items constituting such Software. At
Lessor's request, Lessee shall also certify in a form acceptable to Lessor that:
(i) all such tangible Software has been delivered; (ii) that all intangible
records thereof have been destroyed; (iii) that Lessee has not retained such
Software in any form; (iv) that Lessee will not use such Software after
termination; and (v) that Lessee grants Lessor the right (which shall survive
termination) to inspect all of Lessee's locations to insure compliance with the
provisions of this paragraph. TERMINATION OF ANY LEASE TERM (FOR WHATEVER CAUSE)
SHALL NOT ABSOLVE USER FROM PAYMENT OF ACCRUED PERIODIC PAYMENTS OR FROM
COMPLIANCE WITH THE USE AND DISCLOSURE RESTRICTIONS OF THIS LEASE, OR FROM ITS
OBLIGATIONS TO INDEMNIFY LESSOR. All representations and warranties contained in
this Lease, or in any document or certificate delivered pursuant hereto or in
connection herewith, shall survive the expiration or other termination of the
respective Lease Term and of this Lease.
12. PERFORMANCE OF LESSEE'S OBLIGATIONS BY LESSOR: If Lessee fails to perform
any of its obligations under this Lease, Lessor may, at its option, perform the
same for the account of Lessee without thereby waiving Lessee's default, and any
amount paid, expense (including reasonable attorney's fees), penalty or other
liability incurred by Lessor in such performance shall be payable by Lessee to
Lessor upon demand, with interest thereon at the delinquency rate set forth in
Paragraph 3, above.
13. RIGHT OF INSPECTION: In addition to its rights of entry and inspection
stated elsewhere in this Lease, Lessor may from time to time during reasonable
business hours enter upon any premises where any of the Leased Property may be
located for the purpose of confirming the existence, condition, and proper
maintenance of the Leased Property.
14. DEFAULT: An Event of Default shall occur if: (a) Lessee fails to pay within
ten (10) days after the due date, any installment of rent; (b) Lessee fails to
perform or observe any covenant, condition, or obligation to be performed or
observed by it under this Lease, and such failure continues uncured for fifteen
(15) days after written notice thereof to Lessee by Lessor; (c) Lessee ceases
doing business as a going concern, makes an assignment for the benefit of
creditors, admits in writing its insolvency, files a voluntary petition in
bankruptcy, is adjudicated bankrupt or insolvent, files a petition seeking for
itself any reorganization, liquidation, dissolution, or similar arrangement
under any present or future statute, law, regulation, or files an answer
admitting the material allegations of a petition filed against it in any such
proceeding, consents to or acquiesces in the appointment of a trustee, receiver,
or liquidator of it or of all or a substantial part of its assets, or if its
principals take any action looking to its dissolution or liquidation; (d) within
sixty (60) days after the commencement of proceedings against Lessee seeking
reorganization, liquidation, dissolution, or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been
dismissed, or if within sixty (60) days after the appointment without Lessee's
consent or acquiescence of any trustee, receiver, or liquidator of it or of all
or any substantial part of its assets, such appointment shall not be vacated, or
(e) Lessee attempts to remove, transfer, sell, sublicense, encumber, part with
possession, or sublet the Leased Property; or (f) Lessee attempts to assign or
transfer this Lease or its interest hereunder without Lessor's express prior
written consent, or Lessee's credit worthiness materially deteriorates as judged
solely in Lessor, whether through sale, assignment, buyout, bankruptcy or change
of ownership of any type, form or manner, or undergoes a Change-in-Control. A
Change-in-Control shall be deemed an assignment for purposes of this section. A
Change-in-Control means a transaction or a series of related transactions which,
after giving effect thereto, causes the holders of ownership interests in the
Lessee prior to such transaction or transactions to beneficially own less than
75% of Lessee after such transaction or transactions have been consummated.
15. REMEDIES: If an event of default shall occur, Lessor may exercise at its
sole option, but not specifically limited thereto, any one or more of the
following remedies: (a) terminate this Lease and Lessee's rights hereunder, (b)
proceed, by appropriate court action to enforce performance by Lessee of the
applicable covenants of this Lease or to recover damages for the breach thereof,
(c) by notice in writing to Lessee, recover all amounts due on or before the
date Lessor declared this Lease to be in default, plus as liquidated damages for
loss of a bargain and not as a penalty, accelerate, and declare to be
immediately due and payable, all rentals and other sums payable hereunder,
without any presentment, demand, protest or further notice (all of which hereby
are expressly waived by Lessee), whereupon the same shall be and become
immediately due and payable, and (d) personally, or by its agents, take
immediate possession of the Leased Property, or any part thereof, from Lessee
and for such purpose, enter upon Lessor's premises where any of the Leased
Property is located with or without notice or process of law and free from all
claims by Lessee. In the case of Software, it is acknowledged and agreed that
the unauthorized use, disclosure, or transfer of the Software could cause Lessor
incalculable, irreparable, and serious harm. Therefore, if Lessee is found to be
using (in whatever manner) any portion of the Software, after the applicable
Lease Term, or after an event of default hereunder, or if Licensor terminates a
License or Lessee's right to use the Software thereunder for an alleged breach
of the License's use, disclosure, or transfer restrictions, then liquidated
damages shall be payable immediately to Lessor in an amount three (3) times the
license fee(s) paid to the Licensor with respect to the Software being used. The
exercise of any of the foregoing remedies by Lessor shall not constitute a
termination of this Lease unless Lessor so notifies Lessee in writing. In the
event Lessor repossesses the Hardware, Lessor may lease the Hardware or sell the
Hardware, in such manner, and at such times and upon such terms as Lessee may
determine. In the event that Lessor leases the Hardware, any rentals received by
Lessor for the remaining lease term (as defined in this Lease) shall be applied
to the payment of: (i) all costs and expenses (including reasonable attorney's
fees) incurred by Lessor, and (ii) the rentals for the remainder of the term and
all other sums then remaining unpaid under the Lease. The remaining balance of
such rentals, if any, shall be applied to reimburse Lessee for any sums
previously paid by Lessee as liquidated damages. All rentals received by Lessor
for the period commencing after the remaining Lease Term shall be retained by
Lessor. Lessee shall remain liable to Lessor to the extent that the aggregate
amount of the sums referred to in clauses (i) and (ii) above shall exceed the
aggregate rentals received by Lessor under such leases for the respective
remaining lease term applicable to the Hardware are covered by such leases. In
the event that Lessor shall sell the Hardware, the proceeds thereof shall be
applied to the sum of (i) all costs and expenses (including reasonable
attorney's fees) incurred by Lessor in disposing of such Hardware, (ii) the
rentals accrued under this Lease, but unpaid up to the time of such disposition,
(iii) any and all other sums (other than rentals) then owing to Lessor by Lessee
hereunder, and (iv) the Casualty Value of such Hardware determined as of the
date of such disposition in accordance with the Casualty Schedule, attached
hereto. The remaining balance of such proceeds, if any, shall be applied first
to reimburse Lessee for any sums previously paid by Lessee as liquidated
damages, and any remaining amounts shall be retained by Lessor. Lessee shall
remain liable to Lessor to the extent that the aggregate amount of the sums
referred to in clauses (i) through (iv) above shall exceed the aggregate
proceeds received by Lessor in connection with the disposition of the Leased
Property. Lessor's remedies, as discussed in this Lease shall not be deemed
exclusive. Waiver of any defaults or breach of this Lease shall not be construed
as a waiver of subsequent or continuing defaults or breaches.
16. QUIET ENJOYMENT: The Lessor covenants that if, and so long as the Lessee
keeps and performs each and every covenant, condition and agreement to be
performed or observed by it hereunder, the Lessee shall quietly enjoy the Leased
Property hereunder without hindrance or molestation by the Lessor or any other
person lawfully claiming the same.
17. ATTORNEY'S FEES AND VENUE OF LITIGATION: If any party to this Lease brings
any action to enforce any of the terms of this Lease or to recover for a breach
of this Lease, then the prevailing party shall be entitled to recover all
attorneys' fees and costs of suit from the other party. The Lessee agrees that
all litigation arising out of this Lease or any breach thereof shall be filed
and conducted in the California Superior Court for the County of Orange, unless
the Lessor or its Assignee selects an alternative venue of litigation.
18. TRANSPORTATION; INSTALLATION/DEINSTALLATION: All transportation, rigging and
drayage charges on delivery or redelivery of the Leased Property to and from
Lessee shall be paid by Lessee. All installation and deinstallation charges
including packing materials and any fees and charges for maintenance
certification or recertification by the Manufacturer/Vendor/Licensor shall be
paid by Lessee.
19. FURTHER ASSURANCES; OFFER AND ACCEPTANCE; LESSEE'S FINANCIAL INFORMATION:
Lessee's signing of this document shall constitute an offer to Lessor to enter
into the Lease. In consideration of Lessor's time and effort in reviewing and
acting on the offer, Lessee agrees that its offer shall be irrevocable for a
period of twenty (20) business days after the date it is submitted to Lessor.
Lessor's signing of this Lease shall constitute acceptance of Lessee's offer to
enter into the Lease. Upon acceptance by Lessor, Lessee shall execute and
deliver such instruments and assurances as Lessor deems necessary or desirable
for confirmation, assignment and assurance of performance by Lessee of its
obligation hereunder or for perfection of this Lease, including but not limited
to the filing of this Lease or the filing of Uniform Commercial Code Financing
Statements (which Lessee agrees may be executed by Lessor on Lessee's behalf).
Lessee further authorizes Lessor to insert in each Lease Schedule and in other
appropriate documentation the serial number(s) and other identifying data of the
Leased Property, and to insert applicable lease dates and assignment dates as
necessary to complete such supplemental documentation. Lessee shall also provide
Lessor with all credit information reasonably requested by Lessor, including but
not limited to comparative audited financial statements for the most current
year and interim reporting period. Lessee's failure to provide such information
to Lessor shall be an event of default under Section 14 of this Lease. Lessor
shall have the right at its sole discretion for any purpose whatsoever for a
reasonable period of time as solely determined by Lessor, after such financial
information has been submitted to Lessor, to terminate this Lease by giving
written notice of such termination to Lessee. In the event of such termination,
all obligations of Lessor set forth herein shall be cancelled; otherwise Lessor
shall confirm its acceptance in writing to Lessee.
20. NOTICES: Unless otherwise specifically provided herein, all notices to
Lessor shall be delivered in person to an officer of the Lessor, or shall be
sent certified mail return receipt requested to Lessor, at its address shown
above or at any later address last known to the sender; all notices to Lessee
shall be in writing, and shall be delivered by mail [Illegible] or at any later
address last known to the sender.
21. AGREMENTS: This is the complete agreement by and between the parties hereto.
NO ORAL OR WRITTEN AGREEMENT GUARANTY, PROMISE, CONDITION, REPRESENTATION, OR
WARRANTY SHALL BE BINDING UNLESS MADE A PART OF THIS LEASE BY DULY EXECUTED
ADDENDUM. All agreements, representations, and warranties contained in this
Lease, or in any document or certificate delivered pursuant hereto or in
connection herewith, shall survive the expiration or other termination of this
Lease. Any provision of this Lease which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, Lessee hereby waives any provision of law which
renders any provision hereof prohibited or unenforceable in any respect. THIS
LEASE SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF CALIFORNIA. Time is of the essence of this Lease.
22. ASSIGNMENT: WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT
ASSIGN THIS LEASE OR ITS INTEREST HEREUNDER IN ANY FORM OR MANNER INCLUDING, BUT
NOT LIMITED TO, AN ASSIGNMENT DUE TO A SALE, MERGER, LIQUIDATION, SUB-LEASE,
LEVERAGED BUYOUT, CHANGE OF OWNERSHIP OR CHANGE-IN-CONTROL. THE LESSOR MAY SELL
AND ASSIGN ITS RIGHT, TITLE, INTEREST, OR ANY OTHER RIGHTS IT MAY HAVE AS AN
OWNER AND LESSOR OF THE LEASED PROPERTY TO AN ASSIGNEE ("ASSIGNEE"). LESSEE
HEREBY CONSENTS TO SUCH ASSIGNMENT AND FURTHER AGREES AS FOLLOWS: (1) THAT
ASSIGNEE DOES NOT ASSUME ANY OF THE OBLIGATIONS OF LESSOR HEREUNDER; (2) TO PAY
ALL MONIES UNDER THE LEASE DIRECTLY TO ASSIGNEE UNCONDITIONALLY WITHOUT OFFSET
AND LESSEE FURTHER AGREES THAT SUCH MONIES SHALL BE PAYABLE NOTWITHSTANDING ANY
DEFENSE OR COUNTERCLAIM WHATSOEVER, WHETHER BY REASON OF BREACH OF THE LEASE,
THE EXERCISE OF ANY RIGHT HEREUNDER, OR OTHERWISE, WHICH IT MAY OR MIGHT NOW OR
HEREAFTER HAVE AS AGAINST THE LESSOR (THE LESSEE RESERVING ITS RIGHT TO HAVE
RECOURSE DIRECTLY AGAINST LESSOR ON ACCOUNT OF ANY SUCH DEFENSE OR
COUNTERCLAIM); AND (3) THAT SUBJECT TO AND WITHOUT IMPAIRMENT OF THE LESSEE'S
LEASEHOLD RIGHTS IN AND TO THE LEASED PROPERTY COVERED HEREUNDER, LESSEE SHALL
HOLD SAID LEASED PROPERTY AND THE POSSESSION THEREOF FOR THE ASSIGNEE TO THE
EXTENT OF THE ASSIGNEE'S RIGHTS THEREIN.
ASSIGNMENT OF RENTS AND LEASES
WESTERN BEEF-STEINWAY STREET. INC.,
a New York corporation,
Assignor,
to
METLIFE CAPITAL FINANCIAL CORPORATION,
a Delaware corporation,
Assignee.
March 19, 1996
Location of Premises:
Address: 36- 12/32 Steinway Street and
38- 15/23 Northern Boulevard
City and State of New York
County and Borough of Queens
Section: 4
Block: 665
Lot: 5,7,31,34 & 38
Prepared by, recording
requested by, and when
recorded, return to:
Dorothea S. Costrini
HUNTER, MACLEAN, EXLEY & DUNN, P.C.
200 East Saint Julian Street
Savannah, Georgia 31401
MetLife Capital Financial Corporation
Loan No. 5901796-001
<PAGE>
THIS ASSIGNMENT, made as of March 19, 1996, by Western Beef-Steinway
Street, Inc., a New York corporation, with a mailing address of 47-05
Metropolitan Avenue, Ridgewood, New York 11385 (hereinafter called "Assignor"),
in favor of METLIFE CAPITAL FINANCIAL CORPORATION, a Delaware corporation, with
a mailing address of Real Estate Department, 10900 Northeast Fourth Street,
Suite 500, Bellevue, Washington 98004 (hereinafter called "METLIFE").
WITNESSETH:
Assignor, for good and valuable consideration, the receipt of which
is hereby acknowledged, does hereby absolutely and unconditionally grant,
bargain, sell, transfer, assign, convey, set over and deliver unto METLIFE all
right, title and interest of Assignor in. to and under all written and oral
leases and rental agreements of the real estate described in Exhibit A attached
hereto and incorporated herein ("Property"), whether now in existence or
hereafter entered into, and all guaranties, amendments, extensions, renewals and
subleases of said leases and any of them, all of which are hereinafter called
the "Leases," all rents, income and profits which may now or hereafter be or
become due or owing under the Leases, and any of them, or on account of the use
of the Property, any award hereafter made in any bankruptcy. insolvency or
reorganization proceeding in any state or federal court involving any of the
tenants of the Leases, and any and all payments made by such tenants in lieu of
rent.
This Assignment is made for the purpose of securing:
A. The payment of the indebtedness (including any extensions or
renewals thereof) evidenced by a certain Amended and Restated
Note ("Note") of Assignor of even date herewith in the principal
sum of Three Million Dollars ($3,000,000) and secured by a
certain Amended and Restated Mortgage ("Mortgage") of even date
herewith encumbering the Property: and
B. The payment of all other sums with interest thereon becoming due
and payable to METLIFE under the provisions of the Mortgage and
any other instrument constituting security for the Note; and
C. The performance and discharge of each and every term, covenant
and condition contained in the Note. Mortgage and any other
instrument constituting security for the Note.
Assignor represents, warrants, covenants and agrees with METLIFE as
follows:
1. The sole ownership of the entire lessors interest in the Leases
is or shall be vested in Assignor, and Assignor has not, and
shall not, perform any acts or execute any other instruments
which might prevent METLIFE from filly exercising its rights
under any of the terms, covenants and conditions of this
Assignment.
2. The Leases are and shall be valid and enforceable in accordance
with their terms and have not been altered, modified, amended,
terminated, canceled, renewed or surrendered nor have any of the
terms and conditions thereof been waived in any manner
whatsoever except as approved in writing by METLIFE.
3; Assignor shall not materially alter the term or the amount of
rent payable or the term of any Lease without notice to METLIFE
and METLIFE's consent.
4. To the best of Assignor's knowledge, there are no defaults now
existing under any of the Leases, and there exists no state of
facts which, with the giving of notice or lapse of time or both,
would constitute a default under any of the Leases.
5. Assignor shall give prompt notice to METLIFE of any notice
received by Assignor claiming that a default has occurred under
any of the Leases on the part of Assignor. together with a
complete copy of any such notice.
<PAGE>
6. Each of the Leases shall remain in full force and effect
irrespective of any merger of the interest of lessor and any
lessee under any of the Leases.
7. Assignor will not permit any Lease to become subordinate to any
lien other than the lien of the Mortgage.
8. All existing Leases are described on Exhibit B attached hereto
and incorporated herein. Assignor has delivered to Assignee
true and correct copies of all existing Leases and all
amendments and modifications thereto.
The parties further agree as follows:
This Assignment is an absolute, present assignment from Assignor to
METLIFE, effective immediately, and is not merely an assignment for security
purposes. Notwithstanding the foregoing, until a notice is sent to the Assignor
in writing that an Event of Default (as defined in the Note and/or Mortgage) has
occurred under the terms and conditions of the Note or any other instrument
constituting additional security for the Note (which notice is hereafter called
a "Notice"). Assignor is panted a license to receive, collect and enjoy the
rents, income and profits accruing from the Property.
If an Event of Default (as defined in the Note and Mortgage) shall
occur, METLIFE may, at its option, after service of a Notice, receive and
collect all such rents, income and profits as they become due, from the
Property. METLIFE shall thereafter continue to receive and collect all such
rents, income and profits, until METLIFE shall otherwise agree in writing. All
sums received by Assignor after service of such Notice shall be deemed received
in trust and shall be immediately turned over to METLIFE.
Assignor hereby irrevocably appoints METLIFE its true and lawful
attorney-in-fact with power of substitution and with fill power for METLIFE in
its own name and capacity or in the name and capacity of Assignor, from and
after service of Notice, to demand, collect, receive and give complete
acquittances for any and rents, income and profits accruing from the Property,
either in its own name or in the name of Assignor or otherwise, which METLIFE
may deem necessary or desirable in order to collect and Enforce the payment of
the rents, income and profits and to demand, correct, receive, endorse, and
deposit all checks, drafts, money orders or notes given in payment of such
rents. Such appointment is coupled with an interest and is irrevocable. METLIFE
shall not be liable for or prejudiced by any loss of any note, checks, drafts,
etc., unless such loss is due to the gross negligence or willful misconduct of
METLIFE.
METLIFE shall apply the rents received from Assignor's lessees, to
accrued interest and principal under the Note. If no Event of Default remains
uncured, amounts received in excess of the aggregate monthly payment due under
the Note shall be remitted to Assignor in a timely manner. Nothing contained
herein shall be construed to constitute METLIFE as a mortgagee-in-possession in
absence of its physically taking possession of the Property.
Assignor also hereby irrevocably appoints METLIFE as its true and
lawful attorney-in-fact to appear in any state or federal bankruptcy,
insolvency, or reorganization proceeding in any state or federal court involving
any of the tenants of the Leases. Lessees of the Property are hereby expressly
authorized and directed, from and after service of a Notice to pay any and all
amounts due Assignor pursuant to the Leases to METLIFE or such nominee as
METLIFE may designate in writing delivered to and received by such lessees who
are expressly relieved of any and all duty, liability or obligation to Assignor
in respect of all payments so made.
If an Event of Default shall occur, METLIFE is hereby vested with
full power from and after service of a Notice to use all measures, legal and
equitable, deemed by it necessary or proper to enforce this Assignment and to
collect the rents, income and profits assigned hereunder, including the right of
METLIFE or its designee, to enter upon the Property, or any part thereof, and
take possession of all or any part of the Property together with all personal
property, fixtures, documents, books, records, papers and accounts of Assignor
relating thereto, and may exclude the Assignor, its agents and servants, wholly
therefrom. Assignor hereby grants full power and authority to METLIFE to
exercise all rights, privileges and powers herein panted at any and all times
after service of a Notice, with fill power to use and
2
<PAGE>
apply all of the rents and other income herein assigned to the payment of the
costs of managing and operating the Property and of any indebtedness or
liability of Assignor to METLIFE, including but not limited to the payment of
taxes, special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the improvements on the
Property or of making the same rentable, reasonable attorneys' fees incurred
in connection with the enforcement of this Assignment and of principal and
interest payments due from Assignor to METLIFE on the Note and the Mortgage,
all in such order as METLIFE may determine. METLIFE shall be under no
obligation to exercise or prosecute any of the rights or claims assigned to
it hereunder or to perform or carry out any of the obligations of the lessor
under any of the Leases and does not assume any of the liabilities in
connection with or arising or growing out of the covenants and agreements of
Assignor in the leases. It is farther understood that this Assignment shall
not operate to place responsibility for the control, care, management or
repair of the Property, or parts thereof, upon METLIFE, nor shall it operate
to make METLIFE liable for the performance of any of the terms and conditions
of any of the Leases, or for any waste of the Property by any lessee under
any of the Leases or any other person, or for any dangerous or defective
condition of the Property or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
lessee, licensee, employee or stranger.
Waiver of or acquiescence by METLIFE in any default by the
Assignor, or failure of the METLIFE to insist upon strict performance by the
Assignor of any covenants, conditions or agreements in this Assignment, shall
not constitute a waiver of any subsequent or other default or failure,
whether similar or dissimilar.
The rights and remedies of METLIFE under this Assignment are
cumulative and are not in lieu of. but are in addition to any other rights or
remedies which METLIFE shall have under the Note or any other instrument
constituting security for the Note, or at law or in equity.
If any term of this Assignment, or the application thereof to any
person or circumstances, shall, to any extent, be invalid or unenforceable,
the remainder of this Assignment, or the application of such term to persons
or circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each term of this Assignment shall be
valid and enforceable to the fullest extent permitted by law.
Any and all notices, elections, demands, or requests permitted or
required to be made under this Assignment, including without limitation a
Notice, shall be given in accordance with Section 18 of the Mortgage.
Assignor hereby authorizes METLIFE to give written notice of this
Assignment, which may include a copy hereof, at any time to any tenant under
any of the Leases.
The terms "Assignor" and "METLIFE" shall be construed to include
the legal representatives, successors and assigns thereof. The gender and
number used in this Assignment are used as a reference term only and shall
apply with the same effect whether the parties are of the masculine or
feminine gender, corporate or other form, and the singular shall likewise
include the plural.
This Assignment may not be amended, modified or changed nor shall
any waiver of any provisions hereof be effective, except only by an
instrument in writing and sighed by the party against whom enforcement of any
waiver, amendment, change, modification or discharge is sought.
Notwithstanding anything contained herein to the contrary, in no
event shall this Assignment be deemed to reduce the indebtedness evidenced by
the Note by an amount in excess of the actual amount of cash received by
METLIFE under the Leases, whether before, during or after the occurrence of
an Event of Default, and Assignor acknowledges that in no event shall the
indebtedness secured hereby be reduced by the value from time to time of the
rents, income mid profits of or from the Property. In addition, METLIFE
reserves the right, at any time, whether before or after the occurrence of an
Event of Default, to recharacterize this Assignment as merely constituting
security for the indebtedness of Assignor to METLIFE, which
recharacterization shall be made by written notice delivered to Assignor.
METLIFE's receipt of any rents, issues, and profits pursuant to this
Assignment after the institution of foreclosure proceedings, either by court
action or by the private power of sale contained in any Mortgage now or
hereafter securing the Note, shall not cure an Event of Default, as defined
in the Note, or affect such proceedings or sale.
3
<PAGE>
This Assignment shall be construed and enforced under the laws of the
State of New York (excluding choice-of-law principles).
IN WITNESS WHEREOF, the said Assignor has caused this instrument to
be signed and sealed as of the date first above written.
ASSIGNOR:
WESTERN BEEF-STEINWAY STREET, INC.
a New York corporation
By: /s/ Peter Castellana, Jr.
--------------------------------
Peter Castellana, Jr., President
Attest: /s/ Robert C. Ludlow
-------------------------------
Title: Vice President
----------------------------
[SEAL]
Exhibits
Exhibit A - Legal Description
Exhibit B - List of Leases
4
<PAGE>
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
ACKNOWLEDGEMENT
ON THE 19th day of March, l996, before me personally came Peter
Castellana. Jr., to me known, who, being by me duly sworn did say that he
resides at 9 Colonial Drive, Upper Brookville, NY; that he is the President of
Western Beef-Steinway Street, Inc., the corporation described in and which
executed the above instrument; that he knows the seal of said corporation, that
the seal affixed to said instrument is said 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, as the free act and deed of such
corporation for the uses and purposes set forth therein.
/s/ Gary Pollard
--------------------
My commission expires:
GARY POLLARD
NOTARY PUBLIC, State of New York
No. 31-4827321
Qualified in New York City
Commission expires
4/30/1996
[SEAL]
5
<PAGE>
EXHIBIT A
PARCEL A (LOT 5 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bonded and described
as follows:
BEGINNING at a point on the southeasterly side of 38th Street, (60 feet wide)
distant 162.80 feet northeasterly from the corner formed by the intersection of
the southeasterly side of 38th Street with the northwesterly side of Northern
Blvd., 100 feet wide,
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 75.02
feet;
THENCE southeasterly at right angles to the southeasterly side of 38th Street,
54.35 feet;
THENCE still southeasterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course 118.56 feet to the northwesterly
side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 75.37 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 90.22 feet;
THENCE still northwesterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course, 25.03 feet to the southeasterly
side of 38th Street at the point or place of BEGINNING.
PARCEL B (LOT 7 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the southeasterly side of 38th Street (60 feet wide)
distant 237.82 feet (Actual) (237.80 feet Deed) northeasterly from the corner
formed by the intersection of the southeasterly side of 38th Street with the
northwesterly aide of Northern Blvd., 100 feet wide;
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 39.73
feet;
THENCE southeasterly on a line forming an exterior angle of 89 degrees 44
minutes 02 seconds with the southeasterly side of 38th Street, 94.78 feet
THENCE southwesterly and parallel with Steinway Street, 15.07 feet;
THENCE southeasterly at right angles to Steinway Street, 90 feet to the
northwesterly side of Steinway Street;
THENCE southwesterly along the northwesterly side of Steinway Street, 57.33 feet
to the corner formed by the intersection of the northwesterly side of Steinway
Street with the northwesterly side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 63.08 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 118.56 feet;
THENCE still northwesterly at right angles to the southeasterly side of 38th
Street and on a line forming an interior angle of 221 degrees 57 minutes 30
seconds with the preceding curse, 54.35 feet to the southeasterly side of 38th
Street at the point or place of BEGINNING.
<PAGE>
PARCEL C (LOT 31 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the westerly side of Steinway Street, formerly known as
Steinway Avenue and also formerly known as 10th Avenue, distant 100 feet
southerly from the corner formed by the intersection of the southerly side of
Thirty-sixth Avenue, formerly known as Washington Avenue with the westerly side
of Steinway Street;
RUNNING THENCE westerly parallel with Thirty-sixth Avenue and part of the
distance through a party wall, 100 feet;
THENCE southerly parallel with Steinway Street, 75 feet;
THENCE easterly parallel with Thirty-sixth Avenue, 100 feet to the westerly side
of Steinway Street;
THENCE northerly along the westerly side of Steinway Street, 75 feet to the
point or place of BEGINNING.
PARCEL D (LOT 34 IN BLOCK 665):
ALL that certain piece or parcel of land, situate, lying and being in the First
Ward of the Borough of Queens, (formerly Long Island City) County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at a point on the northwesterly side of Steinway Street, distant 175
feet southwesterly from the corner formed by the intersection of the
northwesterly side of Steinway Street with the southwesterly side of 36th
Avenue, 75 feet wide;
RUNNING THENCE southwesterly along the northwesterly side Steinway Street, 50
feet;
THENCE northwesterly at right angles to Steinway Street, 106.48 feet;
THENCE northeasterly and parallel with the northwesterly side of Steinway
Street, 50 feet;
THENCE southeasterly and at right angles to the Steinway Sweet, 106.48 feet to
the northwesterly side of Steinway Street, at the point or place of BEGINNING.
<PAGE>
PARCEL E (LOT 38 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of Tenth Avenue, formerly
Steinway Avenue, distant 57.33 feet northeasterly from the corner formed by the
intersection of the northwesterly side of Tenth Avenue with the northerly side
of Jackson Avenue;
RUNNING THENCE northeasterly along said side of Tenth Avenue, 150 feet;
THENCE northwesterly and at right angles to Tenth Avenue, 106.48 feet to the
center line of Harold Avenue, which is now closed;
THENCE southerly along said center line of Harold Avenue, 42.11 feet;
THENCE southwesterly parallel with Tenth Avenue, 111.26 feet;
THENCE southeasterly and at right angles to Tenth Avenue, 90 feet to the point
or place of BEGINNING.
For conveyancing only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof.
<PAGE>
Title No. NY951153
SCHEDULE A (CONT)
SAID PARCELS A, B, C, D AND E ALSO BEING BOUNDED AND DESCRIBED AS FOLLOWS:
OVERALL DESCRIPTION
All that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough and County
of Queens, City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the westerly side of
Steinway Street with the northwesterly side of Northern Boulevard (100 feet
wide);
RUNNING THENCE northerly along the westerly side of Steinway Street, 332.37
feet, to a point;
THENCE westerly parallel with the southerly side of 36th Avenue (75 feet wide)
through a party wall, 100 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 74.88 feet
to a point;
THENCE westerly along a line drawn at right angles to last mentioned course 6.48
feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 50 feet to a
point;
THENCE southeasterly along the center line of former Harold Avenue, and along a
line forming an angle on the northeast of 156 degrees 57 minutes 18 seconds
42.11 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 96.19 feet
to a point:
THENCE westerly along a line forming an angle on the northeast of 89 degrees 44
minutes 02 seconds with the easterly side of 38th Street (60 feet wide), 94.78
feet to the easterly side of 38th Street;
THENCE southerly along the easterly side of 38th Street 114.75 feet to a point:
THENCE easterly at right angles to the easterly side of 38th Street 25.03 feet
to a point;
THENCE southeasterly along a line drawn at right angles to the northwesterly
side of Northern Boulevard, 90.22 feet to the northwesterly side of Northern
Boulevard;
THENCE northeasterly along the northwesterly side of Northern Boulevard 138.45
feet to the corner formed by the intersection of the westerly side of Steinway
Street with the northwesterly side of Northern Boulevard, at the point or place
of BEGINNING.
<PAGE>
Loan No: 5901796-001
EXHIBIT B
(36 - 12/32 Steinway Street and 38 15/23 Northern Boulevard, Queens, New York)
List of Leases:
TENANT: DATE AMENDED
North Star Auto Center, Inc. May 1, 1993 [NOT DATED]
AMENDED AND RESTATED MORTGAGE
WESTERN BEEF-STEINWAY STREET, INC.,
a New York corporation,
Borrower,
to
METLIFE CAPITAL FINANCIAL CORPORATION,
a Delaware corporation,
Lender
March 19, 1996
Location of Premises:
Address: 36 - 12/32 Steinway Street and
38 - 15/23 Northern Boulevard
City of New York
Queens County, New York
Section: 4
Block: 665
Lot: 5,7,31,34 & 38
NOTICE: THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS
THEREOF BEING MODIFIED IN THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY HEREIN
CONVEYED.
THE REAL PROPERTY IS NOT PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE OR
MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESIDENTIAL
DWELLING UNITS. EACH DWELLING UNIT HAVING ITS OWN SEPARATE COOKING FACILITIES.
Prepared by, recording requested by,
and when recorded, return to:
Dorothea S. Costrini
HUNTER, MACLEAN, EXLEY & DUNN. P.C.
200 East Saint Julian Street
Savannah, Georgia 31401
MetLife Capital Financial Corporation
Loan No. 5901796-001
<PAGE>
THIS AMENDED AND RESTATED MORTGAGE is made and given as of March 19,
1996, by WESTERN BEEF-STEINWAY STREET, INC., a New York corporation
("Borrower"), whose address is 47-05 Metropolitan Avenue, Ridgewood, New York
11383, to METLIFE CAPITAL FINANCIAL CORPORATION, a Delaware corporation
("Lender"), whose address is 10900 Northeast Fourth Street. Suite 300, Bellevue,
Washington 98004, with reference to the recitals hereinafter set forth.
RECITALS:
A. Borrower has this date acquired or simultaneously with the execution
hereof is acquiring certain real property in Queens, New York, more particularly
described in Exhibit A (the "Property").
B. The Property is encumbered by a certain Amended and Restated Mortgage
(the "Mortgage") dated November 24, 1993, recorded December 10, 1993, in Reel
3734, Page 129, in the Office of the Registrar for Queens County, New York, from
Lacher/Koeppel Realty Corp., a New York corporation ("Lacher"), to Chrysler
Credit Corporation, a Delaware corporation ("Chrysler"), securing a loan from
Chrysler to Lacher in the principal amount of $3,500,000, as evidenced by a
certain Amended and Restated Promissory Note (the "Note") dated November 24,
1993, from Lacher to Chrysler.
C. Chrysler has assigned the Note and the Mortgage to Lender. Prior to
such assignment, the principal indebtedness evidenced and secured by the Note
and the Mortgage was reduced to THREE MILLION DOLLARS ($3,000,000). Borrower has
accepted and assumed all obligations of Lacher under the Mortgage.
D. Borrower and Lender have agreed to amend and restate the Note pursuant
to an Amended and Restated Promissory Note of even date herewith. As used
herein, the "Note" shall refer to the Note as so amended and restated.
E. Borrower and Lender desire that the Mortgage should be amended and
restated as set forth below.
NOW, THEREFORE, in consideration of the above premises and of other good
and valuable consideration, the receipt and adequacy whereof are hereby
acknowledged. Borrower and Lender covenant and agree as follows:
I. Mortgages in Full Force. Except as is expressly set forth herein, the
Mortgage shall remain in full force and effect.
II. Ratification. The Mortgage, as amended and restated below, hereby
ratified and confirmed in all respect by Borrower.
III. Recordation. Borrower shall promptly cause this Agreement to be
recorded in such manner and in such places as may be required by any present or
future law in order to provide notice of and fully protect the lien of THE
Mortgage, and the interests of the Lender in the Property. Borrower shall pay
all filing, registration, and recording fees, and all expenses incidental to the
preparation, execution and acknowledgement of this Agreement, and all federal,
state, county and municipal taxes (not including income taxes of Lender),
duties, imposts, assessments, and charges arising out of or in connection with
the filing, registration, recording, execution and delivery of this Agreement,
and Borrower shall hold harmless and indemnify Lender against any liability
incurred by reason of the imposition of any taxes on the issuance, making,
filing, registration, or recording of this Agreement.
IV. No Offsets, etc. Borrower, represents and warrants to Lender that, as
of the date hereof, (a) there are no offsets, counterclaims or defenses against
this Agreement, the Mortgage, or the Note, (b) except as set forth herein the
Mortgage has not been amended or modified in any manner whatsoever, and (c)
Borrower has full power, authority and legal right to execute this Agreement and
to keep and observe all of the terms of this Agreement and the
<PAGE>
Mortgage on Borrower's part to be observed or performed. Borrower hereby
certifies that this instrument secures the same indebtedness secured by the
Mortgage and secures no further other indebtedness or obligation.
V. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns hereunder. Anything contained in the
provisions of this Agreement to the contrary notwithstanding. Borrower shall not
be entitled to assign any of its rights under the provisions of this Agreement
without first obtaining Lender's express written consent thereto.
VI. Applicable Law. This Agreement shall be given effect and construed by
application of the law of the State of New York applicable to contracts made and
to be performed therein (excluding its choice-of-law rules).
VII. Effectiveness. This Agreement shall become effective upon and only
upon its execution and delivery by each party hereto.
VIII.Waiver. Lender shall not be deemed to have waived the exercise of any
right which it holds hereunder or under the Notes unless such waiver is made
expressly and in writing (and no delay or omission by Lender in exercising any
such right shall be deemed to be a waiver of its future exercise). No such
waiver made as to any instance involving the exercise of any such right shall be
deemed a waiver as to any other such instance, or any other such right.
IX. Time of Essence. Time shall be of the essence of this Agreement.
X. Headings. The headings of the Sections, subsections, Paragraphs and
subparagraphs hereof are provided herein for and only for convenience of
reference and shall not be considered in construing their contents.
XI. Amendment and Restatement. The Mortgage is hereby modified. Amended,
and restated to read as follows:
AMENDED AND RESTATED MORTGAGE
THIS MORTGAGE (herein "Instrument"), made as of March 19,1996, among the
Mortgagor, Western Beef-Steinway Street, Inc., a New York corporation, whose
address is 47-05 Metropolitan Avenue, Ridgewood, New York 11385 (herein
"Borrower"), in favor of the Mortgagee, METLIFE CAPITAL FINANCIAL CORPORATION, a
Delaware corporation, whose address is Real Estate Department, 10900 Northeast
Fourth Street, Suite 500, Bellevue. Washington 98004 (herein "METLIFE").
WITNESSETH:
THAT, WHEREAS, Borrower is justly indebted to METLIFE in the sum of Three
Million Dollars ($3,000,000), as evidenced by a certain Note (as hereinafter
defined.)
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged. Borrower irrevocably conveys, warrants, and mortgages to METLIFE
with POWER OF SALE all of Borrowers right, title and interest, now owned or
hereafter acquired, including any reversion or remainder interest in the real
property located in the City of New York, County of Queens, State of New York,
and more particularly described on Exhibit A attached hereto and incorporated
herein including all heretofore or hereafter vacated alleys and streets abutting
the property, and all easements, rights, appurtenances, tenements,
hereditaments, rents, royalties, mineral, oil and gas rights and profits, water,
water rights, and water stock appurtenant to the property (collectively
"Premises");
TOGETHER with all of Borrower's estate, right title and interest, now
owned or hereafter acquired, in:
2
<PAGE>
(a) all buildings, structures, improvements, parking areas, landscaping,
equipment, fixtures and articles of property now or hereafter erected on,
attached to, or used or adapted for use in the operation of the Premises;
including but without being limited to, all heating, air conditioning and
incinerating apparatus and equipment; all boilers, engines, motors, dynamos,
generating equipment, piping and plumbing fixtures, water heaters, ranges,
cooking apparatus and mechanical kitchen equipment, refrigerators, freezers,
cooling, ventilating, sprinkling and vacuum cleaning systems, fire extinguishing
apparatus, gas and electric fixtures, carpeting, floor coverings, underpadding,
elevators, escalators, partitions, mantels, built-in mirrors, window shades,
blinds, draperies, screens, storm sash, awnings, signs, furnishings of public
spaces, halls and lobbies, and shrubbery and plants, and including also all
interest of any owner of the Premises in any of such items hereafter at any time
acquired under conditional sale contract, chattel mortgage or other title
retaining or security instrument all of which property mentioned in this clause
(a) shall be deemed part of the realty covered by this Instrument and not
severable wholly or in part without material injury to the freehold of the
Premises (all of the foregoing together with replacements and additions thereto
are referred to herein as "Improvements"); and
(b) all compensation, awards, damages, rights of action and proceeds,
including interest thereon and/or the proceeds of any policies of insurance
therefor, arising out of or relating to a (i) taking or damaging of the Premises
or Improvements thereon by reason of any public or private improvement,
condemnation proceeding (including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or (ii) any injury to or
decrease in the value of the Premises or the Improvements for any reason
whatsoever;
(c) return premiums or other payments upon any insurance any time provided
for the benefit of or naming METLIFE, and refunds or rebates of taxes or
assessments on the Premises;
(d) all the right, title and interest of Borrower in, to and under all
written and oral leases and rental agreements (including extensions, renewals
and subleases; all of the foregoing shall be referred to collectively herein as
the "Leases") now or hereafter affecting the Premises including, without
limitation, all rents, issues, profits and other revenues and income therefrom
and from the renting, leasing or bailment of Improvements and equipment, all
guaranties of tenants' performance under the Leases, and all rights and claims
of any kind that Borrower may have against any tenant under the Leases or in
connection with the termination or rejection of the Leases in a bankruptcy or
insolvency proceeding
(e) plans, specifications, contracts and agreements relating to the design
or construction of the Improvements; Borrower's rights under any payment,
performance, or other bond in connection with the design or construction of the
Improvements; all landscaping and construction materials, supplies, and
equipment used or to be used or consumed in connection with construction of the
Improvements, whether stored on the Premises or at some other location; and
contracts, agreements, and purchase orders with contractors, subcontractors,
suppliers, and materialmen incidental to the design or construction of the
Improvements;
(f) all contracts, accounts, rights, claims or causes of action pertaining
to or affecting the Premises or the Improvements, including, without limitation,
all options or contracts to acquire other property for use in connection with
operation or development of the Premises or Improvements, management contracts,
service or supply contracts, deposits, bank accounts, general intangibles
(including without limitation trademarks, trade names and symbols), permits,
licenses, franchises and certificates, and all commitments or agreements, now or
hereafter in existence, intended by the obligor thereof to provide Borrower with
proceeds to satisfy the loan evidenced hereby or improve the Premises or
Improvements, and the right to receive all proceeds due under such commitments
or agreements including refundable deposits and fees:
(g) all books, records, surveys, reports and other documents related to
the Premises, the Improvements, the Leases, or other items of collateral
described herein; and
(h) all additions, accessions, replacements, substitutions, proceeds and
products of the real and personal property, tangible and intangible, described
herein.
3
<PAGE>
All of the foregoing described collateral is exclusive of any furniture,
furnishings or trade fixtures owned and supplied by Borrower and separately
financed or by tenants of the Premises. The Premises, the Improvements the
Leases and all of the rest of the foregoing property are herein referred to as
the "Property."
TO HAVE AND TO HOLD the Property and all parts, rights, members and
appurtenances thereof to the use, benefit and behoof of METLIFE and its
successors and assigns in fee simple forever.
TO SECURE TO METLIFE (a) the repayment of the indebtedness evidenced by
Borrower's note dated of even date herewith in the principal sum of Three
Million Dollars ($3,000,000), with interest thereon as set forth in the note,
and all renewals, extensions and modifications thereof (herein "Note"); (b)
[INTENTIONALLY DELETED] (c) the payment of all other sums, with interest
thereon, advanced in accordance herewith to protect the security of this
Instrument or to fulfill any of Borrower's obligations hereunder or under the
other Loan Documents (as defined below); (d) the performance of the covenants
and agreements of Borrower contained herein or in the other Loan Documents; and
(e) the repayment of all sums now or hereafter owing to METLIFE by Borrower
pursuant to any instrument which recites that it is secured hereby. The
indebtedness and obligations described in clauses (a)-(e) above are collectively
referred to herein as the "Indebtedness." The Note, this Instrument, and all
other documents evidencing, securing or guaranteeing the Indebtedness (except
any Certificate and Indemnity Agreement Regarding Hazardous Substances), as the
same may be modified or amended from time to time, are referred to herein as the
"Loan Documents." The terms of the Note secured hereby may provide that the
interest rate or payment terms or balance due may be indexed, adjusted, renewed,
or renegotiated from time to time, and this Instrument shall continue to secure
the Note notwithstanding any such indexing, adjustment, renewal or
renegotiation.
Borrower represents and warrants that Borrower has good, marketable and
insurable title to, and has the right to mortgage an indefeasible fee simple
estate in, the Premises. Improvements, rents, and leases, and the right to
convey the other Property, that the Property is unencumbered except as disclosed
in writing to and approved by METLIFE prior to the date hereof, and that
Borrower will warrant and forever defend the title to the Property against all
claims and demands, subject only to the permitted exceptions set forth in
Schedule I attached hereto.
Borrower represents, warrants, covenants and agrees for the benefit of
METLIFE as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when due
the principal of and interest on the Indebtedness, any prepayment and other
charges provided in the Loan Documents and all other sums secured by this
Instrument.
2. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Upon the occurrence of an
Event of Default (hereinafter defined), and at METLIFE's sole option at any time
thereafter, Borrower shall pay in addition to each monthly payment on the Note,
one-twelfth of the annual real estate taxes, insurance premiums, assessments,
water and sewer rates, pound rents and other charges (herein "Impositions")
payable with respect to the Property (as estimated by METLIFE in its sole
discretion), to be held by METLIFE without interest to Borrower, for the payment
of such obligations.
If the amount of such additional payments held by METLIFE ("Funds") at the
time of the annual accounting thereof shall exceed the amount deemed necessary
by METLIFE to provide for the payment of Impositions as they fall due, such
excess shall be at Borrower's option, either repaid to Borrower or credited to
Borrower on the next monthly installment or installments of Funds due. If at any
time the amount of the Funds held by METLIFE shall be less than the amount
deemed necessary by METLIFE to pay Impositions as they fall due, Borrower shall
pay to METLIFE any amount necessary to make up the deficiency within thirty (30)
days after notice from METLIFE to Borrower requesting payment thereof.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, METLIFE may apply, in any amount and in any order as METLIFE shall
determine in METLIFE's sole discretion, any Funds held by METLIFE at the time of
application (i) to pay impositions which are now or will hereafter become due,
or (ii) as a credit
4
<PAGE>
against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, METLIFE shall refund to Borrower any Funds held by
METLIFE.
3. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise, each
complete installment payment received by METLIFE from Borrower under the Note or
this Instrument shall be applied by METLIFE first in payment of amounts payable
to METLIFE by Borrower under Section 2 hereof, then to interest payable on the
Note, then to principal of the Note, and then to interest and principal on any
other sums advanced by METLIFE pursuant to the terms of this Instrument, in such
order as METLIFE, at METLIFE's sole discretion, shall determine. Upon the
occurrence of an Event of Default, METLIFE may apply, in any amount and in any
order as METLIFE shall determine in METLIFE's sole discretion, any payments
received by METLIFE under the Note or this Instrument. Any partial payment
received by METLIFE shall, at METLIFE's option, be held in a non-interest
bearing account until METLIFE receives funds sufficient to equal a complete
installment payment.
4. CHARGES, LIENS. Borrower shall pay all Impositions attributable to the
Property in the manner provided under Section 2 hereof or, if not paid in such
manner, by Borrower making payment, when due, directly to the payee thereof, or
in such other manner as METLIFE may designate in writing. If requested by
METLIFE, Borrower shall promptly furnish to METLIFE all notices of Impositions
which become due, and in the event Borrower shall make payment directly,
Borrower shall promptly finish to METLIFE receipts evidencing such payments.
Borrower shall promptly discharge any lien which has, or may have, priority over
or equality with, the lien of this Instrument, and Borrower shall pay, when due,
the claims of all persons supplying labor or materials to or in connection with
the Property. Without METLIFE's prior written permission, Borrower shall not
allow any lien inferior to this Instrument to be perfected against the Property.
If any lien inferior to this Instrument is filed against the Property without
METLIFE's prior written permission and without the consent of Borrower, Borrower
shall, within thirty (30) days after receiving notice of the filing of such
lien, cause such lien to be released of record of bonded over within sixty (60)
days of its filing and deliver evidence of such release or bonding to METLIFE
(provided, however, that Borrower shall have up to thirty (30) additional days
to secure the release or approval of a bond if Borrower shall have instituted
appropriate legal proceedings therefor promptly and diligently pursued the
same).
5. INSURANCE. Borrower shall obtain and maintain the following types of
insurance upon and relating to the Property:
(a) "All Risk" property and fire insurance (with extended coverage
endorsement including malicious mischief and vandalism) in an amount not less
than the full replacement value of the Property (with a deductible not to exceed
$5,000 and with co-insurance limited to a maximum of 10% of the amount of the
policy), naming METLIFE under a lenders loss payee endorsement (form 438BFU or
equivalent) and including agreed amount, inflation guard, replacement cost and
waiver of subrogation endorsements:
(b) Comprehensive general liability insurance in an amount not less than
$2,000,000.00 insuring against personal injury, death and property damage and
naming METLIFE as additional insured;
(c) Business interruption insurance covering loss of rental or other
income (including all expenses payable by tenants) for up to six (6) months; and
(d) Such other types of insurance or endorsements to existing insurance as
may be reasonably required from time to time by METLIFE.
Upon the reasonable request of METLIFE, Borrower shall increase the
coverages under any of the insurance policies required to be maintained
hereunder or otherwise modify such policies in accordance with METLIFE's
request. All of the insurance policies required hereunder shall be issued by
corporate insurers licensed to do business, in the state in which the Property
is located and rated A:X or better by A.M. Best Company, and shall be in form
acceptable to METLIFE. If and to the extent that the Property is located within
an area that has been or is hereafter designated or identified as an area having
special flood hazards by the Department of Housing and Urban Development or such
other official as shall from time to time be authorized by federal or state law
to make such designation pursuant
5
<PAGE>
to any national or state program of flood insurance. Borrower shall carry flood
insurance with respect to the Property in amounts not less than the maximum
limit of coverage then available with respect to the Property or the amount of
the Indebtedness, whichever is less. Certificates of all insurance required to
be maintained hereunder shall be delivered to METLIFE, along with evidence of
payment in full of all premiums required thereunder, contemporaneously with
Borrower's execution of this Instrument. All such certificates shall be in form
reasonably acceptable to METLIFE and shall require the insurance company to give
to METLIFE at least thirty (30) days' prior written notice before canceling the
policy for any reason or materially amending it. Certificates evidencing all
renewal and substitute policies of insurance shall be delivered to METLIFE,
along with evidence of the payment in full of all premiums required thereunder,
at least fifteen (15) days before termination of the policies being renewed or
substituted. If any loss shall occur at any time when an Event of Default shall
have occurred and be continuing. METLIFE shall be entitled to the benefit of all
insurance policies held or maintained by Borrower, to the same extent as if same
had been made payable to METLIFE, and upon foreclosure hereunder, METLIFE shall
become the owner thereof. METLIFE shall have the right, but not the obligation,
to make premium payments, at Borrower's expense, to prevent any cancellation,
endorsement, alteration or reissuance of any policy of insurance maintained by
Borrower, and such payments shall be accepted by the insurer to prevent same.
If any act or occurrence of any kind or nature (including any casualty for
which insurance was not obtained or obtainable) shall result in damage to or
destruction of the Property (such event being called a "Loss"). Borrower will
give prompt written notice thereof to METLIFE. All insurance proceeds paid or
payable in connection with any Loss shall be paid to METLIFE. If (i) no Event of
Default has occurred and is continuing hereunder, (ii) Borrower provides
evidence reasonably satisfactory to METLIFE of its ability to pay all amounts
becoming due under the Note during the pendency of any restoration or repairs to
or replacement of the Property, (iii) the available insurance proceeds are, in
METLIFE's reasonable judgment, sufficient to fully and completely restore,
repair or replace the Property, and (iv) Borrower provides evidence satisfactory
to METLIFE that none of the tenants of the Property except North Star Auto
Center, Inc., will terminate its lease agreements as a result of either the Loss
or the repairs to or replacement of the Property. Borrower shall have the right
to apply all insurance proceeds received in connection with such Loss either (a)
to restore, repair, replace and rebuild the Property as nearly as possible to
its value, condition and character immediately prior to such Loss, or (b) to the
payment of the Indebtedness in such order as METLIFE may elect. If an Event of
Default has occurred and is continuing hereunder at the time of such Loss, if
METLIFE determines that Borrower will be unable to pay all amounts becoming due
under the Note during the pendency of any restoration or repairs to or
replacement of the Property, if the available insurance proceeds are
insufficient, in METLIFE's judgment, to fully and completely restore. repair or
replace the Property or if METLIFE believes that one or more tenants of the
Property will terminate their lease agreements other than North Star Auto
Center. Inc., as a result of either the Loss or the repairs to or replacement of
the Property, then all of the insurance proceeds payable with respect to such
Loss will be applied to the payment of the Indebtedness, or if so instructed by
METLIFE. Borrower will promptly, at Borrower's sole cost and expense and
regardless of whether sufficient insurance proceeds shall be available, commence
to restore, repair, replace and rebuild the Property as nearly as possible to
its value, condition, character immediately prior to such Loss. Borrower shall
diligently prosecute any restoration, repairs or replacement of the Property
undertaken by or on behalf of Borrower pursuant to this Section 5. All such work
shall be conducted pursuant to written contracts approved by METLIFE in writing,
which approval shall not be unreasonably withheld or delayed. Notwithstanding
anything contained herein to the contrary, in the event the insurance proceeds
received by METLIFE following any Loss are insufficient in METLIFE's judgment to
fully and completely restore, repair or replace the Property, and if Borrower
has complied with all of the other conditions described in this Section 5.
Borrower may elect to restore, repair or replace the Property if it first
deposits with METLIFE such additional sums as METLIFE determines are necessary
in order to fully and completely restore, repair or replace the Property. In the
event any insurance proceeds remain following the restoration, repair or
replacement of the Property, such proceeds shall be applied to the Indebtedness
in such order as METLIFE may elect.
6. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower (a) shall not commit
waste or permit impairment or deterioration of the Property, (b) shall not
abandon the Property, (c) shall restore or repair promptly and in a good and
workmanlike manner all or any part of the Property to the equivalent of its
original condition, or such other condition as METLIFE may approve in writing,
in the event of any damage, injury or loss thereto, whether or not insurance
proceeds are available to cover in whole or in part the costs of such
restoration or repair but subject
6
<PAGE>
to METLIFE's making insurance proceeds available, (d) shall keep the Property,
including all improvements, fixtures, equipment, machinery and appliances
thereon, in good repair and shall replace fixtures, equipment, machinery and
appliances on the Property when necessary to keep such items in good repair, (e)
shall comply with all laws, ordinances, regulations and requirements of any
governmental body applicable to the Property, (f) if all or part of the Property
is for rent or lease, then METLIFE, at its option after the occurrence of an
Event of Default, may require Borrower to provide for professional management of
the Property by a property manager satisfactory to METLIFE pursuant to a
contract approved by METLIFE in writing, unless such requirement shall be waived
by METLIFE in writing, (g) shall generally operate and maintain the Property in
a manner to ensure maximum rentals, and (h) shall give notice in writing to
METLIFE of and, unless otherwise directed in writing by METLIFE, appear in and
defend any action or proceeding purporting to affect the Property, the security
of this Instrument or the rights or powers of METLIFE hereunder. Neither
Borrower nor any tenant or other person. without the written approval of
METLIFE. shall remove, demolish or alter any improvement now existing or
hereafter erected on the Property or any fixture, equipment, machinery or
appliance in or on the Property except when incident to the replacement of
fixtures, equipment, machinery and appliances with items of like kind.
Non-structural alterations shall not require the consent of METLIFE.
Borrower represents, warrants and covenants that the Property is and shall
be in compliance with the Americans with Disabilities Act of 1990 and all of the
regulations promulgated thereunder, as the same may be amended from time to
time.
7. USE OF PROPERTY. Unless required by applicable law or unless METLIFE
has otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the Property was intended at the time this Instrument
was executed. Borrower shall not, without METLIFE's prior written consent, (i)
initiate or acquiesce in a change in the zoning classification (including any
variance under any existing zoning ordinance applicable to the Property), (ii)
permit the use of the Property to become a non-conforming use under applicable
zoning ordinances, (iii) file any subdivision or panel map affecting the
Property, or (iv) amend, modify or consent to any easement or covenants,
conditions and restrictions pertaining to the Property.
8. PROTECTION OF METLIFE'S SECURITY. If Borrower fails to perform any of
the covenants and agreements contained in this Instrument, or if any action or
proceeding is commenced which affects the Property or title thereto or the
interest of METLIFE therein, including, but not limited to, eminent domain,
insolvency, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent then METLIFE at METLIFE's option may make such appearances,
disburse such sums and take such action as METLIFE deems necessary, in its sole
discretion, to protect METLIFE's interest, including, but not limited to, (i)
disbursement of attorneys' fees, (ii) entry upon the Property to make repairs,
and (iii) procurement of satisfactory insurance as provided in Section 5 hereof.
Any amounts disbursed by METLIFE pursuant to this Section 8, with interest
thereon, shall become additional Indebtedness of Borrower secured by this
Instrument. Unless Borrower and METLIFE agree to other terms of payment. such
amounts shall be immediately due and payable and shall bear interest from the
date of disbursement at the highest rate which may be collected from Borrower
under applicable law or, at METLIFE's option, the rate stated in the Note.
Borrower hereby covenants and agrees that METLIFE shall be subrogated to the
lien of any mortgage or other lien discharged, in whole or in part, by the
Indebtedness. Nothing contained in this Section 8 shall require METLIFE to incur
any expense or take any action hereunder.
9. INSPECTION. METLIFE may make or cause to be made reasonable entries
upon the Property to inspect the interior and exterior thereof.
10. FINANCIAL DATA. Borrower will finish to METLIFE, and will cause any
guarantor of the Indebtedness to finish METLIFE on request within ninety (90)
days after the close of its fiscal year (i) annual balance sheet and profit and
loss statements prepared in accordance with generally accepted accounting
principles and practices consistently applied and, if METLIFE so requires,
accompanied by the annual audit report of an independent certified public
accountant reasonably acceptable to METLIFE, (ii) an annual operating statement,
together with a complete rent roll and other supporting data reflecting all
material information with respect to the operation of the Property and
Improvements, and (iii) all other financial information and reports that METLIFE
may from time to time
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reasonably request including, if METLIFE so requires, income tax returns of
Borrower and any guarantor of any portion of the Indebtedness, and financial
statements of any tenants designated by METLIFE. METLIFE acknowledges that the
financial statement of North Star Auto Center. Inc., may be unavailable.
11. CONDEMNATION. If the Property, or any part thereof, shall be condemned
for any reason, including without limitation fire or earthquake damage, or
otherwise taken for public or quasi-public use under the power of eminent
domain, or be transferred in lieu thereof, all damages or other amounts awarded
for the taking of, or injury to, the Property shall be paid to METLIFE who shall
have the right, in its sole and absolute discretion, to apply the amounts so
received against (a) the costs and expenses of METLIFE, including reasonable
attorneys' fees incurred in connection with collection of such amounts, and (b)
the balance against the Indebtedness; provided, however, that if (i) no Event of
Default shall have occurred and be continuing hereunder, (ii) Borrower provides
evidence satisfactory to METLIFE of its ability to pay all amounts becoming due
under the Note during the pendency of any restoration or repairs to or
replacement of the Property, (iii) METLIFE determines, in its reasonable
discretion, that the proceeds of such award are sufficient to restore, repair,
replace and rebuild the Property as nearly as possible to its value, condition
and character immediately prior to such taking (or, if the proceeds of such
award are insufficient for such purpose, if Borrower provides additional sums to
METLIFE's satisfaction so that the aggregate of such sums and the proceeds of
such award will be sufficient for such purpose), and (iv) Borrower provides
evidence reasonably satisfactory to METLIFE that none of the tenants of the
Property (other than North Star Auto Center. Inc.) will terminate their lease
agreements as a result of either the condemnation or taking or the repairs to or
replacement of the Property, the proceeds of such award, together with
additional sums provided by Borrower, shall be placed in a separate account for
the benefit of METLIFE and Borrower to be used to restore, repair, replace and
rebuild the Property as nearly as possible to its value, condition and character
immediately prior to such taking. All work to be performed in connection
therewith shall be pursuant to a written contract therefor, which contract shall
be subject to the prior approval of METLIFE, which approval shall not be
unreasonably withheld or delayed. To the extent that any funds remain after the
Property has been so restored and repaired, the same shall be applied against
the Indebtedness in such order as METLIFE may elect. To enforce its rights
hereunder, METLIFE shall be entitled to participate in and control any
condemnation proceedings and to be represented therein by counsel of its own
choice, and Borrower will deliver, or cause to be delivered to METLIFE such
instruments as may be requested by it from time to time to permit such
participation. In the event METLIFE, as a result of any such judgment decree or
award, believes that the payment or performance of any of the Indebtedness is
impaired, METLIFE may declare all of the Indebtedness immediately due and
payable.
12. BORROWER AND LIEN NOT RELEASED. From time to time, METLIFE may, at
option, without giving notice to or obtaining the consent of Borrower,
Borrower's successors or assigns or of any junior lienholder or guarantors,
without liability on METLIFE's part and notwithstanding Borrower's breach of,
any covenant or agreement of Borrower in this Instrument, extend the time for
payment of the Indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of the Indebtedness, accept an extension or
modification or renewal note or notes therefor, modify the terms and time of
payment of the Indebtedness, release from the lien of this Instrument any part
of the Property, take or release other or additional security, reconvey any part
of the Property, consent to any map or plan of the Property, consent to the
granting of any easement, join in any extension or subordination agreement and
agree in writing with Borrower to modify the rate of interest or period of
amortization of the Note or change the amount of the monthly installments
payable thereunder. Any actions taken by METLIFE pursuant to the terms of this
Section 12 shall not affect the obligation of Borrower or Borrower's successors
or assigns to pay the sums secured by this instrument and to observe the
covenants of Borrower contained herein, shall not affect the guaranty of any
person, corporation, partnership or other entity for payment of the
Indebtedness, and shall not affect the lien or priority of the lien hereof on
the Property. Borrower shall pay METLIFE a service charge, together with such
title insurance premiums and attorneys' fees as may be incurred at METLIFE's
option, for any such action if taken at Borrower's request.
13. FORBEARANCE BY METLIFE NOT A WAIVER. Any forbearance by METLIFE in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any other right or
remedy. The acceptance by METLIFE of payment of any sum secured by this
Instrument after the due date of such payment shall not be a waiver of METLIFE's
right to either require prompt payment when due of all other sums so secured or
to declare a default for failure to make prompt payment of such other sums.
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The procurement of insurance or the payment of taxes or other liens or charges
by METLIFE shall not be a waiver of METLIFE's right to accelerate the maturity
of the Indebtedness secured by this Instrument, nor shall METLIFE's receipt of
any awards, proceeds or damages under Sections 5 and 11 hereof operate to cure
or waive Borrower's default in payment of sums secured by this Instrument.
14. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is
intended to be a security agreement pursuant to the Uniform Commercial Code for
any of the items specified above as pan of the Property which, under applicable
law, may be subject to a security interest pursuant to the Uniform Commercial
Code, and Borrower hereby grants and conveys to METLIFE a first and prior
security interest in all of the Property that constitutes personalty, whether
now owned or hereafter acquired. In addition, Borrower agrees to execute and
deliver to METLIFE, upon METLIFE's request, any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as METLIFE may require to perfect a security interest
with respect to the foregoing items. Borrower shall pay all costs of filing such
financing statements and any extensions, renewals, amendments and releases
thereof, and shall pay all costs and expenses of any record searches for
financing statements METLIFE may require. Without the prior written consent of
METLIFE, Borrower shall not create or suffer to be created pursuant to the
Uniform Commercial Code any other security interest in said items, including
replacements and additions thereto. Upon Borrower's breach of any covenant or
agreement of Borrower contained in this Instrument, including the covenants to
pay when due all sums secured by this Instrument METLIFE shall have the remedies
of a secured party under the Uniform Commercial Code, and METLIFE may also
invoke the remedies provided in Section 26 of this Instrument as to such items.
In exercising any of said remedies METLIFE may proceed against the items of real
property and any items of personal property specified above separately or
together and in any order whatsoever, without in any way affecting the
availability of METLIFE's remedies under the Uniform Commercial Code or of the
remedies provided in Section 26 of this Instrument. Within ten (10) days
following any request therefor by METLIFE, Borrower shall prepare and deliver to
METLIFE a written inventory specifically listing all of the personal property
covered by the security interest herein granted, which inventory shall be
certified by Borrower as being true, correct, and complete.
15. LEASES OF THE PROPERTY. Borrower shall comply with and observe
Borrower's material obligations as landlord prior to the expiration of any
applicable period of grace contained therein under all Leases of the Property or
any part thereof. (As used in this Instrument an obligation is "material" if the
failure to perform it would give the tenant a right to withhold or abate rent or
to terminate its Lease.) All Leases now or hereafter entered into will be in
form and substance subject to the approval of METLIFE. All Leases of the
Property shall specifically provide that such Leases are subordinate to this
Instrument; that the tenant attorns to METLIFE, such attornment to be effective
upon METLIFE's acquisition of title to the Property; that the tenant agrees to
execute such further evidences of attornment as METLIFE may from time to time
request; that the attornment of the tenant shall not be terminated by
foreclosure. Borrower shall not, without METLIFE's written consent, request or
consent to the subordination of any Lease of all or any part of the Property to
any lien subordinate to this Instrument. If Borrower becomes aware that any
tenant proposes to do, or is doing, any act or thing which may give rise to any
right of set-off against rent Borrower shall (i) take such steps as shall be
reasonably calculated to prevent the accrual of any right to a set-off against
rent, (ii) immediately notify METLIFE thereof in writing and of the amount of
said set-off's, and (iii) within ten 10) days after such accrual, reimburse the
tenant who shall have acquired such right to set-off or take such other steps as
shall effectively discharge such setoff and as shall assure that rents
thereafter due shall continue to be payable without set-off or deduction,
subject to Borrower's right to contest any such deduction or set-off by
appropriate proceedings. Upon METLIFE's receipt of notice of the occurrence of
any default or violation by Borrower of any of its obligations under the Leases,
METLIFE shall have the immediate right, but not the duty or obligation, without
prior written notice to Borrower or to any third party, to enter upon the
Property and to take such actions as METLIFE may deem necessary to cure the
default or violation by Borrower under the Leases. The costs incurred by METLIFE
in taking any such actions pursuant to this paragraph shall become part of the
Indebtedness, shall bear interest at the rate provided in the Note, and shall be
payable by Borrower to METLIFE on demand. METLIFE shall have no liability to
Borrower or to any third party for any actions taken by METLIFE or not taken
pursuant to this paragraph.
16. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
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17. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN BORROWER;
ASSUMPTION. METLIFE may, at its option, declare all sums secured by this
Instrument to be immediately due and payable, and METLIFE may invoke any
remedies permitted by Section 26 of this Instrument, if title to the Property is
changed without the prior written consent of METLIFE, which consent shall be at
METLIFE's sole discretion. Any transfer of any interest in the Property or in
the income therefrom, by sale, lease (except for leases to tenants in the
ordinary course of managing income property which are approved by METLIFE
pursuant to Section 15 of this Instrument), contract, mortgage, deed of trust,
further encumbrance or otherwise (including any such transfers as security for
additional financing of the Property), except transfers and changes in ownership
by devise or descent, shall be considered a change of title. METLIFE shall have
the right to condition its consent to any proposed sale or transfer described in
this Section 17 upon, among other things, METLIFE's approval of the transferee's
creditworthiness and management ability and the transferee's execution, prior to
the sale or transfer, of a written assumption agreement containing such terms as
METLIFE may require, including, if required by METLIFE, the imposition of an
assumption fee of one percent (1%) of the then outstanding balance of the
Indebtedness. Consent by METLIFE to one transfer of the Property shall not
constitute consent to subsequent transfers or waiver of the provisions of this
Section 17. No transfer by Borrower shall relieve Borrower of liability for
payment of the Indebtedness. The foregoing notwithstanding, Borrower shall have
a one-time right, without further consent, to transfer the Property to an entity
in which Borrower owns a controlling interest. Borrower shall give METLIFE
thirty (30) days prior written notice of its intent to effect such a transfer.
In lieu of the aforementioned one percent (l%) fee, Borrower shall pay to
METLIFE a transfer fee of $5,000. In case of any transfer by Borrower, Borrower
shall reimburse METLIFE for its attorneys' fees, recording costs, title charges,
and other third-party costs.
18. NOTICE. Except for any notice required under applicable law to be
given in another manner, any and all notices, elections, demands, or requests
permitted or required to be made under this Instrument or under the Note shall
be in writing, signed by the party giving such notice, election, demand or
request, and shall be sent by registered, certified, or Express United States
mail, postage prepaid, or by Federal Express or similar service requiring a
receipt, to the other party at the address stated above, or to such other party
and at such other address within the United States of America as any party may
designate in writing as provided herein. The date of receipt of such notice,
election, demand or request shall be the earliest of (i) the date of actual
receipt, (ii) three (3) days after the date of mailing by registered or
certified mail, (iii) one (1) day after the date of mailing by Express Mail or
the delivery (for redelivery to Federal Express or another similar service
requiring a receipt, or (iv) the date of personal delivery (or refusal upon
presentation for delivery).
19. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS;
CAPTIONS. The covenants and agreements herein contained shall bind, and the
rights hereunder shall inure to, the respective heirs, successors and assigns of
METLIFE and Borrower, subject to the provisions of Section 17 hereof. If
Borrower is comprised of more than one person or entity, whether as individuals,
partners, partnerships or corporations, each such person or entity shall be
jointly and severally liable for Borrower's obligations hereunder. In exercising
any rights hereunder or taking any actions provided for herein, METLIFE may act
through its employees, agents or independent contractors as authorized by
METLIFE. The captions and headings of the sections of this Instrument are for
convenience only and are not to be used to interpret or define the provisions
hereof.
20. WAIVER OF STATUTE OF LIMITATIONS. [DELETED.]
21. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Property held by METLIFE or by any other party,
METLIFE shall have the right to determine the order in which any or all of the
Property shall be subjected to the remedies provided herein. METLIFE shall have
the right to determine the order in which any or all portions of the
Indebtedness secured hereby are satisfied from the proceeds realized upon the
exercise of the remedies provided herein. Borrower, any party who consents to
this Instrument and any party who now or hereafter acquires a security interest
in the Property and who has actual or constructive notice hereof hereby waives
any and all right to require the marshalling of assets in connection with the
exercise of any of the remedies permitted by applicable law or provided herein.
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22. HAZARDOUS WASTE.
(a) Borrower has furnished to METLIFE a Phase I Environmental Site
Assessment dated January 2, 1996, prepared by AquaTerra Environmental Sciences
Corp., supplemented by a letter dated March 13, 1996, and an Environmental
Questionnaire dated March 5, 1996 (collectively, the "Report"). Except as
disclosed to METLIFE in the Report, Borrower has received no notification of any
kind suggesting that the Property or any adjacent property is or may be
contaminated with any hazardous waste or materials or is or may be required to
be cleaned up in accordance with any applicable law or regulation; and Borrower
further represents and warrants that, except as previously disclosed to METLIFE
in writing, to the best of its knowledge as of the date hereof after due and
diligent inquiry, there are no hazardous waste or materials located in, on or
under the Property or any adjacent property, or incorporated in any
Improvements, nor has the Property or any adjacent property ever been used as a
landfill or a waste disposal site, or a manufacturing, handling, storage,
distribution or disposal facility for hazardous waste or materials. As used
herein, the term "hazardous waste or materials" includes any substance or
material defined in or designated as hazardous or toxic wastes, hazardous or
toxic material, a hazardous, toxic or radioactive substance, or other similar
term, by any federal, state or local statute, regulation or ordinance now or
hereafter in effect. Borrower shall promptly comply with all statutes,
regulations and ordinances, and with all orders, decrees or judgments of
governmental authorities or courts having jurisdiction, relating to the use,
collection, treatment, disposal, storage, control, removal or cleanup of
hazardous waste or materials in, on or under the Property or any adjacent
property, or incorporated in any Improvements, at Borrower's expense. In the
event that METLIFE at any time believes that the property is not free of all
hazardous waste or materials or that Borrower has violated any applicable
environmental law with respect to the Property, then immediately upon request by
METLIFE, Borrower shall obtain and furnish to METLIFE, at Borrower's sole cost
and expense, an environmental audit and inspection of the Property from an
expert satisfactory to METLIFE. In the event that Borrower fails to immediately
obtain such audit or inspection, METLIFE or its agents may perform or obtain
such audit or inspection at Borrower's sole cost and expense. METLIFE may, but
is not obligated to, enter upon the Property and take such actions and incur
such costs and expenses to effect such compliance as it deems advisable to
protect its interest in the Property; and whether or not Borrower has actual
knowledge of the existence of hazardous waste or materials on the Property or
any adjacent property as of the date hereof. Borrower shall reimburse METLIFE as
provided in Section 23 below for the full amount of all costs and expenses
incurred by METLIFE prior to METLIFE acquiring title to the Property through
foreclosure or acceptance of a deed in lieu of foreclosure, in connection with
such compliance activities. Neither this provision nor any of the other Loan
Documents shall operate to put METLIFE in the position of an owner of the
Property prior to any acquisition of the Property by METLIFE. The rights granted
to METLIFE herein and in the other Loan Documents are granted solely for the
protection of METLIFE's lien and security interest covering the Property, and do
not grant to METLIFE the right to control Borrower's actions, decisions or
policies regarding hazardous waste or materials.
(b) The parties acknowledge that the Report revealed the presence on the
Property of certain friable asbestos, consisting of (i) 5 square feet and 5
linear feet of pipe insulation, (ii) 100 square feet of boiler insulation, (both
(i) and (ii) being at 36-20 Steinway Street in the south basement), and (iii)
ceiling tiles containing friable asbestos (at 38-15 Northern Boulevard). In
addition, certain other suspected non-friable asbestos vinyl floor tiles at
38-15 Northern Boulevard and 36-20 Steinway Street were identified. The friable
asbestos pipe insulation, boiler insulation, and ceiling tiles shall be removed
before October 1, 1996. The non-friable suspected asbestos-containing floor
tiles need not be removed at this time; however, an "operations and maintenance"
program as recommended in Appendix E of the report shall be established by
Borrower promptly and shall be followed.
23. ADVANCES, COSTS AND EXPENSES. Borrower shall pay within ten (10) days
after written demand from METLIFE all sums advanced by METLIFE and all costs and
expenses incurred by METLIFE in taking any actions pursuant to the Loan
Documents including attorneys' fees and disbursements, accountants' fees,
appraisal and inspection fees and the cost for title reports and guaranties,
together with interest thereon at the rate applicable under the Note after an
Event of Default from the date such costs were advanced or incurred. All such
costs and expenses incurred by METLIFE, and advances made, shall constitute
advances under this Instrument to protect the Property and shall be secured by
and have the same priority as the lien of this Instrument. If Borrower fails to
pay any such advances, costs and expenses and interest thereon, METLIFE may
apply any undisbursed loan proceeds to pay the same, and, without foreclosing
the lien of this Instrument, may at its option commence an independent action
against
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Borrower for the recovery of the costs, expenses and/or advances, with interest,
together with costs of suit, costs of title reports and guaranty of title,
disbursements of counsel and reasonable attorneys' fees incurred therein or in
any appeal therefrom.
24. ASSIGNMENT OF LEASES AND RENTS. Borrower, for good and valuable
consideration, the receipt of which is hereby acknowledged, to secure the
Indebtedness, does hereby absolutely and unconditionally grant, bargain, sell,
transfer, assign, convey, set over and deliver unto METLIFE all right, title and
interest of Borrower in, to and under the Leases of the Property, whether now in
existence or hereafter entered into, and all guaranties, amendments, extensions
and renewals of said Leases and any of them, and all rents, income and profits
which may now or hereafter be or become due or owing under the Leases, and any
of them, or on account of the use of the Property.
Borrower represents, warrants, covenants and agrees with METLIFE as
follows:
(a) The sole ownership of the entire lessor's interest in the Leases is
vested in Borrower, and Borrower has not, and shall not, perform any acts or
execute any other instruments which might prevent METLIFE from fully exercising
its rights with respect to the Leases under any of the terms, covenants and
conditions of this Instrument.
(b) The Leases are and shall be valid and enforceable in accordance with
their terms and have not been and shall not be altered, modified, amended,
terminated, canceled, renewed or surrendered except as approved in writing by
METLIFE. The terms and conditions of the Leases have not been and shall not be
waived in any manner whatsoever except as approved in writing by METLIFE.
(c) Borrower shall not materially alter the term or the amount of rent
payable under any Lease without prior written notice to METLIFE and METLIFE's
consent, which shall not be unreasonably withheld.
(d) To the best of Borrower's knowledge there are no defaults now existing
under any of the Leases and there exists no state of facts which, with the
giving of notice or lapse of time or both, would constitute a default under any
of the Leases.
(e) Borrower shall give prompt written notice to METLIFE of any notice
received by Borrower claiming that a default has occurred under any of the
Leases on the part of Borrower, together with a complete copy of any such
notice.
(f) Each of the Leases shall remain in full force and effect irrespective
of any merger of the interest of lessor and any lessee under any of the leases.
(g) Borrower will not permit any Lease to become subordinate to any lien
other than the lien of this Instrument.
This assignment is absolute, is effective immediately, and is irrevocable
by Borrower so long as the Indebtedness remains outstanding. Notwithstanding the
foregoing, until a Notice is sent to Borrower in writing that an Event of
Default has occurred (which notice is hereafter called a "Notice"). Borrower may
receive, collect and enjoy the rents, income and profits accruing from the
Property.
Upon the occurrence of an Event of Default hereunder METLIFE may, at its
option, after service of a Notice, receive and collect all such rents, income
and profits from the Property as they become due. METLIFE shall thereafter
continue to receive and collect all such rents, income and profits, until
METLIFE shall otherwise agree in writing.
Borrower hereby irrevocably appoints METLIFE its true and lawful attorney
with power of substitution and with full power for METLIFE in its own name and
capacity or in the name and capacity of Borrower, from and after service of a
Notice, to demand, collect receive and give complete acquittances for any and
all rents, income and profits accruing from the Property, either in its own name
or in the name of Borrower or otherwise, which METLIFE may deem
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necessary or desirable in order to collect and enforce the payment of the rents,
income and profits of and from the Property, and to demand, collect, receive,
endorse, and deposit all checks, drafts, money orders, or notes given in payment
of such rents. METLIFE shall not be liable to or prejudiced by any loss of any
note, checks drafts, etc., unless such loss is due to the gross negligence or
willful misconduct of METLIFE. METLIFE shall apply the rents received from
Borrower's lessees, to accrued interest and principal due under the Note. If not
Event of Default remains uncured, amounts received in excess of the aggregate
monthly payment due under the Note shall be remitted to Borrower in a timely
manner. Nothing contained herein shall be construed to constitute METLIFE as a
mortgage-in-possession in the absence of its physically taking possession of the
Premises. Lessees of the Property are hereby expressly authorized and directed,
following receipt of a Notice from METLIFE, to pay any and all amounts due
Borrower pursuant to the Leases to METLIFE or such nominee as METLIFE may
designate in a writing delivered to and received by such lessees, and the
lessees of the Property are expressly relieved of any and all duty, liability or
obligation to Borrower in respect of all payments so made.
Upon the occurrence of any Event of Default, from and after service of a
Notice, METLIFE is hereby vested with full power to use all measures, legal and
equitable, deemed by it to be necessary or proper to enforce this Section 24 and
to collect the rents, income and profits assigned hereunder, including the right
of METLIFE or its designee, to enter upon the Property, or any part thereof, and
take possession of all or any part of the Property together with all personal
property, fixtures, documents, books, records, papers and accounts of Borrower
relating thereto, and METLIFE may exclude Borrower, its agents and servants,
wholly therefrom. Borrower hereby grants full power and authority to METLIFE to
exercise all rights, privileges and powers herein granted at any and all times
after service of a Notice, with full power to use and apply all of the rents and
other income herein assigned to the payment of the costs of managing and
operating the Property and of any indebtedness or liability of Borrower to
METLIFE, including but not limited to the payment of taxes, special assessments,
insurance premiums, damage claims, the costs of maintaining, repairing,
rebuilding and restoring the improvements on the Property or of making the same
rentable, reasonable attorneys' fees incurred in connection with the enforcement
of this Instrument, and of principal and interest payments due from Borrower to
METLIFE on the Note and this Instrument, all in such order as METLIFE may
determine. METLIFE shall be under no obligation to exercise or prosecute any of
the rights or claims assigned to it hereunder or to perform or carry out any of
the obligations of the lessor under any of the Leases and does not assume any of
the liabilities in connection with or arising or growing out of the covenants
and agreements of Borrower in the Leases. It is further understood that the
assignment set forth in this Section 24 shall not operate to place
responsibility for the control, care, management or repair of the Property, or
parts thereof, upon METLIFE, nor shall it operate to make METLIFE liable for the
performance of any of the terms and conditions of any of the Leases, or for any
waste of the Property by any lessee under any of the Leases, or any other
person, or for any dangerous or defective condition of the Property or for any
negligence in the management upkeep, repair or control of the Property resulting
in loss or injury or death to any lessee, licensee, employee or stranger.
25. DEFAULT. The following shall each constitute an event of default
("Event of Default"):
(a) Failure of or refusal by Borrower to pay any portion of the sums
secured by this Instrument when due, and such failure or refusal shall continue
for a period often (10) days after written notice is given to Borrower by
METLIFE specifying such failure; or
(b) Failure of Borrower within the time required by this Instrument to
make any payment for taxes, insurance or for reserves for such payments, or any
other payment necessary to prevent filing of or discharge of any lien, and such
failure shall continue for a period of ten (10) days after written notice is
given to Borrower by METLIFE specifying such failure; or
(c) Failure by Borrower to observe or perform any obligations of Borrower
to METLIFE on or with respect to any transactions, debts, undertakings or
agreements other than the transaction evidenced by the Note, following the
giving of any notice required thereunder and/or the expiration of any applicable
period of grace provided therein; or
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(d) Failure of Borrower to make any payment or perform any obligation
under any superior liens or encumbrances on the Property, within the time
required thereunder, or commencement of any suit or other action to foreclose
any superior liens or encumbrances; or
(e)Failure by Borrower to observe or perform any of its material
obligations under any of the Leases, which failure is not cured within
applicable period of grace provided therein; or
(f) The Property is transferred or any agreement to transfer any part or
interest in the Property in any manner whatsoever is made or entered into
without the prior written consent of METLIFE, except as specifically allowed
under this Instrument, including without limitation creating or allowing any
liens on the Property or leasing any portion of the Property; or
(g) Filing by Borrower of a voluntary petition in bankruptcy or filing by
Borrower of any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, or similar relief for
itself under any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
the seeking, consenting to, or acquiescing by Borrower in the appointment of any
trustee, receiver, custodian, conservator or liquidator for Borrower, any part
of the Property, or any of the income or rents of the Property, or the making by
Borrower of any general assignment for the benefit of creditors, or the
inability of or failure by Borrower to pay its debts generally as they become
due, or the insolvency on a balance sheet basis or business failure of Borrower,
or the making or suffering of a preference within the meaning of federal
bankruptcy law or the making of a fraudulent transfer under applicable federal
or state law, or concealment by Borrower of any of its property in fraud of
creditors, or the imposition of a lien upon any of the property of Borrower
which is not discharged in the manner permitted by Section 4 of this Instrument,
or the giving of notice by Borrower to any governmental body of insolvency or
suspension of operations; or
(h) Filing of a petition against Borrower seeking any reorganization,
arrangement, composition, readjustment, liquidation, or similar relief under any
present or future federal, state or other law or regulation relating to
bankruptcy, insolvency or other relief for debts, or the appointment of any
trustee, receiver, custodian, conservator or liquidator of Borrower, of any part
of the Property or of any of the income or rents of the Property; unless such
petition shall be dismissed within ninety (90) days after such filing, but in
any event prior to the entry of an order, judgment or decree approving such
petition; or
(i) The institution of any proceeding for the dissolution or termination
of Borrower voluntarily, involuntarily, or by operation of law (provided,
however, that as to an involuntary proceeding, Borrower shall have ninety (90)
days to secure dismissal thereof); or
(j) A material adverse change occurs in the assets, liabilities or net
worth of Borrower or any of the guarantors of the indebtedness evidenced by the
Note from the assets, liabilities or net worth of Borrower or any of the
guarantors of the indebtedness evidenced by the Note previously disclosed to
METLIFE; or
(k) Any warranty, representation or statement finished to METLIFE by or on
behalf of Borrower under the Note, this Instrument, any of the other Loan
Documents or the Certificate and Indemnity Agreement Regarding Hazardous
Substances, shall prove to have been false or misleading in any material respect
or
(l) Failure of Borrower to observe or perform any other covenant or
condition contained herein and such default shall continue for thirty (30) days
after notice is given to Borrower specifying the nature of the failure (or, if
the default cannot be cured within such period, within such cure period Borrower
fails within such time to commence and pursue curative action with reasonable
diligence or fails at any time after the expiration of such cure period to
continue with diligence all necessary curative actions); provided, however, that
no notice of default and no opportunity to cure shall be required with respect
to defaults under Section 17
14
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or Section 22 hereof or if during the prior twelve (12) months METLIFE has
already sent two (2) notices to Borrower concerning default in performance of
the same obligation; or
(m) Failure of Borrower to observe or perform any other obligation under
any other Loan Document or the Certificate and Indemnity Regarding Hazardous
Substances when such observance or performance is due, and such failure shall
continue beyond the applicable cure period set forth in such Loan Document (or
thirty (30) days, if no cure period is specified), or if the default cannot be
cured within such applicable cure period. Borrower fails within such time to
commence and pursue curative action with reasonable diligence or fails at any
time after expiration of such applicable cure period to continue with reasonable
diligence all necessary curative actions. No notice of default and no
opportunity to cure shall be required if during the prior twelve (12) months
METLIFE has already sent a notice to Borrower concerning default in performance
of the same obligation: or
(n) Borrower's abandonment of the Property; or
(o) Any of the foregoing events occur with respect to any tenant of the
Property (excluding North Star Auto Center or any successor lessee of the 38-15
Northern Boulevard portion of the Property), with respect to any guarantor of
any of Borrower's obligations in connection with the Indebtedness or with
respect to any guarantor of any tenant's obligations relating to the Property,
or such guarantor dies or becomes incompetent.
26. RIGHTS AND REMEDIES ON DEFAULT.
26.1 Remedies. Upon the occurrence of any Event of Default and at any time
thereafter, METLIFE may exercise any one or more of the following rights and
remedies:
(a) METLIFE may declare all sums secured by this Instrument immediately
due and payable, including any prepayment premium which Borrower would be
required to pay.
(b) METLIFE shall have the right to foreclose this Instrument in
accordance with applicable law by judicial proceedings, or to foreclose this
Instrument under the power of sale herein granted pursuant to sections 1401
through 1461 of the New York Real Property Law (Actions & Proceedings), after
publishing, posting, and serving notice as required by section 1402 of said law.
METLIFE may bid and purchase at such sale. If at the time of the sale METLIFE
shall deem it best for any reason to postpone or continue said sale for one or
more days it may do so, in which event notice of such postponement or
continuance shall be made in such manner as the METLIFE may deem sufficient
under section 1406 of the New York Real Property Law (Actions & Proceedings).
METLIFE's costs and expenses of sale shall be an additional indebtedness secured
hereby.
(c) In the event of any foreclosure, to the extent permitted by applicable
law, METLIFE will be entitled to a judgment which will provide that if the
foreclosure sale proceeds are insufficient to satisfy the judgment, execution
may issue for any amount by which the unpaid balance of the obligations secured
by this Instrument exceeds the net sale proceeds payable to METLIFE.
(d) With respect to all or any part of the Property that constitutes
personalty, METLIFE shall have all rights and remedies of secured party under
the Uniform Commercial Code.
(e) METLIFE shall have the right to have a receiver appointed to take
possession of any or all of the Property, with the power to protect and preserve
the Property, to operate the Property preceding foreclosure or sale, to collect
all the rents and revenues from the Property and apply the proceeds, over and
above cost of the receivership, against the sums due under this Instrument, and
to exercise all of the rights with respect to the Property described in Section
24 above. The receiver may serve without bond if permitted by law. METLIFE's
right to the appointment of a receiver shall exist whether or not apparent value
of the Property exceeds the sums due under this Instrument by a substantial
amount.
15
<PAGE>
(f) In the event Borrower remains in possession of the Property after the
Property is sold as provided above or METLIFE otherwise becomes entitled to
possession of the Property upon default of Borrower, Borrower shall become a
tenant at will of METLIFE or the purchaser of the Property and shall pay a
reasonable rental for use of the Property while in Borrower's possession.
(g) METLIFE shall have any other right or remedy provided in this
Instrument, the Note, or any other Loan Document or instrument delivered by
Borrower in connection therewith, or available at law, in equity or otherwise.
(h) METLIFE shall have all the rights and remedies set forth in Sections
23 and 24.
26.2 Sale of the Property. In exercising its rights and remedies, METLIFE
may, at METLIFE's sole discretion, cause all or any part of the Property to be
sold as a whole or in parcels, and certain portions of the Property may be sold
without selling other portions. METLIFE may bid at any public sale on all or any
portion of the Property.
26.3 Notice of Sale. METLIFE shall give Borrower reasonable notice of the
time and place of any public sale of any personal property or of the time after
which any private sale or other intended disposition of the personal property is
to be made. Reasonable notice shall mean notice given in accordance with
applicable law, including notices given in the manner and at the times required
for notices in a nonjudicial foreclosure.
26.4 Waiver; Election of Remedies. A waiver by either party of a breach of
a provision of this Instrument shall not constitute a waiver of or prejudice the
party's right otherwise to demand strict compliance with that provision or any
other provision. Election by METLIFE to pursue any remedy shall not exclude
pursuit of any other remedy, and all remedies of METLIFE under this Instrument
are cumulative and not exclusive. An election to make expenditures or take
action to perform an obligation of Borrower shall not affect METLIFE's right to
declare a default and exercise its remedies under this Instrument.
27. SATISFACTION OF MORTGAGE. Upon payment of all sums secured by this
Instrument, METLIFE shall execute a satisfaction (or, at the option of Borrower,
an assignment) of this Instrument and shall surrender this Instrument and all
notes evidencing Indebtedness secured by this Instrument to the person or
persons legally entitled thereto. Such person or persons shall pay METLIFE's
costs incurred in connection with satisfaction of this Instrument.
28. [INTENTIONALLY DELETED]
29. IMPOSITION OF TAX BY STATE.
29.1 State Taxes Covered. The following constitute state taxes to which
this Section applies:
(a) A specific tax upon mortgages or upon all or any part of the
indebtedness secured by a mortgage.
(b) A specific tax on a mortgagor which the taxpayer is authorized or
required to deduct from payments on the indebtedness secured by a mortgage. (c)
A tax on a mortgage chargeable against the mortgagee or the holder of the note
secured.
(d) A specific tax on all or any portion of the indebtedness or on
payments of principal and interest made by a Mortgagor.
16
<PAGE>
29.2 Remedies. If any state tax to which this Section applies is enacted
subsequent to the date of this Instrument, this shall have the same effect as an
Event of Default and METLIFE may exercise any or all of the remedies available
to it unless the following conditions are met:
(a) Borrower may lawfully pay the tax or charge imposed by state tax, and
(b) Borrower pays the tax or charge within thirty- (30) days after notice
from METLIFE that the tax law has been enacted.
30. ATTORNEYS' FEES. In the event suit or action is instituted to enforce
or interpret any of the terms of this Instrument (including without limitation
efforts to modify or vacate any automatic stay or injunction, the prevailing
party shall be entitled to recover all expenses reasonably incurred at, before
and after trial and on appeal whether or not taxable as costs, or in any
bankruptcy proceeding including, without limitation, attorneys' fees, witness
fees (expert and otherwise), deposition costs, copying charges and other
expenses. Whether or not any court action is involved, all reasonable expenses,
including but not limited to the costs of searching records, obtaining title
reports, surveyor reports, and title insurance, incurred by METLIFE that are
necessary at any time in METLIFE's opinion for the protection of its interest or
enforcement of its rights shall become a part of the Indebtedness payable on
demand and shall bear interest from the date of expenditure until repaid at the
interest rate as provided in the Note. The term "attorneys' fees" as used in the
Loan Documents shall be deemed to mean such fees as are reasonable and are
actually incurred.
31. GOVERNING LAW; SEVERABILITY. This Instrument shall be governed by the
law of the State of New York applicable to contracts made and to be performed
therein (excluding choice-of-law principles). In the event that any provision or
clause of this Instrument or the Note conflicts with applicable law, such
conflict shall not affect other provisions of this Instrument or the Note which
can be given effect without the conflicting provision, and to this end the
provisions of this Instrument and the Note are declared to be severable.
32. TIME OF ESSENCE. Time is of the essence of this Instrument.
33. CHANGES IN WRITING. This Instrument and any of its terms may only be
changed, waived, discharged or terminated by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. Any agreement subsequently made by Borrower or METLIFE
relating to this Instrument shall be superior to the rights of the holder of any
intervening lien or encumbrance.
34. NO OFFSET. Borrower's obligation to make payments and perform all
obligations, covenants and warranties under this Instrument and under the Note
shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation any setoff, counterclaim, abatement,
suspension, recoupment, deduction, defense or other right that Borrower or any
guarantor may have or claim against METLIFE or any entity participating in
making the loan secured hereby. The foregoing provisions of this section,
however, do not constitute a waiver of any claim or demand which Borrower or any
guarantor may have in damages or otherwise against METLIFE or any other person,
or preclude Borrower from maintaining a separate action thereon or from
maintaining or bringing a mandatory counterclaim; provided, however, that
Borrower waives any right it may have at law or in equity to consolidate such
separate action with any action or proceeding brought by METLIFE.
35. AUTHORIZATION TO INSERT. [DELETED.]
36. MAXIMUM INTEREST CHARGES. Notwithstanding anything contained herein or
in any of the Loan Documents to the contrary, in no event shall METLIFE be
entitled to receive interest on the loan secured by this Instrument (the "Loan")
in amounts which, when added to all of the other interest charged, paid to or
received by METLIFE on the Loan, causes the rate of interest on the Loan to
exceed the highest lawful rate. Borrower and METLIFE intend to comply with the
applicable law governing the highest lawful rate and the maximum amount of
interest payable on or in connection with the Loan. If the applicable law is
ever judicially interpreted so as to render usurious any amount called for under
the Loan Documents, or contracted for, charged, taken, reserved or received with
17
<PAGE>
respect to the Loan, or if acceleration of the final maturity date of the Loan
or if any prepayment by Borrower results in Borrower having paid or demand
having been made on Borrower to pay, any interest in excess of the amount
permitted by applicable law, then all excess amounts theretofore collected by
METLIFE shall be credited on the principal balance of the Note (or, if the Note
has been or would thereby be paid in full, such excess amounts shall be refunded
to Borrower), and the provisions of the Note, this Instrument and any demand on
Borrower shall immediately be deemed reformed and the amounts thereafter
collectible thereunder and hereunder shall be reduced, without the necessity of
the execution of any new document, so as to comply with the applicable law, but
so as to permit the recovery of the fullest amount otherwise called for
thereunder and hereunder. The right to accelerate the final maturity date of the
Loan does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and METLIFE does not intend
to collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to METLIFE for the use, forbearance or detention of the Loan
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread through the full term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed the
applicable usury ceiling. By execution of this Instrument, Borrower acknowledges
that it believes the Loan to be nonusurious and agrees that if, at any time,
Borrower should have reason to believe that the Loan is in fact usurious, it
will give METLIFE written notice of its belief and the reasons why Borrower
believes the Loan to be usurious, and Borrower agrees that METLIFE shall have
ninety (90) days following its receipt of such written notice in which to make
appropriate refund or other adjustment in order to correct such condition if it
in fact exists.
37. NEW YORK REAL PROPERTY LAW 254. The clauses and covenants contained
herein which are construed by section 254 of the New York Real Property Law
shall be construed as provided in that section, except as otherwise provided in
this Instrument. The additional clauses and covenants contained herein shall
afford rights supplemental to and not exclusive of the rights conferred by the
clauses and covenants construed by such section 254 and shall not impair,
modify, alter or defeat such rights notwithstanding that such additional clauses
and covenants may relate to the same subject matter or provide for different or
additional rights in the same or similar contingencies as the clauses and
covenants construed by section 254. The rights of METLIFE arising under the
clauses and covenants contained in this Instrument shall be separate, distinct
and cumulative, and none of them shall be in exclusion of any other provision,
anything herein or otherwise to the contrary notwithstanding.
38. LIEN LAW COVENANT. Pursuant to section 13 of the Lien Law of New York,
Borrower shall receive the advances secured hereby and shall hold the right to
receive such advances as a trust fund to be applied first for the purpose of
paying the cost of any improvement and shall apply such advances first to the
payment of the cost of any such improvement on the Property before using any
part of the same for any other purpose.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
18
<PAGE>
IN WITNESS WHEREOF, Borrower and METLIFE have executed this Instrument or
have caused the same to be executed by their representatives thereunto duly
authorized.
BORROWER
WESTERN BEEF-STEINWAY STREET, INC.,
A New York corporation
By: /s/ [SIGNATURE]
Title: /s/ [SIGNATURE]
Attest: /s/ [SIGNATURE]
Title: /s/ [SIGNATURE]
[SEAL]
LENDER:
METLIFE CAPITAL FINANCIAL CORPORATION,
A Delaware corporation
By: /s/ [SIGNATURE]
Title: /s/ [SIGNATURE]
Exhibits:
Exhibit A - Description of Property
Schedule 1 - Permitted Exceptions
19
<PAGE>
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
ACKNOWLEDGEMENT
ON THE 19th day of March, 1996, before me personally came Peter Castellana
to me known, who being by me duly sworn did say that he resides at 9 Colonial
Drive, Upper Bronxville; that he is the President of Western Beef-Steinway
Street. Inc., a New York corporation, the corporation described in and which
executed the above instrument; that he knows the seal of said corporation, that
the seal affixed to said instrument is said 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, as the free act and deed of such
corporation for the uses and purposes set forth therein.
/s/ SIGNATURE
Notary Public
My commission expires:
[SEAL]
Gary Pollard
NOTARY PUBLIC, STATE OF NEW YORK
No. 31-4827331
Qualified in New York County
Commission Expires April 30, 1996
<PAGE>
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
ACKNOWLEDGEMENT
On this 13th day of March 1996, before me, a Notary Public in and for the
State of Washington, personally appeared Peter ???????? who resides at ???????,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed this instrument, on oath stated that she was
authorized to execute this instrument, and acknowledged it as the ?????? of
METLIFE CAPITAL FINANCIAL CORPORATION to be the free and voluntary act and deed
of said corporation for the uses and purposes mentioned in this instrument.
IN WITNESS WHREOF, I have hereunto set my hand and official seal the day
and year first above written.
/S/ [SIGNATURE]
/s/ [SIGNATURE]
(Print Name)
NOTARY PUBLIC in and for the
State of Washington, residing at
{ILLEGIBLE]
My appointment expires 10/20/99
[SEAL]
BEVERLY G. EWING
STATE OF WASHINGTON
NOTARY PUBLIC
COMMISSION EXPIRES 10-23-99
21
<PAGE>
EXHIBIT A
PARCEL A (LOT 5 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the southeasterly side of 38th Street, (60 feet wide)
distant 162.80 feet northeasterly from the corner formed by the intersection of
the southeasterly side of 38th Street with the northwesterly side of Northern
Blvd., 100 feet wide;
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 75.02
feet;
THENCE southeasterly at right angles to the southeasterly Side of 38th Street,
54.35 feet;
THENCE still southeasterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course 118.56 feet to the northwesterly
side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 75.37 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 90.22 feet;
THENCE still northwesterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course, 25.03 feet to the southeasterly
side of 38th Street at the point or place of BEGINNING.
PARCEL B (LOT 7 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the southeasterly side of 38th Street (60 feet wide)
distant 237.82 feet (Actual) (237.80 feet Deed) northeasterly from the corner
formed by the intersection of the southeasterly side of 38th Street with the
northwesterly side of Northern Blvd., 100 feet wide;
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 39.73
feet;
THENCE southeasterly on a line forming an exterior angle of 89 degrees 44
minutes 02 seconds with the southeasterly side of 38th Street, 94.78 feet;
THENCE southwesterly and parallel with Steinway Street, 15.07 feet;
THENCE southeasterly at right angles to Steinway Street, 90 feet to the
northwesterly side of Steinway Street;
THENCE southwesterly along the northwesterly side of Steinway Street, 57.33 feet
to the corner formed by the intersection of the northwesterly side of Steinway
Street with the northwesterly side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 63.08 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 118,56 feet;
THENCE still northwesterly at right angles to the southeasterly side of 38th
Street and on a line forming in angle of 221 degrees 57 minutes 30 seconds with
the preceding curse, 54.35 feet to the southeasterly side of 38th Street at the
point or place of BEGINNING.
<PAGE>
PARCEL C (LOT 31 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the westerly side of Steinway Street, formerly known as
Steinway Avenue and also formerly known as 10th Avenue, distant 100 feet
southerly from the corner formed by the intersection of the southerly side of
Thirty-sixth Avenue, formerly known as Washington Avenue with the westerly side
of Steinway Street;
RUNNING THENCE westerly parallel with Thirty-sixth Avenue and part of the
distance through a party wall; 100 feet;
THENCE southerly parallel with Steinway Street, 75 feet;
THENCE easterly parallel with Thirty-sixth Avenue, 100 feet to the westerly side
of Steinway Street;
THENCE northerly along the westerly side of Steinway Street, 75 feet to the
point or place of BEGINNING.
PARCEL D (LOT 34 IN BLOCK 665):
ALL that certain piece or parcel of land, situate, lying and being in the First
Ward of the Borough of Queens, (formerly Long Island City) County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at a point on the northwesterly side of Steinway Street, distant 175
feet southwesterly from the corner formed by the intersection of the
northwesterly side of Steinway Street with the southwesterly side of 36th
Avenue, 75 feet wide;
RUNNING THENCE southwesterly along the northwesterly side Steinway Street, 50
feet;
THENCE northwesterly at right angles to Steinway Street, 106.48 feet;
THENCE northeasterly and parallel with the northwesterly side of Steinway
Street, 50 feet;
THENCE southeasterly and at right angles to the Steinway Sweet, 106.48 feet to
the northwesterly side of Steinway Street, at the point or place of BEGINNING.
<PAGE>
PARCEL E (LOT 38 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of Tenth Avenue, formerly
Steinway Avenue, distant 57.33 feet northeasterly from the corner formed by the
intersection of the northwesterly side of Tenth Avenue with the northerly side
of Jackson Avenue;
RUNNING THENCE northeasterly along said side of Tenth Avenue, 150 feet;
THENCE northwesterly and at right angles to Tenth Avenue, 106.48 feet to the
center line of Harold Avenue, which is now closed;
THENCE southerly along said center line of Harold Avenue, 42.11 feet;
THENCE southwesterly parallel with Tenth Avenue, 111.26 feet;
THENCE southeasterly and at right angles to Tenth Avenue, 90 feet to the point
or place of BEGINNING.
For conveyancing only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof.
<PAGE>
Title No. NY951153
SCHEDULE A (CONT)
SAID PARCELS A, B, C, D AND E ALSO BEING BOUNDED AND DESCRIBED AS FOLLOWS:
OVERALL DESCRIPTION
All chat certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough and County
of Queens, City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the westerly side of
Steinway Street with the northwesterly side of Northern Boulevard (100 feet
wide);
RUNNING THENCE northerly along the westerly side of Steinway Street, 332.37
feet, to a point;
THENCE westerly parallel with the southerly side of 36th Avenue (75 feet wide)
through a party wall, 100 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 74.88 feet
to a point;
THENCE westerly along a line drawn at right angles to last mentioned course 6.48
feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 50 feet to a
point;
THENCE southeasterly along the center line of former Harold Avenue, and along a
line forming an angle on the northeast of 156 degrees 57 minutes 18 seconds
42.11 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 96.19 feet
to a point;
THENCE westerly along a line forming an angle on the northeast of 89 degrees 44
minutes 02 seconds with the easterly side of 38th Street (60 feet wide), 94.78
feet to the easterly side of 38th Street;
THENCE southerly along the easterly side of 38th Street 114.75 feet to a point;
THENCE easterly as right angles to the easterly side of 38th Street 25.03 feet
to a point;
THENCE southeasterly along a line drawn at right angles to the northwesterly
side of Northern Boulevard, 90.22 feet to the northwesterly side of Northern
Boulevard;
THENCE northeasterly along the northwesterly side of Northern Boulevard 138.45
feet to the corner formed by the intersection of the westerly side of Steinway
Street with the northwesterly side of Northern Boulevard, at the point or place
of BEGINNING.
<PAGE>
Loan No: 5901796-001
SCHEDULE I
(36 - 12/32 Steinway Sweet and 38 - 15/23 Northern Boulevard, Queens, New York)
Permitted Exceptions:
[NOT APPLICABLE]
Loan No. 5901796-001
AMENDED AND RESTATED PROMISSORY NOTE
(36-12/32 Steinway Street and 38-15/23 Northern Boulevard, Queens, New York)
THIS AMENDED AND RESTATED PROMISSORY NOTE is made and given as of March
19, 1996, by WESTERN BEEF-STEINWAY STREET, INC., a New York corporation
("Borrower") to METLIFE CAPITAL FINANCIAL CORPORATION, a Delaware corporation
("Lender") with reference to the recitals hereinafter set forth.
RECITALS:
A. Borrower has this date acquired or simultaneously with the execution
hereof is acquiring certain real property in Queens, New York, more particularly
described in Exhibit A (the "Property").
B. The Property is encumbered by a certain Amended and Restated Mortgage
(the "Existing Mortgage") dated November 24, 1993, from Lacher/Koeppel Realty
Corp., a New York corporation ("Lacher"), to Chrysler Credit Corporation, a
Delaware corporation ("Chrysler"), securing a loan from Chrysler to Lacher in
the principal amount of $3,500,000, as evidenced by a certain Amended and
Restated Promissory Note (the "Note") dated November 24, 1993, from Lacher to
Chrysler.
C. Chrysler has assigned the Note and the Existing Mortgage to Lender.
Prior to such assignment, the principal indebtedness evidenced and secured by
the Note and the Existing Mortgage was reduced to THREE MILLION DOLLARS
($3,000,000). Borrower has accepted and assumed all obligations of Lacher under
the Note and the Existing Mortgage.
D. Pursuant to an agreement of even date herewith between Borrower and
Lender, the Existing Mortgage has been amended and restated.
E. Borrower and Lender desire that the Note should be amended and restated
to reduce the interest rate, to change the maturity date, and in certain other
respects.
NOW, THEREFORE, in consideration of the above premises and of other good
and valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, Borrower and Lender covenant and agree as follows:
I. Note in Full Force. The Note shall remain in full force and effect as
restated herein. The Note as amended and restated herein (the "Amended Note"),
supersedes and replaces the Note as it existed previously.
II. Ratification. The Note, as amended and restated below, is hereby
ratified and confirmed in all respects by Borrower.
III. Successors and Assigns. This Agreement shall be binding upon and
shall insure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns hereunder.
IV. Applicable Law. This Agreement shall be given effect and construed by
application of the Law of the State of New York applicable to contracts made and
to be performed therein (excluding its choice-of-law rules).
V. Effectiveness. Upon effectiveness, the Note shall cease to have a
separate existence and shall be evidenced only by this instrument. This
Agreement shall become effective upon and only upon its execution and delivery
by each party hereto.
<PAGE>
VI. Waiver. Lender shall not be deemed to have waived the exercise of any
right which it holds hereunder or under the Note unless such waiver is made
expressly and in writing (and no delay or omission by Lender in exercising any
such right shall be deemed to be a waiver of its future exercise). No such
waiver made as to any instance involving the exercise of any such right shall be
deemed a waiver as to any other such instance, or any other such right.
VII. Time of Essence. Time shall be of the essence of this Agreement.
VIII. Headings. The headings of the Sections, subsections, Paragraphs and
subparagraphs hereof are provided herein for and only for convenience of
reference and shall not be considered in construing their contents.
IX. Amendment and Restatement. All of the terms and provisions of the Note
are hereby modified, amended, and restated to read as follows:
AMENDED AND RESTATED TEXT
PROMISSORY NOTE
$3,000,000.00 March 19, 1996
FOR VALUE RECEIVED, Western Beef-Steinway Street, Inc., a Delaware
corporation ("BORROWER"), promises to pay to the order of MetLife Capital
Financial Corporation ("METLIFE") at METLIFE's office at 10900 Northeast Fourth
Street, Suite 500, Bellevue, Washington 98004, attention: Real Estate
Department, or at such other address as the holder hereof may from time to time
designate in writing, the principal sum of Three Million and no hundredths
Dollars ($3,000,000.00) together with interest from the date the proceeds of the
loan (the "Loan") evidenced by this Promissory Note (this "Note") are initially
disbursed until maturity on the principal balance from time to time remaining
unpaid hereon at the rate of eight and twenty-five hundredths percent (8.25%)
per annum (computed on the basis of a 360-day year of twelve (12) consecutive
thirty (30)-day months) in installments as follows: (i) interest only in advance
at the rate of $687.50 per day shall be due and payable on the date the proceeds
of the Loan are initially disbursed to or for the benefit of BORROWER
(including, without limitation, disbursement into an escrow for the benefit of
BORROWER) for the period beginning on the date of such disbursement and ending
on the last day of the month during which such disbursement occurs: and (ii) one
hundred nineteen (119) installments of principal and interest in the amount of
$25,561.97 each shall be payable commencing on the first day of the second month
following the month in which the proceeds of the loan evidenced by this Note are
initially disbursed and continuing on the first day of each and every succeeding
month until the first day of the one hundred twentieth (120th) month thereafter
at which time all then unpaid principal and interest hereon shall be due and
payable.
If any payment shall not be paid when due and shall remain unpaid for ten
(10) days, BORROWER shall pay an additional charge equal to five percent (5.00%)
of the delinquent payment or the highest additional charge permitted by law,
whichever is less.
Upon not less than thirty (30) days' advance written notice to METLIFE at
any time after the fourth (4th) anniversary of the due date of the first monthly
principal and interest payment due under this Note, and upon payment of a
prepayment premium as set forth below (the "Prepayment Premium"), BORROWER shall
have the right to prepay all, but not less than all, of the outstanding balance
of this Note on any regularly scheduled principal and interest payment date. The
Prepayment Premium shall be determined by (i) calculating the decrease
(expressed in basis points) in the current weekly average yield of ten (10)-year
U.S. Treasury Notes (as published in Federal Reserve Statistical Release
H.15[519]) (the "Index") from Friday December 8, 1995, to the Friday immediately
preceding the week in which the prepayment is made, (ii) dividing the decrease
by 100, (iii) multiplying the result by the following described applicable
premium factor (the "Premium Factor"), and (iv) multiplying the product by the
principal balance to be prepaid. If the Index is unchanged or has increased from
Friday, December 8, 1995, to the immediately preceding
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the prepayment date, no Prepayment Premium shall be due. The Premium Factor
shall be the amount shown on the following chart for the month in which
prepayment occurs:
No. Mos. Premium
Remaining (Years) Factor
120-109 (10) .070
108-97 (9) .065
96-85 (8) .060
84-73 (7) .054
72-61 (6) .048
60-49 (5) .042
48-37 (4) .036
36-25 (3) .029
24-13 (2) .022
12-1 (1) .013
If the Federal Reserve Board ceases to publish Statistical Release H.15 [519],
then the decrease in the weekly average yield of ten (10)-year U.S. Treasury
Notes will be determined from another source designated by METLIFE. Except as
set forth in the following paragraph, prepayment prior to the fourth (4th)
anniversary of the due date of the first monthly principal and interest payment
due under this Note will not be permitted.
In addition, but only in the event of either the sale or merger of
BORROWER or the sale of the Property (as hereinafter defined), upon not less
than thirty (30) days advance written notice to METLIFE and upon payment of the
Prepayment Premium and an early prepayment fee ("Early Prepayment Fee")
described below. BORROWER shall have the right to prepay all, but not less than
all, of the outstanding balance under this Note on any regularly scheduled
principal and interest payment date prior to the fourth (4th) anniversary of the
due date of the first monthly principal and interest payment due hereunder. The
Early Prepayment Fee shall be determined by multiplying the principal face
amount of this Note by the following described applicable "Fee Factor". The Fee
Factor shall be the amount shown on the following chart for the month in which
the early prepayment occurs:
No. Mos.
Remaining (Years) Fee Factor
120-109 (10) .040
108-97 (9) .030
96-85 (8) .020
84-73 (7) .020
The Early Prepayment Fee will not apply after April 30, 2000.
If METLIFE at any time accelerates this Note after an Event of Default
(defined below), then BORROWER shall be obligated to pay the Prepayment Premium
in accordance with the foregoing schedule. The Prepayment Premium shall not be
payable with respect to condemnation awards or insurance proceeds from fire or
other casualty which METLIFE applies to prepayment nor with respect to
BORROWER's prepayment of the Note in full during the last six (6) months of the
term of this Note unless an Event of Default has occurred. BORROWER expressly
acknowledges that the Prepayment Premium and the Early Prepayment Fee are not
penalties but are intended solely to compensate METLIFE for the loss of its
bargain and the reimbursement of internal expenses and administrative fees and
expenses incurred by METLIFE.
BORROWER shall be liable on this Note and on all the representations,
warranties, indemnities and covenants in the Amended and Restated Mortgage
("Mortgage") of even date herewith covering the property (the
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"Property") securing this Note and all other documents executed or delivered in
connection herewith (the "Loan Documents").
Each of the following shall constitute an Event of Default ("Event of
Default") hereunder and under the Mortgage:
(a) Failure of BORROWER to make any payment of principal, interest, or
Prepayment Premium upon this Note when due, and such failure or refusal shall
continue for a period of ten (10) days after written notice is given to BORROWER
by METLIFE specifying such failure, or
(b) Failure of BORROWER within the time required by the Mortgage to pay
any sum secured thereby other than the Note or to make any payment for taxes,
insurance or for reserves for such payments, or any other payment necessary to
prevent filing of or discharge of any lien, and such failure shall continue for
a period of ten (10) days after written notice is given to BORROWER by METLIFE
specifying such failure: or
(c) Failure by BORROWER to observe or perform any obligations of BORROWER
to METLIFE on or with respect to any transactions, debts, undertakings or
agreements other than the transaction evidenced by this Note following the
giving of any notice required thereby and/or the expiration of any period of
grace provided thereunder; or
(d) Failure of BORROWER to make any payment or perform any obligation
under any superior liens or encumbrances on the Property, within the time
required thereunder, or commencement of any suit or other action to foreclose
any superior liens or encumbrances; or
(e) Failure by BORROWER to observe or perform any of its material
obligations (as defined in the mortgage) under any of the lease agreements
covering the Property which is not cured within the applicable grace period set
forth in such leases; or
(f) The Property is transferred or any agreement to transfer any part or
interest in the Property in any manner whatsoever is made or entered into
without the prior written consent of METLIFE, except as specifically allowed
under the Mortgage, including without limitation creating or allowing any liens
on the Property or leasing any portion of the Property: or
(g) Filing by BORROWER of a voluntary petition in bankruptcy or filing by
BORROWER of any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, or similar relief for
itself under any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
the seeking, consenting to, or acquiescing by BORROWER in the appointment of any
trustee, receiver, custodian, conservator or liquidator for BORROWER, any part
of the Property, or any of the income or rents of the Property, or the making by
BORROWER of any general assignment for the benefit of creditors, or the
inability of or failure by BORROWER to pay its debts generally as they become
due, or the insolvency on a balance sheet basis or business failure of BORROWER,
or the making or suffering of a preference within the meaning of federal
bankruptcy law or the making of a fraudulent transfer under applicable federal
or state law, or concealment by BORROWER of any of its property in fraud of
creditors, or the imposition of a lien upon any of the property of BORROWER
which is not discharged in the manner permitted by the Mortgage. or the giving
of notice by BORROWER to any governmental body of insolvency or suspension of
operations: or
(h) Filing of a petition against BORROWER seeking any reorganization,
arrangement, composition, readjustment, liquidation, or similar relief under any
present or future federal, state or other law or regulation relating to
bankruptcy, insolvency or other relief for debts, or the appointment of any
trustee, receiver, custodian, conservator or liquidator of BORROWER, of any part
of the Property or of any of the income or rents of the Property, unless such
petition shall be dismissed within ninety (90) days after such filing, but in
any event prior to the entry of an order, judgment or decree approving such
petition; or
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(i) The institution of any proceeding for the dissolution or termination
of BORROWER voluntarily, involuntarily, or by operation of law (provided,
however, that as to an involuntary proceeding, BORROWER shall have ninety (90)
days to secure dismissal thereof); or
(j) A material adverse change occurs in the assets, liabilities or net
worth of BORROWER from the assets, liabilities or net worth of BORROWER or any
of the guarantors of the indebtedness evidenced by this Note previously
disclosed to METLIFE; or
(k) Any warranty, representation or statement furnished to METLIFE by or
on behalf of BORROWER under this Note, the Mortgage, or any of the Loan
Documents shall prove to have been false or misleading in any material respect;
or
(l) Failure of BORROWER to observe or perform any other covenant or
condition contained in the Mortgage and such default shall continue for thirty
(30) days after notice is given to BORROWER specifying the nature of the
failure, or if the default cannot be cured within such cure period. BORROWER
fails within such time to commence and pursue curative action with reasonable
diligence or fails at any time after expiration of such cure period to continue
with reasonable diligence all necessary curative actions. No notice of default
and no opportunity to cure shall be required with respect to defaults under
Section 17 or Section 22 of the Mortgage or if during the prior twelve (12)
months METLIFE has already sent two (2) notices to BORROWER concerning default
in performance of the same obligation; or
(m) Failure of BORROWER to observe or perform any other obligation under
any other Loan Document when such observance or performance is due, and such
failure shall continue beyond the applicable cure period set forth in such Loan
Document (or thirty (30) days, if no cure period is specified), or if the
default cannot be cured within such applicable cure period. BORROWER fails
within such time to commence and pursue curative action with reasonable
diligence or fails at any time after expiration of such applicable cure period
to continue with reasonable diligence all necessary curative actions. No notice
of default and no opportunity to cure shall be required if during the prior
twelve (12) months METLIFE has already sent two (2) notices to BORROWER
concerning default in performance of the same obligation; or
(n) BORROWER's abandonment of the Property; or
(o) Any of the foregoing events occur with respect to any tenant of the
Property (excluding North Star Auto Center or any successor lessee of the 38-15
Northern Boulevard portion of the Property), with respect to any guarantor of
any of BORROWER's obligations in connection with the indebtedness evidenced by
this Note or with respect to any guarantor of any tenant's obligations relating
to the Property, or such guarantor dies or becomes incompetent.
Upon the occurrence of any of the foregoing events of default, METLIFE
shall have the option to declare the entire amount of principal and interest due
under this Note immediately due and payable without notice or demand, and
METLIFE may exercise any of its rights under this Note and any document executed
or delivered herewith. After acceleration or maturity, BORROWER shall pay
interest on the outstanding principal balance of this Note at the rate of five
percent (5.00%) per annum above Chase Manhattan Bank's prime interest rate in
effect from time to time, or fifteen percent (15.00%) per annum, whichever is
higher, provided that such interest rate shall not exceed the maximum interest
rate permitted by law.
All payments of the principal and interest on this Note shall be made in
coin or currency of the United States of America which at the time shall be the
legal tender for the payment of public and private debts.
If this Note is placed in the hands of an attorney for collection,
BORROWER agrees to pay reasonable attorneys' fees and costs incurred by METLIFE
in connection therewith, and in the event suit or action is instituted to
enforce or interpret this Note (including without limitation efforts to modify
or vacate any automatic stay or injunction), the prevailing party shall be
entitled to recover all expenses reasonably incurred at, before or after trial
and on appeal.
5
<PAGE>
whether or not taxable as costs, or in any bankruptcy proceeding, or in
connection with post-judgment collection efforts, including, without limitation,
attorneys' fees, witness fees (expert and otherwise), deposition costs, copying
charges and other expenses.
This Note shall be governed and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed therein
(excluding choice-of-law principles). BORROWER hereby irrevocably submits to the
jurisdiction of any state or federal court sitting in the City of New York or
the Eastern District of New York in any action or proceeding brought to enforce
or otherwise arising out of or relating to this Note, and hereby waives any
objection to venue in any such court and any claim that such forum is an
inconvenient forum.
This Note is given in a commercial transaction for business purposes.
This Note may be declared due prior to its expressed maturity date, all in
the events, on the terms, and in the manner provided for in the Mortgage.
BORROWER and all sureties, endorsers, guarantors and other parties now or
hereafter liable for the payment of this Note, in whole or in part, hereby
severally (i) waive demand, notice of demand, presentment for payment, notice of
nonpayment, notice of default, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices, and further waive
diligence in collecting this Note or in enforcing any of the security for this
Note; (ii) agree to any substitution, subordination, exchange or release of any
security for this Note or the release of any party primarily or secondarily
liable for the payment of this Note; (iii) agree that METLIFE shall not be
required to first institute suit or exhaust its remedies hereon against BORROWER
or others liable or to become liable for the payment of this Note or to enforce
its rights against any security for the payment of this Note; and (iv) consent
to any extension of time for the payment of this Note, or any installment
hereof, made by agreement by METLIFE with any person now or hereafter liable for
the payment of this Note, even if BORROWER is not a party to such agreement.
All agreements between BORROWER and METLIFE. whether now existing
or hereafter arising and whether written or oral, are hereby limited so that in
no contingency, whether by reason of demand or acceleration of the final
maturity of this Note or otherwise, shall the interest contracted for, charged,
received, paid or agreed to be paid to METLIFE exceed the maximum amount
permissible under the applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to METLIFE in excess of the maximum amount
permissible under applicable law, the interest payable to METLIFE shall be
reduced to the maximum amount permissible under applicable law; and if from any
circumstance METLIFE shall ever receive anything of value deemed interest by
applicable law in excess of the maximum amount permissible under applicable law,
an amount equal to the excessive interest shall be applied to the outstanding
principal balance hereof, or if such excessive amount of interest exceeds the
unpaid balance of principal hereof such excess shall be refunded to BORROWER.
All interest paid or agreed to be paid to METLIFE shall, to the extent permitted
by applicable law, be amortized, prorated, allocated, and spread throughout the
full period (including any renewal or extension) until payment in full of the
principal so that the interest hereon for such full period shall not exceed the
maximum amount permissible under applicable law. METLIFE expressly disavows any
intent to contract for, charge or receive interest in an amount which exceeds
the maximum amount permissible under applicable law. This paragraph shall
control all agreements between BORROWER and METLIFE.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER
TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
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IN WITNESS WHEREOF. BORROWER has executed or caused this Note to be
executed by its duly authorized officers under seal as of the year and day first
written above.
BORROWER:
WESTERN BEEF-STEINWAY STREET, INC.,
a New York corporation
By: /s/ Peter Castellana, Jr.
Title: President
Attest: /s/ Robert C. Ludlow
Title: Vice President
[SEAL]
ACCEPTED:
METLIFE CAPITAL FINANCIAL CORPORATION
By:___________________________________
Title: ________________________________
7
<PAGE>
EXHIBIT A
PARCEL A (LOT 5 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the southeasterly side of 38th Street, (60 feet wide)
distant 162.80 feet northeasterly from the corner formed by the intersection of
the southeasterly side of 38th Street with the northwesterly side of Northern
Blvd., 100 feet wide;
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 75.02
feet;
THENCE southeasterly at right angles to the southeasterly side of 38th Street,
54.35 feet;
THENCE still southeasterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course 118.56 feet to the northwesterly
side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 75.37 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 90.22 feet;
THENCE still northwesterly on a line forming an interior angle of 221 degrees 57
minutes 20 seconds with the preceding course, 25.03 feet to the southeasterly
side of 38th Street at the point or place of BEGINNING.
PARCEL B (LOT 7 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded awl described
as follows:
BEGINNING at a point on the southeasterly aide of 38th Street (60 feet wide)
distant 237.82 feet (Actual) (237.80 feet Deed) northeasterly from the corner
formed by the intersection of the southeasterly side of 38th Street with the
northwesterly side of Northern Blvd., 100 feet wide;
RUNNING THENCE northeasterly along the southeasterly side of 38th Street, 39.73
feet; THENCE southeasterly on a line forming an exterior angle of 89 degrees 44
minutes 02 seconds with the southeasterly side of 38th Street, 94.78 feet;
THENCE southwesterly and parallel with Steinway Street, 15.07 feet;
THENCE southeasterly at right angles to Steinway Street, 90 feet to the
northwesterly side of Steinway Street;
THENCE southwesterly along the northwesterly side of Steinway Street, 57.33 feet
to the corner formed by the intersection of the northwesterly aide of Steinway
Street with the northwesterly side of Northern Blvd.;
THENCE southwesterly along the northwesterly side of Northern Blvd., 63.08 feet;
THENCE northwesterly at right angles to the northwesterly side of Northern
Blvd., 118.56 feet;
THENCE still northwesterly at right angles to the southeasterly aide of 38th
Street and on a line forming an interior angle of 221 degrees 57 minutes 30
seconds with the preceding curse, 54.35 feet to the southeasterly side of 38th
Street at the point or place of BEGINNING.
<PAGE>
PARCEL C (LOT 31 IN BLOCK 2665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the westerly side of Steinway Street, formerly known as
Steinway Avenue and also formerly known as 10th Avenue, distant 100 feet
southerly from the corner formed by the intersection of the southerly side of
Thirty-sixth Avenue, formerly known as Washington Avenue with the westerly side
of Steinway Street;
RUNNING THENCE westerly parallel with Thirty-sixth Avenue and part of the
distance through a party wall, 100 feet;
THENCE southerly parallel with Steinway Street, 75 feet;
THENCE easterly parallel with Thirty-sixth Avenue, 100 feet to the westerly side
of Steinway Street;
THENCE northerly along the westerly side of Steinway Street, 75 feet to the
point or place of BEGINNING.
PARCEL D (LOT 34 IN BLOCK 665):
ALL that certain piece or parcel of land, situate, lying and being in the First
Ward of the Borough of Queens, (formerly Long Island City) County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at a point on the northwesterly side of Steinway Street, distant 175
feet southwesterly from the corner formed by the intersection of the
northwesterly side of Steinway Street with the southwesterly side of 36th
Avenue, 75 feet wide;
RUNNING THENCE southwesterly along the northwesterly side Steinway Street, 50
feet;
THENCE northwesterly at right angles to Steinway Street, 106.48 feet;
THENCE northeasterly and parallel with the northwesterly side of Steinway
Street, 50 feet;
THENCE southeasterly and at right angles to the Steinway Street, 106.48 feet to
the northwesterly side of Steinway Street, at the point or place of BEGINNING.
<PAGE>
PARCEL E (LOT 38 IN BLOCK 665):
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of Tenth Avenue, formerly
Steinway Avenue, distant 57.33 feet northeasterly from the corner formed by the
intersection of the northwesterly side of Tenth Avenue with the northerly side
of Jackson Avenue;
RUNNING THENCE northeasterly along said side of Tenth Avenue, 150 feet;
THENCE northwesterly and at right angles to Tenth Avenue, 106.48 feet to the
center line of Harold Avenue, which is now closed;
THENCE southerly along said center line of Harold Avenue, 42.11 feet;
THENCE southwesterly parallel with Tenth Avenue, 111.26 feet;
THENCE southeasterly and at right angles to Tenth Avenue, 90 feet to the point
or place of BEGINNING.
For conveyancing only, if intended to be conveyed.
Together with all right, title and interest of, in and to any streets and roads
abutting the above described premises, to the center line thereof.
<PAGE>
Title No. NY951153
SCHEDULE A (CONT)
SAID PARCELS A, B, C, D AND E ALSO BEING BOUNDED AND DESCRIBED AS
FOLLOWS:
OVERALL DESCRIPTION
All that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough and County
of Queens, City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the westerly side of
Steinway Street with the northwesterly side of Northern Boulevard (100 feet
wide);
RUNNING THENCE northerly along the westerly side of Steinway Street, 332.37
feet, to a point;
THENCE westerly parallel with the southerly side of 36th Avenue (75 feet wide)
through a party wall, 100 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 74.88 feet
to a point;
THENCE westerly along a line drawn at right angles to last mentioned course 6.48
feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 50 feet to a
point;
THENCE southeasterly along the center line of former Harold Avenue, and along a
line forming an angle on the northeast of 156 degrees 57 minutes 18 seconds
42.11 feet to a point;
THENCE southerly parallel with the westerly side of Steinway Street 96.19 feet
to a point;
THENCE westerly along a line forming an angle on the northeast of 89 degrees 44
minutes 02 seconds with the easterly side of 38th Street (60 feet wide), 94.78
feet to the easterly side of 38th Street;
THENCE southerly along the easterly side of 38th Street 114.75 feet to a point;
THENCE easterly at right angles to the easterly side of 38th Street 25.03 feet
to a point;
THENCE southeasterly along a line drawn at right angles to the northwesterly
side of Northern Boulevard, 90.22 feet to the northwesterly side of Northern
Boulevard;
THENCE northeasterly along the northwesterly side of Northern Boulevard 138.45
feet to the corner formed by the intersection of the westerly side of Steinway
Street with the northwesterly side of Northern Boulevard, at the point or place
of BEGINNING.
THIS INDENTURE, made the 17th day of September, nineteen hundred and
ninety-three
BETWEEN
ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
A savings and loan association organized and existing under the laws of the
United States of America, having an office and principal place of business at
One Astoria Federal Plaza, Lake Success, New York 11042
part of the first part, and
RUNBAR PACKING, INC.
A domestic corporation, having its office and principal place of business at
4-44 College Point Boulevard, Flushing, New York
party of the second part,
WITNESSETH, that the party of the first part, in consideration of ten dollars
and other valuable consideration paid by the party of the second part, does
hereby grant and release unto the party of the second part, the heirs or
successors and assigns of the party of the second part forever,
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough and County
of Queens, City and State of New York, bounded and described as follows:
BEGINNING at a point on the Westerly side of College Point Boulevard
(Lawrence Street) distant 100.00.feet Southerly from the corner formed by the
intersection of the Southerly side of Maple Avenue with the said Westerly
side of College Point Boulevard;
RUNNING THENCE Westerly at right angles to the Westerly side of College Point
Boulevard a distance of 200.00 feet to a point;
RUNNING THENCE Southerly at right angles to Maple Avenue a distance of 83
feet 10 7/8 inches to the land now or formerly of the Flushing North Shore
and Central Railroad Company;
RUNNING THENCE along said land the following (2) courses and distance:
1. Southeasterly forming an interior angle of 128 degrees 00 minutes 02
seconds with the last mentioned line a distance of 14 feet, 11--1/4
inches.
2. again Southeasterly forming an interior angle of 186 degrees 32 minutes 08
seconds with the last mentioned line a distance of 138 feet 3--1/6 inches
to a point;
RUNNING THENCE Easterly at right angles with the westerly side of College
Point Boulevard a distance of 91 feet 3--1/8 inches to the said Westerly side
of College Point Boulevard;
RUNNING THENCE Northerly along the Westerly side of College Point Boulevard
191 feet 7--3/4 inches to the point or place of BEGINNING.
This conveyance is made in the regular course of business actually conducted
by the party of the first part.
The premises known as and by 44-12/22A College Point Boulevard
Flushing, New York
TOGHETHER with all right, title and interest, if any, of the party of the
first part in and to any streets and roads abutting the above described
premises to the center lines thereof; TOGETHER with the appurtenances and all
the estate and rights of the party of the first part in and to said premises;
TO HAVE AND TO HOLD the premises herein granted unto the party of the second
part, the heirs or successors and assigns of the party of the second part
forever.
AND the party of the first part, in compliance with Section 13 of the Lien
Law, covenants that the party of the first part will receive the
consideration for this conveyance and will hold the right to receive such
consideration as a trust fund to be applied first for the purpose of paying
the cost of the improvement and will apply the same first to the payment of
the cost of the improvement before using any part of the total of the same
for any other purpose.
The word "party" shall be construed as if it read "parties" whenever the
sense of this indenture so requires.
IN WITNESS WHEREOF, the party of the first part has duly executed this deed
the day and year first above written.
IN PRESENCE OF:
ASTORIA FEDERAL SAVINGS AND
LOAN ASSOCIATION
By: /s/ [PETER MELLERUP]
Peter Mellerup
1st Assistant Vice-President
NOTE
Loan No. 70-080337-5-3
Date September 17th, 1993 New York, New York
US $1,000,000.00
1. PROMISE TO PAY AMOUNT BORROWED AND FULFILL OTHER PAYMENT OBLIGATIONS
In return for a loan that I have received, I (meaning a natural person or
an organization, including a corporation, partnership, proprietorship,
association, estate, or trust, or any other entity or party who signs this Note)
RANBAR PACKING, INC.
A Domestic Corporation having its offices and principal places of business at
47-95 Metropolitan Avenue, Ridgewood, New York, 11385 promise and agree to pay
to the Lender, ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, a savings and loan
association organized and existing under the laws of the United States of
America, or order, or to any other holder of this Note (both called "Note
Holder"), ONE MILLION and 00/100 ($1,000,000.00) DOLLARS, with interest,
together with any late charges, prepayment charges, any amounts that Note Holder
spends to protect the value of, and the Note Holder's rights in, the Property
described in the Mortgage I am giving Note Holder to secure this Note, and all
other payments and obligations stated in this Note or in such Mortgage. All
payments on this note shall be paid in the legal currency of the United States
of America.
2. INTEREST - (SEE RIDER)
3. PAYMENTS OF PRINCIPAL AND INTEREST - (SEE RIDER)
4. ADDITIONAL MONTHLY PAYMENTS FOR TAXES, INSURANCE AND OTHER CHARGES
At the time I sign this Note, I will deposit with Note Holder such sums as
it may require to pay taxes, assessments, sewer rentals, water rates, premiums
for hazard insurance, mortgage insurance (if Note Holder required mortgage
insurance as a condition of making the Loan) and flood insurance (if eligible
under the National Flood Insurance program), and such other charges, hazards and
risk as Note Holder may specify (together called the "Charges"), plus not less
than an additional one-twelfth (1/12th) of the estimated amount of each such
Charge. I will make new deposits of one-twelfth (1/12th) of the yearly amount of
each such Charge as estimated by Note Holder together with my monthly payments
or principal and interest, so that there will always be enough money to pay each
Charge at lease one month before it is due. The amount required for each Charge
is established independently of any other Charge. Estimates may allow for
possible future increases in the Charges. These deposits will be called the
"Funds". Whenever Note Holder decides that the Funds will be too small to pay
one or more of the Charges one month before the due date, I will pay whatever
additional amount is necessary in one or more payments to and as Note Holder may
require. Tax or similar searches may be made at reasonable intervals at my
expense. I will not be paid any interest or earnings of the Funds. I will be in
default (see Section "8") if I do not make these payments promptly when they are
due. If I am in default and Note holder becomes the owner of my property or
sells it at a public sale, it may use the balance of the Funds to pay Charges or
reduce what I owe Note Holder. When I have paid what I owe Note Holder in full,
the balance, if any, of the Funds will be refunded to me or any subsequent owner
of the Property without any assignment of such Funds. Note Holder is not
responsible for any loss or penalties if I fail to furnish on time the necessary
bills for these Charges.
5. NOTE HOLDER'S APPLICATION OF PAYMENTS
Unless the law applicable to the Note Holder and to this Note specifically
requires otherwise, Note Holder will apply each of my payments under this Note:
(A) First, to pay the amounts due to Note Holder for Charges under Section "4"
of this Note; (B) Next, to pay any interest then due to the Note Holder under
any of the provisions of this Note; and (C) Next, to pay principal then due
under this Note. Any installment payment I make shall be applied by the Note
Holder to the longest outstanding installment date.
6. BORROWER'S OBLIGATION TO PAY CHARGES AND SATISFY CLAIMS
I will pay each Charge described in Section "4" and promptly pay or
satisfy any fine, claim, demand or charge that may be imposed on the Property,
that is not paid by Note Holder from the Funds described in Section "4", by
making payments when due directly to the "persons" (meaning any person,
organization, governmental authority, or other party) entitled to them. I will
promptly show Note Holder receipts for these payments if requested. If I do not
pay these Charges, Note Holder may, but need not do so, and I will repay Note
Holder immediately with interest at the highest rate of the law allows, but not
less than the rate stated in this Note, or Note Holder may add these amounts to
the amount remaining unpaid on this Note as if they were part of my original
debt.
7. BORROWERS PAYMENTS BEFORE THEY ARE DUE ("PREPAYMENTS") - (SEE RIDER)
8. FAILURE TO PAY OR KEEP PROMISE
(A.) Late Payment Charge - I agree (i) to pay immediately, without demand,
to the Note Holder, in the event that the Note Holder has not received and
accepted the full amount of any of my monthly payments of interest, principal
and Charges by the 16th day of the month in which it is due, and without regard
to whether or not such payment is actually subsequently received or the date as
of which such payment is credited, and without regard to whether or not the Note
Holder may have elected to require that I pay immediately the entire amount
remaining unpaid under this Note and under the Mortgage protecting the Note
Holder an amount equal to the equivalent of five cents (5 cents) for each dollar
of the monthly payment of interest, principal, (ii) that is impractical or
extremely difficult to fix the Note Holder's actual damage in the event that any
installment shall not be paid when due; and (iii) that such amount shall be
presumed to be the minimum amount of damages for such late payment. This
paragraph and the amount which it provides shall not limit the Note Holder's
right, under this Note, the Mortgage securing it, or otherwise, to compel prompt
performance hereunder.
(B.) Immediate Payment in Full - I will be in default and the Note Holder
may accelerate the normal maturity of this Note and require that I pay
immediately the entire amount remaining unpaid under this Note and under the
Mortgage protecting the Note Holder (this requirement will be called "Immediate
Payment In Full") and invoke any remedies permitted by law or by this Note or
the Mortgage protecting this Note: (1) If I fail to pay on or before the last
day of the month in which it is due, any of the monthly payments as provided in
Sections "3", "4" or any other Section of this Note or the Mortgage, or fail to
pay any Charge or other fine, claim, demand or charge as provided in Section "6"
for thirty (30) days after it became due; (2) If I fail to keep any promise or
agreement made in this Note or the Mortgage protecting the Note Holder;(3) in
any of the events provided for in the Mortgage protecting the Note Holder. In
this regard, and among other things, the Mortgage provides (Section "19"), in
substance, that Note Holder has the right to accelerate the normal maturity of
this Note and require Immediate Payment In Full if I sell, transfer or convey
all or any part of the Property, or any right, title or interest therein,
including any beneficial interests in borrower if the borrower is not a natural
person, or if any other person or entity becomes an owner thereof (commonly)
called a "DUE-ON-SALE" clause).
(C.) Increase in Yearly Interest Rate - If Note Holder requires Immediate
Payment in Full, I agree to pay interest at the higher yearly interest rate set
forth in Section "2" from the date that I defaulted or failed to keep any
promise or agreement in this Note or in the Mortgage protecting this Note.
(D.) Prior Forbearance; Costs, Expenses and Fees - The Note Holder may
exercise this option to accelerate and require that I pay immediately the entire
amount remaining unpaid under this Note and under the Mortgage protecting the
Note Holder during any default regardless of any prior forbearance. If suit is
brought to collect this Note, the Note Holder shall be entitled to collect all
reasonable costs, expenses and attorney's fees. Furthermore, if I am in default,
I promise to pay all costs of collection including reasonable attorney fees,
whether or not a law suit is commenced as part of the collection process. My
obligation to pay lawyer's fees and collection and court costs will survive my
default or the termination of this Note, the Mortgage or any other document I
sign in connection with this Loan, or the repayment of the Loan.
9. MEMBERSHIP REQUIREMENTS
Note Holder's
I hereby promise and agree to abide by the terms and provisions of Note
Holder's charter and by-laws as they are now and as they may at any time in the
future be revised, altered or amended.
<PAGE>
10. WAIVERS
I waive my rights to require the Note Holder to: (A) demand payment of the
amounts due ("presentment"); (B) give notice that the amounts due have not been
paid ("notice of dishonor"); (C) obtain and give notice of an official
certification of nonpayment ("protest" and "notice of protest"). Anyone else (i)
who agrees to keep the promises made in this Note, or (ii) who agrees to make
payments to the Note Holder if I fail to keep my promise under this Note, or
(iii) who signs this Note to transfer it to someone else (known as "guarantors,
sureties, and indorsers"), also waives these rights. The makers, sureties,
guarantors and endorses or this Note, jointly and severally, do each hereby
waive notice of a consent to any and all extensions of this Note or any part
thereof and any modification of the terms thereof.
11. THIS NOTE SECURED BY A MORTGAGE
In addition to the rights and protection given to the Note Holder under
this Note, I have signed a long-term Mortgage at the same time as this Note,
giving certain rights to the Note Holder, and protecting it from possible losses
which might result if I do not keep the promises which I make in this Note. I
understand that such Mortgage creates a continuing lien, claim or charge on my
Property described in such Mortgage until all of the principal, interest and any
other sums payable under this Note or the Mortgage shall be fully paid, and
shall serve as security for the repayment of principal, interest and any other
sums payable under this Note or said Mortgage, including every extension,
renewal or modification of this Note. I agree that all of the terms in the
Mortgage are mad a part of this Note.
12. RESPONSIBILITY
Every person who signs this Note is fully and personally obligated to pay
the full amount owed and to keep all of the promises and agreements made in this
Note. Any guarantor, surety or endorser of this Note is also obligated to do
these things. The Note Holder may enforce its rights under this Note against
each of us individually or against all of us together. This means that any one
of us may be required to pay all of the amounts owed under this Note. This Note
shall bind me, the successors and assigns, my executors, my administrators and
my estate. Any person who takes over my rights or obligations under this Note
will have all of my rights and must keep all of my promises made in this Note
and the Mortgage securing this Note. Any person who takes over the rights or
obligations of a guarantor, surety or endorser of this Note is also obligated to
keep all of the promises made in this Note and the Mortgage securing this Note.
I, and all other parties who are or hereafter may become secondarily liable for
the payment of the obligation evidenced by this Note, do hereby agree to remain
liable to the Note Holder, its successors and assigns, in the event that any
extension of the time for repayment is given to, or any modification of the
terms of this Note is made with me or my successors in interest.
13. CHANGES, CONTINUATION OR RIGHTS
This Note, or any of its provisions, may only be changed, altered,
modified, waived or terminated by written agreement signed by the Note Holder.
Even if Note Holder does not exercise or enforce any of its rights under this
Note or under the law, it will still have all those rights and may exercise and
enforce them in the future. Note Holder can accept late payments or partial
payments, even though marked "Payment in Full" without losing any rights. Note
Holder reserves all rights against all parties, including but not limited to all
parties now or hereafter secondarily liable.
14. CAPTIONS
The captions and titles of this Note are for convenience only. They may
not be used to interpret or define the terms of this Note.
15. LOAN CHARGES
In the event that an appropriate authority determines that this loan is
subject to a law which set maximum loan charges and such law is construed and
interpreted to apply to this loan so that the interest or other loan charges
collected or to be collected with this loan would exceed the permitted limits,
then: (A) any such loan charge shall be reduced by the amount necessary to
reduce the charge to the the permitted limit; and (B) any sums already collected
from me which exceed permitted limits will be refunded to me. The Note Holder
may choose to make this refund by reducing the principal I owe under this Note,
which will be treated as a partial prepayment (without penalty), or by making a
direct payment to me. Any such application or refund shall not cure or waive any
default.
16. NOTICES
Any notice that must be given to me under this Note or the Mortgage
securing this Note will be given by delivering it to me or by mailing it
addressed to me at the Property Address. A notice will be mailed to me at a
different address if I give the Note Holder a written notice of my different
address. A notice which is mailed shall be deemed given when it is deposited in
the United States mail, postage prepaid, addressed to me at my address as it
appears in the records of the Note Holder at the time the notice is given.
17. GOVERNING LAW; SEVERABILITY
This Note is governed by federal law and the law that applies in the place
where the Property I have mortgage to Note Holder to protect this Note is
located. However, I understand and agree that, anything in this Note or in any
other document to the contrary notwithstanding, the Loan evidenced by this Note
is made pursuant to, and shall be governed by, federal law, including the rules
and regulations promulgated thereunder, and particularly the federal laws, rules
and regulations for federal savings and loan associates. I further understand
and agree that such federal laws, rules and regulations shall apply and have
priority over any state or local laws, rules and regulations. In any paragraph,
clause or provision of this Note or the Mortgage securing this Note shall be
construed or interpreted by an appropriate authority to be void, invalid or
unenforceable, then such paragraph, clause or provision shall be deemed
separable from the remaining paragraphs, clauses or provisions and such decision
shall affect only those paragraphs, clauses or provisions so construed or
interpreted and shall not affect the validity or enforceability of the remaining
paragraphs, clauses or provisions of this Note or the Mortgage securing this
Note.
18. NOTE HOLDER'S RIGHT TO ASSIGN
Note Holder has the right to assign this Note and the Mortgage protecting
this Note and Note Holder's right, title and interest under this Note and such
Mortgage, in whole or in part, without notice and without my consent.
19. MATURITY DATE
Anything to the contrary, notwithstanding, if, on October 1st, 2003, I
still owe amounts on the Loan or under this Note, I will pay those amounts in
full on that date.
Signed and sealed in the presence of: RANBAR PACKING, INC. L.S.
-----------------------------------
By: /s/ Peter Castellana, Jr. L.S.
- - ----------------------------------- ------------------------------
Witness Peter Castellana, Jr.
Vice President
L.S.
--------------------------------
L.S.
---------------------------------
STATE OF NEW YORK, COUNTY OF NASSAU, S.S.
On September 17th, 1993 before me personally came Peter Castellana, Jr.
/ / to me known to be the individual(s) described in, and who executed the
foregoing instrument, and acknowledged to me that executed the same.
/X/ to me known, who, being by me duly sworn, did depose and say that he
- - -- resides at 47-05 Metropolitan Avenue, Ridgewood, New York, 11385 that he
is the VICE PRESIDENT of RANBAR PACKING, INC. the corporation described in
and which executed the foregoing instrument: that he knows the seal of
said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by the authority of the board of
directors of said corporation, and that he signed his name thereto by like
authority,
------------------------------------------
[Notary]
[ASTORIA FEDERAL SAVINGS LOGO]
<PAGE>
RIDER TO NOTE
2. INTEREST
I will pay interest on the unpaid principal at a rate of nine percent
(9.00%) per year, beginning with the date I sign this Note until such amount and
any other sums I may owe under this Note, are paid in full; EXCEPT THAT, in the
event that I do not pay the Loan on the due date or at maturity, whether by
acceleration as a result of my default of failure to keep any promise or
agreement I make in this Note or the Mortgage, or otherwise, I will pay interest
at a rate of five (5) percent per year in excess of the above stated rate from
the date that I am in default or fail to keep any such promise or agreement, but
in no event in excess of the maximum legal default rate of interest permitted
under any law specifically applicable to Note Holder and this Note. I will be
charged and must pay interest on the amount or principal outstanding until the
day it is paid. Among other things, this means that I will be charged and will
pay interest on any principal I prepay (either partial or in full) to and
including the date of such payment.
3. PAYMENTS OF PRINCIPAL AND INTEREST
At the time I sign this Note I will pay interest only, in advance, to the
end of the month. I will pay principal and interest by making payments every
month, in the amount of Twelve Thousand Six Hundred Sixty Seven and 58/100
DOLLARS (US $12,667.58) on the first (1st) day of the second calendar month next
following the month that I sign the Note. I will make these payments every month
until I have paid all of the principal and interest and any other charges
described in this Note or the Mortgage protecting the Note Holder. I will make
by monthly payments at One Astoria Federal Plaza, Lake Success, New York 11042,
or at a different place if required by the Note Holder.
In addition to the regular monthly payments of principal and interest, I
will pay additional principal of Fifty Thousand and No/100 Dollars (US
$50,000.00) on or before September 17, 1994, and a further principal payment of
Fifty Thousand and No/100 Dollars (US $50,000.00) on or before September
17,1995. These additional payments shall be applied against the principal amount
outstanding and shall not postpone the due date of any subsequently monthly
installments or change the amount of such installments. No prepayment penalty
shall be due in connection with these required additional payments of principal.
7. BORROWER'S PAYMENTS BEFORE THEY ARE DUE ("PREPAYMENTS")
Subject to the provisions of this paragraph, I may pay all or any part of
the principal amount due in advance at any time, which is called a "prepayment".
If I make a full or partial prepayment at any time on or before the first (1st)
anniversary of the date of this Note, I will pay a prepayment charge of a sum
equal to three percent (3.00%) of the amount prepaid; if I make a full or
partial prepayment at any time after the first (1st) anniversary of this Note
and on or before the second (2nd) anniversary of this Note, I will pay a
prepayment charge equal to two percent (2.00%) of the amount prepaid; if I make
a prepayment at any time after the second (2nd) anniversary of this Note and on
or before the third (3rd) anniversary of this Note, I will pay a prepayment
charge equal to one percent (1.00%) of the amount prepaid. There is no
prepayment charge on amounts prepaid after the third (3rd) anniversary of this
Note.
RANBAR PACKING, INC.
BY: /s/ Peter Castellana, Jr.
---------------------------
Peter Castellana, Jr.
Vice President
CONTRACT OF SALE
WARNING:
NO REPRESENTATION IS MADE THAT THIS FORM OF CONTRACT FOR THE SALE AND PURCHASE
OF REAL ESTATE COMPLIES WITH SECTION 5-702 OF THE GENERAL OBLIGATIONS LAW
("PLAIN ENGLISH").
CONTRACT OF SALE MADE AS OF THE 29TH day of June between ASTORIA FEDERAL SAVINGS
AND LOAN ASSOCIATION a savings and loan association existing under the laws of
the United States of America having an office and place of business at 1 Marcus
Avenue, Lake Success, New York 11042 hereinafter called "SELLER", who agrees to
Sell; and RANBAR PACKING, INC. a domestic corporation, having its office and
principal place of business at 44-44 College Point Boulevard, Flushing, New York
11355, TIN 11-2294858, hereinafter called "PURCHASER" who agrees to buy the
property, including all buildings and improvements thereon (the "PREMISES"),
more fully described on a separate page marked "Schedule A," and also known as
44-12/22A College Point Blvd., Flushing, NY, Block 5066, Lots 678 and 693,
together with SELLER'S interest, if any, in streets and unpaid awards as set
forth in Paragraph 9.
PERSONAL PROPERTY: None
Excluded from this sale are: Furniture and household furnishings.
1. The purchse price is $ 1,200,000.00
Payable as follows:
On signing of this contract, by check subject to collection $ 120,000.00 By
allowance for the principal amount still unpaid on
EXISTING MORTGAGES(S): $ -
By a Purchase Money Note and Mortgage $ -
Balance at Closing $ 1,080,000.00
EXISTING MORTGAGE(S):
2. [Intentionally deleted]
ACCEPTANCE FUNDS:
3. All money payable under this contract unless otherwise specified, shall be
either:
a. Cash, but not over one thousand ($1,000.00) Dollars,
b. Good certified check of PURCHASER, or official check of any bank,
savings bank, trust company, or savings and loan association having a banking
office in the State of New York, payable to the order of SELLER, (intentionally
deleted)
c. Money other than the purchase price, payable to SELLER at CLOSING, may
be by check of PURCHASER up to the amount of FIVE HUNDRED and
00/100----------------($ 500.00 ) dollars, or
d. As otherwise agreed to in writing by SELLER or SELLER'S attorney.
"SUBJECT TO" PROVISIONS:
4. The PREMISES are to be transferred subject to:
a. Laws and governmental regulations that affect the use and maintenance of
the PREMISES, provided that they are not violated by the buildings and
improvements erected on the PREMISES.
b. Consents for the erection of any structures on, under or above any
streets on which the PREMISES abut.
c. Encroachments of stoops, areas, cellar steps, trim and cornices, if any,
upon any street or highway.
d. Terms and conditions contained in the rider(s) annexed hereto and made a
part hereof.
TITLE COMPANY APPROVAL:
5. SELLER shall give and PURCHASER shall accept such title as any major New York
Title Company, a member of the American Land Title Association will be willing
to approve and insure in accordance with their standard form of title policy,
subject only to the matters provided for in this contract.
CLOSING DEFINED AND FORM OF DEED:
6. "CLOSING" means the settlement of the obligations of SELLER and PURCHASER to
each other under this contract, including the payment of the purchase price to
SELLER, and the delivery to PURCHASER of a Bargain & Sale with Covenants -or- a
Referee's deed in proper statutory form for recording so as to transfer full
ownership (fee simple title) to the PREMISES, free of all encumbrances except as
herein stated. The deed will contain a covenant by SELLER as required by Section
13 of the Lien law.
If SELLER is a corporation, it will deliver to PURCHASER at the time of CLOSING
(a) a resolution of its Board of Directors authorizing the sale and delivery of
the deed, and (b) a certificate by the Secretary or Assistant Secretary of the
corporation certifying such resolution and setting forth facts showing that the
transfer is in conformity with the requirements of Section 909 of the Business
Corporation Law. The deed in such case shall contain a recital sufficient to
establish compliance with that section.
CLOSING DATE AND PLACE:
7. CLOSING will take place at the office of ASTORIA FEDERAL SAVINGS AND LOAN
ASSOCIATION, 5 Dakota Drive (Suite #304), New Hyde Park, NY 11042 at 10:00 AM
o'clock on 10 days after receipt of mortgage commitment. 19
BROKER:
8. PURCHASER hereby states that PURCHASER has not dealt with any broker in
connection with this sale other than See Rider and SELLER agrees to pay the
broker the commission earned thereby (pursuant to separate agreement).
STREETS AND ASSIGNMENT OF UNPAID AWARDS:
9. This sale includes all of SELLER'S ownership and rights, if any, in any land
lying in the bed of any street or highway, opened or proposed, in front of or
adjoining the PREMISES to the center line thereof. It also includes any right of
SELLER to any unpaid award by reason of any taking by condemnation and/or for
any damage to the PREMISES by reason of change of grade of any street or
highway. SELLER will deliver at no additional cost to PURCHASER, at CLOSING, or
thereafter, on demand, any documents which PURCHASER may require to collect the
award and damages.
MORTGAGEE'S CERTIFICATE OR LETTER AS TO EXISTING MORTGAGE(S):
10. (Intentionally deleted)
Compliance With State and Municipal Department Violations and Orders:
11. a. SELLER will comply with all notes or notices of violations of law or
municipal ordinances, orders or requirements noted in or issued by any
governmental department having authority as to lands, housing, buildings, fire,
health and labor conditions affecting the PREMISES at the date hereof. The
PREMISES shall be transferred free of them at CLOSING and this provision shall
survive CLOSING. SELLER shall furnish PURCHASER with any authorization necessary
to make the searches that could disclose these matters.
Omit if the Property is Not in the City of New York
b. All obligations affecting the PREMISES, incurred pursuant to the
Administrative Code of the City of New York prior to CLOSING and payable in
money shall be discharged by SELLER at CLOSING. This provision shall survive
CLOSING.
Installment Assessments:
12. If at the time of CLOSING the PREMISES are affected by an assessment which
is or may become payable in annual installments, and the first installment is
then a lien, or has been paid, then for the purposes of this contract all the
unpaid installments shall be considered due and are to be paid by SELLER at
CLOSING.
<PAGE>
APPORTIONMENTS:
13. The following are to be apportioned as of midnight of the day before the day
of CLOSING:
(a) Rents as and when collected. (b) (Intentionally deleted) (d) Taxes, water
charges and sewer rents, on the basis of the fiscal period for which assessed.
(e) Fuel, if any. (f) Vault charges, if any. (g) Rent Security, if any.
If CLOSING shall occur before a new tax rate is fixed, the apportionment
of taxes shall be upon the basis of the old tax rate for the proceeding period
applied to the latest assessed valuation.
Any errors or omissions in computing apportionments at CLOSING shall be
corrected. This provision shall survive CLOSING.
WATER METER READINGS:
14. If there be a water meter on the PREMISES, the unfixed meter charge and
sewer rent, if any, shall be apportioned on the basis of such last reading.
ALLOWANCE FOR UNPAID TAXES, ETC.:
15. SELLER has the option to credit PURCHASER as an adjustment of the purchase
price with the amount of any unpaid taxes, assessments, water charges and sewer
rents, together with any interest and penalties thereon to a date not less than
five business days after CLOSING, provided that official bills therefor computed
to said date are produced at CLOSING.
USE OF PURCHASE PRICE TO PAY ENCUMBRANCES:
16. If there is anything else affecting the sale which SELLER is obligated to
pay and discharge at CLOSING, SELLER may use any portion of the balance of the
purchase price to discharge it. As an alternative, SELLER may deposit money with
the title insurance company employed by PURCHASER required by it to assure its
discharge, but only if the title insurance company will insure PURCHASER'S title
clear of the matter or insure against its enforcement out of the PREMISES. Upon
request made within a reasonable time before CLOSING, PURCHASER agrees to
provide separate certified checks as requested to assist in clearing up these
matters.
AFFIDAVIT AS TO JUDGEMENTS, BANKRUPT-
17. (Intentionally deleted)
Deed Transfer and Recording Taxes:
18. At CLOSING, SELLER shall deliver a certified check payable to the order of
the appropriate State, City or County officer in the amount of any applicable
transfer and/or recording tax payable by reason of the delivery or recording of
the deed, together with any required tax return. PURCHASER agrees to duly
complete the tax return and to cause the check(s) and the tax return to be
delivered to the appropriate officer promptly after CLOSING.
Purchaser's Lien:
19. All money paid on account of this contract, and the reasonable expenses of
examination of the title to the PREMISES and of any survey and survey inspection
charges are hereby made liens on the PREMISES and collectable out of the
PREMISES. Such liens shall not continue after default in performance of the
contract by PURCHASER.
Seller's Inability to Convey Limitation of Liability:
20. If SELLER is unable to transfer title to PURCHASER in accordance with this
contract, SELLER'S sole liability shall be to refund all money paid on account
of this contract, plus all charges made for: (i) examining the title, (ii) any
appropriate additional searches made in accordance with this contract, and (iii)
survey and survey inspection charges. Upon such refund and payment this contract
shall be considered cancelled, and neither SELLER nor PURCHASER shall have any
further rights against the other.
Condition of Property:
21. PURCHASER has inspected the buildings on the PREMISES and the personal
property included in this sale and is thoroughly acquainted with their
condition. PURCHASER agrees to purchase them "as is" and in their present
condition subject to reasonable use, wear, tear, and natural deterioration
between now and CLOSING. PURCHASER shall have the right, after reasonable notice
to SELLER, to inspect them before CLOSING.
Entire Agreement:
22. All prior understandings and agreements between SELLER and PURCHASER are
merged in this contract. It completely expresses their full agreement. It has
been entered into after full investigation, neither party relying upon any
statements made by anyone else that is not set forth in this contract.
CHANGES MUST BE IN WRITING:
23. This contract may not be changed or cancelled except in writing. The
contract shall also apply to and bind the distributees, heirs, executors,
administrators, successors and assigns of the respective parties. Each of the
parties hereby authorize their attorneys to agree in writing to any changes in
dates and time periods provided for in this contract.
SINGULAR ALSO MEANS PLURAL:
24. Any singular word or term herein shall also be read as in the plural
whenever the sense of this contract may require it.
25. A rider consisting of 3 pages is annexed hereto and made a part hereof.
26. A Mortgage Contingency rider consisting of 2 pages is annexed hereto and
made a part hereof.
ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
In Presence Of:
BY: /s/ [Illegible] V. Pres
-----------------------------
-----------------------------
-----------------------------
/s/ Peter Castellana, Jr.
-----------------------------
Vice President
Ranbar Packing, Inc.
<PAGE>
RIDER TO CONTRACT OF SALE
DATED: June, 1993
PREMISES: 44-12/22A College Point Blvd., Flushing, NY
1. THIS rider is in addition and supplemental to the printed contract, but in
the event of any inconsistency between the provisions of this rider and of the
printed portions of the contract, the provisions of this rider shall prevail.
2. THE parties agree that Kahhls Realty Inc. and Crifasi Real Estate brought
about this sale and the Seller agrees to pay the commission as per separate
agreement. The Purchaser herein named does hereby represent that no broker, or
if a broker is identified herein, no broker except the said broker identified
brought these premises to their attention and that all the dealings of the
Purchaser in connection with the purchase of said property were held directly
with the Seller and said broker. The Purchaser agrees that the foregoing
representation shall survive the delivery of the deed and shall enure to the
benefit of the Seller, their successors and assigns and the Purchaser agrees to
give testimony to this effect in case any action or proceeding shall be
instituted by any real estate broker or other person, licensed or otherwise,
claiming commission in connection with this contract of sale and the Purchaser
further agrees and does hereby indemnify and hold the Seller harmless from any
and all claims for the payment of any commission, arising from the acts of the
purchaser, in connection with the sale of the within premises.
3. SAID premises are sold and are to be conveyed subject to:
(a) a survey dated August 4, 1987 made by Montrose Surveying Co., Inc. (a copy
of which is annexed hereto and made a part hereof) and to any state of facts
that said survey brought down to date will show, provided the additional facts
thereon by reason of having been brought down to date will not render title
unmarketable; or, if no such existing survey is identified herein, then to any
state of facts an accurate survey may show, provided same does not render title
unmarketable; (b) all existing covenants, consents, restrictions, reservations,
agreements, consents for utilities, and public utility, driveway, railroad and
other easements of record and City Zoning Plans, regulations and ordinances and
amendments thereto not violated by existing structures or their present use; (c)
possible encroachments or variations from record lines of retaining walls,
cellar doors, fences, and fire escapes.
4. SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS AS TO THE PHYSICAL
CONDITION, INCOME, EXPENSE, OPERATION OR ANY OTHER MATTER OR THING AFFECTING OR
RELATING TO THE PREMISES, THE STRUCTURES THEREON OR THE PERSONAL PROPERTY
INCLUDED IN THIS TRANSACTION, EXCEPT AS HEREIN SPECIFICALLY SET FORTH. PURCHASER
EXPRESSLY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE. Purchaser
has inspected the same and is fully aware of the condition thereof. Purchaser
takes the premises, including any personal property included in this
transaction, "AS IS", in its present physical condition. Seller is not bound by
any verbal or written statements, representations, broker's listing or
information furnished by anyone, unless the same is specifically set forth
herein.
5. SELLER makes no representations whatsoever as to the ownership, physical
condition, operation or any other matter or thing affecting or relating to the
personal property in, on or used in connection with the premises. Seller shall
not be responsible for the removal of any structures; rubbish or any personal
property, etc., presently on the premises.
6. IF any material difference or discrepancy shall be found in any statement or
representation herein contained, or document attached hereto, or if, for any
reason, the Seller shall be unable to convey good and marketable title to said
premises, free from encumbrances, restrictions or other defects, except as
specified in this contract, the Purchaser shall, at his election, have the right
to accept such title as the Seller is able to convey, without any abatement in
the purchase price by reason of such differences, defects or objections; or, the
Purchaser shall have the right to rescind this contract, and should he so
rescind, he shall be entitled to the return of the amount paid by him under this
contract together with his net liability to a title company for a title search,
if the Purchaser has ordered an examination of title from a New York title
company, a member of the American Land Title Association, not in excess of their
customary charge for examining the title, and survey or survey inspection
charge. The lien reserved to secure such sums shall be preserved, but upon such
refund and payment this contract shall be deemed cancelled, null and void and of
no force and effect, and neither party shall have any claim against the other in
law or equity. The Seller shall not be required to bring any action or
proceeding, or procure any certificate, permit or other document, or otherwise
to incur any expense, in excess of $10,000,00, to obtain any certificate, permit
or document, or make title marketable or to make any repairs to the property
which maybe required. This provision is in lieu of and supersedes paragraph
"20", or any similar paragraph or provision, of the printed portion of this
contract, which is deemed deleted hereby.
<PAGE>
7. CONDITIONAL bills of sale, chattel mortgages, financing statements or like
liens, filed more than their effective period prior to closing of title, which
have not been renewed of record, shall not be deemed objections to title,
provided the Seller executes and delivers an affidavit that the property is no
longer in the premises or has been fully paid for. Any of the foregoing against
a tenant shall not be deemed an objection to title.
8. THE non-payment or non-fixation of any franchise, estate or inheritance tax,
if any, shall not be an objection to title but the Seller shall deposit with the
Title Company, a reasonable sum to insure the prompt filing of all necessary
returns and the prompt payment of the tax. The Seller agrees to hold the
Purchaser harmless from such taxes.
9. SELLER shall be entitled to a reasonable adjournment of closing for the
purpose of removing objections to title, if any.
10. THIS contract may not be recorded by the Purchaser, and may not be assigned
by the Purchaser without the express written consent of the Seller.
11. IF, between this date and the date title closes, any assessment is imposed,
the Seller agrees to pay such assessment, if it does not exceed $5,000.00. If it
does exceed $5,000.00, Seller may elect to cancel this contract upon returning
of the down payment and net cost of title examination, unless Purchaser shall
elect to take subject to such assessment and receive a credit of $5,000.00 in
the purchase price.
12. NO provision of this contract survives the delivery of the deed except as
expressly provided. Acceptance of the deed is an acceptance of all of the
obligations of the seller hereunder except such as may expressly be stated to
survive the delivery. Seller shall have no liability after Closing and delivery
of the deed for any obligation, statement or representation of Seller set forth
in this contract unless it is accompanied by an express statement that it shall
survive the Closing and delivery of the deed.
13. NOTICES, memoranda, stipulations and other matters of a like nature, signed
by the attorneys for the respective parties shall be deemed authorized for the
purposes of this agreement.
14. PURCHASER shall apply for a title search and report promptly after receipt
of the mortgage commitment referred to in this contract, or, if this contract is
not conditioned upon issuance of a mortgage commitment, promptly after execution
and delivery of this contract by both parties. A copy of the title report shall
be furnished to Seller's attorney promptly upon receipt, and is a condition
precedent to the scheduling of the closing.
15. IT is expressly understood and agreed that delivery of this Contract for
inspection or otherwise by Seller to the Purchaser shall not constitute an offer
or create any rights in favor of the Purchaser or another and shall in no way
obligate or be binding upon the Seller or Purchaser, and this Contract shall
have no force or effect unless and until the same is fully executed and
delivered by the Seller and the Purchaser, and fully executed copied of this
Contract are exchanged by the parties hereto.
16. SELLER shall be responsible for the New York State and New York City Real
Property Transfer Taxes and any New York Gains Tax resulting from this sale.
18. THE Purchaser shall in no event take possession of any part of the premises
prior to the actual delivery of the deed unto the Purchaser and full compliance
by the Purchaser with the terms of this contract, and should the Purchaser
violate this provision, the Purchaser consents that the Seller shall have the
right to dispossess it as a squatter and intruder by summary proceedings, and
Purchaser shall pay $150.00 per day for use and occupancy from the date of such
occupancy, or at Seller's option, Purchaser shall close title and accept a deed
irrespective of Seller's title.
19. THE premise shall be delivered unoccupied.
20. Omitted
21. SELLER makes no representation as to the current zoning classification of
the property.
22. Gains Tax.
A. Concurrently with the execution and delivery of this Contract,
Purchaser shall deliver to Seller a Transferee Real Property Transfer Gains Tax
Questionnaire (the "Transferee Questionnaire"), signed and sworn to by an
officer of Purchaser, as required pursuant to Section 1447 of the Gains Tax Law,
signed and sworn to by Seller. Seller and Purchaser each shall promptly furnish
to the Tax Department such other affidavits and information, signed and sworn to
where necessary, as the Tax Department or any agent thereof may require in order
to establish the Tentative Assessment, to the extent Seller or Purchaser can
reasonably provide the required affidavits and information. Copies of any
documents submitted by either party to the Tax Department pursuant hereto
(including, without limitation, the Transferor Questionnaire) shall be sent
concurrently to the other party.
<PAGE>
B. Seller will be deemed to have complied with its obligations as to Gains
Tax by presenting at closing the Tentative Assessment and Return or Statement of
No Tax Due, in favor of the transferee named in the Transferee Questionnaire
submitted to Seller's attorney.
Astoria Federal Savings
and Loan Association
By: /s/ By: /s/ Peter Castellana, Jr.
---------------------------------- -------------------------
Vice President Ranbar Packing, Inc. Peter Castellana, Jr.
Vice President
<PAGE>
MORTGAGE CONTINGENCY RIDER
PREMISES: 44-12/22A College Point Blvd., Flushing, NY
The obligations of Purchaser [and of the Seller if the "Mortgagee" identified
below is to be Astoria Federal Savings and Loan Association ("Astoria Federal")]
are conditioned upon issuance of a written commitment from such Mortgagee
pursuant to which such Mortgagee agrees to make a first mortgage loan (other
than VA, FHA or other government insured loan) to Purchaser, at Purchaser's sole
cost and expense, as set forth in this Section, and on other customary
commitment terms, whether or not conditional upon any factors other than an
appraisal satisfactory to Mortgagee.
23. Purchaser shall within ten (10) business days from the date of this contract
(a) make application to Mortgagee for such commitment, (b) furnish, on such
forms and in such fashion as Mortgagee requests, accurate and complete
information regarding Purchaser and members of Purchaser's family, as required,
(c) pay all costs, fees, points, expenses and charges required in connection
with such application and the making and closing of the loan, (d) pursue such
application with diligence, (e) cooperate in good faith with Mortgagee to obtain
such approval and commitment, (f) promptly give notice to Seller of the name and
address of each Mortgagee to which Purchaser has made such application.
Purchaser shall comply with all terms, conditions and requirements of such
application and commitment (or of any other commitment accepted by Purchaser),
and shall furnish Seller with a copy thereof promptly after receipt thereof.
24. If the Mortgagee is Astoria Federal, the note, mortgage and other documents
in connection therewith shall be drawn by the attorney for Astoria Federal, at
Purchaser's sole cost and expense, in the standard form used by Astoria Federal
in its regular lending activities for first mortgage loans (other than VA, FHA
or other government insured loans) secured by owner-occupied properties similar
(as to its use and occupancy) to the property herein being sold, and for the
principal amount set forth below (or such lesser sum as Purchaser shall be
willing to accept). Purchaser shall pay at or before Closing all costs, fees,
points, expenses and charges normally required by Astoria Federal in connection
therewith, including, but not limited to, all mortgage recording taxes, all
recording fees, all title examination and insurance fees, survey and/or survey
inspection fees, departmental searches, flood certification fees and credit
report fees, appraisal fee, "points", and attorney's fees not to exceed $500.00,
all of which Purchaser is obligated to pay at or prior to closing.
25. Purchaser agrees to execute the forms and documents and comply with the
requirements of the Mortgagee. If the Mortgagee is Astoria Federal, they shall
be those generally specified in commitments to its borrowers for this type of
mortgage loan, including, but not limited to, the requirement of constant
monthly principal and interest payments, owner-occupancy and those with respect
to hazard and flood insurance, including the production at closing of the
required policy or policies and proof of payment of the premium(s) for a least
one year in advance. In addition, all liens, including those for real estate
taxes or water and sewer rent charges, which are due at closing or within the
number of days thereof usually specified by the Mortgagee, shall be paid at
closing. Purchaser shall also make all the usual deposits for future charges for
such items as real estate taxes, water and sewer rent charges, hazard and flood
insurance premiums, private mortgage insurance and other like charges. If
Astoria Federal is the Mortgagee, interest shall be prepaid from date of closing
to end-of-month, and paid monthly in advance thereafter on the first day of each
calendar month, the first full monthly payment of principal and interest being
due on the first of the month immediately after closing.
26. If Astoria Federal is the Mortgagee, the obligation of Astoria Federal to
make such loan or forbearance shall be conditioned on and subject to the
Purchaser qualifying under Astoria Federal's standard credit requirements.
27. If Astoria Federal is not the Mortgagee designated in this contract, and
such commitment is not issued on or before the Commitment Date (set forth below
for Mortgagees other than Astoria Federal), then, unless Purchaser has accepted
a commitment that does not comply with the requirements herein set forth,
Purchaser may cancel this contract by giving written notice sent registered
mail, return receipt requested, to Seller within three (3) business days after
the Commitment Date. In the event that Astoria Federal is the Mortgagee, and it
determines that Purchaser does not qualify (whose determination shall be
conclusive and binding on the Purchaser), Seller and/or Astoria Federal will
promptly notify Purchaser and/or Purchaser's attorney. In either applicable
event, this contract shall be automatically cancelled as of the date of such
notification and thereafter neither party shall have any further rights against,
or obligations or liabilities to, the other by reason of this contract, except
that the downpayment shall be promptly refunded to Purchaser on surrender by
Purchaser of all copies of this contract received by Purchaser together with a
duly executed general release in recordable form from Purchaser in favor of
Seller and Astoria Federal, and except as set forth in Section "2" (with respect
to the real estate brokers, if any) of annexed rider.
28. MORTGAGEE:
[x] Astoria Federal Savings and Loan Association (Astoria Federal)
[ ] Any Institutional Lender other than Astoria Federal
Commitment Date:
29. PRINCIPAL
AMOUNT: $1,000,000.00, or such lesser sum as Purchaser shall be
willing to accept.
<PAGE>
30. TERM: 10 YEARS.
31. INTEREST RATE:
[x] Fixed rate of 9.00% [x] I point discount payable to Lender.
32. PAYMENTS
[x] Constant [x] fixed interest; self-liquidating, additional $50,000.00
principal payments on the first and second anniversary date.
33. OTHER CONDITIONS:
[x] Western Beef, Inc. the exchange listed company shall be the
guarantor on the note.
Astoria Federal Savings
and Loan Association
By: /s/ [SIGNATURE] By: /s/ Peter Castellana, Jr.
--------------------------------------- ---------------------------
Vice President Ranbar Packing, Inc.
Peter Castellana, Jr.
Vice President
<PAGE>
Title No. ??????
SCHEDULE A
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough and County
of Queens, City and State of New York, bounded and described as follows:
BEGINNING at a point on the Westerly side of College Point Boulevard (Laurence
Street) distant 100.00 feet Southerly from the corner formed by the intersection
of the Southerly side of Maple Avenue with the said Westerly side of College
Point Boulevard;
RUNNING THENCE Westerly at right angles to the Westerly side of College Point
Boulevard a distance of 200.00 feet to a point;
RUNNING THENCE Southerly at right angle to Maple Avenue a distance of 83 feet 10
7/8 inches to the land now or formerly of the Flushing North Shore and Central
Railroad Company;
RUNNING THENCE along said land the following (2) courses and distances:
1. Southeasterly forming an interior angle of 128 degrees 00 minutes 02
seconds with the last mentioned line a distance of 14 feet, 11--1/4
inches
2. again Southeasterly forming an interior angle of 186 degrees 32
minutes 08 seconds with the last mentioned line a distance of 138
feet 3--1/8 inches to a point;
RUNNING THENCE Easterly at right angles with the westerly side of College Point
Boulevard a distance of 91 feet 3--1/8 inches to the said Westerly side of
College Point Boulevard;
RUNNING THENCE Northerly along the Westerly side of College Point Boulevard 191
feet 7--3/4 inches to the point or place of BEGINNING.
/s/ [SIGNATURE]
For conveyancing only, if intended to be conveyed.
Together with all rights, title and interest of, in and to any streets
and roads abutting the above described premises, to the center line
thereof.
<PAGE>
[PROPERTY APPRAISAL MAP OMITTED]
<PAGE>
[PROPERTY APPRAISAL MAP OMITTED]
<PAGE>
[PROPERTY APPRAISAL MAP OMITTED]
<PAGE>
[PROPERTY APPRAISAL MAP OMITTED]
SUBSIDIARIES OF WESTERN BEEF, INC.
Western Beef - Metropolitan Avenue, Inc.
Western Beef - Morris Avenue, Inc.
Western Beef - Forest Avenue, Inc.
Western Beef - 14th Street, Inc.
W.B. Produce - Metropolitan Avenue, Inc.
Western Beef - Merrick Blvd., Inc.
Western Beef - Fort Greene Place, Inc.
Western Beef - Canarsie, Inc.
W.B. Produce - Canarsie, Inc.
Western Beef - 173rd Street, Inc.
Western Beef - Rosedale Avenue, Inc.
Western Beef - Steinway Street, Inc.
Western Beef - Empire Blvd. Inc.
Western Beef - Mineola, Inc.
Western Beef - West End Avenue, Inc. (Formerly known as Western Beef-
Atlantic Avenue, Inc.)
Western Beef - Roosevelt, Inc.
Western Beef - Rockaway Blvd., Inc.
Western Beef - Myrtle Avenue, Inc.
Western Beef - W.B. International
FoodNation, Inc. (Formerly known as Quarex Operating Company, Inc.)
SUBSIDIARIES OF FOODNATION, INC.
Western Beef - College Point Blvd., Inc. (Formerly known as Ranbar Packing,
Inc.)
Western Beef - East Orange, N.J., Inc.
Western Beef - East New York, Inc.
Western Beef - Park Avenue, Inc.
<PAGE>
Western Beef - Elmont, Inc. (Formerly known as Quarex-Elmont, Inc.)
Western Beef Supermarket, Inc.
NOTE:
All corporations listed above were incorporated in New York except for
Western Beef-East Orange, N.J., Inc. which was incorporated in New Jersey and
W.B. International which was incorporated in Nevada.
<PAGE>
SUBSIDIARIES
1. General
Western Beef, Inc. conducts it retail and wholesale food business directly
and through 19 consolidated wholly-owned subsidiaries and six consolidated
subsidiaries wholly-owned by FoodNation, Inc. (Formerly know as Quarex Company,
Inc.) a 100% subsidiary of the registrant.
2. Other Subsidiaries
Awesome Transportation, Inc.
East Central Meats, Inc.
Quarex New England, Inc.
Western Beef Advertising, Inc.
Western Beef Administration, Inc. (Formerly Known as Western Beef, Inc. (New
York Corporation)
W.B. Packing, Inc.
Sabrina Food Sales, Inc.
Food Warehouse, Inc.
NOTE:
All Corporations listed above were incorporated in New York except for
Quarex-New England, Inc. which was incorporated in Massachusetts.
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-80379) of our report dated March 5, 1998 appearing
on page F-1 of the Annual Report of Western Beef, Inc. on Form 10-K for the year
ended January 2, 1998. We also consent to the incorporation by reference of our
report on the Financial Statement Schedule which appears on Page F-25 in this
Form 10-K.
PRICE WATERHOUSE LLP
New York, New York
March 31, 1998
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Western Beef, Inc.
We hereby consent to the incorporation by reference in the respective
Registration Statement on Form S-8 (No. 33-80379) of our report dated March 3,
1997, relating to the consolidated financial statements and schedule of Western
Beef, Inc. appearing in the Company's Annual Report on Form 10-K for the year
ended January 2, 1998.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
New York, New York
March 5, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Western
Beef, Inc. and Subsidiaries Annual Report on Form 10-K for the year ended
January 2, 1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-02-1998
<PERIOD-START> JAN-04-1997
<PERIOD-END> JAN-02-1998
<CASH> 7,527
<SECURITIES> 0
<RECEIVABLES> 6,827
<ALLOWANCES> 552
<INVENTORY> 14,113
<CURRENT-ASSETS> 32,083
<PP&E> 62,784
<DEPRECIATION> 20,526
<TOTAL-ASSETS> 76,254
<CURRENT-LIABILITIES> 18,395
<BONDS> 8,837
0
0
<COMMON> 273
<OTHER-SE> 44,856
<TOTAL-LIABILITY-AND-EQUITY> 76,254
<SALES> 317,079
<TOTAL-REVENUES> 318,768
<CGS> 237,808
<TOTAL-COSTS> 237,808
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,086
<INCOME-PRETAX> 5,335
<INCOME-TAX> 2,132
<INCOME-CONTINUING> 3,203
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,203
<EPS-PRIMARY> .59
<EPS-DILUTED> .58
</TABLE>
