FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
OR
|_| TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________to__________
Commission file number: 0000914066
FOILMARK, INC.
(Exact name of Registrant as specified in its charter)
Delaware 11-3101034
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 Malcolm Hoyt Drive
Newburyport, MA 01950
(Address of principal executive offices) (Zip Code)
(508) 462-7300
(Registrant's telephone number including area code)
(Former name, former address, and former fiscal year,
if changed since last report)
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 __
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
<PAGE>
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ___ No ___
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding
$.01 per value Common Stock 4,162,343
<PAGE>
FOILMARK, INC.
INDEX TO FORM 10-Q
PAGE
----
Index 3
Part I - Financial Information:
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 4
Condensed Consolidated Statement of Income for
the Three (3) and Six (6) months June 30, 1997 and 1996 5
Consolidated Statements of Cash Flows
Six (6) months ended June 30, 1997 and June 30, 1996 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
of Financial Conditions and Results of Operations 8-10
Part II - Other Information:
Item 1 - Legal Proceedings 11
Item 4 - Submission of Matters to a Vote of Security Holders 11-12
Item 6 - Other Proceedings 12
Item 7 - List of Exhibits 12
Item 8 - Signatures 13
3
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
Foilmark, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, December 31,
1997 1996
Assets (Unaudited) (Audited)
------ ----------- ---------
<S> <C> <C>
Current Assets:
Cash $ 226,139 $ 199,923
Accounts receivable - trade (less allowance for doubtful
accounts of $663,000 and $539,000 in 1997 and 1996) 7,501,482 5,730,924
Inventories 12,755,949 13,910,815
Other receivables 895,395 --
Other current assets 324,403 206,952
Income tax receivable 113,915 491,915
Deferred income taxes 760,246 760,246
----------- -----------
Total current assets 22,577,529 21,300,775
Property, plant and equipment, net 9,509,122 12,518,552
Bond and mortgage financing costs 391,409 533,868
Intangible assets, net 5,662,644 5,840,242
Other assets 90,465 138,680
----------- -----------
38,231,169 40,332,117
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current installments of notes payable- stockholders 109,608 132,113
Current installments of other long-term debt 953,740 1,385,598
Accounts payable and accrued expenses 5,310,173 6,173,197
Customer deposits 816,792 827,812
----------- -----------
Total current liabilities 7,190,313 8,518,720
Long-term debt
Notes payable to stockholders, net of current installments 711,614 767,054
Other long-term debt, net of current installments 10,108,178 11,398,034
----------- -----------
10,819,792 12,165,088
Deferred income taxes 1,398,528 1,398,528
Commitments and contingencies
Stockholders' equity:
Common stock ($.01 par value: authorized
10,000,000 shares; issued 4,162,343) 41,628 41,517
Additional paid-in capital 13,374,474 13,364,404
Retained earnings 5,406,434 4,843,860
----------- -----------
Total stockholders' equity 18,822,536 18,249,781
----------- -----------
38,231,169 40,332,117
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
Part I. Financial Information
Foilmark, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 10,142,760 $ 10,162,169 $ 21,527,035 $ 19,008,712
Cost of sales 7,238,039 7,274,017 15,933,506 13,873,975
------------ ------------ ------------ ------------
Gross profit 2,904,721 2,888,152 5,593,529 5,134,737
Selling, general and
administrative expenses 2,189,409 2,425,989 4,256,944 4,850,824
------------ ------------ ------------ ------------
715,312 462,163 1,336,585 283,913
------------ ------------ ------------ ------------
Other income (expense):
Interest expense - net (201,397) (241,846) (440,229) (384,703)
Other income 26,949 36,277 46,218 40,787
------------ ------------ ------------ ------------
Income (loss) before income taxes 540,864 256,594 942,574 (60,003)
Income tax (expense) benefit (213,291) (113,100) (380,000) 19,900
------------ ------------ ------------ ------------
Net income (loss) 327,573 143,494 562,574 (40,103)
============ ============ ============ ============
Net income (loss) per share 0.08 0.03 0.14 (0.01)
============ ============ ============ ============
Weighted average number of common and
common equivalent shares outstanding 4,160,171 4,141,254 4,158,188 4,141,254
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
Foilmark, Inc., and Subsidiaries
Consolidated Statements of Cash Flows - Six months ended
(Unaudited)
<TABLE>
<CAPTION>
June 30, June 30,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) 562,574 (40,103)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 834,673 705,050
Amortization 204,880 174,286
Provision for doubtful accounts 153,629 61,439
Increase in deferred taxes -- 174,865
Changes in assets and liabilities:
(Increase) in accounts receivable (1,924,187) (612,307)
Decrease (increase) in inventories 1,154,866 (1,103,333)
Decrease in income tax receivable 378,000 --
(Increase) in other assets (80,256) (319,641)
(Decrease) increase in accounts payable and (863,024) 887,993
accrued expenses
Decrease in restricted short-term investments -- 1,037,590
---------- ----------
Net cash provided by operating activities 421,155 965,839
---------- ----------
Cash flows from investing activities:
Capital expenditures (361,800) (1,813,356)
Sale of facilities 2,536,557 --
(Increase) in other receivables (895,395) --
Decrease in bond and mortgage financing costs 115,177 --
---------- ----------
Net cash provided by (used in) investing activities: 1,394,539 (1,813,356)
---------- ----------
Cash flows from financing activities:
Proceeds of stockholder loans and
long-term debt, net -- 564,564
Payments of notes payable to stockholders (77,945) (81,643)
Proceeds of other long-term debt 1,089,000 --
Payments of other long term debt (2,810,714) --
Proceeds from shares issued under benefit plans 10,181 19,910
---------- ----------
Net cash (used for) provided by financing activities (1,789,478) 502,831
---------- ----------
Net (decrease) in cash 26,216 (344,686)
Cash - beginning of period 199,923 464,256
---------- ----------
Cash - end of period 226,139 119,570
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
Foilmark, Inc.
Notes to Condensed Consolidated Financial Statement Sheets
June 30, 1997 and 1996
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all the adjustments (consisting of
only normal recurring accruals) necessary to present fairly the financial
position of the Company as of June 30, 1997 and 1996, the results of
operations for the six (6) months ended June 30, 1997 and 1996 and
statements of cash flows for the six (six) months ended June 30, 1997 and
1996.
Results for an interim period are not necessarily indicative of results of
the entire year and such results are subject to year end adjustments and
independent audit.
The classification of inventories as of June 30, 1997 and December 31, 1996
was as follows:
June 30, 1997 December 31, 1996
Unaudited Audited
Raw Materials $ 1,658,273 $ 795,856
Work in Progress 3,380,326 3,768,067
Finished Goods 7,717,350 9,346,892
----------- -----------
Total $12,755,949 $13,910,815
=========== ===========
7
<PAGE>
Item 2. Management's Discussion Analysis of Financial Conditions and Result of
Operations
GENERAL
The Company's net revenues for the second quarter 1997 were relatively the same
at $10,142,760 compared to $10,162,169 for the 1996 second quarter. Net income,
rose to $327,573 or $.08 per share for the three months ended June 30, 1997
compared to $143,494 or $.03 per share for the comparable 1996 period. This
represents a 128% increase in net income and a 167% increase in earnings per
share. For the six months ended June 30, 1997 revenues increased by 13.2% to
$21,527,035 up from $19,008,712 for the six months ended June 30,1996. Net
income totaled $562,574 or $.14 per share compared to a loss of $40,103 or $.01
per share for the 1996 six month period.
The 1997 second quarter and six months results benefited from the consolidation
of the machinery plants in Newburyport, Massachusetts completed during 1996,
elimination of overhead duplications, operation of the state-of-the art
metallizer in conjunction with the new high speed foil production equipment for
all of 1997, ongoing reduction in polyester prices, the main component used in
the foil manufacturing process, and continued growth in the Foilmark Holographic
division.
The machinery group, although making significant progress in the 1997 second
quarter and six months, still remained unprofitable due to weak order demand for
pad printing machines for most of the period. Current backlog for this product
line has improved, and it is expected that the machinery group will contribute
to profitability for the second half of 1997.
NET SALES:
Net sales for the six months ended June 30, 1997 increased 13.2% to $21,527,035
from $19,008,712 for the six months ended June 30, 1996. For the three months
ended June 30, 1997, net sales were $10,142,760, relatively the same as the
comparable 1996 period at $10,162,169. Included in the six months 1997 net sales
was the shipment to China for equipment to manufacture ,convert, and apply hot
stamping foils and holographic products and a 221% increase in sales of the
Foilmark Holographic division. Sales in the general foil and machinery product
lines were basically flat during the 1997 second quarter compared to 1996.
GROSS PROFIT:
Gross profit increased $458,792 or 8.9% for the six months ended June 30, 1997
compared to the six months ended June 30, 1996. Gross profit as a percentage of
sales declined from 27.0% in 1996 to 26.0% in the six months ended June 30,
1997. The decline in gross profit percentage was caused primarily as a result of
losses in the machinery group due to soft market conditions during the first
quarter. For the three
8
<PAGE>
months ended June 30, 1997 gross profit as a percentage of sales increased
strongly from the 1997 first quarter to 28.6% as compared to the 1996 second
quarter of 28.4%. The improvement in the 1997 second quarter gross profit as a
percentage of sales was a result of improved manufacturing efficiencies at the
hot stamping machinery plant, continuing reduction in polyester film prices and
increased contributions of the Foilmark Holographic division.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Selling, general and administrative expenses declined by $593,880 or 12.2 % and
$236,580 or 9.8% for the six and three months ended June 30, 1997 compared to
the same periods in 1996. Expenses as a percentage to sales declined to 19.8%
and 21.6% from 25.5% and 23.9% respectively for the 1997 six and three months
compared to the same six and three month periods in 1996.
The reduction was primarily due to the change in marketing strategy. At the
beginning of 1997 the Company expanded its direct outside sales force and
reduced manufacturers representatives in most territories to provide the Company
with more cost effective sales coverage.
INCOME FROM OPERATIONS:
Income from operations increased by 371% or $1,052,672 to $1,336,585 for the six
months ended June 30,1997 as compared to $283,913 for the six months ended June
30, 1996. For the three months ended June 30, 1997 income from operations
increased to $715,312 a gain of $253,149 from the comparable 1996 period. The
primary reason for the large increase in income from operations was the return
to profitability of the foil group in 1997 compared to 1996. During 1997 the
foil group benefitted from the state-of-the-art metallizer being available for
the complete six months, reduction in polyester film prices and reduction in the
selling expenses.
INTEREST EXPENSE
For the six months ended June 30, 1997 interest expense increased to $440,229, a
$55,526 increase over the six months ended June 30, 1996. In the three months
ended June 30 1997 interest expense declined by 16.7% to $201,397 from $241,846
in the three months ended June 30,1996. The decrease in interest expense in the
1997 second quarter was due to a reduction in bank debt as a result of a
positive cash flow from operating activities and sale of the Melville, New York
property.
PROVISION FOR INCOME TAXES:
Provision for income taxes for the six months ended June 30,1997 was $380,000
based on income before taxes of $942,574 as compared to an income tax benefit of
$19,000 as a result of a pre-tax loss of $60,003 for the six months ended June
30, 1996. The effective tax rate used was 40.3% and 33.2% respectively for the
1997 and 1996 six months.
9
<PAGE>
NET INCOME:
For the six and three months ended June 30,1997 the Company had net income of
$562,574 and $327,573 respectively as compared to $143,494 and a loss of $40,103
for the six and three months ended June 30, 1996. The increase in net income for
the six months of 1997 was due to a 13.2% increase in net sales, a 8.9% increase
in gross profit and a 12.2% decrease in selling, general and administrative
expenses. The increase in net income for the three months ended June 30,1997 was
due primarily to a $236,580 decrease in selling expenses and a $40,449 reduction
in interest expense.
LIQUIDITY AND CAPITAL RESOURCES:
On June 19, 1997 the Company completed the sale of the Melville, New York
property receiving $2,000,000 less expenses for brokers commission and legal
fees. $1,500,000 of the proceeds was used for bank debt reduction with the
remaining balance used for working capital. The sale of the Norwood,
Massachusetts property is scheduled to close on August 13,1997 at a selling
price of $900,000 less expenses. The net proceeds from this sale will be used
for further bank debt reduction. The combined sales of both properties will
result in a net gain of approximately $44,000 and will allow the Company to
eliminate underutilized assets, combine manufacturing operations and reduce
overhead.
On June 30,1997 the Company concluded refinancing with one of its banks,
increasing the revolving line of credit from $6 million to $10 million at the
same interest rate of bank prime or LIBOR plus 2%. No repayments will be
required until maturity on June 30, 2000. At the same time the Company repaid a
term loan in the amount of $650,000 with its other bank using the newly
increased line of credit. At June 30, 1997 the Company had outstanding under the
revolving line of credit a total of $6,595,944 leaving a total of $3,404,056
available under its revolving credit facility. The Company expects that cash
from operations and the existing credit facility will be sufficient to meet its
operating needs for the foreseeable future.
At June 30 1997, the Company's working capital was $15,387,216, an increase of
$2,605,161 from December 31, 1996. The increase in working capital was due
primarily to the refinancing of the revolving line of credit on more favorable
terms by the elimination of current installments of long term debt, the sale of
the Melville, New York property, the reduction of debt and profitable operations
for the six months ended June 30, 1997.
OTHER MATTERS:
In March of 1997, the Financial Accounting Standards Board issued Statement
Number 128, "Earnings Per Share", which establishes standards of computing and
presenting earnings per share. The Company will adopt the provisions of this new
standard effective December 31, 1997, and all prior periods will be restated.
The effect of adoption will not have a material impact on the Company's
financial condition, result of operations or cash flows.
10
<PAGE>
Part II. Other Information
Item 1. LEGAL PROCEEDINGS
For all of 1996, the Company was a defendant in a group of consolidated
lawsuits brought in 1995 alleging personal injuries arising out of a motor
vehicle accident involving a vehicle leased by one of the Company's subsidiaries
and operated by an employee of that subsidiary. Plaintiffs sought damages for an
amount significantly in excess of the Company's insurance policy limits. During
1996 the Company settled two (2) of the cases within the limits of its liability
insurance policy. On April 8, 1997 the Company settled the remaining cases by
agreeing to pay $200,000 to the remaining Plaintiffs. In connection with the
settlement, the Company's liability carrier paid the balance of the amount
available under the policy after giving effect to the prior settlement. These
settlements have been confirmed by the Superior Court and Dismissal Stipulations
have been entered dismissing the litigation with prejudice.
Item 2. CHANGES IN SECURITIES
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITY
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 20, 1997, the Company held its Annual Meeting of Shareholders,
Martin Olsen, Leonard Mintz and Edward Sullivan were elected to be the Directors
of the Company for three (3) year terms expiring in 2000. Michael Bertuch and
Michael Foster were elected to be the Directors of the Company for two (2) year
terms expiring in 1999. Set forth below are the results of each matter voted
upon at the Annual Meeting.
1. Election of Directors: - For Three (3) Year Term
For Withheld
--- --------
(a) Martin Olsen 2,664,748 28,936
(b) Leonard Mintz 2,667,448 26,236
(c) Edward Sullivan 2,664,948 28,736
2. Election of Directors: - For Two (2) Year Term
For Withheld
--- --------
(a) Michael Bertuch 2,663,948 29,736
(b) Michael Foster 2,666,148 27,536
11
<PAGE>
3. Ratification to adopt the 1997 Directors Stock Option Plan
For Against Abstentions
--- ------- -----------
2,607,402 76,536 9,746
Item 5. OTHER INFORMATION
Not applicable
Item 6. OTHER PROCEEDINGS
In April 1997, the Company accepted an offer of $900,000 to sell its
Norwood, Massachusetts property. The closing of this sale is scheduled to take
place in August, 1997. The Company expects to incur no material earnings or tax
gain or loss on the combination of the sale of this facility and the sale of the
Melville, New York facility completed in June, 1997. The net proceeds of the
Norwood sale will be used to reduce bank debt.
Item 7. LIST OF EXHIBITS
10.48 Mulliken Way, Newburyport, Massachusetts Property Lease
10.49 50 Parker Street, Newburyport, Massachusetts Property Lease
10.50 120 Fairchild Avenue, Plainview, New York Property Lease
10.51 1997 Non-Employee Directors' Stock Plan
Item 8. SIGNATURES
12
<PAGE>
Item 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FOILMARK, INC.
August 12, 1997 By: /s/ Philip Leibel
- --------------- ---------------------------------------------------------
Date Philip Leibel, Vice President-Finance (Chief Financial &
Accounting Officer)
August 12, 1997 By: /s/ Frank J. Olsen, Jr.
- --------------- ----------------------------------------------------------
Date Frank J. Olsen, Jr., President and Chief Executive Officer
13
LEASE
SECTION 1
Reference Information
Section 1.1. Reference Information. Reference in this Lease to any of the
following shall have the meaning set forth below:
Date of This Lease: April 21, 1997
Premises: The portion (shown in Exhibit A) of the building (the "Building")
on the lot (the "Lot") shown in Exhibit B, situated at 4 Mulliken Way,
Newburyport, Massachusetts, together with the right to use the parking and means
of access and egress currently provided on the Lot, in common with other
tenants.
Landlord: Edward G. Molin
Address of Landlord: 270 Water Street, Newburyport, MA
Tenant: FOILMARK, INC., a Delaware corporation
Address of Tenant: 5 Malcolm Hoyt Drive, Newburyport, MA
Term Commencement Date: May 1, 1997
Term Expiration Date: April 30, 2002
Extension Term: One (1) term of five (5) years
Premises Square Footage: 25,000 square feet of manufacturing space
and 450 square foot shed.
Annual Fixed Rental Rate: Year 1 and 2: $175,000.00
Year 3, 4 and 5: $187,500.00
During Extension Term: At a rental rate
to be negotiated between Landlord and
Tenant, provided, however, that the ren-
tal rate for the first and second year of
the Extension Term shall not exceed
$206,250.00, and the rental rate for the
third, fourth and fifth year of the
Extension Term shall not exceed
$218,750.00.
Permitted Uses: Manufacturing, light industrial, ware
house and distribution use, and
ancillary office use.
E-1
<PAGE>
Public Liability Insurance Limit:
Bodily Injury Combined single limit of $2,000,000.00
and Property
Damage:
Initial Payment: The first month's rent shall be due and
payable at the time of the execution of
the within lease.
Broker: None
Section 1.2. Exhibits. The following Exhibits are attached to and
incorporated in this Lease:
Exhibit A: Plan of Premises
Exhibit B: Description of Lot
Exhibit C: Agreed-upon Modifications
SECTION 2
Premises and Term
Section 2.1. Premises. Landlord hereby leases and demises the Premises to
Tenant and Tenant hereby leases the Premises from Landlord, subject to any and
all existing encumbrances and other matters of record and subject to the terms
and provisions of this Lease together with the right to use in common with other
tenants entitled thereto the parking lot. Tenant shall have the right to access
the electrical service panel serving the Premises upon reasonable advance notice
to Landlord.
Section 2.2. Term. To have and to hold for an original term beginning on
the Term Commencement Date and continuing until the Term Expiration Date, unless
sooner terminated as hereinafter provided.
Section 2.3. Option to Extend Term. Tenant shall have the option to extend
the term of this Lease for the Extension Term, provided (a) no default beyond
any applicable notice and cure period in the obligations of Tenant under this
Lease shall exist at the time such option is exercised and (b) Tenant shall give
notice to Landlord of its exercise of such option not less than nine (9) months
prior to expiration of the original term. All of the terms and provisions of
this Lease shall be applicable during the Extension Term except that Tenant
shall have not option to extend the term of the lease beyond the Extension Term.
E-2
<PAGE>
SECTION 3
Condition of Premises
Section 3.1. Condition of Premises. Tenant agrees to accept the Premises in
its present "as is" condition, except as otherwise set forth herein. Landlord
shall have no obligation to perform any work or construction other than as set
forth on Exhibit C, or as expressly set forth in this Lease. If Tenant shall
desire to perform any other work or construction, the same shall be done only in
accordance with this Lease.
SECTION 4
Fixed Rent
Section 4.1. The Fixed Rent. Tenant shall pay rent to Landlord at the
Address of Landlord' or at such other place or to such other person or entity as
Landlord may by notice to Tenant from time to time direct, at the Annual Fixed
Rental Rate set forth in Section 1, in equal installments equal to one-twelfth
(1/12) of the Annual Fixed Rental Rate in advance on the first day of each
calendar month included in the term, and for any portion of a calendar month at
the beginning or end of the term, at that rate payable in advance for such
portion.
SECTION 5
Real Estate and Other Taxes
Section 5.1. Real Estate Taxes. Landlord shall pay all real estate taxes
and water and sewer charges assessed to the Building, Lot or Premises. Tenant
shall use water only for personal sanitary uses and not for any industrial
process.
SECTION 6
Insurance
Section 6.1. Tenant's Insurance. Tenant shall maintain throughout 'the Term
the following insurance:
(a) comprehensive general liability insurance for any injury to person or
property occurring on the Premises, naming as insureds Tenant, Landlord and such
persons, including, without limitation, Landlord's managing agent, as Landlord
shall designate from time to time, in amounts which shall, at the beginning of
the Term, be equal to the limits set forth in Section 1, and, from time to time
during the term, shall be for such higher limits as are reasonably required by
Landlord based upon industry standards; and
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<PAGE>
(b) worker's compensation insurance with statutory limits covering all
Tenant's employees working at the Premises.
Section 6.2. Landlord's Insurance. Landlord shall maintain throughout the
Term the following insurance:
(a) comprehensive general liability insurance for any injury to person or
property occurring in the common areas of the Lot or Building, in such amounts
and with such deductibles as Landlord may reasonably consider appropriate based
upon industry standards;
(b) all risk fire and casualty insurance on a replacement value, agreed
amount basis, together with rental loss coverage and, insuring the Building and
its rental value, with such deductibles, if any, as Landlord shall reasonably
consider appropriate based upon industry standards; and
(c) at Landlord's option, insurance against loss or damage from sprinklers
and from leakage or explosions or cracking of boilers, pipes carrying steam or
water, or both, pressure vessels or similar apparatus, in the so-called "broad
form," in such amounts and with such deductibles as Landlord may consider
appropriate, and insurance against such other hazards and in such amounts as may
from time to time be required by any bank, insurance company or other lending
institution holding a mortgage on the Building.
Section 6.3. Tenant Reimbursement of Insurance Taken Out by Landlord.
Tenant shall reimburse Landlord for all of Landlord's costs incurred in
providing such insurance to the extent attributable to any special endorsement
or increase in premium resulting from the business or operations of Tenant or
any special or extraordinary hazards resulting therefrom.
Section 6.4. Requirements Applicable to Insurance Policies. All policies
for insurance required under the provisions of Section 6.1 shall be obtained
from responsible companies qualified to do business in the Commonwealth of
Massachusetts and in good standing therein, which companies and the amount of
insurance allocated thereto shall be subject to Landlord's approval. Each party
agrees to furnish the other with insurance company certificates of all such
insurance and copies of the policies therefor prior to the beginning of the Term
hereof and of each renewal policy at least thirty (30) days prior to the
expiration of the policy it renews. Each such policy shall be non-cancellable
with respect to the interest of Landlord and Tenant and such mortgagees without
at lease thirty (30) days' prior written notice thereto.
Section 6.5. Waiver of Subrogation. All insurance which is carried by
either party with respect to the Premises or to furniture, furnishings, fixtures
or equipment therein or alterations or improvements thereto, whether or not
required hereunder, shall
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include provisions which either designate the other party as one of the insureds
or deny to the insurer acquisition by subrogation of rights of recovery against
the other party to the extent such rights have been waived by the insured party
prior to occurrence of loss or injury to the extent that such provisions may be
effective without making it impossible to obtain insurance coverage from
responsible companies qualified to do business in the Commonwealth of
Massachusetts (even though extra premium may result therefrom) and without
voiding the insurance coverage in force between the insurer and the insured
party. On reasonable request, each party shall be entitled to have duplicates or
certificates of policies containing such provisions. Each party hereby waives
all rights of recovery against the other for loss or injury against which the
waiving party is protected by insurance containing such provisions, reserving,
however, any rights with respect to any excess of loss or injury over the amount
recovered by such insurance.
SECTION 7
Utilities; Maintenance Expenses
Section 7.1. Utilities. Tenant shall pay all charges for utilities which
are separately metered to Tenant, including gas, electricity and telephone.
Section 7.2. Maintenance Expenses. To the extent repairs or replacements
covered by Section 9.1 are required due to Tenant's negligence or willful
misconduct, Landlord shall effect such repairs or replacements at Tenant's sole
expense.
SECTION 8
(OMITTED)
SECTION 9
Landlord's Covenants
Section 9.1. Building Maintenance. Subject to Sections 10 and 11, Landlord
shall maintain and repair at its sole cost the exterior walls, glass and doors,
water tight integrity of the roof, foundation, structural supports of the
Building and, shall be responsible for the replacement and repair of the
Building heating, plumbing, electrical, air conditioning and mechanical systems,
if required.
Section 9.2. Common Area Maintenance. Subject to Sections 10 and 11,
Landlord shall maintain and repair at its sole cost the common areas of the
Building, if any, and common areas on the Lot, including parking, and shall
clean and provide snowplowing for the same.
Section 9.3. Protective Covenants. To the best knowledge of Landlord, as of
the date hereof, the Building complies with the Protective Covenants of the Lord
Timothy Dexter Industrial Green, Newburyport, Massachsuetts, recorded with the
Essex South District Registry of Deeds in Book 5638, Page 428.
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SECTION 10
Tenant's Covenants
Section 10.1. Use. Tenant shall use the Premises only for the Permitted
Uses and shall from time to time procure all licenses and permits necessary
therefor at Tenant's sole expense.
Section 10.2. Repair and Maintenance. Except as otherwise provided in
Sections 9 and 11, Tenant shall keep the Premises, including all plumbing,
electrical heating, air conditioning and other systems therein, in good order,
condition and repair and in at least as good order, condition and repair as they
are in on the Commencement Date or may be put in during the term, reasonable use
and wear and damage by casualty excepted. Tenant shall make all ordinary
repairs, the provisions of this Section shall not, however, require Tenant to
replace plumbing, electrical, heating, air conditioning and other systems unless
such replacement is caused by the Tenant's negligence or willful misconduct.
Tenant shall keep in a safe, secure and sanitary condition all trash and rubbish
temporarily stored at the Premises and shall arrange for and be responsible for
all of the costs of a dumpster and trash and rubbish removal service in
connection with Tenant's use of the Premises. Tenant shall remove snow and ice
from walkways and entrances to the Premises.
Section 10.3. Compliance with Law and Insurance Requirements. Tenant shall
make all repairs, alterations, additions or replacements to the Premises
required by any law or ordinance or any order or regulation of any public
authority arising from Tenant's use of the Premises and shall keep the Premises
equipped with all safety appliances so required. Tenant shall not dump, flush,
or in any way introduce any hazardous substances or any other toxic substances
into the septic, sewage or other waste disposal system serving the Premises, or
generate, store or dispose of hazardous substances in or on the Premises or
dispose of hazardous substances from the Premises to any other location without
the prior written consent of Landlord and then only in compliance with the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss.6901 et seq., the
Massachusetts Hazardous Waste Management Act, M.G.L. c.21C, the Massachusetts
Oil and Hazardous Material Release Prevention and Response Act, M.G.L. c.21E,
and all other applicable codes, regulations, ordinances and laws. Tenant shall
notify Landlord of any incident which would require the filing of a notice under
Chapter 232 of the Acts of 1982 and shall comply with the orders and regulations
of all governmental authorities with respect to zoning, building, fire, health
and other codes, regulations, ordinances or laws applicable to the Premises.
"Hazardous substances" as used in this Section shall mean "hazardous substances"
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss.9601 et seq. and regulations adopted
pursuant to such Act.
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Landlord may, if it so elects, after notice to Tenant (except in an
emergency) make any of the repairs, alterations, additions, or replacements
referred to in this Section 10.3 for which Tenant is responsible which affect
the Building structure or the Building systems, and Tenant shall reimburse
Landlord for the cost thereof on demand.
Tenant will provide Landlord, from time to time upon Landlord's request,
with all records and information regarding any hazardous substance maintained on
the Premises by Tenant.
Landlord shall have the right, upon reasonable prior notice, to make such
inspections as Landlord shall reasonably elect from time to time to determine if
Tenant is complying with this Section.
Tenant shall cooperate with the reasonable recommendations of any insurer,
which may be applicable to the Premises by reason of Tenant's use thereof. In no
event shall any activity be conducted by Tenant on the Premises which may give
rise to any cancellation of any insurance policy or make any insurance
unobtainable.
Section 10.4. Tenant's Work. Tenant shall not make any installations,
alterations, additions or improvements in or to the Premises, including, without
limitation, any apertures in the walls, partitions, ceilings or floors, without
on each occasion obtaining the prior written consent of Landlord, which shall
not be unreasonably withheld, conditioned or delayed. Any such work so approved
by Landlord shall be performed only in accordance with plans and specifications
therefor approved by Landlord. Tenant shall procure at Tenant's expense all
necessary permits and licenses before undertaking any work on the Premises and
shall perform all such work in a good and workmanlike manner employing materials
of good quality and so as to conform with all applicable zoning, building, fire,
health and other codes, regulations, ordinances and laws and with all applicable
insurance requirements. Tenant shall keep the Premises at all times free of
liens for labor and materials. Tenant shall employ for such work only
contractors reasonably acceptable to Landlord and shall require all contractors
employed by Tenant to carry workers' compensation insurance in accordance with
statutory requirements and comprehensive public liability insurance covering
such contractors on or about the Premises in amounts that at least equal the
limits set forth in Section 1 and to submit certificates evidencing such
coverage to Landlord prior to the commencement of such work. Tenant shall save
Landlord harmless and indemnified from all injury, loss, claims or damage to any
person or property occasioned by or growing out of such work. Landlord may
inspect the work of Tenant at reasonable times and give notice of observed
defects.
Section 10.5. Indemnity. Tenant shall defend, with counsel reasonably
acceptable to Landlord, all actions against Landlord, any partner, trustee,
stockholder, officer, director, employee or beneficiary of Landlord, holders of
mortgages secured by the Building and any other party having an interest in the
Premises ("Indemnified
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Parties") with respect to, and shall pay, protect, indemnify and save harmless,
to the extent permitted by law, all Indemnified Parties from and against, any
and all liabilities, losses, damages, costs, expenses (including reasonable
attorneys' fees and expenses), causes of action, suits, claims, demands or
judgments of any nature arising during the term of this Lease from (a) injury to
or death of any person, or damage to or loss of property, occurring in the
Premises or connected with the use, condition or occupancy of any thereof unless
caused by the negligence of Landlord or its servants or agents, (b) violation of
this Lease by Tenant or (c) any act, fault, omission, or other misconduct of
Tenant or its agents, contractors, licensees, sublessees or invitees.
Landlord shall hold Tenant harmless and defend Tenant, any stockholder,
officer, director or employee of Tenant, from and against any and all losses,
damages, claims, or liability for any damage to any property or injury, illness
or death of any person occurring in, on, or about the Premises, Building and
Lot, when such damage, injury, illness or death shall be caused by the
negligence or willful misconduct of Landlord, its agents, servants, employees,
invitees or licensees and failure by Landlord to perform, fulfill or observe any
covenant of Landlord hereunder.
Section 10.6. Landlord's Right to Enter. Tenant shall permit Landlord and
its agents to enter into the Premises at reasonable times and upon reasonable
notice to examine the Premises, make such repairs and replacements as Landlord
may elect, without however any obligations to do so, or show the Premises to
prospective purchasers and lenders, and, during the last year of the term, to
show the Premises to prospective tenants and to keep affixed in suitable places
notices of availability of the Premises. Landlord agrees not to unreasonably
interfere with Tenant's use and occupancy of the Premises.
Section 10.7. Personal Property at Tenant's Risk. All furnishings,
fixtures, equipment, effects and property of every kind of Tenant and of all
persons claiming by, through or under Tenant which may be on the Premises shall
be at the sole risk and hazard of Tenant and if the whole or any part thereof
shall be destroyed or damaged by fire, water or otherwise, or by the leakage or
bursting of water pipes, steam pipes or other pipes, by theft or from any other
cause, no part of such loss or damage shall be charged to or to be borne by
Landlord, unless due to Landlord's negligence or misconduct, and provided
further that Landlord shall in no event be indemnified or held harmless or
exonerated from any liability to Tenant for any injury, loss, damage or
liability not covered by Tenant's insurance to the extent prohibited by law.
Tenant shall insure Tenant's personal property.
Section 10.8. Yield Up. At the expiration of the term or earlier
termination of this Lease, Tenant shall surrender all keys to the Premises,
remove all of its trade fixtures and personal property in the Premises, remove
such installations and improvements made by Tenant as Landlord may request
(other than as set forth on Exhibit C)
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and all Tenant's signs wherever located, repair all damage caused by such
removal and yield up the Premises (including all installations and improvements
made by Tenant except for trade fixtures and such installations or improvements
made by Tenant as Landlord shall request Tenant to remove) broom-clean and in
the same good order and repair in which Tenant is obliged to keep and maintain
the Premises under this Lease. Any property not so removed shall be deemed
abandoned and may be removed and disposed of by Landlord in such manner as
Landlord shall determine and Tenant shall pay Landlord the entire cost and
expense incurred by it in effecting such removal and disposition and in making
any incidental repairs and replacements to the Premises and for use and
occupancy during the period after the expiration of the term and prior to
Tenant's performance of its obligations under this Section 10.8.
Section 10.9. Estoppel Certificate. Upon not less than ten (10) business
days' prior notice from either party, the other party shall execute, acknowledge
and deliver a statement in writing certifying that this Lease is unmodified and
in full force and effect and that, except as stated therein, the party has no
knowledge of any defenses, offsets or counterclaims under this Lease (or, if
there have been any modifications that the same is in full force and effect as
modified and stating the modifications and, if there are any defense, offsets or
counterclaims, setting them forth in reasonable detail), the dates to which the
Fixed Rental and Additional Rent and other charges have been paid and a
statement that the other party is not in default hereunder (or if in default,
the nature of such default, in reasonable detail). Any such statement delivered
pursuant to this Section 10.9 may be relied upon by any prospective purchaser or
mortgagee of the Building.
Section 10.10. Rules and Regulations. Tenant shall comply with such
reasonable Rules and Regulations as may be adopted from time to time by Landlord
to provide for the beneficial operation of the Lot and Building. All such Rules
and Regulations shall be uniformly applied and enforced against all tenants and
other occupants.
Section 10.11. Holding Over. Tenant shall vacate the Premises immediately
upon the expiration or sooner termination of this Lease. If Tenant shall retain
possession of the Premises or any part thereof after the termination of the term
without Landlord's express consent, Tenant shall pay Landlord rent at 150% of
the monthly rate specified in Section 1 for the time Tenant so remains in
possession. The provisions of this Section shall not exclude Landlord's rights
of reentry or any other right hereunder, including, without limitation, the
right to refuse 150% the monthly rent and instead to remove Tenant through
summary proceedings for holding over beyond the expiration of the term of this
Lease.
Section 10.12. Assignment and Subletting. Tenant shall not assign,
transfer, mortgage or pledge this Lease or grant a security interest in Tenant's
rights hereunder or sublease (which term shall be deemed to include the granting
of concessions and
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licenses and the like) all or any Part of the Premises or suffer or permit this
Lease or the leasehold estate hereby created or any other rights arising under
this Lease to be assigned, transferred or encumbered, in whole or in part,
whether voluntarily, involuntarily or by operation of law, or permit the
occupancy of the Premises by anyone other than Tenant. Any attempted assignment,
transfer, mortgage, pledge, grant of security interest, sublease or other
encumbrance, except with prior written approval thereof from Landlord, shall be
void. No assignment, transfer, mortgage, grant of security interest, sublease or
other encumbrance, whether or not approved, and no indulgence granted by
Landlord to any assignee or sublessee, shall in any way impair the continuing
primary liability (which after an assignment shall be joint and several with the
assignee) of Tenant hereunder, and no approval in a particular instance shall be
deemed to be a waiver of the obligation to obtain Landlord's approval in any
other case.
If for any assignment or sublease, Tenant shall receive rent or other
consideration, either initially or over the term of the assignment or sublease,
in excess of the rent called for hereunder (or in the case of the sublease of
part, in excess of such rent allocable to the part) after appropriate
adjustments to assure that all other payments called for hereunder are taken
into account, Tenant shall pay to Landlord, as Additional Rent, fifty percent
(50%) of such excess of such payment of rent or other consideration received by
Tenant, promptly after its receipt.
Notwithstanding anything in this Lease to the contrary, Tenant shall have
the right at any time, without the consent of Landlord, to assign this Lease
where the assignee is a parent or wholly-owned subsidiary of Tenant, or a
wholly-owned subsidiary of the parent of Tenant, or any entity resulting from a
merger or consolidation with Tenant or any person or entity who or which owns or
controls a beneficial interest in the stock of Tenant or is owned or controlled
by one or more persons or entities who or which own or control such an interest,
provided that (i) prior to its effective date, Tenant shall furnish to Landlord
an assumption agreement executed by the Assignee in which such Assignee agrees
to assume and perform the terms, covenants and conditions of this Lease that are
the obligations of Tenant and (ii) such Assignee shall only use the Premises for
the Permitted Uses in Section 1.1 hereunder and for no other uses. In addition,
without limiting in any way the generality of the foregoing, nothing contained
in this Lease is intended to affect in any way the right of Tenant or any
stockholder of Tenant (without the consent of Landlord) to engage in the public
offering of any amount of Tenant's stock, or a private offering, sale or
transfer or encumbrance of less than the controlling interest in said stock, or
a transfer by reason of death of incompetence of any amount of said stock, or
sale or transfer from one of Tenant's current stockholders to any person or
entity who or which owns or controls a beneficial interest in the stock of
Tenant or is owned or controlled by one or more persons or entites who or which
own or control such an interest of any amount of said stock.
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Section 10.13. Overloading and Nuisance. Tenant shall not injure, overload,
deface or otherwise harm the Premises, commit any nuisance, permit the emission
of any objectionable noise, vibration or odor, or make, allow or suffer any
waste.
SECTION 11
Casualty or Taking
Section 11.1. Termination. In the event that greater than twenty-five
percent (25%) of the Premises or the Building or the Lot shall be taken by any
public authority or for any public use or destroyed by the action of any public
authority (a "Taking") then this Lease may be terminated by either Landlord or
Tenant effective on the effective date of the Taking. In the event that the
Premises shall be destroyed or damaged by fire or casualty (a "Casualty") and if
Landlord's architect, engineer or contractor shall reasonably determine that it
will require in excess of one hundred eighty (180) days from the date of the
Casualty to restore the Premises, this Lease may be terminated by either
Landlord or Tenant by notice to the other within thirty (30) days after the
casualty. In the case of a Taking, such election, which may be made
notwithstanding the fact that Landlord's entire interest may have been divested,
shall be made by the giving of notice by Landlord or Tenant to the other within
thirty (30) days after Landlord or Tenant, as the case may be, shall receive
notice of the Taking.
Section 11.2. Restoration. In the event of a Taking or a Casualty, if
neither Landlord nor Tenant exercises the election to terminate provided in
Section 11.1, this Lease shall continue in force and a just proportion of the
Fixed Rent and other charges hereunder, according to the nature and extent of
the damages sustained by the Premises, shall be abated until the Premises, or
what may remain thereof, shall be put by Landlord in proper condition for use
subject to zoning and building laws or ordinances then in existence, which,
unless Landlord or Tenant has exercised its option to terminate pursuant to
Section 11.1, Landlord covenants to do with reasonable diligence at Landlord's
expense. Notwithstanding the foregoing, if for any reason Landlord has not
completely restored the premises for Tenant's occupancy within 180 days of the
casualty or taking, Tenant shall have the right to terminate this Lease.
Section 11.3. Award. Irrespective of the form in which recovery may be had
by law, all rights to damages or compensation shall belong to Landlord in all
cases. Tenant hereby grants to Landlord all of Tenant's rights to such damages
and compensation and covenants to deliver such further assignments thereof as
Landlord may from time to time request, except for any relocation benefits,
damages for Tenant's leasehold improvements, and damages to Tenant's business
which might be awarded to Tenant separately by the taking authority.
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SECTION 12
Default
Section 12.1. Events of Default. If
(a) Tenant shall default in the performance of any of its obligations to
pay the Fixed Rental, or any other sum payable hereunder and if such default
shall continue for ten (10) days after written notice from Landlord designating
such default;
(b) within thirty (30) days after notice from Landlord to Tenant specifying
any other default or defaults Tenant has not commenced diligently to correct the
default or defaults so specified or has not thereafter diligently pursued such
correction to completion;
(c) any assignment for the benefit of creditors shall be made by Tenant;
(d) Tenant's leasehold interest shall be taken on execution or other
process of law in any action against Tenant;
(e) a lien or other involuntary encumbrance is filed against Tenant's
leasehold interest and is not discharged within forty-five (45) days thereafter;
(f) a petition is filed by Tenant for liquidation, or for reorganization or
an arrangement or for any other relief under any provision of the Bankruptcy
Code as then in force and effect; or
(g) an involuntary petition under any of the provisions of the Bankruptcy
Code is filed against Tenant and such involuntary petition is not dismissed
within seventy (70) days thereafter, then, and in any of such cases, Landlord
and the agents and servants of Landlord lawfully may, in addition to and not in
derogation of any remedies for any preceding breach of covenant, immediately or
at any time thereafter and without demand or notice and with process of law
enter into and upon the Premises or any part thereof in the name of the whole,
or mail a notice of termination addressed to Tenant, and repossess the same as
of Landlord's former estate and expel Tenant and those claiming through or under
Tenant and remove its and their effects without being deemed guilty of any
manner of trespass and without prejudice to any remedies which might otherwise
be used for arrears of rent or prior breach of covenant, and upon such entry or
mailing as aforesaid this Lease shall terminate. Landlord, without notice to
Tenant, may store Tenant's effects, and those of any person claiming through or
under Tenant at the expense and risk of Tenant, and, if Landlord so elects, may
sell such effects at public auction or private sale and apply the net proceeds
to the payment of all sums due to Landlord from Tenant, if any, and pay over the
balance, if any, to Tenant.
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Section 12.2. Remedies. In the event that this Lease is terminated under
any of the provisions contained in Section 12.1, Tenant shall pay forthwith to
Landlord, as compensation, the excess of the total rent reserved for the residue
of the Term over the fair market rental value of the Premises for the residue of
the term, discounted to present value. As additional and cumulative obligations
after any such termination, Tenant shall also pay punctually to Landlord all the
sums and shall perform all the obligations which Tenant covenants in this Lease
to pay and to perform in the same manner and to the same extent and at the same
time as if this Lease had not been terminated. In calculating the amounts to be
paid by Tenant pursuant to the preceding sentence, Tenant shall be credited with
any amount paid to Landlord pursuant to the first sentence of this Section 12.2
and also with the net proceeds of any rent obtained by Landlord by reletting the
Premises, after deducting all Landlord's reasonable expenses in connection with
such reletting, including, without limitation, all repossession costs, brokerage
commissions, fees for legal services and expenses of preparing the Premises for
such reletting, it being agreed by Tenant that Landlord may (a) relet the
Premises or any part or parts thereof for a term or terms which may at
Landlord's option be equal to or less than or exceed the period which would
otherwise have constituted the balance of the term hereof and may grant such
concessions and free rent as Landlord in its reasonable judgment considers
advisable or necessary to relet the same and (b) make such alterations, repairs
and decorations in the Premises as Landlord in its reasonable judgment considers
advisable or necessary to relet the same, and no action of Landlord in
accordance with the foregoing or failure to relet or to collect rent under
reletting shall operate or be construed to release or reduce Tenant's liability
as aforesaid.
Section 12.3. Remedies Cumulative. Except as otherwise expressly provided
herein, any and all rights and remedies which Landlord may have under this Lease
and at law and equity shall be cumulative and shall not be deemed inconsistent
with each other, and any two or more of all such rights and remedies may be
exercised at the same time to the greatest extent permitted by law.
Section 12.4. Right to Cure Defaults. At any time following ten (10) days'
prior notice to Tenant (except in cases of emergency when no notice shall be
required), Landlord may (but shall not be obligated to) cure any default by
Tenant under this Lease, and whenever Landlord so elects, all costs and expenses
incurred by Landlord, including reasonable attorneys' fees, in curing a default
shall be paid by Tenant to Landlord as Additional Rent on demand, together with
interest thereon at the rate provided in Section 12.7 from the date incurred by
Landlord to the date of payment by Tenant.
In the event that Landlord fails to perform any of its obligations
hereunder after ten (10) days' notice from Tenant to Landlord or such additional
time not to exceed forty-five (45) days in the event within said ten (10) days,
Landlord commences and diligently proceeds to complete such obligations, then
Tenant shall have the right, but not
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the obligation, at any time thereafter, to perform Landlord's obligations and
charge back the reasonable costs thereof to Landlord and if such amount is not
paid within thirty (30) days after demand is made by Tenant to Landlord, then
Tenant shall thereafter have the right to deduct such amount against further
rent due under this Lease.
Notwithstanding the foregoing, in the event such matter is an emergency, an
apparent emergency or materially and adversely impacts the ability of Tenant to
use and occupy the Premises for the purposes contemplated hereunder then in such
event Tenant shall not be required to provide such notice or allow Landlord such
grace period and all of the proceeding provisions shall apply, provided,
however, Tenant shall use diligent and good faith efforts to notify Landlord as
soon as reasonably practical.
Section 12.5. Effect of Waivers of Default. Any consent or permission by
Landlord to any act or omission which otherwise would be a breach of any
covenant or condition herein, or any waiver by Landlord of the breach of any
covenant or condition herein, or any waiver by Landlord of the breach of any
covenant or condition herein, shall not in any way be held or construed (unless
expressly so declared) to operate so as to impair the continuing obligation of
any covenant or condition herein, or otherwise operate to permit the same or
similar acts or omissions except as to the specific instance. The failure of
Landlord to seek redress for violation of, or to insist upon the strict
performance of, any covenant or condition of this Lease shall not be deemed a
waiver of such violation nor prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation. The receipt by Landlord of rent with knowledge of the breach
of any covenant of this Lease shall not be deemed to have been a waiver of such
breach by Landlord or of any of Landlord's remedies on account thereof,
including its right of termination for such default.
Section 12.6. No Accord and Satisfaction. No acceptance by Landlord of a
lesser sum than the Fixed Rental, or any other charge then due shall be deemed
to be other than on account of the earliest installment of such rent or charge
due, unless Landlord elects by notice to Tenant to credit such sum against the
most recent installment due. Any endorsement or statement on any check or any
letter accompanying any check or payment as rent or other charge shall not be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such installment
or pursue any other remedy under this Lease or otherwise.
Section 12.7. Interest on Overdue Sums. If Tenant shall fail to pay Fixed
Rental, or any other sum payable by Tenant to Landlord by the due date thereof
(i.e., the due date disregarding any requirement of notice from Landlord or any
period of grace allowed to Tenant), the amount so unpaid shall bear interest at
a variable rate (the "Delinquency Rate") equal to four percent (4%) in excess of
the base rate (prime rate) of The First National Bank of Boston from time to
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time in effect commencing with the due date and continuing through the day on
which payment of such delinquent payment with interest thereon is paid. If such
rate is in excess of any maximum interest rate permissible under applicable law,
the Delinquency Rate shall be the maximum interest rate permissible under
applicable law.
SECTION 13
Mortgages
Section 13.1. Rights of Mortgage Holders. No Fixed Rental, or any other
charge shall be paid more than thirty (30) days prior to the due date thereof
and payments made in violation of this provision shall (except to the extent
that such payments are actually received by a mortgagee in possession or in the
process of foreclosing its mortgage) be a nullity as against such mortgagee and
Tenant shall be liable for the amount of such payments to such mortgagee.
In the event of any act or omission by Landlord which would give Tenant the
right to terminate this Lease or to claim a partial or total eviction, Tenant
shall not exercise any such right (a) until it shall have given notice, in the
manner provided in Section 14.1, of such act or omission to the holder of any
mortgage encumbering the Premises whose name and address shall have been
furnished to Tenant in writing, at the last address so furnished, and (b) until
a reasonable period of time for remedying such act or omission shall have
elapsed following the giving of such notice, provided that following the giving
of such notice, Landlord or such holder shall, with reasonable diligence, have
commenced and continued to remedy such act or omission or to cause the same to
be rendered.
In the event any proceedings are brought for the foreclosure of, or in the
event of exercise of the power of sale under, any mortgage now or hereafter
encumbering the Premises, Tenant shall attorn to the purchaser upon such
foreclosure or sale or upon any grant of a deed in lieu of foreclosure and
recognize such purchaser as Landlord under this Lease.
Section 13.2. Superiority of Lease; Option to Subordinate. Unless Landlord
exercises the option set forth below in this Section 13.2, this Lease shall be
superior to and shall not be subordinate to any mortgage on the Premises.
Landlord shall have the option to subordinate this Lease to any mortgage of the
Premises provided that the holder of record thereof shall enter into an
agreement with Tenant, in such holder's customary form by the terms of which
such holder shall agree to (a) recognize the rights of Tenant under this Lease,
(b) perform Landlord's obligations hereunder arising after the date of such
holder's acquisition of title and (c) accept Tenant as tenant of the Premises
under the terms and conditions of this Lease in the event of acquisition of
title by such holder through foreclosure proceedings or otherwise and Tenant
shall agree to recognize the
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holder of such mortgage as Landlord in such event, which agreement shall be made
expressly to bind and inure to the benefit of the successors and assigns of
Tenant and of the holder and upon anyone purchasing the Premises at any
foreclosure sale. Tenant agrees to execute and deliver any appropriate and
reasonable instruments necessary to carry out the agreements contained in this
Section 13.2.
Landlord shall use best efforts to obtain a nondisturbance and attornment
agreement from the Newburyport Five Cents Savings Bank, holder of the mortgage
on the property.
SECTION 14
Miscellaneous Provisions
Section 14.1. Notices From One Party to the Other. All notices required or
permitted hereunder shall be in writing and addressed, if to Tenant, at the
Original Address of Tenant or such other address as Tenant shall have last
designated by notice in writing to Landlord and, if to Landlord, at the Original
Address of Landlord or such other address as Landlord shall have last designated
by notice in writing to Tenant. Any notice shall be deemed duly given when
delivered or tendered for delivery at such address, or mailed, certified mail,
postage prepaid.
Section 14.2. Quiet Enjoyment. Landlord agrees that upon Tenant's paying
the rent and performing and observing the terms, covenants, conditions and
provisions on its part to be performed and observed, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises during the term without
any manner of hindrance or molestation from Landlord or anyone claiming under
Landlord, subject, however, to the terms of this Lease.
Section 14.3. Lease Not to Be Recorded; Notice of Lease. Tenant agrees that
it will not record this Lease. Landlord agrees that, upon the request of Tenant,
he will execute and record a Notice of Lease in form reasonably acceptable to
both parties.
Section 14.4. Bind and Inure; Limitation of Landlord's Liability. The
obligations of this Lease shall run with the land, and this Lease shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The obligations of Landlord shall be binding upon the
assets of Landlord which comprise the Premises but not upon other assets of
Landlord. No individual partner, trustee, stockholder, officer, director,
employee or beneficiary of Landlord shall be personally liable under this Lease
and Tenant shall look solely to Landlord's interest in the Premises in pursuit
of its remedies upon an event of default hereunder, and the general assets of
Landlord and its partners, trustees, stockholders, officers, employees or
beneficiaries of Landlord shall not be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Tenant.
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<PAGE>
Section 14.5. Acts of God. In any case where either party hereto is
required to do any act, delays caused by or resulting from acts of God, war,
civil commotion, fire, flood or other casualty, labor difficulties, shortages of
labor, materials or equipment, government regulations, unusually severe weather,
or other causes beyond such party's reasonable control shall not be counted in
determining the time during which work shall be completed, whether such time be
designated by a fixed date, a fixed time or a "reasonable time," and such time
shall be deemed to be extended by the period of such delay.
Section 14.6. Landlord's Default. Landlord shall not be deemed to be in
default in the performance of any of its obligations hereunder unless it shall
fail to perform such obligations and unless within thirty (30) days after notice
from Tenant to Landlord specifying such default Landlord has not commenced
diligently to correct the default so specified or has not thereafter diligently
pursued such correction to completion. Tenant shall have no right, for any
default by Landlord, to offset or counterclaim against any rent due hereunder,
except as expressly provided in Section 12.4 of this Lease.
Section 14.7. Brokerage. Each party Tenant warrants and represents to the
other that it has had no dealings with any broker or agent in connection with
this Lease and covenants to hold harmless and indemnify the other party from and
against any and all costs, expenses, including attorneys' fees, or liability
arising from any compensation, commissions and charges claimed by any broker or
agent.
Section 14.8. Miscellaneous. This Lease shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts. There are no
prior oral or written agreements between Landlord and Tenant affecting this
Lease.
WITNESS the execution hereof under seal as of the day and year first above
written.
LANDLORD: TENANT: FOILMARK, INC.
/s/ Edward G. Molin By: /s/ Frank J. Olsen, Jr.
- ------------------------------ -----------------------------------
Edward G. Molin , President
By: /s/ Philip Leibel
-----------------------------------
, Treasurer
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<PAGE>
EXHIBIT B
A certain parcel of land situate on the Northwesterly side of Mulliken Way
in Newburyport, Essex County, Massachusetts, being shown as Lot "A" on a plan
entitled "Plan of Land in Newburyport, Mass. as Surveyed for Perko Engineering,
Inc." dated August 24, 1979 by Goodwin-Gallagher Associates, Inc., revised
November 9, 1979 by Port Engineering Associates, Inc. and recorded in Essex
South District Registry of Deeds, Plan Book 155, Plan 97, and bounded and
described as follows:
Beginning at the Southeasterly corner thereof on the Northwesterly line of
said Mulliken Way at a granite monument located 454.57 feet Westerly as measured
along Mulliken Way from the intersection of the Westerly line of Henry Graf, Jr.
Road and the Northerly line of said Mulliken Way and thence running
SOUTHWESTERLY by the Northwesterly line of Mulliken Way along a curve to
the left having a radius of 850 feet, 125.36 feet to a stake, thence continuing
SOUTH 68(degree) 51' 00" West by the Northwesterly line of Mulliken Way
124.64 feet to a granite monument at land now or formerly of Newburyport Area
Industrial Development Corporation, thence turning and running
NORTH 21(degree) 09" West by said land of Newburyport Area Industrial
Development Corporation 442.13 feet to a granite monument at other land of said
Newburyport Area Industrial Development Corporation, thence turning and running
NORTH 68(degree) 35' 27" East by said land of Newburyport Area Industrial
Development Corporation 488.98 feet to a granite monument at other land of said
Newburyport Area Industrial Development Corporation, thence turning and running
SOUTH 06(degree) 40' 45" West by said land of Newburyport Area Industrial
Development Corporation 512.88 feet to a granite monument at said Mulliken Way
and the point of beginning.
Containing 3.79 acres according to said plan.
Subject to a 20 foot wide utility easement along the Northerly boundary
thereof as shown on said plan.
Subject to the covenants set forth in a document entitled "Protective
Covenants, Lord Timothy Dexter Industrial Green, Newburyport, Mass.," recorded
with said Deeds, Book 5638, Page 428, which shall run with the land and bind all
the lots therein, and inure to the benefit of and be enforceable by the
Newburyport Area Industrial Development Corporation and the owner or owners of
any of the lots comprised within said Green, and their respective heirs,
executors, administrators, successors and assigns.
For reference to my title, see deed of Perko Engineering Inc. recorded with
Essex South South District Registry of Deeds in Book 6895, Page 716
Subject to an Easement to the City of Newburyport, dated August 24, 1982,
recorded with Essex South District Registry of Deeds, Book 7059, Page 37, and
shown on Plan recorded with Plan Book 177, Plan 5.
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<PAGE>
EXHIBIT C
Tenant shall purchase and install a portable yard ramp as described in a
proposal from Northland Industrial Truck Co., Inc. dated March 25, 1997,
proposal number S002900-RP, a copy of which is attached hereto and incorporated
herein by reference.
Landlord shall provide all necessary doors and truck bumpers to make the
ramp functional.
Landlord shall pay to Tenant a sum of $5,000.00 to be applied to the cost
of the ramp, upon the delivery and installation of the ramp.
Tenant shall retain ownership of the ramp, and shall remove the same upon
the termination of this Lease.
Tenant shall maintain the ramp and the area immediately adjacent thereto,
including but not limited to snow and ice removal.
E-19
THE SAMIA COMPANIES
COMMERCIAL LEASE
PARKER STREET REALTY TRUST
to
FOILMARK INCORPORATED
Dated: JULY 1, 1997
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<PAGE>
CONTENTS/INDEX
SECTION PAGE
Summary of Basic Terms 3
1 Parties 4
2 Premises 4
3 Term 4
4 Rent
1 Base Rent 4
2 Taxes & Operating Expenses 6
5 Security Deposit 11
6 Utilities 11
7 Use of Leased Premises 12
8 Compliance with laws 13
9 Fire Insurance 13
10 Maintenance of Premises 13
11 Alterations Additions 14
12 Assignment Subleasing 14
13 Subordination & Financial Statements 14
14 Lessor's Access 14
15 Indemnification and Liability 15
16 Lessee's Liability Insurance 15
17 Fire Casualty Eminent Domain 16
18 Default and Bankruptcy 17
19 Notice 18
20 SURRENDER
1. Surrender Possession 18
2. Failure to Surrender Possession 19
21 Parol, Evidence, Execution, Headings 21
22 Additional Provisions 20
Signatures 21
Clerk's Certificate 22
Exhibits
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<PAGE>
SUMMARY OF BASIC TERMS
LEASE
PARKER STREET REALTY TRUST
to
FOILMARK INCORPORATED
DATED: JULY 1, 1997
The following is a summary of certain basic terms of this lease which is
intended for the convenience and reference of the parties:
1. PREMISES : Approximately Five Thousand (5000) square feet of space at
the first (1st) floor together with the right to use in
common with others entitled thereto the stairways, doorways,
hallways and elevators necessary for access as well as
egress.
2. TERM : Commencing on July 1, 1997 for a period of Thirty Six (36)
months.
3. RENT : YEAR I :$23,750.00
YEAR II :$23,750.00 plus CPI.
YEAR III:$23,750.00 plus accumulated CPI.
4. USE : Storage and light assembly of products related to Foilmark's
business.
5. SECURITY
DEPOSIT : $2600.00
6. LAST
MONTH's
RENT : $2600.00
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<PAGE>
COMMERCIAL LEASE
1. PARTIES
Leonard J. Samia, Trustee of Parker Streete Realty Trust under declaration of
trust dated December 12, 1986 and duly recorded with Essex South County Registry
on December 12, 1986 as Instrument # 594 LESSOR, which expression shall include
his heirs, successors and assigns where the context so admits, does hereby lease
unto Foilmark Incorporated LESSEE, presently with a usual place of business at 5
Malcolm Hoyt Drive, Newburyport, Massachusetts its heirs, successors, executors,
assigns, and administrators, where the context so admits.
2. PREMISES
The said LESSEE hereby leases the following described premises, known as, Unit
#1 numbered and situated at the Ground (lst) floor of 50 Parker Street,
Newburyporte, Massachusetts and consisting of approximately Five Thousand
(5000+/-) square feet of unheated space together with the right to use in common
with others entitled thereto, the hallways, stairways, and elevators, necessary
for access to and egress from said premises and the lavatories nearest thereto.
3. TEAM
The term of this lease shall be for Thirty Six (36) months commencing on July 1,
1997 and ending on June 30, 2000.
4. RENT
(1) Base Rent
The LESSEE shall pay as base rent to the LESSOR for the first (1st) year of the
term Twenty Three Thousand Seven Hundred and Fifty ($23,750.00) Dollars, payable
in advance in monthly installments of One Thousand Nine Hundred and Seventy Nine
& 17/100 ($1,979.17 ) Dollars on the first (1st) day of each month.
The LESSEE shall pay as base rent to the LESSOR for the second (2nd) year of the
term Twenty Three Thousand Seven Hundred and Fifty ($23,750.00) Dollars, plus
cpi, payable in advance in monthly installments of One Thousand Nine Hundred and
Seventy Nine &
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<PAGE>
17/100($1979.17) Dollars, plus cpi, on the first (1st) day of each month.
The LESSEE shall pay as base rent to the LESSOR for the third (3rd) Year of the
term Twenty Three Thousand Seven Hundred and Fifty ($23,750.00) Dollars, plus
accumulated cpi, payable in advance in monthly installments of One Thousand Nine
Hundred and Seventy Nine & 17/100($1,979.17) Dollars, plus accumulated cpi, on
the first (am) day of each month.
In the 2nd (second), and 3rd (third), years of the term the annual base rent, as
above stated, will escalate, in addition, by an amount equal to the increase, if
any, in the Consumer Price Index predicated for the Boston Area as promulgated
by the Bureau of Labor Statistics of the United States Department of Labor
(CPI-U). In the event the above mentioned index is discontinued and there is no
replacement index placed in its stead, then the LESSOR shall choose a successor
index which would Yield substantially the same results. The following
instructions will be used in determining the Consumer Price Index (CPI) rental
increase figures for the 2nd (second), and 3rd (third) Years of the term.
For the 2nd (second) Year of the team, more specifically, 7/1/98 to 6/30/99 the
base year will be May 1997. Subtract the (CPI) figure for May 1997 (Base Year)
from the CPI figure for May 1998. Then put the difference of this computation
over the CPI figure for May 1997 (Base Year). Multiply this result by the 1st
(first) year, annual base rent, more specifically $23,750.00 (Twenty Three
Thousand Seven Hundred and Fifty Dollars ), to arrive at the CPI increase figure
for the 2nd (second) year. Finally, add the figure to the annual base rent for
the 1st (first) year, more specifically $23,750.00 (Twenty Three Thousand Seven
Hundred and Fifty Dollars), to arrive at the adjusted annual base rental charge
for the 2nd (second) year of the term.
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<PAGE>
Pay this adjusted annual base rent in the 2nd (second) year.
For the 3rd (third) year of the term, more specifically, 7/1/99 to 6/30/00 the
base year will be May 1997. Subtract the (CPI) figure for May 1997 (Base Year)
from the CPI figure for May 1999. Then put the difference of this computation
over the CPI figure for May 1997 (Base Year). Multiply this result by the 1st
(first) year, annual base rent, more specifically $23,750.00 (Twenty Three
Thousand Seven Hundred and Fifty Dollars), to arrive at the CPI increase figure
for the 3rd (third) year. Finally, add this figure to the annual base rent for
the 1st (first) year, more specifically $23,750.00 (Twenty Three Thousand Seven
Hundred and Fifty Dollars) to arrive at the adjusted annual base rental charge
for the 3rd (third) year of the term. Pay this adjusted annual base rent in the
3rd (third) year.
In no event shall the adjusted annual base rent for any year be less than the
adjusted annual base rent for the prior year.
The LESSOR shall in addition to but not in any way in limitation or diminution
of any and all other remedies both legal, equitable and mixed, be entitled to
assess and collect a late charge of seven per centum (7%) of each and every
and/or any installment of rent herein reserved and provided for and not received
in accordance with the immediately preceding sentences of this section
contained. Provided, however, that LESSEE may make one (l) rental payment late
during each consectuve twelve months of the term without penalty.
(2) Taxes & Operating Expenses
(a) The LESSEE shall pay as additional rent on its proportionate share, more
specifically, (16.67%) Percent before any penalty, interest or cost may be added
thereto for the non-payment thereof, all real estate taxes, assessments, water
rates and water charges, and other governmental levies and charges, general and
special, ordinary and extraordinary, unforeseen as well as foreseen,
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<PAGE>
of any kind, which are assessed upon the leased property or any part thereof, or
become payable during the term of this lease, provided, however, that betterment
assessments, if any, shall be paid only as billed by the Town and LESSOR agrees
that such assessments may be paid over the maximum period allowed by said Town.
Any and all credits or forbearance granted unto LESSOR by any government or
division thereof shall exclusively be and remain the sole property of the
LESSOR. LESSEE will pay to the LESSOR its proportional share of the Real Estate
taxes directly to the LESSOR.
(b) It is the intention of the parties that the LESSOR shall receive the rents,
additional rents, and all sums payable by the LESSOR under this lease free of
all taxes, expenses, charges, damages, and deductions of any nature whatsoever,
and the LESSEE covenants and agrees to pay its pro-rata share, more
specifically, (16.67%) Percent, of all sums chargeable against the leased
property and payable by the LESSOR, including, but not limited to, all
operational expenses, which are associated with, relating to and attributable to
the demised property (except as otherwise specifically provided in this lease).
The LESSEE shall, however, be under no obligation to pay interest on any
mortgage relating to the leased property, and franchise or income tax payable by
the LESSOR, or any gift, inheritance, transfer, estate or succession tax, by
reason of any present or future law which may be enacted during the term of this
lease. LESSOR's operating costs include, but are not limited to, all costs of
any kind paid or incurred by LESSOR in operating, cleaning, equipping,
protecting, lighting, repairing, replacing, heating, air-conditioning, and
maintaining the areas of the building not leased or available for lease to
LESSEE. The costs shall include, but are not limited to, utilities, supplies,
managements fees, janitorial services, employees; wages,
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<PAGE>
social security and unemployment insurance contributions, union benefits,
rubbish removal, snow removal, maintenance and replacement of landscaping, and
premiums for public liability and property damage and fire and extended coverage
insurance. These costs shall include a reasonable reserve for repair and
replacement of equipment used in the maintenance and operation of the building
and all costs except those properly charged as a capital expense and
depreciation of the original cost of construction.
(c) LESSEE agrees to pay all additional rent and operational expenses ("Costs")
as described in subsections 4.2(a) and 4.2(b) above, respectively, as follows:
in or about the first 90 days of each calendar year, all such actual costs for
the previous year will be added together and then divided by twelve to yield
equal monthly installments of estimated costs payable by LESSEE each month; for
12 calendar months, beginning January.**
** See Ehbibit # 1 below attached.
The summation of actual costs will also yield a credit or debit when compared to
the previous year's twelve monthly installments of estimated costs paid by
LESSEE (if any), which credit or debit will be applied to LESSEE's account
forthwith.
(d) Review of Records
(i) Exercise of Right by LESSEE: Provided that LESSEE is not in default
under this lease and provided further that LESSEE strictly complies with
the provisions of this section, LESSEE shall have the right to reasonably
review supporting data for any portion of an Operational Expense Statement
that LESSEE claims is incorrect. In order for LESSEE to exercise its right
under this section, LESSEE shall, within 15 days after any such Operational
Expense Statement is sent, deliver a written notice to LESSOR specifying
the portions of the
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<PAGE>
Operational Expense Statement that are claimed to be incorrect, and LESSEE
shall simultaneously pay to LESSOR all amounts due from LESSEE to LESSOR as
specified in the Operational Expense Statement. Except as expressly set
forth in subsection (iii) below, in no event shall LESSEE be entitled to
withhold, deduct, or offset any monetary obligation of LESSEE to LESSOR
under the lease (including, without limitation, LESSEE's obligation to make
all rental payments and all payments for its share of estimated and actual
Operating Expenses) pending the completion of and regardless of the results
of any review of records under this section. The right of LESSEE under this
section may only be exercised once for any Operational Expense Statement,
and if LESSEE fails to meet any of the above conditions as prerequisite to
the exercise of such right, the right of LESSEE under this section for a
particular Operational Expense Statement shall be deemed waived.
(ii) Procedures for Review: LESSEE acknowledges that LESSOR maintains its
records for the property at its offices, 60 Leo M. Birmingham Parkway,
Brighton, Massachusetts and LESSEE therefore agrees that any review of
records under this section shall occur at such location. Any review to be
conducted under this section shall be at the sole expense of LESSEE and
shall be conducted by an independent firm of certified public accountants.
LESSEE acknowledges and agrees that any records reviewed under this section
constitute confidential information of LESSOR; which shall not be disclosed
to anyone other than the accountants performing the review and the
principals of LESSEE who receive the results of the review. The disclosure
of such information to any other person by the
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<PAGE>
LESSEE is expressly forbidden and shall constitute a material breach of
this lease and LESSOR will seek whatever remedies are available to it in
law and equity upon any such disclosure.
(iii) Finding of Error: Any errors disclosed by the review of records under
this section shall be promptly corrected, provided that LESSOR shall have
the right to cause another review of the records to be made by an
independent firm of certified public accountants. In the event of a
disagreement between the two accounting firms, the review that disclosed
the least amount of deviation from the Operational Expense Statement shall
be deemed to be correct. In the event that the results of the review of
records (taking into account, if applicable, the results of any additional
review caused by LESSOR) reveal that LESSEE has overpaid obligations for a
preceding period, the amount of such overpayment shall be credited against
LESSEE's subsequent installment obligations to pay its share of estimated
Operating Expenses. In the event that such results show that LESSEE has
underpaid its obligations for a preceding period, the amount of such
underpayment shall be paid by LESSEE to LESSOR with the next succeeding
installment obligation of estimated Operating Expenses.
(iv) Effect of LESSEE's Default: In the event that LESSEE becomes in
default of its obligations under this lease at any time (exclusive of
whatever the applicable cure period may be) during the Tendency of a review
of records under this section, said right to review shall immediately cease
and the matters originally set forth in the Operational Expense Statement
shall be deemed to be correct.
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<PAGE>
(e) LESSEE further warrants, covenants and agrees to indemnify the LESSOR on
account of any increases in the latter's yearly comprehensive insurance premiums
occasioned by this lease and/or the LESSEE's occupancy of the demised premises.
(f) LESSEE warrants, covenants, stipulates and incontrovertibly agrees to pay
promptly, but no later than fifteen (15) days after receipt in writing from
LESSOR, all expenses duly associated with the demised property and precisely
incurred and/or accrued during LESSEE's term as stated herein. Furthermore,
LESSEE unconditionally agrees that written notice by LESSOR for each and every
expense is deemed reasonable when LESSOR's notification of said expense(s) is
directed to LESSEE in writing by mail or otherwise during the term as stated
herein, and for a twelve (12) month period thereafter. LESSOR's obligation to
LESSEE regarding notification of said expenses is explicitly limited to
notification in writing and LESSOR does not warrant, covenant, stipulate or
agree that said written notification will occur chronologically with the
occupance of said expenses. Furthermore, if within fifteen (15) days of written
notification, LESSEE fails to defray any duly associated expense as heretofore
stated, then LESSOR will assess and LESSEE agrees to pay a late fee equal to
fifteen (15%) of said billed expense.
5. SECURITY
DEPOSIT
Upon the execution of this lease the LESSEE shall pay unto the LESSOR the amount
of Twenty Six Hundred ($2,600.00) Dollars which shall be held as security for
the LESSEE's full performance as herein provided and refunded to the LESSEE, at
the end of this lease subject to the LESSEE's satisfactory compliance with the
terms and conditions hereof. Upon the execution of this lease the LESSEE shall
pay unto the LESSOR the further sum of Twenty Six Hundred ($2,600.00) Dollars,
as last month's rent.
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<PAGE>
6. UTILITIES
The LESSOR shall provide no additional utilities to the demised space,
furthermore, LESSEE is responsible for the payment of, all utility usage which
is separately metered and associated with the demised space including but not
limited to gas, electricity and water, and its pro-rata share of all utilities
that are not separately metered which service the LESSEE's demised space. LESSOR
reserves the right, during the term of said lease, to meter, separately meter,
and/or sub-meter any and all utilities. LESSEE is to be responsible for all
utility expense associated with the demised space and shall, before taking
possession of said space, have all separately metered utilities associated with
the demised space put into its name for billing.
In the event that the Lessee's utility usage shall be excessive, the Lessor, at
its sole option, shall assess the Lessee an additional fee equal to the amount
of excess utility usage as billed to the Lessor. Excessive usage shall be
defined as follows: (1) Water usage above and beyond normal bathroom and, if
applicable, kitchen usage, based on the number of employees of Lessee shall be
excessive. (2) Gas, Oil, or Electric usage above and beyond that which is
consumed by a similar business occupying approximately the same size premises as
measured in square feet or a proportional amount of a larger space occupied by a
similar business in the same or similar geographic area (i.e. subject to the
same weather patterns) shall be excessive.
7. USE OF LEASED
PREMISES
The LESSEE shall use the leased premises only for the purpose of storage and
light assembly of products related to Foilmark"s business and in conformity with
the laws of the United States of America, the Commonwealth of Massachusetts, the
County of Plymouth and the City of Norwood. The LESSOR makes no representations
or warranties, express or implied or of any nature whatsoever, as regards the
suitability, adaptability or
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<PAGE>
propriety or legality of using the herewith demised premises for the purposes
herein expressed and the LESSEE agrees and covenants that all matters and
controversies relating to such suitability, adaptability, propriety or legality
shall, at LESSOR's option, be the sole responsibility of LESSEE.
8. COMPLIANCE
WITH LAWS
The LESSEE acknowledges that no trade or occupation shall be conducted upon the
leased premises or use made thereof which will be unlawful, improper, noisy,
offensive or contrary to any law or any municipal by-law or ordinance in force
in the City of Newburyport.
Compliance with the barrier removal requirements of the Americans with
Disabilities Act (ADA) Title III within or directly effecting the leased
premises shall be the responsibility of the LESSEE. The LESSEE shall indemnify
the LESSOR against all losses caused by LESSEE'S failure to comply with its
obligations under this lease to be responsible for such compliance.
9. FIRE INSURANCE
The LESSEE shall not permit any use of the leased premises which will make
voidable or increase the premium on or cost of any insurance on the property of
which the leased premises are a part, or on the contents of said property or
which shall be contrary to any law or to any regulation from time to time
established by the New England Fire Insurance Rating Association or any similar
body succeeding to its powers. The LESSEE shall upon demand reimburse the LESSOR
and all other tenants all extra insurance premiums caused by the LESSEE's use of
the premises.
10. MAINTENANCE
OF PREMISES
The LESSEE agrees to maintain the leased premises in the same condition as they
are at the commencement of the term or as they may be put into during the term
of this lease, reasonable wear and tear and damage by fire and other unavoidable
casualty only excepted, and whenever necessary, to replace plate and
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<PAGE>
other glass therein, acknowledging that the leased premises are presently in
good order and the glass whole. LESSEE shall not permit the leased premises to
be overloaded, damaged, stripped or defaced nor shall it suffer any waste.
LESSEE shall obtain the written consent of the LESSOR before erecting any sign
on the premises. LESSOR shall be responsible for maintaining the building's
structure including the roof, exterior walls and flooring structure and the
building's mechanical and electrical systems which serve more than one unit.
LESSEE shall be responsible for the maintenance, repair and replacement of all
electrical, plumbing, heating, air-conditioning, ventilation and other
mechanical installations located entirely on or serving only the demised
premises.
11. ALTERATIONS/
ADDITIONS
The LESSEE shall not make alterations or additions to the leased premises
without the prior written consent which said consent shall not be unreasonably
withheld or delayed.
12. ASSIGNMENT
SUBLEASING
The LESSEE shall not assign or sublet the whole or any part of the leased
premises.
13. SUBORDINATION
& FINANCIAL
STATEMENTS
This lease shall be subject to any and all mortgages, deeds of trust and all
other instruments in the nature of a mortgage, now or at any time hereafter
constituting a lien or liens on the property of which the demised premises are a
part and the LESSEE shall, when requested, promptly execute and deliver such
instruments as shall be necessary to show the subordination of this lease to
said mortgages, deeds of trust or other instruments in the nature of a mortgage;
and shall deliver to LESSOR or LESSOR'S bank upon request a copy of LESSEE's
most recent financial statement if the leased Premises constitutes an amount
greater than or equal to twenty-five (25%) per cent of the total square footage
of the property of which the Premises is a part.
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<PAGE>
14. LESSOR'S ACCESS
The LESSOR or agents of the LESSOR may, in emergency situations and/or at
reasonable times, enter the leased premises, to view premises, and may remove
placards and signs not approved and affixed as herein provided, and to make
repairs and alterations as LESSOR may elect, and to show the premises to others
at any time within ninety (90) days before the expiration of the term or the
tenancy and may affix to any suitable part of the leased premises a notice for
letting or selling the leased premises or the property of which the said leased
premises are a part and to keep the same affixed without hinderance or
molestation.
15. INDEMNIFICATION
AND LIABILITY
The LESSEE shall hold and save the LESSOR harmless from all loss and damage
occasioned by the use or escape of water by the bursting or breaking or leaking
of pipes, as well as from any claim or damage resulting from any neglect in not
removing snow and ice from the sidewalk bordering upon the premises so leased or
by any nuisance made or suffered upon the demised premises or property of which
said leased premises are a part unless such loss is caused by the neglect of
LESSOR. The removal of snow and ice from the sidewalks bordering upon said
demised premises shall be LESSEE's responsibility.
16. LESSEE's
LIABILITY
INSURANCE
The LESSEE shall maintain with respect of the leased premises and the property
of which the leased premises are a part, comprehensive public liability
insurance in the amount of One Million ($1,000,000.00) Dollars together with
property damage insurance including breakage of glass in the amount of Five
Hundred Thousand ($500,000.00) Dollars in responsible companies qualified to do
business within the Commonwealth of Massachusetts and in good standing therein
insuring the LESSOR as well as the LESSEE against injury to persons and property
as provided. The LESSEE shall deposit with the LESSOR certificates of such
insurance at or prior to the commencement
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<PAGE>
of the term hereof and thereafter within thirty (30) days prior to the
expiration of any such policy or policies. Any such insurance shall provide that
such policies shall not be canceled without at least ten (10) days prior written
notice to each assured named therein. The LESSOR shall purchase rent loss
insurance on the property for which the LESSEE shall pay its pro rata share.
17. FIRE CASUALTY
EMINENT DOMAIN
Should a substantial portion of the leased premises or of the property of which
the leased premises are a part be substantially damaged by fire, or other
casualty or be taken by eminent domain, the LESSOR may elect to terminate this
lease. When such fire, casualty or taking renders the leased premises
substantially unsuitable for their intended use, a just and proportionate
abatement of rent shall be made, and the LESSEE may elect to terminate this
lease if:
(a) The LESSOR fails to give written notice within thirty (30) days of intention
to restore the leased premises, or
(b) The LESSOR fails to restore the leased premises to a condition substantially
suitable for their intended use within one hundred twenty (120) days of said
fire, casualty or taking.
The LESSOR reserves and the LESSEE grants to the LESSOR all rights which the
LESSEE may have for damages or injury to the leased premises for any taking by
eminent domain, except for damage to the LESSEE's property, equipment or
fixtures.
LESSOR and LESSEE hereby release each other from any liability or responsibility
to the other or anyone claiming through or under them by way of subrogation or
otherwise for any loss or damage to property caused by fire or any of the
extended coverage or supplementary contract casualties, even if such fire or
other casualty shall have been caused by the fault or negligence of the other
party, or
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<PAGE>
anyone for whom such party may be responsible, provided, however, that this
release shall be applicable and in force and effect only with respect to loss or
damage occurring during such time as the releasor's policies contain a clause or
endorsement to the effect that any such release shall not adversely effect said
policies or prejudice the right of the releaser to recover thereunder. LESSOR
and LESSEE each agree that it will request its insurance carriers to include in
its policies such a clause or endorsement.
18. DEFAULT AND
BANKRUPTCY
In the event that:
(a) The LESSEE shall default in the payment of any installment of rent or other
sum specified herein and/or
(b) The LESSEE shall default in the observance or performance of any other of
the LESSEE's covenants, agreements or obligations hereunder and such default
shall be not corrected within thirty (30) days after written notice thereof
and/or
(c) The LESSEE shall be declared to be bankrupt or insolvent according to law,
or if any assignment shall be made of the LESSEE's property for the benefit of
creditors.
In such event, while such default occurs, the LESSOR shall have the right
thereafter to reenter and take complete possession of the leased premises, to
declare the terms of this tenancy ended and to remove the LESSEE's effects
without prejudice to any remedies which might otherwise be used for arrears of
rent or other default. Any such action by the LESSOR shall not constitute an
acceptance of the LESSEE's surrender of the PREMISES and shall not operate to
release the LESSEE from its obligations for unpaid rent for the remainder of the
term of this lease and additional rent, if any, as set forth hereunder. This
paragraph 18 is intended to
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<PAGE>
contain and be constituted by Lease Termination Provisions as contemplated by
Massachusetts General Laws Chapter 186 Section llA clause (i). The LESSEE shall
be given written notice of its payment obligations by monthly (and other)
statements from the LESSOR by postage prepaid mail, rather than pursuant to the
Notice provisions in Paragraph 19 below; after such statement Notice the LESSEE
shall have the right to a fifteen (15) day cure period which may only be
exercised once during its entire tenancy. If the LESSEE is in default for
nonpayment after exercising its single cure period then the LESSOR may terminate
the tenancy immediately at its sole discretion.
The LESSEE shall indemnify the LESSOR against all loss of rent and other costs
which the LESSOR may incur by reason of such actions during the residue of the
term, including but not limited to: brokers' commissions or fees; and/or
reasonable attorney's fees in instituting, prosecuting or defending any action
or proceeding; and/or clean-up costs. Any such amount paid or obligations
incurred, together with interest, at the rate of six percent (6%) per annum
shall be paid to the LESSOR by the LESSEE as additional rent.
19. NOTICE
Any notice from the LESSOR to the LESSEE relating to the leased premises or to
the occupancy thereof, shall be deemed duly served if left at the leased
premises addressed to the LESSEE or if mailed by registered or certified mail,
return receipt requested, addressed to the LESSEE and postage pre-paid. Any
notice from the LESSEE to the LESSOR relating to the leased premises or to the
occupancy thereof, shall be deemed duly served if mailed to the LESSOR by
registered or certified mail, return receipt requested, postage pre-paid and
addressed to the LESSOR at such an address as the LESSOR may from time to time
and to any time advise in writing. All rent and notices shall be paid and
delivered to the LESSOR at 60 Leo M. Birmingham Parkway, Brighton, Massachusetts
02135.
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<PAGE>
20. SURRENDER
(l) Surrender Possession
The LESSEE shall at the termination or other expiration of this tenancy remove
all of the LESSEE's goods and effects from the leased premises including and
without limiting the generality of the foregoing all signs and lettering affixed
or painted by the LESSEE either inside or outside of the leased premises. The
LESSEE shall deliver to the LESSOR the leased premises and all keys and locks
thereto in the condition they were at the commencement of the term hereof, and
other fixtures connected therewith and all alterations made to or upon the
leased premises, reasonable wear and tear and damage by fire and other
unavoidable casualty only excepted. In the event of the LESSEE's failure to
remove any of the LESSEE's property from the premises, LESSOR is hereby
authorized, without liability to the LESSOR for loss or damage and at the sole
risk of the LESSEE, to remove and store any of the said property at the LESSEE's
expense or to retain the same under the LESSOR's control or to sell at public or
private sale, without notice, any or all of the property not so removed and to
apply the net proceeds of and from said sale to the payment of any sum due
hereunder, or to destroy said property.
(2)Failure to
Surrender
Possession
(a) The parties recognize and agree that the damage to LESSOR resulting from any
failure by LESSEE to timely surrender possession of the premises will be
substantial, will exceed the amount of the monthly installments of the rent
payable hereunder, and will be impossible to measure accurately.
(b) LESSEE therefore agrees that if possession of the premises is not
surrendered to LESSOR upon the Expiration Date or sooner termination of the
lease, in addition to any other rights or remedies LESSOR may have hereunder or
at law, LESSEE shall pay to LESSOR as liquidated damages, for each month
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<PAGE>
and for each portion of any month during which LESSEE holds over in the Premises
after the Expiration Date or sooner termination of this lease, a sum equal to
1 1/2 times the aggregate of that portion of the Base Annual Rent and Additional
Rent that was payable under this lease during the last month of the term.
(c) Nothing herein contained shall be deemed to permit LESSEE to retain
possession of the premises after the Expiration Date or sooner termination of
the lease.
(d) The provisions of this Section shall survive the Expiration Date or sooner
termination of this lease.
21. PAROL EVIDENCE
EXECUTION,
HEADINGS
This lease together with all addenda referred to herein sets forth the entire
understanding and agreement of the parties hereto and cannot be modified or
amended except in a writing duly executed by the respective parties. This lease
is executed as a sealed instrument and in multiple counterparts and all copies
of which are identical and any one of which is deemed to be complete in itself
and may be introduced into evidence or used for any purpose without the
production of any other copy. The headings throughout this lease are used for
the convenience of reference only and in no way shall be held or deemed to
define, limit, explain, describe, modify or add to the interpretation,
construction or meaning of any provision or provisions of this lease.
22. ADDITIONAL
PROVISIONS
(a) The LESSEE herein covenants and agrees to pay LESSOR the sum of Twenty Five
($25.00) Dollars for each and every negotiable instrument tendered as payment
for rent, in part or full, when said negotiable instrument is returned to LESSOR
and contemporaneously with said return effects a debit on the LESSOR's banking
records.
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<PAGE>
(b) LESSEE agrees to provide, solely at its expense, a dumpster or other waste
removal method of a size and type adequate to handle all its waste disposal
needs and to upgrade said disposal system, solely at its expense, as its needs
may, from time to time dictate.
(c) The Lessor shall remove all berm located on or around the raised cement
floor area in the center of the space and install ramps on both ends of this
raised area.
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<PAGE>
IN WITNESS WHEREOF the LESSOR and the LESSEE have hereunto set their hand and
common seal on this _________________ day of ___________________________________
1997.
/s/ Kenneth J. Russo
-------------------------------------
LESSOR - KENNETH J. RUSSO, Agent for
Pembroke Realty Trust and not
Individually
LESSEE: Foilmark Incorporated
By: Joe Olsen , President
/s/ Frank J. Olsen, Jr.
-------------------------------------
Joe Olsen, President
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<PAGE>
CLERK'S CERTIFICATE
The undersigned hereby certifies that ,
is the CLERK of Foilmark Incorporated and that the execution and delivery of the
foregoing by Joe Olsen, President of the Corporation, for, in the name and on
behalf of said Corporation, has been duly authorized by a proper resolution of
the Board of Directors of said Corporation or by a by-law provision, which said
resolution or by-law provision is currently in full force and effect and that
the above signature of Joe Olsen as President of the Corporation is genuine and
that such officer is authorized to execute and deliver the foregoing.
ATTEST: /s/ Carol Robie
-----------------------------
CLERK
DATED:
foillse.txt
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<PAGE>
EXHIBIT #1
SO Parker Street
Actual 1996 Triple Net Costs
Insurance 7,110
Management Fee 8,178
Real Estate Taxes 9,999
Utilities 2,275
Snow Plowing 4,333
Lawn Care 1,648
Maintenance & Repairs 1,569
-------
Total 96 NNN Costs 35,112
Rentable Bldg Sq Ft. 30,000
-------
96 Actual NNN Rate 1.17
Rate Charged During 96 1.12
-------
Added Charge/--Credit for 1996 0.05
=======
NNN RATE FOR 1997 1.12
=======
E-43
------------------------------------------------------
STANDARD FORM OF LOFT LEASE
The Real Estate Board of New York, Inc.
(C) Copyright 1982. All Rights Reserved. L-1/83
Reproduction in whole or in part prohibited.
------------------------------------------------------
AGREEMENT OF LEASE, made as of this day of April 1997, between FAIRCOURT
REALTY CO., a New York general partnership with its principal place of business
located at c/o Finkelstein Realty, Inc., 450 Jericho Tpke., Suite 207, Mineola,
N.Y. 11501 party of the first part, hereinafter referred to as OWNER or
LANDLORD, and FOILMARK MANUFACTURING CORP., a domestic corporation with its
principal place of business located at 40 Melville Park Road, Melville, N.Y.
11747, party of the second part, hereinafter referred to as TENANT,
WITNESSETH: Owner hereby leases to Tenant and Tenant hereby hires from Owner the
building known as 120 Fairchild Avenue, Plainview, New York 11803, containing
approximately 7,298 square feet (as part of an approximately 18,200 sq. ft.
building, as shown on the survey of Harold Bausch dated August 7, 1963, a copy
of which is annexed hereto and made a part hereof as Exhibit "A", and on the
floor plan annexed hereto and made a part hereof as Exhibit "B") for the term of
five (5) years (or until such term shall sooner cease and expire as hereinafter
provided) to commence on the first day of May nineteen hundred and ninety-seven,
and to end on the thirtieth day of April, two thousand and two and both dates
inclusive, at an annual rental rate as provided in paragraph 55 of this Lease
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 June 1, 1997, as provided in paragraph 55 of
this Lease.
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 convenant
as follows:
Occupancy:
1. Tenant shall pay the rent as above and as hereinafter provided.
Use:
2. Tenant shall use and occupy premises for warehouse, office, distribution
and cutting of foil goods provided such use is in accordance with the
Certificate of Occupany for the building, it any, and for no other purpose.
Alterations:
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Subject to the prior written consent of
Owner and to the provisions of this article, Tenant at Tenant's expense, may
make alterations, installations, additions or improvements which are non
structural and which do not affect utility services or plumbing and electrical
lines, in or to the Interior of the demised premises 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 and which insurance will list
Landlord as an additional insured thereon. If any mechanic's lien is filed
against the demised premises, or the building of which the same forms a part,
for work claimed to have been done for, or materials furnished to Tenant,
whether or not done pursuant to this article, the same shall be discharged by
Tenant within thirty days thereafter, at Tenant's expense, by filing the bond
required by law 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 and prior to the expiration of
the lease, at Tenant's expense. Nothing in this Article shall be construed to
give Owner title to or to prevent Tenant's removal of trade fixtures, moveable
office furniture and equipment, but upon removal of any such from the premises
or upon removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the condition
existing prior to installation and repair any damage to the demised premises or
the building due to such removal. All property permitted or required to be
removed, by Tenant at the end of the term remaining in the premises after
Tenant's removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner's property or removed from the premises by Owner, at
Tenant expense.
Repairs:
4. Owner shall maintain and repair roof structure unless any damage thereto
is caused by any act of ommission or commission on the part of the Tenant, its
employees, agents, servants or contractors. However, under no circumstances
shall Landlord be liable for any consequential damages caused on account of
Landlord's obligation to maintain and repair the roof and structure of the
building as aforesaid. Tenant shall, throughout the term of this lease, take
good care of the demised premises including the bathrooms and lavatory
facilities (if the demised premises encompass the entire floor of the building)
and the windows and window frames and, the fixtures and appurtenances therein
and at Tenant's sole cost and expense promptly make all repairs thereto and to
the 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 required by other provisions
of this lease, including Article 6. Tenant shall also repair all damage to the
building and the demised premises caused by the moving of Tenant's fixtures,
furniture or equipment. All the aforesaid repairs shall be of quality or class
equal to the original work or construction. If Tenant fails after ten days
notice, to proceed with due diligence to make repairs required to be made by
Tenant, the same may be made by the 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. 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, alterations, additions
or improvements in or to any portion of the building or the demised premises or
in and to the fixtures, appurtenances or equipment thereof. 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 Loads:
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
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<PAGE>
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 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 hi 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 lime thereafter, be higher than it otherwise would be, then Tenant
shall reimburse Owner, as additional rent hereunder, for that portion of all
fire Insurance premiums thereafter paid by Owner which shall have been charged
because of such failure by Tenant. In any action or proceeding wherein Owner and
Tenant are parties, a schedule or "make-up" or rate for the building or demised
premises issued 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 rates then applicable to said
premises. Tenant shall not place a load upon any floor of the demised premises
exceeding the floor load per square foot area which it was designed to carry and
which is allowed by law. Owner reserves the right to prescribe the weight and
position of all safes, business machines and mechanical equipment. Such
installations shall be placed and maintained by Tenant, at Tenant's expense, in
settings suficient, in Owner's judgement, to absorb and prevent vibration, noise
and annoyance.
Subordination:
7. This lease is subject and subordinate to all ground or underlying leases
and to all mortgages which may now or hereafter affect such leases or the real
property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further 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 execute promptly any certificate that Owner may request.
Property--
Loss, Damage,
Reimburse-
ment, Indemni-
ty:
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
reason whatsoever including, but not limited to Owner's own acts, Owner shall
not be liable for any damage Tenant may sustain thereby and Tenant shall not be
entitled to any compensation therefor nor abatement or diminution of rent nor
shall the same release Tenant from its obligations hereunder nor constitute an
eviction. Tenant shall indemnify and save harmless Owner against and from all
liabilities, obligations, damages, penalties, claims, costs and expenses for
which Owner shall not be reimbursed by insurance, including reasonable
attorney's fees, paid, suffered or incurred as a result of any breach by Tenant,
Tenant's agents, Contractors, employees, invitees, or licensees, of any covenant
or conditon of this lease, or the carelessness, negligence or improper conduct
of the Tenant, Tenant's agents, contractors, employees, invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
sub-tenant, and any agent, contractor, employee, invitee or licensee of any
sub-tenant. In case any action or proceeding is brought against Owner by reason
of any such claim, Tenant, upon written notice from Owner, will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld.
Destruction,
Fire and Other
Casualty:
9. (a) If the demised premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or rendered partially unusable
by fire or other casualty, the damages thereto shall be repaired by and at the
expense of Owner and the rent, until such repair shall be substantially
completed, shall be apportioned from the day following the casualty according to
the part of the premises which is usable. (c) If the demised premises are
totally damaged or rendered wholly unusable by fire or other casualty, then the
rent shall be proportionately paid up to the time of the casualty and
thenceforth shall cease until the date when the premises shall have been
repaired and restored by Owner, subject to 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 to any insurance in its favor before making any claim
against the other party for recovery for loss or damage resulting from fire or
other casualty, and to the extent that such insurance is in force and
collectible and to the extent permitted by law, Owner and Tenant each hereby
releases and waives all right of recovery against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The foregoing
release and waiver shall be in force only if both releasors' insurance policies
contain a clause providing that such a release or waiver shall not invalidate
the insurance. If, and to the extent, that such waiver can be obtained only by
the payment of additional premiums, then the party benefitting from the waiver
shall pay such premium within ten days after written demand or shall be deemed
to have agreed that the party obtaining insurance coverage shall be free of any
further obligation under the provisions hereof with respect to waiver of
subrogation. Tenant acknowledges that Owner will not carry insurance on Tenant's
furniture and or furnishings or any fixtures or equipment, improvements, or
appurtenances removable by Tenant and agrees that Owner will not be obligated to
repair any damage thereto or replace the same. (f) Tenant hereby waives the
provisions of Section 227 of the Real Property Law and agrees that the
provisions of this article shall govern and control in lieu thereof.
Eminent
Domain:
10. If the whole 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.
Electric
Current:
12. 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 which
Tenant is obligated to perform under this lease, or for the purpose of complying
with laws, regulations 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, 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 entry may be necessary or permissible by master key or forcibly and
provided reasonable care is exercised to safeguard Tenant's property, such entry
shall not render Owner or its agents liable therefor, nor in any event shall the
obligations of Tenant hereunder be affected. If during the last month of the
term Tenant shall have removed all or substantially all of Tenant's property
therefrom, Owner may immediately enter, alter, renovate or redecorate the
demised premises without limitation or abatement of rent, or incurring liability
to Tenant for any compensation and such act shall have no effect on this lease
or Tenant's obligations hereunder.
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<PAGE>
Vault,
Vault Space,
Area:
14. No Vaults, vault space or area, whether or not enclosed or covered, not
within the property line of the building is leased hereunder, anything contained
in or indicated on any sketch, blue print or plan, or anything contained
elsewhere in this lease to the contrary notwithstanding. Owner makes no
representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, 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, 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. 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 and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be relet by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such re-letting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
Default:
17. (1) If Tenant defaults in fulfilling any of the covenants of this lease
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; or
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 police, to
redeposit with Owner any portion of the security deposited hereunder 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; 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 during such default within such five (5) day period, and
shall not thereafter with reasonable diligence and in good faith, proceed to
remedy or cure such default, then Owner may serve a written three (3) days'
notice of cancellation of this lease upon Tenant, and upon the expiration of
said three (3) days this lease and the term thereunder shall end and expire as
fully and completely as if the expiration of such three (3) day period were the
day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
Owner but Tenant shall remain liable as hereinafter provided.
(2) If the notice provided for in (1) hereof 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 renewal or
extension of this lease, Owner may cancel and terminate renewal or extension
agreement by written notice.
Remedies of
Owner and
Waiver of
Redemption:
18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent, 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 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 higher rental than that in this 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 convenants 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 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 of Owner to collect the deficiency for any
subsequent month by a similar proceeding. Owner, in putting the demised premises
in good order or preparing the same for re-rental may, at Owner's option, make
such alterations, repairs, replacements, and/or decorations in the demised
premises as Owner, in Owner's sole 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 sum
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 particuliar 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 be observed or performed under or by virtue of any of
the terms or provisions in any article of this lease, then, unless otherwise
provided elsewhere in this lease, Owner may immediately or at any time
thereafter and without notice perform the obligation of Tenant thereunder. If
Owner, in connection with the foregoing or in connection with any default by
Tenant in the covenant to pay rent hereunder, makes any expenditures or incurs
any obligations for the payment of money, including but not limited to
attorney's fees, in instituting, prosecuting or defending any action or
proceedings, then Tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs. The foregoing expenses incurred by
reason of Tenant's default shall be deemed to be additional rent hereunder and
shall be paid by Tenant to Owner within five (5) days of rendition of any bill
or statement to Tenant therefor. Tenant's lease term shall have expired at the
time of making of such expenditures or incurring of such obligations, such sums
shall be recoverable by Owner as damages.
Building
Alterations
and
Management:
20. Owner shall have the right at any time without same constituting an
eviction and without incurring liability to Tenant therefor to change the
arrangement and or location of public entrances, passageway, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the building and
to change the name, number designation by which the building may be known. There
shall be 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 Repre-
sentations 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
operation 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 possession 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 thereafter made shall be ineffective to
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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, 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 Waiver:
25. The failure of Owner to seek redress for violation of, or to insist
upon the strict performance of any covenant or condition of this lease or of any
of the Rules or Regulations, set forth or hereafter adopted by Owner, shall not
prevent a subsequent act which would have originally constituted a violation
from having all the force and effect of an original violation. The receipt by
Owner of rent with knowledge of the breach of any covenant of this lease shall
not be deemed a waiver of such breach and no provision of this lease shall be
deemed to have been waived by Owner unless such waiver be in writing signed by
Owner. No payment by Tenant or receipt by Owner of a lesser amount than the
monthly rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated rent, nor shall any endorsement or statement of any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy in this lease provided. 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 as 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 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:
27. This Lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment or
fixtures if Owner is prevented or delayed from 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 or by reason of the conditions of supply
and demand which have are affected by war or other emergency.
Bills and
Notices:
28. Except as otherwise in this lease provided statement, a bill,
statement, notice or communication which Owner may desire or be required to give
to Tenant, shall be deemed sufficiently given or rendered it, 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 return 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
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 purpose (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 agrees to pay
for water consumed, as shown on said meter as and when bills are rendered, and
on default in making such payment Owner may pay such charges and collect the
same 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 system. Independently of and
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 hereinabove set forth.
Sprinklers:
30. Anything elsewhere in this lease to the contrary nowithstanding, 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
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, modifications, alterations, additional sprinkler heads or other
such equipment, become necessary to prevent the imposition of a penalty or
charge against the full allowance for a sprinkler system in the fire insurance
rate set by any said Exchange or by any fire insurance company, Tenant shall, at
Tenant's expense, promptly make such sprinkler system installations, changes,
modifications, alterations and supply additional sprinkler heads or other
equipment as required whether the work involved shall be structural or
non-structural in nature.
Elevators,
Heat,
Cleaning:
31. As long as Tenant is not in default under any of the convenants of this
lease Owner shall: 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.
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<PAGE>
Security:
32. Tenant has deposited with Owner the sum of $8,368.38 as security for
the faithful performance and observance by Tenant of the terms, provisions and
conditions of this lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease including,
but not limited to, the payment of rent and additional rent Owner may use, apply
or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which tenant is in default or for any sum which Owner may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including but not limited to, any
damages or deficiency in the reletting of the premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Owner. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this lease, the security plus
accumulated interest shall be returned to Tenant after the date fixed as the end
of the Lease and after delivery of entire possession of the demised premises to
Owner less a one percent (1%) per annum administrative fee on the security
deposit (and earned interest) which shall be retained by Landlord. In the event
of a sale of the land and building or leasing of the building, of which the
demised premises form a part, Owner shall have the right to transfer the
security to the vendee or lessee and Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further convenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
Captions:
33. 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:
34. The term "Owner" as used in this lease means only the owner of the fee
or of 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 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 "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 new 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--
Shoring:
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 the demised
premises for the purpose of doing such work as said person shall deem necessary
to preserve the wall or the building of which demised premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Owner, or diminution or abatement of rent.
Rules and
Regulallons
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 and further reasonable Rules and Regulation 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:
37. 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.
Estoppel
Certificate:
38. 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 the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifyhig 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: FAIRCOURT REALTY CO.
-------------------------------------
---------
CORP.
SEAL
---------
- ----------------------------- by: /s/ Michael J. Abramowicz [L.S.]
-------------------------------------
executor for partner
Witness for Tenant: FOILMARK MANUFACTURING CORP.
-------------------------------------
---------
CORP.
SEAL
---------
- ----------------------------- by: /s/ Philip Leibel [L.S.]
-----------------------------
Print Name: Philip Leibel
Title: VP.
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<PAGE>
RIDER attached to and forming part of annexed Lease dated
the day of April, 1997, made by and between FAIRCOURT REALTY
CO. as Landlord and FOILMARK MANUFACTURING CORP. as Tenant,
covering the premises known as 120 Fairchild Avenue,
Plainview, County of Nassau, State of New York.
LEASE RIDER (41) Whenever any provision in this Rider is contrary or
counter to, or inconsistent with, any provision contained in the
paragraphs of said Lease designated "1." to "40." inclusive, then
the provisions contained in this Rider shall govern and control.
DEFAULT (42) Whenever in this Lease there shall be reference to
AFTER GRACE default by either party to the within Lease, it is understood and
PERIOD agreed that any remedy to be exercised upon default may not be
exercised until the applicable grace period has expired.
ALTERATIONS (43) In addition to the terms and conditions and contained
AND REPAIRS in paragraphs "3." and "4." of the within Lease, the Tenant shall
not make any alterations and/or repairs which injure the frame
structure of the Demised Premises and/or building or render it
unfit for general use. Further, the Tenant agrees that if a
notice of a mechanic's lien be filed against the Demised Premises
for labor or material alleged to have been furnished at the
Demised Premises to or for the Tenant or to or for someone
claiming under the Tenant, and if the Tenant shall fail to take
such action as shall cause such lien to be discharged within ten
(10) days after notice of the filing of such notice, the Landlord
may pay the amount of such lien or discharge it by deposit or by
bonding proceedings. In such case, the Landlord may pay any
judgment recovered on such claim. Any amount paid or expense
incurred by the Landlord, as provided in this paragraph, 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 of this
Lease, 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 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. In connection herewith, nothing contained in the
within
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Lease shall authorize the Tenant to do any act which shall in any
way encumber the title of the Landlord in and to said Demised
Premises; and the interest of the Landlord herein shall in no way
be subject to any claim by way of lien or encumbrance whether
claimed by operation of law or by virtue of any expressed or
implied contract by the said Tenant; and any claim to a lien upon
said Demised Premises arising from any act or omission of the
Tenant, shall accrue only against the leasehold estate of the
Tenant and shall in all respects be subject to the paramount
title and rights of the Landlord in and to the said Demised
Premises.
MAINTENANCE (44) (A) the Tenant shall, at its own cost and expense and
to the extent that Landlord is not specifically obligated
hereunder, keep and maintain in good working order and repair all
heating, ventilating, air conditioning, plumbing, electrical, and
fire sprinkler systems of the Demised Premises and such portion
of the Demised Premises within the exclusive control of Tenant.
Tenant shall keep the Demised Premises clean and free of debris,
and shall remove and replace all broken glass (except as provided
in subparagraph (G) of this paragraph (44)). Tenant represents
that all electrical repairs and electrical installations shall be
done by a reliable and licensed electrical contractor who shall
provide general liability and personal injury and property damage
insurance certificates for the mutual benefit of Landlord and
Tenant prior to the commencement of any such electrical work. In
connection therewith, no electrical work shall be commenced by
Tenant or its contractor without the submission to the Landlord
of a detailed plan with specification thereon showing the
contemplated improvement, and without receiving the express
advance written consent of the Landlord thereto.
(B)Notwithstanding anything contained in this Lease to the
contrary, Tenant agrees to take the Demised Premises in its
current "as is" condition except Landlord represents that upon
commencement of the Lease term (i) the roof will be free of
leaks; (ii) the offices and warehouse will be broom clean; and,
(iii) the heating, ventilating, air conditioning, and plumbing
systems will be in working order. Landlord shall, at Landlord's
cost and expense, and prior to commencement of gross annual rent
as provided in paragraph (55) of this Lease, infra, (i) raise the
lights in the warehouse as specified by the Tenant; (ii) repair
loose electrical wires in the warehouse area; (iii) paint
warehouse walls; (iv) install metal
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or plastic overhang of 18"-2' over the outside area loading dock;
and, (v) motorize present tailboard overhead door, if possible.
(C) In connection with Tenant's responsibility as set forth
in subparagraph (A) of this paragraph 44, to keep and maintain in
good working order and repair all heating, ventilating, air
conditioning, plumbing, and electrical systems, Landlord makes no
representations (other than those explicitly contained in
subparagraph B of this paragraph 44) regarding the operating
condition of such systems servicing the Demised Premises, which
systems Tenant agrees to take in its current "as is" condition.
Furthermore, Landlord makes no representation concerning the
power supplied to the Demised Premises. Tenant shall be
responsible for checking that there is sufficient power to the
Demised premises for Tenant's operation. Tenant shall be
responsible to and shall maintain a maintenance contract on the
heating, ventilating, and air conditioning systems with a
reliable heating, ventilating, and air conditioning contractor
and will have included in such maintenance contact all items
necessary to keep the systems operating in a good and workmanlike
manner. Tenant shall, within ninety (90) days from the
commencement of the term of this Lease, submit to the Landlord
the name, address, and telephone number of such service
contractor, as well as a copy of the maintenance contract. If
another contractor is thereafter engaged by Tenant, Tenant shall
within thirty (30) days of such engagement submit to the Landlord
such contractor's name, address, and telephone number, as well as
a copy of the maintenance contract. Within thirty (30) days after
any equipment has been serviced, Tenant shall notify the Landlord
of the servicing thereof and shall furnish Landlord with a copy
of any report of the service contractor relating to the work
done, recommendations for work required to be done for the proper
maintenance and repair of said systems, and any findings made by
the service contractor pertaining to the condition of the
equipment serviced. If the heating equipment is not serviced on
or before October 15th of each year and/or the air conditioning
is not serviced on or before July 1st of each year, then Landlord
shall have the right to employ a service contractor for the
purpose of servicing such equipment and charge the cost thereof
to the Tenant as additional rent.
(D) In connection herewith, the Landlord shall have the
right to inspect the heating,
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ventilating, air conditioning, plumbing, electrical, and fire
sprinkler systems servicing the Demised Premises at all
reasonable times. In the event inspection by the Landlord reveals
that Tenant is not maintaining the aforesaid systems as required,
then and in that event Tenant shall be in default under
applicable provisions of the Lease and Landlord may exercise any
and all remedies which it may have in connection therewith.
(E) The Demised Premises is a multi-tenanted building. The
Landlord will be responsible for snowplowing, pothole repair of
the parking lot, landscaping, and maintaining the fence and gate
surrounding the Demised Premises. The Tenant shall pay, as
additional rent, its proportionate share (forty-one percent
(41%)) of the cost of such services and other common area
maintenance charges including, but not limited to: fire sprinkler
water, monitoring, maintenance, and inspections; any alarm system
attached to the fire sprinkler system; RPZ (Backflow Prevention)
device testing; drywell/cesspool/storm drain maintenance and
repair; and exterminating.
(F) The Tenant, at Tenant's own cost and expense, shall pay
for its own office and warehouse cleaning and shall keep the
parking area and driveways free of debris.
(G) Tenant covenants and agrees that it shall paint the
inside and outside of all exterior doors and windows so as to
maintain the same in good condition, not less often than once
every three (3) years. Tenant also agrees that it shall repair
and/or replace where necessary, at its own expense, all exterior
doors, including overhead doors, fittings, jambs, transoms,
checks, and hardware, and generally maintain the interior and
exterior of the Demised Premises wherever needed. Tenant shall
also replace all broken glass window panes during the Lease term,
except all broken glass window panes at Lease commencement will
be the responsibility of the Landlord.
(H) Tenant shall maintain the fire sprinkler heads within
the Demised Premises, and repair same if damaged or injured or
not in proper working order by reason of any act or omission of
the Tenant, Tenant's agents, servants, employees, licensees, or
visitors, whereupon Tenant shall forthwith restore the same to
good working condition at its own expense; and if the New York
Board of Fire Underwriters of the New York
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Fire Insurance Exchange or any bureau, department or official of
the state or local government require or recommend that any
changes, modifications, alterations or additional sprinkler heads
or other equipment be made or supplied by reason of Tenant's
business or the locations of partitions, trade fixtures, or other
contents of the Demised Premises, or if such changes,
modifications, alterations, additional sprinkle heads or other
equipment become necessary to prevent the imposition of a penalty
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, Tenant shall, at Tenant's expense, promptly
make and supply such changes, modifications, alterations,
additional sprinkler heads or other equipment. Tenant shall
comply with all recommendations and requirements of the insurance
carrier and Board of Fire Underwriters relating to the sprinkler
heads in the Demised Premises.
UTILITIES (45) (A) Landlord has provided, at its cost and expense,
water, gas, heat, and electrical connections. The Tenant hereby
agrees to supply and pay, at its own cost and expense, all light,
heat, fuel, electricity, gas, water, and other utilities used in
the Demised Premises during the term of this Lease, and any sewer
charges (including pretreatment charges) of the applicable county
sewer district which may be imposed upon the Demised Premises
during the term of this Lease. The Landlord shall not be obliged
or obligated to furnish any of the foregoing. Any of the
aforementioned utilities and sewer charges, if not separately
metered shall be billed to the Tenant by Landlord, and shall
immediately be payable to Landlord as additional rent.
(B) Tenant shall maintain the electric meter on the Demised
Premises in good repair throughout the term of this Lease. The
LILCO meter and main shutoff for gas is located in 130 Fairchild
Avenue and the LILCO meter and main shutoff for electricity is
located in 120 Fairchild Avenue. In connection therewith, the
Tenant shall allow access to the LILCO meter for electricity to
the tenant in 130 Fairchild Avenue if a situation exists where
such access is required.
(C) This Lease is subject and subordinate to any utility,
gas, water, and electric light or telephone line easements now or
hereafter given, affecting the Demised Premises, provided that
the same do not interfere with the use of the Demised premises by
the Tenant.
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EMINENT (46) In addition to the terms and conditions contained in
DOMAIN paragraph "10." of the within Lease, and notwithstanding anything
contained therein to the contrary, if less than the whole of the
Demised Premises is acquired or condemned by eminent domain for
any public or quasi-public use or purpose and the same is
insufficient for the efficient operation of the Tenant's
business, the Tenant may cancel this Lease on thirty (30) days
notice in writing to the Landlord to be given by the Tenant
within ten (10) days after the vesting of a portion of the
Demised Premises; and on the date specified in such notice, this
Lease shall terminate, and the Tenant shall have no claim against
the Landlord nor shall the Tenant be entitled to any award which
in any way diminishes the amount of the award payable to the
Landlord calculated from the date of vesting of title under the
condemnation proceedings; and the Tenant hereby waives any right
of claim to any part thereof. However, the Tenant shall remain
liable for the rent up to the entry of the final order of
condemnation, provided that the Tenant is still in possession of
the Demised Premises, and if such time falls within a rent
period, the rent for that period shall be apportioned
accordingly. If the Tenant does not elect to cancel this Lease,
the annual rental shall be reduced by prorating the rental of the
area remaining from the area taken on condemnation; and all of
the other terms and conditions of the Lease shall then remain in
full force and effect except as to the new annual rental computed
by this formula.
ASSIGNMENT (47) The respective parties hereto acknowledge that Tenant
AND SUB- shall not have the right during the term of this Lease and option
LETTING term, if applicable, to assign or sublet this Lease without the
express written permission of, and under the conditions set forth
by the Landlord.
ACCESS TO (48) In addition to the terms and conditions contained in
PREMISES paragraph "13." of the within Lease, and notwithstanding anything
contained therein to the contrary, Landlord shall have access to
all walls, windows and doors bounding the Demised Premises
(including exterior building walls, core corridor walls and
door,s and any core corridor entrance), any terraces or roofs
adjacent to the Demised Premises, and space in or adjacent to the
Demised Premises used for shafts, stacks, pipes, conduits, fan
rooms, ducts, electrical or other utilities, sinks or other
building facilities, and the use thereof, as well as access
thereto through the Demised Premises for the purposes
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of operation, maintenance, decoration and repair are reserved to
Landlord.
DEFAULT (49) In addition to the terms and conditions contained in
paragraph "17." and "18." of the within Lease, and
notwithstanding anything contained therein to the contrary:
(A) If Tenant shall at any time be in default hereunder, and
if Landlord shall institute an action or summary proceeding
against Tenant based upon such default, or if such default
results from nonpayment of rent or additional rent whether or not
such an action or proceeding is instituted, or if Tenant requests
Landlord to review or execute documents (including, without
limitation, any sublease or occupancy documents) in connection
with this Lease, or otherwise if it is reasonably prudent for
Landlord to contact counsel with respect to a material dispute in
connection with this Lease, then Tenant shall reimburse Landlord,
as additional rent, for the reasonable expense of attorneys' fees
and disbursements thereby incurred by Landlord.
(B) If Tenant shall default in the performance of any
covenant, agreement, term, provision or condition herein
contained other than the payment of rent or additional rent,
Landlord without thereby waiving such default, may perform the
same for the account and at the expense of Tenant without notice
in case of emergency and in any other case if such default
continues after ten (10) days from the date of the giving by
Landlord to Tenant of written notice of intention so to do. Bills
for any reasonable and necessary expense incurred by Landlord in
connection with any such performance by Landlord for the account
of Tenant, and reasonable and necessary bills for all costs,
expenses and disbursements, including in connection with such
default (without being limited to) reasonable counsel fees
incurred in collecting or endeavoring to collect the fixed rent
or additional rent or other charge or any part thereof or
enforcing any rights against tenant under this Lease, shall be
payable by Tenant within ten (10) days of notice to Tenant and if
not paid when due, the amounts thereof shall immediately become
due and payable as additional rent under this Lease together with
interest thereon at the lesser of the maximum rate permitted by
law or the prime rate as established by North Fork Bank from the
date the said bills should have been paid in accordance with this
Lese to the date payment is received by Landlord. Landlord
reserves the right, without
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liability to Tenant and without constituting any claim of
constructive eviction, to suspend furnishing or rendering to
tenant any property, material, labor, utility or other service,
wherever Landlord is obligated to furnish or render the same at
the expense of Tenant, in the event that (but only for so long
as) tenant is in arrears in paying Landlord therefor.
(C) Each right and remedy of Landlord provided for in this
Lease shall be cumulative and shall be in addition to every other
right or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Landlord or any one or
more of the rights or remedies provided for in this Lease or now
or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise
by Landlord of any or all other rights or remedies provided for
in this Lease or now or hereafter existing at law or in equity or
by statute or otherwise.
(D) In the event of the termination of this Lease, or of
reentry, by or under any summary dispossess or other proceeding
or action or any provision of law or by force by reason of
default hereunder on the part of Tenant, Landlord shall be
entitled to retain all monies, if any, paid by Tenant to
Landlord, whether as advance rent, security or otherwise but such
monies shall be credited by Landlord first against any rent or
additional rent due from Tenant at the time of such termination
or reentry and second against any damages payable by Tenant under
this Lease or pursuant to law.
WAIVERS (50) In addition to the terms and conditions contained in
paragraphs "25." and "26." of the within Lease, Tenant waives
Tenant's rights, if any, to designate the items against which any
payments made by Tenant are to be credited, and Tenant agrees
that Landlord shall apply any payments made by Tenant as provided
for in this Lease or if not so provided to any items it sees fit,
irrespective of and notwithstanding any designation or request by
Tenant as to the items against which any such payments shall be
credited.
SET-OFF AND (51) In addition to the terms and conditions contained in
COUNTERCLAIM paragraph "27." of the within Lease, it is expressly understood
and agreed by and between the parties hereto that the Tenant
herein shall not be entitled to any abatement of rent or rental
value or diminution of rent or additional rent in any dispossess
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proceedings for the nonpayment of rent or additional rent by
reason of any breach by the Landlord of any covenants contained
in this Lease on its pat to be performed. In any dispossess
proceedings for nonpayment of rent or additional rent, the Tenant
shall not have the right of set-off by way of damages,
recoupment, or counterclaim in damages which the Tenant may have
sustained by reason of the Landlord's failure to perform any of
the terms, covenants, and conditions contained in this Lease on
this pat to be performed. Tenant shall be relegated to an
independent action for damages or for any other relief it may
seek, including but not limited to claims for breach of lease,
reformation or rescission, and such independent action shall not
at any time be joined, or consolidated with, nor asserted in, any
action for dispossess or for nonpayment of rent or additional
rent.
NO ABATEMENT (52) In addition to the terms and conditions contained in
OF RENT DUE paragraph "27." of the within Lease, it is expressly agreed by
TO INABILITY and between the Landlord and Tenant, that no diminution or
TO PERFORM 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 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 the interruption or curtailment of such
"services". 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 or 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
date hereinabove stated for the commencement of the term of the
within Lease, it being understood and agreed that rent shall in
any event commence to run at such date so fixed.
GOVERNMENTAL (53) Whenever in this Lease reference is made to the
REFERENCE Government or any subdivision thereof, said reference shall be
deemed to be made to the proper federal, state, county, town, or
village government or subdivision, authority, or department
thereof, having jurisdiction over the Demised Premises as though
said proper federal, state, county, town, or village governmental
body had been referenced in said Lease.
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BROKER (54) Tenant represents that it has not dealt with any broker
nor was any broker instrumental in connection with the procuring,
execution or delivery of this Lease other than Finkelstein
Realty, Inc., and Sutton & Edwards, Inc., and Tenant hereby
agrees to and hereby does indemnify and hold harmless Landlord
from and against any and all loss, cost, damage, expense or
liability, including, without limitation, attorneys' fees, court
costs and disbursements, arising out of any inaccuracy or
alleged, or claim alleging, inaccuracy of such representations.
However, Landlord agrees to pay all commissions earned by
Finkelstein Realty, Inc. and Sutton & Edwards, Inc. as per
separate written agreement with said brokers.
GROSS (55) (A) The annual rental amount, as referenced on the face
ANNUAL RENT page of this Lease, that shall be paid by Tenant to Landlord
during the term of the Lease is as follows:
Year Gross Annual Rent Monthly Rent
05/01/1997--04/30/1998 ----- $50,210.24 ----- $4,184.19
05/01/1998--04/30/1999 ----- $51,158.98 ----- $4,263.25
05/01/1999--04/30/2000 ----- $52,107.72 ----- $4,342.31
05/01/2000--04/31/2001`----- $53,129.44 ----- $4,427.45
05/01/2001--04/31/2002 ----- $54,151.16 ----- $4,512.60
(B) Tenant agrees to pay to Landlord the Gross Annual Rent
by paying the stipulated Monthly Rent on or before the first day
of each full calendar month during the term of the Lease.
(C) During the first year of the term of the Lease, the
Tenant shall receive a thirty (30) day rent concession, with
Monthly Rent payments commencing on June 1, 1997. If, during the
term of the Lease, the Tenant occupies the Demised Premises prior
to the completion of the interior work to be undertaken by
Landlord pursuant to paragraph (44)(B), supra, the Tenant shall
not pay Monthly Rent until such work is completed; however,
Tenant shall be responsible for all additional rent that may
accrue during this period.
(D) The gross annual rent set forth in subparagraph (A) of
this paragraph 55, includes Tenant's proportionate share
(forty-one percent (41%)) of Base Taxes and Base Insurance to
wit: School tax levied against the Demised Premises for the base
tax year of 1996/97; 1997 General tax; and insurance premiums
from January 28, 1997, through January 28, 1998 (see Exhibit "C"
annexed hereto).
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(E) The Tenant shall pay to the Landlord on before the first
day of each calendar month, any and all additional rent incurred
in any preceding month.
TAXES AND (56) (A) The Tenant covenants and agrees that it shall pay
INSURANCE its proportionate share of forty-one percent (41%) of all Taxes
not specified in paragraph 55 (D), supra, levied upon the land
and building herein demised during the entire term of the within
Lease. Tenant also covenants and agrees that it shall pay to the
Landlord forty-one percent (41%) of any increases in Taxes and
insurance premiums above the base year as set forth in paragraph
55(D), supra. Such additional Taxes and increases in Taxes and
insurance premiums shall be billed to the Tenant by Landlord, and
shall immediately be payable to Landlord as additional rent.
(B) "Taxes" shall mean all real estate taxes, general
assessments, water and sewer charges and other governmental
impositions and charges of every kind and nature whatsoever,
extraordinary as well as ordinary, general and special, foreseen
and unforeseen, and each and every instalment thereof (including
any interest on amounts which may be paid in installments) which
shall or may, during the Term of this Lease, be levied, assessed,
imposed, become due and payable, or liens upon, or arising in
connection with, the use, occupancy or possession of or become
due and payable out of, or for, the building or any part thereof,
and all costs incurred by Landlord in contesting or negotiation
the same with a governmental authority. Nothing herein contained
shall be construed to include as a tax which shall be the basis
of Taxes, any inheritance, estate, succession, transfer, gift,
franchise, corporation, income or profit tax or capital levy that
is or may be imposed upon Landlord; provided, however, that if,
at any time after the date hereof, the methods of taxation shall
be altered so that in lieu of, or as a substitute for, the whole
or any part of the Taxes now levied, assessed or imposed on real
estate as such, there shall be levied, assessed or imposed (i) a
tax on the rents received from such real estate, or (ii) a
license fee measured by the rents receivable by Landlord from the
building or any portion thereof, or (iii) a tax or license fee
imposed upon Landlord which is otherwise measured by or based in
whole or in part upon the building or any portion thereof, or
(iv) an income or franchise tax, then the same shall be included
in the computation of Taxes hereunder, computed as if the amount
of such tax or fee so payable were due if the building were the
only property of Landlord subject thereto.
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(C) An official certificate or statement issued or given by
any state, county or municipal authority, board or officer,
showing the existence of any tax, together with a bill from the
insurance company or insurance broker setting forth the amount of
the premiums for the cost of insurance for the Demised Premises,
shall be prima facia evidence for all purposes of this Lease of
the existence, amount and validity thereof.
INSURANCE (57) The Landlord, during the entire term of this Lease,
will provide and keep in force for the benefit of the Landlord,
at the cost and expense of the Tenant, the following policies of
insurance covering the Demised Premises:
(A) Insurance on the building and improvements against loss
or damage by fire, windstorm, and such other risks as are from
time to time customarily included in extended coverage
endorsements attached to fire insurance policies covering similar
property in Nassau County, and against loss or damage by such
other hazards as a lending institution holding a mortgage on the
premises may require, with no deductible provisions, in an amount
at all times sufficient to prevent the Landlord from becoming a
co-insurer under the terms of the applicable policies, but in any
event, an amount not less than ninety (90%) percent of the full
insurable value thereof, unless the holder of any fee mortgage to
which this Lease subject and subordinate shall require coverage
in a greater amount, in which event the insurance shall be for
such greater amount but in no event in an amount greater than one
hundred (100%) percent of the full insurable value. The term
"Full Insurable Value" shall mean actual replacement value of the
buildings and improvements (exclusive of cost of excavation,
foundations, and footings below the lowest basement floor) less
physical depreciation.
(B) Rent or use and occupancy or rental value insurance,
covering risk of loss of rent to Landlord due to the occurrence
of any of the hazards described in subparagraph (A) of this
paragraph (57), in an amount at least sufficient to meet the
payments for on (1) year of the annual rental which insurance
shall be carried in the name of the Landlord, and the proceeds of
which insurance shall be paid to Landlord and shall be applied by
Landlord first to the payment of such annual rental, or other
additional rent and other charges then due and unpaid by Tenant,
and any balance shall be held by Landlord to be applied to the
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payment of the aforesaid rental or other additional rent or
charges hereunder, as the same may become due and payable, and to
the performance by Tenant of all of the covenants, agreements,
terms and provisions of this Lease until the repair, restoration
or reconstruction of the building and improvements shall be
completed, at which time, if Tenant is not in default hereunder,
any balance thereof shall be paid to Tenant.
(C) General accident and public liability insurance fully
protecting and naming the Landlord against any and all liability
occasioned by accident, disaster or incident of negligence, in
the amount of not less that One Million & 00/100 ($1,000,000.00)
Dollars in respect to all injuries in any one (1) accident or
disaster, and in the amount of not less than Five Hundred
Thousand & 00/100 ($500,000.00) Dollars in the event of any
damage to property, such insurance to cover the entire Demised
Premises as well as the sidewalks in front of and adjacent
thereto, together with an excess umbrella liability insurance
policy in a sum not exceeding Ten Million & 00/100
($10,000,000.00) Dollars.
(D) Insurance against the hazards covered by a policy of
boiler insurance.
(E) Insurance against loss or damage from leakage from
sprinkler systems now or hereafter installed in the building on
the Demised Premises.
(F) Insurance covering such other hazards and in such
amounts as any lending institution which now or hereafter may be
the holder of a first mortgage upon the Demised Premises may
reasonably require from time to time, without undue hardship or
expense.
(G) Plate glass insurance insuring the Landlord against loss
and damage customarily included in such policy.
(H) Nothing herein contained shall be construed to require
the Landlord to insure the contents or stock in trade belonging
to Tenant and located upon the Demised Premises, nor to insure
installations made by Tenant which are removable by Tenant upon
the termination of this Lease.
(I) Tenant shall not violate or permit to be violated any of
the conditions or provisions of any said policies and Tenant
shall comply with the requirements of any company issuing said
insurance in
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order to keep said insurance in full force and effect. Tenant, at
its own cost and expense, shall promptly comply with all rules,
orders and regulations of the New York Board of Fire Underwriters
or other similar body, and such tests and inspections of the
sprinkler system and areas of possible fire hazards in the
Demised Premises arising from the conduct of Tenant's business as
Landlord's insurance carrier may require.
(J) In the event of any damage to the building and
improvements hereby demised by fire or other casualty insured
under the standard fire insurance policy and extended coverage
endorsement applicable thereto, the Tenant shall forthwith notify
the Landlord of such damage or injury. The Landlord shall within
ten (10) business days after written notice thereof file proof of
loss with the insurance carrier and proceed with the settlement
and collection of the claim under the policies of insurance
required under the provisions of the within paragraph.
(K) Landlord or its agents shall not in any event whatsoever
be liable for any injury or damage to any person or property
happening on or about the Demised Premises or to any property of
Tenant, or to any property of any other person, firm, association
or corporation on or about the demised premises from whatever
cause whatsoever, including but not limited to fire, theft,
explosion, falling plaster, steam, gas, electricity, water, rain
or snow or leaks from any part of said building or from the
pipes, appliances or plumbing works or from the roof, except for
injury and/or damaged caused by Landlord, its agents, servants or
employees.
(L) Tenant agrees to purchase at its own cost and expense
and to keep in force during the term of this Lease a
comprehensive public liability and property damage insurance
policy to protect against any and all liability occasioned by
accident, disaster or incident of negligence, with a combined
single limit for bodily injury and property damage of not less
than Two Million & 00/100 Dollars ($2,000,000.00) per occurrence.
Said policy or policies shall (a) name the Landlord and the
Managing Agent, as an additional insured; and, (b) provide that
said insurance shall not be canceled unless thirty (30) days
prior written notice shall have been given to Landlord. Said
policies or certificates thereof shall be delivered to Landlord
by Tenant upon the Commencement Date and upon each renewal of
said insurance. In the event there is a claim against either
Landlord or Tenant's liability
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insurance policy, then and in that event the liability policy for
the Tenant shall be the primary coverage and the Tenant's
insurance carrier shall represent and defend the interests of
Tenant and Landlord, as the case may be.
SURRENDER (58) (A) In addition to the terms and conditions contained
OF PREMISES in paragraph "22." of the within Lease, Tenant shall (i) remove
Tenant's property subject to the provisions of this paragraph,
(ii) at Landlord's request, repair any damage and make any
replacements to the building or the Demised Premises resulting
from or necessitated by such removal, and restore those parts of
the Demised Premises from which such removal occurred, provided
that, insofar as any pipes, wired and conduits are concerned,
Tenant shall not be required to remove the same from floors,
walls and ceilings, but, rather, shall only be required to
disconnect, cut and cap in a safe and complete manner and in
accordance with all applicable codes, laws and regulations. If
Tenant shall fail to perform as provided herein, Landlord shall:
(i) have the right to do so at Tenant's cost and expense, without
further notice or demand upon Tenant, and/or (ii) treat the
Tenant as a holdover Tenant, and Tenant shall pay rent as
provided in subparagraph (D), of this paragraph 58.
(B) Tenant hereby indemnifies and agrees to hold Landlord
harmless from and against any loss, cost, liability, claim,
damage, fine, penalty and expense, including reasonable
attorneys' fees and disbursements, resulting from delay by Tenant
in surrendering the Demised Premises upon the termination of this
Lease including without limitation, any claims made by any
succeeding Tenant or prospective Tenant based upon such delay, or
any loss or liability resulting from Tenant's failure to perform
the work as required by subparagraph (A) of this paragraph 58,
including, without limitation, any delay in granting occupancy of
the Demised Premises to a future occupant. This paragraph shall
survive the termination of this Lease.
(C) Any items of Tenant's property which shall remain in the
Demised Premises after the expiration of the lease term, or after
a period of ten (10) days following an earlier expiration of this
Lease, may, at the option of the Landlord, be deemed to have been
abandoned, and in such case either may be retained by Landlord as
its property or may be disposed of, without accountability, in
such manner as Landlord amy see fit. Tenant agrees to reimburse
Landlord for the costs of removal and for the cost of repairing
any
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damage to the Demised premises or the building arising out of
Tenant's failure to remove Tenant's property pursuant to the
terms of this Lease.
(D) In the event Tenant remains in possession of the Demised
Premises after the termination of this Lease without the
execution by Landlord and Tenant of a new Lease, or fails to
perform in accordance with subparagraph (A) of this paragraph 58,
such holdover shall be unlawful and in no manner constitute a
renewal or an extension of the Lease and no notice of any kind
shall be required prior to any commencement of summary
proceedings and Tenant hereby waives any such right. Tenant, at
the option of Landlord, shall be deemed to be occupying the
Demised Premises as a Tenant from month to month, at a monthly
rental equal to one and one half (1 1/2) times the rent and
additional rent payable during the last month of the term,
subject to all of the other terms of this Lease insofar as the
same are applicable to a month-to-month tenancy.
LATE (59) In the event the Tenant shall not have paid the rent on
PAYMENT or before the tenth (10th) day of the month during which same is
OF RENT BY due, there shall be a late charge of Twenty & 00/100 (20.00)
TENANT Dollars per day computed from the first day of the month in which
said rent shall be due computed to the date on which payment is
received by Landlord. This late charge is intended to compensate
Landlord for additional expenses incurred by Landlord in
processing late rent payments and shall be deemed additional rent
and shall, at Landlord's option, be added to the rent for the
month in which the rent shall be due, and the Landlord shall have
all rights with respect to additional rent as for nonpayment of
any and all other rents due under the terms of the within Lease.
The demand for and collection of the aforesaid late charges shall
in no way be construed as a waiver of any and all remedies that
the Landlord may have under the terms of the within Lease either
by summary proceedings or otherwise in the event of a default in
payment of rent.
SIGN (60) (A) The Tenant shall have the right to erect signs upon
the Demised Premises, provided same are in accordance with all
local, municipal, county, state and federal laws relating
thereto, are obtained pursuant to lawful permits from the
licensing authority having jurisdiction thereof are not placed on
the roof of the Demised Premises but fastened and/or secured to
the exterior mortar joints of the building and further provided
that such permits are obtained by the Tenant
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at its own cost and expense. However, Tenant shall not install
any sign upon the Demised Premises without receiving the express
advance written permission of the Landlord in connection
therewith, and Landlord agrees that such consent shall not be
unreasonably withheld.
(B) Prior to the termination of the term of this lease, any
signs erected by Tenant or Tenant's assignee or sublessee shall
be removed by Tenant and Tenant shall repair and restore any
damage caused by the affixing of such sign or signs to the
building or by the removal thereof.
REFUSE AND (61) The Tenant agrees not to allow an excess accumulation
WASTE of garbage or refuse to remain upon the Demised Premises and
Tenant shall remove the same at its own cost and expense with due
diligence and in accordance with all applicable laws and
ordinances. Tenant shall store all refuse and trash in
appropriate sealed and covered containers. Any objects or
equipment dumped or abandoned upon the areas of the Demised
Premises outside the building shall, unless removed with due
diligence by the Tenant, be removed by the Landlord upon prior
notice to remove, and the cost of such removal shall be paid by
the Tenant to the Landlord upon delivery to the Tenant of a copy
of the receipted bill therefor.
NEW YORK (62) This Lease shall be construed and enforced in
LAW AND accordance with the laws of the State of New York, and any action
NON-RECORDING or proceeding hereunder shall be brought and maintained only
OF LEASE within the Counties of Suffolk or Nassau, State of New York.
Tenant expressly warrants and represents that it will not record
this Lease, but Landlord will, upon Tenant's request and at
Tenant's cost, execute a Memorandum of Lease, which Tenant may
record.
TENANT (63) Tenant agrees, at reasonable intervals on Landlord's
RATIFICATION reasonable request and without cost to Landlord, to furnish duly
OF LEASE acknowledged statements that the within Lease is in full force
and effect; that the same has not been modified, amended, nor
assigned; that the Tenant is in possession of the Demised
Premises and is paying the full Lease rental, and setting forth
the date to which rent has been paid; that no rental payments
have been made in advance; that all work required to be performed
by the Landlord under the Lease has been completed; and shall
further set forth the commencement date of the original term of
the Lease and confirm that there are no defaults outstanding. In
the event there has been a modification, amendment, or
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assignment, or if the Tenant is not in possession, the Tenant
shall so state and enumerate the instruments affecting such
modification amendments or assignments.
INDEPENDENT (64) Each and every covenant contained in then within Lease
COVENANTS shall be deemed separate and independent and not dependent upon
any other provision of this Lease nor the use and occupation of
the premises by the Tenant. In the event any portion or paragraph
of this Lease shall be declared invalid, the balance of any
affected paragraph and the balance of the provisions hereof shall
remain in full force and effect.
COMPLIANCE (65) Tenant understands that both Landlord and Tenant may
WITH DIREC- from time to time be required to comply with directives of
TIVE OF governmental authorities and/or the public utility company
GOVERNMENTAL serving the building for the purpose of conserving energy. The
AUTHORITY parties agree that each will and shall be obligated to comply
with all such directives. In no event shall Tenant be entitled to
any abatement of rent or to claim a constructive eviction, nor
shall Landlord otherwise incur any liability to Tenant, by reason
of Landlord's and/or Tenant's compliance with any such
directives.
INTEREST (66) Interest shall accrue at the maximum legal rate as
ON LATE allowed by law on any payment of rent or additional rent due
PAYMENT under this Lease if said rent or additional rent is not paid
OR RENT within ten (10) days after the due date of such payment. Said
interest, however, shall accrue from the date that the monthly
installment of rent is due. Said interest charge is intended to
compensate Landlord for additional expenses incurred by Landlord
in processing such late rent payments and shall be construed as
additional rent and shall be due and payable with the next
monthly installment of rent. The payment of the aforesaid
interest on the part of the Tenant shall not be deemed a waiver
of any and all other remedies available to the Landlord under the
provisions of the within Lease.
REASONABLENESS (67) (A) Whenever it is provided in this Lease that the
consent or approval of Landlord or Tenant, as the case may be, is
required, Landlord and Tenant each separately covenants and
agrees that such consent and approval on its part shall not be
unreasonably withheld or delayed. Whenever any act is required to
be done by Tenant to the satisfaction of or satisfactory to
Landlord or upon the request of requirement of Landlord, Landlord
shall not unreasonably request or require such action by Tenant
or decline to express its satisfaction therewith. Whenever
Landlord's judgement
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is specified as the required standard or Landlord is permitted to
exercise its discretion, such judgement and discretion shall be
reasonably exercised. In any case where Landlord is permitted to
collect from Tenant any costs or expenses or fees (including, but
not limited to, attorneys' fees) paid or incurred by Landlord,
the amounts of such items shall be reasonable.
(B) Any provision of this Lease which requires a party not
to unreasonably withhold its consent, (i) shall be read as if the
word "withhold" read "withhold, delay or defer" and (ii) shall
never be the basis for any award of damages (unless exercised in
intentional and deliberate bad faith) or give rise to a right of
setoff to the other party, but shall be the basis for a
declaratory judgment or specific injunction with respect to the
matter in question.
RESTRICTION (68) If the fixed rent or any additional rent shall be or
ON RENT become uncollectible, reduced or required to be refunded by
virtue of any law, governmental order or regulation, or direction
of any public officer or body pursuant to law, (of the nature of
a rent freeze or rent restriction) tenant shall enter into such
agreement(s) and take such other action (without additional
expense to Landlord) as Landlord may reasonably request, and as
may be legally permissible, to permit Landlord to collect the
maximum fixed rent and additional rent which may from time to
time during the continuance of such legal rent restriction be
legally permissible, but not in excess of the amounts of fixed
rent or additional rent payable under this Lease. Upon
termination of such rent restriction prior to the expiration
date, (i) the fixed rent and additional rent shall become and
thereafter be payable under this Lease in the amount of fixed
rent and additional rent set forth in this Lease for the period
following such termination, and (ii) Tenant shall pay to
Landlord, to the maximum extent legally permissible, and amount
equal to (a) the fixed rent and additional rent which would have
been payable pursuant to this Lease, but for such legal rent
restriction, less (b) the fixed rent and additional rent paid by
Tenant during the period that such legal rent restriction was in
effect.
MORTGAGE (69) (A) The Tenant will promptly furnish to the Landlord or
REQUIREMENTS Landlord's mortgagee, at reasonable intervals, all financial
information and other information concerning the Tenant
reasonably required by Landlord's mortgagee, and tenant will
execute any
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documents reasonably required by the mortgagee in connection
therewith.
(B) So long as there is a first mortgage lien against the
Demised Premises, Landlord and Tenant, without first obtaining
the written consent of such mortgagee, will not enter into any
agreement, the effect of which would be to (i) modify, cancel,
terminate or surrender the Lease; (ii) grant any concession in
respect thereof; (iii) reduce the rent or require the prepayment
of any rent in advance of the due date thereof; (iv) create any
offsets or claims against rents; (v) assign in whole or in part
any of the rents therefrom or Tenant's interest in the Lease or
sublet the whole or any portion of the Demised Premises except as
provided in this Lease.
(C) The Tenant will furnish to the first mortgagee, at
reasonable intervals, if required in landlord's mortgage, within
ninety (90) days after the end of each fiscal year of the Tenant,
copies of (consolidated) balance sheet of the Tenant for such
fiscal year.
(D) In the event of any act or omission by the Landlord
which would give the Tenant the right to terminate this Lease or
to claim a partial or total eviction, the Tenant shall not
exercise any such right (i) until it shall have given written
notice, by certified or registered mail, return receipt
requested, or such act or omission to the holder of any mortgage
whose name and address shall have been furnished to the tenant in
writing, at the last address so furnished, and (ii) until a
reasonable period of time for remedying such act or omission
shall have elapsed following the giving of such notice not to
exceed ten (10) days, provided that following the giving of such
notice, the Landlord or said holder shall, with reasonable
diligence, have commenced and continued to remedy such act or
omission or to cause the same to be remedied.
NON-LIABILITY (70) If Landlord or a successor in interest is an individual
OF LANDLORD (which term as used herein includes aggregates of individuals,
such as joint ventures, general or limited partnerships or
associations) such individual shall be under no personal
liability with respect to any of the provisions of this Lease,
and if such Landlord hereto is in breach or default with respect
to its obligations under this Lease, Tenant shall look solely to
the equity of such Landlord in the land and building of which the
premises form a part for
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the satisfaction of Tenant's remedies for the collection of a
judgment requiring the payment of money by the Landlord, and no
other property or assets of Landlord shall be subject to levy,
execution or other enforcement procedure for the satisfaction of
Tenant's remedies under or with respect to either this Lease, the
relationship of Landlord or Tenant hereunder or Tenant's use and
occupancy of the Demised Premises.
ENVIRONMENTAL (71) (A) If, during the term of the Lease or Tenant's
occupancy of the Demised Premises, Landlord or any governmental
authority is required to undertake, or otherwise undertakes the
removal, remediation, clean up, neutralization or any other
affirmative act (including without limitation, testing, sampling
or other investigatory acts) with respect to the presence or
suspected presence of Hazardous Substances, pollutants, or
contaminants at, in, under, or around the Demised Premises,
Tenant acknowledges and agrees that any such action shall not
constitute a breach of the covenant of quiet enjoyment of the
Demised Premises, and furthermore, Tenant shall not be entitled
to any diminution or abatement of rent in such event unless
Tenant is unable to and cannot utilize the Demised Premises in
any reasonable manner with respect to the operation of Tenant's
business. Tenant agrees and covenants to cooperate fully with
Landlord in connection with any such actions undertaken by
Landlord or governmental authority. However, nothing contained in
this subparagraph (A) shall be construed as intending to prohibit
Tenant's right to commence an action against Landlord for partial
or full constructive eviction.
(B) Tenant immediately shall notify Landlord in writing of
(i) any and all enforcement, cleanup, removal, or other
governmental or regulatory action (including, but not limited to,
violations or other notices of non-compliance) instituted,
completed, or threatened pursuant to any Laws relating to
industrial hygiene or to the environment or involving any
Hazardous Substances, pollutants, or contaminants; (ii) all
claims made or threatened in writing by any third party against
Tenant or the Demised Premises relating to pollution, natural
resource damage, cost recovery compensation, or loss or injury
resulting from any Hazardous Substances, pollutants or
contaminants; (iii) any notice of any discharge of Hazardous
Substances, pollutants or contaminants when such discharge is
required to be reported pursuant to any Laws; and (iv) Tenant's
discovery of any fact, occurrence, or condition on the Demised
Premises or adjacent property
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that could cause the Demised Premises or any part thereof to be
subject to any notice, governmental or regulatory action, or
claims pursuant to (i), (ii), and (iii) above.
(C) Supplementing the use provision of this Lease, Tenant
covenants and agrees for itself, its successors and assigns, that
it shall not undertake, carry on, or permit any use or process
in, on, or about the Premises that shall emit noxious or
offensive odors or result in excessive noise or vibration. Tenant
further agrees not to use, generate, handle, store, transport,
discharge, dispose of, or accumulate any Hazardous Substances or
other pollutants or contaminants upon the Demised Premises,
unless such use, generation, handling, storage, transportation,
discharge, disposal, or accumulation is in accordance with all
applicable federal, State, and local laws, rules, regulations,
ordinances, permits, orders, and codes (hereinafter collectively
referred to as "Laws"), and is permitted by the United States
Environmental Protection Agency, the New York State Department of
Environmental Conservation, or such other governmental agency
having jurisdiction thereof.
(D) Tenant shall be solely responsible for the removal or
elimination of any Hazardous Substances, or other pollutants or
contaminants arising from any act, omission, or course of conduct
by Tenant, its agents, employees, contractors, customers,
suppliers, invitees, or licensees, resulting from Tenant's use,
occupancy, or control of the Demised Premises or surrounding
property. Tenant shall proceed with the removal or elimination of
any such Hazardous Substances, pollutants or contaminants on (i)
demand of Landlord if the presence of such Hazardous Substances,
or other pollutants or contaminants are in violation of any Laws
or arose as the result of a violation of paragraph (71)(C),
supra, or (ii) demand of any governmental agency having
jurisdiction. Tenant shall furnish to Landlord all documentation
demonstrating that the removal or elimination of Hazardous
Substances, or other pollutants or contaminants has been done in
accordance with all Laws.
(E) The term "Hazardous Substance" shall mean any hazardous
waste, as defined by 42 U.S.C. Section 6901(5), any hazardous
substance, as defined by 42 U.S.C. Section 9601(14), and all
toxic substances, hazardous materials or other chemical
substances (including but not limited to petroleum and petroleum
derivatives) regulated by any other federal, state, or
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local law, regulation, rule, ordinance, or code. The term
"pollutants or contaminants" shall have the meaning as that term
is defined in 42 U.S.C. Section 9601(33).
(F) Landlord or Landlord's agents, contractors, employees
shall have the right upon reasonable notice to Tenant to enter
upon the Premises to make such inspections or tests as may be
necessary or desirable to insure compliance by the Tenant with
the provisions of this paragraph (71). Tenant shall reimburse
Landlord for the cost of such inspections or tests if (i) Tenant
has failed to comply with the provisions of this paragraph (71),
or (ii) Hazardous Substances, pollutants, or contaminants are
found on the Demised Premises or are found to have been
discharged from the Demised Premises, and such Hazardous
Substances, pollutants or contaminants are subject to the removal
or elimination provisions of subparagraph (D) of this paragraph
(71). Tenant shall pay Landlord as additional rent the cost of
any removal or elimination under the provision of subparagraph
(D) of this paragraph 71 incurred by Landlord upon presentation
of a bill therefor by the Landlord to Tenant.
(G) No above-ground or underground storage tanks for the
storage of any chemicals, waste materials or by-products shall be
installed at the Demised Premises by Tenant without the express
written consent of Landlord.
(H) Not later than sixty (60) days prior to the expiration
or termination of the Lease, Landlord, at its sole discretion,
may perform an environmental audit of the Demised Premises to
document the environmental conditions existing at the Demised
Premises and to determine whether any Hazardous Substances,
pollutants or contaminants exist at (or are found to have been
discharged from) the Demised Premises. Tenant shall fully
cooperate with and permit Landlord, it agents, contractors or
employees, access to the Demised Premises to conduct the
environmental audit and any sampling and testing activities. The
results of the audit shall be reported in an Environmental Audit
Review Report ("the Environmental Report"). A copy of the
Environmental Report shall be given to Tenant within thirty (30)
days prior to expiration or termination of the Lease. Landlord
and Tenant each acknowledge that the purpose of the Report shall
be to set forth the environmental conditions existing at the
Demised Premises at the time of the
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audit and to assist in determining Tenant's obligations under
this paragraph (71) of the Lease. Failure of the Landlord to
conduct the environmental audit pursuant to this subparagraph (H)
does not, however, limit or otherwise affect in any way Tenant's
obligations under this paragraph (71). The Tenant shall reimburse
Landlord for the cost of audit and Report if (i) Tenant has
failed to comply with the provisions of this paragraph (71), or
(ii) Hazardous Substances, or other pollutants or contaminants
are found on the Demised Premises or is found to have been
discharged from the Demised Premises, and such Hazardous
Substances, pollutants, or contaminants are subject to the
removal or elimination provisions of paragraph 71(D), supra.
(I) Notwithstanding the provisions of subparagraph (H),
supra, if the Lease is terminated earlier than the date specified
for termination of this Lease, the environmental audit, sampling
or testing, referred to in subparagraph (H) of this paragraph
(71) shall be performed at any time prior to termination of the
Lease term, and a copy of the Report shall be given to the Tenant
within a reasonable time following the completion of the audit
and the receipt of any sampling or testing data.
PARKING (72) Tenant shall be entitled to use the parking areas
adjacent to the Demised Premises for the parking of motor
vehicles by Tenant, Tenant's employees, guests and customers
subject to reasonable rules and regulations as may be prescribed
by the Landlord. The use of such parking areas shall be limited
to such use by the Tenant as is accessory to Tenant's use of said
building, and Tenant shall have no right to permit such use by
license or otherwise to other persons, firms or corporations. No
trailers, trucks or other vehicles shall be stored in the loading
areas or driveways, or shall any trailers or trucks be stored on
the premises in violation of any ordinance of the Town of
Babylon. Tenant acknowledges that any cars, motor vehicles
trailers and the like parked at the building are parked at
Tenant's sole risk and Landlord shall not be liable in any way
for any loss or damaged to Tenant's vehicle or personal property
therein contained.
ADDITIONAL (73) notwithstanding anything contained in paragraph "32."
SECURITY of this Lease to the contrary, on each anniversary date of the
DEPOSIT commencement of the within Lease term and option term, if
applicable, Tenant shall then forward to Landlord a sum of money
which, when added to the original security deposit of Eight
Thousand Three Hundred Sixty Eight & 38/100 Dollars
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($8,368.38), plus accumulated interest thereon, will provide the
Landlord with a total security deposit equal to two (2) months
adjusted rent including any increases in real estate taxes and
insurance above the base year costs.
OPTION TO (74)(A) Landlord hereby agrees to give the Tenant one (1)
RENEW five (5) year option for renewing the within lease term covering
the Demised Premises provided there is no default in the
performance of any term or condition of this Lease on the part of
the Tenant to be performed at the time specified hereafter for
exercising such option. The option term shall commence on the
first day of May, 2002, and terminate on the thirtieth day of
April, 2007 with the minimum option rental amount to be as
follows (as may be adjusted by paragraph 74(C), infra):
Year Minimum Gross Annual Rent Monthly Rent
05/01/2002--04/30/2003 ----- $55,172.88 ------ $4,597.74
05/01/2003--04/30/2004 ----- $56,267.58 ------ $4,688.97
05/01/2004--04/30/2005 ----- $57,362.28 ------ $4,780.19
05/01/2005--04/31/2006`----- $58,529.96 ------ $4,877.50
05/01/2006--04/31/2007 ----- $59,697.64 ------ $4,974.80
(B) The annual gross rent set forth in paragraph (A), of
this paragraph 74, is based upon a net rent of $4.95 per square
foot plus Tenant's proportionate share of Taxes levied against
the Demised Premises for the base tax year of 1996/97 which were
Forty Four Thousand Six Hundred Fifty Seven & 87/100 (44,657.87)
Dollars or Three Hundred Eighty Eight & 15/100 (388.15) Dollars
per month or Two & 45/100 (2.45) Dollars per square foot; and the
base cost of insurance as outlined in paragraph (57) of this
Lease, to wit, the sum of Two Thousand Nine Hundred Fifteen &
00/100 ($2,915.00) Dollars per year or Two Hundred Forty-Two &
91/100 (242.91) Dollars per month or $.16 cents per square foot,
for the insurance year from January 28, 1997, through January 28,
1998.
(C) The annual gross rent set forth in subparagraph (A), of
this paragraph 74, for the first year of the option is based upon
a net rent of $4.95 per square foot. The net rent (defined as the
annual gross rent less base Taxes and base insurance) during the
first year of the option shall be the greater of $4.95 and the
amount obtained by multiplying the first year's rent of the Lease
($4.27 sq. ft.) by a number, the numerator of which is the cost
of living index for February 2002 and the denominator of which is
the cost of living for February 1997. Thereafter, the adjusted
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increase in the net rent for the 7th through 10th year of the
option shall be determined by the average increase in the cost of
living during the first five (5) years of the Lease, but in no
event shall be less than the amount specified in subparagraph (A)
of this paragraph 74.
(D) The Tenant hereby agrees to give the Landlord written
notice sent by certified mail, return receipt requested of its
intention to exercise its option to renew hereunder, no later
than six months prior to the option term. In the event Tenant
fails to give the required notice to the Landlord in the time
allocated therefor, then and in that event the Tenant's right to
exercise the option hereunder shall lapse and become null and
void as if such option never existed in the first instance.
PARAGRAPH (75) The paragraph headings in this Lease are inserted only
HEADINGS as a matter of convenience or reference, and are not to be given
any effect whatsoever in construing this Lease.
LANDLORD: TENANT:
FAIRCOURT REALTY CO. FOILMARK MANUFACTURING CORP.
By: /s/ Michael J. Abramowicz By: /s/ Philip Leibel
--------------------------- ------------------------
Title: Partner executor/or partner Print Name: Philip Leibel
Title: V.P.
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SECOND RIDER attached to and forming part of annexed Lease dated
the____ day of May, 1997, made by and between FAIRCOURT REALTY
CO. as Landlord and FOILMARK, INC., as Tenant, covering the
premises known as 120 Fairchild Avenue, Plainview, County of
Nassau, State of New York.
1. In the event of any conflict between the terms of the printed form of
Lease, and the provisions contained in paragraphs designated "1." to 40."
inclusive, or the Rider to Lease, and the provisions contained in
paragraphs designated (41) to (75) inclusive, then, and in any such event,
the terms of the within Second Rider shall take priority.
2. Any and all references to "Foilmark Manufacturing Corp." shall be
deemed amended to read "Foilmark, Inc."
3. Any and all references to "18,200 sq. ft. building" shall be deemed
amended to read "17,783 sq. ft. building".
4. With respect to paragraph (42) of the within Lease, in the event that
cure shall be made within the grace period, no default shall exit under
said Lease.
5. With respect to paragraph (43) of the within Lease, the ten (10) day
period shall be deemed amended to read twenty (20) days.
6. Further as to paragraph (43) with respect to obligations to repair,
any and all structural repairs (walls, roof, floor, etc.) shall be the
responsibility of the Landlord unless such repairs shall be caused by
Tenant, its employees, agents, servants or contractors.
7. At the end of paragraph (44)(B) of the within Lease," the words "if
possible" shall be deemed deleted.
8. With respect to paragraph (44)(C) of the within Lease, the obligation
referred to in the final sentence thereof respecting July 1st of each year
shall not apply during the initial year of the Lease
9. With respect to paragraph (44)(D) of the within Lease, any right of
inspection by the Landlord shall be upon reasonable notice and at
reasonable times during Tenant's customary business hours, except in the
case of emergency.
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<PAGE>
Additionally, wherever under said Lease Landlord shall have the right to
inspect, the aforesaid provision shall apply.
10. Paragraph (55)(C) of the within Lease is amended as follows:
During the first year of the term of the Lease, the Tenant shall
receive a forty-six (46) day rent concession, with Monthly Rent
payments commencing on July 1, 1997. If, during the term of the
Lease, the Tenant occupies the Demised Premises prior to the
completion of the interior work to be undertaken by Landlord
pursuant to paragraph (44)(B), supra, the Tenant shall not pay
Monthly Rent until such work is completed; however, Tenant shall
be responsible for all utilities during this period.
11. All rent and additional rent due under said Lease shall be made
payable to "Finkelstein Realty, Inc.", as managing agent for Landlord.
12. With respect to paragraph (44)(H) of the within Lease, and wherever
else under this Lease reference is made to compliance by the Tenant for
conditions which existed prior to the tenancy of Tenant hereunder unless
required by or as a result of Tenant's business or operations, Tenant shall
either comply or shall allow Landlord to comply or come into compliance
with for such conditions. In the event that Landlord undertakes compliance,
Tenant shall pay to Landlord as additional rent an annual sum of ten
percent (10%) of the amount expended by Landlord for such compliance as
return on investment. In no event shall such annual payment by the Tenant
to Landlord for such return of investment exceed $5,000.00.*
13. With respect to paragraph (47) of the within Lease, and wherever else
the consent of the Landlord is required under the terms of the Lease, said
consent shall not be unreasonably withheld.
14. With respect to paragraph (49)(A) of the within Lease, and wherever
else attorney's fees are provided under the terms of the Lease, Tenant
shall be provided reciprocal rights for attorney's fees in the event that
Tenant shall be the prevailing party in a dispute with Landlord. A party
shall only be entitled to attorney's fees in the event that said party
shall be the prevailing party.
15. With respect to paragraph (54) of the within Lease, the indemnity and
hold harmless from Tenant shall be limited to a breach of Tenant's
representation and Tenant shall not be
* However, as to pre-existing environmental/hazardous materials, the Tenant
shall have no obligation to remedy nor any obligation to contribute to the
Landlord upon the remedy by Landlord of such pre-existing conditions.
E-76
<PAGE>
obligated to indemnify and hold harmless for the mere allegation of any
such breach.
16. With respect to paragraph (56)(A) of the within Lease, the term
"immediately payable to Landlord" shall be deemed revised to read, ",
within ten (10) days after being billed, be paid to Landlord".
17. With respect to paragraph (58)(A) of the within Lease, Tenant shall
surrender the Demised Premises as stated therein, reasonable wear and tear
excepted.
18. Paragraph (66) of the within Lease is amended as follows:
Interest shall accrue at the maximum legal rate as allowed by law
on any payment of additional rent due under this Lease if said
additional rent is not paid within ten (10) days after the due
date of such payment; however, said interest, shall accrue from
the due date. Said interest is intended to compensate Landlord
for additional expenses incurred by Landlord in processing such
late payments and shall be construed as additional rent and shall
be due and payable with the next monthly installment of rent. The
payment of the aforesaid interest on the part of the Tenant shall
not be deemed a waiver of any and all other remedies available to
the Landlord under the provisions of the within Lease.
19. With respect to paragraph (69) of the within Lease, Landlord agrees to
make written request to obtain a Nondistrubance Agreement from any future
lender to which said Lease shall be subordinated reflecting that, provided
that the Tenant shall not be in default under the terms of said Lease the
same shall not extinguish the Lease.
20. With respect to paragraph (71)(A) of the within Lease, the phrase "in
any reasonable manner with respect to the operation of Tenant's business"
is amended to read, "for the operation of Tenant's business".
21. The following notice provision shall be deemed added to the Lease:
Any notice, approval or consent required or permitted to be given
hereunder shall be in writing, shall be given by personal delivery,
reputable overnight courier, facsimile transmission or by registered mail,
postage prepaid and return receipt requested, to the recipient at such
recipient's address set forth below:
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<PAGE>
If to the Landlord:
Faircourt Realty Co.
c/o Finkelstein Realty, Inc.
450 Jericho Turnpike, Suite 207
Mineola, New York 11501
with a required copy to;
Theodore W. Firetog, Esq.
111 Thomas Powell Boulevard
Farmingdale, New York 11735-2251
Telecopy: (516) 845-8031
If to the Tenant:
Foilmark, Inc.
40 Melville Park Road
Melville, New York 11747
Attention: Mr. Philip Leibel
Telecopy: (516) 367-4768
with a required copy to:
Margolin & Margolin
52 Elm street
Huntington, New York 11743
Attention: James S. Margolin, Esq.
Telecopy: (516) 427-8134
All such notices shall be effective and deemed given upon delivery, if
delivered personally or by overnight courier; upon receipt in the case of
facsimile transmission. each such notice shall bear the date upon which it is
delivered, transmitted or mailed. Each party may, by like notice, change the
address to which notices shall be addressed hereunder.
LANDLORD: TENANT:
FAIRCOURT REALTY CO. FOILMARK, INC.
By: /s/ Michael J. Abramowicz By: /s/ Philip Leibel
------------------------------- ------------------------
Title: Partner executor/or partner Print Name: Philip Leibel
Title: Philip Leibel V.P.
E-78
FOILMARK, INC.
NON-EMPLOYEE DIRECTORS' STOCK PLAN
This Foilmark, Inc. Non-Employee Directors' Stock Plan (the "Plan") is
adopted by Foilmark, Inc. (the "Company") for the purpose of advancing the
interests of the Company by providing compensation and other incentives for the
continued services of the Company's non-employee directors and by attracting and
retaining able individuals to directorships with the Company.
1. Definitions. For purposes of this Plan, the following terms shall have
the meanings set forth below:
"Administrator" means the person(s) appointed by the Board to administer
the Plan as provided in Paragraph 2 hereof.
"Annual Meeting" means the annual meeting of the Company's shareholders.
"Board" means the Board of Directors of Foilmark, Inc.
"Change of Control" means (i) approval by the Company's shareholders of a
merger in which the Company does not survive as an independent, publicly owned
corporation, a consolidation, or a sale, exchange or other disposition of all or
substantially all the Company's assets, or (ii) any acquisition of voting
securities of the Company by any person or group (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), but excluding (a) the Company or
any of its subsidiaries, (b) any person who was an officer or director of the
Company on the day prior to the Effective Date, or (c) any savings, pension or
other benefits plan for the benefit of employees of the Company or any of its
subsidiaries, which theretofore did not beneficially own voting securities
representing more than 30% of the voting power of all outstanding voting
securities of the Company, if such acquisition results in such entity, person or
group owning beneficially securities representing more than 30% of the voting
power of all outstanding voting securities of the Company. As used herein,
"voting power" means ordinary voting power for the election of directors of the
Company.
"Common Shares" means the Company's common stock, $0.01 par value per
share.
"Company" means Foilmark, Inc., a Delaware corporation.
"Effective Date" means May 20, 1997, subject to the approval of the Plan by
the Company's shareholders.
"Grant Date" means the effective date of a grant of options pursuant to
Paragraph 4(a) hereof.
"Market Value" means the closing price of the Common Shares as reported by
NASDAQ.
"Participant" means a director who has met the requirements of eligibility
and participation described in Paragraph 3 hereof.
2. Administration. The Plan shall be administered by the Administrator. The
Administrator may establish, subject to the provisions of the Plan, such rules
and regulations as it deems necessary for
E-79
<PAGE>
the proper administration of the Plan, and make such determination and take such
action in connection therewith or in relation to the Plan as it deems necessary
or advisable, consistent with the Plan.
3. Eligibility and Participation.
(a) A non-employee director of the Company shall automatically become a
Participant in the Plan as of the later of (i) the Effective Date, or (ii) the
date of initial election to the Board. A director who is a regular employee of
the Company is not eligible to participate in the Plan.
(b) A Participant shall cease participation in the Plan as of the date the
Participant (i) fails to be re-elected to the Board, (ii) resigns or otherwise
vacates his position on the Board, or (iii) becomes a regular employee of the
Company.
4. Option Awards
(a) Grant of Options. Each person who is a Participant on the Effective
Date shall be awarded a non-qualified option to purchase 5,000 Common Shares
effective as of the Effective Date, at a price equal to the Market Value of
Common Shares on that date. Any person who becomes a Participant after the
Effective Date shall be awarded non-qualified options to purchase 5,000 Common
Shares effective as of the date of the Annual Meeting at which such election
occurs, or if the Participant is first elected to the Board other than at an
Annual Meeting, as of the date of such election, at a price equal to the Market
Value of Common Shares on that date.
Commencing in 1998, on the day of the Company's annual meeting, a
Participant (other than a director who is first elected after June 30 of the
prior year), shall be awarded non-qualified options to purchase 2,500 Common
Shares, effective as of such date, at a price equal to the Market Value of
Common Shares on that date.
(b) Term and Exercisability. All options shall have a term of 10 years and
shall vest six (6) months after the Grant Date. Notwithstanding the foregoing,
all options shall become immediately exercisable upon a Change of Control of the
Company. In the event of a Change of Control, the Board, or the board of
directors of any corporation assuming the obligations of the Company hereunder
may, as to outstanding options, upon written notice to the Participants, provide
that all unexercised options must be exercised within thirty (30) days of the
date of such notice or they will be terminated.
(c) Method of Exercise. An option granted under the Plan may be exercised,
in whole or in part, by submitting a written notice to the Board, signed by the
Participant or such other person who may be entitled to exercise such option,
and specifying the number of Common Shares as to which the option is being
exercised. Such notice shall be accompanied by the payment of the full option
price for such Common Shares, or shall fix a date (not more than ten business
days from the date of such notice) for the payment of the full option price of
the Common Shares being purchased. Payment shall be made in the form of cash,
Common Shares (to the extent permitted by law), or both. A certificate or
certificates for the Common Shares purchased shall be issued by the Company
after the exercise of the option and full payment therefor.
(d) Termination of Directorship. If a Participant fails to be re-elected to
the Board, resigns or otherwise ceases to be a director of the Company for
reasons other than death or disability (within the meaning of Section 22(e)(3)
of the Internal Revenue Code), all options granted under this Plan to such
Participant which are not exercisable on such date shall immediately terminate,
and any remaining options
E-80
<PAGE>
shall terminate if not exercised before twenty-four (24) months following such
termination, or at such earlier time as may be applicable under Paragraph 4(b)
above.
If a Participant ceases to be a director of the Company by reason of death
or disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code), all options granted under this Plan to such Participant which are not
exercisable on such date shall become immediately exercisable, and may be
exercised at any time before the expiration of twenty-four (24) months following
the date of death or commencement of disability, or such earlier time as may be
applicable under Paragraph 4(b) above.
(e) Non-transferability. Each option and all rights thereunder shall be
non-assignable and non-transferable by the Participant except, in the event of
the Participant's death, by will or by the laws of descent and distribution;
provided, however, that to the extent that transferability pursuant to the
following provisions would not adversely affect the compliance of the Plan with
Rule 16b-3, this option may also be transferred, for no consideration, by the
Participant to the following transferees ("Transferee"):
(A) a member of the Participant's immediate family. For this purpose,
"immediate family" shall include only brothers and sisters (whether by the whole
or half blood) spouse, parents, and natural or adopted children;
(B) a trust for the benefit of members of the Participant's immediate
family; or
(C) a partnership whose only partners are members of the Participant's
immediate family
if the Transferee shall agree to be subject to the same restrictions and
conditions as relate to the Participant pursuant to the Plan.
In the event of the death of a Participant, the representative or
representatives of the Participant's estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise the Participant's
options in whole or in part, or in the event of transfer, the Transferee, may
exercise the option prior to the expiration of the applicable exercise period,
as specified in Paragraph 4(d) above.
(f) No Rights as Shareholder. A Participant shall have no rights as a
shareholder with respect to any Common Shares subject to the option prior to the
date of issuance of a certificate or certificates for such Common Shares.
(g) Compliance with Securities Laws. Options granted and Common Shares
issued by the Company upon exercise of options shall be granted and issued only
in full compliance with all applicable securities laws, including laws, rules
and regulations of the Securities and Exchange Commission and applicable state
Blue Sky Laws. With respect thereto, the Board may impose such conditions on
transfer, restrictions and limitations as it may deem necessary and appropriate
to assure compliance with such applicable securities laws.
5. Shares Subject to the Plan.
(a) The Common Shares to be issued and delivered by the Company upon the
exercise of options under the Plan may be either authorized but unissued shares
or treasury shares of the Company.
(b) The aggregate number of Common Shares of the Company which may be
issued under the
E-81
<PAGE>
Plan shall not exceed 75,000 shares; subject, however, to the adjustment
provided in Paragraph 6 in the event of stock splits, stock dividends, exchanges
of shares or the like occurring after the effective date of this Plan.
(c) Common Shares covered by an option which is no longer exercisable with
respect to such shares shall again be available for issuance under this Plan.
6. Share Adjustments. In the event there is any change in the Company's
Common Shares resulting from stock splits, stock dividends, combinations or
exchanges of shares, or other similar capital adjustments, equitable
proportionate adjustments shall automatically be made without further action by
the Board or Administrator in (i) the number of Common Shares available for
award under this Plan, (ii) the number of Common Shares subject to options
granted under this Plan, and (iii) the option price of options granted under
this Plan.
7. Amendment or Termination. The Board may terminate this Plan at any time,
and may amend the Plan at any time or from time to time; provided, however, that
the Plan shall not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder; and further provided that any
amendment that would increase the aggregate number of Common Shares that may be
issued under the Plan, materially increase the benefits accruing to Participants
under the Plan, or materially modify the requirements as to eligibility for
participation in the Plan shall be subject to the approval of the Company
shareholders to the extent required by Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, or any other governing rules or regulations except that
such increase or modification that may result from adjustments authorized by
Paragraph 6 does not require such approval. If the Plan is terminated, any
unexercised option shall continue to be exercisable in accordance with its
terms.
8. Company Responsibility. All expenses of this Plan, including the cost of
maintaining records, shall be borne by the Company.
9. Implied Consent. Every Participant, by acceptance of an award under this
Plan, shall be deemed to have consented to be bound, on his or her own behalf
and on behalf of his or her heirs, assigns, and legal representatives, by all of
the terms and conditions of this Plan.
10. Delaware Law to Govern. This Plan shall be construed and administered
in accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officer as of the 11th day of April, 1997.
FOILMARK, INC.
By: /s/ Frank J. Olsen, Jr.
--------------------------------
Title: President and Chief Executive
Officer
E-82
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<ARTICLE> 5
<CIK> 0000914066
<NAME> Foilmark, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 226,139
<SECURITIES> 0
<RECEIVABLES> 8,164,482
<ALLOWANCES> 663,000
<INVENTORY> 12,755,949
<CURRENT-ASSETS> 22,577,529
<PP&E> 17,782,596
<DEPRECIATION> 8,273,474
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<CURRENT-LIABILITIES> 7,190,313
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<COMMON> 41,628
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<TOTAL-LIABILITY-AND-EQUITY> 38,231,169
<SALES> 21,527,035
<TOTAL-REVENUES> 21,527,035
<CGS> 15,933,506
<TOTAL-COSTS> 20,190,450
<OTHER-EXPENSES> (46,218)
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<INTEREST-EXPENSE> 440,229
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