U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB/A
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended. APRIL 30, 2001.
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the transition period from...........to............................
Commission file number 0-1684
NEW YORK 11-1688021
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
102 FLOWERFIELD, ST. JAMES, NY 11780
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(Address of principal executive offices) (Zip Code)
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Issuer's telephone number (631) 584-5400
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK
$1.00 PAR VALUE
Name of each exchange on
Title of each class which registered
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COMMON STOCK, PAR VALUE $1.00 PER SHARE NASDAQ SMALL CAP
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Check whether the issuer (1) Filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a 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 |_|
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.|X|
The aggregate market value of the 983,948 shares of voting stock held by non-affiliates of the issuer on June 12, 2001 was $17,711,064. The aggregate market value was computed by reference to the average bid and asked prices of the common stock, on such date, on the NASDAQ system.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
The number of shares outstanding of the issuer's Common $1.00 Par Value stock as of June 12, 2001 was 1,118,311.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy statement to be filed pursuant to regulation 14A for the FY 2001 annual meeting of Shareholders of the Company are incorporated by reference into Part III hereof.
INDEX TO FORM 10-KSB
FISCAL YEAR 2001
ITEM # PAGE
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PART I
1 -Business 3
2 -Properties 4
3 -Legal Proceedings 5
4 -Submission of Matters to a Vote of Security Holders 5
PART II
5 -Market for Registrant's Common Stock and Related Stockholders' Matters 6
6 -Management's Discussion and Analysis of Financial Position and Results of Operations 6
7 -Financial Statements and Supplementary Data 7
Independent Auditors' Reports 8
Consolidated Balance Sheets 9
Consolidated Statements of Operations 10
Consolidated Statement of Stockholders' Equity 11
Consolidated Statements of Cash Flows 12
Notes to Consolidated Financial Statements 13
8 -Changes in and Disagreements on Accounting and Financial Data 23
PART III
9 -Directors and Executive Officers of Registrant 24
10 -Compensation of Executive Officers and Directors 26
11 -Security Ownership of Certain Beneficial Owners and Management 27
12 -Certain Relationships and Transactions 29
13 -Exhibits and Reports on Form 8K 30
Signatures 31
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PART I
Item 1 Description of Business
(a) Business Development
Incorporated in New York in 1946, Gyrodyne Company of America, Inc. (the "Company") was, from its inception and for the next 25 years, engaged in design, testing, development, and production of coaxial helicopters primarily for the US Navy. The Company's 326 acre Flowerfield property in St. James, New York was originally purchased in 1951 for use as a manufacturing facility and to provide sufficient space for flight tests.
Following a sharp reduction in the Company's helicopter manufacturing business and its elimination by 1975, the Company began subdividing and renting out its vacant manufacturing facilities which occupy only a small portion of the total acreage. During fiscal 2000 the Company disposed of the last vestiges of the aerospace division in an agreement with Aviodyne, Inc. of California.
In recent years the Company has concentrated its efforts on the development of its real estate holdings in St. James. Today, the converted buildings consist of approximately 202,000 square feet housing 73 tenants in space suitable for office, engineering, manufacturing, and warehouse use.
Neither the Company nor any of its subsidiaries have ever been in any bankruptcy, receivership or similar proceeding.
References to the Company contained herein include its wholly owned subsidiaries, except where the context otherwise requires.
(b) Business of Issuer
The Company manages its real estate operation, which is its major source of revenue, and is a passive investor as a limited partner in the Callery Judge Grove in Palm Beach County, Florida. It has a total of 16 employees, 15 full time and 1 part time, involved primarily in support of the real estate operation.
Real Estate
Gyrodyne owns a 326 acre site, Flowerfield, primarily zoned for light industry, approximately 50 miles east of New York City on the north shore of Long Island. In the early 60s, on property immediately to the east of Flowerfield, the State of New York began construction of a campus which today is the State University of New York (SUNY) at Stony Brook. Covering over 1,000 acres, SUNY is a major research center complete with a tertiary care and veterans hospital. The Long Island High Technology Incubator, located on the University campus, has spawned numerous corporate graduates creating an ongoing need for research and development rental space. Flowerfield's location also places it in hydrological zone VIII, one of the most liberal with respect to effluent discharge rates.
The Flowerfield property is bisected by the town lines of Smithtown and Brookhaven Townships. The existing buildings and approximately 144 acres are located in the hamlet of St. James, Township of Smithtown, and the contiguous balance of approximately 182 acres is located in the hamlet of Stony Brook, Township of Brookhaven. Of the total acreage, there are 24 acres in Smithtown and 9 in Brookhaven that are zoned for residential use. The vacant industrially zoned property in St. James is the largest undeveloped industrially zoned parcel in the township of Smithtown. The location and size of the property adds to planning flexibility thus permitting a wide range of development alternatives.
There are five main building groups with rental unit sizes ranging from 300 to 25,000 square feet. Given the location and size of rental units, the Flowerfield Industrial Park attracts many smaller companies that are not dependent on extensive material or product handling. As indicated above, companies emerging from the Long Island High Technology Incubator have shown interest in locating at Flowerfield due to its proximity to the University. The Port Jefferson Branch of the Long Island Railroad runs through the property.
In June 1996 the Board of Directors adopted a preliminary Master Plan for development of Flowerfield. Because of change of zone requirements, implementation of any development plan should not be viewed as a short term project. Various themes and uses have already resulted in several drafting revisions and the obvious result of timing delays. Environmental studies have been updated and numerous other studies including archeological, ecological, and traffic have been conducted -- all with no significant adverse findings. The Company believes that it does not incur material costs in connection with compliance with environmental laws. During Fiscal Year 2000, the Company paid approximately $3,200.00 for the removal of loose asbestos floor tiles, the encapsulation of asbestos pipe, and the air monitoring and sample analysis of asbestos.
Development Plans are not final and Management and the Board of Directors have opted to also explore various other scenarios to developing the land and have previously announced considering the sale of the Company itself to achieve recognition of shareholder value.
Citrus Grove
The original limited partner investment of $1.1 million, which was made in 1965, has over the years yielded distributions of approximately $5.5 million and is carried on the books of the Company at $1,585,104. The Company's initial participation through its wholly owned subsidiary, Flowerfield Properties, Inc., represented a 20% interest in the Callery Judge Grove. Based on three subsequent capital infusions in which the Company did not participate, our share is now approximately 10.93%. Although Management has determined that development of the Callery-Judge Grove is in the best interests of the Partnership, the requirement to invest in achieving shareholder value from the Flowerfield property far outweighs this alternative investment opportunity.
The Company's investment in the Grove only changes when capital distributions are received or when cash payments are made to the Grove. There were no such transactions in FY 2001, and the Company does not anticipate receiving any distributions from the Grove in the near future. The Company's last cash receipt from the Grove was in calendar year 1991 and amounted to $294,000.
Aerospace
During the prior fiscal year, the defunct helicopter manufacturing division was disposed of via an Asset Purchase Agreement with Aviodyne, Inc. of California. Terms of the agreement called for the transfer of the proprietary interest, parts inventory, and drawings to Aviodyne and their assumption of all technical support requirements in Gyrodyne's Technology Transfer Agreement with Dornier GmbH, Germany. A cash payment of $50,100 was received by the Company as part of the Aviodyne agreement. The Company also retained its rights to a $1,240,000 payment in the event Dornier executed an option to acquire manufacturing rights to Gyrodyne technology. During April 2001, that option was exercised and the Company received net proceeds of approximately $1 million after related expenses.
Item 2 Description of Property
(c) Description of Real Estate and Operating Data
The Company owns a 326 acre tract of land located on the north shore of Suffolk County, Long Island, New York just west of the State University of New York at Stony Brook. The Company currently has approximately 202,000 square feet of rental space and maintains its corporate office on site.
The land is carried on the Company's books at cost in the amount of $808,338 while the buildings and improvements are carried at a depreciated cost of $1,341,961. At the current time, the property and buildings, except for Building #7 and the surrounding 6 1/2 acres, which are encumbered by a 10 year collateral mortgage in the amount of $1,050,000, are entirely without financial encumbrances. The principal balance of the mortgage as of April 30, 2001 is $742,392.
The average age of all the buildings is approximately 41 years and the facilities continually undergo maintenance repair cycles for roofs, paved areas, and building exteriors. The general condition of internal infrastructure, HVAC, electrical, and plumbing is considered above average for facilities of this age. The grounds feature extensive landscaping, are neatly groomed, and well maintained.
The Company currently maintains a $10 million dollar liability umbrella policy and has insured certain buildings and rent receipts predicated on an analysis of risk, exposure, and loss history. It is Management's opinion that the premises are adequately insured.
Item 3 Legal Proceedings
In the normal course of business, the Company is a party to various legal proceedings. After reviewing all actions and proceedings pending against or involving the Company, Management considers that the aggregate loss, if any, will not be material.
The Company is a party to litigation commenced on or about December 21, 1999, in the Supreme Court of the State of New York, County of Suffolk, and entitled Flowerfield Country Day Camp, Inc. v. Gyrodyne Company of America, Inc., Index No. 99-28289. The complaint alleges three (3) separate causes of action against the Company based upon breach of a certain lease (the "Lease") between the Company and M&M Camp Corp. ("M&M").
In the complaint's first alleged cause of action, plaintiff (the "Day Camp") claims that it is the assignee of M&M in connection with the Lease; that the Lease obliged the Company to construct certain buildings and structures on the demised premises to be used by plaintiff for the operation of a day camp; and that the Lease required the Company to make application to appropriate governmental authorities for the purpose of securing building or other permits necessary to permit the construction of the buildings and other improvements described in the Lease. The complaint further alleges that the Company failed to make or to prosecute diligently the applications for the requisite government approvals and has breached the Lease, and that an equitable decree requiring the Company to perform all of the obligations required of it under the Lease should be entered.
The complaint's second cause of action essentially reiterates the foregoing allegations but adds the additional claim that, in reliance upon the Company's obligations under the Lease, plaintiff incurred various expenses and disbursements and has, by reason of the Company's alleged breach of the Lease, been damaged in a sum estimated to be at least $25,000.00.
The complaint's third cause of action reiterates the allegations set forth in the first cause of action and seeks monetary damages of at least $1,000,000.00. The complaint's third cause of action also purports to set forth a claim for "punitive and exemplary damages", as well as for attorney's fees.
Simultaneously with the filing of the summons and complaint, plaintiff also filed with the Suffolk County Clerk a notice of pendency of action. The notice of pendency was vacated by court order on February 7, 2001.
The Company has filed both an answer and an amended answer to plaintiff's complaint in which the complaint's material allegations were all denied and numerous affirmative defenses and a counterclaim were asserted. The counterclaim sought a declaration that the Company had a contractual right to cancel the Lease because government approvals had not been obtained by January 15, 2000, the date after which, according to the Lease, either party could cancel the Lease if approvals had not been obtained. A determination by the Town of Smithtown Planning and Community Development Department, dated February 1, 2001, denied the Company's application for site plan approval for the day camp site and the Company gave formal notice of cancellation to the Day Camp on February 28, 2001.
By notice, dated August 9, 2001, the Company made a motion for judgment dismissing those portions of the complaint which sought an equitable decree of specific performance of the lease and which sought to recover punitive and exemplary damages, as well as attorney's fees. The motion remains undecided.
The Company is defending this action vigorously, and management believes that the Company has substantial defenses, both substantively and procedurally, and that it is unlikely that the aggregate loss, if any, will be material.
Item 4 Submission of Matters to a Vote of Security Holders
No matters were submitted to the vote of security holders during the fourth quarter of Fiscal Year 2001.
PART II
Item 5 Market for Common Equity and Related Stockholder Matters
(a) Market information
The Company's Common Stock, $1 Par Value (symbol: "GYRO") is traded in the NASDAQ Small-Cap Market. Since June 10, 1948, the NASDAQ Small-Cap Market has been the principal market in which the Company's stock is publicly traded. Set forth below are the high and low sales prices for the Company's stock for each full quarter within the two most recent fiscal years:
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Sales Price Sales Price
Quarter Ended Low High
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Fiscal 2000
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July 31, 1999 $13.625 $22.375
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October 31, 1999 $19.50 $20.25
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January 31, 2000 $16.25 $20.625
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April 30, 2000 $17.25 $22.688
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Fiscal 2001
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July 31, 2000 $15.125 $19.875
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October 31, 2000 $10.625 $20.50
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January 31, 2001 $15.50 $21.484
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April 30, 2001 $14.75 $18.89
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(b) Approximate Number of Equity Security Holders, including shares held in
Street name by brokers.
Number of Holders
Title of Class as of June 12, 2001
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Common Stock, $1.00 Par Value 1,450
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(c) There were no dividends declared in the current or prior fiscal year.
Item 6 Management's Discussion and Analysis of Financial Condition and Results of Operation
The Company continued to show improved earnings from its real estate operation throughout fiscal 2000 and 2001. Increased rental revenues coupled with decreased expenses associated with the rental property accounted for the improvement.
For the twelve month period ending April 30, 2001, revenue from rental property amounted to $2,445,899 as compared to the $2,326,705 posted in the prior year. This 5 percent increase reflects efforts to bring existing and new leases in line with our evaluation of market conditions and a higher occupancy rate. At the same time, rental property expenses which have been the focus for containment and efficient oversight, declined from $1,311,277 last year to $1,223,337 for this 12 month reporting period. Salaries and benefits accounted for $25,532 of the decrease, maintenance on buildings and grounds for $79,777, equipment maintenance $14,078, and interest expense declined by $5,308. Overall, these savings were partially offset by an increase of $25,017 in real estate taxes and other nominal increases in various expense categories including heating and air conditioning repairs and utilities.
Based on the foregoing, income from rental property reached $1,222,562 for the current year as compared to $1,015,428 for the prior 12 month period representing a $207,134 or 20 percent improvement. These record earnings for the year take on even greater proportions when compared to the results from 2 and 3 years prior and reflect improvements of $301,920 (33 percent) and $472,469 (63 percent), respectively.
General and administrative expenses increased to $1,191,859 for fiscal 2001 compared to $1,149,998 the prior year. Legal and consulting expenses for the year include $150,000 for the completion of ongoing 2001 projects and approximately $94,000 for various matters related to our pursuit of maximizing shareholder value. Insurance costs also escalated by approximately $15,000. Partially offsetting these items were a decrease in salaries and benefits of $115,400 and corporate governance of $47,176. The salary and benefit reduction included a decrease of $87,933 in stock option compensation. Income from our Company Pension Plan also declined by $18,528.
Other income totaled $1,045,885 for the 12 months ending April 30, 2001 and $474,284 for the prior year. Both reporting periods included nonrecurring events. This year's results include a payment of $1,240,000 from Dornier GmbH in connection with their executing an option to obtain the manufacturing rights to Gyrodyne's helicopter technology. After related expenses, net proceeds from this transaction amounted to $1,034,491. Fiscal 2001 also includes $33,841 in net expenses related to the termination of three leases. For the prior year, earnings of $408,310 from the sale and income from certain oil investments in Texas and $21,038 from aerospace activities were reflected. Both periods included interest income which amounted to $40,585 and $44,936 in fiscal 2001 and 2000, respectively.
Income before tax amounted to $1,074,473 for the 12 months ending April 30, 2001 compared to a pretax loss of $14,085 for the prior year. Net income totaled $695,763 compared to a net loss of $2,085 for April 30, 2001 and 2000, respectively.
Earnings per share amounted to $.62 for fiscal 2001 compared to $.00 in 2000.
As of April 30, 2001, the Company had cash and cash equivalents of $2,688,838 and working capital of $1,969,651 and anticipates having the capacity to fund normal operating and administrative expenses and its regular debt service requirements. With regard to inflationary effects on its business results, the Company maintains a policy that multi-year leases contain cost pass-through provisions for increases in real estate taxes, fuel costs, insurance, cartage and security services, as applicable. Rental revenues and income from the Callery-Judge Grove investment are subject to fluctuations in market conditions and the general economy.
Subsequent to our fiscal year end and on July 12, 2001, K Capital Partners, LLC, whose holdings of Gyrodyne common stock amount to 142,550 shares (12.75%) filed an amended Form 13D. In their filing, they announced their intention to acquire all of the outstanding equity of Gyrodyne Company of America, Inc. They outline in their proposal that "... current shareholders would have the option to receive either $19.00 per share in cash or a zero coupon bond with a face value of $32.00 per share with a balloon maturity four years from issuance. The issuance of the zero coupon bonds would be conditioned upon a sufficient number of shareholders electing that option so that bonds representing at least $5.0 million aggregate principle would be issued."
The Company announced on July 16, 2001 that Chatsworth Securities, LLC, a Greenwich, Connecticut investment banking firm had been engaged to contact K Capital to explore and clarify various aspects of the proposal.
Item 7 Financial Statements and Supplementary Data
Financial Statements
(1) Independent Auditors' Reports
(2) Consolidated Balance Sheets as of April 30, 2001 and April 30, 2000
(3) Consolidated Statements of Operations for the years ended April 30,
2001 and April 30, 2000
(4) Consolidated Statement of Stockholder's Equity for the years ended
April 30, 2001 and April 30, 2000
(5) Consolidated Statements of Cash Flows for the years ended April 30,
2001 and April 30, 2000
(6) Notes to Consolidated Financial Statements
(7) Schedules
(a) The information required by the following schedules has been
included in the financial statements, is not applicable, or
not required.
Schedule I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII and
XIII.
See following pages.
Independent Auditors' Report
Board of Directors and Stockholders
Gyrodyne Company of America, Inc.
St. James, New York
We have audited the accompanying consolidated balance sheets of Gyrodyne Company of America, Inc. and Subsidiaries as of April 30, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gyrodyne Company of America, Inc. and Subsidiaries as of April 30, 2001 and 2000 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
HOLTZ RUBENSTEIN & CO., LLP
Melville, New York
June 21, 2001
GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30,
---------
ASSETS 2001 2000
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REAL ESTATE (Note 6):
Rental property:
Land $ 4,746 $ 4,746
Building and improvements 4,653,919 4,611,320
Machinery and equipment 254,390 338,495
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4,913,055 4,954,561
Less accumulated depreciation 3,500,473 3,474,111
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1,412,582 1,480,450
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Land held for development:
Land 803,592 803,592
Land development costs 1,215,546 1,239,724
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2,019,138 2,043,316
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Total real estate, net 3,431,720 3,523,766
CASH AND CASH EQUIVALENTS (Note 6) 2,688,838 1,420,924
RENT RECEIVABLE, net of allowance for doubtful
accounts of $50,000 and $23,500, respectively 20,930 80,228
PREPAID EXPENSES AND OTHER ASSETS 136,655 115,145
INVESTMENT IN CITRUS GROVE PARTNERSHIP 1,585,104 1,585,104
PREPAID PENSION COSTS (Note 3) 1,703,155 1,666,331
--------------------------
$ 9,566,402 $ 8,391,498
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 523,152 $ 391,273
Tenant security deposits payable 246,516 228,059
Loans payable (Note 6) 742,392 796,888
Deferred income taxes (Note 2) 1,234,000 849,000
--------------------------
Total liabilities 2,746,060 2,265,220
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COMMITMENTS (Notes 3 and 9)
STOCKHOLDERS' EQUITY: (Note 5)
Common stock, $1 Par Value; authorized 4,000,000
shares; 1,531,086 shares issued and outstanding 1,531,086 1,531,086
Additional paid-in capital 7,539,475 7,545,360
Retained earnings (deficit) 123,856 (571,907)
--------------------------
9,194,417 8,504,539
Less cost of shares of common stock held in treasury (2,374,075) (2,378,261)
--------------------------
Total stockholders' equity 6,820,342 6,126,278
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$ 9,566,402 $ 8,391,498
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See notes to consolidated financial statements
GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended
April 30,
---------
2001 2000
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REVENUE FROM RENTAL PROPERTY
(Notes 9 and 13) $ 2,445,899 $ 2,326,705
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RENTAL PROPERTY EXPENSE:
Real estate taxes 403,841 378,824
Operating and maintenance 651,947 760,158
Interest expense 65,955 71,263
Depreciation 101,594 101,032
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1,223,337 1,311,277
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INCOME FROM RENTAL PROPERTY 1,222,562 1,015,428
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GENERAL AND ADMINISTRATIVE (Note 3) 1,191,859 1,149,998
TERMINATION COSTS (Note 11) 2,115 353,799
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1,193,974 1,503,797
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INCOME (LOSS) FROM OPERATIONS 28,588 (488,369)
----------------------------
OTHER INCOME (EXPENSE):
Aerospace income, net (Note 4) 1,034,491 21,038
Lease termination expense, net (33,841) --
Gain on sale of equipment 4,650 --
Income from oil investment, net -- 48,310
Gain on sale of oil investment -- 360,000
Interest income 40,585 44,936
----------------------------
1,045,885 474,284
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INCOME (LOSS) BEFORE INCOME TAXES 1,074,473 (14,085)
PROVISION (BENEFIT) FOR INCOME TAXES (Note 2) 378,710 (12,000)
----------------------------
NET INCOME (LOSS) $ 695,763 $ (2,085)
============================
NET INCOME PER COMMON SHARE (Note 5):
Basic $ .62 $ --
============================
Diluted $ .62 $ --
============================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Basic 1,117,802 1,104,914
============================
Diluted 1,127,422 1,104,914
============================
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See notes to consolidated financial statements
GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
$1 Par Value
Common Stock
---------------------- Additional Retained Treasury Stock
Par Paid in Earnings ---------------------- Total
Shares Value Capital (Deficit) Shares Cost Equity
-------------------------------------------------------------------------------------------
Balance at May 1, 1999 1,531,086 $1,531,086 $ 7,220,732 $(569,822) 439,766 $(2,529,305) $ 5,652,691
Issuance of stock for services -- -- 134,008 -- (10,092) 58,041 192,049
Issuance of stock grants -- -- 121,059 -- (9,056) 52,083 173,142
Exercise of stock options -- -- 56,076 -- (7,115) 40,920 96,996
Tax benefit from exercise
of stock options -- -- 13,485 -- -- -- 13,485
Net loss -- -- -- (2,085) -- -- (2,085)
-------------------------------------------------------------------------------------------
Balance at April 30, 2000 1,531,086 1,531,086 7,545,360 (571,907) 413,503 (2,378,261) 6,126,278
Issuance of stock for services -- -- 8,315 -- (728) 4,186 12,501
Tax expense from exercise
of stock options -- -- (14,200) -- -- -- (14,200)
Net income -- -- -- 695,763 -- -- 695,763
-------------------------------------------------------------------------------------------
Balance at April 30, 2001 1,531,086 $1,531,086 $ 7,539,475 $ 123,856 412,775 $(2,374,075) $ 6,820,342
===========================================================================================
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See notes to consolidated financial statements
GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
April 30,
---------
2001 2000
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 695,763 $ (2,085)
---------------------------
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 109,669 108,400
Bad debt expense 26,452 30,000
Deferred income tax provision (benefit) 370,800 (40,515)
Non-cash compensation 12,501 302,883
Pension income (36,824) (55,354)
Gain on sale of equipment (4,650) --
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Land development costs 24,178 (156,082)
Accounts receivable 32,847 (47,171)
Prepaid expenses and other assets (2,085) 2,758
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 131,879 30,236
Tenant security deposits 18,457 18,902
---------------------------
Total adjustments 683,224 194,057
---------------------------
Net cash provided by operating activities 1,378,987 191,972
---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (63,427) (142,976)
Proceeds from sale of equipment 6,850 --
---------------------------
Net cash used in investment activities (56,577) (142,976)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans payable (54,496) (54,223)
Proceeds from exercise of stock options -- 96,996
---------------------------
Net cash (used in) provided by financing activities (54,496) 42,773
Net increase in cash and cash equivalents 1,267,914 91,769
Cash and cash equivalents at beginning of year 1,420,924 1,329,155
---------------------------
Cash and cash equivalents at end of year $ 2,688,838 $ 1,420,924
===========================
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See notes to consolidated financial statements
GYRODYNE COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 2001 AND 2000
1. Summary of Significant Accounting Policies:
a. Organization and nature of operations
Gyrodyne Company of America, Inc. and Subsidiaries (the "Company") is primarily a lessor of industrial and commercial real estate to unrelated diversified entities located in Long Island, New York.
The Company is also in the process of developing its real estate holdings for mixed use including residential, industrial and commercial.
During the year ended April 30, 2000, the Company disposed of its remaining aerospace business and oil investment. As such, management considers the operations to be one reportable segment.
b. Principles of consolidation
The accompanying consolidated financial statements include the accounts of Gyrodyne Company of America, Inc. ("GCA") and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
c. Real estate
Real estate assets are stated at cost, less accumulated depreciation and amortization. If there is an event or a change in circumstances that indicates that the basis of the Company's property may not be recoverable, the Company will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (un-discounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property. If the current and projected operating cash flows (un-discounted and without interest charges) are less than the carrying value of its property, the carrying value would be written down to an amount to reflect the fair value of the property.
d. Depreciation and amortization
Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:
Buildings and improvements 10 to 30 years Machinery and equipment 3 to 20 years
Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations are capitalized.
e. Revenue recognition
Minimum revenues from rental property are recognized on a straight-line basis over the terms of the related leases.
1. Summary of Significant Accounting Policies: (Cont'd)
f. Investments
The Company accounts for its investment in a citrus grove under the cost method. Under this method any distributions by the citrus grove will be income in the year of distribution and capital contributions by the Company will increase the value of the investment.
g. Statement of cash flows
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
h. Net income per common share and per common and common equivalent share
The Company has adopted the provisions of Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). It requires dual presentation of basic and diluted earnings per share on the face of the consolidated statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator and denominator of the diluted EPS computation. For the year ended April 30, 2000, the effect on income per share resulting from the assumed exercise of stock options was anti-dilutive. The reconciliation for the year ended April 30, 2001 is as follows:
Year Ended
April 30, 2001
--------------
Income Shares Per Share
-------------------------------------------
Basic EPS $ 695,763 1,117,802 $ .62
Effect of dilutive securities -
common stock options -- 9,620 --
-------------------------------------------
Diluted EPS $ 695,763 1,127,422 $ .62
===========================================
|
i. Income taxes
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
j. Stock-based compensation
The Company applies APB Opinion No. 25 and related interpretations in accounting for stock-based compensation to employees. Stock compensation to non-employees is accounted for at fair value in accordance with Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation."
k. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant assumptions and estimates relate to depreciable lives and the valuation of real estate.
1. Summary of Significant Accounting Policies: (Cont'd)
l. New accounting pronouncements
In 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which was subsequently amended by SFAS No. 137 "Accounting for Derivative Financial Instruments and Hedging Activities - Deferral of the Effective Date of SFAS No. 133". SFAS No. 133 established accounting and reporting standards requiring that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement also requires that changes in the derivative's fair value be recognized in earnings unless specific hedge accounting criteria are met. SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138, was effective for all fiscal quarters beginning after June 15, 2000 and therefore was effective for the Company's fiscal year 2001. This pronouncement did not have a significant impact on the Company's financial condition or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements, ("SAB 101") which provides guidance related to revenue recognition based on interpretations and practices followed by the SEC. SAB 101 requires companies to report any changes in revenue recognition as a cumulative change in accounting principle at the time of implementation in accordance with Accounting Principles Board Opinion No. 20, Accounting Changes. The Company was required to implement SAB 101 no later than the third quarter of fiscal 2001 in accordance with SAB No. 101B "Delaying Implementation of SAB 101," which was issued in June 2000. The implementation of SAB 101 did not have a material effect on the Company's financial position or results of operations.
m. Reclassifications
Certain reclassifications have been made to the consolidated financial statements for the year ended April 30, 2000 to conform with the classification used in 2001.
2. Income Taxes:
The Company files a consolidated U.S. federal income tax return that includes all 100% owned subsidiaries. State tax returns are filed on a consolidated or separate basis, depending on the applicable laws.
The provision (benefit) for income taxes is comprised of the following:
Years Ended
April 30,
---------
2001 2000
----------------------------
Current:
Federal $ -- $ --
State 7,910 28,515
----------------------------
7,910 28,515
---------------------------------------------------------
Deferred:
Federal 268,930 3,462
State 101,870 (43,977)
----------------------------
370,800 (40,515)
----------------------------
$ 378,710 $(12,000)
============================
15
|
2. Income Taxes: (Cont'd)
The components of the net deferred tax liabilities are as follows:
April 30,
---------
2001 2000
---------------------------
Deferred tax assets:
Stock compensation $ 53,000 $ 130,000
Accrued sick and vacation 12,000 14,000
Provision for bad debt 26,000 10,000
Tax loss carryforwards 727,000 936,000
Contribution carryover 5,000 23,000
---------------------------
Total deferred tax assets 823,000 1,113,000
Valuation allowance (19,000) (71,000)
---------------------------
Net deferred tax assets 804,000 1,042,000
---------------------------
Deferred tax liabilities:
Prepaid pension costs (731,000) (699,000)
Unrealized gain on investment in Citrus Grove (1,307,000) (1,192,000)
---------------------------
Total deferred tax liabilities (2,038,000) (1,891,000)
---------------------------
Net deferred income taxes $(1,234,000) $ (849,000)
===========================
|
The Company has federal net operating loss carryforwards of approximately $1,775,000 which can be used to reduce future taxable income through 2020.
A reconciliation of the federal statutory rate to the Company's effective tax rate is as follows:
Years Ended
April 30,
---------
2001 2000
--------------------
U.S. Federal statutory income rate 34.0% 34.0%
State income tax, net of federal tax benefits 7.5 7.5
Permanent differences -- (3.1)
Change in valuation allowance (4.8) 35.4
Other differences, net (1.6) 11.4
-- ----
35.1% 85.2%
====== ====
|
3. Retirement Plans:
The Company has a noncontributory defined benefit pension plan covering substantially all of its employees. The benefits are based on annual average earnings for the highest sixty (60) months (whether or not continuous) immediately preceding the Participant's termination date. Annual contributions to the plan are at least equal to the minimum amount, if any, required by the Employee Retirement Income Security Act of 1974 but no greater than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to service to date but also those expected to be earned in the future. Due to the overfunded status of the plan, no contributions have been made for each of the two years in the period ended April 30, 2001.
3. Retirement Plans: (Cont'd)
Net periodic pension (income) expense consists of the following components:
Years Ended
April 30,
---------
2001 2000
---------------------------
Service cost $ 78,244 $ 49,449
Interest costs 90,514 121,242
Expected return on assets (162,034) (186,676)
Net amortization (43,548) (39,369)
----------- -----------
Pension (income) expense $ (36,824) $ (55,354)
=========== ===========
|
The Plan's funded status is as follows:
April 30,
---------
2001 2000
---------------------------
Change in projected benefit obligation:
Projected benefit obligation, beginning of year $ 1,593,493 $ 1,770,919
Service cost 78,244 49,449
Interest cost 90,514 121,242
Actuarial loss (gain) 39,717 (145,809)
Benefits paid (591,774) (202,308)
----------- -----------
Projected benefit obligation, end of year $ 1,210,194 $ 1,593,493
=========== ===========
Change in plan assets:
Fair value of plan assets, beginning of year $ 2,527,209 $ 2,443,029
Actual return on plan assets (110,892) 295,198
Actual benefits paid (579,192) (211,018)
----------- -----------
Fair value of plan assets, end of year $ 1,837,125 $ 2,527,209
=========== ===========
Reconciliation of funded status:
Funded status $ 626,931 $ 933,716
Unrecognized net actuarial loss 805,982 523,315
Unrecognized transition asset (133,678) (267,358)
Unrecognized prior service cost 403,920 476,658
----------- -----------
Prepaid pension cost $ 1,703,155 $ 1,666,331
=========== ===========
|
Assumption used in accounting for the Company's defined benefit pension plan are as follows:
Years Ended
April 30,
---------
2001 2000
---------------------------
Discount rate 8.0% 8.0%
Rate of increase in compensation 5.0% 5.0%
Expected long-term rate of return on plan assets 8.0% 8.0%
|
Securities of the Company included in plan assets are as follows:
April 30,
---------
2001 2000
---------------------------
Number of shares 78,346 78,346
Market value $ 1,398,476 $ 1,459,194
|
4. Technology Transfer Agreements:
The Company entered into a Technology Transfer Agreement, as amended, with Dornier Gmbh of Germany whereby the Company provided technological documentation and assistance related to the Company's coaxial helicopters. During the year ended April 30, 1999, the Company received $760,000 pursuant to the agreement. Dornier had the option to request technical support and assistance from the Company in order to more fully understand the technology purchased.
During fiscal 2001, Dornier exercised the option, and the Company received a payment of $1,240,000, which is included in the statement of operations as "Aerospace Income", net of legal and royalty expenses. (See Note 9c).
5. Stock Options Plans:
Incentive Stock Option Plan
The Company has a stock option plan (the "Plan") under which participants may be granted either Incentive Stock Options ("ISOs"), Non-Qualified Stock Options ("NQSOs") or Stock Grants. The purpose of the Plan is to promote the overall financial objectives of the Company and its shareholders by motivating those persons selected to participate in the Plan to achieve long-term growth in shareholder equity in the Company and by retaining the association of those individuals who are instrumental in achieving this growth. Such options or grants become exercisable at various intervals based upon vesting schedules as determined by the Compensation Committee. The options expire between August 2001 and August 2005.
The ISOs may be granted to employees and consultants of the Company at a price not less than the fair market value on the date of grant. All such options are authorized and approved by the Board of Directors, based on recommendations of the Compensation Committee.
ISOs may be granted along with Stock Appreciation Rights which permit the holder to tender the option to the Company in exchange for stock, at no cost to the optionee, that represents the difference between the option price and the fair market value on date of exercise. NQSOs may be issued with Limited Stock Appreciation Rights which are exercisable, for cash, in the event of a change of control. In addition, an incentive kicker may be provided for Stock Grants, ISOs and NQSOs, which increases the number of grants or options based on the market price of the shares at exercise versus the option price. A reload feature may also be attached which permits the optionee to tender previously purchased stock, in lieu of cash, for the purchase of the options and receive additional options equal to the number of shares tendered.
Non-Employee Director Stock Option Plan:
The Company adopted a non-qualified stock option plan for all non-employee Directors of the Company in October 1996. Each non-employee Director was granted an initial 2,500 options on the date of adoption of the plan. These options are exercisable in three equal annual installments commencing on the first anniversary date subsequent to the grant. Additionally, each non-employee Director was granted 1,250 options on each January 1, 1997 through 2000, respectively. These additional options are exercisable in full on the first anniversary date subsequent to the date of grant.
5. Stock Options Plans: (Cont'd)
Non-Employee Director Stock Option Plan: (cont'd)
A summary of the Company's various fixed stock option plans as of April 30, 2001 and 2000, and changes during the years then ended is presented below:
Years Ended April 30,
---------------------
2001 2000
----------------------------------------------
Weighted Weighted
Average Average
Exercise Exercise
Fixed Stock Options Shares Price Shares Price
-------------------------------------------------------------------------------------
Outstanding, beginning of year 84,977 $ 16.74 84,579 $ 14.94
Granted 30,250 15.30 26,000 20.09
Exercised -- -- (7,115) 13.63
Canceled (5,250) 15.63 (18,487) 14.42
------- -------
Outstanding, end of year 109,977 $ 16.39 84,977 $ 16.74
======= =======
Options exercisable at year end 92,727 $ 16.65 67,977 $ 15.93
======= =======
Weighted average fair value of
options granted during the year $ 6.55 $ 3.93
========= =========
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The following table summarizes information about stock options outstanding at April 30, 2001:
Options Outstanding Options Exercisable
--------------------------------------------------------------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Price Outstanding Life Price Outstanding Price
-------------------------------------------------------------------------------------------------------------------
$11.80 - $14.81 35,000 3.18 $12.73 30,750 $12.67
$15.65 - $17.26 37,977 3.27 $16.14 24,977 $16.39
$19.98 - $21.01 37,000 3.94 $20.13 37,000 $20.13
Shares reserved for future issuance at April 30, 2001 are comprised of the
following:
Shares issuable upon exercise of stock options under the Company's
Non-Employee Director Stock Option Plan 67,000
Shares issuable under the Company's Non-Employee Director Stock
Compensation Plan 20,720
Shares issuable upon exercise of stock options under the Company's stock
incentive plan 214,033
Shares issuable under the Company's stock grant incentive plan 3,150
-------
304,903
=======
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5. Stock Options Plans: (Cont'd)
In accordance with APB Opinion No. 25, no compensation expense has been recognized for the employee stock option plans. Had the Company recorded compensation expense for the employee stock options based on the fair value at the grant date for awards in the years ended April 30, 2001 and 2000 consistent with the provisions of SFAS No. 123, the Company's net income (loss) and net income (loss) per share would have been adjusted to the following pro forma amounts:
2001 2000
-----------------------------------
Net income (loss), as reported $ 695,763 $ (2,085)
Net income (loss), pro forma 611,628 (46,670)
Basic income (loss) per share, as reported .62 --
Basic income (loss) per share, pro forma .55 (.04)
Diluted income (loss) per share, as reported .62 --
Diluted income (loss) per share, pro forma .54 (.04)
|
For the purposes of the pro forma presentation, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following range of weighted-average assumptions were used for grants during the fiscal years ended April 30, 2001 and 2000.
Years Ended
April 30,
---------
2001 2000
-----------------------------------
Dividend yield 0.0% 0.0%
Volatility 39.0% 40.0% - 45.0%
Risk-Free interest rate 5.75% 5.5%
Expected life 5 Years 1 Year
|
Incentive Compensation Plan:
The Company has an incentive compensation plan for all full-time employees and members of the Board in order to promote shareholder value. The benefits of the incentive compensation plan are realized only upon a change in control of the Company. Change in control is defined as the accumulation by any person, entity or group of 30% or more of the combined voting power of the Company's voting stock or the occurrence of certain other specified events. In the event of a change in control, the Company's plan provides for a cash payment equal to the difference between the plan's "establishment date" price of $15.39 per share and the per share price of the Company's common stock on the closing date, equivalent to 100,000 shares of company common stock. The payment amount would be distributed to eligible participants based upon their respective weighted percentages (ranging from .5% to 18%).
6. Loans Payable:
April 30,
---------
2001 2000
-----------------------------------
Term loan, bank (a) $ 742,392 $ 792,152
Installment loans, other -- 4,736
-----------------------------------
$ 742,392 $ 796,888
===================================
|
6. Loans Payable: (Cont'd)
(a) The loan requires monthly installment payments of $9,643, including interest at 8.45% per annum through September 2005 when the remaining unpaid principal of approximately $470,000 is payable. The loan provides for an adjustment to the fixed interest rate on every fifth anniversary based upon the U.S. Treasury note rate. The loan is secured by the assignment of rents and a first collateral mortgage on certain real estate. The Bank requires compensating balances totaling 20% of the ending monthly balance of the loan to be held in interest bearing and non-interest bearing deposit accounts.
Annual maturities of debt is as follows:
Years ending
April 30, Amount
-----------------------------------------------------------
2002 $ 54,196
2003 59,025
2004 64,149
2005 70,002
Thereafter 495,020
-------------
$ 742,392
=============
|
7. Concentration of Credit Risk:
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and long-term investments. The Company places its temporary cash investments with high credit quality financial institutions and, by policy, limits the amount of credit exposure in any one financial institution. The Company is affected by the economics of the Citrus industry due to its investments therein. Management does not believe significant credit risk exists at April 30, 2001.
8. Supplemental Disclosures of Cash Flow Information:
Years Ended
April 30,
---------
2001 2000
-------------------------------------
Cash paid during the year for:
Interest $ 65,955 $ 71,263
====================================
Income taxes $ 15,417 $ 4,202
====================================
21
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9. Commitments:
a. Lease commitments
The future minimum revenues from rental property under the terms of all noncancelable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows:
Years ending
April 30,
--------
2002 $ 1,731,000
2003 939,000
2004 701,000
2005 654,000
2006 619,000
Thereafter 11,879,000
b. Employment agreements
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The Company has entered into one-year renewable employment agreements with two officers, which provide for annual salaries aggregating $312,500. The agreements provide for a one-time compensation payment of one-half of the current annual compensation in the event of a change in corporate control, as defined.
c. Royalty agreement
The Company is entitled to a 3% royalty on any revenues generated by Aviodyne, Inc. as a result of the assets purchased from the Company. For the years ended April 30, 2001 and 2000 no royalty payments had been earned.
In addition, Aviodyne is responsible for any additional technical support required by Dornier Gmbh under the technology transfer agreement (see Note 4) in exchange for 10% of any proceeds received under the technology transfer agreement. For the year ended April 30, 2001, the Company accrued $124,000 in connection with this arrangement.
10. Fair Value of Financial Instruments:
The methods and assumptions used to estimate the fair value of the following classes of financial instruments were:
The carrying amount of cash, receivables and payables and certain other short-term financial instruments approximate their fair value.
The estimated fair value of the Company's investment in the Citrus Grove Partnership at April 30, 2001, based upon an independent third party appraisal report, is approximately $5,535,000 based on the Company's ownership percentage.
The book value of the Company's loans payable approximates its fair value.
11. Termination Costs:
The Company has incurred approximately $2,000 and $354,000, for the years ended April 30, 2001 and 2000, respectively, of legal, consulting and other related expenses in connection with the termination of the former CEO and President. These costs are included in "Termination Costs" in the statement of operations. The Company anticipates no additional costs in this matter.
12. Related Party Transactions:
Services
A director provided legal services to the Company for which he was compensated approximately $135,000 and $185,000 for the years ended April 30, 2001 and 2000, respectively.
13. Major Customers:
For the year ended April 30, 2001 rental income from three tenants represented 20%, 12% and 11% of total rental income.
For the year ended April 30, 2000 rental income from three tenants represented 18%, 14% and 12% of total rental income.
Item 8 Changes in and Disagreements on Accounting and Financial Data
In connection with the audits for the three most recent years, there have been no disagreements with Holtz Rubenstein & Co., LLP, on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedure.
PART III
Item 9 Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.
(a) The following table lists the names, ages and positions of all executive officers and directors and all persons nominated or chosen to become such. Each director has been elected to the term indicated. Directors whose term of office ends in 2001 shall serve until the next Annual Meeting of Stockholders or until their successors are elected and qualified.
Name & Principal Occupation or Employment Age First Became a Current Board
Director Term Expires
------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney 59 1996 2001
President, CEO, Treasurer, and Director of the Company
Peter Pitsiokos 41 --
Executive Vice President, Secretary & General Counsel of the Company
Frank D'Alessandro 55 --
Controller of the Company
Paul L. Lamb 55 1997 2003
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors of the Company
Robert H. Beyer 68 1977 2002
Consultant
Director of the Company
Philip F. Palmedo 67 1996 2001
Chairman of International Resources Group
Director of the Company
John H. Marburger III 60 1996 2003
Director of Brookhaven National Laboratory
Director of the Company
Robert F. Friemann 53 1998 2001
CPA and Partner of Albrecht, Viggiano, Zureck & Company, P.C.
Director of the Company
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(b) Business Experience
Stephen V. Maroney, age 59, was initially engaged by the Company as an outside consultant in June 1996 and elected to the Board of Directors in July of that same year. Mr. Maroney is the former President of Extebank, a Long Island based commercial bank with a presence in Nassau and Suffolk Counties and New York City. Prior to that appointment, he served as Extebank's Chief Financial Officer. Mr. Maroney was appointed to the position of President, CEO and Treasurer by the Gyrodyne Board of Directors on March 14, 1999. His career on Long Island spans a period of over 35 years and includes involvement in numerous civic, charitable and professional organizations.
Peter Pitsiokos, age 41, joined the Company in November 1992, is the Executive Vice President, and serves as the Company's Secretary and General Counsel. Mr. Pitsiokos was formerly the Executive Assistant District Attorney in Suffolk County, New York. He also served as the Assistant Director of Economic Development and the Director of Water Resources in the Town of Brookhaven. He holds a Law degree from Villanova University and a BA degree from the State University of New York at Stony Brook.
Frank D'Alessandro, age 55, joined the Company in March 1997 as its Controller. Prior to joining the Company, he was Controller of Cornucopia Pet Foods Inc., a distributor of all natural pet foods. Previous to that he spent many years in various financial positions. Mr. D'Alessandro holds an MBA degree in Finance as well as a BBA in Accounting, both from Hofstra University.
Paul L. Lamb, age 55, has been a Director since 1997 and became Chairman of the Board on March 14, 1999. He is a founding partner in the law firm of Lamb & Barnosky, LLP; a past President of the Suffolk County Bar Association; and a Dean of the Suffolk Academy of Law. He holds a B.A. from Tulane University, a J.D. from the University of Kentucky and an LL.M. from the University of London, England.
Robert Beyer, age 68, has been a Director of the company since November 1977. He is also a Director of the Company's subsidiaries. He retired from the United States Naval Reserve in 1993 with the rank of Captain. He retired from his position as Senior Inertial Systems Engineer with the Naval Air Systems Command in 1998. He has an electrical engineering degree from New York University and a graduate degree in International Business from Sophia University in Tokyo, Japan. Mr. Beyer was employed by Gyrodyne from 1962-1973. He was stationed in Japan as a Technical Representative for the Company's remotely piloted helicopters from 1963 to 1970.
John H. Marburger III, age 60, was appointed to the Board of Directors in July 1996. Mr. Marburger was the former President of the State University of New York at Stony Brook (USB). During his stewardship of the University, USB established itself as a class A research center generating a substantial portion of its operating funds from federal research grants. In addition, Mr. Marburger's business community outreach programs resulted in the creation of a high-tech business incubator and numerous collaborative programs. He is currently the Director of the Brookhaven National Laboratory as well as the President of Brookhaven Science Associates. He has a Ph.D. in Applied Physics from Stanford University.
Philip F. Palmedo , age 67, was appointed to the Board of Directors in July 1996. Mr. Palmedo is Chairman of International Resources Group and former President of the Long Island Research Institute. He has shepherded numerous fledgling businesses into the financial and technological markets completing several financing and joint venture technology agreements. He has M.S. and Ph.D. degrees from M.I.T.
Robert F. Friemann, age 53, was appointed to the Board of Directors in October 1998. He is currently a CPA and Partner of Albrecht, Viggiano, Zureck & Company, P.C. Mr. Friemann has over 30 years of professional experience, most of which are with the firm. He provides auditing and accounting expertise to the construction, manufacturing and distribution industries and various not-for-profit organizations. Mr. Friemann is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants. In addition, he has been an instructor for the New York State Society and is the author of numerous articles on issues including taxation, accounting and auditing.
(c) Compliance with Section 16(a) of the Exchange Act
A review of all Forms 3 & 4 filed with the Registrant indicates that there were no late filings of any required Forms 3 or Forms 4 with the Securities and Exchange Commission for fiscal year 2001. A review of current year filings indicates that no 10% holder of Gyrodyne Common Stock $1 Par Value failed to file timely reports.
Item 10 Compensation of Executive Officers and Directors
(a) Executive Compensation
During the fiscal years ended April 30, 2001 and April 30, 2000, two Directors or Officers and during the fiscal year ended April 30, 1999, one Director or Officer received remuneration in excess of $100,000 in such capacity.
SUMMARY COMPENSATION TABLE
Annual Compensation
Long term Compensation
------------------------------------
Annual Compensation Awards Pay outs
------------------------------------------------------------------------------
Securities
Other Annual Restricted Underlying LTIP
Name and Salary Bonus Compensation Stock Options/LSARs Payout All Other
Principal Position Year ($) ($) ($) Award ($) (#) ($) Compensation
------------------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney
President & CEO 2001 181,058 0 0 0 10,500 0 0
Stephen V. Maroney
President & CEO 2000 176,269 0 4,875 (A) 0 7,500 0 0
Stephen V. Maroney
President & CEO 1999 20,856 0 0 0 0 0 0
Director of R.E. Dev. 76,135 0 59,500 (A) 0 1,250 0 0
Peter Pitsiokos
Exec.V.P. and Secretary 2001 127,242 0 20,647 (B) 0 8,000 0 0
Peter Pitsiokos
Exec.V.P. and Secretary 2000 130,020 0 72,764 (B) 0 3,500 0 0
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(A) Mr. Maroney received shares for his services as Company Director with a fair market value of $4,875 in FY 00 and $14,500 in FY99. Pursuant to his Consulting Agreement with the Company in FY99, Mr. Maroney also received stock payments in lieu of cash with a fair market value of $45,000. The Registrant has concluded that aggregate amounts of personal benefits to any of the current executives does not exceed the lesser of $50,000 or 10% of compensation and bonuses reported above for the named executive officers, and that the information set forth in tabular form above is not rendered materially misleading by virtues of the omission of such personal benefits.
(B) Mr. Pitsiokos received 525 shares in FY 00 from stock awards granted in FY 98 with a value of $8,334. In addition, for the year ended 2000, he received 4,093 shares from the exercise of stock appreciation rights granted in FY 95, 25% of which was amortized this fiscal year with a value of $20,647 and 75% of which was amortized last fiscal year with a value of $61,942.
Option/SAR Grants in Last Fiscal Year
------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
------------------------------------------------------------------------------------------------
Stephen V. Maroney 10,500 34.7% $15.647 8/2/05
Peter Pitsiokos 5,000 16.5% $15.647 8/2/05
Peter Pitsiokos 3,000 9.9% $13.194 8/26/05
|
AGGREGATED OPTION/LSAR EXERCISED IN LAST FISCAL YEAR
AND FY-END OPTION/LSAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options/LSAR's at Options/LSAR's at
Acquired on Value April 30, 2001 April 30, 2001 ($)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- -------------------------
Stephen V. Maroney -- -- 22,000/5,250 $39,786/$11,566
President and CEO
Peter Pitsiokos -- -- 11,500/2,500 $21,258/$5,508
Exec. V.P. and Secretary
|
(b) Compensation of Directors
In calendar year 2000, each Director was entitled to receive a fee of $7,500 a year, $1,000 per Board meeting attended and $500 for each Committee meeting attended. Their compensation was paid in stock for January and February, 2000 and in cash for the remainder of the year. For the calendar year 2000, shares of stock were issued in January of 2001. As of January 1, 2001, each Director will receive a fee of $12,000 a year to be paid in cash. Reimbursement for travel and Company business related expenses will continue to be paid in cash. The Company continued its policy which states that Directors who are also employees of the Company do not receive any additional compensation for their services as Directors.
(c) Employment Contracts
(c-1) Effective December 7, 2000, the Company entered into one year renewable employment contracts with Stephen V. Maroney as President, Chief Executive Officer, and Treasurer and Peter Pitsiokos as Executive Vice President, Secretary, and General Counsel. Their annual salaries were established at $190,000 and $122,500, respectively. The contracts provide for a severance payment equivalent to six months salary in the event of a change in control.
Item 11 Security Ownership of Certain Beneficial Owners and Management
(a) The following table sets forth as of June 12, 2001 those persons or entities known by the Company to be Beneficial Owners of more than 5% of the Company's Common Stock $1 Par Value, its only equity security.
Type of Number of Percent of
Name and Address Ownership shares Owned Class
---------------- --------- ------------ -----
K Capital Partners, LLC
441 Stuart Street, 6th Floor
Boston, Massachusetts 02116 Beneficial 142,550 12.75
Catherine Papadakos
Village on the Green
2481-C Oakleaf Lane
Clearwater, Florida 33763-1237 Beneficial 80,789 7.22
Gyrodyne Company of America, Inc.
St. James, NY 11780 (A) Beneficial 78,346 7.01
Private Capital Management, Inc.
8889 Pelican Bay Blvd., Suite 500
Naples, Florida 34108 Beneficial 61,361 5.50
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(A) As Gyrodyne has the authority to direct HSBC Holdings, the Trustee of the Gyrodyne Pension Plan, to vote the securities of the Company held by the Pension Fund, Gyrodyne Company of America, Inc. has been listed above as the beneficial owner of the 78,346 shares held by HSBC Holdings as Trustee for the Gyrodyne Pension Fund.
(b) In addition, the following table as of June 12, 2001 includes the outstanding voting securities beneficially owned by the executive officers and directors, and the number of shares owned by directors and executive officers as a group.
Shares of stock
Beneficially Pct. of Common
Name & Principal Occupation or Employment Owned Stock Owned
----------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney 13,512 1.21
President, CEO, Treasurer and Director of the Company
Peter Pitsiokos 9,756 (C) (A)
Executive Vice President, Secretary & General Counsel of the Company
Paul L. Lamb 9,537 (D) (A)
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors of the Company
Robert H. Beyer 6,876 (B) (A)
Consultant
Director of the Company
John H. Marburger III 3,662 (A)
Director of Brookhaven National Laboratory
Director of the Company
Philip F.Palmedo 7,597 (A)
Chairman of International Resources Group
Director of the Company
Robert F. Friemann 2,992 (A)
CPA and Partner of Albrecht, Viggiano, Zureck & Company, P.C.
Director of the Company
All Directors and Executive
Officers as a Group (7 persons) 53,932 4.82
|
(A) Less than 1%.
(B) Does not include his wife's ownership of 1,638 shares in which he denies any
beneficial interest.
(C) Does not include wife's and minor children's ownership of 447 shares in
which he denies any beneficial interest.
(D) Includes 7,498 shares held by Lamb & Barnosky, LLP Profit Sharing Trust. Mr.
Lamb is a trustee of the Profit Sharing Trust.
Item 12 Certain Relationships and Related Transactions
(a) Transactions with Management and Others
Their were no transactions with any officer, director, or beneficial owner of more than 5% of the Company's common stock, or any relative or spouse of the foregoing persons, that had a direct or indirect interest in any transaction involving the Company or its subsidiaries which exceeded $60,000 in the past two years.
(b) Certain Relationships and Transactions
The Company has engaged the firm of Lamb & Barnosky, LLP as outside legal counsel for a number of years. Director Lamb is a partner in the firm to which Gyrodyne paid legal fees of $135,158 and $184,395 in FY 2001 and FY 2000, respectively.
(c) Indebtedness of Management
No loans were made to any officer, director, or any member of their immediate families during the fiscal year just ended, nor were any amounts due and owing the Company or its subsidiaries from those parties at fiscal year end.
Item 13 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Restated Certificate of Incorporation of Gyrodyne Company of
America, Inc. dated December 7, 1996*
4.2 Restated By-laws of Gyrodyne Company of America, Inc.*
4.3 1993 Stock Incentive Plan
4.4 1996 Non-Employee Directors' Stock Option Plan
21 List of Subsidiaries
99.1 Lease dated as of May 1, 1999 between the Company as Landlord and
Carco Group, Inc. as Tenant, expiring August 31, 2002**
99.2 Lease dated November 11, 1996, between the Company as Landlord and
Flowerfield Celebrations, Inc., expiring May 1, 2031.**
99.3 Lease dated October 7, 1997, between the Company as Landlord and
Carin Perez and Luis Perez (Kiddie Academy) as Tenant, expiring
August 31, 2006.**
99.4 1999 Incentive Compensation Plan, a Cash Bonus Plan
99.5 Amended and Restated Agreement of Limited
Partnership of Callery-Judge Grove, A New York
Limited Partnership dated as of May 8, 1995
99.6 Summons and Complaint, Flowerfield Country Day Camp, Inc. v.
Gyrodyne Company of America, Inc., Supreme Court of the
State of New York, County of Suffolk, Index No. 99-28389.***
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Although several of the above-referenced Exhibits have been filed manually in the past, copies are being filed with this Form 10KSB in order for them to be accessible electronically.
* These governing documents have been superceded by Restated Certificate of Incorporation filed with the New York Secretary of State, August 10, 2001 and Amended and Restated By-Laws dated August 6, 2001. They are incorporated herein by reference to the Company's Form 8-K filed on August 13, 2001.
** The leases included in these exhibits are all of the leases that extend beyond 5 years and/or constitute more than 10% of the rent roll.
*** See description in Item 3, Legal Proceedings.
(a) Reports on Form 8-K
During the last quarter of the fiscal year ended April 30, 2001, the period covered by this Report, Gyrodyne did not file any reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
GYRODYNE COMPANY OF AMERICA, INC.
********************
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following on behalf of the Registrant and in the capacities and on the dates indicated.
RESTATED
CERTIFICATE OF INCORPORATION
OF
GYRODYNE COMPANY OF AMERICA, INC.
Under Section 807 of the Business Corporation Law
The undersigned, being respectively the President and Secretary of GYRODYNE COMPANY OF AMERICA, INC. (hereinafter referred to as the "Corporation") do hereby certify and set forth:
1. The name of the Corporation is GYRODYNE COMPANY OF AMERICA, INC. The Corporation was originally incorporated under the name P.C. Helicopter Corporation.
2. The Certificate of Incorporation of the Corporation was filed by the Department of State on the 7th day of August, 1946.
3. The Restated Certificate of Incorporation restates the text of the Certificate of Incorporation of the Corporation as heretofore amended without making any amendment or change thereto, except the Certificate of Incorporation is changed by the Restated Certificate of Incorporation to effect a change in the post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon him.
4. The change in the post office address for mailing a copy of service of process against the Corporation as set forth in Article Fourth of the Restated Certificate of Incorporation has been authorized by resolution adopted by vote of the Board of Directors pursuant to Section 803 of the Business Corporation Law.
5. The Restated Certificate of Incorporation of the Corporation is hereby set forth as follows:
"FIRST: The name of the Corporation is GYRODYNE COMPANY OF AMERICA, INC. The Corporation was originally incorporated under the name P.C. Helicopter Corporation.
SECOND: The purpose or purposes for which this Corporation is formed are as follows, to wit:
To design, manufacture, assemble, build, repair, maintain, operate, lease, let, purchase, sell, develop, test, import, export, alter, service, demonstrate and generally deal in and with aircraft of every kind and description, by whatever power actuated and by whatever agency or method sustained and stabilized, both heavier and lighter than air, whether military or civil, whether manned or unmanned, including, without limitation, helicopters, aeroplanes, hydroplanes, missiles, hydro-aeroplanes, dirigibles, balloons, seaplanes, jet planes, all kinds and types of devices now known or which may hereafter be discovered or invented for navigating the air, and all manner of scientific, commercial and military rockets, vehicles and devices intended to penetrate beyond the earth's atmosphere into outer space, whether now known or hereafter discovered, and their fittings, furnishings, instruments, accessories, appurtenances, armor and armorment of every kind and description, and all parts or components of the foregoing, and all supplies and things in any way relating to or used in connection with the foregoing.
To construct, lease from others, purchase or otherwise acquire, maintain, operate, lease to others and sell or otherwise dispose of airfields, airports, plants, works, stations, depots, hangars, and all other conveniences and appurtenances appropriate thereto; to carry, convey or transmit goods, passengers, mails and intelligence, by means of aircraft, to conduct experiments on its own account and for others, to take out, acquire and operate under letters of patent, or to license others to operate under such letters controlled by it.
To design, manufacture, purchase, sell and deal in, and to install upon aircraft, weapons, armor and other protective coverings of every kind and description; apparatus for measuring height and distance, determining location and direction, and for signalling or communicating in any way.
To explore, prospect, drill for, produce, market, sell and deal in and with petroleum, mineral, animal, vegetable and other oils, asphalt, gasoline, napthene, hydrocarbons, oil shales, sulphur, salt, clay, coal, minerals, mineral substances, metals, ores of every kind, or other mineral or non-mineral, liquid, solid, or volatile substances and
products, by-products, combinations and derivatives thereof, and to buy, lease, hire, contract for, invest in, and otherwise acquire, and to own, hold, maintain, equip, operate, manage, mortgage, deal in and with, and to sell, lease, exchange, and otherwise dispose of oil, gas, mineral and mining lands, wells, mines, quarries, rights, royalties, over-riding royalties, oil payments, and other oil, gas and mineral interests, claims, locations, patents, concessions, easements, rights of way, franchises, real and personal property, and all interests therein, tanks, reservoirs, warehouses, storage facilities, elevators, terminals, markets, docks, piers, wharves, drydocks, bulkheads, pumping stations, tank cars, trains, automobiles, trucks, cars, tankers, ships, tugs, barges, boats, vessels, aircraft, and other vehicles, crafts or machinery for use on land, water or air, for prospecting, exploring and drilling for, producing, gathering, manufacturing, refining, purchasing, leasing, exchanging or otherwise acquiring, selling, exchanging, trading for, or otherwise disposing of such mineral and non-mineral substances; and to design, construct, drill, bore, sink, develop, improve, extend, maintain, operate and repair wells, mines, plants, works, machinery, appliances, rigging, casing, tools and storage for this corporation and other persons, associations or corporations.
To acquire by purchase, subscription, underwriting, or otherwise, or become interested in stock or stocks, warrants or options, security or securities, royalty or royalty interests, property or rights of any other corporation or association, and to participate in syndicates and underwritings; to cause to be formed, reorganized, merged, consolidated or liquidated and to promote, take charge of, or aid, in any way permitted by law, the formation, reorganization, merger or liquidation of any corporation or association.
To carry on a general mercantile, industrial, investing and trading business in all its branches; to devise, invent, manufacture, fabricate, assemble, install, service, maintain, alter, buy, sell, import, export, license as licensor or licensee, lease as lessor or lessee, distribute, job, enter into, negotiate, execute, acquire and assign contracts in respect of, acquire, receive, grant and assign licensing arrangements, options, franchises, and other rights in respect of, and generally deal in and with, at wholesale and retail, as principal, and as sales, business, special or general agent, representative, broker, factor, merchant, distributor, jobber, advisor, or in any other lawful capacity, goods, wares, merchandise, commodities and unimproved, improved, finished, processed and other real, personal and mixed property of any and all kinds, together with the components, resultants and by-products thereof; to acquire, by purchase or otherwise own, hold, lease, mortgage, sell, or otherwise dispose of, erect, construct, make, alter, enlarge, improve and to aid or subscribe toward the
construction, acquisition or improvement of any factories, shops, storehouses, buildings and commercial and retail establishments of every character, including all equipment, fixtures, machinery, implements and supplies necessary or incidental to, or connected with, any of the purposes or business of the corporation; and generally to perform any and all acts connected therewith or arising therefrom or incidental thereto, and all acts proper or necessary for the purpose of the business.
To engage generally in the real estate business as principal, agent, broker, and in any lawful capacity, and generally to take, lease, purchase or otherwise acquire and to own, use, hold, sell, convey, exchange, lease, mortgage, work, clear, improve, develop, divide, and otherwise handle, manage, operate, deal in and dispose of real estate, real property, lands, houses, buildings and other works and any interest or right therein; to take, lease, purchase or otherwise acquire, and to own, use, hold, sell, convey, exchange, hire, lease, pledge, mortgage and otherwise handle and deal in and dispose of, as principal, agent, broker, and in any lawful capacity, such personal property, chattels, chattels real, rights, easements, privileges, choses in action, notes, bonds, mortgages, and securities as may lawfully be acquired, held, or disposed of; and to acquire, purchase, sell, assign, transfer, dispose of, and generally deal in and with, as principal, agent, broker, and in any lawful capacity, mortgages and other interests in real, personal, and mixed properties; to carry on a general construction, contracting and building business as principal, agent, representative, contractor, subcontractor and in any other lawful capacity.
To apply for, register, obtain, purchase, lease, take licenses in respect of or otherwise acquire, and to hold, own, use, operate, develop, enjoy, turn to account, grant licenses and immunities in respect of, manufacture under and to introduce, sell, assign, mortgage, pledge or otherwise dispose of, and in any manner deal with and contract with reference to:
(a) inventions, devices, formulae, processes and any improvements and modifications thereof;
(b) letters patent, patent rights, patented processes, copyrights, designs and similar rights, trade-marks, trade symbols and other indications of origin and ownership granted by or recognized under the laws of the United States of America or of any state or subdivision thereof, or of any foreign country or subdivision thereof, and all rights connected therewith or appertaining thereunto;
(c) franchises, licenses, grants and concessions;
To have, in furtherance of the corporate purposes, all of the powers conferred upon corporations organized under the
Business Corporation Law subject to any limitations thereof contained in this Certificate of Incorporation or in the laws of the State of New York.
THIRD: No holder of stock of the Corporation shall be entitled as a matter of right to subscribe for, purchase or receive any shares of its stock, whether out of the number of shares authorized by the Certificate of Incorporation or by amendment thereof, or out of the shares of stock of the Corporation acquired by it after the issuance thereof, or any rights or options to subscribe for, purchase or receive stock of the Corporation which it may issue or sell, nor shall any holder of stock of the Corporation be entitled as a matter of right to subscribe for, purchase or receive any bonds, debentures or other securities which the Corporation may issue or sell that shall be convertible into or exchangeable for stock of the Corporation or to which shall be attached or appertain any warrant or warrants or other instrument or instruments or rights that shall confer upon the holder or owner of such securities the right to subscribe for, purchase or receive from the Corporation any shares of its stock; but any stock of the Corporation, whether now or hereafter authorized or acquired by the Corporation, and any rights or options to subscribe for, purchase or receive stock from the Corporation, and any bonds, debentures or other securities of the Corporation convertible into or exchangeable for stock of the Corporation or to which shall be attached or appertain any warrant or warrants or other instrument or instruments or rights that shall confer upon the holder or owner of such securities the right to subscribe for, purchase or receive from the Corporation any shares of its stock, may be issued and disposed of by the Board of Directors to such persons, firms, corporations or associations for such consideration, upon such terms and in such manner as the Board of Directors may in its discretion determine, without offering any thereof on the same terms or on any terms to the stockholders then of record or to any class of stockholders; provided, however, that no share of stock having a par value shall be issued for a consideration in an amount less than the par value of such shares of stock.
FOURTH: The office of the Corporation is to be located in St.
James, Town of Smithtown, County of Suffolk, State of New York. The
address to which the Secretary of State shall mail a copy of any
process against the Corporation served upon him pursuant to law is:
Gyrodyne Company of America, Inc., 7 Flowerfield, Suite 28, St.
James, New York 11780.
FIFTH: The duration of said Corporation shall be perpetual.
SIXTH: The Board of Directors shall consist of not less than three (3) nor more than nineteen (19) directors, who need not be shareholders. Within these limits, the number of directors of the Corporation shall be fixed from time to time
by resolution of the Board of Directors. The directors in office shall be divided, with respect to the time for which they severally hold office, into three classes: Class I, Class II and Class III. The term of office of the Class I directors will expire at the 1997 annual meeting of shareholders, the term of office of the Class II directors will expire at the 1998 annual meeting of shareholders and the term of office of the Class III directors will expire at the 1999 annual meeting of shareholders following their election, and shall hold office until their successors have been duly elected and qualified. At each annual meeting of shareholders, commencing with the 1997 annual meeting, directors elected to succeed the directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders following their election. Directors shall hold office until their successors have been duly elected and qualified, provided, however, that a director may resign. If the number of directors is not evenly divisible into thirds, the Board shall determine which Class or Classes shall have one extra director. Any additional director of any Class elected to the Board of Directors to fill a vacancy from an increase in such Class shall hold office for the term that expires as to that Class. The tenure of a director shall not be affected by any decrease in the number of directors so made by the Board.
SEVENTH: The aggregate number of shares which the Corporation is authorized to issue is four million (4,000,000), all of which shall be of par value of $1.00 per share.
EIGHTH: All of the shares which the Corporation is authorized to issue shall be of one class, and shall be designated common stock."
6. The foregoing Restated Certificate of Incorporation of the Corporation was authorized by vote of the Board of Directors.
IN WITNESS WHEREOF, this Restated Certificate of incorporation has been subscribed this 7th day of December, 1996 by the undersigned who affirm that the statements made herein are true under the penalties of perjury.
/s/ Dimitri P. Papadakos ------------------------------- DIMITRI P. PAPADAKOS, President /s/ Peter Pitsiokos -------------------------- PETER PITSIOKOS, Secretary |
RESTATED
BY-LAWS
OF
GYRODYNE COMPANY OF AMERICA, INC.
(Incorporated under the Laws of New York)
ARTICLE 1
OFFICES
Section 1. OFFICES. The principal office shall be in the village of St. James, Town of Smithtown, County of Suffolk, State of New York. The Corporation may have offices and places of business at such other places, both within and without the State of New York, as may be determined by the Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 1. PLACE OF MEETINGS. Annual meetings and special meetings shall be held at such place, within or without the State of New York, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, or whenever shareholders entitled to call a special meeting shall call the same, the meeting shall be held at the office of the Corporation in the State of New York.
Section 2. ANNUAL MEETINGS. The annual meeting of stockholders of the Corporation commencing in 1993 shall be held during the month of October each year on the last Friday at 11:30 A.M. other than a legal holiday, or at such other date and time as shall be designated from time to time by the Board of Directors. At each duly constituted annual meeting, the stockholders shall elect a Board of Directors by a plurality vote, and transact such other business as may properly came before the meeting.
Section 3. ANNUAL ELECTION OF DIRECTORS. The Board of Directors, or, if the Board shall not have made the appointment, the Chairman presiding at any meeting of shareholders, shall have the power to appoint one or more persons to act as inspectors of election at the meeting or any adjournment thereof, but no candidate for the office of director shall be appointed as an inspector at any meeting for or the election of directors. The inspectors shall be sworn faithfully to perform their duties and shall make a written certificate of the result of the elections.
Section 4. SPECIAL MEETINGS. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President, and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. The business transacted at all special meetings shall be confined to the subjects stated in the call.
Section 5. NOTICES. Written notice of annual and special meetings of stockholders, stating the time, place and subject thereof, shall be given by or at the direction of the Board of Directors. Such notice shall be mailed, postage prepaid, at least thirty (30) days before such meeting, to each stockholder of record entitled to vote thereat at such address as appears on the books of the Corporation, except such as may in writing waive such notice. Notice of any special meeting shall state the purpose or purposes for which the meeting is called.
Section 6. QUORUM. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by law. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meetings at which the requisite amount of voting stock shall be represented, any business may be transacted which might have been transacted at the meeting as originally noticed.
Section 7. VOTING. At any meeting of the shareholders, every registered owner of
shares entitled to vote may vote in person or by proxy and, except as otherwise
provided by statute, in the Certificate of Incorporation or these By-Laws, shall
have one vote for each such share standing in his name on the books of the
Corporation. Shareholders are not entitled to cumulative voting as permitted by
Section 618 of the Business Corporation Law of New York State. Except as
otherwise required by statute, the Certificate of Incorporation or these
By-Laws, all corporate action, other than the election of directors, to be taken
by vote of the shareholders shall be authorized by a majority of the votes cast
at such meeting by the holders of shares entitled to vote thereon, a quorum
being present.
Section 8. SECRETARY OF MEETING. The Secretary or Assistant Secretary of the Corporation shall act as secretary of all meetings of the shareholders. In the absence of the Secretary or Assistant Secretary, the Chairman of the meeting shall appoint any other person to act as secretary of the meeting.
ARTICLE III
DIRECTORS
Section 1. NUMBER, QUALIFICATION, NOMINATION, AND TERM. The property and
business of the Corporation shall be managed by its Board of Directors,
consisting of not more than nineteen (19) persons and not less than three (3).
The number of directors may be changed from time to time within the limits
herein set forth by resolution of the Board of Directors. Directors need not be
stockholders. Candidates for the Board of Directors, exclusive of sitting
directors, may be nominated by shareholders of record serving notice of such
nomination on the Secretary of the Corporation no later than one hundred fifty
(150) days prior to the annual meeting of shareholders, in accordance with the
notice provision of Securities and Exchange Commission Rule 14a-8 and the
procedural requirements of such rule. The directors in office shall be divided,
with respect to the time for which they severally hold office, into three
classes: Class I, Class II and Class III. The term of office of the Class I
directors will expire at the 1997 annual meeting of shareholders, the term of
office of the Class II directors will expire at the 1998 annual meeting of
shareholders and the term of office of the Class III directors will expire at
the 1999 annual meeting of shareholders following their election. Directors
shall hold office until their successors have been duly elected and qualified.
At each annual meeting of shareholders, commencing with the 1997 annual meeting,
directors elected to succeed the directors whose terms then expire shall be
elected for a term of office to expire at the third succeeding annual meeting of
shareholders following their election, and shall hold office until their
successors have been duly elected and qualified, provided, however, that a
director may resign. If the number of directors is not evenly divisible into
thirds, the Board shall determine which Class or Classes shall have one extra
director. Any additional director of any Class elected to the Board of Directors
to fill a vacancy from an increase in such Class shall hold office for the term
that expires as to that Class. The tenure of a director shall not be affected by
any decrease in the number of directors so made by the Board.
Section 2. REMOVAL AND VACANCIES. Any director or directors may be removed at any time, but only for "cause" by the affirmative vote of two-thirds (2/3) of the directors then in office. "Cause" for purposes hereof shall be defined as criminal acts, misfeasance of office or other similar acts. If the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, increase in the authorized number of directors, or otherwise, the remaining directors, though less than a quorum or by the sole remaining director shall choose a successor, successors or additional directors who shall hold office for the remainder of the term of the vacant office. In the event of a vacancy, the Board of Directors, may, in its discretion, reduce the number of directors by allowing the vacated office to remain vacant. In the event that the Board of Directors increases the number of directors, such new directors will be elected by the Board of Directors to a Class or Classes of directors so designated by the Board for the term(s) to expire at the annual meeting(s) of the Corporation next electing such Class or Classes.
Section 3. ADDITIONAL POWERS. In addition to the powers and authorities by these By-Laws expressly conferred upon it, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.
Section 4. MEETING OF THE BOARD OF DIRECTORS. A regular meeting of the Board of Directors shall be held without call or notice immediately after the annual meeting of stockholders at the same place at which such meeting is held, or at such other place within or without the State of New York as the directors shall designate; thereafter regular meetings of the Board of Directors shall be held on such day of the month as may be set at the previous meeting of the Board of Directors. Such regular meeting may be held at such time and such place as the Board of Directors shall designate.
Special meetings of the Board of Directors may be held at any time and at any place upon the call of the President and shall be called by the President or Secretary or other officer performing his duties, on the request of two directors, which request need not be in writing. Notice of special meetings shall be given by the Secretary or other officer performing his duties, orally or by telegraph or by mail. Such notice shall be given or sent or mailed not less than five (5) days before the meeting. Meetings may be held at any time or any place without notice if all of the directors are present or if those not present waive notice of the meeting in writing either before or after the meeting.
Section 5. EXECUTIVE COMMITTEE. The Board of Directors may appoint three or more of its directors to act as an Executive Committee. The Committee shall be comprised of the Chairman and non-employee directors. Such Committee shall, when the Board of Directors is not meeting, assume such duties and perform such services as may be assigned to it by the Board of Directors, with the same force and effect as though the Board of Directors had performed the same. A quorum of the Executive Committee shall be constituted when a majority of the same are present.
The Executive Committee has all the authority of the Board of Directors, except with respect to certain matters that by statute may not be delegated by the Board of Directors. The Committee acts only in the intervals between meetings of the full Board of Directors. It acts usually in those cases where it is not feasible to convene a special meeting of the Board or where the agenda is the technical completion of undertakings already approved in principle by the Board.
All action by the Executive Committee shall be reported to the Board of Directors at its meeting next succeeding such action, and shall be subject to revision or alteration by the Board of Directors; provided that no rights or acts of third parties shall be affected by any such revision or alteration.
The Executive Committee shall fix its own rules of procedure and shall meet where and as provided by such rules, or by resolution of the Board
of Directors, but in every case the presence of a majority of its members shall be necessary to constitute a quorum.
In every case, the affirmative vote of a majority of all members of the Committee present at the meeting shall be necessary to its adoption of any resolution.
Section 6. OTHER COMMITTEES OF THE BOARD. The Board of Directors may appoint directors to comprise one or more of the following Committees who shall serve at the pleasure of the Board.
Audit Committee. The Committee shall be comprised of non-employee directors. The duties of the Committee include recommendation of the independent accountants to be appointed by the Board; approval of the scope of the accountants' examination and other services; review of financial statements, including auditors' opinions and management letters, and reporting to the Board the Committee's recommendation with respect thereto; review of financial and/or fiscal policies and policy decisions; determination of the duties and responsibilities of the officer with internal auditing responsibility; approval of the scope of such officer's work and review of the results thereof and, through review of the results of internal and external audits, monitoring of internal programs to ensure compliance with laws, regulations and the Company's responsibilities for financial reporting to the public.
Executive Compensation Committee. The Committee shall be comprised of non-employee directors. The duties of the Committee include approval of salaries to be paid to senior executive officers; approval of or delegation to the President of the authority to approve the salaries of all other officers; and the annual review of all significant financial relationships which directors and officers have with the Company, directly or indirectly. The duties also include investigation of any complaints concerning possible conflicts of interests involving directors or officers of the Company, recommendations to the Board of actions to be taken to remove any such conflicts and recommendation of policies or procedures designed to avoid any such conflicts of interest.
Stock Option Committee. The Committee shall be comprised of non-employee directors not eligible to participate in the Company's 1993 Stock Incentive Plan or other stock option plans for the benefit of Company employees. The duties of the Committee involve the review and administration of employee stock option plans for the benefit of officers and employees maintained by the Company, including the granting of options and awards with respect thereto.
Nominating Committee. The Committee shall be comprised of the Chairman of the Board and non-employee directors. The duties of the Committee include recommendation to the Board with respect to nominees for election as directors; and recommendation to the Board with respect to the composition of all Committees of the Board other than the Executive and Nominating Committees.
A majority of the number of members of any Committee shall constitute a quorum for the transaction of business. The action of a majority of
members present at a Committee meeting at which a quorum is present shall constitute the act of the Committee.
Section 7. QUORUM. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law, but a less number may adjourn any meeting from time to time and the meeting may be held as adjourned without further notice.
ARTICLE IV
OFFICERS AND AGENTS
Section 1. ELECTION AND APPOINTMENT. The Board of Directors, as soon as may be after each annual meeting of stockholders, shall choose a President of the Corporation, one or more Vice Presidents, a Secretary and one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, a comptroller and one or more Assistant Comptrollers, and from time to time appoint such other officers, agents and employees as it may deem proper. The Board of Directors will elect, at a minimum, a President, a Secretary and a Treasurer.
The office of Secretary and Treasurer may be held by the same person. However, the President of the Corporation may not contemporaneously hold the office of Secretary. The President shall be chosen from among the directors. The rest of the officers of the Corporation need not be directors.
Section 2. TERM OF OFFICE. The President shall hold office, unless he shall become disqualified or sooner removed by a vote of a majority of all of the members of the Board of Directors, for the term of one year and until his successor shall be chosen. All other officers shall hold office at the pleasure of the Board.
Section 3. POWERS AND DUTIES OF THE PRESIDENT. The President shall be the chief executive officer of the Corporation and shall have the general management and supervision of the affairs of the Corporation. He shall preside at all meetings as Chairman of the Board of Directors unless the Board of Directors shall choose a Chairman other than the President. He shall preside at all meetings, both annual and special, of the stockholders, but may appoint a person to act in his stead thereat. To the extent that the duties of the other officers of the Corporation are not specially prescribed by the By-Laws or by the rules or regulations of the Board of Directors, the President may prescribe the same. He shall have and may exercise any and all powers and shall perform any and all duties pertaining to the office of President or conferred or imposed upon his office by the By-Laws or by the Board of Directors.
Subject to such limitations as the Board of Directors may from time to time prescribe, the President shall have power to appoint and dismiss all such agents and employees of the Corporation as he may deem proper, including those appointed by the Board, except that he may not without the permission of the Board of Directors, dismiss any officer of this
Company chosen by the Board of Directors. He may prescribe the duties of any employee or agent of the Company and subject to like limitations may from time to time delegate to other officers of the Company any of the powers and duties conferred upon him by the By-Laws or by the Board of Directors.
Section 4. POWERS AND DUTIES OF THE VICE PRESIDENTS. The Vice Presidents shall perform such duties as are prescribed for them by the Board of Directors and will, in the order of their seniority, in the absence or disability of the President, perform the duties and exercise the powers of the President, and shall perform such other duties as may be prescribed by the Board of Directors.
Section 5. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and act as Clerk thereof, and record all votes and minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for any Committee of the Board when required. He shall cause to be given notice of all meetings of stockholders and directors and shall perform such other duties as pertain to his office. He shall keep in safe custody the seal of the Corporation and when authorized by the Board of Directors, affix it when required to any instrument.
The Board of Directors may from time to time appoint one or more Assistant Secretaries who shall perform such duties as may be assigned to them by the Board or by the Secretary.
Section 6. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall have the custody of all the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements and shall render to the President and directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation.
The Board of Directors may from time to time appoint one or more Assistant Treasurers who shall perform such duties as may be assigned to them by the Board or by the Treasurer.
Section 7. POWERS AND DUTIES OF COMPTROLLER. The Comptroller shall be the chief accounting officer of the Corporation and shall keep full and accurate control of all accounting procedures and shall report to the President the condition of the same. He shall from time to time make to the President or to the Board of Directors such suggestions as he may deem necessary to properly reflect the condition of the Company.
The Board of Directors may from time to time appoint one or more Assistant Comptrollers who shall perform such duties as may be assigned to them by the Board or by the Comptroller.
Section 8. POWERS AND DUTIES OF OTHER OFFICERS. All other officers shall have such duties and exercise such powers as generally pertain to their respective offices as well as such duties and powers as from time to time may be prescribed by the President or the Board of Directors.
Section 9. DUTIES OF CHAIRMAN. The Chairman of the Board of Directors shall preside at all meetings of the Board and shall assume such other duties as are assigned to him by the Board of Directors.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. STOCK CERTIFICATES. Certificates of stock shall be signed by the President or a Vice President and the Secretary, or an Assistant Secretary, or by the Treasurer or an Assistant Treasurer, and shall be sealed with the corporate seal.
The signatures of the officers and the seal of the Corporation as affixed to the stock certificate may be in facsimile.
Section 2. TRANSFERS. The shares of stock of the Corporation shall be transferable on the books of the Corporation, which books may be maintained by a transfer agent selected by the Board of Directors.
The Board of Directors shall have power and authority to make all such rules and regulations that they may deem expedient concerning the issuance, transfer and registration of certificates of the shares of the capital stock of the Corporation.
The Board of Directors may appoint one or more transfer agents and one or more registrars of the capital stock of this Corporation, and may require all stock certificates to bear the signature of a transfer agent and a registrar.
Section 3. CLOSING OF BOOKS. Previous to any meeting of the stockholders, the Board of Directors may in its discretion fix a date for the closing of the transfer books of the Corporation, after which date no transfers may be effected until after the meeting. In the absence of any such date being fixed by the Board of Directors, the transfer books need not be closed.
Should the Board of Directors determine to close the books prior to any meeting of the stockholders, such date shall not be in violation of any provision of the statutes of the State of New York or the provisions of the Certificate of Incorporation of this Corporation.
Section 4. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the holder of record of any share or shares of any class of the stock of this Corporation as the holder in fact thereof, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of the State of New York.
Section 5. LOST STOCK CERTIFICATES. Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and may be required to advertise the same in such manner as the Board of Directors may require, and shall, if the Board of Directors so requires, give the Corporation a bond of indemnity, sufficient to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate, whereupon a new certificate may be issued of the same class and for the same number of shares as the one alleged to be lost or destroyed.
ARTICLE VI
CORPORATE SEAL
Section 1. CORPORATE SEAL. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year "1946" and the words "Corporate Seal, New York".
ARTICLE VII
FINANCE
Section 1. FISCAL YEAR. The fiscal year of the Corporation shall begin on May 1 and end on April 30 of each year, unless otherwise provided by the Board of Directors.
Section 2. CHECKS. The monies of the Corporation shall be deposited in the name of the Corporation in such bank or banks, or trust company or trust companies, either within or without the State of New York, as the Board of Directors shall designate, and shall be drawn out only by check signed by such persons as may be designated from time to time by the Board of Directors.
Section 3. DIVIDENDS. Dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting from the net earnings or surplus of the Corporation, in the manner and on the terms and conditions as they in their sole discretion may decide.
Before payment of any dividend or making any distribution of profits, there may be set aside out of the surplus or net profits of the Corporation such sum or sums as the directors from time to time, in their absolute discretion, may think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think to be in the best interests of the Corporation.
ARTICLE VIII
INDEMNIFICATION
Section 1. INDEMNITY OF OFFICERS AND DIRECTORS. To the full extent permitted by law, the Corporation shall indemnify each person made or threatened to be made a party to any civil or criminal action or proceeding by reason of the fact he, or his testator, administrator or executor, is or was a director or officer of the Corporation or served any other corporation of any type or kind, domestic or foreign, in any capacity at the request of the Corporation.
ARTICLE IX
WAIVER OF NOTICE
Section 1. WAIVER OF NOTICE. Any stockholder, officer or director may waive any notice required to be given under these By-Laws.
Whenever under the provision of these By-Laws notice is required to be given to any director, officer or stockholder, it shall not be construed to mean personal notice, but such notice may be given an writing by depositing the same in a post office or letter box, in a post-paid, sealed wrapper, addressed to such stockholder, officer or director, at such address as appears on the books of the Corporation, or in default of other address to such stockholder at the general post office in the Borough of Manhattan, and such notice shall be deemed to have been given at the time when the same was thus mailed.
ARTICLE X
AMENDMENTS
Section 1. AMENDMENTS. These By-Laws may be altered or amended or repealed by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote thereat, at any regular meeting of the stockholders or at any special meeting of the stockholders if notice of the proposed alteration or amendment or repeal be contained in the notice of such special meeting, or by the affirmative vote of a majority of the Board of Directors at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors if notice of the proposed alteration or amendment or repeal be contained in the notice of such special meeting.
Exhibit 4.3
GYRODYNE COMPANY OF AMERICA, INC.
1993 STOCK INCENTIVE PLAN AS APPROVED BY THE
SHAREHOLDERS
OCTOBER 29, 1993
The purposes of the Company's 1993 Stock Incentive Plan are generally (1) to
secure for the Company the benefits of incentives inherent in ownership of the
Company's common stock ("Common Stock") by key employees (see "Participation");
(2) to encourage key employees to increase their interest in the Company's
future growth and to stimulate and sustain constructive and imaginative
thinking; (3) to further the identity of interests of key employees with the
interests of the Company's shareholders; and (4) to induce the employment or
continued employment of key employees and to enable the Company to compete with
other organizations offering incentives in obtaining and retaining the services
of competent executives.
The following is a summary of certain provisions of the Plan and the incentives granted thereunder and does not purport to be complete. The summary is qualified in its entirety by reference to the provisions of the Plan and such incentives.
Administration
The Plan is administered by a committee ("Committee") of the Company's Board of Directors. No member of the Committee may be a person who is eligible to participate in the Plan or any other stock option, stock bonus stock appreciation right or similar plan of the Company or any affiliate of the Company or who was eligible during any portion of the year prior to serving on the Committee if such eligibility would prevent such member from being a "disinterested person," with respect to the Plan for purposes of Rule 16b3 under the Securities Exchange Act of 1934.
Participation
The Plan provides that incentives may be granted to "key employees of the Company and its subsidiaries. For purposes of the Plan, "key employees" are those the Committee deems able to contribute significantly to growth and successful operations, and a "subsidiary" is generally any entity with respect to which the Company holds 50% or more of the voting power or similar management rights. Options (other than Incentive Stock Options, described below) may also be granted to consultants (including directors who are consultants).
Stock Incentives
The Plan generally authorizes the grant of stock incentives in the form of stock awards, options (including Incentive Stock options or "ISO's") with or without stock appreciation rights ("SARS") or limited stock appreciation rights ("LSARS"), or a combination of an award and an option. If an option is an ISO, its terms will so indicate.
Options
An option, other than an ISO, granted under the Plan provides for the purchase of Common Stock at a price determined by the Committee ("purchase price"). The purchase price of ISO's granted
under the Plan to a key employee who owns more then 10% of the total combined voting power of all classes of stock of the Company is equal to 110% of the fair market value of the common Stock on the date of grant. The purchase price of ISO's granted to all other persons is the fair market value of the Common Stock on the date of grant. With respect to ISO's the aggregate fair market value of the shares of Common Stock subject to each installment of all options becoming exercisable for the first time by any individual in any calendar year is limited to $100,000.
The following paragraphs summarize the principal features of options granted under the Plans.
Incentive Kicker
Options granted under the plan (other than ISOS) that became exercisable in installments may contain an "incentive kicker", whereby additional option shares are granted with respect to each installment if the fair market value of the Common Stock on each date on which an installment first becomes exercisable exceeds the original purchase price of the option on the date of grant by at least 50% and the optionee exercises his option on such date The percentage increase in the number of option shares covered by each installment shall equal the percentage increase in the fair market value of the Common Stock. The purchase price for the additional option shares shall be the purchase price of the original option.
Reload Options
Options granted under the plan (other than ISO's) that become exercisable in installments may contain a "reload option" feature providing that, upon exercise of the option by payment of the purchase price in shares of Common Stock held for more than six months, the recipient shall automatically be granted a new option for the number of shares of Common Stock used to exercise the original option (including, to the extent authorized by the Committee, the number of shares used to satisfy any tax withholding requirement) that is subject to the same terms and conditions concerning duration and vesting as the original option. The purchase price of such new option shall be equal to the fair market value of the Common Stock on the date the original option was exercised
When Options May Be Exercised
An option granted under the Plan becomes exercisable in whole or in part after one year of continued employment by the Company, at such time or times as the Committee determines, and (except as provided below) only during the continuance of the holder's employment with the Company. All options granted under the Plan shall become fully exercisable upon a "Change in Control" of the Company. Once an option or a portion thereof becomes exercisable, it may be exercised at any time in whole or in part until the option expires or terminates. An option may not be exercised more than six years after the date of grant. In the case of an ISO held by a key employee who owns more than 10% of the total combined voting power of all classes of stock of the Company, the maximum period during which the ISO may be exercised is five years from the date of grant.
Termination of Unexercised Options
Unexercised options terminate upon termination of service, except in certain events as set forth below:
Event Date Option Terminates*
----- -----------------------
Termination of service with Committee consent or 3 months after termination of service, unless the
involuntary termination not for cause Committee approves a longer period **
Death, incapacity or retirement under a retirement plan 3 years after termination of service***
of the Company or a subsidiary (including death or
incapacity within 3 months after termination of
service with Committee consent or involuntary
termination not for cause)
|
An option may be exercised alter an optionee's death by his estate or by a person acquiring the right to do so by will or by the laws of inheritance or pursuant to the terms of a,"qualified domestic relations order" as defined in the Internal Revenue Code. Options may not otherwise be transferred or assigned.
Payment for Shares
Under the Plan the purchase price must be paid in cash, Common Stock previously owned by the optionee for more than six months or a combination of the two, as provided in the Plan or the option granted thereunder. Common Stock surrendered for this purpose is valued at its fair market value on the date of exercise.
*Under no circumstances may any option be exercised after its expiration date (see "When Options May be exercised").
**The Committee may approve a longer period; however, such period cannot exceed the period which would have been applicable if the optionee had died, become incapacitated or retired under a retirement plan of the Company or a subsidiary.
***However, to receive favorable federal tax treatment, an ISO may need to be exercised within a shorter period after termination (see "Federal Income Tax Aspects").
Form of Initial Grants
It is anticipated that the initial grants of options under the Plan will be in two alternative forms of non-qualified stock options, one of which will be granted in tandem with an SAR (see "Stock Appreciation Rights") and the other of which will be granted in tandem with an LSAR (see "Limited Stock Appreciation Rights"). Both types of option grants will have an option price equal to the fair market value of the Common Stock on the date of grant and will include an "incentive kicker" feature.
The SAR/options shall become exercisable in three annual installments at the rate of 50% on the first anniversary of the date of grant, 33% on the second anniversary of such date and 17% on the third such anniversary. A stock for stock exercise feature will be available whereby the recipient may exercise the option by tendering shares of Common Stock he has held for more than six
months.
The second alternative type of non-qualified option that may initially be granted under the Plan will include a tandem LSAR. This type of option shall become exercisable in three annual installments at the rate of 34% on the first anniversary of the date of grant and 33% on each of the second and third anniversaries of such date. This type of option also includes a "reload option" feature.
Stock Appreciation Rights
Stock Appreciation Rights ("SARs") may be granted with the grant of an option. SARs are exercisable at such time as the Committee determines, but only upon surrender of the related option and only to the extent that the related option (or the portion thereof as to which an SAR is exercised) is exercisable. Upon exercise of an SAR, the holder is entitled to receive an amount equal to the excess of the fair market value of the shares for which the SAR is exercised over the exercise price under the related option. All SARS granted under the Plan shall become fully exercisable upon a change in Control of the Company and, in this event, shall be valued on the date the holder elects to exercise his SARS during the six month period beginning on the date that such Change in Control occurs. It is anticipated that the SARs to be granted in tandem with the initial option grants under the Plan shall be paid only in shares of Common Stock which shall be treated as a grant of a restricted stock award subject to complete forfeiture in the event the recipient resigns or is terminated by the Company for cause during the one-year period beginning on the date the SAR is exercised (see "Restricted Stock Awards").
Limited Stock Appreciation Rights
Limited Stock Appreciation Rights ("LSARs") may be granted with the grant of an option. LSARs are subject to the same terms and conditions as SARs, except that LSARS are payable by the Company in cash only.
Restricted Stock Awards
Under the Plan, a stock incentive may be granted in the form of shares of Common Stock subject to such conditions and/or restrictions (including restrictions on the sale or other disposition of the shares) as the Committee may determine. The nature and duration of the conditions and restrictions may vary, and an award may be subject to forfeiture in accordance with these conditions and restrictions (including forfeiture if, prior to their expiration, the recipient voluntarily terminates service or service is terminated for cause). All Restricted Stock Awards granted under the Plan shall become fully vested and freely transferable without restriction upon a Change in Control of the Company. While the Award restrictions are in effect, the recipient will generally have the right to vote and receive dividends on all shares of Common Stock subject to an award.
Under the Plan, shares of Common Stock are issued based on the achievement of specified earnings objectives or to reward individual performance. The shares so issued may not be sold (except to the Company) or otherwise transferred until they "vest" (in three installments); if shares are sold to the Company, the proceeds equal to the fair market value of the shares sold are not paid until the shares would have vested. If the recipient's service terminates due to death, disability, termination without cause or, subject to certain conditions, retirement, the restrictions terminate as
to the shares not then vested and/or proceeds from the sale of non-vested shares to the Company; if the recipient's service terminates for any other reason the shares not then vested and/or such proceeds are forfeited.
It is anticipated that the initial restricted stock awards to be granted under the Plan will "vest" while the recipient remains employed by the Company and the restrictions on transferability will lapse in three installments, at the rate of 34% on the second anniversary of the date of grant and 33% on each of the fourth and sixth anniversaries of the date of grant. The initial awards will also include an "incentive kicker" feature (see "Options").
Shares Covered by Plans and Grants Per Amendment by Board of Directors
Stock incentives covering 150,000 shares of Common Stock may be granted under the Plan, 10,000 shares of which are reserved and available for restricted stock awards. The maximum number of shares of Common Stock subject to stock incentives that may be granted in any fiscal year of the Company during which the Plan is in effect may not exceed 20,000.
If an option expires or terminates or, in certain cases, restricted shares are forfeited or reacquired by the Company, the shares subject to the unexercised portion of the option or such restricted shares become available for new grants. The number of shares covered by the Plans and the options outstanding thereunder, as well as the purchase prices of outstanding options, may be adjusted in the event of a stock dividend or split or a recapitalization, reclassification or reorganization of the Company.
Duration, Amendment and Termination of the Plan
The Plan shall automatically terminate on October 29, 2003. The Plan may be amended by the Board of Directors (subject to shareholder approval in the case of specified amendments). The Board may also discontinue the Plan at any time; however, no amendment or discontinuance may adversely affect any outstanding option, SAR, LSAR or restricted stock award without the consent of the holder thereof.
Federal Income Tax Aspects
The principal federal income tax consequences of stock options, SARs, LSARs and restricted stock awards granted under the Plans are discussed below. No taxable income is realized by a recipient upon the grant of an ISO, NSO, SAR, LSAR or a restricted stock award; however, in the case of a restricted stock award, a recipient may elect to be taxed upon grant (see "Restricted Stock Awards" below).
Except as provided below, the Company or a subsidiary is generally entitled to a tax deduction in the amount of compensation taxable as ordinary income realized by an optionee or recipient of an SAR, LSAR or a restricted stock award. In the event that such optionee or recipient tenders previously owned shares of Common Stock to satisfy any tax withholding requirement, he will have made a taxable disposition of such shares and thus realize a capital gain (or loss).
The payment of any compensation that is contingent upon a "Change in Control" of the Company,
including compensation resulting from the exercise of an option or a portion of an option or tandem SARs or LSARS that became exercisable on account of a Change in Control and compensation resulting from the accelerated vesting of a restricted stock award, may constitute a "parachute payment" under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") if the payment, when aggregated with the present value of all other payments in the nature of compensation that are payable upon a Change in Control of the Company, equals or exceeds three times an employee's "base amount", as defined in the Code. If a parachute payment constitutes an "excess parachute payment" because it exceeds the portion of the employee's base amount allocated to the payment under the Code and related Treasury regulations, then the payment is not deductible by the Company and the recipient is subject to an excise tax (in addition to the regular taxes due) of 20 percent of the excess parachute payment.
Incentive Stock Options
No taxable income (except for "alternative minimum taxable income", discussed below) is recognized by an optionee upon the exercise of an ISO if he remains employed by the Company or a parent or subsidiary at all times from the date of grant until three months before the date of exercise (or one year before the date of exercise in the case of a disabled optionee). The estate of a deceased optionee or his heir's will not recognize taxable income upon the exercise of an ISO held by such optionee if he was employed by the Company at the time of death or within the three month period prior to death.
If an optionee holds Common Stock acquired pursuant to the exercise of an ISO for at least two years from the date of grant and at least one year from the date the Common stock is transferred to him, he will realize no income until he sells the Common Stock; he will then realize capital gain or loss equal to the difference between the sale price and the purchase price.
If an ISO is canceled for cash, the optionee will realize compensation, taxable as ordinary income, in an amount equal to the cash received.
Disqualifying Dispositions
In general, if an optionee disposes of Common Stock acquired pursuant to the exercise of an ISO within two years from the date of grant or within one year from the date the Common Stock is transferred to him, he will realize ordinary income at the time of such disqualifying disposition. If such disqualifying disposition is a sale, (1) ordinary income tax rates will apply to any amount by which the purchase price is exceeded by the lesser of (a) the fair market value of the Common Stock on the exercise date and (b) the amount realized from the sale, and (2) capital gains tax rates will apply to any excess of the amount realized from the sale over the fair market value of the Common Stock on the exercise date.
Delivery of Previously Owned Common Stock
An ISO may provide that the purchase price may be paid in cash, in shares of previously owned Common Stock or in a combination of the two. Except as noted below, no gain or loss will be recognized for federal income tax purposes with respect to shares of Common Stock the optionee receives in exchange for an equal number of shares of previously owned Common Stock. Moreover, no compensation income or other gain will be recognized at the time of exercise with
respect to the additional shares of Common Stock received upon exercise of the
ISO.
The Internal Revenue Service has issued proposed regulations as to how the tax basis of the "old" shares of Common Stock should be allocated among the "new" shares of Common Stock the optionee receives upon exercise of an ISO. In general, (1) the number of new shares which is equal to the number of old shares will have a tax basis equal to his tax basis for the old shares, and (2) the remaining new shares will have a tax basis of zero. The optionee should keep records sufficient to distinguish (1) from (2). If the optionee pays part of the purchase price in cash, the additional new shares will have a tax basis equal to the amount of such cash.
The optionee must retain all Common Stock acquired by him pursuant to the exercise of an ISO for at least one year from the date such Common Stock is transferred to him in order to prevent a disqualifying disposition. Proposed regulations provide that if the purchase price of an ISO is paid by delivering previously owned Common Stock, a subsequent disqualifying disposition of Common Stock acquired pursuant to the exercise of the ISO will be treated as a disposition of the shares with the lowest basis. If the purchase price is paid by delivering old shares of Common Stock acquired pursuant to the exercise of an ISO and the optionee has not held those shares for the applicable holding periods, he will be considered to have made a disqualifying disposition of the old shares so delivered.
Non-Statutory Stock Options
Unlike an ISO, the exercise of an NSO results in immediate realization of income for federal income tax purposes. Upon exercise of an NSO, an optionee will realize compensation, taxable as ordinary income, in an amount equal to any excess of the fair market value of the Common Stock on the exercise date over the purchase price. Upon cancellation of an NSO for cash or Common Stock in lieu of exercise, an optionee will realize compensation, taxable as ordinary income, in an amount equal to the cash or the fair market value of the Common Stock received. An optionee' s tax basis for the Common Stock received upon exercise or cancellation will be the price, if any, paid therefor plus the amount of compensation realized.
If an optionee sells Common Stock acquired through the exercise or cancellation of an NSO, the optionee will realize capital gain (or loss) equal to the amount by which the proceeds of sale exceed (or are less than) his basis for the Common Stock.
Delivery of Previously Owned Common Stock
An NSO may provide that the purchase price may be paid in cash, in shares of previously owned Common Stock or in a combination of the two. No income, gain or loss will be recognized with respect to shares of Common Stock the optionee receives in exchange for an equal number of shares of previously owned Common Stock. However, the number of "new" shares of Common Stock received in excess of the number of old" shares delivered will constitute compensation, taxable as ordinary income, in an amount equal to the fair market value of the excess new shares on the exercise date.
The Internal Revenue Service has ruled that (1) the number of new shares which is equal to the number of old shares will have a tax basis equal to that of the old shares and (2) the excess new shares will have a tax basis equal to the amount constituting compensation, i.e., their fair market
value on the exercise date. As discussed under "Incentive Stock Options", the optionee should keep records sufficient to distinguish (1) from (2).
Stock Appreciation Rights
The grant of an SAR will not result in taxable income to the holder. At the time of exercise of an SAR, when the holder must surrender the related option shares, the amount of cash and fair market value of shares received by the holder, less cash or other consideration paid (if any), if taxed to the holder as ordinary income and the Company will receive a corresponding income tax deduction, subject to any required income tax withholding. However, if, upon exercise of an SAR, the holder is paid through the issuance by the company of shares that are subject to forfeiture in the event the holder is terminated for cause or resigns during the one year period after the SAR is exercised taxable income to the holder will be deferred until the restrictions on the shares lapse and such shares are no longer subject to forfeiture by the holder.
Limited Stock Appreciation Right
The grant of an LSAR will not result in taxable income to the holder. At the time of exercise of an LSAR, when the holder must surrender the related option in exchange for a cash payment equal to the difference between the fair market value of the shares on the exercise date and the purchase price per option share, the amount of such cash payment will be taxed to the holder as ordinary income.
Restricted Stock Awards
Unless an election under Section 83(b) of the Code is made (as described below), no federal income tax is payable by the recipient upon the grant of the award, including an award resulting from the exercise of an SAR (see "Stock Appreciation Rights"). At the time the restrictions lapse and shares become transferable, the recipient realizes ordinary income equal to the difference between the fair market value of the shares as to which the restrictions have lapsed and the amount, if any, paid for such shares. Upon sale of the shares subsequent to the lapse of the restrictions the recipient realizes capital gain (or loss) equal to the amount by which the proceeds of the sale exceed (or are less than) the fair market value of the shares on the date the restrictions lapsed. If the recipient transfers his shares to the Company upon receipt of the proceeds from the Company he realizes compensation taxable as ordinary income equal to the amount of such proceeds.
If a recipient makes an election under Section 83(b) of the Code within 30 days following the date on which the award is granted, he realizes ordinary income upon the grant of the award equal to the difference between the fair market value of the shares on the date of grant and the amount, if any, paid for such shares. In the event that any shares are forfeited after a Section 83(b) election has been made, the recipient may deduct as a capital loss only the amount paid for the shares. Upon sale of the shares subsequent to the lapse of the restrictions, the recipient realizes capital gain (or loss) equal to the amount by which the proceeds of the sale exceed (or are less than) the fair market value of the shares on the date the award was granted. If the recipient transfers his shares to the Company, the Company believes that he will realize capital gain (or loss) at the time he receives the proceeds equal to the difference between the proceeds received and the fair market value of the shares on the date the award was granted.
Exhibit 4.4
GYRODYNE COMPANY OF AMERICA, INC.
1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE.
The 1996 Non-Employee Directors' Stock Option Plan (the "Plan") of GYRODYNE COMPANY OF AMERICA, INC. (the "Company") is designed to encourage directors to acquire increased ownership of the Company's common stock, thereby helping to align the interests of non-employee directors and the shareholders, and to assist in attracting and retaining directors who have the experience, ability and skills necessary to assist in the Company's sustained growth and prosperity.
2. EFFECTIVE DATE.
The Plan shall be effective on October 25, 1996, subject to the approval of the Plan by the holders of at least a majority of the outstanding shares of the Company's common stock present or represented and entitled to vote at the 1996 Annual Meeting of Shareholders. In the event such approval is not obtained, the Plan shall be null and void and no options will be granted under the Plan.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee of at least three (3) persons appointed by the Board of Directors (the "Board") of the Company (the "Committee"), who need not be directors and none of whom shall be eligible to receive options under the Plan. Grants of stock options under the Plan and the amount and nature of the grants shall be automatic as described in Section 6 hereof. The Plan is intended to meet the requirements of Rule 16b-3(c)(2)(ii) adopted under the Securities Exchange Act of 1934 (the "1934 Act") and accordingly is intended to be self-governing. To this end, the Plan requires no discretionary action by any administrative body with regard to any transaction wider the Plan. To the extent, if any, that any questions of interpretation arise, they shall be resolved by the Committee in its sole discretion and such determination shall be final and binding upon all persons having an interest in the Plan. Any or all powers and discretion vested in the Committee under this Plan may be exercised by any one Committee member who is so authorized by the Committee. The Committee shall have no discretion with respect to designating the recipient of an option, the number of shares subject to an option, the date of grant or the exercise price of an option.
4. PARTICIPATION IN THE PLAN.
All members of the Company's Board who are not, as of the date of any option grant, employees of the Company or any of its subsidiaries shall be eligible to participate in the Plan ("Eligible Non-Employee Director").
5. NON-OUALIFIED STOCK OPTIONS.
All options granted under the Plan shall be non-qualified stock options covering shares of common stock of the Company.
6. TERMS, CONDITIONS AND FORM OF OPTIONS.
(a) Initial Option Grants. On October 25, 1996, an option to purchase 2,500 shares shall be automatically granted to each Eligible Non-Employee Director. Each such option shall become exercisable one (1) year after such date.
On the date that each new Eligible Non-Employee Director joins the Board, an option to purchase 2,500 shares shall be automatically granted to such director. Such option will become exercisable in three equal annual installments commencing on the first anniversary of the date of grant
(b) Annual Option Grants. On January 1 in each calendar year from 1997 through 2000, an option to purchase 1,250 shares shall be automatically granted to each Eligible Non-Employee Director. Each such option shall become exercisable on the first anniversary of the date of grant
(c) Exercise Price The exercise price per share for which each option is exercisable shall be 100% of the Fair Market Value per share of the Company's common stock on the date the option is granted. For purposes hereof, the Fair Market Value per share on the date the option is granted shall be the average for the ten (10) trading days immediately proceeding the grant date of the mean on each trading day between the high and low quoted prices of a share of the Company's common stock on such trading day (or, if high and low prices are not so quoted, the mean between the high bid price and low asked price) in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ").
(d) Term of Option. Each option shall terminate upon the expiration of seven (7) years from the date of grant and shall be subject to earlier termination as hereinafter provided.
(e) Termination of Service. In the event of the termination of service on the
Board by the holder at any option, other than by reason of retirement pursuant
to Board policy, permanent disability, death or a Change in Control, the then
outstanding options of such optionee shall be exercisable only to the extent
that they were exercisable on the date of such termination, and any
unexercisable options shall be forfeited. In the event of termination of Board
service of an optionee by reason or retirement pursuant to Board policy,
permanent disability, death or a Change in Control, each of the then outstanding
options of such optionee shall immediately become exercisable, provided,
however, that no option (even though exerisable) shall be exercised within six
(6) months after the date it is granted, but that the Committee may settle such
option in cash during such period following a Change in Control.
(f) Exercise After Service Terminated. An optionee shall be entitled to exercise all exercisable options within five (5) years after termination of Board service, but in no event after the expiration date of the option.
(g) Exercise of Options, The option price for the shares purchased shall be paid in full at the time of exercise, in cash or by the surrender of shares of common stock of the Company valued at their fair market value on the date of exercise, or by any combination of cash and such shares. Exercise shall be effective upon receipt by the Secretary of the Company of notice of such exercise accompanied by proper payment.
7. SHARES OF STOCK SUBJECT TO PLAN.
The shares that may be purchased pursuant to options granted under the Plan shall not exceed an aggregate of 75,000 shares of the Company's common stock. Any shares subject to an option which for any reason expires or is terminated unexercised as to such shares shall again be available for issuance under the Plan. Shams issued under the Plan may be authorized but unissued or held in treasury.
8. DILUTION AND OTHEJR ADJUSTMENT.
In the event of any change in its outstanding shares of the Company's common stock by reason of any stock split, stock dividend, recapitalization merger, consolidation, combination or exchange of shares, the sale, lease or conveyance of substantially all of the assets of the Company or other similar corporate change such equitable adjustments shall be made in the Plan, in the maximum number of shares referred to in Section 7 and in the grants hereunder, including future grants under Section 6 and the exercise price of outstanding options as the Committee determines are necessary or appropriate. In the event of any stock split or stock dividend, such adjustments shall be self-operative and shall not require any Committee action.
9. CHANGE IN CONTROL.
In the event of a Change in Control, options shall became immediately exercisable and remain exercisable for the period specified in Section 6(f). "Change in Control" means (i) a transaction under
which any "person" (as such term is used in Sections 13(d) and 14(d) of the 1934 Act) is or becomes the "beneficial owner" (as defined in Rule l3d-3 under die 1934 Act), directly or indirectly of securities of the Company representing twenty-five (25%) percent or more of the voting power of the Company's then outstanding securities; (ii) the Company shall enter into an agreement to sell substantially all of its assets; (iii) there shall be consummated any consolidation or merger of the Company in which the holders of the Company's capital stock immediately prior to the consummation of the transaction do not hold more than fifty (50%) percent of the common stock at the surviving corporation immediately after consummation of the transaction measured both in voting power and in number of shares of common stock outstanding after such transaction (treating as outstanding any common stock which would result from the conversion of any outstanding convertible securities for both the voting power and total outstanding common stock tests); or (iv) the shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company or for any transaction specified in the preceding clause (iii).
10. MISCELLANEOUS PROVISIONS.
(a) Rights as Shareholder. An optionee shall have no rights as a holder of the Company's common stock with respect to options granted hereunder, unless and until certificates for shares of such stock are issued to the optionee.
(b) Non-Transferability. Options shall not be assignable or transferable otherwise than by will or by the Laws of descent and distribution or pursuant to a qualified domestic relations order, and during an optionee's lifetime shall be exercisable only by the optionee or a duly appointed guardian or legal representative of the optionee.
(c) Agreements. All options granted under the Plan shall be evidenced by agreements or notices containing such terms and conditions (not inconsistent with the Plan) as the Committee shall adopt.
(d) Government Regulations. The Plan and the granting and exercise of options hereunder shall be subject to all applicable Federal and state laws and all rules and regulations issued thereunder, including registration and private placement restrictions, and the Board in its discretion may, subject to the provisions of Section 12 hereof, make such changes in the Plan (except such changes which, by law or in order to maintain the exemption provided by Rule 16b-3 under the 1934 Act, must be approved by the shareholders) or impose restrictions upon the exercise of options as may be required to conform the Plan to such applicable laws, rules and regulations.
(e) Costs, Expenses and Taxes. The costs and expenses of administering the Plan shall be borne by the Company and not charged to any optionee. Income and other taxes assessed on the spread between the option price and the fair market value of the stock when an option is exercised shall be the responsibility of the person exercising the option. Should any tax withholding be required by law, such taxes may be paid through the Company withholding of shares otherwise issuable upon exercise, in accordance with procedures established by the Committee and consistent with Section 12 or by the payment of such withholding in cash by the optionee.
(f) No Right to Continue as a Director. Neither the Plan, nor the granting of an option, nor any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain a director for any period of time, or at any particular rate of compensation.
11. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment of the Plan. The Board may amend, suspend or terminate the Plan at
any time, provided, however, that without approval of the shareholders, no
revision or amendment shall increase the number of shares subject to the Plan
(except as provided in Section 8), extend the Plan's duration, reduce the option
price, change the designation of the class of directors eligible to receive
options or materially increase the benefits accruing to participants under the
Plan. Further, no amendment or termination of the Plan may Alter or impair any
rights or obligations of any option previously granted without the consent of
the optionee. The Plan provisions may not be amended more than once every six
(6) months, other than to comport with changes in the Internal Revenue Code or
the rules thereunder or unless such amendment is permitted by Rule
16b-3(c)(ii)(B) under the 1934 Act.
(b) Termination. The Plan (but not any options theretofore granted) shall in any event terminate on and no options shall be granted after September 30, 2000.
12. COMPLIANCE WITH SEC REGULATIONS.
It is the company's intent that the Plan comply in all respects with Rule 16b-3 under the 1934 Act and any related regulations. If any provision of this Plan is later found not to be in compliance with such Rule and regulations, the provision shall be deemed null and void. All grants and exercises of options under this Plan shall be executed in accordance with the requirements of Section 16 of the 1934 Act and regulations promulgated thereunder.
13. GOVERNING LAW.
The Plan shall be construed in accordance with and governed by the laws of the State of New York.
Exhibit 21
LIST OF SUBSIDIARIES
The following is an active subsidiary of the Company:
Flowerfield Properties, Inc.
The following are inactive, but not dissolved, subsidiaries of the Company:
Gyrodyne Coaxial Helipcopter Company, Inc. Gyrodyne Petroleum, Inc.
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ADDENDUM TO LEASE
Between
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
and
CARCO GROUP, INC.
(Tenant)
SECTION I - UTILITIES AND SERVICE
1. CUSTODIAL SERVICES -The Landlord will, at its expense, provide custodial services to the common rest rooms and the common corridors leading to the demised premises. Tenant shall not permit window cleaning or other exterior maintenance and/or janitorial services in and for the premises to be performed, except by such person(s) as shall be approved by Landlord and except during reasonable hours designated for such purposes by Landlord.
2. PARKING - Void.
3. ELECTRICITY - The electric power for the demised premises will be provided via the Landlord's "house" meter(s) and the Tenant shall be billed, by the Landlord, on the basis of the kilowatt consumption and demand recorded by the meter(s) at the prevailing LIPA rate in effect at the time of the meter reading by the Landlord.
4. LIGHT FIXTURES - The Landlord warrants that any overhead lighting fixtures including fluorescent tubes shall be in good working condition at the time the Tenant commences initial occupancy of the demised premises and for one month thereafter. Subsequently, the Tenant shall be responsible, at its expense, for the replacement of tubes and/or ballasts. Tenant shall, at the end of tenancy, return to the Landlord all lighting fixtures with lamps and ballasts in good operating condition. In the event Tenant vacates the premises and repairs/replacements are required, Landlord shall bill Tenant for any and all work performed on the lighting fixtures to restore them to their original condition less normal wear and tear.
5. AIR CONDITIONING MAINTENANCE - There are two existing 10 ton roof air conditioning systems that serve the demised premises. The Tenant shall have the option to utilize this system provided the Landlord is notified by the Tenant, not later than April 1st of each year, that said systems will be used. The Landlord shall maintain service, repair, and replace parts as needed to keep this system in good operating condition. For this service, there will be an annual charge of $1,000.00*2=$2,000.00 payable to the Landlord by April 1st of each year during the term period of this lease.
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Number of Main Gate Keys: ( )
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SECTION II - REPAIRS, ACCESS, FORCED ENTRY, AND RIGHT OF RECOVERY
1. STRUCTURAL REPAIRS - Notwithstanding terms and condition contained in the second Covenant of the preprinted portion of the Lease, the Landlord will be responsible for all structural repairs to the demises area, and for the maintenance of the exterior of the building in which the demised premises are located which repairs were not necessitated or otherwise caused by any act of the Tenant, its servants, agents and/or employees, invitees, subtenants and/or licensees.
2. MAINTENANCE OF EQUIPMENT AND FIXTURES - It is mutually agreed and understood that with respect to all equipment and fixtures as exists in the demised premises, the Tenant is responsible for maintaining same in safe working condition. Said equipment and fixtures are deemed to include, but not be limited to, light fixtures, fire alarms, personnel and overhead doors, and fire extinguishers. Tenant agrees to hold harmless, defend, and indemnify Landlord from any and all claims arising from direct, indirect, or consequential injury or damage to any party, either personal or property, which injury or damage may have been a result of Tenant's failure to adequately maintain said equipment and/or fixtures.
3. ACCESS FOR INGRESS AND EGRESS - The sidewalks, stoops, areas, entry, vestibules, passages, corridors, halls, elevators and stairways of the demised premises and common areas shall not be encumbered or obstructed by Tenant, its agents, clerks, servants or customers or be used by them for any other purpose than for ingress and egress to and from the demised premises. The demised premises may not be cluttered by boxes, garbage or other material. If Landlord directs that any of the foregoing items be removed from the demised premises, Tenant shall promptly comply with such direction.
4. REPAIRS AND EMERGENCY ACCESS - Tenant shall permit Landlord and/or its designee to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires, in, to and through the premises, as and to the extent that Landlord may now or hereinafter deem to be necessary or appropriate for the proper operation and maintenance of the building in which the premises are located or any other portion of Flowerfield. All such work shall be done, so far as practicable, in such manner as to avoid interference with Tenant's use of the premises. Notwithstanding anything else contained herein to the contrary, in the event of an emergency, Landlord may enter the premises of the Tenant immediately and Tenant shall cooperate with the Landlord in providing said immediate access.
5. PRIVACY AND FORCED ENTRY - It is agreed and understood that if Tenant changes or adds additional locks to any entrance or egress from the demised premises, then Tenant shall provide Landlord with a key or a combination to be utilized for access purposes. All locks changed must be returned to the Landlord for reinstallation, at Tenant's expense, at the end of tenancy. In the event a situation arises which in the opinion of the Landlord or
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Public Safety Officials (Police, Fire Dept., Code Enforcement, etc.) necessitates entrance to the premises during a period when Tenant is not available to provide access, and Tenant has not provided said key or combination, then any expenses resulting from damage to the premises required by a forced entry shall be borne solely by the Tenant. The addition of locks and/or security devices shall be deemed to be an alteration as defined under Section III of this Addendum, and therefore, subject to all the provisions governing alterations and reversion.
6. No RENT ABATEMENT - No diminution or abatement of rent, or other compensation shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building or to its fixtures nor for any space taken to comply with any law, ordinance or other governmental authority. In respect to the various "services" if any, herein expressly or impliedly agreed to be furnished by Landlord to Tenant, it is agreed that there shall be no abatement of the rent or any other compensation for interruption or curtailment of such "service" when such interruption or curtailment shall be due to accident, alterations or repairs desirable or necessary to be made or to inability or difficulty in securing parts, supplies or labor for the maintenance of such "service" or to some other cause, not gross negligence on the part of Landlord. No such interruption or curtailment of any such "service" shall be deemed a constructive eviction. Landlord shall not be required to furnish and Tenant shall not be required to receive any such "services" during any period wherein the Tenant shall be in default in payment of rent. Neither shall there be diminution of rent because of making of repairs, improvements or decorations to the demised premises after the date of commencement of the lease term.
7. MAINTENANCE BY LANDLORD DURING TENANCY AND TENANT'S RIGHT OF RECOVERY - Paragraph thirteen of the preprinted portion of the Lease is hereby amended to add the following: "Tenant shall have no right of recovery against Landlord in the event of loss or damage to the property and/or business of the Tenant resulting from fire, or other casualty or cessation and/or interruption of Tenant's business due to repairs and/or interruption of Tenant's business due to repairs and/or compliance with mandated items required on the part of the Landlord. Tenant hereby agrees to provide access to premises for Landlord to comply with its obligations as aforesaid, the time and duration of said access to be at the sole discretion of the Landlord who will proceed in as reasonable a manner as possible under the circumstances. It is hereby agreed that the Landlord's determination shall be conclusive and binding on all parties hereto."
8. ACCESS AT END OF TENANCY - It is mutually agreed and understood that in
order for Landlord to relet the premises to a new tenant on the first day
of the month immediately following the vacation date stipulation in
Section VI paragraph #1 of this addendum, Landlord shall require and be
granted by Tenant, during normal working hours, unhindered access to the
demised premises during the last week of tenancy for the express purpose
of making repairs, which repairs shall include, but not be restricted to:
dry wall patching, spackling, painting, floor cleaning, equipment
servicing, pipe repairs, and HVAC maintenance.
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SECTION III - ALTERATIONS
1. CONSENT BY LANDLORD AND PERMITS - It is hereby covenanted and agreed that the Tenant shall not make alterations to any building(s) and/or property Tenant has rented or has been given access to by the Landlord without the express written consent of the Landlord. In the event Tenant is authorized to make alterations, then Tenant shall be responsible for all permits and inspections as may be required by state and local building codes. If as a cause of Tenant's alterations and the governing ordinances shall require, Tenant shall secure as necessary, either a current Certificate of Occupancy or a Certificate of Conformance for the demised premises.
(a) CONTRACTOR'S INSURANCE - Prior to commencement of any work by or for Tenant, Tenant shall furnish Landlord certificates evidencing the existence of the following insurance:
(1) Worker's Compensation and New York State Disability Insurance covering all persons employed for such work and with respect to whom death or bodily injury claims could be asserted against Landlord, Tenant or the demised premises.
(2) General liability insurance naming Landlord its designees, and Tenant as insureds, with limits of not less than $1,000,000 in the event of bodily injury to one person and not less than $2,000,000 in the event of bodily injury to any number of persons in any one occurrence, and with limits of not less than $100,000 for property damage. Tenant, at its sole cost and expense, shall cause all such insurance to be maintained at all times when the work to be performed for or by Tenant is in progress. All such insurance shall be in a company authorized to do business in New York, and all policies, or certificates therefore, issued by the insurer and bearing notations evidencing the payment of premiums, shall be delivered to Landlord.
Tenant agrees to compensate Landlord for the purpose of reviewing plans and Tenant shall pay for all reasonable costs incurred resulting from such review and inspections as Landlord may require.
(b) ELECTRICAL SYSTEM - The Tenant shall not, under any circumstances, make changes to the existing electrical service servicing the premises, the internal wiring leading from the distribution box/boxes to overhead lights, wall outlets, buss ducts, etc., without the prior written authorization of the Landlord. It is agreed that all electrical work shall be done by a licensed electrician and said work, at Landlord's sole discretion, may require Tenant to obtain New York Board of Fire Underwriter approval.
(c) CARPETING - If the Tenant elects to install carpeting to cover any floor section(s) of the premises, a water soluble glue must be used to prevent damage to the floor in
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the event said carpeting is subsequently removed. Any such damage shall be considered the fault of the Tenant who will be responsible for any and all incurred expenses to restore the floor to its original condition. In the event Tenant occupies the demised premises with a carpet already "in-place" which the Tenant finds acceptable, then, if required at the end of tenancy, disposal of the in-place carpet shall be deemed to be Tenant's responsibility as set forth above for new installations.
(d) EXTERIOR ARCHITECTURE - Tenant shall not change (whether by alteration, replacement, rebuilding or otherwise) the exterior color and/or architectural treatment of the premises or of the building in which that same are located, or any part thereof.
(e) SIGNS - Notwithstanding terms and conditions contained in the third Covenant of the preprinted portion of the Lease, Tenant shall be permitted to affix to the building an identification sign provided the design, color, and composition (includes neon type signs) are approved by the Landlord in writing. Landlord shall provide Tenant with the appropriate dimensions for the sign predicated on the building exterior geometry and the size of the demised premises. In no event shall the sign be larger than eight square feet of total area. Tenant must submit a sketch or photo of the proposed sign for approval. Placement of the sign will be at the sole discretion of the Landlord. No other signs are permitted in, about, or on the Flowerfield Park grounds unless specifically approved in writing by the Landlord. Landlord reserves the right to remove any nonconforming sign(s) and Tenant agrees to indemnify Landlord against any claims for any damages arising either directly, indirectly, or consequentially from any acts of Landlord in regards to the removal of said nonconforming sign(s). Tenant waives any and all claims against Landlord for the removal of any nonconforming signs.
Tenant shall be entitled to a name-location plate on the main directory sign at no cost to the Tenant. The plate shall be consistent with other plates on the sign in both overall size, color, and layout. In the event Landlord does not provide said plate, Tenant agrees that its only remedy shall be solely the cash value of the plate itself. Landlord's acceptance of any name for listing on the Flowerfield Park Directory will not be deemed, nor will it substitute for, Landlord's consent, as required by this Lease, if such covenants be applicable, to any sublease, assignment, or other occupancy of the demised premises.
(f) TRADE FIXTURES - It is mutually agreed and understood that Tenant has caused to be installed; assumed in place either by purchase, lease, rental, default, or other manner; or otherwise has the exclusive use of the herein defined trade fixtures listed below but not restricted to the following:
SHELVING
It is agreed that it shall be Tenant's sole financial responsibility to remove Tenant's trade fixtures as have been defined herein.
Tenant shall be solely responsible for
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reverting the demised premises to its original condition after vacation at the end of tenancy unless Landlord has directed, in writing, that certain improvements associated with the installation of the trade fixtures are considered attached to the freehold and, therefore, property of the Landlord.
(g) REMOVAL AND REVERSION - It is further agreed that Tenant shall not remove or cause to be removed any fixtures, wiring, electrical panels, plumbing, fans, equipment, water pipes, or any other installation that was "in place" in or about the demised premises at the onset of tenancy without the express written consent of the Landlord. Any and all improvements, changes, and/or additions to the demised premises shall be removed at Tenant's expense or left in place at the sole discretion of the Landlord. In no event may Tenant remove any electrical equipment that was in place in the demised premises prior to Tenant's tenancy.
It is further agreed that if the herein defined lease shall be a successor to or in lieu of another lease between Landlord and Tenant for these demised premises and said prior lease would run continuously or concurrently if not terminated, it is understood that Landlord does not waive nor is Landlord diminished with respect to any claims for removal or reversion which may have been perfected by any prior lease, as stipulated herein, by virtue of this lease.
At the end of the Tenancy, the demised premises and all improvements comprising a part thereof will be delivered to Landlord in broom clean condition, vacant and together with all keys to the demised premises.
2. LANDLORD's Work LETTER (EXHIBIT "A") - Landlord will perform all work detailed in Landlord's Work Letter (Exhibit "A") dated March 18, 1999 in consideration of Tenant's agreement to relocate from the premises currently leased by Tenant in Landlord's Building #1 to subject premises in Building #7.
SECTION IV - USE RESTRICTIONS
1. ZONING - It is mutually agreed and understood that in the event the Tenant's use of the premises is held to be in violation of the Town or Local law or ordinances, the lease shall be considered and will be terminated by mutual consent and there shall be no further obligation on the part of either Landlord or Tenant.
VARIANCE OR SPECIAL EXCEPTION - TENANT - In the event a variance or special exception is required by the zoning ordinances for the specific use provision or occupancy required by Tenant, any and all costs, such as filing and legal fees, related to the filing and/or securing of a variance or special exception shall be borne solely by the Tenant.
VARIANCE OR SPECIAL EXCEPTION - LANDLORD - Landlord warrants to make available existing, on a best efforts basis, survey maps, building permits, Certificates of
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Occupancy, and other documents required by Tenant in its filing. There shall be no warranty, either express or implied, that documents, if any, tendered by Landlord shall be complete, ample, or sufficient for the purposes required by the Tenant. Landlord, at its sole discretion, may elect not to permit tenancy if restrictive covenants are attached to the variance or special exception such that observance of the restrictive covenants would negatively impact Landlord or other tenants at Flowerfield.
2. SUBLET - The Tenant shall not have the right to sublease any part of the demised premises.
3. NON - NUISANCE - The Tenant agrees to conduct its work operations within the demised premises in such manner as to be considered nuisance-free to other Tenants, Landlord's neighbors, and the Landlord, and to perform good "housekeeping" practices in order to satisfactorily conform to the Town of Smithtown, County of Suffolk, and State of New York applicable laws and ordinances. As the demised premises will be subject to periodic, unannounced inspection by the Building, Environmental, and fire Inspectors having the authority to cite any found violations which might have a detrimental effect on the Tenant, the Landlord, or other tenants' business operation, Landlord's neighbors or fire insurance premium rates, the Landlord reserves the right to conduct its own inspections and request the Tenant to take any required corrective action. In the event the Tenant, upon receipt of a violation notice from Town, County, or State Officials; Fire Insurance Underwriter inspectors; or the Landlord, fails to correct the condition, then the Tenant shall be considered to have violated the terms and conditions of this lease thus causing its termination as a contractual agreement between the Tenant and the Landlord. Any fees or penalties assessed by any municipal authority shall be paid for by Tenant.
4. PAINT SPRAYING - Tenant and Landlord mutually agree that Tenant will not perform any paint spraying in the demises premises unless the Tenant has a paint spray booth that meets Federal, State and Local safety and fire requirements and the express written consent of the Landlord. Further it is agreed that Tenant shall handle all flammable materials in a manner consistent with Local and State fire regulations, and will utilize the appropriate safety cans designed for specific flammable materials and a properly vented safety storage cabinet for the storage of flammable materials.
ACTIVITY RESTRICTIONS - The Tenant further agrees that he will not engage in any of the following activities without the prior knowledge and written consent of the Landlord:
(a) No Fire Sale: Conduct or permit any fire, bankruptcy, auction, or "going out of business" sale (whether real or fictitious) in the premises, or utilize any unethical method of business operation.
(b) Not Use Building Apron: Use, or permit to be used, the sidewalk adjacent to, or any other space outside, the premises for display, sale or any other similar undertaking.
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(c) Not Misuse Plumbing Facilities: Use the plumbing facilities for disposal of any materials destructive to the physical plumbing or facilities, whether through the utilization of so-called "disposal" or similar units or otherwise. The plumbing facilities shall include all interior drains and exterior dry wells, collection basins, sumps, and road drains. Not dispose of any materials that are environmentally unacceptable to the local, state or federal governments. In the event the Tenant misuses any plumbing facility, the Landlord shall have the right to immediately have the affected facility properly cleaned and restored and charge the Tenant any and all associated costs.
(d) No Liens: Subject any fixtures, furnishings or equipment in or on the premises and affixed to the reality, to any mortgages, liens, conditional sales agreements or encumbrances.
(e) Not Damage the Premises: Perform any act or carry on any practice which may damage, mar or deface the premises or any other part of Flowerfield. Damage shall also be construed as resin, epoxy materials, lacquer, paints, glues, or any other material which may become affixed to Landlord's walls, floors, ceiling, and fixtures as a result of actions of Tenant and require special treatment for removal. Tenant shall be required, at its expense, to restore the demised premises to its original condition less normal wear and tear.
(f) Freight Handling Equipment: Use any forklift truck, tow, or any other machine for handling freight in the premises, unless the same equipment, if powered, be powered by electricity or propane.
(g) Not Exceed Floor Loads: Place a load on any floor in the interior delivery system, if any, or in the premises exceeding the floor load per square foot which such floor was designed to carry, or install, operate or maintain therein any heavy item of equipment, except in such manner as to achieve a proper distribution of the weight.
(h) Not Exceed Electrical Load: Install, operate, or maintain in the premises any electrical equipment which will overload the electrical system therein, or any part thereof, beyond its reasonable capacity for proper and safe operation as determined by Landlord in light of the overall system and requirements thereof in Flowerfield, or which does not bear Underwriter's approval.
(i) Not Tamper with LIPA or Landlord's "House" Electric Meters: Tenant is expressly prohibited from tampering with electric meters in any manner whatsoever which would alter the meter's measurement of electric use. Tenant will hold Landlord harmless from all civil claims, fines, and expenses and any criminal action resulting from tampering with electric meters.
(j) Not contaminate the Premises: Refrain from the dumping of waste oil or other contaminants, as defined by environmental and/or governmental agencies, onto,
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about, or into the ground. The disposal of all such materials must, by mutual agreement, conform to the applicable environmental regulations. The Landlord shall not be responsible for the Tenant's violation of the regulations and any financial penalties resulting from such acts shall be borne solely by the Tenant.
In the event Tenant shall be directed by a governmental agency or by Landlord to cease and desist from any activity which results or may result in contamination of Landlord's real property and Tenant should fail to immediately comply, Landlord shall immediately, under this provision, become Tenant's Attorney in Fact to exercise any and all rights and to execute any and all documents necessary to secure compliance. Tenant hereby approves of any reasonable action taken by Landlord pursuant to said Power of Attorney and waives any and all claims in relation thereto.
SECTION V - FINANCIAL OBLIGATIONS OF TENANT- ESCALATORS, PENALTIES, AND REMEDIES
1. RENT SECURITY - At the time this lease is signed by both parties, the Tenant shall pay to the Landlord the sum of ONE THOUSAND SIX HUNDRED NINETY TWO DOLLARS ($1,692.00) as the first month's rent that is due and payable hereunder and the additional sum of ONE THOUSAND SIX HUNDRED NINETY TWO DOLLARS ($1,692.O0) "security" guaranteeing Tenant conformance to the terms and conditions of this lease.
It is agreed that on each anniversary date of this lease, Tenant shall be required to deposit additional security in the amount of the difference between the monthly rental rate in effect on the current anniversary date and the monthly rate in effect on the prior year's anniversary date.
It is mutually agreed that the security money deposited with the Landlord is considered as a guarantee that Tenant shall conform to all the covenants, addenda, terms and conditions of this lease. The security deposit or any part thereof may be applied by the Landlord with no prior notice to cure any default of Tenant under this lease and upon notice by Landlord of such application, the Tenant shall replenish the security deposit in full by promptly paying to the Landlord the amount so applied within ten days from receipt of said notice. It is further understood and agreed that the amount set forth in any notice as being the amount required by the Landlord to maintain the security deposit at the proper amount shall be deemed additional rent and failure to pay same shall be a default in the payment of additional rent resulting in the Landlord having the option to exercise all of its remedies pursuant to this agreement.
Under no circumstances shall the security deposit be considered as an advance payment of the rent for the ending month(s) of this Lease. Said deposit will be retained by the Landlord until after the Tenant has vacated the premises at which time the Landlord shall inspect the premises to determine if any damage has been caused by Tenant. If none
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Carco Group, Inc. Lease Page 13 of 21
exists, then the deposit will be returned to the Tenant, otherwise the deposit will be considered applicable to any necessary repairs to be made by Landlord.
PENALTY FOR NONPAYMENT OF LAST MONTH'S RENT - Tenant agrees that in the event that the Tenant fails to pay the last month's rent due under this Lease, that Tenant will agree to pay a penalty equivalent to an additional month's rent plus the cost of any and all reasonable attorney's fees paid by Landlord in connection with eviction proceedings commenced due to Tenant's failure to pay the last month's rent.
2. (a) FIRE INSURANCE - Notwithstanding Covenant Twenty-third of the preprinted portion of this lease, it is understood and agreed that in the event the fire insurance premium on the demised building, where Tenant is renting a portion thereof, is raised by virtue of the business conducted by the Tenant in the premises, the Tenant will pay the Landlord the amount of said increase.
(b) LIABILITY INSURANCE - Public Liability and Other Insurance: Tenant covenants to provide on or before the commencement of the demised term and to keep in force during the demised term a comprehensive liability policy of insurance, including property damage, insuring Tenant and Gyrodyne Company of America, Inc. as Landlord as an additional named insured under the policy against any liability for injury to persons and/or property and death of any person(s) occurring in on or about the premises, or any appurtenances thereto. Such policy or policies to be written by one or more responsible insurance companies authorized by the State of New York to do business satisfactory to Landlord and the limits of liability thereunder shall not be less than the amount of Five Hundred Thousand ($500,000) dollars in respect to any one person injured killed, not less than the amount of One Million ($1,000,000) dollars in respect to any one accident, and not less than the amount of Fifty Thousand ($50,000) dollars in respect to property damages.
All such insurance may be carried under the blanket policy covering the premises and any other Tenant's properties. Tenant agrees to deliver to Landlord, at least fifteen (15) days prior to the time such insurance is first required to be carried by Tenant, and thereafter at least fifteen (15) days prior to the expiration of any such policy, either a duplicate or a certificate and true copy of all policies procured by Tenant in compliance with its obligations hereunder, together with evidence of payment thereof and including an endorsement which states that such insurance may not be canceled, except upon ten (10) days written notice to Landlord and only designee(s) of Landlord, and complete waiver of all rights of subrogation against the Landlord, its servants, agents and/or employees.
3. BROKER - The Tenant warrants and represents that no broker unless otherwise set forth in this agreement and if one is set forth herein no other broker is involved in the negotiation of this lease, nor in any of the transactions connected therewith and agrees to indemnify and safe harmless the Landlord from any claim for brokerage commissions due to acts of the Tenant.
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Carco Group, Inc. Lease Page 14 of 21
4. LEASE TERM AND ADJUSTMENTS - The term period of this lease shall be from MAY 1, 1999 through AUGUST 31, 2002. The base annual rent for this lease term period shall be $20,304.00 payable in monthly installments of $1,692.00 each. Said rent being subject to adjustments as follows:
(a) REAL ESTATE TAXES - $2,797.00 ($1.24 x 2,256 sq. ft.) of the base annual rent is allocated to the Landlord's real estate tax on the "Flowerfield" property which includes Building #7 and the demised premises therein. It is agreed that if at any time the Town of Smithtown, N.Y. or the Town of Brookhaven, N.Y. levies a tax increase, whether in the form of a rate increase or assessment change on the property, regardless of the basis for change, which increase shall be effective during any portion of the lease term, then there will be an adjustment in the annual rent which will be computed on the basis of the percentage of tax change multiplied by the $2,797.00. The resultant, converted to a monthly charge if in excess of $.02/sq. ft., shall be added to the monthly rental rate in effect at that time; otherwise, a single billing will be made during either January or February, annually, as applicable.
(b) HEAT/FUEL OIL COST - The base annual rent includes the Landlord's cost for supplying heat to the demised premises. Said cost factor being set at the "peg" price of oil at $.85 per gallon (including NYS Sales Tax, NYS Use Tax, propane gas, associated electric costs, service and boiler insurance). Thus, if at any time after the commencement of this lease and the end of the lease term period, the cost per gallon of oil increases above the "peg" price, the rent will be adjusted at the rate of $.0l per year per square foot of space (2,256 sq. ft.) for each $.01 per gallon increase. This annual rent adjustment will be converted to a monthly charge and added to the rent in effect at that time.
(c) INSURANCE - The base annual rent includes the Landlord's cost for
building, general liability, and related insurance. $1,038.00 ($.46
x 2,256 sq. ft.) of the base annual rent is allocated to the
Landlord's insurance requirements. The cost per square foot of $.46
is predicated on a 164,413 sq. ft. rental base and a premium base of
$75,900.68 for the current period. In the event in any lease year,
the premium for Landlord's insurance requirements covering the
leased premises increases over the premium amount in effect on the
date of execution of this agreement, within ten (10) days from
receipt of notification, the Tenant shall pay its proportionate
share of said increase to the Landlord. Said obligation shall be
deemed additional rent, and Tenant's proportionate share of said
increase shall be computed on the basis of the percentage increase
in insurance costs multiplied by the $1,038.00. Notification by
Landlord shall be deemed conclusive if sent in writing, setting
forth the computations resulting in a statement as to Tenant's
proportionate liability. Notwithstanding anything else contained
herein to the contrary, this obligation of the Tenant shall remain
in full force and effect even if the Landlord elects to self-insure
provided the Landlord presents a statement in writing showing what
the premium amount would be and the increase if the Landlord had
elected not to self-insure.
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Carco Group, Inc. Lease Page 15 of 21
(d) GARBAGE/TRASH REMOVAL COST - FOR ESCALATION PURPOSES ONLY: $677.00 ($.30 x 2,256 sq. ft.) of the base annual rent is allocated to garbage/trash and recyclable material removal for the demised premises. Landlord has reserved in the rental base a flat $.101 charge per square foot for the removal of pallets, oversized debris, dumpster area cleanup, land allocation expense and overhead charges. It is mutually agreed that the $.30/sq. ft. rate is a pro rata apportionment of cartage expenses for garbage and separable recyclables. Any change in the Town of Smithtown Town Code which may: establish a commercial cartage district, implement direct charge tipping fee(s) and/or administrative assessment(s) on Landlord, change the composition of required recyclable(s), or otherwise impact the total cartage expense allocable to the demised premises shall be passed-through to Tenant. Further, if at any time after the commencement of this lease and before the end of the lease term period, the cartage rates charged to the Landlord by the Landlord's carter increase, there will be an adjustment in the annual rent predicated on Tenant's allocable base. Tenant's base "peg" for all additional charges, regardless of source, shall be 2,256/100,214 sq. ft. or 2.25% of the total current bill of $30,000.60. The total cartage bill for calculation purposes shall be deemed to include all Town of Smithtown and cartage company charges plus applicable federal, state and local taxes. Any resultant additional rental, converted to a monthly charge, shall be added to the monthly rental rate in effect at that time.
(e) SECURITY GUARDS - $620.00 ($.275 x 2,256 sq. ft.) of the base annual rent is allocated to security guard services for the demised premises. Landlord has determined that security services during the 1998 calendar year, January 1st through December 31st, shall be assessed at the rate of $22.88 per month per 1,000 square feet of rented space based on a budgeted cost of $45,144.97 apportioned over 164,413 sq. ft. rental base. This provision shall not be construed to limit Landlord's ability to continue to provide security guard services to Tenant. Landlord may, in its sole discretion, extend or curtail security guard services in any manner deemed necessary by Landlord. Landlord may adjust Tenant's annual rent to reflect such changes in security guard services.
(f) SERVICING COMMON AREAS AND OUTSIDE MAINTENANCE - Void.
(g) COST OF LIVING ADJUSTMENT - On each anniversary date of this lease, there will be a "Cost of Living (C.O.L.)" rent adjustment based upon the to-be-published Consumer Price Index for March 1999 and each succeeding March Consumer Price Index or a flat 3.5 percent increase whichever is greater.
In this regard, $20,304.00 shall be the C.O.L. base subject to the first annual rent adjustment without regard to abatements or concessions, if any. In making such calculations, no effect shall be given to existing rent concessions or abatements (if any). The amount of said rent adjustment added to the C.O.L. base rent will establish
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Carco Group, Inc. Lease Page 16 of 21
the new C.O.L. base rent subject to the following year's "Cost of Living" adjustment. The same formula will be used to determine subsequent "C.O.L." adjustments.
"Price Index" shall mean the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics (BLS), U.S. Department of Labor, New York, NY and Northeastern N.J.. region, 1982-84 = 100, or any other renamed local index covering the New York, NY region.
If the BLS changes the publication frequency of the Price Index so that a Price Index is not available to make a cost-of-living adjustment of annual rent as specified herein, the cost-of-living adjustment shall be based on the percentage difference between the Price Index for the closest preceding month for which a Price Index is available and the Price Index for the Base Month as defined in this Lease.
In the event that the Consumer Price Index (CPI) ceases to use 1982-84 = 100 as the basis calculation, or if in Landlord's sole judgment, a substantial change is made in the terms or number of items contained in the CPI, then the CPI shall be adjusted (the "Adjustment") to the figure that would have been arrived at (or as close to such figure as shall be practical) had the manner of computing the CPI in effect at the date of this lease not been altered. Further, if in Landlord's sole judgment, such adjustment is impossible or impractical, then the revised CPI shall be deemed to replace the original CPI for purposes of this covenant.
If the BLS otherwise substantially revises, or ceases publication of, the Price Index, then a substitute index for determining cost-of-living adjustments, issued by the BLS or by a reliable governmental or other nonpartisan publication, shall be reasonably designated by Landlord.
5. ACCOUNTING METHODS - It is understood and agreed that upon presentation to the Tenant of any computation with respect to rent, and/or additional rent, or utilities, or computations as to the amount of money to be paid by the Tenant concerning any obligation referred to in this lease to be performed by the Tenant, provided said computations are predicated upon reasonable accounting methods and procedures, then and in that event, computations of the Landlord shall be deemed conclusive and binding upon Tenant and the Tenant hereby waives the presentation of any and all invoices, checks or bills prior to making said payment and during any trial concerning the failure of the Tenant to make said payments.
6. LATE PAYMENT PENALTIES - Rent and any other Tenant incurred charges appearing on the Landlord's monthly invoices are due and payable to the Landlord on the first day of each month. There will be a four (4) day grace period through the fifth (5th) day of the month for the payment of such due bills. However any such unpaid bills after said date will be assessed at the late charge rate of $3.00 per day or 2% per month, whichever is higher, computed from the first day of the month in which said bill is due, to the date of payment to the Landlord. This late charge shall be cumulative and be deemed an additive
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Carco Group, Inc. Lease Page 17 of 21
to the rent for the month such due bill is issued. Late Charges run concurrently (for example: October and November rents are paid December 1st, therefore, a total late penalty of $273.00 would be applicable - $183.00 for the 61 days outstanding on the October rent and $90.00 for the 30 days outstanding on the November rent.)
Tenant's postdated check will be considered subject to the above assessment if the check date exceeds the above stated payment deadline.
In the event a Tenant check fails bank clearance for any reason, the Landlord shall charge the Tenant with a $20.00 penalty fee to cover bank and administrative costs. If the Tenant fails to correct this deficiency and has not paid the Landlord the monies due by the tenth day of the month, then the late charge as set forth above shall be applicable.
The Landlord's failure to demand or collect said late charges shall in no way be deemed a waiver of any right thereto or any other rights or remedies that the Landlord may have under the terms of this lease, by summary proceedings or otherwise.
7. ADDITIONAL RENT - Any and all payments and/or expenses required to be paid by the Tenant shall be deemed additional rent and rent if same are due the Landlord or in the event the Landlord expends said monies on behalf of the Tenant for which the Tenant has an obligation to reimburse the Landlord.
8. CESSATION OF UTILITIES - Tenant hereby agrees that in the event the Tenant has failed to pay to the Landlord any utility charges that are billed to the Tenant by the Landlord and said charges remain unpaid and outstanding for a period of 60 days, in addition to the other remedies the Landlord may have, the Landlord shall have the right to terminate the providing of said utilities to the leased premises of the Tenant. Notwithstanding anything else contained herein to the contrary, in such event, the Tenant waives any and all claims against the Landlord for any damages whatsoever, consequential and/or punitive, that may be incurred by the Tenant as a result of the termination of said utilities.
9. NOTICES AND SERVICE OF PROCESS - Any notice or demand which under the terms of this lease or under any statute must or may be given or made by the parties hereto or legal documents including, but not limited to, those documents commencing legal action and/or proceedings shall be in writing and shall be deemed properly served upon the Tenant if served personally or by mailing same through the U.S. mail to either the address of the Tenant as stated in the preprinted portion of the lease or the initialed Tenant Fact Sheet or to any of the personal guarantors of said lease. If and when said service is made, the Tenant hereby waives any jurisdictional defects and/or claims of improper service.
10. DEFAULT - Tenant hereby agrees that in the event Tenant breaches the terms and conditions of this lease for two consecutive monthly periods or three times in any 12 month period, same shall be deemed a default thereby permitting the Landlord, at its option to terminate this Lease as per the terms and conditions of said Lease.
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Carco Group, Inc. Lease Page 18 of 21
11. ALLOCATION OF PARTIAL PAYMENTS AND DISPUTES - In the event of a partial payment or a payment on account, hereinafter for the purpose of this provision these terms are used interchangeably, Tenant shall not have the right to allocate payment(s) against specific charge(s) on an invoice(s) submitted by Landlord. Further, Tenant waives the right to claim that Landlord shall be diminished legally with respect to accepting said partial payment in any arbitration or legal proceeding. Landlord and Tenant herewith reaffirm Landlord's undiminished rights, with respect to partial payment(s) by Tenant, to recovery by Landlord for amounts invoiced and unremitted by Tenant; recovery of any penalties, as provided elsewhere herein, that may be assessed Tenant for underpayment; and recovery of the premises, if such recovery shall be the subsequent result of a default declaration.
In the event of a dispute between Landlord and Tenant for any invoiced amounts, other than those pertaining to base rent, Tenant shall be required to remit payment in full as per the terms of the invoice, and if no payment terms are stated, within thirty (30) days of invoice, with a written protest detailing all allegations, financial calculations, and documentation for those amounts in dispute. In the event the parties are unable to resolve the dispute within sixty days of the remittance, both parties agree to submit to binding arbitration with respect to the disputed amount(s). Failure to remit disputed amounts shall be construed by Landlord as non-payment and shall remain grounds for a default declaration by Landlord. Unless a written notice to Landlord of a dispute, conveyed and qualified under NOTICES AND SERVICE OF PROCESS herein, is made at the time of remittance, Tenant waives all rights to recourse.
12. RENT ACCELERATION - Anything herein to the contrary notwithstanding, the premises herein mentioned are demised for the whole term with the whole amount of rent herein reserved, due and payable at the time of the making of this lease and the payment of rent in installments as herein provided is for the convenience of the Tenant only. If default by the Tenant in the making of any installment payment of rent occurs, then the whole of the rent reserved for the whole period shall then become due and payable to the Landlord without notice or demand.
13. LANGUAGE PRECEDENCE - In the event of conflict between the preprinted portion of this Lease and the Addendum hereto, the terms and conditions set forth in the Addendum shall control.
14. HEADINGS - Headings used throughout this Lease are inserted for reference purposes only, and are not to be considered or taken into account in construing the terms or provisions of any covenant or paragraph hereof nor to be deemed in any way to qualify, modify or explain the effect of any such provisions or terms.
15. ATTORNEY'S FEES - All parties agree that $500.00 is reasonable as an attorney's fees if the matter is resolved after service of Notice of Petition and Petition and receipt of Tenant's response and prior to appearing in court. In the event any further papers not associated with the above resolution must be prepared and/or further expenditure of time
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Carco Group, Inc. Lease Page 19 of 21
is required, then, and in that event, Landlord shall be entitled to additional reasonable legal fees over and above the sum of $500.00 at the agreed upon stipulated reasonable sum of $175.00 per hour.
16. ADDRESS DESIGNATION - Landlord has the full right at any time to name and change the name of the building and property and to change the designated address of the building and property. The building and property may be named after any person, firm or otherwise, whether or not the name is, or resembles, the name of a tenant of the building and property.
17. EARLY TERMINATION - Landlord herewith agrees, with the following qualification, to release Tenant from this lease, if and only if, during the term of this lease Tenant and Landlord enter into another lease for a different premises at Flowerfield. Tenant shall remain liable for all applicable covenants, such as, but not restricted to: reversion provisions, exit charges, abandonment, etc., as if this lease had run its full course.
18. LEASE AMENDMENTS - If, in the event that the Landlord desires financing or refinancing for the premise of which the demised premise form a part, Tenant may not withhold, delay, or defer consent for any modifications to the lease as a condition for the financing or refinancing.
Remedies - The Tenant is permitted fifteen (15) days after written notice from the Landlord to conform to the conditions which are requested by the lender. If Tenant fails or refuses to execute conditions requested by Landlord, Landlord reserves the right to terminate the lease or perform the execution of any document for and on behalf of Tenant as its attorney-in-fact. Landlord as attorney-in-fact may only execute instruments pertaining to conditions requested by lender.
SECTION VI - VACATION AND ABANDONMENT
1. HOLDOVER - In the event this lease is not renewed and the Tenant has failed to vacate the premises prior to AUGUST 31, 2002 then the Tenant agrees to pay the Landlord triple the monthly rent then applicable for each month or portion thereof that Tenant retains possession of the premises or any portion thereof, after the expiration or termination of this lease and shall also pay all damages sustained by Landlord by reason of such retention of possession.
In addition, Tenant will also pay those other items of additional rent which would have been payable monthly pursuant to this lease, had this lease not expired. The provisions of this section shall not constitute a waiver by the Landlord of any reentry rights of the Landlord pursuant to other provisions contained herein or as provided by law. At the sole option of the Landlord, expressed by written notice to the Tenant, but not otherwise, such holding over shall constitute a renewal of this lease for a period of one year on the terms
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Carco Group, Inc. Lease Page 20 of 21
and conditions herein set forth at triple the then current monthly rent. In the event the Landlord does not exercise said option, then as previously set forth, the Tenant shall pay the Landlord triple the then monthly rent during the holdover period.
2. GUARANTEES - It is mutually agreed and understood that if Tenant after the conclusion of the hereinbefore defined lease term becomes a month-to-month tenant, a tenant at will, or a holdover tenant, all personal, business, and corporate guarantees applicable to the hereinbefore defined lease term shall unequivocally also apply to the extended lease term.
3. (a) ABANDONED PROPERTY - It is hereby understood and agreed that in the event the Tenant leaves any property on the demised premises or any common areas in, on, or about Flowerfield, subsequent to the expiration of the within lease that said property is hereby deemed abandoned and the Landlord may dispose of said property at its option without any liability on the part of the Landlord. It is further understood and agreed that the Tenant waives any and all rights, title and interest to said property, releases and waives any and all claims thereto and further agrees that the Tenant will be responsible to the Landlord for any and all expenses incurred by the Landlord concerning said property.
(b) UNAUTHORIZED VEHICLES - Landlord retains the sole right to reassign parking and may, with one week's written notice, change the parking lot and/or parking area assignment of Tenant. Landlord shall not unilaterally, however, reduce the agreed upon spaces allotted Tenant above. It is understood and agreed that in the event any vehicles of any parties, their servants, agents and/or employees, invitees, licensees, subtenants, etc., are improperly parked on the grounds of the Landlord, the Landlord is hereby granted express permission to take any and all necessary steps to remove said vehicles including but not limited to the towing of said vehicles. For the purpose of this paragraph "improperly parked" shall mean any vehicle parked in a loading zone; parked in an area designated with a sign as a no parking zone; parked in other than a designated parking lot, parked overnight without the express permission of the Landlord, or parked overnight in other than a fenced-in reserved parking area. Any and all expenses relating to the removal of said vehicles and/or the safeguarding of said vehicles, if the Landlord elects to do so, shall be the responsibility of either the owner of the vehicles or the applicable tenant whose business led to said vehicles being on the grounds of the Landlord and said parties hereby agree to immediately reimburse the Landlord for said expenses together with interest at the 2% per month and same shall constitute additional rent to which the failure to pay shall result in the Landlord exercising, at its option, any of the remedies provided for herein. The Tenant specifically waives any claim for damages arising from the removal of vehicles owned and/or operated by the Tenant, its servants, agents and/or employees and releases the Landlord from any such claims. In the event claims are made by third parties as a result of the removal of said vehicles or any damage caused to said vehicles, the Tenant hereby agrees to hold harmless, indemnify and defend the Landlord concerning said claims.
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Carco Group, Inc. Lease Page 21 of 21
In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
(C) UNPLATED VEHICLES - It is agreed that motor vehicles without license plates constitute a special situation. Any unregistered motor vehicle parked on the Flowerfield premises will be subject to all the conditions herein above described and to a ten ($10.00) dollar per day parking fee effective after the first twenty-four hours of parking. In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
(d) WASTE - Tenant at expiration of Lease shall be solely liable for removal of any drums, cans, or containers over one gallon in addition to its other responsibilities. In the event the drums, cans or containers are not removed, until such time that same are complied with, Tenant agrees not to demand return of any portion or its securities being held by Landlord. In addition thereto, the Tenant again appoints the Landlord as its Attorney in Fact to exercise any and all rights, and to execute any and all documents necessary to secure compliance with this provision. Tenant hereby approves of any actions taken by the Landlord pursuant to said Power of Attorney and waives any and all claims in relation thereto.
4. ENTIRE AGREEMENT - This Lease with attached preprinted portion and Addendums is the complete agreement between Tenant and Landlord in its entirety with respect to the premises leased herein and cannot be changed, modified or terminated orally. There are no representations, agreements, arrangements or understandings oral or written, between Tenant and Landlord up to the date of this Lease, which are not fully contained herein.
Gyrodyne Company of America, Inc.
5/3/99 /s/ Frank D'Alessandro
---------------- ------------------------------------
Date (Landlord)
Carco Group, Inc.
5.03.99 /s/ Denise Brett Carlsen
---------------- ------------------------------------
Date (Tenant)
Carco Group, Inc. Lease Page 21 of 21
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Carco Group, Inc. Lease Page 22 of 21 |
Tenant Billing Change Form
1. Tenant Name Carco Group, Inc.
2. Tenant Number 7
3. Tenant Address 7 Flowerfield, Suite 40
St. James, NY 11780
Billing Address No change
4. Reason for Change New lease for additional space
5. Effective Date 5/1/99
6. Log # ____________________________________
7. Duration 5/1/99 - 8/31/02
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8. Comments 1) Monthly rent $1,692.00
2) Security - 1 month (to be billed - $1,692.00)
3) 2,256 sq. ft.
4) Sprinkler percentage - 4.21%
5) No longer pay interest on security.
Carco Group, Inc. Lease Page 22 of 21
EXHIBIT A
Landlords Work Letter
For
Carco, Building 7 Suite 40
3/18/1999
In general unless otherwise noted all work listed is to be completed by the Landlord at no expense to the Tenant.
1. Paint
A) Paint interior walls off white or similar color.
B) Paint ceiling flat back.
2. Floor Coverings
A) Existing floor tiles to be cleaned to a reasonable condition. Other floor areas if any to be painted gray.
3. Ceilings
A) Ceiling tiles to be removed
4. Openings
A) Provide up to two openings to adjoining tenants suite. Openings not to be larger then 8' x 8'.
5. Electrical
A) Install chain suspended florescent lights of type and quantity similar to those in existing Tenants suite in same building for records storage.
6. Demolition
A) Remove existing offices.
A 35--Lease, Business, Premises, DISTRIBUTED BY Blumberg, Inc.,
Loft, Office or Store. 3-98. NYC 10013
This Lease made the 3rd day of May 1999, between
GYRODYNE COMPANY OF AMERICA, INC.
hereinafter referred to as LANDLORD, and
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CARCO GROUP, INC.
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant hereby hires and takes from the Landlord AN AREA DEEMED TO BE APPROXIMATELY 2,256 SQUARE FEET OF SPACE in the building known as 7 FLOWERFIELD, SUITE 40 to be used and occupied by the Tenant OFFICE SPACE AND RECORDS STORAGE
and for no other purpose, for a term to commence on MAY 1 1999, and to end on AUGUST 31, 2002 unless sooner terminated as hereinafter provided, at the ANNUAL RENT of TWENTY THOUSAND THREE HUNDRED FOUR DOLLARS ($20,304.00) WHICH SHALL BE SUBJECT TO ADJUSTMENT PURSUANT TO THE COVENANTS HEREIN AND NOT RESTRICTED TO ADDENDUM SECTION V, PARAGRAPH 4 (a), (b), (c), (d), (e) and (g). /$1,692.00 all payable in equal monthly instalments in advance on the first day of each and every calendar month during said term,
except the first instalment, which shall be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
REPAIRS
ORDINANCES AND VIOLATIONS
ENTRY
INDEMNIFY LANDLORD
SECOND.--That, throughout said term the Tenant will take good care of the demised premises, fixtures and appurtenances, and all alterations, additions and improvements to either; make all repairs in and about the same necessary to preserve them in good order and condition, which repairs shall be, in quality and class, equal to the original work; promptly pay the expense of such repairs; suffer no waste or injury; give prompt notice to the Landlord of any fire that may occur; execute and comply with all laws, rules, orders, ordinances and regulations at any time issued or in force (except those requiring structural alterations), applicable to the demised premises or to the Tenant's occupation thereof, of the Federal, State and Local Governments, and of each and every department, bureau and official thereof, and of the New York Board of Fire Underwriters; permit at all times during usual business hours, the Landlord and representatives of the Landlord to enter the demised premises for the purpose of inspection, and to exhibit them for purposes of sale or rental; suffer the Landlord to make repairs and improvements to all parts of the building, and to comply with all orders and requirements of governmental authority applicable to said building or to any occupation thereof; suffer the Landlord to erect, use, maintain, repair and replace pipes and conduits in the demised premises and to the floors above and below; forever indemnify and save harmless the Landlord for and against any and all liability, penalties, damages, expenses and judgments arising from injury during said term to person or property of any nature, occasioned wholly or in part by any act or acts, omission or omissions of the Tenant, or of the employees, guests, agents, assigns or undertenants of the Tenant and also for any matter or thing growing out of the occupation of the demised premises or of the streets, sidewalks or vaults adjacent thereto; permit, during the six months next prior to the expiration of the term the usual notice "To Let" to be placed and to remain unmolested in a conspicuous place upon the exterior of the demised premises; repair, at or before the end of the term, all injury done by the installation or removal of furniture and property; and at the end of the term, to quit and surrender the demised premises with all alterations, additions and improvements in good order and condition.
MOVING INJURY SURRENDER
NEGATIVE COVENANTS
OBSTRUCTION SIGNS
AIR CONDITIONING
THIRD.--That the Tenant will not disfigure or deface any part of the building, or suffer the same to be done, except so far as may be necessary to affix such trade fixtures as are herein consented to by the Landlord; the Tenant will not obstruct, or permit the obstruction of the street or the sidewalk adjacent thereto; will not do anything, or suffer anything to be done upon the demised premises which will increase the rate of fire insurance upon the building or any of its contents, or be liable to cause structural injury to said building; will not permit the accumulation of waste or refuse matter, and will not, without the written consent of the Landlord first obtained in each case, either sell, assign, mortgage or transfer this lease, underlet the demised premises or any part thereof, permit the same or any part thereof to be occupied by anybody other than the Tenant and the Tenant's employees, make any alterations in the demised premises, use the demised premises or any part thereof for any purpose other than the one first above stipulated, or for any purpose deemed extra hazardous on account of fire risk, nor in violation of any law or ordinance. That the Tenant will not obstruct or permit the obstruction of the light, halls, stairway or entrances to the building, and will not erect or inscribe any sign, signals or advertisements unless and until the style and location thereof have been approved by the Landlord; and if any be erected or inscribed without such approval, the Landlord may remove the same. No water cooler, air conditioning unit or system or other apparatus shall be installed or used without the prior written consent of Landlord.
IT IS MUTUALLY COVENANTED AND AGREED, THAT
FIRE CLAUSE
FOURTH.--If the demised premises shall be partially damaged by fire or other cause without the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, the damages shall be repaired by and at the expense of Landlord and the rent until such repairs shall be made shall be apportioned according to the part of the demised premises which is usable by Tenant. But if such partial damage is due to the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, without prejudice to any other rights and remedies of Landlord and without prejudice to the rights of subrogation of Landlord's insurer, the damages shall be repaired by Landlord but there shall he no apportionment or abatement of rent. No penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Landlord and/or Tenant, and for reasonable delay on account of "labor troubles", or any other cause beyond Landlord's control. If the demised premises are totally damaged or are rendered wholly untenantable by fire or other cause, and if Landlord shall decide not to restore or not to rebuild the same, or if the building shall be so damaged that Landlord shall decide to demolish it or to rebuild it, then or in any of such events Landlord may, within ninety (90) days after such fire or other cause, give Tenant a notice in writing of such decision, which notice shall be given as in Paragraph Twelve hereof provided, and thereupon the term of this lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the demised premises and surrender the same to Landlord. If Tenant shall not be in default under this lease then, upon the termination of this lease under the conditions provided for in the sentence immediately preceding, Tenant's liability for rent shall cease as of the day following the casualty. Tenant hereby expressly waives the provisions of Section 227 of the Real Property Law and agrees that the foregoing provisions of this Article shall govern and control in lieu thereof. If the damage or destruction be due to the fault or neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
EMINENT DOMAIN
FIFTH.--If the whole or any part of the premises hereby demised shall be taken or condemned by any competent authority for any public use or purpose then the term hereby granted shall cease from the time when possession of the part so taken shall be required for such public purpose and without apportionment of award, the Tenant hereby assigning to the Landlord all right and claim to any such award, the current rent, however, in such case to be apportioned.
LEASE NOT IN EFFECT
DEFAULTS
TEN DAY NOTICE
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated a bankrupt, or make a "general assignment," or take the benefit of any insolvent act, or if a Receiver or Trustee be appointed for the Tenant's property, or if this lease or the estate of the Tenant hereunder be transferred or pass to or devolve upon any other person or corporation, or if the Tenant shall default in the performance of any agreement by the Tenant contained in any other lease to the Tenant by the Landlord or by any corporation of which an officer of the Landlord is a Director, this lease shall thereby, at the option of the Landlord, be terminated and in that case, neither the Tenant nor anybody claiming under the Tenant shall be entitled to go into possession of the demised premises. If after the commencement of the term, any of the events mentioned above in this subdivision shall occur, or if Tenant shall make default in fulfilling any of the covenants of this lease, other than the covenants for the payment of rent or "additional rent" or if the demised premises become vacant or deserted, the Landlord may give to the Tenant ten days' notice of intention to end the term of this lease, and thereupon at the expiration of said ten days' (if said condition which was the basis of said notice shall continue to exist) the term under this lease shall expire as fully and completely as if that day were the date herein definitely fixed for the expiration of the term and the Tenant will then quit and surrender the demised premises to the Landlord, but the Tenant shall remain liable as hereinafter provided.
RE-POSSESSION BY LANDLORD
RE-LETTING
WAIVER BY TENANT
If the Tenant shall make default in the payment of the rent reserved hereunder, or any item of "additional rent" herein mentioned, or any part of either or in making any other payment herein provided for, or if the notice last above provided for shall have been given and if the condition which was the basis of said notice shall exist at the expiration of said ten days' period, the Landlord may immediately, or at any time thereafter, re-enter the demised premises and remove all person and all or any property therefrom, either by summary dispossess proceedings, or by any suitable action or proceeding at law, or by force or otherwise, without being liable to indictment, prosecution or damages therefor, and re-possess and enjoy said premises together with all additions, alterations and improvements. In any such case or in the event that this lease be "terminated" before the commencement of the term, as above provided, the Landlord may either re-let the demised premises or any part or parts thereof for the Landlord's own account, or may, at the Landlord's option, re-let the demised premises or any part or parts thereof as the agent of the Tenant, and receive the rents therefor, applying the same first to the payment of such expenses as the Landlord may have incurred, and then to the fulfillment of the covenants of the Tenant herein, and the balance, if any, at the expiration of the term first above provided for, shall be paid to the Tenant. Landlord may rent the premises for a term extending beyond the term hereby granted without releasing Tenant from any liability. In the event that the term of this lease shall expire as above in this subdivision "Sixth" provided, or terminate by summary proceedings or otherwise, and if the Landlord shall not re-let the demised premises for the Landlord's own account, then, whether or not the premises be re-let, the Tenant shall remain liable for, and the Tenant hereby agrees to pay to the Landlord, until the time when this lease would have expired but for such termination or expiration, the equivalent of the amount of all of the rent and "additional rent" reserved herein, less the avails of reletting, if any, and the same shall be due and payable by the Tenant to the Landlord on the several rent days above specified, that is, upon each of such rent days the Tenant shall pay to the Landlord the amount of deficiency then existing. The Tenant hereby expressly waives any and all right of redemption in case the Tenant shall be dispossessed by judgment or warrant of any court or judge, and the Tenant waives and will waive all right to trial by jury in any summary proceedings hereafter instituted by the Landlord against the Tenant in respect to the demised premises. The words "re-enter" and "re-entry" as used in this lease are not restricted to their technical legal meaning.
REMEDIES ARE CUMULATIVE
In the event of a breach or threatened breach by the Tenant of any of the covenants or provisions hereof, the Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity, as if re-entry, summary proceedings and other remedies were not herein provided for.
LANDLORD MAY PERFORM
ADDITIONAL RENT
SEVENTH.--If the Tenant shall make default in the performance of any covenant herein contained, the Landlord may immediately, or at any time thereafter, without notice, perform the same for the account of the Tenant. If a notice of mechanic's lien be filed against the demised premises or against premises of which the demised premises are part, for, or purporting to be for, labor or material alleged to have been furnished, or to be furnished to or for the Tenant at the demised premises, and if the Tenant shall fail to take such action as shall cause such lien to be discharged within fifteen days after the filing of such notice, the Landlord may pay the amount of such lien or discharge the same by deposit or by bonding proceedings, and in the event of such deposit or bonding proceedings, the Landlord may require the lienor to prosecute an appropriate action to enforce the lienor's claim. In such case, the Landlord may pay any judgment recovered on such claim. Any amount paid or expense incurred by the Landlord as in this subdivision of this lease provided, and any amount as to which the Tenant shall at any time be in default for or in respect to the use of water, electric current or sprinkler supervisory service, and any expense incurred or sum of money paid by the Landlord by reason of the failure of the Tenant to comply with any provision hereof, or in defending any such action, shall be deemed to be "additional rent" for the demised premises, and shall be due and payable by the Tenant to the Landlord on the first day of the next following month, or, at the option of the Landlord, on the first day of any succeeding month. The receipt by the Landlord of any instalment of the regular stipulated rent hereunder or any of said "additional rent" shall not be a waiver of any other "additional rent" then due.
AS TO WAIVERS
EIGHTH.--The failure of the Landlord to insist, in any one or more instances upon a strict performance of any of the covenants of this lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by the Landlord of rent, with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach and no waiver by the Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Landlord. Even though the Landlord shall consent to an assignment hereof no further assignment shall be made without express consent in writing by the Landlord.
COLLECTION OF RENT FROM OTHERS
NINTH.--If this lease be assigned, or if the demised premises or any part thereof be underlet or occupied by anybody other than the Tenant the Landlord may collect rent from the assignee, under-tenant or occupant, and apply the net amount collected to the rent herein reserved, and no such collection shall be deemed a waiver of the covenant herein against assignment and underletting, or the acceptance of the assignee, under-tenant or occupant as tenant, or a release of the Tenant from the further performance by the Tenant of the covenants herein contained on the part of the Tenant.
MORTGAGES
TENTH--This lease shall be subject and subordinated at all times, to the lien of the mortgages now on the demised premises, and to all advances made or hereafter to be made upon the security thereof, and subject and subordinate to the lien of any mortgage or mortgages which at any time may be made a lien upon the premises. The Tenant will execute and deliver such further instrument or instruments subordinating this lease to the lien of any such mortgage or mortgages as shall be desired by any mortgagee or proposed mortgagee. The Tenant hereby appoints the Landlord the attorney-in-fact of the Tenant, irrevocable, to execute and deliver any such instrument or instruments for the Tenant.
IMPROVEMENTS
ELEVENTH.--All improvements made by the Tenant to or upon the demised premises, except said trade fixtures, shall when made, at once be deemed to be attached to the freehold, and become the property of the Landlord, and at the end or other expiration of the term, shall be surrendered to the Landlord in as good order and condition as they were when installed, reasonable wear and damages by the elements excepted.
NOTICES
[VOID]
NO LIABILITY
THIRTEENTH.--The Landlord shall not be liable for any failure of water supply or electrical current, sprinkler damage, or failure of sprinkler service, nor for injury or damage to person or property caused by the elements or by other tenants or persons in said building, or resulting from steam, gas, electricity, water, rain or snow, which may leak or flow from any part of said buildings, or from the pipes, appliances or plumbing works of the same, or from the street or sub-surface, or from any other place, nor for interference with light or other incorporeal hereditaments by anybody other than the Landlord, or caused by operations by or for a governmental authority in construction of any public or quasi-public work, neither shall the Landlord be liable for any latent defect in the building,
NO ABATEMENT
FOURTEENTH.--No diminution or abatement of rent, or other compensation shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building or to its appliances, nor for any space taken to comply with any law, ordinance or order of a governmental authority. In respect to the various "services," if any, herein expressly or impliedly agreed to be furnished by the Landlord to the Tenant, it is agreed that there shall be no diminution or abatement of the rent, or any other compensation, for interruption or curtailment of such "service" when such interruption or curtailment shall be due to accident, alterations or repairs desirable or necessary to be made or to inability or difficulty in securing supplies or labor for the maintenance of such "service" or to some other cause, not gross negligence on the part of the Landlord. No such interruption or curtailment of any such "service" shall be deemed a constructive eviction. The Landlord shall not be required to furnish, and the Tenant shall not be entitled to receive, any of such "services" during any period wherein the Tenant shall be in default in respect to the payment of rent. Neither shall there be any abatement or diminution of rent because of making of repairs, improvements or decorations to the demised premises after the date above fixed for the commencement of the term, it being understood that rent shall, in any event, commence to run at such date so above fixed.
RULES, ETC.
FIFTEENTH.--The Landlord may prescribe and regulate the placing of safes, machinery, quantities of merchandise and other things. The Landlord may also prescribe and regulate which elevator and entrances shall be used by the Tenant's employees, and for the Tenant's shipping. The Landlord may make such other and further rules and regulations as, in the Landlord's judgment, may from time to time be needful for the safety, care or cleanliness of the building, and for the preservation of good order therein. The Tenant and the employees and agents of the Tenant will observe and conform to all such rules and regulations.
SHORING OF WALLS
[VOID]
VAULT SPACE
[VOID]
ENTRY
EIGHTEENTH.--That during seven months prior to the expiration of the term hereby granted, applicants shall be admitted at all reasonable hours of the day to view the premises until rented; and the Landlord and the Landlord's agents shall be permitted at any time during the term to visit and examine them at any reasonable hour of the day, and workmen may enter at any time, when authorized by the Landlord or the Landlord's agents, to make or facilitate repairs in any part of the building; and if the said Tenant shall not be personally present to open and permit an entry into said premises, at any time, when for any reason an entry therein shall be necessary or permissible hereunder, the Landlord or the Landlord's agents may forcibly enter the same without rendering the Landlord or such agents liable to any claim or cause of action for damages by reason thereof (if during such entry the Landlord shall accord reasonable care to the Tenant's property) and without in any manner affecting the obligations and covenants of this lease; it is, however, expressly understood that the right and authority hereby reserved, does not impose, nor does the Landlord assume, by reason thereof, any responsibility or liability whatsoever for the care or supervision of said premises, or any of the pipes, fixtures, appliances or appurtenances therein contained or therewith in any manner connected. ***
NO REPRESENTATIONS
NINETEENTH.--The Landlord has made no representations or promises in respect to said building or to the demised premises except those contained herein, and those, if any, contained in some written communication to the Tenant, signed by the Landlord. This instrument may not be changed, modified, discharged or terminated orally.
ATTORNEY'S FEES
TWENTIETH.--If the Tenant shall at any time be in default hereunder, and if the Landlord shall institute an action or summary proceeding against the Tenant based upon such default, then the Tenant will reimburse the Landlord for the expense of attorneys' fees and disbursements thereby incurred by the Landlord, so far as the same are reasonable in amount. Also so long as the Tenant shall be a tenant hereunder the amount of such expenses shall be deemed to be "additional rent" hereunder and shall be due from the Tenant to the Landlord on the first day of the month following the incurring of such respective expenses.
POSSESSION
TWENTY-FIRST.--Landlord shall not be liable for failure to give possession of the premises upon commencement date by reason of the fact that premises are not ready for occupancy, or due to a prior Tenant wrongfully holding over or any other person wrongfully in possession or for any other reason: in such event the rent shall not commence until possession is given or is available, but the term herein shall not be extended.
***THIS PROVISION ALLUDES TO THE MINIMUM ACCESS GRANTED TO LANDLORD AND IS MEANT TO BE EXPLAINED BY ANY OTHER PROVISION SET FORTH HEREIN IN BOTH PRINTED FORM AND THE RIDER ANNEXED HERETO.
THE TENANT FURTHER COVENANTS:
IF A FIRST FLOOR
[VOID]
INCREASED FIRE INSURANCE RATE
TWENTY-THIRD.--If by reason of the conduct upon the demised premises of a business not herein permitted, or if by reason of the improper or careless conduct of any business upon or use of the demised premises, the fire insurance rate shall at any time be higher than it otherwise would be, then the Tenant will reimburse the Landlord, as additional rent hereunder, for that part of all fire insurance premiums hereafter paid out by the Landlord which shall have been charged because of the conduct of such business not so permitted, or because of the improper or careless conduct of any business upon or use of the demised premises, and will make such reimbursement upon the first day of the month following such outlay by the Landlord; but this covenant shall not apply to a premium for any period beyond the expiration date of this lease, first above specified. In any action or proceeding wherein the Landlord and Tenant are parties, a schedule or "make up" of rate for the building on the demised premises, purporting to have been issued by New York Fire Insurance Exchange, or other body making fire insurance rates for the demised premises, shall be prima facie evidence of the facts therein stated and of the several items and charges included in the fire insurance rate then applicable to the demised premises.
WATER RENT
SEWER
TWENTY-FOURTH.--If a separate water meter be installed for the demised premises, or any part thereof, the Tenant will keep the same in repair and pay the charges made by the municipality or water supply company for or in respect to the consumption of water, as and when bills therefor are rendered. If the demised premises, or any part thereof, be supplied with water through a meter which supplies other premises, the Tenant will pay to the Landlord, as and when bills are rendered therefor, the Tenant's proportionate part of all charges which the municipality or water supply company shall make for all water consumed through said meter, as indicated by said meter. Such proportionate part shall be fixed by apportioning the respective charge according to floor area against all of the rentable floor area in the building (exclusive of the basement) which shall have been occupied during the period of the respective charges, taking into account the period that each part of such area was occupied. Tenant agrees to pay as additional rent the Tenant's proportionate part, determined as aforesaid, of the sewer rent or charge imposed or assessed upon the building of which the premises are a part.
ELECTRIC CURRENT
TWENTY-FIFTH.--That the Tenant will purchase from the Landlord, if the Landlord shall so desire, all electric current that the Tenant requires at the demised premises, and will pay the Landlord for the same, as the amount of consumption shall be indicated by the meter furnished therefor. The price for said current shall be the same as that charged for consumption similar to that of the Tenant by the company supplying electricity in the same community. Payments shall be due as and when bills shall be rendered. The Tenant shall comply with like rules, regulations and contract provisions as those prescribed by said company for a consumption similar to that of the Tenant.
SPRINKLER SYSTEM
TWENTY-SIXTH.--If there now is or shall be installed in said building a "sprinkler system" the Tenant agrees to keep the appliances thereto in the demised premises in repair and good working condition, and if the New York Board of Fire Underwriters or the New York Fire Insurance Exchange or any bureau, department or official of the State or local government requires or recommends that any changes, modifications, alterations or additional sprinkler heads or other equipment be made or supplied by reason of the Tenant's business, or the location of partitions, trade fixtures, or other contents of the demised premises, or if such changes, modifications, alterations, additional sprinkler heads or other equipment in the demised premises are necessary to prevent the imposition of a penalty or charge against the full allowance for a sprinkler system in the fire insurance rate as fixed by said Exchange, or by any Fire Insurance Company, the Tenant will at the Tenant's own expense, promptly make and supply such changes, modifications, alterations, additional sprinkler heads or other equipment. As additional rent hereunder the Tenant will pay to the Landlord, annually in advance, throughout the term a prorata portion toward the contract price for sprinkler supervisory service.
SECURITY
TWENTY-SEVENTH.--The sum of 4.21%. see paragraph #1 of Addendum Section V Dollars is deposited by the Tenant herein with the Landlord herein as security for the faithful performance of all the covenants and conditions of the lease by the said Tenant. If the Tenant faithfully performs all the covenants and conditions on his part to be performed, then the sum deposited shall be returned to said Tenant.
NUISANCE
TWENTY-EIGHTH.--This lease is granted and accepted on the especially understood and agreed condition that the Tenant will conduct his business in such a manner, both as regards noise and kindred nuisances, as will in no wise interfere with, annoy, or disturb any other tenants, in the conduct of their several businesses, or the landlord in the management of the building; under penalty of forfeiture of this lease and consequential damages.
BROKERS COMMISSIONS
TWENTY-NINTH.--The Landlord hereby recognizes no broker as the broker who negotiated and consummated this lease with the Tenant herein, and agrees that if, as, and when the Tenant exercises the option, if any, contained herein to renew this lease, or fails to exercise the option, if any, contained therein to cancel this lease, the Landlord will pay to said broker a further commission in accordance with the rules and commission rates of the Real Estate Board in the community. A sale, transfer, or other disposition of the Landlord's interest in said lease shall not operate to defeat the Landlord's obligation to pay the said commission to the said broker. The Tenant herein hereby represents to the Landlord that the said broker is the sole and only broker who negotiated and consummated this lease with the Tenant.
WINDOW CLEANING
[VOID]
VALIDITY
THIRTY-FIRST.--The invalidity or unenforceability of any provision of this lease shall in no way affect the validity or enforceability of any other provision hereof.
EXECUTION & DELIVERY OF LEASE
THIRTY-SECOND.--In order to avoid delay, this lease has been prepared and submitted to the Tenant for signature with the understanding that it shall not bind the Landlord unless and until it is executed and delivered by the Landlord.
EXTERIOR OF PREMISES
[VOID]
PLATE GLASS
THIRTY-FOURTH.--The Landlord shall replace at the expense of the Tenant any and all broken glass in the skylights, doors and walls in and about the demised premises. The Landlord may insure and keep insured all plate glass in the skylights, doors and walls in the demised premises, for and in the name of the Landlord and bills for the premiums therefor shall be rendered by the Landlord to the Tenant at such times as the Landlord may elect, and shall be due from and payable by the Tenant when rendered, and the amount thereof shall be deemed to be, and shall be paid as, additional rent.
WAR EMERGENCY
THIRTY-FIFTH.--This lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on part of Tenant to be performed shall in nowise be affected, impaired or excused because Landlord is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reason of governmental preemption in connection with a National Emergency declared by the President of the United States or in connection with any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency.
THE LANDLORD COVENANTS
QUIET POSSESSION
FIRST.--That if and so long as the Tenant pays the rent and "additional rent" reserved hereby, and performs and observes the covenants and provisions hereof, the Tenant shall quietly enjoy the demised premises, subject, however, to the terms of this lease, and to the mortgages above mentioned, provided however, that this covenant shall be conditioned upon the retention of title to the premises by Landlord.
ELEVATOR HEAT
[VOID]
And it is mutually understood and agreed that the covenants and agreements contained in the within lease shall be binding upon the parties hereto and upon their respective successors, heirs, executors and administrators.
In Witness Whereof, the Landlord and Tenant have respectively signed and sealed these presents the day and year first above written,
/s/ Frank D'Alessandro --------------------------------------[L. S.] GYRODYNE COMPANY OF AMERICA, INC. Landlord |
IN PRESENCE OF:
/s/ Denise Brett Carlsen --------------------------------------[L. S.] CARCO GROUP, INC. Tenant |
State of New York County of ss.:
On before me, the undersigned, a Notary Public in and for said State, personally appeared
personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.
State of New York County of ss.:
On before me, the undersigned, a Notary Public in and for said State, personally appeared
the subscribing witness(es) to the foregoing instrument, with whom I am personally acquainted, who, being by me duly sworn, did depose and say that he/she/they reside(s) in (if the place of residence is in a city, include the street and street number, if any, hereof);
that he/she/they know(s)
to be the individual(s) described in and who executed the foregoing instrument; that said subscribing witness(es) was (were) present and saw said
execute the same; and that said witness(es) at the same time subscribed his/her/their name(s) as a witness(es) thereto.
BUILDING _______________________________________________________________________
Premises________________________________________________________________________
Landlord
to
Tenant
L E A S E
GUARANTY
In consideration of the letting of the premises within mentioned to the Tenant within named, and of the sum of One Dollar, to the undersigned in hand paid by the Landlord within named, the undersigned hereby guarantees to the Landlord and to the heirs, successors and/or assigns of the Landlord, the payment by the Tenant of the rent, within provided for, and the performance by the Tenant of all of the provisions of the within lease. Notice of all defaults is waived, and consent is hereby given to all extensions of time that any Landlord may grant.
Dated,
State of New York County of SUFFOLK ss.:
On before me, the undersigned, a Notary Public in and for
said State, personally appeared
personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.
Carco Group, Inc. Lease Amendment #6 Page 1 of 2
AMENDMENT #6 TO LEASE
BETWEEN
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
AND
CARCO GROUP, INC.
(Tenant)
1. It is mutually agreed and understood that effective September 1, 1998
Tenant shall lease from Landlord Suites 42 and 80 in Landlord's building
designated as Building #7 for a term that will hereafter run concurrently
with the underlying lease for the premises in Building #17. The demised
premises in Building #7 shall be deemed to be 5,733 square feet of space.
The gross rental rate shall be $9.00 per square foot with subsequent
annual increases of 3.5% on the initial base rent of $35,688.00 per annum.
The gross annualized rent for Suites 42 and 80 shall be $51,597.00 per
annum payable in monthly installments of $4,299.75 each. Said rent being
subject to adjustments and consistent with Addendum Section V, Paragraphs
4. (a), Real Estate Taxes ($1.19), (b) Heat/Fuel Oil Cost ($.85), (c)
Insurance ($.46), and (f) Cost of Living Adjustment as amended in
Paragraph 2. below, and Section V. Paragraph 5. Security ($.275).
2. In consideration for the extension of this lease under the terms and conditions set forth herein, Landlord herewith amends Addendum Section V Paragraph 4.(f) to read: Cost of Living Adjustment - Effective September 1, 1998 and on each succeeding anniversary date of this lease, there will be a "Cost of Living (C.O.L.)" rent adjustment based upon a flat 3.5% increase per annum calculated on an initial anniversary date base rent of $234,191.81 which shall be subject to escalation on September 1, 1998.
3. In consideration for the leasehold improvements to the record storage area
in Building #17 (Work Letter Exhibit A attached hereto) and the rental of
suites 42 and 80 in Building #7, Landlord and Tenant herewith extend the
term of this September 28, 1993 lease, as amended in Amendment #3
Paragraph 4. (January 27, 1997), so that the new termination date shall be
August 31, 2002. The holdover provision in Addendum Section VI Paragraph
1. is herewith amended to read September 1, 2002.
4. AIR CONDITIONING MAINTENANCE - There are two existing 10 ton roof air conditioning systems that serve the demised premises in Building #7. The Tenant shall have the option to utilize these systems provided the Landlord is notified by the Tenant, not later than April 1st of each year, that said systems will be used. The Landlord shall maintain service, repair, and replace parts as needed to keep these systems in good operating condition. For this service, there will be an annual charge of $l,000.00*2=$2,000.00 payable to the Landlord by April 1st of each year during the term period of this lease.
5. It is mutually agreed that notice of vacation is herewith deemed to have been accepted by Landlord as of September 1, 1998 as required of Tenant in Amendments #4 and #5 to the lease with regard to the month-to-month rental of Suites #10 and #39 in Building #1. The parties hereto acknowledge that the contents of the Building #1 suites are scheduled to be housed in the new premises in Building #7. In the event actual occupancy of the
Carco Group, Inc. Lease Amendment #6 Page 1 of 2
Carco Group, Inc. Lease Amendment #6 Page 2 of 2
Building #7 premises occurs after September 1, 1998, Tenant shall receive a rent credit in the amount of 1/30th of the monthly rent, $4,299.75, during September 1998, and 1/31st of the monthly rent during October for each day that tenancy is deferred. Rent payable for the two Building #1 suites shall terminate simultaneously with the occupancy of Building #7 and the commencement of rent charges applicable thereto.
6. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease and amendments which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
Sept 1 1998 /s/ [ILLEGIBLE]
---------------------------- ---------------------------------------------
(date) (Landlord)
Carco Group, Inc.
9-1-98 /s/ Michael J. Giordano, Sr. Vice President
---------------------------- ---------------------------------------------
(date) (Tenant)
|
Carco Group, Inc. Lease Amendment #6 Page 2 of 2
Work Letter Exhibit "A"
Gyrodyne Company of America, Inc.
7 Flowerfield Suite 28
St. James, New York 11780
Phone (516) 584-5400 Fax (516) 584-7075
--------------------------------------------------------------------------------
Proposal Submitted To Phone Date
Carco 8/20/98
--------------------------------------------------------------------------------
Street Job Name
Records Storage Area
--------------------------------------------------------------------------------
City, State, Zip Job Location
--------------------------------------------------------------------------------
Atten Job Phone
Denise
--------------------------------------------------------------------------------
|
We hereby submit specifications and estimates for:
Renovations to Records Storage area, approximately 2,800 sq.ft.
Install suspended drop ceiling at a height of appox. 10'0"
Ceiling tiles to be standard none directional
Gridwork to be fire rated
Install two (2) 4' x 4' Skylights in an unobstructed area (free of duct work,
etc.). Vault to skylight to be same material as suspended ceiling
Remove all existing HVAC registers and drop down new registers and dampers into new ceiling.
Install new energy efficient lights as per Aetna Electrical quote to Carco. Total cost of lighting with installation is not to exceed $5,100.00
--------------------------------------------------------------------------------
All material is guaranteed to be as Authorized
specified. All work to completed in Signature /s/ [ILLEGIBLE]
a workman like manner according to ----------------------------
standard practices. Any alteration
or deviation from above Note: This proposal may be
specifications involving extra withdrawn if not accepted within 30 days
costs will be executed only upon
written orders, and will become an
extra charge over and above the
estimate. All agreements are
contingent upon strikes, accidents
or delays beyond our control. Owner
to carry fire, tornando and other
necessary insurance. Our workers
are fully covered by Workmen's
Compensation Insurance.
================================================================================
Acceptance of Proposal - The above Authorized
prices, specifications and Signature /s/ Michael J. Giordano,
conditions are satisfactory and are Sr. Vice President
hereby accepted. You are authorized ----------------------------
to do the work as specified. Date of
Payment will be made as outlined. Acceptance
9/1/98
================================================================================
|
Carco Group, Inc. Lease Amendment #5 Page 2 of 1 |
Tenant Billing Change Form
1. Tenant Name Carco Group, Inc.
2. Tenant Number 7
3. Tenant Address 1 Flowerfield, Suite 39
St. James, NY 11780
Billing Address No change
4. Reason for Change Additional space for storage
5. Effective Date 6/1/98
6. Log # _____________________________
7. Duration Month to Month
8. Comments 1) Base rent $650.00/month
|
Carco Group, Inc. Lease Amendment #5 Page 2 of 1
Carco Group, Inc. Lease Amendment #5 Page 1 of 1
AMENDMENT #5 TO LEASE
BETWEEN
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
AND
CARCO GROUP, INC.
(Tenant)
1. Effective June 1, 1998 the Tenant will, on a month to month basis, lease from the Landlord an area deemed to be approximately 787 square feet of space, Building 1, Suite 39, for the sole purpose of storage, hereinafter the demised premises. The term of this month-to-month lease shall in no event exceed the underlying Lease, but run concurrently or until terminated by one (1) month's written notification as defined below. The base annualized rent for Suite 39 shall be $7,800.00 payable in monthly installments of $650.00 per month. No additional rent security assessment shall apply to this storage space.
2. Termination notice for the purpose of Paragraph 1. above shall require written notice by either party hereto to the other. In no event shall vacation be deemed to be effective other than the last day of any calendar month provided a month's notice was given. Otherwise, notice not meeting this criterion shall result in a vacation date effective the last day of the succeeding month notice was tendered. For example, notice tendered on November 5, 1998 would be effective December 31, 1998. Tenant would be responsible for rent through December 1998, and/or Landlord could not regain possession until December 31, 1998. Notice received on the first day of a calendar month shall be deemed to satisfy this provision regardless of the number of days in the month.
3. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
6/8/98 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
(date) (Landlord)
Carco Group, Inc.
6-8-98 /s/ Michael J. Giordano, Sr. V.P.
---------------------------- ----------------------------------------
(date) (Tenant)
Carco Group, Inc. Lease Amendment #5 Page 1 of 1
|
Carco Group, Inc. Lease Amendment #4 Page 2 of 1 |
Tenant Billing Change Form
1. Tenant Name Carco Group, Inc.
2. Tenant Number 7
3. Tenant Address 1 Flowerfield, Suite 10
St. James, NY 11780
Billing Address No change
4. Reason for Change Additional space for storage
5. Effective Date 6/1/98
6. Log # _____________________________
7. Duration Month to Month
8. Comments 1) Base rent $950.00/month
|
Carco Group, Inc. Lease Amendment #4 Page 2 of 1
Carco Group, Inc. Lease Amendment #4 Page 1 of 1
AMENDMENT #4 TO LEASE
BETWEEN
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
AND
CARCO GROUP, INC.
(Tenant)
1. Effective June 1, 1998 the Tenant will, on a month to month basis, lease from the Landlord an area deemed to be approximately 1,170 square feet of space, Building 1, Suite 10, for the sole purpose of storage, hereinafter the demised premises. The term of this month-to-month lease shall in no event exceed the underlying Lease, but run concurrently or until terminated by one (1) month's written notification as defined below. The base annualized rent for Suite 10 shall be $11,400.00 payable in monthly installments of $950.00 per month. No additional rent security assessment shall apply to this storage space.
2. Termination notice for the purpose of Paragraph 1. above shall require written notice by either party hereto to the other. In no event shall vacation be deemed to be effective other than the last day of any calendar month provided a month's notice was given. Otherwise, notice not meeting this criterion shall result in a vacation date effective the last day of the succeeding month notice was tendered. For example, notice tendered on November 5, 1998 would be effective December 31, 1998. Tenant would be responsible for rent through December 1998, and/or Landlord could not regain possession until December 31, 1998. Notice received on the first day of a calendar month shall be deemed to satisfy this provision regardless of the number of days in the month.
3. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
6-8-98 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
(date) (Landlord)
Carco Group, Inc.
6-8-98 /s/ Michael J. Giordano, Sr. V.P.
---------------------------- ----------------------------------------
(date) (Tenant)
Carco Group, Inc. Lease Amendment #4 Page 1 of 1
|
Carco Amendment #3 Page 1 of 2 |
AMENDMENT #3 TO LEASE
BETWEEN
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
AND
CARCO GROUP, ONC.
(Tenant)
1. It is mutually agreed and understood that commencing August 27, 1996, Tenant will lease the premises designated as 17 Flowerfield, Suite 15, deemed to be approximately 2,600 square feet. The term to run concurrently with the herein underlying Lease through August 31, 1997, or as amended.
The base annualized rent for Suite 15, exclusive of September 1, 1996 CPI
adjustment, shall be $24,752.00 payable in monthly installments of
$2,062.67 each. Said rent being subject to adjustments and consistent with
Section V, Paragraphs 4. (a), Real Estate Taxes (i.e.) $2,938.00 ($1.13 x
2,600 sq. ft.), (b) Heat/Fuel Oil Cost (i.e.) $.85 (2,600 sq. ft.), (c)
Insurance (i.e.) $1,196.00 ($.46 x 2,600 sq. ft.), and (f) Cost of Living
Adjustment.
2. The underlying Lease and Amendment #1 thereto, not withstanding to the contrary, the established provision for Security Guard Service to the premises demised as Suite 15 shall be calculated as follows:
SECURITY GUARDS - $653.00 ($.251 x 2,600 sq. ft.) of the base annual rent is allocated to security guard services for the demised premises. Landlord has determined that security services during the 1996 calendar year, January 1st through December 31st, shall be assessed at the rate of $20.92 per month per 1,000 square feet of rented space based on a budgeted cost of $41,282.00 apportioned over 164,413 sq. ft. rental base. This provision shall not be construed to limit Landlord's ability to continue to provide security guard services to Tenant. Landlord may, in its sole discretion, extend or curtail security guard services in any manner deemed necessary by Landlord. Landlord may adjust Tenant's annual rent to reflect such changes in security guard services.
3. It is further agreed that in accordance with Section V, Paragraph 1. Rent Security of the Lease, The Tenant shall pay the Landlord the sum of $2,160.00, as adjusted by the September 1, 1996, CPI, as the first month's rent and the additional sum of $2,160.00 Security Deposit. All other terms shall apply.
Carco Amendment #3 Page 2 of 2
4. In consideration for the leasehold improvements completed by Landlord and enumerated in the attached work letter, Exhibit A, and the opportunity to rent Suite 15, Landlord and Tenant herewith extend the basic term of the lease of September 28, 1993 TWO (2) additional years so that the lease shall terminate August 31, 1999.
5. Landlord shall provide, in good working condition, TWO (2), through the wall, and FOUR (4), through the window air conditioning unit(s) for use in the demised premises. Landlord shall maintain said unit(s) during tenancy at Tenant's sole expense. For the purposes of maintenance and liability, the air conditioning unit(s) shall be considered equipment as defined by and subject to Addendum Section II - Repairs, Access, Forced Entry, and Right of Recovery, Paragraph 2. MAINTENANCE OF EQUIPMENT AND FIXTURES.
6. The electric power for the demised premises will be provided via the Landlord's "house" meter(s) and the Tenant shall be billed, by the Landlord, on the basis of the kilowatt consumption and demand recorded by the meter(s) at the prevailing LILCO rate in effect at the time of the meter reading by the Landlord.
7. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
1/27/97 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
(date) (Landlord)
Carco Group, Inc.
January 27, 1997 /s/ Michael J. Giordano, Sr. V.P.
---------------------------- ----------------------------------------
(date) (Tenant)
|
Work Letter - Carco
17 Flowerfield, Suite 15, St. James, NY 11780
EXHIBIT A
PART I
On or before September 1, 1996, the following items are to be completed at Landlord's sole expense:
1. Remove 2' x 2' unit heater.
2. Install additional baseboard radiation in main office.
3. Remove metal partitions and reinstall as per Carco layout.
4. Paint the ceiling black.
5. Construct two (2) offices in the lobby.
6. Install one (1) through the wall air conditioner in the lobby.
7. Provide and install four (4) window air conditioning units.
8. Seal double door archway separating lobby from main office.
9. Install window vision panels as per Carco sketch.
10. Paint bathroom partitions.
11. Repaint walls.
12. Provide and install outlets in new offices as per Carco sketch.
All items to be completed prior to occupancy.
Work Letter - Carco
17 Flowerfield, Suite 15, St. James, NY 11780
EXHIBIT A
PART II
For the flat sum of $15,000.00 and other consideration, Landlord shall in Suite 6 provide the following items:
1. Provide and install a drop ceiling at or about 10 foot high based on a 2'
x 4' ceiling grid.
2. Extend the support brackets for the computer island poles so that the
support brackets are not visible under the drop ceiling.
3. Install two (2) skylights with flared light shaft sides.
4. Install two (2) exterior windows.
5. Sheetrock internal face of exterior wall.
6. Remove unit heater.
7. Insulate all air conditioning feed ducts.
8. Replace diffusers with ceiling grid appropriate square units.
9. Create air shaft for exhaust fan.
All work to be completed after normal working hours with minimum disruption to Carco's operations. Work to be completed in as expeditious a manner as practical.
Work Letter - Carco
17 Flowerfield, Suite 15, St. James, NY 11780
EXHIBIT A
PART III
Landlord agrees at its sole expense to install four (4) skylights with flared light shaft sides in the Suite designated as Suite 3 in as expeditious a manner as possible minimizing interference with Carco' s operations.
Carco Group, Inc. Amendment #2 Page 1 of 1
AMENDMENT #2 TO LEASE
Between
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
And
CARCO GROUP, INC.
(Tenant)
1. It is mutually agreed and understood that commencing March 24, 1994, Tenant will lease the premises designated as 1 Flowerfield, Suite B 1, (Basement of Building #1) consisting of four rooms deemed to be 1000 square feet of space on a Month-to-Month basis, the term not to exceed 6 months, running independently of Tenant's current Lease. The base rent for Suite B 1 shall be $450.00 per month with no additional Security Deposit required.
2. This agreement may be canceled on 15 days written notice by either party hereto. Tenant's rent obligation shall in no event be less than 2 weeks rent.
3. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
3/25/94 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
(date) (Landlord)
Carco Group, Inc.
3/25/94 /s/ Michael J. Giordano, Sr. V.P.
---------------------------- ----------------------------------------
(date) (Tenant)
Carco Group, Inc. Amendment #2 Page 1 of 1
|
Carco Group, Inc. Amendment #1 Page 1 of 2 |
AMENDMENT # 1 TO LEASE
Between
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
And
CARCO GROUP, INC.
(Tenant)
1. It is mutually agreed and understood that commencing APRIL 1, 1994, Tenant will lease the premises designated as 17 Flowerfield, Suite 21 deemed to be approximately 589 square feet. The term to run concurrently with the underlying Lease through AUGUST 31, 1997.
The base annualized rent for Suite 21 shall be $6,780.00 payable in monthly installments of $565.00 each. Said rent being subject to adjustments and consistent with Section V, Paragraphs 4.(a), Real Estate Taxes (i.e.) $624.00 ($1.06 x 589 sq.ft.), (b) Heat/Fuel Oil Cost (i.e.) $.85 (589 sq.ft), (c) Insurance (i.e.) $271.00 ($.46 x 589 sq.ft.), and applicable electrical allocation for Air Conditioning use.
2. The underlying Lease not withstanding to the contrary, the established provision for Security Guard Service to the premises demised as Suite 21 shall be calculated as follows:
SECURITY GUARDS - $108.00 ($.184 x 589 sq.ft.) of the base annual rent is allocated to security guard services for the demised premises. Landlord has determined that security services during the 1994 calendar year, January 1st through December 31st, shall be assessed at the rate of $15.32 per month per 1,000 square feet of rented space based on a budgeted cost of $30,217.00 apportioned over 164,413 sq.ft. rental base. This provision shall not be construed to limit Landlord's ability to continue to provide security guard services to Tenant. Landlord may, in its sole discretion, extend or curtail security guard services in any manner deemed necessary by Landlord. Landlord may adjust Tenant's annual rent to reflect such changes in security guard services.
3. It is further agreed that in accordance with Section V paragraph 1. Rent Security of the Lease, at the time this Amendment is signed by both parties, Tenant shall pay to the landlord the sum of $565.00 as the first month's rent and the additional sum of $1,130.00 Security Deposit. All other terms shall apply.
Carco Group, Inc. Amendment #1 Page 1 of 2
Carco Group, Inc. Amendment #1 Page 2 of 2
4. All the covenants, addenda, terms and conditions set forth in the original Landlord-Tenant Lease which are not voided, altered, or affected by this Lease Amendment shall be considered an integral part of this Amendment thereby continuing in full force and effect for the duration of the Lease Agreement.
Gyrodyne Company of America, Inc.
3/25/94 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
(date) (Landlord)
Carco Group, Inc.
March 25, 1994 /s/ Michael J. Giordano, Vice Pres.
---------------------------- ----------------------------------------
(date) (Tenant)
Carco Group, Inc. Amendment #1 Page 2 of 2
|
SIDE LETTER OF AGREEMENT
between
Gyrodyne Company of America, Inc.
and
Carco Group, Inc.
Request of heat Monday through Friday after 5:00pm and on Saturday and Sunday Building #17
1. Gyrodyne requires at least two days notice in order to provide extra hours of heating.
2. Rate per hour, Monday through Friday, providing that the period starts at 5:00pm, is $35.00 per hour plus $20.00 labor per day. In the event the extra hours of heating are required on a regular basis, the labor charge shall be waived.
3. Rates for Saturday and Sunday include a maximum of two hours warm-up time $70.00, one hour labor, $20.00 plus $35.00 times the number of work day hours needed. Thus, a mid-winter eight-hour Saturday work day could cost a maximum of $370.00.
4. In the event more than one tenant requests heat during the same time period, there shall be no additional labor charges for scheduling however, the hourly rate will be increased an additional $17.50 per hour. Each tenant will be billed a pro rata portion of the total bill which was attributable to the joint usage. The bill will be apportioned on the basis of square footage rented.
5. The above rates apply providing that the delivered price of No. 2 fuel oil plus use tax, sales tax, and any applicable vendor/user levies do not exceed $.85 per gallon average during any single heating season (October 15th to April 15th) during the 1992-1997 period. In the event of an increase, $.0l per gallon shall equal $.25 per hour.
Gyrodyne Company of America, Inc.
1/18/94 /s/ [ILLEGIBLE]
---------------------------- ----------------------------------------
Date (Landlord)
Carco Group, Inc.
1/18/94 /s/ Michael J. Giordano, Vice President
---------------------------- ----------------------------------------
Date (Tenant)
|
Page 1 of 21 Carco Group, Inc. LEASE |
ADDENDUM TO LEASE
Between
GYRODYNE COMPANY OF AMERICA, INC
(Landlord)
And
CARCO GROUP, INC.
(Tenant)
SECTION I - Utilities and Services
1. CUSTODIAL SERVICES - Landlord shall not provide any custodial services to the demised premises. Tenant will provide all custodial services at it sole cost and expense. Tenant shall not permit window cleaning or other exterior maintenance and/or janitorial service in and for the premises to be performed, except by such person(s) as shall be approved by Landlord and except during reasonable hours designated for such purposes by Landlord.
2. PARKING - The Landlord will assign and the Tenant will have the use of 175 parking spaces in the parking lot assigned to the demised premises. (Parking Lot # 17). Maintenance of parking areas and roads leading to the demised premises shall be the sole responsibility of the Landlord.
3. ELECTRICITY - It is mutually agreed and understood that the demised premises is serviced by both LILCO metered electric services, and via Landlord's "house" meters. It is agreed that Tenant shall immediately register all LILCO meters, upon initial occupancy, in Tenant's name and henceforth pay any and all charges related thereto directly to LILCO. Additionally, the Tenant shall be billed, by the Landlord, on the basis of the kilowatt consumption and demand recorded by the "house" meters at the prevailing LILCO rate in effect at the time of the meter reading by the Landlord.
Where Tenant shares consumption with another Tenant, Landlord will calculate Tenant's bill predicated on a pre-determined formula. Landlord agrees to provide Tenant with a monthly electric usage breakdown.
4. LIGHT FIXTURES - The Landlord warrants that the overhead lighting fixtures including cool white fluorescent tubes shall be in good working condition at the time the Tenant commences initial occupancy of the demised premises and for one month thereafter. Subsequently, the Tenant shall be responsible, at its expense, for the replacement of tubes and/or ballasts. Tenant shall, at the end of tenancy, return to the Landlord all lighting fixtures with lamps and ballasts in good operating condition. Good operating condition is defined as ballasts not visibly leaking, no unusually loud noise emanating from the lighting fixture and lamps lighting without flickering. In the event Tenant vacates the premises and repairs/replacements are required, Landlord shall bill Tenant for any and all work performed on the lighting fixtures to restore them to their original condition less normal wear and tear.
Page 1 of 21 Carco Group, Inc. LEASE
Page 2 of 21 Carco Group, Inc. LEASE
5. PLUMBING FIXTURES - Landlord warrants that exposed piping and flushometers will be in good working condition at the time of occupancy under this Lease and for one month thereafter. Subsequently, Tenant will only be responsible, at its sole expense, for the maintenance of exposed piping and flushometers due to willful damage by Tenant, its agents, employees, guests or servants. Tenant shall, at the end of tenancy, return to Landlord all exposed pining and flushometers in good operating condition normal wear and tear excepted. In the event Tenant vacates the premises and repairs and replacements are required, Landlord shall bill Tenant for any and all work performed on the exposed piping and flushometers due to willful damage by Tenant, its agents, employees, guests or servants to restore them to their original condition less normal wear and tear.
6.. AIR CONDITIONING MAINTENANCE - It is agreed that the demised premises is served by four (4) split unit air conditioners designated as TRANE 1, 2, and 3, and LUXAIR 1 and as noted below. Landlord shall provide air conditioning and air conditioning maintenance services at a cost to Tenant of twelve thousand dollars ($12,000.00) per year payable each month.
(a) that Tenants work hours shall be deemed to be 8:00 A.M. to 12:00 midnight Monday through Friday and 8:00 A.M. to 5:00 P.M. on Saturday and Sunday;
(b) for the purposes of this provision, the air conditioning season shall be from May 15th to September 15th annually.
(c) that Landlord shall be permitted, upon one week's notice to perform required regularly scheduled service on weekends which may interfere with Tenant's operations. Landlord's interruption of Tenant's operations will be held to an absolute minimum and scheduled early in the morning whenever practical;
(d) that it shall be fully recognized and understood that a portion of the demised premises designated as Suite 3A, because it lacks a drop ceiling is more sensitive to heat build-up, and therefore the differential between outside ambient conditions and internal temperatures may be less than the adjoining areas.
(e) that Landlord warrants and represents that it shall make every reasonable effort to provide Tenant with air conditioning maintenance services. In consideration thereof, Tenant shall have no recourse against Landlord, other than for gross negligence, for periods when service is not available other than for the specific dollar amount stipulated below for extra hours of service.
In order for Landlord to be compensated for maintenance exposure and other liability incurred due to air conditioning usage in excess of the work hours stipulated above, Landlord reserves the right to reopen negotiations on the issue of air conditioning maintenance charges if hours of operation exceed those outlined herein. If air conditioning usage decreases to levels below those hours outlined herein, the air conditioning maintenance charge will be reduced on a prorata basis but in no event will the air conditioning maintenance charge be less than $9,500.00 per year. The air conditioning
Page 2 of 21 Carco Group, Inc. LEASE
Page 3 of 21 Carco Group, Inc. LEASE
maintenance charge will be adjusted annually to account for C.O.L. adjustments.
It is further agreed, that these rates shall increase 6 1/2% annually, commencing on the first anniversary of this Lease. Excess usage charges shall be deemed additional rent and subject to all provisions pertaining thereto.
Further, it is agreed that Landlord has supplied five (5) "window type
(under 15,000 BTU)" air conditioning units for offices, and ONE (1)
"through the (wall over 15,000 BTU)" air conditioning unit for the
computer room, at its expense except as may otherwise be set forth herein.
Landlord herewith agrees to use its best efforts to maintain said units
during the lease term at no cost to the Tenant. Tenant warrants to
restrict air conditioner use to hours of occupancy.
Landlord shall inventory a compressor and spare parts relative to exercising best efforts to reduce time required to repair and/or replace air conditioner unit parts.
Landlord further warrants that it will provide air conditioning to the demised premises at levels consistent with those established by applicable governmental regulations.
At the time of execution of this Lease, the amounts of arrears owed to the
Landlord from September 1, 1992 shall be computed and paid to the
Landlord, in addition to all other obligations, over a period of twelve
(12) months in equal monthly installments.
7. HEAT - Landlord, at its expense, shall provide heat during "normal working hours": 6:00AM to 5:00PM Mondays through Fridays, except holidays, in accordance with Government guidelines. Heat provided during hours other than "normal working hours" will be provided in accordance with a separate letter agreement incorporated by reference and made part of this Lease.
Domestic hot water is available during the regular heating season only, October 15th through April 15th of each year. During the non-heating season hot water will be provided via an electric hot water heater. Landlord will bill Tenant for electric use on a monthly basis.
6. GARBAGE - Tenant will handle and dispose of all rubbish, debris, garbage, and waste from Tenant's operation, at its expense, in accordance with regulations established by Landlord and those of all governmental agencies having jurisdiction, and not permit the accumulation (unless in concealed metal containers), or burning, of any rubbish or garbage in, on, or about any part of Flowerfield, and not permit any garbage or rubbish to be collected or disposed of from the premises, except by Landlord's designated cartage company. All Tenant's garbage must be put in plastic bags, securely tied at the top, and placed in a dumpster located adjacent to Tenant's premises. Tenant shall maintain the area immediately surrounding the dumpster in a clean and orderly fashion. Cardboard must be separated from garbage and placed in the special containers designated for cardboard only. All cardboard boxes and shipping packaging must be "flattened" before being inserted into the designated receptacles. Landlord reserves the right to require Tenant to either increase the frequency of dumpster pickup or acquire
Page 3 of 21 Carco Group, Inc. LEASE
Page 4 of 21 Carco Group, Inc. LEASE
additional dumpster(s) for Tenant's use if Landlord deems Tenant is regularly generating waste materials in excess of the then current dumpster capacity.
Additionally, Tenant shall not permit debris, waste materials, or garbage to collect in front of, around, alongside, or in back of the demised premises. Tenant shall at all times keep the apron immediately in front of the demised premises clean and orderly. In the event the Landlord deems the "housekeeping" inadequate, then the Landlord shall have the right to clean up the affected area and charge the Tenant for such cleanup.
Tenant, at its own cost and expense shall keep the demised premises free from vermin, rodents, insects other than termites or anything of like, objectionable nature and snail employ only such vermin exterminating contractors as are approved by Landlord. In the event of Tenant's failure to keep the demised premises free from vermin, Landlord has the right, at Tenant's expense, and after prior notice to Tenant, to take all necessary or proper measures to eradicate any and all vermin from the demised premises.
Industrial waste, such as metal chips, oils, solvents, chemicals, sheet metal, wood crates, pallets, etc. may not be placed in the dumpster. The Tenant, at its expense, must dispose of all industrial waste in conformance with New York State Environmental Conservation Law. Landlord shall have the right to demand and receive copies of bills of conveyance to a government certified and/or government registered carting company for environmentally sensitive and/or hazardous waste materials which were at any time at Flowerfield as a result of Tenant's operations.
It is agreed that Tenant accumulates wooden pallets which must be removed and properly disposed of. Landlord will provide this service on a weekly basis for a per pallet fee of $7.00 per pallet removed.
9. SEPTIC SYSTEM - It is mutually agreed and understood that a typical septic system for one of Landlord's buildings includes a soil line from the bathrooms to the septic tank, and an interconnect pipe(s) from the septic tank to either a distribution box or directly to one or more cesspools. It is agreed that the demised premises includes two sets of bathrooms which are for the exclusive use of the Tenant and that any and all expenses relating to repairs for stopped-up toilets, backed-up sinks, and/or clogged drains and soil lines shall be borne solely by the Tenant unless such repairs are attributable to the malfunctioning of the septic system due to structural constraints such as an age related reduction in usable capacity. Structural repairs to the soil line, interconnect pipe(s), distribution box, septic tank, or cesspool shall be borne solely by Landlord provided that such repairs were not caused by the negligence or misuse of the facilities by the Tenant. In that event, Tenant shall solely bear all costs.
It is understood that all materials removed from commercial building cesspools by carters are tested for toxic chemicals by Suffolk County Department of Health. Tenant shall be required, on demand, to provide Landlord, within a reasonable period of time, a list of chemicals, if any, by quantity and composition used in Tenant's operation which are listed under Section 313 of the Superfund Amendments and Reauthorization Act (SARA).
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10. FIRE PROTECTION EQUIPMENT - The Tenant shall be required to supply its own fire extinguishers of the appropriate size and classification consistent with the Smithtown Fire Code, ISO, and the Fire Insurance Underwriter Inspection regulations. Furthermore, the Tenant agrees to have said extinguishers periodically inspected, recharged and/or serviced as required, and tagged showing compliance to the aforesaid codes and regulations. Tenant is responsible for damage to adjoining premises caused by the operation of Tenants fire suppression system, installed subsequent to the onset of tenancy and exclusive of Landlord installed fire suppression system. For purposes of this paragraph damages are limited to the cost of restoring the adjoining premises to its original condition.
In the event Tenant is requested to provide any of the local Fire Departments which have jurisdiction with a list of hazardous chemicals, Tenant shall provide same in an expeditious manner with a copy being given to the Landlord.
The Landlord reserve the right to inspect the demised premises to assure Tenant compliance with this requirement and to insist upon strict adherence to the necessary procedures.
11. HAZARDOUS MATERIALS - Tenant shall not bring, keep or use in or upon the demised premises of the building of which they form a part, any solvent having a flash point below 110F, nor shall any liquid which emits volatile vapors below the temperature of 100F be brought, kept or used in or upon the demised premises of the building except: If the process using such liquids shall be conducted in a room of fire resistant construction, as defined by the Fire Insurance Rating Organization. (FIRO) If more than one but not more than two gallons of such liquids are kept on the premises, they must be stored in safety cans and kept in a cabinet constructed by Tenant in a manner approved by the FIRO. Reasonable amounts in excess of ten gallons may be kept if they are stored in a vault constructed by Tenant in a manner approved by FIRO. Any use or storage of such liquids shall at all times be in accordance with the requirements of the FIRO, OSHA, NFPA, and the Fire Department Board of Fire Underwriters.
12. DUST COLLECTION EQUIPMENT - In the event Tenant's operation generates airborne particles, such as sawdust, the Tenant shall be required to install and maintain a dust collection system acceptable to the Landlord in order to contain the dispersion of the generated dust. Tenant shall also be responsible for any cleanup maintenance required of the area immediately adjacent to the demised premises, which shall include hallways, foyers, and outside areas. Tenant shall be responsible, on a monthly basis, to clean and maintain any external doors which have been subjected to the accumulation of dust.
Airborne particles such as vapor, generated by spraying glue, etc., will require the installation of proper ventilation, exhaust equipment, and explosion proof fixtures as required by Building Code Regulations. ALL EXHAUST SYSTEMS TO THE ATMOSPHERE REQUIRE THE APPROPRIATE FILTERS FOR THE SPECIFIC TYPE OF MATERIALS/VAPOR BEING VENTED.
13. ALARM SYSTEM - In the event the demised premises has an existing Landlord owned alarm system, upon its election to utilize said alarm system, it shall
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be the Tenant's sole financial responsibility to maintain the systems, to discharge all the financial obligations related thereto and return the system to Landlord in good operating condition.
In the event Tenant desires to utilize an existing alarm system or install a leased or rented third party owned alarm system, then it is mutually agreed and understood that Tenant agrees to a minimum of $100.00 exit charge at the end of tenancy. Landlord has established this minimum charge predicated on past experience of damage done to doors, windows, walls, painted surfaces, and the required availability of Landlord's personnel when the third party vendor has to remove said system.
In the event Tenant desires to install a Tenant owned alarm system, applicable exit charges, it any, would be assessed predicated on any damage found at the end of tenancy.
SECTION II - Repairs, Access, Forced Entry, and Right of Recovery
1. STRUCTURAL REPAIRS - Notwithstanding terms and conditions contained in the second Covenant of the pre-printed portion of the Lease, the Landlord will be responsible for all structural repairs to the demised area, and for the maintenance of the exterior of the building in which the demised premises are located which repairs were not necessitated or otherwise caused by any act of the Tenant, its servants agents and/or employees, invitees, subtenants and/or licensees.
2. MAINTENANCE OF EQUIPMENT AND FIXTURES - It is mutually agreed and understood that with respect to all equipment and fixtures as exists in the demised premises, the Tenant is responsible for maintaining same in safe working condition. Said equipment and fixtures are deemed to include light fixtures fire alarms, personnel and overhead doors, except door repairs due to settling effects of the demised premises and fire extinguishers. Tenant agrees to hold harmless, defend, and indemnify Landlord from any and all claims arising from direct, indirect or consequential injury or damage to any party, either personal or property, which injury or damage is the result of Tenant's failure to adequately maintain said equipment and/or fixtures.
3. ACCESS FOR INGRESS AND EGRESS - The sidewalks, stoops, areas, entry, vestibules, passages, corridors, halls, elevators and stairways of the demised premises and common areas shall not be encumbered or obstructed by Tenant, its agents, clerks, servants or customers or be used by them for any other purpose than for ingress and egress to and from the demised premises. The demised premises may not be cluttered by boxes, garbage or other material. If Landlord directs that any of the foregoing items be removed from the demised premises, Tenant shall promptly comply with such direction provided such direction is reasonable.
4. REPAIRS AND EMERGENCY ACCESS - Tenant shall permit Landlord and/or its designee to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires, in, to and through the premises, as and to the extent that Landlord may now or hereinafter deem to be necessary or appropriate for the proper operation and maintenance of the building in which the premises are located or any other portion of Flowerfield. All such work
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shall be done, so far as practicable, in such manner as to avoid interference with Tenant's use of the premises. Notwithstanding anything else contained herein to the contrary, in the event of an emergency, Landlord may enter the premises of the Tenant immediately and Tenant shall cooperate with the Landlord in providing said immediate access.
5. PRIVACY AND FORCED ENTRY - It is agreed and understood that if Tenant changes or adds additional locks to any entrance or egress from the demised premises, then Tenant shall provide Landlord with a key or a combination to be utilized for access purposes. All locks changed must be returned to the Landlord for re-installation, at Tenant's expense, at the end of tenancy. In the event a situation arises which in the opinion of the Landlord or Public Safety Officials (Police, Fire Dept., Code Enforcement, etc.) necessitates entrance to the premises during a period when Tenant is not available to provide access, and Tenant has not provided said key or combination, then any expenses resulting from damage to the premises required by a forced entry shall be borne solely by the Tenant. The addition of locks and/or security devices shall be deemed to be an alteration as defined under Section III of this Addendum, and therefore, subject to all the provisions governing alterations and reversion.
6. MAINTENANCE BY LANDLORD DURING TENANCY AND TENANT'S RIGHT OF RECOVERY - Paragraph thirteen of the pre-printed portion of the Lease is hereby amended to add the following: "Tenant shall have no right of recovery against Landlord in the event of loss or damage to the property and/or business of the Tenant resulting from fire, or other casualty or cessation and/or interruption of Tenant's business due to repairs and/or compliance with mandated items required on the part of the Landlord unless loss or damage is caused by Landlord's negligence. Tenant hereby agrees to provide access to premises for Landlord to comply with its obligations as aforesaid, the time and duration of said access to be at the sole discretion of the Landlord who will proceed in as reasonable a manner as possible under the circumstances. It is hereby agreed that the Landlord's determination shall be conclusive and binding on all parties hereto."
7. ACCESS AT END OF TENANCY - It is mutual1y agreed and understood that in
order for Landlord to relet the premises to a new tenant on the first day
of the month immediately following the vacation date stipulation in
Section VI paragraph #1 of this addendum, Landlord shall require and be
granted by Tenant, at times other than Tenant's normal period of operation
in effect at the time on or about said vacation date, unhindered access to
the demised premises during the last two weeks of tenancy for the express
purpose of making repairs, which repairs shall include, but not be
restricted to: dry wall patching, spackling, painting, floor cleaning,
equipment servicing, pipe repairs, and HVAC maintenance. Landlord warrants
that during the last two weeks of Tenancy it will deliver the demised
premises clean and usable on each day during Tenant's normal period of
operation.
SECTION III - Alterations
1. CONSENT BY LANDLORD AND PERMITS - It is hereby covenanted and agreed that the Tenant shall not make alterations to any building(s) and/or property Tenant has rented or has been given access to by the Landlord without the express
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written consent of the Landlord. In the event Tenant is authorized to make alterations, then Tenant shall be responsible for all permits and inspections as may be required by state and local building codes. If as a cause of Tenant's alterations and the governing ordinances shall require, Tenant shall secure as necessary, either a current Certificate of Occupancy or a Certificate of Conformance for the demised premises.
(a) CONTRACTORS - Prior to commencement of any work by or for Tenant, Tenant shall furnish Landlord certificates evidencing the existence of the following insurance:
(1) Worker's Compensation Insurance covering all persons employed for such work and with respect to whom death or bodily injury claims could be asserted against Landlord, Tenant or the demised premises.
(2) General liability insurance naming Landlord its designees, and Tenant as insureds, with limits of not less than $1,000,000 in the event of bodily injury to one person and not less than $2,000,000 in the event of bodily injury to any number of persons in any one occurrence, and with limits of not less than $100,000 for property damage. Tenant, at its sole cost and expense, shall cause all such insurance to be maintained at all times when the work to be performed for or by Tenant is in progress. All such insurance shall be in a company authorized to do business in New York, and all policies, or certificates therefore, issued by the insurer and bearing notations evidencing the payment of premiums, shall be delivered to Landlord.
Tenant agrees to compensate Landlord for the purpose of reviewing plans and Tenant shall pay for all reasonable costs incurred resulting from such review and inspections as Landlord may require.
(3) Licenses: Any and all licenses to perform work as required by any and all municipalities, including, but not limited to those required by the Town of Smithtown, County of Suffolk and State of New York.
(b) ELECTRICAL SYSTEM - The Tenant shall not, under any circumstances, make changes to the existing electrical service servicing the premises, the internal wiring leading from the distribution box/boxes to overhead lights, wall outlets, buss ducts, etc., without the prior written authorization of the Landlord. It is agreed that all electrical work shall be done by a licensed electrician and said work, at Landlord's sole discretion, may require Tenant to obtain New York Board of Fire Underwriter approval.
(c) CARPETING - If the Tenant elects to install carpeting to cover any floor section(s) of the premises, a water soluble glue must be used to prevent damage to the floor in the event said carpeting is subsequently removed. Any such damage shall be considered the fault of the Tenant who will be responsible for any and all incurred expenses to restore the floor to its original condition. In the event Tenant occupies the demised premises with a carpet already "in-place" which the Tenant finds acceptable, then, if required at the end of tenancy, disposal of the in-place carpet shall be deemed to be Tenant's responsibility as set forth above for new installations.
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(d) EXTERIOR ARCHITECTURE - Tenant shall not change (whether by
alteration, replacement, rebuilding or otherwise) the exterior color
and/or architectural treatment of the premises or of the building in
which that same are located, or any part thereof.
(e) SIGNS - Notwithstanding terms and conditions contained in the third
Covenant of the pre-printed portion of the Lease, Tenant shall be
permitted to affix to the building an identification sign no larger
than eight square feet of sign area provided the design, color, and
composition are approved by the Landlord in writing. Tenant must
submit a sketch or photo of the proposed sign for approval.
Placement of the sign will be at the sole discretion of the
Landlord. No other signs are permitted in, about, or on the
Flowerfield Park grounds unless specifically approved in writing by
the Landlord. Landlord reserves the right to remove any
non-conforming sign(s) and Tenant agrees to indemnify Landlord
against any claims for any damages arising either directly,
indirectly, or consequentially from any acts of Landlord in regards
to the removal of said non-conforming sign(s). Tenant waives any and
all claims against Landlord for the removal of any non-conforming
signs.
Tenant shall be entitled to a name-location plate on the main
directory sign at no cost to the Tenant. The plate shall be
consistent with other plates on the sign in both overall size,
color, and layout. In the event Landlord does not provide said
plate. Tenant agrees that its only remedy shall be solely the cash
value of the plate itself. Landlord's acceptance of any name for
listing on the Flowerfield Park Directory will not be deemed, nor
will it substitute for, Landlord's consent, as required by this
Lease, if such covenants be applicable, to any sublease, assignment,
or other occupancy of the demised premises.
(f) TRADE FIXTURES - It is mutually agreed and understood that Tenant
has caused to be installed; assumed in place either by purchase,
lease, rental, default, or other manner or otherwise has the
exclusive use of the herein defined trade fixtures listed below but
not restricted to the following:
SHELVING
-----------------------------------------
It is agreed that it shall be Tenant's sole financial responsibility
to remove Tenant's trade fixtures as have been defined herein.
Tenant shall be solely responsible for reverting the demised
premises to its original condition after vacation at the end of
tenancy unless Landlord has directed, in writing, that certain
improvements associated with the installation of the trade fixtures
are considered attached to the freehold and, therefore, property of
the Landlord.
(g) REMOVAL AND REVERSION - It is further agreed that Tenant shall not
remove or cause to be removed any fixtures, wiring, electrical
panels, plumbing, fans,
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equipment, water pipes, or any other installation that was "in place" in or about the demised premises at the onset of tenancy without the express written consent of the Landlord. Any and all improvements, changes, and/or additions to the demised premises shall be removed at Tenant's expense or left in place at the sole discretion of the Landlord. In no event may Tenant remove any electrical equipment that was in place in the demised premises prior to Tenant's tenancy.
It is further agreed that if the herein defined lease shall be a successor to or in lieu of another lease between Landlord and Tenant for these demised premises and said prior lease would run continuously or concurrently if not terminated, it is understood that Landlord does not waive nor is Landlord diminished with respect to any claims for removal or reversion which may have been perfected by any prior leases as stipulated herein, by virtue of this lease.
SECTION IV - Use Restrictions
1. ZONING - It is mutually agreed and understood that in the event the Tenant's use of the premises is held to be in violation of the Town or Local law or ordinances, the lease shall after Tenant has had a reasonable amount of time to cure the defect be considered and will be terminated by mutual consent and there shall be no further obligation on the part of either Landlord or Tenant.
VARIANCE OR SPECIAL EXCEPTION - TENANT - In the event a variance or special exception is required by the zoning ordinances for the specific use provision or occupancy required by Tenant, any and all costs, such as filing and legal fees, related to the filing and/or securing of a variance or special exception shall be borne solely by the Tenant.
VARIANCE OR SPECIAL EXCEPTION - LANDLORD - Landlord warrants to make available existing, on a best efforts basis, survey maps, building permits, Certificates of Occupancy, and other documents required by Tenant in its filing. There shall be no warranty, either express or implied, that documents, if any, tendered by Landlord shall be complete, ample, or sufficient for the purposes required by the Tenant. Landlord, at its sole discretion, may elect not to permit tenancy if restrictive covenants are attached to the variance or special exception such that observance of the restrictive covenants would negatively impact Landlord or other tenants at Flowerfield.
2. SUBLET AND ASSIGNMENT - Tenant shall not assign this Lease without Landlord's written consent, which it shall not unreasonably withhold. Landlord shall not withhold such consent if the proposed time of assignee's financial standing and responsibility at the time of such proposed assignment is sufficient to give Landlord reasonable assurance of the payment of all rents and other amounts required under this Lease, and of compliance with all other terms, covenants, provisions, and conditions hereof upon such an assignment. Tenant shall thereafter be released from all liability arising or accruing hereunder except for latent defects not discovered by Landlord upon assignment, provided such assignee shall execute, acknowledge, and deliver to Landlord an assumption agreement, in form and substance satisfactory to it, whereby such assignee agrees to observe, perform and keep, all of the terms,
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provisions, covenants, and conditions required to be observed, performed and kept as Tenant hereunder.
3. NON-NUISANCE - The Tenant agrees to conduct its work operations within the demised premises in such manner as to be considered nuisance-free to other Tenants and the Landlord, and to perform good "housekeeping" practices in order to satisfactorily conform to the Town of Smithtown, County of Suffolk, and State of New York applicable laws and ordinances. As the demised premises will be subject to periodic, unannounced inspection by the Building, Environmental, and Fire Inspectors having the authority to cite any found violations which might have a detrimental effect on the Tenant, the Landlord, or other tenants' business operation or fire insurance premium rates, the Landlord reserves the right to conduct its own inspections and request the Tenant to take any required corrective action within a reasonable period of time. In the event the Tenant, upon receipt of a violation notice from Town, County, or State Officials; Fire Insurance Underwriter inspectors; or the Landlord, fails to correct the condition within a reasonable period of time, then the Tenant shall be considered to have violated the terms and conditions of this lease thus causing its termination as a contractual agreement between the Tenant and the Landlord.
4. PAINT SPRAYING - Tenant and Landlord mutually agree that Tenant will not perform any paint spraying in the demised premises unless the Tenant has paint spray booth that meets Federal, State and Local safety and fire requirements and the express written consent of the Landlord. Further it is agreed that Tenant shall handle all flammable materials in a manner consistent with Local and State fire regulations, and will utilize the appropriate safety cans designed for specific flammable materials and a properly vented safety storage cabinet for the storage of flammable materials.
5. ACTIVITY RESTRICTIONS - The Tenant further agrees that he will not engage in any of the following activities without the prior knowledge and written consent of the Landlord:
(a) No Fire Sale: Conduct or permit any fire, bankruptcy, auction, or "going out of business" sale (whether real or fictitious) in the premises, or utilize any unethical method of business operation.
(b) Not Use Building Apron: Use, or permit to be used, the sidewalk adjacent to, or any other space outside, the premises for display, sale or any other similar undertaking.
(c) Not Misuse Plumbing Facilities: Use the plumbing facilities for disposal of any materials destructive to the physical plumbing or facilities, whether through the utilization of so-called "disposal" or similar units or otherwise. The plumbing facilities shall include all interior drains and exterior cry wells, collection basins, sumps, and road drains. Not dispose of any materials that are environmentally unacceptable to the local, state or Federal governments. In the event the Tenant misuses any plumbing facility, the Landlord shall have the right to immediately have the affected facility properly cleaned and restored and charge the Tenant any and all associated costs.
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(d) No Liens: Subject any fixtures, furnishings or equipment in or on the premises and affixed to the realty, to any mortgages, liens, conditional sales agreements or encumbrances.
(e) Not damage the premises: Perform any act or carry on any practice which may damage, mar or deface the premises or any other part of Flowerfield. Damage shall also be construed as resin, epoxy materials, lacquer paints, glues, or any other material which may become affixed to Landlord's walls, floors, ceiling, and fixtures as a result of actions of Tenant and require special treatment for removal. Tenant shall be required, at its expense, to restore the demised premises to its original condition less normal wear and tear.
(f) Freight Handling Equipment: Use any fork-lift truck, tow, or any other machine for handling freight in the premises, unless the same equipment, if powered, be powered by electricity or propane.
(g) Not Exceed Floor Loads: Place a load on any floor in the interior delivery system, if any, or in the premises exceeding the floor load per square foot which such floor was designed to carry, or install, operate or maintain therein any heavy item of equipment, except in such manner as to achieve a proper distribution of the weight.
(h) Not Exceed Electrical Load: Install, operate, or maintain in the premises any electrical equipment which will overload the electrical system therein, or any part thereof, beyond its reasonable capacity for proper and safe operation as determined by Landlord in light of the overall system and requirements thereof in Flowerfield, or which does not bear Underwriter's approval.
(i) Not Tamper with LILCO or Landlord's "house" Electric Meters: Tenant is expressly prohibited from tampering with electric meters in any manner whatsoever which would alter the meter's measurement of electric use. Tenant will hold Landlord harmless from all civil claims, fines, and expenses and any criminal action resulting from tampering with electric meters.
SECTION V - Financial Obligations of Tenant - Escalators, Penalties, and Remedies
1. RENT SECURITY - At the time this lease is signed by both parties, the Tenant shall pay to the Landlord the sum of $16,902.19 as the first month's rent and the additional sum of $18,100.00 "security" guaranteeing Tenant conformance to the terms and conditions of this lease. It is mutually agreed and understood that Tenant was required to maintain $18,100.00 security on deposit with the Landlord conforming to the terms and conditions of a lease ending FEBRUARY 29, 1992 as extended under its option provision. Tenant requests and Landlord agrees to apply the existing security, if any, to this lease. Tenant therefore shall pay the Landlord the shortfall of $-0- plus any outstanding security monies due under the prior lease which is the difference between the existing security and the new security required above.
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Said security payment of $18,100.00 shall be deposited, by the Landlord, in an interest bearing account and henceforth, for the duration of the lease term, the Tenant shall receive, from the Landlord a return on said deposit at a rate not less than the current Chemical Bank, and/or its successor(s) passbook rate less .25% nor more than 8.0% per annum. Actual return to be determined by the current market rates as defined herein. Said payments to be made annually to the Tenant.
The following schedule shall apply for the calculation of monthly interest rates which rate is based on the current annualized average monthly yield on money market accounts at Chemical Bank and Loan or its successors:
Money Market Average Tenant Monthly Interest Landlord Monthly Yield Annualized Rate Accrued - annualized Yield ------------------------ ------------------------- -------- Curr Money Market rate but not less than passbook to 5.50% actual yield -.25% .25% From 5.501% to 6.7499% 5.25% 0.25 to 1.499% From 6.75 to 9.5% 5.25%+curr yield-6.75% 1.5% From 9.501 and up 8.00% curr yield-8.0% |
It is agreed that on each anniversary date of this lease, Tenant shall be required to deposit additional security in the amount of the difference between the monthy rental rate in effect on the current anniversary date and the monthly rate in effect on the prior year's anniversary date.
It is mutually agreed that the security money deposited with the Landlord is considered as a guarantee that the Tenant shall conform to all the covenants, addenda, terms and conditions of this lease. The security deposit or any part thereof may be applied by the Landlord with no prior notice to cure any default of Tenant under this lease and upon notice by Landlord of such application, the Tenant shall replenish the security deposit in full by promptly paying to the Landlord the amount so applied within ten days from receipt of said notice. It is further understood and agreed that the amount set forth in any notice as being the amount required by the Landlord to maintain the security deposit at the proper amount shall be deemed additional rent and failure to pay same shall be a default in the payment of additional rent resulting in the Landlord having the option to exercise all of its remedies pursuant to this agreement.
Under no circumstances shall the security deposit be considered as an advance payment of the rent for the ending month(s) of this lease. Said deposit will be retained by the Landlord until after the Tenant has vacated the premises at which time the Landlord shall inspect the premises to determine if any damage has been caused by Tenant. If none exists, then the deposit will be returned to the Tenant, otherwise the deposit will be considered applicable to any necessary repairs to be made by Landlord, reasonable wear and tear excepted.
2. (a) FIRE INSURANCE - Notwithstanding Covenant Twenty-third of the pre-printed portion of this lease, it is understood and agreed that in the event the fire insurance premium on the demised building, where Tenant is renting a portion thereof, is raised by virtue of the business
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conducted by the Tenant in the premises, the Tenant will pay the Landlord the amount of said increase.
(b) LIABILITY INSURANCE - Public Liability and Other Insurance: Tenant covenants to provide on or before the commencement of the demised term and to keep in force during the demised term a comprehensive liability policy of insurance, including property damage, insuring Tenant and Gyrodyne Company of America, Inc. as Landlord as an additional named insured under the policy against any liability for injury to persons and/or property and death of any person(s) occurring in on or about the premises, or any appurtenances thereto. Such policy or policies to be written by one or more responsible insurance companies authorized to do business by the State of New York satisfactory to Landlord and the limits of liability thereunder shall not be less than the amount of One Million ($1,000,000) dollars in respect to any one person injured or killed, not less than the amount of Two Million ($2,000,000) dollars in respect to any one accident, and not less than the amount of One Hundred Thousand ($100,000) dollars in respect to property damages.
All such insurance may be carried under the blanket policy covering the premises and any other Tenant's properties. Tenant agrees to deliver to Landlord, at least fifteen (15) days prior to the time such insurance is first required to be carried by Tenant, and thereafter at least fifteen (15) days prior to the expiration of any such policy either a duplicate or a certificate and true copy of all policies procured by Tenant in compliance with its obligations hereunder, together with evidence of payment thereof and including an endorsement which states that such insurance may not be canceled, except upon ten (10) days written notice to Landlord and only designee(s) of Landlord, and complete waiver of all rights of subrogation against the Landlord, its' servants, agents and/or employees.
3. BROKER - The Tenant warrants and represents that no broker unless otherwise set forth in this agreement and if one is set forth herein no other broker is involved in the negotiation of the lease, nor in any of the transactions connected therewith and agrees to indemnify and save harmless the Landlord from any claim for brokerage commissions due to acts of the Tenant.
4. LEASE TERM AND ADJUSTMENTS - The term period of this lease shall be from SEPTEMBER 1, 1992 through AUGUST 31, 1997. The base annual rent for the first year of the lease term period shall be $202,826.28 payable in monthly installments of $16,902.19 each. Said rent being subject to adjustments as follows:
(a) REAL ESTATE TAXES - $25,814.00 ($1.05 x 24,585 sq.ft.) of the base annual rent is allocated to the Landlord's real estate tax on the "Flowerfield" property which includes Building #17 and the demised premises therein. It is agreed that if at any time the Town of Smithtown, N.Y. or the Town of Brookhaven levies a tax increase, whether in the form of a rate increase or assessment change on the property, which increase shall be effective during any portion of the lease term, then there will be an adjustment in the annual rent which will be computed on the basis of the percentage of tax change multiplied by the $25,814.00. The resultant, converted to a monthly charge, if in excess
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of $.02/sqft, shall be added to the monthly rental rate in effect at that time; otherwise, a single building will be made during either January or February, annually, as applicable. Tenant shall receive annually from Landlord Landlord's computation for allocated real estate taxes. Landlord reserves the right to reallocate its tax distribution provided said reallocation does not increase Tenant's tax burden, other than as would otherwise be provided hereinbefore, during the then current or succeeding tax year.
(b) HEAT/FUEL OIL COST - The base annual rent includes the Landlord's cost for supplying heat to the demised premises. Said cost factor being set at the "peg" price of oil at $.85 per gallon (including NYS Sales Tax, NYS Use Tax, propane gas, associated electric costs, service and boiler insurance). Thus, if at any time after the commencement of this lease and the end of the lease term period, the cost per gallon of oil increases above the "peg" price, the rent will be adjusted at the rate of $.01 per year per square foot of space (24,585 sq.ft.) for each $.01 per gallon increase. This annual rent adjustment will be converted to a monthly charge and added to the rent in effect at that time.
(c) INSURANCE - The base annual rent includes the Landlord's cost for
building, general liability, and related insurance. $11,309.00 ($.46
x 24,585 sq.ft.) of the base annual rent is allocated to the
Landlord's insurance requirements. The cost per square foot of $.46
is predicated on a 164,413 sq.ft. rental base and a premium base of
$75,900.68 for the current period. In the event in any lease year,
the premium for Landlord's insurance requirements covering the
leased premises increases over the premium amount in effect on the
date of execution of this agreement, within ten (10) days from
receipt of notification, the Tenant shall pay its proportionate
share of said increase to the Landlord. Said obligation shall be
deemed additional rent, and Tenant's proportionate share of said
increase shall be computed on the basis of the percentage increase
in insurance costs multiple by the $11,309.00. Notification by
Landlord shall be deemed conclusive if sent in writing, setting
forth the computations resulting in a statement as to Tenant's
proportionate liability. Notwithstanding anything else contained
herein to the contrary, this obligation of the Tenant shall remain
in full force and effect even if the Landlord elects to self-insure
provided the Landlord presents a statement in writing showing what
the premium amount would be and the increase if the Landlord had
elected not to self-insure.
(d) VOID
(e) VOID
(f) COST OF LIVING ADJUSTMENT - On each anniversary date of this lease, there will be a "Cost of Living (C.O.L.)" rent adjustment based upon a flat 6.5% increase per annum calculated on an initial anniversary date base of $144,806.28.
5. SECURITY GUARDS - The Tenant hereby agrees that if in the Landlord's sole discretion, security services must be retained in order to protect and/or monitor the buildings and/or grounds wherein the demised premises are located, then and in that event the Tenant shall pay to the Landlord on a
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monthly basis its proportionate share of said expenses for security services. Landlord has determined that security services, if provided, during the 1993 calendar year, January 1st through December 31st, shall be assessed at the rate of $10.80 per month per 1,000 square feet of rented space based on a budgeted cost of $21,132.00 apportioned over a 164,413 sq.ft. rental base. Tenant currently occupies 24,585 square feet of space which will result in an annualized charge of $3,196.00 ($.13 x 24,585 sq.ft.) which amount shall be converted to a monthly charge and deemed additional rent. The computed square footage charge for security services shall be subject to a single annual adjustment on January 1st of each year.
6. ACCOUNTING METHODS - It is understood and agreed that upon presentation to the Tenant of any computation with respect to rent, and/or additional rent, or utilities, or computations as to the amount of money to be paid by the Tenant concerning any obligation referred to in this lease to be performed by the Tenant, provided said computations are predicated upon reasonable accounting methods and procedures, then and in that event, computations of the Landlord shall be deemed conclusive and binding upon Tenant's obligation to make payments in accordance with those computations. In the event of a dispute regarding an amount computed by Landlord Tenant shall make such payment into the escrow account of Landlord's lawyer. Tenant will notify Landlord in writing of its intent to dispute the amount paid. All disputes regarding such computations will be resolved by arbitration under supervision of the Fourth District Court of Suffolk County.
7. LATE PAYMENT PENALTIES - Rent and any other Tenant incurred charges appearing on the Landlord's monthly invoices are due and payable to the Landlord on the first day of each month. There will be a four day grace period through the fifth day of the month for the payment of such due bills. However any such unpaid bills after said date will be assessed at the late charge rate of $3.00 per day or 2% per month, whichever is higher, computed from the first day of the month in which said bill is due, to the date of payment to the Landlord. This late charge shall be cumulative and be deemed an additive to the rent for the month such due bill is issued. Late Charges run concurrently (for example: October and November rents are paid December 1st, therefore, a total late penalty of $273.00 would be applicable - $183.00 for the 61 days outstanding on the October rent and $90.00 for the 30 days outstanding on the November rent.)
Tenant's post-dated check will be considered subject to the above assessment if the check date exceeds the above stated payment deadline.
In the event a Tenant check fails bank clearance for any reason, the Landlord shall charge the Tenant with a $20.00 penalty fee to cover bank and administrative costs. If the Tenant fails to correct this deficiency and has not paid the Landlord the monies due by the tenth day of the month, then the late charge as set forth above shall be applicable.
The Landlord's failure to demand or collect said late charges shall in no way be deemed a waiver of any right thereto or any other rights or remedies that the Landlord may have under the terms of this lease, by summary proceedings or otherwise.
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KEYS - Landlord shall provide Tenant keys to the demised premises. Upon receipt thereof, it will be the Tenant's responsibility to safeguard these items. The loss of a key(s) will entail a charge to cover its replacement. If such loss results in the necessity of replacing the lock, then a charge will be levied against the Tenant for such replacement cost. The charge for a lost key is Ten ($10.00) dollars; a door lock is Forty ($40.00) dollars.
Key Number: TENANT SPECIAL Number of Keys __________________ Main Gate Keys: ISSUED Lot #17 Gate Keys: ISSUED |
8. ADDITIONAL RENT - Any and all payments and/or expenses required to be paid by the Tenant shall be deemed additional rent and rent if same are due the Landlord or in the event the Landlord expends said monies on behalf of the Tenant for which the Tenant has an obligation to reimburse the Landlord.
9. CESSATION OF UTILITIES - For the purposes of this covenant, utilities shall mean Heat and Electric. In the event of a dispute, Tenant shall have the right to remit to Landlord's designated escrow agent, solely and specifically those amounts which are in dispute, to be retained in escrow account until such dispute is resolved. It is the intent of this covenant that Tenant shall remit utility payments to the full extent of the undisputed amount. For instance in the case of an electric invoice, if a bill includes charges for lighting and air conditioning usage, and the dispute pertains specifically to the lighting charge, the remittance shall be in full for the air conditioning charge and that portion of the undisputed lighting charge. Further, if the dispute is predicated upon an applicable rate or distribution formula covering the entire bill, the escrow payment is restricted to the percentage or pro rate amount in dispute. Remittances conveyed to the escrow agent will halt the tolling of the grace period indefinitely as herein provided.
10. NOTICES AND SERVICE OF PROCESS - Any notice or demand which under the terms of this lease or under any statute must or may be given or made by the parties hereto or legal documents including, but not limited to, those documents commencing legal action and/or proceedings shall be in writing and shall be deemed properly served upon both parties hereto if served personally or by mailing same through the U.S. mail to either the address of the Tenant as stated in the pre-printed portion of the lease or the initialed Tenant Fact Sheet or to any of the personal guarantors of said lease. If and when said service is made, both parties hereby waive any jurisdictional defects and/or claims of improper service.
11. DEFAULT - Tenant hereby agrees that in the event Tenant breaches the terms and conditions of this lease for two consecutive monthly periods or three times in any 12 month period, same shall be deemed a default thereby permitting the Landlord, at its option to terminate this Lease as per the terms and conditions of said Lease provided Tenant has been given reasonable notice of said breach.
12. RENT ACCELERATION - Anything herein to the contrary notwithstanding, the premises herein mentioned are demised for the whole term with the whole amount of rent herein reserved, due and payable at the time of the making of
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this lease and the payment of rent in installments as herein provided is for the convenience of the Tenant only. If default by the Tenant in the making of any installment payment of rent occurs, then the whole of the rent reserved for the whole period shall then become due and payable to the Landlord without notice or demand. In connection with the proposed accelleration of rental payments contemplated under this clause, the Landlord agrees to forego any of the provisions based on Addendum Covenant Sections III(1)a, III(1)b, and IV(1), herein which by the language thereof whether with or without notice, allows the Landlord to either declare a default or a termination of the lease and agrees that it is the understanding of the parties hereto that before the rental acceleration clause hereinafter set forth shall be triggered there must be a judicial determination that the acts of commission and or omission are such that under the provisions of the lease these acts of commission or omission result in violation of the lease warranting termination of said lease and then and only then upon such judicial declaration or determination that there shall be a legal responsibility on the part of the Tenant to pay the amount of the entire residual rent for the stated term plus any other items of damage allowed in the judicial decree. It is further agreed that if so paid the Tenant may continue his occupancy of said premises for the balance of the lease term provided that acts of Tenant shall not have resulted in the invalidation of the existing Certificate of Occupancy/Use so that no Certificate of Occupancy Use can be secured for the demised premises during the balance of Tenant's lease term.
It is therefore further agreed that upon the judicial determination or declaration that due to acts of commission or omission on the part of the Tenant, that the lease is terminated, the Tenant will pay forthwith to Landlord a sum equal to the entire amount of the rent stipulated in this lease for the residue due of the stated term plus any other sums then due hereunder.
13. LANGUAGE PRECEDENCE - In the event of conflict between the pre-printed portion of this Lease and the Addendum hereto, the terms and conditions set forth in the Addendum shall control.
HEADINGS - Headings used throughout this Lease are inserted for reference purposes only, and are not to be considered or taken into account in construing the terms or provisions of any covenant or paragraph hereof nor to be deemed in any way to qualify, modify or explain the effect of any such provisions or terms.
14. ATTORNEY'S FEES - All parties agree that $500 is reasonable as an attorney's fees if the matter is resolved after service of Notice of Petition and Petition and receipt of Tenant's response and prior to appearing in court. In the event any further papers not associated with the above resolution must be prepared and/or further expenditure of time is required, then, and in that event, Landlord shall be entitled to additional reasonable legal fees over and above the sum of $500 at the agreed upon stipulated reasonable sum of $175 per hour.
15. ADDRESS DESIGNATION - Landlord has the full right at any time to name and change the name of the building and property and to change the designated address of the building and property. The building and property may be named
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Page 19 of 21 Carco Group, Inc. LEASE
after any person, firm or otherwise, whether or not the name is, or resembles, the name of a tenant of the building and property.
16. RIGHT OF FIRST REFUSAL - SUITES #21 & #24 - If at any time during the term of this Lease, Landlord shall receive a bona fide offer from any person to rent the premises known as Suite #21 (aka, the paint booth annex) and/or Suite #24 (aka, the paint booth) in building #17, Landlord shall inform Tenant of the proposed offer and of Landlord's intention to accept same.
Tenant shall have the right within 10 days to match the terms of said offer in writing and within 30 days to rent either or both suites, as applicable, for the terms specified. If Tenant does not elect to match the third party's offer within the ten day period specified herein, Landlord may rent the premises to other than Tenant.
In the event Tenant does not execute the right of first refusal specified herein, such right shall be extinguished upon consummation of said Lease.
This provision applies to all Leases including Lease between Landlord and corporations or divisions controlled by Landlord.
SECTION VI - Vacation and Abandonment
1. HOLD-OVER - In the event this lease is not renewed and the Tenant has failed to vacate the premises prior to SEPTEMBER 1, 1997 then the Tenant agrees to pay the Landlord triple the monthly rent then applicable for each month or portion thereof that Tenant retains possession of the premises or any portion thereof, after the expiration or termination of this lease, and shall also pay all damages sustained by Landlord by reason of such retention of possession.
In Addition, Tenant will also pay those other items of additional rent which would have been payable monthly pursuant to this lease, had this lease not expired.
The provisions of this section shall not constitute a waiver by Landlord of any re-entry rights of the Landlord pursuant to other provisions contained herein or as provided by law. At the sole option of the Landlord, expressed by written notice to the Tenant, but not otherwise, such holding-over shall constitute a renewal of this lease for a period of one year on the terms and conditions herein set forth at triple the then current monthly rent. In the event the Landlord does not exercise said option, then as previously set forth, the Tenant shall pay the Landlord triple the then monthly rent during the hold-over period.
2 GUARANTEES - It is mutually agreed and understood that if Tenant after the conclusion of the hereinbefore defined lease term becomes a month-to-month tenant, a tenant at will, or a holdover tenant, all personal, business, and corporate guarantees applicable to the hereinbefore defined lease term shall unequivocal1y also apply to the extended lease term.
3. (a) ABANDONED PROPERTY - It is hereby understood and agreed that in the event the Tenant leaves any property on the demised premises for more
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than fourteen days subsequent to the expiration of the within lease that said property is hereby deemed abandoned and the Landlord may dispose of said property at its option without any liability on the part of the Landlord. It is further understood and agreed that the Tenant waives any and all right, title and interest to said property, releases and waives any and all claims thereto and further agrees that the Tenant will be responsible to the Landlord for any and all expenses incurred by the Landlord concerning said property.
(b) UNAUTHORIZED VEHICLES - It is understood and agreed that in the event any vehicles of any parties, their servants, agents and/or employees, invitees, licensees, subtenants, etc., are improperly parked on the grounds of the Landlord, the Landlord is hereby granted express permission to take any and all necessary steps to remove said vehicles including but not limited to the towing of said vehicles. For the purpose of this paragraph "improperly parked" shall mean any vehicle parked in a loading zone; parked in an area designated with a sign as a no parking zone; parked in other than a designated parking lot, parked overnight without the express permission of the Landlord, or parked overnight in other than a fenced-in reserved parking area. Any and all expenses relating to the removal of said vehicles and/or the safeguarding of said vehicles, if the Landlord elects to do so, shall be the responsibility of either the owner of the vehicles or the applicable tenant whose business led to said vehicles being on the grounds of the Landlord and said parties hereby agree to immediately reimburse the Landlord for said expenses together with interest at the rate of 2% per month and same shall constitute additional rent to which the failure to pay shall result in the Landlord exercising, at its option, any of the remedies provided for herein. The Tenant specifically waives any claim for damages arising from the removal of vehicles owned and/or operated by the Tenant, its servants, agents and/or employees and releases the Landlord from any such claims. In the event claims are made by third parties as a result of the removal of said vehicles or any damage caused to said vehicles, the Tenant hereby agrees to hold harmless, indemnify and defend the Landlord concerning said claims.
In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
UNPLATED VEHICLES - It is agreed that motor vehicles without license plates constitute a special situation. Any unregistered motor vehicle parked on the Flowerfield premises will be subject to all the conditions herein above described and to a ten ($10.00) dollar per day parking fee effective after the first twenty-four hours of parking. In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
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(c) WASTE - Tenant at expiration of Lease shall be solely liable for removal of any drums or containers over five gallons in addition to its other responsibilities. In the event the drums or containers are not removed, until such time that same are complied with, Tenant agrees not to demand return of any portion of its securities being held by Landlord. In addition thereto, the Tenant again appoints the Landlord as its Attorney in Fact to exercise any and all rights, and to execute any and all documents necessary to secure compliance with this provision. Tenant hereby approves of any actions taken by the Landlord pursuant to said Power of Attorney and waives any and all claims in relation thereto.
(d) ENTIRE AGREEMENT - This Lease with attached pre-printed portion and Addendums is the complete agreement between Tenant and Landlord in its entirety with respect to the premises leased herein and cannot be changed, modified or terminated orally. There are no representations, agreement arrangements or understandings oral or written, between Tenant and Landlord up to the date of this Lease, which are not fully contained herein.
GYRODYNE COMPANY OF AMERICA, INC.
9-28-93 /s/ Joseph [ILLEGIBLE] Sec'y - Treas ------------------ ------------------------------------------- (Date) (Landlord) |
CARCO GPOUP, INC.
9-28-93 /s/ Michael J. [ILLEGIBLE], Vice President ------------------ ------------------------------------------- (Date) (Tenant) Page 21 of 21 Carco Group, Inc. LEASE |
A 35--Lease, Business, Premises. JULIUS BLUMBERG, INC., LAW BLANK Loft, Office or Store. 2-65 PUBLISHERS
This Lease made the 28th day of September 1993, between
GYRODYNE COMPANY OF AMERICA, INC.
hereinafter referred to as LANDLORD, and
CARCO GROUP, INC.
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant hereby hires and takes from the Landlord An area deemed to be approximately 24,585 square feet of space Industrial in the building known as 7 Flowerfield, Suites 3,6,9,12, and 18 to be used and occupied by the Tenant AS ADMINISTRATIVE HEADQUARTERS FOR CARCO GROUP, INC. and for no other purpose, for a term to commence on SEPTEMBER 1, 1992, and to end on AUGUST 31, 1997, unless sooner terminated as hereinafter provided, at the ANNUAL RENT of TWO HUNDRED TWO THOUSAND EIGHT HUNDRED TWENTY-SIX DOLLARS AND TWENTY-EIGHT CENTS($202,826.28) WHICH SHALL BE SUBJECT TO ADJUSTMENT PURSUANT TO THE COVENANTS HEREIN AND ADDENDUM SECTION V, PARAGRAPHS 4(a),(b),(c) AND (f). $16,902.19 all payable in equal monthly instalments in advance on the first day of each and every calendar month during said term, except the first instalment, which shall be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
REPAIRS
ORDINANCES AND VIOLATIONS
ENTRY
INDEMNIFY LANDLORD
SECOND.--That, throughout said term the Tenant will take good care of the demised premises, fixtures and appurtenances, and all alterations, additions and improvements to either; make all repairs in and about the same necessary to preserve them in good order and condition, which repairs shall be, in quality and class, equal to the original work; promptly pay the expense of such repairs; suffer no waste or injury; give prompt notice to the Landlord of any fire that may occur; execute and comply with all laws, rules, orders, ordinances and regulations at any time issued or in force (except those requiring structural alterations), applicable to the demised premises or to the Tenant's occupation thereof, of the Federal, State and Local Governments, and of each and every department, bureau and official thereof, and of the New York Board of Fire Underwriters; permit at all times during usual business hours, the Landlord and representatives of the Landlord to enter the demised premises for the purpose of inspection, and to exhibit them for purposes of sale or rental; suffer the Landlord to make repairs and improvements to all parts of the building, and to comply with all orders and requirements of governmental authority applicable to said building or to any occupation thereof; suffer the Landlord to erect, use, maintain, repair and replace pipes and conduits in the demised premises and to the floors above and below; forever indemnify and save harmless the Landlord for and against any and all liability, penalties, damages, expenses and judgments arising from injury during said term to person or property of any nature, occasioned wholly or in part by any act or acts, omission or omissions of the Tenant, or of the employees, guests, agents, assigns or undertenants of the Tenant and also for any matter or thing growing out of the occupation of the demised premises or of the streets, sidewalks or vaults adjacent thereto; permit, during the six months next prior to the expiration of the term the usual notice "To Let" to be placed and to remain unmolested in a conspicuous place upon the exterior of the demised premises; repair, at or before the end of the term, all injury done by the installation or removal of furniture and property; and at the end of the term, to quit and surrender the demised premises with all alterations, additions and improvements in good order and condition.
MOVING INJURY SURRENDER
NEGATIVE COVENANTS
OBSTRUCTION SIGNS
AIR CONDITIONING
THIRD.--That the Tenant will not disfigure or deface any part of the building, or suffer the same to be done, except so far as may be necessary to affix such trade fixtures as are herein consented to by the Landlord; the Tenant will not obstruct, or permit the obstruction of the street or the sidewalk adjacent thereto; will not do anything, or suffer anything to be done upon the demised premises which will increase the rate of fire insurance upon the building or any of its contents, or be liable to cause structural injury to said building; will not permit the accumulation of waste or refuse matter, and will not, without the written consent of the Landlord first obtained in each case, either sell, assign, mortgage or transfer this lease, underlet the demised premises or any part thereof, permit the same or any part thereof to be occupied by anybody other than the Tenant and the Tenant's employees, make any alterations in the demised premises, use the demised premises or any part thereof for any purpose other than the one first above stipulated, or for any purpose deemed extra hazardous on account of fire risk, nor in violation of any law or ordinance. That the Tenant will not obstruct or permit the obstruction of the light, halls, stairway or entrances to the building, and will not erect or inscribe any sign, signals or advertisements unless and until the style and location thereof have been approved by the Landlord; and if any be erected or inscribed without such approval, the Landlord may remove the same. No water cooler, air conditioning unit or system or other apparatus shall be installed or used without the prior written consent of Landlord.
IT IS MUTUALLY COVENANTED AND AGREED, THAT
FIRE CLAUSE
FOURTH.--If the demised premises shall be partially damaged by fire or other cause without the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, the damages shall be repaired by and at the expense of Landlord and the rent until such repairs shall be made shall be apportioned according to the part of the demised premises which is usable by Tenant. But if such partial damage is due to the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, without prejudice to any other rights and remedies of Landlord and without prejudice to the rights of subrogation of Landlord's insurer, the damages shall be repaired by Landlord but there shall he no apportionment or abatement of rent. No penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Landlord and/or Tenant, and for reasonable delay on account of "labor troubles", or any other cause beyond Landlord's control. If the demised premises are totally damaged or are rendered wholly untenantable by fire or other cause, and if Landlord shall decide not to restore or not to rebuild the same, or if the building shall be so damaged that Landlord shall decide to demolish it or to rebuild it, then or in any of such events Landlord may, within ninety (90) days after such fire or other cause, give Tenant a notice in writing of such decision, which notice shall be given as in Paragraph Twelve hereof provided, and thereupon the term of this lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the demised premises and surrender the same to Landlord. If Tenant shall not be in default under this lease then, upon the termination of this lease under the conditions provided for in the sentence immediately preceding, Tenant's liability for rent shall cease as of the day following the casualty. Tenant hereby expressly waives the provisions of Section 227 of the Real Property Law and agrees that the foregoing provisions of this Article shall govern and control in lieu thereof. If the damage or destruction be due to the fault or neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
EMINENT DOMAIN
FIFTH.--If the whole or any part of the premises hereby demised shall be taken or condemned by any competent authority for any public use or purpose then the term hereby granted shall cease from the time when possession of the part so taken shall be required for such public purpose and without apportionment of award, the Tenant hereby assigning to the Landlord all right and claim to any such award, the current rent, however, in such case to be apportioned.
LEASE NOT IN EFFECT
DEFAULTS
TEN DAY NOTICE
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated a bankrupt, or make a "general assignment," or take the benefit of any insolvent act, or if a Receiver or Trustee be appointed for the Tenant's property, or if this lease or the estate of the Tenant hereunder be transferred or pass to or devolve upon any other person or corporation, or if the Tenant shall default in the performance of any agreement by the Tenant contained in any other lease to the Tenant by the Landlord or by any corporation of which an officer of the Landlord is a Director, this lease shall thereby, at the option of the Landlord, be terminated and in that case, neither the Tenant nor anybody claiming under the Tenant shall be entitled to go into possession of the demised premises. If after the commencement of the term, any of the events mentioned above in this subdivision shall occur, or if Tenant shall make default in fulfilling any of the covenants of this lease, other than the covenants for the payment of rent or "additional rent" or if the demised premises become vacant or deserted, the Landlord may give to the Tenant ten days' notice of intention to end the term of this lease, and thereupon at the expiration of said ten days' (if said condition which was the basis of said notice shall continue to exist) the term under this lease shall expire as fully and completely as if that day were the date herein definitely fixed for the expiration of the term and the Tenant will then quit and surrender the demised premises to the Landlord, but the Tenant shall remain liable as hereinafter provided.
RE-POSSESSION BY LANDLORD
RE-LETTING
WAIVER BY TENANT
If the Tenant shall make default in the payment of the rent reserved hereunder, or any item of "additional rent" herein mentioned, or any part of either or in making any other payment herein provided for, or if the notice last above provided for shall have been given and if the condition which was the basis of said notice shall exist at the expiration of said ten days' period, the Landlord may immediately, or at any time thereafter, re-enter the demised premises and remove all person and all or any property therefrom, either by summary dispossess proceedings, or by any suitable action or proceeding at law, or by force or otherwise, without being liable to indictment, prosecution or damages therefor, and re-possess and enjoy said premises together with all additions, alterations and improvements. In any such case or in the event that this lease be "terminated" before the commencement of the term, as above provided, the Landlord may either re-let the demised premises or any part or parts thereof for the Landlord's own account, or may, at the Landlord's option, re-let the demised premises or any part or parts thereof as the agent of the Tenant, and receive the rents therefor, applying the same first to the payment of such expenses as the Landlord may have incurred, and then to the fulfillment of the covenants of the Tenant herein, and the balance, if any, at the expiration of the term first above provided for, shall be paid to the Tenant. Landlord may rent the premises for a term extending beyond the term hereby granted without releasing Tenant from any liability. In the event that the term of this lease shall expire as above in this subdivision "Sixth" provided, or terminate by summary proceedings or otherwise, and if the Landlord shall not re-let the demised premises for the Landlord's own account, then, whether or not the premises be re-let, the Tenant shall remain liable for, and the Tenant hereby agrees to pay to the Landlord, until the time when this lease would have expired but for such termination or expiration, the equivalent of the amount of all of the rent and "additional rent" reserved herein, less the avails of reletting, if any, and the same shall be due and payable by the Tenant to the Landlord on the several rent days above specified, that is, upon each of such rent days the Tenant shall pay to the Landlord the amount of deficiency then existing. The Tenant hereby expressly waives any and all right of redemption in case the Tenant shall be dispossessed by judgment or warrant of any court or judge, and the Tenant waives and will waive all right to trial by jury in any summary proceedings hereafter instituted by the Landlord against the Tenant in respect to the demised premises. The words "re-enter" and "re-entry" as used in this lease are not restricted to their technical legal meaning.
REMEDIES ARE CUMULATIVE
In the event of a breach or threatened breach by the Tenant of any of the covenants or provisions hereof, the Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity, as if re-entry, summary proceedings and other remedies were not herein provided for.
LANDLORD MAY PERFORM
ADDITIONAL RENT
SEVENTH.--If the Tenant shall make default in the performance of any covenant herein contained, the Landlord may immediately, or at any time thereafter, without notice, perform the same for the account of the Tenant. If a notice of mechanic's lien be filed against the demised premises or against premises of which the demised premises are part, for, or purporting to be for, labor or material alleged to have been furnished, or to be furnished to or for the Tenant at the demised premises, and if the Tenant shall fail to take such action as shall cause such lien to be discharged within fifteen days after the filing of such notice, the Landlord may pay the amount of such lien or discharge the same by deposit or by bonding proceedings, and in the event of such deposit or bonding proceedings, the Landlord may require the lienor to prosecute an appropriate action to enforce the lienor's claim. In such case, the Landlord may pay any judgment recovered on such claim. Any amount paid or expense incurred by the Landlord as in this subdivision of this lease provided, and any amount as to which the Tenant shall at any time be in default for or in respect to the use of water, electric current or sprinkler supervisory service, and any expense incurred or sum of money paid by the Landlord by reason of the failure of the Tenant to comply with any provision hereof, or in defending any such action, shall be deemed to be "additional rent" for the demised premises, and shall be due and payable by the Tenant to the Landlord on the first day of the next following month, or, at the option of the Landlord, on the first day of any succeeding month. The receipt by the Landlord of any instalment of the regular stipulated rent hereunder or any of said "additional rent" shall not be a waiver of any other "additional rent" then due.
AS TO WAIVERS
EIGHTH.--The failure of the Landlord to insist, in any one or more instances upon a strict performance of any of the covenants of this lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by the Landlord of rent, with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach and no waiver by the Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Landlord. Even though the Landlord shall consent to an assignment hereof no further assignment shall be made without express consent in writing by the Landlord.
COLLECTION OF RENT FROM OTHERS
NINTH.--If this lease be assigned, or if the demised premises or any part thereof be underlet or occupied by anybody other than the Tenant the Landlord may collect rent from the assignee, under-tenant or occupant, and apply the net amount collected to the rent herein reserved, and no such collection shall be deemed a waiver of the covenant herein against assignment and underletting, or the acceptance of the assignee, under-tenant or occupant as tenant, or a release of the Tenant from the further performance by the Tenant of the covenants herein contained on the part of the Tenant.
MORTGAGES
[VOID]
IMPROVEMENTS
ELEVENTH.--All improvements made by the Tenant to or upon the demised premises, except said trade fixtures, shall when made, at once be deemed to be attached to the freehold, and become the property of the Landlord, and at the end or other expiration of the term, shall be surrendered to the Landlord in as good order and condition as they were when installed, reasonable wear and damages by the elements excepted.
NOTICES
[VOID]
NO LIABILITY
THIRTEENTH.--The Landlord shall not be liable for any failure of water supply or electrical current, sprinkler damage, or failure of sprinkler service, nor for injury or damage to person or property caused by the elements or by other tenants or persons in said building, or resulting from steam, gas, electricity, water, rain or snow, which may leak or flow from any part of said buildings, or from the pipes, appliances or plumbing works of the same, or from the street or sub-surface, or from any other place, nor for interference with light or other incorporeal hereditaments by anybody other than the Landlord, or caused by operations by or for a governmental authority in construction of any public or quasi-public work, neither shall the Landlord be liable for any latent defect in the building,
NO ABATEMENT
FOURTEENTH.--No diminution or abatement of rent, or other compensation shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building or to its appliances, nor for any space taken to comply with any law, ordinance or order of a governmental authority. In respect to the various "services," if any, herein expressly or impliedly agreed to be furnished by the Landlord to the Tenant, it is agreed that there shall be no diminution or abatement of the rent, or any other compensation, for interruption or curtailment of such "service" when such interruption or curtailment shall be due to accident, alterations or repairs desirable or necessary to be made or to inability or difficulty in securing supplies or labor for the maintenance of such "service" or to some other cause, not gross negligence on the part of the Landlord. No such interruption or curtailment of any such "service" shall be deemed a constructive eviction. The Landlord shall not be required to furnish, and the Tenant shall not be entitled to receive, any of such "services" during any period wherein the Tenant shall be in default in respect to the payment of rent. Neither shall there be any abatement or diminution of rent because of making of repairs, improvements or decorations to the demised premises after the date above fixed for the commencement of the term, it being understood that rent shall, in any event, commence to run at such date so above fixed.
RULES, ETC.
FIFTEENTH.--The Landlord may prescribe and regulate the placing of safes, machinery, quantities of merchandise and other things. The Landlord may also prescribe and regulate which elevator and entrances shall be used by the Tenant's employees, and for the Tenant's shipping. The Landlord may make such other and further rules and regulations as, in the Landlord's judgment, may from time to time be needful for the safety, care or cleanliness of the building, and for the preservation of good order therein. The Tenant and the employees and agents of the Tenant will observe and conform to all such rules and regulations.
SHORING OF WALLS
[VOID]
VAULT SPACE
[VOID]
ENTRY
EIGHTEENTH.--That during seven months prior to the expiration of the term hereby granted, applicants shall be admitted at all reasonable hours of the day to view the premises until rented; and the Landlord and the Landlord's agents shall be permitted at any time during the term to visit and examine them at any reasonable hour of the day, and workmen may enter at any time, when authorized by the Landlord or the Landlord's agents, to make or facilitate repairs in any part of the building; and if the said Tenant shall not be personally present to open and permit an entry into said premises, at any time, when for any reason an entry therein shall be necessary or permissible hereunder, the Landlord or the Landlord's agents may forcibly enter the same without rendering the Landlord or such agents liable to any claim or cause of action for damages by reason thereof (if during such entry the Landlord shall accord reasonable care to the Tenant's property) and without in any manner affecting the obligations and covenants of this lease; it is, however, expressly understood that the right and authority hereby reserved, does not impose, nor does the Landlord assume, by reason thereof, any responsibility or liability whatsoever for the care or supervision of said premises, or any of the pipes, fixtures appliances or appurtenances therein contained or therewith in any manner connected.
NO REPRESENTATIONS
NINETEENTH.--The Landlord has made no representations or promises in respect to said building or to the demised premises except those contained herein, and those, if any, contained in some written communication to the Tenant, signed by the Landlord. This instrument may not be changed, modified, discharged or terminated orally.
ATTORNEY'S FEES
TWENTIETH.--If the Tenant shall at any time be in default hereunder, and if the Landlord shall institute an action or summary proceeding against the Tenant based upon such default, then the Tenant will reimburse the Landlord for the expense of attorneys' fees and disbursements thereby incurred by the Landlord, so far as the same are reasonable in amount. Also so long as the Tenant shall be a tenant hereunder the amount of such expenses shall be deemed to be "additional rent" hereunder and shall be due from the Tenant to the Landlord on the first day of the month following the incurring of such respective expenses.
POSSESSION
TWENTY-FIRST.--Landlord shall not be liable for failure to give possession of the premises upon commencement date by reason of the fact that premises are not ready for occupancy, or due to a prior Tenant wrongfully holding over or any other person wrongfully in possession or for any other reason: in such event the rent shall not commence until possession is given or is available, but the term herein shall not be extended.
THE TENANT FURTHER COVENANTS:
IF A FIRST FLOOR
[VOID]
INCREASED FIRE INSURANCE RATE
TWENTY-THIRD.--If by reason of the conduct upon the demised premises of a business not herein permitted, or if by reason of the improper or careless conduct of any business upon or use of the demised premises, the fire insurance rate shall at any time be higher than it otherwise would be, then the Tenant will reimburse the Landlord, as additional rent hereunder, for that part of all fire insurance premiums hereafter paid out by the Landlord which shall have been charged because of the conduct of such business not so permitted, or because of the improper or careless conduct of any business upon or use of the demised premises, and will make such reimbursement upon the first day of the month following such outlay by the Landlord; but this covenant shall not apply to a premium for any period beyond the expiration date of this lease, first above specified. In any action or proceeding wherein the Landlord and Tenant are parties, a schedule or "make up" of rate for the building on the demised premises, purporting to have been issued by New York Fire Insurance Exchange, or other body making fire insurance rates for the demised premises, shall be prima facie evidence of the facts therein stated and of the several items and charges included in the fire insurance rate then applicable to the demised premises.
WATER RENT
SEWER
TWENTY-FOURTH.--If a separate water meter be installed for the demised premises, or any part thereof, the Tenant will keep the same in repair and pay the charges made by the municipality or water supply company for or in respect to the consumption of water, as and when bills therefor are rendered. If the demised premises, or any part thereof, be supplied with water through a meter which supplies other premises, the Tenant will pay to the Landlord, as and when bills are rendered therefor, the Tenant's proportionate part of all charges which the municipality or water supply company shall make for all water consumed through said meter, as indicated by said meter. Such proportionate part shall be fixed by apportioning the respective charge according to floor area against all of the rentable floor area in the building (exclusive of the basement) which shall have been occupied during the period of the respective charges, taking into account the period that each part of such area was occupied. Tenant agrees to pay as additional rent the Tenant's proportionate part, determined as aforesaid, of the sewer rent or charge imposed or assessed upon the building of which the premises are a part.
ELECTRIC CURRENT
TWENTY-FIFTH.--That the Tenant will purchase from the Landlord, if the Landlord shall so desire, all electric current that the Tenant requires at the demised premises, and will pay the Landlord for the same, as the amount of consumption shall be indicated by the meter furnished therefor. The price for said current shall be the same as that charged for consumption similar to that of the Tenant by the company supplying electricity in the same community. Payments shall be due as and when bills shall be rendered. The Tenant shall comply with like rules, regulations and contract provisions as those prescribed by said company for a consumption similar to that of the Tenant.
SPRINKLER SYSTEM
TWENTY-SIXTH.--If there now is or shall be installed in said building a "sprinkler system" the Tenant agrees to keep the appliances thereto in the demised premises in repair and good working condition, and if the New York Board of Fire Underwriters or the New York Fire Insurance Exchange or any bureau, department or official of the State or local government requires or recommends that any changes, modifications, alterations or additional sprinkler heads or other equipment be made or supplied by reason of the Tenant's business, or the location of partitions, trade fixtures, or other contents of the demised premises, or if such changes, modifications, alterations, additional sprinkler heads or other equipment in the demised premises are necessary to prevent the imposition of a penalty or charge against the full allowance for a sprinkler system in the fire insurance rate as fixed by said Exchange, or by any Fire Insurance Company, the Tenant will at the Tenant's own expense, promptly make and supply such changes, modifications, alterations, additional sprinkler heads or other equipment. As additional rent hereunder the Tenant will pay to the Landlord, annually in advance, throughout the term $ a prorate portion 56.7% toward the contract price for sprinkler supervisory service.
SECURITY
TWENTY-SEVENTH.--The sum of see paragraph #1 of Addendum Section V Dollars is deposited by the Tenant herein with the Landlord herein as security for the faithful performance of all the covenants and conditions of the lease by the said Tenant. If the Tenant faithfully performs all the covenants and conditions on his part to be performed, then the sum deposited shall be returned to said Tenant.
NUISANCE
TWENTY-EIGHTH.--This lease is granted and accepted on the especially understood and agreed condition that the Tenant will conduct his business in such a manner, both as regards noise and kindred nuisances, as will in no wise interfere with, annoy, or disturb any other tenants, in the conduct of their several businesses, or the landlord in the management of the building; under penalty of forfeiture of this lease and consequential damages.
BROKERS COMMISSIONS
TWENTY-NINTH.--The Landlord hereby recognizes NO BROKER as the broker who negotiated and consummated this lease with the Tenant herein, and agrees that if, as, and when the Tenant exercises the option, if any, contained herein to renew this lease, or fails to exercise the option, if any, contained therein to cancel this lease, the Landlord will pay to said broker a further commission in accordance with the rules and commission rates of the Real Estate Board in the community. A sale, transfer, or other disposition of the Landlord's interest in said lease shall not operate to defeat the Landlord's obligation to pay the said commission to the said broker. The Tenant herein hereby represents to the Landlord that the said broker is the sole and only broker who negotiated and consummated this lease with the Tenant.
WINDOW CLEANING
[VOID]
VALIDITY
THIRTY-FIRST.--The invalidity or unenforceability of any provision of this lease shall in no way affect the validity or enforceability of any other provision hereof.
EXECUTION & DELIVERY OF LEASE
THIRTY-SECOND.--In order to avoid delay, this lease has been prepared and submitted to the Tenant for signature with the understanding that it shall not bind the Landlord unless and until it is executed and delivered by the Landlord.
EXTERIOR OF THE PREMISES
[VOID]
PLATE GLASS
THIRTY-FOURTH.--The Landlord shall replace at the expense of the Tenant any and all broken glass in the skylights, doors and walls in and about the demised premises. The Landlord may insure and keep insured all plate glass in the skylights, doors and walls in the demised premises, for and in the name of the Landlord and bills for the premiums therefor shall be rendered by the Landlord to the Tenant at such times as the Landlord may elect, and shall be due from and payable by the Tenant when rendered, and the amount thereof shall be deemed to be, and shall be paid as, additional rent.
WAR EMERGENCY
THIRTY-FIFTH.--This lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on part of Tenant to be performed shall in nowise be affected, impaired or excused because Landlord is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reason of governmental preemption in connection with a National Emergency declared by the President of the United States or in connection with any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency.
THE LANDLORD COVENANTS
QUIET POSSESSION
FIRST.--That if and so long as the Tenant pays the rent and "additional rent" reserved hereby, and performs and observes the covenants and provisions hereof, the Tenant shall quietly enjoy the demised premises, subject, however, to the terms of this lease, and to the mortgages above mentioned, provided however, that this covenant shall be conditioned upon the retention of title to the premises by Landlord.
ELEVATOR HEAT
[VOID]
And it is mutually understood and agreed that the covenants and agreements contained in the within lease shall be binding upon the parties hereto and upon their respective successors, heirs, executors and administrators.
In Witness Whereof, the Landlord and Tenant have respectively signed and sealed these presents the day and year first above written,
/s/ Joseph [ILLEGIBLE], Sec'y - Treas
--------------------------------------[L. S.]
Landlord
GYRODYNE COMPANY OF AMERICA, INC.
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IN PRESENCE OF:
/s/ Michael J. Giordano, Vice President
--------------------------------------[L. S.]
Tenant
CARCO GROUP, INC.
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State of New York, County of ss:
On the day of 19 , before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of , the corporation described in and which executed the within instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
State of New York, County of ss:
On the day of 19 , before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of
, the corporation described in and which executed the within instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
State of New York, County of ss:
On the day of 19 , before me personally came
to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged that he executed the same.
State of New York, County of ss:
On the day of 19 , before me personally came , subscribing witness to the foregoing instrument, with whom I am personally acquainted, who, being by me duly sworn, did depose and say, that he resided, at the time of the execution of said instrument, and still resides, in that he is and then was acquainted with , and knew to be the individual described in and who executed the foregoing instrument; and that he, said subscribing witness, was present and saw execute the same; and that he, said witness, thereupon at the same time subscribed his name as witness thereto.
BUILDING _______________________________________________________________________
Premises________________________________________________________________________
Landlord
to
Tenant
L E A S E
GUARANTY
In consideration of the letting of the premises within mentioned to the Tenant within named, and of the sum of One Dollar, to the undersigned in hand paid by the Landlord within named, the undersigned hereby guarantees to the Landlord and to the heirs, successors and/or assigns of the Landlord, the payment by the Tenant of the rent, within provided for, and the performance by the Tenant of all of the provisions of the within lease. Notice of all defaults is waived, and consent is hereby given to all extensions of time that any Landlord may grant.
Dated, 19
______________________________L.S.
STATE OF NEW YORK COUNTY OF SUFFOLK ss:
On this day of , 19 , before me personally
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appeared to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
Exhibit 99.2
LEASE AGREEMENT
between
GYRODYNE COMPANY OF AMERICA, INC.
and
FLOWERFIELD CELEBRATIONS, INC.
Dated: November 11, 1996
TABLE OF CONTENTS
Preamble
ARTICLE 1 - Definitions 7-11
ARTICLE 2 - The Premises 12-13
ARTICLE 3 - Lease of the Premises and Grant of Access 13-14
ARTICLE 4 - Use and Occupancy of Leasehold Premises 14-15
ARTICLE 5 - Use of Access Area 15
ARTICLE 6 - Rent 15-17
ARTICLE 7 - Additional Rent 17-23
(a) Real Estate Taxes and Assessments
(b) Operating Costs
ARTICLE 8 - Payment 23-24
ARTICLE 9 - Books and Records 24-25
ARTICLE 10 - Rent Security 25
ARTICLE 11 - Penalty for Nonpayment of Last Month's Rent 26
ARTICLE 12 - Lease Term 26
(a) Initial Term
(b) Renewal Term
(c) Expiration Term
ARTICLE 13 - The Architect 27
ARTICLE 14 - Financing the Leasehold Improvements 27-28
ARTICLE 15 - Condition of Leasehold Premises and Flowerfield 28-29
ARTICLE 16 - Site Investigations 29
ARTICLE 17 - Title Search and Survey 29-31
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ARTICLE 18 - Common Utilities 31-32
ARTICLE 19 - Preexisting Conditions 32
ARTICLE 20 - The Project 33-36
ARTICLE 21 - Construction Commencement 36-37
ARTICLE 22 - Excavation and Shoring 37-38
ARTICLE 23 - Quality of Construction and Fixtures 38-39
ARTICLE 24 - Inspection Rights 39
ARTICLE 25 - Construction Liens and Completion 39-40
ARTICLE 26 - Equipment Installations on Roof 40-41
ARTICLE 27 - Insurance 41-44
ARTICLE 28 - Right of First Refusal 44-46
ARTICLE 29 - Permitted Uses 46-48
ARTICLE 30 - Prohibited Uses 48-50
- Pornographic Use
- Number of Concurrent Events
- Outdoor Music
- Provisional Sound Abatement
ARTICLE 31 - Maintenance of the Leasehold Premises 50-51
ARTICLE 32 - Required Maintenance Work 51-52
ARTICLE 33 - Damage or Destruction 52-53
ARTICLE 34 - Total Damage 53
ARTICLE 35 - Alterations 53
ARTICLE 36 - Demolition 54-55
ARTICLE 37 - Signs 55
ARTICLE 38 - Parking 55-56
ARTICLE 39 - Electricity and Gas 56
ARTICLE 40 - Water 56-57 ARTICLE 41 - Garbage 57-59 ARTICLE 42 - Sewage Treatment 59 ARTICLE 43 - Waste 59-60 ARTICLE 44 - Fire Protection Equipment 60 ARTICLE 45 - Hazardous Materials 60-61 ARTICLE 46 - The Ponds 61-63 ARTICLE 47 - Compliance with the Americans with Disabilities Act 63 ARTICLE 48 - Alarm System 63 ARTICLE 49 - Access for Ingress and Egress 64 ARTICLE 50 - Dates Reserved for Landlord Use 64 ARTICLE 51 - Privacy and Forced Entry 64-65 ARTICLE 52 - Activity Restrictions 65-66 ARTICLE 53 - Government Restrictions 66 ARTICLE 54 - Unauthorized Vehicles 66-67 ARTICLE 55 - Unplated Vehicles 67 ARTICLE 56 - Right To Show and Inspect The Leasehold Premises 67-68 ARTICLE 57 - Surrender of Possession 68-69 ARTICLE 58 - Total Condemnation of the Leasehold Premises 69-71 ARTICLE 59 - Partial Condemnation of the Leasehold Premises 71-72 ARTICLE 60 - Indemnification 72-75 ARTICLE 61 - Quiet Enjoyment 75-76 ARTICLE 62 - Catering Exclusivity - Right of First Refusal 76 ARTICLE 63 - Landlord's Representations 76-77 ARTICLE 64 - Tenant's Representations 77-78 ARTICLE 65 - Assignment 78-81
ARTICLE 66 - Mortgage of the Leasehold Estate 81
ARTICLE 67 - Subordination 81-82
ARTICLE 68 - Attornment 82
ARTICLE 69 - Short Form Lease 82-83
ARTICLE 70 - Brokerage Commissions 83
ARTICLE 71 - Insolvency of Tenant 83-84
ARTICLE 72 - Late Charges, Event of Default and Termination 84-88
ARTICLE 73 - Holdover 88-89
ARTICLE 74 - Landlord's Self-Help Rights 89-90
ARTICLE 75 - Landlord and Tenant Certificates 90-92
ARTICLE 76 - Exercise of Remedies 92
ARTICLE 77 - Waivers 92-93
ARTICLE 78 - Lease Contingencies 93-94
(a) Zoning Swap
(b) Landlord Approvals
(c) Government Approvals
ARTICLE 79 - Government Approval Delays 94
ARTICLE 80 - 1993 Lease Renewal Term 95
ARTICLE 81 - Waiver of Subrogation 95-96
ARTICLE 82 - Notices 96-97
ARTICLE 83 - Interpretation 97
ARTICLE 84 - Consent and Approvals 98
ARTICLE 85 - Partial Invalidity 98
ARTICLE 86 - Prior Agreements and Discussions 98-99
ARTICLE 87 - Limited Liability 99-100
ARTICLE 88 - Exhibits 100
ARTICLE 89 - Captions and Table of Contents 100
ARTICLE 90 - Applicable Laws 100 ARTICLE 91 - Binding Effect 100 ARTICLE 92 - Amendments and Cancellation 101 ARTICLE 93 - No Third Party Beneficiaries 101 ARTICLE 94 - Separate Lease 101 ARTICLE 95 - Counterpart Execution 101 Exhibit A - Leasehold Premises and Access Area Exhibit B - Project Plans Exhibit C - Roof Installations Exhibit D - Trade Fixtures |
LEASE AGREEMENT
This Lease Agreement (the "Lease") dated November 11, 1996 is between FLOWERFIELD CELEBRATIONS, INC. ("FCI") as "Tenant", having its principal place of business at 80 Brown's River Road, Sayville, New York 11782 and GYRODYNE COMPANY OF AMERICA, INC. ("GCA") as "Landlord", having its principal place of business at 7 Flowerfield, Suite 28, Saint James, New York 11780. Landlord and Tenant are collectively referred to herein as the "Parties".
GCA is referred to in this Lease as "Landlord" unless and until it transfers its "Reversionary Estate". Each "person", corporate or individual, that owns the "Reversionary Estate" is referred to as "Landlord" during the period of such ownership.
FCI is the Tenant referred to in this Lease unless and until it assigns the Lease. After a valid assignment in accordance with the terms of this Lease, the assignee shall become the "Tenant" under this Lease and the assignor shall no longer be the "Tenant".
ARTICLE 1 DEFINITIONS
1. The term "Access Area" has the meaning ascribed to it in Article 3 of this Lease.
2. The term "Additional Rent" has the meaning ascribed to it in Articles 7, 32, 41 and 43, 52, 54, 55, 72, 73 and 74.
3. The Term "Annual Adjustment" has the meaning ascribed to it in Article 6 of this Lease.
4. The term "Applicable Laws" has the meaning ascribed to it in Article 17(c) of this Lease.
5. The term "Applicable Rate" has the meaning ascribed to it in Article 74 of this Lease.
6. The term "Butler Building" means a steel frame building with glass curtain walls located at the Leasehold Premises that houses a swimming pool and plant-life.
7. The term "Commencement Date" has the meaning ascribed to it in Article 12 of this Lease.
8. The term "Courtyard Building" means the structure on the Leasehold Premises that contains a kitchen, rest rooms, bar and banquet facilities.
9. The term "Day Camp" means Landlord's tenant using and occupying certain premises adjacent to the Leasehold Premises.
10. The term "Emergency" means a condition that causes or, if permitted to continue, is reasonably likely to cause injury or death to persons or significant damage to property.
11. The term "Event of Default" has the meaning ascribed to it in Article 72 of this Lease.
12. The term "Excusable Delays" has the meaning ascribed to it in Article 21 of this Lease.
13. The term "Expiration Date" means the date upon which this Lease expires, in accordance with Article 12.
14. The term "Flowerfield" means the entire 326 acre tract of real property located in St. James/Stony Brook, New York, owned by Landlord of which the Leasehold Premises are a part.
15. The term "Government Approvals" has the meaning ascribed to it in Article 20(b) of this Lease.
16. The term "Holiday" means July 4, labor Day, Mother's Day, Valentine's Day, Father's Day, New Year's Eve, Christmas Eve.
17. The term "Impositions" has the meaning ascribed to it in Article 7 of this Lease.
18. The term "Initial Term" has the meaning ascribed to it in Article 12 of this Lease.
19. The term "Leasehold Estate" means Tenant's leasehold interest in the Leasehold Premises under this Lease exclusive of the Reversionary Estate.
20. The term "Leasehold Mortgagee" shall be defined as any lender of Tenant its successors and assigns named in a mortgage of Tenant's Leasehold Estate hereunder securing Tenant's debt obligations to such lender with a mortgage or pledge of the Leasehold Estate.
21. The term "Leasehold Improvements" means the existing structures and improvements located at the Leasehold Premises (as defined herein), as of May 1, 1993, including the Courtyard Building, Butler Building, and the gazebo, but excluding the Tent (as defined herein), and also includes the New Building to be constructed on the Leasehold Premises that will replace the Tent.
22. The term "Leasehold Premises" includes the part of the Overall Premises (as defined herein) leased by Tenant including the Access Area, and has the meaning ascribed to it in Article 2 of this Lease.
23. The term "Lease Term" means the entire term that this Lease is in effect during the Initial Term and, if exercised by Tenant pursuant to the terms of this Lease, the Renewal Term (as defined herein).
24. The term "Parkside Avenue Gate" has the meaning ascribed to it in Article 30 of this Lease.
25. The term "Major Construction Activities" means any major new construction or alterations project, but does not include routine maintenance or minor construction activities.
26. The term "New Building" means a new permanent one story building, constructed of concrete walls, approximately 7,500 square feet in size that will be located at the Leasehold
Premises, on the site of, and will replace, the Tent. The New Building does not include Landlord's fee estate in the Leasehold Premises.
27. The term "1993 Lease" means the Lease between GYRODYNE COMPANY OF AMERICA, INC. as Landlord, and FLOWERFIELD CELEBRATIONS, INC. as Tenant, dated June 16, 1993, as such lease is amended from time to time.
28. The term "Overall Premises" has the meaning ascribed to it in Article 2 of this Lease.
29. The term "Permitted Lien" means mechanics liens and other construction and construction financing related liens of Tenant encumbering the New Building and this Lease.
30. The term "Project" means the renovation of the Butler Building and the construction of the New Building including the landscaping plans and any other ancillary improvements agreed to by the Parties therefor, to be performed by the Tenant pursuant to the terms of this Lease.
31. The term "Project Plans" means all drawings, plans and specifications for Project.
32. The term "Renewal Term" has the meaning ascribed to it in Article 12 of this Lease.
33. The term "Rent" has the meaning ascribed to it in Article 6 of this Lease.
34. The term "Rent Adjustment Date" shall mean May 1 of each year during the Lease.
35. The term "Reversionary Estate" means Landlord's interest in the fee estate of the Leasehold Premises and Access Area exclusive of Tenant's Leasehold Estate under the terms of this Lease.
36. The term "Scheduled Project Completion Date" means May 1, 1998.
37. The term "Site Investigations" has the meaning ascribed to it in Article 16 of this Lease.
38. The term "Ponds" has the meaning ascribed to it in Article 46 of this Lease.
39. The term "Tent" means the existing tent structure located on the Leasehold Premises pursuant to the 1993 Lease, which will be replaced by the New Building.
40. The term "Town" means the Town of Smithtown.
41. The term "Zoning Swap" means Landlord's pending application before the Town of Smithtown Town Board for a change of zoning district classification of part of the Leasehold Premises from residential zoning district classification (R-43) to light industrial zoning district classification (LI).
ARTICLE 2 THE PREMISES
The Landlord is the owner of Flowerfield which includes a certain piece of real property located in the Town of Smithtown, County of Suffolk and State of New York and more particularly described as part of a parcel currently designated as in Suffolk County Tax Map District 800 Section 40, Block 2, Lot 15 (the "Overall Premises"),. Landlord shall lease to Tenant a parcel within the Overall Premises with certain improvements erected thereon which is more particularly described on a map attached hereto as Exhibit "A", and made a part of this Lease in accordance with the terms of this Lease. The parcel is referred to herein as the "Leasehold Premises".
The Leasehold Premises are leased subject to:
a) The existing state of the title thereof as of the date of this
Lease.
b) Any state of facts which an accurate survey shows.
c) All zoning regulations, restrictions, rules and ordinances, building restrictions and other laws and regulations now in effect or hereafter adopted by any governmental authority having jurisdiction thereof, provided such regulations, restrictions, rules and ordinances do not unreasonably prohibit Tenant's use of the Premises as described herein.
d) Easements, covenants and restrictions, of record, if any, to the extent the same are in force and effect.
e) The right to maintain existing vaults, vault spaces, areas, pipes, water lines, conduit, sewerage lines, electric lines, fiber optic lines, the locations of which are set forth in Exhibit "A".
f) Condition and state of repair of the Leasehold Improvements as the same exist as of the Commencement Date; provided, however that Landlord will perform certain work in accordance with Article 19, of this Lease.
Other than as set forth in this Lease, Landlord makes no representation or warranty with respect to the condition of the Leasehold Premises or its fitness or availability for any particular use other than as permitted by the zoning thereof, and Landlord shall not be liable to Tenant for any patent or latent structural defect therein, of which Landlord has received no notice, on or before the Commencement Date hereof, from Tenant.
ARTICLE 3 LEASE OF THE PREMISES AND GRANT OF ACCESS
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the Leasehold Premises together with the right to use in common with Landlord's other tenants at Flowerfield, their
invitees, customers and employees, those Access Areas hereafter described on a map attached hereto as Exhibit "B" and made a part of this Lease.
Landlord grants to Tenant access over and through the Access Areas to the Leasehold Premises for ingress and egress, at all times during the Lease Term. At all times Tenant's right of access for ingress and egress will be permitted by use of a locked gate for which Tenant will be provided with keys for Tenant's use 7 days each week, 24 hours each day, on foot or by motor vehicle for access to the Leasehold Premises and to install and maintain utility wires, poles, cables, conduits, pipes and related equipment under, on and over the Leasehold Premises and Access Area, in accordance with this Article 3. Tenant will be responsible to close and lock all gates which it has unlocked and opened in order to access the Leasehold Premises. Tenant will cooperate with Landlord's security guard personnel when Tenant seeks access to the Leasehold Premises. In no event will Landlord be liable for its inability to provide access due to "an act of God", including but not limited to severe inclement weather.
In the event that Landlord and Landlord's agents, including any utility supplier, exclusive of any independent action taken thereby, providing service to the Leasehold Premises or any part of Flowerfield requires a temporary right of access not identified herein, Landlord and Tenant will not unreasonably withhold approval from each other for use of an additional temporary right of way to either party for such purposes; provided, however, that Landlord recognizes that, other than in an Emergency, the Leasehold Premises cannot be disturbed by Landlord or any public utility if such disturbance will affect the aesthetic features and quality of the Leasehold Premises during any function or event held at the Leasehold Premises.
The Access Areas established by this Lease shall not be construed to prohibit Tenant from using other Flowerfield access roads; provided the users thereof comply with Landlord's rules and regulations therefor. Nothing contained in this paragraph shall be construed to prohibit Landlord from permanently closing any entrance to Flowerfield, other than Tenant's Parkside Avenue Gate.
ARTICLE 4 USE AND OCCUPANCY OF THE LEASEHOLD PREMISES
Tenant shall use and occupy the Leasehold Premises and the Leasehold Improvements as a catering/banquet/conference facility and for no other purpose during the Lease term. Tenant is relieved of this obligation when it is unable to meet its obligation due to no fault of Tenant (e.g., labor strikes, acts of God).
ARTICLE 5 USE OF ACCESS AREA
Use and occupancy of the Leasehold Premises shall include the use of the Access Area in common with others, subject to the terms and conditions of this Lease and subject to reasonable rules and regulations applicable to all tenants of Flowerfield, for Access Area use as Landlord may prescribe from time to time.
ARTICLE 6 RENT
During the Lease Term, Tenant will pay Rent to the Landlord in currency of the United States of America, in the manner and at the address specified for Landlord on page 1 or at such other address as designated from time to time by Landlord. During the first two years of the Lease Term, Tenant shall pay an annual rent of $285,000.00 in monthly installments of $23,750.00.
On the second anniversary of the Commencement Date (May 1, 2000), and annually thereafter during the Lease Term, (the "Rent
Adjustment Date") the annual rent shall be adjusted (the "Annual Adjustment"). The Annual Adjustment shall be calculated as the amount (measured by and applied to the annual rent as a percentage) by which the Consumer Price Index for all Urban Consumers in the New York-Northern New Jersey-Long Island area as determined by the Bureau of Labor Statistics (the "CPI-U") increased or decreased over the preceding 12 month period ending the preceding March and every succeeding March thereafter. For example: Assuming a Commencement Date of May 1, 1998, if the CPI as of March 31, 2000 increased by 3% over the preceding 12 months, the annual rent as of May 1, 2000 would be increased to $293,550.00 payable in monthly installments of $24,462.50. The Annual Adjustment shall be subject to a cap of 7.5%; provided however, that as of the seventh anniversary of the Commencement Date (May 1, 2005), and every five years thereafter, the annual rent shall be adjusted for any one year period in which the increase, or decrease, as the case may be, in CPI-U exceeds 7.5%. In the event the Commencement Date is not the first day of the month, the rent for such month will be apportioned. In no event will the rent ever be adjusted for CPI-U increases or decreases during the first two years of the Lease Term.
Rent shall be paid without abatement, offset or deduction. Rent shall not abate due to fire or other catastrophe except as provided in Article 34.
Rent shall be paid to Landlord, without prior notice to Tenant, at its principal office at 7 Flowerfield - Suite 28, Saint James, New York 11780 in person or by mail or at any other address Landlord may designate by giving written notice to Tenant.
It is the purpose and intent of Landlord and Tenant that this Lease is a net Lease and the net rent shall, except as otherwise provided in this Lease, be absolutely net to Landlord.
All costs, expenses and obligations of every kind and nature whatsoever relating to the Leasehold Premises and the operating and maintenance thereof, except as otherwise provided in this Lease, which arise and become due during the term of this Lease are the Tenant's sole responsibility.
ARTICLE 7 ADDITIONAL RENT
In addition to the Rent, Tenant shall pay to Landlord certain sums of Additional Rent to the extent specifically set forth below to cover the Tenant's proportionate share of certain Landlord-incurred costs (the "Additional Rent"). The Additional Rent shall be paid without notice, abatement, deduction or setoff, except as otherwise set forth in this Lease. If Tenant fails to pay Additional Rent, Landlord shall have all of the rights and remedies contained in this Lease or provided by Applicable Law for the nonpayment of Rent. The items for which the Tenant shall pay Additional Rent include and are limited to the following:
(a) Real Estate Taxes and Assessments.
Tenant shall pay or cause to be paid all "Impositions" which are levied or assessed by the lawful taxing authorities against the land, buildings and all other improvements at the Leasehold Premises, including but not limited to Real Estate Taxes. "Impositions" shall mean the property taxes and assessments imposed upon the Leasehold Premises, including County, School, Town and Village Taxes and any and all other real estate taxes, assessments and governmental levies and charges, general and special, ordinary and extraordinary, unforeseen and foreseen, of any kind and nature whatsoever, including but not limited to assessments for public improvements or benefits against the land or building or improvements comprising the Leasehold Premises and shall also include any government imposed
interest and penalties on installment payments in connection with such Impositions. The Parties may mutually agree to contest such Impositions and/or negotiate with government authorities for a reduction of such Impositions.
If due to a future change in the method of taxation, (i) any franchise, income, profit or any other tax shall be levied against Landlord in substitution for, or in lieu of, any tax which would otherwise constitute a real estate tax, such income, franchise or profit tax shall be deemed to be an Imposition for the purposes of this Lease but shall be calculated as if the Leasehold Premises and Leasehold Improvements were the only buildings owned by the Landlord, and Tenant shall be responsible for paying such tax; and/or (ii) any real estate tax or other tax shall be levied against the Leasehold Premises in substitution for any tax which would otherwise constitute an income, franchise or profit tax assessable against Landlord, then Landlord shall be responsible for paying such tax.
If during the Lease Term the United States Government, the State of New York or any political subdivision thereof, or any other authority possessing jurisdiction and authority impose any tax, assessment, excise and or surcharge of any kind or nature upon or against or with respect to all or any part of the rent, as such term is defined by such authority, to be received by Landlord under this Lease, such tax, assessment, excise and/or surcharge shall be deemed to be included in the meaning of Impositions as defined herein; provided, however, that such taxes, assessments, excises and surcharges shall not be passed through to Tenant if such pass-through is prohibited by law.
In the event there are any special assessments against the Leasehold Premises, Landlord shall be deemed for purposes of this computation to elect to pay those assessments over the
longest period permitted by law and Tenant shall be only obligated to pay its pro rata share of those installments which are due and payable during the Lease Term.
Upon execution of the Lease, Landlord will apply to the Town of Smithtown Tax Assessor and the County of Suffolk, Real Property Tax Service Agency to have the Leasehold Premises designated as a separate tax parcel for purposes of real property tax assessment. Upon designation of the Leasehold Premises as a separate tax parcel and Landlord's receipt of a real property tax bill for the amount due for such Leasehold Premises, Landlord will bill Tenant for the real property taxes for the Leasehold Premises as Additional Rent.
Until such time as the County of Suffolk, Real Property Tax Service Agency shall designate the Leasehold Premises as a separate tax parcel, Tenant will pay before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, provided Landlord delivers the tax bills to Tenant on a timely basis, all of its pro rata share of property taxes, assessments and other governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen of any kind and nature whatsoever which at any time during this Lease are assessed, levied, confirmed, imposed upon or become due and payable or become a lien on the Leasehold Premises, or any part thereof or any appurtenance thereto. Tenant's pro rata share of such taxes is $19,158.61 per year. This amount represents the real property taxes attributed to the Leasehold Premises as determined by the Parties for the 1995-1996 tax year.
Tenant shall have the right to seek a reduction in the valuation of the Leasehold Premises assessed for tax purposes and to prosecute any corresponding action or proceeding even if such assessed valuation or valuations shall in whole or in part relate
and pertain to any period of time subsequent to the Expiration Date.
Landlord shall not be required to join in any proceeding referred to herein, but will reasonably cooperate with Tenant in its prosecution thereof. Landlord shall not ultimately be subjected to any liability for the payment of any costs or expenses in connection with any such proceeding or permit the same to be brought in its name. Tenant shall indemnify and save harmless Landlord from any such costs and expenses.
Tenant shall be responsible for and shall pay, before delinquency provided the corresponding bills are delivered on a timely basis, all other municipal, county, state or federal taxes assessed against its (a) leasehold interest, (b) right of occupancy or (c) personal property of any kind owned, installed or used by Tenant, at the Leasehold Premises.
(b) Operating Costs.
Landlord, at its cost and expense, will provide maintenance, landscaping and snow removal services for the exterior Leasehold Premises, Common Facilities and Access Areas.
Tenant shall pay to Landlord, as Additional Rent, its proportionate share of Landlord's Operating Costs as expressly set forth below. All costs shall be reasonable and usual taking into account such factors as a reasonable landlord would consider before making an expenditure.
Grounds maintenance and landscaping shall be performed at regular intervals as seasonal conditions require so as to enable the Tenant to operate the Leasehold Premises as a first class banquet/catering/conference facility. Snow shall be removed from the Access Area, Parking Lot and roads and driveways in and about the Leasehold Premises so as to permit continued parking capability and ingress and egress to and from the
Leasehold Premises by Tenant, its employees, contractors and patrons and their vendors. In the event that Landlord fails to provide these services, Tenant shall notify Landlord of such failure as well as the time frame in which Tenant requires such services to be performed to support its operations of the Leasehold Premises. If Landlord thereafter fails to perform such services, after reasonable notice, Tenant may arrange for and have such services performed, and deduct the actual cost incurred therefor by Tenant from the next rent payment.
Operating Costs shall mean the total annual costs and expenses incurred for security guard services for the Leasehold Premises and painting, maintenance, resurfacing and restriping of the parking lot at the Leasehold Premises pursuant to the following:
(i) Security Guard Services. Landlord shall provide security guard services for the Leasehold Premises on the following days and times:
Sunday 8:30 p.m. through Monday 12:30 a.m. Monday 8:30 p.m. through Tuesday 12:30 a.m. Tuesday 8:30 p.m. through Wednesday 12:30 a.m. Wednesday 8:30 p.m. through Thursday 12:30 a.m.
Thursday 8:30 p.m. through Friday 12:30 a.m. Friday 8:30 p.m. through Saturday 2:30 a.m. Saturday 8:30 p.m. through Sunday 2:30 a.m. |
The Security Guard Service may, on occasion, vary its hours for providing such service within one hour of the hours noted herein.
The Leasehold Premises will be equipped with a detector timer and each security guard on duty shall enter the Leasehold Premises at regular intervals and activate the detector timer. The security service shall respond to all emergencies at the Leasehold Premises and shall comply with Tenant's requests to
secure the Leasehold Premises and provide security assistance to Tenant's employees and invitees during the hours noted herein. The Security Guard Services cost is calculated as the function of what the square footage of the Leasehold Premises bears to the entire square footage of all Flowerfield improvements. Based on such costs and including the New Building, the estimated monthly cost to Tenant for security services will be $500.00 as of the date of this Lease.
(ii) Parking Lot. Landlord shall, at its sole cost and expense, resurface and restripe the parking lot. Landlord shall have two years from the Commencement Date, but will in no event no sooner than one year, install a minimum of a one inch coat of new asphalt on the entire parking lot and restripe same at no cost to the Tenant. Pending installation of such asphalt and the restriping, Landlord shall, at its cost and expense, maintain the parking lot. Thereafter, the cost of maintaining the parking lot other than snow removal shall be deemed an Operating Cost payable by Tenant as provided herein.
Landlord will be responsible for any damages caused to the Leasehold Premises and Access Areas in performing such maintenance, landscaping, snow removal and security service.
ARTICLE 8 PAYMENT
On or before April 1 of each year, Landlord shall advise Tenant in writing of Tenant's estimated proportionate share of the Operating Costs for the following 12 months of the Lease Term (May 1 through April 30), and Tenant shall pay such proportionate share of its Operating Costs as Additional Rent, in equal monthly installments, in advance, on the first day of each month, without any offset or deduction and without prior demand therefor. The Operating Costs shall be periodically revised by Landlord as actual additional or decreased costs are incurred, in equal
monthly installments, such new rates being applied to any months for which the rental shall have already been paid which are so affected by the costs referred to, as well as the unexpired months of the current 12 month billing period, the adjustment for the then expired months to be made at the payment of the next succeeding monthly rental, all subject to adjustment when the actual costs for such 12 month period are finally determined, as well as being subject to final adjustment as of the Expiration Date. The requirement for such adjustment shall survive the Expiration Date.
In the event of a partial payment or a payment on account, hereinafter for the purpose of this provision these terms are used interchangeably, Tenant shall not have the right to allocate payment(s) against specific charge(s) on an invoice(s) submitted by Landlord. Landlord and Tenant reaffirm Landlord's undiminished rights, with respect to partial payment(s) by Tenant, to recovery by Landlord for amounts invoiced and unremitted by Tenant; recovery of any penalties, as provided elsewhere herein, that may be assessed Tenant for underpayment; and recovery of the Leasehold Premises due to an Event of Default pursuant to this Lease.
In the event of a dispute between Landlord and Tenant for any invoiced amounts, other than those pertaining to base Rent, Tenant shall be required to remit payment in full as per the terms of the invoice, and if no payment terms are stated, within thirty (30) days of invoice, with a written protest detailing all allegations, financial calculations, and documentation for those amounts in dispute. In the event the parties are unable to resolve the dispute within sixty days of the remittance, both parties agree to submit to binding arbitration with respect to the disputed amount(s). Failure to remit disputed amounts shall be construed by Landlord as nonpayment and shall remain grounds
for a default declaration by Landlord. Subject to the provisions of Article 9 of this Lease, unless Tenant provides a written notice to Landlord of a billing dispute at the time of remittance of the disputed amount, Tenant waives all rights to the corresponding claim for the disputed amount.
ARTICLE 9 BOOKS AND RECORDS
For Tenant's protection, Landlord shall maintain books of account which shall be open to Tenant and its representatives to review and audit at reasonable times upon reasonable notice to Landlord for the limited purpose of enabling Tenant to confirm that such Operating Costs and taxes have in fact been paid or incurred.
Although Tenant is permitted to retain auditors to conduct such review and audit, Tenant is specifically prohibited from hiring auditors to review Landlord books and records that charge contingency fees based on their ability to find discrepancies in Operating Cost calculations.
ARTICLE 10 RENT SECURITY
So long as Tenant is liable for the performance of the terms, conditions, covenants and addenda of this Lease, Landlord waives any requirement under this Lease for rent security.
In the event of an assignment of this Lease, however, Landlord reserves the right to receive a Security Deposit from the assignee in an amount equal to one month's rent as of the time of such assignment (the "Security Deposit").
Under no circumstances, unless otherwise agreed to by the Landlord and the assignee, shall the Security Deposit be considered as an advance payment of the last month's rent under this Lease. The Security Deposit will be retained by Landlord until after assignee has vacated the Leasehold Premises at which
time Landlord shall inspect the Leasehold Premises to determine if any damage other than normal wear and tear has been caused by assignee. If no such damage exists, and assignee has satisfied all of its obligations to pay Rent and Additional Rent under this Lease, then the Security Deposit will be returned to assignee; otherwise, the Security Deposit will be applied to the actual cost of any repairs made by Landlord.
ARTICLE 11 PENALTY FOR NONPAYMENT OF LAST MONTH'S RENT
In the event Tenant fails to pay the last month's rent due under this Lease, Tenant agrees to pay liquidated damages in an amount equal to an additional month's rent plus the reasonable expenses necessarily incurred by Landlord to seek payment if such rent.
ARTICLE 12 LEASE TERM
(a) Initial Term. Subject to the provisions of Article 79, the Initial
Term shall begin on May 1, 1998 at 12:01 a.m. (the "Commencement Date") and
expire on the 33rd anniversary of the Commencement Date, May 1, 2031 at 12:01
a.m.
(b) Renewal Term. Tenant has an option to extend the Lease Term beginning at the expiration of the Initial Term and expiring on the 48th anniversary of the Commencement Date, May 1, 2046 at 12:01 a.m. Tenant shall notify Landlord in writing of Tenant's intent to exercise the Renewal Term option no less than 12 months or more than 48 months prior to the expiration of the Initial Term. Time is of the essence as to notification hereunder.
(c) Expiration Date. The Expiration Date of this Lease shall be the date this Lease expires, either after the expiration of the Initial Term or the Renewal Term, as the case may be; provided, however, that if this Lease is sooner canceled or terminated pursuant to the terms hereof, then the Expiration Date
shall be such date of cancellation or termination (the "Expiration Date").
ARTICLE 13 THE ARCHITECT
Tenant will retain a "Project Architect" with respect to the design and construction supervision of the Leasehold Improvements and any Major Construction Activities. The Project Architect must be reasonably satisfactory to Landlord. Tenant will inform Landlord of the name and principal place of business of the Project Architect.
If Tenant, for any reason, terminates the Project Architect, Tenant shall select a new Project Architect and Tenant shall give Landlord notice of such selection within five days thereof, which Project Architect must be reasonably satisfactory to Landlord. In addition, Tenant shall provide Landlord with the name and principal place of business of the new Project Architect.
The Project Architect will be directed by Tenant to reasonably cooperate with Landlord in the development of the Project Plans.
ARTICLE 14 FINANCING THE LEASEHOLD IMPROVEMENTS
Tenant has the right to finance the design and construction/renovation of the Leasehold Improvements through a third party lender. In the event that Tenant elects to secure such third party financing, Tenant has the right to pledge the New Building, exclusive of Landlord's fee estate in the Leasehold Premises, its Leasehold Estate and all of its furniture, fixtures and equipment at the Leasehold Premises as security for such third party financing, as is customarily required for same. Tenant shall have no right to otherwise mortgage the Leasehold Premises. Landlord shall reasonably cooperate with Tenant and
its third party lender(s) in effecting such financing; provided that Landlord is not required to subordinate its fee interest to the Tenant's mortgage. Tenant recognizes that any loan secured by the Leasehold Estate shall be subordinate to Landlord's right to mortgage the Leasehold Premises or any part thereof other than the New Building and Tenant's furniture, fixtures and equipment pursuant to this Article 14.
ARTICLE 15 CONDITION OF LEASEHOLD PREMISES AND FLOWERFIELD
Tenant acknowledges that it has thoroughly inspected the Leasehold Premises and accepts them in "as is" condition and Landlord makes absolutely no warranties or representations regarding the condition of the Leasehold Premises, except as otherwise contained in Article ___ of this Lease.
Landlord shall not be required to make any alterations, improvements or repairs to the Leasehold Premises except as otherwise set forth in Articles 7(b) and 19 of this Lease; provided, however, that Landlord will maintain the Access Area and the Flowerfield premises that are adjacent to or in plain view of the Leasehold Premises in good order and in good structural and aesthetic repair, comparable to their state of order/repair as of the date of this Lease. Landlord may increase, reduce, change the number, dimensions, levels or locations of walks, roadways, buildings and parking areas in any manner whatsoever on any part of Flowerfield exclusive of the Leasehold Premises, as Landlord shall deem proper, and in accordance with Applicable Laws, provided; however, that Flowerfield aesthetics which are in plain view from the Leasehold Premises are not materially impaired (e.g., the installation of a road running along Landlord's side of Pond 1 and/or Pond 2 would be improper and unacceptable).
ARTICLE 16 SITE INVESTIGATIONS
The Parties acknowledge that the Tenant presently occupies certain premises and enjoys other rights of use and access at the Overall Premises and Access Areas, pursuant to the 1993 Lease. The Tenant has the right to conduct testing and site investigations including taking measurements, conducting inspections, making boundary and topographical surveys, conducting geotechnical and other studies, test borings, drainage studies and other studies prior to the Commencement Date to determine whether the Leasehold Premises may be developed and used in a manner consistent with Tenant's business purposes (the "Site Investigations"). The right to conduct Site Investigations includes the right to gather information with respect to the availability of utilities for the Leasehold Improvements. The Site Investigations shall be conducted with due concern for existing activities being conducted on the adjacent premises and the adjacent improvements and shall not unreasonably interfere with such activities. Tenant shall take appropriate safety precautions to avoid the creation or maintenance of hazards from the Site Investigations.
ARTICLE 17 TITLE SEARCH AND SURVEY
(a) Title Search. Upon the Parties' execution of this Lease, Tenant, at its cost and expense, may order a title search, for the Overall Premises and Access Areas. Landlord, at its cost and expense, shall provide Tenant with a survey for the Leasehold Premises.
(b) Title Conditions. If the title search reveals any conditions, liens, easements, restrictions, encroachments, overlaps or other rights or grants which Tenant deems to be unsuitable or that will interfere with Tenant's use and enjoyment
of the Leasehold Premises, Tenant shall so advise Landlord within ten days of Tenant's receipt of the title report, and Landlord will have the option of removing such conditions, liens, easements, restrictions, encroachments, overlaps or other rights or grants, or either party may cancel the Lease with no further obligation of Landlord or Tenant; provided however, that if the cost of such removal is $100,000.00 or less, Landlord shall remove such conditions at its expense. If the cost of such removal exceeds $100,000.00, and Landlord elects not to remove such conditions, Tenant may elect to waive the condition or conditions that cause the removal cost to exceed $100,000.00 or to pay the amount that exceeds $100,000.00 to remove the conditions affecting title. If Tenant does not elect to waive such condition(s) or expend such sum, either party may cancel this Lease, and Landlord shall reimburse Tenant for the cost incurred by Tenant for the title search.
(c) Violations. If there are any violations adversely affecting Tenant's use or occupancy of the Leasehold Premises, including violations of any environmental, land use or other governmental laws, ordinances, rules, regulations, directives, policies or judicial determinations and Applicable Laws related to the Leasehold Premises, as of the date hereof caused by the Landlord or its other tenants, Landlord shall have the option to remove same or if Landlord elects not to remove same either party may cancel the Lease with no further obligation to the other party; provided however, that if the cost of such removal is $100,000.00 or less, Landlord shall remove such violations at its expense. If the cost of such removal exceeds $100,000.00, and Landlord elects not to remove such conditions, Tenant may elect to waive the violation or violations that cause the removal cost to exceed $100,000.00 or to pay the amount that exceeds $100,000.00 to remove such violations. If Tenant does not elect
to waive such violation(s) or expend such sum, either party may cancel this Lease, and Landlord shall reimburse Tenant for the cost incurred by Tenant for the title search. Landlord shall have an unconditional obligation to cure any violations adversely affecting Tenant's use or occupancy of the Leasehold Premises including any violations of any environmental, land use or other governmental laws, ordinances, rules, regulations, directives, policies or judicial determinations and Applicable Laws caused by Landlord which may arise after the date hereof.
ARTICLE 18 COMMON UTILITIES
Landlord has the right, subject to provisions herein, to require Tenant in its capacity as a tenant or as a prospective purchaser of the Leasehold Premises, as the case may be, to participate in Landlord's planned systems for providing certain utility services to tenants of the Flowerfield property. These services may include, but may not be limited to, water, electricity, cartage, sewerage treatment and fiber optic, cable or direct satellite television and other communications systems. Tenant will only be required to participate in such services if Tenant requires such service and if Landlord can provide reliability that is comparable to Tenant's existing suppliers and is able to provide such services at rates that are equal to or less than the rates being paid by or otherwise available to Tenant. Landlord's decision not to provide any such services to Tenant will not be a breach of this Lease.
ARTICLE 19 PREEXISTING CONDITIONS
Landlord, at its sole cost and expense, shall repair the leaking roof in the Courtyard Building and increase the drainage capacity of the storm drains in the driveway on the Leasehold Premises by installation of a 12 inch storm drain pipe from the
catch basin to Pond 1 to divert storm water runoff that collects on and floods the driveway. Landlord shall repair the roof of the Courtyard Building to prevent leaks within three months of the date hereof. Landlord shall increase the drainage capacity of the driveway in conjunction with Tenant's construction of the New Building.
The Landlord will be responsible for all environmental conditions at the Leasehold Premises existing prior to the 1993 Lease Term or otherwise caused by Landlord, including but not limited to, the abatement, storage, removal, encapsulation, etc. of asbestos and other hazardous, toxic and regulated materials at the Leasehold Premises as required by government agencies and applicable law except for those materials brought to the Leasehold Premises by the Tenant, its agents, contractors and employees or damage caused to the encapsulated asbestos by Tenant.
ARTICLE 20 THE PROJECT
(a) Generally. The Project is an essential component of this Lease, and subject to Landlord's review of the Project Plans, Landlord has a conceptual understanding of the Project and consents to Tenant's undertaking thereof. The Parties recognize that in order to meet the Scheduled Project Completion Date, the Parties will need to prioritize the processing of the Project Plans, applications for Government Approvals and other Project documents. The development of the Project will be governed, as between the Parties, pursuant to the terms of this Lease.
(b) Project Design. Promptly after the execution of this Lease, the Tenant will begin the process of designing the Project by commissioning its Project Architect to begin work, and preparing applications to the appropriate government authorities, including but not limited to, the Town Board, Planning Board,
Board of Zoning Appeals and Building Department of the Town; the Suffolk County Department of Health, and the New York State Department of Environmental Conservation for required site plan approval, variances and building permits and other required approvals (the "Government Approvals"). Tenant will submit the Project Plans to Landlord for its approval, prior to submitting same for Government Approvals. The Landlord may require Tenant to add certain infrastructure-type features (e.g., future interconnect capability for sewer system, fiber optic and electric power) to the Project Plans, provided such additions do not violate Applicable Laws or require a variance or special exception permit therefor, and Landlord pays the cost thereof. By approving the Project Plans or proposing any changes thereto, Landlord assumes no liability or responsibility related to the design, engineering or construction of the Project, except for any changes thereto required by Landlord, but specifically objected to by Tenant in writing, with notice to Landlord as provided in Article 82 of this Lease. Upon completion and approval, the Project Plans will be attached to the Lease as Exhibit "B". Landlord acknowledges that the Project Plans are Tenant's sole property, may include Tenant's trade secrets or other confidential information and will be provided to Landlord in confidence. Landlord will employ the same safeguards it uses to protect its own confidential information in its capacity as a Landlord to maintain the confidence of Tenant's confidential information.
(c) Approval Process. Landlord, upon receiving the Project Plans from Tenant, will have five working days to review and approve the Project Plans. Landlord's review of the Project Plans will be limited to the exterior design and finish of the New Building. If Landlord deems the Project Plans to be unacceptable within such five working day period, Landlord shall
provide written notification of same to the Tenant, along with the specific reasons for such disapproval and proposed corresponding revisions, which shall not violate Applicable Laws. Upon Tenant's receipt of such written notification, Tenant shall have ten working days to revise and resubmit the Project Plans to Landlord. Landlord shall then have three working days to review the revised Project Plans to determine if the deficiencies identified in Landlord's written notification have been corrected, and to notify Tenant in writing. If Landlord does not provide written notification to the Tenant in accordance with the foregoing, Landlord will be deemed to have approved the Project Plans, or the revised Project Plans, as the case may be.
(d) Government Approvals. Following Landlord's approval of the Project Plans in accordance with paragraph (c) above, Tenant shall submit the required applications for Government Approvals. Tenant will pay all application fees, legal fees or any other costs and expenses associated with such applications; provided, however, that Tenant shall not be responsible for reimbursing Landlord for any costs incurred by Landlord in connection with the Zoning Swap or for Landlord's review and approval of any Project Plans, including but not limited to, Landlord's costs for in-house or outside counsel, the cost or fees of any engineer, surveyor or architect, etc.
If any required Government Approval is not issued within a reasonable period of time, Tenant may dispute the failure of such issuance including the commencement of legal proceedings, the appeal of any adverse decision, and the defense of any favorable decisions, in Tenant's own name and at its sole cost and expense. Following the issuance of any Government Approval, if any person commences legal proceedings to contest such issuance, Tenant may defend such proceedings, appeal adverse decisions, and defend any appeal of any favorable decisions, in Tenant's own name and at
its sole cost and expense. Landlord shall reasonably cooperate, and when required by a government agency, join in with Tenant, without delay, in Tenant's applications for Government Approvals, provided Landlord incurs no costs other than as set forth in this Article 20(d).
(e) Building Permit. If as a result of Tenant's building permit application, the Town requires material changes to the exterior design or finish of the New Building as set forth in the Project Plans (e.g., building size or orientation, set back requirements, etc.), Tenant will resubmit the Project Plans with the Town mandated changes, to the Landlord for review. The Landlord will have three working days to review and approve same. In the event that Landlord disapproves the Project Plans as revised by the Town, the Parties will attempt to resolve the Landlord's concerns with Town officials. Upon the parties' determination that the differences between the Landlord and the Town cannot be resolved, the Landlord, within five working days, shall decide to either accept the Town's changes to the Project Plans, or cancel this Lease; provided, however, that the 1993 Lease will continue in accordance with its terms, subject to the amended notification and term provisions set forth herein.
(f) Landlord-Caused Delays. If Tenant's applications for Government Approvals are denied or delayed due to any violations or other contingencies caused by the acts or omissions of Landlord or its employee, agents or other tenants, the obligation to pay rent either under this Lease or the 1993 Lease shall be abated pending Landlord's removal of such violations or contingencies. If Landlord elects not to remove such violations or contingencies, Landlord or Tenant may cancel this Lease in accordance with Article 17, and the 1993 Lease will continue in accordance with its terms, subject to the amended notification and term provisions as set forth herein.
ARTICLE 21 CONSTRUCTION COMMENCEMENT
As soon as practicable after, but not before, obtaining a Building Permit, Tenant shall begin construction of the Project, and shall proceed diligently, with same, subject to excusable delays, including delays caused by an Act of God, strike, lockout, organized labor slow down, accident, civil commotion, war, fire, catastrophe, legal requirement, severe inclement weather, shortage of materials due to government action, or other causes beyond the reasonable control of the Tenant ("Excusable Delays"). It is acknowledged by the Parties that under the current schedule, the New Building will be constructed during the winter months, therefore, severe weather-caused construction delays could occur. However, in no event will Tenant's failure to complete construction by May 1, 1998 result in an abatement of rent unless such failure is due to Landlord-caused delays.
Construction shall be deemed to be substantially completed when the Project Architect issues a certificate that, to the best of its knowledge, information and belief, and on the basis of observations, the construction work has been substantially completed and upon issuance of a temporary Certificate of Occupancy by the Town. Upon substantial completion of the New Building, Tenant will obtain a temporary Certificate of Occupancy therefor and a Certificate of Occupancy in accordance with Town requirements.
ARTICLE 22 EXCAVATION AND SHORING
If any excavation shall be made by Tenant upon property or streets adjacent to or nearby the Leasehold Premises, Tenant shall, at Tenant's expense, do or cause to be done all such work as may be necessary to preserve any walls or structures of the improvements on the Leasehold Premises, Overall Premises and
Flowerfield from injury or damages and to support the same by proper foundations. To the extent possible, such excavation projects shall be scheduled so as to minimize the inconvenience to the Parties and interference with the Parties' respective business activities.
Except for excavation work performed by Landlord, Tenant shall not, by reason of any such excavation work, have any claim against Landlord for damages or indemnity or for suspension, diminution, abatement or reduction of rent under this Lease.
ARTICLE 23 QUALITY OF CONSTRUCTION AND FIXTURES
Tenant shall cause all of its construction contractors to take reasonable steps to avoid production of excessive dust, rubble or odors. Tenant shall promptly repair or replace any damage to the Access Area, Overall Premises or any part of Flowerfield caused by the construction work.
The construction work shall be performed in accordance with Landlord's reasonable approval conditions, Applicable Laws, and Governmental Approvals, and in a good and workmanlike manner and in accordance with generally accepted construction practices.
Tenant shall equip the Leasehold Premises with all trade equipment, lighting fixtures, furnishings, plumbing fixtures, floor coverings and any other equipment necessary for the proper operation of Tenant's business. All attached fixtures installed by Tenant shall be new or completely reconditioned.
Any alterations, additions, improvements and fixtures installed or paid for by Tenant other than the New Building and unattached movable trade fixtures shall, upon installation of same, become property of Landlord; provided, however, that Tenant has the right to replace any such trade fixtures during the Lease Term.
Landlord shall cause its contractors and other tenants at Flowerfield to take reasonable steps to; (a) avoid production of excessive dust, rubble or odors that carry over to the Leasehold Premises or (b) cause unsightly conditions that are in plain view of the Leasehold Premises during Tenant's functions and events.
ARTICLE 24 INSPECTION RIGHTS
Landlord shall have the right, upon reasonable prior notice to Tenant, to enter the Leasehold Premises to inspect it at reasonable times during the course of the Project construction work; provided, however, that Landlord shall not unreasonably interfere with the business activities conducted at the Leasehold Premises or the progress of the construction work. Upon such entry, Landlord shall comply with the direction of Tenant and its construction contractors and all of Tenant's construction site rules. Tenant shall make an employee available to accompany Landlord for inspection after reasonable notice.
Any entry or other activity by Landlord at the Leasehold Premises shall be at Landlord's own risk, except for gross negligence and willful misconduct of Tenant, its agents, or employees causing death or bodily injury to Landlord.
ARTICLE 25 CONSTRUCTION LIENS AND COMPLETION
Should Landlord consent to any Tenant proposed alteration, addition, improvement or other change to the Leasehold Premises, Tenant shall promptly commence same and thereafter diligently pursue same to completion in good and workmanlike manner in accordance with plans, specifications and other information given to Landlord and requirements of Landlord. Tenant shall promptly pay all contractors, subcontractors, laborers and material suppliers. Landlord may post and record such notices of non-responsibility and take such other action as is required to
preclude any contractor, subcontractor, laborer or material supplier from asserting a lien against Landlord or its interest in the Leasehold Premises.
Tenant shall discharge all liens by bond or otherwise arising from the construction of the New Building or renovation of the Butler Building or any Tenant work or improvements within 30 days of Tenant's receipt of any notice of such liens being placed on the Leasehold Premises or any part thereof. If Landlord receives notice of such lien, Tenant shall discharge such lien within 30 days of Landlord informing Tenant, in writing, of such lien.
Nothing contained herein shall imply any agreement or consent by Landlord to subject Landlord's fee estate to liability under any mechanic's or other lien provided; however, that Tenant shall not be precluded from challenging or defending any lien filed or claim asserted by any of its contractors, subcontractors, laborers or material suppliers in connection with any Major Construction Activity; provided that Tenant has posted a bond with Landlord or its lender in the amount of the lien.
ARTICLE 26 EQUIPMENT INSTALLATIONS ON ROOF
Tenant shall not install microwave transmitting devices (other than cooking equipment) or other roof top equipment on the Leasehold Premises, without Landlord's consent which will not be unreasonably withheld or delayed. Landlord requirements for roof top equipment will be based on good engineering practices and aesthetic considerations related to the Leasehold Premises consistent with the Parties' objectives to maintain the aesthetic quality of Flowerfield.
ARTICLE 27 INSURANCE
At the commencement of the construction of the Project at the Leasehold
Premises and at all times during the Lease Term, Tenant shall keep in full force
and effect, and maintain at its sole cost and expense insurance issued by an
insurance company licensed to do business in the State of New York and rated by
A.M. Best Company as having a policyholder's rating of "AIX" or better. If A.M.
Best Company changes its rating system, comparable ratings shall be substituted
to the extent feasible.
Insurance shall be carried in favor of Landlord and any designees of Landlord to the extent reasonably required by any lenders of Landlord as their interests may appear, in accordance with the terms hereof. Insurance required to be carried by Tenant may be included in general coverage under policies which also include the coverage of other property in which Tenant or its affiliates have an insurable interest.
A certificate for each insurance policy required to be carried by Tenant shall be delivered to Landlord as of the Commencement Date of this Lease and all renewal certificates shall be promptly delivered to Landlord throughout the Lease Term; provided, however that certificates for builder's risk and workers' compensation insurance be delivered to Landlord prior to the Commencement of any Major Construction Activities. Each insurance policy and certificate shall provide, in effect, that the policy will not be canceled, reduced in amount, or modified by the insurer until at least 30 days after insurer provides written notice to Landlord by certified mail, return receipt requested.
Each insurance policy and certificate shall further provide that the policy will be renewed and further renewed unless the insurer shall give Landlord at least 30 days notice in writing by certified mail, return receipt requested, of insurer's unwillingness to renew; provided however, that Tenant has the
right, consistent with its business practices, to change insurance carriers, provided that such carriers comply with the requirements of this Article 27, and no lapse in coverage is allowed to occur.
Tenant shall carry builder's risk insurance on a completed value basis for the New Building. Tenant's obligation to carry builder's risk insurance shall commence when the construction work begins and shall end on substantial completion of the construction work as determined by the issuance of a temporary Certificate of Occupancy.
Tenant shall maintain "All Risk" insurance with respect to the Leasehold Premises, the Access Area and the Leasehold Improvements. An "All Risk" policy is an insurance policy which insures against "all direct risks" except for specified exclusions. Tenant's "All Risk" policy must include "Extended Coverage for Vandalism and Malicious Mischief" and "Difference in Conditions". In addition, such policy must include "Increased Cost of Construction", and "Demolition Costs Which May Be Necessary to Comply with Building Laws".
Tenant shall also maintain Comprehensive General Liability Insurance with respect to the Leasehold Premises, the Access Area and the Leasehold Improvements.
Tenant's obligation to maintain Comprehensive General Liability Insurance with respect to the Leasehold Premises under this Lease shall commence upon the expiration of the 1993 Lease and the Commencement Date of this Lease and shall cease as of the Expiration Date.
The Comprehensive General Liability insurance policy shall provide coverage for contractual liability, severability of interest and cross liability. The coverage limits shall be at least $1,000,000.00 for
each occurrence with respect to bodily injury and wrongful death coverage and at least $1,000,000.00 for each occurrence with respect to property damage and excess umbrella coverage of $5,000,000.00.
Landlord may require coverage limits to be reviewed at five year intervals to determine if such limits reasonably comport with customary coverage limits for property of similar size, use and location. If the Parties determine the coverage limits are less than customary limits, the coverage limits shall be adjusted to the customary limits.
Tenant shall also carry, at its sole cost and expense, insurance against loss or damage by fire or by water and any other kind of property insurance with respect to the Leasehold Improvements that is prudent under the circumstances.
The "All-Risk" insurance will insure Tenant's and Landlord's property at the Leasehold Premises for the full replacement cost of any property damaged or destroyed. Such replacement cost shall be determined from time to time, but not more frequently than once in any 48 consecutive calendar months, at the cost and request of Landlord, by an appraiser, architect or contractor who shall be mutually and reasonably acceptable to Landlord and Tenant.
Tenant shall carry rental value insurance against loss of rental or other income derived from Tenant's operation due to risks incurred by loss or damage by fire.
Tenant shall maintain rent insurance with respect to each peril insured herein.
Prior to commencing any construction work by or for Tenant, Tenant shall also furnish Landlord with certificates evidencing the existence of Worker's Compensation Insurance in accordance with the laws of the State of New York and covering all persons employed for such work and with respect to whom death or bodily injury claims could be asserted against Landlord, Tenant or the Leasehold Premises.
ARTICLE 28 RIGHT OF FIRST REFUSAL
If at any time during the Lease Term, Landlord receives a third party offer to purchase the Leasehold Premises as a separate parcel of real property, or if Landlord decides to offer all or a portion of Flowerfield for sale of which the Leasehold Premises form a part and the Leasehold Premises can be separately sold without reducing the value of such sale to Landlord, the Landlord shall first offer to sell the Leasehold Premises to Tenant, which shall have a right of first refusal with respect to the sale of the Leasehold Premises. The right of first refusal will be subject to Landlord's review and approval, reasonably exercised, of Tenant's financial condition at the time Tenant elects to exercise the right of first refusal to purchase the Leasehold Premises.
In the event Tenant exercises its option to purchase the Leasehold Premises, this Lease shall be canceled as of the date title to the Leasehold Premises is conveyed to Tenant. Tenant may elect to contract with Landlord to continue to maintain and landscape the premises after title to the Leasehold Premises is conveyed to Tenant.
In the event of a transfer of title of the Leasehold Premises to Tenant, construction will be further governed by any restrictive covenants on the deed transferring title to Tenant.
In the event that Landlord receives a bona fide offer from a prospective third party purchaser for the Leasehold Premises, or for all or a portion of Flowerfield of which the Leasehold Premises forms a part, Landlord shall present the salient terms thereof in the form of an offer sheet, signed by such third party prospective purchaser. Tenant shall have 30 days from the date of receipt of the offer sheet, in which to agree to purchase the Leasehold Premises, or all or a portion of Flowerfield of which
the Leasehold Premises form a part, on the same terms and conditions as the prospective purchaser.
Within such 30 day period, Tenant may request that, in the event that Landlord receives a bona fide offer for all or a portion of Flowerfield that includes the Leasehold Premises and other real property at Flowerfield, Landlord shall make a good faith effort to effect an offer of the Leasehold Premises for sale to the Tenant and sell off the remaining Flowerfield property or a portion thereof separately to such offeror, provided such combined sale for the properties will not reduce the value of such sale to Landlord to an amount below the amount contained in the third party's offer sheet.
In the event that such offeror declines to purchase such property pursuant to such terms, Landlord may proceed with the sale of the affected property to such offeror, without further obligation to Tenant under this Article 28; provided, however, that Tenant's rights under this Article 28 shall survive any conveyances of Flowerfield property which includes the Leasehold Premises to any party other than the Tenant. Nothing herein shall be construed to limit Landlord's ability to convey title to a Landlord subsidiary.
ARTICLE 29 PERMITTED USES
Tenant may use the Leasehold Premises to construct, operate, maintain, repair and replace, at its own expense, a catering/ banquet/conference facility, consisting of the Leasehold Improvements existing on the Leasehold Premises as of the date of this Lease (i.e., Butler Building, Courtyard Building, gazebo, awnings, fencing, decking, etc.) as well as the New Building which will replace the Tent, and other accessory improvements necessary or desirable for Tenant's successful and secure operation of the Leasehold Premises. All portions of the New
Building or other property or improvements attached to or otherwise brought onto the Leasehold Premises by Tenant shall, at all times and for all purposes related to this Lease, be trade fixtures or other personal property of Tenant, except that the New Building will become the property of the Landlord as of the Expiration Date, and the renovations to the Butler Building will become property of the Landlord upon installation thereof. Tenant may remove all other fixtures at any time during the Lease Term. In no event is Tenant permitted to remove fixtures if removal of such fixtures will compromise the structural integrity of the Leasehold Improvements.
Landlord acknowledges that in order for Tenant to operate the Leasehold Improvements, installation of utility lines and equipment may be required to access utility services. Tenant has the right to make all reasonable, appropriate alterations to the Leasehold Premises and Access Areas in order to enable Tenant to secure utility services according to Tenant's Project plans, which will be reviewed as provided in this Lease.
Tenant acknowledges that in order for Landlord to improve adjacent premises, installation of utility lines may be required on the Leasehold Premises and Access Areas to access utility services. Landlord has the right to make all reasonable, appropriate alterations to the Leasehold Premises and Access Areas in order to secure utility services for adjacent premises; provided, however, that such services for adjacent premises are separately metered, do not interfere with or compromise Tenant's service reliability and do not impair the Leasehold Premises aesthetic qualities or operations during a Tenant function or event.
All such utility lines shall be run in conduit underground. In the event that a footing is installed, Tenant agrees to install two, two inch PVC sleeves in the footing, suitable for
electrical and telecommunications transmission lines dedicated for Landlord's exclusive use. Such installation shall be similar in nature and position to Tenant's dedicated PVC installations.
Tenant shall not use the Leasehold Premises for any purpose other than as permitted by the terms of this Lease. Furthermore, Tenant shall not use the Leasehold Premises or occupy or permit the Leasehold Premises to be used or occupied in a manner that would violate Applicable Laws, Certificate of Occupancy, any municipal permit, special exception, license or similar approval affecting the Leasehold Premises or make void any insurance then in force with respect thereto.
ARTICLE 30 PROHIBITED USES
(a) Pornographic Use.
The Parties agree that the value of the Leasehold Premises and the respective reputations of the Parties will be seriously injured if any portion of Flowerfield, including the Leasehold Premises, are used for any obscene or pornographic purposes or any sort of commercial sex establishment. The Parties agree that they will not bring or permit any obscene or pornographic material at Flowerfield, and shall not permit or conduct any obscene, nude, or seminude live performances on the premises, nor permit use of the premises for nude modeling, or as a sex club of any sort, or as a "massage parlor". Tenant will not permit any of these uses by any sublessee or assignee of the Leasehold Premises. This Article 30(a) shall directly bind any successors in interest to the Parties. The Parties agree that if at any time either party violates any of the provisions of this Article 30(a), such violation shall be deemed a material breach of the terms of this Lease and objectionable conduct. Pornographic material is defined for purposes of this Article 30(a) as any written or pictorial matter with prurient appeal or any objects
of instrument that are primarily concerned with lewd or prurient sexual activity. Obscene material is defined here as it is in New York State Penal law ss.235.00.
(b) Licensees and Concessionaires.
Subject to Article 65 of this Lease, Tenant shall not permit any business to be operated in or from the Leasehold Premises by any concessionaire or licensee without the prior written consent of Landlord.
(c) Number of Concurrent Events - Tenant's principal banquet business is weddings and other formal events. Tenant will schedule only one such formal event at a time at the Leasehold Premises, with the exception that during the winter holiday season, to accommodate its corporate clients Tenant may, on occasion and at the same time, schedule no more than two holiday parties to be held concurrently at the Leasehold Premises.
(d) Outdoor Music - Tenant will not permit the outdoor playing of amplified music at the Leasehold Premises, except during outdoor ceremonies when electronic keyboard equipment may be used.
(e) Provisional Sound Abatement - The Parties acknowledge that one principal purpose for entering into this Lease and replacing the Tent with the New Building is to address the noise concerns expressed by certain residential neighbors of Flowerfield. In order to address these concerns pending the replacement of the Tent with the New Building the following measures will be employed:
(i) During each catered event, Tenant will have an employee assigned to answer the telephone at (516) 862-0100 and to take sound readings at the Parkside Avenue Gate at the corner of Parkside Avenue and Mills Pond Road (the "Parkside Avenue Gate").
(ii) After receiving a call from a resident, Tenant will take a decibel reading at the Parkside Avenue Gate within ten minutes of receiving the resident's call.
(iii) If the volume of sound is determined to be excessive (such sound level to be reasonably established by the Parties consistent with the relevant provisions of the Code of the Town of Smithtown), Tenant will promptly take steps to lower the volume of music and/or adjust the bass and treble on the amplification system upon completion of the piece of music being performed.
(iv) Tenant will cooperate with any resident who requests to verify the decibel reading at the Parkside Avenue Gate.
The provision of this Article 30(e) will terminate upon completion of construction of the New Building.
ARTICLE 31 MAINTENANCE OF THE LEASEHOLD PREMISES
Other than as set forth in this Lease, Tenant shall, at its own cost and expense, maintain the Leasehold Premises and the fixtures and equipment therein and appurtenances thereto as first class improvements for their age and Tenant's use thereof. Except as otherwise set forth in Articles 7(b) and 19 of this Lease, Landlord shall not be required to make any repairs or improvements of any kind upon the Leasehold Improvements.
Tenant agrees to maintain and keep in good condition the electrical, plumbing and heating, ventilation and air conditioning equipment in the Leasehold Premises.
Pursuant to Applicable Laws, the Leasehold Premises may be subject to periodic, unannounced inspections by official health, building, fire code and environmental inspectors having authority to cite any violations which have a detrimental effect on the
Parties or the business operations of other tenants, Landlord's neighbors and fire insurance premium rates. Upon reasonable notice, Landlord may make inspections of the Leasehold Improvements and request Tenant to take any required corrective action. Failure to take such action will constitute an Event of Default.
If Tenant refuses or neglects to make repairs or otherwise fails to take corrective action after receiving a notice of violation or summons or warning from any governmental agency having jurisdiction over the Leasehold Premises for a condition for which Tenant was responsible for causing or expressly assumed under this Lease, Tenant will be deemed to have caused an Event of Default.
ARTICLE 32 REQUIRED MAINTENANCE WORK
Tenant shall keep the Leasehold Improvements, including but not limited to, the structural and load bearing elements, the exterior walls, roofs of the Leasehold Improvements and the fixtures and equipment therein in good order and repair.
If upon prior reasonable written notice from Landlord, Tenant (a) refuses or neglects to make repairs or otherwise fails to perform any of Tenant's work or maintenance obligations hereunder, or (b) repairs are necessitated by reason of Tenant's negligent acts or omissions, Landlord shall have the right, but shall not be obligated, to make such repairs or perform on behalf of and for the account of Tenant without liability to Tenant for any loss or damage that may accrue to Tenant's merchandise, fixtures or other property or to Tenant's business by reason thereof. In such event, Tenant shall compensate Landlord for its costs incurred for such work as Additional Rent promptly upon receipt of a bill therefor.
Tenant shall comply with all Applicable Laws and insurance requirements applicable to the Leasehold Improvements.
ARTICLE 33 DAMAGE OR DESTRUCTION
Any partial damage or destruction of the Leasehold Premises due to fire or other catastrophe shall be repaired or replaced within a reasonable time after the damage is incurred and all claims are settled with the insurance companies providing coverage therefor.
Tenant's obligation to repair, replace and comply with all Applicable Laws extends to extraordinary, unforeseen and structural repairs and replacements as well as to ordinary, foreseen and nonstructural repairs and replacements.
If the Leasehold Premises shall be partially damaged by any casualty insurable under Tenant's insurance policy, Tenant shall, upon receipt of insurance proceeds, repair the Leasehold Premises to the condition and state in which said Leasehold Premises were when originally delivered to Tenant but only to the extent of the net insurance award made available for the purposes under the insurance policies set forth in Article 27 of such repair and this Lease shall continue in full force and effect. Tenant shall restore all Leasehold Improvements at Tenant's cost and expense, or to the extent insured with corresponding insurance proceeds.
ARTICLE 34 TOTAL DAMAGE
If the Leasehold Premises (a) by reason of substantial damage or destruction is rendered wholly untenantable, or (b) is damaged in whole or in substantial part during the last three years of the Lease Term, or (c) if any or all of the buildings or other areas of the Leasehold Premises are damaged, whether or not the buildings are damaged, to such an extent that the catering/banquet and conference facility cannot, in the
reasonable judgment of Landlord be operated as such, Landlord may elect to have Tenant repair the damage or Landlord may cancel this Lease by notice of cancellation within 180 days after such event and thereupon this Lease shall expire and Tenant shall vacate and surrender the Leasehold Premises to Landlord. Tenant's liability for rent upon the termination of the Lease in this event shall cease as of the day following the event or damage.
ARTICLE 35 ALTERATIONS
Tenant will make no material alteration to the Leasehold Premises without the written approval of Landlord. In no event will an alteration be made by Tenant which impairs the safety or structural integrity of the Leasehold Improvements or which violates Applicable Laws.
A material alteration includes any significant addition or improvement to the Leasehold Premises or Leasehold Improvements. All material alterations will be made in accordance with the same procedures for the Project set forth in Article 20.
ARTICLE 36 DEMOLITION
Tenant shall only be permitted to demolish or remove parts of the Leasehold Improvements in accordance with Article 20, this Article 36 and with the written approval of Landlord.
Unless required by a government authority or Applicable Law, Tenant shall not demolish Leasehold Improvements, unless such Leasehold Improvements will be replaced by a structure the net cost of which shall be at least the value of the structure demolished and unless and until Landlord has approved of the plans and specifications for such replacement structure consistent with the procedures contained in Article 20 of this Lease.
Demolition shall only be conducted in accordance with Applicable Laws and insurance requirements and if the safety and the structural integrity of all remaining structures on the Leasehold Premises and adjacent premises will not be impaired thereby.
Within a reasonable time after demolition or removal and after issuance of all Governmental Approvals and the Building Permit pursuant to the same procedures outlined in Article 20, Tenant shall construct or install replacement Leasehold Improvements which cost at least as much as the reasonable estimated replacement cost of the demolished or removed Leasehold Improvements.
Notwithstanding the foregoing, the Parties acknowledge that the Tent will be dismantled in favor of the New Building and that some demolition work will be required for Butler Building renovations. Landlord's review of the plans and specifications therefor will be done in accordance with Article 20.
As outlined above, all construction shall be performed in accordance with all Applicable Laws and Government Approvals and in a good and workmanlike manner and in accordance with generally accepted construction practices.
Construction of any replacement or additional Leasehold Improvements shall be deemed to be substantially completed upon the issuance of a certificate of substantial completion by a licensed architect, selected by Tenant and reasonably satisfactory to Landlord and upon issuance of a temporary Certificate of Occupancy.
ARTICLE 37 SIGNS
Tenant signs identifying the Leasehold Premises shall not exceed four square feet of total area, and Tenant must submit a sketch or photo of the proposed sign for Landlord approval
indicating the size, color and design of such sign. Sign installation at the Leasehold Premises will be in accordance with Applicable Laws. Any Landlord approved sign shall be maintained by Tenant in good condition and repair.
Other than the foregoing, Tenant shall not place or cause to be placed any sign upon or outside the Leasehold Premises. Landlord may remove such nonconforming signs. Tenant hereby waives any and all claims against Landlord for removal of any nonconforming signs except for Landlord's gross negligence or willful misconduct.
ARTICLE 38 PARKING
Tenant will only have the use of parking spaces in the parking lot which is part of the Leasehold Premises. The location of the parking lot is shown on Exhibit "A" attached hereto. Maintenance of parking lot is the sole responsibility of the Landlord or Landlord's designee. Tenant will be charged by Landlord for maintenance of the parking lot in accordance with Article 7 except that Tenant will have the option to perform major maintenance activities by landlord or an agent of Tenant.
In the event that the parking lot is filled to capacity, Tenant may avail itself, upon prior notice to Landlord, of the parking facilities adjacent to Landlord's building known as "7 Flowerfield" when such parking facilities are available.
ARTICLE 39 ELECTRICITY AND GAS
The electric power and gas service for the Leasehold Premises will be provided by a metered service of the Long Island Lighting Company (LILCO), its successor or any other electric or gas purveyors authorized to provide such service. Tenant shall at its sole cost and expense install and immediately register any electric and gas meters upon construction of the Leasehold
Improvements. The meters will be registered in the name of Tenant. Tenant will pay any and all charges related to the metered service directly to the applicable purveyors.
All electrical and gas equipment installed on the Leasehold Premises shall conform to industry standards and will be consistent with Tenant's use of the Leasehold Premises as stated in this Lease.
ARTICLE 40 WATER
The water for the Leasehold Premises will be provided by a metered water service of the Saint James Water District or its successor. Tenant, at its sole cost and expense, shall install and immediately register any water meter upon construction of the Leasehold Improvements. The water meter will be registered in the name of Tenant. Tenant will also pay the reduced pressure zone (RPZ) valve charge attributable to the fire sprinkler system for the Leasehold Premises.
ARTICLE 41 GARBAGE
At Tenant's sole cost and expense, Tenant will handle and dispose of all rubbish, debris, garbage, and waste from Tenant's operation in accordance with regulations established by Landlord and those of all governmental agencies having jurisdiction and not permit the accumulation, unless in concealed metal containers provided by a garbage carter licensed to do business in the Town of Smithtown, and shall not burn any garbage in, on, or about any part of Flowerfield.
All Tenant garbage must be placed in plastic bags or suitable substitute, securely tied at the top and placed in dumpsters located on the Leasehold Premises.
Cardboard must be separated from garbage and placed in special containers marked "Cardboard Only". All cardboard boxes
must be flattened before being placed into the designated receptacles.
Landlord reserves the right to require Tenant to obtain additional garbage containers for Tenant's exclusive use if Landlord reasonably determines that Tenant needs additional garbage collection capacity.
In addition, Tenant shall not permit debris, waste materials, or garbage to collect in front of, around, along side or in back of the Leasehold Premises. Tenant shall at all times keep the main entrance to the Leasehold Premises clean and orderly. If Tenant does not comply with the requirements herein, Landlord shall give Tenant reasonable prior written notice of such noncompliance and thereafter may clean the affected area and submit an invoice to Tenant for the reasonable cost incurred by Landlord for such cleaning, which Tenant shall remit to Landlord as Additional Rent.
Industrial waste, including but not limited to, metal chips, oils, solvents, chemicals, sheet metal, wood crates (excluding produce crates), and pallets may not be placed in dumpsters. Such industrial waste must be disposed of as regulated by the State of New York Department of Environmental Conservation. Landlord has the right to demand and receive copies of bills of conveyance to a government licensed carting company employed by Tenant for disposal of hazardous waste used by Tenant at Flowerfield.
At Landlord's sole cost and expense, Landlord shall keep the Access Areas and all other portions of Flowerfield which are visible from the Access Areas and Leasehold Premises free and clear of all rubbish, garbage and waste. If Landlord does not comply with these requirements, Tenant shall give Landlord reasonable prior written notice of such noncompliance and thereafter, Tenant may clean the affected area and submit an
invoice to Landlord for the reasonable cost incurred by Tenant for such cleaning. If Landlord does not remit payment for such invoice within 30 days from its receipt thereof, Tenant may deduct such amount from the next rent payment due Landlord.
Tenant will not dump any waste oil or other contaminants, organic or inorganic onto, in or about Flowerfield. Tenant may only dispose of such contaminants in accordance with Applicable Laws. Tenant will be solely responsible and will immediately pay all fines and penalties resulting from its improper disposal of such contaminants. If Tenant does not comply with any government order relating to the proper disposal of contaminants, Landlord will become Tenant's attorney-in-fact for purposes of exercising all actions and documents necessary to secure compliance. Any costs incurred by Landlord hereunder will be remitted to Landlord as Additional Rent.
ARTICLE 42 SEWAGE TREATMENT
In the event that Landlord or any successor in interest, constructs a sewage treatment plant at Flowerfield, Landlord shall construct such sewage treatment plant at a site located on the southern or eastern side of the current site of the Long Island Railroad train tracks which traverse Flowerfield. Landlord shall use its best efforts to maintain such sewage treatment plant so as to prevent any odors therefrom from reaching the Leasehold Premises.
ARTICLE 43 WASTE
Upon expiration, termination or cancellation of this Lease, Tenant shall be responsible for removal of any drums, cans or containers that Tenant delivered or caused delivery to the Leasehold Premises or Flowerfield. If Tenant fails to remove such drums, cans or containers, Landlord may remove same without
any liability or responsibility to Tenant for removing same without Tenant's consent. Tenant hereby appoints Landlord its Attorney-in-Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to comply with this paragraph. Tenant hereby waives any claims against Landlord relating to Landlord's exercising powers of Attorney-in-Fact for purposes of this Article 43. Any costs incurred by Landlord hereunder will be remitted to Tenant as Additional Rent.
ARTICLE 44 FIRE PROTECTION EQUIPMENT
Tenant is required to supply its own fire extinguishers of the appropriate size and classification consistent with the Town of Smithtown Fire Code, ISO and the Fire Insurance Underwriter Inspection regulations. Tenant agrees to have such fire extinguishers inspected periodically, recharged and otherwise serviced as required and tagged in accordance with Applicable Laws.
In the event Tenant is requested to provide local fire departments with jurisdiction over the Leasehold Premises with a list of hazardous chemicals maintained by Tenant at the Leasehold Premises, Tenant will provide same to such local fire departments and provide a copy of such lists to Landlord.
ARTICLE 45 HAZARDOUS MATERIALS
Tenant shall not bring, keep, store or use in or upon the Leasehold Premises and the Leasehold Improvements or Flowerfield materials deemed toxic or hazardous under Applicable Laws, unless done so in compliance with such Applicable Laws.
Tenant will not bring, keep, store or use in or upon the Leasehold Premises and the Leasehold Improvements or Flowerfield any solvent having a flash point below one hundred ten degrees Fahrenheit (110F), nor shall any liquid which emits volatile
vapors below the temperature of one hundred degrees Fahrenheit (100F) be brought, kept or used, except if the process using such liquids is conducted in a room of fire resistant construction as defined by the Fire Insurance Rating Organization ("FIRO"). If more than one, but not more than two gallons of such liquids are kept on the Leasehold Premises, they must be stored in safety cans and kept in a cabinet constructed by Tenant in a manner approved by FIRO. Reasonable amounts in excess of ten gallons may be kept if they are stored in vaulted construction by Tenant in a manner approved by FIRO. Any use or storage of such liquids must at all times be in accordance with the requirements of FIRO, OSHA, NFPA and the Board of Fire Underwriters. Tenant specifically agrees to undertake and complete any and all cleanup, removal and remediation necessitated by any such maintenance, discharge, or spillage, promptly upon notification by Landlord or any governmental agency having jurisdiction thereover. The provisions of this Article 45 shall survive the Expiration Date of this Lease.
ARTICLE 46 THE PONDS
Notwithstanding anything to the contrary set forth in this Lease, the terms of this Article 46 shall control the management and operation of the Ponds.
(a) Generally. As of the date of this Lease there are three man-made ponds at Flowerfield which are numbered ponds 1, 2 and 3, respectively (the "Ponds"). Portions of Ponds 1 and 2 are part of the Leasehold Premises. The water level of the Ponds is maintained by road/parking lot and roof storm water runoff from the Flowerfield storm drain system which is configured to drain into the Ponds and a well system with an electric pump that, when activated, pumps water into the Ponds.
(b) The Well. The electric account along with any water company accounts for the well system will be maintained in Tenant's name and all bills therefor will be paid by Tenant; provided however, that Landlord will reimburse Tenant for the billed costs from such utilities for pumping water into the Ponds to cover the cost of filling Pond 3 with water. Landlord shall remit such payment within 30 days of its receipt of the bill from Tenant. Tenant may fill the Ponds whenever it deems, in its sole discretion, that the water level in Ponds 1 and/or 2 is too low.
(c) Well System Failure. Landlord, at its cost and expense, shall be responsible for maintaining, repairing and replacing the well pump. In the event that the well pipeline fails to produce water and needs to be replaced, Landlord shall be responsible for replacing the well pipeline; provided, however, that Tenant shall pay one-third the cost thereof.
(d) Pond Fountains. Pond 1 and Pond 2 each have a fountain, both of which are installed each year in the Spring and removed in the Fall. Landlord, at its cost and expense, will (i) perform the annual installation and removal of the fountains, if necessary, (ii) maintain the fountains in good working order, including preventative maintenance and repairs, and (iii) replace any fountains that fail or become damaged beyond repair.
(e) Government Compliance. Landlord, at its cost and expense, shall be responsible for complying with any order of any government authority; (i) in connection with remediation to the ponds due to the storm drain configuration or; (ii) in connection with any other condition not caused by Tenant, its agents, employees or licensees.
(f) Notification. If either party is made aware of a condition or event that could affect the condition of any of the Ponds, such party shall promptly notify the other party of such condition or event, and the Parties shall take prompt action to
notify the proper authorities and correct the condition, in accordance with Applicable Laws and the terms of this Lease.
ARTICLE 47 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA)
Tenant represents that it is familiar with the Americans with Disabilities Act (ADA). Tenant further represents that it will comply with the ADA requirements to the extent such requirements apply to construction of the Leasehold Improvements.
The Parties recognize that the Leasehold Premises are in full compliance with the ADA as evidenced by the Certificate of Occupancy for the Leasehold Premises as of the date of the Lease.
ARTICLE 48 ALARM SYSTEM
In the event Tenant desires to install an alarm system, Tenant will register such alarm system with the Town of __Smithtown, Fire Marshall's Office, the Suffolk County Police Department, the Saint James Fire Department and in accordance with Applicable Laws.
ARTICLE 49 ACCESS FOR INGRESS AND EGRESS
The sidewalks and entries to the Leasehold Improvements and adjacent to the Leasehold Premises shall not be encumbered or obstructed by Tenant so as to impede passage along the Access Areas or through any other part of Flowerfield, or used by Tenant, its agents or customers for any other purpose other than for ingress and egress to the Leasehold Improvements or Leasehold Premises. Landlord may direct Tenant to remove any items
obstructing such passage. Tenant shall promptly comply with Landlord's reasonable direction.
ARTICLE 50 DATES RESERVED FOR LANDLORD USE
Landlord shall have the right to reserve up to five dates which have not otherwise been reserved by Tenant's clients during each year of the Lease Term for Landlord's purposes at no cost to Landlord. Landlord is not required to purchase catering services from Tenant on the Landlord's reserved dates; provided, however, that Landlord cannot utilize the services of another caterer. The dates to be reserved for Landlord's use will not include Saturday evenings or holidays. Landlord may not reserve any such dates more than six months in advance of Landlord's reserved dates.
ARTICLE 51 PRIVACY AND FORCED ENTRY
Tenant shall provide Landlord with a list of three of Tenant's employees who possess keys for locks to any entrance or other manner of ingress or egress from the Leasehold Premises. In the event entry is necessitated by an Emergency and Tenant has not provided Landlord with a list of three of Tenant's employees who possess keys for access, Landlord may forcibly enter the Leasehold Premises and Tenant holds Landlord harmless and releases Landlord from any and all claims for repair of damage arising therefrom.
If Tenant constructs a gated fence surrounding the Leasehold Premises, Tenant will provide Landlord with keys to such fence.
ARTICLE 52 ACTIVITY RESTRICTIONS
(a) Tenant shall use the Leasehold Premises solely as a catering/banquet/conference facility and for no other purpose.
(b) Tenant will not engage in any of the following activities without Landlord's prior knowledge and written consent:
(i) No Fire Sale - Tenant will not permit any fire, bankruptcy, auction or "going out of business" sale on the Leasehold Premises. This shall not be construed to impair the rights of any Leasehold Mortgagee to foreclose on any security interest it may have with respect to the Leasehold Premises.
(ii) No Improper Use of Parking Lot - Tenant will not use the Parking Lot or any area adjacent to the Leasehold Premises for display of goods, sale of goods or any similar undertaking.
(iii) No Misuse of Plumbing Facilities - Tenant will not use plumbing facilities for disposal of any materials deemed to be unreasonably destructive to the plumbing or facilities. The plumbing facilities referred to herein include interior drains, exterior dry wells, collection basins, storm drains, sumps. Tenant shall not improperly dispose of any materials into the septic system at the Leasehold Premises for which disposal is regulated by Applicable Law. In the event of Tenant misuse of the plumbing facilities and its failure to correct same, Landlord shall immediately clean and restore the affected facility and invoice Tenant for the costs incurred by Landlord for such service as Additional Rent.
(iv) No Damage to the Premises - Except as otherwise permitted under this Lease, Tenant shall not perform any act or carry on any practice which will damage, deface, or mar the Leasehold Premises or any other part of Flowerfield. Tenant will restore the Leasehold Premises substantially to its original condition, except that the New Building will not be removed, less normal wear and tear, in the event of such damage prior to the end of the Lease Term.
ARTICLE 53 GOVERNMENT RESTRICTIONS
Tenant shall, at its own cost and expense, comply with the Certificate of Occupancy for the Leasehold Premises and all Applicable Laws affecting the Leasehold Premises now in force or which hereafter may be in force. Any use of the structure or any use of a portion of the Leasehold Premises for purposes of use or subleasing for a use not permitted by the Code of the Town of Smithtown is prohibited.
ARTICLE 54 UNAUTHORIZED VEHICLES
Any vehicles of any parties improperly parked on Flowerfield property, excluding the Leasehold Premises, may be removed from Flowerfield. Improperly parked vehicles include vehicles parked in loading zones, no parking zones, fire zones and vehicles parked overnight without the consent of Landlord. Tenant shall be billed and pay as Additional Rent for removal of such vehicles, if such vehicles have entered Flowerfield for Tenant's purposes.
ARTICLE 55 UNPLATED VEHICLES
Any unregistered motor vehicle parked on the Flowerfield property, excluding the Leasehold Premises, which belongs to Tenant, its agents, employees, invitees, licensees or subtenants will be assessed a parking fee of $10.00 per day after the first consecutive 24 hours of parking. In the event Tenant does not register such vehicle or remove the vehicle from Flowerfield, Tenant hereby appoints Landlord its Attorney-in-Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to comply with this Article 55. Tenant hereby waives any claims against Landlord relating to Landlord's exercising powers of Attorney-in-Fact for purposes of this Article 55.
Tenant shall pay Landlord's costs incurred hereunder as Additional Rent.
ARTICLE 56 RIGHT TO SHOW AND INSPECT THE LEASEHOLD PREMISES
Landlord may enter the Leasehold Premises to inspect the Leasehold Improvements and to show same to prospective purchasers, mortgagees or lessees and invitees upon providing reasonable notice to Tenant. The frequency of such inspections shall not exceed one inspection per month; however, during periods of Major Construction Activities, more frequent inspection will be permitted. Any restriction on inspection does not prohibit Landlord from entering the Leasehold Premises for purposes of "showing" the Leasehold Premises to agents, guests or invitees of Landlord.
Landlord shall enter the Leasehold Premises at its own risk; except for gross negligence and willful misconduct of Tenant, its agents and employees causing bodily injury or death. Landlord may not enter the Leasehold Premises, except in the event of an Emergency, unless reasonable notice has been provided Tenant and unless accompanied by an employee of Tenant as provided in Article 51 of this Lease. Tenant shall make an employee available to accompany Landlord after reasonable notice. In this context "Landlord" includes only those authorized contractors, architects, agents and employees accompanied by an employee of Landlord. To the extent reasonably possible, Landlord shall provide Tenant with notice of names of such authorized contractors, architects, agents and employees.
Any entry shall be conducted with due regard for the activities being conducted at the Leasehold Premises and the rights of any subtenants. Tenant may deny Landlord entry to the Leasehold Premises during any function thereat. No entry shall
unreasonably interfere with the Tenant's use of the Leasehold Premises.
ARTICLE 57 SURRENDER OF POSSESSION
The New Building shall be the property of Tenant; however, upon the Expiration Date, the New Building shall become the Landlord's property. As of the Expiration Date, Tenant shall surrender possession of the Leasehold Premises and the Leasehold Improvements to Landlord in good condition, reasonable wear and tear excepted.
Tenant's equipment shall be removed from the Leasehold Premises on or before the Expiration Date. Any of Tenant's property remaining on the Leasehold Premises or on any other part of Flowerfield 30 days after the Expiration Date, which Landlord does not require Tenant to remove, shall become Landlord's property free from any claim of Tenant or any person claiming right to such property through Tenant.
Tenant has caused to be installed or otherwise has the exclusive use of the trade fixtures listed in Exhibit "D" or any equipment substituted therefor during the Lease Term, and Tenant has sole responsibility, at Landlord's option, to remove or leave in place, the trade fixtures listed in Exhibit "D" or any equipment substituted therefor during the Lease Term upon the expiration, termination or cancellation of this Lease unless such trade fixtures and/or any additions thereto become affixed to the Leasehold Premises, the removal of which would cause damage to the Leasehold Premises. Except as otherwise permitted under this Lease, Tenant shall not remove or cause to be removed any fixtures or any other installation that was "in place" at the Leasehold Premises on the Commencement Date without the written consent of Landlord.
At the end of the Lease Term, the Leasehold Premises and all improvements comprising a part thereof will be delivered to the Landlord in vacant broom clean condition together with all keys to the Leasehold Premises.
ARTICLE 58 TOTAL CONDEMNATION OF THE LEASEHOLD PREMISES
If the whole of the Leasehold Premises shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose then this Lease and the term herein shall cease and terminate as of the date that title vests in any public agency. All rental and other charges owing hereunder shall be prorated as of such date. Tenant shall have no claim against Landlord or the condemning authority, except as outlined below:
(a) Tenant shall be entitled to the value of any unexpired portion of the Lease as agreed to by Tenant and the public agency condemning the Leasehold Premises; and
(b) Tenant shall be entitled to the value of thirty percent (30%) of the value of such compensation as may be awarded or recoverable for the Butler Building during the first year of the Lease Term as agreed to by Landlord and the public agency condemning the Leasehold Premises. The Tenant's interest in it's portion of the value of such compensation as may be awarded or recoverable for the Butler Building shall decrease by three percent (3%) per year during the first ten years of the Lease Term.
(c) Tenant shall be entitled to one hundred percent (100%) of the value of such compensation as may be awarded or recoverable for the New Building, exclusive of Landlord's fee estate in the real property under the New Building, for the entire Lease Term except that the Landlord shall be entitled to one hundred percent (100%) of the value of the New Building upon
expiration of the first forty eight (48) years of the Lease Term, or the Expiration Date whichever comes first.
(d) Tenant shall be entitled to such compensation as may be awarded or recoverable by Tenant on account of any damage to Tenant's business by reason of the condemnation and for or on account of any cost or loss to which Tenant might incur in removing Tenant's fixtures and Leasehold Improvements and equipment from the Leasehold Premises.
Nothing herein should be construed to limit Landlord's right to seek any and all condemnation awards (other than those to which Tenant is entitled) from the condemning authority including, but not limited to, the capitalized value of the rent due under the Lease and the fair market value of the Leasehold Premises as of the Expiration Date.
ARTICLE 59 PARTIAL CONDEMNATION OF THE LEASEHOLD PREMISES
If any part of the Leasehold Premises shall be taken as set forth in Article 58, and such partial taking or condemnation renders the Leasehold Premises unsuitable for the business of Tenant, then unless Landlord is able to substitute contiguous premises substantially equal in size and aesthetic quality of the portion of the Leasehold Premises so taken, this Lease and the term herein shall terminate as of the date title vests in any public agency. In the event of such termination, all rentals and other charges owing hereunder shall be prorated as of such date and Lessee shall have no claim against Lessor or the condemning authority except as outlined in Article 58 above.
If such partial taking is not sufficiently extensive to render the Leasehold Premises unsuitable for the business of Tenant, then this Lease shall continue in effect with no diminution in rent or other charges due hereunder if Landlord
shall have substituted contiguous premises as aforesaid and if contiguous premises have not been so substituted, the rent shall be appropriately reduced based upon the impact of the taking on Tenant's use of the Leasehold Premises.
Landlord and Tenant shall, upon receipt of their respective awards in condemnation, make all necessary repairs or alterations to the buildings of which the Leasehold Premises are a part so as to constitute the portion of the building or buildings not taken a complete architectural unit, but such work shall not exceed the scope of the work done by Landlord and Tenant in originally constructing the buildings, nor shall Landlord or Tenant in any event be required to spend for such work an amount in excess of the amount received by Landlord and Tenant as damages for the portion of the building or buildings constituting the Leasehold Premises so taken. "Amount received by Landlord and Tenant", shall mean that part of the condemnation award which is free and clear to Landlord and Tenant of any collection by mortgagees or other lenders for the value of the diminished fee or leasehold interest.
If more than 20% of the floor area of the building or buildings in which the Leasehold Premises are located shall be taken as aforesaid, Tenant may, by written notice to Landlord, terminate this Lease, such termination to be effective as of the date title vests in any public agency.
Nothing herein should be construed to limit Landlord's right to seek any and all condemnation awards (other than those to which Tenant is entitled) from the condemning authority including, but not limited to, the capitalized value of the rent due under the Lease and the fair market value of the Leasehold Premises as of the Expiration Date.
ARTICLE 60 INDEMNIFICATION
Tenant shall indemnify and hold Landlord harmless against and from all legal and governmental compliance actions which may affix liabilities, suits, actions, obligations, damages, penalties, claims, costs, fines, charges and expenses, including reasonable attorneys' fees, which are imposed on or incurred by or asserted against Landlord by reason of any of the following occurring during the Lease Term (unless the same shall be occasioned by any negligence of, or any work or thing done in, or about Flowerfield or any part thereof by Landlord, its agents, contractors, employees, tenants or subtenants or Landlord's breach of its obligations under this Lease):
(a) for any loss of life, personal injury or property damage arising from or out of any negligent act or omission of Tenant, its agents, contractors, employees or invitees in connection with Tenant's operations at the Leasehold Premises;
(b) for any loss of life, personal injury or property damage arising from or out of any negligent act or omission of Tenant, its agents, contractors, employees or invitees in connection with the design and construction of the Project, or other Major Construction Activities of the Tenant at the Leasehold Premises or Flowerfield;
(c) for any loss of life, personal injury or property damage arising from or out of any negligent act or omission of Tenant, its agents, contractors, or employees in connection with the Site Investigation, pursuant to Article 16 of this Lease;
(d) arising out of Landlord's removal of nonconforming signs installed by Tenant, pursuant to Article 37 of this Lease;
(e) arising out of the maintenance, discharge or spillage by Tenant, its agents, contractors, or employees, of any hazardous or toxic materials on or about the Leasehold Premises and brought on to the property by Tenant, its agents, contractors, or employees, including any and all liability of
Landlord from such maintenance, discharge or spillage under the Environmental Response Compensation and Liability Act of 1980 to the extent any such liability arises as a result of the acts or omissions of Tenant, its agents, contractors or employees; provided however, that such obligation to indemnify the Landlord shall not apply if Landlord is acting in the capacity of Tenant's agent, contractor or employee;
(f) for any requirement to effect ADA compliance at the Leasehold Premises;
(g) for any liability for government fines or nuisance caused by Tenant's alarm system at the Leasehold Premises;
(h) for any dumping or improper disposal of waste oil or other contaminants in or about Flowerfield; and,
(i) for any claim asserted by a real estate broker, its parent, affiliates, employees and agents in connection with the negotiation or execution of this Lease.
Landlord will indemnify and hold Tenant harmless against and from all legal and governmental compliance actions which may affix liabilities, suits, actions, obligations, damages, penalties, claims, costs, fines, charges and expenses, including reasonable attorneys' fees, which are imposed on or incurred by or asserted against Tenant by reason of any of the following occurring during the Lease Term (unless the same shall be occasioned by any negligence of, or any work or thing done in, or about Flowerfield or any part thereof by Tenant, its agents, contractors, employees, subtenants, concessionaires or licensees or Tenant's breach of its obligations under this Lease):
(a) for any loss of life, personal injury or property damage arising from or out of any negligent act or omission of Landlord, its agents, contractors, employees, tenants, subtenants or licensees in connection with their activities at Flowerfield;
(b) arising out of Landlord's use of the Leasehold Premises pursuant to Article 50 of this Lease;
(c) arising out of the maintenance, discharge or spillage by Landlord, its agents, contractors, employees, tenants, subtenants or licensees, of any hazardous or toxic materials on or about the Flowerfield property including any and all liability of Landlord or Tenant from such maintenance, discharge or spillage under the Environmental Response Compensation and Liability Act of 1980;
(d) arising out of or in connection with the method by which the Flowerfield storm water run-off system is configured to drain into the Ponds;
(f) for any requirement to effect ADA compliance at Flowerfield except as provided in Article 47;
(g) for any dumping or improper disposal of waste oil or other contaminants in or about Flowerfield; and,
(h) for any claim asserted by a real estate broker, its parent, affiliates, employees and agents in connection with the negotiation or execution of this Lease.
ARTICLE 61 QUIET ENJOYMENT
Tenant, upon paying the rents and performing all of the terms on its part to be observed and performed hereunder, shall have the right to occupy the Leasehold Premises and to use the Access Area peaceably and quietly in accordance with the terms of this Lease, but subject to any mortgage to which this Lease is subordinated, provided Landlord's mortgagee delivers a nondisturbance agreement reasonably acceptable to Tenant and its lenders, pursuant to Article 67 of this Lease.
ARTICLE 62 CATERING EXCLUSIVITY - RIGHT OF FIRST REFUSAL
Landlord shall not lease, sublease, sell, license or otherwise convey any portion of Flowerfield to any caterer/banquet operator other than Tenant, except for the following:
(a) food service operators who are contracted by Landlord to provide food services at functions held at the Flowerfield Fairgrounds;
(b) food service operations at the Day Camp;
(c) future Flowerfield tenants that need to operate a food service to sustain their core business (i.e., hotel/convention center, bed and breakfast facility); and,
(d) food service operators exclusively providing employee cafeteria service to corporate headquarters tenants; and,
(e) after the Expiration Date. With respect to paragraph (c) of this Article 62, Landlord will employ best efforts to extend to Tenant a priority opportunity to participate in any such food service operations.
ARTICLE 63 LANDLORD'S REPRESENTATIONS
Landlord represents to Tenant as of the date of this Lease as follows:
(a) Landlord is a corporation in good standing under the laws of the State of New York.
(b) Landlord owns the Leasehold Premises in fee absolute, and will defend its title thereto.
(c) Landlord's fee estate in the Leasehold Premises is not subject to any lien or encumbrance.
(d) Landlord has the legal power and authority to execute and deliver this Lease.
(e) The execution of this Lease will not violate or constitute a default on the part of the Landlord under any agreement to which Landlord is a party or by which it is bound.
(f) Landlord's Board of Directors, through the power vested in certain officers of the corporation, has authorized the execution, delivery and performance of this Lease.
(g) All other necessary corporate action of Landlord to authorize the execution, delivery and performance of this Lease has been taken.
(h) The officer of Landlord who has executed this Lease has the power and authority to do so.
(i) The execution of this Lease does not require the joinder or approval of any other person.
(j) Landlord represents that there are no known environmental conditions on the Leasehold Premises which would encumber or otherwise prevent Tenant's use of the premises as a catering/banquet/conference facility or that are in violation of Applicable Laws.
Except as otherwise set forth in this Lease, Landlord has made no representations whatsoever and Landlord has made no representations or warranties with respect to the Leasehold Premises.
ARTICLE 64 TENANT'S REPRESENTATIONS
Tenant represents to the Landlord as follows:
(a) Tenant represents that it is a corporation in good standing under the laws of the State of New York.
(b) Tenant has the power and authority to execute and deliver this Lease.
(c) The execution of this Lease will not violate or constitute a default on the part of Tenant under any agreement to which Tenant is a party or by which it is bound.
(d) Tenant's Board of Directors, through the power vested in certain officers of the corporation, has authorized the execution, delivery and performance of this Lease.
(e) All other necessary corporate action of Tenant, to authorize the execution, delivery and performance of this Lease has been taken.
(f) The officer of Tenant who has executed this Lease has the power and authority to do so.
(g) The execution of this Lease does not require the joinder or approval of any other person.
ARTICLE 65 ASSIGNMENT
Tenant may not assign or sublet this Lease without the prior written consent of Landlord, which consent will not be unreasonably withheld or delayed. Landlord requires that any proposed assignee of Tenant's Leasehold Estate be a person or business entity of sufficient economic standing to fulfill the obligations of the Lease.
In the event Tenant desires to sublease or assign the Leasehold Premises to another party, the terms and conditions of such sublease or assignment shall be communicated to Landlord in writing prior to the effective date of any such sublease or assignment and prior to such effective date, Landlord shall have the option, exercisable in writing to Tenant, (a) to recapture the within Lease so that such sublessee or assignee shall then become the sole Tenant of Landlord hereunder or (b) to recapture the Leasehold Premises and the within Tenant shall be fully released from any and all obligations hereunder; provided however, that such recapture will not affect any underlying security interest for any obligation owed to Tenant by its assignee or sublessee.
In the event that Landlord exercises its option to recapture the Lease, the terms of the Lease will not be revised or amended without the consent of sublessee/assignee or Tenant. Further, in the event that Landlord exercises its option to recapture the
Lease or the Leasehold Premises, the commercial terms of the offer sheet between the Tenant and its sublessee/assignee shall control and Landlord shall compensate Tenant, in lump sum, for any amounts that, as a result of Landlord's exercise of its option to recapture, are not being paid by such sublessee/assignee. Landlord's option to recapture the Leasehold Premises shall be subject to Tenant's review and approval, reasonably exercised, of Landlord's financial condition and its plan to provide all Tenant's contracted-for services with Tenant's catering/banquent/conference clients, and Landlord shall assume responsibility to perform such contracts.
In the event Landlord elects not to recapture the Lease as herein provided, Tenant may nevertheless assign the Lease or sublet the whole of the Leasehold Premises, subject to the Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed, on the following terms and conditions:
(a) Tenant shall provide Landlord with the name and address of the proposed assignee or sublessee of the Lease.
(b) The assignee or sublessee shall assume, by written instrument, all of the obligations of this Lease, and a copy of such assumption agreement shall be furnished to Landlord within ten days of the execution thereof.
(c) Tenant and each assignee or sublessee shall be and remain liable for the observance of all of the terms, conditions, covenants, provisions and addenda of this Lease, including, but not limited to, the payment of rent security as provided in Article 10 of this Lease, the payment of the rent reserved herein, through the Lease Term; provided, however, that Tenant shall have no obligation to comply with any provisions or modifications to this Lease affected by Landlord and the sublessee/assignee. In the event Landlord and sublessee/assignee
enter a new lease, Tenant shall have no further obligation to Landlord under this Lease.
(d) In any event, the acceptance by Landlord of any rent from assignee or from any of the subtenants or the failure of Landlord to insist upon a strict performance of any of the terms, conditions and covenants herein, will not relieve Tenant nor any assignee assuming this Lease, from any and all obligations herein, during and for the Lease Term.
(e) Landlord requires a payment to cover its reasonable attorney's fees for each request for consent to sublet or assign prior to its consideration of same.
(f) There shall not be more than one sublease at any time.
(g) Notwithstanding the foregoing, Tenant may, on an individual event basis, sublease the Leasehold Premises, with all rights of access thereto, to other caterers without Landlord's consent, and without any fees payable to Landlord.
ARTICLE 66 MORTGAGE OF THE LEASEHOLD ESTATE
Tenant has the right to mortgage the Leasehold Estate to any Leasehold Mortgagee; provided that such mortgage does not encumber the Landlord's Reversionary Estate.
ARTICLE 67 SUBORDINATION
Tenant agrees that this Lease and Tenant's interest herein shall be subordinate to any mortgage, deed of trust or any method of financing or refinancing now or hereafter secured by the Reversionary Estate, including that were or are hereafter built by Landlord on the Leasehold Premises subject to Tenant's rights under this Lease and excluding the Tent, New Building and any other Leasehold Improvements that are hereafter built and owned by Tenant on the Leasehold Premises, and to all renewals, modifications, replacements, consolidations and extensions
thereof. Such subordination is effective without any further act of Tenant. Nonetheless, upon request of Landlord, Tenant agrees to execute and deliver any and all documents required to effectuate such subordination and failing to do so within ten days after written demand, does hereby make, constitute and irrevocably appoint Landlord as Tenant's Attorney-in-Fact to do so in Tenant's name, place and stead. Notwithstanding the foregoing, Landlord has no right to mortgage or otherwise pledge the Leasehold Estate to secure any mortgage, deed of trust or any other method of financing or refinancing. Landlord shall secure from any lender holding a mortgage or other secured interest at Flowerfield a nondisturbance agreement reasonably acceptable to Tenant and its lenders.
The foregoing shall not be construed to prohibit Landlord from pledging the rent due Landlord under the Lease to secure any mortgage, deed of trust or any method of financing or refinancing.
ARTICLE 68 ATTORNMENT
In the event of the sale or assignment of Landlord's interest in Flowerfield, or any part thereof of which the Leasehold Premises form a part, or in the event of any proceedings brought for the foreclosure of, or in the event of exercise of the power of sale made by Landlord covering the Leasehold Premises, Tenant shall, upon the request of any person succeeding to the interest of Landlord as a result of the foregoing events, automatically become the tenant of such successor in interest, without change in the terms or other provisions of this Lease. Upon request by said successor in interest, Tenant shall execute and deliver an instrument or instruments reasonably acceptable to Tenant, confirming such attornment.
ARTICLE 69 SHORT FORM LEASE
This Lease shall not be recorded, but the Parties will execute and acknowledge a memorandum of Lease reasonably acceptable to the Parties which will be recorded at the Suffolk County Clerk's office. Such memorandum of Lease shall not contain any provision disclosing the rent. The Parties shall also execute, and acknowledge, if necessary, any other documents reasonably required to effect such recording.
ARTICLE 70 BROKERAGE COMMISSIONS
Landlord represents and warrants to Tenant that Landlord has not employed any broker in connection with the introduction of the Parties or the negotiation or execution of this Lease.
Tenant represents and warrants to Landlord that Tenant has not employed any broker in connection with the introduction of the Parties or the negotiation or execution of this Lease.
ARTICLE 71 INSOLVENCY OF TENANT
If Tenant makes a general assignment for the benefit of creditors, or if Tenant, pursuant to any insolvency or bankruptcy proceeding against Tenant, including but not limited to, bankruptcy, insolvency, reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or future applicable federal, state, or other statute or law, such event or proceedings shall constitute an Event of Default of this Lease by Tenant, and Landlord may, subject to Applicable Laws, terminate this Lease forthwith and upon notice of such termination Tenant's right to possession of the Leasehold Premises shall cease and Tenant shall quit and surrender the Leasehold Premises to Landlord but Tenant shall remain liable under this Lease; provided, however that pending any
reorganization, arrangement, composition, or readjustment or similar proceeding other than insolvency, liquidation, dissolution, or similar proceeding, Tenant has paid the Rent and Additional Rent and has not otherwise breached a material provision of this Lease, Landlord shall have no right to terminate this Lease pursuant to the provisions of this Article 71.
ARTICLE 72 LATE CHARGES, EVENT OF DEFAULT AND TERMINATION
(a) If Tenant defaults in the payment of rent or any Additional Rent, or defaults in the performance of any of the other material covenants and conditions hereof or permits the Leasehold Premises to become deserted, abandoned or vacated, Landlord shall give Tenant notice of such Event of Default. If after Tenant's receipt of such notice, Tenant does not cure default in the payment of Rent or Additional Rent within ten business days or any other default in this Lease within 30 days of Tenant's receipt of such notice; provided, however, that if a particular default cannot be cured within 30 days, then Tenant shall be required to commence good faith efforts within 30 days to effect such cure, then Landlord may terminate this Lease on not less than ten days notice to Tenant. Tenant's right to possession of the Leasehold Premises shall thereafter cease and Tenant shall quit and surrender the Leasehold Premises to Landlord, but Tenant shall remain liable as otherwise provided in this Lease.
(b) If the notice provided for in paragraph (a) above is given, and the Lease Term expires as aforesaid then and in any of such events, Landlord may without notice or demand and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such default or breach, terminate
Tenant's right to possession of the Leasehold Premises by any lawful means, in which case this Lease shall terminate and Landlord may reenter the Leasehold Premises either by force or otherwise, and dispossess Tenant and/or the legal representative of Tenant or other occupant of the Leasehold Premises and remove their property and effects and hold the Leasehold Premises as if this Lease had not been made, and Tenant hereby waives the service of notice of intention to reenter or institute legal proceedings therefor. Any property or effects removed may be stored in a public warehouse or elsewhere at the cost of, and for the account of Tenant, and without Landlord liable for trespass, or becoming liable for any loss or damage which may be occasioned thereby. If Tenant receives notice of an Event of Default and such default is not cured in accordance with the terms of this Lease prior to the commencement of any Renewal Term of this Lease, Landlord may cancel Tenant's option to such Renewal Term by written notice to Tenant.
(c) In case of any such default, reentry, expiration and or dispossess by summary proceedings or otherwise, (i) the rent shall become due thereupon and be paid up to the time of such reentry, dispossess and/or expiration, (ii) Landlord may re-let the Leasehold Premises or any part or parts thereof, either in the name of Landlord or otherwise, for a term or terms, which may at Landlord's option be less than or exceed the period which would otherwise have
constituted the applicable balance of the Lease Term and/or (iii) Tenant or the legal representative of Tenant shall also pay Landlord liquidated damages for the failure of Tenant to observe and perform Tenant's covenants herein contained, any deficiency between the rent hereby reserved and/or covenanted to be paid and the net amount, if any, of the rents collected on account of the lease or leases of the demised premises for each month of the period which would otherwise have constituted the applicable balance of the Lease Term; provided, however, that Tenant shall have no obligation for any Renewal Term for which the option therefor has not been exercised. The failure of Landlord to re-let the Leasehold Premises or any part or parts thereof, despite Landlord's reasonable efforts to re-let the Leasehold Premises, shall not release or affect Tenant's liability for damages.
In computing liquidated damages there shall be added to said deficiency such expenses as Landlord reasonably incurs in connection with re-letting, including but not limited to legal expenses, attorney's fees, brokerage, advertising and for keeping the Leasehold Premises in good order and repair or preparing the same for re-letting. Any such liquidated damages shall be paid in monthly installments by Tenant on the rent day specified in this Lease and any suit brought to collect the amount of the deficiency for any month shall not prejudice in any way the rights of Landlord to collect the deficiency of any subsequent month by a similar proceeding. Landlord, in putting the Leasehold Premises in good order and repair or preparing the same to be re-let may, at Landlord's option, make such alterations, repairs, replacements and/or decorations in the Leasehold Premises as are reasonably determined by Landlord to be necessary for the purpose of re-letting the Leasehold Premises as a catering/banquet/conference facility and the making of such alterations, repairs replacements and/or decorations shall not be considered to operate or be construed to release Tenant from liability hereunder as aforesaid.
Landlord shall make a good faith effort to mitigate damages. However, Landlord shall in no event be liable in any way whatsoever for failure to re-let the Leasehold Premises, or in the event that the Leasehold Premises are re-let, for failure to collect the rent thereof under such re-letting, provided Landlord
makes a good faith effort to collect such rent, and in no event shall Tenant be entitled to receive any excess, if any, of such net rents collected over the sums payable by Tenant to Landlord hereunder.
In the event of a breach by Tenant of any of the material covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if reentry, summary proceedings and other remedies were not herein provided for. Mention in this Lease of any particular remedy shall not preclude Landlord or Tenant from any other remedy at law or in equity.
Tenant hereby expressly waives any and all right of redemption granted by or under any present or future laws in the event Tenant is evicted or dispossessed pursuant to this Lease, or in the event Landlord obtains possession of the Leasehold Premises by reason of Tenant's breach of any of the material covenants and conditions of this Lease.
In addition to its other remedies, the following shall apply if Tenant shall fail to pay any Rent on or before the tenth (10th) day after it is due:
Tenant shall pay Landlord a late charge equal to three percent (3%) of the amount not paid plus any reasonable attorneys' fees incurred by Landlord in connection with such late payment. The imposition of a late charge shall not be construed to limit or waive Landlord's rights or remedies hereunder in the case of default, or Tenant's right or remedies to cure any default.
The following shall apply if Tenant fails to pay the amount due for 30 days after Landlord gives notice to Tenant of the failure:
Tenant shall pay Landlord liquidated damages equal to one-fifth (20%) of a monthly installment of the amount due, which
shall include all of Landlord's expenses that arise from Tenant's failure to make the payment when due. Landlord's expenses include the reasonable fees and disbursements of attorneys employed to give Tenant notice of the failure and to pursue any summary proceeding relating to the Lease.
Any charges outlined in this paragraph will be considered Additional Rent.
ARTICLE 73 HOLDOVER
In the event that Tenant does not vacate the Leasehold Premises on or
prior to the Expiration Date, or at the end of any option or renewal term,
without the express written consent of Landlord, then Tenant agrees to pay
Landlord double the monthly rent then applicable for each month or portion
thereof that Tenant retains possession of the Leasehold Premises or any part
thereof. Tenant will also pay Landlord all reasonable costs incurred by Landlord
associated with Tenant's failure to vacate the Leasehold Premises as Additional
Rent, and Tenant's obligation to pay such Additional Rent will survive
expiration, termination or cancellation of the Lease. Landlord's rights to
reenter the Leasehold Premises are not waived by the provisions of this Article
73. Tenant's holdover will constitute renewal of this Lease on a month-to-month
basis on the terms and conditions set forth herein except that the rent will be
double the monthly Rent applicable at the end of the Lease Term. The renewal of
this Lease at double the monthly rent will be at Landlord's sole option.
ARTICLE 74 LANDLORD'S SELF-HELP RIGHTS
If Tenant fails to comply with any of its obligations under this Lease other than a failure to pay rent and if the failure continues after Landlord gives notice of the failure to Tenant,
and Tenant does not cure same or does not make good faith efforts to cure same in accordance with the terms of this Lease, the failure shall constitute a breach of the Lease.
Landlord shall have a "Self-Help Cure Period" which will begin 30 days after Landlord has given notice to Tenant of the breach. In case of emergency, the Self-Help Cure Period shall be any period that is reasonable under the circumstances.
If Tenant is able to begin to cure a failure within 30 days but is unable to complete the cure within 30 days despite the exercise of due diligence, the Landlord will not engage in Self-Help as long as the cure is diligently prosecuted. If the Tenant is unable to begin to cure a failure within 30 days despite the exercise of reasonable diligence, the Landlord will not engage in Self-Help as long as Tenant takes all steps that may be reasonable under the circumstances so that the cure may begin and as long as Tenant diligently prosecutes the cure thereafter.
The following shall apply if a breach shall occur with respect to the Tenant and the Landlord engages in Self-Help pursuant to the above:
Landlord shall have the right to cure the breach for the account and at the expense of the Tenant as herein provided.
Tenant shall reimburse Landlord as Additional Rent for expenses of the cure with interest at the Applicable Rate from the date each expense is incurred until the date of payment.
Landlord may render an invoice to Tenant with respect to any amount to which Landlord may be entitled herein.
"Applicable Rate" as defined herein means a fluctuating rate equal to three percent (3%) plus the prime rate of interest on corporate loans as reported in the Wall Street Journal.
If Tenant fails to pay Landlord any amount to which Landlord is entitled in accordance with this Article 74 within 30 days after Landlord sends an invoice to Tenant, the amount of the
invoice shall be added to the next installment of rent and shall be considered Additional Rent.
ARTICLE 75 LANDLORD AND TENANT CERTIFICATES
Landlord and Tenant shall, without charge, at any time and from time to time, within ten days after request by the other party, certify by written instrument, duly acknowledged and delivered to any prospective lender, lender or assignee of lender, firm or corporation specified by Landlord or Tenant:
(a) That this Lease is unmodified and in full force and effect, or if there has been a modification, that the same is in full force and effect as modified and stating the modifications.
(b) Whether or not there are any existing breaches or defaults by the other party under any of the terms of this Lease and specifying such breach or default or any setoffs or defenses against the enforcement of any of the agreements, terms, covenants or conditions of this Lease upon the part of the Landlord or Tenant, as the case may be, to be performed or complied with and, if so, specifying the same and the steps being taken, if any, to remedy same.
(c) The dates, if any, to which the Rent and other charges under this Lease have been paid or has been paid in advance by Tenant.
(d) The amount of rent security, if any, deposited with Landlord.
Any such statement may be conclusively relied upon by any of Landlord's or Tenant's mortgage lenders or prospective purchasers of the Leasehold Premises or any of the real property of which the Leasehold Premises are a part or any prospective purchasers of Tenant.
Either Party's failure to deliver such statement within ten days after the other party requests same shall be conclusive upon
the party failing to deliver such statement that this Lease is in full force and effect without modification, except as is represented by the requesting party, that there are no uncured defaults in the requesting Party's performance and that not more than one month's rent has been paid in advance.
If Landlord desires to finance or refinance the Reversionary Estate or any part thereof, Tenant shall deliver to any lender designated by Landlord all financial statements of Tenant prepared in Tenant's reasonable course of business by Tenant's accountants. All such financial statements shall be received by Landlord in confidence and shall be used only for the purpose set forth herein. Tenant shall have no obligation or liability to Landlord in connection with any lender's adverse determination on Landlord's financing or refinancing application based on such financial statements, nor shall Tenant be deemed to be in default of this Lease due to such adverse determination based on such financial statements.
ARTICLE 76 EXERCISE OF REMEDIES
A party to this Lease may exercise its rights and remedies at any time, in any order, to any extent, and as often as it deems advisable, except as otherwise provided herein. A party may exercise its rights and remedies without regard to whether the exercise of one right or remedy precedes, concurs with, or succeeds the exercise of another.
A single or partial exercise of a right shall not preclude a further exercise of the right or remedy or the exercise of another right or remedy.
No delay or omission in exercising a right or remedy shall exhaust, prejudice or impair the right or remedy or constitute a waiver of, or acquiescence to an Event of Default or breach.
ARTICLE 77 WAIVERS
No waiver of an Event of Default or breach shall extend to or affect any other Event of Default or breach or impair any right or remedy with respect to an Event of Default or breach.
No action, including the payment or acceptance of rent, or inaction, except for the execution of a written waiver document, shall constitute a waiver of an Event of Default or breach.
No waiver of a material Event of Default or breach shall be effective unless it is in writing.
ARTICLE 78 LEASE CONTINGENCIES
In addition to any other conditions set forth in this Lease, this Lease is subject to the following conditions for which Tenant may cancel this Lease, without liability, in the event that such conditions are not satisfied:
(a) Zoning Swap. The Overall Premises are currently within zoning districts designated by the Town as R-43 (one family residential) and LI (light industrial) and the Tenant has been operating at the Overall Premises under the 1993 Lease pursuant to a variance/special use permit affecting part of the Overall Premises within the R-43 zoning district which has been secured and renewed by Landlord. The Landlord currently has an application pending with the Town in which, in exchange for re-zoning part of the Overall Premises as LI (light Industry), another Landlord owned site adjacent to the Overall Premises would be zoned R-43, and will eliminate the need to secure future variance/special use permits to use the Overall Premises for banquet/catering/conference purposes (the "Zoning Swap"). The Town must approve this Zoning Swap, without any conditions other than the preservation of the noise restrictions which presently apply to the Overall Premises and have been made a part of the Landlord's application.
(b) Landlord Approvals. Landlord must approve a building design and siting of the New Building that is reasonably acceptable to Tenant.
(c) Government Approvals. All required Government Approvals for the Project must be received by December 8, 1997. The Town must issue building permits for the renovation of the Butler Building, if necessary, and the New Building construction subject to the provisions of Article 20.
ARTICLE 79 GOVERNMENT APPROVAL DELAYS
The Parties will employ best reasonable efforts to secure all required Government Approvals by December 1, 1997, pursuant to the terms of this Lease. If, however, all required Government approvals are not received by December 8, 1997, Tenant may not be able to commence and complete the Project in time to meet its banquet contract obligations which will resume in Spring, 1998. In the event such permits are not received by December 8, 1997, Tenant shall have the right to (a) delay its commencement of the Project and the Commencement Date for one year, and/or (b) cancel this Lease in accordance with the Provision of Article 78 if such permits are not issued by December 8, 1998. In the event that the Project is delayed pursuant to the above, the monthly rent payable by Tenant to Landlord between May 1, 1998 and either December 8, 1998 or the revised Commencement Date of May 1, 1999, as the case may be, will be the average of the monthly rent payable each month for (a) the 12 month period between June 1, 1997 and May 31, 1998 under the 1993 Lease and (b) Rent, Operating Costs and Impositions for the first 12 months under this Lease.
ARTICLE 80 1993 LEASE RENEWAL TERM
The Parties acknowledge that the initial term of the 1993 Lease expires on May 31, 1998 and that Tenant must give notice to Landlord that it is exercising its option to extend the 1993 Lease through May 31, 2003 by no later than July 31, 1997. In the event that all Government Approvals for the Project are not secured by July 31, 1997, the date for exercising the renewal option for the 1993 Lease shall be extended to 30 days after such Government Approvals are issued; provided, however, that if as of May 31, 1998, all Government Approvals have still not been issued, the expiration date for the 1993 Lease shall be extended on a month-to-month basis along with Tenant's right to renew same until 30 days after Tenant's receipt of all Government Approvals. Upon the Commencement Date, the 1993 Lease will terminate in favor of this Lease. If any required Government Approval is disapproved, and Tenant, in its sole judgment and discretion, does not challenge or appeal same, then Tenant shall have 30 days from its receipt of such disapproval to exercise its option to renew the 1993 Lease. If Tenant declines to renew the 1993 Lease, such Lease shall expire on May 31, 1998 or as of the date Tenant notifies Landlord that Tenant will not be renewing the Lease, whichever occurs last.
ARTICLE 81 WAIVER OF SUBROGATION
Tenant releases Landlord and its respective employees and agents from liability or responsibility for any loss or damage to the Leasehold Improvements which arises as a result of fire or any other event with respect to which fire or other property insurance is carried or required to be carried under this Lease.
Landlord releases Tenant and its respective employees and agents from liability or responsibility for any loss or damage to any Flowerfield improvements which arises as a result of a fire
or any other event with respect to which fire or other property insurance is carried or required to be carried under this Lease.
A clause or endorsement of an insurance policy pursuant to which an insurance company states, in effect, that a release of the type set forth herein shall not impair or reduce coverage under the policy is referred to below as a "waiver of subrogation".
Tenant shall make good faith efforts to cause the insurance companies with which fire or other property insurance is carried as to the Leasehold Improvements and the Leasehold Premises to include a waiver of subrogation clause or endorsement in the property insurance policies.
No party to this Lease shall be obligated to amend its current insurance policy to include insurance against a waiver of subrogation if their current policies do not include same.
ARTICLE 82 NOTICES
A notice to Landlord shall be properly addressed only if addressed to Gyrodyne Company of America, Inc. 7 Flowerfield - Suite 28, Saint James, New York 11780.
A notice to Tenant shall be properly addressed only if addressed to 80 Brown's River Road, Sayville, New York 11782.
A notice shall be valid only if it is given in writing and properly mailed and if a copy of the notice is given in accordance with this Lease.
A notice to a party shall be properly addressed only if addressed to the address of the party set forth in this Lease or to any other address either party may designate by giving written notice to the other party.
A notice shall be properly mailed only if mailed by certified or registered mail, return receipt requested, postage prepaid and properly addressed. The Parties may also transmit
notices via telecopier, provided such transmission is followed by a transmittal confirmation or by a reputable national overnight delivery service.
ARTICLE 83 INTERPRETATION
To the extent the context of any provision of this Lease requires, the singular includes the plural and the plural includes the singular.
A provision of this Lease which requires a Party to perform an action shall be construed as to require the Party to perform the action or to cause the action to be performed. A provision of this Lease which prohibits a Party from performing an action shall be construed so as to prohibit the Party from performing the action or from prohibiting others to perform the action.
Except as otherwise set forth in this Lease, each Party shall be deemed to be required to perform its obligations under this Lease at its own expense, and each Party shall be permitted to exercise its rights and privileges only at its own expense.
ARTICLE 84 CONSENT AND APPROVALS
Unless the sole discretion of either Party is expressly reserved in this Lease, all required consents and approvals will not be unreasonably withheld or delayed by the Party charged therewith.
ARTICLE 85 PARTIAL INVALIDITY
If any of the provisions of this Lease or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Lease or the application of such provision or provisions to persons or circumstances other than those to whom or which it is held invalid or unenforceable, shall not be affected thereby and every
provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.
ARTICLE 86 PRIOR AGREEMENTS AND DISCUSSIONS
All agreements between Landlord and Tenant before the date of this Lease are canceled; provided, however, that the 1993 Lease shall remain in full force and effect until the Commencement Date. All prior negotiations for this Lease are merged into this Lease. The submission of any unexecuted copy of this Lease shall not constitute an offer to be legally bound by the provisions of the document submitted. No party shall be bound by this Lease until it is executed and delivered by both Parties.
Notwithstanding the Commencement Date upon which many of the rights and obligations of the Parties commence, and the continuation of the 1993 Lease pending the Commencement Date this Lease contains certain provisions that are applicable to and control the activities, rights and obligations of the Parties that manifest as of the date hereof as well as on dates occurring prior to the Commencement Date. To the extent the context of any provision of this Lease requires, the obligations of the Parties under any such provision shall be deemed to commence as of the date required thereby. The Parties' undertaking of such rights and obligations prior to the Commencement Date shall not be construed to extend the Lease Term.
ARTICLE 87 LIMITED LIABILITY
Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, with respect to any of the terms, covenants and conditions of the Lease, that Tenant shall look solely to the Landlord's estate and interest in the Leasehold Premises and Landlord's insurance coverage for the
satisfaction of each and every remedy of Tenant, for the collection of a judgment or other judicial process or arbitration award requiring the payment of money by Landlord. No other property or assets of Landlord, Landlord's agents, shareholders, partners, principals, affiliates, directors, officers or employees shall be subject to levy, lien, execution, attachment or other enforcement procedure for the satisfaction of Tenant's rights and remedies under or with respect to this Lease.
Landlord shall look solely to Tenant and Tenant's insurance coverage for the satisfaction of each and every remedy of Landlord, for the collection of a judgment or other judicial process or arbitration award requiring the payment of money by Tenant. No other property of Tenant's agents, shareholders, partners, principals, affiliates, directors, officers or employees shall be subject to levy, lien, execution, attachment or other enforcement procedure for the satisfaction of Landlord's rights and remedies under or with respect to this Lease.
ARTICLE 88 EXHIBITS
All Exhibits "A" through "D" attached to this Lease constitute parts of this Lease.
ARTICLE 89 CAPTIONS AND TABLE OF CONTENTS
The captions of this Lease are for convenience and reference only and in no way define, limit or describe the scope or intent of this Lease nor in any way affect this Lease.
The table of contents preceding this Lease but under the same cover of this Lease is for the purpose of convenience and reference only and is not to be deemed or construed in any way as part of this Lease, nor as supplemental thereto or amendatory thereof.
ARTICLE 90 APPLICABLE LAWS
This Lease shall be governed by and construed in accordance with the laws of the State of New York.
ARTICLE 91 BINDING EFFECT
This Lease shall be binding upon the Parties and their respective successors, legal representatives and assigns and shall inure to the benefit of the Parties and their respective successors and assigns.
ARTICLE 92 AMENDMENTS AND CANCELLATION
This Lease shall not be amended or canceled orally.
ARTICLE 93 NO THIRD PARTY BENEFICIARIES
The Parties acknowledge that Landlord and Tenant are the only parties to this Lease. Subject to the Parties' rights set forth in this Lease to secure financing and to assign their rights hereunder, the rights and obligations of the Parties under this Lease shall not be construed to be for the benefit of or enforceable by any third party that is not a party to this Lease.
ARTICLE 94 SEPARATE LEASE
The Parties acknowledge that this Lease is a separate lease between the Parties and is not, nor is it to be construed as, an extension or renewal of the 1993 Lease.
ARTICLE 95 COUNTERPART EXECUTION
This Lease may be executed in any number of counterparts, and all such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed by their duly authorized officers and their respective corporate seals to be hereunto affixed.
GYRODYNE COMPANY OF AMERICA, INC.
By:_______________________________
Dimitri P. Papadakos, President
FLOWERFIELD CELEBRATIONS, INC.
By:_______________________________
Gerard Scollan, President
STATE OF NEW YORK
SS:
COUNTY OF SUFFOLK
On the 11th day of November, 1996, before me came Dimitri P. Papadakos, to me known, who, being by me duly sworn, did depose and say that he resides at Parkside Avenue, St. James, New York, that he is President of Gyrodyne Company of America, Inc., the corporation described in and which executed the foregoing Lease, that he knows the seal of said corporation; that the seal affixed to said Lease is such corporate seal; that it was so affixed by
order of the Board of Directors of Gyrodyne Company of America, Inc. and that he signed same by like order.
STATE OF NEW YORK
SS:
COUNTY OF SUFFOLK
On the 11th day of November, 1996, before me came Gerard Scollan, to me known, who, being by me duly sworn, did depose and say that he resides at 145 Handsome Avenue, Sayville, New York, 11782 that he is President of Flowerfield Celebrations, Inc., the corporation described in and which executed the foregoing Lease, that he knows the seal of said corporation; that the seal affixed to said Lease is such corporate seal; that it was so affixed by order of the Board of Directors of Flowerfield Celebrations, Inc. and that he signed same by like order.
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AMENDMENT #1 TO LEASE
BETWEEN
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
AND
CARIN PEREZ AND LUIS PEREZ
(Tenant)
This Lease Amendment, dated October 7, 1997 is between Gyrodyne Company of America, Inc. ("GCA") as Landlord having its principal place of business at 7 Flowerfield, Suite 28, St. James, New York and Carin Perez and Luis Perez ("Perez"), having its principal place of business (referred to collectively as the ("Parties") at 7 Flowerfield, Suite 44 and 74 and amends the Agreement of March 23, 1995 the ("Lease"). It is mutually agreed and understood that Tenant has rented from Landlord 7 Flowerfield, Suite 74, deemed to be approximately 1,350 square feet for a term commencing September 1, 1996 and ending on the Expiration Date of the Lease between the Parties and as herein amended.
Article 1 DEFINITIONS
1. The term "Suite 74" includes the Leased Premises defined herein as set forth in Exhibit F.
2. The term "Leased Premises" as defined in the Lease is hereby amended to include Suite 74.
3. All terms and definitions set forth in the Lease of March 23, 1995 are applicable to this Amendment unless specifically amended herein.
Article 2 RENT ABATEMENTS
The Rent Schedule in Exhibit E of the Lease is hereby deleted in its
entirety and replaced with Exhibit E2 attached hereto and made a part hereof. It
is mutually agreed and understood that Landlord is granting a rent abatement on
Suite #74 effective September 1, 1996 ending November 30, 1996. It is mutually
agreed that No Base Rent, exclusive of adjustments as provided in Addendum
Section V, Paragraph 4. items (a), (b), (c), (d) and (e), shall be due for the
following month(s): September, October and November, 1996. The entire Base Rent
otherwise due and payable for the Abatement Month(s) shall become immediately
due and payable upon the occurrence of an event of default by Tenant under this
Lease, default as defined in Addendum Section V, Paragraph 10. subparagraph
DEFAULT. Effective December 1, 1996 and for the
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subsequent 33 months ending August 31, 1999 Tenant shall pay a base rent of $1,000.00 per month exclusive of the underlying pass-throughs provided in Lease Addendum Section V, Paragraph 4. items (a), (b), (c), (d) and (e). It is agreed that effective September 1, 1999, and thereafter, the rental rate applicable to Suite #74 shall be equal to the rental rate applicable to Suite #44.
Article 3
Intentionally omitted.
Article 4 AIR CONDITIONING MAINTENANCE
The following provision replaces Addendum Section I, Paragraph 5. Air Conditioning Maintenance in its entirety.
In order to reflect the actual as-built premises and the addition of Suite #74, Landlord and Tenant agree to the following:
There are eight (8) five (5) ton roof (Suite #44) and one (1) four (4) ton ground mount (Suite #74) air conditioning systems that serve the demised premises. The Tenant shall have the option to utilize these systems provided Landlord is notified by Tenant, not later than March 1st of each year, that said systems will be used. For the first five (5) years of this Lease, the Landlord shall, for Suite #44, at no cost to Tenant, on a best efforts basis, maintain, service, repair, and replace parts as needed to keep these systems in good operating condition. In the event Tenant abuses or is negligent in the proper operation of the air conditioning system, then any and all expenses related to the repair of the air conditioning system(s) as a result of the abuse or negligent use shall be payable by Tenant to Landlord as additional rent. On the sixth anniversary of the Commencement Date of this Lease, Tenant shall have the option of either (a) paying to Landlord a base charge of six thousand dollars ($6,000.00) per annum for air conditioning maintenance thereafter adjusted annually by the same factor utilized in Addendum Section V, Paragraph 4. Subparagraph (f) Cost of Living Adjustments or; (b) electing to retain an independent contractor, acceptable to Landlord, to maintain the air conditioning system. Tenant shall notify Landlord of its intention at least thirty (30) days prior to the sixth anniversary date of the Lease. Tenant shall submit to Landlord the name of the air conditioning maintenance contractor for Landlord's approval, which approval will not be unreasonably withheld. In addition, if Tenant elects to retain an independent contractor, Tenant will return the air conditioning system(s) to Landlord at the end of the lease term, in its original condition on the Commencement Date less normal wear and tear. In the event that Tenant elects to maintain the air conditioning system by using an independent contractor for two consecutive years, Landlord will have the option to refuse to thereafter provide maintenance for the air conditioning system.
It is mutually agreed that the new air conditioning unit in Suite #74 shall be subject to the same conditions as pertain to the eight units in Suite #44 with the exception that the Tenant's
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maintenance payment obligation shall increase to six thousand seven hundred fifty dollars ($6,750.00) upon the seventh anniversary of the Commencement Date of the lease dated 23 March, 1995. All other terms and conditions under the lease of 23 March, 1995 apply.
Article 5 SEPTIC SYSTEM
It is agreed that the additional bathroom and sink drains installed in Suite #74 have been connected to cesspool systems already assigned for Tenant's exclusive use. Landlord and Tenant herewith agree that Addendum Section I, Paragraph 8. is herewith reaffirmed in its entirety.
Article 6 PROPANE HOT WATER HEATER
In order to reflect the actual as-built premises, Landlord recognizes that Tenant installed a propane fired hot water heater in Landlord's boiler room to provide hot water to the Leased Premises during the period April 15 to October 15 of each year. The parties have agreed that from October 16 to April 15, annually, Tenant shall receive, at no additional charge to Tenant, all its hot water from Landlord's oil fired hot water heating system reflecting the standard winter heating season. From April 16 to October 15, annually, Tenant shall be responsible for providing hot water at its sole expense. In recognition that the boiler is totally inactive during the summer season (April 16-October 15) and that the hot water heater is totally inactive during the winter season (October 16-April 15), it is agreed that the parties hereto will cause the propane tank to be filled annually at April 15th by the Landlord and October 15th by the Tenant in order to maintain a "found it full, left it full" system of expense allocation. As a convenience to Tenant, Landlord will order propane and bill Tenant as appropriate.
Article 7 RENT SECURITY
It is agreed that Tenant has leased additional improved space from the Landlord effective September 1, 1996, now therefore, the herein covenant shall modify Addendum Section V, Paragraph 1. Rent Security. Tenant shall be obligated to deposit an additional six thousand dollars ($6,000.00) rent security, payable, two thousand dollars ($2,000.00) September 1, 1997, two thousand dollars ($2,000.00) September 1, 1998 and two thousand dollars ($2,000.00) September 1, 1999. Said total amount to remain on deposit for the balance of the lease term with each deposit payment subject to all the terms and conditions applicable to rent security. All other provisions of Addendum Section V, Paragraph 1. are herewith reaffirmed in their entirety.
Article 8 GARBAGE/TRASH REMOVAL COST - FOR ESCALATION PURPOSES ONLY:
Addendum Section V, Paragraph 4. (d) Garbage/Trash Removal Cost - For Escalation Purposes Only is herewith amended to read $3,894.00 ($.30 x 12,980 sq. ft.) of the base annual rent is allocated to garbage/trash and recyclable material removal for the demised premises.
Kiddie Academy of Flowerfield Amendment #1 Page 3 of 6
Kiddie Academy of Flowerfield Amendment #1 Page 4 of 6
Landlord has reserved in the rental base a flat $.101 charge per square foot
for the removal of pallets, oversized debris, dumpster area cleanup, land
allocation expense and overhead charges. It is mutually agreed that the
$.30/sqft rate is a pro rata apportionment of cartage expenses for garbage and
separable recyclables. Any change in the Town of Smithtown Town Code which may:
establish a commercial cartage district, implement direct charge tipping fee(s)
and/or administrative assessment(s) on Landlord, change the composition of
required recyclable(s), or otherwise impact the total cartage expense allocable
to the demised premises shall be passed-through to Tenant. Further, if at any
time after the commencement of this lease and before the end of the lease term
period, the cartage rates charged to the Landlord by the Landlord's carter
increase, there will be an adjustment in the annual rent predicated on Tenant's
allocable base. Tenant's base "peg" for all additional charges, regardless of
source, shall be 12,980/100,214 sq. ft. or 13% of the total current bill of
$30,000.60. The total cartage bill for calculation purposes shall be deemed to
include all Town of Smithtown and cartage company charges plus applicable
federal, state and local taxes. Any resultant additional rental, converted to a
monthly charge, shall be added to the monthly rental rate in effect at that
time.
Article 9 PARKING
In order to reflect the actual as-built premises and accommodate Tenant's
rental of Suite #74, Addendum Section I, Paragraph 2. Parking is herewith
amended to read forty-five (45) in the parking area superseding the twenty-five
(25) spaces originally allocated. In addition, seven (7) parking spaces at the
entrance supersedes two (2) parking spaces at the entrance.
Article 10 TRADE FIXTURES
Section III, Paragraph 1. (f) is hereby amended to include:
Propane fired fast recovery Hot Water Heater
Awning with metal frame
Iron Mountain Forge 6502 - Play Center 2
Iron Mountain Forge KK48 - 3 Slide Climber
Iron Mountain Forge KK102 - Activity House
Iron Mountain Forge KK56 - Sand Structure with Roof
Iron Mountain Forge SR1 04-M - Whale Kid Rider Spring Rocker
Iron Mountain Forge SR1 06-IM - 4 Seat Teeter Totter
Iron Mountain Forge SR1 08-JM - Bulldozer Kid Rider Spring
Rocker Blinds in all interior and exterior windows
Miscellaneous shelving
Eight (8) GE refrigerators
Three (3) microwaves
One (1) Delfield commercial refrigerator
One (1) Three compartment sink
One (1) CresCor food warming unit
Kiddie Academy of Flowerfield Amendment #1 Page 4 of 6
Kiddie Academy of Flowerfield Amendment #1 Page 5 of 6
Miscellaneous pantry equipment
A leased ADT Security and Surveillance System
|
Article 11
It is mutually agreed and understood that Tenant has caused to have installed, at its sole expense, electrically operated germicidal sterilization units which are an integral part of the HVAC systems. It is agreed Tenant shall maintain said units at its sole expense.
Article 12 CORPORATE GUARANTY OF LEASE
The "Corporate Guaranty of Lease" dated March 23, 1995 will remain in full force and effect under the terms and conditions set forth in the Lease. However, the Parties hereby agree that although the Guarantor of the Lease, Maryland Day Care Centers, Inc. recognizes this Amendment #1 to the Lease, it does not guaranty those obligations beyond those guaranteed upon the execution of the Lease of March 23, 1995.
Article 13
This Agreement sets forth all of the covenants between the Parties to this Agreement respecting the matters set forth herein and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between or among them, other than as set forth in this Agreement and the Lease. This Agreement and the Lease is intended by the parties to completely express the full agreement of the Parties and has been entered after full investigation, neither party relying upon any statement made by anyone else that is not set forth in this Agreement or the Lease. Except as otherwise provided in this Agreement, no alteration, amendment, change or addition to this Agreement shall be binding on any party to this Agreement unless and until in writing and signed by the parties hereto.
The covenants, conditions and agreements contained herein shall bind and inure to the benefit of the parties hereto and their respective heirs, distributees, executors, administrators, successors and assigns.
This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
The Lease, except as amended herein, is in full force and effect.
Conflict: Should any conflict in terms and conditions arise between this Amendment and the Lease, the terms contained in this Amendment shall supersede over the conflicting terms in the Lease.
Kiddie Academy of Flowerfield Amendment #1 Page 5 of 6
Kiddie Academy of Flowerfield Amendment #1 Page 6 of 6
WITNESS: Gyrodyne Company of America, Inc.
10/7/97 /s/ [ILLEGIBLE}
-------------------------------- -----------------------------------
TENANT:
/s/ Carin A. Perez
-------------------------------- -----------------------------------
Carin Perez
/s/ Luis Perez
-------------------------------- -----------------------------------
Luis Perez
GUARANTOR:
Maryland Day Care Centers, Inc.
/s/ George Miller
-------------------------------- -----------------------------------
George Miller, President
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Kiddie Academy of Flowerfield Amendment #1 Page 6 of 6
EXHIBIT E 2
GYRODYNE COMPANY OF AMERICA, INC.
CARIN PEREZ AND LUIS PEREZ
C.O.L ADJUSTMENT SCHEDULE
5% INCREASE FIRST 3 YEARS AND 4% RATE INCREASE THEREAFTER
LEASE CALCULATED WITH 3 MONTHS FREE RENT AND DISCOUNT OF $160,716.35 APPLIED
IN FIRST THREE YEARS
NOMINAL REVENUE LESS
SUITE 44 UNADJUSTED $1 PER SO FT AVERAGE COST
BASE REVENUE @ DISCOUNT 3YRS PER SQ FT
RENTAL YEAR $17.50 & 3 MO'S FREE
*PER SQ. FT $17.50 11630 SOFT ANNUAL $203,525.00 SEP95-AUG96 $203,525.00 3M0 RENT FREE $112,464.66 $9.67
GROSS MONTHLY $16,960.42 SEP96-AUG97 $211,953.84 5% INCREASE $158,381.72 $13.62
SEP97-AUG98 $220,804.13 5% INCREASE $167,232.01 $14.38
SEP98-AUG99 $230,096.93 5% INCREASE $230,096.93 $19.78
SEP99-AUGOO $237,902.88 4% INCREASE $237,902.88 $20.46
SEPOO-AUGO1 $246,021.07 4% INCREASE $246,021.07 $21.15
------------- ---------------------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,350,303.84 $1,152,099.26 $16.51
------------- ---------------------------
SEPO1-AUGO2 $254,463.98 4% INCREASE $254,463.98 $21.88
SEPO2-AUGO3 $262,244.62 4% INCREASE $263,244.62 $22.63
SEPO3-AUGO4 $272,376.47 4% INCREASE $272,376.47 $23.42
SEPO4-AUGO5 $281,873.61 4% INCREASE $281,873.61 $24.24
SEPOS-AUGO6 $291,750.63 4% INCREASE $291,750.63 $25.09
------------- ---------------------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,383,709.31 $1,363,709.31 $23.45
------------- ---------------------------
TOTAL RENTAL FIRST 11 YEARS $2,714,013.15 $2,515,808.57 $19.67
------------- ---------------------------
ANNUAL
MONTHLY COLA MONTHLY COLA
RENT BASE (A) COLA INCREASE INCREASE
$12,496.07 (B) $168,576.85
$13,198.48 (B) $177,005.89 $702.40 $8,428.84
$13,936.00 (B) $185,855.98 $737.52 $8,850.28
$19,174.74 $195,148.78 $774.40 $9,292.80
$19,825.24 $202,954.73 $650.50 $7,805.95
$20,501.78 $211,072.92 $876.52 $8,118.19
-----------------
$16,697.09
-----------------
$21,205.33 $219,515.83 $703.58 $8,442.92
$21,937.05 $228,296.47 $731.72 $8,780.63
$22,698.04 $237,428.32 $780.99 $9,131.86
$23,489.47 $246,925.46 $791.43 $9,497.13
$24,412.55 $256,802.48 $823.08 $9,877.02
-----------------
$22,728.49
-----------------
$19,302.39
-----------------
|
SUITE 44 ADJUSTMENTS
(A) COLA BASE IS LOWER THAN THE BASE RENTAL BY $34,948.16 ($3.005 x 11630 SQ FT)
(B) THREE MONTHS FREE RENT OF $37,488.22 IS BASED ON ANNUAL NET RENT AFTER 1/3
OF THE DISCOUNT($203,525-$53,572.12/ 12 X3)
NOMINAL REVENUE LESS
SUITE 74 UNADJUSTED & 3 MO'S FREE AVERAGE COST
BASE REVENUE @ SEP 96 TO NOV 96 PER SQ FT
RENTAL YEAR $8.89 NO INCR. 33 MO'S
*PER SQ. FT $8.89 13.50 SOFT ANNUAL $12,000.00 SEP96-AUG97 $12,000.00 3M0 RENT FREE $9,000.00 $6.67
GROSS MONTHLY 51,000.00 SEP97-AUG98 $12,000.00 0% INCREASE $12,000.00 $8.89
SEP98-AUG99 $12,000.00 0% INCREASE $12,000.00 $8.89
SEP99-AUGOO $27,615.55 SUITE 44 RATE $27,615.55 $20.46
SEPOO-AUGO1 $28,557.91 SUITE 44 RATE $28,557.91 $21.15
------------- ---------------------------
TOTAL RENTAL INCOME FIRST 5 YRS $92,173.45 $89.173.45 $13.21
------------- ---------------------------
SEPO1-AUGO2 $29,537.95 SUITE 44 RATE $29,537.95 $21.88
SEPO2-AUGO3 $30,557.20 SUITE 44 RATE $30,557.20 $22.63
SEPO3-AUGO4 $31,617.22 SUITE 44 RATE $31,617.22 $23.42
SEPO4-AUGOS $32,719.84 SUITE 44 RATE $32,719.64 $24.24
SEPOS-AUGO6 $33,886.15 SUITE 44 RATE $33,866.15 $25.09
------------- ---------------------------
TOTAL RENTAL INCOME SECOND 5 YRS $158,298.16 $158,298.16 $23.45
------------- ---------------------------
TOTAL RENTAL FIRST 10 YEARS $250,471.61 $247.471.61 $18.33
------------- ---------------------------
ANNUAL
MONTHLY COLA MONTHLY COLA
RENT BASE (A) COLA INCREASE INCREASE
$1,000.00 (A) N/A N/A N/A
$1,000.00 (B) N/A N/A N/A
$1,000.00 (B) N/A N/A N/A
$2,301.30 (C) N/A N/A N/A
$2,379.83 N/A N/A N/A
-----------------
$1,292.37
-----------------
$2,461.50 N/A N/A N/A
$2,546.43 N/A N/A N/A
$2,634.77 N/A N/A N/A
$2,726.64 N/A N/A N/A
$2,822.18 N/A N/A N/A
-----------------
$2,638.30
-----------------
$1,918.38
-----------------
|
SUITE 74 ADJUSTMENTS
(A) FREE RENT SEP OCT & NOV 1996
(B) RENT REMAINS @ $1,000 PER MONTH FROM DEC 96 THROUGH AUGUST 1999
(C) RENT PER SQ FT AT SEPT 1, 1999 AND THEREAFTER REVERTS TO RATE PER SQ FT FOR
SUITE 44
COMBINED SUITES RENT FOR COMBINED SUITE 44 & 74
NOMINAL REVENUE LESS
UNADJUSTED DISCOUNT ADJ AND AVERAGE COST
REVENUE FREE RENT ADJ. PER SQ FT
YEAR FOR BOTH SUITES
SUITE 44 SQ FT 11630 SEP95-AUG96 $203,525.00 $112,464.66 $9.67
SUITE 74 SQ FT 1350 SEP96-AUG97 $223,953.84 $167,381.72 $12.90
COMBINED ----- SEP97-AUG98 $232,804.13 $179,232.01 $13.81
12980 SEP9B-AUG99 $242,096.92 $242,096.92 $18.65
===== SEP99-AUG00 $265,518.43 $265,518.43 $20.46
SEPOO-AUGO1 $274,578.97 $274,578.97 $21.15
------------- ---------------------------
$1,442,477.29 $1,241,272.71 $15.94
------------- ---------------------------
SEPO1-AUGO2 $284,001.93 $284,001.93 $21.88
SEPO2-AUGO3 $293,801 82 $293,801.82 $22.63
SEPO3-AUGO4 $303,993.69 $303,993.69 $23.42
SEPO4-AUGO5 $314,593.24 $314,593.24 $24.24
SEPO5-AUGO6 $325,616.78 $325,616.78 $25.09
------------- ---------------------------
$1,522,007.46 $1,522,007.46 $23.45
------------- ---------------------------
$2,964,484.76 $2,763,280.18 $19.35
------------- ---------------------------
ANNUAL
MONTHLY COLA MONTHLY COLA
RENT(D) BASE (A) COLA INCREASE INCREASE
$12,496.07 $168,576.85
$14,198.48 (D) $177,005.69 $702.40 $8,428.84
$14,936.00 $185,855.98 $737.52 $8,850.28
$20,174.74 $195,148.78 $774.40 $9,292.80
$22,126.54 S202,954.73 $650.50 $7,805.95
$22,881.58 $211,072.92 $876.52 $8,118.19
-----------------
$17,802.24
-----------------
$23,666.83 $219,515.83 $703.58 $8,442.92
$24,483.48 $228,296.47 $731.72 $8,780.63
$25,332.81 $237,428.32 $760.99 $9,131.86
$26,216.10 $246,925.46 $791.43 $9,497.13
$27,134.73 $256,802.48 $823.08 $9,877.02
-----------------
$25,366.79
-----------------
$20,933.94
-----------------
|
(D) SEP 96 THROUGH NOV 96 RENT IS $13196.48, DEC 96 THROUGH AUG 97 RENT IS $14,198.48
LEASE AMENDMENT
Reference is made to a Lease between Gyrodyne Company of America, Inc. (Landlord) and Carin and Luis Perez (Tenant), for Premises located at 7 Flowerfield, Suite 44, dated March 23, 1995 (the "Lease").
The parties hereto, agree that the Lease is hereby amended as follows:
A. The contingency for any approval or pre-approval of Tenant's license, on page three (3), Tenant's Lease Contingency, of the Lease, to operate a day care center, is hereby considered satisfied and is waived accordingly.
B. The Lease is otherwise in full force and effect.
C. Conflict: Should any conflict in terms and conditions arise between this Amendment and the Lease, the terms contained in this Amendment shall supersede over the conflicting terms in the Lease.
IN WITNESS WHEREOF, the parties have caused these presents to be executed under seal the day and year first above written.
WITNESS:
TENANT:
/s/ Marian P. Anderson /s/ Carin A. Perez
-------------------------------- -----------------------------------
Carin Perez
/s/ Marian P. Anderson /s/ Luis Perez
-------------------------------- -----------------------------------
Luis Perez
GUARANTOR:
Maryland Day Care Centers, Inc.
/s/ Donna [ILLEGIBLE] BY: /s/ George Miller
-------------------------------- --------------------------------
George Miller, Its President
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CARIN PEREZ AND LUIS PEREZ Lease Page 1 of 43 |
GYRODYNE COMPANY OF AMERICA, INC.
ADDENDUM
TABLE OF CONTENTS
Landlord Lease Contingency
Tenant Lease Contingency
Section I - Utilities and Service
1. Custodial Services
2. Parking
3. Electricity
4. Light Fixtures
5. Air Conditioning Maintenance
6. Heat
7. Garbage
8. Septic System
9. Water
10. Fire Protection Equipment
11. Hazardous Materials
12. Dust Collection Equipment
13. Compliance with Americans with Disabilities Act
14. Alarm System
15. Keys
Section II - Repairs, Access, Forced Entry, and Right of Recovery
1. Structural Repairs
2. Maintenance of Equipment and Fixtures
3. Access for Ingress and Egress
4. Repairs and Emergency Access
5. Privacy and Forced Entry
6. Eminent Domain
7. Maintenance by Landlord during Tenancy and Tenant's Right
of Recovery
8. Access Prior to Term
Section III - Alterations
1. Consent by Landlord and Permits
(a) Contractor's Insurance
(b) Electrical System
(c) Carpeting
(d) Exterior Architecture
(e) Signs
(f) Trade Fixtures
(g) Removal and Reversion
Section IV - Use Restrictions
1. Zoning
Variance or Special Exception
2. Sublet
3. Non-Nuisance
4. Paint Spraying
5. Activity Restrictions
Section V - Financial Obligations of Tenant -
CARIN PEREZ AND LUIS PEREZ Lease Page 1 of 43
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CARIN PEREZ AND LUIS PEREZ Lease Page 2 of 43
Escalators, Penalties, and Remedies
1. Rent Security
2. (a) Fire Insurance
(b) Liability Insurance
3. Broker
4. Lease Term and Adjustments
Renewal Options
Rent Abatements
(a) Real Estate Taxes
(b) Heat/Fuel Oil Cost
(c) Insurance
(d) Garbage/Trash Removal Cost
(e) Security Guards
(f) Cost of Living Adjustment
5. Accounting Methods
6. Late Payment Penalties
7. Additional Rent
8. Cessation of Utilities
9. Notices and Service of Process
10.Default by Tenant
11. Allocation of Partial Payments and Disputes
12. Rent Acceleration
13. Language
Interpretation and Construction
14. Headings
15. Attorney's Fees
16. Address Designation
17. Early Termination
18. Lease Amendments & Subordination
19. Estoppel Certificate
20. Legal Venue
21. Exclusivity
22. Counterparts
Section VI - Vacation and Abandonment
1. Holdover
2. Guarantees
3. (a) Abandoned Property
(b) Unauthorized Vehicles
(c) Unplated Vehicles
(d) Waste
4. Entire Agreement
CARIN PEREZ AND LUIS PEREZ Lease Page 2 of 43
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CARIN PEREZ AND LUIS PEREZ Lease Page 3 of 43 |
ADDENDUM TO LEASE
Between
GYRODYNE COMPANY OF AMERICA, INC.
(Landlord)
and
CARIN PEREZ AND LUIS PEREZ
(Tenant)
LANDLORD'S LEASE CONTINGENCY
The obligations of Landlord under this Lease are conditioned upon issuance, on or before April 1, 1995 of a written commitment from any institutional lender pursuant to which such institutional lender agrees to make a loan to Landlord, at Landlord's sole cost and expense, of five hundred thousand dollars ($500,000.00) or such lesser sum as Landlord shall be willing to accept, at the prevailing rate of interest, not to exceed the prime interest rate plus two percent for a term not to exceed ten years and on other customary commitment terms. Landlord shall make prompt application to an institutional lender for such loan, pay all fees, points and charges required in connection with such application and loan; pursue such application with due diligence; cooperate in good faith, with such institutional lender to obtain such commitment; and promptly give notice to Tenant after receipt of such written commitment. If Landlord does not obtain such written commitment by May 15, 1995, or as otherwise agreed to by the parties hereto Landlord may cancel this Lease by giving notice to Tenant within five (5) days of May 15, 1995, in which case the Lease shall be deemed cancelled and thereafter neither party shall have any further rights against or obligations or liabilities to the other by reason of this Lease, except that the partial payment of the Security Deposit shall be promptly returned to Tenant.
TENANT'S LEASE CONTINGENCY
This Lease Agreement is expressly contingent upon Tenant's ability to obtain, or be assured that it can obtain, the necessary Pre-approval(s) and/or License(s) to operate a child care facility for at least 175 children of ages six (6) weeks to twelve (12) years within five (5) days of May 15, 1995. Said Pre-approvals or License(s) shall be subject only to completion of construction of Tenant's improvements. In the event Tenant is unable to obtain the necessary Pre-approval(s) and/or License(s), this Lease shall automatically terminate and all monies exchanged from Tenant to Landlord shall be returned to Tenant within fourteen (14) days of termination of this Lease Agreement, with neither party having any further liability hereunder.
SECTION I - UTILITIES AND SERVICE
1. CUSTODIAL SERVICES - Tenant will, at its expense, provide custodial services to the Leased Premises. Tenant shall not permit window cleaning or other exterior maintenance and/or janitorial services in and for the premises to be performed, except by such person(s) as
CARIN PEREZ AND LUIS PEREZ Lease Page 3 of 43
CARIN PEREZ AND LUIS PEREZ Lease Page 4 of 43
shall be approved by Landlord and except during reasonable hours designated for such purposes by Landlord.
2. PARKING - Through the Lease Term, Landlord shall provide, at no cost to Tenant, a minimum of twenty-five (25) spaces in the parking area proximate to the Leased Premises for the exclusive use of Tenant. In addition, Landlord shall provide a minimum of two parking (2) spaces at the entrance to the Building or Leased Premises for the exclusive use of parents who are dropping off or picking up children. The foregoing parking areas shall be conspicuously marked with appropriate signage by Landlord to indicate their reserved use as described above. Maintenance of parking areas and roads leading to the demised premises shall be the sole responsibility of the Landlord.
3. ELECTRICITY - The electric power for the demised premises will be provided via the Landlord's "house" meter(s), which exclusively service the demised premises, and the Tenant shall be billed, by the Landlord, on the basis of the kilowatt consumption and demand recorded by the meter(s) at the prevailing Long Island Lighting Company (LILCO) rate in effect at the time of the meter reading by the Landlord. Tenant will be provided with Landlord's computation of Tenant's electricity consumption on a monthly basis.
Landlord agrees to arrange with the Long Island Lighting Company (LILCO) to conduct a test of Electromagnetic Fields (EMF) in the outdoor area adjacent to the demised premises and the electric power sub station. In the event that there is any alteration of equipment at the electric power sub station of which Landlord is apprised, Landlord will arrange a subsequest EMF test with LILCO. Landlord makes no representations and assumes no liability as to the veracity of any EMF tests conducted by LILCO.
4. LIGHT FIXTURES - The Landlord warrants that the overhead lighting fixtures including fluorescent tubes shall be in good working condition at the time Tenant commences initial occupancy of the Leased Premises and for one month thereafter. Subsequently, the Tenant shall be responsible, at its expense, for the replacement of tubes and/or ballasts. Tenant shall, at the end of tenancy, return to the Landlord all lighting fixtures with lamps and ballasts in good operating condition. In the event Tenant vacates the premises and repairs/replacements are required, Landlord shall bill tenant for any and all work performed on the lighting fixtures to restore them to their original condition less normal wear and tear.
5. AIR CONDITIONING MAINTENANCE - There are four (4) ten (10) ton roof air conditioning systems that serve the demised premises. The Tenant shall have the option to utilize these systems provided Landlord is notified by Tenant, not later than March 1st of each year, that said systems will be used. For the first five (5) years of this Lease, the Landlord shall, at no cost to Tenant, on a best efforts basis, maintain, service, repair, and replace parts as needed to keep these systems in good operating condition. In the event Tenant abuses or is negligent in the proper operation of the air conditioning system, then any and all expenses related to the repair of the air conditioning system(s) as a result of
CARIN PEREZ AND LUIS PEREZ Lease Page 4 of 43
CARIN PEREZ AND LUIS PEREZ Lease Page 5 of 43
the abuse or negligent use shall be payable by Tenant to Landlord as additional rent. On the sixth anniversary of the Commencement Date of this Lease, Tenant shall have the option of either (a) paying to Landlord a base charge of six thousand dollars ($6,000.00) per annum for air conditioning maintenance adjusted annually by the same factor utilized in Addendum Section V Paragraph 4. Subparagraph (f) Cost of Living Adjustments or; (b) electing to retain an independent contractor to maintain the air conditioning system. Tenant shall notify Landlord of its intention at least thirty (30) days prior to the sixth anniversary date of the Lease. Tenant shall also submit to Landlord the name of the air conditioning maintenance contractor for Landlord's approval, which approval will not be unreasonably withheld. In addition, if Tenant elects to retain an independent contractor, Tenant will return the air conditioning system in its condition on the Commencement Date less normal wear and tear.
6. HEAT - Landlord, at its expense, shall provide heat in accordance with Government guidelines, during normal working hours: 6:30AM to 7:00PM Mondays through Fridays, except holidays, (Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas and New Year's Day).
7. GARBAGE - Tenant will handle and dispose of all rubbish, debris, garbage, and waste from Tenant's operation in accordance with regulations established by Landlord and those of all governmental agencies having jurisdiction, and not permit the accumulation (unless in concealed metal containers), or burning, of any rubbish or garbage in, on, or about any part of Flowerfield, and not permit any garbage or rubbish to be collected or disposed of from the premises, except by Landlord or its designee. All Tenant's garbage must be put in plastic bags, securely tied at the top, and placed in "GCA" dumpsters located at the extreme south end of Parking Lot No. 7. Cardboard must be separated from garbage and placed in the special containers designated for cardboard only. All cardboard boxes and shipping packaging must be "flattened" before being inserted into the designated receptacles. Landlord reserves the right to require Tenant, at Tenant's expense, to acquire a dumpster(s) for Tenant's use if Landlord deems Tenant is regularly generating excessive waste materials.
Additionally, Tenant shall not permit debris, waste materials, or garbage to collect in front of, around, alongside, or in back of the demised premises. Tenant shall at all times keep the apron immediately in front of the demised premises clean and orderly. In the event Landlord deems the "housekeeping" inadequate, then Landlord shall have the right to clean up the affected area and charge Tenant for such cleanup.
Tenant, at its own cost and expense shall keep the demised premises free from vermin, rodents or anything of like, objectionable nature and shall employ only such vermin exterminating contractors as approved by Landlord. In the event of Tenant's failure to keep the demised premises free from vermin, Landlord has the right, at Tenant's expense, and after prior notice to Tenant, to take all necessary or proper measures to eradicate any and all vermin from the demised premises.
CARIN PEREZ AND LUIS PEREZ Lease Page 5 of 43
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Industrial waste, such as metal chips, oils, solvents, chemicals, sheet metal, wood crates, pallets, etc. may not be placed in the dumpster. The Tenant, at its expense, must dispose of all industrial waste in conformance with New York State environmental Conservation Law. Landlord shall have the right to demand and receive copies of bills of conveyance to a government certified and/or government registered carting company for environmentally sensitive and/or hazardous waste materials which were at any time at Flowerfield as a result of Tenant's operations.
8. SEPTIC SYSTEM - It is mutually agreed and understood that a typical septic system for one of Landlord's buildings includes a soil line from the bathrooms to the septic tank, and an interconnect pipe(s) from the septic tank to either a distribution box or directly to one or more cesspools. It is agreed that the demised premises includes a set of bathrooms, currently in good working order, which are for the exclusive use of the Tenant and that any and all expenses relating to repairs for stopped-up toilets, backed-up sinks, and/or clogged drains and soil lines shall be borne solely by Tenant unless such repairs are attributable to the malfunctioning of the septic system due to structural constraints such as an age related reduction in usable capacity. Structural repairs to the soil line, interconnect pipe(s) distribution box, septic tank, or cesspool shall be the sole responsibility of the Landlord provided that such repairs were not caused by the misuse of the facilities by Tenant.
It is understood that all materials removed from commercial building cesspools by carters are tested for toxic chemicals by Suffolk County Department of Health. Tenant shall be required, on demand, to provide Landlord, within a reasonable period of time, a list of chemicals, if any, by quantity and composition, used or stored in Tenant's operation which are listed under Section 313 of the Superfund Amendments and Preauthorization Act (SARA).
9. WATER - In the event that a municipal water authority water meter(s) specific for Building #7 is provided during the lease term, it is agreed that Tenant shall henceforth pay any and all charges for its water usage. If the water meter is not Tenant specific, a water charge computation will be predicated either on a ratio of rented square footage to total building square footage or on a ratio of rented square footage to water feed service area. Further, Tenant shall pay, calculated on 164,413 square feet base, its prorata share for fire hydrant charges assessed by the water authority.
10. FIRE PROTECTION EQUIPMENT - The Tenant shall be required to supply its own fire extinguishers of the appropriate size and classification consistent with the Smithtown Fire Code, ISO and the Fire Insurance Underwriter Inspection regulations. Furthermore, the Tenant agrees to have said extinguishers periodically inspected, recharged and/or serviced as required, and tagged showing compliance to the aforesaid codes and regulations. Landlord will notify Tenant of the number and type of fire extinguishers required upon approval of the floor plan for the day care center.
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In the event Tenant is requested to provide any of the local Fire Departments which have jurisdiction with a list of hazardous chemicals, Tenant shall provide same in an expeditious manner with a copy being given to the Landlord.
The Landlord reserves the right to inspect the demised premises to assure Tenant compliance with this requirement and to insist upon strict adherence to the necessary procedures.
11. HAZARDOUS MATERIALS - Tenant shall not bring, keep or use in or upon the demised premises of the building of which they form a part, any solvent having a flash point below 110F, nor shall any liquid which emits volatile vapors below the temperature of 100 F be brought, kept or used in or upon the demised premises of the building except: If the process using such liquids shall be conducted in a room of fire resistant construction, as defined by the Fire Insurance Rating Organization. (FIRO) If more than one but not more than two gallons of such liquids are kept on the premises, they must be stored in safety cans and kept in a cabinet constructed by Tenant in a manner approved by the FIRO. Reasonable amounts in excess of ten gallons may be kept if they are stored in a vault constructed by Tenant in a manner approved by FIRO. Any use or storage of such liquids shall at all times be in accordance with the requirements of the FIRO, OSHA, NFPA, and the Fire Department Board of fire Underwriters.
12. DUST COLLECTION EQUIPMENT - In the event Tenant's operation generates airborne particles, such as sawdust, the Tenant shall be required to install and maintain a dust collection system acceptable to the Landlord in order to contain the dispersion of the generated dust. Tenant shall also be responsible for any cleanup maintenance required of the area immediately adjacent to the demised premises, which shall include hallways, foyers, and outside areas. Tenant shall be responsible, on a monthly basis , to clean and maintain any external doors which have been subjected to the accumulation of dust.
Airborne particles such as vapor, generated by spraying glue, etc., will require the installation of proper ventilation, exhaust equipment, and explosion proof fixtures as required by Building Code Regulations. ALL EXHAUST SYSTEMS TO THE ATMOSPHERE REQUIRE THE APPROPRIATE FILTERS FOR THE SPECIFIC TYPE OF MATERIALS/VAPOR BEING VENTED.
13. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT - Tenant hereby represents that it is familiar with the Americans with Disabilities Act. Landlord hereby warrants that, on the commencement date of this Lease, the demised premises will be in compliance with the Americans with Disabilities Act and all other applicable laws and ordinances. Tenant further represents that, after occupancy, it will not require Landlord to bear the cost of any interior alterations to the demised premises which Tenant may require in order to comply with future changes in the Americans with Disabilities Act or any similar law enacted by any federal, state or local governmental agency, whether or not such laws are retroactive to the commecement date of the Lease or some other date prior to the commencement date of the Lease.
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14. ALARM SYSTEM - The following provision is only applicable to alarm systems other than the fire alarm and sprinkler systems.
In the event Tenant desires to have installed a leased or rented third party owned alarm system, then it is mutually agreed and understood that Tenant agrees to a minimum of $100.00 exit charge at the end of tenancy. Landlord has established this minimum charge predicated on past experience of damage done to doors, window, walls, painted surfaces, and the required availability of Landlord's personnel when the third party vendor has to remove said system.
In the event Tenant causes to be installed a Tenant or Landlord owned alarm system, applicable exit charges, if any, would be assessed predicated on any damage found at the end of tenancy.
15. KEYS - Landlord shall provide Tenant keys to the demised premises. Upon receipt thereof, it will be the Tenant's responsibility to safeguard these items. The loss of a key(s) will entail a charge to cover its replacement. If such loss results in the necessity of replacing the lock, then a charge will be levied against the Tenant for such replacement cost. The charge for a lost key is Ten ($10.00) dollars; a door lock is Forty ($40.00) dollars.
Key Number _____ Number of Keys _____
Number of Mills Pond Road South Gate Keys: 2
SECTION II - REPAIRS, ACCESS, FORCED ENTRY, AND RIGHT OF RECOVERY
1. STRUCTURAL REPAIRS - Notwithstanding terms and condition contained in the second Covenant of the preprinted portion of the Lease, the Landlord will be responsible for structural repairs to the roof, walls, foundation and exterior of the demised premises excluding the exterior doors and windows. Landlord will maintain the exterior of the building in which the demised premises are located which repairs were not necessitated or otherwise caused by any act of Tenant, its servants, agents and/or employees, invitees, subtenants and/or licensees.
2. MAINTENANCE OF EQUIPMENT AND FIXTURES - It is mutually agreed and understood that with respect to all equipment and fixtures as exists in the demised premises, the Tenant is responsible for maintaining same in safe working condition. Said equipment and fixtures are deemed to include, but not be limited to, light fixtures, fire alarms, personnel and overhead doors, and fire extinguishers. Tenant agrees to hold harmless, defend, and indemnify Landlord from any and all claims arising from direct, indirect, or consequential injury or damage to any party, either personal or property, which injury or damage may
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have been a result of Tenant's failure to adequately maintain said equipment and/or fixtures.
3. ACCESS FOR INGRESS AND EGRESS - The sidewalks, stoops, areas, entry, vestibules, passages, corridors, halls, elevators and stairways of the demised premises and common areas shall not be encumbered or obstructed by Tenant, its agents, clerks, servants or customers or be used by them for any other purpose than for ingress and egress to and from the demised premises. The demised premises may not be cluttered by boxes, garbage or other material. If Landlord directs that any of the foregoing items be removed from the demised premises, Tenant shall promptly comply with such direction.
4. REPAIRS AND EMERGENCY ACCESS - Tenant shall permit Landlord and/or its designee to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires, in, to and through the premises, as and to the extent that Landlord may now or hereinafter deem to be necessary or appropriate for the proper operation and maintenance of the building in which the premises are located or any other portion of Flowerfield. All such work shall be done, so far as practicable, in such manner as to avoid interference with Tenant's use of the premises. Notwithstanding anything else contained herein to the contrary, in the event of an emergency, Landlord may enter the premises of the Tenant immediately and Tenant shall cooperate with the Landlord in providing said immediate access.
5. PRIVACY AND FORCED ENTRY - It is agreed and understood that if Tenant changes or adds additional locks to any entrance or egress from the demised premises, then Tenant shall provide Landlord with a key or a combination to be utilized for access purposes. All locks changed must be returned to the Landlord for reinstallation, at Tenant's expense, at the end of tenancy. In the event a situation arises which in the opinion of the Landlord or Public Safety Officials (Police, Fire Dept., Code Enforcement, etc.) necessitates entrance to the premises during a period when Tenant is not available to provide access, and Tenant has not provided said key or combination, then any expenses resulting from damage to the premises required by a forced entry shall be borne solely by Tenant. The addition of locks and/or security devices shall be deemed to be an alteration as defined under Section III of this Addendum, and therefore, subject to all the provisions governing alterations and reversion.
6. EMINENT DOMAIN - For the purposes of clarification, the following shall apply to Covenant Fifth of the preprinted portion of the lease. The definition of apportionment of rent shall be based on the reduction in permitted occupancy determined by the competent civil authority, currently the New York State Department of Social Services, which shall be based on the same formula (mix of students) used to calculate occupancy before the taking of a part of the premises. In the event more than fifty percent of the premises are taken, then Tenant shall have the option to terminate this lease as of the day of taking with Tenant's residual obligations the same as if the lease had run its full term.
Further, Covenant Fourth, FIRE CLAUSE, of the preprinted portion of the lease, notwithstanding to the contrary, in the event more than fifty percent of the premises are
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taken, then Tenant shall have the option to terminate this lease as of the day of casualty with Tenant's residual obligations the same as if the lease had run its full term.
7. MAINTENANCE BY LANDLORD DURING TENANCY AND TENANT'S RIGHT OF RECOVERY - Paragraph thirteen of the preprinted portion of the Lease is hereby amended to add the following: "Tenant's only recourse against Landlord in the event of loss or damage to the property and/or business of the Tenant resulting from fire or other casualty or cessation and/or interruption of Tenant's business due to repairs and/or interruption of Tenant's business due to repairs and/or interruption of Tenant's business due to repairs and/or compliance with mandated items required on the part of the Landlord shall be based on a formula which will require Tenant to pay a percentage of the rent. The percentage deducted from the base rent will be determined with the numerator being the number of children Tenant is not able to service in the demised premises and the denominator being the number of children Tenant is permitted to service in the demised premises as determined by the Department of Social Services. The resulting percentage will be multiplied by the base rent subject to C.O.L. adjustments and will be deducted from the base rent for the number of days during which Tenant was unable to utilize that portion of the demised premises. In the event that the damage is caused by an act of God which would otherwise have prevented children from attending Tenant's facility, Tenant will not be permitted to deduct partial rent. Tenant hereby agrees to provide access to premises for Landlord to comply with its obligations as aforesaid, the time and duration of said access to be at the sole discretion of the Landlord who will proceed in as reasonable a manner as possible under the circumstances. It is hereby agreed that the Landlord's determination shall be conclusive and binding on all parties hereto."
8. ACCESS PRIOR TO TERM - At anytime during the four (4) week period prior to the Commencement Date, Tenant and its agents, servants, employees and contractors may enter the Leased Premises for purposes of installing Tenant's furnishing, fixtures, telephones and other equipment. Such entry shall constitute the agreement of Tenant that none of such parties nor their work, equipment, or materials will interfere with the work of Landlord in the Leased Premises. Tenant's failure to install necessary furnishing, fixtures, telephones and other equipment within such four week period will not cause a delay in the commecement of the lease term.
ACCESS AT END OF TENANCY - It is mutually agreed and understood that in
order for Landlord to relet the premises to a new tenant on the first day
of the month immediately following the vacation date stipulation in
Section VI paragraph #1 of this addendum, Landlord shall require and be
granted by Tenant, during normal working hours, unhindered access to the
demised premises during the last week of tenancy for the express purpose
of making repairs, which repairs shall include, but not be restricted to:
dry wall patching, spackling, painting, floor cleaning, equipment
servicing, pipe repairs, and HVAC maintenance.
SECTION III - ALTERATIONS
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1. CONSENT BY LANDLORD AND PERMITS - The following provision does not apply to improvements performed by Landlord or any contractor retained by Landlord. It is hereby covenanted and agreed that Tenant shall not make alterations to any building(s) and/or property Tenant has rented or has been given access to by Landlord without the express written consent of the Landlord. In the event Tenant is authorized to make alterations, then Tenant shall be responsible for all permits and inspections as may be required by state and local building codes. If as a cause of Tenant's alterations and the governing ordinances shall require, Tenant shall secure as necessary, either a current Certificate of Occupancy or a Certificate of Conformance for the demised premises.
(a) CONTRACTOR'S INSURANCE - Prior to commencement of any work by or for Tenant by other than the Landlord working as General Contractor, Tenant shall furnish Landlord certificates evidencing the existence of the following insurance:
(1) Worker's Compensation Insurance covering all persons employed for such work and with respect to whom death or bodily injury claims could be asserted against Landlord, Tenant or the demised premises.
(2) General liability insurance naming Landlord its designees, and Tenant as insureds, with limits of not less than $1,000,000 in the event of bodily injury to one person and not less than $2,000,000 in the event of bodily injury to any number of persons in any one occurrence, and with limits of not less than $100,000 for property damage. Tenant, at its sole cost and expense, shall cause all such insurance to be maintained at all times when the work to be performed for or by Tenant is in progress. All such insurance shall be in a company authorized to do business in New York, and all policies, or certificates therefore, issued by the insurer and bearing notations evidencing the payment of premiums, shall be delivered to Landlord.
Tenant agrees to compensate Landlord for the reasonable cost of reviewing construction and design plans and Tenant shall pay for all reasonable costs incurred resulting from such review and inspections as Landlord may require.
(b) ELECTRICAL SYSTEM - The Tenant shall not, under any circumstances, make changes to the existing electrical service servicing the premises, the internal wiring leading from the distribution box/boxes to overhead lights, wall outlets, buss ducts, etc., without the prior written authorization of Landlord. It is agreed that all electrical work shall be done by a licensed electrician and said work, at Landlord's sole discretion, may require Tenant to obtain New York Board of Fire Underwriter approval.
(c) CARPETING - If the Tenant elects to install carpeting to cover any floor section(s) of the premises, a water soluble glue must be used to prevent damage to the floor in the event said carpeting is subsequently removed. Any such damage shall be
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considered the fault of the Tenant who will be responsible for any and all incurred expenses to restore the floor to its original condition. In the event Tenant occupies the demised premises with a carpet already "in-place" which the Tenant finds acceptable, then, if required at the end of tenancy, disposal of the in-place carpet shall be deemed to be Tenant's responsibility as set forth above for new installations.
(d) EXTERIOR ARCHITECTURE - Tenant shall not change (whether by alteration, replacement, rebuilding or otherwise) the exterior color and/or architectural treatment of the premises or of the building in which the demised premises are located, or any part thereof.
(e) SIGNS - Notwithstanding terms and conditions contained in the third Covenant of the preprinted portion of the Lease, Tenant shall be permitted to affix to the building an identification sign provided the design, color, and composition (includes neon type signs) are approved by the Landlord in writing. Landlord shall provide Tenant with the appropriate dimensions for the sign predicated on the building exterior geometry and the size of the demised premises. In no event shall the sign be larger than twenty five (25) square feet of total area. Tenant must submit a sketch or photo of the proposed sign for approval. Placement of the sign will be at the reasonable discretion of Landlord. No other signs are permitted in, about, or on the Flowerfield Park grounds unless specifically approved in writing by the Landlord. Landlord reserves the right to remove any nonconforming sign(s) and Tenant agrees to indemnify Landlord against any claims for any damages arising either directly, indirectly, or consequentially from any acts of Landlord in regards to the removal of said nonconforming sign(s). Tenant waives any and all claims against Landlord for the removal of any nonconforming signs.
In addition, upon Landlord's commencement of tenant improvements in the Leased Premises, Tenant will be permitted to erect on the exterior of the building a "Coming Soon" sign, advertising Tenant's business. Tenant is permitted by Landlord, subject to approval by the Town of Smithtown, to erect a temporary and permanent illuminated roadway sign on Landlord's property adjacent to Landlord's Mills Pond Road entrance. In the event that the Town of Smithtown approves the erection of an illuminated sign, Landlord will provide wiring to permit illumination of the sign.
Tenant shall be entitled to a name-location plate on the main directory sign at no cost to the Tenant. The plate shall be consistent with other plates on the sign in both overall size, color, and layout. In the event Landlord does not provide said plate, Tenant agrees that its only remedy shall be solely the cash value of the plate itself. Landlord's acceptance of any name for listing on the Flowerfield Park Directory will not be deemed, nor will it substitute for, Landlord's consent, as required by this Lease, if such covenants be applicable, to any sublease, assignment, or other occupancy of the demised premises.
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Erection of certain signs may be subject to the approval of the Town of Smithtown Building Department and any other municipal agency with jurisdiction over signs. Tenant will obtain any sign permits required by the Town of Smithtown prior to the erection of any sign. Landlord hereby prohibits the erection of any signs not conforming with town ordinances.
(f) TRADE FIXTURES - It is mutually agreed and understood that Tenant has caused to be installed; assumed in place either by purchase, lease, rental, default, or other manner; or otherwise has the exclusive use of the herein defined trade fixtures listed below but not restricted to the following:
It is agreed that it shall be Tenant's sole financial responsibility to remove Tenant's trade fixtures as have been defined herein. Tenant shall be solely responsible for reverting the demised premises to its condition on the commencement date after vacation at the end of tenancy unless Landlord has directed, in writing, that certain improvements associated with the installation of the trade fixtures are considered attached to the freehold and, therefore, property of the Landlord.
(g) REMOVAL AND REVERSION - It is further agreed that Tenant shall not remove or cause to be removed any fixtures, wiring, electrical panels, plumbing, fans, equipment, water pipes, or any other installation that was "in place" in or about the demised premises at the onset of tenancy without the express written consent of the Landlord. Any and all improvements, changes, and/or additions to the demised premises shall be removed at Tenant's expense or left in place at the sole discretion of the Landlord. In no event may Tenant remove any electrical equipment that was in place in the demised premises prior to Tenant's tenancy.
It is further agreed that if the herein defined lease shall be a successor to or in lieu of another lease between Landlord and Tenant for these demised premises and said prior lease would run continuously or concurrently if not terminated, it is understood that Landlord does not waive nor is Landlord diminished with respect to any claims for removal or reversion which may have been perfected by any prior lease, as stipulated herein, by virtue of this lease.
At the end of the Tenancy, the demised premises and all improvements comprising a part thereof will be delivered to Landlord in broom clean condition, ordinary wear and tear excepted, vacant and together with all keys to the demised premises.
SECTION IV - USE RESTRICTIONS
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1. ZONING - It is mutually agreed and understood that in the event Landlord does not secure a Special Exception for use as a Day Care Center and/or Tenant's use of the premises is held to be in violation of the Town or Local law or ordinances, the lease shall be considered and will be terminated by mutual consent and there shall be no further obligation on the part of either Landlord or Tenant.
VARIANCE OR SPECIAL EXCEPTION - Landlord and Tenant acknowledge that a special exception is required by the zoning ordinances for the specific occupancy by Tenant. Any and all costs, such as filing and legal fees, related to the filing and/or securing of a variance or special exception shall be borne solely by the Landlord. Landlord, at its sole discretion, may elect not to permit tenancy if restrictive covenants are attached to the variance or special exception such that observance of the restrictive covenants would, in Landlord's opinion, negatively impact Landlord or other tenants at Flowerfield. Tenant agrees to reimburse Landlord for the application fee of six hundred dollars ($600.00) paid to the Town of Smithtown Zoning Board of Appeals in the event that the application for special exception is denied.
2. SUBLET - The Tenant shall not have the right to sublease any part of the demised premises. The above notwithstanding to the contrary, Landlord hereby grants its consent to Tenant entering into the Collateral Assignment of Lease which is attached to this Lease as Exhibit D and incorporated by reference herein and further agrees that in the event of a sale or transfer of the Kiddie Academy Child Care Learning Center to a new owner approved in writing by Franchisor (as hereinafter defined), this Lease shall be assigned to such new owner. In addition, Landlord specifically consents to Tenant assigning this Lease to a corporation wholly owned by Tenant. In the event of such assignment, Tenants agree to personally co-guarantee the Lease.
3. NON - NUISANCE - The Tenant agrees to conduct its work operations within the demised premises in such manner as to be considered nuisance-free to other Tenants, Landlord's neighbors, and the Landlord, and to perform good "housekeeping" practices in order to satisfactorily conform to the Town of Smithtown, County of Suffolk, and State of New York applicable laws and ordinances. As the demised premises will be subject to periodic, unannounced inspection by the Building, Environmental, and Fire Inspectors having the authority to cite any found violations which might have a detrimental effect on Tenant, the Landlord, or other tenants' business operation, Landlord's neighbors or fire insurance premium rates, the Landlord reserves the right to conduct its own inspections and request the Tenant to take any required corrective action. In the event the Tenant, upon receipt of a violation notice from Town, County, or State Officials; Fire Insurance Underwriter inspectors; or the Landlord, fails to correct the condition, then the Tenant shall be considered to have violated the terms and conditions of this lease thus causing its termination as a contractual agreement between the Tenant and Landlord. Any fees or penalties assessed by any municipal authority shall be paid for exclusively by Tenant.
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4. PAINT SPRAYING - Tenant and Landlord mutually agree that Tenant will not perform any paint spraying in the demises premises unless the Tenant has a paint spray booth that meets Federal, State and Local safety and fire requirements and the express written consent of the Landlord. Further it is agreed that Tenant shall handle all flammable materials in a manner consistent with Local and State fire regulations, and will utilize the appropriate safety cans designed for specific flammable materials and a properly vented safety storage cabinet for the storage of flammable materials.
5. ACTIVITY RESTRICTIONS - The Tenant further agrees that he will not engage in any of the following activities without the prior knowledge and written consent of the Landlord:
(a) No Fire Sale: Conduct or permit any fire, bankruptcy, auction, or "going out of business" sale (whether real or fictitious) in the premises, or utilize any unethical method of business operation.
(b) Not Use Building Apron: Use, or permit to be used, the sidewalk adjacent to, or any other space outside, the premises for display, sale or any other similar undertaking.
(c) Not Misuse Plumbing Facilities: Use the plumbing facilities for disposal of any materials destructive to the physical plumbing or facilities, whether through the utilization of so-called "disposal" or similar units or otherwise. The plumbing facilities shall include all interior drains and exterior dry wells, collection basins, sumps, and road drains. Not dispose of any materials that are environmentally unacceptable to the local, state or federal governments. In the event the Tenant misuses any plumbing facility, the Landlord shall have the right to immediately have the affected facility properly cleaned and restored and charge the Tenant any and all associated costs.
(d) No Liens: Subject any fixtures, furnishings or equipment in or on the premises and affixed to the reality, to any mortgages, liens, conditional sales agreements or encumbrances.
(e) Not Damage the Premises: Perform any act or carry on any practice which may damage, mar or deface the premises or any other part of Flowerfield. Damage shall also be construed as resin, epoxy materials, lacquer, paints, glues, or any other material which may become affixed to Landlord's walls, floors, ceiling, and fixtures as a result of actions of Tenant and require special treatment for removal. Tenant shall be required, at its expense, to restore the demised premises to its original condition less normal wear and tear.
(f) Freight Handling Equipment: Use any forklift truck, tow, or any other machine for handling freight in the premises, unless the same equipment, if powered, be powered by electricity or propane.
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(g) Not Exceed Floor Loads: Place a load on any floor in the interior delivery system, if any, or in the premises exceeding two thousand pounds per square inch (2,000 p.s.i.). Tenant is further prohibited from installing, operating or maintaining any heavy item of equipment in the demised premises, except in such manner as to achieve a proper distribution of the weight.
(h) Not Exceed Electrical Load: Install, operate, or maintain in the premises any electrical equipment which will overload the electrical system therein, or any part thereof, beyond its reasonable capacity for proper and safe operation as determined by Landlord in light of the overall system and requirements thereof in Flowerfield, or which does not bear Underwriter's approval.
(i) Not Tamper with LILCO or Landlord's "House" Electric Meters: Tenant is expressly prohibited from tampering with electric meters in any manner whatsoever which would alter the meter's measurement of electric use. Tenant will hold Landlord harmless from all civil claims, fines, and expenses and any criminal action resulting from tampering with electric meters.
(j) Not contaminate the Premises: Refrain from the dumping of waste oil or other contaminants, as defined by environmental and/or governmental agencies, onto, about, or into the ground. The disposal of all such materials must, by mutual agreement, conform to the applicable environmental regulations. The Landlord shall not be responsible for the Tenant's violation of the regulations and any financial penalties resulting from such acts shall be borne solely by the Tenant.
In the event Tenant shall be directed by a governmental agency or by Landlord to cease and desist from any activity which results or may result in contamination of Landlord's real property and Tenant should fail to immediately comply, Landlord shall immediately, under this provision, become Tenant's Attorney in Fact to exercise any and all rights and to execute any and all documents necessary to secure compliance. Tenant hereby approves of any reasonable action taken by Landlord pursuant to said Power of Attorney and waives any and all claims in relation thereto.
SECTION V - FINANCIAL OBLIGATIONS OF TENANT- ESCALATORS, PENALTIES, AND REMEDIES
1. RENT SECURITY - At the time this lease is signed by both parties, the Tenant shall pay to the Landlord the sum of $50,000.00 "security" guaranteeing Tenant conformance to the terms and conditions of this Lease. Security payments shall be scheduled as follows: $25,000.00 upon signing of this lease and the balance $25,000.00 prior to commencement of construction of the required improvements to the premises. Landlord further agrees that if there is no default or outstanding balance(s) due on December 31, 1996 and Tenant has faithfully observed the terms of the lease, that Landlord shall apply
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$15,000.00 of the security deposit to the January 1997 rent payable by Tenant. The remaining balance of $35,000.00 shall remain as rent security for the lease term.
The first month's rent of twelve thousand four hundred ninety six dollars and seven cents ($12,496.07) is due and payable at the end of the abatement period (i.e. tentatively set for December 1, 1995).
Said security payment of $50,000.00 shall be deposited, by Landlord, in an interest bearing account and henceforth, for the duration of the lease term, the Tenant shall receive, from the Landlord, a return on said deposit at a rate not less than the current Chemical bank and/or its successor(s) passbook rate less .25% nor more than 8.0% per annum. Actual return to be determined by the current market rates as defined herein. Said payments to be made annually to the Tenant.
The following schedule shall apply for the calculation of monthly interest rates which rate is based on the current annualized average monthly yield on money market accounts at Chemical Bank:
Money Market Average Tenant Monthly Interest Landlord Monthly Yield Annualized Rate Accrued - Annualized Yield -------------------------------------------------------------------------------- Curr Money Market rate but not less than passbook to 5.50% actual yield -.25% .25% From 5.501% to 6.7499% 5.25% 0.25% to 1.499% From 6.75% to 9.5% 5.25%+curr yield-6.75% 1.5% From 9.501 and up 8.00% curr yield-8.0% |
It is mutually agreed that the security money deposited with Landlord is considered as a guarantee that Tenant shall conform to all the covenants, addenda, terms and conditions of this Lease. The security deposit or any part thereof may be applied by Landlord, with notice to Tenant, to cure any default of Tenant under this Lease and upon notice by Landlord of such application, Tenant shall replenish the security deposit in full by promptly paying to Landlord the amount so applied within ten days from receipt of said notice. It is further understood and agreed that the amount set forth in any notice as being the amount required by Landlord to maintain the security deposit at the proper amount shall be deemed additional rent and failure to pay same shall be a default in the payment of additional rent resulting in Landlord having the option to exercise all of its remedies pursuant to this agreement.
Under no circumstances shall the security deposit be considered as an advance payment of the rent for the ending month(s) of this Lease. Said deposit will be retained by the Landlord until after Tenant has vacated the premises at which time Landlord shall inspect the premises to determine if any damage has been caused by Tenant. If none exists, then the deposit will be returned to Tenant, within thirty (30) days after the expiration of the lease term, otherwise the deposit will be considered applicable to any necessary repairs to be made by Landlord.
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PENALTY FOR NONPAYMENT OF LAST MONTH'S RENT - Tenant agrees that in the event that Tenant fails to pay the last month's rent due under this Lease, that Tenant will agree to pay a penalty equivalent to an additional month's rent plus the cost of any and all reasonable attorney's fees paid by Landlord in connection with any eviction proceedings commenced due to Tenant's failure to pay the last month's rent or holdover. For purposes of this Lease, reasonable attorney's fees will be deemed to be two hundred dollars ($200.00) per hour.
2. (a) FIRE INSURANCE - Notwithstanding Covenant Twenty-third of the preprinted portion of this Lease, it is understood and agreed that in the event the fire insurance premium on the demised building, where Tenant is renting a portion thereof, is raised by virtue of the business conducted by the Tenant in the premises, the Tenant will pay the Landlord the amount of said increase.
(b) LIABILITY INSURANCE - Public Liability and Other Insurance: Tenant covenants to provide on or before the commencement of the demised term and to keep in force during the demised term a comprehensive liability policy of insurance, including property damage, insuring Tenant and Gyrodyne Company of America, Inc. as Landlord as an additional named insured under the policy against any liability for injury to persons and/or property and death of any person(s) occurring in on or about the premises, or any appurtenances thereto. Such policy or policies to be written by one or more responsible insurance companies authorized to do business by and in the State of New York and satisfactory to Landlord. The limits of liability thereunder shall not be less than the amount of One Million ($1,000,000) dollars in respect to any one person injured or killed, not less than the amount of Two Million ($2,000,000) dollars in respect to any one accident, and not less than the amount of Fifty Thousand ($50,000) dollars in respect to property damages.
All such insurance may be carried under the blanket policy covering the premises and any other Tenant's properties. Tenant agrees to deliver to Landlord, at least fifteen (15) days prior to the time such insurance is first required to be carried by Tenant, and thereafter at least fifteen (15) days prior to the expiration of any such policy, either a duplicate or a certificate and true copy of all policies procured by Tenant in compliance with its obligations hereunder, together with evidence of payment thereof and including an endorsement which states that such insurance may not be canceled, except upon ten (10) days written notice to Landlord and only designee(s) of Landlord, and complete waiver of all rights of subrogation against the Landlord, its servants, agents and/or employees.
3. BROKER - Tenant warrants and represents that no broker unless otherwise set forth in this agreement and if one is set forth herein no other broker is involved in the negotiation of this Lease, nor in any of the transactions connected therewith and agrees to indemnify and save harmless the Landlord from any claim for brokerage commissions due to acts of the Tenant.
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4. LEASE TERM AND ADJUSTMENTS - In no event will the lease term extend beyond the end of the term of the franchise agreement between Kiddie Academy International, Inc. and Carin and Luis Perez. The term period of this eleven year lease shall begin on or about September 1, 1995 ("Commencement Date") and will end eleven (11) years from the commencement date. The Commencement Date will be the same day Landlord has completed all the scheduled work in Exhibit C of this Lease.
In the event Landlord obtains a Certificate of Occupancy, Certificate of Zoning Compliance, Temporary Certificate of Occupancy or such other document allowing Tenant to apply for a license to operate a day care facility on or before August 30, 1995, Landlord will be deemed to have performed all necessary prerequisites to Tenant obtaining a license to operate a day care facility from the State of New York. If Landlord has performed its obligations as noted in this paragraph and Tenant is unable to obtain a license to operate a day care facility on or before September 1, 1995, the Commencement Date will be deemed to be September 1, 1995.
RENEWAL OPTIONS - Landlord herewith provides Tenant an option to twice extend the eleven year term of this lease for an additional five year period in accordance with the escalation provisions herein stipulated; items (a) through (f). In order to exercise its option, Tenant must notify Landlord, in writing, of Tenant's intent to exercise its five year renewal option at least one hundred and eighty (180) days prior to the expiration of each lease term. In the event proper and timely notification as herein specified is not executed by Tenant, Landlord shall no longer be bound by the terms and conditions of the option offer. Time and method of notification is deemed of the essence.
RENT ABATEMENTS - It is mutually agreed that No Base Rent, or other fees
due in Section V, 4 sub-paragraphs (a) through (e), exclusive of the cost
of electricity, shall be due for the first three months of the Lease term.
The entire Base Rent otherwise due and payable for the Abatement Month(s)
shall become immediately due and payable upon the occurrence of an uncured
event of default by Tenant under this Lease, as defined below in Addendum
Section V, Paragraph #10, subparagraph DEFAULT.
In consideration for the foregoing rent abatements, Tenant agrees to enroll three students, on an "as needed basis," chosen at Landlord's sole discretion, free of tuition charge at all times during the term September 1, 1995, as may be adjusted, through August 31, 2001. These three students must have a parent or parents employed specifically by Gyrodyne Company of America, Inc. or its subsidiaries. Each student shall be charged for any and all assessments normally made to other students for supplies, meals, and other such miscellaneous expenses. The above notwithstanding to the contrary, if Tenant's initial student enrollment is sixty (60) or more students on September 1, 1995, Gyrodyne's students will be enrolled tuition free except for assessments as specified above. If Tenant has not reached an enrollment of at least sixty (60) students by September 1, 1995, Gyrodyne employees will pay tuition equivalent to sixty percent (60%) of regular tuition
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for a period not to exceed six months or when Tenant enrollment reaches sixty (60) students, whichever occurs sooner.
Further, Tenant agrees during its tenancy to set aside fifteen percent (15%) of its total capacity, on an "as available basis," for other tenants at Flowerfield with a discount of at least five percent (5%) from published rates applicable to the general public.
The annualized rent for twelve months of this lease term period shall be one hundred forty nine thousand nine hundred fifty two dollars and eighty four cents ($149,952.84) payable in monthly installments of twelve thousand four hundred ninety six dollars and seven cents ($12,496.07) each. Said rent being subject to adjustments as follows:
(a) REAL ESTATE TAXES- $12,328.00 ($1.06 x 11,630 sq. ft.) of the base annual rent is allocated to the Landlord's real estate tax on the "Flowerfield" property which includes Building #7 and the demised premises therein. It is agreed that if at any time the Town of Smithtown, N.Y. or the Town of Brookhaven, N.Y. levies a tax increase, whether in the form of a rate increase or assessment change on the property, regardless of the basis for change, which increase shall be effective during any portion of the lease term, then there will be an adjustment in the annual rent which will be computed on the basis of the percentage of tax change multiplied by the $12,328.00. The resultant, converted to a monthly charge if in excess of $.02/sqft, shall be added to the monthly rental rate in effect at that time; otherwise, a single billing will be made during either January or February, annually, as applicable.
(b) HEAT/FUEL OIL COST - The base annual rent includes the Landlord's cost for supplying heat to the demised premises. Said cost factor being set at the "peg" price of oil at $.85 per gallon (including NYS Sales Tax, NYS Use Tax, propane gas, associated electric costs, service and boiler insurance). Thus, if at any time after the commencement of this lease and the end of the lease term period, the cost per gallon of oil increases above the "peg" price, the rent will be adjusted at the rate of $.01 per year per square foot of space (11,630 sq.ft.) for each $.01 per gallon increase. This annual rent adjustment will be converted to a monthly charge and added to the rent in effect at that time.
(c) INSURANCE - The base annual rent includes the Landlord's cost for
building, general liability, and related insurance. $5,350.00 ($.46
x 11,630 sq.ft.) of the base annual rent is allocated to the
Landlord's insurance requirements. The cost per square foot of $.46
is predicated on a 164,413 sq.ft. rental base and a premium base of
$75,900.68 for the current period. In the event in any lease year,
the premium for Landlord's insurance requirements covering the
leased premises increases over the premium amount in effect on the
date of execution of this agreement, within ten (10) days from
receipt of notification, the Tenant shall pay its proportionate
share of said increase to the Landlord. Said obligation shall be
deemed additional rent, and Tenant's proportionate share of said
increase shall be computed on the basis of the percentage increase
in insurance costs multiplied by the $5,350.00. Notification by
Landlord
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shall be deemed conclusive if sent in writing, setting forth the computations resulting in a statement as to Tenant's proportionate liability. Notwithstanding anything else contained herein to the contrary, this obligation of the Tenant shall remain in full force and effect even if the Landlord elects to self-insure provided the Landlord presents a statement in writing showing what the premium amount would be and the increase if the Landlord had elected not to self-insure.
(d) GARBAGE/TRASH REMOVAL COST - $4,664.00 ($.401 x 11,630 sq.ft.) of the base annual rent is allocated to garbage/trash and cardboard removal for the demised premises. The current adjusted (for cardboard) per yard per pickup rate is $6.13 per month and is established as the "peg" price for the term of this lease. Thus, if at any time after the commencement of this lease and before the end of the lease term period, the cartage rates charged the Landlord increase, there will be an adjustment in the annual rent which will be computed on the basis of the percentage of change from the "peg price" multiplied by $4,664.00. The resultant, converted to a monthly charge, shall be added to the monthly rental rate in effect at that time.
(e) SECURITY GUARDS - $2,721.00 ($.234 x 11,630 sq.ft.) of the base annual rent is allocated to security guard services for the demised premises. Landlord has determined that security services during the 1995 calendar year, January 1st through December 31st, shall be assessed at the rate of $19.50 per month per 1,000 square feet of rented space based on a budgeted cost of $32,060.00 apportioned over 164,413 sq.ft. rental base. This provision shall not be construed to limit Landlord's ability to continue to provide security guard services to Tenant. Landlord may, in its sole discretion, extend or curtail security guard services in any manner deemed necessary by Landlord. Landlord may adjust Tenant's annual rent to reflect such changes in security guard services.
(f) COST OF LIVING ADJUSTMENT - Commencing on the first lease (1st) anniversary and continuing through the third (3rd) anniversary, there will be a rent adjustment based on an annual flat five percent (5%) increase in the base rent, base rent as defined below. Thereafter, on each of the fourth and fifth anniversaries, there will be a flat annual four percent (4%) increase on the base rent. Upon the sixth (6th) anniversary, Landlord shall compare the cumulative "Cost of Living (C.O.L.)" index percent change between the to-be-published July 1995 and July 2001 Consumer Price Index (CPI) and the cumulative (twenty three percent- 23%) flat increases assessed above. In the event that the cumulative CPI has escalated in excess of the cumulative flat rate increases, there will be a step adjustment whereby the base rent shall be increased to reflect the CPI/C.O.L. rate. Thereafter, the adjusted amount shall serve as the base rent and base rent basis for computations for the succeeding five year period. Landlord agrees to cap the cumulative CPI to a maximum of forty percent (40%) increase for each evaluation period. For years six through ten and the two option periods, a continuation of the flat (4%) percent annual increase shall be applicable. At the end of the initial lease term, another comparison shall be made between the cumulative CPI and the cumulative flat rate increases, less any prior step adjustments.
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A single step adjustment, if required, will be made applicable to the first option period. The method of calculating the base rent in the option period will be predicated on the comparison of the cumulative effect of the five, four percent (4%) increases over the last five year period of the initial lease term and the cumulative CPI/COL increase for the same period. Likewise, another Landlord review will be conducted before the commencement of the second option period calculated using the same formula applicable to the first five year option period. The adjusted amount shall be base rent and base rent basis for the second option period.
In this regard, for calculation purposes only, $168,577.00 shall be the C.O.L. base subject to the first annual rent adjustment without regard to abatements or concessions, if any. The amount of said rent adjustment added to the C.O.L. base rent will establish the new C.O.L. base rent subject to the following year's "Cost of Living" adjustment. The same formula will be used to determine subsequent "C.O.L." adjustments. Exhibit E, C.O.L. Adjustment Schedule is appended hereto which clarifies the intent of the parties.
"Price Index" shall mean the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics (BLS), U.S. Department of Labor, New York, NY and Northeastern N.J.. region, 1982-84 = 100, or any other renamed local index covering the New York, NY region.
If the BLS changes the publication frequency of the Price Index so that a Price Index is not available to make a cost-of-living adjustment of annual rent as specified herein, the cost-of-living adjustment shall be based on the percentage difference between the Price Index for the closest preceding month for which a Price Index is available and the Price Index for the Base Month as defined in this Lease.
In the event that the Consumer Price Index (CPI) ceases to use 1982-84=100 as the basis calculation, or if in the Landlord's reasonable judgment, a substantial change is made in the terms or number of items contained in the CPI, then the CPI shall be adjusted (the "Adjustment") to the figure that would have been arrived at (or as close to such figure as shall be practical) had the manner of computing the CPI in effect at the date of this lease not been altered. Further, if in the Landlord's reasonable judgment, such adjustment is impossible or impractical, then the revised CPI shall be deemed to replace the original CPI for purposes of this covenant.
If the BLS otherwise substantially revises, or ceases publication of, the Price Index, then a substitute index for determining cost-of-living adjustments, issued by the BLS or by a reliable governmental or other nonpartisan publication, shall be reasonably designated by Landlord.
5. ACCOUNTING METHODS - It is understood and agreed that upon presentation to the Tenant of any computation with respect to rent, and/or additional rent, or utilities, or computations as to the amount of money to be paid by the Tenant concerning any
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obligation referred to in this lease to be performed by the Tenant, provided said computations are predicated upon reasonable accounting methods and procedures, then and in that event, computations of the Landlord shall be deemed conclusive and binding upon Tenant and the Tenant hereby waives the presentation of any and all invoices, checks or bills prior to making said payment and during any trial concerning the failure of the Tenant to make said payments. As a courtesy to Tenant, Landlord will provide Tenant with access to Landlord's records for purposes of Tenant review to verify Landlord computations. Tenant's review of at Landlord's offices will not exceed two days per calendar year.
6. LATE PAYMENT PENALTIES - Rent and any other Tenant incurred charges appearing on the Landlord's monthly invoices are due and payable to the Landlord on the first day of each month. There will be a four (4) day grace period through the fifth (5th) day of the month for the payment of such due bills. However any such unpaid bills after said date will be assessed at the late charge rate of 2% per month, computed from the first day of the month in which said bill is due, to the date of payment to the Landlord. This late charge shall be cumulative and be deemed an additive to the rent for the month such due bill is issued.
Tenant's postdated check will be considered subject to the above assessment if the check date exceeds the above stated payment deadline.
In the event a Tenant check fails bank clearance for any reason, the Landlord shall charge the Tenant with a $20.00 penalty fee to cover bank and administrative costs. If the Tenant fails to correct this deficiency and has not paid the Landlord the monies due by the tenth day of the month, then the late charge as set forth above shall be applicable.
The Landlord's failure to demand or collect said late charges shall in no way be deemed a waiver of any right thereto or any other rights or remedies that the Landlord may have under the terms of this lease, by summary proceedings or otherwise.
7. ADDITIONAL RENT - Any and all payments and/or expenses required to be paid by the Tenant shall be deemed additional rent and rent if same are due the Landlord or in the event the Landlord expends said moneys on behalf of the Tenant for which the Tenant has an obligation to reimburse the Landlord.
8. CESSATION OF UTILITIES - Tenant hereby agrees that in the event the Tenant has failed to pay to Landlord any utility charges that are billed to the Tenant by Landlord and said charges remain unpaid and outstanding for a period of 60 days, in addition to the other remedies the Landlord may have, the Landlord shall have the right to terminate the providing of said utilities to the leased premises of the Tenant. Notwithstanding anything else contained herein to the contrary, in such event, the Tenant waives any and all claims against the Landlord for any damages whatsoever, consequential and/or punitive, that may be incurred by the Tenant as a result of the termination of said utilities.
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9. NOTICES AND SERVICE OF PROCESS - Any notice, demand, or communication called for under this Lease shall be in writing and shall be given, served, or delivered by United States registered or certified mail, return receipt requested, postage prepaid, or by Airborne Express or other nationally recognized overnight courier service, or hand-delivered with a receipt and addressed (i) if to Tenant, at 44 Flowerfield Suite 44, Saint James, New York 11780, (ii) with a copy to Franchisor, to Kiddie Academy International, Inc., Kiddie Academy Corporate Center, 108 Wheel Road, Suite 200, Bel Air, Maryland 21015, and (iii) a copy to Co-Guarantor, Maryland Day Care Center, Inc., 108 Wheeler Road, Suite 200, Bel Air, Maryland 21025; and (iv) if to Landlord, at Gyrodyne Company of America, Inc., 17 Flowerfield Suite 15, Saint James, New York 11780, or (iv) to any of the personal guarantors of said lease. All notices delivered in the foregoing manner shall be deemed delivered on the date the return receipt is executed. Either party may designate a change of address by written notice to the other party. If and when said service is made, the Tenant hereby waives any jurisdictional defects and/or claims of improper service.
10. DEFAULT BY TENANT - The occurrence of any one or more of the following events shall constitute a material breach by Tenant of this Lease:
(a) the failure by Tenant to make any payment of rent or any other payment required to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of ten (10) days after receipt of written notice thereof by Tenant from Landlord; or
(b) the failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease where such failure shall continue for a period of thirty (30) days after receipt of written notice thereof by Tenant from Landlord, provided, however, that if the nature of Tenant's default is such that it cannot be cured solely by payment of money and that more than thirty (30) days may be reasonably required for such cure, then Tenant shall not be deemed to be in default if Tenant shall commence such cure within such thirty (30) day period and shall thereafter diligently prosecute such cure to completion; or
(c) the making of any general arrangement or any assignment by Tenant for the benefit of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition of reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, such petition is dismissed within ninety (90) days); the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets.
In the event of any material breach of this Lease by Tenant, then Landlord, in addition to other rights or remedies it may have, shall have the right to terminate this Lease upon fifteen (15) days written notice to Tenant, and also the right, with or without termination
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of this Lease, to reenter and take possession of the Leased Premises and Landlord may remove all persons and property from the Leased Premises; such property may be removed and stored in any other place in the Building or in any other reasonably secure place for the account of and at the expense and risk of Tenant. Should Landlord elect to reenter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, Landlord may either terminate this Lease, or Landlord, without terminating this Lease, shall use its reasonable efforts to relet the Leased Premises or any part thereof for such terms and conditions as may be reasonable, with the right to make minor alterations and repairs to the Leased Premises. Rental received by Landlord from such reletting shall be applied first, to the payment of any costs of such reletting including reasonable brokerage and attorneys' fees; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. Should such rentals received from such reletting during any month be less than the monthly gross rent reserved hereunder, then Tenant shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such reentry or taking possession of the Leased Premises by Landlord shall be construed as an election on its part to terminate this Lease, unless written notice of such intention be given to Tenant, in which event Tenant's obligations to Landlord shall forthwith cease, or unless the termination thereof be decreed by a court of competent jurisdiction.
Any default by Tenant under this Lease shall be deemed an event of default under the Franchise Agreement (the "Franchise Agreement") entered into or to be entered into between Tenant and Kiddie Academy International, Inc., a Maryland corporation ("Franchisor").
In addition, Landlord acknowledges that if at any time Tenant defaults under the Franchise Agreement, Franchisor, shall have the option to either:
(i) enter upon the Leased Premises and operate the Kiddie Academy Child Care Learning Center at the Leased Premises until such time as Franchisor determines that the default of Tenant under the Franchise Agreement has been cured, or
(ii) take possession of the Leased Premises and become the assignee of this lease for a period not less than one (1) year and not to exceed two (2) years from the date of assumption, with no liability for any default caused by the Tenant up to the point of assumption. In the event a new franchisee is selected, the one year minimum period will be waived by Landlord.
In the event Franchisor exercised option (ii) above, Landlord hereby agrees that the Franchisor may seek another Franchisee to take over the operation of the Kiddie Academy Center at the Leased Premises and that when a new franchisee is selected by Franchisor and approved by Landlord within a reasonable period of time, the new franchisee will become the tenant under this Lease, Maryland Day Care Centers, Inc. will
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continue as the co-guarantor thereby leaving the Landlord undiminished with respect to guaranty. Landlord further agrees that if Franchisor does not select a new franchisee within two (2) years from the date of assignment of the Lease under (ii) above, Franchisor shall have no further liability under the Lease as of the end of that two (2) year period.
SUBSTITUTION OF FRANCHISEE - Landlord will not withhold such consent to the selection of a new franchisee if at the time of such substitution of franchisee, the succeeding franchisee maintains financial standing at least equivalent to that of the original franchisee under this Lease. Landlord must have reasonable assurance of the payment of all rents and other amounts required under this Lease and reasonable assurance of compliance with all other terms, covenants, provisions and conditions of this Lease.
11. ALLOCATION OF PARTIAL PAYMENTS AND DISPUTES - In the event of a partial payment or a payment on account, hereinafter for the purpose of this provision these terms are used interchangeably. Tenant shall not have the right to allocate payment(s) against specific charge(s) on an invoice(s) submitted by Landlord. Further, Tenant waives the right to claim that Landlord shall be diminished legally with respect to accepting said partial payment in any arbitration or legal proceeding. Landlord and Tenant herewith reaffirm Landlord's undiminished rights, with respect to partial payment(s) by Tenant, to recovery by Landlord for amounts invoiced and unremitted by Tenant; recovery of any penalties, as provided elsewhere herein, that may be assessed Tenant for underpayment; and recovery of the premises, if such recovery shall be the subsequent result of a default declaration.
In the event of a dispute between Landlord and Tenant for any invoiced amounts, other than those pertaining to base rent, Tenant shall be required to remit payment in full as per the terms of the invoice, and if no payment terms are stated, within thirty (30) days of invoice, with a written protest detailing all allegations, financial calculations, and documentation for those amounts in dispute. In the event the parties are unable to resolve the dispute within sixty days of the remittance, both parties agree to submit to binding arbitration with respect to the disputed amount(s). Failure to remit disputed amounts shall be construed by Landlord as non-payment and shall remain grounds for a default declaration by Landlord. Unless a written notice to Landlord of a dispute, conveyed and qualified under NOTICES AND SERVICE OF PROCESS herein, is made at the time of remittance, Tenant waives all rights to recourse.
12. RENT ACCELERATION - Anything herein to the contrary notwithstanding, the premises herein mentioned are demised for the whole term with the whole amount of rent herein reserved, due and payable at the time of the making of this lease and the payment of rent in installments as herein provided is for the convenience of the Tenant only. If default by the Tenant in the making of any installment payment of rent occurs, then the whole of the rent reserved for the whole period shall then become due and payable to the Landlord without notice or demand.
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Landlord herewith unilaterally agrees and covenants that in the event of a default by Tenant, Landlord partially waives its right guaranteed hereinabove to demand payment for the full term of the lease and accepts a minimum of three years, or the balance of the then existing lease term, whichever is less, as the maximum amount for which Landlord may initiate a single action to recover for an event of default. Additionally, Landlord also agrees to restrict any action to recover payment to a peyote schedule requiring payments in equal installments over the same period for which the rent default and rent acceleration is claimed. Further, Landlord shall be restricted from initiating multiple actions for the same monies, or portion thereof, for a specific underlying lease period even if multiple defaults occur.
13. LANGUAGE PRECEDENCE - In the event of conflict between the preprinted portion of this Lease and the Addendum hereto, the terms and conditions set forth in the Addendum shall control.
INTERPRETATION AND CONSTRUCTION - Unless otherwise specified, the following rules of construction and interpretation apply to this lease, addenda, and exhibits:
(a) The terms "improvements," "demised premises," "Leased Premises," or "Leased Suite" shall each be interpreted as followed by the phrase "or any part thereof."
(b) Singular words include the plural and plural words include the singular.
(c) Words importing any gender include every other gender.
(d) The phrase "terms and conditions" shall be interpreted as referring to all terms, provisions, covenants, agreements, conditions, restrictions, representations, warranties, obligations and agreements in this Lease.
(e) Use of the term "including" shall be interpreted to mean "including but not limited to."
(f) Whenever a party's consent is required under this Lease, except as otherwise stated in the Lease of as same may be duplicative, such consent shall not be unreasonably withheld or delayed.
14. HEADINGS - Headings used throughout this Lease are inserted for reference purposes only, and are not to be considered or taken into account in construing the terms or provisions of any covenant or paragraph hereof nor to be deemed in any way to qualify, modify or explain the effect of any such provisions or terms.
15. ATTORNEY'S FEES - Tenant agrees to pay reasonable attorney's fees if the a dispute is resolved after service of Notice of Petition and Petition and receipt of Tenant's response and prior to appearing in court. In the event any further papers not associated with the above resolution must be prepared and/or further expenditure of time is required, then, and in that event, Tenant shall pay additional Landlord's reasonable legal fees.
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16. ADDRESS DESIGNATION - Landlord has the full right at any time, with no less than thirty (30) days prior notice to Tenant, to name and change the name of the building and property and to change the designated address of the building and property. The building and property may be named after any person, firm or otherwise, whether or not the name is, or resembles, the name of a tenant of the building and property.
17. EARLY TERMINATION - Landlord herewith agrees, with the following qualification, to release Tenant from this Lease, if and only if, during the term of this Lease Tenant and Landlord enter into another lease for a different premises at Flowerfield. Tenant shall remain liable for all applicable covenants, such as, but not restricted to: reversion provisions, exit charges, abandonment, etc., as if this Lease had run its full course.
18. LEASE AMENDMENTS & SUBORDINATION - If, in the event that the Landlord desires financing or refinancing for the premise of which the demised premise form a part, Tenant may not withhold, delay, or defer consent for any modifications to the lease as a condition for the financing or refinancing, provided that such modifications shall not substantially or materially affect Tenant or Tenant's rights under this Lease.
Remedies - The Tenant is permitted fifteen (15) days after written notice from the Landlord to conform to the conditions which are requested by the lender. If Tenant fails or refuses to execute conditions requested by Landlord, Landlord reserves the right to terminate the lease, as provided hereafter, or perform the execution of any document for and on behalf of Tenant as its attorney-in-fact. In the event Landlord elects to terminate this Lease under this paragraph, Landlord will either provide Tenant with comparable premises within Flowerfield or provide Tenant with six months of occupancy in the demised premises, free of base rent. Landlord as attorney-in-fact may only execute instruments pertaining to conditions requested by lender. If Landlord, in its capacity as attorney-in-fact, executes a subordination agreement or any other documents required by lender on behalf of Tenant, Tenant's default under this provision will be deemed to be cured.
19. ESTOPPEL CERTIFICATE - Landlord and Tenant shall, at anytime upon not less than twenty (20) days prior written notice from the other party, execute and deliver to the other party a statement in writing, if such is the case, (i) certifying that this Lease is unmodified and in full force and effect (or if full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to the party's knowledge, any uncured defaults on the part of the other party hereunder, or specifying such defaults if any are claimed. Landlord shall limit such requests to an average of two times per year over the lease term.
20. LEGAL VENUE - This Lease shall be governed by the laws of the State of New York. Should any provisions of this Lease require judicial interpretation, it is agreed that the court interpreting or construing the same shall not apply a presumption that the terms of any such provision shall be more strictly construed against one party or the other by
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reason of the rule of construction that a document is to be construed most strictly against the party who itself or through its agent prepared the same, it being agreed that the agents of all parties hereto have participated in the preparation of this Lease.
21. EXCLUSIVITY - For a five year term commencing on September 1, 1995, Landlord shall not lease any space at Flowerfield, to any tenant for use as a day care or similar all day child development facility. This restrictive covenant shall not apply to summer day camps, fine arts and crafts schools, Head Start programs or short term sessions of one month or less duration. In the event that Landlord elects to entertain another day care or all day child development facility at Flowerfield, Landlord shall first offer same to Tenant. If Tenant declines Landlord's offer, Landlord will make the same offer to Kiddie Academy International, Inc.
22. COUNTERPARTS - This lease may be executed in one of more counterparts, each of which shall be deemed an original.
SECTION VI - VACATION AND ABANDONMENT
1. HOLDOVER - In the event this lease is not renewed and the Tenant has failed to vacate the premises prior to the eleventh anniversary of the Commencement Date of the Lease, or the sixteenth anniversary date of the Commencement Date of the Lease if the first five year option is exercised or the twenty first anniversary date of the Commencement Date of the Lease if the second option is exercised, then the Tenant agrees to pay the Landlord double the monthly rent then applicable for each month or portion thereof that Tenant retains possession of the premises or any portion thereof, after the expiration or termination of this Lease and shall also pay all damages sustained by Landlord by reason of such retention of possession.
In addition, Tenant will also pay those other items of additional rent which would have been payable monthly pursuant to this Lease, had this Lease not expired. The provisions of this section shall not constitute a waiver by Landlord of any reentry rights of Landlord pursuant to other provisions contained herein or as provided by law. At the sole option of Landlord, expressed by written notice to Tenant, but not otherwise, such holding over shall constitute a renewal of this Lease for a period of one year on the terms and conditions herein set forth at triple the then current monthly rent. In the event the Landlord does not exercise said option, then as previously set forth, the Tenant shall pay the Landlord triple the then monthly rent during the holdover period.
2. GUARANTEES - It is mutually agreed and understood that if Tenant after the conclusion of the hereinbefore defined lease term becomes a month-to-month tenant, a tenant at will, or a holdover tenant, all personal, business, and corporate guarantees applicable to the hereinbefore defined lease term shall unequivocally also apply to the extended lease term.
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3. (a) ABANDONED PROPERTY - It is hereby understood and agreed that in the event the Tenant leaves any property on the demised premises or any common areas in, on, or about Flowerfield, subsequent to the expiration of the within lease that said property is hereby deemed abandoned and the Landlord may dispose of said property at its option without any liability on the part of the Landlord. It is further understood and agreed that the Tenant waives any and all rights, title and interest to said property, releases and waives any and all claims thereto and further agrees that the Tenant will be responsible to the Landlord for any and all expenses incurred by the Landlord concerning said property.
(b) UNAUTHORIZED VEHICLES - Landlord retains the sole right to reassign parking and may, with one week's written notice, change the parking lot and/or parking area assignment of Tenant. Landlord shall not unilaterally, however, reduce the agreed upon spaces allotted Tenant above. It is understood and agreed that in the event any vehicles of any parties, their servants, agents and/or employees, invitees, licensees, subtenants, etc., are improperly parked on the grounds of the Landlord, the Landlord is hereby granted express permission to take any and all necessary steps to remove said vehicles including but not limited to the towing of said vehicles. For the purpose of this paragraph "improperly parked" shall mean any vehicle parked in a loading zone; parked in an area designated with a sign as a no parking zone; parked in other than a designated parking lot, parked overnight without the express permission of the Landlord, or parked overnight in other than a fenced-in reserved parking area. Any and all expenses relating to the removal of said vehicles and/or the safeguarding of said vehicles, if the Landlord elects to do so, shall be the responsibility of either the owner of the vehicles or the applicable tenant whose business led to said vehicles being on the grounds of the Landlord and said parties hereby agree to immediately reimburse the Landlord for said expenses together with interest at the 2% per month and same shall constitute additional rent to which the failure to pay shall result in the Landlord exercising, at its option, any of the remedies provided for herein. The Tenant specifically waives any claim for damages arising from the removal of vehicles owned and/or operated by the Tenant, its servants, agents and/or employees and releases the Landlord from any such claims. In the event claims are made by third parties as a result of the removal of said vehicles or any damage caused to said vehicles, the Tenant hereby agrees to hold harmless, indemnify and defend the Landlord concerning said claims.
In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
(c) UNPLATED VEHICLES - It is agreed that motor vehicles without license plates constitute a special situation. Any unregistered motor vehicle parked on the Flowerfield premises will be subject to all the conditions herein above described and to a ten
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($10.00) dollar per day parking fee effective after the first twenty-four hours of parking. In the event Tenant fails to comply with this provision, Tenant hereby appoints the Landlord as its Attorney in Fact, authorizing Landlord to execute all documents and take any action on behalf of Tenant to secure compliance herewith. Tenant hereby agrees that the exercising of said Power of Attorney by Landlord is proper and waives any and all claims concerning same.
(d) WASTE - Tenant at expiration of Lease shall be solely liable for removal of any drums, cans, vessels, or containers over one quart in volume in addition to its other responsibilities. In the event the drums, cans, vessels, or containers are not removed, until such time that same are complied with, Tenant agrees not to demand return of any portion or its securities being held by Landlord. In addition thereto, the Tenant again appoints the Landlord as its Attorney in Fact to exercise any and all rights, and to execute any and all documents necessary to secure compliance with this provision. Tenant hereby approves of any actions taken by the Landlord pursuant to said Power of Attorney and waives any and all claims in relation thereto.
4. ENTIRE AGREEMENT - This Lease with attached preprinted portion, Addenda and Exhibits is the complete agreement between Tenant and Landlord in its entirety with respect to the premises leased herein and cannot be changed, modified or terminated orally. There are no representations, agreements, arrangements or understandings oral or written, between Tenant and Landlord up to the date of this Lease, which are not fully contained herein.
Gyrodyne Company of America, Inc.
3-23-95 /s/ [Illegible]
--------------------- ----------------------------------------
(Date) (Landlord)
Carin Perez
3-23-95 /s/ Carin Perez
--------------------- ----------------------------------------
(Date) (Tenant)
Luis Perez
3-23-95 /s/ Luis Perez
--------------------- ----------------------------------------
(Date) (Tenant)
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EXHIBIT A
FLOOR PLAN OF THE LEASED PREMISES
7 FLOWERFIELD SUITE 44
SUPPLIED SEPARATELY
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EXHIBIT B
KEY MAP, BUILDING LAYOUT, COMMON AREAS,
PARKING AND PLAYGROUND DRAWING
Gyrodyne Company of America, Inc.
Kiddie Academy Day Care Center
Drawing Pages 1 of 2 and 2 of 2
ATTACHED
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EXHIBIT C
LANDLORD'S WORK LETTER
FOR
KIDDIE ACADEMY FRANCHISEE
January 27, 1995
1. General
A. All construction must met or exceed the requirements of the New York State Uniform Fire Prevention and Building Code (Code) and all applicable Federal, State and Local codes, laws and/or regulations.
B. Leased Suite occupancy is assumed to be Group C6.2 - Institutional; used for the daily care of persons with physical limitations due to health or age (i.e.: day nurseries including children under two and a half years of age, hospitals, infirmaries, orphanages and homes for the aged, etc.).
C. Specifications contained herein have not been reviewed by regulatory authorities. All quantities, finishes, locations and other specific requirements are to be verified by Tenant, Franchisor and Landlord, with respect to each party's area of responsibility as defined in Section 1. G
D. If a conflict should exist between these specifications and applicable Code requirements, the more restrictive of the two shall be utilized in the construction of the Leased Suite.
E. The landlord is required to provide a minimum of one year warranty on all labor and materials used in constructing the Leased Suite.
F. All construction is to be substantially completed in accordance with the Construction Documents. (The term Construction Documents means all Final Plans, Specifications, Change Orders and Addenda which have been approved and agreed to, in writing, by the Tenant, Franchisor and Landlord.)
G. Landlord is responsible for the production and submission of the Construction Plans (which shall be based on the agreed upon specifications and conceptual layout) for approval by authorities having jurisdiction over project. Landlord is responsible for all submissions of plans for demolition and construction permits. Landlord is also responsible for all costs related to obtaining construction permits, inspections and Certificate of Occupancy. Tenant is responsible for obtaining all licensing required to legally operate a Day Care Center in the County of Suffolk in the State of New York.
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H. All Construction Drawings and Specifications are subject to review and written approval by Tenant, Franchisor and Landlord.
I. Tenant or Franchisor shall provide Landlord with a final finish schedule prior to the completion of the Construction Drawings and Specifications.
J. No construction shall commence prior to written approval and agreement of the final Construction Drawings and Specifications by the Tenant, Franchisor and Landlord.
K. Landlord shall be the General Contractor for the work to be done under this Work Letter.
2. Floors
A. Provide and install floor finishes as specified by finish schedule.
1. All tile flooring is to be a minimum of 1/8" thick, unless otherwise
specified in the Construction Documents.
2. All carpeting is to be 'Wellco' Producer IV 2602 Level Loop Polyfn
Carpet or equal. Color to be selected from Room Finish Schedule.
B. All 'learning carpets' are to be supplied by Tenant and shall be installed by the Landlord. The Landlord shall provide a black rubber carpet transition strip for the installation.
C. Provide and install vinyl base throughout per finish schedule.
D. Provide and install ceramic tile as required by Code and Construction Documents. Landlord to submit color samples for selection by KAI.
E. It will be the responsibility of the Landlord or subcontractor to verify all owner supplied carpet sizes before laying any tile or carpet in the center. KAI will not guarantee any carpet sizes. All sizes referred to on plans are nominal.
3. Walls
A. Walls are to be a minimum of 1/2" drywall on each side of a 3 1/2" 25 ga. metal stud @ 16" o/c.
B. Provide and install exterior wall insulation, sealant and moisture protection as may be required to conform to the New York State Energy Conservation Code.
C. Drywall finish is to be taped and spackled, sanded, primed and painted.
D. All walls are to be painted, as per Room Finish Schedule, with a minimum one primer coat of paint plus two coats of finish color paint for new walls and two coats of finish
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CARIN PEREZ AND LUIS PEREZ Lease Page 36 of 43
color paint for existing painted walls. Doors and trim are to be painted the trim color specified for each room. Paint manufacturer to be Sherwin Williams or equal.
E. Paint used in kitchen area to be Sherwin-Williams white epoxy enamel semi-gloss base (or equal), or as required by local health code.
F. Provide and install 3' FRP panels on walls above sinks in kitchen area and above mop sink in janitorial closet.
4. Doors, Door Jambs, Windows & Hardware
A. Unless specified otherwise on Door Schedule, all exterior doors are to be at least 16 ga, ASTM A526 steel with G60 galvanizing and painted as per Schedule.
B. Unless specified otherwise on Door Schedule, all exterior door frames are to be primed and painted as per Schedule.
C. Unless specified otherwise on Door Schedule, all interior doors are to be 3/0 X 7/0 1 3/4" solid core wood doors, primed and painted per Schedule.
D. Unless specified otherwise on Door Schedule, all interior door frames are to be 16 ga for doors up to 5' wide, 14 ga over 5' wide, (1 1/2" metal), with standard hardware, primed and painted per Schedule.
B. All door hardware is to comply with ADA and local code regulations. Provide locking keyed hardware set on owner's office door. Provide locking hardware for closet doors so that the lock will release when operated from inside the closet.
F. All doors are to be rated as needed by local codes.
G. Exterior doors are to have removable 6 pin core locks, medium duty commercial grade.
H. Storefront doors & entrances with aluminum frames are to be anodized aluminum type as manufactured by 'Kawneer' or equal.
I. Door glazing to be tempered safety glass where required by code.
J. Overhead closers shall be provided as per Door Schedule.
K. Push/Pull hardware shall be provided as per Door Schedule.
L. Provide and install weather-stripping and thresholds as needed on exterior doors.
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M. Windows are to be 1" insulating glazing, anodized aluminum frame type, as manufactured by 'Kawneer', or equal.
5. Ceiling
A. Provide and install suspended grid ceiling system @ +/-10'-0" a.f.f. throughout.
B. All ceiling tiles are to be 2'x4' acoustical lay-in type. One-hour rated ceiling as required by Code.
6. Electrical
A. Provide and install separate electrical meter for Suite.
B. Provide and install service for Premises one 208 volt, 3 phase, 4 wire, disconnect switch. Panel size to be determined by electrical contractor.
C. Provide and install all necessary circuit breakers for distribution of load
D. Provide all distribution, including j-boxes, switches and receptacles in place as per Code and Construction Documents
E. Install duplex outlets as per Code
F. Provide and install ceiling or wall mounted exit signs, emergency lights and night lights, as required by Code.
G. Provide and install a minimum of two duplex outlets in each room.
H. Provide and install required outlets for Tenant's kitchen equipment. Hot plate units will require (2) 220v 20 amp receptacles @ 54" a.f.f.. Provide electrical service for food prep area range hood in accordance with state and local regulations. Install Tenant supplied food preparation equipment.
I. Provide and install exterior power for Tenant's sign.
J. Provide access to central telephone panel for 7 Flowerfield.
K. Permit Tenant to engage reliable T.V. cable and/or antenna contractor to provide and install Television lines as required by Tenant.
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L. Provide and install 2' x 4' lay-in, fluorescent light fixtures, with ballasts, lenses and lamps installed, in suspended ceiling, at least fifty foot candle minimum, conveniently switched per room. Final layout as per Construction Documents.
M. Electrical service to be in accordance with latest NEC and local regulations.
N. Provide and install electrical service and timers for tenant sign to exterior sign areas as per Construction Documents.
0. Provide and install dedicated duplex outlet, on a separate circuit, in kitchen area for a microwave oven.
7. Plumbing
A. Provide and install all sanitary sewer connections and piping for sewer as per Construction Documents.
B. Provide and install electric hot water heater sized for Tenant and occupancy requirements
C. Distribute all hot and cold water to Kitchen, drinking fountains and rest rooms
D. Provide and install all required juvenile toilets [Kohler Primary Model II, K-4318-ET, Seat 4686C, or equal] and juvenile lavatories [Kohler Radiant K-29 16, 4" center, with gooseneck handicapped approved faucet, or equal]. Quantity determine by local regulation.
E. Provide and install at least 2 Adult, ADA compliant, toilets [Kohler Welcomme Waterguard K-4250-1ET-PT, or equal] and lavatories [Greenwich K-2032, 4" centers with gooseneck handicapped approved faucet].
F. Provide and install at least 2 juvenile and 1 adult, ADA compliant, drinking fountains.
G. Provide any special requirements due to private or public septic system (grease traps, hookup permits, etc.).
H. Provide and install restroom mirrors, paper towel holders, toilet paper holders and grab bars.
I. Provide and install 1 mop sink [Kohler Bannon K-6716, or equal].
J. Provide and install mechanical ventilation in each restroom.
K. Provide and install 1 lavatory in each diaper counter unit [Kohler Radiant K-2916 with 4" center K-7401 Triton faucet, or equal].
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L. Provide antiscald valves as required by Code.
M. Install Tenant supplied food preparation equipment. All labor and materials, other than adapters, fittings, valves, etc. which are normally supplied with the equipment by the manufacturer, required for hook up are to be supplied by the contractor.
N. Plumbing to be installed in as per Code.
0. Supply and install liquid soap dispensers and paper towel dispensers at all lavatories throughout the Suite.
8. Air Conditioning & Heating
A. Provide, install and distribute air cooling/heating systems throughout the Suite.
B. Air conditioning units must maintain a maximum summer temperature of 78 degrees F.
C. A temperature of at least 72 degrees F must be maintained during the winter.
D. Provide and install all duct work, positive duct return air and supply diffusers. Also install supply diffusers for rest rooms, storage areas and offices.
E. Design criteria to include glass area exposure, kitchen load, equipment load, and occupant load.
F. Provide and install at least 1 thermostat per HVAC unit.
G. Compressors to have at least a 5 year extended warranty.
H. HVAC system shall heat and cool uniformly throughout in accordance with NFPA 90 and be balanced to provide compliance with the latest BOCA Mechanical Code, and local regulation.
9. Fire Sprinkler & Fire Alarm Systems
A. Provide and install sprinkler system as required by Code.
B. Smoke detection system, if required, must be in compliance with the latest NFPA Life Safety Code, local regulations and BOCA code.
C. Contractor is to provide central station alarm connection fee only.
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D. Provide and install fire alarm, panel, detectors and related equipment as per Code requirements.
10. Cabinetry
A. Fabricate and install one 12" x 12" x 48" cubbie" as per Construction Documents for each child.
B. Fabricate and install all lavatory tops, diaper counter units and kitchen counter unit; color and laminate per Construction Documents.
C. Fabricate and install office pass-through window per Construction Documents.
11. Signage
A. Supply electrical hookup for Tenant's exterior building sign.
B. Supply electrical feed to Tenant's free standing exterior sign.
12. Play Area
A. Install play area fencing with gates as per Construction Documents. Provide, minimum, (1) 10'-0" wide service gate and (1) 4' wide service gate, as shown on plan.
B. Provide asphalt surface as per Construction Documents.
C. Soft-top area to be provided as per Construction Documents.
D. Provide sand needed to fill (2) 8'x8' sand boxes.
13. Security System
A. Provide and install, on all exterior doors only, an audible security system that will sound upon opening.
14. Schedule of Drawings
Attached Project Schedule and list of construction documents result in a forty day design and submittal phase. It is Landlord's intent as general contractor to follow this schedule within the constraints imposed by various governmental agencies in utilizing reasonable efforts given the circumstances.
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EXHIBIT D
COLLATERAL ASSIGNMENT OF LEASE
FOR VALUE RECEIVED, THE UNDERSIGNED Assignor assigns, transfers and sets over to the Assignee, KIDDIE ACADEMY INTERNATIONAL, INC., a Maryland corporation, all of the Assignor's right, title and interest as tenant in, to and under the lease, a copy of which is attached (the "Lease"), for the premises known as 7 Flowerfield Suite 44, St. James, New York 11780.
This Assignment is for collateral purposes only and except as specified here, the Assignee will have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment, or from or in connection with the Lease, unless (i) the Assignee takes possession of the premises subject to the Lease pursuant to the terms of this Assignment, and (ii) the Assignee assumes the obligations of the Assignor under the Lease. The Assignor agrees to indemnify and hold harmless the Assignee from and against all claims and demands of any type, kind or nature made by any third party which arise out of or are in any manner connected with the Assignor's use and occupancy of the premises subject to the Lease.
The Assignor represents and warrants to the Assignee that it has full power and authority to assign the Lease and its interest in the Lease.
If the Assignor defaults under the Lease or under the Franchise Agreement between the Assignee and the Assignor for a Kiddie Academy Center located at the leased premises (the "Franchise Agreement"), the Assignee will have the right and is empowered to take possession of the premises subject to the Lease, expel the Assignor from those premises, and in that event, the Assignor will have no further right, title or interest in the Lease. The Assignor will reimburse the Assignee for the costs and expenses incurred in connection with any such retaking, including but not limited to the payment of any back rent and other payments due under the Lease (whether the payments are made by a separate agreement with the lessor or otherwise), attorney's fees and expenses of litigation incurred in enforcing this Collateral Assignment of Lease, costs incurred in reletting the premises, and costs incurred for putting the premises in good working order and repair.
The Assignor agrees that it will not suffer or permit any surrender, termination, amendment or modification of the Lease without the prior written consent of the Assignee. Throughout the term of the Franchise Agreement and any renewals of that Agreement, the Assignor agrees that it will elect and exercise all options to extend the term of or renew the Lease not less than thirty (30) days prior to the last day that the option must be exercised, unless the Assignee otherwise agrees in writing. Upon the failure of the Assignor to so elect to extend or renew the Lease, the Assignor appoints the Assignee as its true and lawful attorney-in-fact to exercise that extension or renewal option in the name, place and stead of the Assignor, for the sole purpose of effecting the extension or renewal.
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ASSIGNOR:
____________________
/s/ Luis Perez (SEAL)
----------------------------------------
LUIS PEREZ
________________________________________
________________________________________
/s/ Carin Perez
----------------------------------------
CARIN PEREZ
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CARIN PEREZ AND LUIS PEREZ Lease Page 43 of 43
CORPORATE GUARANTY OF LEASE
Maryland Day Care Centers, Inc., a Maryland corporation ("Guarantor"), whose address is Kiddie Academy Corporate Center, 108 Wheel Road, Suite 200, Bel Air, Maryland 21015, as a material inducement to and in consideration of Gyrodyne Company of America, Inc. ("Landlord") entering into that Lease dated March 23, 1995 (the "Lease") with Carin Perez and Luis Perez ("Tenant"), unconditionally guarantees the prompt payment to Landlord of all basic annual rent being due and payable under the Lease, during the first ten (10) years of the original lease term. This Guaranty and the obligations of Guarantor hereunder, shall not be valid until the Lease has commenced, all contingencies under the Lease have been satisfied or waived, all construction of Tenant Improvements is complete, and all permits and licenses required for Tenant's operation have been granted and/or issued.
Landlord shall promptly provide written notice to Guarantor of any default or failure to perform by Tenant under the Lease and Guarantor shall have the right to cure any such deficiency or default by Tenant, should Tenant fail to do so, within thirty (30) days after the expiration of any cure period provided to Tenant under the Lease (and, in the event that no cure period is provided to Tenant under the Lease, Guarantor shall have 30 days after the delivery of such notice to Guarantor to cure such default). It is hereby understood and agreed that Landlord shall forego the right to exercise any and all remedies available to Landlord under the Lease or at law arising out of Tenant's default unless Tenant or Guarantor fails to cure such default within the time period set forth above. In no event shall any "Liquidated damages" provision or any other provision of the Lease which purports to accelerate the rent or any other charges payable by Tenant under the Lease be enforceable against Guarantor.
Notices shall be sent to Guarantor by United States certified mail, return receipt requested, postage prepaid, or by Airborne Express or other nationally recognized overnight courier service, to the address of Guarantor set forth above, Attn: Michael J. Miller. All notices delivered in the foregoing manner shall be deemed delivered on the date the return receipt is executed. Guarantor may designate a change of address by written notice to Landlord.
The Lease shall not be modified, amended or assigned without the prior written consent of Guarantor. Guarantor hereby consents to the Collateral Assignment of Lease previously entered into, or to be entered into, between Tenant and Kiddie Academy International, Inc.
If Landlord disposes of its interest in the Lease, "Landlord", as used in this guaranty, shall mean Landlord's successors. Guarantor's obligations under this guaranty shall be binding on Guarantor's successors.
GUARANTOR:
WITNESS: Maryland Day Care Centers, Inc.
/s/ Alexander Krowzow By: /s/ George Miller
----------------------------- ------------------------------------
George Miller, President
|
STATE OF MARYLAND )
)
|
COUNTY OF HARFORD )
On this 22 day of March 1995, before me, the subscriber, a Notary Public of the State aforesaid, George Miller, personally appeared, who acknowledged himself to be the President of Maryland Day Care Centers, Inc., and that he, as such officer, being authorized so to do, executed the foregoing Corporate Guaranty for the purposes therein contained, by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
Notary Public /s/ Christine E. Cooney
----------------------------------
CHRISTINE E. COONEY
NOTARY PUBLIC STATE OF MARYLAND
My Commission Expires: My Commission Expires June [Illegible], 1998
--------------------------------------------
|
(NOTARIAL SEAL)
FILE:KIDCDM4Y.WK4
AS OF 03/20/95
EXHIBIT E
GYRODYNE COMPANY OF AMERICA, INC.
CARIN PEREZ AND LOUIS PEREZ
C.O.L ADJUSTMENT SCHEDULE
5% INCREASE FIRST 3 YEARS AND 4% RATE INCREASE THEREAFTER
BASE
RENTAL YEAR REVENUE
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $ 203,525.00
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $ 211,953.84 5% INCREASE
SEP97-AUG98 $ 220,804.13 5% INCREASE
SEP98-AUG99 $ 230,096.33 5% INCREASE
SEP99-AUG00 $ 237,902.88 4% INCREASE
SEP00-AUG01 $ 246,021.07 4% INCREASE
-------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,350,303.84
-------------
SEP01-AUG02 $ 254,463.98 4% INCREASE
SEP02-AUG03 $ 263,244.62 4% INCREASE
SEP03-AUG04 $ 272,376.47 4% INCREASE
SEP04-AUG05 $ 281,873.61 4% INCREASE
SEP05-AUG06 $ 291,750.63 4% INCREASE
-------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,363,709.31
-------------
TOTAL RENTAL FIRST 11 YEARS $2,714,013.15
-------------
AVERAGE COST MONTHLY
BASE PER SQ FT RENT
RENTAL YEAR REVENUE
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $ 203,525.00 $17.50 $16,960.42
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $ 211,953.84 $18.22 $17,662.82
SEP97-AUG98 $ 220,804.13 $18.99 $18,400.34
SEP98-AUG99 $ 230,096.33 $19.78 $19,174.74
SEP99-AUG00 $ 237,902.88 $20.46 $19,825.24
SEP00-AUG01 $ 246,021.07 $21.15 $20,501.76
----------------------------------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,350,303.84 $19.35 $18,754.22
----------------------------------------
SEP01-AUG02 $ 254,463.98 $21.88 $21,205.33
SEP02-AUG03 $ 263,244.62 $22.63 $21,937.05
SEP03-AUG04 $ 272,376.47 $23.42 $22,698.04
SEP04-AUG05 $ 281,873.61 $24.24 $23,489.47
SEP05-AUG06 $ 291,750.63 $25.09 $24,312.55
----------------------------------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,363,709.31 $23.45 $22,728.49
----------------------------------------
TOTAL RENTAL FIRST 11 YEARS $2,714,013.15 $21.21 $20,560.71
----------------------------------------
ANNUAL
COLA MONTHLY COLA
BASE BASE (A) COLA INCREASE INCREASE
RENTAL YEAR
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $168,576.85
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $177,005.69 $702.40 $8,428.84
SEP97-AUG98 $185,855.98 $737.52 $8,850.28
SEP98-AUG99 $195,148.78 $774.40 $9,292.80
SEP99-AUG00 $202,954.73 $650.50 $7,805.95
SEP00-AUG01 $211,072.92 $676.52 $8,118.19
TOTAL RENTAL INCOME FIRST 6 YRS
SEP01-AUG02 $219,515.83 $703.58 $8,442.92
SEP02-AUG03 $228,296.47 $731.72 $8,780.63
SEP03-AUG04 $237,428.32 $760.99 $9,131.86
SEP04-AUG05 $246,925.46 $791.43 $9,497.13
SEP05-AUG06 $256,802.48 $823.08 $9,877.02
TOTAL RENTAL INCOME SECOND 5 YRS
TOTAL RENTAL FIRST 11 YEARS
|
BASE
RENTAL YEAR REVENUE
*'PER SQ. FT $16.50 11630 SQFT ANNUAL $191,895.00 SEP95-AUG96 $ 191,895.00
GROSS MONTHLY $ 15,991.25 SEP96-AUG97 $ 199,742.34 5% INCREASE
SEP97-AUG98 $ 207,982.05 5% INCREASE
SEP98-AUG99 $ 216,633.75 5% INCREASE
SEP99-AUG00 $ 223,901.17 4% INCREASE
SEP00-AUG01 $ 231,459.29 4% INCREASE
-------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,271,613.60
-------------
SEP01-AUG02 $ 239,319.74 4% INCREASE
SEP02-AUG03 $ 247,494.60 4% INCREASE
SEP03-AUG04 $ 255,996.46 4% INCREASE
SEP04-AUG05 $ 264.838.39 4% INCREASE
SEP05-AUG06 $ 274,034.00 4% INCREASE
-------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,281,683.19
-------------
TOTAL RENTAL FIRST 11 YEARS $2,553,296.80
-------------
REVENUE FOR 11 YEARS @ $17.50 $2,714,013.15
REVENUE FOR 11 YEARS @ $16.50 $2,553,296.80
-------------
AMOUNT OF DISCOUNT $ 160,716.35
=============
AVERAGE COST MONTHLY
BASE PER SQ FT RENT
RENTAL YEAR REVENUE
*'PER SQ. FT $16.50 11630 SQFT ANNUAL $191,895.00 SEP95-AUG96 $ 191,895.00 $16.50 $15,991.25
GROSS MONTHLY $ 15,991.25 SEP96-AUG97 $ 199,742.34 $17.17 $16,645.20
SEP97-AUG98 $ 207,982.05 $17.88 $17,331.84
SEP98-AUG99 $ 216,633.75 $18.63 $18,052.81
SEP99-AUG00 $ 223,901.17 $19.25 $18,658.43
SEP00-AUG01 $ 231,459.29 $19.90 $19,288.27
----------------------------------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,271,613.60 $18.22 $17,661.30
----------------------------------------
SEP01-AUG02 $ 239,319.74 $20.58 $19,943.31
SEP02-AUG03 $ 247,494.60 $21.28 $20,624.55
SEP03-AUG04 $ 255,996.46 $22.01 $21,333.04
SEP04-AUG05 $ 264.838.39 $22.77 $22,069.87
SEP05-AUG06 $ 274,034.00 $23.56 $22,836.17
----------------------------------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,281,683.19 $22.04 $21,361.39
----------------------------------------
TOTAL RENTAL FIRST 11 YEARS $2,553,296.80 $19.96 $19,343.16
----------------------------------------
REVENUE FOR 11 YEARS @ $17.50 $2,714,013.15
REVENUE FOR 11 YEARS @ $16.50 $2,553,296.80
-------------
AMOUNT OF DISCOUNT $160,716.35
=============
ANNUAL
COLA MONTHLY COLA
BASE BASE (A) COLA INCREASE INCREASE
RENTAL YEAR
*'PER SQ. FT $16.50 11630 SQFT ANNUAL $191,895.00 SEP95-AUG96 $156,946.85
GROSS MONTHLY $ 15,991.25 SEP96-AUG97 $164,794.19 $653.95 $7,847.34
SEP97-AUG98 $173,033.90 $686.64 $8,239.71
SEP98-AUG99 $181,685.60 $720.97 $8,651.70
SEP99-AUG00 $188,953.02 $605.62 $7,267.42
SEP00-AUG01 $196,511.14 $629.84 $7,558.12
TOTAL RENTAL INCOME FIRST 6 YRS
SEP01-AUG02 $204,371.59 $655.04 $7,860.45
SEP02-AUG03 $212,546.45 $681.24 $8,174.86
SEP03-AUG04 $221,048.31 $708.49 $8,501.86
SEP04-AUG05 $229,890.24 $736.83 $8,841.93
SEP05-AUG06 $239,085.85 $766.30 $9,195.61
TOTAL RENTAL INCOME SECOND 5 YRS
TOTAL RENTAL FIRST 11 YEARS
REVENUE FOR 11 YEARS @ $17.50
REVENUE FOR 11 YEARS @ $16.50
AMOUNT OF DISCOUNT
|
LEASE CALCULATED WITH 3 MONTHS FREE RENT AND DISCOUNT OF $160,716.35 APPLIED IN
FIRST THREE YEARS
UNADJUSTED
BASE REVENUE @
RENTAL YEAR $17.50
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $ 203,525.00 3MO RENT FREE
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $ 211,953.84 5% INCREASE
SEP97-AUG98 $ 220,804.13 5% INCREASE
SEP98-AUG99 $ 230,095.93 5% INCREASE
SEP99-AUG00 $ 237,902.88 4% INCREASE
SEP00-AUG01 $ 246,021.07 4% INCREASE
-------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,350,303.84
-------------
SEP01-AUG02 $ 254,463.98 4% INCREASE
SEP02-AUG03 $ 263,244.62 4% INCREASE
SEP03-AUG04 $ 272,376.47 4% INCREASE
SEP04-AUG05 $ 281,873.61 4% INCREASE
SEP05-AUG06 $ 291,750.63 4% INCREASE
-------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,363,709.31
-------------
TOTAL RENTAL FIRST 11 YEARS $2,714,013.15
-------------
REVENUE LESS
$1 PER SQ FT AVERAGE COST MONTHLY
BASE DISCOUNT 3YRS PER SQ FT RENT
RENTAL YEAR & 3 MO'S FREE
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $ 112,464.66 $ 9.67 $12,496.07
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $ 158,381.72 $13.62 $13,198.48
SEP97-AUG98 $ 167,232.01 $14.38 $13,936.00
SEP98-AUG99 $ 230,096.93 $19.78 $19,174.74
SEP99-AUG00 $ 237,902.88 $20.46 $19,825.24
SEP00-AUG01 $ 246,021.07 $21.15 $20,501.76
----------------------------------------
TOTAL RENTAL INCOME FIRST 6 YRS $1,152,099.26 $16.51 $16,697.09
----------------------------------------
SEP01-AUG02 $ 254,463.98 $21.88 $21,205.33
SEP02-AUG03 $ 263,244.62 $22.63 $21,937.05
SEP03-AUG04 $ 272,376.47 $23.42 $22,698.04
SEP04-AUG05 $ 281,873.61 $24.24 $23,489.47
SEP05-AUG06 $ 291,750.63 $25.09 $24,312.55
----------------------------------------
TOTAL RENTAL INCOME SECOND 5 YRS $1,363,709.31 $23.45 $22,728.49
----------------------------------------
TOTAL RENTAL FIRST 11 YEARS $2,515,808.57 $19.67 $19,502.39
----------------------------------------
ANNUAL
COLA MONTHLY COLA
BASE BASE (A) COLA INCREASE INCREASE
RENTAL YEAR
*'PER SQ. FT $17.50 11630 SQFT ANNUAL $203,525.00 SEP95-AUG96 $168,576.85
GROSS MONTHLY $ 16,960.42 SEP96-AUG97 $177,005.69 $702.40 $8,428.84
SEP97-AUG98 $185,855.98 $737.52 $8,850.28
SEP98-AUG99 $195,148.78 $774.40 $9,292.80
SEP99-AUG00 $202,954.73 $650.50 $7,805.95
SEP00-AUG01 $211,072.92 $676.52 $8,118.19
TOTAL RENTAL INCOME FIRST 6 YRS
SEP01-AUG02 $219,515.83 $703.58 $8,442.92
SEP02-AUG03 $228,296.47 $731.72 $8,780.63
SEP03-AUG04 $237,428.32 $760.99 $9,131.86
SEP04-AUG05 $246,925.46 $791.43 $9,497.13
SEP05-AUG06 $256,802.48 $823.08 $9,877.02
TOTAL RENTAL INCOME SECOND 5 YRS
TOTAL RENTAL FIRST 11 YEARS
|
(A) COLA BASE IS LOWER THAN THE BASE RENTAL BY $34,948.15 ($3.005 x 11630 SQ
FT)
(B) THREE MONTHS FREE RENT OF $37,488.22 IS BASED ON ANNUAL NET RENT AFTER 1/3
OF THE DISCOUNT ($203,525-$53,572.12/ 12 X3)
A 35--Lease, Business, Premises. JULIUS BLUMBERG, INC., LAW BLANK Loft, Office or Store. 2-65 PUBLISHERS
This Lease made the 23RD day of MARCH 1995, between
GYRODYNE COMPANY OF AMERICA, INC.
hereinafter referred to as LANDLORD, and
CARIN PEREZ AND LUIS PEREZ
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant hereby hires and takes from the Landlord AN AREA DEEMED TO BE APPROXIMATELY 11,630 SQUARE FEET OF SPACE in the building known as 7 FLOWERFIELD -- SUITE 44 to be used and occupied by the Tenant AS A DAY CARE CENTER
OR ABOUT SEPTEMBER 1, 1995 IN ACCORDANCE WITH ADDENDUM SECTION V, 4 and for no
other purpose, for a term to commence on 19 , and to end
THE ELEVENTH ANNIVERSARY OF THE COMMENCEMENT DATE OF THE LEASE
on 19 , unless sooner terminated as hereinafter provided, at the
ANNUAL RENT of ONE HUNDRED FORTY NINE THOUSAND NINE HUNDRED FIFTY TWO DOLLARS
AND EIGHTY FOUR CENTS ($149,952.84) WHICH SHALL BE SUBJECT TO ADJUSTMENT
PURSUANT TO THE COVENANTS HEREIN INCLUDING AND NOT RESTRICTED TO SECTION V,
PARAGRAPHS 4, (a), (b), (c), (d), (e) and (f).
all payable in equal monthly instalments in advance on the first day of each and every calendar month during said term, monthly installments of twelve thousand four hundred ninety six dollars and seven cents ($12,496.07) except the first instalment, which shall be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
REPAIRS
ORDINANCES AND VIOLATIONS
ENTRY
INDEMNIFY LANDLORD
SECOND.--That, throughout said term the Tenant will take good care of the demised premises, fixtures and appurtenances, and all alterations, additions and Improvements to either; make all repairs in and about the same necessary to preserve them in good order and condition, which repairs shall be, In quality and class, equal to the original work; promptly pay the expense of such repairs; suffer no waste or injury; give prompt notice to the Landlord of any fire that may occur; execute and comply with all laws, rules, orders, ordinances and regulations at any time issued or in force (except those requiring structural alterations), applicable to the demised premises or to the Tenant's occupation thereof, of the Federal, State and Local Governments, and of each and every department, bureau and official thereof, and of the New York Board of Fire Underwriters; permit at all times during usual business hours, the Landlord and representatives of the Landlord to enter the demised premises for the purpose of inspection, and to exhibit them for purposes of sale or rental; suffer the Landlord to make repairs and improvements to all parts of the building, and to comply with all orders and requirements of governmental authority applicable to said building or to any occupation thereof; suffer the Landlord to erect, use, maintain, repair and replace pipes and conduits in the demised premises and to the floors above and below; forever indemnify and save harmless the Landlord for and against any and all liability, penalties, damages, expenses and judgments arising from injury during said term to person or property of any nature, occasioned wholly or in part by any act or acts, omission or omissions of the Tenant, or of the employees, guests, agents, assigns or undertenants of the Tenant and also for any matter or thing growing out of the occupation of the demised premises or of the streets, sidewalks or vaults adjacent thereto; permit, during the six months next prior to the expiration of the term the usual notice "To Let" to be placed and to remain unmolested in a conspicuous place upon the exterior of the demised premises; repair, at or before the end (of the term, all injury done by the installation or removal of furniture and property; and at the end of the term, to (quit and surrender the demised premises with all alterations, additions and improvements in good order and condition.**
MOVING INJURY SURRENDER
NEGATIVE COVENANTS
OBSTRUCTION SIGNS
AIR CONDITIONING
THIRD.--That the Tenant will not disfigure or deface any part of the building, or suffer the same to be done, except so far as may be necessary to affix such trade fixtures as are herein consented to by the Landlord; the Tenant will not obstruct, or permit the obstruction of the street or the sidewalk adjacent thereto; will not do anything, or suffer anything to be done upon the demised premises which will increase the rate of fire insurance upon the building or any of its contents, or be liable to cause structural injury to said building; will not permit the accumulation of waste or refuse matter, and will not, without the written consent of the Landlord first obtained in each case, either sell, assign, mortgage or transfer this lease, underlet the demised premises or any part thereof, permit the same or any part thereof to be occupied by anybody other than the Tenant and the Tenant's employees, make any alterations in the demised premises, use the demised premises or any part thereof for any purpose other than the one first above stipulated, or for any purpose deemed extra hazardous on account of fire risk, nor in violation of any law or ordinance. That the Tenant will not obstruct or permit the obstruction of the light, halls, stairway or entrances to the building, and will not erect or inscribe any sign, signals or advertisements unless and until the style and location thereof have been approved by the Landlord; and if any be erected or inscribed without such approval, the Landlord may remove the same. No water cooler, air conditioning unit or system or other apparatus shall be installed or used without the prior written consent of Landlord.
* Landlord warranty for improvements to the demised premises is for a 1 year period beginning on "Commencement Date"
IT IS MUTUALLY COVENANTED AND AGREED, THAT
FIRE CLAUSE
FOURTH.--If the demised premises shall be partially damaged by fire or other cause without the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, the damages shall be repaired by and at the expense of Landlord and the rent until such repairs shall be made shall be apportioned according to the part of the demised premises which is usable by Tenant. But if such partial damage is due to the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors or licensees, without prejudice to any other rights and remedies of Landlord and without prejudice to the rights of subrogation of Landlord's insurer, the damages shall be repaired by Landlord but there shall he no apportionment or abatement of rent. No penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Landlord and/or Tenant, and for reasonable delay on account of "labor troubles", or any other cause beyond Landlord's control. If the demised premises are totally damaged or are rendered wholly untenantable by fire or other cause, and if Landlord shall decide not to restore or not to rebuild the same, or if the building shall be so damaged that Landlord shall decide to demolish it or to rebuild it, then or in any of such events Landlord may, within ninety (90) days after such fire or other cause, give Tenant a notice in writing of such decision, which notice shall be given as in Paragraph Twelve hereof provided, and thereupon the term of this lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the demised premises and surrender the same to Landlord. If Tenant shall not be in default under this lease then, upon the termination of this lease under the conditions provided for in the sentence immediately preceding, Tenant's liability for rent shall cease as of the day following the casualty. Tenant hereby expressly waives the provisions of Section 227 of the Real Property Law and agrees that the foregoing provisions of this Article shall govern and control in lieu thereof. If the damage or destruction be due to the fault or neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
EMINENT DOMAIN
FIFTH.--If the whole or any part of the premises hereby demised shall be taken or condemned by any competent authority for any public use or purpose then the term hereby granted shall cease from the time when possession of the part so taken shall be required for such public purpose and without apportionment of award, the Tenant hereby assigning to the Landlord all right and claim to any such award, the current rent, however, in such case to be apportioned.
LEASE NOT IN EFFECT
DEFAULTS
TEN DAY NOTICE
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated a bankrupt, or make a "general assignment," or take the benefit of any insolvent act, or if a Receiver or Trustee be appointed for the Tenant's property, or if this lease or the estate of the Tenant hereunder be transferred or pass to or devolve upon any other person or corporation, or if the Tenant shall default in the performance of any agreement by the Tenant contained in any other lease to the Tenant by the Landlord or by any corporation of which an officer of the Landlord is a Director, this lease shall thereby, at the option of the Landlord, be terminated and in that case, neither the Tenant nor anybody claiming under the Tenant shall be entitled to go into possession of the demised premises. If after the commencement of the term, any of the events mentioned above in this subdivision shall occur, or if Tenant shall make default in fulfilling any of the covenants of this lease, other than the covenants for the payment of rent or "additional rent" or if the demised premises become vacant or deserted, the Landlord may give to the Tenant ten days' notice of intention to end the term of this lease, and thereupon at the expiration of said ten days' (if said condition which was the basis of said notice shall continue to exist) the term under this lease shall expire as fully and completely as if that day were the date herein definitely fixed for the expiration of the term and the Tenant will then quit and surrender the demised premises to the Landlord, but the Tenant shall remain liable as hereinafter provided.
RE-POSSESSION BY LANDLORD
RE-LETTING
WAIVER BY TENANT
If the Tenant shall make default in the payment of the rent reserved hereunder, or any item of "additional rent" herein mentioned, or any part of either or in making any other payment herein provided for, or if the notice last above provided for shall have been given and if the condition which was the basis of said notice shall exist at the expiration of said ten days' period, the Landlord may immediately, or at any time thereafter, re-enter the demised premises and remove all person and all or any property therefrom, either by summary dispossess proceedings, or by any suitable action or proceeding at law, or by force or otherwise, without being liable to indictment, prosecution or damages therefor, and re-possess and enjoy said premises together with all additions, alterations and improvements. In any such case or in the event that this lease be "terminated" before the commencement of the term, as above provided, the Landlord may either re-let the demised premises or any part or parts thereof for the Landlord's own account, or may, at the Landlord's option, re-let the demised premises or any part or parts thereof as the agent of the Tenant, and receive the rents therefor, applying the same first to the payment of such expenses as the Landlord may have incurred, and then to the fulfillment of the covenants of the Tenant herein, and the balance, if any, at the expiration of the term first above provided for, shall be paid to the Tenant. Landlord may rent the premises for a term extending beyond the term hereby granted without releasing Tenant from any liability.* In the event that the term of this lease shall expire as above in this subdivision "Sixth" provided, or terminate by summary proceedings or otherwise, and if the Landlord shall not re-let the demised premises for the Landlord's own account, then, whether or not the premises be re-let, the Tenant shall remain liable for, and the Tenant hereby agrees to pay to the Landlord, until the time when this lease would have expired but for such termination or expiration, the equivalent of the amount of all of the rent and "additional rent" reserved herein, less the avails of reletting, if any, and the same shall be due and payable by the Tenant to the Landlord on the several rent days above specified, that is, upon each of such rent days the Tenant shall pay to the Landlord the amount of deficiency then existing. The Tenant hereby expressly waives any and all right of redemption in case the Tenant shall be dispossessed by judgment or warrant of any court of judge, and the Tenant waives and will waive all right to trial by jury in any summary proceedings hereafter instituted by the Landlord against the Tenant in respect to the demised premises. The word "re-enter" and "re-entry" as used in this lease are not restricted to their technical legal meaning.
*Tenant liability is restricted to the end of the lease term.
REMEDIES ARE CUMULATIVE
In the event of a breach or threatened breach by the Tenant of any of the covenants or provisions hereof, the Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity, as if re-entry, summary proceedings and other remedies were not herein provided for.
LANDLORD MAY PERFORM
ADDITIONAL RENT
SEVENTH.--If the Tenant shall make default in the performance of any covenant herein contained, the Landlord may immediately, or at any time thereafter, without notice, perform the same for the account of the Tenant. If a notice of mechanic's lien be filed against the demised premises or against premises of which the demised premises are part, for, or purporting to be for, labor or material alleged to have been furnished, or to be furnished to or for the Tenant at the demised premises, and if the Tenant shall fail to take such action as shall cause such lien to be discharged within fifteen days after the filing of such notice, the Landlord may pay the amount of such lien or discharge the same by deposit or by bonding proceedings, and in the event of such deposit or bonding proceedings, the Landlord may require the lienor to prosecute an appropriate action to enforce the lienor's claim. In such case, the Landlord may pay any judgment recovered on such claim. Any amount paid or expense incurred by the Landlord as in this subdivision of this lease provided, and any amount as to which the Tenant shall at any time be in default for or in respect to the use of water, electric current or sprinkler supervisory service, and any expense incurred or sum of money paid by the Landlord by reason of the failure of the Tenant to comply with any provision hereof, or in defending any such action, shall be deemed to be "additional rent" for the demised premises, and shall be due and payable by the Tenant to the Landlord on the first day of the next following month, or, at the option of the Landlord, on the first day of any succeeding month. The receipt by the Landlord of any instalment of the regular stipulated rent hereunder or any of said "additional rent" shall not be a waiver of any other "additional rent" then due.
AS TO WAIVERS
EIGHTH.--The failure of the Landlord to insist, in any one or more instances upon a strict performance of any of the covenants of this lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by the Landlord of rent, with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach and no waiver by the Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Landlord. Even though the Landlord shall consent to an assignment hereof no further assignment shall be made without express consent in writing by the Landlord.
COLLECTION OF RENT FROM OTHERS
NINTH.--If this lease be assigned, or if the demised premises or any part thereof be underlet or occupied by anybody other than the Tenant the Landlord may collect rent from the assignee, under-tenant or occupant, and apply the net amount collected to the rent herein reserved, and no such collection shall be deemed a waiver of the covenant herein against assignment and underletting, or the acceptance of the assignee, under-tenant or occupant as tenant, or a release of the Tenant from the further performance by the Tenant of the covenants herein contained on the part of the Tenant.
MORTGAGES
[VOID]
IMPROVEMENTS
ELEVENTH.--All improvements made by the Tenant to or upon the demised premises, except said trade fixtures, shall when made, at once be deemed to be attached to the freehold, and become the property of the Landlord, and at the end or other expiration of the term, shall be surrendered to the Landlord in as good order and condition as they were when installed, reasonable wear and damages by the elements excepted.
NOTICES
[VOID]
NO LIABILITY
THIRTEENTH.--The Landlord shall not be liable for any failure of water supply or electrical current, sprinkler damage, or failure of sprinkler service, nor for injury or damage to person or property caused by the elements or by other tenants or persons in said building, or resulting from steam, gas, electricity, water, rain or snow, which may leak or flow from any pant of said buildings, or from the pipes, appliances or plumbing works of the same, or from the street or sub-surface, or from any other place, nor for interference with light or other incorporeal hereditaments by anybody other than the Landlord, or caused by operations by or for a governmental authority in construction of any public or quasi-public work, neither shall the Landlord be liable for any latent defect in the building,
NO ABATEMENT
FOURTEENTH.--No diminution or abatement of rent, or other compensation shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building or to its appliances, nor for any space taken to comply with any law, ordinance or order of a governmental authority. In respect to the various "services," if any, herein expressly or impliedly agreed to be furnished by the Landlord to the Tenant, it is agreed that there shall be no diminution or abatement of the rent, or any other compensation, for interruption or curtailment of such "service" when such interruption or curtailment shall be due to accident, alterations or repairs desirable or necessary to be made or to inability or difficulty in securing supplies or labor for the maintenance of such "service" or to some other cause, not gross negligence on the part of the Landlord. No such interruption or curtailment of any such "service" shall be deemed a constructive eviction. The Landlord shall not be required to furnish, and the Tenant shall not be entitled to receive, any of such "services" during any period wherein the Tenant shall be in default in respect to the payment of rent. Neither shall there be any abatement or diminution of rent because of making of repairs, improvements or decorations to the demised premises after the date above fixed for the commencement of the term, it being understood that rent shall, in any event, commence to run at such date so above fixed.
RULES, ETC.
FIFTEENTH.--The Landlord may prescribe and regulate the placing of safes, machinery, quantities of merchandise and other things. The Landlord may also prescribe and regulate which elevator and entrances shall be used by the Tenant's employees, and for the Tenant's shipping. The Landlord may make such other and further rules and regulations as, in the Landlord's judgment, may from time to time be needful for the safety, care or cleanliness of the building, and for the preservation of good order therein. The Tenant and the employees and agents of the Tenant will observe and conform to all such rules and regulations.
SHORING OF WALLS
[VOID]
VAULT SPACE
[VOID]
ENTRY
EIGHTEENTH.--That during seven months prior to the expiration of the term hereby granted, applicants shall be admitted at all reasonable hours of the day to view the premises until rented; and the Landlord and the Landlord's agents shall be permitted at any time during the term to visit and examine them at any reasonable hour of the day, and workmen may enter at any time, when authorized by the Landlord or the Landlord's agents, to make or facilitate repairs in any part of the building; and if the said Tenant shall not be personally present to open and permit an entry into said premises, at any time, when for any reason an entry therein shall be necessary or permissible hereunder, the Landlord or the Landlord's agents may forcibly enter the same without rendering the Landlord or such agents liable to any claim or cause of action for damages by reason thereof (if during such entry the Landlord shall accord reasonable care to the Tenant's property) and without in any manner affecting the obligations and covenants of this lease; it is, however, expressly understood that the right and authority hereby reserved, does not impose, nor does the Landlord assume, by reason thereof, any responsibility or liability whatsoever for the care or supervision of said premises, or any of the pipes, fixtures appliances or appurtenances therein contained or therewith in any manner connected. ***
NO REPRESENTATIONS
NINETEENTH.--The Landlord has made no representations or promises in respect to said building or to the demised premises except those contained herein, and those, if any, contained in some written communication to the Tenant, signed by the Landlord. This instrument may not be changed, modified, discharged or terminated orally.
ATTORNEY'S FEES
TWENTIETH.--If the Tenant shall at any time be in default hereunder, and if the Landlord shall institute an action or summary proceeding against the Tenant based upon such default, then the Tenant will reimburse the Landlord for the expense of attorneys' fees and disbursements thereby incurred by the Landlord, so far as the same are reasonable in amount. Also so long as the Tenant shall be a tenant hereunder the amount of such expenses shall be deemed to be "additional rent" hereunder and shall be due from the Tenant to the Landlord on the first day of the month following the incurring of such respective expenses.
POSSESSION
TWENTY-FIRST.--Landlord shall not be liable for failure to give possession of the premises upon commencement date by reason of the fact that premises are not ready for occupancy, or due to a prior Tenant wrongfully holding over or any other person wrongfully in possession or for any other reason: in such event the rent shall not commence until possession is given or is available, but the term herein shall not be extended.
***This provision alludes to the minimum access granted to Landlord and is meant t[Illegible]
THE TENANT FURTHER COVENANTS:
IF A FIRST FLOOR
[VOID]
INCREASED FIRE INSURANCE RATE
TWENTY-THIRD.--If by reason of the conduct upon the demised premises of a business not herein permitted, or if by reason of the improper or careless conduct of any business upon or use of the demised premises, the fire insurance rate shall at any time be higher than it otherwise would be, then the Tenant will reimburse the Landlord, as additional rent hereunder, for that part of all fire insurance premiums hereafter paid out by the Landlord which shall have been charged because of the conduct of such business not so permitted, or because of the improper or careless conduct of any business upon or use of the demised premises, and will make such reimbursement upon the first day of the month following such outlay by the Landlord; but this covenant shall not apply to a premium for any period beyond the expiration date of this lease, first above specified. In any action or proceeding wherein the Landlord and Tenant are parties, a schedule or "make up" of rate for the building on the demised premises, purporting to have been issued by New York Fire Insurance Exchange, or other body making fire insurance rates for the demised premises, shall be prima facie evidence of the facts therein stated and of the several items and charges included in the fire insurance rate then applicable to the demised premises.
WATER RENT
SEWER
TWENTY-FOURTH.--If a separate water meter be installed for the demised premises, or any part thereof, the Tenant will keep the same in repair and pay the charges made by the municipality or water supply company for or in respect to the consumption of water, as and when bills therefor are rendered. If the demised premises, or any part thereof, be supplied with water through a meter which supplies other premises, the Tenant will pay to the Landlord, as and when bills are rendered therefor, the Tenant's proportionate part of all charges which the municipality or water supply company shall make for all water consumed through said meter, as indicated by said meter. Such proportionate part shall be fixed by apportioning the respective charge according to floor area against all of the rentable floor area in the building (exclusive of the basement) which shall have been occupied during the period of the respective charges, taking into account the period that each part of such area was occupied. Tenant agrees to pay as additional rent the Tenant's proportionate part, determined as aforesaid, of the sewer rent or charge imposed or assessed upon the building of which the premises are a part.
ELECTRIC CURRENT
TWENTY-FIFTH.--That the Tenant will purchase from the Landlord, if the Landlord shall so desire, all electric current that the Tenant requires at the demised premises, and will pay the Landlord for the same, as the amount of consumption shall be indicated by the meter furnished therefor. The price for said current shall be the same as that charged for consumption similar to that of the Tenant by the company supplying electricity in the same community. Payments shall be due as and when bills shall be rendered. The Tenant shall comply with like rules, regulations and contract provisions as those prescribed by said company for a consumption similar to that of the Tenant.
SPRINKLER SYSTEM
TWENTY-SIXTH.--If there now is or shall be installed in said building a "sprinkler system" the Tenant agrees to keep the appliances thereto in the demised premises in repair and good working condition, and if the New York Board of Fire Underwriters or the New York Fire Insurance Exchange or any bureau, department or official of the State or local government requires or recommends that any changes, modifications, alterations or additional sprinkler heads or other equipment be made or supplied by reason of the Tenant's business, or the location of partitions, trade fixtures, or other contents of the demised premises, or if such changes, modifications, alterations, additional sprinkler heads or other equipment in the demised premises are necessary to prevent the imposition of a penalty or charge against the full allowance for a sprinkler system in the fire insurance rate as fixed by said Exchange, or by any Fire Insurance Company, the Tenant will at the Tenant's own expense, promptly make and supply such changes, modifications, alterations, additional sprinkler heads or other equipment. As additional rent hereunder the Tenant will pay to the Landlord, annually in advance, throughout the term $ a prorata portion toward the contract price for sprinkler supervisory service.
SECURITY
TWENTY-SEVENTH.--The sum of see paragraph #1 of Addendum Sec. V Dollars is deposited by the Tenant herein with the Landlord herein as security for the faithful performance of all the covenants and conditions of the lease by the said Tenant. If the Tenant faithfully performs all the covenants and conditions on his part to be performed, then the sum deposited shall be returned to said Tenant.
NUISANCE
TWENTY-EIGHTH.--This lease is granted and accepted on the especially understood and agreed condition that the Tenant will conduct his business in such a manner, both as regards noise and kindred nuisances, as will in no wise interfere with, annoy, or disturb any other tenants, in the conduct of their several businesses, or the landlord in the management of the building; under penalty of forfeiture of this lease and consequential damages.
BROKERS COMMISSIONS
TWENTY-NINTH.--The Landlord hereby recognizes no broker as the broker who negotiated and consummated this lease with the Tenant herein, and agrees that if, as, and when the Tenant exercises the option, if any, contained herein to renew this lease, or fails to exercise the option, if any, contained therein to cancel this lease, the Landlord will pay to said broker a further commission in accordance with the rules and commission rates of the Real Estate Board in the community. A sale, transfer, or other disposition of the Landlord's interest in said lease shall not operate to defeat the Landlord's obligation to pay the said commission to the said broker. The Tenant herein hereby represents to the Landlord that the said broker is the sole and only broker who negotiated and consummated this lease with the Tenant.
WINDOW CLEANING
[VOID]
VALIDITY
THIRTY-FIRST.--The invalidity or unenforceability of any provision of this lease shall in no way affect the validity or enforceability of any other provision hereof.
EXECUTION & DELIVERY OF LEASE
THIRTY-SECOND.--In order to avoid delay, this lease has been prepared and submitted to the Tenant for signature with the understanding that it shall not bind the Landlord unless and until it is executed and delivered by the Landlord.
EXTERIOR OF THE PREMISES
[VOID]
PLATE GLASS
THIRTY-FOURTH.--The Landlord shall replace at the expense of the Tenant any and all broken glass in the skylights, doors and walls in and about the demised premises. The Landlord may insure and keep insured all plate glass in the skylights, doors and walls in the demised premises, for and in the name of the Landlord and bills for the premiums therefor shall be rendered by the Landlord to the Tenant at such times as the Landlord may elect, and shall be due from and payable by the Tenant when rendered, and the amount thereof shall be deemed to be, and shall be paid as, additional rent.
WAR EMERGENCY
THIRTY-FIFTH.--This lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on part of Tenant to be performed shall in nowise be affected, impaired or excused because Landlord is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reason of governmental preemption in connection with a National Emergency declared by the President of the United States or in connection with any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency.
THE LANDLORD COVENANTS
QUIET POSSESSION
FIRST.--That if and so long as the Tenant pays the rent and "additional rent" reserved hereby, and performs and observes the covenants and provisions hereof, the Tenant shall quietly enjoy the demised premises, subject, however, to the terms of this lease, and to the mortgages above mentioned, provided however, that this covenant shall be conditioned upon the retention of title to the premises by Landlord.
ELEVATOR HEAT
[VOID]
And it is mutually understood and agreed that the covenants and agreements contained in the within lease shall be binding upon the parties hereto and upon their respective successors, heirs, executors and administrators.
In Witness Whereof, the Landlord and Tenant have respectively signed and sealed these presents the day and year first above written,
GYRODYNE COMPANY OF AMERICA, INC.
BY: /s/ [Illegible]
--------------------------------------[L.S.]
Landlord
|
IN PRESENCE OF:
BY: /s/ CARIN PEREZ -------------------------------------------- CARIN PEREZ -- TENANT BY: /s/ LUIS PEREZ --------------------------------------[L.S.] LUIS PEREZ -- TENANT Tenant |
State of New York, County of ss:
On the day of 19 , before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of , the corporation described in and which executed the within instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
State of New York, County of SUFFOLK ss:
On the 23 day of March 19 , before me personally came ALEX KROWZOW, to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is of MARYLAND DAY CARE CENTER, INC. the corporation described in and which executed the within instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.
State of New York, County of SUFFOLK ss:
On the 23 day of MARCH 19 , before me personally came CARIN PEREZ to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged that he executed the same.
/s/ Joseph L. Dorn
JOSEPH L. DORN
NOTARY PUBLIC, State of New York
No. 4894804, Suffolk County
Commission Expires April 20, 1995
State of New York, County of SUFFOLK ss:
|
On the 23 day of MARCH 19 , before me personally came LUIS PEREZ, subscribing witness to the foregoing instrument, with whom I am personally acquainted, who, being by me duly sworn, did depose and say, that he resided, at the time of the execution of said instrument, and still resides, in that he is and then was acquainted with , and knew to be the individual described in and who executed the foregoing instrument; and that he, said subscribing witness, was present and saw execute the same; and that he, said witness, thereupon at the same time subscribed his name as witness thereto.
/s/ Joseph L. Dorn
JOSEPH L. DORN
NOTARY PUBLIC, State of New York
No. 4894804, Suffolk County
Commission Expires April 20, 1995
|
GYRODYNE COMPANY OF AMERICA, INC.
Landlord
to
CARIN PEREZ AND LUIS PEREZ
Tenant
L E A S E
C0 GUARANTY
In consideration of the letting of the premises within mentioned to the Tenant within named, and of the sum of One Dollar, to the undersigned in hand paid by the Landlord within named, the undersigned hereby guarantees to the Landlord and to the heirs, successors and/or assigns of the Landlord, the payment by the Tenant of the rent, within provided for, and the performance by the Tenant of all of the provisions of the within lease. Notice of all defaults is waived, and consent is hereby given to all extensions of time that any Landlord may grant.
Dated, 19 MARYLAND DAY CARE CENTER, INC.
BY:_____________________________L.S.
STATE OF NEW YORK COUNTY OF SUFFOLK ss:
On this 23RD day of MARCH, 1995, before me personally appeared LUIS PEREZ AND CARIN PEREZ to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
CO-GUARANTY
/s/ Luis Perez
----------------------------------------
/s/ Joseph L. Dorn LUIS PEREZ
JOSEPH L. DORN
NOTARY PUBLIC, State of New York /s/ Carin Perez
No. 4894804, Suffolk County ----------------------------------------
Commission Expires April 20, 1995 CARIN PEREZ
|
Exhibit 99.4
Incentive Compensation Plan
1. Definitions.
(a) "Administrative Committee" means the Board of Directors of the Company unless the Board shall elect from among its members a committee to administer the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means (i) a tender offer or exchange offer made and consummated for ownership of Common Stock representing 30% or more of the combined voting power of the Company's outstanding securities; (ii) the sale or transfer of substantially all of the Company's assets to another person which is not a wholly-owned subsidiary of the Company; (iii) any transaction relating to the Company which must be described in accordance with item 5(f) of Schedule 14A of Regulation 14A of the Securities and Exchange Commission; or (v) any merger, share exchange or consolidation of the Company with another entity.
(d) "Common Stock" means shares of the common stock of the Company.
(e) "Company" means Gyrodyne Company of America, Inc.
(f) "Closing Date" means the date a Change in Control is consummated.
(g) "Fair Market Value of one share of Common Stock as of the Establishment Date" means $15.3875.
(h) "The Fair Market Value of one share of Common Stock as of the Closing Date" shall mean (i) in the event a Change in Control is effected by a cash purchase of Common Stock, the price paid by the acquirer; and (ii) in the event of a Change in Control is effected with consideration other than cash or involving the sale of Company assets, the per share value to the target shareholders of the transaction as consummated as determined by an investment banking firm which is a member of the New York Stock Exchange and which is selected by the Company.
(i) "Establishment Date" means June 25, 1999.
(j) "Incentive Compensation Payments" means the payments to be made to Participants under the terms of the Plan.
(k) "Incentive Compensation Rights" or "ICRs" are the rights created under the terms of the Plan.
(l) "Other Eligible Employee" means any individual who is employed by the Company and who is not the President, the Executive Vice-President, or a Vice President of the Company or an Other Management Employee.
(m) "Other Management Employee" means any management employee of the Company who is not the President, the Executive Vice President or a Vice President of the Company.
(n) "Participant" means any individual who has been granted ICRs by the Administrative Committee.
(o) "Plan" means this Incentive Compensation Plan.
(p) "ICR Unit" means the unit used under the Plan to compute the incentive compensation to be paid to Participants reflecting the appreciation in the value of the Common Stock from the Establishment Date through the Closing Date and which is equivalent to one share of Common Stock for the purposes of this Plan and for no other purpose.
2. Purpose.
The purpose of the Plan is to promote the shareholder point of view among employees and members of the Board; encourage Participants to support a Change in Control at the highest obtainable per share value; and create an alternative incentive compensation plan which, unlike the existing stock option plans, will not cause continued dilution.
3. Eligibility.
All employees of the Company and all members of the Board are eligible for ICR grants under the terms of the Plan.
4. Granting of ICRs.
The Administrative Committee has, effective June 25, 1999, awarded ICRs to all employees having at least one year of employment with the Company, and all members of the Board on that date.
Employees and members of the Board assuming positions described in paragraph 5 below after June 25, 1999, may be granted ICRs by majority vote of the Administrative Committee.
5. Incentive Compensation Payments.
Participants shall be paid Incentive Compensation Payments within 10 days after the consummation of a Change in Control in accordance with the following percentage weights:
% of
Percentage Participants Total
CLASS Weight in class* by class
----- ------ ------------ --------
1. President & CEO 12% 1 12%
2. Executive Vice President 8-1/2% 1 8 1/2%
3. Vice President 3% 2 6%
4. Other Management Employees 2-1/2% 4 10%
5. Other Eligible Employees 1/2% 13 6 1/2%
6. Non-Employee Directors 5-1/2% 7 38 1/2%
7. Non-employee Director
Executive Committee Service 3% 4 12%
8. Non-Employee Director
Special Change in Control
Committee 1-1/2% 3 4 1/2%
9. Chairman of the Board 2% 1 2%
------
Total 100%
|
*estimated
(iii) An individual Participant's Incentive Compensation Payment will equal the percentage of the total payments allocated to the Participant's class (column 3) divided by the number of persons in that class (column 2) times the Total Value of the ICR Units as defined in Section 6 below.
In the event that a Participant's ICRs terminate prior to a Change in Control, the percentage assigned that Participant shall automatically be redistributed pro-rata to the other Participants within the class. In the event that a new Participant joins a class, the percentage assigned within the
class will automatically be redistributed pro-rata to the Participants in the class. In the event that there are no Participants remaining in a class, the percentage assigned to the class shall be redistributed pro rata among the other classes.
The Administrative Committee may, in its sole discretion, effectuate changes in the percentage assigned to a class based upon the fairness of the weighting process after any redistribution. In no event shall any change by the Administrative Committee reduce the individual percentage weight assigned on the Establishment Date to a Participant.
ICRs for Board members shall be cumulative. For example, a Chairman of the Board who held no other position would receive 7-1/2%.
6. Number of ICR Units.
The number of ICR Units shall be fixed at 100,000.
The Total Value of ICR Units on the Closing Date shall equal the difference between the Fair Market Value of the Common Stock on the Establishment Date ($15.3875) and the Fair Market Value of the Common Stock on the Closing Date multiplied by the total number of ICR Units (100,000).
7. Vesting.
A Participant's ICRs shall vest on the date a Change of Control is consummated provided that he or she has continuously remained in the position giving rise to the ICR. In the event that any Participant should die prior to a Change in Control, the Participant's ICR's will be deemed to have vested on the date of the Participant's death. In such event, in computing the Incentive Compensation Payments, the Participant shall be deemed to hold the position held on the date of death.
8. Method of Payment.
Incentive Compensation Payments shall be paid in one lump sum, as compensation, subject to payroll tax and other withholding. Incentive Compensation Payments may be paid in fully registered and freely transferable Common Stock, at the Company's option. In such event, the value of the Common Stock shall be deemed to equal the Fair Market Value of the Common Stock on the Closing Date.
9. Duties of Administrative Committee.
The Administrative Committee shall award ICRs and administer, construe and interpret the Plan. No member of the Administrative Committee shall be liable for any act done or determination made in good faith. The construction and interpretation by the Administrative Committee of any provision of this Plan shall be final and conclusive.
10. Discontinuance of Plan.
The Board may discontinue the Plan at any time, provided that such discontinuance shall not affect the Participant's right to receive Incentive Compensation Payments for any Change in Control announced prior to the date of discontinuance or consummated within one year of the date of discontinuance.
11. Limitation of Rights.
Nothing in this Plan shall be construed to:
(1) Give any employee of the Company any right to be awarded any ICR Units other than in the sole discretion of the Administrative Committee;
(2) Give a Participant any rights whatsoever with respect to shares of Common Stock;
(3) Limit in any way the right of the Company to terminate a Participant's employment with the Company at any time; or
(4) Be evidence of any agreement or understanding, expressed or implied, that the Company will employ a Participant in any particular position or at any particular rate of remuneration or for any particular period of time.
12. Adjustment in Number of Units.
In the event of any stock dividend on the Common Stock or any split-up or combination of shares of the Common Stock, appropriate adjustment shall be made by the Administrative Committee in the aggregate number of ICR Units which may be awarded under this Plan, and in the number of Units outstanding to the credit of each Participant.
13. Nonalienation of Benefits.
No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the Participant entitled to such benefits. In the event of the death of a Participant, a beneficiary designated in a writing signed by the Participant, or if there is no such designated beneficiary, the personal representative of the decedent's estate, shall be entitled to exercise the decedent's vested ICRs. The Exercise Price shall be paid to the designated beneficiary, or if there is no such designated beneficiary, the personal representative of the decedent's estate.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALLERY-JUDGE GROVE,
A NEW YORK LIMITED PARTNERSHIP
dated as of
May 8, 1995
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALLERY-JUDGE GROVE,
A NEW YORK LIMITED PARTNERSHIP
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of May 8, 1995, is entered into by and among CJG Management, Ltd., a Florida limited partnership ("CJG Management"), as the general partner and those persons and entities whose names and addresses appear on the books and records of the Partnership as partners.
WITNESSETH:
WHEREAS, a limited partnership having the name "Callery-Judge Grove" was previously formed under the Laws of the State of New York (the "Partnership") and
WHEREAS, James Callery, Gaston C. Jones and Citrus Management, Inc. (collectively, the "Prior General Partners") are the general partners of the Partnership; and
WHEREAS, Gaston C. Jones intends to withdraw as a general partner and convert his general partner interest into a Limited Partner interest; and
WHEREAS, Citrus Management, Inc. intends (i) to change its name to CJG Holdings, Inc., and (ii) to withdraw as a general partner and become a limited partner; and
WHEREAS, James Callery, having conveyed his interest as general partner to CJG Management, intends to withdraw as general partner, and
WHEREAS, CJG Management wishes to become the sole general partner of the Partnership; and
WHEREAS, the Estate of Grant E. Judge, The Gladys M. Judge Testamentary Trust, Gaston C. Jones, as Trustee, CJG Holdings, Inc. (formerly Citrus Management, Inc.) and James Callery, as Trustee for the benefit of Virginia R. Callery and as Trustee for the benefit of Sprague E. Callery, who are all of the Partnership's special limited partners, intend to become limited partners of the Partnership; and
WHEREAS, each of the parties hereto (a) has granted its consent to and ratified (i) the conveyance by James Callery of his interest as general partner to CJG Management, (ii) the withdrawal of the Prior General Partners as general partners, (iii) the admission of CJG
Management, as substituted general partner, (iv) the admission of CJG Holdings, Inc. (formerly Citrus Management, Inc.) as limited partner, (v) the conversion of the General Partnership interest of Gaston C. Jones into a limited partnership interest, and (vi) the withdrawal of the Estate of Grant E. Judge, The Gladys M. Judge Testamentary Trust, Gaston C. Jones, as Trustee, CJG Holdings, Inc. (formerly Citrus Management, Inc.), James Callery as Trustee for the benefit of Virginia R. Callery and as Trustee for the benefit of Sprague E. Callery, as special limited partners and their admission as limited partners, and (b) intends that this Recital evidence its consents and ratifications described above; and
WHEREAS, the parties to this Amended and Restated Agreement of Limited Partnership currently constitute all of the partners in the Partnership; and
WHEREAS, the parties to this Amended and Restated Agreement of Limited Partnership intend to amend and restate the Agreement of Limited Partnership governing the Partnership upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, for valuable consideration, the parties do hereby agree that the Partnership shall continue under, and the actions of each of the parties to this Amended and Restated Agreement of Limited Partnership with respect to the Partnership shall, to the extent not inconsistent with the laws of the State of New York, be governed by, the terms and conditions of this Agreement set forth below.
ARTICLE I
Certain Definitions; General Provisions
Section 1.01. Continuation. The parties hereto hereby continue the Partnership under the name Callery-Judge Grove, L.P., in accordance with, and subject to the terms and conditions set forth in, this Agreement.
Section 1.02. Certain Definitions. As used herein:
"Adjusted Capital Account" shall mean, with respect to any Partner, the balance in the Partner's Capital Account (whether positive or negative) as of the end of the Fiscal Year, (i) increased by the sum of (A) any amount which such Partner is obligated to contribute to the Partnership, (B) such Partner's share of minimum gain attributable to partnership nonrecourse liabilities (within the meaning of Treas. Reg. ss. 1.704-2) as of the end of the Fiscal Year, (C) such Partner's share of minimum gain attributable to partner nonrecourse liabilities (within the meaning of Treas. Reg. ss. 1.704-2) as of the end of the Fiscal Year, and (D) any amount for which such Partner is personally liable with respect to liabilities of the Partnership (except to the extent that such amount would duplicate the amount of any items under clauses (A), (B) or (C)), and (ii) decreased by such Partner's share of the reasonably
expected net adjustments, allocations and distributions described in Treas. Reg. ss. 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Affiliate" means, with respect to a Partner, any Person (i) which directly or indirectly owns 50% or more of; or (ii) 50% or more of which is directly or indirectly owned by, or (iii) 50% or more of which directly or indirectly is owned by one or more other Persons directly or indirectly owning 50% or more of, such Partner. For purposes of the preceding sentence, a Person shall be deemed to own that portion of another Person equal to (x) if such other Person is a partnership, trust or any other unincorporated association or entity, the percentage interest in income or capital of such partnership, trust or unincorporated association or entity, or (y) if such other Person is a corporation, the percentage of total shares or voting shares of such corporation, whichever is greater, owned by such first Person.
"Capital Account" has the meaning specified in Section 4.0l(a). The Capital Account of each Partner as of December 31, 1993, is set forth in the books and records of the Partnership.
"Capital Contribution" means the cash or fair market value of other property previously contributed by a Partner (or its predecessor in interest and properly allocable to such Partner) to the Partnership, or that may in the future be contributed by a Partner pursuant to this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended to date. A reference to a section of the Code shall be deemed to include any amendatory or successor provision thereto.
"Distributable Funds" means the amount of cash (including cash held
in Partnership reserves and net refinancing proceeds) that the Managing
Partner anticipates will be available to the Partnership during such
period of time as the Managing Partner deems relevant to such
determination, reduced by the sum of (i) the amount of cash that the
Managing Partner, in its sole discretion, anticipates will be required to
meet all of the obligations of the Partnership (including, but not limited
to, capital expenditures and payments of principal and interest on any
debts and other obligations of the Partnership) during such period, and
(ii) the amount of cash that the Managing Partner, in its sole discretion,
believes necessary or appropriate for the Partnership to retain.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. A reference to a Section of ERISA shall be deemed to include a reference to any amendatory or successor provision thereto.
"GAAP" means generally accepted accounting principles and practices in effect in the United States from time to time.
"GAAP Profits" means the profits of the Partnership for a fiscal year calculated using GAAP.
"General Partner" means CJG Management, in its capacity as a general partner in the Partnership, and any other Person which both (a) acquires, pursuant to this Agreement, an Interest as a general partner in the Partnership and (b) is admitted to the Partnership as a general partner pursuant to this Agreement.
"Incentive Bonus" means an amount equal to five percent of the GAAP Profits of the Partnership for a Fiscal Year in excess of $500,000.
"Interest" has the meaning specified in Section 2.03(a).
"IRS" means the United States Internal Revenue Service.
"Limited Partner" means each of the Persons the names of which appear on the books and records of the Partnership as partners in its capacity as a limited partner in the Partnership, and any other Person which both (a) acquires, pursuant to this Agreement, an Interest as a limited partner in the Partnership and (b) is admitted to the Partnership as a limited partner.
"Major Decision" has the meaning specified in Section 3.02.
"Majority-In-Interest" means one or more Partners which, in the aggregate, hold greater than 50% of the Percentage Interests held by all Partners.
"Managing Partner" means CJG Management for so long as it is a General Partner and has not been removed (pursuant to Section 3.02(b)), dissolved or otherwise ceases to be the managing partner of the Partnership, and any other General Partner selected to be the managing partner of the Partnership pursuant to Section 3.02(a)(ii).
"Net Losses" means, for each Fiscal Year or other period, an amount equal to the Partnership's loss, if any, for such Fiscal Year or period, as the case may be, determined in accordance with Section 703(a) of the Code (with all items of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code to be included in computing such loss); provided, however, such loss shall be adjusted by any and all adjustments required to be made in order to determine Capital Account balances in compliance with Treasury Regulation Section 1.704-1(b).
"Net Profits" means, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income, if any, for such Fiscal Year or period, as the case may be, determined in accordance with Section 703(a) of the Code (with all items of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code to be included in computing such profit); provided, however, such income shall be adjusted
by any and all adjustments required to be made in order to determine Capital Account balances in compliance with Treasury Regulation Section 1.704-1(b).
"Notices" has the meaning specified in Section 10.01(a).
"Partners" means, collectively, the General Partners (including the Managing Partner), and the Limited Partners, and any Person(s) admitted to the Partnership as General Partner(s) or Limited Partner(s) pursuant to this Agreement.
"Percentage Interest" means, for each Partner, its interest in the distributions by, and income, gains, losses, deductions and credits of, the Partnership, as set forth, as at the date hereof in the books and records of the Partnership and as changed, from time to time, pursuant to the terms of this Agreement.
"Person" means an individual, corporation, association, partnership, trust, unincorporated organization or a government or any agency or political subdivision thereof.
"Property" means the parcel or parcels of real property containing approximately 3664 acres of land in Palm Beach County, Florida, together with all improvements thereon, the citrus and other trees planted and to be planted thereon, the easements, rights and privileges appurtenant thereto, and such other real property or interests therein, whether or not contiguous with the real property described above, that may be purchased or otherwise acquired by the Partnership from time to time.
"Recognition and Retention Plan" means a deferred compensation plan pursuant to which the Managing General Partner can provide appropriate financial incentives to employees, former employees and former general partners of the Partnership.
"State" means the State of New York.
"Transfer" means any sale, assignment, gift, hypothecation, pledge or other disposition, whether voluntary or by operation of law, of an Interest or any portion thereof or any such sale or other disposition of an ownership or voting interest, directly or indirectly, in a Partner, other than to the Partnership.
"Withdrawing Partner" has the meaning specified in Section 7.01(d).
Section 1.03. Name. The name of the Partnership shall be "Callery-Judge Grove L.P."
Section 1.04. Principal Place of Business. The Partnership's principal place of business shall continue to be in Palm Beach County, Florida, or at such other place as the Managing Partner may designate from time to time.
Section 1.05. Purposes; Powers. The purposes of the Partnership shall continue to be to own the Property and all of the machinery, equipment, inventory and other property, real or personal, tangible or intangible, owned or acquired by the Partnership (or in which the Partnership owns or acquires any interest) from time to time used in those businesses in which it may engage pursuant to this Agreement; to engage in the business of citrus production and other businesses related to citrus production, processing and sales; and to engage in the business of holding real estate for investment and for development. The Partnership shall have the power to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of such purposes.
Section 1.06. Duration. The Partnership shall continue until dissolved pursuant to Section 7.01.
Section 1.07. General Partner. CJG Management is the sole General Partner of the Partnership on the date hereof. The management of the business and affairs of the Partnership shall be conducted as provided in Article III.
Section 1.08. Limited Partners. The persons and entities whose names appear as such on the books and records of the Partnership are the Limited Partners of the Partnership on the date hereof. The Limited Partners shall not participate in making the decisions of the Partnership, and in no event shall the Limited Partners have the power to manage or transact any Partnership business or act for or in the name of, or otherwise bind, the Partnership or take part in the control of the business of the Partnership, except that the Limited Partners shall have such rights and powers as are expressly granted to them in this Agreement. No Limited Partner shall take any action which would, if taken, cause (i) a partition of the Property, or any other asset of the Partnership, or (ii) a dissolution of the Partnership. No Limited Partner in its capacity as such shall ever be personally liable for any part of debts or other obligations of the Partnership, or obligated to make further Capital Contributions to the Partnership.
Section 1.09. Statutory Compliance. The Partnership shall exist under, be governed by, and this Agreement shall be construed in accordance with, the New York Revised Uniform Limited Partnership Act. All real and personal property owned by the Partnership (including, if and to the extent owned by the Partnership, the Property) is and shall continue to be owned by the Partnership as an entity and held in its name, and no Partner has or shall have any ownership interest in any such property in its individual name. The Managing Partner shall cause to be executed and filed on behalf and at the expense of the Partnership (i) all certificates and other documents required by law to be filed in connection with the continuation of the Partnership and this amendment and restatement of the agreement of limited partnership of the Partnership, and (ii) such other documents, instruments and certificates as it may deem necessary, appropriate, helpful or convenient with respect to the continuation of, and the conduct of business by, the Partnership.
ARTICLE II
Capital Contributions, Other Financing;
Interests in the Partnership
Section 2.01. Capital Contributions.
(a) Each of the Partners, other than the Prior General Partners, the General Partner and the Special Limited Partners (or its predecessor-in-interest) has made a Capital Contribution to the Partnership prior to the date hereof in the amount set forth in the books and records of the Partnership.
(b) The Managing Partner may, from time to time, make, and may cause the Partnership to accept from Persons (including Partners) offering to make, loans and additional Capital Contributions to the Partnership, on such terms as it may deem necessary, appropriate, helpful or convenient subject to the terms of this Agreement.
Section 2.02. Financing of the Partnership.
The money required to finance the business of the Partnership shall be derived from the revenues of the Partnership and from loans and Capital Contributions to the Partnership.
Section 2.03. Interests in the Partnership; Allocation of Profits, Gains, Losses and Deductions.
(a) Each Partner has an ownership interest in the Partnership (an "Interest") measured by its respective Percentage Interest. Each Partner's Percentage Interest, as of the date hereof, is set forth in the books and records of the Partnership.
(b) The income, gains, losses and deductions of the Partnership shall be determined for each Fiscal Year in accordance with the accounting methods followed by the Partnership for federal income tax purposes, and shall be allocated as follows:
(i) Subject to subsections (iii) and (iv) of this Section 2.03(b), the Net Losses of the Partnership shall be allocated to the Partners in the following order of priority:
(I) First, to the Partners in accordance with their Percentage
Interests, to the extent that the amount of Net Profits previously
allocated to the Partners under Section 2.03(b)(ii)(IV) exceed the
sum of (i) distributions previously made to the Partners under
Section 5.02(a) plus (ii) the Net Losses theretofore allocated to
the Partners under this Section 2.03(b)(i)(I);
(II) Second, to each Partner in proportion to the amount the positive balance in its Adjusted Capital Account bears to the aggregate of positive balances
in all Adjusted Capital Accounts, until the Adjusted Capital Accounts of the Partners are reduced to zero; and
(III) Third, to the General Partner.
(ii) Subject to subsections (iii) and (iv) of this Section 2.03(b), the Net Profits of the Partnership shall be allocated in the following order of priority:
(I) First, to the General Partner ratably (as described in
Section 2.03(b)(i)(III)) until the General Partner has been
allocated Net Profits equal to the amount of Net Losses previously
allocated to it under Section 2.03(b)(i)(III);
(II) Second, to each Partner in proportion to the amount of Net Losses previously allocated to each Partner under Section 2.03(b)(i)(II) bears to the aggregate of all Net Losses so allocated to all Partners, until the Partners have been allocated Net Profits equal to the amount of Net Losses previously so allocated;
(III) Third, to each Partner in proportion to the amount of Net Losses previously allocated to each Partner under Section 2.03(b)(i)(I) bears to the aggregate of all Net Losses so allocated to all Partners until the Partners have been allocated Net Profits equal to the amount of Net Losses previously so allocated; and
(IV) Fourth; to the Partners in accordance with their Percentage Interests.
(iii) Notwithstanding paragraphs(i) and (ii) of this Section 2.03(b):
(I) Minimum Gain Chargeback. Notwithstanding any other provision of this Agreement, if there is a net decrease in Partnership minimum gain (as defined in Regulations Section 1.704-2(g)(2)), items of income and gain shall be allocated to all Partners in accordance with Regulations Section 1.704-2(f), and such allocations are intended to comply with the minimum gain chargeback requirements of Regulations Section 1.704-2 and shall be interpreted consistently therewith.
(II) Section 704(c) Allocation. Solely for federal, state and
local income tax purposes and not for book or Capital Account
purposes, depreciation, amortization, gain or loss with respect to
the property that is properly reflected on the Partnership's books
at a value that differs from its adjusted basis for federal income
tax purposes shall be allocated in accordance with the principles
and requirements of Code Section 704(c) and the Regulations
promulgated thereunder, and in accordance with the requirements of
the relevant provisions of the Regulations issued under Code Section
704(b). For Capital Account purposes, depreciation, amortization,
gain or loss with respect to property that is properly reflected on
the Partnership's books at a value that differs from its adjusted
basis for tax purposes shall be determined in accordance with the
rules of Regulations Section 1.704-1(b)(2)(iv)(g).
(III) Risk of Loss Allocation. Any item of Partner Nonrecourse
Deduction (as hereinafter defined) with respect to a Partner
Nonrecourse Debt (as hereinafter defined) shall be allocated to the
Partner or Partners who bear the economic risk of loss for such
Partner Nonrecourse Debt in accordance with Regulations Section
1.704-2(i). The term "Partner Nonrecourse Deduction" means any item
of loss that is attributable to a Partner Nonrecourse Debt pursuant
to Regulations Section 1.704-2(i)(1) and (2). The term "Partner
Nonrecourse Debt" means any nonrecourse debt of the Partnership
(within the meaning of Regulations Section 1.704-2(b)(4)) for which
any Partner bears the economic risk of loss (within the meaning of
Regulations Section 1.704-2(b)(4)). Subject to subparagraph (I)
hereof, but notwithstanding any other provision of this Agreement,
in the event that there is a net decrease in minimum gain
attributable to a Partner Nonrecourse Debt (such minimum gain being
hereinafter referred to as "Partner Nonrecourse Minimum Gain") for a
taxable year of the Partnership, then, after taking into account
allocations pursuant to subparagraph (a) hereof, but before any
other allocations are made for such taxable year, each Partner with
a share of Partner Nonrecourse Gain attributable to such Partner
Nonrecourse Debt at the beginning of such year shall be allocated
items of income and gain for such year (and if necessary, for
subsequent years) equal to such Partner's share of the net decrease
in Partner Nonrecourse Minimum Gain as determined under Regulations
Section 1.704-2(i)(4).
(IV) Allocation of Excess Nonrecourse Liabilities. For the purpose of determining each Partner's share of Partnership nonrecourse liabilities pursuant to Regulations Section 1.752-3(a), and solely for such purpose, each Partner's interest in Partnership profits is hereby specified to be such Partner's Percentage Interests.
(V) Unexpected Allocations and Distributions. No allocation may be made to a Limited Partner to the extent such allocation causes or increases a deficit balance in such Limited Partner's Capital Account in excess of any amount that such Limited Partner is obligated to restore (taking into account Regulations Sections 1.704-1(b)(2)(ii)(d), 1.704-2(i)(5) and 1.704-2(g)(1)(ii) as of the end of the taxable year to which such allocation relates. Notwithstanding any other provision of this Agreement except subparagraphs (I) and (III) hereof, in the event that a Limited Partner unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in such Limited Partner having a negative Capital Account balance (as determined above), then such Limited Partner shall be allocated items of income and gain (including items of gross income) in an amount and manner sufficient to eliminate, to the extent required by the Regulations, such negative balance in such Limited Partner's Capital Account as quickly as possible.
(iv) Adjustment of Capital Accounts. After all allocations for a taxable year are made, Capital Accounts shall be adjusted by the Partnership to the extent necessary to comply with all applicable laws, regulations and administrative pronouncements.
Notwithstanding anything contained in this Agreement to the contrary, any and all distributions to the Partners to be made under Section 7.03 shall be made in the order of priority set forth in Section 5.02. The tax allocation provisions of this Agreement are intended to produce final Capital Account balances that are at levels ("Target Final Balances") which permit liquidating distributions that are made in accordance with such final Capital Accounts balances to be equal to the distributions that would occur under Section 5.02(a) if such liquidating proceeds were distributed pursuant to Section 5.02(a). To the extent that the tax allocation provisions of this Agreement would not produce the Target Final Balances, the Partners agree to take such actions as are necessary to amend such tax allocation provisions to produce such Target Final Balances. Notwithstanding the other provisions of this Agreement, allocations of income, gain, loss and deduction (including items of gross income, gain, loss and deduction) for the year in which distributions to the Partners are made under Section 7.03 shall be made as necessary to produce such Target Final Balances (and, to the extent such allocations would not effect such result, at the discretion of the Managing Partner, the prior tax returns of the Partnership shall be amended to reallocate items of gross income, gain, loss and deduction to produce such Target Final Balances).
Section 2.04. Withdrawal of Capital; Limitation on Distributions. No Partner shall be entitled to withdraw any part of its Capital Account in, or to receive any distributions from, the Partnership, except as provided in Sections 5.01 and 7.03. No Partner shall be entitled to demand or receive interest on its Capital Account or any property other than cash from the Partnership.
ARTICLE III
Management
Section 3.01. In General.
(a) The Managing Partner shall be responsible for the management of the business, activities and affairs of the Partnership. The Managing Partner shall have all the rights and powers which may by law be possessed by it and such rights and powers as are necessary, advisable or convenient to the discharge of its duties hereunder. Without limiting the generality of the foregoing, but subject to the requirements and provisions of Section 3.02, the Managing Partner shall have all of the following rights and powers which it may exercise on behalf of the Partnership without the approval of any other Partner, at the cost, expense and risk of the Partnership:
(i) to expend the capital of the Partnership in a manner that it in good faith believes to be in furtherance of the Partnership's business, subject to the limitations, if any, on the rights and powers of the Managing Partner to do so set forth elsewhere in this Agreement;
(ii) to hold, level, clear, grade, develop, prepare, plant trees on, build buildings, roads, drainage and other facilities on, otherwise improve, maintain, subdivide, lease, sell and otherwise manage the Property; to purchase, plant and maintain citrus and other trees, a citrus and other tree nursery and citrus and other groves on the Property; to develop,
maintain, manage, improve and attempt to enhance the value of the citrus and other agricultural product businesses (and the other businesses and assets) of the Partnership; and to enter into and fulfill its obligations under agreements of any and every nature and description with others with respect to such activities and businesses, which agreements may contain such terms, provisions and conditions as the Managing Partner in its sole and absolute discretion may approve;
(iii) to purchase such contracts of liability, casualty, frost, wind, flood and other insurance as the Managing Partner may deem advisable, appropriate, convenient or beneficial to the Partnership;
(iv) to purchase, plant, maintain, graft, and transplant seedling rootstock, citrus and other trees, and other crops; to clear, prepare, irrigate, fertilize, spray, care for and maintain, or cause to be cleared, prepared, irrigated, fertilized, sprayed, cared for and maintained, and to provide for the drainage of, the real property owned by the Partnership; to grow, produce, genetically engineer, store, manage, sell (by such means as the Managing Partner determines to be appropriate, convenient or beneficial to the Partnership, including, without limitation, by sales at retail, including at the Partnership's real property if the Managing Partner determines that to do so might be appropriate, convenient or beneficial), process, pack and otherwise deal with citrus and other fruits, vegetables, crops and other agricultural products, and products derived and to be derived therefrom, and to purchase or otherwise acquire from any Person any of such items for any of such purposes;
(v) to hold real property for investment and for development, provided that the Partnership may not be engaged in the business of developing real property, except to the extent provided in Section 3.02(a)(v);
(vi) to organize or acquire and own corporations and other entities to serve the actual and perceived needs and purposes of the Partnership;
(vii) to purchase stock in and advance funds to cooperatives through which citrus and other fruits, and other agricultural products of the Partnership, are or may be sold, or through which equipment and supplies for use by the Partnership are or may be purchased;
(viii) to invest and reinvest Partnership funds in government securities, certificates of deposit, banker's acceptances or other financial investments;
(ix) to borrow money on behalf of the Partnership, to assume obligations on behalf of the Partnership and to discharge the Partnership's obligations under any promissory note (or other document) evidencing the indebtedness of the Partnership or under any mortgage, deed of trust, trust to secure debt or other pledge, assignment or security instrument securing payment of such promissory note (or other document) or encumbering the Property and, in furtherance of the foregoing, to execute and deliver, in the name and on behalf of the Partnership, any notes, mortgages, deeds of trust, deeds to secure debt and other security instruments and other documents encumbering, reencumbering and/or relating to the Property and other assets of the Partnership, including, without limitation, any and all such
notes, mortgages, deeds of trust, deeds to secure debt and other security instruments and other documents with respect to any financing or refinancing obtained for the purpose of acquiring any interest in real property and/or satisfying existing financing;
(x) to sell, dispose of, trade, exchange, convey, quitclaim, mortgage, encumber, hypothecate (including as cross-collateral if the Managing Partner in good faith believes that to do so would be in the best interests of the Partnership), subdivide, surrender, release or abandon, with or without consideration of any and every nature and description, upon such terms and conditions as the Managing Partner may deem advisable, appropriate or convenient, all or any portion of the Property, fruit and other agricultural crops and products, and any of the other assets of the Partnership, subject to the consent requirement of Section 3.02(a).
(xi) to execute leases, subleases, licenses, rental agreements, occupancy agreements, use agreements and concession agreements with respect to all or any portion of the Property or any of the other assets, products and businesses of the Partnership;
(xii) to enter into such agreements, contracts, guarantees, documents and instruments with such Persons (including, without limitation, governmental agencies and instrumentalities), and to give such receipts, releases and discharges with respect to all of the foregoing and any matters related or incident thereto, as the Managing Partner in good faith may deem advisable, appropriate, helpful or convenient for the Partnership from time to time;
(xiii) to delegate any and all of its duties hereunder, and in furtherance of any such delegation to appoint, employ or contract with any Persons that it in its sole discretion may deem necessary, advisable, helpful or convenient for the transaction of one or more of the businesses of the Partnership, including Persons that are Affiliates, officers, directors or employees of the Managing Partner or of any other Partner (including those in which it or Persons directly or indirectly controlling it may have a proprietary interest). Such Persons may, under the direct or indirect supervision of the Managing Partner, administer the day-to-day operations of the Partnership; may serve as the Partnership's advisors and consultants in connection with the policy decisions made and contemplated to be made by the Managing Partner; may act as grove managers, business managers, product managers, project managers, architects, engineers, consultants, builders, accountants, correspondents, attorneys, brokers, escrow agents or in any and all other capacities deemed by the Managing Partner to be necessary, desirable, appropriate or convenient; may investigate, select, and on behalf of the Partnership conduct relations with Persons acting in such capacities and, subject to Section 3.04, may pay compensation (including, without limitation, compensation that is dependent in whole or in part on one or more measurable variable factors relating to the profitability of, or cash flow, cost savings or other revenue enhancement generated by or from, the Partnership as a whole or one or more discrete products, groves or fields, ventures or undertakings of the Partnership) to, and enter into contracts with, or employ, or pay for services performed or to be performed by, any of them in connection with the Property, or any part of it, any of the other assets, investments, businesses, crops or products of the Partnership or ventures made, or undertakings entered into, by the Partnership; may
perform or assist in the performance of such administrative or managerial functions necessary in the management of one or more of the Partnership, the Property, and the Partnership's businesses and assets, as determined by the Managing Partner; and may perform such other acts or services as the Managing Partner in its sole and absolute discretion may approve;
(xiv) to admit additional Persons to the Partnership as Partners, provided that, if (x) the new Partner will be a General Partner or (y) the new Partners would have rights, powers, liabilities and/or obligations that differ in material respects from those of some or all of the other Partners, the Managing Partner shall obtain the consent of the Limited Partners as required by Section 3.02(a) prior to admitting the new Partners;
(xv) to offer to purchase or redeem the Interests of one or more of the Partners selected by the Managing Partner from time to time, on such terms and conditions as the Managing Partner deems appropriate, to consummate such purchases and redemptions, and to obtain funds to enable it to consummate such purchases and redemptions on such terms as the Managing Partner may deem to be necessary, advisable, appropriate or convenient;
(xvi) to adopt and implement the Recognition and Retention Plan so as to provide additional financial incentives to key employees of the Partnership;
(xvii) to reinvest all or any portion of amounts received by the Partnership from the condemnation of all or any portion of the Property, or the sale of all or any portion of the Property under threat of condemnation, so as to defer the recognition of gain under Section 1033 of the Code; and
(xviii) to do and undertake to do any and all other things and to execute and deliver, in the name and on behalf of the Partnership, any and all certificates, documents, instruments and agreements necessary, advisable, appropriate, helpful or convenient in the discretion of the Managing Partner to effectuate any of the foregoing.
(b) The Managing Partner shall (or shall cause others to) diligently attempt to discharge (to the extent funds are available therefor) the following obligations on behalf and at the expense of the Partnership in a manner consistent with this Agreement:
(i) Protect and preserve the title to and the interest of the Partnership in its property and assets, real, personal and mixed, including, for so long as it is an asset of the Partnership, the Property.
(ii) Keep all books of account and other records of the Partnership and provide to the Partners reports and statements as required by Article IV.
(iii) Maintain all funds of the Partnership (other than petty cash
and funds from time to time invested in financial products or other
Partnership assets) in one or more bank accounts established pursuant to
Section 4.03.
(iv) Make periodic distributions to the Partners as required by
Section 5.02.
(v) Perform all other obligations provided elsewhere in this Agreement to be performed by the Managing Partner.
(c) Third parties dealing with the Partnership shall be fully protected in relying, without further inquiry, upon any action taken or instrument executed on behalf of the Partnership by the Managing Partner, and on behalf of the Managing Partner by the President or any other officer of its general partner, or any other Person specifically empowered by the Managing Partner so to act.
(d) If the Managing Partner determines that it is in the best interest of the Partnership to sell additional Interests, each of the then Limited Partners shall have the right, but not the obligation, to purchase the additional Interests.
(i) The Managing Partner shall deliver notice (the "Offer Notice") to each Limited Partner of the Partnership's intent to sell additional Interests and the purchase price of the Interests. Each Limited Partner shall have 30 days (the "Offer Period") after the receipt of the Offer Notice to elect to purchase its pro rata share of the Interests being offered by delivering notice of its acceptance to the Managing Partner.
(ii) If the existing Partners do not elect to purchase all of the
additional Interests, the Managing Partner shall deliver notice to those
Partners who elected to purchase Interests offering to those Partners the right
to purchase the remainder of the Interests. A Partner shall have 15 days to
elect to purchase the unsold Interests. A Partner electing to purchase pursuant
to Section 3.01(d)(iii) shall be obligated to purchase that portion of the
unsold Interests equal to such Partners Percentage Interest over the aggregate
Percentage Interests of those Partners electing to purchase pursuant to this
Section 3.01(d)(iii).
(iii) Any Interests not subscribed to by the Limited Partners may be
offered to other persons by the Managing Partner, subject to the provisions of
Section 3.01(a)(xiv).
Section 3.02. Major Decisions. Notwithstanding any other provision of this Agreement, each of the actions described below (a "Major Decision") must be approved by:
(a) all of the General Partners and the specified percentage of Percentage Interests of the Limited Partners:
(i) amendment of this Agreement -- two thirds;
(ii) selection of a new Managing Partner -- majority;
(iii) amendments to the Recognition and Retention Plan described in
Section 3.07(b) -- two thirds; and
(iv) admission of a General Partner or of a Partner or Partners with rights, powers, liabilities and/or obligations different from other Partners -- two-thirds;
(v) contribute a portion of the Property, not to exceed 200 acres per project, to an entity for development, provided that as a result of the contribution, the Partnership shall incur no financial risk other than the loss of the acreage contributed -- two-thirds; and
(vi) a merger by the Partnership with or into another entity -- two thirds; and
(b) two-thirds of the Percentage Interest of all Partners for removal of the Managing Partner.
Before a Major Decision may be made, the Managing Partner shall send to each Partner a written notice ("the Major Decision Notice") with such information as the Managing Partner deems appropriate. Each Partner that fails to give notice to the Managing Partner that the Partner disapproves of a proposed Major Decision within forty-five days following the date on which the Managing Partner sent the Major Decision Notice shall be deemed to have approved such proposed Major Decision. All votes pursuant to this Section 3.02 must be cast in writing (including by facsimile transmission), unless a Partner is deemed to have approved a Major Decision in the manner described in the preceding sentence.
Section 3.03. Tax Matters Partner; Tax Elections.
(a) The Managing Partner shall be the "tax matters partner" (as that term is used in the Code) of the Partnership. The tax matters partner shall
(i) cause to be prepared and shall sign all tax returns of the Partnership,
(ii) monitor any governmental tax authority in any audit that such authority may conduct of the Partnership's books and records or other documents of which the tax matters partner is aware,
(iii) give Notice to all Partners as follows:
(I) within 30 days after it receives notice from the IRS of any administrative proceeding with respect to an examination of, or a proposed adjustment to, any item of income, gain, loss, deduction or credit of the Partnership,
(II) from time to time, of the current status of such administrative proceeding,
(III) within 30 days of the final outcome of such administrative proceeding, as to such outcome, and
(IV) at least five days prior to submitting a request for administrative adjustment on behalf of the Partnership,
(iv) promptly send to each Partner a copy of all nonministerial notices or communications received by the Partnership from, or sent by the Partnership to, the IRS, and
(v) take all other action to be taken by it as contemplated in sections 6221 through 6232 of the Code.
The Partnership will reimburse the tax matters partner for all expenses reasonably incurred by it (including reasonable overhead expenses) in connection with any administrative or judicial proceeding with respect to the tax liabilities of the Partners which relate to the Partnership.
(b) At the request of any Partner, the Partnership shall make an election to adjust its basis in its assets pursuant to section 754 of the Code. The Partner making such request shall pay to the Partnership, within ten days after demand therefor by the Managing Partner, all costs and expenses paid or incurred by the Partnership as a result of the making of such election.
(c) The Partnership shall make an election to amortize its organizational expenditures pursuant to section 709 of the Code, and to amortize any "start-up" expenditures pursuant to section 195 of the Code.
Section 3.04. Contracts with Partners and Affiliates. The Managing Partner
may cause the Partnership to enter into contracts and agreements with Partners
and Affiliates of Partners if it in good faith determines that to do so is
necessary, appropriate or convenient for the Partnership; provided, however,
that the Managing Partner shall not knowingly permit the Partnership to enter
into such a contract or agreement unless the Managing Partner in good faith
determines that the compensation to be paid to such Partner or Affiliate
pursuant thereto (or the formula or other method by which such compensation is
to be determined) is reasonable under the circumstances. The Managing Partner is
specifically authorized to cause the Partnership to (i) engage James Callery as
the chief operating officer of the Partnership, with compensation to be paid by
the Partnership to him in such amount (or determined by such formula or other
method) as the Managing Partner deems reasonable under the circumstances, and
(ii) reimburse each Partner for such of the actual expenses the Managing Partner
shall determine were incurred and paid by the Managing Partner on behalf of the
Partnership in good faith to promote the Partnership's best interests or the
interests of all of its Partners.
Section 3.05. Resignation or other Termination of Managing Partner.
(a) The Managing Partner may resign from the performance of all of its functions and duties as such hereunder at any time upon giving 30 days' advance Notice of such resignation to each of the General Partners. Upon such resignation, or in the event of the death, disability, withdrawal or removal pursuant to Section 3.02(b) of the Managing Partner, the Interest of the resigning or otherwise terminated Managing Partner shall remain that of a General Partner, and the Partners shall elect a new Managing Partner from among the General Partners in the manner set forth in Section 3.02(a). If there is no remaining General Partner, the Limited Partner shall admit one or more new General Partners pursuant to Section 3.02(a).
(b) If James Callery ceases to be the majority shareholder of the general partner of the CJG Management, it shall constitute a removal of CJG Management as the Managing Partner unless
all of the General Partners and a majority of the Limited Partners determine pursuant to the procedures in Section 3.02 that CJG Management shall remain as the Managing Partner.
Section 3.06. Other Businesses. No Partner shall be prohibited from owning, operating or investing in, either directly or indirectly, any real property or any interest therein, either in the State of Florida or elsewhere, or from engaging or possessing an interest in any citrus or related or unrelated businesses of any nature or description, independently or with others, whether or not in competition with the Partnership in any of such cases, and the other Partners shall not have any rights by virtue of this Agreement in respect of such property or other businesses, or the income or profits derived therefrom. Each Partner shall be free to fully and aggressively pursue all of its other business interests.
Section 3.07. Recognition and Retention Plan.
(a) Not later than 120 days after the end of each fiscal year, the Partnership shall distribute the Incentive Bonus to those employees of the Partnership, former employees and former general partners (or any combination thereof) ("Distributees") as determined by the Managing Partner pursuant to the Recognition and Retention Plan. The aggregate distributions to the Distributees shall equal not less than 85% of the Incentive Bonus. That portion of the Incentive Bonus that is not distributed to the Distributees shall revert to the Partnership. If the Partnership does not have sufficient cash to pay the Incentive Bonus for a fiscal year, then the amount unpaid shall accrue and shall be paid in the next succeeding year.
(b) The Managing Partner shall have the right to make amendments to the Recognition and Retention Plan, provided, that the Managing Partner shall not amend the Recognition and Retention Plan with respect to the following matter, except with the consent of the Limited Partners, as defined in Section 3.02:
(i) an increase in the percentage of the profits of the Partnership constituting the Incentive Bonus to an amount in excess of 5%; or
(ii) an increase of the percentage of the Incentive Bonus payable to the Managing Partner and its Affiliates if as a result of the increase, more than 20% of the Incentive Bonus would be paid to the Managing Partner and its Affiliates.
Section 3.08. Net Worth Maintenance. The Managing Partner shall at all times maintain a net worth of at least $10,000.
ARTICLE IV
Books; Budgets; Fiscal Year
Section 4.01. Administrative Services; Books; Records and Reports.
(a) The Managing Partner shall cause to be performed all general and administrative services on behalf of the Partnership in order to assure that complete and accurate books and records of the Partnership continue to be maintained at the Partnership's principal place of business showing the names, addresses and Interests of each of the Partners, all receipts and expenditures, assets and liabilities, profits and losses, and all other records necessary for recording the Partnership's business and affairs, including a capital account for each Partner (a "Capital Account") which consists of the amount or value of the Capital Contributions made by such Partner and the allocations to such Partner of Partnership items of income, gains, losses and deductions (pursuant to Section 2.03(b) and predecessor provisions of prior limited partnership agreements of the Partnership) and distributions (pursuant to Sections 5.01 and 7.03 and predecessor provisions of prior limited partnership agreements of the Partnership), as adjusted by any and all adjustments required to be made in order to maintain Capital Account balances in compliance with Treasury Regulation Section 1.704-1(b). Notwithstanding the preceding sentence, the books of the Partnership shall continue to be kept on the accrual basis method of accounting in accordance with GAAP, consistently applied for financial accounting purposes, and the books and records shall be open to inspection and examination by each Partner and its representatives at all reasonable times. In the event of a Transfer of an Interest, the successor to the transferring Partner shall succeed to the transferring Partner's Capital Account as of the date of the Transfer. For purposes of the preceding sentence, all income, gain, loss and deductions allocable pursuant to this Agreement for a Fiscal Year with respect to any Interest that may have been the subject of a Transfer during such Fiscal Year shall be allocable between the transferor and transferee based upon the number of days that each was recognized by the Partnership as the owner of such Interest, without regard to the results of Partnership operations during the particular days of such Fiscal Year.
(b) The books of the Partnership shall be audited annually by a nationally recognized firm of Certified Public Accountants and the Managing Partner shall cause to be prepared, in accordance with sound accounting practice, and delivered to all Partners, at the expense of the Partnership:
(i) on or before the 60th day after the end of each Fiscal Year, a copy of the Partnership's financial statements, tax returns and Schedule K-1 for such Partner with respect to such Fiscal Year, together with such information with respect to the Partnership as may be required to enable each Partner properly to complete its Federal income tax return, any required income tax return of any state and any other reporting or filing requirement imposed by any governmental authority relating to the income or activities of the Partnership; and
(ii) from time to time and with reasonable promptness, such further information available to the Managing Partner in respect of the business, affairs and financial condition of the Partnership as any Partner reasonably may request.
(c) The Managing Partner shall cause an independent appraiser to prepare,
as of December 31 of each calendar year prior to the termination of the
Partnership and as of the date of such termination, an appraisal of all of the
Partnership's real property, equipment and other assets. Such appraisal shall
(i) set forth the appraiser's opinion of the aggregate value as of such date of
all of such assets, and (ii) allocate such aggregate value among the real
property, equipment, other tangible assets (other than fruit), fruit, intangible
assets, and other asset categories from time to time required by the Managing
Partner.
Section 4.02. Fiscal Year. The fiscal year of the Partnership shall be the calendar year.
Section 4.03. Bank Accounts. The Managing Partner shall cause the Partnership to maintain one or more bank accounts in banks of recognized standing, which bank accounts shall include a checking account, and into which bank accounts shall be deposited all funds of the Partnership (other than petty cash) not otherwise applied.
ARTICLE V
Distributions
Section 5.01. Payment of Expenses. Prior to making any Distributions to the Partners, the Managing Partner shall pay or make provision for all expenses of the Partnership, including but not limited to the payment of the salaries of all employees of the Partnership, all payments to which employees are entitled to receive under the Recognition and Retention Plan.
Section 5.02. Distributions. Except as provided in Section 7.03, Distributable Funds shall be distributed to the Partners as follows:
(a) Except as provided in clause (b) below, after payment of all expenses as provided in Section 5.01, distributions of Distributable Funds shall be made to the Partners in proportion to their Percentage Interests.
(b) If the Partnership has been dissolved pursuant to Article VII, and if no election to continue the business of the Partnership has been made pursuant to Section 7.02, the Distributable Funds of the Partnership shall be distributed in accordance with Section 7.03.
Section 5.03. Restoration of Funds. Except as otherwise required by this Agreement or by law, no Partner shall be required to restore to the Partnership any funds distributed to it pursuant to Section 5.02.
ARTICLE VI
Transfers of Partnership Interests
Section 6.01. Prohibition on Transfers. No Transfer of an Interest may be made without the consent, in writing and in the sole discretion, of the Managing Partner, and then only if in compliance with this Article VI.
Section 6.02. Sale to a Specific Person. If a Partner wishes to sell its
Interest or any part thereof to a specific Person other than pursuant to Section
6.05 (provided, that the Partner may sell a portion of its Interest only if (i)
the portion to be sold is equal to or exceeds a Percentage Interest of 1%, and
(ii) the Partner will hold after the sale a Percentage Interest equal to or more
than .5%):
(a) the Partner desiring to make such sale (the "Seller") shall give the Managing Partner not less than 60 days' prior written Notice of its intention to make such sale, which Notice shall specify the Interest proposed to be conveyed, the identity of the Person to which such sale is proposed to be made (the"Buyer"), and the price and other terms of the proposed sale; and
(b) if the Managing Partner has not elected to acquire for the Partnership such Interest on the same terms and at the same price as specified in such notice, and which election is made in writing transmitted not more than 30 days after receipt of the Notice from Seller; and
(c) if the Managing Partner, in its sole discretion, shall have consented in writing, transmitted not more than 30 days after receipt of notice from Seller, to the contemplated Transfer; then
(d) Seller may sell its such Interest to the Buyer at the specified price and upon the specified terms, but only if:
(i) the Buyer shall execute and deliver to the Managing Partner a document satisfactory to the Managing Partner in all respects pursuant to which the Buyer covenants to be bound by all of the terms and conditions of this Agreement; and
(ii) the Seller shall deliver to the Managing Partner, if requested by the Managing Partner so to do, an opinion of the Seller's counsel (reasonably satisfactory to counsel to the Partnership) or Seller shall reimburse the Partnership for and opinion of counsel to the Partnership to the effect that the contemplated sale, if consummated, will not:
(I) result in a violation of the Securities Act of 1933 or any other applicable federal or state law or the order of any court or other tribunal having jurisdiction over the Partnership or any of its assets; or
(II) be a breach or violation of, or an event of default under, or give rise to a right to accelerate any indebtedness of the Partnership under, any contract, instrument or agreement to which the Partnership is a party or by which it or any of its property is or may be bound; or
(III) result in, or create a prohibited transaction under, or
cause the Partnership to become a "party in interest" as defined in
Section 3(14) of, ERISA, or otherwise result in the holder of an
Interest or the assets of the Partnership being subject to the
provisions of ERISA; or
(IV) result, directly or indirectly, in the termination of the Partnership under Section 708 of the Code; or
(V) cause the classification of the Partnership as a partnership for purposes of the Code to be lost, jeopardized or otherwise adversely affected;
and
(iii) the Seller and the Buyer shall deliver such additional documents, instruments and agreements as reasonably shall have been required by the Managing Partner in connection with the sale; and
(iv) the Seller or the Buyer shall pay to the Partnership all costs, expenses and liabilities incurred by the Partnership in connection with such sale, and each of them shall have indemnified the Partnership (in a manner reasonably satisfactory to the Managing Partner) for any such costs, expenses and liabilities that may be incurred by the Partnership as a result of or in connection with such sale.
Section 6.03. Violative Transfers. If a Partner attempts to make a Transfer in violation of this Article VI, the attempted transfer shall be void ab initio, and the Partner attempting to make such Transfer shall be liable to the Partnership for all damages that the Partnership sustains as a result of such attempted Transfer.
Section 6.04. Acquisitions of Interests by Partnership or Managing Partner. Notwithstanding anything to the contrary contained in this Article VI, the Partnership or the Managing Partner may offer to acquire or redeem, and may acquire or redeem, the Interests of one or more of the Partners upon mutually acceptable terms and conditions without first complying with any of the terms or conditions set forth in the foregoing provisions of this Article VI.
Section 6.05. Transfers to Related Parties.
(a) A Limited Partner's Interest may be transferred without the consent of
the Managing Partner upon the following events, subject to the provisions of
Section 6.05(c):
(i) the death of an individual Limited Partner;
(ii) the termination of a trust that is a Limited Partner, or
(iii) the dissolution or reorganization of a partnership or corporation that is a Limited Partner.
(b) A transferee pursuant to this Section 6.05 shall comply with the provisions of Section 6.02(d) hereof.
(c) If a transfer pursuant to this Section 6.05 would result in a Limited Partner's holding a Percentage Interest of less than .21875%, the Partnership shall have the right, but not the obligation, to redeem the Limited Partner's Interest. A Limited Partner or his personal representative (if the Limited Partner is deceased) seeking to make a Transfer described in this Section 6.05(c) shall deliver Notice of the proposed Transfer to the Managing Partner. The Managing Partner shall have 30 days to elect to exercise the option granted in this Section 6.05(c) by delivering Notice of exercise to the Limited Partner. The closing of the purchase shall be 30 days after the delivery of the notice of election. The purchase price for the Interest shall be an amount equal to (x) 80% of (i) the aggregate value of the Partnership's assets determined pursuant to Section 4.01(c) minus (ii) the aggregate liabilities of the Partnership as of the appraisal date, (y) multiplied by the Percentage Interest.
ARTICLE VII
Dissolution and Liquidation
Section 7.01. Dissolution. Notwithstanding Section 9.01, the Partnership shall be dissolved upon the first to occur of the following:
(a) October 14, 2019;
(b) The sale, transfer or other disposition of all or substantially all of the assets of the Partnership;
(c) The acquisition by a Partner of all of the Interests of the other Partners;
(d) The death, legal disability, dissolution, bankruptcy or insolvency of a General Partner or an assignment by a General Partner for the benefit of its creditors (any such Partner is referred to herein as a "Withdrawing Partner"); or
(e) The agreement so to do by two-thirds in Interest of the Partners.
Section 7.02. Election to Continue the Business. Upon dissolution of the Partnership pursuant to Section 7.01(d) the remaining Partners, by the affirmative vote of Partners holding more than the Majority-in-Interest of the Interests of all Partners (excluding for this purpose the Interest of the Withdrawing Partner) may elect to reconstitute the Partnership. If they so elect, the reconstituted Partnership shall continue the Partnership business, and either (i) the Partnership, or at their option the remaining Partners in such proportions as they shall agree, shall acquire the Interest of the Withdrawing Partner as provided in this Section 7.02, or (ii) if neither the Partnership nor the remaining Partners elects to acquire the Interest of the Withdrawing Partner, such Interest shall be converted to that of a Limited Partner under this Agreement. If the Partnership or the remaining Partners do elect to acquire the Interest of the Withdrawing Partner as provided in this
Section 7.02, then, within 30 days of the event described in Section 7.01(d), the Partnership shall, in good faith, appoint an appraiser to appraise the Interest of the Withdrawing Partner and advise such Withdrawing Partner of such appointment. The appraiser so selected shall be qualified in accordance with applicable M.A.I. standards by education, experience and training to appraise the assets and liabilities of the Partnership. The cost of the appraisal shall be borne by the Partnership as constituted before the dissolution The appraiser, within 90 days after being so appointed, shall submit to all Partners a written report and appraisal stating therein its opinion as to the value of the Interest of the Withdrawing Partner as of the date of the event described in Section 7.01(d) for the purposes of an all cash sale subject to existing liabilities and encumbrances. At a closing to be held within 90 days following receipt of the appraisal, the Partnership or the remaining Partners, as the case may be, shall purchase, and the Withdrawing Partner shall sell, the Interest of the Withdrawing Partner in exchange for payment of the cash price set forth in the appraisal.
Section 7.03. Winding up Affairs and Distribution of Assets. Upon
dissolution of the Partnership (except dissolution pursuant to Section 7.01(c)),
and in the absence of an election to continue the business of the Partnership
pursuant to Section 7.02, the Managing Partner or, if none, a liquidating agent
selected by vote of a Majority-In-Interest of the Partners (the "Liquidator")
shall proceed to wind up the affairs of the Partnership, liquidate the remaining
property and assets of the Partnership and terminate the Partnership. The
proceeds of such liquidation (and the assets and property of the Partnership
that the Managing Partner or Liquidator determines to be not readily susceptible
to liquidation at a reasonable price) shall be applied in the following order of
priority: (a) first, to the expenses of such liquidation; (b) second, to the
debts and liabilities of the Partnership to third parties (including Partners
and Affiliates of Partners), if any, in the order of priority provided by law;
(c) third, a reasonable reserve shall be set up to provide for any contingent or
unforeseen liabilities or obligations of the Partnership to such third parties
(to be held and disbursed, at the discretion of the Partners, by an escrow agent
selected by them) and at the expiration of such period as the Partners may deem
advisable, the balance shall be distributed as provided in clause (d) hereof;
and (d) fourth, to each of the Partners in proportion to the positive balances
in their Capital Accounts (as adjusted to reflect the allocation of gain and
loss from the liquidation of Partnership assets and distributions to the
Partners pursuant to Section 7.02(d), above), until the balances in each of such
Capital Accounts has been reduced to zero.
Section 7.04. Distribution in Kind. If any asset of the Partnership is to be distributed in kind, such asset shall be valued to determine the amount of Net Profits or Net Losses that would result if such asset were to be sold at its fair market value, and such Net Profits or Net Losses shall be allocated to the Capital Accounts in accordance with Section 7.03.
ARTICLE VIII
Indemnification; Exculpation
Section 8.01. Indemnification.
(a) The Partnership agrees to indemnify and advance expenses to each Person to the full extent permitted by New York law, including indemnification for, and advancement of expenses
with regard to, derivative actions and actions to which such Person is made a party that are brought in the right of the Partnership to procure a judgment in its favor by reason of the fact that such Person or his testator or intestate (if the person is a natural person) is or was a General Partner in the Partnership; provided, however, that the indemnity provided by this Section 8.01 shall not apply to such acts as to which a judgment or final adjudication adverse to the General Partner (or his testator or intestate if the General Partner is a natural person) establishes that such acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he (or his testator or intestate, if the person is a natural person) personally gained in fact a financial profit or other advantage to which he was not legally entitled.
(b) Each of the General Partners of the Partnership is hereby authorized and empowered to (i) perform and do all other acts or things, (ii) execute and deliver or file all other documents, agreements and papers, (iii) pay all expenses, and (iv) take all further actions as in the General Partner's opinion may be necessary or desirable in order to carry out the purposes and intent of this Section 8.01.
Section 8.02. Exculpation. Except in the case of active and deliberate fraud, willful misconduct or bad faith on the part of a Partner, the doing of any act or the failure to do any act by a Partner, its constituent partners, its officers, directors or shareholders, or its or their Affiliates, the effect of which may be to cause or result in loss, cost, damage or expense to the Partnership or another Partner, if done or omitted pursuant to the advice of legal counsel or done or omitted in good faith in an attempt to promote the best interests of the Partnership, shall not subject such Partner or its heirs, administrators, executors, successors and assigns, nor its principals, officers, directors, trustees, constituent partners, shareholders, Affilliates or other owners or representatives to any liability, and such Partner is hereby exculpated from liability from any such act or failure to act.
ARTICLE IX
Continuity
Section 9.01. Continuity. In the event of the withdrawal of a Partner or the admission of a new Partner pursuant hereto, and subject to Section 7.01, the business of the Partnership shall not be terminated, but the other Partners shall continue the business of the Partnership and this Agreement shall continue in full force and effect.
ARTICLE 10
Miscellaneous
Section 10.01. Notices.
(a) All notices, consents, calls, approvals, designations, reports, requests, waivers, elections and other communications (collectively, "Notices") authorized or required to be given pursuant to this Agreement shall be given in writing and (i) personally served on the Partner (or a
general partner or an officer of the Partner) to whom it is given, or (ii) mailed by registered or certified mail, postage prepaid, or (iii) sent by facsimile transmission, with electronic confirmation of complete transmission received by the sender, in each case addressed as follows:
If to the General Partner:
c/o Callery-Judge Grove
P. O.Box 10
Loxahatchee, Florida 33470-0810
If to a Limited Partner, at the address set forth in the books and records of the Partnership.
(b) All Notices shall be deemed given when delivered or, if mailed as provided in Section 10.01 (a), on the second day after the day of mailing or, if sent by facsimile transmission as provided in Section 10.01(a), at the time of confirmation of transmission. Any Partner may change his address for the receipt of Notices at any time by giving Notice thereof to the Managing Partner.
Section 10.02. Entire Agreement. This Agreement supersedes all prior agreements and understandings among the Partners with respect to the subject matter hereof.
Section 10.03. Modification. No change or modification of this Agreement shall be of any force unless such change or modification is in writing and has been signed by a sufficient number of Partners as required elsewhere by this Agreement. See Sec. 302.
Section 10.04. Waivers. No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is in writing and signed by the Partner against whom such waiver is claimed. No waiver of any breach shall be deemed a waiver of any other or subsequent breach.
Section 10.05. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 10.06. Further Assurances. Each Partner shall execute such deeds, assignments, endorsements, and other instruments and documents and shall give such further assurances as shall be necessary to perform its obligations hereunder.
Section 10.07. Investment and ERISA Representations.
(a) Each Partner represents and warrants that its Interest has been acquired under this Agreement for its own account, for investment, and not with a view to, or for sale in connection with, any distribution thereof nor with any present intention of distributing or selling such Interest, and that it will not Transfer, or attempt to Transfer, its Interest in violation of the Securities Act of 1933 or any other applicable federal or state law.
(b) Each Partner represents and warrants that (i) it is not acquiring its Interest with funds of a pension plan subject to ERISA, and (ii) its acquisition of its Interest does not and will not result in or create a prohibited transaction under, or result in the Partnership becoming a "party in interest" as defined in Section 3(14) of, ERISA, or otherwise result in any other holder of an Interest or the assets of the Partnership being subject to such statute.
Section 10.08. Amendment of Certificate of Limited Partnership. The Certificate of Limited Partnership of the Partnership may be amended or supplemented by the Managing Partner without the prior agreement of the other Partners whenever permitted by law.
Section 10.09. Governing Law. This Agreement shall be governed by and be construed in accordance with the internal laws of the State and without reference to any conflict of law or choice of law principles of the State that might apply the substantive law of another jurisdiction.
Section 10.10. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
Section 10.11. Limitation on Rights of Others. No Person other than a Partner is, nor is it intended that any such other Person be treated as, a direct, indirect, intended or incidental third party beneficiary of this Agreement for any purpose whatsoever, nor shall any other Person have any legal or equitable right, remedy or claim under or in respect of this Agreement.
Section 10.12. Construction; Gender; Number. This Agreement has been fully negotiated by the parties hereto and shall be construed and interpreted as if prepared by all the parties jointly, rather than by one or more, but less than all, of them. Any rule of construction to the effect that any ambiguity shall be interpreted in the manner least favorable to the drafting party shall not apply to this Agreement. As used in this Agreement, the masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to be or include the other genders or number, as the case may be, whenever the context so indicates or requires.
Section 10.13. Remedies Not Exclusive. Whenever the Partnership or any Partner exercises one or more of the remedies provided for herein, such exercise shall not preclude the exercise of any one or more remedies otherwise available to it hereunder (unless this Agreement expressly provides otherwise), under contract, at law, in equity or otherwise.
Section 10.14. Power of Attorney.
(a) Each Partner constitutes and appoints the Managing Partner its true and lawfUl attorney with full power of substitution and resubstitution to make, execute, sign, acknowledge and file amendments and modifications to the Certificate of Limited Partnership for the Partnership and/or other certificates related thereto, and upon the Partnership's termination, certificates of dissolution and termination of the Partnership, and also to make, execute, sign, acknowledge and file such other certificates and statements as may be required by law or as deemed by the Managing Partner to be in the best interests of the Partnership. The grant of a power of attorney hereunder is
a special power of attorney coupled with an interest and shall survive a Partner's disability, incompetence, death or assignment by such Partner of its Interest pursuant to this Agreement.
(b) No document or amendment executed by the Managing Partner pursuant to
Section 10.14(a) shall, in the absence of the prior consent of all Partners, (i)
reduce the obligations of the General Partners, (ii) affect the rights or
restrictions regarding the assignability of Interests in the Partnership by
Limited Partners, (iii) modify the term of the Partnership, (iv) amend this
Section 10.14(b), or (v) reduce the rights or interests or enlarge the
obligations of the Partners other than the General Partners.
(c) In exercising the power of attorney granted pursuant to this Section 10.14, the Managing Partner may act on behalf of a Partner singly or on behalf of all or any group of Partners collectively to the extent permitted by law.
(d) The Managing Partner shall promptly notify all Partners of any documents or amendments executed pursuant to this Section 10.14.
Section 10.15. Attorneys and Other Consultants. Notwithstanding anything to the contrary contained herein, each of the Partners acknowledges that all attorneys and other consultants retained by the Partnership also may have been and may be engaged by one or more of the Partners as their attorneys and other consultants, respectively. Each of the Partners hereby waives any claim of conflict-of-interest that the Partner otherwise might have as a result of such engagement. In addition, each of the Partners hereby approves the engagement of such attorneys and consultants by one or more of the Partners individually, and cessation of representation and other business arrangements with the Partnership by such attorneys and other consultants if any circumstances arrives in which, in the opinion of any Partner for whom such attorneys or consultants has been engaged, it would be inappropriate for such attorneys or consultants, as the case may be, to represent or otherwise act for both the Partnership and such Partner.
Section 10.16. Costs of Litigation. If any litigation, arbitration, mediation, reference or other proceeding to resolve a dispute among two or more Partners arising out of this Agreement, the interpretation or enforcement hereof, or the transactions contemplated hereby, is commenced and a judgment therein is rendered by a court, an arbitrator, a mediator or any other person or entity having requisite jurisdiction, the prevailing parties in such dispute shall be entitled to reimbursement from the other parties thereto of all costs of such proceedings, and the tribunal shall award such costs (including, without limitation, attorneys' fees and disbursements, court costs and costs of the arbitrator or mediator, as applicable at trial and on appeal) to the prevailing parties, which award shall not be computed in accordance with any schedule, but shall be in an amount necessary to fully reimburse the prevailing parties for all costs actually incurred by them in good faith, regardless of the size of the judgment or award.
Section 10.17. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Partners and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the Partners have duly executed this Agreement as of the day and year first above written.
GENERAL PARTNER
CJG Management, Ltd.
By: Managed Citrus, Inc.
Its General Partner
By: /s/ James Callery
------------------------
James Callery, President
LIMITED PARTNER
Dated:
--------------- ------------------------------
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WPB/38996
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
--------------------------------------------X
FLOWERFIELD COUNTRY DAY CAMP, INC.
Index No. 99-28389
Plaintiff,
Plaintiff designates Suffolk
-against- County as the place of Trial
GYRODYNE COMPANY OF AMERICA, INC. The basis of the venue is
Plaintiff's Place of Business
Defendant SUMMONS
FILED Plaintiff's Place of Business:
DEC 21 1999 P.O. Box 175
EDWARD P. ROMAINE Yaphank, New York
COUNTY CLERK County of Suffolk
|
--------------------------------------------X
To the above named Defendant(s):
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your Answer, or, if the complaint is nor served with this Summons, to serve a Notice of Appearance, on the Plaintiff's Attorney within twenty (20) days after the service of this Summons, exclusive of the day of service (or within 30 days after the service is complete if this Summons is not personally delivered to you within the State of New York), and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint.
Dated: Woodbury, New York
December 15, 1999
/s/ Semon & Mondshein ------------------------ SEMON & MONDSHEIN, Esqs. Attorneys for Plaintiff 7600 Jericho Turnpike Woodbury, New York 11797 (516) 364-8100 |
Defendant's Address:
Gyrodyne Company of America, Inc.
7 Flowerfield, Suite 28
St. James, New York 11780
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
--------------------------------------------X
FLOWERFIELD COUNTRY DAY CAMP, INC.
Plaintiff, Index No 99-28389
-against- VERIFIED COMPLAINT
FILED
DEC 21, 1999
|
EDWARD P. ROMAINE
COUNTY CLERK
GYRODYNE COMPANY OF AMERICA, INC.
--------------------------------------------X
Plaintiff, FLOWERFIELD COUNTRY DAY CAMP INC., complaining of Defendant by its attorneys, Semon and Mondshein, respectfully shows to the Court and alleges:
FOR A FIRST SEPARATE AND DISTINCT CAUSE OF ACTION
FIRST: That at all times hereinafter mentioned Plaintiff was and still is a domestic corporation duly organized and existing under the laws of the State of New York, maintaining a principal place of business in the County of Suffolk, State of New York.
SECOND: That upon information and belief, and at all times hereinafter mentioned Defendant was and still is a domestic corporation duly organized and existing under the laws of the State of New York, maintaining a principal place of business in the County of Suffolk, State of New York.
THIRD: That on or about July 7, 1998 Defendant Gyrodyne Company of
America, Inc., and Plaintiff's Assignor, M&N Camp Corp., d/b/a Flowerfield
Country Day Camp entered into a written Lease Agreement wherein Plaintiff leased
and demised the use, occupancy and possession of certain real property located
in the town of Smithtowm County of Suffolk, State of New York, District 0800,
Section 040.000, Block 0002, Lot 015.000.
FOURTH: That on or about September 15, 1998, Plaintiff's predecessor in interest, M&N Camp Corp., Inc., duly assigned all of its right, title and interest in and to the aforesaid agreement to Plaintiff, Flowerfield Country Day Camp, Inc.
FIFTH: That pursuant to the terms of the aforesaid agreement Defendant was to construct, at its sole cost and expense certain buildings and structures to be used by Plaintiff in accordance with the operation of the facility as set forth more fully in the aforesaid rental agreement.
SIXTH: That pursuant to the terms of the aforesaid rental agreement Defendant was to make prompt, diligent and good faith application to all appropriate governmental authorities to obtain all required permits necessary to permit the construction of the buildings, structures and other leasehold improvements set forth in the plans and specifications of the agreement.
SEVENTH: Defendant has willfully and deliberately failed and refused to perform the conditions of the aforesaid agreement on its part in that, among other things it has refused to submit, process, and complete its application to the governmental authorities, including the zoning Board of Appeals to obtain the required "governmental approvals".
EIGHTH: That upon information and belief, the Zoning Board of Appeals required Plaintiff to supply certain information and documentation and to submit revised plans in accordance with recommendations prior to approval of the requested permits.
NINTH: The Defendant has wilfully, deliberately, negligently and maliciously failed and refused to submit the requested and required information to the Zoning Board of
Appeals and to continue with the processing of its application for the required governmental permits, notwithstanding the fact that all of the foregoing was within the Defendant's power to perform the agreement.
TENTH: Plaintiff has duly performed all of the terms, covenants and conditions of the agreement on its part to be performed.
ELEVENTH: That Plaintiff has no adequate remedy at law in that, among other things the agreement and parcels of property present unique and special opportunities which would otherwise be non-existent elsewhere.
FOR A SECOND SEPARATE AND DISTINCT CAUSE OF ACTION
TWELFTH: Plaintiff repeats, reiterates and realleges each and every allegation contained in Paragraphs FIRST through ELEVENTH with the same force and effect as if fully set forth herein.
THIRTEENTH: That in reliance upon the Defendant dutifully and properly complying with the terms of the aforesaid Contract Plaintiffs incurred various expenses and disbursements and will continue to suffer said expenses in an amount which Plaintiffs estimate to constitute at least TWENTY-FIVE THOUSAND ($25,000.00) DOLLARS.
FOR A THIRD SEPARATE AND DISTINCT CAUSE OF ACTION
FOURTEENTH : Plaintiff repeats, reiterates and realleges each and every allegation contained in Paragraphs First through Thirteenth with the same force and effect as if fully set forth herein.
FIFTEENTH: That the conduct of Defendant, as aforesaid in failing to comply with the terms and conditions of the Lease was deliberately calculated and intended to defeat Plaintiff's rights pursuant to the rental agreement and was done with a malicious, wilful, wanton, and reckless disregard for the rights of Plaintiff.
SIXTEENTH: That inherent in every agreement is an implied covenant of good faith.
SEVENTEENTH: That the Defendant has breached the implied covenant of good faith by reason of the facts and matters alleged herein.
EIGHTEENTH: That by reason of the foregoing Plaintiff has been damaged in the sum of at least ONE MILLION ($1,000,000.00) DOLLARS together with punitive and exemplary damages.
WHEREFORE, Plaintiff demands Judgment against Defendant as follows:
A. On its First Cause of Action compelling the Defendant to specifically perform, in good faith all of the terms, covenants and conditions of the Lease dated July 7, 1998;
B. On its Second Cause of Action for compensatory damages in the sum of at least Twenty-Five Thousand ($25,000.00) Dollars;
C. On its Third Cause of Action for damages in the sum of One Million ($1,000,000.00) Dollars, together with reasonable attorneys fees in the sum of at least Fifty Thousand ($50,000.00) Dollars.
D. Punitive and exemplary damages in the sum of Two Million ($2,000,000.00) Dollars;
E. Such other and further relief as to the Court may seem just and proper.
Dated: Woodbury, New York
December 20, 1999
Yours etc.,
SEMON & MONDSHEIN, ESQS.
Attorney for Plaintiff
7600 Jericho Turnpike
Woodbury, New York 11797
STATE OF NEW YORK )
ss.:
COUNTY OF SUFFOLK )
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Neil Pollack, being duly sworn deposes and says:
I am the Treasurer of Flowerfield Country Day Camp, Inc., the plaintiff in the action; I have read the annexed Verified Complaint and the contents thereof and the same are true to my knowledge, except those matters therein which are stated to be alleged on information and belief, and as to those matters I believe them to be true.
My belief, as to those matters therein not stated upon knowledge, is based upon the following:
Books, records and papers in my possession.
By: /s/ Neil Pollack
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Neil Pollack
Sworn to before me this
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21st day of December, 1999
/s/ Lee Mondshein
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NOTARY PUBLIC
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LEE J. MONDSHEIN
NOTARY PUBLIC, State of New York
No. 4977570
Qualified in Suffolk County
Cert. Filed in Nassau County
Commission Expires February 11, 2001