Document:

ex-10_2.htm

    Exhibit
      10.2

     

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into effective the 16th
      day of
      January, 2008 by and between Ryan R. Gilbertson, a resident of the State of
      Minnesota (“Employee”), and Northern Oil and Gas, Inc., a Nevada corporation
      having its principal office at 130 Lake Street West, Wayzata, Minnesota (the
      “Company”).

     

    WHEREAS,
      the Company is an oil
      and gas exploration and production company headquartered in Wayzata, Minnesota,
      focused on drilling exploratory and developmental wells in the Rocky Mountain
      regions of the United States;

     

    WHEREAS, the
      Company desires to
      employ Employee, and Employee desires to accept such employment, pursuant to
      the
      terms and conditions set forth in this Agreement.

     

    NOW,
      THEREFORE, in
      consideration of the mutual covenants herein contained, the parties agree as
      follows:

     

    1.           
      Services.  The
      Company
      hereby agrees to employ Employee in the role of the Company’s Chief Financial
      Officer, and Employee hereby accepts such employment with the Company on the
      terms and conditions set forth herein.  Employee shall perform all
      activities and services as the Company’s Chief Financial Officer, which shall
      include duties and responsibilities as the Company’s Board of Directors may from
      time-to-time reasonably prescribe consistent with the duties and
      responsibilities of the Chief Financial Officer of the Company (the
“Services”).  Employee shall use his best efforts to make himself
      available to render such Services to the best of his abilities.  The
      Services shall be performed in a good professional and workmanlike manner by
      Employee, to the Company’s reasonable satisfaction, which shall include duties
      and responsibilities as the Company’s Chief Financial
      Officer.  Employee shall have the authority to bind the Company to any
      contract, agreement or other arrangement, whether oral or written, or make
      any
      representation or deliver any instructions on behalf of the
      Company.  Employee shall be considered an executive officer for
      purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”).

     

    2.           
      At-Will
      Relationship.  Employee’s
      employment with the Company shall be entirely “at-will,” meaning that either
      Employee or the Company may terminate such employment relationship by
      terminating this Agreement in writing delivered to the other party at any time
      for any reason or for no reason at all, subject to the provisions of this
      Agreement.

     

    3.           
      Compensation. In
      consideration for
      Employee entering into this Agreement with the Company and performing the
      Services required hereunder during the term of this Agreement:

     

    3.1           
      Annual
      Salary.  During
      the 2008 fiscal year, the Company shall pay Employee an annual base
      salary in the amount of One Hundred Eighty-Five Thousand Dollars ($185,000)
      (the
“Annual Salary”), which salary shall be payable to Employee retroactive to
      January 1, 2008 and in accordance with the Company’s customary payroll
      practices.  Employee’s Annual Salary shall be increased each year
      following the 2008 fiscal year at the discretion of the Company’s Compensation
      Committee or Board of Directors, as the case may be; provided, however, that
      the
      Annual Salary shall increase a minimum of four percent (4.0%) over the prior
      year’s Annual Salary each year commencing in January 2009.

     

    3.2           
      Signing
      Bonus.  In addition to Employee’s Annual Salary, the Company
      shall pay Employee One Hundred Thousand Dollars ($100,000) as a signing bonus
      immediately upon executing this Agreement in consideration for Employee entering
      into this Agreement and submitting to the duties and obligations set forth
      herein.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    3.3           
      Annual
      Bonus.  In addition to Employee’s Annual Salary, Employee shall
      be entitled to receive an annual bonus of up to twice the amount of the
      Employee’s Annual Salary for that year as may be determined appropriate in the
      discretion of the Company’s Compensation Committee or Board of Directors from
      time-to-time based upon Employee meeting or exceeding mutually agreed upon
      performance goals; provided, however, that nothing herein shall obligate the
      Company to pay any bonus to Employee at any time.

     

    3.4           
      Change in
      Control.  Upon a “change in control” of the Company (as defined
      below), Employee’s obligations hereunder shall immediately cease, this Agreement
      shall terminate and the Company shall immediately pay to Employee the
      following:

     

    (i)           
      A lump sum payment equal to twice Employee’s then-applicable Annual Salary
      payable to Employee under the terms of this Agreement in lieu of any and all
      other benefits and compensation to which Employee otherwise would be entitled
      under the terms of this Agreement; and

     

    (ii)           
      Pre-payment of the remaining lease term of Employee’s Company vehicle and use of
      such vehicle through the remaining lease term of such vehicle, along with a
      lump
      sum payment to employee of the estimated insurance premiums for such vehicle
      through the remaining lease terms.

     

    In
      addition to the foregoing payments, any options or warrants (the “Securities”)
      held in the name of Employee, or any portion thereof, shall accelerate and
      become immediately exercisable upon any “change in control” of the Company (as
      defined below).

     

    Any
      of
      the following shall constitute a “change in control” for the purposes
      hereof:

     

    (iii)           
      The consummation of a
      reorganization, merger, share exchange, consolidation or similar transaction,
      or
      the sale or disposition of all or substantially all of the assets of the
      Company, unless, in any case, the persons beneficially owning the voting
      securities of the Company immediately before that transaction beneficially
      own,
      directly or indirectly, immediately after the transaction, at least seventy-five
      percent (75%) of the voting securities of the Company or any other corporation
      or other entity resulting from or surviving the transaction in substantially
      the
      same proportion as their respective ownership of the voting securities of the
      Company immediately prior to the transaction;

     

    (iv)           
      Individuals who constitute the
      incumbent Board of Directors cease for any reason to constitute at least a
      majority of the Board of Directors; or

     

    (v)           
      The Company’s shareholders approve
      a complete liquidation or dissolution of the Company.

     

    The
      Company shall be obligated to make
      the payments to Employee required by this Section 3 immediately upon any
“change in control” that occurs during Employee’s employment with the Company or
      within six (6) months following termination of Employee’s employment with the
      Company.  The Company’s
      obligations under this Section 3 of this Agreement are absolute and
      unconditional, and not subject to any set-off, counterclaim, recoupment,
      defense, or other right that the Company or any affiliate of the Company may
      have against the Employee.  The parties agree that the
      provisions of this Section 3 shall survive any termination of this
      Agreement.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    4.           
      Benefits.  During
      the term
      of Employee’s employment with the Company and this Agreement, Employee will be
      entitled to participate in the following benefit plans to the extent available
      through the Company in accordance with the policies and plans adopted by the
      Company, as may be amended from time-to-time:

     

    4.1           
      Retirement
      Plans.  Employee shall be entitled to participate in the
      Company’s 401(k), profit sharing and other retirement plans (the “Plans”)
      presently in effect or hereafter adopted by the Company, to the extent that
      such
      Plans relate generally to all employees of the Company.  Employee
      shall be able to contribute up to the legal limit, as a percentage of his Annual
      Salary, into any such Plans, of which the Company shall match Employee’s
      contribution in an amount equal to the maximum legally-permitted amount under
      such Plans, up to a maximum amount of Twenty Five Thousand Dollars ($25,000)
      per
      calendar year.  If Employee chooses not to contribute a percentage of
      his Annual Salary into any such Plans, the Company nonetheless shall contribute
      the maximum legally-permitted amount during the term of his employment, up
      to a
      maximum amount of Twenty Five Thousand Dollars ($25,000) per calendar
      year.

     

    4.2           
      Company
      Vehicle.  Employee shall be entitled to use of a Company-leased
      vehicle during the term of Employee’s employment with the Company up to a
      maximum expense for the Company of Fifteen Thousand Dollars ($15,000) per
      calendar year, subject to the provisions of Section 3.4(ii) above.

     

    4.3           
      Health
      Insurance.  Employee, Employee’s spouse and any children of
      Employee (the “Employee’s Family”) shall be entitled to participate in health, hospitalization,
      disability, dental and other such health-related benefits and/or insurance
      plans
      that the Company may have in effect from time-to-time, all of which insurance
      premiums shall be paid by the Company on behalf of Employee and
      Employee’s Family.

     

    4.4           
      Vacation.  Employee
      shall be entitled to vacation pursuant to such general policies and procedures
      of the Company consistent with past practices as are from time-to-time adopted
      by the Company.

     

    4.5           
      Expense
      Reimbursement.  Employee shall be reimbursed by the Company for
      all ordinary and customary business expenses, including travel, communication
      costs and other disbursements incurred by him, for and on behalf of the Company,
      in connection with the provision of the Services required under this
      Agreement.  Employee shall provide such appropriate documentation
      regarding such expenses and disbursements as Company may reasonably
      require.  Reimbursement shall occur at least once per
      month.

     

    4.6           
      Other
      Benefits.  Employee shall also be entitled to such other
      benefits as the Company may from time-to-time generally provide to its
      personnel, at the discretion of and as permitted by the Company’s
      management.

     

    5.           
      Rights
      Upon Termination of Employment.  The following
      provisions shall apply upon termination of Employee’s employment:

     

    5.1           
      Death.  In
      the event Employee’s employment is terminated due to the death of
      Employee:

     

    (i)           
      Employee (or Employee’s estate) shall be paid (a) his Annual Salary through the
      end of the month in which his death occurred and (b) any unpaid expense
      reimbursement that might have accrued prior to Employee’s death;
      and

     

    (ii)           
      Any Securities held in the name of Employee, or any portion thereof, may be
      exercised to the extent Employee was entitled to do so at the time of the
      Employee’s death, by his or her executor or administrator or other person
      entitled by law to the Employee’s rights under the Securities, at any time
      within six (6) months subsequent to the date of death, at which time the
      Securities shall expire.

     

    5.2           
      Termination Other
      Than
      for Death. In the event that Employee’s employment and this Agreement is
      terminated by the Company for any reason other than Employee’s
      death:

     

    (i)           
      The Company shall pay Employee a single lump sum payment equal to Employee’s
      then-applicable Annual Salary and shall reimburse any unpaid expenses in lieu
      of
      any and all other benefits and compensation to which Employee otherwise would
      be
      entitled under the terms of this Agreement.

     

    (ii)           
      Any Securities held in the name of Employee, or any portion thereof, may be
      exercised to the extent Employee was entitled to do so at the time of
      termination of Employee’s employment at any time within ninety (90) days
      subsequent to the date of termination of Employee’s employment, at which time
      the Securities shall expire.

     

    
      
         

      

      
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    6.           
      Confidential
      Information.

     

    6.1           
      Employee shall maintain the confidentiality of all trade secrets, (whether
      owned
      or licensed by the Company) and related or other interpretative materials and
      analyses of the Company’s projects, or knowledge of the existence of any
      material, information, analyses, projects, proposed joint ventures, mergers,
      acquisitions, divestitures and other such anticipated or contemplated business
      ventures of the Company, and other confidential or proprietary information
      of
      the Company (“Confidential Information and Materials”) obtained by Employee as
      result of this Agreement during the term of the Agreement and for two (2) years
      following termination of Employee’s employment with the Company.

     

    6.2           
      In the event that such Confidential Information and Materials are memorialized
      on any computer hardware, software, CD-ROM, disk, tape, or other media, Company
      shall have the right, subject to the rights of third parties under contract,
      copyright, or other law, to view, use and copy for safekeeping or backup
      purposes such Confidential Information and Materials. During the period of
      confidentiality, Employee shall make no use of such Confidential Information
      and
      Materials for his own financial or other benefit, and shall not retain any
      originals or copies, or reveal or disclose any Confidential Information and
      Materials to any third parties, except as otherwise expressly agreed by the
      Company. Employee shall have no right to use the Company’s corporate logos,
      trademarks, service marks, or other intellectual property without prior written
      permission of the Company and subject to any limitations or restrictions upon
      such use as the Company may require.

     

    6.3           
      Upon expiration or termination of this Agreement, Employee shall turn over
      to a
      designated representative of the Company all property in Employee’s possession
      and custody and belonging to the Company.  Employee shall not retain
      any copies or reproductions of correspondence, memoranda, reports, notebooks,
      drawings, photographs or other documents relating in any way to the affairs
      of
      the Company and containing Confidential Information and Materials which came
      into Employee’s possession at any time during the term of this
      Agreement.

     

    6.4           
      Employee acknowledges that Company is a public company registered under the
      Exchange Act and that this Agreement may be subject to the filing requirements
      of the Exchange Act. Employee acknowledges and agrees that the applicable
      insider trading rules and limitations on disclosure of non-public information
      set forth in the Exchange Act and rules and regulations promulgated by the
      SEC
      shall apply to this Agreement and Employee’s employment with the
      Company.  Employee (on
      behalf of himself as well as his executors, heirs, administrators and
      assigns) absolutely and unconditionally agrees to indemnify and hold
      harmless the Company and all of its past, present and future affiliates, executors, heirs,
      administrators, shareholders, employees, officers, directors, attorneys,
      accountants, agents, representatives, predecessors, successors and
      assigns from any and all
      claims, debts, demands, accounts, judgments, causes of action, equitable relief,
      damages, costs, charges, complaints, obligations, controversies, actions, suits,
      proceedings, expenses, responsibilities and liabilities of every kind and
      character whatsoever (including, but not limited to, reasonable attorneys’ fees
      and costs) in the event of Employee’s breach or alleged breach of any
      obligation under the Exchange Act, any rules promulgated by the SEC and any
      other applicable Federal or state laws, rules, regulations or
      orders.

     

    6.5           
      The parties agree that the provisions of this Section 6 shall survive any
      termination of this Agreement.

     

    
      
         

      

      
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    7.           
      Non-Competition
      and Non-Solicitation.

     

    
      	
               

            	
              7.1

            	
              Employee
                agrees that he will not: 

            

    

     

    (i)           
      anywhere within the United States, engage, directly or indirectly, alone or
      as a
      shareholder (other than as a holder of less than ten percent (10%) of the common
      stock of any publicly traded corporation), partner, officer, director, employee,
      consultant or advisor, or otherwise in any way participate in or become
      associated with, any other business organization that is engaged or becomes
      engaged in any business that is the same or substantially identical business
      of
      the Company, or is directly competitive with, any business activity that the
      Company is conducting at the time of the Employee’s termination or has notified
      the Employee that it proposes to conduct and for which the Company has, prior
      to
      the time of such termination, expended substantial resources (the “Designated
      Industry”),

     

    (ii)           
      divert to any competitor of the Company any customer of the Company,
      or

     

    (iii)           
      solicit any employee, contributor or faculty member of the Company to change
      its
      relationship with the Company, or hire or offer employment to any person to
      whom
      the Employee actually knows the Company has offered employment.

     

    7.2           
      Employee agrees to be bound by the provisions of this Section 7 in consideration
      for the Company’s employment of Employee, payment of the compensation and
      benefits provided under Section 3 and Section 4 above and the covenants and
      agreements set forth herein.  The provisions of this Section 7 shall
      apply during the term of Employee’s employment with the Company and for a period
      of one (1) year following termination of the Employee’s employment; provided, however,
      that the provisions of this Section 7 shall cease to apply immediately upon
      any
“change in control” as defined in Section 3 of this Agreement or in the event
      that the Company terminates Employee’s employment for any reason or for no
      reason whatsoever.  The parties agree that the provisions of this
      Section 7 shall survive any termination of this Agreement, Employee will
      continue to be bound by the provisions of this Section 7 until their expiration
      and Employee shall not be entitled to any compensation from the Company with
      respect thereto except as provided under this Agreement.

     

    7.3           
      Employee acknowledges that the provisions of this Section 7 are essential to
      protect the business and goodwill of the Company. If at any time the provisions
      of this Section 7 shall be determined to be invalid or unenforceable by reason
      of being vague or unreasonable as to area, duration or scope of activity, this
      Section 7 shall be considered divisible and shall become and be immediately
      amended to only such area, duration and scope of activity as shall be determined
      to be reasonable and enforceable by the court or other body having jurisdiction
      over the matter; and the Employee agrees that this Section 7 as so amended
      shall
      be valid and binding as though any invalid or unenforceable provision had not
      been included herein.

     

    8.           
      Non-Disparagement.  Both
      the Company
      and Employee agree that neither they nor any of their respective affiliates,
      predecessors, subsidiaries, partners, principals, officers, directors,
      authorized representatives, agents, employees, successors, assigns, heirs or
      family members shall disparage or defame any other party hereto relating in
      any
      respect to this Agreement, their relationship or the Company’s employment of
      Employee.

     

    9.           
      Notices.  Any
      notice
      required or permitted under this Agreement shall be personally delivered or
      sent
      by recognized overnight courier or by certified mail, return receipt requested,
      postage prepaid, and shall be effective when received (if personally delivered
      or sent by recognized overnight courier) or on the third day after mailing
      (if
      sent by certified mail, return receipt requested, postage prepaid) as
      follows:

     

    As
      to
      Employee, at the Employee’s home address on file with the Company.

     

    As
      to the
      Company:

     

    Prior
      to February 1,
      2008:                                Northern
      Oil and Gas, Inc.

    Attn: Board
      of Directors

    130
      Lake
      Street West

    Wayzata,
      Minnesota 55391

     

    BeginningFebruary
      1,
      2008:                           
Northern Oil and Gas, Inc.

    Attn:  Board
      of Directors

    315
      Manitoba Avenue – Suite 200

    Wayzata,
      Minnesota 55391

     

    Either
      party may designate a different person to whom notices should be sent at any
      time by notifying the other party in writing in accordance with this
      Agreement.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    10.           
      Survival
      of Certain Provisions.  Those provisions
      of this Agreement which by their terms extend beyond the termination or
      non-renewal of this Agreement (including all representations, warranties, and
      covenants of the parties) shall remain in full force and effect and survive
      such
      termination or non-renewal.

     

    11.           
      Severability.  Each
      provision of
      this Agreement shall be considered severable such that if any one provision
      or
      clause conflicts with existing or future applicable law, or may not be given
      full effect because of such law, this shall not affect any other provision
      which
      can be given effect without the conflicting provision or clause.

     

    12.           
      Entire
      Agreement.  This Agreement, the exhibits and any addendum
      hereto contain the entire agreement and understanding between the parties,
      and
      supersede all prior agreements and understandings relating to the subject matter
      hereof. There are no understandings, conditions, representations or warranties
      of any kind between the parties except as expressly set forth
      herein.

     

    13.           
      Assignability.  Employee
      may not assign this Agreement to any third party for whatever purpose without
      the express written consent of the Company.  The Company may not
      assign this Agreement to any third party without the express written consent
      of
      Employee except by operation of law, or through merger, liquidation,
      recapitalization or sale of all or substantially all of the assets of the
      Company, provided that the Company may assign this Agreement at any time to
      an
      affiliate of the Company.  The provisions of this Agreement shall
      inure to the benefit of and be binding upon the parties and their respective
      representatives, successors, and assigns.

     

    14.           
      Headings.  The
      headings of
      the paragraphs and sections of this Agreement are inserted solely for the
      convenience of reference.  They shall in no way define, limit, extend,
      or aid in the construction of the scope, extent, or intent of this
      Agreement.

     

    15.           
      Waiver.  The
      failure of a
      party to enforce the provisions of this Agreement shall not be construed as
      a
      waiver of any provision or the right of such party thereafter to enforce each
      and every provision of this Agreement.

     

    16.           
      Amendments.  No
      amendments of
      this Agreement shall be binding upon the Company or Employee unless made in
      writing, signed by the parties hereto, and delivered to the parties at the
      addresses provided herein.

     

    17.           
      Governing
      Law.  This Agreement
      shall be governed by and construed under the internal laws of the State of
      Minnesota, without regard to the principles of comity and/or the applicable
      conflicts of laws of any state that would result in the application of any
      laws
      other than the State of Minnesota.

     

    18.           
      Jurisdiction.  This
      Agreement,
      including the documents, instruments and agreements to be executed and/or
      delivered by the parties pursuant hereto, shall be construed, governed by and
      enforced in accordance with the internal laws of the State of Minnesota, without
      giving effect to the principles of comity or conflicts of laws
      thereof.  Employee and the Company agree and consent that any legal
      action, suit or proceeding seeking to enforce any provision of this Agreement
      shall be instituted and adjudicated solely and exclusively in any court of
      general jurisdiction in Minnesota, or in the United States District Court having
      jurisdiction in Minnesota and Employee and the Company agree that venue will
      be
      proper in such courts and waive any objection which they may have now or
      hereafter to the venue of any such suit, action or proceeding in such courts,
      and each hereby irrevocably consents and agrees to the jurisdiction of said
      courts in any such suit, action or proceeding.  Employee and the
      Company further agree to accept and acknowledge service of any and all process
      which may be served in any such suit, action or proceeding in said courts,
      and
      also agree that service of process or notice upon them shall be deemed in every
      respect effective service of process or notice upon them, in any suit, action,
      proceeding, if given or made (i) according to applicable law, (ii) by
      a person over the age of eighteen (18) who personally served such notice or
      service of process on Employee or the Company, as the case may be, or
      (iii) by certified mail, return receipt requested, mailed to employee or
      the Company, as the case may be, at their respective addresses set forth in
      this
      Agreement.

     

    19.           
      Counterparts
      and Electronic Signatures.  This Agreement
      may be executed in two or more counterparts, each of which shall be deemed
      an
      original but all of which together shall constitute one and the same
      Agreement.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the
      parties have executed this Agreement as of the date first set forth
      above.

     

    

    NORTHERN
      OIL AND GAS, INC.

    

    

    By
/s/
      Michael L.
      Reger

        By:  Michael
      L. Reger

        Its:  Chief
      Executive Officer

    

    

    

    EMPLOYEE:

    

    

    /s/
      Ryan R.
      Gilbertson

    Ryan
      R.
      Gilbertson

    

     

    

     

    

     

    

     

    
      
        
        

      

      
        7Exhibit 10.1

 

ACKNOWLEDGEMENTS

 

	
  CORPORATE TENANT

  	
   

  	
  INDIVIDUAL TENANT

  
	
   

  	
   

  	
   

  
	
  STATE OF NEW YORK,

  	
   

  	
  STATE OF NEW YORK,

  
	
   

  	
   

  	
   

  
	
  County
  of  _________________________________________ On
  this ____________________ day of ________, 19____, before me personally came
   ___________________________ to me known, who being by me duly sworn,
  did depose and say that he resides in ____________________________________________________
  that he is the _______________________________________ of
  ____________________________________________________ the corporation
  described in and which executed the foregoing instrument, as TENANT; that he
  knows the seal of said corporation; that the seal affixed to said instrument
  is such corporate seal; that it was so affixed by order of the Board of Directors
  of said corporation, and that he signed his name thereto by like order.

  	
   

  	
  County
  of ____________________________________________ On this  ______________  
  day of  _____ , 19 _____ , before me personally came
   ___________________________________  to be known and known to me
  to be the individual described in and who, as TENANT, executed the foregoing
  instrument and acknowledged to me that _________________________________ 
  he executed the same.

  

 

IMPORTANT PLEASE READ

 

RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE IN
  ACCORDANCE WITH ARTICLE 36.

 

1.             The sidewalks,
entrances, driveways, passages, courts, elevators, vestibules, stairways,
corridors or halls shall not be obstructed or encumbered by any Tenant or used
for any purpose other than for ingress or egress from the demised premises and
for delivery of merchandise and equipment in a prompt and efficient manner
using elevators and passageways designated for such delivery by Owner.  There shall not be used in any space, or in
the public hall of the building, either by any Tenant or by jobbers or others
in the delivery or receipt of merchandise, any hand trucks, except those
equipped with rubber tires and sideguards. 
If said premises are situated on the ground floor of the building, Tenant
thereof shall further, at Tenant’s expense, keep the sidewalk and curb in front
of said premises clean and free from ice, snow, dirt and rubbish.

 

2.             The water and wash
closets and plumbing fixtures shall not be used for any purposes other than
those for which they were designed or constructed and no sweepings, rubbish,
rags, acids or other substances shall be deported therein, and the expense of
any breakage, stoppage, or damage resulting from the violation of this rule shall
be borne by the Tenant who, or whose clerks, agents, employees or visitors,
shall have caused it.

 

 

 

3.             No carpet, rug or
other article shall be hung or shaken out of any window of the building; and no
Tenant shall sweep or throw or permit to be swept or thrown form the demised premises
any dirt or other substances in to any of the corridors or halls, elevators, or
out of the doors or windows or stairways of the building and Tenant shall not
use, keep or permit to be used or kept any foul or noxious gas or substance in
the demised premises, or permit or suffer the demised premises to be occupied
or used in a manner offensive or objectionable to Owner or other occupants of
the buildings by reason of noise, odors, and or vibrations, or interfere in any
way, with other Tenants or those having business therein, nor shall any
bicycles, vehicles, animals, fish, or birds be kept in or about the
building.  Smoking or carrying lighted
cigars or cigarettes in the elevators of the building is prohibited.

 

4.             No awnings or other
projections shall be attached to the outside walls of the building without the
prior written consent of Owner.

 

5.             No sign,
advertisement, notice or other lettering shall be exhibited, inscribed, painted
or affixed by any Tenant on any part of the outside of the demised premises or
the building or on the inside of the demised premises if the same is visible
from the outside of the premises without the prior written consent of Owner,
except that the name of Tenant may appear on the entrance door of the premises.  In the event of the violation of the
foregoing by any Tenant, Owner may remove same without any liability and may
charge the expense incurred by such removal to Tenant or Tenants violating this
rule.  Interior signs on doors and
directory tables shall be inscribed, painted or affixed for each Tenant by
Owner at the expense of such Tenant, and shall be of a size, color and style
acceptable to Owner.

 

6.             No Tenant shall
mark, paint, drill into, or in any way deface any part of the demised premises
or the building of which they form a part. 
No boring, cutting or arraigning of wires shall be permitted, except
with the prior written consent of Owner, and as Owner may direct.  No Tenant shall lay linoleum, or other
similar floor covering, so that the same shall come in direct contact with the
floor of the demised premises, and, if linoleum or other similar floor covering
is desired to be used an interlining of builder’s deadening felt shall be first
affixed to the floor, by a paste or other material, soluble in water, the use
of cement or other similar adhesive material being expressly prohibited.

 

7.             No additional locks
or bolts of any kind shall be places upon any of the doors or windows by any
Tenant, nor shall any changes be made in existing locks or mechanism thereof.  Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost
thereof.

 

8.             Freight, furnisher,
business equipment, merchandise and bulky matter of any description shall be
delivered to and removed from the premises only on the freight elevators and
through the service entrances and corridors, and only during hours and in a
manner approved by Owner.  Owner reserves
the right to inspect all freight to be brought into the building and to exclude
from the building all freight which violates any of these Rules and
Regulations of the lease of which these Rules and Regulations are a part.

 

 

2

 

9.             No Tenant shall
obtain for use upon the demised premises ice, drinking water, towel and other
similar services, or accept barbering or book blacking services in the demised
premises, except from persons authorized by Owner, and at hours and under
regulations fixed by Owner.  Canvassing,
soliciting and peddling in the building is prohibited and each Tenant shall
cooperate to prevent the same.

 

10.           Owner reserves the
right to exclude from the building all persons who do not present a pass to the
building signed by Owner.  Owner will
furnish passes to persons for whom any Tenant requests same in writing.  Each Tenant shall be responsible for all
persons for whom he requests such pass and shall be liable to Owner for all
acts of such persons.  Notwithstanding
the foregoing.  Owner shall not be
required to allow Tenant or any person to enter or remain in the building,
except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays
from 8:00 a.m. to 1:00 p.m. 
Tenant shall not have a claim against Owner by reason of Owner excluding
from the building an person who does not present such pass.

 

11.           Owner shall have the
right to prohibit any advertising by any Tenant which is Owner’s opinion, tends
to impair the reputation of the building or its desirability as a loft
building, and upon written notice from Owner, Tenant shall refrain from or
discontinue such advertising.

 

12.           Tenant shall not
bring or permit to be brought or kept in or on the demised premises, any
inflammable, combustible, or explosive, or hazardous fluid, material, chemical
or substance, or cause or permit any odors of cooking or other processes, or
any unusual or other objectionable odors to permeable in our emanate from the
demised premises.

 

13.           Tenant shall not use
the demised premises in a manner which disturbs or interferes with other
Tenants in the beneficial use of the premises.

 

 

3

 

STANDARD FORM OF LOFT LEASE

 

The Real Estate Board of New York, Inc.

 

Agreement
of Lease, made as of this 23rd day of September, 2004,
between Long Island Industrial Group One, LLC having an office at 575
Underhill Boulevard, Suite 125, Syosset, New York 11791, party of the first
part, hereinafter referred to as OWNER and/or Landlord, and American Defense
Systems, Inc., having an address at 360 West Olive Street, Long Beach,
NY  11561, party of the second part,
hereinafter referred to as TENANT,

 

WITNESSETH:  Owner hereby leases to Tenant and Tenant
hereby hires from Owner premises (Unit C) (substantially as shown on attached
sketch)

 

in
the building known as 230 Duffy Avenue, Hicksville, New York 11801

                                (the “Building”)
for the term of five (5) years

                                (or until such
term shall sooner cease and expire as hereinafter provided) to commence on The
Commencement Date  ______________  , and to end on The Expiration
Date  ______________ , both dates inclusive, at an annual rental rate
of     See Schedule “A” in Rider
annexed hereto  which sets forth the Commencement Date, the Expiration
Date and the annual rental payable by Tenant to Landlord hereunder,

 

which
Tenant agrees to pay in lawful money of the United States which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first xxxxxxx monthly installment(s) on the execution hereof
(unless this lease be a renewal).

 

                In the event that, at the
commencement of the term of this lease, or thereafter, Tenant shall be in
default in the payment of rent to Owner pursuant to the terms of another lease
with Owner or with Owner’s predecessor in interest, Owner may at Owner’s option
and without notice to Tenant add the amount of such arrears to any monthly
installment of rent payable hereunder and the same shall be payable to Owner as
additional rent.

 

                The parties hereto, for
themselves, their heirs, distributees, executors, administrators, legal
representatives, successors and assigns, hereby covenant as follows:

 

Rent:

 

1.             Tenant shall pay the rent as above
and as hereinafter provided.

 

Occupancy:

 

2.             Tenant shall use and occupy demised
premises for warehousing of bulletproof materials, testing and assembly of
bullet proof glass and opaque armor, and related offices incidental thereto, provided
such use is in accordance with the certificate of occupancy for the building,
if any, and for no other purpose.

 

 

4

Alterations:

 

3.             Tenant shall make
no changes in or to the demised premises of any nature without Owner’s prior
written consent.  Subject to the prior
written consent of Owner, and to the provisions of this article, Tenant, at
Tenant’s expense, may make alterations, installations, additions or
improvements which are nonstructural and which do not affect utility services
or plumbing and electrical lines, in or to the interior of the demised premises
using contractors or mechanics first approved in each instance by Owner.  Tenant shall, at its expense, before making
any alterations, additions, installations or improvements obtain all permits,
approval and certificates required by any governmental or quasi-governmental
bodies and (upon completion) certificates of final approval thereof and shall
deliver promptly duplicates of all such permits, approvals and certificates to
Owner.  Tenant agrees to carry and will
cause Tenant’s contractors and sub-contractors to carry such workman’s
compensation, general liability, personal and property damage insurance as
Owner may require.  If any mechanic’s
lien is filed against the demised premises, or the building of which the same
forms a part, for work claimed to have been done for, or materials furnished
to, Tenant, whether or not done pursuant to this article, the same shall be
discharged by Tenant within thirty days thereafter, at Tenant’s expense, by
payment or filing the bond required by law or otherwise.  All fixtures and all paneling, partitions,
railings and like installations, installed in the premises at any time, either
by Tenant or by Owner on Tenant’s behalf, shall, upon installation, become the
property of Owner and shall remain upon and be surrendered with the demised
premises unless Owner, by notice to Tenant no later than twenty days prior to
the date fixed as the termination of this lease, elects to relinquish Owner’s
right thereto and to have them removed by Tenant, in which event the same shall
be removed from the demised premises by Tenant prior to the expiration of the
lease, at Tenant’s expense.  Nothing in
this Article shall be construed to give Owner title to or prevent Tenant’s
removal of trade fixtures, moveable office furniture and equipment, but upon
removal of any such from the premises or upon removal of other installations as
may be required by Owner, Tenant shall immediately and at its expense, repair
and restore the premises to the condition existing prior to installation and
repair any damage to the demised premises or the building due to such
removal.  All property permitted or
required to be removed by Tenant at the end of the term remaining in the
premises after Tenant’s removal shall be deemed abandoned and may, at the
election of the Owner, either be retained as Owner’s property or removed from
the premises by Owner, at Tenant’s expense.

 

See
paragraph “66th” in Rider

 

Repairs:

 

4.             Owner shall maintain and repair the
exterior of and the public portions of the building.  Tenant shall, throughout the term of this
lease, take good care of the demised premises including the bathrooms and
lavatory facilities (if the demised premises encompass the entire floor of the
building) and the windows and window frames and, the fixtures and appurtenances
therein and at Tenant’s sole cost and expense promptly make all repairs thereto
and to the building, whether structural or non-structural in nature, caused by
or resulting from the carelessness, omission, neglect or improper conduct of
Tenant, Tenant’s servants, employees, invitees or licensees, and whether or not
arising from such Tenant conduct or omission, when required by other provisions
of this lease, including Article 6. 
Tenant shall also repair all damage to the building and the 

 

 

5

 

demised
premises caused by the moving of Tenant’s fixtures, furniture or
equipment.  All the aforesaid repairs
shall be of quality or class equal to the original work or construction.  If Tenant fails, after ten days notice, to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by the Owner at the expense of Tenant, and the expenses
thereof incurred by Owner shall be collectible, as additional rent, after
rendition of a bill or statement therefor. 
If the demised premises be or become infested with vermin, Tenant shall,
at its expense, cause the same to be exterminated.  Tenant shall give Owner prompt notice of any
defective condition in any plumbing, heating system or  electrical lines located in the demised
premises and following such notice, Owner shall remedy the condition with due
diligence, but at the expense of Tenant, if repairs are necessitated by damage
or injury attributable to Tenant, Tenant’s servants, agents, employees,
invitees or licensees as aforesaid. 
Except as specifically provided in Article 9 or elsewhere in this
lease, there shall be no allowance to the Tenant for a diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner, Tenant or others making or
failing to make any repairs, alterations, additions or improvements in or to
any portion of the building or the demised premises or in and to the fixtures,
appurtenances or equipment thereof.  It
is specifically agreed that Tenant shall not be entitled to any set off or
reduction of rent by reason of any failure of Owner to comply with the
covenants of this or any other article of this lease.  Tenant agrees that Tenant’s sole remedy of
law, in such instance will be by way of any action for breach of contract.  The provisions of this Article 4 with
respect to the making of repairs shall not apply in the case of fire or other
casualty with regard to which Article 9 hereof shall apply.

 

Window
Cleaning:

 

5.             Tenant shall not clean nor require,
permit, suffer or allow any window in the demised premises to be cleaned from
the outside in violation of Section 202 of the New York State Labor Law or
any other applicable law or of the Rules of the Board of Standards and
Appeals, or of any other Board or body having or asserting jurisdiction.

 

Requirements
of Law, Fire Insurance:

 

6.             Prior to the commencement of the
lease term, if Tenant is then in possession, and at all times thereafter Tenant
shall, at Tenant’s sole cost and expense, promptly comply with all present and
future laws, orders and regulations of all state, federal, municipal and local
governments, departments, commissions and boards and any direction of any
public officer, pursuant to law, and all orders, rules and regulations of
the New York Board of           
Underwriters, or the Insurance Services Office, or any similar body which shall
impose any violation, order or duty upon Owner or Tenant with respect to the
demised premises, whether or not arising out of Tenant’s use or manner of use
thereof, or, with respect to the building, if arising out of Tenant’s use or
manner of use thereof, or, with respect to the building, if arising out of
Tenant’s use or manner of use thereof, or, with respect to the building, if
arising out of Tenant’s use or manner of use of the demised premises of the
building (including the use permitted under the lease).  Except as provided in Article 30 hereof,
nothing herein shall require Tenant to make structural repairs or alterations
unless Tenant has, by its manner of use of the demised premises or method of
operation therein, violated any such laws, ordinances, order, rules,
regulations or requirements with respect thereto.  Tenant shall not do or permit any act or 

 

 

6

 

thing
to be done in or to the demised premises which is contrary to law, or which
will invalidate or be in conflict with public liability, fire or other policies
of insurance at any time carried by or for the benefit of Owner.  Tenant shall not keep anything in the demised
premises except as now or hereafter permitted by the Fire Department, Board of
Fire Underwriter, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant’s occupancy.  If by reason of
failure to comply with the foregoing the fire insurance rate shall, at the
beginning of this lease or at any time thereafter, be higher than it otherwise
would be, then Tenant shall reimburse Owner, as additional rent hereunder, for
that portion of all fire insurance premiums thereafter paid by Owner which
shall have been charged because of such failure by Tenant.  In any action or proceeding wherein Owner and
Tenant are parties, a schedule or “make-up” or rate for the building or demised
premises issued by a body making fire insurance rates applicable to said
premises shall be conclusive evidence of the facts therein stated and of the
several items and charges in the fire insurance rates then applicable to said
premises.  Tenant shall not place a load
upon any floor of the demised premises exceeding the floor load per square foot
area which it was designed to carry and which is allowed by law, Owner reserves
the right to prescribe the weight and position to all safes, business machines
and mechanical equipment.  Such
installations shall be placed and maintained by Tenant, at Tenant’s expense, in
settings sufficient, in Owner’s judgment, to absorb and prevent vibration,
noise and annoyance.

 

Subordination:

 

7.             This lease is subject and
subordinate to all ground or underlying leases and to all mortgages which may
now or hereafter affect such leases or the real property of which demised
premises are a part and to all renewals, modifications, consolidations,
replacements and extensions of any such underlying leases and mortgages.  This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessor or by any mortgage, affecting any lease or the real property
of which the demised premises are a part. 
In confirmation of such subordination, Tenant shall from time to time
execute promptly any certificate that Owner may request.

 

Tenant’s
Liability Insurance Property Loss, Damage, Indemnity:

 

8.             Owner or its agents shall not be
liable for any damage to property of Tenant or of others entrusted to employees
of the building, nor for loss of or damage to any property of Tenant by theft
or otherwise, nor for any injury or damage to persons or property resulting
from any cause of whatsoever nature, unless caused by or due to the negligence
of Owner, its agents, servants or employees; Owner or its agents shall not be
liable for any damage caused by other tenants or persons in, upon or about said
building or caused by operations in connection of any private, public, or
         public work.  If at any time any windows of the demised
premises are temporarily closed, darkened or bricked up (or permanently closed,
darkened or bricked up, if required by law) for any reason whatsoever
including, but not limited to Owner’s own acts, Owner shall not be liable for
any damage Tenant make sustain thereby and Tenant shall not be entitled to any
compensation therefor nor abatement or diminution of rent nor shall the same 

 

 

 

7

 

release
Tenant from its obligations hereunder nor constitute an eviction.  Tenant shall indemnify and save harmless
Owner against and from all liabilities, obligations, damages, penalties,
claims, costs and expenses for which Owner shall not be reimbursed by
insurance, including reasonable attorney’s fees, paid, suffered or incurred as
a result of any breach by Tenant, Tenant’s agents, contractors, employees,
invitees, or licensees, of any covenant or condition of this lease, or the
carelessness, negligence or improper conduct of the Tenant, Tenant’s agents,
contractors, employees, invitees or licenses. 
Tenant’s liability under this lease extends to the acts and omissions of
any sub-tenant, and any agent, contractor, employee, invitee or licensee or any
sub-tenant.  In case any action or
proceeding is brought against Owner by reason of any such claim, Tenant, upon
written notice from Owner, will, at Tenant’s expense, resist or defend such
action or proceeding by counsel approved by Owner in writing, such approval not
to be unreasonably withheld.

 

Destruction
Fire and other Casualty:

 

9.             (a)  If the demised premises
or any part thereof shall be damaged by fire or other casualty, Tenant shall
give immediate notice thereof to Owner and this lease shall continue in full
force and effect except as hereinafter set forth, (b) If the demised
premises are partially damaged or rendered partially unusable by fire or other
casualty, the damages thereto shall be repaired by and at the expense of Owner
and the rent and other items of additional rent, until such repair shall be
substantially completed, shall be apportioned from the day following the
casualty according to the part of the premises which is usable, (c) If the
demised premises are totally damaged or rendered wholly unusable by fire or
other casualty, then the rent and other items of additional rent as hereinafter
expressly provided shall be proportionately paid up to the time of the casualty
and thenceforth shall cease until the date when the premises shall have been
repaired and restored by Owner (or sooner reoccupied in part by Tenant then
rent shall be apportioned as provided in subsection (b) (above), subject
to Owner’s right to elect not to restore the same as hereinafter provided, (d) If
the demised premises are rendered wholly unusable or (whether or not the
demised premises are damaged in whole or in part) if the building shall be so
damaged that Owner shall decide to demolish it or to rebuild it, then, in any
of such event, Owner may elect to terminate this lease by written notice to
Tenant, given within 90 days after such fire or casualty,  or 30 days after adjustment of the insurance
claim for such fire or casualty, whichever is sooner, specifying a date for the
expiration of the lease, which date shall not be more than 60 days after the
giving of such notice, and upon the date specified in such notice the term of
this lease shall expire as fully and completely as if such date were the date
set forth above for the termination of this lease and Tenant shall forthwith
quit, surrender and vacate the premises without prejudice however, to Owner’s
rights and remedies against Tenant under the lease provisions in effect prior
to such termination, and any rent owing shall be paid up to such date and any
payments of rent made by Tenant which were on account of any period subsequent
to such date shall be returned to Tenant. 
Unless Owner shall serve a termination notice as provided for herein,
Owner shall make the repairs and restorations, under the conditions of (b) and
(c) hereof, with all reasonable expedition, subject to delays due to
adjustment of insurance claims, labor troubles and causes beyond Owner’s
control.  After any such casualty, Tenant
shall cooperate with Owner’s restoration by removing from the premises as
promptly as reasonably possible, all of Tenant’s salvageable inventory and
movable equipment, furniture, and other property.  Tenant’s liability for rent shall resume five
(5) days after written notice from Owner 

 

 

8

 

that
the premises are substantially ready for Tenant’s occupancy, (c) Nothing
contained herein above shall relieve Tenant from liability that may exist as a
result of damage from fire or other casualty. 
Notwithstanding the foregoing, including Owner’s obligation to restore
under subparagraph (b) above each party shall look first to any insurance
in its favor before making any claim against the other party for recovery for
loss of damage resulting from fire or other casualty, and to the extent that
such insurance is in force and collectible and to the extent permitted by law,
Owner and Tenant each hereby releases and waives all right of recovery with
respect to subparagraphs (b), (d) and (c) above, against the other or
any one claiming through or under each of them by way of subrogation or
otherwise.  The release and waiver herein
referred to shall be deemed to include any loss or damage to the demised
premises and/or to any personal property, equipment, trade fixtures, goods and
merchandise located therein.  The
foregoing release and waiver shall be in force only if both relessors’
insurance policies contain a clause providing that such a release or waiver
shall not invalidate the insurance.  If,
and to the extent, that such waiver can be obtained only by the payment of
additional premiums, then the party benefiting from the waiver shall pay such
premium within ten days after written demand or shall be deemed to have agreed
that the party obtaining insurance coverage shall be free of any further
obligation under the provisions hereof with respect to waiver of subrogation.
Tenant acknowledges that Owner will not carry insurance on Tenant’s furniture
and or furnishings or any fixtures or equipment, improvements, or appurtenances
removable by Tenant and agrees that Owner will not be obligated to repair any
damage thereto or replace the same, (i) Tenant hereby waives the
provisions of Section 227 of the Real Property Law and agrees that the
provisions of this article shall govern and control in lieu thereof.

 

Eminent
Domain:

 

10.           If the whole or any part of the
demised premises shall be acquired or condemned by Eminent Domain for any
public or quasi public use or purpose, then and in that event, the term of this
lease shall cease and terminate from the date of title vesting in such
proceeding and Tenant shall have no claim for the value of any unexpired term
of said lease.  Tenant shall have the
right to make a independent claim to the condemning authority for the value of
Tenant’s moving expenses and personal property, trade fixtures and equipment,
provided Tenant is entitled pursuant to the terms of the lease to remove such
property, trade fixtures and equipment at the end of the term and provided
further such claim does not reduce Owner’s award.

 

Assignment,
Mortgage, Etc.:

 

11.           Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, expressly covenants that it shall not assign, mortgage or encumber
this agreement, nor underlet, or suffer or permit the demised premises or any
part thereof to be used by others, without the prior written consent of Owner
in each instance.  Transfer of the
majority of the stock of a corporate of Owner in each instance.  Transfer of the majority of the stock of a
corporate Tenant or the majority partnership interest of a partnership Tenant
shall be deemed an assignment.  If this
lease be assigned, or if the demised premises or any part thereof be underlet
or occupied by anybody other than Tenant, Owner may, after default by Tenant,
collect rent from the assignee, under tenant or occupant, and apply the net
amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver 

 

 

 

9

 

of
this covenant, or the acceptance of the assignee, undertenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained.  The consent by Owner to an assignment or
underletting shall not in any way be construed to relieve Tenant from obtaining
the express consent in writing of Owner to any further assignment as
underletting.  See paragraph “55th”
in Rider.

 

Electric
Current:

 

12.           Rates and conditions in respect to
submetering or rent inclusion, as the case may be, to be added in RIDER
attached hereto.  Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in Owner’s
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building.  The change at any time of the character of
electric service shall in no wise make Owner liable or responsible to Tenant,
for any loss, damages or expenses which Tenant may sustain.

 

Access
to Premises:

 

13.           Owner or Owner’s agents shall have
the right (but shall not be obligated) to enter the demised premises in any
emergency at any time, and, at other reasonable times, to examine the same and
to make such repairs, replacements and improvements as Owner may deem necessary
and reasonably desirable to any portion of the building or which owner may
elect to perform in the premises after Tenant ‘s failure to make repairs or
perform any work which Tenant is obligated to perform under this lease, or for
the any work which Tenant is obligated to perform under this lease, or for the
purpose of complying with laws, regulations and other directions of
governmental authorities.  Tenant shall
permit Owner to use and maintain and replace pipes and conduits in and through
the demised premises and to erect new pipes and conduits therein provided,
wherever possible, they are within walls or otherwise concealed.  Owner may, during the progress of any work in
the demised premises, take all necessary materials and equipment into said
premises without the same constituting an eviction nor shall the Tenant be
entitled to any abatement of rent which such work is in progress nor to any
damages by reason of loss or interruption of business or otherwise.  Throughout the term hereof Owner shall have
the right to enter the demised premises at reasonable hours for the purpose of
showing the same to prospective purchasers or mortgages of the building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants and may, during said six months period, place upon the
demised premises the usual notices “To Let” and “For Sale” which notices Tenant
shall permit to remain thereon without molestation. If Tenant is not present to
open and permit an entry into the demised premises, Owner or Owner’s agents may
enter the same whenever such entry may be necessary or permissible by master
key or forcibly and provided reasonable care is exercised to safeguard Tenant’s
property, such entry shall not render Owner or its agents liable therefor, nor
in any event shall the obligations of Tenant hereunder be affected.  If during the last month of the term Tenant
shall have removed all or substantially all of Tenant’s property
therefrom.  Owner may immediately enter,
alter, renovate or redecorate the demised premises without limitation or
abatement of rent, or incurring liability to Tenant for any compensation and
such act shall have no effect on this lease or Tenant’s obligation hereunder.

 

 

 

10

 

Vault,
Vault Space, Area:

 

14.           No Vaults, vault space or area,
whether or not enclosed or covered, not within the property line of the
building is leased hereunder anything contained in or indicated on any sketch,
blue print or plan, or anything contained elsewhere in this lease to the
contrary notwithstanding.  Owner makes no
representation as to the location of the property line of the building.  All vaults and vault space and all such areas
not within the property line of the building, which Tenant may be permitted to
use and/or occupy, is to be used and/or occupied under a revocable license, and
if any such license be revoked, or if the amount of such space or area be
diminished or required by any federal, state or municipal authority or public
utility, Owner shall not be subject to any liability nor shall Tenant be
entitled to any compensation or diminution or abatement of rent, nor shall such
revocation, diminution or requisition be deemed constructive or actual
eviction.  Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.

 

Occupancy:

 

15.           Tenant will not at any time use or
occupy the demised premises in violation of the certificate of occupancy issued
for the building of which the demised premises are a part.  Tenant has inspected the premises and accepts
them as is, subject to the riders annexed hereto with respect to Owner’s work,
if any.  In any event, Owner makes no
representation as to the condition of the premises and Tenant agrees to accept
the same subject to violations, whether or not of record.  If any governmental license or permit shall
be required for the proper and lawful conduct of Tenant’s business, Tenant
shall be responsible for and shall procure and maintain such license or permit.

 

Bankruptcy:

 

16.(a)      Anything elsewhere in this lease to the
contrary notwithstanding, this lease may be cancelled by Owner by sending of a
written notice to Tenant within a reasonable time after the happening of any
one or more of the following events:  (1) the
commencement of a case in bankruptcy or under the laws of any state naming
Tenant as the debtor; or (2) the making by Tenant of an assignment or any
other arrangement for the benefit of creditors under any state statute.  Neither Tenant nor any person claiming
through or under Tenant, or by reason of any statute or order of court, shall
thereafter be entitled to possession of the premises demised but shall
forthwith quit and surrender the premises. 
If this lease shall be assigned in accordance with its terms, the
provisions of this Article 16 shall be applicable only to the party then
owning Tenant’s interest in this lease.

 

                (b)           It is stipulated and agreed that in the event of the
termination of this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisions of this lease to the contrary, be entitled
to recover from Tenant as and for liquidated damages an amount equal to the
difference between the rental reserved hereunder for the unexpired portion of
the term demised and the fair and reasonable rental value of the demised
premises for the same period.  In the
computation of such damages the difference between any installment of rent
becoming due hereunder after the date of termination and the fair and
reasonable rental value of 

 

 

 

11

 

the
demised premises for the period for which such installment was payable shall be
discounted to the date of termination at the rate of four percent (4%) per
annum.  If such premises or any part
thereof be relet by the Owner for the unexpired term of said lease, or any part
thereof, before presentation of proof of such liquidated damages to any court,
commission or tribunal, the amount of rent reserved upon such reletting shall
be deemed to be the fair and reasonable rental value for the part or the whole
of the premises to re-let during the term of the re-letting.  Nothing herein contained shall limit or
prejudice the right of the owner to prove for and obtain as liquidated damages
by reason of such termination, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing the
proceeding in which, such damages are to be proved, whether or not such amount
be greater, equal in, or less than the amount of the difference referred to
above.

 

Default:

 

17.           (1)  If tenant defaults in
fulfilling any of the covenants of this lease other than the covenants for the
payment of rent or additional rent; or if the demised premises becomes vacant
or deserted “of if this lease be rejected under §235 of Title 11 of the U.S.
Code (bankruptcy code)”; or if any execution or attachment shall be issued
against Tenant or any of Tenant’s property whereupon the demised premises shall
be taken or occupied by someone other than Tenant; or if Tenant shall make
default with respect to any other lease between Owner and Tenant; or if Tenant
shall have failed, after five (5) days written notice, to redeposit with
Owner any portion of the security deposited hereunder which Owner has applied
to the payment of any rent and additional rent due and payable hereunder or
failed to move into or take possession of the premises within thirty (30) days
after the commencement of the term of this lease, of which fact Owner shall be
the sole judge; then in any one or more of such events, upon Owner serving a
written fifteen (15) days notice upon Tenant specifying the nature of said
default and upon the expiration of said fifteen (15) days, if Tenant shall have
failed to comply with or remedy such default, or if the said default or
omission complained of shall be of a nature that the same cannot be completely
cured or remedied within said fifteen (15) day period, and if tenant shall not have
diligently commenced during such default within such fifteen (15) day period,
and shall not thereafter with reasonable diligence and in good faith, proceed
to remedy or cure such default, then Owner may serve a written five (5) days’
notice of cancellation of this lease upon Tenant, and upon the expiration of
said five (5) days this lease and the term thereunder shall end and expire
as fully and completely as if the expiration of such five (5) day period
were the day herein definitely fixed for the end and expiration of this lease
and the term thereof and Tenant shall then quit and surrender the demised
premises to Owner but Tenant shall remain liable as hereinafter provided.

 

                (2)           If the notice provided for in (1) hereof shall have
been given, and the term shall expire as aforesaid; or if Tenant shall make
default in the payment of the rent reserved herein or any item of additional
rent herein mentioned or any part of either or in making any other payment
herein required; then and in any of such events Owner may without notice,
re-enter the demised premises either by force or otherwise, and dispossess
Tenant by summary proceedings or otherwise, and the legal representative of
Tenant or other occupant of demised premises and remove their effects and hold the
premises as if this lease had not been made, and Tenant hereby waives the
service of notice of intention to re-enter or to institute legal proceedings to
that end.  If Tenant shall make default
hereunder prior to the date fixed as the commencement of any 

 

 

 

12

 

renewal
or extension of this lease, Owner may cancel and terminate such renewal or
extension agreement by written notice.

 

Remedies
of Owner and Waiver of Redemption:

 

18.           In case of any such default,
re-entry, expiration and/or dispossess by summary proceedings or otherwise, (a) the
rent, and additional rent, shall become due thereupon and be paid up to the
time of such re-entry, dispossess and/or expiration, (b) Owner may re-let
the premises or any part or parts thereof, either in the name of Owner or
otherwise, for a term or terms, which may at Owner’s option be less than or
exceed the period which would otherwise have constituted the balance of the
term of this lease and may grant concessions or free rent or charge a higher
rental than that in this lease, (c) Tenant or the legal representatives of
Tenant shall also pay Owner as liquidated damages for the failure of Tenant to
observe and perform said Tenant’s covenants herein contained, any deficiency
between the rent hereby reserved and or covenanted to be paid and the net
amount, if any, of the rents collected on account of the subsequent lease or
leases of the demised premises for each month of the period which would
otherwise have constituted the balance of the term of this lease.  The failure of Owner to re-let the premises
or any part or parts thereof shall not release or affect Tenant’s liability for
damages.  In computing such liquidated
damages there shall be added to the said deficiency such expenses as Owner may
incur in connection with re-letting, such as legal expenses, reasonable
attorney’s fees, brokerage, advertising and for keeping the demised premises in
good order or for preparing the same for re-letting.  Any such liquidated damages shall be paid in
monthly installments by Tenant on the rent day specified in this lease and any
suit brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Owner to collect the deficiency for any
subsequent month by a similar proceeding. 
Owner, in putting the demised premises in good order or preparing the
same for re-rental may, at Owner’s option, make such alterations, repairs,
replacements, and/or decorations in the demised premises as Owner, in Owner’s
sole judgment, considers advisable and necessary for the purpose of re-letting
the demised premises, and the making of such alterations, repairs,
replacements, and/or decorations shall not operate or be construed to release
Tenant from liability hereunder as aforesaid. 
Owner shall in no event be liable in any way whatsoever for failure to
re-let the demised premises, or in the event that the demised premises are
re-let, for failure to collect the rent thereof under such re-letting, and in
no event shall Tenant be entitled to receive any excess, if any, of such net
rents collected over the sums payable by Tenant to Owner hereunder.  In the event of a breach or threatened breach
by Tenant of any of the covenants or provisions hereof, Owner shall have the right
of injunction and the right to invoke any remedy allowed at law or in equity as
if re-entry, summary proceedings and other remedies were not herein provided
for.  Mention in this lease of any
particular remedy, shall not preclude Owner from any other remedy, in law or in
equity.  Tenant hereby expressly waives
any and all rights of redemption granted by or under any present or future
laws.

 

Fees
and Expenses:

 

19.           If Tenant shall default in the
observance or performance of any term or covenant on Tenant’s part to be
observed or performed under or by virtue of any of the terms or provisions in
any articles of this lease, after notice if required and upon expiration of any
applicable grace 

 

 

 

13

 

period
if any, (except in an emergency), then, unless otherwise provided elsewhere in
this lease, Owner may immediately or at any time thereafter and without notice
perform the obligation of Tenant thereunder. 
If Owner, in connection with the foregoing or in connection with any
default by Tenant in the covenant to pay rent hereunder, makes any expenditures
or incurs any obligations for the payment of money, including but not limited
to reasonable attorney’s fees, in instituting, prosecuting or defending any
action or proceedings, and prevails in any such action or proceeding, then
Tenant will reimburse Owner for such sums so paid or obligations incurred with
interest and costs.  The foregoing
expenses incurred by reason of Tenant’s default shall be deemed to be additional
rent hereunder and shall be paid by Tenant to Owner within ten (10) days
of rendition of any bill or statement to Tenant therefor.  If Tenant’s lease term shall have expired at
the time of making of such expenditures or incurring of such obligations, such
sums shall be recoverable by Owner as damages.

 

Building
Alterations and Management:

 

20.           Owner shall have the right at any
time without the same constituting an eviction and without incurring liability
to Tenant therefor to change the arrangement and or location of public
entrances, passageways, doors, doorways, corridors, elevators, stairs, toilets
or other public parts of the building and to change the name, number or
designation by which the building may be known. 
There shall be no allowance to Tenant for diminution of rental value and
no liability on the part of Owner by reason of inconvenience, annoyance or
injury to business arising from Owner or other Tenant making any repairs in the
building or any such alterations, additions and improvements.  Furthermore, Tenant shall not have any claim
against Owner by reason of Owner’s imposition of any controls of the manner of
access to the building by Tenant’s social or business visitors as the Owner may
deem necessary for the security of the building and its occupants.

 

No
Representations by Owner:

 

21.           Neither Owner nor Owner’s agents have
made any representations or promises with respect to the physical
condition of the building, the land upon which it is erected or the
demised premises, the rents, leases, expenses of operation or any other
matter or thing affecting or related to the demised premises or the
building except as herein expressly set forth and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth in the provisions of this lease.  Tenant
has inspected the building and the demised premises and is thoroughly
acquainted with their condition and agrees to take the same “as is” on the date
possession is tendered and acknowledges that the taking of possession of the
demised premises by Tenant shall be conclusive evidence that the said premises
and the building of which the same form a part were in good and
satisfactory condition at the time such possession was so taken, except as
to latent defects.  All understandings and agreements heretofore made
between the parties hereto are merged in this contract, which alone fully and
completely expresses the agreement between Owner and Tenant and any executory
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of it in whole or in part, unless such executory
agreement is in writing and  signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.

 

 

 

14

 

End of
Term:

 

22.           Upon the expiration or other
termination of the term of this lease, Tenant shall quit and surrender
to Owner the demised premises, broom clean, in good order and
condition, ordinary wear and damages which Tenant is not required to
repair as provided elsewhere in this lease excepted, and Tenant shall remove
all its property from the demised premises.  Tenant’s obligation to
observe or perform this covenant shall survive the expiration or other termination
of this lease.  If the last day of the term of this Lease or any renewal
thereof, falls on Sunday, this lease shall expire at noon on the preceding
Saturday’s unless it be a legal holiday in which case it shall expire at noon
on the preceding business day.

 

Quiet
Enjoyment:

 

23.           Owner covenants and agrees with
Tenant that upon Tenant paying the rent and additional rent and observing and
performing all the terms, covenants and conditions, on Tenant’s past to be
observed and performed, Tenant may peaceably and quietly enjoy the
premises hereby demised, subject, nevertheless, to the term and conditions of
this lease including, but not limited to, Articles 34 hereof and to
the ground leases, underlying leases an mortgages hereinbefore mentioned.

 

Failure
of Give Possession:

 

24.           If Owner is unable to give possession
of the demised premises on the date of the commencement of the term hereof,
because of the holding-over or retention of possession of any tenant,
undertenant of occupants or if the demised premises are located in a
building being constructed, because such building has not been
sufficiently completed to make the premises ready for occupancy or because of
the fact that a certificate of occupancy has not been procured of if Owner has
not completed any work required to be performed by Owner, or for any other
reason, Owner shall not be subject to any liability for failure to give
possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the  same be construed in any
wise to extend the term of this lease, but the rent payable hereunder shall be
abated (provided Tenant is not responsible for Owner’s inability to obtain
possession or complete any work required) until after Owner shall have given Tenant
notice that Owner is able to deliver possession in the condition required by
this lease.  If permission is given to Tenant to enter into the possession
of the demised premises or to occupy premises other than the demised
premises prior to the date specified as the commencement of the term of
this lease, Tenant covenants and agrees that such possession and/or occupancy
shall be deemed to be under all the terms, covenants, conditioned and
provisions of this lease except the obligation to pay the fixed annual rent
set forth in page one of this lease. 
The provisions of this article are intended to constitute an express
provision to the contrary within the meaning of Section 223-a of the New
York Real Property Law.

 

 

 

15

 

No Waiver:

 

25.           The failure of Owner
to seek redress for violation of, or to insist upon the strict performance of
any covenant or condition of this lease or of any of the Rules of
Regulations, set forth or hereafter adopted by Owner, shall not prevent a
subsequent act which would have originally constituted a violation from having
all the force and effect or a n y original violation.  The receipt by Owner of rent with knowledge
of the breach of any covenant of this lease shall not be deemed a waiver of
such breach and no provision of this lease shall be deemed to have been waived
by Owner unless such waiver be in writing signed by Owner.  No payment by
Tenant or receipt by Owner of a lesser amount than the monthly rent herein
stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement of any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Owner may accept such check or payment without prejudice to
Owner’s right to recover the balance of such rent or pursue a n y
other remedy in this lease provided.  All checks tendered to Owner as and
for the rent of the demised premises shall be deemed payments for the
account of Tenant.  Acceptance by Owner of rent from anyone other than
Tenant shall not be deemed to operate as an attornment to Owner by the payor of
such rent or as a consent by Owner to an assignment or subletting by Tenant
of  the demised premises to such payor, or as a modification of
the provision of this lease.  No act or thing done by Owner or Owner’s
agents during the term hereby demised shall be deemed an acceptance of a
surrender of said premises and no agreement to accept such surrender shall be
valid unless in writing signed by Owner.  No employee of Owner or
Owner’s agent shall have any power to accept the keys of said premises
prior to the termination of the lease and the delivery of keys to any such
agent or employee shall not operate as a termination of the lease or surrender
of the premises.

 

Waiver
of Trial by Jury:

 

26.           It is mutually agreed by and between
Owner and Tenant that the respective parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other (except for personal injury or property
damage) on any matters whatsoever arising out of or in any way connected
with this lease, the relationship of Owner and Tenant, Tenant’s use of or
occupancy of said premises, and any emergency statutory or any other statutory
remedy.  It is further mutually agreed that in the event Owner commences
any proceeding or action for possession including a summary proceeding for
possession of the premises, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding including a counter-claim
under Article 4 except for statutory mandatory counterclaims.

 

Inability
to Perform:

 

27.           This Lease and the obligation of
Tenant to pay rent hereunder and perform all of the other covenants and
agreements hereunder on part of Tenant to be performed shall in no wise be
affected, impaired or excused because Owner is unable to fulfill any of its
obligations under this lease or to supply or is delayed in supplying any
service expressly or impliedly to be supplied or is unable to make, or is
delayed in making any repair, additions, alterations or decorations or is
unable to supply or is delayed in supplying any equipment, fixtures or other
materials if Owner is 

 

 

 

16

 

prevented
or delayed from doing so by reason of strike or labor troubles or any cause
whatsoever beyond Owner’s a sole control including, but not limited to,
government preemption or restrictions or by reason or any rule, order or
regulation of any department or subdivision thereof of any government agency or
by reason of the conditions which have been or are affected, either directly or
indirectly, by war or other emergency.

 

Bills
and Notices:

 

28.           Except as otherwise in this lease
provided, a bill statement, notice or communication which Owner may desire or
be required to give to Tenant, shall be deemed sufficiently given or rendered
if, in writing, delivered to Tenant personally or sent by registered or certified
mail addressed to Tenant at the building of which the demised premises form a
part or at the last known residence address or business address of Tenant or
left at any of the aforesaid premises addressed to Tenant, and the time of the
rendition of such bill or statement and of the giving of such notice or
communication shall be deemed to be the time when the same is delivered to
Tenant, mailed, or left at the premises as herein provided.  Any notice
by Tenant to Owner must be served by registered or certified mail
addressed to Owner at the address first hereinabove given or at such
other address as Owner shall designate by written notice.

 

Water Charges:

 

29.           If Tenant requires, uses or consumes
water for any purpose in addition to ordinary lavatory purposes (of which fact
Tenant constitutes Owner to be the sole judge) Owner may install a water meter
and thereby measure Tenant’s water consumption for all purposes.  Tenant
shall pay Owner for the cost of the meter and the cost of the installation, thereof
and throughout the duration of Tenant’s occupancy Tenant shall keep said meter
and installation equipment in good working order and repair at Tenant’s own
cost and expense in default of which Owner may cause such meter and equipment
to be replaced or repaired and collect the cost thereof from Tenant, as
additional rent.  Tenant agrees to pay for water consumed, as shown on
said meter as and when bills are rendered, and on default in making such
payment Owner may pay such charges and collect the same from Tenant, as
additional rent.  Tenant covenants and agrees to pay, as additional rent,
the sewer rent, charge or any other tax, rent, levy or charge which now or
hereafter is assessed, imposed or a lien upon the demised premises or the
realty of which they are part pursuant to law, order or regulation made or
issued in connection with the use, consumption, maintenance or supply of water,
water system or sewage or sewage connection or system.  If the building or
the demised premises or any part thereof is supplied with water through a meter
through which water is also supplied to other premises Tenant shall pay to
Owner, as additional rent, on the first day of each month, ($15.00)* of the
total meter charges as Tenant’s portion.  Independently of and in
addition to any of the remedies reserved to Owner hereinabove or elsewhere in
this lease, Owner may sue for and collect any monies to be paid by Tenant
or paid by Owner for any of the reasons or purposes hereinabove
set forth.

 

*  Article 29 which sum may from
time to time be increased by Landlord to reflect any increase in the cost of
water to Landlord or Tenant’s consumption of water.

 

 

 

17

 

Sprinklers:

 

30.           Anything elsewhere
in this lease to the contrary notwithstanding, if the New York Board of Fire
Underwriters or the New York Fire Insurance Exchange or any bureau, department
or official of the federal, state or city government recommend or require the
installation, of a sprinkler system or that any changes, modifications,
alterations, or additional sprinkler heads or other equipment be made or
supplied in an existing sprinkler system by reason of Tenant’s business, or the
location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason, or if any such sprinkler system
installations, modifications, alterations, additional sprinkler heads or other
such equipment, become necessary to prevent the imposition of a penalty or
charge against the full allowance for a sprinkler system in the fire insurance
rate set by any said Exchange or by any fire insurance company, Tenant shall,
at Tenant’s expense, promptly make such sprinkler system installations,
changes, modifications, alterations, and supply additional sprinkler heads or
other equipment as required whether the work involved shall be structural or
non-structural in nature.  Tenant shall pay to Owner as additional
rent  the sum of,* on the first day of each month during the term
of this lease, as Tenant’s portion of the contract price for sprinkler
supervisory service.

 

Elevators,
Heat, Cleaning:

 

31.           As long as Tenant is not in default
under any the covenants of this lease beyond the applicable grace period
provided in this lease for the curing of such defaults, Owner shall: (a) provide
necessary passenger elevator facilities on business days from 8 a.m. to 6 p.m.
and on Saturdays from 8 a.m. to 1 p.m.; (b) if freight elevator
service is provided, same shall be provided only on regular business days
Monday through Friday inclusive, and on those days only between the hours of 9 a.m.
and 12 noon and between 1 p.m. and 5 p.m.; (c) furnish heat,
water and other services supplied by Owner to be demised premises, when and as
required by law, on business days from 8 a.m. to 6 p.m. and on
Saturdays from 8 a.m. to 1 p.m.; (d) clean the public halls
and public portion of the building which are used in common by all
tenants.  Tenant shall at Tenant’s
expense, keep the demised premises, including the windows, clean and in order,
to the reasonable satisfaction of Owner, and for that purpose shall employ the
person or persons, or corporation approved by Owner.  Tenant shall pay to Owner the cost of removal
of any of Tenant’s refuse and rubbish from the building.  Bills for the same shall be rendered by Owner
to Tenant at such time as Owner may elect and shall be due and payable
hereunder, and the amount of such bills shall be deemed to be, and be paid as,
additional rent.  Tenant shall, however,
have the option of independently contracting for the removal of such rubbish
and refuse in the event that Tenant does not wish to have same done by
employees of Owner.  Under such
circumstances, however, the removal of such refuse and rubbish by other shall
be subject to such rules and regulations as in the judgment of Owner, are
necessary for the proper operations of the buildings.  Owner reserves the right to stop service of
the heating, plumbing and electric systems, when necessary, by reason of
accident, or emergency, or for repairs, alterations, replacements or
improvements, in the judgment of Owner desirable or necessary to be made, until
said repairs, alterations, replacement or improvements, in the judgment of
Owner desirable or necessary to be made, until said repairs, alterations
replacement or improvement shall have been completed.  If the building of which the demised premises
are a part supplies manually operated elevator 

 

*
Article 30: 12% of the Landlord’s costs therefor.

 

 

 

18

 

service,
Owner may proceed diligently with alterations necessary to substitute automatic
control elevator service without in any way affecting the obligations of Tenant
hereunder.

 

Security

 

32.           Tenant has deposited with Owner the
sum of $20,399.85 as security for the faithful performance and
observance by Tenant of the terms, provisions and conditions of this lease; it
is agreed that in the event Tenant defaults in respect of any of the terms,
provisions and conditions of this lease, including, but not limited, the
payment of rent and additional rent, Owner may use , apply or retain the whole
or any part of the security so deposited to the extent required for the payment
of any rent and additional rent or any other sum as to which Tenant is in
default or for any sum which default in respect of any of the terms, covenants
and conditions of this lease, including but no limited to, any damages or
deficiency in the reletting of the premises, whether such damages or deficiency
accrued before or after summary proceedings or other re-entry by Owner.  In the event that Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants and conditions
of this lease, the security shall be returned to Tenant after the date fixed as
the end of the Lease and after delivery of entire possession of the demised
premises to Owner.  In the event of a
sale of the land and building or leasing of the building, of which the demised
premises form a part, Owner shall have the right to transfer the security to
the vendee or lessee and Owner shall thereupon be released by Tenant from all
liability for the return of such security, and it is agreed that the provisions
hereof shall apply to every transfer or assignment made of the security to a
new Owner.  Tenant further covenants that
it will not assign or encumber or attempt to assign or encumber the monies
deposited herein as security that neither Owner nor its successors or assigns
shall be found by any such assignment, encumbrance, attempted assignment or
attempted encumbrance.  See Paragraph “69th”
in Rider.

 

Captions

 

33.           The Captions are inserted only
as  a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.

 

Definitions

 

34.           The term “Owner” as used in this
lease means only the owner of the fee or of the leasehold of the building, or
the mortgages in possession, for the time being of the land and building (or
the owner of a lease of the building  or
of the land and building) of which the demised premises form a part, so that in
the event of any sale or sales of said land and building or of said lease, or
in the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and construed without
further agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the said lessee of the
building, or of the land and building, that the purchase or the lessee of the
building has assumed and agreed to carry out any and all covenants and
obligations of Owner hereunder.  The
words “re-enter” and “re-entry” as used in this lease are not restricted to
their technical legal meaning.  The term “rent”
includes the annual rental rate whether so expressed or expressed in monthly
installments, and “additional rent.”  “Additional
rent” means all sums 

 

 

 

19

 

which
shall be due to Owner from Tenant under this lease, in addition to the annual
rental rate.  The term “business days” as
used in this lease, shall exclude Saturdays, Sundays and all days observed by
the State or Federal Government as legal holidays and those designated as
holidays by the applicable building service union employees service contract or
by the applicable Operating Engineers contract with respect to IIVAC
service.  Wherever it is expressly provided
in this lease that consent shall not be unreasonably withheld, such consent
shall not be  unreasonably withheld, such consent shall not be
unreasonably delayed.

 

Adjacent
Excavation Shoring

 

35.           If an excavation shall be made upon
land adjacent to the demised premises, or shall be authorized to be made,
Tenant shall afford to the person causing or authorized to cause such
excavation, license to enter upon the demised premises for the purpose of doing
such work as said person shall deem necessary to preserve the wall of the
building of which demised premises form a part from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Owner, or diminution or abatement of rent.

 

Rules and
Regulations

 

36.           Tenant and Tenant’s servants,
employees, agents, visitors and licensees shall observe faithfully, and comply
strictly with, the Rules and Regulations as Owner or Owners’ agents may
from time to time adopt.  Notice of any
additional rules or regulation shall be given in such manner as Owner may
elect.  In case Tenant disputes the
reasonableness of any additional Rule or Regulation hereafter made or
adopted by Owner or Owner’s agents, the parties hereto agree to submit the
questions of the reasonableness of such Rule or Regulation for decision to
the New York office of  the American
Arbitration Association, whose determination shall be final and conclusive upon
the parties hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant’s part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Owner within fifteen (15) days
after the giving of notice thereof. 
Nothing in this lease contained shall be construed to impose upon Owner
any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease, as against any other tenant and
Owner shall not be liable to Tenant for violation of the same by any other
tenant, its servants, employees, agents, visitors or licensees.

 

Glass

 

37.           Owner shall replace, at the expense
of the Tenant, any and all plate and other glass damaged or broken from any
cause whatsoever in and about the demised premises.  Owner may insure, and keep insured, at Tenant’s
expense, all plate and other glass in the demised premises for and in the name
of Owner.  Bills for the premiums
therefore shall be rendered by Owner to Tenant at such times as Owner may
elect, and shall be due from, and payable by, Tenant when rendered, and the
amount thereof shall be deemed to be, and be paid, as additional rent.

 

 

 

20

 

Estoppel Certificate

 

38.           Tenant, at any time,
and from time to time, upon at least 10 days’ prior notice by Owner, shall
execute, acknowledge and deliver to Owner, and/or to any other person, firm or
corporation specified by Owner, a statement certifying that this Lease is
unmodified in full force and effect (or, if there have been modifications, that
the same is in full force and effect as modified and stating the modification),
stating the dates to which the rent and additional rent have been paid, and
stating whether or not there exists any default by Owner under this Lease, and,
if so, specifying each such default.

 

Directory
Board Listing

 

39.           If, at the request of and as
accommodation to Tenant, Owner shall place upon the directory board in the
lobby of the building, one or more names of person other than Tenant, such
directory board listing shall not be construed as the consent by Owner to an
assignment or subletting by Tenant to such person or persons.

 

Successors
and Assigns

 

40.           The covenants, conditions and
agreements contained in this lease shall bind and inure to the benefit of Owner
and Tenant and their respective heirs, distributors, executors, administrators,
successors, and except as otherwise provided in this lease, their assigns.  Tenant shall look only to Owner’s estate and
interest in the land and building for the satisfaction of Tenant’s remedies for
the collection of  a judgment (or any
partner, member, officer or director thereof, disclosed or undisclosed), shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant’s remedies under or with respect to this lease, the
relationship of Owner and Tenant hereunder, or Tenant’s use and occupancy of
the demised premises.

 

Space to be filled in or
deleted.

 

SEE RIDER
CONTAINING PARAGRAPHS 41st - 69th AND SCHEDULES A-3
ANNEXED HERETO AND MADE A PART HEREOF

 

In
Witness Whereof,
Owner and Tenant have respectively signed and sealed this lease as of the day
and year first above written.

 

	
   

  	
   

  	
   

  	
   

  	
  LANDLORD:

  	
   

  	
  (CORP. SEAL)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness for Owner:

  	
   

  	
   

  	
   

  	
  LONG ISLAND INDUSTRIAL
  GROUP ONE LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  BY:

  	
  /S/

  	
  [L.S.]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  TENANT:

  	
  /S/

  	
  (CORP. SEAL)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness for Tenant:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  AMERICAN DEFENSE
  SYSTEMS, INC.

  	
  [L.S.]

  

 

 

 

21

 

Exhibit 10.1

 

RIDER TO LOFT LEASE BETWEEN

 

	
  LONG ISLAND INDUSTRIAL GROUP ONE LLC,

  	
   

  	
  AS LANDLORD

  
	
   

  	
   

  	
   

  
	
  AND

  
	
   

  	
   

  	
   

  
	
  AMERICAN DEFENSE SYSTEMS INC.,

  	
   

  	
  AS TENANT

  

 

 

41st.        RIDER CONTROLS:

 

In
case of a conflict between the provisions of this rider, and the printed provisions
of this lease, the provisions of this rider shall prevail.

 

42nd.                   ADDITIONAL RENT/OPERATING
EXPENSES REIMBURSEMENT AMOUNTS:

 

(a)           Any sums of money required to be paid
under this lease by Tenant in addition to the rent herein provided, shall be
deemed “additional rent due and payable.” It shall be paid after demand
therefore with the rent next due or as may be otherwise provided herein. Such
additional rent shall be deemed to be and shall constitute rent hereunder and
shall be collectible in the same manner and with the same remedies as if they
had been rents originally reserved herein. Tenant’s obligation to pay
additional rent shall survive the earlier termination and/or expiration of the
term of this lease. If Landlord receives from Tenant any payment less than the
sum of the annual rental rate, additional rent, and other charges then due and
owing, Landlord, in its sole discretion, may allocate such payment in whole or
in part to any annual rental rate, any additional rent, and/or other charge or
to any combination thereof. Landlord’s failure to deliver to Tenant a statement
showing Tenant liability for additional rent for any portion of the term of
this lease during the term of thin lease shall neither prejudice or waive
Landlord’s right to deliver any such statement for a subsequent period or to
include in such subsequent period a previous period.

 

(b)           For the purposes of this lease:

 

(i)                                     The term “Operating Year”
shall mean each calendar year which shall include any part of the term of this
lease.

 

(ii)                                  The term “ Common Area
Maintenance Expenses” shall mean all costs and expenses paid or incurred by
Landlord, or for which Landlord is obligated, during each Operating Year, with
respect to the repair, replacement, restoration, maintenance and operation of
the land and building of which the demised premises forms a part (sometimes
hereinafter referred to as the “Property”), including, without limitation, all
areas (“Common Areas”) of the Property that are available for the common use of
the tenants of the Property and that are not leased to any tenant of the
Property (e.g., parking areas, driveways, sidewalks, loading areas, access
roads, corridors, landscaping and planted areas). The Common Area Maintenance
Expenses shall include, but are not limited to, costs and expenses of:
re-striping of parking areas; lighting of exterior 

 

Please Initial

Landlord  /S/ 
Tenant  /S/

 

 

Common
Areas; operation, repair, maintenance and replacement of any landscaping,
curbs, gutters, sidewalks, fencing and drainage; all charges for utilities and
services furnished to the Property to the extent not separately metered, billed
or furnished; all coats, wages and benefits of employees or other agents of
Landlord or any managing agent (“Agent”) retained by Landlord to manage the
Property engaged in the operation, maintenance or rendition of other services
to or for the Property; uniforms and working clothes for maintenance,
administrative and any security personnel and the cleaning thereof; association
fees and dues; outside area cleanup and lot sweeping (other than snow removal);
management fees (which management entities may be affiliates of Landlord); and
there shall also be added to the foregoing costs and expenses an amount equal
to ten percent (10%) of the total of all of the forgoing costs and expenses as
Landlord’s administrative fee. Any additional rent billed Tenant under
paragraphs 42nd (c) (ii) and (iii) and 44th below shall be
excluded from “Common Area Maintenance Expenses”:

 

(iii)                               The term “Tenant’s Share”
shall mean twelve Percent (12.0%).

 

(c)           In addition to the rent herein
provided, Tenant agrees to pay to Landlord each Operating Year, in the manner
herein provided, as additional rent.

 

(i)                                     a “minimum common area
maintenance charge” of $7,250.00 per annum, as Tenant’s share of Common Area
Maintenance Expenses (proportionately reduced for a partial Operating Year).
Commencing January 1, 2005, and each January 1, thereafter, through
the expiration of the term of this lease, the minimum common area maintenance
charge payable by Tenant hereunder as Tenant’s share of Common Area Maintenance
Expenses, shall increase by five percent (5.0%) per Operating Year over the
prior Operating Year’s charge hereunder;

 

(ii)                                  a “minimum snow removal
charge” of $1,450.00 per annum to cover Tenant’s share of the estimated cost of
snow removal (proportionately reduced for a partial Operating Year); and

 

(iii)                               a “minimum insurance charge”
of $2,175.00 per annum as Tenant’s portion of the cost of all liability,
casualty, property and other insurance maintained by Landlord on or with
respect to the Property (proportionately reduced for a partial Operating Year),
which charge may from time to time be increased by Landlord to reflect any
increase in Landlords costs of maintaining such insurance.

 

Tenant’s
share of such Common Area Maintenance Expenses, the estimated cost of snow
removal and the minimum insurance charge shall each be paid in advance, in
equal monthly installments, in the same manner and at the same time as the
monthly installments of rent are payable hereunder without deduction, offset or
diminution of any kind. Notwithstanding the above, if Landlord at any time
determines that Tenant’s Share of Common Area Maintenance 

 

 

23

 

Expenses
actually being paid or incurred by Landlord exceeds the minimum common area
maintenance charge then payable by Tenant pursuant to paragraph 42nd (c) (i) with
respect to any Operating Year, then Tenant, following a request from Landlord,
shall commence to pay with the next monthly installment of rent due an amount
sufficient to result in Tenant’s paying its full Tenant’s Share of Common Area
Maintenance Expenses for such Operating Year as computed by Landlord on the
basis of Landlord’s good faith estimate of such Common Area Maintenance
Expenses. If the total amount paid by Tenant under this paragraph 42nd (c) on
account of Common Area Maintenance Expenses for any operating Year shall be
more or less than the actual amount due from Tenant for such Operating Year,
Landlord shall furnish Tenant with a statement of the actual amount (“Actual
Amount”) of Tenant’s Share of such Common Area Maintenance Expenses for such
period which statement shall be in reasonable detail, provided, however,
Landlord shall be permitted to describe areas of expenditure by category and
shall not be obligated to enumerate each specific expenditure. At the time any
such statement is furnished to Tenant, appropriate adjustment shall then be
made between Landlord and Tenant as follows: if Tenant has paid on account of
such Operating Year more than the Actual Amount, Landlord shall credit such
overpayment to Tenant against future payments of the minimum common area
maintenance charge; and if Tenant has paid less than the Actual Amount, Tenant
shall pay the difference to Landlord within ten (10) days after the
furnishing of such statement to Tenant, provided, however, in no event shall
the amount payable by Tenant as Tenant’s share of Common Area Maintenance
Expenses pursuant to paragraph 42nd (c) (ii) for a particular
Operating Year ever be less than the minimum common area maintenance charge for
such Operating Year as determined pursuant to said paragraph 42nd (c) (i).
Likewise, Landlord may at any time and from time to time furnish to Tenant a
revised estimate of Tenant’s Share of the estimated cost of snow removal for a
particular Operating Year and Tenant’s payment therefor for such Operating Year
shall be adjusted and paid or credited, as applicable, in the same manner as
provided herein with respect to Tenant’s share of Common Area Maintenance
Expenses; provided, however, in no event shall the amount payable by Tenant for
snow removal pursuant to paragraph 42nd (c) (ii) for a particular
Operating Year ever be less than the minimum snow removal charge set forth
therein. The minimum snow removal charge notwithstanding, Tenant (not Landlord)
is responsible for snow removal from, and the keeping free of ice and snow, the
sidewalk and sidewalk areas in front of and adjacent to the Tenant’s demised
premises.

 

(d)           If, at any time during the term of
this lease, Landlord expends any sums for alterations, improvements or work to
or with respect to the Property which are required to be made pursuant to any
federal, state or local law, rule or regulation, including, without
limitation any Governmental Law (as such term is defined in paragraph 51st
hereof) or any modification or amendment thereto, Tenant shall pay to Landlord,
as additional rent, Tenant’s Share of such cost(s) within ten (10) days
after demand therefor. If, however, the cost of such alteration or improvement
or work is one which is required to be amortized over a period of time pursuant
to applicable governmental regulations, Tenant shall pay to Landlord, as
additional rent, during each year in which occurs any part of this lease term,
Tenant’s Share of the reasonable annual amortization of the cost of the
alteration or improvement made or work performed. For the purposes of this
subparagraph (d), the cost of any alteration or improvement made or work
performed shall be deemed to include the cost of preparing any necessary plans
and the fees for filing such plans.

 

 

 

24

 

43rd.                      LATE CHARGE/RETURNED CHECK
CHARGE:

 

(a)           Tenant shall pay a late charge of 4%
of any payment of rent or additional rent or any other sum of money or payment
not received by Landlord within ten (10) days after the same shall become
due as compensation for Landlord’s additional administrative expenses relating
to such late payment. Such late charge shall be payable as additional rent on
demand.

 

(b)           If any check tendered by Tenant to
Landlord is returned by the bank for non-payment for any reason whatsoever,
there will be an administrative charge of $50.00 per check, each time it is
returned which amount shall be deemed additional rent.

 

(c)           The provisions of this paragraph 43rd
are in addition to the other rights and remedies available to Landlord for
non-payment of rent or additional rent.

 

44th.       TAXES:

 

(a)           In the event that the Real Estate
Taxes payable with respect to the building and the land on which it is located
for any tax year in which this lease shall be in effect, shall be greater than
the Real Estate Taxes for the base year, the Tenant shall pay to Landlord on
the first day of the month after billing by Landlord to Tenant, as additional
rent, an amount equal to Tenant’s Share of the difference between the amount of
such tax or installment for the current year and the corresponding tax or
installment paid for the base year. Any increase in Real Estate Taxes due to an
increase in the assessed valuation of the land or building of which the demised
premises forms a part by reason of improvements made by a tenant shall be borne
entirely by such tenant. Any increase in Real Estate Taxes due to an increase
in the assessed valuation of the land or building by reason of improvements
made by Tenant shall be borne by Tenant and paid by Tenant upon demand by
Landlord. The base year for this tax increase computation shall be the Fiscal
Year 2004/1005 for School Taxes and the calendar year 2004 for General/Town
Taxes.

 

(b)           Real Estate Taxes shall mean any and
all taxes, assessments, sewer and water rents, rates and charges, license fees,
impositions, liens, fines, penalties and all other municipal and governmental
charges of any nature whatsoever(except only inheritance and estate taxes and
income taxes not herein expressly agreed to be paid by Tenant), whether general
or special, ordinary or extraordinary foreseen or unforeseen which may
presently or in the future become due or payable or which may be levied,
assessed or imposed by any taxing authority on or with respect to all or any
part of the land and building of which the demised premises forms a part, or
upon the estate or interest of Landlord in the land or building of which the
demised premises forms a part, or any part thereof, including without
limitation, all taxes and assessments for improving any streets, alleys,
sidewalks, sidewalk vaults and alley vaults, if any.

 

45th.                      INSURANCE:

 

(a)           Tenant shall, at its sole cost and
expense, at all times during the term of this lease (and any extensions
thereof) obtain and pay for and maintain in full force and effect the insurance
policy or policies described in Schedule D attached hereto. Certified copies of
all insurance policies required pursuant to this lease (or certificates
thereof, in form and substance acceptable to Landlord), shall be delivered to
Landlord not less than ten (10) days prior to the 

 

 

 

25

 

commencement
of the term of this lease. Tenant shall provide Landlord with evidence that all
such insurance policies have the coverages provided herein and Tenant shall
provide Landlord with an endorsement from the insurance company providing the
insurance indicating that Landlord, Agent, and at Landlord’s request, any
Senior Interest Holder (as hereinafter defined in paragraph 65th), have been
named as additional insured(s) covered by such policies. If Tenant fails
to submit such policies or certificates to Landlord within the specified time,
or otherwise fails to obtain and maintain insurance coverages in accordance
with this paragraph, then Landlord, at Landlord’s sole option, may, but shall
not be obligated to, procure such insurance on behalf of, and at the expense
of, Tenant. Tenant shall reimburse Landlord for such amounts upon demand, it
being understood that any such sums for which Tenant is required to reimburse
Landlord shall constitute additional rent.

 

(b)           Tenant is hereby notified that until
further notice from Landlord, the name and address of the holder of the
required insurance certificate and all additional insureds/loss payees are set
forth on Schedule “E”.

 

(c)           The parties hereto (a) shall use
all reasonable efforts to procure an appropriate clause in, or endorsement on,
any all-risk insurance covering the demised premises, the Property and personal
property, fixtures and equipment located thereon or therein, pursuant to which
the insurance companies issuing same waive subrogation or consent to a waiver
of right of recovery, and (b) subject to obtaining such clause or
endorsement of waiver of subrogation or consent to a waiver of right of
recovery, hereby agree not to make any claim against or seek to recover from
the other for any loss or damage to its property or the property of others
resulting from fire or other hazards covered by such fire and extended coverage
insurance; provided, however, that the release, discharge,
exoneration and covenant not to sue herein contained shall be limited by and
coextensive with the terms and provisions of the waiver of subrogation clause
or endorsement or clause or endorsement consenting to a waiver of right of
recovery. If either party shall be unable to obtain the inclusion of such
waiver of subrogation or consent to waiver clause even with the payment of any
additional premium, then such party shall attempt to name the other party as an
additional insured but not a loss payee) under the policy. Tenant acknowledges
that Landlord shall not carry insurance on, and shall not be responsible for
damage, to Tenant’s Property (as hereinafter defined in Schedule D), that
Landlord may not carry insurance on, and shall not be responsible for damage
to, any Alterations, and that Landlord shall not carry insurance against, or be
responsible for any loss suffered by Tenant due to, interruption of Tenant’s
business.

 

46th.                      TENANT TO PROVIDE FINANCIAL
STATEMENT:

 

Tenant
agrees that upon request by Landlord or Agent it will furnish to Landlord and
to prospective or current mortgagees of the building, and/or land of which it
forms a part, such latest available financial statement as such current or
prospective mortgagees may request.

 

47th.                      BROKER:

 

(a)           Tenant represents and warrants that
no broker other than Sutton & Edwards, Inc., which is acting as
Landlord’s leasing agent and Industrial Real Properties was involved in this
leasing. Tenant agrees to indemnify, defend, and hold harmless Landlord for any
and all costs, expenses, and liability including legal fees incurred by
Landlord as a result of a breach of the 

 

 

 

26

 

aforementioned
warranty or any inaccuracy or alleged inaccuracy of the above representation.
Landlord agrees to pay the brokers the brokerage commission earned pursuant to
a separate agreement with said Brokers.

 

(b)           If any lien shall be filed against
the demised premises, or the building of which same is a part, by any broker
based upon dealings with Tenant, such lien shall be discharged by Tenant within
ten (10) days thereafter, at Tenant’s expense, by payment or by filing the
bond required by law.

 

(c)           The obligations of Tenant under this
paragraph 47th shall survive the expiration or sooner termination of this
lease.

 

48th.                      TENANT’S REPAIRS/MAINTENANCE:

 

(a)           TENANT REPAIRS:

 

(i)                                     Tenant agrees that, from and
after the commencement date of the term of this lease and until the end of the
term, it will, at its expense, keep and maintain in good order, condition and
repair (whether extraordinary, foreseen or unforeseen), the interior of the
demised premises and every part thereof, including but not limited to, all
heating, ventilation and air conditioning equipment (sometimes hereinafter
referred to as “HVAC Equipment”) located in or servicing the demised premises
(including the air conditioner compressor, lines and ducts which may be located
elsewhere in the building or on the land), interior plumbing up to the exterior
walls of the demised premises, including changes or additions to the sprinkler
system and interior electrical repairs, and plate glass, excluding those
repairs and replacements for which Landlord is responsible, as herein expressly
provided in paragraph 49th below. In addition, Tenant shall make all repairs
and replacements of any kind and nature necessitated by any act or neglect of
Tenant, its contractors, its servants, agents or employees. Tenant shall
maintain service contracts with contractors reasonably approved by Landlord for
the maintenance of the heating and air condition systems throughout the term of
this lease and shall provide Landlord with copies of all such contracts and
related maintenance records. If Tenant fails to maintain such service
contracts, the Landlord may, but shall not be obligated to, after not less than
ten (10) days notice obtain such service contracts at the expense of the
Tenant and the Tenant shall reimburse the Landlord promptly upon request
therefor,

 

(ii)                                  Tenant agrees that any and
all HVAC Equipment installed in the demised premises by Landlord or by or on
behalf of Tenant shall be and remain, or become, as the case may be, the sole
property of Landlord and shall remain upon and be surrendered to Landlord with
the demised premises as a part thereof at the end of the term, and may not be
removed by Tenant.

 

 

 

27

 

(iii)                               If Tenant does not maintain
or repair such elements as provided in this paragraph 48th, the Landlord may,
but shall not be obligated to, after not less than ten (10) days notice
(except in the case of emergency) make the necessary repair or cure the
defective condition at the expense of the Tenant and the Tenant shall reimburse
Landlord promptly upon request therefor which amount shall include the charge
for overhead and supervision pursuant to paragraph 48th below. The amount of
such reimbursement shall be considered additional rent upon the failure of the
Tenant to reimburse Landlord within ten (10) days of demand thereof.

 

(b)           VANDALISM:

 

Notwithstanding
any contrary provision of this lease, Tenant, at its expense, shall make any
and all repairs excluding structural repairs to the demised premises which may
be necessitated by any break-in, forcible entry or other trespass into or upon
the demised premises, regardless of whether or not such entry and damage is
caused by the negligence or fault of Tenant or occurs during or after business
hours; it being specifically agreed and understood by Tenant that Landlord
shall have no responsibility for security or for the safeguarding of Tenant’s
Property or employees, all of which shall be the responsibility of Tenant. In
addition, Landlord reserves the right to discontinue or modify, at any time,
any security system, device or procedure presently in effect or operation at
the Property, without liability to Tenant.

 

(c)           WINDOWS/OVERHEAD AND/OR LOADING DOCK
DOORS:

 

Tenant
shall, at its own cost and expense, clean and maintain, including repair or
replacement when necessary, all windows and overhead and/or loading dock doors,
if any, in or at the demised premises. Tenant shall keep and maintain insurance
for all glass in the demised premises naming Landlord as additional insured.

 

(d)           RUBBISH REMOVAL AND REFUSE PICK-UP:

 

Tenant
Shall independently contract for and provide for the removal at least biweekly
of all garbage, refuse and rubbish, at its cost and expense. Garbage and refuse
shall be kept in containers or dumpsters to be placed in an area designated by
Landlord for such purpose. Garbage storage and removal shall be subject to such
rules and regulations as, in the reasonable judgment of Landlord, are
necessary for the proper operation of the Property.

 

(e)           TENANT’S CLEANING:

 

Tenant
shall, at its cost and expense and in a manner reasonably satisfactory to
Landlord, take good care of and keep clean and free from debris and snow and
ice both the interior of the demised premises, including, without limitation,
all restrooms therein, which shall include replacement of paper goods and
sundries, and exterior area in front of the demised premises including exterior
sidewalks adjacent the demised premises. No one other than persons approved by
Landlord shall be permitted to enter the demised premises or the building of
which it forms a part for the purpose of cleaning the demised premises.

 

 

28

 

49th.                      LANDLORD’S REPAIRS:

 

During
the term of this lease, the Landlord shall make all structural repairs to the
demised premises except those which shall have been occasioned by the acts of
omission or commission of the Tenant, its agents, employees or invitees. Tenant
shall promptly give written notice to Landlord with respect to any damages to
the interior or exterior of the demised premises. Structural repairs are hereby
defined to be and limited to repairs to the roof deck, to the bearing walls and
foundation.

 

50th.                      LANDLORD’S WORK:

 

Tenant
accepts the demised premises in “as is” condition in all respects. Tenant
acknowledges that Landlord makes no representation as to the condition of the
demised premises, except as herein expressly set forth. Any work to be
performed by Tenant shall be subject to compliance with the terms and
conditions of this lease.

 

51st.                       TENANT RESTRICTIONS:

 

(a)           STORAGE/PARKING:

 

Tenant
will not, at any time, use or occupy the area outside the demised premises for
storage of materials or for the overnight parking of vehicles of any kind
without the Landlord’s prior written consent which may be arbitrarily withheld.
Furthermore, Tenant will not at any time park vehicles in any manner which will
obstruct or interfere with the ingress or egress of other vehicles or with the
use by other tenants of their respective parking and loading facilities or
areas or cause any other parking problems. In addition to Landlord’s other
rights and remedies provided in this Lease, Landlord shall have the right, at
Tenant’s expense, to have towed any vehicle which is parked or left by Tenant
or any of Tenant’s employees in violation of this paragraph 51st, without
accountability therefor.

 

(b)           Tenant shall have the right to use in
common with the other tenants in the building, parking spaces as provided by
Landlord in the parking lot for the parking of Tenant’s automobiles and those
of its employees and invitees subject to the rules and regulations now or
hereafter adopted by the Landlord. Landlord may at any time close temporarily
any parking lot or area to make repairs or changes, to prevent the acquisition
of public rights in such areas and to discourage non-tenant use, provided the
same shall not materially interfere with access to the demised premises. In
addition, Landlord may modify, from time to time, the traffic flow pattern and
layout of parking spaces and the entrances-exits to adjoining public streets or
walkways.

 

(c)           NOISE/ODORS:

 

Tenant
covenants and agrees that throughout the demised term it shall not suffer,
allow or permit any offensive or obnoxious vibration, noises, odor, or other
undesirable effect to emanate from the demised premises, to constitute a
nuisance or otherwise unreasonably interfere with the safety, comfort or
convenience of Landlord or of any other occupants of the building of which the
demised premises forms a part, and upon Landlord’s notice thereof to Tenant,
Tenant shall, within five (5) days thereof, eliminate or control same. If
any such condition is not so remedied then Landlord may at its discretion
either: (a) remedy such condition and any cost and expense 

 

 

 

29

 

incurred
by Landlord therefore shall be deemed additional rent and paid by Tenant to
Landlord together with the next installment of rent due hereunder, or (b) treat
such failure on the part of the Tenant to remedy such condition as a material
default under the provisions of this lease on the part of the Tenant hereunder,
entitling Landlord to any of its remedies, pursuant to the terms of this lease.
In no event, however, shall the Tenant make any alteration, addition or
structural installation in or to the premises or any parts thereof to remedy or
cure such default without the prior written consent of the Landlord.

 

(d)           TOXIC/HAZARDOUS WASTES:

 

(i)                                     Tenant shall not cause or permit any
Hazardous Material (as hereinafter defined) to be brought upon, kept or used in
or about the demised premises by Tenant, its agents, employees, contractors or
invitees. Tenant further covenants and agrees that it shall not discharge any
Hazardous Material in the ground or sewer disposal system. If Tenant breaches
the obligations stated in the preceding sentences, or if the presence of
Hazardous Material on the demised premises results in contamination of the
demised premises or any other part of the building or land of which it forms a
part or if there is such a discharge, then Tenant shall (A) immediately give
Landlord written notice thereof, and (B) indemnify, defend and hold harmless
Landlord from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, diminution in value of
the demised premises or the building or land of which it forms a part, loss or
restriction on use of space in the building of land of which it forms a part,
adverse impact on marketing, sums paid in settlement of claims, attorneys’,
consultants’ and other expert fees) which arise during or after the term as a
result of such breach, contamination, or discharge. The foregoing
indemnification includes, without limitation, costs incurred in connection with
any investigation of site conditions or any clean-up, remedial, monitoring,
removal or restoration work required by any federal, state or local
governmental agency or political subdivision, as well as costs incurred in
connection with any follow-up or subsequent testing, investigation, monitoring
and/or reporting. Without limiting the foregoing, if the presence of any
Hazardous Material within the demised premises caused or permitted by Tenant
results in any contamination of the demised premises or any other part of the
building or land of which it forms a part, Tenant shall promptly take all
actions at its sole expense as are necessary to return the demised premises or
any other part of the building or land of which it forms a part to the
condition existing prior to the introduction of any such Hazardous Material.

(ii)                                  As used herein, the term “Hazardous
Material” mean: (A) asbestos, petroleum products, and polychlorinated
biphenyls, and (B) hazardous or toxic materials, wastes and substances which
are defined, determined or identified as such pursuant to all present and
future federal, state or local laws, rules or regulations and judicial or
administrative interpretations thereof (collectively “Governmental Laws”).

 

 

30

 

(iii)                               Landlord and its agents shall have the right, but not
the duty, to inspect the demised premises at any time to determine whether
Tenant is complying with the terms of this Article. If Tenant is not in
compliance with the provisions of this Article, Landlord shall have the right
to immediately enter upon the demised premises to remedy said noncompliance at
Tenant’s expense and any expense incurred by Landlord shall be paid by Tenant
upon demand and shall be deemed additional rent. Landlord shall use reasonable
efforts to minimize interference with Tenant’s business, but shall not be liable
for any interference caused thereby and Landlord shall not be required to
perform any such work on an overtime, after-hours or premium pay basis.

(iv)                              The obligations of Tenant under this
clause(d) of paragraph 51st shall survive the expiration or sooner termination
of this lease.

52nd.                   LIMITATION OF LANDLORD’S LIABILITY:

(a)           Tenant shall look solely to the then
interest of Landlord in the building and land of which it forms a part or to
the then interest of the owner therein (if Landlord is the agent of such owner)
for the satisfaction of any remedy of Tenant for Landlord’s or such owner’s
failure to perform any of the obligations of the Landlord hereunder. Neither
Landlord nor any disclosed or undisclosed principal of Landlord (or officer,
director, stockholder, partner or agent of Landlord or of any such principal)
shall have any personal liability for any such failure under this lease or
otherwise.

(b)           There shall be no merger of
Landlord’s estate in the demised premises with Tenant’s estate therein by
reason of the fact that the same individual, partnership, firm or corporation
or their entity may acquire or own such estates directly or indirectly. No such
merger shall occur until all individuals, partnerships, firms, corporations and
other entities having any interest in such estates, including any mortgagee,
join in a written instrument effecting such merger and duly record it.

53rd.                      UTILITIES: 

(a)           Upon the execution hereof, Tenant
must make immediate application to the appropriate utility company for electric
and/or gas service and Tenant shall forthwith deliver to Landlord a true copy
of such application with proof of payment of any deposit required by such
utility company for electric service and gas service.

(b)           Notwithstanding anything previously
written anywhere in this lease, Tenant shall bear the cost and expense of:

(i)                                     all electricity in or for their demised
premises.

(ii)                                  gas service and/or fuel in or for their
demised premises.

 

 

31

54th.                      TENANT’S FAILURE TO VACATE:

In the event of any
holding-over by Tenant after expiration or termination of this lease without
the consent of Landlord, Tenant shall:

(a)           pay as holdover rental for each month
of the holdover tenancy an amount equal to the greater of (i) the fair market
rental value of the demised premises for such month (as reasonably determined
by Landlord) or (ii) two hundred percent (200%) of the rent and additional rent
which Tenant was obligated to pay for the month immediately preceding the end
of the term; and

(b)           be liable to Landlord for any payment
or rent concession which Landlord may be required to make to any tenant
obtained by Landlord for all or any part of the demised premises (a “New Tenant”) in order to induce such
New Tenant not to terminate its lease by reason of the holding-over by Tenant
(including, without being limited to, any holdover expenses, rent or damages
that a New Tenant shall be responsible for), and (ii) the loss of the benefit
of the bargain if any New Tenant shall terminate its lease by reason of the
holding-over by Tenant.

No holding-over by Tenant
after the term of this lease shall operate to extend the term. In the event of
any unauthorized holding-over, Tenant shall indemnify and hold harmless
Landlord against all claims for damages by any new Tenant to whom Landlord may
have leased all or any part of the demised premises effective upon the
termination of this lease. Anything in this paragraph 54th to the contrary
notwithstanding, the acceptance of any rent paid by Tenant pursuant to this
paragraph 54th shall not preclude Landlord from commencing and prosecuting a
holdover or summary eviction proceeding, and the preceding sentence shall be
deemed to be an “agreement expressly providing otherwise” within the meaning of
Section 232-C of the Real Property Law of the State of New York and any
successor law of like import.

55th.                      ASSIGNMENT/SUBLET:

55.01       Assignment: Etc.
Subject to the terms and procedures set forth in Section 55.02, neither this
lease nor the term and estate hereby granted, nor any part hereof or thereof,
shall be assigned or otherwise transferred, and neither the demised premises
nor any part thereof shall be subleased or be encumbered in any manner by
reason of any act or omission on the part of Tenant without the prior consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed. Transfer of a controlling interest in the stock or other ownership
interests of Tenant shall be deemed to be a transfer of this lease excepting
only where such transfers of stock are effected through the “over-the-counter”
market or through any recognized stock exchange or in connection with a public
offering of shares of Tenant. No consent of Landlord to any assignment or other
transfer of this lease and the term and estate hereby granted, and no consent
by Landlord to any subletting of all or any portion of the demised premises,
shall be construed to relieve Tenant of its liability hereunder or of the
obligation to obtain such consent to any further assignment, other transfer or
subletting. Tenant may (without Landlord’s consent and without the obligation
to make payment of any excess rents to Landlord pursuant to the provisions of
Section 55.02(c) or (d) hereof and without being subject to the provisions of
Subsection 55.02(b)(i) hereof) permit (y) any corporation or other business
entity which controls, is controlled by or is under common control (and which
at all times so remains) with Tenant (a 

 

 

32

 

“Related Corporation”) or
(z) any entity which is a successor to Tenant either by a bonafide merger or
other consolidation of Tenant’s business or any entity to which all or
substantially all of Tenant’s assets or voting stock or other controlling
interests are transferred or sold (whether an asset sale or stock sale for the
entire business of Tenant) where, in each instance the resulting entity or
successor entity (a “Resulting Entity”) is at least as strong financially as
Tenant, to sublet all or part of the demised premises or take an assignment of
this Lease upon prior written notice to Landlord setting forth the name of such
Related Corporation or Resulting Entity, as the case may be, and the providing
of reasonably satisfactory evidence to Landlord that such assignee or subtenant
is a Related Corporation or Resulting Entity, as the case may be, and that such
transaction is for a valid business purpose and not principally for the purpose
of transferring this Lease. Any such subletting shall not vest in any such
Related Corporation any right or interest in this lease nor shall it or any
assignment of the Lease discharge any of Tenant’s obligations hereunder. For
purposes hereof, “control” means ownership and/or control of 50% or more of the
equitable or beneficial interest in such entity and/or control or participation
in or management of such entity.

55.02                     Assignment and Subletting Procedures.

(a)           Provided Tenant is not then or
thereafter in default in the payment of rent and/or additional rent or is
otherwise not in default under this lease, if Tenant intends to assign this
lease or to sublet the demised premises or any part thereof, Tenant shall give
Landlord notice of such intent. Tenant’s notice shall be accompanied by (i) a
certified description of all material terms of the proposed agreement between
Tenant and the proposed assignee or subtenant, (ii) a statement setting forth
in reasonable detail the identity of the proposed assignee or sublessee, the
nature of its business and its proposed use of the demised premises and (iii)
current financial information with respect to the proposed assignee or
subtenant. Tenant shall provide Landlord with any additional information or
documents requested by Landlord.

(b)           Landlord shall then have the option,
exercisable by notice to Tenant within thirty (30) days after receipt of such
additional information (or the date of Tenant’s original notice if Landlord
does not timely request additional information) to:

(i)                                     sublease the applicable space on the
terms and conditions set forth in this lease, to the extent applicable, or, in
the case of a proposed assignment or a proposed subletting for all or
substantially all of the term of this lease, to accept an assignment of this
lease, in either case as of the date so specified by Tenant (but in no event
earlier than one hundred fifty (150) days after the date of receipt by Landlord
of such notice), or

(ii)                                  permit Tenant to assign this lease or
sublet such space, subject, however, to Landlord’s prior approval of the
proposed assignee or sublessee, which approval shall not be withheld or delayed
so long as:

(A)          the use of the demised premises by
such proposed assignee or sublessee would be permitted under Article 2;

 

 

33

 

(B)           the proposed assignee or sublessee is
of sound financial condition as determined by Landlord given the obligations to
be assumed by such assignee or sublessee under this lease;

(C)           in the case of a subletting, such
subletting shall be at rent no less than (x) the rental rate then being
accepted by Landlord with respect to comparable available space in the Building
or (y) if there is no comparable available space in the Building at such time,
the fair rental value of the sublet space;

(D)          the proposed sublessee or assignee is
a reputable person or entity of good character and Landlord has been furnished
with evidence thereof;

(E)           neither the proposed subtenant or
assignee nor any one controlling, controlled by or under common control with
such proposed subtenant or assignee is then an occupant of any portion of the
Building or the Property or is a person with whom Landlord (or anyone which,
directly or indirectly, controls, is controlled by, or is under common control
with Landlord) is then negotiating to lease space in the Building or the
Property or in any other building owned or operated under a ground or
underlying lease by Landlord or any one which, directly or indirectly,
controls, is controlled by, or is under common control with Landlord;

(F)           the form of the proposed sublease or
assignment is satisfactory to Landlord;

(G)           there shall be no more than two (2)
occupants within the demised premises, including Tenant; and

(H) the proposed
subtenant shall not be (1) entitled, directly or indirectly, to diplomatic or
sovereign immunity unless effectively waived and shall be subject to the
service of process in, and the jurisdiction of the courts of the State of New
York or (2) a charitable, religious, union or other not-for-profit organization
or any tax exempt entity within the meaning of Section 168(j)(4)(A) of the
Internal Revenue Code of 1986, as amended, or any successor or substitute
statute, or rule or regulation applicable thereto (as the same may be amended).

(c)           If the aggregate amount payable as base
rent and additional rent by a subtenant under a sublease of any part of the
demised premises shall be in excess of Tenant’s Basic Cost (as hereinafter
defined) therefor at that time, then, within ten (10) days after the collection
thereof, Tenant shall pay to Landlord, as additional rent, such excess. Tenant
shall deliver to Landlord within thirty (30) days after the end of each
calendar year and within thirty (30) days after the expiration or earlier
termination of this lease a statement specifying each sublease in effect at any
time during such calendar year or partial calendar year, the number of square
feet of rentable area demised thereby, the term thereof and a computation in
reasonable detail showing the calculation of the amounts paid and payable by
Tenant to Landlord with respect to such sublease for the period covered by such
statement. “Tenant’s Basic Cost” for sublet
space at any time means the sum of (x) the portion of the base rent and
additional rent under paragraphs 42nd and 44th hereunder which is attributable
to the sublet space at such time, plus (y) the amount of any costs reasonably
incurred by Tenant in making changes in the layout and finish of the sublet
space for the subtenant amortized on a straight-line basis over the term of the
sublease plus (z) the amount of any customary brokerage commissions and legal
fees and disbursements paid by 

 

 

 

34

Tenant in connection with
the sublease amortized on a straight-line basis over the term of the sublease.

(d)           Upon any assignment of this lease
(other than an assignment to a Related Corporation or Resulting Entity)
pursuant to the terms hereof, Tenant shall pay to Landlord the Net
Consideration (as hereinafter defined) received by Tenant in respect of such
assignment or otherwise from such assignee. For purposes hereof, “Net Consideration” means all sums
paid by the assignee in consideration of such assignment minus all customary
and reasonable closing expenses (including, without limitation, customary and
reasonable legal and brokerage expenses) incurred in connection with such
assignment. “Net Consideration” shall
include any sums paid for the purchase or rental of any of Tenant’s Property
(as hereinafter defined in Schedule D), less, in the case of a sale thereof,
the then net, unamortized or undepreciated cost thereof determined on the basis
of Tenant’s Federal income tax returns.

(e)           No assignment made pursuant to this
Section 55.02 shall be valid unless, within ten (10) days after the execution
thereof, Tenant shall deliver to Landlord a duplicate original instrument of
assignment and assumption, duly executed by Tenant and by the assignee and in
form and substance reasonably satisfactory to Landlord, wherein such assignee
shall assume performance of all terms of this lease on Tenant’s part to be
performed.

(f)            Tenant shall, within ten (10) days
after the commencement of the term of a permitted sublease, give Landlord
notice of such commencement, or, in the case of permitted assignment, notice of
the effectiveness of such assignment.

(g)           If Landlord consents to a proposed
sublease or assignment and the same does not become effective within ninety
(90) days after the giving of such consent, then Tenant shall again comply with
all of the provisions and conditions of this Paragraph 55th before assigning
this lease or subletting all or any part of the demised premises.

(h)           If Landlord shall decline to consent
to any proposed assignment or sublease as permitted by this lease, or if
Landlord shall exercise its option under this Section to terminate or accept an
assignment of this lease from Tenant, Tenant hereby agrees to indemnify
Landlord against any and all liability arising from any claims that may be made
against Landlord by the proposed assignee or subtenant or by any broker, finder
or other person claiming a commission or other compensation in connection with
the proposed assignment or sublease.

55.03       Additional Subleasing
Conditions. (a) If this lease is assigned, whether or not in
violation of the terms of this lease, Landlord may collect rent from the
assignee. If the demised premises or any part thereof is sublet or used or
occupied by anybody other than Tenant, Landlord may, after default by Tenant,
collect rent from such subtenant or occupant. In either event, Landlord may
apply the net amount collected to the rents herein reserved. The consent by
Landlord to an assignment, transfer, mortgage, pledge, encumbering or
subletting pursuant to any provision of this lease shall not relieve Tenant or
any assignee or subtenant from obtaining the express prior consent of Landlord
to any other or further assignment, transfer, mortgage, pledge, encumbering or
subletting. Tenant agrees to pay to Landlord reasonable attorneys’ fees and
disbursements incurred by Landlord in connection with any proposed assignment
or subletting. Neither any assignment of this lease nor any subletting,
occupancy or use of the 

 

 

35

 

demised
premises or any part thereof by any person other than Tenant, nor any
collection of rent by Landlord from any person other than Tenant, nor any
application of any such rent as provided in this Paragraph 55th, shall be
deemed a waiver of any of the provisions of this Paragraph 55th or relieve,
impair, release or discharge Tenant of its obligation fully to perform the
terms of this lease on Tenant’s part to be performed, and Tenant shall remain
fully and primarily liable hereunder.

 

(b)           No subletting shall be for a term
ending later than the day prior to the Expiration Date and any portion of a
proposed term of any sublease or any renewal or extension thereof which
purports to extend beyond such date, or the date of sooner termination of the
term of this lease, is hereby deemed to be a nullity.

 

(c)           If Landlord shall recover or come
into possession of the demised premises before the Expiration Date, Landlord
shall have the right to take over any sublease made by Tenant and to succeed to
all rights of Tenant thereunder, Tenant hereby assigning (effective as of the
date of Landlord’s succession to Tenant’s estate in the demised premises) such
subleases as Landlord may elect to take over. Every subletting hereunder shall
be subject to the condition that, from and after the termination of this lease
or re-entry by Landlord hereunder or other succession by Landlord to Tenant’s
estate in the demised premises, the subtenant shall waive any right to
surrender possession or to terminate the sublease and, at Landlord’s election,
shall be bound to Landlord for the balance of the term thereof and shall attorn
to and recognize Landlord, as its landlord, under all of the then executory
terms of such sublease, except that Landlord shall not (i) be liable for
any previous act, omission or negligence of Tenant, as sublandlord, under such
sublease, (ii) be subject to any counterclaim, defense or offset
theretofore accruing to such subtenant against Tenant, (iii) be bound by
any previous modification or amendment of such sublease made without Landlord’s
consent or by any previous prepayment of more than one month’s rent and
additional rent unless paid as provided in the sublease, or (iv) be
obligated to perform any repairs or other work in the subleased space or the
Building beyond Landlord’s obligations under this lease. Each subtenant shall
promptly execute and deliver such instruments as Landlord may reasonably
request to evidence and confirm such attornment.

 

55.04       Mortgaging.
Except as otherwise provided herein, Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, expressly covenants that it shall not mortgage, hypothecate, pledge or
otherwise encumber this lease without the prior written consent of Landlord in
each instance.

 

56th.                      PERMITS:

 

(a)           If any governmental license or any
permit shall be required for the proper and lawful conduct of Tenant’s business
or that of any of its subtenants in the demised premises and if failure to
secure such license or permit would in any way adversely affect Landlord, the
Building or the Property, then Tenant, at its expense, shall duly procure and
thereafter maintain such license or permit and submit the same to Landlord for
inspection. Tenant shall at all times comply with the terms and conditions of
each such license or permit. In no event shall Tenant’s failure to procure or
maintain such license or permit relieve Tenant from its obligations under this
lease.

 

 

 

36

 

(b)           Anything to the contrary contained in
the lease notwithstanding, Tenant agrees to pay the cost of any and all permits
and fees required by any branch or department of the town, village, county,
state or federal government or other municipality in connection with any air
conditioning or other equipment now or hereafter located in the demised
premises whether or not installed by Landlord or Tenant.

 

57th.                      TERMINATION:

 

At
the expiration of the term of this lease or upon the early termination of this
lease, Tenant shall deliver to Landlord in accordance with Article 3 of
this lease any and all equipment and fixtures belonging to Landlord or which is
to be surrendered to Landlord as part of the demised premises in working
condition, including, without limitation, equipment and fixtures installed or
replaced by the Tenant. The Tenant further agrees to deliver to Landlord any
and all guarantees on new and replaced equipment.

 

58th.                      DEFAULT:

 

(a)           Notwithstanding any provisions in the
lease permitting Tenant to cure any default within a specified period of time,
if Tenant shall default (i) in the timely payment of rent or additional
rent, and such default shall continue or be repeated for two consecutive
months or for a total of four months in any period of twelve months
or (ii) in the performance of any term, condition or covenant of this
lease more than two  times in any period of six months
then, notwithstanding that such defaults shall have each been cured within the
period after notice, if any, as provided in this lease, any further similar
default shall be deemed to be deliberate and Landlord thereafter may cancel or
terminate this lease as provided in Article 17 hereof without affording to
Tenant an opportunity to cure such further default.

 

(b)           It is specifically understood and
agreed that if Landlord commences a Summary Proceedings or any other action
against Tenant due to any violation and/or defaults by Tenant in the observance
or performances of the terms, covenants, conditions or agreements to be
performed or observed by Tenant under this lease, including but not limited to
non-payment of rent or additional rent, Tenant shall bear the cost of Landlord’s
attorney fees, which shall be an amount equal to ten percent of the amount of
unpaid rent and additional rent but not less than $500.00. Such fee shall be
deemed additional rent and Landlord, at its option, may include such amount in
said proceedings as an unpaid item of rent.

 

59th                         MISCELLANEOUS:

 

(a)           This lease is transmitted for
examination only and does not constitute an offer to lease. This lease shall
become effective only upon execution hereof and delivery by the parties hereto.

 

(b)           This instrument contains the entire
and only agreement between the parties. No oral statements or representations
or prior written matter not contained herein shall have any force or effect.

 

(c)           This lease shall not be modified,
changed, or amended in any way or canceled, terminated or abridged except by a
writing subscribed by both parties.

 

 

 

37

 

(d)           Any reference in the printed portion
of this lease to the City of New York and the Administrative Code of the City
of New York shall, where applicable, be deemed to refer to the ordinances, rules and
regulations of the county, town, village and other governmental authorities
with jurisdiction over the demised premises.

 

(e)           If any term or provision 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 term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this lease shall be valid and enforced to
the fullest extent permitted by law.

 

(f)            This agreement shall be governed by
and construed in accordance with the laws of the State of New York.

 

(g)           Neither this lease nor any memorandum
hereof shall be recorded without Landlord’s prior written consent. Tenant shall
keep the provisions of this lease confidential.

 

(h)           Each provision of this Lease which
requires the consent or approval of Landlord shall be deemed to require the
same in each instance in which such provision may be applicable. Any consent or
approval by Landlord to or of any act or omission by Tenant requiring Landlord’s
consent or approval shall not be deemed to waive any future requirement for
such consent or approval to or of any subsequent similar act or omission.

 

(i)            With respect to any provision of
this lease which provides, in effect, that Landlord shall not unreasonably
withhold or unreasonably delay any consent or any approval, Tenant, in no
event, shall be entitled to make, nor shall Tenant make, any claim for, and
Tenant hereby waives any claim for money damages nor shall Tenant claim any
money damages by way of setoff, counterclaim or defense, based upon any claim
or assertion by Tenant that Landlord has unreasonably withheld or unreasonably
delayed any consent or approval; but Tenant’s sole remedy shall be an action or
proceeding to enforce any such provision, or for specific performance,
injunction or declaratory judgment.

 

(j)            Tenant shall place no signs upon or
visible from the exterior of the demised premises without Landlord’s prior
written approval, which approval shall not be unreasonably withheld or delayed
for (y) the placement of a sign on the exterior of the Building at a
location reasonably approved by Landlord directly over the entrance to the
demised premises at the rear of the Building and (z) the placement of a
directional sign at a location reasonably approved by Landlord on the exterior
of the demised premises on the Duffy Avenue side of the Building (to direct
visitors to the Tenant’s entrance at the rear of the Building), provided,
however, that in no event shall any such signage be more prominent that the
typical signage presently in existence at the building or consist in whole or
in part of any flashing, blinking, neon, illuminated or animated signage of any
type. All signs approved by Landlord and installed by Tenant, shall be done at
Tenant’s sole cost and expense and in accordance with all applicable provisions
of this lease. All signs shall comply with applicable laws, including, without
limitation, any town and/or county ordinance, code, law, rule or
regulation or other restriction, and Tenant, at its expense, shall obtain all
permits and approvals required thereby. Upon the expiration or termination of
the 

 

 

 

38

 

term
of this Lease, Tenant, at its sole cost and expense shall promptly remove all
of its exterior and interior signs and repair any damage caused thereby.

 

60th.                      LANDLORD’S OVERHEAD AND
SUPERVISION CHARGES:

 

(a)           Whenever Landlord or its Agent performs
work or furnishes services for Tenant at separate charge, or on Tenant’s behalf
performs work which Tenant should have performed but failed to perform prior to
the expiration of the time period applicable thereto; then, in addition to all
other charges that Tenant may be required to pay under this lease, Tenant shall
pay Landlord (or Landlord’s Agent if so directed by Landlord), within ten (10) days
of Landlord’s submission of the bill therefor, an amount equal to fifteen
percent (15%) of the total amount expended by or on behalf of Landlord in
connection with the same (representing a charge of 10% of said total amount
for overhead and thereafter 10% of said total amount plus the overhead
charge for supervision).

 

(b)           Whenever Tenant, or on Tenant’s behalf
any contractor or vendor performs construction, alteration or repair work,
including, but not limited to, furnishing labor, materials or services in
connection therewith and/or in connection with the construction of any
Alterations (as such term is defined in paragraph 66th), then, in addition to
all other charges that Tenant may be required to pay under this lease, Tenant
shall pay Landlord (or Landlord’s Agent if so directed by Landlord), within ten
(10) days of Landlord’s submission of the bill therefor, an amount equal
to five percent (5%) of the amount expended by or on behalf of Tenant, for
Landlord’s indirect costs, field inspection and coordination in connection with
such work. The provisions of this Paragraph 60th(b) shall not
apply to any Alteration(s) performed by or on behalf of Tenant in the
demised premises which are non-structural in nature and which do not affect any
Building System(s).

 

61st.                       INTENTIONALLY DELETED:

 

62nd.                   LIEN PROHIBITION:

 

Nothing
contained in this lease shall be deemed to be, or construed in any way as
constituting, the consent of Landlord to any person for the performance of any
labor or the furnishing of any materials at or to the demised premises or the
building and land of which the demised premises are a part, nor as giving
Tenant any right, power or authority to contract or permit the performance of
any labor or the furnishing of any material which might give rise to the right
to record or file a lien against the demised premises or the real property of
which the demised premises are a part or against the interests therein of
Landlord or Tenant, it being intended that all persons who may perform any
labor or furnish any materials to Tenant at the demised premises shall look
only to the credit of Tenant and such security as Tenant may furnish to such
persons for the payment of all such labor and materials. Landlord does not
consent to the recording or filing of any mechanics’ or other liens against the
leased premises or the real property of which the demised premises are a part
or the interest of Landlord or Tenant therein.

 

63rd.                      NOTICES:

 

Any
notice required to be given by either party pursuant to this lease, shall be in
writing and shall be deemed to have been properly given, rendered or made only
if sent by registered or 

 

 

 

39

 

certified
mail or by Federal Express or other comparable commercial overnight delivery
service, postage prepaid, addressed to the other party at the addresses set
forth below (or to such other address as Landlord or Tenant may designate to
each other from time to time by written notice), and shall be deemed to have
been given, rendered or made on the day so delivered; or in the case of failure
to deliver by reason of changed address of which no notice was given, or
refusal to accept delivery, as of the date of such failure as indicated on the
return receipt or by notice of the postal department.

 

If to Landlord:                                                                    LONG ISLAND
INDUSTRIAL GROUP ONE LLC

575 Underhill Boulevard

Suite 125

Syosset, New York 11791

 

With a copy to:                                                             Long Island
Management Group LLC

c/o Cammeby’s Management Company, LLC

45 Broadway, 25th Floor

New York, New York 10006

Attention: Barry Pincus

 

If to Tenant:                                                                              At the demised
premises or as set forth below.

 

64th.                      RENT PAYMENTS.

 

All
rent and additional rent and all other sums and charges due under this lease,
shall be paid to Landlord in accordance with the payment directions attached
hereto as Schedule C or pursuant to such other directions as Landlord shall
designate in this lease or otherwise. If the term of this lease commences on a
date other than the first of the month, the rent for the second month shall be
prorated, and the rent for the third month shall commence on the first day of
the month.

 

65th.                      SUBORDINATION AND ATTORNMENT:

 

65.01
Subordination. (a) This lease
and Tenant’s rights hereunder are subject and subordinate to: (i) all
present and future ground leases, operating leases, superior leases, overriding
leases and underlying leases and grants of term of the Building, or the
Property, or any portion thereof (collectively, including the applicable items
set forth in clause (iv) of this subsection (a), “Superior
Leases”); (ii) all mortgages and building loan agreements,
including leasehold mortgages and spreader and consolidation agreements, which
may now or hereafter affect all or any portion of the Property, or any Superior
Lease (collectively, including the applicable items set forth in clauses (iii) and
(iv) of this subsection (a), “Superior Mortgages”),
whether or not a Superior Mortgage shall also cover other lands or buildings or
leases, except that a mortgage on the land only shall not be a Superior
Mortgage so long as there is in effect a Superior Lease which is not
subordinate to such mortgage; (iii) each advance made under any Superior
Mortgage; and (iv) all renewals, modifications, replacements,
substitutions and extensions of any Superior Lease or Superior Mortgage. The
provisions of this subsection shall be self-operative and no further instrument
of subordination shall be required.

 

 

 

40

 

(b)           Tenant shall, within ten (10) days
after request therefor, execute and deliver, at its expense, any instrument, in
recordable form if requested, that Landlord, any holder of a Superior Mortgage
(a “Superior Mortgagee”) or any lessor
under a Superior Lease (a “Superior Lessor”)
may reasonably request, from time to time, to evidence and confirm the
subordination provided in subsection (a) of this Section 65.01.

 

(c)           Any Superior Mortgagee may elect that
this lease shall have priority over the mortgage held by such Superior
Mortgagee (such mortgage, upon such election by the applicable Superior
Mortgagee, is referred to herein as a “Subordinated Mortgage”)
and, upon notification by such Superior Mortgagee to Tenant, this lease shall
be deemed to have priority over such Subordinated Mortgage, whether this lease
is dated prior to or subsequent to the date of such Subordinated Mortgage and,
to the extent that an election is made by a Superior Mortgagee, the provisions
of Section 65.01 (a) hereof shall not be applicable to such
Subordinated Mortgage (except as otherwise provided), but such Superior
Mortgagee shall remain a Superior Mortgagee for the purpose of all other
provisions of this lease. Tenant and such Superior Mortgagee shall promptly,
upon the notification by such Superior Mortgagee, execute and deliver an
instrument in recordable form to evidence and confirm such priority.

 

(d)           If, in connection with obtaining,
continuing or renewing financing for which the Building, the underlying land,
the Property, or the interest of the lessee under any Superior lease represents
collateral, in whole or in part, the Superior Mortgagee or proposed Superior
Mortgagee (including any which may elect that this lease shall have priority
over such Superior Mortgage) shall request reasonable modifications of this
lease as a condition of such financing, Tenant shall not withhold its consent
thereto, provided that such modifications do not increase Tenant’s obligation
to pay rent or additional rent, shorten or lengthen the term of this lease and
do not materially increase any other obligations or materially diminish any
other rights of Tenant under this lease.

 

65.02       Attornment.           (a) If at any time any Superior
Lessor, Superior Mortgagee (each a “Senior Interest Holder”)
or any other person or the successors or assigns of any of the foregoing (such
Senior Interest Holder and any such other person being herein collectively
referred to as “Successor Landlord”)
shall succeed to the rights of Landlord under this lease, Tenant agrees, at the
election and upon the request of any such Successor Landlord, from time to
time, fully and completely to attorn to and recognize any such Successor
Landlord as Tenant’s landlord under this lease upon the then executory terms of
this lease, provided such Successor Landlord shall agree in writing to
accept Tenant’s attornment. The foregoing provisions of this Section 65.02
shall inure to the benefit of any such Successor Landlord, shall apply
notwithstanding that, as a matter of law, this lease may terminate upon the
termination of the Superior Lease and shall be self-operative upon any such
request, and no further instrument shall be required to give effect to said
provisions. Upon the request of any such Successor Landlord, Tenant shall
execute and deliver, from time to time, instruments reasonably satisfactory to
any such Successor Landlord, in recordable form if requested, to evidence and
confirm the foregoing provisions of this Section 65.02, acknowledging such
attornment and setting forth the terms and conditions of its tenancy.

 

(b)           Upon such attornment, this lease
shall continue in full force and effect as a direct lease between such
Successor Landlord and Tenant upon all of the then executory terms of this
lease except that such Successor Landlord shall not be: (i) liable for any
act or omission or 

 

 

 

41

 

negligence
of any prior Landlord (other than to cure any default of a continuing nature); (ii) subject
to any counterclaim, defense or offset which theretofore shall have accrued to
Tenant against any prior Landlord; (iii) bound by the payment of any rent
or additional rent for more than one month in advance (unless actually received
by such Successor Landlord); (iv) bound by any modification or amendment
of this lease unless (A) such modification or amendment shall have been
approved in writing by the Senior Interest Holder, of which Tenant has been
given notice, through or by reason of which the Successor Landlord shall have
succeeded to the rights of Landlord under this lease or (B) the
modification or amendment shall have occurred prior to the creation of such
Senior Interest; (v) obligated to construct any improvements or to grant
any credit toward the cost of any improvements; (vi) in the event of
damage to the Building or the Property, by fire or other casualty, obligated to
repair the demised premises or the Building or the Property, or any part
thereof beyond such repair as may be reasonably accomplished from the net
proceeds of insurance actually made available to Landlord; or (vii) in the
event of partial condemnation, obligated to repair the demised premises or the
Building or the Property, or any part thereof beyond such repair as may be
reasonably accomplished from the net proceeds of any award actually made
available to Landlord as consequential damages allocable to the part of the
demised premises or the Building or the Property, not taken. Nothing contained
in this Section 65.02 shall be construed to impair any right otherwise
exercisable by any such Successor Landlord.

 

65.03       Right to Cure.
If any act or omission by Landlord shall give Tenant the right, immediately or
after the lapse of time, to cancel or terminate this lease in whole or in part
or to claim such cancellation or termination on the basis of a partial or total
eviction, Tenant shall not exercise any such right until (a) it shall have
given written notice of such act or omission to each Senior Interest Holder
whose name and address shall have been previously furnished to Tenant, and (b) a
reasonable period for remedying such act or omission shall have elapsed
following such notice and following the time when such Superior Mortgagee or
Superior Lessor shall have become entitled under such Superior Mortgage,
Subordinated Mortgage or Superior Lease, as the case may be, to remedy the same
(which reasonable period shall be not less than sixty (60) days and, if such
act or omission is of such a nature that it cannot be completely remedied
within such sixty (60) day period, such reasonable period shall be such longer
period as may be required provided such Senior Interest Holder shall
have within such sixty (60) day period given Tenant notice of its intention to
remedy such act or omission, and has commenced and thereafter continues to act
upon such intention). It is agreed, however, that if such Senior Interest
Holder requires possession of the demised premises in order to effect a remedy,
then such Senior Interest Holder shall have such further period of time as is
necessary to obtain possession in addition to the reasonable period referred to
in the preceding sentence, provided such Senior Interest Holder shall give
Tenant notice of its intention to obtain possession and remedy such act or
omission and shall promptly commence and continue to pursue, through
appointment of a receiver or foreclosure, summary proceedings or other
procedures, steps necessary to obtain possession. For the purposes of this Section 65.03,
if there shall be more than one Senior Interest Holder, the provisions of this Section 65.03
shall be applicable only to the holder of the Superior Mortgage or the
Subordinated mortgage which constitutes the first mortgage lien on the
Building.

 

 

 

 

 

42

66th.                      SUPPLEMENT TO
ARTICLE 3:

 

(a)           Tenant shall not make or allow to be
made any alterations or physical additions, including, without limitation,
fixtures, to the demised premises other than normal painting, carpeting,
wall-coverings and office decorations (“Alterations”)
or place safes, vaults, filing systems, libraries or other heavy furniture or
equipment within the demised premises without first obtaining the consent of
Landlord, which consent shall not be unreasonably withheld in the case of an
Alteration which (i) has no adverse effect on the Building’s structure or
systems, including, without limitation, the electrical and plumbing systems of
the Building (collectively, “Building Systems”);
(ii) is not visible from the exterior of the demised premises; (iii) does
not result in a violation of, or require a change in, any certificate of
occupancy for the Building; (iv) does not affect any area of the Building
outside of the demised premises; and (v) does not, in Landlord’s sole
reasonable judgment, adversely affect the character or value of the Property.

 

(b)           Landlord shall be entitled to retain
independent consultants to review the plans and specifications for and the
progress of construction of Alterations and to reimbursement from Tenant,
within ten (10) days after request therefor, for all of the fees of such
consultants and other out-of-pocket costs incurred by Landlord in connection
with such proposed Alteration. Tenant shall, prior to commencing any work in
the demised premises in connection with any Alteration, the nature of which
would under good construction industry practice or Legal Requirements (as such
term is hereinafter in this paragraph 66th defined) involve the preparation of
plans and specifications, furnish Landlord with three (3) sets of complete
plans and specifications for such work. Landlord agrees to use reasonable
efforts, consistent with industry practice and the scope of such proposed
Alteration, to respond to Tenant’s request for consent to its plans and
specifications for Alterations within (i) fifteen (15) Business Days after
submission thereof to Landlord in the case of the original submission and (ii) ten
(10) Business Days in the case of any resubmission of disapproved plans.
Landlord reserves the right to disapprove any plans and specifications in part,
to reserve approval of items shown thereon pending its review and approval of
other plans and specifications, and to condition its approval upon Tenant
making revisions to the plans and specifications or supplying additional
information. Any Alterations for which consent has been received shall be
performed in accordance with plans and specifications approved by Landlord, and
no amendments or additions thereto shall be made without the prior written
consent of Landlord in each instance, which consent shall be granted or
withheld in accordance with the same provisions and within the same time frames
in granting initial consent to the applicable Alterations.

 

(c)           Tenant agrees that all Alterations
shall at all times comply with all applicable governmental and
quasi-governmental rules and regulations and the rules and
regulations of any Board of Fire Underwriters or similar agency having
jurisdiction (“Legal Requirements”) and any rules and regulations which
Landlord may adopt from time to time with respect to the making of Alterations.
Tenant, at its expense, shall cause all Alterations to be performed in a good
and first-class workmanlike manner, using new materials and equipment.

 

(d)           Landlord or its agent, at Tenant’s
expense and upon request of Tenant, shall execute any applications for any
permits, approvals or certificates required to be obtained by Tenant (wherein
such Landlord signature is required) in connection with any permitted
Alteration (provided that the provisions of the applicable Legal Requirement
require that Landlord execute such application) and shall otherwise cooperate
with Tenant in connection therewith, provided that if Landlord shall incur any
cost or liability in connection therewith,

 

 

 

43

Tenant
shall reimburse Landlord for all such costs, expenses and liabilities within
ten (10) days after receipt of Landlord’s invoice therefor.

 

(e)           Tenant agrees that all Alterations
shall be promptly commenced and completed and shall be performed only in a
manner so as not to interfere with the occupancy of any other tenant or delay
Landlord in the construction, maintenance, management or operation of the
Building or the rest of the Property or the space of any other tenant in the
Building, and if any additional expense shall be incurred by Landlord as a
result of Tenant’s making of any Alterations, Tenant shall pay such additional
expense within ten (10) days after demand therefor.

 

(f)            No Alterations shall be constructed (i) except
under the supervision of a licensed architect or licensed professional engineer
reasonably satisfactory to Landlord and (ii) in the event of an Alteration
in excess of $50,000.00 prior to Tenant delivering to Landlord either (y) a
performance bond and a labor and materials payment bond (issued by a surety
company reasonably satisfactory to Landlord and licensed to do business in the
State of New York) each in an amount equal to one hundred twenty-five percent
(125%) of such estimated cost and otherwise in form satisfactory to Landlord or
(z) such other security as shall be satisfactory to Landlord.

 

(g)           All contractors retained by Tenant
shall be subject to the prior written approval of Landlord. Tenant shall not
permit the use of any contractors, labor, material or equipment in the
performance of any work if such use, in Landlord’s sole judgment, will disturb
harmony with any trade engaged in performing any other work in and about the
Building and/or the rest of the Property or contribute to any labor dispute.
Landlord may require the use of designated Building engineers or contractors
for specified work which will or may affect any Building Systems.

 

(h)           Tenant shall indemnify and hold
Landlord harmless from and against all costs (including, without limitation,
attorneys’ fees and disbursements), losses, liabilities or causes of action
arising out of or relating to any Alteration, including, without limitation,
any mechanics’ or materialmen’s liens asserted in connection with such
Alteration.

 

(i)            Landlord’s review and/or approval of
plans or specifications or consent to the making of Alterations in the demised
premises shall not be deemed to be (i) an agreement by Landlord that the
contemplated Alterations comply with any Legal Requirements, or any certificate
of occupancy for the Building; (ii) an approval of the sufficiency,
completeness or any other aspect of the proposed Alteration; or (iii) a
waiver by Landlord of compliance by Tenant with any of the other terms of this
lease and any other agreements or other documents relating thereto.

 

(j)            In accordance with Tenant’s testing
of bullet proof materials as expressly provided in Paragraph 2nd
hereof, Tenant, at Tenant’s sole cost and expense, may install testing
facilities upon and subject to the provisions of this Paragraph 66th,
including obtaining Landlord’s prior written approval of plans, which shall not
be unreasonably withheld or delayed. Testing facilities shall comply with all
applicable laws and regulations pertaining to such testing facilities, and
Tenant, at Tenant’s sole cost and expense, shall perform all work to the
demised premises or other portions of the Property required to effect such
compliance. In addition, Tenant shall obtain all necessary approvals, licenses
and permits required therefor prior to the use 

 

 

 

44

 

thereof
for such purposes. Tenant shall immediately furnish Landlord with any notices
received by any insurance company or governmental agency or inspection bureau
regarding any unsafe or unlawful condition within the demised premises or the
violation of any Legal Requirements.

 

67th.                      INABILITY TO PERFORM:

 

(a)           This lease, and the obligations of
Tenant to pay rent and additional rent and perform all of the other terms of
this lease on the part of Tenant to be performed shall in no way be affected
because Landlord is unable or delayed in fulfilling any of its obligations
under this lease by reason of Force Majeure. Landlord shall in each instance
exercise reasonable diligence to effect performance when and as soon as
reasonably possible; provided, however, that Landlord shall be
under no obligation to employ overtime or premium labor.

 

(b)           For purposes of this lease, “Force Majeure” shall mean any and
all causes beyond the reasonable control of Landlord or Tenant, as the case may
be, including delays caused by the other party hereto or other tenants, Legal
Requirements and other forms of governmental restrictions, regulations or
controls (including energy and water conservation measures), labor disputes, accidents,
mechanical breakdowns, shortages or inability to obtain labor, fuel, steam,
water, electricity or materials through ordinary sources, acts of God, war,
sabotage, embargo, enemy action, civil commotion, fire or other casualty, but
shall not include lack of funds or financial inability to perform.

 

68th.                      DEVELOPMENT, DEMOLITION AND
RELOCATION RIGHTS:

 

(a)           Tenant acknowledges that it has no
rights to any development rights, “air rights” or comparable rights appurtenant
to the Building, and/or the Property, and consents, without further
consideration, to any utilization of such rights by Landlord and agrees to
promptly execute and deliver any instruments which may be requested by
Landlord, including instruments merging zoning lots, evidencing such acknowledgment
and consent. The provisions of this Section shall be deemed to be and
shall be construed as an express waiver by Tenant of any interest Tenant may
have as a “party in interest” in the Building, and/or the Property.

 

(b)           (1)           Anything
to the contrary contained in this lease notwithstanding, but subject to the
provisions of clause (5) below, Landlord, upon not less than thirty (30)
days prior written notice (the “Relocation Notice”) to Tenant, shall have the
right at any time and from time to time during the term of this lease, and
shall use all reasonable efforts to substitute, as of a date specified in said
notice (the “Effective Date”), other space (the “Substitute Space”) in the
Building of which the demised premises forms a part or in another building
owned by Landlord (or by an affiliate of Landlord) within a three (3) mile
radius of the Property, as the demised premises hereunder in lieu of the space
(the “Prior Space”) then constituting the demised premises hereunder
immediately prior to the giving of such notice.

 

(2)           Prior to the Effective Date,
Landlord, at Landlord’s expense and with Tenant’s reasonable cooperation (but
at no cost to Tenant), shall furnish necessary moving labor to move Tenant and
Tenant’s equipment and personal property to the Substitute Space, which
Substitute Space shall be substantially equivalent in area and build-out to the
Prior Space and have substantially equivalent parking accommodations available
for Tenant’s use.

 

 

 

45

 

(3)           Automatically on the Effective Date,
the Substitute Space shall constitute the demised premises hereunder and all of
the terms of this lease shall apply thereto (except that Landlord shall not be
required to perform any work or furnish any materials with respect to Tenant’s
installation in the Substitute Space, other than as hereinabove specifically
provided and except that if the Substitute Space is in another building then
all references to the term “Building” shall mean such other building of which
the Substitute Space forms a part and Tenant’s Share shall be equitably
adjusted), and the Prior Space shall automatically be deleted from the coverage
of this lease and the term of this lease insofar as the Prior Space only is
concerned shall be deemed to have ceased and expired with the same force and
effect as if the Effective Date were originally provided in this lease as the
expiration date hereof but this lease shall continue in full force and effect
for the full term hereof with respect to the Substitute Space.

 

(4)           Tenant covenants and agrees to quit
and surrender vacant full possession of the Prior Space to Landlord on the
Effective Date free and clear of any leases, tenancies and rights of occupancy
of anyone claiming by or through Tenant. If Tenant shall fail or refuse to
surrender such vacant full possession of the Prior Space to Landlord on or
before the Effective Date (for any reason other than failure to furnish moving
labor to Tenant), then and in such event Tenant shall pay to Landlord for each
day or fraction thereof that Tenant shall fail to surrender such vacant full
possession of the Prior Space to Landlord (in addition to all rent and
additional rent provided to be paid under this lease which is applicable from
and after the Effective Date to the Substitute Space) an agreed-upon sum equal
to three (3) times the quotient obtained by dividing (i) the sum of
the monthly installment of rent then payable under this lease plus one-twelfth
(1/12) of all additional rent then payable under this lease by (ii) thirty
(30) (the “Daily Rate for the Prior Space”). Such Daily Rate for the Prior
Space is in the nature of liquidated damages to Landlord for Tenant’s failure
to surrender such vacant full possession of the Prior Space to Landlord on or
before the Effective Date. The foregoing provision for payment by Tenant of the
Daily Rate for the Prior Space shall be without prejudice to Landlord’s
instituting summary or such other proceedings as Landlord may desire in order
to obtain as promptly as possible vacant full possession of the Prior Space.
The foregoing provision for payment by Tenant of the Daily Rate for the Prior
Space relates solely to Landlord and Tenant’s mutual agreement to the daily
value of the Prior Space to each of Landlord and Tenant taking into
consideration Tenant’s agreement to comply with the terms of this paragraph
68th and to surrender vacant full possession of the Prior Space to Landlord on
or before the Effective Date, time being deemed of the essence; therefore, in
addition to Tenant’s agreement to make payment of the Daily Rate for the Prior
Space for each subject day, Tenant agrees to pay Landlord the total amount of
any loss, damage, cost or injury (including attorneys’ fees and disbursements)
suffered by Landlord with regard to any existing or potential transaction which
is adversely affected by Tenant’s failure or refusal to timely surrender the
Prior Space.

 

(c)           If Landlord shall at any time during
the term of this lease decide to demolish or substantially renovate the Building,
including but not limited to a change of use of the Building and/or that
portion of the Building in which the demised premises are a part, then Landlord
shall have the right to terminate this lease as of the last day of any month
thereafter upon not less than six (6) months prior written notice by
Landlord to Tenant. In the event that Landlord shall give such notice, then
upon the date specified in such notice for the termination of this lease, this
lease and the term and estate hereby granted shall terminate as though such
date were the date originally set forth in this lease for the expiration of the
term hereof, and Tenant shall, on or 

 

 

 

46

 

before
such date, vacate and remove from the demised premises in accordance with the
provisions of this lease.

 

69th.                      AMENDING PARAGRAPH 32nd:

 

Automatically
on the execution hereof, the security deposit of $5,437.50 under that certain
license agreement dated July 23, 2004 between the parties hereto regarding
the use of the demised premises (which license agreement terminated on the
execution hereof) shall be transferred and utilized as part of the security
deposit required under this lease; and the balance of the security required
under this lease in the sum of $14,962.35 shall be deposited with Landlord by
Tenant on the execution of this lease.

 

	
   

  	
  LANDLORD:

  
	
   

  	
  LONG
  ISLAND INDUSTRIAL GROUP ONE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/

  
	
   

  	
   

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
  AMERICAN DEFENSE SYSTEMS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/

  
	
   

  	
  Title

  	
  Thomas
  F. Cusack, President

  
	
   

  	
   

  	
   

  

 

 

 

47

 

SCHEDULE “A”

RENTAL SCHEDULE

 

	
  COMMENCEMENT
  DATE:

  	
   

  	
  September 23,
  2004

  
	
   

  	
   

  	
   

  
	
  EXPIRATION
  DATE:

  	
   

  	
  The
  last day of the fifth Lease Year.

  

 

 

LEASE
YEAR: The term “Lease Year” shall mean a period of time conforming to the
following: The first “Lease Year” of the term of this lease shall mean the
period beginning on the Commencement Date and ending on the date twelve (12)
months after the first day of the first month following the Commencement Date,
unless the Commencement Date is the first day of a month, in which case the
first Lease Year shall terminate on the date twelve (12) months after the
Commencement Date; the second Lease Year of the term of this lease shall
commence on the day following the last day of the first Lease Year and end
twelve (12) months thereafter; and succeeding Lease Years during the term of
this Lease shall commence and end on dates corresponding to those on which the
Second Lease Year begins and ends.

 

	
  TERM

  	
   

  	
  RENT

  
	
   

  	
   

  	
   

  
	
  FIRST
  LEASE YEAR

  	
   

  	
  $ 108,750.00 per annum

  
	
   

  	
   

  	
   

  
	
  SECOND
  LEASE YEAR

  	
   

  	
  $ 112,012.50 per annum

  
	
   

  	
   

  	
   

  
	
  THIRD
  LEASE YEAR

  	
   

  	
  $ 115,372.88 per annum

  
	
   

  	
   

  	
   

  
	
  FOURTH
  LEASE YEAR

  	
   

  	
  $ 118,834.06 per annum

  
	
   

  	
   

  	
   

  
	
  FIFTH
  LEASE YEAR

  	
   

  	
  $ 122,399.08 per annum

  

 

 

 

 

48

 

SCHEDULE “B”

 

[NOT USED]

 

 

 

 

 

 

49

 

SCHEDULE “C”

RENT PAYMENT DIRECTIONS

 

MAILING DIRECTIONS:

 

Rent
sent through the U.S. Postal Service (other than by overnight delivery) shall
be addressed as follows:

 

LONG ISLAND INDUSTRIAL GROUP ONE LLC

P.O. Box 5823

Hicksville, New York 11802

 

Tenant
shall make all lease payments to this account unless and until it is given
written instructions from Landlord to do otherwise.

 

NOTE:
ALL CHECKS SHOULD BE MADE PAYABLE TO LONG ISLAND INDUSTRIAL GROUP ONE, LLC

 

 

 

 

50

 

LEASE SCHEDULE “D”

 

REQUIRED INSURANCE

 

(a)           “All-Risk” Property and Loss of
Income Coverage for Tenants’ Property. “All Risk” (i) property
insurance on a replacement cost basis, covering all merchandise, movable
non-structural partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment, whether or not
attached to, or built into, the demised premises, which are installed in the
demised premises by, or for the account of, Tenant without expense to Landlord
and that can be removed without structural damage to the Property, and all
furniture, furnishings and other articles of movable personal property owned by
Tenant and located in the demised premises (collectively, the “Tenant’s
Property”), all in an amount not less than the full replacement cost of all
such property and (ii) loss-of-income insurance in an amount sufficient to
assure that Landlord shall recover the loss of any rental income due and owing
to Landlord from Tenant under the terms of this lease, which coverage shall
provide such protection to Landlord for a period of not lees than twelve (12)
consecutive months. The total amount of the deductible required under each
policy providing such coverage shall be no more than $1,000.00 per loss.
Landlord, Agent and any other parties designated by Landlord (including, but
not limited to, its beneficiary, its general and limited partners, and Superior
Mortgagees and/or Superior Lessors) shall be included as loss payee(s).

 

(b)           Liability Coverage. Commercial
general public liability and comprehensive automobile liability (and, if
necessary to comply with any conditions of this Lease, umbrella liability
insurance) covering Tenant against any claims arising out of liability for
bodily injury and death and personal injury and advertising injury and property
damage occurring in and about the demised premises, and/or the Property and
otherwise resulting from any acts and operations of Tenant, its agents and
employees, with limits of not less than total limits of $2,000,000.00 per
occurrence and $5,000,000.00 annual general aggregate, per location. The total
amount of a deductible or otherwise self-insured retention with respect to such
coverage shall be not more than $1,000.00 per occurrence. Such insurance shall
include, inter alia: (i) “occurrence” rather than “claims made” policy
forms unless such “occurrence” policy forms are not available; (ii) any
and all liability assumed by Tenant under the terms of this lease, to the
extent such insurance is available; (iii) premises medical-operations
expenses in an amount not less than $5,000.00 per person, per accident; (iv) Landlord,
Agent and any other parties designated by Landlord or Agent (including, but not
limited to, its beneficiary, its general and limited partners, and Superior
Mortgagees and/or Superior Lessors) shall be designated as Additional Insured(s) with
respect to (x) the demised premises, and (y) all operations of
Tenant, and (z) any property and areas and facilities of Landlord used by
Tenant, its employees, invitees, customers or guests; and (v) severability
of insured parties and cross-liability so that the protection of such insurance
shall be afforded to Landlord and its designees in the same manner as if
separate policies had been issued to each of the insured parties.

 

(c)           Workers’ Compensation Coverage.
Workers’ compensation and employer’s liability insurance in the state in which
the demised premises and any other operations of Tenant are located and any
other state in which Tenant or its contractors or subcontractors may be subject
to any statutory or other liability arising in any manner whatsoever out of the
actual or 

 

 

 

51

 

alleged
employment of others. The total limits of the employer’s liability coverage
shall be not less than the amounts specified in Subparagraph (b) above.

 

(d)           Other Coverage. Such other
policy or policies as are either: (i) reasonably required of Landlord by
any Superior Mortgagee, Superior Lessor, or any other party having any interest
in the Property; or (ii) deemed reasonably necessary by Landlord; or (iii) required
by insurers by reasons of a change in Tenant’s use of, or activities at, the
demised premises.

 

All
insurance policies required under this lease Schedule shall: (i) be issued
by companies licensed to do business in the State in which the Property is
located and acceptable to Landlord and any Superior Mortgagees, Superior
Lessors and any other party having any interest in the Property; (ii) not
be subject to cancellation or material change or non-renewal without at least
thirty (30) days’ prior written notice to Landlord and any other parties
designated by Landlord (A) to be loss payee(s) or additional insured(s) under
the insurance policies required from Tenant, or (B) to receive such
notices; (iii) be deemed to be primary insurance in relation to any other
insurance maintained by Landlord or Agent; and (iv) at the sole option and
discretion of Landlord, include other appropriate endorsements or extensions of
coverage as would be required of Landlord by any Superior Mortgagees, Superior
Lessors or any other party having any interest in the Property.

 

 

 

 

52

 

SCHEDULE “E”

 

INSURANCE CERTIFICATE HOLDER/ADDITIONAL INSUREDS/LOSS PAYEES

 

CERTIFICATE HOLDER:

 

LONG ISLAND INDUSTRIAL GROUP ONE, LLC

575 Underhill Boulevard

Suite 125

Syosset, New York 11791

 

LOSS PAYEE (BUSINESS INTERRUPTION COVERAGE):

 

LONG ISLAND INDUSTRIAL GROUP ONE, LLC

575 Underhill Boulevard

Suite 125

Syosset, New York 11791

 

ADDITIONAL INSUREDS:

 

LONG ISLAND INDUSTRIAL MANAGEMENT, LLC

575 Underhill Boulevard

Suite 125

Syosset, New York 11791

 

WACHOVIA SECURITIES

P.O. Box 563956

Charlotte, NC 28256-3956

 

 

 

 

53

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]