Document:

kl04016_ex10-3.htm

    
      

    

     

    Exhibit
10.3

     

    
 

    SECOND AMENDMENT TO
LEASE

     

    SECOND
AMENDMENT TO LEASE made as of the 7th day of
May, 2003 by and between MITCHMAR ATLANTA PROPERTIES, INC, a Delaware
corporation having its principal office at c/o JFI, 152 West 57th Street,
56th
Floor, New York, New York 10019 (hereinafter called “Landlord”), and SID TOOL
CO., INC., a New York corporation having its principal office at 75 Maxess Road,
Melville, New York 11747 (hereinafter called “Tenant”).

     

    RECITALS

     

    WHEREAS,
Landlord and Tenant entered into an Agreement of Lease dated as of July 13,
1989 (as amended, the “Original Lease”) as amended by a First Amendment to Lease
dated as of August 10, 1996 (the “First Amendment”) for the leasing of the
376,738 square foot building (the “Building”) located at 6700 Discovery
Boulevard, Mableton, Georgia (the “Original Premises”) which building is located
on “Parcel C” as shown on Exhibit A annexed
hereto and made a part hereof (the “Original Building Lot”); and

     

    WHEREAS,
Landlord owns two additional building lots (“Parcel A” and “Parcel B”) as
shown on Exhibit
B annexed hereto and made a part hereof; and

     

    WHEREAS,
pursuant to the terms of this Second Amendment, Tenant shall lease all of Parcel
A and Parcel B, and Landlord shall reserve an easement of egress and ingress to
Parcels A and B; and

     

    WHEREAS,
Landlord and Tenant desire to amend the Original Lease to, among other things,
lease to Tenant (i) an additional approximately 148,000 square feet of space
which is to be added to the Building by Tenant pursuant to the terms of this
Second Amendment (the “Expansion Premises”), (ii) Parcel A, and (iii) Parcel B
(the Expansion Premises together with Parcel A, Parcel B and the Original
Premises hereinafter collectively referred to as the “Demised Premises” or the
“Premises”), (ii) extend the term of the Original Lease, as amended, to the
Extended Expiration Date (as hereinafter defined), and (iii) modify certain
other provisions of the Original Lease, as amended.  This second
amendment to the lease shall be referred to herein as the “Second
Amendment”.  The Original Lease, the First Amendment and this Second
Amendment shall be collectively referred to herein as the “Lease”.

     

    NOW,
THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which
being hereby acknowledged, the parties agree as follows:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
I

     

    Definitions

     

    1.1 The
recitals are specifically incorporated into the body of this Agreement and shall
be binding upon the parties hereto.

     

    1.2 Unless
expressly set forth to the contrary in the Original Lease or First Amendment and
except as specifically modified by this Second Amendment, all capitalized or
defined terms shall have the meanings ascribed to them in the Original Lease and
the First Amendment.

     

    1.3 The term
“Effective Date”, as used herein, shall mean and refer to the date which is the
earlier to occur of (a) the “substantial completion” (as hereinafter defined) of
the Expansion Premises Work (as hereinafter defined), (b) Tenant’s occupancy of
the Expansion Premises for the purposes of conducting its business, and (c)
October 1, 2003.  The term “substantially completed” or “substantial
completion” as used herein is defined to mean the date on which the only items
of the Expansion Premises Work to be completed are those which do not interfere
with Tenant’s occupancy and substantially full enjoyment of the Expansion
Premises.

     

     

    
      
        
        

      

      
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    ARTICLE
II

     

    Lease
Modifications

     

    2.1 The Lease
is hereby modified and amended as follows:

     

    2.1.1                      Granting Clause and
Construction of Addition.  (A)  Effective as of the
date hereof, Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord (i) the Expansion Premises, to be constructed by Tenant on the Original
Building Lot in accordance with the terms hereof (the “Expansion Premises
Work”), (ii) Parcel A, and (iii) Parcel B.

     

    (B)           Tenant
shall (i) comply with all terms and conditions contained in Paragraph 49 (as
modified herein) of the Lease applicable to Permitted Alterations (as
hereinafter defined) with respect to the Expansion Premises Work or with respect
to any future expansion work to be performed on either Parcel A or Parcel
B.  Tenant shall deliver to Landlord complete and detailed
architectural, mechanical and electrical construction drawings for the Expansion
Premises Work (such plans being herein referred to as the “Final Construction
Documents”), or with respect to any material future expansion work to be
performed on Parcel A or Parcel B.

     

    2.1.2                      Landlord’s
Contribution.  The Expansion Premises Work shall be performed
at the sole cost and expense of Tenant.  Landlord hereby covenants to
contribute $4,750,000.00 (the “Landlord’s Contribution”) toward the “hard costs”
of the Expansion Premises Work.  Tenant shall, as the Expansion
Premises Work progresses, submit statements to Landlord from time to time, but
not more often than once per month, setting forth the cost of those aspects of
the Expansion Premises Work which have been completed through the date of such
statement (such statement to be prepared in accordance with standard progress
payment application forms issued by the American Institute of
Architects).  Each such statement shall be accompanied by a
certificate from an authorized officer of Tenant requesting that a payment be
made to the identified contractor, subcontractor or materialmen who is owed
money for that portion of the completed Expansion Premises Work (the “Requested
Allowance Payment”) and certifying that the Requested Allowance Payment is for
amounts due and owing Tenant’s contractor, subcontractor or materialmen, in
connection with the Expansion Premises Work.  Following receipt of any
such statement and accompanying certificate, Landlord shall pay to Tenant’s
contractor, subcontractor or materialmen, a portion of the Landlord’s
Contribution in an amount equal to one hundred percent (100%) of the subject
Requested Allowance Payment (but in no event shall the aggregate amount of such
payments by Landlord exceed the Landlord’s Contribution).  Landlord
shall have the right to (a) inspect all of the Expansion Premises Work to
determine if it has been completed substantially in accordance with the Final
Construction Documents, and (b) review all Expansion Premises Work invoices and
evidence of payment thereof, to the extent such payments have already been made
by Tenant.  The right to request that Landlord make payments to such
contractors, subcontractors, or materialmen for the cost of the Expansion
Premises Work as set forth herein shall be the exclusive benefit of Tenant, it
being the express intent of the parties hereto that in no event shall such right
be conferred upon or for the benefit of any third party, including without
limitation, any contractor, subcontractor, materialmen, laborer, architect,
engineer, attorney or any other person, firm or entity.

     

    Tenant
agrees that if the Expansion Premises Work is not substantially completed prior
to October 1, 2003, then Landlord, in its sole and absolute discretion, shall
have the right, but not the obligation, to complete the Expansion Premises
Work.  Any amounts that Landlord incurs which are greater than
Landlord’s Contribution in order to complete the Expansion Premises Work shall
be considered additional rent under the Lease and shall be immediately due and
payable upon demand therefor.

     

     

     

    
      
        
        

      

      
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    2.1.3                      Term.                      (A)           Effective
as of the Effective Date, Paragraph 42 of the Rider to the Lease is hereby
modified and amended to reflect that the term of the Lease is hereby extended to
and including the day preceding the day which is twenty (20) years after (i) the
Effective Date, if such date is the first day of a calendar month, or (ii) the
first day of the first full calendar month following the Effective Date, if such
date is not the first day of a calendar month (the “Extended Expiration
Date”).

     

    (B)           A
“New Lease Year” shall be comprised of a period of twelve (12) consecutive
months.  The first New Lease Year shall commence on the Effective Date
but, notwithstanding the first sentence of this paragraph, if the Effective Date
is not the first day of a month, then the first New Lease Year shall include the
additional period from the Effective Date to the end of the then current
month.  Each succeeding New Lease Year shall end on the anniversary
date of the last day of the preceding New Lease Year.  For example, if
the Effective Date is December 1, 2002, the first New Lease Year would begin on
December 1, 2002, and end on November 30, 2003, and each succeeding New Lease
Year would end on November 30th.  If, however, the Effective Date is
December 2, 2002 the first New Lease Year would end on December 31, 2003, the
second New Lease Year would commence on January 1, 2004, and each succeeding New
Lease Year would end on December 31st.

     

    2.1.4                      Rent.  With
respect to the Original Premises, Tenant shall continue to pay fixed rent in
accordance with Paragraph 43 of the New Lease through July 31, 2010, the current
expiration date.  Thereafter, the fixed rent payable with respect to
the Original Premises for the balance of the seventh New Lease Year (as defined
in Section 2.13 (B)) shall be $101,691.00 per month.

     

     

     

    
      
        
        

      

      
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    (A)
Beginning on the Eighth New Lease Year and for the balance of the term, the
fixed rent payable for the Original Premises shall be as follows:

     

    
      	
               
      

            	
              i.

            	
              During
      each of the eighth and ninth New Lease Years, the fixed rent attributable
      to the Original Premises shall be One Million Two Hundred Twenty Thousand
      Two Hundred Ninety-Two and 00/100 ($1,220,292.00) Dollars per annum
      payable in equal monthly installments of
  $101,691.00;

            

    

     

    
      	
               
      

            	
              ii.

            	
              During
      each of the tenth, eleventh and twelfth New Lease Years, the fixed rent
      attributable to the Original Premises shall be One Million Two Hundred
      Fifty Thousand Seven Hundred Ninety-Nine and 30/100 ($1,250,799.30)
      Dollars per annum payable in equal monthly installments of
      $104,233.27;

            

    

     

    
      	
               
      

            	
              iii.

            	
              During
      each of the thirteenth, fourteenth and fifteenth New Lease Years, the
      fixed rent attributable to the Original Premises shall be One Million Two
      Hundred Eighty-Two Thousand Sixty-Nine and 20/100 ($1,282,069.20) Dollars
      per annum payable in equal monthly installments of
      $106,839.10);

            

    

     

    
      	
               
      

            	
              iv.

            	
              During
      each of the sixteenth, seventeenth and eighteenth New Lease Years, the
      fixed rent attributable to the Original Premises shall be One Million
      Three Hundred Fourteen Thousand One Hundred Twenty and 90/100
      (1,314,120.90) Dollars per annum payable in equal monthly installments of
      $109,510.07; and,

            

    

     

    
      	
               
      

            	
              v.

            	
              During
      each of the nineteenth and twentieth New Lease Years, the fixed rent
      attributable to the Original Premises shall be One Million Three Hundred
      Forty-Six Thousand Nine Hundred Seventy-Three and 90/100 ($1,346,973.90)
      Dollars per annum payable in equal monthly installments of
      $112,247.82;

            

    

     

    (B) With
respect to the Expansion Premises, Parcel A and Parcel B, collectively, the
fixed rent shall be as follows:

     

     

     

    
      
        
        

      

      
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              i.

            	
              During
      each of the first, second and third New Lease Years the fixed rent
      attributable to the Expansion Premises, Parcel A and Parcel B shall be an
      amount equal to Four Hundred Forty Four Thousand and 00/100 ($444,000.00)
      Dollars per annum payable in equal monthly installments of
      $37,000.00;

            

    

     

    
      	
               
      

            	
              ii.

            	
              During
      each of the fourth, fifth and sixth New Lease Years, the fixed rent
      attributable to the Expansion Premises, Parcel A and Parcel B, shall be
      Four Hundred Fifty Five Thousand One Hundred and 00/100 ($455,100.00)
      Dollars per annum payable in equal monthly installments of
      $37,925.00;

            

    

     

    
      	
               
      

            	
              iii.

            	
              During
      each of the seventh, eight and ninth New Lease Years, the fixed rent
      attributable to the Expansion Premises, Parcel A and Parcel B, shall be
      Four Hundred Sixty Six Thousand Four Hundred Seventy Seven and 50/100
      ($466,477.50) Dollars per annum payable in equal monthly installments of
      $38,873.13;

            

    

     

    
      	
               
      

            	
              iv.

            	
              During
      each of the tenth, eleventh and twelfth New Lease Years, the fixed rent
      attributable to the Expansion Premises, Parcel A and Parcel B, shall be
      Four Hundred Seventy Eight Thousand One Hundred Thirty Nine and 44/100
      ($478,139.44) Dollars per annum payable in equal monthly installments of
      $39,844.95;

            

    

     

    
      	
               
      

            	
              v.

            	
              During
      each of the thirteenth, fourteenth and fifteenth New Lease Years, the
      fixed rent attributable to the Expansion Premises, Parcel A and Parcel B,
      shall be Four Hundred Ninety Thousand Ninety Two and 93/100 ($490,092.93)
      Dollars per annum payable in equal monthly installments of
      $40,841.08;

            

    

     

    
      	
               
      

            	
              vi.

            	
              During
      each of the sixteenth, seventeenth and eighteenth New Lease Years, the
      fixed rent attributable to the Expansion Premises, Parcel A and Parcel B,
      shall be Five Hundred Two Thousand Three Hundred Forty Five and 25/100
      ($502,345.25) Dollars per annum payable in equal monthly installments of
      $41,862.10; and

            

    

     

    
      	
               
      

            	
              vii.

            	
              During
      each of the nineteenth and twentieth New Lease Years, the fixed rent
      attributable to the Expansion Premises, Parcel A and Parcel B, shall be
      Five Hundred Fourteen Thousand Nine Hundred Three and 88/100 ($514,903.88)
      Dollars per annum payable in equal monthly installments of
      $42,908.66.

            

    

     

     

     

    
      
        
        

      

      
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    2.1.5                      Late
Fee.  Effective as of the date hereof, the following is hereby
inserted as a new sentence at the end of Paragraph 43(e) of the
Lease:

     

    Notwithstanding
the foregoing, in no event shall the late charge above exceed that maximum late
charge permitted by applicable law.  In the event such late charge
would exceed the maximum rate permitted by law, the actual late charge shall be
reduced to the maximum late charge permitted by law.

     

    
      	
               
      

            	
              2.1.6

            	
              Alterations.  Effective
      as of the date hereof, Paragraph 49 of the Lease is deleted and the
      following is hereby inserted in lieu
thereof:

            

    

     

    49.           (A)           Except
as provided herein, Tenant shall make no alterations, decorations,
installations, additions or improvements (hereinafter collectively referred to
as “Alterations”) in or to the Demised Premises without Landlord’s consent which
shall not be unreasonably withheld, conditioned or delayed.  All such
Alterations shall be performed at the sole cost and expense of
Tenant.  Tenant shall pay Landlord for all reasonable costs and
charges for such Alteration actually incurred by Landlord in reviewing plans in
connection with such Alterations and the reasonable cost and expenses, actually
incurred in ensuring that such Alterations are made in accordance with the terms
hereof.

     

    (B)           All
Alterations including the Expansion Premises Work and any future Alterations
pertaining to Parcel A or Parcel B (collectively, the “Permitted Alterations”)
shall be performed in accordance with the following provisions:

     

    (i)           All
Permitted Alterations done by Tenant shall at all times comply with (a) laws,
rules, orders and regulations of governmental authorities having jurisdiction
thereof, and (b) rules and regulations of the Landlord applicable to the Demised
Premises.

     

    (ii)           With
respect to all Permitted Alterations, architectural and engineering plans and
specifications prepared by and at the expense of Tenant shall be submitted to
Landlord for its prior written approval in accordance with the following
requirements:

     

     

    
      
        
        

      

      
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              a.

            	
              With
      respect to any Permitted Alterations to be performed by Tenant pursuant to
      this Lease, Tenant shall, at its expense, furnish Landlord with complete
      architectural, mechanical and electrical construction documents for work
      to be performed by Tenant (the “Tenant’s Plans”).  All of the
      Tenant’s Plans shall: (x) comply with all applicable laws and the rules,
      regulations, requirements and orders of any and all governmental agencies,
      departments or bureaus having jurisdiction, and (y) be fully detailed,
      including locations and complete
dimensions;

            

    

     

    
      	
               
      

            	
              b.

            	
              Tenant’s
      Plans shall be subject to approval by Landlord, such approval not to be
      unreasonably withheld, conditioned or delayed; Landlord shall have twenty
      (20) days to render its decision.  Failure to render a decision
      within such time period shall be deemed Landlord’s consent to Tenant’s
      Plans.

            

    

     

    
      	
               
      

            	
              c.

            	
              Tenant
      shall, at Tenant’s expense, (x) cause Tenant’s Plans to be filed with the
      governmental agencies having jurisdiction there over, (y) obtain when
      necessary all governmental permits, licenses, authorization required for
      the work to be done in connection therewith, and (z) obtain all necessary
      certificates of occupancy, both temporary and
      permanent.  Landlord shall execute such documents as may be
      reasonably required in connection with the foregoing and Landlord shall
      otherwise cooperate with Tenant in connection with obtaining the
      foregoing, but without expense to Landlord.  Tenant shall make
      no amendments or additions to Tenant’s Plans without the prior written
      reasonable consent of Landlord in each
instance;

            

    

     

    
      	
               
      

            	
              d.

            	
              No
      work (including the Expansion Premises Work) including any future work
      pertaining to Parcel A or Parcel B shall commence until (x) Tenant has
      procured all necessary permits therefor and has delivered copies of same
      to Landlord, (y) Tenant has procured a paid builder’s risk insurance
      policy naming Landlord as an additional insured and has delivered to
      Landlord a certificate of insurance evidencing such policy, and (z) Tenant
      or its contractor has procured a workmen’s compensation insurance policy
      covering activities of all persons working at the Premises naming Landlord
      as an additional insured and has delivered to Landlord a certificate of
      insurance evidencing such policy;

            

    

     

    
      	
               
      

            	
              e.

            	
              Tenant
      may use any licensed architect or engineer to prepare its plans and to
      file for permits.  However, all such plans and permit
      applications shall be subject to review, revision and reasonable approval
      by Landlord or its architect;

            

    

     

    
      	
               
      

            	
              f.

            	
              Tenant,
      at its expense, shall perform all work in connection with all Permitted
      Alterations, in accordance with Tenant’s Plans and Tenant shall pay any
      reasonable third party out of pocket costs incurred by Landlord with
      respect to the review and approval of Tenant’s
  Plans.

            

    

     

     

     

     

    
      
        
        

      

      
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    (iii)           Tenant
shall defend, indemnify and save harmless Landlord, its officers, directors,
shareholders, agents and employees against any and all mechanics’ and other
liens filed in connection with its Permitted Alterations, repairs or
installations, including the liens of any conditional sales of, or chattel
mortgages upon, any materials, fixtures or articles so installed in and
constituting part of the Demised Premises and against any loss, cost, liability,
claim, damage and expense, including reasonable counsel fees, penalties and
fines incurred in connection with any such lien, conditional sale or chattel
mortgage or any action or proceeding brought thereon.  As a condition
precedent to Landlord’s consent to the making by Tenant of Permitted
Alterations, Tenant agrees to obtain and deliver to Landlord, written
unconditional waivers of mechanics’ liens for all work, labor and services to be
performed and materials to be furnished, signed by all contractors,
subcontractors, materialmen and laborers to become involved in such
work.

     

    (iv)           Tenant,
at its expense, shall procure the satisfaction, discharge or bonding of all such
hens within ten (10) days of the filing of such lien against the Demised
Premises or the Building.  If Tenant shall fail to cause such lien to
be discharged within the aforesaid period, then, in addition to any other
remedy, Landlord may, but shall not be obligated to, discharge the same either
by paying the amount claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings, and in any such event Landlord shall
be entitled, if Landlord so elects, to compel the prosecution of an action for
the foreclosure of such lien by the lienor and to pay the amount of the judgment
in favor of the lienor with interest, costs and allowances.  Any
amount so paid by Landlord, and all costs and expenses incurred by Landlord in
connection therewith, together with interest thereon at the maximum rate
permitted by law from the respective dates of Landlord’s making of the payments
or incurring of the cost and expense, shall constitute additional rent and shall
be paid on demand.

     

    (v)           Nothing
in this Lease contained shall be construed in any way as constituting the
consent or request of Landlord, expressed or implied, to any contractor,
subcontractor, laborer or materialmen for the performance of any labor or
furnishing of any material for any improvement, alteration or repair of the
Demised Premises, nor as giving any right or authority to contract for the
rendering of any services or the furnishing of any materials that would give
rise to the filing of any mechanics’ liens against the Demised
Premises.

     

     

    
      
        
        

      

      
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    2.1.7                      Assignment, Mortgaging,
Sublease.  Effective as of the date hereof, Paragraph 54 of the
Lease is hereby modified and amended by inserting the following at the end
thereof:

     

    In
determining reasonableness pursuant to Paragraph 11 hereof, there shall be taken
into account the character and reputation of the proposed subtenant or assignee,
the specific nature of the proposed subtenant’s or assignee’s business and
whether same is in keeping with other tenancies in the Building; the financial
standing of the proposed subtenant or assignee; and the impact of all of the
foregoing upon the Demised Premises.  Landlord shall not be deemed to
have unreasonably withheld its consent if it refuses to consent to a subletting
or assignment to a proposed subtenant or assignee with whom Landlord is
negotiating a lease for a comparable parcel in the same area as the Demised
Premises.

     

    In the
event Tenant shall request Landlord’s consent to a proposed assignment of this
Lease or proposed sublease of all or a portion of the Demised Premises, Tenant
shall pay or reimburse Landlord the reasonable attorney fees incurred by
Landlord in processing such request.

     

    Notwithstanding
anything contained herein to the contrary, no assignment or subletting shall be
made by Tenant, which in the aggregate totals more than fifty percent (50%) of
the square footage leased (excluding land which is not encumbered by a leasable
building) by Tenant at the time such consent is requested, in any event until
Tenant has offered to terminate this Lease as of the last day of any calendar
month during the Term hereof and to vacate and surrender the Demised Premises to
Landlord on the date fixed in the notice served by Tenant upon Landlord (which
date shall be prior to the date of such proposed assignment or the commencement
date of such proposed lease).  Simultaneously with said offer to
terminate this Lease, Tenant shall advise the Landlord, in writing, of the name
and address of the proposed assignee or subtenant, a reasonably detailed
statement of the proposed subtenant/assignee’s business, reasonably detailed
financial references, and all the terms, covenants, and conditions of the
proposed sublease or assignment.

     

    In the
event of an assignment or subletting, Tenant shall remit to Landlord as
Additional Rent each month during the remainder of the Term any rent or other
sums received by Tenant from its assignee or subtenant in excess of the fixed
rent, additional rent and other charges paid by Tenant with respect to the
Demised Premises or allocated to the portion thereof sublet, as the case may
be.

     

    2.1.8                      Insurance.           Effective
as of the date hereof, Paragraph 55 is hereby modified and amended by (a)
deleting “One Million Dollars ($1,000,000.00) Dollars” in Paragraph 55(a)
thereof and inserting “Five Million ($5,000,000.00) Dollars in lieu thereof; and
(b) inserting the following as a new Paragraph 55(f):

     

    Each
party shall cause their respective insurers to waive their right of subrogation
with respect to their insurance policies.

     

    2.1.9                      Holdover.            Effective
as of the date hereof, the following is hereby inserted as a new Paragraph
70(f):

     

     

     

    
      
        
        

      

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

     

    (i) pay
as holdover rental, (a) beginning on the date which is thirty (30) days after
the Extended Expiration Date, an amount equal to the greater of (x) the fair
market rental value of the Demised Premises for such month (as reasonably
determined by Landlord) or (y) one hundred twenty-five (125%) percent of the
fixed rent payable by Tenant for the last month prior to the expiration date of
the term of the Lease, and, (b) beginning on the date which is sixty (60) days
after the Extended Expiration Date, an amount equal to the greater of (x) the
fair market rental value of the Demised Premises for such month (as reasonably
determined by Landlord) or (y) one hundred fifty percent (150%) of the fixed
rent payable by Tenant for the last month prior to the expiration of the term of
the Lease, and otherwise observe, fulfill and perform all of its obligations
under this Lease, including but not limited to, those pertaining to additional
rent, in accordance with its terms;

     

    (ii) be
liable to Landlord for any damages suffered by Landlord as the result of
Tenant’s failure to surrender the Premises.

     

    No
holding over by Tenant after the term shall operate to extend the
term.

     

    The
holdover, with respect to all or any part of the Demised Premises, of a person
deriving an interest in the Demised Premises from or through Tenant, including,
but not limited to, an assignee or subtenant, shall be deemed a holdover by
Tenant.

     

    Notwithstanding
anything in this Article contained to the contrary, the acceptance of any rent
paid by Tenant pursuant to this Paragraph 70(f), shall not preclude Landlord
from commencing and prosecuting a holdover or eviction action or proceeding or
any action or proceeding in the nature thereof.

     

    2.1.10                      Options to Further
Expand.  Effective as of the date hereof, the following
provisions are hereby inserted in the Lease as new Paragraphs 71 and
72:

     

    71.           Expansion
Rights.  (A) Provided that Tenant (i) is not then in default of
any of its obligations under the Lease beyond any notice or cure period provided
herein for the cure thereof; (ii) has substantially completed the Expansion
Premises Work, and (iii) there is at least five (5) years remaining on the term
of this Lease or any extension term, Tenant shall have the right to further
expand the Building (the “Future Expansion Work”) under the terms and subject to
the conditions contained in this Paragraph 71.  In the event there is
less than five (5) years remaining on the term of this Lease as extended
Tenant’s rights to perform Future Expansion Work shall be subject to Landlord’s
approval, which shall not be unreasonably withheld, conditioned or
delayed.

     

    (B) In
the event that Tenant desires to perform Future Expansion Work, Tenant shall (1)
submit to Landlord two (2) sets of detailed plans and specifications (including
layout, architectural, mechanical and structural drawings) for all proposed
Future Expansion Work (the “Future Expansion Plans and
Specifications”).  Tenant shall not commence any such Future Expansion
Work without first obtaining Landlord’s consent therefore which consent shall
not be unreasonably withheld, conditioned or delayed.  Upon its
receipt of the Future Expansion Plans and Specifications, Landlord shall have
twenty (20) days to respond by delivering to Tenant a notice of its denial or
acceptance of the plans (the “Landlord Expansion Notice”).  If
Landlord denies the Future Expansion Plans and Specifications, then Landlord
shall include in the Landlord Expansion Notice, in reasonable detail, the
reasons for its denial.  Tenant agrees to cooperate with Landlord with
regard to any request for additional information contained in the Landlord
Expansion Notice.  If Landlord fails to respond to the Landlord
Expansion Notice within twenty (20) days such failure to respond shall be deemed
consent to the Future Expansion Plans and Specifications.

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (C)           If
there is a dispute between Landlord and Tenant as to the reasonableness of
Landlord’s refusal to consent to the Future Expansion Plans and Specifications,
then Tenant may, at its option, as its sole and exclusive remedy, send a written
notice to Landlord (the “Buy/Sell Trigger Notice”) within thirty (30) days of
its receipt of Landlord’s Expansion Notice requesting that Tenant desires to
purchase all of Parcels A, B and C, together with all existing facilities, and
improvements (collectively, the “Landlord Fee Estate”) under the terms and
conditions set forth in subparagraph (D) of this Paragraph 71.

     

    (D)           If
Tenant exercises its rights to purchase the Landlord Fee Estate by delivering
the Buy/Sell Trigger Notice to Landlord in a timely manner, then the parties
agree that Tenant shall have the right to purchase the Landlord Fee Estate at
its Fair Market Value as determined by the terms set forth in this Paragraph 71
(D).  Upon determination of the Fair Market Value the parties shall
promptly enter into a contract in a form substantially similar to the Contract
of Sale annexed hereto as Exhibit C and made a
part hereof.

     

    (i)           “Fair
Market Value” shall mean the greater of (x) that consideration Landlord would
receive for comparable land and improvements in the Atlanta Georgia area, as
determined by an appraiser of Landlord’s discretion, and reasonably accepted by
Tenant, with at least five (5) years experience in appraisals of similar
commercial properties (based on the highest and best use of the Landlord Fee
Estate) or (y) an amount equal to the then current income stream of the Property
(excluding any debt service) capitalized at a rate of nine (9%)
percent.

     

    (ii)           In
the event Tenant disputes Landlord’s determination of Fair Market Value, as
determined pursuant 71(D)(i) above, Tenant, by written demand served upon
Landlord within five (5) days after Landlord notifies Tenant of Landlord’s
determination of Fair Market Value, may commence arbitration strictly in
accordance with the terms and conditions of this Subparagraph (i).  If
Tenant shall fail to demand arbitration within a five (5) day period, Tenant
shall be deemed to have accepted Landlord’s determination of Fair Market
Value.  The sole issue to be determined by such arbitration shall be
the Fair Market Value in accordance with this Subparagraph.  Such
written demand shall contain the name and address of the arbitrator appointed by
the demandant.  Within ten (10) days after its receipt of the written
demand, the other party will give the demandant written notice of the name and
address of its arbitrator.  Within ten (10) days after the date of the
appointment of the second arbitrator, the two (2) arbitrators will
meet.  If the two (2) arbitrators are unable to agree on the Fair
Market Value, as provided herein within ten (10) days after their first meeting,
they will select a third arbitrator.  The third arbitrator will be
designated as chairman and will immediately give Landlord and Tenant written
notice of its appointment.  The three (3) arbitrators will meet within
ten (10) days after the appointment of the third arbitrator.  If they
are unable to agree on the Fair Market Value within ten (10) days after their
first meeting, the third arbitrator will select a time, date and place for a
hearing and will give Landlord and Tenant thirty (30) days prior written notice
of it.  The date for the hearing will not be more than sixty (60) days
after the date of appointment of the third arbitrator.  The
arbitrators must be licensed real estate appraisers with at least five (5) years
experience in the Atlanta real estate market.  No arbitrator may be an
active real estate broker.  The arbitration will be governed by the
Laws of the State of Georgia, and, when not in conflict with such law, by the
general procedures in the commercial arbitration rules of the American
Arbitration Association.  The arbitrators will not have the power to
add to, modify, detract from or alter in any way the provisions of this Lease or
any amendments or supplements to this Lease.  The arbitrators will not
have any power to decide or consider anything other than the specific issue of
the Fair Market Value in accordance with the terms of this Lease.  The
written decision of at least two (2) arbitrators will be conclusive and binding
upon Landlord and Tenant.  No arbitrator is authorized to make an
award for damages of any kind including, without limitation, an award for
punitive, exemplary, consequential or incidental damages.  Landlord
and Tenant will pay for the services of its appointees, attorneys and witnesses
plus one-half of all other proper costs relating to the
arbitration.  The decision of the arbitrators will be final and
non-appealable and may be enforced according to the laws of the State of
Georgia.

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    72.           Right of First Offer for
Building:  (A) In the event that Landlord desires to sell the
Building during the term of the Lease, then before offering it for sale to a
third party, and so long as Tenant is not in default under this Lease beyond any
notice or cure period provided herein for the cure thereof, Landlord shall
notify Tenant (“Landlord’s Notice”) of its intention to sell the Building
(“Right of First Offer”) Tenant shall, within forty-five (45) days after receipt
of Landlord’s Notice, notify the Landlord in writing (“Tenant’s Notice”) of its
intention to exercise Tenant’s right to purchase the Building (which Tenant’s
Notice shall include an offer price for which Tenant shall be willing to
purchase the Building (the “Original Tenant Offer Price”).  If Tenant
does not give such Tenant’s Notice within such forty-five (45) day period as
required above, then this Right of First Offer will lapse and be of no further
force and effect and Landlord shall have the right to sell to a third party (or
parties) on the same or any other terms and conditions, whether or not such
terms and conditions are more or less favorable than those offered to Tenant,
and Landlord shall not be required to re-offer to Tenant.

     

    (B)           If
Tenant exercises its Right of First Offer by timely delivering Tenant’s Notice
with the Original Tenant Offer Price then Landlord will have ten (10) days to
accept or reject the Original Tenant Offer Price.  If Landlord accepts
the Original Tenant Offer Price, then the parties agree to promptly enter into a
contract in a form substantially similar to the Contract of Sale annexed hereto
as Exhibit C and made a part hereof.  If Landlord rejects the Original
Tenant Offer Price then Landlord shall be precluded from selling the Building to
a third party within the following six months, unless such sale is for an amount
greater than 2.5% more than the Original Tenant Offer Price.  After
the six month period, the Right of First Offer shall commence again as stated
above in subparagraph 72 (A).  Time is of the essence with respect to
all of Tenant’s obligations under this Paragraph 72.

     

    (C)           This
Right of First Offer is personal to Sid Tool Co., Inc., is non-transferable by
operation of law or otherwise, and is subject to then existing rights, if any,
granted to other tenants at the Building.

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    2.1.11                      Change of
Control

     

    (A)           In
the event that there is a “Change of Control” (hereinafter defined), then Tenant
shall deliver to Landlord either (i) cash in the amount equal to six (6) months
of the then escalated fixed rent due under the Lease or (ii) a clean,
unconditional, irrevocable, non-documentary standby letter of credit (in
accordance with the requirements set forth in subparagraph (C) below) in the
amount equal to six (6) months of the then escalated fixed rent as security for
the full and faithful performance and observance by Tenant of all of the terms,
conditions, covenants and agreements of this Lease.  The term “Change
in Control” as used herein shall mean the point in time when the Jacobson &
Gershwind families no longer control MSC Industrial Direct Co.,
Inc.

     

    (B)           In
the event Tenant defaults in payment of fixed rent, additional rent, or other
sums due from Tenant to Landlord under this Lease, or in performance or
observance of any other term, provision, covenant, condition or agreement of
this Lease, after the expiration of applicable notice periods provided herein
for the cure thereof, more than twice in such year, Landlord may notify the
“Issuing Bank” (hereinafter defined) and thereupon draw on the letter of credit
or the cash security, as the case may be, in whole or part, from time to time,
at Landlord’s election, and use, apply or retain the whole or any part of such
proceeds to the extent required for the payment of any sums as to which Tenant
is in default (including, without limitation, any damages or deficiency accrued
before or after summary proceedings or other re-entry by Landlord) or for
coverage or reimbursement of any sums which Landlord may expend or may be
required to expend by reason of such default by Tenant.  In the event
Landlord so uses, applies or retains all or any portion of such monies
represented by the letter of credit or the cash security, Tenant shall forthwith
restore the amount so used, applied or retained, upon delivery of written notice
by Landlord detailing such use, application or retention, through delivery of
cash or a certified or bank check payable to Landlord.  In the event
Landlord shall not apply all of the proceeds of such letter of credit or the
cash security to cover Tenant’s default as permitted hereunder, Landlord shall
hold the unapplied portion of such proceeds (and the restoration amount required
pursuant to the preceding sentence) as a security deposit under this Lease, and
thereafter apply such funds as permitted under this subparagraph
(B).  In the event that Tenant shall fully and faithfully comply with
all of the terms, provisions, covenants and conditions of this Lease, the letter
of credit or cash security deposit then being held by Landlord, whichever may be
the case, shall be returned to Tenant (or to the Issuing Bank, in the case of a
letter of credit) after the Expiration Date and after delivery by Tenant of
entire possession of the Demised Premises to Landlord in strict accordance with
the terms of this Lease.  Tenant expressly agrees that Tenant shall
have no right to apply any portion of the proceeds which Landlord may have drawn
under the letter of credit against Tenant’s obligations to pay fixed rent or
additional rent under this Lease.

     

    (C)           The
clean, unconditional, irrevocable, non-documentary, standby letter of credit to
be delivered by Tenant pursuant to this Article shall be in form and content
satisfactory to Landlord and shall conform to each the following
requirements:

     

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

    (i)           such
letter of credit may only be issued by and drawable upon a commercial bank,
trust company, national banking association, or savings and loan association
with offices for banking and drawing purposes in New York City (the “Issuing
Bank”), which has outstanding, unsecured, uninsured and unguaranteed
indebtedness, or shall have issued a letter of credit or other credit facility
that constitutes the primary security for any outstanding indebtedness (which is
otherwise iminsured or unguaranteed), that is then rated, without regard to
qualification of such rating by symbols such as “+” or “-” or numerical.
notation, “Aa” or better by Moody’s Investors Service and “AA” or better by
Standard & Poor’s Ratings Service (and is not on credit-watch with negative
implications), and has combined capital, surplus and undivided profits of not
less than $500,000,000.00;

     

    (ii)           such
letter of credit shall indicate the address of the Issuing Bank in New York
City, Nassau or Suffolk County where it can be drawn upon;

     

    (iii)           such
letter of credit shall name Landlord as beneficiary under the letter of credit
with its address:

     

    
      	
               
      

            	
              c/o

            	
              the
      Jacobson Family Investments

            

    

     

    
      	
               
      

            	
              152
      West 57th
      Street, 56th
      Floor

            

    

     

    
      	
               
      

            	
              New
      York, New York  10019

            

    

     

    (iv)           such
letter of credit must be payable to Landlord or an authorized representative of
Landlord upon presentation of only the letter of credit and a sight draft, and
shall not contain as a condition to a draw the requirement of Landlord’s
certification or other statement as to the existence of Tenant’s
default;

     

    (v)           such
letter of credit shall be deemed to be automatically renewed, without amendment,
for consecutive one year periods through a date which is not earlier than sixty
(60) days after the Extended Expiration Date of this Lease, or any renewal or
extension thereof, unless written notice of non-renewal has been given by the
Issuing Bank to Landlord (sent to Landlord via certified mail, return receipt
requested, attention:  Bob Small, at the address set forth in
subparagraph (iii) above) at least sixty (60) days prior to the then current
expiration date of the letter of credit.  Upon the Issuing Bank’s
giving of such notice, Tenant must replace said letter of credit with a new
letter of credit satisfying the requirements of this Article at least thirty
(30) days prior to the expiration date of the existing letter of
credit.  Failure by Tenant to replace the existing letter of credit as
required herein shall constitute a default under this Lease and there shall be
no notice or opportunity to cure said default.  Thereupon, Landlord
shall be permitted to draw upon the existing letter of credit up to the full
amount thereof;

     

    (vi)           such
letter of credit shall permit multiple drawings;

     

    (vii)          such
letter of credit shall not be transferable by Landlord without the consent of
Tenant.  Notwithstanding the foregoing, in the event of a transfer of
Landlord’s interest in this Lease or the Property, Tenant shall use its
commercially reasonable efforts to have such letter of credit terminated and
thereafter reinstated under the same terms and conditions in favor of the new
landlord or owner, as the case may be; Landlord shall accommodate Tenant’s
reasonable requests in order to effect the surrender of such letter of credit;
and

     

    (viii)         such
letter of credit shall be subject to the International Standby Practices 1998,
International Chamber of Commerce Publication No. 590.

     

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Tenant
acknowledges and agrees that Landlord shall have no responsibility or liability
on account of any error by the Issuing Bank.

     

    (D)           In
the event of a sale of the Building or a leasing of the Building, or any
financing of Landlord’s interest therein, Landlord shall have the right to
transfer its rights under the letter of credit (or cash security deposit, as
applicable) to the vendee, lessee or mortgagee, and Landlord shall thereupon be
released by Tenant from all liability in connection with such letter of credit
(or security deposit, as applicable); Tenant agrees to look solely to the new
landlord or such mortgagee with respect to the return of, or any dispute arising
in connection with, such letter of credit (or security deposit); and the
provisions hereof shall apply to every transfer or assignment made of such
rights to a new landlord or mortgagee.  Within ten (10) days after
notice from Landlord of any such sale, leasing or financing, Tenant, at its sole
cost, shall arrange for the transfer of the letter of credit to the new landlord
or mortgagee, as designated by Landlord in such notice, or have the letter of
credit reissued in the name of the new landlord or mortgagee.  Tenant
shall pay upon Landlord’s demand, as additional rent, all costs and fees charged
in connection with the letter of credit that arise due to (i) Landlord’s
transfer of its rights under the letter of credit in connection with such sale,
lease or financing, or (ii) the addition, deletion or modification of any
beneficiary under the letter of credit.

     

    (E)           Tenant
shall not assign or encumber or attempt to assign or encumber the letter of
credit (or security deposit).  Any such assignment, encumbrance,
attempted assignment or attempted encumbrance by Tenant shall be deemed void and
of no force or effect, nor shall same be binding upon Landlord or its successors
or assigns.

     

    (F)           Tenant
shall cooperate, at its expense, with Landlord to promptly execute and deliver
to Landlord any and all modifications, amendments, and replacements of the
letter of credit, as Landlord may reasonably request to carry out the intent,
terms and conditions of this Article.

     

    (G)           In
the event that Tenant fails to deliver the cash or letter of credit as required
hereunder, such failure shall be deemed a tenant default under this Lease and
entitle Landlord to pursue any and all of its rights under law or in
equity.

     

    (H)           The
acceptance of the letter of credit (or cash security deposit, as applicable) or
the exercise of any remedies under this Article by Landlord shall not be a
limitation on Landlord’s damages, remedies or other rights under this Lease, or
construed as a payment of liquidated damages or an advance payment of fixed rent
or additional rent.

     

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    2.1.12                      Nondisturbance
Agreement.

     

    (A)           Subject
to Landlord’s obligation to provide a “Non-disturbance Agreement” (hereinafter
defined) in accordance with the terms hereof, the rights of Tenant hereunder,
are and shall be subject and subordinate in all respects to all future mortgages
and building loan agreements, which may now or hereafter affect the land and/or
the building(s) under this Lease (“superior mortgages”) and to each and every
advance made or hereafter to be made under the superior mortgages and to all
renewals, modifications, replacements and extensions of the superior mortgages
and spreaders, consolidations and correlations of the superior
mortgages.  Provided that in the event of a financing or refinancing
of the Property, the mortgagee shall execute and deliver to Tenant an agreement
to the effect that, if there shall be a foreclosure of its mortgage, such
mortgagee will not make Tenant a party defendant to such foreclosure, evict
Tenant, disturb Tenant’s possession under this Lease, or terminate or disturb
Tenant’s leasehold estate or rights hereunder, and will recognize Tenant as the
direct tenant of such mortgagee on the same terms and conditions as are
contained in this Lease, subject to the provisions hereinafter set forth,
provided no default shall have occurred and be continuing hereunder (any such
agreement, or any agreement of similar import, from a mortgagee being
hereinafter referred to as a “Nondisturbance Agreement”) and this Lease shall be
subject and subordinate to such mortgage.  This clause shall be
self-operative and no further instrument of subordination shall be required from
Tenant to make the interest of any mortgagee superior to the interest of Tenant
hereunder.  Tenant, however, at Tenant’s sole cost and expense, shall
execute and deliver promptly the Nondisturbance Agreement or any other agreement
that Landlord may reasonably request in confirmation of such
subordination.

     

    (B)           If
required by the mortgagee, within seven (7) days after notice thereof, Tenant
shall join in any Nondisturbance Agreement to indicate its concurrence with the
provisions thereof and its agreement set forth in this Paragraph 74 to attorn to
such mortgagee, as Tenant’s landlord hereunder.  Tenant shall promptly
so accept, execute and deliver any Nondisturbance Agreement proposed by any such
mortgagee which conforms to the provisions of this Paragraph 74.  Any
such Nondisturbance Agreement may also contain other terms and conditions as may
otherwise be require by such mortgage, which do not increase Tenant’s monetary
obligations under this Lease, or adversely affect or diminish the rights, or
increase the other obligations of Tenant under this Lease.

     

    (C)           If
at any time prior to the expiration of the term, any mortgagee comes into
possession of the Property, Tenant agrees, at the election and upon demand of
any owner of the Property, or of any mortgagee in possession of the Property, to
attorn, from time to time, to any such owner or mortgagee or as a result of a
foreclosure of the mortgage or the granting of a deed in lieu of foreclosure,
upon the then executory terms and conditions of this Lease, subject to the
provisions of this Paragraph 74, for the remainder of the term, provided that
such owner or mortgagee, as the case may be, shall then be entitled to
possession of the Premises.  Tenant upon demand of any such owner or
mortgagee, shall execute, at Tenant’s expense, from time to time, instruments,
in recordable form, in confirmation of the foregoing provisions of this
Paragraph 74, satisfactory to any such owner or mortgagee, acknowledging such
attornment and setting forth the terms and conditions of its
tenancy.  Nothing contained in this Paragraph 74 shall be construed to
impair any right otherwise exercisable by any such owner or
mortgagee.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    2.1.13                      Like-Kind
Exchange.

     

    Tenant
understands that Landlord may seek to structure the disposition of its interest
in the Premises in such a way that will afford Landlord an opportunity to take
advantage of the provisions of Section 1031 of the
Internal Revenue Code of 1986, as amended and the Treasury Regulations
promulgated thereunder governing “like-kind”
exchanges.  Tenant shall cooperate with Landlord in such efforts
provided Tenant shall not be responsible for any costs and/or expenses in
connection therewith.  Without limiting the generality of the
foregoing, Tenant as directed by Landlord, shall make all payments on account of
the purchase price under any contract of sale entered pursuant to the terms of
this Lease including any deposit thereunder, to a Qualified Intermediary (as
defined in the Treas. Reg. 1.1031(k)-1(g)(4)).  Landlord reserves the
right, in effectuating such like-kind exchange, to assign Landlord’s rights, but
not its obligations, under any agreement to the Qualified Intermediary and
Tenant hereby consents to such assignment. Tenant agrees to execute such
reasonable documents and otherwise to cooperate in such respects as may
reasonably be requested by Landlord in order to enable Landlord to carry out a
like-kind exchange as aforesaid.  Notwithstanding anything contained
herein to the contrary, (a) Tenant shall not incur (except to a de minimus extent) additional
costs or expenses, or have any of its obligations under any agreement increased
or any of its rights hereunder reduced, in connection with the like-kind
exchange, and (b) Landlord shall indemnify Tenant for all loss, cost, expense,
damages and liabilities, including, without limitation, attorneys’ costs and
expenses, incurred by Tenant in connection with such like-kind
exchange.  In the event that the Landlord fails to arrange such a
like-kind exchange, the transaction shall nevertheless be consummated as a sale
and purchase.

     

    ARTICLE
III

     

    Broker

     

    3.1 Landlord
and Tenant each represents that this Agreement was not brought about by any
broker and all negotiations with respect to this Agreement were conducted
exclusively between Landlord and Tenant.  Landlord and Tenant agree
that if any claim is made for commissions by any broker through or on account of
any acts of Landlord or Tenant, Landlord and Tenant will hold each other free
and harmless from any and all liabilities and expenses in connection therewith,
including Landlord’s or Tenant’s reasonable attorney’s fees and
disbursements.

     

    ARTICLE
IV

    Ratification

     

    4.1 Tenant
represents and warrants that the Lease is presently in full force and effect,
that it knows of no event of default on the part of Landlord and that Tenant has
no defense or right of offset in connection with Landlord’s performance under
the Lease to this date.

     

    4.2 The
parties hereby ratify and confirm all of the terms, covenants and conditions of
the Lease, except to the extent that those terms, covenants and conditions are
amended, modified or varied by this Agreement.  If there is a conflict
between the provisions of the Lease and the provisions of this Agreement, the
provisions of this Agreement shall control.

     

    4.3 This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and there respective successors and/or assigns.

     

    
 

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have executed this Second Amendment to Lease as of
the day and year first above written.

     

     

                        MITCHMAR ATLANTA
PROPERTIES, INC

     

                        By:______________________________                                                                      

                        Name: Mitchell
Jacobson

                        Title:  
President

     

     

                        SID TOOL CO.,
INC.

     

                        By:______________________________                                                                      

                        Name: Shelly M.
Boxer

                        Title:  
Vice President-Finance

     

    

     

     

    19kl04016_ex10-4.htm

    
      

    

     

    Exhibit
10.4

     

     

    
 

    THIRD AMENDMENT TO LEASE
AGREEMENT

     

    AGREEMENT
made as of the 11th day of
November, 2003 by and between MITCHMAR ATLANTA PROPERTIES, INC., a
Delaware Corporation having its principal office at c/o Jacobson Family
Investments, 152 West 57th Street,
56th
Floor, New York, NY 10019 (hereinafter called “Landlord”), and SID TOOL CO., INC., a New York
corporation having its principal office at 75 Maxess Road, Melville, New York
11747 (hereinafter called “Tenant”).

     

    RECITALS

     

    WHEREAS,
Landlord and Tenant entered into an Agreement of Lease dated as of July 13,
1989, as amended by a First Amendment to Lease dated as of August 10, 1996 and
Second Amendment to Lease dated as of March, 2003 (collectively the “Lease”) for
the lease of the 376,738 square foot building (the “Building”) and an additional
148,000 square foot space (to be added to the Building by Tenant pursuant to the
Second Amendment of Lease) located at 6700 Discovery Boulevard, Mableton,
Georgia together with two building lots known as Parcel A and Parcel B as shown
on Exhibit A attached hereto and made a part hereof (the “Demised Premises” or
“Premises”); and

     

    WHEREAS,
Landlord and Tenant desire to amend the Lease as hereinafter set
forth.

     

    NOW,
THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

     

    ARTICLE
I

    Definitions

     

    1.1           The
recitals are specifically incorporated into the body of this Agreement and shall
be binding upon the parties hereto.

     

    1.2           Unless
expressly set forth to the contrary and except as modified by this Agreement,
all capitalized or defined terms shall have the meanings ascribed to them in the
Lease.

     

    ARTICLE
II

    Lease
Modifications

     

    2.1           Operating
Expenses.  Effective as of the date hereof, Paragraph 48a(1) of
the Lease, is hereby modified and amended by deleting such paragraph and
inserting the following:

     

    (a)           For
the purpose of this Lease,

     

    (1)           “Operating
Expenses” shall mean any and all costs and expenses (excluding Taxes) paid or
incurred by Tenant in connection with the operation, servicing, maintenance and
repair of the Building (or any part thereof) of which the Demised Premises is a
part and the parking lots and other facilities appurtenant thereto or used in
connection therewith

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (collectively,
the “Facility”). Tenant agrees to enter into contracts directly with the
appropriate companies and/or agencies to operate, service, maintain and repair
the Building, as Landlord shall deem reasonably necessary. Tenant shall provide
Landlord copies of all such contracts and/or other forms of proof of compliance
with this paragraph. Operating Expenses shall include, without limitation, the
following:”

     

    2.1.1                      Operating
Expenses.  Effective as of the date hereof, Paragraph 48b is
deleted in its entirety and the following shall be inserted;

     

    “Tenant
shall pay the amount of the Operating Expenses for such Operating Year directly
to the appropriate company and/or agency which provides such
service.”

     

    2.1.2                      Insurance.  Effective
as of the date hereof, Paragraph 55(a) of the Lease is hereby modified and
amended by inserting “Tenant covenants and represents that during the entire
term of this Lease it will provide and keep in force for the benefit of Owner
and others hereafter named by Owner from time to time fire and extended
coverage, rent casualty, boiler, sprinkler and any other insurance Landlord
shall reasonably require Tenant to carry, but in no event shall such insurance
be less than the full replacement value.”

     

    ARTICLE
III

    Broker

    

    3.1           Tenant
represents that this Agreement was not brought about by any broker and all
negotiations with respect to this Agreement were conducted exclusively between
Landlord and Tenant.  Tenant agrees that if any claim is made for
commissions by any broker through or on account of any acts of Tenant, Tenant
will hold Landlord free and harmless from any and all liabilities and expenses
in connection therewith, including Landlord’s reasonable attorney’s fees and
disbursements.

     

    ARTICLE
IV

    Ratification

     

    4.1           Tenant
represents and warrants that the Lease is presently in full force arid effect,
that no event of default has occurred on the part of Landlord and that Tenant
has no defense or right of offset in connection with Landlord’s performance
under the Lease to this date.

     

    4.2           The
parties hereby ratify and confirm all of the terms, covenants and conditions of
the Lease, except to the extent that those terms, covenants and conditions are
amended, modified or varied by this Agreement. If there is a conflict between
the provisions of the Lease and the provisions of this Agreement, the provisions
of this Agreement shall control.

     

    4.3           This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and/or assigns.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
 

    IN
WITNESS WHEREOF, the parties have executed this Lease Modification and Extension
Agreement as of the day and year first above written.

     

    

                    MITCHMAR ATLANTA
PROPERTIES, INC.

    

    

                    By:__________________________________

                      Name: J.
Robert Small

                     
Title:   Secretary

    

    

                    SID TOOL CO.,
INC.

    

    

                    By:_________________________________

                      Name: Shelley
M. Boxer

                     
Title:   V.P. Finance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]