EXHIBIT 10.18
LEASE EXTENSION AND EXPANSION AGREEMENT
THIS AGREEMENT made the 17th day of February, 2000, between XXXXXXX
ASSOCIATES LIMITED, a Limited Partnership, having an office at 0 Xxxxxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000 (Landlord) and DISC GRAPHICS, INC., a
Delaware corporation, located at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx
(Tenant).
WHEREAS, Landlord and Tenant (by its affiliated company DISC GRAPHICS
LABEL GROUP, INC.) entered into a Lease Agreement dated June 14, 1995 (the
Original Lease) for premises located at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx
Xxxxxx, consisting of 8,400 square feet of rental area more or less (the
Existing Area); and
WHEREAS, by letter agreement between the parties dated February 11,
1999, the Lease is scheduled to terminate on June 30, 2000; and
WHEREAS, Landlord anticipates that approximately 5,950 square feet of
rental area contiguous with the rental area covered by the Lease will become
available for rental to Tenant as of July 1, 0000 (xxx Xxxxxxxxxx Xxxx); and
WHEREAS, Landlord and Tenant desire and intend to set forth the terms
of an extension of the Lease, together with the terms of rental of the
Additional Area upon the terms and conditions hereafter set forth;
NOW THEREFORE, IN CONSIDERATION of the mutual covenants herein
contained, the parties agree as follows:
ORIGINAL LEASE
1. Original Lease Extension - Landlord and Tenant hereby agree to
extend the term of the Original Lease for a period of seven (7) years,
commencing July 1, 2000 and ending June 30, 2007.
2. Rent for Extension Term - The annual rent during the Extension Term
shall be as follows: (a) Years one and two, $44,100 per annum, payable in equal
monthly installments of $3,675; (b) Years three through seven, $48,300 per
annum, payable in equal monthly installments of $4,025.
ADDITIONAL AREA
3. Description of Additional Area - Subject to the provisions of
paragraph 13th (infra) Landlord does hereby lease to Tenant 5,950 square feet of
rental area contiguous with the rental area of the Original Lease, located at
000 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx, in the building containing
approximately 48,000 square feet of rental area.
4. Site Percentage - The Site Percentage attributable to the
Additional Area is 12.4% of the rentable area of the site.
5. Term for Additional Area - The term for the Additional Area is
seven (7) years, commencing July 1, 2000 and ending June 30, 2007.
6. Rent for Additional Area - The annual rent for the Additional Area
shall be as follows:
(a) Years one and two, $38,377 per annum, payable in monthly
installments of $3,198;
(b) Years three through seven, $38,972 per annum payable in
monthly installments of $3,248.
7. Security Deposit - Upon execution hereof Tenant shall deposit with
Landlord the sum of $3,500 as security for the rental of the Additional Area.
8. Parking - Modifying paragraph 37 of the Original Lease, Tenant
shall have the right to use a total of 23 parking spaces (13 associated with the
Existing Space and 10 associated with the Additional Space), 17 of which may be
used on a non-exclusive basis and in common with other tenants of the Building
and 6 of which, inclusive of existing exclusive spaces, proximate to the
entrances of the Existing Space and the Additional Space. These exclusive spaces
shall be designated by the Landlord and shall be for the exclusive use of
Tenant. Tenant may, at its expense, post signs at each exclusive use parking
space designating it as reserved for Tenant.
PROVISIONS COMMON TO ORIGINAL LEASE
AND ADDITIONAL AREA
9. Assignment and Subletting - If Tenant desires to assign this Lease
or sub-let all or any portion of the Existing Area or Additional Area, Tenant
shall communicate to Landlord in writing at least sixty (60) days prior to the
date that Tenant would like to assign the Lease or sub-let the premises the
following information:
1. Name and address of the proposed assignee or sub-lessee
2. Terms and conditions of the proposed assignment or sub-letting
3. Nature and character of the proposed business
4. Banking, financial and other credit information relating to the
proposed assignee or sub-lessee reasonably sufficient to enable the Landlord to
determine the proposed assignees or sub-lessees financial responsibility.
After receipt of the requested information Landlord shall have the
option (i) to recapture the proposed sub-leased or assigned area so that the
prospective assignee or sub-lessee shall become the direct Tenant of the
Landlord and the Tenant shall be fully released from any and all obligations
hereunder, except such obligations accruing prior to the date of termination.
For the purposes of this clause, date of termination shall be the date that the
term of the new Lease with the assignee or sub-lessee commences. (ii) Landlord
may consent to the assignment of this Lease or sub-letting of the demised
premises, upon compliance with the following terms and conditions:
(a) The assignee or sub-lessee shall assume by written instrument all
the obligations of this Lease and a copy of the Assignment and Assumption
Agreement shall be furnished to the Landlord within ten days of its execution;
(b) Tenant and any assignee or sub-lessee shall be and remain liable
for the observing of all covenants and provisions of this Lease including but
not limited to the payment of fixed rent and additional rent provided for herein
throughout the term of this Lease;
(c) Tenant and any assignee or sub-lessee shall promptly pay to
Landlord any and all rent received for assignment or sub-letting as and when
received in excess of the rent required to be paid by Tenant under the terms of
this Lease, and
(d) Tenant and the assignee or sub-lessee shall defend and hold
Landlord harmless from and against any and all claims from broker's commissions
or other claims in connection with the assignment or sub-letting.
(e) Tenant may not assign or sub-let all or part of the Demised
Premises to any present or former Tenant at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx
Xxxxxx.
In the alternative:
(iii) Landlord may deny consent to assignment of the Lease or
sub-letting of the demised premises; except the Landlord shall not unreasonably
deny, condition or delay its consent.
(iv) In the event Landlord consents to the assignment or sub-letting,
Tenant shall reimburse Landlord on demand for any reasonable costs that may be
incurred by Landlord in connection with any assignment or sub-lease including
but without limitation, the costs of making investigation as to the financial
acceptability of the proposed assignee or sub- lessee; legal costs incurred in
connection with preparation or review of any documents arising therefrom; and
costs of tenant review including reasonable legal expenses for same.
(v) Notwithstanding anything to the contrary contained in this
paragraph 9:
a. on written notice to Landlord, but without Landlord's prior
consent, Tenant may assign the Lease or sublet all or any portion of the
Existing Area or the Additional Area to a subsidiary or affiliated company in
which it has a controlling interest, provided Tenant remains fully liable under
the Lease; and
b. on written notice to Landlord and with Landlord's prior consent,
which shall not be unreasonably denied, conditioned or delayed, but without
Landlord's right to recapture the proposed assigned space, Tenant may assign all
but not less than all of the Existing Area or Additional Area it then occupies
to an entity that acquires all or substantially all of the stock or assets of
Tenant or with which Tenant otherwise combines, provided such entity's net worth
is at least as favorable as Tenant's.
10. Landlord's Work - Prior to occupancy by Tenant, Landlord agrees to
close the existing opening at the north demising wall of the additional area.
Except for such work, the Additional Area is leased in "as is" condition.
11. Tenant's Work - Immediately upon occupying the Additional Area, at
its expense Tenant will join the Existing Area and the Additional Area by
creating two openings in the common, non-bearing north demising wall, one of
which will be 16' wide by 12' high and the other will be 8' wide by 8' high. All
work will be performed by competent and where necessary licensed craftsmen in a
workmanlike manner and consistent with the standards of the original building
construction. Upon vacating the premises, at the request of the Landlord and at
Tenant's expense, Tenant will restore the demising wall to its original
condition. Tenant also intends to install in the Additional Space printing
equipment of the nature, size and weight of that present in the Existing Area.
Landlord hereby consents to such construction and to the installation of such
equipment, and such consent satisfied the requirements of paragraph 6th of the
Original Lease.
12. Option to Renew - Provided it has fully complied with all the
terms, covenants and conditions of this Lease, Tenant shall have the option to
renew the same either for the Existing Area or the Additional Area, or both, for
a five (5) year term commencing July 1, 2007 and terminating June 30, 2012 (the
Option Period); provided however, that written notice of exercise of the option
shall be given by Tenant to Landlord at least six (6) months prior to the end of
the term of this extended Lease. Annual rent during the Option Period shall be
as follows:
(i) Existing Area (8,400 square feet) $53,130 per annum payable in
monthly installments of $4,427.50;
(ii) Additional area (5,950 square feet) $42,869.75 per annum payable
in monthly installments of $3,572.48.
All other terms and conditions of the Original Lease as heretofore amended, and
supplemented or modified by this Agreement, shall be applicable during the term
of this extended lease and the Option Period.
13. Present Lease Terms - (a) Paragraph 4th of the Original Lease
entitled "Operational Costs and Taxes" is hereby amended to delete the last
sentence; and paragraph 39 of said Lease is superceded by the terms of this
Agreement. (b) Except as otherwise amended or superceded by the terms of this
Agreement, all terms, covenants and conditions of the Original Lease as amended
and supplemented, shall remain in full force and effect and are incorporated
herein by reference.
14. Additional Area - The Additional Area being leased by terms of
this Agreement is presently occupied by Ridge Associates. Tenant is aware that
Ridge Associates has informed Landlord of its intent to vacate the said premises
on or prior to June 30, 2000. In the event, however, Ridge Associates fails to
do so, Landlord will promptly make and diligently pursue an effort to remove
said Tenant by judicial process or otherwise, it being represented by Landlord
that the Lease between Landlord and Ridge Associates terminates as of June 30,
2000. The terms of this Agreement of Lease Extension and Expansion shall become
operative with respect to the Additional Space only when, as and if the
additional area is in fact vacated as herein provided.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and year first above written.
XXXXXXX ASSOCIATES LTD.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Attest:
DISC GRAPHICS, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Notary Public Xxxxx X. Xxxxx
