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Exhibit 10.6
FIFTH
AMENDMENT OF LEASE AGREEMENT
THIS
FIFTH AMENDMENT OF LEASE AGREEMENT (this “Fifth
Amendment”) made as of the 25th day of March, 2008 by
and between MITCHMAR ATLANTA
PROPERTIES, INC. , a Delaware corporation, having its
principal office at c/o Jacobson Family Investments, 152 West
57 th
Street, 56 th
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, a Second Amendment to Lease dated as of
May 7, 2003 (“Second Amendment”), a Third
Amendment to Lease Agreement dated as of November 11, 2003,
and a Fourth Amendment of Lease Agreement dated as of March
17, 2007 (“Fourth
Amendment”) (collectively, the
“Lease”) for the leasing of the 376,738 square
foot building (the “Building”) and an additional
148,000 square foot space (added to the Building by Tenant
pursuant to the Second Amendment) located at 6700 Discovery
Boulevard, Mableton, Georgia, which Building is located on
“Parcel C” (the “Original Building
Lot”), together with two building lots known as Parcel A
and Parcel B, as shown on Exhibit A annexed hereto and made a
part hereof (the “Existing Premises”);
and
WHEREAS,
Landlord and Tenant desire to amend the Lease to, among other
things, lease to Tenant (i) an additional approximately
172,000 square foot warehouse addition, to be constructed by
Landlord on the Original Building Lot as an expansion to the
Building as more particularly shown on Exhibit A, pursuant to
the terms of this Fifth Amendment (the “Expansion
Premises”; the Existing Premises and the Expansion
Premises together comprise the “New Premises”),
(ii) extend the term of the Lease, as amended by this Fifth
Amendment, to the Extended Expiration Date (as hereinafter
defined), and (iii) modify certain other provisions of 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 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 and except as specifically
modified by this Fifth Amendment, all capitalized or defined terms
shall have the meanings ascribed to them in the Lease.
1.3
The
term “Effective Date,” as used herein, shall mean and
refer to the date which is the earliest 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, or (c) July 1, 2008. 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.
1.4
From
and after the Effective Date, the term “Building” shall
be deemed to include the Expansion Premises.
ARTICLE
II
Lease Modifications
2.1
Granting Clause and Construction of Expansion Premises Work
. (A) Effective as of the date hereof,
Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord the Expansion Premises in accordance with the terms
hereof.
(B) Landlord
shall perform, at Landlord's expense not to exceed the amount
of Five Million Three Hundred Seventy-Two Thousand Six Hundred
Seventy-Five Dollars ($5,372,675.00), the work as described on
Exhibit B attached hereto and made a part hereof (the
“Expansion Premises Work”). Landlord
shall perform the Expansion Premises Work in accordance with
all applicable laws, rules, orders, ordinances, regulations,
statutes, requirements, codes and executive orders of all
governmental authorities having jurisdiction over the
Expansion Premises Work, and of any applicable fire rating
bureau, or other body exercising similar
functions. Landlord shall perform Landlord's Work
in accordance with good construction practices prevailing in
the jurisdiction where the Expansion Premises Work is being
constructed. In the event that the cost of the
Expansion Premises Work exceeds the amount for which Landlord
is responsible as provided in this paragraph, Tenant shall pay
such excess periodically within 10 days after submission by
Landlord of an invoice therefor.
(C) Notwithstanding
that Landlord has agreed to perform the Expansion Premises
Work, nothing in the Lease, as amended by this Fifth
Amendment, shall require Landlord to pay for any
future expansions of, or additions to, the New
Premises.
2.2
Term . (A) Effective as of the
Effective Date, Section 2.1.3 of the Second Amendment 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-two (22) 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) For
the purposes of this Fifth Amendment, a “New Lease
Year” shall be comprised of twelve (12) consecutive
calendar months. The first New Lease Year shall
commence on July 1, 2008 and end on June 30, 2009 and each
succeeding New Lease Year shall commence on the next
succeeding July 1 and end on the next succeeding June
30. Notwithstanding the foregoing, if the Effective
Date is other than July 1, 2008, then the first Lease Year
shall include the additional period from the Effective Date
through and including June 30, 2008 (such additional period is
hereinafter referred to as the “Stub
Period”).
2.3
Rent . (A) With respect to the
Existing Premises, Tenant shall continue to pay fixed rent in
accordance with the terms of the Second Amendment through the
Effective Date. Such fixed rent shall be allocable
entirely to the Existing Premises.
(B) With
respect to the New Premises, effective as of the Effective
Date, the fixed rent shall be as set forth on Exhibit B
attached hereto and made a part hereof. If the
Effective Date is not the first day of a calendar month, then
the fixed rent for the period from the Effective Date to the
end of the calendar month in which the Effective Date occurs
shall be an amount equal to the product obtained by
multiplying (a) the number of days from the Effective Date to
the end of the calendar month in which the Effective Date
occurs, by (b) a fraction, the numerator of which is
$139,616.00 and the denominator of which is the number of days
in such calendar month in which the Effective Date
occurs.
(C) For
each rent period, each monthly installment of fixed rent
during such period shall be payable in advance on the first
day of each calendar month occurring during such
period.
2.4
Fair Market Rent Determination
. (A) The term “Fair Market Rent”
shall mean the annual fair market rental value of the New
Premises. The Fair Market Rent shall be determined
assuming that the New Premises is free and clear of all leases and
tenancies (including this Lease), that the New Premises is
available for the purposes permitted by this Lease in the then
rental market, that Landlord has had a reasonable time to locate a
tenant, and that neither Landlord nor the prospective tenant is
under any compulsion to rent, that the condition of the New
Premises is in compliance with the terms of this Lease, and taking
into account all other relevant factors.
(B) On
a date mutually agreed upon, but in no event later than one
hundred eighty (180) days before the end of the twentieth New
Lease Year, Landlord and Tenant shall each provide to the
other a rent notice for the determination of the Fair Market
Rent for the New Premises (the “Rent Notice”),
which Rent Notice shall set forth each of their respective
determinations of the Fair Market Rent (Landlord's
determination of the Fair Market Rent is referred to as
"Landlord's Determination" and Tenant's determination of the
Fair Market Rent is referred to as "Tenant's
Determination"). If (i) Landlord fails to give
Landlord's Determination to Tenant, and (ii) Tenant tenders
Tenant's Determination to Landlord, then the Fair Market Rent
for the New Premises shall be Tenant's
Determination. If (i) Tenant fails to give Tenant's
Determination to Landlord, and (ii) Landlord tenders
Landlord's Determination to Tenant, then the Fair Market Rent
for the New Premises shall be Landlord's
Determination.
(C) If
Tenant's Determination is different than Landlord's
Determination, then Landlord and Tenant shall attempt in good
faith to agree upon the Fair Market Rent for a period of
thirty (30) days after the date that Landlord gives
Landlord
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