EXHIBIT 10.5
LEASE
BETWEEN
▇▇▇▇ INDUSTRIES, INC., AS TENANT,
AND
FAIRLAWN INDUSTRIES LTD., AS LANDLORD.
DATE: February 1, 2001
LANDLORD: FAIRLAWN INDUSTRIES LTD.
Notice Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Payment Address ▇▇ ▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
TENANT: ▇▇▇▇ Industries, Inc.
Notice Address: ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ 38
Fair Lawn, 07424-
Phone ▇▇▇-▇▇▇-▇▇▇▇
Federal ID#: 22-2357604
SIC Number: 3861
REAL ESTATE BROKER: None
PREMISES:
Size: Approximately 19,473 Square Feet, (the "Premises")
Location: ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇
USE OF PREMISES: For the manufacture, distribution, and warehousing of
electrical, electronic, optical, and lighting devices, along with associated
offices.
TERM: 5 Years
Beginning Date: February 1, 2001
Ending Date: January 31, 2006
BASE NET RENT: $7,300.00 per month
REAL ESTATE TAXES:
Proportionate Share: 2.6 %
Base Year: 2000
SECURITY DEPOSIT: $14,872.74, current on deposit with Landlord
LANDLORD IMPROVEMENTS: Landlord will provide, at Landlord's expense, the
following items. Install new lighting throughout, renovate restrooms.
RENWAL OPTION: 5 Years per Section 30.
The Landlord hereby leases the Premises to the Tenant, and the Tenant hereby
leases the Premises from the Landlord, in accordance with the terms of this
Lease.
WITNESS/ATTEST: LANDLORD/ REALTY
/s/ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
General Manager
WITNESS/ATTEST: TENANT/ ▇▇▇▇ Industries, Inc.
/s/ ▇▇▇▇ ▇▇▇▇
By: ▇▇▇▇ ▇▇▇▇, President
1. RENT, ADDITIONAL RENT
The Tenant shall pay Base Net Rent ("Rent") on a monthly basis, in advance, on
the first day of each month during the Term. The Tenant shall also pay any
other charges required by this Lease as "Additional Rent". Additional Rent
shall be due and payable as Rent with the next monthly Rent payment.
Non-payment of Additional Rent shall give the Landlord the same rights against
the Tenant as if the Tenant failed to pay the Rent. Rent shall be payable
without prior demand and without abatement, deduction, or setoff. Tenant
further covenants and agrees that the annual Base Net Rent shall be adjusted
as of the first anniversary of the lease commencement date and at each annual
anniversary thereafter (the "Anniversary Period") as follows:
a) The index used for calculation of any adjustment shall be the official
Consumer's Price Index, U.S. Average, all items, published by the Bureau of
Labor Statistics, U.S. Department of Labor, (the "CPI").
b) If the CPI shows a decrease in purchasing power, then the revised annual
Base Net Rent at each anniversary of this lease shall be the annual Base Net
Rent for the immediately preceding year plus an additional amount as
determined in paragraph (c) of this Article or (3%) three percent; whichever
is lower.
c) The CPI for the tenth month of the Anniversary Period (the "Numerator")
shall be compared to the CPI for the Twelfth month preceding the Numerator's
month (the "Denominator"). The Denominator shall divide the Numerator. If the
product is greater than one, it shall be multiplied by the current annual Base
Net Rent to determine the new annual Base Net Rent.
2. LATE RENT
If the Landlord does not receive payment for Rent or Additional Rent by the
tenth day of the month, during which payment is due, then the Tenant shall pay
an amount, equal to two percent (2%) of the payment due, as Additional Rent
for the month during which payment is due, and an amount, equal to two percent
(2%) of the original payment due, as Additional Rent for each month thereafter
during which payment remains outstanding beyond the first day of the month.
3. REAL ESTATE TAXES
The Landlord shall pay the yearly Municipal Real Estate Taxes and Assessments,
and tax appeal, review, or appraisal fees for a tax appeal (if applicable),
collectively known as "Taxes", on the Property. The Tenant shall pay the
Landlord as Additional Rent, its Proportionate Share of the Taxes on the
property owned by FAIRLAWN INDUSTRIES LTD. located in Fair Lawn, the
"Property". The Tenant's "Proportionate Share" shall be determined by dividing
the total square footage of the buildings into the total square footage leased
by the Tenant, then multiplying the result by the Taxes. The Landlord
represents that the Total square footage of the buildings owned by FAIRLAWN
INDUSTRIES LTD. is approximately 746,000 square feet.
The Landlord will provide the Tenant with a good faith estimate of the
Tenant's Proportionate Share of the on an annual basis (the "Estimated
Proportionate Share"). The Tenant will be billed one twelfth of the Estimated
Proportionate Share each month as Additional Rent. Once annually, upon
Landlord's receipt of the actual tax bills for the year, the Landlord will
reconcile the Tenant's payments of Estimated Proportionate Share versus the
Proportionate Share. The Tenant will be responsible for the prompt payment of
any under payment of the Proportionate Share. The Landlord will be responsible
for promptly refunding any over payment of the Proportionate Share upon
receipt of full payment of the Estimated Proportionate Share.
4. INTENTIONALLY OMITTED
5. UTILITIES
The Tenant shall have meters listed in its own name, shall arrange for direct
billing, and shall make direct payment for the following: (a) electricity for
the Premises, (b) gas, (c) heat, and (d) any other utility or service used by
the Tenant. The Landlord shall have the right, but not the obligation, to act
on behalf of the Tenant to have the electric and gas meters listed in the
Tenant's name.
To avoid the risk of possible damage to pipes caused by freezing, Tenant
covenants and agrees to at all times maintain in all parts of the demised
premises, a minimum temperature of forty (40) degrees Fahrenheit. Should
damage to any part of the demised premises, including water pipes, steam lines
and sprinkler system, result from Tenant's failure to maintain the minimum
temperature as herein provided by reason of the fault or failure of Tenant,
its agents, servants, employees, or guests then the cost of making repairs
necessary to restore the Premises shall be borne by Tenant, and if any such
repairs are made by or at the instance of the Landlord, the costs of such
repairs to the Landlord shall be collectible as Additional Rent. Anything to
the contrary herein contained notwithstanding, the Tenant shall not be liable
under any of the provisions of this paragraph if the Tenant cannot maintain a
minimum temperature of 40 degrees Fahrenheit for reasons not based upon the
fault or failure of Tenant.
6. SECURITY DEPOSIT
Upon signing this Lease, the Tenant shall pay the amount shown above toward
the Security Deposit. During the Term, the Security Deposit shall be kept with
the Landlord's general funds and shall not be applied by the Tenant to any
Rent or Additional Rent. Within thirty (30) days after the end of the Term,
the Landlord shall return the Security Deposit to the Tenant, without any
interest, excluding any amount applied by the Landlord to any Rent or
Additional Rent that is outstanding at that time, and excluding any charges
incurred under Article 21 below, and provided that the Tenant has filed any
forms required under the provisions of Article 22 below.
7. INSURANCE
A. Insurance to be Maintained by Landlord. Landlord shall maintain (a) "All
risk" property insurance covering the Property (at its full replacement cost),
but excluding Tenant's Property, and (b) commercial general public liability
insurance covering Landlord for claims arising out of liability for bodily
injury, death, personal injury, advertising injury and property damage
occurring in and about the Property and otherwise resulting from any acts and
operations of Landlord, its agents and employees, and (c) rent loss insurance
(collectively, "Landlord's Policies"), all of the above with limits that are
required by any lender(s) of Landlord, or as are otherwise reasonably
determined by Landlord.
B. Liability Insurance. Tenant shall purchase at its own expense and keep in
force during this Lease a policy or policies of (i) commercial general
liability insurance, including personal injury and property damage, in the
amount of not less that One Million Dollars ($1,000,000.00) per occurrence and
Two Million Dollars ($2,000,000.00) annual general aggregate per location, and
comprehensive automobile liability insurance covering Tenant against any
losses arising out of liability for personal injuries or deaths of persons and
property occurring in or about the Premises and Property, with an umbrella
policy of at least Two Million Dollars ($2,000,000.00), and (ii) "all-risk"
property insurance covering Tenant's property (and otherwise resulting from
any acts or operations of Tenant). Said policies shall (a) name Landlord,
Agent, and any party holding an interest to which this Lease may be
Subordinated as additional insured's; (b) be issued by an insurance company
with a Best rating of A-X or better and otherwise reasonably acceptable to
Landlord and licensed to do business in the state in which the property is
located; (c) provide that said insurance shall not be canceled or materially
modified unless thirty (30) days prior written notice shall have been given to
Landlord; (d) provide coverage on an occurrence basis; (e) provide coverage
for the indemnity obligations of Tenant under this Lease; (f) contain a
severability of insured parties provision and a cross liability endorsement;
(g) be primary, not contributing with, and not in excess of coverage which
Landlord may carry; (h) contain a hostile fire endorsement; and (i) otherwise
be in such form and include such overages as Landlord may reasonably require.
Said policy or policies or, at Landlord's option, Certificate of Insurance on
the so-called "ACCORD" Form 25.S (with the following wording deleted: "THIS
CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER" and "BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE
NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR
REPRESENTATIVES") evidencing said policies, shall be delivered to Landlord by
Tenant upon commencement of the Lease and renewals thereof shall be delivered
at least thirty (30) days prior to the expiration of said insurance.
C. Waiver of Right of Recovery. Neither Landlord nor Tenant shall be liable to
one another or to any insurance company (by way of subrogation or otherwise)
insuring any such party for any loss or damage to the Building, the Premises,
the Land, the structure of the Building, other tangible property located on
the Land or in the Building, or any resulting loss of income, or losses under
workers' compensation laws and benefits, despite the fact that such loss or
damage might have been occasioned by the negligence of such party, its agents
or employees, provided that any such loss or damage is reimbursed from
insurance proceeds benefiting the party suffering such loss or damage.
Landlord and Tenant shall each secure an appropriate clause in, or an
endorsement upon, each insurance policy obtained by it and covering or
applicable to the Land, the Building, the Premises and the personal property,
fixtures, and equipment located therein or thereon, pursuant to which the
insurance company consents to such waiver or rights of recovery. The waiver of
right of recovery set forth above in this Article shall extend to Landlord,
Tenant, and their respective agents, employees, and each Superior Lessor,
Superior Mortgagee, and to other appropriate parties designated by Landlord
(collectively, "Superior Parties").
8. REAL ESTATE COMMISSION
The Landlord and the Tenant represent to each other that neither of them has
consulted or negotiated with any real estate broker, salesperson, or finder
with regard to the Premises or this Lease, except for the real estate set
forth in this Lease. The Landlord shall pay the commission to the real estate
broker set forth in this Lease.
The Landlord shall defend, indemnify, and hold the Tenant harmless from any
claims for fees or commissions from anyone with whom the Landlord has dealt
with regard to the Premises or this Lease. The Tenant shall defend, indemnify,
and hold the Landlord harmless from any claims for fees or commissions from
anyone with whom the Tenant has dealt with regard to the Premises or this
Lease, except for the real estate broker set forth in this Lease.
9. QUIET ENJOYMENT
The Landlord shall give quiet enjoyment of the Premises to the Tenant so long
as the Tenant is not in default under the terms of the Lease beyond any
applicable grace or cure periods.
10. AVAILABLILITY OF PREMISES
The Landlord shall prepare the Premises as provided in this lease. The cost of
such work shall be borne by the Landlord. The Premises shall be available for
occupancy when the Premises are in accordance with the plans and
specifications provided in this Lease, subject to incidental punch list items,
and when all conditions necessary for the issuance of a Certificate of
Occupancy have been met. The Tenant shall notify the Landlord of all punch
list items within thirty (30) days of the date on which the Tenant first
occupies the Premises. The Landlord shall at Landlord's sole expense remedy
all punch list items as soon as reasonably possible, but in no event more then
thirty (30) days after notice of such punch list items is given by Tenant to
Landlord.
11. USE OF PREMISES
The Tenant shall only use the Premises for the purpose set forth in this
Lease.
The Tenant, at its own expense, shall:
a) Comply with all federal, state, county, and municipal laws, ordinances,
rules, and regulations related to the Tenant's specific business and the
Tenant's specific use of the Premises;
b) Obtain certificates of occupancy ( "CofO's") from Fair Lawn;
c) Use the Premises in a safe manner;
d) Keep nothing which is dangerous or explosive or which might unreasonably
increase the risk of fire or other casualty at the Premises;
e) Comply with all reasonable requirements of the Landlord's property casualty
insurance carrier; provided same does not require any structural or exterior
repairs to the Premises and/or the Building.
f) Provide fire extinguishers and "No Smoking" signs in accordance with
reasonable instructions from the Landlord's property casualty insurance
carrier;
g) Use the Premises without causing an increase of the Landlord's property
casualty insurance rates or pay the amount of any increase caused by the
Tenant's use of the Premises as Additional Rent; (unless such increase is
based on Tenant's use of the Premises pursuant to the terms of this Lease).
h) Use the Premises without causing a termination of the Landlord's property
casualty insurance policy; unless it results from Tenant's use of the Premises
pursuant to the terms of this Lease
i) Use the Premises without causing any liens to affect the Premises;
j) Maintain the Premises in a neat, clean, habitable condition, free of trash,
vermin, and insects;
k) Keep the walkways, driving aisles, parking areas, and landscaped areas,
which surround and serve the Premises, free of trash and free of goods, except
for a trash dumpster which may be located at the rear of the parking areas;
l) Keep all trash within tied bags within a covered dumpster or container;
m) Keep no animals at the Premises;
n) Use only equipment which does not damage warehouse area floors;
o) Use the Premises without unreasonably disturbing the possession or quiet
enjoyment of any tenant;
p) Keep all vehicles related to its business from parking on the street;
q) Keep all vehicles related to its business from parking on the railroad
tracks, except during reasonable periods used to load or unload goods without
impeding railroad traffic;
r) Park all vehicles related to its business in the parking areas for the
building in accordance with reasonable, nondiscriminatory regulations
established from time to time by the Landlord;
s) Use the Premises in accordance with reasonable, nondiscriminatory
regulations established from time to time by the Landlord, which will not
interfere with Tenant's use of the Premises for the use provided in this
lease, and
t) Not maintain, repair, or wash vehicles, except for material handling
equipment, within the ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ property.
12. ACCESS TO PREMISES
After providing the Tenant with reasonable advance verbal or written notice,
the Landlord or its agents may enter the Premises during normal business hours
to: (a) inspect the Premises, (b) show the Premises to other persons, or ( c)
maintain, repair, construct any improvements, or make any alterations in the
Premises or the building on behalf of the Tenant or any other purpose provided
such entry does not interfere with Tenant's use of the Premises pursuant to
this lease. The Landlord or its agents may enter the Premises at any time in
response to an emergency. The Premises shall only have locks that can be
opened by the Landlord's master key.
13. REPAIRS AND MAINTENANCE
Landlord shall maintain the exterior of the Facility, make all structural
repairs thereto including the roof, exterior and load bearing walls (exclusive
of interior maintenance of such items as paint), foundations, all exterior
systems (unless used for the exclusive use of the Tenant), repair the sanitary
or water pipes leading to or from the Premises due to failure from age (except
if such repair is caused by Tenants misuse, and excluding normal wear and tear
items such as flushing systems, faucets, and washers), ordinary and
extraordinary, foreseen and unforeseen, to the extent same is not caused by
Tenant's, its agents or representatives, visitors, deliverymen's misuse.
Landlord shall maintain and keep the common sidewalks of the facility, in good
order, repair and condition. Tenant shall be responsible for maintaining any
sidewalks, ramps, stairs, and entrances used exclusively by the Tenant.
Landlord shall clear snow and ice from the common sidewalks, roadways and
parking lots. Tenant will clear snow and ice from any loading platform(s),
entrance doorways, stairs, ramps, or ladders, entering the Demised Premises or
used by Tenant. Tenant shall be responsible for proper disposal of its
garbage, trash, debris, end product, by product or other waste, etc. in a
proper manner, complying with all relevant rules and regulations. The Tenant
shall be responsible for all interior maintenance of the premises, (other than
structural repairs as herein noted), and Tenant agrees to:
(a) Maintain all equipment, fixtures, HVAC equipment, and improvements in good
repair and a sanitary, neat and clean appearance, free of any infestation.
(b) Make all necessary repairs to the Demised Premises, and all equipment,
fixtures, and improvements therein, except structural repairs as heretofore
made the responsibility of others.
(c) Use all plumbing, electric, and other facilities safely and in the way for
which they were intended.
(d) Use no more electricity than the wiring or feeders were designed for, or
can safely accommodate.
(e) Replace any and all broken windows in the Demised Premises.
(f) Keep nothing dangerous, explosive, flammable, or combustible, in the
rental space that will increase the risk of fire.
(g) Promptly notify the Landlord of conditions that need repair, and promptly
execute repairs that are the responsibility of the Tenant.
(h) Avoid littering on the building grounds, including but not limited to, the
littering by the Tenant's employees, agents, or visitors of the Tenant.
Maintain the Tenant's area in such a manner to avoid the blowing or release of
litter, rubbish, packaging materials, and the like from the premises or
Tenants trash containers. Promptly clean up any spillage of trash from the
Tenants trash removal contractor(s).
(i) Do nothing to destroy the peace and quiet of the neighborhood, Landlord,
other Tenants, or people in the neighboring areas.
(j) Promptly comply with all laws, orders, rules and requirements of all
governmental authorities, insurance carriers, board of fire underwriters, or
similar groups.
(k) Tenant to maintain, and make all necessary repairs to the heating,
ventilating, and cooling system(s) components in, and servicing, the Premises.
(l) Tenant to make all necessary repairs and replacements to the electrical
system servicing the Premises.
14. ALTERATIONS
The Tenant shall not make any alterations, additions, or improvements to the
Premises without the Landlord's prior written consent that shall not be
unreasonably withheld or unreasonably delayed.
The Tenant, at its own expense, shall obtain all necessary permits and provide
the Landlord with copies before beginning any work. All materials used shall
be identical to the original materials used to construct the Premises, unless
identical materials are unavailable in which case the materials shall be of
equal or better quality. The Tenant, at its own expense, shall obtain a new
certificate of occupancy or a certificate of approval, if any of the same are
necessary, upon completion of any such alterations and shall thereafter
provide the Landlord with a copy.
At the end of the Term, or upon the rightful termination of this Lease, based
on written instructions from the Landlord, the Tenant, at its own expense,
shall either: (a) leave any alterations, additions, or improvements at the
Premises which is physically affixed to, and form part of the Premises, in
which case they shall be the property of the Landlord or (b) remove any
alterations, additions, or improvements effectuated by the Tenant, and restore
the Premises to their original condition at the inception of the term,
excluding normal wear and tear.
The Tenant shall promptly notify the Landlord of any lien or mechanic's notice
or of any intention filed by a third party of which Tenant has actual
knowledge in relation to work or materials for the Tenant's alterations,
additions, or improvements. The Tenant, at its own expense, shall have any
such lien or mechanic's notice of intention discharged or bonded within thirty
(30) days from the date on which the Tenant receives notice of the filing.
The Tenant shall indemnify and hold the Landlord harmless from any damage,
loss, liability, or expense related to the Tenant's failure to comply with the
terms of this Article.
15. SIGNS
The Tenant shall not install any sign on the roof or on the outside surface of
the building walls. If the Landlord has established a uniform sign program for
the building, then the Tenant shall only install signs in accordance with that
program. If the Landlord has not established a uniform sign program, then the
Tenant shall not install any sign without the Landlord's prior written consent
that shall not be unreasonably withheld or unreasonably delayed. The Tenant,
at its own expense, shall obtain all necessary permits and shall provide the
Landlord with copies before making any installation.
16. CASUALTY
The Landlord shall obtain and maintain property casualty insurance as per the
INSURANCE Article above, excluding any alterations, or improvements made by
the Tenant.
The Tenant shall promptly notify the Landlord of any fire or casualty at the
Premises. If a fire or casualty destroys all or part of the Premises (as
determined by the Landlord's insurance company), then the Landlord's
obligation to restore the Premises and the Tenant's obligation to pay Rent
shall be determined in accordance with the terms of this Article.
If the Premises can reasonably be restored within ninety (90) days from the
date of the casualty (as determined by the Landlord's insurance company), then
the Landlord, at its own expense, shall restore the Premises, excluding any
alterations, additions, or improvements made by the Tenant.
If the Premises cannot reasonably be restored within ninety (90) days from the
date of the casualty, then either party may terminate this Lease by giving
notice to the other party within thirty (30) days from the date of the
casualty. If the Lease is so terminated, then the Landlord shall not restore
the Premises for the Tenant, the Tenant shall promptly vacate the Premises,
and the Tenant shall only pay Base Net Rent and Additional Rent due hereunder
through the date of the casualty. If this lease is not terminated, then the
Landlord, at its own expense, shall restore the Premises expeditiously
excluding any alterations, additions, or improvements made by the Tenant.
During any restoration, if the Tenant is able to use part of the Premises (as
determined by the Landlord's insurance company), then the Tenant shall pay
Base Net Rent and Additional Rent for the usable part of the Premises on a
pro-rata basis from the date of the casualty until the date on which the
Premises are completely usable by Tenant for the use provided in this lease.
If the Building is completely destroyed, then this Lease shall end as of the
date of casualty.
The Tenant shall not be liable to the Landlord's property casualty insurance
company by way of subrogation or otherwise for any destruction of the Premises
or the building, except in the case of a fire or casualty caused by the
Tenant's gross negligence, intentional misconduct, or intentional breach of
this Lease.
17. ASSIGNMENT AND SUBLETTING
The Tenant may not do any of the following without the Landlord's written
consent, which consent shall not be unreasonably withheld:
a) Assign this lease (if the Tenant is a corporation, the sale of a majority
of its common shares shall be treated as an assignment).
b) Sublet all or any part of the Rental Space or
c) Permit any other person or business to use the Rental Space.
It is agreed and understood that if the Tenant obtains the Landlord's consent
to any of the above one half (1/2) of any increase in the rent realized by the
Tenant over the Rent paid by the Tenant to the Landlord will be turned over to
the Landlord as Additional Rent.
18. MORTGAGES
Subject to the provisions of this Article, all mortgages that now or in the
future affect the Building have priority over this lease. The Tenant shall
sign all truthful papers AND/OR estoppel Certificates needed to give any
mortgage priority over this Lease provided, however, that the holder of such
mortgage ("Mortgagee") shall, as consideration for such subordination, by
instrument in writing, consent to this lease, recognize all of the Tenant's
rights hereunder, and agree that Tenant shall not be disturbed in its
possession of the Rental Space for any reason other a default by Tenant which
would entitle Landlord to terminate this lease.
19. RECORDING
The Tenant shall not record this Lease or any other document related to this
Lease or the Premises.
20. CONDEMNATION
If all or part of the Premises is taken, on a permanent or a temporary basis,
through a condemnation proceeding under the right of eminent domain, then the
Landlord shall receive the entire payment from the condemner for the taking of
the Premises. The Tenant, however, may make a claim against the condemner for
relocation expenses and for all of its moveable fixtures and equipment so long
as such claim does not reduce the condemner's payment to the Landlord. The
Tenant waives all other claims against the Landlord and the condemner on
account of the taking of the Premises. If any condemnation renders the Tenant
unable to engage in normal business operations without impediment, the Tenant
has the right to terminate this lease.;
21. RETURN OF PREMISES, HOLDOVER
At the end of the Term, or upon the rightful termination of this Lease, the
Tenant, at its own expense, shall return the Premises to the Landlord in
substantially the same condition as at the beginning of the Term, excluding
normal wear and tear, acts by the elements, fire, casualty, or condemnation.
The Tenant shall perform all acts necessary to comply with the terms of this
Article, including, without limitation: (a) removing all of the Tenant's
personal property, including all of the Tenant's signs, (b) removing in
accordance with the Landlord's written instructions alterations, additions, or
improvements made by the Tenant, (c) removing all rack bolts and restoring all
affected surfaces affected by such removal, (d) repairing all interior
partition walls, (e) removing all trash, and (f) leaving the Premises in broom
clean condition. All reasonable expenses incurred by the Landlord to cure any
items under this paragraph will be deducted from the Tenant's Security Deposit
plus 25%.
If the Tenant leaves any property at the Premises after the end of the Term or
after the rightful termination of this Lease, then all such property is
considered abandoned. The Landlord may store, use, sell, or dispose of the
abandoned property. The Tenant shall pay 125 % of all reasonable expenses
related to disposal of the abandoned property as Additional Rent.
In the event the Tenant (Lessee) remains in possession of the leased premises
after expiration of the tenancy created hereunder, and without execution of a
new lease, the Tenant (Lessee), at the option of the Landlord (Lessor), shall
be deemed to be Holding Over, as a Lessee from month to month, at twice the
latest base Rent and pro rations, and subject to all other conditions,
provisions and obligations of the lease insofar as the same are applicable to
a month to month tenancy.
22. COMPLIANCE WITH ENVIRONMENTAL LAWS
The Tenant represents, to the best of the Tenant's knowledge, that the
Standard Industrial Classification ("SIC") number set forth in this Lease is
the only SIC number applicable to the Tenant. The Tenant shall promptly notify
the Landlord if that SIC number becomes inapplicable or if another SIC number
becomes applicable.
The Tenant shall not bring or keep any hazardous substances or hazardous
wastes, as defined under the provisions of N.J.S.A. 13:1K-8 and N.J.S.A.
58:10-23.11b and the related regulations, at the Premises, except for small
quantities customarily used by Tenant in its operation for the use provided
herein provided same is in compliance with law.
If N.J.S.A. 13:1K-6 et seq. the Industrial Site Recovery Act (S-1070) ("ISRA")
is applicable to the Premises due to the Tenant's actions or due to the
expiration or rightful termination of this Lease, then the Tenant, at its own
expense, shall comply with ISRA and effect all steps necessary to obtain
approval of a negative declaration or a completed cleanup. The Tenant,
however, shall not be responsible for any cleanup costs related to any
environmental contamination caused before the beginning of the Term or caused
by the Landlord at any time. If ISRA is not applicable to the Premises due to
the Tenant's actions or due to the expiration or rightful termination of this
Lease, then, by the end of the Term, or upon any rightful termination of this
Lease, the Tenant, at its own expense, shall obtain approval of a
non-applicability application from the New Jersey Department of Environmental
Protection ("NJDEP"). The Tenant shall begin the process of complying with the
terms of this Article no later than two (2) months prior to the expiration of
the Term. The Tenant shall promptly provide the Landlord with copies of all
communications to and from the NJDEP.
If the Term ends, or if this Lease is rightfully terminated, and if the
Landlord cannot use, lease, demolish, or improve the Premises because the
Tenant has not complied with ISRA, as required under the terms of this Article
previously set forth, or is in the process of complying with ISRA, as required
under the terms of this Article previously set forth, then the Tenant shall
continue to pay Additional Rent and fair market value base Rent, which Base
Rent shall be no less than the Base Rent set forth in this Lease, until the
Tenant effects compliance, without any right to possession of the Premises.
If any lien, imposed under the provisions of N.J.S.A. 58:10-23.11 et. Seq.or
imposed under the provisions of 42 U.S.C. 9601 et seq., affects the Premises
due solely to the acts or negligence of the Tenant, then the Tenant shall
within thirty (30) days from the date on which the Tenant receives notice of
the lien commence diligent efforts to have such lien removed and proceed with
diligence to remove the same.
The Tenant shall defend, indemnify, and hold the Landlord harmless from any
claim, damage, loss, liability, or expense related to the Tenant's failure to
comply with the terms of this Article. The Tenant's obligations under the
terms of this Article shall survive the termination or expiration of this
lease unless this lease has been assigned by Tenant with Landlord's consent in
which event such survival shall only apply to the portion of the Term prior to
such assignment.
The Tenant represents and covenants that throughout the term of this lease it
will abide by and comply with all applicable environmental laws, orders, rules
or regulations promulgated by local, state, or federal authorities.
Tenant will ensure that at no time will any leakage of any type of fluids,
from autos, any vehicle, machinery, or any type of container, owned or
operated by the Tenant, it agents, visitors, or deliverymen will occur within
the leasehold or onto the property owned by the Landlord. In the event that
leakage does occur, it will be reported immediately to the Landlord and proper
agencies, and immediately be cleaned up by the Tenant in accordance with all
rules and regulations set forth by the N.J.D.E.P. at the Tenant's expense. If
the Tenant does not initiate immediate remedial measures to clean up any
spill, the Landlord may do so on behalf of the Tenant, and the Tenant will
reimburse Landlord at 150% of the Landlord's actual cost of clean up and
supervision.
23. RELEASE AND INDEMNIFICATION
A) The terms of this Article shall apply to claims or causes of action which
(1) arise out of the use of the Premises, (2) arise out of the use of any
steps, ladders, ramps, and/or loading docks, (3) arise during the Term or any
period during which the Tenant is in possession of the Premises,
B) The Tenant releases the Landlord, its employees, and its agents from any
claim or cause of action by the Tenant for any injury, death, damage, loss,
liability or expense, including without limitation, any claim for personal
injury or property damage unless same are due to the acts or negligence of
Landlord, or its employees or its agents.
C) The Tenant shall defend, indemnify, and hold the Landlord, its employees,
and its agents harmless from any claim or cause of action by any person, other
than the Tenant or any person or entity holding the Tenant's interest under
this lease, for any injury, death, damage, loss, liability or expense,
including without limitation, any claim for personal injury or property damage
unless same are due to the acts or negligence of Landlord, or its employees or
its agents.
D) The terms of this Article shall apply only to direct damages, compensatory
damage, fines, reasonable attorneys' fees, court costs, and cost of suit,
interest.
E) The "claims or causes of actions" referenced hereinabove in this Article
shall include the following causes or events:
a) the defective or damaged condition of any part of the Premises
b) the stoppage, malfunction, or breakdown of any of the mechanical systems
within the Premises
c) the stoppage, reduction, malfunction, or breakdown of any utility service
within the Premises;
d) the active or passive negligence of any person, except the Landlord, its
employees, and its agents to the extend such active or passive negligence of
any such person is covered by Tenant's insurance coverage.
e) an Act of God, force majeure, or weather condition, including, without
limitation, temperature, dampness, humidity, wind, rain, lightning, sleet,
snow, hail, ice, flood, tornado, hurricane, or earthquake to the extent the
same are covered by Tenant's insurance coverage.
f) falling objects, water, steam, fire, smoke, explosion, vermin, strike,
riot, insurrection, public enemy, or war to the extent same are covered by
Tenant's insurance coverage.
24. DEFAULT
If the Tenant does not comply with all of the terms of this Lease within the
grace or cure periods herein provided, then the Tenant shall be in default. In
addition, the Tenant shall be in default if: a) the Tenant makes an assignment
for the benefit of creditors, b) the Tenant is decreed insolvent or bankrupt
according to law and the same is not dismissed within thirty (30) days, or c)
a receiver is appointed for the Tenant and such receiver is not dismissed
within thirty (30) days.
If the Tenant is in default, then the Landlord may send a written notice of
default to the Tenant, indicating why the Tenant is not in compliance with the
terms of this Lease. After receiving such notice of default, the Tenant shall
cure any monetary default within ten (10) days of the receipt by Tenant of
such default notice from Landlord, or any non-monetary default within twenty
(20) days of the receipt by Tenant of such default notice from Landlord. If,
however, such default notice is with respect to a non-monetary default which
cannot be cured within twenty (20) days of the receipt by Tenant of such
default notice from Landlord, then the Tenant shall begin to cure such default
within said twenty (20) days and shall continue to diligently cure such
default thereafter.
If the Tenant does not cure any default within the time periods provided
herein after receiving a notice of default, from Landlord with respect
thereto, then the Landlord may cure any such default on behalf of the Tenant,
in which case the cost of curing such default shall be payable as Additional
Rent.
If the Tenant is in monetary default and has vacated the Premises before the
end of the Term, or if the Landlord obtains a judgment for possession of the
Premises against the Tenant before the end of the Term, then (a) the Landlord
shall try to reasonably re-rent the Premises and, the Tenant shall continue to
pay Base Net Rent and Additional Rent to the Landlord until the beginning date
of a new lease for the Premises or until the end of the Term, whichever comes
first; (b) if the Landlord re-rents the Premises before the end of the Term,
then, as of the beginning date of the new lease for the Premises, the Tenant
shall pay the following costs as Additional Rent: (i) reasonable
administrative costs incurred to advertise and show the Premises and incurred
to make the new lease, (ii) reasonable costs incurred to prepare the Premises
for the new tenant, and (iii) reasonable real estate commissions paid to a
broker for finding the new tenant. If the Landlord re-rents the Premises for a
monthly Base Net Rent amount which is lower than the Base Net Rent amount due
under the terms of this Lease, then, as of the beginning date of such new
lease, the Tenant shall pay for the entire deficiency which will exist for the
remainder of the Term.
25. NOTICES CONSENTS
Except as specifically set forth in this Lease, all notices and consents given
under the terms of this lease shall: (a) be in writing, (b) be sent by
certified mail, return receipt requested, or by a reputable overnight delivery
service, or hand delivered to the addresses for notices set forth above in
this lease, and ( c) be deemed to have been given upon receipt. By giving
notice in the manner provided herein, the Landlord or the Tenant may hereafter
designate different or additional addresses for their respective notices.
26. SEVERABILITY
If any part of this lease is contrary to law or otherwise unenforceable, then
the remainder of this Lease shall remain in effect.
27. GOVERNING LAW
The terms of this lease shall be governed, interpreted, and construed
according to the laws of New Jersey.
28. BINDING EFFECT OF LEASE
This lease binds the Landlord and all parties that rightfully succeed to its
rights or take its place. This Lease binds the Tenant and all parties that
rightfully succeed to its rights or take its place with the Landlord's consent
where required in accordance with the terms of this lease.
29. ENTIRE AGREEMENT
This lease contains the entire agreement made by the Landlord and the Tenant.
The terms of this lease shall not be change or amended, except by the terms of
a subsequent written agreement signed by the Landlord and the Tenant.
30. RENEWAL OPTION
The Tenant has the right of option to renew this lease for a period of 5 years
at the expiration of this lease but must exercise this option for renewal in
writing ninety (90) days before expiration of the lease. Notification must be
received at the office of the Landlord, as above, by certified mail return
receipt requested at least 90 (ninety) days before expiration of the lease.
Tenant further covenants and agrees that the annual Base Net Rent shall be
adjusted as of the inception of the option to renew, and as each annual
anniversary thereafter (the "Anniversary Period") as follows:
a) The index used for calculation of any adjustment shall be the official
Consumer's Price Index, U.S. Average, all items, published by the Bureau of
Labor Statistics, U.S. Department of Labor, (the "CPI").
b) If the CPI shows a decrease in purchasing power, then the revised annual
Base Net Rent at each anniversary of this lease shall be the annual Base Net
Rent for the immediately preceding year plus an additional amount as
determined in paragraph (c) of this Article or (3%) three percent; whichever
is lower.
c) The CPI for the tenth month of the Anniversary Period (the "Numerator")
shall be compared to the CPI for the Twelfth month preceding the Numerator's
month (the "Denominator"). The Denominator shall divide the Numerator. If the
product is greater than one, it shall be multiplied by the current annual Base
Net Rent to determine the new annual Base Net Rent.
