EXHIBIT 10.5
FIRST AMENDMENT TO LEASE
BETWEEN CRESTON ASSOCIATES,
AS LANDLORD, AND
ARIEL CORPORATION,
AS TENANT
THIS FIRST AMENDMENT TO LEASE made this 16th day of November, 2000 between
CRESTON ASSOCIATES, ("Landlord"), do Xxxxxxx Property Management, having an
office at 000 Xxxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx, Xxx Xxxxxx 00000-0000 and
ARIEL CORPORATION, a Delaware Corporation, having an office at 0000 Xxxxx 000,
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000 ("Tenant"). Tenant's mailing address is 0000
Xxxxx 000, Xxxxx 000, Xxxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into a Lease dated September 7, 1995,
wherein Landlord let unto Tenant and Tenant hired from Landlord, 30,000 rentable
square feet on a portion of the I St floor (the "Premises") of a certain office
building commonly known and designated as 0000 Xxxxx 000, Xxxxx Xxxxxxxxx, Xxx
Xxxxxx 00000 (the "Building") for a term which commenced on January 13, 1996 and
expires on January 31, 2001; and
WHEREAS, Landlord and Tenant have agreed to extend the term of the Lease
and to modify certain provisions of the Lease.
NOW THEREFORE, in consideration of the mutual covenants arid undertakings
hereinafter set forth by and between the parties hereto, it is agreed as
follows:
1. The term of the Lease is hereby extended for sixty (60) months. The
Commencement Date of this First Amendment to Lease shall be February 1,2001 (the
"Commencement Date") and the Expiration Date shall be January 31, 2006 ("Renewal
Period").
2. As of the Commencement Date, Tenant's annual Base Rent for the Renewal
Period shall be as follows:
YEAR BASE RENT MONTHLY RENT ANNUAL RENT
-------------- ----------------- --------------- ----------------
YEAR 1 $12.50/SF NNN $31,250.00 $375,000.00
YEAR 2 $13.25/SF NNN $33,125.00 $397,500.00
YEAR 3 $14.00/SF NNN $35,000.00 $420,000.00
YEAR 4 $14.75/SF NNN $36,875.00 $442,500.00
YEAR 5 $15.50/SF NNN $38,750.00 $465,000.00
which shall be payable in advance on the first day of each and every month
during the term of the Renewal Period.
3. Landlord, at its sole cost and expense, will perform the work at the
Premises as described in Schedule A, attached hereto ("Landlord's Work")
subsequent to the
Commencement Date. After review and completion of the final construction
drawings in connection with Landlord's Work, Landlord shall notify Tenant of any
restoration of Landlord's Work Tenant shall be responsible for upon the
termination of the Lease. Any cost and expense incurred by Landlord for such
work as a result of change orders or revisions requested by Tenant shall be the
responsibility of Tenant. Landlord's Work shall he done during normal business
hours. Tenant shall be responsible for moving all of Tenant's Property in order
for Landlord to perform Landlord's Work Tenant recognizes and agrees that there
may be some inconvenience to Tenant during Landlord's Work and agrees that
performance of Landlord's Work shall not constitute a actual or constructive
eviction in whole or in part, or entitle Tenant to any abatement of rent, or
relieve Tenant from any of its obligations under this Lease or impose any
liability upon Landlord or its agents.
4. The following shall be added to Section 4.1 of the Lease:
The following represents uses which will not be Permitted Uses in the
Premises:
(a) A school of any kind other then for the training of Tenant's
employees;
(b) An employment agency; or
(c) An office for any governmental or quasi governmental bureau,
department, agency, foreign or domestic, including any autonomous
governmental corporation or diplomatic or trade mission.
(d) Any telemarketing activities or other direct selling activities,
however, Landlord recognizes that Tenant's business involves some
telemarketing and direct selling activities which is permitted
provided such use does not violate (e) below; or
(e) Any use, including executive and general office use, which
results in a density of a population of more than one person for
every 200 square feet.
5. The following Section is added to Article 9;
9.6 Tenant acknowledges that as part of the consideration for this
Lease, and in order not to interfere with the rights of other
tenants or other tenants' quiet enjoyment of the common areas of
the Building and otherwise prevent Landlord from performing its
services without causing increases to the cost of such services,
Tenant agrees that it shall use reasonable efforts to not permit
its employees to congregate in hallways or elevators, shall not
permit its employees to create an unsightly condition in or about
any passageway from the Building or the common areas or to the
parking lot/deck, with regard to smoking, including the disposal
of cigarettes, in the courtyard and/or outer areas adjacent to
the Building and will otherwise require its employees to act and
conduct themselves in the common areas in such a manner as will
not disturb other tenants or the use and enjoyment by other
tenants of the Building.
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6. Tenant hereby represents and warrants that the information set forth
in the Environmental Disclosure Affidavit attached to the Lease as Exhibit E,
pursuant to Section 20.9 of the Lease, continues to be accurate, true, and
complete as of the date hereof.
7. The following shall be added to Article 23 of the Lease:
Upon the termination of the Lease in addition to any
restoration required under tile Lease or pursuant to any
Tenant Change, Tenant shall remove from the Premises all
equipment comprising Tenant's Voice, Data and Security
Systems, and other equipment, materials and facilities,
whether located in the ceiling, floor and/or walls which in
any way relates, pertains to, constitutes or is connected
with Tenant's Voice, Data and/or Security Systems and
regardless of whether Landlord or Tenant installed and/or
paid for the installation of such systems.
8. Tenant's restoration as of the date of this Amendment is as follows:
(a) Restore volleyball court to grass. Current cost $3,000.00.
(b) Remove 42 20-amp, 120 volt circuits with duplex wall outlets.
Current cost $3,700.
9. Section 24.4 of the Lease is hereby modified so as to increase
Landlord's processing fee from $250.00 to $500.00.
10. The following shall be added to Section 35.1 of the Lease:
Tenant further acknowledges that its failure to perform any
restoration required of it under this Lease shall be deemed the same
as its remaining in possession of the Premises after the expiration of
the term, subjecting it to hold over rent in accordance with Article
35 of the Lease.
11. Article 50 of the Lease shall be replaced with the following:
50.1 Landlord at its sole expense, on at least sixty (60) days prior
written notice, may require Tenant to move from the Premises to another location
of comparable size and decor in the Building or in any other existing building
or future building hereafter constructed within the Complex. By written notice
to Landlord served within fifteen (15) business days of Tenant's receipt of the
relocation notice, Tenant may elect to terminate this Lease in lieu of
relocating to the other space and shall thereupon vacate the Premises within the
ninety (90) day period. In the event of any such relocation, Landlord shall be
responsible for the expenses of preparing and decorating the relocated premises
so that they will be of equal size and of equal or greater quality,
configuration and fit-out to the Premises. Landlord shall also be responsible
for all Tenant's moving expenses including, but not limited to, the breakdown,
moving and re-installation of Tenant's then existing furniture, fixtures and
data-processing equipment, and the re-printing of Tenant's then existing
stationary, advertising materials and business cards. This relocation shall be
accomplished in such a manner so as to create the least practicable interference
with Tenant's business operation. Tenant shall not be required to vacate
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the Premises until the relocation premises are ready for occupancy.
Notwithstanding the foregoing, Landlord shall be entitled to rescind its notice
of relocation within fifteen (15) business days of its having forwarded to
Tenant the notice of relocation or within forty-eight (48) hours of Tenant
having properly elected to terminate this Lease. In the event Landlord rescinds
the notice as aforesaid, this Lease shall continue in full force and effect. In
the event Landlord exercises its right to relocate Tenant, restoration as herein
provided under Article 23 of the Lease, as amended under Paragraph 8 above,
shall not apply either to the Premises or the premises to which Tenant is
relocated.
12. Article 52 of the Lease, Renewal Option, is hereby null and void and
of no further force and effect.
13. Article 55 of the Lease, Right of First Refusal, is hereby null and
void and of no further force and effect.
14. Tenant covenants, warrants, and represents that there was no broker
except INS INSIGNIA/ESG INC. ("Broker") instrumental in consummating this First
Amendment to Lease and that no conversations or negotiations were had with any
broker except Broker concerning the renewal of the Premises. Tenant agrees to
hold Landlord harmless against any claims for a brokerage commission arising out
of any conversations or negotiations had by Tenant with any broker except
Broker. Landlord agrees to hold Tenant harmless against any claims for a
brokerage commission arising out of any conversations or negotiations had by
Landlord with any broker except Broker. Landlord agrees to pay Broker pursuant
to a separate agreement.
15. Section 8.5 of the Lease is hereby null and void and of no further
force or effect and the following is added to Section 15.2 of the Lease:
(1) Cost of repairs and general maintenance of the heating
ventilating and air-conditioning equipment systems ("HVAC") of the Building.
Tenant acknowledges that any replacement of any of the HVAC Systems shall be
performed by Landlord at Tenant's sole cost and expense.
16. The following is added to Section 5.07 of the Lease:
All portions of Landlord books and records pertaining to C.A.M. as set
forth above shall be made available to Tenant in the State of New of
Jersey.
17. The phrase generally accepted accounting practices in Section 15.2 of
the Lease is hereby replaced with Generally Accepted Accounting Principals
"GAAP".
18. The following shall be added to section 15.5 of the Lease:
(o) Costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present or prospective
tenants;
(p) Costs for acquisition of sculpture, paintings and other objects
of art;
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(q) Expenses or charges under warranties or guarantees to the extent
actually recovered by Landlord;
(r) Costs of restoration or repair of the Building as a result of
total or partial destruction for which and to the extent that insurance proceeds
have been made available therefore or the condemnation thereof for which an
award has been made; and
(s) Capital expenditures except as required by Section 15.2.
19 Except as modified herein, all of the terms, covenants and conditions
set forth in the Lease remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.
WITNESS: LANDLORD:
CRESTON ASSOCIATES
a New Jersey General Partnership
/s/ /s/ Xxxxxxx Xxxxxxx
------------------------ -------------------------------------
BY: XXXXXXX XXXXXXX
TITLE: Partner
ATTEST: TENANT:
ARIEL CORPORATION
a Delaware Corporation
/s/ /s/ Xxxx X. Xxxxxxx
------------------------ -------------------------------------
BY: Xxxx X. Xxxxxxx
TITLE: VP Finance
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SCHEDULE A
LANDLORD'S WORK
---------------
1. The Landlord shall provide the Tenant with an $8.00 per rentable
square foot workletter ("Workletter Allowance") for the Tenant's
improvements. The Workletter Allowance shall be used in connection
with the cost of Tenant improvements and for no other purpose of
readying the Demised Premises for occupancy, such as telephone,
furniture, or computer systems. Landlord has the right to review and
approve all Tenant improvements prior to construction. Any cost and
expense incurred by Landlord for such Tenant improvements above the
Workletter Allowance or as a result of change orders or revisions
requested by Tenant shall be the responsibility of Tenant.
2. The Landlord shall provide the Tenant with a detailed cost breakdown
based on the space plan, material selections and specialty items such
as supplementary HVAC. The mechanical, sprinkler, electrical and
plumbing engineering work shall be part of the design build process.
The cost for the entire job shall include:
General conditions as defined in Division B 10.00 of R.S. Means
Construction Cost Data, as applicable to the Tenant's fit-out project.
The cost estimate for each trade.
Overhead at 15% for the general conditions and the trade estimates
above.
Profit at 10% for all the items listed above.
Architectural and engineering fees, if any.
3. At any time after substantial completion of Landlord's Work, Landlord,
upon reasonable notice to Tenant may enter the Demised Premises to
complete unfinished details of Landlord's Work and entry by Landlord,
its agents, servants, employees or contractors for such purpose shall
not constitute an actual or constructive eviction, in whole or in
part, or entitle Tenant to any abatement of rent, or relieve Tenant
from any of its obligations under this Lease, or impose any liability
upon Landlord or its agents.
4. The Landlord, through its affiliate, X. Xxxxxxx Co., Inc., will
commence the Architectural Construction documents after the Lease
Amendment has been signed and returned. Once completed, the Tenant
will have ten business days from receipt of the documents to review
and return the documents to the Landlord with changes, if any. Any
delay beyond the ten business days will constitute a Tenant Delay as
set forth in Section 7.2 of the Lease. The approved Architectural
Documents will be used to provide the Tenant with the cost for the
Tenant fit-out. The Tenant shall have ten business days from the
receipt of the cost to review and approve the work. Any delay beyond
the ten business days will constitute a Tenant Delay. For the purposes
of Paragraphs 4 through 8, all references to Landlord shall also refer
to Landlord's affiliate, X. Xxxxxxx Co., Inc.
5. For any costs above the Workletter Allowance, the Tenant shall pay the
Landlord a one-third payment with the return of the work authorization
to proceed, a one-third payment thirty (30) days after receipt of the
building permit and a one-third payment upon the Commencement Date of
the Lease.
6. The Tenant shall be responsible for the telephone and computer
installation. The Landlord shall coordinate the timing of these items
with the Tenant. The Landlord shall not charge any overhead fees or
profit for this work.
7. All changes to Landlord's Work requested by Tenant shall be in
writing. Landlord shall advise Tenant before accepting ale change, of
the cost thereof or; if applicable, the savings and the delay in the
substantial completion, if any, caused by the change and, for any
major changes to Landlord's Work, any additional restoration
requirements, if any. Tenant shall have ten (10) days from receipt of
this information from Landlord to advise Landlord to proceed with the
change or to withdraw the request. Tenant shall pay the cost of the
change order within thirty (30) days after receipt of Landlord's
invoice with respect to such change if there shall be an increased
cost to Landlord as a result thereof.
8. a. Landlord will repair, maintain and replace roof as necessary all
as part of the building common area maintenance charges.
b. Landlord will verify circuit breaker panel designations.
c. Landlord will make best efforts to eliminate any potential
plumbing issues with toilets.
