LEASE
THIS LEASE AGREEMENT made the 15th day of May, 1992, between FRANKLIN
ASSOCIATES residing or located at 000 Xx. Xxxxxxxxxx Xxxx, Xxxxxx, Xxx Xxxx
00000, herein designated as Landlord, and XXX XXXXXX, LTD., a New York
corporation, residing or located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, herein designated as Tenant;
WITNESSETH THAT:
The Landlord does hereby lease to the Tenant and the Tenant does hereby
rent from the Landlord, the following described Demised Premises: a portion of
the premises located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx (consisting of
approximately 48,513 square feet in a Building which has a total of 72,000
square feet), and outlined in the building plan annexed hereto as Exhibit A,
together with the right to use in common with other Tenants, the driveways,
parking areas, and other common facilities, ("Premises" or "Demised Premises") ,
for a term of Seven (7) Years commencing on September 1, 1992, (the
"Commencement Date"), and ending on August 31, 1999, (the "Termination Date") to
be used and occupied only and for no other purpose than mail order operations
center, warehousing and distribution of apparel, the operation of a retail
outlet store and offices appurtenant to and necessary for same, subject however
to all applicable zoning ordinances and rules and regulations of any
governmental instrumentality, board or bureau having jurisdiction thereof. [If
the Commencement Date is not set forth above because of the agreement on the
part of the Landlord to perform certain improvements or alterations, the
Commencement Date shall be upon the "Substantial Completion" of such
improvements, as defined in Section 35. At such time Landlord and Tenant shall
promptly execute a certificate setting forth the Commencement Date, which
certificate shall be attached to this Lease and made a part hereof.]
Upon the following Conditions and Covenants:
1. ACCEPTANCE OF PREMISES
Except as otherwise set forth herein, Tenant acknowledges that it is
familiar with the Demised Premises and hereby agrees to accept the Demised
Premises in their present condition, AS IS. Prior to the Commencement Date,
Landlord will complete the improvements described in the Work Letter annexed
hereto as Exhibit C. Tenant further acknowledges that, except as expressly set
forth herein, neither Landlord nor anyone on Landlord's behalf has made any
representations or warranties with respect to the condition of the Demised
Premises. Landlord represents that on the Commencement Date, the plumbing,
electrical, and HVAC systems will be in good working order.
2. BASE RENT
2.1 The Tenant covenants and agrees to pay to the Landlord as Base Rent for
and during the [initial] Term hereof as follows:
MONTH 1 THROUGH MONTH 18 INCLUSIVE
Yearly Rate: $242,565.00
Monthly Rate: $ 20,213.75
(Effective Rate: $5.00 per sq. ft.)
MONTH 31 THROUGH MONTH 42 INCLUSIVE
Yearly Rate: $262,455.33
Monthly Rate: $ 21,871.28
(Effective Rate: $5.41 per sq.ft.)
MONTH 43 THROUGH MONTH 54 INCLUSIVE
Yearly Rate: $273,128.19
Monthly Rate: $ 22,760.68
(Effective Rate: $5.63 per sq.ft.)
MONTH 55 THROUGH MONTH 66 INCLUSIVE
Yearly Rate: $284,286.18
Monthly Rate: $ 23,690.52
(Effective Rate: $5.86 per sq.ft.)
MONTH 67 THROUGH MONTH 78 INCLUSIVE
Yearly Rate: $295,444.17
Monthly Rate: $ 24,620.35
(Effective Rate: $6.09 per sq.ft.)
MONTH 79 THROUGH MONTH 84 INCLUSIVE
Yearly Rate: $307,087.29
Monthly Rate: $ 25,590.61
(Effective Rate: $6.33 per sq.ft.)
The Base Rent shall be paid promptly in advance on the first day of each and
every month during the Term without demand and without offset or deduction. If
the Commencement Date shall fall on a date other than the first day of a month
or if the Termination Date shall fall on a date other than the last day of a
month, Tenant shall-pay an apportioned Base Rent, based upon a 360 day year and
30 day month, covering such partial month. Payment of Base Rent and Additional
Rent (as hereinafter defined) shall be made payable to FRANKLIN ASSOCIATES at
the address first set forth above, or to such other party and at such other
place as may be specifically required by this Lease or as Landlord may designate
in writing from time to time.
2.2 No payment by Tenant or receipt by Landlord of a lesser amount than the
Base Rent or Additional Rent stipulated in this Lease shall be deemed to be
other than on account of the earliest stipulated rent, nor shall any endorsement
or statement on any check or payment, or
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any writing accompanying any check or payment of such rent, be deemed an accord
and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease.
3. ADDITIONAL RENT
3.1 Tenant agrees to pay to the Landlord as Additional Rent (the
"Additional Rent") without offset or deduction its proportionate share (67.4%)
of the following:
(a) all real estate taxes, assessments, water and sewer rents and
other governmental charges assessed against or levied upon the Demised
Premises or related to the use or occupancy thereof, provided that if
Landlord shall receive a rebate or refund as a result of a successful real
estate tax appeal which is attributable to the period during which Tenant
is in possession of the Premises, such rebate or refund shall be passed
through to Tenant;
(b) all premiums on insurance policies maintained by the Landlord on,
or in connection with the use of, the Demised Premises pursuant to this
Lease; without limiting the generality of the foregoing, Tenant shall pay,
as Additional Rent, the premiums on all policies of insurance maintained by
Landlord, including casualty or hazard insurance and rental or business
interruption insurance; and
(c) all other expenses and charges which, during the Term, shall
arise, be levied, assessed or imposed upon or against the Demised Premises
as an incident of the ownership thereof and such other reasonable expenses,
which are of the kind paid by owners of land and buildings by reason of
such ownership, including management fees, fees for all professional
services associated with the Demised Premises and the cost of all
Structural Repairs and Exterior Maintenance.
Tenant shall pay one-twelfth of the annual estimated amount of Additional
Rent which shall be calculated in accordance with the Rent Summary annexed
hereto as Exhibit B. The amount of Additional Rent shall be subject to change
from time to time during each year to reflect increases or decreases in
insurance premiums, real estate taxes, and other expenses and shall be subject
to final adjustment after the completion of each year at such time as a final
statement of operating expenses is prepared.
3.2 The Tenant shall pay to the Landlord on the first day of each month
one-twelfth of Tenant's proportionate share of the then current annual real
estate taxes, water and sewer rents and any special or other assessment levied
and assessed against the Premises and one month's proportion of the then current
annual insurance premiums, so as to enable the Landlord (or its lender) to pay
the same at least thirty (30) days before they become due and payable, and to
make any further tax or insurance reserve payments, and to make up any
deficiency, in amounts and at
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times as the Landlord shall require. If Tenant shall fail to make any payment or
to do any act required of it by any provision of this Lease, Landlord may make
such payment or do such act and the amount of such payment, or the cost of doing
such act, together with interest thereon at a rate of 3% in excess of the prime
rate of interest as published in the Wall Street Journal on the date Landlord
makes such payment or does such act, shall be deemed Additional Rent payable by
Tenant upon demand by Landlord. The making of any such payment or the doing of
any such act by Landlord shall not constitute a waiver by Landlord of any right
or remedy provided by this Lease upon Tenant's default in the making of such
payment or the doing of such act. All taxes, assessments, water and sewer rents
and other governmental charges against or levied upon the Demised Premises shall
be apportioned as between Landlord and Tenant at the Termination Date.
4. CHANGE IN SCOPE OF TAXATION
4.1 If at any time during the Term the method or scope of taxation
prevailing on the date hereof shall be altered, modified or enlarged so as to
cause the method of taxation to be changed, in whole or in part, so that in
substitution for the real estate taxes now assessed there may be, in whole or in
part, a capital levy or other imposition based on the value of the Demised
Premises, or the rents received therefrom, or some other form of assessment
based in whole or in part on some other valuation of the Landlord's real
property comprising the Demised Premises, then and in such event, such
substituted tax or imposition shall be payable and discharged by Tenant in the
manner required pursuant to such law promulgated which shall authorize such
change in the scope of taxation, and as required by the terms and conditions of
this Lease.
4.2 Nothing in this Lease contained shall require Tenant to pay any
franchise, estate, inheritance, succession, capital levy or transfer tax of
Landlord, or federal income or state income tax or excess profits or revenue
tax, except to the extent such taxes are imposed in whole or partial
substitution for real property taxes.
5. NET RENT
It is the purpose and intent o Landlord and Tenant that the rent shall be
absolutely net to Landlord, so that this Lease shall yield, net, to Landlord,
the Base Rent specified in Section 2 hereof, in each month during the Term,
without any abatement, deduction, set-off or counterclaim, and that all costs,
expenses and obligations of every kind and nature whatsoever relating to the
Demised Premises which may arise or become due during or out of the Term, except
interest, amortization or any other charge or obligation arising in connection
with any mortgage placed on the Demised Premises by Landlord (unless the charge
or obligation arises as a result of an Event of Default by Tenant hereunder)
shall be paid by Tenant directly to the appropriate entities as an owner of the
Demised Premises would have paid or reimbursed to Landlord, except for such
obligations and charges as have otherwise expressly been assumed by Landlord in
accordance with the terms and conditions of this Lease.
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6. INSURANCE
6.1 As long as this Lease remains in effect and during such other time as
Tenant occupies the Demised Premises or any part thereof, Tenant will keep in
force at its expense public liability insurance, including contractual
liability, with respect to the Demised Premises with companies and in form
acceptable to Landlord with a minimum combined single limit of $5,000,000 on
account of bodily injuries, death or property damage; and standard form all-risk
insurance, at such value as will avoid coinsurance risks, on leasehold
improvements and contents either existing within the Demised Premises at the
Commencement Date or installed by Tenant during the Term of this Lease;
provided, however, that Tenant's insuring of the leasehold improvements shall in
no way confer on Tenant any property rights to same. Tenant will furnish the
policy or policies of such insurance or certificates thereof to Landlord. All
such policies shall name Landlord or its designee and any mortgagee of the
Premises as additional named insureds and loss payees and shall contain a
provision stating that such policy or policies shall not be canceled or modified
except after 30 days prior written notice to Landlord and such mortgagee. Tenant
expressly waives all claims against Landlord arising from loss or damage from
whatever cause to Tenant's personal property, including leasehold improvements,
inventory, trade fixtures and furniture. If the nature of Tenant's operations is
such as to place any or all. of its employees under the coverage of worker's
compensation or similar statutes, Tenant shall also keep in force, at its
expense, so long as this Lease remains in effect and during such other times as
Tenant occupies the Demised Premises or any part thereof, worker's compensation
or similar insurance affording statutory coverage and containing statutory
limits. All policies of insurance shall be issued by insurers authorized to
conduct that type of insurance business in New Jersey, and having at all times a
policyholders rating of "A" or better and a financial rating of "V" or better in
the then-current edition of Best's Insurance Guide. If Tenant shall not comply
with this Section, Landlord may cause insurance as aforesaid to be issued and in
that event, Tenant agrees to pay the premiums for such insurance upon Landlord's
demand together with interest at a rate of 3% in excess of the prime rate of
interest as published in the Wall Street Journal upon Landlord's demand as
Additional Rent until the premium cost is reimbursed to Landlord.
6.2 Tenant agrees to look solely to the proceeds of its own insurer for
indemnity against exposure for casualty losses of property or business
interruption. Tenant warrants that its liability, property and business
interruption insurers shall have no rights against Landlord by virtue of
assignment, subrogation, loan agreement or otherwise.
7. INCREASE OF INSURANCE RATES
If as a result of Tenant's use of the Premises, it shall be impossible to
obtain fire and other hazard insurance on the buildings and improvements on the
Demised Premises, in an amount and in the form and with insurance companies
acceptable to the Landlord, the Landlord may, if the Landlord so elects at any
time thereafter, terminate this Lease and ' the terms hereof, upon giving to the
Tenant fifteen (15) days notice in writing of the Landlord's intention so to do,
and upon
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the giving of such notice, this Lease and the terms thereof shall terminate. If
by reason of the use to which the Demised Premises are put by the Tenant or
character of or the manner in which the Tenant's business is carried on, the
insurance rates for fire and other hazards shall be increased, the Tenant shall
upon demand, pay to the Landlord, as Additional Rent, the amounts by which the
premiums for such insurance are increased. Such payment shall be paid with the
next installment of Base Rent and Additional Rent but in no case later than one
(1) month after such demand, whichever occurs sooner.
8. FIRE AND OTHER CASUALTY
In case of fire or other casualty, the Tenant shall give immediate notice
to the Landlord. If the Demised Premises shall be partially damaged by fire, the
elements or other casualty, the Landlord shall repair the same as speedily as
practicable, but the Tenant's obligation to pay the Base Rent and Additional
Rent hereunder shall not cease. If, in the opinion of the Landlord, the Demised
Premises are so extensively and substantially damaged as to render them
untenantable, then the Base Rent shall cease until such time as the Demised
Premises shall be made tenantable by the Landlord. However, if, in the opinion
of the Landlord the Demised Premises are totally destroyed or so extensively and
substantially damaged as to require practically a rebuilding thereof, and if
such rebuilding is likely to require a period of not less than one hundred
eighty (180) days to be completed, then the Base Rent shall be paid up to the
time of such destruction and then, at the option of either party, exercised
within sixty (60) days of the occurrence of the casualty, this Lease shall come
to an end. In no event, however, shall the provisions of this clause become
effective or be applicable, if the fire or other casualty and damage shall be
the result of the carelessness or improper conduct of the Tenant or the Tenant's
agents, employees, guests, licensees, invitees, subtenants, assignees or
successors. In such case, the Tenant's liability for the payment of the Base
Rent and Additional Rent and the performance of all the covenants, conditions
and terms hereof on the Tenant's part to be performed shall continue and the
Tenant shall be liable to the Landlord for the damage and loss suffered by the
Landlord. If the Tenant shall have been insured against any of the risks herein
covered, then the proceeds of such insurance shall be paid over to the Landlord
to the extent of the Landlord's costs and expenses to make the repairs
hereunder, and such insurance carriers shall have no recourse against the
Landlord for reimbursement.
9. NON-LIABILITY OF LANDLORD
The Landlord shall not be liable for any damage or injury which may be
sustained by the Tenant or any other person resulting from the acts, conduct or
omissions on the part of Landlord, except in the case of the gross negligence of
Landlord, or as a consequence of the failure, breakage, leakage or obstruction
of the water, plumbing, steam, sewer, waste, soil or any other pipes, whether
above or below ground, roof, drains, leaders, gutters, valleys, downspouts or
the like or of the electrical, gas, power, conveyer, refrigeration, sprinkler,
air conditioning or heating systems, elevators or hoisting equipment; or by
reason of the elements; or resulting from acts, conduct or omissions on the part
of Tenant or of Tenant's agents, employees, guests, licensees,
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assignees or successors, or on the part of any other person, including any other
tenant; or attributable to any interference with, interruption of or failure,
beyond the control of the Landlord, of any services to be furnished or supplied
by its obligations hereunder, the Tenant shall look solely to the equity of the
Landlord in the Demised Premises and the buildings and other lands within which
the Demised Premises are located; and in no event will the Landlord's liability,
if any, exceed the loss of the Landlord's equity interest in the Demised
Premises which is situated in Block 6002 Lot 9.
10. WAIVER OF SUBROGATION RIGHTS
Each party waives all rights of recovery against the other or the agents,
employees or representatives of such person, for any loss, damages or injury of
any nature whatsoever to property or persons for which such party is insured.
The Landlord and Tenant each shall obtain from their respective insurance
carriers and will deliver to the other party, waivers of the subrogation rights
under the respective policies.
11. NOTICE OF ACCIDENTS
Tenant shall promptly notify Landlord of: (a) any accident in or about the
Demised Premises; (b) any fire or other casualty ("Casualty") occurring in or
about the Demised Premises; (c) all damage to or defects in the Demised Premises
for the repair of which Landlord is responsible; and (d) all damage to or
defects in any building system or facility within the Demised Premises.
12. INDEMNIFICATION
Tenant shall indemnify and save harmless Landlord from all fines,
penalties, costs, suits, proceedings, liabilities, damages, claims, judicial and
administrative orders, assessments and actions of any kind arising out of the
use and occupancy of the Demised Premises, including the enforcement or
threatened enforcement of any environmental law, regulation or policy related to
Tenant's use-and occupancy of the Demised Premises, or by reason of any breach
or non-performance of any covenant or condition of this Lease by Tenant. This
indemnification shall extend to all claims by any person or party, including any
Federal, State or local government or government agency, for death or injury to
persons and damage to any property, on or off the Demised Premises, and to legal
expenses, including reasonable attorney's fees, environmental consultant's fee
and the fees of other professionals incurred by Landlord in the defense of such
claims or in the enforcement of any provision of this Lease. This Section shall
survive the termination of this Lease.
13. UTILITIES
The Tenant shall pay when due all the rents or charges for water, gas,
sewer,
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electricity, heating, ventilating and air conditioning or other utilities
used by the Tenant which are or may be assessed against the Demised Premises. In
the event any utility is separately metered, Tenant shall pay all such charges
directly to the utility. In the event any or all such utilities are not so
metered, Tenant shall pay its proportionate share of said utility consumption as
Additional Rent within 10 days after submission of a xxxx therefor by the
Landlord to the Tenant. Landlord represents that the gas and electricity used by
Tenant is separately metered. The water and sewer are not separately metered and
will be prorated based upon Tenant's percentage interest.
14. REPAIRS
14.1 Landlord, at Tenants expense (which shall be prorated based upon
Tenant's percentage interest of the annual maximum total Building cost of
$7,200.00 as depicted on the Rent Summary ("Structural Repairs"), and shall
perform all exterior maintenance, including the maintenance of all parking
areas, snow and ice removal, sidewalks, curbing, fencing and landscaping
("Exterior Maintenance"). If Tenant shall be dissatisfied with the performance
by Landlord of any required Exterior Maintenance which Landlord has agreed to
perform, upon advance notice to Landlord, Tenant shall be permitted to arrange
for the performance of the Exterior Maintenance, provided that any such
arrangement (including the contractor selection by Tenant) shall be approved by
Landlord, which approval shall not be unreasonably withheld. Landlord shall make
any repairs and perform any maintenance on a reasonably prompt basis after
written notice of the need for such repair or maintenance is given to Landlord
by Tenant. There shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business arising from the
making of or the failure to make any repairs, alterations or improvements in or
to any portion of the Demised Premises or in or to fixtures, appurtenances and
equipment therein. Subject to the $7,200,000 limitation of this Section, the
Tenant shall be responsible for the payment of the full cost of all Structural
Repairs and Exterior Maintenance in the year in which the Structural Repairs and
Exterior Maintenance is performed and shall pay such amounts as Additional Rent
pursuant to Section 3.1(c) hereof upon the presentation of invoices by Landlord.
14.2 Tenant shall keep and maintain the Demised Premises in a good and
complete state of repair and condition, except for ordinary wear and tear.
Except for Structural Repairs and Exterior Maintenance, Tenant shall make and
perform all interior non-structural repairs and maintenance, including, but not
limited to, the plumbing, heating, ventilation, air conditioning and electrical
equipment and systems, lights and lighting, necessary to preserve and maintain
the Demised Premises and the appurtenances belonging thereto, and will not call
upon Landlord during the Term for the making of any repairs or replacements
whatsoever, except for Structural Repairs and Exterior Maintenance. All such
repairs and replacements shall (a) be performed in a good and workmanlike
manner, (b) be at least substantially equal in quality and usefulness to the
original work, (c) be of first- class modern character, and (d) not diminish the
overall value of the Demised Premises. All repairs and replacements and other
property attached to or used in connection with the Demised Premises by or on
behalf of Tenant shall be and become the property of Landlord
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without payment therefor immediately upon completion or installation thereof
except as otherwise approved by Landlord at the time the repairs or replacements
are made.
15. GLASS, ETC., DAMAGE
In case of the destruction of or any damage to the glass in the Demised
Premises, or the destruction of or damage of any kind whatsoever to the Demised
Premises, caused by the carelessness, negligence or improper conduct on the part
of the Tenant or the Tenant's agents, employees, guests, licensees, invitees,
subtenants, assignees or successors, the Tenant shall repair the said damage or
replace or restore any destroyed parts of the Demised Premises as speedily as
possible at the Tenant's own cost and expense.
16. ALTERATIONS OR IMPROVEMENTS
16.1 No alterations, additions or improvements shall be made, and no
climate regulating, air conditioning, cooling, heating or sprinkler systems,
heavy equipment, apparatus and fixtures., shall be installed in or attached to
the Demised Premises without the written consent of the Landlord, which the
property of the Landlord and shall be surrendered with the Demised Premises and
as part thereof upon the expiration or sooner termination of this Lease, without
hindrance, molestation, or injury.
16.2 Upon quitting, vacating or abandonment of the Premises by the Tenant,
Landlord shall have the option of requiring the Tenant to remove any alteration,
addition or improvement at the Tenant's expense if so noted at time of approval
prior to the expiration of the Lease. In the event Tenant fails to perform such
removal, Landlord shall have the right to do so at the cost and expense of the
Tenant.
17. SIGNS
The Tenant shall not place nor allow to be placed any signs of any kind
whatsoever, upon, in or about the Demised Premises or any part thereof, except
of a design and structure to conform aesthetically with the existing signage and
in or at such places as may be indicated and consented to by the Landlord in
writing, which consent shall not be unreasonably refused or delayed. In case the
Landlord or the Landlord's agents, employees or representatives shall deem it
necessary to remove any such signs in order to paint or make any repairs,
alterations or improvements in or upon the Demised Premises or any part thereof,
they may be so removed, but shall be replaced at the Landlord's expense when the
said repairs, alterations or improvements shall have been completed. Any signs
permitted by the Landlord shall at all times conform with all municipal
ordinances or other laws and regulations applicable thereto.
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18. COMPLIANCE WITH LAWS AND REGULATIONS
18.1 Tenant shall not use or occupy or permit the Demised Premises to be
used or occupied, nor do or permit anything to be done in or on the Demised
Premises, in whole or in part, in a manner which would in any way violate any
certificate of occupancy affecting the Demised Premises, or make void or
voidable any insurance then in force with respect to the Demised Premises, or
which may make it difficult or impossible to obtain fire or other insurance
required to be furnished by Landlord under-this agreement, or as will cause or
be apt to cause structural injury to all or any part of the buildings, or as
will constitute a public or private nuisance.
18.2 During the term of this Lease, Tenant, at Tenant's sole cost and
expense, shall promptly comply with all present and future laws, ordinances,
orders, rules, regulations, and requirements of all Federal, State, and
Municipal governments, courts, departments, commissions, boards, and officers,
any national or local board of fire underwriters, or any other body exercising
functions similar to those of any of the foregoing, foreseen or unforeseen,
ordinary as well as extraordinary, which may be applicable to all or any part of
the Demised Premises and the sidewalks, curbs, streets, and roads adjoining the
Demised Premises or to the use or manner of use of the Demised Premises.
18.3 Tenant shall indemnify Landlord with respect to the foregoing, of and
from all obligations, costs or expenses, fines, penalties, claims for damages of
every kind and nature arising out of any failure to comply with any such law,
ordinance, order, rule, regulation, or requirement, the intention of the parties
being with respect thereto that Tenant shall discharge and perform all the
obligations of Landlord, as well as all the obligations of Tenant, arising and
indemnify Landlord so that at all times the rental of the Demised Premises shall
be net to Landlord without deduction or expense on account of any such
requirement.
19. RESTRICTION OF USE
The Tenant shall not occupy or use the Demised Premises or any part
thereof, nor permit or suffer the same to be occupied or used for any purposes
other than as herein limited, nor for any purpose deemed unlawful, disreputable,
or extra hazardous, on account of fire or other casualty, nor to increase the
risk of environmental contamination.
20. COVENANT AGAINST LIENS
Tenant agrees that it shall not encumber, or suffer or permit to be
encumbered, the Demised Premises or the fee thereof by any lien, charge or
encumbrance, and Tenant shall have no authority to mortgage or hypothecate this
Lease in any way whatsoever; provided that in the case of any mechanics' or
materialmens' lien or notice of intention, Tenant shall have a period of ten
(10) days from receiving notice of the existence thereof to cause any such lien
to be released and
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discharged.
21. LANDLORD'S RIGHT TO CURE
Landlord, its agents, contractors, consultants and workmen shall have the
right, but shall not be obligated, to enter into and upon the Demised Premises
at all reasonable times for the purpose of inspection and examination of the
state of repair and condition thereof and in order to make such repairs, or
otherwise cure any conditions, as shall be necessary as a consequence of any
failure of Tenant to meet its obligations under this Lease. The cost of any such
repairs or other cure undertaken by Landlord, together with interest thereon at
a rate of 3% over the prime rate of interest as published in the Wall Street
Journal on the date Landlord makes such repair or effects such other cure, shall
be deemed to be Additional Rent payable by Tenant upon demand by Landlord. The
undertaking of any such repairs or other cure by Landlord shall not constitute a
waiver by Landlord of any right or remedy provided by this Lease upon Tenant's
default in the undertaking of such repairs or other cure.
22. SNOW AND ICE REMOVAL
Landlord's obligation to keep the sidewalks and parking areas free of snow
and ice shall be strictly limited to reasonable activity for removal considering
the weather, the availability of men and equipment, and other factors outside
the control of the Landlord. The Tenant accepts all risk of use of such
facilities, and any act or action by the Landlord or its agents shall be deemed
not to create any liability of any kind whatsoever, the Tenant hereby releasing
the Landlord for the same as a condition hereof.
23. ASSIGNMENT OR SUBLETTING
23.1. Tenant shall have the right, upon written notice to Landlord and
after obtaining Landlord's prior written consent, which consent, shall not be
unreasonably withheld, to sublet less than all of the Premises; provided,
however, that the Tenant and the sublessee shall execute an agreement in which
the sublessee agrees to assume and comply with all of the terms and provisions
of this Lease.
23.2 Tenant shall not sublet all of the Demised Premises or assign its
interest in the Lease without the Landlord's express prior written consent,
which consent shall not be unreasonably withheld. If the Tenant shall desire to
sublet all of the Demised Premises or to assign its interest in the Lease, it
shall first submit in writing to the Landlord an offer signed by the proposed
subtenant or assignee which includes:
(a) the name and address of the proposed sublessee or assignees;
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(b) the terms and conditions of the proposed subletting or assignment;
(c) the nature and character of the business of the proposed sublessee
or assignee;
(d) a financial statement of the proposed subleasee or assignee.
Upon Tenant's notice to Landlord of any such proposed subletting or assignment,
Landlord shall have the right, in its sole and unqualified discretion, either
(a) to consent to such sublease or assignment, (b) to reasonably withhold such
consent or (c) without payment of any kind to Tenant and by written notice sent
to Tenant within 30 days thereafter, to cancel and terminate the Lease on a
specified date which shall be not later than 30 days after the date of
Landlord's notice. If Landlord elects to cancel and terminate the Lease, the
Lease shall terminate and come to an end on the date specified by Landlord
without recourse to either party except for rights and obligations accrued prior
thereto.
23.3 If this Lease be assigned with the consents as aforesaid or, if the
Demised Premises or any part thereof be au lot to or occupied by anybody other
than Tenant after the occurrence of an Event of Default, Landlord may collect
rent from the assignee, subleasee or occupant and apply the net amount collected
to the Base Rent and Additional Rent payable hereunder. Landlord shall be
entitled to retain 100% of the amount by which such consideration exceeds the
Base Rent and Additional Rent payable hereunder (prorated to reflect the amount
of space sublet) for its own use.
23.4 Any attempted assignment, encumbrance, sublease or concession by
Tenant without Tenant's full compliance with the provisions of this Section
shall be void and shall constitute an Event of Default under this Lease. This
prohibition includes any subletting or assignment which would otherwise occur by
operation of law, including as a result of a merger, consolidation,
reorganization, transfer or other change of Tenant's corporate or proprietary
structure. Landlord shall be obligated to consent to a merger or reorganization
of Tenant in any case where (i) a majority of the outstanding shares of stock of
the surviving corporation are owned by Xxx Xxxxxx and Xxxxxxx Xxxxxx Xxxxxxxxxx
and (ii) the available cash from operating working capital plus the open no less
than $1,000,000.00. Thereafter, within six (6) months that available cash shall
continue to be $1,000,000.00 without the available working capital credit line
and in a one year period shall be $1,500,000.00 without the available working
capital credit line. Tenant shall make available to Landlord, upon request, the
current financial statements, other than those issued annually at fiscal June
30th, shall be internal interim statements, whereas the annual statements shall
be audited. Any change in ownership or control, directly or indirectly, of
Tenant shall be deemed an assignment of this Lease. Consent by Landlord and
other persons or entities to any assignment or subletting shall not constitute a
waiver of the necessity for such consent to any subsequent assignment or
subletting.
12
Notwithstanding any such assignment or subletting, Tenant herein shall remain
primarily liable for the payment of Base Rent and Additional Rent reserved
hereunder and for the performance of all obligations imposed upon Tenant by this
Lease.
23.5 Landlord may require a payment not to exceed Five Hundred and 00/100
($500.00) Dollars to cover its handling charges for each request for consent to
any sublet or assignment prior to its consideration of the same. Tenant
acknowledges that its sole remedy with respect to any assertion that Landlord's
failure to consent to any sublet or assignment is unreasonable shall be the
remedy of specific performance and Tenant shall have no other claim or cause of
action against Landlord as a result of Landlord's actions in refusing to consent
thereto.
24. MORTGAGE PRIORITY
This Lease shall not be a lien against the Demised Premises in respect to
any mortgages that may hereafter be placed upon the Demised Premises. The
recording of such mortgage or mortgages shall have preference and precedence and
be superior and prior in lien to this Lease, irrespective of the date of
recording and the Tenant agrees to execute any instruments, without cost, which
may be deemed necessary or desirable to further affect the subordination of this
Lease to any such mortgage or mortgages. A refusal by the Tenant to execute such
instruments shall entitle the Landlord to the option of canceling this Lease,
and the Term hereof is hereby expressly limited accordingly. In the case of any
mortgage granted by Landlord after the date hereof, Landlord shall use its
reasonable best efforts to obtain from such mortgagee a non-disturbance
agreement for the benefit of the Tenant.
25. CERTIFICATES BY TENANT
Tenant agrees at any time and from time to time during the Term of this
Lease, within 10 days after written request from Landlord, to execute,
acknowledge and deliver to Landlord or to a third party a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), and the dates to which the Base Rent,
Additional Rent and other charges have been paid in advance, if any, and stating
whether or not, to the best knowledge of Tenant, Landlord is in default in the
performance of any covenant, agreement or condition contained in this Lease,
and, if so, specifying each such default of which Tenant may have knowledge.
Such third party shall have the right to rely upon the contents of any such
written statement of Tenant.
26. CONDEMNATION
26.1 If the entire Demised Premises shall be taken for any public or
quasi-public use, by any power or authority having the right to take the same by
condemnation, eminent
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domain, or otherwise, the amount awarded for compensation for the whole of the
Demised Premises so taken, including all improvements, changes additions and
alterations made by Tenant, shall be paid to Landlord. Tenant agrees that it
shall have no claim for any damages or loss against Landlord by reason of such
condemnation or taking. However, Tenant reserves the right to retain all sums
awarded as compensation for Tenant's relocation expenses, if any. Tenant agrees
that it will assert no claim for any improvements, changes, additions and
alterations made by it to the Demised Premises, except where such claim may be
asserted by Tenant without resulting in any diminution of the award to Landlord.
This Lease shall terminate as of the date title to all of the Demised Premises
shall vest in the taking body or the date Tenant is ousted from possession of
the Demised Premises, whichever is earlier, and Landlord and Tenant shall
thereupon be released of and from all obligations and liabilities to each other
accruing hereunder thereafter. Tenant shall pay all Base Rent and Additional
Rent accrued up to the time of the passing of title, and if any such rent has
been paid in advance, Landlord shall return such surplus.
26.2 If a part of the Demised Premises, but less than the entire Demised
Premises, is so taken by such power or authority as aforesaid, then and in such
event there shall be a reduction in the Base Rent in relation to the fair rental
value of that part of the Demised Premises so taken as compared with the rental
value for the entire Demised Premises, and this Lease, together with all of the
agreements, covenants, conditions and obligations herein contained, shall
continue in full force and effect for the balance of the term as if such taking
had not occurred. If the part of the Demised Premises so taken includes the
building or a portion thereof or any substantial portion of Tenant hereby
expressly grants unto Landlord the entire amount of said award or compensation,
hereby expressly disclaiming all right, title and interest therein, and agrees
that it shall have no claim for any damages or loss against Landlord by reason
of such condemnation or taking. Following such a partial taking, Landlord shall
restore the Demised Premises as required to render the same tenantable as a
single unit.
26.3 If the temporary use of the whole or any part of the Demised Premises
shall be taken by any lawful power or authority by the exercise of the right of
condemnation, eminent domain or otherwise, or by agreement between Tenant and
those authorized to exercise such right, Tenant shall give prompt notice thereof
to Landlord. In such event the Term shall not be reduced or affected in any way
and Tenant shall continue to pay in full the Base Rent, Additional Rent and
other charges herein reserved without reduction or abatement and Tenant shall be
entitled to receive for itself any award or payment made for such use, provided,
however, that in the event such period of temporary use shall extend beyond the
Termination Date, the award or payment shall be ratably apportioned between
Landlord and Tenant.
26.4 The terms "condemnation", "taking" or similar terms as herein used
shall mean the acquisition by a public or quasi-public authority having the
right to take the same by condemnation or eminent domain or otherwise,
regardless of whether such taking is the result of actual condemnation or of
voluntary conveyance by Landlord.
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26.5 Tenant agrees to execute and deliver any instruments as may be deemed
necessary by Landlord to expedite any condemnation proceeding or to effectuate a
proper transfer of title to such governmental or other public authority, agency,
body or public utility seeking to take or acquire the Demised Premises or any
portion-thereof.
26.6 If notwithstanding the terms and conditions hereof Tenant shall assert
a claim or right to claim to any portion of any amount which may be awarded as
damages or paid as the result of such condemnation proceedings or paid to
Landlord as the purchase price for an option, sale or conveyance in lieu of
formal condemnation proceedings, other than for amounts paid as compensation for
Tenant's relocation expenses, Tenant shall be liable to Landlord for all damages
sustained and all expenses incurred by Landlord, including counsel fees and
costs of legal proceedings, as a result of the assertion by Tenant of any such
claim.
27. DEFAULT BY TENANT
27.1 If before or during the Term there shall occur any of the following
events ("Events of Default"):
(a) if Tenant shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as they
become due, or shall file a petition in bankruptcy, or shall be adjudicated
a bankrupt or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer admitting or not contesting the
material allegations of a petition against it in any such proceeding, or
shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Tenant or any material part of its assets; or
(b) if, within sixty (60) days after the commencement of an proceeding
or acquiescence of Tenant or any trustee, receiver or liquidator of Tenant
or of any material part of 'its assets, such appointment shall. not have
been vacated; or
(c) if the interest of Tenant in the Demised Premises shall be sold
under execution or other legal process; or
(d) if Tenant shall fail to pay any installment of Base Rent or
Additional Rent for ten (10) days after the same is due; or
(e) if Tenant shall fail to perform or observe any requirement,
obligation, agreement, covenant or condition of this Lease, other than the
payment of any installment of Base Rent or Additional Rent, and any such
failure shall continue for 15 days after Landlord gives Tenant notice
thereof, or if such failure cannot be remedied within 15 days, then for a
reasonable time thereafter, provided Tenant commences to remedy such
failure within said 15 day period and
15
prosecutes the same to completion with diligence; or
(f) if any representation or warranty contained in this Lease shall
prove to be incorrect in any material respect on the date upon which it was
made; or
(g) if the Demised Premises shall become vacant, abandoned or are not
opened for business for a period of 30 consecutive days;
then at any time following any of such Events of Default, Landlord, without
waiving any other rights herein available to Landlord at law or in equity, may
either (1) give Tenant notice of termination of this Lease, or (2) without
terminating this Lease, give Tenant notice of Landlord's intention to re-enter
and take possession of the Demised Premises, with or without legal process. The
giving of-either of such notices to Tenant shall terminate Tenant's right to
possession of the Demised Premises under this Lease without prejudice, however,
to the rights of Landlord to exercise all other available legal remedies and
without discharging Tenant from any of its liabilities hereunder.
27.2 If Landlord elects to terminate Tenant's right to possession of the
Demised Premises under Section 27.1 following an Event of Default, Landlord may
re-enter and take possession of the Demised Premises, with or without legal
process, and Tenant hereby waives any claim for damages as a result thereof, and
Tenant shall be obligated to pay to Landlord as damages upon demand, and
Landlord shall be entitled to recover of and from Tenant, (a) all Base Rent and
Additional Rent payable to the date of termination of Tenant's right to
possession, plus (b) the cost to Landlord of all reasonable legal and other
expenses and costs (including attorney's fees) incurred by Landlord in obtaining
possession of the Demised Premises, in enforcing any provision of this Lease, in
preserving the Demised Premises during any period of vacancy, in making such
alterations and repairs as Landlord may reasonably deem necessary or advisable
in operating and maintaining the Demised Premises, and in reletting the Demised
Premises, including all reasonable brokerage commissions therefor, plus (c)
either
(i) in the event of Landlord's giving notice of its intention to
re-enter and take possession without terminating this Lease, damages
(payable in monthly installments, in advance, on the first day of each
calendar month following the giving of such notice and continuing until the
date originally fixed herein for the expiration of the Term) in amounts
equal to the Base Rent and Additional Rent herein reserved, less the net
amount of rent, if any, which may be collected and received by Landlord
from the Landlord may grant concessions or charge a rental in excess of
that provided in this Lease (Tenant shall have no right to any excess); or
(ii) if Landlord gives notice of termination of this Lease, an award
for liquidated damages in an amount which, at the time of such termination,
is equal to the excess, if any of the installments of Base Rent and the
aggregate of all sums payable hereunder as Additional Rent (for such
purpose considering the annual amount of Additional Rent to equal the
amount thereof payable for the 12 months immediately preceding such
termination, or the annualized portion
16
of Additional Rent payable from the Commencement Date to the date of such
termination if this Lease then shall have been in effect for less than 12
months) reserved hereunder for the period which would otherwise have
constituted the unexpired portion of the Term, plus the value of all other
consideration to be paid or performed by Tenant during such period, over
the fair rental value of the Demised Premises, as of the date of such
termination, for such unexpired portion of the Term, said liquidated damage
amount to be discounted at the then Prime Rate of interest as published in
the Wall Street Journal to determine its present value at the time of the
award; prior to Tenant's full payment of any liquidated damages awarded to
Landlord, Tenant shall continue to pay punctually to Landlord all Base Rent
and Additional Rent to the same extent and at the same time as if this
Lease had not been terminated and receive full credit for such payments
against the award for liquidated damages.
If, after Tenant's default, Landlord shall elect to re-enter and take possession
without terminating this Lease, Landlord shall have the right at any time
thereafter to terminate this Lease for such previous default, whereupon the
provisions of this Section.
27.2 with respect to termination will thereafter apply.
27.3 Landlord-may xxx for and collect any amounts which may be due pursuant
to the provisions of Section 27.2 above from time to time as Landlord may elect,
but no such suit shall bar or in any way prejudice the rights of Landlord to
enforce the collection of amounts due at any time or times thereafter by a like
or similar proceeding. Tenant expressly waives service of any notice of
intention to re-enter that may be required by law, and waives any and all rights
to recover or regain possession of the Demised Premises, or to reinstate or to
redeem this Lease, or other right of redemption as permitted or provided by or
under any statute, law or decision now or hereafter in force and effect.
27.4 Without limiting any other right of Landlord hereunder, at Landlord's
option, Tenant shall pay a "Late Charge" of eight (8%) percent of any
installment of Base Rent or Additional Rent received by the Landlord more than 5
days after the due date thereof ("Late Payment") to cover the extra expense
involved in handling delinquent payments.
27.5 Tenant agrees to pay all costs of proceedings by Landlord for the
enforcement of any terms and conditions of this Lease, including reasonable
attorney's fees and expenses, which shall be deemed Additional Rent for the
period with respect to which the Event of Default occurred, payable immediately
upon the filing of any suit for possession or for money damages.
27.6 No remedy herein conferred upon or reserved to Landlord is intended to
be exclusive of any other remedy herein or by law provided, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in
17
equity or by statute. The receipt and acceptance by Landlord of rent with
knowledge of the or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount be
greater, equal to, or less than the amount of the loss or damages referred to
above.
27.7 No waiver by Landlord of any Event of Default or any default by Tenant
in any covenant, agreement or obligation under this Lease shall operate to waive
or affect any subsequent Event of Default or default in any covenant, agreement
or obligation hereunder, nor shall any forbearance by Landlord to enforce a
right or remedy upon an Event of Default or any such default be a waiver of any
of its rights and remedies with respect to such or any subsequent default or in
any other manner operate to the prejudice of Landlord.
28. REMEDIES AVAILABLE
In addition to all other remedies available at law or equity or hereunder,
Landlord may enjoin any default or threatened default by Tenant.
29. SURRENDER BY TENANT AT END OF TERM
29.1 Tenant will surrender possession of the Demised Premises and remove
all goods and chattels and other personal property in the possession of Tenant,
by whomsoever owned, at the end of the Term or at such other time as Landlord
may be entitled to re-enter and take possession of the Demised Premises pursuant
to any provision of this Lease, and leave the Demised Premises in as good order
and condition as they were at the beginning of the Term, reasonable wear and
tear excepted. In default of surrender of possession and removal of goods and
chattels at the time aforesaid, Tenant will pay to Landlord the rent reserved by
the terms of this Lease for such period as Tenant either holds over possession
of the Demised Premises or allows its goods and chattels or other personal
property in its possession at such time to remain in the Demised Premises, and
in addition thereto, statutory penalties and all other damages which Landlord
shall suffer by reason of Tenant holding over in violation of the terms and
provisions of this Lease, including all reasonable claims for damages made by
any succeeding tenant or purchaser of the Demised Premises against Landlord
which may be founded upon delay by Landlord in giving possession of the Demised
Premises to such succeeding tenant or purchaser, so far as such damages are
occasioned by the unlawful holding over of Tenant.
29.2 If Tenant fails to remove all goods and chattels and other personal
property in possession of Tenant, by whomsoever owned, at the end of the Term,
or at such other time as Landlord may be entitled to re-enter and take
possession of the Demised Premises pursuant to any provision of this Lease,
Tenant hereby irrevocably makes, constitutes and appoints Landlord as the agent
and attorney-in-fact of Tenant to remove all goods and chattels and other
personal property, by whomsoever owned, from the Demised Premises to a
reasonably safe place of storage,
18
such moving and storage to be at the sole cost and expense of Tenant, and Tenant
covenants and agrees to reimburse and pay to Landlord all expenses which
Landlord incurs for the removal and storage of all such goods and chattels.
Alternatively at the option of Landlord, Tenant shall be deemed to have
abandoned such goods, chattels and other personal property and the same shall
become the property of Landlord.
29.3 No act or thing done by Landlord shall be deemed an acceptance of the
surrender of the Demised Premises unless Landlord shall execute a written
release of Tenant. Tenant's liability hereunder shall not be terminated by the
termination of this Lease or by the execution by Landlord of a new lease of the
defend and save Landlord harmless against any liability, obligation,
requirement, commitment,'cost, expense, loss, claim, fine, penalty or damage
which Landlord may suffer as a result of any subsurface, ambient air, soil,
surface water, groundwater, leachate, run-on or run-off, stream or other
pollution caused by Tenant in its use of the Demised Premises, whether such
pollution is on or off the Demised Premises. Tenant, in any event, will take
immediate steps to halt, remedy or cure any such pollution caused by Tenant in
connection with its use of the Demised Premises to the satisfaction of any and
all government agencies having jurisdiction over the matter and in compliance
with then existing government and industry standards for remediation of any such
pollution. Landlord shall be promptly notified of ail actions taken by Tenant or
any other party with respect to such pollution and shall have the right to enter
the Demised Premises in order to observe the remediation of such pollution.
Further, Landlord shall be provided with evidence of Tenant's remediation of
such pollution in compliance with this section. The provisions of this Section
shall survive the termination of this Lease.
31. ECRA CLEARANCE; ENVIRONMENTAL REPRESENTATIONS AND COVENANTS
31.1 For purposes of this Section,
(a) "Hazardous Substances" include any pollutant, dangerous substance,
toxic substance, hazardous waste, hazardous substance or contaminant
regulated under, defined in or pursuant to the Environmental Cleanup
Responsibility Act (N.J.S.A. i3:lK-6 et seq.) ("ECRA"), the Spill
Compensation and Control Act (N.J.S.A. 58:10- 23.11 et seq.), the Resource
Conservation and Recovery Act (42 U.S. Sec. 6901 et seq.), the
Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. Sec. 9601 et seq.) or any other Federal, State or local
environmental law, ordinance or regulation.
(b) "Enforcement Notice" means a summons, citation, directive, order,
claim, litigation, investigation, judgment, letter or other communication,
written or oral, actual or threatened, from the New Jersey Department of
Environmental Protection ("NJDEP"), the United State Environmental-
Protection Agency ("USEPA") or other Federal, State or local agency or
authority, or any other entity or any individual, concerning any
intentional or unintentional action
19
or omission resulting or which might result in the Releasing of Hazardous
Substances into the waters or onto the lands of the State of New Jersey, or
into waters outside the jurisdiction of the State of New Jersey where
damage may have resulted to the lands, waters, fish, shellfish, wildlife,
biota, air or other resources owned, managed, held in trust or otherwise
controlled by, or within the jurisdiction of, the State of New Jersey, or
into the "environment", as such term is defined in 42 U.S.C. 9601(8).
(c) "Releasing" means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing
or dumping.
31.2 Other than in conjunction with the permitted uses as provided for in
this Lease hereof, the Demised Premises shall not be used and/or occupied by the
Tenant to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer or process Hazardous Substances except upon written permission
of the Landlord, which permission may be arbitrarily withheld. The Demised
Premises shall not be used by the Tenant as a "Major Facility", as such term is
defined in N.J.S.A. 58:1023.llb(l).
31.3 Tenant shall not suffer or permit any lien to be attached to the
Demised Premises by any person or entity arising from any intentional or
unintentional action or omission of the Tenant, user and/or operator of the
Demised Premises, resulting in the Releasing of Hazardous Substances into the
waters or onto the lands of the State of New Jersey, or into waters outside the
jurisdiction of the State of New Jersey where damage may have resulted to the
lands, waters, fish, shellfish, wildlife, biota, air or other resources owned,
managed, held in trust or otherwise controlled by, or within the jurisdiction
of, the State of New Jersey, or as a result of the chief executive of the New
Jersey Spill Compensation Fund ("Spill Fund" or "Fund") expending monies from
the Fund to pay for "Damages", as such term is defined in N.J.S.A. 58:10-23.llg
("Damages") and/or "Cleanup and Removal Costs", as such term is defined in
N.J.S.A. 58:10-23.llb(d) ("Cleanup and Removal Costs").
31.4 Tenant shall not suffer or permit any Enforcement Notice or any facts
which might result in any Enforcement Notice with respect to the Demised
Premises.
31.5 If the Tenant obtains knowledge of the attachment of any lien, as set
forth in Section 31.3, or an Enforcement Notice, as set forth in Section 31.4,
or obtains knowledge of facts which may give rise to such lien or Enforcement
Notice, whether written or oral, it shall immediately notify the Landlord in
writing and provide Landlord with a copy of such lien documentation or
Enforcement Notice.
31.6 At the request of Landlord during and after the Term, in the event of
an Enforcement Notice or other circumstances leading Landlord to reasonably
conclude an Enforcement Notice could issue, the Tenant will retain an
environmental consultant, acceptable to
20
the Landlord, to conduct a complete and thorough on-site inspection of the
Demised Premises, including but not limited to a geohydrological survey of soil
and subsurface conditions as well as other tests, to determine the presence of
Hazardous Substances and the consultant shall certify to the Landlord whether,
in his professional judgment, there exists any state of facts which could
reasonably lead to the issuance of an Enforcement Notice.
31.7 In connection with the termination of this Lease or other
circumstances occurring during the Term or prior to Tenant's surrendering
possession of the Demised Premises in accordance with the terms hereof which
require ECRA compliance, the Tenant shall comply with the provisions of ECRA by
securing from -the NJDEP a "Negative Declaration", as such term is defined in
N.J.A.C. 7:26B-1.3, or by securing from the NJDEP and implementing a "Cleanup
Plan", as such term is defined in N.J.A.C. 7:26-1.3 and the Tenant shall post
with the NJDEP a surety bond or other financial security approved by the NJDEP
in an amount sufficient to implement and complete such Cleanup Plan, or in lieu
thereof apply for and obtain an Administrative Consent Order, and perform all
necessary acts in connection therewith, including without limitation, the
implementation of any monitoring or remedial efforts required pursuant to other
applicable environmental laws, ordinances, regulations or policies. In any
event, Tenant shall have the sole and exclusive responsibility to comply at its
own cost and expense with ECRA in connection with the Demised Premises and shall
diligently pursue its compliance efforts to completion. Tenant shall commence
its compliance efforts at least six (6) months prior to the end of the Term and
diligently pursue such efforts to completion. Tenant shall keep Landlord fully
informed of its progress in obtaining the ECRA clearance. Tenant shall provide
Landlord with a copy of all correspondence, reports (including drafts), forms
and other documents submitted to or received from NJDEP within three (3) days of
the preparation or receipt of such documents. Tenant shall notify Landlord at
least three (3) days prior to any meeting with NJDEP and Landlord shall have the
right to attend such meeting. Further, Tenant shall provide ECRA status reports
to Landlord every thirty (30) days during the clearance period directly to the
Landlord. If ECRA clearance is not achieved on or before the end of the Term,
Tenant shall be liable to Landlord as a holdover tenant, without limiting any
other liability of Tenant to Landlord resulting from its default under this
Lease.
31.8 Whenever Tenant shall be undertaking any ECRA compliance efforts as
provided for in Section 31.7 or otherwise, Landlord shall be given notice of and
sufficient opportunity to observe all activities carried out by Tenant in its
compliance effort. Further, the NJDEP, the USEPA and Landlord, its agents,
consultants or contractors shall have the right to enter the Demised Premises at
all reasonable times in order to inspect the Demised Premises and insure
compliance with ECRA and all other Federal, State and local environmental laws,
ordinances, regulations arid policies.
31.9 If there shall be filed a lien against the Demised Premises as set
forth in Section 31.3, including if by the NJDEP pursuant to and in accordance
with the provisions of N.J.S.A. 58:10-23.llf(f) as a result of the chief
executive of the Spill Fund having expended monies
21
from the Spill Fund to pay for Damages and/or Cleanup and Removal Costs, the
Tenant shall immediately either (a) pay the claim and remove the lien from the
Demised Premises, or (b) furnish (i) a bond satisfactory to the Landlord in the
amount of the claim out of which the lien arises, (ii) a cash deposit in the
amount of the claim out of which the lien arises, or (iii) other security
reasonably satisfactory to the Landlord in an amount sufficient to discharge the
claim out of which the lien arises.
31.10 The Landlord, at its option, shall have the right to perform annual
environmental inspections of the Premises and all costs for such audits,
including any engineering or professional fees, will be at the Tenant's expense.
31.11 Whenever the terms ECRA, Spill Fund, Major Facility and similar terms
and statutory references are used in this Lease, they shall be deemed to include
any similar, future or successor statutory references and/or terms as may apply
to the Demised Premises and its use and occupancy by Tenant under this Lease.
31.12 The Tenant represents that its Standard Industrial Classification
Number (hereinafter referred to as "SIC #") is 5600. If there is any change in
the Tenant's SIC #, the Tenant shall immediately advise the Landlord in writing
thereof.
32. ENVIRONMENTAL GUARANTY
Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx Xxxxxxxxxx, who are the controlling
shareholders of Tenant, personally and unconditionally guarantee the performance
by Tenant of its obligations pursuant to Sections 30 and 31 of this Lease,
including without limitations, the performance of any indemnification obligation
arising thereunder, the discharge of any lien, the performance of any obligation
required to be performed by Tenant pursuant to an Enforcement Notice and
compliance by Tenant with any obligations arising under ECRA. The above named
guarantors shall be jointly and severally liable for all obligations to be paid
or performed by them pursuant to this guaranty. This guaranty shall not be
affected or impaired by the death or disability of a guarantor.
33. SECURITY
The Tenant has this day deposited with the Landlord the sum of $44,874.53
as Security for the payment of the rent a Tenant has fully and faithfully
performed all such covenants and conditions and is not in arrears in Base Rent
or Additional Rent. The balance of the Security shall be returned to the Tenant,
without interest, at the expiration of the thirty-sixth (36th) month of the
Term, provided that the Tenant has fully and faithfully performed all such
covenants and
22
conditions and is not in arrears in Base Rent or Additional Rent. During the
Term hereof, the Landlord may, if the Landlord so elects, have recourse to the
Security, to make good any default by the Tenant, in which event the Tenant
shall, on demand, promptly restore the Security to its original amount.
Liability to repay the Security to the Tenant shall run with the reversion and
title to the Demised Premises, whether any change in ownership thereof be by
voluntary alienation or as the result of judicial sale, foreclosure or other
proceedings, or the exercise of a right of taking or entry by any mortgagee. The
Landlord shall assign or transfer the Security, for the benefit of the Tenant,
to any subsequent owner or holder of the reversion or title to the Demised
Premises, in which case the assignee shall become liable for the repayment
thereof as herein provided, and the assignor shall be deemed to be released by
the Tenant from all liability to return the ' Security. This provision shall be
applicable to every alienation or change in title and shall in no wise be deemed
to permit the Landlord to retain the Security after termination of the
Landlord's ownership of the reversion or title. The Tenant shall not mortgage,
encumber or assign the Security without the written consent of the Landlord.
34. QUIET ENJOYMENT
Landlord represents that it has the right to lease the Demised Premises and
agrees that if Tenant shall pay the Base Rent and Additional Rent as herein
provided and shall keep, provide and perform all of the other covenants of this
Lease by Tenant to be kept, observed and performed, Tenant shall and may
peaceably and quietly have, hold and enjoy the Demised Premises for the Term
aforesaid. The Landlord further agrees that it shall not enforce any
unreasonable rules or regulations which would unduly prejudice the conduct of
the Tenant's business, nor which would prevent full and free access to the
Demised Premises by the Tenant, its agents, servants and customers.
35. COMPLETION OF IMPROVEMENTS
"Substantial Completion" of the improvements shall be deemed to have
occurred upon the first day of the occurrence of all of the following
conditions: (a) Construction of the improvements shall have been completed in
accordance with the Work Letter annexed hereto as Exhibit C as the same may be
modified upon the mutual consent of the parties, and in accordance with all
applicable laws, regulations of any applicable governmental bodies except for
minor punch list items, the non-completion of which shall riot materially affect
the appearance of the Demised Premises or the use and occupancy thereof by
Tenant; (b) The heating, plumbing, ventilating and air conditioning systems, all
utility systems (except telephones) servicing the Demised Premises, and all
other systems of the Demised Premises shall have been installed, and in good
operating order; and (c) There shall have been issued a building certificate of
occupancy (including a temporary or conditional certificate of occupancy, if
available) covering the Demised Premises for the work or improvements made by
the Landlord and all such other certificates and permits, if any, evidencing the
completion of construction of the improvements as may be required of the
Landlord by any
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Federal, State or local governmental body so as to permit Tenant's occupancy of
the Demised Premises. Failure of the Tenant to obtain any required government
approval due to its own proposed use and occupancy, shall not be deemed a at no
expense to Tenant. Occupancy of the Demised Premises, either before or after the
date of Substantial Completion of the improvements, shall not be deemed a waiver
of any rights of Tenant to the full completion of such construction, including
each and every unfinished item thereof; nor shall it affect the obligation of
the Landlord, upon and after such occupancy by Tenant of the Demised Premises.
36. ENTRY PRIOR TO COMPLETION
Tenant, at its sole risk, may with the Landlord's consent prior to the
Substantial Completion of the improvements, enter upon the Demised Premises
during the course of construction and install such furniture, furnishings, trade
and other fixtures, interior decorations, machinery and equipment as it may
elect and begin the storing of Tenant's products; provided, however, that such
entry, installation and storage, in the sole judgment of Landlord, shall not
interfere with construction by Landlord that is then taking place by Tenant as
to the Demised Premises or with any labor employed by Landlord (or by any
contractor or subcontractor) in performing such construction work; and provided
further, that Tenant shall indemnify Landlord and Landlord's contractors against
any claims for personal injury or property damage arising from such entry,
installation or storage. Tenant shall have no obligation to make any payment to
Landlord, whether in the form of rent or otherwise on account of any such entry,
installation or storage made by Tenant. Such entry, installation and/or storage
shall not be deemed to be an acceptance by Tenant of the construction of, or as
an occupancy by Tenant of the Demised Premises.
37. OPTION TO RENEW
37.1 Provided that no Event of Default has occurred and is continuing, the
Tenant shall have the option to renew the within Lease for a period of Five (5)
Years (the "First Option Term") from the date of the expiration thereof upon the
same terms and conditions, except that the annual Base Rent shall be calculated
as follows:
Month 1 through Month 6 inclusive:
$6.33 per square foot per year
Month 7 through Month 18 inclusive:
$6.58 per square foot per year
Month 19 through Month 30 inclusive:
$6.84 per square foot per year
Month 31 through Month 42 inclusive:
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$7.11 per square foot per year
Month 43 through Month 54 inclusive:
$7.39 per square foot per year
Month 55 through Month 60 inclusive:
$7.69 per square foot per year
The Tenant shall give the Landlord not less than Twelve (12) Months written
notice, as set forth in Section 45, prior to the expiration date of the initial
Term, TIME BEING OF THE ESSENCE FOR SUCH NOTICE and upon failure to give such
notice to the Landlord, the within option is deemed waived and void.
37.2 Provided that no Event of Default has occurred and is continuing, the
Tenant shall have a further option to renew the within Lease for a period of
Five (5) Years (the "Second Option Term") from the date of the expiration of the
First Option Term, upon the same terms and conditions, except that the annual
Base Rent for the first year of the Second Option Term shall be the greatest of
the following amounts:
(i) $7.69 per square foot per year;
(ii) the then fair market rent for comparable space in Bergen County,
New Jersey; and
(iii) the amount obtained by multiplying $5.00 per square foot per
year by a fraction, the numerator of which is the CPI for the first month
of the second renewal term and the denominator of which is the CPI for the
month in which the Commencement Date occurs.
For each subsequent year during the Second Option Term, the Base Rent shall be
adjusted by multiplying the Base Rent in effect during the first year of the
Second Option Term by a fraction, the numerator of which shall be the CPI for
the first month of the applicable year and the denominator shall be the CPI for
the first month of the Second Option Term; provided that in no event shall the
Base Rent be less than the amount payable for the immediately preceding year.
The Tenant shall give the Landlord not less than Twelve (12) Months written
notice, as set forth in Section 45, prior to the expiration date of the First
Option Term, TIME BEING OF THE ESSENCE FOR SUCH NOTICE and upon failure to give
such notice to the Landlord, the within option is deemed waived and void.
38. RIGHT TO EXHIBIT
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The Tenant agrees to permit the Landlord and the Landlord's agents,
employees or other representatives to show the Demised Premises to persons
wishing to rent or purchase the same, and Tenant agrees that Twelve (12) Months
preceding the expiration of the Term hereof,, the Landlord or the Landlord's
agents, employees or other representatives shall have the right to place notices
on the-front of the Demised Premises or any part thereof, offering the Demised
Premises for rent or for sale; and the Tenant hereby agrees to permit the same
to remain thereon without hindrance or molestation.
39. BROKERAGE
Tenant represents and warrants to Landlord that Tenant has dealt only with
Xxxxxxx Xxxxxxxx Company, Inc. and Team Resources, Inc. (the "Brokers") as
Brokers in connection with this Lease and no other broker participated in or
negotiated this Lease or is entitled to any commission arising from the
execution hereof; Tenant agrees to defend, indemnify and hold harmless the
Landlord from any and all claims of other brokers and expenses in connection
therewith attributable to a breach of the representation made by Tenant. Tenant
further covenants that it will not deal with any other broker other than the
Brokers in connection with the leasing of any additional space by Tenant in the
Building or any extension or renewal of this Lease and shall indemnify Landlord
against any additional commission which may become payable as a result of a
breach of such representation. Landlord agrees to defend, indemnify and hold
harmless Tenant from any and all claims by any brokers alleging to have acted on
behalf of Landlord.
40. BINDING NATURE OF LEASE
The provisions of this Lease shall apply to, bind and inure to the benefit
of Landlord and Tenant and their respective heirs, successors, legal
representatives and assigns. It is understood that the term "Landlord" as used
in this Lease means only the owner, a mortgagee in possession or a term lessor
of the building, so that in the event of any sale of the building or of the
building, or the mortgagee in possession has assumed and agreed to carry out any
and all covenants and obligations of Landlord hereunder.
41. CONFORMATION WITH LAWS AND REGULATIONS
The Landlord may pursue the relief or remedy sought in any invalid clause
by conforming the said clause with the provisions of the statutes or the
regulations of any governmental agency in such case made and provided as if the
particular provisions of the applicable statutes or regulations were set forth
herein at length. In all references herein to any parties, persons, entities or
corporations, the uses of any particular gender or the plural or singular number
is intended to include the appropriate gender or number as the text of the
within instrument may require.
42. NON-WAIVER BY LANDLORD
26
The various rights, remedies, options and elections of the Landlord,
expressed herein, are cumulative, the failure of the Landlord to enforce strict
performance by the Tenant of the conditions and covenants of this Lease or to
exercise any election or option, or to resort or have recourse to any remedy
herein conferred or the acceptance by the Landlord of any installment of Base
Rent and Additional Rent after any breach by the Tenant, in any one or more
instances, shall not be construed or deemed to be a waiver or a relinquishment
for the future by the Landlord of any such conditions and covenants, options,
elections or remedies, but the same shall continue in full force and effect.
43. NON-PERFORMANCE BY LANDLORD
This Lease and the obligation of the Tenant to pay the Base Rent and
Additional Rent hereunder and to comply with the covenants and conditions
hereof, shall not be affected, curtailed, impaired or excused because of the
Landlord's inability to supply any service or material called for herein, by
reason of any rule, order, regulation or pre-emption by any governmental entity,
authority, department, agency or subdivision or for any delay which may arise by
reason of negotiations for the adjustment of any fire or other casualty loss or
because of strikes or other labor trouble or for any cause beyond the control of
the Landlord.
44. VALIDITY OF LEASE
The terms, conditions, covenants and provisions of this Lease shall be
deemed to be severable. If any clause or provision herein contained shall be
adjudged to be invalid or unenforceable by a court of competent jurisdiction or
by operation of any applicable law, it shall not affect the validity of any
other clause or provision herein, but such other clauses or provisions shall
remain in full force and effect.
45. NOTICES
45.1 Whenever it is provided herein that notice, demand, request or other
communication shall or may be given to or served upon either of the parties, or
if either of the parties shall desire to give or serve upon the other any
notice, demand, request or other communication with respect hereto or the
Demised Premises, each such notice, demand, request or other communication shall
be in writing, and, any law or statute to the contrary notwithstanding, shall be
given or served as follows:
(a) if given or served by Landlord, either by hand herein provided;
and
(b) if given or served by Tenant, by hand delivery, telecopy (Fax),
overnight express mail service, or by mailing the same to Landlord by
registered or certified mail,
27
postage prepaid, return receipt requested, addressed to Landlord at the
address first set forth above or at such other address as Landlord may from
time to time designate by notice given to Tenant in the manner herein
provided.
45.2 Every notice, demand, request or other communication hereunder shall
be deemed to have been given or served (i) at the time that the same shall be
hand delivered or telecopied (Fax) or (ii) one day after the same shall have
been sent by overnight express mail service or (iii) two days after the same
shall have been deposited in the United States mails, postage prepaid, by
certified or registered mail [regardless of whether the delivery is actually
accepted].
46. ENTIRE CONTRACT
This Lease contains the entire contract between the parties. No
representative, agent or employee of the Landlord has been authorized to make
any representations or promises with reference to the within letting or to vary,
alter or modify the terms thereof. No additions, changes or modifications,
renewals or extensions hereof shall be binding unless reduced to writing and
signed by the Landlord and the Tenant.
47. CAPTIONS
The captions to the Sections of this Lease are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of this Lease or any part thereof nor in-any way affect this Lease or
any part thereof.
48. COVENANTS AND CONDITIONS
All of the terms and provisions of this Lease shall be deemed and construed
to be "Covenants" and "Conditions" to be performed by the respective parties as
though words specifically expressing or importing covenants and conditions were
used in each separate term and provision hereof.
49. WAIVERS BY PARTIES
Landlord and Tenant hereby mutually waive their rights to trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Lease, Tenant's use or occupancy of the Demised Premises,
and any claim of injury or damage. Tenant waives any rights conferred upon it
pursuant to N.J.S.A. 2A:18-60 to apply for an order removing any summary action
for possession to Superior Court.
50. COVENANTS OF FURTHER ASSURANCE
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If, in connection with obtaining financing for the Demised Premises, a
lender shall request reasonable modifications in this Lease as a condition to
such financing, Tenant will not unreasonably withhold, delay or defer its
written consent thereto, provided that such modifications do not in Tenant's
reasonable judgment increase the obligations of Tenant hereunder or materially
adversely affect the leasehold interest hereby created or Tenant's use and
enjoyment of the Demised Premises.
Federal Courts located in the State of New Jersey. ln the event of any such
suit, the parties hereof consent to the personal jurisdiction of such courts and
waive any defense based oi improper venue.
52. NO OPTION
The submission of this Lease for examination does not constitute a
reservation of or option for the Demised Premises, and this Lease becomes
effective as a Lease only upon execution and delivery thereof by Landlord and
Tenant.
53. OPTION TO LEASE ADDITIONAL SPACE
Provided that no Event of Default has occurred and is continuing, Landlord
agrees that when leaseable space (the "Additional Space") of approximately
23,487 square feet adjacent to the Demised Premises becomes available for rental
which must occur during the period beginning with the twenty-fifth (25th) month
of the Term and ending with the seventy-second (72nd) month, Landlord shall
notify the Tenant in writing that such Additional Space is available for rent.
Tenant shall have the first option to lease the Additional Space at the Base
Rent in effect at the time of the taking of Additional Space and the Base Rent
for the Additional Space shall be adjusted thereafter to coincide with the
increases in Base Rent as set forth in Section 2 herein. Tenant shall give
Landlord written notice, within thirty (30) days after Landlord gives notice to
Tenant thereof, of its intention to lease the Additional Space, TIME BEING OF
THE ESSENCE FOR SUCH NOTICE. Upon failure to give such notice to Landlord, the
within option is deemed waived and void. If Tenant does not exercise the
foregoing option, Landlord shall be free to lease the Additional Space, provided
that the maximum term of any lease (including any option term) shall not exceed
ten (10) years. If the Additional Space becomes available prior to the
twenty-fourth (24th) month, Landlord shall be permitted to lease the space,
provided that the term of any such lease (including any option periods) shall
expire prior to the end of the seventy-second (72nd) month of this lease.
54. PARKING
Landlord shall provide in the Demised Premises parking area, for Tenant's
use during the Term hereof, one parking space for every 1000 square feet of
gross rentable space occupied by Tenant.
29
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, or caused these presents to be signed by their proper corporate officers
and their proper corporate seal to be hereto affixed, the day and year first
above written.
Signed, Sealed and Delivered in
the presence of or attested by:
FRANKLIN ASSOCIATES
/s/ By: /s/
-------------------- --------------------------
Landlord
XXX XXXXXX, LTD.
/s/ By: /s/Xxxxxx Xxxxxx, Executive V.P.
--------------------- -----------------------------------
Tenant Title
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Individually with respect to Section 32
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Individually with respect to Section 32
[EXHIBITS OMITTED]
