Exhibit 10.6.4
LEASE AND LEASE AGREEMENT
Between
HOCROFT ASSOCIATES
The Landlord
And
SKYE MULTIMEDIA, INC.
The Tenant
For Leased Premises In
0000 Xxxxx 00, Xxxxxxxxxxx, Xxx Xxxxxx
May 5, 2005
Prepared by:
Xxxx X. Xxxxxxxx
000 Xxxxx 00
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
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TABLE OF CONTENTS
Page
1. DEFINITIONS........................................................................................................1
2. LEASE OF THE LEASED PREMISES.......................................................................................1
3. RENT...............................................................................................................1
4. TERM...............................................................................................................2
5. PREPARATION OF THE LEASED PREMISES.................................................................................2
6. OPTIONS............................................................................................................2
7. USE AND OCCUPANCY..................................................................................................3
8. UTILITIES, SERVICES, MAINTENANCE AND REPAIRS.......................................................................5
9. ALLOCATION OF THE EXPENSE OF UTILITIES, SERVICES, MAINTENANCE, REPAIRS AND TAXES...................................5
10. COMPUTATION AND PAYMENT OF ALLOCATED EXPENSES OF UTILITIES, SERVICES, MAINTENANCE, REPAIRS, TAXES AND CAPITAL
EXPENDITURES.......................................................................................................6
11. LEASEHOLD IMPROVEMENTS, FIXTURES AND TRADE FIXTURES...............................................................12
12. ALTERATIONS, IMPROVEMENTS AND OTHER MODIFICATIONS BY THE TENANT...................................................12
13. LANDLORD'S RIGHTS OF ENTRY AND ACCESS.............................................................................13
14. LIABILITIES AND INSURANCE OBLIGATIONS.............................................................................14
15. CASUALTY DAMAGE TO BUILDING OR LEASED PREMISES....................................................................16
16. CONDEMNATION......................................................................................................17
17. ASSIGNMENT OR SUBLETTING BY TENANT................................................................................17
18. SIGNS, DISPLAYS AND ADVERTISING...................................................................................20
19. QUIET ENJOYMENT...................................................................................................20
20. RELOCATION........................................................................................................20
21. SURRENDER.........................................................................................................21
22. EVENTS OF DEFAULT.................................................................................................22
23. RIGHTS AND REMEDIES...............................................................................................23
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Page
24. TERMINATION OF THE TERM...........................................................................................26
25. MORTGAGE AND UNDERLYING LEASE PRIORITY............................................................................26
26. TRANSFER BY LANDLORD..............................................................................................27
27. INDEMNIFICATION...................................................................................................28
28. PARTIES' LIABILITY................................................................................................29
29. SECURITY DEPOSIT..................................................................................................30
30. REPRESENTATIONS...................................................................................................30
31. RESERVATION IN FAVOR OF TENANT....................................................................................31
32. TENANT'S CERTIFICATES AND MORTGAGEE NOTICE REQUIREMENTS...........................................................31
33. WAIVER OF JURY TRIAL AND ARBITRATION..............................................................................33
34. SEVERABILITY......................................................................................................33
35. NOTICES...........................................................................................................33
36. CAPTIONS..........................................................................................................34
37. COUNTERPARTS......................................................................................................34
38. APPLICABLE LAW....................................................................................................34
39. EXCLUSIVE BENEFIT.................................................................................................34
40. SUCCESSORS........................................................................................................34
41. AMENDMENTS........................................................................................................34
42. WAIVER............................................................................................................34
43. COURSE OF PERFORMANCE.............................................................................................35
EXHIBIT A - LEASED PREMISES FLOOR SPACE DIAGRAM.........................................................................36
EXHIBIT B - PROPERTY DESCRIPTION........................................................................................37
EXHIBIT C - WORK LETTER.................................................................................................38
EXHIBIT D - BUILDING RULES AND REGULATIONS..............................................................................39
EXHIBIT E - DEFINITIONS AND INDEX OF DEFINITIONS........................................................................43
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LEASE AND LEASE AGREEMENT, dated as of May 5, 2005, between HOCROFT ASSOCIATES,
a New Jersey partnership, with offices at 000 Xxxxx 00, X.X. Xxx 0000,
Xxxxxxxxxxx, XX 00000 (the "Landlord"), and SKYE MULTIMEDIA, INC., a New Jersey
corporation, with an office at 0000 Xxxxx 00, Xxxxxxxxxxx, XX 00000 (the
"Tenant").
Subject to all the terms and conditions set forth below, the Landlord and the
Tenant hereby agree as follows:
1. DEFINITIONS.
Certain terms and phrases used in this Agreement (generally those whose first
letters are capitalized) are defined in Exhibit E attached hereto and, as used
in this Agreement, they shall have the respective meanings assigned or referred
to in that exhibit.
2. LEASE OF THE LEASED PREMISES.
2.1. The Landlord shall, and hereby does, lease to the Tenant, and the
Tenant shall, and hereby does, accept and lease from the Landlord, the Leased
Premises during the Term. The Leased Premises consist of 2,320 square feet of
gross rentable floor space on the third floor of 0000 Xxxxx 00, Xxxxxxxxxxx, Xxx
Xxxxxx as more fully described in the definition of Leased Premises set forth in
Exhibit E attached hereto.
2.2. The Landlord shall, and hereby does, grant to the Tenant, and the
Tenant shall, and hereby does, accept from the Landlord, the non-exclusive right
to use the Common Facilities during the Term for itself, its employees, other
agents and Guests in common with the Landlord, any tenants of Other Leased
Premises, any of their respective employees, other agents and guests and such
other persons as the Landlord may, in the Landlord's sole discretion, determine
from time to time.
3. RENT.
3.1. The Tenant shall punctually pay the Rent for the Leased Premises for
the Term to the Landlord in the amounts and at the times set forth below,
without xxxx or other demand and without any offset, deduction or, except as may
be otherwise specifically set forth in this Agreement, abatement whatsoever.
3.2. The Basic Rent for the Leased Premises during the Initial Term shall be
at the rate set forth below.
---------------------- ---------------------- ------------------------------
MONTHS ANNUAL RATE MONTHLY INSTALLMENTS
---------------------- ---------------------- ------------------------------
1 through 12 $44,080.08 $3,673.34
---------------------- ---------------------- ------------------------------
The annual rate of Basic Rent for the Leased Premises during any
Renewal Term shall be calculated as set forth in subsection 6.1.4 of this
Agreement for the respective Renewal Term.
3.3. The Tenant shall punctually pay the applicable Basic Rent in equal
monthly installments in advance on the first day of each month during the Term,
with the exception of Basic Rent for the first full calendar month of the
Initial Term. The Tenant shall pay the Basic Rent for the first full calendar
month of the Initial Term upon execution and delivery of this Agreement.
3.5. The Additional Rent for the Leased Premises during the Term shall be
promptly paid by the Tenant in the respective amounts and at the respective
times set forth in this Agreement.
3.5. That portion of any amount of Rent or other amount due under this
Agreement which is not paid on the day it is first due shall incur a late charge
equal to the sum of: (i) five percent of that portion of any
amount of Rent or other amount due under this Agreement which is not paid on the
day it is first due and (ii) interest on that portion of any amount of Rent or
other amount due under this Agreement which is not paid on the day it is first
due at the Base Rate(s) in effect from time to time plus two additional
percentage points from the day such portion is first due through the day of
receipt thereof by the Landlord. Any such late charge due from the Tenant shall
be due immediately.
4. TERM.
The Initial Term shall commence on the Commencement Date and shall continue for
one year from the beginning of the Initial Year, unless sooner terminated in
accordance with section 24 of this Agreement. The Term shall commence on the
Commencement Date and shall continue until the later of the conclusion of the
Initial Term or the conclusion of any Renewal Term, unless sooner terminated in
accordance with section 24 of this Agreement.
5. PREPARATION OF THE LEASED PREMISES.
The Landlord shall deliver actual and exclusive possession of the Leased
Premises to the Tenant in an AS-IS condition.
6. OPTIONS.
6.1 Tenant is hereby granted one option to renew this Lease (the "Option to
Renew") upon the following terms and conditions:
6.1.1 At the time of the exercise of the Option to Renew and at the
time of said renewal, the Tenant shall not be in default under
the terms and provisions of this Lease, and shall occupy and
be in operation at the entire Leased Premises pursuant to this
Lease.
6.1.2 Notice of the exercise of the Option to Renew shall be sent to
the Landlord in writing at least six (6) months before the
expiration of the Initial Term.
6.1.3 The Renewal Term shall be for a period of three years to
commence at the expiration of the Initial Term, and all of the
terms and conditions of this Agreement, other than the annual
amount of Basic Rent, shall apply during any such Renewal
Term.
6.1.4. Subject to the last sentence of this paragraph, the amount of
annual Basic Rent to be paid during the Renewal Term shall
equal the Market Rental Rate of the Leased Premises if the
same were available for lease to the public. If the parties
are unable to agree on the Market Rental Rate of the Leased
Premises, the parties shall each appoint one appraiser who
shall in turn appoint a third independent appraiser and the
determination of said three appraisers shall be binding on the
parties. In no event, however, shall the annual Basic Rent
payable by Tenant during the Renewal Term be less than the
annual Basic Rent paid by Tenant during the immediately
preceding twelve months.
6.2. In the event the Tenant assigns this Agreement or sublets, or licenses
the use or occupancy of, the Leased Premises or any portions thereof in
accordance with section 17 of this Agreement or otherwise, or attempts
to do so:
6.2.1. any Option to Renew which the Tenant has theretofore properly
exercised with respect to a Renewal Term that has not yet
actually commenced shall be rescinded, if the Landlord so
elects by notice to the Tenant, to the same extent as if it
had not been exercised at all; and
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6.2.2. any Option to Renew or any other type of option or optional
right exercisable by the Tenant not theretofore timely and
otherwise properly exercised by the Tenant shall thereupon
expire.
7. USE AND OCCUPANCY.
7.1. The Tenant shall continuously occupy and use the Leased Premises during
the Term exclusively for general office purposes.
7.2. In connection with the Tenant's use and occupancy of the Leased
Premises and use of the Common Facilities, the Tenant shall observe, and the
Tenant shall cause the Tenant's employees, other agents and Guests to observe,
each of the following:
7.2.1. the Tenant shall not do, or permit or suffer the doing of,
anything which might have the effect of creating an increased
risk of, or damage from, fire, explosion or other casualty;
7.2.2. the Tenant shall not do, or permit or suffer the doing of,
anything which would have the effect of (a) increasing any
premium for any liability, property, casualty or excess
coverage insurance policy otherwise payable by the Landlord or
any tenant of Other Leased Premises or (b) making any such
types or amounts of insurance coverage unavailable or less
available to the Landlord or any tenant of Other Leased
Premises;
7.2.3. to the extent they are not inconsistent with this Agreement,
the Tenant and the Tenant's employees, other agents and Guests
shall comply with the Building Rules and Regulations attached
hereto as Exhibit D, and with any changes made therein by the
Landlord if, with respect to any such changes, the Landlord
shall have given notice of the particular changes to the
Tenant and such changes shall not materially adversely affect
the conduct of the Tenant's business in the Leased Premises;
7.2.4. the Tenant and the Tenant's employees, other agents and Guests
shall not create, permit or continue any Nuisance in or around
the Leased Premises, the Other Leased Premises, the Building,
the Common Facilities and the Property;
7.2.5. The Tenant and the Tenant's employees, other agents and Guests
shall not permit the Leased Premises to be regularly occupied
by more than one individual per 200 square feet of usable
floor space of the Leased Premises;
7.2.6. the Tenant and the Tenant's employees, other agents and Guests
shall comply with all Federal, state and local statutes,
ordinances, rules, regulations and orders as they pertain to
the Tenant's use and occupancy of the Leased Premises, to the
conduct of the Tenant's business and to the use of the Common
Facilities, except that this subsection shall not require the
Tenant to make any structural changes that may be required
thereby that are generally applicable to the Building as a
whole;
7.2.7. the Tenant and the Tenant's employees, other agents and Guests
shall comply with the requirements of the Board of Fire
Underwriters (or successor organization) and of any insurance
carriers providing liability, property, casualty or excess
insurance coverage regarding the Property, the Building, the
Common Facilities or any portions thereof, and any other
improvements on the Property, except that this subsection
shall not require the Tenant to make any structural changes
that may be required thereby that are generally applicable to
the Building as a whole;
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7.2.8. the Tenant and the Tenant's employees, other agents and Guests
shall not bring or discharge any material or substance (solid,
liquid or gaseous) which is a Hazardous Substance, or conduct
any activity, in or on the Property, the Building, the Common
Facilities or the Leased Premises that shall have been
identified:
(i) by the scientific community, or
(ii) by any Federal, state or local statute (including,
without limiting the generality of the foregoing, the
Spill Compensation and Control Act (58 N.J.S.A.
10-23.11 et seq.); the Industrial Site Recovery Act
("ISRA")(13 N.J.S.A. 1 K-6 et seq.); the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. 6901
et seq.) as amended; the Comprehensive Environmental
Response Compensation and Liability Act of 1980 (42
U.S.C. 9601 et seq.); the Federal Water Pollution
Control Act/Clean Water Act (33 U.S.C. 1251 et seq.);
the Clean Water Act (33 U.S.C. 1251 et seq.); the
Clean Air Act (42 U.S.C. 7401 et seq.); the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.); the
Hazardous Materials Transportation Act (49 U.S.C.
5101 et seq.) and the Safe Drinking Water Act (42
U.S.C. 300f through 300j) as amended, and the
regulations adopted and publications promulgated
pursuant to said laws; and in any revisions or
successor codes as toxic or hazardous to health or to
the environment ("Environmental Laws") As used
herein, "Hazardous Substance" means any material or
substance which is toxic, ignitable, reactive, or
corrosive; or which is defined as "hazardous waste",
"extremely hazardous waste" or a "hazardous
substance" by Environmental Laws; or which is an
asbestos, polychlorinated biphenyl or a petroleum
product; or which is regulated by Environmental Laws;
7.2.9. the Tenant and the Tenant's employees, other agents and Guests
shall not draw electricity in the Leased Premises in excess of
the rated capacity of the electrical conductors and safety
devices including, without limiting the generality of the
foregoing, circuit breakers and fuses, by which electricity is
distributed to and throughout the Leased Premises and, without
the prior written consent of the Landlord in each instance,
shall not connect any fixtures, appliances or equipment to the
electrical distribution system serving the Building and the
Leased Premises other than typical professional office
equipment such as minicomputers, microcomputers, typewriters,
copiers, telephone systems, coffee machines and table top
microwave ovens, none of which, considered individually and in
the aggregate, overall and per fused or circuit breaker
protected circuit, shall exceed the above limits;
7.2.10. on a timely basis the Tenant shall pay directly and promptly
to the respective taxing authorities any taxes (other than
Taxes) charged, assessed or levied exclusively on the Leased
Premises or arising exclusively from the Tenant's use and
occupancy of the Leased Premises; and
7.2.11. the Tenant shall not initiate any appeal or contest of any
assessment or collection of Taxes for any period without, in
each instance, the prior written consent of the Landlord
which, without being deemed unreasonable, the Landlord may
withhold if the Building was not 90% occupied by paying
tenants throughout that period or if the Tenant is not joined
by tenants of Other Leased Premises that leased throughout
that period, and that are then leasing, at least 80% of all
Other Leased Premises, determined by their gross rentable
floor space.
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8. UTILITIES, SERVICES, MAINTENANCE AND REPAIRS.
8.1. The Landlord shall provide or arrange for the provision of:
8.1.1. such maintenance and repair of the Building (except the Leased
Premises and Other Leased Premises); the Common Facilities;
and the heating, ventilation and air conditioning systems (but
not including supplemental cooling, whether supplemental
cooling units are found in the Leased Premises or not), any
plumbing systems and the electrical systems in the Building,
the Common Facilities, the Leased Premises and Other Leased
Premises as is customarily provided for first class office
buildings in the immediate area;
8.1.2. maintenance and repair of the Leased Premises, except for
refinishing walls and wall treatments, base, ceilings, floor
treatments and doors in general from time to time or for
gouges, spots, marks, damage or defacement caused by anyone
other than the Landlord, its employees and other agents, and
except for the Tenant's furniture, furnishings, equipment and
other property;
8.1.3. such garbage removal from the Building and the Common
Facilities and such janitorial services for the Building, the
Leased Premises and Other Leased Premises as is customarily
provided for first class office buildings in the immediate
area;
8.1.4. the electricity required for the operation of the Building,
the Property and the Common Facilities during Regular Business
Hours and, on a reduced service basis, during other than
Regular Business Hours, and, at all times, the electricity
required for the Leased Premises;
8.1.5. such heat, ventilation and air conditioning (but not including
supplemental cooling, whether supplemental cooling units are
found in the Leased Premises or not) for the Building, the
Leased Premises and Other Leased Premises as is customarily
provided for first class office buildings in the immediate
area for the comfortable use of the Building during Regular
Business Hours. (Customary cooling shall be determined without
reference to the existence of such supplemental cooling
units.);
8.1.6. water (including heated water) to the Building and, if the
appropriate plumbing has been installed therein, to the Leased
Premises;
8.1.7. sewage disposal for the Building;
8.1.8. passenger elevator service for the Building;
8.1.9. snow clearance from, and sweeping of, Parking Facilities and
private access roads which are part of the Property or the
Common Facilities; and
8.1.10. the maintenance of landscaping which is part of the Property
or the Common Facilities.
8.2. Except as specifically set forth in subsection 8.1 of this Agreement,
the Tenant shall maintain and repair the Leased Premises and keep the Leased
Premises in as good condition and repair, reasonable wear and use excepted, as
the Leased Premises are upon the completion of any improvements contemplated by
section 5 of this Agreement.
9. ALLOCATION OF THE EXPENSE OF UTILITIES, SERVICES, MAINTENANCE, REPAIRS
AND TAXES.
9.1. All Tenant Electric Charges shall be borne by the Tenant. It is agreed
that the Tenant Electric
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Charges are $1.50 per square foot per year, subject to the provisions of
subsection 10.10 of this Agreement.
9.2. Between the Commencement Date and the end of the No Pass Through
Period, the Tenant's Share of all Operational Expenses and Taxes incurred during
such period shall be borne by the Landlord.
9.3. Between the day after the end of the No Pass Through Period and the end
of the Term, the Tenant's Share of Operational Expenses and Taxes incurred
during each annual or shorter period ending on (a) December 31 of each year and
(b) the end of the Term shall be borne as follows:
9.3.1. the Tenant's Share of: Operational Expenses and Taxes incurred
during each such period of 12 months (or shorter period), up
to the amounts of Base Year Operational Expenses and Base Year
Taxes, respectively (or proportional amount thereof for
periods shorter than 12 months), shall be borne by the
Landlord; and
9.3.2. the Tenant's Share of: the amounts by which Operational
Expenses and Taxes incurred during each such period of 12
months (or shorter period) exceed Base Year Operational
Expenses and Base Year Taxes, respectively (or proportional
amount thereof for periods shorter than 12 months) shall be
allocated to, and borne by, the Tenant as more specifically
set forth in section 10 of this Agreement.
10. COMPUTATION AND PAYMENT OF ALLOCATED EXPENSES OF UTILITIES, SERVICES,
MAINTENANCE, REPAIRS, TAXES AND CAPITAL EXPENDITURES.
10.1. The Tenant shall promptly pay the following additional amounts to the
Landlord at the respective times set forth below:
10.1.1. commencing with the first day after the end of the No Pass
Through Period, and on the first day of each month thereafter
during the Term, one-twelfth of the Tenant's Share of the
amount by which Taxes for the then current calendar year
exceeds Base Year Taxes, computed in accordance with
subsection 10.5 of this Agreement. When Landlord knows of
facts which cause a revision of the estimate, it may serve a
revised estimate and, for the balance of the current calendar
year, the estimated payments shall be made accordingly;
10.1.2. within 20 days of the Landlord's giving notice to the Tenant
after the close of each calendar year closing during the Term,
commencing with the first calendar year closing after the
close of the No Pass Through Period, and after the end of the
Term, the Tenant's Share of the difference between the
Landlord's previously projected amount of Taxes for such
period and the actual amount of Taxes for such period, in
either case in excess of Base Year Taxes, computed in
accordance with subsection 10.6 of this Agreement (unless such
difference is a negative amount, in which case the Landlord
shall credit such difference against any amounts next due from
the Tenant under subsections 10.1.1 and 10.5 of this
Agreement);
10.1.3. commencing with the first day after the end of the No Pass
Through Period, and on the first day of each month thereafter
during the Term, one-twelfth of the Tenant's Share of the
amount by which Operational Expenses for the then current
calendar year exceed Base Year Operational Expenses, computed
in accordance with subsection 10.7 of this Agreement. When
Landlord knows of facts which cause a revision of the
estimate, it may serve a revised estimate and, for the balance
of the current calendar year, the estimated payments shall be
made accordingly;
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10.1.4. within 20 days of the Landlord's giving notice to the Tenant
after the close of each calendar year closing during the Term,
commencing with the first calendar year closing after the
close of the No Pass Through Period, and after the end of the
Term, the Tenant's Share of the difference between the
Landlord's previously projected amount of Operational Expenses
for such period and the actual amount of Operational Expenses
for such period, in either case in excess of Base Year
Operational Expenses, computed in accordance with subsection
10.8 of this Agreement (unless such difference is a negative
amount, in which case the Landlord shall credit such
difference against any amounts next due from the Tenant under
subsections 10.1.3 and 10.7 of this Agreement);
10.1.5. commencing with the first day of the first month after the
Landlord gives any notice contemplated by subsection 10.9 of
this Agreement to the Tenant and continuing on the first day
of each month thereafter until the earlier of (a) the end of
the Term or (b) the last month of the useful life set forth in
the respective notice, one-twelfth of the Tenant's Share of
any Annual Amortized Capital Expenditure, computed in
accordance with subsection 10.9 of this Agreement;
10.1.6. on the first day of each month during the Term, the monthly
Tenant Electric Charges, set forth in section 9.1 of this
Agreement as the same may be revised in accordance with
subsection 10.10 of this Agreement; and
10.1.7. promptly as and when billed therefor by the Landlord, the
amount of any expense which would otherwise fall within the
definition of Operational Expenses, but which is specifically
paid or incurred by the Landlord for operation and maintenance
of the Building, the Common Facilities or the Property outside
Regular Business Hours at the specific request of the Tenant
or the amount of any expenditure incurred for maintenance or
repair of damage to the Building, the Common Facilities, the
Property, the Leased Premises or the Other Leased Premises
caused directly or indirectly, in whole or in part, by the
active or passive negligence or intentional act of the Tenant
or any of its employees, other agents or Guests.
10.2. "Operational Expenses" means all expenses paid or incurred by the
Landlord in connection with the Property, the Building, the Common Facilities
and any other improvements on the Property and their operation and maintenance
(other than Taxes (which are separately allocated to the Tenant in accordance
with subsections 10.1.1 and 10.1.2 of this Agreement), Capital Expenditures
(which are separately allocated to the Tenant in accordance with subsection
10.1.5 of this Agreement) and those expenses contemplated by subsections 10.1.6
and 10.1.7 of this Agreement)) including, without limiting the generality of the
foregoing:
10.2.1. Utilities Expenses;
10.2.2. the expense of providing the services, maintenance and repairs
contemplated by subsection 8.1 of this Agreement, whether
furnished by the Landlord's employees or by independent
contractors or other agents;
10.2.3. wages, salaries, fees and other compensation and payments and
payroll taxes and contributions to any social security,
unemployment insurance, welfare, pension or similar fund and
payments for other fringe benefits required by law or union
agreement (or, if the employees or any of them are not
represented by a union, then payments for benefits comparable
to those generally required by union agreement in first class
office buildings in the immediate area which are unionized)
made to or on behalf of any
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employees of Landlord performing services rendered in
connection with the operation and maintenance of the Building,
the Common Facilities and the Property, including, without
limiting the generality of the foregoing, elevator operators,
elevator starters, window cleaners, porters, janitors, maids,
miscellaneous handymen, watchmen, persons engaged in
patrolling and protecting the Building, the Common Facilities
and the Property, carpenters, engineers, firemen, mechanics,
electricians, plumbers, other tradesmen, other persons engaged
in the operation and maintenance of the Building, Common
Facilities and Property, Building superintendent and
assistants, Building manager, and clerical and administrative
personnel;
10.2.4. the uniforms of all employees and the cleaning, pressing and
repair thereof;
10.2.5. premiums and other charges incurred by Landlord with respect
to all insurance relating to the Building, the Common
Facilities and the Property and the operation and maintenance
thereof, including, without limitation: property and casualty,
fire and extended coverage insurance, including windstorm,
flood, hail, explosion, other casualty, riot, rioting
attending a strike, civil commotion, aircraft, vehicle and
smoke insurance; public liability insurance; elevator, boiler
and machinery insurance; excess liability coverage insurance;
use and occupancy insurance; workers' compensation and health,
accident, disability and group life insurance for all
employees; casualty rent insurance and such other insurance
with such limits as may, from time to time, be customary for
office buildings or which Landlord may be required to secure
by mortgage lenders;
10.2.6. sales and excise taxes and the like upon any Operational
Expenses and Capital Expenditures;
10.2.7. management fees of any independent managing agent for the
Property, the Building or the Common Facilities; and if there
shall be no independent managing agent, or if the managing
agent shall be a person affiliated with the Landlord, the
management fees that would customarily be charged for the
management of the Property, the Building and the Common
Facilities by an independent, first class managing agent in
the immediate area;
10.2.8. the cost of replacements for tools, supplies and equipment
used in the operation, service, maintenance, improvement,
inspection, repair and alteration of the Building, the Common
Facilities and the Property;
10.2.9. the cost of repainting or otherwise redecorating any part of
the Building or the Common Facilities;
10.2.10. decorations for the lobbies and other Common Facilities in the
Building;
10.2.11. the cost of licenses, permits and similar fees and charges
related to operation, repair and maintenance of the Building,
the Property and the Common Facilities; and
10.2.12. any and all other expenditures of the Landlord in connection
with the operation, alteration, repair or maintenance of the
Property, the Common Facilities or the Building as a
first-class office building and facilities in the immediate
area which are properly treated as an expense fully deductible
as incurred in accordance with generally applied real estate
accounting practice. In determining Base Year Operational
Expenses, Landlord may adjust any line item which, when
compared to the same line item for the year prior to the Base
Year, has increased at a rate which is more than double the
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increase in the Index at the end of the year prior to the Base
Year compared to the Index at the end of the Base Year. In
such event, the actual expense incurred for the line item in
the Base Year shall be adjusted to equal the amount incurred
for the same line item for the year prior to the Base Year
multiplied by the sum of one plus the percentage increase in
the Index for the one year period.
10.3. "Capital Expenditures" means the following expenditures incurred or
paid by the Landlord in connection with the Property, the Building, the Common
Facilities and any other improvements on the Property:
10.3.1. all costs and expenses incurred by the Landlord in connection
with retro-fitting the entire Building or the Common
Facilities, or any portion thereof, to comply with any change
in Federal, state or local statute, rule, regulation, order or
requirement which change takes effect after the original
completion of the Building;
10.3.2. all costs and expenses incurred by the Landlord to replace and
improve the Property, the Building or the Common Facilities or
portions thereof for the purpose of continued operation of the
Property, the Building and the Common Facilities as a first
class office complex in the immediate area; and
10.3.3. all costs and expenses incurred by the Landlord in connection
with the installation of any energy, labor or other cost
saving device or system on the Property or in the Building or
the Common Facilities.
10.4. Neither "Operational Expenses" nor "Capital Expenditures" shall include
any of the following:
10.4.1. principal or interest on any mortgage indebtedness on the
Property, the Building or any portion thereof;
10.4.2. any capital expenditure, or amortized portion thereof, other
than those included in the definition of Capital Expenditures
set forth in subsection 10.3 above;
10.4.3. expenditures for any leasehold improvement which is made in
connection with the preparation of any portion of the Building
for occupancy by a new tenant or which is not made generally
to or for the benefit of the Leased Premises and all Other
Leased Premises or generally to the Building or the Common
Facilities;
10.4.4. to the extent the Landlord actually receives proceeds of
property and casualty insurance policies on the Building,
other improvements on the Property or the Common Facilities,
expenditures for repairs or replacements occasioned by fire or
other casualty to the Building or the Common Facilities;
10.4.5. expenditures for repairs, replacements or rebuilding
occasioned by any of the events contemplated by section 16 of
this Agreement;
10.4.6. expenditures for costs, including advertising and leasing
commissions, incurred in connection with efforts to lease
portions of the Building and to procure new tenants for the
Building;
10.4.7. expenditures for the salaries and benefits of the executive
officers, if any, of the Landlord; and
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10.4.8. depreciation (as that term is used in the accounting sense in
the context of generally applied real estate accounting
practice) of the Building, the Common Facilities and any other
improvement on the Property.
10.5. As soon as practicable after the close of the No Pass Through Period
and December 31 of each year thereafter, any portion of which is during the
Term, the Landlord shall furnish the Tenant with a notice setting forth:
10.5.1. Taxes billed, or if a xxxx has not then been received for the
entire period, the Landlord's projection of Taxes to be
billed, for the then current calendar year;
10.5.2. the amount of Base Year Taxes;
10.5.3. the amount, if any, by which item 10.5.1 above exceeds item
10.5.2 above; and
10.5.4. the Tenant's Share of item 10.5.3 above.
10.6. As soon as practicable after December 31 of each year during the Term
and after the end of the Term, the Landlord shall furnish the Tenant with a
notice setting forth:
10.6.1. the actual amount of Taxes for the preceding calendar year in
excess of Base Year Taxes (or proportional amount thereof for
shorter periods during the Term);
10.6.2. the Landlord's previously projected amount of Taxes for the
preceding calendar year in excess of Base Year Taxes (or
proportional amount thereof for shorter periods during the
Term);
10.6.3. the difference obtained by subtracting item 10.6.2 above from
item 10.6.1 above; and
10.6.4. the Tenant's Share of item 10.6.3 above.
10.7. As soon as practicable after the close of the No Pass Through Period
and December 31 of each year thereafter, any portion of which is during the
Term, the Landlord shall furnish the Tenant with a notice setting forth:
10.7.1. the Landlord's projection of annual Operational Expenses for
the current period (if any portion thereof is during the
Term);
10.7.2. the amount of the Base Year Operational Expenses;
10.7.3. the amount, if any, by which item 10.7.1 above exceeds item
10.7.2 above; and
10.7.4. the Tenant's Share of item 10.7.3 above.
10.8. As soon as practicable after December 31 of each year during the Term
and after the end of the Term, the Landlord shall furnish the Tenant with a
notice setting forth:
10.8.1. the actual amount of Operational Expenses for the preceding
calendar year in excess of Base Year Operational Expenses (or
proportional amount thereof for shorter periods during the
Term);
10.8.2. the Landlord's previously projected amount of Operational
Expenses for the preceding calendar year in excess of Base
Year Operational Expenses (or proportional amount
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thereof for shorter periods during the Term);
10.8.3. the difference obtained by subtracting item 10.8.2 above from
item 10.8.1 above; and
10.8.4. the Tenant's Share of item 10.8.3 above.
10.9. As soon as practicable after incurring any Capital
Expenditure, the Landlord shall furnish the Tenant with a notice setting forth:
10.9.1. a description of the Capital Expenditure and the subject
thereof;
10.9.2. the date the subject of the respective Capital Expenditure was
first placed into service and the period of useful life
selected by the Landlord in connection with the determination
of the Annual Amortized Capital Expenditure;
10.9.3. the amount of the Annual Amortized Capital Expenditure; and
10.9.4. the Tenant's Share of item 10.9.3 above.
10.10. From time to time after the Commencement Date, the Landlord may furnish
the Tenant with a notice setting forth its estimate of Tenant Electric Charges
per month. Unless the Tenant desires to question the Landlord's then most recent
estimate of Tenant Electric Charges exclusively in the manner set forth below,
the Landlord's then most recent estimate shall be binding and shall continue in
effect until any question raised by the Tenant is otherwise resolved in
accordance with this subsection 10.10 of the Agreement. If the Tenant desires to
question the Landlord's estimate of Tenant Electric Charges, the Tenant shall
give notice to the Landlord of its desire. Upon receipt of the Tenant's notice,
the Landlord shall obtain, at the Tenant's expense, a reputable, independent
electrical engineer's formal written estimate and computation of the Tenant
Electric Charges. The engineer's estimate and computation of Tenant Electric
Charges shall thereupon control for a 12 month period commencing with the date
as of which it is given effect as to Tenant Electric Charges, and until the
Landlord furnishes the Tenant with a subsequent notice setting forth its
estimate of Tenant Electric Charges per month, except to the extent that the
Landlord may increase them in proportion to increases in Utilities Expenses
during the same period.
10.11. Within 30 days after the Landlord gives any notice enumerated in
subsections 10.5 through 10.10 of this Agreement, the Tenant or the Tenant's
authorized agent, upon one week's prior notice to the Landlord, may inspect the
Landlord's books and records, as they pertain to the particular expense in
question, at the Landlord's office regarding the subject of any such notice to
verify the amount(s) and calculation(s) thereof. After payment of the Tenant's
Share in accordance with the provisions of section 10 of this Agreement, no
further audit shall be conducted with respect to Operational Expenses, Taxes,
Capital Expenditures, Base Year Operational Expenses or Base Year Taxes except
with respect to items which may have been questioned within the 30 day period.
Tenant agrees that no audit will be conducted by an auditor engaged, in whole or
in part, on a contingent fee basis. If an audit is conducted, the Landlord shall
have the right to verify that the provisions of this prohibition have been
satisfied.
10.12. The mere enumeration of an item within the definitions of Operational
Expenses and Capital Expenditures in subsections 10.2 and 10.3 of this
Agreement, respectively, shall not be deemed to create an obligation on the part
of the Landlord to provide such item unless the Landlord is affirmatively
required to provide such item elsewhere in this Agreement. Landlord, at Tenant's
expense, shall maintain any supplementary facilities which are agreed to be
installed by Landlord for Tenant including, without limitation, supplementary
heating, cooling or ventilation; electronic locking devices; and kitchen
facilities such as faucets, drains, pumps and insta-hot lines.
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11. LEASEHOLD IMPROVEMENTS, FIXTURES AND TRADE FIXTURES.
All leasehold improvements to the Leased Premises, fixtures installed in the
Leased Premises and the blinds and floor treatments or coverings shall be the
property of the Landlord, regardless of when, by which party or at which party's
cost the item is installed. Movable furniture, furnishings, trade fixtures and
equipment of the Tenant which are in the Leased Premises shall be the property
of the Tenant, except as may otherwise be set forth in section 23 of this
Agreement.
12. ALTERATIONS, IMPROVEMENTS AND OTHER MODIFICATIONS BY THE TENANT.
12.1. The Tenant shall not make any alterations, improvements or other
modifications to the Leased Premises which effect structural changes in the
Building or any portion thereof, change the functional utility or rental value
of the Leased Premises or, except as may be contemplated by section 5 of this
Agreement prior to the Commencement Date, affect the mechanical, electrical,
plumbing or other systems installed in the Building or the Leased Premises.
12.2. The Tenant shall not make any other alterations, improvements or
modifications to the Leased Premises, the Building or the Property or make any
boring in the ceiling, walls or floor of the Leased Premises or the Building
unless the Tenant shall have first:
12.2.1. furnished to the Landlord detailed, New Jersey
architect-certified construction drawings, construction
specifications and, if they pertain in any way to the heating,
ventilation and air conditioning or other systems of the
Building, related engineering design work and specifications
regarding, the proposed alterations, improvements or other
modifications;
12.2.2. not received a notice from the Landlord objecting thereto in
any respect within 30 days of the furnishing thereof (which
shall not be deemed the Landlord's affirmative consent for any
purpose);
12.2.3. obtained any necessary or appropriate building permits or
other approvals from the Municipality and, if such permits or
other approvals are conditional, satisfied all conditions to
the satisfaction of the Municipality; and
12.2.4. met, and continued to meet, all the following conditions with
regard to any contractors selected by the Tenant and any
subcontractors, including materialmen, in turn selected by any
of them:
12.2.4.1. the Tenant shall have sole responsibility for
payment of, and shall pay, such contractors;
12.2.4.2. the Tenant shall have sole responsibility for
coordinating, and shall coordinate, the work to be
supplied or performed by such contractors, both
among themselves and with any contractors selected
by the Landlord;
12.2.4.3. the Tenant shall not permit or suffer the filing of
any notice of construction lien claim or other lien
or prospective lien by any such contractor or
subcontractor with respect to the Property, the
Common Facilities, the Building or any other
improvements on the Property; and if any of the
foregoing should be filed by any such contractor or
subcontractor, the Tenant shall forthwith obtain
and file the complete discharge and release thereof
or provide such payment bond(s) from a reputable,
financially sound institutional surety as will, in
the opinions of the Landlord, the holders of any
mortgage indebtedness on, or other interest in, the
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Property, the Building, the Common Facilities or
any other improvements on the Property, or any
portions thereof, and their respective title
insurers, be adequate to assure the complete
discharge and release thereof;
12.2.4.4. prior to any such contractor's entering upon the
Property, the Building or the Leased Premises or
commencing work the Tenant shall have delivered to
the Landlord (a) all the Tenant's certificates of
insurance set forth in section 14 of this
Agreement, conforming in all respects to the
requirements of section 14 of this Agreement,
except that the effective dates of all such
insurance policies shall be prior to any such
contractor's entering upon the Property, the
Building or the Leased Premises or commencing work
(if any work is scheduled to begin before the
Commencement Date) and (b) similar certificates of
insurance from each of the Tenant's contractors
providing for coverage in equivalent amounts,
together with their respective certificates of
workers' compensation insurance, employer's
liability insurance and products-completed
operations insurance, the latter providing coverage
in at least the amount required for the Tenant's
comprehensive general public liability and excess
insurance;
12.2.4.5. each such contractor shall be a party to collective
bargaining agreements with those unions that are
certified as the collective bargaining agents of
all bargaining units of such contractor, of which
all such contractor's workpersons shall be members
in good standing;
12.2.4.6. each such contractor shall perform its work in a
good and workpersonlike manner and shall not
interfere with or hinder the Landlord or any other
contractor in any manner;
12.2.4.7. there shall be no labor dispute of any nature
whatsoever involving any such contractor or any
workpersons of such contractor or the unions of
which they are members with anyone; and if such a
labor dispute exists or comes into existence the
Tenant shall forthwith, at the Tenant's sole cost
and expense, remove all such contractors and their
workpersons from the Building, the Common
Facilities and the Property; and
12.2.4.8. the Tenant shall have the sole responsibility for
the security of the Leased Premises and all
contractors' materials, equipment and work,
regardless of whether their work is in progress or
completed.
12.3. After the Commencement Date, the Tenant shall not apply any wall
covering (except latex based flat paint) or other treatment to the walls of the
Leased Premises without the prior written consent of the Landlord.
13. LANDLORD'S RIGHTS OF ENTRY AND ACCESS.
The Landlord and its authorized agents shall have the following rights of entry
and access to the Leased Premises:
13.1. In case of any emergency or threatened emergency, at any time for any
purpose which the Landlord reasonably believes under such circumstances will
serve to prevent, eliminate or reduce the emergency, or the threat thereof, or
damage or threatened damage to persons and property.
13.2. Upon at least one day's prior verbal advice to the Tenant, at any time
for the purpose of erecting
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or constructing improvements, modifications, alterations and other changes to
the Building or any portion thereof, including, without limiting the generality
of the foregoing, the Leased Premises, the Common Facilities or the Property or
for the purpose of repairing, maintaining or cleaning them, whether for the
benefit of the Landlord, the Building, all tenants of Other Leased Premises in
the Building, or one or more tenants of Other Leased Premises, or others. In
connection with any such improvements, modifications, alterations, other
changes, repairs, maintenance or cleaning, the Landlord may close off such
portions of the Property, the Building and the Common Facilities and interrupt
such services as may be necessary to accomplish such work, without liability to
the Tenant therefore and without such closing or interruption being deemed an
eviction or constructive eviction or requiring an abatement of Rent. However, in
accomplishing any such work, the Landlord shall endeavor not to materially
interfere with the Tenant's use and enjoyment of the Leased Premises or the
conduct of the Tenant's business and to minimize interference, inconvenience and
annoyance to the Tenant.
13.3. At all reasonable hours for the purpose of operating, inspecting or
examining the Building, including the Leased Premises, or the Property.
13.4. At any time after the Tenant has vacated the Leased Premises, for the
purpose of preparing the Leased Premises for another tenant or prospective
tenant.
13.5. If practicable by appointment with the Tenant, at all reasonable hours
for the purpose of showing the Building to prospective purchasers, mortgagees
and prospective mortgagees and prospective ground lessees and lessors.
13.6. If practicable by appointment with the Tenant, at all reasonable hours
during the last nine months of the Term for the purpose of showing the Leased
Premises to prospective tenants thereof.
13.7. The mere enumeration of any right of the Landlord within this section
13 of the Agreement shall not be deemed to create an obligation on the part of
the Landlord to exercise any such right unless the Landlord is affirmatively
required to exercise such right elsewhere in this Agreement.
14. LIABILITIES AND INSURANCE OBLIGATIONS.
14.1. The Tenant shall, at the Tenant's own expense, purchase before the
Commencement Date, and maintain in full force and effect throughout the Term and
any other period during which the Tenant may have possession of the Leased
Premises, the following types of insurance coverage from financially sound and
reputable insurers, licensed by the State of New Jersey to provide such
insurance and acceptable to the Landlord, in the minimum amounts set forth
below, each of which insurance policies shall be for the benefit of, and shall
name the Landlord, the Landlord's managing agent and mortgagees and ground
lessors known to the Tenant, if any, of the Building, the Common Facilities, the
Property or any interest therein, their successors and assigns as additional
persons insured, and none of which insurance policies shall contain a
"co-insurance" clause:
14.1.1. commercial general liability insurance (including "broad form
and contractual liability" coverage) and excess ("umbrella")
insurance which, without limiting the generality of the
foregoing, considered together shall insure against such risks
as bodily injury, death and property damage, with a combined
single limit of not less than $3,000,000.00 for each
occurrence; and
14.1.2. "all-risks" property insurance covering the Leased Premises in
an amount sufficient, as determined by the Landlord from time
to time, to cover the replacement costs for all Tenant's
alterations, improvements, fixtures and personal property
located in or on the Leased Premises.
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14.2. With respect to risks:
14.2.1. as to which this Agreement requires either party to maintain
insurance, or
14.2.2. as to which either party is effectively insured and for which
risks the other party may be liable,
14.2.3. the party required to maintain such insurance and the party
effectively insured shall use its best efforts to obtain a
clause, if available from the respective insurer, in each such
insurance policy expressly waiving any right of recovery, by
reason of subrogation to such party's rights or otherwise, the
respective insurer might otherwise have or obtain against the
other party, so long as such a clause can be obtained in the
respective insurance policy without additional premium cost.
If such a clause can be obtained in the respective insurance
policy, but only at additional premium cost, such party shall,
by notice to the other party, promptly advise the other party
of such fact and the amount of the additional premium cost. If
the other party desires the inclusion of such a clause in the
notifying party's respective insurance policy, the other party
shall, within 10 days of receipt of the notifying party's
notice, by notice advise the notifying party of its desire and
enclose therewith its check in the full amount of the
additional premium cost; otherwise the notifying party need
not obtain such a clause in the respective insurance.
14.3. Each party hereby waives any right of recovery against the other party
for any and all damages for property losses and property damages which are
actually insured by either party, but only to the extent:
14.3.1. that the waiver set forth in this subsection 14.3 does not
cause or result in any cancellation of, or diminution in, the
insurance coverage otherwise available under any applicable
insurance policy;
14.3.2. of the proceeds of any applicable insurance policy (without
adjustment for any deductible amount set forth therein)
actually received by such party for such respective loss or
damages; and
14.3.3. the substance of the clause contemplated by subsection 14.2 of
this Agreement is actually and effectively set forth in the
respective insurance policy.
The waiver set forth in this subsection 14.3 of the Agreement shall not apply
with respect to liability insurance policies (as opposed to property and
casualty insurance policies).
14.4. The Tenant hereby waives any right of recovery it might otherwise have
against the Landlord for losses and damages caused actively or passively, in
whole or in part, by any of the risks the Tenant is required to insure against
in accordance with subsections 14.1.1 or 14.1.2 of this Agreement, unless such
waiver would cause or result in a cancellation of, or diminution in, the
coverage of the Tenant's policies of insurance against such risks.
14.5. The Landlord shall have no liability whatsoever to the Tenant or the
Tenant's employees, other agents or Guests or anyone else for any death, bodily
injury, property loss or other damages suffered by any of them or any of their
property which is not caused directly, exclusively and entirely by the active
gross negligence or intentional misconduct of the Landlord without the
intervention or contribution of any other cause or contributing factor
whatsoever.
14.6. Each policy of insurance required under subsection 14.1 of this
Agreement shall include provisions to the effect that:
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14.6.1. no act or omission of the Tenant, its employees, other agents
or Guests shall result in a loss of insurance coverage
otherwise available under such policy to any person required
to be named as an additional insured in accordance with
subsection 14.1 of this Agreement; and
14.6.2. the insurance coverage afforded by such policy shall not be
diminished, cancelled, permitted to expire or otherwise
terminated for any reason except upon 30 days' prior written
notice from the insurer to every person required to be named
as an additional insured in accordance with subsection 14.1 of
this Agreement.
14.7. With respect to each type of insurance coverage referred to in
subsection 14.1 of this Agreement, prior to the Commencement Date the Tenant
shall cause its insurer(s) to deliver to the Landlord the certificate(s) of the
insurer(s) setting forth the name and address of the insurer, the name and
address of each additional insured, the type of coverage provided, the limits of
the coverage, any deductible amounts, the effective dates of coverage and that
each policy under which coverage is provided affirmatively includes provisions
to the effect set forth in subsection 14.6 of this Agreement. In the event any
of such certificates indicates a coverage termination date earlier than the end
of the Term or the end of any other period during which the Tenant may have
possession of the Leased Premises, no later than 10 days before any such
coverage termination date, the Tenant shall deliver to the Landlord respective,
equivalent, new certificate(s) of the insurer(s).
15. CASUALTY DAMAGE TO BUILDING OR LEASED PREMISES.
15.1. In the event of any damage to the Building or any portion thereof by
fire or other casualty, with the result that the Leased Premises are rendered
unusable, in whole or in part, then, unless the Building is destroyed or so
damaged that the Landlord does not intend to rebuild the same, the Landlord
shall, within 30 business days of the casualty, determine the period of time
required to restore the Building and the Leased Premises (but not including the
improvements constructed or installed prior to the Term or during the Term in
excess of the original allowance for the same).
15.1.1. If, in Landlord's opinion, the restoration described above
will take more than 180 days then Landlord may elect to cancel
this Agreement effective as of the date of casualty. Notice of
the Landlord's election shall be served upon the Tenant within
the 30 business day period described above.
15.1.2. If, in Landlord's opinion, the restoration described above
will take 180 days or less, then Landlord shall not cancel
this Agreement and must restore the Building and the Leased
Premises as aforesaid. In either of such events, the Landlord
shall cause restoration to proceed diligently and expediently
to the extent the Landlord has received proceeds of any
property, casualty or liability insurance on the damaged
portions (or would have received such proceeds had it obtained
such coverage).
15.2. Rent shall xxxxx from the date of the casualty until:
15.2.1. such time as the Leased Premises are again fully usable and be
reduced during such period by the amount which bears the same
proportion to the Rent otherwise payable during such period as
the gross rentable floor space of the Leased Premises which
are rendered unusable bears to the gross rentable floor space
of the Leased Premises. The restoration of the improvements
constructed or installed prior to the Term or during the Term
in excess of the original allowance for the same shall be the
Tenant's responsibility. Tenant shall make reasonable, good
faith efforts to integrate the restoration which is its
responsibility with the work which is being performed by
Landlord. To the extent that is not feasible,
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Tenant shall be allowed an additional, reasonable interval to
complete its work, not to exceed sixty days and Rent shall
xxxxx during the interval required for such restoration. The
Landlord shall cooperate with Tenant to integrate the
restoration of such improvements during the reconstruction
period; or
15.2.2. this Agreement is canceled pursuant to the provisions of
subsections 15.1.
15.3. If, in the Landlord's opinion, the restoration described above will
take more than 180 days and the Landlord makes the election to cancel set forth
in subsection 15.1 above then Landlord, in such event, may proceed with
restoration (or non-restoration) in any manner it chooses, without any liability
to Tenant.
15.4. The Tenant shall promptly advise the Landlord by the quickest means of
communication of the occurrence of any casualty damage to the Building or the
Leased Premises of which the Tenant becomes aware.
16. CONDEMNATION.
If the Leased Premises, or any portion thereof, or the Building or the Common
Facilities, or any substantial portion of any of the foregoing, shall be
acquired for any public or quasi-public use or purpose by statute, right of
eminent domain or private sale in lieu thereof, with the result the Tenant can
not use and occupy the Leased Premises for the purpose set forth in subsection
7.1 of this Agreement, this Agreement shall terminate and the Tenant hereby
waives any claim against the Landlord, the condemning authority or other person
acquiring same for any thing of value, tangible or intangible, including,
without limiting the generality of the foregoing, the putative value of any
leasehold interest or loss of the use of same, except for any right the Tenant
might have to make a claim, independent of, and without reference to or having
any effect on, any award or claim of the Landlord, against the condemning
authority or other acquiring party regarding the value of the Tenant's installed
trade fixtures and other installed equipment which are not removable from the
Leased Premises or for ordinary and necessary moving expenses occasioned
thereby.
17. ASSIGNMENT OR SUBLETTING BY TENANT.
17.1. Except as may be specifically set forth in this section 17 of the
Agreement, the Tenant shall not:
17.1.1. assign, or purport to assign, this Agreement or any of the
Tenant's rights hereunder;
17.1.2. sublet, or purport to sublet, the Leased Premises or any
portion thereof;
17.1.3. license, or purport to license, the use or occupancy of the
Leased Premises or any portion thereof;
17.1.4. otherwise transfer, or attempt to transfer any interest
including, without limiting the generality of the foregoing, a
mortgage, pledge or security interest, in this Agreement, the
Leased Premises or the right to the use and occupancy of the
Leased Premises; or
17.1.5. indirectly accomplish, or permit or suffer the accomplishment
of, any of the foregoing by merger or consolidation with
another entity, by acquisition or disposition of assets or
liabilities outside the ordinary course of the Tenant's
business or by acquisition or disposition, by the Tenant's
equity owners or subordinated creditors, of any of their
respective interests in the Tenant.
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17.2. The Tenant shall not assign this Agreement or any of the Tenant's
rights hereunder or sublet the Leased Premises or any portion thereof without
first giving three months' prior notice to the Landlord of its desire to assign
or sublet and requesting the Landlord's consent and without first receiving the
Landlord's prior written consent. The notice shall be accompanied by an
agreement by Tenant to reimburse Landlord for the reasonable expenses incurred
in connection with the review of the proposed assignment or sublease and the
documentation related thereto. The Tenant's notice to the Landlord also shall
include:
17.2.1. the full name, address and telephone number of the proposed
assignee or sublessee;
17.2.2. a description of the type(s) of business in which the proposed
assignee or sublessee is engaged and proposes to engage;
17.2.3. a description of the precise use to which the proposed
assignee or sublessee intends to put the Leased Premises or
portion thereof;
17.2.4. the proposed assignee's or subtenant's most recent quarterly
and annual financial statements prepared in accordance with
generally accepted accounting principles and any other
evidence of financial position and responsibility that the
Tenant or proposed assignee or sublessee may desire to submit;
17.2.5. by diagram and measurement of the actual square feet of floor
space, the precise portion of the Leased Premises proposed to
be subject to the assignment of this Agreement or to be
sublet;
17.2.6. a complete, accurate and detailed description of the terms of
the proposed assignment or sublease including, without
limiting the generality of the foregoing, all consideration
paid or given, or proposed to be paid or to be given, by the
proposed assignee, sublessee or other person to the Tenant and
the respective times of payment or delivery; and
17.2.7. any other information reasonably requested by the Landlord.
17.3. By the expiration of the notice period contemplated by subsection 17.2
of this Agreement, the Landlord, in its sole discretion, shall take one of the
following actions by notice to the Tenant:
17.3.1. grant consent on the terms and conditions set forth in
subsection 17.4 of this Agreement and such other reasonable
terms and conditions set forth in the Landlord's notice;
17.3.2. refuse to grant consent for any of the reasons set forth in
subsection 17.5 of this Agreement or for any other reasonable
reason set forth in the Landlord's notice; or
17.3.3. elect to terminate the Term as of (a) the end of the third
full month after the Tenant has given notice of the Tenant's
desire to assign or sublet or (b) the proposed effective date
of the proposed assignment or sublease.
17.4. The Landlord's consent to the Tenant's proposed assignment or sublease,
if granted under subsection 17.3.1 of this Agreement, shall be subject to all
the following terms and conditions (and to any other terms and conditions
permitted by that subsection):
17.4.1. any proposed assignee or sublessee shall, by document executed
and delivered forthwith to the Landlord, agree to be bound by
all the obligations of the Tenant set forth in this Agreement;
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17.4.2. the Tenant shall remain liable under this Agreement, jointly
and severally with any proposed assignee or sublessee, for the
timely performance of all obligations of the Tenant set forth
in this Agreement;
17.4.3. the Tenant shall forthwith deliver to the Landlord manually
executed copies of all documents regarding the proposed
assignment or sublease and a written, accurate and complete
description, manually executed both by the Tenant and the
proposed assignee or sublessee, of any other agreement,
arrangement or understanding between them regarding the same;
17.4.4. with respect to any consideration or other thing of value
received or to be received by the Tenant in connection with
any such assignment or sublease (other than those payable in
equal monthly installments each month during the proposed term
of any such assignment or sublease), the Tenant shall pay to
the Landlord one-half of any such amount and one-half of the
fair market value of any other thing of value within 10 days
of receipt of same;
17.4.5. with respect to any amount payable to the Tenant in equal
monthly installments each month during the proposed term of
any such assignment or sublease in connection with such
assignment or sublease, which amount is in excess of the
amount which bears the same ratio to the monthly installment
of Rent due from the Tenant as the usable floor space of the
Leased Premises subject to the assignment or sublease bears to
the usable floor space of the entire Leased Premises, the
Tenant shall pay one-half of such excess to the Landlord
together with the Tenant's monthly installment of Rent;
17.4.6. the proposed use of the Leased Premises is the same as that
permitted under subsection 7.1 of this Agreement; and
17.4.7. Tenant shall reimburse Landlord for the reasonable expenses
incurred in connection with the review of the proposed
assignment or sublease and the documentation related thereto.
17.5. The Landlord's refusal to grant consent under subsection 17.3.2 of this
Agreement shall not be deemed an unreasonable withholding of consent if based
upon any of the following reasons (or any other reason permitted by that
subsection):
17.5.1. the Landlord desires to take one of the other actions
enumerated in subsection 17.3 of this Agreement;
17.5.2. there is already another assignee, sublessee or licensee of
all or a portion of the Leased Premises;
17.5.3. the proposed sublease is for a term of less than one year;
17.5.4. the proposed sublease is for a term which would expire after
the Term;
17.5.5. less than one year remains in the Term as of the proposed
effective date of the proposed assignment or sublease;
17.5.6. the general reputation, financial position or ability or type
of business of, or the anticipated use of the Leased Premises
by, the proposed assignee or proposed sublessee is
unsatisfactory to the Landlord or is inconsistent with those
of tenants of Other Leased Premises or inconsistent with any
commitment made by the Landlord to any such other tenant;
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17.5.7. the proposed consideration to be paid to the Tenant during any
period of 12 months is less than the amount of the Market
Rental Rate divided by the gross rentable floor space of the
Leased Premises and multiplied by that portion of the gross
rentable floor space of the Leased Premises proposed to be
subject to the proposed assignment or sublease;
17.5.8. the gross rentable floor space of the portion of the Leased
Premises proposed to be sublet is less than one-third of the
gross rentable floor space of the Leased Premises; or
17.5.9. Tenant has advertised or listed the space for subleasing or
assignment at a rate which is less than the rate being quoted
by Landlord for other available space in the Building.
18. SIGNS, DISPLAYS AND ADVERTISING.
18.1. The Tenant shall have one sign identifying the Landlord's assigned
number for the Leased Premises at the principal entrance to the Leased Premises.
The Tenant may identify itself in or on each of: the signs at the principal
entrance to the Leased Premises, the Building directory and the directory, if
any, on the floor of the Building on which the Leased Premises is located. All
such signs, and the method and materials used in mounting and dismounting them,
shall be in accordance with the Landlord's specifications. All such signs shall
be provided and mounted by the Landlord at the Landlord's expense, except that
the Tenant shall bear any expense of identifying itself on the sign at the
principal entrance to the Leased Premises.
18.2. No other sign, advertisement, fixture or display shall be used by the
Tenant on the Property or in the Building or the Common Facilities. Any signs
other than those specifically permitted under subsection 18.1 of this Agreement
shall be removed promptly by the Tenant or by the Landlord at the Tenant's
expense.
19. QUIET ENJOYMENT.
The Landlord is the owner of the Building, the Property and the Common
Facilities located on the Property. The Landlord has the right and authority to
enter into and execute and deliver this Agreement with the Tenant. So long as an
Event of Default shall not have occurred, the Tenant shall and may peaceably and
quietly have, hold and enjoy the Leased Premises during the Term in accordance
with this Agreement.
20. RELOCATION.
At any time and from time to time during the Term, on at least 30 days' prior
notice to the Tenant, the Landlord shall have the right to move the Tenant out
of the Leased Premises and into premises having comparable size to the Leased
Premises located in the Building or in any other comparable building located in
the immediate area for the duration of the Term. Comparable size shall mean
premises which have floor space which is not more than 100 square feet smaller
than the Leased Premises, or larger. In the event the Landlord exercises this
right of relocation, the Landlord shall decorate the new premises similarly to
the Leased Premises and remove, relocate and reinstall the Tenant's furniture,
trade fixtures, furnishings and equipment, all at the sole cost and expense of
the Landlord. When the substitute new premises are ready, the Tenant shall
surrender the Leased Premises. Following any such relocation, this Agreement
shall continue in full force and effect except for the description of the Leased
Premises, the Building and the Property which, upon completion of such
relocation, shall be deemed amended to describe the substitute new premises,
building and property, respectively, to which the Tenant shall have been
relocated in accordance with this section 20 of the Agreement.
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21. SURRENDER.
21.1 Upon expiration or other termination of the Term, or at any other time
at which the Landlord, by virtue of any provision of this Agreement or otherwise
has the right to re-enter and re-take possession of the Leased Premises, the
Tenant shall surrender possession of the Leased Premises; remove from the Leased
Premises all property owned by the Tenant or anyone else other than the
Landlord; remove from the Leased Premises any alterations, improvements or other
modifications to the Leased Premises that the Landlord may request by notice;
make any repairs required by such removal; clean the Leased Premises; leave the
Leased Premises in as good order and condition as it was upon the completion of
any improvements contemplated by section 5 of this Agreement, ordinary wear and
use excepted; return all copies of all keys and passes to the Leased Premises,
the Common Facilities and the Building to the Landlord (or Tenant shall bear the
cost of securing replacements); and receive the Landlord's written acceptance of
the Tenant's surrender. The Landlord shall not be deemed to have accepted the
Tenant's surrender of the Leased Premises unless and until the Landlord shall
have executed and delivered the Landlord's written acceptance of surrender to
the Tenant, which shall not be unreasonably withheld or delayed.
21.2 At least ten (10) days prior to the expiration of the Term or within
five (5) business days after an earlier termination of the Term, Landlord may
elect ("Election Right") by written notice to Tenant to:
21.2.1 Retain any or all wiring, cables and similar installations
appurtenant thereto installed by Tenant in the risers,
ceilings, plenums and electrical closets of the Building
("Wiring");
21.2.2 Remove any or all such Wiring and restore the Premises and the
Building to the condition existing prior to the installation
of the Wiring ("Wire Restoration Work"). Landlord shall
perform such Wire Restoration Work at Tenant's sole cost and
expense; or
21.2.3 Require Tenant to perform the Wire Restoration Work at
Tenant's sole cost and expense. In such event, Tenant shall
submit the contract for the Wire Restoration Work to Landlord
for Landlord's prior approval.
21.3 The provisions of this Clause shall survive the expiration or sooner
termination of this Agreement.
21.4 In the event Landlord elects to retain the Wiring pursuant to
subsection 21.2.1 of this Agreement, Tenant covenants that:
21.4.1. Tenant shall be the sole owner of such Wiring, that Tenant
shall have good right to surrender such Wiring, and that such
Wiring shall be free of all liens and encumbrances; and
21.4.2 All Wiring shall be left in good condition, working order,
properly labeled at each end and in each
telecommunications/electrical closet and junction box, and in
safe condition.
21.5. Notwithstanding anything to the contrary in section 29, Landlord may
retain Tenant's Security Deposit after the expiration or sooner termination of
this Agreement until the earliest of the following events:
21.5.1 Landlord elects to retain the Wiring pursuant to subsection
21.2.1 of this Agreement;
21.5.2 Landlord elects to perform the Wiring Restoration Work
pursuant to subsection 21.2.2 of this Agreement and the Wiring
Restoration Work is complete and Tenant has fully reimbursed
Landlord for all costs related thereto; or
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21.5.3 Landlord elects to require the Tenant to perform the Wiring
Restoration Work pursuant to subsection 21.2.3 of this
Agreement and the Wiring Restoration Work is complete and
Tenant has paid for all costs related thereto;
21.5.4 In the event Tenant fails or refuses to pay all costs of the
Wiring Restoration Work within ten (10) business days of
Tenant's receipt of Landlord's notice requesting Tenant's
reimbursement for or payment of such costs, Landlord may apply
all or any portion of Tenant's Security Deposit toward the
payment of such unpaid costs relative to the Wiring
Restoration Work.
21.5.5 The retention or application of such Security Deposit by
Landlord pursuant to this section 21 does not constitute a
limitation on or waiver of Landlord's right to pursue any
other or further remedies at law or in equity.
22. EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an Event of
Default under this Agreement:
22.1. the Tenant's failure to pay any installment of Basic Rent or any amount
of Additional Rent when it is first due;
22.2. the Tenant's failure to perform any of its obligations under this
Agreement if such failure has caused, or may cause, loss or damage that can not
promptly be cured by subsequent act of the Tenant;
22.3. the Tenant's failure to complete performance of any of the Tenant's
obligations under this Agreement (other than those contemplated by subsections
22.1 and 22.2 of this Agreement) within 10 days after the Landlord shall have
given notice to the Tenant specifying which of the Tenant's obligations has not
been performed and in what respects, unless completion of performance within
such period of 10 days is not possible using diligence and expedience, then
within a reasonable time of the Landlord's notice so long as the Tenant shall
have commenced substantial performance within the first three days of such
period of 10 days and shall have continued to provide substantial performance,
diligently and expediently, through to completion of performance;
22.4. the discovery that any representation made by the Tenant in this
Agreement shall have been inaccurate or incomplete in any material respect
either on the date it was made or the date as of which it was made;
22.5. the sale, transfer or other disposition of any interest of the Tenant
in the Leased Premises by way of execution or other legal process;
22.6. with the exception of those of the following events to which section
365 of the Bankruptcy Code shall apply in the context of an office lease (in
which case subsection 22.7 of this Agreement shall apply):
22.6.1. the Tenant's becoming a "debtor," as that term is defined in
section 101 of the Bankruptcy Code;
22.6.2. any time when either the value of the Tenant's liabilities
exceed the value of the Tenant's assets or the Tenant is
unable to pay its obligations as and when they respectively
become due in the ordinary course of business;
22.6.3. the appointment of a receiver or trustee of the Tenant's
property or affairs; or
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22.6.4. the Tenant's making an assignment for the benefit of, or an
arrangement with or among, creditors or filing a petition in
insolvency or for reorganization or for the appointment of a
receiver;
22.7. in the event of the occurrence of any of the events enumerated in
subsection 22.6 of this Agreement to which section 365 of the Bankruptcy Code
shall apply in the context of an office lease, the earlier of the bankruptcy
trustee's rejection or deemed rejection (as those terms are used in section 365
of the Bankruptcy Code) of this Agreement; or
22.8. the Tenant's abandoning the Leased Premises before expiration of the
Term without the prior written consent of the Landlord.
23. RIGHTS AND REMEDIES.
23.1. Upon the occurrence of an Event of Default the Landlord shall have all
the following rights and remedies:
23.1.1. to elect to terminate the Term by giving notice of such
election, and the effective date thereof, to the Tenant and to
receive Termination Damages;
23.1.2. to elect to re-enter and re-take possession of the Leased
Premises, without thereby terminating the Term, by giving
notice of such election, and the effective date thereof, to
the Tenant and to receive Re-Leasing Damages;
23.1.3. if the Tenant remains in possession of the Leased Premises
after the Tenant's obligation to surrender the Leased Premises
shall have arisen, to remove the Tenant and the Tenant's and
any others' possessions from the Leased Premises by any of the
following means without any liability to the Tenant therefor,
any such liability to the Tenant therefor which might
otherwise arise being hereby waived by the Tenant: legal
proceedings (summary or otherwise), writ of dispossession and
any other means and to receive Holdover Damages and, except in
the circumstances contemplated by section 20 of this
Agreement, to receive all expenses incurred in removing the
Tenant and the Tenant's and any others' possessions from the
Leased Premises, and of storing such possessions if the
Landlord so elects;
23.1.4. to be awarded specific performance, temporary restraints and
preliminary and permanent injunctive relief regarding Events
of Default where the Landlord's rights and remedies at law may
be inadequate, without the necessity of proving actual damages
or the inadequacy of the rights and remedies at law;
23.1.5. to receive all expenses incurred in securing, preserving,
maintaining and operating the Leased Premises during any
period of vacancy, in making repairs to the Leased Premises,
in preparing the Leased Premises for re-leasing and in
re-leasing the Leased Premises including, without limiting the
generality of the foregoing, any brokerage commissions;
23.1.6. to receive all legal expenses, including without limiting the
generality of the foregoing, attorneys' fees incurred in
connection with pursuing any of the Landlord's rights and
remedies, including indemnification rights and remedies;
23.1.7. if the Landlord, in its sole discretion, elects to perform any
obligation of the Tenant under this Agreement (other than the
obligation to pay Rent) which the Tenant has not timely
performed, to receive all expenses incurred in so doing;
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23.1.8. to elect to pursue any legal or equitable right and remedy
available to the Landlord under this Agreement or otherwise;
and
23.1.9. to elect any combination, or any sequential combination of any
of the rights and remedies set forth in subsection 23.1 of
this Agreement.
23.2. In the event the Landlord elects the right and remedy set forth in
subsection 23.1.1 of this Agreement, Termination Damages shall be equal to the
amount which, at the time of actual payment thereof to the Landlord, is the sum
of:
23.2.1. all accrued but unpaid Rent;
23.2.2. the present value (calculated using the most recently
available (at the time of calculation) published weekly
average yield on United States Treasury securities having
maturities comparable to the balance of the then remaining
Term) of the sum of all payments of Rent remaining due (at the
time of calculation) until the date the Term would have
expired (had there been no election to terminate it earlier)
less the present value (similarly calculated) of all payments
of rent to be received through the end of the Term (had there
been no election to terminate it earlier) from a lessee, if
any, of the Leased Premises at the time of calculation (and it
shall be assumed for purposes of such calculations that (i)
the amount of future Additional Rent due per year under this
Agreement will be equal to the average Additional Rent per
month due during the 12 full calendar months immediately
preceding the date of any such calculation, increasing
annually at a rate of eight percent compounded, (ii) if any
calculation is made before the first anniversary of the end of
the No Pass Through Period, the average Additional Rent due
for any month after the end of the No Pass Through Period will
be equal to nine percent of the sum of the Base Year
Operational Expenses, Base Year Taxes and Tenant Electric
Charges (considered on an annual basis), (iii) if any
calculation is made before the beginning of the Base Year, the
sum of Base Year Taxes and Base Year Operational Expenses
shall be assumed to be $7.50 per gross rentable square foot
and (iv) if any calculation is made before the end of the Base
Year, Base Year Taxes and Base Year Operational Expenses may
be extrapolated based on the year to date experience of the
Landlord);
23.2.3. the Landlord's reasonably estimated cost of demolishing any
leasehold improvements to the Leased Premises; and
23.2.4. that amount, which as of the occurrence of the Event of
Default, bears the same ratio to the costs, if any, incurred
by the Landlord (and not paid by the Tenant) in building out
the Leased Premises in accordance with section 5 of this
Agreement as the number of months remaining in the Term
(immediately before the occurrence of the Event of Default)
bears to the number of months in the entire Term (immediately
before the occurrence of the Event of Default).
23.3. In the event the Landlord elects the right and remedy set forth in
subsection 23.1.2 of this Agreement, Re-Leasing Damages shall be equal to the
Rent less any rent actually and timely received by the Landlord from any lessee
of the Leased Premises or any portion thereof, payable at the respective times
that Rent is payable under the Agreement plus the cost, if any, to the Landlord
of building out or otherwise preparing the Leased Premises for, and leasing the
Leased Premises to, any such lessee.
23.4. In the event the Landlord elects the right and remedy set forth in
subsection 23.1.3 of this Agreement, Holdover Damages shall mean damages at the
rate per month or part thereof equal to the greater of: (a) one and one-half
times one-twelfth of the then Market Rental Rate plus all Additional Rent
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as set forth in this Agreement or (b) double the average amount of all payments
of Rent due under this Agreement during each of the last 12 full calendar months
prior to the Landlord's so electing or, in the event the Term shall have
terminated by expiration under subsection 24.1.1 of this Agreement, the last
full 12 calendar months of the Term, in either case payable in full on the first
day of each holdover month or part thereof.
23.5. In connection with any summary proceeding to dispossess and remove the
Tenant from the Leased Premises under subsection 23.1.3 of this Agreement, the
Tenant hereby waives:
23.5.1. any notices for delivery of possession thereof, of
termination, of demand for removal therefrom, of the cause
therefor, to cease, to quit and all other notices that might
otherwise be required pursuant to 2A N.J.S.A. 18-53 et seq.;
23.5.2. any right the Tenant might otherwise have to cause a
termination of the action or proceeding by paying to the
Landlord or into court or otherwise any Rent in arrears;
23.5.3. any right the Tenant might otherwise have to a period of
waiting between issuance of any warrant in execution of any
judgment for possession obtained by the Landlord and the
execution thereof;
23.5.4. any right the Tenant might otherwise have to transfer or
remove such proceeding from the court (or the particular
division or part of the court) or other forum in which it
shall have been instituted by the Landlord to another court,
division or part;
23.5.5. any right the Tenant might otherwise have to redeem the
Tenant's former leasehold interest between the entry of any
judgment and the execution of any warrant issued in connection
therewith by paying to the Landlord or into Court or otherwise
any Rent in arrears; and
23.5.6. any right the Tenant might otherwise have to appeal any
judgment awarding possession of the Leased Premises to the
Landlord.
23.6. The enumeration of rights and remedies in this section 23 of the
Agreement is not intended to be exhaustive or exclusive of any rights and
remedies which might otherwise be available to the Landlord, or to force an
election of one or more rights and remedies to the exclusion of others,
concurrently, consecutively or sequentially. On the contrary, each right and
remedy enumerated in this section 23 of the Agreement is intended to be
cumulative with each other right and remedy enumerated in this section 23 of the
Agreement and with each other right and remedy that might otherwise be available
to the Landlord; and the selection of one or more of such rights and remedies at
any time shall not be deemed to prevent resort to one or more others of such
rights and remedies at the same time or a subsequent time, even with regard to
the same occurrence sought to be remedied.
23.7. In view of the relatively free right to sublet and assign, and for
other reasons, it is expressly understood and agreed that the Landlord shall
have no duty to mitigate damages. In the event the Landlord elects the right and
remedy set forth in subsection 23.1.2 of this Agreement, Re-Leasing Damages
shall be equal to the Rent less any rent actually and timely received by the
Landlord from any lessee of the Leased Premises or any portion thereof, payable
at the respective times that Rent is payable under the Agreement plus the cost,
if any, to the Landlord of building out or otherwise preparing the Leased
Premises for, and leasing the Leased Premises to, any such lessee. The Landlord
may relet some or all of the Leased Premises but shall have no duty to do so.
The Tenant shall retain its rights to sublet or assign the Leased Premises, or
portions thereof, pursuant to Article 17 hereof except to the extent that the
Landlord shall have already relet the same which shall abrogate the Tenant's
rights, pro tanto.
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23.8. If (i) an Event of Default has occurred and the Tenant moves out,
whether Landlord has terminated or otherwise, or (ii) if Tenant is dispossessed,
and, in either of such events, fails to remove any property, machinery,
equipment and fixtures or other property prior to such default, dispossess or
removal, then and in that event, the said property, machinery, equipment and
fixtures or other property shall be deemed, at the option of the Landlord, to be
abandoned; or in lieu thereof, at the Landlord's option, the Landlord may remove
such property and charge the reasonable cost and expense of removal, storage and
disposal to the Tenant, together with an additional twenty one (21%) percent of
such costs for Landlord's overhead and profit, which total costs shall be deemed
to be additional rent hereunder. The Tenant shall be liable for any damage which
it causes in the removal of said property from the Leased Premises.
24. TERMINATION OF THE TERM.
24.1. The Term shall terminate upon the earliest of the following events to
occur:
24.1.1. expiration of the Term;
24.1.2. in connection with a transaction contemplated by section 16 of
this Agreement, the later of (a) the vesting of the acquiring
party's right to possession or (b) the Tenant's vacating the
Leased Premises;
24.1.3. under the circumstances contemplated by subsection 15.1 of
this Agreement, upon the Tenant's giving prompt notice of the
failure of the Landlord to give, on a timely basis, the notice
contemplated by subsection 15.1.2 of this Agreement and that
the Tenant desires termination of the Term (which termination
shall be effective as of the date of the subject casualty with
respect to those portions of the Leased Premises rendered
untenantable and as of the date of the Tenant's giving notice
with respect to those portions of the Leased Premises which
were not rendered untenantable);
24.1.4. under the circumstances contemplated by subsection 15.1 of
this Agreement, upon the expiration of 45 additional days
(without the Landlord's completion of restoration in the
interim) after the Tenant shall have given prompt notice that
the Landlord has not restored the Leased Premises on a timely
basis and that the Tenant desires termination of the Term
(which termination shall be effective as of the date of the
subject casualty with respect to those portions of the Leased
Premises rendered untenantable and as of the date of the
Tenant's giving notice with respect to those portions of the
Leased Premises which were not rendered untenantable);
24.1.5. the effective date of any election by the Landlord under
subsection 17.3.3 of this Agreement in response to the
Tenant's notice of the Tenant's desire to assign this
Agreement or to sublet all or a portion of the Leased
Premises; or
24.1.6. the effective date of any election by the Landlord to
terminate the Term under subsection 23.1.1 of this Agreement.
24.2. No termination of the Term shall have the effect of releasing the
Tenant from any obligation or liability theretofore or thereby incurred and,
until the Tenant shall have surrendered the Leased Premises in accordance with
section 21 of this Agreement, from any obligation or liability thereafter
incurred.
25. MORTGAGE AND UNDERLYING LEASE PRIORITY.
This Agreement and the estate, interest and rights hereby created for the
benefit of the Tenant are, and
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shall always be, subordinate to any mortgage (other than a mortgage created by
the Tenant or a sale, transfer or other disposition by the Tenant in the nature
of a security interest in violation of subsections 17.1.4 and 22.5,
respectively, of this Agreement) already or afterwards placed on the Property,
the Common Facilities, the Building or any estate or interest therein including,
without limiting the generality of the foregoing, any new mortgage or any
mortgage extension, renewal, modification, consolidation, replacement,
supplement or substitution. This Agreement and the estate, interest and rights
hereby created for the benefit of the Tenant are, and shall always be,
subordinate to any ground lease already or afterwards made with regard to the
Property, the Common Facilities, the Building or any estate or interest therein
including, without limiting the generality of the foregoing, any new ground
lease or any ground lease extension, renewal, modification, consolidation,
replacement, supplement or substitution. The provisions of this section 25 of
the Agreement shall be self-effecting; and no further instrument shall be
necessary to effect any such subordination. Nevertheless, the Tenant hereby
consents that any mortgagee or mortgagee's successor in interest may, at any
time and from time to time, by notice to the Tenant, subordinate its mortgage to
the estate and interest created by this Agreement; and upon the giving of such
notice, the subject mortgage shall be deemed subordinate to the estate and
interest created by this Agreement regardless of the respective times of
execution or delivery of either or of recording the subject mortgage.
26. TRANSFER BY LANDLORD.
26.1. The Landlord shall have the right at any time and from time to time to
sell, transfer, lease or otherwise dispose of the Property, the Common
Facilities or the Building or any of the Landlord's interests therein, or to
assign this Agreement or any of the Landlord's rights thereunder.
26.2. Upon giving notice of the occurrence of any transaction contemplated by
subsection 26.1 of this Agreement, the Landlord shall thereby be relieved of any
obligation that might otherwise exist under this Agreement with respect to
periods subsequent to the effective date of any such transaction. If, in
connection with any transaction contemplated by subsection 26.1 of this
Agreement the Landlord transfers, or makes allowance for, any Security Deposit
of the Tenant and gives notice of that fact to the Tenant, the Landlord shall
thereby be relieved of any further obligation to the Tenant with regard to any
such Security Deposit; and the Tenant shall look solely to the transferee with
respect to any such Security Deposit.
26.3. In the event of the occurrence of any transaction contemplated by
subsection 26.1 of this Agreement the Tenant, upon written request therefor from
the transferee, shall attorn to and become the tenant of such transferee upon
the terms and conditions set forth in this Agreement.
26.4. Notwithstanding anything to the contrary that may be set forth in
subsections 26.1, 26.2 and 26.3 of this Agreement, in the event any mortgage
contemplated by section 25 of this Agreement is enforced by the respective
mortgagee pursuant to remedies provided in the mortgage or otherwise provided by
law or equity and any person succeeds to the interest of the Landlord as a
result of, or in connection with, any such enforcement, the Tenant shall, upon
the request of such successor in interest, automatically attorn to and become
the Tenant of such successor in interest without any change in the terms or
provisions of this Agreement, except that such successor in interest shall not
be bound by: (a) any payment of Basic Rent or Additional Rent (exclusive of
prepayments in the nature of a Security Deposit) for more than one month in
advance or (b) any amendment or other modification of this Agreement which was
made without the consent of such mortgagee or such successor in interest; and,
upon the request of such successor in interest, the Tenant shall execute,
acknowledge and deliver any instrument(s) confirming such attornment.
26.5. If this Agreement and the estate, interest and rights hereby created
for the benefit of the Tenant are ever subject and subordinate to any ground
lease contemplated by section 25 of this Agreement:
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26.5.1. upon the expiration or earlier termination of the term of any
such ground lease before the termination of the Term under
this Agreement, the Tenant shall attorn to, and become the
Tenant of, the lessor under any such ground lease and
recognize such lessor as the Landlord under this Agreement for
the balance of the Term; and
26.5.2. such expiration or earlier termination of the term of any such
ground lease shall have no effect on the Term under this
Agreement.
27. INDEMNIFICATION.
27.1. The Tenant shall, and hereby does, indemnify the Landlord against any
and all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses including, without limiting the generality of the foregoing, expenses
of investigation, defense and enforcement thereof or of the obligation set forth
in this section 27 of the Agreement including, without limiting the generality
of the foregoing, attorneys' fees, imposed on or incurred by the Landlord in
connection with any of the following matters which occurs during the Term:
27.1.1. any matter, cause or thing arising out of the use, occupancy,
control or management of the Leased Premises or any portion
thereof which is not caused directly, exclusively and entirely
by the Landlord's active gross negligence or intentional act
without the intervention of any other cause or contributing
factor whatsoever;
27.1.2. any negligence or intentional act on the part of the Tenant or
any of its employees, other agents or Guests;
27.1.3. any accident, injury or damage to any person or property
occurring in or about the Leased Premises which is not caused
directly, exclusively and entirely by the Landlord's active
gross negligence or intentional act without the intervention
of any other cause or contributing factor whatsoever;
27.1.4. any representation made by the Tenant in this Agreement shall
have been inaccurate or incomplete in any material respect
either on the date it was made or the date as of which it was
made;
27.1.5. the imposition of any mechanic's, materialman's or other lien
on the Property, the Common Facilities, the Building, the
Leased Premises or any portion of any of the foregoing, or the
filing of any notice of intention to obtain any such lien, in
connection with any alteration, improvement or other
modification of the Leased Premises made or authorized by the
Tenant (which indemnification obligation shall be deemed to
include the Tenant's obligations set forth in subsection
12.2.4.3 of this Agreement); or
27.1.6. any failure on the part of the Tenant to perform or comply
with any obligation of the Tenant set forth in this Agreement.
27.2. Payment of indemnification claims by the Tenant to the Landlord shall
be due upon the Landlord's giving notice thereof to the Tenant.
27.3. The Landlord shall promptly give notice of any claim asserted, or
action or proceeding commenced, against it as to which it intends to claim
indemnification from the Tenant and, upon notice from the Tenant so requesting,
shall forward to the Tenant copies of all claim or litigation documents received
by it. Upon receipt of such notice the Tenant may, by notice to the Landlord,
participate therein and, to the extent it may desire, assume the defense thereof
through independent counsel selected by the
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Tenant and reasonably satisfactory to the Landlord. The Landlord shall not be
bound by any compromise or settlement of any such claim, action or proceeding
without its prior written consent.
28. PARTIES' LIABILITY.
28.1. None of the following occurrences shall constitute a breach of this
Agreement by the Landlord, a termination of the Term, an active or constructive
eviction or an occurrence requiring an abatement of Rent:
28.1.1. the inability of the Landlord to provide any utility or
service to be provided by the Landlord, as described in
section 8 of this Agreement which is due to causes beyond the
Landlord's control, or to necessary or advisable improvements,
maintenance, repairs or emergency, so long as the Landlord
uses reasonable efforts and diligence under the circumstances
to restore the interrupted service or utility;
28.1.2. any improvement, modification, alteration or other change made
to the Property, the Building or the Common Facilities by the
Landlord consistently with the Landlord's obligations set
forth in subsection 13.2 of this Agreement; and
28.1.3. any change in any Federal, state or local law or ordinance.
28.2. Except for the commencement, duration or termination of the Term (other
than under the circumstances contemplated by subsection 15.1 of this Agreement),
the Tenant's obligation to make timely payments of Rent, the Tenant's obligation
to maintain certain insurance coverage in effect, the Tenant's failure to
perform any of its other obligations under this Agreement if such failure has
caused loss or damage that can not promptly be cured by subsequent act of the
Tenant and the period within which any Option to Renew or any other type of
option or optional right exercisable by the Tenant must be exercised, any period
of time during which the Landlord or the Tenant is prevented from performing any
of its respective obligations under this Agreement because of fire, any other
casualty or catastrophe, strikes, lockouts, civil commotion, acts of God or the
public enemy, governmental prohibitions or preemptions, embargoes or inability
to obtain labor or material due to shortage, governmental regulation or
prohibition, shall be added to the time when such performance is otherwise
required under this Agreement.
28.3. Landlord shall not be liable for any loss suffered or incurred by
Tenant, or any interruption of or injury to its business or property by reason
of the use of the Grand Master Key or electronic card key access by Landlord or
its representatives. In the event the Landlord is an individual, an entity,
partnership, joint venture, association or a participant in a joint tenancy or
tenancy in common, neither the Landlord, nor any of its officers, directors,
shareholders, partners, venturers, members and joint owners shall have any
personal liability or obligation under or in connection with this Agreement or
the Tenant's use and occupancy of the Leased Premises; but recourse shall be
limited exclusively to the Landlord's interest in the Building.
28.4. If Landlord shall be unable to give possession of the Leased Premises
on the Target Date for any reason whatsoever, Landlord shall not be subject to
any liability for such failure. Under such circumstances, the rent reserved and
covenanted to be paid herein shall not commence until the possession of the
Leased Premises is given.
28.5. If, at any time during the Term, the payment or collection of any Rent
otherwise due under this Agreement shall be limited, frozen or otherwise
subjected to a moratorium by applicable law, and such limitation, freeze or
other moratorium shall subsequently be lifted, whether before or after the
termination of the Term, such aggregate amount of Rent as shall not have been
paid or collected during the Term on
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account of any such limitation, freeze or other moratorium, shall thereupon be
due and payable at once. There shall be added to the maximum period of any
otherwise applicable statute of limitation the entire period during which any
such limitation, freeze or other moratorium shall have been in effect.
28.6. If this Agreement is executed by more than one person as Tenant, their
liability under this Agreement and in connection with the use and occupancy of
the Leased Premises shall be joint and several.
28.7. In the event any rate of interest, or other charge in the nature of
interest, calculated as set forth in this Agreement would lead to the imposition
of a rate of interest in excess of the maximum rate permitted by applicable
usury law, only the maximum rate permitted shall be charged and collected.
28.8. The rule of construction that any ambiguities that may be contained in
any contract shall be construed against the party drafting the contract shall be
inapplicable in construing this Agreement.
29. SECURITY DEPOSIT.
The Tenant shall pay to the Landlord upon execution and delivery of this
Agreement the sum of $3,673.34 as a security deposit to be held by the Landlord
as security for the Tenant's performance of all the Tenant's obligations under
this Agreement (the "Security Deposit"). The Landlord may commingle the Security
Deposit with its general funds. Any interest earned on the Security Deposit
shall belong to the Landlord. The Tenant shall not encumber the Security
Deposit. The Landlord, in its sole discretion, may apply the Security Deposit to
cure any Event of Default under this Agreement. If any such application is made,
upon notice by the Landlord to the Tenant, the Tenant shall promptly replace the
amount so applied. If there has been no Event of Default, within 30 days after
termination of the Term the Landlord shall return the entire balance of the
Security Deposit to the Tenant. The Tenant will not look to any foreclosing
mortgagee of the Property, the Building, the Common Facilities or any interest
therein for such return of the balance of the Security Deposit, unless the
mortgagee has expressly assumed the Landlord's obligations under this Agreement
or has actually received the balance of the Security Deposit.
If Tenant requests Landlord to execute a lien waiver in favor of any lender,
Landlord shall only do so if (i) the lender is an institutional lender; (ii) the
form of the lien waiver is satisfactory to Landlord; (iii) Tenant agrees to
reimburse Landlord for the reasonable expenses incurred in connection with the
review of the proposed lien waiver and the documentation related thereto; and
(iv) Tenant increases the security deposit by an amount which is sufficient to
mitigate the negative economic impact of the granting of such lien waiver.
30. REPRESENTATIONS.
The Tenant hereby represents and warrants that:
30.1. its North American Industrial Classification (NAICS) code is ______ and
it will promptly give notice of any change therein during the Term to the
Landlord;
30.2. no broker or other agent has shown the Leased Premises or the Building
to the Tenant, or brought either to the Tenant's attention;
30.3. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Agreement
by the Tenant have been duly and validly authorized by its general partners, to
the extent required by their partnership agreement and applicable law, if the
Tenant is a partnership or, if the Tenant is a corporation, by its board of
directors and, if necessary, by its stockholders at meetings duly called and
held on proper notice for that purpose at which there were
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respective quorums present and voting throughout; and no other approval,
partnership, corporate, governmental or otherwise, is required to authorize any
of the foregoing or to give effect to the Tenant's execution and delivery of
this Agreement; and
30.4. the execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Agreement
by the Tenant will not result in a breach or violation of, or constitute a
default under, the provisions of any statute, charter, certificate of
incorporation or bylaws or partnership agreement of the Tenant or any affiliate
of the Tenant, as presently in effect, or any indenture, mortgage, lease, deed
of trust, other agreement, instrument, franchise, permit, license, decree,
order, notice, judgment, rule or order to or of which the Tenant or any
affiliate of the Tenant is a party, a subject or a recipient or by which the
Tenant, any affiliate of the Tenant or any of their respective properties and
other assets is bound.
31. RESERVATION IN FAVOR OF TENANT.
Neither the Landlord's forwarding a copy of this document to any prospective
tenant nor any other act on the part of the Landlord prior to execution and
delivery of this Agreement by the Landlord shall give rise to any implication
that any prospective tenant has a reservation, an option to lease or an
outstanding offer to lease any premises.
32. TENANT'S CERTIFICATES AND MORTGAGEE NOTICE REQUIREMENTS.
32.1. Promptly upon request of the Landlord at any time or from time to time,
but in no event more than five days after the Landlord's respective request, the
Tenant shall execute, acknowledge and deliver to the Landlord or its designee an
estoppel or other certificate, satisfactory in form and substance to the
Landlord and any of its mortgagees, ground lessors or lessees or transferees or
prospective mortgagees, ground lessors or lessees or transferees, with respect
to any of or all the following matters:
32.1.1. whether this Agreement is then in full force and effect;
32.1.2. whether this Agreement has not been amended, modified,
superseded, canceled, repudiated or revoked;
32.1.3. whether the Landlord has satisfactorily completed all
construction work, if any, required of the Landlord or
contractors selected and retained by the Landlord in
connection with readying the Leased Premises for occupancy by
the Tenant in accordance with section 5 of this Agreement;
32.1.4. whether the Tenant is then in actual possession of the Leased
Premises;
32.1.5. whether the Tenant then has no defenses or counterclaims under
this Agreement or otherwise against the Landlord or with
respect to the Leased Premises;
32.1.6. whether Landlord is not then in breach of this Agreement in
any respect;
32.1.7. whether the Tenant then has knowledge of any assignment of
this Agreement, the pledging or granting of any security
interest in this Agreement or in Rent due and to become due
under this Agreement;
32.1.8. whether Rent is not then accruing under this Agreement in
accordance with its terms;
32.1.9. whether any Rent is not then in arrears;
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32.1.10. whether Rent due or to become due under this Agreement has not
been prepaid by more than one month;
32.1.11. if the response to any of the foregoing matters is in the
negative, a specification of all the precise reasons that
necessitated the negative response in each instance; and
32.1.12. any other matter reasonably requested by the Landlord or any
of its mortgagees, ground lessors or lessees or transferees or
prospective mortgagees, ground lessors or lessees or
transferees, including, without limiting the generality of the
foregoing, such information as the Landlord may request for
purposes of assuring compliance with the Industrial Site
Recovery Act (13 N.J.S.A. 1K-6 et seq.), as it may be amended,
and any other applicable Federal, state or local statute,
ordinance, rule, regulation or order concerned with
environmental matters.
32.2. If, in connection with the Landlord's or a prospective transferee's
obtaining financing or refinancing of the Property, the Building, the Common
Facilities, any portion thereof or any interest therein, the Landlord or a
prospective lender shall so request, the Tenant shall furnish to the requesting
party within 15 days of the request:
32.2.1. its written consent to any requested modifications of this
Agreement provided that, in each such instance, the requested
modification does not increase the Rent otherwise due or, in
the reasonable judgment of the Tenant, otherwise materially
increase the obligations of the Tenant under this Agreement or
materially adversely affect the Tenant's leasehold interest
created hereby or the Tenant's use and enjoyment of the Leased
Premises (except in the circumstances contemplated by section
16 of this Agreement); and
32.2.2. summary financial information regarding its financial position
as of the close of its most recently completed fiscal year and
its most recently completed interim fiscal period and
regarding its results of operations for the periods then ended
and comparable year earlier periods, certified by Tenant's
chief financial officer to be a complete, accurate and fair
presentation of the summary financial information purporting
to be set forth therein.
32.3. If the Landlord or any of its mortgagees gives notice to the Tenant of
any of their respective names and addresses from time to time, the Tenant shall
give notice to each such mortgagee of any notice of breach or default previously
or afterwards given by the Tenant to the Landlord under this Agreement and
provide in such notice that if the Landlord has not cured such breach or default
within any permissible cure period then such mortgagee shall have the greater of
(a) an additional period of 30 days or (b) if such default cannot practically be
cured within such period, such additional period as is reasonable under the
circumstances, within which to cure such default. Upon request of the Landlord
at any time or from time to time, the Tenant shall execute, acknowledge and
deliver to the Landlord or its designee an acknowledgment of receipt of any such
notice, an acknowledgment of receipt of any notice of assignment of this
Agreement or rights hereunder by the Landlord to any of its mortgagees and the
Tenant's agreement to the foregoing effect on the respective forms, if any,
furnished by the Landlord or the respective mortgagees.
32.4. Approximately (i) 90 days prior to the termination of the Term and (ii)
30 days prior to any relocation of the Tenant from the Leased Premises (as
constituted on the Commencement Date), the Tenant shall obtain from the New
Jersey Department of Environmental Protection ("NJDEP"), and deliver to the
Landlord, the Department's unconditional certificate of non-applicability or
approval of the Tenant's negative declaration or clean-up plan, together with
copies of all documents furnished to NJDEP in connection with obtaining such
certificate or approval.
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32.5. In the event evidence of compliance with ISRA is not delivered to the
Landlord prior to expiration or earlier termination of the Term, Tenant shall be
liable for all costs and expenses incurred by Landlord in enforcing Tenant's
obligations hereunder until such time as evidence of compliance with ISRA has
been delivered to the Landlord, and together with any costs and expenses,
including legal and environmental consultant fees incurred by Landlord in
enforcing Tenant's obligations under subsection 7.2.8 and subsection 32.4 of
this Agreement. After the Term, Tenant shall nevertheless be obligated to comply
with its obligations hereunder. Evidence of compliance, as used herein, shall
mean an approved "negative declaration" or a "no further action letter" issued
by the NJDEP. Evidence of compliance shall be delivered to the Landlord,
together with copies of all submissions made to, and received from, the NJDEP,
including all environmental reports, test results and other supporting
documentation. In addition, if a Release is caused or permitted by Tenant's
Representatives during the Term then, after end of the Term, and because of the
difficulty which the Landlord may experience in re-letting the Leased Premises,
the Tenant shall remain liable for the payment of the annual rent in effect in
the last month of the Term, prorated on a monthly basis (the "Post-Term Rent").
The Post-Term Rent shall no longer be due when and if the only remaining
requirement is purely administrative action on the part of the NJDEP or from and
after the commencement date of a lease of the Leased Premises to a third party.
Additionally, if Tenant fails to commence the process required by subsection
32.4 of this Agreement at least 90 days prior to the expiration of the Term then
the Post-Term Rent shall be equal to 150% of the annual rent in effect in the
last month of the Term, prorated on a monthly basis. Such Post-Term Rent shall
no longer be due when the only remaining requirement is purely administrative
action on the part of the NJDEP, evidence of compliance is obtained from the
NJDEP or from and after the commencement date of a lease of the Leased Premises
to a third party.
33. WAIVER OF JURY TRIAL AND ARBITRATION.
The parties hereby waive any right they might otherwise have to a trial by jury
in connection with any dispute arising out of or in connection with this
Agreement or the use and occupancy of the Leased Premises; and they hereby
consent to arbitration of any such dispute in Somerset County, New Jersey, in
accordance with the rules for commercial arbitration of the American Arbitration
Association or successor organization, except that the Landlord, in its sole
discretion, may, with respect to any dispute involving either (i) the Landlord's
right to re-enter and re-take possession of the Leased Premises or (ii) the
determination of money damages following the occurrence of an Event of Default
under this Agreement, elect to pursue any of or all its rights in any court of
competent jurisdiction. Judgment upon any arbitration award may be entered in
any court of competent jurisdiction.
34. SEVERABILITY.
In the event that any provision of this Agreement, or the application of any
provision in any instance, shall be conclusively determined by a court of
competent jurisdiction to be illegal, invalid or otherwise unenforceable, such
determination shall not affect the validity or enforceability of the balance of
this Agreement.
35. NOTICES.
All notices contemplated by, permitted or required by this Agreement shall be in
writing. All notices required by this Agreement shall be personally delivered or
forwarded by recognized overnight carrier or by certified mail-return receipt
requested, addressed to the intended party at its address first set forth above
or, in the case of notices to the Tenant during the Term or any other period
during which the Tenant shall be in possession of the Leased Premises, at the
Leased Premises. All notices required under this Agreement shall be deemed given
(i) upon delivery by overnight carrier; (ii) upon deposit, properly addressed
and postage prepaid, in a postal depository if delivery is by certified mail; or
(iii) upon personal
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delivery to the intended party, regardless of whether delivery shall be refused.
Either party, by a notice served in accordance with the foregoing provisions,
may change the address to which notices shall be sent. Notices given by an
attorney for a party shall be deemed to be notices given by the party.
36. CAPTIONS.
Captions have been inserted at the beginning of each section of this Agreement
for convenience of reference only and such captions shall not affect the
construction or interpretation of any such section of this Agreement.
37. COUNTERPARTS.
This Agreement may be executed in more than one counterpart, each of which shall
constitute an original of this Agreement but all of which, taken together, shall
constitute one and the same Agreement.
38. APPLICABLE LAW.
This Agreement and the obligations of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of New Jersey.
39. EXCLUSIVE BENEFIT.
Except as may be otherwise specifically set forth in this Agreement, this
Agreement is made exclusively for the benefit of the parties hereto and their
permitted assignees and no one else shall be entitled to any right, remedy or
claim by reason of any provision of this Agreement.
40. SUCCESSORS.
This Agreement shall be binding upon the parties hereto and their respective
successors and assigns.
41. AMENDMENTS.
This Agreement contains the entire agreement of the parties hereto, subsumes all
prior discussions and negotiations and, except as may otherwise be specifically
set forth in this Agreement, this Agreement may not be amended or otherwise
modified except by a writing signed by all the parties to this Agreement.
42. WAIVER.
Except as may otherwise be specifically set forth in this Agreement, the failure
of any party at any time or times to require performance of any provision of
this Agreement shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any condition, or of the breach of any term,
covenant, representation or warranty set forth in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach, or
as a waiver of any other condition or of the breach of any other term, covenant,
representation or warranty set forth in this Agreement. The Landlord's
acceptance of, or endorsement on, any partial payment of Rent or any late
payment of Rent from the Tenant shall not operate as a waiver of the Landlord's
right to the balance of the Rent due on a timely basis regardless of any writing
to the contrary on, or accompanying, the Tenant's partial payment or the
Landlord's putative acquiescence therein.
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43. COURSE OF PERFORMANCE.
No course of dealing or performance by the parties, or any of them, shall be
admissible for the purpose of obtaining an interpretation or construction of
this Agreement at variance with the express language of the Agreement itself.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
LANDLORD:
HOCROFT ASSOCIATES
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxx, Vice President
S/K Hocroft Corp.
TENANT:
SKYE MULTIMEDIA, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Xxxx Xxxxxxx, President
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EXHIBIT A - LEASED PREMISES FLOOR SPACE DIAGRAM
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EXHIBIT B - PROPERTY DESCRIPTION
0000 XX Xxxxxxx 00
Xxx 0X, Xxxxx 0000
Xxxxxxxxxxx, XX
All that certain tract or parcel of land and premises situate, lying and being
in the Township of Bridgewater, County of Somerset and State of New Jersey,
being more particularly described as follows:
BEGINNING at a point in the northerly R.O.W. line of U.S. Route 22 being the
intersection of said northerly R.O.W. line with the center line of Xxxxxx Road
and from said beginning point running;
1. Along the northerly X.X.X. xxxx xx X.X. Xxxxx 00 Xxxxx 00 degrees 51
minutes 30 seconds West a distance of three hundred and twenty (320.0')
feet to a point in said northerly R.O.W. line; thence
2. North 10 degrees 08 minutes 30 seconds East along the easterly line of Xxx
0, Xxxxx 0000, as shown on the Tax Map of Bridgewater Township, a distance
of three hundred eleven and twenty-nine hundredths (311.29') feet to a
point in the southerly line of Interstate Route 287; thence
3. Along said Xxxxxxxxxx Xxxxx 000 Xxxxx 00 degrees 18 minutes 20 seconds
East, a distance of three hundred sixty nine and fifty-one hundredths
(369.51') feet to a point; thence
4. South 28 degrees 10 minutes 0 seconds West, a distance of one hundred eight
and forty-one hundredths (108.41') feet to a point; thence
5. South 14 degrees 42 minutes 30 seconds West, a distance of one hundred
ninety eight and eighty-three hundredths (198.83') feet to the point and
place of beginning.
Being known as Xxx 0X, Xxxxx 0000, as shown on the Tax Map of Bridgewater
Township, Somerset County, New Jersey.
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EXHIBIT C - WORK LETTER
The work, if any, to be performed by Landlord is set forth in Section 5 of this
Agreement.
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EXHIBIT D - BUILDING RULES AND REGULATIONS
The following are the Building Rules and Regulations adopted in accordance with
subsection 7.2.3 of the Agreement of which this exhibit is a part; and the
Tenant and the Tenant's employees, other agents and Guests shall comply with
these Building Rules and Regulations:
1. The sidewalks, driveways, entrances, passages, courts, lobby, esplanade
areas, plazas, elevators, vestibules, stairways, corridors, halls and other
Common Facilities shall not be obstructed or encumbered or used for any purpose
other than ingress and egress to and from the Leased Premises. Landlord, in its
discretion, may tow any vehicle left in the Common Facilities overnight. The
Tenant shall not permit or suffer any of its employees, other agents or Guests
to congregate in any of the said areas. No door mat of any kind whatsoever shall
be placed or left in any public hall or outside any entry door of the Leased
Premises.
2. No awnings or other projections shall be attached to the outside walls of the
Building. No curtains, drapes, blinds, shades or screens shall be attached to,
hung in or used in connection with any window or door of the Leased Premises
without the prior written consent of Landlord. If such consent is given, such
curtains, drapes, blinds, shades or screens shall be of a quality, type, design
and color, and attached in the manner, approved by Landlord.
3. Except as otherwise specifically provided in subsection 18.1 of the
Agreement, no sign, insignia, advertisement, object, notice or other lettering
shall be exhibited, inscribed, painted or affixed so as to be visible from
outside the Leased Premises or the Building. In the event of the violation of
the foregoing by the Tenant, the Landlord may remove same without any liability
and may charge the expense incurred in such removal to the Tenant.
4. The sashes, doors, skylights, windows, and doors that reflect or admit light
and air into the halls, passageways or other public places in the Building shall
not be covered or obstructed and no bottles, parcels or other articles shall be
placed on the window xxxxx.
5. No showcase or other articles shall be placed in front of or affixed to any
part of the Building or the Common Facilities.
6. The lavatories, water and wash closets and other plumbing fixtures shall not
be used for any purposes other than those for which they were designed and
constructed, and no sweepings, rubbish, rags, acids or other substances shall be
thrown or deposited therein. All damages resulting from any misuse thereof shall
be repaired at the expense of the Tenant that permitted or suffered the
violation hereof by the Tenant, the Tenant's employees, other agents or Guests.
7. The Tenant shall not xxxx, paint, drill into or in any way deface any part of
the Leased Premises, the Building, the Common Facilities or the Property. No
boring, cutting or stringing of wires shall be permitted, except with the prior
written consent of the Landlord, and as the Landlord may direct. Linoleum and
other resilient floor coverings shall be laid so that the same shall not come in
direct contact with the floor of the Leased Premises; and if linoleum or other
resilient floor coverings are desired, an interlining of builder's deadening
felt shall be first affixed to the floor by a paste or other material that is,
and will remain, soluble in water. The use of cement or other adhesive material
that either is not, or will not remain, soluble in water is prohibited.
8. No bicycles, vehicles, animals, reptiles, fish or birds of any kind shall be
brought into or kept in or about the Leased Premises.
9. No noise including, without limiting the generality of the foregoing, music
or the playing of
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musical instruments, recordings, radio or television which, in the reasonable
judgment of Landlord, might disturb tenants of Other Leased Premises shall be
made or permitted by the Tenant. Nothing shall be done or permitted in the
Leased Premises by the Tenant which would impair or interfere with the use or
enjoyment of Other Leased Premises by any tenant thereof. Nothing shall be
thrown out of the doors, windows or skylights or down the passageways of the
Building.
10. The Tenant shall not manufacture any commodity, or prepare or dispense any
foods or beverages, tobacco, flowers or other commodities or articles without
the prior written consent of the Landlord.
11. The Building has a Grand Master Key which enables the Landlord and its
agents, employees and contractors to enter the Leased Premises. Tenant entry
locks and additional locks and bolts of any kind which are not be operable by
the Grand Master Key for the Building shall not be installed in any of the doors
or windows, nor shall any changes be made in any locks or the mechanisms thereof
which shall make such locks inoperable by the Grand Master Key. If Tenant fails
to comply with these restrictions, any cost incurred by Landlord in changing
locks, securing new or additional keys, passes or duplicates or for other
services of a locksmith shall be borne by Tenant. Duplicates of keys and passes
distributed to the Tenant by the Landlord shall not be made. Additional keys for
the Leased Premises and any lavatories (where applicable) shall be procured only
from Landlord who may make a reasonable charge therefore.
Where so equipped, the Building also may have electronic card key
access which consists of an electronically readable key and a reader at or near
the entry and/or rear doors. Tenant will be issued two (2) card keys and may
purchase additional keys from the Landlord at a cost of $17.50 per key. Only the
Landlord may supply keys to the electronic card readers. The Tenant shall
maintain an updated, current list of authorized key holders and provide a copy
of the list to Landlord. Tenant shall co-operate with Landlord when inquiry is
made as to the current list of authorized key holders. Any requests for changes,
alterations, deletions or substitutions of existing keys shall be done in
writing, by fax or by e-mail to the Landlord. Landlord will edit its master list
and remove access rights for any keyholders whose authorization is terminated or
whose keys are unaccounted for within ten (10) business days of receipt of
notification. Tenant shall promptly notify Landlord of the theft, loss or
disappearance of any key or the termination of authorization for any key holder.
If the key is not returned to Landlord, Tenant shall bear the current cost for
the replacement thereof.
Where applicable, a mailbox and two (2) mail box keys are supplied to
the mail boxes outside the Building. Although the boxes and keys are the
property of the Landlord, the Landlord is not responsible for the arrangement of
delivery of mail or the contents of the box once the keys have been delivered to
the Tenant. The Tenant is advised that the local postmaster retains a master key
for the box. Tenant may purchase additional keys from the Landlord at a cost of
$17.50 per key.
12. All deliveries and removals, and the carrying in or out of any safes,
freight, furniture, packages, boxes, crates or any other object or matter of any
description shall take place during such hours, in such manner and in such
elevators and passageways as the Landlord may determine from time to time. The
Landlord reserves the right to inspect all objects and matter being brought into
the Building or the Common Facilities and to exclude from the Building and the
Common Facilities all objects and matter that violates any of these Building
Rules and Regulations or that are contraband. The Landlord may (but shall not be
obligated to) require any person leaving the Building or the Common Facilities
with any package or object or matter from the Leased Premises to establish his
authority from the Tenant to do so. The establishment and enforcement of such a
requirement shall not impose any responsibility on the Landlord for the
protection of the Tenant against the removal of property from the Leased
Premises. The Landlord shall not be liable to the Tenant for damages or loss
arising from the admission, exclusion or ejection of any person to or from the
Leased Premises or the Building or the Common Facilities under this rule.
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13. The Tenant shall not place any object in any portion of the Building that is
in excess of the safe carrying or designed load capacity of the structure.
14. The Landlord shall have the right to prohibit any advertising or display of
any identifying sign by the Tenant which in the Landlord's judgment tends to
impair the reputation of the Building or its desirability; and, on written
notice from the Landlord, the Tenant shall refrain from or discontinue such
advertising or display of such identifying sign.
15. The Landlord reserves the right to exclude from the Building and the Common
Facilities during hours other than Regular Business Hours all persons who do not
present a pass thereto signed by both the Landlord and the Tenant. All persons
entering or leaving the Building or the Common Facilities during hours other
than Regular Business may be required to sign a register. The Landlord will
furnish passes to persons for whom the Tenant requests same in writing. The
establishment and enforcement of such a requirement shall not impose any
responsibility on the Landlord for the protection of the Tenant against
unauthorized entry of persons.
16. The Tenant, before closing and leaving the Leased Premises at any time shall
see that all lights and appliances generating heat (other than the heating
system) are turned off. All entrance doors to the Leased Premises shall be left
locked by the Tenant when the Leased Premises are not in use. At any time when
the Building or the Common Facilities are locked during hours other than Regular
Business Hours, the Building and the Common Facilities locks shall not be
defeated by any means, such as by leaving a door ajar.
17. No person shall go upon the roof of the Building without the prior written
consent of the Landlord.
18. Any requirements of the Tenant may be attended to only upon application at
the office of the Building. The Landlord and its agents shall not perform any
work or do any work or do anything outside of the Landlord's obligations under
the Agreement except upon special instructions from the Landlord on terms
acceptable to the Landlord and the Tenant.
19. Canvassing, soliciting and peddling in the Building and the Common
Facilities are prohibited and the Tenant shall cooperate to prevent same.
20. There shall not be used in any space, or in the public halls or other Common
Facilities of the Building, in connection with the moving or delivery or receipt
of safes, freight, furniture, packages, boxes, crates, paper, office material,
or any other matter or thing, any hand trucks or dollies except those equipped
with rubber tires, side guards and such other safeguards as the Landlord shall
require. No hand trucks shall be used in passenger elevators, and no passenger
elevators shall be used for the moving, delivery or receipt of the
aforementioned articles. In connection with moving in or out any furniture,
furnishings, equipment, heavy articles and heavy packages, the Tenant shall take
such precautions as may be necessary to prevent excessive wear and tear in the
Building's Common Facilities and the Leased Premises including, without limiting
the generality of the foregoing, floor and wall treatments.
21. The Tenant shall not cause or permit any odors of cooking or other processes
or any unusual or objectionable odors to emanate from the Leased Premises which
might constitute a Nuisance. No cooking shall be done in the Leased Premises
other than as specifically permitted in the Agreement.
22. The Landlord reserves the right not to enforce any Building Rule or
Regulation against any tenants of Other Leased Premises. The Landlord reserves
the right to rescind, amend or waive any Building Rule and Regulation when, in
the Landlord's reasonable judgment, it appears necessary or desirable for the
reputation, safety, care or appearance of the Building or the preservation of
good order therein or the
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operation of the Building or the comfort of tenants or others in the Building.
No rescission, amendment or waiver of any Building Rule and Regulation in favor
of one tenant shall operate as a rescission, amendment or waiver in favor of any
other tenant.
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EXHIBIT E - DEFINITIONS AND INDEX OF DEFINITIONS
In accordance with section 1 of the Agreement of which this exhibit is a part,
throughout the Agreement the following terms and phrases shall have the meanings
set forth or referred to below:
1. "Additional Rent" means all amounts, other than Basic Rent and any Security
Deposit, required to be paid by the Tenant to the Landlord in accordance
with this Agreement.
2. "Agreement" means this Lease and Lease Agreement (including exhibits), as
it may have been amended.
3. "Annual Amortized Capital Expenditure" means the payment amount determined
as an annuity in arrears using the cost incurred by the Landlord for any
Capital Expenditure as the present value, the number of years of its useful
life (not exceeding 10 years) selected by the Landlord in accordance with
generally applied real estate accounting practice as the number of periods
and the Base Rate in effect when the respective improvement is first placed
into service plus two additional percentage points as the annual rate of
interest.
4. "Base Rate" means the prime commercial lending rate per year as announced
from time to time by Bank of America at its principal office.
5. "Base Year" means the full calendar year 2005 with respect to Operational
Expenses and Taxes.
6. "Base Year Operational Expenses" means Operational Expenses incurred by the
Landlord during the Base Year as defined in subsection 10.2 of this
Agreement.
7. "Base Year Taxes" means the product of the final assessed value, as the
same may subsequently be adjusted in any appeal of the tax assessor's
valuation, of the Property, the Building and any other improvements on the
Property in the Base Year and the Municipality's lowest tax rate for office
buildings and the property on which they stand in effect during the Base
Year.
8. "Basic Rent" is defined in subsection 3.2 of this Agreement.
9. "Building" means the office building erected on the Property which is
commonly known as 0000 Xxxxx 00, Xxxxxxxxxxx, Xxx Xxxxxx, as it may, in the
Landlord's sole discretion, be increased, decreased, modified, altered or
otherwise changed from time to time before, during or after the Term. As
the Building is presently constructed it is agreed to contain 21,198 gross
rentable square feet of floor space.
10. "Capital Expenditure" is defined in subsection 10.3 of this Agreement.
11. "Commencement Date" shall be September 1, 2005.
12. "Common Facilities" means the areas, facilities and improvements provided
by the Landlord in the Building (except the Leased Premises and the Other
Leased Premises) and on or about the Property, including, without limiting
the generality of the foregoing, the Parking Facilities and access roads
thereto, for non-exclusive use by the Tenant in accordance with subsection
2.2 of this Agreement, as they may, in the Landlord's sole discretion, be
increased, decreased, modified, altered or otherwise changed from time to
time before, during or after the Term, and subject to rights which may be
granted to the major tenant to utilize the lobby as a common reception
area.
13. "Common Walls" means those walls which separate the Leased Premises from
Other Leased Premises.
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14. "Election Right" is defined in subsection 21.2 of this Agreement.
15. "Electric Charges" means all the supplying utility's charges for, or in
connection with, furnishing electricity including charges determined by
actual usage, any seasonal adjustments, demand charges, energy charges,
energy adjustment charges and any other charges, howsoever denominated, of
the supplying utility, including sales and excise taxes and the like.
16. "Environmental Laws" is defined in subsection 7.2.8 (ii) of this Agreement.
17. "Event of Default" is defined in section 22 of this Agreement.
18. "Expiring Term" means, when used in the context of any Option to Renew, the
Term as it is then scheduled to expire (immediately prior to exercise of
the next available Option to Renew).
19. The Tenant's "Guests" shall mean the Tenant's licensees, invitees and all
others in, on or about the Leased Premises, the Building, the Common
Facilities or the Property, either at the Tenant's express or implied
request or invitation or for the purpose of soliciting or visiting the
Tenant.
20. "Hazardous Substance" is defined in subsection 7.2.8 (ii) of this
Agreement.
21. A "History of Recurring Events of Default" means the occurrence of two or
more Events of Default (whether or not cured by the Tenant) in any period
of 12 months.
22. "Holdover Damages" is defined in subsection 23.4 of this Agreement.
23. "Index" means the "all items" index figure for the New York Northeastern
New Jersey average of the Consumer Price Index for all urban wage earners
and clerical workers which uses a base period of 1982-84=100, published by
the United States Department of Labor, so long as it continues to be
published. If the Index is not published for a period of three consecutive
months, or if its base period is changed, the term "Index" shall mean that
index, as nearly equivalent in purpose, function and coverage as
practicable to the original Index, which the Landlord shall have designated
by notice to the Tenant.
24. "Initial Term" means the period so designated in subsection 4.1 of this
Agreement.
25. "Initial Year" means the first 12 full calendar months of the Initial Term.
26. "Landlord" means the person so designated at the beginning of this
Agreement and those successors to the Landlord's interest in the Property
and/or the Landlord's rights and obligations under this Agreement
contemplated by section 26 of this Agreement.
27. "Leased Premises" means that portion of the interior of the Building (as
viewed from the interior of the Leased Premises) bounded by the interior
sides of the unfinished floor and the finished ceiling on the floor (as the
floors have been designated by the Landlord) of the Building, the centers
of all Common Walls and the exterior sides of all walls other than Common
Walls, the outline of which floor space is designated on the diagram set
forth in Exhibit A attached hereto, which portion contains 2,320 square
feet of gross rentable floor space.
28. "Legal Holidays" means New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
29. "Market Rental Rate" means, at the time of reference, the gross rentable
floor space of the Leased
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Premises multiplied by the greater of: (a) that annual rate of Basic Rent
per square foot of gross rentable floor space which is then being quoted by
the Landlord for comparable Other Leased Premises (or would then be quoted
if comparable Other Leased Premises were then available) or (b) that annual
rate of Basic Rent per square foot of gross rentable floor space in effect
during the Expiring Term.
30. "Municipality" means Bridgewater, New Jersey, or any successor municipality
with jurisdiction over the Property.
31. "No Pass Through Period" means, in the context of Operational Expenses and
Taxes, the period beginning on the Commencement Date and ending on the day
prior to the first anniversary of the Commencement Date.
32. "Nuisance" means any condition or occurrence which unreasonably or
materially interferes with the authorized use and enjoyment of the Other
Leased Premises and the Common Facilities by any tenant of Other Leased
Premises or by any person authorized to use any Other Leased Premises or
Common Facilities.
33. "Operational Expenses" is defined in subsection 10.2 of this Agreement.
34. "Option to Renew" is defined in subsection 6.1 of this Agreement.
35. "Other Leased Premises" means all premises within the Building, with the
exception of the Leased Premises, that are, or are available to be, leased
to tenants or prospective tenants, respectively.
36. "Parking Facilities" means the parking area adjacent to the Building, which
parking area is provided as Common Facilities.
37. "Person" includes an individual, a corporation, a partnership, a trust, an
estate, an unincorporated group of persons and any group of persons.
38. "Post-Term Rent" is defined in subsection 32.5 of this Agreement.
39. "Property" means the parcel of land, as it may, in the Landlord's sole
discretion, be increased, decreased, modified, altered or otherwise changed
from time to time before, during or after the Term, on which the Building
is erected. As the Property is presently constituted, it is more
particularly described in Exhibit B attached hereto.
40. "Regular Business Hours" means 8:00 A.M. to 6:00 P.M., Monday through
Friday, except on Legal Holidays.
41. "Re-Leasing Damages" is defined in subsection 23.3 of this Agreement.
42. "Renewal Term" means, at the time of reference, any portion of the Term,
other than the Initial Term, as to which the Tenant has properly exercised
an Option to Renew which Option to Renew has not been rescinded in
accordance with subsection 6.2 of this Agreement.
43. "Rent" means Basic Rent and Additional Rent.
44. "Security Deposit" is designated in section 29 of this Agreement.
45. "Taxes" means, in any calendar year, the aggregate amount of real property
taxes, assessments and
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sewer rents, rates and charges, state and local taxes, transit taxes and
every other governmental charge, whether general or special, ordinary or
extraordinary (except corporate franchise taxes and taxes imposed on, or
computed as a function of, net income or net profits from all sources and
except taxes charged, assessed or levied exclusively on the Leased Premises
or arising exclusively from the Tenant's occupancy of the Leased Premises)
charged, assessed or levied by any taxing authority with respect to the
Property, the Building, the Common Facilities and any other improvements on
the Property, less any refunds or rebates (net of expenses incurred in
obtaining any such refunds or rebates) of Taxes actually received by the
Landlord during such calendar year with respect to any period during the
Term for the benefit of the Tenant, tenants of Other Leased Premises and
the Landlord. If during the Term there shall be a change in the means or
methods of taxing real property generally in effect at the beginning of the
Term and another type of tax or method of taxation should be substituted in
whole or in part for, or in lieu of, Taxes, the amounts calculated under
such other types of tax or by such other methods of taxation shall also be
deemed to be Taxes. Until such time as the actual amount of Taxes for any
calendar year becomes known, the amount thereof shall be the Landlord's
estimate of Taxes for that calendar year.
46. "Tenant" means the person so designated at the beginning of this Agreement.
47. "Tenant Electric Charges" means (a) during Regular Business Hours, Electric
Charges attributable to the Tenant's use of electricity in the Leased
Premises for purposes other than heating, ventilation and air conditioning
provided to the Leased Premises by the Landlord in accordance with
subsection 8.1.5 of this Agreement and (b) during other than Regular
Business Hours, a charge at the rate of $50.00 per hour or partial hour of
use plus Electric Charges attributable to the Tenant's use of electricity
in the Leased Premises for all purposes including, without limiting the
generality of the foregoing, heating, ventilation and air conditioning.
48. "Tenant's Share" of any amount means 11%.
49. "Term" means the Initial Term plus, at the time of reference, any Renewal
Term.
50. "Termination Damages" is defined in subsection 23.2 of this Agreement.
51. "Utilities Expenses" means Electric Charges (other than Tenant Electric
Charges) and all charges for any other fuel that may be used in providing
electricity and services powered by electricity that the Landlord provides
in accordance with section 8 of this Agreement to the Building, the Leased
Premises, Other Leased Premises, the Common Facilities and the Property,
including sales and excise taxes and the like.
52. "Wire Restoration Work" is defined in subsection 21.2.2 of this Agreement.
53. "Wiring" is defined in subsection 21.2.1 of this Agreement.
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