Exhibit 10.20
COMMERCIAL LEASE AGREEMENT
This Commercial Lease Agreement ("Lease") is made and effective November 1, 2000
and between Jersey State Properties, a New Jersey limited liability company
("Landlord") and Xxxxxx Communications, Inc., a Delaware corporation ("Tenant").
R E C I T A L S:
A. Landlord is the owner of land and improvements commonly known as the Jersey
State Properties Building (the "Building") and located at 0 Xxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Property"). The Property is legally described
as follows: Block 29 of Lot 201.3, Xxxxx Township, New Jersey. The Building
contains approximately 15,840 square feet of rentable space.
B. Landlord desires to lease to Tenant approximately 12,800 square feet of the
Building (the "Leased Premises"). Approximately 10,400 square feet of the Leased
Premises shall be used by the Tenant as office space (the "Office Space") and
approximately 2,400 square of the Leased Premises shall be used by the Tenant as
warehouse space (the "Warehouse Space"). A depiction of the Building and the
Leased Premises (including illustrations of the locations of the Office Space
and the Warehouse Space) is attached to this Lease as Exhibit "A", which Exhibit
"A" is hereby incorporated into this Lease by this reference.
C. Tenant desires to lease the Leased Premises from Landlord in accordance with
the terms, conditions and provisions herein set forth.
NOW, THEREFORE, incorporating and in consideration of the foregoing recitals,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, Landlord and Tenant hereby
agree as follows:
A G R E E M E N T:
1. Term; Extension Term.
A. Initial Term. Landlord hereby leases the Leased Premises to Tenant, and
Tenant hereby leases the Leased Premises from Landlord, for an "Initial Term" of
sixty (60) months, beginning November 1, 2000 (the "Commencement Date") and
ending October 31, 2005 (the "Termination Date").
B. Extension Term. Landlord hereby grants Tenant the option (the "Extension
Option") to extend the Initial Term of the Lease for one additional sixty (60)
month period (the "Extension Term"). Tenant shall exercise such Extension
Option, if at all, by giving Landlord written notice of Tenant's election to so
exercise the Extension Option not less than ninety (90) days prior to the
expiration of the Initial Term. The rent to be paid by the Tenant for the Leased
Premises during the Extension Term (if exercised) is set forth in Section 2
hereinbelow.
2. Base Rental.
A. Initial Term. During the Initial Term, Tenant shall pay to Landlord the
Annual Base Rent set forth hereinbelow for the Office Space and the Warehouse
Space (as applicable). Payments of Annual Base Rent shall be due in advance on
the first day of each calendar month during the Initial Term (and the Extension
Term, if applicable) to Landlord at Jersey State Properties, 0 Xxxxxxxx Xxxx.,
Xxxxxxxx, Xxx Xxxxxx 00000 or at such other place designated by written notice
from Landlord or Tenant. Payments of Annual Base Rent for any partial calendar
months shall be prorated on a daily basis.
Office Space (10,400 sq. ft.)
Months Per Sq. Ft. Annual Monthly
------ ----------- ------ -------
Months 1-12 $ 7.85 $ 81,640.00 $ 6,803.33
Months 13-24 $10.00 $104,000.00 $ 8,666.67
Months 25-36 $12.00 $124,800.00 $10,400.00
Months 37-48 $14.00 $145,600.00 $12,133.33
Months 49-60 $16.00 $166,400.00 $13,866.67
Warehouse Space (2,400 sq. ft.)
Months Per Sq. Ft. Annual Monthly
------ ----------- ------ -------
Months 1-12 $6.00 $14,400.00 $1,200.00
Office Space (10,400 sq. ft.)
Months Per Sq. Ft. Annual Monthly
------ ----------- ------ -------
Months 1-12 $ 7.85 $ 81,640.00 $ 6,803.33
Months 13-24 $10.00 $104,000.00 $ 8,666.67
Months 25-36 $12.00 $124,800.00 $10,400.00
Months 37-48 $14.00 $145,600.00 $12,133.33
Months 49-60 $16.00 $166,400.00 $13,866.67
Warehouse Space (2,400 sq. ft.)
Months Per Sq. Ft. Annual Monthly
------ ----------- ------ -------
Months 1-12 $6.00 $14,400.00 $1,200.00
Months 13-24 $6.00 $14,400.00 $1,200.00
Months 25-36 $6.00 $14,400.00 $1,200.00
Months 37-48 $6.00 $14,400.00 $1,200.00
Months 49-60 $6.00 $14,400.00 $1,200.00
B. Extension Term (if applicable). The Annual Base Rental for the Extension Term
(if the Extension Option is exercised) shall be ninety percent (90%) of the Fair
Market Rental Rate of the Leased Premises for the Extension Term. The Fair
Market Rental Rate of the Leased Premises shall mean the Annual Base Rent at
which tenants, as of the commencement of the Extension Term, would pay to lease
space comparable in size, location and quality to the Leased Premises for a
comparable term, taking into consideration all concessions and inducements
generally being granted at such time including tenant improvements or
improvement allowances provided in connection therewith (taking into account the
age, quantity and layout of the existing improvements in the Leased Premises).
Upon Tenant's exercise of the Extension Option, the Landlord and Tenant shall
work together in good faith to mutually agree on the Fair Market Rental Rate for
the Leased Premises during the Extension Term. If the Landlord and the Tenant
are unable to agree on the Fair Market Rental Rate for the Leased Premises for
the Extension Term within fifteen (15) business days (the "Outside Date") after
Landlord's receipt of Tenant's notice of its election to exercise the Extension
Option, then each party shall submit to the other party a separate written
determination of the Fair Market Rental Rate within five (5) business days after
the Outside Date, and such determinations shall be submitted to arbitration in
accordance with the provisions of Subsections 2B(i) through 2B(v) hereinbelow.
The failure of either Tenant or Landlord to submit a written determination of
the Fair Market Rental Rate within such five (5) business day period shall
conclusively be deemed to be such party's approval of the Fair Market Rental
Rate submitted within such five (5) business day period by the other party.
i. Landlord and Tenant shall each appoint one (1) appraiser who shall by
profession be a real estate appraiser who shall have been active over the five
(5) year period ending on the date of such appointment in the appraisal of
office buildings/warehouse space in the general vicinity of the Building. The
determination of the appraisers shall be limited solely to the issue of whether
Landlord's or Tenant's submitted Fair Market Rental Rate is the closer to the
actual Fair Market Rental Rate as determined by the appraisers, taking into
account the requirements with respect thereto set forth in Section 2 above. Each
such appraiser shall be appointed within ten (10) business days after the
Outside Date.
ii. The two (2) appraisers so appointed shall, within fifteen (15) days of
the date of the appointment of the last appointed appraiser, agree upon and
appoint a third appraiser who shall be qualified under the same criteria set
forth hereinabove for qualification of the initial two (2) appraisers. The three
(3) appraisers shall, within thirty (30) days of the appointment of the third
appraiser, reach a decision as to which of Landlord's or Tenant's submitted Fair
Market Rental Rate is closer to the actual Fair Market Rental Rate and shall
select such closer determination (but not any other number) as the Fair Market
Rental Rate and notify Landlord and Tenant thereof. The decision of the majority
of the three (3) appraisers shall be binding upon Landlord and Tenant.
iii. If either Landlord or Tenant fails to appoint an appraiser within the
time period specified hereinabove, the appraiser appointed by one of them shall
reach a decision, notify Landlord and Tenant thereof, and such appraiser's
decision shall be binding upon Landlord and Tenant.
iv. If the two (2) appraisers fail to agree upon and appoint a third
appraiser, a third appraiser shall be appointed by the senior judge of the trial
court in the county in which the Building is located.
v. The party whose Fair Market Rental Rate is not selected shall pay the
fees and expenses of the entire appraisal process and all of the appraisers.
3. Use
Tenant may use the Leased Premises for all lawful activities; provided, however,
that Tenant may not use the Leased Premises to store, manufacture or sell any
inherently dangerous substance, chemical, thing or device.
4. Sublease and Assignment.
Tenant shall have the right, without Landlord's consent, to assign this Lease or
sublease any or all of the Leased Premises to any other entity; provided, that,
Tenant shall be required to notify the Landlord of any such assignment and/or
sublease, and, provided, further, that any such assignment and/or sublease shall
not release the Tenant from any of its obligations under this Lease without
Landlord's consent.
5. Condition of Leased Premises; Repairs and Maintenance of the Leased Premises.
A. Condition of Leased Premises. Landlord warrants and covenants to Tenant that
the existing plumbing, electrical systems, fire sprinkler system, lighting, air
conditioning and heating systems and loading doors, if any, in the Leased
Premises, are in good operating condition on the Commencement Date. If Tenant
determines that such warranty and covenant is/was untrue, Landlord shall,
promptly after receipt of written notice from Tenant setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Landlord's expense. Landlord further warrants and covenants that any
improvements on or in the Leased Premises comply with all applicable covenants
or restrictions of record and applicable building codes, regulations and
ordinances in effect on the Commencement Date. In addition, Landlord warrants to
Tenant, that except as provided in writing to Tenant prior to the Commencement
Date, Landlord has not received any notice from any governmental agency that a
violation or violations of applicable building codes, regulations, or ordinances
exist with regard to the Leased Premises as of the Commencement Date. If the
Leased Premises do not comply with said warranties, Landlord shall, promptly
after receipt of written notice from Tenant setting forth with specificity the
nature and extent of such non-compliance, take such action, at Landlord's
expense, as may be reasonable or appropriate to rectify the non-compliance.
B. Landlord's Obligation. Landlord shall maintain in good condition and repair
the foundations, roofs and exterior surfaces of walls of the Building (including
doors, door frames, door checks, windows and window frames), and all utility
facilities serving the Property; provided, however, to the extent any repairs or
replacements are necessitated by the gross negligence or willful acts of Tenant
or caused by alterations, additions or improvements made by Tenant, the cost of
same shall be the responsibility of Tenant. Landlord shall also be responsible
for the replacement, as necessary, of the heating, ventilating and air
conditioning equipment and any elements, components or portions thereof. If
Landlord fails to make repairs or alterations and/or fails to maintain the
Building, the Leased Premises and/or the Property (and such repairs, alteration
and/or repairs are typically those that a Landlord would be required to
complete) after notice from Tenant, Tenant may make such repairs and offset the
cost thereof from the next installment(s) of Annual Base Rental then coming due.
C. Tenant's Obligation. Tenant, at its expense, shall keep the Leased Premises
in such order, condition and repair as when Tenant first occupied the applicable
space. Should Tenant fail to keep the Leased Premises in such
order, condition and repair or otherwise reasonably maintain the Leased Premises
after written notice from Landlord of Tenant's failure to do the same, Landlord
may make any such repairs and/or replacements to the Leased Premises, and Tenant
shall pay to Landlord, the costs incurred by Landlord in the making of such
repairs or replacement.
6. Alterations and Improvements.
Tenant, at Tenant's expense, shall have the right (without the requirement of
obtaining Landlord's consent) to remodel, redecorate, and make non-structural
additions, improvements and replacements of and to all or any part of the Leased
Premises from time to time as Tenant may deem desirable, provided the same are
made in a workmanlike manner and utilizing good quality materials. Tenant shall
have the right to place and install personal property, trade fixtures, equipment
and other temporary installations in and upon the Leased Premises, and fasten
the same to the premises. All personal property, equipment, machinery, trade
fixtures and temporary installations, whether acquired by Tenant at the
commencement of the Lease term or placed or installed on the Leased Premises by
Tenant thereafter, shall remain Tenant's property free and clear of any claim by
Landlord. Tenant shall have the right to remove the same at any time during the
term of this Lease provided that all damage to the Leased Premises caused by
such removal shall be repaired by Tenant at Tenant's expense. Notwithstanding
anything herein to the contrary, Tenant shall not have the right to make
structural modifications to the Leased Premises and/or the Building without
first obtaining the Landlord's consent to such modifications, which consent
shall not be unreasonably withheld, delayed or conditioned.
7. Property Taxes.
Tenant shall pay its portion of all general real estate taxes and installments
of special assessments coming due during the Lease term on the Leased Premises,
and all personal property taxes with respect to Tenant's personal property, if
any, on the Leased Premises.
8. Insurance.
A. Landlord's Insurance. Landlord shall, at all times, from the Commencement
Date through the Termination Date, maintain in effect a policy or policies of
insurance covering the Property (as applicable) and the Building, in an amount
not less than the full replacement cost thereof. Such insurance shall provide
protection against any peril generally included in the classification "Fire and
Extended Coverage" and such other additional insurance as covered in an "all
risks" standard insurance policy. In addition, Landlord shall maintain the
following insurance coverages: (a) general liability insurance in an amount not
less than $3,000,000.00, (b) flood and mudslide insurance in amount equal to one
hundred percent (100%) of the full replacement value of all improvements;
provided that such flood and mudslide insurance shall not be required if the
Property is not situated within an area with a high flood and/or mudslide
hazard, (c) twelve (12) months rent loss or business interruption insurance, and
(d) workers' compensation and all other insurance, if any, of whatsoever
description and in such amounts as may be required by any ordinance, law or
governmental regulation to be carried or maintained by Landlord in connection
with Landlord's operation of the same or the use of the same or in connection
with the construction, demolition, maintenance or repair of the Property or any
part thereof
B. Tenant's Insurance. Tenant, at its sole cost and expense, commencing on the
Commencement Date, shall procure and keep in full force and effect the following
types of insurance, in at least the amounts specified herein: (a) liability
insurance with coverage limits of not less than $2,000,000.00 per occurrence for
bodily injury, personal injury, death and property damage liability per
occurrence, (b) worker's compensation insurance as required by law, (c) twelve
(12) months business interruption or loss of income insurance, and (d) insurance
covering all of Tenant's leasehold improvements, alterations and personal
property from time to time in, on or about the Leased Premises..
C. Policy Forms. All policies of insurance provided for herein shall be issued
by insurance companies with general policy holder's rating of not less than A-
and a financial rating of not less than Class X, as rated in the most current
available "Best's Key Rating Guide", and which are qualified to do business in
the State of New Jersey. All such policies shall name and shall be for the
mutual and joint benefit and protection of Landlord and Tenant as additional
insureds. Executed copies of renewal policies or certificates thereof shall be
delivered to Landlord and Tenant (as the case may be) within 30 days prior to
the expiration of the term of each policy. All policies of insurance delivered
to a party hereunder must contain a provision that the company writing the
policy will give to the other party 30 days' notice
in writing, in advance, of any cancellation or lapse or the effective date of
any reduction in the amounts of insurance. All public liability, property damage
and other casualty policies shall be endorsed to read that such policies are
primary policies.
9. Utilities.
Electricity for the Leased Premises is separately metered to the Leased
Premises. Accordingly, Tenant shall pay all electricity charges on the Leased
Premises during the term of this Lease directly to the utility company providing
electricity to the Leased Premises. Tenant shall not be charged any electricity
charges for the Leased Premises as part of the common area charges and expenses
set forth in Section 16 hereinbelow. Tenant acknowledges that (a) the Office
Space is designed to provide standard office use electrical facilities and
standard office lighting, and (b) the Warehouse Space is designed to provide
standard warehouse use electrical facilities and standard warehouse lighting.
Tenant shall not use any equipment or devices that utilize excessive electrical
energy or which overload the wiring or interfere with electrical services to
other tenants. None of the other utilities (i.e., water, sewer, oil, gas, etc.)
serving the Leased Premises are separately metered to the Leased Premises.
Accordingly, Tenant shall reimburse Landlord for Tenant's pro-rata share of the
costs of such utilities as part of the common area charges and expenses, as
specifically set forth in Section 16 hereinbelow.
10. Signs.
Tenant shall have the right to place on the Leased Premises, at locations
selected by Tenant, any signs, which are permitted by applicable zoning
ordinances and laws. Landlord shall assist and cooperate with Tenant in
obtaining any necessary permission from governmental authorities or adjoining
owners and occupants for Tenant to place or construct the foregoing signs.
Tenant shall repair all damage to the Leased Premises resulting from the removal
of signs installed by Tenant.
11. Entry.
Landlord shall have the right to enter upon the Leased Premises at reasonable
hours to inspect the same, provided Landlord shall (a) provide Tenant with at
least 48 hours prior written notice of Landlord's intent to enter the Leased
Premises (except in the event of an emergency) and (b) not interfere with
Tenant's business in the Leased Premises.
12. Parking.
The Property parking lot currently contains 100 parking spaces. Accordingly,
there are approximately 6.3 parking spaces for each 1,000 rentable square feet
of the Property. Pursuant to this Lease, Tenant will lease approximately 12,800
square feet of space at the Property. Landlord and Tenant hereby agree that
Tenant shall be entitled to use up to 80 of the 100 parking spaces available at
the Property. Landlord shall not decrease the number of available parking spaces
at the Property without Tenant's prior written consent.
13. Indemnities.
Tenant shall defend (unless Landlord waives its right to such defense) indemnify
and protect Landlord from any claim, demand, liability, judgment, award, loss,
damage, expense, charge or cost of any kind or character (including reasonable
attorneys' fees and costs) (hereinafter collectively referred to as "Claims")
actually incurred by Landlord and to the extent caused by (a) the construction,
repair, alteration, improvement, use, occupancy or enjoyment of the Leased
Premises by Tenant, its agents, employees, contracts or invitees, and/or (b) a
breach of Tenant's obligations under this Lease. Landlord shall defend,
indemnify and protect Tenant from and against any and all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses (including
actual attorney fees and costs) to the extent such liabilities, obligations,
damages, penalties, claims, costs, charges and expense are caused by a breach of
Landlord's (and/or its agents, contractors and/or employees) obligations under
the Lease. Tenant and Landlord's obligations under this section shall survive
the expiration or earlier termination of the Lease.
14. Damage and Destruction.
In the event the Leased Premises are damaged or destroyed by fire or other peril
covered by insurance Landlord is required to carry pursuant to the terms of this
Lease, Landlord shall, within thirty (30) days following the casualty, apply for
all necessary permits and approvals to repair, reconstruct and restore
(collectively referred to herein as "Reconstruction") the damaged or destroyed
portion of the Leased Premises. Within a period of sixty (60) days after
obtaining all required permits and approval, Landlord shall commence
Reconstruction of that portion of the Leased Premises damaged or destroyed and
prosecute the same diligently to completion.
If the cost of Reconstruction exceeds the greater of (a) the amount of
Landlord's insurance, or (b) the amount of insurance proceeds Landlord would
have collected if Landlord had complied with its insurance obligations under the
Lease, Landlord may elect to terminate this Lease by giving notice thereof to
Tenant within thirty (30) days following Landlord's good faith determination
that the cost of Reconstruction exceeds Landlord's insurance; provided, however,
Tenant may rescind Landlord's election to so terminate this Lease by agreeing to
pay the difference, in which event this Lease shall not terminate and Landlord
shall diligently prosecute the Reconstruction to completion. Any Reconstruction
to be performed by Landlord shall be performed in a manner so as to minimize
interference with Tenant's business at the Leased Premises. Landlord shall,
subject to the above and the events of Force Majeure, complete such
Reconstruction within 180 days after obtaining all required permits and
approvals for such Reconstruction. If Landlord has not completed the
Reconstruction within such 180 day period (subject to events of Force Majeure)
or if Landlord sooner informs Tenant that Landlord will be unable to complete
the Reconstruction within such period, Tenant shall have the right to terminate
this Lease at the end of such period or within five (5) business days of receipt
of such notice, as the case may be.
In the event the Leased Premises are destroyed or materially damaged by any
casualty not required to be covered under Landlord's insurance, Landlord shall
have the election, and shall within thirty (30) days following the date of such
damage give Tenant written notice of Landlord's election, either (i) to commence
Reconstruction of the Leased Premises and complete the same within 180 days
following the date of such damage, in which event this Lease shall continue in
full force and effect, or (ii) not to perform such Reconstruction of such
portion of the Leased Premises, in which event this Lease shall cease and
terminate not later than sixty (60) days after Landlord's notice of its election
to terminate.
Upon any termination of this Lease under any of the provisions of this Section
14, the parties shall be released thereby without further obligation to the
other party coincident with the surrender of possession of the Leased Premises
to Landlord, expect for its obligations which have theretofore accrued and are
then unpaid.
In the event of Reconstruction as herein provided, then the Base Rent shall be
abated proportionately with the degree to which Tenant's use of the Leased
Premises is impaired, commencing upon the date of the casualty and continuing
until the date the Tenant recommences normal business in the portion of the
Leased Premises affected by the Reconstruction. Tenant shall continue it
operations at the Leased Premises following a partial destruction of the same
if, in Tenant's reasonable discretion, Tenant's operations at the Leased
Premises during any such period can be continued from the standpoint of prudent
business management. If Tenant continues operations, Tenant's obligation to pay
additional rent (calculated based on the reduced square footage actually being
utilized by Tenant) shall remain in full force and effect.
15. Default.
A. Tenant. If Tenant shall fail to pay rent when due to Landlord as herein
provided, and if said failure to pay rent shall continue for fifteen (15) days
after written notice thereof shall have been given to Tenant by Landlord, or if
Tenant shall fail to perform any other material covenants or conditions required
to be kept, observed and performed by Tenant, and such failure shall continue
for thirty (30) days after notice thereof in writing to Tenant by Landlord
without correction thereof then having been commenced and thereafter diligently
prosecuted, Landlord may declare Tenant in default of this Lease. In such
instance, Landlord shall have any and all rights and remedies available to
Landlord, both in law and in equity, including, but not limited to, the right to
terminate the Lease. Landlord shall use reasonable efforts to mitigate its
damages.
B. Landlord. Should Landlord fail to perform any other material covenants or
conditions required to be kept, observed and performed by Landlord under this
Lease, and such failure shall continue for thirty (30) days after
notice thereof in writing to Landlord by Tenant without correction thereof then
having been commenced and thereafter diligently prosecuted, Tenant may declare
Landlord in default of this Lease. In such instance, Tenant shall have any and
all rights and remedies available to Tenant, both in law and in equity,
including, but not limited to (a) the right to correct the default and offset
all costs and expenses incurred by Tenant with respect to the same from the next
installments of Base Rent due hereunder, and (b) the right to terminate the
Lease. Tenant shall use reasonable efforts to mitigate its damages.
16. Common Area and Maintenance Expenses.
A. Expenses Included. Landlord shall keep, or cause to be kept, the common areas
of the Building and the Property in a neat, clean and orderly condition,
properly lighted and landscaped, and shall operate, repair and maintain, as
reasonably necessary, all equipment and facilities thereof. It is understood and
agreed that the term common area expenses shall mean all sums actually expended
(excluding financing costs) for the repair, operation and maintenance of the
following: general repairs; resurfacing; restriping; cleaning; trash removal;
sweeping and janitorial services; repair and maintenance of public toilets,
paving, sidewalks, curbs, common signs, sprinkler systems, planting and
landscaping, lighting and other utilities, directional signs, fire protection,
lighting, storm drainage and other utility systems; snow removal, taxes assessed
on the land comprising the common area; all personal property taxes assessed and
levied on any personal property owned by Landlord for use in the common area;
Landlord's insurance (as required by this Lease); maintenance and operation of
parking lot. In addition, the common area expenses may include an amount payable
to the Landlord for the supervision and maintenance of the common area and for
accounting, bookkeeping and collection of the common area expenses equal to no
more than three percent (3%) of the total of the aforementioned expenses for
each calendar year.
B. Expenses Excluded. Notwithstanding anything to the contrary contained herein,
common area expenses shall not include (a) depreciation of real or personal
property, (b) leasing commissions, advertising expenses and other costs incurred
in leasing space to other tenants; (c) the cost of work, including painting,
decorating and tenant change work which Landlord performs in any tenant space;
(d) the cost of installing, operating and maintaining any specialty services at
the Property; (e) the cost of correcting defects in the construction of the
Building equipment or the cost of complying with Building and fire codes; (f)
salaries of Landlord's employees; (g) the cost of any work or service performed
for any facility other than the Property; (h) the costs of any item for which
the Landlord is entitled to be reimbursed by insurance; (i) the costs of any
repairs, alterations, additions, changes, replacements or other items which
under generally accepted accounting principals, are properly classified as
capital expenditures; (j) insurance premiums to the extent Landlord is
reimbursed therefor; (k) loan fees, charges or interest on debt or amortization
payments on any mortgage; (l) any expenses for repairs or maintenance which are
actually covered by warranties or service contracts; (m) the cost of any HVAC,
janitorial, garage or other service provided to other tenants; (n) penalties or
costs arising from Landlord's violation of laws or breach of contracts with
third parties or resulting from late payments; (o) to the extent that the
operating services are performed by Landlord or by entities affiliated with
Landlord, common area expenses shall not include amounts paid in excess of the
fair market rate at which such services could be obtained from unrelated third
parties; (p) any bad debt loss, rent loss or reserves for bad debt or rent loss;
(q) costs associated with operating the business of the partnership or entity
that constitutes Landlord (as the same is distinguished from the course of
operation of the Property); (r) costs of defending any lawsuits; (s) costs of
selling or financing the Property; (t) legal fees and other costs incurred
resulting from the acts or omissions of Landlord, its agents, contractors or
employees.
C. Payment of Common Area Expenses; Expense Cap. Tenant shall pay its pro-rata
share of Landlord's actual cost of operating and maintaining (in accordance with
the terms and conditions of Sections 16A and 16B hereinabove) the common areas
of the Property. As of the Commencement Date, Tenant's pro-rata share was equal
to 81%. Tenant shall pay to Landlord on the first day of each month, an amount
equal to one/twelfth (1/12) of Tenant's annual pro rata share of common area
expenses. Landlord hereby represents to Tenant that the total common area
expenses for the Property for calendar year 2000 was $44,548.00. Accordingly,
Tenant's pro rata share of the common area expenses for the Property (including
taxes and insurance) for calendar year 2000 (to be prorated from the
Commencement Date) is approximately $36,084.00 ($2.82 per square foot). Landlord
estimates that the common area expenses for the Property for calendar year 2001
will be $53,429.00. Accordingly, Tenant's pro rata share of common area expenses
for calendar year 2001 shall be approximately $43,277.00 ($3.38 per square
foot). Landlord and Tenant agree that on the first (1st) day of each calendar
year after calendar year 2001 during the Initial Term (and the Extension Term,
if applicable), the fee
paid by Tenant to Landlord pursuant to this Section 16 shall be adjusted to
reflect any increase or decrease in the cost to maintain the common areas of the
Property. Notwithstanding the previous sentence, Tenant and Landlord agree that
during any calendar year (after calendar year 2001) during the term of this
Lease and any extension thereof, the fees paid by Tenant under this Section 16
shall not increase by more than four percent (4%) over the common area expenses
(including taxes and insurance) paid by Tenant during the immediately proceeding
calendar year. As noted hereinabove, the common area expenses due in any partial
calendar year shall be prorated. Prior to the commencement of each calendar
year, Landlord shall provide Tenant with an estimate of Tenant's proportionate
share of the common area expenses for the upcoming calendar year. Within ninety
(90) days after the end of each calendar year, Landlord shall provide Tenant
with a statement of actual common area expenses incurred during the previous
calendar year. The statement of common area expenses shall include an
itemization of each type of expense in reasonable detail. In the event Tenant's
proportionate share of the common area expenses is less than the sum actually
paid by Tenant the prior year, Landlord shall apply the excess paid by Tenant to
the next payment of common area expenses owed by Tenant. In the event that
Tenant's proportionate share of the common area expenses is greater than the
sums actually paid by Tenant the prior year, Tenant shall pay such difference to
Landlord within ninety (90) days of receipt of notice of Tenant's shortfall from
Landlord.
17. Condemnation.
If any legally, constituted authority condemns the Building or such part thereof
which shall make the Leased Premises unsuitable for Tenant's operation of its
business in the Leased Premises, this Lease shall cease when the public
authority takes possession, and Landlord and Tenant shall account for rental as
of that date. Such termination shall be without prejudice to the rights of
either party to recover compensation from the condemning authority for any loss
or damage caused by the condemnation. Neither party shall have any rights in or
to any award made to the other by the condemning authority.
18. Subordination; Non-Disturbance; Estoppel Certificate.
Tenant accepts this Lease subject and subordinate to any mortgage or deed of
trust presently existing or hereafter placed upon the Property and to any
renewals, refinancing and extensions thereof, but Tenant agrees that any such
mortgagee shall have the right at any time to subordinate such mortgage, deed of
trust or other lien to this Lease on such terms and subject to such conditions
as such mortgagee may deem appropriate in its discretion. Tenant agrees, within
30 days following written demand therefore, to execute such further instruments
subordinating this Lease or attorning to the holder of any such liens as may be
reasonable and which do not increase Tenant's obligations under the Lease
(provided, however, that any such documents and/or instruments shall be deemed
to be unreasonable if they do not include standard tenant non-disturbance
language). Tenant and Landlord each agree that such party will from time to time
(upon at least fifteen (15) business days' notice from the other party and not
more than one time in any calendar year) upon request by the other party execute
and deliver to such persons as Landlord or Tenant (as the case may be) shall
request a statement in recordable form certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as so modified), stating the dates to which rent and
other charges payable under this Lease have been paid, stating that (to
Tenant's/Landlord's knowledge) the other party is not in default hereunder (or
if such party alleges a default stating the nature of such alleged default) and
further stating such other matters as the requesting party shall reasonably
require.
19. Tenant's Right of First Refusal to Lease Additional Space in the Building.
In the event that any other space ("Available Space") in the Building becomes
available for lease or sublease, Landlord shall give Tenant written notice of
any such availability (the "Availability Notice"). Following receipt of the
Availability Notice, Tenant shall have thirty (30) days to provide Landlord with
written notice of Tenant's election to expand (or not to expand) into the
Additional Space. If Tenant elects to expand into the Additional Space, the term
for such Additional Space shall run concurrently with the Initial Term (and
Extension Term, as applicable) of the Lease. Base Rent for the Additional Space
shall be the lesser of (a) ninety percent (90%) of the fair market rental rate
for the Additional Space (which, if required, shall be determined in accordance
with the procedure outlined in Section 2B hereinabove), or (b) the Base Rent
which Tenant is then-currently paying for other similar space in the Building,
or (c) as otherwise agreed to in writing by Landlord and Tenant (provided, that
neither Landlord not Tenant shall be obligated to agree on any Base Rent
other than as set forth in (a) or (b) hereinabove). Tenant shall be responsible
for all of the same tax, insurance and common area expense costs with respect to
the Additional Space as it is for the Leased Premises. The Additional Space
shall be delivered to Tenant in good operating condition. The expansion of the
Leased Premises to include the Additional Space shall be memorialized in an
amendment to this Lease which contains the approved terms as outlined herein and
other typical terms and conditions (the "Additional Space Lease Amendment"). The
date on which Tenant shall be required to pay rent for the Additional Space
shall be mutually approved by Landlord and Tenant. The Lease Term for the
Additional Space shall expire, unless sooner terminated in accordance with the
Additional Space Lease Amendment, at midnight on the Termination Date of the
Lease (as the same may be extended).
20. Notice.
Any notice required or permitted under this Lease shall be deemed sufficiently
given or served if sent by United States certified mail, return receipt
requested, or overnight courier (with a nationally recognized reputable courier
company), addressed as follows:
If to Landlord to: Jersey State Properties
0 Xxxxxxxx Xxxx., Xxxxxxxx, XX 00000
Attention: Xx. Xxx Xxx Xxxxx
If to Tenant to: Xxxxxx Communications
0 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000
with a copy to: Xxxxxx Communications
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxxx
Landlord and Tenant shall each have the right from time to time to change the
place notice is to be given under this paragraph by written notice thereof to
the other party.
21. Brokers.
Landlord and Tenant each represent to the other that (a) it has not engaged the
services of any real estate broker or agent in connection with this Lease, and
(b) it has not otherwise engaged in any activity which could form the basis for
a claim for a real estate commission, brokerage fee, finder's fee or other
similar charge, in connection with this Lease. Landlord and Tenant each agree to
indemnify, defend and hold the other harmless from and against any claim or
liability, as well as court costs and legal fees, arising out of any breach of
such representation.
22. Waiver.
No waiver of any default of Landlord or Tenant hereunder shall be implied from
any omission to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other
than the default specified in the express waiver and that only for the time and
to the extent therein stated. One or more waivers by Landlord or Tenant shall
not be construed as a waiver of a subsequent breach of the same covenant, term
or condition.
23. Memorandum of Lease.
The parties hereto contemplate that this Lease should not and shall not be filed
for record, but in lieu thereof, at the request of either party, Landlord and
Tenant shall execute a Memorandum of Lease to be recorded for the purpose of
giving record notice of the appropriate provisions of this Lease.
24. Headings.
The headings used in this Lease are for convenience of the parties only and
shall not be considered in interpreting the meaning of any provision of this
Lease.
25. Successors.
The provisions of this Lease shall extend to and be binding upon Landlord and
Tenant and their respective legal representatives, successors and assigns.
26. Consent.
Landlord shall not unreasonably withhold or delay its consent with respect to
any matter for which Landlord's consent is required or desirable under this
Lease.
27. Performance.
If there is a default with respect to any of Landlord's covenants, warranties or
representations under this Lease, and if the default continues more than fifteen
(15) days after notice in writing from Tenant to Landlord specifying the
default, Tenant may, at its option and without affecting any other remedy
hereunder, cure such default and deduct the cost thereof from the next accruing
installment or installments of rent payable hereunder until Tenant shall have
been fully reimbursed for such expenditures, together with interest thereon at a
rate equal to the lessor of twelve percent (12%) per annum or the then highest
lawful rate. If this Lease terminates prior to Tenant's receiving full
reimbursement, Landlord shall pay the unreimbursed balance plus accrued interest
to Tenant on demand.
28. Compliance with Law.
Tenant shall comply with all laws, orders, ordinances and other public
requirements now or hereafter pertaining to Tenant's use of the Leased Premises.
Landlord shall comply with all laws, orders, ordinances and other public
requirements now or hereafter affecting the Leased Premises.
29. Hazardous Substances.
A. Neither Landlord nor Tenant shall cause or permit any "Hazardous Substances"
(as hereinafter defined) to be used, placed, held, located, stored, or disposed
of in the Leased Premises, the Building or the Property or any part thereof;
provided, however, that Tenant shall have the right to use and store in the
Leased Premises those Hazardous Substances which are customarily used in
Tenant's business operations, but only in such reasonable quantities as are
reasonably necessary for Tenant's use of the Leased Premises and only in full
compliance with all applicable laws and regulations. Landlord and Tenant
covenant and agree to obey and comply with at all times and in all respects, at
its sole expense, all applicable laws and regulations concerning the use,
storage, disposal, containment, removal, transportation, or remediation of
Hazardous Substances in the Leased Premises, the Building and the Property.
B. "Hazardous Substances" shall mean and include those substances which are
contained in the list of hazardous substances adopted by the United States
Environmental Protection Agency (EPA), as amended from time to time, or the list
of toxic pollutants designated by Congress or the EPA, as amended from time to
time, or which are regulated by any federal, state or local law, ordinance code,
rule, regulation, order or decree regulating, relating to or imposing liability
(including without limitation, strict liability) or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance, or material, as
now or at any time hereafter in effect (collectively, "Environmental Laws").
C. Tenant hereby agrees to indemnify Landlord and hold Landlord harmless from
and against any and all losses, liabilities, damages, injuries, and expenses
(including reasonable attorneys' fees), costs of any settlement or judgment and
claims paid, incurred or suffered by Landlord to the extent caused by (i) the
violation of any Environmental Laws by Tenant or by its agents, employees,
contractors or invitees in connection with Tenant's use of the Leased Premises;
or (ii) Tenant's use of any Hazardous Substance in the Leased Premises.
Conversely, Landlord hereby agrees to indemnify Tenant and hold Tenant harmless
from and against any and all losses, liabilities, damages, injuries, and
expenses (including reasonable attorneys' fees), costs of any settlement or
judgement and claims paid, incurred or suffered by Tenant to the extent caused
by (x) the violation of any Environmental Laws by any other tenant at the
Building, (y) the
violation of any Environmental Laws by Landlord or by its agents, employees,
contractors or invitees in connection with Landlord's ownership of the Building
and/or the Property; or (z) Landlord's use of any Hazardous Substance in the
Building and/or at the Property. The indemnification obligations under this
subparagraph C shall apply only to direct, actual damages and shall in no event
apply to any consequential damages.
30. Attorneys Fees..
In the event that, at any time after the date of this Lease, either Landlord or
Tenant shall institute any action or proceeding against the other relating to
the provisions of this Lease or any default hereunder, the party not prevailing
in such action or proceeding shall reimburse the prevailing party all costs and
expenses including, without limitation, any fees, costs or disbursements
incurred on any appeal from the action or proceeding.)
31. Final Agreement.
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
LANDLORD: TENANT:
Jersey State Properties, Xxxxxx Communications, Inc.
a New Jersey limited liability company a Delaware corporation
By: /s/ Xxx Xxx Xxxxx By: /s/ Xxxxx Xxxxxx
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Name: Xxx Xxx Xxxxx Name: Xxxxx Xxxxxx
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Its: Its: Vice President, Operations
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