EXHIBIT 10.10
AGREEMENT OF LEASE
between
MSGW MADISON, L.L.C.,
Landlord
and
LOGICAL DESIGN SOLUTIONS, INC.
Tenant
000 XXXXXXX XXXXXX
XXXXXXXXXX, XXX XXXXXX
TABLE OF CONTENTS
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PAGE
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Preamble (Basic Provisions and Definitions)...........................1
1. Demised Premises, Term, and Purpose..........................3
2. Rent.........................................................4
3. Operating Expenses and Real Estate Taxes.....................5
4. Completion of Improvements and Commencement
of Rent...................................................11
5. Covenants as to Condition of Demised Premises and
Compliance with Laws........................................13
6. Tenant Improvements, Alterations, and Installations.........13
7. Various Negative Covenants by Tenant........................14
8. Various Affirmative Covenants by Tenant.....................15
9. Building Directory..........................................15
10. Casualty and Insurance......................................15
11. Indemnification.............................................18
12. Non-Liability of Landlord...................................19
13. Remedies and Termination Upon Tenant Default................19
14. Remedies Cumulative; Non-Waiver by Landlord.................20
15. Services; Electric Energy...................................21
16. Subordination...............................................23
17. Curing Tenant's and Landlord's Defaults.....................23
18. Notices.....................................................24
19. Quiet Enjoyment.............................................25
20. Security Deposit............................................25
21. Inspection and Entry by Landlord............................26
22. Brokerage...................................................26
23. Parking.....................................................26
24. Renewal Options.............................................26
25. Landlord's Inability to Perform.............................28
26. Condemnation................................................28
27. Assignment and Subletting...................................30
28. Environmental Laws..........................................33
29. Parties Bound...............................................34
30. Miscellaneous...............................................34
31. Hold Over Tenancy...........................................35
32. Financial Statements........................................36
33. Satellite Dish Antenna......................................36
LIST OF EXHIBITS
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Exhibits
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A Floor Plan
A-1 Site Plan of Building
B Work Letter to Lease
C Rules and Regulations
D Cleaning Services
E Parking Plan
INDEX OF DEFINED TERMS
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TERMS PARAGRAPH
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Additional Insureds.................................................... 17
Additional Rent........................................................ 2,4
Building............................................................... 4
Building Common Areas.................................................. 3
business days.......................................................... 15
Business Days.......................................................... 3
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Business Hours......................................................... 3
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Commencement Date...................................................... 3
Common Areas........................................................... 3
Demised Premises....................................................... 1
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Designated Broker...................................................... 2
Expiration Date........................................................ 1,3
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Fair Market Renewal Rent............................................... 2,27
Fixed Rent............................................................. 1,2
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Improvements........................................................... 4
Land................................................................... 3,6
Landlord............................................................... 1
Late Charge............................................................ 2
Laws................................................................... 8
Lease Year............................................................. 5
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Permitted Use.......................................................... 1
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Prime Rate............................................................. 2
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Punch List............................................................. 12
Real Estate Taxes...................................................... 4
Renewal Term........................................................... 1
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Tenant Delay........................................................... 11
Tenant Improvements.................................................... 7
Term................................................................... 1
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LEASE AGREEMENT DATED FEBRUARY ____, 2000
BETWEEN MSGW MADISON, L.L.C., a Delaware limited liability company ("Landlord"),
having an office c/o GALE & WENTWORTH, LLC, 000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx
Xxxx, Xxx Xxxxxx 00000 and LOGICAL DESIGN SOLUTIONS, INC. a corporation of the
State of New Jersey, ("Tenant") having an address at 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000.
PREAMBLE
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BASIC LEASE PROVISIONS AND DEFINITIONS.
In addition to other terms elsewhere defined in this Lease, the
following terms whenever used in this Lease should have only the meanings set
forth in this Preamble, unless such meanings are expressly modified, limited, or
expanded elsewhere herein.
I. Demised Premises: The Demised Premises are as depicted on the floor
plans annexed hereto and made a part hereof as Exhibit A and consist of fifty
two thousand (52,000) square feet of Rentable Area (as defined in Building
Office and Managers Association ("BOMA") standard #ANSI Z65.1-1980 "Modified")
of office space located on the second (2d), third (3d) and fourth (4th) floors
in the building situated on the Land (as defined in Paragraph 1(a) of this
Lease) located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxx, as
shown on the site plan attached hereto and a part hereof as Exhibit A-1
("Building").
II. Term: Ten (10) years.
III. Expiration Date: Midnight on the last day of the calendar month
occurring ten (10) years after the Commencement Date.
IV. Renewal Term: Two (2) consecutive five (5) year renewal terms.
V. Permitted Use: General first-class office use and related ancillary
uses and for no other purpose.
VI. Fixed Rent: Twenty Eight Dollars ($28) per square foot of Rentable
Area of office space per annum, being a total of One Million Four Hundred Fifty
Six Thousand Dollars ($1,456,000) per annum from the Commencement Date through
the last day of the calendar month during which the third (3d) anniversary of
the Commencement Date occurs; Twenty Nine and 50/100 Dollars ($29.50) per square
foot of Rentable Area of office space per annum, being a total of One Million
Five Hundred Thirty Four Thousand Dollars ($1,534,000) per annum from the first
day of the calendar month commencing with (or, if such third (3d) anniversary is
not on the first day of a month, following) the third (3d) anniversary of the
Commencement Date through the last day of the calendar month during which the
sixth (6th) anniversary of the Commencement Date occurs; and Thirty One and
50/100 Dollars ($31.50) per square foot of Rentable Area of office space per
annum, being a total of One Million Six Hundred Thirty Eight Thousand Dollars
($1,638,000) per annum from the first day of the calendar month commencing with
(or, if such sixth (6th) anniversary is not on the first day of a
month, following) the sixth (6th) anniversary of the Commencement Date through
the Expiration Date; and Fair Market Renewal Rent, as defined in Paragraph 24 of
this Lease, during the two (2) Renewal Terms.
VII. Monthly Fixed Rent: One-Twelfth (1/12th) of Fixed Rent, being One
Hundred Twenty One Thousand Three Hundred Thirty Three and 33/100 Dollars
($121,333.33) Dollars per month from the Commencement Date through the last day
of the calendar month during which the third (3d) anniversary of the
Commencement Date occurs; and One-Twelfth (1/12th) of Fixed Rent, being One
Hundred Twenty Seven Thousand Eight Hundred Thirty Three and 33/100 Dollars
($127,833.33) per month from the first day of the calendar month commencing with
(or, if such third (3d) anniversary is not on the first day of a month,
following) the third (3d) anniversary of the Commencement Date through the last
day of the calendar month during which the sixth (6th) anniversary of the
Commencement Date occurs; and One-Twelfth (1/12th) of the Fixed Rent, being One
Hundred Thirty Six Thousand Five Hundred Dollars ($136,500) per month from the
first day of the calendar month commencing with (or, if such sixth (6th)
anniversary is not on the first day of a month, following) the sixth (6th)
anniversary of the Commencement Date through the Expiration Date; and
One-Twelfth (1/12th) of the Fair Market Renewal Rent during the Renewal Term.
VIII. Late Charge: An amount equal to the sum of: (i) interest at
Prime Rate, as defined hereinafter, plus four (4%) percent per annum, which
interest shall accrue from the date any payment of Fixed Rent or Additional Rent
is due until the date of payment of the same; plus (ii) an administrative fee
equal to one (1%) percent of said late payment; provided, however, that, if
Tenant incurs more than two (2) Late Charges, in any calendar year, any
subsequent Late Charges incurred in that calendar year shall include an
administrative fee equal to four percent (4%) of said late payment.
IX. Security Deposit (subject to the provisions of Paragraph 2(c) and
20):
$970,667 for the 1st through the 3d years of the Term
$767,000 for the 4th through the 6th years of the Term
$546,000 for the remaining Term
X. Tenant's S.I.C. Code (as per most recent S.I.C Manual as published
by the United States Office of Management Budget): 7371.
XI. Designated Broker: JGT Company and Xxxx & Wentworth Real Estate
Advisors, LLC.
XII. Tenant's Construction Allowance: In accordance with Exhibit B
attached hereto and made a part hereof.
XIII. Prime Rate: The prime commercial lending rate on 90 day loans
announced by Citibank, N.A.
XIV. Building Holidays: Building Holidays shall be President's Day;
Good Friday; Memorial Day; Independence Day; Labor Day; Thanksgiving Day and day
after; Christmas Day and New Year's Day; the Monday before or the Friday after
if Christmas Day,
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New Year's Day, or Independence Day falls on Tuesday or on Thursday; and the
Monday after or the Friday before if Christmas Day, New Year's Day, or
Independence Day falls on Saturday or on Sunday.
XV. Business Days: Weekdays excluding Building Holidays.
XVI. Business Hours: The generally customary daytime business hours of
Tenant (but not before 8:00 A.M. or after 6:00 P.M. on weekdays) and 8:00 A.M.
to 1:00 P.M. on Saturdays. Business Hours do not include Sundays or Building
Holidays.
XVII. Landlord's Work: That certain work described on Exhibit B
attached hereto. The parties hereby agree to the following terms and conditions:
1. Demised Premises, Term, and Purpose.
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(a) Landlord does hereby lease to Tenant, and Tenant does hereby
lease from Landlord the Demised Premises located in the Building, together with
the non-exclusive right to use any pedestrian easements and/or vehicular
easements that may exist from time to time for the benefit of tenants of the
Building, together with all other Common Areas, as defined in Paragraph 1(d),
for the Term commencing on the Commencement Date, as defined in subparagraph (b)
of this Paragraph 1, and ending on the Expiration Date, or such earlier date
upon which the Term may expire or be terminated pursuant to the provisions of
this Lease or pursuant to law. The parcel of land on which the Building is
located ("Land") is known and designated as Xxx 0, Xxxxx 0000 on the tax maps of
the Town of Morristown.
(b) For purposes of this Lease the "Commencement Date" shall be
the date on which the Commencement Date occurs with respect to the third (3rd)
and fourth (4th) floors of the Building, pursuant to the provisions of Paragraph
4(b).
(c) The Demised Premises shall be used by Tenant for the
Permitted Use and for no other use or purpose. Tenant shall be permitted to
conduct occasional client oriented training classes at the Demised Premises,
provided that the number of visitors attending such classes can be accommodated
in Tenant's parking area. The Permitted Use shall not be deemed to include the
following uses which are expressly prohibited: governmental offices; drive-up
facility; educational, training, or similar classes for members of the general
public; union offices; medical or similar treatments; xxxxxx or beauty parlor;
gaming or political activities; pornographic; employment, recruiting, or
placement activities (except executive search and similar activities in the
ordinary course of Tenant's business); retail or wholesale sale and delivery of
goods; repairing, servicing, or receiving for repair or service; and any other
use or uses that are of the same or similar nature or character. Tenant shall
not use or occupy the Demised Premises or any part thereof for any purpose
deemed unlawful, disreputable, or extra-hazardous on account of fire or other
casualty or for any purposes that shall impair the character of the Building as
reasonably determined by Landlord. Tenant, at its sole cost and expense, shall
obtain any consents, licenses, permits, or approvals required or obtainable in
normal course to conduct its business at the Demised Premises.
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(d) The "Common Areas" shall consist of the "Building Common
Areas," as defined hereinafter. The Common Areas shall be operated and
maintained by Landlord and/or such other owners or operators for the benefit of
all tenants in a manner similar to that of other office buildings in the Xxxxxx
County, New Jersey area that are reasonably similar to the Building with respect
to tenant mix, size, and age. The use of the Common Areas shall be in common
with Landlord, other tenants of the Building, and other persons entitled to use
the same. Landlord shall not diminish the Common Areas in any way that has a
materially negative impact on Tenant's ability to conduct its business for the
Permitted Use at the Demised Premises.
(i) The "Building Common Areas" shall be those parts of the
Building and other improvements designated by Landlord for the common use of all
tenants of the Building, including, but not limited to: utility lines,
pumpstations, drainage basins, xxxxxx, detention or retention ponds, and other
facilities on or serving the Land; halls; lobbies; delivery passages; drinking
fountains; public toilets; parking facilities; lobby plantings and interior
landscaped areas, exterior landscaped areas on the Land; and other facilities or
Improvements owned, operated, or maintained, in whole or in part, by Landlord
for use by all tenants of the Building.
(e) For purposes of this Lease the term "Improvements" shall mean
and include all, whether existing now or in the future, buildings, including the
Building, and/or appurtenant structures or improvements of any kind, whether
above, on, or below the Land surface (including, without limitation,
outbuildings; loading areas; canopies; walls; waterlines; sewer, electrical, and
gas distribution facilities; parking facilities; walkways; streets; curbs;
roads; rights of way; fences; xxxxxx; exterior plantings; poles; and signs.
2. Rent.
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(a) The rent reserved under this Lease for the Term hereof shall
be and consist of: (i) the Fixed Rent payable in equal monthly installments in
advance on the first day of each and every calendar month during the Term
(except that Tenant shall pay one (1) monthly installment on the Commencement
Date, which installment shall be applied to the Monthly Fixed Rent due for the
first (1st) month of the Term); plus (ii) such additional rent ("Additional
Rent") in an amount equal to Tenant's Operating Expenses and of Real Estate
Taxes (as such terms are defined in Paragraph 3 of this Lease); all charges for
services and utilities pursuant to Paragraph 15 hereof; and any other charges or
amounts that shall become due and payable hereunder, including, without
limitation, the reasonable expenses incurred by Landlord in the enforcement of
any of the agreements, covenants, and obligations under this Lease and including
reasonable legal fees that may accrue in the event suit for rent or dispossess
proceedings are necessary to obtain the possession of the Demised Premises or to
collect the rent; all of which Additional Rent shall be payable as hereinafter
provided. All rent shall be paid to Landlord at its office stated above or such
other place Landlord may designate in writing. If the Commencement Date shall
occur on a date other than the first calendar day of a month, the rent for the
partial month commencing on the Commencement Date shall be appropriately
pro-rated on the basis of the monthly rent payable during the first year of the
Term.
(b) Tenant does hereby covenant and agree to pay promptly the
Fixed Rent and Additional Rent herein reserved as and when the same shall become
due and payable,
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without demand therefor and without any set-off, recoupment, or deduction
whatsoever. All Additional Rent payable hereunder that is not due and payable on
a monthly basis during the Term, unless otherwise specified herein, shall be due
and payable within thirty (30) days of delivery by Landlord to Tenant of notice
to pay the same.
(c) In the event that any payment of Fixed Rent or Additional
Rent shall not be paid within five (5) days after the due date for the same as
provided herein, Tenant shall pay, together with such payment, the Late Charge.
Furthermore, if Tenant fails to remit a full monthly installment of the Monthly
Fixed Rent or of the Additional Rent as provided herein for two (2) consecutive
months, then Landlord may require (i) all Fixed Rent and Additional Rent
payments to be paid in advance on a quarterly annual basis, rather than a
monthly basis, and (ii) an increase in an amount equal to one (1) installment of
Monthly Fixed Rent in the Security Deposit. In addition, if Tenant submits to
Landlord a check for which there are insufficient funds available, then Landlord
may charge Tenant as Additional Rent an administrative and handling fee in the
amount of One Hundred and 00/100 Dollars.
3. Operating Expenses and Real Estate Taxes.
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(a) For purposes of this Paragraph, the following definitions
shall apply:
"Initial Year" shall mean calendar year 2000.
"Lease Year" shall mean each calendar year subsequent to the
Initial Year.
"Initial Year Operating Expenses" shall mean those
Operating Expenses, as defined hereinafter, paid or incurred by Landlord during
the Initial Year.
"Initial Year Real Estate Taxes" shall mean those Real
Estate Taxes, as defined hereinafter, determined by multiplying (i) the average
tax rate in effect during the calendar year 2000 by (ii) the highest assessment
in effect for the Building for the calendar year 2000.
"Real Estate Taxes" shall mean all real property taxes and
assessments now or hereafter imposed upon the Land, the Improvements, and other
real property now or hereafter included with or located upon the Land. If, due
to a change in the method of taxation or assessment, any franchise, income,
profit or other tax, however designated, shall be substituted by the applicable
taxing authority, in whole or in part, for the Real Estate Taxes now or
hereafter imposed on the Land, the Improvements, or other real property included
in the Land, such franchise, income, profit, or other tax shall be deemed to be
included in the term "Real Estate Taxes." Real Estate Taxes shall not include
any inheritance, estate, succession, transfer, gift, franchise, net income,
capital stock tax, corporate, capital levy, stamp, or transfer tax (except to
the extent that, as provided for above, such tax is substituted for and in lieu
of Real Estate Taxes now or hereafter imposed).
"Operating Expenses" shall mean: the total of all the
costs and expenses actually paid or incurred by Landlord (and/or others to the
extent such costs paid or incurred by others are chargeable to Landlord) with
respect to the management, operation,
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maintenance, and repair of the Land, the Building, and any of the other
Improvements and the services provided tenants therein [excepting electrical
energy expenses paid directly by tenants (including Tenant) to Landlord or the
applicable utility supplying said service pursuant to Paragraph 15 of this Lease
and equivalent provisions of other leases], including, but not limited to: (i)
all utilities, including without limitation, water, electricity, gas, lighting,
sewer and waste disposal; (ii) air conditioning, ventilation, and heating, to
the extent actually paid for by Landlord; (iii) lobby maintenance and cleaning;
maintenance of elevators; **[protection and security(tbd)]**; (iv) lobby
plantings and interior landscape maintenance; (v) exterior landscape
maintenance; (vi) snow removal; (vii) parking lot maintenance, striping, and
repairs; (viii) operation, maintenance, repair, or replacement of utility lines,
pumpstations, drainage basins, xxxxxx, detention or retention ponds, and other
facilities on or serving the Land; (ix) maintenance and painting of non-tenanted
areas; (x) fire, all-risk, boiler and machinery, sprinkler, apparatus, public
liability, property damage, rent, and plate glass insurance; (xi) supplies;
(xii) wages, salaries, disability benefits, pensions, hospitalization,
retirement plans, group insurance, worker's compensation insurance, payroll,
social security, unemployment, and other similar taxes with respect to employees
of Landlord employed at the Building (and whose functions are those customarily
performed by employees in comparable buildings) on a full-time basis (or such
portion of said expenses, as reasonably allocated by Landlord (the "Employment
Percentage") to reflect the percentage of time spent by Landlord's employees
performing work in, about or relating to the Building, the Land and any of the
Improvements, as opposed to the time a full- time employee of Landlord would
spend on his or her entire duties for Landlord); (xiii) the Employment
Percentage of the cost of uniforms and workers' clothes for such employees and
the cleaning thereof and the Employment Percentage of other similar employees
benefits and expenses imposed on Landlord pursuant to law or to any collective
bargaining agreement with respect to Landlord's employees; (xiv) the Employment
Percentage of the cost for a bookkeeper and/or for an accountant and/or any
other professional and consulting fees, including reasonable legal and auditing
fees; (xv) the expenses, including reasonable payments to attorneys and
appraisers, incurred by Landlord in connection with any application or
proceeding wherein Landlord obtains or seeks to obtain reduction or refund of
the Real Estate Taxes payable or paid; management fees of the Building; and
(xvi) any other expenses of any other kind whatsoever reasonably incurred in
managing, operating, maintaining, or repairing the Building, the Land, or any
other of the Improvements.
It is agreed, however, that the foregoing Operating Expenses shall
exclude or have deducted from them, as the case may be and as shall be
appropriate:
(i) leasing commissions;
(ii) salaries and benefits for executives above the grade of Building
manager;
(iii) Building start-up or opening expenses;
(iv) expenditures for capital improvements, except those which under
generally accepted accounting principles consistently applied ("GAAP") are
expensed or regarded as deferred expenses and except for capital expenses
required by any law enacted after the date of this Lease, in any of which cases
the costs thereof shall be included in Operating
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Expenses for the calendar year in which the costs are incurred and for
subsequent calendar years on a straight line basis amortized over the reasonably
expected useful life of the improvement with an interest factor equal to the
Prime Rate at the time of Landlord's having actually incurred said expenditure,
provided, however, that nothing herein shall relieve Tenant of the
responsibility for payments for capital improvements charged to Tenant pursuant
to Paragraph 5 hereof;
(v) advertising, marketing, space planning (including architectural
and engineering) and promotional expenditures;
(vi) legal fees for lease negotiations and disputes with tenants;
(vii) legal and auditing fees, other than legal and auditing fees
reasonably incurred in connection with (x) the maintenance and operation of the
Building or (y) the preparation of statements required pursuant to additional
rent or lease escalation provisions;
(viii) as a deduction, amounts received by Landlord through proceeds
of insurance to the extent the proceeds are compensation for expenses that were
previously included as Operating Expenses hereunder;
(ix) Landlord's contribution to Tenant Improvements (as defined below)
and any other costs incurred by Landlord to prepare the Building, the Land and
the Improvements to Tenant's occupancy in accordance with the terms of this
Lease;
(x) Taxes or any inheritance, estate, succession, transfer, gains,
mortgage recording, gift, franchise, corporation, income or profit tax or
capital levy that is imposed upon Landlord;
(xi) the cost of repairs and replacements incurred by reason of fire
or other casualty or condemnation;
(xii) payments of principal, interest and any other amounts under any
mortgages upon the Building, the Land and the Improvements or any cost incurred
by Landlord to finance or refinance the Building, the Land and the Improvements;
(xiii) payments of ground rent or other amounts pursuant to any ground
lease covering the Building, the Land and the Improvements;
(xiv) depreciation of the Building, the Improvements or any equipment
located therein;
(xv) costs incurred with respect to a sale or transfer of all or any
portion of the Building or any interest therein or in connection with the
purchase or sale of any air or development rights;
(xvi) payments made by Landlord to a company or other entity
affiliated with Landlord for goods and services to the extent that such payments
exceed the
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amounts that would have been paid to independent third parties for goods and
services of like kind;
(xvii) any general or administrative overhead of Landlord, other than
the items expressly described above;
(xviii) the cost of correcting latent defects in the construction of
the Building or the Building systems;
(xix) costs relating to withdrawal liability or unfunded pension
liability under the Multi-Employer Pension Plan Act or similar law;
(xx) any interest, fine, penalty or other late charges payable by
Landlord and incurred as a result of late payments; (xxi) the cost of acquiring
or installing objects of art;
(xxii) subject to the provisions of subparagraph (iv), above, costs
incurred to remedy violations of Laws (as defined below) that arise by reason of
Landlord's failure to construct, maintain or operate the Building, the
Improvements or any part of either in compliance with such Laws;
(xxiii) any and all costs (including testing, containing, removing or
abating costs, but excluding routine tests) arising from the presence of ACM or
any other Hazardous Substances (as defined below) in or about the Building or
the Land which were not placed in the Building or the Land by Tenant; excluding,
however, cleaning solvents and other Hazardous Substances customarily used for
the operation, repair and/or maintenance of comparable Buildings;
(xxiv) all charitable or political contributions; and
(xxv) any management fee in excess of those customarily charged in the
comparable buildings in the market area.
If Landlord and/or others shall purchase any item of capital equipment
or make any capital expenditures designed to result in savings or reductions in
Operating Expenses, then, to the extent such savings are realized, the costs for
same shall be included in Operating Expenses. The costs of such capital
equipment or capital expenditures are to be included in Operating Expenses for
the calendar year in which the costs are incurred and subsequent calendar years
on a straight line basis amortized over such period of time as reasonably can be
estimated as the time in which such savings or reductions in Operating Expenses
are expected to equal Landlord's costs for such capital equipment or capital
expenditure with an interest factor equal to the Prime Rate at the time of
Landlord's having actually incurred said costs. If Landlord and/or others shall
lease any such item of capital equipment designed to result in savings or
reductions in Operating Expenses, then, to the extent such savings are realized,
the rentals and other costs paid pursuant to such leasing shall be included in
Operating Expenses for the calendar year in which they were incurred.
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(b) In the event (i) that the Commencement Date shall occur on a day
other than the first day of a calendar year, or (ii) that the Expiration Date or
other termination date of this Lease shall occur on a day other than the last
day of a calendar year, or (iii) of any abatement of the Fixed Rent payable
hereunder pursuant to any provision of this Lease for any period of time not
equal to a full calendar year, or (iv) of any increase or decrease in the
Rentable Area of the Demised Premises or any increase or decrease in the
Rentable Area of the Building, then in each such event in applying the
provisions of this Paragraph 3 with respect to such calendar year in which such
events have occurred, appropriate adjustments shall be made to Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes payable pursuant
to Paragraph 3(c) so as to apportion such payment on the basis of (1) the pro
rata portion of the calendar year during which such payment is to be made and/or
(2) the increase or decrease in Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes by virtue of the changes in any such Rentable
Area.
(c) Tenant shall be responsible for and shall pay to Landlord in
accordance with Paragraph 3 (i) any increase in Operating Expenses in each Lease
Year during the Term over the Initial Year Operating Expenses and (ii) any
increase in Real Estate Taxes over the Initial Year Real Estate Taxes.
(1) During each Lease Year, Tenant shall pay to Landlord monthly,
on the first day of each calendar month, as Additional Rent, Landlord's
reasonable estimate of: (i) any increase in Operating Expenses in each Lease
Year over the Initial Year Operating Expenses, and (ii) any increase in Real
Estate Taxes in each Lease Year over the Initial Year Real Estate Taxes.
(2) Prior to the end of the Initial Year and thereafter for each
successive Lease Year, or part thereof, Landlord shall send to Tenant a
statement of the projected increase in Operating Expenses and Real Estate Taxes
for the applicable Lease Year, if any, (an "Operating Expense/Real Estate Tax
Projection") and shall indicate what the estimated amount of said increase in
Operating Expenses and in Real Estate Taxes shall be, said amount to be paid in
equal monthly installments (rounded to the nearest whole dollar) in advance on
the first day of each month by Tenant as Additional Rent, commencing January lst
of the applicable Lease Year.
(3) If during the course of any Lease Year, Landlord shall have
reason to believe that the increase in Operating Expenses and/or Real Estate
Taxes shall be higher than that upon which the aforesaid Operating Expense/Real
Estate Tax Projection was originally based, as set forth in subparagraph (c)(2)
above, then Landlord (upon delivering to Tenant, with respect to a material
increase in the Projection, evidence reasonably satisfactory to Tenant that such
adjustment is justified) shall be entitled to adjust the Operating Expense/Real
Estate Tax Projection by a lump sum invoice for the months of the Lease Year
which precede the revised Operating Expense/Real Estate Tax Projection and to
advise Tenant of an adjustment in future monthly projection amounts to the end
result that Landlord's Operating Expense/Real Estate Tax Projection shall be on
a reasonably current basis each Lease Year.
(4) Within ninety (90) days following the end of each Lease Year,
Landlord shall send to Tenant a statement of the actual Operating Expenses and
Real Estate Taxes incurred for the prior Lease Year showing the increase or
decrease in Operating Expenses
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and Real Estate Taxes. In the event that the amount prepaid by Tenant exceeds
the amount that was actually due based upon actual year-end cost, Landlord shall
pay to Tenant an amount equal to the overcharge. Landlord shall reimburse Tenant
for such overcharge by either, at Landlord's option, (i) paying such amount
together with the statement of the actual increase or (ii) crediting such amount
to the next installment of Fixed or Additional Rent due and payable by Tenant.
In the event that Landlord has undercharged Tenant, then Landlord shall provide
Tenant with an invoice stating the additional amount due, which amount shall be
paid in full by Tenant within thirty (30) days after receipt.
(d) Each and every of the aforesaid Operating Expense/Real Estate Tax
Projection amounts, whether requiring lump sum payment or constituting projected
monthly amounts added to the Fixed Rent, shall for all purposes be treated and
considered as Additional Rent, and the failure of Tenant to pay the same as and
when due in advance and without demand shall have the same effect as a failure
to pay any installment of the Fixed Rent and shall afford Landlord all the
remedies provided in this Lease therefor, including, without limitation, the
Late Charge as provided in Paragraph 2(c) of this Lease.
(e) Tenant acknowledges and agrees that Landlord shall have the right
to change the period of the Lease Year, either before or during the Term, to any
other fiscal year or twelve (12) month period. In the event that Landlord makes
such a change, then the same shall be effective upon written notice to Tenant
and, in such event, Tenant shall pay the amount of Operating Expenses and of
Real Estate Taxes over the Operating Expenses and Real Estate Taxes for the
period from the end of the initially designated Lease Year, as last billed, to
the beginning of the newly designated Lease Year, prorated for such period,
within thirty (30) days of the rendering by Landlord of the xxxx for such
interim period.
(f) Tenant acknowledges that Landlord shall have the exclusive right,
but not the obligation, to contest or appeal any assessment for Real Estate
Taxes. Landlord and Tenant agree that, in the event the amount of the Real
Estate Taxes for the Initial Year or for any Lease Year is reduced below the
then current amount of the Initial Year Real Estate Taxes due to a reduction in
the assessment of the Land and/or Building, the Initial Year Real Estate Taxes
shall be revised to be the product of (i) the lowest tax rate in effect at any
time between calendar year 2000 and the year in which the Building is assessed
as a fully completed Building, multiplied by (ii) such lower assessment for the
Building and/or the Land. Accordingly, any estimation of increases in Real
Estate Taxes set forth in any future Operating Expense/Real Estate Tax
Projection shall be based on the revised Initial Year Real Estate Taxes. In
addition, retroactive adjustments and future adjustments (as more particularly
set forth in Paragraph 3(c)(4) above) shall be made based upon the actual and
reduced amount of Real Estate Taxes for each Lease Year.
(g) Landlord shall maintain books of account which shall be open for
inspection to Tenant and his representatives at all reasonable times, upon
reasonable advance notice by Tenant within one hundred twenty (120) days of
Tenant's receipt of the year end statements referred to in subparagraph (c)(4)
hereof, so that Tenant can determine that such operating, utility and tax costs
have in fact been paid or incurred. Any disagreement with respect to any one or
more of said charges if not satisfactorily settled between Landlord and Tenant
may be referred by either party to any independent certified public accountant
to be mutually agreed
10
upon, and if such accountant cannot be agreed upon, the American Arbitration
Association may be asked by either party to select an arbitrator, whose decision
on the dispute will be final and binding upon both parties. If the decision of
the arbitrator results in a decrease of the charge by more than five percent
(5%), the costs of the arbitration shall be paid by Landlord; otherwise the cost
of the arbitration shall be borne by Tenant. Pending resolution of the issue,
Tenant shall pay the amount established and billed by Landlord, all subject to
final adjustment once the issue is resolved as provided for herein.
(h) During any period when Tenant is not leasing all of the Rentable
Area of the Building, Tenant's liability for increases in Real Estate Taxes and
Operating Expenses over the Initial Year Real Estate Taxes and Initial Year
Operating Expenses shall be limited to Tenant's proportionate share of such
increases. Tenant's proportionate share shall be the Rentable Area of the
premises then leased by Tenant, divided by the total Rentable Area of the
Building.
4. Completion of Improvements and Commencement of Rent.
---------------------------------------------------
(a) Landlord agrees to perform Landlord's Work and to provide the
improvements and other work in and to the Demised Premises ("Tenant
Improvements") in accordance with the terms, conditions, and provisions of
Exhibit B attached hereto and made a part hereof.
(b) The Demised Premises shall be ready for occupancy and, subject to
the terms and conditions hereinafter set forth, the Commencement Date shall
occur on June 14, 2000 with respect to the third (3d) and fourth (4th) floors of
the Building, and on the earlier of Substantial Completion of the Landlord's
Work and Tenant Improvements for such space, and January 15, 2001 with respect
to the second (2nd) floor of the Building, or such later dates that: (i)
aforesaid portions of the Demised Premises shall be delivered to Tenant in
tenantable condition, free of violations of any health, safety, fire, and other
statutes and regulations governing the Demised Premises and its use, all of
which shall be established by the issuance by the appropriate governmental
authority of a certificate (temporary or final) permitting occupancy of the
Demised Premises for the purposes set forth herein; and (ii) Landlord has
Substantially Completed, as defined hereinafter, Landlord's Work and the Tenant
Improvements. If the occurrence of any of the conditions listed in the preceding
sentence, and thereby the making of the Demised Premises ready for occupancy,
shall be delayed due to Tenant Delay, as defined in Exhibit B; then the
Commencement Date shall be accelerated by a time period equal to the number of
days of delay so caused by Tenant, provided that the Commencement Date shall be
no earlier than the dates described in the preceding sentence. As used herein,
Landlord shall be deemed to have Substantially Completed the Tenant Improvements
notwithstanding that minor or insubstantial details of construction, mechanical
adjustment, or decoration remain to be performed in the Demised Premises or any
part thereof, the noncompletion of which does not materially interfere with
Tenant's use of the Demised Premises.
(c) Tenant shall occupy the portions of the Demised Premises as soon
as the same are ready for its occupancy and the Commencement Date shall have
occurred (but not prior to said date except to install Tenant's personal
property as provided in this Lease). If and when Tenant shall take actual
possession of all or any part of the Demised Premises, it shall be
11
conclusively presumed that the same is in satisfactory condition, except as to
those items of work remaining to be performed by Landlord pursuant to this
Paragraph 4 or any items of work set forth in a punch list ("Punch List") to be
submitted to and acknowledged by Landlord in writing within thirty (30) days
after the Commencement Date as to each portion of the Demised Premises.
(d) Upon prior written notice from Landlord, Tenant shall be permitted
to enter the applicable portions of the Demised Premises prior to the
anticipated Commencement Date for each such portion for the purpose of moving
personal property into the Demised Premises, all without obligation to pay Fixed
Rent or Additional Rent therefor, provided all of such work shall be performed
for Tenant so as not to cause or create any labor dispute for Landlord or to
disrupt the performance of the Tenant Improvements, and further provided Tenant
complies with all of the other terms and provisions of this Lease, to include
but not be limited to the provisions of Paragraph 10 of this Lease.
(e) Upon the occurrence of the Commencement Date with respect to the
third (3d) and fourth (4th) floors of the Building, Tenant shall be obligated to
commence to pay sixty seven percent (67%) of the Fixed Rent specified in the
Preamble. Upon the occurrence of the Commencement Date with respect to the
second (2d) floor of the Building, Tenant shall be obligated to commence to pay
an additional thirty three percent (33%) of the Fixed Rent specified in the
Preamble. If Tenant occupies a portion of the second (2d) floor of the Building
for the conduct of its business prior to the Commencement Date with respect to
such floor of the Building, the Fixed Rent described above shall become payable
in a fraction, the numerator of which shall be the number of employees of Tenant
occupying the second (2d) floor of the Building and the denominator of which
shall be seventy (70). In such case, Tenant shall commence the payment of Fixed
Rent for the portion of the second (2d) floor of the Building in an amount
calculated as provided above.
(f) If Landlord shall not have delivered possession of the Demised
Premises to Tenant in the condition required by Paragraph 4(c) on or prior to
July 31, 2000 with respect to the third (3d) and fourth (4th) floors of the
Building, and March 1, 2001 with respect to the second (2nd) floor of the
Building, Tenant shall receive an abatement of Fixed Rent accruing after the
actual Commencement Date for such floors equal to 1 day of applicable Fixed Rent
for each day beyond such dates for the first forty-five (45) days that Landlord
shall not have delivered possession of such portion of the Demised Premises to
Tenant in the required condition, and 1 1/2 days of applicable Fixed Rent for
each of the next forty-five (45) days that such failure continues. If Landlord
has not delivered possession of the third (3d) and fourth (4th) floors of the
Building to Tenant on or prior to October 30, 2000, or if Landlord has not
delivered possession of the entire Demised Premises to Tenant on or prior to May
31, 2001, then Tenant shall have the option to cancel this Lease by giving
Landlord written notice thereof at any time within 30 days following such date,
whereupon this Lease shall terminate and Landlord and Tenant shall be released
from any further obligations hereunder. Landlord's obligations hereunder and
the deadlines provided herein are subject to the provisions of Paragraph 25 and
Exhibit B, including Tenant Delays.
12
5. Covenants as to Condition of Demised Premises and Compliance with Laws.
----------------------------------------------------------------------
(a) In the event that the Building or any of the equipment affixed
thereto or stored therein should be damaged (other than by ordinary wear and
tear) as a result of any act of Tenant, its agents, servants, employees,
invitees, or contractors, Tenant shall, upon demand, pay to Landlord the cost of
all required repairs, including structural repairs.
(b) Tenant shall commit no act of waste and shall take good care of
the Demised Premises and the equipment affixed thereto and stored therein and,
at Tenant's sole cost and expense, shall maintain the Demised Premises in good
condition and state of repair. In addition, Tenant, at Tenant's sole cost and
expense, shall promptly comply with all laws, rules, regulations, and ordinances
of all governmental authorities or agencies having jurisdiction over the Demised
Premises and of all insurance bodies (including, without limitation, the Board
of Fire Underwriters) at any time duly issued or in force, applicable to the
Demised Premises or any part thereof or to Tenant's manner of use thereof
(collectively "Laws" or, as the context requires, "laws"). Tenant agrees to
provide Landlord with immediate notice of the need for any of the foregoing
maintenance, repairs, or modifications, and Landlord shall perform, or cause to
be performed, all of the same with the costs incurred therefor to be paid by
Tenant within thirty (30) days after demand as Additional Rent.
(c) Landlord shall maintain and repair the Building Common Areas, the
costs of which shall be passed through as an Operating Expense to the extent
permitted in Paragraph 3 but subject to the obligations of Tenant to pay for the
same as a direct Additional Rent expense as specifically provided in this
Paragraph 5. Such maintenance and repair shall specifically include (i)
maintenance and repairs to the Building's HVAC, fire safety (including without
limitation, sprinklers), electrical, plumbing, or other systems to the extent
that such systems service the Demised Premises in common with other tenanted
areas (but specifically excluding the distribution portions of such Building
systems located within the Demised Premises and specifically excluding the
fixtures and systems that serve the Demised Premises exclusively, in which case
Landlord shall make such repair and/or modification, but Tenant shall pay to
Landlord the costs incurred therefor within thirty (30) days after demand as
Additional Rent) and (ii) any structural maintenance or repairs to the Building.
In addition, Landlord shall perform all maintenance and make all repairs to the
Common Areas of the Building and to the Land that are necessary to comply with
any applicable Laws, the costs of which shall be passed through to the Building
tenants as an Operating Expense, unless excluded therefrom under the provisions
of Paragraph 3.
(d) Upon the Expiration Date or sooner termination of this Lease,
Tenant shall deliver up the Demised Premises in good order and condition, wear
and tear from a reasonable use thereof excepted.
6. Tenant Improvements, Alterations, and Installations.
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(a) All fixtures, equipment, improvements, alterations, installations
that are attached to the Demised Premises; any additions and appurtenances made
by Tenant to the Demised Premises; and any Tenant Improvements (excluding
Tenant's trade fixtures, business equipment, movable partitions, and personal
property) shall become the property of Landlord
13
upon installation. Not later than the last day of the Term, Tenant shall, at its
expense, remove from the Demised Premises all of Tenant's trade fixtures,
business equipment, personal property, and any Alterations (as defined
hereinafter) designated in writing by Landlord for removal at the time that
Landlord approves Tenant's plans and specifications therefor. Tenant, at its
sole cost and expense, shall repair injury done by or in connection with the
installation or removal of the Alterations required to be removed. Any
equipment, fixtures, goods, or other property of Tenant not removed by Tenant
upon the termination of this Lease or upon any quitting, vacating, or
abandonment of the Demised Premises by Tenant shall be considered as abandoned,
and Landlord shall have the right, without any notice to Tenant, to sell or
otherwise dispose of the same, at the expense of Tenant, and shall not be
accountable to Tenant for any part of the proceeds of such sale, if any.
Landlord may have any such property stored at Tenant's risk and expense.
(b) Tenant, without Landlord's prior consent, shall have the right to
make non- structural Alterations in or to the Demised Premises that (i) involve
a total cost of not more than Thirty Five Thousand and 00/100 Dollars
($35,000.00); (ii) do not require a building permit to be issued by any
governmental authority to make same legally; (iii) do not affect any existing
building systems outside the Demised Premises and do not impair or adversely
affect any existing building systems within the Demised Premises; and (iv) do
not result in a violation of the Permitted Use of the Demised Premises. No other
Alterations (structural or non-structural) shall be made by Tenant without
Landlord's express prior written approval. Landlord agrees that approval of
Alterations of a non-structural nature that do not negatively affect any
building systems shall not be unreasonably withheld. Tenant shall give Landlord
prior written notice of any proposed alterations, installations, additions, or
improvements ("Alterations") with copies of proposed plans and as-built plans
upon completion of the Alterations. Landlord shall have the right to elect that
Tenant remove any Alteration made to the Demised Premises prior to the
expiration of the Lease and to restore the Demised Premises to the condition
existing prior to said Alteration. All such Alterations shall be done at
Tenant's sole expense and the making thereof shall not interfere with the use of
the Building by other tenants. Tenant agrees to indemnify, defend, and hold
harmless Landlord and any mortgagee of Landlord, if any, from any and all costs,
expenses, claims, causes of action, damages, and liabilities of any type or
nature whatsoever (including, but not limited to, reasonable attorneys' fees and
costs of litigation) arising out of or relating to the making of the Alterations
by Tenant. The foregoing indemnity shall survive the expiration or sooner
termination of this Lease. Nothing herein contained shall be construed as
constituting the permission of Landlord for a mechanic or subcontractor to file
a construction lien claim against the Demised Premises, and Tenant agrees to
secure the removal of any such construction lien that a contractor purports to
file against the Demised Premises by payment or otherwise pursuant to law. All
Alterations shall be effected in compliance with all applicable Laws.
7. Various Negative Covenants by Tenant. Tenant agrees that it shall not,
------------------------------------
without Landlord's prior written consent, which consent may be withheld in
Landlord's sole discretion:
(a) do anything in or near the Demised Premises that will increase the
rate of fire insurance on the Building;
14
(b) permit the accumulation of waste or refuse matter in or near the
Demised Premises, except in containers provided therefor;
(c) except as expressly permitted herein, permit any signs, lettering,
or advertising matter to be erected or attached to the Demised Premises that is
visible from outside of the Demised Premises;
(d) mortgage, hypothecate, pledge, assign, transfer, or sublet all or
a portion of the Demised Premises or this Lease, as the case may be, except to
the extent specifically permitted in Paragraph 27; or
(e) encumber or obstruct the Common Areas surrounding the Demised
Premises, nor cause the same to be encumbered or obstructed, nor encumber or
obstruct any access ways to the Demised Premises, nor cause the same to be
encumbered or obstructed.
8. Various Affirmative Covenants of Tenant. Tenant covenants and agrees
---------------------------------------
that Tenant will:
(a) At any time and from time to time, execute, acknowledge, and
deliver to Landlord, or to anyone Landlord shall designate, within fifteen (15)
business days after receipt of request therefor, a tenant estoppel certificate
in form reasonably acceptable to Landlord or to the financial institutions
requesting the same relating to matters customarily included in tenant estoppel
certificates.
(b) Faithfully observe and comply with the rules and regulations
attached hereto and made a part hereof as Exhibit C and such reasonable
additional rules and regulations as Landlord may hereafter at any time or from
time to time communicate in writing to Tenant; provided, however, that in the
case of any conflict between the provisions of this Lease and any such rule or
regulation, the provisions of this Lease control. Nothing contained in this
Lease shall be construed to impose upon Landlord any duty or obligation to
enforce the rules and regulations or the terms, covenants, or conditions in any
other lease as against any other tenant, and Landlord shall not be liable to
Tenant for violation of any rule or regulation by any other tenant, its
employees, agents, visitors, invitees, subtenants, or licensees. Landlord shall
not discriminate against Tenant in enforcing the rules and regulations.
9. Building Directory. Landlord will maintain listings on the Building
------------------
directory and the elevator lobby directory of the name of Tenant, such internal
departments or locations as Tenant shall reasonably designate and any subtenant
permitted hereunder. Additionally, Tenant shall have the right, at Tenant's
sole cost and expense, to display its corporate name at the entrance to the
Demised Premises, on the exterior monument sign identifying the Building and on
the exterior of the Building itself, subject to compliance with applicable laws.
At the expiration of the Term, Tenant shall remove all such signs and repair any
damage to the monument or to the Building which results from such removal.
10. Casualty and Insurance.
----------------------
(a) In the event of partial or total destruction of the Building or of
the Demised Premises by reason of fire or any other cause (a "Casualty"), Tenant
shall immediately
15
notify Landlord of the same, and Landlord shall promptly restore and rebuild the
Building and/or the Demised Premises (excluding the Tenant Improvement Work
performed by Landlord pursuant to Exhibit B and Tenant's trade fixtures,
equipment, and personal property) at Landlord's expense unless Landlord elects
by notice to Tenant within ninety (90) days of the Casualty not to restore and
rebuild the Building and/or Demised Premises, and, in such case, upon a date
specified in said notice by Landlord, this Lease shall terminate. If Landlord
elects to restore and rebuild the Demised Premises, then during the period of
restoration of any such area, if any portion of the Demised Premises is rendered
untenantable by said damage and Tenant is able to conduct its business in the
remaining portion of the Demised Premises, Tenant waives the benefit of N.J.S.A.
46:8-6 and 46:8-7 and agrees that Tenant will not be relieved of its obligation
to pay Fixed and Additional Rent in case of damage to or destruction of the
Demised Premises or the Building, except with respect to the portion of the
Fixed and Additional Rent herein reserved that relates to said untenantable
portion only. Tenant acknowledges that Landlord will not carry insurance on
Tenant's furniture, furnishings, fixtures, equipment, personal property, Tenant
Improvements, and other Alterations; therefore, Tenant agrees that Landlord
shall have no obligation to repair any damage to the same. Within 45 days after
the occurrence of any Casualty, Landlord shall deliver to Tenant an estimate
(the "Estimate") prepared by an independent reputable contractor selected by
Landlord, reasonably acceptable to Tenant, licensed to perform construction work
in the State of New Jersey and experienced with estimating the construction cost
of comparable Buildings, setting forth such contractor's good faith estimate as
to the time reasonably required to perform Landlord's restoration work. If the
estimated restoration period set forth in the applicable Estimate (the
"Estimated Restoration Period") exceeds 12 months from the date of the Casualty
(6 months in the event the Casualty occurs within the last 2 years of the Term,
including any exercised Renewal Term), Landlord or Tenant may elect to terminate
this Lease by notice ( a "Casualty Termination Notice") to the other party given
not later than 60 days following Tenant's receipt of the Estimate. If the
Estimated Restoration Period is less than 12 months from the date of the
Casualty (6 months in the event the Casualty occurs within the last 2 years of
the Term, including any exercised Renewal Term), and, subject to the provisions
of Xxxxxxxxx 00, Xxxxxxxx shall not substantially complete Landlord's
Restoration Work on or before the thirtieth (30th) day following the end of the
Estimated Restoration Period (such 30th day following the end of the Estimated
Restoration Period, the "Outside Restoration Completion Date"), then Tenant
shall have the right to terminate this Lease by giving a Casualty Termination
Notice to Landlord at any time after the Outside Restoration Completion Date but
prior to the later of thirty (30) days and the date on which Landlord's
Restoration Work has been substantially completed.
(b) Tenant shall, at Tenant's sole cost and expense, except to the
extent prohibited by law with respect to worker's compensation insurance, for
the benefit of Tenant, Landlord, and any Additional Insured (as hereinafter
defined) and/or any other additional insured as Landlord shall from time to time
reasonably determine, maintain or cause to be maintained (i) commercial general
liability insurance coverage with a limit of not less than Five Million and
00/100 Dollars ($5,000,000.00) per each occurrence ("CGL"), to include
commercial umbrella liability
16
coverage, if necessary [If the CGL contains a general aggregate, it shall apply
separately to the Demised Premises. The CGL shall be written on ISO occurrence
form CG00011093 or a substitute providing equivalent coverage and shall cover
liability arising from the Demised Premises, operations, independent
contractors, products-completed operations, personal injury, advertising
liability, and liability under an insured contract. The commercial umbrella
liability coverage shall be consistent with the primary coverage.]; (ii)
worker's compensation insurance covering all persons employed in connection with
the construction of any improvements by Tenant and the operation of its business
upon the Demised Premises; and (iii) "all risk" coverage on all of Tenant's
personal property, including, but not limited to, standard fire and extended
coverage insurance with vandalism and malicious mischief endorsements on all of
the Tenant Improvements and Alterations in or about the Demised Premises, to the
extent of their full replacement value. If, in the reasonable opinion of any
mortgagees or ground lessors of the Land and/or the Building, the foregoing
coverages and/or limits shall become inadequate or less than that commonly
maintained by prudent tenants in similar buildings in the area by tenants making
similar uses, Landlord shall have the right to require Tenant to increase its
insurance coverage and/or limits. All such insurance shall, to the extent
permitted by law, name any mortgagees and ground lessors of the Land and the
Building and their successors and assigns ("Additional Insureds") and Landlord,
as additional insureds and shall be written by an insurance carrier authorized
to do business in the State of New Jersey and that is rated at least A+ XII by
A.M. Best Company, Oldwick, New Jersey.
(c) Prior to the Commencement Date, Tenant shall deliver to Landlord a
certificate of each policy required under this Lease, which certificate shall be
in a form reasonably satisfactory to Landlord and shall, at a minimum: (i)
specify the additional insured status of Landlord and of the Additional
Insureds, (ii) evidence the waiver of subrogation required pursuant to Paragraph
10(d), and (iii) provide that said policy shall not be reduced in amount (or
otherwise materially changed) or canceled or lapse without providing to Landlord
at the address specified in Paragraph 18 of this Lease at least thirty (30)
days' written notice of such reduction (or other material change), cancellation,
or lapse. Tenant agrees to provide to Landlord timely renewal certificates as
the coverage renews. Notwithstanding anything herein to the contrary, all
policies required to be effected by Tenant under this Lease shall be maintained
in force throughout the Term or any Renewal Term.
(d) Landlord and Tenant waive all rights of recovery against each
other and the Additional Insureds for any loss, damages, or injury of any nature
whatsoever to property for which the waiving party is required to be insured. In
addition, during the Term, Landlord and Tenant shall each maintain in effect in
each insurance policy required under this Lease that relates to property damage
a waiver of subrogation in favor of the other party and the Additional Insureds
from its then-current insurance carriers and shall upon written request of the
other party (made not more frequently than two (2) times each Lease Year)
furnish evidence of such currently effective waiver which shall be in customary
form.
(e) Each insurance policy required to be maintained under this Lease
shall state that, with respect to the interest of Landlord and of the Additional
Insureds, the insurance maintained pursuant to each such policy shall not be
invalidated by any action or inaction of Tenant and shall insure Landlord and
the Additional Insureds regardless of any breach or violation of any warranties,
declarations, conditions, or exclusions by Tenant.
(f) Each insurance policy required to be maintained under this Lease
shall state that all provisions of each such insurance policy, except for the
limits of liability, shall operate in the same manner as if a separate policy
had been issued to each person or entity insured thereunder.
17
(g) Each insurance policy required to be maintained under this Lease
shall state that the insurance provided thereunder is primary insurance without
any right of contribution from any other insurance which may be carried by or
for the benefit of Landlord or the Additional Insureds.
(h) Each insurance policy required to be maintained under this Lease
shall recognize the indemnification set forth in Paragraph 11 of this Lease.
(i) The failure of Tenant or Landlord to maintain any of the insurance
required under this Lease, or to cause to be provided in any insurance policy
the requirements set forth in this Paragraph 10, shall constitute a default
under this Lease.
(j) Landlord shall maintain or cause to be maintained: (i) commercial
general public liability insurance in respect of the Building and the conduct
and operation of its business therein, with combined base and umbrella coverage
limits of not less than Ten Million and 00/100 Dollars ($10,000,000.00) for
bodily injury or death and property damage in any one occurrence, including
water damage and sprinkler leakage legal liability; and (ii) fire and extended
coverage insurance (including, without limitation, rent insurance) in respect of
the Building (including, without limitation, the Common Areas) (except for the
property Tenant is required to cover with insurance under Paragraph 10(b) and
similar property of other tenants and occupants in the Building) for the benefit
of the Additional Insureds, as their interests may appear. The fire and extended
coverage insurance with respect to the Building shall be in the amount of full
replacement value. Landlord shall have the right to provide any insurance
maintained or caused to be maintained by it under blanket policies provided that
such policies shall in all other respects comply with the requirements of this
Paragraph 10(j). The cost of maintaining the insurance required of Landlord
under this subparagraph (j) shall be an Operating Expense under Paragraph 3
hereof.
11. Indemnification.
---------------
(a) Tenant shall indemnify, defend, and hold harmless Landlord, the
Additional Insureds, any mortgagee, and any lessor under any underlying leases
or ground leases, from and against any expense (including, without limitation,
reasonable legal and collection fees), loss, liability, or damages (excluding
consequential damages) suffered or incurred as a result of or in connection with
(a) any breach of Tenant of its obligations contained in this Lease, or (b) its
acts or the acts of its agents, servants, invitees, contractors, or employees.
This provision shall survive the expiration or sooner termination of this Lease.
(b) Landlord shall defend, indemnify and hold harmless Tenant and any
partner, principal, director, officer, agent or employee of Tenant from and
against any and all claims, demands, liability, loss, damage, costs and expenses
(including reasonable attorneys' fees and disbursements) arising from or in
connection with any personal injury, death or property damage occurring in the
common areas of the Land and Building to the extent caused by the negligence or
willful misconduct of Landlord, or any contractor, agent, employee, partner,
principal, director or officer of Landlord. If any claim, action or proceeding
is brought against any of the persons indemnified under this section for a
matter covered by this indemnity,
18
Landlord, upon notice from the indemnified person, shall defend such claim,
action or proceeding by counsel reasonably satisfactory to Tenant and the
indemnified person.
12. Non-Liability of Landlord. Landlord shall not be liable for
-------------------------
(and Tenant shall make no claim for) any property damage or personal injury that
may be sustained by Tenant or by any other person as a consequence of the
failure, breakage, leakage, inadequacy, defect, or obstruction of the water,
plumbing, steam, sewer, waste or soil pipes, roof drains, leaders, gutters,
valleys, downspouts, or the like or of the electrical, gas, power, conveyor,
refrigeration, sprinkler, air conditioning, or heating systems, elevators or
hoisting equipment; or by reason of the elements; or resulting from the
carelessness, negligence, or improper conduct on the part of any other tenant of
Landlord or on the part of Landlord's or Tenant's or any other tenant's agents,
employees, guests, licensees, invitees, subtenants, assignees, or successors; or
except as expressly set forth herein attributable to any interference with,
interruption, or failure of any services or utilities to be furnished or
supplied by Landlord. Tenant shall give Landlord prompt written notice of the
occurrence of any events set forth in this Paragraph 12.
13. Remedies and Termination Upon Tenant Default.
--------------------------------------------
(a) In the event that:
(i) Tenant shall default in the payment of any Fixed Rent, or any
Additional Rent, or other charge payable monthly hereunder by Tenant to
Landlord, on any date upon which the same becomes due, and such default shall
continue for seven (7) days after the notice thereof by Landlord to Tenant; or
(ii) Tenant shall default in the payment of any Additional Rent,
or any other charge payable hereunder which is not due and payable hereunder on
a monthly basis, on any date upon which the same becomes due, and such default
shall continue for ten (10) days after Landlord shall have given to Tenant a
written notice specifying such default; or
(iii) Tenant shall use the Demised Premises for an illegal
purpose and such shall continue and shall not be remedied by Tenant within five
(5) days after Landlord shall have given to Tenant a written notice specifying
the same; or
(iv) Tenant shall default in the due keeping, observing, or
performing of any covenant, agreement, term, provision, or condition of this
Lease on the part of Tenant to be kept, observed, or performed (other than a
default of the character referred to in clauses (i) or (ii) of this Paragraph
13(a), and if such default shall continue and shall not be remedied by Tenant
within thirty (30) days after Landlord shall have given to Tenant a written
notice specifying the same unless the nature of such failure is such that it
cannot reasonably be cured within such thirty (30) day period and (a) within the
aforesaid thirty (30) day period Tenant notifies Landlord that it intends to
cure such failure and actually commences to cure such failure, and (b) Tenant
thereafter diligently proceeds to complete such cure within a reasonable time;
then, Landlord may, in addition to any other remedies herein
contained, as may be permitted by law, without being liable for prosecution
therefor, or for damages, re-enter the Demised Premises and have and again
possess and enjoy the same; and as agent for Tenant or
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otherwise, re-let the Demised Premises and receive the rents therefor and apply
the same first to the payment of such expenses, reasonable attorneys' fees and
costs, as Landlord may have been put to in re-entering and repossessing the same
and in making such repairs and alterations as may be necessary and second to the
payment of the rents due hereunder. In addition to any post-judgment collection
fees, Tenant shall remain liable for such rents as may be in arrears and also
the rents as may accrue subsequent to the re-entry by Landlord to the extent of
the difference between the rents reserved hereunder and the rents, if any,
received by Landlord during the remainder of the unexpired Term hereof, after
deducting the aforementioned expenses, fees, and costs; the same to be paid as
such deficiencies arise and are ascertained each month. Landlord, at its option,
may require Tenant to pay in a single lump sum payment, at the time of such
termination or re-entry, as the case may be, a sum which represents the present
value (using a discount rate of four (4%) percent per annum) of the excess of
the aggregate of the Fixed Rent that would have been payable by Tenant for the
period commencing with such termination or re-entry, as the case may be, and
ending on the originally fixed Expiration Date of the Term, over the aggregate
rental value of the Demised Premises for the same period. Nothing contained in
this Lease shall be construed to impose upon Landlord the duty to mitigate
damages in the event of a default by Tenant.
(b) Upon the occurrence of any of the contingencies set forth in the
preceding subparagraph (a) of this Paragraph 13, or should Tenant be adjudicated
bankrupt or insolvent or placed in receivership, or should proceedings be
instituted by or against Tenant for bankruptcy, insolvency, receivership,
agreement of composition, or assignment for the benefit of creditors and such
proceedings, if instituted against Tenant, shall not be dismissed within sixty
(60) days after the commencement thereof, or if this Lease or the estate of
Tenant hereunder shall pass to another by virtue of any court proceedings, writ
of execution, levy, sale, or by operation of law, Landlord may, if Landlord so
elects, at any time thereafter, terminate this Lease and the Term hereof, upon
giving to Tenant or to any trustee, receiver, assignee, or other person in
charge of or acting as custodian of the assets or property of Tenant, five (5)
days' notice in writing of Landlord's intention so to do. Upon the giving of
such notice, this Lease and the Term hereof shall end on the date fixed in such
notice as if the same date were the Expiration Date; and Landlord shall have the
right to remove all persons, goods, fixtures, and chattels therefrom by force or
otherwise without liability for damages.
(c) Tenant hereby appoints Landlord attorney-in-fact, irrevocably, to
execute and deliver, on behalf of Tenant, any document reasonably needed by
Landlord during any period Tenant is in default of any terms and provisions of
this Lease beyond any applicable notice and cure period.
14. Remedies Cumulative; Non-Waiver By Landlord. The various rights,
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remedies, options, and elections of Landlord expressed herein are cumulative,
and the failure of Landlord to enforce strict performance by Tenant of the
conditions and covenants of this Lease, to exercise any election or option, or
to resort or have recourse to any remedy herein conferred, or the acceptance by
Landlord of any installment of rent after any breach by Tenant, in any one or
more instances, shall not be construed or deemed to be a waiver or a
relinquishment for the future by Landlord of any such conditions and covenants,
options, elections, or remedies, but the same shall continue in full force and
effect.
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15. Services; Repairs; Electric Energy
----------------------------------
(a) During Business Hours, Landlord shall (i) supply heating,
ventilation, and air conditioning to the Demised Premises in accordance with the
HVAC specifications attached hereto as Schedule I; (ii) provide snow and ice
removal for the parking area, sidewalks, and driveways in a reasonably
expeditious manner; and (iii) provide refuse removal from a dumpster to be
provided on site to be used for normal paper waste attendant to an office
building. Tenant agrees at all times to cooperate fully with Landlord and to
abide by all the regulations and requirements that Landlord may reasonably
prescribe for the proper functioning and protection of such air conditioning
system. Landlord shall clean the Demised Premises in accordance with the
cleaning schedule annexed hereto as Exhibit D. Except as hereafter provided, the
cost of the services and utilities provided pursuant to this Paragraph 15(a) is
included in Operating Expenses, as defined in Paragraph 3(a).
(b) Landlord reserves the right, without liability to Tenant and
without constituting any claim of constructive eviction, to stop or interrupt
any heating, lighting, ventilating, air conditioning, gas, steam, power,
electricity, water, or other service and to stop or interrupt the use of any
building or Building facilities at such times as may be necessary and for as
long as may reasonably be required by reason of accidents, strikes, or the
making of repairs, alterations, or improvements, or inability to secure a proper
supply of fuel, gas, steam, water, electricity, labor or supplies, or by reason
of any other similar or dissimilar cause beyond the reasonable control of
Landlord. No such stoppage or interruption shall entitle Tenant to any
diminution or abatement of rent or other compensation, nor shall this Lease or
any of the obligations of Tenant be affected or reduced by reason of any such
stoppage or interruption.
(c) Notwithstanding anything contained herein to the contrary, but
subject to the provisions of Paragraph 25, below, in the event that the Demised
Premises or any portion thereof (provided that such portion is more than a de
minimis portion which has no material adverse effect on the efficient conduct of
Tenant's business from the Demised Premises) becomes untenantable (which means
that a typical office tenant would be unable to conduct normal office operations
in the Demised Premises) and is not in fact used by Tenant, for 5 consecutive
business days (the "Eligibility Period") as a result of any failure to provide
water (for bathroom, but not drinking or other, purposes), electricity, life
safety (manual and automatic), HVAC or passenger elevator service to the Demised
Premises as and to the extent required to be provided pursuant to the terms of
this Lease and so long as the same is neither due to the actions or omissions of
Tenant, its partners, employees, agents, invitees, contractors or permitted
subtenants or permitted occupants, then Tenant's Fixed Rent and Additional Rent
shall be abated or reduced, as the case may be, during the period that Tenant is
so prevented from using, and does not use, the Demised Premises in the
proportion that the Rentable Area of the portion of the Demised Premises that
Tenant is prevented from using, and does not use, bears to the Total Rentable
Area of the Demised Premises. In addition, if Tenant is prevented from
conducting, and does not conduct, its business in any portion of the
21
Premises for a period of time in excess of the Eligibility Period, and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then during the period which Tenant is so
prevented from effectively conducting its business therein, such Rent for the
entire Premises shall be abated; provided, however, that if Tenant reoccupies
and conducts its business from any portion of the Premises during such period,
such Rent allocable to such reoccupied portion, based on the proportion that the
Rentable Area of such reoccupied portion of the Premises bears to the total
Rentable Area of the Premises, shall be payable by Tenant from the date such
business operations commence. Notwithstanding the foregoing, in the event that
Tenant is entitled to an abatement pursuant to this section and all or a portion
of the abatement period occurs prior to the rent Commencement Date, the rent
Commencement Date shall be extended one day for each day of abatement to which
Tenant shall be entitled.
(d) Landlord shall furnish to Tenant, through the transmission
facilities installed in the Building, electric energy at a minimum of ten (10)
xxxxx (including mechanical load) per rentable square foot to be used by Tenant,
at Tenant's expense as provided for in this Paragraph 15.
(e) Landlord has installed an electrical meter so as to measure the
consumption of electricity in the Building and the common areas of the Land.
During the time that Tenant is leasing all of the Rentable Area in the Building,
Landlord and Tenant shall arrange with the electric utility to have all electric
bills sent directly to Tenant who shall pay same directly to the utility.
(f) In the event that Tenant shall require electric energy for use in
the Building in excess of the quantity to be initially furnished pursuant to
Exhibit B and if, in Landlord's reasonable judgment, such excess requirements
cannot be furnished unless additional risers, conduits, feeders, switchboards,
and/or appurtenances are installed in the Building, Landlord, upon written
request of Tenant, shall proceed with reasonable diligence to install such
additional risers, conduits, feeders, switchboards, and/or appurtenances,
provided the same and the use thereof shall not cause permanent damage or injury
to the Building or the Demised Premises, or cause or create a dangerous or
hazardous condition, or entail excessive or unreasonable alterations or repairs,
or interfere with or disrupt other tenants or occupants of the Building, and
Tenant agrees to pay all costs and expenses incurred by Landlord in connection
with such installation.
(g) Landlord, at Tenant's expense, shall purchase and install all
lamps (including, but not limited to, incandescent and fluorescent), starters,
and ballasts used in the Demised Premises.
(h) Tenant agrees that Tenant shall not make any material alteration
or material addition to the electrical equipment and/or appliances in the
Demised Premises without the prior written consent of Landlord in each instance,
which Landlord shall not unreasonably withhold, condition or delay.
(i) During the period when the second (2d) floor of the Building is
being temporarily occupied by another tenant (the "other tenant"), prior to the
Commencement Date hereunder for such space, the electric xxxx for the Building
shall be paid by Landlord who shall xxxx Tenant for the amount thereof, reduced
by (i) the cost of electricity consumed by the other tenant in its space, as
established by a check meter, and (ii) thirty three percent (33%) of the
electricity charges attributable to the common areas of the Land and Building,
excluding the tenanted portion thereof, as reasonably estimated by Landlord.
Landlord's xxxx for such
22
electricity to Tenant shall be payable within thirty (30) days as Additional
Rent. If Tenant disagrees with any of the above estimations by Landlord, the
parties shall jointly select an electricity surveyor who shall conclusively
determine the appropriate deductions from Tenant's electricity charges. The fee
of the surveyor shall be shared equally by Landlord and Tenant.
(j) If, at any other time during the Term, Tenant ceases to lease all
of the Rentable Area of the Building, Landlord shall resume the payment of the
electric xxxx for the Building And shall xxxx Tenant for (i) the cost of
electricity consumed by Tenant in the Demised Premises and (ii) Tenant's
proportionate share (as defined in Paragraph 3(h)) of the cost of electricity
consumed in the common areas of the Land and Building. Tenant's electricity cost
shall be reasonably estimated by Landlord on the basis of check meters and/or
electric surveys. Any disputes between Landlord and Tenant with respect to such
electricity charges shall be determined by an electricity surveyor, as described
in subparagraph (i) above. All electricity charges shall be Additional Rent,
payable within thirty (30) days after billing.
16. Subordination. Landlord covenants that no mortgage or ground lease
-------------
will exist with respect to the Land and Building superior to Tenant's rights
hereunder, upon execution of this Lease. Upon Landlord's acquisition of title to
the Land and Building, Landlord shall deliver to Tenant a copy of Landlord's
title insurance policy, or marked-up binder, demonstrating the absence of a
mortgage on the Land and Building. Provided that Landlord shall deliver to
Tenant a subordination, nondisturbance and attornment agreement in form
reasonably satisfactory to Tenant and Landlord's mortgagee, this Lease is
subject and subordinate in all respects to any underlying leases, ground leases,
licenses, or agreements, and to all mortgages which may hereafter be placed on
or affect such leases, licenses, or agreements or the Land or the Demised
Premises, and also to all renewals, modifications, consolidations, and
extensions of such underlying leases, ground leases, licenses, agreements, and
mortgages. Although no instrument or action on the part of Tenant shall be
necessary to effectuate such subordination, Tenant shall, nevertheless, execute
and deliver such further instruments confirming such subordination as may
reasonably be desired by any holder of any such mortgage or by any lessor,
licensor, or party to an agreement under any such underlying lease, ground
lease, license, or agreement, respectively. If any underlying lease, ground
lease, license, or agreement to which this Lease is subject and subordinate
terminates, or if any mortgage to which this Lease is subordinate is foreclosed,
Tenant shall, on timely request, attorn to the holder of the reversionary
interest or to the mortgagee in possession, as the case may be. If Landlord
shall notify Tenant in writing that the Demised Premises or Building is
encumbered by a mortgage (which notice shall contain the name and address of the
mortgagee), then notwithstanding anything in this Lease to the contrary, no
notice intended for Landlord shall be deemed properly given unless a copy
thereof is simultaneously sent to such mortgagee in the manner provided for in
Paragraph 18.
17. Curing Tenant's and Landlord's Defaults.
---------------------------------------
(a) If Tenant shall fail or refuse to comply with and perform any
conditions and covenants of this Lease, Landlord may, if Landlord so elects,
carry out and perform such conditions and covenants, at the cost and expense of
Tenant, and said cost and expense shall be payable on demand, or, at the option
of Landlord, shall be added to the installment of Monthly Fixed Rent due
immediately thereafter but in no case later than one
23
month after such demand, whichever occurs sooner, and shall be due and payable
as such. This remedy shall be in addition to such other remedies Landlord may
have hereunder by reason of the breach of Tenant of any of the covenants and
conditions in this Lease contained.
(b) Landlord shall be in default of this Lease if it fails to perform
any obligation of Landlord under this Lease and if such failure is not cured
within thirty (30) days after written notice thereof is given by Tenant to
Landlord and any first mortgagee(s); however, if said failure cannot reasonably
be cured within thirty (30) days, Landlord shall not be in default of this Lease
if Landlord commences to cure the failure within the thirty (30) day period and
diligently continues to cure the default. If Landlord does not cure a default in
accordance with the foregoing time periods, Tenant shall give to Landlord's
first mortgagee(s), if any, an additional notice of such default (in addition to
the notice required to be given pursuant to Paragraph 16) and an additional five
(5) day cure period. If such default remains uncured after the expiration of the
first mortgagee's cure period, Tenant may cure the default at Landlord's
expense. If Tenant pays any reasonable sum in order to cure Landlord's default,
such reasonable sum shall be reimbursed by Landlord to Tenant upon thirty (30)
days' written notice, which notice shall include supporting documentation. If
Landlord fails to so reimburse Tenant and if the existence of the default is not
being disputed by Landlord, Tenant may withhold from future Fixed Rent payments
due and owing the sum owed to Tenant. If the default is being disputed by
Landlord, Tenant may not offset its rent obligations until the existence of
Landlord's default and Tenant's entitlement to reimbursement hereunder has been
established by the judgment of a court of competent jurisdiction.
18. Notices. Any notice, demand, statement, or other communication which
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under the terms of this Lease or under any statute or law must or may be given
shall be given by hand delivery; or by registered or certified mail, return
receipt requested; or by reputable private overnight delivery service providing
a receipt of delivery or refusal, delivered, or addressed to the respective
parties at the following address:
To Landlord: c/o Gale & Wentworth, LLC
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxx Xxxxx
AND
c/o Gale & Wentworth, LLC
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxxxxx
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To Tenant: Prior to the Commencement Date, at its address stated in the opening
recital and, after the Commencement Date, at the Demised Premises, with a copy
to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxxx, Esq.
Any such notice, demand, statement, or other communication shall be deemed to
have been given or made upon delivery or the date on which delivery was refused.
Legal counsel for the respective parties may provide the requisite notice(s)
hereunder on behalf of their respective client.
19. Quiet Enjoyment. Landlord covenants that Tenant, upon keeping and
performing each and every covenant, agreement, term, provision, and condition
herein contained on the part and on behalf of Tenant to be kept and performed,
shall quietly enjoy the Demised Premises without hindrance or molestation by
Landlord or by any other person lawfully claiming by, through, or under the
same, subject to the covenants, agreements, terms, provisions, and conditions of
this Lease and the effects of the application of same.
20. Security Deposit. Tenant has this day deposited with Landlord the
Security Deposit for the payment of the Fixed Rent, Additional Rent, and other
charges hereunder and the full and faithful performance by Tenant of the
covenants and conditions on the part of Tenant to be performed. Tenant, in lieu
of cash, may deliver to Landlord, as the Security Deposit, an irrevocable
negotiable letter of credit (the "Letter of Credit") by and drawn on a bank or
trust company reasonably approved by Landlord, in form and content acceptable to
Landlord for its account in the amount of the Security Deposit. The expiration
date of the Letter of Credit shall be the sixtieth (60th) day after the
Expiration Date. Upon Landlord's demand, Tenant, at its expense, shall revise
the Letter of Credit by changing the beneficiary thereunder to whomever Landlord
or its managing agent may designate from time to time. Tenant shall deliver the
revised Letter of Credit naming the new beneficiary within thirty (30) days
after Landlord requests delivery of same. Failure to deliver such revised Letter
of Credit within the aforementioned thirty (30) day period shall be a breach of
this Lease, and Landlord shall have the right, among other remedies provided
hereunder, to present the existing Letter of Credit for payment in full, draw
thereon, and either to apply or retain the proceeds thereof in accordance with
this Paragraph, or to assign such proceeds to any Building purchaser of
Landlord. The Security Deposit shall be returned to Tenant, with interest if
cash, after the expiration of the Term hereof, provided that Tenant has fully
and faithfully performed all such covenants and conditions and is not in arrears
in Fixed Rent, Additional Rent, and other charges. During the Term hereof,
Landlord may, if Landlord so elects, have recourse to such security, to make
good any default by Tenant, in which event Tenant shall, on demand, promptly
restore said security to its original amount. Liability to repay said security
to Tenant shall run with the reversion and title to the Demised Premises,
whether any change in ownership thereof be by voluntary alienation or as the
result of judicial sale, foreclosure, or other proceedings, or the exercise of a
right of taking or entry by any mortgagee. Landlord shall assign or transfer
said security, for the benefit of Tenant, to any subsequent owner or holder of
the reversion or title to Demised Premises, in which case the assignee shall
become liable for the repayment thereof as herein
25
provided, and the assignor shall be deemed to be released by Tenant from all
liability to return such security. Subparagraph 1X of the Preamble provides for
reductions in the amount of the Security Deposit in certain stages throughout
the Term. These reductions shall only take place if, at the scheduled time for a
reduction, Tenant is not in default under this Lease beyond any applicable
notice and grace period pursuant to Paragraph 13. If Tenant fails to meet this
requirement, the amount of the Security Deposit shall not be reduced, but shall
remain at its existing level for an additional three (3) years, at which time
the foregoing requirement shall once again apply to a reduction to the
next-lower amount stipulated in the Preamble.
21. Inspection and Entry by Landlord.
--------------------------------
(a) During the Term, Tenant agrees to permit Landlord and Landlord's
agents, employees, or other representatives to show the Demised Premises to any
lessor under any underlying lease or ground lease or any mortgagee or any
persons wishing to rent or purchase the same or the Building. In addition,
Tenant agrees that, from and after the twelfth (12th) month preceding the
Expiration Date, Landlord or Landlord's agents, employees, or other
representatives shall have the right to show the Demised Premises to any
prospective tenants.
(b) Tenant agrees that Landlord and Landlord's agents, employees, or
other representatives, shall have the right to enter into and upon the Demised
Premises or any part thereof, at all reasonable hours, for the purpose of
inspecting the same, or reading meters, or performing maintenance, or, subject
to Article 15 hereof, making such repairs or alterations therein as may be
necessary for the safety and preservation thereof. This clause shall not be
deemed to be a covenant by Landlord nor be construed to create an obligation on
the part of Landlord to make such inspection or repairs.
22. Brokerage. Tenant and Landlord warrant and represent to each other
---------
that neither has dealt with any broker or brokers regarding the negotiation of
this Lease, other than the Designated Broker. Tenant and Landlord agree to be
responsible for and to indemnify and hold the other harmless from and against
any claim for a commission or other compensation by any broker other than the
Designated Broker claiming to have negotiated with the indemnifying party with
respect to the Demised Premises or to have called the said Demised Premises to
Tenant's attention or to have called Tenant to Landlord's attention. Landlord
agrees to pay the commission or other compensation of the Designated Broker in
accordance with a separate agreement between Landlord and the Designated Broker.
23. Parking. Tenant shall have the right under this Lease to the
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exclusive use of the parking spaces on the Land, as depicted on the parking plan
attached hereto as Exhibit E. Prior to Tenant's occupancy of the second (2d)
floor of the Building, the temporary occupant of such floor shall have the right
to use the parking spaces so designated for such occupant on Exhibit E. Tenant
shall comply with such reasonable Rules and Regulations as Landlord may
promulgate from time to time with respect to said parking.
24. Renewal Options.
---------------
(a) Tenant is hereby granted two (2) successive option(s) to renew
this Lease for a Renewal Term of five (5) years each, subject to the terms of
this Paragraph 24. In
26
the event that Tenant desires to renew this Lease, it shall give notice in
writing to Landlord of its intention to renew the Lease at least twelve (12)
months prior to the Expiration Date and at least twelve (12) months prior to the
expiration of the (first) Renewal Term, as the case may be. During each of the
Renewal Terms, Tenant shall lease the Demised Premises in its "AS IS" condition
and all of the terms and conditions of this Lease shall otherwise remain in
effect during each of the Renewal Terms, except that the annual Fixed Rent
payable during each of the Renewal Terms shall be the annual fair market renewal
rental value of the Demised Premises based on a comparison of the rents and
accrued escalations then being paid by tenants renewing leases for comparable
space in the competitive market area of the Demised Premises, excluding from
consideration rent concessions made to tenants leasing space initially, but
taking into consideration the designation of the Initial Year for Operating
Expense and Real Estate Tax purposes, rent concessions made to tenants renewing
leases and the fact that Tenant is leasing the Demised Premises "As Is" ("Fair
Market Renewal Rent"); provided, however, that in no event shall the annual
Fixed Rent be less than the annual Fixed Rent payable during the year proceeding
the first year of each such Renewal Term. In the event the Fixed Rent to be paid
during either Renewal Term increases over the amount paid during the year
preceding the first year of each such Renewal Term, Landlord may, at its sole
option, require Tenant to pay, on or before the commencement of the applicable
Renewal Term, a proportionate increase in the Security Deposit, if any. During
any Renewal Term, the Initial Year Operating Expenses and Initial Year Real
Estate Taxes shall be the calendar year in which the renewal occurs.
(b) The Fair Market Renewal Rent of the Demised Premises for purposes
of subparagraph (a) of this Paragraph 24 shall take into account the provisions
of this Lease and shall be determined pursuant to the provisions of this
Paragraph 24(b). Within thirty (30) days after Landlord receives notice of
Tenant's intention to renew this Lease, Landlord shall notify Tenant of
Landlord's determination of the Fair Market Renewal Rent. Within thirty (30)
days after Tenant's receipt of Landlord's determination, Tenant shall notify
Landlord whether Tenant accepts or rejects said determination. If Tenant objects
to Landlord's determination and the parties are unable to resolve the dispute
within fifteen (15) days after Landlord's receipt of Tenant's objection, then
Tenant shall have the right, at its discretion, to either rescind its notice of
intention to renew this Lease or to implement the appraisal process hereinafter
described. If Tenant fails to give Landlord notice of its intention to rescind
its renewal notice by the first day of the ninth (9th) month preceding the then
Expiration Date (or by the first day of the ninth (9th) month preceding the
expiration date of the first Renewal Term, as the case may be), Tenant shall be
deemed to have waived its right to rescind pursuant to the terms of this
Paragraph 24; if Tenant elects to implement the appraisal process, Landlord and
Tenant each agree to be bound by the Fair Market Renewal Rent determined by said
process. In the event Tenant has elected to implement the appraisal process,
then each party, at their own expense, shall designate an MAI or SREA appraiser
in the Xxxxxx County area who shall then determine and promptly report to both
parties in writing the Fair Market Renewal Rent of the Demised Premises. If,
after receiving the appraisers' reports, the parties are unable to agree on the
Fair Market Renewal Rent, both parties shall jointly appoint a separate MAI or
SREA appraiser who shall determine the Fair Market Renewal Rent by selecting
either Landlord's appraiser's Fair Market Renewal Rent determination or Tenant's
appraiser's Fair Market Renewal Rent determination according to whichever of the
two valuations is closer to the actual Fair Market Renewal Rent in the opinion
of such third appraiser. The costs of such third appraiser shall be shared
equally by Landlord and Tenant.
27
(c) Time shall be of the essence of this Lease with respect to the
time periods which Tenant must provide the notices to renew or rescind its
renewal as set forth in subparagraph (b) of this Paragraph 24.
(d) It shall be a condition of the exercise of the option set forth in
this Paragraph 24, that at the time of the exercise of said option, Tenant shall
not be in default under this Lease beyond applicable notice and cure periods.
(e) Tenant acknowledges and agrees that Tenant shall not have the
right to exercise the renewal option(s) set forth herein if it has sublet, or
has otherwise vacated, fifty (50%) percent or more of the amount of Rentable
Area leased by Tenant as of the Commencement Date.
25. Landlord's Inability to Perform. This Lease and the obligation of
-------------------------------
Tenant to pay the rent hereunder and to comply with the covenants and conditions
hereof shall not be affected, curtailed, impaired, or excused because of
Landlord's inability to supply any service or material called for herein, by
reason of any rule, order, regulation, or preemption by any governmental entity,
authority, department, agency, or subdivision, or for any other reason
constituting Force Majeure. Force Majeure shall mean acts of God, accidents,
such as fire or other casualty, and public emergencies, such as war or other
national disaster.
26. Condemnation.
------------
(a) In the event that the whole of the Demised Premises shall be
lawfully condemned or taken in any manner for any public or quasi-public use or
purpose or is transferred, under threat of condemnation, by Landlord to any
party having the right of condemnation (any of such acts are referred to herein
as "eminent domain"), this Lease and the Term and estate hereby granted shall
forthwith cease and terminate as to the date of vesting of title ("date of
taking"), and Tenant shall have no claim against Landlord for, or make any claim
for the value of, any unexpired term of this Lease, and the Fixed Rent and
Additional Rent shall be apportioned as of such date.
(b) In the event that any part of the Demised Premises shall be so
condemned or taken, this Lease shall be and remain unaffected by such
condemnation or taking, except that the Fixed Rent and Additional Rent allocable
to the part so taken shall be apportioned as of the date of taking, and Tenant
shall have no claim against Landlord for, or make any claim for the value of,
the portion of the unexpired Term of this Lease allocable to the part so taken,
provided, however, that either Landlord or Tenant may elect to cancel this Lease
in the event that more than twenty-five (25%) percent of the Demised Premises
should be so condemned or taken, provided such notice of election is given by
Landlord to Tenant not later than sixty (60) days after the date when title
shall vest in the condemning authority. Upon the giving of such notice, this
Lease shall terminate on the thirtieth (30th) day following the date of such
notice, and the Fixed Rent and Additional Rent shall be apportioned as of such
termination date, and Tenant shall have no claim against Landlord for, or make
any claim for the value of, the unexpired Term of this Lease. Upon such partial
taking and this Lease continuing in force as to any part of the Demised
Premises, the Fixed Rent and Additional Rent shall be diminished by an amount
representing the part of the Fixed Rent and Additional Rent properly applicable
to the portion or
28
portions of the Demised Premises that may be so condemned and shall be reduced
proportionately. If, as a result of the partial taking (and this Lease
continuing in force as to the part of the Demised Premises not so taken), any
part of the Demised Premises not taken is damaged, Landlord agrees with
reasonable promptness to commence the work necessary to restore the damaged
portion to the condition existing immediately prior to the taking and to
prosecute the same with reasonable diligence to its completion. In the event
Landlord and Tenant are unable to agree as to the amount by which the Fixed Rent
and Additional Rent shall be diminished, the matter shall be determined by a
mutually acceptable third party. Pending such determination, Tenant shall pay to
Landlord the Fixed Rent and Additional Rent as fixed by Landlord, subject to
adjustment upon resolution of such dispute.
(c) Nothing herein provided shall preclude Tenant from appearing,
claiming, proving, and receiving in the condemnation proceeding Tenant's moving
expenses and the value of trade fixtures provided such claim shall be separate
from and shall not materially adversely affect Landlord's award.
(d) Subject to the provisions of Paragraph 26(c), the entire award for
any act of eminent domain shall be paid to Landlord, and, in the event of a
partial taking, if this Lease is not canceled by either party pursuant to the
provisions of this Paragraph 26, Landlord, at Landlord's own expense, shall
restore the unaffected part of the Demised Premises to substantially the same
condition and tenantability as existed prior to the taking. Until said
unaffected portion is restored, Tenant shall be entitled to a proportionate
abatement of Fixed Rent and Additional Rent of that portion of the Demised
Premises that is being restored and is not usable until the completion of the
restoration or until said portion of the Demised Premises is used by Tenant,
whichever occurs sooner. Said unaffected portion shall be restored within a
reasonable time, provided, however, if Landlord is delayed by Force Majeure, the
time for completion shall be extended for a period equivalent to the delay. If
such partial taking shall occur in the last year of the Term, either party,
irrespective of the area of the space remaining, may elect to cancel this Lease
and the Term hereby granted, provided such party shall, within sixty (60) days
after such taking, give notice to that effect, and upon the giving of such
notice, the Fixed Rent and Additional Rent shall be apportioned and paid to the
date of expiration of the term specified, which date shall be not more than
thirty (30) days after the date of such notice, and this Lease and the Term
hereby granted shall cease, expire and come to an end upon the expiration of the
period specified in said notice. If either party shall so elect to end this
Lease and the Term hereby granted, Landlord need not restore any part of the
Demised Premises and the entire award for partial condemnation shall be paid to
Landlord, and Tenant shall have no claim to any part thereof.
(e) If the temporary use or occupancy of all or any part of the
Demised Premises shall be so taken, (i) the Term shall not be reduced or
affected in any way except as provided in (iv) below, (ii) Tenant shall continue
to be responsible for all of its obligations hereunder and shall continue to pay
all Fixed Rent and Additional Rent when due, (iii) Tenant shall be entitled to
receive that portion of the award that represents reimbursement for the cost of
restoration of the Demised Premises, compensation for the use and occupancy of
the Demised Premises and for any taking of Tenant's property, except that, if
the temporary period of taking shall extend beyond the expiration of the Term,
the portion of the award representing compensation for the use and occupancy of
the Demised Premises shall be apportioned between
29
Landlord and Tenant as of the Expiration Date, and Landlord shall receive that
portion of the award which represents reimbursements for the cost of restoration
of the Demised Premises, and (iv) if the date of taking shall occur during the
last year of the Term and the taking shall exceed twenty-five (25%) percent of
the Demised Premises, Tenant may elect to cancel this Lease by notice of
election given by Tenant to Landlord not later than sixty (60) days after the
date when title shall vest in the condemning authority. Upon the giving of such
notice, this Lease shall terminate on the thirtieth (30th) day following the
date of such notice, and the Fixed Rent and Additional Rent shall be apportioned
as of such termination date, with Landlord, and not Tenant, to receive the
portion of the award that represents reimbursement for the cost of restoration
of the Demised Premises and the portion of the award representing compensation
for the use and occupancy of the Demised Premises for the time subsequent to the
cancellation date.
27. Assignment and Subletting.
-------------------------
Tenant may not mortgage, hypothecate, pledge, assign, transfer, or
sublet all or a portion of the Demised Premises or this Lease, as the case may
be, except as specifically permitted in this Paragraph 27.
(a) In the event that Tenant desires to assign this Lease or sublease
all or any portion of the Demised Premises, Tenant shall provide to Landlord the
following information in writing: (i) the terms and conditions of such
assignment or sublease, and (ii) complete and accurate banking, financial, and
other credit information with respect to the proposed assignee or sublessee,
which information must be sufficient to enable Landlord to judge the fiscal
strength of said proposed assignee or sublessee. If Tenant intends to assign the
Lease or to sublet fifty percent (50%) or more of the Demised Premises, then
Landlord shall have the option, exercisable in writing to Tenant within thirty
(30) days after receiving Tenant's request for consent, to recapture the space
intended to be sublet, as the case may be, so that such prospective assignee or
sublessee shall then become the sole tenant of Landlord hereunder, and Tenant
shall be fully released from any and all obligations hereunder with respect to
the Demised Premises, in case of an assignment, or with respect to the space to
have been sublet, in the case of a sublease. Any sale or other transfer, whether
voluntary or involuntary, by operation of law or otherwise of a majority of the
voting stock of Tenant, if Tenant is a corporation, or a majority of the
partnership interests in Tenant, if Tenant is a partnership, shall be an
assignment for purposes of this Paragraph 27 whether such transfer is
accomplished in one (1) transaction or a series of transactions, except for
transactions with an entity into or with which Tenant is merged or consolidated
or to which substantially all its assets are transferred, provided that the
principal purpose of such merger is not the assignment of this Lease and that
the successor has a net worth (computed in accordance with GAAP) at least equal
to Tenant's net worth on the date of this Lease.
(b) In the event that Landlord elects not to (or does not have the
right to) recapture the Lease as hereinabove provided, Tenant may nevertheless
assign or sublet the whole of the Demised Premises, subject to Landlord's prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, and subject to the consent of any mortgagee or ground lessor if
required under the terms of any mortgage or ground lease, on the basis of the
following terms and conditions:
30
(i) Tenant shall provide to Landlord the name and address of the
assignee or sublessee.
(ii) The assignee shall assume, by written instrument, all of the
obligations of this Lease and a copy of such assumption agreement shall be
furnished to Landlord within ten (10) days of its execution.
(iii) Tenant and each assignee shall be and remain liable for the
observance of all of the covenants and provisions of this Lease, including, but
not limited to, the payment of Fixed Rent, Additional Rent, and other charges
due hereunder through the entire Term of this Lease, as the same may be renewed,
extended, or otherwise modified.
(iv) Tenant shall pay to Landlord fifty percent (50%) of any
Assignment Proceeds (as defined below), in the case of and assignment of this
Lease, and fifty percent (50%) of any Sublease Profit, in the event of a
subletting of all or a portion of the Demised Premises; provided, however, that
any consideration paid to Tenant or the owners of Tenant in connection with the
sale of the assets or stock of Tenant shall not be subject to the foregoing
unless a portion of such consideration is specifically allocated to the
assignment of this Lease by the parties to the transaction. As used herein,
"Assignment Proceeds" shall mean all consideration payable to Tenant, directly
or indirectly, by any assignee, or any other amount received by Tenant from or
in connection with any assignment (including, but not limited to, sums paid for
the sale or rental, or consideration received on account of any contribution, of
Tenant's personal property) after deducting therefrom: (1) in the event of a
sale (or contribution) of Tenant's personal property, the then unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (2) the reasonable out-of-pocket costs and expenses of Tenant in
making such assignment, such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (3) any payments required to be made by
Tenant in connection with the assignment of its interest in this Lease pursuant
to Laws or any real property transfer tax of the United States or the State of
New Jersey (other than any income tax), (4) the commercially reasonable cost of
improvements or alterations made by Tenant expressly and solely for the purpose
of preparing the Demised Premises for such assignment, as determined by Tenant's
federal income tax returns, and (5) the unamortized or undepreciated cost of any
Tenant's personal property leased to and used by such assignee. For purposes
hereof (A) "Sublease Profit" shall mean the excess of (x) the Sublease Rent over
(y) the then Fixed Rent, (B) "Sublease Rent" shall mean any rent or other
consideration paid to Tenant directly or indirectly by any subtenant or any
other amount received by Tenant from or in connection with any subletting
(including, but not limited to, sums paid for the sale or rental, or
consideration received on account of any contribution, of Tenant's personal
property less the Sublease Expenses and (C) "Sublease Expenses" shall mean: (u)
in the event of a sale of Tenant's personal property, the then unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (v) the reasonable out-of-pocket costs and expenses of Tenant in
making such sublease, such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (w) the commercially reasonable cost of
improvements or alterations made by Tenant expressly and solely for the purpose
of preparing the Demised Premises for such subtenancy if not used by Tenant
subsequent to the expiration of the term of the sublease, and (x) the
unamortized or undepreciated cost of any Tenant's personal property leased to
and used by such subtenant. In determining Sublease Rent, the costs set forth in
clauses (v) and (w) shall be
31
amortized on a straight-line basis over the term of such sublease and the costs
set forth in clause (x) shall be amortized on a straight line basis over the
greater of the longest useful life of such improvements, alterations or personal
property (as permitted pursuant to the Internal Revenue Code of 1986, as
amended) and the term of such sublease.
(v) In any event, the acceptance by Landlord of any rent from any
of the subtenants or the failure of Landlord to insist upon the strict
performance of any of the terms, conditions, and covenants herein from any
assignee or subtenant shall not release Tenant herein, from any and all of the
obligations herein during and for the entire Term of this Lease.
(vi) Tenant shall pay the actual reasonable legal costs incurred
by Landlord to cover its handling charges for each request for consent to any
assignment or sublet prior to its consideration of the same.
(vii) Landlord shall have the right to require from Tenant or any
assignee an increase in the Security Deposit prior to the effective date of any
permitted assignment or sublease. Landlord shall use its reasonable discretion
in determining the amount of the increase necessary to cover the potential costs
related to the wear and tear to the Demised Premises and to the Building caused
by the moving in and out of Tenant, the assignee, and/or the sublessee.
(viii) In no event may Tenant enter into more than five (5)
separate subleases with respect to the Demised Premises.
(ix) Pursuant to the provisions of Paragraph 6, Tenant shall,
upon expiration of the Term, at Landlord's request, remove any demising walls
which have been installed by Tenant in connection with any subleases.
(c) Any sublet or assignment to an Affiliate, as defined hereinafter,
shall not be subject to the recapture provisions set forth in Paragraph 27(a) or
to the provisions of Subparagraph 27(b)(iv) and shall not require Landlord's
prior written consent, but all other provisions of this Paragraph 27 shall
apply. As used herein, an Affiliate shall refer to an entity that is in common
control with Tenant, is controlled by Tenant, or controls Tenant.
(d) If Tenant believes that Landlord has unreasonably withheld its
consent with respect to a proposed subletting or assignment as to which Landlord
is required to be reasonable pursuant to paragraph (b), above, Tenant may,
within twenty (20) days after receiving notice that Landlord has withheld its
consent, give notice to Landlord of Tenant's intention to submit the question of
whether Landlord's consent was withheld unreasonably to expedited arbitration in
accordance with the expedited procedures of the American Arbitration Association
("AAA") Rules for the Real Estate Industry (the "Rules") except that: (i) the
list of arbitrators referred to in paragraph (b) of Rule 57 shall be returned to
the AAA within five (5) business days after submission of the list; (ii)
Landlord and Tenant shall notify the AAA within four (4) business days after an
arbitrator is appointed of any objections they may have thereto and shall have
no right to object to an arbitrator whose name was on the list submitted by the
AAA and as to whom no objection was made in connection with Rule 57; (iii) to
the extent acceptable to the arbitrator, the notice of hearing in Rule 58 shall
be four (4) business days in
32
advance of the hearing; and (iv) the hearing shall be held within seven (7)
business days after the appointment of the arbitrator. In the event that Tenant
prevails against Landlord in an expedited arbitration brought pursuant to this
Section 10.02(c), Landlord's sole liability to Tenant for its refusal to consent
to an assignment proposed by Tenant shall be to consent thereto and Tenant
hereby waives and relinquishes any and all claims for damages or other
compensation by reason thereof. The foregoing reference to Rules 57 and 58
pertain to the Rules as amended and effective on April 1, 1997. In the event
that a subsequent amendment of the Rules becomes effective, the time frames set
forth herein shall pertain, as applicable, to the substantive equivalent of
those rules contained in such later version.
28. Environmental Laws.
------------------
(a) Tenant agrees to comply with all present or future federal, state,
or local laws, rules, or regulations dealing with environmental protection
("Environmental Laws"), including, but not limited to, the Industrial Site
Recovery Act (N.J.S.A. 13:lK-6, et seq.) ("ISRA") having jurisdiction over the
Demised Premises. Tenant agrees that such compliance shall be at Tenant's sole
cost and expense. Tenant shall immediately provide Landlord, as they are issued
or received by Tenant, with copies of all correspondence, reports, notices,
orders, findings, declarations, and other materials that are pertinent to
Tenant's compliance with Environmental Laws.
(b) Tenant represents to Landlord that Tenant's Standard Industrial
Classification (SIC) Number as used on Tenant's Federal Tax Return is as set
forth in the Preamble of this Lease. Tenant shall not conduct any operations at
the Demised Premises that shall cause the Building or the Demised Premises to be
deemed an "industrial establishment" as currently defined in ISRA or otherwise
trigger ISRA. If, due to an amendment to ISRA or otherwise Tenant's operations
become subject to ISRA during the Term of the Lease, Tenant shall comply with
all ISRA requirements at Tenant's sole cost and expense. Such expenses shall
include, but not limited to, any applicable state agency fees, engineering fees,
clean-up costs, filing fees, and suretyship expenses. In addition, in the event
any other Building tenant or Landlord triggers ISRA, Tenant agrees to cooperate
with Landlord and provide any information relating to Tenant and its operations
at the Demised Premises that is needed by Landlord to comply with ISRA. The
foregoing undertakings shall survive the termination or sooner expiration of the
Lease and surrender of the Demised Premises and shall also survive the sale,
lease, or assignment of the Demised Premises by Landlord for a period of one (1)
year.
(c) Tenant shall not generate, store, manufacture, refine, transport,
treat, dispose of, or otherwise permit to be present on or about the Demised
Premises any Hazardous Substances with the exception of de minimis quantities of
Hazardous Substances commonly used in the cleaning and maintenance of general
business offices in quantities appropriate to such use. As used herein,
"Hazardous Substance" shall be defined as any "hazardous chemical," "hazardous
substance," "hazardous waste," or similar term as defined in the Comprehensive
Environmental Response Compensation and Liability Act, as amended (42 U.S.C.
(S)(S)9601, et seq.), ISRA, the New Jersey Spill Compensation and Control Act,
as amended, (N.J.S.A. 58:10- 23.llb, et seq.), any rules or regulations
promulgated thereunder, or in any other present or future Environmental Laws.
33
(d) Tenant agrees to indemnify, defend, and hold harmless Landlord and
each mortgagee of the Demised Premises from and against any and all liabilities,
damages, claims, losses, judgments, causes of action, costs, and expenses
(including the reasonable fees and expenses of counsel) that may be incurred by
Landlord or any such mortgagee or threatened against Landlord or such mortgagee,
relating to or arising out of any breach by Tenant of this Paragraph 28, which
indemnification shall survive the expiration or sooner termination of this
Lease.
29. Parties Bound.
-------------
(a) The covenants, agreements, terms, provisions, and conditions of
this Lease shall bind and benefit the respective successors, assigns, and legal
representatives of the parties hereto with the same effect as if mentioned in
each instance where a party hereto is named or referred to, except that no
violation of the provisions of Paragraph 7(c) or of Paragraph 27 hereof shall
operate to vest any rights in any successor, assignee, or legal representative
of Tenant and that the provisions of this Paragraph 29 shall not be construed as
modifying the conditions contained in Paragraph 13 hereof.
(b) Tenant acknowledges and agrees that neither Landlord, nor any
shareholder, officer, director, partner (general or limited), limited liability
company member, tenant-in-common, venturer, trustee, trust beneficiary, grantor,
trustee-grantor, or other individual or entity having an interest in Landlord
shall have any personal liability for the performance of any of the terms,
covenants, or conditions to be performed by Landlord under this Lease; rather,
Tenant agrees to look solely to Landlord's interest and estate in the Land and
the Building for the satisfaction of Tenant's remedies arising out of or related
to this Lease.
(c) The term "Landlord" as used in this Lease means only the owner, or
the mortgagee in possession, for the time being, of the Demised Premises (or the
owner of a lease of the Demised Premises) so that in the event of, and from and
after the date of, any sale or other transfer of the Land, the Building, or the
Demised Premises, or of this Lease, such Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord under
this Lease, and it shall be deemed and construed without further agreement
between the parties or their successors-in-interest, or between the parties and
the purchaser at any such sale, or the said lessee of the Land, Building, or of
the Demised Premises, that the purchaser or other transferee of the same has
assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder.
30. Miscellaneous.
-------------
(a) This Lease contains the entire contract between the parties. No
representative, agent, or employee of Landlord has been authorized to make any
representations or promises with reference to the leasing of the Demised
Premises or to vary, alter, or modify the terms hereof. No additions, changes or
modifications, renewals, or extensions hereof shall be binding unless reduced to
writing and signed by Landlord and Tenant.
(b) The terms, conditions, covenants, and provisions of this Lease
shall be deemed to be severable. If any clause or provision herein contained be
adjudged to be invalid or
34
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision herein, but such other clauses or provisions shall remain in full
force and effect.
(c) The paragraph headings in this Lease are for convenience only and
are not to be considered in construing the same.
(d) If, in connection with obtaining financing for the Building, a
banking, insurance, or other recognized institutional lender shall request
reasonable modifications in this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay, or defer its consent thereto, provided
that such modifications do not in any significant manner increase the
obligations of Tenant hereunder or affect the leasehold interest created or the
conduct of Tenant's business operations at the Demised Premises.
(e) This Lease shall be governed by and construed in accordance with
the laws of the State of New Jersey.
(f) The parties agree that any litigation arising out of this Lease
shall be venued in the Superior Court of New Jersey. Each party waives trial by
jury in any action or proceeding arising out of this Lease. Furthermore, Tenant
expressly waives its right to make any claims against Landlord, unless Tenant
commences a legal action (if permitted under this Lease) against Landlord within
eighteen (18) months from the date of expiration or other termination of this
Lease; provided, however, that the foregoing limitation shall not apply to a
claim by Tenant for a share of the refund of Real Estate Taxes.
(g) Tenant shall not do or cause anything to be done whereby the
Demised Premises may be encumbered by a construction lien. If any construction
lien is filed against the Demised Premises, the Building, or the Land as a
result of any Alterations, repairs, or any other work or act of Tenant, Tenant
shall discharge or bond the same within fifteen (15) days from the date of the
filing of said lien. If Tenant shall fail to discharge or bond the lien,
Landlord may bond or pay lien or claim for the account of Tenant without
inquiring into the validity of the lien or claim, and Tenant shall reimburse
Landlord upon demand.
(h) Tenant represents that the undersigned officer(s) have been duly
authorized to enter into this Lease and that the execution and consummation of
this Lease by Tenant does not and shall not violate any provision of any by-
laws, certificate of incorporation, agreement, order, judgment, governmental
regulation, or any other obligations to which Tenant is a party or is subject.
Upon execution hereof, Tenant shall deliver a Secretary's certificate evidencing
its authority to execute this Lease.
(i) In any case where Landlord's consent, permission, or approval is
requested (or required to be requested) by Tenant in connection with this Lease,
Landlord shall have the right to charge Tenant all reasonable costs
(architectural, engineering and legal) as Additional Rent that Landlord incurs
in determining whether such consent, permission, or approval shall be granted.
31. Hold Over Tenancy. If Tenant shall remain in the Demised Premises
-----------------
after the expiration of the Term of this Lease without having executed and
delivered a new lease (or
35
amendment to this Lease) with Landlord, such holding over shall not constitute a
renewal or extension of this Lease. Landlord may, at its option, (i) elect to
treat Tenant as one who has not removed at the end of its Term and thereupon be
entitled to all the remedies against Tenant provided by law in that situation,
or (ii) construe such holding over as a month-to-month tenancy subject to all
the terms and conditions of this Lease, except as to the duration thereof, in
which event Tenant shall pay to Landlord one hundred fifty (150%) percent of the
greater of: (x) the Fixed Monthly Rent in effect on the Expiration Date and (y)
the then fair market rent of the Demised Premises; plus all other sums due
hereunder, making such payment in accordance with this Lease. Tenant shall be
otherwise bound by all of the terms, covenants, and conditions contained in this
Lease.
32. Financial Statements. Tenant agrees, within (90) days after the
--------------------
end of Tenant's accounting year, to furnish to Landlord and to any mortgagee or
ground lessor of the Building and/or Land a certified balance sheet and profit
and loss statement for the last accounting year.
33. Satellite Dish Antenna. Provided Landlord shall have the continued
----------------------
ability to lawfully allow other parties or itself the right to install, operate
and maintain roof top antennas or other communications devices, Tenant shall
have the non-exclusive right to install, operate, and maintain, at its sole cost
and expense, one (1) or more communication devices on the roof of the Building,
the height and number of which are subject to Landlord's prior reasonable
approval in writing and to any applicable governmental regulation or ordinance.
Said device shall not display any name, logo, or other identity. Tenant shall be
solely responsible for obtaining, with Landlord's reasonable cooperation, if
necessary (but at no cost to Landlord), any and all governmental approvals and
permits, including, without limitation, any FCC permit, which may be required in
connection with the installation and use of the device. Tenant shall be
responsible for any and all damage to the Building in connection with said
device and agrees to indemnify and hold Landlord harmless from all direct and
indirect reasonable costs, expenses, and claims resulting therefrom. Landlord
shall designate a satisfactory Building location (taking into consideration
Tenant's device requirements), reasonable method of annexation (including the
location of any necessary wiring), and installer for said device. Tenant agrees
not to interfere with other radio transmission or reception equipment located at
the Building. If Tenant should cause such interference, Tenant shall cease its
operation of the communication device and, at its sole cost and expense,
immediately take the necessary and appropriate action to eliminate and correct
such interference before resuming operation. Such corrective action may include,
but not be limited to, Landlord's relocation of the device and any related
equipment, the cost of which Tenant shall pay as Additional Rent to Landlord
within ten (10) days of Tenant's receipt of a xxxx therefor. Upon the expiration
or sooner termination of this Lease, Tenant, at Landlord's option, shall remove
said communication device and repair all injury done by or in connection with
the installation or removal of said device. Any device installed by Tenant
pursuant to the provisions of this Paragraph shall be for the sole use of Tenant
itself, and Tenant may not assign, sublet or license the communication device or
the use thereof to any third party.
36
IN WITNESS WHEREOF Landlord and Tenant have caused this Lease to be
executed as of the date first above written.
WITNESS: MSGW MADISON, L.L.C.
By: MSGW REAL ESTATE FUND II, LLC
Sole Member
By: /s/ Xxxxxx Xxxx
--------------------- ------------------------------
Name: Xxxxxx Xxxx
----------------------------
Title: Vice President
---------------------------
DATED: February 9, 2000
ATTEST: LOGICAL DESIGN SOLUTIONS, INC.
By: /s/ E. Xxxxx Xxxxxxxxx
------------------------------
Name: E. Xxxxx Xxxxxxxxx
----------------------------
Title: Chief Financial Officer
---------------------------
DATED: February 9, 2000
37
EXHIBIT A
---------
FLOOR PLAN
A-1
1
EXHIBIT B
---------
Work Letter to Lease
Between
MSGW MADISON, L.L.C.
and
LOGICAL DESIGN SOLUTIONS, INC.
Subject to and in consideration of the provisions of the lease between Landlord
and Tenant (the "Lease") to which this Exhibit B is attached, Tenant shall
design and Landlord's construction manager, Xxxx & Wentworth Construction
Services, LLC ("Construction Manager") shall construct certain improvements in
the Demised Premises as set forth in this Exhibit.
The provisions of this Exhibit shall have the same force and effect as if this
Exhibit were a numbered Paragraph of the Lease. In addition, the capitalized
terms herein shall have the same meanings as ascribed thereto in the Lease,
unless otherwise expressly provided herein to the contrary. The provisions of
this Work Letter are intended to supplement the Lease and are specifically
subject to the provisions thereof. In the event of any conflict between the
provisions of the Lease and the provisions of this Work Letter, the provisions
of the Lease shall control.
1. Plans and Schedules:
----------------------
1.1 Tenant has provided to Landlord at Tenant's expense design development
plans for the Demised Premises (the "Preliminary Plans"). Landlord has
approved the Preliminary Plans. Subject to the provisions of this Lease,
Landlord and Tenant have agreed to the following schedule for the
completion of the Tenant Improvements, as hereinafter defined:
* At Tenant's expense, Tenant shall provide to Landlord February 28, 2000 - 3d and 4th Floors
the Final Plans, as hereafter defined, which describe March 15, 2000 - 2d Floor
improvements to prepare the Demised Premises for Tenant's
occupancy (the "Tenant Improvements"), by the following
dates:
* Final subcontractor bidding shall be completed during February 29 to March 20, 2000
the following period:
* Based on the scope selected by Tenant, Construction March 21 to 27, 2000
Manager and Tenant shall agree upon a budget during the
following period:
B-1
* Construction Manager shall Substantially Complete the March 28 to June 13, 2000
Tenant Improvements and shall obtain a temporary
Certificate of Occupancy for the 3d and 4th Floors during
the following period:
* Tenant occupancy and rent commencement shall occur for June 14, 2000
the 3d and 4th Floors by the following date:
* Construction Manager shall Substantially Complete the January 15, 2001
Tenant Improvements and shall obtain a temporary
Certificate of Occupancy, and Tenant occupancy and rent
commencement shall occur for the 2d Floor by the
following date:
Tenant and Construction Manager shall reasonably cooperate to integrate the
bidding and budgeting for the Tenant Improvements for the entire Demised
Premises into one project, despite the fact that the 2d Floor will be improved
at a later date.
1.2 As used herein, the "Final Plans" shall be defined as those drawings,
plans, and specifications submitted to and approved by Landlord, which
shall include any necessary working drawings, details, schedules, and
specifications for all architectural, electrical mechanical systems and
plumbing work within the Demised Premises in a form sufficient to enable
Construction Manager to obtain all construction permits and to perform
the Tenant Improvements without the need for additional details or
information. Within ten (10) Business Days after Landlord's receipt of
Tenant's proposed Final Plans, Landlord shall provide Tenant notice of
its approval or disapproval of the same. The scope of Landlord's review
during said time period shall be to determine whether the proposed Final
Plans conform to the Preliminary Plans and meet the requirements of
governmental authorities. In the event Landlord disapproves of the
proposed Final Plans, such notice shall contain Landlord's reasons for
such disapproval and the requested modifications and/or eliminations.
Tenant shall have three (3) Business Days after receipt of Landlord's
notice of disapproval to modify or eliminate those items that Landlord
has disapproved and to resubmit such proposed Final Plans for review.
Upon receipt of such resubmitted plans, Landlord shall have five (5)
Business Days to provide Tenant notice of its approval or disapproval of
the same. In the event Landlord disapproves of such resubmitted plans,
such notice shall again contain Landlord's reasons for such disapproval
and the requested modifications and/or eliminations. Tenant acknowledges
that subject to the provisions of Paragraph 7 hereof, any days from the
date of such disapproval until the date Construction Manager approves of
any further proposed Final Plans as the Final Plans shall constitute
Tenant Delays. Landlord agrees that any approvals required of it under
this Work Letter shall not be unreasonably withheld or delayed.
1.3 Construction Manager and Tenant shall work together to identify the
firms to be asked to bid. Construction Manager shall solicit a minimum
of three (3) bids for each trade
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estimated by Construction Manager to cost in excess of Twenty-five
Thousand and 00/100 Dollars ($25,000.00). All bids and subcontracts must
be at a fixed price. Upon a review of all bids, Construction Manager
shall forward to Tenant a summary of said bids, together with
Construction Manager's recommendation regarding the award of each
subcontract. Each such subcontract shall be subject to Tenant's prior
written approval. Construction Manager will award all subcontracts to
the lowest qualified bidder recommended by Construction Manager and
approved by Tenant. Construction Manager shall monitor and complete
construction of all Tenant Improvements as per the Final Plans.
1.4 In the event that any component of the schedule set forth above is
delayed due to Tenant's failure to provide plans and specifications on
the date or within the time period set forth above, or Tenant's failure
to provide its approval, consent or input on the date or within the time
period set forth above, such delay shall constitute a Tenant Delay, as
more particularly defined hereinafter.
1.5 As used herein, the term "Tenant Improvement Work" shall mean and refer
to the Tenant Improvements being performed to the Demised Premises
pursuant to the Final Plans. The term "Tenant Work" shall mean and refer
to all work that Tenant may perform through its own contractors with
respect to all work desired by Tenant that is not included in the Tenant
Improvement Work. Tenant Work shall be shown on the Final Plans. The
term "Base Building Work" shall be as defined and more particularly
described in Schedule I attached to this Exhibit.
1.6 Notwithstanding anything herein to the contrary, Tenant acknowledges
that the eleven (11) week construction period projected in Section 1.1
above is based upon the TI Cost being no greater than Sixty Dollars
($60.00) per square foot of Rentable Area ("Threshold Rate"), being
Three Million One Hundred Twenty Thousand Dollars ($3,120,000)
("Threshold Amount"). Therefore, if (i) Construction Manager's
reasonable estimate for the TI Cost per square foot of Rentable Area is
(or shall be) in excess of the Threshold Rate and (ii) Construction
Manager reasonably believes that Construction Manager shall be unable to
Substantially Complete the Tenant Improvements during said time period
due to the same, Tenant acknowledges that a Tenant Delay shall then
exist, the extent of which shall be determined in accordance with
Section 7.2 hereof
2. Construction Manager's Responsibilities
2.1 Construction Cost
The "Construction Cost" as defined herein shall be the actual verifiable
cost (as evidenced by paid invoices, copies of cancelled checks tendered
in payment thereof, final lien waivers and/or such evidence as shall be
reasonably requested by Tenant), including out-of-pocket soft costs, to
Landlord of the construction of the Demised Premises in accordance with
the Final Plans ("Cost of Work"), plus five (5%) percent of the first
$1,500,000 of Cost of Work, and four (4%) percent on the remaining Cost
of Work, as profit to the Construction Manager, and seven (7%) percent
of such Cost of Work as a payment to the Construction Manager to
compensate the Construction
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Manager for its overhead costs. The Cost of Work shall include all
construction related costs, such as subcontractor trade cost, materials,
labor for cleanup, permits, temporary protection, dumpsters, blueprint
reproduction, overnight deliveries, and other directly related project
costs of the Construction Manager.
2.2 Project Control
2.2.1 Work Supervision -- Construction Manager shall monitor the work of the
subcontractors and coordinate the same with the activities and
responsibilities of Landlord, Tenant, and the designers to complete the
Tenant Improvement Work, and allow Tenant to complete the Tenant Work,
in accordance with Tenant's objectives of cost, time, and quality. A
superintendent will be maintained at the site on a full-time basis by
Construction Manager to coordinate and direct the Tenant Improvement
Work and the progress of the trade contractors.
2.2.2 Work Procedures -- Construction Manager shall establish reasonable
procedures for coordination among Tenant, Tenant's designers and the
subcontractors with respect to all aspects of the Tenant Improvement
Work and the Tenant Work, and implement such procedures. Said procedures
shall be subject to Tenant's approval which approval shall not be
unreasonably withheld, conditioned or delayed.
2.2.3 Scheduling -- Construction Manager shall regularly schedule and conduct
progress meetings, or upon Tenant's reasonable request, at which trade
contractors, Tenant, Tenant's designers and Construction Manager can
discuss jointly such matters as procedures, progress, problems and
scheduling.
2.2.4 Monitoring Construction Progress -- Construction Manager shall provide
regular monitoring of the schedule as construction progresses and
identify potential variances between scheduled and probable completion
dates.
2.2.5 Supervision of Trade Contracts -- Construction Manager shall determine
the adequacy of the trade contractors' personnel and equipment and the
availability of materials and supplies to meet the schedule and
implement courses of action when the requirements of a trade contractor
are not being met.
2.2.6 Permits and Fees -- Construction Manager shall file applications for and
obtain all building permits, inspections and other governmental
approvals for the Tenant Improvement Work. The fees therefor shall be
included as a component of the Cost of Work.
2.2.7 Safety Programs -- Construction Manager shall review the safety programs
of each of the trade contractors and make appropriate recommendations.
2.2.8 Shop Drawings and Samples -- In collaboration with Tenant's architect,
Construction Manager shall establish and implement reasonable procedures
for expediting the processing and approval of shop drawings and samples.
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3. Substantial Completion
3.1 Construction Manager shall determine Substantial Completion and provide
seven (7) Business Days' prior written notice to Tenant and Tenant's
architect that the Tenant Improvement Work is ready for final
inspection. Construction Manager will secure and transmit to Tenant any
guaranties and warranties. Construction Manager will then turn over to
Tenant for its use all manuals, record drawings and maintenance
information pertaining to the Tenant Improvements. As used herein, the
term "Substantial Completion" or "Substantially Complete(d)" shall mean
the date when the Tenant Improvements shall have been completed in good
and workmanlike manner in accordance with the Final Plans (as modified
by any Change Orders, as defined hereinafter) except for Punch List
Items, as defined hereinafter. As used herein, the term "Punch List
Items" shall mean details of construction, decoration, and mechanical
adjustment which, in the aggregate, are minor in character and do not
substantially interfere with the tenantability of the Demised Premises.
4. Allowances
4.1 Landlord shall contribute the amount of Thirty One Dollars ($31.00) per
square foot of Rentable Area of the Demised Premises (the "TI
Allowance") towards the TI Cost. The TI Allowance shall also include an
additional $25,000 for use in renovating the elevator cabs, which
renovation shall be part of the Tenant Improvements. In the event that
any portion of the TI Allowance is remaining after the completion of the
Tenant Improvements, Tenant may use same to pay the cost of Tenant Work.
Tenant acknowledges that Tenant shall not have any right to any other
credit with respect to said portion.
4.2 In the event that the TI Cost exceeds the TI Allowance, the excess
amount shall constitute Additional Rent under the Lease and shall be
paid by Tenant to Landlord within twenty (20) days of receipt of an
invoice verifying the amount of the Tenant's Improvements completed
through the end of the prior month. Each invoice will include a ten
(10%) percent retainage to be withheld on all subcontractor costs until
Substantial Completion. There will be no retainage held on any general
condition items and fees.
5. Base Building Work
5.1 The Base Building Work, which is as defined in the Schedule I attached
to this Exhibit, will be furnished and installed by Construction Manager
at Landlord's expense and shall not be a component of the TI Cost.
Landlord agrees that Landlord shall complete those items of Base
Building Work which are necessary prerequisites to the performance of
Tenant Work and Tenant Improvement Work, as shown on the Final Plans, in
sufficient time to permit Tenant to complete the Tenant Work and
Landlord to complete the Tenant Improvement Work prior to the applicable
Commencement Date.
6. Change Orders
6.1 In the event that Tenant desires a Change Order, Tenant shall submit to
Construction Manager Construction Documents or other appropriate
documentation setting forth the
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proposed change and instructing Construction Manager in writing whether
to cease work or cease any segment of work while the Change Order is
being reviewed as such review is more particularly described below (in
which case the delay shall be a Tenant Delay) or whether Construction
Manager should continue constructing the Tenant Improvements in
accordance with the Final Plans notwithstanding the Change Order. In the
event that no such written instructions are given, Construction Manager
shall continue constructing the Tenant Improvements in accordance with
the Final Plans without regard to the Change Order. Within three (3)
Business Days after receipt of any request for a Change Order from
Tenant Construction Manager shall (a) review such request to determine
whether the proposed Change Order would be consistent with the style,
type, and quality of construction of the Building and (b) approve or
reject the proposed Change Order based upon such review for consistency.
If Construction Manager has stopped work, or some segment thereof at
Tenant's request. Construction Manager shall not resume work, or some
segment thereof, until it receives written instructions from Tenant
authorizing the recommencement of such work. Upon the granting of any
approval Construction Manager shall notify Tenant of the amount, if any,
of additional TI Cost arising from the request for the Change Order and
of Construction Manager's estimate of the delay in Substantial
Completion that will be caused by such proposed Change Order, if any. In
the event of a rejection by Construction Manager of the Change Order, or
any part thereof, Tenant may make changes to the proposed Change Order
and resubmit the same to Construction Manager pursuant hereto. Upon
receiving Construction Manager's approval to a Change Order and the cost
for the Change Order, Tenant shall, as soon thereafter as practicable,
but in no event in excess of three (3) Business Days, and understanding
that any failure to respond during said period may cause delays in
Substantial Completion substantially greater than the estimate given by
Construction Manager, authorize the performance of the Change Order work
that Tenant desires by approving in writing the commencement of the
Change Order work and the cost thereof and by submitting to Construction
Manager any necessary revisions to the Final Plans in a form sufficient
for Construction Manager to obtain all necessary permits and approvals
to construct the Tenant Improvements and to perform the Tenant
Improvements without the need for additional details or information in
accordance with such revised Final Plans. Upon the submission of such
revised Final Plans, such revised Final Plans shall become the Final
Plans hereunder. Any delay in Substantial Completion caused by the
Change Order, whether greater or less than Construction Manager's
estimate, shall be a Tenant Delay.
7. Tenant Delay
7.1 If (a) a delay shall occur in the Substantial Completion of the Tenant
Improvements in accordance with the Final Plans (or any revised Final
Plans) by Construction Manager as the result of (i) any written
direction by Tenant that Construction Manager delay proceeding with the
Tenant Improvement Work or any segment of the Tenant Improvement Work,
(ii) any Change Order authorized by Tenant in writing, (iii) any
interference in Construction Manager's performance of the Tenant
Improvement Work caused by Tenant or Tenant's agents, representatives,
or contractors performing the Tenant Work, (iv) any failure by Tenant to
comply with the requirements of Section 1 of this Exhibit, (v) any delay
caused by the per square foot cost of the TI Cost exceeding (or
estimated by Construction Manager to exceed) the Threshold Rate, as more
particularly
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described above, or (vi) any other act or omission of Tenant, its
agents, employees, or contractors (any of such events being a "Tenant
Delay"), then (b) the Commencement Date shall (even though no
Certificate of Occupancy (temporary or permanent) has been issued or the
Tenant Improvements have not been Substantially Completed) be
accelerated by a time period equal to the number of days that shall be
counted as Tenant Delays, but in no event to dates earlier than those
stated in Paragraph 4(b) of the Lease. Tenant Delay shall not include,
or shall be reduced by, any delay caused by Landlord and/or Construction
Manager, and/or any person acting by, through or under them,
respectively, in performing their obligations hereunder.
7.2 The extent of any Tenant Delay shall be determined in the following
manner: Landlord shall notify Tenant in writing of the estimated length
of the Tenant Delay involved as soon as practicable after the
information necessary to estimate such Tenant Delay is available (which
notice shall include the basis for the Landlord's estimate) and, as
Landlord obtains the information to calculate the actual Tenant Delay,
Landlord shall so notify Tenant providing it with the basis used in
calculating such Tenant Delay. In the event of a dispute concerning the
length of any Tenant Delay, the parties agree that such dispute shall be
resolved in accordance with the Expedited Procedures set forth by the
American Arbitration Association for expedited arbitration.
Notwithstanding the foregoing, Tenant shall pay all sums required to be
paid hereunder to Landlord, subject to a refund of the appropriate sums
upon the resolution of such dispute.
8. Observation by Tenant and Tenant Work Period
8.1 Landlord shall afford Tenant and its representatives access to the
Premises at reasonable times prior to the Commencement Date, at Tenant's
sole risk and expense, for the purpose of observing the performance of
the Tenant Improvement Work and of evaluating the workmanship. The
scheduling and coordination of Tenant's access hereunder shall be
subject to the reasonable control and regulation of Landlord to minimize
interference with the construction of the Tenant Improvement Work.
Access for such purpose shall not be deemed to constitute possession or
occupancy accelerating the Commencement Date. Landlord shall not be
liable in any way for any injury, loss, or damage to person or property
which may occur as a result of Tenant's observations herein. Tenant
agrees to indemnify, defend, and hold harmless Landlord from any and all
costs, expenses, claims, causes of action, damages, and liabilities of
any type or nature whatsoever (including, but not limited to, reasonable
attorneys' fees and costs of litigation) arising out of or relating to
(i) such entry and/or observations or (ii) the performance of the Tenant
Work described hereinafter by Tenant, its contractors, consultants, or
other invitees.
8.2 Tenant and its agents may, subject to the terms of this Paragraph 8.2,
enter the Demised Premises during the Tenant Work Period, as hereinafter
defined, in order that Tenant, at its sole cost, may have the Tenant
Work performed at the same time that Construction Manager is working in
the Demised Premises. Construction Manager shall have the right to
inspect all such Tenant Work. Tenant's workers and mechanics shall be
reasonably acceptable to Construction Manager and shall be properly
licensed and responsible. During the Tenant Work Period, Tenant shall
use all reasonable efforts to work harmoniously with Landlord (these
efforts shall include utilizing union labor forces
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for all work within the Building) and to coordinate the performance of
the Tenant Work in order to avoid interfering with or delaying the
Tenant Improvement Work. Landlord shall not be liable in any way for any
injury, loss, or damage that may occur to any Tenant Work made prior to
the Commencement Date (or such later date that Landlord delivers
possession of the Demised Premises to Tenant due to Tenant Delay), which
Tenant Work is being made solely at Tenant's risk. If Tenant desires
security for the Tenant Work Tenant shall be responsible for providing
its own security during such construction at Tenant's sole cost and
expense. Landlord and Construction Manager shall cooperate with Tenant's
contractors to ensure reasonably adequate power and utilities during the
Tenant Work Period. Landlord shall notify Tenant when it has completed
demolition of the particular floors of the Demised Premises. The period
commencing on the date Landlord so notifies Tenant and ending on the
Commencement Date (or such later date that Landlord delivers possession
of the Demised Premises to Tenant due to Tenant Delay) shall be the
Tenant Work Period. No early entry under this Paragraph 8.2 shall change
the Commencement Date or the Expiration Date of the Lease, except as
expressly provided for herein.
9. Certificate of Occupancy
9.1 Promptly upon Substantial Completion of the Tenant Improvement Work and
Tenant Work, Construction Manager shall obtain a temporary or permanent
certificate of occupancy or other such certificate permitting the lawful
occupancy of the Demised Premises from the appropriate governmental
authority (the "Certificate of Occupancy"). If a temporary Certificate
of Occupancy is obtained, Construction Manager shall proceed diligently
to satisfy all conditions thereof so as to obtain a permanent
Certificate of Occupancy prior to the expiration of the temporary
Certificate of Occupancy.
10. Notices
10.1 All notices required or permitted to be given pursuant to this Work
Letter shall be in writing and shall be deemed validly given if sent in
accordance with Paragraph 18 of the Lease, except that all notices to
Construction Manager shall be addressed as follows:
Xxxx & Xxxxxxxxx Construction Services, LLC
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
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SCHEDULE I
Base Building Work
000 Xxxxxxx Xxx
The work to be completed by the Landlord to establish the base building
conditions ("Base Building") shall be defined below in this Schedule I and shall
be completed by the Landlord with no cost to the Tenant.
A. Repairs to the concrete parking deck, including repair of spawled
areas of concrete, replace rusted portions of steel rebars, coat the
entire deck with waterproof membrane material and power wash the
inside walls of the deck.
B. Re-Stripping of parking areas C. Re-Lamp existing or add Parking Lot
Lighting to meet code. D. In addition to the TI Allowance, Landlord
will give to Tenant an $18,000 allowance towards the cost of
renovation of the bathrooms. E. Repair Elevators to assure good
working order. F. Complete Demolition of Tenant space, including
sheetrock, ceiling, lights, carpet, etc.
G. The Building Common Areas will be fully sprinklered as required in
accordance with all applicable codes and other Laws. Landlord will
supply the main loop system for the fire sprinklers as required in
accordance with all applicable codes and other Laws. All installation
of sprinkler branch piping and concealed heads within the Demised
Premises is to be included as part of the Tenant Improvement Work
under the Work Letter; provided, however, that, if the Construction
Cost for same shall exceed $36,400, Landlord shall be responsible for
such excess.
H. The existing fire alarm system for the Building shall be put into good
working order by Landlord in accordance with all current applicable
building codes and other Laws. Fire alarm devices outside of the
Common Areas and within the Demised Premises will be installed as part
of the Tenant Improvement Work.
I. The roof shall be rendered water tight and free of leaks as of the
Commencement Date.
J. The central HVAC system for the Building and the existing ducts and
VAV boxes shall be put in good working order. Any modifications and
additions to existing ducts and VAV boxes shall be part of the Tenant
Improvement Work.
EXHIBIT C
---------
RULES AND REGULATIONS
1. Except as permitted by the terms of this Lease, no sign, placard, picture,
advertisement, name, or notice shall be installed or displayed on any part
of the exterior or interior Common Areas of the Building without the prior
written consent of Landlord. All approved signs or lettering on doors and
walls shall be printed, painted, affixed, or inscribed at the expense of
Tenant by a person reasonably approved by Landlord.
2. No awning shall be permitted on any part of the Demised Premises. Tenant
shall not place anything against or near glass partitions or doors or
windows which may appear unsightly from outside the Demised Premises.
3. Landlord shall retain the right to control and prevent access to the
Building of all persons whose presence in the judgment of Landlord would be
prejudicial to the safety, character, reputation, and interests of the
Building and its tenants; provided that nothing herein contained shall be
construed to prevent such access to persons with whom any tenant normally
deals in the ordinary course of its business, unless such persons are
engaged in illegal activities. No tenant and no employee or invitees of any
tenant shall go upon the roof of the Building.
4. All cleaning and janitorial services for the Building and for the Demised
Premises shall be provided exclusively through Landlord and, except with
the written consent of Landlord, no person or persons other than those
approved by Landlord shall be employed by Tenant or permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Demised Premises.
5. Landlord will furnish Tenant, free of charge, a reasonable number of access
cards to the Building and the Demised Premises. Landlord may charge a
reasonable amount for any additional cards requested by Tenant. Tenant
shall not alter any lock or install a new additional lock or bolt on any
door of its Demised Premises. Tenant, upon the termination of its tenancy,
shall deliver to Landlord any cards that have been furnished to Tenant, and
in the event of loss of any cards so furnished, shall pay Landlord
therefor.
6. If Tenant requires telegraphic, telephonic, burglar alarm, or similar
services, it shall first obtain, and comply with, Landlord's reasonable
instructions in their installation.
7. Any freight elevator shall be available for use by all tenants in the
Building, subject to such reasonable scheduling as Landlord, in its
discretion, shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise, or other property will be received in the
Building or carried in the elevators except between such hours and in such
elevators as may be designated by Landlord.
8. Tenant shall not place a load down upon any floor of the Demised Premises
that exceeds the load per square foot which such floor was designed to
carry and that is allowed by law. Landlord shall have the right to
prescribe the weight, size, and position of all
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equipment, materials, furniture, or other property brought into the
Building. Heavy objects shall, if considered necessary by Landlord, stand
on such platforms as determined by Landlord to be necessary to properly
distribute the weight. Any object belonging to Tenant that causes noise or
vibration that may be transmitted to the structure of the Building or to
any tenants in the Building shall be placed and maintained by Tenant, at
Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration. The persons employed to move such equipment
in or out of the Building must be reasonably acceptable to Landlord.
Landlord shall not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the
Building by maintaining or moving such equipment or other property shall be
repaired at the expense of Tenant.
9. Tenant shall not use or keep in the Demised Premises any kerosene,
gasoline, or inflammable or combustible fluid, or material other than those
limited quantities necessary for the operation or maintenance of office
equipment. Tenant shall not use or permit to be used in the Demised
Premises any foul or noxious gas or substance, or permit or allow the
Demised Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of
noise, odors, or vibrations, nor shall Tenant bring into or keep in or
about the Demised Premises any birds or animals.
10. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord.
11. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning and to comply with
any governmental energy- saving rules, laws, or regulations of which Tenant
has actual notice, and shall refrain from attempting to adjust controls
other than room thermostats installed for Tenant's use.
12. Landlord reserves the right to exclude from the Building, between the hours
of 6 p.m. and 8 a.m. the following day, or such other hours as may be
established from time to time by Landlord, and on Sundays and legal
holidays, any person, unless that person is known to the person or employee
in charge of the Building or has a pass and is properly identified. Tenant
shall be responsible for all persons for whom it requests passes and shall
be liable to Landlord for all acts of such persons. Landlord shall not be
liable for damages for any error in regard to the admission to or exclusion
from the Building of any person. Landlord reserves the right to prevent
access to the Building in case of invasion, mob riot, public excitement, or
other commotion by closing the doors or by other appropriate action.
13. Tenant shall not obtain for use on the Demised Premises ice, drinking
water, food, beverage, towel or other similar services, or accept barbering
or bootblacking services upon the Demised Premises, except at such hours
and under such regulations as may be reasonably fixed by Landlord.
14. The toilet rooms, urinals, wash bowls, and other apparatus shall not be
used for any purpose other than that for which they were constructed, and
no foreign substance of any
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kind whatsoever shall be thrown into same. The expense of any breakage,
stoppage, or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose employees or invitees, shall have caused
it.
15. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets, or any other goods or merchandise
to the general public in or on the Demised Premises. Tenant shall not make
any room-to-room solicitation of business from other tenants in the
Building.
16. Subject to the provisions of Paragraph 33 of the Lease, Tenant shall not
install any radio or television antenna, loudspeaker, or other device on
the roof or exterior walls of the Building. Tenant shall not interfere with
radio or television broadcasting or reception from or in the Building or
elsewhere.
17. Landlord reserves the right to direct electricians as to where and how
telephone and telegraph wires are to be introduced to the Demised Premises.
Tenant shall not cut or bore holes for wires. Tenant shall not affix any
floor covering to the floor of the Demised Premises in any manner except as
reasonably approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.
18. Tenant shall not install, maintain, or operate upon the Demised Premises
any vending machine without the written consent of Landlord, not to be
unreasonably withheld.
19. Canvassing, soliciting, and distribution of handbills or any other written
material, and peddling in the Building are prohibited, and each tenant
shall cooperate to prevent same.
20. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's reasonable judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Building.
21. Tenant shall store all of its trash and garbage within the Demised
Premises. Tenant shall not place in any trash box or receptacle any
material that cannot be disposed of in the ordinary and customary manner of
trash and garbage disposal or that does not originate from materials
utilized by Tenant at the Demised Premises. All garbage and refuse disposal
shall be made in accordance with directions issued from time to time by
Landlord.
22. The Demised Premises shall not be used for the storage of merchandise held
for sale to the general public, or for lodging or for manufacturing of any
kind, nor shall the Demised Premises be used for any improper, immoral, or
objectionable purpose. No cooking shall be done or permitted by any tenant
on the Demised Premises, except that use by Tenant of Underwriters'
Laboratory- approved equipment for brewing coffee, tea, hot chocolate, and
similar beverages and for heating pre-prepared foods (such as a microwave
oven) shall be permitted, provided that such equipment and use is in
accordance with all applicable federal state, county, and city laws, codes,
ordinances, rules, and regulations.
23. Tenant shall not use in any space or in the public halls of the Building
any hand trucks, except those equipped with rubber tires and side guards or
such other material-handling
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equipment as Landlord may reasonably approve. Tenant shall not bring any
other vehicles of any kind into the Building.
24. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the business
of Tenant, except as Tenant's address.
25. Tenant shall comply with all safety, fire protection, and evacuation
procedures and regulations established by Landlord or any governmental
agency. 26. **[Tenant assumes any and all responsibility for protecting the
Demised Premises from theft, robbery, and pilferage]**. 27. The
requirements of Tenant will be attended to only upon written application to
the office of the Building Manager by an authorized individual.
28. Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building. Tenant shall not
leave vehicles in the Building parking areas overnight. Landlord reserves
the right, but shall not be obligated to, require that (i) Tenant's and
Tenant's employees' or visitors' vehicles be stickered with an
identification sticker and (ii) vehicles parked in violation of the Lease
(including the rules and regulations) be towed at Tenant's expense without
any liability of Landlord with respect to the same. Furthermore, Tenant
consents to the municipal enforcement of Title 39 of the New Jersey
Statutes regarding handicapped parking spaces.
29. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be construed as a waiver of such Rules and Regulations in favor of Tenant
or any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the tenants of the
Building.
30. These Rules and Regulations are in addition to and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements, and conditions of any lease of premises in the Building. In the
event of conflict between the provisions contained in this Lease and these
Rules and Regulations, the provisions of this Lease shall prevail.
31. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Complex and
for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
32. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees, and
guests.
C-4
EXHIBIT D
---------
CLEANING SERVICES
1. General Cleaning:
----------------
Nightly
-------
a. Empty and clean all waste receptacles, removing waste to a designated
central location for disposal. Landlord is to provide for disposal of
waste.
b. Empty and clean all ash trays and receptacles.
c. Remove all fingerprints, smudges, and other marks from metal
partitions, doors, and other surfaces.
d. With respect to a kitchen area (if applicable), rinse out coffee pots,
turn off burners to coffee pots, spot clean walls for coffee spillage,
clean sink, and clean tables and chairs in such area.
Weekly
------
e. Hand dust and clean all office furniture that has been cleared of
papers, boxes, and/or personal items, ledges, chair rails, baseboards,
and window xxxxx.
2. Floors
------
Group A - Granite, ceramic tile, marble, terrazzo
Group B - Linotile, asphalt, koroseal, plastic vinyl, wood, rubber, or
other composition floors and base.
Nightly
-------
a. All floors in Group A to be swept, wet mopped and rinsed.
b. All floors in Group B to be dry mopped.
Weekly
------
c. All floors in Group B to be damp mopped.
Every six (6) months
--------------------
d. All floors to be scrubbed and buffed.
D-1
3. Vacuuming
---------
Nightly
-------
a. Vacuum or carpet sweep all rugs and carpeted areas.
Monthly
-------
b. Brush or dust by hand carpet edges inaccessible to high pressure
vacuum attachments.
4. High Dusting
------------
Every six (6) months
--------------------
a. Dust all clothes closet shelving, pictures, charts, graphs, etc.
b. Dust clean all vertical surfaces such as walls, partitions, door
bucks, and other surfaces.
c. Dust all venetian blinds.
Special service
---------------
Records and General Storage Area
--------------------------------
Floors are to be broom cleaned weekly. Files and exposed open
shelves dusted once every three (3) months.
5. Other Services
--------------
a. Landlord shall supply all soap, towels, and toilet tissue in both
men's and women's rooms and sanitary napkins in coin dispensers
in the women's rooms.
b. Landlord shall supply all coin operated dispensers and shall be
responsible for the servicing of same and for the collection of
money from the machine.
c. During the Term of this Lease the dispenser price for sanitary
napkins shall not exceed a price equal to 150% of the wholesale
price paid by Landlord.
6. Carpeting
---------
In addition to the aforementioned nightly and weekly vacuuming,
Landlord shall do the following:
Weekly
------
All carpeting is to be spot cleaned, removing all stains, smudges, and
unsightly appearances.
D-2
7. Glass
-----
Monthly
-------
a. Clean all partitions and furniture glass.
Annually
--------
b. Clean all perimeter windows, both inside and out.
8. Kitchen Areas
-------------
Nightly
-------
a. Clean all tables, chairs, counters, and sinks.
b. Spot cleaning of walls.
c. Cleaning of coffee pots.
9. General
-------
a. All lights are to be extinguished and the doors as specified by
Tenant are to be locked after cleaning is completed.
b. All personnel are to be uniformed and clean in appearance during
business hours.
c. Cleaning of all private bathrooms shall be subject to additional
charges shall be determined on a case-by-case basis.
D-3
EXHIBIT E
---------
PARKING PLAN
E-1
LEASE TERMINATION AGREEMENT
THIS LEASE TERMINATION AGREEMENT (the "Agreement") is made as of the
__ day of February, 2000 between MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts corporation, through its agent, CORNERSTONE REAL ESTATE
ADVISORS, INC. ("Landlord"), having an office c/o Gale & Wentworth LLC, 000
Xxxxxx Xxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000 and LOGICAL DESIGN SOLUTIONS, INC.,
a New Jersey corporation ("Tenant"), having an address of 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000.
INTRODUCTORY STATEMENTS:
A. By Agreement of Lease dated February 8, 1996, as amended by First
Amendment to Lease dated February 20, 1997 (collectively, the "Lease"), Tenant
leased from Landlord's predecessors in interest certain premises at 000 Xxxxx
Xxxxxx, Xxxxxx Xxxxxxxx, Xxx Xxxxxx (the "Premises").
B. Tenant is about to sign a new lease for certain premises at 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx. As a result, Tenant desires to terminate
the Lease and vacate the Premises.
C. Landlord is willing to allow Tenant to terminate the Lease, and
conditions described herein.
NOW, THEREFORE, in consideration of the foregoing, the parties hereby
agree as follows:
1. All terms not defined herein shall have the meanings given to them
in the Lease.
2. Provided that Tenant makes to Landlord the payment described
below, the Lease shall terminate on the date (the "Termination Date") on which
Tenant vacates the Premises and leaves the Premises in the condition in which
they were required to be left on the Expiration Date pursuant to the terms of
the Lease. Until such termination, Tenant shall continue to be responsible to
make the payments of Fixed Rent and Additional Rent required under the Lease.
3. In consideration of the early termination of the Lease, Tenant
shall pay to Landlord on or before the Termination Date the sum of $92,900,
representing Fixed Rent under the Lease for a period of three months.
4. Upon termination of the Lease, the parties shall execute a letter
agreement confirming the Termination Date. The rights and obligations of the
parties shall continue to be in accordance with the terms of the Lease, as if
the Termination Date were the Expiration Date under the Lease.
5. This Agreement shall be null and void if the Termination occurred
by October 30, 2000.
6. This Agreement may not be modified orally or by a course of
conduct, but only by a written document signed by both parties. This Agreement
shall be construed under the law of the State of New Jersey. This Agreement
shall bind and inure to the benefit of each of the parties hereto and their
respective successors and assigns. This Agreement may be executed in
counterparts which, when put together, shall constitute one document.
7. Except and as amended hereby, the Lease remains in full force and
effect.
2
IN WITNESS WHEREOF, the parties have executed this Lease Termination
Agreement as of the day and year first above written.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
WITNESS: By: CORNERSTONE REALTY ADVISORS, INC.,
authorized agent
___________________________ By: /s/ Xxxx X. Xxxxx
--------------------
Name: Xxxx X. Xxxxx
---------------
Title: Vice President
----------------
DATED: March 6, 2000
WITNESS: LOGICAL DESIGN SOLUTIONS, INC.
Xxxxxxx Xxxxxxx By: /s/ E. Xxxxx Xxxxxxxxx
----------------- -------------------------
Name: E. Xxxxx Xxxxxxxxx
--------------------
Title: Chief Financial Officer
-------------------------
DATED: February __, 20000
3
