AGREEMENT OF LEASE

Exhibit 10.1

AGREEMENT OF LEASE

Between

 

Venture Hackensack Holding, Inc.,

as Landlord,

and

Caprius, Inc.

as Tenant

Dated: January 1, 2006

 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

AGREEMENT OF LEASE

THIS LEASE , made as of the 1 ^st day of January, 2006, by and between VENTURE HACKENSACK HOLDING, INC. , a New Jersey corporation, having an office at c/o Forest Green Management Corporation, 26 Court Street, Suite 300, Brooklyn, New York, 11242, herein called “Landlord,” and CAPRIUS, INC. , a Delaware corporation, having an office at One Parker Plaza, 12 ^th Floor, Fort Lee, New Jersey 07024, herein called “Tenant”;

W I T N E S S E T H

The parties hereto, in consideration of the terms, covenants and conditions herein contained, do mutually agree as follows:

ARTICLE 1 - BASIC LEASE TERMS

1.1    Basic Lease Terms . In addition to other terms elsewhere defined in this Lease, the following terms whenever used in this Lease shall have only the meanings set forth in this section, unless such meanings are expressly modified, limited or expanded elsewhere herein.

 

 

 

 

ARTICLE 2 - LEASED PREMISES

2.1      Description . Landlord leases to Tenant, and Tenant leases from Landlord, for the Term, at the rental, and subject to the terms and conditions of this Lease, the Leased Premises as defined in subparagraph (a) of Section 1.1. 

ARTICLE 3 - TERM

3.1      Commencement/Expiration . The term (the “Term”) of the Lease shall be for the period set forth in subparagraph (d) of Section 1.1, to commence on the Commencement Date as defined in subparagraph (c) of Section 1.1. Reference is made to the form of Declaration of Commencement Date (the “Declaration”) attached hereto as Exhibit “B”. After the Commencement Date, Landlord shall complete the Declaration and deliver the completed Declaration to Tenant. Within five (5) days after delivery of the completed Declaration, Tenant shall execute and return the Declaration to the Landlord. Failure to execute the Declaration shall not affect the commencement or expiration of the Term. 

ARTICLE 4 - RENT AND SECURITY DEPOSIT

4.1      Fixed Rent . As Fixed Rent beginning on the Commencement Date and continuing throughout the Term, Tenant shall pay to Landlord at the office of Forest Green Management Corporation, 26 Court Street, Suite 300, Brooklyn, New York, 11242, by check, subject to collection, drawn to the order of Venture Hackensack Holding, Inc., or at such other place and in such other manner as Landlord may from time to time designate,

 

monthly installments, in United States Dollars, without previous demand therefor in advance on the first business day of each month regardless of the date on which the Term commences, in the amounts set forth in subparagraph (e) of Section 1.1. If the Commencement Date falls on other than the first day of the month, Fixed Rent for the partial month shall be prorated. Simultaneously with the execution of this Lease, Tenant has paid a first full month’s Fixed Rent and Tenant Electric Amount (as defined in Section 13.2) to Landlord, which shall be applied to the first full month’s Fixed Rent and Tenant Electric Amount when due.

As a rent concession to Tenant, Landlord agrees to waive the installment of Fixed Rent accruing for the first (1 ^st ) two (2) full calendar months of the Term; provided, however, that on the first (1 ^st ) calendar day of each such month, Tenant shall not be in default of any of the obligations under this Lease after any applicable notice and beyond and applicable grace period provided herein.

4.2      Additional Rent . Tenant shall also pay as Additional Rent any and all such other sums of money as shall become due to Landlord pursuant to the terms and provisions hereof including but not limited to tenant improvements authorized by and to be paid by Tenant.

4.3      Payment of Rent . Tenant shall pay the Fixed Rent and Additional Rent herein reserved promptly as and when the same shall become due and payable, without demand therefor and without any abatement, deduction or set-off whatsoever except as expressly provided in this Lease. If Tenant shall fail to pay the Fixed Rent and Additional Rent within ten (10) days following the due date of any such payment, and if Landlord agrees to accept any such late payment, then in the event of such late payment, Tenant agrees to pay to Landlord a late charge equal to five (5%) percent of the amount of the late payment, which late charge shall be due and payable on the date the next installment of rent is due. The late charge is not intended as a penalty but is intended to compensate Landlord for the extra expense it will incur to send out late notices and handle other matters resulting from the late payment. In addition, interest shall accrue and shall be due and payable on any monetary payments (including but not limited to Fixed and Additional Rent) due under this Lease from thirty (30) days after due date until full payment at an annual rate of four (4%) percent due above the annual prime rate of Fleet Bank, Hackensack, New Jersey, or its successor, as it changes from time to time (interest rate herein shall change on the same dates as changes in the prime rate), or if said rate under the circumstances then prevailing shall not be lawful, then at the maximum lawful rate permitted. The foregoing shall be in addition to any other right or remedy which may be available to Landlord in the event of default by Tenant. 

 

4.4      Security Deposit . Tenant has this day deposited with Landlord in the amount set forth in subparagraph (f) of Section 1.1 as security (the “Security Deposit”) for the payment of rent hereunder and the full and faithful performance by Tenant of the covenants and conditions on the part of Tenant to be performed. Said sum shall be returned to Tenant, without interest, sixty (60) days after the expiration of the Term, provided that Tenant has fully and faithfully performed all such covenants and conditions and is not in arrears in Fixed Rent and/or Additional Rent. During the Term, Landlord may, if Landlord so elects, have recourse to such security, to make good any default by the Tenant, in which event Tenant shall, on demand, promptly restore said security to its original amount. In the event of a sale of the Building, Landlord shall have the right to assign or transfer said security, for the benefit of Tenant, to any subsequent owner of the Leased Premises, in which case the assignee shall become liable for the repayment thereof as herein provided, and the assignor shall be deemed to be released by Tenant from all liability to return such security. This provision shall be applicable to every alienation or change in title and shall in no way be deemed to permit Landlord to retain the security after termination of the Landlord’s ownership of the Building. Tenant shall not mortgage, encumber or assign said security without the written consent of Landlord. Landlord shall not be required to maintain the security deposit in segregated or separate accounts and may commingle the security deposit with its general funds.

ARTICLE 5 - USE

5.1      Permitted Use . The Leased Premises, or any part thereof, shall not be used by anyone except Tenant, and shall be used or permitted to be used for no use other than the following: general office use.

5.2      Dispensing Food, etc . Tenant will not, without the prior written consent of the Landlord, permit the dispensing, preparation, or serving of any beverages and/or foods within the Leased Premises, except that this shall not prohibit the preparation and consumption of hot and cold beverages and light meals for employees including by use of a microwave oven within the Leased Premises nor the consumption by employees of light meals prepared outside of the Leased Premises.

5.3      Certain Uses . Tenant acknowledges and agrees with Landlord that the Building should be maintained and preserved as a prestigious and first-class office building and that its special character arising from it being adjacent to a university campus should be specifically protected and preserved. Tenant therefore represents that it is not leasing the Leased Premises, and it will not use such Leased Premises, for any purpose other than that provided in Section 5.1 hereof. Tenant further agrees that the Leased Premises, or any part thereof, shall not be used as an educational facility of any type (except that Tenant may conduct training classes with respect to its products for its employees in the Leased Premises) including correspondence schools, an employment agency, a model agency, a spa, a health, physical fitness or exercise salon, a small loan office, a real estate brokerage, an office of any practitioner of the healing arts, a telemarketing or boiler-room operations, or an

 

office for any other profession or business that by its nature tends to generate excess customer traffic or require excessive personnel, or any other use which Landlord in good faith determines will or is likely to demean the character of the Building or its environment. Landlord’s refusal to consent to the assignment of this Lease, or the subletting of the Leased Premises, or any part thereof, for any such prohibited use shall not constitute an unreasonable refusal to consent to any such assignment or subletting pursuant to the provisions of Article 8 hereunder. Landlord and Tenant specifically agree that Landlord’s leasing of any portion of the Building for any of the foregoing prohibited uses shall not constitute or be deemed to constitute a waiver of Landlord’s right to prohibit Tenant from assigning or subletting the Leased Premises or any part thereof for any such prohibited use.

5.4      Parking . Tenant shall, at all times during the Term, be entitled to the use of the number of parking spaces in Landlord’s parking lot (the “Parking Lot”), which is adjacent to the Building, set forth in subparagraph (k) of Section 1.1. Such parking spaces shall be solely for the use of Tenant, its employees and business invitees. Tenant agrees that it will not permit its employees and business invitees to occupy, at any time, more than thirteen (13) parking spaces in the Parking Lot in the aggregate, or to occupy any parking space in the Parking Lot designated as reserved for any tenant other than Tenant, or which is otherwise restricted. Tenant shall take such action, at the request of Landlord, as may be reasonably necessary to insure that Tenant and its employees and business invitees do not violate the foregoing parking restrictions. The use of parking spaces in the Parking Lot by Tenant and its employees and business invitees shall be subject to such reasonable rules and regulations as may be established by Landlord from time to time, including all signs and notices posted by Landlord in the Parking Lot or roadways leading thereto. Landlord hereby expressly reserves the right, from time to time, to change the location, area or configuration of the Parking Lot; to change the location and arrangement of parking spaces in the Parking Lot, including parking spaces designated for Tenant; to build multi-story parking facilities; and to close temporarily all or any portion of the Parking Lot for the purpose of making repairs, improvements or changes thereto. Landlord shall have the right, at any time, to convert the entire Parking Lot, with the exception of spaces designated for use by visitors, handicapped persons, delivery and emergency vehicles, etc., to a “first-come, first served” basis, in which event no tenant of the Building, including Tenant, shall thereafter have any parking spaces designated for its exclusive use. Tenant agrees, on behalf of itself, its employees and business invitees, to look solely to insurance, if any, maintained by Tenant, for any recovery for injury to any person, or loss or damage to any property, including without limitation theft of or from a vehicle, fire or collision, by or through the acts or omissions of any person or any other cause. 

ARTICLE 6 - OCCUPANCY

6.1      Move-In Day . Tenant must provide Landlord with reasonable advance notice of the date Tenant intends to move into the Leased Premises. Personnel working on the job, on behalf of moving contractor, must be members of the appropriate union. On weekdays, the moves must be finished by 4:00 P.M., or there will be an overtime charge of $25.00 per hour until 6:00 P.M. From 6:00 P.M., there will be an overtime charge of $35.00 per

 

hour, until 9:00 P.M. From 9:00 P.M., there will be an overtime charge of $45.00 per hour. On weekends, the move must be finished by 1:00 P.M. Saturday, or there will be an overtime charge of $35.00 an hour until 6:00 P.M. Saturday. After 6:00 P.M. Saturday, there will be an overtime charge of $60.00 per hour. Landlord will attempt to provide one (1) elevator for the exclusive use of Tenant while the move is being made. Tenant will be held responsible for any damage caused to the Building by moving contractor’s acts. Tenant shall see that moving contractor’s personnel take proper precautionary steps.

ARTICLE 7 - TAX AND OPERATING ADJUSTMENT

7.1      Annual Adjustment . For the Lease Year commencing January 1, 2007 and for each Lease Year or portion thereafter within the Term, Tenant will pay as Additional Rent its pro rata share, as set forth in subparagraph (h) of Section 1.1, of any Increase in Real Estate Taxes assessed against the land and Building plus any Increase in Operating Expenses. As used herein:

 

7.2      Time of Payment . Landlord shall, during the first quarter of each Lease Year (or as soon thereafter as reasonably practicable), commencing with the Lease Year beginning January 1, 2007, submit to Tenant a statement (the “Estimated Statement”) showing Landlord’s estimate of Operating Expenses and Real Estate Taxes for such Lease Year, together with Landlord’s calculation of estimated Additional Rent for Increases in Operating Expenses and Real Estate Taxes for such Lease Year. Commencing on the first business day of the month following the delivery by Landlord of the Estimated Statement, and continuing on the first business day of each month thereafter, Tenant shall pay an amount equal to 1/12 of the estimated Additional Rent shown on the Estimated Statement. In each subsequent Lease Year, if the amount of estimated Additional Rent from the beginning of such subsequent Lease Year through and including the month in which Landlord delivers the Estimated Statement for such subsequent Lease Year is less than or greater than the amount of estimated Additional Rent actually due for such period, Tenant, in the event of an underpayment, shall pay to Landlord the amount of such difference on the first business day of the month immediately following the delivery of the Estimated Statement for such subsequent Lease Year, or Landlord, in the event of an overpayment, shall credit the amount of such difference against the amount due as Additional Rent on the first business day of the month immediately following the delivery of the Estimated Statement for such subsequent Lease Year. Landlord shall, after the expiration of each such Lease Year, submit to Tenant a statement (the “Final Statement”) showing the actual amount of Operating Expenses and Real Estate Taxes accrued for such Lease Year, together with Landlord’s calculation of the

 

actual Additional Rent for Increases in Operating Expenses and Real Estate Taxes for such Lease Year. If the amount of the actual Additional Rent for any Lease Year, as shown on the Final Statement, exceeds the amount of the estimated Additional Rent paid by Tenant for that Lease Year, Tenant shall pay to Landlord, within thirty (30) days of Tenant’s receipt of the Final Statement, an amount equal to the actual Additional Rent, as shown on the Final Statement, less the estimated Additional Rent paid by Tenant for that Lease Year. If the amount of the actual Additional Rent for any Lease, as shown on the Final Statement, is less than the amount of the estimated Additional Rent paid by Tenant for that Lease Year, Landlord shall apply an amount equal to the estimated Additional Rent paid by Tenant, less the actual Additional Rent for that Lease Year to the amount of estimated Additional Rent due for the next Lease Year. Even though the Term has expired and Tenant has vacated the Leased Premises, when the final determination is made of Additional Rent due pursuant to this Article 7 for the Lease Year in which this Lease terminates, Tenant shall immediately pay any Additional Rent due and, conversely, any overpayment shall be immediately rebated by Landlord to Tenant. For sixty (60) days after the submission of the Final Statement to Tenant, Landlord shall make available its records and reasonable detail supporting Landlord’s calculation of the amount of actual Additional Rent for Increases in Operating Expenses and Real Estate Taxes as set forth in the Final Statement for examination at reasonable times by Tenant and its authorized representatives. The Final Statement shall be conclusive and binding on Tenant, unless objected to in writing by Tenant within sixty (60) days following the delivery of the Final Statement. Should this Lease commence on any day other than the first day of a Lease Year or terminate on any day other than the last day of a Lease Year, any Additional Rent payable hereunder on account of an Increase in Real Estate Taxes or an Increase in Operating Expenses for any such partial Lease Year shall be the amount of Additional Rent that would have been due for such entire Lease Year, multiplied by a fraction, the numerator of which shall be the number of days within the term of the Lease actually falling within such Lease Year and the denominator of which shall be three hundred sixty-five (365).

7.3      Base Real Estate Taxes Adjustment . Base Real Estate Taxes shall be determined from the amount determined to be legally due for the calendar year ending December 31, 2006 as a result of legal proceedings or otherwise. In the event the Base Real Estate Taxes have not been finally determined by legal proceedings or otherwise at the time of computation of the Increase in Real Estate Taxes for any Lease Year, the actual amount of Base Real Estate Taxes paid by Landlord for the calendar year ending December 31, 2006 shall be used to calculate any excess thereof. Upon a final determination of the Base Real Estate Taxes by legal proceedings or otherwise, Landlord shall deliver to Tenant a statement setting forth the amount of the Base Real Estate Taxes as finally determined and a recalculation of the Increase in Real Estate Taxes of each Lease Year affected thereby, and showing the computation of any adjustment due to Landlord or to Tenant by reason thereof. The amount of any such adjustment shall be paid by the party responsible therefor to the other party within forty-five (45) days from the delivery of such statement.

 

7.4      Tax Refund . If Landlord shall receive any tax refund in respect to any Lease Year, Landlord shall deliver to Tenant a statement setting forth the net amount of such refund, after deducting any reasonable and customary expenses incurred in obtaining such refund, and a recalculation of the Increase in Real Estate Taxes for such Lease Year reflecting such net refund, and showing the amount of the adjustment, if any, due to Tenant by reason thereof. The amount of any such adjustment shall be paid by Landlord to Tenant within forty-five (45) days from the delivery of such statement. Any such expenses incurred by Landlord in contesting the validity or the amount of the assessed valuation of the property or of any Real Estate Taxes for any Lease Year, to the extent not offset by a tax refund, shall be included as an item of Real Estate Taxes for the Lease Year in which such contest shall be finally determined. 

ARTICLE 8 - ASSIGNMENT AND SUBLETTING

8.1      No Assignment . (a) The Leased Premises shall not be let, underlet or assigned by Tenant, in whole or in part, nor shall permission be given for the use of any part thereof by any person or entity other than Tenant, without the written consent of Landlord first endorsed thereon, which consent shall not be unreasonably withheld or delayed, but which shall be subject to the provisions of Section 5.3 hereof. Any attempt to let, underlet or assign the Lease Premises without the prior written consent of Landlord shall be null and void. Such written consent, or any waiver thereof, in one or more instances, shall not be deemed a waiver of the necessity of written consent in subsequent instances. Under no circumstances shall Tenant mortgage, hypothecate or otherwise use this Lease as security. Any attempt to mortgage, hypothecate or otherwise use this Lease as security shall be null and void. Any transfer of this Lease by merger, consolidation or liquidation, or any change in beneficial ownership of Tenant, whether the result of a single transaction or series of transactions, shall constitute an assignment. For purposes of this section, “change in beneficial ownership” shall mean a change in the beneficial ownership of more than fifty (50%) percent of (a) the outstanding voting stock of Tenant, in the case of a corporation; (b) the partnership interests of Tenant, in the case of a general partnership; (c) the general partnership interests of Tenant, in the case of a limited partnership; or (d) the membership interests of Tenant, in the case of a limited liability company. The restrictions contained in the foregoing sentence shall not, however, be applicable to transfers of shares of a corporation of all of the outstanding voting stock which is listed on a national securities exchange (as defined in the Securities Exchange Act of 1934, as amended). For purposes of this section, stock ownership shall be determined in accordance with the principles set forth in Section 544 of the Internal Revenue Code, and the term “voting stock” shall refer to shares of stock regularly entitled to vote for the election of the directors of the corporation.

(b)   The restrictions contained in Section 8.1(a), and the provisions of Sections 8.2 and 8.3, shall not apply to transactions with a corporation into or with which Tenant is merged or consolidated or to which all of substantially all of Tenant’s assets are transferred or to a corporation which controls or is controlled by Tenant or is under common control with Tenant, provided that in the event of any such merger, consolidation or transfer

 

(i) the successor to Tenant has a net worth computed in accordance with generally accepted accounting principles at least equal to the net worth of the Tenant named herein on the date of this Lease; and (ii) proof reasonably satisfactory to Landlord of such net worth shall have been delivered to Landlord not less than ten (10) days prior to the effective date of such transaction.

8.2      Request for Consent . Tenant shall give Landlord fifteen (15) business days’ written notice of its intention to assign this Lease or sublet all or any portion of the Leased Premises (“Notice of Intention”), which notice shall include a copy of the proposed assignment, agreement or sublease and, if not stated therein, the names and addresses and nature of the business of the proposed assignee or subtenant and its proposed use of the Leased Premises, the terms of the transaction, the date on which the proposed assignment or sublease is to become effective, a summary of plans and specifications, if any, revising the floor layout of the Leased Premises, together with sufficient financial information with respect to the proposed assignee or subtenant to enable Landlord to determine its financial condition. Such Notice of Intention shall be given to Landlord in accordance with Section 25.11 hereof. In no event shall Tenant offer to assign this Lease or sublet all or any portion of the Leased Premises to any person or entity which has negotiated with Landlord for the leasing of space in the Building within six (6) months of the proposed offer by Tenant. Within said fifteen (15) business days Landlord shall notify Tenant in writing of its determination with respect to requested assignment or sublease and the election set forth in Section 8.3 hereof. Within said fifteen (15) business days, Landlord shall have the right to withhold consent to the proposed sublease or assignment (i) in the event same is prohibited by the terms of Section 5.3 hereof, or (ii) the assignee’s or subtenant’s financial condition in the judgment of Landlord is not comparable to that of Tenant, or (iii) if the proposed subtenant or assignee is a present tenant of the Landlord or within the previous year had been a tenant in the Building, or (iv) if the quantity or location of the space proposed to be sublet or assigned is inappropriate in the judgment of Landlord, or (v) if Tenant is offering to sublet or assign space at a rate that is below the then market rate being charged for space of like quantity by the Landlord, or (vi) the business of the proposed assignee or subtenant as determined by its federal North American Industry Classification System code number would make it subject to the provisions of ISRA. In the event Landlord does not respond to Tenant’s Notice of Intention within said thirty (30) day period, does not exercise its election as set forth in Section 8.3 hereof or does consent to the assignment or sublease, Tenant may thereafter assign this Lease or sublet all or any portion of the Leased Premises to the same party and on the same terms as set forth in the notice. On or before the effective date of the assignment or sublease, Tenant shall send an executed original of the assignment or sublease to Landlord. In the event any such assignment or sublease is executed, the assignee or subtenant shall assume and agree to be bound by all the terms, covenants, conditions, provisions and agreements of this Lease for the period covered by the assignment or sublease. Such assumption agreement shall be in writing in a form satisfactory to Landlord, and delivered to Landlord within five (5) days prior to the commencement of the occupancy set forth in the assignment or sublease. The consent by Landlord to any assignment or sublease shall not, nor shall it be deemed to, relieve or release the assigning Tenant from

 

liability for the full and faithful performance of all the terms, covenants, provisions and conditions required to be performed under this Lease by “Tenant”. In the event Landlord consents to any such subletting or assignment, Tenant shall pay to Landlord, monthly, as Additional Rent, fifty (50%) percent of the amount of rent received by Tenant from any such sublessee or assignee in excess of the Fixed and Additional Rent, as from time to time adjusted in accordance with Article 7 hereof, after appropriate provision has been made for the payment of broker’s commissions incurred in connection with such subletting or assignment and the recovery by Tenant of reasonable fit-up costs actually expended by Tenant in connection with any such subletting or assignment. 

8.3      Take Back . The parties further agree that in lieu of Landlord giving its written consent to a sublease or assignment, where required, Landlord may elect to recapture all of the Leased Premises in the event of a proposed assignment of the Lease or that portion of the Leased Premises that Tenant proposed to sublet in the event of a proposed sublease (the “Recapture Space”) for the purposes of entering into a direct lease with the proposed sublessee or assignee or obtaining the Recapture Space for Landlord’s own use. If Landlord elects to recapture the Recapture Space, Tenant shall vacate and surrender the Recapture Space by not later than the date set forth in Tenant’s Notice of Intention as the date on which the proposed sublease or assignment was to become effective. If Landlord elects to recapture the Recapture Space, Landlord shall release Tenant from any further obligation under this Lease with respect to the Recapture Space, except for the payment of Fixed Rent, Additional Rent and other charges due to Landlord with respect to the Recapture Space and except for Tenant’s obligations to indemnify, defend and hold Landlord harmless as set forth in Sections 10.3, 11.3, 11.5 and 22.1 of this Lease, as of the date Tenant vacates and surrenders the Recapture Space. 

8.4      Certain Rights of Landlord . In the event any assignment, sublease, use or occupancy of the Leased Premises by any party other than Tenant, whether or not in violation of this Article 8, Landlord shall have the right, in the event of a default by Tenant under this Lease, to accept from any assignee, subtenant or any other party claiming a right to the interest of Tenant under his Lease or who occupies any part of the Leased Premises the payment of Fixed Rent and Additional Rent and/or the performance of any other obligation of Tenant under this Lease. Such acceptance shall not be deemed a waiver by Landlord of the breach of this Lease by Tenant nor a recognition by Landlord that any such assignee, subtenant, claimant or occupant has succeeded to the right of Tenant hereunder, nor a release by Landlord of Tenant from further performance by Tenant of its obligations under this Lease. The net amount of any Fixed Rent and Additional Rent collected from any such assignee, subtenant, claimant or occupant shall be applied by Landlord to the Fixed Rent and Additional Rent to be paid hereunder.

8.5      Bankruptcy . If pursuant to the Federal Bankruptcy Code (or any similar law hereafter enacted having the same general purpose), Tenant is permitted to assign this Lease notwithstanding the restrictions contained in this Lease, adequate assurance of future performance by an assignee expressly permitted under such Code shall be deemed to mean

 

the deposit of additional Security Deposit in an amount equal to the sum of one (1) year’s Fixed Rent plus an amount equal to the Additional Rent for the calendar year preceding the year in which such assignment is intended to become effective, which deposit shall be held by Landlord as part of the Security Deposit for the remaining term of this Lease as provided in Section 4.4 of this Lease.

ARTICLE 9 - REPAIRS AND MAINTENANCE

9.1      Condition of Premises to be Delivered . Tenant acknowledges and agrees that the Leased Premises shall be delivered to Tenant at the beginning of the term “AS IS,” in the condition and state of repair existing as of the date of this Lease (except that Landlord shall deliver the Leased Premises to Tenant free of any subtenancies) and Landlord shall have no obligation to make any improvements, alterations, or decorations, or to perform any other work in or with respect to the Leased Premises. Tenant has inspected, and has had the opportunity to have an architect, engineer, contractor or other representative of Tenant inspect, the Leased Premises on the date of this Lease. Tenant has not relied on any statement, representation or undertaking, written or oral, by or on the behalf of Landlord with respect to the foregoing.

Notwithstanding the foregoing, as soon as reasonably practicable after the Commencement Date, Landlord shall perform the work set forth on Exhibit “C” attached hereto (“Landlord’s Work”). Landlord shall use commercially reasonable efforts to complete Landlord’s Work on or before January 21, 2006; provided, however, that in the event Landlords’ Work is not completed on or before such date, this Lease shall remain in full force and effect and Tenant shall have no claim against Landlord with respect thereto. Landlord agrees to use reasonable efforts, without, however, extraordinary expense, to perform Landlord’s Work in a manner that which will minimize any disruption to Tenant’s business. Landlord shall be under no obligation to perform Landlord’s Work on weekends or after normal business hours, but Landlord may, in Landlord’s discretion, perform a portion of Landlord’s Work during such times if possible without incurring additional expense. Tenant agrees that it shall move all furniture, furnishings, equipment and other property away from the areas of the Leased Premises in which Landlord is performing Landlord’s Work so as to provide Landlord’s contractors with sufficient space in which to perform Landlord’s Work. Prior to the completion of Landlord’s Work, Tenant will use its best efforts to accommodate completion of such work and will not interfere with Landlord’s contractors. Tenant agrees to such limitations of its use and occupancy of the Leased Premises during the performance of Landlord’s Work, and acknowledges and agrees that such limitations shall not constitute an eviction of Tenant or a breach of Landlord’s covenant of quiet enjoyment. Tenant further agrees that Tenant shall not claim any reduction in or abatement of rent, or any damages or offsets against rent, as a result of such limitation.

9.2      Tenant’s Duties . Tenant shall take good care of the Leased Premises and any and all fixtures therein, and shall be responsible for any injury, damage, or breakage done by the Tenant or the Tenant’s agents, servants, and invitees and, at the end of the Term or earlier

 

termination of the Lease, shall quit and surrender said premises in the same condition as existed on the Commencement Date, reasonable wear and tear excepted, and with all personal property not owned by Landlord and debris removed and with the Leased Premises in “broom clean” condition. Tenant, at Tenant’s expense, shall make all alterations and repairs to the Leased Premises required by the Americans With Disabilities Act, except Landlord, at Landlord’s expense, will make all such alterations and repairs which are required on the Commencement Date.

9.3      Alterations/Consent . Tenant shall make no alterations, changes, additions or improvements in the Leased Premises without the written consent of the Landlord, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Tenant shall have no right to make any alterations, changes, additions or improvements to the electrical and heating, ventilating, air-conditioning systems or structural members in the Leased Premises. Any such required alterations, changes, additions or improvements to the electrical or HVAC systems shall be made exclusively by Landlord’s contractors based on plans and specifications prepared by Tenant and approved by Landlord’s engineers at Tenant’s cost and expense.

9.4      Alterations Belong to Landlord . All alterations, additions and improvements made by either party upon the Leased Premises shall become the property of Landlord and shall remain upon and be surrendered with the Leased Premises as part thereof, at the expiration or termination of the Lease; except that at such expiration or termination, Tenant shall have the right to remove and retain as Tenant’s own property, any additions or improvements made by Tenant or at Tenant’s sole expense, except for carpeting, provided that Tenant shall repair any damage caused by such removal and shall restore the Leased Premises to the same or as good condition as existed immediately before such additions or improvements were made. Tenant shall, if requested by Landlord, remove any such interior changes, alterations, additions and improvements at the expiration of the Term and restore the Leased Premises to the condition they were in at the beginning of the Term; provided, however, that Tenant shall not be required to remove or restore the Tenant Improvement Work described in Exhibit “C”, or any alterations, additions or improvements for which Landlord has given its consent pursuant to Section 9.3 hereof, unless Landlord had advised Tenant, at the time of such consent, that restoration or removal would be required with respect to all or a portion of such alterations, additions or improvements.

9.5      Governmental Approvals . Tenant shall, before making any alterations, additions, installations, or improvements, at its expense, obtain all permits, approvals and certificates required by any governmental or quasi-governmental bodies and (upon completion) certificates of final approval thereof and shall deliver promptly duplicates of all such permits, approvals and certificates to Landlord, and Tenant in connection with such work agrees to carry and will cause Tenant’s contractors and subcontractors to carry such Worker’s Compensation, general liability, personal and property damage insurance as Landlord may require. Tenant agrees that any alterations, additions or installations shall be undertaken exclusively by contractors whose employees are members of appropriate unions.

 

If any construction lien or notice of unpaid balance is filed against the Leased Premises or the Building for work claimed to have been done for, or materials furnished to, Tenant, whether or not done pursuant to this article, the same shall be discharged by Tenant within twenty (20) days thereafter, at Tenant’s expense, by filing the bond required by law, or in such other manner satisfactory to Landlord.

ARTICLE 10 - REQUIREMENTS OF LAW AND FIRE UNDERWRITERS

10.1      Notice of Violation . Tenant shall give prompt notice to Landlord of any notice it receives of the violation of any law or requirement of public authority, or from the Board of Fire Underwriters.

10.2      Compliance with Law . Tenant, at its own cost and expense, shall promptly execute and comply with any statutes, ordinances, rules, orders, regulations and requirements of the federal, state, or municipal government, and of any of their departments or bureaus, which may be applicable to the Leased Premises by reason of any act or conduct on the part of Tenant, or by reason of the character of its occupancy of the Leased Premises; and Tenant shall promptly correct and abate any such violation caused by its acts, at its own cost and expense. Tenant shall also promptly comply with and execute all rules, orders or regulations of the Board of Fire Underwriters for the prevention of fires or the risk thereof, in Landlord’s building where such rules, orders, or regulations are made applicable by any act or conduct of Tenant, or by the character of its occupancy of the Leased Premises.

10.3      ISRA and Environmental Laws .

A.      Tenant shall, at Tenant’s own expense, comply with the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., and the regulations promulgated thereunder (“ISRA”). Tenant shall, at Tenant’s own expense, make all submissions to, provide all information to, and comply with all requirements of, the New Jersey Department of Environmental Protection or its replacement or similar department, agency, bureau or division (“NJDEP”). Should any division of NJDEP determine that a cleanup plan be prepared and that a cleanup be undertaken because of any spills or discharges of hazardous substances or wastes at the Building or land in or on which the Leased Premises are located (the “premises”) which were caused by Tenant or its officers, employees, agents, contractors or invitees and which occur during the Term, then Tenant shall, at Tenant’s own expense, prepare and submit the required plans and financial assurances, and carry out the approved plans. Tenant’s obligations under this paragraph shall arise if there is any closing, terminating or transferring of operations of an industrial establishment at the premises or a sale or transfer of ownership of the premises by the Landlord, all pursuant to ISRA, or if there has been a spill or discharge which is Tenant’s responsibility. At no expense to Landlord, Tenant shall promptly provide all information requested by Landlord for preparation of documents supporting an application for a determination by the NJDEP of non-applicability of ISRA to Tenant or submission of a negative declaration to the NJDEP and shall promptly sign and submit such documents when requested by Landlord. Tenant

 

shall indemnify, defend and save harmless Landlord from all fines, suits, procedures, claims and actions of any kind arising out of or in any way connected with any spills or discharges of hazardous substances or wastes at the premises which are Tenant’s responsibility and which occur during the Term, and from all reasonable expenses incurred for legal, engineering and expert fees, and from all fines, suits, procedures, claims and actions of any kind arising out of Tenant’s failure to provide all information, make all submissions and take all actions required by ISRA or any division of NJDEP concerning ISRA or any other federal or state environmental law. Tenant’s obligations and liabilities under this paragraph shall continue so long as Landlord remains responsible for compliance with ISRA or any other federal or state environmental law regarding any spills or discharges of hazardous substances or wastes at the premises which occur during the Term, as a result of the acts o