Exhibit 10.4
Commercial Lease
THIS LEASE made as of February 1, 2006 between Hamilton Transit
Corporate Center
(HTCC), of 572
Whitehead Road,
Trenton, NJ 08619 (the "Landlord") and Foam
Manufacturing Inc.
(FMI) of 305 Madison
Ave. , Suite 4510, New
York, NY 10165
(the "Tenant").
IN CONSIDERATION
of the mutual
covenants contained
herein, the Landlord and
Tenant hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions.
In this Lease the
following terms shall have the following
meanings:
"Additional Rent"
means all other
amounts payable by the Tenant to the
Landlord or to be discharged as Rent under this Lease;
"Building" means the
building #3 (occupying
28,000 sq.ft.
of space with
right of first refusal
for additional
lease space)
located on the
Land,
including all alterations and additions thereto and replacements
thereof.
"Commencement Date" means February 1, 2006;
"Event of Default" means an event referred to in Section 10.2;
"Land" means the land known municipally as 572 Whitehead Road,
Trenton, NJ
08619 and legally described as same;
"Lease" means
this lease and any
Schedules attached hereto, which are
referred to in this
lease, and every
executed instrument, which by its
terms amends, modifies or supplements this lease;
"Lease Year" means each successive periods of twelve (12) calendar
months
during the Term ending on an anniversary of the Commencement Date;
provided
that
if the Landlord
deems it necessary for the Landlord's accounting
purposes, the Landlord may by written notice
to the Tenant specify another
day
on which each
subsequent lease year
is to commence and in such event,
the
appropriate adjustments shall be made accordingly;
"Leased Premises" means the Property and the Building;
"Minimum Rent" means for each Lease Year, the amounts set out
hereunder*:
<TABLE>
<CAPTION>
------------ ------------------------ --------------------
Year
of Aggregate
Annual
Monthly Minimum
Term
Minimum Rent
Rent
------------ ------------------------ --------------------
<S>
<C>
<C>
Year
1
$159,600.00
$13,300.00
Year
2
$166,600.00
$13,883.34
Year
3
$173,600.00
$14,466.67
Year
4
$180,600.00
$15,050.00
Year
5
$187,600.00
$15,633.34
Year
6
$194,600.00
$16,216.67
------------ ------------------------ --------------------
</TABLE>
*The
above rent amounts include $1.95 / sq.ft. CAM charge.
"Occupancy Date" means February 1, 2006;
"Permitted Use" means the business of manufacturing, office and/or storage
and any and all uses ancillary thereto;
"Rent" means the
aggregate of all amounts payable by the Tenant to the
Landlord under this Lease;
<PAGE>
"Term" means a period
of Six (6) Years with
two 3-year renewal
options,
commencing on the Commencement Date or any renewal period
hereunder;
"Termination Date"
means January 31, 2012, unless earlier terminated as
provided in this Lease;
"Value Taxes" means all goods and services taxes, sale taxes, value-added
taxes, and any other
taxes imposed on the
Landlord with respect to this Lease,
the services provided hereunder or the Rent.
ARTICLE 2
GRANT OF LEASE AND GENERAL COVENANTS
2.1 Grant.
The Landlord hereby leases to the Tenant and the Tenant hereby
leases from the
Landlord the Leased
Premises, to have and
to hold during
the
Term, subject to the terms and conditions of this Lease.
2.2 Landlord's General
Covenants. The Landlord covenants with the Tenant:
(a)
for quiet enjoyment of
the Leased Premises; and
(b)
to observe
and perform all the covenants and obligations of the
Landlord herein.
2.3 Tenant's General
Covenants. The Tenant covenants with the Landlord:
(a)
to pay Rent; and
(b)
to observe and perform
all the covenants and obligations of the Tenant
herein.
ARTICLE 3
TERM AND POSSESSION
3.1 Term. The Term of
this Lease shall begin on the Commencement Date and end
on
the Termination
Date unless terminated earlier as provided in this
Lease.
3.2 Possession of
Leased Premises.
Notwithstanding the
Term, the Tenant shall
have
occupancy of the Leased Premises from and after the
Occupancy Date to
the
Termination
Date, during which period the Tenant
shall pay all Rent,
other than Minimum
Rent, and shall
observe and perform
all the covenants
and
obligations of the Tenant herein.
ARTICLE 4
RENT
4.1 Rent. The Tenant
shall pay to the Landlord as Rent for the Leased Premises
the
aggregate of:
(a)
Minimum Rent in respect of each year of
the Term or renewal
terms as
the case may be,
payable in advance and
without notice or
demand in
monthly installments commencing on the Commencement Date; and
(b)
Additional
Rent at the times and
in the manner provided in this Lease
or, if not so provided, as reasonably required by the Landlord.
If
the Commencement Date is not the first day of a calendar month,
Rent for
the
period from the Commencement Date to the first day of the next
calendar
month shall be pro-rated on a per diem basis and paid on
the Commencement
Date
and thereafter all subsequent monthly installments of Rent shall be
paid
in advance on the first day of each calendar month.
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<PAGE>
4.2 Net Lease.
It is the intent of
the Landlord and the Tenant that this Lease
shall be fully net to the Landlord, provided that the Tenant shall not
be
responsible for costs and expenses expressly excluded by the terms of
this
Lease, and including
but not limited to the following:
(a)
mortgage payments of
capital or interest on any mortgage affecting the
Leased Premises;
(b)
any income taxes of the Landlord, except to the extent that such
income taxes are imposed in lieu of real property taxes;
(c)
any ground rental;
(d)
any structural repairs
or replacements; (e)
any repairs caused by the
negligence of another tenant; and
(f)
any expenditures
with respect to the
Leased Premises, which
are of a
capital nature.
4.3 Payment of Rent.
One (1) month security
deposit is required.
All amounts
payable by the Tenant
to the Landlord
pursuant to this Lease shall be
deemed to be Rent and
shall be payable and recoverable as Rent in the
manner herein provided
and the Landlord shall
have all rights against the
Tenant for default in
any such payment as in
the case of arrears of rent.
Except as provided in Section 8.1, Rent shall be paid to the
Landlord in
lawful money of the United States of America, without deduction or
set-off,
at
the address
of the Landlord or to such other person or such other
address as the
Landlord may from time to time designate in writing. The
Tenant's obligation
to pay Rent shall
survive the
expiration of
earlier
termination of this Lease.
ARTICLE 5
USE AND OCCUPATION
5.1 Use of Leased
Premises. The Tenant shall use the Leased
premises only for
the
Permitted Use and shall not use or permit to be used the Leased
Premises or any part
thereof for any other
purpose or business or
by any
persons other than the Tenant.
5.2 Compliance with
Laws. The Tenant shall comply with present and future laws,
regulations and orders
relating to the occupation or use of the Leased
Premises, the condition of the leasehold improvements, equipment and other
property of the Tenant
therein, the making by the Tenant of any
repairs,
changes or improvements and the conduct of business in the Leased
Premises.
5.3 Prohibited Uses.
The Tenant shall not commit, cause or permit any nuisance
or
any waste or injury to or in or about the Leased Premises,
or to any of
the
leasehold improvements, merchandise or fixtures therein, or conduct
any
use
or manner of use causing annoyance to any person. Without limiting the
generality of the foregoing, the Tenant shall not use or permit
the use of
any
portion of the Leased
Premises for any
dangerous, illegal,
noxious,
odorous or offensive trade, business or occurrence or other use
contrary to
the
provisions
of this Lease.
The Tenant shall keep
the Leased
Premises
free
of debris or anything of a dangerous, noxious, odorous or offensive
nature or which could
create an
environmental or a
fire hazard
(through
undue load on electrical circuits or otherwise) or undue vibration,
heat or
noise.
5.4 Hazardous
Use. The Tenant shall not do, omit to do or permit to be
done
anything which will
cause or shall have the effect of causing the cost of
the
Landlord's insurance
in respect of the Leased Premises to be increased
at
any time during the
Term or any policy of
insurance on or
relating to
the
Leased Premises
to be subject to
cancellation.
Without waiving the
foregoing prohibition,
the Landlord may demand and the Tenant shall pay to
the
Landlord upon demand, the amount of any increase in the cost of
insurance caused by
anything so done or omitted to be done. The Tenant
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<PAGE>
shall forthwith upon the Landlord's request comply with the
requirements of
the
Landlord's insurers, cease any activity complained of and make good
any
circumstance which has
caused any increase in
insurance premiums or the
cancellation of any insurance policy. If any policy of insurance in
respect
of
the Leased Premises is
cancelled or becomes
subject to cancellation by
reason of anything so done or omitted to be done, the Landlord may without
prior notice terminate this Lease and re-enter the Leased
Premises.
5.5 Signage. The
Tenant shall, with the Landlord's prior written approval,
not
to
be unreasonably withheld or delayed, be permitted to install and
exhibit
sign(s) identifying
the Tenant and the Tenant's business activities on the
Leased Premises.
Subject to
requirements of existing municipal by-laws,
such
sign(s) are to be installed and maintained at the Tenant's own
expense.
5.6 Rules and
Regulations. The
Landlord shall be entitled from time to time to
make
reasonable
rules and regulations for the operation, maintenance,
safety, and use of the
Leased Premises
and the Tenant
shall comply with
such
rules and regulations and shall cause its servants, agents,
employees,
customers,
invitees
and licensees to comply with such rules and
regulations.
5.7 Toxic or
Hazardous Substances. The Tenant at present agrees to neither
store, spill or bring
onto the premises any material which is considered a
hazardous substance
as defined by the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6, et
seq. and the regulations promulgated thereunder other
than
substances ordinarily used in offices in quantities typically found
in
offices. Tenant is not
currently utilizing any material that is considered
a
hazardous substance
other than substances
ordinarily used in offices in
quantities typically
found in offices. In the event of a change in
technology so that
Tenant is required in
the future to utilize
hazardous
substances, Tenant
will notify Landlord
and obtain
Landlord's
consent,
which consent will not be unreasonably withheld or delayed. In the
event of
Tenant in the future
utilizing a
hazardous substance as defined by the
Industrial Site
Recovery Act,
Tenant hereby agrees
to indemnify and hold
Landlord harmless
with respect to said
hazardous substance and the use
thereof and
further agrees to comply with any and all regulations
concerning industries that use such hazardous substances. In the
event this
clause is violated, Tenant shall immediately, upon the request of
Landlord,
the
State or any Department thereof, remove said substance and restore
the
premises to an ISRA free condition from the violation within five (5) days
of
said notice
at Tenant's sole cost and expense. Tenant agrees to
indemnify and
hold Landlord harmless with respect to any financial
liability imposed
upon Landlord for Tenant's violations of the within
paragraph. An uncured
violation of this
paragraph shall give
Landlord an
immediate right to possession. In the event evidence of such
compliance is
not
delivered to the Landlord prior to the surrender of the premises by
the
Tenant to the Landlord, it is understood and agreed that the Tenant
shall
be
liable to pay to the Landlord an amount equal to two times the rent
then
in
effect, pro rated on a monthly
basis, together with all applicable
additional rent from the date of such surrender until such time as
evidence
of
compliance
with ISRA has been
delivered to the Landlord and together
with
any costs and expenses incurred by Landlord enforcing Tenant's
obligations under this paragraph. Evidence of compliance,
as used herein,
shall mean
a letter of non-applicability issued by the New Jersey
Department of Environmental Protection or an approved negative
declaration
or a
clean-up plan which has been fully implemented and approved by the
New
Jersey Department of Environmental Protection.
Tenant is not deemed
to be responsible
for nor does
Tenant assume any
responsibility for any
hazardous or toxic
substances which may be present
at
the premises upon the commencement of the lease. Landlord represents to
Tenant that there has been a full ISRA compliance done by Goodall Rubber
Company Inc.,
Landlord's
predecessor
in title, and to the best of
Landlord's knowledge,
there are no hazardous substances or hazardous waste
present at the
premises. Landlord
agrees to indemnify and hold Tenant
harmless with respect to any loss, liability, cost or expense which Tenant
may
sustain by reason of the presence at the commencement of the lease of
any
such hazardous substance or hazardous waste.
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<PAGE>
ARTICLE 6
RIGHTS AND OBLIGATIONS OF THE LANDLORD
6.1 Operation of
Leased Premises. The
Tenant shall assume full responsibility
for
the operation and maintenance of the Leased Premises and for the
repair
or
replacement of all fixtures or chattels located therein or thereon.
The
Landlord shall
have no responsibility whatsoever, with respect to
maintenance, repairs
or replacement,
except as provided in Section 6.2
herein, provided that if the Tenant fails to do so, the Landlord
may at its
sole
option upon 14 days prior written notice and without any obligation
to
the
Tenant elect to perform such maintenance, repairs or replacement as
the
Landlord may
reasonably deem
necessary or
desirable.
In so doing,
the
Landlord shall
not be liable for any consequential damage, direct or
indirect to any person or property, including, but without restricting
the
generality of the
foregoing,
damages for a
disruption of the business of
the
Tenant and damage to, or loss of, the goods, chattels and equipment
and
other property
of the Tenant nor
shall any reduction
or disruption of
services be construed
as a breach of the
Landlord's
covenants or as an
eviction of the Tenant, or release of the Tenant from any
obligation under
this
Lease provided that the Tenant's business is not unreasonably
interfered with.
6.2 Access by
Landlord. The Tenant shall permit the Landlord to enter the
Leased Premises at any
time outside normal
business hours in case of an
emergency and otherwise during normal business hours where such will not
unreasonably disturb
or interfere with the Tenant's use of the Leased
Premises or operation
of its business,
to examine,
inspect and show
the
Leased Premises for
purposes of leasing,
sale or financing, to provide
services or make repairs, replacements, changes or alterations as
provided
for
in this Lease and to take such steps as the Landlord may deem
necessary
for
the safety,
improvement or
preservation of the Leased Premises. The
Landlord shall,
whenever possible,
consult with or give reasonable notice
to
the Tenant prior to entry but no such entry shall constitute an
eviction
or a
breach of the Landlord's covenant for quiet enjoyment or entitle the
Tenant to any abatement of Rent. The Tenant shall also permit the
Landlord,
its
employees and agents, at any time during the six (6)
months prior to
the
expiry or termination
of this Lease to enter
the Leased Premises
for
the
purpose of showing it to any such persons as may be desirous of
purchasing or leasing the Leased Premises.
ARTICLE 7
TENANT'S RESPONSIBILITIES
7.1 Tenant's
Obligations.
In connection with the
Leased Premises, the
Tenant
hereby agrees that it shall be responsible for the following
throughout the
Term:
(a)
Insurance - The Tenant
hereby agrees to defend and save the
Landlord
harmless and
indemnify it from all injury, loss, claims or damage
(including attorney's fees and disbursements incurred by the Landlord
in conducting an
investigation
and preparing for and conducting a
defense) to any person or property arising from, relating to or in
any
way connected with the use or occupancy of the premises or the
conduct
or operation of the Tenant's business.
To maintain with responsible companies approved by the
Landlord:
(1) Comprehensive
general liability insurance against all claims,
demands or actions for
injury to or death of person or property
to the limit of not less than $1,000,000.00 per occurrence and
$2,000,000.00 in the
aggregate per occurrence and/or in the
aggregate
including
products
liability and
independent
contractor's coverage
with broad form endorsement arising from,
related to or in any way connected from the conduct and
operation
of the Tenant's
business in the Premises or caused by actions or
Page 5
<PAGE>
omissions to act where there is as duty to act of the Tenant,
its
agents, servants and contractors, which insurance shall name the
Landlord, its agents, servants, employees, contractors,
licensees
and invitees as additional insured's. Tenant will additionally
be
required to provide a
$1,000,000.00
umbrella policy over and
above the comprehensive liability.
(2) If there is a
boiler or major refrigeration equipment or pressure
object or other similar equipment in the Premises, steam boiler,
air conditioning and
machinery insurance
written on broad
form
basis to the limit of $500,000.00.
(3) Fire insurance with extended coverage, vandalism, malicious
mischief, sprinkler
leakage and flood
endorsements attached
as
the Landlord
reasonably may from time to time approve or require
covering all fixtures and equipment, stock in trade, furniture,
furnishings, improvements or betterments installed or made by
the
Tenant in, on or about
the Premises
to the extent of at least
100% of their replacement values without deduction for
depreciation but in
any event, in
applicable policies.
Tenant
will also be responsible for building replacement coverage in
the
event of loss for not less than $1,750,000.00 based on
$70.00/sqft. replacement cost.
(4) Workmen's
compensation,
disability
and such other similar
insurance covering all
persons employed in
connection with
the
Tenant's work and with
respect to whom, death
or bodily injury
claims could be
asserted against
the Tenant, Landlord or the
Premises.
(5) Rental income
insurance payable to
the Landlord as loss payee in
case of loss caused by
a casualty against
which insurance is
required hereunder
with respect to the
twelve (12) month period
following any casualty.
All of said insurance
shall be in form and with deductibles (not
greater than $1,000.00
deductible)
satisfactory to the
Landlord and
shall provide
that it shall not be subject to cancellation,
termination or change
except after at least thirty (30) days'
prior
written notice to the
Landlord. In the case of boiler and
machinery
insurance and rental
income insurance,
the policy (ies) shall
cover
the Landlord as an
additional
insured and loss
payee. All
policies
required pursuant to
this Paragraph or duly
executed duplicates of
same shall be deposited with the Landlord not less than
ten (10) days
prior to the day the Tenant begins its work and upon renewals
of said
policies not less than fifteen (15) days prior to the
expiration
of
the terms of such coverage. All such policies shall be
delivered with
satisfactory evidence
of the payment of the premium thereof. The
Landlord and Tenant mutually agree that with respect to any loss
which
is covered by insurance then being carried by them respectively or
required to be carried, the party carrying or required to carry
such
insurance and
suffering sa
