Exhibit 10.32 LEASE AGREEMENT BETWEEN 8 SYLVAN WAY, LLC, A New Jersey Limited Liability CompanyLease Agreement |
|
|
You are currently viewing: This Lease Agreement involves
MEDICINES CO /DE | Hampshire Partners LLC | MEDICINES COMPANY | SYLVAN WAY, LLC | Thacher Proffitt & Wood LLP. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
QuickLinks -- Click here to rapidly navigate through this document
LEASE AGREEMENT BETWEEN 8
SYLVAN WAY, LLC, LANDLORD, -AND- THE
MEDICINES COMPANY TENANT DATED: October 11, 2007 Prepared by: Robert A. Klausner,
Esq.
i
This LEASE AGREEMENT (this "Lease" ) is dated October 11, 2007 and is between 8 SYLVAN WAY, LLC , a New Jersey limited liability company, having an office at 15 Maple Avenue, Morristown, New Jersey 07960 ( "Landlord" ), and THE MEDICINES COMPANY , a Delaware Corporation ( "Tenant" ). BASIC LEASE PROVISIONS
2
3
Capitalized terms used in this Lease but not otherwise defined have the meanings set forth in Appendix I . 2.1 Demise of Premises. Landlord hereby leases and demises to Tenant, and Tenant hereby hires and takes from Landlord, upon the terms and conditions set forth herein, the Premises for the Term. 2.2 Term. (a) Term: The Term of this Lease will commence on the Commencement Date and end on the Termination Date. (b) Commencement Date. The "Commencement Date" will be the earlier to occur of (i) the date Tenant takes occupancy of the Phase 1 Premises for the purposes of conducting its business, and (ii) five (5) days after Landlord has Substantially Completed (as hereinafter defined) the Tenant Finish Work for the Phase 1 Premises. Landlord shall use all reasonable and good faith efforts to have the Tenant Finish Work with respect to the Phase 1 Premises Substantially Completed on or before September 1, 2008. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 1 Premises is not Substantially Completed on or before September 1, 2008, Tenant shall be entitled to a one day abatement of Basic Rent with respect to the Phase 1 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to October 31, 2008. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 1 Premises is not Substantially Completed on or before November 1, 2008, then in addition to the abatement in Basic Rent provided in the immediately preceding sentence, Tenant shall be entitled to a two (2) day abatement of Basic Rent with respect to the Phase 1 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to December 31, 2008. Subject to a Tenant Delay or an Excusable Delay, if Tenant's Finish Work with respect to the Phase 1 Premises is not Substantially Completed on or before January 1, 2009, then in addition to the abatement in Basic Rent provided in the two immediately preceding sentences, Tenant shall be entitled to a four (4) day abatement of Basic Rent with respect to the Phase 1 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed. Any such accrued abated amounts shall be credited against the first and 4
subsequent installments of Basic Rent coming due under this Lease for Premises until the entire abated amount has been fully credited. Landlord shall use all reasonable and good faith efforts to have the Tenant Finish Work with respect to the Phase 2 Premises Substantially Completed on or before September 1, 2009. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 2 Premises is not Substantially Completed on or before September 1, 2009, Tenant shall be entitled to a one day abatement of Basic Rent with respect to the Phase 2 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to October 31, 2009. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 2 Premises is not Substantially Completed on or before November 1, 2009, then in addition to the abatement in Basic Rent provided in the immediately preceding sentence, Tenant shall be entitled to a two (2) day abatement of Basic Rent with respect to the Phase 2 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to December 31, 2009. Subject to a Tenant Delay or an Excusable Delay, if Tenant's Finish Work with respect to the Phase 2 Premises is not Substantially Completed on or before January 1, 2010, then in addition to the abatement in Basic Rent provided in the two immediately preceding sentences, Tenant shall be entitled to a four (4) day abatement of Basic Rent with respect to the Phase 2 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed. Any such accrued abated amounts shall be credited against the first and subsequent installments of Basic Rent coming due under this Lease for Premises until the entire abated amount has been fully credited. Landlord shall use all reasonable and good faith efforts to have the Tenant Finish Work with respect to the Phase 3 Premises Substantially Completed on or before September 1, 2010. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 3 Premises is not Substantially Completed on or before September 1, 2010, Tenant shall be entitled to a one day abatement of Basic Rent with respect to the Phase 3 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to October 31, 2010. Subject to a Tenant Delay or an Excusable Delay, if Tenant Finish Work with respect to the Phase 3 Premises is not Substantially Completed on or before November 1, 2010, then in addition to the abatement in Basic Rent provided in the immediately preceding sentence, Tenant shall be entitled to a two (2) day abatement of Basic Rent with respect to the Phase 3 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed up to December 31, 2010. Subject to a Tenant Delay or an Excusable Delay, if Tenant's Finish Work with respect to the Phase 3 Premises is not Substantially Completed on or before January 1, 2011, then in addition to the abatement in Basic Rent provided in the two immediately preceding sentences, Tenant shall be entitled to a four (4) day abatement of Basic Rent with respect to the Phase 3 Premises for each day thereafter that Tenant Finish Work is not Substantially Completed. Any such accrued abated amounts shall be credited against the first and subsequent installments of Basic Rent coming due under this Lease for Premises until the entire abated amount has been fully credited. (c) AS IS. Except as otherwise provided herein, Tenant acknowledges that neither Landlord nor any employee, agent or representative of Landlord has made any express or implied representations or warranties with respect to the physical condition of the Building or the Premises, the fitness or quality thereof or any other matter or thing whatsoever with respect to the Building or the Premises or any portion thereof, and that Tenant is not relying upon any such representation or warranty in entering into this Lease. Tenant has inspected the Building and the Premises and is thoroughly acquainted with their respective condition. 2.3 Commencement Date Agreement. When the Commencement Date occurs, Landlord and Tenant shall enter into an agreement in the form annexed hereto as Schedule D memorializing the Commencement Date and Termination Date of this Lease. 5
2.4 Move-In Day. If any portion of the move takes place on weekends, business holidays or after 7:00 PM on weekdays, Tenant shall pay to Landlord, on the next Basic Rent Payment Date, an overtime charge of $50.00 per hour or part thereof until 11:00 PM. Tenant shall be responsible for any damage caused to the Premises, the Building and/or the Property by Tenant or its moving contractors. 2.5 Base Building Work. (a) Landlord shall construct the Base Building Work, at its sole cost and expense, and the Tenant Finish Work, at the sole cost and expense of Tenant (subject to the contribution of the Tenant Finish Work Allowance by Landlord) in the manner and as provided in Schedule C attached hereto. Tenant acknowledges that Landlord has no obligation to perform any work to the Storage Shed and that Tenant is taking the Storage Shed in "as-is" condition. In connection with the performance of the Base Building Work and the Tenant Finish Work, Landlord agrees that it shall obtain warranties containing commercially reasonable terms. (b) In the event that Landlord fails to timely pay all or a portion of the Tenant Finish Work Allowance to contractor(s) performing the Tenant Finish Work and such failure interferes with the completion of Tenant Finish Work, Tenant shall have the right to give Landlord a notice describing Landlord's failure to timely fund the Tenant Finish Work Allowance. If Landlord shall fail to fund the Tenant Finish Work Allowance within five (5) days after receipt of such notice, then Tenant shall have the right to send Landlord a second notice after the expiration of said period which is substantially the same as the following statement (in at least 18 point bold type): "PURSUANT TO SECTION 2.5(b) OF THE LEASE, IF, WITHIN FIVE (5) DAYS AFTER LANDLORD'S RECEIPT OF THIS SECOND NOTICE, LANDLORD FAILS TO FUND THAT PORTION OF THE TENANT FINISH WORK NOW DUE AND OWING, THEN TENANT SHALL HAVE THE RIGHT, UPON NOTICE TO LANDLORD, TO PAY SUCH AMOUNTS TO THE APPLICABLE CONTRACTOR(S) AND OFFSET SUCH PAYMENTS AGAINST THE NEXT INSTALLMENTS OF BASIC RENT DUE AND PAYABLE BY TENANT." If Landlord fails to make such payments within said five(5) day period, then Tenant may exercise its right to make such payments and offset such payments together with interest thereon at a rate equal to the Default Rate (as hereinafter defined) against the next installments of Basic Rent, provided, that, prior to offsetting such payments, Tenant delivers to Landlord evidence of the amount paid by Tenant.
3.1 Basic Rent. Tenant shall pay the Basic Rent to Landlord in lawful money of the United States of America in equal monthly installments, in advance, on the Basic Rent Payment Dates, commencing on the Commencement Date. If the Commencement Date is not a Basic Rent Payment Date, the Basic Rent for the month in which the Commencement Date occurs will be prorated and Tenant shall pay such prorated amount to Landlord on the Commencement Date. 3.2 Additional Rent. In addition to the Basic Rent, Tenant shall pay and discharge when due, as additional rent ( "Additional Rent" ), all other amounts, liabilities and obligations which Tenant herein agrees to pay to Landlord, together with all interest, penalties and costs which may be added thereto pursuant to the terms of this Lease. 3.3 Late Charge. If any installment of Basic Rent or Additional Rent is not paid within ten (10) days after notice of such non-payment, Tenant shall pay to Landlord, on demand, a late charge equal to three percent (3%) of the amount unpaid. Notwithstanding anything to the contrary in the immediately preceding sentence, if Tenant fails to pay any Basic Rent or Additional Rent when due more than once in any calendar year, then Tenant shall be responsible for the late charge described in the immediately preceding sentence without the requirement of Landlord delivering written notice to Tenant of its default. The late charge is not intended as a penalty but is intended to compensate Landlord for the extra expense Landlord will incur to send out late notices and handle other matters 6
resulting from the late payment. In addition, any installment or installments of Basic Rent or Additional Rent that are not paid within ten (10) days after the date when due, will bear interest at the lesser of: (i) two percent (2%) over the interest charged by the holder of the mortgage encumbering the Property at such time (or three percent (3%) over the Prime Rate if the Property is not encumbered by a mortgage) (the "Default Rate" ), or (ii) the highest legal rate permitted by law. Any interest due as set forth in the preceding sentence shall be calculated from the due date of the delinquent payment until the date of payment, which interest will be deemed Additional Rent and shall be payable by Tenant upon demand by Landlord. 3.4 Prorating Rent. If any Lease Year consists of a period of less than twelve (12) full calendar months, payments of Basic Rent and Additional Rent, will be prorated on the basis of a thirty (30) day month or 360-day year, unless otherwise provided. 3.5 No Abatement or Set-off. Except as herein provided, Tenant shall pay to Landlord, at Landlord's address for notices hereunder, or such other place as Landlord may from time to time designate, without any offset, set-off, counterclaim, deduction, defense, abatement, suspension, deferment or diminution of any kind (i) the Basic Rent, without notice or demand, (ii) Additional Rent, and (iii) all other sums payable by Tenant hereunder. Except as otherwise expressly provided herein, this Lease will not terminate, nor will Tenant have any right to terminate or avoid this Lease or be entitled to the abatement of any Basic Rent, Additional Rent or other sums payable hereunder or any reduction thereof, nor will the obligations and liabilities of Tenant hereunder be in any way affected for any reason. The obligations of Tenant hereunder are separate and independent covenants and agreements. 3.6 Invoices. If Landlord issues monthly or other periodic rent billing statements to Tenant, the issuance or non-issuance of such statements will not affect Tenant's obligation to pay Basic Rent and the Additional Rent set forth in Sections 4.3 and 5.3 , all of which are due and payable on the Basic Rent Payment Dates. 4.1 Taxes. Tenant shall pay to Landlord the Taxes for any Lease Year during the Term; provided, however, that if any special assessments may be paid in installments, Landlord shall elect to pay same over the longest period allowed by law. 4.2 Landlord's Tax Statement. As soon as reasonably possible after the Commencement Date and thereafter as soon as reasonably practical after the end of each succeeding Lease Year, Landlord shall determine the Taxes for the Lease Year in question and shall submit such information to Tenant in a written statement ( "Landlord's Tax Statement" ). Landlord shall use reasonable efforts to issue Landlord's Tax Statement within one hundred twenty (120) days following the end of each Lease Year. Landlord's failure to render Landlord's Tax Statement for any Lease Year will not prejudice Landlord's right to thereafter render Landlord's Tax Statement with respect to such Lease Year or with respect to any other Lease Year, nor will the rendering of any Landlord's Tax Statement prejudice Landlord's right to thereafter render a revised Landlord's Tax Statement for the applicable Lease Year. 4.3 Monthly Tax Payment. Commencing on the first Basic Rent Payment Date following the submission of Landlord's Tax Statement and continuing thereafter on each successive Basic Rent Payment Date until Landlord renders the next Landlord's Tax Statement, Tenant shall pay to Landlord on account of its obligation under Section 4.1 , a sum (the "Monthly Tax Payment" ) equal to one-twelfth ( 1 / 12 ) of the Taxes for such Lease Year. Tenant's first Monthly Tax Payment after receipt of Landlord's Tax Statement shall be accompanied by the payment of an amount equal to the product of the number of full months, if any, within the Lease Year which have elapsed prior to such first Monthly Tax Payment, times the Monthly Tax Payment; minus any Additional Rent already paid by Tenant on 7
account of its obligation under Section 4.1 for such Lease Year. From time to time during any Lease Year, Landlord may revise the Landlord's Tax Statement and adjust Tenant's Monthly Tax Payment to reflect any actual adjustments in Taxes imposed by the Township of Parsippany, in which event Tenant shall pay, along with the next monthly payment due, the difference (if any) between the aggregate amount of Tenant's Monthly Tax Payments theretofore made on account of its obligation under Section 4.1 for such Lease Year, and the amount which would have been payable by Tenant during such Lease Year had Landlord billed Tenant for the revised Monthly Tax Payment for such prior elapsed months during such Lease Year. Thereafter, Tenant shall pay the revised monthly estimate in accordance with the provisions of this Section 4.3 . Notwithstanding anything to the contrary contained in this Section 4.3 , (i) from the Commencement Date until the day immediately preceding the Phase 2 Premises Commencement Date, Landlord and Tenant shall share equally the Taxes attributable to the Phase 2 Premises and the Phase 3 Premises, and (ii) from the Phase 2 Premises Commencement Date until the day immediately preceding the Phase 3 Premises Commencement Date, Landlord and Tenant shall share equally the Taxes attributable to the Phase 3 Premises. 4.4 Reconciliation. (a) Landlord shall use reasonable efforts to deliver to Tenant within one hundred twenty (120) days after the end of each Lease Year, Landlord's final determination of the Taxes for the Lease Year and shall submit such information to Tenant in a written statement (" Landlord's Final Tax Statement "). Each Landlord's Final Statement must reconcile the payments made by Tenant in the Lease Year in question with the actual Taxes imposed for the period covered thereby. Any balance due to Landlord shall be paid by Tenant within twenty (20) days after Tenant's receipt of Landlord's Final Tax Statement; any surplus due to Tenant shall be applied by Landlord against the next accruing monthly installment(s) of Additional Rent due under this Article 4. If the Term has expired or has been terminated, Tenant shall pay the balance due to Landlord or, alternatively, Landlord shall refund the surplus to Tenant, whichever the case may be, within twenty (20) days after Tenant's receipt of Landlord's Final Tax Statement; provided, however, that, if the Term terminated as a result of a default by Tenant, then Landlord will have the right to retain such surplus to the extent Tenant owes Landlord any Basic Rent or Additional Rent. (b) Refund of Taxes. During the Term, Tenant will have the right, but not the obligation, to seek to obtain a lowering of the assessed valuation of the Property, provided, that Tenant obtains Landlord's written approval of the attorney to be used by Tenant in undertaking such endeavor, which approval Landlord agrees will not be unreasonably withheld. Tenant agrees that it shall not agree upon any lowering of the assessed value of the Property which affects a period prior to the Commencement Date without Landlord's prior written consent, which Landlord agrees shall not be unreasonably withheld. If Tenant receives a refund of Taxes and a portion of such refund applies to a period prior to the commencement, or after the expiration, of the Term, then Tenant shall first deduct from such tax refund any reasonable expenses, including, but not limited to, attorneys fees and appraisal fees, incurred in obtaining such tax refund, and out of the remaining balance of such tax refund, Tenant shall pay to Landlord the portion of such refund applicable to the periods prior to the commencement, or after the expiration, of the Term. Notwithstanding anything to the contrary contained in this Lease, Tenant will have no right to contest or appeal the validity of any Taxes or the assessed valuation of the Property at any time there occurs an Event of Default. Landlord agrees that it shall not appeal the assessed value of the Property for any period during the Term without the prior approval of Tenant, which approval shall not be unreasonably withheld. 4.5 Payment Pending Appeal. While proceedings for the reduction in assessed valuation for any year are pending, the computation and payment of Taxes will be based upon the original assessments for such year. 8
4.6 Taxes on Tenant's Improvements. Tenant shall also pay to Landlord, upon demand, the amount of all increases in Taxes and/or all assessments or impositions made, levied or assessed against or imposed upon the Property or any part thereof which are attributable to additions or improvements in, on or about the Premises made by or on behalf of Tenant or which in whole or in part belong to Tenant. 4.7 Survival. In no event will any adjustment in Tenant's obligation to pay Additional Rent under this Article 4 result in a decrease in the Basic Rent. Tenant's obligation to pay Additional Rent, and Landlord's obligation to credit and/or refund to Tenant any amount, pursuant to the provisions of this Article 4, will survive the Termination Date. 4.8 Bills and Statements. The provisions of Section 29.3 apply to Landlord's Tax Statement. 4.9 Rent Tax: If an excise, transaction, sales, or privilege tax or other tax or imposition (other than Federal, state or local income, transfer taxes or estate taxes) is levied or assessed against Landlord or the Property on account of or measured by, in whole or in part, the Basic Rent and/or Additional Rent expressly reserved hereunder as a substitute for or in addition to, in whole or in part, Taxes or if any assessments and/or taxes are levied or assessed against Landlord or the Property on account of or as a result of the operation and/or existence of Tenant's business, then Tenant shall pay to Landlord upon demand: (i) the amount of such excise, transaction, sales or privilege tax or other tax or imposition lawfully assessed or imposed as a result of Landlord's interests in this Lease or of the Basic Rent and/or Additional Rent accruing under this Lease; and (ii) the amount of any assessments and/or taxes levied or assessed against Landlord or the Property on account of or as a result of the operation and/or existence of Tenant's business in the Property. 5.1 Operating Expenses. (a) The Landlord's CAM Expenses and the Insurance Expenses are collectively referred to as " Landlord's Operating Expenses " and shall be determined and paid in accordance with the provisions of this Article 5. (b) Tenant shall pay to Landlord, the amount of Landlord's CAM Expenses for any Lease Year during the Term. Notwithstanding anything to the contrary contained in this Section 5.1(b) , (i) from the Commencement Date until the day immediately preceding the Phase 2 Premises Commencement Date, Landlord and Tenant shall share equally the Landlord's CAM Expenses attributable to the Phase 2 Premises and the Phase 3 Premises, and (ii) from the Phase 2 Premises Commencement Date until the day immediately preceding the Phase 3 Premises Commencement Date, Landlord and Tenant shall share equally the Landlord's CAM Expenses attributable to the Phase 3 Premises. (c) Tenant shall pay to Landlord, the Insurance Expenses for any Lease Year during the Term. Notwithstanding anything to the contrary contained in this Section 5.1(b) , (i) from the Commencement Date through the day immediately preceding the first (1 st ) anniversary of the Commencement Date, Landlord and Tenant shall share equally the Insurance Expenses attributable to the Phase 2 Premises and the Phase 3 Premises, and (ii) from the first anniversary of the Commencement Date through the day immediately preceding the second anniversary of the Commencement Date, Landlord and Tenant shall share equally the Insurance Expenses attributable to the Phase 3 Premises. 5.2 Landlord's Expense Statement. As soon as reasonably possible after the Commencement Date and thereafter as soon as practical after each succeeding Lease Year during the Term, Landlord shall reasonably determine or estimate the amount of Landlord's Operating Expenses for the Lease Year in question ( "Landlord's Estimated Operating Expenses" ) and shall submit such information to Tenant in a written statement ( "Landlord's Expense Statement" ). Landlord shall use reasonable efforts to 9
issue Landlord's Expense Statement within one hundred twenty (120) days following the end of each Lease Year. Landlord's failure to render Landlord's Expense Statement for any Lease Year will not prejudice Landlord's right to thereafter render Landlord's Expense Statement with respect to such Lease Year or with respect to any other Lease Year, nor will the rendering of any Landlord's Expense Statement prejudice Landlord's right to thereafter render a revised Landlord's Expense Statement for the applicable Lease Year. Notwithstanding anything to the contrary contained herein, in no event shall Landlord's Estimated Operating Expenses for any calendar year exceed 105% of the amount of Landlord's Estimated Operating Expenses (or Landlord's Operating Expenses, if determined at such time) for the immediately preceding calendar year, unless Landlord has knowledge of an impending increase in the items comprising Landlord's Operating Expenses for such calendar year and delivers detailed evidence of such increase to Tenant. 5.3 Monthly Expense Payment. Commencing on the first Basic Rent Payment Date following the submission of Landlord's Expense Statement and continuing thereafter on each successive Basic Rent Payment Date until Landlord renders the next Landlord's Expense Statement, Tenant shall pay to Landlord on account of its obligation under Section 5.1 , a sum (the "Monthly Expense Payment" ) equal to one-twelfth ( 1 / 12 ) of Landlord's Estimated Operating Expenses for such Lease Year. Tenant's first Monthly Expense Payment after receipt of Landlord's Expense Statement shall be accompanied by the payment of an amount equal to the product of the number of full months, if any, within the Lease Year which have elapsed prior to such first Monthly Expense Payment, times the Monthly Expense Payment; minus any Additional Rent already paid by Tenant on account of its obligation under Section 5.1 for such Lease Year. From time to time during any Lease Year, Landlord may reasonably revise the Landlord's Expense Statement (based on Landlord's actual knowledge of an increase in expenses) and adjust Tenant's Monthly Expense Payment to reflect Landlord's revised estimate, in which event Tenant shall pay, along with the next monthly payment due, the difference (if any) between the aggregate amount of Tenant's Monthly Expense Payments theretofore made on account of its obligation under Section 5.1 for such Lease Year, and the amount which would have been payable by Tenant during such Lease Year had Landlord billed Tenant for the revised Monthly Expense Payment for such prior elapsed months during such Lease Year. Thereafter, Tenant shall pay the revised monthly estimate in accordance with the provisions of this Section 5.3 . 5.4 Reconciliation. Landlord shall use reasonable efforts to deliver to Tenant, within one hundred twenty (120) days after the end of each Lease Year (but in any event not later than one hundred eighty (180) days after the end of each Lease Year), Landlord's final determination of the amount of the Landlord's Operating Expenses for the Lease Year in question and shall submit such information to Tenant in a written statement (the "Annual Expense Reconciliation" ). Each Annual Expense Reconciliation must reconcile the aggregate of all Monthly Expense Payments made by Tenant in the Lease Year in question with the actual Landlord's Operating Expenses for the period covered thereby. Any balance due to Landlord shall be paid by Tenant within twenty (20) days after Tenant's receipt of the Annual Expense Reconciliation; any surplus due to Tenant shall be applied by Landlord against the next accruing monthly installment(s) of Additional Rent due under this Article 5. If the Term has expired or has been terminated, Tenant shall pay the balance due to Landlord or, alternatively, Landlord shall refund the surplus to Tenant, whichever the case may be, within twenty (20) days after Tenant's receipt of the Annual Expense Reconciliation; provided, however, that if the Term terminated as a result of a default by Tenant, then Landlord will have the right to retain such surplus to the extent Tenant owes Landlord any Basic Rent or Additional Rent. 5.5 Audit. For ninety (90) days following Landlord's delivery to Tenant of Annual Expense Reconciliation, Tenant will have the right, during normal business hours and upon no less than five (5) days prior written notice to Landlord, to examine Landlord's books and records for the purpose of confirming the Annual Expense Reconciliation. Tenant will be deemed to have accepted the Annual Expense Reconciliation unless, within fifteen (15) days after Tenant's examination of Landlord's books 10
and records, Tenant delivers an objection notice to Landlord specifying in detail why Tenant believes such the Annual Expense Reconciliation is incorrect. Notwithstanding anything to the contrary contained in this Section 5.5 , Tenant will not be permitted to examine Landlord's books and records or to dispute any Annual Expense Reconciliation unless (i) Tenant has paid to Landlord all amounts due as shown on such Annual Expense Reconciliation, and (ii) Tenant has signed a confidentiality agreement acceptable to Landlord. Tenant shall not engage the services of any legal counsel or other professional consultant who charges for its services on a so-called contingency fee basis for the purpose of reviewing Landlord's books and records. 5.6 Survival. In no event will any adjustment in Tenant's obligation to pay Additional Rent under this Article 5 result in a decrease in Basic Rent. Tenant's obligation to pay Additional Rent, and Landlord's obligation to credit and/or refund to Tenant any amount, pursuant to this Article 5 will survive the Termination Date. (a) Bills and Statements. The provisions of Section 29.3 apply to Landlord's Expense Statement. 6.1 Cost of Electricity. From and after the Commencement Date, Tenant shall be responsible for all costs of electricity provided to the Property, which shall be measured by direct meters installed or to be installed at the Property, at Landlord's expense. Tenant shall be responsible for payment of all fees, charges and costs directly to the utility company providing the electricity to the Property, such charges to include, without limitation, usage charges, installation charges, meter reading charges and demand factors. 6.2 Tenant Not To Exceed Capacity. Tenant's use of electric energy at the Property shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Premises. 6.3 Utility Deregulation. Tenant will have the right to choose the service providers that deliver electricity to the Property. Landlord shall cooperate with Tenant and such service providers, including granting reasonable access to the electric lines, feeders, risers, wiring, and any other machinery within the Premises, which shall be installed at Tenant's sole cost and expense. 6.4 Landlord Not Liable. (a) Landlord will not be responsible for any loss, damage or expenses, and Tenant will not be entitled to any rent abatement, diminution, setoff, or any other relief from its obligations hereunder, on account of any change in the quantity or character of the electric service or any cessation or interruption of the supply of electricity to the Property. Notwithstanding anything to the contrary contained in this Lease, if there is an interruption in the electric service provided to the Premises, and if Tenant is unable to use all or a portion of the Premises for more than four (4) consecutive business days solely as a result of such interruption, then the Basic Rent shall be proportionately abated during the period from the fifth (5 th ) consecutive business day to the earlier to occur of (i) the date on which such interruption ceases, or (ii) the date on which Tenant resumes using all or any portion of the Premises for the conduct of business. Notwithstanding the provisions of the immediately preceding sentence, Tenant agrees that the abatement of Basic Rent shall be limited to the amount Landlord actually collects under the rental loss endorsement to its property insurance. Landlord covenants to make and prosecute its claim for rental loss insurance as expeditiously as reasonably possible. (b) Electricity in Phase 2 Premises and Phase 3 Premises. From the Commencement Date until the day immediately preceding the Phase 2 Premises Commencement Date, Landlord and Tenant shall share equally the cost of electricity provided to the Phase 2 Premises and the Phase 3 Premises. From the Phase 2 Premises Commencement Date until the day immediately preceding the Phase 3 Premises 11
Commencement Date, Landlord and Tenant shall share equally the cost of electricity provided to the Phase 3 Premises. The electricity supplied to the Phase 2 Premises and the Phase 3 Premises shall be determined by Landlord based on the meters installed in the Building.
7.1 Tenant's Maintenance. (a) Tenant shall, at its sole cost and expense, keep the Property in good order and condition (except for ordinary wear and tear) and, except as provided in Section 7.2 , shall make all non-structural repairs, alterations, renewals and replacements and shall take such other action as may be necessary or appropriate to keep and maintain the Property in good order and condition, including, but not limited to, repairs (whether or not capital in nature) to and maintenance of all mechanical, electrical, plumbing, HVAC Systems, elevator systems and equipment, parking areas, roadways, curbs, sidewalks, medians, planters (including repairs and resurfacing thereof), utility supply systems, drainage and sanitary sewerage systems, water supply lines, wells, emergency generators, fire sprinkler and fire suppression systems, security and alarm systems and services, identification signs, public address systems, doors, ceilings and floors of the Building, landscaping (including replacement of trees, shrubs, and other plantings), the replacement of any broken or cracked windows in the Premises and any and all repairs and replacements to the Storage Shed. Except as expressly provided in Section 7.2 hereof, Landlord will not be obligated to maintain, alter or repair the Property. All repairs made by Tenant must be at least equal in quality to the original work. Landlord grants Tenant the right to exercise any rights Landlord may have under warranties granted to Landlord in connection with the Base Building Work and the Tenant Finish Work with respect to any repair obligations of Tenant under this Section 7.1 . Notwithstanding anything to the contrary contained in this Section 7.1 , in no event shall Tenant be required to perform the obligations of Tenant pursuant to this Section 7.1 to (i) the Phase 2 Premises until the Phase 2 Premises Commencement Date, and (ii) the Phase 3 Premises until the Phase 3 Premises Commencement Date. (b) Notwithstanding anything to the contrary contained in Section 7.1(a), if, (i) Tenant replaces any existing component of the Property (other than a replacement of any of the Re-Used Items or a Tenant Capital Improvement defined in Section 10.1 ), and (ii) such expenditure would be classified as a "capital expenditure" under generally accepted accounting principles (" GAAP "), (a " Qualified Capital Improvement "), then such Qualified Capital Improvement shall be performed by Tenant (except as otherwise provided in this Section 7.1(b)) and paid for by Landlord, provided, however that Tenant shall reimburse Landlord on a monthly basis for the Amortized Cost of such Qualified Capital Improvement as provided in this Section 7.1(b) . If at any time Tenant believes that a Qualified Capital Improvement is required to be made to the Property, Tenant shall provide Landlord with (A) a detailed written notice describing the Qualified Capital Improvement, (B) detailed plans and specifications for the Qualified Capital Improvement, (C) the manner in which the Qualifying Capital Improvement is to be performed, (D) Tenant's estimated cost of performing the Qualified Capital Improvement, and (E) Tenant's determination of the useful life of such Qualified Capital Improvement. Within thirty (30) days after receipt of such notice, Landlord shall notify Tenant whether or not it approves making such Qualified Capital Improvement and the plans and specification for such Qualified Capital Improvement, which approval shall not be unreasonably withheld or delayed and, if disapproved, Landlord shall state its reasons for disapproval with reasonable specificity. If Landlord does not reply within such thirty (30) day period, Landlord shall be deemed to have approved making, and the plans and specifications for, the Qualified Capital Improvement. If Landlord timely objects to making a Qualified Capital Improvement or to the plans and specifications for such Improvement, Landlord and Tenant shall promptly meet and use good faith efforts to resolve such dispute. If such dispute is not resolved within ten (10) days after Landlord's notice of disapproval, the matter shall be decided by arbitration as provided in this Lease. If Landlord agrees that such Qualified Capital 12
Improvement should be made, Landlord may elect to make such Qualified Capital Improvement pursuant to the plans and specifications submitted by Tenant and Tenant shall reimburse Landlord on a monthly basis for the Amortized Cost of such Qualifying Capital Improvement as provided in this Section 7.1(b) . If Landlord agrees that such Qualified Capital Improvement should be made, approves of the plans and specifications and determines not to make the Qualified Capital Improvement, then, provided there shall exist no Event of Default by Tenant, Landlord shall pay to Tenant the cost of the Qualified Capital Improvement in the manner set forth in this Section 7.1(b) . For any Qualified Capital Improvement to be made by Tenant, Landlord shall pay Tenant monthly progress payments for the Qualified Capital Improvements equal to the total amount of invoices for the Qualified Capital Improvements which are covered by the applicable monthly requisition by Tenant's architect, less a retainage equal to the lesser of (i) ten percent (10%), or (ii) the retainage set forth in the contract between Tenant and the general contractor for the Qualified Capital Improvements (but in any event such retainage shall not be less than five percent (5%)). Landlord shall make such progress payments within thirty (30) days from and after receipt of a complete AIA Form No. G702 therefor (but not more frequently than one time per month), which requisition shall set forth the names of each contractor, subcontractor, materialman, architect and engineer to whom payment is due and the amount due to each of them, and shall include (i) a certificate from Tenant's architect which certifies that the portion of the Qualified Capital Improvement described in such requisition has been substantially completed in accordance with the approved plans for the Qualified Capital Improvement and that all materials for which payment is requested in such requisition have actually been delivered to the Premises, and (ii) with the exception of the first requisition, copies of waivers of lien, in form and substance reasonably satisfactory to Landlord, from all contractors, subcontractors, materialmen, architects and engineers covering all work, materials and services which were the subject of all previous requisitions. Notwithstanding the foregoing provisions, if at any time Tenant reasonably believes that a Qualified Capital Improvement is required to be made to the Property, and Tenant's use and enjoyment of all or any part of the Premises is being materially adversely affected because such Qualified Capital Improvement has not been made, or there is a threat of injury to persons or property because such Qualified Capital Improvement has not been made, (collectively, an "Emergency Qualified Capital Improvement"), Tenant will notify Landlord by any means possible and seek Landlord's consent to make, or to have Landlord immediately make, such Emergency Qualified Capital Improvement, and shall have right, before obtaining Landlord's consent, to make such Emergency Qualified Capital Improvement. If Tenant proceeds to undertake the Emergency Qualified Capital Improvement before obtaining Landlord's consent, the parties will meet immediately to resolve any disputes regarding the need, or the plans and specifications, for the Emergency Qualified Capital Improvement, and will submit to arbitration as provided in this Lease any dispute remaining unresolved within thirty (30) days after Tenant has completed an Emergency Qualified Capital Improvement. Landlord will pay for an Emergency Qualified Capital Improvement in the same manner as Landlord pays for a Qualified Capital Improvement, except Tenant will bear the risk, at its sole cost and expense, of any remedial measures required because an Emergency Qualified Capital Improvement was not required, or was improperly completed. Tenant shall reimburse Landlord for the Amortized Cost (as hereinafter defined) of the Qualified Capital Improvement in monthly installments during the Term, as same may be extended. For purposes hereof, the term " Amortized Cost of the Qualified Capital Improvements " shall mean the actual cost incurred by Landlord or Tenant, as the case may be, in making the Qualified Capital Improvement, amortized over the useful life of the Qualified Capital Improvement as determined in the reasonable judgment of Landlord, together with interest thereon equal to the Prime Rate plus one and three-quarters percent (1.75%). Tenant's reimbursement payments to Landlord for the Amortized Cost of the Qualified Capital Improvement shall commence on the first Basic Rent Payment Date after the completion of the Qualified Capital Improvement. 13
7.2 Landlord's Repairs. Landlord shall make all repairs and replacements to the foundation, the bearing walls, the structural columns and beams, the exterior walls and the roof of the Building (other than the Storage Shed) and shall replace the Re-Used Items; provided, however, that if such repairs and replacements (including repairs and replacements with respect to the Property) are necessitated by the intentional acts or negligence of Tenant or Tenant's Visitors, then Tenant shall reimburse Landlord, upon demand, for the reasonable cost thereof. The costs and expenses incurred by Landlord in connection with such repairs and replacements will be borne by Landlord, at its sole cost and expense, no portion of which shall be charges to Tenant directly or indirectly. In no event shall Landlord have the obligation to make any repairs or alterations to all mechanical, electrical, plumbing or HVAC Systems, except any portion constituting Re-Used Items, or to the Storage Shed. 7.3 Requirements for Tenant's Maintenance. All maintenance and repair, and each addition, improvement or alteration, performed by on behalf of Tenant must be (a) completed expeditiously in a good and workmanlike manner, and in compliance with all applicable Legal Requirements and Insurance Requirements, (b) completed free and clear of all Liens, and (c) performed in a manner and by contractors approved by Landlord (which approval shall not be unreasonably withheld or delayed) to the extent such work involves any work to any electrical, mechanical, plumbing or other system of the Building, any work to the outside of the Building, any work to the roof of the Building or any work to any structural element of the Building. 7.4 Permitted Alterations. (a) Provided that there is not a current Event of Default, Tenant may, upon prior written notice to Landlord and submission to Landlord of plans and specifications therefor, make interior, non-structural additions, improvements or alterations to the Premises having an aggregate cost not to exceed $450,000.00 (which amount shall be increased (and in no event decreased) each Lease Year by a percentage equal to the percentage increase in the Consumer Price Index during the immediately preceding Lease Year) in any consecutive twelve (12) month period, so long as the same do not (i) materially adversely affect, alter, interfere with or disrupt any of the electrical, mechanical, plumbing or other system of the Building, (iii) affect the outside appearance of the Building, (iv) affect the roof of the Building, or (v) affect any structural element of the Building. (b) Tenant shall not make any addition, improvement or alteration to the Land without the prior written consent of Landlord, which consent shall not be unreasonably withheld. In addition, Tenant shall not make any addition, improvement or alteration of the Premises (i) having an aggregate cost in excess of $450,000.00 (which amount shall be increased (and in no event decreased) each Lease Year by a percentage equal to the percentage increase in the Consumer Price Index during the immediately preceding Lease Year) in any consecutive twelve (12) month period, or (ii) affecting, altering, interfering with or disrupting any electrical, mechanical, plumbing or other system of the Building, or (iii) affecting the outside appearance of the Building, the roof of the Building, the ingress to or the egress from the Premises and/or any structural element of the Building (such work, "Major Work" ), unless Tenant submits to Landlord detailed plans and specifications therefor and Landlord approves such plans and specifications in writing (which approval Landlord agrees shall not be unreasonably withheld). Tenant shall obtain Landlord's consent for any contractor that is to perform any Major Work, which consent shall not be unreasonably withheld or delayed. 7.5 Surrender and/or Removal of Alterations. (a) Each addition, improvement and alteration to the Premises, including, without limitation, the Tenant Work (each a "Tenant Improvement" ) will, upon expiration of the Term, become the property of Landlord and be deemed to be a part of the Premises unless Landlord, by written notice to Tenant at the time Landlord approves the plans with respect to such Tenant Improvement, elects to relinquish Landlord's right to such Tenant Improvement. If Landlord elects to relinquish its right to any Tenant Improvement, Tenant shall, prior to the Termination Date, remove such Tenant Improvement and promptly repair any damage to the Premises caused by the installation or removal of such Tenant 14
Improvement and restore the Premises to the condition existing prior to the installation of such Tenant Improvement. Notwithstanding anything to the contrary contained in this Section 7.5(a), in no event shall Tenant be required to remove (i) any of Tenant's Finish Work or Tenant's Additional Work, other than those items which are deemed to be "Specialty Items". For purposes hereof, "Specialty Items" shall mean specialty improvements not ordinarily found in office premises or above standard improvements (i.e., internal staircases, raised flooring, vaults, labs, built-in bookcases, etc.) Landlord agrees that wall coverings and wires installed by Tenant are not Specialty Items. (b) Removal of Improvements. Tenant may install in, and remove from, the Premises any trade equipment, machinery and personal property belonging to Tenant (such trade equipment, machinery and personal property will not become the property of Landlord), provided that (i) Tenant shall repair all damage caused by such installation or removal; (ii) Tenant shall not install any equipment, machinery or other items on the roof of the Building or make any openings in the roof; and (iii) Tenant shall not install any equipment, machinery or other items on the floor, walls or ceiling of the Premises that exceed the load bearing capacity or compromise the structural integrity of the floor, walls or ceiling of the Premises. 8.1 Permitted Use. Tenant shall not use or permit the use of the Property for any purpose other than the Permitted Use specified in the Basic Lease Provisions. 8.2 Prohibited Uses. Tenant shall not use or permit the use of the Property in any manner or for any purpose or do, bring or keep anything, or permit anything to be done, brought or kept in the Premises that (a) violates any Legal Requirement or Insurance Requirement, or (b) could overload the electrical or mechanical systems of the Building or exceed the design criteria or affect the structural integrity or appearance of the Building. 8.3 Parking. (a) Tenant will have the right, during the term of this Lease, to park up to the number of cars permitted by Legal Requirements in the parking area of the Property. 15
(b) Landlord will have no liability for any damage to vehicles on the Property or for any loss of property from within such vehicles, or for any injury suffered by Tenant's employees or Tenant's Visitors, unless such damage to a vehicle owned by a party other than Tenant was caused by the acts or omissions of Landlord or its agents. 8.4 Permits, Licenses and Authorizations. Tenant shall obtain, at its sole cost and expense, all permits, licenses or authorizations of any nature required in connection with the operation of Tenant's business at the Premises. Notwithstanding anything to the contrary contained in this Section 8.4 , Tenant shall not be required to obtain any permits, licenses or authorizations which is Landlord's responsibility in connection with the construction of the Base Building Work or the Tenant Finish Work.
9.1 Landlord's Services. Tenant acknowledges that Landlord shall have no obligation to perform or supply any services to Tenant, other than Landlord's maintenance obligations set forth in Section 7.2 hereof. 9.2 Management of Building. Tenant, at its sole cost and expense, shall maintain and operate the Property and obtain all services typically provided by a landlord of a "Class A" office building in northern New Jersey, which, in addition to the obligations of Tenant pursuant to Section 7.1 , shall include, but not limited to, sweeping, cleaning, snow removal and line painting of all parking areas and roadways; landscaping services (including replacement of trees, shrubs, and other plantings), janitorial services and window cleaning, supplies, removal of garbage and other refuse, painting and providing on and off site traffic direction and parking control. In connection with performing its obligations under this Section 9.2 , Tenant may, at its election, hire, at its sole cost and expense, a third party management company to manage the Property. Tenant shall obtain Landlord's consent prior to hiring such manager, which consent Landlord agrees shall not be unreasonably withheld or delayed. In the event that Landlord notifies Tenant that it is not satisfied with the manner in which the manager is maintaining the Property, Landlord and Tenant shall meet with the Tenant's property manager to discuss Landlord's issues within ten (10) days of the delivery of such notice to Tenant of Landlord's dissatisfaction. If at anytime after such meeting Landlord notifies Tenant that it is still not satisfied with the manner in which the Property is being maintained, then Tenant shall either retain a new third party, subject to the prior consent of Landlord, whose consent shall not be unreasonably withheld, or request that such dispute be resolved by arbitration in accordance with the provisions of Section 29.7 . 9.3 Office Cleaning. Tenant shall hire, at its sole cost and expense, a third party cleaning company to provide janitorial services to the Property in a manner which is consistent with other "Class A" buildings located in northern New Jersey. Tenant shall obtain Landlord's consent prior to hiring such janitorial contractor, which consent Landlord agrees shall not be unreasonably withheld or delayed. In the event that Landlord notifies Tenant that it is not satisfied with the manner in which the janitorial contractor is performing its services, Landlord and Tenant shall meet with the contractor to discuss Landlord's issues within ten (10) days of the delivery of such notice to Tenant of Landlord's dissatisfaction. If at anytime after such meeting Landlord notifies Tenant that it is still not satisfied with the janitorial services, then Tenant shall either retain a new janitorial contractor, subject to the prior consent of Landlord, whose consent shall not be unreasonably withheld, or request that such dispute be resolved by arbitration in accordance with the provisions of Section 29.7 . 9.4 Security. Tenant shall, in its sole and absolute discretion, be solely responsible for providing and installing any security systems within the Building and on the Property. Tenant shall comply with the provisions of Section 7.4 in connection with the installation of such systems. 16
10.1 Compliance. Tenant shall (i) comply with all Legal Requirements and Insurance Requirements applicable to the Property and Tenant's use thereof, and (ii) maintain and comply with all permits, licenses and other authorizations required by any governmental authority for Tenant's use of the Premises and for the proper operation, maintenance and repair of the Premises. Landlord shall, at no cost to Landlord, join in any application for any permit or authorization with respect to Legal Requirements if such joinder is necessary. If any structural repairs or replacements are required in order for Tenant to comply with its obligations under this Section 10.1 , Landlord, at its sole cost and expense, shall perform such repairs or replacements. If any capital improvement other than those described in the immediately preceding sentence is required under this Section 10.1 , then such capital improvement shall be deemed to be a Qualifying Capital Improvement and shall be made in accordance with the provisions of Section 7.1(b) , provided, that, if such capital improvement is required to be made as a result of Tenant's particular use of the Premises (as opposed to the use of the Premises for general office use) (a " Tenant Capital Improvement "), then Tenant shall perform such Tenant Capital Improvements at its sole cost and expense and the provisions of Section 7.1(b) shall not apply. 10.2 Increases in Insurance Premiums. Tenant shall not do, or permit to be done, anything in or to the Property, or keep anything in the Premises that increases the cost of the any insurance maintained by Landlord. Tenant shall, upon demand, pay to Landlord any such increase in insurance premiums and any other costs incurred by Landlord as result of the negligence, carelessness or willful action of Tenant or Tenant's Visitors.
11.1 Environmental Laws. Tenant shall comply, at its sole cost and expense, with all Environmental Laws in connection with Tenant's use and occupancy of the Premises; provided, however, that the provisions of this Article 11 will not obligate Tenant to comply with the Environmental Laws if such compliance is required solely as a result of the occurrence of a spill, discharge or other event before the Commencement Date, or if such spill, discharge or other event was not caused by the act, negligence or omission of Tenant or Tenant's Visitors. 11.2 Copies of Environmental Documents. Landlord and Tenant shall deliver promptly to the other a true and complete copy of any correspondence, notice, report, sampling, test, finding, declaration, submission, order, complaint, citation or any other instrument, document, agreement and/or information submitted to, or received from, any governmental entity, department or agency in connection with any Environmental Law relating to or affecting the Premises. 11.3 Hazardous Substances and Hazardous Wastes. Tenant shall not cause or permit any "hazardous substance" or "hazardous waste" (as such terms are defined in the ISRA) to be kept in the Premises, except for de minimus quantities of cleaning supplies, medicines and other materials used by Tenant in the ordinary course of its business and in accordance with all Legal Requirements. Tenant shall not engage in, or permit any other person or entity to engage in, any activity, operation or business in the Premises that involves the generation, manufacture, refining, transportation, treatment, storage, handling or disposal of hazardous substances or hazardous wastes. 11.4 Discharge. (a) If a spill or discharge of a hazardous substance or a hazardous waste occurs on or from the Premises, Tenant shall give Landlord immediate oral and written notice of such spill and/or discharge, setting forth in reasonable detail all relevant facts known to Tenant without inquiry or investigation, including, without limitation, a copy of (i) any notice of a violation, or a potential or alleged violation, 17
of any Environmental Law received by Tenant or any subtenant or other occupant of the Premises; (ii) any inquiry, investigation, enforcement, cleanup, removal, or other action instituted or threatened against Tenant or any subtenant or other occupant of the Premises; (iii) any claim instituted or threatened against Tenant or any subtenant or other occupant of the Premises; and (iv) any notice of the restriction, suspension, or loss of any environmental operating permit by Tenant or any subtenant or other occupant of the Premises. If a spill or discharge is caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall pay all costs and expenses relating to compliance with applicable Environmental Laws (including, without limitation, the costs and expenses of site investigations and the removal and remediation of such hazardous substance or hazardous waste). Landlord agrees to remediate any spill or discharge that Tenant is not responsible to remediate pursuant to this Section 11.4 to the extent required by Legal Requirements, at Landlord's sole cost and expense. (b) Without relieving Tenant of its obligations under this Lease and without waiving any default by Tenant under this Lease, Landlord will have the right, but not the obligation, to take such action as Landlord deems necessary or advisable to cleanup, remove, resolve or minimize the impact of or otherwise deal with any spill or discharge of any hazardous substance or hazardous waste on or from the Premises. If a spill or discharge is caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall, on demand, pay to Landlord all costs and expenses incurred by Landlord in connection with any action taken in connection therewith by Landlord. 11.5 ISRA. (a) If Tenant's operations at the Premises now or hereafter constitute an "Industrial Establishment" (as defined under ISRA), then Tenant agrees to comply, at its sole cost and expense, with all requirements of ISRA in connection with (i) the occurrence of the Termination Date, (ii) any termination of this Lease prior to the Termination Date, (iii) any closure, transfer or consolidation of Tenant's operations at the Premises, (iv) any change in the ownership or control of Tenant, (iv) any permitted assignment of this Lease or permitted sublease of all or part of the Premises or (v) any other action by Tenant which triggers ISRA or any other Environmental Law. (b) Tenant further agrees to implement and execute all of the provisions of this Section in a timely manner so as to coincide with the termination of this Lease or to coincide with the vacating of the Premises by Tenant at any time during the term of this Lease. In connection with subsection (a) above, if, with respect to ISRA, Tenant fails to obtain a no further action and covenant not to sue letter from the New Jersey Department of Environmental Protection and as a result thereof, Landlord is unable to lease the Premises to another Tenant, Tenant will be deemed to be a holdover tenant and shall pay rent at the rate set forth in Section 24.3 and shall continue to diligently pursue compliance with ISRA and/or such other Environmental Law. Upon Tenant's full compliance with the provisions of ISRA or of such other Environmental Law, Tenant shall deliver possession of the Premises to Landlord in accordance with the provisions of this Lease and such holdover rent shall be adjusted as of said date. 11.6 Landlord's ISRA Compliance. (a) In connection with (i) any sale or other disposition of all or part of Landlord's interest in the Premises, (ii) any change in the ownership or control of Landlord, (iii) any condemnation, (iv) any foreclosure or (v) any other action by Landlord which triggers ISRA or any other Environmental Law, Landlord shall comply, at its sole cost and expense, with all requirements of ISRA and such other applicable Environmental Law; provided, however, that if any site investigation is required as a result of a spill or discharge of a hazardous substance or hazardous waste caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall pay all costs associated with such site investigation and, if any removal and remediation is required as a result of a spill or discharge of a hazardous substance or hazardous waste caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall, upon demand by Landlord, pay all costs associated with such removal and remediation. 18
(b) If, in order to comply with any Environmental Law and in connection with a sale or refinancing of the Property, Landlord requires any affidavits, certifications or other information from Tenant, Tenant shall, at no charge to Landlord, deliver the same to Landlord within five (5) business days of Landlord's request therefor. 11.7 Notices. If Landlord has given to Tenant the name and address of any holder of an Underlying Encumbrance, Tenant agrees to send to said holder a photocopy of those items given to Landlord pursuant to the provisions of Section 11.2 . 11.8 Survival. Landlord's and Tenant's obligations under this Article 11 shall survive the expiration or earlier termination of this Lease. 11.9 North American Industry Classification System. Tenant hereby represents and warrants to Landlord that Tenant's operations at the Premises will at all times have the following North American Industry Classification System ( "NAICS" ) code: 551114. Within thirty (30) days after receipt of notice thereof, Tenant shall discharge any Lien on the Premises, the Basic Rent, Additional Rent or any other sums payable under this Lease caused by or arising out of Tenant's acts or Tenant's failure to perform any obligation under this Lease. Tenant may, by appropriate proceedings, contest the amount, validity or application of any Legal Requirement which Tenant is obligated to comply with or any Lien which Tenant is obligated to discharge, provided that (a) such proceedings suspend the collection thereof, (b) no part of the Premises, Basic Rent or Additional Rent or any other sum payable hereunder is subject to loss, sale or forfeiture during such proceedings, (c) Landlord is not subject to any civil or criminal liability for failure to pay or perform, as the case may be, (d) Tenant furnishes such security as may be required in the proceedings or, if no security is required in such proceeding, as reasonably requested by Landlord, (e) such proceedings do not affect the payment of Basic Rent, Additional Rent or any other sum payable to Landlord hereunder, and (f) Tenant notifies Landlord of such proceedings not less than ten (10) days prior to the commencement thereof and describes such proceedings in reasonable detail. Tenant shall conduct all such contests in good faith and with due diligence and shall, promptly after the determination of such contest, pay all amounts required to be paid by Tenant.
14.1 Insurance. (a) Tenant shall obtain, and shall keep in full force and effect, the following insurance, with insurers that are authorized to do business in the State of New Jersey and are rated at least A (Class X) in Best's Key Rating Guide:
19
(b) The policies of insurance required to be maintained by Tenant pursuant to this Section 14.1 must be reasonably satisfactory to Landlord and must be written as primary policy coverage and not contributing with, or in excess of, any coverage carried by Landlord. All policies must name as the insured parties (except for workers' compensation insurance, business interruption insurance and insurance covering Tenant's fixtures, furniture and equipment) Landlord, Lender, any parties named by Landlord as having an interest in the Premises, and Tenant, as their respective interests may appear. All such policies (except for worker's compensation insurance and business interruption insurance) must (i) provide that thirty (30) days' prior written notice of suspension, cancellation, termination, modification, non-renewal or lapse or material change of coverage will be given to Landlord and that such insurance will not be invalidated by (x) any act or neglect of Landlord or Tenant or any owner of the Property, (y) any change in the title or ownership of the Property, or (z) occupation of the Premises for purposes more hazardous than are permitted by such policy, and (ii) not contain a provision relieving the insurer thereunder of liability for any loss by reason of the existence of other policies of insurance covering the Property against the peril involved, whether collectible or not. All policies must include a contractual liability endorsement evidencing coverage of Tenant's obligation to indemnify Landlord pursuant to Section 14.3 . Tenant shall not self-insure for any insurance coverage required to be carried by Tenant under this Lease. The deductible for any insurance policy required hereunder must not exceed $10,000 (which amount shall be increased (and in no event decreased) each Lease Year by a percentage equal to the percentage increase in the Consumer Price Index during the immediately preceding Lease Year). Tenant will have the right to provide the insurance coverage required under this Lease through a blanket policy, provided such blanket policy expressly affords coverage to the Property and to Landlord as required by this Lease. (c) Prior to the Commencement Date, Tenant shall deliver to Landlord original or duplicate policies. Within ten (10) days prior to the expiration of any such insurance, Tenant shall deliver to Landlord original or duplicate policies. Tenant's certificates of insurance must be on: (i) Acord Form 27 with respect to property insurance, and (ii) Acord Form 25-S with respect to liability insurance or, in each case, on successor forms approved by Landlord. 20
(d) Tenant shall not obtain or carry separate insurance concurrent in form or contributing in the event of loss with that required by Section 14.1 unless Landlord and Tenant are named as insureds therein. (e) If Tenant fails to maintain the insurance required by this Lease, Landlord may, but will not be obligated to, obtain, and pay the premiums for, such insurance. Upon demand, Tenant shall pay to Landlord all amounts paid by Landlord pursuant to this Section 14.1(e) . (f) Landlord shall maintain with respect to the Building at all times during the term of this Lease standard all risk property insurance, covering the Building and the systems within the Building in amounts equal to the full replacement cost of the Building (excluding Tenant's Finish Work and Tenant's Additional Work, which shall be the responsibility of Tenant). 14.2 Waivers. (a) Notwithstanding any provision in this Lease to the contrary, Landlord hereby waives and releases Tenant, and Tenant hereby waives and releases Landlord, from any and all liabilities, claims and losses for which the released party is or may be held liable to the extent of any insurance proceeds received by the injured party or the proceeds such party would have received had it carried the insurance required of such party pursuant to the terms of this Lease.. (b) Each party hereto agrees to have included in its property insurance policies a waiver of the insurer's right of subrogation against the other party. If such a waiver is not enforceable or is unattainable, then such insurance policy must contain either (i) an express agreement that such policy will not be invalidated if Landlord or Tenant, as the case may be, waives its right of recovery against the other party, or (ii) any other form for the release of Landlord or Tenant, as the case may be. If such waiver, agreement or release is not obtainable from a party's insurance company, then such party shall notify the other party of such fact and shall use its best efforts to obtain such waiver, agreement or release from another insurance company satisfying the requirements of this Lease. 14.3 Indemnification. (a) Subject to the provisions of Section 14.2(a) and 14.4, Tenant hereby indemnifies, and shall pay, protect and hold Landlord harmless from and against all liabilities, losses, claims, demands, costs, expenses (including attorneys' fees and expenses) and judgments of any nature, (except to the extent Landlord is compensated by insurance maintained by Landlord or Tenant hereunder and except for such of the foregoing as arise from the negligent or willful acts or omissions of Landlord, its agents, servants or employees), arising, or alleged to arise, from or in connection with (i) any injury to, or the death of, any person or loss or damage to property on or about the Premises, (ii) any violation of any Legal Requirement or Insurance Requirement by Tenant or Tenant's Visitors, (iii) performance of any labor or services or the furnishing of any materials or other property in respect of the Premises by Tenant, (iv) Tenant's occupancy of the Premises, (including, but not limited to, statutory liability and liability under workers' compensation laws), or (v) any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease. Tenant shall, at its sole cost and expense, defend any action, suit or proceeding brought against Landlord by reason of any such occurrence with independent counsel selected by Tenant and reasonably acceptable to Landlord. The obligations of Tenant under this Section 14.3 will survive the expiration or earlier termination of this Lease. (b) Subject to the provisions of Section 14.2(a) and 14.4, Landlord hereby indemnifies, and shall pay, protect and hold Tenant harmless from and against all liabilities, losses, claims, demands, costs, expenses (including attorneys' fees and expenses) and judgments of any nature, (except to the extent Tenant is compensated by insurance maintained by Tenant and except for such of the foregoing as arise from the negligent or willful acts or omissions of Tenant or Tenant Visitors), arising, or alleged to arise, from or in connection with (i) any violation of any Legal Requirement or Insurance Requirement by Landlord or its agents, employees or contractors, (ii) performance of any labor or services or the 21
furnishing of any materials or other property in respect of the Property by Landlord, or (iii) any breach or default in the performance of any obligation on Landlord's part to be performed under the terms of this Lease. Landlord shall, at its sole cost and expense, defend any action, suit or proceeding brought against Tenant by reason of any such occurrence with independent counsel selected by Landlord. The obligations of Tenant under this Section 14.3 will survive the expiration or earlier termination of this Lease. 14.4 No Claims. Neither Landlord nor Tenant shall make any claim against the other for (a) any damage to, or loss of, any property of such party or any other person, or (b) business interruption, consequential, indirect or special damages. Landlord and Tenant each hereby waives all of claims against the other party with respect to the foregoing. The provisions of this Section 14.4 will survive the expiration or earlier termination of this Lease.
15.1 Estoppel Certificates. (a) Upon not less than five (5) days' prior notice by Landlord, Tenant shall execute and deliver to Landlord a statement certifying (i) the Commencement Date, the Phase 2 Premises Commencement Date and/or the Phase 3 Premises Commencement Date, (ii) the Termination Date, (iii) the dates of any amendments or modifications to this Lease, (iv) that this Lease was properly executed and is in full force and effect without amendment or modification, or, alternatively, that this Lease and all amendments and modifications have been properly executed and are in full force and effect, (v) the current annual Basic Rent, the current monthly installments of Basic Rent and the date on which Tenant's obligation to pay Basic Rent commenced, (vi) the current monthly installment of Additional Rent for Taxes and Landlord's Operating Expenses, (vii) the date to which Basic Rent and Additional Rent have been paid, (viii) the amount of the security deposit, if any, (ix) if applicable, that all work to be done to the Premises by Landlord has been completed in accordance with this Lease and has been accepted by Tenant, except as specifically provided in the estoppel certificate, (x) that no installment of Basic Rent or Additional Rent has been paid more than thirty (30) days in advance, (xi) that Tenant is not in arrears in the payment of any Basic Rent or Additional Rent, (xii) that, to the best of Tenant's knowledge, neither party to this Lease is in default in the keeping, observance or performance of any covenant, agreement, provision or condition contained in this Lease and no event has occurred which, with the giving of notice or the passage of time, or both, would result in a default by either party, except as specifically provided in the estoppel certificate, (xiii) that, to the best of Tenant's knowledge, Tenant has no existing defenses, offsets, liens, claims or credits against the Basic Rent or Additional Rent or against enforcement of this Lease by Landlord, (xiv) that Tenant has not been granted any options or rights of first refusal to extend the Term, to lease additional space, to terminate this Lease before the Termination Date or to purchase the Premises, except as specifically provided in this Lease, (xv) that Tenant has not received any notice of violation of any Legal Requirement or Insurance Requirement relating to the Building or the Premises, (xvi) that Tenant has not assigned this Lease or sublet all or any portion of the Premises, (xvii) that no "hazardous substances" or "hazardous wastes" have been generated, manufactured, refined, transported, treated, stored, handled, disposed or spilled on or about the Premises, and (xviii) such other matters as reasonably requested by Landlord. Tenant hereby acknowledges and agrees that such statement may be relied upon by any mortgagee, or any prospective purchaser, tenant, subtenant, mortgagee or assignee of any mortgage, of the Property or any part thereof. (b) Upon not less than five (5) days' prior notice by Tenant, Landlord shall execute and deliver to Tenant a statement certifying (i) the Commencement Date, the Phase 2 Premises Commencement Date and/or the Phase 3 Premises Commencement Date, (ii) the Termination Date, (iii) the dates of any amendments or modifications to this Lease, (iv) that this Lease was properly executed and is in full force and effect without amendment or modification, or, alternatively, that this Lease and all 22
amendments and modifications have been properly executed and are in full force and effect, (v) the current annual Basic Rent, the current monthly installments of Basic Rent and the date on which Tenant's obligation to pay Basic Rent commenced, (vi) the current monthly installment of Additional Rent for Taxes and Landlord's Operating Expenses, (vii) the date to which Basic Rent and Additional Rent have been paid, (viii) the amount of the security deposit, if any, and (viii) that, to the best of Landlord's knowledge, neither party to this Lease is in default in the keeping, observance or performance of any covenant, agreement, provision or condition contained in this Lease and no event has occurred which, with the giving of notice or the passage of time, or both, would result in a default by either party, except as specifically provided in the estoppel certificate. Tenant hereby acknowledges and agrees that Landlord shall only be required to deliver an estoppel certificate if requested by Tenant in connection with (A) a sale of Tenant's business, (B) a financing of Tenant's fixtures, furniture and equipment, (C) an assignment of the Lease, and/or (D) a sublet of all or a portion of the Premises. 15.2 Tenant's Failure to Execute Estoppel Certificate. If Tenant fails or otherwise refuses to execute an estoppel certificate in accordance with this Article 15 , then Landlord shall have the right to deliver to Tenant a notice in accordance with the terms of this Lease stating that Tenant failed to timely deliver the estoppel certificate pursuant to this Article 15 , together with a fully completed estoppel certificate. If Tenant fails to deliver an estoppel certificate to Landlord within five (5) days after the delivery of the second notice, then Tenant shall be deemed to be estopped from raising any claims which are contrary to the statements set forth in the estoppel certificate delivered by Landlord.
16.1 Prohibition. Except as otherwise expressly provided in this Article 16 , Tenant shall not sell, assign, transfer, hypothecate, mortgage, encumber, grant concessions or licenses, sublet, or otherwise dispose of any interest in this Lease or the Premises, by operation of law or otherwise, without Landlord's prior written consent, which consent Landlord shall not unreasonably withhold or delay. Any consent granted by Landlord in any instance will not be construed to constitute a consent with respect to any other instance or request. If the Premises or any part thereof should are sublet, used, or occupied by anyone other than Tenant, or if this Lease is assigned by Tenant, Landlord will have the right to collect rent from the assignee, subtenant, user or occupant, but no such assignment, subletting, use, occupancy or collection will be deemed (i) a waiver of any of Landlord's rights or Tenant's obligations under this Article 16 , (ii) the acceptance of such assignee, subtenant, user or occupant as tenant, or (iii) a release of Tenant from the performance of any its obligations under this Lease. Notwithstanding the foregoing, Tenant shall have the right to sublet the Premises without Landlord's prior written consent to any third party company which is a party to a business contract with the Tenant for the supply or manufacturing of products, provided that (i) all provisions of this Article 16 except Sections 16.3, 16.5, 16.12 and 16.16 will apply to such sublease and (ii) Tenant shall submit a written notice and a copy of the sublease to Landlord within five (5) days of such sublease. 16.2 Tenant's Notice. If Tenant desires to sublet the Premises or assign this Lease, Tenant shall submit to Landlord a written notice ( "Tenant's Notice" ) setting forth in reasonable detail:
23
16.3 Landlord's Response. Within fifteen (15) days after Landlord's receipt of Tenant's Notice, Landlord shall notify Tenant in writing whether Landlord (i) consents to the proposed sublet or assignment, (ii) does not consent to the proposed sublet or assignment (in which case Landlord shall specify the reasons for such disapproval), or (iii) elects to exercise its recapture right, as described in Section 16.5 . Landlord will have the right to withhold its consent to the proposed sublease or assignment if (1) the proposed assignee's financial condition is not, in the reasonable judgment of Landlord, comparable or superior to that of Tenant on the date this Lease was executed, (2) the business of the proposed subtenant or assignee is not compatible with the type of occupancy of the Building, or such business will create increased use of the facilities of the Building, (3) the business of the proposed subtenant or assignee, as determined by its North American Industry Classification System, would make it subject to the provisions of ISRA, or (4) the proposed sublease or assignment might adversely affect the quality or marketability of the Building. 16.4 Requirements. In addition to the foregoing requirements,
16.5 Recapture. (a) If Tenant proposes to assign this Lease or sublease more than seventy five percent (75%) of the rentable square footage of the Premises for a term which expires within three hundred and sixty five (365) days prior to the expiration of the Term, then Landlord will have the right, exercisable by written notice (the "Recapture Notice" ) to Tenant within fifteen (15) days after receipt of Tenant's Notice, to recapture the space described in Tenant's Notice (the "Recapture Space" ). The Recapture Notice will cancel and terminate this Lease with respect to the Recapture Space as of the date stated in Tenant's Notice for the commencement of the proposed assignment or sublease and Tenant shall surrender possession of the Recapture Space as of such date. Thereafter, the Basic Rent and Additional Rent will be equitably adjusted based upon the square footage of the Premises then remaining, after deducting the square footage attributable to the Recapture Space. (b) If Landlord elects to exercise its recapture right and the Recaptured Space is less than the entire Premises, then Landlord, at its sole expense, will have the right to make any alterations to the Premises required, in Landlord's reasonable judgment, to make such Recaptured Space a self-contained rental unit. Landlord shall perform all such work, if any, with as little inconvenience to Tenant's business as is reasonably possible; provided, however, that (i) Landlord will not be required to perform such work after normal business hours or on weekends, and (ii) Landlord will not be deemed guilty of an eviction, partial eviction, constructive eviction or disturbance o |
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
