Exhibit 10.1
THIS LEASE is made
the 17 th day of October, 2008 (the
“Effective Date”), by and between SAI PROPERTY
MANAGEMENT LLC, a New Jersey limited liability company having
an address at 2 Henderson Drive, West Caldwell, New Jersey 07006
(“Landlord”); and MICROWAVE CONCEPTS, INC, a
Delaware Corporation with an address at 12 Gardner Road, Fairfield,
New Jersey 07004 (the “Tenant”).
W I T N E S S E T
H:
ARTICLE I
Demise of Premises
Section 1.01
. The Landlord, for and in
consideration of the rents to be paid and of the covenants and
agreements hereinafter contained to be kept and performed by the
Tenant, hereby demises and leases unto the Tenant, and the Tenant
hereby hires and takes from the Landlord, for the term and the rent
and upon the covenants and agreements hereinafter set forth, the
Demised Premises (as hereinafter defined in Article IV) which is
situated on that certain parcel of land located 2 Henderson Drive,
West Caldwell, New Jersey (the “Real
Property”).
ARTICLE II
Term of Lease
Section 2.01
. The term of this
Lease shall be for approximately five (5) years and two
(2) months (the “Term”). The Lease shall commence
on date Landlord delivers possession of the Demised Premises (the
“Commencement Date”) and shall end on the day
immediately preceding the fifth (5 th ) anniversary of the Rent
Commencement Date (the “Termination Date”), unless the
Lease is sooner terminated or extended pursuant to the terms
herein.
ARTICLE III
Rent
Section 3.01
. Tenant shall pay to Landlord,
during the Term without counterclaim, deduction or setoff, Basic
Rent payable in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the
payment of public and private debts. Basic Rent shall be due
commencing on the Rent Commencement Date and shall be payable as
follows:
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Lease
Months
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Rent Per Square
Foot
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Annual Rent
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Basic Monthly Rent
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Commencement Date through Rent Commencement
Date
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$
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0.00
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$
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0.00
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$
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0.00
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Rent Commencement Date through Termination
Date
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$
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9.50
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$
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218,500.00
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$
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18,208.33
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1
Section 3.02
. The foregoing Rent shall be paid
on the first day of each month during the Lease Year except that a
proportionately lesser sum may be paid for the first and last
months of the Term of this Lease if the Term commences on a date
other than the first day of the month, in accordance with the
provisions of this Lease hereinafter set forth. The Basic Monthly
Rent and Additional Rent, shall be payable at the office of
Landlord, at the address above set forth, or as may otherwise be
directed by notice from Landlord to Tenant.
Section 3.03
. Tenant shall, and will, during the
Term pay, or cause to be paid, to Landlord, the Basic Monthly Rent
as herein provided and all other sums that may become due and
payable by Tenant, hereunder, at the time and in the manner herein
provided, without counterclaim, offset or deduction; and all other
sums due and payable by Tenant hereunder may, at Landlord’s
option, be deemed to be, and treated as, Additional Rent, and added
to any Basic Monthly Rent due and payable by Tenant hereunder, and,
in the event of nonpayment of such other sums, Landlord shall have
all the rights and remedies herein provided for in the case of the
nonpayment of rent, or of a breach of any covenant to be performed
by Tenant.
Section 3.04
. The Basic Rent payable by Tenant
pursuant to this Lease is intended to be net to Landlord, and all
other charges and expenses incurred in connection with
Tenant’s use, occupancy, care, maintenance, operation and
control of the Demised Premises, including but not limited to the
charges and expenses payable pursuant to Articles VII and VIII of
this Lease, shall be paid by Tenant, excepting charges and expenses
resulting from acts or omissions of Landlord and other payments to
be paid or obligations undertaken by Landlord as specifically
provided in this Lease.
Section 3.05
. Notwithstanding anything contained
in this Article III to the contrary, the Basic Monthly Rent shall
commence the later of (a) sixty (60) days after the
Commencement Date or (b) January 1, 2009 (the “Rent
Commencement Date”). However, if Landlord fails to
substantially complete Landlord’s Work on or before
January 1, 2009, then the Rent Commencement Date shall be
delayed one day for each additional day of Landlord’s
delay.
Section 3.06
. As used in this Lease, Basic Rent
shall mean either Annual Basic Rent or Basic Monthly Rent, as
appropriate.
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ARTICLE IV
The Demised
Premises
Section 4.01
. The Demised Premises consists
approximately 23,000 square feet of space in a portion of the
building (the “Building”) located on the Real Property.
Tenant acknowledges that it has inspected and is fully familiar
with the condition of the Demised Premises and is leasing the same
in its “WHERE IS, AS IS” condition without any
representations by Landlord except as expressly provided herein,
and, except Landlord shall perform the work set forth on Exhibit B
(“Landlord’s Work”) at Landlord’s sole cost
and expense which Landlord’s work shall be completed
simultaneously with the Tenant’s Work (as hereinafter
defined) to the Commencement Date in a good workmanlike manner in
accordance with Municipal, State, and Federal applicable building
codes. The Demised Premises shall be measured from outside wall to
outside wall unless the demising wall is shared with an adjacent
tenant, in which case the Demised Premises shall be measured from
outside wall to the center line of the demising wall. In the event
of a dispute regarding the square footage of the Demised Premises,
the determination of Landlord’s architect shall be deemed to
final and binding for purposes herein.
Section 4.02
. If necessary and to the extent
applicable, other than Landlord’s Work Tenant shall be
responsible for preparing the interior of the Demised Premises to
suit the particular needs of Tenant’s business operations
(“Tenant’s Work”). Tenant’s Work shall be
subject to Landlord’s prior written consent and done at the
sole cost and expense of the Tenant. Tenant’s Work shall be
performed by licensed and properly insured contractors who shall
complete any such improvements to the Demised Premises in good
workmanlike manner in accordance with Municipal, State, and Federal
applicable building codes. Any mechanical systems, alterations to
the structure of Demised Premises, and roof penetrations shall be
done only by those contractors first approved by Landlord or
alternatively, at Landlord’s option, by Landlord’s
designated contractors. Tenant agrees to secure and provide to
Landlord copies of building permits, evidence of appropriate
insurance coverages before the commencement of Tenant’s Work.
Tenant shall be required to obtain all required certificates and
approvals in connection with Tenant’s Work and Tenant’s
use of the Demised Premises, including but not limited to planning
board approval and a certificate of occupancy if
applicable.
Section 4.03
. The Demised Premises hereinabove
described constitutes a self-contained unit and nothing in this
Lease shall impose upon Landlord any obligation to provide any
services for the benefit of Tenant, including but not limited to
water, gas, electricity, heat, janitorial or garbage removal,
unless and to the extent expressly provided for in this
Lease.
Section 4.04
. Tenant, promptly after the
Commencement Date, shall accept possession of the Demised Premises
and commence Tenant’s Work. On the Commencement Date,
Landlord shall deliver to Tenant a key to the Demised
Premises
3
so that the Tenant may commence Tenant’s
Work. Landlord and Tenant shall cooperate with one another to
perform their respective work without interference to one another.
Except for the obligation to pay Rent, the terms of the Lease shall
be binding on Landlord and Tenant and Tenant shall comply with all
obligations of this Lease during the period between the
Commencement Date and the Rent Commencement Date.
ARTICLE V
Use
Section 5.01
. The Demised Premises may be used
for laboratory, design, manufacturing, warehouse, and for offices
in connection therewith and for no other purpose. Tenant represents
that its NAICS Code is 334419.
Section 5.02
. Tenant shall have, along with
other tenants in the Building, the right to park its vehicles and
the vehicles of its employees, agents, and invitees in the common
areas of the Building.
ARTICLE VI
Quiet Enjoyment
Section 6.01
. Landlord covenants that if, and so
long as, Tenant pays the Basic Rent, and any Additional Rent as
herein provided, and performs the covenants hereof, Landlord or
anyone claiming by, through or under Landlord shall not do anything
to affect Tenant’s right to peaceably and quietly have, hold
and enjoy the Demised Premises for the Term herein mentioned,
subject to the provisions of this Lease.
ARTICLE VII
Additional Rent, Real Estate
Taxes, Utilities and Common Area Maintenance
Expenses
Section 7.01
. Additional Rent . As used
in this Lease, Additional Rent shall mean all sums due to Landlord
by Tenant other than Basic Rent pursuant to the provisions of this
Lease. Failure to pay Additional Rent shall afford Landlord the
same remedies available as failure to pay Monthly Basic Rent.
Additional Rent shall include, but not be limited to Tenant’s
Proportionate Share of all Real Estate Taxes, Utilities, and CAM
charges as set forth below. For purposes of this Lease,
Tenant’s Proportionate Share shall be 71.88%
Section 7.02 Real Estate
Taxes . As of the Rent
Commencement Date, Tenant shall pay, before any interest or
penalties accrue thereon, to the Landlord Tenant’s
Proportionate Share of Real Estate Taxes imposed during the Term on
the Demised Premises. Any tax or charge relating to the fiscal
years in which the Term of this Lease
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commences and terminates shall be appropriately
apportioned. Tenant’s Proportionate Share of Real Estate
Taxes shall be paid to Landlord in twelve (12) monthly
installments as Additional Rent together with the Monthly Basic
Rent. Tenant’s Proportionate Share of the amount of monthly
Real Estate Taxes shall be based upon Landlord’s
approximation of the Real Estate Taxes due for the current fiscal
year. Landlord may make adjustments in its estimates as necessary
based on billings from the taxing authority and any adjustments
necessary shall be paid or credited by Tenant within thirty
(30) days of Landlord’s statement. Within approximately
one hundred twenty (120) days of the end of each calendar
year, Landlord shall provide a statement to Tenant setting forth
Tenant’s Proportionate Share of actual Real Estate Taxes for
the prior calendar year and there shall be an adjustment upwards or
downwards if the amount paid by Tenant differs from the amount
actually incurred in that year. Notwithstanding the expiration of
the term hereof, Tenant shall continue to be liable to Landlord for
Tenant’s Proportionate Share of all Real Estate Taxes
incurred by Landlord for the period of Tenant’s lease Term
and Tenant shall promptly remit to Landlord any amount due to
Landlord upon notice from Landlord to Tenant. Provided that the
Term commenced on any day other than the first day of the calendar
year, Landlord shall determine Tenant’s Proportionate Share
of Real Estate Taxes during the first Lease Year by calculating the
entire Real Estate Taxes for the calendar year and prorating such
amount by the number of days during Tenant’s Term.
Section 7.03
. Tenant shall not be required to
pay any estate, inheritance, devolution, succession, transfer,
legacy or gift tax charged against Landlord or the estate or
interest of Landlord in the Demised Premises or upon the right of
any person to succeed to the same or any part thereof by
inheritance, succession, transfer or gift, nor any capital stock
tax or corporate franchise tax incurred by Landlord, nor any income
tax upon or against the income of Landlord (including any rental
income derived by Landlord from the Demised Premises but this
exclusion shall not be applicable to a gross receipts or rental tax
which shall be considered a Real Estate Tax).
Section 7.04
. Tenant shall pay it Proportionate
Share of all assessments that may be imposed upon the Demised
Premises by reason of any specific public improvement (including
but not limited to assessments for street openings, grading, paving
and sewer installations and improvements) except that if by law any
such special assessment is payable, or may, at the option of the
taxpayer, be paid, in installments, Tenant may, whether or not
interest accrues on the unpaid balance thereof, pay the same and
any accrued interest on any unpaid balance thereof in installments
as each installment becomes due and payable, but in any event
before any penalty or cost may be added thereto for nonpayment of
any installment or interest. Any such benefit, assessment or
installment thereof relating to a fiscal period in which the Term
of this Lease begins or ends shall be apportioned.
Section 7.05
. Landlord reserves the sole right
to contest or appeal any Real Estate Taxes, and Landlord shall
adjust billings or issue a rebate to Tenant based on the outcome of
any such appeal or contest, after Landlord deducts its reasonable
out of pocket expenses in connection with any such appeal or
contest.
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Section 7.06
. As used in this Lease, Real
Estate Taxes shall mean the property taxes and assessments imposed
upon the Real Property including the Demised Premises, or upon the
Rent (Basic and Additional), as such payable by Landlord, including
but not limited to, real estate, city, county, village, school and
transit taxes, or taxes, assessments or charges levied, imposed or
assessed against the Real Property including the Building, by any
other taxing authority, whether general or specific, ordinary or
extraordinary, foreseen or unforeseen. If due to a future change in
the method of taxation, any franchise, income or profit tax or
other tax shall be levied against Landlord in substitution for, or
in lieu of, or in addition to, any tax which would otherwise
constitute a Real Estate Tax, such franchise, income or profit tax
or other tax shall be deemed to be a Real Estate Tax for the
purposes hereof.
Section 7.07
. The Tenant shall pay for all
utilities, including connection charges and deposits, when and as
the same becomes available for its utilization, as recorded on
separate meters, including water, gas, electricity, sewer charges
and fuel consumed for heating commencing on the Commencement Date.
Tenant shall pay directly to the public utility companies, or
reimburse Landlord as additional rent if Landlord has previously
paid therefor, the cost of any installation of any and all such
utility services. Landlord shall pay for the cost of all utility
meters and the cost of installation thereof. Tenant agrees to
indemnify and hold harmless Landlord from and against any and all
claims arising from all costs and charges for utilities consumed on
or by the Demised Premises. Additionally, Landlord shall advise as
to a location accessible for trash pickup where the Tenant may
place trash for removal by an outside company retained by the
Tenant. Tenant shall therefore be required to make its own
arrangements with a waste management company for the disposal of
its garbage,
Section 7.08
. During the term of this Lease,
Tenant is granted, subject to reasonable rules and regulations as
Landlord may establish from time to time, the nonexclusive license
to permit its customers and invitees to use the sidewalks, customer
parking areas, loading docks (as applicable), pedestrian walks, and
the entrance and exit ways designated by Landlord for access and
egress to and from the Demised Premises from a public street or
highway, (collectively the “Common Area”).
Notwithstanding anything contained in this Lease to the contrary,
Landlord shall have the sole and exclusive right, at any time and
from time to time, without notice to or consent of Tenant, to
change the size, location, elevation and nature of any of the
Common Area or any part thereof, except as to the Demised Premises,
including, without limitation, the right to locate and/or erect
thereon other buildings and improvements of any type,
provided , however, that Landlord shall not impede the
access to the Demised Premises by the Tenant or parking. Landlord
shall use reasonable efforts to minimize disruption to
Tenant’s business operations. Subject to any easements and
restrictions of record granted or approved by Landlord from time to
time, all common areas shall be subject to the exclusive control
and management of Landlord, and Landlord shall have the right, at
any time and from time to time, to establish, modify, amend and
enforce reasonable rules and regulations with respect to the Common
Area and the use thereof. Tenant agrees to abide by and conform
with such Rules and Regulations upon notice thereof and to enforce
same upon its agents, employees, contractors, subcontractors,
licensees, customers, permitted concessionaires and,
invitees.
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Section 7.9
. Landlord agrees to maintain and
keep in good service and repair all Common Areas of the Real
Property, including all base building systems, including HVAC,
electrical, plumbing and sewer, and shall keep the Common Areas
free of snow and ice. As of the Rent Commencement Date, Tenant
shall pay to Landlord, as Additional Rent, Tenant’s
Proportionate Share of all costs and expenses incurred by Landlord
in maintaining and repairing the Common Area (the “Common
Area Maintenance Expenses” or “CAM”). The Common
Area Maintenance Expenses shall include, but not be limited to, any
costs and expenses incurred by Landlord in managing, operating and
maintaining the Building and Real Property including, but not be
limited to, the total costs and expenses incurred in cleaning,
planting, replanting and maintaining the landscaping, assessments,
repairs, repaving, line repainting, exterior repainting, rental and
maintenance of signs and equipment, gas and electric utility
charges, lighting, water and sewer charges, sanitary control,
bookkeeping, administrative/management fees not to exceed 5% of
Common Maintenance Expenses, removal of snow and ice, repair and/or
replacement of onsite water lines, electrical lines, gas lines,
sanitary sewer lines and storm water lines, fees for required
licenses and permits, and fire, security and police protection.
Common Area Maintenance Expenses shall exclude: interest and
principal payments on loans; amortization and depreciation charges;
ground rent; legal fees, commissions or other expenses incurred in
connection with negotiating and enforcing leases with tenants in
the Building; advertising and promotional expenditures; the cost of
tenant improvements, build out allowances, moving expenses, and
other concessions incurred in connection with leasing spacing in
the Building; the cost of any item or service to the extent
Landlord is reimbursed by tenants, third parties or insurance; any
expenses attributable to a specific tenant; cost of any service or
material provided by a related party to the extent that the cost of
such service or material exceeds competitive costs of such service
or material absent such relationship; late fees or penalties; costs
incurred in the event that the Building does not comply with
governmental rules in effect as of the Commencement Date; wages,
salaries, or other compensation paid to any executive employees
above the grade of building manager. Notwithstanding anything
contained herein to the contrary, all capital expenditures shall be
amortized over their useful life in accordance with generally
accepted accounting principals on a straight line basis and such
amortized cost occurring during the Term shall be included in
CAM.
Section 7.10
. As of the Rent Commencement Date,
Tenant shall pay Landlord, in advance, Tenant’s Proportionate
Share of Landlord’s estimate of Common Area Maintenance
Expenses, as computed above, in twelve (12) equal monthly
installments, along with the Basic Monthly Rent. Notwithstanding
the above, in the event Landlord at any time determines that the
amount of Common Area Maintenance Expenses actually being paid by
Landlord exceeds the estimate upon which Tenant’s
proportionate share of Common Area Maintenance Expenses was
computed, Tenant, following a request from Landlord, shall commence
to pay with the next monthly installment of rent due an amount
sufficient to result in Tenant’s paying its full
proportionate share of Common Area Maintenance Expenses as computed
on the basis of Landlord’s revised estimate of Common Area
Maintenance Expenses. Within approximately one hundred twenty
(120)
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days of the end of each calendar year, Landlord
shall provide a statement to Tenant setting forth actual Common
Area Maintenance Expenses and there shall be an adjustment upwards
or downwards if the amount paid by Tenant differs from
Tenant’s Proportionate Share of the amount actually incurred
in that year. Any amount due Tenant or any amount due Landlord
shall be credited against or paid, respectively, in the next
monthly installment of Common Area Maintenance Expenses. Provided
that the Term commenced on any day other than the first day of the
calendar year, Landlord shall determine Tenant’s Common Area
Maintenance Expenses during the first Lease Year by calculating the
entire Common Area Maintenance Expenses for the calendar year and
prorating such amount by the number of days during Tenant’s
Term.
Section 7.11
. Tenant shall have the right,
during regular business hours and after giving thirty
(30) days’ advance written notice to Landlord, to
inspect and audit Landlord’s books and records relating to
the Common Area Maintenance Expenses billed during any calendar
year falling within the Term, for a period of one (1) year
following the receipt by Tenant of any statement submitted pursuant
to this Lease. If as a result of such audit it becomes clear that
an error was made in the calculation of the Common Area Maintenance
Expenses or of Tenant’s Proportionate Share of Common Area
Maintenance Expenses, then an appropriate adjustment shall be made
within thirty (30) days of Landlord’s receipt from
Tenant of a copy of such audit together with Tenant’s demand
for reimbursement and, if Landlord has overstated Common Area
Maintenance Expenses by more than seven and one-half percent
(7.5%), or if the amount by which Landlord over-charged Tenant
exceeds seven and one-half percent (7.5%) of Tenant’s
Proportionate Share of Common Area Maintenance Expenses then
Landlord shall pay the reasonable actual out-of-pocket costs and
expenses paid by Tenant for the audit, exclusive of any travel
costs.
ARTICLE VIII
Insurance
Section 8.01
. During the Term, Landlord shall
maintain the following insurance, insuring Landlord and ground
lessor, if any, and any mortgagee(s), as their respective interests
may appear, and Tenant shall reimburse Landlord for Tenant’s
Proportionate Share of the cost of Landlord’s insurance as
Additional Rent.
(A) “All Risk” Insurance
against damage to the Building by all risks of direct physical loss
(at Landlord’s option to include earthquake, flood and such
other risks as Landlord deems appropriate) with a replacement cost
endorsement, at least equal to the cost of the Building.
(B) Commercial general liability
insurance against claims for bodily injury and property damage
occurring in or about the Demised Premises, Common Areas
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and other real property adjoining
the property and insurance against such other hazards as, from time
to time, are then commonly insured against for premises similarly
situated in amounts normally carried with respect
thereto.
(C) All other insurance as deemed
prudent and necessary by Landlord in Landlord’s sole
discretion.
All insurance maintained pursuant to
this Section 8.01 may be effectuated by blanket insurance
policies. Tenant’s Proportionate Share of the cost of
Landlord’s insurance shall be paid to Landlord in twelve
(12) monthly installments as Additional Rent together with the
Monthly Basic Rent. Landlord shall notify Tenant of the amount of
Tenant’s monthly payment for insurance based upon
Landlord’s approximation of the yearly cost of
Landlord’s insurance. Landlord may make adjustments in its
estimates as necessary based on invoices from the insurance company
and any adjustments necessary shall be paid or credited within
thirty (30) days of Landlord’s statement. Within
approximately one hundred twenty (120) days of the end of each
calendar year, Landlord shall provide a statement to Tenant setting
forth Tenant’s Proportionate Share of the cost of
Landlord’s insurance and there shall be an adjustment upwards
or downwards if the amount paid by Tenant differs from the amount
actually incurred in that year.
Section 8.02
. During the Term of the Lease,
Tenant, at its cost, shall provide and keep in force:
(A) A commercial general liability
policy in standard form (containing the so-called “occurrence
clause”) against claims for personal injury and property
damage occurring on, in or about the Demised Premises in the
combined single limit amount of Three Million and 00/100
($3,000,000.00) Dollars, and shall include an endorsement naming,
Landlord and such other person(s) or entity(ies) as Landlord may
require with respect to liability for ownership, operation,
maintenance, use and control as additional insured.
(B) “All Risk” property
insurance against fire, theft, vandalism, malicious mischief,
sprinkler leakage and such additional perils as are now, or
hereafter may be, included in a standard extended coverage
endorsement from time to time in general use in the State of New
Jersey upon property of every description and kind owned by Tenant
and or under Tenant’s care, custody or control located in the
Building or within the real property of which the Demised Premises
are a part or for which Tenant is legally liable or installed by or
on behalf of Tenant, including by way of example and not by way of
limitation, furniture, fixtures, fittings, equipment, installations
and any other personal property (but excluding any work done by
Landlord which is owned by Landlord) in an amount equal to the full
replacement cost thereof and such other person(s) or entity(ies) as
Landlord may require with respect to liability for ownership,
operation, maintenance, use and control as additional
insureds.
(C) Business interruption insurance
in such amounts as will reimburse Tenant for direct or indirect
loss of earnings attributable to all perils commonly
9
insured against by prudent tenants
or assumed by Tenant pursuant to this Lease or attributable to
prevention or denial of access to the Demised Premises, or Real
Property as a result of such perils.
(D) Tenant shall also furnish, or
reimburse Landlord for insurance for such other hazards and in such
amounts as Landlord may reasonably require and as at the time are
commonly insured against with respect to buildings similar in
character, general location and use and occupancy to the Demised
Premises in relative amounts normally carried with respect
thereto.
The policies of insurance required
pursuant to this Section 8.02 shall be from a company rated in
the A.M. Best Key Rating Guide with a policyholder’s service
rating of A+ and a financial rating of XV. The company shall be
licensed by the State of New Jersey and a certificate(s) evidencing
the existence of such policy shall be delivered to Landlord,
together with evidence of the payment of the premiums therefor,
prior to the commencement of the Term. The company shall agree to
provide a notice of cancellation or non-renewal to the Landlord and
any mortgagee at least thirty (30) days prior to said event
becoming effective. At least thirty (30) days prior to the
expiration or termination date of any policy, Tenant shall deliver
a renewal or replacement policy, or certificate(s) evidencing the
existence thereof, to Landlord together with proof of the payment
of the premium therefor. The aforesaid insurance shall be written
with no deductible.
Section 8.03
. Tenant shall maintain insurance
covering Tenant’s personal property, fixtures, goods and
inventory and any other items which Tenant may bring to the Demised
Premises or which may be under Tenant’s care, custody and
control which may be subject to any claim for damages or
destruction. Tenant shall name Landlord (and at Landlord’s
election, Landlord’s managing agent and/or mortgagee[s]) as
an additional named insured as its interest may appear. If at any
time the amount of personal property, fixtures, goods and inventory
or other items located at the Demised Premises shall exceed the
amount of insurance Tenant is required to carry under this Lease.
Tenant covenants to increase the amount of insurance required to be
carried pursuant to Section 8.02(B) to an amount sufficient to
cover the aforesaid to preclude any liability on Landlord’s
part to Tenant. Should Tenant fail to do so, or fail to maintain
insurance coverage adequate to cover the aforesaid, naming Landlord
(and at Landlord’s election and notice to Tenant,
Landlord’s managing agent and/or mortgagee[s]) as an
additional named insured, then Tenant shall be in default hereunder
and shall be deemed to have breached its covenants as set forth
herein.
Section 8.04
. All losses paid under the policy
or policies carried pursuant to Section 8.01 shall (subject to
the mortgagee’s rights) be adjusted by Landlord and the
proceeds thereof shall be payable to Landlord and all policies
shall so provide. Each insurance policy carried by Landlord
insuring the Building to include the Demised Premises against loss
by fire and causes covered by the aforesaid All Risk coverage, and
each insurance policy carried by Tenant and insuring the Demised
Premises and its fixtures and contents against loss by fire, water
and causes covered by the aforesaid All Risk coverage, shall be
written in a manner so as to provide that the insurance
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company waives all rights of recovery by way of
subrogation against Landlord or Tenant in connection with any loss
or damage covered by such policies. Neither party shall be liable
to the other for any loss or damage caused by fire, water or any of
the risks enumerated in the aforesaid All Risk coverage insurance,
provided such insurance was required to be obtained at the time of
such loss or damage. If such insurance policies are obtainable only
by the payment of an additional premium charge, the same shall be
obtained and such additional premium paid for by the party
requesting such policy. If the release of either Landlord or
Tenant, provided for in this Section 8.04 shall contravene any
law with respect to exculpatory agreements, the liability of the
party in question shall be deemed not released but shall be deemed
secondary to the latter’s insurer.
Section 8.05
. Except for Landlord’s
negligence or willful misconduct or as otherwise set forth in this
Lease, Landlord shall not be liable to Tenant for any loss suffered
by Tenant under any circumstances, including, but not limited to:
(i) that arising from defects, errors or omissions in the
construction or design of the Demised Premises and/or the Building
including the structural and nonstructural portions thereof; or
(ii) loss of or injury to Tenant or to Tenant’s property
or that for which Tenant is legally liable from any cause
whatsoever, including but not limited to theft or burglary; or
(iii) that which results from or is incidental to the
furnishing of or failure to furnish or the interruption in
connection with the furnishing of any service which Landlord is
obligated to furnish pursuant to this Lease; or (iv) that
which results from any inspection, repair, alteration or addition
or the failure thereof undertaken or failed to be undertaken by
Landlord; or (v) any interruption to Tenant’s business,
however occurring, except that in the event any disruption to
Tenant within Landlord’s control prevents Tenant from using
or occupying the Premises in whole or in part for five
(5) days in any twenty (20) day period, then
Tenant’s Rent shall abate proportionately during such
period.
Section 8.06
. Tenant shall indemnify, defend and
save Landlord harmless against and from all liabilities, claims,
suits, fines, penalties, damages, losses, fees, costs and expenses
(including reasonable attorneys’ fees) which may be imposed
upon, incurred by or asserted against Landlord by reason
of:
(A) Any work or thing done in, on or
about the Demised Premises or any part thereof by or on behalf of
Tenant; or occasioned by the use and occupancy of the Demised
Premises by Tenant;
(B) Any use, occupation, condition,
operation of the Demised Premises or any part thereof or of any
street, alley, sidewalk, curb, vault, passageway or space adjacent
thereto or any occurrence on any of the same on the part of Tenant
unless caused by Landlord, its agents or employees;
(C) Any act or omission on the part
of Tenant or any subtenant or any employees, licensees or
invitees;
(D) Any accident, injury (including
death) or damage to any third party or
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property owned by someone other than
Tenant and not under the care, custody or control of Tenant
occurring in, on or about the Demised Premises, or any part thereof
or in, on or about any street, alley, sidewalk, curb, vault,
passageway or space adjacent thereto, unless caused by Landlord,
its agents or employees; and
(E) Any failure on the part of
Tenant to perform or comply with any of the covenants, agreements,
terms or conditions contained in this Lease.
The provisions of this
Section 8.06 shall survive the expiration or earlier
termination of the Lease.
Section 8.07
. Any policies required to be
furnished by Tenant pursuant to this Article VIII will
unequivocally provide an undertaking by the insurers to notify
Landlord and the mortgagees or ground lessors of Landlord in
writing not less than thirty (30) days prior to any material
change, reduction in coverage, cancellation, or other termination
thereof.
ARTICLE IX
Repairs
Section 9.01
. (A) Tenant shall keep the
interior and exterior of the Demised Premises in good condition and
repair as they are at the Commencement Date, and shall redecorate,
paint and renovate the Demised Premises as may be necessary to keep
them in such condition and repair, reasonable wear and tear,
casualty and condemnation excepted. Landlord shall be responsible
for any necessary maintenance, repairs or replacement to all
systems including but not limited to the mechanical, plumbing, and
electrical systems located outside of the Demised Premises and the
cost of same shall be included in CAM subject to Section 7.9,
except that Landlord shall be solely responsible for repairs and
replacement to the HVAC system but Tenant shall, at all times to
keep a maintenance and service contract in effect to provide for
customary and periodic preventative maintenance of the HVAC system.
Tenant shall keep the Demised Premises and all parts thereof in a
clean and sanitary condition and free from trash, flammable
material and other objectionable matter. Notwithstanding the
foregoing, Landlord shall be responsible, at Landlord’s sole
cost and expense, for any repairs or replacements to the roof and
structure of the Demised Premises, unless such repairs are
necessitated by the acts or omissions of the Tenant. In the event
that Landlord is required to make any repairs to the roof or
structure of the Building as a result of Tenant’s acts or
omissions, then Landlord shall bill Tenant for the cost of the work
performed, and Tenant shall reimburse Landlord for the cost of such
work within thirty (30) days after Landlord’s demand
therefore. Additionally, prior to the commencement of any work
performed on, in or about the Demised Premises, Tenant shall
deliver to Landlord sworn statements setting forth the names of all
contractors and subcontractors who did work and final lien waivers
from all such contractors and subcontractors.
(B) Tenant shall replace, at
Tenant’s expense, all glass in and on the Demised
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Premises which may become broken after the date
of Tenant’s occupancy. When used in this Article, the term
“repairs” shall mean those ordinary and necessary
repairs. All repairs made by Tenant shall be equal in quality and
class to the original work. Tenant shall quit and surrender the
Demised Premises at the end of the Term in good condition,
reasonable wear and tear, casualty and condemnation excepted and in
compliance with the requirements stated herein and in a
“broom-clean” condition.
(C) Should Tenant fail to keep the
Demised Premises in good condition, Landlord, after reasonable
notice to Tenant (or without notice in the case of an emergency),
may, without being obliged, make the repairs, but nothing herein
shall be construed to impose a duty on Landlord to mitigate its
damages by undertaking any repair which is Tenant’s
obligation. In the event that the Landlord makes any repairs the
Tenant shall reimburse the Landlord for such repairs.
Section 9.02
. Tenant shall not make any
alterations, additions or improvements to the Demised Premises
without the prior written consent of Landlord, which Landlord shall
not unreasonably withhold. All erections, alterations, additions
and improvements, whether temporary or permanent in character,
which may be made upon or to the Demised Premises either by
Landlord or Tenant, except furniture or movable trade fixtures or
Tenant’s specialized manufacturing or “clean
room” systems or fixtures installed at the expense of Tenant,
shall be the property of Landlord upon installation and shall
remain upon and be surrendered with the Demised Premises as a part
thereof at the expiration or sooner termination of this Lease,
without compensation to Tenant. Landlord, at Landlord’s
option, may require as a condition of its consent, that Tenant
remove, at the expiration or sooner termination of the Term of this
Lease, any erections, alterations, additions or improvements made
by Tenant, and restore the Demised Premises to its preexisting
condition and that Tenant use contractors approved by
Landlord.
ARTICLE X
Casualty
Section 10.01
. If the Building is damaged or
destroyed by fire, explosion, the elements or otherwise during the
Term so as to (a) render the Demised Premises wholly
untenantable or unfit for occupancy, or (b) should the Demised
Premises be so badly injured that the same cannot be repaired
within two hundred seventy (270) days from the happening of
such injury, or (c) if the insurance proceeds required to be
carried hereunder are insufficient or (d) if Landlord’s
mortgagee fails to authorize Landlord to use the proceeds to
restore such damage, then, and in any such case, the Term hereby
created shall, at the option of Landlord or Tenant, terminate upon
the giving of a notice of termination. If a notice of termination
is given, the Term of this Lease shall terminate effective as of
the date of such damage or destruction, and Tenant shall
immediately surrender the Demised Premises and all Tenant’s
interest therein to Landlord, and pay Basic Rent and Additional
Rent to the time of such damage or destruction, and Landlord may
re-enter and repossess the Demised Premises discharged from this
Lease and may remove all parties therefrom. Landlord shall have no
obligation to repair or restore Tenant’s
improvements.
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Section 10.02
. Should the Lease not be
terminated pursuant to Section 10.01 , Landlord will
enter and repair the same with reasonable speed, and the Basic Rent
and Additional Rent shall abate while repairs are being made.
Landlord shall have no obligation to repair or restore
Tenant’s improvements.
Section 10.03
. If the Demised Premises shall be
so slightly injured as not to be rendered untenantable and unfit
for occupancy , Landlord shall repair the same with reasonable
promptness but no more than thirty (30) days, and the Basic
Rent and Additional Rent accrued and accruing shall abate in
proportion to such damage until the Demised Premises has been
restored. Tenant shall immediately notify Landlord in case of fire
or other damage to the Demised Premises.
ARTICLE XI
Condemnation
Section 11.01
. If, during the Term, twenty-five
(25%) percent or more of the area of the Demised Premises or
Common Area parking facilities shall be taken under any power of
eminent domain or condemnation or should access to the Demised
Premises be materially obstructed, then, at the option of either
Landlord or Tenant, to be exercised in writing within thirty
(30) days of the taking of title thereto, this Lease shall
expire within thirty (30) days of the date of such notice and
the Basic Rent and Additional Rent herein reserved shall be
apportioned as of said date. However, if Landlord or Tenant does
not exercise the aforementioned option, or if the taking does not
deprive Tenant of at least twenty-five (25%) percent of the
area of the Demised Premises or parking facilities or materially
obstruct access, this Lease shall not expire but the Basic Rent and
Additional Rent shall be equitably apportioned. If Landlord and
Tenant fail to agree upon an equitable apportionment, the Basic
Rent and Additional Rent for the Building, after such taking, shall
be determined in accordance with the Commercial Rules of the
American Arbitration Association of Somerset, New Jersey, and the
arbitrator shall be empowered to assess the costs and expenses of
the proceedings as part of the determination. Pending such
determination, Tenant shall pay, on account of the Basic Rent, such
proportion of the rent reserved in this Lease as the total area of
the Building after the taking bears to the total area of the
Building before the taking, subject to adjustment in accordance
with the arbitrator’s award. If Landlord can, after such
taking, construct an addition to the remaining Building so as to
restore all of the Building area and Building facilities
theretofore taken, Landlord shall, subject to the adequacy of the
condemnation award and to the mortgagee making the same available
to Landlord, promptly construct such addition and restore such
facilities so taken and upon the completion of such restoration,
the full Basic Rent reserved by this Lease shall be reinstated, as
of the date of such restoration, and, if Tenant is able to occupy
and use the Building, the proportionate Basic Rent shall be paid by
Tenant as herein provided, during the period between the taking and
the restoration of the Building and facilities. No part of any
award shall belong to Tenant except that nothing
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contained herein is intended to affect or limit
Tenant’s claim for fixtures or other improvements owned by
Tenant, loss of goodwill or moving expenses provided the same does
not diminish Landlord’s award. Notwithstanding anything
contained herein to the contrary, if only vacant land and
immaterial areas of improvement are taken, there shall be no
adjustment of Basic Rent and/or Additional Rent.
ARTICLE XII
Compliance With Laws,
Environmental Compliance, Etc.
Section 12.01
. Tenant shall not do or permit
anything to be done in the Demised Premises which shall constitute
a public nuisance or which will confl