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LEASE

Lease Agreement

LEASE | Document Parties: MICRONETICS INC | MICROWAVE CONCEPTS, INC | SAI PROPERTY MANAGEMENT LLC You are currently viewing:
This Lease Agreement involves

MICRONETICS INC | MICROWAVE CONCEPTS, INC | SAI PROPERTY MANAGEMENT LLC

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Title: LEASE
Governing Law: New Jersey     Date: 11/5/2008
Industry: Communications Equipment     Sector: Technology

LEASE, Parties: micronetics inc , microwave concepts  inc , sai property management llc
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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:

 

 

 

 

 

 

 

 

 

 

 

Lease Months

  

Rent Per Square
Foot

  

Annual Rent

  

Basic Monthly Rent

Commencement Date through Rent Commencement Date

  

$

0.00

  

$

0.00

  

$

0.00

Rent Commencement Date through Termination Date

  

$

9.50

  

$

218,500.00

  

$

18,208.33

 

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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

 

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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

 

4


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)

 

7


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

 

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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


 
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