LEASE

 

 

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LEASE                                                               Exhibit 10.22

 

SECTION 1- BASIC LEASE PROVISIONS

 

      1.01. Date and Parties. This lease ("Lease") is made as of July 1, 2003,

between WESTWOOD PROPERTY HOLDINGS LLC, a New Jersey limited liability company

("Landlord"), and WESTWOOD COMPUTER CORPORATION, a New Jersey corporation, with

offices at 11 Diamond Road, Springfield, New Jersey ("Tenant").

 

      1.02. Premises. Landlord hereby leases to Tenant and Tenant hereby leases

from Landlord certain real property and the improvements thereon (the

"Premises") located at 11 Diamond Road, Springfield, New Jersey (the

"Building"), which Premises contain approximately 2,662 square feet of space

which comprises the entire Building and are shown on the plan attached hereto as

Exhibit A. Tenant shall have the nonexclusive right to the use of the common

areas in the Building and the land (the "Land") on which the Building is located

including elevators, sidewalks, parking areas, driveways, hallways, stairways,

public bathrooms, common entrances, lobby, and other similar public areas and

access ways. Upon reasonable prior notice to Tenant, Landlord may change the

common areas if the changes do not adversely interfere with Tenant's access to

or use of the Premises.

 

      1.03. Use. Tenant shall use the Premises as a business office and

warehouse and/or to provide other business services conducted or offered by

Tenant or its subsidiaries or other related entities.

 

      1.04. Term. The term of this Lease (the "Term") shall commence on July 1,

2003 (the "Commencement Date") and shall end on the ten-year anniversary of the

Commencement Date, unless sooner terminated as herein provided.

 

                                SECTION 2 - RENT

 

      2.01. Base Rent. Tenant covenants and agrees to pay Landlord in lawful

currency of the United States in advance on the first (1st) day of each month

during the Term without any previous notice or demand therefor and without any

offset or deduction, the following annual base rent in the following monthly

installments (the "Base Rent"):

 

      Lease Year   Annual Base Rent         Monthly Installments

      ---------    ----------------         --------------------

 

      2003-2013      $233,000.00            $19,416.66

 

      As used herein, the term "Lease Year" shall refer to the first twelve (12)

months of the Term and thereafter to each (12) month period during the Term. If

the Term does not begin on the first day or end on the last day of a month, the

Base Rent for that partial month shall be prorated by multiplying the monthly

Base Rent by a fraction, the numerator of which is the

 

 

 

 

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number of days of the partial month included in the Term and the denominator of

which is the total number of days in the full calendar month.

 

      2.02. Utility Expenses Payment by Tenant. Tenant shall contract directly

with all utility service providers and shall promptly pay all charges for water,

gas, heat, electricity and any other utilities or services used or furnished to

the Premises.

 

      2.03. Taxes.

 

      2.03(a). Payment by Tenant. It is the purpose and intent of Landlord and

Tenant that the rental as herein provided shall be absolutely net to the

Landlord, so that this Lease shall yield to Landlord the rent specified

hereinabove and accordingly that all taxes, insurance, maintenance and other

expenses of any type or nature shall be solely the responsibility of Tenant

unless otherwise specifically provided herein. With such intent in mind, Tenant

agrees that it shall pay, in addition to all other sums agreed to be paid by it

in this Lease, all real property taxes and assessments against the real estate

and improvements constituting the Premises which fall due during the term of

this Lease. Such taxes and assessments shall be prorated for any partial lease

years. Tenant shall have the right to protest taxes either in its own name or in

the name of Landlord and Landlord shall cooperate to whatever extent necessary

to protest said taxes, all at the sole expense of Tenant. In contesting any such

taxes, Tenant shall obtain such bonds or take such other action as may be

necessary to assure that liens or lien rights do not attach to the Premises.

Tenant shall be solely responsible and shall pay for all personal property taxes

on all personal property, inventory and fixtures owned by it or located in or

about the Premises which accrue during the term of this Lease.

 

      2.03(b). Limitation. It is expressly agreed, however, that Tenant shall

not be obligated to pay any capital levy or corporate franchise tax levy imposed

upon Landlord or any estate, inheritance, succession or transfer tax upon the

passing of Landlord's interest in the Premises, or any income tax, profits tax,

excise tax or other tax or charge that may be payable or chargeable to the

Landlord under any present or future law of the United States or State of New

Jersey or imposed by any political or taxing subdivision thereof, or any

governmental agency, upon or with respect to the rent received by Landlord under

this Lease.

 

      2.03(c). Tax Refund. If Landlord receives a refund of any portion of Taxes

that were paid by Tenant, then Landlord shall reimburse to Tenant the refunded

Taxes, less the actual costs of Landlord in contesting such Taxes.

 

      2.04 Common Area Maintenance.

 

      2.04(a) Payment by Tenant. Tenant shall be solely responsible for and

shall promptly pay its proportionate share of all costs and charges associated

with common area maintenance charges ("CAM Charges") as defined herein, within

thirty (30) days after receipt of Landlord's written demand therefor. Tenant's

proportionate share shall be 100%. Upon request Landlord shall provide Tenant

with copies of the invoices constituting the CAM charges. CAM charges shall mean

all expenses, costs and disbursements of every kind and nature incurred in

connection with the maintenance, repair, replacement and operation of the common

areas equipment,

 

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facilities, and components (together, "common areas") of the Building, including

but not limited to the following: (1) cost of wages and salaries of all

employees engaged in the operation and maintenance of the common areas of the

Building, including but not limited to payroll taxes, insurance and benefits;

(2) cost of all supplies and materials used in the building; (3) cost any

utilities which are not submetered directly to tenant spaces; (4) costs incurred

under all maintenance and service agreements for the common areas of the

Building, including but not limited to security (if any), trash removal, snow

and ice removal and landscaping; (5) cost of repairs and general maintenance to

the common areas of the Building; (6) costs of repairs replacements and general

maintenance to the common areas of the Premises, including the parking areas,

all sidewalks and other common facilities, and to furnish, supply and maintain

in good order and repair all HVAC, plumbing, sprinkler and electrical systems

serving the Premises, doors, roof drainage systems, the roof, foundation and

other structural portions of the Building, provided that any capital

expenditures shall be amortized on a straight line basis over the useful life of

the improvement for which the expenditure is made; (7) property management fees

and expenses, cost of audit and accounting services; (8) the costs of any

improvements required or made necessary by changes in law after the date hereof;

(9) cost of any licenses or permits required by any public authority. For

purposes of this provision, CAM charges shall not include (a) the cost of

capital improvements (except as expressly provided above), (b) the costs of

tenant improvements, maintenance and repairs within tenant spaces, (c) ground

rent or debt service, (d) depreciation, or (e) leasing commissions.

 

                       SECTION 3 - AFFIRMATIVE OBLIGATIONS

 

      3.01. Compliance with Laws.

 

      3.01(a). Landlord's Compliance. Landlord shall comply with all applicable

laws, ordinances, rules, and regulations of governmental authorities, including

without limitation, the Americans With Disabilities Act of 1990 (collectively

"Applicable Laws") regarding or applicable to the Premises, Building, Land and

common areas except to the extent Tenant must comply under paragraph 3.01(b).

Landlord's costs of complying with such laws may be billed back to Tenant

through CAM.

 

      3.01(b). Tenant's Compliance. Tenant shall comply with all Applicable Laws

(i) regarding the physical condition of the Premises, but only to the extent the

Applicable Laws pertain to the particular manner in which Tenant uses the

Premises and (ii) that do not relate to the physical condition of the Premises

but relate to the lawful use of the Premises and with which only the occupant

can comply, such as laws governing maximum occupancy, workplace smoking, and

illegal business operations, such as gambling.

 

      3.02. Services and Utilities.

 

      3.02(a). Services. Tenant shall provide at its expense, the following

services:

 

            (i)          Hot and cold water sufficient for drinking, lavatory,

                        toilet, and ordinary cleaning purposes to be drawn

 

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                        from fixtures in the Premises and/or on the floor on

                         which the Premises are located;

 

            (ii)         Electricity to the Premises that provides electric

                        current in reasonable amounts necessary for normal

                        office use, lighting, and HVAC;

 

             (iii)        Convenient restroom facilities as part of the common

                        areas of the Building for use of Tenant, its employees,

                        invitees and customers; and

 

            (iv)         Operation and maintenance of the common areas (including

                        without limitation, the restrooms) in good order and

                        repair and in a clean and neat condition. Such operation

                        and maintenance shall include, without limitation,

                        cleaning, HVAC, illumination, snow shoveling, deicing,

                        repairs, replacements, lawn care, and landscaping, if

                        applicable.

 

      3.02(b). 24 Hour Access. Tenant, its employees, agents, and invitees shall

have access to the Premises twenty-four (24) hours a day, seven (7) days a week.

Landlord may temporarily close the Building only if required because of a

life-threatening situation or Building-threatening situation. Landlord shall use

its best efforts to close the Building during Tenant's nonbusiness hours only.

 

      3.03   Repairs and Maintenance.

 

      3.03(a). Tenant's Care of Premises. Tenant agrees that it shall, at its

own cost and expense, make all repairs of whatever kind and nature, foreseen or

unforeseen, as may be required to keep the Premises and fixtures thereon in good

condition and repair. Without limiting the generality of the foregoing, Tenant

shall be responsible for all exterior repairs, including walls, roof, parking

area, driveways and landscaping, and shall further be solely responsible to keep

the whole and every part of the interior of the Premises and all property and

improvements situated therein in good repair, including without limitation all

plumbing, heating and electrical installations and equipment, air conditioning

equipment, hardware, doors and windows, plateglass, interior painting and

decorating. In the event any repairs are covered by insurance, the same are to

be paid for by the insurance proceeds aforesaid. Notwithstanding the above,

Landlord shall be responsible for the repairs noted on the attached Exhibit B up

to the. dollar amount shown thereon.

 

      3.03(b). Landlord's Repairs. If Tenant refuses and neglects to repair

promptly the Premises as required in paragraph 3.03(a) hereof, in a reasonable

time after written demand by Landlord, then Landlord may make such repairs

without liability to Tenant for any loss or damage that may occur to Tenant's

merchandise, fixtures and/or other property, or to the loss of

 

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business occasioned by reason thereof, and Tenant shall reimburse Landlord for

the cost thereof on demand.

 

      3.03(c). Time for Repairs. Repairs or replacements required under

paragraphs 3.03(a) or 3.03(b) shall be made within a reasonable time (depending

on the nature of the repair or replacement needed) after receiving notice or

having actual knowledge of the need for a repair or replacement.

 

                     SECTION 4 - NEGATIVE OBLIGATIONS

 

      4.01. Alterations.

 

      4.01(a). Consent. As used herein, the term "Alterations" means

alterations, additions, substitutions, installations, changes and improvements

to the Premises made after the Commencement Date, but excludes minor

decorations. Tenant shall not make structural Alterations without the Landlord's

prior written consent, which consent shall not be unreasonably withheld,

conditioned or delayed. Tenant may, however, make nonstructural Alterations to

the Premises without Landlord's consent, provided that such Alterations do not

adversely affect the Building's value or structural strength. Landlord may

condition its consent to structural Alterations on the requirement that Tenant

shall remove the Alterations and repair any damage caused by such removal on or

before the expiration or sooner termination of this Lease.

 

      4.01(b). Payment and Ownership of the Alterations. Alterations made under

this paragraph 4.01 shall be at Tenant's expense. All Alterations shall belong

to Landlord upon the expiration or sooner termination of this Lease, except for

those Alterations required to be removed by Tenant, if any, under paragraph

4.01(a). Notwithstanding the foregoing, Tenant may remove at any time its trade

fixtures, furniture, equipment, and other personal property if Tenant promptly

repairs any damage caused by their removal.

 

      4.02. Assignment and Subleasing.

 

      4.02(a). Consent Required. Tenant may assign this Lease or sublet all or

any part of the Premises for any lawful purpose provided that Landlord gives its

prior written consent to such assignment or subletting, which consent shall not

be unreasonably withheld, conditioned or delayed. Landlord's determination that

the proposed assignee or subtenant does not have the financial credibility equal

to or greater than Tenant or that the proposed assignee or subtenant's use is

not of a character or quality reasonably acceptable to Landlord, shall be a

reasonable basis for Landlord to withhold its consent.

 

      4.02(b). Consent Not Required. Notwithstanding the provisions of paragraph

4.02(a), Tenant shall have the right, without obtaining Landlord's consent, to

sublet all or any part of the Premises or to assign this Lease to (i) any

corporation, partnership, limited liability company, trust, association or

business organization directly or indirectly controlled by Westwood Computer

Corporation or any successor to Westwood Computer Corporation, (ii) any

corporation resulting from the consolidation or merger of Tenant into or with

any other entity or

 

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(iii) any person, firm, entity or corporation acquiring a majority of Tenant's

issued and outstanding stock or a substantial part of Tenant's physical assets.

 

       4.02(c). Conditions. Any sublease hereunder shall be subject and

subordinate to the terms and conditions of this Lease and shall not have a term

extending beyond the Term of this Lease. In the event of any assignment or

subleasing, Tenant shall remain liable for all tenant obligations under this

Lease. Landlord's consent to one sublease or assignment shall not be deemed a

waiver of the consent requirement for future assignments or subleases.

 

                    SECTION 5 - INSURANCE AND INDEMNIFICATION

 

       5.01. Insurance.

 

      5.01(a). Building Insurance. Tenant shall keep the Building insured

against damage and destruction by fire, vandalism, and other perils in the

amount of the full replacement value of the Building, as the value may exist

from time to time. The insurance shall include an extended coverage endorsement

of the kind required by an institutional lender to repair and restore the

Building.

 

      5.01(b). Property Insurance. Tenant shall keep its personal property and

trade fixtures in the Premises and Building insured with "all risks" insurance

in an amount to cover one hundred percent (100%) of the replacement cost of the

property and fixtures.

 

      5.01(c). Liability Insurance. Tenant shall maintain comprehensive

commercial general liability insurance, including public liability, premises and

operations, completed operations, broad form property damage, contractual

liability and personal injury coverages, with a minimum combined single limit of

liability of no less than five million dollars ($5,000,000.00) for bodily

injuries, deaths or property damage.

 

      5.01(d). Waiver of Subrogation. Each party waives claims arising in any

manner in its ("Injured Party's") favor and against the other party for loss or

damage to Injured Party's property located within or constituting a part or all

of the Building, but only to the extent the loss or damage is covered by the

greater of (i) the Injured Party's insurance or (ii) the insurance the Injured

Party is required to carry under this Section 5. This waiver also applies to

each party's directors, officers, employees, shareholders, and agents. This

waiver does not apply to claims caused by a party's willful misconduct.

 

      5.01(e). Insurance Criteria. Insurance policies required by this Lease

shall (i) be issued by responsible insurance companies licensed to do business

in the state of New Jersey and reasonably acceptable to the nonprocuring party,

(ii) name the nonprocuring party as an additional insured as its interest may

appear, (iii) provide that the insurance not be canceled or materially changed

in the scope or amount of coverage unless thirty (30) days' advance notice is

given to the nonprocuring party, (iv) be primary policies and not as

contributing with, or in excess of, the coverage that the other party may carry,

(v) be permitted to be carried through a "blanket policy" or "umbrella" coverage

and (vi) be maintained during the entire Term and any extensions thereof.

 

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      5.01(f). Evidence of Insurance. By the Commencement Date and upon each

renewal of its insurance policies, Tenant shall give certificates of insurance

to the other party. The certificate shall specify amounts, types of coverage,

the waiver of subrogation, and the insurance criteria listed in paragraph

5.01(e). The policies shall be renewed or replaced and maintained by the party

responsible for that policy. If Tenant fails to give the required certificate

within thirty (30) days after notice of demand for it, the Landlord may obtain

and pay for that insurance and receive reimbursement from Tenant.

 

      5.02. Indemnification.

 

      5.02(a). Tenant's Indemnity. Tenant hereby indemnifies, defends and holds

Landlord harmless from all claims, liabilities, obligations, damages, penalties,

costs and expenses (including reasonable attorneys' fees and disbursements)

(collectively, "Claims") for personal injury, death, or property damage

occurring in or about the Premises or Building caused by or arising out of the

negligence or willful misconduct of Tenant, its agents, employees, or invitees.

When a Claim is caused by th