Table of Contents

 

	Page
ARTICLE 1 RENT	4
ARTICLE 2 TERM	5
ARTICLE 3 ADDITIONAL RENT	8
ARTICLE 4 ELECTRICITY	24
ARTICLE 5 USE	27
ARTICLE 6 ALTERATIONS AND INSTALLATIONS	27
ARTICLE 7 REPAIRS	32
ARTICLE 8 REQUIREMENTS OF LAW, HAZARDOUS MATERIALS	33
ARTICLE 9 INSURANCE, LOSS, REIMBURSEMENT, LIABILITY	36
ARTICLE 10 DAMAGE BY FIRE OR OTHER CAUSE	39
ARTICLE 11 ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.	40
ARTICLE 12 CERTIFICATE OF OCCUPANCY	48
ARTICLE 13 ADJACENT EXCAVATION - SHORING	48
ARTICLE 14 CONDEMNATION	48
ARTICLE 15 ACCESS TO DEMISED PREMISES; CHANGES	50
ARTICLE 16 CONDITIONS OF LIMITATION	51
ARTICLE 17 RE-ENTRY BY LANDLORD, INJUNCTION	53
ARTICLE 18 DAMAGES	54
ARTICLE 19 LANDLORD’S RIGHT TO PERFORM TENANT’S OBLIGATIONS	55
ARTICLE 20 QUIET ENJOYMENT	55
ARTICLE 21 SERVICES AND EQUIPMENT	56
ARTICLE 22 DEFINITIONS	60
ARTICLE 23 INVALIDITY OF ANY PROVISION	61
ARTICLE 24 BROKERAGE	61

 

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Table of Contents

 

	Page
ARTICLE 25 SUBORDINATION	61
ARTICLE 26 CERTIFICATE OF TENANT	63
ARTICLE 27 LEGAL PROCEEDINGS, WAIVER OF JURY TRIAL, WAIVER OF TERMINATION RIGHTS	64
ARTICLE 28 SURRENDER OF PREMISES	64
ARTICLE 29 RULES AND REGULATIONS	65
ARTICLE 30 CONSENTS AND APPROVALS	66
ARTICLE 31 NOTICES	67
ARTICLE 32 NO WAIVER	67
ARTICLE 33 CAPTIONS	68
ARTICLE 34 INABILITY TO PERFORM	68
ARTICLE 35 NO REPRESENTATIONS BY LANDLORD	68
ARTICLE 36 NAME OF COMPLEX/BUILDING	69
ARTICLE 37 PARKING	69
ARTICLE 38 INDEMNITY	70
ARTICLE 39 MEMORANDUM OF LEASE	71
ARTICLE 40 SECURITY DEPOSIT	71
ARTICLE 41 MISCELLANEOUS	73
ARTICLE 42 2 nd  FLOOR EXPANSION OPTION	75
ARTICLE 43 SIGNAGE	78
ARTICLE 44 TENANT ALLOWANCE	78
ARTICLE 45 OPTION TO RENEW	79
ARTICLE 46 RIGHT OF FIRST OFFER	81
ARTICLE 47 ANTENNA	84
ARTICLE 48 6 TH  FLOOR EXPANSION OPTION	86

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SCHEDULES

 

A-1		- The Land
A-2		- The Complex Land
B		- Floor Plan
C		- Tenant’s Initial Work and Alterations
D		- HVAC Specifications
E		- Cleaning and Janitorial Services
F		- Form of Estoppel Certificate
G		- Rules and Regulations
H		- Commencement Date Agreement
I		- 2 nd  Floor Expansion Space
J		- 6 th  Floor Expansion Space
K		- 4 th  Floor Offer Space
L		- Core Restroom Specifications
M		- Location of Dedicated Elevator

 

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REFERENCE PAGE

 

This Reference Page is incorporated in and constitutes an integral part of this Lease.  In addition to the other terms elsewhere defined in this Lease, the following terms wherever used in this Lease shall have the meanings set forth in this Reference Page.

 

(a)	Notices to Landlord		M-C Plaza II & III L.L.C.
			c/o Mack-Cali Realty Corporation
			343 Thornall Street
			8 th  Floor
			Edison, New Jersey 08837-2206
			Attention: Mitchell E. Hersh
			President and Chief Executive Officer
			with a simultaneous copy to:
			M-C Plaza II & III L.L.C.
			343 Thornall Street
			8 th  Floor
			Edison, New Jersey 08837-2206
			Attention: Roger W. Thomas, Esq.
			Executive Vice President, General Counsel and Secretary
(b)	Notices to Tenant		Prior to Commencement Date
			Arch Insurance Company
			One Liberty Plaza
			New York, New York 10006
			Attention: Vice President, Corporate Administrative Services
			After Commencement Date
			Arch Insurance Company
			Harborside Financial Center, Plaza III, 3 rd  Floor
			Jersey City, New Jersey 07311
			Attention: Vice President, Corporate Administrative Services
			with a simultaneous copy to
			Arch Insurance Company
			Harborside Financial Center, Plaza III
			Jersey City, New Jersey 07311
			Attention: General Counsel

 

 

(c)	Rentable Square Feet of Demised Premises		For all purposes of this Lease, shall be deemed to be 106,815 gross rentable square feet on the third floor.
(d)	Demised Premises (“demised premises”)		The entire third floor in Plaza III shown hatched on the plan annexed hereto as Schedule B .
(e)	Commencement Date		the date on which Landlord delivers vacant possession of the demised premises to Tenant, which shall be the date of the execution and delivery of this Lease by Landlord and Tenant.
(f)	Rent Commencement Date		the date that is ten months after the Commencement Date.
(g)	Expiration Date		the last day of the month in which the day before the fifteenth anniversary of the Rent Commencement Date occurs.
(h)	Basic Annual Rent

 

Period		Basic Annual Rent			Monthly Rent			Basic Annual Per Rentable Square Foot Rent
Rent Commencement Date through the last day of the month in which the fifth anniversairy of the Rent Commencement Date occurs		$	3,685,117.50		$	307,093.13		$	34.50
First day of the month following the month in which the fifth anniversary of the Rent Commencement Date occurs through the last day of the month in which the tenth anniversary of the Rent Commencement Date occurs		$	4,005,562.50		$	333,796.88		$	37.50
First day of the month following the month in which the tenth anniversary of the Rent Commencement Date occurs through the Expiration Date		$	4,326,007.50		$	360,500.63		$	40.50

 

(i)	Common Area Tax Share		3.48%.
(j)	Tenant’s Tax Share		7.24%

 

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(k)	Base Tax Year		The calendar year 2009.
(l)	Tenant’s Expense Share		7.24%
(m)	Common Area Expense Share		3.48%
(n)	Base Operating Year		The calendar year 2009.
(o)	Broker(s)		CB Richard Ellis, Inc.
(p)	Tenant’s Parking Spaces		64 ( i.e. , .6 Parking Spaces per 1,000 gross rentable square feet). At Tenant’s option, the number of Tenant’s Parking Spaces may be irrevocably decreased for the balance of the Term upon notice by Tenant to Landlord given by July 1, 2009, designating the number of Tenant’s Parking Spaces Tenant no longer wishes to have made available.
(q)	Security Deposit		Upon the occurrence of (i) an Affiliate Free Rent Period Assignment (as hereinafter defined) and/or (ii) the Security Deposit Condition (as hereinafter defined), Tenant shall deliver the Security Deposit in the amount(s) described in Section 11.02(b)  and/or Article 40 .
(r)	Initial Premises Allowance		$5,127,120.00.
(s)	Renewal Term		One term of five (5) years.

 

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payment dates are hereinafter provided.  Landlord shall have the same rights and remedies (including, without limitation, the right to commence a summary dispossess proceeding) for a default in the payment of additional rent as for a default in the payment of basic annual rent notwithstanding the fact that Tenant may not then also be in default in the payment of basic annual rent.

 

1.03                            (a)                                   If Tenant shall fail to pay within five days after the due date any installment of basic annual rent or any payment of additional rent, then Tenant shall pay Landlord, as additional rent, a late charge equal to three (3%) percent of such installment or payment as compensation for Landlord’s additional administrative expenses relating to such late payment.  Notwithstanding the foregoing, in the first instance only during each consecutive twelve month period during the Term (but not more than five times during the Term), the late charge payable under this Section 1.03(a)  shall not be payable unless and until ten (10) days has elapsed after Landlord notifies Tenant that such payment is late.

 

(b)                                  If Tenant shall fail to pay within ten days after the due date any installment of basic annual rent or any payment of additional rent, Tenant shall pay in addition to the late charge provided in said paragraph (a) interest on all such amounts (including the late charge) at the Interest Rate (as said term is defined in Article 22 hereof), from the date when such installment or payment shall have become due to the date of payment thereof, and such interest shall be deemed additional rent.

 

(c)                                   The provisions of this Section 1.03 are in addition to all other remedies available to Landlord for nonpayment of basic annual rent or additional rent.

 

ARTICLE 2

 

TERM

 

 

2.01                            Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, on the terms hereinafter set forth, the demised premises, for a term (the “ Term ”) commencing on the Commencement Date and ending on the Expiration Date, unless the Term shall sooner cease and terminate as hereinafter provided.

 

2.02                            (a)                                   Landlord shall perform Landlord’s Work (as defined below), in accordance with the provisions of this Section 2.02 .  Tenant shall not interfere with the performance of Landlord’s Work by Landlord, its employees, agents, contractors, subcontractors and suppliers and Tenant at all times shall fully and freely cooperate with Landlord, its employees, agents, contractors, subcontractors and suppliers in connection with the performance of Landlord’s Work.  All installations, materials and work which may be undertaken by Tenant to prepare, equip, decorate and furnish the demised premises for Tenant’s use or occupancy (collectively, “ Tenant’s Initial Work ”) shall be performed by Tenant, at Tenant’s expense (but subject to Article 44 ), in accordance with Article 6 and Schedule C .

 

(b)                                  Landlord, at its expense and in accordance with the last sentence of Section 8.01 of this Lease, has performed or shall perform the following work in the demised premises (“ Landlord’s Work ”):

 

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(i)                                      remove the two internal staircases in the demised premises and seal the slabs connecting the two internal staircases with the contiguous floor of the Building (the “ Staircase Work ”);

 

(ii)                                   using Building-standard materials, refurbish the existing core restrooms in the demised premises in accordance with the plans and specifications annexed to this Lease as Schedule L ;

 

(iii)                                deliver all Building systems, including the Building sprinkler system and the Building HVAC system in good working order;

 

(iv)                               deliver the HVAC main trunk line with smoke dampers tied into the Building life safety system; and

 

(v)                                  provide a point of connection in a location designated by Landlord to the Building fire alarm system.

 

Tenant acknowledges that Landlord shall be performing Landlord’s Work after the Commencement Date simultaneously with the performance by Tenant of Tenant’s Initial Work and Tenant shall provide Landlord access to the demised premises at all reasonable times to perform Landlord’s Work without the same constituting a constructive eviction and without any abatement of rent or other liability to Tenant.  Landlord and Tenant shall cooperate and shall cause its contractors to cooperate, with each other during the performance of Landlord’s Work and Tenant’s Initial Work so that neither Landlord nor Tenant shall be delayed in the performance of its respective work.

 

(c)                                   Except as otherwise expressly provided herein, if for any reason Landlord shall be unable to deliver to Tenant possession of the demised premises or any other space leased by Tenant pursuant to this Lease on any date specified in this Lease for such delivery, Landlord shall have no liability to Tenant therefor and the validity of this Lease shall not be impaired by reason thereof.  This Section 2.02(c)  shall be an express provision to the contrary for purposes of any applicable Legal Requirement (as hereinafter defined) now or hereafter in effect.

 

2.03                            (a)                                   For the purposes of this Lease, the terms “ Substantially Complete ”, “ Substantial Completion ” or “ Substantially Completed ” shall mean that, with the exception of minor or insubstantial details of construction, mechanical adjustment, finishing touches or decoration which do not materially interfere with Tenant’s ability to commence the performance of Tenant’s Initial Work, or items of work which, in accordance with good construction practices, should not be completed until some element of Tenant’s Initial Work has been performed (collectively, “ Punch-List Items ”), Landlord’s Work shall have been completed.

 

(b)                                  Promptly following Landlord’s completion of Landlord’s Work, Landlord and Tenant shall set a mutually convenient time for Tenant, Landlord and the parties’ architects to inspect Landlord’s Work.  Landlord shall use commercially reasonable efforts to commence the performance of Punch-list Items (if any) revealed by such inspection with respect to Landlord’s Work as soon as reasonably practicable and shall proceed with reasonable diligence in the completion thereof.

 

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(c)                                   Notwithstanding anything contained in this Article 2 to the contrary, if Landlord shall not have Substantially Completed the Staircase Work on or before the date which is 30 days after the full execution and delivery of this Lease by Landlord and Tenant (the “ Finish Date ”) and Landlord shall not have been delayed in Substantially Completing the Staircase Work by an act or omission of Tenant or its agents or contractors, then Tenant, as its sole and exclusive remedy for such delay, shall be reimbursed for all reasonable, out-of-pocket incremental costs and expenses, including, without limitation, any overtime payments to its agents or contractors, incurred by Tenant in connection with its work in the immediate area of the demised premises where the Staircase Work has been performed, resulting from Landlord’s delay in the Substantial Completion of the Staircase Work.  Tenant shall use reasonable efforts to modify its work schedule to minimize such costs and expenses.  In addition, Tenant and Landlord shall meet at the demised premises on or about November 3, 2008 to review Landlord’s progress on items (ii) and (iii) of Landlord’s Work in Section 2.02(b)  above and if the parties in their reasonable judgment believe that Landlord will be unable to have Substantially Completed items (ii) and (iii) of Landlord’s Work by the date which is five (5) months after the full execution and delivery of this Lease by Landlord and Tenant, and provided such failure to Substantially Complete item (ii) of Landlord’s Work precludes Tenant from passing final inspection and/or later obtaining a certificate of occupancy (temporary or final) and Landlord shall have not been delayed in Substantially Completing items (ii) and (iii) of Landlord’s Work by an act or omission of Tenant or its agents or contractors, and Landlord would have Substantially Completed Landlord’s Work had it not been for such act or omission by Tenant or its agents or contractors, Tenant may elect, from and after said meeting, to obtain temporary space pursuant to the license agreement between American Institute of Certified Public Accountants (“ AICPA ”) and Tenant for temporary space on the second floor of the Building.  In such case, Tenant shall be granted a credit for the license fee actually paid thereunder not to exceed $95,285.42 per month ($25 per rentable square foot) if Tenant is permitted to license and occupies 45,737 rentable square feet and $126,275 per month ($25 per rentable square foot) if Tenant is permitted to license and occupies 60,612 rentable square feet, from the commencement date of such license until the date such license agreement has expired (but in no event later than May 31, 2009), and Tenant’s reasonable occupancy costs of such temporary space, not to exceed $10 per rentable square foot (taking into account any reduction in the actual square footage covered by the license agreement if Tenant exercises the 2 nd  Floor Expansion Option).  Notwithstanding the foregoing, if Tenant exercises the 2 nd  Floor Expansion Option pursuant to Article 42 , then Landlord’s monthly reimbursement obligation shall be reduced by the amount of $64,660.42 per month.  The aforementioned rent credit shall be Tenant’s sole and exclusive remedy for such delay, and such amount shall be applied to the first monthly installments of basic annual rent accruing under this Lease after the Rent Commencement Date.

 

2.04                            Landlord may submit to Tenant a written agreement, substantially in the form annexed as Schedule H , confirming the date fixed by Landlord, in accordance with the provisions of this Lease, as the Commencement Date, the Rent Commencement Date and the Expiration Date and Tenant shall execute such agreement and return it to Landlord within fifteen (15) calendar days thereafter.  Any failure of the parties to execute such written agreement shall not affect the validity of the Commencement Date, the Rent Commencement Date or the Expiration Date as fixed and determined by Landlord as aforesaid.

 

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ARTICLE 3

 

ADDITIONAL RENT

 

3.01                            A.                                    For purposes hereof, the following definitions shall apply:

 

(a)                                   The term “ Tax Year ” shall mean each period of twelve months which includes any part of the period commencing on the date hereof and ending upon the expiration of the Term which now or hereafter is or may be duly adopted as the fiscal year for real estate tax purposes for Jersey City, New Jersey.

 

(b)                                  The term “ Taxes ” shall mean the aggregate amount of real estate taxes and any general or special assessments (exclusive of penalties and interest thereon) imposed upon the Property (including, without limitation, (i) assessments made upon or with respect to any “air” and “development” rights now or hereafter appurtenant to or affecting the Property, and (ii) any assessments levied after the date of this Lease for public benefits to the Property or the Building or Plaza II (any assessments if payable in installments or which may be payable in installments at Landlord’s election, shall be deemed payable in the maximum permissible number of installments). With respect to any Tax Year, all reasonable expenses and fees, including attorneys’ fees and disbursements and experts’ and other witnesses’ fees, incurred in contesting the validity or amount of any Taxes or in obtaining a refund of Taxes shall be considered as part of the Taxes for such Tax Year.  Except as set forth above, and except as provided in the following sentence with respect to changes in the method of taxation or in the taxing authority, the term “Taxes” shall not include any income, franchise, transfer, inheritance, capital stock, estate, profit or succession tax levied against Landlord, or any transfer taxes or any late payment charges or penalties (unless Tenant shall have failed to timely make any corresponding payment on account of Taxes payable by Tenant under this Lease).  If due to a future change in the method of taxation or in the taxing authority, (x) a new or additional real estate tax or (y) a new income, franchise, transfer, inheritance, capital stock, estate, profit or succession tax or other tax or governmental imposition, however designated, shall be levied against Landlord and/or the Property, in addition to or in substitution in whole or in part for any tax which would constitute Taxes, or in lieu of additional Taxes, such tax or imposition shall be deemed for the purposes hereof to be included within the term “Taxes” (provided that any such tax described in this clause (y) shall be computed as if Landlord’s sole asset were the Land and the Building).  Landlord represents that, as of the date of this Lease, there is no municipal abatement affecting Taxes.

 

(c)                                   (i)                                      The term “ Building Taxes” shall mean the Taxes on the Building and Plaza II and the Land including all sidewalks, plazas and streets adjacent to such building, and all replacements thereof, and constituting a part of the same tax lot or lots.

 

(ii)                                   The term “ Existing Building Taxes ” shall mean the Taxes on the Existing Buildings and the land on which such buildings are located including all sidewalks, plazas, streets and land adjacent to such buildings, and all replacements thereof, and constituting a part of the same tax lot or lots.

 

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(d)                                  The term “ Common Area Taxes ” shall mean (x) all Taxes allocable to the Property plus (y) any reasonable appraisal fees incurred and paid by Landlord pursuant to any agreements as may be in effect from time to time affecting all or part of the Property and relating in whole or in part to the payment of Common Area Taxes and/or Common Area Operating Expenses (as defined in Section 3.02(A)(c) ) (collectively, “ Reciprocal Agreements ”) or pursuant to this Lease, excluding, however, the following items of Taxes:

 

(i)                                      all Taxes included in Existing Building Taxes and Building Taxes; provided, that all Taxes included in Existing Building Taxes allocated to the parking structure in Plaza IV-A and Plaza V (and an equitable allocation of the land under Plaza IV-A and Plaza V) shall be included within Common Area Taxes, such allocation to be made on the basis set forth in the balance of this paragraph (d);

 

(ii)                                   all Taxes payable with respect to any portion of the Property that is hereafter conveyed to a third party (other than to an entity which controls, is under common control with or under the control of Landlord (“ control ” meaning the direct or indirect ownership of 50% or more of the outstanding voting stock in a corporation or equivalent ownership interest in a non-corporate entity) (a “ Landlord Affiliated Entity ”)), except, however, that if any portion of the Property so conveyed constitutes a parking structure, and if Landlord both retains the right to use all or a portion of the parking spaces within such structure for tenants of the Complex and pays all or a portion of the Taxes allocable to such conveyed parking structure, then such Taxes so payable by Landlord with respect to such conveyed parking structure shall be included in Common Area Taxes;

 

(iii)                                all Taxes imposed or assessed against any buildings or structures constructed on any portion of the Complex (other than the Building, Plaza II and the Existing Buildings) against the portion of the Complex Land on which such buildings or structures are located, and against such areas of the Property adjacent thereto which become unavailable for the general use of the tenants of the Complex (such exclusion to become effective from and after the time, if any, after the date hereof, that such buildings or structures become unavailable for the general use of the tenants of the Complex).  At such time during or following construction of any such building or structure when a portion of the Complex Land (and/or any buildings or structures constructed thereon), the Taxes allocable to which had been excluded from Common Area Taxes as of the Commencement of Construction, again becomes available for the general use of tenants of the Complex (or to a certain tenant or tenants of the Complex for use as a so-called “ Limited Common Area” (a Common Area subject to certain additional restrictions as to use imposed by Landlord, but which restrictions do not generally prohibit the use thereof by other tenants of the Complex, and which for purposes of this Article 3 shall nonetheless be deemed to be “available for the general use of tenants of the Complex”), the Taxes allocable to such portion of the Complex Land (and to any improvements thereon similarly available for the general use of tenants of the Complex) shall again be included in Common Area Taxes.

 

If any item of Taxes (or allocable portion thereof) which pursuant to this paragraph (d) is to be included in, or excluded from, Common Area Taxes is not wholly within a separate tax lot,

 

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then the amount of such item of Taxes (or allocable portion thereof) to be so included in or excluded from Common Area Taxes shall be (x) with respect to the land, in the same proportion which the square footage of the land to be so included or excluded bears to the square footage of the entire tax lot in which such land is located, and (y) with respect to buildings or structures, be included or excluded, as applicable, in the same proportion which the current appraised value of the buildings or structures to be so included or excluded bears to the current appraised value of all of the buildings or structures included within the tax lot of which the footprint of land in question is a part.  All appraisals hereunder shall be determined by an appraiser selected and paid for by Landlord, who shall be a member in good standing of the American Institute of Real Estate Appraisers and shall have at least ten (10) years experience appraising major office buildings in northern New Jersey and/or in the Borough of Manhattan, City, County and State of New York.  The fees and expenses of any such appraiser shall be deemed a part of Common Area Taxes.

 

(e)                                   The term “ Common Area Tax Share ” shall mean the share of Common Area Taxes allocated to the demised premises, as such share is determined from time to time as hereinafter set forth.  The Common Area Tax Share shall be determined as of the first day of each calendar year (each, a “ Tax Share Determination Date ”) and shall be equal to a fraction (expressed as a percentage), the numerator of which shall be the aggregate square footage contained in the demised premises as of the applicable Tax Share Determination Date, and the denominator of which shall be the aggregate square footage contained in the Building, Plaza II and the Existing Buildings as of the applicable Tax Share Determination Date.  If, at any time hereafter, there is constructed on any portion of the Complex Land any new buildings, and in any of such cases, the tenants or occupants thereof are permitted generally by Landlord to use the Common Areas (as defined in Section 22.05 below), then the Common Area Tax Share shall be modified to include in the denominator thereof, in addition to the aggregate square footage contained in the Building, Plaza II and the Existing Buildings as of the applicable Tax Share Determination Date, that portion of the square footage contained in each such new building which either (i) on the applicable Tax Share Determination Date is subject to a lease (other than a so-called “master lease” to a Landlord Affiliated Entity in which event the terms hereof shall apply to any subtenant of such master lessee) and the lessee under such lease is occupying the premises demised thereunder and has begun making payments of base rent thereunder, or (ii) at any time prior to the applicable Tax Share Determination Date was subject to a lease described in clause (i) above, or (iii) in the case of a residential condominium development, was sold for the first time to an owner-occupier which is not a Landlord Affiliated Entity.  Without limiting the provisions of clause (ii) above, in no event shall the denominator of the Common Area Tax Share ever be reduced by reason that any space which was subject to a lease described in clause (i) above is no longer subject to such a lease.  If, at any time hereafter, any of the Existing Buildings included in the Common Areas is conveyed to a third party (other than to a Landlord Affiliated Entity) (any Existing Building included in the Common Areas which is so conveyed is called a “ Conveyed Plaza ”), then from and after the Tax Share Determination Date next succeeding such conveyance, the Common Area Tax Share shall be modified to exclude from the denominator thereof the square footage contained in such Conveyed Plaza, provided that if after the date of such conveyance the tenants or occupants of such Conveyed Plaza are permitted generally by Landlord to use the Common Areas, then the foregoing exclusion shall not apply and the square footage contained in such Conveyed Plaza shall continue to be included in the denominator of the Common Area Tax Share.  If at any time hereafter any building located on

 

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the Complex Land, the square footage of which is then included in the denominator of the Common Area Tax Share, shall be conveyed to a third party (other than to a Landlord Affiliated Entity), and if after such conveyance the tenants or occupants of such building are no longer permitted generally to use the Common Areas, then from and after the next succeeding Tax Share Determination Date, the Common Area Tax Share shall be modified by excluding from the denominator thereof the square footage contained in such conveyed building.  Landlord and Tenant agree that as of the date of this Lease, Plaza I contains 401,179 square feet, Plaza II contains 726,078 square feet, the Building contains 750,000 square feet, Plaza IV-A contains 210,000 square feet and Plaza V contains 980,000 square feet.  The square footage of any other building located on the Complex Land shall be determined hereinafter in the same manner as the determination of square footage reflected in the immediately preceding sentence.

 

(f)                                     The term “ Tenant’s Tax Share ” shall mean the percentage resulting from dividing the number of square feet from time to time included in the demised premises and with respect to which Tenant is obligated to make Tenant’s Tax Payments pursuant to Section 3.01(B)  by the aggregate number of square feet in the Building and Plaza II, which the parties agree shall be 1,476,078 square feet as of the date of this Lease.  If at any time after the date of this Lease square footage of office, retail or other commercial space (exclusive of storage space that is an adjunct to such space) shall be added to or subtracted from the Building or Plaza II, Tenant’s Tax Share shall be equitably adjusted so that Tenant pays its proportionate share of Building Taxes in the same proportion which the square feet from time to time included in the demised premises as set forth herein bears to the total area of office, retail or other commercial space (exclusive of such storage space) in the improvements as to which such Building and Plaza II Taxes relate, using the same standard of measurement to compute the area of the new or additional space or the subtracted space as that used to compute the area of the demised premises for purposes of this Lease.  In the event of such adjustment, Landlord and Tenant shall, at either party’s request, execute an instrument confirming such adjustment and making the appropriate change in Tenant’s Tax Share, but no such instrument shall be necessary to make the same effective.

 

(g)                                  Tenant acknowledges that Landlord may transfer legal ownership of portions of the Property to Landlord Affiliated Entities for purposes of obtaining tax abatements for the Property, for income tax planning purposes or otherwise, and neither the definition of Common Area Taxes, nor of Common Area Tax Share, nor of Building Taxes, nor of Tenant’s Tax Share shall be affected by reason of any such transfers to affiliated entities; all of which shall be deemed for purposes hereof to continue to be owned by Landlord.

 

(h)                                  If Landlord (or any Landlord Affiliated Entity) shall acquire any additional land in the immediate vicinity of the Complex (each, an “ Additional Parcel ”), then, at Landlord’s election, exercisable by written notice to Tenant, (A) the Taxes allocable to such Additional Parcel (or the portion thereof to be used as Common Areas) shall be included in Common Area Taxes in accordance with paragraph (d) above to the extent applicable when such Additional Parcel shall be available for the general use of the tenants of the Complex, (B) the square footage of any buildings then or thereafter constructed on such Additional Parcel, the tenants or occupants of which are permitted generally to use the Common Areas, shall, as of the applicable Tax Share Determination Date, be added to the denominator of the Common Area Tax Share for purposes of calculating the Common Area Tax Share in accordance with paragraph (e) above, using the same standard of measurement to compute the area of the new or

 

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additional buildings as that used to compute the area of the demised premises for purposes of this Lease, (C) such Additional Parcel shall thereafter be deemed a part of the Complex Land for all purposes of this Lease and (D) the Common Area Taxes for the Base Tax Year shall be equitably increased to reflect the inclusion of the Taxes for the Additional Parcel in Common Area Taxes.

 

(i)                                      The term “ Escalation Statement ” shall mean a statement setting forth the amount payable by Tenant for a specified Tax Year or Operating Year (as defined in Section 3.02 ), as the case may be, or for some portion thereof pursuant to this Article 3 .

 

B.                                      Tenant shall pay to Landlord as additional rent for each Tax Year or partial Tax Year an amount equal to the sum of the following:  (a) Tenant’s Tax Share of the excess of the Building Taxes for such Tax Year over the Building Taxes for the Base Tax Year and (b) the Common Area Tax Share of the excess of the Common Area Taxes for such Tax Year over the Common Area Taxes for the Base Tax Year (collectively, “ Tenant’s Tax Payment ”).  Landlord shall furnish Tenant an annual Escalation Statement (subject to revision as hereinafter provided) for each Tax Year setting forth Tenant’s Tax Payment (or, if Landlord has not yet received bills evidencing the full amount of Taxes payable during such Tax Year, Landlord’s good faith estimate of Tenant’s Tax Payment, which shall for all purposes hereof be deemed to be the Taxes for such Tax Year payable hereunder until such Taxes are finally determined) for such Tax Year.  The Escalation Statement shall be accompanied by a copy of the applicable Tax bill and, with respect to the first Tax Year following the Base Tax Year, with a copy of the Tax bill for the Base Tax Year.  Tenant’s Tax Payment (determined as above provided) shall be payable monthly, each such installment to be in such amount and due at such time such that Landlord shall have received Tenant’s Tax Share of (i) all installments of Building Taxes and (ii) all installments of Common Area Taxes payable, in either case, to a Governmental Authority, or to any designated party under any applicable Reciprocal Agreements (a “ Responsible Party ”), or as tax escrow payments to any superior ground lessor or mortgagee, not less than thirty (30) days prior to the date such installment of Building Taxes or Common Area Taxes is payable to such Governmental Authority, Responsible Party or superior ground lessor or mortgagee, as applicable.  If an annual Escalation Statement is furnished to Tenant after the commencement of the Tax Year to which it relates, then (x) until such Escalation Statement is rendered, Tenant shall pay Tenant’s Tax Payment for such Tax Year in installments based upon the last Escalation Statement rendered to Tenant with respect to Building Taxes and Common Area Taxes, (y) Tenant shall, within fifteen (15) Business Days after such annual Escalation Statement is furnished to Tenant, pay to Landlord an amount equal to any underpayment of the installments of Tenant’s Tax Payment theretofore paid by Tenant for such Tax Year and (z) thereafter Tenant shall pay Tenant’s Tax Payment in installments based on such annual Escalation Statement.  In the event of an overpayment by Tenant, Landlord shall permit Tenant to credit the amount of such overpayment against the next subsequent rental payments under this Lease.  After the termination of this Lease and the payment to Landlord of the balance, if any, of all basic annual rent and additional rent due hereunder, Landlord shall pay to Tenant the amount of any credit not previously applied by Tenant.  If there shall be any increase or decrease in Building Taxes or Common Area Taxes for any Tax Year, whether during or after such Tax Year, Landlord shall furnish a revised Escalation Statement for such Tax Year to Tenant, and Tenant’s Tax Payment for such Tax Year shall be adjusted and paid or credited, as appropriate, in the same manner as hereinabove provided.

 

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from the denominator thereof the square footage contained in such conveyed building.  Landlord and Tenant agree that as of the date of this Lease, Plaza I contains 401,179 square feet, Plaza II contains 726,078 square feet, the Building contains 750,000 square feet, Plaza IV-A contains 210,000 square feet and Plaza V contains 980,000 square feet.  The square footage of any other building located on the Complex Land shall be determined hereinafter in the same manner as the determination of square footage reflected in the immediately preceding sentence.

 

(d)                                  The term “ Common Area Operating Expenses ” shall mean the total of all costs and expenses (including taxes thereon, if any), computed on an accrual basis, incurred by Landlord in connection with operating, maintaining, repairing and replacing (in accordance with the provisions set forth below) the Common Areas, including, without limitation, the cost and expense of the following items to the extent they relate solely to or are reasonably allocable to the Common Areas (Tenant hereby acknowledging that it is not possible to make such allocation with mathematical certainty and that any such good faith allocation made by Landlord shall be binding upon Tenant):  gardening, landscaping, planting, replanting, and replacing flowers and shrubbery; public liability, property damage and fire insurance with such extended coverage and vandalism endorsements required by the holder of any mortgage covering all or any portion of the Common Areas or customarily carried with respect to mixed use office and retail projects similar to the Complex in northern New Jersey; repairs; painting and decorating; striping; the cost of electricity for lighting and maintenance and replacements of lighting fixtures, tubes and bulbs; regulating automobile and pedestrian traffic; sanitary control; removal of rubbish, garbage and other refuse; removal of snow and ice, and sanding and salting; security, which shall include special security undertakings for the common use and enjoyment of all tenants and owners of all or a portion of the Complex; actions to prevent unauthorized use of certain of the Common Areas; supplies used in the operation and maintenance of the Common Areas (including the cost of inspection thereof); drainage; music program services and loud speaker systems, including electricity therefor; heating, ventilating and air-conditioning enclosed sidewalks, if any; cleaning all enclosed sidewalks, if any, including carpeting or other floor covering; maintenance of decorations, if any; cost of personnel to implement all of the aforementioned (including worker’s compensation insurance covering such personnel); all administrative and overhead costs, excluding executive salaries above the grade of property manager; all water and sewer charges; outside contractor snow removal costs; and any other fees and expenses related solely to or which are reasonably allocable to the operation, maintenance and repair of the Common Areas; provided, however, that the foregoing costs and expenses shall exclude or have deducted from them, as the case may be, the following:

 

(i)                                      Taxes;

 

(ii)                                   interest, principal and refinancing and other charges on or with respect to indebtedness;

 

(iii)                                amounts received by Landlord through proceeds of insurance to the extent they are compensation for sums previously included in Common Area Operating Expenses hereunder;

 

(iv)                               costs of repairs, replacements or restoration incurred by reason of fire or other casualty or condemnation to the extent Landlord is compensated therefor by

 

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insurance proceeds (or would have been compensated therefor under the insurance policies Landlord has agreed to maintain under this Lease if Landlord fails to do so), or condemnation award;

 

(v)                                  advertising and promotional expenses;

 

(vi)                               leasing commissions and similar fees;

 

(vii)                            rent under any existing or future ground lease;

 

(viii)                         capital expenditures and depreciation, except that if any equipment is purchased for maintenance and operation of the Common Areas which is treated by Landlord as a capital item in accordance with generally accepted accounting principles (“ GAAP ”) and which (A) is a replacement when a repair cannot prudently be made (but only to the extent of Landlord’s reasonable estimate of the cost to repair such item had Landlord elected to repair rather than replace such item), (B) is necessary to comply with any Legal Requirement which is enacted after the date of this Lease or (C) has the effect of reducing expenses which would otherwise be included in Common Area Operating Expenses (but only to the extent of such savings), then such equipment shall be depreciated on a straight-line basis over the lesser of (i) the useful life of such equipment or (ii) ten (10) years, and there shall be included in Common Area Operating Expenses in each Operating Year the amount of such depreciation attributable to such Operating Year, provided, however, that all amounts thereof included in Common Area Operating Expenses in Operating Years subsequent to the year paid shall have added thereto interest at the Interest Rate (determined as of the date on which such expense was incurred) from the date each such expense was incurred by Landlord;

 

(ix)                                 as to salaries and other compensation and professional fees of persons employed or retained at or for the Common Areas and at additional locations other than the Common Areas, only a pro rata allocation (based on an equitable time allocation) of the foregoing expenses incurred on behalf of the Common Areas shall be included in Common Area Operating Expenses;

 

(x)                                    costs and expenses payable to a Landlord Affiliated Entity or its partners or stockholders to the extent that such costs and expenses exceed, in any material respect, competitive costs and expenses generally charged for materials or services rendered by persons or entities (other than any Landlord Affiliated Entity or its partners or stockholders) of similar skill, competence and experience;

 

(xi)                                 all costs and expenses included in Operating Expenses;

 

(xii)                              all costs and expenses allocable to any portion of the Common Areas that is hereafter conveyed to a third party (other than to a Landlord Affiliated Entity), except, however, that if any portion of the Common Areas so conveyed constitutes a parking structure, and if Landlord both retains the right to use all or a portion of the parking spaces within such structure for tenants of the Complex and pays all or a portion of the costs and expenses allocable to such conveyed parking structure

 

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then such costs and expenses payable by Landlord with respect to such conveyed parking structure shall be included in Common Area Operating Expenses;

 

(xiii)                           all costs and expenses allocable to any buildings or structures constructed on any portion of the Complex (other than the Building, Plaza II and the Existing Buildings) or allocable to any portions of the Common Areas adjacent thereto which become unavailable for the general use of the tenants of the Complex during the construction of such buildings or structures by reason of such construction (such exclusion to become effective from and after the time, if any, of Commencement of Construction (of such buildings or structures).  During construction of any such building or structure, as and when any portion of the land (and any improvements constructed thereon), the costs and expenses allocable to which had been excluded from Common Area Operating Expenses as of the Commencement of Construction, again becomes available for the general use of all tenants of the Complex, the costs and expenses allocable to such land (and to any improvements thereon similarly available for the general use of all tenants of the Complex including, without limitation, parking structures) shall again be included in Common Area Operating Expenses;

 

(xiv)                          amounts otherwise includible in Common Area Operating Expenses but reimbursed from other sources other than by escalation provisions similar to this Article 3 ;

 

(xv)                             costs paid or incurred in connection with the removal, replacement, enclosure, encapsulation or other treatment of any Hazardous Materials in the Building;

 

(xvi)                          costs incurred by Landlord to remedy a violation of a Legal Requirement in effect as of the date of this Lease;

 

(xvii)                       costs of acquiring sculptures, paintings or other permanent objects of art (as distinct from decorations) located in the Common Areas, except for the cost of routine maintenance of such objects of art;

 

(xviii)                    interest, fines or penalties payable by Landlord;

 

(xix)                            Landlord’s general corporate overhead and general administrative expenses not attributable in any way to the Common Areas;

 

(xx)                               Landlord’s political or charitable contributions; and

 

(xxi)                            any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord for profit.

 

If any of the costs and expenses which, pursuant to the terms of this paragraph (d), are to be included in or excluded from Common Area Operating Expenses depending upon the portion of the Property to which they relate, are incurred with respect to both such included and excluded portions of the Property, then Landlord shall make a good faith estimate of the amount of such cost or expense allocable to such included or excluded portion of the Property, and only the pro rata allocation (based on Landlord’s estimate) of such cost or expense incurred on behalf of the

 

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included portion of the Property shall be included in Common Area Operating Expenses.  Such allocation shall be binding on Landlord and Tenant.

 

(e)                                   The term “ Operating Expenses ” shall mean, subject to the provisions of paragraphs (f) and (g) below, the total of all costs and expenses (including taxes thereon, if any), computed on an accrual basis, incurred by Landlord in connection with operating, repairing and maintaining the Building and Plaza II in a manner customary for mixed use office/retail complexes in northern New Jersey similar to the Complex including, without limitation, the costs and expenses with respect to:  steam, gas and any other fuel or utilities; water rates (including without limitation, for public drinking facilities and bathrooms), water charges and sewer rents; operation of the heating, ventilation and cooling systems; electricity and other utilities for areas other than those leased or available for lease to individual tenants as indicated by meter, or if there be no meter, as determined by a reputable, independent electrical consultant selected by Landlord (“ Landlord’s electrical consultant ”); elevators and escalators; metal, elevator cab, lobby, interior mall and other interior public area maintenance and cleaning; painting and decoration of nontenant areas; window cleaning; sanitary control; security; maintenance and replacement of lighting fixtures, tubes and bulbs in nontenant areas; music program services and loud speaker system; depreciation of hand tools and other movable equipment used in the operation or maintenance of the Building and Plaza II; maintenance of conduits in the Building and Plaza II as necessary for shared tenant systems; flood, fire, extended coverage, boiler and machinery, sprinkler apparatus, public liability and property damage, loss of rental, fidelity and plate glass insurance and any other insurance required by the holder of any mortgage or ground lease covering all or any portion of the Building and Plaza II or customarily carried with respect to mixed use office/retail complexes in northern New Jersey similar to the Property; wages, salaries, bonuses, disability benefits, hospitalization, medical, surgical, dental, optical, psychiatric, legal, union and general welfare benefits (including group life insurance), any pension, retirement or life insurance plan and other benefit or similar expense respecting employees of Landlord (or its agents) up to and including the property manager, provided that to the extent that Landlord employs the services of any such persons at the Building  and Plaza II and at additional locations other than the Building and Plaza II, then only a pro rata allocation (based on an equitable time allocation) of the foregoing expenses incurred on behalf of the Building and Plaza II shall be included in Operating Expenses; uniforms and working clothes for such employees and the cleaning and replacement thereof; expenses imposed on Landlord pursuant to law or to any collective bargaining agreement with respect to such employees; worker’s compensation insurance, payroll, social security, unemployment and other similar taxes with respect to such employees; salaries of bookkeepers and accountants, provided that to the extent that Landlord employs the services of any such persons at the Building and Plaza II and at additional locations other than the Building and Plaza II, then only a pro rata allocation (based on an equitable time allocation) of the foregoing expenses incurred on behalf of the Building and Plaza II shall be included in Operating Expenses; reasonable professional and consulting fees, including legal and accounting fees; charges for independent contractors performing work included within the definition of Operating Expenses; association fees or dues; telephone and stationery; directory; building telephone; repairs, replacements and improvements of the electrical, mechanical, plumbing and HVAC systems and other systems and portions of the Building and Plaza II, which are necessary or appropriate for the continued operation of the Building in a manner customary for mixed use office/retail complexes in northern New Jersey similar to the Complex or are otherwise imposed upon Landlord by any Governmental

 

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Authority; and management fees for the management of the Building and Plaza II, or if no managing agent is employed by Landlord, a sum in lieu thereof which is not in excess of the then prevailing rates for outside management fees in Northern New Jersey for mixed use office/retail complexes similar to the Property.  There shall also be included in Operating Expenses (but only to the extent the same are not otherwise included therein) any items described in the definition of Common Area Operating Expenses which are performed to the exterior of the Building and Plaza II, but which, by reason of their relating to areas adjacent to the Building and Plaza II, are not included in Common Area Operating Expenses and are performed and paid for directly by the owner of the Building and Plaza II.  If any of the costs and expenses includible in Operating Expenses are incurred by Landlord with respect to both the Building and Plaza II, on the one hand, and other portions of the Property, on the other hand, then Landlord shall make a good faith estimate of the amount of such cost or expense allocable to the Building and Plaza II and the amount thereof allocable to such other portions of the Property, and only the pro rata allocation (based on Landlord’s estimate) of such cost or expense incurred on behalf of the Building and Plaza II shall be included in Operating Expenses.  It is understood and agreed that Landlord shall not be permitted to include the same item of expense in both Operating Expenses and Common Area Operating Expenses except to the extent such item of expense is allocated between them as expressly contemplated hereby.

 

(f)                                     Omitted.

 

(g)                                  The following shall be excluded or deducted from the costs and expenses otherwise included in Operating Expenses:

 

(i)                                      the cost of electricity and other utilities furnished to the demised premises and other space leased or available for lease to tenants as measured by meters, or if there be no meters, as determined by Landlord’s electrical consultant;

 

(ii)                                   leasing commissions and similar fees;

 

(iii)                                salaries, fringe benefits and other compensation for Landlord’s executives above the grade of property manager;

 

(iv)                               amounts received by Landlord through proceeds of insurance to the extent the proceeds are compensation for expenses which were previously included in Operating Expenses;

 

(v)                                  cost of repairs, replacements or restoration incurred by reason of fire or other casualty or condemnation to the extent Landlord is compensated therefor by insurance proceeds (or would have been compensated therefor under the insurance policies Landlord has agreed to maintain under this Lease if Landlord fails to do so) or a condemnation award;

 

(vi)                               advertising and promotional expenditures;

 

(vii)                            Taxes;

 

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(viii)                         costs for performing tenant installations for any individual tenant or for performing work or furnishing services (including above-standard cleaning) to or for individual tenants at such tenant’s expense and any other contribution by Landlord to the cost of tenant improvements;

 

(ix)                                 capital expenditures, except as provided above;

 

(x)                                    rent under any existing or future ground leases;

 

(xi)                                 financing and refinancing costs and mortgage debt service;

 

(xii)                              costs of furnishing services to other tenants or occupants to the extent such services are materially in excess of services Landlord offers to all tenants at Landlord’s expense;

 

(xiii)                           amounts otherwise includible in Operating Expenses but reimbursed directly by Tenant or other tenants to Landlord other than by escalation provisions similar to this Article 3 ;

 

(xiv)                          costs and expenses payable to any Landlord Affiliated Entity, to the extent that such costs and expenses exceed in any material respect competitive costs and expenses for materials and services by unrelated persons or entities (other than a Landlord Affiliated Entity or its partners or stockholders) of similar skill, competence and experience;

 

(xv)                             franchise, corporation, income, inheritance, succession or estate taxes (but not sales and use taxes) imposed on Landlord;

 

(xvi)                          all amounts included in Common Area Operating Expenses;

 

(xvii)                       depreciation, except that if any equipment is purchased for maintenance and operation of the Building and Plaza II which is treated by Landlord as a capital item in accordance with GAAP and which (A) is a replacement item when a repair cannot be prudently made (but only to the extent of Landlord’s reasonable estimate of the cost to repair such item had Landlord elected to repair rather than replace such item), or (B) is necessary to comply with any Legal Requirement which is enacted after the date of this Lease or (C) has the effect of reducing expenses which would otherwise be included in Operating Expenses (but only included to the extent of such savings), then such equipment shall be depreciated on a straight-line basis over the lesser of (i) the useful life of such equipment or (ii) ten (10) years, and there shall be included in Operating Expenses in each Operating Year the amount of such depreciation attributable to such Operating Year, provided, however, that all amounts thereof included in Operating Expenses in Operating Years subsequent to the year paid shall have added thereto interest at the Interest Rate (as defined in Section 22.03 ) (determined as of the date on which such expense was incurred) from the date each such expense was incurred by Landlord;

 

(xviii)                    lease takeover or takeback costs incurred by Landlord in connection with leases in the Building or Plaza II;

 

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(xix)                            legal fees, expenses and disbursements (including, without limitation, those incurred in connection with leasing, sales, financing or refinancing or disputes with other tenants), except such fees as are reasonably incurred in connection with the operation of the Property;

 

(xx)                               costs paid or incurred in connection with the removal, replacement, enclosure, encapsulation or other treatment of any Hazardous Materials in the Building or Plaza II;

 

(xxi)                            costs incurred by Landlord to remedy a violation of a Legal Requirement in effect as of the date of this Lease;

 

(xxii)                         costs of acquiring sculptures, paintings and other permanent objects of art (as distinct from decorations) located in the Building or Plaza II, except for the costs of routine maintenance of such objects of art;

 

(xxiii)                      interest, fines or penalties payable by Landlord;

 

(xxiv)                     Landlord’s general corporate overhead and general administrative expenses not attributable in any way to the Building or Plaza II;

 

(xxv)                        Landlord’s political or charitable contributions;

 

(xxvi)                     any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord for profit;

 

(xxvii)                  costs incurred with respect to a sale or transfer of all or any portion of the Building, Plaza II or any interest therein, or in any person or entity (of whatever tier) owning an interest therein;

 

(xxviii)                 costs associated with payments to state and local governments for infrastructure improvements, including without limitation, traffic pattern and road improvements; and

 

(xxix)                       costs and legal expenses incurred due to Landlord’s gross negligence and/or willful misconduct.

 

(h)                                  If during all or part of any Operating Year, Landlord shall not furnish any particular item(s) of work or service (which would constitute an Operating Expense) to portions of the Building or Plaza II, due to the fact such portions are not occupied or leased, or because such item of work or service is not required or desired by the tenant of such portion, or such tenant is itself obtaining and providing such item of work or service, then, for the purpose of computing the additional rent payable hereunder, the amount of Operating Expenses for such item for such period shall be increased by an amount equal to the actual incremental cost which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such item of work or services to 100% of the aggregate square footage of the Building and Plaza II; it being understood that, without limiting the foregoing, the amount included in Operating Expenses for the Base Operating Year and each subsequent Operating Year in respect

 

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of management fees shall also be increased by an amount equal to the incremental management fees which would have been incurred if the Building and Plaza II were 100% leased to tenants based on the gross rents for the Building and Plaza II then being charged by Landlord.  In addition, in no event shall the same item of Operating Expenses be included more than once in Operating Expenses for a particular Operating Year.

 

(i)                                      Tenant acknowledges that Landlord may transfer legal ownership of portions of the Property to a Landlord Affiliated Entity for purposes of obtaining tax abatements for the Property, for tax planning purposes or otherwise, and neither the definition of Operating Expenses nor of Tenant’s Expense Share nor of Common Area Operating Expenses, nor of Common Area Expense Share shall be affected by reason of any such transfers to Landlord Affiliated Entities; all of which shall be deemed for purposes hereof to continue to be owned by Landlord.

 

(j)                                      If Landlord (or any Landlord Affiliated Entity) shall acquire an Additional Parcel, then, at Landlord’s election, exercisable by written notice to Tenant (A) the Common Area Operating Expenses allocable to such Additional Parcel (or the portion thereof to be used as Common Areas) shall be included in Common Area Operating Expenses in accordance with paragraph (d) above to the extent applicable when such Additional Parcel shall be available for the general use of the tenants of the Complex, (B) the square footage of any improvements then or thereafter constructed on such Additional Parcel, the tenants or occupants of which are permitted generally to use the Common Areas, shall, as of the applicable Expense Share Determination Date, be added to the denominator of the Expense Share Fraction for purposes of calculating the Common Area Expense Share in accordance with paragraph (c) above, (C) such Additional Parcel shall thereafter be deemed a part of the Complex Land for all purposes of this Lease and (D) the Common Area Expenses for the Base Operating Year shall be equitably increased to reflect the inclusion of the Operating Expenses for the Additional Parcel in the Common Area Expenses.

 

(1)                                   Tenant shall pay to Landlord as additional rent for each Operating Year or partial Operating Year an amount equal to Tenant’s Expense Share of the excess of the Operating Expenses for such Operating Year over the Operating Expenses for the Base Operating Year and the Common Area Expense Share of the excess of the Common Area Operating Expenses for such Operating Year over the Common Area Operating Expenses for the Base Operating Year (collectively, “ Tenant’s Expense Payment ”).

 

(2)                                   Landlord shall furnish to Tenant for each Operating Year an Escalation Statement (subject to revision as hereinafter provided) setting forth Landlord’s estimate of Tenant’s Expense Payment for such Operating Year.  Landlord’s estimate shall not exceed 105% of Tenant’s Expense Payment for the prior Operating Year unless Landlord becomes aware (and advises Tenant in writing) of an increase in one or more categories of Common Area Operating Expenses and/or Operating Expenses (such as insurance premiums or utilities, including fuel costs) in excess of 5% of the cost of such category(ies) of Common Area Operating Expenses or Operating Expenses over the prior Operating Year.  The foregoing limit on estimates shall not be deemed a cap on Tenant’s Expense Payment based upon actual Common Area Operating Expenses and/or Operating Expenses.  Landlord shall provide an Escalation Statement for the Base Operating Year no later than the delivery of the Escalation &

 

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Statement for the first Operating Year subsequent to the Base Operating Year.  Tenant shall pay to Landlord on the first day of each month during such Operating Year an amount equal to one-twelfth (1/12) of Landlord’s estimate of Tenant’s Expense Payment for such Operating Year.  If Landlord shall furnish such estimate for an Operating Year after the commencement thereof, then (i) until the first day of the month following the month in which such estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day of each month an amount equal to the monthly sum payable by Tenant to Landlord under this paragraph C for the last month of the preceding Operating Year; (ii) on the first day of the month following the month in which such estimate is furnished to Tenant and monthly thereafter for the balance of such Operating Year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12) of Tenant’s Expense Payment as shown on such estimate; and (iii) Landlord shall notify Tenant in the Escalation Statement containing such estimate whether the installments of Tenant’s Expense Payment previously paid for such Operating Year were more or less than the installments which should have been paid for such Operating Year pursuant to such estimate.  If there shall be an underpayment, Tenant shall pay the amount thereof within fifteen (15) Business Days after being furnished with such Escalation Statement or if there shall be an overpayment, Tenant shall be entitled to a credit in the amount thereof against the next subsequent rental payments under this Lease.  After the termination of this Lease and the payment to Landlord of the balance, if any, of all basic annual rent and additional rent due hereunder, Landlord shall pay Tenant the amount of any credit not previously applied by Tenant.  Landlord may at any time and from time to time furnish to Tenant an Escalation Statement setting forth Landlord’s revised estimate of Tenant’s Expense Payment for a particular Operating Year and Tenant’s Expense Payment for such Operating Year shall be adjusted and paid or credited, as applicable, in the same manner as provided in the preceding sentence.

 

(3)                                   Within 180 days after the end of each Operating Year Landlord shall submit to Tenant an annual Escalation Statement prepared by Landlord or its agent setting forth the Operating Expenses and Common Area Operating Expenses for the preceding Operating Year and the balance of Tenant’s Expense Payment, if any, due to Landlord from Tenant for such Operating Year.  If such annual Escalation Statement shall show that the sums paid by Tenant under Section 3.02(C)  exceeded Tenant’s Expense Payment for such Operating Year, Tenant shall be entitled to a credit in the amount of such excess against the next subsequent rental payments under this Lease.  After the termination of the Lease and the payment to Landlord of the balance, if any, of all basic annual rent and additional rent due hereunder, Landlord shall pay Tenant the amount of any credit not previously applied by Tenant.  If an annual Escalation Statement shall show that the sums so paid by Tenant were less than Tenant’s Expense Payment for such Operating Year, Tenant shall pay the amount of such deficiency to Landlord within fifteen (15) Business Days after being furnished with such annual Escalation Statement.

 

(4)                                   The annual Escalation Statements with respect to Operating Expenses and Common Area Operating Expenses to be furnished by Landlord or its agent as provided above may be unaudited but shall be in reasonable detail.  Landlord and its agent may rely on Landlord’s operating cost allocations and estimates if such allocations or estimates are required for this Section 3.02 .

 

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disputes the correctness of such Escalation Statement, specifying the particular respects in which such Escalation Statement is claimed to be incorrect.  Pending the resolution of such dispute, and as a condition precedent to Tenant’s right to dispute the correctness of such Escalation Statement, Tenant shall make its payments in accordance with such Escalation Statement without prejudice to Tenant’s position.  In the event of the resolution of such dispute so that there shall have been an overpayment of any of Tenant’s Tax Payment and/or Tenant’s Expense Payment, Landlord shall permit Tenant to credit the amount of such overpayment against the next subsequent rental payments under this Lease and, if such overpayment shall have exceeded 6%, Landlord shall reimburse Tenant for Tenant’s reasonable and actual costs for Tenant’s accountants to review the Escalation Statement.  After the termination of this Lease and the payment to Landlord of the balance, if any, of all basic annual rent and additional rent due hereunder, Landlord shall pay to Tenant the amount of any credit not previously applied by Tenant. Tenant agrees, at Landlord’s request, to be a party to any arbitration between Landlord and any other tenant of the Property concerning the interpretation of any provision similar to a provision in this Article 3 in such other tenant’s lease.  Tenant shall not be responsible for the cost of any such arbitration, except that Tenant shall bear the cost of its own counsel, experts and presentation of proof, if any.  If Landlord and Tenant, both acting reasonably and in good faith, cannot resolve such dispute and the amount in dispute exceeds $10,000, then, in such event, if Tenant delivers a notice (the “ Arbitration Notice ”) to Landlord stating that Tenant wishes to resort to the procedure described in this subsection below, the resolution as to the disputed amount shall be determined as follows.  A senior officer experienced in accounting matters related to commercial leasing and who is a partner of a recognized New Jersey accounting firm (the “ Arbitrator ”) shall be selected and paid for jointly by Landlord and Tenant.  If Landlord and Tenant are unable to agree upon the Arbitrator, then the same shall be designated by the American Arbitration Association (“ AAA” ).  The Arbitrator selected by the parties or designated by the AAA shall not have been employed by Landlord or Tenant during the previous five year period and shall have at least ten years experience in analyzing accounting issues concerning office space in New Jersey.  Landlord and Tenant shall each submit to the Arbitrator and to the other its determination of the resolution as to the amount by which the disputed amount differs from the Escalation Statement, as set forth above.  The Arbitrator shall determine which of the two determinations (or any amount in between) represents the correct resolution as to such disputed amount.  The determination of the Arbitrator shall be binding upon Landlord and Tenant.  Tenant shall ensure that Tenant, its employees and its other representatives shall keep the findings of any audit as well as the Arbitrator confidential.

 

3.08         Tenant will cooperate with Landlord in all reasonable respects in obtaining and retaining any tax abatement or exemption for which the Property may be eligible.  Tenant will execute and file within ten (10) days after demand any and all documents and instruments reasonably necessary to obtain and retain such abatement or exemption.

 

ARTICLE 4

 

ELECTRICITY

 

4.01         Any additional risers, feeders or other equipment or service proper or necessary to supply Tenant’s electrical requirements, upon written request of Tenant, will be installed by Landlord at the sole but reasonable cost and expense of Tenant, if in Landlord’s sole but

 

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reasonable judgment the same are available and necessary for Tenant’s use and will not cause permanent damage or injury to the Property or the demised premises or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other tenants or occupants.  Such written request shall include a load letter prepared by Tenant’s electrical engineer which shall substantiate Tenant’s request and set forth all of Tenant’s proposed electrical equipment and estimated consumption in the demised premises, and which load letter shall be satisfactory to Landlord.  For purposes of this Section 4.01 Tenant acknowledges that the following factors shall be taken into consideration in determining reasonableness:  (i) whether the installation of such additional electrical equipment potentially materially and adversely affects the normal operation of portions of the electrical systems outside the demised premises or affects the occupancy of other tenants in the Building, (ii) Landlord’s desire (acting in a manner consistent with a prudent and forward-looking leasing program) to reserve electrical power or excess electrical power for other existing or prospective tenants in the Building, and (iii) whether the installation of such additional electrical equipment requires a shutdown of electrical or other Building systems and Landlord’s rights to effect such shutdown under other leases in the Building.  To the extent that Tenant requests Landlord to install the additional electrical equipment referred to in this Section 4.01 to enable Tenant to obtain electrical capacity for the demised premises in excess of the electrical capacity referred to in Section 4.02 and Landlord declines Tenant’s request, Landlord shall not be deemed to have acted unreasonably so long as Landlord does not unreasonably withhold its consent if Tenant wishes to make arrangements, at its sole expense, to obtain such additional electrical capacity for the demised premises directly from the public utility serving the Building (and not from available capacity in the Building), provided that Tenant complies with all of the requirements of Articles 6 and 8 of this Lease and consults with Landlord’s engineers with respect to obtaining such additional electrical capacity and the installations required therefor.

 

4.02         Landlord shall supply the demised premises with electrical capacity of not less than six (6) watts demand load, exclusive of the Building HVAC system serving the demised premises, per usable square foot contained in the demised premises.  Tenant covenants and agrees to pay directly to the utility company supplying electricity to the demised premises the amounts due for electric current consumed by Tenant (including, but not limited to, the requirements of Section 21.01(c) ), as indicated by meters measuring Tenant’s consumption thereof which shall be installed by Landlord for the demised premises and shall be in good working order.  Tenant, at Tenant’s sole cost and expense, shall be responsible for the maintenance and repair of all such meters.

 

4.03         Tenant’s use of electric current in the demised premises shall not at any time exceed the capacity as provided in Section 4.02 or of any of the electrical conductors and equipment in or otherwise serving the demised premises.  Tenant shall not make or perform or permit the making or performing of, any alterations to wiring, installations or other electrical facilities in or serving the demised premises without the prior consent of Landlord in each instance, and then only in accordance with the provisions of Article 6 .

 

4.04         Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electric energy furnished to the demised premises by reason of any requirement, act or omission of the public utility providing the Building or the demised premises with electricity or for any other reason whatsoever, including the sharing by Tenant of common

 

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electrical equipment with other tenants or occupants.  Without limiting the foregoing, in no event shall Landlord be liable to Tenant for any consequential damages arising from any such failure or defect.

 

4.05         At Landlord’s option, Tenant shall pay Landlord’s reasonable charges for installing all lighting tubes, lamps, bulbs and ballasts used in the demised premises on demand as additional rent.

 

4.06         To the extent that Tenant leases the 2 nd  Floor Expansion Space, the 6 th  Floor Expansion Space and/or any Offer Space, Tenant shall pay for electricity in such space and, to measure the consumption thereof, Landlord shall install, at Tenant’s expense, and supply electricity to service such space on a submetered basis, and Tenant in such event shall pay to Landlord, as additional rent, the sum of (y) an amount determined by applying the electric rate charged by the utility for such space to Tenant’s consumption of and demand for electricity within such space as recorded on the submeter or submeters servicing such space and (z) Landlord’s administrative and line loss charge of 5% of the amount referred to in (y) above, (such combined sum being hereinafter called “ Submeter Electric Rent ”).  Except as set forth in the foregoing clause (z), Landlord will not charge Tenant more than the electric rate for the electricity provided pursuant to this paragraph.  Where more than one submeter measures the electric service to Tenant, the electric service rendered through each submeter shall be computed and billed separately in accordance with the provisions set forth herein, provided that Tenant may, at its expense, install a totalizing meter in such space, aggregating total electric consumption so long as, in no event, shall Tenant pay Landlord for electricity an amount which is less than Landlord’s cost for such electricity as set forth in clause (y) above.  Such totalizing meter shall be maintained by Tenant, at Tenant’s expense.  Prior to the installation and the first reading of the submeter or submeters referred to above, Tenant shall pay to Landlord, on account of the Submeter Electric Rent payable pursuant to this paragraph, the annual sum of $1.56 per square foot of Rentable Area of such space (“ Estimated Submeter Electric Rent ”), subject to the adjustments on the first day of each and every calendar month of the term (except that if the first day of the term is other than the first day of a calendar month, the first monthly installment, prorated to the end of said calendar month, shall be payable on the first day of the first full calendar month).  From time to time during the term, the Estimated Submeter Electric Rent may be adjusted by Landlord on the basis of either Landlord’s reasonable estimate of Tenant’s electric consumption and demand (if at any time the submeter(s) servicing such space are inoperative) or Tenant’s actual consumption of and demand for electricity as recorded on the submeter(s) servicing such space, and, in either event, based on the electric rate then in effect.  Subsequent to the end of each calendar year during the term of this Lease, or more frequently if Landlord shall elect, Landlord shall submit to Tenant a statement of the Electric Submeter Rent for such year or shorter period together with the components thereof, as set forth in this paragraph (“ Submetered Electric Statement ”).  To the extent that the Estimated Submetered Electric Rent paid by Tenant for the period covered by the Submetered Electric Statement shall be less than the Submeter Electric Rent as set forth on such Submetered Electric Statement, Tenant shall pay Landlord the difference within 30 days after receipt of the Submetered Electric Statement.  If the Estimated Submeter Electric Rent paid by Tenant for the period covered by the Submetered Electric Statement shall be greater than the Submeter Electric Rent as set forth on the Submetered Electric Statement, such difference shall be credited against the next required payment(s) of Estimated Submeter Electric Rent.

 

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ARTICLE 5

 

USE

 

5.01         The demised premises shall be used solely as and for executive, general and administrative offices, and all customary ancillary uses (including, without limitation, the installation of a cafeteria for Tenant’s employees and invitees, which shall not be open to the general public) in keeping with the character of the Building.

 

5.02         Tenant shall not use or permit the use of the demised premises or any part thereof in any way which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease or for any unlawful purposes or in any unlawful manner or in violation of the certificate of occupancy for the demised premises or the Building, and Tenant shall not permit the demised premises or any part thereof to be used in any manner or anything to be done, brought into or kept therein which, in Landlord’s good faith judgment shall impair or interfere with (i) the character, reputation or appearance of the Building as a first class office building, (ii) any of the Property services or the proper and economic heating, cleaning, air conditioning or other servicing of the Property or the demised premises, or (iii) the use of any of the other areas of the Property by, or occasion discomfort, inconvenience or annoyance to, any of the other tenants or occupants of the Property.  Tenant shall not install any electrical or other equipment of any kind which, in the reasonable judgment of Landlord, might cause any such impairment, interference, discomfort, inconvenience or annoyance or which might overload the risers or feeders servicing the demised premises or other portions of the Building.  The factors to be taken into consideration in defining Landlord’s reasonableness described in the last sentence of Section 4.01 of this Lease shall apply, to the extent applicable, to the preceding sentence.

 

5.03         If Tenant exercises the 2 nd  Floor Expansion Option (as hereinafter defined) or the Offer Space, then Tenant, at its own risk and on a non-exclusive basis, may use the Building stairways between the demised premises and the 2 nd  Floor Expansion Space and/or contiguous Offer Space solely to enable Tenant’s employees to access floors comprising the demised premises, provided that such use by Tenant (x) has been approved, if required, by applicable Governmental Authorities and thereafter complies with all Legal Requirements, (y) does not disrupt or interfere with the proper and safe operation of the Building by Landlord and (z) does not unreasonably interfere with the occupancy by other tenants of the Building.  Tenant shall make its own security arrangements relating to the use of such stairways, provided that it shall consult with Landlord regarding such arrangements and continue to afford Landlord access to the demised premises and such stairways in accordance with the applicable provisions of this Lease.

 

ARTICLE 6

 

ALTERATIONS AND INSTALLATIONS

 

6.01         Tenant, upon notice to but without obtaining Landlord’s consent, may make alterations, installations, additions or improvements in or to the demised premises which (x)(i) do not affect any structural or mechanical portion, or the electrical systems, of the Building and (ii) are of a purely decorative or cosmetic nature such as painting, carpeting, wall coverings and the like, (y) cost less than $5.00 per square foot with respect to the area affected by such work

 

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and (z) do not require a building permit.  Tenant shall make no other alterations, installations, additions or improvements in or to the demised premises without Landlord’s prior written consent and then only by contractors or mechanics who are reasonably approved by Landlord; provided , that Tenant shall only use contractors or mechanics designated by Landlord for any alterations, installations, additions or improvements which affect the life safety and/or other systems of the Building.  All such work, alterations, installations, additions and improvements shall be done at Tenant’s sole expense and at such times and in such manner as Landlord may from time to time reasonably designate.  Tenant’s Initial Work and any future work in the demised premises shall be done solely in accordance with plans and specifications first approved in writing by Landlord.  Landlord will not unreasonably withhold or delay its consent to requests for alterations, additions and improvements.  Landlord shall respond to Tenant’s plans and specifications for Tenant’s Initial Work within ten (10) Business Days after submission, provided that, if Tenant notifies Landlord that an emergency situation exists ( i.e. , that there is a realistic and imminent threat to the safety of persons or the preservation of property), Landlord shall endeavor to respond more quickly.  In determining whether Landlord has acted reasonably, the following factors shall be taken into consideration:  (A) whether the proposed alteration is structural and/or will interfere with the operation of the Complex or affect the outside of the Complex or affect its structure, electrical, HVAC, plumbing or mechanical systems, (B) whether such alteration will affect the occupancy of any other tenant in the Complex and (C) whether such alteration is a customary type of alteration for the uses permitted by Section 5.01 and in accordance with a first class office building standard.  If Landlord fails to respond to Tenant’s proposed alterations and plans and specifications within such ten (10) Business Day period, such alterations and plans and specifications shall be deemed approved, provided that Tenant shall have sent Landlord a second request for approval containing the following language and Landlord shall have failed to respond within five Business Days:  “THIS IS A SECOND REQUEST FOR APPROVAL OF THE PROPOSED ALTERATIONS.  IF LANDLORD DOES NOT RESPOND TO THIS SECOND REQUEST WTHIN FIVE BUSINESS DAYS, LANDLORD’S APPROVAL SHALL BE DEEMED GRANTED PURSUANT TO THE PROVISIONS OF THE LEASE.”

 

Any such approved alterations and improvements shall be performed in accordance with the foregoing and the following provisions of this Article 6 and Schedule C :

 

1.             All work shall be done in a good and workmanlike manner.

 

2.             (a)           Any contractor employed by Tenant to perform any work permitted by this Lease, and all of its subcontractors, shall agree to employ only such labor as will not result in jurisdictional disputes or strikes.  Tenant will inform Landlord in writing of the names of any contractor or subcontractors Tenant proposes to use in the demised premises at least ten (10) days prior to the beginning of work by such contractor or subcontractors.

 

(b)           Tenant covenants and agrees to pay to the contractor, as the work progresses, the entire cost of supplying the materials and performing the work shown on Tenant’s approved plans and specifications less only customary retentions.

 

3.             All work shall be performed in compliance with all Legal Requirements.

 

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4.             All work shall be performed in accordance with the general tenant guidelines for the Property established by Landlord from time to time regarding such work, which guidelines Tenant acknowledges are available for its reference and use in the Property manager’s office.  Any future changes by Landlord to the existing tenant guidelines shall be commercially reasonable.

 

5.             Tenant shall keep the Property and the demised premises free and clear of all liens (and shall provide appropriate lien waivers evidencing same) for any work or material claimed to have been furnished to Tenant or to the demised premises on Tenant’s behalf, and all work to be performed by Tenant shall be done in a manner which will not unreasonably interfere with or disturb other tenants or occupants of the Property.

 

6.             During the progress of the work to be done by Tenant, said work shall be subject to inspection by representatives of Landlord who shall be permitted access and the opportunity to inspect, at all reasonable times on reasonable notice (except in the case of an emergency), but this provision shall not in any way whatsoever create any obligation on Landlord to conduct such an inspection.

 

7.             With respect to any alteration or improvement work, Tenant agrees to pay to Landlord, as additional rent, promptly upon being billed therefor, a sum equal to any reasonable third party, out-of-pocket costs and expenses incurred by Landlord in connection with such work (including, without limitation, to review Tenant’s plans and specifications or with respect to alteration or improvement work affecting Building systems, to inspect or monitor such alteration or improvement work).  Landlord shall not charge Tenant any supervisory or similar fee in connection with such work.

 

8.             Prior to commencement of any work, Tenant shall furnish to Landlord certificates of insurance evidencing the existence of:

 

(a)           worker’s compensation insurance covering all persons employed for such work with statutorily required limits;

 

(b)           employer’s liability coverage including bodily injury caused by disease with limits of not less than $100,000 per employee; and

 

(c)           commercial general liability insurance including, but not limited to, completed operations coverage, products liability coverage, contractual liability coverage, broad form property damage, independent contractor’s coverage and personal injury coverage naming Landlord as well as such representatives and consultants of Landlord as Landlord shall reasonably specify (collectively “ Landlord’s Consultants ”), including, without limitation, as of the date hereof, Mack-Cali Realty Corporation, as well as Tenant, as additional insureds, with coverage of not less than $3,000,000 combined single limit coverage (or such higher limits as Landlord may from time to time impose in its reasonable judgment).

 

(d)           Such insurance shall be placed with solvent and responsible companies reasonably satisfactory to the Landlord and licensed or authorized to do business in the State of New Jersey, and the policies shall provide that they may not be canceled without thirty (30) days’ prior notice in writing to Landlord.

 

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9.             Tenant shall require all contractors engaged or employed by Tenant to indemnify and hold Tenant, Landlord, and Landlord’s Consultants, including, but not limited to, as of the date hereof Mack-Cali Realty Corporation, harmless substantially in accordance with the following clauses (with such modifications therein as may be required from time to time by reason of a change in the parties constituting Landlord’s Consultants):

 

“The contractor hereby agrees to the fullest extent permitted by law to assume the entire responsibility and liability for and defense of and to pay and indemnify Landlord, Tenant and Landlord’s Consultants, against any loss, cost, expense, liability or damage and will hold each of them harmless from and pay any loss, cost, expense, liability or damage (including, without limitation, judgments, attorneys’ fees, court costs, and the cost of appellate proceedings), which Landlord and/or Tenant and/or Landlord’s Consultants, incurs because of injury to or death of any person or on account of damage to property, including loss of use thereof, or any other claim arising out of, in connection with, or as a consequence of the performance of the work by the contractor and/or any acts or omissions of the contractor or any of its officers, directors, employees, agents sub-contractors or anyone directly or indirectly employed by the contractor or anyone for whose acts the contractor may be liable as it relates to the scope of this contract, except to the extent with respect to any of the persons or entities indemnified hereunder, such injuries to person or damage to property are alleged to be due and are held by a final unappealable order of a court of competent jurisdiction to be due to the negligence of the such person or entity seeking to be so indemnified.”

 

10.           Tenant, to the extent permitted by law, shall make application for all building permits in its own name.  Tenant shall obtain any temporary certificate of occupancy or addendum to the permanent certificate of occupancy required as a result of Tenant’s alterations and improvements.  Landlord shall promptly join in any and all applications for permits, licenses or other authorizations if required by any Governmental Authority, and may, in any event, so join in.  If Landlord is required to join in any such application Tenant shall reimburse Landlord as additional rent for all documented out-of-pocket expenses (including without limitation reasonable legal fees and expenses) incurred by Landlord in connection with such application.

 

11.           Within ninety (90) days after completion of any work Tenant shall, at its sole cost and expense, furnish Landlord with one mylar set of “as built” plans, drawings and specifications together with a disk in form requested by Landlord carrying a copy of such “as built” plans, drawings and specifications in the computer aided design (CAD) format requested by Landlord, which set of plans, drawings and specifications and all rights therein shall become the property of Landlord.  The transfer of all such rights as to the plans shall be confirmed in writing by Tenant’s architect.

 

6.02         Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit, and that no mechanic’s or other lien for any such labor or materials shall attach to or affect the reversion or other estate or interest of Landlord in and to the demised premises.  Any mechanic’s lien filed against the demised premises or the Property for work claimed to have been done for or materials claimed to have been furnished to Tenant shall be discharged by Tenant at its expense within thirty (30) days

 

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after Tenant receives notice of such filing, by payment, filing of the bond required by law or otherwise.

 

6.03         All alterations, installations, additions and improvements made and installed by Landlord, including, without limitation, all of Landlord’s Work, shall be the property of Landlord and shall remain upon and be surrendered with the demised premises as a part thereof at the end of the Term.

 

6.04         All alterations, installations, additions and improvements made and installed by Tenant, or at Tenant’s expense, upon or in the demised premises which are of a permanent nature and which cannot be removed without damage to the demised premises or the Property shall become and be the property of Landlord, and shall remain upon and be surrendered with the demised premises as a part thereof at the end of the Term, except that, at the time Landlord approves Tenant’s plans and specifications and provides Tenant with timely notice in order to enable Tenant to change the plans and specifications if Tenant wishes, Landlord shall have the right to require Tenant at the expiration or sooner termination of this Lease, to remove any of such alterations, installations, additions and improvements and, in such event, Tenant will, at Tenant’s own cost and expense, remove the same in accordance with such request, and restore the demised premises to its original condition, ordinary wear and tear and casualty excepted, provided that Tenant shall not be required to remove any nonstructural alteration, installation, addition or improvement which constitutes part of a customary office installation (a “ Customary Installation ”), unless such alteration, installation, addition or improvement required Landlord’s approval, which approval was not obtained, and Tenant shall only be required to remove a non-Customary Installation.

 

6.05         Where furnished by or at the expense of Tenant, all furniture, furnishings and trade fixtures, including without limitation, murals, business machines and equipment, counters, screens, grille work, special paneled doors, cages, partitions, metal railings, closets, paneling, free standing lighting fixtures and equipment, drinking fountains, refrigeration equipment, and any other movable property (exclusive of supplementary air conditioning equipment and raised flooring which shall become the property of Landlord) shall remain the property of Tenant which may at its option remove all or any part thereof at any time prior to the expiration of the Term.  In case Tenant shall decide not to remove any part of such property, Tenant shall notify Landlord in writing not less than three (3) months prior to the expiration of the Term, specifying the items of property which it has decided not to remove.  If, within thirty (30) days after the service of such notice, Landlord shall request Tenant to remove any of the said property, Tenant shall at its expense remove the same.  As to such property which Landlord does not request Tenant to remove, the same shall be, if left by Tenant, deemed abandoned by Tenant and thereupon the same shall become the property of Landlord.

 

6.06         If any alterations, installations, additions, improvements or other property which Tenant shall have the right to remove or be requested by Landlord to remove as provided in Sections 6.04 and 6.05 hereof (herein in this Section 6.06 called the “ Tenant’s Property ”) are not removed on or prior to the expiration of the Term, Landlord shall have the right to remove the Tenant’s Property and to dispose of the same without accountability to Tenant and at the sole but reasonable cost and expense of Tenant.  In case of any damage to the demised premises or the Property resulting from the removal of the Tenant’s Property, Tenant shall repair such damage

 

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or, in default thereof, shall reimburse Landlord for Landlord’s cost in repairing such damage.  This obligation shall survive any termination of this Lease.

 

6.07         Tenant shall keep records of Tenant’s alterations, installations, additions and improvements costing in excess of $50,000, and of the cost thereof.  Tenant shall, within forty-five (45) days after demand by Landlord, furnish to Landlord copies of such records if Landlord shall require same in connection with any proceeding to reduce the assessed valuation of the Property, or in connection with any proceeding instituted pursuant to Article l4 hereof.

 

ARTICLE 7

 

REPAIRS

 

7.01         Tenant shall, at its sole cost and expense, be responsible for the maintenance and repair of the demised premises (including, with respect to any full floor comprising a portion of the demised premises, all bathrooms and other sanitary facilities located therein, provided that Landlord shall maintain and repair all base Building plumbing and sewage lines to the point of entry of the demised premises, the costs of which shall be reimbursable under Article 3 ), and keep same in good order and condition, including all necessary painting and decorating, and make such repairs to the demised premises and the fixtures and appurtenances therein as and when needed to preserve them in good working order and condition (except that as to structural repairs and repairs to the exterior windows, Landlord shall be obligated to make same unless they are necessitated by any act, omission, occupancy or negligence of Tenant or by the use of the demised premises in a manner contrary to the purposes for which same are leased to Tenant, in which case Tenant shall be so obligated).  Tenant shall keep all interior glass, including interior windows, doors and skylights, clean and in good condition and repair and Tenant shall replace any interior glass that may be damaged with glass of the same kind and quality.  All damage or injury to the Property caused by Tenant moving property in or out of the Building or by installation or removal of furniture, fixtures or other property, shall be repaired, restored or replaced promptly by Tenant at its sole cost and expense, which repairs, restorations and replacements shall be in quality and class equal to the original work or installations.  Tenant shall promptly make all repairs in or to the demised premises or the Property for which Tenant is responsible, provided that any repairs required to be made to the mechanical, electrical, sanitary, heating, ventilating, air-conditioning or other Building systems shall be performed only by Landlord.  If Tenant fails to make such repairs, restoration or replacements, same may be made by Landlord at the expense of Tenant and such expense shall be collectible as additional rent and shall be paid by Tenant within twenty (20) Business Days after rendition of a bill therefor.

 

7.02         If the demised premises includes loading docks, and or related facilities, Tenant shall keep the loading docks and areas adjacent thereto and the driveways and streets within the Property leading to said loading docks free of all dirt, rubbish and other obstructions arising from Tenant’s use or occupancy of any such facilities or the use of such facilities by Tenant’s officers, agents, employees, suppliers or invitees including independent contractors making deliveries or pick-ups from such loading docks.

 

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8.02         Notwithstanding the provisions of Section 8.01 hereof, Tenant, at its own cost and expense, in its name and/or (whenever necessary) Landlord’s name, may contest, in any manner permitted by law (including appeals to a court, or governmental department or authority having jurisdiction in the matter), the validity or the enforcement of any Legal Requirements with which Tenant is required to comply pursuant to this Lease, and may defer compliance therewith provided that:

 

(a)           such non-compliance shall not subject Landlord to criminal prosecution or subject the Property to lien or sale;

 

(b)           such non-compliance shall not be in violation of any mortgage, or of any ground or underlying lease or any mortgage thereon;

 

(c)           Tenant shall indemnify and protect Landlord against any loss or injury by reason of such non-compliance; and

 

(d)           Tenant shall promptly, diligently and continuously prosecute such contest.  Landlord, without expense or liability to it, shall cooperate with Tenant and execute any documents or pleadings required for such purpose, provided that Landlord shall reasonably be satisfied that the facts set forth in any such documents or pleadings are accurate.

 

8.03         All work performed pursuant to this Article by Tenant shall be performed in accordance with the provisions of Article 6 hereof relating to Alterations.

 

8.04         (a)           Tenant shall not bring, keep, use, or maintain any Hazardous Material on or about the demised premises.  If Tenant shall breach the foregoing covenant and such breach shall result in a violation of Legal Requirements or contamination in the demised premises or the Building, then Tenant shall indemnify, defend and hold Landlord and all holders of Superior Instrument and its and their respective directors, officers, invitees, agent, servants and employees harmless from any and all liabilities arising during or after the Term as a result of such violation or contamination.  Tenant shall, in accordance with applicable Legal Requirements, either remove such Hazardous Material or encapsulate such Hazardous Material and restore the demised premises to its condition prior to the removal of such Hazardous Material.  Notwithstanding the foregoing, any work required pursuant to the preceding sentence shall be performed at Landlord’s option, either by Tenant, at Tenant’s expense, utilizing a contractor designated by Landlord or by Landlord, in either case at Tenant’s reasonable expense.  This Section 8.04(a)  shall not prohibit Tenant from maintaining materials, equipment and supplies, including, without limitation, printer chemicals, cleaning materials and materials used in the operation and maintenance of Tenant’s offices as is customary for office tenants provided such items are permitted, used, stored, safeguarded and disposed of as required by applicable Legal Requirements.

 

(b)           For the purposes of this Section, “ Hazardous Materials ” shall mean any and all materials defined or classified as “hazardous materials,” “hazardous waste,” “hazardous substance,” “toxic substance,” “hazardous pollutant,” “toxic pollutant” or “oil” pursuant to any relevant federal or state law, including without limitation 42 U.S.C. § 9601 et. seq. (CERCLA),

 

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42, U.S.C. § 6901 et. seq. (RCRA), and any regulations promulgated pursuant to those statutes, all as amended.

 

(c)           Landlord represents that to its actual knowledge (without further inquiry) there are no Hazardous Materials in the Premises or in any areas of the Building that Tenant has the right to access pursuant to the provisions of this Lease.  During the performance by Tenant of its alterations (including Tenant’s Initial Work) in the demised premises during the Term of this Lease, Tenant shall use its best efforts not to release any asbestos-containing materials (“ ACMs ”) and/or presumed asbestos-containing materials (“ PACMs ”).  During the performance by Tenant of its alterations during the Term of the Lease, if Tenant shall encounter any asbestos-containing materials (“ ACMs ”) or presumed asbestos-containing materials (“ PACMs ”) (as such term is defined in the Occupational Safety and Health Administration asbestos rule (1995), 59 Fed. Reg. 40964, 29 CFR §1910.1001 et seq. and 1926.1101 et seq., clarification 60 Fed. Reg. 33974) which are required to be removed, encapsulated or otherwise remediated to comply with Legal Requirements, (i) Tenant shall promptly notify Landlord (which notice shall be accompanied by reasonably detailed documentation describing the nature and extent of the ACMs or PACMs), (ii) Landlord, at its sole cost and expense, shall remove or, subject to the following sentence, encapsulate such ACMs or PACMs as required to comply with Legal Requirements within 60 days after Tenant’s notice to Landlord provided, however, Tenant shall not exacerbate any such existing condition within the demised premises but, if Tenant does so, Tenant (without otherwise limiting Landlord’s rights) shall indemnify Landlord for such actions and be solely responsible for reimbursing Landlord upon demand for all incremental costs incurred by Landlord due to Tenant’s actions and (iii) thereafter, Tenant, at its sole cost and expense, shall comply with an Operating and Maintenance Plan relating to any ACMs or PACMs reasonably established by Landlord.  Notwithstanding the provisions of the preceding sentence, Landlord shall remove (and not encapsulate) any non- de minimis quantities of readily-accessible ACM’s or PACM’s so long as the cost of removal is less than twice the cost of encapsulation.  Tenant shall use commercially reasonable efforts not to disturb any existing ACMs or PACMs in the performance of its alterations and shall make reasonable modifications to its plans and specifications which do not affect the appearance or functionality of its alterations (except in a de minimis manner) if required to enable Landlord to encapsulate rather than remove such ACMs or PACMs.  If such modifications are not reasonably feasible due to Tenant’s design or if such modifications would materially increase Tenant’s costs in performing its alterations, then Landlord shall remove such ACMs or PACMs at its expense.  If Landlord fails to complete such work within the 60 day period referred to above, and Tenant notifies Landlord that, solely as a result of Landlord’s failure to complete the required treatment of the ACMs and PACMs within such 60 day period, Tenant will actually be delayed in completing the Tenant’s Initial Work, then, if Landlord has not completed such work within an additional ten day period, the Rent Commencement Date for the affected portion of such space (including any other space on the same floor in which, based on good construction practice, Tenant cannot reasonably perform its alterations until Landlord has completed such work), shall be deferred one day for each day that Tenant is actually so delayed, provided that Tenant shall have commenced and continued the performance of the Tenant’s Initial Work to the extent possible in accordance with good construction practice and scheduling.  Any disputes as to the provisions of the prior sentence shall be resolved in accordance with the commercial arbitration rules of the AAA.

 

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ARTICLE 9

 

INSURANCE, LOSS, REIMBURSEMENT, LIABILITY

 

9.01         Tenant shall not do or permit to be done any act or thing upon the demised premises which will invalidate or be in conflict with New Jersey standard fire insurance policies covering the Property, and fixtures and property therein, or which would increase the rate of fire insurance applicable to the Property to an amount higher than it otherwise would be; and Tenant, to the extent in its reasonable control, shall neither do nor permit to be done any act or thing upon the demised premises which shall or might subject Landlord to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation being carried on within the demised premises.

 

9.02         If, as a result of any act or omission by Tenant or violation of this Lease, the rate of fire insurance applicable to the Property shall be increased to an amount higher than it otherwise would be, Tenant shall reimburse Landlord for all increases of Landlord’s fire insurance premiums so caused; such reimbursement to be additional rent payable within ten (10) days after demand therefor by Landlord.  In any action or proceeding wherein Landlord and Tenant are parties, a schedule or “make-up” of rates for the Property or demised premises issued by the body making fire insurance rates for the demised premises shall be presumptive evidence of the facts stated therein including the items and charges taken into consideration in fixing the fire insurance rate then applicable to the demised premises.

 

9.03         Landlord or its agents shall not be liable for any injury or damage to Tenant’s property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or snow or leaks from any part of the Building, or from the pipes, appliances or plumbing works or from the roof, street or subsurface or from any other place or by dampness or by any other cause of whatsoever nature.  The foregoing provision shall not relieve Landlord of its restoration obligations to the extent  expressly set forth in Article 10 of this Lease.

 

9.04         Landlord or its agents shall not be liable for any damage which Tenant may sustain if any window of the demised premises is broken, or temporarily or permanently closed, darkened or bricked upon for any reason whatsoever, except only Landlord’s arbitrary acts if the result is permanent, and Tenant shall not be entitled to any compensation therefor or abatement of rent or to any release from any of Tenant’s obligations under this Lease, nor shall the same constitute an eviction or constructive eviction.

 

9.05         Tenant shall reimburse Landlord for all expenses, damages or fines incurred or suffered by Landlord by reason of any breach, violation or non-performance by Tenant, or its agents, servants or employees, of any covenant or provision of this Lease, or by reason of damage to persons or property caused by moving property of or for Tenant in or out of the Building, or by the installation or removal of furniture or other property of or for Tenant, or by reason of or arising out of the carelessness, negligence or improper conduct of Tenant, or its agents, servants or employees, in the use or occupancy of the demised premises.  Subject to compliance with the provisions of Section 8.02 hereof, where applicable, Tenant shall have the right, at Tenant’s own cost and expense, to participate in the defense of any action or proceeding brought against Landlord, and in negotiations for settlement thereof if, pursuant to this Section 9.05 ,

 

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Tenant would be obligated to reimburse Landlord for expenses, damages or fines incurred or suffered by Landlord.

 

9.06         Tenant shall give Landlord written notice in case of fire or accidents in the demised premises promptly after Tenant is aware of such event.

 

9.07         Tenant agrees to look solely to Landlord’s interest in the Building (including the net rents and net income received therefrom) for the satisfaction of any right or remedy of Tenant for the collection of a judgment (or other judicial process) requiring the payment of money by Landlord, its partners, members, officers or shareholders, in the event of any liability by Landlord, and no other property or assets of Landlord, its partners, members, officers or shareholders shall be subject to levy, execution, attachment, or other enforcement procedure for the satisfaction of Tenant’s remedies under or with respect to this Lease, the relationship of Landlord, its partners, members, officers or shareholders and Tenant hereunder, or Tenant’s use and occupancy of the demised premises, or any other liability of Landlord, its partners, members, officers or shareholders to Tenant.

 

9.08         (a)           Notwithstanding anything to the contrary contained in this Lease, Tenant agrees that it will, at its sole cost and expense, include in its property insurance policies appropriate clauses pursuant to which the insurance companies (i) waive all right of subrogation against Landlord and any tenant of space in the Property with respect to losses payable under such policies and (ii) agree that such policies shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for losses covered by such policies.  Tenant shall furnish Landlord upon demand evidence satisfactory to Landlord evidencing the inclusion of said clauses in Tenant’s insurance policies.

 

(b)           Provided that Landlord’s right of full recovery under its fire insurance policies is not adversely affected or prejudiced thereby, Landlord hereby waives any and all right of recovery which it might otherwise have against Tenant, its servants, agents and employees, for loss or damage occurring to the Property and the fixtures, appurtenances and equipment therein, to the extent the same is covered by Landlord’s insurance, notwithstanding that such loss or damage may result from the negligence or fault of Tenant, its servants, agents or employees.  Provided that Tenant’s right of full recovery under its fire insurance policies is not adversely affected or prejudiced thereby, Tenant hereby waives any and all right of recovery which it might otherwise have against Landlord, its servants, and employees, and against every other tenant at the Property who shall have executed a similar waiver as set forth in this Section 9.08(b)  for loss or damage to Tenant’s furniture, furnishings, fixtures and other property removable by Tenant under the provisions hereof to the extent that same (i) is covered by Tenant’s insurance or (ii) exceeds the portion of Tenant’s deductible above $25,000 (even though Landlord has consented in Section 9.09 below to a higher deductible), notwithstanding that such loss or damage may result from the negligence or fault of Landlord, its servants, agents or employees, or such other tenant and the servants, agents or employees thereof.

 

9.09         Tenant covenants and agrees to provide, at its expense, on or before the Commencement Date and to keep in force during the Term, naming Landlord, Mack-Cali Realty Corporation and Landlord’s agents as additional insured parties and Tenant as the insured party (a) a commercial general liability insurance policy written on an occurrence form (hereinafter

 

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referred to as a “ Liability Policy ”), including, without limitation, blanket contractual liability coverage, premises-operation, products/completed operations hazard, broad form property damage, independent contractor’s coverage and personal injury coverage protecting Landlord, Mack-Cali Realty Corporation, Landlord’s agents and Tenant against any liability occasioned by any occurrence on or about the demised premises or any appurtenances thereto, (b) a fire and other casualty policy (a “ Fire Policy ”) insuring the full replacement value of Tenant’s leasehold improvements performed by or on behalf of Tenant and all of the furniture, trade fixtures and other personal property of Tenant located in the demised premises against loss or damage by fire, theft, sprinkler leakage, boiler and machinery and such other risks or hazards as are insurable under present and future forms of “All Risk” insurance policies, (c) business interruption insurance and (d) workers compensation and employees liability insurance.  Such policies are to be written by good and solvent insurance companies licensed or authorized to do business in the State of New Jersey satisfactory to Landlord with a minimum A.M. Best’s rating of A/IX, and shall be in such limits as Landlord may reasonably require.  Landlord reserves the right to reasonably increase limits and adjust coverages as industry standards change.  As of the date of this Lease Landlord reasonably requires limits of liability under (i) the Liability Policy of not less than $5,000,000 combined single limit per occurrence for bodily or personal injury (including death) and property damage and (ii) the Fire Policy equal to the full replacement cost of Tenant’s leasehold improvements performed by or on behalf of Tenant and all of the furniture, trade fixtures and other personal property of Tenant located at the Property with a commercially reasonable deductible, which is presently $250,000.  Tenant will furnish Landlord with such information as Landlord may reasonably request from time to time as to the value of the items specified in clause (ii) above within ten (10) days after request therefor.  Such insurance may be carried (x) under a blanket policy covering the demised premises and other locations of Tenant, if any, provided that each such policy shall in all respects comply with this Article and shall specify that the portion of the total coverage of such policy that is allocated to the demised premises is in the amounts required pursuant to this Section 9.09 and (y) under a primary liability policy of not less than $1,000,000 and the balance under an umbrella policy.  Prior to the time such insurance is first required to be carried by Tenant and thereafter upon the effective date of any such policy Tenant shall deliver to Landlord a certificate evidencing such insurance.  Said certificate shall contain an endorsement that the insurance company will endeavor to provide thirty (30) days’ prior notice to Landlord prior to any cancellation of Tenant’s insurance.  All insurance policies carried by Tenant shall be written as primary policies, not contributing with or secondary to coverage which Landlord carries.  Tenant’s failure to provide and keep in force the aforementioned insurance shall be regarded as a material default hereunder entitling Landlord to exercise any or all of the remedies provided in this Lease in the event of Tenant’s default.  Notwithstanding anything to the contrary contained in this Lease, the carrying of insurance by Tenant in compliance with this Section 9.09 shall not modify, reduce, limit or impair Tenant’s obligations and liability under Article 38 hereof.

 

9.10         During the Term, Landlord shall maintain a Fire Policy insuring the full replacement value of the Building (exclusive of the cost of foundations and excavations) which may, at Landlord’s sole discretion, be maintained under a blanket policy, with such deductibles as Landlord deems appropriate.

 

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ARTICLE 10

 

DAMAGE BY FIRE OR OTHER CAUSE

 

10.01       If the Building or the demised premises shall be partially or totally damaged or destroyed by fire or other cause (and if this Lease shall not have been terminated as in this Article 10 hereinafter provided), Landlord shall repair the damage and restore and rebuild the Building and/or the demised premises, except for Tenant’s Initial Work, all other leasehold improvements performed by or on behalf of Tenant and all of the furniture, trade fixtures and other personal property of Tenant located at the Property, at its expense with reasonable dispatch after notice to it of the damage or destruction and the collection of the insurance proceeds attributable to such damage.

 

10.02       If the Building or the demised premises shall be damaged or destroyed by fire or other cause, then the rents payable hereunder shall be abated to the extent that the demised premises shall have been rendered untenantable or inaccessible for the period from the date of such damage or destruction to the date the damage shall be repaired or restored, such abatement to be granted on a pro rata basis if only a portion of the demised premises is rendered untenantable; provided, however, that should Tenant reoccupy a portion of the demised premises for the conduct of its business as to which the abatement is in effect during the period the restoration work is taking place and prior to the date that the whole of said demised premises are made tenantable and accessible, basic annual rent and additional rent allocable to such portion shall be payable by Tenant from the date of such occupancy.

 

10.03       If the Building shall be so damaged or destroyed by fire or other cause (whether or not the demised premises are damaged or destroyed) as to require a reasonably estimated expenditure made by Landlord or a reputable contractor designated by Landlord of more than twenty percent (20%) of the full insurable value of the Building immediately prior to the casualty (or ten percent (10%) if such casualty occurs during the last two years of the Term) then, so long as Landlord terminates all other leases in the Building as to which Landlord has such right of termination, Landlord may terminate this Lease by giving Tenant notice to such effect within one hundred eighty (180) days after the date of the casualty and upon such notice this Lease and the estate hereby granted, whether or not the Term shall have theretofore commenced, shall terminate as if that date was the Expiration Date.  In case of any damage or destruction mentioned in this Article 10 with respect to the Building which Landlord is required to repair and restore, within 90 days after the date of such damage, Landlord shall cause an independent contractor or engineer to deliver its written estimate of the time for such repair and restoration.  Landlord shall send Tenant a copy of such written estimate.  Tenant may terminate this Lease by notice to Landlord if (a) such estimated time shall exceed twelve (12) months after the date of such damage or (b) Landlord has not completed the making of the required repairs and restorations within twelve (12) months after the date of such damage or destruction, or within such period after such date (not exceeding three (3) months) as shall equal the aggregate period Landlord may have been delayed in doing so by Force Majeure Causes (as defined in Article 34 ).  Tenant’s right to terminate this Lease pursuant to clause (a) shall be conditioned upon Tenant exercising such right of termination within fifteen (15) Business Days after receipt of the estimate (as to which date time shall be of the essence).

 

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10.04       No damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the demised premises or of the Building or of the Complex arising from damage or destruction caused by fire or other casualty and Landlord shall not be required to do any such repair or restoration except on Business Days from 9:00 A.M. to 5:00 P.M.

 

10.05       Notwithstanding any of the foregoing provisions of this Article 10 , if Landlord or the lessor of any superior lease or the holder of any superior mortgage shall be unable to collect all of the insurance proceeds (including rent insurance proceeds) applicable to damage or destruction of the demised premises or the Property by fire or other cause by reason of some subsequent action or inaction on the part of Tenant or any of its officers, partners, directors, employees, agents or contractors, then, without prejudice to any other remedies which may be available against Tenant, there shall be no abatement of Tenant’s rent, but the total amount of such rent not abated (which would otherwise have been abated) shall not exceed the amount of uncollected insurance proceeds.

 

10.06       Landlord will not carry separate insurance of any kind on Tenant’s property (including, without limitation, any property of Tenant’s which shall become the property of Landlord as provided in Article 6 ), and, except as provided by law, shall not be obligated to repair any damage thereto or replace or clean the same, or any decorations, installations, equipment or fixtures installed by or for Tenant at Tenant’s expense.

 

10.07       The provisions of this Article l0 shall be considered an express agreement governing any cause of damage or destruction of the demised premises by fire or other casualty and any law providing for such a contingency now or hereinafter erected shall have no application in such case.

 

ARTICLE 11

 

ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.

 

11.01       Except as otherwise expressly provided in this Article 11 , Tenant shall not, whether voluntarily, involuntarily or by operation of law, without in each instance obtaining the prior consent of Landlord, (a) assign or otherwise transfer this Lease or the term and estate hereby granted, (b) sublet all or part of the demised premises or allow the same to be used or occupied by anyone other than Tenant, or (c) mortgage, pledge or encumber this Lease or all or part of the demised premises in any manner by reason of any act or omission on the part of Tenant.  For purposes of this Article 11 , (i) the transfer, directly or indirectly, of a majority of any class of the issued and outstanding capital stock of any corporate tenant or subtenant, or the transfer of a majority of the total interest in any other entity (limited liability company, partnership or otherwise) which is a tenant or subtenant, however accomplished, whether in a single transaction or in a series of related or unrelated transactions (including, without limitation, and by way of example only, the transfer of a majority of the outstanding capital stock of a company which company owns 100% of a second tier company, which in turn owns 51% of the outstanding capital stock of a corporate tenant hereunder), shall be deemed an assignment of this Lease, or of such sublease, as the case may be, (ii) a so-called “takeover” agreement ( i.e. an agreement where another entity agrees to become responsible for all or a portion of Tenant’s

 

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obligations under this Lease without actually entering into an assignment or sublease) shall be deemed a transfer of this Lease, (iii) any person or legal representative of Tenant, to whom Tenant’s interest under this Lease passes by operation of law, or otherwise, shall be bound by the provisions of this Article 11 , and (iv) a modification, amendment or extension without Landlord’s prior written consent of a sublease previously consented to by Landlord shall be deemed a new sublease.  Tenant agrees to furnish to Landlord upon demand at any time and from time to time such information and assurances as Landlord may reasonably request that neither Tenant, nor any subtenant, is in violation of the provisions of this Section 11.01 .

 

11.02       (a)           The provisions of clauses (a) and (b) of Section 11.0l hereof shall not apply to (and, accordingly, Landlord’s consent shall not be required for) transactions entered into by Tenant with (i) an “affiliate” (as hereinafter defined) or (ii) a corporation into or with which Tenant is merged or consolidated or with an entity to which substantially all of Tenant’s assets or stock are transferred, provided (A) Tenant is not then in monetary or material, non-monetary default beyond any notice and grace period under this Lease, (B) such merger, consolidation or transfer of assets or stock is for a good business purpose and not principally for the purpose of transferring the leasehold estate created hereby, and (C) the assignee or successor entity has a net worth at least equal to or in excess of the net worth of Tenant immediately prior to such merger, consolidation or transfer.

 

(b)           For purposes of this Article 11 , an affiliate means (i) a corporation controlled by, controlling or under common control with Tenant (an “ affiliated corporation ”) or (ii) a partnership or joint venture or limited liability company in which Tenant or an affiliated corporation owns at least 51% of the general partnership or joint venture interest or membership interest therein.  Without limiting the generality of the foregoing, a corporation shall not be deemed controlled by another entity unless at least 51% of each class of its outstanding capital stock is owned, both beneficially and of record, by such entity.  If Tenant shall assign or transfer this Lease t