LEASE WITH OPTION TO PURCHASE

Exhibit 10.1                                

THIS LEASE WITH OPTION TO PURCHASE (“Lease”) is made as of the 1st day of September, 2009 (“Commencement Date”) between FITZGERALD BROTHERS BEVERAGES, INC. , a New York corporation having a principal place of business at 152-160 Dix Avenue, Glens Falls, New York 12801 (“Landlord”), and DELCATH SYSTEMS, INC. , a Delaware corporation having a principal place of business at Rockefeller Center, 600 Fifth Avenue, 23rd Floor, New York, New York 10020 (“Tenant”).  Individually, Landlord and Tenant may be referred to herein as a “party” and, collectively, as the “parties.”

1.1            Premises .  Landlord, in consideration of the rents to be paid and the covenants and agreements to be performed and observed by Tenant, does hereby lease unto Tenant, and Tenant does hereby lease and take from Landlord, the real property more particularly described on Exhibit A attached hereto and all improvements located thereon, including a free standing building containing approximately 10,320 square feet (the “Building”) located at 566 Queensbury Avenue, Town of Kingsbury, Washington County, New York, together with any and all easements or rights of way that may be necessary to access, occupy, use and enjoy the real property and Building (the real property and improvements being leased, including the Building, shall collectively be referred to as the “Premises”).

2.1            Term .  The term of this Lease shall commence on the Commencement Date and shall continue until the earlier to occur of (i) the date that fee title to the Premises is transferred by Landlord to Tenant in accordance with the terms and conditions set forth in Article 20 hereof or (ii) 11:59 pm on August 31, 2012, unless sooner terminated pursuant to the terms hereof (the “Term”).

3.1            Security Deposit .  Tenant shall deposit with Landlord upon the execution of this Lease a one-time payment in the amount of Four Thousand Three Hundred and 00/100 Dollars ($4,300.00) (“Security Deposit”), which shall be deposited by Landlord in an interest bearing account (with the accrued interest to be added to the Security Deposit and utilized in the same manner as the Security Deposit) and held as security for the faithful performance and observance by Tenant of the terms, conditions and provisions of this Lease or, in the event Tenant exercises the option to purchase contained herein, applied against the purchase price at closing.  If Tenant defaults hereunder, Landlord may without prejudice to Landlord’s other remedies, apply all or part of the Security Deposit to cure Tenant’s default.  In the event Tenant has faithfully and fully complied with all of the terms of this Lease, the Security Deposit shall be returned to Tenant after the date fixed as the end of Term and after delivery of possession of the Premises to Landlord.

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3.2            Fixed Rent .  Tenant agrees to pay Landlord, at Landlord’s address above or any other address Landlord directs by written notice to Tenant, annual fixed rent (“Fixed Rent”) for the Premises in the amount of Fifty One Thousand Six Hundred and 00/100 Dollars ($51,600.00) per year payable, in advance, in equal monthly installments in the amount of Four Thousand Three Hundred and 00/100 Dollars ($4,300.00) on the first day of each month during the Term.  Fixed Rent shall be prorated for the fractional portion of any month.

3.3            Late Charge .  If, during the term of this Lease, Tenant fails to pay the full amount of Fixed Rent or any additional rent when the same is due and payable and the same shall remain unpaid for a period of fifteen (15) days, a late charge of five percent (5%) of the past due payment shall become due from Tenant to Landlord to cover the expense involved in handling such delinquency.

4.1   Real Estate Taxes .  From and after the Commencement Date until the end of the Term, Tenant shall be solely responsible for the timely payment of all real estate taxes levied upon or with respect to the Premises.  Tenant shall provide proof of payment to Landlord of all real estate taxes paid within fifteen (15) days after payment thereof.  The term “real estate taxes” shall include town and county taxes, school taxes, library taxes, all special or ad valorem assessments or impositions, and all water and sewer charges, regardless of whether the same are based upon property assessment, metered usage or otherwise and payments in lieu of taxes.  Upon or prior to the Commencement Date, Tenant shall pay to Landlord its prorated share of the real estate taxes for the remainder of the current tax years in the amount of $58.04 i.e. the tax years for which Landlord shall have already paid real estate taxes with respect to the Premises.  Immediately after receipt, Landlord shall send all bills for real estate taxes to Tenant for payment.

4.2            Tenant’s Right to Contest Taxes .  Tenant may contest the amount or validity of any imposition of real estate taxes by informal petition and/or by legal action or proceeding.  If Tenant desires to contest any such tax, Tenant shall notify Landlord in writing, and Landlord shall cooperate with Tenant in the prosecution of any such petition, action or proceeding, and shall consent to become a party thereto if the law so requires.  However, Landlord shall not be required to do any of these things unless Tenant shall complete all of the following:

(a)           Pay to Landlord or to an escrow agent designated by Landlord, all taxes then due as set forth on the official bills prepared by the governmental unit whose taxes are being contested with the authorization to pay any and all outstanding taxes, interest and penalties, as deemed necessary by Landlord; and

(b)           Make independent arrangements for the payment by Tenant of all legal and other professional fees and disbursements, and all other costs or expenses to be incurred in connection with the prosecution of any petition, action or proceeding.

(c)           Tenant shall indemnify, defend and hold harmless Landlord with respect to any and all costs and fees associated with any actions, proceedings or petitions commenced by Tenant.

5.1            Landlord’s Maintenance and Repairs .  Throughout the Term hereof, Landlord shall, at Landlord’s sole cost and expense, keep or cause to be kept the roof, foundations, exterior walls and interior and exterior load bearing walls of the Building in good order, repair and condition; notwithstanding the foregoing, Tenant shall be solely responsible to pay for any damage caused by the acts or omissions of Tenant, its employees or invitees.  Landlord shall also, at Landlord’s sole cost and expense, replace the roof and heating, ventilating and air conditioning (“HVAC”) system as and when the same reach their useful life or otherwise need replacement in order to be operable.  Landlord shall commence repairs and replacements as it is required to do hereunder as soon as reasonably practicable after receiving written notice from Tenant thereof.

5.2            Tenant’s Maintenance and Repairs .  Tenant shall during the Term hereof, at Tenant’s sole cost and expense, maintain and repair the interior and exterior of the Premises, and keep the Premises in as good condition and repair as it was at the date of commencement of this Lease, weather conditions, reasonable use, wear and tear excepted.  Tenant shall further maintain a service contract for routine maintenance of the HVAC system and shall also maintain all plumbing and electrical systems serving the Premises; notwithstanding the foregoing, Landlord shall be solely responsible to pay for any damage caused by or repairs necessitated by the acts or omissions of Landlord, its employees or agents.  All repairs and restorations made by Tenant shall be of quality and class at least equal to the original work, and all work shall be done in a good and workmanlike manner.  Tenant will provide and pay for all general cleaning and janitorial work, snow and ice removal, lawn care, landscaping, and all other maintenance and upkeep of the Premises of every kind and nature whatsoever.

5.3            Trash Removal .  Tenant shall be responsible for the collection and disposal of all trash and recyclables to be removed from the Premises, which shall be disposed in compliance with all applicable laws, rules and regulations

5.4            Disturbance of Occupancy .  If by reason of the work done by Landlord pursuant to Section 5.1 above (and/or by reason of the failure of Landlord to perform such work as required above), Tenant is deprived of the use of all or a substantial portion of the Premises (to the extent that Tenant, in its reasonable judgment, determines that it cannot conduct business in all or a substantial portion of the Premises) for any continuous period in excess of two (2) consecutive days (or two (2) or more days in any seven (7) day period), the Fixed Rent shall abate for so long as Tenant is deprived of the Premises beyond such two (2) day period.  If such work would affect the layout or appearance of the Premises, all such work shall be done in accordance with plans and specifications approved by Tenant, which approval shall not be unreasonably withheld.

5.5            Tenant’s Alterations .  Tenant shall not make any structural changes to the Premises without the prior written consent of Landlord, which shall not be unreasonably withheld, delayed or conditioned, and in no event shall such changes impair the structural soundness of the Building.  Tenant shall have the right, at its sole expense and without Landlord’s prior written consent, to make such non-structural changes and to redecorate the Premises and make such alterations, additions, improvements and changes in such parts thereof as Tenant shall deem expedient or necessary for its purposes; provided, however, that such alterations, additions, improvements and changes when completed shall neither impair the structural soundness nor diminish the value of the Building.  All alterations, additions, or improvements by Tenant shall be done in accordance with all applicable laws, rules, regulations, and orders, including applicable building codes including any and all restrictions and covenants of the Warren-Washington Counties Industrial Development Agency governing property and its location in the Warren-Washington Counties Industrial Development Agency’s Industrial Park.  Tenant shall indemnify, defend and hold harmless Landlord with respect to any and all damages, fees and costs, including reasonable attorneys and consultants fees, with respect to any and all omissions, errors or failures to obtain any and all applicable and necessary permits, approvals and consents with respect to any alterations, additions and improvements and changes to the Premises made by Tenant.  Landlord shall execute and deliver upon request of Tenant such instrument or instruments embodying the approval of Landlord which may be required by any public or quasi public authority for the purpose of obtaining any licenses or permits for the making of such alterations, additions, improvements, changes and/or installations in, to or upon said Premises.  Upon the expiration or termination of this Lease, as long as Tenant is not in default or otherwise obligated to Landlord for any reason, all such redecorations, alterations, additions, improvements and changes shall remain the property of Tenant and Tenant shall be obligated to remove the same or any part thereof prior to the end of the Term and provided that Tenant, at its sole cost and expense, shall make any repairs occasioned by such removal.  Any such redecorations, alterations, additions, improvements and changes not removed by Tenant shall, at Landlord’s option, become the property of Landlord or may be removed from the Premises by Landlord and any reasonable costs incurred by Landlord in removing any of said property shall be paid by Tenant as additional rent.  Landlord shall have no obligation or liability for any such property.

5.6            Examination of the Premises .  Landlord and its agents and other representatives shall have the right to enter into and upon the Premises or any part thereof at all reasonable hours and upon reasonable notice to Tenant for the purpose of examining the Premises or making such repairs or alterations therein as may be necessary for the safety and preservation thereof.

6.1            Mechanic’s Liens .  If any mechanic’s liens shall be filed against the Premises based solely upon any act of Tenant or anyone claiming through Tenant, Tenant shall immediately notify Landlord of any such filings and shall indemnify, defend and hold Landlord harmless from and against any and all damages, claims and expenses arising therefrom, and Tenant after notice from Landlord, shall forthwith commence such action by bonding, deposit payment or otherwise as will remove such lien within thirty (30) days after such notice.  In the event Tenant does not remove or satisfy said lien within said thirty (30) days, Landlord shall have the right to do so, without inquiring into the validity of the lien, and Tenant agrees to reimburse Landlord for any and all reasonable expenses incurred or monies reasonably paid by Landlord in connection therewith, including, but not limited to, monies paid to discharge the lien, filing fees, reasonable legal fees and any applicable bond premiums as additional rent, within fifteen (15) days after receipt by Tenant of Landlord’s invoice therefor.  Nothing in this paragraph shall be deemed or construed as Landlord’s consent to any person, firm or corporation for the performance of any work or services or the supply of any materials to the Premises or any improvements thereon or giving Tenant or any other person, firm or corporation any right to contract for or to perform or supply any work, services or materials that would permit or give rise to a lien against the Premises or any part thereof.

7.1            Use .

(a)           Tenant shall use the Premises for a medical device manufacturing facility and associated offices and for no other purposes.  Tenant shall not use or occupy or allow the Premises to be used or occupied for any business deemed hazardous on account of fire or otherwise.  Tenant will not use or allow any portion of the Premises to be used for an illegal purpose.

(b)           Tenant shall defend, indemnify and hold Landlord harmless from and against any claim, loss, expense or damage to any person or property in or upon the Premises arising out or Tenant’s use or occupancy of the Premises or arising out of any act or neglect of Tenant or its servants, employees, agents or invitees.

(c)           Landlord shall in no event be liable for any loss of or damage to the property of Tenant, Tenant’s employees, agents or visitors, however such damage or loss may arise and whether such property be contained in the Premises or any place appurtenant thereto and  shall not be liable for any personal injury suffered by Tenant, Tenant’s employees, agents, trespassers or visitors arising out of Tenant’s use of the Premises, except for any such loss, damage or injury caused by Landlord’s failure to comply with the terms of this Lease or by the acts or omissions of Landlord, its agents, employees or independent contractors.

7.2            Compliance .  The Premises are leased subject to any and all zoning ordinances.  Tenant shall, at its own cost and expense, promptly execute and comply with all statutes, ordinances, rules, orders, regulations and requirements of the federal, state and municipal government and of any and all departments and bureaus thereof applicable to the Premises including any and all restrictions and covenants of the Warren-Washington Counties Industrial Development Agency governing property and its location in the Warren-Washington Counties Industrial Development Agency’s Industrial Park, for the correction, prevention and abatement of nuisances, violations or other grievance, in, upon or connected with the Premises; and shall also promptly comply with and execute all rules, orders and regulations of the Board of Fire Underwriters for the prevention of fire.

7.2            Failure to Comply .  If Tenant fails or neglects to comply with the aforesaid statutes, ordinances, rules, orders, regulations and requirements, or any of them, then Landlord or Landlord’s agents may but shall not be required to enter the Premises and make changes reasonably necessary to comply with any and all of said statutes, ordinances, rules, orders, regulations and requirements and the reasonable cost thereof shall be paid by Tenant to Landlord as additional rent within ten (10) days after receipt by Tenant of Landlord’s invoice therefor.

7.3            Indemnification and Hold Harmless .  Tenant hereby indemnifies and saves Landlord harmless from and against any and all claims, actions, damages, liabilities, litigation costs and reasonable expenses in connection with Tenant’s non-compliance with any applicable governmental requirements and Tenant agrees if any claim is asserted against Landlord, Tenant shall protect and hold Landlord harmless and pay all costs, expenses and reasonable attorneys’ fees incurred by Landlord in connection with such claim or litigation.

8.1            Utilities .  Tenant shall pay all charges for water, gas, heat, electricity, sewer and any other utility used upon or furnished to the Premises during the Term hereof.  Tenant shall be responsible for opening and/or handling any accounts regarding utility charges and all bills for such charges shall be in Tenant’s name.

9.1            Representations and Warranties of Landlord .  To induce Tenant to enter into this Lease, Landlord warrants and represents to Tenant as follows:

(a)           Landlord is a corporation duly organized, validly existing, and in good standing under the laws of the State of New York and is not a “foreign person,” as defined in federal tax law.

(b)           Landlord is the sole owner of the Premises in fee simple absolute and has the full power and authority to enter into this Lease.

(c)             Landlord has full power and authority to enter into and perform this Lease in accordance with its terms, execution and delivery of this Lease by Landlord has been fully authorized by all requisite corporate action, and the execution and delivery of this Lease does not and, the consummation of the transactions contemplated hereby will not, violate any provision of any agreement to which Landlord is a party or by which it is bound.

authority (collectively, “Hazardous Substances”) with respect to or which otherwise pertain to or affect the Premises, or any portion thereof, the use, ownership, occupancy or operation of the Premises, or any portion thereof, or any owner of the Premises, and as same have been amended, modified or supplemented from time to time, including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), the Hazardous Substances Transportation Act (49 U.S.C. § 1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. § 300f et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. § 11001 et seq.), the Radon and Indoor Air Quality Research Act (42 U.S.C. § 7401 note, et seq.), the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601 et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), all other applicable federal, state and local law, ordinance, rule or regulation, including without limitation the New York State Environmental Conservation Law and the New York State Navigation Law, and any and all rules and regulations, all as may from time to time be amended and including any successor statutes thereto (collectively, the “Environmental Laws”), and the Premises is and has at all times been in compliance with all applicable Environmental Laws during Landlord’s ownership thereof.

(e)           There are no actions, suits, claims, citations, proceedings, arbitrations, investigations, or inquiries, governmental or otherwise, seeking money damages, injunctive relief, remedial action or any other remedy pending or threatened against or affecting the Premises relating to: (i) a violation or non-compliance with, or any matter otherwise arising under, any Environmental Laws; (ii) the release or threatened release of oil, Hazardous Substances or any other contaminant or pollutant; or (iii) the exposure to oil, Hazardous Substances or any other contaminant or pollutant, noises or vibrations.

(f)           There are no violations, or threatened or pending violations, of any laws, statutes, ordinances, rules or regulations with respect to the Premises open, noticed or existing.

(g)           Except a mortgage held by Bank of America, N.A. dated March 26, 2009 and an Assignment of Leases and Rents dated September ___, 2009, to be recorded on or about the date of execution of this Lease, the Premises is not subject to any outstanding agreements of sale, options, liens, or other rights of third parties to acquire any interest(s) therein, ground leases or other leases or tenancies, or other encumbrance(s) other than the Lease.

(h)           There is no action, suit or proceeding which is pending or threatened against the Premises and there is no action, suit or proceeding which is pending or threatened against Landlord with respect to Landlord’s title to the Property.

9.2            Representations and Warranties of Tenant .   Tenant represents and warrants to Landlord that:

(a)           Tenant is a corporation duly organized, existing and in good standing under the laws of Delaware and is duly authorized to conduct business in New York State.

(b)             Tenant has full power and authority to enter into and perform this Lease in accordance with its terms, execution and delivery of this Lease by Tenant has been fully authorized by all requisite corporate action, and the execution and delivery of this Lease does not and, the consummation of the transactions contemplated hereby will not, violate any provision of any agreement to which Tenant is a party or by which it is bound.

10.1            Assignment and Subletting .  Tenant shall not assign this Lease, sublet, mortgage or otherwise dispose of all or any portion of the Premises without first obtaining Landlord’s prior written consent, which shall not be unreasonably withheld or delayed.  Notwithstanding the foregoing, no assignment, subletting or mortgage or the acceptance by Landlord of any assignee, subtenant or mortgage shall be deemed a waiver by Landlord of any term, covenant or condition of this Lease, nor shall the same, in any circumstances, relieve Tenant of any of its obligations under this Lease.

11.1            Surrender of Premises .  Upon the expiration or termination of this Lease, Tenant shall surrender the Premises to Landlord in good condition and repair, reasonable wear and tear, damage and destruction, condemnation, repairs required by Landlord, and acts or omissions of Landlord, its agents, employees, or independent contractors excepted.  Tenant shall also surrender all keys for the Premises to Landlord and shall inform Landlord of all combinations on locks, safes and vaults, if any, in the Premises.

As long as Tenant is not in default or otherwise obligated to Landlord for any reason, all equipment and trade and other fixtures installed by or at the expense of Tenant, in or on the Premises shall remain the property of Tenant and Tenant shall be obligated to remove the same or any part thereof prior to the end of the Term hereof and provided that Tenant, at its sole cost and expense, shall make any repairs occasioned by such removal.  Any alterations, additions, improvements, trade fixtures and equipment not removed by Tenant shall, at Landlord’s option, become the property of Landlord or may be removed from the Premises by Landlord and any reasonable costs incurred by Landlord in removing any of said property shall be paid by Tenant as additional rent.  Landlord shall have no obligation or liability for any such property.

12.1            Exterior Signs .  Tenant shall have the right, at its sole expense and in conformity with applicable laws and ordinances, to erect and thereafter to maintain and/or replace, if it shall so elect, signs at and on the Premises.  Landlord shall not utilize the exterior of or space above the Building or any other portion of the Premises for signs or advertising purposes.

12.2            Interior Signs .  Tenant shall have the right to install its usual and customary signs and fixtures in the interior of the Premises.

12.3            Removal of Signs .  Upon the expiration or termination of this Lease, as long as Tenant is not in default or otherwise obligated to Landlord for any reason, all signs, both exterior and interior, shall remain the property of Tenant and Tenant shall be obligated to remove the same or any part thereof prior to the end of the Term and provided that Tenant, at its sole cost and expense, shall make any repairs occasioned by such removal.  Any such signs not removed by Tenant shall, at Landlord’s option, become the property of Landlord or may be removed from the Premises by Landlord and any reasonable costs incurred by Landlord in removing any of said signs shall be paid by Tenant as additional rent.  Landlord shall have no obligation or liability for any such signs.

13.1            Indemnification .

(a)           Tenant shall indemnify and hold Landlord harmless from any claims, damages, liabilities and expenses (including reasonable attorneys’ fees and costs) for damage or injury to any person or any property occurring on or in the Premises, or any part thereof unless caused by the acts or omissions of Landlord, its agents, employees, or independent contractors or  Landlord’s failure to perform its obligations hereunder, or any latent defects in the Premises (latent defects being defined as those defects in the Premises that existed on the Commencement Date and could not reasonably be discovered upon a physical inspection).

(b)           Landlord shall indemnify and hold Tenant harmless from any and all claims, damages, liabilities and expenses (including reasonable attorneys’ fees and costs) for damage or injury to Tenant or any other person or any property occurring as the result of the acts or omissions of Landlord, its agents, employees, or independent contractors, or Landlord’s failure to perform its obligations hereunder.

           13.2            Landlord’s Insurance .

(a)           Throughout the Term of this Lease, and at Tenant’s cost and expense, Landlord shall for the benefit of itself and its mortgagee, obtain and maintain fire, casualty and extended insurance coverage so as to prevent Landlord from being co-insured covering the Premises in an amount or amounts not less than the full replacement cost of the Building.

(b)           Tenant shall reimburse Landlord for the cost of the insurance required to be carried by Landlord hereunder within fifteen (15) days after receipt by Tenant of Landlord’s invoice therefor.

13.3            Tenant’s Insurance .  Throughout the Term of this Lease, Tenant shall obtain and maintain the following insurance:

(a)           Comprehensive general liability insurance (and to the extent applicable, with the items of coverage set forth below) with limits of $1,000,000 per occurrence, $2,000,000 aggregate and umbrella or excess liability of $2,000,000 naming Landlord as an additional insured and in amounts not less than:

Coverage                                                                             Limits of Liability

Bodily Injury & Property Damage Occurrence Limit                   $1,000,000

General Aggregate Limit                                                                  $2,000,000

Fire Damage (any one fire)                                                               $500,000

Medical Expenses (any one person)                                              $5,000

                Umbrella Coverage Limit                                                                  $2,000,000

(b)           Tenant shall name Landlord as an additional insured, PRIMARY BASIS, to Tenant’s General Liability Insurance Policy.

(c)           Property insurance on its equipment, furniture and other property located at the Premises.

(d)           Insurance covering the boiler, if any, and the HVAC system, all on a broad form basis; and

(e)           Worker’s Compensation insurance including Employers Liability in compliance with New York statutory limits.

13.4            Insurance Certificates .  Certificates evidencing the insurance required hereunder shall be delivered by Landlord and Tenant to the other prior to the Commencement Date and prior to the expiration of any such policies.

13.5            Notice of Cancellation .  Unless a policy required hereunder is replaced by another policy providing substantially the same coverage and limits, the policy will not be cancelled, materially altered or reduced or not renewed for any reason until the insurer has given Landlord and Tenant at least thirty (30) days written notice of such proposed action.

13.6            Insurers .  Landlord’s and Tenant’s insurance companies shall be admitted to do business in New York State and have a current AM Best Rating of A- or higher.

13.7            Separate Policies .  All insurance policies provided pursuant to this Lease shall be by separate policy(ies) provided only to satisfy the requirements of this Lease, except Landlord shall not unreasonably withhold its consent to insurance under a master policy, so long as such master policy affords separate insurance as to coverage and limits for insurance required under this Lease, including, but not limited to, agreed amount endorsements for the property and casualty insurance and endorsements for aggregate limits of insurance for the general liability insurance hereunder.

13.8            Insureds .  All policies of liability insurance provided for herein shall name Landlord and Tenant as the insureds as their respective interests may appear and contain the provision for the standard mortgagee endorsement in favor of the holder of any mortgage(s) which may at any time be a lien upon the Leased Property and such endorsement shall be in a form and content acceptable to such mortgagee.

13.9            Right to Pay Premiums on Behalf of Other Party .  In the event either party fails to maintain the insurance required by this Article, either to effect such insurance herein required or to pay the premiums therefor, or to deliver such policies or certificates thereof to the other party, the other party shall be entitled, but shall have no obligation to effect such insurance and pay the premiums therefor, which premiums shall be repayable to such paying party upon written demand therefore or, if payment is due by Landlord to Tenant, by an offset against Fixed Rent.

13.10            Waiver .  Landlord and Tenant hereby release each other from any and all liability or responsibility (to the other or anyone claiming through or under them by way of subrogation or otherwise) for any loss or damage to property caused by fire or any other casualties insured against or required to be insured against hereunder (including deductible portions), even if such 1ire or other casualty shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible, and each party hereby waives any right of subrogation for all or any insurance maintained by either party.  Each party shall cause each insurance policy carried by it hereunder to be written in such manner to provide that the insurer waives all right of recovery by way of subrogation against the other party hereunder in connection with any loss or damage covered by such policy.

14.1            Abatement or Adjustment of Rent .  With respect to all provisions of this Article 14, provided any fire or other casualty is not the fault of, caused by, or the result of any error or omission by, or failure of Tenant, if the Premises shall be damaged or destroyed by fire or other casualty after the execution of this Lease and before the termination hereof, then Fixed Rent and any other charges payable hereunder shall be abated as set forth herein.  If the whole of the Premises shall be damaged or destroyed, or if a substantial portion thereof shall be damaged or destroyed to the extent that Tenant, in its reasonable judgment, determines that it cannot conduct business in the Premises, then Fixed Rent and any other charges payable hereunder shall be abated entirely until Tenant is obligated to recommence paying rent in accordance with Section 14.3 below.

If less than a substantial part of the Premises shall be damaged or destroyed, then Fixed Rent and any other charges payable hereunder shall be abated in proportion to that portion of the Premises of which Tenant shall be deprived on account of such damage or destruction and the repair, restoration, rebuilding or replacement or any combination thereof until Tenant is obligated to recommence paying rent in accordance with Section 14.3 below.

14.2            Repairs and Restoration of Premises .

(a)           Upon any damage or destruction of the Premises, Landlord shall, to the extent there are proceeds available from the insurance required to be carried pursuant to Article 12 (“Insurance Proceeds”), promptly proceed to repair, restore, replace or rebuild the Premises to substantially the condition the same were in immediately prior to such damage or destruction and Landlord thereafter shall diligently prosecute said work to completion without delay or interruption, subject to Section 21.4 below.  Landlord shall, if required, authorize the Insurance Proceeds to be made available to Tenant for such purpose.  Notwithstanding the foregoing, if

Landlord does not either (i) obtain a building permit for any repairs, rebuilding or restoration required hereunder within two (2) months of the date of such damage or destruction, or (ii) complete such repairs, rebuilding or restoration in accordance with Section 14.3 below within six (6) months of such damage or destruction, then, in any such event, Tenant may at any time thereafter terminate this Lease upon thirty (30) days’ written notice thereof to Landlord; provided, however, that such notice of cancellation shall not be effective if Landlord, within such thirty (30) day period, shall obtain such permit or complete and comply as aforesaid, as the case may be.

(b)           Notwithstanding anything to the contrary set forth in Section 14.2(a) above, if (i) such damage or destruction shall occur during the last one (1) year of the term of this Lease, and shall amount to fifty percent (50%) or more of the replacement cost of the Premises (exclusive of the land and foundations) or (ii) the Insurance Proceeds are insufficient to repair, restore, replace or rebuild the Premises to substantially the condition in which the same were immediately prior to such damage or destruction, this Lease may be terminated at the election of either Landlord or Tenant upon thirty (30) days notice after the occurrence of such damage or destruction.

(c