EXHIBIT 10.5
LEASE AGREEMENT
BETWEEN
LENOX DRIVE OFFICE PARK LLC,
a Delaware Limited Liability Company,
LANDLORD,
-AND-
FACTOR SYSTEMS, INC.,
a Delaware Corporation, Doing Business As “Billtrust”,
TENANT
DATED: August 28, 2017
Prepared by:
Robert A. Klausner, Esq.
Fox Rothschild LLP
49 Market Street
Morristown, New Jersey 07960
TABLE OF CONTENTS
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| ARTICLE 1 | DEFINITIONS | 4 |
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| ARTICLE 2 | DEMISE; TERM | 4 |
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| ARTICLE 3 | BASIC RENT; ADDITIONAL RENT | 6 |
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| ARTICLE 4 | REAL ESTATE TAXES | 7 |
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| ARTICLE 5 | OPERATING EXPENSES | 10 |
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| ARTICLE 6 | ELECTRICITY | 13 |
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| ARTICLE 7 | MAINTENANCE; ALTERATIONS; REMOVAL OF TRADE FIXTURES | 14 |
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| ARTICLE 8 | USE OF PREMISES | 16 |
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| ARTICLE 9 | LANDLORD’S SERVICES | 18 |
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| ARTICLE 10 | COMPLIANCE WITH REQUIREMENTS | 21 |
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| ARTICLE 11 | COMPLIANCE WITH ENVIRONMENTAL LAWS | 21 |
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| ARTICLE 12 | DISCHARGE OF LIENS | 24 |
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| ARTICLE 13 | PERMITTED CONTESTS | 24 |
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| ARTICLE 14 | INSURANCE; INDEMNIFICATION | 25 |
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| ARTICLE 15 | ESTOPPEL CERTIFICATES | 28 |
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| ARTICLE 16 | ASSIGNMENT AND SUBLETTING | 30 |
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| ARTICLE 17 | CASUALTY | 35 |
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| ARTICLE 18 | CONDEMNATION | 36 |
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| ARTICLE 19 | EVENTS OF DEFAULT | 37 |
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| ARTICLE 20 | CONDITIONAL LIMITATIONS, REMEDIES | 38 |
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| ARTICLE 21 | ACCESS; RESERVATION OF EASEMENTS | 41 |
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| ARTICLE 22 | ACCORD AND SATISFACTION | 42 |
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| ARTICLE 23 | SUBORDINATION | 42 |
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| ARTICLE 24 | TENANT’S REMOVAL | 43 |
TABLE OF CONTENTS
(continued)
| ARTICLE 25 | BROKERS | 44 |
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| ARTICLE 26 | NOTICES | 44 |
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| ARTICLE 27 | NONRECOURSE | 45 |
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| ARTICLE 28 | SECURITY DEPOSIT | 45 |
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| ARTICLE 29 | MISCELLANEOUS | 47 |
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| ARTICLE 30 | USA PATRIOT ACT | 52 |
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| ARTICLE 31 | EXTENSION OPTION | 52 |
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| ARTICLE 32 | RIGHT OF FIRST REFUSAL | 54 |
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| ARTICLE 33 | EARLY TERMINATION OPTION | 55 |
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| ARTICLE 34 | PURCHASE OPTION | 56 |
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| ARTICLE 35 | TERMINATION OPTION | 56 |
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| ARTICLE 36 | GROW NJ INCENTIVE CONTINGENCY | 58 |
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| ARTICLE 37 | ROOF RIGHTS | 60
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Schedule A | Premises |
Schedule B | Confirmation of Commencement Agreement |
Schedule C | Janitorial Services |
Schedule D | Finish Work |
Schedule E | Rules and Regulations |
Schedule F | Form of Letter of Credit |
Schedule G | Green Building Standards Guidance For Potential GrowNJ Applicants |
Schedule H | Affirmative Action & Prevailing Wage Addendum To Construction |
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Appendix I | Definitions |
LEASE AGREEMENT
This LEASE AGREEMENT (this “Lease”) is dated August 28, 2017 and is between LENOX DRIVE OFFICE PARK LLC, a Delaware limited liability company (“Landlord”), and FACTOR SYSTEMS, INC., a Delaware corporation, doing business as “Billtrust” (“Tenant”).
BASIC LEASE PROVISIONS
| (1) | Land: | Block 5101, Lot 12 on the official tax map of Lawrence Township, New Jersey. |
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| (2) | Building: | 1009 Lenox Drive Lawrenceville, New Jersey 08648. |
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| (3) | Premises: | 75,000 rentable square feet on the first (1st) and second (2nd floors of the Building, as shown on Schedule A attached hereto. |
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| (4) | Term: | Fifteen (15) years, six (6) months. |
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| (5) | Estimated Commencement Date: | April 1, 2018. |
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| (6) | Expiration Date: | 11:59 p.m. on the day immediately preceding the fifteen (15) year and six (6) month anniversary of the Commencement Date (provided that, if the Term ends on a date other than the last day of a calendar month, the Term shall extend to the last day of the month in which the fifteen (15) year and six (6) month anniversary of the Commencement Date occurs), or such earlier date upon which the Term may expire or be terminated. |
Period or Months of Term | | Annual Rate Per Square Foot | | | Annual Basic Rent | | | Monthly Basic Rent | |
| Commencement Date through the end of Month 12: | | $ | 30.50 | | | $ | 2,287,500.00 | | | $ | 190,625.00 | |
| Months 13 through 24: | | $ | 31.00 | | | $ | 2,325,000.00 | | | $ | 193,750.00 | |
| Months 25 through 36: | | $ | 31.50 | | | $ | 2,362,500.00 | | | $ | 196,875.00 | |
| Months 37 through 48: | | $ | 32.00 | | | $ | 2,400,000.00 | | | $ | 200,000.00 | |
| Months 49 through 60: | | $ | 32.50 | | | $ | 2,437,500.00 | | | $ | 203,125.00 | |
| Months 61 through 72: | | $ | 33.00 | | | $ | 2,475,000.00 | | | $ | 206,250.00 | |
| Months 73 through 84: | | $ | 33.50 | | | $ | 2,512,500.00 | | | $ | 209,375.00 | |
| Months 85 through 96: | | $ | 34.00 | | | $ | 2,550,000.00 | | | $ | 212,500.00 | |
| Months 97 through 108: | | $ | 34.50 | | | $ | 2,587,500.00 | | | $ | 215,625.00 | |
| Months 109 through 120: | | $ | 35.00 | | | $ | 2,625,000.00 | | | $ | 218,750.00 | |
| Months 121 through 132: | | $ | 35.50 | | | $ | 2,662,500.00 | | | $ | 221,875.00 | |
| Months 133 through 144: | | $ | 36.00 | | | $ | 2,700,000.00 | | | $ | 225,000.00 | |
| Months 145 through 156: | | $ | 36.50 | | | $ | 2,737,500.00 | | | $ | 228,125.00 | |
| Months 157 through 168: | | $ | 37.00 | | | $ | 2,775,000.00 | | | $ | 231,250.00 | |
| Months 169 through 180: | | $ | 37.50 | | | $ | 2,812,500.00 | | | $ | 234,375.00 | |
| Months 181 through 186: | | $ | 38.00 | | | $ | 2,850,000.00 | | | $ | 237,500.00 | |
Notwithstanding the foregoing, provided that no Event of Default has occurred, the Basic Rent with respect to the period beginning on the Commencement Date and ending on the day immediately preceding the six (6) month anniversary of the Commencement Date shall be abated. For the avoidance of doubt, the rent abatement period set forth in the immediately preceding sentence shall not apply to the payment of any Additional Rent, including, without limitation, Tenant’s payment for electric service in accordance with Article 6 of this Lease.
If the Commencement Date is any day other than the first day of a calendar month, the monthly installment of Basic Rent payable by Tenant for the first partial month shall be prorated at the same rental rate payable for the first monthly installment listed above, and “Month 1” of the rent grid set forth above shall be deemed to be the first full calendar month following immediately thereafter.
| (8) | Rentable Size of Building: | 180,580 square feet. |
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| (9) | Rentable Size of Premises: | 75,000 square feet. |
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| (10) | Tenant’s Proportionate Share: | 41.53%. |
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| (11) | Base Period: | Calendar year 2018. |
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| (12) | Parking Spaces: | 375 parking spaces, 360 of which shall be unassigned and 15 of which shall be marked as reserved by Tenant for Tenant’s use in front of the main entrance to the Building. |
| (13) | Security: | $2,725,000.00 in the form of a letter of credit pursuant to Article 28. |
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| (14) | Permitted Use: | Executive and administrative offices and any lawfully permitted ancillary use. |
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| (15) | Brokers: | Colliers International NJ LLC. |
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| (16) | Enumeration of Schedules / Appendix: | Schedules A, B, C, D, E, F, G and H and Appendix I attached hereto are incorporated into this Lease. |
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| (17) | Governing Law: | This Lease is governed by the laws of the State of New Jersey. |
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| (18) | Landlord’s Notice Address: | Lenox Drive Office Park, LLC c/o JFR Global 2329 Nostrand Ave, Suite 200 Brooklyn, New York 11210 With a copy to: Vision Management, LLC 1009 Lenox Drive, Suite 100 Lawrenceville, New Jersey 08648 |
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| (19) | Landlord’s Address/Instructions for Payment of Rent: | By ACH/Wire transfer to: Wells Fargo Bank, N.A. San Francisco, CA ABA # 121 000 248 Acct. # 4127666022 Acct. Name: Lenox Drive Office Park, LLC (Lockbox) Lenox Drive Office Park, LLC P.O. Box 780334 Philadelphia, PA 19178-0334 |
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| (20) | Tenant’s Notice Address: | Prior to the Commencement Date: Factor Systems, Inc.
100 American Metro Boulevard, Suite 150 Hamilton, New Jersey 08619 Attention: Ed Jordan |
| | | From and after the Commencement Date: At the Premises Attention: Ed Jordan With a copy to: Sills Cummis & Gross, PC One Riverfront Plaza Newark, New Jersey 07102 Attn: Jason L. Sobel, Esq. |
ARTICLE 1
DEFINITIONS
1.1 Capitalized Terms. Capitalized terms used in this Lease but not otherwise defined have the meanings set forth in Appendix I of this Lease.
ARTICLE 2
DEMISE; TERM
2.1 Demise of Premises. Landlord hereby leases and demises to Tenant, and Tenant hereby hires and takes from Landlord, upon the terms and conditions set forth in this Lease, the Premises for the Term. Landlord and Tenant hereby agree that for all purposes of this Lease, the Premises contains 75,000 rentable square feet, and that neither the Premises nor the Building shall be remeasured by the parties for purposes of recalculating Basic Rent or Tenant’s Proportionate Share.
2.2 Term.
(a) Term. The Term of this Lease will commence on the Commencement Date and end on the Expiration Date.
(b) Commencement Date. The “Commencement Date” will be the earlier to occur of (i) the date Tenant takes occupancy of the Premises for the purposes of conducting its business, and (ii) the date that the Finish Work is Substantially Completed. Landlord shall provide to Tenant written notice that the Finish Work is Substantially Completed fifteen (15) days prior to such completion date.
(c) Substantial Completion. “Substantially Completed” or “Substantial Completion” means that (i) Landlord has completed the Finish Work in accordance with the Working Plans, except for (x) minor details of construction that will not unreasonably interfere with Tenant’s use of the Premises (collectively, “Punch List Items”), which Punch List Items shall be completed by Landlord as soon as reasonably possible, and (y) any part of the Finish Work that is not completed due to a Tenant Delay; and (ii) Landlord has obtained a valid temporary or permanent certificate of occupancy for the Premises or, alternatively, Landlord has completed all the Finish Work necessary to entitle Landlord to the issuance of a temporary or permanent certificate of occupancy other than any Finish Work that is not completed due to a Tenant Delay. A “Tenant Delay” will be deemed to have occurred if the completion of the Finish Work is delayed due to any act or omission by Tenant or Tenant’s Visitors, including, but not limited to, delays due to changes in or additions to the Finish Work requested by Tenant, delays in submission of information or estimates, delays in giving authorizations or approvals, delays due to the postponement of any work at the request of Tenant, or delays caused by Tenant’s performance of (or its contractors’ performance of) the Tenant’s Work, but specifically excluding any delay arising from an action or inaction of Landlord, Landlord’s employees, Landlord’s agents or any combination thereof. Notwithstanding the foregoing, no Tenant Delay shall be deemed to have occurred unless Landlord notifies Tenant of such delay, and Tenant fails to cure such circumstances giving rise to such Tenant Delay within two (2) business days following the date Tenant obtains actual knowledge thereof.
(d) AS IS. Tenant acknowledges that neither Landlord nor any employee, agent or representative of Landlord, except as expressly set forth in this Lease, has made any express or implied representations or warranties with respect to the physical condition of the Property, the Building or the Premises, the fitness or quality thereof or any other matter or thing whatsoever with respect to the Property, the Building or the Premises or any portion thereof, and that Tenant is not relying upon any such representation or warranty in entering into this Lease. As of the Commencement Date, the Common Areas (including the parking lot) will comply in all material respects with applicable Legal Requirements (including, but not limited to, the Americans with Disabilities Act of 1990, as amended). Tenant has inspected the Building and the Premises and is thoroughly acquainted with their respective conditions and agrees to take the same “AS IS”, except for the Finish Work which Landlord has agreed to complete pursuant to the terms of Section 2.6 of this Lease. Notwithstanding the foregoing, (i) Landlord shall deliver the Premises to Tenant with all systems and equipment servicing the Premises in good working order, regardless of whether or not those systems and equipment are located within or outside of the Premises, and (ii) Landlord shall be responsible for any latent defects in the Finish Work or in the Building or Common Areas which are not reasonably ascertainable by a thorough visual inspection upon Tenant’s taking possession of the Premises and which are discovered and reported to Landlord by the later of: (1) twelve (12) months following the Commencement Date; or (2) the date immediately prior to the expiration of any applicable warranty period offered by the contractor or material provider, as the case may be, applicable to the latent defect reported to Landlord.
2.3 Occupancy of Premises. Tenant’s occupancy of the Premises for the purpose of conducting business therein will be deemed to conclusively establish that the Finish Work is Substantially Completed and that the Premises are in satisfactory condition as of the date of such occupancy, unless, within thirty (30) days of such occupancy, Tenant delivers to Landlord a written notice specifically identifying all unsatisfactory conditions.
2.4 Commencement Date Agreement. When the Commencement Date occurs, Landlord and Tenant shall enter into an agreement in the form annexed hereto as Schedule B memorializing the Commencement Date and Expiration Date of this Lease.
2.5 Move-In Day. Tenant may move into the Premises at any time on or after the Commencement Date, upon the following terms and conditions: (i) Tenant shall notify Landlord as soon as possible as to the date and time of the scheduled move, and at least seventy-two (72) hours prior to the move date; (ii) Landlord must approve all moving arrangements in its reasonable discretion; (iii) the receiving area and service elevator are scheduled on a first-come, first-served basis; no unscheduled moves are permitted; (iv) all office moves and large deliveries, if possible, shall be scheduled for weekends or after 6:00 p.m. Monday through Friday, excluding Building Holidays; (v) Tenant and Tenant’s moving contractor shall be responsible for supplying pads to protect the elevator cab interior and the Common Areas; masonite boards or similar material shall be used to cover all floor areas through which materials are to be moved; all floor coverings must be installed in such a manner as to avoid trip hazards or other unsafe conditions; (vi) the side and rear entrances are the only Building entrances permitted for moving and delivering purposes; (vii) Tenant shall provide to Landlord a certificate of insurance from its moving contractor in the form reasonably approved by Landlord prior to the move; no moving work shall commence unless such certificates of insurance have been provided; (viii) Tenant and its moving contractor shall be responsible for any damage to the Property and the Building, its contents and appurtenances, caused by the moving contractor or by its employees or subcontractors; (ix) Tenant or Tenant’s moving contractor shall promptly report to Landlord any electrical problems or equipment breakdowns that occur during the move and may affect Building operations; (x) Tenant and its moving contractor shall be responsible for removing all trash, packing cartons and other materials associated with the move to a location reasonably approved by Landlord, which shall not interfere with other tenants of the Building; (xi) the blocking of any fire corridor, exit door, elevator, lobby, or hallway, and the parking of vehicles in fire lanes is prohibited; all improperly parked or unauthorized vehicles will be towed from the Property without notice to the owner at the owner’s expense; (xii) the employees and subcontractors of Tenant’s moving contractor shall be restricted to the areas of the move and the loading docks, and shall use the lobby level restrooms only; the discovery of any of the moving contractor’s personnel or subcontractor’s personnel in any other area of the Building or the Property will result in the suspension of the move; (xiii) additional security personnel may be required by Landlord to supervise the move, at Tenant’s expense, as long as Landlord notified Tenant no less than three (3) days prior to the move; and (xiv) prior to the commencement of any move, both Tenant and its moving contractor shall execute Landlord’s moving guidelines to evidence their respective agreement with the foregoing. If applicable, Landlord shall attempt to provide one (1) elevator for Tenant’s exclusive use during Tenant’s move. Tenant shall be responsible for any damage caused to the Premises, the Building and/or the Property by Tenant or its moving contractors.
2.6 Finish Work. Landlord shall construct the Finish Work in the manner and as provided in Schedule D attached hereto.
ARTICLE 3
BASIC RENT; ADDITIONAL RENT
3.1 Basic Rent. Tenant shall pay the Basic Rent to Landlord in lawful money of the United States of America, by ACH transfer as set forth in Paragraph (19) of the Basic Lease Provisions, in equal monthly installments, in advance without notice, on the Rent Payment Dates, commencing on the Commencement Date, except that Tenant shall pay the first installment of Basic Rent upon Tenant’s execution and delivery of this Lease. If the Commencement Date is not a Rent Payment Date, the Basic Rent for the month in which the Commencement Date occurs will be prorated and Tenant shall pay such prorated amount to Landlord on the Commencement Date.
3.2 Additional Rent. In addition to the Basic Rent, Tenant shall pay and discharge when due, as additional rent (“Additional Rent”), all other amounts, liabilities and obligations which Tenant herein agrees to pay to Landlord, together with all interest, penalties and costs which may be added thereto pursuant to the terms of this Lease.
3.3 Late Charge. If any installment of Basic Rent or Additional Rent is not paid when due, Tenant shall pay to Landlord, on demand, a late charge equal to five percent (5%) of the amount unpaid. Notwithstanding the foregoing, Tenant shall not be required to pay the foregoing late charge amount the first time Tenant is late during each twelve (12) month period (commencing from the Commencement Date) of the Term, unless Tenant has been given ten (10) days’ notice and has failed to make a payment of Basic Rent or Additional Rent within such ten (10) day period. The late charge is not intended as a penalty but is intended to compensate Landlord for the extra expense Landlord will incur to send out late notices and handle other matters resulting from the late payment. In addition, any installment or installments of Basic Rent or Additional Rent that are not paid by the date when due, and such failure continues for five (5) days after written notice thereof is delivered to Tenant, will bear interest at the lesser of: (i) four (4) percentage points over the Prime Rate, or (ii) the highest legal rate permitted by law. Any interest due as set forth in the immediately preceding sentence shall be calculated from the due date of the delinquent payment until the date of payment, which interest will be deemed Additional Rent and shall be payable by Tenant upon demand by Landlord.
3.4 Prorating Rent. If any Lease Year consists of a period of less than twelve (12) full calendar months, payments of Basic Rent and Additional Rent will be prorated on the basis of a 365-day year, unless otherwise provided.
3.5 No Abatement or Set-Off. Except as herein provided, Tenant shall pay to Landlord, at Landlord’s address for notices hereunder, or such other place as Landlord may from time to time designate in writing, without any offset, set-off, counterclaim, deduction, defense, abatement, suspension, deferment or diminution of any kind (i) the Basic Rent, without notice or demand, (ii) Additional Rent, and (iii) all other sums payable by Tenant hereunder. Except as otherwise expressly provided in this Lease, this Lease will not terminate, nor will Tenant have any right to terminate or avoid this Lease or be entitled to the abatement of any Basic Rent, Additional Rent or other sums payable hereunder or any reduction thereof, nor will the obligations and liabilities of Tenant hereunder be in any way affected for any reason. The obligations of Tenant hereunder are separate and independent covenants and agreements.
3.6 Invoices. If Landlord issues monthly or other periodic rent billing statements to Tenant, the issuance or non-issuance of such statements will not affect Tenant’s obligation to pay the Basic Rent and the Additional Rent set forth in Sections 4.3 and 5.3, all of which are due and payable on the Rent Payment Dates.
ARTICLE 4
REAL ESTATE TAXES
4.1 Taxes. Tenant shall pay to Landlord Tenant’s Proportionate Share of the amount by which the Taxes for any Lease Year during the Term exceed the Base Taxes; provided, however, that if any special assessments may be paid in installments, Landlord may elect to pay same over the longest period allowed by law. Tenant’s Proportionate Share of the Taxes for less than a full Lease Year will be prorated.
4.2 Landlord’s Tax Statement. As soon as reasonably possible after the first day of the Lease Year following the Lease Year in which the Base Period occurs and thereafter as soon as reasonably practical after the end of each succeeding Lease Year, Landlord shall determine or estimate the amount by which the Taxes for the Lease Year in question will exceed the Base Taxes (the “Projected Taxes”) and shall submit such information to Tenant in a written statement (“Landlord’s Tax Statement”). Landlord shall use reasonable efforts to issue Landlord’s Tax Statement within one hundred twenty (120) days following the end of each Lease Year. Landlord’s failure to render Landlord’s Tax Statement for any Lease Year will not prejudice Landlord’s right to thereafter render Landlord’s Tax Statement with respect to such Lease Year or with respect to any other Lease Year, nor will the rendering of any Landlord’s Tax Statement prejudice Landlord’s right to thereafter render a revised Landlord’s Tax Statement for the applicable Lease Year. Notwithstanding the foregoing, Tenant’s obligation to render payment with regard to any such Landlord’s Tax Statement shall be subject to the provisions of Section 29.3.
4.3 Monthly Tax Payment. From and after the Commencement Date, commencing on the first Rent Payment Date following the submission of Landlord’s Tax Statement and continuing thereafter on each successive Rent Payment Date until Landlord renders the next Landlord’s Tax Statement, Tenant shall pay to Landlord on account of its obligation under Section 4.1, a sum equal to one-twelfth (1/12) of Tenant’s Proportionate Share of the Projected Taxes for such Lease Year (the “Monthly Tax Payment”). Tenant’s first Monthly Tax Payment after receipt of Landlord’s Tax Statement shall be accompanied by the payment of an amount equal to the product of the number of full months, if any, within the Lease Year which have elapsed prior to such first Monthly Tax Payment, times the Monthly Tax Payment; minus any Additional Rent already paid by Tenant on account of its obligation under Section 4.1 for such Lease Year. No more than twice during any Lease Year, Landlord may revise Landlord’s Tax Statement and adjust Tenant’s Monthly Tax Payment to reflect Landlord’s revised estimate, in which event Tenant shall pay, along with the next monthly payment due, the difference (if any) between the aggregate amount of Tenant’s Monthly Tax Payments theretofore made on account of its obligation under Section 4.1 for such Lease Year, and the amount which would have been payable by Tenant during such Lease Year had Landlord billed Tenant for the revised Monthly Tax Payment for such prior elapsed months during such Lease Year. Thereafter, Tenant shall pay the revised monthly estimate in accordance with the provisions of this Section 4.3.
4.4 Reconciliation. Landlord shall use reasonable efforts to deliver to Tenant within one hundred twenty (120) days after the end of each Lease Year, Landlord’s final determination of the amount by which the Taxes for the Lease Year in question exceed the Base Taxes and shall submit such information to Tenant in a written statement (“Landlord’s Final Tax Statement”). Each Landlord’s Final Tax Statement must reconcile the payments made by Tenant in the Lease Year in question with Tenant’s Proportionate Share of the amount by which actual Taxes imposed for the period covered thereby exceed Base Taxes. Any balance due to Landlord shall be paid by Tenant within twenty (20) days after Tenant’s receipt of Landlord’s Final Tax Statement; any surplus due to Tenant shall be applied by Landlord against the next accruing monthly installment(s) of Additional Rent due under this Article 4. If the Term has expired or has been terminated, Tenant shall pay the balance due to Landlord or, alternatively, Landlord shall refund the surplus to Tenant, whichever the case may be, within twenty (20) days after Tenant’s receipt of Landlord’s Final Tax Statement; provided, however, that if the Term terminated as a result of an Event of Default by Tenant, Landlord will have the right to retain such surplus to the extent Tenant owes Landlord any Basic Rent or Additional Rent.
4.5 Refund of Taxes. Landlord will have the right, but not the obligation, to seek to obtain a lowering of the assessed valuation of the Property. Landlord may employ whatever individuals and firms Landlord, in its sole judgment, deems necessary to undertake such endeavor. Tenant shall, at no cost to Tenant, cooperate with Landlord and its representatives in all such endeavors. If Landlord receives a refund of Taxes in respect of a Lease Year and if Tenant paid Additional Rent based on the Taxes paid prior to the refund, Landlord shall first deduct from such tax refund any expenses, including, but not limited to, attorneys’ fees and appraisal fees, incurred in obtaining such tax refund (to the extent such expenses were not already billed to Tenant as part of Taxes), and out of the remaining balance of such tax refund, Landlord shall credit Tenant’s Proportionate Share of such refund against the next accruing monthly installment(s) of Additional Rent, or if the Term has expired, Landlord shall pay to Tenant Tenant’s Proportionate Share of such refund within thirty (30) days after receipt thereof by Landlord; provided, however, that (i) if the Term terminated as a result of a default by Tenant, Landlord will have the right to retain Tenant’s Proportionate Share of the refund to the extent Tenant owes Landlord any Basic Rent or Additional Rent, and (ii) Tenant’s Proportionate Share of such refund will in no event exceed the amount of Additional Rent actually paid by Tenant on account of the Taxes for the Lease Year in question. Any expenses incurred by Landlord in contesting the validity or the amount of the assessed valuation of the Property or any Taxes, to the extent not offset by a tax refund, will, for the purpose of computing the Additional Rent due Landlord or any credit due to Tenant hereunder, be included as an item of Taxes for the tax year in which such contest is finally determined. Notwithstanding anything to the contrary contained in this Lease, Tenant will have no right to contest or appeal the validity of any Taxes or the assessed valuation of the Property.
4.6 Payment Pending Appeal. While proceedings for the reduction in assessed valuation for any year are pending, the computation and payment of Tenant’s Proportionate Share of Taxes will be based upon the original assessments for such year.
4.7 Taxes on Tenant’s Improvements. Tenant shall also pay to Landlord, upon demand, the amount of all increases in Taxes and/or all assessments or impositions made, levied or assessed against or imposed upon the Property or any part thereof which are attributable to additions or improvements (except the Finish Work) in, on or about the Premises made by or on behalf of Tenant, or which in whole or in part belong to Tenant.
4.8 Survival. In no event will any adjustment in Tenant’s obligation to pay Additional Rent under this Article 4 result in a decrease in the Basic Rent. Tenant’s obligation to pay Additional Rent, and Landlord’s obligation to credit and/or refund to Tenant any amount, pursuant to the provisions of this Article 4, will survive the Expiration Date, subject to the provisions of Section 29.3.
4.9 Bills and Statements. The provisions of Section 29.3 apply to Landlord’s Tax Statement.
4.10 Rent Tax. If an excise, transaction, sales, or privilege tax or other tax or imposition (other than federal, state or local income or estate taxes) is levied or assessed against Landlord or the Property on account of or measured by, in whole or in part, the Basic Rent and/or Additional Rent expressly reserved hereunder as a substitute for or in addition to, in whole or in part, Taxes or if any assessments and/or taxes are levied or assessed against Landlord or the Property on account of or as a result of the operation and/or existence of Tenant’s business, then Tenant shall pay to Landlord upon demand: (i) the amount of such excise, transaction, sales or privilege tax or other tax or imposition lawfully assessed or imposed as a result of the Basic Rent and/or Additional Rent accruing under this Lease; and (ii) the amount of any assessments and/or taxes levied or assessed against Landlord or the Property on account of or as a result of the operation and/or existence of Tenant’s business in the Property.
ARTICLE 5
OPERATING EXPENSES
5.1 Operating Expenses.
(a) Landlord’s CAM Expenses, the Utility Expenses and the Insurance Expenses are collectively referred to as “Landlord’s Operating Expenses” and shall be determined and paid in accordance with the provisions of this Article 5.
(b) Tenant shall pay to Landlord Tenant’s Proportionate Share of the amount by which Landlord’s CAM Expenses for any Lease Year during the Term exceeds the Base CAM Expenses. Tenant’s Proportionate Share of Landlord’s CAM Expenses for less than a full Lease Year will be prorated.
(c) Tenant shall pay to Landlord Tenant’s Proportionate Share of the amount by which the Utility Expenses for any Lease Year during the Term exceeds the Base Utility Expenses. Tenant’s Proportionate Share of the Utility Expenses for less than a full Lease Year will be prorated.
(d) Tenant shall pay to Landlord Tenant’s Proportionate Share of the amount by which the Insurance Expenses for any Lease Year during the Term exceeds the Base Insurance Expenses. Tenant’s Proportionate Share of the Insurance Expenses for less than a full Lease Year will be prorated.
(e) Notwithstanding anything to the contrary contained in this Section 5.1, Tenant shall not be obligated to pay Controllable Operating Expenses (as hereinafter defined) for any Lease Year which are more than one hundred five percent (105%) of the Controllable Operating Expenses for the immediately prior Lease Year, plus the aggregate amount of the Excess Controllable Operating Expenses for any prior Lease Years, if any (the “Expense Cap”). If the Controllable Operating Expenses for any Lease Year exceed the Expense Cap for such Lease Year (the “Excess Controllable Operating Expenses”), then Landlord shall carry forward such Excess Controllable Operating Expenses to the first Lease Year in which the Controllable Operating Expenses for such Lease Year are less than the Expense Cap for such Lease Year (but only up to the amount of the Expense Cap for such Lease Year). Landlord may add the Excess Controllable Operating Expenses to the Landlord’s Operating Expenses (but only up to the amount of the Expense Cap) for as many Lease Years as necessary until the Excess Controllable Operating Expenses are paid in full by Tenant. For purposes hereof, the term “Controllable Operating Expenses” shall mean the cost of (1) maintaining and repairing the HVAC systems (other than the cost of new parts and equipment), (2) Landlord’s general repair and maintenance obligations under this Lease (other than the cost of new parts and equipment), (3) providing the Janitorial Services set forth in Section 9.7, and (4) landscaping services (other than snow removal). Notwithstanding anything to the contrary contained in this Section 5.1(e), Controllable Operating Expenses shall not be subject to the Expense Cap for any Controllable Operating Expenses which increases as a result of any of the following events: (1) the labor unions providing services relating to a Controllable Operating Expense enter into a new labor union contract, (2) the vendors providing the services relating to a Controllable Operating Expense unionize and enter into a labor union contract, or (3) any Excusable Delay.
5.2 Landlord’s Expense Statement. As soon as reasonably possible after the first day of the Lease Year following the Lease Year in which the Base Period occurs and thereafter as soon as practical after each succeeding Lease Year during the Term, Landlord shall determine or estimate the amount by which Landlord’s Operating Expenses for the Lease Year in question will exceed the Base Operating Expenses (“Landlord’s Estimated Operating Expenses”) and shall submit such information to Tenant in a written statement (“Landlord’s Expense Statement”). Landlord shall use reasonable efforts to issue Landlord’s Expense Statement within one hundred twenty (120) days following the end of each Lease Year. Landlord’s failure to render Landlord’s Expense Statement for any Lease Year will not prejudice Landlord’s right to thereafter render Landlord’s Expense Statement with respect to such Lease Year or with respect to any other Lease Year, nor will the rendering of any Landlord’s Expense Statement prejudice Landlord’s right to thereafter render a revised Landlord’s Expense Statement for the applicable Lease Year. Notwithstanding the foregoing, Tenant’s obligation to render payment with respect to any such Landlord’s Expense Statement shall be subject to the provisions of Section 29.3.
5.3 Monthly Expense Payment. From and after the Commencement Date, commencing on the first Rent Payment Date following the submission of Landlord’s Expense Statement and continuing thereafter on each successive Rent Payment Date until Landlord renders the next Landlord’s Expense Statement, Tenant shall pay to Landlord on account of its obligation under Section 5.1, a sum equal to one-twelfth (1/12) of Tenant’s Proportionate Share of Landlord’s Estimated Operating Expenses for such Lease Year (the “Monthly Expense Payment”). Tenant’s first Monthly Expense Payment after receipt of Landlord’s Expense Statement shall be accompanied by the payment of an amount equal to the product of the number of full months, if any, within the Lease Year which have elapsed prior to such first Monthly Expense Payment, times the Monthly Expense Payment, minus any Additional Rent already paid by Tenant on account of its obligation under Section 5.1 for such Lease Year. No more than twice during any Lease Year, Landlord may revise Landlord’s Expense Statement and adjust Tenant’s Monthly Expense Payment to reflect Landlord’s revised estimate, in which event Tenant shall pay, along with the next monthly payment due, the difference (if any) between the aggregate amount of Tenant’s Monthly Expense Payments theretofore made on account of its obligation under Section 5.1 for such Lease Year, and the amount which would have been payable by Tenant during such Lease Year had Landlord billed Tenant for the revised Monthly Expense Payment for such prior elapsed months during such Lease Year. Thereafter, Tenant shall pay the revised monthly estimate in accordance with the provisions of this Section 5.3.
5.4 Reconciliation. Landlord shall use reasonable efforts to deliver to Tenant, within one hundred twenty (120) days after the end of each Lease Year, Landlord’s final determination of the amount by which Landlord’s Operating Expenses for the Lease Year in question exceed the Base Operating Expenses and shall submit such information to Tenant in a written statement (the “Annual Expense Reconciliation”). Each Annual Expense Reconciliation must reconcile the aggregate of all Monthly Expense Payments made by Tenant in the Lease Year in question with Tenant’s Proportionate Share of the amount by which actual Landlord’s Operating Expenses for the period covered thereby exceed Base Operating Expenses. Any balance due to Landlord shall be paid by Tenant within twenty (20) days after Tenant’s receipt of the Annual Expense Reconciliation; any surplus due to Tenant shall be applied by Landlord against the next accruing monthly installment(s) of Additional Rent due under this Article 5. If the Term has expired or has been terminated, Tenant shall pay the balance due to Landlord or, alternatively, Landlord shall refund the surplus to Tenant, whichever the case may be, within twenty (20) days after Tenant’s receipt of the Annual Expense Reconciliation; provided, however, that if the Term terminated as a result of an Event of Default by Tenant, Landlord will have the right to retain such surplus to the extent Tenant owes Landlord any Basic Rent or Additional Rent.
5.5 Audit. For ninety (90) days following Landlord’s delivery to Tenant of the Annual Expense Reconciliation, Tenant will have the right, during normal business hours and upon no less than five (5) days prior written notice to Landlord, to examine Landlord’s books and records for the purpose of confirming the Annual Expense Reconciliation, which records will be either located in the State of New Jersey or provided through a cloud-based storage service, such as Dropbox. Tenant will be deemed to have accepted the Annual Expense Reconciliation unless, within fifteen (15) days after Tenant’s examination of Landlord’s books and records, Tenant delivers an objection notice to Landlord specifying in detail why Tenant believes such Annual Expense Reconciliation is incorrect. Notwithstanding anything to the contrary contained in this Section 5.5, Tenant will not be permitted to examine Landlord’s books and records or to dispute any Annual Expense Reconciliation unless (i) Tenant has paid to Landlord all amounts due as shown on such Annual Expense Reconciliation, and (ii) Tenant has signed a confidentiality agreement acceptable to Landlord. Tenant shall not engage the services of any legal counsel or other professional consultant who charges for its services on a so-called contingency fee basis for the purpose of reviewing Landlord’s books and records. Landlord shall maintain its books and records for each Annual Expense Reconciliation for no less than five (5) years. If (i) such audit discloses an overcharge to Tenant which is in excess of five percent (5%) of the amount charged to Tenant, (ii) Landlord disputes such audit results, and (iii) any such dispute is not settled by Landlord and Tenant within thirty (30) days after the dispute arises, or such longer period to which they may mutually agree, then such dispute may, at the option of either party, be submitted to arbitration in accordance with the terms of Section 29.18 of this Lease. If Tenant’s audit discloses any overcharge to Tenant and Landlord agrees with such findings, or, in the event of a dispute submitted to arbitration pursuant to the immediately preceding sentence, the arbitrator rules in favor of Tenant, then the amount of the overcharge shall be applied by Landlord against the next accruing monthly installment(s) of Additional Rent due under this Article 5, unless the surplus equals or exceeds Ten Thousand and 00/100 ($10,000.00) Dollars, in which case Tenant may require that Landlord refund such surplus to Tenant within thirty (30) days after Tenant’s notice thereof to Landlord. If the Term has expired or has been terminated, Landlord shall refund the surplus to Tenant within thirty (30) days after receipt of Tenant’s audit results. In addition, if the amount of Landlord’s Operating Expenses as shown on the Annual Expense Reconciliation is five percent (5%) or more in excess of the amount actually owed by Tenant, then, in addition to refunding to Tenant the amount of any such overcharges so disclosed (with interest on such overcharges at the Prime Rate), Landlord shall also pay to Tenant the reasonable, actual, third-party cost of Tenant’s audit in an amount not to exceed Five Thousand and 00/100 ($5,000.00) Dollars.
5.6 Survival. In no event will any adjustment in Tenant’s obligation to pay Additional Rent under this Article 5 result in a decrease in Basic Rent. Tenant’s obligation to pay Additional Rent, and Landlord’s obligation to credit and/or refund to Tenant any amount, pursuant to this Article 5 will survive the Expiration Date.
5.7 Operating Expenses With Respect to Tenant. Tenant shall also pay to Landlord, upon demand, the amount of any increase in Landlord’s Operating Expenses which is attributable to Tenant’s use or manner of use of the Premises, to activities conducted on or about the Premises by Tenant or on behalf of Tenant or to any additions, improvements or alterations to the Premises made by or on behalf of Tenant.
5.8 Bills and Statements. The provisions of Section 29.3 apply to Landlord’s Expense Statement.
ARTICLE 6
ELECTRICITY
6.1 Cost of Electricity. The electricity consumed in the Premises will be measured by submeters, check meters or other measuring devices, which may be installed by Landlord in Landlord’s sole discretion. If direct meters are installed, Tenant shall be responsible for payment of all charges directly to the utility company, such charges to include, without limitation, usage charges, installation charges, meter reading charges and demand factors. From and after the Commencement Date, Tenant shall pay Landlord, within ten (10) days after delivery of a bill therefor, all charges, including, without limitation, usage charges, demand factors and all other charges calculated at the rate structure then existing of the utility company supplying electrical energy to the Building for Tenant’s consumption as determined by such meter. Landlord shall include in Landlord’s CAM Expenses the cost to read the submeter or check meter.
6.2 Tenant Not to Exceed Capacity. Tenant’s use of electric energy in the Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Premises. Landlord shall supply not less than six (6) watts per rentable square foot (total demand load) of electrical current to the Premises, exclusive of electrical current supplied to and used to run the heating, ventilation and air conditioning systems serving the Premises other than supplemental HVAC units installed by Tenant. In order to insure that such capacity is not exceeded and to avert possible adverse effects upon the Building electric service, Tenant shall not, without Landlord’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned, connect any fixtures, appliances or equipment to the Building electric distribution system or make any alteration or addition to the electric system of the Premises. Any changes requested by Tenant must be sent in writing to Landlord, and if, in the sole judgment of Landlord, such changes will not cause or create a dangerous or hazardous condition or damage or injury to the Building, or entail excessive or unreasonable alterations or repairs, or interfere with or disturb other tenants or occupants and/or the service then or thereafter to be supplied to tenants or occupants, Landlord will, at the sole cost and expense of Tenant, make such changes. Tenant shall pay Landlord for such costs and expenses within twenty (20) days of Tenant’s receipt of an invoice therefor.
6.3 Utility Deregulation. If permitted by law, Landlord will have the right to choose the service providers that deliver electricity to the Premises. Tenant shall cooperate with Landlord and such service providers, including granting reasonable access to the electric lines, feeders, risers, wiring, and any other machinery within the Premises. If the law prohibits Landlord from choosing the service providers that deliver electricity to the Premises, Tenant’s choice of such service providers is subject to Landlord’s prior written consent, and no such service provider will be permitted to deliver service to or otherwise affect the Building’s electric system without such consent.
6.4 Landlord Not Liable. Landlord will not be responsible for any loss, damage or expense, and Tenant will not be entitled to any rent abatement, diminution, set-off, or any other relief from its obligations hereunder, on account of any change in the quantity or character of the electric service or any cessation or interruption of the supply of electricity to the Premises. Notwithstanding anything to the contrary in this Section 6.4, in the event any such cessation or interruption of the supply of electricity to the Premises is caused by the negligent or willful acts of Landlord and/or Landlord’s agents, such cessation or interruption shall continue for three (3) consecutive days and, as a direct result thereof, Tenant is unable to use any portion of the Premises for the conduct of its business, the Rent shall be abated for the portion of the Premises affected thereby, for the period from the fourth (4th) day following the commencement of such cessation or interruption to the date such failure, delay or inability is cured.
ARTICLE 7
MAINTENANCE; ALTERATIONS; REMOVAL OF TRADE FIXTURES
7.1 Tenant’s Maintenance. Tenant shall, at its sole cost and expense, keep the Premises in good order and condition (except for ordinary wear and tear and damage caused by casualty) and, except as provided in Section 7.2, shall make all non-structural repairs, alterations, renewals and replacements and shall take such other action as may be necessary or appropriate to keep and maintain the Premises in good order and condition. Except as expressly provided in this Lease, Landlord will not be obligated to maintain, alter or repair the Premises. All repairs made by Tenant must be at least equal in quality to the original work.
7.2 Landlord’s Repairs. Landlord shall cause the completion of all repairs and replacements to the foundation, the bearing walls, the structural columns and beams, and other structural portions of the Premises, the exterior walls, the exterior windows and doors and the roof of the Building, all mechanical, electrical, lighting, plumbing, HVAC systems within and serving the Building (other than supplemental HVAC units and the duct distribution systems and VAV boxes within the Premises) and Common Areas, including but not limited to all fire alarm and fire protection systems servicing the Common Areas; provided, however, that if such repairs and replacements (including repairs and replacements with respect to the Property) are necessitated by the intentional acts or negligence of Tenant or Tenant’s Visitors, Tenant shall reimburse Landlord, upon demand, for the reasonable cost thereof. The costs and expenses incurred by Landlord in connection with such repairs and replacements will be included in Landlord’s Operating Expenses to the extent permitted by the terms of this Lease.
7.3 Requirements for Tenant’s Maintenance. All maintenance and repair, and each addition, improvement or alteration, performed by or on behalf of Tenant must be (a) completed expeditiously in a good and workmanlike manner, and in compliance with all applicable Legal Requirements and Insurance Requirements, (b) completed free and clear of all Liens, and (c) performed in a manner and by contractors approved by Landlord to the extent such work involves any work to any electrical, mechanical, plumbing or other system of the Building, any work to the outside of the Building, any work to the roof of the Building or any work to any structural element of the Building, which approval shall not be unreasonably withheld, delayed or conditioned.
7.4 (a) Permitted Alterations. Tenant may, without consent but upon prior written notice to Landlord and submission to Landlord of plans and specifications therefor (if prepared and in connection therewith), make interior, non-structural additions, improvements or alterations to the Premises having an aggregate cost not to exceed One Hundred Thousand and 00/100 Dollars ($100,000.00), so long as the same do not (i) require a building permit, (ii) affect, alter, interfere with or disrupt any of the electrical, mechanical, plumbing or other system of the Building, (iii) affect the outside appearance of the Building, (iv) affect the roof of the Building, or (v) affect any structural element of the Building. In addition, Tenant may, without consent of Landlord, perform cosmetic alterations to the interior of the Premises, such as installing and replacing wall and floor coverings.
(b) Landlord’s Consent to Alterations. Tenant shall not make any addition, improvement or alteration outside the Premises to the Land or the Building. In addition, Tenant shall not make any addition, improvement or alteration of the Premises (i) having an aggregate cost in excess of One Hundred Thousand and 00/100 Dollars ($100,000.00), (ii) requiring a building permit, (iii) affecting, altering, interfering with or disrupting any electrical, mechanical, plumbing or other system of the Building, or (iv) affecting the outside appearance of the Building, the roof of the Building, the ingress to or the egress from the Premises and/or any structural element of the Building (such work, “Major Work”), unless Tenant submits to Landlord detailed plans and specifications therefor and Landlord approves such plans and specifications in writing (which approval will be at Landlord’s sole and absolute discretion). Tenant shall reimburse Landlord, upon demand, for its actual third-party costs for reviewing any plans for the Major Work. Notwithstanding the foregoing, Landlord hereby consents to the construction of a communicating stairwell between the 2nd and 3rd floors of the Premises, which may include penetration into the floor slab of the Building in order to complete and secure the installation of said stairwell, provided, that such work shall be performed in accordance with the other requirements of this Lease (including, but not limited to, Landlord’s contractors performing the work in connection with the staircase), and Landlord having the option to cause Tenant to remove the staircase at the expiration of the Term in accordance with Section 7.5.
(c) Contractors for Major Work. Notwithstanding anything contained in this Lease to the contrary, Landlord reserves the right to require Tenant to use Landlord’s designated engineers and contractors in connection with any Major Work described in clauses (iii) and (iv) of Section 7.4(b) above, provided, that the costs charged by Landlord’s designated contractors are commercially competitive with the amounts charged for similar work by other qualified contractors providing similar services in Mercer County, New Jersey.
7.5 (a) Surrender of Alterations. Each addition, improvement and alteration to the Premises (each a “Tenant Improvement”) will, upon installation, become the property of Landlord and be deemed to be a part of the Building unless Landlord, by written notice to Tenant at least thirty (30) days prior to the Expiration Date, elects to relinquish Landlord’s right to such Tenant Improvement. If Landlord elects to relinquish its right to any Tenant Improvement, Tenant shall insure such Tenant Improvement in accordance with Section 14.1(a)(ii), and, prior to the Expiration Date, remove such Tenant Improvement and promptly repair any damage to the Premises or the Building caused by the installation or removal of such Tenant Improvement and restore the Premises to the condition existing prior to the installation of such Tenant Improvement. Notwithstanding anything to the contrary contained in this Section (a), without the need of Landlord giving Tenant notice, prior to the Expiration Date, Tenant shall remove any specialty improvements or above standard improvements (i.e., raised flooring, built-in bookcases, wall coverings, etc.) and Tenant shall repair any damage to the Premises caused by such removal. Subject to the immediately preceding sentence, Tenant shall not be required to remove any of the Finish Work.
(b) Removal of Improvements. Tenant may install in, and remove from, the Premises any trade equipment, machinery and personal property belonging to Tenant (such trade equipment, machinery and personal property will not become the property of Landlord), provided that (i) Tenant shall repair all damage caused by such installation or removal; (ii) Tenant shall not install any equipment, machinery or other items on the roof of the Building or make any openings in the roof; and (iii) Tenant shall not install any equipment, machinery or other items on the floor, walls or ceiling of the Premises that exceed the load bearing capacity or compromise the structural integrity of the floor, walls or ceiling of the Premises.
ARTICLE 8
USE OF PREMISES
8.1 Permitted Use. Tenant shall not use or permit the use of the Premises for any purpose other than the Permitted Use specified in the Basic Lease Provisions.
8.2 Prohibited Uses. Tenant shall not use or permit the use of the Premises in any manner or for any purpose or do, bring or keep anything, or permit anything to be done, brought or kept in the Premises that (a) violates any Legal Requirement or Insurance Requirement, (b) could overload the electrical or mechanical systems of the Building or exceed the design criteria, structural integrity, character, appearance or fair market value of the Building, (c) in the reasonable judgment of Landlord, may impair or interfere with the proper and economic heating or air conditioning of the Building; or (d) in the reasonable judgment of Landlord, may interfere with the use or occupancy of any portion of the Building outside of the Premises by Landlord or any other tenant or occupant of the Building. Landlord represents that the Permitted Use does not violate any Insurance Requirements required to be carried by Landlord with respect to the Property. Landlord hereby represents that the floor is designed to an eighty (80) pounds per square foot load capacity.
8.3 Dispensing Food. Tenant shall have the right to permit the dispensing, preparation, or serving of any beverages or food in the Premises from the kitchenette area of the Premises. Tenant shall only be permitted to warm food using a microwave oven in the kitchenette area, and in no event shall Tenant cook any food in such area.
8.4 Parking. (a) Provided Tenant is not in default of its obligations under this Lease, Tenant will have a nonexclusive revocable license during the term of this Lease to park up to the number of cars indicated in the Basic Lease Provisions in the parking area of the Property (the “License”). Landlord will not be responsible to Tenant for enforcing the License or for violation of the License by third parties. Any of the following actions by Tenant and/or Tenant’s Visitors will be deemed a default under this Lease (subject to the notice and cure provisions set forth in Section 19.1(p)): (i) the use of more parking spaces than the number indicated in the Basic Lease Provisions; (ii) parking in spaces designated for the exclusive use of other parties; (iii) parking outside of marked parking spaces; (iv) the maintenance, repair or cleaning of any vehicle in the parking area; and (v) the violation of any other parking rules and regulations promulgated by Landlord. If the number of parking spaces in the parking area of the Property is reduced by circumstances beyond the reasonable control of Landlord, the number of spaces indicated in the Basic Lease Provisions will be reduced proportionately. Landlord shall use commercially reasonable efforts to replace the parking spaces lost pursuant to the immediately preceding sentence.
(b) Landlord will have no liability for any damage to vehicles on the Property or for any loss of property from within such vehicles, or for any injury suffered by Tenant’s employees or Tenant’s Visitors, except to the extent such loss, damage or injury is caused solely by Landlord’s gross negligence or willful misconduct. Tenant shall advise its employees, Tenant’s Visitors, and any subtenant’s employees of the requirements of this Section 8.4 and Tenant shall be responsible for compliance by such parties with such requirements. If Tenant or Tenant’s Visitors park illegally or in areas designated for use by others, or in driveways, fire lanes or areas not striped for general parking or otherwise violate any parking rules and regulations promulgated by Landlord, Landlord may, at Tenant’s sole cost and expense, tow such vehicles away from the Property and/or attach violation notices to such vehicles. Any amount due from Tenant pursuant to this Article will be deemed Additional Rent and Tenant shall pay such amounts to Landlord upon demand. If Landlord tows any vehicles pursuant to this Section 8.4(b), Tenant shall indemnify and hold harmless Landlord from and against all liabilities, losses, claims, demands, costs and expenses (including attorneys’ fees and expenses) arising, or alleged to arise from, or in connection with, such towing. Landlord reserves the right, from time to time, to assign and re-assign to Tenant and other tenants of the Building specific parking spaces, and Tenant agrees to be bound thereby. Nothing contained herein shall be deemed to impose any obligation on Landlord to police the parking area.
8.5 Permits, Licenses and Authorizations. Tenant shall obtain and maintain in full force and effect, at its sole cost and expense, all permits, licenses or authorizations of any nature required in connection with the operation of Tenant’s business at the Premises.
ARTICLE 9
LANDLORD’S SERVICES
9.1 Landlord’s Services. Provided Tenant is not in default under any of the provisions of this Lease beyond applicable grace periods provided herein, Landlord shall furnish to Tenant the services set forth in this Article 9. Tenant acknowledges that Landlord is required to furnish air cooling, heat, ventilation, building maintenance and other facilities and services (collectively “Building Services”) only during Building Hours. If Tenant desires air cooling, heat and ventilation outside Building Hours (such period referred to herein as “Extra Hours”), Landlord will provide air cooling, heat and ventilation to Tenant during such Extra Hours provided that: (i) Tenant pays to Landlord a special charge (“Extra Hours Charge”), and (ii) Tenant’s request for Extra Hours air cooling, heat and ventilation is received by Landlord prior to 12:00 p.m. on the day for which such Extra Hours air cooling, heat and ventilation is requested, unless such day is a Saturday, Sunday or Building Holiday, in which case such request must be received prior to 12:00 p.m. on the last business day preceding such Saturday, Sunday or Building Holiday. The Extra Hours Charge will be a standard hourly rate determined by Landlord from time to time. The initial Extra Hours Charge will be Seventy-Five and 00/100 Dollars ($75.00) per hour and is subject to a minimum four (4) hour billing period. Tenant shall pay the Extra Hours Charge to Landlord within thirty (30) days after receipt of a statement therefor.
9.2 Elevators. Tenant will have the nonexclusive right to use passenger elevators in the Building, if applicable, to obtain access to the Premises at all times, except during reasonable closures for breakdowns, repairs, or maintenance. Landlord will have no liability for any such closures. If the Building has a freight elevator, Tenant may use it only during times approved in advance by Landlord.
9.3 Heating and Air Cooling. Landlord shall furnish heat, when and as required by law, and air cooling during Building Hours when, in the reasonable judgment of Landlord, it is required for the comfortable occupancy of the Premises. For purposes of this Lease, comfortable occupancy of the Premises shall be defined as Indoor Summer Conditions: 74 degrees (plus or minus 2 degrees) Fahrenheit drybulb/50% relative humidity and Indoor Winter Conditions: 72 degrees (plus or minus 2 degrees) Fahrenheit drybulb. Landlord shall provide ventilation for the Premises during Building Hours. Tenant shall cooperate fully with Landlord and abide by all regulations and requirements that Landlord reasonably prescribes for the proper functioning and protection of its heating, air cooling and ventilation systems. Tenant shall not construct any partitions or other obstructions that interfere with Landlord’s access to Landlord’s mechanical installations, including, but not limited to, air cooling, fans, ventilating and machine rooms and electrical closets, and ceiling and plenum installations. Tenant, its agents, employees and contractors shall not enter any enclosures containing Landlord’s mechanical installations or tamper, adjust, touch or otherwise affect such mechanical installations. Tenant shall keep all windows in the Premises closed when the air cooling system is in operation.
9.4 Water. Landlord shall furnish adequate hot and cold water at standard Building temperatures to the Building for drinking, lavatory and cleaning purposes, the cost of which shall be included in Landlord’s CAM Expenses.
9.5 Common Area Maintenance. Landlord shall furnish electrical lighting, heating, ventilation, air conditioning and janitorial services to the Common Areas, and shall be responsible for all maintenance, repair and replacements to the Common Areas, the cost of which shall be included in Landlord’s CAM Expenses.
9.6 Building Directory. At Tenant’s request, Landlord shall include Tenant’s name in the main Building directory. Tenant shall promptly reimburse Landlord for the cost of any changes made to such listing at Tenant’s request.
9.7 (a) Office Cleaning. Landlord shall provide the janitorial services described on Schedule C attached hereto (“Janitorial Services”), provided the Premises are kept in reasonable order by Tenant. Janitorial Services will not be provided on Saturdays, Sundays or Building Holidays.
(b) Special Cleaning Services. If Tenant requests special or more frequent cleaning and janitorial services (“Special Cleaning Services”), Landlord may, upon reasonable advance notice by Tenant, elect to furnish such Special Cleaning Services and Tenant shall pay to Landlord, within ten (10) days of being billed therefor, Landlord’s charge for providing such Special Cleaning Services. Special Cleaning Services include, but are not limited to, the following: (i) excessive cleaning of permitted eating facilities (if any), including the removal of excessive garbage therefrom; (ii) cleaning of computer centers, including peripheral areas; (iii) cleaning of special equipment areas, kitchen areas, private toilets and locker rooms, medical centers and large scale duplicating rooms (if any); (iv) cleaning of areas of special security, such as storage units; (v) consumable supplies for private toilet rooms; (vi) cleaning of light fixtures; (vii) cleaning or shampooing of carpeting and the cleaning, waxing, refinishing and buffing of non-carpeted areas; (viii) stain removal; (ix) painting; and (x) removal of any refuse in excess of the amount ordinarily accumulated in routine office occupancy, as determined by Landlord.
(c) Performance of Janitorial Services. Tenant shall grant Landlord’s cleaning personnel and contractors access to the Premises from and after 5:30 p.m. on weekdays and at any time on Saturdays, Sundays and Building Holidays for the purpose of performing the Janitorial Services. Tenant shall not hinder the performance of the Janitorial Services and, if Tenant does hinder the performance of the Janitorial Services, Landlord will have no liability to Tenant on account thereof. Tenant shall supply adequate waste receptacles, cabinets and bookcases to prevent unreasonable hardship to Landlord in discharging its obligations regarding Janitorial Services. If any Legal Requirement requires trash to be separated into different components before carting (e.g., office paper, computer paper, newspaper, cans and bottles), Tenant shall comply with such requirements and shall supply adequate receptacles for each such component at Tenant’s sole expense.
9.8 Telecommunications. Subject to the Rules and Regulations of Landlord and any applicable telecommunications provider, Tenant will have access to the existing telecommunications system in the Building, if any. Tenant hereby acknowledges that the telecommunications system has been installed and is operated by one or more third-party providers, not Landlord, which third-party providers are Comcast and Verizon as of the date hereof. Landlord makes no representations or warranties with respect to the telecommunications system. Tenant acknowledges that telecommunications service may be suspended or reduced by reason of repairs, alterations, improvements, accidents, or other causes beyond the reasonable control of Landlord. Any such interruption or suspension of services will not be deemed an eviction or disturbance of Tenant’s use and possession of the Premises, nor render Landlord liable to Tenant for damages by abatement of rent or otherwise, nor relieve Tenant of any of its obligations under this Lease. Tenant may contract directly with the company providing telecommunications services to the Premises. Tenant shall pay all charges for telecommunications services before any interest or penalties are added thereto and shall furnish to Landlord, upon request, satisfactory proof of payment. Tenant may, at its option, contract with different telecommunications providers to install, maintain, replace, remove and use any communications, telephony or computer lines to the Premises in the Building, provided that each such telecommunications provider enters into a commercially reasonable access agreement with Landlord that is acceptable to Landlord. In such event, Landlord shall provide, to the extent reasonably necessary, to Tenant’s telecommunications providers access to Tenant’s proportionate share of capacity of the vertical risers, horizontal pathways, conduits, telephone riser closets, mechanical rooms and other applicable areas of the Common Areas, at no additional cost to Tenant. Notwithstanding anything to the contrary in this Section 9.8, if any such cessation or interruption of the supply of telecommunication service to the Premises is caused by the grossly negligent or willful acts of Landlord and/or Landlord’s Agents, such cessation or interruption shall continue for three (3) consecutive days and, as a direct result thereof, Tenant is unable to use any portion of the Premises for the conduct of its business, the Rent shall be abated for the portion of the Premises affected thereby, for the period from the fourth (4th) day following the commencement of such cessation or interruption to the date such failure, delay or inability is cured.
9.9 Interruption of Services. Landlord reserves the right to suspend the Building Services on account of fire, storm, explosion, strike, lockout, labor dispute, casualty or accident, acts of God, riot, war, terrorism, interference by civil or military authorities, or any other cause beyond Landlord’s control or for emergency, inspection, cleaning, repairs, replacement, alterations or improvements that Landlord reasonably deems desirable or necessary. Landlord shall use reasonable efforts to restore any Building Services suspended pursuant to this Section 9.9. Landlord will not be liable to Tenant for any costs, expenses or damages incurred by Tenant as a result of any failure to furnish any Building Services and such failure will not (i) be construed as a constructive eviction or eviction of Tenant, (ii) excuse Tenant from the performance of any of its obligations hereunder, or (iii) entitle Tenant to any abatement or offset against Basic Rent or Additional Rent. In addition, no deduction from Basic Rent or Additional Rent will be permitted on account of any Building Services not used by Tenant. Notwithstanding anything to the contrary in this Section 9.9, if such services are interrupted as a result of the gross negligence or willful acts of Landlord and/or Landlord’s Agents, such interruption shall continue for three (3) consecutive days and, as a result thereof, Tenant is unable to use any portion of the Premises for the conduct of its business, the Rent shall be abated for the portion of the Premises affected thereby, for the period from the fourth (4th) day following the commencement of such cessation or interruption to the date such failure, delay or inability is cured.
9.10 Energy Conservation. Landlord and Tenant shall comply with all mandatory and voluntary energy conservation controls and requirements imposed or instituted by the federal, state or local governments and applicable to office buildings. These controls and requirements may include, without being limited to, controls on the permitted range of temperature settings in office buildings and curtailment of the volume of energy consumed or the hours of operation of the Building. Any terms or conditions of this Lease that conflict with such controls and requirements will be suspended for the duration of such controls and requirements. Compliance with such controls and requirements will not be considered an eviction, actual or constructive, of Tenant from the Premises and will not entitle Tenant to terminate this Lease or to an abatement of any Basic Rent or Additional Rent.
ARTICLE 10
COMPLIANCE WITH REQUIREMENTS
10.1 Compliance. Tenant shall (i) comply with all Legal Requirements and Insurance Requirements applicable to the Premises and Tenant’s use thereof, and (ii) maintain and comply with all permits, licenses and other authorizations required by any governmental authority for Tenant’s use of the Premises and for the proper operation, maintenance and repair of the Premises. Landlord shall, at no cost to Landlord, join in any application for any permit or authorization with respect to Legal Requirements if such joinder is necessary. If any repairs or replacements to the structure of, or systems within, the Building are required in order for Tenant to comply with its obligations under this Section 10.1 as a result of Tenant’s specific use of the Premises (including, but not limited to, the use of the Premises for laboratory purposes or Tenant’s operation of a tissue recovery room), as opposed to general office use, Landlord shall perform such repairs or replacements and Tenant shall, upon demand, reimburse Landlord for the reasonable out-of-pocket costs and expenses incurred by Landlord in connection with such repairs or replacements. Any other alterations to the Premises required in order to comply with Legal Requirements or Insurance Requirements which are not Tenant’s responsibility under this Section 10.1 shall be performed by Landlord, at its sole cost, provided, that, such costs shall be included in Landlord’s CAM Expenses to the extent permitted in this Lease.
10.2 Increases in Insurance Premiums. Tenant shall not do, or permit to be done, anything in or to the Premises, or keep anything in the Premises that increases the cost of any insurance maintained by Landlord. Tenant shall, upon demand, pay to Landlord any such increase in insurance premiums and any other costs incurred by Landlord as a result of the negligence, carelessness or willful action of Tenant or Tenant’s Visitors. To the best of Landlord’s actual knowledge, Landlord represents that the Permitted Use will not increase the cost of any insurance maintained by Landlord.
ARTICLE 11
COMPLIANCE WITH ENVIRONMENTAL LAWS
11.1 Environmental Laws. Tenant shall comply, at its sole cost and expense, with all Environmental Laws in connection with Tenant’s use and occupancy of the Premises; provided, however, that the provisions of this Article 11 will not obligate Tenant to comply with the Environmental Laws if such compliance is required solely as a result of the occurrence of a spill, discharge or other event before the Commencement Date, or if such spill, discharge or other event was not caused by the act, negligence or omission of Tenant or Tenant’s Visitors.
11.2 Copies of Environmental Documents. Tenant shall deliver promptly to Landlord a true and complete copy of any correspondence, notice, report, sampling, test, finding, declaration, submission, order, complaint, citation or any other instrument, document, agreement and/or information Tenant submitted to, or Tenant received from, any governmental entity, department or agency in connection with any Environmental Law relating to or affecting the Premises.
11.3 Hazardous Substances and Hazardous Wastes. Tenant shall not cause or permit any “hazardous substance” or “hazardous waste” (as such terms are defined in ISRA) to be kept in the Premises, except for de minimis quantities of cleaning supplies, medicines and other materials and medical wastes used by Tenant in the ordinary course of its business and in accordance with all Legal Requirements. Tenant shall not engage in, or permit any other person or entity to engage in, any activity, operation or business in the Premises that involves the generation, manufacture, refining, transportation, treatment, storage, handling or disposal of hazardous substances or hazardous wastes, except as provided in the immediately preceding sentence.
11.4 (a) Discharge. If a spill or discharge of a hazardous substance or a hazardous waste occurs on or from the Premises, Tenant shall give Landlord prompt oral and written notice of such spill and/or discharge, setting forth in reasonable detail all relevant facts, including, without limitation, a copy of any (i) notice of a violation, or a potential or alleged violation, of any Environmental Law received by Tenant or any subtenant or other occupant of the Premises; (ii) inquiry, investigation, enforcement, cleanup, removal, or other action instituted or threatened against Tenant or any subtenant or other occupant of the Premises; (iii) claim instituted or threatened against Tenant or any subtenant or other occupant of the Premises; and (iv) notice of the restriction, suspension, or loss of any environmental operating permit by Tenant or any subtenant or other occupant of the Premises. If a spill or discharge arises out of or relates to hazardous substances or hazardous wastes that were introduced onto the Premises by Tenant or Tenant’s Visitors, then Tenant shall pay all costs and expenses relating to compliance with applicable Environmental Laws (including, without limitation, the costs and expenses of site investigations and the removal and remediation of such hazardous substance or hazardous waste).
(b) Landlord’s Cleanup Rights. Without relieving Tenant of its obligations under this Lease and without waiving any default by Tenant under this Lease, Landlord will have the right, but not the obligation, on prior notice to Tenant (to the extent practical) to take such action as Landlord deems necessary or advisable to cleanup, remove, resolve or minimize the impact of or otherwise deal with any spill or discharge of any hazardous substance or hazardous waste on or from the Premises. If a spill or discharge arises out of or relates to hazardous substances or hazardous wastes that were introduced onto the Premises by Tenant or Tenant’s Visitors, then Tenant shall, on demand, pay to Landlord all reasonable, out-of-pocket costs and expenses incurred by Landlord in connection with any action taken in connection therewith by Landlord.
11.5 (a) ISRA. If Tenant’s operations at the Premises now or hereafter constitute an “Industrial Establishment” (as defined under ISRA) or are subject to the provisions of any other Environmental Law, then Tenant agrees to comply, at its sole cost and expense, with all requirements of ISRA and any other applicable Environmental Law to the satisfaction of Landlord and the governmental entity, department or agency having jurisdiction over such matters (including, but not limited to, performing site investigations and performing any removal and remediation required in connection therewith) in connection with (i) the occurrence of the Expiration Date, (ii) any termination of this Lease prior to the Expiration Date, (iii) any closure, transfer or consolidation of Tenant’s operations at the Premises, (iv) any change in the ownership or control of Tenant, (v) any permitted assignment of this Lease or permitted sublease of all or part of the Premises or (vi) any other action by Tenant which triggers ISRA or any other Environmental Law.
(b) Compliance with ISRA. If Tenant’s operations at the Premises subject Tenant to the requirements of ISRA, then Tenant further agrees to implement and execute all of the provisions of this Section 11.5(b) in a timely manner so as to coincide with the termination of this Lease or to coincide with the vacating of the Premises by Tenant at any time during the term of this Lease. In connection with subsection (a) above, if, Tenant’s operations at the Premises subject Tenant to the requirements of ISRA, Tenant fails to obtain an unconditional Final Remediation Document (as defined in ISRA) from the New Jersey Department of Environmental Protection (“NJDEP”) or a Licensed Site Remediation Professional (as defined in ISRA), as the case may be, and evidence reasonably satisfactory to Landlord that all conditions to the effectiveness of such Final Remediation Document have been fully satisfied (including, for example, evidence that the document has been executed and delivered by all parties and, if applicable, filed with NJDEP), or if Tenant fails to otherwise comply with the provisions of ISRA prior to the Expiration Date, or if, with respect to any other Environmental Law, Tenant fails to fully comply with the applicable provisions of such other Environmental Law prior to the Expiration Date, in any of the foregoing cases, Tenant will be deemed to be a holdover tenant and shall pay rent at the rate set forth in Section 24.3 and shall continue to diligently pursue compliance with ISRA and/or such other Environmental Law. Upon Tenant’s full compliance with the provisions of ISRA or of such other Environmental Law, Tenant shall deliver possession of the Premises to Landlord in accordance with the provisions of this Lease and such holdover rent shall be adjusted as of said date. Without limiting Tenant’s obligations hereunder, if NJDEP commences an audit with respect to, or otherwise challenges or disapproves, any Final Remediation Document, Tenant shall take all actions required by NJDEP and Landlord to comply with the provisions of ISRA in connection therewith.
11.6 (a) Landlord’s ISRA Compliance. In connection with (i) any sale or other disposition of all or part of Landlord’s interest in the Premises, (ii) any change in the ownership or control of Landlord, (iii) any condemnation, (iv) any foreclosure, or (v) any other action by Landlord which triggers ISRA or any other Environmental Law, Landlord shall comply, at its sole cost and expense, with all requirements of ISRA and such other applicable Environmental Law; provided, however, that if any site investigation is required as a result of Tenant’s use and occupancy of the Premises or a spill or discharge of a hazardous substance or hazardous waste that was introduced onto the Premises by Tenant or Tenant’s Visitors, then Tenant shall pay all costs associated with such site investigation and, if any removal and remediation is required as a result of a spill or discharge of a hazardous substance or hazardous waste introduced onto the Premises by Tenant or Tenant’s Visitors, then Tenant shall, upon demand by Landlord, pay all reasonable, out-of-pocket costs associated with such removal and remediation.
(b) Tenant’s Cooperation. If, in order to comply with any Environmental Law, Landlord requires any affidavits, certifications or other information from Tenant, Tenant shall deliver the same to Landlord within ten (10) business days of Landlord’s request therefor. If Landlord’s required compliance with such Environmental Law results from Tenant’s use and occupancy of the Premises, Tenant shall solely bear the cost of any affidavits, certifications or other information required to be delivered to Landlord pursuant to the immediately preceding sentence. In all other cases, Landlord shall bear such costs.
11.7 Notices. If Landlord has given to Tenant the name and address of any holder of an Underlying Encumbrance, Tenant agrees to send to said holder a photocopy of those items given to Landlord pursuant to the provisions of Section 11.2.
11.8 Survival. Landlord’s and Tenant’s obligations under this Article 11 shall survive the expiration or earlier termination of this Lease.
11.9 North American Industry Classification System. Tenant hereby represents and warrants to Landlord, as of the date hereof, that Tenant’s operations at the Premises will have the following North American Industry Classification System (“NAICS”) code: 541219.
11.10 Landlord’s Indemnity. Landlord hereby represents that, to the best of its knowledge, as of the date of this Lease, there are no hazardous substances or hazardous wastes located on the Property which violate any Environmental Laws. Landlord shall comply with all applicable Environmental Laws, and, subject to the provisions of Section 14.4, shall indemnify, defend, and hold harmless Tenant from and against any and all liabilities, damages, claims, losses, judgments, causes of action, and reasonable costs and expenses (including the reasonable fees and expenses of counsel) that may be incurred by Tenant or threatened against Tenant, relating to or arising out of hazardous substances or hazardous wastes that were located on the Property as of the Commencement Date, or were introduced onto the Property after the Commencement Date, by the acts of Landlord or Landlord’s agents.
ARTICLE 12
DISCHARGE OF LIENS
Within thirty (30) days after receipt of notice thereof, Tenant shall discharge or bond over any Lien on the Premises, the Basic Rent, Additional Rent or any other sums payable under this Lease caused by or arising out of Tenant’s acts or Tenant’s failure to perform any obligation under this Lease.
ARTICLE 13
PERMITTED CONTESTS
Tenant may, by appropriate proceedings, contest the amount, validity or application of any Legal Requirement which Tenant is obligated to comply with or any Lien which Tenant is obligated to discharge or bond over, provided that (a) such proceedings suspend the collection thereof, (b) no part of the Premises, Basic Rent or Additional Rent or any other sum payable hereunder is subject to loss, sale or forfeiture during such proceedings, (c) Landlord is not subject to any civil or criminal liability for failure to pay or perform, as the case may be, (d) Tenant furnishes such security as may be required in the proceedings, (e) such proceedings do not affect the payment of Basic Rent, Additional Rent or any other sum payable to Landlord hereunder, and (f) Tenant delivers written notice to Landlord of such proceedings promptly after the commencement thereof, and describes such proceedings in reasonable detail. Tenant shall conduct all such contests in good faith and with due diligence and shall, promptly after the determination of such contest, pay all amounts required to be paid by Tenant.
ARTICLE 14
INSURANCE; INDEMNIFICATION
14.1 (a) Tenant’s Insurance. Tenant shall obtain, and shall keep in full force and effect, the following insurance, with insurers that are authorized to do business in the State of New Jersey and are rated at least A (Class X) in Best’s Key Rating Guide:
(i) Commercial General Liability Insurance which shall include premises liability, contractual liability, damage to rented premises, personal and advertising injury and products/completed operations coverage. The policy shall insure against claims for bodily injury, personal injury, death or property damage occurring on, in or about the Premises with limits of not less than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate. If the policy covers other locations owned or leased by Tenant, such policy must include an aggregate limit per location endorsement.
(ii) Special Form (“All Risk”) Property insuring all equipment, trade fixtures, inventory, fixtures or personal property or any Tenant Improvements which are the responsibility of Tenant located on or in the Premises with an agreed amount endorsement and equal to the full replacement cost value of such property. Tenant acknowledges that Landlord will not carry insurance of any kind on Tenant’s equipment, trade fixtures, inventory, fixtures or personal property or any Tenant Improvements which are the responsibility of Tenant, and Landlord shall not be obligated to repair any damage thereto or replace the same.
(iii) Workers’ Compensation Insurance as required by applicable laws of the state in which the Premises is located, including Employers’ Liability Insurance with limits of not less than: (x) $100,000.00 per accident; (y) $500,000.00 disease policy limit; and (z) $100,000.00 disease, each employee.
(iv) Business interruption insurance in such amounts as will reimburse Tenant for direct and indirect loss of earnings attributable to those events commonly insured against by reasonably prudent tenants and/or attributable to Tenant’s ability to access or occupy (all or part of) the Premises for at least one (1) year.
(v) Excess or Umbrella Liability Insurance with limits of not less than $2,000,000.00 per occurrence and in the aggregate providing coverage in excess of, and follow-form to, the primary commercial general liability and employer’s liability insurance required herein.
(vi) Such other insurance as Landlord deems necessary and prudent or as may be required by any Lender or Master Landlord, provided that such insurance is typically carried by tenants occupying buildings located in Mercer County, New Jersey comparable to the Building.
(vii) In addition to the aforementioned insurances, and during any such time as any alterations or work is being performed at the Premises (except that work being performed by Landlord or on behalf of Landlord), Tenant, at its sole cost and expense, shall carry or shall cause to be carried by applicable contractors and subcontractors, and shall deliver to Landlord at least ten (10) days prior to commencement of any such alteration or work, evidence of insurance with respect to (A) workers’ compensation insurance covering all persons employed in connection with the proposed alteration or work in statutory limits, (B) general/excess liability insurance, in an amount commensurate with the work to be performed but not less than $2,000,000.00 per occurrence and in the aggregate, for ongoing and completed operations insuring against bodily injury and property damage and naming all additional insured parties as outlined below and required of Tenant and shall include a waiver of subrogation in favor of such parties, (C) builders’ risk insurance, to the extent such alterations or work may require, on a completed value form including permission to occupy, covering all physical loss or damages, in an amount and kind reasonably satisfactory to Landlord, and (D) such other insurance, in such amounts, as Landlord deems reasonably necessary to protect Landlord’s interest in the Premises from any act or omission of Tenant’s contractors or subcontractors.
(b) Policy Requirements. The policies of insurance required to be maintained by Tenant pursuant to this Section 14.1 must be written as primary policy coverage and not contributing with, or in excess of, any coverage carried by Landlord. All liability policies must name as additional insureds for on-going and completed operations, Landlord, Landlord’s managing agent, the holder(s) of any mortgage(s) encumbering the Premises, and all of their respective affiliates, members, officers, employees, agents and representatives, managing agents, and other designees of Landlord and its successors as the interest of such designees shall appear. Upon request by Landlord, Tenant shall deliver its policies of insurance to Landlord for review. In addition, Tenant agrees and shall provide thirty (30) days’ prior written notice of suspension, cancellation, termination or non-renewal of coverage to Landlord. Tenant shall not self-insure for any insurance coverage required to be carried by Tenant under this Lease. The deductible for any insurance policy required hereunder must not exceed $10,000.00. Tenant shall have the right to provide the insurance coverage required under this Lease through a blanket policy, provided such blanket policy expressly affords coverage to the Premises and to Landlord as required by this Lease.
(c) Certificates of Insurance. Prior to the Commencement Date, Tenant shall deliver to Landlord original or duplicate policies or certificates of insurance evidencing all insurance Tenant is obligated to carry under this Lease. Within ten (10) days prior to the expiration of any such insurance, Tenant shall deliver to Landlord original or duplicate policies or certificates of insurance evidencing the renewal of such insurance. Tenant’s certificates of insurance must be on: (i) ACORD Form 28 with respect to property insurance; and (ii) ACORD Form 25 with respect to liability insurance or, in each case, on successor forms then standard in the insurance industry.
(d) No Separate Insurance. Tenant shall not obtain or carry separate property insurance concurrent in form or contributing in the event of loss with that required by Section 14.1(a)(ii) unless Landlord and Tenant are named as insureds therein as required by this Lease.
(e) Tenant’s Failure to Maintain Insurance. If Tenant fails to maintain the insurance required by this Lease, then Landlord may, but shall not be obligated to, at any time thereafter, obtain, and pay the premiums for, such insurance. Upon demand, Tenant shall pay to Landlord all amounts paid by Landlord pursuant to this Section 14.1(e).
14.2 Waiver of Subrogation. Landlord and Tenant agree to have all property insurance policies which are required to be carried by either of them hereunder provide or endorsed to provide that the insurer waives all rights of subrogation which such insurer might have against the other party and Landlord’s mortgagee, if any. By this clause, the parties intend and hereby agree that the risk of loss or damage to property shall be borne by the parties’ insurance carriers. It is hereby agreed that Landlord and Tenant shall look solely to, and seek recovery from, only their respective insurance carriers in the event a loss is sustained for which property insurance is carried or is required to be carried under this Lease. Without limiting any release or waiver of liability or recovery contained in any other Section of this Lease, but rather in confirmation and furtherance thereof, Landlord waives all claims for recovery from Tenant, and Tenant waives all claims for recovery from Landlord, and their respective agents, partners and employees, for any loss or damage to any of its property insured under the insurance policies required hereunder.
14.3 Indemnification.
(a) Tenant hereby indemnifies, and shall pay, protect and hold harmless Landlord from and against all liabilities, losses, claims, demands, costs, expenses (including attorneys’ fees and expenses) and judgments of any nature, (except to the extent Landlord is compensated by insurance maintained by Landlord or Tenant hereunder and except for such of the foregoing as arise from the gross negligence or willful misconduct of Landlord, its agents, servants or employees), arising, or alleged to arise, from or in connection with (i) any injury to, or the death of, any person or loss or damage to property on or about the Premises, (ii) any violation of any Legal Requirement or Insurance Requirement by Tenant or Tenant’s Visitors, (iii) performance of any labor or services or the furnishing of any materials or other property in respect of the Premises, (iv) Tenant’s occupancy of the Premises, (including, but not limited to, statutory liability and liability under workers’ compensation laws), (v) any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, and (vi) any act or omission of Tenant or Tenant’s Visitors. Tenant shall, at its sole cost and expense, defend any action, suit or proceeding brought against Landlord by reason of any such occurrence with independent counsel selected by Tenant and reasonably acceptable to Landlord. The obligations of Tenant under this Section 14.3 will survive the expiration or earlier termination of this Lease.
(b) Landlord hereby indemnifies, and shall pay, protect and hold Tenant harmless from and against all liabilities, losses, claims, demands, costs, expenses (including attorneys’ fees and expenses) and judgments of any nature, (except to the extent Tenant is compensated by insurance maintained by Tenant or Landlord under this Lease and except for such of the foregoing as arising from the negligence or willful misconduct of Tenant, its agents, servants or employees), arising, or alleged to arise, from or in connection with (i) any violation of any Legal Requirement or Insurance Requirement, (ii) performance of any labor or services by Landlord or the furnishing of any materials or other property in respect of the Building by Landlord, (iii) any breach or default in the performance of any obligation on Landlord’s part to be performed under the terms of this Lease, and (iv) any act or omission of Landlord, or any officer, agent or employee. Landlord shall, at its sole cost and expense, defend any action, suit or proceeding brought against Tenant by reason of any such occurrence with independent counsel selected by Landlord and reasonably acceptable to Tenant. The obligations of Landlord under this Section 14.3(b) will survive the expiration or earlier termination of this Lease.
14.4 No Claims.
(a) Notwithstanding anything to the contrary contained in this Lease, Tenant shall not make any claim against Landlord for (i) any damage to, or loss of, any property of Tenant or any other person, (ii) business interruption or special, consequential, indirect or punitive damages, or (iii) any acts or omissions of any other tenants in the Building or on the Property. Tenant hereby waives all claims against Landlord with respect to the foregoing. The provisions of this Section 14.4(a) will survive the expiration or earlier termination of this Lease.
(b) Notwithstanding anything to the contrary contained in this Lease, but except for the indemnification obligations of Tenant pursuant to Section 24.3, Landlord shall not make any claim against Tenant for (i) any damage to, or loss of, any property of Landlord or any other person, or (ii) special, consequential, indirect or punitive damages. Landlord hereby waives all claims against Tenant with respect to the foregoing. The provisions of this Section 14.4(b) will survive the expiration or earlier termination of this Lease.
ARTICLE 15
ESTOPPEL CERTIFICATES
15.1 Estoppel Certificates. (a) Upon not less than ten (10) days’ prior notice by Landlord, Tenant shall execute and deliver to Landlord a statement certifying to Landlord the following (or, if not accurate, stating information with respect to such inaccuracy) (i) the Commencement Date, (ii) the Expiration Date, (iii) the dates of any amendments or modifications to this Lease, (iv) that this Lease was properly executed and is in full force and effect without amendment or modification, or, alternatively, that this Lease and all amendments and modifications have been properly executed and are in full force and effect, (v) the current annual Basic Rent, the current monthly installments of Basic Rent and the date on which Tenant’s obligation to pay Basic Rent commenced, (vi) the current monthly installment of Additional Rent for Taxes and Landlord’s Operating Expenses, (vii) the date to which Basic Rent and Additional Rent have been paid, (viii) the amount of the security deposit, if any, (ix) if applicable, that all work to be done to the Premises by Landlord has been completed in accordance with this Lease and has been accepted by Tenant, except as specifically provided in the estoppel certificate, (x) that no installment of Basic Rent or Additional Rent has been paid more than thirty (30) days in advance, (xi) that Tenant is not in arrears in the payment of any Basic Rent or Additional Rent, (xii) that, to Tenant’s knowledge, neither party to this Lease is in default in the keeping, observance or performance of any covenant, agreement, provision or condition contained in this Lease and no event has occurred which, with the giving of notice or the passage of time, or both, would result in a default by either party, except as specifically provided in the estoppel certificate, (xiii) that, to Tenant’s knowledge, Tenant has no existing defenses, offsets, liens, claims or credits against the Basic Rent or Additional Rent or against enforcement of this Lease by Landlord, except as specifically provided in the estoppel certificate, (xiv) that Tenant has not been granted any options or rights of first refusal to extend the Term, to lease additional space, to terminate this Lease before the Expiration Date or to purchase the Premises, (xv) that Tenant has not received any notice of violation of any Legal Requirement or Insurance Requirement relating to the Building or the Premises, (xvi) that Tenant has not assigned this Lease or sublet all or any portion of the Premises, (xvii) that no “hazardous substances” or “hazardous wastes” have been generated, manufactured, refined, transported, treated, stored, handled, disposed or spilled on or about the Premises, except as otherwise permitted in this Lease, and (xviii) such other matters as reasonably requested by Landlord. Tenant hereby acknowledges and agrees that such statement may also be relied upon by any mortgagee, or any prospective purchaser, tenant, subtenant, mortgagee or assignee of any mortgage, of the Property or any part thereof. Landlord agrees that it shall request an estoppel certificate from Tenant only in connection with a sale or financing affecting all or a portion of the Premises or if requested by the holder of an Underlying Encumbrance.
(b) In connection with any proposed sale of Tenant’s business (or portion thereof) or the assignment of Lease or any sublease proposed by Tenant, upon not less than ten (10) days’ prior notice by Tenant, Landlord shall execute and deliver to Tenant a statement certifying (i) the Commencement Date, (ii) the Expiration Date, (iii) the dates of any amendments or modifications to this Lease, (iv) that this Lease is in full force and effect, (v) the current annual Basic Rent and the current monthly installments of Basic Rent, (vi) the current monthly installment of Additional Rent for Taxes, (vii) the date to which Basic Rent has been paid, (viii) if applicable, that all work to be done to the Premises by Landlord pursuant to Schedule D attached hereof has been completed in accordance with this Lease, except as specifically provided in the estoppel certificate, (ix) that no installment of Basic Rent has been paid more than thirty (30) days in advance, (x) that, to the best of Landlord’s knowledge, Tenant is not in default in the keeping, observance or performance of any covenant, agreement, provision or condition contained in this Lease except as specifically provided in the estoppel certificate, (xi) that except as specifically provided in this Lease, Tenant has not been granted any options or rights to extend the Term, to terminate this Lease before the Expiration Date or to purchase the Premises, (xii) that to the best of Landlord’s knowledge, Landlord has not received any notice of default from Tenant under the Lease that remains uncured (except as otherwise specifically stated in the estoppel certificate), and (xiii) that the undersigned is the owner of Landlord’s interest under the Lease. Landlord acknowledges and agrees that such statement may be relied upon by any prospective purchaser of Tenant’s business and any assignee of the Lease or subtenant of the Premises or any part thereof.
15.2 Tenant’s Failure to Execute Estoppel Certificate. If Landlord or Tenant fails or otherwise refuses to execute an estoppel certificate in accordance with Section 15.1 (the “Failing Party”), the other party shall have the right to deliver to the Failing Party a notice in accordance with the terms of this Lease stating that the Failing Party failed to timely deliver the estoppel certificate pursuant to Section 15.1, together with a fully completed estoppel certificate. If the Failing Party fails to deliver to Landlord an executed estoppel certificate satisfying the criteria set forth in Section 15.1 within five (5) days after the delivery of such notice, Tenant shall be deemed to be estopped from raising any claims which are contrary to the statements set forth in the estoppel certificate delivered by Landlord.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.1 Prohibition. Except as otherwise expressly provided in this Article 16, Tenant shall not sell, assign, transfer, hypothecate, mortgage, encumber, grant concessions or licenses, sublet, or otherwise dispose of any interest in this Lease or the Premises, by operation of law or otherwise, without Landlord’s prior written consent, which consent Landlord shall not unreasonably withhold, condition or delay. Any consent granted by Landlord in any instance will not be construed to constitute a consent with respect to any other instance or request. If the Premises or any part thereof are sublet, used, or occupied by anyone other than Tenant and an Event of Default occurs hereunder, or if this Lease is assigned by Tenant, Landlord will have the right to collect rent from the assignee, subtenant, user or occupant, but no such assignment, subletting, use, occupancy or collection will be deemed (i) a waiver of any of Landlord’s rights or Tenant’s obligations under this Article 16, (ii) the acceptance of such assignee, subtenant, user or occupant as tenant, or (iii) a release of Tenant from the performance of any its obligations under this Lease.
16.2 Tenant’s Notice. If Tenant desires to sublet the Premises or assign this Lease, Tenant shall submit to Landlord a written notice (“Tenant’s Notice”) setting forth in reasonable detail:
(a) the name and address of the proposed subtenant or assignee;
(b) the terms and conditions of the proposed subletting or assignment (including the proposed commencement date of the sublease or the effective date of the assignment, which must be at least thirty (30) days after Tenant’s Notice is delivered to Landlord), including a draft of the proposed sublease or assignment agreement;
(c) the nature and character of the business of the proposed subtenant or assignee and the proposed use of the Premises;
(d) banking, financial, and other credit information relating to the proposed subtenant or assignee in reasonably sufficient detail to enable Landlord to determine the proposed subtenant’s or assignee’s financial responsibility; and
(e) in the case of a subletting, complete plans and specifications for any work to be done in the Premises to be sublet.
