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Exhibit 10.40
FIFTH AMENDMENT TO LEASE
THIS AMENDMENT (hereinafter referred to as "this Amendment"), made as
of the 22nd day of August, 2000, between STELLAR CONTINENTAL LLC, a Delaware
limited liability company with an address at 156 William Street, New York, NY
10038 (hereinafter referred to as "Lessor"), and GO AMERICA COMMUNICATIONS
CORP., a New Jersey corporation with offices at 401 Hackensack Avenue,
Hackensack, New Jersey 07601 (hereinafter referred to as "Lessee");
WITNESSETH:
WHEREAS, Lessor's predecessor-in-interest (RREEF USA Fund-I) and
Lessee's predecessor-in-interest (Go America Inc.) entered into a Lease dated
August 7, 1996, as amended by a First Amendment to Lease dated August 24, 1998,
a Second Amendment to Lease dated June 24, 1999 and a Third Amendment to Lease
dated made as of December 1, 1999 and Lessor and Lessee entered into a Fourth
Amendment to Lease dated February , 2000 (herein collectively referred to as the
"Lease"), whereby Lessee is presently in possession of premises containing
approximately 23,173 gross rentable square feet of space (hereinafter
collectively referred to as the "Premises") in the building located at 401
Hackensack Avenue, Hackensack, New Jersey (herein referred to as the "Building")
comprising the entire fourth (4th) floor of the Building (the "4th Floor
Premises") together with approximately 4,356 gross rentable square feet of space
on the third (3rd) floor of the Building (herein referred to as the "3rd Floor
Additional Space") and 2,900 gross rentable square feet on the sixth (6th) floor
(the "6th Floor Premises") which is situated as part of the complex of buildings
known at Continental Plaza at 401, 407, 411 and 433 Hackensack Avenue,
Hackensack, New Jersey (herein called the "Complex"), all located on that
certain parcel of land designated at Lot 5.A in Block 512.A and Lot 1 in Block
514 on the current tax map of the City of Hackensack and Lot 3 Block 98 on the
current tax map of the Borough of River Edge (herein collectively referred to as
the "Parcel"); and
WHEREAS, Lessee desires to surrender and vacate the 3rd Floor
Additional Space and 6th Floor Additional Space (but not the 4th Floor Premises)
and lease approximately 22,458 gross rentable square feet of space on the third
(3rd) floor (the "New 3rd Floor Premises") and 4,652 gross rentable square feet
on the second (2nd) floor (the "New 2nd Floor Premises") in the building known
as 433 Hackensack Avenue, Hackensack, New Jersey and Lessor is willing to accept
such surrenders and lease such New 3rd Floor Premises and New 2nd Floor Premises
to Lessee on the terms and provisions set forth in the Lease as amended as
provided in this Amendment; and
WHEREIN, the parties hereto desire to amend the Lease in the respects
and to the extent hereinafter stated.
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
1. For purposes of this Amendment, capitalized terms shall have
the meanings ascribed to them in the Lease unless otherwise
defined herein.
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2. Lessor and Lessee hereby confirm that the Commencement Date of
the Term of the Lease was August 14, 1996 and that the
Termination Date is May 14, 2007.
3. From and after September 1, 2000 through August 31, 2010
(hereinafter referred to as the "New Premises Term"), Lessee
hereby leases from Lessor the New 3rd Floor Premises and the
New 2nd Floor Premises and, as of September 1, 2000, hereby
surrenders to Lessor and agrees to vacate on or before such
date, in accordance with the terms of the Lease, the 3rd Floor
Additional Space and the 6th Floor Additional Space, but shall
retain the 4th Floor Premises such that, notwithstanding any
provision(s) of this Amendment, the provisions of the Lease
solely with respect to the 4th Floor Premises as they exist
without regard to this Amendment shall apply to the 4th Floor
Premises but not to the 3rd Floor Additional Space or to the
6th Floor Additional Space.
4. From and after the commencement date of the New Premises Term,
Lessee shall pay to Lessor Fixed Basic Rent for the New 2nd
Floor Premises and New 3rd Floor Premises (in the aggregate)
in accordance with the following schedule (of which $40,665
per annum shall consist of ERIF for the New 3rd Floor Premises
and New 2nd Floor Premises combined):
Annual Fixed Monthly Fixed
Period Basic Rent Basic Rent
------ ------------ -------------
9/1/00 - 8/31/01 $ 853,965 $ 71,163.75
9/1/01 - 8/31/02 867,520 72,293.34
9/1/02 - 8/31/03 881,075 73,422.92
9/1/03 - 8/31/04 894,630 74,552.50
9/1/04 - 8/31/05 908,185 75,683.09
9/1/05 - 8/31/06 921,740 76,811.67
9/1/06 - 8/31/07 935,295 77,941.25
9/1/07 - 8/31/08 948,850 79,070.84
9/1/08 - 8/31/09 962,405 80,200.42
9/1/09 - 8/31/10 975,960 81,330.00
Notwithstanding the foregoing Fixed Basic Rent schedule, for
the period commencing September 1, 2000 and terminating
November 30, 2000 and the period commencing September 1, 2001
and terminating November 30, 2001, Lessee only shall pay the
ERIF in the sum of $3,388.75 per month with respect to the New
2nd Floor Premises and New 3rd Floor Premises and, with
respect to December, 2000, Lessee only shall pay ERIF in the
sum of $581.50 for the New 2nd Floor Premises plus $61,759.50
(inclusive of ERIF) for the New Third Floor Premises.
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5. During the New Premises Term, the Base Year for Operating
Costs, Base Utility and Energy Costs and the Real Estate Taxes
shall be calendar year 2000, and Base Utility Rate shall be
the average rate in effect during calendar year 2000.
6. The Security Deposit under the Lease for the New 2nd Floor
Premises and New 3rd Floor Premises during the New Premises
Term shall be $555,755 in the form of a letter of credit
("L/C") being delivered to Lessor upon the execution and
delivery of this Amendment together with payment of the
minimum annual fixed rent for the fourth month of the New
Premises Term (i.e., $71,163.75). If, on any September 1
commencing on September 1, 2003, Lessee shall show a net
profit from operations after taxes for the immediately
preceding twelve (12) calendar months (a "Trigger Event"),
then the security deposit shall be reduced by $69,469 as of
that September 1, until such time as there shall be $279,818
as a security deposit. If, after any reduction(s) in security
deposit as aforesaid, there shall not occur a Trigger Event on
any September 1, then Lessee shall deliver to Lessor on each
such September 1 an amended L/C increased by $69,496 but in no
event in excess of $555,755. The L/C shall be a clean,
irrevocable and unconditional letter of credit issued by and
drawn upon any commercial bank chartered by the State of New
York, the State of New Jersey or the United States Government
(the "Issuing Bank") with offices for banking purposes in the
State of New Jersey of State of New York, and having a net
worth of not less than $500 million, which L/C shall have a
term of not less than one year, be in form and content
satisfactory in all respects to Lessor, be for the
account of Lessor and be in the amount of the Security
Deposit. The L/C shall provide that:
(i) The Issuing Bank shall pay to Lessor, or its duly
authorized representative, from time to time an
amount sufficient to cure the default of Lessee
without acceleration up to the face amount of the L/C
upon presentation of only the L/C and a sight draft
in the amount to be drawn;
(ii) The L/C shall be deemed to be automatically renewed,
without amendment, for consecutive periods of one
year each during the Term of this Lease, unless the
Issuing Bank sends written notice (the "Non-Renewal
Notice") to Lessor by certified or registered mail,
return receipt requested, not less than thirty (30)
days next preceding the then expiration date of the
L/C, that it elects not to have such L/C renewed;
(iii) Lessor, within twenty (20) days of its receipt of the
Non-Renewal Notice, shall have the right, exercisable
by a sight draft, to receive the monies represented
by the L/C (which moneys shall be held by Lessor as a
cash deposit pursuant to the terms of the Lease as
amended by this Amendment pending the replacement of
such L/C or Lessee's default under the Lease as
amended by this Amendment); and
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(iv) Upon Lessor's sale or net lease of Lessor's interest
in the Building, the L/C shall be transferable by
Lessor as provided for herein.
In the event of a sale or net lease of Lessor's interest in
the Building, Landlord shall have the right to transfer the
cash security or L/C, as the case may be, deposited hereunder
to the vendee, lessee or transferee, without cost to Lessor,
and, upon transfer of the L/C or cash security (as the case
may be) to the vendee, lessee or transferee, Lessor shall
thereupon be released from all liability for the return of
such cash security or L/C. In such event, Lessee agrees to
look solely to the new landlord for the return of said cash
security or L/C. It is agreed that the provisions hereof shall
apply to every transfer or assignment made of said cash
security or L/C.
In the event that at any time during the New Premises Term (a)
the net worth of the Issuing Bank shall be less than the
minimum amount specified above or (b) circumstances have
occurred indicating that the Issuing Bank may be incapable of,
unable to, or prohibited from honoring the then existing L/C
(hereinafter referred to as the "Existing L/C") in accordance
with the terms thereof, then, upon the happening of either of
the foregoing, Lessor may send written notice to Lessee
(hereinafter referred to as the "Replacement Notice")
requiring Lessee within thirty (30) days to replace the
Existing L/C with a new letter of credit (hereinafter referred
to as the "Replacement L/C") from an Issuing Bank meeting the
qualifications described in this Paragraph 6. Upon receipt of
the Replacement L/C meeting the qualifications of this
Paragraph 6, Lessor shall forthwith return the Existing L/C to
Lessee. In the event that a Replacement L/C meeting the
qualifications of this Paragraph 6 is not received by Lessor
within the time specified then the Existing L/C may be
presented for payment by Lessor and the proceeds thereof shall
be held by Lessor in accordance with this Paragraph 6 subject,
however, to Lessee's right, at any time thereafter prior to a
Lessee's default hereunder, to replace such cash security with
a replacement L/C meeting the qualifications of this Paragraph
6.
The provisions of Article 17 of the Lease shall be applicable
hereto.
7. Lessee's Percentage at paragraph 10 or the Reference Page of
the Lease shall be amended to 4.603%.
8. Lessee's total parking spaces for the New 2nd Floor Premises
and New 3rd Floor Premises shall be 108, of which 76 shall be
gate-accessed covered and 32 shall be uncovered.
9. Lessee shall have the right, at Lessee's sole cost and
expense, to erect a sign in accordance with Exhibit 1 annexed
hereto and made a part hereof (specifying appearance, size and
location), the cost and expense of which shall be debited
against the allowance described in paragraph 10, below.
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10. (a) With respect to Lessee's leasehold improvements at the New 2nd
Floor Premises and New 3rd Floor Premises, Lessee shall
receive an allowance of $325,320 (inclusive of Lessor's
profit) to be used not later than August 31, 2005 provided, at
the time that Lessee requests reimbursement from Lessor,
Lessee shall not be in default under the Lease or this
Amendment beyond any applicable notice and grace periods.
Within such allowance for leasehold improvements (all of which
shall be performed by or at the direction of Lessor using
contractors satisfactory to Lessor in Lessor's sole
discretion), there shall be debited the cost and expense of
constructing the appropriate cable conduit within the Complex
so as to link communications among the 4th Floor Premises, the
New 2nd Floor Premises and the New 3rd Floor Premises.
(b) Not later than August 4, 2000, time being of the essence,
Lessee shall submit to Lessor plans and specifications for
leasehold improvements to be performed by Lessor at the New
2nd Floor Premises and New 3rd Floor Premises to prepare same
for Lessee's occupancy ("Lessor's Work"). For each day beyond
August 4, 2000 that such plans and specifications are not
delivered to Lessor, the "Outside Date" for Lessor's Work to
be completed shall be extended by one (1) day. The Outside
Date for the New 3rd Floor Premises is December 1, 2000 and
for the New 2nd Floor Premises is January 1, 2001. For each
two (2) days that Lessor's Work is not substantially completed
(other than punchlist items), Lessee shall receive one (1) day
of free Monthly Fixed Basic Rent (except that Lessee shall pay
ERIF for each such day), but in no event shall the New
Premises Term be extended nor shall Lessee have the right to
termination or damages by reason of such delay. The taking of
possession of Lessee shall be conclusive in determining that
Lessor's Work (other than punchlist items) has been
substantially completed.
11. (a) In the event that during the New Premises Term any space shall
become available that is contiguous to either or both of the
New 2nd Floor Premises (but not first floor, i.e., lobby
space) and New 3rd Floor Premises, or if the space in the
basement and lower lobby (currently occupied by ABC) shall
become available, Lessee shall be given the first offer to
accept or reject such space within ten (10) days after Lessor
shall notify Lessee in writing that such space is available
(and disclosing in such notice the salient terms pursuant to
which Lessor intends to offer such space for lease to others),
time being of the essence; silence by Lessee within such ten
(10) days shall be deemed rejection of Lessor's offer of such
space. If Lessee rejects or is deemed to have rejected such
space, Lessor shall be free to enter into any lease or
occupancy agreement with any third party during the next
succeeding 120 days, but only upon substantially the same
salient terms and at Fixed Basic Rent of at least ninety (90%)
percent of that offered to Lessee.
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(b) The relocation provisions of the Lease shall not apply during
the New Premises Term or during any renewal provided for in
this Amendment. The transactions contemplated by this
Amendment do not constitute a relocation.
12. (a) Provided Lessee is not in default under the Lease and this
Amendment (and as then amended to date) beyond any applicable
notice and grace period, Lessee shall have two (2) consecutive
options to renew the Lease as amended hereby with respect to
not less than all of the Demised Premises (defined below) for
a renewal term of five (5) years each (each being an "Option
Term") under all of the same terms and conditions of the Lease
and this Amendment (as they may subsequently have been amended
at the time in question) except: (x) as to Fixed Basic Rent
and (y) there shall be no further renewal options. In order to
exercise either such renewal option, Lessee must send written
notice ("Lessee's Option Notice") to Lessor not earlier than
thirteen (13) months nor later than nine (9) months prior to
the expiration of the New Term or the first renewal term, as
the case may be, irrevocably stating that Lessee elects to
renew for such five (5) year period. Unless the Lease (as then
amended to date) is in full force and effect and Lessee is not
in default thereunder beyond any applicable notice and grace
periods on (x) the date of Lessee's Option Notice and (y) the
first day of the respective Option Term, Lessee's Option
Notice shall be deemed a nullity, ab initio.
(b) the Fixed Basic Rent during the first Option Term shall be at
95% of Fair Market Rental Value and at 100% of Fair Market
Rental Value during the second Option Term, but in no event
shall the Fixed Basic Rent during the first or second renewal
term be less than that payable by Lessee during the
immediately preceding twelve (12) months.
(c) (i) The "Fair Market Rental Value" of the "Demised
Premises" (meaning, for the purposes of this Article
12, only, the New 2nd Floor Premises and New 3rd
Floor Premises) means the rental rate a landlord
under no compulsion to lease the Demised Premises and
a Lessee under no compulsion to lease the Demised
Premises would agree upon as the rent for the first
year of the Option Term, taking into consideration
brokerage commissions, landlord work, rental
abatements, the uses permitted under this Lease, the
quality, size, design and location of the Building
and the Demised Premises, and the rent for comparable
buildings and complexes located in the vicinity of
the Hackensack, New Jersey prime office rental area.
For the purpose of establishing the Fair Market
Rental Value adjustment, within sixty (60) days
following receipt of Lessee's Option Notice, Lessor
shall notify Lessee of the opinion of Lessor as to
the Fair Market Rental Value for the Demised
Premises, which shall be the Fixed Basic Rent
applicable to the
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Option Term. Lessee shall have thirty (30) days
following receipt of such written notice within which
to notify Lessor if Lessee disputes such Fair Market
Rental Value, and upon failure of Lessee to so notify
Lessor, and setting forth with reasonable detail the
reasons why Lessee disputes such Fair Market Rental
Value specified by Lessor, the Fair Market Rental
Value specified by Lessor shall be deemed accepted by
Lessee as the Fixed Basic Rent for the Option Term.
If Lessee notifies Lessor within such thirty (30) day
period that Lessee does not agree with the Fair
Market Rental Value of the Demised Premises specified
by Lessor (setting forth in reasonable detail the
reasons therefor) and if Lessor and Lessee are unable
to agree upon such Fair Market Rental Value within
the next ensuing thirty (30) days, then such Fair
Market Rental Value shall be determined by appraisal
as described below.
(ii) Within seven (7) days after the expiration of the
last thirty (30) day period set forth in the last
sentence of (c)(i) above, Lessor and Lessee shall
each appoint a real estate appraiser with at least
five (5) years' full-time commercial appraisal
experience in the area in which the Demised Premises
are located, to appraise the then Fair Market Rental
Value of the Demised Premises. If either the Lessor
or the Lessee does not appoint an appraiser within
ten (10) days after the other has given notice of the
name of its appraiser, the single appraiser appointed
will be the sole appraiser and will set the then Fair
Market Rental Value of the Demised Premises. If two
(2) appraisers are appointed pursuant to this
section, they will meet promptly and attempt to set
the then Fair Market Rental Value of the Demised
Premises. If they are unable to agree within thirty
(30) days after the second appraiser has been
appointed, they will attempt to select a third
appraiser meeting the qualifications stated in this
section within ten (10) days. If they are unable to
agree on the third appraiser, then either the Lessor
or the Lessee, by giving ten (10) days prior notice
to the other, can apply to a then presiding judge of
the New Jersey Superior Court in Bergen County for
the selection of a third appraiser who meets the
qualifications stated in this section. Lessor and
Lessee each shall bear one-half (1/2) of the cost of
appointing the third appraiser and of paying the
third appraiser's fee (and shall each bear the cost
of their own appraisers). Within thirty (30) days
after the selection of the third appraiser, a
majority of the appraisers who agree will set the
then Fair Market Rental Value of the Demised
Premises. If a majority of the appraisers are unable
to set the then Fair Market Rental Value of the
Demised Premises within thirty (30) days after
selection of the third appraiser, then the two (2)
closest appraisals
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shall be averaged and this average shall establish
the then Fair Market Rental Value of the Demised
Premises.
In the event such Fair Market Rental Value determination shall
not have been completed prior to the commencement of the
Option Term, Lessee shall pay as Fixed Basic Rent effective as
of and subsequent to the commencement of the Option Term, the
Fair Market Rental Value first communicated by Lessor to
Lessee (but not less than the Fixed Basic Rent being paid by
Lessee immediately prior to the commencement of the Option
Term), and if such Fixed Basic Rent is thereafter fixed or
readjusted to a different amount, such new Fixed Basic Rent
shall take effect retroactively back to the first day of the
Option Term, and Lessee or Lessor, as the case may be, shall
immediately pay to the other the sum which is accrued and
underpaid or overpaid as a result of such retroactive
application.
13. For the purposes of the Lease as amended by this Amendment,
although a reorganization, merger or consolidation of Lessee
(each, an "event") shall be deemed an assignment of the Lease
as amended by this Amendment (and as may be subsequently
amended), Lessor's recapture rights under the Lease shall not
apply and no consent of Lessor is required provided that after
such event the net worth of the surviving entity and the
surviving entity's cash on hand shall be at least equal to
that of Lessee immediately prior to the event; however, in
order for such assignment to be effective (if at all), Lessee
shall have delivered to Lessor a duplicate original of the
documentation effectuating such assignment along with audited
financial statements of the surviving entity confirming the
net worth requirements of this Paragraph 13 not later than
three (3) days after the event. All of the other provisions of
the Lease (as amended to the date of the event) shall be
applicable to any such assignment.
14. Lessor and Lessee each warrants and represents to the other
that Cushman & Wakefield of New Jersey, Inc. was the sole
broker that brought about this Amendment and Lessor shall pay
said broker pursuant to separate written agreement.
15. With the exception of the provisions of Paragraphs 11(b), 13
and 16 and this Paragraph 15, this Amendment shall have no
effect as to modifying the Lease with respect to the 4th Floor
Premises.
16. The rights and obligations of Lessor and Lessee under this
Amendment shall be subject to receipt of the consent of
Lessor's mortgagee and to the mortgagee agreeing to enter into
a Subordination, Attornment and Non-Disturbance Agreement
("SANDA") with Lessee on mortgagee's standard form. If either
such consent or such SANDA is not received within ten (10)
business days after this Amendment is received, then Lessor
(only with respect to consent) and Lessee each shall have the
right, exercisable only within the next five (5) business days
(time being of the essence) thereafter, to terminate this
Amendment by written notice to the other. If such termination
notice shall be sent, then this Amendment shall be void ab
initio and neither party shall have any further rights or
obligations
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to the other by reason thereof. Silence within such
five (5) business days shall be deemed conclusive
waiver of any such cancellation right.
17. Except as specifically provided in this Amendment,
the Lease remains in full force and effect, unchanged
and unmodified, and shall apply in all respects to
the New 2nd Floor Premises and New 3rd Floor Premises
as well as to the 4th Floor Premises.
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Amendment
as of the day and year first written above, and acknowledge one to the other
that they possess the requisite authority to enter into this transaction and to
sign this Amendment.
*GO AMERICA COMMUNICATIONS CORP. STELLAR CONTINENTAL LLC,
BY: STELLAR CAPITAL MANAGEMENT LLC,
ITS MANAGER
By: /s/ Aaron Dobrinsky By: /s/ Moshe Azizni
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Name: Aaron Dobrinsky Name: Moshe Azizni
Title: President & CEO Title: Manager
* In the event of any dispute or discrepancy between this document and the lease
agreement signed on August 4, 2000 by Frank Elenio, then the August 4, 2000
Fifth amendment to lease shall govern.
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EXHIBIT A
Exhibit "___" to Lease Agreement dated _______________________ between Stellar
Capital Management ("Lessor") and Go America Inc. ("Lessee"). This plan is
intended to only show the general layout of the property or a part thereof.
Landlord reserves the right to alter, vary, add omit in whole or in part any
structures and or improvement and or common areas and or land area shown on the
plan. All measurement and distances are approximate. This plan is not to be
scaled.
[FLOOR PLAN FOLLOWS]