EXHIBIT 2.2
LEASE AGREEMENT
This LEASE AGREEMENT (this "Lease") is dated this 24th day of
November, 2003, between SL INDUSTRIES, INC., a New Jersey
corporation ("LANDLORD"), with an address of 520 Fellowship
Road, Suite A-114, Mount Laurel, New Jersey 08054, and
EVERLAST COATINGS INC., a Delaware corporation ("TENANT"),
with an address of 1416 South Sixth Street, Camden, New Jersey
08102, which corporation is qualified to do business in the
state of New Jersey.
PREMISES: The property with an address of 1416 South Sixth
Street, Camden, New Jersey, commonly known as Block
350, Lot 5, Camden Township, Camden County, New
Jersey, together with the two one-story buildings
facilitating manufacturing, storage and office
operations, including all drives, walks and parking
areas, as more particularly shown on EXHIBIT "A"
attached hereto and made a part hereof. The property
and the buildings are referred to as the "PREMISES".
LEASE AND BASE RENT
COMMENCEMENT DATE: The date of the Asset Purchase Agreement by and
between the Tenant and the Landlord.
LEASE TERM: Beginning on the Lease Commencement Date and ending
on the tenth anniversary thereof, subject to
adjustment and earlier termination as provided in
this Lease. If the Commencement Date is not the first
day of the month, the first year shall include the
partial month in which the Commencement Date occurs
and rent and all other charges shall be prorated for
such partial month.
BASE RENT: PERIOD: ANNUAL BASE RENT MONTHLY BASE RENT:
- --------------------- --------------- ---------------- --------------------
First Year $ 18,000.00 $ 1,500.00 per month
Second Year $ 19,200.00 $ 1,600.00 per month
Third Year $ 20,400.00 $ 1,700.00 per month
Fourth Year $ 21,600.00 $ 1,800.00 per month
Fifth Year $ 22,800.00 $ 1,900.00 per month
6th - 10th.Yrs. $ 24,000.00 $ 2,000.00 per month
SECURITY DEPOSIT: $3,000.00
STANDARD INDUSTRIAL
CLARIFICATION NUMBER: 3471
BROKER: None.
RIGHT OF FIRST REFUSAL: None.
ADDENDA: Exhibit A (Description of Property); Exhibit B
(Landlord, Subordination and Consent).
1. GRANTING CLAUSE. In consideration of the obligation of Tenant to pay
Base Rent, and all other sums to be paid by Tenant to Landlord as
provided in this Lease (such sums being sometimes referred to as
"ADDITIONAL RENT;" and collectively with Base Rent being sometimes
referred to as "RENT") as herein provided, and in consideration of the
other terms, covenants, and conditions hereof, Landlord leases to
Tenant, and Tenant leases from Landlord, the Premises, to have and to
hold for the Lease Term, subject to the terms, covenants and conditions
of this Lease.
2. ACCEPTANCE OF PREMISES. Except as may otherwise be expressly provided
in this Lease, Tenant shall accept the Premises on the Lease
Commencement Date in its "AS-IS" condition, subject to all applicable
laws, ordinances, regulations, covenants and restrictions, and Landlord
shall have no obligation to perform or pay for any repair or other work
therein. Except as provided in this Paragraph 2 and Paragraph 8, in no
event shall Landlord have any obligation for any defects in the
Premises or any limitation on its use. The taking of possession of the
Premises shall be conclusive evidence that Tenant accepts the Premises
and that the Premises was in good condition at the time possession was
taken except for items that are Landlord's responsibility under this
Paragraph 2 and Paragraph 8.
3. USE. (a) Subject to Tenant's compliance with all zoning ordinances
and Legal Requirements (as hereinafter defined), the Premises shall be
used only for the purpose of engaging in the business of developing and
manufacturing surface coatings and applying the surface coatings to
machinery and equipment. Tenant shall not conduct or give notice of any
auction, liquidation, or going out of business sale on the Premises.
Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises
or subject the Premises to use that would damage the Premises. Tenant
shall not permit any unreasonably objectionable or unpleasant odors,
smoke, dust, gas, noise, or vibrations to emanate from the Premises, or
take any other action that would constitute a nuisance or would disturb
or endanger the Premises.
(b) Tenant, at its sole expense, shall use and occupy the Premises
in compliance with all laws, including, without limitation, the
Americans With Disabilities Act if such compliance is required due to
Tenant's specific use and occupancy of the Premises during the Lease
Term, orders, judgments, ordinances, regulations, codes, directives,
permits, licenses, covenants and restrictions now or hereafter
applicable to the Premises (collectively, "LEGAL REQUIREMENTS"). The
Premises shall not be used as a place of public accommodation under the
Americans With Disabilities Act or similar state statutes or local
ordinances or any regulations promulgated thereunder, all as may be
amended from time to
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time. Tenant shall, at its expense, make any alterations or
modifications, within the Premises that are required by Legal
Requirements related to Tenant's specific use or occupation of the
Premises. Tenant shall not use or permit the Premises to be used for
any purpose or in any manner that would void any insurance policy on
the Premises, increase the insurance risk, or cause the disallowance of
any sprinkler credits.
4. BASE RENT. Tenant shall pay Annual Base Rent in 12 equal monthly
installments in the amounts set forth on the second page of this Lease.
The Security Deposit, if any, and the first full monthly installment of
Base Rent shall be due and payable contemporaneously with the execution
of this Lease, and Tenant promises to pay to Landlord in advance,
without demand, deduction or set-off, monthly installments of Monthly
Base Rent on or before the first day of each calendar month succeeding
the Monthly Base Rent Commencement Date. Payments of Base Rent for any
fractional calendar month shall be prorated. All payments required to
be made by Tenant to Landlord hereunder shall be payable at such
address as Landlord may specify from time to time by written notice
delivered in accordance herewith. The obligation of Tenant to pay
Monthly Base Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall
have no right at any time to abate, reduce, or set-off any Rent due
hereunder except where expressly provided in this Lease. Tenant
acknowledges that late payment by Tenant to Landlord of any Rent due
hereunder will inconvenience Landlord and cause Landlord to incur costs
not contemplated by this Lease. Therefore, if Tenant is delinquent in
any monthly installment of Monthly Base Rent or other sums due and
payable hereunder for more than ten (10) business days, Tenant shall
pay to Landlord on demand a late charge equal to three percent (3%) of
such delinquent sum. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder,
including payment to Landlord of all costs and expenses (including
reasonable attorney's fees), or at law and shall not be construed as a
penalty.
5. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease.
The Security Deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon each occurrence of
an Event of Default (hereinafter defined), Landlord may use all or part
of the Security Deposit to pay delinquent payments due under this
Lease, and the cost of any damage, injury, expense or liability caused
by such Event of Default, without prejudice to any other remedy
provided herein or provided by law. Tenant shall pay Landlord on demand
the amount that will restore the Security Deposit to its original
amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee, and no interest shall accrue thereon. The
Security Deposit shall be the property of Landlord, but shall be paid
to Tenant when Tenant's obligations under this Lease have been
completely fulfilled. Landlord shall be released from any obligation
with respect to the Security Deposit upon transfer of this Lease and
the Premises to a person or entity assuming Landlord's obligations
under this Paragraph 5.
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6. OPERATING EXPENSES; UTILITIES; TAXES. Starting on the Lease
Commencement Date, Tenant shall pay the following expenses:
(a) OPERATING EXPENSES. Any and all costs associated with the
maintenance and operation of the Premises, including, without
limitation, the costs of: utilities, maintenance, repair and
replacement of all portions of the Premises, including without
limitation, paving and parking areas, roads (e.g. filling of pot-holes,
repair or replacement of the curbs, etc.), roof membranes, alleys, and
driveways, mowing, snow removal, landscaping, and exterior painting,
the cost of maintaining utility lines, base building fire sprinklers
and fire protection systems, if any, exterior lighting and mechanical
and building systems serving the Premises, amounts paid to contractors
and subcontractors for work or services performed in connection with
any of the foregoing, charges or assessments of any association to
which the Premises is subject, the cost of any insurance deductibles
for insurance required to be maintained by Tenant hereunder, security
services, if any, trash collection, sweeping and removal, and additions
or alterations made by Landlord and/or Tenant in order to comply with
Legal Requirements or that are appropriate to the continued operation
of the Premises as contemplated hereunder for each calendar year during
the Lease Term, and the cost of insurance required to be maintained by
Tenant pursuant to Paragraph 7 herein, for the Premises for each
calendar year during the Lease Term.
(b) UTILITIES. Any and all costs for water, gas, electricity,
heat, light, power, telephone, sewer, sprinkler services, security,
sprinkler or alarm service central station monitoring, and other
utilities and services used on the Premises, all maintenance charges
for utilities, and any storm sewer charges or other similar charges for
utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges, connection charges, and
the like pertaining to Tenant's use of the Premises. Tenant, at its
expense, shall obtain all utility services for the Premises, including
making all applications therefor, obtaining meters and other related
equipment, and paying all deposits and connection charges. Landlord
shall not be liable for any interruption or failure of utility service
to the Premises, and such interruption or failure of utility service
shall not be a constructive eviction of Tenant, constitute a breach of
any implied warranty, or entitle Tenant to any abatement of Tenant's
obligations hereunder.
(c) TAXES. Any and all taxes, assessments and governmental charges
(collectively referred to as "TAXES") that either (a) accrue against
the Premises during the Lease Term if such Taxes are payable in
advance, or (b) are assessed against the Premises during the Lease
Term, if such Taxes are payable in arrears. All capital levies or other
taxes assessed or imposed on Landlord upon the Rents payable to
Landlord under this Lease and any franchise tax, any excise,
transaction, sales or privilege tax, assessment, levy or charge
measured by or based, in whole or in part, upon such Rents from the
Premises or any portion thereof shall be paid by Tenant to Landlord
monthly in estimated installments or upon demand, at the option of
Landlord, as Additional Rent; provided, however, in no event shall
Tenant be liable for any net income taxes imposed on Landlord unless
such net income taxes are in substitution for any Taxes payable
hereunder. If any such tax or excise is levied or assessed directly
against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authority shall
require. Tenant shall be liable for all taxes levied or assessed
against any personal property or fixtures
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placed in the Premises, whether levied or assessed against Landlord or
Tenant, and if any such taxes are levied or assessed against Landlord
or the Premises and (a) Landlord pays them or (b) the assessed value of
the Premises is increased thereby and Landlord pays the increased
taxes, then Tenant shall pay to Landlord such taxes within fifteen (15)
business days after Landlord's written request therefor.
7. INSURANCE. (a) Tenant shall, during the Lease Term, procure and keep in
force the following insurance:
(i) Commercial general liability ("CGL") insurance (or the
equivalent ISO form in use from time to time in the state of
New Jersey) naming Landlord, as an additional insured party,
providing coverage against any and all claims for bodily
injury and property damage occurring in, or about the Premises
and land and/or arising out of or in any way related to use
and occupancy of the Premises by Tenant or its agents,
employees or invitees. Such insurance shall have a combined
single limit of not less than One Million Dollars ($1,000,000)
per occurrence with Two Million Dollars ($2,000,000) aggregate
limit and a deductible not to exceed $5,000 and an excess
umbrella liability insurance (following form) in the amount of
Two Million Dollars ($2,000,000). If Tenant has other
locations that it owns or leases the policy shall include an
aggregate limit per location endorsement. Such liability
insurance shall be primary and not contributing to any
insurance available to Landlord and Landlord's insurance, if
any, shall be in excess thereto. In no event shall the limits
of such insurance be considered as limiting the liability of
Tenant under this lease and the minimum limits of coverage set
forth in this Lease shall not be construed to limit the
coverage available to any additional insured party to an
amount which is less than the full policy limit(s) of all
applicable policies actually carried by Tenant.
Notwithstanding any limits of liability set forth herein or
shown on any certificate/evidence of insurance, Landlord shall
be entitled to additional insured status on all liability
insurance maintained by Tenant.
(ii) Workers' compensation insurance in accordance with statutory
law and employers' liability insurance with a limit of not
less than $100,000 per accident, $500,000 for a disease policy
limit, and $100,000 for disease limit for each employee.
(iii) Such other insurance as Landlord deems necessary and prudent,
or as required by Landlord's mortgagees or beneficiaries of
any deed of trust encumbering the Premises.
(b) The policies required to be or otherwise maintained by Tenant
shall be issued by companies rated A+ or better in the most current
issue of Best's Insurance Reports. Insurers shall be admitted insurers
in the state of New Jersey, and domiciled in the USA. Certified copies
of the policies, or (i) Evidence of Insurance (ACORD Form 27) as to
property insurance or (ii) a binder (ACORD 13) followed before
expiration of the binder by a copy of the declarations page(s) of the
policy with a schedule of all endorsements, shall be delivered to
Landlord prior to the Commencement Date and annually thereafter at
least thirty (30) days prior to the expiration date of the old policy.
In addition, Tenant shall deliver copies of any endorsements requested
by Landlord. Such forms shall
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indicate applicable deductibles, retention, coverage and sub-limits of
coverage and shall contain an endorsement each of the insurance
companies named thereon adding any additional insured parties required
herein. Tenant shall have the right to provide insurance coverage which
it is obligated to carry pursuant to the terms hereof in a blanket
policy, provided such blanket policy expressly affords coverage to the
Premises, and to the Landlord and other parties as required by this
Lease.
(c) Each policy of insurance required to be or otherwise
maintained by Tenant herein shall provide written notification to
Landlord and any other additional insured party at least thirty (30)
days prior to any cancellation or modification to reduce the insurance
coverage.
(d) In the event Tenant does not purchase the insurance required
by this Lease or keep the same in full force and effect, Landlord may,
but shall not be obligated to purchase the required insurance or such
lesser alternative insurance coverage as Landlord may elect, and pay
the premium therefor. Tenant shall repay to Landlord, as Additional
Rent, the amount so paid promptly upon demand. In addition, Landlord
may recover from Tenant and Tenant agrees to pay, as Additional Rent,
any and all reasonable expenses (including attorneys' fees) and damages
which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance and/or efforts to obtain same from Tenant
or from other sources.
8. LANDLORD'S REPAIRS. This Lease is intended to be a triple net lease,
accordingly, the maintenance and repair obligations to be performed by
Landlord, at its sole cost and expense, are limited to the repair or
replacement of the Premises' roof structure (excluding roof membrane
which is Tenant's responsibility), and maintenance and repair of any
defects of the foundation and foundation piers and structural members
of the exterior walls and any structural defects in the floor slab (not
caused by overloading by Tenant's installations or equipment) and any
other structural systems of the Premises (the "BUILDING'S STRUCTURE"),
in all cases excluding reasonable wear and tear and insured losses and
damages. Tenant shall repair or replace, in accordance with the terms
and conditions of Paragraph 9. (b), any damage caused to the Building's
Structure by caused by Tenant, its agents, employees and contractors (a
"TENANT PARTY"). The term "walls" as used in this Paragraph 8 shall not
include exterior windows, window frames, interior glass, personnel
doors or overhead doors, door frames, special store fronts, dock
bumpers, dock plates or levelers, or office entries, all of which shall
be maintained by Tenant. Tenant shall promptly give Landlord written
notice of any repair required by Landlord pursuant to this Paragraph 8,
after which Landlord shall promptly repair such item.
9. TENANT'S REPAIRS. (a) Subject to Landlord's obligation in Paragraph 8,
Tenant, at its sole expense, shall repair, replace and maintain in good
condition all portions of the Premises and all areas, improvements and
systems including, without limitation, plumbing, plating tank beds,
water, and sewer lines up to points of common connection, entries,
doors, ceilings, windows, interior walls, and the interior side of
demising walls, and heating, ventilation and air conditioning systems,
and other building and mechanical systems and the water tight integrity
of the roof membrane (the "BUILDING'S SYSTEMS"). Such repair and
replacements include capital expenditures and repairs whose benefit may
but is not required
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to extend beyond the Lease Term. Maintenance and repair of the heating,
plating tank beds, ventilation and air conditioning systems and other
mechanical and building systems shall be at Tenant's expense pursuant
to maintenance service contracts entered into by Tenant.
(b) In the event that any repair or maintenance obligation required to
be performed by Tenant hereunder may affect the structural integrity of
the Premises (e.g., roof, foundation, structural members of the
exterior walls), prior to commencing any such repair, Tenant shall
provide Landlord with written notice of the necessary repair or
maintenance and a brief summary of the structural component or
components of the Premises that may be affected by such repair or
maintenance. Within ten (10) business days after Landlord's receipt of
Tenant's written notice, Landlord shall have the right, but not the
obligation, to elect to cause such repair or maintenance to be
performed by Landlord, or a contractor selected and engaged by
Landlord, but at Tenant's sole cost and expense. The foregoing sentence
is not intended to obligate Tenant to pay for repairs or maintenance to
those structural items which are Landlord's responsibility pursuant to
Paragraph 8 above, but shall only require Tenant to pay for the repair
and maintenance to such structural components to the extent such repair
or maintenance is necessitated due to the performance of Tenant's
repair and maintenance obligations pursuant to this Paragraph 9.
(c) Within the fifteen (15) day period prior to the expiration or
termination of this Lease, Landlord may inspect the Premises or have
same inspected by an engineer for purposes of determining if there is
any damage which requires repair and/or that the hot water equipment
and the HVAC system are then in good repair and working order. If
Landlord believes that there are any repairs that are Tenant's
responsibility Landlord shall provide Tenant with a certification from
the inspecting engineer specifying such required repairs. If Tenant
fails to perform any repair or replacement for which it is responsible,
Landlord may perform such work and be reimbursed by Tenant within ten
(10) days after demand therefor. Subject to Paragraph 7 and Paragraph
15, Tenant shall bear the full cost of any repair or replacement to any
part of the Premises that results from damage caused by Tenant, its
agents, contractors, or invitees.
10. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. (a) There shall be no
changes to the floor plan of the Premises without Landlord's prior
written consent.
(b) Any non-structural alterations, additions, or improvements, costing
in excess of Twenty Five Thousand Dollars ($25,000) in the aggregate in
any period of twelve (12) consecutive months, made by or on behalf of
Tenant to the Premises ("TENANT-MADE ALTERATIONS") shall be subject to
Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Tenant shall cause, at its expense,
all Tenant-Made Alterations to comply with insurance requirements and
with Legal Requirements and shall construct at its expense any
alteration or modification required by Legal Requirements as a result
of any Tenant-Made Alterations. Any structural alterations, additions,
or improvements made by or on behalf of Tenant to the Premises
("STRUCTURAL ALTERATIONS") shall be subject to Landlord's prior written
consent, which consent may be withheld or delayed in Landlord's sole
discretion. NO REPAIRS, ALTERATIONS, ADDITIONS, OR IMPROVEMENTS
PROVIDED FOR OR REQUIRED IN THIS LEASE TO BE MADE BY TENANT, AND NO
CONSENT BY LANDLORD TO ANY ALTERATION,
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ADDITIONS, REPAIRS OR IMPROVEMENTS BY OR ON BEHALF OF TENANT, SHALL BE
DEEMED TO INCLUDE, EXPRESSLY OR BY IMPLICATION, A CONSENT OR
AUTHORIZATION BY LANDLORD TO THE FILING OF ANY CONSTRUCTION LIEN
AGAINST THE LANDLORD'S INTEREST IN THE PROPERTY.
(c) All Tenant-Made Alterations and any Structural Alterations shall be
constructed in a good and workmanlike manner by contractors reasonably
acceptable to Landlord and only good grades of materials shall be used.
All plans and specifications for any Tenant-Made Alterations which
require Landlord's consent and for any Structural Alterations shall be
submitted to Landlord for its approval, which approval shall not be
unreasonably withheld or delayed. Landlord may monitor construction of
the Tenant-Made Alterations. Landlord's right to review plans and
specifications and to monitor construction shall be solely for its own
benefit, and Landlord shall have no duty to see that such plans and
specifications or construction comply with applicable laws, codes,
rules and regulations.
(d) Tenant shall, upon request, provide Landlord with the identities
and mailing addresses of all persons performing work or supplying
materials, prior to beginning such construction, and Landlord may post
on and about the Premises notices of non-responsibility pursuant to
applicable law. Tenant shall make reasonable arrangements satisfactory
to Landlord to assure payment for the completion of all work free and
clear of liens and shall provide certificates of insurance for worker's
compensation and other coverage in amounts and from an insurance
company satisfactory to Landlord protecting Landlord against liability
for personal injury or property damage during construction. Upon
completion of any Tenant-Made Alterations, Tenant shall deliver to
Landlord the names of all contractors and subcontractors who did work
on the Tenant-Made Alterations and final lien waivers from all such
contractors and subcontractors.
(e) Upon surrender of the Premises, all Tenant-Made Alterations and any
leasehold improvements constructed by Landlord or Tenant shall remain
on the Premises as Landlord's property, except to the extent Landlord
requires removal at Tenant's expense of any such items or Landlord and
Tenant have otherwise agreed in writing in connection with Landlord's
consent to any Tenant-Made Alterations. Prior to the expiration or
termination of this Lease, Tenant, at its sole expense, shall repair
any and all damage caused by such removal.
(f) Tenant, at its own cost and expense and without Landlord's prior
approval, may erect such equipment necessary for the functioning of a
plating facility as contemplated herein (collectively "TRADE FIXTURES")
in the ordinary course of its business provided that such items do not
alter the basic character of the Premises, do not overload the floors
or otherwise damage the Premises, and which may be removed without
injury to the Premises, and the construction, erection, and
installation thereof complies with all Legal Requirements and with
Landlord's requirements set forth above. Prior to the expiration or
termination of this Lease, Tenant, at its sole expense, shall remove
its Trade Fixtures and shall repair any and all damage caused by such
removal.
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11. SIGNS. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, or painting, or
erect or install any signs, windows or door lettering, placards,
decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed. Tenant
shall have the right to install, at Tenant's sole cost and expense and
subject to Landlord's reasonable consent as provided herein and to
Tenant's obtaining all applicable permits and complying with all
applicable laws and ordinances, one or more facade mounted and/or
ground mounted signs. Landlord shall not be required to notify Tenant
of whether it consents to any sign until it (a) has received detailed,
to-scale drawings thereof specifying design, material composition,
color scheme, and method of installation, and (b) has had a reasonable
opportunity to review them. Notwithstanding the foregoing sentence,
Landlord will provide its consent or reasonable objection and
reasonable request for modification of Tenant's signage plans within
ten (10) days of receipt by Landlord of Tenant's request for consent
and of the items listed under subsection (a) of the preceding sentence.
Upon surrender or vacation of the Premises, Tenant shall have removed
all signs and repair, paint, and/or replace the building fascia surface
to which its signs are attached. Tenant shall obtain all applicable
governmental permits and approvals for sign and exterior treatments.
12. RESTORATION. (a) If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant
within thirty (30) days after such damage as to the amount of time
Landlord reasonably estimates it will take to restore the Premises. If
the restoration time is estimated to exceed ninety (90) days from the
date the damage occurs, either Landlord or Tenant may elect to
terminate this Lease upon notice to the other party given no later than
thirty (30) days after Landlord's notice. If neither party elects to
terminate this Lease or if Landlord estimates that restoration will
take ninety (90) days or less, then, Landlord shall promptly restore
the Premises excluding the improvements installed by Tenant or by
Landlord and paid by Tenant. Tenant at Tenant's expense may in its sole
judgment perform all repairs or restoration not required to be done by
Landlord and shall if it so chooses, re-enter the Premises and commence
doing business in accordance with this Lease. Notwithstanding the
foregoing, either party may terminate this Lease upon thirty (30) days
prior written notice to the other if the Premises are damaged during
the last year of the Lease Term and Landlord reasonably estimates that
it will take more than ninety (90) days to repair such damage.
(b) If the Premises are destroyed or substantially damaged, either
party may terminate this Lease by delivering written notice of
termination to the other within thirty (30) days after such destruction
or damage, whereupon the Lease shall be deemed to be terminated within
thirty (30) days after such notice of termination and upon the
expiration of such thirty (30) day period all rights and obligations
hereunder shall cease and terminate, except for any liabilities which
accrued prior to Lease termination.
(c) If such damage or destruction is caused by the act(s) or
omission(s) of Tenant, its employees, agents or contractors, Tenant
shall pay to Landlord with respect to any damage to the Premises the
amount of the commercially reasonable deductible under Landlord's
insurance policy, if any, within fifteen (15) days after presentment of
Landlord's invoice.
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Monthly Base Rent shall be abated for the period of repair and
restoration in the proportion which the area of the Premises, if any,
which is not usable by Tenant bears to the total area of the Premises.
Such abatement shall be the sole remedy of Tenant. Except as provided
herein, Tenant waives any right to terminate the Lease by reason of
damage or casualty loss.
13. CONDEMNATION. If any part of the Premises should be taken for any
public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in
lieu thereof (a "TAKING" or "TAKEN"), and (a) the Taking would prevent
or materially interfere with Tenant's use of the Premises, then upon
sixty (60) days prior written notice by Landlord or Tenant this Lease
shall terminate and Monthly Base Rent shall be apportioned as of said
date. If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, the Monthly Base Rent payable hereunder
during the unexpired Lease Term shall be reduced to such extent as may
be fair and reasonable under the circumstances, and Landlord shall
restore the Premises to its condition prior to the Taking; provided,
however, Landlord's obligation to so restore the Premises shall be
limited to the award Landlord receives in respect of such Taking.
Tenant shall have the right, to the extent that same shall not diminish
Landlord's award, to make a separate claim against the condemning
authority (but not Landlord) for such compensation as may be separately
awarded or recoverable by Tenant for the value of its leasehold estate,
for moving expenses and damage to Tenant's Trade Fixtures, if a
separate award for such items is made to Tenant.
14. ASSIGNMENT AND SUBLETTING. (a) Without Landlord's prior written consent
(which shall not be unreasonably withheld, delayed or conditioned),
Tenant shall not assign this Lease or sublease the Premises or any part
thereof or mortgage, pledge, or hypothecate its leasehold interest or
grant any concession or license within the Premises (each being a
"TRANSFER") and any attempt to do any of the foregoing shall be void
and of no effect. For purposes of this Paragraph 14, a transfer of the
ownership interests controlling Tenant shall be deemed a Transfer of
this Lease. Relevant criteria in determining reasonableness of approval
include, but are not limited to, credit history of a proposed assignee
or sublessee, negative references from prior landlords, concern over
the environmental impact of the business to be conducted on the
Premises by such proposed assignee or sublessee and any change or
intensification of use of the Premises. Notwithstanding any approved
assignment or approved sublease, the Tenant shall remain fully liable
on this Lease and shall not be released from performing any of the
terms, covenants and conditions of this Lease. Notwithstanding the
above, Tenant may assign or sublet the Premises, or any part thereof,
to any entity controlling Tenant or that obtains control of Tenant
through a merger or reorganization, or any of its subsidiaries or
affiliates, or any entity controlled by Tenant or under common control
with Tenant including without limitation any subsidiary, affiliate or
successor in interest (each of such persons or entities a "TENANT
AFFILIATE"), without the prior written consent of Landlord; provided,
however, Tenant shall provide at least ten (10) days written notice
prior to assigning this Lease to, or entering into any sublease with,
any Tenant Affiliate and reasonable evidence of the affiliate
relationship.
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(b) Notwithstanding any Transfer, Tenant and any guarantor or surety of
Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the Rent and for compliance
with all of Tenant's other obligations under this Lease (regardless of
whether Landlord's approval has been obtained for any such Transfer).
(c) If this Lease is assigned or any concession or license is granted
within the Premises or if the Premises are occupied in whole or in part
by anyone other than Tenant, then upon a default by Tenant hereunder
Landlord may collect Rent from the assignee, pledgee or licensee or
other occupant and, except to the extent set forth in the preceding
subparagraph, apply the amount collected to the next Rent payable
hereunder; and all such rentals collected by Tenant shall be held in
trust for Landlord and immediately forwarded to Landlord. No such
transaction or collection of Rent or application thereof by Landlord,
however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties,
or obligations hereunder. Any approved assignment shall be expressly
subject to the terms and conditions of this Lease. Landlord's consent
to any Transfer shall not waive Landlord's rights as to any subsequent
Transfers.
15. ASSUMPTION OF LIABILITIES AND INDEMNIFICATION. Tenant assumes all
liabilities for all claims, demands, losses, liabilities, lawsuits,
judgments, damages, costs and expenses ("Losses") arising from any
occurrence on the Premises, the use and occupancy of the Premises, or
from any activity, work, or thing done, permitted or suffered by Tenant
in or about the Premises or due to any other act or omission of Tenant,
its subtenants, assignees, invitees, licensees, employees, contractors
and agents ("Tenant's Representatives"), or from Tenant's or Tenant's
Representatives, failure to perform its obligations under this Lease,
except for Losses arising from any occurrence taking place prior to the
Lease Commencement Date or caused by the sole or gross negligence of
Landlord or its agents. This indemnity provision shall survive
termination or expiration of this Lease. The furnishing of insurance
required hereunder shall not be deemed to limit Tenant's obligations
under this Paragraph 15. Notwithstanding the foregoing, the parties'
rights and obligations with respect to Environmental Conditions or
Environmental Claims (as such terms are defined in Paragraph 27 below)
shall be set forth in Paragraph 27 below.
16. INSPECTION AND ACCESS. Landlord and its agents, representatives, and
contractors may enter the Premises during normal business hours with
reasonable advance telephone notice to Tenant to (i) inspect the
Premises, (ii) make such repairs as may be required or permitted
pursuant to this Lease, and (iii) test and remediate the soil, ground
water equipment and systems transporting, holding or discharging
Hazardous Materials and (iv) review other environmental conditions, may
be necessary or appropriate, to fulfill Landlord's responsibilities
under any Remedial Action or otherwise meet its obligations under any
Environmental Laws. Landlord and Landlord's representatives may enter
the Premises during business hours with advance notice to Tenant for
the purpose of showing the Premises to prospective purchasers or,
during the last year of the Lease Term or the last year of any renewal
periods or extensions thereof, to prospective tenants upon providing
advance notice. Landlord may erect a suitable sign on the Premises
stating the Premises are available to let or that the Premises is
available for sale during the last year of the Lease Term or the last
year of any renewal periods or extensions thereof. Landlord may grant
11
easements, make public dedications, designate common areas and create
restrictions on or about the Premises, provided that no such easement,
dedication, designation or restriction interferes with Tenant's use or
occupancy of the Premises in Tenant's sole opinion. At Landlord's
request, Tenant shall execute such instruments as may be necessary for
such easements, dedications or restrictions.
17. QUIET ENJOYMENT. Tenant shall, subject to Tenant's observance of the
terms of this Lease, at all times during the Lease Term, have peaceful
and quiet enjoyment of the Premises against any person claiming by,
through or under Landlord.
18. SURRENDER. No act by Landlord shall be an acceptance of a surrender of
the Premises, and no agreement to accept a surrender of the Premises
shall be valid unless it is in writing and signed by Landlord. Upon
termination of the Lease Term or earlier termination of Tenant's right
of possession, Tenant shall surrender the Premises to Landlord in the
same condition as received (subject to Tenant's rights hereunder to
make Tenant-Made Alterations or other alterations consented to by
Landlord) broom clean, ordinary wear and tear and casualty loss and
condemnation covered by Paragraph 15 and Paragraph 16 excepted. Any
Trade Fixtures, Tenant-Made Alterations and property not so removed by
Tenant as permitted or required herein shall be deemed abandoned and
may be stored, removed, and disposed of by Landlord at Tenant's expense
and Tenant waives all claims against Landlord for any damages resulting
from Landlord's retention and disposition of such property. All
obligations of Tenant and Landlord hereunder not fully performed as of
the termination of the Lease Term shall survive the termination of the
Lease Term, including without limitation, indemnity obligations,
payment obligations and all obligations concerning the condition and
repair of the Premises.
19. HOLDING OVER. If Tenant fails to vacate the Premises after the
expiration of the Lease Term, Tenant shall be a tenant from month to
month, and Tenant shall pay, in addition to any other Rent or other
sums then due Landlord, Monthly Base Rent at the rate of 200% of the
then prevailing Monthly Base Rent, which shall be payable in advance on
the first day of each calendar month. Tenant shall also be liable for
all expenses pursuant to Paragraph 6 herein incurred during such
holdover period. In addition, Tenant shall be liable for all damages
(including reasonable attorneys' fees and expenses) incurred by
Landlord as a result of such holding over. No holding over by Tenant,
whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Paragraph
19 shall not be construed as consent for Tenant to retain possession of
the Premises. After the ninth anniversary of the Commencement Date,
Tenant and Landlord shall enter into good faith discussions to
determine whether to enter into an extension of the Lease.
20. EVENTS OF DEFAULT. Each of the following events shall be an event of
default ("EVENT OF DEFAULT") by Tenant under this Lease:
(a) Tenant shall fail to pay any installment of Monthly Base Rent
or any other payment required herein when due, and such failure shall
continue for a period of ten (10) business days from the date such
payment was due.
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(b) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (i) make a general assignment for the benefit of
creditors; (ii) commence any case, proceeding or other action seeking
to have an order for relief entered on its behalf as a debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts or seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or of any substantial part
of its property (collectively a "PROCEEDING FOR RELIEF"); (iii) become
the subject of any proceeding for relief which is not dismissed within
sixty (60) days of its filing or entry; or (iv) die or suffer a legal
disability (if Tenant, guarantor, or surety is an individual) or be
dissolved or otherwise fail to maintain its legal existence (if Tenant,
guarantor or surety is a corporation, partnership or other entity).
(c) Any insurance required to be maintained by Tenant pursuant to
this Lease shall be cancelled or terminated or shall expire or shall be
reduced or materially changed and shall not be reinstated within ten
(10) days of such cancellation, except, in each case, as permitted in
this Lease.
(d) Tenant shall attempt or there shall occur any Transfer of
Tenant's interest in or with respect to this Lease except as otherwise
permitted in this Lease.
(e) Tenant shall fail to discharge or bond over any lien placed
upon the Premises in violation of this Lease within thirty (30) days
after Tenant becomes aware that any such lien or encumbrance has been
filed against the Premises.
(f) Tenant shall fail to execute any instrument of subordination
or attornment or any estoppel certificate within the time periods set
forth in Paragraph 27 and Paragraph 29, respectively, following
Landlord's written request for the same.
(g) Tenant shall breach any of the requirements of Paragraph 27
and such failure shall continue for a period of ten (10) business days
or more after written notice from Landlord to Tenant, provided,
however, that if the failure is such that cannot be cured within such
ten (10) business day period, Tenant shall be deemed to have cured such
default if Tenant has commenced such cure within said ten (10) business
day period and has proceeded diligently to prosecute compliance
therewith within a reasonable time thereafter.
(h) Tenant shall fail to comply with any provision of this Lease
other than those specifically referred to in this Paragraph 20, and
(except where a different notice and/or cure period is expressly
provided in this Lease) such default shall continue for more than
thirty (30) days (or such different notice and/or cure period, as
applicable) after Landlord shall have given Tenant written notice of
such default, provided, however, that if the thirty (30) day period
referred to in this subsection is applicable and the cause for giving
such notice involves the making of repairs or other matters reasonably
requiring a longer period of time, Tenant shall be deemed to have cured
such default if Tenant has commenced such cure within said thirty (30)
day period and has proceeded diligently to prosecute compliance
therewith within a reasonable time thereafter.
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21. LANDLORD'S REMEDIES. (a) Upon each occurrence of an Event of Default
and so long as such Event of Default shall be continuing and uncured by
Tenant, Landlord may at any time thereafter at its election: terminate
this Lease or Tenant's right of possession, (but Tenant shall remain
liable as hereinafter provided) and/or pursue any other remedies at law
or in equity. Upon the termination of this Lease or termination of
Tenant's right of possession, it shall be lawful for Landlord, without
formal demand or notice of any kind, to re-enter the Premises by
summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property
therefrom. If Landlord re-enters the Premises, Landlord shall have the
right to keep in place or remove and store, all of the furniture,
fixtures and equipment at the Premises.
(b) If Landlord terminates this Lease, Landlord may recover from
Tenant the sum of: all Monthly Base Rent and all other amounts accrued
hereunder to the date of such termination; the cost of reletting the
whole or any part of the Premises, including without limitation
brokerage fees and/or leasing commissions incurred by Landlord, and
costs of removing and storing Tenant's or any other occupant's
property, and all reasonable expenses incurred by Landlord in pursuing
its remedies, including reasonable attorneys' fees and court costs; and
an amount in cash equal to the then present value of the Monthly Base
Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during
the period following the termination of this Lease measured from the
date of such termination to the date the Premises is leased again. Such
present value shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.
(c) If Landlord terminates Tenant's right of possession (but not
this Lease), Landlord may, but shall be under no obligation to, relet
the Premises for the account of Tenant for such rent and upon such
terms as shall be satisfactory to Landlord without thereby releasing
Tenant from any liability hereunder and without demand or notice of any
kind to Tenant. For the purpose of such reletting Landlord is
authorized to make any repairs, changes, alterations, or additions in
or to the Premises as Landlord deems reasonably necessary or desirable.
If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease
for such period or periods, plus the cost of recovering possession of
the Premises (including attorneys' fees and costs of suit), the unpaid
Base Rent and other amounts accrued hereunder at the time of
repossession, and the costs incurred in any attempt by Landlord to
relet the Premises. If the Premises are relet and a sufficient sum
shall not be realized from such reletting, after first deducting
therefrom, for retention by Landlord, the unpaid Base Rent and other
amounts accrued hereunder at the time of reletting, to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately
satisfy and pay any such deficiency. Any such payments due Landlord
shall be made upon demand therefor from time to time and Tenant agrees
that Landlord may file suit to recover any sums falling due from time
to time. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect in writing to terminate this
Lease for such previous breach.
(d) Exercise by Landlord of any one or more remedies hereunder
granted or otherwise available shall not be deemed to be an acceptance
of surrender of the Premises and/or a termination of this Lease by
Landlord, whether by agreement or by operation of law. Any
14
law, usage, or custom to the contrary notwithstanding, Landlord shall
have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at
any time to enforce its rights under this Lease strictly in accordance
with same shall not be construed as having created a custom in any way
or manner contrary to the specific terms, provisions, and covenants of
this Lease or as having modified the same. Tenant and Landlord further
agree that forbearance or waiver by Landlord to enforce its rights
pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection
with any subsequent default. A receipt by Landlord of Rent or other
payment with knowledge of the breach of any covenant hereof shall not
be deemed a waiver of such breach, and no waiver by Landlord of any
provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by Landlord. To the greatest extent
permitted by law, Tenant waives the service of notice of Landlord's
intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption
in case Tenant shall be dispossessed by a judgment or by warrant of any
court or judge. The terms "enter," "re-enter," "entry" or "re-entry,"
as used in this Lease, are not restricted to their technical legal
meanings. Any reletting of the Premises shall be on such terms and
conditions as Landlord in its sole discretion may determine (including
without limitation a term different than the remaining Lease Term,
rental concessions, alterations and repair of the Premises, lease of
less than the entire Premises to any tenant and leasing any or all
other portions of the Project before reletting the Premises). Landlord
shall not be liable, Tenant's obligations hereunder shall not be
diminished because of, Landlord's failure to relet the Premises or
collect rent due in respect of such reletting, provided Landlord shall
make reasonable efforts to mitigate its damages.
(e) Tenant hereby waives all right of redemption to which Tenant
or any person under Tenant might be entitled by any applicable law.
Tenant agrees that Landlord shall have no greater obligation to
mitigate damages than the efforts made by Tenant itself to mitigate
such damages prior to or after default by Tenant.
22. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its
obligations hereunder within thirty (30) days after written notice from
Tenant specifying such failure (unless such performance will, due to
the nature of the obligation, require a period of time in excess of
thirty (30) days, then after such period of time as is reasonably
necessary). All obligations of Landlord hereunder shall be construed as
covenants, not conditions; and Tenant may not terminate this Lease for
breach of Landlord's obligations hereunder. Other than obligations that
may arise under Paragraph 27 below, all obligations of Landlord under
this Lease will be binding upon Landlord only during the period of its
ownership of the Premises and not thereafter. The term "Landlord" in
this Lease shall mean only the owner, for the time being of the
Premises, and in the event of the transfer by such owner of its
interest in the Premises, such owner shall thereupon be released and
discharged from all obligations of Landlord thereafter accruing, but
such obligations shall be binding during the Lease Term upon each new
owner for the duration of such owner's ownership. Other than
liabilities that may rise under Paragraph 27 below, (i) any liability
of Landlord under this Lease or arising out of the relationship between
Landlord and Tenant shall be limited solely to Landlord's interest in
the Premises, (ii) no personal liability shall be asserted against
15
Landlord in connection with this Lease, and (iii) no recourse shall be
had to any other property or assets of Landlord. The obligations of
Landlord hereunder shall be binding upon any successor or assign of
Landlord, provided that the obligations of Landlord under Paragraph 27
may be assigned only to a successor to all or substantially all of
Landlord's business or assets.
23. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, TENANT
AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
24. SUBORDINATION. (a) This Lease and Tenant's interest and rights
hereunder are and shall be subject and subordinate at all times to the
lien of any first mortgage, now existing or hereafter created on or
against the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions
thereof, without the necessity of any further instrument or act on the
part of Tenant. Tenant agrees, at the election of the holder of any
such mortgage ("LANDLORD'S MORTGAGEE"), to attorn to any such holder.
The provisions of this Paragraph 24 shall be self-operative and no
further instrument shall be required to effect such subordination or
attornment; however, Tenant agrees to execute, acknowledge and deliver
such instruments, confirming such subordination and such instruments of
attornment as shall be requested by any such holder within fifteen (15)
days of such request. Tenant's obligation to furnish each such
instrument requested hereunder in the time period provided is a
material inducement for Landlord's execution of this Lease and any
failure of tenant to timely deliver each instrument shall be deemed an
Event of Default. Tenant hereby appoints Landlord attorney in fact for
Tenant irrevocably (such power of attorney being coupled with an
interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such
instrument to be recorded, such power of attorney will terminate upon
the termination or earlier expiration of this Lease. Landlord shall use
reasonable efforts to obtain from any current or future Landlord
Mortgagee, a non-disturbance agreement in favor of Tenant.
(b) Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by
notice in writing to Tenant, and thereupon this Lease shall be deemed
prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall
have the same rights with respect to this Lease as though this Lease
had been executed prior to the execution, delivery and recording of
such mortgage and had been assigned to such holder. The term "mortgage"
whenever used in this Lease shall be deemed to include deeds of trust,
security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary
under a deed of trust.
(c) Tenant shall not seek to enforce any remedy it may have for
any default on the part of Landlord without first giving written notice
by certified mail, return receipt
16
requested, specifying the default in reasonable detail to any mortgage
holder whose address has been given to Tenant, and affording such
mortgage holder a reasonable opportunity to perform Landlord's
obligations hereunder. Notwithstanding any such attornment or
subordination of a mortgage to this Lease, the holder of any mortgage
shall not be liable for any acts of any previous landlord, shall not be
obligated to install any tenant improvements, and shall not be bound by
any amendment to which it did not consent in writing nor any payment of
Rent made more than one month in advance.
25. CONSTRUCTION LIENS. Tenant has no express or implied authority to
create or place any lien or encumbrance of any kind upon, or in any
manner to bind the interest of Landlord in, the Premises or to charge
the Rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs. Tenant covenants and
agrees that it will pay or cause to be paid all sums legally due and
payable by it on account of any labor performed or materials furnished
in connection with any work performed on the Premises and that it will
save and hold Landlord harmless from all loss, cost or expense based on
or arising out of asserted claims or liens against the leasehold estate
or against the interest of Landlord in the Premises or under this
Lease. Tenant shall give Landlord immediate written notice of the
placing of any lien or encumbrance against the Premises and cause such
lien or encumbrance to be discharged within thirty (30) days of the
filing or recording thereof; provided, however, Tenant may contest such
liens or encumbrances as long as such contest prevents foreclosure of
the lien or encumbrance and Tenant causes such lien or encumbrance to
be bonded or insured over in a manner satisfactory to Landlord within
such thirty (30) day period.
26. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten
(10) business days after written request of Landlord, to execute and
deliver to Landlord, or Landlord's designee, any estoppel certificate
requested by Landlord, stating that this Lease is in full force and
effect, the date to which Rent has been paid, that Landlord is not in
default hereunder (or specifying in detail the nature of Landlord's
default), the termination date of this Lease and such other matters
pertaining to this Lease as may be requested by Landlord. Tenant's
obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for Landlord's execution of this Lease and any
failure of Tenant to timely deliver each estoppel certificate shall be
deemed an Event of Default. No cure or grace period provided in this
Lease shall apply to Tenant's obligation to timely deliver an estoppel
certificate. Tenant hereby irrevocably appoints Landlord as its
attorney in fact to execute on its behalf and in its name any such
estoppel certificate if Tenant fails to execute and deliver the
estoppel certificate within ten (10) business days after Landlord's
written request thereof.
27. ENVIRONMENTAL LAWS. (a) Definitions. As used herein, the following
terms shall have the following meanings:
(i) "HAZARDOUS MATERIALS" shall mean any substances, materials or
wastes, whether liquid, gaseous or solid, or any pollutant or
contaminant, that is infectious, toxic, hazardous, explosive,
corrosive, flammable or radioactive, including without
limitation, petroleum, polychlorinated biphenyls, asbestos and
asbestos containing
17
materials and urea formaldehyde, or that is regulated under,
defined, listed or included in any Environmental Laws,
including without limitation, CERCLA, RCRA, OSHA and ISRA. It
is understood and agreed that the provisions contained in this
lease shall be applicable notwithstanding whether any
substance shall not have been deemed to be a hazardous
material at the time of its use or Release (as defined below)
but shall thereafter be deemed to be a Hazardous Material.
(ii) "RELEASE" shall mean any intentional or unintentional release,
discharge, burial, spill, leaking, pumping, pouring, emitting,
emptying, injection, disposal or dumping into the Environment.
(iii) "NOTICE" means any summons, citation, directive, order, claim,
litigation, investigation, proceeding, judgment, letter or
other communication, written or oral, actual or threatened,
from the New Jersey Department of Environmental Protection
("NJDEP"), the United States Environmental Protection Agency
("USEPA"), the United States Occupational Safety and Health
Administration ("OSHA") or other Federal, state or local
agency or authority, or any other entity or any individual,
concerning any act or omission resulting or which may result
in the Releasing of Hazardous Materials into the waters or
onto the lands of the State of New Jersey, or into waters
outside the jurisdiction of the State of New Jersey, or into
the Environment.
(iv) "REMEDIAL ACTION" means any and all: (i) investigations of
Environmental Conditions of any kind or nature whatsoever,
including site assessments, site investigations, remedial
investigations, soil, groundwater, surface water, sediment
sampling or monitoring; or (ii) actions of any kind or nature
whatsoever taken to remove, abate or remediate Environmental
Conditions, including the use, implementation, application,
installation, operation or maintenance of removal actions,
in-situ or ex-situ remediation technologies applied to the
surface or subsurface soils, encapsulation or stabilization of
soils, excavation and off-site treatment or disposal of soils,
systems for the recovery and/or treatment of groundwater or
free product, Engineering Controls or Institutional Controls
(as such terms are defined at N.J.A.C. 7:26E-1.8).
(v) "ENVIRONMENT" means air, land, surface soil, subsurface soil,
sediment, surface water, groundwater, wetlands, and all flora
and fauna present therein or thereon.
(vi) "ENVIRONMENTAL CLAIM" means any and all claims, demands,
causes of action, suits, proceedings, administrative
proceeding, orders, losses, judgments, decrees, debts,
investigations, requests or demands for information, damages
(whether to person, property or natural resource),
liabilities, court costs, attorneys' fees and other expenses.
(vii) "ENVIRONMENTAL CONDITIONS" means the Release of any Hazardous
Material in, on or from the Premises or into the Environment.
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(viii) "ENVIRONMENTAL LAWS" means any and all present or future
federal, regional, state, county or local laws, statutes,
ordinances, decisional law, rules, regulations, codes, orders,
decrees, directives and judgments relating to public health or
safety, pollution, damage to or protection of the Environment,
Releases or threatened Releases of Hazardous Materials into
the Environment or the use, manufacture, processing,
distribution, treatment, storage, generation, disposal,
transport or handling of Hazardous Materials, including but
not limited to, the Federal Water Pollution Control Act, 33
U.S.C. Sections 1231-1387; the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901-6991 ("RCRA"); the Clean
Air Act, 42 U.S.C. Sections 7401-7642; the Comprehensive
Environmental Response Compensation and Liability Act, 42
U.S.C. Sections 9601-9675 ("CERCLA"); the Toxic Substances
Control Act, 15 U.S.C. Sections 2601-2629; the Federal
Occupational Safety and Health Act, 29 U.S.C. Section 657 et
seq. ("OSHA"); New Jersey Industrial Site Recovery Act
("ISRA"); the New Jersey Spill Compensation and Control Act,
N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"); the New Jersey
Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.; the
New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et
seq.; and the New Jersey Environmental Rights Act, N.J.S.A.
2A:35A-1 et seq.; and any and all rules and regulations
promulgated thereunder. For purposes of Environmental Laws, to
the extent authorized by law, Tenant is and shall be deemed to
be the responsible party, including without limitation, the
"owner" and "operator" of Tenant's "facility" and the "owner"
of all Hazardous Materials brought on the Premises by Tenant,
or Tenant's Representatives, and the wastes, by-products, or
residues generated, resulting, or produced therefrom.
(ix) "REMEDIATION STANDARDS" shall have the meaning provided for
under N.J.A.C. 7:26E-18.
(x) "LANDLORD ISRA COMPLIANCE PROCEEDING" shall mean the
administrative proceeding commenced by Landlord in September
2003 pursuant to ISRA with respect to the Premises, which
proceeding has been designated ISRA Case No. E2003400.
(b) Tenant shall not permit or cause any party to bring any
Hazardous Material upon the Premises or transport, store, use,
generate, manufacture, or dispose any Hazardous Material in, on or from
the Premises other than in strict compliance with all Environmental
Laws and all requirements of this Lease. Tenant shall not Release,
permit a Release, or cause any party to Release Hazardous Materials,
other than in strict compliance with all Environmental Laws. Tenant
shall complete and certify to disclosure statements as requested by
Landlord from time to time, but not less than once each calendar
quarter, relating to Tenant's transportation, storage, use, generation,
manufacture, or Release of Hazardous Materials in, on, or from the
Premises, and/or Environment, and Tenant shall promptly deliver to
Landlord a copy of any notice of violation relating to the Premises of
any Environmental Law.
(c) Tenant's Standard Industrial Classification Number is as set
forth above. Tenant will immediately notify Landlord of any changes in
this number during the Lease Term.
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Tenant, at its own cost and expense, agrees to comply with all
applicable present and future Environmental Laws, rules and regulations
of the Federal, State, County and Municipal governments and of all
other governmental authorities having or claiming jurisdiction over the
Premises or appurtenances thereto, or any part thereof, which are
applicable to the Premises and/or the conduct of business thereon,
including but not limited to ISRA. Further, Tenant agrees to make
submissions to and provide any information required by all governmental
authorities requesting same pursuant to Tenant's obligations under this
Paragraph 27.
(d) Tenant, at its sole cost and expense, shall remove all
Hazardous Materials stored on the Premises, or Released by Tenant or,
Tenant's Representatives, in a manner and to a level that complies with
all Environmental Laws and does not limit the use of the Premises for
industrial uses permitted by law. Tenant shall perform such work at any
time during the period of the Lease upon written request by Landlord
or, in the absence of a specific request by Landlord, before Tenant's
right to possession of the Premises terminates or expires. If Tenant
fails to perform such work within the reasonable time period specified
by Landlord or before Tenant's right to possession terminates or
expires (whichever is earlier), Landlord may at its discretion, and
without waiving any other remedy available under this Lease or at law
or equity (including without limitation an action to compel Tenant to
perform such work), perform such work at Tenant's cost. Tenant shall
pay all costs incurred by Landlord in performing such work within
thirty (30) days after Landlord's request therefor. Such work performed
by Landlord is on behalf of Tenant and Tenant remains the owner,
generator, operator, transporter, and/or arranger of the Hazardous
Materials for purposes of Environmental Laws. Tenant agrees not to
enter into any agreement with any person, including without limitation
any governmental authority, regarding the removal of Hazardous
Materials that have been disposed of or otherwise Released without the
written approval of the Landlord, which such approval shall not be
unreasonably withheld.
(e) In the event that Landlord shall have received a Negative
Declaration or No Further Action and Covenant Not to Sue, as defined by
ISRA, or such other written determination by the NJDEP that the
Landlord ISRA Compliance Proceeding has been completed to the
satisfaction of the NJDEP (the "Landlord ISRA Clearance"), which such
Landlord ISRA Clearance shall be obtained at Landlord's sole cost and
expense, then prior to (i) closing operations or transferring ownership
or operations of Tenant (as defined under ISRA) at the Premises, (ii)
the expiration or sooner termination of the Lease, (iii) any assignment
of the lease or any subletting of any portion of the Premises, or (iv)
any other event caused by Tenant that may trigger ISRA (a "Tenant
Triggering Event"), Tenant shall at its own cost and expense, comply
with all requirements of ISRA pertaining thereto. Should the NJDEP
determine in connection with any ISRA compliance proceeding that a
clean-up plan be prepared and that Remedial Action be undertaken to
address any Releases of Hazardous Materials, that are caused by Tenant
or Tenant's Representatives, the Tenant shall, at Tenant's own expense,
prepare and submit the required plans and financial assurances, and
carry out the approved plans. Landlord shall cooperate with Tenant to
supply such information and to execute such applications and/or
affidavits as Tenant may require in order to satisfy its obligations
hereunder.
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(f) In the event the Landlord ISRA Clearance has not been obtained
at the time of a Tenant Triggering Event and neither Tenant nor
Tenant's Representatives have caused a Release, Landlord shall, at its
sole cost and expense, prepare and submit all appropriate notices,
plans, financial assurances, applications or reports with the NJDEP and
carry out the approved plans, including, without limitation, all
Remedial Actions and other requirements of ISRA. Landlord shall be the
Ordered Party under the provisions of any Remediation Agreement
required by ISRA under this Paragraph 27(f). Tenant shall cooperate
with Landlord to supply such information and to execute such
applications and/or affidavits as Landlord may require in order to
satisfy its obligations hereunder. Nothing herein shall be construed as
to mitigate Tenant's obligations under Paragraph 27(b), Paragraph 27(d)
and Paragraph 27(g).
(g) In the event that the NJDEP shall determine, in connection
with an ISRA compliance proceeding undertaken by Landlord or Tenant as
set forth above, that a clean-up plan be prepared and that a Remedial
Action be undertaken to address any Releases of Hazardous Materials
that are caused by Tenant or Tenant's Representatives, the Tenant
shall, at Tenant's own expense, prepare and submit the required plans
and financial assurances and carry out the approved plan, including
without limitation all Remedial Actions and other requirements of ISRA
in order to remediate the Releases caused by Tenant or Tenant's
Representatives. Nothing herein shall be construed as to mitigate
Landlord's obligation to perform any Remedial Actions required as a
result of a Release by Landlord of any Hazardous Materials.
(h) In the event of Tenant's failure to comply in full with the
foregoing provisions, Landlord may, at its option perform any and all
of Tenant's obligations as aforesaid and all reasonable costs and
expenses incurred by Landlord in the exercise of this right shall be
deemed to be Additional Rent payable on demand and with interest until
payment. Such costs and expenses include but are not limited to state
agency fees, engineering fees, cleanup costs, remediation funding
sources, filing fees and suretyship expenses.
(i) At Tenant's sole cost and expense, Tenant shall promptly
provide Landlord with copies of all correspondence, reports, notices,
orders, findings, declarations, laboratory data, and other materials
pertinent to Tenant's compliance with and the NJDEP's requirements
under applicable Environmental Laws, and the New Jersey Technical
Requirements for Site Remediation, N.J.A.C. 7:26E-1.1, as they are
issued or received by the Tenant.
(i) Tenant shall indemnify, defend, and hold Landlord harmless
from and against any and all losses (including, without limitation,
diminution in value of the Premises), claims, demands, actions, suits,
damages (excluding punitive damages from the indemnification to the
extent that such damages result from acts or omissions of Landlord),
expenses (including, without limitation, remediation, removal, repair,
corrective action, or cleanup expenses), and reasonable costs
(including, without limitation, actual attorneys' fees, consultant fees
or expert fees) (all of the foregoing collectively referred to as
"Losses") which are brought or recoverable against, or suffered or
incurred by Landlord as a result of any Release of Hazardous Materials
after the Commencement Date or any breach of the requirements under
this Paragraph 27 by Tenant, or Tenant's Representatives, regardless of
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whether Tenant had knowledge of such noncompliance. The obligations of
Tenant under this Paragraph 27 shall survive any termination of this
Lease.
(k) Landlord may, at its sole cost and expense, have an
environmental consultant appointed to conduct an environmental survey
and inspection quarterly (or more often, if required by Landlord) so
that Landlord may monitor Tenant's compliance with its obligations
under this Paragraph 27. Tenant shall have the right to designate an
alternate consultant to complete the quarterly (or more often, if
required by Landlord) environmental survey, provided, however, that
Landlord must in writing approve said consultant, which approval shall
not be unreasonably withheld. Access to the Premises shall be granted
to Landlord upon Landlord's prior notice to Tenant and at such times so
as to minimize, so far as may be reasonable under the circumstances,
any disturbance to Tenant's operations. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any
rights that Landlord holds against Tenant. Tenant shall promptly notify
Landlord of any communication or report that Tenant makes to any
governmental authority regarding any possible violation of
Environmental Laws or Release or threat of Release of any Hazardous
Materials in, onto or from the Premises, or into the Environment.
Tenant shall, within five (5) days of receipt thereof, provide Landlord
with a copy of any documents or correspondence received from any
governmental agency or other party relating to a possible violation of
Environmental Laws or claim or liability associated with the Release or
threat of Release of any Hazardous Materials in, onto or from the
Premises, or into the Environment.
(l) If applicable, prior to termination of this Lease it shall be
the obligation of Tenant to deactivate any identification number,
permit, license, etc., issued by the USEPA, the NJDEP or any other
Federal, state or local entity dealing with Tenant's generation,
treatment, storage or disposal of Hazardous Materials or solid waste
and comply with any concomitant notification requirements pursuant to
Environmental Laws, or in any other applicable Federal, state or local
law, rule or regulation dealing with Hazardous Materials, solid waste
and/or environmental protection.
(m) In the event there shall be filed a lien by the NJDEP or the
USEPA against the Premises arising out of a Release of Hazardous
Materials caused by Tenant or Tenant's Representatives pursuant to the
provisions of the Spill Act or CERCLA, respectively, Tenant shall
immediately either: (i) pay the claim and remove the lien from the
Premises; or (ii) furnish a bond, cash receipt or other security
reasonably satisfactory to the Landlord sufficient to discharge the
claim out of which the lien arises.
(n) In addition to all other rights and remedies available to
Landlord under this Lease or otherwise, Landlord may, in the event of a
breach of the requirements of this Paragraph 27 that is not cured
within thirty (30) days following notice of such breach by Landlord,
require Tenant to provide financial assurance (such as insurance,
escrow of funds or third party guarantee) in an amount no greater than
the estimated cost to cure the breach. The requirements of this
Paragraph 27 are in addition to and not in lieu of any other provision
in the Lease.
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(o) Notwithstanding anything to the contrary in this Lease, Tenant
shall not be liable to Landlord under this Lease and Landlord shall
indemnify, defend and hold harmless Tenant from and against any Losses
arising from any Release of Hazardous Materials or violation of
Environmental Laws, to the extent such Environmental Laws had been
violated and/or Hazardous Materials existed or were Released prior to
the Commencement Date, or any failure of Landlord to satisfy its
obligations under this Paragraph 27. Tenant shall cooperate with
Landlord and any governmental authorities in all respects in connection
with any Remedial Action, including, without limitation, executing any
and all required documentation necessary and/or desired by Landlord or
such governmental authorities, at no cost to Tenant.
28. RULES AND REGULATIONS. Tenant shall, at all times during the Lease Term
and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord
covering use of the Premises. The current rules and regulations are
attached hereto. In the event of any conflict between said rules and
regulations and other provisions of this Lease, the other terms and
provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by
other tenants in the Premises.
29. SECURITY SERVICES. Tenant acknowledges and agrees that Landlord is not
providing any security services with respect to the Premises and that
Landlord shall not be liable to Tenant for, and Tenant waives any claim
against Landlord with respect to, any loss by theft or any other damage
suffered or incurred by Tenant in connection with any unauthorized
entry into the Premises or any other breach of security with respect to
the Premises.
30. FORCE MAJEURE. Landlord shall not be held responsible for delays in the
performance of its obligations hereunder when caused by strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or
materials or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, delay in
issuance of permits, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes beyond the
reasonable control of Landlord ("FORCE MAJEURE").
31. ENTIRE AGREEMENT. This Lease, together with (i) Sections 5.2, 6.4 and
7.1 of the Asset Purchase Agreement, (ii) Section 6.1(e) of the Asset
Purchase Agreement with respect to the indemnification of Buyer (as
referred to therein) for environmental liabilities as set forth in
Section 1.3(a)(i) and (x) thereof, and (iii) Section 6.2(d) of the
Asset Purchase Agreement with respect to indemnification of Seller and
Parent (as referred to therein) for environmental liabilities as set
forth in Section 1.3(b)(vii) thereof, constitute the complete and
entire agreement of Landlord and Tenant with respect to the subject
matter hereof. No representations, inducements, promises or agreements,
oral or written, have been made by Landlord or Tenant, or anyone acting
on behalf of Landlord or Tenant, which are not contained herein, and
any prior agreements, promises, negotiations, or representations are
superseded by this Lease. This Lease may not be amended except by an
instrument in writing signed by both parties hereto.
32. SEVERABILITY. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the
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parties hereto that the remainder of this Lease shall not be affected
thereby. It is also the intention of the parties to this Lease that in
lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or
provision as similar in terms to such illegal, invalid or unenforceable
clause or provision as may be possible and be legal, valid and
enforceable.
33. BROKERS. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and
that no broker, agent or other person brought about this transaction,
other than the broker, if any, set forth on the first or second pages
of this Lease, and Tenant agrees to indemnify and hold Landlord
harmless from and against any claims by any other broker, agent or
other person claiming a commission or other form of compensation by
virtue of having dealt with Tenant with regard to this leasing
transaction.
34. MISCELLANEOUS. (a) Any payments or charges due from Tenant to Landlord
hereunder shall be considered Rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each
shall be jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this Lease
shall be in writing and shall be sent by registered or certified mail,
return receipt requested, or by a reputable national overnight courier
service, postage prepaid, or by hand delivery and, if to Tenant,
addressed to Tenant at the address for Tenant noted on the first page
of this Lease, and if to Landlord, addressed to Landlord at the address
for Landlord noted on the first page of this Lease. Either party may by
notice given aforesaid change its address for all subsequent notices.
Except where otherwise expressly provided to the contrary, notice shall
be deemed given upon delivery.
(d) At Landlord's request from time to time Tenant shall furnish
Landlord with true and complete copies of its most recent annual
financial statements prepared by Tenant or Tenant's accountants and any
other financial information or summaries that Tenant typically provides
to its lenders or shareholders. Such annual statements shall be
certified by the chief executive officer and majority shareholder of
the Tenant. Landlord shall hold such financial statements and
information in confidence, and shall not disclose the same except: (i)
to Landlord's lenders or potential lenders, (ii) to potential
purchasers of all or a portion of the Premises, or (iii) if disclosure
is required by any judicial or administrative order or ruling.
(e) Upon full execution by the parties hereto, Landlord or Tenant
may prepare, and upon request Landlord or Tenant, as applicable, will
execute, a memorandum of lease for recording by the requesting party in
the applicable public records. The form of such memorandum shall be
reasonable acceptable to Landlord and Tenant.
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(f) Each party acknowledges that it has had the opportunity to
consult counsel with respect to this Lease, and therefore, the normal
rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
(g) The submission by Landlord to Tenant of this Lease shall have
no binding force or effect, shall not constitute an option for the
leasing of the Premises, nor confer any right or impose any obligations
upon either party until execution of this Lease by both parties.
(h) Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise
requires. The captions inserted in this Lease are for convenience only
and in no way define, limit or otherwise describe the scope or intent
of this Lease, or any provision hereof, or in any way affect the
interpretation of this Lease.
(i) Any amount not paid by Tenant within fifteen (15) business
days after its due date in accordance with the terms of this Lease
shall bear interest from such due date until paid in full at the lesser
of the highest rate permitted by applicable law or three percent (3%)
per year. It is expressly the intent of Landlord and Tenant at all
times to comply with applicable law governing the maximum rate or
amount of any interest payable on or in connection with this Lease. If
applicable law is ever judicially interpreted so as to render usurious
any interest called for under this Lease, or contracted for, charged,
taken, reserved, or received with respect to this Lease, then it is
Landlord's and Tenant's express intent that all excess amounts
theretofore collected by Landlord be credited on the applicable
obligation (or, if the obligation has been or would thereby be paid in
full, refunded to Tenant), and the provisions of this Lease immediately
shall be deemed reformed and the amounts thereafter collectible
hereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit
the recovery of the fullest amount otherwise called for hereunder.
(j) Construction and interpretation of this Lease shall be
governed by the laws of the state of New Jersey, excluding any
principles of conflicts of laws.
(k) Time is of the essence as to the performance of Tenant's
obligations under this Lease.
(l) All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of
any conflict between such exhibits or addenda (other than the rules and
regulations) and the terms of this Lease, such exhibits or addenda
shall control. In the event of a conflict between the rules and
regulations attached hereto and the terms of this Lease, the terms of
this Lease shall control.
(m) If either party should prevail in any litigation instituted by
or against the other related to this Lease, the prevailing party, as
determined by the court, shall receive from the non-prevailing party
all costs and reasonable attorneys' fees (payable at standard hourly
rates) incurred in such litigation, including costs on appeal, as
determined by the court.
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35. NO WAIVER OF DISTRAINT. Landlord retains any lien right it might have
in the machinery, fixtures and other property ("EQUIPMENT") of Tenant,
by virtue of Landlord's common law (if any) and statutory right of
distraint because of failure to pay Monthly Basic Rent and Additional
Rent; provided that Landlord shall negotiate a mutually agreeable
subordination agreement with any lender to Tenant, or any lessor of the
Equipment (such lender or lessor referred to as a "SECURED PARTY"),
pursuant to which Landlord shall subordinate its statutory lien to such
Equipment in favor of such Secured Party.
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IN WITNESS WHEREOF, the parties have caused this Lease to be signed by their
duly authorized officers or general manager as of the date and year first above
written.
TENANT:
EVERLAST COATINGS INC.
By: /s/ John R. Willey
------------------
John R. Willey
President
LANDLORD:
SL INDUSTRIES, INC.
By: /s/ David R. Nuzzo
------------------
David R. Nuzzo
Vice President
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EXHIBIT "A"
DESCRIPTION OF PROPERTY
PROPERTY LOCATION: 1416-1424 South 6th Street
Camden, New Jersey
Block 350 Lot 5
OWNERSHIP: SL Industries, Inc.
PROPERTY TYPE: Industrial / Warehouse
PROPERTY SIZE: 100 x 139 or 13,900 sq.ft. +/-
BUILDING SIZE: 9,955 sq.ft. +/-
BUILT: 1950
ZONING: I-2 Industrial (see Map in Addendum)
FLOOD ZONE: B (100 yr. to 500 yr. Flood) (See Map)
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EXHIBIT B
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