FIRST AMENDMENT OF LEASE
------------------------
DATE: January 16th, 1998
LANDLORD: LEONIA ASSOCIATES, L.L.C.
a New Jersey Limited Liability Company
ADDRESS OF LANDLORD: c/o Sterling Management Corp.
72 Essex Street
Lodi, NJ 07644
TENANT: COMPUTER OUTSOURCING SERVICES, INC., a New
York Corporation,
ADDRESS OF TENANT: 2 Christie Heights
Leonia, New Jersey 07605
LEASE DATE: June 2, 1997
BUILDING: 2 Christie Heights
Leonia, NJ 07605
Landlord and Tenant, being bound unto a lease, dated the Lease Date,
for a portion of the Building (the "Lease"), hereby agree to modify and amend
the Lease in the following manner:
1. DEMISED PREMISES OR PREMISES. As of January 1, 1998 (the
"Effective Date"), Paragraph (7) of the Preamble to the Lease shall be deleted
in its entirety and the following is substituted therefor:
"(7) Demised Premises or Premises: Approximately
SIXTY SEVEN THOUSAND (67,000) gross rentable
square feet on the First (1st) and Second (2nd)
Floors (the entire Building) delineated on
Exhibit A annexed hereto, which includes an
allocable share of the Common Facilities as
defined in Paragraph 42(c), which size is
stipulated and agreed to by the parties here-
to."
2. EXHIBIT A. As of the Effective Date, Exhibit A annexed to the
Lease is hereby deleted in its entirety and revised Exhibit A annexed hereto
shall be substituted therefor for all purposes under the Lease.
3. FIXED BASIC RENT. Paragraph (9) of the Preamble to the Lease
is hereby modified to provide that Fixed Basic Rent for the remainder of the
Term shall be payable as follows:
I. Fixed Basic Rent for January 1, 1998 through March
31, 1998 shall mean:
(A) Yearly Rate: SEVEN HUNDRED TWENTY FIVE THOUSAND AND
00/100 ($725,000.00) DOLLARS plus an amount equal to twenty-five
point four (25.4%) percent of the Real Estate Taxes for the
Building.
(B) Monthly Installment: SIXTY THOUSAND FOUR
HUNDRED SIXTEEN AND 66/100 ($60,416.00) DOLLARS plus an
amount equal to twenty-five point four (25.4%) percent of
the Real Estate Taxes for the Building, which shall be
payable monthly on the first day of each month, in advance,
in the amount of $2,750.00. In the event the actual amount
of the Real Estate Taxes for the building for the first
quarter of 1998 is greater or less than that paid by Tenant
pro rata for the Additional Space, the appropriate adjustment
shall be made by and between Landlord and Tenant as soon as
practicable after the final 1998 bill is issued.
II. Fixed Basic Rent for April 1, 1998 through June 30,
1998 shall mean:
(A) Yearly Rate: SEVEN SIXTY SEVEN THOUSAND FIVE
HUNDRED AND 00/00 ($767,500.00) DOLLARS plus an amount
equal to twenty-five point four (25.4%) percent of the
Real Estate Taxes for the Building.
(B) Monthly Installment: SIXTY THREE THOUSAND
NINE HUNDRED FIFTY-EIGHT AND 33/100 ($63,958.33) DOLLARS
plus an amount equal to twenty-five point four (25.4%)
percent of the Real Estate Taxes for the Building, which
shall be payable monthly on the first day of each month,
in advance, in the amount of $2,750.00. In the event the
actual amount of the Real Estate Taxes for the building
for the second quarter of 1998 is greater or less than
that paid by Tenant pro rata for the Additional Space,
the appropriate adjustment shall be made by and between
Landlord and Tenant as soon as practicable after the
final 1998 bill is issued.
III. Fixed Basic Rent for July 1, 1998 through September
30, 1998 shall mean:
(A) Yearly Rate: EIGHT HUNDRED TWENTY SEVEN
THOUSAND AND 00/100 ($827,000.00) DOLLARS plus an amount
equal to twenty-five point four (25.4%) percent of the
Real Estate Taxes for the Building.
(B) Monthly Installment: SIXTY EIGHT THOUSAND NINE
HUNDRED SIXTEEN AND 66/100 ($68,916.66) DOLLARS plus an amount
equal to twenty-five point four (25.4%) percent of the Real Estate
Taxes for the Building, which shall be payable monthly on the first
day of each month, in advance, in the amount of $2,750.00. In the
event the actual amount of the Real Estate Taxes for the building
for the third quarter of 1998 is greater or less than that paid by
Tenant pro rata for the Additional Space, the appropriate adjustment
shall be made by and between Landlord and Tenant as soon as
practicable after the final 1998 bill is issued.
IV. Fixed Basic Rent for Four Years and Three Months,
commencing October 1, 1998 through December 31,
2002, shall mean THREE MILLION EIGHT HUNDRED THREE
THOUSAND SEVEN HUNDRED FIFTY AND 001/00
($3,803,750.00) DOLLARS.
(A) Yearly Rate: EIGHT HUNDRED NINETY FIVE
THOUSAND AND 00/100 ($895,000.OO) DOLLARS.
(B) Monthly Installment: SEVENTY FOUR THOUSAND
FIVE HUNDRED EIGHTY THREE AND 33/100 ($74,583.33) DOLLARS.
V. Fixed Basic Rent for Six Years, commencing January
1, 2003 through December 31, 2008 shall mean SIX
MILLION ONE HUNDRED SEVENTY FOUR THOUSAND AND 00/100
($6,174,000.00) DOLLARS.
(A) Yearly Rate: ONE MILLION TWENTY NINE THOUSAND
AND 00/100 ($1,029,000.00) DOLLARS.
(B) Monthly Installment: EIGHTY FIVE THOUSAND
SEVEN HUNDRED FIFTY 00/100 ($85,750.00) DOLLARS.
4. TENANT'S PERCENTAGE. Commencing January 1, 1998,
Paragraph (10) of the Preamble to the Lease shall be deleted in its entirety
and the following is substituted therefor:
"(10) Tenant's Percentage: One hundred (100%)
percent, which percentage is stipulated
and agreed to by the parties hereto, subject
to adjustment as provided for in Paragraph 42(e)."
5. PARKING SPACES. As of the Effective Date, Paragraph 12 of
the Preamble of the Lease shall be deleted in its entirety and the following
substituted therefor:
"(12) Parking Spaces shall mean all of the parking
spaces reserved for the Building."
6. MONTHLY OPERATING COSTS ESTIMATES. Commencing January 1, 1998,
the amount of estimated monthly payments for Operating Costs paid by Tenant
pursuant to Paragraph 23(B)(b) of the Lease shall be changed from TEN THOUSAND
and 00/100 ($10,000.00) DOLLARS to THIRTEEN THOUSAND SEVEN HUNDRED FIFTY and
00/100 ($13,750.00) DOLLARS.
7. LANDLORD'S WORK - Landlord agrees, that at Landlord's expense,
it will do substantially all of the work in the additional Seventeen Thousand
(17,000) gross rental square feet (the "Additional Space") to be occupied by
Tenant hereunder in accordance with Exhibit B, annexed hereto and made a part
hereof ("Landlord's Work"). Except as set forth in Exhibit B, Landlord shall
have no obligation to perform any other Landlord's Work in the Additional
Space, and Tenant specifically agrees that it will accept the Additional
Space in its current "as is" condition. In the event the cost of Landlord's
Work, inclusive of all hard and soft costs, is less than ONE HUNDRED EIGHTY
FIVE THOUSAND ($185,000.00) DOLLARS, the amount of differential between
Landlord's actual cost and said amount will be paid to Tenant by Landlord in
the form of a rent credit to be applied to the Fixed Basic Rent for October
1998 or sixty (60) days after the substantial completion of Landlord's Work,
whichever is later.
8. RENT CREDIT FOR CHECK METER. In lieu of the check meters to
have been provided by Landlord pursuant to Paragraph 22 of the Lease, prior to
this agreement, the Landlord grants Tenant a rent credit of TEN THOUSAND
($10,000.00) DOLLARS to be applied to the monthly rent installment for Fixed
Basic Rent for the month of October 1998.
9. ACKNOWLEDGMENT OF PRIOR BUILDOUT CONTRIBUTION. Tenant
acknowledges receipt and payment of Landlord's obligation to contribute
EIGHT HUNDRED THOUSAND ($800,000.00) DOLLARS towards Tenant's buildout as
provided in Paragraph 27(b) of the Lease.
10. SCOPE OF CLEANING SERVICES. Anything contained in Paragraphs
20 and 22 to the contrary notwithstanding, the Tenant shall have the right,
upon written notice to the Landlord, to increase or decrease the scope of
cleaning services to be provided by Landlord, in which event the cost of
same to be paid by Tenant shall be adjusted accordingly.
11. BUILDING STANDARD ELECTRIC SERVICE.
I. Paragraph 22(a)(i) of the Lease is hereby deleted in
its entirety and the following substituted therefor:
"(a) Landlord agrees to redistribute Building Standard Office
Electrical Service (as hereinafter defined) to the Premises consistent
with the requirements as set forth in this Lease (not exceeding the
present electrical capacity at the Premises) upon the following terms
and conditions:
(i) Tenant shall pay to Landlord all of the electrical
power consumed in the Demised Premises and Building as determined by
the rate structure then existing for the utility company supplying the
electrical energy to the Demised Premises and the Building, inclusive
of common areas. Said payments shall be due as Additional Rent with
the next installment of Fixed Basic Rent therefor becoming due."
II. Paragraph 22(b) of the Lease is hereby deleted in its
entirety and the following substituted therefor:
"(b) The "Building Standard Electric Service" shall, unless
otherwise provided by agreement in writing between the parties, be defined
as the provision by Landlord of electrical current for usual office
requirements, equipment and heating, ventilating and air-conditioning systems,
twenty-four (24) hours a day, seven (7) days a week. In no event shall
Building Standard Electric Service include electrical current for any
computer room installation, data processing center, or for any requirements
needing greater than a 15-amp line. All installments of electrical fixtures,
appliances and equipment within the Demised Premises shall be subject to
Landlord's prior written approval which approval shall not be unreasonably
withheld or unduly delayed. Nothing herein shall be construed as conferring
on Landlord the right or option to cut off electric service to the Building,
except in instances requiring emergency or necessary repairs, it being
intended that electrical service to the elevators and Demised Premises shall
be available on a twenty-four (24) hours basis.
III. The following provision is hereby added to Paragraph 22 of
the Lease:
(d) At Tenant's sole and exclusive cost and option, to be
exercised upon reasonable written notice to the Landlord and the utility
company furnishing electrical service and energy to the Building (the
"Utility Company"), the Tenant shall arrange to obtain all electric, energy
and utility service directly from the Utility Company, and may utilize the
then existing electric feeders, risers and wiring used for such purpose and
only to the extent of Tenant's then authorized connected load. In this event,
(i) Landlord shall not be obligated to supply or pay any part of any cost
required for Tenant's electric, energy and utility service; (ii) the Tenant
shall provide Landlord with proof of payment to the Utility Company of its
monthly utility bill; (iii) the failure by the Tenant to make payment in full
of its monthly utility bill from the Utility Company within thirty (30) days
of the rendering of such bill shall constitute a default under this Lease.
12. OPTION. Paragraph 56(a) of the Lease is hereby amended so that
"$1,183,350.00" is substituted for "$948,750.00" in the last line thereof.
13. DELETIONS. The following provisions of the Lease are hereby
deleted and deemed null and void and of no further force and effect:
(a) Paragraph 27 (a)
(b) Paragraph 47
(c) The last sentence of Paragraph 36.
(d) Paragraph 57 (b)
(e) Paragraph 59
14. INTERPRETATION. In the event of any inconsistencies between
this Amendment of Lease and the Lease, this Amendment of Lease shall govern
and be binding. All words and terms used in this Amendment of Lease shall
be construed without regard to any presumption or other rule requiring
construction against the party causing this instrument to be drafted, since
the Tenant has been afforded an opportunity to submit revisions to the
text hereof.
15. COMPLETE AGREEMENT. This Agreement, together with instrument
modified hereby, constitute the complete agreement and understanding between
the parties hereto with respect to the matters set forth herein and therein,
and supersede and terminate any and all prior negotiations or understandings
between the parties hereto. No alteration, amendment or modification of any
of the terms and provisions of this Agreement and the instruments modified
hereby shall be valid unless made pursuant to an instrument in writing signed
by each of the parties hereto. The parties do not intend to confer any
benefit hereunder on any person, firm, corporation or other entity, other
than the parties hereto.
16. RATIFICATION OF LEASE. Except as expressly modified and
amended by the Amendment of Lease, all of the terms, provisions and
conditions of the Lease are hereby ratified and confirmed by Landlord and
Tenant.
17. BINDING EFFECT. This Amendment of Lease shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.
18. CORPORATE AGREEMENT. Each party represents and warrants to
the other that this Amendment of Lease has been duly authorized and approved
by its Board of Directors or Members, as the case may be. The undersigned
officer and representative of the corporation and Manager of the Limited
Liability Company executing this Agreement represent and warrant that they
have authority to execute this Amendment of Lease on behalf of their
respective entities.
IN WITNESS WHEREOF, Landlord and Tenant have hereunto set
their hands and seals as of the day and year above first written;
the parties affixing their signatures hereto warrant the one to the
other that they possess the requisite authority to enter into this
transaction and to sign this instrument.
ATTEST: LEONIA ASSOCIATES, L.L.C
By: Jeffco Holding Ltd.
a NJ corporation, Manager
By: /s/ JEFFREY E. COLE
- ------------------------ -----------------------------------
Jeffrey E. Cole, President
COMPUTER OUTSOURCING SERVICES, INC.
a New York Corporation
By: /s/ ROBERT WALLACH
- ------------------------ -----------------------------------
Robert Wallach, President
EXHIBIT A
Page 1 of 2
(D R A W I N G)
EXHIBIT A
Page 2 of 2
(D R A W I N G)
EXHIBIT B
Landlord's Work
Page 1 of 3
Landlord shall, at Landlord's sole cost and expense:
1. Build space as per attached plan.
2. Landlord shall replace the components of the existing VAV boxes
located in the Additional Space with new components similar to
those currently existing in the Building.
3. Carpet and paint space to match existing installation.
4. Replace damaged ceiling tiles.
5. Re-arrange lighting as per mutually agreeable construction
drawings.
6. Add necessary electrical outlets as per a mutually
agreeable construction drawings.
7. Art work in lobby subject to Tenant's approval.
EXHIBIT B
Page 2 of 3
(D R A W I N G)
EXHIBIT B
Page 3 of 3
(D R A W I N G)