EXHIBIT 10.82
LEASE AGREEMENT
THIS LEASE AGREEMENT is made as of April 17, 2006, by and
between GREDEL PROPERTIES, L.L.C., c/o Frank A. Greek & Son, Inc., 33 Cotters
Lane, East Brunswick, New Jersey 08816 (hereinafter called the "LANDLORD") and
PARLUX FRAGRANCES, INC., a Delaware corporation (hereinafter called the
"TENANT").
W I T N E S S E T H:
WHEREAS, the Landlord owns certain lands and premises in the Township
of Woodbridge, County of Middlesex, and State of New Jersey, located on the
parcels described as Lots 1A, 1B, and 2 in Block 61 (the "PREMISES"), and
containing 697,500 square feet of building (the "BUILDING;" and collectively
with the Premises, the "PROJECT"); and
WHEREAS, the Landlord intends to lease to the Tenant, and Tenant
intends to hire and lease from Landlord, that portion of the Building containing
approximately 198,500 square feet, outside dimensions, as shown on SCHEDULE A
annexed hereto and made a part hereof (the "LEASED PREMISES").
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for the rents
reserved, the mutual considerations herein and the parties mutually intending to
be legally bound hereby, the Landlord does demise, lease and let unto the
Tenant; and the Tenant does rent and take from the Landlord the Leased Premises
as described in Article #l hereof and the Landlord and Tenant do hereby mutually
covenant and agree as follows:
LEASE SUMMARY
TENANT: Parlux Fragrances, Inc., a Delaware
corporation
TENANT'S REPRESENTATIVE: Frank A. Buttacavoli, COO and CFO
ADDRESS AND PHONE NO.: 3725 SW 30th Avenue
Ft. Lauderdale, FL 33312
954-316-9008
LEASED PREMISES: That portion of the Building, containing
approximately 198,500 rentable square feet,
as determined by Landlord, as shown on
SCHEDULE A. Landlord and Tenant stipulate
that the number of rentable square feet in
the Leased Premises set forth above shall be
binding upon them.
BUILDING: That building in which the Leased Premises
are located with an address of 1000
Riverside Drive (formerly Industrial
Avenue), Keasbey, New Jersey 08832, located
on land commonly known as Block 61, Lots 1A,
1B, and 2 on the tax maps of the Township of
Woodbridge, Middlesex County, New Jersey,
containing approximately 697,500 rentable
square feet, situated on a portion of that
certain real property legally described in
SCHEDULE B attached hereto. Landlord and
Tenant stipulate that the number of rentable
square feet in the Building set forth above
shall be binding upon them.
PROJECT: The real property legally described in
SCHEDULE B attached hereto together with the
Building and improvements located thereon.
1
TENANT'S PROPORTIONATE
SHARE OF BUILDING: 28.459%
LEASE TERM: Beginning on the Commencement Date and
ending on the last day of the sixtieth
(60th) full calendar month thereafter,
subject to adjustment for renewal as
provided in this Lease or earlier
termination upon default.
COMMENCEMENT DATE: The date on which Landlord achieves
"Substantial Completion" (as defined below)
of the work (as detailed in SCHEDULE C
hereto) in the Leased Premises and an
unconditional certificate of occupancy is
issued by Woodbridge Township or a
conditional temporary certificate of
occupancy is issued by Woodbridge Township
subject to terms and conditions the
existence and satisfaction of which will not
prevent or materially interfere with
Tenant's conduct of its business in the
Leased Premises; provided, however, that if
Landlord is prevented from obtaining a
certificate or temporary certificate of
occupancy as a result of work performed or
being performed by or on behalf of Tenant,
Landlord shall notify Tenant of such fact
and the Commencement Date shall occur upon
delivery by Landlord to Tenant of a
certification as to substantial completion
of the work as detailed in Schedule C issued
by Landlord's engineer. The Commencement
Date is estimated to be August 1, 2006. For
purposes of this Lease the term "SUBSTANTIAL
COMPLETION" shall mean the completion of the
work such as to allow the use and occupancy
of the Leased Premises for its intended
purpose subject only to the completion of
punchlist items the absence and the
completion of which will not materially
interfere with the use of the Leased
Premises or the conduct and operation of
Tenant's business therein.
PARKING: Tenant shall have no fewer than 65 parking
spaces for use by employees and visitors.
Parking spaces are unassigned. Landlord is
not responsible to supervise use of parking
spaces by tenants of the Building.
MONTHLY FIXED BASE RENT:
------------ ------------------------- ------------------- ---------------------
MONTHS ANNUAL RATE PER SQ. FT. ANNUAL FIXED MONTHLY FIXED
BASE RENT BASE RENT
------------ ------------------------- ------------------- ---------------------
1-24 $5.50 $1,091,750.00 $90,979.17
------------ ------------------------- ------------------- ---------------------
25-48 $5.60 $1,111,600.00 $92,633.33
------------ ------------------------- ------------------- ---------------------
49-60 $5.65 $1,121,525.00 $93,460.42
------------ ------------------------- ------------------- ---------------------
INITIAL ESTIMATED ANNUAL
REAL ESTATE TAX AND
OPERATING EXPENSE PAYMENTS*:
------------ ----------------------- --------------------- --------------------
MONTHS ESTIMATED ANNUAL RATE ESTIMATED ANNUAL ESTIMATED MONTHLY
PER SQ. FT. OPERATING EXPENSES OPERATING EXPENSES
------------ ----------------------- --------------------- --------------------
1-60 $1.36 $269,960.00 $22,496.67
------------ ----------------------- --------------------- --------------------
* The above Real Estate Tax and Operating
Expense Payments are estimates only and
subject to adjustment to actual costs and
expenses and according to the provisions
of this Lease. Utilities are to be paid
separately in accordance with Paragraph 6
herein. This estimate does not include the
Management Fee noted below which is
payable as a part of Operating Expenses
despite being listed separately.
INITIAL MONTHLY BASE
RENT AND OPERATING
EXPENSE PAYMENTS: $113,475.84
MANAGEMENT FEE 3% of Fixed Base Rent
ROOF MAINTENANCE FEE: None
SECURITY DEPOSIT: 1 MONTH
BASE RENT & EXPENSES) $116,000.00
REAL ESTATE TAX ESCROW: $33,000.00
INSURANCE ESCROW: $16,000.00
BROKER: Trammell Crow Company and Cushman &
Wakefield of New Jersey, Inc.
2
NOTICES: Copies of notices to Tenant to be sent
concurrently to:
Jerry P. Brodsky, Esq.
Peckar and Abramson, P.C.
One South East Third Avenue
Miami, Florida 33131
ADDENDA: Schedule A - Site Plan
Schedule B - Legal Description
Schedule C - Landlord's Work
Schedule D - Non-Disturbance and
Attornment Agreement
Schedule E - Landlord Subordination and
Consent
Schedule F - Direct Recognition Agreements
TENANT'S NAICS CODE: 424210 [SIC 5122]
1. LEASED PREMISES. The Leased Premises shall consist of approximately
198,500 square feet outside dimensions located in a one-story building as shown
on SCHEDULE A on a portion of the Premises described on SCHEDULE B. The Leased
Premises shall be altered by Landlord in accordance with plans and
specifications as shall be mutually approved in writing by the Landlord and
Tenant, and shall be incorporated by reference herein, made a part hereof and
referred to as SCHEDULE C. Tenant shall have the right to use trailer parking
spaces of the loading dock doors serving the Leased Premises only.
2. TERM OF LEASE. (a) The Landlord leases unto the Tenant and the
Tenant hires the aforementioned Leased Premises for the term of approximately
five (5) years to commence on or about August 1, 2006 and to terminate on the
last day of the calendar month in which the fifth anniversary of the
Commencement Date occurs (subject to the conditions of the Commencement Date
provision in the Lease Summary hereinabove). If the Commencement Date is other
than the first day of the month, Fixed Base Rent and Operating Expenses for the
partial month in which the Commencement date occurs shall be apportion on a per
diem basis based on a month of thirty (30) days and the partial month shall be
added to the first year of the Term.
(b) If the Landlord is unable to give possession of the Leased
Premises on the date of the commencement of the term hereof due to the fact that
the work set forth in SCHEDULE C is not sufficiently completed or for any reason
whatsoever, the Landlord shall not be subject to any liability for the failure
to give possession on said date. Under such conditions, the base rent to be paid
herein shall not commence until the possession of the Leased Premises is given
or made available for occupancy by the Tenant, unless the failure of the
Landlord to give possession is caused by Tenant as a result of work being
performed pursuant to Section 2(c) below, delay in preparation and approval of
plans or otherwise as a result of Tenant's acts or failure to act (in which case
the rent to be paid herein shall commence when Landlord reasonably determines
Landlord would have be able to give possession of the Leased Premises to Tenant
but for such delay caused by Tenant). No such failure to give possession on the
date of commencement shall affect the validity of the Lease or the obligations
of the Tenant hereunder.
(c) Notwithstanding the foregoing, providing that Tenant does not
interfere with the performance of any of Landlord's work, Tenant may be
permitted access to the Leased Premises on or about June 19, 2006 (such date to
be determined in Landlord's reasonable discretion) for the purpose of installing
racks and performing such other work and/or storing such personal property as
Tenant may lawfully perform or store therein, provided, however, that (i) Tenant
releases Landlord for any loss or damage to any personal property in the Leased
Premises, from any cause whatsoever, including, without limitation, fire or
theft, and acknowledges its obligation to insure against such loss or damage,
and (ii) Tenant shall indemnify and defend Landlord against any claim, loss,
expense or liability arising from any injury (including death) to any of
Tenant's employees, or Tenant's contractor's or subcontractor's employees, and
any property damage (including, without limitation, theft of materials, tools or
stored product or inventory), occurring during the performance of any of
Tenant's work at the Leased Premises and shall carry or cause others to carry
liability insurance against any such personal injury or property damage naming
Landlord as an additional insured.
3
(d) Notwithstanding the forgoing, Tenant and Landlord acknowledge that
application has or will be made to the Township of Woodbridge ("TOWNSHIP") for
classification of Tenant's storage as Group S-1 as suggested in that certain
report entitled "New Jersey Uniform Construction Code Analysis, Parlux
Fragrances Distribution Center, Woodbridge, NJ, File: PAR-06-01" dated February
27, 2006, prepared by Alfred J. Longhitano, P.E., LLC. Upon receipt of notice of
the results of such application from the Township the party receiving same shall
promptly provided a copy of the notice to the other. In the event that the
Township does not approve such application and the classification of Tenant's
storage is such that requires the installation of an in-rack sprinkler system,
Tenant may, by written notice to Landlord to be given within five (5) business
days from receipt by Tenant of notice of the results of the application, elect
to terminate this Lease, in which event all money paid by Tenant to Landlord
hereunder shall be promptly refunded, without deduction. Time is of the essence
with regard to any such notice of termination.
3. FIXED BASE RENT. (a)(i) The annual fixed base rent during the term
of this Lease shall be as set forth on the Lease Summary page of this Lease,
payable by the Tenant in equal monthly installments on or before the first day
of each month, in advance, except that the first monthly installment of fixed
base rent shall be paid upon signing of this Lease. In the event that the
Commencement Date is not the first day of a calendar month the apportioned fixed
base rent for the partial month in which the Commencement Date occurs shall be
payable on or before the first day of the first full calendar month of the Term
and payment of full installments of fixed base rent shall commence as of the
second full calendar month of the Term
(b) All rents due herein and other sums due under this Lease shall be
paid in U.S. funds payable on a U.S. bank at the office of the Landlord or at
such other place designated by Landlord from time to time, without any prior
demand and without any deduction or set-off whatsoever promptly on the dates
due.
(c) In those instances where Tenant is required to pay additional rent
herein, Tenant's proportionate share shall be 28.459% (on the basis of (i)
198,500 square feet over 697,500 square feet). If Tenant's actual use of any
service or common utility is more than that of other tenants then the basis for
the computing of said additional rent with regard to such service or utility
shall be adjusted equitably based on such actual use.
(d) Any additional rent required to be paid by Tenant shall be due and
payable no later than ten (10) days of the date of receipt by Tenant of
statement by Landlord.
(e) Tenant hereby acknowledges that late payment to Landlord of rent or
other sums due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
If any rent or other sums due from Tenant is not received by Landlord within ten
(10) days after its due date, then Tenant shall pay to Landlord a late charge
equal to five percent (5%) of such overdue amount, plus costs and reasonable
attorneys' fees, if any, incurred by Landlord to collect amounts due from
Tenant. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the cost that Landlord will incur by reason of Tenant's
late payment. Landlord's acceptance of such late charges shall not constitute a
waiver of Tenant's default with respect to such overdue amount or estop Landlord
from exercising any of the other rights and remedies provided under this Lease
or at law.
(f) In addition to the fixed annual base rent provided in 3(a)(i)
above, Tenant shall pay to Landlord a management fee equal to three (3%) percent
multiplied by the fixed annual base rent representing Landlord's fee for
managing the Project, Building and Leased Premises.
4. USE. Tenant shall use the Leased Premises for distribution,
warehousing, general offices and such other uses directly related to
distribution, warehousing and general offices (and for no other purpose
whatsoever) subject to and in accordance with all rules, regulations, laws,
ordinances, statutes and requirements of all government authorities, including
the fire insurance rating organization and any similar bodies having
jurisdiction over the Leased Premises. Tenant warrants to the Landlord it will
not permit any flammable or hazardous materials to enter, be stored, used or
remain on the Leased Premises except as expressly provided by the terms of this.
4
5. OPERATING EXPENSES AND REPAIRS AND MAINTENANCE.
(a) As provided for herein, in addition to the Base Rent, Tenant shall
pay to Landlord Tenant's proportionate share of all Operating Expenses,
including, without limitation, repairs, maintenance and replacements (if
necessary), landscape maintenance and landscaping, snow removal, utilities not
directly metered to Tenant or other tenants, general exterior debris and garbage
removal at the Project (but excluding Tenant's dumpsters or other trash removal
and/or recycling), broken glass, common area cleaning (if applicable), sprinkler
monitoring, standby sprinkler charges, asphalt driveway and parking lot
maintenance (including, without limitation, dolly pads and curbs), exterior
lighting, repair or replacement of fencing, parking lot re-striping, painting
and power washing of exterior, re-caulking of panel joints, non-structural
maintenance of roof (including roof membrane, smoke domes and skylights), pest
control and extermination (but excluding within the Leased Premises), repair of
sanitary and storm sewers and utility feeds, security (if any, and nothing
herein shall be construed to require Landlord to provide security services of
any kind) and the management fee payable pursuant to Section 3(f) (collectively,
"OPERATING EXPENSES"). Operating Expenses exclude: (i) Tenant's payment of
taxes, insurance, roof maintenance and environmental inspections which shall be
governed as provided for elsewhere in this Lease; and (ii) specific repairs
requested by Tenant to its Leased Premises not contemplated under this Lease.
Notwithstanding the foregoing, Landlord agrees that to the extent that
guarantees or warranties are applicable to the Building or any equipment, same
will be enforced for the benefit of the Project.
(b) Tenant shall pay monthly, in advance and on the same day as the
Base Rent is due, one-twelfth (1/12th) of the estimated amount of its
proportionate share (as defined in the Lease) of the Operating Expenses as
determined by Landlord within its reasonable discretion and as set forth in a
notice delivered to Tenant at least thirty (30) days before the expiration of
the current calendar year (the "ESTIMATED PROPORTIONATE SHARE"). Within ninety
(90) days after the expiration of each calendar year, and within one hundred
twenty (120) days after the expiration or other termination of the Lease,
Landlord shall deliver to Tenant a reasonably detailed statement showing
Tenant's Proportionate Share of the Operating Expenses actually incurred by
Landlord during the preceding year (the "ACTUAL PROPORTIONATE SHARE"), provided
however that the failure to deliver such statement shall not prohibit Landlord
from collecting any deficiency in the estimated payment of such Operating
Expenses for any past period or from collecting such Operating Expenses in
applicable current or future periods. If Tenant's Estimated Proportionate Share
under this Section during the preceding year exceeds Tenant's Actual
Proportionate Share as indicated on said statement, Tenant shall be credited the
amount of such overpayment against Tenant's payment of its Estimated
Proportionate Share of such Operating Expenses next becoming due or, if at the
end of the Term, Landlord shall remit to Tenant such overpayment, by check,
within forty-five (45) days after delivery of such statement. If Tenant's
Estimated Proportionate Share under this Section 5(b) during said preceding year
was less than Tenant's Actual Proportionate Share as indicated on said
statement, Tenant shall pay to Landlord the amount of the deficiency within 45
days after delivery by Landlord to Tenant of said statement. At any time and
upon reasonable notice, Landlord may adjust the amount of the Tenant's Estimated
Proportionate Share to reflect Landlord's revised estimate of such expenses for
the remainder of the current calendar year. Landlord also reserves the right to
bill Tenant for other extraordinary Operating Expenses, not contemplated within
the Estimated Proportionate Share (the "ADDITIONAL OPERATING EXPENSES") as
incurred, and shall provide Tenant with copies of the backup documentation
supporting each such bill, and such Additional Operating Expenses shall be due
within thirty (30) days of the date of Tenant's receipt of such bill from
Landlord.
(c) Tenant shall have the right to examine and audit Landlord's records
supporting the statement of Operating Expenses during normal business hours, and
at Landlord's office where the records regarding the Operating Expenses are
maintained, upon not less than three business days' notice. Tenant shall
commence its examination and, if applicable, its audit within 90 days after
receipt of the statement, shall perform its examination and audit with diligence
and continuity and shall complete its examination and audit and deliver a copy
thereof to Landlord within 30 days after beginning the audit. The cost of any
such examination and audit shall be paid by Tenant, provided that Landlord shall
reimburse Tenant for the reasonable cost of the audit if the audit reveals an
overcharge of 5% or more and the amount of the overcharge is not reduced below
such 5% upon Landlord's dispute thereof. Landlord shall refund to Tenant any
overpayment, or Tenant shall pay to Landlord any underpayment, as applicable,
for the calendar year in question within 30 days after the amount of the
overpayment/underpayment has been established by the audit or as provided in
this subsection. If Tenant fails to exercise its rights of audit within the 180
day period, the amount of Tenant's obligations for Operating Expenses shall be
conclusively established as the amount set forth in the statement delivered by
Landlord to Tenant. If, however, Tenant timely exercises its right to audit and
the results thereof differ from Landlord's statement of Operating Expenses and
Landlord disputes Tenant's audit and gives Tenant notice within 30 days of
Landlord's receipt thereof that it disputes the results of such audit, Landlord
and Tenant will use reasonable efforts to resolve the dispute. If the dispute is
not resolved by Landlord and Tenant within 30 days after Landlord's notice of
dispute, the dispute shall be resolved by a mutually-selected independent
certified public accountant with at least ten years experience in the commercial
real estate market. In the event Landlord fails to give Tenant notice that it
disputes Tenant's audit within such 30 day period, the amount of Tenant's
obligation for Operating Expenses shall be conclusively established as the
amount set forth in Tenant's audit. Any personnel involved in the examination or
audit who are not employees of Tenant shall be required to sign a
confidentiality agreement which precludes such person, and any firm with which
he/she may be associated, from disclosing any information obtained to any third
parties.
5
(d) Tenant shall, at its sole cost and expense, make all repairs and
replacements to the Leased Premises, including the maintenance of same as the
same may be required during the term of this Lease, provided that such damage to
the Leased Premises is not caused by the sole negligence or intentional act of
Landlord, its agents, servants, contractors or employees, or of other tenants of
the Building or such other tenant's agents, servants, contractors, employees or
invitees (collectively, "OTHER TENANT PARTIES"). Tenant shall maintain a service
contract on the HVAC system with a vendor reasonably acceptable to Landlord.
Notwithstanding the foregoing, Landlord shall, at its own cost and expense, make
all repairs and replacements to the structural elements of the Building and the
Leased Premises, and any latent defects therein except for repairs resulting
from the negligence or intentional acts of Tenant or its agents, employees,
contractors or invitees. Structural elements as used herein shall be defined as
load bearing walls, steel, foundation, footings and the roof structure.
Structural elements specifically exclude the roof membrane, roof mounted smoke
domes and skylights, windows, window frames, doors, door frames and glass which
shall be maintained, repaired and replaced (if necessary) by Landlord as an
operating expense; provided that any damage to the foregoing is not caused by
the negligence or intentional act of Landlord, its agents, servants, employees,
contractors or Other Tenant Parties. Landlord represents that the floors of the
Leased Premises consist of an 8" concrete slab capable of bearing loads of 500
pounds per square foot.
(e) The Tenant covenants and agrees that it shall not cause or permit
any waste (other than reasonable wear and tear), damage, disfigurement or injury
to the Leased Premises, or any overloading of the floors of the building
constituting part of the Leased Premises.
(f) The Tenant expressly covenants and agrees at its sole expense to
replace with similar quality glass any broken glass in the windows, doors or
other apertures of the Leased Premises which may become damaged or injured.
(g) (i) The Landlord shall, at Tenant's sole cost and expense,
maintain, repair and keep free and clear of ice and snow, the driveways and
parking areas as well as maintain and repair the common area hallway(s),
bathroom(s) and loading dock area(s), if any. Such amounts shall be treated as
Operating Expenses as provided for in Section 5(a). Tenant shall reimburse
Landlord for its proportionate share of all repairs to the front and rear
asphalt parking areas.
(ii) The Tenant shall at its cost and expense, maintain,
repair and keep free and clear of ice and snow the sidewalks, steps and approach
sidewalks to the Leased Premises; and the Tenant shall further, at its own cost
and expense, keep the exterior of the Leased Premises free and clear of paper
and other debris so as to keep same in a good and orderly manner as reasonably
prescribed by Landlord. Tenant shall be responsible for its own garbage disposal
and dumpsters (if any).
(iii) In the event the Landlord expends any amounts in
fulfilling the Tenant's obligation herein, then the Tenant shall pay as
additional rent its proportionate share of such amounts expended as provided
under the formula in Article 3 hereof.
(h) Intentionally Omitted
6. UTILITIES. The Tenant shall be responsible for, and at its own cost
and expense, shall pay all utility meter charges, deposits, service charges and
use of utilities, including gas, electric, water and sewer. All utilities not
separately metered shall be assessed against Tenant and other tenants sharing
same as provided in the formula in Article 3 (c).
7. TAXES. (a) The Tenant shall pay as additional rent its proportionate
share of the "Estimated Real Estate Taxes Assessed on Project Land and
Improvements" (as such term is defined in Section 7(b) herein), said obligation
to commence and be prorated as of the Commencement Date of this Lease and as of
the date of termination hereunder. In addition to the obligation to pay real
estate taxes as hereinabove set forth, the Tenant shall, during the term of this
Lease, pay, as additional rent, its proportionate share of any levy for the
installation of local improvements and any municipal license fees affecting the
Leased Premises or the building in which the Leased Premises is located as may
be assessed by any governmental agencies, boards or bureaus having jurisdiction
thereof. If any assessment or imposition for capital or public improvements may
be payable by law at the option of the taxpayer in installments, Landlord shall
elect to make payment in installments and such installments payment of which are
due during the Term of this Lease (or any renewal lease) shall be paid by Tenant
with any interest that may be due thereon before any fine, penalty, interest or
cost shall be added thereto, and those payments due after the expiration of this
Lease shall be the obligation of the Landlord.
6
(b) As used in this Section 7, the term "ESTIMATED REAL ESTATE TAXES ASSESSED ON
PROJECT LAND AND IMPROVEMENTS" shall mean an amount equal to the final product
of (i) the "Estimated Assessed Value of Land and Improvements" (as herein
defined) associated with the Project, multiplied by (ii) the so-called county
equalization ratio ("APPLICABLE EQUALIZATION RATIO") in effect for the Township
of Woodbridge ("TOWNSHIP") for the year in question, (iii) multiplied by the
final tax rate (sometimes referred to as "millage") of the Township applicable
to the Keasby district ("APPLICABLE TAX RATE") in effect from time to time. As
used in this Section 7, the term "ESTIMATED ASSESSED VALUE OF LAND AND
IMPROVEMENTS" shall mean $36,967,500.00. Such Estimated Assessed Value of Land
and Improvements shall be fixed for the initial 5-year Term of this Lease.
Notwithstanding the foregoing, for purposes of calculating Tenant's
proportionate share of the Estimated Real Estate Taxes Assessed on Project Land
and Improvements for the portion of the Term that falls within calendar year
2006, Landlord agrees that such amount shall be fixed at $1.00 psf of the
Building ($697,500.00) and that Tenant's proportionate share will be $697,500.00
multiplied by Tenant's Proportionate Share of Building (28.459%) and prorated to
reflect the portion of the tax year falling after the Commencement Date. For the
remainder of the initial Term of this Lease Tenant shall be entitled to a credit
("TENANT'S TAX CREDIT") to be applied in equal monthly installments against
Tenant's proportionate share of the Estimated Real Estate Taxes Assessed on
Project Land and Improvements in an amount equal to the product of: (a) 198,500
sf, times (b) the difference between (i) $1.00 psf and (ii) the product of
$36,967,500.00 multiplied by the 2006 so-called county equalization ratio for
the Township and the 2006 Applicable Tax Rate and product divided by 697,500.
[FOR EXAMPLE: If the Township's 2006 Applicable Equalization Ratio were to be
30.32% and the 2006 Applicable Tax Rate were to be $6.959 per $100 of assessed
value, Tenant's Tax Credit against its proportionate share of Estimated Real
Estate Taxes Assessed on Project Land and Improvements for each tax year within
the initial Term after calendar 2006 would be $0.11828 psf (prorated for any
partial year), calculated as follows: Estimated Assessed Value of Land and
Improvements ($36,967,500.00) times Township's 2006 Applicable Equalization
Ratio (30.32%) equals $11,208,546.00. $11,208,546.00 multiplied by the 2006
Applicable Tax Rate of $6.959 per $100 equals Estimated Real Estate Taxes
Assessed on Project Land and Improvements of $780,002.72. Estimated Real Estate
Taxes Assessed on Project Land and Improvements of $780,002.72 divided by
697,500 sf of Building area equals a tax per square foot of Building area of
$1.11828 per square foot. Per square foot tax of $1.11828 minus agreed upon 2006
tax of $1.00 psf, equals credit of $0.11828 psf. Credit of $0.11828 psf
multiplied by 198,500 sf of Leased Premises area equals Tenant's Tax Credit of
$23,478.58 to be applied monthly in the amount of $1,956.55. Assuming a
Commencement Date of August 1, 2006 and a full 5-year initial Term, Tenant's Tax
Credit would be applied in its full amount of $23,478.58 (to be applied monthly
in the amount of $1,956.55) for each of calendar years 2007, 2008, 2009 and
2010, and in the amount of $13,695.84 (7/12ths of $23,478.58) applied January,
2011 through July, 2011 at $1,956.55 per month.]
Landlord shall notify Tenant not more than thirteen (13) and no less than
twelve (12) months before the end of the initial Term (or applicable renewal
term) of the Landlord's determination of the Estimated Assessed Value of Land
and Improvements to be applicable in the event that Tenant elects to exercise a
renewal option as provided in Section 35 of this Lease. Tenant shall, within
twenty (20) days after receipt of Landlord's notice, notify Landlord in writing
whether Tenant accepts or rejects Landlord's determination of the Estimated
Assessed Value of Land and Improvements.
If Tenant does not timely notify Landlord that Tenant rejects Landlord's
determination of the Estimated Assessed Value of Land and Improvements, then, in
the event of Tenant's election to renew, such Estimated Assessed Value of Land
and Improvements shall be applicable in the calculation of Estimated Real Estate
Taxes Assessed on Project Land and Improvements during the renewal term. If
Tenant timely rejects the Landlord's determination of Estimated Assessed Value
of Land and Improvements, Landlord and Tenant shall use good faith efforts to
agree on the Estimated Assessed Value of Land and Improvements. If Landlord and
Tenant are unable to agree upon a Estimated Assessed Value of Land and
Improvements, then Landlord and Tenant shall promptly select a mutually
agreeable real estate appraiser (who shall be a MAI with not less than ten (10)
years experience in industrial leasing in the Middlesex and Union County area)
who shall by not later than ten (10) months before the end of the initial Term
(or applicable renewal term) determine the Estimated Assessed Value of Land and
Improvements based upon the then applicable assessed valuations of comparable
buildings in the Township and in the event of Tenant's election to renew, such
Estimated Assessed Value of Land and Improvements determined by the appraiser
shall be applicable in the calculation of Estimated Real Estate Taxes Assessed
on Project Land and Improvements during the renewal term.
Notwithstanding the foregoing, Landlord and Tenant agree that (i) there
shall be no Tenant's Tax Credit during any renewal term, and (ii) the Estimated
Assessed Value of Land and Improvements as determined by an appraiser pursuant
to the preceding subparagraph of subsection 7(b) shall not exceed, and shall be
capped at, an amount equal to the assessed valuation of land and improvements as
determined by the tax assessor of the Township of Woodbridge.
(c) While that certain Second Amended Financial Agreement dated
February 28, 2005, executed by and between Landlord and the Township of
Woodbridge (as same may have been or may be amended from time to time,
"FINANCIAL AGREEMENT"), is in full force and effect, Tenant shall have no right
to contest any Project Improvement Taxes or the terms of the Financial
Agreement. Thereafter, in the event Tenant wishes to contest any Real Property
Taxes (or Project Improvement Taxes in the event the Financial Agreement is
terminated), Landlord covenants and agrees that it will lend its name and
execute all papers necessary to aid Tenant in contesting or litigating said
assessment; provided, however, that said litigation or contest shall be at the
sole cost and expense of Tenant, and shall not affect Landlord's ownership of or
title to the Project or cause forfeiture thereof.
(d) The Tenant shall deposit with the Landlord at the signing of this
Lease the amount of $33,000.00, to be used by Landlord to pay that portion of
real estate taxes payable under this Lease by Tenant. Thereafter Tenant shall
pay to Landlord with each monthly rent payment an amount equal to one-twelfth
(l/l2th) of Tenant's proportionate share of the Estimated Real Estate Taxes
Assessed on Project Land and Improvements, less the monthly portion of Tenant's
Tax Credit, if applicable.
7
8. INSURANCE. (a) Landlord shall maintain special form property
insurance (or equivalent) covering the full replacement value of the Building in
which the Leased Premises is located (excluding foundations), less a
commercially reasonable deductible if Landlord so chooses. Landlord may, but is
not obligated to, maintain such other insurance and additional coverages as it
may deem necessary, including, but not limited to, commercial general liability
insurance, flood insurance, and rent loss insurance, and such other insurance as
may be required by any mortgage lender holding a mortgage lien on the Project.
Landlord's insurance may be included in a blanket policy (in which case the cost
of such insurance allocable to the Project or Building will be determined by
Landlord based upon the insurer's cost calculations). Tenant shall also
reimburse Landlord for any increased premiums imposed by the insurer as a result
of the nature of Tenant's use and/or occupancy of the Leased Premises or
additional insurance which Landlord must purchase as a result of any change in
the terms and conditions of Landlord's existing insurance policy(ies) (i.e., to
replace coverage presently existing which may be excluded by the insurer in the
future), required by any institutional lender holding a mortgage on the Project
or customarily carried by the owners of similar properties in the
Middlesex/Union County area.
(b) Effective as of the earlier of: (1) the date Tenant enters or
occupies the Leased Premises; or (2) the Commencement Date, and continuing
during the Lease Term, Tenant, at its expense, shall obtain and maintain in full
force the following insurance coverage: (i) special form property insurance (or
equivalent) covering the full replacement value of all property and improvements
installed or placed in the Leased Premises by Tenant or for Tenant's benefit;
(ii) worker's compensation insurance with no less than the minimum limits
required by law; (iii) employer's liability insurance with such limits as
required by law; and (iv) commercial general liability insurance, with a minimum
limit of $1,000,000 per occurrence and a minimum umbrella limit of $2,000,000,
for a total minimum combined general liability and umbrella limit of $3,000,000
(together with such additional umbrella coverage as Landlord may reasonably
require) for property damage, personal injuries, or deaths of persons occurring
in or about the Leased Premises. Landlord may from time to time require
reasonable increases in the limits of insurance required by the terms of this
Lease. The commercial general liability policies shall name Landlord and
Landlord's agents, including the property manager (currently Frank A. Greek &
Son, Inc.), as additional insureds, insure on an occurrence and not a
claims-made basis, be issued by insurance companies which are reasonably
acceptable to Landlord, not be cancelable unless thirty (30) days prior written
notice shall have been given to Landlord, contain a hostile fire endorsement or
amended pollution endorsement, and a contractual liability endorsement. Evidence
of such insurance (on an ACORD 27 form), or at Landlord's option, copies of the
policies evidencing coverage shall be delivered to Landlord by Tenant at least
ten (10) days prior to the Commencement Date and at least fifteen (15) days
prior to each renewal of said insurance. If Tenant fails to comply with the
foregoing insurance requirements or to deliver to Landlord copies of such
policies and evidence of the coverage required herein, in either case after five
(5) days from the date of Tenant's receipt of written notice from Landlord, then
Landlord, in addition to any remedy available pursuant to this Lease or
otherwise, may, but shall not be obligated to, obtain such insurance and Tenant
shall pay to Landlord on demand the premium costs thereof, plus an
administrative fee of fifteen percent (15%) of the cost. The Tenant's coverage
may be included in a blanket policy (in which case the cost of such insurance
allocable to the Leased Premises will be expressly specified and all limits or
coverage and deductibles shall be calculated and made applicable with regard to
the Leased Premises only). The 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 the coverage(s)
actually carried by Tenant.
(c) The special form property insurance obtained by Landlord and Tenant
shall include the right of the insured to waive subrogation and all rights based
upon an assignment from its insured, against Landlord or Tenant, their officers,
directors, managers, in connection with any loss or damage thereby insured
against. The failure of a party to insure its property shall not void this
waiver. Notwithstanding anything to the contrary contained herein, Tenant hereby
releases and waives any claims against Landlord, and its officers, directors,
employees, managers, agents, invitees and contractors for any loss or damage
insured against or required to be insured against hereunder (whether by
self-insurance or otherwise), regardless of whether the negligence or fault of
Landlord caused such loss. Landlord hereby releases and waives any claims
against Tenant, and its officers, directors, employees, managers, agents,
invitees and contractors for any loss or damage insured against or required to
be insured against hereunder to the extent insurance proceeds are received
therefor, regardless of whether the negligence or fault of Tenant caused such
loss; however, Landlord's release and waiver shall not apply to any deductible
amounts of $100,000.00 or less maintained by Landlord under its insurance
policy.
(d) The Tenant shall place with the Landlord an amount in escrow
sufficient to cover Tenant's proportionate share of one (l) year's premium for
insurance purchases by the Landlord. Thereafter, commencing as of the
Commencement Date, Tenant shall pay to Landlord each month as additional rent
Tenant's proportionate share of 1/12th of estimated annual premiums for
Landlord's insurance.
8
9. FIXTURES (a) The Tenant is given the right and privilege of
installing and removing (without damage to real property) his personal property,
furniture, equipment and fixtures in the Leased Premises during the term of the
lease, it being understood and agreed, however, that in the event of: (i)
default by the Tenant under the terms and conditions of this Lease; or (ii) upon
the expiration of this Lease; or (iii) if the Tenant moves out or is
dispossessed and fails to remove any such property, equipment and fixtures or
other property within thirty (30) days after such default or removal pursuant to
the applicable terms and conditions of this Lease; then and in any such event,
the said property, equipment and fixtures or other property shall be deemed, at
the option of the Landlord, to be abandoned, (and become Landlord's property) or
in lieu thereof, at the Landlord's option, it may remove such property and
charge the reasonable cost and expense of removal and storage to the Tenant.
(b) Anything to the contrary contained herein notwithstanding it is
expressly understood and agreed that the Tenant may without injury to real
property install, connect and operate equipment as may be deemed necessary by
the Tenant to conduct its business subject to applicable rules and regulations
of governmental agencies, boards and bureaus having jurisdiction thereof;
provided, in any event, that subject to the terms and conditions of this article
and article 9(a), the machinery and fixtures belonging to the Tenant shall, at
all times, be considered and intended to be personal property of the Tenant, and
not part of the realty, and subject to removal, by the Tenant, provided at the
time of such removal that the Tenant is not in default pursuant to the terms and
conditions of this Lease, and that the Tenant, at its own cost and expense, pays
for any damage to the Leased Premises caused by such installation and removal.
(c) Upon request by Tenant from time to time Landlord will execute and
deliver to Tenant a subordination of in favor of a lender or lessor of any lien
rights Landlord may have against Tenant's personal property or leased personal
property at the Leased Premises, such subordination to be substantially in the
form referenced as "Landlord's Subordination and Consent" on the Summary Page
under the heading "Addenda," subject to such modifications as may be agreed to
between Landlord and the applicable lender or lessor. Tenant shall pay to
Landlord, within 30 days of Landlord's request, and as additional rent, the fees
and disbursements of Landlord's counsel incurred in connection with the
preparation and negotiation of such subordination.
10. ASSIGNMENT AND SUBLETTING. (a) Tenant will not assign this Lease in
whole or part, nor sublet all or any part of the Leased Premises, without the
prior written approval of the Landlord in each instance, which approval shall
not be unreasonably withheld, conditioned or delayed. 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.
(b) If at any time during the term or any renewal term, Tenant shall
have received a bona fide offer from a prospective subtenant of the Leased
Premises with respect to the proposed occupancy as subtenant of all or a portion
of the Leased Premises, Tenant shall furnish a copy of such offer to Landlord.
In addition to the right to exercise consent with respect to the proposed
subtenancy, Landlord shall have the right, by written notice given to Tenant
within twenty (20) days of Landlord's receipt of the copy of such offer, to
agree to accept the proposed subtenant as a direct tenant of Landlord. In the
event that (i) Landlord shall have given timely notice as aforesaid to Tenant,
(ii) Landlord and the prospective subtenant shall have entered into a written
agreement for direct tenancy by such subtenant, and (iii) such subtenant shall
have entered into occupancy of the Leased Premises and commenced direct payment
of rent to Landlord, then automatically upon the occurrence of all three such
events, Landlord and Tenant hereunder shall be and become released from any
further obligation under this Lease with respect to the portion of the Leased
Premises recaptured and the Lease between Landlord and Tenant hereunder shall be
deemed terminated and of no further force and effect (rental to be adjusted as
of the date of termination) as to such portion of the Leased Premises. It is
understood and agreed that neither party hereto shall be released from its
obligations to the other party as to the recaptured portion of the Leased
Premises unless and until Landlord shall have entered into an agreement in
writing as aforesaid with the proposed subtenant and the term of the tenancy
with such subtenant shall have commenced. Unless and until the said events shall
have occurred by virtue of which Landlord and Tenant shall have been released
from their obligations under this Lease with respect to the recaptured portion
of the Leased Premises this Lease shall remain in full force and effect and
shall continue to be binding upon Landlord and Tenant as to the entire Leased
Premises.
(c) Notwithstanding anything contained in this Section 10 to the
contrary, Tenant shall have the right on reasonable prior notice to Landlord but
without consent of Landlord to assign this Lease or sublet all or a portion of
the Premises to a person or entity which is an "Affiliate" (as such term is
defined below) of Tenant or which results from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets or stock of
Tenant as a going concern in the business that is being conducted on the
Premises, provided such entity, in the case of an assignment, assumes all the
obligations of Tenant under the Lease. Tenant shall promptly after any such
assignment or subletting provide notice of such to Landlord. For purposes
hereof, "AFFILIATE" shall mean any person, entity, firm or corporation which
9
shall be controlled by, under the control of, or under common control with
Tenant, and "control" shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, entity, firm or corporation, whether through the ownership of voting
securities, by contract or otherwise. In the event Tenant is a publicly traded
corporation, the sale of stock shall not be deemed to constitute an assignment
or transfer of this Lease. Irrespective of any such assignment, Tenant shall
remain liable for the full and faithful performance of each and every covenant
to be performed by Tenant hereunder.
11. FIRE OR OTHER CASUALTY LOSS. (a) In case of damage by fire or other
casualty to the building in which the Leased Premises is located, if the damage
is so extensive as to require substantial reconstruction of such building, this
Lease shall cease at the Landlord's option and the rent shall be apportioned as
of the time of damage. Substantial reconstruction shall mean damage so extensive
that the cost of restoration shall be 50% of the entire cost of the demolition
of the damaged building and the erection of a new building of the same size and
design shall exceed 50% of the replacement cost of the building immediately
prior to such damage.
(b) In all other cases of damages by fire or other casualty to the
Leased Premises or the building of which it is a part, the Landlord shall repair
(using proceeds of insurance claim) the damage with reasonable dispatch, and if
the damage has rendered the Leased Premises untenantable, in whole or in part,
there shall be an apportionment of the rent until the damage has been repaired.
In determining what constitutes reasonable dispatch, consideration shall be
given to delays caused by strikes, governmental approvals, adjustment of
insurance claims and other causes beyond the Landlord's control.
(c) If the restoration is not completed within nine (9) months after
the occurrence of the fire or other casualty, Tenant shall have the right to
terminate this Lease by forthwith giving written notice thereof to Landlord.
(d) Notwithstanding anything contained herein to the contrary, if the
Leased Premises are substantially destroyed or damaged during the last
twenty-four (24) months of the term of this Lease, Landlord or Tenant may cancel
and terminate this Lease as of the date of occurrence of such damage by giving
written notice to the other party of its election to do so within thirty (30)
days after the date of occurrence of such damage. Tenant may avoid such
termination election by Landlord by exercising a right of renewal, if
applicable, within fifteen (15) days of Tenant's receipt of Landlord's notice of
termination.
12. COMPLIANCE WITH LAWS, RULES AND REGULATIONS; NUISANCE.
(a) (i) Tenant shall, at Tenant's sole cost and expense, without notice
or demand from Landlord, faithfully observe and comply with all laws, rules and
requirements of all county, municipal, state, federal and other applicable
governmental authorities, now in force, or which may hereafter be in force,
pertaining to Tenant's occupancy and use of the Leased Premises and/or Land.
Landlord shall make any improvements or modifications to the Building or Land
which are required to comply with all laws, rules and requirements of all
county, municipal, state, federal and other applicable governmental authorities,
now in force, or which may hereafter be in force, pertaining to the Building or
Land which are not specific to Tenant's occupancy and use of the Leased Premises
and/or Land. Notwithstanding the foregoing, any cost incurred by Landlord in
performance of its obligations under this subparagraph 12(a) shall be amortized
by Landlord on a straight line basis with imputed interest of 10% per annum over
the lesser of the useful life of the improvement or modification or ten (10)
years, and Tenant shall reimburse Landlord as additional rent for the portion of
such amortized cost as is applicable to any period of time within the term or
any renewal term of this Lease.
(ii) Tenant shall, at Tenant's sole cost and expense, without
notice or demand from Landlord, conduct its operations in a manner so as not to
create a nuisance or otherwise unreasonably disturb the operations of other
tenants of the Building, or the employees or invitees of such other tenants,
including, without limitation, by creating or permitting the production or
accumulation of odors or fumes outside of the Leased Premises in concentrations
which are offensive, disruptive or disagreeable, or threatening to health,
safety or reasonable personal comfort.
(b) Tenant's NAICS Code and Standard Industrial Classification Number
are as set forth on the summary page of this Lease. Tenant will immediately
notify Landlord of any changes in either number during the term of this Lease.
Tenant agrees to comply with all the requirements of the Industrial Site
Recovery Act ("ISRA") N.J.S.A. l3:1K-6 et seq. and the Spill Compensation and
Control Act ("SPILL ACT") N.J.S.A. 58:l0-23 et seq., and all regulations
promulgated in connection therewith regarding any substances or materials placed
or used upon the Leased Premises by Tenant, its agents, employees or
contractors. All references to ISRA and/or the Spill Act in this Lease shall be
deemed to include any predecessor or successor statute(s) to same.
10
(c) That in case the Tenant shall fail or neglect to comply with the
aforesaid statutes, ordinances, rules, orders, regulations and requirements or
any of them, or in case the Tenant shall neglect to maintain the Leased Premises
or fail to make any necessary repairs called for in the Lease, then the Landlord
or the Landlord's agents may after twenty (20) days' written notice, (except, in
the case of an emergency, action may be taken immediately) enter Leased Premises
and make such repairs, effect such maintenance and comply with any and all of
the said statutes, ordinances, rules, orders, regulations or requirements, at
the cost and expense (including experts and reasonable attorney's fees) of the
Tenant and in case of the Tenant's failure to pay therefor, the said cost and
expense shall be added to the next month's rent and be due and payable as such,
or the Landlord may deduct the same from the balance of any monies remaining
with Landlord. The failure by the Landlord to take any action hereunder, or the
delay by Landlord in taking any action, shall not place any liability or
obligation on the Landlord. This provision is in addition to the right of the
Landlord to terminate this Lease by reason of any default on the part of the
Tenant.
(d) To the best of Landlord's knowledge, information and belief, the
Project complies with all applicable laws, rules and regulations, including
environmental laws, as of the date of this Lease and except for violations
resulting from work performed by or on behalf of Tenant or any other tenant of
the Project, will so comply as of the Commencement Date
13. INSPECTION BY LANDLORD. The Tenant agrees that the said Landlord's
agents, and other representatives, shall have the right to enter into and upon
Leased Premises, or any part thereof, at all reasonable hours for the purpose of
inspecting the same upon reasonable advance notice, except in the event of
emergency, for effecting such maintenance, making such repairs or alterations
therein as may be necessary for the safety and preservation thereof. Landlord
shall use commercially reasonable efforts to avoid interference with Tenant's
business operations during any such entry. Nothing herein shall be construed to
require Landlord to use overtime labor or perform work in other than normal
hours of the construction industry.
14. RIGHT OF RE-ENTRY. If the Leased Premises, or any part thereof, shall
become vacant due to the Tenant's removal or failure to pay rent and other
charges payable hereunder during the said term, or should the Tenant be evicted
by summary proceedings or otherwise, the Landlord or Landlord's representatives
may re-enter the same, either by force or otherwise, without being liable to
prosecution therefor; and relet the Leased Premises as the Agent of the Tenant
and receive rent thereof; applying the same, first to the payment of such
expenses as the Landlord may incur in reentering, and then to the payment of the
rent due by these presents. The Tenant, however, shall continue to remain liable
for any deficiency.
15. DEFAULT. (a) It is expressly understood and agreed that subject to the
terms and conditions of the within Lease, in case the Leased Premises shall be
deserted or vacated due to the Tenant's removal or failure to pay rent
punctually, or if default be made in the payment of the rent or other monetary
obligations hereunder to be paid for by the Tenant, or any part thereof as
herein specified, and such default shall continue for a period of ten (l0) days
after written notice from the Landlord to the Tenant, and if such default shall
have not been remedied or cured within said ten (l0) day period; or
(b) If the Tenant defaults in the prompt and full performance of any
of the provisions of this Lease (except those set forth in Section l5(a)
hereof), or if the Tenant shall fail to comply with any of the statutes,
ordinances, rules, orders, regulations and requirements of the federal, state,
county and municipal government, or if the Tenant shall file a petition in
bankruptcy or arrangement, or be adjudicated a bankrupt or make an assignment
for the benefit of creditors or take advantage of any insolvency act, or any
involuntary petition or similar pleading is filed in any court under any section
of any state or federal bankruptcy act seeking to declare Tenant bankrupt or
seeking a plan of reorganization for Tenant and such petition or pleading is not
removed within thirty (30) days after its filing;
(c) Then and in any such event of default under (a) and (b) above
Landlord may, with or without any demand whatsoever or further notice, pursue
any one or more of the following remedies: (i) Landlord shall have the right, at
its election, to cancel and terminate this Lease and dispossess Tenant; or, (ii)
Landlord shall have the right without terminating or canceling this Lease to
declare all amounts and rents due under this Lease for the remainder of the
existing term (or any applicable extension or renewal thereof) to be immediately
due and payable, and thereupon all rents and other charges due hereunder to the
end of the initial term or any renewal term, if applicable, shall be
accelerated; (iii) Landlord may elect to enter and repossess the Leased Premises
and relet the Leased Premises for Tenant's account, holding Tenant liable in
damages for all expenses incurred in any such reletting (including without
limitation advertising expenses, brokerage commissions, attorney's fees, and
repairs, replacements, alterations and improvements) and for any difference
between the amount of rent received from such reletting and that due and payable
under the terms of this Lease; or (iv) Landlord may enter upon the Leased
11
Premises and do whatever Tenant is obligated to do under the terms of this Lease
(and Tenant agrees to reimburse Landlord on demand for any expenses which
Landlord may incur in effecting compliance with Tenant's obligations under this
Lease and Tenant further agrees that Landlord shall not be liable for any
damages resulting to the Tenant from such action). All such remedies of Landlord
shall be cumulative, and in addition, Landlord may pursue any other remedies
that may be permitted by law or in equity. Forbearance by Landlord to enforce
one or more of the remedies herein provided upon an event of default shall not
be deemed or construed to constitute a waiver of such default.
Landlord shall credit Tenant (or refund to Tenant if Tenant shall have
already made payment to Landlord) as and when received by Landlord with the
amount of the net rents actually collected by Landlord from such reletting,
after first deducting from the gross rents (A) all expenses incurred or paid by
Landlord in collecting such rents, and (B) any theretofore unrecovered costs
associated with the termination of this Lease or Landlord's reentry into the
Premises, including any theretofore unrecovered expenses of reletting and other
damages payable hereunder. If the Premises or any portion thereof be relet by
Landlord for the unexpired portion of the Term before presentation of proof of
such damages to any court, commission or tribunal, the amount of rent reserved
upon such reletting shall, prima facie, constitute the fair and reasonable
rental value for the Premises, or part thereof, so relet for the term of the
reletting. Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises, or if the Premises or any part are relet, for its
failure to collect the rent under such reletting, and no such refusal or failure
to relet or failure to collect rent shall release or affect Tenant's liability
for damages or otherwise under this Lease.
(d) It is expressly understood and agreed, however, that the
Landlord's right to terminate this Lease, pursuant to the terms and conditions
of the foregoing subsection (b) as to failure to comply with said statutes,
etc., of the federal, state, county and municipal government, shall be subject
to the Tenant's right of curing, or beginning to cure, any condition or event
upon which the Landlord relies for terminating this Lease, within thirty (30)
days after the written notice provided in subsection (b) above. If the Tenant
shall (if the same does not cause any forfeiture of title to Landlord), in good
faith, contest any of the rules and regulations or decision of any applicable
federal, state, county or municipal government as aforementioned, the Landlord's
right to terminate this Lease shall be suspended during the period of such
contest, or action to cure, so long as the Tenant prosecutes its objections or
otherwise moves promptly; and provided further, that the Tenant hereby covenants
and agrees, at its own cost and expense, to provide a Bond or Surety
satisfactory to Landlord and to indemnify and defend the Landlord against any
prosecution, fine or judgment, civil or criminal, as a result of any violation
by the Tenant of any federal, state, county or municipal regulation as
aforementioned which the Tenant shall contest.
(e) Notwithstanding anything contained in this Lease to the contrary,
(i) Tenant shall not be in default of its obligations under this Lease if Tenant
vacates the Leased Premises prior to the termination of the term of the Lease,
provided that there is no uncured default on the part of the Tenant under any
terms, conditions and covenants of this Lease, and Tenant continues to pay to
Landlord fixed annual base rent and additional rent pursuant to Section 3 of
this Lease, and (ii) it is expressly understood and agreed, however, that the
Landlord's right to terminate this Lease pursuant to the terms and conditions of
subsection (i) of the foregoing subparagraph (c) shall be subject to the
provision that if the cause for giving such notice involves the making of
repairs or other matters reasonably requiring a period of time longer than
thirty (30) days, then the 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 completion or compliance within a reasonable
time thereafter.
16. NOTICES. All notices, demands and requests required or permitted to be
given to Landlord or to Tenant shall be given by certified or registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier
which obtains a signed delivery receipt, shipping prepaid. Notices shall be
addressed to Landlord at c/o Frank A. Greek & Son, Inc., 33 Cotters Lane, East
Brunswick, New Jersey 088l6, and to Tenant at the Leased Premises and the
address set forth in the Lease Summary, and/or such other place as Landlord or
Tenant shall designate in writing. Notices may be served by an attorney on
behalf of Landlord or Tenant. Except where otherwise expressly provided to the
contrary, all notices, demands and requests shall be deemed given upon receipt
as evidenced by the signed return/delivery receipt therefor.
17. NONWAIVER BY LANDLORD. Failure of Landlord to insist upon the strict
performance of any provisions or to exercise any option or enforce any rules and
regulations shall not be construed as a waiver for the future of any such
provision, rule or option. The receipt by Landlord of rent with knowledge of the
breach of any provision of this Lease shall not be deemed a waiver of such
breach. No provision of this Lease shall be deemed to have been waived unless
such waiver be in writing signed by Landlord. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly rent shall be deemed to be other
than on account of the earliest rent then unpaid nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as rent
12
be deemed an accord and satisfaction and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease.
18. LIABILITY OF TENANT FOR DEFICIENCY. In the event that the relation of
the Landlord and Tenant may cease or terminate by reason of the re-entry of the
Landlord under the terms and conditions contained in this Lease or by the
ejectment of the Tenant by summary proceedings or otherwise, or after the
abandonment of the premises by the Tenant, it is hereby agreed that the Tenant
shall remain liable to pay in monthly payments the rent which accrued subsequent
to the re-entry by the Landlord, and the Tenant expressly agrees to pay as
damages for the breach of the covenants herein contained the difference between
the rent reserved and the rent collected and received (after deducting costs and
expenses), if any, by the Landlord, during the remainder of the unexpired term,
and such difference or deficiency between the rent reserved herein and the rent
collected, if any, shall become due and payable in monthly payments during the
remainder of the unexpired term, as the amounts of such difference or deficiency
shall from time to time be ascertained.
19. RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS.
(a) Tenant may not make alterations, additions or improvements (for
purposes of this Section 19, "IMPROVEMENTS") to the Leased Premises, the
Building or the Project which require any governmental approval or permit,
including, without limitation, site plan approval or a building, plumbing or
electrical permit, without the written consent of Landlord. Landlord's consent
shall not be unreasonably withheld, conditioned or delayed for non-structural
Improvements which do not, in Landlord's reasonable opinion, adversely affect
the value of the Project or the Building, or the ability of Landlord to relet
the Leased Premises, and which cost, in the aggregate for all such Improvements
made in any period of 12 consecutive months, less than $50,000.00. Landlord
shall endeavor to issue consent or disapproval within thirty (30) days of
receipt of written request for same from Tenant. If Landlord does not timely
respond to Tenant's request, Tenant may serve a second notice which shall advise
Landlord, IN BOLD FACE TYPE, that failure to issue consent or disapproval within
five (5) business days shall be deemed to be approval, and Landlord's failure to
respond within such five (5) business day period shall be deemed to be a consent
to the Improvements. If Landlord disapproves the Improvements, Landlord shall
state its reasons for such disapproval. Such Improvements shall be in conformity
with applicable governmental and insurance company requirements and at the end
of the term of this Lease shall, at the sole option of Landlord (if requested by
Tenant, to be exercised at the time Landlord's consent is given or otherwise to
be exercised at any time prior to the end of the term of this Lease), either be
removed by Tenant or remain as property of Landlord. In the event Landlord
requires that Improvements be removed, Tenant (and in the event that such
Improvements have been damaged by fire or other casualty, or by condemnation or
taking by eminent domain. to the extent removal is not covered by insurance
proceeds of Landlord's coverage or expressly included as an element in the
condemnation award) shall place the Leased Premises, the Building or the Project
in substantially the same condition as prior to such Improvements (reasonable
wear and tear, damage by fire or other insured casualty, or by condemnation or
taking by eminent domain, and repairs which are not the responsibility of
Tenant, excepted) and, if at any time Tenant does not have or maintain a
tangible net worth of at least Fifty Million Dollars ($50,000,000.00), Landlord
may condition its approval on, or thereafter impose the requirement of, Tenant
posting financial security to assure removal and restoration. Cosmetic or
decorative Improvements not requiring a permit are permitted on notice to
Landlord but without consent. Neither consent nor removal are required for the
Improvements constituting Landlord's Work under this Lease.
(b) Nothing herein contained shall be construed as a consent on the
part of Landlord to subject the estate of Landlord to liability under the
Construction Lien Law of the State of New Jersey, it being expressly understood
that Landlord's estate shall not be subject to such liability. Tenant shall have
no power or right to do any act or make any contract which may create or be the
format for any lien, mortgage or other encumbrance upon the estate of Landlord.
Upon request by Tenant, Landlord shall negotiate with any lessor or lender of
Tenant, and sign in favor of such party, a subordination of Landlord's lien for
unpaid rent, such subordination to be substantially in the form attached hereto
and made a part hereof as SCHEDULE E, subject to such modification as shall be
agreed to by Landlord and such lessor or lender in reasonable and good faith
negotiation.
(c) Landlord, at no out-of-pocket cost to Landlord, shall cooperate
with Tenant as reasonably required in connection with obtaining any approvals
which may be required for any permitted Improvements, including, without
limitation, signing such applications or affidavits as may be reasonably
required. Nothing herein shall be construed to impose any financial obligation
on Tenant for the costs of permits or approvals required for Landlord's work as
described on Schedule C.
13
20. NON-LIABILITY OF LANDLORD. It is expressly understood and agreed by and
between the parties to this agreement that the Landlord shall not be liable for
any damage or injury to person or property caused by or resulting from steam,
electricity, gas, water, rain, ice or snow, or any leak or flow from or into any
part of said building, or from any damage or injury resulting or arising from
any other cause or happening whatsoever, nor shall Landlord be liable for any
damage caused by other tenants, if any, or person in, upon or about Leased
Premises. It is expressly understood and agreed, in any event, that the Tenant
assumes all risk of damage to its property occurring in or about the Leased
Premises.
21. HOLDOVER. If the Tenant remains in the premises beyond the expiration
date of this Lease, as it may have been extended or renewed, such holding over
in itself shall not constitute a renewal or extension of this Lease, but in such
event a tenancy from "month to month" shall arise at two times the then monthly
rent.
22. QUIET ENJOYMENT. Upon payment by the Tenant of the rents herein
provided, and upon the observance and performance of all the covenants, terms
and conditions on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the Leased Premises for the term hereby
demised without hindrance or interruption by Landlord or any other person or
persons lawfully or equitably claiming by, through or under the Landlord,
subject, nevertheless, to the terms and conditions of this Lease.
23. RESERVATION OF EASEMENT & RIGHT OF ENTRY. The Landlord reserves the
right to grant itself easements on the Project other than the Leased Premises
and to enter on the Project during normal business hours and after reasonable
advance notice to Tenant in order to install, at its own cost and expense,
driveways, storm drains, sewers and/or utility lines in connection therewith as
may be required by the Landlord. The Landlord covenants to use its best efforts
so that the foregoing work and easements shall not interfere with the normal
operation of Tenant's business. In the event that work performed by Landlord
under the right of entry reserved herein prevents ingress to and egress from the
Leased Premises or Project by trucks and passenger vehicles, or precludes
Tenant's use of some or all of the Leased Premises, in either case for a period
of more than three (3) consecutive days during which Tenant's business is
normally in operation, then, and in such event, Tenant shall be entitled to an
abatement of rent for the duration of the time during which Tenant was so
precluded from using the Leased Premises, pro rated, as applicable and
equitable, to reflect the portion of the Leased Premises so affected. There
shall be no abatement of rent in the event that the work performed by landlord
is performed at Tenant's request or is required as the result of damage arising
from the act or omission of Tenant, or any assignee or subtenant of Tenant, or
any agent, employee, licensee, contractor or invitee of any of them.
24. ENVIRONMENTAL RESPONSIBILITY.
(a) As used herein, the following terms shall have the following
meanings:
(i) "HAZARDOUS MATERIAL" includes any pollutant, dangerous
substance, toxic substances, any hazardous chemical, hazardous substance,
hazardous pollutant, hazardous waste or any similar term as defined in or
pursuant to the Comprehensive Environmental Response Compensation and Liability
Act of 1980, 42 U.S.C. 9601 et seq. ("CERCLA"); the ISRA; the Spill Act; the
Solid Waste Management Act, N.J.S.A. 13:1E-1 et seq. ("SWMA"); the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ("RCRA"); the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-21 et seq.
("USTA"); the Clean Air Act, 42 U.S.C. Section 7401 et seq. ("CAA"); the Air
Pollution Control Act, N.J.S.A. 26:2C-1 et seq. ("APCA"); the New Jersey Water
Pollution Control Act, N.J.S.A. 58:10A-1 et seq. ("WPCA"); and any rules or
regulations promulgated thereunder or in any other applicable federal, state or
local law, rule or regulation dealing with environmental protection. 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 hereinafter
defined) but shall thereafter be deemed to be a Hazardous Material.
(ii) "RELEASE" means spilling, leaking, disposing, pumping,
pouring, discharging, emitting, emptying, ejecting, depositing, injecting,
leaching, escaping, or dumping however defined, and whether intentional or
unintentional, of any Hazardous Material.
(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 ("DEP"), 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 Material into the waters or onto
14
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) "ENVIRONMENTAL LAWS" means any and all present or
future laws, statutes, ordinances, regulations and executive orders, federal and
state and local in any way related to the protection of human health or the
environment, including, but not limited to: (i) CERCLA; (ii) RCRA; (iii) ISRA;
(iv) Spill Act; (v) USTA; (vi) WPCA; (vii) APCA; (viii) SWMA; (ix) CAA; and (x)
USTA. 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"
with respect to all Hazardous Material brought on the Leased Premises or the
Project by Tenant, its agents, employees, contractors or invitees, and the
wastes, by-products, or residues generated, resulting, or produced therefrom.
(b) Except for Hazardous Material: (i) contained in products used by
Tenant in de minimis quantities for ordinary cleaning and office purposes; or
(ii) contained in any packaged materials being handled, stored or transported in
the ordinary course of Tenant's business as described in that certain report
entitled "New Jersey Uniform Construction Code Analysis, Parlux Fragrances
Distribution Center, Woodbridge, NJ, File: PAR-06-01" dated February 27, 2006,
prepared by Alfred J. Longhitano, P.E., LLC (but without opening and with no
mixing, processing or other use on the Leased Premises or the Project), Tenant
shall not permit or cause any party to bring any Hazardous Material upon the
Leased Premises or the Project, or transport, store, use, generate, manufacture,
dispose, or release any Hazardous Material on or from the Leased Premises or the
Project without Landlord's prior written consent. Tenant, at its sole cost and
expense, shall operate its business in the Leased Premises and the Project in
strict compliance with all Environmental Laws and all requirements of this
Lease. Tenant shall complete and certify to disclosure statements as reasonably
requested by Landlord from time to time (not more frequently than once a year
unless there is reason to believe there has been a change requiring a new
disclosure) relating to Tenant's transportation, storage, use, generation,
manufacture, or release of Hazardous Material on the Leased Premises or the
Project, and Tenant and Landlord shall promptly deliver to the other a copy of
any Notice relating to the Leased Premises or the Project.
(c) Tenant's NAICS Code are as set forth in the Lease Summary. Tenant
will promptly notify Landlord of any changes in this number and/or code during
the term of this Lease. Tenant, at its own cost and expense, agrees to comply
with all applicable present and future Environmental Laws, rules and regulations
of all federal, state, county and municipal governments and of all other
governmental authorities having or claiming jurisdiction over the Leased
Premises, the Project or appurtenances thereto, or any part thereof, which are
applicable to Tenant's operations at the Leased Premises, the Project 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 Lease.
(d) Tenant, at its sole cost and expense, shall remediate all
Hazardous Material stored, disposed of or otherwise released by Tenant, its
assignees, subtenants, agents, employees, contractors or invitees onto or from
the Leased Premises and/or the Project, in a manner and to a level ("REMEDIATION
STANDARD") which would comply with the minimum requirements of all Environmental
Laws for property restricted to non-residential use, and does not otherwise
limit any future uses of the Leased Premises or require the recording of any
deed restriction or notice regarding the Project. Tenant shall not be
responsible to remediate any Hazardous Material present on the Premises on or
prior to the Commencement Date as disclosed in the "RAW" (as such term is
defined in Section 24(o) below) and in the event of a dispute as to the presence
of any such Hazardous Material on or prior to the Commencement Date Landlord
shall have the burden of proof that same was not present. Landlord shall
cooperate with Tenant as reasonably required, including by signing any consent
required to effectuate this approach. Tenant shall perform such work at any time
during the period of this Lease upon written request by Landlord or, in the
absence of a specific request by Landlord, before Tenant's right to possession
of the Leased Premises terminates or expires. If Tenant fails to perform such
work within the time period reasonably specified by Landlord or before Tenant's
right to possession terminates or expires (whichever is earlier), Landlord may,
after giving Tenant fifteen (15) days notice and after Tenant's continued
failure to perform, 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 out-of-pocket costs incurred by Landlord in
performing such work within fifteen (15) days after Landlord's request therefor.
Notwithstanding the foregoing, Landlord shall not have the right to perform any
work on behalf of Tenant if Tenant has commenced a cure within the fifteen (15)
day period and is diligently pursuing such cure. Such work performed by Landlord
is on behalf of Tenant and Tenant remains the owner, generator, operator,
transporter, and/or arranger of the Hazardous Material 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 Material that have been disposed of or otherwise released
onto or from the Premises without the written approval of Landlord, which
15
approval shall not be unreasonably withheld, conditioned or delayed so long as
the Remediation Standard would not be diminished or adversely affected thereby.
(e) If Tenant's operations at the Leased Premises and/or the Project
now or hereafter constitute an "Industrial Establishment" as that term is
defined in ISRA, then prior to: (i) closing operations or transferring ownership
or operations (as defined under ISRA) of Tenant at the Leased Premises; (ii) the
expiration or sooner termination of this Lease; (iii) any assignment of this
Lease or any subletting of any portion of the Leased Premises; or (iv) any other
event caused by Tenant occurs which may trigger ISRA, Tenant shall, at its own
cost and expense, comply with all requirements of ISRA pertaining thereto and
Landlord shall cooperate with Tenant as reasonably required in connection
therewith and if Landlord shall recover under any insurance policy for costs for
which Tenant is responsible under this Lease, then Landlord shall promptly
release the recovery to Tenant. Prior to any event caused by Landlord which may
trigger ISRA, Landlord shall, at its own cost and expense, comply with all
requirements of ISRA pertaining thereto and Tenant shall cooperate with Landlord
as reasonably required in connection therewith. Notwithstanding the foregoing,
should the DEP determine that a clean-up plan be prepared and that clean-up be
undertaken because of any spills or discharges of Hazardous Material or wastes
at the Leased Premises or the Project by Tenant, its assignees, subtenants,
agents, employees, contractors or invitees, which occur during the term of this
Lease, Tenant shall, at Tenant's own expense, prepare and submit the required
plans and financial assurances, and carry out the approved plans. In such event,
without limitation of the foregoing, Tenant's obligations shall include: (1) the
proper filing, with the DEP, of an initial notice under N.J.S.A. 13:1K-9(a); and
(2) the performance of all applicable remediation and other requirements of
ISRA, including, without limitation, all requirements of N.J.S.A. 13:1K-9(b)
through and including (l). Tenant's obligation to pay rent shall continue until
such time as Tenant obtains and delivers to Landlord a negative declaration or
No Further Action and Covenant Not to Sue as defined by ISRA with respect to
Hazardous Material for which Tenant is responsible hereunder. Nothing herein
shall be construed to limit Landlord's obligations to perform an ISRA Cleanup as
a result of any Release for which Landlord is responsible under this Lease.
(f) The parties acknowledge and agree that pursuant to the provisions
of ISRA, and subject to the provisions of Section 24(d), after the commencement
date of this Lease, Tenant shall be, and is hereby, designated the party
responsible to comply with the requirements of ISRA. In addition, any failure of
Tenant to provide any information and submission as required under ISRA shall
constitute a default under this Lease. Any assignee or subtenant of Tenant shall
be deemed to have, and by entering into such assignment or sublease, and/or by
entering into possession of the Leased Premises, does hereby acknowledge that
they shall be the party responsible, jointly and severally with Tenant, under
the provisions of this Lease.
(g) In the event that Tenant is not obligated to comply with the
requirements of ISRA, then prior to the expiration or sooner termination of this
Lease, or any subletting of any portion of the Leased Premises, Tenant shall, at
Tenant's expense, and at Landlord's option:
(i) obtain from the DEP a "non-applicability letter" if then
available from the DEP confirming that the proposed termination, assignment
or subletting shall not be subject to the requirements of ISRA. Any
representation or certification made by Tenant in connection with the
non-applicability letter request shall constitute a representation and
warranty by Tenant in favor of Landlord and any misrepresentation or breach
of warranty contained in Tenant's request shall constitute a default under
this Lease; or
(ii) undertake Environmental Site Assessment and, if
applicable, Site Investigation, as those terms are defined in ISRA, and if
there is indication that a Release of a Hazardous Material has occurred at,
on, or from the Leased Premises during the term of this Lease, an
appropriate report shall be filed with the applicable governmental agencies
and Tenant shall remediate the spill or discharge in accordance with ISRA
and other applicable Environmental Laws, subject to the Remediation
Standard set forth in Section 24(d); and
(iii) in each case, submit the results of the foregoing
activity to Landlord. All reasonable costs associated with Tenant's
compliance with these requirements, including, without limitation,
Landlord's reasonable out-of-pocket costs in reviewing the sampling plan,
test results and developing a plan for and monitoring the cleanup and site
detoxification, shall be paid by Tenant within ten (10) days after demand
therefor from Landlord, together with reasonable supporting documentation.
(h) In the event of Tenant's failure to comply in full with the
foregoing provisions, Landlord may, after the giving of fifteen (15) days notice
and Tenant's failure to cure, 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 within ten (10) days after demand therefor from Landlord and with
interest until payment. Such costs and expenses include, but are not limited to,
state agency fees, engineering fees, cleanup costs, filing fees and suretyship
16
expenses. Notwithstanding the foregoing, Landlord shall not have the right to
perform any work on behalf of Tenant if Tenant has commenced a cure within the
fifteen (15) day cure period and is diligently pursuing such cure.
(i) Landlord shall deliver to Tenant all documents which pertain to
environmental compliance or the recovery or attempted recovery from an insurance
carrier, or both, and to the extent applicable, shall submit such documents to
Tenant prior to submission to any governmental authority, for Tenant's review
and comment. Each party shall promptly provide the other with copies of all
correspondence, reports, notices, orders, findings, declarations and other
materials pertinent to compliance with the provisions of this Section 24 and the
DEP's requirements under ISRA, as they are issued or received.
(j) Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all losses (including, without limitation, diminution in
value of the Premises or the Project and loss of rental income from the
Project), claims, demands, actions, suits, damages (including, without
limitation, punitive damages), expenses (including, without limitation,
remediation, removal, repair, corrective action, or cleanup expenses) and costs
(including, without limitation, reasonable attorneys' fees, consultant fees or
expert fees and removal or management of any asbestos brought into the Leased
Premises in breach of the requirements of this Section 24 during the term of
this Lease, regardless of whether such removal or management is required by law)
which are brought or recoverable against, or suffered or incurred by Landlord as
a result of any release of Hazardous Material at the Leased Premises during the
term of this Lease, or any breach of the requirements under this Section 24 by
Tenant, its agents, employees, contractors, subtenants, assignees or invitees,
regardless of whether Tenant had knowledge of such noncompliance.
Notwithstanding the foregoing, neither party shall be liable to the other for
consequential damages except as may be expressly provided in this Section 24.
(k) Landlord may, at Tenant's sole cost and expense, have an
environmental consultant appointed to conduct an environmental survey and
inspection annually (or more often, if reasonably required by Landlord) so that
any environmental violations may be discovered and corrected in the quickest
time possible. Tenant shall have the right to designate an alternate consultant
to complete the annual (or more often, if reasonably required by Landlord)
environmental survey; provided, however, that Landlord must in writing approve
said consultant, which approval shall not be unreasonably withheld, conditioned
or delayed. Access to the Leased 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. Each
party shall promptly notify the other of any communication or report that such
party makes to any governmental authority regarding any possible violation of
Environmental Laws or Release or threat of Release of any Hazardous Material
onto or from the Leased Premises or the Project, and each party shall, within
five (5) days of receipt thereof, provide the other 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 Material onto or from the
Leased Premises or the Project. Landlord agrees to provide Tenant with a copy of
the environmental survey and inspection report promptly after Landlord's receipt
of same and agrees that unless such survey and inspection indicates an
environmental violation, or unless Landlord has a reasonable basis to require
more than one such survey and inspection in any year, the cost of such survey
and inspection shall not exceed $3,500.00 per year.
(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 DEP or any other federal, state or local
entity dealing with the generation, treatment, storage or disposal of
regulated/hazardous or solid waste and comply with any concomitant notification
requirements pursuant to RCRA, the Spill Act, the SWMA and any rules or
regulations promulgated thereunder or in any other applicable federal, state or
local law, rule or regulation dealing with hazardous waste, solid waste and/or
environmental protection.
(m) In the event there shall be filed a lien against the Leased
Premises or the Project arising out of a claim(s) by the DEP pursuant to the
provisions of the Spill Act or by the USEPA pursuant to the provisions of
CERCLA, which arises from a Release of Hazardous Material for which Tenant is
responsible hereunder, Tenant shall promptly either: (i) pay the claim and
remove the lien; or (ii) furnish a bond, cash receipt or other security
reasonably satisfactory to Landlord in form and amount.
(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 Section 24 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 and form reasonably satisfactory to Landlord. The requirements of this
Section 24 are in addition to and not in lieu of any other provision in this
Lease. Notwithstanding the foregoing, Tenant shall not be required to provide
17
financial assurance if Tenant has commenced a cure within the thirty (30) day
period and is diligently pursuing such cure.
(o) Tenant hereby acknowledges that the Project was subject to an
ISRA clean up pursuant to that certain "Preliminary Assessment Report" dated
September, 2000, filed for Cardell, Inc. and that certain "Remedial
Investigation Report/Remedial Action Workplan for 1000 Industrial Avenue,
Keasby, NJ," dated September 20, 2000, prepared by Environmental Liability
Management, Inc. (collectively, "RAW") approved by the DEP by letter dated July
3, 2003, copies of which have been provided to Tenant. Landlord shall, at no
cost or expense to Tenant, complete the work required by the RAW and obtain a no
further action letter from the DEP in connection therewith. Landlord shall use
diligent efforts and perform all work necessary to obtain the no further action
letter and upon issuance shall provide a copy to Tenant. Landlord represents
that, to the best of its knowledge, as of the date hereof there are no
violations of ISRA, the Spill Act or any other Environmental Laws, or any other
environmental pollution with regard to the Project or the Leased Premises and
that it has no knowledge of any contamination of the Premises other than as
described in the RAW. Landlord shall indemnify, defend and hold Tenant harmless
from and against any and all losses, claims, demands, actions, suits, damages
(including, without limitation, punitive damages), expenses (including, without
limitation, remediation, removal, repair, corrective action, or cleanup
expenses) and costs (including, without limitation, reasonable attorneys' fees,
consultant fees or expert fees which are brought or recoverable against, or
suffered or incurred by Tenant as a result of the presence or any release of
Hazardous Material at the Premises on or prior to the Commencement Date.
Notwithstanding the foregoing, neither party shall be liable to the other for
consequential damages except as may be expressly provided in this Section 24.
(p) The obligations of the parties under this Article shall survive
the expiration or termination of this Lease.
25. SUBORDINATION OF LEASE. This Lease and the term and estate hereby
granted are and shall be subject and subordinate to the lien of all mortgages
which may now or at any time hereafter affect all or any portion of the land or
building of the Landlord's interest therein, and to all renewals, modifications,
consolidations, replacements and extensions thereof. The foregoing provisions
for the subordination of this Lease shall be self-operative and no further
instrument shall be required to effect any such subordination; but Tenant shall,
however, upon request by Landlord, at any time or times execute and deliver any
and all instruments that may be necessary or proper to effect such subordination
or to confirm or evidence the same. If Tenant shall fail or otherwise refuse to
execute a subordination in accordance with this Section, then, and upon such
event, Tenant shall be deemed to have appointed Landlord and Landlord shall
thereupon be regarded as the attorney-in-fact of Tenant, duly authorized to
execute and deliver the required subordination for and on behalf of Tenant, but
the exercise of such power by Landlord shall not be deemed a waiver of Tenant's
default. Landlord shall use its best efforts to obtain from any future mortgagee
an agreement providing that so long as Tenant is not in default under the terms
of this Lease, the leasehold estate of Tenant created hereby and Tenant's
peaceful and quiet possession of the Leased Premises shall be undisturbed by any
foreclosure so long as Tenant continues to comply with the terms of this Lease.
Such agreement may also provide that Tenant shall attorn to such mortgagee if
such holder succeeds to the interest of Landlord in the Project, the Leased
Premises or any part or parts thereof by foreclosure proceedings or as a result
of any conveyance in lieu of foreclosure proceedings. Concurrently with the
execution of this Lease, Landlord, Tenant and Principal Life Insurance Company
("LENDER") shall enter into the Non-Disturbance and Attornment Agreement
attached hereto as Schedule D.
26. STATEMENTS BY LANDLORD AND TENANT.(a) If the Landlord desires to
procure a mortgage loan (or loans), or desires to recast an existing mortgage on
the premises, then and at the request of Landlord, Tenant will furnish to
Landlord whatever data, including financial statements, which may be reasonably
required by any mortgagee in connection with the Leased Premises. Tenant further
agrees that at any time after the commencement of the term and from time to time
upon not less than ten (l0) days' prior written request by Landlord, to
immediately execute, acknowledge and deliver to Landlord a statement in the form
reasonably requested by the mortgagee in writing certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications or
exceptions, that the same is in full force and effect as modified or excepted,
and stating the modifications and exceptions, if any), and the date to which the
rental and other charges have been paid in advance, if any, it being intended
that any such statement delivered pursuant to this Section may be relied upon by
any prospective purchaser of the fee, or any mortgagee or assignee of any
mortgage upon the fee, of the Leased Premises.
(b) If any lender with which Landlord has negotiated or may negotiate
financing for the property on which the Leased Premises is located shall require
a change or changes in this Lease as a condition or one of the conditions of its
approval of this Lease for such financing (other than a change in any material
right or obligation of Tenant, including, without limitation, the size of the
Leased Premises, the permitted uses of the Leased Premises, the term, renewal
18
rights, rent or additional rent) and if within thirty (30) days after notice
from Landlord, Tenant fails or refuses to execute with Landlord the amendments
to this Lease accomplishing the change or changes which are stated by Landlord
to be required in connection with approval of this Lease for purposes of such
financing, Landlord shall have the right, on not less than sixty (60) days
written notice to Tenant, to cancel this Lease. In the event of cancellation by
Landlord hereunder, this Lease shall be and become null and void as of the
effective date of Landlord's cancellation set forth in Landlord's notice to
Tenant.
(c) Upon the Tenant's accepting the Leased Premises and entering
possession, pursuant to the terms and conditions hereof, the Tenant covenants
and agrees that it will furnish to the Landlord a statement that it accepts the
Leased Premises, subject to the terms and conditions of the Lease as herein
contained.
27. SURRENDER OF LEASED PREMISES. Upon the expiration or other termination
of the term of this Lease, Tenant shall quit and surrender to the Landlord the
Leased Premises in compliance with all governmental regulations as mentioned
herein, broom clean and in good order, ordinary wear and tear excepted. The
Tenant shall remove all property of the Tenant as directed by Landlord, and
failing to do so, Landlord may cause all of said property to be removed at the
cost and expense of the Tenant, and Tenant agrees to promptly pay all costs and
expenses incurred thereby. If the Landlord suffers any costs or expenses,
including loss of rent, due to the fact that Tenant does not surrender on the
date stated herein, Landlord may recover such costs and expenses as Landlord
might incur if Landlord has to assume any of the Tenant's obligations herein.
The Tenant's obligations under this section shall survive the expiration or
termination of this Lease.
28. CONDEMNATION. (a) If more than 50% of the Project shall be acquired or
condemned by eminent domain for any public or quasi-public use or purpose, then
the term of this Lease shall, at the option of either Tenant or Landlord, cease
and terminate as of the date of title vesting in such proceedings and all
rentals shall be paid up to that date. Tenant shall be entitled to claim against
Landlord or the condemning authority for the value of any unexpired term of this
Lease. Tenant also shall be entitled to seek a separate award against the
condemning authority for its fixtures, equipment, property and moving expenses
but same shall have no affect upon Landlord's claim.
(b) If the term of this Lease is not terminated as a result of such
condemnation, Landlord shall restore the Project and , if applicable, the Leased
Premises, at Landlord's expense, in accordance with all applicable codes. If
Tenant is unable to utilize the Leased Premises during restoration , all rent
shall abate during the period of such deprivation, and if Tenant is deprived of
part of the Leased Premises, but is operating in a portion of the Leased
Premises, rent shall in such event abate proportionately.
29. MEMORANDUM OF LEASE. Tenant shall not record this Lease, but if either
party should desire to record a short form Memorandum of Lease setting forth
only the parties, the Leased Premises and the term, such Memorandum of Lease
shall be executed, acknowledged and delivered by both parties upon notice from
either party.
30. SECURITY. (a) The Landlord acknowledges that the Tenant has deposited
with Landlord the amount shown in the Lease Summary upon signing Lease as
security for the full and faithful performance by Tenant of all the terms and
conditions of this Lease upon the Tenant's part to be performed; which said sum
shall be returned to the Tenant at the end of this Lease, provided the Tenant
has fully and faithfully carried out all of the terms, covenants and conditions
on its part to be performed, and is not in default hereunder. Tenant hereby
agrees not to look to the mortgagee, as mortgagee, mortgagee in possession, or
successor in title to the property, for accountability for any security deposit
required by the Landlord hereunder, unless said sums have actually been received
by said mortgagee as security for the Tenant's performance of this Lease. It is
expressly understood and agreed that the Landlord shall have the right to
commingle the security funds with its general funds and said security shall not
be required to be segregated. It is expressly understood and agreed that the
Tenant shall not and the Tenant represents that it will not mortgage, pledge,
hypothecate, assign, convey or otherwise encumber the security deposited with
the Landlord hereunder.
(b) Notwithstanding the provisions of subparagraph (a) above and/or
paragraphs 7 and 8 above, Landlord agrees that in lieu of the cash security
deposit provided for in (a) above (and which may include the cash deposits
provided for in paragraphs 7(c) and 8(d) above), Tenant may deposit with
Landlord a negotiable standby letter of credit ("LETTER OF CREDIT"), issued by a
bank reasonably acceptable to Landlord and having a principal office, where the
Letter of Credit may be drawn, in New Jersey or New York City, NY. The Landlord
shall be the beneficiary of the Letter of Credit which shall be for a term of
not less than one (1) year commencing on or before the commencement date of the
Lease. If available without additional cost, the Letter of Credit shall be
"evergreen", i.e., renewable automatically for successive periods absent
Landlord's receipt of not less than ninety (90) days written notice from the
19
bank of intent not to renew. The Letter of Credit shall provide that Landlord
may draw on the Letter of Credit upon presentation of a sight draft to the
bank's office New Jersey or New York City, NY, accompanied by a certificate
signed by an individual purporting to be an authorized signatory for Landlord
stating that (i) Tenant is in default under the terms of the Lease after the
giving of any required notice and the expiration of any cure period, if
applicable, or (ii) if presented within the thirty (30) day period prior to
expiration of the Letter of Credit that Tenant has failed to deliver a
replacement Letter of Credit in the amount and on the terms and conditions set
forth above, and in either case without further proof or conditions. In the
event that the Landlord draws on the Letter of Credit, in whole or in part, the
funds withdrawn shall be held by Landlord as the security deposit or escrows
provided for in this Lease. If Landlord draws on the funds to pay sums owed by
Tenant such payment shall not be deemed to cure Tenant's monetary default unless
Tenant shall replenish the security deposit to its full amount within ten (10)
days of receipt of demand from Landlord. If Landlord draws on the Letter of
Credit Tenant's right to deposit a letter of credit in lieu of cash security
shall be terminated.
31. EXCUSABLE DELAYS. The Landlord shall not be liable to the Tenant and
shall not be in default under this Lease by reason of delays in performance
under any covenant or condition of this Lease if said delay is caused by present
or future government regulations, restrictions, strikes and lockouts, shortages,
unavailability of materials or labor, weather conditions, or for any other
reason, whether similar or not, which are beyond the control of the Landlord.
32. BROKERS COMMISSION. Landlord and Tenant hereby warrant and represent
each to the other that it has dealt with no broker in connection with this
transaction other than as noted in the Lease Summary. Landlord agrees to pay
said brokers as provided for in a separate agreement. In the event that it shall
be established that either party did deal with any broker other than as noted in
the Lease Summary, then such party shall be responsible for the payment of any
commission to the other broker and will indemnify and hold the other harmless
from any claims, costs, expenses or damage incurred as a result of a breach of
the aforesaid representation.
33. FEES AND EXPENSES. (a) In case suit shall be brought for recovery of
possession of the Leased Premises, for the recovery of rent or any other amount
due under the provisions of this Lease, or because of the breach of any other
covenant herein contained on the part of Tenant to be kept or performed, and a
breach shall be established, Tenant shall pay to Landlord all expenses incurred
therefore, including a reasonable attorney's fee.
(b) In the event Tenant shall fail to pay any rent or other sums due,
and such failure shall continue for thirty (30) days, then, in addition to
Landlord's rights herein, interest shall accrue thereon at the rate of l8% per
annum from the thirty-first day after due date to the date of payment.
34. NO REPRESENTATIONS BY LANDLORD. Neither Landlord nor Landlord's agents
have made any representations or promises with respect to the physical condition
of the building, the land upon which it is erected or the Leased Premises, the
rents, leases, expenses of operation or any other matter or thing affecting or
related to the Leased Premises except as herein expressly set forth and no
rights, easements or licenses are acquired by Tenant by implication or otherwise
except as expressly set forth in the provisions of this Lease. Tenant has
inspected the building and the Leased Premises and is thoroughly acquainted with
their condition, and agrees to take the same "as is" and acknowledges that the
taking of possession of the Leased Premises by Tenant shall be conclusive
evidence that the Leased Premises and the building of which the same form a part
were in good and satisfactory condition at the time such possession was so
taken, except as to latent defects and Landlord's warranty of Landlord's Work as
set forth in Schedule C. All understandings and agreements heretofore made
between the parties hereto are merged in this contract, which alone fully and
completely expresses the agreement between Landlord and Tenant and any executory
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of it in whole or in part, unless such executory agreement
is in writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
35. OPTION TO RENEW.(a) The Tenant is hereby given an option to renew this
Lease for two (2) additional terms of five (5) years each upon all the terms and
conditions herein, except as expressly set forth in subsection (b) hereof. The
exercise of each such renewal option shall be subject to the following
conditions: (1) written notice of the exercise of option shall sent in the
manner provided in this Lease for the giving of notices, to Landlord at least
nine (9) months prior to the expiration of the original term for the first such
renewal, and at least nine (9) months prior to the expiration the first renewal
term for the second such renewal, as applicable; (2) that Tenant shall not be in
20
default of any monetary obligation or in default of any material non-monetary
obligation under the terms of this Lease (beyond any applicable periods of
notice and cure) at the time that the renewal is exercised or at the date of the
commencement of the applicable renewal term; and (3) Landlord's right to
relocate as set forth in subsection (c) hereof.
(b) The annual fixed base rent payable for each month during
such renewal terms shall be 95% of the prevailing fair market rental value (the
"PREVAILING RENTAL RATE"), at the commencement of each such renewal term, for
renewals of space in a building of equivalent quality, size, utility and
location, with the length of the renewal to be taken into account, based on a
willing, comparable and non-equity tenant, a willing landlord, an arm's length
negotiation giving appropriate consideration to rental rates per rentable square
foot, escalation clauses (including, without limitation, operating expenses and
real estate taxes), abatement provisions reflecting, if any, the term of the
lease, the size and location of Leased Premises, and tenant improvement
allowances, if any. In the event that Tenant shall have a tangible net worth of
less than Fifty Million Dollars ($50,000,000.00) then the credit standing of
Tenant shall also be taken into account. Landlord shall notify Tenant not more
than thirteen (13) and no less than twelve (12) months before the commencement
of the applicable renewal term of the Landlord's determination of the Prevailing
Rental Rate. Tenant shall, within twenty (20) days after receipt of Landlord's
notice, notify Landlord in writing whether Tenant accepts or rejects Landlord's
determination of the Prevailing Rental Rate. If Tenant does not timely notify
Landlord that Tenant rejects Landlord's determination of the Prevailing Rental
Rate, then, in the event that Tenant elects to renew, on or before the
commencement date of the renewal term, Landlord and Tenant shall execute an
amendment to this Lease extending the Term on the same terms provided in this
Lease, except as follows:
(i) Fixed Base Rent shall be adjusted to the Prevailing
Rental Rate;
(ii) The number of renewal options shall be reduced by one
(1) renewal option unless expressly agreed to the
contrary by Landlord in writing;
(iii) Landlord may elect to adjust the amount of the
security deposit to reflect the adjusted fixed base
rent; and
(v) Landlord shall lease to Tenant the Leased Premises in
its then-current condition, and Landlord shall not
provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or
other tenant inducements.
If Tenant timely rejects the Landlord's determination of Prevailing Rental
Rate, Landlord and Tenant shall use good faith efforts to agree on the
Prevailing Rental Rate. If Landlord and Tenant are unable to agree upon a
Prevailing Rental Rate within ten (10) days after Landlord's receipt of Tenant's
rejection of Landlord's determination, then Landlord and Tenant shall, within
thirty five (35) days of Tenant's receipt of Landlord's determination, each
simultaneously submit to the other in writing its good faith estimate of the
Prevailing Rental Rate. If the higher of said estimates is not more than one
hundred five percent (105%) of the lower of such estimates, the Prevailing
Rental Rate in question shall be deemed to be the average of the submitted
rates. If otherwise, within fifteen (15) days thereafter, Tenant may elect
either to terminate this Lease effective as of the then scheduled expiration of
the Lease term (assuming no renewal) or elect to establish the Prevailing Rental
Rate by appraisal.
If Tenant elects to established the Prevailing Rental Rate by appraisal,
the appraisal shall be conducted by a mutually agreeable real estate appraiser
who shall be a MAI with not less than ten (10) years experience in industrial
leasing in the Middlesex and Union County area. If the parties are unable to
agree on an appraiser within seven (7) days of the election to establish the
Prevailing Rental Rate by appraisal, then each party shall appoint its own
appraiser with the above qualifications and each appraiser shall determine
Prevailing Rental Rate and submit a written report of its opinion which shall be
exchanged by the parties within thirty (30) days. If the higher of said
appraisals is not more than one hundred ten percent (110%) of the lower of such
appraisals, the Prevailing Rental Rate in question shall be deemed to be the
average of the two appraisals. If otherwise, the two appraisers so appointed
shall appoint a third appraiser of similar qualifications who shall determine
Prevailing Rental Rate within thirty (30) days of his/her appointment. If the
third appraisal is between 100% and 110% of the higher of the two prior
appraisals, or if the third appraisal is between 100% and 110% of the lower of
the two prior appraisals, then Prevailing Rental Rate shall be the average of
such third appraisal and the closer of such prior appraisals. If otherwise the
Prevailing Rental Rate shall be as determined by the third appraiser. Each party
shall pay the costs of its appointed appraiser and 50% of the cost of the third
appraiser.
(c) Notwithstanding anything herein to the contrary, in the
event that Tenant gives timely written notice of the exercise of option as
provided in subsection (a) hereof, Landlord shall have the right and power to
relocate Tenant within the Building in such space which is comparable in size to
the Leased Premises, such right and power to be exercised by written notice from
Landlord to Tenant of Landlord's determination to exercise such right and power
and the location of the space within the Building to which Tenant is to be
relocated. Such relocation notice shall be given no less than five (5) months
21
before the commencement of the applicable renewal term. Except as provided in
this subsection (c), Landlord shall not be liable or responsible for any claims,
damages, or liabilities in connection with or occasioned by such relocation.
Landlord's exercise of such right and power shall include, but not be limited
to, a relocation to consolidate the rentable area occupied in order to provide
Landlord's services more efficiently or a relocation to provide contiguous
vacant space for a prospective or existing tenant. If Landlord shall exercise
said option, the substituted premises shall thereafter be deemed for the
purposes hereof the "Leased Premises" hereunder, and a new amended Schedule A
showing the new Leased Premises will be substituted for the original Schedule A
attached hereto. Landlord agrees to pay Tenant's reasonable expenses to move its
furniture, fixtures, and equipment to such substituted Leased Premises.
(d) Tenant's rights to renew under this Section 35 shall
terminate if (1) this Lease or Tenant's right to possession of the Premises is
terminated, (2) Tenant fails to timely exercise its option under this Section
35, time being of the essence with respect to Tenant's exercise thereof, or (3)
Landlord determines, in its sole but reasonable discretion, that Tenant's
financial condition or creditworthiness has materially deteriorated since the
date of this Lease.
36. RIGHT OF FIRST OFFER. (a)Provided that Tenant is not in default of any
payment due hereunder or of any material performance obligation (after the
giving of any required notice and the expiration of any applicable cure period)
under the terms of this Lease, Tenant, subject to the provisions of subsection
7(b) below, shall have the right of first offer to lease any space which may
become available within the Building from time to time during the term of this
Lease ("EXPANSION SPACE"), upon all the terms and conditions herein except that:
(a) the amount of the annual fixed base rent due and payable for such Expansion
Space shall be the greater of (x) the Prevailing Rental Rate(to be determined as
provided in paragraph 35), or (y) the annual fixed base rent then in effect
under this Lease; (b) the term of the lease for the Expansion Space shall be for
the remainder of the term of this Lease; and (c) the Expansion Space shall be
subject to any unexercised renewal options as provided in this Lease. In the
event that the Expansion Space becomes available, Landlord shall notify Tenant,
in writing, that such space is available ("EXPANSION SPACE NOTICE"). Within
fifteen (15) business days of Tenant's receipt of Landlord's Expansion Space
Notice, Tenant shall provide written notice to Landlord of its election to rent
the Expansion Space pursuant to this Section 36. Failure of Tenant to provide
written notice to Landlord within said fifteen (15) business day period shall be
conclusively deemed to be an election by Tenant not to rent the Expansion Space,
time being of the essence. If Tenant elects to rent the Expansion Space,
Landlord shall deliver the Expansion Space in its "as is" condition; provided,
however, that the Expansion Space shall be vacant, broom clean, free of tenants
and other occupants, in compliance with applicable laws, building codes and laws
applicable to vacant space and without regard to Tenant's use or occupancy
(which shall be conclusively established by the issuance of a certificate of
occupancy or continued occupancy), and free of Hazardous Substances except as
provided in Section 24(p). This right of first offer shall remain in full force
and effect during the initial term of Lease and during any option to renew as
set forth in Section 35.
(b) Notwithstanding the foregoing, Tenant acknowledges that Landlord
has advised Tenant that P&O Nedlloyd Logistics, an existing tenant in the
Building, has a similar right of first offer. Tenant agrees that Tenant's right
of first offer herein is subject and subordinate to the right of first offer
under the lease with P&O Nedlloyd Logistics, including any renewals.
37. AMERICAN'S WITH DISABILITY ACT. Landlord agrees that it shall cause the
Leased Premises to comply with the requirements of the Americans with
Disabilities Act ("ADA") of 1990, 42 U.S.C.S. Section 12101 et seq. and to the
rules and regulations promulgated thereunder. Landlord shall indemnify, defend
and hold Tenant harmless from and against any cost, expense, claim or liability
arising as a result of any violation of the ADA existing as of the commencement
date of this Lease, unless such cost, expense, claim or liability arises out of
or is in connection with Tenant's us of the Leased Premises or Tenant's gross
negligence or willful misconduct. Tenant agrees that it shall cause the Leased
Premises to remain in compliance with the requirements of the ADA, as may be
amended from time to time. Tenant shall indemnify, defend and hold Landlord
harmless from and against any cost, expense, claim or liability arising as a
result of any violation of the ADA arising after the commencement date of this
Lease.
38. SIGNAGE. Tenant may, at Tenant sole cost and expense, place a sign
(without interior or backlight illumination) on the exterior wall of the
Building subject to Landlord's approval as to type, size and location which may
be withheld in Landlord's discretion. Tenant shall be responsible to comply with
all applicable local, state and federal laws, ordinances and codes and to obtain
all required permits and approvals for the installation and removal of such
sign. Tenant shall, at Tenant's sole cost and expense, maintain any such sign in
good condition and repair at all times and remove same at the expiration or
sooner termination of this Lease and restore the exterior of the Building to its
original condition.
22
39. GUARANTY. Intentionally Omitted
40. BIND AND INURE. The terms, covenants and conditions of the written
Lease shall be binding upon and inure to the benefit of each of the parties
hereto, their respective executors, administrators, heirs and successors and
assigns, as the case may be.
41. SUBLEASE. Notwithstanding the references to this document as a "lease,"
Landlord is the tenant of the Project pursuant to a lease entitled "Subground
Lease Agreement" dated as of June 4, 2004 made between Landlord, as subtenant,
and GreDel Urban Renewal, L.L.C., as sublandlord ("PRIME LEASE") and GreDel
Urban Renewal, L.L.C. is the tenant pursuant to a lease entitled "Ground Lease
Agreement" dated as of June 4th, 2004, made between Landlord , as ground lessor,
and GreDel Urban Renewal, L.L.C. as ground lessee ("GROUND LEASE"), a copy of
which was recorded in the Office of the Middlesex County Clerk on June 24, 2004
in Book 5341 at page 180 et seq. Landlord represents and warrants that as of the
date hereof the Ground Lease and the Prime Lease are in full force and effect,
have not been supplemented or amended, and that neither Landlord nor GreDel
Urban Renewal, L.L.C. are in default under either lease. Landlord covenants that
it shall not amend or modify the Ground Lease or the Prime Lease in any manner
that would adversely affect Tenant's rights under this Lease (other than to a de
minimis extent) without Tenant's prior consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Only the terms and conditions
contained in this Lease, however, shall govern the rights and obligations of
Landlord and Tenant; it not being intended that any of the terms or conditions
of the Prime Lease be deemed incorporated herein. Landlord shall obtain from the
landlord under the Prime Lease, and from the fee owner of the Project,
subordination, non-disturbance and attornment agreements, in form and content
substantially as attached hereto and made a part hereof as SCHEDULE F.
SIGNATURES ON FOLLOWING PAGE
23
IN WITNESS WHEREOF, the parties hereto above placed their hands and
seals or caused these presents to be signed by their proper corporate officers
and caused their proper corporate seals to be hereunto affixed, the day and year
first above written.
GREDEL PROPERTIES, L.L.C.,
a New Jersey limited liability company
By: GREDEL HOLDINGS, L.L.C.,
a New Jersey limited liability company,
its sole member
By: GREDEL, L.L.C.,
a New Jersey limited liability
company, as manager
By: /s/ Frank A. Greek, Jr.
-----------------------
Name: Frank A. Greek, Jr.
Title: General Manager
PARLUX FRAGRANCES, INC.
a Delaware corporation
By: /s/ Frank A. Buttacavoli
------------------------
Frank A. Buttacavoli, Exec. VP/COO/CFO
24
DIRECT RECOGNITION AGREEMENT
THIS DIRECT RECOGNITION AGREEMENT is made as of April 7, 2006 by and
between:
GREDEL URBAN RENEWAL, L.L.C., a New Jersey limited liability
company, with offices at 33 Cotters Lane, East Brunswick, NJ
08816 ("SUB-LANDLORD"); and
PARLUX FRAGRANCES, INC., a Delaware corporation, with
offices at 3725 SW 30th Avenue, Ft. Lauderdale, FL 33312
("SPACE TENANT").
WHEREAS:
A. Sub-Landlord represents that it presently holds the tenant's
interest under that certain "Ground Lease Agreement," dated June
4, 2004, between Sub-Landlord, as ground lessee, and GreDel
Properties, L.L.C. ("FEE OWNER"), as fee owner/ground lessor
("GROUND LEASE"), for the land ("PREMISES") described on Exhibit A
annexed hereto, for a term expiring thirty (30) years and thirty
(30) days from the first day of the calendar month next succeeding
the date upon which the first temporary certificate of occupancy
is issued for the building to be constructed on the Premises by
Sub-Landlord. A copy of said Ground Lease was recorded in the
Office of the Middlesex County Clerk on June 24, 2004 in Book 5341
at page 180 et seq.;
B. Sub-Landlord has entered into that certain "Subground Lease
Agreement" ("SUBLEASE"), dated as of June 4, 2004, between
Sub-Landlord, as sublessor, and Fee Owner, as sublessee, covering
all of the Premises and the improvements to be constructed thereon
by Sub-Landlord ("SUBLEASED PREMISES") for a term expiring thirty
(30) years and twenty-five (25) days from the first day of the
calendar month next succeeding the date upon which the first
temporary certificate of occupancy is issued for the building to
be constructed on the Premises by Tenant; and
C. Space Tenant has entered into, or is about to enter into, that
certain "Lease Agreement" and attached "Lease Agreement Summary"
(collectively, "SPACE LEASE"), dated of even date herewith for a
portion of the Subleased Premises ("SPACE LEASED PREMISES") for a
term of approximately five (5) years (plus renewal options if
exercised by Space Tenant).
NOW, THEREFORE, it is agreed by and between Sub-Landlord and Space
Tenant as follows:
1. Landlord hereby acknowledges receipt of a copy of, and consents to,
the Space Lease and the terms thereof, and agrees that the exercise by Space
Tenant of any of the rights, remedies and options contained therein shall not
constitute a default under the Sub-Lease.
2. Sub-Landlord agrees that (a) whenever it has an obligation with
respect to the Subleased Premises, or its consent or approval is required for
any action of Fee Owner and/or Space Tenant under the Space Lease, then, to the
extent such obligation, consent or approval relates to the Space Leased Premises
or Space Tenant's use and occupation thereof, Sub-Landlord will perform such
obligation and will not unreasonably withhold, unduly delay or place conditions
on such consent or approval and (b) Sub-Landlord shall not, in the exercise of
any of the rights arising or which may arise out of the Sub-Lease, disturb or
deprive Space Tenant of its rights to possession of the Space Leased Premises
(except however, if Sub-Landlord terminates the Sub-Lease as a result of a
condemnation, in accordance with the terms of the Sub-Lease), or of any right or
privilege granted to or inuring to the benefit of Space Tenant under the Space
Lease.
3. In the event of (a) the termination of the Sub-Lease by (i)
re-entry, notice, conditional limitation, summary proceeding or other action or
proceeding or otherwise, or (ii) surrender by Fee Owner (except in connection
with a termination of the Sub-Lease as a result of a condemnation in accordance
with the terms of the Sub-Lease), or (b) if the Sub-Lease shall terminate or
expire for any reason before any of the dates provided in the Space Lease for
the termination of the initial or renewal term of the Space Lease (other than in
connection with Sub-Landlord's termination of the Sub-Lease as a result of a
condemnation in accordance with the terms of the Sub-Lease), Space Tenant shall
not be made a party in any removal or eviction action or proceeding (unless
Space Tenant shall be a necessary party) nor shall Space Tenant be evicted or
removed or its possession or right of possession be disturbed or in any way
interfered with, and the Space Lease shall continue in full force and effect as
a direct lease between Sub-Landlord and Space Tenant.
4. Sub-Landlord covenants and represents that as of the date hereof,
the Sub-Lease is in full force and effect and it knows of no default by Fee
Owner under any of the terms and conditions thereof and of no circumstance which
with the giving of notice or the passage of time or both would constitute a
default by Fee Owner under the Sub-Lease.
5. Sub-Landlord and Space Tenant agree that any agreement modifying (a)
the Sub-Lease which would (i) effect any increase in Space Tenant's rents or
decrease the term of the Sub-Lease, or (ii) increase Space Tenant's monetary
obligations, or decrease Fee Owner's obligations, under the Space Lease, or (b)
the Space Lease which would (y) alter the size of the leased premises, effect
any decrease in Space Tenant's rents, or the term of the Space Lease, or (ii)
diminish Space Tenant's monetary obligations, or increase Fee Owner's
obligations, under the Space Lease, shall not be binding on Sub-Landlord or the
Space Tenant, as applicable, unless such party has consented thereto in writing.
6. Any notices, consents, approvals, submissions, demands or other
communications (hereinafter "NOTICES") given under this Agreement shall be in
writing. Unless otherwise required by law or governmental regulation, Notices
shall be deemed given if sent by certified mail, return receipt requested,
postage prepaid, or by a recognized overnight courier service that provides
proof of delivery to the courier service and proof of receipt, shipping prepaid,
addressed: (a) to Sub-Landlord, at the address of Tenant as hereinabove set
forth or such other address as Sub-Landlord may designate by Notice to the other
parties hereto; and (b) to Space Tenant, at the address of Space Tenant as
hereinabove set forth, with a copy(ies) as provided in the Space Lease, or such
other address or persons as Space Tenant may designate by Notice to the other
parties hereto. All Notices shall become effective only on the receipt or
refusal of same by the proper parties.
7. No modification, amendment, waiver, or release of any provision of
this Agreement or of any right, obligation, claim or cause of action arising
hereunder shall be valid or binding for any purpose whatsoever unless in writing
and duly executed by all of the parties hereto.
8. This Agreement shall be binding on, and shall inure to the benefit
of, the parties hereto and their respective legal representatives, successors
and assigns.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed as of the date first above written.
PARLUX FRAGRANCES, INC.
a Delaware corporation
By: /s/ Frank A. Buttacavoli
------------------------
Frank A. Buttacavoli, Exec. VP/COO/CFO
GREDEL URBAN RENEWAL, LLC
a New Jersey limited liability company
By: GreDel Holdings, LLC
a New Jersey limited liability company, its sole member
By: LIT INDUSTRIAL LIMITED PARTNERSHIP,
a Delaware limited partnership, member
By: LIT Holdings GP, LLC
a Delaware limited liability company, its sole general partner
By: Lion Industrial Properties, L.P.,
a Delaware limited partnership, its sole member
By: LIT GP Sub, LLC,
a Delaware limited liability company, its sole general
partner
By: Lion Industrial Trust,
a Maryland real estate investment trust,
its sole member and manager
By: /s/ Frank A. Greek, Jr.
Frank A. Greek, Jr.
General Manager
By: GREDEL, LLC,
a New Jersey limited liability company, member
By: /s/ Frank A. Greek, Jr.
Frank A. Greek, Jr.
General Manager