Exhibit 10.4
Commercial Lease
THIS LEASE made as of February 1, 2006 between Hamilton Transit Corporate Center
(HTCC), of 572 Whitehead Road, Trenton, NJ 08619 (the "Landlord") and Foam
Manufacturing Inc. (FMI) of 305 Madison Ave. , Suite 4510, New York, NY 10165
(the "Tenant").
IN CONSIDERATION of the mutual covenants contained herein, the Landlord and
Tenant hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Lease the following terms shall have the following
meanings:
"Additional Rent" means all other amounts payable by the Tenant to the
Landlord or to be discharged as Rent under this Lease;
"Building" means the building #3 (occupying 28,000 sq.ft. of space with
right of first refusal for additional lease space) located on the Land,
including all alterations and additions thereto and replacements thereof.
"Commencement Date" means February 1, 2006;
"Event of Default" means an event referred to in Section 10.2;
"Land" means the land known municipally as 572 Whitehead Road, Trenton, NJ
08619 and legally described as same;
"Lease" means this lease and any Schedules attached hereto, which are
referred to in this lease, and every executed instrument, which by its
terms amends, modifies or supplements this lease;
"Lease Year" means each successive periods of twelve (12) calendar months
during the Term ending on an anniversary of the Commencement Date; provided
that if the Landlord deems it necessary for the Landlord's accounting
purposes, the Landlord may by written notice to the Tenant specify another
day on which each subsequent lease year is to commence and in such event,
the appropriate adjustments shall be made accordingly;
"Leased Premises" means the Property and the Building;
"Minimum Rent" means for each Lease Year, the amounts set out hereunder*:
------------ ------------------------ --------------------
Year of Aggregate Annual Monthly Minimum
Term Minimum Rent Rent
------------ ------------------------ --------------------
Year 1 $159,600.00 $13,300.00
Year 2 $166,600.00 $13,883.34
Year 3 $173,600.00 $14,466.67
Year 4 $180,600.00 $15,050.00
Year 5 $187,600.00 $15,633.34
Year 6 $194,600.00 $16,216.67
------------ ------------------------ --------------------
*The above rent amounts include $1.95 / sq.ft. CAM charge.
"Occupancy Date" means February 1, 2006;
"Permitted Use" means the business of manufacturing, office and/or storage
and any and all uses ancillary thereto;
"Rent" means the aggregate of all amounts payable by the Tenant to the
Landlord under this Lease;
"Term" means a period of Six (6) Years with two 3-year renewal options,
commencing on the Commencement Date or any renewal period hereunder;
"Termination Date" means January 31, 2012, unless earlier terminated as
provided in this Lease;
"Value Taxes" means all goods and services taxes, sale taxes, value-added
taxes, and any other taxes imposed on the Landlord with respect to this Lease,
the services provided hereunder or the Rent.
ARTICLE 2
GRANT OF LEASE AND GENERAL COVENANTS
2.1 Grant. The Landlord hereby leases to the Tenant and the Tenant hereby
leases from the Landlord the Leased Premises, to have and to hold during
the Term, subject to the terms and conditions of this Lease.
2.2 Landlord's General Covenants. The Landlord covenants with the Tenant:
(a) for quiet enjoyment of the Leased Premises; and
(b) to observe and perform all the covenants and obligations of the
Landlord herein.
2.3 Tenant's General Covenants. The Tenant covenants with the Landlord:
(a) to pay Rent; and
(b) to observe and perform all the covenants and obligations of the Tenant
herein.
ARTICLE 3
TERM AND POSSESSION
3.1 Term. The Term of this Lease shall begin on the Commencement Date and end
on the Termination Date unless terminated earlier as provided in this
Lease.
3.2 Possession of Leased Premises. Notwithstanding the Term, the Tenant shall
have occupancy of the Leased Premises from and after the Occupancy Date to
the Termination Date, during which period the Tenant shall pay all Rent,
other than Minimum Rent, and shall observe and perform all the covenants
and obligations of the Tenant herein.
ARTICLE 4
RENT
4.1 Rent. The Tenant shall pay to the Landlord as Rent for the Leased Premises
the aggregate of:
(a) Minimum Rent in respect of each year of the Term or renewal terms as
the case may be, payable in advance and without notice or demand in
monthly installments commencing on the Commencement Date; and
(b) Additional Rent at the times and in the manner provided in this Lease
or, if not so provided, as reasonably required by the Landlord.
If the Commencement Date is not the first day of a calendar month, Rent for
the period from the Commencement Date to the first day of the next calendar
month shall be pro-rated on a per diem basis and paid on the Commencement
Date and thereafter all subsequent monthly installments of Rent shall be
paid in advance on the first day of each calendar month.
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4.2 Net Lease. It is the intent of the Landlord and the Tenant that this Lease
shall be fully net to the Landlord, provided that the Tenant shall not be
responsible for costs and expenses expressly excluded by the terms of this
Lease, and including but not limited to the following:
(a) mortgage payments of capital or interest on any mortgage affecting the
Leased Premises;
(b) any income taxes of the Landlord, except to the extent that such
income taxes are imposed in lieu of real property taxes;
(c) any ground rental;
(d) any structural repairs or replacements; (e) any repairs caused by the
negligence of another tenant; and
(f) any expenditures with respect to the Leased Premises, which are of a
capital nature.
4.3 Payment of Rent. One (1) month security deposit is required. All amounts
payable by the Tenant to the Landlord pursuant to this Lease shall be
deemed to be Rent and shall be payable and recoverable as Rent in the
manner herein provided and the Landlord shall have all rights against the
Tenant for default in any such payment as in the case of arrears of rent.
Except as provided in Section 8.1, Rent shall be paid to the Landlord in
lawful money of the United States of America, without deduction or set-off,
at the address of the Landlord or to such other person or such other
address as the Landlord may from time to time designate in writing. The
Tenant's obligation to pay Rent shall survive the expiration of earlier
termination of this Lease.
ARTICLE 5
USE AND OCCUPATION
5.1 Use of Leased Premises. The Tenant shall use the Leased premises only for
the Permitted Use and shall not use or permit to be used the Leased
Premises or any part thereof for any other purpose or business or by any
persons other than the Tenant.
5.2 Compliance with Laws. The Tenant shall comply with present and future laws,
regulations and orders relating to the occupation or use of the Leased
Premises, the condition of the leasehold improvements, equipment and other
property of the Tenant therein, the making by the Tenant of any repairs,
changes or improvements and the conduct of business in the Leased Premises.
5.3 Prohibited Uses. The Tenant shall not commit, cause or permit any nuisance
or any waste or injury to or in or about the Leased Premises, or to any of
the leasehold improvements, merchandise or fixtures therein, or conduct any
use or manner of use causing annoyance to any person. Without limiting the
generality of the foregoing, the Tenant shall not use or permit the use of
any portion of the Leased Premises for any dangerous, illegal, noxious,
odorous or offensive trade, business or occurrence or other use contrary to
the provisions of this Lease. The Tenant shall keep the Leased Premises
free of debris or anything of a dangerous, noxious, odorous or offensive
nature or which could create an environmental or a fire hazard (through
undue load on electrical circuits or otherwise) or undue vibration, heat or
noise.
5.4 Hazardous Use. The Tenant shall not do, omit to do or permit to be done
anything which will cause or shall have the effect of causing the cost of
the Landlord's insurance in respect of the Leased Premises to be increased
at any time during the Term or any policy of insurance on or relating to
the Leased Premises to be subject to cancellation. Without waiving the
foregoing prohibition, the Landlord may demand and the Tenant shall pay to
the Landlord upon demand, the amount of any increase in the cost of
insurance caused by anything so done or omitted to be done. The Tenant
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shall forthwith upon the Landlord's request comply with the requirements of
the Landlord's insurers, cease any activity complained of and make good any
circumstance which has caused any increase in insurance premiums or the
cancellation of any insurance policy. If any policy of insurance in respect
of the Leased Premises is cancelled or becomes subject to cancellation by
reason of anything so done or omitted to be done, the Landlord may without
prior notice terminate this Lease and re-enter the Leased Premises.
5.5 Signage. The Tenant shall, with the Landlord's prior written approval, not
to be unreasonably withheld or delayed, be permitted to install and exhibit
sign(s) identifying the Tenant and the Tenant's business activities on the
Leased Premises. Subject to requirements of existing municipal by-laws,
such sign(s) are to be installed and maintained at the Tenant's own
expense.
5.6 Rules and Regulations. The Landlord shall be entitled from time to time to
make reasonable rules and regulations for the operation, maintenance,
safety, and use of the Leased Premises and the Tenant shall comply with
such rules and regulations and shall cause its servants, agents, employees,
customers, invitees and licensees to comply with such rules and
regulations.
5.7 Toxic or Hazardous Substances. The Tenant at present agrees to neither
store, spill or bring onto the premises any material which is considered a
hazardous substance as defined by the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6, et seq. and the regulations promulgated thereunder other
than substances ordinarily used in offices in quantities typically found in
offices. Tenant is not currently utilizing any material that is considered
a hazardous substance other than substances ordinarily used in offices in
quantities typically found in offices. In the event of a change in
technology so that Tenant is required in the future to utilize hazardous
substances, Tenant will notify Landlord and obtain Landlord's consent,
which consent will not be unreasonably withheld or delayed. In the event of
Tenant in the future utilizing a hazardous substance as defined by the
Industrial Site Recovery Act, Tenant hereby agrees to indemnify and hold
Landlord harmless with respect to said hazardous substance and the use
thereof and further agrees to comply with any and all regulations
concerning industries that use such hazardous substances. In the event this
clause is violated, Tenant shall immediately, upon the request of Landlord,
the State or any Department thereof, remove said substance and restore the
premises to an ISRA free condition from the violation within five (5) days
of said notice at Tenant's sole cost and expense. Tenant agrees to
indemnify and hold Landlord harmless with respect to any financial
liability imposed upon Landlord for Tenant's violations of the within
paragraph. An uncured violation of this paragraph shall give Landlord an
immediate right to possession. In the event evidence of such compliance is
not delivered to the Landlord prior to the surrender of the premises by the
Tenant to the Landlord, it is understood and agreed that the Tenant shall
be liable to pay to the Landlord an amount equal to two times the rent then
in effect, pro rated on a monthly basis, together with all applicable
additional rent from the date of such surrender until such time as evidence
of compliance with ISRA has been delivered to the Landlord and together
with any costs and expenses incurred by Landlord enforcing Tenant's
obligations under this paragraph. Evidence of compliance, as used herein,
shall mean a letter of non-applicability issued by the New Jersey
Department of Environmental Protection or an approved negative declaration
or a clean-up plan which has been fully implemented and approved by the New
Jersey Department of Environmental Protection.
Tenant is not deemed to be responsible for nor does Tenant assume any
responsibility for any hazardous or toxic substances which may be present
at the premises upon the commencement of the lease. Landlord represents to
Tenant that there has been a full ISRA compliance done by Goodall Rubber
Company Inc., Landlord's predecessor in title, and to the best of
Landlord's knowledge, there are no hazardous substances or hazardous waste
present at the premises. Landlord agrees to indemnify and hold Tenant
harmless with respect to any loss, liability, cost or expense which Tenant
may sustain by reason of the presence at the commencement of the lease of
any such hazardous substance or hazardous waste.
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ARTICLE 6
RIGHTS AND OBLIGATIONS OF THE LANDLORD
6.1 Operation of Leased Premises. The Tenant shall assume full responsibility
for the operation and maintenance of the Leased Premises and for the repair
or replacement of all fixtures or chattels located therein or thereon. The
Landlord shall have no responsibility whatsoever, with respect to
maintenance, repairs or replacement, except as provided in Section 6.2
herein, provided that if the Tenant fails to do so, the Landlord may at its
sole option upon 14 days prior written notice and without any obligation to
the Tenant elect to perform such maintenance, repairs or replacement as the
Landlord may reasonably deem necessary or desirable. In so doing, the
Landlord shall not be liable for any consequential damage, direct or
indirect to any person or property, including, but without restricting the
generality of the foregoing, damages for a disruption of the business of
the Tenant and damage to, or loss of, the goods, chattels and equipment and
other property of the Tenant nor shall any reduction or disruption of
services be construed as a breach of the Landlord's covenants or as an
eviction of the Tenant, or release of the Tenant from any obligation under
this Lease provided that the Tenant's business is not unreasonably
interfered with.
6.2 Access by Landlord. The Tenant shall permit the Landlord to enter the
Leased Premises at any time outside normal business hours in case of an
emergency and otherwise during normal business hours where such will not
unreasonably disturb or interfere with the Tenant's use of the Leased
Premises or operation of its business, to examine, inspect and show the
Leased Premises for purposes of leasing, sale or financing, to provide
services or make repairs, replacements, changes or alterations as provided
for in this Lease and to take such steps as the Landlord may deem necessary
for the safety, improvement or preservation of the Leased Premises. The
Landlord shall, whenever possible, consult with or give reasonable notice
to the Tenant prior to entry but no such entry shall constitute an eviction
or a breach of the Landlord's covenant for quiet enjoyment or entitle the
Tenant to any abatement of Rent. The Tenant shall also permit the Landlord,
its employees and agents, at any time during the six (6) months prior to
the expiry or termination of this Lease to enter the Leased Premises for
the purpose of showing it to any such persons as may be desirous of
purchasing or leasing the Leased Premises.
ARTICLE 7
TENANT'S RESPONSIBILITIES
7.1 Tenant's Obligations. In connection with the Leased Premises, the Tenant
hereby agrees that it shall be responsible for the following throughout the
Term:
(a) Insurance - The Tenant hereby agrees to defend and save the Landlord
harmless and indemnify it from all injury, loss, claims or damage
(including attorney's fees and disbursements incurred by the Landlord
in conducting an investigation and preparing for and conducting a
defense) to any person or property arising from, relating to or in any
way connected with the use or occupancy of the premises or the conduct
or operation of the Tenant's business.
To maintain with responsible companies approved by the Landlord:
(1) Comprehensive general liability insurance against all claims,
demands or actions for injury to or death of person or property
to the limit of not less than $1,000,000.00 per occurrence and
$2,000,000.00 in the aggregate per occurrence and/or in the
aggregate including products liability and independent
contractor's coverage with broad form endorsement arising from,
related to or in any way connected from the conduct and operation
of the Tenant's business in the Premises or caused by actions or
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omissions to act where there is as duty to act of the Tenant, its
agents, servants and contractors, which insurance shall name the
Landlord, its agents, servants, employees, contractors, licensees
and invitees as additional insured's. Tenant will additionally be
required to provide a $1,000,000.00 umbrella policy over and
above the comprehensive liability.
(2) If there is a boiler or major refrigeration equipment or pressure
object or other similar equipment in the Premises, steam boiler,
air conditioning and machinery insurance written on broad form
basis to the limit of $500,000.00.
(3) Fire insurance with extended coverage, vandalism, malicious
mischief, sprinkler leakage and flood endorsements attached as
the Landlord reasonably may from time to time approve or require
covering all fixtures and equipment, stock in trade, furniture,
furnishings, improvements or betterments installed or made by the
Tenant in, on or about the Premises to the extent of at least
100% of their replacement values without deduction for
depreciation but in any event, in applicable policies. Tenant
will also be responsible for building replacement coverage in the
event of loss for not less than $1,750,000.00 based on
$70.00/sqft. replacement cost.
(4) Workmen's compensation, disability and such other similar
insurance covering all persons employed in connection with the
Tenant's work and with respect to whom, death or bodily injury
claims could be asserted against the Tenant, Landlord or the
Premises.
(5) Rental income insurance payable to the Landlord as loss payee in
case of loss caused by a casualty against which insurance is
required hereunder with respect to the twelve (12) month period
following any casualty.
All of said insurance shall be in form and with deductibles (not
greater than $1,000.00 deductible) satisfactory to the Landlord and
shall provide that it shall not be subject to cancellation,
termination or change except after at least thirty (30) days' prior
written notice to the Landlord. In the case of boiler and machinery
insurance and rental income insurance, the policy (ies) shall cover
the Landlord as an additional insured and loss payee. All policies
required pursuant to this Paragraph or duly executed duplicates of
same shall be deposited with the Landlord not less than ten (10) days
prior to the day the Tenant begins its work and upon renewals of said
policies not less than fifteen (15) days prior to the expiration of
the terms of such coverage. All such policies shall be delivered with
satisfactory evidence of the payment of the premium thereof. The
Landlord and Tenant mutually agree that with respect to any loss which
is covered by insurance then being carried by them respectively or
required to be carried, the party carrying or required to carry such
insurance and suffering said loss releases the other of and from any
and all claims with respect to such loss, and they further mutually
agree that their respective insurance companies shall have no right of
subrogation against the other on account thereof. In the event that an
extra premium is payable by either party as a result of these
provisions, the other party shall reimburse the party paying such
premium the amount of such extra premium. If at the written
requirement of the other party this release and non-subrogation
provision is waived, then the obligation of reimbursement shall cease
for such period of time as such waiver shall be effective, but nothing
contained in this Paragraph shall be deemed to modify or otherwise
affect releases elsewhere herein contained of either party from
liability for claims.
All public liability, property damage and other casualty insurance
policies obtained by the Tenant pursuant to this subparagraph shall be
written as primary insurance and not contributing with separate
coverage which the Landlord may carry, shall name the Landlord as an
additional insured and shall contain cross-liability endorsements. If
the Tenant fails to comply with this paragraph, the Landlord shall
have the right to obtain any such insurance and to pay the premiums
therefore and in such event, the entire amount of such premiums shall
be immediately due and payable by the TENANT to the LANDLORD.
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Landlord additionally will obtain comprehensive general liability
insurance covering the entire site. Tenant hereby agrees to pay to
Landlord as and for additional rent, twenty percent (15%) of the
annual premium for said policy. Said payments to be made within
fifteen (15) days of Landlord's submission of the bill to Tenant.
(b) Utilities - to promptly pay and discharge all charges, rates,
assessments and levies for water, gas, electric, sewer, annual
sprinkler inspection charge and all other utilities supplied to or
consumed in the Leased Premises.
(c) Taxes - included in the rent.
(d) Heating and Cooling - to pay and discharge as Rent the cost of all
heating, cooling, ventilating and air conditioning required in the
Leased Premises and the cost of all repairs, replacements and
improvements to the heating, ventilating, air conditioning and other
service and utility systems;
(e) Maintenance - to maintain the Leased Premises and all improvements
therein in good order and condition; including but not limited to,
maintenance of lighting fixtures, cleaning of carpets, indoor paint,
bathrooms, alarms and any interior renovations. To provide all
landscaping, gardening and snow removal. To keep the Leased Premises
in a clean condition and remove from the Leased Premises at its
expense all debris and garbage;
(f) Repairs - to perform all repairs to and make all replacements of
fixtures, systems, facilities, equipment, machinery, leasehold
improvements and plate glass in the Leased Premises as may be
necessary; and
(g) All Other Expenses - to pay all other expenses of every nature
incurred in connection with the maintenance and operation of the
Leased Premises.
7.2 Payment of Costs. The Tenant shall pay all of the costs and expenses
associated with the Tenant's obligations directly to the appropriate party
as they come due and shall, at the Landlord's request, provide the Landlord
with copies of receipts or other proof acceptable to the Landlord that such
costs have been paid. If the Tenant fails to perform any obligation under
this Lease or to pay any costs and expenses as set out herein, the Landlord
may at its sole option and discretion, on seven (7) days written notice to
the Tenant, perform such obligation or pay such amounts on behalf of the
Tenant and the Tenant shall forthwith upon receipt of an invoice therefor
reimburse the Landlord for the cost of such action or the amount of such
payment.
7.3 Leasehold Improvements. The Tenant may install in the Leased Premises its
usual fixtures and personal property in a proper manner; provided that no
installation or repair shall interfere with or damage the mechanical or
electrical systems or the structure of the Leased Premises. If the Tenant
is not then in default hereunder, the fixtures and personal property
installed in the Leased Premises by the Tenant may be removed by the Tenant
from time to time in the ordinary course of the Tenant's business or in the
course of reconstruction, renovation or alteration of the Leased Premises
by the Tenant, provided that the Tenant promptly repairs at its own expense
any damage to the Leased Premises resulting from the installation and
removal reasonable wear and tear excepted. The Tenant shall, if required by
the Landlord, remove any Leasehold Improvements or fixtures from the Leased
Premises upon the termination of this Lease.
7.4 Alterations by Tenant. The Tenant may from time to time at its own expense
make changes, additions and improvements to the Leased Premises to better
adapt the same to its business, provided that any change, addition or
improvement shall be made only after obtaining written consent of the
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Landlord, such consent not to be unreasonably withheld or delayed and shall
be carried out in a good and workmanlike manner and only by persons
selected by the Tenant and reasonably approved in writing by the Landlord.
If any such changes, additions or improvements require alterations to the
exterior walls, roof, or other structural components of the Leased Premises
or modification to the heating, ventilation or air conditioning systems in
the Leased Premises, the Tenant shall be solely responsible for the cost of
such modifications and the Landlord hereby reserves the right to perform
any such work at the expense of the Tenant provided that the cost of such
work to the Tenant is reasonable in the circumstance.
7.5 Liens. The Tenant shall pay promptly when due all costs for work done or
caused to be done by the Tenant in the Leased Premises which could result
in any lien or encumbrance on the Landlord's interest in the property,
shall keep the title to the property and every part thereof free and clear
of any lien or encumbrance in respect of the work and shall indemnify and
hold harmless the Landlord against any claim, loss, cost, demand and legal
or other expense, whether in respect of any lien or otherwise, arising out
of the supply of materials, services or labor for the work.
7.6 Notify Landlord. The Tenant shall immediately notify the Landlord of any
accidents or defect in the Leased Premises or any systems thereof, and as
well of any matter or condition, which may cause injury or damage to the
Leased Premises, or any person or property located therein.
ARTICLE 8
DAMAGE AND DESTRUCTION
8.1 Damage and Destruction. If during the Term the Leased Premises or any part
thereof shall be damaged by fire, lightning, tempest, structural defects or
acts of God or by any additional perils from time to time defined and
covered in the standard broad-coverage fire insurance policy carried by the
Tenant on the Leased Premises, the following provisions shall apply:
(a) If as a result of such damage the Leased Premises are rendered
partially unfit for occupancy by the Tenant, the Rent shall abate in
the proportion that the part of the Leased Premises rendered unfit for
occupancy by the Tenant is of the whole of the Leased Premises. If the
Leased Premises are rendered wholly unfit for occupancy by the Tenant,
the Rent shall be suspended until the Leased Premises have been
rebuilt and repaired or restored.
(b) Notwithstanding subsection (a) above, if in the opinion of the
Landlord's architect or engineer given within 60 business days of the
happening of damage, the Leased Premises shall be incapable of being
rebuilt, repaired, or restored with reasonable diligence within 180
days after the occurrence of the damage then either the Landlord or
the Tenant may, at its option, terminate this Leased by notice in
writing to the other given within 15 days of the giving of the opinion
of the Landlord's architect or engineer. If notice is given by the
Landlord or Tenant under this Section, then this Lease shall terminate
from the date of such damage and the Tenant shall immediately
surrender the Leased Premises and all interest therein to the Landlord
and the Rent shall be apportioned and shall be payable by the Tenant
only to the date of the damage and the Landlord may thereafter
re-enter and repossess the Leased Premises.
(c) If the Leased Premises are capable with reasonable diligence of being
rebuilt, repaired or restored within 180 days of the occurrence of
such damage, then the Landlord shall proceed to rebuild, restore or
repair the Leased Premises with reasonable promptness within 180 days
plus any additional period due to delay caused by strikes, lock-outs,
slow-downs, shortages of material or labor, acts of God, acts of war,
inclement weather or other occurrences which are beyond the reasonable
control of the Landlord, and the Rent shall abate in the manner
provided for in subsection (a) above until the Leased Premises have
been rebuilt, repaired or restored; provided that nothing in this
Section shall in any way be deemed to affect the obligation of the
Tenant to repair, maintain, replace or rebuild the Leased premises as
otherwise provided by the terms of this Lease.
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ARTICLE 9
CONDEMNATION
9.1 Condemnation. If the land and premises leased herein, or of which the
leased premises are a part, or any portion thereof, shall be taken under
eminent domain or condemnation proceedings, or if suit or other action
shall be instituted for the taking or condemnation thereof, or if in lieu
of any formal condemnation proceedings or actions, the Landlord shall grant
an option to purchase and or shall sell and convey the said premises or any
portion thereof, to the governmental or public authority, agency, body or
public utility, seeking to take said land and premises or any portion
thereof, then this lease, at the option of the Landlord, shall terminate,
and the term hereof shall end as of such date as the Landlord shall fix by
notice in writing: and the Tenant shall have no claim or right to claim or
be entitled to any portion of any amount which may be awarded as damages or
paid as the result of such condemnation proceedings or paid as the purchase
price for such option, sale or conveyance in lieu of formal condemnation
proceedings; and all rights of the Tenant to damages, if any, other than
the right to prosecute its own claim for personal property and trade
fixtures as well as its moving expenses are hereby assigned to the
Landlord. The Tenant agrees to execute and deliver any instruments, at the
expense of the Landlord, as may be deemed necessary or required to expedite
any condemnation proceedings or to effectuate a proper transfer of title to
such governmental or other public authority, agency, body or public utility
seeking to take or acquire the said lands and premises or any portion
thereof. The Tenant covenants and agrees to vacate the said premises,
remove all the Tenant's personal property there from and deliver up
peaceable possession thereof to the Landlord or to such other party
designated by the Landlord in the aforementioned notice. Failure by the
Tenant to comply with any provisions in this clause shall subject the
Tenant to such costs, expenses, damages and losses as the Landlord may
incur by reason of the Tenant's breach hereof.
ARTICLE 10
INDEMNITY
10.1 Indemnity. The Tenant shall indemnify and save harmless the Landlord and
its agents and employees from any and all liabilities, damages, costs,
claims, suits or actions growing or arising out of:
(d) any breach, violation or non-performance of any covenant, condition or
agreement in this Lease set forth and contained on the part of the
Tenant to be fulfilled, kept, observed and performed;
(e) any damage to property while the property is in or about the Leased
Premises; and
(f) any injury to person or persons including death resulting at any time
therefrom occurring in or about the Leased Premises.
10.2 Limitation of Landlord's Liability. The Landlord and its agents and
employees shall not be liable for any damage to the Leased Premises or any
property located therein caused by any latent defect or by steam, water,
rain or snow which may leak into, issue or flow from any part of the Leased
Premises or from the water, steam, sprinkler or drainage pipes or plumbing
works of the same or from any other place or from any damage caused by or
attributable to the condition or arrangement of any electrical or other
wiring or for any damage caused by anything done or omitted to be done by
any person or for damage caused by interruption or failure of any service
or utility or for damage however caused to merchandise, stock in trade,
books, records, files, money, securities, negotiable instruments, papers or
other valuables.
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10.3 Survival of Obligations and Indemnities. All obligations of the Tenant,
which arise during the Term pursuant to this Lease and which have not been
satisfied and the indemnities, and other obligations of the Tenant
contained in Section 9.1 shall survive the expiration or other termination
of this Lease.
ARTICLE 11
DEFAULT
11.1 Interest and Costs. If Rent is not paid within ten (10) days of the date
the same is due, the Tenant shall pay monthly to the Landlord interest at
five percent (5%) of the amount to have been paid for each month or part of
month upon any default in payment of Rent until the same is fully paid and
satisfied. The Tenant shall indemnify the Landlord against all costs and
charges reasonably incurred in enforcing payment of Rent hereunder and in
obtaining possession of the Leased Premises should the same be necessary.
11.2 Events of Default. Each of the following events shall constitute an event
of default (an "Event of Default"):
(g) all or any part of the Rent hereby reserved is not paid when due and
upon written notice by the Landlord default continues for five (5)
days after notice thereof; or
(h) the Term or any goods, merchandise, stock in trade, chattels or
equipment of the Tenant is seized or is taken or exigible in execution
or in attachment or if a writ of execution is issued against the
Tenant or if a creditor takes possession thereof; or
(i) the Tenant or any person or corporation bound to perform the
obligations of the Tenant hereunder either as guarantor or indemnifier
or as one of the parties constituting the Tenant takes any steps or
suffers any order to be made for its winding-up or other termination
of its corporate existence or becomes insolvent or commits an act of
bankruptcy or becomes bankrupt or takes the benefit of any statute
that may be in force for bankrupt or insolvent debtors or becomes
involved in voluntary or involuntary winding-up proceedings or if a
receiver or receiver/manager shall be appointed for the business,
property, affairs or revenues of the Tenant or such person or
corporation; or
(j) the Tenant makes a bulk sale of its goods or moves or commences,
attempts or threatens to move its goods, chattels and equipment out of
the Leased Premises (other than in the normal course of its business)
or ceases to conduct business from the Leased Premises for in excess
of 14 days; or
(k) the Tenant fails to observe, perform and keep each and every of the
covenants, agreements and conditions herein contained to be observed,
performed and kept by the Tenant and persists in the failure after 10
days notice by the Landlord requiring the Tenant to remedy, correct,
desist or comply (or if any breach would reasonably require more than
10 days to rectify, unless the Tenant commences rectification within
the 10 day notice period and thereafter promptly and effectively and
continuously proceeds with the rectification of the breach).
11.3 Remedies on Default. Upon the occurrence of one or more Events of Default,
the Landlord may, at its option, and in addition to and without prejudice
to all rights and remedies of the Landlord available to it either by any
other provision of this Lease or by statute or the general law:
(l) be entitled to the full amount of the current month's and the next
three months' installments of Rent which shall immediately become due
and payable and the Landlord may immediately distrain for the same,
together with any arrears then unpaid;
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(m) without notice or any form of legal process, forthwith re-enter upon
and take possession of the Leased Premises or any part thereof in the
name of the whole and re-let the Leased Premises or any part thereof
on behalf of the Tenant or otherwise as the Landlord sees fit and
remove and sell the Tenant's merchandise, stock in trade, goods,
chattels and trade fixtures therefrom, any rule of law or equity to
the contrary notwithstanding;
(n) seize and sell such goods, chattels and equipment of the Tenant as are
in the Leased Premises and may apply the proceeds thereof to all Rent
to which the Landlord is then entitled under this Lease. Any such sale
may be effected by public auction or otherwise, and either in bulk or
by individual item, all as the Landlord in its sole discretion may
decide;
(o) terminate this Lease by leaving upon the Leased Premises ten (10) days
prior written notice of the termination, and termination shall be
without prejudice to the Landlord's right to damages; it being agreed
that the Tenant shall pay to the Landlord as damages the loss of
income of the Landlord to be derived from the Leased Premises for the
unexpired portion of the Term had it not been terminated, provided
that the Landlord shall not be entitled in any event to receive any
damages greater than those damages the Landlord would be entitled to
receive at law; or
(p) re-enter into and upon the Leased Premises or any part thereof in the
name of the whole and repossess and enjoy the same as of the
Landlord's former estate, anything herein contained to the contrary
notwithstanding;
and the Tenant shall pay to the Landlord forthwith upon demand all expenses
of the Landlord in re-entering, terminating, re-letting, collecting sums
due or payable by the Tenant or realizing upon assets seized including
tenant inducements, leasing commissions, legal fees on a solicitor and
client basis and all disbursements and the expense of keeping the Leased
Premises in good order, and preparing the same for re-letting.
11.4 Waiver. If the Landlord shall overlook, excuse, condone or suffer nay
default, breach or non-observance by the Tenant of any obligation
hereunder, this shall not operate as a waiver of the obligation in respect
of any continuing or subsequent default, breach or non-observance and no
such waiver shall be implied but shall only be affected if expressed in
writing.
11.5 Waiver of Exemption and Redemption. Notwithstanding anything contained in
any statute now or hereafter in force limiting or abrogating the right of
distress, none of the Tenant's goods, merchandise, stock in trade, chattels
or trade fixtures on the Leased Premises at any time during the Term shall
be exempt from levy by distress for Rent in arrears, and upon any claim
being made for exemption by the Tenant or on distress being made by the
Landlord, this agreement may be pleaded as an estoppel against the Tenant
in any action brought to test the right to the levying upon any such goods
as are named as exempted in any such statute, the Tenant hereby waiving all
and every benefit that could or might have accrued to the Tenant under and
by virtue of any such statute but for this Lease. The Tenant hereby
expressly waives any and all rights of redemption and relief from
forfeiture granted by or under any present or future laws in the event of
the Tenant being evicted or dispossessed for any cause, or in the event of
the Landlord obtaining possession of the Leased Premises, by reason of the
violation by the Tenant of any of the terms or conditions of this Lease or
otherwise.
ARTICLE 12
ASSIGNMENT AND TRANSFERS
12.1 No Assignment By Tenant. The Tenant shall not assign, sublet, pledge or
transfer this Lease or any interest therein or in any way part with
possession of all or any part of the Leased Premises, or permit all or any
part of the Leased Premises to be used or occupied by any other person
without the Landlord's prior written consent, which consent may not be
unreasonably withheld or delayed. The Tenant shall be permitted to assign
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this lease without prior consent of the Landlord to: (a) an associated
corporation, a parent or wholly owned subsidiary of the Tenant or; (b) to a
corporation which results from the reorganization, consolidation,
amalgamation or merger of the Tenant, provided that any such assignment or
any transfer, or transfers, or other dealing with any of the shares of the
Tenant, which taken alone or together have the effect of changing control
of the Tenant, shall be deemed to be an assignment of this Lease which
requires the prior approval of the Landlord as set out herein, except in
the case of an assignment to the existing creditors of the Tenant for which
not such approval shall be required.
12.2 Sale, Conveyance and Assignment by the Landlord. Nothing in this Lease
shall restrict the right of the Landlord to sell, convey, assign, pledge or
otherwise deal with the Leased Premises subject only to the rights of the
Tenant under this Lease. A sale, conveyance or assignment of the Leased
Premises by the Landlord shall operate to release the Landlord from
liability from and after the effective date thereof in respect of all of
the covenants, terms and conditions of this Lease, express or implied,
except as they may relate to the period prior to the effective date, and
only to the extent that the Landlord's successor assumes the Landlord's
obligations under the Lease and the Tenant shall thereafter look solely to
the Landlord's successor in interest and to this Lease.
12.3 Subordination. This Lease is and shall be subject and subordinate in all
respects to any and all mortgages (including deeds of trust and mortgage)
now or hereafter placed on the Leased Premises and all advances thereunder,
past, present and future and to all renewals, modifications,
consolidations, replacements and extensions thereof. The Tenant agrees to
execute promptly after request therefor an instrument of subordination as
may be requested.
ARTICLE 13
SURRENDER AND OVERHOLDING
13.1 Surrender. Upon the expiration or other termination of the Term, the Tenant
shall immediately quit and surrender possession of the Leased Premises and
all leasehold improvements in substantially the condition in which the
Tenant is required to maintain the Leased Premises excepting only
reasonable wear and tear, and upon surrender, all right, title, and
interest of the Tenant in the Leased Premises shall cease. It is understood
that the Landlord has the right to remove and sell or otherwise dispose of
any leasehold improvements, chattels, equipment or any other property of
the Tenant left on the Leased Premises by the Tenant after the termination
of this Lease, and to retain the proceeds thereof, and the Tenant shall pay
to the Landlord upon written demand all of the costs incurred by the
Landlord in connection therewith.
13.2 Over holding. If the Tenant continues to occupy the Leased Premises after
the expiration or other termination of the Term without any further written
agreement, the Tenant shall be a monthly tenant at an Minimum Rent equal to
two times the Minimum Rent paid by the Tenant immediately prior to the
expiration or other termination of the Term but subject to all other
provisions in this Lease to the extent that the same are applicable to a
month to month tenancy, and a tenancy from year to year shall not be
created by implication of law. Nothing contained in this Section shall
preclude the Landlord from exercising all of its rights set out in this
Lease including, without limitation, the taking of any action for recovery
or possession of the Leased Premises.
ARTICLE 14
GENERAL
14.1 Entire Agreement. There is no promise, representation or undertaking by or
binding upon the Landlord except such as are expressly set forth in this
Lease, and this Lease including the Schedules contains the entire agreement
between the parties hereto.
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14.2 Registration. The Tenant agrees not to register this Lease. If the Tenant
wishes to register a notice of this Lease, the Landlord agrees to execute
at the expense of the Tenant, an acknowledgement or short form of lease
sufficient for such purpose, which shall preserve the confidentiality of
the Rent and other financial terms of this Lease. The Tenant shall at its
own expense, upon expiration or earlier termination of the Term, discharge
any registration made against the Leased Premises providing notice of its
interest in the Lease.
14.3 Notice. Any notice required or contemplated by any provision of this Lease
shall be given in writing and shall be sufficiently given if mailed by
registered mail or delivered or if sent by telecopy or similar form of
immediate transmission and if to the Landlord, delivered to the address set
out on page 1 and if to the Tenant, personally (or to a partner or officer
of the Tenant if the Tenant is a firm or corporation) or delivered to the
Leased Premises (whether or not the Tenant has departed from, vacated or
abandoned the same). Any notice shall be deemed to have been received five
postal delivery days after the date of mailing or on the day following the
date of delivery or sending. If it is reasonably anticipated that mail
service may be disrupted, notice must be delivered or sent by telecopy or
other form of immediate transmission.
14.4 Relationship of Parties. Nothing contained in this Lease shall create any
relationship between the parties hereto other than that of Landlord and
Tenant.
14.5 Governing Law. This Lease shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the
State of New Jersey.
14.6 Amendment or Modification. No amendment, modification or supplement to this
Lease shall be valid or binding unless put out in writing and executed by
the Landlord and the Tenant.
14.7 Force Majeure. In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder
by reason of strikes, lock-outs, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war or other reason of a like nature not the fault of
the party delayed in performing work or doing acts required under the terms
of this Lease, then performance of such act shall be excused for the period
of the delay and the period for the performance of any such act shall be
extended for a period equivalent tot he period of such delay.
14.8 Severability. All of the provisions of this Lease are to be construed as
covenants and agreements. If any provision of this Lease is illegal or
unenforceable, it shall be considered separate and severable from the
remaining provisions of this Lease, which shall remain in force and be
binding as thought he provision had never been included.
14.9 Captions and Headings. The captions and headings contained in this Lease
are for convenience of reference only and are not intended to limit,
enlarge or otherwise affect the interpretation of the Articles, Sections or
parts thereof to which they apply.
14.10 Interpretation. Wherever necessary or appropriate in this Lease, the
plural shall be interpreted as singular, the masculine gender as feminine
or neuter and vice versa and when there are two or more parties bound by
the Tenant's covenants herein contained their obligations shall be joint
and several.
14.11 Time of the Essence. Time shall be of the essence hereof.
14.12 Successors and Assigns. Subject to specific provisions contained in this
Lease to the contrary, this Lease shall enure to the benefit of and be
binding upon the successors and assigns of the Landlord and the heirs,
executors and administrators and the permitted successors and assigns of
the Tenant.
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14.13 Consent Not Unreasonably Withheld. For greater clarity and except as
otherwise specifically provided, whenever consent or approval of Landlord
or Tenant is required under the terms of this Lease, such consent or
approval shall not be unreasonably withheld or delayed. If either party
withholds any consent or approval such party shall on written request
deliver to the other a written statement giving the reasons therefor.
14.14 Net Lease. The Tenant acknowledges and agrees that it is intended that
this Lease is a completely carefree net lease to the Landlord, except as
herein set out, that the Landlord is not responsible during the term for
any costs, charges, expenses or outlays of any nature whatsoever arising
from or related to the Leased Premises, or the use and occupancy thereof,
or the business carried on therein, and the Tenant shall pay all charges,
impositions, costs and expenses of every nature and kind relating to the
Leased Premises except as expressly herein set out.
IN WITNESS WHEREOF the Landlord and the Tenant have executed this Lease as of
the date first set forth above.
/s/ Peter A. Horvath
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Witness Peter A. Horvath
President
Hamilton Transit Corporate Center
/s/ Matthew Harriton
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Witness Matthew Harriton
President/CEO
Hydrogel Design Systems (HDS)