Exhibit 10.19

 

LEASE AGREEMENT

 

Between

 

400 COMMERCE BOULEVARD, LLC, Landlord

 

and

 

THE DONNA KARAN COMPANY LLC, Tenant

 

Prepared by:

 

Richard G. Berger, Esq.

c/o Russo Development, LLC

570 Commerce Boulevard

Carlstadt, New Jersey 07072

(201) 487-5657

 

   

 

 

TABLE OF CONTENTS

 

Article 1. Lease Term 4     Article 2. Rent 5     Article 3. Supplemental Rent 7
    Article 4. Repairs, Maintenance Security and Surrender Obligations of Tenant
11     Article 5. Repairs and Maintenance Obligation of Landlord 13     Article
6. Utilities and Personal Property Taxes 14     Article 7. Glass, Damage by
Tenant 15     Article 8. Use of Demised  Premises 15     Article 9. Alterations
and improvements 17     Article 10. Laws and Ordinances 19     Article 11.
Insurance 19     Article 12. Landlord’s Liability 21     Article 13. Default of
Landlord 22     Article 14. Default of Tenant 22     Article 15. Landlord’s
Access to Demised  Premises 26     Article 16. Hold Harmless 26     Article 17.
Assignment 27     Article 18. Condemnation 29     Article 19. Fire or Casualty
Loss 29     Article 20. Estoppel Certificate 30     Article 21. Signs 30    
Article 22. Brokerage Commission 31     Article 23. Unavoidable Delays 31    
Article 24. Subordination 31

 

   

 

 

Article 25. Limited Guaranty 32     Article 26. Landlord’s Power Generation
Systems 32     Article 27. Waiver as to Insured Losses 36     Article 28.
Environmental Covenants 36     Article 29. Auction Sales 38     Article 30.
Holding Over 38     Article 31. Quiet Possession 38     Article 32. Sale of the
Landlord’s  Premises 38     Article 33. Notices 39     Article 34. Parties Bound
39     Article 35. Abandoned Personal Property 40     Article 36. Financial
Information 40     Article 37. Letter of Acceptance 40     Article 38.
Miscellaneous Provisions 40     Article 39. Rules and Regulations 42     Article
40. Allowance improvements 42     Article 41. Option to Renew 44     Article 42.
Incorporation of Recitals 44

 

   

 

 

LEASE AND SECURITY AGREEMENT

 

THIS AGREEMENT, made this __ day of November, 2011, By and Between:

 

400 COMMERCE BOULEVARD, LLC, C/O Russo Development, LLC, 570 Commerce Boulevard,
Carlstadt, New Jersey 07072 (hereinafter referred to as the “Landlord”);

 

and

 

THE DONNA KARAN COMPANY LLC, 240 West 40th Street, New York, New York 10018,
(hereinafter referred to as the “Tenant”).

 

W I T N E S S E T H:

 

That Landlord leases to Tenant, and Tenant takes from Landlord, the premises
which consist of approximately 197,445 square feet, including approximately
23,615 square feet of office area, in Landlord’s building (the “Building”)
comprising approximately 267,051 square feet located at 400 Commerce Boulevard,
Carlstadt, New Jersey which area within the Building is more particularly
depicted on Schedule “A” annexed hereto (hereinafter the “Demised Premises”),
and the exclusive right to 125 parking spaces designated on Schedule “A.” The
lot or parcel commonly known as 400 Commerce Boulevard, Carlstadt, New Jersey,
the Building and all structures, fixtures, equipment and appurtenances now or
hereafter located at the property in which the Demised Premises are located
(other than any trade fixtures and equipment owned by Tenant) are hereinafter
referred to as the “Landlord’s Premises.”

 

TO HAVE AND TO HOLD the Demised Premises for the term set forth at Article 1 of
this Lease, subject to all of the terms, conditions, warranties, covenants and
agreements set forth in this Lease Agreement.

 

IN CONSIDERATION OF THE FOREGOING, and of the mutual promises, agreements,
conditions, covenants and terms herein set forth, the Landlord and the Tenant
mutually covenant and agree as follows:

 

1.           Lease Term: After the existing Tenant has vacated Landlord will
allow Tenant to access the Demised Premises to set up equipment and ready the
Demised Premises for occupancy; provided and on the conditions that: (a) Tenant
shall not delay or interfere with the completion of the Allowance Improvements
by the Landlord in any material respect; and (b) prior to entering the Demised
Premises the Tenant shall provide insurance coverage as required by this Lease.
Landlord shall offer the existing tenant an early termination of its lease on
December 31, 2011, instead of the normal expiration date of January 31, 2012.
The term of this Lease (hereinafter the “Term”) shall commence on the earlier
of: (a) Tenant taking occupancy of the Demised Premises for the conduct of
business operations (provided that Tenant’s access pursuant to the first
sentence hereof shall not constitute taking occupancy of the Demised Premises
for the conduct of business operations); or (b) the later of: (i) May 1, 2012
(provided that Tenant is given access to the Demised Premised by January 1,
2012, or June 1, 2012 if Tenant is given access to the Demised Premises on
February 1, 2012), or (ii) the date when Landlord achieves Substantial
Completion of the Allowance Improvements (hereinafter the “Commencement Date”);
provided that, if the Commencement Date has not occurred

 

   

 

 

by May 1, 2012 (if Landlord is able to give Tenant access to the Demised
Premised by January 1, 2012), or June 1, 2012 (if Landlord is able to give
Tenant access to the Demised Premises on February 1, 2012), then Tenant shall be
entitled to a credit equal to the difference between the fixed or base rent
Tenant required to pay to its current landlords under two of Tenant’s existing
leases in Carlstadt in the combined total amount of Four Thousand Two Hundred
Fifty Dollars ($4,250.00) per day, less one (1) day of Fixed Rent under this
Lease for each day from June 1, 2012 until the Commencement Date which shall be
applied against the first installments of Fixed Rent payable after the Rent
Commencement Date. The Term shall end on the date twelve (12) years after the
Commencement Date, unless sooner terminated or extended (if applicable) as
elsewhere provided in this Lease Agreement, a date which is estimated to be
April 30, 2022 (hereinafter the “Termination Date”).

 

2.Rent:

2.1          Fixed Rent: The Tenant hereby agrees to pay to the Landlord an
annual base or fixed rental (hereinafter, “Fixed Rent”) throughout the full Term
in the amounts set forth on Schedule “B” annexed hereto and incorporated herein
by reference in cash or check, lawful money of the United States of America, in
monthly installments, payable on the first day of each and every month, in
advance, throughout the initial Term of twelve (12) years. Rent shall commence
on the date (the “Rent Commencement Date”) which is thirty calendar days after
the Commencement Date. If the Rent Commencement Date is before or after June 1,
2012, then Schedule B shall be revised and initialed by the parties to reflect
the actual Rent Commencement Date. Fixed Rent for the first full month of the
Term after the Rent Commencement Date shall be paid in advance on the date of
execution of this Lease.

 

Fixed Rent, Supplemental and Additional Rent (which are sometimes collectively
referred to herein as “Rent”) shall be paid at the office of the Landlord or at
such other place as may hereafter be designated by the Landlord. Fixed Rent
shall be paid to the Landlord without notice or demand and without deduction,
set-off or other charge. If the Commencement Date or the Termination Date occurs
on a day other than respectively, the first day or the last day of a calendar
month, the Fixed Rent for the partial calendar month at the commencement or
termination of the Term shall be prorated based upon the number of days in that
month.

 

2.2          All monetary obligations of any and every nature, including,
without limitation security deposit obligations, owed by the Tenant to the
Landlord or to any affiliate of the Landlord who performs work or provides
services for the Tenant at the Demised Premises, including without limitation,
taxes, charges, costs, letters of credit or security deposits and expenses which
the Tenant is required to pay to third parties or to reimburse to the Landlord
hereunder, together with all interest and penalties that may accrue thereon in
the event of the Tenant’s failure to timely pay such amounts, and all damages,
costs and expenses which the Landlord may incur by reason of any default or
failure on the Tenant’s part to comply with the terms of this Lease, shall be
Rent (referred to herein as “Additional Rent”) and, in the event of nonpayment
or nonperformance of Additional Rent obligations by the Tenant, the Landlord
shall have all rights and remedies with respect thereto as the Landlord has for
the nonpayment of Rent.

 

2.3          Any sums due the Tenant from the Landlord under any of the
provisions of this Lease, or arising from or out of the Landlord’s failure to
comply with, or perform any of the terms of this Lease, shall in all cases be
enforced by Tenant by means other than deduction from Rent, and the attempt by
Tenant to deduct all or any part of the Rent due, without prior court
adjudication, shall constitute a breach of this Lease. No payment by Tenant or
receipt by Landlord of a lesser amount than any payment of Fixed, Supplemental
or Additional Rent herein stipulated shall be deemed to be other than on account
of the earliest Rent or Rents then due and payable.

 

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2.4          Tenant hereby acknowledges that late payment by Tenant to Landlord
of Fixed Rent, Supplemental Rent, and/or Additional Rent will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Landlord’s
Premises. Accordingly, if any installment of Rent t or sum due from Tenant,
under this or any other agreement between Landlord and Tenant, shall not be
received by Landlord or Landlord’s designee from Tenant when that said amount is
due, then Tenant shall pay to Landlord a late charge equal to five (5%) percent
of the amount past due, plus any reasonable attorneys’ fees and expenses of
every nature incurred by Landlord by reason of Tenant’s failure to pay Rent
and/or other charge when due hereunder. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs that Landlord will
incur by reason of the late payment by Tenant. Notwithstanding the foregoing,
Landlord shall waive the assessment of any such late charge against Tenant one
time in each consecutive twelve (12) month period (commencing on the
Commencement Date) during the Term as long as with respect to any such late
payment Tenant cures the failure to pay thereof within five (5) days after
receipt of notice from Landlord with respect to same. Acceptance of such late
charge by the Landlord shall in no event constitute a waiver of Tenant’s default
with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder. Any late payment of Fixed Rent,
Supplemental Rent or Additional Rent not accompanied by such late charge may, at
Landlord’s option be returned to Tenant and treated as if not made at all, or
else, by written notice, the unpaid late charge may be added to the next month’s
Fixed Rent. If checks issued by Tenant shall be dishonored it shall be deemed
late payment and a late charge shall apply, and if checks are dishonored on two
(2) or more occasions within any six (6) consecutive-month period, Landlord may
require, by giving written notice to Tenant that all future Rent payments are to
be made by cash, cashier’s check, electronic funds transfer or money order, and
that the tender of Tenant’s personal or corporate check will no longer be
accepted and shall not constitute payment of Rent. Any acceptance of personal or
corporate check thereafter by Landlord shall not be construed as a subsequent
waiver of said right, except as to the check so accepted.

 

2.5.         If Tenant tenders any payment to Landlord by check, same shall be
the check of Tenant. Landlord shall not be required to accept the check of any
other entity other than the Tenant. Any check received by Landlord shall be
deemed received subject to collection. If any check is mailed by Tenant, Tenant
shall post such check in sufficient time prior to the date when payment is due
so that such check will be received by Landlord on or before the date when
payment is due. Tenant assumes all risk of lateness or failure of delivery of
the mails, and no lateness or failure of the mails will excuse Tenant from its
obligation to have made the payment in question when required under this Lease
Agreement.

 

2.6.         No payment by Tenant or receipt or acceptance by Landlord of a
lesser amount than the correct Rent shall be deemed to be other than a payment
on account, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be effective to create an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance or pursue any other remedy in this Lease
or at law provided.

 

2.7.         If Tenant is in arrears in payment of Rent, Tenant waives Tenant’s
right, if any, to designate the items to which any payments made by Tenant are
to be credited, and Landlord may apply any payments made by Tenant to such items
as Landlord sees fit, irrespective of and notwithstanding any designation or
request by Tenant as to the items to which any such payments shall be credited.

 

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3.Supplemental Rent:

3.1          The parties recognize that this is a “triple-net” lease and Tenant
shall be fully responsible to pay as Supplemental Rent its Proportionate Share
(as herein defined) of all reasonable costs, charges, maintenance, and
operational expenses associated with the Landlord’s Premises, except those
specifically allocated to Landlord under Article 5 of this Lease. Therefore, and
without limitation, commencing at the Commencement Date, Tenant shall pay to
Landlord Seventy-Three and 94/100 percent (73.94 %) (“Tenant’s Proportionate
Share”) of the total costs of the following items (which payments from Tenant
are hereinafter referred to as “Supplemental Rent”):

 

A.           All real estate taxes, impositions and special assessments of every
nature imposed by any governmental authority on the Landlord’s Premises during
the Term, including land, building, and improvements thereon, but excluding any
interest fines or penalties for late payment or non payment. Said real estate
taxes shall include all real estate taxes and assessments that are levied upon
and/or assessed against the Landlord’s Premises, including any taxes which may
be levied on Rents, except that as to assessments, Landlord shall elect to pay
same over the longest period permitted by law and only the installment’s payable
during the Term, including interest, shall be added into Tenant’s calculation.
Landlord may file an appeal of the real estate taxes applicable to Landlord’s
Premises when it determines in Landlord’s reasonable discretion that the fair
market value of the Landlord’s Premises is such that a tax appeal will likely
reduce the equalized assessed value of the Landlord’s Premises by at least
fifteen (15%) percent and it is otherwise appropriate to appeal. In addition,
Landlord shall not unreasonably withhold consent to a request by Tenant that
Landlord institute an appeal of real estate taxes applicable to the Landlord’s
Premises if Tenant timely makes a request and provides Landlord with an
appraisal from a licensed, MAI appraiser in New Jersey or other evidence
reasonably satisfactory to Landlord that demonstrates that a tax appeal will
likely reduce the equalized assessed value of the Landlord’s Premises by at
least fifteen (15%) percent. If a real estate tax appeal is filed respecting the
Landlord’s Premises, Tenant shall reimburse Landlord for Tenant’s Proportionate
Share of Landlord’s reasonable costs incurred in appealing taxes and/or
assessments on Landlord’s Premises, including reasonable legal fees, expert
witness fees and other proper reasonable costs, but Tenant will not be liable to
pay a reimbursement in excess of any actual tax savings received by Tenant from
such an appeal. If any such appeal is successful, Tenant’s Proportionate Share
of any recovery applicable to the Term net of such reasonable expenses shall be
credited to Tenant’s future obligation for Supplemental Rent hereunder (or, if
such credits are less than the Tenant’s Proportionate Share of the recovery
applicable to the Term, then such excess shall be paid to Tenant within thirty
(30) days after receipt of the refund by the Landlord).

 

B.           All premiums for all policies of insurance maintained from time to
time by the Landlord with respect to the Landlord’s Premises, including:

 

(i)          Insurance against loss or damage to the Landlord’s Premises by
fire, casualty, windstorm, tornado and hail and against loss and damage by such
other, further and additional risks as may be now or hereafter embraced by an
“all-risk,” or “property damage - special form,” or equivalent form of policy of
insurance with extended coverage, including, without limitation terrorism
coverage. The amount of such insurance shall be not less than one hundred
percent (100%) of the full replacement cost (insurable value) of the insurable
improvements at the Landlord’s Premises. The determination of the replacement
cost amount and the deductible amount shall be reasonably determined by the
Landlord or as stipulated by the Landlord’s mortgage lender. Each policy may at
Landlord’s option contain inflation guard coverage insuring that the policy
limit will be increased over time to reflect the effect of inflation. This
insurance shall (x) name only Landlord and Landlord’s mortgagees, if any, as
their respective interests may appear; (y) provide that no act of Tenant shall
impede the right of Landlord or Landlord’s mortgagees, if any, to receive and
collect the insurance proceeds; and (z) provide that the right of Landlord and
Landlord’s mortgagees, if any, to the insurance

 

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proceeds shall not be diminished because of any insurance carried by Tenant for
Tenant’s own account. Tenant acknowledges that it has no right to receive any
proceeds from such insurance policy.

 

(ii)         Comprehensive General Liability Insurance against claims for
personal injury, bodily injury, death and property damage occurring on, in or
about the Landlord’s Premises in amounts not less than $5,000,000.00 per
occurrence and $5,000,000.00 in the aggregate. Landlord hereby retains the right
to periodically review the amount of said liability insurance being maintained
and to increase the amount of liability insurance in an amount consistent with
prevailing practices for similar tenancies in the geographic area of Landlord’s
Premises when Landlord deems an increase to be reasonably prudent under then
existing circumstances.

 

(iii)        If any portion of the building or improvements on Landlord’s
Premises or are situated in an area now or subsequently designated by the
Federal Emergency Management Agency (“FEMA”) as a special flood hazard area
(such as Zone A, or Zone V), flood insurance in an amount equal to the lesser
of: (i) the minimum amount required, under the terms of coverage, to compensate
for any damage or loss on a replacement basis; or (ii) the maximum insurance
available under the appropriate National Flood Insurance Administration program.
The maximum deductible shall be $1,000.00 per building or, at Landlord’s option,
a higher minimum amount consistent with requirements of FEMA or other applicable
law.

 

(iv)        During the period of any construction, renovation or alteration of
the exterior portions of the common areas of the Landlord’s Premises a completed
value, “All Risk” Builder’s Risk form, or “Course of Construction” insurance
policy in non-reporting form with replacement cost and no co-insurance, in an
amount reasonably determined by the Landlord.

 

(v)         Business income (loss of rents) insurance in amounts sufficient to
compensate Landlord for all Rent and reimbursements generated from Landlord’s
Premises during a period of eighteen (18) months.

 

(vi)        Such other insurance respecting this Lease and/or the Landlord’s
Premises or any replacements, substitutions, or additions thereto as may from
time to time be reasonably required by Landlord against other insurable hazards,
casualties or matters which at the time are commonly insured against in the case
of property similarly situated.

 

Landlord may in its sole discretion, but shall not be obligated to, adopt a plan
of self-insurance, providing and on the condition that such insurance must in
all cases be fully funded by cash escrows or letters of credit established by
the Landlord for the full amount of any self insured retention and shall utilize
excess or umbrella policies of insurance for coverage amounts over the self
insured retention, In such case, Tenant shall pay its Proportionate Share of all
premium costs for any excess insurance or umbrella policies, and of all
associated expenses, including the costs and bank fees for letters of credit,
but Tenant shall not be required to contribute to the principal cash escrow in
the amount of the self insured retention, which shall be the responsibility of
Landlord. In the event of, and to the extent that Landlord self-insures as
aforesaid, the costs and premiums payable by Tenant shall be the premiums quoted
to Landlord for substantially identical coverage to that being self-insured
except that Tenant shall have the right at any time to obtain and submit to
Landlord a quotation for insurance in compliance with this Lease and identical
in coverage amounts to that which is then being self-insured and if the
quotation obtained by Tenant is less and Landlord does not accept that insurance
as a replacement, then said lesser figure shall be the basis for Tenant’s
Proportionate Share contribution.

 

C.           All costs incurred by Landlord in good faith and in its
commercially reasonable discretion to operate, maintain, repair and replace
improvements, common areas, parking lots, sidewalks, canopies, driveways,
hallways and utility rooms, lines and facilities and other areas or things
benefiting, in common, the tenants of the Landlord’s Premises including, without
limitation, the Landlord’s Power Generation System and all related improvements
which increase the energy efficiency of the Landlord’s Premises (solar, wind,
geothermal and the like) and which reduce the

 

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carbon footprint of the Landlord’s Premises (energy efficient systems, water
conservation systems and the like). Said costs shall include, without
limitation, all of Landlord’s repair and operational obligations except as may
be expressly payable solely by Landlord under this Lease. Said costs include the
private assessment for the improvement made by Landlord to Commerce Boulevard
and Central Boulevard in 2003 assessed against all properties owned by Landlord
which is in the amount of $730.00 per annum for the Landlord’s Premises and
continues through December 1, 2013, at which time the said private assessment
shall be satisfied and shall terminate. There shall also be included any parking
charges, utilities surcharges, sewer and water charges, COAH/affordable housing
development fees or assessments applicable to the Landlord’s Premises and all
other fees, costs and charges levied, assessed or imposed by, or at the
direction of, or resulting from statutes or regulations, or interpretations
thereof, promulgated by any governmental authority in connection with use,
operation, development, repair, alteration or occupancy of the Landlord’s
Premises or the parking facilities serving the Landlord’s Premises.

 

Notwithstanding the foregoing, as to any replacement or improvement which would
constitute a capital item under generally accepted accounting principles in the
United States, Tenant shall be responsible to pay Tenant’s Proportionate Share
of that portion of the cost based upon the proportion between the useful life of
the improvements (UL) and the remaining term of the lease (RT), utilizing the
following formula: (total cost x RT)/UL. For the replacement items specifically
listed in the table below, the reimbursable share of the total cost for the
replacement to which Tenant shall be obligated to contribute its Proportionate
Share shall be based upon a proration of the useful life of each replacement
(“UL”) and the remaining portion of the Term of this Lease (“RT”).

 

No.   Replacement item   Useful life, in years (“UL”) 1.   Roof   15 2.   HVAC
units   10 3.   Pavement for parking and loading areas   10 4.   Waterproofing
or painting of exterior walls   5 5.   Loading doors   7 6.   Dock levelors   7
7.   Unit heaters   10 8.   Curbs and sidewalks   10 9.   Egress stairs   10

 

For all other replacement items not specifically mentioned in the above table,
the useful life shall be deemed to be ten (10) years. Notwithstanding the
foregoing, Tenant shall pay to Landlord the Tenant’s Proportionate Share of the
entire cost of any replacement item which amounts to less than One Thousand and
00/100 ($1,000.00) Dollars.

 

3.2          At or about the Commencement Date Landlord shall submit to Tenant a
statement of the anticipated monthly Supplemental Rent for the period between
such Commencement Date and the following January determined by Landlord in good
faith and in its commercially reasonable discretion and Tenant shall pay this
Supplemental Rent on the first day of each consecutive month concurrently with
the payment of the Fixed Rent commencing on the Rent Commencement Date. Tenant
shall continue to make said monthly payments until notified by Landlord of a
change thereof. By March 1 of each year Landlord shall give Tenant a statement
showing the total Supplemental Rent for the Landlord’s Premises for the prior
calendar year, prorated from the Rent Commencement Date. In the event the total
of the monthly payments which Tenant has made for the

 

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prior calendar year be less than the Tenant’s actual share of such Supplemental
Rent, then Tenant shall pay the difference in a lump sum within thirty (30) days
after receipt of such statement from Landlord and shall concurrently pay the
difference between the total previous monthly payments made in the then calendar
year and the total of monthly payments calculated as Supplemental Rent based on
the prior year’s experience. Any overpayment by Tenant shall be credited towards
the Rent next coming due. The actual Supplemental Rent for the prior year with
anticipated cost increases or decreases in the coming year as reasonably
determined by Landlord shall be used for purposes of calculating the anticipated
monthly Supplemental Rent for the then current year with actual determination of
such Supplemental Rent after each calendar year as above provided. In any year
in which resurfacing of any parking area is contemplated Landlord shall be
permitted to include the full anticipated cost of same as part of the estimated
increased costs for calculating the anticipated monthly Supplemental Rent for
the then current year. Even though the term has expired and Tenant has vacated
the Demised Premises, when the final determination is made of Tenant’s share of
said Supplemental Rent for the year in which this Lease terminates, Tenant shall
within ten (10) calendar days pay any increase due over the estimated
Supplemental Rent previously paid and, conversely, any overpayment made shall be
rebated by Landlord to Tenant within ten (10) calendar days, and this provision
shall survive termination for said purpose. Delay or Failure of Landlord to
submit statements as called for herein shall not be deemed to be a waiver of
Tenant’s obligation to pay all sums as herein provided. Tenant shall have the
right to audit Supplemental Rent expenses within not more than six (6) calendar
months after service of a reconciliation statement and in the event Tenant’s
audit reveals that Tenant overpaid by more than 4%, Landlord shall reimburse
Tenant for its reasonable and actual audit costs. If Tenant fails to exercise
its audit right within six (6) calendar months after service of a reconciliation
statement, Tenant shall be conclusively deemed to have accepted the billed
amounts as full and correct and shall be barred from thereafter asserting any
inaccuracy or claim for credits or refunds as only that particular year covered
by the reconciliation statement. In the event Landlord does not serve upon
Tenant a reconciliation statement showing the total Supplemental Rent for the
Landlord’s Premises for the prior calendar year within twelve (12) calendar
months after the end of the preceding calendar year: (a) Landlord shall be
conclusively be deemed to have accepted the estimated payments for that calendar
year as full and correct and shall be barred from thereafter serving a
reconciliation statement or asserting any inaccuracy or deficit between the
estimated and billed Supplemental Rent as to only that particular year for which
no reconciliation statement was timely served; and (b) unless Landlord serves a
reconciliation statement upon Tenant within thirty (30) calendar days after a
demand by Tenant served during or after the twelfth (12th) calendar month after
the close of the year in question, the Landlord shall be deemed to have served a
reconciliation statement affirming that no adjustments are due to the
Supplemental Rent paid for the preceding year, and to audit same with the same
rights as if a reconciliation statement had been properly and timely submitted
by the Landlord.

 

3.3          Notwithstanding anything to the contrary set forth herein,
Supplemental Rent shall in no event include any of the following:

 

(a)          the original construction costs of the Building and improvements to
Landlord’s Premises prior to the Commencement Date, or the Allowance
improvements, or Landlord’s Power Generation Systems installed by Landlord
pursuant to Section 6.4 through 6.12 cost of this Lease;

 

(b)          principal and interest payments of mortgage debts or other loan
obligations of Landlord, financing costs and amortization of funds borrowed by
Landlord, whether secured or unsecured and all payments of base rent (but not
taxes or operating expenses) under any ground lease or other underlying lease of
all or any portion of the Landlord’s Premises;

 

(c)          depreciation and amortization (except as set forth herein);

 

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(d)          advertising, legal and space planning expenses and leasing
commissions and other costs and expenses incurred in procuring and leasing the
Building;

 

(e)          taxes to be paid directly by Tenant, whether or not actually paid,
provided and on the condition that non-payment of such taxes does not create a
lien or encumbrance against the Landlord’s Premises or against the Tenant
improvements that become the property of the Landlord upon expiration or
termination of this Lease;

 

(f)           salaries, wages, benefits and other compensation paid to officers
and employees of Landlord, or management fees paid, for the management of the
Landlord’s Premises;

 

(g)          general organizational, administrative and overhead costs relating
to maintaining Landlord’s existence, either as a corporation, partnership, or
other entity, including general corporate, legal and accounting expenses;

 

(h)          costs and expenses, including legal fees, incurred in connection
with negotiations or disputes with employees, consultants, management agents,
leasing agents, purchasers, prospective future tenants or mortgagees of the
Building;

 

(i)           costs incurred by Landlord due to the violation by Landlord, its
employees, agents or contractors of the terms and conditions of any legal
requirements which are not the obligation of Tenant under this Lease;

 

(j)           penalties, fines or interest incurred as a result of Landlord’s
inability or failure to make payment of taxes and/or to file any tax or
informational returns when due, or from Landlord’s failure to make any payment
of taxes required to be made by Landlord hereunder before delinquency unless
caused by a failure of the Tenant to timely pay Rent due to Landlord under this
Lease in full;

 

(k)          costs incurred in the sale or refinancing of the Building;

 

(l)           income taxes of Landlord or the owner of any interest in the
Landlord’s Premises, franchise, capital stock, gift, estate or inheritance taxes
or any federal, state or local documentary taxes imposed against Landlord, the
Landlord’s Premises or any portion thereof or interest therein, except taxes
imposed in lieu of real estate taxes;

 

(m)         The cost of any items for which Landlord is reimbursed by insurance
or through warranties and the like;

 

(n)          Any costs for goods and/or services representing an amount paid to
any person, firm, corporation or other entity related to Landlord which is in
excess of the fair market value of such goods and/or services; and

 

(o)          Costs necessitated by or resulting from the negligence or willful
misconduct of Landlord, its vendors, agents, employees and/or independent
contractors.

 

4.Repairs, Maintenance Security and Surrender Obligations of Tenant:

4.1          The Tenant has examined the Demised Premises and has entered into
this Lease without any representation on the part of the Landlord as to the
present or future condition thereof, except as may be expressly set forth in
this Lease, and accepts the Demised Premises in “as is”, present condition
subject to completion of the Allowance Improvements in accordance with the terms
hereof.

 

4.2          The Tenant shall, at all times during the term of this Lease or any
renewals thereof, at its sole expense, put and maintain in thorough repair and
in good and safe condition, and shall make all necessary repairs, replacements,
renewals, alterations, ordinary and extraordinary, to the Demised Premises and
its equipment, appurtenances, pipes (servicing exclusively the Demised
Premises),, plumbing systems (servicing exclusively the Demised Premises), HVAC
systems (servicing exclusively the Demised Premises), electrical systems
(servicing exclusively the Demised Premises, but excluding the Landlord’s Power
Generation Systems ), interior finishes,

 

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interior partitions, ceilings, window glass, fixtures, and all other appliances
and appurtenances belonging thereto, however the necessity or desirability for
repairs may occur, and whether or not necessitated by wear, tear, obsolescence,
or defects, latent or otherwise. The Landlord shall contract for and keep in
effect throughout the Term maintenance contracts on the HVAC systems and the
loading dock equipment (including doors and levelers) exclusively servicing the
Demised Premises and all servicing and repairs shall be at the sole cost and
expense of the Tenant , which shall be reimbursed to Landlord as Supplemental
Rent. Notwithstanding the foregoing the Landlord shall be solely responsible at
its own cost and expense without reimbursement from Tenant through Supplemental
Rent for the cost of repairing any latent defects in the floor slab within the
Demised Premises, within the roof and roof system of the Building and within the
structural walls and elements of the Building, and for other repairs
necessitated by the breach of this Lease or the negligence of Landlord, its
employees, agents or contractors.

 

4.3          All repairs and replacements by Tenant shall be in quality and
class at least equal to the original work. On default of the Tenant in making
such repairs or replacements after notice and the lapse of the applicable grace
period (except in an emergency), the Landlord may, but shall not be required to,
make such repairs and replacements for the Tenant’s account, and the expense
thereof shall constitute and be collectible as Additional Rent, payable upon
demand.

 

4.4          The Tenant shall maintain all portions of the Landlord’s Premises
in a clean and orderly condition free of dirt, rubbish, and unlawful
obstructions, in each case resulting from Tenant’s activities or those of its
sublessees, contractors, agents and invitees.

 

4.5          The Landlord shall not be required to furnish any services or
facilities or to make any repair or alteration in or to the Demised Premises,
except as expressly set forth in this Lease. The Tenant hereby assumes the full
and sole responsibility for the condition, operation, repair, replacement,
maintenance, security and management of the Demised Premises.

 

4.6          As between Landlord and Tenant, Tenant shall be solely responsible
to monitor security conditions affecting the use of Landlord’s Premises by
Tenant, its employees, agents, contractors, subtenants and invitees (but not by
anyone other than Tenant, its employees, agents, contractors, subtenants and
invitees) and to provide all necessary security to the extent there is a legal
obligation to do so, to secure such persons or their property against negligent
or criminal acts and/or omissions of third parties, and Tenant shall indemnify,
defend and hold the Landlord harmless from all claims concerning such matters,
including, without limitation, reasonable counsel fees and litigation expenses
incurred by Landlord to defend such claims, unless resulting from the negligence
or misconduct of Landlord or its employees, agents or contractors. Nothing in
this section shall impose any obligation upon Tenant to third persons which is
not imposed under applicable law without reference to this Lease and no third
party shall be construed as a third party beneficiary of this provision of this
Lease.

 

4.7          In case any dispute shall arise at any time between the Landlord
and the Tenant as to the standard of care and maintenance of the Landlord’s
Premises, such dispute shall be determined by arbitration before a licensed
architect mutually agreed upon by Landlord and Tenant; provided that if the
requirement for making repairs or replacements is imposed by any governmental
authority or the holder of any mortgage to which this Lease is subordinate, then
such requirement for repairs or replacements shall be complied with by the
Tenant and shall not be considered an arbitratable dispute. The Tenant, however,
shall have the right to dispute or contest the validity, application, or
reasonableness of any such governmental requirement so long as Tenant pays or
bonds against any fine or lien such that no fine or lien is imposed against the
Landlord or Landlord’s Premises, and the Landlord shall afford to the Tenant
reasonable cooperation in this connection.

 

4.8          Tenant shall be solely responsible to inspect the Demised Premises
and all other portions of Landlord’s Premises used by Tenant and to immediately
upon becoming aware

 

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thereof provide written notice to Landlord of any defective or unsafe condition
which Landlord may be obligated to repair, maintain or correct.

 

4.9          Upon any termination of the Term, irrespective of the cause, the
Tenant shall timely vacate the Demised Premises, in good order and condition,
reasonable wear and tear and damage by casualty and other matters for which
Tenant is not liable hereunder excepted, with all structures, improvements
including, without limitation mechanical, electrical, plumbing, HVAC, and other
building systems in good working order, reasonable wear and tear and damage by
casualty and other matters for which Tenant is not liable hereunder excepted,
free of defects or conditions arising from deferred maintenance, in vacant,
broom clean condition, and in compliance with the provisions of Sections 9.1 and
9.2 and Schedule “D” annexed hereto. The phrase “reasonable wear and tear” as
used in this Lease shall mean conditions caused by the age and use of the
specified items provided same are regularly maintained , repaired or replaced in
the manner required by Section 4.2 of this Lease. The Demised Premises when
returned to Landlord at the end of the Term shall be a first class warehouse
office facility with all fixtures in good working order, reasonable wear and
tear and damage by casualty and other matters for which Tenant is not liable
hereunder excepted, with the exclusion of Tenant’s trade fixtures, which shall
be removed at Tenant’s sole cost and expense without damage, injury or waste to
the Demised Premises or the Landlord’s Premises (unless repaired by Tenant in
the manner required by Section 4.2 prior to the Termination Date when possession
shall be returned to Landlord). Notwithstanding any contrary interpretation
under common law, the term “trade fixtures” for all purposes in this Lease shall
not apply to alterations, additions or improvements to the HVAC, plumbing or
electrical systems at Landlord’s Premises, nor to any other alterations,
additions or improvements which are necessary for the occupancy of the
Landlord’s Premises, and all such alterations, additions and improvements shall
be treated as alterations or improvements to the Demised Premises and the
disposition of same at the end of the Term shall be controlled by the provisions
of Section 9.1 of this Lease. Any racking systems and material handling
equipment which Tenant may acquire from the prior tenant of the Demised Premises
shall be Tenant’s trade fixtures and shall be removed from the Demised Premises
at Tenant’s sole cost and expense without damage, injury or waste to the
Landlord’s Premises or any improvements thereon at the end of the Term (unless
repaired by Tenant).

 

5.Repairs and Maintenance Obligations of Landlord:

5.1          Except as otherwise provided in Section 5.2, as a common area
charge to which Tenant shall contribute its Proportionate Share in accordance
with Section 3.1(C) of this Lease, the Landlord shall make all repairs,
replacements, alterations or renewals and perform all maintenance to all
exterior walls, structural steel, the roof, landscaped areas, parking and
loading areas, common areas, sidewalks and curbs, exterior stairs for ingress
and egress, site drainage facilities, HVAC systems (other than HVAC systems
servicing a single tenant, which are the responsibility of the Tenant as
provided in Section 4.2), dock seals and/or dock shelters, dock levelers,
loading doors, and all other portions of Landlord’s Premises not specifically
listed in Article 4 as the exclusive responsibility of Tenant. Landlord shall
also perform snow and ice removal from parking, loading, and sidewalk areas as a
common area charge as to which Tenant shall contribute its Proportionate Share
in accordance with Section 3.1(C). Any repairs to the foregoing areas resulting
from the negligence or wrongful act or omission of Tenant or its agents,
employees, contractors, subtenants and/or invitees shall be at the sole cost of
the Tenant and shall be Additional Rent. At Landlord’s option, routine
maintenance for which Tenant shall reimburse Landlord Tenant’s Proportionate
Share may include, without limitation, all items noted in Schedule “C” annexed
hereto and made a part hereof. Notwithstanding anything to the contrary Landlord
shall be responsible at Landlord’s sole cost and expense, without contribution
from Tenant, to maintain the Landlord’s Power Generation Systems servicing the
Landlord’s Premises.

 

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5.2          Notwithstanding anything to the contrary Landlord shall at its sole
cost and expense, without reimbursement from Tenant as an element of
Supplemental Rent, repair and correct any latent defects in the floor slab
within the Demised Premises, in the roof and roof system of the Building and in
the structural walls and structural steel and other structural elements of the
Building.

 

5.3          Landlord shall not be liable for any failure to make such repairs
or to perform any maintenance except if the Landlord fails after written notice
from Tenant to remedy a default within the time provided under Section 13.1 and
Tenant expressly waives and releases any claims of injury to or interference
with Tenant's business arising from the making of, or failure to make, any
repairs, alterations or improvements in or to any portion of the Landlord's
Premises or the Demised Premises or in or to fixtures, appurtenances and
equipment therein. Notwithstanding the foregoing sentence, if Landlord's default
materially and adversely impairs the Tenant’s use of the Demised Premises (such
being a "Material Impairment Condition"), Tenant may serve written notice upon
the Landlord of such Material Impairment Condition. Landlord shall have one (1)
business day to commence necessary repairs and thereafter shall be obligated to
diligently prosecute such repairs to a conclusion. If Landlord defaults in its
obligation, Tenant shall have the self-help rights afforded under Section 13.1.
Landlord or its agents shall not be liable for any loss or damage to persons or
property resulting from fire, explosion, steam, gas, electricity, water or rain
which may leak from any part of the Landlord’s Premises or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurfaces or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the negligence or intentional misconduct of Landlord,
its agents, servants or employees. Landlord or its agents shall not be liable
for interference with the light, air, or for any latent defect in the Landlord’s
Premises.

 

5.4          The Landlord agrees that as of the Commencement Date the Demised
Premises shall be delivered to the Tenant in clean and first class condition
with all essential systems in good working order and with all of the Allowance
Improvements Substantially Completed, as provided at Article 40 of this Lease.
After the Substantial Completion Date, as defined in Article 40 of this Lease,
Landlord shall within a reasonable time finish any punch list items respecting
Landlord’s improvements which remain outstanding.

 

6.Utilities and Personal Property Taxes:

6.1          Tenant shall timely pay directly to all utility suppliers the cost
for all water, gas, heat, light, power, sewer charges, telephone service, fire
alarm monitoring and all other services and utilities supplied to the Demised
Premises, including without limitation hook-up and installation fees or charges,
together with any taxes thereon, and all required escrows. If any utilities are
not separately metered, Tenant shall reimburse the Landlord for its
Proportionate Share of the utility costs. All such obligations shall be
Additional Rent and in the event Tenant fails to make such payments, Landlord
shall have the remedies available for non-payment of Additional Rent.

 

6.2          In the event the Demised Premises are connected to public utilities
by means of lines passing through the Landlord’s Premises outside the Demised
Premises, it shall be the Landlord’s responsibility to maintain said lines as a
Tenant common area expense to which Tenant shall contribute its Proportionate
Share under Section 3(C) of this Lease, provided however that Landlord’s
responsibility shall not extend further than to repair any breaks or
obstructions in said lines with reasonable dispatch after being advised of same,
and to refrain from any negligent action to cause any such break or obstruction.
Tenant’s repair responsibility in respect to any such lines shall be limited to
their entry into the Demised Premises, provided however Tenant shall pay
Tenant’s Proportionate Share of the cost of any exterior repairs performed by
Landlord. In no event shall Landlord be responsible for any interruption of
service of any utility to the Demised Premises

 

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occurring by reason of any act or condition not caused by Landlord’s (or its
employees’, agents’ or contractors’) negligence or willful misconduct, and there
shall be no abatement of any payments due from Tenant to Landlord hereunder by
reason of any such interruption; provided that, in the case of a “Material
Impairment Condition” the Tenant shall have the rights granted under Section 5.3
and Section 13.1 of this Lease.

 

6.3          Tenant shall pay, or cause to be paid, before delinquency, any and
all taxes levied or assessed and which become payable during the term hereof
upon all Tenant’s leasehold improvements, equipment, furniture, fixtures, and
any other personal property located in the Demised Premises. In the event any or
all of the Tenant’s leasehold improvements, equipment, furniture, fixtures and
other personal property shall be assessed and taxed with the Landlord’s
Premises, Tenant shall pay to Landlord such taxes applicable to Tenant’s
property within ten (10) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant’s property.

 

7.Tenant Responsible for Damage to Glass or Other Property:

7.1          Without limiting the scope of Article 4 of this Lease in case of
the destruction of or any damage to the glass in the Demised Premises, or the
destruction of or damage of any kind whatsoever to the Demised Premises, the
Tenant shall repair the said damage or replace or restore any destroyed parts of
the Demised Premises, as provided in Section 4.2 (subject to repairs and
restoration that are the Landlord’s responsibility pursuant to Articles 4, 5 and
19), and shall be entitled to reimbursement of costs from any insurance proceeds
paid and collected for such damage or loss.

 

8.Use of Demised Premises:

8.1          The Demised Premises shall be used and occupied only as a
warehouse/ and office facility (with incidental related uses) and for no other
use or purpose without Landlord’s prior written consent, which consent shall not
be unreasonably withheld. Tenant shall not use or permit the use of the Demised
Premises or any part thereof in any way which would violate any certificate of
occupancy for the Demised Premises, or any of the covenants, agreements, terms,
provisions and conditions of this Lease or for any unlawful purposes, or in any
unlawful manner and Tenant shall not suffer or permit the Demised Premises or
any part thereof to be used in any manner, or anything to be done therein, or
suffer or permit anything to be brought into or kept in the Demised Premises
which, in the reasonable judgment of Landlord, shall in any way impair or
interfere with the proper and economic heating, cleaning, air conditioning or
other servicing of the Landlord’s Premises, or impair or interfere with the use
of any of the other areas of the Landlord’s Premises; provided that, in no event
shall the foregoing prevent tenant from using the Demised Premises as a
warehouse/ and office facility.

 

8.2          If any governmental license or permit, including, without
limitation, a certificate of occupancy shall be required for the proper and
lawful conduct of Tenant’s business or other activity carried on in the Demised
Premises, and if the failure to secure such license or permit would, in any way,
affect Landlord, Tenant, at Tenant’s expense, shall duly procure and thereafter
maintain such license or permit and submit the same to inspection by Landlord.
Tenant, at Tenant’s expense, shall, at all times, comply with the terms and
conditions of each such license or permit. Landlord shall obtain and deliver to
Tenant an Occupancy Certification and Certificate of Occupancy respectively from
the New Jersey Meadowlands Commission and the Borough of Carlstadt at the
Commencement Date and thereafter, if a further Certificate of Occupancy or
Occupancy Certification is required due to alterations or work at the Demised
Premises by Tenant (other than the Allowance Work for which Landlord shall
obtain all required Licneses, permits and certificates), the Landlord will
provide reasonable assistance to the Tenant in obtaining such a Certificate of
Occupancy or Occupancy Certification with Tenant to pay the governmental fee.

 

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8.3          Tenant shall not do, nor permit to be done, anything in connection
with its occupancy of the Demised Premises which will cause a cancellation or
non-renewal of any insurance policy covering said Landlord’s Premises, or
otherwise render Landlord’s Premises uninsurable.

 

8.4          Tenant shall not permit injury to the Demised Premises or to the
Landlord’s Premises outside the Demised Premises by any action such as (1)
Concentrating loads on floors, roofs or any other area beyond their capacity,
(2) Depositing, or permitting the deposit of any item or substance into storm or
sanitary sewer lines which might obstruct or damage same, (3) Discharging
excessive quantities of water or any quality of effluent which might overtax or
damage the sewer system or plant serving the Landlord’s Premises, (4) Making or
permitting any installation or hole in any roof, exterior walls, floor, or
outside area, without prior written permission from Landlord, (5) Producing any
vibration liable to damage or weaken the structure of the Demised Premises or of
the Landlord’s Premises or to undermine the ground supporting same.

 

8.5          Tenant shall not use or allow the Demised Premises to be used for
any, unlawful purpose; nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Demised Premises; nor shall Tenant take actions which shall
impair or cause revocation of any tax credits or abatements now or hereafter in
effect for the Landlord’s Premises.

 

8.6          Tenant shall not commit or allow to be committed any physical waste
in or upon the Demised Premises.

 

8.7          Tenant shall not use the Demised Premises or permit anything to be
done in or about the Demised Premises, which will in any way conflict with any
applicable law, statute, ordinance or governmental rule or regulation now in
force or which may hereafter be enacted or promulgated. Tenant shall, at its
sole cost and expense, promptly comply with all applicable laws, statutes,
ordinances and governmental rules, regulations or requirements now in force or
which may hereafter be in force and with the requirements of any board of fire
underwriters or other similar bodies now or hereafter constituted relating to or
effecting the condition, use or occupancy of the Demised Premises. The judgment
of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact as between the Landlord and
Tenant.

 

8.8          Tenant warrants and guarantees that its North American Industry
Classification Number (NAICS) is 493110, that the Tenant shall not use or permit
the Demised Premises to be used as an Industrial Establishment as defined by the
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq. or any rules and
regulations promulgated thereunder (collectively, “ISRA”), and that no explosive
or highly flammable materials shall be stored, used, generated or disposed of at
the Demised Premises.

 

8.9          Tenant warrants and guarantees that it is not now, and shall not be
at any time throughout the Term, an entity with which a citizen of the United
States is prohibited from transacting business by the Office of Foreign Assets
Control, Department of the Treasury (“OFAC”), including, without limitation, the
executive orders and/or lists published by OFAC. Tenant is and throughout the
Term shall remain in compliance with all applicable provisions of the USA
Patriot Act of 2001, Pub. L. No. 107-56, the Bank Secrecy Act of 1970, as
amended, 31 U.S.C. Section 5311 et seq., the Trading with the Enemy Act, 50
U.S.C. App. Section 1 et seq., the International Emergency Economic Powers Act,
50 U.S.C. Section 1701 et seq., and the sanction regulations promulgated
pursuant thereto by OFAC, or laws relating to prevention and detection of money
laundering, 18 U.S.C. Sections 1956 and 1957.

 

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8.10        Tenant shall not use, nor have access to the roof of the Demised
Premises without Landlord’s prior consent in each instance, which consent may be
withheld by Landlord in its sole and absolute discretion.

 

8.11        Landlord represents and warrants that (a) the use and occupancy of
the Demised Premises for the uses permitted hereunder does not conflict with any
law, statute, ordinance or governmental rule or regulation now in force or any
easements, covenants, restrictions, agreements or encumbrances affecting title
to the Demised Premises, (b) a permanent certificate of occupancy for the
Demised Premises as they will exist on the Commencement Date is, or prior to the
Commencement Date will be, in force and will not be violated by the use and
occupancy of the Demised Premises for the uses permitted hereunder, (c) all
other licenses and permits required for Tenant’s use and occupancy of the
Demised Premises (other than any license or permit required for the conduct of
Tenant’s particular business) is, or prior to the Commencement Date will be, in
force and will not be violated by the use and occupancy of the Demised Premises
for the uses permitted hereunder, and (d) on the Commencement Date, the heating,
ventilating, air condition, plumbing, electrical, mechanical and other systems
serving the Demised Premises will be in good working order, repair and
condition, and the roof will be free of leaks.

 

9.Alterations and improvements:

9.1          Tenant shall not make any alterations, decorations, additions or
improvements, in or to the Demised Premises without first obtaining Landlord’s
written consent thereto, which consent may be arbitrarily withheld with respect
to any proposed structural alterations or additions, but shall not be
unreasonably withheld as to other alterations or additions; provided that no
consent shall be required for purely decorative alterations, or other
non-structural alterations which do not affect any building systems costing, in
the aggregate, less than $200,000 provided that for any non-structural
alterations or improvements not affecting any building systems having a value in
the aggregate of more than $50,000 Tenant shall provide the Landlord with a copy
of all permits and plans and specifications for such alterations and
improvements before the work commences, and a copy of all governmental
inspections and approvals upon completion of such work. Landlord may in its sole
and absolute discretion provide notice to the Tenant not later than three (3)
months prior to expiration of the Termination Date that Landlord elects to
assume ownership of any or all of such alterations, decorations, additions or
improvements, in which case such items shall become the property of the Landlord
upon expiration of the Term and shall be turned over to Landlord in good
condition and repair, reasonable wear and tear, damage by casualty, and other
matters which are not Tenant’s responsibility hereunder excepted. If Landlord
does not elect to assume ownership by notice to Tenant as provided in the
preceding sentence, all alterations, decorations, additions or improvements upon
the Demised Premises made by either party (including, but not limited to,
paneling, partitions, railings, and the like), shall be removed from the Demised
Premises and the Demised Premises shall be restored to substantially the same
condition as at the Commencement Date at the end of the Term, in the manner
hereinafter provided at the sole cost of the Tenant. Notwithstanding the
foregoing, the Tenant shall not be required to remove those Allowance
Improvements located within the existing office areas of the Demised Premises.
Tenant shall at Tenant’s sole cost and expense engage competent contractors
reasonably acceptable to the Landlord to remove all alterations, decorations,
additions and improvements and to restore the Demised Premises and deliver same
to Landlord on the Termination Date in accordance with the attached Schedule “D”
(all such work hereinafter referred to as the “Restoration Work”) at Tenant’s
expense; except that in the case of Restoration Work that involves structural
work to the Building or work to areas outside of the Demised Premises, Tenant
shall, at the Landlord’s option in Landlord’s sole discretion, either: (a) pay
the Landlord the reasonable cost to perform the structural work at Tenant’s sole
cost and expense; or (b) Tenant shall at Tenant’s expense

 

 17 

 

 

engage competent contractors reasonably acceptable to the Landlord to complete
the structural or exterior restoration work..

 

9.2          If, because of any acts or omission of Tenant or anyone claiming
through or under Tenant, any mechanic’s or materialmen’s notice of intention or
mechanic’s or materialmen’s or other lien or order for the payment of money
shall be filed against the Demised Premises, the Landlord’s Premises, or against
Landlord (whether or not such lien or order is valid or enforceable as such),
Tenant shall, at Tenant’s own cost and expense, cause the same to be canceled
and discharged of record (by payment, bonding or otherwise) within thirty (30)
days after the date of filing thereof, and shall also indemnify and save
harmless Landlord from and against any and all costs, expenses, claims, losses
or damages, including reasonable counsel fees, resulting therefrom or by reason
thereof. If any governmental charge or assessment, including, without limitation
COAH affordable housing fees and/or assessments are imposed as a result of any
of Tenant’s repairs, replacements or alterations in or to the Demised Premises,
same shall be satisfied in full by Tenant as and when due.

 

9.3          In the event Tenant makes any repairs, replacements, or alterations
in or to the Demised Premises, any contractors or subcontractors employed by
Tenant shall not be reasonably objectionable to Landlord. Tenant’s contractor(s)
must only use such labor as will not result in jurisdictional disputes with any
labor unions or in strikes against or involving the Landlord or Landlord’s
Premises. Tenant will inform Landlord, in writing, of the names of contractors
and/or subcontractors Tenant proposes using to do work in its behalf in or about
the Demised Premises at least seven (7) days prior to the beginning of any
permitted work. Landlord reserves the right to reject any and all of the
proposed contractors and/or subcontractors if a conflict would be likely to
exist in Landlord’s reasonable judgment. In the event of any strike or dispute,
Tenant will cause any persons involved in such work to leave the Demised
Premises immediately after receipt of notice from Landlord demanding the same.

 

9.4          Providing that it can do so at no incremental cost, all
improvements and alterations to the Landlord’s Premises made by or on behalf of
Tenant shall to the extent reasonably practicable be designed to preserve and
promote any sustainable or green building certification(s) now existing or
hereafter obtained by the Landlord in its discretion for the Landlord’s
Premises, including without limitation, LEED certifications, Green Globe
certifications of the Green Building Initiative, ASHRAE 90.1-2007 certification,
Energy Star certifications and certifications under similar recognized standards
promulgated by governmental entities or widely recognized private organizations.

 

9.5          Landlord shall respond to any request for consent to an alteration
not later than thirty (30) days after receipt of Tenant’s written request for
such consent. In the event that Landlord fails to respond to Tenant’s request
for consent to an alteration within twenty (20) days after Landlord’s receipt of
such request, then from and after such twenty (20) day period, Tenant shall have
the right to deliver a reminder notice to Landlord requesting Landlord’s consent
to such alteration, which reminder notice shall state in bold upper case letters
at the top of the first page as follows: “THIS IS A TIME SENSITIVE NOTICE AND IF
LANDLORD SHALL FAIL TO TIMELY RESPOND, LANDLORD SHALL BE DEEMED TO HAVE APPROVED
TENANT’S REQUEST.” If Tenant shall have delivered such reminder notice to
Landlord, and Landlord shall fail to respond to such reminder notice within ten
(10) days after Landlord’s receipt of such reminder notice, then Landlord shall
be deemed to have consented to the alteration in question.

 

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10.Laws and Ordinances:

10.1        Subject to Section 10.3, Tenant shall promptly comply with the
statutes, ordinances, rules, order, regulations and requirements of the Federal,
State and Municipal governments and of any and all their departments and bureaus
applicable to the Demised Premises, for the correction, prevention and abatement
of nuisances, violations or other grievances in, upon or connected with said
Demised Premises during said term, arising from, incident to, or connected with
the use and occupation of the Demised Premises by the Tenant. The Tenant shall
also promptly comply with all reasonable rules, orders and regulations of the
Board of Fire Underwriters for the prevention of fires, at its own cost and
expense, arising from, incident to or connected with the use and occupation of
said Demised Premises by the Tenant.

 

10.2        Subject to Section 10.3, Tenant shall, at Tenant’s own expense,
comply with the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq. and with
the Spill Compensation and Control Act (N.J.S.A. 58:10-23-11 et seq.) (“the
Acts”) and all regulations promulgated pursuant to the Acts. Tenant shall, at
Tenant’s own expense, provide all information within Tenant’s control requested
by Landlord or the Bureau of Industrial Site Evaluation for the preparation of
submissions, declarations, reports and plans pursuant to the Acts. If the New
Jersey Department of Environmental Protection (DEP) shall determine that a
clean-up plan or Remedial Action Work plan be prepared and that a clean-up be
undertaken because of any spills or discharges of Hazardous Substances caused by
Tenant’s officers, directors, employees, agents or invitees, or by other parties
under Tenant’s authority or control or which are otherwise the fault or
responsibility of Tenant at the Landlord’s Premises which occur during any
period when Tenant was an occupant, then all such work shall be completed at
Tenant’s sole cost and expense in the manner provided at Section 28.4 of this
Lease. Tenant shall indemnify, defend and save the Landlord harmless from all
fines, suits, procedures, claims and actions of any kind arising out of or in
any way connected with any spills or discharges of Hazardous Substances caused
by the Tenant’s or other parties under Tenant’s authority or control at the
Landlord’s Premises which occur during the term of Tenant’s occupancy. Tenant’s
obligations and liability under this paragraph shall survive and shall continue
so long as Landlord remains responsible for any spills or discharges of
hazardous substances or wastes at the Landlord’s Premises which occur during the
term of Tenant’s occupancy.

 

10.3        Landlord warrants to the Tenant that as of the Commencement Date the
Landlord’s Premises (including the Demised Premises) shall be in compliance with
all statutes, ordinances, rules, order, regulations and requirements of the
Federal, State and Municipal governments and of any and all their departments
and bureaus applicable to the Landlord’s Premises and that the Landlord’s
Premises shall be in compliance with all Environmental Laws (as defined in
Section 28.1). Landlord shall indemnify, defend and save the Tenant harmless
from all fines, suits, procedures, claims and actions of any kind arising out of
or in any way connected with any spills or discharges of Hazardous Substances at
the Landlord’s Premises which occur prior to the Commencement Date or which are
not Tenant’s responsibility pursuant to Section 10.2, other than as a result of
any action or omission on the part of the Tenant, or its agents, servants,
contractors or employees. Landlord’s obligations and liability under this
Section 10.3 shall survive and shall continue so long as the Tenant remains
responsible for any such spills or discharges of Hazardous Substances at the
Landlord’s Premises.

 

11.Insurance:

11.1        Effective as of the date Tenant is first granted the right to enter
the Landlord’s Premises and throughout the Term of this Lease, Tenant shall
maintain, at its sole cost and expense, general public liability insurance (also
known as commercial general liability insurance) against claims for personal
injury, death or property damage, with limits of not less than Five Million

 

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($5,000,000.00) Dollars Combined Single Limit (“CSL”) in respect of bodily
injury and property damage. A combination of commercial general liability
coverage and umbrella liability coverage is acceptable to comply with this
limit.

 

11.2.       The Landlord shall carry for the benefit of the Landlord, fire
insurance, business interruption insurance for loss of Rents, and flood
insurance in an amount equal to the replacement value of the building and not
less than the requirements of any mortgagee holding a mortgage on the Landlord’s
Premises. Landlord shall be named as insured and loss payee under said policy.
Tenant shall pay to the Landlord Tenant’s Proportionate Share of the cost of
said insurance in the manner provided at Article 3 of this Lease.

 

11.3        Landlord may carry commercial general liability insurance, in
addition to Tenant’s commercial general liability insurance requirement under
Section 11.1, naming Landlord as the insured. Tenant shall be required to pay as
Supplemental Rent Tenant’s Proportionate Share of the cost of Landlord’s
policies of insurance under this Section 11.3.

 

11.4        All insurance required to be maintained by the Tenant shall be
issued by insurers with a rating of A- X or better by Best’s Insurance Key
Rating Guide published by A. M. Best Company, which are licensed in New Jersey.
Throughout the Term not less than thirty (30) days prior to the expiration dates
of all expiring insurance policies Tenant shall deliver to Landlord original
policies or, if applicable, certificates of insurance under Section 11.6, for
replacement insurance policies in compliance with this Article 11. Within
fifteen (15) days after the premium on each such policy or contract shall become
due and payable and the amount thereof determined, such premium shall be paid by
the Tenant and the Landlord shall be furnished with satisfactory evidence of
such payment.

 

11.5        All policies of insurance required to be maintained by the Tenant
shall name the Tenant as the insured and shall name the Landlord and Landlord’s
lender(s) as additional insureds as their respective interests may appear. All
such policies shall contain an agreement by the insurers that such policies
shall not be canceled or materially changed without at least thirty (30) days
prior written notice to the Landlord; provided that if a 30 day notice is not
obtainable without additional premium cost to Tenant, then the longest period
available, if any, without additional premium cost to Tenant shall be provided,
and, further, if only an agreement “to endeavor” to provide notice is available
then same shall be provided, but if no such agreement will be provided, Tenant
shall not be deemed in breach of this provision. Tenant shall provide at least
thirty (30) days written notice to the Landlord prior to cancelation or material
change in such policy(ies) of insurance.

 

11.6        Tenant may carry the insurance referred to in Section 11.1 of this
Lease under any blanket policy of insurance or policies issued by its present or
future insurance carriers. If the Tenant elects to provide insurance as herein
set forth under any blanket policy or blanket coverage, the Landlord will be
provided with evidence of such insurance in the form of an Accord 27 or
equivalent certificate of insurance together with proof of payment of the
premium and, subject to Section 11.5, said certificate or certificates shall
provide that the Landlord shall receive written notice from the insurer prior to
cancellation or material change in the coverage as provided in Section 11.5. All
of Tenant’s policies of insurance shall be primary notwithstanding that coverage
may also exist under a policy held by Landlord.

 

11.7        If Tenant fails to timely obtain, maintain, pay premiums and deliver
to Landlord proof of such actions within the time and in the manner required by
this Article 11, the Landlord may, on three (3) business days notice to Tenant,
procure any such insurance or insurances and/or pay the premiums and other
charges incidental thereto, and any and all amounts so paid by the Landlord,
together with interest thereon from the date of such payment at the rate of
eighteen (18%) per cent per annum, shall be Additional Rent hereunder.

 

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11.8        In the event Tenant’s use and occupancy of the Demised Premises
(other than use or occupancy for the uses permitted hereunder) causes any
additional charge or increase in the insurance premiums on the Landlord’s
Premises, in excess of those rates which would normally be imposed for insuring
a non-combustible building of similar construction, Tenant shall, from time to
time, immediately upon receipt of notice from Landlord, do whatever is
reasonably deemed necessary, and follow whatever reasonable recommendations may
be made by the Landlord, in order that such excess charge or increase in
insurance premiums may be removed and the lower premium rate restored; or, in
the event conditions are such that nothing can be done by way of improvements or
otherwise to remove such increased insurance premiums, or if the expense
involved is excessive, then Tenant shall pay the full amount of such additional
charges or increases in premium on demand as Additional Rent.

 

11.9        All policies of insurance required to be obtained by Tenant pursuant
to this Lease shall be written by licensed insurance companies authorized to do
business in New Jersey. All certificate of insurance, shall be delivered to
Landlord within 10 days after issuance thereof.

 

11.10      Tenant and Landlord shall obtain waivers of subrogation for the
benefit of one another, from any company issuing any policy of insurance
obtained by either of them for or in connection with Tenant’s use or occupancy
of the Demised Premises, the Landlord’s Premises or which may be obtained in
accordance with the provisions of this Lease.

 

12.Landlord’s Liability:

12.1        The Landlord shall not be liable for any personal injury to any
person, including the Tenant or to its officers, agents, employees, contractors
or invitees or for any damage to any property of any person, including the
Tenant, irrespective of how such injury or damage may be caused, whether from
action of the elements, or acts of negligence of or occupants of adjacent
properties, or other causes, except if caused by or resulting from the
Landlord’s (or its employees’, agents’ or contractors’) willful malfeasance or
negligence . Under no circumstances shall Landlord or Tenant be liable for
consequential damages, such as, but not limited to, loss of profits, injury to
good will or intangible business interests or property, and each of Landlord and
Tenant expressly waives and releases any and all such claims no matter how they
arise; provided however that nothing herein limits the right of Landlord to
recover lost Rent resulting from Tenant’s breach of this Lease or loss of rents
from a new Tenant in the event of an unauthorized hold-over beyond the
Termination Date notwithstanding that all or a portion of such amounts might be
considered to be lost profits..

 

12.2        Tenant hereby waives all claims against Landlord for damages to
goods, equipment, improvements, wares, and merchandise in, upon or about the
Demised Premises and for injuries to Tenant, its agents or third persons in or
about the Demised Premises, from any cause arising at any time, except if both
uninsured and caused by Landlord's willful malfeasance or negligence.

 

12.3        The term “Landlord” as used in this Lease shall be limited to mean
and include only the owner or owners at the time in question of the Landlord’s
Premises and in the event of any transfer or transfers of the title to the
Landlord’s Premises, the then Grantor shall be automatically freed and relieved
from and after the date of such conveyance or transfer of all liability for the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed, provided that the Grantee expressly
assumes such obligations and any funds then in the hands of such Grantor, in
which Tenant has an interest, shall be delivered to the Grantee.

 

 21 

 

 

12.4        Tenant agrees that it shall look solely to the estate and equity of
the Landlord in the Landlord’s Premises (and the rents and proceeds thereof) for
the collection of any judgment (or other judicial process) against the Landlord
or any predecessor Landlord in the event of any default or breach by Landlord
with respect to any of the terms, covenants and conditions of this Lease to be
observed and/or performed by Landlord and/or any other cause of action against
the Landlord, and no other assets of Landlord or any predecessor Landlord shall
be subject to levy, execution or other procedures for the satisfaction of
Tenant’s remedies. Tenant irrevocably waives and releases Landlord from any
claims in excess of such interest in the Landlord’s Premises (and the rents and
proceeds thereof).

 

12.5        Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either party against the other on any
matter whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, and Tenant’s use or occupancy of the
Demised Premises, including, without limitation, any claim of injury or damage,
and any claim of breach of Lease or other obligation and other statutory remedy
with respect thereto. Tenant shall not interpose any counterclaim of any kind
(other than any compulsory counterclaim) in any action or proceeding commenced
by Landlord to recover possession of the Demised Premises, but Tenant may bring
any claim against landlord in a separate proceeding.

 

13.Default of Landlord:

13.1        Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord specifying
wherein Landlord has failed to perform such obligation; provided, however, that
if the nature of Landlord’s obligation is such that more than thirty (30) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such 30-day period and thereafter diligently
prosecutes the same to completion. In no event shall Tenant have the right to
terminate this Lease as a remedy for a Landlord default. Notwithstanding the
foregoing, in emergency circumstances where the failure to repair or replace
would result in a Material Impairment Condition (defined at Section 5.3) and it
is impracticable to give Notice to the Landlord and permit Landlord to carry out
the repair pursuant to Section 5.3, then Tenant shall have the right to perform
Landlord’s obligations and be reimbursed for the reasonable cost thereof, if
applicable, as a common expense or, otherwise at Landlord’s sole expense, so
long as Tenant provides Landlord with notice thereof promptly after performing
such obligations. If Landlord defaults in its obligation to reimburse Tenant for
such costs, Tenant shall have the right to file an action in the Superior Court
of New Jersey to recover such costs with interest at the rate specified in
Section 11.7 of this Lease, and the prevailing party in such an action shall be
entitled to recover and reasonable attorneys’ fees, expert witness fees and
costs of suit in such action.

 

14.Default of Tenant:

14.1        If Tenant shall be late in the payment of any installment of Fixed
Rent or any regular monthly installment of Supplemental Rent and if such breach
shall continue for seven (7) days, Tenant shall be conclusively deemed to be in
material breach of this Lease. Notwithstanding the foregoing, before Landlord
through legal action re-enters and resumes possession of the Demised Premises as
a result of such non-payment, Landlord agrees that with respect to the first
three (3) occasions of such default in any twelve month period Landlord shall
serve Tenant with written notice of the default and allow Tenant one (1)
business day from the date of service of the notice to cure the default by
payment by wire transfer or bank check of the full amount due with any late fee
which may have accrued as a result of such default.

 

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14.2        If Tenant shall be late in the payment of any payment of
Supplemental Rent (other than regular monthly installment payments covered by
Section 14.1) or any Additional Rent, or shall fail to post any portion of the
Security Deposit or otherwise breach Article 25 of this Lease, and if such
breach shall continue for fifteen (15) days after Landlord shall have served
Tenant with an invoice or written notice of the amount due, Tenant shall be
conclusively deemed to be in material breach of this Lease. Notwithstanding the
foregoing, before Landlord through legal action re-enters and resumes possession
of the Demised Premises as a result of such non-payment, Landlord agrees that
with respect to the first three (3) such defaults in any twelve month period
Landlord shall serve Tenant with written notice of the default and allow Tenant
one (1) business day from the date of service of the notice to cure the default
by payment by wire transfer or bank check of the full amount due with any late
fee which may have accrued as a result of such default.

 

14.3        If, during the term of this Lease, (a) Tenant shall make an
assignment for the benefit of creditors, or (b) a voluntary petition be filed by
Tenant under any law having for its purpose the adjudication of Tenant a
bankrupt, or the extension of time for payment, composition, adjustment,
modification, settlement or satisfaction of the liabilities of Tenant or the
reorganization or liquidation of Tenant, or (c) a receiver be appointed for the
property of Tenant by reason of the insolvency or alleged insolvency of Tenant,
or if (d) any department of the state or federal government or any officer
thereof or duly authorized Trustee or Receiver shall take possession of the
business or property of the Tenant or if (e) an involuntary petition be filed
against Tenant under any law having for its purpose the adjudication of Tenant
as a bankrupt, or for the liquidation of Tenant; and (except with respect to
items (a) and (b), supra, which shall be non-curable events of default) if same
have not been removed, cured or discharged within sixty (60) days; or if (f) any
Receiver or Trustee pursuant to any bankruptcy or insolvency law, whether
Federal or State, shall attempt to thereafter assign this Lease to any party or
attempt to sublet all or any part of the Demised Premises, then Tenant shall be
conclusively deemed to be in material breach of this Lease.

 

14.4        If (a) Tenant shall default in the performance or observation of any
other agreement or condition (other than payment of Rent or Additional Rent) on
its part to be performed or observed, and if Tenant shall fail to cure said
default within thirty (30) days after notice of said default by Landlord (or, in
the case of a default not susceptible of a cure within thirty (30) days, if
Tenant shall fail to commence a cure within thirty (30) days and diligently
complete such cure within a reasonable time); or (b) if Tenant shall make
default with respect to any other Lease between it and Landlord; or (c) in the
event Tenant is more than seven (7) days late in respect to any three (3)
months' Rent due hereunder, which three (3) months fall within a consecutive
6-month period, then, in any of said cases, (notwithstanding any waiver of any
former breach of agreement or condition or waiver of the benefit hereof or
consent in a former instance), Tenant shall be conclusively deemed to have
materially breached this Lease.

 

14.5        In the event of any material breach by Tenant, Landlord may (a)
permit Tenant to remain in possession and sue for all Rents, damages, attorneys’
fees and collection costs as due; or (b) terminate this Lease by written
declaration, but allow Tenant to remain in possession as Tenant at Will and sue
Tenant for all Rents, damages, attorneys’ fees and collection costs as due; or
(c) Landlord may immediately, or at any time thereafter, through legal process,
re-enter and resume possession of the Demised Premises and remove all persons
and property therefrom either by summary dispossess proceedings or by a suitable
action or proceeding at law or in equity, or in the case of permanent
abandonment of the Demised Premises by the Tenant by peaceful self-help, without
being liable for any damages therefor (no re-entry by the Landlord shall be
deemed an acceptance of a surrender of this Lease unless accompanied by a
written declaration signed by Landlord to that effect); or (d) upon re-taking
possession, keep the Demised Premises vacant (subject to reasonable efforts at
mitigation of Landlord’s damages) and recover from Tenant all Rents, damages,
attorneys’ fees and

 

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collection costs as hereinafter provided; or (e) upon re-taking possession
Landlord may, as Tenant’s agent and without effecting Tenant’s liability
hereunder, relet the whole or any part of the Demised Premises for a period
equal to, or greater, or less than the remainder of the then term of this Lease,
at such rental and upon such terms and concessions as Landlord shall deem
reasonable, to any lessee or lessees which it may deem suitable and satisfactory
for any use and purpose which it may deem appropriate. In no event shall the
Landlord be liable in any respect for failure to relet the Demised Premises or
in the event of such reletting, for failure to collect the rent thereunder. Any
sums received by the Landlord on a reletting for any monthly installment of rent
in excess of the Rent reserved in this Lease shall belong to Landlord. Without
liability to Tenant or any other party and without constituting a constructive
or actual eviction, Landlord may suspend or discontinue furnishing or rendering
to Tenant any work then being performed by Landlord for Tenant, wherever
Landlord is obligated to furnish or render the same, so long as Tenant is in
material default under this Lease.

 

14.6        Delinquent Fixed Rent and Additional Rent not paid within ten days
after its due date shall bear interest at the lower rate of either twelve (12%)
per cent per annum or the maximum rate permitted by law, from the date on which
it is due until the date on which it is paid; provided that landlord agrees to
waive such interest the first time Tenant is so delinquent in any 12 month
period. This provision shall not relieve Tenant from any payment of Fixed Rent,
late charges or Additional Rent at the time due and in the manner specified
herein.

 

14.7        Tenant hereby expressly waives the service of notice of intention to
re-enter as provided for in any statute and also waives any and all rights or
equity of redemption in case the Tenant shall be dispossessed by a Court. The
terms “enter,” and “re-enter,” “entry,” or “re-entry,” as used in this Lease,
are not restricted to their technical legal meaning.

 

14.8        The termination of this Lease by reason of Tenant’s default
hereunder shall not in any circumstance operate to relieve the Tenant from
liability for performance of all of its obligations hereunder. Upon any such
termination of this Lease, Tenant covenants that it will quit and surrender the
Demised Premises and deliver possession thereof to Landlord.

 

14.9        No waiver by the Landlord or the Tenant of any default or breach by
the other party shall constitute or be construed as a waiver of any other or
future default or breach, nor shall lapse of time after breach or default by a
party before the wronged party shall exercise its rights hereunder operate to
defeat the right of such party. No waiver by either party shall be effective
unless in writing.

 

14.10      The acceptance by Landlord of Rent or other charges from Tenant (in
whole or in part) after any default or breach by Tenant of any lease clause or
covenant, even though known to Landlord, shall not constitute a waiver of the
default/breach. The acceptance by Landlord of Rent or other charges from Tenant
(in whole or in part) shall not be deemed an accord and satisfaction in respect
of any claims of Landlord against Tenant, notwithstanding the payment check or
accompanying letter may bear a legend or endorsement to the contrary. The
acceptance of payment as above shall not affect any notice of default or any
action or proceedings or judgment or order taken in consequence of the default.

 

14.11      In the event of a breach or threatened breach on the part of Tenant
or Landlord with respect to any of the covenants, agreements, terms, provisions
or conditions on the part of or on behalf of such party to be kept, observed or
performed, both parties shall also have the right of injunction. The specified
remedies to which either party may resort hereunder are cumulative and are not
intended to be exclusive of any other remedies or means of redress to which
either may lawfully be entitled at any time, and either party may invoke any
remedy allowed at law or in equity as if specific remedies were not herein
provided for, so long as such remedies have not been waived by the terms of this
Lease.

 

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14.12      In the event of (1) the termination of this Lease under the
provisions of Article 14 hereof, (2) the re-entry of the Demised Premises by
Landlord under the provisions of this Article 14, or (3) the termination of this
Lease (or re-entry) by or under any summary dispossess or other proceeding or
action or any provision of law by reason of default hereunder on the part of
Tenant, Landlord shall be entitled to retain all moneys, if any, paid by Tenant
to Landlord, whether as advance Rent, security or otherwise, but such moneys
shall be credited by Landlord against any Rent due from Tenant at the time of
such termination or re-reentry, or at Landlord’s option, against any damages
payable by Tenant under this Lease or pursuant to law.

 

14.13      In the event of any termination of this Lease under the provisions of
Article 14 or in the event that Landlord shall re-enter the Demised Premises
lawfully or in the event of the termination of this Lease (or of re-entry) by or
under any summary dispossess or other proceeding or action or any provision of
law, Tenant will pay to Landlord as damages, at the sole election of Landlord,
either:

 

(a)          a sum which at the time of such termination of this Lease or at the
time of any such re-entry by Landlord, as the case may be, is equal to the
excess, if any, of (i) the aggregate of all Rent which would have been payable
hereunder by Tenant had this Lease not so terminated for the period commencing
with such earlier termination of this Lease or the date of any such re-entry, as
the case may be, and ending with the date hereinbefore set for the expiration of
the full term hereby granted discounted to present value as of the date of the
Lease termination using a discount rate of four (4%) percent per annum, over
(ii) the aggregate of all Rent of the Demised Premises for the same period based
upon the then local market rental value of the Demised Premise discounted to
present value as of the date of the Lease termination using a discount rate of
four (4%) percent per annum. Landlord shall also be entitled to recover the
reasonable value of restoring the Demised Premises and reletting same (including
brokers’ commissions) as an element of damage; or

 

(b)          sums equal to the aggregate of all Rent which would have been
payable by Tenant had this Lease not so terminated, or had Landlord not so
re-entered the Demised Premises, payable upon the due dates specified herein
following such termination of such re-entry and until the date hereinbefore set
for the expiration of the full term hereby granted; provided, however, that if
Landlord shall re-let all or part of the Demised Premises for all or any part of
said period, Landlord shall credit Tenant with the net rents received by
Landlord from such re-letting, such net rents to be determined by first
deducting from the gross rents as and when received by Landlord all reasonable
attorneys’ fees and costs incurred in terminating this Lease and re-entering the
Demised Premises and of securing possession thereof, as well as the reasonable
expenses of re-letting, including altering and preparing the Demised Premises
for new tenants, brokers’ commissions and all other similar or dissimilar
expenses properly chargeable against the Demised Premises and the rental
therefrom in connection with such re-letting, it being understood that any such
re-letting may be for a period equal to or shorter or longer than the remaining
term of this Lease; provided, further, that (i) in no event shall Tenant be
entitled to receive any excess of such net rents over the sums payable by Tenant
to Landlord hereunder, (ii) in no event shall Tenant be entitled in any suit for
the collection of damages pursuant to this subsection (b) to a credit in respect
of any net rents from a re-letting except to the extent that such net rents are
actually received by Landlord prior to the commencement of such suit, and (iii)
if the Demised Premises or any part thereof should be re-let in combination with
other space, then proper apportionment on a square foot area basis shall be made
of the rent received from such re-letting and of the expenses of re-letting.
Suit or suits for the recovery of such damages, or any installments thereof, may
be brought by Landlord from time to time at its election, and nothing contained
herein shall be deemed to require Landlord to postpone suit until the date when
the term of this Lease would have expired if it had not been terminated under
the provisions of Article 14, or under any provision of law, or had Landlord not
re-entered the Demised Premises.

 

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Nothing herein contained shall be construed as limiting or precluding the
recovery by Landlord against Tenant of any sums or damages to which, in addition
to the damages particularly provided above, Landlord may lawfully be entitled by
reason of any default hereunder on the part of Tenant.

 

14.14      Upon entry of a final judgment for possession after any default by
Tenant, and until the actual taking of physical possession of the Demised
Premises by the Landlord, without limiting Tenant’s obligations under this
Lease, and in addition to all other obligations under this Lease, the Tenant
shall: (i) remain fully responsible to maintain the Demised Premises in the
condition and state of repair required by this Lease; (ii) maintain all
insurance coverages required by this Lease and indemnify Landlord against all
claims for personal injury and property damage relating to or arising out of any
occurrence at the Demised Premises and perform all other indemnification
obligations under this Lease; and (iii) allow Landlord to immediately inspect
all areas of the Demised Premises (without any obligation on Landlord’s part to
do so) and reimburse the Landlord for the cost of any repairs reasonably deemed
necessary by the Landlord to cure any unsafe or unlawful conditions.

 

15.Landlord’s Access to Demised Premises:

15.1        Landlord and its representatives may enter the Demised Premises upon
twenty-four (24) hours prior notice (except in case of emergency, when no prior
notice shall be required) for the purpose of inspecting the same and, if
Landlord so elects, but without any obligation so to do, for the purpose of
making any necessary repairs to the Demised Premises and performing any work
therein. Landlord will exercise its rights hereunder in a commercially
reasonable manner so as to minimize interference with Tenant’s business
operations, but nothing herein shall require the Landlord to schedule all work
during non-business hours and to thereby incur overtime or similar extra
charges.

 

15.2        Landlord may enter and exhibit the Demised Premises during usual
business hours upon twenty-four (24) hours prior notice for Landlord’s purposes,
including but not limited to, inspecting the Demised Premises or showing the
Demised Premises to prospective mortgagees, purchasers, lessees or brokers.
During the final twelve (12) months of the term, Landlord may also display the
usual “To Let” or similar signs on the Demised Premises. Tenant agrees that such
signs may remain unmolested upon the Landlord’s Premises.

 

16Hold Harmless:

16.1        This Lease is made upon the express covenant and condition that
Tenant shall keep, save and hold Landlord harmless and free from all liability,
penalties, losses, damages, costs, expenses, causes of action, claims and/or
judgments arising by reason of any injury or damage to any person or persons, or
property, of any kind whatsoever, and to whomsoever belonging, from any cause or
causes whatsoever and whether arising from or by reason of any existing or
future condition, default, matter, or thing in or about the Demised Premises,
including, without limitation, damage from water and/or steam seepage or leakage
in or into the Demised Premises, whether or not arising out of Landlord’s acts
or failure to act, except if caused by Landlord’s (or its employees’, agents’ or
contractors”) negligence or intentional acts or omissions, or any default by
Landlord hereunder.

 

16.2        Tenant agrees to and shall save, hold and keep harmless and
indemnify the Landlord from and for any and all payments, expenses, costs,
reasonable attorney’s fees claims and liability for losses or damage to property
or injuries to persons occasioned wholly or in part by or resulting from any
willful or negligent acts or omissions or default hereunder by the Tenant or the
Tenant’s agents, employees, guests, licensees, invitees, subtenants, assignees
or successors, or for any cause or reason whatsoever arising out of or by reason
of the use or occupancy of the Demised Premises by the Tenant, its sublessees
and assignees.

 

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16.3        Without limiting the foregoing, Tenant agrees that if Landlord is
involuntarily made a party defendant to any litigation concerning this Lease or
the Landlord’s Premises relating to any alleged act or omission of Tenant, then
Tenant shall hold Landlord harmless from all liability, costs and expenses by
reason thereof.

 

17.Assignment:

17.1        Tenant shall neither voluntarily, nor by operation of law, assign,
transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest
therein, and shall not sublet the said Demised Premises or any part thereof, or
any right or privilege appurtenant thereto, or allow any other person (the
employees, agents, servants and invitees of Tenant excepted) to occupy or use
the said Demised Premises, or any portion thereof, without first (a) obtaining
the written consent of Landlord and (b) providing Landlord with the written
consent of the Guarantor to such a transfer, assignment or sublease agreeing
that the Guaranty shall continue in full force and effect after the transfer,
assignment or sublease takes effect, or, if the Guarantor is replaced by a
substitute Guarantor in compliance with the terms of the Guaranty annexed as
Schedule E, providing the written agreement of the substitute Guarantor to
continue the Guaranty in full force and effect after the transfer, assignment or
sublease takes effect. If Tenant is a corporation or partnership, any transfer,
legal or equitable, of the stock of said corporation or of any partnership
interest which, together with any and all prior such transfers shall constitute
a change in excess of fifty (50%) percent or more of the legal or equitable
ownership of the corporation or partnership from the date of the signing of this
Lease shall be deemed an assignment for purposes of this Lease, although consent
of Landlord need not be obtained under the circumstances proved in Section 17.2.

 

17.2        Notwithstanding the foregoing in Section 17.1, no Landlord consent
shall be required: (a) for subleases, licences or assignments to affiliates or
subsidiaries of the Tenant, provided that Tenant shall provide Landlord with
fifteen (15) days advanced notice with sufficient information to confirm that:
(i) there shall be no change in the permitted use of the Demised Premises,
(ii) Tenant and Guarantor shall remain liable jointly and severally with the
assignee/subleasee for payment and performance of all Tenant obligations under
this Lease, (iii) the proposed assignment/sublease shall not impair Landlord's
security, (iv) the proposed assignee or subtenant shall not introduce any new
Hazardous Substances onto Landlord's Premises in violation of applicable laws
which is inconsistent with the existing operations of Tenant at the Landlord's
Premises and (v) the Guarantor shall have provided Landlord with its written
consent to the transaction and shall have agreed that the Guaranty shall
continue in full force and effect after the transfer, assignment or sublease
takes effect, or, if the Guarantor is replaced by a substitute Guarantor in
compliance with the terms of the Guaranty annexed as Schedule E, providing the
written agreement of the substitute Guarantor to continue the Guaranty in full
force and effect after the transfer, assignment or sublease takes effect;
(b) for any assignment to any successor to Tenant by purchase (controlling stock
sale or bulk sale of substantially all of Tenant’s assets), merger,
consolidation or reorganization, provided that Tenant shall provide Landlord
with fifteen (15) days advanced notice (unless the provision of advance notice
would violate any security regulation or law, and in any such case the notice to
Landlord shall be given on the earliest date after closing when notice may be
provided without violation of security regulation or law) with sufficient
information to confirm that: (i) there shall be no change in the permitted use
of the Demised Premises, (ii)  Guarantor shall remain liable jointly and
severally with the assignee/subleasee for payment and performance of all Tenant
obligations under this Lease, (iii) the proposed assignment/sublease shall not
impair Landlord's security, (iv) the proposed assignee or subtenant shall not
introduce any new Hazardous Substances onto Landlord's Premises in violation of
applicable laws which is inconsistent with the existing operations of Tenant at
the Landlord's Premises and (v) Guarantor shall have provided to Landlord
Guarantor’s written consent to such

 

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transaction agreeing that the Guaranty shall continue in full force and effect
after the transfer, assignment or sublease takes effect, or, if the Guarantor is
replaced by a substitute Guarantor in compliance with the terms of the Guaranty
annexed as Schedule E, providing the agreement of the substitute Guarantor to
continue the Guaranty in full force and effect after the transfer, assignment or
sublease takes effect; and (c) if Tenant becomes a publicly traded entity on a
United States stock exchange.

 

17.3        Landlord shall not unreasonably withhold consent to an assignment of
the entire leasehold interest or to a sublease, providing that Landlord
determines in its reasonable discretion that such sublease or assignment does
not lessen Landlord’s security (including the security provided by the
Guaranty), that the use of the Demised Premises shall comply with the terms of
this Lease, that the Tenant remains jointly and severally liable with assignee
or sublessee for performance of all obligations imposed upon the Tenant under
this Lease, that the proposed assignee or sublessee is financially responsible
and is sufficiently experienced to operate the business from the Demised
Premises successfully and in a manner which shall not detract from the value of
the Demised Premises or any other property owned or occupied by Landlord.

 

17.4        Consent to one assignment, subletting, occupation or use by any
other person shall not be deemed to be consent to any subsequent assignment,
subletting, occupation or use by another person. Consent to any such assignment
or subletting shall in no way relieve Tenant or the Guarantor of any liability
under this Lease or the Guaranty.

 

17.5        Any such assignment or subletting without such consent, if required
hereunder, shall be void, and shall, at the option of the Landlord, constitute a
default under the terms of this Lease. Landlord shall not be obligated to
consider and respond to any request for consent under this paragraph unless such
request is in writing, contains a full explanation of the proposal and provides
sufficient information about the financial standing and experience of the
proposed assignee or subtenant for Landlord to make an informed judgment.

 

17.6        Tenant acknowledges that, unless it is determined that Landlord
acted in bad faith, Tenant’s sole remedy with respect to any assertion that
Landlord’s failure to consent to any assignment or sublet is unreasonable shall
be the remedy of specific performance and Tenant shall have no damage claim or
further claim of any nature or cause of action against Landlord as a result of
Landlord’s actions in refusing to consent, except that Tenant shall be entitled
to assert a claim for legal fees and costs if the Tenant is the prevailing party
in any such action, and if the Court determines that Landlord's bad faith
necessitated the filing of such an action. Further, Landlord consents to the
institution of expedited, summary proceedings in the Superior Court of New
Jersey by the Tenant in any action under this Section 17.6 and waives any
objection to a hearing on the issue of the reasonableness of its actions
regarding a consent to assignment or sublet within fifteen (15) business days of
the service and filing of such an action by the Tenant.

 

17.7        In the event of any approved assignment or sublease (excluding any
assignment, license or sublease within the scope of Section 17.2), fifty (50%)
percent of all rents or other payments received by Tenant in excess of the
payments due from Tenant to Landlord pursuant to this Lease (after recoupment by
Tenant of its reasonable transaction costs and the unamortized cost of any
leashold improvements transferred to the assignee or subtenant) shall be paid to
Landlord as Additional Rent. On demand, any assignee or subtenant shall make
payments directly to Landlord without, however, creating a direct
Landlord-Tenant relation between them or releasing Tenant under this Lease.

 

17.8        In the event that request is made for the Landlord’s consent to a
sublease or assignment hereunder, Tenant shall pay Landlord’s reasonable
attorneys’ fees incurred in connection with the processing of documents
necessary to giving of such consent. Tenant shall also

 

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pay Landlord’s reasonable attorneys’ fees for similar reviews, such as, without
limitation, proposed waiver agreements in favor of Tenant’s lenders, proposed
consents to subleases and the like.

 

18.Condemnation:

18.1        This Lease and the term hereof shall terminate: (1) if the entire
Demised Premises shall be taken by condemnation, or (2) at the option of Tenant
(exercisable by notice given to Landlord within thirty (30) days after the date
of any such taking), if a material part of the Demised Premises shall be taken
in any condemnation proceeding(s), or so much of the parking area as shall leave
Tenant with fewer than 125 parking spaces has been taken and Landlord has not
provided replacement spaces for the exclusive use of Tenant that are comparable
and located within reasonable proximity to the Demised Premises; or (3) at the
option of Landlord (exercisable by notice given to Tenant within thirty (30)
days after the date of taking) if more than fifteen (15%) per cent of the
Landlord’s Premises shall be taken by condemnation. A taking of a “material
part” of the Demised Premises shall mean the condemnation of so much of the
Demised Premises as shall materially and adversely prevent Tenant from operating
its business in the Demised Premises after restoration of the Building to a
complete architectural unit.

 

18.2        Upon the termination of this Lease in accordance with this Article,
Rent shall be adjusted as of such termination. The entire condemnation award
shall be the sole and exclusive property of Landlord and shall be payable solely
to Landlord except any allocations or awards for Tenant’s trade fixtures and
moving expenses. Tenant shall not make any claim in any condemnation proceeding
for the value of the unexpired portion of the Lease or the term hereof, and
waives all right thereto.

 

18.3        In the event that any portion of the Demised Premises is taken in
condemnation and if this Lease is not terminated, then this Lease shall remain
in full force and effect as to such remaining portion, except that from and
after the effective date of any such taking, Tenant shall be entitled to an
equitable reduction in the Fixed and Supplemental Rent required to be paid
hereunder in accordance with any reduction in square foot area of the Demised
Premises caused by such taking. Landlord shall promptly restore the portion of
the Demised Premises remaining after such taking to a complete architectural
unit. Any restoration by Landlord shall be limited to the basic building
structure as demised by Landlord to Tenant as of the Commencement Date.

 

18.4        In the event this Lease is not terminated as aforesaid and Landlord
does not restore the Demised Premises within a period of ninety (90) working
days after the date of taking, then and in that event, Tenant may, as its sole
remedy, have the right to terminate this Lease by notice in writing delivered to
Landlord prior to completion of such restoration.

 

18.5        Provided Tenant’s facilities are not materially and adversely
affected and the size of the Demised Premises is not reduced to an extent that
materially impacts Tenant’s use and enjoyment of the Demised Premises, Landlord
shall have the right to install, maintain and alter or relocate within the
Demised Premises any gas, water, electric or sewer lines which may be necessary
to service the Demised Premises; provided that to the extent reasonably
practical same shall be located above existing drop ceilings or behind walls.

 

19.Fire or Casualty Loss:

19.1        If all or part of the Demised Premises is damaged or destroyed by
fire or other casualty the cost of which to repair is reasonably determined by
the Landlord to exceed Twenty-Five Thousand and 00/100 ($25,000.00) Dollars,
this Lease and all of its terms, covenants and conditions shall, subject to the
provisions hereinafter set forth, continue in full force and effect, and the
obligations of the Landlord and the Tenant shall be as provided in this Article
19. In the case of a fire or casualty loss the cost of which to repair is
reasonably determined by the Landlord to be equal to or

 

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less than Twenty-Five Thousand and 00/100 ($25,000.00) Dollars, then the
provisions of Articles 4 and/or 5 of this Lease shall control the responsibility
of Landlord and Tenant for the completion of repairs and replacements, but all
fire and casualty insurance proceeds, if any, shall be utilized to reimburse the
respective parties for their costs of repair, with any excess to belong to the
Landlord.

 

A.           In the event that the damage to the Demised Premises is so
extensive as to amount practically to the total destruction of the Demised
Premises, then unless the Landlord serves notice upon Tenant within sixty (60)
days of the casualty loss that Landlord can and will restore the Demised
Premises within not more than twelve (12) months after the date of the loss,
either party shall have the right to terminate this Lease, in which event, this
Lease shall cease and the Rent shall be apportioned to the time of the
destruction. For the purposes of this paragraph, damage or destruction rendering
fifteen (15%) percent or more of the Demised Premises unusable shall be deemed
total destruction.

 

B.           In the event that the Demised Premises is injured, but not so
destroyed (as set forth in Paragraph A immediately above) as to terminate the
Lease, or Landlord serves notice that it can and will restore the Demised
Premises within the time specified in Paragraph A, or neither party elects to
terminate as provided for in Paragraph A above, then, provided that the term of
this Lease shall have at least two (2) years to run, and that applicable laws
shall permit, then, and in those events, the Landlord shall repair and rebuild
the Demised Premises with reasonable diligence and in any event within not more
than twelve (12) months from the date of the casualty loss.

 

19.2        To the extent that the loss or destruction of the Demised Premises
so substantially interferes with the operation of the Tenant’s business, that
Tenant is required to and actually does stop using all or any portion of the
Demised Premises, the Fixed Rent and Supplemental Rent allocable to any such
portion that Tenant stops using shall be abated from the date of such closing to
the date the damage shall have been substantially repaired so as to enable the
Tenant to again use such portion.

 

19.3        Tenant acknowledges and agrees that Landlord will not carry
insurance of any kind on Tenant’s fixtures, furniture, furnishings, trade
fixtures, equipment, improvements, or appurtenances removable by Tenant under
the provisions of this Lease, and that Landlord shall not be obligated to repair
any damage thereto or replace the same.

 

20.Estoppel Certificate:

20.1        Either party hereto, and/or its successors in interest, shall at any
time and from time to time, forthwith upon request from the other party and/or
its successor in interest, execute, acknowledge and deliver a statement in
writing (a) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease as so modified is in full force and effect), and the date to
which the Rent and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to such party’s knowledge, any uncured
defaults on the part of either party hereunder, or specifying such defaults if
any are claimed, and (c) setting forth the date of commencement of Rents and
expiration of the term hereof. Any such statement may be relied upon by the
prospective purchaser or encumbrancer of all or any portion of the real property
of which the Demised Premises are a part, or other interested party.

 

21.Signage

21.1        Under no circumstances shall Tenant place or erect, or allow to be
placed, or erected, a sign of any nature whatsoever upon any portion of the
building owned by Landlord, and Landlord will not consent to or permit any such
signs. Tenant shall be permitted to place signage on the existing monument sign
subject to prior written approval from Landlord in connection with any proposed
sign, its location, and its manner of installation. Ground signs which are

 

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similar to existing ground signs will be permitted subject to prior written
approval from Landlord in connection with any proposed sign, its location, and
its manner of installation. Landlord may remove any signs installed by Tenant
which are in violation of the provisions of this Article. In no event shall any
permitted sign be installed on the roof or above the parapet height of the
building(s) at Landlord’s Premises. Any sign which Tenant may be permitted to
install on the Landlord’s Premises shall nonetheless conform to any and all
requirements of any governmental body of any nature whatsoever having
jurisdiction thereover, notwithstanding Tenants’ having obtained written consent
from Landlord therefor. Tenant shall have the right, as the need may occur, to
apply for any sign variances, at its sole cost and expense, provided the
Landlord shall have first approved the proposed sign. Landlord’s consent to
signs shall not be unreasonably withheld.

 

22.Brokerage Commission:

22.1        Landlord and Tenant each warrant and represent one to another that
neither has dealt with, employed or negotiated with any real estate broker,
salesman, agent or finder in connection with this Lease Agreement except
Studley, Inc. (the “Broker”). Landlord agrees to pay the commission due to the
Broker pursuant to a separate agreement. Landlord shall indemnify, hold harmless
and defend Tenant, and Tenant shall indemnify, hold harmless and defend
Landlord, from and against any claim or claims for broker or other commission
arising from or out of any breach of the foregoing representation and warranty
by the respective indemnitors. The representations and obligations contained in
this paragraph shall survive the expiration or termination of this Lease.

 

23.Unavoidable Delays:

23.1        In the event that Landlord shall be delayed or prevented from
performing any of its obligations pursuant to the provisions of this Lease
Agreement or in the event Tenant is delayed or prevented from performing any of
its obligations pursuant to the provisions of this Lease Agreement, other than
and excluding Tenant’s obligations for Rent, its insurance obligations, its
obligations regarding environmental matters and its obligations regarding the
timely return of possession to Landlord upon any termination of this Lease, due
to governmental action, or lack thereof, or due to shortages of or
unavailability of materials and/or supplies, labor disputes, strikes, slow
downs, job actions, picketing, secondary boycotts, fire or other casualty,
delays in transportation, acts of God, failure to comply or inability to comply
with any orders or requests of any governmental agencies or authorities, acts of
declared or undeclared war, public disorder, riot or civil commotion, or by any
other cause beyond the reasonable control of such party, then such party shall
in any or all such events be excused from its obligation to perform and comply
with such provisions of this Lease Agreement for a period of time commensurate
with any delay so caused without any liability to the other party therefor
whatsoever and all time periods provided for herein for performance of any such
obligations shall be extended accordingly.

 

24Subordination:

24.1        Tenant covenants that its rights under this Lease Agreement are
hereby and will be subordinate to the operation and effect of any mortgage or
mortgages now existing or hereafter placed upon the Landlord’s Premises without
any further written document from Tenant. However, Tenant shall, upon request by
Landlord, execute such reasonable documents as may be required to effect such
subordination to the satisfaction of any such mortgagee.

 

24.2        Tenant agrees not to unreasonably withhold consent to modifications
hereof made by any reputable bona fide mortgage lending institution provided
that such requirements shall not increase Tenant’s financial obligations
hereunder, or increase Tenant’s other obligations hereunder or decrease Tenant’s
rights hereunder by more than a de minimis extent.

 

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24.3        Tenant shall, upon request of Landlord, furnish to Landlord at any
time during the term, the most recent financial statement(s) of Tenant for a
period of up to two (2) years last past. If certified statements certified by a
certified public accountant are available, then certified statements will be
provided by Tenant. All such statements, which are not included in public
filings or otherwise made public by Tenant shall be kept strictly confidential
by Landlord and, if provided to an existing or prospective lender or purchaser
of Landlord’s Premises, Landlord shall obtain confidentiality agreements from
such entities that are reasonably acceptable to Tenant before providing copies
of financial documents to such entities..

 

24.4        Tenant covenants and agrees to attorn to any successor to Landlord’s
interest in this Lease.

 

24.5        Landlord agrees to obtain a subordination, attornment and
non-disturbance agreement (a “SNDA”) from existing and future mortgagees in the
commercially reasonable standard form utilized by such mortgagees for the
benefit of Tenant and to deliver same to Tenant within a reasonable time (not to
exceed 30 days) after execution of this Lease.

 

24.6        Landlord and Tenant agree that this Lease any and all obligations of
the parties hereunder are subject to and contingent upon Landlord obtaining
written approval from the Landlord’s first mortgage lender (“First Mortgagee
Approval”). In the event Landlord is unable to obtain the First Mortgagee
Approval within thirty (30) calendar days from the date this Lease is fully
executed by both Landlord and Tenant, the Lease shall be null and void and of no
force or effect unless the parties agree to extend the time for satisfaction of
this contingency. Upon satisfaction of the contingency the Landlord shall notify
Tenant in writing and the Lease Agreement shall thereupon be binding upon the
parties and shall remain in full force and effect.

 

25.Limited Guaranty of Performance and Payment:

25.1        As additional consideration for this Lease, the Tenant’s parent
company, LVMH Moet Hennessy Louis Vuitton S.A. (the “Guarantor”), shall provide
to Landlord contemporaneously with the execution of this Lease an unconditional
guaranty of payment and performance of all of Tenant’s obligations hereunder
subject to a maximum guaranty amount of Six Million and 00/100 Dollars
($6,000,000.00) in the form annexed hereto as Schedule ”E”.

 

26.Landlord’s Power Generation Systems

26.1        Landlord is hereby granted the exclusive right, but is not hereby
obligated, to install and maintain, at its sole cost and expense, solar energy
and other renewable energy generation systems at the Demised Premises
(collectively, “Landlord’s Power Generation Systems”) including, but not limited
to, a solar array located on the roof of the Building which may include, without
limitation, an integrated assembly of photovoltaic panels, mounting assemblies,
inverters, converters, meters, lighting fixtures, transformers, ballasts,
disconnects, combiners, switches, wiring devices and wiring to bring power from
the rooftop arrays to the Demised Premises, meters, inverters, wiring, and any
other property now or hereafter installed, owned, operated, or controlled by
Landlord for the purpose of, or incidental or useful to the generation and
delivery to Tenant of electricity produced by the Landlord’s Power Generation
Systems (the “Landlord’s Electricity”) to the existing electrical systems
serving the Demised Premises (the “Electrical Interconnection Point”). The
Landlord’s Power Generation Systems shall be solely owned by the Landlord. The
Landlord’s Power Generation Systems shall be installed, and shall at all times
be maintained and operated by the Landlord from the Landlord’s Premises, in such
a way as to not cause any unreasonable interference with the operations of the
Tenant at the Demised Premises.

 

26.2        It is anticipated that Landlord’s Electricity will not furnish the
Tenant’s entire requirement for electricity and Tenant shall at Tenant’s sole
discretion supplement Landlord’s

 

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Electricity by purchasing electricity from its local public utility or from
third party electricity suppliers authorized by the New Jersey Board of Public
Utilities to sell electrical energy to consumers and/or businesses within the
Borough of Carlstadt, Bergen County, New Jersey (hereinafter, “Electric Utility
Providers”) in an amount equal to the difference between Landlord’s Electricity
and the amount of electrical energy used by Tenant at the Demised Premises (“Net
Electricity”); provided that in all events Tenant shall first purchase the total
output of electrical energy produced by and available from the Landlord’s Power
Generation Systems before purchasing electrical energy from such Electric
Utility Providers. Tenant shall not select an electrical utility or other
electricity supplier that requires, as part of their conditions of service,
removal or discontinuance of the operation of the Landlord’s Power Generation
Systems or discontinuance of the purchase of electricity from Landlord in
accordance with the terms of this Article 26. The Landlord’s Power Generation
Systems shall be installed as parallel systems in combination with the existing
electrical power supply to the Demised Premises from Electric Utility Providers
and shall connect to the Electrical Interconnection Point in such a manner that
Tenant will automatically draw from Landlord’s Electricity first and supplement
whatever electric power produced by the Solar Panel System or other Landlord
Power Generation Systems with power from the existing electrical systems
supplied by Electric Utility Providers serving the Demised Premises. At times
when the Landlord Power Generation System is not operating, the Tenant will be
able to automatically and without interruption draw full electric power
requirements from the Electric Utility Providers.

 

26.3        Landlord shall sell to Tenant and Tenant shall purchase from
Landlord all electrical energy (“Landlord’s Electricity”), that is produced and
delivered to the Demised Premises by the Landlord Power Generation Systems,
including the Solar Panel System, at the rate of $0.10 per kilowatt-hour on the
Commencement Date of this Lease or such later date when a Landlord Power
Generation System is installed at the Landlord’s Premises and increasing by
three (3%) percent per annum on the first day of each one year anniversary of
the initial date when Landlord’s Power Generation System commenced delivery of
Landlord’s Electricity to the Demised Premises through the expiration of the
initial Term (“Initial Term Electric Rate”); provided that, in no event shall
the Initial Term Electric Rate exceed the rate at which Tenant could purchase
electricity from Electric Utility Providers. In the event Tenant exercises its
right to renew this Lease in accordance with Section 41 hereof, Landlord may
increase the Initial Term Electric Rate for the renewal Term (the “Renewal Term
Initial Rate”), at Landlord’s sole discretion, upon notice to Tenant given no
later than thirty (30) days following Landlord’s receipt of the Tenant’s renewal
notice and the Renewal Term Initial Rate shall increase at the rate of three
(3%) percent for each lease year throughout the renewal Term; provided that, in
no event shall the Initial Term Electric Rate exceed the rate at which Tenant
could purchase electricity from Electric Utility Providers. Any change to the
Initial Term Electric Rate hereunder shall be promptly documented by a
confirmatory writing executed by the authorized representatives of Landlord and
Tenant. During the renewal Term, the Tenant’s obligation to purchase Landlord’s
Electricity is subject to the condition that the price per kilowatt-hour of
Landlord’s Electricity shall at the commencement of each Lease Year be equal to
or less than the total price charged by Electric Utility Providers (as
hereinafter defined) for the supply and distribution of electricity to the
Demised Premises inclusive of all taxes, charges and fees charged in connection
therewith. If during the renewal Term following an increase or proposed increase
in the Initial Term Electric Rate the Tenant obtains a firm written quote from
an Electric Utility Provider proposing to sell Tenant electrical energy at a
lower total price than the price per kilowatt-hour then being charged by
Landlord (“Competing Quote”), Tenant may provide Landlord with a copy of the
Competing Quote together with a request that Landlord match it. Within ten (10)
days of Landlord’s receipt of any such request, Landlord shall advise Tenant as
to whether or not it will match the Competing Quote. If Landlord elects not to
match the Competing Quote, Tenant’s obligation to buy Landlord’s Electricity
from Landlord pursuant to the

 

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terms hereof shall terminate effective on the thirtieth (30) day following
Landlord’s notice thereof to Tenant. If, at any time during the Term, Tenant is
no longer obligated to purchase or Landlord ceases to supply Landlord’s
Electricity, Tenant shall be entitled to purchase all of its electricity from
Electric Utility Providers. However, notwithstanding said termination,
Landlord’s rights under this Article 26 to maintain and access any of the
Landlord’s Power Generation Systems through the Demised Premises for any purpose
including, but not limited to, the right to sell Landlord’s Electricity to other
occupants of the Landlord’s Premises, to other consumers of electricity or to
utility providers and/or obtain and/or market RECS shall continue unaffected for
the balance of the Term.

 

26.4        Landlord shall measure the actual amount of Landlord’s Electricity
delivered to the Demised Premises by the Landlord’s Power Generation Systems at
the Electrical Interconnection Point utilizing a commercially available revenue
grade interval data-recording meter (the “Meter”). The Meter shall be installed
and maintained at Landlord’s expense during the Term. Tenant may request that
Landlord test the Meter at any reasonable time during the Term if Tenant
reasonably believes that the Meter is inaccurate or defective. Tenant shall
reimburse Landlord for the cost of any test performed at Tenant’s request unless
such testing reveals that the Meter is inaccurate or defective. In the event the
Meter is found to be inaccurate or defective, Landlord shall make necessary
repairs or replacements of the Meter, at Landlord’s sole cost and expense, and
Landlord shall not be entitled to any reimbursement of the costs of the
inspection that revealed the error in the Meter from Tenant. In addition, if it
is discovered that the Meter’s inaccuracy or defect has resulted in Landlord
overbilling Tenant, the invoices shall be adjusted retroactively from the date
(or if the exact date is unknown then from the approximate date) that the
inaccuracy commenced, if known, and, if unknown, for the three month period
preceding the Meter test date. Adjustments that benefit the Tenant will be
reflected on the next invoice following the date of determination of the
inaccuracy. Adjustments that benefit the Landlord shall be included on
Landlord’s next invoice to the Tenant. Tenant will not tamper with the Meter or
otherwise interfere with its measurement of electricity provided by the
Landlord’s Power Generation Systems.

 

26.5        Each month during the Term, Landlord shall read the Meter to
determine Tenant’s prior month’s usage of Landlord’s Electricity and invoice
Tenant therefor, together with any taxes and third party charges or fees thereon
that may be lawfully levied with respect to the purchase of electricity by
Tenant from Landlord pursuant to the terms of this Article 26. The invoices
shall show total kilowatt-hours used by Tenant for the immediately preceding
month multiplied by the applicable per kilowatt-hour rate payable by Tenant
hereunder. Tenant shall pay for Landlord’s Electricity within thirty (30)
calendar days after service of invoices. Tenant’s obligation to pay Landlord’s
Electricity shall constitute Additional Rent and if Tenant fails to timely pay
the invoices, Landlord shall have the remedies available for non-payment of
Additional Rent hereunder.

 

26.6        During the Term, Landlord shall be solely responsible for the
installation, inspection, maintenance, repair, replacement and/or relocation of
the Landlord’s Power Generation Systems. Landlord shall have full access through
the Demised Premises to the roof of the Building and shall have reasonable
access to other areas of the Demised Premises, in each case, on reasonable prior
notice, as reasonably necessary, for said purposes. In connection with any such
access, Landlord shall use reasonable efforts to minimize interference with
Tenant’s use of the Demised Premises.

 

26.7        Tenant shall not install any structures or equipment on any part of
the Demised Premises that obstruct or interfere with the Landlord’s Power
Generation Systems or that overshadow or shade rooftop or exterior solar arrays
integral to Landlord’s Power Generation Systems, nor shall Tenant otherwise
unreasonably interfere with the operation of the Landlord Power Generation
Systems and the output of Landlord’s Electricity. Upon Landlord’s demand, Tenant
shall cease all

 

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such activities which impair or reduce the efficient operation of any of the
Landlord’s Power Generation Systems or materially increase the cost to operate
or maintain any of the Landlord’s Power Generation Systems. If Tenant fails to
cease prohibited activities after notice thereof by Landlord, and such
activities, in violation of this Section 26.7, result in the Solar Panel System
producing less than the average output on a kilowatt basis over the twelve (12)
month period immediately preceding the commencement of the prohibited
activities, Tenant shall pay to Landlord as Additional Rent the difference
between the amounts actually paid to Landlord for Landlord’s Electricity and the
amounts that would have been paid if the Solar Panel System had operated at
expected capacity during the period after the service of Landlord’s demand to
cease such activities until the activities have ceased.

 

26.8        Landlord will have sole ownership of any and all of the Landlord’s
Power Generation Systems that may be installed by Landlord from time to time
during the Term hereof and of all renewable energy credits or certificates,
including, without limitation, emission reduction credits, investment credits,
production tax credits, emission allowances, green tags, and tradable renewable
credits (hereinafter collectively, “RECS”) and may it its sole discretion market
these at any time. Any grant, rebate, incentive payment or credit by any
applicable utility, the Federal, State or Local Government or any other agency
paid as a result of the design, construction and operation of the Landlord’s
Power Generation Systems shall be paid to, credited to and otherwise inure to
the exclusive benefit of Landlord. Tenant shall cooperate in good faith, at no
cost or expense to Tenant, as reasonably necessary to enable Landlord to obtain
all available RECS, incentives and rebates, including assignment to Landlord of
any incentive received by Tenant in connection with and/or as a result of the
Landlord’s Power Generation Systems being on the Demised Premises and, in
connection therewith, shall within ten (10) days of Landlord’s demand, respond
to and/or sign such authorizations and/or other documentation as is reasonably
required by Landlord to obtain any rebate or subsidy available to it under
applicable law.

 

26.9        Landlord may permanently discontinue operation of Landlord’s Power
Generation Systems and shall have no further obligation to sell Tenant
Landlord’s Electricity in accordance with the terms hereof (i) if Landlord
determines in good faith that the continued operation of the Solar Panel System
is no longer economically beneficial because of changed circumstances or
regulatory requirements, or presents a danger to persons or property; (ii) if
the renovation, damage, destruction or ceasing of operations at the Demised
Premises eliminates or materially reduces Tenant’s need for Landlord’s
Electricity so as to make continued operation uneconomical in Landlord’s good
faith judgment; (iv) if a Landlord’s Power Generation System is damaged or
impaired and Landlord determines that it is not economical to repair or rebuild;
or if (v) Landlord is unable to legally or practically continue the sale of
Landlord’s Electricity to Tenant (hereinafter collectively, “Termination
Events”); provided that Landlord shall not so discontinue operation of
Landlord’s Power Generation Systems unless and until Tenant is able to obtain
all of its required electricity directly from Electric Utility Providers and, in
the event alterations to the Demised Premises or additional equipment is
required therefor, such alterations shall be performed and such equipment shall
be purchased at Landlord’s sole cost and expense. If Landlord elects in its sole
discretion not to terminate the sale and purchase of Landlord’s Electricity
following one or more Termination Events, Landlord and/or Tenant, as applicable,
shall diligently pursue the completion of any renovation and/or repair work that
would permit the recommencement of the sale and purchase of Landlord’s
Electricity in accordance with the terms hereof, at Landlord’s sole cost and
expense.

 

26.10      The rights and obligations of Landlord with respect to Landlord’s
Electricity, the Landlord’s Power Generation Systems or the RECS may be assigned
by Landlord to any successor owner and to any mortgagee of the Landlord’s
Premises without the need for Tenant’s consent and, in furtherance thereof,
Tenant shall, within ten (10) days of Landlord’s demand, sign such documentation
as Landlord may reasonable request to effectuate the assignment or sale of the

 

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Landlord’s Power Generation Systems, the RECS or Landlord’s right to sell Tenant
Landlord’s Electricity in accordance with the terms hereof.

 

26.11      The Landlord shall indemnify and hold Tenant harmless from and
against costs and expenses resulting from: (a) any repairs to, direct or
indirect harm to, or loss of Tenant’s personal property or fixtures on the
Demised Premises to the extent caused by the negligence, recklessness, willful
misconduct or breach of the terms of this Article 26 by Landlord or any of its
contractors, agents, employees, partners, owners, subsidiaries, affiliates or
invitees and not covered by Tenant’s insurance (without giving effect to any
subrogation against Landlord); and (b) any loss, damage, expense or liability
resulting from injury to or death of persons to the extent caused by Landlord or
any of Landlord’s contractor’s, agents, employees, partners, partners, owners,
subsidiaries, affiliates or invitees, except if caused by or resulting from the
Tenant’s willful malfeasance or negligent acts.

 

26.12      Landlord and Tenant acknowledge and agree that Landlord’s Power
Generation Systems are intermittent generation facilities and will not provide
Tenant with an uninterrupted supply of electricity. Nothing contained in this
Article 6 shall be deemed to provide any warranty or guarantee for any specific
level or quantity of power produced by the Landlord’s Power Generation Systems
at any given time or over the course of the Term. If Landlord’s Electricity is
interrupted, Landlord will make commercially reasonable efforts to restore
Landlord’s Electricity in a timely manner.

 

26.13      Landlord shall have the right to publish information about the
installation and usage of the Landlord Power Generation Systems through any
means, including press releases, published material and internet.

 

27.Waiver as to Insured Losses:

27.1        Tenant and Landlord each waive all rights of recovery against the
other or their respective agents, employees or other representatives, for any
loss, damage or injury of any nature whatsoever to property or persons for which
the Tenant or Landlord is insured, to the extent of insurance proceeds actually
received on account of such loss, damage or injury.

 

28Environmental Covenants:

Tenant represents, covenants, promises and agrees that:

 

28.1        Tenant agrees to take all requisite action to insure Tenant’s full
compliance, at Tenant’s sole expense, with all applicable federal, state and
local environmental laws, including, but not limited to, (i) the “Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. 9601 et seq. (“CERCLA”); (ii) the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 et seq. (and including the Hazardous Discharge Site Remediation
Site Act, N.J.S.A. 58:10B-1 et seq.) (collectively “ISRA”); (iii) the New Jersey
Spill Compensation and Control Act, as amended, N.J.S.A. 58:10-23.11 et seq.
(“Spill Act”); (iv) the Solid Waste Management Act, N.J.S.A. 13:1E-1 et seq.
(“SWMA”); (v) the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
6901 et seq. (“RCRA”); (vi) the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. § 651 et seq. (“OSHA”); (vii) the New Jersey Underground
Storage of Hazardous Substances Act, as amended, N.J.S.A. 58:10A-21 et seq. (the
“Tank Act”); (viii) the New Jersey Water Pollution Control Act, as amended,
N.J.S.A. 58:10A-1 et seq. (“WPCA”); (ix) the New Jersey Air Pollution Control
Act, as amended, N.J.S.A. 26:2C-1 et seq. (“APCA”); and/or the rules and
regulations promulgated thereunder and all federal and state laws relating to
pollution of the environment, hazardous substances, air pollution, soil,
hazardous waste, toxic substances, noise control, sewerage and wastewater
treatment, solid waste, tidelands, navigable waters, water supply, quality and
pollution, environmental rights, storm water, groundwater and waters of the
United States and of New Jersey (herein referred to as “Environmental Laws”).

 

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28.2        Tenant shall not use or suffer or permit the use of the Demised
Premises to refine, produce, store, handle, generate, manufacture, heat, dispose
of, transfer, process or transport “Hazardous Substances”, as herein defined.
The term “Hazardous Substances” shall be defined for purposes of this Lease as
any hazardous chemical, hazardous or toxic substance, hazardous waste, hazardous
material or similar material or substance as so defined in or regulated under
any Environmental Laws, including without limitation, CERCLA, ISRA, Spill Act,
RCRA, OSHA, the Tank Act. “Hazardous Substances” shall not be deemed to include
food items consumed by employees at the Demised Premises or cleaning products
typically sold for home or office use which are stored in compliance with
Environmental Laws in original containers and are used for such purposes within
the Demised Premises.

 

28.3        Tenant shall not use or otherwise operate on the Demised Premises as
a “Major Facility”, as such term is defined in N.J.S.A. 58:10-23.11b(1), or any
rule or regulation promulgated thereunder.

 

28.4        In connection with the Tenant’s occupancy of the Demised Premises or
operations within the Landlord’s Premises, if Tenant or any of Tenant's agents,
servants, contractors, employees, invitees, sub-tenants or assignees cause,
suffer or permit any intentional or unintentional action or omission resulting
in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or
dumping of "Hazardous Substances" at the Landlord’s Premises without having
obtained a permit issued by the appropriate governmental authorities, Tenant
promptly shall at Tenant's own expense, prepare and submit the required plans
and carry out the approved plans in accordance with the provisions of all
Environmental Laws, and all other applicable federal, state or local laws, rules
or regulations, using contractors reasonably satisfactory to Landlord, remedial
investigation plans and remedial action plans reasonably satisfactory to
Landlord (Landlord’s consent not to be unreasonably withheld or delayed). Tenant
shall (i) remediate such discharge to the DEP unrestricted standard (with no
requirement for Institutional or Engineering Controls as those terms are defined
under applicable Environmental Laws); (ii) comply with all Environmental Laws
and other applicable federal, state or local laws, rules or regulations
regarding such discharge; and (iii) shall provide to Landlord copies of all
correspondence, plans, reports and other documents received from or submitted to
the regulatory authorities having jurisdiction over such discharge and any
required remediation of such discharge.

 

28.5        No lien has been attached, nor shall any lien be allowed to attach
to any revenues or any real or personal property owned by Tenant and located at
the Demised Premises, pursuant to federal or state laws including, without
limitation the Spill Act and/or CERCLA.

 

28.6        Tenant will furnish the New Jersey Department of Environmental
Protection (“DEP”) and/or Landlord with any information which may be required by
the Environmental Laws with respect to the occupancy of and operations at the
Demised Premises, including information required by ISRA due to applications
submitted by the Landlord from time to time all at no cost or expense to
Landlord.

 

28.7        In the event that there shall be filed a lien resulting from the
acts or omissions of Tenant or its agents, servants, contractors, employees,
invitees, sub-tenants or assignees against the Demised Premises or Tenants
interest therein or Tenant’s property thereon by DEP under the Spill Act or
under CERCLA or under any other Environmental Law, Tenant shall within thirty
(30) days from the date the Tenant is given notice of such lien or within such
shorter period of time in the event that the State of New Jersey has commenced
steps to cause a sale pursuant to the lien, either: (a) pay the claim and remove
the lien; or (b) furnish (1) a bond satisfactory to Landlord and/or DEP in the
amount of the claim out of which the lien arises, (2) a cash deposit in the
amount of the claim out of which the lien arises, or (3) other security
reasonably satisfactory to Landlord in an amount sufficient to discharge the
claim out of which the lien arises.

 

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28.8        Tenant shall not use or cause the Demised Premises to be used as an
“industrial establishment”, as such term is defined in ISRA without the prior
written consent of Landlord.

 

28.9        Tenant shall not install any underground storage tanks within or
under the Landlord’s Premises.

 

28.10      Landlord represents, covenants, promises and agrees that it knows of
no environmental conditions affecting the Landlord’s Premises which are not
referenced in the Phase I Environmental Report dated January 29, 2003 prepared
by EcolSciences, Inc. a true and complete copy of which has been provided to the
Tenant; the said Phase I Environmental Report dated January 29, 2003 is the most
recent Environmental Report known to Landlord concerning the Landlord’s
Premises; the Landlord knows of no environmental air quality conditions
affecting the Demised Premises and has not received any complaints or claims
alleging the existence of any such conditions; and the Landlord knows of no
claims that have been asserted against the Landlord’s Premises alleging the
presence of Hazardous Substances in, on, or about the Landlord’s Premises.

 

29.Auction Sales:

29.1        Tenant shall not conduct or permit to be conducted any sale by
auction or otherwise in, upon or from the Demised Premises whether said sale be
voluntary, involuntary, pursuant to any assignment for the payment of creditors
or pursuant to any bankruptcy or other insolvency proceeding.

 

30.Holding Over:

30.1        If Tenant remains in possession of the Demised Premises or any part
thereof after the expiration of the term hereof without the express written
consent of Landlord, such occupancy shall at Landlord’s option constitute a
trespass entitling Landlord to obtain immediate possession of the Demised
Premises in addition to Landlord’s rights to recover damages under Section 30.2.

 

30.2        In the event Tenant shall remain in possession of the Demised
Premises following the expiration of the Term, without Landlord’s written
permission, all terms of this Lease shall, as applicable, continue to govern
such possession, except that Tenant shall have the status of a tenant at
sufferance and shall pay to Landlord, as damages for such wrongful holdover, for
each month or part thereof during which said wrongful holdover continues, one
hundred fifty percent (150%) of the Fixed Rent then in effect hereunder, plus
all Additional Rent.

 

31.Quiet Possession:

31.1        So long as this Lease is in full force and effect, Tenant shall have
quiet possession of the Demised Premises for the entire term hereof, subject to
all the provisions of this Lease.

 

32.Sale of the Landlord’s Premises:

32.1        The term “Landlord” as used in this Lease means only the owner or
landlord for the time being of the land and building of which the Demised
Premises form a part, so that in the event of sale or sales of said land and
premises the Landlord shall be and hereby is entirely freed and relieved of all
covenants and obligations of the Landlord hereunder accruing from and after such
sale and it shall be deemed and construed without further agreement between the
parties or their successors in interest, or between the parties and the
purchaser at any such sale, that the purchaser has assumed and agreed to carry
out any and all obligations of the Landlord hereunder.

 

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33.Notices:

33.1        All notices and demands which are contemplated or permitted to be
given by either party shall be in writing and shall be served upon the parties
at the following addresses:

 

LANDLORD:

 

400 COMMERCE BOULEVARD, LLC

Attn: Edward Russo

570 Commerce Boulevard

Carlstadt, N.J. 07072

 

WITH A COPY TO:

 

Richard G. Berger, Esq.

Russo Development, LLC

570 Commerce Boulevard

Carlstadt, N.J. 07072

 

TENANT:

 

The Donna Karan Company, LLC

Attn: Chief Financial Officer

240 West 40th Street

New York, NY 10018

WITH A COPY TO:

The Donna Karan Company LLC

Attn: Legal Department - General Counsel

240 West 40th Street

New York, New York 10018

 

AND A COPY TO:

Stern Tannenbaum & Bell LLP

Attn: Stewart J. Stern, Esq.

380 Lexington Avenue

New York, New York 10168

 

Notices shall be served either (1) by personal service, or (2) by
nationally-recognized overnight courier, such as Federal Express. Personal
service shall be effective at the time of delivery in person or one day after
dispatch if delivered by overnight courier service to the addressee. Either
party may, from time to time, designate a different address by giving written
notice to the other designating such address.

 

34.Parties Bound:

34.1        The covenants, agreements, terms, provisions and conditions of this
Lease shall bind and benefit the respective successors, assigns and legal
representatives of the parties hereto with the same effect as if mentioned in
each instance where a party hereto is named or referred to, except that no
violation of the provisions of Article 17 hereof shall operate to vest any
rights in any

 

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successor, assignee or legal representative of Tenant and that the provisions of
this Article 34 shall not be construed as modifying the conditions of limitation
contained in Article 17 hereof. It is understood and agreed, however, that the
covenants and obligations on the part of Landlord under this Lease accruing from
and after a transfer of this Lease shall not be binding upon Landlord herein
named with respect to any period subsequent to the transfer of its interest in
the Demised Premises, that in the event of such transfer said covenants and
obligations shall thereafter be binding upon each transferee of such interest of
Landlord herein named, but only with respect to the period ending with a
subsequent transfer of such interest, and that a lease of the entire interest
shall be deemed a transfer within the meaning of this Article

 

35.Abandoned Personal Property:

35.1        Any personal property, which shall remain in the Demised Premises or
any part thereof after the expiration or termination of the term of this Lease
shall be deemed to have been abandoned, and either may be retained by Landlord
as its property or may be disposed of in such manner as Landlord may see fit at
the sole cost and expense of Tenant seven (7) days after written notice to
Tenant. If such personal property or any part thereof shall be sold by Landlord,
Landlord may receive and retain the proceeds of such sale as Landlord’s property
without affecting Landlord’s rights against Tenant or resulting in any credit to
Tenant from damages otherwise recoverable by Landlord.

 

36.Financial Information:

36.1        In the event at any time during the term, the Landlord processes for
a mortgage on the Landlord’s Premises, or desires financial information for
other reasonable purposes, Tenant shall, provide up to five years of its most
recent financial statements (certified if available, and if not, then certified
to be true and correct by Tenant’s chief financial officer), and through its
banking representative(s), make reasonable financial information concerning the
Tenant, available to the Landlord and, if applicable, the credit representative
of the Landlord’s mortgage lender. Such information shall be treated as
confidential by the Landlord and, if applicable, the Landlord’s mortgagee.

 

37.Letter of Acceptance:

37.1        Upon the Tenant’s accepting the Demised Premises and entering into
possession, after Substantial Completion, as defined in Article 40, of the
Landlord’s improvements pursuant to the terms and conditions hereof, the Tenant
covenants and agrees that it will furnish to the Landlord a written statement
that it accepts the Demised Premises, subject to latent defects and Punch List
Items, and subject to the terms and conditions of this Lease.

 

38.Miscellaneous Provisions:

38.1        This Lease shall not be strictly construed against either Landlord
or Tenant; the captions in this Lease are for convenience only and are not a
part of this Lease; except as otherwise expressly provided in this Lease and its
Schedules and other attachments, the singular includes the plural and the plural
includes the singular; “or” is not exclusive; a reference to any laws includes
any amendment or supplement to such laws; a reference to a person or other
entity includes its permitted successors and assigns; accounting provisions have
the meanings assigned to them by generally accepted accounting principles
applied on a consistent basis in the United States; the words “such as,”
“include,” “includes” and “including” are not limiting; except as specifically
agreed upon in this Lease, any right may be exercised at any time and from time
to time and all obligations are

 

 40 

 

 

continuing obligations throughout the Term, and in calculating any time period,
the first day shall be excluded and the last day shall be included and all days
are calendar days unless otherwise specified.

 

38.2        This Lease shall be construed and enforced according to the laws of
the State of New Jersey.

 

38.3        If more than one person or entity shall sign this Lease as Tenant,
the obligations set forth herein shall be deemed joint and several obligations
of each such party.

 

38.4        If any term or provision of this Lease, the deletion of which would
not adversely affect the receipt of any material benefit by either party
hereunder, shall be held invalid or unenforceable to any extent, the remaining
terms, conditions and covenants of this Lease shall not be affected thereby, and
each of said terms, covenants and conditions shall be valid and enforceable to
the fullest extent permitted by law.

 

38.5        Landlord and Tenant each warrant to the other that all consents or
approvals for the execution, delivery and performance of this Lease have been
obtained, that each has the right and authority to enter into and perform its
covenants contained in this Lease, and that this Lease is binding upon such
Party in accordance with its terms.

 

38.6        The provisions of this Lease which relate to periods subsequent to
the expiration of the Term shall survive the expiration of the Term for the
period of time indicated in each such provision. In the event a specific time
period is not indicated in a particular provision, then the provision shall
survive for an indefinite period of time.

 

38.7        This Lease may not be altered, changed or amended, except by an
instrument in writing executed by all parties hereto, and executed by, or
consented to in writing by the Guarantor.

 

38.8        The terms and provisions of Schedules attached hereto are
incorporated into and made a part of this Lease for all purposes.

 

38.9        This Lease may be executed in any number of counterparts, all of
which shall be considered one and the same Lease notwithstanding that all
parties hereto have not signed the same counterpart. The signature of any party
to this Lease which is transmitted by facsimile shall be valid for all purposes.
Any party shall, however, deliver an original signature of this Lease to the
other party upon request.

 

38.10      This Lease (including all schedules hereto) constitutes the entire
agreement of the parties with respect to the subject matter hereof and all prior
and contemporaneous written and oral agreements are merged herein.

 

38.11      This Lease and all documents relating thereto, specifically excluding
the original Guaranty but including, without limitation, consents, waivers and
modifications which may hereafter be executed, financial and operating
statements, certificates and other information previously or hereafter furnished
to Landlord, may be reproduced by Landlord by any digital, computer,
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and Landlord may destroy any original document (“Master”)
so reproduced. Tenant agrees and stipulates that any such reproduction is an
original and shall be admissible in evidence as the Master in any judicial or
administrative proceeding (whether or not the Master is in existence and whether
or not such reproduction was made or preserved by Landlord in the regular course
of business) and any enlargement, facsimile or further reproduction of such a
reproduction shall be no less admissible.

 

38.12      Landlord hereby expressly waives any and all rights granted by or
under any present or future laws to distrain for rent, in arrears, in advance or
both, upon all goods, merchandise, removable equipment or other tangible
personal property owned by Tenant which is located at the Demised Premises, or
to levy or seize any of the assets of Tenant without judicial order permitting
such action obtained on notice to Tenant as required by law.

 

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38.13      Landlord covenants that throughout the Term and the option renewal
period, if exercised, it shall not lease space within Landlord’s Premises to any
pornographic or X-rated establishments nor for sale or display of pornographic
material, or for live-nude or semi-nude performances, nude modeling, rap
sessions, or as a so-called 'rubber goods' store, or as a sex club of any sort,
or as a massage parlor, gambling or gaming establishment, medical or psychiatric
offices or a medical care clinic, or any immoral or illegal purpose.

 

39.Rules and Regulations:

39.1        Tenant shall comply with the Rules and Regulations as reasonably
adopted, amended and repealed by the Landlord from time to time for the use,
operation and occupancy of the Landlord’s Premises. A copy of the Rules and
Regulations currently in effect on the date of this Lease is annexed hereto and
incorporated herein by reference as Schedule “F.” A breach of the Rules and
Regulations shall be a breach of this Lease. Landlord shall give the Tenant
notice of the future adoption, amendment or repeal of Rules and Regulations, and
same shall be binding upon Tenant and shall be deemed incorporated herein thirty
(30) calendar days after service upon the Tenant.

 

40.Allowance Improvements:

40.1        As part of the Tenant’s Improvements, the Landlord shall provide to
Tenant a monetary allowance in the amount of Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00) (hereinafter referred to as the “Allowance Amount”)
for the installation of interior improvements in the Demised Premises including,
but not limited to new carpet, paint, replacement of ceiling tiles, office
layout modifications, construction of a restroom on the second floor mezzanine
and refurbishment of restrooms on the first floor (the “Allowance
Improvements”). The plans and specifications for the Allowance Improvements
shall be completed by the architectural staff of Landlord’s affiliate, Russo
Development, LLC (“Russo Development”), with the consultation of and approval of
Tenant. Tenant shall review and consent to plans and specifications for the
Allowance Improvements within twenty (20) business days after submission for
approval. Landlord and Tenant shall cooperate to insure that all plans and
specifications for the Allowance Improvements are completed and approved no
later than December 1, 2011.

 

40.2        Tenant understands and agrees that the Allowance Amount set forth in
Section 40.1 of this Lease does not represent a guarantee, representation or
estimate of the total cost of the work for which allowances are granted. All
work and materials installed for the improvements paid for by the Allowance
Amount (the “Allowance Improvements”) shall be performed by the Landlord
utilizing Russo Development as its Construction Manager at “Landlord’s Cost” as
defined below; provided that work in respect of Tenant Improvements not paid for
from the Allowance Amount may, at Tenant’s option, be performed by Tenant using
a third party contractor (subject to Landlord’s reasonable approval of such
contractor as herein provided). Prior to commencement of each phase of Allowance
Improvements, the Landlord shall provide the Tenant with a detailed breakdown of
the estimated cost (hereinafter referred to as a “Landlord Cost Breakdown”) plus
a ten (10%) percent markup for profit and a ten (10%) percent markup for
overhead for all work done by Russo Development and its affiliates directly, and
five (5%) percent markup for profit and a five (5%) percent markup for overhead
for work subcontracted to unaffiliated contractors of Russo Development, but
supervised by Russo Development as the Landlord’s Construction Manager
(collectively the “Landlord’s Costs”);provided that, if Tenant elects to utilize
a third party contractor for any Tenant’s Improvements not paid for by the
Allowance Amount, Landlord shall not be entitled to any profit, overhead or
other payment in respect thereof. The Landlord’s Costs shall be commercially
reasonable and shall be negotiated by the Landlord and the Tenant in good faith.
The Landlord’s Costs shall not

 

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include any overtime costs necessary to meet the Substantial Completion Date,
unless such overtime is required due solely to changes in the Allowance
Improvements or the scheduling of the Allowance Improvements requested by
Tenant. The parties shall agree upon the Landlord’s Cost and the Tenant shall
provide written approval of the Landlord’s Cost before the Landlord is obligated
to commence the applicable phase of the Allowance Improvements. All permit fees
paid by the Landlord for the Allowance Improvements shall be added to the
Landlord’s Cost without markup for profit or overhead. All design work completed
by the Landlord’s or Russo Development’s consultants for the Allowance Work
shall be added to the Landlord’s Costs without markup for profit or overhead.
All costs for architectural design work completed by Russo Development’s
in-house architectural staff will be completed at no cost to the Tenant and will
not be added to the Landlord’s Cost.

 

40.3        If the aggregate Landlord’s Cost for completion of all of the
Allowance Improvements exceeds the Allowance Amount provided for in this Lease
(such excess being referred to as the “Excess Landlord’s Cost”), the Tenant
shall pay the Excess Landlord’s Cost to Landlord within thirty (30) days after
Substantial Completion of all Allowance Improvements. In the event of Tenant’s
default in this obligation, Landlord shall have all of the same remedies
afforded under this Lease in the case of a default in payment of Rent.
Similarly, in the event that the Allowance Amount exceeds the Landlord’s Cost,
then the Landlord shall refund the balance due to the Tenant within thirty (30)
days from Substantial Completion of the Allowance Improvements.

 

40.4        The Allowance Improvements shall be deemed “Substantially Complete”
and the “Substantial Completion Date” shall be the date on which (a) the Russo
Development’s architect has certified in a writing served upon Tenant that
Landlord has completed the Allowance Improvements, other than Punchlist Items
(as defined below) and (b) Landlord has delivered to Tenant a conditional or
temporary occupancy certification from the New Jersey Meadowlands Commission and
a conditional or temporary certificate of occupancy from the Borough of
Carlstadt allowing the Tenant to enter into possession of the Demised Premises
subject only to completion of Punch List Items (as hereinafter defined).

 

40.5        Not less than five (5) business days prior to the Substantial
Completion Date, Landlord shall furnish Tenant with a detailed punch list of
minor items, which will not be completed by the Substantial Completion Date and
which will not materially or adversely interfere with the Tenant’s use and
occupancy of the Demised Premises for its normal business operations (the “Punch
List”). Tenant shall have the right to supplement the Punch List for a period of
sixty (60) days after the Substantial Completion Date. The Punch List shall not
include the repair of any items that are damaged solely as a result of actions
of Tenant, its employees, agents, invitees or contractors. Landlord shall
promptly after Substantial Completion complete the work on the Punch List as
soon as reasonably possible. Landlord and Tenant shall work together in good
faith to prepare and agree upon the Punch List; provided, however, in the event
the parties cannot agree on any item to be included or not included on the Punch
List within ten (10) days of the identification of such item, then the
determination of whether or not such item should be included in the Punch List
shall be made by an independent architect selected by mutual agreement of
Landlord and Tenant or, if the parties cannot agree on the selection of an
architect, then the architect shall be assigned by the Assignment Judge of the
Superior Court of New Jersey in Bergen County. Work included on the Punch List
shall be performed without unreasonably interfering with Tenant’s business
operations at the Demised Premises. Landlord agrees to diligently pursue
completion of all items on the Punch List within thirty (30) days after
preparation of such Punch List or, if any such items cannot reasonably be
expected to be corrected within such thirty (30) day period, then Landlord shall
commence such correction and diligently pursue it to completion in no event
later than one hundred twenty (120) days thereafter.         

 

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40.6        Promptly after agreement on the plans and specifications for the
Allowance Improvements and receipt of all permits necessary for the construction
of the Allowance Improvements (which Landlord will file for promptly), Landlord
shall commence performance thereof, shall diligently and without delay prosecute
such work to completion, and shall deliver the Demised Premises to Tenant with
all Allowance Improvements complete within three months after commencement of
work (i.e., by May 1, 2012 if Landlord can commence work on January 1, 2012 or
June 1, 2012 if Landlord can commence work on February 1, 2012), subject to
extension for changes in the Allowance Improvements requested by Tenant. The
Allowance Improvements shall be performed in a good and workmanlike manner in
accordance with the plans and specifications agreed to by Landlord and Tenant
and shall comply with all legal requirements.

 

41.Option to Renew:

41.1        Tenant shall have the right to renew its lease for the Demised
Premises for one (1) ten (10) year period by providing Landlord with written
notice not less than twelve (12) calendar months prior to the Termination Date,
provided and on the condition that the Tenant delivers the written consent of
the Guarantor to the extension of the Term of the Lease with the notice of
Tenant’s exercise of the Option to Renew. TIME FOR NOTICE OF EXERCISE OF
TENANT’S OPTION IS HEREBY DECLARED TO BE OF THE ESSENCE, and a failure to
provide timely notice shall operate as an irrevocable waiver of all rights under
this Section 41.1.

 

41.2        The initial base rent for the first year of renewal option period
shall be the greater of: (i) the Fixed Rent set forth on Schedule B-1 annexed
hereto or made a part hereof; or (ii) ninety-five percent (95%) of the
then-prevailing Fair Market Rental Rate (“FMRR”), and such amount shall increase
by 3% each year. The FMRR shall take into account all relevant factors,
including without limitation, the financial strength of the Tenant, and
comparable leases (on the basis of factors such as, but not limited to, size and
location of space and the term of the lease), if any, recently executed for
space in other buildings in the Pertinent Market which are comparable to the
Demised Premises in reputation, quality, age, size, location and quality of
services provided, and the fact that landlord will not be required to provide
any allowances or free rent or to pay a brokerage commission. For the purposed
hereof, “Pertinent Market” shall mean within ten (10) miles of the location of
the Demised Premises. If Landlord and Tenant do not agree on the FMRR within
thirty (30) days of Tenant’s notice that it has exercised its option, the FMRR
shall be determined by arbitration before a single arbitrator who shall be a
real estate broker who is a licensed appraiser in New Jersey with at least
fifteen (15) years of relevant prior experience and who is actively involved in
commercial real estate transactions within the Pertinent Market. The arbitrator
shall be selected by mutual agreement of the parties within twenty (20) days
after the expiration of such 30-day negotiation period, or, if the parties
cannot agree on the selection of an arbitrator, then the arbitrator shall be
assigned by the Assignment Judge of the Superior Court of New Jersey in Bergen
County. The arbitration shall be conducted in accordance with the Commercial
Arbitration, expedited procedures then utilized and in effect with the American
Arbitration Association (AAA), although it shall not be conducted before the
AAA. The Arbitrator shall render a written decision within not more than
forty-five (45) days after submission.

 

41.3        Except as to the amount of Fixed Rent, all of the other terms,
covenants, conditions and agreements set forth in this Lease shall apply to all
renewal terms; except that there shall be no further options to renew this
Lease.

 

42.Incorporation of Recitals.

42.1.       The recitals set forth in this Lease are hereby incorporated into
this Lease.

 

 44 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed or caused to be executed,
these presents, as of the date first hereinabove set forth.

 

Signed, Sealed and Delivered   400 COMMERCE BOULEVARD, LLC   in the Presence of:
                      By:           Edward Russo, Manager             ATTEST:  
THE DONNA KARAN COMPANY, LLC                 By:    

 

 45 

 

 

Schedule “A”

Lease Plan

 

 46 

 

 

Schedule “B”

Fixed Rent During Initial Term

 

Total SF:   197,445                             Lease Year  Rent PSF   Annual
Rent   Monthly Rent  May 1, 2012 - April 1, 2013 *  $7.25   $1,312,186.56  
$119,289.69  May 1, 2013 - December 31, 2013 **  $7.25   $954,317.50  
$119,289.69  January 1, 2014 - April 30, 2014 ***  $7.50   $493,612.50  
$123,403.13  May 1, 2014 - April 30, 2015  $7.50   $1,480,837.50   $123,403.13 
May 1, 2015 - April 30, 2016  $7.50   $1,480,837.50   $123,403.13  May 1, 2016 -
April 30, 2017  $8.00   $1,579,560.00   $131,630.00  May 1, 2017 - April 30,
2018  $8.00   $1,579,560.00   $131,630.00  May 1, 2018 - April 30, 2019  $8.00  
$1,579,560.00   $131,630.00  May 1, 2019 - April 30, 2020  $8.00  
$1,579,560.00   $131,630.00  May 1, 2020 - April 30, 2021  $8.50  
$1,678,282.50   $139,856.88  May 1, 2021 - April 30, 2022  $8.50  
$1,678,282.50   $139,856.88  May 1, 2022 - April 30, 2023  $8.50  
$1,678,282.50   $139,856.88  May 1, 2023 - April 30, 2024  $8.50  
$1,678,282.50   $139,856.88          $18,753,161.56      

 

* Rent charged on 11 of 12 months for the first lease year

** Indicates an eight month lease period

*** Indicates a four month lease period

 

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Schedule “B-1”

Fixed Rent For Option Term Unless FMRR Applies

 

Total SF:   197,445                             Lease Year  Rent PSF   Annual
Rent   Monthly Rent  May 1, 2024 - April 30, 2025  $9.50   $1,875,727.50  
$156,310.63  May 1, 2025 - April 30, 2026  $9.50   $1,875,727.50   $156,310.63 
May 1, 2026 - April 30, 2027  $9.50   $1,875,727.50   $156,310.63  May 1, 2027 -
April 30, 2028  $10.00   $1,974,450.00   $164,537.50  May 1, 2028 - April 30,
2029  $10.00   $1,974,450.00   $164,537.50  May 1, 2029 - April 30, 2030 
$10.00   $1,974,450.00   $164,537.50  May 1, 2030- April 30, 2031  $10.00  
$1,974,450.00   $164,537.50  May 1, 2031 - April 30, 2032  $10.50  
$2,073,172.50   $172,764.38  May 1, 2032 - April 30, 2033  $10.50  
$2,073,172.50   $172,764.38  May 1, 2033 - April 30, 2034  $10.50  
$2,073,172.50   $172,764.38  May 1, 2034 - April 30, 2035  $10.50  
$2,073,172.50   $172,764.38  Total Rent for Renewal Term       $21,817,672.50  
   

 

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Schedule “C”

Routine Landlord Maintenance

 

1.HVAC Systems: Landlord shall enter into a maintenance contract for all HVAC
equipment and systems including, but not limited to, unit heaters, rooftop
package heating/cooling systems, and exhaust fans. The maintenance contract
shall require that all systems be inspected, maintained and repaired
approximately four (4) times each year.

 

2.Material Handling Systems: Landlord shall enter into a maintenance contract
for all dock levelers, dock seals, loading doors and other loading accessories.
The maintenance contract shall require that all equipment be inspected,
lubricated, adjusted, cleaned and otherwise maintained and repaired
approximately two (2) times each year.

 

3.Exterior Walls: Landlord’s maintenance to the exterior brick walls may include
the application of a waterproofing material such as Prime-a-Pel or an equivalent
substitute, if and as needed, approximately one (1) time every five (5) years.
Landlord’s maintenance to the exterior block walls may include the application
of a paint and waterproofing material, if and as needed, approximately one (1)
time every five (5) years. All exterior caulking shall be removed and replaced,
if and as needed, approximately one (1) time every ten (10) years. The work
described in this paragraph 3 was last completed in June of 2007.

 

4.Parking & Loading Areas: All paved areas may be resurfaced, if and as needed,
approximately once every ten (10) years. This work may include, but not be
limited to, the removal and replacement of approximately two (2”) inches of fine
aggregate top course asphalt, and removal and replacement of concrete aprons,
curbs, sidewalks, and brick pavers. This work was last completed in June of
2009.

 

5.Elevators: All elevators may be inspected, maintained, and repaired as needed,
approximately two (2) times each year.

 

6.Exterior Signage: All non-masonry components of the exterior signage may be
inspected, maintained and repaired as needed, approximately one (1) time every
year.

 

7.Exterior Lighting: All exterior site lighting may be inspected regularly to
insure that fixtures are operating properly. All light bulbs may be inspected
and replaced as needed, approximately once per year and all and ballasts shall
be inspected and replaced as needed, approximately one (1) time every two (2)
years.

 

8.Stormwater Management: All stormwater management improvements including, but
not limited to, detention basins, water quality basins, StormceptorsTM, sand
filters, catch basins, and trench drains may be inspected, cleaned and repaired
once every six (6) months.

 

9.Landscaping: The Landlord shall contract to have all landscaped areas
maintained at least one (1) day per week during the growing season
(approximately April through November). This work shall consist of: (i) mowing,
fertilizing, and irrigation of all lawn areas; (ii) placement of mulch and
“annual” plants in landscaped beds; (iii) pruning, spraying, and other pest
control for trees, shrubs, and perennials; (iv) general cleanup of the Demised
Premises.

 

 49 

 

 

10.Snowplowing: The Landlord will contract to have all paved areas and sidewalks
snowplowed when accumulations exceed one (1) inch and salted whenever icy
conditions exist.

 

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Schedule “D”

Restoration at the end of the Lease Term

 

As part of its obligation to maintain the Demised Premises and to restore it to
substantially its original condition subject to the passage of time, at Tenant’s
sole cost and expense, prior to the Termination Date, and without limiting the
terms of the Lease, the Tenant shall be responsible for the following items in
connection with the restoration of the Demised Premises (the “Restoration
Work”). All Restoration Work to be completed by Tenant shall be at Tenant’s sole
cost and expense. All Restoration Work to be completed by Landlord shall be
deducted from Tenant’s Security Deposit, provided that if the cost of the
Restoration Work completed by Landlord exceeds Tenant’s Security Deposit, Tenant
shall pay the difference to Landlord within thirty (30) days of Landlord’s
invoice for said work. The provisions of this section shall survive the
expiration of the Lease Term.

 

1.Tenant shall completely remove all material handling systems and equipment
including, but not limited to, racking, pallets, fencing, conveyor systems, pump
jacks, and forklifts. All anchor bolts installed in the warehouse floor shall be
removed and the resulting penetrations shall be caulked with a Landlord approved
epoxy material such as Euclid-500 or and equivalent material. All structural
supports suspended from the roof frame to support material handling equipment
shall also be completely removed.

 

2.Tenant shall remove all its personal property including, but not limited to
furniture, equipment, racking systems, material handling equipment, files,
decorations, plants, throw rugs, and computers.

 

3.Tenant shall replace any damaged or missing ceiling grid and ceiling tiles.
All walls, doors, door hardware, cabinets, counters, wall coverings, and tile
floors shall be in good working order and condition. All kitchen systems and all
bathroom systems including, but not limited to, pipes within the demised
premises, urinals, toilets, showers, lavatories, lockers, mirrors, and
accessories shall be in good working order and condition.

 

4.Tenant shall replace all light bulbs, ballasts, lenses and other accessories
for light fixtures throughout the entire warehouse and office areas of the
Demised Premises that are not in good working order and condition. This includes
the obligation of Tenant to pay Tenant’s Proportionate Share of replacement of
such items in all light fixtures on the exterior of the Building. All electric
circuits, switches, conduit and other electrical systems shall be in good
working order and condition. There shall be no exposed wiring, open junction
boxes, and missing outlet and/or switch covers.

 

5.Tenant shall remove all in-rack sprinkler systems including system acquired
from previous tenant, if any, and restore the sprinkler system to its original
configuration as delivered to Tenant at the Commencement Date.

 

Upon Tenant’s vacation of the Demised Premises, but prior to the Termination
Date, Landlord shall inspect the Demised Premises to determine if Tenant has not
completed any Restoration Work. Landlord shall provide Tenant with a list of all
outstanding Restoration Work, including a cost estimate for each item, within
seven (7) days of Landlord’s inspection. Landlord shall complete all outstanding
Restoration Work, including but not limited to the following items, at Tenant’s
sole cost and expense:

 

 51 

 

 

1.Landlord shall repair all exterior sidewalks, curbs, and paved areas that are
in need of repair or have been damaged by Tenant, its subtenants, employees,
agents, invitees and contractors during Tenant’s occupancy of the Demised
Premises.

 

2.Landlord shall repair and/or replace all dock seals, dock bumpers, loading
doors and levelors that have been damaged by Tenant since Landlord’s last
routine maintenance inspection, which shall be provided to Tenant promptly after
receipt by Landlord. .

 

3.Landlord shall paint all exterior railings and other exposed steel surfaces,
if required.

 

4.Landlord shall clean the entire warehouse floor with a ride-on scrubbing
machine.

 

5.Landlord shall repair all large penetrations and other areas in warehouse
floor, including construction/control joints, which have been materially damaged
by forklift traffic, acids leaking from forklift batteries or otherwise by
removing and replacing these areas in accordance with Landlord’s specification.

 

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Schedule “E”

Limited Guarantee of Lease

 

In consideration of, and as the material inducement for the granting, execution
and delivery of a certain Lease dated as of ________________, 2011, (hereinafter
called the “Lease”) by 400 COMMERCE BOULEVARD, LLC, a limited liability company
of the State of New Jersey (hereinafter called the “Landlord”), to THE DONNA
KARAN COMPANY LLC, a limited liability company of the State of Delaware
(hereinafter called the “Tenant”), and in further consideration of the sum of
TEN DOLLARS ($10.00) and other good and valuable consideration paid by the
Landlord to the undersigned, the receipt whereof is hereby acknowledged, the
undersigned, (hereinafter called the “Guarantor”), hereby guarantees to the
Landlord, its successors and assigns, the full and prompt payment of all Fixed
Rent, Supplemental Rent, Additional Rent and any and all other sums and charges
payable by the Tenant, its successors and assigns, under said Lease including,
without limitation, monetary damages arising from a breach of the Lease by
Tenant, its successors and assigns, and the full performance and observance of
all the monetary or financial covenants therein provided to be performed and
observed by the Tenant, its successors and assigns, pursuant to the Lease, and
the Guarantor hereby covenants and agrees with the Landlord, its successors and
assigns, that if default shall at any time be made by the Tenant, its successors
and assigns, in the payment of any such Fixed Rent, Supplemental Rent, or
Additional Rent or other sums payable by the Tenant under said Lease, or in the
performance of any of the monetary or financial covenants contained in the said
Lease, the Guarantor will, if said default remains uncured after notice to
Tenant and expiration of the applicable cure period under the Lease after thirty
(30) days written notice to Guarantor forthwith pay such Fixed Rent,
Supplemental Rent, or Additional Rent or other sums to the Landlord, its
successors and assigns, and any arrears thereof, and will forthwith faithfully
perform and fulfill all of such terms, covenants, conditions and provisions, and
will forthwith pay to the Landlord all reasonable and foreseeable damages, as
set forth in the Lease, that may arise in consequence of any default beyond
applicable notice and grace periods by the Tenant, its successors and assigns,
under said Lease, including reasonable attorneys’ fees incurred by Landlord
because of said default, pursuant to the terms and conditions as set forth in
the Lease.

 

Notwithstanding anything to the contrary in this Guaranty or in the Lease, the
total liability of the Guarantor hereunder shall never in any case exceed and
shall be and is strictly limited to a maximum sum of Six Million and 00/100
($6,000,000.00) Dollars.

 

This Guaranty is a guaranty of payment of all monetary obligations of the
Tenant, its successors and assigns, under the Lease. It shall be enforceable
against the Guarantor, its successors and assigns, without the necessity of any
suit or proceedings on the Landlord’s part of any kind or nature whatsoever
against the Tenant, its successors and assigns, and without the necessity of any
notice of non-payment, non-performance or non-observance of any notice of
acceptance of this Guaranty except the written notice required by this Agreement
and the Guarantor hereby expressly agrees that the validity of this Guaranty and
the obligations of the Guarantor hereunder shall in no way be terminated,
affected or impaired by reason of the assertion or the failure to assert by the
Landlord against the Tenant of any of the rights or remedies reserved to the
Landlord pursuant to the provisions of the said Lease. Notwithstanding anything
to the contrary Guarantor shall have all defenses, right and remedies of Tenant
under the Lease.

 

This Guaranty shall be a continuing Guaranty, for and during the original term
and, provided that Guarantor has consented to a renewal term or terms, any
renewal term or terms of the foregoing

 

 53 

 

 

Lease. The liability of the Guarantor hereunder shall in no way be affected,
modified or diminished by reason of any assignment, or modification of the Lease
provided that Guarantor has consented in writing to such assignment or
modification of the Lease, or any dealings or transactions occurring between
Landlord and Tenant, or any bankruptcy, insolvency, reorganization, liquidation,
arrangement, assignment for the benefit of creditors, receivership, trusteeship
or similar proceeding affecting Tenant, whether or not notice thereof is given.
In the event of: (i) the sale, transfer or hypothecation of the assets, stock or
other means of Guarantor’s controlling interest of Tenant by Guarantor; or (ii)
any assignment or transfer of the Lease Landlord shall not unreasonably withhold
its consent to an assignment of this Guaranty to, and the assumption of this
Guaranty by a business entity which in the Landlord’s reasonable judgment is a
reasonable substitute for the Guarantor considering both the reputation and
financial capacity of the proposed substitute Guarantor; and upon any such
assignment and assumption by such an entity, Landlord shall release the
undersigned Guarantor from further liability hereunder and shall look solely to
the assignee for performance of this Guaranty.

 

Until all the covenants and conditions regarding the payment of Fixed Rent,
Supplemental Rent and/or Additional Rent in said Lease on Tenant’s part to be
performed and observed are fully performed and observed, Guarantor shall have no
right of subrogation against Tenant by reason of any payments or acts of
performance by the Guarantor, in compliance with the obligations of the
Guarantor hereunder.

 

All of the Landlord’s rights and remedies under the said Lease or under this
Guaranty are intended to be distinct, separate and cumulative and no such right
and remedy therein or herein contained is to be in exclusion of or a waiver of
any of the others.

 

No delay on the part of Landlord in exercising any right, power or privilege
under this Guaranty or failure to exercise the same shall operate as a waiver
of, or otherwise affect any such right, power or privilege, nor shall any single
or partial exercise thereof preclude any other or further exercise of any right,
power or privilege.

 

No waiver or modification of any provision of this Guaranty or the Lease shall
be effective unless in writing and signed by Landlord and Guarantor, nor shall
be chargeable to and paid by the Guarantor.

 

The Guarantor irrevocably consents to jurisdiction and venue of any cause of
action arising under or relating to the said Lease and/or this Guaranty solely
and exclusively in the state or federal courts of New Jersey. The Guarantor
hereby irrevocably consents and agrees to transfer of any such action pending in
any other jurisdiction to the state or federal courts in New Jersey. The
Guarantor agrees that service of process in the same manner as provided herein
for service of notices shall be sufficient to obtain in personam jurisdiction
over the Guarantor in any action instituted by Landlord to enforce this Guaranty
in the state or federal courts of New Jersey.

 

Any notice to or demand of Guarantor hereunder shall be delivered by hand or
reputable overnight courier service, mailed by certified or registered mail, to
Guarantor at 22, avenue Montaigne, 75008 Paris, Attention: General Counsel with
a copy to LVMH Moet Hennessy Louis Vuitton Inc., 19 East 57th Street, New York,
New York 10022 Attention: General Counsel or to such other address within the
United States as Guarantor shall furnish in writing to Landlord. Any such notice
or demand shall be deemed to have been given on the date of receipted delivery
or refusal to accept delivery as

 

 54 

 

 

provided herein or the date delivery is first attempted but cannot be made due
to a change of address of which no notice was given

 

GUARANTOR AND LANDLORD EACH HEREBY WAIVES TRIAL BY JURY AND THE RIGHT THERETO IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE, ARISING ON, UNDER OR BY REASON
OF OR RELATING TO, THIS GUARANTY OR ANY AGREEMENT COLLATERAL HERETO.

 

This Agreement is entered into in the State of New Jersey and shall be governed
and construed according to the laws of the State of New Jersey.

 

IN WITNESS WHEREOF, the Guarantor has hereunto set its hand and seal this __ day
of November, 2011.

 

WITNESS:   LVMH MOET HENNESSY LOUIS VUITTON S.A.                                
    By:    

 

ACKNOWLEDGMENT:

 

State of )   ) SS. County of )

 

On this _____ day of ______________, 2011,

_____________________________________________, personally came before me and
stated to my satisfaction that this person:

(a) was the maker of the attached instrument;

(b) was authorized to and did execute this instrument as
_________________________ of LVMH MOET HENNESSY LOUIS VUITTON, S.A., the entity
named in this instrument; and

(c) the seal affixed to the said instrument is such entity seal and it was so
affixed by Resolution/Order of the of the Members/Board of Directors of said
entity;

(d) executed this instrument as the act of the entity named in this instrument.

 

        Notary Public  

 

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Schedule “F”

Rules and Regulations

 

1.Tenant will undertake a general maintenance program, either through its own
employees or outside contractors, for general and periodic window cleaning for
the Demised Premises, when necessary.

 

2.Tenant shall not permit debris, paper or other waste from accumulating in the
parking lot, landscape or open space areas as a result of actions of Tenant. If
Tenant is not keeping the exterior of the Demised Premises free from such waste
and refuse in Landlord’s reasonable judgment, Landlord shall contract for the
routine cleanup of this area at the sole cost and expense of Tenant.

 

3.Tenant shall, at all times, supply sufficient heat to assure that the Demised
Premises is kept at a temperature greater than fifty (50) degrees Fahrenheit.

 

4.All movable material handling equipment in the warehouse area shall use only
soft, rubber wheels and no such equipment shall use hard rubber, steel, or
plastic wheels.

 

5.Tenant agrees that it will supply the names, addresses and telephone numbers
of at least two (2) representatives of Tenant who can be contacted in the event
of an emergency. Tenant will keep such “emergency list” current.

 

6.Any loading equipment installed/replaced by Tenant at the Demised Premises
shall be as follows:

 

Loading Doors:

All new loading doors shall be manual, vertical lift insulated steel sectional
doors as manufactured by Fimbel Door Corporation or an approved equivalent
manufacturer to include the following:

1.Full perimeter weatherseals

2.2” thick foam in place insulated sections

3.Inside slide locks

4.One (1) 20” x 5” vision lite

5.Color to be factory prefinished white.

 

Dock Levelers:

All new dock levelers shall be 6’0” x 8’0”, 35,000 lbs. capacity mechanical dock
levelors manufactured by Rite-Hite Corporation

 

Dock Seals:

All new dock seals for 8’0” x 8’0” openings shall be Frommelt Model ATP 791
painted black. All new dock seals for any other size opening shall be Frommelt
Model ATP 793 with adjustable, pull-rope curtain headers and overlapping 8”
Armor Pleats on side pads and head curtain.

  

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7.Any roofing system which may be installed by the Tenant at the Demised
Premises shall be to the following specification:

 

Carlisle Golden Seal Total Roofing System:

All new roofing systems shall be a fully adhered single-ply .060 mil EPDM roof
as manufactured by Carlisle, Firestone or an equivalent manufacturer. The roof
membrane and insulation shall have a warranty from the roof manufacturer for a
period of no less than ten (10) years.

 

Upon notice by Landlord to Tenant of a breach of any of the Rules and
Regulations Tenant shall, within five (5) days thereafter, comply with such rule
and regulation and in the event Tenant shall not comply, then Landlord may at
its discretion either: (i) cure such condition and add any reasonable cost and
expense incurred by the Landlord therefore to the next installment of Additional
Rent due under the Lease; or (ii) treat such failure on the part of the Tenant
to remedy such condition as a material breach of the Lease on the part of the
Tenant.

 

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