Exhibit 10.4
Agreement of Lease
Between
▇▇▇▇ ATLANTIC PROPERTIES, INC.
(LANDLORD)
AND
▇▇▇▇▇▇▇▇ CORPORATION, T/A ▇▇▇▇▇▇▇▇ COMPUTER CENTERS
(TENANT)
DATED APRIL 1, 1992
TABLE OF CONTENTS
ARTICLE TITLE PAGE NO.
------- ----- --------
1. DEMISED PREMISES................................................... 1
2. LEASE TERM......................................................... 1
3. FIXED RENT......................................................... 1
4. ADDITIONAL RENT.................................................... 3
5. SECURITY DEPOSIT................................................... 3
6. USE OF DEMISED PREMISES............................................ 4
7. COMPLETION OF DEMISED PREMISES..................................... 4
8. ALTERATIONS OR IMPROVEMENTS BY TENANT.............................. 5
9. COVENANTS OF LANDLORD.............................................. 5
10. COVENANTS OF TENANT................................................ 6
11. ASSIGNMENT AND SUBLETTING.......................................... 7
12. RELOCATION OF TENANT............................................... 8
13. EMINENT DOMAIN..................................................... 8
14. CASUALTY DAMAGE.................................................... 9
15. INSURANCE; INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION...... 11
16. INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES................. 12
17. DEFAULT............................................................ 13
18. LANDLORD'S REMEDIES................................................ 13
19. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULTS......................... 16
20. ESTOPPEL CERTIFICATE............................................... 16
21. HOLDING OVER....................................................... 17
22. SURRENDER OF DEMISED PREMISES...................................... 17
23. SUBORDINATION AND ATTORNMENT....................................... 17
24. BROKERS............................................................ 18
25. NOTICES............................................................ 18
26. RIGHT OF FIRST OFFER............................................... 19
27. RENEWAL OPTION..................................................... 20
28. MISCELLANEOUS...................................................... 23
List of Exhibits
Exhibit "A": Plan of Demised Premises
Exhibit "B": Form of Confirmation of Lease Term
Exhibit "C": Provisions Regarding Additional Rent and
Adjustments to Fixed Rent
Exhibit "D": Schedule of Tenant Improvements
Exhibit "E": Janitorial Specifications
Exhibit "F": Rules and Regulations
Exhibit "G": Tenant Estoppel Certificate and Statement
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE ("Lease") is made this 1st day of April, 1992, by
and between ▇▇▇▇ ATLANTIC PROPERTIES, INC., a Delaware corporation ("Landlord")
and ▇▇▇▇▇▇▇▇ CORPORATION, T/A/ ▇▇▇▇▇▇▇▇ COMPUTER CENTERS, a New Jersey
corporation ("Tenant").
Intending to be legally bound, Landlord and Tenant agree as set forth
below.
1. DEMISED PREMISES. Landlord, for the term and subject to the provisions and
conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space
(the "Demised Premises") containing 15,596 rentable square feet, as shown on
Exhibit "A" attached hereto and made a part hereof, in the building (the
"Building") known as ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ erected on certain land (the "Land")
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, together with
rights of ingress and egress thereto, and with the right in common with others
to use, to the extent applicable, the elevators and common passageways,
stairways, vestibules, and to pass over and park on that portion of land owned
by Landlord and designated by the Landlord for Tenant's parking. The Building
contains 25,351 rentable square feet.
2. LEASE TERM. The lease term (the "Lease Term") shall commence on the
commencement date (the "Commencement Date") which shall be the later of: (i) the
date on which Tenant shall take possession of the Demised Premises, (ii) the
fifth (5th) calendar day following the date of Substantial Completion as defined
in Article 7 hereof, or (iii) July 1, 1992, and shall continue for five (5)
years and nine (9) months thereafter unless extended or sooner terminated as
provided herein. Upon actual determination by Landlord of the Commencement Date,
and consequently, the Lease Term, Landlord and Tenant shall confirm in writing
the Commencement Date and the termination date of the Lease and Tenant's
acceptance of the Demised Premises in the form attached hereto as Exhibit "B".
If the Demised Premises are ready for occupancy earlier than July 1, 1992,
Tenant shall be permitted to occupy the Demised Premises from such earlier date
through the Commencement Date without obligation to pay Fixed Rent or Additional
Rent, but otherwise upon all of the same terms and conditions set forth herein.
3. FIXED RENT.
3.1 Fixed rent (the "Fixed Rent") is payable by Tenant beginning on the
Commencement Date in monthly installments each equal to one-twelfth (1/12th) of
the annual Fixed Rent (the "Annual Fixed Rent"), according to the following
schedule:
Fixed Rent/Operating
Monthly Installment Total Expense Allowance
Period of of Annual Fixed Annual Fixed per Rentable Square
Lease Term Rent Rent for Period Foot
---------- ---- --------------- ----
Months 1 - 12 $12,346.83 $148,162.00 $6.00/$3.50
Months 13 - 24 $12,996.66 $155,960.00 $6.50/$3.50
Months 25 - 36 $13,646.50 $163,758.00 $7.00/$3.50
Months 37 - 48 $14,296.53 $171,556.00 $7.50/$3.50
Months 49 - 69 $14,946.16 $313,869.36 $8.00/$3.50
Fixed Rent is payable without prior notice or demand, and without any setoff or
deduction whatsoever, in advance, on the first day of each moth at such place as
Landlord may direct, except that the Fixed Rent for the first full month of the
Lease Term will be paid on the date of execution of this Lease. Annual Fixed
Rent shall include the Operating Expense Allowance as set forth in Section I (1)
of Exhibit "C" hereto. Annual Fixed Rent shall also be subject to adjustment as
provided in Section II of Exhibit "C" hereto. In addition, if the Lease Term
commences on a day other than the first day of a calendar month, Tenant shall
pay to Landlord, on or before the Commencement Date of the Lease Term, a pro
rata portion of the monthly installment of rent (including Fixed Rent and any
Additional Rent as herein provided), such pro rata portion to be based on the
actual number of calendar days remaining in such partial month after the
Commencement Date of the Lease Term. If the Lease Term shall expire on other
than the last day of a calendar month, such monthly installment of Fixed Rent
and Additional Rent shall be prorated for each calendar day of such partial
month. If any portion of Fixed Rent, Additional Rent or any other sum payable to
Landlord hereunder shall be due and unpaid for more than ten (10) days, it shall
thereafter bear interest at a rate equal to three percent (3%) per annum greater
than the highest prime rate of interest announced from time to time by Fidelity
Bank N.A., Philadelphia, PA (or its successor) (the "Default Rate"), as the same
may change from time to time, from the due date until the date of payment
thereof by Tenant, provided, however, that nothing herein contained shall be
construed or implemented in such a manner as to allow Landlord to charge or
receive interest in excess of the maximum legal rate then allowed by law.
Landlord and Tenant understand and agree that memos written on rental checks or
any other payment forms delivered to Landlord do not and shall not, throughout
the Lease Term hereunder, constitute satisfaction of any current or outstanding
debt of Tenant pursuant to this Lease, and, provided further that any such memo
shall not preclude Landlord from recovering any balance of any sum or sums due
under this Lease. In addition, a letter or similar type statement accompanying
any rental check or payment form delivered to Landlord pursuant to this Lease
shall also have no force or effect under this Lease as such may relate to the
satisfaction of any debt of Tenant hereunder, unless such is validly executed by
Landlord or its authorized representative.
3.2 Notwithstanding the foregoing, Fixed Rent shall not begin to accrue
until seven (7) months after the Commencement Date, as defined in Article 2
above, it being the intent that Tenant shall have a "free rent" period of seven
(7) months, provided, however, Tenant shall pay the Operating Expense Allowance
as set forth in Exhibit "C" beginning on the Commencement Date. In addition,
Tenant shall have a separate "free rent" period of three (3) months during the
thirty-fifth (35th), thirty-sixth (36th) and thirty-seventh (37th) months of the
Lease Term hereunder provided, however, that Tenant shall pay the Operating
Expense Allowance throughout this separate "free rent" period.
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It is acknowledged by the parties that each of the above- referenced "free rent"
periods were offered to Tenant to induce Tenant to enter into this Lease and to
pay the Fixed Rent accruing before and after the "free rent" periods, as
applicable. Should there be an Event of Default, as defined in Article 17 below,
during the Lease Term the "free rent" periods shall be nullified and the $6.00
per square foot annual rent during the first "free rent" period and the $7.16
average per square foot annual rent during the separate "free rent" period shall
be reinstated and shall become due and payable from Tenant to Landlord. In the
event of an Event of Default within the first seven (7) months of the Lease
Term, the total term of the Lease shall be reduced to sixty (60) months and the
Fixed Rent payments for months 61 through 69 of the Lease Term shall no longer
be due to Landlord.
4. ADDITIONAL RENT. Tenant shall pay as additional rent ("Additional Rent") its
proportionate share of all operating expenses, plus individually metered
electric costs, in the amounts and in the manner set forth in Exhibit "C"
hereto, and all other sums due hereunder. Tenant shall pay for its electric
service directly to the utility company providing such service.
5. SECURITY DEPOSIT. As security for performance of its obligations hereunder,
upon execution of this Lease Tenant has paid to Landlord and agrees to maintain
hereafter, a security deposit of Twelve Thousand Three Hundred Forty-Six Dollars
and Eighty-Three Cents ($12,346.83), receipt of which is hereby acknowledged by
Landlord. Upon the occurrence of any Event of Default (as hereinafter defined)
by Tenant, Landlord may from time to time and without prejudice to any other
remedy, use the security deposit to the extent necessary to make good any
arrears of Fixed Rent or Additional Rent, or any other damage, injury, expense
or liability caused to Landlord by such Event of Default. The remaining balance
of such security shall be returned by Landlord to Tenant within a reasonable
time after termination of this Lease; provided, however, Landlord shall not be
obligated to return the remaining balance of such security deposit until all
payments due from Tenant to Landlord pursuant to Exhibit "C" hereto shall have
been made in full. The security deposit shall not be considered an advance
payment of rent or a measure of Landlord's damages in case of default by Tenant.
Tenant shall receive no interest on such security deposit, and Landlord may
commingle the same with other monies of Landlord. In the event of the sale or
transfer of Landlord's interest in the Building, Landlord shall have the right
to transfer the security deposit to the purchaser or transferee and upon such
transfer Tenant shall look only to the new landlord for the return of the
security deposit and Landlord shall thereupon be released from all liability to
Tenant for the return of or accounting for such security deposit. Provided
Tenant is not in Default of any of the terms of this Lease, and provided further
that Tenant has fully paid all Annual Fixed Rent and Additional Rent throughout
the first year of the Lease Term hereunder, Landlord shall return the security
deposit to Tenant in the form of a credit against Tenant's next due installment
of Annual Fixed Rent.
6. USE OF DEMISED PREMISES. Tenant covenants and agrees to use and occupy the
Demised Premises for general office and storage purposes and other uses
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incidental to and associated with Class A office buildings and Tenant's business
of selling and servicing computer systems and only in conformity with the law.
Tenant shall not use or permit any use of the Demised Premises which creates any
safety or environmental hazard, or which would: (i) be dangerous to the Demised
Premises, the Building or other tenants, or (ii) be disturbing to other tenants
of the Building, or (iii) cause any increase in the premium cost for any
insurance which Landlord may then have in effect with respect to the Building
generally.
7. COMPLETION OF DEMISED PREMISES.
7.1 Tenant agrees to accept possession of the Demised Premises in an "AS
IS" condition, subject to the right of any prior tenant to remove its personal
property or improvements, except for the work to be performed by Landlord
described in Exhibit "D" hereto. Landlord shall use its best efforts to have the
Demised Premises Substantially Completed within ninety (90) days of the date of
execution of this Lease by both parties (as defined in 7.2. below) (the
"Scheduled Substantial Completion Date"), except for delays due to governmental
regulation, unusual scarcity of or inability to obtain labor or materials, labor
difficulties, casualty or other causes beyond Landlord's reasonable control, any
of which shall extend the Scheduled Substantial Completion Date for a period
equal to the total duration of each such delay.
7.2 The Demised Premises shall be deemed to be Substantially Completed
("Substantially Completed" or "Substantial Completion") when all work specified
to be done in Exhibit "D" hereto has been completed, including the installation
of systems furniture, except for: (i) minor items as identified in a "punch
list" (as that term is commonly used in the construction industry) created
pursuant to an inspection of the Demised Premises by Landlord and Tenant, or
their designated representatives, or items of furnishing to be supplied by
Landlord and items of construction of a nature not necessary to make the Demised
Premises reasonably tenantable for Tenant's use as stated herein, or (ii) office
or computer equipment to be installed or furnished by Tenant as approved by
Landlord. For each day the Demised Premises are not Substantially Completed
after the Scheduled Substantial Completion Date, Tenant shall receive one (1)
day of "free rent" for each day of delay beyond the Scheduled Substantial
Completion Date.
8. ALTERATIONS OR IMPROVEMENTS BY TENANT. During the Lease Term, Tenant shall
not make any alterations, additions, improvements, or other changes to the
Demised Premises, the cost of which is in excess of Five Thousand Dollars
($5,000.00) per occurrence without the prior written approval of Landlord and
then only in accordance with plans and specifications previously approved in
writing by Landlord and subject to such conditions as Landlord may require,
including, without limitation, that Tenant be required to pay for any increased
cost to Landlord occasioned thereby or attributed thereto. Prior to the
termination of this Lease and without additional notice to Tenant by Landlord,
Tenant shall either: (i) remove any such alterations or additions and repair any
damage to the Building or the Demised Premises occasioned by their installation
or removal and restore the Demised Premises to substantially the same
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condition as existed prior to the time when any such alterations or additions
were made, or (ii) reimburse Landlord for the cost of removing such alterations
or additions and the restoration of the Demised Premises. Landlord shall
determine any such cost as called for in clause (ii) above prior to the
termination of this Lease, and if such amount is reasonably acceptable to
Tenant, Tenant shall reimburse Landlord within thirty (30) days of receipt of
such notice. In the event of any proposed improvements by Tenant during the
Lease Term, Landlord shall advise Tenant within Ten (10) days of a written
request, whether any proposed improvements must be removed at the end of the
Lease Term, or if the Demised Premises must be restored to its original
condition upon the expiration of the Lease Term.
9. COVENANTS OF LANDLORD.
9.1 Landlord will supply for normal office use during normal business hours
Monday through Friday from 8:00 a.m. to 6:00 p.m., and Saturday from 8:00 a.m.
to 1:00 p.m., local time (excluding holidays), heat and air conditioning (except
that in the event that such utilities are separately metered and are paid by
Tenant, Landlord shall supply only the equipment for such utilities), elevator
service (where applicable), janitorial and cleaning services as set forth in
Exhibit "E" hereto, common area electricity, and hot and cold water, all in
amounts consistent with services provided in similar buildings in the community,
provided that: (i) Landlord shall not be liable for failure to supply or
interruption of any such service by reason of any cause beyond Landlord's
reasonable control and Landlord shall not be liable for consequential damages in
said event; (ii) Landlord has installed meters to measure the electricity
consumed on the Demised Premises and Tenant shall pay the cost thereof within
ten (10) business days of being billed therefor by the servicing utility
company; (iii) if Tenant requires janitorial and cleaning services beyond those
provided by Landlord, Tenant may arrange for such additional services through
Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and
(iv) if Tenant requires installation of a separate or supplementary heating,
cooling, ventilating and/or air conditioning system Tenant shall pay all costs
in connection with the furnishing, installation and operation thereof.
9.2 If at any time Tenant is not satisfied with the janitorial service
provided by Tenant, and if Tenant notifies Landlord of its dissatisfaction and
Landlord fails to remedy the situation whereby Tenant's dissatisfaction with the
janitorial service continues for a period of at least one (1) month after notice
to Landlord, Tenant shall be permitted to contract for its own janitorial
services, and Tenant's Operating Expenses shall be proportionally reduced.
10. COVENANTS OF TENANT. Tenant will (at Tenant's sole cost and expense):
10.1 Keep the Demised Premises in good order and repair, reasonable wear
and tear excepted;
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10.2 Surrender the Demised Premises at the end of this Lease in the same
condition in which Tenant has agreed to keep it during the Lease Term;
10.3 Not place, erect, maintain or display any sign or other marking of any
kind whatsoever on the windows, doors or exterior walls of the Demised Premises
and not use or place any curtains, blinds (except, those installed pursuant to
Article 7 and Exhibit "D" hereof), drapes or coverings over any exterior windows
or upon the window surfaces which are visible from the outside of the Building;
10.4 Be financially responsible for electric charges as set forth above in
Articles 4 and 9(ii), and be financially responsible for the maintenance of all
plumbing and other fixtures in the Demised Premises, whether installed by
Landlord or by Tenant and for repairs and replacements to the Demised Premises
and the Building made necessary by reason of damage thereto caused by Tenant or
its agents, servants, invitees or employees. In the event Tenant shall fail to
perform such maintenance or make such repairs within sixty (60) days of the date
such work becomes necessary, Landlord may, but shall not be required to, perform
such work and charge the amount of the expense therefor, with interest accruing
and payable thereon, all in accordance with Article 19 below;
10.5 Comply with all laws, enactments and regulations of any governmental
authority relating or applicable to Tenant's occupancy of the Demised Premises
and any covenants, easements and restrictions governing the Land or Building,
and indemnify, defend and hold Landlord harmless from all consequences from its
failure to do so;
10.6 Promptly notify Landlord of any damage to or defects in the Demised
Premises, any notices of violation received by Tenant and of any injuries to
persons or property which occur therein or claims relating thereto;
10.7 Subject to Article 7, pay for any alterations, improvements or
additions to the Demised Premises and any light bulbs, tubes and non-standard
Building items installed by or for Tenant, excluding any Tenant improvements
made pursuant to Exhibit "D" hereof, and allow no lien to attach to the Building
with respect to any of the foregoing;
10.8 Without the prior written consent of Landlord, not place within the
Demised Premises or bring into the Building (i) any machinery, equipment or
other personalty other than customary office furnishings and small machinery, or
any machinery or (ii) other personalty having a weight in excess of the design
capacity of the Building;
10.9 Not use the Demised Premises for the generation, manufacture,
refining, transportation, treatment, storage, handling or disposal of any
"hazardous substance" or "waste" (as defined in N.J.S.A. 58:10-23.11(b)(k) and
N.J.A.C.7:1-3.3) or for any purpose which poses a risk of damage to the
environment; in this regard Tenant represents that it does not have a Standard
Industrial Classification number as designated in the Standard Industrial
Classifications Manual prepared by the Office of
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Management and Budget in the Executive Office of the President of the United
States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not
engage in any activity which would subject Tenant to the provisions of the
Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42
U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act (33
U.S.C.A. Section 1151 et seq.) the Clean Water Act of 1977 (33 U.S.C.A. Section
1251 et seq.) the New Jersey Environmental Cleanup Responsibility Act, (N.J.S.A
13:1K-6, et seq.) ("ECRA") and the regulations promulgated thereunder, the New
Jersey Spill Control Act (N.J.S.A. 13:10-1, et seq. and 58:10-23.11 et seq.) or
any other federal, state or local environmental law, regulation or ordinance. In
the event Landlord shall transfer the Demised Premises within the meaning of
ECRA, Tenant shall, at its sole cost and expense, comply with all requirements
of ECRA relating thereto.
10.10 Comply with the rules and regulations set forth in Exhibit "F" hereto
and with all reasonable changes and additions thereto upon notice by Landlord to
Tenant (such rules and regulations, together with all changes and additions
thereto, are part of this Lease); and
10.11 Comply with all reasonable recommendations of Landlord's or Tenant's
insurance carriers relating to layout, use, storage of materials and maintenance
of the Demised Premises.
11. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, pledge, mortgage or
otherwise transfer or encumber this Lease, nor sublet all or any part of the
Demised Premises or permit the same to be occupied or used by anyone other than
Tenant or its employees without Landlord's prior written consent which shall not
be unreasonably withheld. Any consent by Landlord hereunder shall not constitute
a waiver of strict future compliance by Tenant of the provisions of this Article
11 or a release of Tenant from the full performance by Tenant with any of the
terms, covenants, provisions, or conditions in this Lease. For purposes of this
Article 11, any transfer or change in control of Tenant (or any subtenant,
assignee or occupant) by operation of law or otherwise, shall be deemed an
assignment hereunder ` including, without limitation, any merger, consolidation,
dissolution or any change in the controlling equity interests of Tenant or any
subtenant, assignee, or occupant (in a single transaction or a series of related
transactions). Any assignment or subletting in contravention of the provisions
of this Article 11 shall be void. Landlord's acceptance of any name submitted by
Tenant, an agent of Tenant, or anyone acting by, through or under Tenant for the
purpose of being listed on the Building directory will not be deemed, nor will
it substitute for, Landlord's consent., as required by this Lease, to any
sublease, assignment, or other occupancy of the Demised Premises by anyone other
than Tenant or Tenant's employees.
12. RELOCATION OF TENANT. Landlord, at its sole expense, on at least ninety
(90) days prior notice, may require Tenant, with Tenant's prior approval, to
move from the Demised Premises to another location of comparable size and decor
in the Building or in another building within the industrial park where the
Building is located in order to
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permit Landlord to consolidate the Demised Premises with other space leased or
to be leased by another tenant, provided, however, that in the event of receipt
of any such notice, Tenant by notice to Landlord, given within thirty (30).days
following its receipt of Landlord's notice, may elect not to move to the other
location and in lieu thereof may terminate this Lease effective on the date of
the proposed relocation set forth in Landlord's notice. In the event of any such
relocation, Landlord will pay all the expenses of preparing and decorating the
relocated premises so that they will be substantially similar to the Demised
Premises and the expense of moving Tenant's furniture and equipment to the
relocated premises. Landlord and Tenant will execute a modification of or
supplement to this Lease in respect of and identifying such relocated premises,
such to be otherwise on terms identical to the terms hereof.
13. EMINENT DOMAIN.
13.1 If the whole or more than fifty percent (50%) of the Demised Premises
(or use or occupancy of the Demised Premises) shall be taken or condemned by any
governmental or quasi-governmental authority For any public or quasi-public use
or purpose (including sale under threat of such a taking), or if the owner
elects to convey title to the condemnor by a deed in lieu of condemnation, or if
all or any portion of the Land or Building are so taken, condemned or conveyed
and as a result thereof, in Landlord's judgment, the Demised Premises cannot be
used for Tenant's permitted use as set forth herein, then this Lease shall cease
and terminate as of the date when title vests in such governmental or
quasi-governmental authority and the Fixed Rent and Additional Rent shall be
abated on the date when such title vests in such governmental or
quasi-governmental authority. If less than fifty percent (50%) of the Demised
Premises is taken or condemned by any governmental or quasi-governmental
authority for any public or quasi-public use or purpose (including sale under
threat of such a taking), the Fixed Rent and Tenant's proportionate share shall
be equitably adjusted (on the basis of the number of square feet before and
after such event) on the date when title vests in such governmental or
quasi-governmental authority and the Lease shall otherwise continue in full
force and effect. In any case, Tenant shall have no claim against Landlord for
any portion of the amount that may be awarded to Landlord as damages as a result
of any governmental or quasi-governmental taking or condemnation (or sale under
threat of such taking or condemnation). The foregoing shall not, however,
deprive Tenant of any separate award for moving expenses, dislocation damages or
for any other award which would not reduce the award payable to Landlord.
13.2 In the event that any portion of the Demised Premises shall be taken
or condemned by any governmental or quasi-governmental authority for any public
or quasi-public use or purpose, including sale under threat of such a taking, or
if the owner elects to convey title to the condemned by a deed in lieu of
condemnation, or if more than fifty percent (50%) of the Building is so taken,
condemned or conveyed and as a result thereof, in Tenant's reasonable business
judgment, Tenant's business is detrimentally affected thereby, Tenant shall have
the right to terminate this Lease. upon thirty (30) days notice to Landlord
without penalty to either Tenant, or Landlord.
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Tenant's termination of this Lease pursuant to this paragraph shall not deprive
Tenant of its right to any award for damages in connection with the loss of this
Lease, moving expenses, or dislocation damages.
14. CASUALTY DAMAGE.
14.1 In the event of damage to or destruction of the Demised Premises
caused by fire or other casualty, or any such damage or destruction to the
Building or the facilities necessary to provide services and normal access to
the Demised Premises in accordance herewith, Landlord, after receipt of written
notice thereof from Tenant, shall undertake to make repairs and restorations
with reasonable diligence as hereinafter provided, unless this Lease has been
terminated by Landlord or Tenant as hereinafter provided. If (i) the damage is
of such nature or extent that, in Landlord's sole and reasonable judgment, more
than one hundred and twenty (120) days would be required (with normal work crews
and hours) to repair and restore the part of the Demised Premises or Building
which has been damaged, or (ii) the Demised Premises or the Building is so
damaged that, in Landlord's sole judgment, it is uneconomical to restore or
repair the Demised Premises or the Building, as the case may be, or (iii) less
than two (2) years then remain on the current Lease Term, Landlord shall so
advise Tenant promptly, and either party, in the case described in clause (i)
above, or Landlord, in the cases described in clauses (ii) or (iii) above,
within thirty (30) days after any such damage or destruction shall have the
right to terminate this Lease by written notice to the other, as of the date
specified in such notice, which termination date shall be no later than thirty
(30) days after the date of such notice.
14.2 In the event of fire or other casualty damage, provided this Lease is
not terminated pursuant to the terms of this Article 14 and is otherwise in full
force and effect and sufficient casualty insurance proceeds are available for
application to such restoration or repair, Landlord shall proceed diligently to
restore the Demised Premises to substantially its condition prior to the
occurrence of the damage. Landlord shall not be obligated to repair or restore
any alterations, additions, fixtures or equipment which Tenant may have
installed (whether or not Tenant has the right or the obligation to remove the
same or is required to leave the same on the Demised Premises as of the
expiration or earlier termination of this Lease) unless Tenant, in a manner
satisfactory to Landlord, assures payment in full of all costs as may be
incurred by Landlord in connection therewith. Notwithstanding the Foregoing,
Landlord shall be obligated to repair and restore any alterations, additions or
improvements made pursuant to Exhibit "D" hereof.
14.3 Landlord shall not insure any improvements or alterations to the
Demised Premises in excess of Building standard tenant improvements, including
those set forth in Exhibit "D" hereto, or any fixtures, equipment or other
property of Tenant. Tenant shall, at its sole expense, insure the value of its
leasehold improvements, fixtures, equipment and personal property located in or
on the Demised Premises, for the purpose of providing funds to Landlord to
repair and restore the Demised Premises to substantially its condition prior to
occurrence of the casualty occurrence. If there are
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any such alterations, fixtures or additions and Tenant does not assure or agree
to assure payment of the cost of restoration or repair as aforesaid, Landlord
shall have the right to restore the Demised Premises to substantially the same
condition as existed prior to the damage excepting such alterations, additions
or fixtures.
14.4 The validity and effect of this Lease shall not be impaired in any way
by the failure of Landlord to complete repairs and restoration of the Demised
Premises or of the Building within one hundred and twenty (120) days after
commencement of the work, even if Landlord had in good faith notified Tenant
that the repair and restoration could be completed within such period, provided
that Landlord proceeds diligently with such repair and restoration. In the case
of damage to the Demised Premises which is of a nature or extent that Tenant's
continued occupancy is in the reasonable judgment of Landlord substantially
impaired, then the Annual Fixed Rent and Tenant's Proportionate Share otherwise
payable by Tenant hereunder shall be equitably abated or adjusted For the
duration of such impairment. Tenant shall be responsible to repair all of
Tenants' leasehold improvements and all equipment, fixtures and personal
property necessary for Tenant's business located in or on the Demised Premises
subject to Article 8 and to such other conditions as Landlord may require.
15. INSURANCE; INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.
15.1 Tenant covenants and agrees to exonerate, indemnify, defend, protect
and save Landlord, its representatives and Landlord's managing agent, if any,
harmless from and against any and all claims, demands, expenses, losses, suits
and damages as may be occasioned by reason of (i) any accident or matter
occurring on or about the Demised Premises, causing injury to persons or damage
to property (including, without limitation, the Demised Premises), unless such
accident or other matter resulted solely from the negligence or otherwise
tortious act of Landlord or Landlord's agents or employees, (ii) the failure of
Tenant fully and faithfully to perform the obligations and observe the
conditions of this Lease, and (iii) the negligence or otherwise tortious act of
Tenant or anyone in or about the Building on behalf of or at the invitation or
right of Tenant. Tenant shall maintain in full force and effect, at its own
expense, comprehensive general liability insurance (including a contractual
liability and fire legal liability insurance endorsement) naming as an
additional insured Landlord and Landlord's managing agent, if any, against
claims for bodily injury, death or property damage in amounts not less than
$1,000,000.00 and business interruption insurance in an amount equal to Tenant's
gross income for twelve (12) months. All policies shall be issued by companies
having a Best's financial rating of A or better and a size class rating of XII
(12) or larger or otherwise acceptable to Landlord. At or prior to the
Commencement Date, Tenant shall deposit the policy or policies of such
insurance, or certificates thereof, with Landlord and shall deposit with
Landlord renewals thereof at least fifteen (15) days prior to each expiration.
Said policy or policies of insurance or certificates thereof shall have attached
thereto an endorsement that such policy shall not be canceled without at least
thirty (30) days prior written notice to Landlord and Landlord's managing agent,
if any, that no act or omission of Tenant shall invalidate the
10
interest of Landlord under said insurance and expressly waiving all rights of
subrogation as set forth below. At Landlord's request, Tenant shall provide
Landlord with a letter from an authorized representative of its insurance
carrier stating that Tenant's current and effective insurance coverage complies
with the requirements contained herein.
15.2 Landlord and Tenant hereby release the other from any and all
liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise for any loss or damage to property
covered by insurance then in force, even if any such fire or other casualty
occurrence shall have been caused by the fault or negligence of the other party,
or anyone for whom such party may be responsible. This release shall be
applicable and in full force and effect, however, only to the extent of and with
respect to any loss or damage occurring during such time as the policy or
policies of insurance covering said loss shall contain a clause or endorsement
to the effect that this release shall not adversely affect or impair said
insurance or prejudice the right of the insured to recover thereunder. To the
extent available, Landlord and Tenant further agree to provide such endorsements
for said insurance policies agreeing to the waiver of subrogation as required
herein. To the extent that either Landlord's or Tenant's insurance coverage
prohibits this waiver of subrogation, this paragraph shall be deemed null and
void and without effect as to both Landlord and Tenant.
16. INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.
16.1 Landlord and its agents or other representatives shall be permitted to
enter the Demised Premises at reasonable times and upon at least twenty-four
(24) hours notice to Tenant (except in an emergency situation, in which event no
notice shall be required), (i) to examine, inspect and protect the Demised
Premises and the Building and (ii) during the last six (6) months of the
original or any renewal term, to show it to prospective tenants and to affix to
any suitable part of the exterior of the Building in which the Demised Premises
is located a notice for letting the Demised Premises or the Building or (at any
time during the original or any renewal term) selling the Building.
16.2 Landlord shall have access to and use of all areas in the Demised
Premises (including exterior Building walls, core corridor walls and doors and
any core corridor entrances), any roofs adjacent to the Demised Premises, and
any space in or adjacent to the Demised Premises used for shafts, stacks, pipes,
conduits, fan rooms, ducts, electric or other utilities, sinks or other Building
facilities, as well as access to and through the Demised Premises for the
purpose of operation, maintenance, decoration and repair, provided, however,
that except in emergencies such access shall not be exercised so as to interfere
unreasonably with Tenant's use of the Demised Premises. Tenant shall permit
Landlord to install, use and maintain pipes, ducts and conduits within the
demising walls, bearing columns and ceilings of the Demised Premises, provided
that the installation work is performed at such times and by such methods as
will not materially interfere with Tenant's use of the Demised Premises,
materially reduce the floor area thereof or materially and adversely affect
Tenant's layout.
11
Landlord and Tenant shall cooperate with each other in the location of
Landlord's and Tenant's facilities requiring such access.
16.3 Landlord reserves the right at any time, without incurring any
liability to Tenant therefor, to make such changes in or to the Building and the
fixtures and equipment thereof, as well as in or to the street entrances,
foyers, halls, passages, elevators, if any, and stairways thereof, as it may
deem necessary or desirable; provided that there shall be no change that
materially detracts from the character or quality of the Building.
17. DEFAULT. Any other provisions in this Lease notwithstanding, it shall be an
event of default ("Event of Default") under this Lease if: (i) Tenant fails to
pay any installment of Fixed Rent, Additional Rent or other sum payable by
Tenant hereunder when due and such failure continues For a period of fifteen
(15) days (or thirty (30) days on not more than two (2) given occasions during a
given Lease Year), or (ii) Tenant fails to observe or perform any other covenant
or agreement of Tenant herein contained and such failure continues after written
notice given by or on behalf of Landlord to Tenant for more than fifteen (15)
days, or (iii) Tenant uses or occupies the Demised Premises other than as
permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or
sublet, the Demised Premises or any part thereof other than in the manner and
upon the conditions set forth herein, or (v) Tenant abandons or vacates the
Demised Premises or without Landlord's prior written consent, Tenant removes or
attempts to remove or manifests an intention to remove any or all of Tenant's
property from the Demised Premises other than in the ordinary and usual course
of business, or (vi) Tenant (which, for purposes of this clause, includes any
guarantor hereunder) files a petition commencing a voluntary ease, or has filed
against it a petition commencing an involuntary case, under the Federal
Bankruptcy Code (Title 11 of the United States Code), as now or hereafter in
effect, or under any similar law, or files or has filed against it a petition or
answer in bankruptcy or for reorganization or for an arrangement pursuant to any
state bankruptcy law or any similar state law, and, in the case of any such
involuntary action, such action shall not be dismissed, discharged or denied
within sixty (60) days after the filing thereof, or Tenant consents or
acquiesces in the filing thereof, or (vii) if Tenant is a banking organization,
Tenant files an application for protection, voluntary liquidation or dissolution
applicable to banking organizations, or (viii) a custodian, receiver, trustee or
liquidator of Tenant or of all or substantially all of Tenant's property or of
the Demised Premises shall be appointed in any proceedings brought by or against
Tenant and, in the latter case, such entity shall not be discharged within sixty
(60) days after such appointment or Tenant consents to or acquiesces in such
appointment, or (ix) Tenant shall generally not pay Tenant's debts as such debts
become due, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due, or
(x) any of the foregoing occurs as to any guarantor or surety of Tenant's
performance under this Lease, or such guarantor or surety defaults on any
provision under its guaranty or suretyship agreement. The notice and grace
period provisions in clauses (i) and (ii) above shall have no application to the
Events of Default referred to in clauses (iii) through (ix) above or, to the
extent applicable, (x).
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18. LANDLORD'S REMEDIES.
18.1 In the event of any such Event of Default, Landlord at any time
thereafter may at its option exercise any one or more of the following remedies:
(a) Termination of Lease. Landlord may terminate this Lease, by
written notice to Tenant with such termination to take effect upon Tenant's
failure to cure any Default within ten (10) days of receipt of notice of such
termination by Tenant. Upon such termination Tenant shall immediately surrender
possession of the Demised Premises to Landlord, and Landlord shall immediately
become entitled to receive from Tenant any sums due and owing under this Lease
at the time of termination.
(b) Reletting. With or without terminating this Lease, as Landlord may
elect, Landlord may re-enter and repossess the Demised Premises, or any part
thereof, and lease them to any other person upon such terms as Landlord shall
deem reasonable, for a term within or beyond the term of this Lease; provided,
that any such reletting prior to termination shall be for the account of Tenant,
and Tenant shall remain liable for (i) all Annual Fixed Rent, Additional Rent
and other sums which would be payable under this Lease by Tenant in the absence
of such expiration, termination or repossession, less (ii) the net proceeds, if
any, of any reletting effected for the account of Tenant after deducting from
such proceeds all of Landlord's expenses, attorneys' fees and expenses,
employees' expenses, reasonable alteration costs, expenses of preparation for
such reletting and all costs and expenses, direct or indirect, incurred as a
result of Tenant's breach of this Lease. Landlord shall have no obligation to
relet the Demised Premises if, Landlord, or any of its affiliates, shall have
other comparable space available for rent, however, Landlord shall use its best
efforts to market the Demised Premises as part of Landlord's standard marketing
program for all available space in the East Gate Corporate Center. If the
Demised Premises are at the time of default sublet or leased by Tenant to
others, Landlord may, as Tenant's agent, collect rents due from any subtenant or
other tenant and apply such rents to the rent and other amounts due hereunder
without in any way affecting Tenant's obligation to Landlord hereunder. Such
agency, being given for security, is hereby declared to be irrevocable.
(c) Acceleration of Rent. Landlord may declare Fixed Rent and all
items of Additional Rent (the amount thereof to be based on historical amounts
and Landlord's estimates for future amounts) for the entire balance of the then
current Lease Term immediately due and payable, together with all other charges,
payments, costs, and expenses payable by Tenant as though such amounts were
payable in advance on the date the Event of Default occurred.
(d) Removal of Contents by Landlord. With respect to any portion of
the Demised Premises which is vacant or which is physically occupied by Tenant,
Landlord may remove all persons and property therefrom, to the extent permitted
by law, and store such property in a public warehouse or elsewhere at the cost
of and for the account of Tenant, without service of notice or resort to legal
process (all of which Tenant expressly waives) and without being deemed guilty
of trespass or becoming
13
liable for any loss or damage which may be occasioned thereby. Landlord shall
have a lien for the payment of all sums agreed to be paid by Tenant herein upon
all Tenant's property, which lien is to be in addition to Landlord's lien now or
hereafter provided by law.
(e) Right of Distress and Lien. In addition to all other rights and
remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the
extent permitted by law, have a right of distress for rent and lien on all of
Tenant's fixtures, merchandise and equipment in the Demised Premises, as
security For rent and all other charges payable hereunder.
18.2 Survival of Tenant's Obligations. No expiration or termination of this
Lease Term pursuant to Article 18.1.(a) above or by operation of law or
otherwise (except as expressly provided herein), and no repossession of the
Demised Premises or any part thereof pursuant to Article 18.1.(a) or (b) above
or otherwise shall relieve Tenant of its liabilities and obligations hereunder,
all of which shall survive such expiration, termination or repossession, and
Landlord may, at its option, ▇▇▇ for and collect all rent and other charges due
hereunder at any time as when such charges accrue.
18.3 Injunction. In the event of breach or threatened breach by Tenant or
Landlord of any provision of this Lease, both Tenant and Landlord shall have the
right of injunction and the right to invoke any remedy allowed at law or in
equity in addition to other remedies provided for herein.
18.4 Waiver of Redemption. Tenant hereby expressly waives any and all
rights of redemption granted by or under any present or future law in the event
this Lease is terminated; except as provided herein, or in the event of Landlord
obtaining possession of the Demised Premises, or Tenant is evicted or
dispossessed for any cause, by reason of violation by Tenant of any of the
provisions of this Lease.
18.5 Not Exclusive Right. No right or remedy herein conferred upon or
reserved to Landlord is intended to be exclusive of any other right or remedy
herein or by law provided, but each shall be cumulative and in addition to every
other right or remedy given herein or now or hereafter existing at law or in
equity or by statute.
18.6 Expenses. In the event that Landlord exercises any of the remedies
provided herein, Tenant shall pay to Landlord all expenses incurred in
connection therewith, including reasonable attorneys' fees. In the event of a
breach of this Lease by Landlord whereby Tenant incurs actual costs and expenses
as a result of such breach, Landlord shall pay to Landlord the reasonable amount
of such costs and expenses.
18.7 Grant of Security Interest. Tenant hereby grants to Landlord a
security interest under the New Jersey Uniform Commercial Code in all of
Tenant's goods, equipment, fixtures, furniture and other personal property in,
on or about the Demised
14
Premises. Said security interest shall secure the payment of all Fixed Rent,
Additional Rent and other charges collectible or reserved hereunder which shall
become due under the provisions of this Lease. Tenant hereby agrees to execute,
upon request of Landlord, such financing statements as may be required under the
provisions of the New Jersey Uniform Commercial Code to perfect a security
interest in favor of Landlord in the aforementioned property and proceeds
thereof. The statutory liens for rent are not waived, the security interest
granted herein being in addition and supplementary to those statutory liens.
Landlord shall subordinate the security interest granted herein only to any
security interest granted by Tenant which was in place and effective prior to
the date hereof. Landlord agrees to subordinate its security interest in
Tenant's goods, equipment fixtures and other personal property in, on, or about
the Demised Premises to any third party lenders of Tenant provided Landlord is
notified of such lender. Landlord acknowledges that Tenant presently has granted
security interest to lenders with respect to the floor plan of inventory and
equipment, and with respect to other loans in the ordinary course of Tenant's
business and Tenant shall provide Landlord with the details of such upon request
by Landlord.
19. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If Tenant defaults in the making
of any payment or in the doing of any act herein required to be made or done by
Tenant, then Landlord may, but shall not be required to, make such payment or
do such act, and charge the amount of Landlord's expense, with interest accruing
and payable thereon at the Default Rate as of the date of the expenditure by
Landlord or as of the date of payment thereof by Tenant, whichever is higher,
from the date paid or incurred by Landlord to the date of payment thereof by
Tenant; provided, however, that nothing herein contained shall be construed or
implemented in such a manner as to allow Landlord to charge or receive interest
in excess of the maximum legal rate then allowed by law. Such payment and
interest shall constitute Additional Rent hereunder due and payable with the
next monthly installment of Fixed Rent; but the making of such payment or the
taking of such action by Landlord shall not operate to cure such default by
Tenant or to estop Landlord from the pursuit of any remedy to which Landlord
would otherwise be entitled.
20. ESTOPPEL CERTIFICATE. Tenant shall, at any time and from time to time, at
the request of Landlord, upon ten (10) business days notice, execute and deliver
to Landlord a statement in the form of Exhibit "G" attached hereto or some other
reasonable form supplied by Landlord, it being intended that any such statement
delivered pursuant hereto may be relied upon by others with whom Landlord may be
dealing. Tenant hereby appoints Landlord as Tenant's attorney-in-fact to execute
any such estoppel certificate's in the event Tenant does not execute and
return such certificates within the time period set forth above.
21. HOLDING OVER. If Tenant retains possession of the Demised Premises or any
part thereof after the termination of this Lease or expiration of the Lease Term
or otherwise in the absence of any written agreement between Landlord and Tenant
concerning any such continuance of the term, Tenant shall pay Landlord (i) as
agreed liquidated damages for such holding over alone, an amount, calculated on
a per them
15
basis for each day of such unlawful retention, equal to the greater of (a) one
and one quarter times the Annual Fixed Rent, or (b) the established market
rental for the Demised Premises, for the time Tenant thus remains in possession,
plus, in each case, all Additional Rent and other sums payable hereunder, and
(ii) all other damages, costs and expenses sustained by Landlord by reason of
Tenant's holding over. Without limiting any rights and remedies of Landlord
resulting by reason of the wrongful holding over by Tenant, or creating any
right in Tenant to continue in possession of the Demised Premises, all Tenant's
obligations with respect to the use, occupancy and maintenance of the Demised
Premises shall continue during such period of unlawful retention.
22. SURRENDER OF DEMISED PREMISES. Tenant shall, at the end of the Lease Term,
or any extension thereof, promptly surrender the Demised Premises in good order
and condition and in conformity with the applicable provisions of this Lease,
including all improvements made pursuant to Exhibit "B" hereof, excepting only
reasonable wear and tear. Tenant shall also remove, at it sole cost and expense,
all telephone and computer systems, including related cabling. Upon the
expiration of the initial Lease term hereunder, Tenant shall have the right to
purchase the systems furnishings installed as part of the original Tenant
improvements to the Demised Premises for an amount equal to ten percent (10%) of
the original value of the system furnishings at the time of installation. In
addition, upon the expiration of the first Renewal Term hereunder, provided
Tenant exercises its first Renewal Option, all such systems furnishings shall
become the property of Tenant without Tenant having to purchase the same.
23. SUBORDINATION AND ATTORNMENT. This Lease and the estate, interest and rights
hereby created are subordinate to any mortgage now or hereafter placed upon the
Building or the Land or any estate or interest therein, including, without
limitation, any mortgage on any leasehold estate, and to all renewals,
modifications, consolidations, replacements and extensions of same as well as
any substitutions therefor. Tenant agrees that in the event any person, firm,
corporation or other entity acquires the right to possession of the Building or
the Land, including any mortgagee or holder of any estate or interest having
priority over this Lease, Tenant shall, if requested by such person, firm,
corporation or other entity, attorn to and become the tenant of such person,
firm, corporation or other entity, upon the same terms and conditions as are set
forth herein for the balance of the Lease Term. Notwithstanding the foregoing,
any mortgagee may, at any time, subordinate its mortgage to this Lease, without
Tenant's consent, by notice in writing to Tenant, and thereupon this Lease shall
be deemed prior to such mortgage without regard to their respective dates of
execution and delivery, and in that event, such mortgagee shall have the same
rights with respect to this Lease as though it had been executed prior to the
execution and delivery of the mortgage. Tenant, if requested by Landlord, shall
execute any such instruments in recordable form as may be reasonably required by
Landlord in order to confirm or effect the subordination or priority of this
Lease, as the case may be, and the attornment of Tenant to future landlords in
accordance with the terms of this Article.
16
24. BROKERS. The parties agree that ▇▇▇▇ Atlantic Properties, Inc. (the
"Broker") and CB Commercial, Inc. (the "Cooperating Broker") are the real estate
broker and cooperating broker, respectively, who have brought the parties
together in connection with the transactions contemplated hereby (and Landlord
shall be responsible for all brokerage commissions to be paid to Broker and
Cooperating Broker on the terms and conditions set forth in a separate agreement
between Landlord, Broker and Cooperating Broker). Each party represents and
warrants to the other that he, she or they have not made any agreement or taken
any action which may cause anyone (other than Broker or Cooperating Broker) to
become entitled to a commission as a result of the transactions contemplated by
this Lease, and each will indemnify and defend the other from any and all
claims, actual or threatened, for compensation by any such third person (other
than Broker or cooperating, Broker) by reason of such party's breach of his, her
or their representation or warranty contained in this Article 24.
25. NOTICES. All notices or other communications hereunder shall be in writing
and shall be deemed to have been given (i) if hand delivered or sent by an
express mail or delivery service or by courier, then if and when delivered to
the respective parties at the below addresses (or at such other address as a
party may hereafter designate for itself by notice to the other party as
required hereby), or (ii) if mailed, then on the next business day following the
date on which such communication is deposited in the United States mails, by
first class registered or certified mail, return receipt requested, postage
prepaid, and addressed to the respective parties at the below addresses (or at
such other address as a party may hereafter designate for itself by notice to
the other party as required hereby). All notices and communications to Tenant
may also be given by leaving same at the Demised Premises during the business
hours set forth in Article 9 hereof.
25.1 If to Landlord:
▇▇▇▇ Atlantic Properties, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President of Property Management and Leasing
With a required copy to:
▇▇▇▇ Atlantic Properties, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Vice President and Counsel
25.2 If to Tenant:
▇▇▇▇▇▇▇▇ Computer Centers
17
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a required copy to:
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
26. RIGHT OF FIRST OFFER. Before entering into a lease with anyone else during
the term hereof respecting any previously leased space in the Building, Landlord
shall notify Tenant of the availability of such space for rent. Provided Tenant
gives written notice of its desire to lease such space within fifteen (15)
business days after receipt of said notice from Landlord, Tenant shall be
considered to have exercised the right of First offer and to have agreed to
accept the additional space for a lease term that is co-terminus with the Lease
Term hereunder, as such may be extended as provided herein, at the same rental
rate as is then in effect for the original Demised Premises, with an improvement
allowance to fit-out the additional space in an amount reduced proportionally
according to the remainder of the Lease Term. Landlord's notice may not be given
more than six (6) months prior to the date as of which said space will become
available for rent. If Tenant fails to respond to said notice within said
fifteen (15) business days period, or, after giving written notice of its
exercise of its right, if Landlord and Tenant do not enter into a lease for such
space within said thirty (30) day period, Tenant's rights under this Article 26
shall be deemed to have been waived and Landlord shall be free (without any
further obligation to Tenant) to lease the space to any other party upon any
terms and without any further obligation to Tenant, whether or not the terms of
such lease are more or less favorable that those offered to Tenant. Tenant's
right to exercise this right of first offer is subordinate, however, to any
expansion or renewal options granted from time to time in leases to other
tenants in the Building. This right of first offer for additional space shall be
terminated during any period in which Tenant is in Default under any provisions
of this Lease until said Default has been cured, provided, however, that if an
Event of Default by Tenant exists, Landlord shall still give notice to Tenant as
provided herein, and provided further, that if Tenant shall cure such Default
within ten (10) days of Landlord's notice, Tenant's rights under this Article 26
shall remain in full force and effect. The period of time within which this
right of first offer may be exercised shall not be extended or enlarged by
reason of Tenant's inability to exercise such rights because of the foregoing
provision. Time is of the essence. If Tenant fails to exercise its right of
first offer in any instance when such right may arise, in writing, prior to the
expiration of the applicable time period for the exercise of such right,
Tenant's right in the instance in question shall thereafter be deemed null and
void and of no further force or effect.
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27. RENEWAL OPTION.
27.1 Tenant is granted the right and option (the "Renewal Option") to
extend the term of this Lease for three (3) additional periods of three (3)
years each, and if such renewal is effectively exercised, such renewal term (the
"Renewal Term") shall commence upon the expiration of the previous term of this
Lease, provided that:
(a) Each such option must be exercised, if at all, by notice from
Tenant to Landlord given at least six (6) months prior to the expiration of the
then current term, provided, however, that Landlord shall remind Tenant that the
Renewal Option deadline is approaching, eight (8) months prior to the expiration
of the then current term; and
(b) At the time of exercising each such option, this Lease shall be in
full force and effect and there shall exist no default by Tenant which remains
uncured beyond any applicable period of grace.
27.2 In the event the foregoing options are effectively exercised, all the
terms and conditions contained in this Lease shall continue to apply except
that:
(a) There shall be no further right of renewal beyond the periods
referred to above;
(b) The Renewal Option shall apply to all (and not less than all) of
the Demised Premises originally leased hereunder, plus any additional space
leased by Tenant pursuant to any option contained herein or otherwise.
(c) In the event Tenant shall have assigned this Lease or sublet all
or any portion of the Demised Premises without Landlord's consent, this Renewal
Option shall automatically expire and be null and void with respect to that
portion of the Demised Premises so assigned or sublet;
(d) The rental rate applicable to the Demised Premises during any
Renewal Term, plus any additional space then leased pursuant to this Lease,
shall equal the lesser of: the then "Market Rate" (as set forth below) of the
Demised Premises, as adjusted from time to time in accordance with Article 3
hereof; or (b) $8.50 per rentable square foot during the first year of the
Renewal Term, $9.00 per rentable square foot during the second year of the
Renewal Term, and $9.50 per rentable square foot during the third year of the
Renewal Term. Upon the determination of the Annual Fixed Rent during each
Renewal Term, Landlord and Tenant shall enter into a revision of this Lease to
set forth the amount of initial Annual Fixed Rent during the applicable Renewal
Term.
(e) After notice provided by Landlord pursuant to Article 27.1(a), at
least ten (10) days prior to the date that Tenant is required to notify Landlord
of its intention to renew this Lease, Tenant shall first inform Landlord of its
interest to renew. Landlord shall then notify Tenant of the Annual Fixed Rent
which will be payable for the Renewal Term if Tenant elects to renew this Lease,
within fifteen (15) days of the date
19
of receipt of Tenant's notice. Tenant shall then have fifteen (15) days
thereafter to advise Landlord if it does not agree to pay the Annual Fixed Rent
set forth in the Landlord's notice, in which event, the Annual Fixed Rent shall
be determined as otherwise provided herein below, or Tenant shall elect not to
renew this Lease. If Tenant fails to notify Landlord of its nonacceptance of the
Annual Fixed Rent within the prescribed time period, Tenant shall be deemed to
have agreed to pay the Annual Fixed Rent and to exercise its option to renew
this Lease.
27.3 In the event Tenant fails to exercise the foregoing options in the
manner and within the time periods set forth herein, this Lease shall
automatically terminate at the end of the then current term, this Renewal Option
shall lapse and Tenant shall have no further right or option to extend the term
of this Lease.
27.4 As used herein, the "Market Rate" of the Demised Premises shall mean
and equal the then fair market rental rate for the Building for new leases of
comparable space which commence during the calendar year in which the
Commencement Date of the Renewal Term occurs. The Operating Expense Allowance
shall be the allowance applicable to such Market Rate. In the event Landlord and
Tenant are not able to agree on the Market Rate within thirty (30) days after
Tenant notifies Landlord of its election to extend the Lease Term, the Market
Rate shall be determined as follows:
(a) Within fifteen (15) days following the exercise of the Renewal
Option, Landlord and Tenant shall (i) each notify the other in writing of
their determination of the Market Rate of the Demised Premises, and (ii)
Tenant shall provide Landlord with the names and qualifications of three
(3) appraisers who are acceptable to Tenant. Each appraiser shall be MAI
certified and have a minimum of five (5) years experience in the same
geographical area as that in which the Demised Premises is located and in
real estate leasing and appraisal with respect to real estate which is of a
similar kind to the Demised Premises. Landlord shall within fifteen (15)
days thereafter select one of the three (3) appraisers and shall notify
Tenant in writing of its selection. The parties shall share equally the
cost of the appraiser.
(b) The "Market Rate" shall be the prevailing rental rate for the
Building as of the commencement of the Renewal Term for tenancies of space
of similar size, term and adjusted on a square foot basis and including a
market determination of additional rent on account of taxes and operating
expenses (to be paid throughout the Renewal Term in accordance with the
general formulations contained in this Lease), it being the intention that
the Market Rate shall be net to Landlord of taxes and operating expenses
allocable to the space in question.
(c) The appraiser selected above shall determine whether the
Landlord's or the Tenant's determination of Market Rate is more correct,
and the estimate of Market Rate so determined to be the most correct by the
appraiser shall be the Fixed Rent for the term of the Renewal Term,
provided that in no
20
event shall the Fixed Rent be reduced below that previously payable
hereunder. This determination shall be final, conclusive and binding on
Landlord and Tenant. The costs and expenses involved in such determination
shall be borne by the party against whom the decision is rendered.
27.5 If the Market Rate is not determined prior to the commencement of the
Renewal Term, then Tenant shall continue to pay to Landlord the Fixed Rent
applicable to the Demised Premises immediately prior to such Renewal Term until
the Market Rate is determined, and when it is determined, Tenant shall pay to
Landlord within ten (10) days after receipt of such notice the difference
between the rent actually paid by Tenant to Landlord and the new rent determined
hereunder. This determination shall be final, conclusive and binding on Landlord
and Tenant. The costs and expenses involved in such determination shall be borne
by the party against whom the decision is rendered.
28. MISCELLANEOUS.
28.1 Successors and Assigns. The obligations of this Lease shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that Landlord and each successive owner of the
Building and/or the Land shall be liable only for obligations accruing during
the period of its ownership or interest in the Building and from and after the
transfer by Landlord or such successive owner of its ownership or other interest
in the Building, Tenant shall look solely to the successors in title for the
performance of Landlord's obligations hereunder arising thereafter.
28.2 No Landlord Waiver. No delay or forbearance by Landlord in exercising
any right or remedy hereunder or in undertaking or performing any act or matter
which is not expressly required to be undertaken by Landlord shall be construed,
respectively, to be a waiver of Landlord's rights or to represent any agreement
by Landlord to undertake or perform such act or matter thereafter.
28.3 Waivers by Tenant. Tenant hereby consents to the exclusive
jurisdiction of the courts of the state where the Demised Premises are located
and in any and all actions or proceedings arising hereunder or pursuant hereto,
and irrevocably agrees to service of process in accordance with Article 25
above. Landlord and Tenant agree to waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use of or occupancy of
the Demised Premises and/or any claim of injury or damage and any emergency or
any other statutory remedy. If proceedings shall be commenced by Landlord to
recover possession under any applicable law or Rule of Civil Procedure, either
at the end of the Lease Term or upon the earlier termination of this Lease, or
for non-payment of rent or any other reason, Tenant specifically agrees that
five (5) days' notice shall be sufficient.
21
28.4 Limitation of Landlord's Liability. Tenant shall look solely to the
Demised Premises and rents derived therefrom and any applicable insurance
proceeds for enforcement of any obligation hereunder or by law assumed or
enforceable against Landlord, and no other property or other assets of Landlord
shall be subjected to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies or with respect to this Lease, the
relationship of landlord and tenant hereunder or Tenant's use and occupancy of
the Demised Premises. Landlord represents that it maintains and shall maintain
throughout the Lease Term herein, liability insurance in customary amounts.
28.5 Time of the Essence. All times, wherever specified herein for the
performance by Landlord or Tenant of their respective obligations hereunder, are
of the essence of this Lease.
28.6 Severability. Each covenant and agreement in this Lease shall for all
purposes be construed to be a separate and independent covenant or agreement. If
any provision in this Lease or the application thereof shall to any extent be
invalid, illegal or otherwise unenforceable, the remainder of this Lease, and
the application of such provision other than as invalid, illegal or
unenforceable, shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.
28.7 Amendment and Modification. This Lease, including all Exhibits hereto,
each of which is incorporated in this Lease, contains the entire agreement
between the parties hereto, and shall not be amended, modified or supplemented
unless by agreement in writing signed by both Landlord and Tenant.
28.8 Headings and Terms. The title and headings and table of contents of
this Lease are for convenience of reference only and shall not in any way be
utilized to construe or interpret the agreement of the parties as otherwise set
forth herein. The term "Landlord" and term "Tenant" as used herein shall mean,
where appropriate, all persons acting by or on behalf of the respective parties,
except as to any required approvals, consents or amendments, modifications or
supplements hereunder when such terms shall only mean the parties originally
named on the first page of this Lease as Landlord and Tenant, respectively, and
their agents so authorized in writing.
28.9 Nondisturbance. Provided this Lease shall at all times be in full
force and effect and provided further that there shall exist no Event of Default
by Tenant hereunder, the right of possession by Tenant to possess and quietly
enjoy the Demised Premises and any or all of Tenant's rights under this Lease
shall not be affected in any way or disturbed by any lender now or hereafter
doing business with Landlord in the exercise of any such lender's rights under
any formal agreements between such lender and Landlord. Tenant shall not be
named as a party defendant to any foreclosure of any lien of any mortgage for
the purpose of terminating this Lease, and Tenant shall not, by any such
foreclosure, be in any other way foreclosed from its rights under this Lease. In
the event that any such lender or its successors or assigns comes into
22
possession of the Demised Premises or acquires the leasehold interest of
Landlord by foreclosure of any mortgage between any such lender and Landlord, or
by proceedings on any note executed by Landlord in favor of any such lender or
otherwise, this Lease shall not be terminated by any such foreclosure or
proceedings; and this Lease shall continue in full force and effect upon
Tenant's attornment, as provided herein, as a direct lease between Tenant and
any such lender upon the same terms, covenants, conditions and agreements set
forth in this Lease. In the event that the Demised Premises or Landlord's
leasehold interest therein is sold or otherwise disposed of pursuant to any
right or power contained in any mortgage or any note between any such lender and
Landlord, or as a result of proceedings thereon, this Lease shall not be
terminated or affected thereby, and the purchaser of the Demised Premises or of
Landlord's leasehold interest therein or any person or entity acquiring title
thereto shall so acquire it, subject to this Lease; and this Lease shall
continue in full force and effect upon Tenant's attornment, as provided herein,
as a direct lease between Tenant and any party acquiring title to Landlord's
leasehold interest therein, as aforesaid, upon the same terms, covenants
conditions and agreements set forth in this Lease.
28.10 Moving Allowance. As An additional inducement to Tenant to enter into
this Lease, Landlord shall provide Tenant a moving allowance (the `Moving
Allowance") of up to Ten Thousand Dollars ($10,000.00). Such Moving Allowance
shall be paid to Tenant within fifteen (15) business days of Landlord being
shown paid invoices for such customary moving expenses as movers, stationary,
computer/cable experts and telephone installers.
28.11 Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed on the day and year first above written.
[Corporate Seal] LANDLORD:
Attest: ▇▇▇▇ ATLANTIC PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------------
(Assistant) Secretary Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President of Property
Management & Leasing
23
[Corporate Seal] LANDLORD:
Attest: ▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------------
(Assistant) Secretary Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
The warrants of Authority have been intentionally omitted from the Lease.
24
FIRST AMENDMENT TO AGREEMENT OF LEASE
THIS IS A FIRST AMENDMENT TO AGREEMENT OF LEASE (this "Amendment") by and
between AAPOP 1, L.P., formerly known as ▇▇▇▇ Atlantic Properties ("Landlord")
and EMTEC, INC., formerly known as ▇▇▇▇▇▇▇▇ Corporation, T/A ▇▇▇▇▇▇▇▇ Computer
Centers ("Tenant") dated this 31 day of December, 1997. All capitalized terms
used but not defined herein shall have the meanings given to them in the
below-described Lease.
BACKGROUND
WHEREAS, Landlord and Tenant's predecessor in interest have entered into
that certain Agreement of Lease dated April 1, 1992 (the "Lease") whereby
Landlord leases to Tenant and Tenant rents from Landlord all that certain 15,596
rentable square foot portion of space in the Building known as ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ and located in the ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ for a
Lease Term expiring March 31, 1998: and
WHEREAS, Landlord and Tenant now desire to amend the Lease to provide for
the renewal of the Lease Term thereunder, upon the terms and conditions set
forth below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants set forth herein,
and intending to be legally bound hereby, the parties hereto agree as follows:
1 Renewal of Lease Term. The Lease Term is hereby renewed for one (1)
additional period of three (3) years commencing April 1, 1998 and continuing
through ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇, "▇▇▇▇▇▇▇ ▇▇▇▇").
2 Annual Fixed Rent/Additional Rent. Commencing April 1, 1998 and
continuing throughout the Renewal Term, Annual Fixed Rent payable pursuant to
the Lease shall be payable by Tenant to Landlord, in the manner set forth in the
Lease, according to the following schedule:
Monthly Total Annual Fixed Fixed Rent Per
Period of Installment Annual Rent Due For Rentable
Lease Term Fixed Rent Due Period Square Foot
---------- -------------- ------ -----------
4/1/98-3/31/99 $11,047.17 $132,566.00 $8.50
4/1/99-3/31/00 $11,597.00 $140,364.00 $9.00
4/1/00-3/31/01 $12,346.83 $148,162.00 $9.50
Throughout the Renewal Term, Tenant shall also pay all sums of Additional Rent
payable by Tenant to Landlord under the Lease, as set forth therein.
3 Tenant Improvements.
25
3.1 Tenant shall accept the Demised Premises in existing "AS IS"
condition, subject to the right of any prior tenant to remove its personal
property or improvements. At or about the time of April 1, 1998, Tenant shall
have the right to construct and alter the Demised Premises, provided, however,
that such construction does not include any alterations affecting the exterior
or structural components of the Building or any material alterations to the
systems of the Building, including, but not limited to HVAC, electric or
plumbing. Any Tenant construction shall be performed by Tenant's contractors and
shall be solely Tenant's responsibility. Subject to Section 3.4 below, all of
Tenant's construction shall be at Tenant's expense.
3.2 Prior to commencement of construction:
(a) Landlord shall approve in writing the plans and specifications for
any alterations to the Demised Premises, such approval by Landlord shall not be
deemed to be an approval by Landlord of any work performed pursuant thereto or
approval or acceptance by Landlord of any material furnished with respect
thereto or a representation by Landlord as to the fitness of such work or
materials, and shall not give rise to any liability or responsibility of
Landlord.
(b) Landlord shall approve in writing each contractor and
subcontractor (which shall each be of sound financial status and good reputation
in the community and a duly licensed and qualified professional in the state
and, to the extent necessary, township in which the Building is located) to
perform such alterations.
(c) Tenant shall deliver to Landlord a certificate evidencing each
contractor's liability, completed operations and worker's compensation insurance
and naming Landlord as an additional insured, which insurance shall be with a
carrier, in amounts and otherwise on terms satisfactory to Landlord.
(d) Each contractor shall execute and Tenant shall cause to be filed
with the appropriate governmental agency in a timely manner such waivers and
releases of liens and other documents necessary to insure against imposition of
any mechanics' and material suppliers' liens for labor furnished and material
supplied in connection with the alterations and improvements. Tenant shall
deliver copies of such waivers and releases of liens to Landlord together with
evidence of the timely filing thereof.
3.3 Tenant covenants and agrees:
(a) To secure and pay for all necessary building and other permits and
fees in connection with the alterations and improvements.
(b) All construction shall be done in compliance with all applicable
laws and ordinances and in a good and workerlike manner in accordance with the
approved plans and specifications.
26
(c) To obtain and deliver to Landlord a Certificate of Occupancy (or
its equivalent) issued by the appropriate governmental authority upon completion
of the construction of the Demised Premises.
(d) To abide by any collective bargaining agreements or other union
contracts applicable to Tenant, the Building or Landlord.
(e) All materials, supplies and workers shall enter the Demised
Premises and all work shall be performed at times and by means satisfactory to
Landlord.
3.4 As an incentive to renew this Lease for three years beginning
April 1, 1998 and to restructure options Tenant shall be entitled to a Sixty
Thousand Dollar ($60,000) allowance which can be used by Tenant for
construction, improvements, computer equipment as desired by Tenant. Such monies
to be paid by Landlord upon presentation of invoices for completed work,
purchased equipment, or Lease Agreements with aggregate value of $60,000.00.
Tenant shall be entitled to a maximum of $60,000.00 to be paid within 30 days of
presentation of invoices.
3.5 Tenant and any approved contractor, subcontractor or material
supplier may, after notice to Landlord, enter the Demised Premises during
reasonable times after the execution hereof for the purpose of constructing the
improvements as aforesaid and inspecting and measuring the Demised Premises,
provided that such entry does not, in Landlord's reasonable judgment, interfere
with the operations of the Building or with Landlord's work therein, or that of
any other tenants in the Building. Tenant shall be responsible for any and all
damage or injury caused by such contractors, subcontractors, material suppliers
and Tenant in the course of constructing the improvements, and Tenant's
obligation to indemnify, defend and hold Landlord harmless set forth in Article
15 hereof shall, include without limitation all work done by Tenant pursuant to
this Article 3 and shall on the date of execution hereof.
3.6 Landlord and its agents or other representatives shall be
permitted to enter the Demised Premises to examine and inspect the construction
of the alterations and improvements, provided, that no such inspection or
examination shall constitute an approval or warranty or give rise to any
liability of Landlord with respect to any thereof.
4 Article 27 of the Lease. Article 27 of the Lease (Renewal Option) is
hereby deleted and replaced with the following revised Renewal Option language:
4.1 Tenant is granted the `right and option (the "Renewal "Option")
to extend the term of the Lease for two (2) additional periods of three (3)
years each, and if such renewals are effectively exercised, such renewal term
(the "Renewal Term") shall commence upon the expiration of the previous term of
the Lease, provided that:
27
(a) Each option must be exercised, if at all, by notice from Tenant to
Landlord given at least six (6) months prior to the expiration of the then
current term; and
(b) At the time of exercising each option, the Lease shall be in full
force and effect and there shall exist no default by Tenant which remains
uncured beyond any applicable period of grace.
4.2 In the event the foregoing options are effect effectively exercised,
all the terms and conditions contained in the Lease shall continue to apply
except that:
(a) There shall be no further right of renewal beyond the periods referred
to above;
(b) The Renewal Option shall apply to all (and not less than all) of the
Demised Premises originally leased hereunder, plus any additional space leased
by Tenant pursuant to any option contained herein or otherwise;
(c) In the event Tenant shall have assigned the Lease or sublet all or
any portion of the Demised Premises* this Renewal Option shall automatically
expire and be null and void with respect to that portion of the Demised Premises
so assigned or sublet;
(d) The rental rate applicable to the Demised Premises during any Renewal
Term, plus any additional space then leased pursuant to the Lease, shall be
according to the following schedule:
First Renewal Term:
-------------------
Period of Fixed Rent Per
Lease Term Rentable Square Foot
---------- --------------------
Year 1 $10.50
Year 2 $10.90
Year 3 $11.35
Second Renewal Term:
--------------------
Period of Fixed Rent Per
Lease Term Rentable Square Foot
---------- --------------------
Year 1 $11.50
Year 2 $11.95
Year 3 $12.45
4.3 In the event Tenant fails to exercise the foregoing options in
the manner and within the time period set forth herein, the Lease shall
automatically terminate at the end of the then current term, the applicable
Renewal Option shall lapse and Tenant shall have no further right or option to
extend the term of the Lease.
28
5. Lease Ratified. Except as specifically amended hereby, and except to
the extent necessary to give full force and effect to this Amendment, the Lease
shall continue in full force and effect as if the same had been set forth
herein.
* Without Landlord's prior Approval
IN WITNESS WHEREOF, the undersigned, being duly authorized to do so, hereby
execute this First Amendment to Agreement of Lease as of the day and year first
above written.
LANDLORD: AAPOP 1, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Asset Management
TENANT: EMTEC, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: Executive Vice President
29
[LETTERHEAD OF BRANDYWINE REALTY TRUST]
Via: EMail/US Mail
January 23, 2001
▇▇. ▇▇▇ ▇▇▇▇▇
Emtec, Inc.
Vice President - Finance and Operations
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
RE: EAST GATE CORPORATE CENTER
Dear ▇▇. ▇▇▇▇▇:
It was a pleasure to have the opportunity to meet with you and ▇▇.
▇▇▇▇▇ to discuss the upcoming renewal of Emtec. As we discussed, Brandywine
Realty Trust is agreeable to honoring the current Renewal Option, even though
the notice period has lapsed. Brandywine will keep this option available to you
till February 6, 2001. If this option has not been exercised in writing on or
before the above stated date, then it will become null and void. For your
review, the terms of the said option are as follows:
Term: Three (3) years
Tenant Premises shall be delivered in "As Is" condition.
Improvements:
Fixed Rent: Year 1 $10.50 per square foot
Year 2 $10.90 per square foot
Year 3 $11.35 per square foot
In addition, I am also presenting a five- year alternative for renewal.
On behalf of Brandywine Realty Trust, I am pleased to submit the following
Business Points as a Five Year Renewal Proposal to Emtec.
Business Points
---------------
BUILDING: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
PREMISES: 15,596 rentable square feet
RENEWAL TERM: Five (5) years
FIXED RENT RATE: Five (5) year term
------------------
Year 1: $10.50 per square foot
Year 2: $11.00 per square foot
30
Year 3: $11.50 per square foot
Year 2: $12.00 per square foot
Year 3: $12.50 per square foot
COMMENCEMENT DATE: April 1, 2001
TENANT IMPROVEMENTS: Landlord shall deliver Premises in, "As Is condition".
Landlord shall repaint the office portion of the
Premises with the exception of the restroom and
Landlord shall re-carpet the lobby, conference room,
seven offices, training room and accounting area, using
building standard finishes and will also install new
vinyl floor tile in the mail room and break room.
BROKERAGE: Landlord and Tenant mutually represent and warrant to
each other that they have not dealt, and will not deal,
with any real estate broker or sales representative in
connection with this proposed transaction. Each party
agrees to indemnify and hold harmless the other and
their directors, officers and employees from and
against all threatened or asserted claims, liabilities,
costs and damages (including reasonable attorney's fees
and disbursements) which may occur as a result of a
breach of this representation.
CONTINGENCIES: This offer is subject to errors, omissions, withdrawals,
prior availability of the space, Landlords review of
Tenant's financial condition and execution of a mutually
acceptable lease agreement between Landlord and Tenant.
The following business points will remain in effect
for two weeks from the date of this letter.
31
▇-▇▇▇▇▇▇▇.▇▇▇ ▇-▇▇▇▇▇▇▇.▇▇▇ is an online, internet service available
to all Brandywine Realty Trust tenants and their
employees. This award-winning web site is a service to
all tenants and is specifically designed to save your
employees time and money. e-Tenants is a convenient way
to purchase products and services for the office and
the preferred method for submitting Tenant Service
Requests to your property management company. Your
employees will be eligible to register as e-Tenants
members upon lease execution by visiting
▇▇▇.▇-▇▇▇▇▇▇▇.▇▇▇.
LEASE AGREEMENT: Except as expressly amended, all OTHER terms and
conditions of the Lease remain in full force.
The material contained herein is confidential. It is solely intended for the use
of determining whether Tenant wishes to execute a Lease with Landlord and is not
to be copied nor disclosed to any other person. In the event Tenant does not
enter into the contemplated transaction, they will continue to keep such
information and material confidential.
If you agree with the proposed terms, please circle which option and sign below
as acceptance and forward the original to my office.
Emtec has been a valued Tenant at East Gate Corporate Center since 1992.
Brandywine Realty Trust and I look forward to continuing our business
relationship.
I am available to answer any question you may have or to discuss the
presented options further.
Sincerely,
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director of Marketing
AGREED & ACCEPTED:
/s/ ▇▇▇ ▇▇▇▇▇ 02/06/2001
------------------------------- ----------------------------
Name: ▇▇▇ ▇▇▇▇▇ Date:
Title: V.P. Finance & Operations
32
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (the "Second Amendment") is made and dated
January 31, 2001 by and between AAPOP 1, L.P., a Delaware Limited Partnership
("Landlord") and EMTEC, INC., a New Jersey corporation ("Tenant")
BACKGROUND:
A. On April 1, 1992 Landlord's predecessor in interest and Tenant entered
into that certain Lease (the "Original Lease"), as amended by that certain First
Amendment to Lease by and between Landlord and Tenant dated December 31, 1997
(the "First Amendment") (the Original Lease and the First Amendment are
collectively referred to herein as the "Lease") pursuant to the provisions of
which the Landlord leased to Tenant approximately 15,596 rentable square feet of
space (the "Premises") in the building (the "Building") known as ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
B. Landlord and Tenant now desire to amend the Lease pursuant to the
provisions of this Second Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and with the intention of being
legally bound hereby the parties hereto agree as follows:
1. DEFINITIONS. Except as specifically defined in this Second Amendment,
initially capitalized terms in this Second Amendment shall have the meaning
ascribed to such terms in the Lease.
2. EXERCISE OF RENEWAL OPTION. Tenant has effectively exercised the First
Renewal Option set forth in Section 4.1 of the First Amendment.
3. TERM. Notwithstanding anything to the contrary contained in the Lease, the
term of the Lease shall expire, unless sooner terminated, on March 31, 2004,
subject to Tenant's right to exercise the Second Renewal Option as set forth in
the First Amendment.
4. RENT. Effective as of April 1, 2001, Section 3.1 of the Lease is amended in
its entirety as follows:
"3.1 Fixed rent ("Fixed Rent") is payable by Tenant beginning on the
Commencement date in monthly installments each representing one-twelfth
(1/12th of the annual Fixed Rent (the "Annual Fixed Rent") according to the
following schedule:
33
Installment Total Annual Fixed Rent Per
Period of Annual Fixed Rent Rentable
Lease Term Fixed Rent Due Due For Period Square Foot
---------- -------------- -------------- -----------
4/l/01 - 3/31/02 $13,646.50 $163,758.00 $10.50
4/1/02 - 3/31/03 $14,166.37 $169,996.40 $10.90
4/1/03 - 3/31/04 $14,751.22 $177,014.60 $11.35
Annual Fixed Rent is payable without prior notice or demand, and without
any setoff or deduction whatsoever, in advance, on the first day of each month
at such place as Landlord may direct, except that the Fixed Rent for the first
full month of the Lease Term will be paid on the date of execution of this
Lease. Annual Fixed Rent includes the Operating Expense allowance as set forth
in Exhibit "C" hereto. In addition, if the Lease Term commences on a day other
than the first day of a calendar month, Tenant shall pay to Landlord, on or
before the Commencement Date of the Lease Term a pro rata portion of the monthly
installment of rent (including Fixed Rent and any Additional Rent as herein
provided), such pro rata portion to be based on the actual number of calendar
days remaining in such partial month after the Commencement Date of the Lease
Term. If the Lease Term shall expire on other than the last day of a calendar
month, such monthly installment of Fixed Rent and Additional Rent shall be
prorated for each calendar day of such partial month. If any portion of Fixed
Rent, Additional Rent or any other sum payable to Landlord hereunder shall be
due and unpaid for more than ten (10) days, it shall thereafter bear interest at
a rate equal to three percent (3%) per annum greater than the highest prime rate
of interest as published in the Wall Street Journal. Eastern edition from time
to time (the "Default Rate"), as the same may change from time to time, form the
due date until the date of payment thereof by Tenant, provided, however, that
nothing herein contained shall be construed or implemented in such a manner as
to allow Landlord to charge or receive interest in excess of the maximum legal
rate then allowed by law. Landlord and Tenant understand and agree that memos
written or rental checks or any other payment forms delivered to Landlord do not
and shall not, throughout the Lease Term hereunder, constitute satisfaction of
any current or outstanding debt of Tenant pursuant to this Lease, and, provided
further that any such memo shall not preclude Landlord from recovering any
balance of any sum or sums due under this Lease. It addition, a letter or
similar type statement accompanying any rental check or payment form delivered
to Landlord pursuant to this Lease shall also have no force or effect under this
Lease as such may relate to the satisfaction of any debt of Tenant hereunder."
5. PAYMENT OF RENT. Notwithstanding anything in the Lease to the contrary, all
payments of Fixed Rent and Additional Rent shall be payable by Tenant's check to
Landlord, and mailed to Brandywine Realty Services Corporation, ▇.▇. ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇.
6. BROKERS. Tenant represents and warrants to Landlord that Tenant has had no
dealings, negotiations or consultations with respect to the Demised Premises or
this transaction with any broker or finder; and that no broker or finder called
the Demised
34
Premises to Tenant's attention for lease or took any part in any dealings,
negotiations or consultations with respect to the Demised Premises or this
Second Amendment. Each party agrees to indemnify and hold the other harmless
from and against all liability, cost and expense, including attorney's fees and
court costs, arising out of any misrepresentation or breach of warranty under
this Section.
7. LIMITATION OF LANDLORD'S LIABILITY. Tenant shall look solely to the Demised
Premises and rents derived therefrom for enforcement of any obligation hereunder
or by law assumed or enforceable against Landlord, and no other property or
other assets of Landlord shall be subjected to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies or with respect
to this Lease, the relationship of landlord and tenant hereunder or Tenant's use
and occupancy of the Demised Premises.
8. INTEGRATION/ESTOPPEL. Except as expressly provided in this Second Amendment,
the terms and provisions of this Lease remain in full force and effect in
accordance with its terms. Tenant hereby confirms and acknowledges that Tenant
has accepted the Premises in its current condition, and that there exists no
default or event which with the passage of time or the giving of notice could
constitute a default by Landlord under the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
to Lease on the day and year first above written.
WITNESS: LANDLORD:
AAPOP 1, L.P., a Delaware Limited Partnership
By: AAP SUB ONE, INC., its general partner
/s/(Illegible) By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Vice President
TENANT:
EMTEC, INC
/s/(Illegible) 2/26/01 By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------------
▇▇▇ ▇▇▇▇▇, VP Finance & Operations
35
