New Jersey-Wood-Ridge-Passaic Street Lease - Curtiss-Wright Flight Systems/Shelby Inc. and American Tissue Corp.
LEASE
AGREEMENT, made this 15th day of December, 1995 by and between
CURTISS-WRIGHT FLIGHT SYSTEMS/SHELBY, INC., an Ohio corporation, with an office
at 1200 Wall Street West, Lyndhurst, N.J. 07071 (hereinafter called "Curtiss")
and AMERICAN TISSUE CORPORATION, a New York corporation with offices at 50 Cabot
Court, Hauppauge, New York 11788 (hereinafter called "Tenant"):
WITNESSETH:
That in consideration of the mutual agreements herein contained, the
parties do hereby covenant to and with each other as follows:
1. PREMISES:
1.1 Curtiss hereby leases to Tenant and Tenant hereby hires from Curtiss,
upon and subject to the terms hereof, a portion of the property known as
Curtiss-Wright Building #2 (the "Building") comprising building area #24
(160,000 sq. ft.), building area #30 (100,320 sq. ft.), building area #34
(90,000 sq. ft.), and building area #74N (138,320 sq. ft.), located at Passaic
Street, Wood-Ridge, New Jersey, consisting of an agreed figure of 488,640 square
feet, (excluding the two electrical substations shaded in red], and 2 exclusive
parking areas, all as outlined in red on a plot plan labeled Exhibit "A" which
is attached hereto and made a part
<PAGE>
hereof, (said property hereinafter sometimes
called the "Premises"). The Building is a part of the Curtiss-Wright Wood-Ridge
Business Complex (the "Facility"). Curtiss represents and warrants to Tenant
that as of the date of this Lease the gross rentable square footage (the "Gross
Rentable Area") of the Facility is 2,322,104 square feet. Curtiss hereby grants
to Tenant without the payment of additional rent during the term of this Lease
and all extensions thereof, the non-exclusive right to use the right of way
shaded in yellow on Exhibit "A" (said right of way hereinafter called
"non-exclusive area") for the purposes of vehicular and pedestrian ingress and
egress only. (The Premises and the non-exclusive area are herein sometimes
referred to as the "Lease Area".) Tenant shall not obstruct nor allow its
customers or employees, or its invitees or licensees, to obstruct the
non-exclusive area. Curtiss shall not be responsible to Tenant for actions by
co-tenants of Curtiss' property, or for actions by other third parties or by
guests or visitors to Curtiss' property, other than the actions of Curtiss,
Curtiss' employees, agents, servants, invitees, contractors and representatives,
which if committed by Tenant, would constitute violations of the provisions of
this Section 1.1; provided, however, if a third party or co-tenant of Curtiss'
property should obstruct or impede ingress or egress by Tenant over such
non-exclusive area, Curtiss shall make every reasonable effort to remove any
such impediment.
1.2 Curtiss also hereby grants to Tenant without the payment of additional
rent during the term of this Lease and all extensions
-2-
<PAGE>
thereof, a non-exclusive area of up to 100 automobile parking spaces located in
the existing parking area east of said premises. In addition, Tenant shall have,
at all times hereunder, the non-exclusive use of the walkways to said parking
area. Said non-exclusive parking area is shaded in yellow on Exhibit "A". The
rents payable hereunder include the consideration payable with respect to the
exclusive parking areas and non-exclusive areas. Tenant shall have access to the
Lease Area 24 hours per day, 365 days per year.
2. TERM AND OCCUPANCY:
2.1 The term of this Lease shall be for ten (10) years, 4-months and shall
commence on April 1, 1996 and end on July 31, 2006.
2.2 Subject to the provisions of Article 8 hereof, occupancy of the
Premises shall be delivered as follows (with the date of delivery for each
building area being hereinafter referred to as a "delivery date"):
160,000 sq. ft (#24) 4/1/96
100,320 sq. ft (#30) 5/1/96
90,000 sq. ft (#34) 6/1/96
138,320 sq. ft (#74N) 7/1/96
In the event Curtiss is for any reason unable to deliver occupancy at the
commencement of the term, Curtiss shall not be subject to any liability therefor
and Tenant waives any claim for damages, including but not limited to
consequential damages, due to
-3-
<PAGE>
such failure of delivery except as provided in Section 2.3 herein. Curtiss
waives all rentals and other charges due for each space to be delivered until
possession of such space is delivered to Tenant in the condition required under
this Lease, with all work required to be performed by Curtiss substantially
complete (as such term is defined in Article 8 hereof) and with a temporary
Certificate of Occupancy having been issued by the appropriate governmental
authority for the Premises and each building area thereat permitting the use
thereof for warehousing, distribution and manufacturing of paper products and
related activities (the date on which each building area is so delivered shall
be referred to as an "Occupancy Date"). Provided however, except as set forth in
Section 2.3, failure to deliver occupancy shall not affect the validity of this
Lease nor extend the term thereof.
2.3 Notwithstanding anything to the contrary contained herein, if any of
the building areas which compose the Premises shall not have been delivered by
Curtiss to Tenant in the condition required under this Lease, with all work to
be performed by Curtiss substantially completed and with a temporary Certificate
of Occupancy having been delivered in accordance with the provisions of Section
2.2, on or before July 1, 1996 then in addition to the right of specific
performance, Tenant shall have the right to terminate this Lease as same relates
to the undelivered building areas upon 30 days' written notice to Curtiss.
Further, in addition to the rental abatements provided for in Article 3, if the
work to be performed by Curtiss with respect to each building area
-4-
<PAGE>
shall not be substantially completed or if a temporary certificate of occupancy
as hereinabove set forth shall not have been delivered to Tenant by the delivery
date applicable to such building area, then without limiting any other rights
Tenant may have, Tenant shall receive one day of free Base Rent for each day (or
portion thereof) beyond each applicable delivery date that substantial
completion of the work or delivery of the temporary certificate of occupancy is
delayed. Provided Curtiss notifies Tenant in writing of the anticipated delay to
be caused thereby, no free rent shall be received for any day of delay caused
directly by (i) Tenant's failure to submit to Curtiss promptly after Curtiss has
requested information needed to complete the items on Exhibit B or (ii) a Tenant
initiated change order.
3. BASE RENT:
3.1 All Base Rents (calculated solely by reference to square footages of
the areas in question) and all charges for electricity, (metered separately for
each building area) and water and sewer (also metered separately by building
area) payable with respect of each building area shall be fully abated for a
four month period commencing on the Occupancy Date of each such building area
(each, an "Abatement Period").
3.2 Subject to the preceding paragraph, Tenant hereby agrees to pay as Base
Rent for the term hereof the following sums:
(a) from and after the expiration of the Abatement Period applicable
to each building area to July 31, 1998 at the Base Rent of $1.75 per square
foot per year, or $855,120 per year
-5-
<PAGE>
subject to the applicable Abatement Periods during this period;
(b) from August 1, 1998 to July 31, 2000 at the Base Rent of $1.80 per
square foot per year, or $879,552 per year during this period;
(c) from August 1, 2000 to July 31, 2002 at the Base Rent of $1.95 per
square foot per year, or $952,848 per year during this period;
(d) from August 1, 2002 to July 31, 2006 at the Base Rent of $2.15 per
square foot per year, or $1,050,576 per year during this period.
All rents, other than utilities, shall be payable in advance in monthly
installments on the first day of each calendar month during the term hereof.
Rents for any partial month shall be appropriately prorated.
All installments of Base Rent and all amounts hereinafter denominated
additional rent are payable without notice, demand, abatement, deduction, or
set-off, during the term hereof to Curtiss at the address specified in Article
26 hereof, or elsewhere as Curtiss may, in writing, direct.
3.3 No payment by Tenant or receipt by Curtiss of a lesser amount than the
monthly rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated rent, nor shall any endorsement or statement on any
check or' any letter accompanying any check or payment as rent or additional
rent be deemed an accord and satisfaction, and Curtiss may accept such
-6-
<PAGE>
check or payment without prejudice to Curtiss' right to recover the balance of
such rent or additional rent or pursue any other remedy in this Least provided.
If at any time a dispute shall arise as to any amount or sum of money to be paid
by one party to the other under the provisions hereof, the party against whom
the obligation to pay the money is asserted shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment,
and there shall survive the right on the part of said party to institute suit
for recovery of such sum. If it shall be adjudged that there was no legal
obligation on the part of said party to pay such sum or any part thereof, said
party shall be entitled to recover such sum or so much thereof as if it was not
legally required to pay under the provisions of this Lease, together with
interest thereon at the statutory rate of interest. Tenant's payment of rent
shall not be or be deemed to be a waiver of any of its rights or remedies
hereunder.
3.4 In the event Base Rent or additional rent is not paid hereunder, within
7 days of when due, interest shall accrue on said Base Rent or additional rent,
at an annual rate of twelve percent (12%) from and after the due date of any
payment due hereunder. Said interest shall become additional rent payable with
the installment of Base Rent next due hereunder, and shall be without prejudice
to Curtiss' other remedies provided hereunder or by law for Tenant's default.
3.5 All amounts, other than Base Rent, required hereunder to be paid by
Tenant to Curtiss shall be deemed additional rent
-7-
<PAGE>
whether or not so designated herein.
4. SECURITY DEPOSIT:
4.1 Tenant shall furnish Curtiss upon the signing hereof, a letter of
credit in the amount of One Hundred Thousand Dollars ($100,000.00) in such form
and with such bank in the State of New Jersey as is reasonably acceptable to
Curtiss as security for the faithful performance and observance by Tenant of the
terms, provisions and conditions of this Lease. A letter of credit shall be
valid for a minimum term of one year. In the event the original letter shall be
for less than the term of the Lease and any extension thereof, a substitute
letter of credit, in the same amount, and likewise valid for a term of at least
one year, shall be furnished Curtiss at least 20 days before the expiration of
the preceding letter of credit, so that a letter of credit shall be kept in
force continuously during the entire term of this Lease. In the event of a
default by Tenant beyond the notice and cure periods provided for in this Lease
in the performance of its material obligation under this Lease or failure of
Tenant to procure the succeeding letter of credit (or at Tenant's option
substitute security) in such form and with such bank in the State of New Jersey
as is reasonably acceptable to Curtiss, the letter of credit shall be payable
upon presentation to the issuing bank of a sight draft, accompanied by a
certification signed by an authorized representative of Curtiss stating that (i)
Tenant has defaulted under a material provision of this Lease, (ii) that any
required
-8-
<PAGE>
notice of such default has been given to Tenant by Curtiss and (iii) that Tenant
has failed to cure such default within applicable cure period. Failure of Tenant
to secure the succeeding letter of credit following five business day's written
notice shall be a material breach of this lease justifying termination as for a
failure to pay rent under paragraph (e) of Section 17.1 except that the notice
provision specified in Section 17.1 shall not apply. If for any reason the
issuer of the letter of credit ceases to be acceptable to Curtiss, Tenant agrees
that it shall promptly provide a replacement letter of credit issued by a bank
that is reasonably acceptable to Curtiss. It is agreed that in the event Tenant
defaults beyond the notice and cure period provided in this Lease in respect of
any of the material terms, provision, and conditions of this Lease, including,
but not limited to, the payment of Base Rent or additional rent, Curtiss may use
said letter of credit to the extent required for the payment of any Base Rent or
additional rent or any other sum as to which Tenant is in default or for any sum
Curtiss may expend or may be required to expend by reason of Tenant's default
beyond the notice and cure period in respect of any of the material terms,
covenants and conditions of the Lease, including but not limited to any damages
or deficiency in the relettinq at the Premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Curtiss. If Curtiss so uses or applies all or any portion of said letter of
credit, Tenant shall within ten (10) days after written demand therefor obtain a
new letter of credit from a bank reasonably acceptable to Curtiss in an amount
sufficient to restore
-9-
<PAGE>
said letter of credit to the full amount hereinabove stated and Tenant's failure
to do so shall be a material breach of this Lease.
4.2 Tenant may at any time substitute cash security for the letter of
credit in which event (i) the letter of credit shall be immediately returned to
Tenant, and (ii) Curtiss shall immediately consent in writing to the termination
of the letter of credit, provided, however, that if Curtiss subsequently uses or
applies all or any portion of the cash security, Tenant shall within ten (10)
days after written demand post additional cash security in an amount sufficient
to restore said cash security to the full amount hereinabove stated and Tenant's
failure to do so shall be a material breach of this lease. The security deposit
shall be maintained in an interest bearing account and interest shall be paid
annually to Tenant.
4.3 At the end of the term of the Lease or any earlier termination and
within 10 days after delivery of the entire possession of the Premises to
Curtiss, any remaining security that is not to be or has not been used, applied
or retained in accordance with the preceding paragraphs shall be returned to
Tenant. In the event of a sale of the land of which the Premises form a part,
Curtiss shall have the right to transfer the security to the vendee, who shall
acknowledge receipt of the same, and Curtiss shall thereupon be released by
Tenant from all liability for the return of such security; and Tenant agrees to
look to the new landlord solely for the return of said security; and it is
agreed that the provisions hereof shall apply to every transfer or assignment
made of the security to a new landlord.
-10-
<PAGE>
4.4 Tenant further covenants that it will not assign or encumber or attempt
to assign or encumber the security provided herein, and that neither Curtiss nor
its successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
5. PURPOSE AND USE:
5.1 Tenant shall use and occupy the Premises for the purpose of
warehousing, distribution and/or manufacturing including without limitation
warehousing, distribution and manufacturing of paper products, any related
business, and offices in connection therewith, and for no other purpose. Curtiss
represents and warrants to Tenant that the Premises are located in a LIP (light
industrial park) zone and may lawfully be used by Tenant for warehousing,
distribution and manufacturing of paper products and related activities.
Promptly following completion of the work to be performed by Landlord, pursuant
to Article 8 hereof, Curtiss shall make application for, and shall take all such
action as shall be necessary or appropriate and shall use its best efforts, to
obtain, a permanent Certificate of Occupancy ("Certificate") permitting the use
of the Premises and each building area [ILLEGIBLE] for warehousing, distribution
and manufacturing purposes [ILLEGIBLE] in connection with occupancy of the
Premises by Tenant hereunder and Tenant shall, at its own expense, furnish
Curtiss such information as may be required to enable Curtiss to obtain such
Certificate. Curtiss agrees to contest the Borough's failure to issue a
Certificate or any action taken by the Borough or other
-11-
<PAGE>
governmental authority contesting Tenant's right of occupancy if an adequate
basis in law and fact exists. Tenant shall have the right to participate at its
own cost and expense in any such proceeding by counsel of its own choosing and
Curtiss shall not settle or compromise such proceeding without Tenant's consent
which shall not be unreasonably withheld, which litigation shall be undertaken
at Curtiss' expense. If thereafter the Certificate shall not have been issued
for any reason other than due to a default by Tenant, Tenant shall have the
right to terminate this lease upon sixty (60) days written notice to Curtiss.
Upon vacating the Premises, the letter of credit delivered pursuant to Article
4, the then current monthly rent, appropriately apportioned, and any other
prepaid sums shall be returned to Tenant and Curtiss shall immediately consent
in writing to the termination of the letter of credit. In the alternative, in
addition to any other abatements provided for herein, Tenant shall be entitled
to a rent abatement for up six (6) months during the period that Tenant's use of
the Premises in accordance with Article 5.1 shall not be in compliance with law
as a result of the Certificate not having been issued for any reason other than
due to a default by Tenant, upon the expiration of which period, Tenant shall
vacate the Premises and neither party shall have any further obligations or
liabilities hereunder. Upon vacating the Premises, the letter of credit
delivered pursuant to Article 4, and any other prepaid sums shall be returned to
Tenant and Curtiss shall immediately consent in writing to the termination of
the letter of credit. Nothing herein, however, shall release Tenant from its
obligation to repay the loan made pursuant to a
-12-
<PAGE>
certain Loan Agreement dated December 15, 1995.
5.2 Tenant shall not knowingly permit any part of the Lease Area to be used
for any unlawful purpose, nor do or permit anything to be done in or on the
Lease Area which in any way violates the Certificate of Occupancy affecting the
Premises or makes void or voidable any insurance then in force with respect
thereto, or causes an increase in insurance rates therefor, or which will cause
or be likely to cause structural damage to the Lease Area or any part thereof,
or which will constitute a public or private nuisance. If Tenant's manner of use
of or operations in the Premises or Tenant's failure to comply with this
Article, directly causes the fire insurance rate for all or any part of the
Premises or Curtiss' other property at the Facility at any time during the term
hereof to be higher than it otherwise would have been, then Tenant shall
reimburse Curtiss, as additional rent, within thirty (30) days of notice of the
amount thereof, accompanied by appropriate supporting documentation for such
additional part of all fire insurance premiums thereafter paid by Curtiss by
reason of such use by Tenant or failure by Tenant to so comply.
5.3 Anything elsewhere in this Lease to the contrary notwithstanding, if,
either in response to a requirement of the fire insurer of the property of which
the Premises are a part, or of any general regulation of a federal, state or
local government agency, or to prevent the imposition of a penalty or charge
against the full allowance for a sprinkler system in the insurance rate set by
said insurer, a sprinkler system in addition to the existing sprinkler system
must be installed, or modifications or alterations
-13-
<PAGE>
must be made to the existing sprinkler system hereunder by reason of Tenant's
operation or business or the location of partitions, trade fixtures or other
contents of the Premises, Tenant shall, at Tenant's expense, promptly make such
sprinkler system installation, changes, modifications or alterations, and supply
additional sprinkler heads or other equipment as required, whether the work
involved shall be structural or non-structural in nature.
6. OBSERVATION OF LAWS, RULES AND REGULATIONS:
6.1 Tenant will promptly comply with all requirements of federal, state,
municipal and other governmental laws, orders, regulations, inspections,
licenses and permits, with respect to the Premises and will pay promptly all
fees and charges connected therewith, failing which Curtiss may, but need not,
pay any and all such fees and charges for the account of Tenant, said sums
constituting and being collectible as additional rent. Tenant shall at its
expense furnish to Curtiss or its designee all information necessary to
determine if Tenant has complied with this Lease and all applicable laws with
which Tenant is required to comply. Tenant shall also on request by Curtiss
furnish at Curtiss' expense such information as Curtiss may reasonably require
in connection with seeking and obtaining an approved negative declaration or an
approved cleanup plan under the Industrial Site Recovery Act of the State of New
Jersey ("ISRA"). Curtiss represents and warrants to Tenant that the Premises,
Lease Area and all appurtenances, fixtures, facilities and installations
relating thereto are and shall be delivered to Tenant in full compliance
-14-
<PAGE>
with all laws, including, without limitation, the ISRA, all other environmental,
pollution, health, safety, fire and building code laws, and that to the best of
Curtiss' knowledge the same are and shall be free of any and all hazardous
substances which may give rise to a violation of such laws. There are no
violations, whether or not of record, affecting the Premises or the Building and
Curtiss knows of no facts, circumstances, conditions, bases or ground for any
such violations. Curtiss covenants and agrees to defend, hold harmless and
indemnify Tenant, its shareholders, officers, directors, employees, agents,
permitted subtenants and assigns from and against any and all liabilities,
losses, claims, actions, causes of action, damages, demands, judgments, fines
penalties, costs and expenses, including, without limitation, attorneys' fees,
court costs and disbursements, (collectively, "Claims") arising out of or in
connection with the presence of hazardous materials in or about the Premises.
With respect to the foregoing, Tenant shall have the right to participate in the
defense of, or at its option, to assume the defense of, any action, suit,
proceeding, demand, assessment or judgment brought by any party against Tenant.
Curtiss shall be fully and solely responsible, at Curtiss' sole cost and
expense, for any clean-up and repairs, structural or otherwise, required due to
the presence of hazardous materials in the Lease Area. If any clean-up, repair
or similar action is required by any governmental or quasi-governmental agency
as a result of hazardous materials in the Lease Area not generated by Tenant,
and such action materially interferes with the conduct of Tenant's business at
the Premises, Base Rent
-15-
<PAGE>
and additional rent will abate in proportion to the interference or damage
sustained by Tenant during such period, provided, however, if such interference
with the operation of Tenant's business causes a material financial impact which
shall continue for a period in excess of thirty (30) days, Tenant may terminate
this Lease upon giving not less than sixty (60) days' written notice. The
applicable provisions of this paragraph shall survive the expiration or earlier
termination of this Lease.
6.1.1 Tenant shall not generate, discharge or allow the escape of any
hazardous substance or pollutant in or about the Premises in violation of
applicable environmental laws. Tenant further agrees to remove any pollutant or
hazardous substance entering into the Premises during the term of this lease
which occurs as a result of Tenant's negligence. Tenant shall indemnify, defend
and hold Curtiss, its officers, directors, shareholders, employees and agents
harmless from any costs and expenses including remediation expenses incurred
resulting from Tenant's breach of any of said obligations,
6.2 Tenant covenants and agrees that if, other than with respect to or as a
result of conditions and/or hazardous materials at the Premises or Lease Area
existing as of the date hereof, or as of the Occupancy Date applicable to each
building area (other than the installation of the concrete floor by Tenant), or
for which Curtiss is otherwise liable pursuant to section 6.1, Tenant's use or
cessation of use of the Lease Area at any time during the term or extended term
or any period of holding over hereunder shall be such as to make Tenant subject
to ISRA with respect to such use,
-16-
<PAGE>
Tenant shall at least six (6) months before the expiration of the term or any
extended term hereof file such notice or notices and initiate such other action
as shall under ISRA or regulations issued pursuant thereto then be required of
an operator of an industrial establishment who has already made public the
decision to close operations. Tenant further covenants and agrees to exert its
best efforts to complete any actions then required in order to obtain either an
approved negative declaration or a certification by the Department of
Environmental Protection that Tenant's cleanup plan has been executed and the
Lease Area, other than with respect to or as a result of conditions and/or
hazardous materials at the Premises or Lease area existing as of the date hereof
or as of the Occupancy Date applicable to each building, or for which Curtiss is
otherwise liable pursuant to Section 6.1 has been detoxified (as the concepts of
approved negative declaration and certification by the Department of
Environmental Protection are used in ISRA) within the term or extended term
hereof. Tenant shall be responsible for all costs of or associated with any
compliance with ISRA that may be required as the result of Tenant's use of the
Lease Area, other than with respect to or as a result of conditions and/or
hazardous materials at the Premises or Lease area existing as of the date hereof
or as of the Occupancy Date applicable to each building, or for which Curtiss is
otherwise liable pursuant to section 6.1, regardless of whether such costs be
incurred during or subsequent to the term or any extended term hereof. The
obligations of this Section 6.2 are in addition to those imposed by section 6.1.
6.3 Tenant shall not place any load on the floor of the
-17-
<PAGE>
Premises which shall exceed 800 lbs. per square foot, nor will it do or permit
any act or thing to be done in or to the Lease Area which, directly or
indirectly, may be dangerous to life, limb or property, or which shall subject
Curtiss to any liability to any person for any damage whatsoever.
6.4 Tenant shall pay all costs, expenses, fines, penalties or damages,
including but not limited to reasonable legal expenses, which may be incurred by
Curtiss by reason of Tenant's failure to comply with the provisions of this
Article.
7. CONDITION 0F PREMISES, REPAIR, MAINTENANCE, REMOVAL 0F TRADE FIXTURES:
7.1 Tenant has examined the Premises before signing this Lease and is
satisfied with the condition thereof excepting (i) such alterations,
improvements and repairs which are specifically provided for by Article 8 and
(ii) latent defects, and provided that the representations of Curtiss herein
contained with respect to the Premises are true and accurate. Except as provided
in this Article and Article 8, Tenant's occupancy of any portion of the Premises
after commencement of the Lease term shall be conclusive evidence against Tenant
that the Premises are in good order and repair at the time of delivery other
than for latent defects.
7.2 No promise of Curtiss to alter, remodel, improve, repair, decorate or
clean, and no representation, statement or warranty express or implied,
respecting the condition of the Premises, or any other matter relating to this
Lease, has been made by Curtiss to Tenant, nor is any representative of Curtiss
authorized to make
-18-
<PAGE>
any such promise, representation, statement or warranty, unless the same is
contained in this Lease or is in a writing expressly made a part hereof.
7.3 Curtiss shall, at its sole cost, repair and maintain in good working
order, condition and repair and in tenantable condition, the Premises'
foundations, load-bearing walls, roof and the underground or covered portions of
the plumbing and sewer systems, all portions of the electrical and water
distribution systems up to the Premises, all transformers and electrical
substations, and the non-exclusive areas unless such repairs are necessitated by
the negligent acts of Tenant, its employees, agents or other invitees or
licensees. Except as otherwise provided in Article 12, no allowance shall be
made to Tenant for any diminution in the value of the Premises nor shall Curtiss
be liable to Tenant for any inconvenience or damage to Tenant's business arising
from Curtiss' failure to meet its obligations under this Section 7.3.
7.4 Tenant shall make all other repairs and replacements to the Premises,
including but not limited to the floor, above ground and uncovered portions of
the plumbing and sewer systems and the entire electrical, heating, ventilating,
air conditioning, sprinkler, hot and cold water systems, and exclusive yard and
parking areas so as to keep same in tenantable and proper condition without cost
to Curtiss. Further, in no event shall Tenant be liable for any repairs or
replacements due to the negligent acts of Curtiss or Curtiss' employees, agents
or representatives. In no event shall Tenant be obligated to make repairs to the
items identified in Section 7.3 unless due to Tenant's negligence.
-19-
<PAGE>
Except as to Curtiss' obligation under Article 8 hereof, Tenant shall also make
any and all repairs or changes which may be necessary to make the Premises and
the use thereof comply with applicable laws, ordinances, orders or regulations
of any federal, state, county or municipal authority now or hereafter in effect
except as otherwise provided elsewhere in this Lease.
7.5 All repairs made by Tenant hereunder shall be of quality or class equal
to the original work or construction and to the reasonable satisfaction of
Curtiss. If Tenant shall fail to make the repairs or perform the maintenance
required thereof following 30 days' written notice from Curtiss, Tenant shall be
liable for any damage to the Premises and Curtiss may have such repairs or
maintenance done at the expense of Tenant, said damage, and expense constituting
and being collectible as additional rent within five (5) days of notification to
Tenant of the amount involved accompanied by appropriate invoices and receipts
therefore.
7.6 Tenant shall supply all janitorial services required to maintain the
exterior and interior of the Premises in a neat, clean and orderly condition,
and shall further be responsible to remove any litter or debris created by or
attributable to Tenant's operations, employees, or other invitees or licensees,
in the non-exclusive area. Commencing upon the Occupancy Date applicable to each
building area, Tenant shall pay Curtiss, monthly, as additional rent, within ten
(10) days after Tenant is billed therefor, its share, as defined below, of all
costs and expenses, direct and indirect, incurred by Curtiss in maintaining and
repairing the common areas which are deemed to serve, be associated
-20-
<PAGE>
with or benefit the area in which the Premises are located, consisting of roads,
fencing, gates, non-exclusive parking lots, sidewalks, stairways, and landscaped
areas. Costs and expenses incurred in connection with the common area shall
include, but not be limited to, those relating to (a) removal of snow, ice and
debris; (b) traffic regulation, paving and curbing; (c) landscaping, planting
and shrubbery; and (d) lighting plus administrative costs incurred in connection
with the aforesaid items. In no event shall such costs and expenses include: (a)
the cost of any capital improvements to the Building or related property or the
cost of any item that is or should in accordance with generally accepted
accounting principles be capitalized on the books of Curtiss, (b) costs or
repairs, alterations or replacements necessitated by casualty losses or the
exercise of the rights of eminent domain or which relate to any violations or
notices of violation issued against the Facility or the common or exterior areas
other than due to Tenant acts, or (c) fees and/or expenses incurred with regard
to leasing, selling or financing any portion of the Building, Facility or the
common areas thereof, or (d) fees, costs and/or expenses incurred in connection
with work or services performed for or exclusively benefitting another tenant in
the Facility; (e) or cost or expenses on account of computations where the
aggreqate of the proportionate shares for all tenants of the Facility subject to
the common area charge equal a number greater than 100 percent of such charge.
Curtiss represents and warrants to Tenant that the rentable building area
presently served, associated with or benefitted by the common areas is 2,139,074
-21-
<PAGE>
square feet, which measurement may be changed from time to time to reflect
additions to or deletions from the rentable building area. Tenant's share shall
be appropriately reduced in the event of additions to the rentable building
area. Tenant's share of common area costs and expenses shall be a decimal
portion of the total calculated in accordance with the following formula:
Square Footage of Premises
Tenant's Portion = -----------------------------------
Square Footage of Rentable Building
Area Served, Associated with or
Benefitting the Common Areas,
provided, however, that Tenant's share of common area costs shall not exceed
five (5) cents per annum per square foot of the Premises leased hereunder and
any overpayments made by Tenant during any lease year shall be promptly refunded
by Curtiss to Tenant. This obligation shall survive the expiration or earlier
termination of this Lease. All common area costs for any partial month falling
within the term shall be appropriately pro-rated. Curtiss shall provide an
annual statement setting forth the manner in which such amounts were calculated.
Curtiss shall furnish to Tenant, within ten (10) business days of Tenant's
request therefor, any and all additional information and documentation
reasonably required by Tenant to confirm and verify such calculations. Tenant
shall have the annual right during the term of this Lease to conduct an audit of
Curtiss' books, documents, records, papers and files relating to the common area
costs for any year. For any such audit, upon reasonable advance notice, Curtiss
shall make such documents available at Curtiss' office in New Jersey for
examination during business hours by Tenant, Tenant's agents,
-22-
<PAGE>
representatives and/or employees. Curtiss agrees that it shall keep the
non-exclusive areas free of snow, debris and any other obstruction or
interference to the extent practical, but shall not be liable to Tenant for any
inconvenience or damage to Tenant's business for failure to do so provided it
exerts its best efforts.
7.7 Machinery and mechanical equipment belonging to the Tenant which cause
vibration, noise, cold or heat that may be transmitted to the building structure
or to any portion thereof to such degree as to be likely to damage the Premises,
shall be placed and maintained in such a way as to eliminate or prevent such
vibration, noise, cold or heat.
7.8 At the expiration or sooner termination of the Lease, Tenant shall
deliver the Premises to Curtiss in substantially the same condition in which
they existed at the inception of this Lease, and as modified by Landlord's work,
reasonable wear and tear, and damage by fire or other casualty, excepted.
7.9 Tenant shall have the right at all times and, at Curtiss' request, the
obligation, upon the termination of this Lease or termination of any renewal
thereof to remove any and all trade fixtures, machinery and equipment furnished
by it. Should Tenant exercise its rights hereunder, or should Curtiss by notice
to Tenant no later than thirty (30) days prior to the date fixed as the
termination of this Lease, notify Tenant to remove said trade fixtures,
machinery and equipment, the same shall be removed from the Premises by Tenant
forthwith at Tenant's expense, and Tenant will repair and restore all surfaces
from which trade fixtures, machinery and equipment are removed to at least the
equal of their
-23-
<PAGE>
condition prior to installation, reasonable wear and tear and damage by fire or
other casualty excepted. All property permitted or required to be removed by
Tenant at the end of the term remaining in the Premises after Tenant's removal,
shall be deemed abandoned and may, at Curtiss' election, either be retained as
Curtiss' property or may be removed from the Premises by Curtiss at Tenant's
expense, which expense to the extent reasonable shall be collectible as
additional rent within five (5) days after notice to Tenant of the amount
involved.
8. MODIFICATIONS BY LANDLORD:
8.1 On or before the delivery date applicable to each building area,
Curtiss shall substantially complete the changes, modifications and alterations
applicable to such building area as is listed on Exhibit "B", which is attached
hereto and made a part hereof, at its sole cost, subject only to delays in
making said changes, modifications and alterations caused by strikes, acts of
God or other causes beyond its control. For purposes hereof, the work shall be
deemed "substantially complete" on the date that all such work has been
performed, in accordance with Exhibit B annexed to this agreement, and in a good
and workerlike manner, in compliance with all applicable laws with the exception
only of minor punchlist items which shall be completed by Curtiss within thirty
(30) days from substantial completion provided however that if any punchlist
item is not capable of being performed within such thirty (30) day period then
Curtiss shall perform such items with due diligence. All such work shall be
performed by Curtiss in a
-24-
<PAGE>
good and workerlike manner in accordance with all applicable laws, orders, rules
and regulations of all governmental authorities having or asserting jurisdiction
of the Premises. Any and all defects in workmanship shall be promptly corrected
by Curtiss. Tenant shall have thirty (30) days from the date of written notice
of completion by Curtiss of any item of work listed on Exhibit "B" to notify
Curtiss in writing of any objections it has to that item of work. In the absence
of notification within such period, said work shall be deemed conclusively to
have been satisfactorily completed in accordance with Exhibit "B" except with
respect to latent defects. Tenant shall have the benefit of any warranties
obtained by Curtiss in connection with the modifications and alterations made by
or for Curtiss hereunder. To the extent such warranties are not assignable
Tenant shall have the right to enforce such warranties in the name of Curtiss at
Tenant's expense.
9. UTILITIES.
9.1 Curtiss shall, at its expense, furnish to the Premises gas-fired
heating units which are and shall be in good working order, repair and condition
and sufficient to heat the Premises to a temperature of 70 degrees Fahrenheit
when the exterior temperature is 0 degrees Fahrenheit. Tenant shall, at its
expense, service, maintain and operate the heating units so as to maintain a
minimum temperature in the Premises of 50 degrees Fahrenheit at all times. Gas
to the Premises is supplied by PSE&G.
Tenant shall, as promptly as practicable after the signing of this Lease,
apply to PSE&G for service of gas to the Premises and shall obtain from and pay
said utility directly for
-25-
<PAGE>
gas consumed by Tenant.
9.2 Tenant shall purchase its electric power from Curtiss on the following
terms. Curtiss shall install and maintain meters at its own expense to measure
the electric power supplied to Tenant. Tenant shall pay monthly for the power
supplied at the rate determined and adjusted by Curtiss in accordance with the
provisions of Sections 9.2 and 9.3 of this Lease, which as of December 1, 1995,
was .1217 per kilowatt hour. The initial rate will be a projected rate for the
remaining monthly billing period between the first day following the expiration
of each Abatement Period applicable to each building area and the final day of
the September billing period next ensuing and will include all of Curtiss'
projected costs applicable to that period both direct and indirect to purchase
and distribute the power. This projected rate will be adjusted each year based
on Curtiss' projection of such costs for the following 12 month period
commencing with the October billing and ending with the September billing of the
following year. Such adjusted projected rate will be billed Tenant commencing
with the October billing of each year. By December 1 of each year, Curtiss will
advise Tenant of its final rate for the prior 12 months (i.e., from the October
billing of the preceding year to and including the September billing of the
current year). The first billing after the determination of the actual costs
will include a debit or credit measured by the difference between the projected
rate billed and actual rate, which debit or credit will be due or payable by
Curtiss or Tenant, as the case may be, with
-26-
<PAGE>
such billing. The obligation to remit any credits or debits shall survive the
expiration or earlier termination of the Lease term.
9.3 The rate shall be calculated according to the following formula:
Total Cost plus
10% of such Total Cost
Rate/kilowatt hour = ------------------------
Total Consumption (in
kilowatt hours)
wherein Total Cost shall mean all of Curtiss' costs as defined in Section 9.4 of
purchasing and distributing the total amount of electric power consumed by all
users in the Facility during the relevant time period; and Total Consumption
shall mean the total amount of electric power consumed by Tenant and all other
users in the Facility of electric power purchased by Curtiss during the relevant
time period, it being recognized that such total Consumption will fluctuate from
time to time by reason of increases and decreases in user's needs for electric
power during the period and the withdrawal of existing users or addition of new
users to the total user base, and thus that the Rate will be adjusted not only
for changes in individual elements of costs but also may vary with the volume of
Total Consumption.
9.4 The costs of purchasing and distributing electric power shall include
each and every expense incurred in connection with the ownership,
administration, management, operation and maintenance of the electric
transformer and distribution system, including but not limited to costs of
purchase net of any discounts and/or rebates; wages, salaries and fees paid to
persons either employed by Curtiss or engaged as independent contractors in the
operation of the electric power supply system; transformer, and
-27-
<PAGE>
distribution losses; repairs, maintenance, alterations, additions and
improvements to the electric power supply system which are expended, whether
made by persons employed by Curtiss or engaged as independent contractors,
taxes, insurance, and administration costs; "costs" as used herein shall not
include costs incurred to remedy any violation of applicable Federal, State or
local laws, rules, orders, or regulations. All such costs shall be reflected on
a reasonably detailed comparative statement (the "Statement") accompanied by
appropriate supporting documentation which shall be delivered to the Tenant upon
request in writing made within ninety (90) days after Tenant's receipt of notice
of the effective date of the change in rate and the applicable provisions of
Section 7.6 above relating to Tenant's right to audit the books and records of
Curtiss shall apply and are deemed incorporated herein by reference. If Tenant
shall commence manufacturing at the Premises, Curtiss agrees to negotiate in
good faith with Tenant for a discounted rate for Tenant's electric consumption.
9.5 Notwithstanding any other provisions of this Lease, (1) Curtiss shall
have no responsibility to supply electric power which exceeds the capacity of
Curtiss' present supply system, (but Curtiss hereby warrants that its present
system shall supply a minimum of 1200 amps of electrical power to the Premises)
and (2) Curtiss shall have the right to terminate the supply of electric power
to Tenant on six months' advance notice in writing based upon Curtiss'
reasonable determination that the system is unable to accommodate Tenant's
electrical power requirements. If, notwithstanding Tenant's efforts to obtain
direct service, Tenant is unable to do so within such six (6) month period,
Curtiss agrees
-28-
<PAGE>
that it shall not terminate the supply of electric power to Tenant for an
additional two month period. Following the effective date of termination Tenant
shall be responsible for obtaining its own supply of electric power directly
from the utility company at its own expense in which event Tenant shall have no
further liabilities or obligations under Section 9.2. Curtiss agrees to
reasonably cooperate in the installation of such direct service including
granting all necessary utility easements; provided, however, the work of
installing direct service to Tenant shall be subject to the provisions of
Article 10 hereof, provided however, Curtiss' disapproval of Tenant's plans for
the installation of direct service may be based solely on its reasonable
determination that the proposed work will materially interfere with the Building
systems and is incompatible with the Building structure, and in no event shall
Tenant's installation impair the supply of utility service to other tenants.
9.6 Tenant shall purchase water from Curtiss on the following terms.
Curtiss shall install and maintain meters at its own expense to measure the
water supplied to Tenant. Tenant shall pay for water supplied at the rate
determined and adjusted by Curtiss from time to time in accordance with the
provisions of Section 9.7 below. The initial rate will be a projected rate for
the remaining monthly billing periods between the first day following the
expiration of each Abatement Period applicable to each building area and the
final day of the September billing period next ensuing and will include Curtiss'
projection of all of its costs applicable to that period both direct and
indirect to acquire and distribute the water and furnish sewer service,
excluding the cost of water
-29-
<PAGE>
meters, the cost of which shall be billed as a separate meter charge. Said meter
charge shall be equivalent to that charged by the Passaic Valley Water
Commission for water meters of the same size as those installed on the Premises.
This projected rate will be adjusted each year based on Curtiss' projection of
such costs for the following 12-month period commencing with the October billing
and ending with the September billing of the following year. Such adjusted
projected rate will be billed Tenant commencing with the October billing of each
year. By December 1 of each year, Curtiss will advise Tenant of its final rate
for the prior 12 months (i.e., from the October billing of the preceding year to
and including the September billing of the current year). The first billing
after the determination of the actual costs will include a debit or credit
measured by the difference between the projected rate billed and actual rate,
which debit or credit will be due or payable by Curtiss or Tenant, as the case
may be, with such billing. The obligation to remit the credit or debit, as the
case may be, shall survive the expiration or earlier termination of this Lease.
9.7 The rate shall be calculated according to the following formula:
Total Cost plus 10%
of such Total Cost
Rate/cubic foot = --------------------
Total consumption
(in cubic feet)
wherein Total Cost shall mean all of Curtiss' costs as defined in Section 9.8 of
acquiring and distributing the total amount of water consumed by all users in
the Facility during the relevant time period; and Total Consumption shall mean
the total amount of water consumed by Tenant and all other users in the Facility
of water
-30-
<PAGE>
supplied by Curtiss during the relevant time period, it being recognized that
Total Consumption will fluctuate from time to time by reason of increases and
decreases in users' needs for water during the period and the withdrawal of
existing users or addition of new users to the total user base, and thus that
the Rate will be adjusted not only for changes in individual elements of cost
but also may vary with the volume of Total Consumption.
9.8 The costs of acquiring and distributing water shall include each and
every expense incurred in connection with the ownership, administration,
management, operation and maintenance of the water supply system and sewage
system, including but not limited to costs of purchase net of any discounts
and/or rebates; wages, salaries and fees paid to persons either employed by
Curtiss or engaged as independent contractors in the operation of the water
supply system and sewage system; electricity; transmission and distribution
losses; repairs, maintenance, alterations, additions and improvements to the
water supply system and sewage system which are expended, whether made by
persons employed by Curtiss or engaged as independent contractors, taxes,
insurance, and administrative costs; "costs" as used herein shall not include
costs incurred to remedy any violation of applicable Federal, State or local
laws, rules, orders or regulations. All such costs shall be reflected on a
reasonably detailed comparative statement (the "Statement") accompanied by
appropriate supporting documentation which shall be delivered to the Tenant upon
request in writing made within ninety (90) days after Tenant's receipt of notice
of the effective date of a change in rate and the applicable provisions of
Section 7.6 above relating to Tenant's right to audit the books and
-31-
<PAGE>
records of Curtiss shall apply and are deemed incorporated herein by reference.
9.9 The expenses referred to in this Article shall be determined in
accordance with generally accepted accounting principles consistently applied
and each Statement furnished shall be certified by Curtiss as true and correct.
Tenant or its representatives shall have the right, at Tenant's expense, upon
reasonable notice and during reasonable hours, to inspect the books of Curtiss
to the extent necessary to verify the information contained in any Statement,
provided prior written request for such inspection shall be made by Tenant
within ninety (90) days after receipt of such Statement.
9.10 Notwithstanding any other provisions of this Lease, (1) Curtiss shall
have no responsibility to supply water which exceeds the capacity of Curtiss'
present supply system and (2) Curtiss shall have the right to terminate the
supply of water to Tenant on six (6) months' advance notice in writing based
upon Curtiss' reasonable determination that the system is unable to accommodate
Tenant's water requirements. If notwithstanding Tenant's best efforts to obtain
direct service, Tenant is unable to do so within such six (6) month period,
Curtiss agrees that it shall not terminate the supply of water to Tenant for an
additional two (2) month period. Following the effective date of termination
Tenant shall be responsible for obtaining its own supply of water directly from
the utility company at its own expense, in which event Tenant shall have no
further liabilities or obligations under Section 9.6. Curtiss agrees to
reasonably cooperate in the installation of such direct service including
granting all necessary utility easements;
-32-
<PAGE>
provided, however, the work of installing direct service to Tenant shall be
subject to the provisions of Article 10 hereof, and in no event shall Tenant's
installation impair the supply of utility service to other tenants provided,
however, Curtiss' disapproval of Tenant's plans for the installation of direct
service may be based solely on its reasonable determination that the proposed
work will materially interfere with the Building systems and is incompatible
with the Building structure.
9.11 Sanitary wastes from the Premises may be discharged into Curtiss'
sanitary sewers. Tenant shall make no connection to Curtiss' system without
first obtaining in advance Curtiss' written approval thereto, which shall not be
unreasonably withheld.
9.12 Tenant agrees that it will, at no time, discharge into Curtiss' sewer
system any substance, liquid or solid, which may be detrimental to or cause
disintegration of or damage to Curtiss' sewer line or system, or which may
violate local, state or federal laws or statutes. Without limitation of Curtiss'
rights under Article 17 of this Lease, Tenant shall promptly after the discovery
of any such improper or unlawful use take all necessary steps to discontinue
such use. Tenant shall indemnify Curtiss against all costs, expenses,
liabilities, losses, damages, injunctions, suits, fines, penalties, claims and
demands, including reasonable counsel fees; arising out of any violation of this
covenant.
9.13 Tenant will be billed no more often than monthly for the above
utilities. In the event Curtiss' charges to Tenant for the supplying of
utilities hereunder remain unpaid for a period of fifteen (15) days after the
same are billed, Curtiss may, upon
-33-
<PAGE>
three (3) days' notice, discontinue all utility services while such charge
remains unpaid without prejudice to Curtiss' rights hereunder for default in the
payment of additional rent, without releasing Tenant from any liability under
this Lease and without Curtiss or its agents or employees incurring any
liability for any damage or loss sustained by Tenant by such discontinuance of
service. All utility charges payable under this Lease shall be considered
additional rent hereunder.
9.14 Curtiss does not warrant that any utility service, including electric,
water and sewerage will be free from interruptions caused by repairs, renewals,
improvements, changes of service, alterations, strikes, lockouts, labor
controversies, accidents, laws, orders or regulations of any federal, state or
municipal authorities, inability of Curtiss to obtain fuel or supplies or any
other cause or causes whether or not beyond the reasonable control of Curtiss.
While Curtiss shall attempt to restore such service using its best efforts and
taking into account Tenant's business operations using its best efforts to
minimize interference with Tenant's operations, any such interruption shall
neither be deemed an eviction or disturbance of Tenant's use and possession of
the Premises or any part thereof nor relieve Tenant from full performance of
Tenant's obligations under this Lease.
9.15 Curtiss shall not in any wise be liable or responsible to Tenant for
any loss or damage or expense which Tenant may sustain or incur if either the
quantity or character of the utility service is changed or interrupted, or if no
longer available or suitable for Tenant's requirements.
-34-
<PAGE>
9.16 Should Curtiss or a public utility require a change in the method of
supplying Tenant with a utility hereunder, Curtiss shall immediately notify
Tenant of such required change and may either effectuate such change or advise
Tenant of its election not to supply said utility. In such latter event, Tenant
shall obtain said utility directly at its cost and shall have no further
liability to Curtiss for the cost therefor.
9.17 In the event Tenant converts or attempts to convert to its own use,
any utility supplied to it or to another Tenant at the Facility without payment
therefor as provided herein, Tenant shall promptly pay to Curtiss for the
utility service converted or attempted to be converted a sum equal to the total
billing charges for the six (6) month preceding the date of such act.
9.18 Curtiss shall not be obligated to supply Tenant with any utilities
other than as set forth hereunder.
9.19 Curtiss will, at Tenant's request and reasonable expense, upon
reasonable notice by Tenant and at reasonable times, disconnect or interrupt
utilities supplied to or routed through the Premises if same is required for the
purpose of Tenant performing construction or maintenance on the Premises.
10. ALTERATIONS BY TENANT:
10.1 Tenant shall make no alterations or changes in the Lease Area,
including alterations or changes to utility systems serving the Premises, other
than of a decorative or cosmetic nature without the prior written consent of
Curtiss first had and obtained. Detailed plans and specifications showing any
such proposed
-35-
<PAGE>
alterations and changes shall be submitted to Curtiss for approval with the
application for such consent, which consent and approval shall not be
unreasonably withheld. Curtiss' failure to grant or deny its consent or approval
as the case may be within ten (10) days of receipt of Tenant's written request
therefor shall constitute Curtiss' consent and/or approval, as the case may be.
10.2 All alterations and changes by Tenant shall be made at the sole cost
and expense of Tenant and under the supervision of Curtiss. All alterations and
changes by Tenant shall be made in a workmanlike manner and in conformance with
all municipal, state or other governmental regulations, and built-in
non-moveable alterations shall, upon installation, become the property of
Curtiss. All moveable property, furniture, furnishings, equipment, improvements,
installations and trade fixtures may be freely removed from the Premises,
including interior partitions. Upon Curtiss' request given no later than sixty
(60) days prior to the termination of this Lease, Tenant shall, not later than
the termination of this Lease, remove all alterations, additions and
improvements made by Tenant pursuant to this Article, and Tenant will repair and
restore all surfaces from which alterations, additions or improvements are
removed to at least the equal of their condition prior to installation,
reasonable wear and tear and damage by fire or other casualty excepted. All
alterations, additions and improvements required to be removed by Tenant
pursuant to this Section 10.2 remaining after the termination of this Lease may
be removed from the Premises by Curtiss at Tenant's expense, which expenses to
the extent reasonable, shall be
-36-
<PAGE>
collectible as additional rent. Curtiss shall not, in any event or under any
circumstances, have any liability or responsibility for any such alterations,
additions or improvements.
11. MECHANIC'S LIENS:
11.1 Tenant will not create and will discharge within 30 days of Tenant's
receipt of notice of the filing thereof, by filing the bond required by law, or
otherwise, any mechanic's, laborer's or materialman's lien which shall be or
become a lien, encumbrance or charge upon the Premises or any part thereof or
the income therefrom, as a result of any action by or on behalf of Tenant, and
will not suffer any other matter or thing arising out of its use and occupancy
whereby the estate, rights and interests of Curtiss in the Premises or any part
thereof would be impaired. Notice is hereby given that Curtiss shall not be
liable for any labor or materials furnished or to be furnished to Tenant upon
credit, and that no mechanic's or other lien for any such labor or materials
shall attach to or affect the reversionary or other estate or interest of
Curtiss in and to the Premises.
12. DAMAGE BY FIRE OR OTHER CASUALTY:
12.1 In the event the Premises are rendered totally unusable by fire or
other casualty, this Lease shall terminate and be of no further force and effect
as of the date of said fire or other casualty and Tenant shall forthwith vacate
and surrender the Premises. In the event of fire or other casualty by any cause
which renders less than thirty percent (30%) of the Premises unusable, Curtiss
shall repair such damage with reasonable
-37-
<PAGE>
diligence. During the period of repair the Lease shall remain in force,
provided, however, the Tenant shall be entitled to a proportionate reduction of
said rental for that portion of the Premises not usable. In the event of fire or
other casualty which renders at least thirty percent (30%) of the Premises
unusable, Curtiss may, at its option, exercisable within thirty (30) days of
such fire or casualty, either terminate this Lease or elect to repair such
damage. In the event Curtiss decides to make such repairs, Tenant shall have the
right to terminate this Lease within 30 days of Curtiss' election, otherwise
this Lease shall continue in full force and effect, but Tenant shall be entitled
to a proportionate reduction of said rental for that portion of the Premises not
usable. In the event Curtiss determines not to repair the Premises, this Lease
shall be deemed terminated as of the date of said fire or casualty, except that
Tenant shall have thirty (30) days from the date of said notice to vacate and
surrender the Premises. During the period prior to Tenant's vacating the
Premises, rent shall be due and payable on the usable portion of the Premises at
the rates provided for herein, and the provisions of the Lease shall continue to
govern such occupancy to the extent applicable.
13. EMINENT DOMAIN OR CONDEMNATION:
13.1 If the whole or any part of the Premises shall be condemned or taken
by any municipal, county, federal, state or other lawful authority for any
purpose, then the term of this Lease shall cease on the part so taken from the
day and the possession of
-38-
<PAGE>
that part shall be required by the taking agency and the rent shall be paid up
to that day on the part so taken. Curtiss shall have the right either to cancel
this Lease and declare the same null and void,' or to require Tenant to continue
in the possession of the remainder of the same under the terms herein provided,
if less than thirty percent (30%) of the space is taken, except that the rent
shall be reduced in proportion to the amount of the Premises taken. If more than
thirty percent (30%) of the space is taken, Curtiss or Tenant shall have the
option to cancel this Lease. All damage awarded for such taking shall belong to
and be the property of Curtiss, whether such damage shall be awarded as
compensation for diminution in value to the leasehold or to the fee of the
Premises herein leased or as severance damages, provided, however, that nothing
contained herein shall be construed to preclude Tenant from prosecuting any
claim directly against the condemning authority in such condemnation proceedings
for loss of business, or depreciation to, damage to, or cost of removal and
relocation of, or for the value of stock, trade fixtures, furniture and other
personal property belonging to Tenant.
14. RIGHT TO INSPECT AND EXHIBIT:
14.1 Curtiss or its agents may enter the Premises at all reasonable times
upon reasonable advance notice in order to inspect the same, to monitor utility
consumption and install additional utility consumption measuring devices, to
determine compliance with the terms of this Lease or existing laws, rules or
regulations affecting the Premises, to service its equipment, to make repairs
-39-
<PAGE>
or alterations required to be performed by Curtiss, or to exhibit the Premises
to real estate agencies and other associated persons and prospective purchasers
or mortgagees and, during the last six (6) months of the term, to prospective
tenants, provided said entrance does not unreasonably interfere with Tenant's
operations. At any time Curtiss may affix a "For Sale" sign, and during the last
six months of the term Curtiss may affix a notice that the Premises are for
rent, in each case to a suitable part of the Premises, exclusive of doors and
windows and so as not to obstruct Tenant's signs. If Tenant shall not be
personally present to open and permit an entry into the Premises at any time
when due to an emergency entry therein shall be necessary to prevent damage to
persons or property, Curtiss or its agents may enter the Premises without
rendering Curtiss or such agents liable therefor other than for physical damage
or for loss due to its or their acts (during such entry Curtiss or its agents
shall accord reasonable care to Tenant's property) and without in any manner
affecting the obligations and covenants of this Lease.
15. LIABILITY OF LANDLORD, INDEMNIFICATION AND INSURANCE BY TENANT:
15.1 Tenant hereby agrees that Curtiss shall not be liable for injury to
Tenant's business or any loss of income therefrom or for damage to the goods,
wares, merchandise or other property of Tenant, Tenant's employees, customers,
or any other invitee or other person in or about the Premises, injury to the
person of Tenant, Tenant's employees, agents, contractors, or other invitees,
-40-
<PAGE>
regardless of whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures or from any other cause or whether the
said damage or injury results from conditions arising upon the Premises, or from
other sources or places for whether the cause of such damage or injury or the
means of repairing the same is inaccessible to Tenant.
15.2 Tenant further assumes all risk of and responsibility for, and agrees
to indemnify and hold Curtiss harmless from, any claim, loss, liability, or
judgment for any personal injury or loss of life and for any damages to the
property of any person, corporation or other entity (including but not limited
to the parties hereto, their respective agents, contractors or employees)
arising out of or in any manner connected with the acts or omissions of Tenant
hereunder, or the use, construction, operation or condition of the facilities
erected by Tenant on the Lease Area, or any other act, omission or breach of
legal obligation by Tenant (whether or not such act, omission or breach is
deemed negligent); and regardless whether any such claim or loss is sustained by
Tenant, Curtiss, or their respective agents, contractors, or employees, or by
any other persons or corporations which seek to hold Curtiss liable therefor.
Tenant shall also, at its own cost and expense, pay all reasonable charges of
attorneys and all reasonable costs and expenses arising from any of the
aforesaid claims or losses, or incurred in connection therewith, including
-41-
<PAGE>
all reasonable charges of attorneys and reasonable Costs and expenses incurred
by Curtiss in connection with the enforcement of this Section against Tenant in
any action or claim brought against Tenant and Curtiss by third parties, or in
any separate action or claim under this Article brought against Tenant, or in
any other action or claim. With respect to any claim as to which Curtiss is
indemnified hereunder, Tenant shall have the sole right to control the conduct
of the defense of any such action, suit or proceeding and to settle and
compromise any claim. Notwithstanding the foregoing, Curtiss agrees to waive its
right of recovery against Tenant for loss or damage to the Lease Area covered by
fire and supplemental casualty insurance carried by Curtiss on the Lease Area to
the extent of recovery by Curtiss under such insurance. At all times during the
Lease term and extensions thereof, Curtiss shall maintain insurance on the Lease
Area against fire or other casualty in an amount not less than 80% of the
replacement value thereof.
15.3 Tenant shall, at Tenant's sole cost and expense and for the mutual
benefit of Curtiss and Tenant, maintain public liability (including contractual
liability) insurance. Tenant shall also maintain property insurance on its own
property (including specifically fire and extended risks ("all risks") insurance
covering all types of water damage) and employers liability and compensation
insurance. The public liability insurance shall insure Tenant and Curtiss
against claims for personal injury, death or property damage occurring upon, in
or about the Premises, in the total amount of not less than Five Million Dollars
($5,000,000) combined single limit per occurrence. Such insurance shall not have
a deductible in excess of $35,000 unless Tenant posts adequate
-42-
<PAGE>
security for Curtiss' liability in the amount of the excess deductible. Tenant
agrees that it will procure endorsements on the policy or policies providing
such insurance wherein and whereby the insurance company will agree that Curtiss
shall be given thirty (30) days' advance written notice of any cancellation or
reduction of insurance under such policy or policies, and that copies of all
endorsements issued after the date of such policy or policies shall be forwarded
to Curtiss. All such policies shall name Curtiss as additional insured and
Tenant shall furnish Curtiss within ten (10) days before the commencement of the
term of this Lease with a certificate of insurance from the insurance company
showing Curtiss to be an additional insured as specified hereunder. At the same
time, or as soon as practicable after the policies are issued, Curtiss shall
also be furnished with a copy of all such policies. Failure to procure and
maintain such insurance shall be deemed a material default of Tenant justifying
termination of this Lease for default under Section 17.1(a). In the event Tenant
fails to pay any premium on such policy or policies within 10 days of when due,
Curtiss may, but shall not be obligated to, pay the same. Any amount paid by
Curtiss shall be deemed additional rent and shall be payable within five (5)
days' notice to Tenant of such payment and amount.
16. RIGHTS OF LANDLORD TO CURE BREACH, ADDITIONAL RENT:
16.1 Without prejudice to the rights of Curtiss under other provisions
herein calling for additional rent, in the event that any breach hereunder by
Tenant, continues beyond the notice and cure period provided in this Lease,
Curtiss may on five (5) business days notice to Tenant cure such breach for the
account and
-43-
<PAGE>
at the expense of Tenant (except that no notice need be given in event of an
emergency). If Curtiss, at any time by reason of such breach, is compelled to
pay or elects to pay, any sum of money or do any act which will require the
payment of any sum of money, or is compelled to incur any expense, including
reasonable attorneys' fees, in instituting, prosecuting and/or defending any
action or proceeding to enforce Curtiss' rights hereunder or otherwise, the sum
or sums so paid by Curtiss with interest at the statutory rate shall be deemed
to be additional rent hereunder and shall be payable within thirty (30) days'
notice to Tenant of such payment of the amount involved.
17. EVENTS OF DEFAULT AND RIGHTS OF LANDLORD:
17.1 Curtiss may terminate this Lease on five (5) days' notice in any of
the following circumstances (all of which shall be deemed events of default
hereunder):
(a) If Tenant shall be in default in the performance of any covenant of
this Lease (other than the covenants for the payment of Base Rent, additional
rent or any other payment required to be made by Tenant hereunder which are
covered in subdivision (e) of this Section) and if such default is not cured
within twenty (20) days after written notice thereof given by Curtiss; or, if
such default shall be of such nature that it cannot be cured completely within
such twenty (20) day period, if Tenant shall not have promptly commenced within
such twenty (20) day period or shall not thereafter proceed with reasonable
diligence and in good faith to remedy such default.
-44-
<PAGE>
(b) (i) The making by Tenant of any general arrangement or assignment for
the benefit of creditors; (ii) If Tenant becomes a "debtor" as defined in 11
U.S.C. Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant, the same is dismissed within ninety (90) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within ninety
(90) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days.
(c) If the Premises become vacant or deserted.
(d) If this Lease shall be assigned by operation of law, other than by
merger or consolidation with an affiliate of Tenant, or the Premises or any
portion thereof shall be sublet without the prior written consent of Curtiss
except as permitted in Article 24.
(e) If Tenant shall be in default in the payment of any Base Rent or
additional rent or any other payment required to be made by Tenant following
five (5) days written notice from Curtiss (provided, however, in no event shall
Curtiss be required to serve more than one such notice for the non-payment of
Base Rent during any six (6) month period).
17.2 If such default is not cured within the notice and cure period
provided in Section 17.1 and Curtiss shall give five (5) day notice of
termination provided in Section 17.1, then at the expiration of such five (5)
day period this Lease shall terminate
-45-
<PAGE>
as completely as if that were the date herein definitely fixed for the
expiration of the term of this Lease, and Tenant shall surrender the Premises to
Curtiss. If this Lease shall so terminate, Curtiss may at its option, without
formal demand or notice of any kind, re-enter the Premises by an action to
recover possession of the Premises or a summary dispossession action or by any
other lawful means, and to remove Tenant therefrom without being liable for any
damage therefor. In the event of such legal action by Curtiss, Tenant hereby
agrees that it shall not interpose any counterclaim of any nature whatsoever in
such action.
17.3 Tenant shall remain liable for all its obligations under this Lease,
despite Curtiss' re-entry, and Curtiss may re-rent or use the leased property
without releasing Tenant from liability. Tenant waives any legal requirement for
notice of intention to reenter and any right of redemption. Curtiss hereby
covenants to and shall use all commercially reasonable efforts to (i) relet the
Premises at fair market rentals and (ii) upon such reletting, collect all rents
due thereunder, to mitigate its damages.
17.4 Nothing in this Article shall be deemed to require Curtiss to give
Tenant any notice, other than such notice as may be required by statute or
Section 17.1 of the Lease, prior to the commencement of an unlawful detainer
action or for nonpayment of any Base Rent or additional rent, it being intended
that the five (5) day notice specified in Section 17.1 is only for the purpose
of creating a conditional limitation hereunder pursuant to which this Lease
shall terminate.
17.5 If the Lease shall terminate as provided in this Article,
-46-
<PAGE>
Curtiss shall have the right, at its election at any time, to recover from
Tenant the rent and charges due or payable hereunder for the balance of the
term, except to the extent that Curtiss has been able to re-rent the Premises
and mitigate Curtiss' damages.
17.6 Tenant shall pay and indemnify Curtiss against all legal costs and
charges, including reasonable counsel fees, incurred in obtaining possession of
the Premises after a default by Tenant, for such costs and charges incurred
after Tenant's default in surrendering possession upon the expiration or earlier
termination of the term of the Lease, and for such costs and charges incurred
enforcing any covenant of Tenant herein contained.
17.7 Nothing contained in this Article 17 hereof shall limit or prejudice
the right of Curtiss to prove far and obtain as damages from Tenant by reason
of termination or default hereunder an amount equal to the maximum allowed by
any statute or rule of law in effect at the time when, and governing the
proceedings in which, such damages are to be proved, whether or not such amount
be greater than the amount of the difference referred to in Section 17.5.
17.8 No act or thing done by Curtiss or its agents or employees during the
term hereof shall be deemed an acceptance of a surrender of the Premises and no
agreement to accept such surrender shall be valid unless in writing, signed by
Curtiss.
17.9 No remedy herein conferred upon or reserved by Curtiss is intended to
be exclusive of any other remedy herein or by law provided, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at
-47-
<PAGE>
law, in equity or by statute, and Tenant hereby waives whatever rights it may
have under N.J.S.A. 2A:18-60.
18. TAXES AND ASSESSMENTS:
18.1 In addition to the rent herein, for the period commencing upon the
Occupancy Date applicable to each building area, Tenant also agrees to pay,
monthly during the term of this Lease or any renewal or extension thereof,
(notwithstanding the abatement provided in Section 3.1 herein), as additional
rent, one-twelfth (1/12) of the Annual Tax Payable by Tenant for real estate
taxes, charges and assessments for space occupied by Tenant computed in
accordance with the following formula:
PA/CA x AV x R = T
where
PA = Premises Area of 488,640 square feet (or lesser areas identified in
Article 2.2 above during periods identified above);
CA = Curtiss Wood-Ridge Rentable Building Areas as of Assessment Date,
which as of the date hereof is 2,322,104 square feet;
AV = Assessed Tax Value;
R = Annual Tax Rate; and
T = Annual Tax Payable by Tenant;
provided, however, that Tenant shall not bear the cost of tax increases to the
extent they result from increases in assessed tax value brought about by
improvements to Curtiss' Wood-Ridge building
-48-
<PAGE>
any interest or penalties imposed in respect of any taxes or charges. To the
extent Curtiss incurs expenses, including but not limited to administration
expenses (which for the purpose of this Article, shall be deemed to be 20% of
counsel fees) and counsel fees, in challenging real estate taxes or assessments
to obtain a reduction or prevent or minimize an increase in such taxes or
assessments for any year or years during the term or any renewal or extension of
this Lease, the above calculation for the year or years challenged shall be
modified or recalculated by adding the expenses attributable to each such
challenged year to the taxes and assessments (AV x R) in the formula for that
year, so as to charge Tenant with so much of said expenses as are attributable
to the Premises. For the purpose of the modifications and recalculations
discussed in the preceding sentence, the portion of the expenses that shall be
attributed to each challenged year shall be determined by dividing the total of
the expenses equally among the challenged years in connection with which such
expenses were incurred. The additional rent reflecting Tenant's real estate
taxes and assessments liability will be due in monthly installments payable
concurrently with the Base Rent specified in Article 3 hereof. In the event that
as the result of the resolution (by way of court decision or agreement) of a
challenge (through legal proceedings or otherwise) to the real estate taxes
assessed on Curtiss' Wood-Ridge buildings, the amount of taxes attributable to
the Premises on account of any tax year, computed in accordance with the above
formula, is changed from the amount of taxes for that year as originally so
computed and paid by Tenant to Curtiss:
-49-
<PAGE>
(a) Tenant shall pay to Curtiss the amount of any increase in said taxes
attributable to the Premises for that year in six (6) equal monthly
installments, starting with the thirtieth (30th) day after Curtiss shall have
given Tenant written notice of such increase; or
(b) Curtiss shall, at its election exercised by written notice to Tenant,
either refund to Tenant or credit Tenant with the amount of any decrease in said
taxes attributable to the Premises for that year (i) such refund to be made in
six (6) equal monthly installments starting with the tenth (10th) day after
receipt by Curtiss of such refund and interest which obligation shall survive
the expiration or earlier termination of this Lease, or (ii) such credit to be
applied by Curtiss first against any amounts payable by Tenant to Curtiss at the
time of such receipt by Curtiss and then against amounts thereafter becoming
payable by Tenant to Curtiss as the same becomes payable, until such credit is
utilized in full and if the term of this Lease shall expire or terminate before
such credit, is utilized in full, the amount remaining thereon shall be
immediately paid to Tenant, which obligation shall survive the expiration or
termination of this Lease.
The notices from Curtiss to Tenant of increased or decreased taxes shall
set forth the calculation by Curtiss of the amount of increase or decrease
involved. If the Facility is affected by an assessment which is payable in
annual installments, then Tenant shall pay its prorata share of the installments
that are due and payable during the term of this Lease. Curtiss represents and
warrants to Tenant that as of the date of this Lease (i) Curtiss
-50-
<PAGE>
has no knowledge of any proposed or pending special assessments affecting the
Facility or any part thereof and that (ii) no part of the Facility is subject to
or affected by any assessment for public improvements, whether or not presently
a lien thereon or due and payable. All sums assessed prior to but payable in
whole or in installments after the commencement of the Lease term and all sums
assessed during the term or any renewals or extensions thereof but payable in
whole or in installments after the Lease term or any renewals or extensions
thereof shall be adjusted and prorated so that Curtiss shall pay its prorated
share for the period prior to and for the period subsequent to the Lease term or
renewals or extensions thereof and Tenant shall pay the prorated share for the
period of the Lease term and for any renewals or extensions thereof. Curtiss
agrees upon written request to submit tax bills and evidence of expenses for
Tenant's inspection.
18.2 If and to the extent that due to a change in the method of taxation or
assessment, any franchise, capital stock, capital gains, rent, income, profit or
any other tax or charge shall be substituted in whole or in part for the current
ad valorem taxes now or hereafter imposed upon the Premises, such franchise,
capital stock, capital gains, rent, income, profit or any other tax or charge
shall be deemed included in the term real estate taxes, charges and assessments
for the purposes of this Article 18 but only, to the extent of the amount
thereof that would be levied if Curtiss's interest in the land and building were
the only assets of Curtiss. Notwithstanding the foregoing sentence, in no event
shall Tenant be liable for any taxes on Curtiss' net income, regardless
-51-
<PAGE>
of the characterization of such taxes.
18.3 The term "Rentable Building Areas" as used in this Article 18 shall
mean the square footage of the Premises and that rented by all other tenants in
the Curtiss Wood-Ridge facility plus the square footage of vacant rentable space
in said facility as the same may be adjusted by any future increase/decrease in
the gross rentable area of the Facility.
19. PEACEFUL POSSESSION:
19.1 Curtiss hereby covenants and agrees that if Tenant shall perform all
of the material covenants and agreements herein stipulated to be performed on
Tenant's part, Tenant shall at all times during the term and any extension or
renewal hereof have the peaceable and quiet enjoyment and possession of the
leased Premises, subject, however, to the terms of this Lease.
20. SUBORDINATION TO MORTGAGES OR OTHER ENCUMBRANCES:
20.1 This Lease shall be subject and subordinate at all times to mortgages,
ground or other underlying leases or other encumbrances which may now or
hereafter affect the real property of which the Premises are a part, and to any
renewal modification, consolidation, replacement or extension thereof, provided
that the holder of such mortgage, lease or encumbrance agrees in writing, and
shall deliver an agreement in form and substance reasonably satisfactory to
Tenant and its counsel which provides, that if, by dispossess, foreclosure, or
otherwise such holder, or any successor in interest, shall come into possession
of the Premises or shall
-52-
<PAGE>
become the owner of such real property, or take over or exercise the right of
Curtiss in the Premises, it will not disturb the possession, use or enjoyment of
the Premises by Tenant, nor disaffirm this Lease or Tenant's rights hereunder,
so long as Tenant shall not be in default of its material obligations beyond
applicable periods of notice and cure as provided in Article 17. Although no
instrument or act on the part of Tenant shall be necessary to effectuate such
subordination, Tenant will, nevertheless, execute and deliver such further
instruments subordinating this Lease to the lien of any such mortgages, leases
or other encumbrances as may be desired by the mortgagee or lease or encumbrance
holder. If any mortgagee, trustee or ground lessor shall elect to have this
Lease treated as being prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Tenant, this Lease shall
be deemed prior to such mortgage, deed of trust or ground lease, whether this
Lease is dated prior or subsequent to the date of said mortgage, deed of trust
or ground lean or the date of recording thereof. Curtiss represents and warrants
to Tenant that there are no mortgages, ground or underlying leases, and that
there are no encumbrances that could foreclose the interest of Tenant in this
Lease.
21. SIGNS:
21.l Without the prior written consent of Curtiss, no sign, notice, display
or lettering shall be exhibited, inscribed, painted or affixed by the Tenant on
any part of the Premises if the same is visible from the outside of the
Premises. In the event of the violation of the foregoing by Tenant, Curtiss may
remove same
-53-
<PAGE>
without liability, and may charge the reasonable expense incurred for such
removal to Tenant as additional rent, which shall be payable within five (5)
days of notice to Tenant hereof.
22. HOLDING OVER:
22.1 In the event Tenant shall for any reason remain in possession after
the expiration of either the stated tern hereby granted or any renewal or
extension thereof, or after the termination of this Lease by reason of default
by Tenant hereunder, such possession shall be as a tenancy at sufferance during
which time Tenant shall pay as Base Rent and additional rent an amount equal to
double that accruing during the last month of the preceding term. This provision
does not waive Curtiss' right of re-entry or any other right hereunder; and
Curtiss may institute an action to recover possession of the Premises, or a
summary dispossession action, without first providing Tenant with notice to
quit.
23. BROKER:
23.1 The parties hereto agree that Alliance Real Estate Group, Inc. brought
about this Lease and that Curtiss shall pay the broker's commission therefor
pursuant to separate agreement. Each party represents and warrants to the other
that it has not dealt with any other broker or finder with respect to this
transaction of Lease and each party shall hold the other harmless from and
indemnify the other party against any brokerage fee or claim attributable to its
own act or deed.
-54-
<PAGE>
24. ASSIGNMENT AND SUBLETTING OF PREMISES:
24.1 The Tenant shall not sublet the Premises nor any portion thereof nor
shall this Lease be assigned by Tenant without the prior written consent of
Curtiss which consent shall not be unreasonably withheld, delayed or
conditioned. Notwithstanding anything to the contrary contained herein, the
provisions of this Article shall not apply, and Tenant shall have the absolute
right to assign this Lease and to sublet all or any portion of the Premises, to
any affiliate of Tenant and any person, corporation or other entity which
controls, is controlled by or is under common control with Tenant (collectively
"Affiliates") without releasing Tenant from liability hereunder.
24.2 The terms "assigned" and "assign" as used in Section 24.1 and 24.7
hereof shall refer to any transfer of Tenant's interest in the Premises to a
third party, except a sale, merger, or acquisition involving all of Tenant's
business at the Premises, and, in addition, a transfer of the Lease to any
person, corporation or other entity which is acquiring a controlling interest in
Tenant by purchase of stock, merger, consolidation or otherwise, or is acquiring
all or substantially all of Tenant's business or assets shall not be deemed an
assignment or transfer hereunder, including but not limited to:
(a) any assignment or transfer of this Lease by operation of law;
(b) any mortgage, pledge or collateral assignment of this Lease;
(c) any involuntary assignment or transfer of this Lease
-55-
<PAGE>
in connection with bankruptcy, insolvency, receivership or otherwise.
24.3 Curtiss shall not be liable for damages in the event Curtiss refuses
to consent hereunder to a subletting or assignment by Tenant except to the
extent such refusal is arbitrary, capricious or made in bad faith. Subject to
the preceding the sole remedy available to Tenant or any third party for such
failure to consent shall be the right to bring an action for a declaratory
judgment to determine the reasonableness of Curtiss' refusal to so consent.
24.4 Any such subletting or assignment shall be upon the following
conditions:
(a) That such disposition or transfer be subject to all the terms and
conditions of this Lease to the extent applicable;
(b) That upon subletting Tenant shall remain primarily liable to Curtiss
for the payment of rent or other charges stipulated herein and performance of
all terms and conditions of this Lease undertaken to be kept and performed by
Tenant.
(c) That upon assignment the assignee shall expressly assume and agree to
perform and comply with all the covenants and provisions of this Lease on the
part of the Tenant and shall be jointly and severally liable with the Tenant for
any default in respect of such covenant or provisions;
(d) That at the time of such subletting or assignment Tenant shall not then
be in default of its material obligations beyond the applicable periods of
notice and cure;
(e) That such assignment or sublease shall be in writing and Tenant shall,
along with its request for consent thereto,
-56-
<PAGE>
except in the case of a proposed assignment or sublease to an Affiliate, have
given Curtiss a copy of the sublease or assignment, proposed sublease or
assignment, as applicable, the names of the officers and directors or principals
of assignee or subtenant, bank references, and other available detailed
information sufficient to enable Curtiss to determine the financial
responsibility of the proposed assignee or sublessee, information concerning the
business to be conducted in the Premises, and such further information as may be
reasonably requested by Curtiss concerning the assignee or sublessee.
(f) Except in the case of a proposed assignment or sublease to an
Affiliate, that Tenant shall have given Curtiss forty-five (45) days advance
written notice of a proposed subletting or assignment.
(g) That any assignment or subletting by Tenant shall be for a term ending
not later than the last day of the term of this Lease.
(h) That if a subletting is for less than all the Premises, Tenant shall
pay all separation costs, if any, as required by Code and the cost of
restoration of the Premises to their original condition at the time of the
original subletting. All permits required in order to effectuate such separation
and restoration shall be obtained by and at the expense of Tenant or subtenant
and Curtiss shall be provided with additional security adequate to cover the
cost of such restoration.
24.5 Other than in the case of a subletting to an Affiliate, in the event
Tenant sublets the Premises in whole or in part at a Base Rent per square foot
in excess of the Base Rent per square
-57-
<PAGE>
foot provided for herein, Tenant shall pay and turn over to Curtiss fifty
percent (50%) of all such excess sums received from such subtenant when and as
received excluding sums paid for the sale or rental of Tenant's equipment,
furniture, furnishings or other personal property and less sums paid on account
of utilities and the costs and expenses incurred by Tenant in connection with
such subletting, including, without limitation, professional fees, brokerage
commissions and advertising costs.
24.6 As additional security for the prompt payment of the rent herein
reserved to Curtiss and for the faithful performance and punctual observance of
all the other covenants and conditions herein contained to be performed or
observed on the Tenant's part, subject to the rights of any lender of Tenant,
the Tenant hereby assigns to Curtiss all of the Tenant's right, title and
interest in and to any subleases which may be made by the Tenant affecting the
Premises, or any part thereof, and in and to the rents due or to become due
under the terms of any such subleases. The assignment by the Tenant to Curtiss
of its interest in and to any subleases which may be made by the Tenant, as
aforesaid, shall take effect, however, (a) only in the event of any material
default hereunder made beyond the applicable periods of notice and cure or
suffered by the Tenant, (b) after written notice of any such default given by
Curtiss to the subtenant or subtenants, (c) only as to such subleases as Curtiss
shall elect to continue in full force and effect.
24.7 In the event Tenant proposes to assign this Lease to another party
satisfactory to Curtiss, Curtiss shall consent to
-58-
<PAGE>
such assignment provided that other than an Affiliate, Curtiss shall be entitled
to fifty percent (50%) of any consideration received by Tenant from its assignee
for such assignment, payable when and as received by Tenant excluding sums paid
for the sale or rental of Tenant's equipment, furniture, furnishings or other
personal property, less the costs and expenses reasonably incurred by Tenant in
connection with such assignment, including, without limitation, professional
fees, brokerage commissions and advertising costs.
25. NON-WAIVER:
25.1 The failure of either party to insist upon strict performance of any
of the covenants or conditions of this Lease in any one or more instances shall
not be construed as a waiver or relinquishment for the future of that or any
other covenant or condition, and the same shall be and remain in full force and
effect.
26. NOTICES:
26.1 Any notice or other communication required or permitted to be given or
served under this Lease shall be in writing and shall be deemed to be
sufficiently given or served if (i) delivered personally or, (ii) mailed by
certified or registered mail, postage prepaid, or (iii) sent by facsimile
transmission with a confirmation copy sent by overnight courier no later than
the next succeeding business day and addressed as follows:
(a) if to Curtiss:
-59-
<PAGE>
CURTISS-WRIGHT FLIGHT SYSTEMS/SHELBY, INC.
c/o CURTISS-WRIGHT CORPORATION
One Passaic Street
Wood-Ridge, New Jersey 07075
Attention: Real Estate Department
(b) if to Tenant:
American Tissue Corporation
35 Engle Street
Hicksville, New York 11801
Attention: Nourollah Elghanayan
Facsimile: (516) 435--8980
Either party may from time to time, specify by notice in writing to the other,
given in the manner set forth above, a new address at which any such notice
shall thereafter be given or served.
A copy of any notice sent to Tenant pursuant to Article 17 shall be
furnished to Tenant's counsel Mandel and Resnik, 220 E.42nd Street, New York, NY
10017.
27. NOTICE OF CERTAIN EVENTS:
27.1 Tenant shall give notice to Curtiss promptly after Tenant learns
thereof, of (a) any accident in or about the Lease Area, (b) any fire in the
Premises, or (c) any damage to or defects in the Premises whether required to be
repaired by Curtiss or Tenant.
28. APPLICABLE LAW:
28.1 This Lease and the rights, duties and obligations of the
-60-
<PAGE>
parties as set forth herein, shall be settled and determined in accordance with
the laws of the State of New Jersey.
29. LEASE BINDING ON SUCCESSORS AND ASSIGNS; SEVERABILITY:
29.1 Each and every obligation contained in this Lease shall be binding
upon the respective parties, their legal representatives, heirs, successors and
assigns. If any provision of this Lease shall be declared invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Lease
shall continue in full force and effect.
30. NO ORAL MODIFICATIONS:
30.1 It is acknowledged that the covenants and obligations contained herein
are the complete and exclusive statement of agreement between the parties,
superseding all proposals or prior agreements, oral or written, and all other
communications between the parties or with any broker relating to the subject
matter of this Lease. No alterations, amendments or changes to this Lease shall
be binding unless first reduced to writing and executed with the same formality
as this Lease.
31. NUMBER, GENDER, CURTISS, TENANT:
31.1 All words herein which refer to Curtiss or Tenant shall be considered
of the number and gender required. The word "Curtiss" shall include its
successors in interest, assigns, grantees and transferees, and the word "Tenant"
shall include all persons liable for any payment hereunder, and all parties
lawfully occupying the subject premises or part thereof by virtue of this
-61-
<PAGE>
Lease.
32. RENEWALS.
32.1 Provided Tenant shall not then be in default beyond applicable periods
of notice and cure of its material obligations hereunder, Tenant shall have the
option to renew this Lease on the same terms and conditions, as specified
herein, except as to the amount of Base Rent, for 2 successive terms of five (5)
years each, provided Tenant shall, on or before nine (9) months prior to the
expiration of the previous term, give Curtiss a written notice of its election
to make such renewal. The Base Rent for each renewal year from August 1, 2006 to
July 31, 2011, shall be $2.30 per square foot per year, and for each renewal
year from August 1, 2011 to July 31, 2016, shall be $2.50 per square foot per
year.
33. ADDITIONAL SPACE:
33.1 In the event that space adjacent to the Premises becomes available
during the initial or renewal lease term Tenant shall have the exclusive right,
subject to the prior right of Rose Art Industries, a tenant of the Facility, to
lease such additional space. Curtiss will thereupon give written notice to
Tenant of its availability. Tenant shall have 60 days thereafter within which to
notify Curtiss in writing of its election to take the space. If Tenant elects to
take the space, it shall be added to this Lease at the same rental rate per
square foot and on the other terms and conditions as the premises then under
lease to Tenant. Curtiss shall deliver such additional space to Tenant following
Curtiss'
-62-
<PAGE>
receipt of Tenant's notice in broom-clean condition, free of all debris,
material and refuse and free of all tenancies and rights of occupancy, and
otherwise in a condition suitable for the conduct of Tenant's business thereat.
Tenant's payment of rents with respect to such additional space shall commence
upon Landlord's delivery of possession thereof to Tenant in the condition
required in this Section 33.1, provided that Curtiss shall give Tenant five (5)
days prior notice thereof together with a temporary certificate of occupancy. If
Tenant elects not to take the space or fails to make a timely election, Curtiss
shall have the absolute right to offer any part or all of said space to others.
If Rose Art Industries elects not to or fails to timely exercise its option with
respect to any space subject thereto, Tenant shall have the exclusive right to
lease such space in accordance with the provisions hereof.
34. SECURITY MEASURES AND FIRE PROTECTION:
34.1 Tenant hereby acknowledges that the rental payable to Curtiss
hereunder does not include the cost of guard service, fire protection, or other
security measures, and that Curtiss shall have no obligation whatsoever to
provide same. Tenant assumes all responsibility for the protection of Tenant,
its agents, invitees and property.
35. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS:
35.1 Tenant agrees at any time and from time to time, upon not less than
ten (10) days' prior written request, that Tenant shall execute, acknowledge and
deliver to Curtiss, or its designee, a
-63-
<PAGE>
statement in writing certifying: that this Lease is unmodified and is in full
force and effect (or if there have been modifications, the specifics thereof and
that the Lease is in full force and effect as modified); the dates to which the
Base Rent and additional rent have been paid; and the amount of all rents paid
in advance, if any. It is intended hereby that any such statement delivered
pursuant to this Article may be relied upon by a prospective purchaser of
Curtiss' interest, or a mortgagee of Curtiss' interest, or any assignee of any
mortgage upon Curtiss' interest, in the Premises. If Curtiss desires to finance,
refinance or sell the Building in which the Premises are located, Tenant hereby
agrees to deliver to any lender or purchaser designated by Curtiss such
statements of Tenant (excluding financial statements) as may reasonably be
required by such lender or purchaser. All such statements shall be received by
Curtiss and such lender or purchaser in confidence and shall be used only in
connection with such purchase or loan. The foregoing obligation shall be deemed
a substantial obligation of the tenancy, the breach of which shall give Curtiss
those remedies herein provided for in event of default.
36. AUTHORITY:
36.1 If Tenant is a corporation, trust or general or limited partnership,
Tenant represents and warrants that the individual executing and delivering this
Lease on behalf of said entity is duly authorized to execute and deliver this
Lease on behalf of said entity, and that such execution and delivery of this
Lease by Tenant does not and shall not violate any provision of any
-64-
<PAGE>
agreement, by-law, charter, order, judgment, government regulation, law or other
obligation to which Tenant is a party or is subject. If Tenant is a corporation,
trust or partnership, Tenant shall, upon execution of this Lease, deliver to
Curtiss evidence of such authority and compliance reasonably satisfactory to
Curtiss.
37. CAPTIONS:
37.1 The captions herein are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope of this Lease
nor the intent of any provision hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Lease the
day and year first above written and caused their corporate seals to be affixed
hereto.
CURTISS-WRIGHT-FLIGHT SYSTEMS/
SHELBY, INC
By: /s/ David Lady
---------------------------
An Authorized Representative
Attest:
/s/ [ILLEGIBLE]
-----------------------------------
AMERICAN TISSUE CORPORATION
By: /s/ Nourollah Elghanayan
----------------------------
An Authorized Representative
Attest:
/s/ [ILLEGIBLE]
-----------------------------------
-65-
<PAGE>
RIDER TO LEASE, DATED AS OF DECEMBER 15, 1995, BETWEEN
CURTISS WRIGHT FLIGHT SYSTEMS/SHELBY, INC., AS
LANDLORD, AND AMERICAN TISSUE CORPORATION, AS TENANT
----------------------------------------------------
1. If any of the provisions of this rider conflict or are otherwise inconsistent
with any of the provisions of the Lease, the provisions of this rider shall
control and be binding. All capitalized terms not otherwise defined herein shall
have the same meanings as set forth elsewhere in this Lease.
2. As a material inducement to Tenant's execution, delivery and performance of
this Lease, Landlord hereby represents, warrants and, where applicable,
covenants to Tenant, as follows:
(i) Landlord is the fee owner of the Premises and has full power and
authority to execute, deliver and perform this Lease; this Lease has been
duly authorized, executed and delivered by Landlord and constitutes the
legal, valid and binding agreement of Landlord, enforceable against
Landlord in accordance with its terms;
(ii) No consent, approval or authorization of, or registration,
qualification or filing with, any governmental agency or authority or any
third-party is required for the execution, delivery and performance of this
Lease by Landlord;
(iii) The execution, delivery and performance of this Lease is not a
violation of the terms of any underlying leases or underlying mortgages;
Landlord shall give Tenant not less than thirty (30) days' prior written
notice of any underlying leases and underlying mortgages;
(iv) The Premises and all installations, facilities and systems
relating thereto shall be delivered to Tenant vacant and in broom clean
condition, free of all tenancies and other rights of occupancy, fully
operational and in good working order and condition;
(v) Except with respect to an order issued by the New Jersey
Department of Environmental Protection under its ISRA regulations with
respect to soil and ground water contamination at the Premises which
Landlord is currently complying with, Landlord has not received any notice
of any claim, suit or other action or investigation with respect to the
violation of any laws, orders, rules, regulations or requirements of any
federal, state or local governmental agency, including, without limitation,
environmental and occupational hygiene laws, rules and regulations due to
the presence of hazardous materials in or about the Premises or otherwise.
Except as set forth in the preceding sentence, Landlord knows of no facts
or circumstances that may give
<PAGE>
rise to any future civil, criminal or administrative proceeding relating to
environmental or occupational hygiene matters or any other matter affecting
the Premises;
(vi) Notwithstanding anything to the contrary contained elsewhere in
this Lease, except with respect to Dane Paper Board Company and four other
tenants currently at the Facility, during the term of this Lease, Tenant
shall be treated no less favorably than any other tenant at the Facility
benefitted by the common areas with respect to any and all of Tenant's
rights and liabilities set forth in Section 7.6 of Article 7 of the Lease;
and
(vii) The aggregate of the proportionate shares for all tenants at the
Facility shall never equal a number greater than 100 and Curtiss shall not
receive more than 100% of its costs, plus any applicable surcharge, in
respect of computations pursuant to Section 7.6 of Article 7 or Articles 9
or 18 hereof.
The provisions of this paragraph shall survive the expiration or earlier
termination of this Lease.
3. The Landlord represents and warrants that neither it nor any of its officers,
employees or agents has acted so as to render Tenant liable for any brokerage
commissions in connection with this transaction. Landlord agrees to indemnify,
defend and hold Tenant, its officers, shareholders, directors, employees and
agents harmless from and against any Claims or demands for a brokerage, finder
or other commission or demands for a brokerage, finder or other commission or
fee arising out of Landlord's actions, including, without limitation, any
conversations or negotiations had by Landlord with any broker or finder. The
Tenant represents and warrants that neither it nor any of its officers,
employees or agents has dealt with any broker or finder in connection with this
transaction other than the broker set forth in Article 23 of this Lease. Tenant
agrees to indemnify, defend and hold Landlord, its officers, shareholders,
directors, employees and agents harmless from and against any Claims or demands
for a brokerage, finder or other commission or demands for a brokerage, finder
or other commission or fee arising out of a breach by Tenant of its
representation hereunder, including, without limitation, any conversations or
negotiations had by Tenant with any other broker or finder.
4. At any time and from time to time upon not less than fifteen (15) days' prior
notice by Tenant, Landlord shall execute, acknowledge and deliver to Tenant a
statement of Landlord (or if Landlord is a corporation, an appropriate officer
of Landlord) certifying (i) that this Lease is unmodified and in full force
2
<PAGE>
and effect (or it there have been modifications, that the same is in full force
and effect as modified and stating the modifications), (ii) the dates to which
the rent and additional rent have been paid in advance, if any, (iii) whether or
not Tenant is in default in the keeping, observance or performance of any
covenant, agreement, term, provision or condition contained in this Lease and,
if so, specifying each default of which the signer may have knowledge, and (iv)
as to any other matter reasonably requested by Tenant, it being intended that
the statement may be relied upon by Tenant and third-parties.
5. Without limiting or waiving any other rights Tenant may have, all rents shall
appropriately abate during any period during which the Premises or any portion
thereof cannot be used for the purposes contemplated by this Lease by reason of
(i) any act or negligence on the part of Landlord or Landlord's agents,
employees, contractors or representatives, or (ii) Landlord's failure to timely
fulfill its obligations under Section 7.3 of the Lease.
6. If Landlord shall default in the observance or performance of any term or
covenant on Landlord's part to be observed or performed hereunder, in addition
to Tenant's other rights and remedies hereunder, at law and in equity, Tenant
may, upon ten (10) days' prior written notice, perform the same for the account
of Landlord. If Tenant makes any expenditures or incurs any obligation for the
payment of money in connection therewith, including, without limitation,
attorneys' fees, or makes any expenditures or incurs any obligation in
instituting, prosecuting or defending any action or proceeding hereunder, such
sums or obligations incurred, with interest at the statutory rate, shall be
deemed due from Landlord to Tenant and shall be paid by Landlord to Tenant upon
demand. Tenant shall, however, not be entitled to cause repairs to be made to
the roof unless performed in accordance with the applicable roof warranties.
Tenant accepts all resulting liability for its failure to do so.
7. Landlord shall indemnify and hold Tenant harmless from and against any and
all Claims arising out of: (i) any negligent act or omission on the part of
Landlord or any of its employees, contractors, agents or representatives; and
(ii) any failure on the part of Landlord to perform or comply with any of the
covenants, agreements, terms, provisions, conditions or limitations contained in
this Lease on its part to be performed. Tenant shall indemnify and hold Landlord
harmless from and against any and all Claims arising out of: (i) any negligent
act or omission on the part of Tenant or any of its employees, contractors,
agents or representatives; and (ii) any failure on the part of Tenant to perform
or comply with any of the covenants, agreements, terms, provisions, conditions
or
3
<PAGE>
limitations contained in this Lease on its part to be performed. The provisions
of this paragraph 7 shall survive the expiration or earlier termination or this
Lease.
8. Wherever in this Lease, Landlord's consent or approval is required, Landlord
covenants not to unreasonably withhold, delay or condition such consent or
approval. In addition, Landlord covenants to act reasonably with respect to all
action requiring Landlord's approval, consent, discretion or judgment.
Landlord's failure to grant or withhold its consent within ten (10) days of
receipt of Tenant's written request therefor shall constitute Landlord's consent
and approval.
9. Within 10 days of a request by Tenant, Curtiss shall deliver to Tenant a
landlord's waiver in the form required by any equipment lessor and purchase
money lender of Tenant for the lease or purchase of items of equipment.
10. All sums payable by Tenant pursuant to Articles 3, 7.6, 9 and 18 of this
Lease shall be appropriately prorated for any partial payment period falling
within the term of this Lease.
11. (a) Tenant shall cause to be included in each of its insurance policies
insuring Tenant's property and business interest in the Premises against loss,
damage or destruction by fire or other casualty (i) a waiver of the insurer's
right of subrogation against Curtiss, and (ii) an express agreement that such
policy shall not be invalidated if the assured waives the right of recovery
against any party responsible for a casualty covered by the policy before the
casualty. If such waiver or permission shall not be, or shall cease to be,
obtainable without additional charge or at all, Tenant shall so notify Curtiss
promptly after learning thereof. In such case, if Curtiss shall so elect and
shall pay the insurer's additional charge therefor, such waiver shall be
included in the policy. Each such policy shall name Curtiss as an additional
assured and shall contain, if obtainable, agreements by the insurer that the
policy will not be cancelled without at least thirty days' prior notice to both
assureds and that the act or omission of Tenant will not invalidate the policy
as to Curtiss. Tenant hereby releases Curtiss with respect to any claim
(including a claim for negligence and water damage) which Tenant might otherwise
have against Curtiss for loss, damage or destruction with respect and to the
extent to which Tenant is required to be insured under a policy or policies
containing a waiver of subrogation or naming Curtiss as an additional assured,
as provided in this Article, whether or not the loss, damage or destruction is
due to the carelessness or negligence of Curtiss, its servants, agents or
employees. If a covered loss shall occur under such policy or policies and by
reason of the insurer's waiver of its right of
4
<PAGE>
subrogation against Curtiss the premium payable for such policy or policies
shall increase, then Tenant shall so notify Curtiss promptly after learning
thereof. In such case, if Curtiss shall so elect and shall pay the additional
premium therefor, such waiver of subrogation shall continue to be included in
the policy or policies.
(b) Curtiss shall cause to be included in each of its insurance policies
insuring the Premises and the Building against loss, damage or destruction by
fire or other casualty (i) a waiver of the insurer's right of subrogation
against Tenant, and (ii) an express agreement that such policy shall not be
invalidated if the assured waives the right of recovery against any party
responsible for a casualty covered by the policy before the casualty. If such
waiver or permission shall not be, or shall cease to be, obtainable without
additional charge or at all, Curtiss shall so notify Tenant promptly after
learning thereof. In such case, if Tenant shall so elect and shall pay the
insurer's additional charge therefor, such waiver shall be included in the
policy. Each such policy shall name Tenant as an additional assured and shall
contain agreements by the insurer that the policy will not be cancelled without
at least thirty days' prior notice to both assureds by certified mail, return
receipt requested, and that the act or omission of Curtiss will not invalidate
the policy as to Tenant. Curtiss hereby releases Tenant with respect to any
claim (including a claim for negligence) which Curtiss might otherwise have
against Tenant for loss, damage or destruction with respect and to the extent to
which Curtiss is required to be insured under a policy or policies containing a
waiver of subrogation or naming Tenant as an additional assured as provided in
this Article, whether or not the loss, damage or destruction is due to the
carelessness or negligence of Tenant, its servants, agents or employees. If a
covered loss shall occur under such policy or policies and by reason of the
insurer's waiver of its right of subrogation against Tenant the premiums payable
for such policy or policies shall increase, then Curtiss shall so notify Tenant
promptly after learning thereof. In such case, if Tenant shall so elect and
shall pay the additional premium therefor, such waiver of subrogation shall
continue to be included in the policy or policies.
5
<PAGE>
12. A default by Tenant beyond applicable notice and cure periods under that
certain loan agreement between the parties dated even date herewith shall be a
default by Tenant under this Lease.
13. Any delays incurred by Tenant in the removal of the woodblock flooring or in
the installation of the concrete flooring in any of the building areas other
than as a result of Landlord's acts or omissions shall not extend any of the
dates set forth in the Lease for the payment of rent, utilities, taxes,
insurance, common area charges or of any other obligation or entitle Tenant to
any abatement of rent or to terminate this Lease.
14. Provided that the requirements are no more onerous than those imposed by the
National Fire Protection Association, Inc., Tenant agrees to comply with the
fire prevention requirements of Curtiss' property insurance carrier and with the
Borough of Wood-Ridge and Tenant's failure to do so shall not permit Tenant to
waive or terminate any of its obligations under this Lease.
Landlord:
Curtiss Wright Flight
Systems/Shelby, Inc.
By: /s/ David Lody
----------------------------
Tenant:
American Tissue Corporation
By: /s/ Nourollah Elghanayan
----------------------------
Pres.
6