New Jersey-Bergen-171/173 Main Street Lease - 171-173 Main Street Corp. and Net2Phone Inc.
LEASE AGREEMENT
---------------
THIS LEASE, dated the first (1st) day of March 1, 1999, between 171-173
MAIN STREET CORPORATION having an office at 190 Main Street, Hackensack, New
Jersey 07601, hereinafter referred to as LANDLORD.
AND
NET2PHONE, INC. having an office at 171 Main Street, Hackensack, New Jersey
07601, herein referred to as TENANT.
WITNESSETH that the Landlord hereby leases to the Tenant and the Tenant
hereby rents from the Landlord for the term and upon the rate specified, the
leased premises described as follows, 171-173 Main Street, situated in the City
of Hackensack, County of Bergen and State of New Jersey, and known and
designated as 9,845 rentable square feet of the entire premises.
1. This lease shall commence on March 1, 1999 and end on February 28, 2002.
2. Tenant agrees to pay to the Landlord as a base rent for and during the term
hereof, a monthly rate of $9,912.00. The Tenant shall pay when due all the
rents or charges for water, utilities, taxes, inspection fees, public area
insurance, contracts & services, which are or may be assessed or imposed
upon the leased premises and common areas and which may be charged to the
Landlord by the suppliers thereof during the term hereof. If not paid, such
rents or charges shall be added to and become payable as additional rent
with installment of rent next due or within 30 days of demand therefor,
whichever occurs sooner. The Tenant shall be responsible for general
maintenance of the leases premises, including general garbage removal.
3. The base rent payable by Tenant has been calculated on the basis of the
portion of the leases premises to be occupied by Tenant during each
applicable period during the term of the lease. In the event that Tenant
takes occupancy of any additional portion of the leased premises, the Tenant
shall be responsible to pay the Landlord an increased monthly rent directly
proportional to the additional space rented.
4. Payment of rent is due on the first day of each month. Payable to 171-173
Main Street Corporation and mailed to: Attention: Marc Knoller, 190 Main
Street, Hackensack, New Jersey 07601 or as may be otherwise directed by the
Landlord in writing. Tenant shall pay a late charge of 5% of the monthly
rent for each payment received by the Landlord after the 5th day of each
month. Tenant shall pay a late charge of 10% of the monthly rent for each
rent payment that is received by the landlord after the 10th of each month.
The late charge shall be due with the current late rent payment.
5. The Landlord covenants and agrees that the Tenant, on paying the said rental
and performing covenants and conditions in this lease contained, shall and
may peaceably and quietly have, hold and enjoy the demised premises for the
term aforesaid.
<PAGE>
6. The tenant covenants and agrees to use the demised premises for any purpose
as permissible under local zoning ordinances. Sublease of any portion of the
demised premises is only permissible with written consent of the Landlord.
7. The Tenant will comply with all the laws, statutes, ordinances, orders,
regulations, rules and requirements of every kind and nature relating to the
premises, or hereafter in effect, of the federal, state, county, municipal,
or other governmental authorities whether they be usual or usual ordinary or
extraordinary. The Tenant agrees at his cost and expense to comply with all
said requirements that pertain to the Tenant and/or his use of the said
demised premises. The Landlord will be held harmless from all expenses
and/or damages by reason of any notices, orders, violations, or penalties
filed against or imposed upon the premises or against the Landlord because
of the Tenant's non-compliance with said requirements.
8. The Tenant from and after the date of the commencement of the term of this
lease will hold the Landlord harmless against any and all claims, suits,
damages, or causes of action for damages arising after the commencement of
the term of this lease, and against any orders or decrees of judgments which
may be entered therein, brought for damages or alleged damages resulting
from any injury to person and/or property or loss of life sustained in the
demised premises, during the term hereof.
9. The Tenant shall during the demised term maintain a general liability policy
insuring the Tenant and naming the Landlord as additional insured in an
amount to be agreed upon by the parts but in no event less than
$500,000/$1,000,000. Tenant shall cause the Landlord to be provided with
certificates of insurance showing the issuance of the insurance policies
provided for in this and shall further provide the Landlord with proof of
payment of the premiums in connection with said property.
10. All erections, alterations, additions and improvements, whether temporary or
permanent in character, which may be made upon the premises either by the
Landlord or the Tenant, except furniture or movable trade fixtures installed
at the expense of the Tenant shall be the property of the Landlord and shall
remain upon and be surrendered with the premises as a part hereof at the
termination of this lease without compensation to the Tenant. The Tenant
further agrees to keep said premises and all parts thereof in a clean and
sanitary condition and free from trash, inflammable material and other
objectionable material.
11. The Tenant shall not make any alterations, additions, or improvements to
said premises without the prior written consent of the Landlord. The Tenant
shall at its own expense modify the leased premises. All Tenant work shall
be in accordance with accepted professional and government regulatory
standards'. All work shall have been reviewed and approved by the Landlord,
whose approval shall not be unreasonably withheld or delayed. The Tenant has
applied for and received the required Hacksensack Township permits. The
Tenants shall take good care of the premises and shall at the Tenant's own
cost and expense, make all repairs and shall maintain the premises in good
condition and state of repair, and at the end or other expiration of the
term hereof, shall deliver up the rented premises in good order and
condition, wear and tear from reasonable use thereof
2
<PAGE>
accepted. Tenant shall neither encumber nor obstruct the sidewalks,
driveway yards, entrances, hallways and stairs.
12. In the event that any mechanics' lien is filed against the premises as a
result of alterations, additions, or improvements made by the Tenant, the
Landlord at its option, after 90 days notice to the Tenant, may terminate
this lease and may pay the said lien without inquiring into the validity
thereof, and the Tenant shall forthwith reimburse the Landlord the total
expense incurred by the Landlord in discharging the said lien as additional
rent hereunder.
13. If the Tenant does not exercise the option to renew as per the conditions in
Paragraph 19 of this Lease, then one (1) month prior to the expiration of
the demised term, the Landlord or its agent shall have the right to place a
suitable "For Lease" sign on the premises. Also, during this time the
Landlord or its agent with reasonable notice shall have the right to examine
the premises and/or exhibit the suite to perspective tenants. In the event
Landlord enters into a contract of sale of the leased premises, Landlord,
may in its sole discretion, terminate this Lease Agreement, whereby Landlord
agrees to provide Tenant with ninety (90) written notice prior to such
termination.
14. The Tenant agrees that in case of a fire or other casualty resulting in
damage to the premises it will give immediate notice thereof to the
Landlord, who shall thereupon, with expedition and in good and workmanlike
manner, after said damage, enter upon and undertake said repair and
rehabilitation, as is necessary to restore said premises to its original
condition before such damage, provided that such damage, with reasonable
dispatch, can be repaired within ninety (90) days from the fire or casualty.
The Landlord will make every effort to place the Tenant into available space
within the building during the repairs not to exceed the 90 day period. In
the event that the said demised premises shall at any time during the
demised term be totally destroyed by fire or other casualty, or should be
rendered party untenable, and the repair and rehabilitation of said demised
premises shall be of an extent requiring more than (90) days from the fire
or casualty for this completion, then this lease, at the option of either
the Landlord or Tenant may be terminated and the obligation to make rental
payments thereupon shall cease as of the date of such damage or destruction.
Tenant shall not be obligated to make rental payments in the event that
Landlord is unable to place the Tenant into available space in close
proximity to the Building.
15. It is further agreed that if the rent herein provided for as well as
additional sums deemed rent and to be paid by the Tenant shall at any time
be in arrears and unpaid for more than ten (10) days after the demand,
Landlord, at his option may void this lease and enter into possession of the
demised premises and sue for and recover all rent due as herein provided for
the entire lease term. Tenant in any such proceedings hereby waives the
right of trial by jury. In the event Landlord shall enter into possession of
the demised premises after default as above provided, Landlord may rent the
premises for the unexpired term on behalf of the Tenant reserving the right
to rent the premises for a longer period of time than fixed in the original
lease without releasing the original Tenant form any liability, applying any
monies collected first to the expense of resuming or obtaining possession,
second to restoring premises to a rentable condition and then to the
3
<PAGE>
payment of the rent and all other charges due and to grow due to the
Landlord, any surplus to be paid to the Tenant who shall remain liable for
any deficiency, as measured by the term of this lease.
16. This lease is subject and is hereby subordinated to all present and future
mortgages, deeds of trust and other encumbrances affecting the demised
premises or the property of which said premises are a part. The tenant
agrees to execute, at no expense to the Landlord, any instrument which may
be deemed necessary or desirable by the Landlord to further affect the
subordination of this lease to any such mortgage, deed or trust or
encumbrance. Tenant may not in any manner or form encumber this lease and
the leasehold hereby created. Regardless of the terms of this Paragraph,
Landlord will seek to obtain from any mortgage the right to quiet enjoyment
of the Tenant as long as the Tenant attorns to said mortgagee.
17. If the property or any substantial part hereof wherein the demised premises
are located shall be taken by public or quasi-public authority under any
power or eminent domain or commendation, this lease at the option of the
landlord shall forthwith terminate and the Tenant shall have no claim or
interest in or to any award or damages from the Landlord for such taking.
The Tenant is not precluded from the maintaining its own action against the
condemning authority if said Tenant's rights are legislatively protected.
18. The Tenant has this day deposited with the Landlord the sum of $9,912.00
(Nine thousand nine hundred and twelve dollars) as security for the full and
faithful performance by the Tenant of all the terms, covenants and
conditions of this lease upon the Tenant's part to be performed, which said
sum shall be returned to the Tenant after the time fixed as the expiration
of the term herein or any renewal option thereof, provided the Tenant has
fully and faithfully carried out all of said terms, covenants and conditions
on Tenant's part to be performed. In the event of a bona fide sale, subject
to this lease, the Landlord shall have the right to transfer the security to
the purchaser for the benefit of the Tenant and the Landlord shall be
considered released by the Tenant from all liability for the return of the
said security; and the Tenant agrees to look to the new Landlord solely for
the return of the said security, and it is agreed that this shall apply to
every transfer or assignment made of the security of a new Landlord.
19. Provided that the tenant is not in default under this lease, Tenant shall
have the option to renew this lease for an additional three year term by
notifying the Landlord in writing, by certified or overnight mail, notice of
its election to do so at least one (1) month prior to the date of the
expiration of the then current term. The new rent to be payable during the
renewal term shall be the current annual rental amount plus the Consumer
Price Index (CPI) which shall begin to accrue as of the _______ of this
lease. All other terms and conditions of the original lease shall remain in
effect in full force and effect.
20. The Tenant accepts the premises in "AS IS" condition.
21. No sign, advertisement or notice shall be affixed to or placed upon any part
of the demised premises by the Tenant, except in such manner and of such
size, design and color as shall be approved in advance in writing by the
Landlord, such approval not to be unreasonably withheld.
4
<PAGE>
22. The rules and regulations regarding the demised premises which are part of
this lease, shall be observed by the Tenant and by the Tenant's employees,
agents and customers.
23. Landlord represents and warrants that Landlord and his agents know of
nothing concerning the Premises which are subject matter of this leasehold
agreement that would prohibit use of the premises by the Tenant for the uses
and purposes intended and further that all of the mechanical equipment and
structure in question, at time of the delivery of the premises to the
Tenant, is sound and in good working order. Moreover, the electrical lines
and plumbing likes contained within the building are in proper working order
as of the time of the initial occupancy herein specified.
24. All of the terms, covenants and conditions of this lease shall insure to the
benefit of and be binding upon the respective heirs, executors,
administrators, successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the said parties have hereunto set their hands and seals the
days and year first above written.
WITNESS: 171-173 MAIN STREET CORPORATION
Landlord
By /s/ Howard Jonas
--------------------------------------
Howard Jonas, President
ATTEST: NET2PHONE INC.
Tenant
By /s/ Howard Balter
--------------------------------------
Howard Balter, Chief Executive Officer
5