-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rrn7RQCrcp4FOUWp/gDZ+fEg2a61YKeiZhdlevTsxJF/DcrtutqKQz+rP0gFZEy3 pfLzbp7vouh7LIxxS7kJ0g== 0000893220-03-002029.txt : 20031209 0000893220-03-002029.hdr.sgml : 20031209 20031209143612 ACCESSION NUMBER: 0000893220-03-002029 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031125 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SL INDUSTRIES INC CENTRAL INDEX KEY: 0000089270 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 210682685 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04987 FILM NUMBER: 031044629 BUSINESS ADDRESS: STREET 1: 520 FELLOWSHIP ROAD STREET 2: SUITE A114 CITY: MT LAUREL STATE: NJ ZIP: 08054 BUSINESS PHONE: 8567271500 MAIL ADDRESS: STREET 1: 520 FELLOWSHIP ROAD STREET 2: SUITE A114 CITY: MT LAUREL STATE: NJ ZIP: 08054 FORMER COMPANY: FORMER CONFORMED NAME: SGL INDUSTRIES INC DATE OF NAME CHANGE: 19841008 FORMER COMPANY: FORMER CONFORMED NAME: GL INDUSTRIES INC DATE OF NAME CHANGE: 19710111 FORMER COMPANY: FORMER CONFORMED NAME: GL ELECTRONICS CO INC DATE OF NAME CHANGE: 19670928 8-K/A 1 w92311e8vkza.txt FORM 8-K/A FOR SL INDUSTRIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) November 24, 2003 -------------------------------- SL INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New Jersey 1-4987 21-0682685 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 520 Fellowship Road, Suite A114, Mount Laurel, New Jersey 08054 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (856) 727-1500 ------------------------------ - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) INTRODUCTORY NOTE: The purpose of this Form 8-K/A is to amend SL Industries, Inc.'s (the "Registrant") current Report on Form 8-K filed with the Securities and Exchange Commission on November 26, 2003 to provide the required Unaudited Pro Forma Financial Statements reflecting the sale of the operating assets of SL Surface Technologies, Inc. ("SurfTech"), a wholly owned subsidiary of the Registrant and to reflect the use of the proceeds to pay debt. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On November 24, 2003, SurfTech, a wholly owned subsidiary of the Registrant, sold the operating assets of its business to Everlast Coatings Inc. (the "Purchaser") pursuant to an Asset Purchase Agreement (the "Purchase Agreement"). Description of Assets SurfTech sold the operating assets of its business, which was engaged in coatings and platings. The Registrant retained (a) the land and building and (b) specific liabilities as detailed in the Purchase Agreement. Consideration Pursuant to the terms of the sale, the consideration paid by the Purchaser was $600,000 in cash plus the assumption of certain liabilities. The consideration was determined by arms-length negotiation. Cash proceeds were used to pay debt. Relationship with Purchaser John R. Willey, the President of the Purchaser, was a former executive of SurfTech. In connection with the sale, the Registrant entered into a ten (10) year lease with the Purchaser for the lease of the land and building retained by the Registrant. Other than as described herein, the Registrant, on the one hand, and the Purchaser and its affiliates, on the other hand, have no common officers, directors or control persons. For additional information, reference is made to the press release, which is attached to the Registrant's Current Report on Form 8-K dated November 26, 2003. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. Not Applicable. (b) Pro Forma Financial Information. Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2002. Unaudited Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2003. Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2003. (c) Exhibits. 2.1 Asset Purchase Agreement 2.2 Lease Agreement Item 7 (b) Basis of Presentation The following Unaudited Pro Forma Consolidated Financial Statements reflect the sale of the operating assets of SurfTech, a wholly owned subsidiary of the Registrant after giving effect to the pro forma adjustments described in the accompanying notes. These Unaudited Pro Forma Consolidated Financial Statements have been prepared from, and should be read in conjunction with, the historical consolidated financial statements and notes thereto of SL Industries Inc. which are included in SL Industries, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002 and the Quarterly Report on Form 10-Q for the period ended September 30, 2003. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of operating results or financial position that would have occurred had the sale been consummated at the dates indicated, nor is it necessarily indicative of future operating results or financial position of SL Industries. The Unaudited Pro Forma Consolidated Statements of Operations give effect to the sale as if it had occurred at the beginning of the periods presented. The Unaudited Pro Forma Consolidated Balance Sheet gives effect to the sale of the operating assets of SurfTech as if it had occurred on September 30, 2003 and the use of proceeds to pay current maturities of debt. 3 SL Industries, Inc. Pro Forma Consolidated Statement Of Operations For The Year Ended December 31, 2002 (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1) Industries, Inc. SurfTech Adjustments Pro Forma ---------------- -------- ----------- --------- (Historical) (Historical) Net sales $ 110,149 $ 2,237 $ -- $ 107,912 --------- --------- --------- --------- Cost of sales 71,199 1,828 18 (2) 69,389 Engineering & product development 7,579 0 0 7,579 Selling, general and administrative 25,194 984 (18)(3) 24,192 Depreciation and amortization 2,948 314 83 (4) 2,717 Restructuring costs 265 35 0 230 Impairment of intangibles 703 703 0 0 Special charges 1,834 0 0 1,834 --------- --------- --------- --------- Total cost and expenses 109,722 3,864 83 105,941 Income (loss) from operations 427 (1,627) (83) 1,971 Other income (expense): Interest income 25 0 25 Interest expense (2,454) (198) (159)(5) (2,415) --------- --------- --------- --------- Loss from continuing operations before income taxes (2,002) (1,825) (242) (419) Income tax (benefit) (755) (474) (82)(6) (363) --------- --------- --------- --------- Loss from continuing operations $ (1,247) $ (1,351) $ (160) $ (56) Basic net income (loss) per common share $ (0.21) $ (0.01) Diluted net income (loss) per common share $ (0.21) $ (0.01) Weighted shares outstanding - basic 5,867 5,867 Weighted shares outstanding - diluted 5,867 5,867
The accompanying notes are an integral part of the Pro Forma Financial Statements. 4 SL Industries, Inc. Pro Forma Consolidated Statement Of Operations For The Nine Months Ended September 30, 2003 (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1) Industries, Inc. SurfTech Adjustments Pro Forma ---------------- -------- ----------- --------- (Historical) (Historical) Net sales $ 80,394 $ 1,514 $ -- $ 78,880 -------- -------- -------- -------- Cost of sales 51,250 1,293 14 (2) 49,971 Engineering & product development 5,788 0 0 5,788 Selling, general and administrative 18,636 569 (14)(3) 18,053 Depreciation and amortization 1,891 180 64 (4) 1,775 Asset impairment charges 703 703 0 0 -------- -------- -------- -------- Total cost and expenses 78,268 2,745 64 75,587 Income (loss) from operations 2,126 (1,231) (64) 3,293 Other income (expense): Interest income 130 0 0 130 Interest expense (440) (83) (49)(5) (406) -------- -------- -------- -------- Income (loss) from continuing operations before income taxes 1,816 (1,314) (113) 3,017 Income tax provision (benefit) 776 (405) (38)(6) 1,143 -------- -------- -------- -------- Income (loss) from continuing operations $ 1,040 $ (909) $ (75) $ 1,874 Basic net income (loss) per common share $ 0.18 $ 0.32 Diluted net income (loss) per common share $ 0.18 $ 0.32 Weighted shares outstanding - basic 5,908 5,908 Weighted shares outstanding - diluted 5,931 5,931
The accompanying notes are an integral part of the Pro Forma Financial Statements. 5 SL Industries, Inc. Pro Forma Consolidated Balance Sheet September 30, 2003 (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SL (1) Industries, Inc. SurfTech Adjustments Pro Forma ---------------- -------- ----------- --------- ASSETS (Historical) Current assets: Cash and equivalents $ 648 $ -- $ -- $ 648 Receivables, net 15,762 389 12 (7) 15,385 Note receivable 1,000 0 0 1,000 Inventories, net 11,290 78 0 11,212 Prepaid expenses 917 3 0 914 Deferred income taxes, net 4,381 0 0 4,381 -------- -------- -------- -------- Total current assets 33,998 470 12 33,540 Property, plant & equipment, net 9,849 213 (82)(8) 9,554 Deferred income taxes, net 3,423 0 0 3,423 Goodwill, net 10,303 0 0 10,303 Other intangible assets, net 1,009 0 0 1,009 Other assets and deferred charges 1,694 0 0 1,694 -------- -------- -------- -------- Total assets $ 60,276 $ 683 $ (70) $ 59,523 ======== ======== ======== ======== LIABILITIES Current liabilities: Debt, current portion $ 1,310 $ -- $ (618)(9) $ 692 Accounts payable 3,255 43 0 3,212 Accrued income taxes 2,459 0 (268)(10) 2,191 Accrued payroll and related costs 4,196 30 650 (11) 4,816 Other accrued liabilities 6,667 10 85 (12) 6,742 -------- -------- -------- -------- Total current liabilities 17,887 83 (151) 17,653 -------- -------- -------- -------- Debt, less current portion 2,507 0 0 2,507 Deferred compensation and supplemental retirement benefits 3,996 0 0 3,996 Other liabilities 883 0 0 883 -------- -------- -------- -------- Total liabilities $ 25,273 $ 83 $ (151) $ 25,039 -------- -------- -------- -------- SHAREHOLDERS' EQUITY Common stock, $.20 par value; authorized, 25,0000,000 shares; issued 8,298,000 shares $ 1,660 $ -- $ 0 $ 1,660 Capital in excess of par value 38,822 0 0 38,822 Retained earnings 9,467 0 (519)(13) 8,948 Treasury stock at cost, 2,359,000 (14,946) 0 0 (14,946) -------- -------- -------- -------- Total shareholders' equity $ 35,003 $ -- $ (519) $ 34,484 -------- -------- -------- -------- Total liabilities and shareholders' equity $ 60,276 $ 83 $ (670) $ 59,523 ======== ======== ======== ========
The accompanying notes are an integral part of the Pro Forma Financial Statements. 6 SL INDUSTRIES, INC. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS 1. Eliminates the results of operations of SurfTech for the period as if the sale had been completed as of the beginning of the operating periods presented. Also, eliminates the operating assets and liabilities of SurfTech as if the sale had been completed as of September 30, 2003. 2. Reflects the net operating lease commitment related to equipment, which was not sold. 3. Reflects rental income to be received related to the building, which is occupied by the purchaser as part of the lease agreement. 4. Depreciation expense for the periods presented for the building, which was retained by SL Industries. 5. Reflects the add back of inter-company interest expense net of a reduction of interest expense attributable to the application of the proceeds from the sale of the SurfTech's operations to reduce debt. 6. Reflects the income tax effect of the pro forma adjustments at the U.S. federal statutory rate of 34%. 7. Represents the portion of the sale proceeds paid into escrow at closing. 8. Reflects the sale of equipment directly related to the sale of SurfTech's operating assets. 9. Reflects the application of the proceeds from the sale of SurfTech's operating assets and other equipment sold to a third party, the proceeds of which were used to reduce debt. 10. Reflects the tax benefit related to the loss on the sale of SurfTech's operating assets. 11. Reflects the estimated liability related to certain exit costs. 12. Estimated closing and lease termination costs. 13. Net loss on the sale net of tax. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SL INDUSTRIES, INC. Date: December 9, 2003 By: /s/ David R. Nuzzo ------------------ David R. Nuzzo Vice President Finance and Administration 8 EXHIBIT INDEX
Exhibit No. Description ----------- ----------- 2.1 Asset Purchase Agreement 2.2 Lease Agreement
9 EX-2.1 3 w92311exv2w1.txt ASSET PURCHASE AGREEMENT EXHIBIT 2.1 ASSET PURCHASE AGREEMENT THIS AGREEMENT ("Agreement") is made as of the 21st day of November, 2003, by and among EVERLAST COATINGS INC. ("Buyer"), a Delaware corporation, SL INDUSTRIES, INC., a New Jersey corporation ("Parent") and SL SURFACE TECHNOLOGIES, INC., a New Jersey corporation ("Seller"), a wholly owned subsidiary of Parent. RECITALS Seller is engaged primarily in the business of developing and manufacturing surface coatings and applying the surface coatings to machinery and equipment used in the paper and telecom industries (the "Business"). Seller wishes to sell, transfer, convey and deliver and Buyer wishes to purchase specified assets of Seller relating to the Business, upon the terms and conditions hereinafter set forth. Seller wishes to assign to Buyer, and Buyer wishes to discharge certain specified liabilities of Seller identified in this Agreement. Parent is owner, indirectly through a wholly-owned subsidiary, of all of the issued and outstanding capital stock of Seller and will benefit from the transactions herein, and Seller desires the above transaction to take place on the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual and dependent promises hereinafter set forth, the parties, intending to be legally bound, do hereby agree as follows: ARTICLE I. Purchase and Sale of Assets 1.1. Purchase and Sale of Assets. (a) Purchased Assets. On and subject to the terms set forth in this Agreement, at the Closing (as defined in Section 1.4 of this Agreement) Buyer shall purchase from Seller and Seller shall sell, convey, assign, transfer and deliver to Buyer, all right, title and interest in and to the assets and property of Seller as set forth below, free and clear of all mortgages, liens, pledges, charges, security interests, claims, restrictions and other encumbrances of any kind whatsoever (except as expressly provided in Section 2.6 hereof), which assets and property will include, but not be limited to, the following (the "Purchased Assets"): (i) Technology and Know-How. All products, plans, documentation, designs, drawings, specifications, procedures, concepts, worksheets, software, software specifications, trade secrets, product information, customer lists and information, marketing and sales information, engineering notebooks, schematics, parts lists, test programs, test fixtures, approvals, certifications, derived works and related know-how owned or controlled by Seller and/or used in or related to the Business, in all formats including printed materials and machine readable formats for domestic and international activities, and all rights of Seller to protect the technology and know-how referred to above from unauthorized disclosure and/or use,; (ii) Inventory. All inventory, customer orders and work-in-process of Seller, including, but not limited to, the items listed on Schedule 1.1(a)(ii); (iii) Name, Patents, etc. Any registered and unregistered trademarks, trade names, service marks, patents, patent applications, copyrights, domain names and other intangible property, and all rights to prevent, and assert claims for, infringement thereof, currently owned or controlled by Seller or owned and used in, or related to, the Business, including but not limited to the items set forth on Schedule 1.1(a)(iii); (iv) Property and Equipment. All of Seller's personal property and equipment listed on Schedule 1.1(a)(iv); (v) Permits and Licenses. To the extent legally transferable as of the Closing Date, all governmental licenses, permits and other like authorizations possessed by Seller and necessary to the operation of the Business as currently conducted, including, but not limited to, those set forth on Schedule 1.1(a)(v); (vi) Customer Information. All customer files and all lists of customers, suppliers, distributors and vendors; (vii) Documentation. Except to the extent excluded in accordance with Section 1.1(b), all documents and records relating to the Purchased Assets, or the operations or products of the Business; provided, however, that if the delivery by Seller of documents or records related to its employees requires by law the written consent of such employees, then such document or records shall be delivered only with such prior written consent; and (viii) Accounts Receivable. All accounts receivable of Seller. (b) Excluded Assets. The assets set forth below shall be retained by Seller and are excluded from the definition of Purchased Assets (collectively, the "Excluded Assets"): (i) Any and all cash held by Seller or on deposit in banks or other financial institutions as of the Closing Date; (ii) Minute books, stock ledgers, banking records, personnel files for those employees of Seller who will not be employed by Buyer and other corporate records of Seller; 2 (iii) Invoices, tax returns, correspondence files, equipment files, invoices and other similar corporate records unrelated to the Purchased Assets; (iv) Claims for refunds of taxes and other governmental charges for periods ending prior to the Closing Date and any unemployment insurance credit; (v) Recoveries under any insurance policies of Seller; (vi) Pension, profit sharing or savings plans and trusts and any assets thereof; and (vii) All land, buildings or other real property used or occupied by Seller in connection with the operation of its Business; 1.2. Asset Purchase Price. (a) The aggregate consideration to be paid by Buyer for the Purchased Assets shall be Six Hundred Thousand Dollars and No Cents ($600,000.00) (the "Purchase Price"). (b) The Purchase Price will be paid at Closing by wire transfer or other immediately available funds to such account as Seller or Parent shall specify to Buyer, subject to the escrow deposit set forth in Section 1.2(d) below. (c) Buyer and Seller shall each be responsible for paying one-half of any sales, transfer or other taxes related to the completion of the transactions contemplated by this Agreement. For clarification, nothing herein is intended to impose any obligation on Buyer for any income or capital gains taxes incurred by Seller or Parent related to the Purchased Assets. (d) Buyer shall deposit $12,000 of the Purchase Price into an escrow account to be held pending an audit by the New Jersey Tax Department to confirm that Seller has paid all state sales taxes due up to the Closing Date. Buyer shall indemnify Seller for any amounts of the escrow fund paid to the New Jersey Tax Department in satisfaction of outstanding state sales taxes. 1.3. Liabilities. (a) Buyer shall not discharge or in any way become liable for any and all liabilities or obligations, whether absolute or contingent, arising out of, resulting from or relating to (i) Hazardous Materials located on, under or emanating from the Camden Facility or the Former Facilities that were released or disposed of on or off-site prior to the Closing Date including, but not limited to, Environmental Conditions prior to the Closing Date and performance of Remedial Actions pursuant to Section 5.2 below, third party claims and natural resources damages or injuries, in connection therewith, (ii) the Excluded Assets, the business of Seller continuing after the Closing Date, the business of Parent or the Former Facilities, (iii) any liabilities associated with the EXCEL, H250 and H400 CNC machines currently being leased for use by Seller, (iv) any product liability claims based on events occurring prior to the Closing Date, (v) obligations with respect to the effects of the termination of Seller's employees or severance payments to Seller's terminated employees, as a result of or in connection with the 3 sale of the Purchased Assets; (vi) any judgment or settlement with respect to claims from the debtor in possession of Langston Corporation, pursuant to current bankruptcy proceedings; (vii) payment of all employee health, life and disability insurance premiums up to the Closing Date; (viii) any federal or state income taxes of Seller; (ix) any inter-company debts between Seller and Parent or any affiliate of Parent; (x) any pending or threatened litigation, investigation, proceeding or directive set forth on Schedule 2.7; (xi) any liabilities of Seller, Parent or any affiliate of Parent to Standard Federal National Association, LaSalle Business Credit LLC, Mellon US Leasing, Mellon Bank, GE Capital Corporation or Fidelity Leasing; (xii) any liability arising from Seller's (or any affiliate of Seller's) withdrawal from any Multi-employer Plans, including but not limited to, the IUE/CWA and Teamsters Multi-employer Plans; (xiii) any liability for alleged underfunding of the IUE/CWA Multi-Employer Pension Plan, as a result of an alleged miscalculation of "accredited hours paid" under the Plan; (xiv) any liability to make contributions to the SL Industries, Inc. Savings and Pension Plan or as a result of a disqualification of the Plan; (xv) any obligation to make payments to former employees under the SL Industries, Inc. Capital Accumulation Plan or Deferred Compensation Plan; and (xvi) any claims of former employees for benefits under the Multi-employer Plans or Savings and Pension Plan (collectively, the "Excluded Liabilities"). (b) Except for the Excluded Liabilities set forth in Section 1.3(a) above, Buyer shall discharge and be fully liable for the performance of any and all obligations (i) related to the accounts payable and accrued liabilities of Seller as of the Closing Date; (ii) arising out of payroll or employment related liabilities (other than accrued vacation benefits to employees terminated as a result of or in connection with the sale of the Purchased Assets) of the Business not discharged prior to the Closing Date, including the payment of all benefits and taxes thereon, (iii) related to any obligation of the Business not otherwise provided for in this Agreement or specifically set forth on Schedule 1.3(b), (iv) related to product liability claims arising from events occurring after the Closing Date, which causes or caused, allegedly caused or caused, or is deemed to cause or have caused personal injury or property damage, (v) set forth in the Camden Lease, (vi) resulting from any claims for violations or failure to perform under any contract or agreement related to the Business, including collective bargaining agreements (other than claims for severance to employees terminated as a result of or in connection with the sale of the Purchased Assets); and (vii) arising out of, resulting from or relating to Hazardous Materials located on, under or emanating from the Camden Facility that were released or disposed of by Buyer or Buyer's tenants, assignees, invitees, licensees, employees, contractors, agents or representatives after the Closing Date, including but not limited to, Environmental Conditions after the Closing Date, third party claims and natural resources damages or injuries in connection therewith (the "Discharged Liabilities"). (c) Nothing herein shall be construed to deem that Buyer intends to assume or be bound by the terms of the collective bargaining agreement between Seller and any union, including but not limited to, the agreement between Seller and the IUE/CWA - AFL-CIO Local 134. 4 1.4 Closing Transactions. (a) The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of McCarter & English, LLP, CityPlace I, 185 Asylum Street, Hartford, Connecticut at ten o'clock (10:00 am) in the morning on November 24, 2003, or such other date as is mutually agreed to by Buyer and Seller. The date of the Closing is herein referred to as the "Closing Date." Each of the parties to this Agreement acknowledges that it is contemplated that the Closing will be a formality inasmuch as, to the maximum extent possible, all documents will be executed and delivered to McCarter & English LLP as limited agent for purposes of assembling all documents required to consummate the Closing. (b) Subject to the conditions set forth in this Agreement, Seller shall deliver to Buyer at the Closing: (i) a lease agreement (the "Camden Lease") for Seller's facility in Camden, New Jersey with Buyer as lessee, executed by Seller and Parent, in the form of Exhibit A hereto; (ii) a Bill of Sale for the Purchased Assets in the form of Exhibit B hereto; (iii) any required consents, authorizations, approvals, notices or filings necessary to legally and validly transfer the Purchased Assets to Buyer free and clear of all Liens (as defined in Section 2.6 below) and in compliance with ISRA (as defined in Section 2.12) and to place Buyer in exclusive possession and control of the Purchased Assets; (iv) the Intellectual Property Assignment Agreements in the form of Exhibit C hereto; (v) a certificate executed by the Secretary of Seller attaching (i) a certified copy of Seller's Certificate of Incorporation, and (ii) a certified copy of resolutions of the board of directors and the shareholder of Seller authorizing the execution, delivery and performance of this Agreement and the transactions contemplated thereby; (vi) a certificate executed by the Secretary of Parent attaching a certified copy of resolutions of the board of directors, authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby; (vii) the aged list of outstanding accounts receivable as of the Closing Date; (viii) a list of accounts payable of the Business as of the Closing Date; (ix) the First Amendment and Modification to Loan and Security Agreement between Standard Federal National Association, LaSalle Business Credit LLC, Seller, Parent and others (the "First Amendment") substantially in the form of Exhibit D hereto; and 5 (x) such other instruments as may be reasonably necessary to convey the Purchased Assets or otherwise carry out the provisions of this Agreement. (c) Subject to the conditions set forth in this Agreement, Buyer shall deliver to Seller at the Closing: (xi) the payment of the Purchase Price as specified in Section 1.2(a); (xii) the Camden Lease executed by the Buyer; (xiii) a certificate executed by the President of Buyer attaching a certified copy of Buyer's Certificate of Incorporation, and (xiv) the release letters executed by John Willey, Sarina DiBianca and Steven Hipley, substantially in the form of Exhibit E, releasing Seller and Parent from certain severance obligations. 1.4. Allocation of Purchase Price. The Purchase Price shall be allocated among the Purchased Assets in accordance with Schedule 1.5. Buyer and Seller shall each report the federal, state and local income and other tax consequences of the transactions contemplated by this Agreement in a manner consistent with such allocation, including but not limited to the preparation and filing of Form 8594 under Section 1060 of the Code (or any successor form or successor provision of any future tax law) with their respective federal income tax returns for the taxable year that includes the Closing Date, and neither Buyer, Seller nor Parent shall take any position inconsistent with such allocation unless otherwise required by applicable law. ARTICLE II. Representations, Warranties and Covenants of Seller and Parent As an inducement to Buyer to enter into this Agreement, Seller and the Parent jointly and severally hereby represent and warrant to Buyer as of the date of this Agreement and as of the Closing Date as follows: 2.1. Due Organization. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey; it has full corporate power to carry on the Business as it is now being conducted and to own and operate the properties and assets now owned or operated by it in operation of the Business. To Parent's knowledge, Seller is duly qualified to do business and is in good standing in every jurisdiction in which its failure to be so qualified would have a material adverse effect on the Business or the Purchased Assets. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. 2.2. Power and Authority. Seller has full power and authority to execute and deliver this Agreement and to, convey, assign, transfer and deliver the Purchased Assets to Buyer as provided in this Agreement. Parent has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement and the 6 instruments and agreements contemplated herein will constitute binding obligations as to each of Parent and Seller enforceable in accordance with their terms except to the extent enforcement thereof may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general or by general principles of equity. Neither the execution and delivery of this Agreement nor the consummation of the transactions provided herein in the manner herein provided, will violate any agreement to which Parent, or to Parent's knowledge, Seller is a party or by which either is bound or any law, order or decree or any provision of Seller's or Parent's Certificate of Incorporation or By-Laws. No authorization, approval, or consent of any third party is required in connection with the executing, delivering and performing of this Agreement by each of Seller and Parent which will not have been obtained by the Closing or waived in writing by the party whose consent is required; provided that the representation in this sentence with respect to Seller is made to Parent's knowledge. True and complete copies of the Certificate of Incorporation and By-laws, including amendments, of Seller have previously been delivered to Buyer. 2.3. Capitalization. Parent, through a wholly-owned subsidiary, SL Delaware, Inc., is the sole holder of all of the issued and outstanding shares of common stock of Seller, and legal title to such shares is owned of record by Parent, free and clear of any Liens (as defined in Section 2.6 below). There are no contracts or agreements relating to the issuance, sale or transfer of any capital stock or other securities of Seller. 2.4. Governmental or Other Restrictions. To Parent's knowledge, Seller is not subject to any governmental judgment, order, writ, injunction or decree which materially and adversely affects or, so far as it can now reasonably foresee, may in the future materially and adversely affect, the Business as conducted prior to the Closing Date. 2.5. No Undisclosed Liabilities. To Parent's knowledge, Seller has no liabilities not known by the officers of Buyer of any kind, character or description, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, invested or uninvested, executory, determined, determinable or otherwise, that alone or in the aggregate, had or will have a material adverse effect on the Business or the Purchased Assets. 2.6. Title. To Parent's knowledge, Seller has good and marketable title to all of the assets and personal properties, tangible and intangible, which are included in the Purchased Assets free and clear of all mortgages, liens, pledges, charges and encumbrances of any nature whatsoever (collectively, the "Liens"), except Liens disclosed on Schedule 2.6. 2.7. Litigation. To Parent's knowledge, there is no pending or threatened suit, action, or legal, administrative, arbitration, governmental investigation, or other proceeding pending or, to the knowledge of Seller or Parent, threatened against Seller or Parent related to the Business, except as disclosed on Schedule 2.7. 7 2.8. Proprietary Rights. (a) Set forth on Schedule 2.8 attached hereto is a list of all patents, trademarks, service marks, domain names, copyrights and principal trade secrets in which, to Parent's knowledge, Seller has proprietary rights, all of which are included in the Purchased Assets (the "Proprietary Rights") and all of the Proprietary Rights are owned by Seller free and clear of any Liens. To Parent's knowledge, Seller is not in default under, and has not received any notice of any claim of infringement or any other claim or proceeding relating to any Proprietary Rights. (b) To Parent's knowledge, except as set forth on Schedule 2.8, there are no licenses, sublicenses or agreements relating to (i) the use by third parties of the Proprietary Rights or (ii) the use by Seller of the Proprietary Rights, and there is no prior right of any other party or other impediment which would invalidate or adversely affect any of the Proprietary Rights. 2.9. Compliance with the Law. To Parent's knowledge, Seller has complied with all federal, state and municipal laws, ordinances, rules and regulations and any private limitations, restrictions, covenants or conditions relating to the Camden Facility and the operation or conduct of the Business. Without limiting the foregoing, to Parent's knowledge: (a) except as set forth on Schedule 2.9, Seller (and Parent as it relates to the Business) are in full compliance with all applicable laws, including without limitation Environmental Laws, and price and wage control laws; and (b) there is no municipal law or any regulation (or, any proposed regulation thereunder or any proposed changes in any federal or state law or any proposed regulation thereunder) which may require material changes in services or methods of operation of the Business. To Parent's knowledge, the operation of the Business by Seller is permitted by all applicable regulations, ordinances, limitations, restrictions and conditions. 2.10. Licenses, Authorizations and Permits. To Parent's knowledge, Seller has all necessary licenses, authorizations and permits that are required pursuant to applicable laws, including without limitation, Environmental Laws, to conduct the Business as now conducted and to use the Purchased Assets. To the Parent's knowledge, Seller has not violated or defaulted under any such license, authorization or permit. To Parent's knowledge, there is no reason why any of the same should not be renewed upon expiration upon the substantially same terms as presently applicable. 2.11. Employee Plans. Except as set forth on Schedule 2.11: (a) Seller does not maintain or sponsor, and is not required to make contributions to, any pension, profit-sharing, bonus, incentive, welfare or other employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (such plans and related trusts, insurance and annuity contracts, funding media and related agreements and arrangements, other than any "multi-employer plan" (within the meaning of Section 3(37) or Section 4001(a)(3) of ERISA), being herein referred to as the "Benefit Plans" and such multi-employer plans being hereinafter referred to as the "Multi-employer Plans"); 8 (b) To Parent's knowledge, each Benefit Plan complies in all respects with all requirements of ERISA and the Code; (c) To Parent's knowledge, each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service as to such qualification; (d) To Parent's knowledge, Seller does not maintain, sponsor or contribute to (nor is it required to contribute to) any Multi-employer Plan; and (e) To Parent's knowledge, neither Seller, Parent nor other "disqualified person or party in interest" of any Benefit Plan, has engaged in any "prohibited transaction" (within the meaning of Section 406 of ERISA or Section 4975(c) of the Code). 2.12. Environmental Matters. (a) Definitions: For the purposes of this Agreement, the following terms shall have the meanings set forth below. (i) "Camden Facility" shall mean the facility occupied by the Seller in connection with the operation of the Business located at 1416 South 6th Street, Camden, New Jersey. (ii) "Compliance with ISRA" shall mean the receipt of a Remediation Agreement (as such term is defined under ISRA) permitting the consummation of the transactions contemplated by this Agreement. (iii) "Environment" shall mean air, land, surface soil, subsurface soil, sediment, surface water, groundwater, wetlands and all flora and fauna present therein and thereon. (iv) "Environmental Claim" shall mean any and all claims, demands, causes of action, suits, proceedings, administrative proceedings, orders, losses, judgments, decrees, debts, investigations, requests or demands for information, damages (whether to person, property or natural resources), liabilities, court costs, attorneys' fees and other expenses. (v) "Environmental Conditions" shall mean any pollution or contamination of, or the Release of Hazardous Materials into, the Environment. (vi) "Environmental Laws" means all federal, regional, state, county or local laws, statutes, ordinances, decisional law, rules, regulations, codes, orders, decrees, directives and judgments relating to public health or safety, pollution, damage to or protection of the Environment, Environmental Conditions, Releases or threatened Releases of Hazardous Materials into the Environment or the use, manufacture, processing, distribution, treatment, storage, generation, disposal, transport or handling of Hazardous Materials, including but not limited to, the Federal Water Pollution Control Act, 33 U.S.C. Sections 1231-1387; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901-6991 ("RCRA"); the Clean Air Act, 42 U.S.C. Sections 7401-7642; the Comprehensive Environmental Response Compensation and Liability 9 Act, 42 U.S.C. Sections 9601-9675 ("CERCLA"); the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2629; the Federal Occupational Safety and Health Act, 29 U.S.C. Section 657 et seq. ("OSHA"); ISRA; the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"); the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.; the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et seq.; and the New Jersey Environmental Rights Act, N.J.S.A. 2A:35A-1 et seq.; and any and all rules and regulations promulgated thereunder. (vii) "Former Facilities" shall mean the facility located at 482 Cove Road, Pennsauken, New Jersey, and the facility located at 300 Harvard Avenue, Westville, New Jersey. (viii) "Hazardous Materials" shall mean any substances, materials or wastes, whether liquid, gaseous or solid, or any pollutant or contaminant, that is infectious, toxic, hazardous, explosive, corrosive, flammable or radioactive, including without limitation, petroleum, polychlorinated biphenyls, asbestos and asbestos containing materials and urea formaldehyde, or that is regulated under, defined, listed or included in any Environmental Laws, including without limitation, CERCLA, RCRA, OSHA and ISRA. (ix) "ISRA" shall mean the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., and the regulations promulgated thereunder. (x) "ISRA Compliance Costs" shall mean all fees, costs and expenses incurred to achieve Compliance with ISRA, including without limitation, attorneys', consultants' and engineering fees and disbursements, NJDEP filing fees and oversight charges, costs (including any surcharges) associated with securing and maintaining any remediation funding source, laboratory and analytical costs and expenses, equipment charges, industrial or hazardous waste disposal costs, natural resource damage or injury assessments and all other fees, costs and expenses incurred in connection with or relating to Remedial Actions. (xi) "NJDEP" shall mean the New Jersey Department of Environmental Protection, its divisions, bureaus and subdivisions. (xii) "Release" shall mean any intentional or unintentional release, discharge, burial, spill, leaking, pumping, pouring, emitting, emptying, injection, disposal or dumping into the Environment. (xiii) "Remedial Action" means any and all: (i) investigations of Environmental Conditions of any kind or nature whatsoever, including site assessments, site investigations, remedial investigations, soil, groundwater, surface water, sediment sampling or monitoring; or (ii) actions of any kind or nature whatsoever taken to remove, abate or remediate Environmental Conditions, including the use, implementation, application, installation, operation or maintenance of removal actions, in-situ or ex-situ remediation technologies applied to the surface or subsurface soils, encapsulation or stabilization of soils, excavation and off-site treatment or disposal of soils, systems for the recovery and/or treatment of groundwater or free product, Engineering Controls or Institutional Controls (as such terms are defined at N.J.A.C. 7:26E-1.8). 10 (xiv) "Remediation Standards" shall have the meaning provided for such term at N.J.A.C. 7:26E-1.8 and any Remediation Agreement between Seller and Parent and the NJDEP. (b) Except as set forth on Schedule 2.12, to Parent's knowledge, the Business is, and at all times has been conducted, in compliance with all Environmental Laws applicable to the Business, the Purchased Assets, the Former Facilities or the Camden Facility. (c) Except as set forth on Schedule 2.12, to Parent's knowledge, neither Seller nor Parent has received any written notice that either Seller, Parent, the Business, any of the Purchased Assets or the Camden Facility: (i) is in violation of the requirements of any Environmental Laws; (ii) is the subject of any Environmental Claim; or (iii) has actual or potential liability under any Environmental Laws. (d) Except as set forth on Schedule 2.12, to Parent's knowledge, there are no Environmental Conditions or other facts, circumstances or activities arising out of or relating to the Business, the Purchased Assets, or the use, operation or occupancy by Seller or Parent of the Camden Facility that result or reasonably could be expected to result in (i) any obligation of the Seller or the Parent to file any report or notice, to conduct any investigation, sampling or monitoring or to effect any Remedial Action under Environmental Laws; or (ii) any liability, either to the NJDEP or other governmental authority or third parties, for any Environmental Claim. 2.13. Disclosure. To Parent's knowledge, neither this Agreement, nor any of the schedules, attachments or exhibits hereto, contain any untrue statement of material fact or omit a fact necessary to make the statements contained herein or therein, in light of the circumstances in which they were made, not misleading. 2.14. Tax Returns. Seller has filed all required federal income tax returns and has paid all taxes required to be paid as shown to be due thereby including, without limitation, interest and penalties. To Parent's knowledge, Seller has filed with all other appropriate governmental agencies all tax returns and tax reports which are required to be filed and has paid all taxes required to be paid as shown to be due thereby and the failure to file or pay which would give rise to a Lien on the Purchased Assets. 2.15. Non-Compete Agreements. To Parent's knowledge, there is no agreement, understanding or arrangement, whether oral or written, express or implied, which restricts the ability of Seller to own, possess or use the Purchased Assets or conduct the Business in any geographic area or region, or to compete against any individual or entity. 2.16. Broker's Fees. No agent, broker, investment banker, person or firm acting on behalf of, or under the authority of, Seller or Parent ("Seller Agent") is or will be entitled to any broker's or finder's fee or other commission or similar fee directly or indirectly from any of the parties hereto in connection with any of the transactions contemplated hereby. The Seller and Parent shall be solely responsible for, and shall pay, the fee of any Seller Agent. 11 2.17. Knowledge of Willey. Notwithstanding anything herein to the contrary, to the extent John Willey has actual knowledge as of the Closing Date that any representation or warranty of Seller or Parent is erroneous or inconsistent with any fact or circumstance relating to the Business, then such representation shall be null and void to the extent of Mr. Willey's knowledge. ARTICLE III. Representations, Warranties and Covenants of Buyer As an inducement to Seller and Parent to enter into this Agreement, Buyer hereby represents, warrants and covenants to Seller as of the date of this Agreement and as of the Closing Date that: 3.1. Organization and Corporate Power. Buyer is a corporation duly organized, validly existing and in good standing under the laws of Delaware, with full corporate power and authority to enter into this Agreement and perform its obligations hereunder. 3.2. Authorization. This Agreement has been duly authorized and executed by Buyer and constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. Neither the execution and delivery of this Agreement nor the consummation of the transactions provided herein in the manner herein provided will violate any agreement to which Buyer is a party or by which Buyer is bound or any law, order or decree or any provision of Buyer's Certificate of Incorporation or By-Laws. No authorization, approval, or consent of any third party (including, without limitation, the holder of any debt of Buyer or any other party to any contract or agreement or any governmental regulatory authority) is required in connection with the executing, delivering and performing of this Agreement by Buyer which will not have been obtained by the Closing or waived in writing by the parties whose consent is required. A true and complete copy of the Certificate of Incorporation of Buyer has previously been delivered to Seller. 3.3. Broker's Fees. No agent, broker, investment banker, person or firm acting on behalf of, or under the authority of, Buyer ("Buyer Agent") is or will be entitled to any broker's or finder's fee or other commission or similar fee directly or indirectly from any of the parties hereto in connection with any of the transactions contemplated hereby. Buyer shall be solely responsible for, and shall pay, the fee of any Buyer Agent. ARTICLE IV. Conditions to Closing 4.1. Conditions to Buyer's Obligation. The obligation of Buyer to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions on or before the Closing Date: (a) The representations and warranties set forth in Article II hereof, and each of the Exhibits to this Agreement, will be true and correct in all material respects as of the Closing Date (except that representations and warranties qualified by materiality shall be true and correct in all respects); 12 (b) Seller and Parent will have performed all of the covenants and agreements required to be performed by each under this Agreement prior to the Closing; (c) Seller shall have provided to Buyer releases of all Liens against Seller and the Purchased Assets; (d) No action or proceeding before any court or governmental body will be pending or threatened wherein an unfavorable judgment, decree or order would prevent the carrying out of this Agreement or any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded; (e) Seller shall have delivered all documents required to be delivered pursuant to Section 1.4(b); (f) With respect to the Camden Facility, Seller or Parent shall have secured a Remediation Agreement (as such term is defined under ISRA) issued by the NJDEP permitting the consummation of the transactions contemplated in this Agreement; (g) Seller, Parent and Buyer shall have executed the Camden Lease; (h) The Purchased Assets and the Camden Facility shall be, in all material respects, in the same condition and fitness as they were as of the date of this Agreement; (i) Seller shall have terminated or received the resignations of all of its employees prior to the Closing; and (j) Seller and Parent shall have entered into the First Amendment. Any condition specified in this Section 4.1 may be waived by Buyer; provided that no such waiver will be effective unless it is set forth in a writing executed by Buyer. 4.2. Conditions to Obligations of Seller and Parent. The obligations of Seller and Parent to consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions on or before the Closing Date: (a) The representations and warranties set forth in Article III hereof, and each of the Exhibits to this Agreement, will be true and correct in all respects as of the Closing Date; (b) Buyer will have performed in all material respects all of the covenants and agreements required to be performed by Buyer under this Agreement prior to the Closing; (c) Buyer shall have made the deliveries required pursuant to Section 1.4(c); (d) Seller, Parent and Buyer shall have executed the Camden Lease; and (e) No action or proceeding before any court or governmental body will be pending or threatened wherein an unfavorable judgment, decree or order would prevent the 13 carrying out of this Agreement or any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded. 4.3 Termination. This Agreement may be terminated prior to or at Closing as follows: (a) By Buyer if any condition in Section 4.1 has not been satisfied as of the date specified for Closing, or if satisfaction of such condition by such date is or becomes impossible (other than through the failure of Buyer to comply with its obligations under this Agreement), and Buyer has not waived such conditions on or before such date; (b) By Seller or Parent, if any condition in Section 4.2 has not been satisfied as of the date specified for Closing, or if satisfaction of such condition by such date is or becomes impossible (other than through the failure of Seller or Parent to comply with their obligations under this Agreement), and Seller and Parent have not waived such conditions on or before such date; or (c) By mutual consent of Buyer, Seller and Parent. 4.4 Effect of Termination. In the event this Agreement is terminated as set forth in Section 4.3 above, no party hereto shall have any obligation or liabilities hereunder. ARTICLE V. Compliance With ISRA 5.1 Conduct of ISRA Proceedings. (a) With respect to the Camden Facility and the transactions contemplated by this Agreement, Parent shall, or shall cause Seller to, prior to the Closing Date, obtain from the NJDEP and execute a Remediation Agreement (as such term is defined under ISRA) permitting the consummation of the transactions contemplated by this Agreement ("Compliance with ISRA"). Seller and Parent shall be the Ordered Parties on the such Remediation Agreement. (b) Seller and Parent shall provide Buyer with copies of all documents, including correspondence, reports, field and laboratory data, summaries, proposals and recommendations, submitted by Seller or Parent to, or received by Seller or Parent from, the NJDEP in connection with Seller's and Parent's actions to achieve Compliance with ISRA. (c) Seller or Parent shall pay all ISRA Compliance Costs necessary or incurred in order to achieve Compliance with ISRA. 5.2 Performance of Remedial Actions. As to any Remedial Actions that Seller or Parent performs at the Camden Facility pursuant to ISRA or Section 6.1 hereof, Seller and Parent agree to: (a) Perform, and cause all consultants and contractors retained by Seller or Parent to perform, all such Remedial Actions in a workmanlike manner and consistent with all applicable Environmental Laws; 14 (b) Comply with all Environmental Laws applicable to the implementation of such Remedial Actions at the Camden Facility and obtain all permits, authorizations and consents required under applicable Environmental Laws or by the NJDEP or other governmental agency or authority in order to implement such Remedial Actions at the Camden Facility; (c) Select and propose to the NJDEP Remedial Actions which, to the extent practicable, shall not unreasonably interfere with Buyer's use of, or conduct of the Business or operation of the Purchased Assets at, the Camden Facility; (d) Implement such Remedial Actions in such manner, at such times and with such advance notice, to the extent practicable, as to not unreasonably interfere with Buyer's use of, or conduct of the Business or operation of the Purchased Assets at, the Camden Facility; (e) Cause all consultants and contractors performing such Remedial Actions to provide and maintain comprehensive general liability insurance, automobile liability insurance, workers' compensation and employers' liability insurance, excess liability and professional liability insurance in full force and effect with limits of coverage that are customary for the performance for comparable work or services until sixty (60) days following the completion of the Remedial Action. Seller or Parent shall provide copies of insurance certificates indicating that Buyer has been named as an additional insured under such policies before Buyer shall be required to provide access to the Camden Facility; (f) Promptly upon the completion of any investigation or Remedial Action, restore the Camden Facility to substantially the same condition it was in prior to the performance of the investigation or Remedial Action; (g) Provide Buyer with the opportunity to: (i) review and copy (at Buyer's cost and expense) documents (other than such documents that Seller and Parent are obligated to provide to Buyer pursuant to Section 5.1(b) above, which documents Seller and Parent shall provide to Buyer at no cost to Buyer) concerning any Environmental Conditions on, at, under or emanating from the Camden Facility or any Remedial Actions proposed or implemented to address the same; and (ii) have a representative, including without limitation an environmental consultant or engineer, present during the performance of any Remedial Action and obtain split samples of any samples taken by or on behalf of Seller or Parent. Anything in subparagraph (ii) above to the contrary notwithstanding, if Buyer elects to have an environmental consultant or engineer present during the performance of Remedial Actions at the Camden Facility by Seller or Parent, or to have such consultant or engineer obtain split samples, Buyer shall cause such consultants and engineers to: (x) maintain insurance in accordance with Section 5.2(e) hereof and to name Seller and Parent as additional insureds under such insurance; (y) provide Seller or Parent with copies of split sampling results within a reasonable time following Buyer's receipt of such results; and (z) while present on the Camden Facility, not unreasonably interfere with the performance of Remedial Actions at the Camden Facility by Seller's or Parent's respective consultants. 5.3 Buyer's Consents With Respect to Remedial Actions. As to any Remedial Actions that Seller or Parent performs at the Camden Facility pursuant to Section 5.1 or Section 6.1 hereof, Buyer agrees to: 15 (a) Provide access to the Camden Facility as reasonably requested by Seller or Parent in order to perform such Remedial Actions, provided however, that Seller or Parent shall provide Buyer with notice at least three (3) business days in advance of any entry onto the Camden Facility setting forth the number of the parties that may enter the Camden Facility, the duration of the entry, the equipment that shall be used and the location of and nature of the Remedial Actions to be performed, whether any party will be wearing personal protective equipment, and shall use its reasonable best efforts so as not to unreasonably interfere with Buyer's use of, or conduct of the Business or operation of the Purchased Assets at, the Camden Facility; and (b) Seller's or Parent's use of engineering controls or institutional controls at the Camden Facility provided that (i) the same are required by and approved in writing by the NJDEP, or (ii) such engineering controls or institutional controls (or any limitations, restrictions, terms or conditions imposed by or associated with such engineering controls or institutional controls) do not unreasonably interfere with Buyer's use of, or conduct of the Business or operation of the Purchased Assets at, the Camden Facility. Parent shall inspect, maintain and otherwise comply with such engineering controls or institutional controls (including, without limitation, compliance with the biennial certification requirements of N.J.S.A. 58:10B-13.1(a)(2)) at its sole cost and expense. ARTICLE VI. Indemnification 6.1 Indemnification of Buyer. From and after the Closing Date, Seller and Parent shall, jointly and severally, protect, defend, hold harmless and indemnify Buyer, its officers, directors, members, managers, shareholders, employees, and agents, and their respective successors and assigns (each, a "Buyer Indemnified Party") from and against any and all claims, losses, liabilities, deficiencies, penalties, fines, damages, (including, but not limited to, damages on account of personal injury or death, property damage or natural resources damages), fees, costs, and expenses whatsoever (including without limitation, reasonable attorneys' consultants', engineering and other professional fees and disbursements, costs of investigation, monitoring and remediation, costs of litigation, settlement and judgment and interest) (collectively, the "Losses") that may be suffered or incurred by any of them arising from or by reason of any of the following: (a) any breach of any of the representations or warranties made by Seller or Parent in Article II or contained in any certificate executed by Seller or Parent and delivered to Buyer in connection with this Agreement; (b) any material breach of any covenant or agreement made by Seller or Parent in this Agreement or any other document or agreement executed by Seller or Parent and delivered to Buyer in connection with this Agreement; (c) any and all costs and expenses (including without limitation, reasonable legal fees and accounting fees) incident to the enforcement of the provisions of this Section 6.1, provided a court of competent jurisdiction shall rule conclusively that Seller or Parent did not comply with such provisions; 16 (d) the non-compliance of Seller with the provisions of any applicable bulk sales, tax, or similar act governing the purchase and sale of the Purchased Assets; and (e) any Losses relating to the Excluded Assets or Excluded Liabilities. 6.2 Indemnification of Seller and Parent. From and after the Closing, Buyer shall protect, defend, hold harmless and indemnify the Seller and Parent and their respective officers, directors, shareholders, employees and agents, and their respective successors and assigns (each, a "Seller Indemnified Party") from and against any and all Losses that may be suffered or incurred by any of them arising from or by reason of any of the following: (a) any breach of any of the representations or warranties made by Buyer in Article III or contained in any certificate executed by Buyer and delivered to Seller in connection with this Agreement; (b) any payments made to the New Jersey Tax Department pursuant to Section 1.2(d) above; (c) any material breach of any covenant or agreement made by Buyer in this Agreement or any other document or agreement executed by Buyer and delivered to Seller in connection with this Agreement; and (d) any failure by Buyer to perform, pay or discharge any liability of Buyer which is a Discharged Liability. 6.3 Indemnification Procedure. In the event any Buyer Indemnified Party or Seller Indemnified Party (each, an "Indemnified Party") becomes aware of a matter resulting in Losses or potential Losses to such Indemnified Party, with respect to which Buyer, Seller or Parent, as the case may be (the "Indemnifying Party"), may be required to provide indemnification under this Agreement, the Indemnified Party shall, as soon as reasonably possible or necessary (but not later than thirty (30) days after becoming aware of such matter), give notice to the Indemnifying Party in writing. If such Losses are based on a third-party claim, the Indemnified Party shall give to the Indemnifying Party all reasonable information and assistance for the defense and settlement of such matter at the Indemnifying Party's expense. The Indemnifying Party will pay all damages and costs awarded therein against the Indemnified Party which are attributable to such proceedings, but the Indemnifying Party will not be responsible for any settlement payments made without their consent. The Indemnified Party may also, subject to the Indemnifying Party's right to control the defense, participate in the defense with counsel of its choice, provided that the attorney's fees incurred by the Indemnified Party for such counsel shall be borne by the Indemnified Party. A claim for indemnification for Losses arising from any matter not involving a third-party claim may be asserted by the Indemnified Party by providing notice to the Indemnifying Party, and the Indemnified Party shall be entitled to recover from the Indemnifying Party any Losses incurred in connection with such matters. 6.4 Limitations on Indemnity. Except for violations of Section 2.12 (Environmental Matters) of this Agreement and Losses arising under Section 6.1(e) that relate to Section 1.3(a) (Excluded Liabilities), the maximum aggregate liability of Seller and Parent for all Losses arising under Section 6.1 shall be limited to the Purchase Price (the "Indemnity Limit"). Except 17 for Losses arising under Section 6.2(d) that relate to Section 1.3(b) (Discharged Liabilities), the maximum aggregate liability of Buyer for all Losses arising under Section 6.2 shall be limited to the Indemnity Limit. 6.5 Exception to Seller and Parent Indemnification. The indemnification rights and obligations set forth in Section 6.1(a) shall be subject to the exceptions set forth in Section 2.17 above. ARTICLE VII. Additional Agreements 7.1 Survival. (a) The representations and warranties of Seller and Parent contained in Article II of this Agreement shall survive the Closing for a period twelve (12) months, except that the representations and warranties in Section 2.14 (Tax Returns), shall survive the Closing for a period of six (6) years and (ii) the representations and warranties set forth in Section 2.2 (Power and Authority), Section 2.6 (Title), Section 2.11 (Employee Plans) and Section 2.12 (Environmental Matters) shall survive the Closing up to the applicable statute of limitations, if any. (b) The representations and warranties and covenants of Buyer contained in Article III of this Agreement shall survive the Closing for a period of twelve (12) months. (c) The covenants and agreements contained in this Agreement shall survive the Closing and shall remain in full force and effect thereafter (i) until the expiration of the terms or periods respectfully specified therein in the case of covenants and agreements that have specified terms or periods and (ii) indefinitely without regard to duration in the case of covenants and agreements that do not have specified terms or periods, including, but not limited to, the obligations of Seller and Parent under Section 6.1(e) that relate to Section 1.3(a)(i). 7.2 Name Change. Promptly after the Closing Date, Seller shall execute and mail to the Secretary of State of New Jersey for filing a Certificate of Amendment to its Certificate of Incorporation to change its name to a name which does not include the words "Surface" or "Technologies" or any derivation or combination thereof, and shall no longer use the words "Surface" or "Technologies" or any derivation or combination thereof in connection with the conduct of its business. 7.3 Expenses. Each party shall pay all of its expenses, including attorneys' fees and expenses, in connection with the negotiation of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated by this Agreement. 7.4 Cooperation with Post-Closing Audit. Upon reasonable notice, Buyer shall cooperate with Parent and Parent's independent auditors in the preparation and completion of an audit of Seller's books and records maintained at Buyer's offices, which shall include the auditor's on-site inspection of records during normal business hours and the duplication of such documents and records as the auditor may deem appropriate. 18 7.5 Further Transfers. Seller and Parent shall execute and deliver such further instruments of conveyance and transfer and take such additional action as Buyer may reasonably request to effect, consummate, confirm or evidence the transfer to Buyer of the Purchased Assets. 7.6 COBRA Notice. Seller shall be responsible after the Closing Date for notifying current COBRA (Consolidated Omnibus Budget Reconciliation Act 1985) participants and terminated employees under existing Seller medical plans of such persons' rights and obligations under such plans. 7.7 Confidentiality. Seller and Parent shall keep secret and retain in strictest confidence, and shall not use for their benefit or for the benefit of others, confidential information with respect to the Business as conducted on or prior to the Closing Date, including proprietary information, customer lists, details of client or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans other than any of the foregoing which are in the public domain (except through conduct of Seller or Parent which violates this Section 7.7 or conduct of Parent which violates Section 7.8. 7.8 Non-Competition. Seller and Parent agree that for the period commencing on the Closing Date and terminating five (5) years from the Closing Date, they will not directly or indirectly (a) engage in the business of manufacturing, marketing, selling, distributing, producing or processing surface coatings or other products of the kind manufactured, sold, processed, distributed or used by Seller in connection with the Business on the date of this Agreement; (b) solicit the employment of or hire any person while such person is in the employ of Buyer; or (c) induce or attempt to induce any individual, business, corporation, firm, partnership or other business entity that is a customer of, or supplier to, Buyer or any distributor or seller of products or services of Buyer, or that otherwise is a contracting party with Buyer, to terminate or otherwise adversely change or to cancel any written or oral agreement with Buyer. The above non-compete obligations will apply in the United States and any country in which Seller sold products or had customers or licenses during the five (5) year period prior to the Closing Date. Notwithstanding the foregoing, the parties agree that it shall not be deemed a violation of this covenant not to compete in the event that any purchaser of Parent, which becomes an assignee of this Agreement, is engaged in the activities set forth in Section 7.7(a) above. 7.9 Retention of and Access to Records. After the Closing Date, Buyer shall provide Seller and Parent access to records delivered to Buyer hereunder, during normal business hours and on at least three (3) days' prior written notice, for any reasonable business purpose specified; provided, however, that nothing contained in this Section 7.9 shall require Buyer to retain any documents longer than they would otherwise have been retained in the ordinary course of business or as required by law. 7.10 Taxes. Seller and Parent shall be jointly and severally liable for and shall pay all federal and state income taxes of the Business relating to any period ending on or prior to the Closing Date. Buyer shall be liable and shall pay all taxes of the Business relating to any period beginning after the Closing Date. 19 7.11 LaSalle. Promptly after Closing, Seller shall take all actions required under the First Amendment, including, but not limited to, the payment to LaSalle Business Credit LLC of amounts necessary to reduce Seller's indebtedness as specified therein, so as to cause LaSalle and Standard Federal National Association to release any Liens on the Purchased Assets. 7.12 Termination of Employees. Seller shall exercise its best efforts to either terminate, or accept the resignations of, all of its employees prior to the Closing. ARTICLE VIII. Miscellaneous 8.1 Amendment and Waiver. This Agreement may be amended and any provision of this Agreement may be waived, provided that any such amendment or waiver shall be binding only if such amendment or waiver is set forth in a writing executed by the party against whom enforcement is sought. No course of dealing between or among any persons having any interest in this Agreement shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person under or by reason of this Agreement. 8.2 Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be deemed to have been given when (a) personally delivered; (b) mailed by first class mail, return receipt requested; (c) sent by facsimile transmission; or (d) sent by recognized overnight delivery service (such as Federal Express). Notices, demands and communications to Seller and Buyer shall, unless another address is specified in writing by delivery of notice to the other parties as provided in this Section, be sent to the address indicated below: Notices to Seller or Parent: SL Industries, Inc. 520 Fellowship Road, Suite A-114 Mount Laurel, NJ 08054 ATTN: David R. Nuzzo, Esq. Notices to Buyer: Everlast Coatings Inc. 1416 South 6th Street Camden, NJ 08104 ATTN: John R. Willey 20 Copy to: Donald L. Borod, Esq. McCarter & English LLP CityPlace I - 36th Floor 185 Asylum Street Hartford, CT 06103 8.3 Parent's Knowledge. For purposes of this Agreement, the term "To Parent's knowledge," or words to that effect, shall be deemed to mean information that was actually known as of the Closing Date by any of Warren Lichtenstein, Glen Kassan, David Nuzzo, Charles Maneval or Maryann Cassidy. 8.4 Assignment. This Agreement, or any agreement, document or instrument executed and delivered pursuant hereto or in connection with the Closing, or any right to the payment of money or other obligations hereunder or thereunder may not be assigned by Seller, Parent or Buyer, without the prior written consent of all other parties, which consent shall not be unreasonably withheld, provided, however, that Seller or Parent may assign any of its rights or obligations under this Agreement or in any agreement, document or instrument executed and delivered pursuant hereto or in connection with the Closing to any successor to substantially all of the business or assets of Parent. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 8.5 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibitions or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 8.6 Captions. The captions used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect the interpretation of any provision of this Agreement. 8.7 Complete Agreement. This Agreement and the documents referred to herein contain the complete agreement between the parties and supersede any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. 8.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument. 8.9 Governing Law. The laws of the State of New Jersey will govern all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement. 21 8.10 Facsimile Signature. A signature sent by telecopy or facsimile transmission shall be as valid and binding upon the party as an original signature of such party. [Signature Page Follows] 22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above by their duly authorized representatives. EVERLAST COATINGS INC. By: /s/ John R. Willey ------------------ John R. Willey President SL SURFACE TECHNOLOGIES, INC. By: /s/ David R. Nuzzo ------------------ David R. Nuzzo Vice President SL INDUSTRIES, INC. By: /s/ David R. Nuzzo ------------------ David R. Nuzzo Vice President 23 EX-2.2 4 w92311exv2w2.txt LEASE AGREEMENT EXHIBIT 2.2 LEASE AGREEMENT This LEASE AGREEMENT (this "Lease") is dated this 24th day of November, 2003, between SL INDUSTRIES, INC., a New Jersey corporation ("LANDLORD"), with an address of 520 Fellowship Road, Suite A-114, Mount Laurel, New Jersey 08054, and EVERLAST COATINGS INC., a Delaware corporation ("TENANT"), with an address of 1416 South Sixth Street, Camden, New Jersey 08102, which corporation is qualified to do business in the state of New Jersey. PREMISES: The property with an address of 1416 South Sixth Street, Camden, New Jersey, commonly known as Block 350, Lot 5, Camden Township, Camden County, New Jersey, together with the two one-story buildings facilitating manufacturing, storage and office operations, including all drives, walks and parking areas, as more particularly shown on EXHIBIT "A" attached hereto and made a part hereof. The property and the buildings are referred to as the "PREMISES". LEASE AND BASE RENT COMMENCEMENT DATE: The date of the Asset Purchase Agreement by and between the Tenant and the Landlord. LEASE TERM: Beginning on the Lease Commencement Date and ending on the tenth anniversary thereof, subject to adjustment and earlier termination as provided in this Lease. If the Commencement Date is not the first day of the month, the first year shall include the partial month in which the Commencement Date occurs and rent and all other charges shall be prorated for such partial month.
BASE RENT: PERIOD: ANNUAL BASE RENT MONTHLY BASE RENT: - --------------------- --------------- ---------------- -------------------- First Year $ 18,000.00 $ 1,500.00 per month Second Year $ 19,200.00 $ 1,600.00 per month Third Year $ 20,400.00 $ 1,700.00 per month Fourth Year $ 21,600.00 $ 1,800.00 per month Fifth Year $ 22,800.00 $ 1,900.00 per month 6th - 10th.Yrs. $ 24,000.00 $ 2,000.00 per month
SECURITY DEPOSIT: $3,000.00 STANDARD INDUSTRIAL CLARIFICATION NUMBER: 3471 BROKER: None. RIGHT OF FIRST REFUSAL: None. ADDENDA: Exhibit A (Description of Property); Exhibit B (Landlord, Subordination and Consent). 1. GRANTING CLAUSE. In consideration of the obligation of Tenant to pay Base Rent, and all other sums to be paid by Tenant to Landlord as provided in this Lease (such sums being sometimes referred to as "ADDITIONAL RENT;" and collectively with Base Rent being sometimes referred to as "RENT") as herein provided, and in consideration of the other terms, covenants, and conditions hereof, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises, to have and to hold for the Lease Term, subject to the terms, covenants and conditions of this Lease. 2. ACCEPTANCE OF PREMISES. Except as may otherwise be expressly provided in this Lease, Tenant shall accept the Premises on the Lease Commencement Date in its "AS-IS" condition, subject to all applicable laws, ordinances, regulations, covenants and restrictions, and Landlord shall have no obligation to perform or pay for any repair or other work therein. Except as provided in this Paragraph 2 and Paragraph 8, in no event shall Landlord have any obligation for any defects in the Premises or any limitation on its use. The taking of possession of the Premises shall be conclusive evidence that Tenant accepts the Premises and that the Premises was in good condition at the time possession was taken except for items that are Landlord's responsibility under this Paragraph 2 and Paragraph 8. 3. USE. (a) Subject to Tenant's compliance with all zoning ordinances and Legal Requirements (as hereinafter defined), the Premises shall be used only for the purpose of engaging in the business of developing and manufacturing surface coatings and applying the surface coatings to machinery and equipment. Tenant shall not conduct or give notice of any auction, liquidation, or going out of business sale on the Premises. Tenant will use the Premises in a careful, safe and proper manner and will not commit waste, overload the floor or structure of the Premises or subject the Premises to use that would damage the Premises. Tenant shall not permit any unreasonably objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the Premises, or take any other action that would constitute a nuisance or would disturb or endanger the Premises. (b) Tenant, at its sole expense, shall use and occupy the Premises in compliance with all laws, including, without limitation, the Americans With Disabilities Act if such compliance is required due to Tenant's specific use and occupancy of the Premises during the Lease Term, orders, judgments, ordinances, regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter applicable to the Premises (collectively, "LEGAL REQUIREMENTS"). The Premises shall not be used as a place of public accommodation under the Americans With Disabilities Act or similar state statutes or local ordinances or any regulations promulgated thereunder, all as may be amended from time to 2 time. Tenant shall, at its expense, make any alterations or modifications, within the Premises that are required by Legal Requirements related to Tenant's specific use or occupation of the Premises. Tenant shall not use or permit the Premises to be used for any purpose or in any manner that would void any insurance policy on the Premises, increase the insurance risk, or cause the disallowance of any sprinkler credits. 4. BASE RENT. Tenant shall pay Annual Base Rent in 12 equal monthly installments in the amounts set forth on the second page of this Lease. The Security Deposit, if any, and the first full monthly installment of Base Rent shall be due and payable contemporaneously with the execution of this Lease, and Tenant promises to pay to Landlord in advance, without demand, deduction or set-off, monthly installments of Monthly Base Rent on or before the first day of each calendar month succeeding the Monthly Base Rent Commencement Date. Payments of Base Rent for any fractional calendar month shall be prorated. All payments required to be made by Tenant to Landlord hereunder shall be payable at such address as Landlord may specify from time to time by written notice delivered in accordance herewith. The obligation of Tenant to pay Monthly Base Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. Tenant shall have no right at any time to abate, reduce, or set-off any Rent due hereunder except where expressly provided in this Lease. Tenant acknowledges that late payment by Tenant to Landlord of any Rent due hereunder will inconvenience Landlord and cause Landlord to incur costs not contemplated by this Lease. Therefore, if Tenant is delinquent in any monthly installment of Monthly Base Rent or other sums due and payable hereunder for more than ten (10) business days, Tenant shall pay to Landlord on demand a late charge equal to three percent (3%) of such delinquent sum. The provision for such late charge shall be in addition to all of Landlord's other rights and remedies hereunder, including payment to Landlord of all costs and expenses (including reasonable attorney's fees), or at law and shall not be construed as a penalty. 5. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord as security for the performance of Tenant's obligations under this Lease. The Security Deposit is not an advance rental deposit or a measure of Landlord's damages in case of Tenant's default. Upon each occurrence of an Event of Default (hereinafter defined), Landlord may use all or part of the Security Deposit to pay delinquent payments due under this Lease, and the cost of any damage, injury, expense or liability caused by such Event of Default, without prejudice to any other remedy provided herein or provided by law. Tenant shall pay Landlord on demand the amount that will restore the Security Deposit to its original amount. Landlord's obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest shall accrue thereon. The Security Deposit shall be the property of Landlord, but shall be paid to Tenant when Tenant's obligations under this Lease have been completely fulfilled. Landlord shall be released from any obligation with respect to the Security Deposit upon transfer of this Lease and the Premises to a person or entity assuming Landlord's obligations under this Paragraph 5. 3 6. OPERATING EXPENSES; UTILITIES; TAXES. Starting on the Lease Commencement Date, Tenant shall pay the following expenses: (a) OPERATING EXPENSES. Any and all costs associated with the maintenance and operation of the Premises, including, without limitation, the costs of: utilities, maintenance, repair and replacement of all portions of the Premises, including without limitation, paving and parking areas, roads (e.g. filling of pot-holes, repair or replacement of the curbs, etc.), roof membranes, alleys, and driveways, mowing, snow removal, landscaping, and exterior painting, the cost of maintaining utility lines, base building fire sprinklers and fire protection systems, if any, exterior lighting and mechanical and building systems serving the Premises, amounts paid to contractors and subcontractors for work or services performed in connection with any of the foregoing, charges or assessments of any association to which the Premises is subject, the cost of any insurance deductibles for insurance required to be maintained by Tenant hereunder, security services, if any, trash collection, sweeping and removal, and additions or alterations made by Landlord and/or Tenant in order to comply with Legal Requirements or that are appropriate to the continued operation of the Premises as contemplated hereunder for each calendar year during the Lease Term, and the cost of insurance required to be maintained by Tenant pursuant to Paragraph 7 herein, for the Premises for each calendar year during the Lease Term. (b) UTILITIES. Any and all costs for water, gas, electricity, heat, light, power, telephone, sewer, sprinkler services, security, sprinkler or alarm service central station monitoring, and other utilities and services used on the Premises, all maintenance charges for utilities, and any storm sewer charges or other similar charges for utilities imposed by any governmental entity or utility provider, together with any taxes, penalties, surcharges, connection charges, and the like pertaining to Tenant's use of the Premises. Tenant, at its expense, shall obtain all utility services for the Premises, including making all applications therefor, obtaining meters and other related equipment, and paying all deposits and connection charges. Landlord shall not be liable for any interruption or failure of utility service to the Premises, and such interruption or failure of utility service shall not be a constructive eviction of Tenant, constitute a breach of any implied warranty, or entitle Tenant to any abatement of Tenant's obligations hereunder. (c) TAXES. Any and all taxes, assessments and governmental charges (collectively referred to as "TAXES") that either (a) accrue against the Premises during the Lease Term if such Taxes are payable in advance, or (b) are assessed against the Premises during the Lease Term, if such Taxes are payable in arrears. All capital levies or other taxes assessed or imposed on Landlord upon the Rents payable to Landlord under this Lease and any franchise tax, any excise, transaction, sales or privilege tax, assessment, levy or charge measured by or based, in whole or in part, upon such Rents from the Premises or any portion thereof shall be paid by Tenant to Landlord monthly in estimated installments or upon demand, at the option of Landlord, as Additional Rent; provided, however, in no event shall Tenant be liable for any net income taxes imposed on Landlord unless such net income taxes are in substitution for any Taxes payable hereunder. If any such tax or excise is levied or assessed directly against Tenant, then Tenant shall be responsible for and shall pay the same at such times and in such manner as the taxing authority shall require. Tenant shall be liable for all taxes levied or assessed against any personal property or fixtures 4 placed in the Premises, whether levied or assessed against Landlord or Tenant, and if any such taxes are levied or assessed against Landlord or the Premises and (a) Landlord pays them or (b) the assessed value of the Premises is increased thereby and Landlord pays the increased taxes, then Tenant shall pay to Landlord such taxes within fifteen (15) business days after Landlord's written request therefor. 7. INSURANCE. (a) Tenant shall, during the Lease Term, procure and keep in force the following insurance: (i) Commercial general liability ("CGL") insurance (or the equivalent ISO form in use from time to time in the state of New Jersey) naming Landlord, as an additional insured party, providing coverage against any and all claims for bodily injury and property damage occurring in, or about the Premises and land and/or arising out of or in any way related to use and occupancy of the Premises by Tenant or its agents, employees or invitees. Such insurance shall have a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence with Two Million Dollars ($2,000,000) aggregate limit and a deductible not to exceed $5,000 and an excess umbrella liability insurance (following form) in the amount of Two Million Dollars ($2,000,000). If Tenant has other locations that it owns or leases the policy shall include an aggregate limit per location endorsement. Such liability insurance shall be primary and not contributing to any insurance available to Landlord and Landlord's insurance, if any, shall be in excess thereto. In no event shall the limits of such insurance be considered as limiting the liability of Tenant under this lease and the minimum limits of coverage set forth in this Lease shall not be construed to limit the coverage available to any additional insured party to an amount which is less than the full policy limit(s) of all applicable policies actually carried by Tenant. Notwithstanding any limits of liability set forth herein or shown on any certificate/evidence of insurance, Landlord shall be entitled to additional insured status on all liability insurance maintained by Tenant. (ii) Workers' compensation insurance in accordance with statutory law and employers' liability insurance with a limit of not less than $100,000 per accident, $500,000 for a disease policy limit, and $100,000 for disease limit for each employee. (iii) Such other insurance as Landlord deems necessary and prudent, or as required by Landlord's mortgagees or beneficiaries of any deed of trust encumbering the Premises. (b) The policies required to be or otherwise maintained by Tenant shall be issued by companies rated A+ or better in the most current issue of Best's Insurance Reports. Insurers shall be admitted insurers in the state of New Jersey, and domiciled in the USA. Certified copies of the policies, or (i) Evidence of Insurance (ACORD Form 27) as to property insurance or (ii) a binder (ACORD 13) followed before expiration of the binder by a copy of the declarations page(s) of the policy with a schedule of all endorsements, shall be delivered to Landlord prior to the Commencement Date and annually thereafter at least thirty (30) days prior to the expiration date of the old policy. In addition, Tenant shall deliver copies of any endorsements requested by Landlord. Such forms shall 5 indicate applicable deductibles, retention, coverage and sub-limits of coverage and shall contain an endorsement each of the insurance companies named thereon adding any additional insured parties required herein. Tenant shall have the right to provide insurance coverage which it is obligated to carry pursuant to the terms hereof in a blanket policy, provided such blanket policy expressly affords coverage to the Premises, and to the Landlord and other parties as required by this Lease. (c) Each policy of insurance required to be or otherwise maintained by Tenant herein shall provide written notification to Landlord and any other additional insured party at least thirty (30) days prior to any cancellation or modification to reduce the insurance coverage. (d) In the event Tenant does not purchase the insurance required by this Lease or keep the same in full force and effect, Landlord may, but shall not be obligated to purchase the required insurance or such lesser alternative insurance coverage as Landlord may elect, and pay the premium therefor. Tenant shall repay to Landlord, as Additional Rent, the amount so paid promptly upon demand. In addition, Landlord may recover from Tenant and Tenant agrees to pay, as Additional Rent, any and all reasonable expenses (including attorneys' fees) and damages which Landlord may sustain by reason of the failure of Tenant to obtain and maintain such insurance and/or efforts to obtain same from Tenant or from other sources. 8. LANDLORD'S REPAIRS. This Lease is intended to be a triple net lease, accordingly, the maintenance and repair obligations to be performed by Landlord, at its sole cost and expense, are limited to the repair or replacement of the Premises' roof structure (excluding roof membrane which is Tenant's responsibility), and maintenance and repair of any defects of the foundation and foundation piers and structural members of the exterior walls and any structural defects in the floor slab (not caused by overloading by Tenant's installations or equipment) and any other structural systems of the Premises (the "BUILDING'S STRUCTURE"), in all cases excluding reasonable wear and tear and insured losses and damages. Tenant shall repair or replace, in accordance with the terms and conditions of Paragraph 9. (b), any damage caused to the Building's Structure by caused by Tenant, its agents, employees and contractors (a "TENANT PARTY"). The term "walls" as used in this Paragraph 8 shall not include exterior windows, window frames, interior glass, personnel doors or overhead doors, door frames, special store fronts, dock bumpers, dock plates or levelers, or office entries, all of which shall be maintained by Tenant. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Paragraph 8, after which Landlord shall promptly repair such item. 9. TENANT'S REPAIRS. (a) Subject to Landlord's obligation in Paragraph 8, Tenant, at its sole expense, shall repair, replace and maintain in good condition all portions of the Premises and all areas, improvements and systems including, without limitation, plumbing, plating tank beds, water, and sewer lines up to points of common connection, entries, doors, ceilings, windows, interior walls, and the interior side of demising walls, and heating, ventilation and air conditioning systems, and other building and mechanical systems and the water tight integrity of the roof membrane (the "BUILDING'S SYSTEMS"). Such repair and replacements include capital expenditures and repairs whose benefit may but is not required 6 to extend beyond the Lease Term. Maintenance and repair of the heating, plating tank beds, ventilation and air conditioning systems and other mechanical and building systems shall be at Tenant's expense pursuant to maintenance service contracts entered into by Tenant. (b) In the event that any repair or maintenance obligation required to be performed by Tenant hereunder may affect the structural integrity of the Premises (e.g., roof, foundation, structural members of the exterior walls), prior to commencing any such repair, Tenant shall provide Landlord with written notice of the necessary repair or maintenance and a brief summary of the structural component or components of the Premises that may be affected by such repair or maintenance. Within ten (10) business days after Landlord's receipt of Tenant's written notice, Landlord shall have the right, but not the obligation, to elect to cause such repair or maintenance to be performed by Landlord, or a contractor selected and engaged by Landlord, but at Tenant's sole cost and expense. The foregoing sentence is not intended to obligate Tenant to pay for repairs or maintenance to those structural items which are Landlord's responsibility pursuant to Paragraph 8 above, but shall only require Tenant to pay for the repair and maintenance to such structural components to the extent such repair or maintenance is necessitated due to the performance of Tenant's repair and maintenance obligations pursuant to this Paragraph 9. (c) Within the fifteen (15) day period prior to the expiration or termination of this Lease, Landlord may inspect the Premises or have same inspected by an engineer for purposes of determining if there is any damage which requires repair and/or that the hot water equipment and the HVAC system are then in good repair and working order. If Landlord believes that there are any repairs that are Tenant's responsibility Landlord shall provide Tenant with a certification from the inspecting engineer specifying such required repairs. If Tenant fails to perform any repair or replacement for which it is responsible, Landlord may perform such work and be reimbursed by Tenant within ten (10) days after demand therefor. Subject to Paragraph 7 and Paragraph 15, Tenant shall bear the full cost of any repair or replacement to any part of the Premises that results from damage caused by Tenant, its agents, contractors, or invitees. 10. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. (a) There shall be no changes to the floor plan of the Premises without Landlord's prior written consent. (b) Any non-structural alterations, additions, or improvements, costing in excess of Twenty Five Thousand Dollars ($25,000) in the aggregate in any period of twelve (12) consecutive months, made by or on behalf of Tenant to the Premises ("TENANT-MADE ALTERATIONS") shall be subject to Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. Tenant shall cause, at its expense, all Tenant-Made Alterations to comply with insurance requirements and with Legal Requirements and shall construct at its expense any alteration or modification required by Legal Requirements as a result of any Tenant-Made Alterations. Any structural alterations, additions, or improvements made by or on behalf of Tenant to the Premises ("STRUCTURAL ALTERATIONS") shall be subject to Landlord's prior written consent, which consent may be withheld or delayed in Landlord's sole discretion. NO REPAIRS, ALTERATIONS, ADDITIONS, OR IMPROVEMENTS PROVIDED FOR OR REQUIRED IN THIS LEASE TO BE MADE BY TENANT, AND NO CONSENT BY LANDLORD TO ANY ALTERATION, 7 ADDITIONS, REPAIRS OR IMPROVEMENTS BY OR ON BEHALF OF TENANT, SHALL BE DEEMED TO INCLUDE, EXPRESSLY OR BY IMPLICATION, A CONSENT OR AUTHORIZATION BY LANDLORD TO THE FILING OF ANY CONSTRUCTION LIEN AGAINST THE LANDLORD'S INTEREST IN THE PROPERTY. (c) All Tenant-Made Alterations and any Structural Alterations shall be constructed in a good and workmanlike manner by contractors reasonably acceptable to Landlord and only good grades of materials shall be used. All plans and specifications for any Tenant-Made Alterations which require Landlord's consent and for any Structural Alterations shall be submitted to Landlord for its approval, which approval shall not be unreasonably withheld or delayed. Landlord may monitor construction of the Tenant-Made Alterations. Landlord's right to review plans and specifications and to monitor construction shall be solely for its own benefit, and Landlord shall have no duty to see that such plans and specifications or construction comply with applicable laws, codes, rules and regulations. (d) Tenant shall, upon request, provide Landlord with the identities and mailing addresses of all persons performing work or supplying materials, prior to beginning such construction, and Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable law. Tenant shall make reasonable arrangements satisfactory to Landlord to assure payment for the completion of all work free and clear of liens and shall provide certificates of insurance for worker's compensation and other coverage in amounts and from an insurance company satisfactory to Landlord protecting Landlord against liability for personal injury or property damage during construction. Upon completion of any Tenant-Made Alterations, Tenant shall deliver to Landlord the names of all contractors and subcontractors who did work on the Tenant-Made Alterations and final lien waivers from all such contractors and subcontractors. (e) Upon surrender of the Premises, all Tenant-Made Alterations and any leasehold improvements constructed by Landlord or Tenant shall remain on the Premises as Landlord's property, except to the extent Landlord requires removal at Tenant's expense of any such items or Landlord and Tenant have otherwise agreed in writing in connection with Landlord's consent to any Tenant-Made Alterations. Prior to the expiration or termination of this Lease, Tenant, at its sole expense, shall repair any and all damage caused by such removal. (f) Tenant, at its own cost and expense and without Landlord's prior approval, may erect such equipment necessary for the functioning of a plating facility as contemplated herein (collectively "TRADE FIXTURES") in the ordinary course of its business provided that such items do not alter the basic character of the Premises, do not overload the floors or otherwise damage the Premises, and which may be removed without injury to the Premises, and the construction, erection, and installation thereof complies with all Legal Requirements and with Landlord's requirements set forth above. Prior to the expiration or termination of this Lease, Tenant, at its sole expense, shall remove its Trade Fixtures and shall repair any and all damage caused by such removal. 8 11. SIGNS. Tenant shall not make any changes to the exterior of the Premises, install any exterior lights, decorations, or painting, or erect or install any signs, windows or door lettering, placards, decorations, or advertising media of any type which can be viewed from the exterior of the Premises, without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. Tenant shall have the right to install, at Tenant's sole cost and expense and subject to Landlord's reasonable consent as provided herein and to Tenant's obtaining all applicable permits and complying with all applicable laws and ordinances, one or more facade mounted and/or ground mounted signs. Landlord shall not be required to notify Tenant of whether it consents to any sign until it (a) has received detailed, to-scale drawings thereof specifying design, material composition, color scheme, and method of installation, and (b) has had a reasonable opportunity to review them. Notwithstanding the foregoing sentence, Landlord will provide its consent or reasonable objection and reasonable request for modification of Tenant's signage plans within ten (10) days of receipt by Landlord of Tenant's request for consent and of the items listed under subsection (a) of the preceding sentence. Upon surrender or vacation of the Premises, Tenant shall have removed all signs and repair, paint, and/or replace the building fascia surface to which its signs are attached. Tenant shall obtain all applicable governmental permits and approvals for sign and exterior treatments. 12. RESTORATION. (a) If at any time during the Lease Term the Premises are damaged by a fire or other casualty, Landlord shall notify Tenant within thirty (30) days after such damage as to the amount of time Landlord reasonably estimates it will take to restore the Premises. If the restoration time is estimated to exceed ninety (90) days from the date the damage occurs, either Landlord or Tenant may elect to terminate this Lease upon notice to the other party given no later than thirty (30) days after Landlord's notice. If neither party elects to terminate this Lease or if Landlord estimates that restoration will take ninety (90) days or less, then, Landlord shall promptly restore the Premises excluding the improvements installed by Tenant or by Landlord and paid by Tenant. Tenant at Tenant's expense may in its sole judgment perform all repairs or restoration not required to be done by Landlord and shall if it so chooses, re-enter the Premises and commence doing business in accordance with this Lease. Notwithstanding the foregoing, either party may terminate this Lease upon thirty (30) days prior written notice to the other if the Premises are damaged during the last year of the Lease Term and Landlord reasonably estimates that it will take more than ninety (90) days to repair such damage. (b) If the Premises are destroyed or substantially damaged, either party may terminate this Lease by delivering written notice of termination to the other within thirty (30) days after such destruction or damage, whereupon the Lease shall be deemed to be terminated within thirty (30) days after such notice of termination and upon the expiration of such thirty (30) day period all rights and obligations hereunder shall cease and terminate, except for any liabilities which accrued prior to Lease termination. (c) If such damage or destruction is caused by the act(s) or omission(s) of Tenant, its employees, agents or contractors, Tenant shall pay to Landlord with respect to any damage to the Premises the amount of the commercially reasonable deductible under Landlord's insurance policy, if any, within fifteen (15) days after presentment of Landlord's invoice. 9 Monthly Base Rent shall be abated for the period of repair and restoration in the proportion which the area of the Premises, if any, which is not usable by Tenant bears to the total area of the Premises. Such abatement shall be the sole remedy of Tenant. Except as provided herein, Tenant waives any right to terminate the Lease by reason of damage or casualty loss. 13. CONDEMNATION. If any part of the Premises should be taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a "TAKING" or "TAKEN"), and (a) the Taking would prevent or materially interfere with Tenant's use of the Premises, then upon sixty (60) days prior written notice by Landlord or Tenant this Lease shall terminate and Monthly Base Rent shall be apportioned as of said date. If part of the Premises shall be Taken, and this Lease is not terminated as provided above, the Monthly Base Rent payable hereunder during the unexpired Lease Term shall be reduced to such extent as may be fair and reasonable under the circumstances, and Landlord shall restore the Premises to its condition prior to the Taking; provided, however, Landlord's obligation to so restore the Premises shall be limited to the award Landlord receives in respect of such Taking. Tenant shall have the right, to the extent that same shall not diminish Landlord's award, to make a separate claim against the condemning authority (but not Landlord) for such compensation as may be separately awarded or recoverable by Tenant for the value of its leasehold estate, for moving expenses and damage to Tenant's Trade Fixtures, if a separate award for such items is made to Tenant. 14. ASSIGNMENT AND SUBLETTING. (a) Without Landlord's prior written consent (which shall not be unreasonably withheld, delayed or conditioned), Tenant shall not assign this Lease or sublease the Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license within the Premises (each being a "TRANSFER") and any attempt to do any of the foregoing shall be void and of no effect. For purposes of this Paragraph 14, a transfer of the ownership interests controlling Tenant shall be deemed a Transfer of this Lease. Relevant criteria in determining reasonableness of approval include, but are not limited to, credit history of a proposed assignee or sublessee, negative references from prior landlords, concern over the environmental impact of the business to be conducted on the Premises by such proposed assignee or sublessee and any change or intensification of use of the Premises. Notwithstanding any approved assignment or approved sublease, the Tenant shall remain fully liable on this Lease and shall not be released from performing any of the terms, covenants and conditions of this Lease. Notwithstanding the above, Tenant may assign or sublet the Premises, or any part thereof, to any entity controlling Tenant or that obtains control of Tenant through a merger or reorganization, or any of its subsidiaries or affiliates, or any entity controlled by Tenant or under common control with Tenant including without limitation any subsidiary, affiliate or successor in interest (each of such persons or entities a "TENANT AFFILIATE"), without the prior written consent of Landlord; provided, however, Tenant shall provide at least ten (10) days written notice prior to assigning this Lease to, or entering into any sublease with, any Tenant Affiliate and reasonable evidence of the affiliate relationship. 10 (b) Notwithstanding any Transfer, Tenant and any guarantor or surety of Tenant's obligations under this Lease shall at all times remain fully responsible and liable for the payment of the Rent and for compliance with all of Tenant's other obligations under this Lease (regardless of whether Landlord's approval has been obtained for any such Transfer). (c) If this Lease is assigned or any concession or license is granted within the Premises or if the Premises are occupied in whole or in part by anyone other than Tenant, then upon a default by Tenant hereunder Landlord may collect Rent from the assignee, pledgee or licensee or other occupant and, except to the extent set forth in the preceding subparagraph, apply the amount collected to the next Rent payable hereunder; and all such rentals collected by Tenant shall be held in trust for Landlord and immediately forwarded to Landlord. No such transaction or collection of Rent or application thereof by Landlord, however, shall be deemed a waiver of these provisions or a release of Tenant from the further performance by Tenant of its covenants, duties, or obligations hereunder. Any approved assignment shall be expressly subject to the terms and conditions of this Lease. Landlord's consent to any Transfer shall not waive Landlord's rights as to any subsequent Transfers. 15. ASSUMPTION OF LIABILITIES AND INDEMNIFICATION. Tenant assumes all liabilities for all claims, demands, losses, liabilities, lawsuits, judgments, damages, costs and expenses ("Losses") arising from any occurrence on the Premises, the use and occupancy of the Premises, or from any activity, work, or thing done, permitted or suffered by Tenant in or about the Premises or due to any other act or omission of Tenant, its subtenants, assignees, invitees, licensees, employees, contractors and agents ("Tenant's Representatives"), or from Tenant's or Tenant's Representatives, failure to perform its obligations under this Lease, except for Losses arising from any occurrence taking place prior to the Lease Commencement Date or caused by the sole or gross negligence of Landlord or its agents. This indemnity provision shall survive termination or expiration of this Lease. The furnishing of insurance required hereunder shall not be deemed to limit Tenant's obligations under this Paragraph 15. Notwithstanding the foregoing, the parties' rights and obligations with respect to Environmental Conditions or Environmental Claims (as such terms are defined in Paragraph 27 below) shall be set forth in Paragraph 27 below. 16. INSPECTION AND ACCESS. Landlord and its agents, representatives, and contractors may enter the Premises during normal business hours with reasonable advance telephone notice to Tenant to (i) inspect the Premises, (ii) make such repairs as may be required or permitted pursuant to this Lease, and (iii) test and remediate the soil, ground water equipment and systems transporting, holding or discharging Hazardous Materials and (iv) review other environmental conditions, may be necessary or appropriate, to fulfill Landlord's responsibilities under any Remedial Action or otherwise meet its obligations under any Environmental Laws. Landlord and Landlord's representatives may enter the Premises during business hours with advance notice to Tenant for the purpose of showing the Premises to prospective purchasers or, during the last year of the Lease Term or the last year of any renewal periods or extensions thereof, to prospective tenants upon providing advance notice. Landlord may erect a suitable sign on the Premises stating the Premises are available to let or that the Premises is available for sale during the last year of the Lease Term or the last year of any renewal periods or extensions thereof. Landlord may grant 11 easements, make public dedications, designate common areas and create restrictions on or about the Premises, provided that no such easement, dedication, designation or restriction interferes with Tenant's use or occupancy of the Premises in Tenant's sole opinion. At Landlord's request, Tenant shall execute such instruments as may be necessary for such easements, dedications or restrictions. 17. QUIET ENJOYMENT. Tenant shall, subject to Tenant's observance of the terms of this Lease, at all times during the Lease Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord. 18. SURRENDER. No act by Landlord shall be an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid unless it is in writing and signed by Landlord. Upon termination of the Lease Term or earlier termination of Tenant's right of possession, Tenant shall surrender the Premises to Landlord in the same condition as received (subject to Tenant's rights hereunder to make Tenant-Made Alterations or other alterations consented to by Landlord) broom clean, ordinary wear and tear and casualty loss and condemnation covered by Paragraph 15 and Paragraph 16 excepted. Any Trade Fixtures, Tenant-Made Alterations and property not so removed by Tenant as permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord at Tenant's expense and Tenant waives all claims against Landlord for any damages resulting from Landlord's retention and disposition of such property. All obligations of Tenant and Landlord hereunder not fully performed as of the termination of the Lease Term shall survive the termination of the Lease Term, including without limitation, indemnity obligations, payment obligations and all obligations concerning the condition and repair of the Premises. 19. HOLDING OVER. If Tenant fails to vacate the Premises after the expiration of the Lease Term, Tenant shall be a tenant from month to month, and Tenant shall pay, in addition to any other Rent or other sums then due Landlord, Monthly Base Rent at the rate of 200% of the then prevailing Monthly Base Rent, which shall be payable in advance on the first day of each calendar month. Tenant shall also be liable for all expenses pursuant to Paragraph 6 herein incurred during such holdover period. In addition, Tenant shall be liable for all damages (including reasonable attorneys' fees and expenses) incurred by Landlord as a result of such holding over. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this Paragraph 19 shall not be construed as consent for Tenant to retain possession of the Premises. After the ninth anniversary of the Commencement Date, Tenant and Landlord shall enter into good faith discussions to determine whether to enter into an extension of the Lease. 20. EVENTS OF DEFAULT. Each of the following events shall be an event of default ("EVENT OF DEFAULT") by Tenant under this Lease: (a) Tenant shall fail to pay any installment of Monthly Base Rent or any other payment required herein when due, and such failure shall continue for a period of ten (10) business days from the date such payment was due. 12 (b) Tenant or any guarantor or surety of Tenant's obligations hereunder shall (i) make a general assignment for the benefit of creditors; (ii) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a "PROCEEDING FOR RELIEF"); (iii) become the subject of any proceeding for relief which is not dismissed within sixty (60) days of its filing or entry; or (iv) die or suffer a legal disability (if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise fail to maintain its legal existence (if Tenant, guarantor or surety is a corporation, partnership or other entity). (c) Any insurance required to be maintained by Tenant pursuant to this Lease shall be cancelled or terminated or shall expire or shall be reduced or materially changed and shall not be reinstated within ten (10) days of such cancellation, except, in each case, as permitted in this Lease. (d) Tenant shall attempt or there shall occur any Transfer of Tenant's interest in or with respect to this Lease except as otherwise permitted in this Lease. (e) Tenant shall fail to discharge or bond over any lien placed upon the Premises in violation of this Lease within thirty (30) days after Tenant becomes aware that any such lien or encumbrance has been filed against the Premises. (f) Tenant shall fail to execute any instrument of subordination or attornment or any estoppel certificate within the time periods set forth in Paragraph 27 and Paragraph 29, respectively, following Landlord's written request for the same. (g) Tenant shall breach any of the requirements of Paragraph 27 and such failure shall continue for a period of ten (10) business days or more after written notice from Landlord to Tenant, provided, however, that if the failure is such that cannot be cured within such ten (10) business day period, Tenant shall be deemed to have cured such default if Tenant has commenced such cure within said ten (10) business day period and has proceeded diligently to prosecute compliance therewith within a reasonable time thereafter. (h) Tenant shall fail to comply with any provision of this Lease other than those specifically referred to in this Paragraph 20, and (except where a different notice and/or cure period is expressly provided in this Lease) such default shall continue for more than thirty (30) days (or such different notice and/or cure period, as applicable) after Landlord shall have given Tenant written notice of such default, provided, however, that if the thirty (30) day period referred to in this subsection is applicable and the cause for giving such notice involves the making of repairs or other matters reasonably requiring a longer period of time, Tenant shall be deemed to have cured such default if Tenant has commenced such cure within said thirty (30) day period and has proceeded diligently to prosecute compliance therewith within a reasonable time thereafter. 13 21. LANDLORD'S REMEDIES. (a) Upon each occurrence of an Event of Default and so long as such Event of Default shall be continuing and uncured by Tenant, Landlord may at any time thereafter at its election: terminate this Lease or Tenant's right of possession, (but Tenant shall remain liable as hereinafter provided) and/or pursue any other remedies at law or in equity. Upon the termination of this Lease or termination of Tenant's right of possession, it shall be lawful for Landlord, without formal demand or notice of any kind, to re-enter the Premises by summary dispossession proceedings or any other action or proceeding authorized by law and to remove Tenant and all persons and property therefrom. If Landlord re-enters the Premises, Landlord shall have the right to keep in place or remove and store, all of the furniture, fixtures and equipment at the Premises. (b) If Landlord terminates this Lease, Landlord may recover from Tenant the sum of: all Monthly Base Rent and all other amounts accrued hereunder to the date of such termination; the cost of reletting the whole or any part of the Premises, including without limitation brokerage fees and/or leasing commissions incurred by Landlord, and costs of removing and storing Tenant's or any other occupant's property, and all reasonable expenses incurred by Landlord in pursuing its remedies, including reasonable attorneys' fees and court costs; and an amount in cash equal to the then present value of the Monthly Base Rent and other amounts payable by Tenant under this Lease as would otherwise have been required to be paid by Tenant to Landlord during the period following the termination of this Lease measured from the date of such termination to the date the Premises is leased again. Such present value shall be calculated at a discount rate equal to the 90-day U.S. Treasury bill rate at the date of such termination. (c) If Landlord terminates Tenant's right of possession (but not this Lease), Landlord may, but shall be under no obligation to, relet the Premises for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant. For the purpose of such reletting Landlord is authorized to make any repairs, changes, alterations, or additions in or to the Premises as Landlord deems reasonably necessary or desirable. If the Premises are not relet, then Tenant shall pay to Landlord as damages a sum equal to the amount of the rental reserved in this Lease for such period or periods, plus the cost of recovering possession of the Premises (including attorneys' fees and costs of suit), the unpaid Base Rent and other amounts accrued hereunder at the time of repossession, and the costs incurred in any attempt by Landlord to relet the Premises. If the Premises are relet and a sufficient sum shall not be realized from such reletting, after first deducting therefrom, for retention by Landlord, the unpaid Base Rent and other amounts accrued hereunder at the time of reletting, to satisfy the rent provided for in this Lease to be paid, then Tenant shall immediately satisfy and pay any such deficiency. Any such payments due Landlord shall be made upon demand therefor from time to time and Tenant agrees that Landlord may file suit to recover any sums falling due from time to time. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect in writing to terminate this Lease for such previous breach. (d) Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this Lease by Landlord, whether by agreement or by operation of law. Any 14 law, usage, or custom to the contrary notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure of Landlord at any time to enforce its rights under this Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease or as having modified the same. Tenant and Landlord further agree that forbearance or waiver by Landlord to enforce its rights pursuant to this Lease or at law or in equity, shall not be a waiver of Landlord's right to enforce one or more of its rights in connection with any subsequent default. A receipt by Landlord of Rent or other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Landlord. To the greatest extent permitted by law, Tenant waives the service of notice of Landlord's intention to re-enter as provided for in any statute, or to institute legal proceedings to that end, and also waives all right of redemption in case Tenant shall be dispossessed by a judgment or by warrant of any court or judge. The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, are not restricted to their technical legal meanings. Any reletting of the Premises shall be on such terms and conditions as Landlord in its sole discretion may determine (including without limitation a term different than the remaining Lease Term, rental concessions, alterations and repair of the Premises, lease of less than the entire Premises to any tenant and leasing any or all other portions of the Project before reletting the Premises). Landlord shall not be liable, Tenant's obligations hereunder shall not be diminished because of, Landlord's failure to relet the Premises or collect rent due in respect of such reletting, provided Landlord shall make reasonable efforts to mitigate its damages. (e) Tenant hereby waives all right of redemption to which Tenant or any person under Tenant might be entitled by any applicable law. Tenant agrees that Landlord shall have no greater obligation to mitigate damages than the efforts made by Tenant itself to mitigate such damages prior to or after default by Tenant. 22. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not be in default hereunder unless Landlord fails to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant specifying such failure (unless such performance will, due to the nature of the obligation, require a period of time in excess of thirty (30) days, then after such period of time as is reasonably necessary). All obligations of Landlord hereunder shall be construed as covenants, not conditions; and Tenant may not terminate this Lease for breach of Landlord's obligations hereunder. Other than obligations that may arise under Paragraph 27 below, all obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises and not thereafter. The term "Landlord" in this Lease shall mean only the owner, for the time being of the Premises, and in the event of the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord thereafter accruing, but such obligations shall be binding during the Lease Term upon each new owner for the duration of such owner's ownership. Other than liabilities that may rise under Paragraph 27 below, (i) any liability of Landlord under this Lease or arising out of the relationship between Landlord and Tenant shall be limited solely to Landlord's interest in the Premises, (ii) no personal liability shall be asserted against 15 Landlord in connection with this Lease, and (iii) no recourse shall be had to any other property or assets of Landlord. The obligations of Landlord hereunder shall be binding upon any successor or assign of Landlord, provided that the obligations of Landlord under Paragraph 27 may be assigned only to a successor to all or substantially all of Landlord's business or assets. 23. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. 24. SUBORDINATION. (a) This Lease and Tenant's interest and rights hereunder are and shall be subject and subordinate at all times to the lien of any first mortgage, now existing or hereafter created on or against the Premises, and all amendments, restatements, renewals, modifications, consolidations, refinancing, assignments and extensions thereof, without the necessity of any further instrument or act on the part of Tenant. Tenant agrees, at the election of the holder of any such mortgage ("LANDLORD'S MORTGAGEE"), to attorn to any such holder. The provisions of this Paragraph 24 shall be self-operative and no further instrument shall be required to effect such subordination or attornment; however, Tenant agrees to execute, acknowledge and deliver such instruments, confirming such subordination and such instruments of attornment as shall be requested by any such holder within fifteen (15) days of such request. Tenant's obligation to furnish each such instrument requested hereunder in the time period provided is a material inducement for Landlord's execution of this Lease and any failure of tenant to timely deliver each instrument shall be deemed an Event of Default. Tenant hereby appoints Landlord attorney in fact for Tenant irrevocably (such power of attorney being coupled with an interest) to execute, acknowledge and deliver any such instrument and instruments for and in the name of the Tenant and to cause any such instrument to be recorded, such power of attorney will terminate upon the termination or earlier expiration of this Lease. Landlord shall use reasonable efforts to obtain from any current or future Landlord Mortgagee, a non-disturbance agreement in favor of Tenant. (b) Notwithstanding the foregoing, any such holder may at any time subordinate its mortgage to this Lease, without Tenant's consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution, delivery or recording and in that event such holder shall have the same rights with respect to this Lease as though this Lease had been executed prior to the execution, delivery and recording of such mortgage and had been assigned to such holder. The term "mortgage" whenever used in this Lease shall be deemed to include deeds of trust, security assignments and any other encumbrances, and any reference to the "holder" of a mortgage shall be deemed to include the beneficiary under a deed of trust. (c) Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt 16 requested, specifying the default in reasonable detail to any mortgage holder whose address has been given to Tenant, and affording such mortgage holder a reasonable opportunity to perform Landlord's obligations hereunder. Notwithstanding any such attornment or subordination of a mortgage to this Lease, the holder of any mortgage shall not be liable for any acts of any previous landlord, shall not be obligated to install any tenant improvements, and shall not be bound by any amendment to which it did not consent in writing nor any payment of Rent made more than one month in advance. 25. CONSTRUCTION LIENS. Tenant has no express or implied authority to create or place any lien or encumbrance of any kind upon, or in any manner to bind the interest of Landlord in, the Premises or to charge the Rentals payable hereunder for any claim in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction or repairs. Tenant covenants and agrees that it will pay or cause to be paid all sums legally due and payable by it on account of any labor performed or materials furnished in connection with any work performed on the Premises and that it will save and hold Landlord harmless from all loss, cost or expense based on or arising out of asserted claims or liens against the leasehold estate or against the interest of Landlord in the Premises or under this Lease. Tenant shall give Landlord immediate written notice of the placing of any lien or encumbrance against the Premises and cause such lien or encumbrance to be discharged within thirty (30) days of the filing or recording thereof; provided, however, Tenant may contest such liens or encumbrances as long as such contest prevents foreclosure of the lien or encumbrance and Tenant causes such lien or encumbrance to be bonded or insured over in a manner satisfactory to Landlord within such thirty (30) day period. 26. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten (10) business days after written request of Landlord, to execute and deliver to Landlord, or Landlord's designee, any estoppel certificate requested by Landlord, stating that this Lease is in full force and effect, the date to which Rent has been paid, that Landlord is not in default hereunder (or specifying in detail the nature of Landlord's default), the termination date of this Lease and such other matters pertaining to this Lease as may be requested by Landlord. Tenant's obligation to furnish each estoppel certificate in a timely fashion is a material inducement for Landlord's execution of this Lease and any failure of Tenant to timely deliver each estoppel certificate shall be deemed an Event of Default. No cure or grace period provided in this Lease shall apply to Tenant's obligation to timely deliver an estoppel certificate. Tenant hereby irrevocably appoints Landlord as its attorney in fact to execute on its behalf and in its name any such estoppel certificate if Tenant fails to execute and deliver the estoppel certificate within ten (10) business days after Landlord's written request thereof. 27. ENVIRONMENTAL LAWS. (a) Definitions. As used herein, the following terms shall have the following meanings: (i) "HAZARDOUS MATERIALS" shall mean any substances, materials or wastes, whether liquid, gaseous or solid, or any pollutant or contaminant, that is infectious, toxic, hazardous, explosive, corrosive, flammable or radioactive, including without limitation, petroleum, polychlorinated biphenyls, asbestos and asbestos containing 17 materials and urea formaldehyde, or that is regulated under, defined, listed or included in any Environmental Laws, including without limitation, CERCLA, RCRA, OSHA and ISRA. It is understood and agreed that the provisions contained in this lease shall be applicable notwithstanding whether any substance shall not have been deemed to be a hazardous material at the time of its use or Release (as defined below) but shall thereafter be deemed to be a Hazardous Material. (ii) "RELEASE" shall mean any intentional or unintentional release, discharge, burial, spill, leaking, pumping, pouring, emitting, emptying, injection, disposal or dumping into the Environment. (iii) "NOTICE" means any summons, citation, directive, order, claim, litigation, investigation, proceeding, judgment, letter or other communication, written or oral, actual or threatened, from the New Jersey Department of Environmental Protection ("NJDEP"), the United States Environmental Protection Agency ("USEPA"), the United States Occupational Safety and Health Administration ("OSHA") or other Federal, state or local agency or authority, or any other entity or any individual, concerning any act or omission resulting or which may result in the Releasing of Hazardous Materials into the waters or onto the lands of the State of New Jersey, or into waters outside the jurisdiction of the State of New Jersey, or into the Environment. (iv) "REMEDIAL ACTION" means any and all: (i) investigations of Environmental Conditions of any kind or nature whatsoever, including site assessments, site investigations, remedial investigations, soil, groundwater, surface water, sediment sampling or monitoring; or (ii) actions of any kind or nature whatsoever taken to remove, abate or remediate Environmental Conditions, including the use, implementation, application, installation, operation or maintenance of removal actions, in-situ or ex-situ remediation technologies applied to the surface or subsurface soils, encapsulation or stabilization of soils, excavation and off-site treatment or disposal of soils, systems for the recovery and/or treatment of groundwater or free product, Engineering Controls or Institutional Controls (as such terms are defined at N.J.A.C. 7:26E-1.8). (v) "ENVIRONMENT" means air, land, surface soil, subsurface soil, sediment, surface water, groundwater, wetlands, and all flora and fauna present therein or thereon. (vi) "ENVIRONMENTAL CLAIM" means any and all claims, demands, causes of action, suits, proceedings, administrative proceeding, orders, losses, judgments, decrees, debts, investigations, requests or demands for information, damages (whether to person, property or natural resource), liabilities, court costs, attorneys' fees and other expenses. (vii) "ENVIRONMENTAL CONDITIONS" means the Release of any Hazardous Material in, on or from the Premises or into the Environment. 18 (viii) "ENVIRONMENTAL LAWS" means any and all present or future federal, regional, state, county or local laws, statutes, ordinances, decisional law, rules, regulations, codes, orders, decrees, directives and judgments relating to public health or safety, pollution, damage to or protection of the Environment, Releases or threatened Releases of Hazardous Materials into the Environment or the use, manufacture, processing, distribution, treatment, storage, generation, disposal, transport or handling of Hazardous Materials, including but not limited to, the Federal Water Pollution Control Act, 33 U.S.C. Sections 1231-1387; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901-6991 ("RCRA"); the Clean Air Act, 42 U.S.C. Sections 7401-7642; the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Sections 9601-9675 ("CERCLA"); the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2629; the Federal Occupational Safety and Health Act, 29 U.S.C. Section 657 et seq. ("OSHA"); New Jersey Industrial Site Recovery Act ("ISRA"); the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"); the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.; the New Jersey Air Pollution Control Act, N.J.S.A. 26:2C-1 et seq.; and the New Jersey Environmental Rights Act, N.J.S.A. 2A:35A-1 et seq.; and any and all rules and regulations promulgated thereunder. For purposes of Environmental Laws, to the extent authorized by law, Tenant is and shall be deemed to be the responsible party, including without limitation, the "owner" and "operator" of Tenant's "facility" and the "owner" of all Hazardous Materials brought on the Premises by Tenant, or Tenant's Representatives, and the wastes, by-products, or residues generated, resulting, or produced therefrom. (ix) "REMEDIATION STANDARDS" shall have the meaning provided for under N.J.A.C. 7:26E-18. (x) "LANDLORD ISRA COMPLIANCE PROCEEDING" shall mean the administrative proceeding commenced by Landlord in September 2003 pursuant to ISRA with respect to the Premises, which proceeding has been designated ISRA Case No. E2003400. (b) Tenant shall not permit or cause any party to bring any Hazardous Material upon the Premises or transport, store, use, generate, manufacture, or dispose any Hazardous Material in, on or from the Premises other than in strict compliance with all Environmental Laws and all requirements of this Lease. Tenant shall not Release, permit a Release, or cause any party to Release Hazardous Materials, other than in strict compliance with all Environmental Laws. Tenant shall complete and certify to disclosure statements as requested by Landlord from time to time, but not less than once each calendar quarter, relating to Tenant's transportation, storage, use, generation, manufacture, or Release of Hazardous Materials in, on, or from the Premises, and/or Environment, and Tenant shall promptly deliver to Landlord a copy of any notice of violation relating to the Premises of any Environmental Law. (c) Tenant's Standard Industrial Classification Number is as set forth above. Tenant will immediately notify Landlord of any changes in this number during the Lease Term. 19 Tenant, at its own cost and expense, agrees to comply with all applicable present and future Environmental Laws, rules and regulations of the Federal, State, County and Municipal governments and of all other governmental authorities having or claiming jurisdiction over the Premises or appurtenances thereto, or any part thereof, which are applicable to the Premises and/or the conduct of business thereon, including but not limited to ISRA. Further, Tenant agrees to make submissions to and provide any information required by all governmental authorities requesting same pursuant to Tenant's obligations under this Paragraph 27. (d) Tenant, at its sole cost and expense, shall remove all Hazardous Materials stored on the Premises, or Released by Tenant or, Tenant's Representatives, in a manner and to a level that complies with all Environmental Laws and does not limit the use of the Premises for industrial uses permitted by law. Tenant shall perform such work at any time during the period of the Lease upon written request by Landlord or, in the absence of a specific request by Landlord, before Tenant's right to possession of the Premises terminates or expires. If Tenant fails to perform such work within the reasonable time period specified by Landlord or before Tenant's right to possession terminates or expires (whichever is earlier), Landlord may at its discretion, and without waiving any other remedy available under this Lease or at law or equity (including without limitation an action to compel Tenant to perform such work), perform such work at Tenant's cost. Tenant shall pay all costs incurred by Landlord in performing such work within thirty (30) days after Landlord's request therefor. Such work performed by Landlord is on behalf of Tenant and Tenant remains the owner, generator, operator, transporter, and/or arranger of the Hazardous Materials for purposes of Environmental Laws. Tenant agrees not to enter into any agreement with any person, including without limitation any governmental authority, regarding the removal of Hazardous Materials that have been disposed of or otherwise Released without the written approval of the Landlord, which such approval shall not be unreasonably withheld. (e) In the event that Landlord shall have received a Negative Declaration or No Further Action and Covenant Not to Sue, as defined by ISRA, or such other written determination by the NJDEP that the Landlord ISRA Compliance Proceeding has been completed to the satisfaction of the NJDEP (the "Landlord ISRA Clearance"), which such Landlord ISRA Clearance shall be obtained at Landlord's sole cost and expense, then prior to (i) closing operations or transferring ownership or operations of Tenant (as defined under ISRA) at the Premises, (ii) the expiration or sooner termination of the Lease, (iii) any assignment of the lease or any subletting of any portion of the Premises, or (iv) any other event caused by Tenant that may trigger ISRA (a "Tenant Triggering Event"), Tenant shall at its own cost and expense, comply with all requirements of ISRA pertaining thereto. Should the NJDEP determine in connection with any ISRA compliance proceeding that a clean-up plan be prepared and that Remedial Action be undertaken to address any Releases of Hazardous Materials, that are caused by Tenant or Tenant's Representatives, the Tenant shall, at Tenant's own expense, prepare and submit the required plans and financial assurances, and carry out the approved plans. Landlord shall cooperate with Tenant to supply such information and to execute such applications and/or affidavits as Tenant may require in order to satisfy its obligations hereunder. 20 (f) In the event the Landlord ISRA Clearance has not been obtained at the time of a Tenant Triggering Event and neither Tenant nor Tenant's Representatives have caused a Release, Landlord shall, at its sole cost and expense, prepare and submit all appropriate notices, plans, financial assurances, applications or reports with the NJDEP and carry out the approved plans, including, without limitation, all Remedial Actions and other requirements of ISRA. Landlord shall be the Ordered Party under the provisions of any Remediation Agreement required by ISRA under this Paragraph 27(f). Tenant shall cooperate with Landlord to supply such information and to execute such applications and/or affidavits as Landlord may require in order to satisfy its obligations hereunder. Nothing herein shall be construed as to mitigate Tenant's obligations under Paragraph 27(b), Paragraph 27(d) and Paragraph 27(g). (g) In the event that the NJDEP shall determine, in connection with an ISRA compliance proceeding undertaken by Landlord or Tenant as set forth above, that a clean-up plan be prepared and that a Remedial Action be undertaken to address any Releases of Hazardous Materials that are caused by Tenant or Tenant's Representatives, the Tenant shall, at Tenant's own expense, prepare and submit the required plans and financial assurances and carry out the approved plan, including without limitation all Remedial Actions and other requirements of ISRA in order to remediate the Releases caused by Tenant or Tenant's Representatives. Nothing herein shall be construed as to mitigate Landlord's obligation to perform any Remedial Actions required as a result of a Release by Landlord of any Hazardous Materials. (h) In the event of Tenant's failure to comply in full with the foregoing provisions, Landlord may, at its option perform any and all of Tenant's obligations as aforesaid and all reasonable costs and expenses incurred by Landlord in the exercise of this right shall be deemed to be Additional Rent payable on demand and with interest until payment. Such costs and expenses include but are not limited to state agency fees, engineering fees, cleanup costs, remediation funding sources, filing fees and suretyship expenses. (i) At Tenant's sole cost and expense, Tenant shall promptly provide Landlord with copies of all correspondence, reports, notices, orders, findings, declarations, laboratory data, and other materials pertinent to Tenant's compliance with and the NJDEP's requirements under applicable Environmental Laws, and the New Jersey Technical Requirements for Site Remediation, N.J.A.C. 7:26E-1.1, as they are issued or received by the Tenant. (i) Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all losses (including, without limitation, diminution in value of the Premises), claims, demands, actions, suits, damages (excluding punitive damages from the indemnification to the extent that such damages result from acts or omissions of Landlord), expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup expenses), and reasonable costs (including, without limitation, actual attorneys' fees, consultant fees or expert fees) (all of the foregoing collectively referred to as "Losses") which are brought or recoverable against, or suffered or incurred by Landlord as a result of any Release of Hazardous Materials after the Commencement Date or any breach of the requirements under this Paragraph 27 by Tenant, or Tenant's Representatives, regardless of 21 whether Tenant had knowledge of such noncompliance. The obligations of Tenant under this Paragraph 27 shall survive any termination of this Lease. (k) Landlord may, at its sole cost and expense, have an environmental consultant appointed to conduct an environmental survey and inspection quarterly (or more often, if required by Landlord) so that Landlord may monitor Tenant's compliance with its obligations under this Paragraph 27. Tenant shall have the right to designate an alternate consultant to complete the quarterly (or more often, if required by Landlord) environmental survey, provided, however, that Landlord must in writing approve said consultant, which approval shall not be unreasonably withheld. Access to the Premises shall be granted to Landlord upon Landlord's prior notice to Tenant and at such times so as to minimize, so far as may be reasonable under the circumstances, any disturbance to Tenant's operations. Landlord's receipt of or satisfaction with any environmental assessment in no way waives any rights that Landlord holds against Tenant. Tenant shall promptly notify Landlord of any communication or report that Tenant makes to any governmental authority regarding any possible violation of Environmental Laws or Release or threat of Release of any Hazardous Materials in, onto or from the Premises, or into the Environment. Tenant shall, within five (5) days of receipt thereof, provide Landlord with a copy of any documents or correspondence received from any governmental agency or other party relating to a possible violation of Environmental Laws or claim or liability associated with the Release or threat of Release of any Hazardous Materials in, onto or from the Premises, or into the Environment. (l) If applicable, prior to termination of this Lease it shall be the obligation of Tenant to deactivate any identification number, permit, license, etc., issued by the USEPA, the NJDEP or any other Federal, state or local entity dealing with Tenant's generation, treatment, storage or disposal of Hazardous Materials or solid waste and comply with any concomitant notification requirements pursuant to Environmental Laws, or in any other applicable Federal, state or local law, rule or regulation dealing with Hazardous Materials, solid waste and/or environmental protection. (m) In the event there shall be filed a lien by the NJDEP or the USEPA against the Premises arising out of a Release of Hazardous Materials caused by Tenant or Tenant's Representatives pursuant to the provisions of the Spill Act or CERCLA, respectively, Tenant shall immediately either: (i) pay the claim and remove the lien from the Premises; or (ii) furnish a bond, cash receipt or other security reasonably satisfactory to the Landlord sufficient to discharge the claim out of which the lien arises. (n) In addition to all other rights and remedies available to Landlord under this Lease or otherwise, Landlord may, in the event of a breach of the requirements of this Paragraph 27 that is not cured within thirty (30) days following notice of such breach by Landlord, require Tenant to provide financial assurance (such as insurance, escrow of funds or third party guarantee) in an amount no greater than the estimated cost to cure the breach. The requirements of this Paragraph 27 are in addition to and not in lieu of any other provision in the Lease. 22 (o) Notwithstanding anything to the contrary in this Lease, Tenant shall not be liable to Landlord under this Lease and Landlord shall indemnify, defend and hold harmless Tenant from and against any Losses arising from any Release of Hazardous Materials or violation of Environmental Laws, to the extent such Environmental Laws had been violated and/or Hazardous Materials existed or were Released prior to the Commencement Date, or any failure of Landlord to satisfy its obligations under this Paragraph 27. Tenant shall cooperate with Landlord and any governmental authorities in all respects in connection with any Remedial Action, including, without limitation, executing any and all required documentation necessary and/or desired by Landlord or such governmental authorities, at no cost to Tenant. 28. RULES AND REGULATIONS. Tenant shall, at all times during the Lease Term and any extension thereof, comply with all reasonable rules and regulations at any time or from time to time established by Landlord covering use of the Premises. The current rules and regulations are attached hereto. In the event of any conflict between said rules and regulations and other provisions of this Lease, the other terms and provisions of this Lease shall control. Landlord shall not have any liability or obligation for the breach of any rules or regulations by other tenants in the Premises. 29. SECURITY SERVICES. Tenant acknowledges and agrees that Landlord is not providing any security services with respect to the Premises and that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises. 30. FORCE MAJEURE. Landlord shall not be held responsible for delays in the performance of its obligations hereunder when caused by strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, governmental regulations, governmental controls, delay in issuance of permits, enemy or hostile governmental action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Landlord ("FORCE MAJEURE"). 31. ENTIRE AGREEMENT. This Lease, together with (i) Sections 5.2, 6.4 and 7.1 of the Asset Purchase Agreement, (ii) Section 6.1(e) of the Asset Purchase Agreement with respect to the indemnification of Buyer (as referred to therein) for environmental liabilities as set forth in Section 1.3(a)(i) and (x) thereof, and (iii) Section 6.2(d) of the Asset Purchase Agreement with respect to indemnification of Seller and Parent (as referred to therein) for environmental liabilities as set forth in Section 1.3(b)(vii) thereof, constitute the complete and entire agreement of Landlord and Tenant with respect to the subject matter hereof. No representations, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not contained herein, and any prior agreements, promises, negotiations, or representations are superseded by this Lease. This Lease may not be amended except by an instrument in writing signed by both parties hereto. 32. SEVERABILITY. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, then and in that event, it is the intention of the 23 parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable. 33. BROKERS. Tenant represents and warrants that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other person brought about this transaction, other than the broker, if any, set forth on the first or second pages of this Lease, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction. 34. MISCELLANEOUS. (a) Any payments or charges due from Tenant to Landlord hereunder shall be considered Rent for all purposes of this Lease. (b) If and when included within the term "Tenant," as used in this instrument, there is more than one person, firm or corporation, each shall be jointly and severally liable for the obligations of Tenant. (c) All notices required or permitted to be given under this Lease shall be in writing and shall be sent by registered or certified mail, return receipt requested, or by a reputable national overnight courier service, postage prepaid, or by hand delivery and, if to Tenant, addressed to Tenant at the address for Tenant noted on the first page of this Lease, and if to Landlord, addressed to Landlord at the address for Landlord noted on the first page of this Lease. Either party may by notice given aforesaid change its address for all subsequent notices. Except where otherwise expressly provided to the contrary, notice shall be deemed given upon delivery. (d) At Landlord's request from time to time Tenant shall furnish Landlord with true and complete copies of its most recent annual financial statements prepared by Tenant or Tenant's accountants and any other financial information or summaries that Tenant typically provides to its lenders or shareholders. Such annual statements shall be certified by the chief executive officer and majority shareholder of the Tenant. Landlord shall hold such financial statements and information in confidence, and shall not disclose the same except: (i) to Landlord's lenders or potential lenders, (ii) to potential purchasers of all or a portion of the Premises, or (iii) if disclosure is required by any judicial or administrative order or ruling. (e) Upon full execution by the parties hereto, Landlord or Tenant may prepare, and upon request Landlord or Tenant, as applicable, will execute, a memorandum of lease for recording by the requesting party in the applicable public records. The form of such memorandum shall be reasonable acceptable to Landlord and Tenant. 24 (f) Each party acknowledges that it has had the opportunity to consult counsel with respect to this Lease, and therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Lease or any exhibits or amendments hereto. (g) The submission by Landlord to Tenant of this Lease shall have no binding force or effect, shall not constitute an option for the leasing of the Premises, nor confer any right or impose any obligations upon either party until execution of this Lease by both parties. (h) Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease. (i) Any amount not paid by Tenant within fifteen (15) business days after its due date in accordance with the terms of this Lease shall bear interest from such due date until paid in full at the lesser of the highest rate permitted by applicable law or three percent (3%) per year. It is expressly the intent of Landlord and Tenant at all times to comply with applicable law governing the maximum rate or amount of any interest payable on or in connection with this Lease. If applicable law is ever judicially interpreted so as to render usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or received with respect to this Lease, then it is Landlord's and Tenant's express intent that all excess amounts theretofore collected by Landlord be credited on the applicable obligation (or, if the obligation has been or would thereby be paid in full, refunded to Tenant), and the provisions of this Lease immediately shall be deemed reformed and the amounts thereafter collectible hereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder. (j) Construction and interpretation of this Lease shall be governed by the laws of the state of New Jersey, excluding any principles of conflicts of laws. (k) Time is of the essence as to the performance of Tenant's obligations under this Lease. (l) All exhibits and addenda attached hereto are hereby incorporated into this Lease and made a part hereof. In the event of any conflict between such exhibits or addenda (other than the rules and regulations) and the terms of this Lease, such exhibits or addenda shall control. In the event of a conflict between the rules and regulations attached hereto and the terms of this Lease, the terms of this Lease shall control. (m) If either party should prevail in any litigation instituted by or against the other related to this Lease, the prevailing party, as determined by the court, shall receive from the non-prevailing party all costs and reasonable attorneys' fees (payable at standard hourly rates) incurred in such litigation, including costs on appeal, as determined by the court. 25 35. NO WAIVER OF DISTRAINT. Landlord retains any lien right it might have in the machinery, fixtures and other property ("EQUIPMENT") of Tenant, by virtue of Landlord's common law (if any) and statutory right of distraint because of failure to pay Monthly Basic Rent and Additional Rent; provided that Landlord shall negotiate a mutually agreeable subordination agreement with any lender to Tenant, or any lessor of the Equipment (such lender or lessor referred to as a "SECURED PARTY"), pursuant to which Landlord shall subordinate its statutory lien to such Equipment in favor of such Secured Party. 26 IN WITNESS WHEREOF, the parties have caused this Lease to be signed by their duly authorized officers or general manager as of the date and year first above written. TENANT: EVERLAST COATINGS INC. By: /s/ John R. Willey ------------------ John R. Willey President LANDLORD: SL INDUSTRIES, INC. By: /s/ David R. Nuzzo ------------------ David R. Nuzzo Vice President 27 EXHIBIT "A" DESCRIPTION OF PROPERTY PROPERTY LOCATION: 1416-1424 South 6th Street Camden, New Jersey Block 350 Lot 5 OWNERSHIP: SL Industries, Inc. PROPERTY TYPE: Industrial / Warehouse PROPERTY SIZE: 100 x 139 or 13,900 sq.ft. +/- BUILDING SIZE: 9,955 sq.ft. +/- BUILT: 1950 ZONING: I-2 Industrial (see Map in Addendum) FLOOD ZONE: B (100 yr. to 500 yr. Flood) (See Map) 28 EXHIBIT B 29 -----END PRIVACY-ENHANCED MESSAGE-----