HomeMy WebLinkAbout10-2811MECHANICSBURG 2007, L.P.
83 South Street
Morristown, NJ 07960
Plaintiff,
V.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY,
PENNSYLVANIA
: NO. 10 - 6161) CIVIL TEP-M
SMART BOOK SOLUTIONS, INC. CIVIL ACTION - LAW
1225 South Market Street 7 c?
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Mechanicsburg, PA 17055'' ?-
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Defendant.
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NOTICE TO DEFEND
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Cumberland County Bar Association
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Carlisle, PA 17013
Telephone: (717) 249-3166
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MECHANICSBURG 2007, L.P.
83 South Street
Morristown, NJ 07960
Plaintiff,
V.
SMART BOOK SOLUTIONS, INC.
1225 South Market Street
Mechanicsburg, PA 17055
Defendant
AVISO
CIVIL
CIVIL ACTION - LAW
USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas
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pr6ximos veinte (20) dias despuds de la notificaci6n de esta Demanda y Aviso radicando
personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por
escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le
advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede
proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda o cualquier
otra reclamaci6n o remedio solicitado por el demandante puede ser dictado en contra suya por la
Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos
importantes para usted.
USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI
USTED NO TIENE UN ABOGADO, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA
OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN
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QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE
OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE
CUALIFICAN.
Cumberland County Bar Association
32 South Bedford Street
Carlisle, PA 17013
Telephone: (717) 249-3166
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY,
PENNSYLVANIA
: NO.
PEPPER HAMILTON LLP
By: Michael S. Hino
Attorney I.D. No. 62406
Frederick Alcaro
Attorney I.D. No. 91555
100 Market Street, Suite 200
P.O. Box 1181
Harrisburg, PA 17108-1181
(717) 255-1155
MECHANICSBURG 2007, L.P.
83 South Street
Morristown, NJ 07960
Plaintiff,
V.
SMART BOOK SOLUTIONS, INC.
1225 South Market Street
Mechanicsburg, PA 17055
Defendant
Attorneys for Plaintiff
MECHANICSBURG 2007, L.P.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY,
PENNSYLVANIA
NO. CIVIL
CIVIL ACTION - LAW
COMPLAINT
Plaintiff, Mechanicsburg 2007, L.P., by its attorneys, Pepper Hamilton LLP, files
this Complaint and avers the following:
THE PARTIES
1. Plaintiff, Mechanicsburg 2007, L.P., (hereinafter "Mechanicsburg"), is a
limited partnership organized and existing under the laws of the Commonwealth of Pennsylvania
with its principal place of business at 83 South Street, Morristown, New Jersey.
2. Upon information and belief, defendant, Smart Book Solutions, Inc.
("Smart Book"), is a corporation organized and existing under the laws of the State of Delaware
with its principal place of business at 1225 South Market Street, Mechanicsburg, Pennsylvania
17055.
JURISDICTION AND VENUE
3. This Court has jurisdiction pursuant to 42 Pa. C. S. § 931(a).
4. Cumberland County is the proper venue for this action because it is the
county in which transactions and occurrences took place out of which the cause of action arises.
FACTUAL BACKGROUND
On December 10, 2008, Mechanicsburg and Smart Book entered into a
Lease Agreement ("Lease") for commercial space located at 1225 South Market Street,
Mechanicsburg, Pennsylvania (the "Premises"). A copy of the Lease is attached hereto as
Exhibit "A."
6. Pursuant to the Lease, Smart Book was required to make monthly rental
payments to Mechanicsburg for its use of the Premises. See Lease, Exhibit "A," T¶ 1 and 2, at 1.
7. Smart Book, however, has failed to make any Lease payments to
Mechanicsburg since September 2009. In addition, Smart Book vacated the Premises in March
2010.
8. Smart Book's failure to make payments to Mechanicsburg constitutes an
Event of Default under the Lease. See Lease, Exhibit "A," ¶ 4.3, at 3.
9. Pursuant to paragraph 20.2(b) of the Lease, Mechanicsburg is entitled to
recover "as and for liquidated damages" the following:
(a) all Basic Rent, Additional Rent and other amounts payable
by Tenant hereunder then due or accrued and unpaid; and
(b) for loss of the bargain, an amount equal to the aggregate of
all unpaid Basic Rent and Additional Rent which would
have been payable if this Lease had not been terminated
prior to the end of the Term then in effect, discounted to its
then present value in accordance with accepted financial
practice using a rate equal to six percent (6%) per annum;
and
(c) all other damages and expenses (including attorney's fees
-2-
and expenses), which Landlord shall have sustained by
reason of the breach of any provision of this Lease.
Lease, Exhibit "A," ¶ 20.2 (a-c), at 20-21.
10. As of May 1, 2010, Smart Book owes Mechanicsburg $68,362.96 in
unpaid rent pursuant to the Lease.
11. In addition, pursuant to paragraph 20.2(b) of the Lease, Mechanicsburg is
entitled to damages as of May 1, 2010 in the amount of $275,865.27.
12. Paragraph 20.7 of the Lease states that if any action is commenced to
enforce the terms and conditions of the Lease, "the defaulting party shall pay to the non-
defaulting party all reasonable fees, costs and other expenses incurred by the non-defaulting
party in connection therewith, including reasonable attorneys' fees and expenses," together with
all other reasonable out-of-pocket costs and fees incurred by it in attempting to enforce the other
party's obligations and/or to protect its rights under" the Lease. Lease, Exhibit "A," ¶ 20.7, at
21.
COUNTI
BREACH OF CONTRACT
13. Mechanicsburg incorporates by reference paragraphs 1 through 12 above,
as if fully set forth herein.
14. Pursuant to the Lease, Smart Book agreed, among other things, to make
monthly rental payments to Mechanicsburg.
15. Smart Book has breached the Lease by, among other things, failing to
make monthly rental payments to Mechanicsburg and by vacating the Premises.
16. All conditions precedent to Mechanicsburg's right to recovery from Smart
Book have occurred.
-3-
17. Smart Book has failed to pay Mechanicsburg in accordance with the Lease
and is in default under the Lease.
18. As a direct and proximate result of Smart Book's breach of contract,
Mechanicsburg has been damaged in an amount in excess of $344,228.23.
19. Pursuant to the terms and condition of the Lease, Mechanicsburg is
entitled to recover interest on all unpaid amounts, as well as attorneys' fees, costs and expenses
incurred in this action.
WHEREFORE, plaintiff, Mechanicsburg 2007, L.P., demands that judgment be
entered in its favor and against defendant, Smart Book Solutions, Inc., in an amount in excess of
$344,228.23 plus interest, attorneys' fees, costs and expenses and such other and further relief as
this Court deems just and appropriate.
Michael S. Hino
Attorney I.D. No. 62406
?`ederick Alcaro
?/ Attorney I.D. No. 91555
PEPPER HAMILTON LLP
100 Market Street, Suite 200
P.O. Box 1181
Harrisburg, PA 17108-1181
(717) 255-1155
Attorneys for Plaintiff
MECHANICSBURG 2007, L.P.
Dated: April 23, 2010
-4-
?xk?b;? ?
LEASE AGREEMENT
BETWEEN
MECHANICSBURG 2007, LP,
a Pennsylvania Limited Partnership,
Landlord,
-AND-
SMART BOOK SOLUTIONS, INC.,
a Delaware Corporation,
Tenant.
DATED: December 0, 2008
Prepared by:
Robert A. Klausner, Esq.
Day Pitney LLP
200 Campus Drive
Florham Park, New Jersey 07932
BASIC LEASE PROVISIONS
In addition to other terms elsewhere defined in this Lease the following terms whenever used in
this Lease should have only the meanings set forth these Basic Lease Provisions, unless such meanings
are expressly modified, limited or expanded elsewhere herein.
(a) and: Tax Map Parcel No. 42-10-0646-006.
(b) Building: 1225 South Market Street, Mechanicsburg, Pennsylvania.
(c) Premises: 30,730 rentable square feet of space in the Building being a portion of "Area
C".
(d) Term: From the Commencement Date until the Termination Date.
(e) Estimated Commencement Date: December 15, 2008.
(f) Termination Date: March 15, 2012, or such earlier date upon which the Term may expire
or be terminated.
(g) Basic Rent:
Lease Years
Commencement Date until the
Rent Commencement Date:
Rent Commencement Date
through the day immediately
preceding the first (I ")
anniversary of the Rent
Commencement Date:
From the first (151) anniversary
of the Rent Commencement
Date through the day
immediately preceding the
second (2"d) anniversary of the
Rent Commencement Date:
From the second (2"d)
anniversary of the Rent
Commencement Date through
the Termination Date:
Annual Monthly PSF
$0 $0 $0
$104,482.00 $8,706.33 $3.40
$106,633.10 $8,886.09 $3.47
$108,784.20 $9,065.35 $3.54
(h) Rent Commencement Date: Earlier of (i) December 15, 2008, or (ii) the date Tenant
commences operation in the Premises.
(i) Rentable Size of the Building: 596,000 rentable square feet
I
(i) Rentable Size of the Premises: 30,730 rentable square feet
0) Tenant's Share: 5.16%
(k) Parking Spaces: ten (10) unassigned parking spaces.
(1) Security: $8,706.33 due and payable upon signing of this Lease.
(m) Permitted Use: Manufacturing, assembly and storage of packaging products, together
with accessory executive and administrative offices.
(n) Broker: CB Richard Ellis, Inc.
(o) Incorporation of Schedules, Exhibits and Addenda: Schedules A, B, -C and D and
Addendum I annexed hereto are incorporated into this Lease.
(p) Standard Industrial Classification. Tenant hereby represents and warrants to Landlord
that Tenant's operations at the Premises have the following North American Industrial Classification
number: S 1.
(q) State Laws: This Lease shall be governed by and construed in accordance with the laws
of the State of Pennsylvania.
(r) Landlord's Notice Address: Mechanicsburg 2007, LP
83 South Street
Morristown, New Jersey 07960
Attn: Mark S. Rosen
(s) Tenant's Notice Address. At the Premises
Attn: Jim Soule
ii
TABLE OF CONTENTS
Page
1. BASIC LEASE PROVISIONS AND DEFINITIONS ........................................................................1
2. DEMISE, TERM ...................................................................................................................................1
3. BASIC RENT; ADDITIONAL RENT ................................................................................................ 1
4. OPERATING EXPENSES; REAL ESTATE TAXES ....................................................................... 2
5. UTILITIES .............................................................................................................................................4
6. DELIVERY OF PREMISES ........................................................................................ 5
........................
7. MAINTENANCE, ALTERATIONS AND ADDITIONS; REMOVAL OF TRADE
FIXTURES .......................
8. USE OF DEMISED PREMISES ...........................................................................................................7
9. LANDLORD'S SERVICES ...............................................................................................................8
10. COMPLIANCE WITH REQUIREMENTS ........................................... ................................ 8
IL COMPLIANCE WITH ENVIRONMENTAL LAWS ....................... ................................... 8
12. DISCHARGE OF LIENS ..................... 10
..............................................................................................
13. PERMITTED CONTESTS .................................................................................................................10
14. INSURANCE; INDEMNIFICATION ...............................................................................................10
15. ESTOPPEL CERTIFICATES ............................................................................................................ 14
16. ASSIGNMENT AND SUBLETTING .................................................................. .........14
17. CASUALTY ........................
18. CONDEMNATION ..........................
19. EVENTS OF DEFAULT ....................................................................................................................19
20. CONDITIONAL LIMITATIONS; REMEDIES ...............................................................................21
21. ACCESS; RESERVATION OF EASEMENTS ................................................................................23
22. ACCORD AND SATISFACTION ....................................................................................................24
23. SUBORDINATION ............................................................................................................................24
24. TENANT'S REMOVAL ....................................................................................................................25
25. BROKERS ...........................................................................................................................................25
26. NOTICES .............................................................................................................................................25
27. NATURE OF LANDLORD'S OBLIGATIONS ..............................................................................26
28. SECURITY DEPOSIT ............................................................................. 26
...........................................
29. MISCELLANEOUS ........................... .. 27
...............................................................................................
30. USA PATRIOT ACT ..........................................................................................................................29
31. RIGHT OF FIRST REFUSAL ............................. ..............................29
................................................
32. EXTENSION OPTIONS ........................................... 29
.........................................................................
III
LEASE AGREEMENT
LEASE AGREEMENT (this "Lease"), made as of DecemberLq 2008, between MECHANICSBURG
2007, LP, a Pennsylvania Limited Partnership (the "Landlord'), and SMART BOOK SOLUTIONS,
INC, a Delaware corporation (the "Tenant").
BASIC LEASE PROVISIONS AND DEFINITIONS.
1.1 Basic Lease Provisions. The "Basic Lease Provisions" set forth on Page i of this Lease
are incorporated into this Lease by reference.
1.2 Other Definitions. Other defined terms used in this Lease are set forth on Addendum 1.
2. DEMISE, TERM.
2.1 Demise of Premises. Landlord hereby leases and demises to Tenant, and Tenant hereby
hires and takes from Landlord, upon and subject to the covenants, agreements, terms, provisions and
conditions of this Lease, the Premises for the Term.
2.2 Term.
(a) The term (the "Term") of this Lease shall commence on the Commencement
Date and shall end on the Termination Date.
(b) The "Commencement Date" will be the date Landlord delivers the Premises to
Tenant free and clear of all occupants, in broom clean, "as is" condition.
(c) Tenant acknowledges that neither Landlord nor any employee, agent or
representative of Landlord has made any express or implied representations or warranties with respect to
the physical condition of the Building or the Premises, the fitness or quality thereof or any other matter or
thing whatsoever with respect to the Building or the Premises or any portion thereof, and that Tenant is
not relying upon any such representation or warranty in entering into this Lease. Tenant has inspected the
Building and the Premises and is thoroughly acquainted with their respective condition and agrees to take
the same "AS IS". Tenant acknowledges that Landlord will not be performing any work with respect to
the Premises.
2_3 Commencement Date A reement. When the Commencement Date occurs, Landlord and
Tenant shall enter into an agreement in the form annexed hereto as Schedule C memorializing the
Commencement Date and Termination Date of this Lease.
BASIC RENT, ADDITIONAL RENT.
3.1 Basic Rent. Tenant shall pay rent ("Basic Rent") to Landlord during the Term, in the
amounts specified in the Basic Lease Provisions, in lawful money of the United States of America. The
Basic Rent shall be payable in equal monthly installments, in advance, on the Basic Rent Payment Dates,
commencing on the Commencement Date, except that Tenant shall pay the first installment of Basic Rent
upon Tenant's execution and delivery of this Lease. Tenant shall pay the Basic Rent and Additional Rent
herein reserved promptly as and when the same shall become due and payable.
3.2 Additional Rent. In addition to the Basic Rent, Tenant will pay and discharge when due,
as additional rent ("Additional Rent"), all other sums, amounts, liabilities and obligations which Tenant
herein agrees to pay to Landlord, together with all interest, charges, penalties, costs, fees and expenses
which may be owed by Tenant, or otherwise added thereto, pursuant to the terms of this Lease; all of
which shall be deemed "Additional Rent" regardless of whether it is specifically referred to as Additional
Rent in this Lease.
3.3 Late Charge. If any installment of Basic Rent or Additional Rent is not paid when due,
Tenant shall pay to Landlord, on demand, a late charge equal to five percent (5%) of the amount unpaid.
The late charge is not intended as a penalty but is intended to compensate Landlord for the extra expense
it will incur to send out late notices and handle other matters resulting from the late payment. In addition,
any installment or installments of Basic Rent or Additional Rent accruing hereunder which are not paid
within ten (10) days after the date when due shall bear interest at the lesser of. (i) a rate of six percent
(6%) over the Prime Rate, or (ii) the highest legal rate permitted by law. Any interest due as set forth in
the preceding sentence shall be calculated from the due date of the delinquent payment until the date of
payment, which interest shall be payable upon demand by Landlord.
3.4 Prorating Rent. If any Lease Year shall consist of a period of less than twelve (12) full
calendar months, payments of Basic Rent, Taxes and Operating Expenses shall be prorated on the basis of
a thirty (30) day month or 360-day year, unless otherwise provided. Furthermore, if the Commencement
Date does not fall on a Basic Rent Payment Date, the Basic Rent and Tenant's Share of Taxes and
Operating Expenses payable hereunder shall be prorated for such partial month, and shall be paid to
Landlord on the Commencement Date.
3.5 No Abatement or et-off. This is a net lease and, except as herein provided, Tenant
hereby covenants and agrees to pay to Landlord, at Landlord's address for notices hereunder, or such
other place as Landlord may from time to time designate, without any offset, set-off, counterclaim,
deduction, defense, abatement, suspension, deferment or diminution of any kind (i) the Basic Rent,
without notice or demand, (ii) Additional Rent and (iii) all other sums payable by Tenant hereunder.
Except as otherwise expressly provided herein, this Lease shall not terminate, nor shall Tenant have any
right to terminate or avoid this Lease or be entitled to the abatement of any Basic Rent, Additional Rent or
other sums payable hereunder or any reduction thereof, nor shall the obligations and liabilities of Tenant
hereunder be in any way affected for any reason. The obligations of Tenant hereunder shall be separate
and independent covenants and agreements.
3.6 Invoices. If Landlord issues monthly or other periodic rent billing statements to Tenant,
the issuance or non-issuance of such billings and statements shall not affect Tenant's obligation to pay
Basic Rent or the Additional Rent set forth in Section 4.3 of this Lease, all of which are due and payable
on the Basic Rent Payment Dates.
4. OPERATING EXPENSES, REAL ESTATE TAXES.
4.1 Operating Expenses and Taxes. Tenant shall pay to Landlord (i) Tenant's Share of
Operating Expenses, and (ii) Tenant's Share of Taxes, for each Lease Year during the Term.
4.2 Landlord's Statements. On or after the Commencement Date, and as soon as practical
following each succeeding anniversary of the Commencement Date during the Term, Landlord shall
determine or estimate (i) Operating Expenses for the Lease Year in question (the "Estimated O rating
Expenses") and shall submit such information to Tenant in a written statement (the "Expense Statement"),
and (ii) Taxes for the Lease Year in question (the "Projected Taxes") and shall submit such information to
Tenant in a written statement (the "Tax Statement"). Landlord will use reasonable efforts to issue each
Statement within ninety (90) days following the end of each Lease Year. Landlord's failure to render any
Statement with respect to any Lease Year shall not prejudice Landlord's right to render a Statement with
respect thereto or with respect to any subsequent Lease Year, as the case may be, nor shall the rendering
of a Statement prejudice Landlord's right thereafter to render a corrected Statement for that Lease Year.
4.3 Monthly Payment. Commencing on the first Basic Rent Payment Date following the
submission of any Expense Statement and/or Tax Statement, as applicable, and continuing thereafter on
each successive Basic Rent Payment Date until Landlord renders the next Expense Statement and/or Tax
Statement, Tenant shall pay to Landlord on account of its obligations under Section 4.1 of this Lease: (i)
in the case of an Expense Statement, a sum (the "Monthly Ex nne se Payment") equal to one-twelfth (1/12)
of Tenant's Share of the Estimated Operating Expenses for such Lease Year, and (ii) in the case of a Tax
Statement, a sum (the "Monthly Tax Payment") equal to one-twelfth (1/12) of Tenant's Share of the
Projected Taxes for such Lease Year. Tenant's first Monthly Expense Payment and/or Monthly Tax
Payment after receipt of an Expense Statement or a Tax Statement shall be accompanied by Tenant's
payment of the difference between Tenant's Monthly Expense Payments or Monthly Tax Payments, as
applicable, actually paid to date by Tenant during the applicable Lease Year, and the amount of Tenant's
Share of Operating Expenses or Taxes, as applicable, shown on the new Statement applicable to the
current Lease Year.
4.4 Reconciliation. Each Expense Statement and/or Tax Statement, as applicable, shall
reconcile the payments made by Tenant pursuant to the preceding Expense Statement or Tax Statement
with, (i) in the case of an Expense Statement, Tenant's Share of Operating Expenses for the period
covered thereby, and (ii) in the case of a Tax Statement, Tenant's Share of the actual Taxes imposed for
the period covered thereby. Any balance due to Landlord shall be paid by Tenant within twenty (20) days
after Tenant's receipt of the applicable Statement; any surplus due to Tenant shall be applied by Landlord
against the next accruing monthly installment(s) of Additional Rent due under this Article. If the Term
has expired or has been terminated, Tenant shall pay the balance due to Landlord or Landlord shall refund
the surplus to Tenant, whichever the case may be, within twenty (20) days after Tenant's receipt of the
applicable Statement.
4.5 Audit. Tenant or its representative shall have the right to examine Landlord's books and
records with respect to the reconciliation of Operating Expenses for the prior Lease Year set forth in the
Expense Statement, during Landlord's normal business hours. Such examination may be performed upon
at least five (5) days' written notice to Landlord, within thirty (30) days following the delivery by
Landlord to Tenant of such Expense Statement. No examination may be performed by Tenant during any
period that Tenant is in default under this Lease. Unless Tenant gives Landlord a notice objecting to said
reconciliation (which shall specify the respects in which the reconciliation is claimed to be incorrect)
within fifteen (15) days after its examination of Landlord's books and records, said reconciliation shall be
considered as final and accepted by Tenant. Notwithstanding anything to the contrary contained in this
Article, Tenant shall not be permitted to examine Landlord's books and records or to dispute any
reconciliation unless Tenant has paid to Landlord the amount due as shown on the Expense Statement in
question. Upon Landlord's request, Tenant shall sign a confidentiality agreement before reviewing
Landlord's records.
4.6 Refund of Taxes. Landlord shall have the right, but not the obligation, at any time or
times without notice to Tenant, to seek a lowering of the assessed valuation of the Land and
improvements which may, from time to time, constitute the Property. Landlord may employ whatever
individuals, firms and corporations and/or attorneys which Landlord may, in its sole judgment, deem
necessary to undertake such endeavor and, at the request of Landlord, Tenant will cooperate with
Landlord or its representatives in effecting such a reduction. If Landlord receives any refund of Taxes
applicable to any Lease Year, Landlord shall deduct from such tax refund any expenses, including, but
not limited to, attorneys' fees and appraisal fees, incurred in obtaining such tax refund. If Tenant has
previously paid Tenant's Share of Taxes based upon the Taxes before application of the refund or
reduction, after deduction of such expenses, Landlord shall credit Tenant's Share of such refund against
the next accruing monthly installments(s) of Additional Rent, or if the Term shall have expired, Tenant's
Share of such refund shall be refunded to Tenant within thirty (30) days after receipt thereof by Landlord.
While any such reduction proceedings are pending, the computation and payment of Tenant's Share of
Taxes shall be based upon the original assessments for such year.
4.7 Operating Expenses and Taxes with Respect to Tenant. Tenant shall also pay to
Landlord, upon demand, the amount of (i) any increase in Operating Expenses which is attributable to
Tenant's use or manner of use of the Premises, to activities conducted on or about the Premises by Tenant
or on behalf of Tenant or to any Alterations made by or on behalf of Tenant, and (ii) all increases in Taxes
and/or all assessments or impositions made, levied or assessed against or imposed upon any portion of the
Premises which are attributable to Alterations made by or on behalf of Tenant, or which in whole or in
part belong to Tenant.
4.8 Survival. No adjustment in Tenant's obligation to pay Additional Rent under this Article
4 shall result in a decrease in the Basic Rent payable hereunder. Tenant's obligation to pay Additional
Rent, and Landlord's obligation to credit and/or refund to Tenant any amount shall survive the
Termination Date. Notwithstanding anything to the contrary contained in this Article 4, if Tenant is
entitled to any payment or refund of Additional Rent after the Termination Date, and the Term has been
terminated as a result of a default by Tenant, then Landlord shall have the right to retain such surplus
Additional Rent to the extent Tenant owes Landlord any Basic Rent or Additional Rent.
5. UTILITIES.
5.1 Electricity. Tenant shall contract directly with the applicable electric utility company for
electric service for the Premises, and shall pay all charges directly to said utility company. Tenant shall
not, without Landlord's prior written consent in each instance, connect any fixtures, appliances or
equipment to the Building's electric distribution system or make any alteration or addition to the electric
system of the Premises existing on the Commencement Date of this Lease. If, in the sole judgment of
Landlord, any requested changes to the electrical system of the Premises will not cause or create a
dangerous or hazardous condition or damage or injury to the Building, or entail excessive or unreasonable
alterations or repairs, or interfere with or disturb other tenants or occupants and/or the service then or
thereafter to be supplied to tenants or occupants, Landlord will make such changes, at Tenant's sole cost
and expense. Tenant covenants and agrees to pay Landlord for such costs and expenses within twenty
(20) days of Tenant's receipt of a bill therefor.
5.2 Other Utilities. Tenant shall contract directly with the applicable utility company for
sewer, water, natural gas, telephone and/or any other utility service for the Premises, and shall pay all
charges directly to said utility company. If any such utility service is not separately metered to the
Premises, Landlord shall have the right, at Landlord's option: (i) at its sole cost and expense, to install a
meter to measure the consumption of such utility service to the Premises and to require Tenant to contract
directly with the applicable utility company for such utility service; (ii) at Landlord's sole cost and
expense, install a submeter to measure the consumption of such utility service to the Premises, in which
case Landlord shall provide such utility service to Tenant; or (iii) provide such utility service to the
Premises and include the cost thereof in Operating Expenses. If Landlord provides any submetered
utilities pursuant to clause ii Tenant shall pay to Landlord within twenty (20) days after receipt of an
invoice therefor, an amount calculated by multiplying Tenant's actual consumption of such utility (as
shown on the submeter) by the rate at which such utility service is purchased for the Building, and
including (1) an allocable share, as determined by Landlord, of any taxes, surcharges and other amounts
incurred by Landlord in connection with furnishing such utility service to the Building or portion thereof,
4
as the case may be, plus (2) Landlord's administrative costs incurred in connectionwith reading any such
submeters.
5.3 Landlord Not Liable. Landlord shall not in any way be responsible or liable to Tenant at
any time for any loss, damage or expenses resulting from any change in the quantity or character of the
electric service or any other utility service, or for its being no longer suitable for Tenant's requirements,
or from any cessation or interruption of the supply or current, nor shall any such loss, damage or
expenses, or non-supply of electric service or any other utility service in any way affect the tenancy or in
any way relieve Tenant of any obligation under the terms of this Lease.
6. DELIVERY OF PREMISES. TENANT AGREES THAT IT IS ACCEPTING THE PREMISES
IN "AS IS" CONDITION WITHOUT ANY IMPROVEMENTS AND/OR ALTERATIONS BY
LANDLORD, EXCEPT AS SET FORTH ON SCHEDULE D. TENANT ACKNOWLEDGES AND
AGREES THAT, except as provided herein, NEITHER LANDLORD NOR ANY EMPLOYEE, AGENT
OR REPRESENTATIVE OF LANDLORD HAS MADE ANY EXPRESS OR IMPLIED
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE PHYSICAL CONDITION OF
THE PREMISES, THE FITNESS OR QUALITY THEREOF OR ANY OTHER MATTER OR THING
WHATSOEVER WITH RESPECT TO THE PREMISES OR ANY PORTION THEREOF, AND THAT
TENANT IS NOT RELYING UPON ANY SUCH REPRESENTATION OR WARRANTY IN
ENTERING INTO THIS LEASE.
If at any time during the Term, Landlord leases the remaining premises located in "Area C" of the
Building to a third party unrelated to Tenant, such that Tenant no longer has access to the common area
restrooms located in "Area C", Landlord shall construct, at its sole cost and expense, restrooms within the
Premises. Such restrooms shall be of a size sufficient for Tenant's employees located at the Premises and
shall be constructed in a good and workmanlike manner and in compliance with all Legal Requirements
using building standard construction materials and finishes.
MAINTENANCE. ALTERATIONS AND ADDITIONS, REMOVAL OF TRADE FIXTURES.
7.1 Tenant's Maintenance. Tenant agrees to keep the Premises in good order and condition
(except for ordinary wear and tear) and, except as provided in Section 7.2, will make all non-structural
repairs, alterations, renewals and replacements, ordinary and extraordinary, foreseen or unforeseen, and
shall take such other action as may be necessary or appropriate to keep and maintain the Premises in good
order and condition, including, without limitation, doors, windows, frames, dock bumpers and levelers
and utility lines from the point of entrance to the Premises to the point of actual use. Except as expressly
provided in this Lease, Landlord shall not be obligated in any way to maintain, alter or repair the
Premises. Except with respect to repairs or restoration undertaken by Landlord, Landlord will not be
liable for any labor, services or materials furnished or to be furnished to Tenant, or to anyone holding the
Premises or any part thereof through or under Tenant. Tenant shall not cause or permit any Liens to
attach to or affect the interest of Landlord in and to the Premises. Tenant's obligations hereunder shall
include, without limitation, maintenance, at its own expense, of all light bulb, fluorescent tubes, and
lighting fixtures in the Premises, including all component parts such as starters, ballasts, and lenses or
grills. Notwithstanding the foregoing, as the bulbs on the 8-foot light fixtures burn out, Landlord shall
have the option to either replace the bulb or replace the fixture with an appropriate replacement, at
Landlord's cost. If Landlord replaces the fixture, all future maintenance of that fixture shall be Tenant's
responsibility as set forth in this Section 7.1. All repairs made by Tenant hereunder shall be at least equal
in quality to the original work.
7.2 Landlord's Repairs. Landlord shall make all repairs and replacements to the foundation,
the bearing walls, the structural columns and beams, the exterior walls, the exterior windows, the roof of
the Building and any Building systems to the Premises; provided, however, if such repairs and
replacements (including repairs and replacements with respect to the Property) are necessitated by the
intentional acts, omissions or negligence of Tenant or Tenant's Visitors, then Tenant shall reimburse
Landlord, upon demand, for the reasonable cost thereof. The costs and expenses incurred by Landlord in
connection with such repairs and replacements shall be included in Operating Expenses to the extent
permitted by this Lease. Landlord represents that, as of the Commencement Date, all of the items for
which it is responsible for providing maintenance, including without limitation the Building systems to
the Premises, are in good working order and repair.
7.3 Requirements for Tenant's Maintenance and Alterations. All maintenance and repair,
and any Alterations, performed by, on behalf of or for the account of Tenant (a) must not, individually or
in the aggregate, lessen the Fair Market Value of the Building or adversely affect the usefulness of the
Building for use a warehouse and office building, (b) shall be completed expeditiously in a good and
workmanlike manner, and in compliance with all applicable Legal and Insurance Requirements, and (c)
shall be performed by contractors approved by Landlord to the extent such work involves any work to any
electrical, mechanical, plumbing or other system of the Building, any work to the outside of the Building,
any work to the roof of the Building or any work to any structural element of the Building.
7.4 (a) Permitted Alterations. If there is no default by Tenant under this Lease, Tenant
may, after notice to Landlord and submission of plans and specifications, make interior, non-structural
Alterations which do not constitute Major Work.
(b) Landlord's Consent to Alterations. Tenant shall not make any addition,
improvement or alteration of the Land or of the Building. In addition, Tenant shall not make any
Alteration having an aggregate cost in excess of $50,000, or affecting, altering, interfering with or
disrupting any electrical, mechanical, plumbing or other system of the Building, or affecting the outside
appearance, the roof, the ingress to or the egress from the Premises and/or any structural element of the
Building (any such work being hereinafter referred to as "Major Work"), unless Tenant submits to
Landlord detailed plans and specifications therefor and Landlord approves such plans and specifications
in writing (which such approval shall be at Landlord's sole discretion). In addition to all other rights and
remedies available to Landlord, Landlord may require Tenant to immediately remove any Major Work
performed without Landlord's consent. If Landlord approves such work, Landlord may, at any time
within twenty (20) days after such approval, submit to Tenant a proposal to undertake such work at a
specified fixed price. If the price submitted by Landlord is equal to or less than other bids received by
Tenant from independent, licensed contractors, Tenant shall, at Landlord's request, engage Landlord to
perform the Major Work in accordance with Landlord's proposal and the plans and specifications, and at
the price quoted by Landlord. If the price submitted by Landlord is more than other responsible fixed
price bids received by Tenant from such contractors for the work shown on the plans and specifications
approved by Landlord, Tenant shall deliver to Landlord a copy of the lower bid which Tenant desires to
accept, certified by Tenant to be a true and complete copy of the original bid. Within ten (10) days after
Tenant gives such lower bid to Landlord, Landlord shall have the option to agree to perform the work
contemplated by said plans and specifications for the fixed price set forth on said lower bid, in which
case, Tenant shall engage Landlord to undertake the Major Work in accordance with the plans and
specifications and Landlord's proposal at the fixed price set forth on said lower bid.
(c) Building Systems. Notwithstanding anything contained in this Lease to the
contrary, Landlord reserves the right to require Tenant to use Landlord's designated engineers and/or
contractors in connection with Tenant's Major Work affecting, altering, interfering with or disrupting any
electrical, mechanical, plumbing or other system of the Building deemed critical by Landlord, or affecting
the outside appearance, the roof, the ingress to or the egress from the Premises and/or any structural
element of the Building.
Z (a) Surrender of Alterations. All Alterations shall, upon installation, become the
property of Landlord and shall be deemed part of, and shall be surrendered with, the Premises, unless
Landlord, by notice given to Tenant at least thirty (30) days prior to the Termination Date, elects to
relinquish Landlord's right thereto. If Landlord elects to relinquish Landlord's right to any Alteration,
Tenant shall remove such Alteration, shall promptly repair any damage to the Premises caused by the
installation or removal of such Alteration, and shall restore the Premises to the condition existing prior to
the installation of said Alteration; all such work shall be done prior to the Termination Date.
(b) Removal of Improvements. At any time during the Term, Tenant may install,
place or reinstall in, or replace and remove from, the Premises any trade equipment, machinery and
personal property belonging to Tenant (such trade equipment, machinery and personal property shall not
become the property of Landlord), provided that (i) Tenant shall repair all damage caused by such
installation or removal, and (ii) Tenant shall not install any equipment, machinery or other items upon the
roof of the Building or make any openings on or about such roof.
USE OF DEMISED PREMISES.
8.1 Permitted Use. Tenant shall not use, or suffer or permit the use of, the Premises or any
part thereof by anyone for any purposes other than for the Permitted Use, but subject to Section 8.2
hereof. Notwithstanding the foregoing, Tenant shall be permitted to conduct "warehouse sales" from the
Premises on Saturdays and Sundays, which may be open to the general public, provided such use is in
compliance with all Legal Requirements.
8.2 Prohibited Uses. Tenant shall not use, or suffer or permit the use of, the Premises or any
part thereof in any manner or for any purpose or do, bring or keep anything, or suffer or permit anything
to be done, brought or kept, therein (including, but not limited to, the installation or operation of any
electrical, electronic or other equipment) (a) which contravenes the certificate of occupancy for the
Building or the Premises; (b) which could cause an overload of the electrical or mechanical systems of the
Building or the Premises, which could exceed the floor load per square foot which the floor was designed
to carry and which is allowed by Legal Requirements or which could adversely impact the structural
integrity of any floors or ceilings; (c) which in the reasonable judgment of the Landlord, may in any way
impair or interfere with the proper and economic heating, air conditioning of the Building; (d) which, in
the reasonable judgment of Landlord, would in any way impair or tend to impair or exceed the design
criteria, the structural integrity, character, appearance or Fair Market Value of the Building, or result in
the use of the Building or any component thereof (including, without limitation, any plumbing
components) in a manner or for a purpose not intended, or which, in the reasonable judgment of Landlord,
may be prejudicial to the business of Landlord; or (e) which in the reasonable judgment of Landlord, may
in any way interfere with the use or occupancy of any portion of the Building outside of the Premises by
Landlord or any other tenant or occupant of the Building.
8.3 Parking. (a) Provided no default has occurred on Tenant's part, Tenant shall have a
nonexclusive, revocable license (the "License") to park up to the number of cars (and, if specified, trucks)
indicated in the Basic Lease Provisions belonging to Tenant or Tenant's Visitors. Landlord shall not be
responsible to Tenant for enforcing parking rules, regulations or restrictions upon (or violations thereof
by) other tenants of the Building, or by third parties. Nothing contained in this Lease shall be deemed to
create liability upon Landlord for any damage to motor vehicles on the Property or for any loss of
property from within those motor vehicles, or for any injury in the parking area on the Property to Tenant
or Tenant's Visitors, except to the extent determined to be caused by the gross negligence or willful
misconduct of Landlord. Tenant shall acquaint its and any subtenant's employees with any parking rules
and regulations promulgated by Landlord and Tenant assumes responsibility for compliance by said
employees with such parking provisions, and shall be liable to Landlord for all unpaid parking charges, if
any, incurred by said employees.
(b) Any of the following actions shall be deemed a material Default under this
Lease: the use of any more than the number of Parking Spaces by Tenant or Tenant's Visitors; the
parking in spaces designated for the exclusive use of any other tenant in the Building by Tenant or
Tenant's Visitors, the parking other than in marked parking spaces by Tenant or Tenant's Visitors, or the
maintenance, repair or cleaning of any vehicle in the parking areas by Tenant or Tenant's Visitors. In any
of such events, Landlord may suspend or revoke the License if such practice continues after three (3) days
written notice from Landlord; and/or Landlord may exercise such other remedies as are provided in this
Lease. If Tenant or Tenant's Visitors park illegally or in areas designated for use by others, or in
driveways, fire lanes or areas not striped for general parking (other than the non-striped area outside the
loading docks in "Area C" so long as parking or standing of vehicles in such area is in compliance with
Legal Requirements), then Landlord may charge Tenant Fifty Dollars ($50.00) per day for each instance
each motor vehicle is so parked. In addition, Tenant authorizes Landlord to tow away from the Property,
at Tenant's sole cost and expense, vehicles used by Tenant or Tenant's Visitors and/or to attach violation
stickers or notices to any motor vehicles used by Tenant or Tenant's Visitors parked illegally or in
violation of this Article or any parking rules and regulations promulgated by Landlord.
(c) If the number of parking spaces in the parking area on the Property is reduced by
circumstances beyond the reasonable control of Landlord, the number of Parking Spaces indicated in the
Basic Lease Provisions shall be reduced proportionately. Landlord reserves the right, from time to time,
to assign and re-assign to Tenant and other tenants of the Building specific parking spaces, and to relocate
any assigned or reserved spaces, and Tenant agrees to be bound thereby.
8.4 Permits Licenses and Authorizations. Tenant shall obtain, at its sole cost and expense,
all permits, licenses or authorizations of any nature required in connection with the operation of Tenant's
business at the Premises, including, without limitation, any work or Alterations performed therein.
9. LANDLORD'S SERVICES. Landlord shall furnish electrical lighting, cleaning, and
maintenance, repair and replacements of the Common Areas of the Building and the Property, and all
costs in connection therewith shall be included in Operating Expenses.
10. COMPLIANCE WITH REQUIREMENTS.
10.1 Compliance. Tenant will (i) comply with all Legal and Insurance Requirements
applicable to the Building, Premises or Tenant's use or occupancy thereof, and (ii) maintain and comply
with all permits, licenses and other authorizations required by any governmental authority for its use of
the Premises and for the proper operation, maintenance and repair of the Premises or any part thereof.
Landlord will join in the application (but at no cost to Landlord) for any permit or authorization with
respect to Legal Requirements, if such joinder is necessary.
10.2 Increases in Insurance Premiums. Tenant shall not do, or permit to be done, anything in
or to the Premises, or bring or keep anything therein which will, in any way, increase the cost of fire or
public liability insurance on the Premises, or invalidate or conflict with the fire insurance or public
liability insurance policies covering the Premises or any personal property kept therein by Landlord, or
obstruct or interfere with the rights of Landlord or of other tenants, or in any other way injure Landlord or
other tenants, or subject Landlord to any liability for injury to persons or damage to property, or interfere
with good order of the Building. Any increase in fire insurance premiums on the Premises or the contents
within the Building, or any increase in the premiums of any other insurance carried by Landlord in
connection with the Building or the Premises, caused by the use or occupancy of the Premises, or
violation of Legal Requirements or Insurance Requirements, by Tenant, and any expense or cost incurred
in consequence of the negligence, carelessness or willful action of Tenant, shall be Additional Rent and
paid by Tenant to Landlord within ten (10) days of demand therefor.
11. COMPLIANCE WITH ENVIRONMENTAL LAWS.
11.1 Environmental Laws. Tenant shall comply, at its sole cost and expense, with all
Environmental Laws in connection with its use and occupancy of the Premises; provided, however, the
provisions of this Article 11 shall not obligate Tenant to comply with the Environmental Laws if such
compliance is required solely as a result of the occurrence of a spill, discharge or release of hazardous
substances and/or wastes (each a "Discharge") before the Commencement Date, or if such Discharge was
not caused by the act, negligence or omission of Tenant or Tenant's Visitors.
11.2 Copies of Environmental Documents. Tenant shall deliver promptly to Landlord a true
and complete copy of any correspondence, notice, report, sampling, test, finding, declaration, submission,
order, complaint, citation or any other instrument, document, agreement and/or information submitted to,
or received from, any governmental entity, department or agency in connection with any Environmental
Law relating to or affecting Tenant, Tenant's employees, Tenant's use and occupancy of the Premises.
11.3 Hazardous Substances and Hazardous Wastes. Tenant shall not cause or permit any
"hazardous substance" or "hazardous waste" (as such terms are defined in applicable Environmental
Laws) to be brought, kept or stored on or about the Premises, and Tenant shall not engage in, or permit
any other person or entity to engage in, any activity, operation or business on or about the Premises which
involves the generation, manufacture, refining, transportation, treatment, storage, handling or disposal of
hazardous substances and/or hazardous wastes.
11.4 (a) Discharge. If a Discharge occurs on or from the Premises, Tenant shall give
Landlord immediate oral and written notice of such Discharge, describing all relevant facts in reasonable
detail. Written notice regarding any Discharge shall include, without limitation, a copy of (i) any notice
of a violation, or a potential or alleged violation, of any Environmental Law that is received by Tenant or
any subtenant or other occupant of the Premises (collectively, "Occupant") from any governmental or
regulatory agency; (ii) any inquiry, investigation, enforcement, cleanup, removal, or other action that is
instituted or threatened by a governmental or regulatory agency against any Occupant relating to any
Discharge on or from the Premises; (iii) any claim that is instituted or threatened by any third party
against any Occupant relating to any Discharge on or from the Premises; and (iv) any notice of the
restriction, suspension, or loss of any environmental operating permit by any Occupant. If any Discharge
arose out of or in connection with the use and occupancy of the Premises by any Occupant, or if any
Discharge was caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall
pay all costs and expenses relating to compliance with applicable Environmental Laws (including,
without limitation, the costs and expenses of the site investigations and of the removal and remediation of
such hazardous substance or hazardous wastes).
(b) Landlord's Cleanup Rights. Without relieving Tenant of its obligations under
this Lease and without waiving any default by Tenant under this Lease, Landlord shall have the right, but
not the obligation, to take such action as Landlord deems necessary or advisable to cleanup, remove,
resolve or minimize the impact of or otherwise deal with any Discharge. If any Discharge arose out of or
in connection with the use and occupancy of the Premises by any Occupant, or if any Discharge was
caused by the act, negligence or omission of Tenant or Tenant's Visitors, then Tenant shall pay to
Landlord on demand all costs and expenses incurred by Landlord in connection with any action taken by
Landlord.
11.5 Indemnification. Tenant hereby agrees, at Tenant's sole expense, to defend, indemnify
and hold Landlord harmless from and against any and all claims, losses, liability, damages and expenses
(including, without limitation, site investigation costs, removal and remediation costs and attorneys' fees
and disbursements) arising out of or in connection with (i) the use and occupancy of the Premises by any
Occupant, (ii) any Discharge by Tenant or Tenant's Visitors upon the Property, and/or (iii) Tenant's
failure to comply with the provisions of this Article 11.
11.6 Notices. If Landlord has given to Tenant the name and address of any holder of an
Underlying Encumbrance, Tenant agrees to send to said holder a copy of those items given to Landlord
pursuant to the provisions of Section 11.2.
11.7 Survival. Tenant's obligations under this Article 11 shall survive the Termination Date.
12. DISCHARGE OF LIENS. Tenant will discharge, within fifteen (15) days after receipt of notice
thereof, any Lien on the Property and/or the Premises or the Basic Rent or any Additional Rent caused by
or arising out of Tenant's acts or Tenant's failure to perform any obligation hereunder.
13. PERMITTED CONTESTS. Tenant may contest, by appropriate proceedings, the amount,
validity or application of any Legal Requirement which Tenant is obligated to comply with or any Lien
which Tenant is obligated to discharge, provided that (a) such proceedings shall suspend the collection
thereof, (b) no part of the Property and/or the Premises or of any Basic Rent or Additional Rent or other
sum payable hereunder would be subject to loss, sale or forfeiture during such proceedings, (c) Landlord
would not be subject to any civil or criminal liability for failure to pay or perform, as the case may be, (d)
Tenant shall have furnished such security as may be required in the proceedings or reasonably requested
by Landlord, (e) such proceedings shall not affect the payment of Basic Rent or Additional Rent or
prevent Tenant from using the Premises for its intended purposes, and (f) Tenant shall notify Landlord of
any such proceedings not less than ten (10) days prior to the commencement thereof, and shall describe
such proceedings in reasonable detail. Tenant will conduct all such contests in good faith and with due
diligence and will, promptly after the determination of such contest, pay and discharge all amounts which
shall be determined to be payable therein.
14. INSURANCE: INDEMNIFICATION.
14.1 (a) Tenant's Insurance. Tenant shall obtain, and shall keep in full force and effect.
during the Term, the following insurance coverages, with insurers which are authorized to do business in
the State of Pennsylvania and which are rated at least A (Class X) in Best's Key Rating Guide:
(i) commercial general liability insurance (including, during any period
when Tenant is performing work in or making Alterations to the Premises, coverage for any construction
on or about the Premises), against claims for bodily injury, personal injury, death or property damage
occurring on, in or about the Premises, or as a result of ownership of facilities located on the Premises, in
an amount per occurrence of not less than $5,000,000 combined single limit for any bodily injury,
personal injury, death or property damage. If Tenant has other locations that it owns or leases, the polcy
shall include an aggregate limit per location endorsement;
(ii) Special form (all risk) personal property insurance insuring all
equipment, trade fixtures, inventory, fixtures and personal property located on or in the Premises
(including, if required by Lender, coverage for flood and earthquake), with an agreed endorsement in an
amount equal to the full replacement cost of such property. Tenant acknowledges that Landlord shall not
be obligated to obtain or maintain insurance coverage with respect to any of Tenant's equipment, trade
fixtures, inventory, fixtures and personal property;
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(iii) workers' compensation insurance coverage for the full statutory liability
of Tenant and employers' liability insurance with a limit of not less than $500,000 per accident, $500,000
disease, policy limit and $500,000 disease, each employee;
(iv) business interruption insurance in such amounts as will reimburse Tenant
for direct and indirect loss of earnings attributable to those events commonly insured against by
reasonable prudent tenants and/or attributable to Tenant's inability to access or to occupy (all or part of)
the Premises; and
(v) such other insurance with respect to the Premises in such amounts and
against such insurable exposures as Landlord deems necessary and prudent or as may be required by any
Lender or Master Landlord.
(b) Policy Requirements. Tenant's policies of insurance shall be written as primary
policy coverage and not contributing with, or in excess of, any coverage which Landlord may carry, and
all such policies shall name as additional insured parties (except for workers' compensation insurance and
business interruption insurance) Landlord, Landlord's Lender(s) and any other parties named by Landlord
as having an interest in the Premises, as their respective interests may appear, and shall be reasonably
satisfactory to Landlord. In addition, said policies of insurance (except for workers' compensation
insurance) shall (i) provide that thirty (30) days' prior written notice of suspension, cancellation,
termination, modification, non-renewal or lapse or material change of coverage shall be given to Landlord
and that such insurance shall not be invalidated by any act or neglect of Landlord or Tenant or any owner
of the Property, nor by any change in the title or ownership of the Property, nor by occupation of the
Premises for purposes more hazardous than are permitted by such policy, and (ii) not contain a provision
relieving the insurer thereunder of liability for any loss by reason of the existence of other policies of
insurance covering the Premises against the peril involved, whether collectible or not. The policies of
insurance required to be maintained by Tenant pursuant to Section 14.1(a)(i) shall also include a
contractual liability endorsement evidencing coverage of Tenant's indemnification obligations set forth in
Section 14.4. Tenant may not self-insure for any insurance coverage required to be obtained or carried by
Tenant under this Lease, and any deductible amounts under any insurance policies required hereunder
shall not exceed $10,000. Tenant shall have the right to provide the insurance coverages of Section
14.1(a) in a blanket policy, provided such blanket policy expressly affords coverage to the Premises and
to Landlord as required by this Lease.
(c) Certificates of Insurance. On or before the Commencement Date, Tenant shall
deliver to Landlord original or duplicate policies or certificates of the insurers evidencing all the
insurance which is required to be maintained hereunder by Tenant, and, within ten (10) days prior to the
expiration of any such insurance, original or duplicate policies or certificates evidencing the renewal of
such insurance. Tenant's certificates of insurance shall be: (i) Acord Form 27 with respect to property
insurance policies, (ii) Acord Form 25-S with respect to liability insurance policies or successor forms as
designated or approved by Landlord. With respect to the notification provisions of any certificate of
insurance, Tenant shall require its issuing insurers to provide Landlord thirty (30) days' prior absolute
written notification of suspension, cancellation, termination, modification, non-renewal or lapse or
material change of coverage.
(d) No Separate Insurance. Tenant shall not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by Section 14.1 unless Landlord
is named as an additional insured therein.
(e) Tenant's Failure to Maintain Insurance. If 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 necessary insurance and pay the premium. The Tenant shall repay such
amounts to Landlord on demand. In addition, Landlord may recover from Tenant and Tenant agrees to
pay 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.
14.2 Landlord's Insurance. Landlord shall obtain, and shall keep in full force and effect
during the Tenn, the following insurance coverages, with insurers which are authorized to do business in
the State of Pennsylvania and which are rated at least A- (Class VII) in Best's Key Rating Guide:
(i) property insurance on the Building with respect to risks from time to
time included under a standard "All Risk" policy, including, but not limited to, fire, vandalism, malicious
mischief, and ordinance coverage (including, if determined necessary by Landlord or if required by a
Lender or Master Landlord, flood and earthquake insurance), with an agreed endorsement in an amount
equal to the full replacement cost of the Building, as determined from time to time (but not less often than
once every year) by a method required by the insurer or insurers;
(ii) commercial general liability insurance (including, during any period
when Landlord is making alterations or improvements to the Premises, coverage for any construction on
or about the Premises), against claims for bodily injury, personal injury, death or property damage
occurring on, in or about the Property, or as a result of ownership of facilities located on the Premises, in
an amount per occurrence and with such deductible as required by any Lender or Master Landlord, or if
none, as would be reasonably carried by a prudent owner of property similar to the Property;
(iii) rental income insurance in an amount equal to the aggregate rental
income from the Property, from time to time, for a period of twelve (12) months;
(iv) insurance against acts of terrorism; insurance against mold and other
infestation; and
(v) such other insurance carried in good faith by Landlord and/or required
from time to time by any Lender and/or Master Landlord.
The cost of the insurance coverages maintained by Landlord under this Section 14.2 is referred to as
"Landlord's Insurance Costs," and shall be included in Operating Expenses. Tenant shall have no rights
in the policy or policies of insurance maintained by Landlord and shall not, for any reason, be entitled to
be a named insured thereunder.
14.3 (a) Waiver. Landlord hereby waives and releases Tenant, and Tenant hereby waives
and releases Landlord, from any and all liabilities, claims and losses for which the released party is or
may be held liable to the extent of any insurance proceeds received by said injured party.
(b) Waiver of Subrogation. Each party hereto agrees to have included in each of its
insurance policies (insuring the Building in the case of Landlord, and insuring Tenant's personal property,
trade fixtures, equipment and improvements in the case of Tenant, against loss, damage or destruction by
fire or other casualty) a waiver of the insurer's right of subrogation against the other party to this Lease.
If such waiver is not enforceable or is unattainable, then such insurance policy shall contain either (i) an
express agreement that such policy shall not be invalidated if Landlord or Tenant, whichever the case may
be, waives the right of recovery against the other party to this Lease or (ii) any other form for the release
of Landlord or Tenant, whichever the case may be. If such waiver, agreement or release shall not be, or
shall cease to be, obtainable from Landlord's insurance company or from Tenant's insurance company,
whichever the case may be, then Landlord or Tenant shall notify the other party of such fact and shall use
12
its best efforts to obtain such waiver, agreement or release from another insurance company satisfying the
requirements of this Lease.
14.4 Indemnification. Tenant hereby indemnifies, and shall pay, protect and hold Landlord
harmless from and against all liabilities, losses, claims, demands, costs, expenses (including attorneys'
fees and expenses) and judgments of any nature (except to the extent Landlord is compensated by
insurance maintained by Landlord or Tenant hereunder and except for such of the foregoing as arise from
the-greys negligence or willful misconduct of Landlord, its agents, servants or employees), arising, or
alleged to arise, from or in connection with, (i) any injury to, or the death of, any person or loss or
damage to property on or about the Premises, (ii) any violation of this Lease or of any Legal or Insurance
Requirement, (iii) performance of any labor or services or the furnishing of any materials or other
property in respect of the Premises or any part thereof, (iv) the Tenant's occupancy of the Leased
Premises (including, but not limited to, statutory liability and liability under workers' compensation
laws), (v) any breach or default in the performance of any obligation on the Tenant's part to be performed
under the terms of this Lease, (vi) any act or negligence of the Tenant or Tenant's Visitors, and (vii) all
costs, attorneys' fees, expenses and liability incurred in or about any such claim or any action or
proceeding brought thereon, and, in any case, action, or proceeding brought against the Landlord by
reason of any such claim. Tenant, at Tenant's sole expense, will resist and defend any action, suit or
proceeding brought against Landlord by reason of any such occurrence by independent counsel selected
by Tenant, which is reasonably acceptable to Landlord. The obligations of Tenant under this Section 14.4
shall survive the Termination Date.
14.5 No Claims. Tenant shall not make or bring any claim against Landlord (a) for any
damage to, or loss (by theft or otherwise) of, or loss of use of, any property of Tenant or of any other
person, or (b) for business interruption or consequential damages, it being understood that Tenant
assumes all risk in connection therewith, and, except as provided above, Landlord shall not be liable
therefor, for any reason, including the negligence of Landlord, its employees, agents, servants or invitees,
or the breach by Landlord of any provision of this Lease. Landlord is not liable for any claims, costs or
liabilities arising out of or in connection with the acts or omissions of any other tenants in the Building or
on the Property. The Tenant waives all of its claims against the Landlord with respect to the foregoing.
The provisions of this Section 14.5 shall survive the Termination Date.
15. ESTOPPEL CERTIFICATES. At any time and from time to time, upon not less than ten (10)
days' prior notice by Landlord, Tenant shall execute, acknowledge and deliver to Landlord a statement
certifying the following: (i) the Commencement Date, (ii) the Termination Date, (iii) the date(s) of any
amendment(s) and/or modification(s) to this Lease, (iv) that this Lease was properly executed and is in
full force and effect without amendment or modification, or, alternatively, that this Lease and all
amendments and/or modifications thereto have been properly executed and are in full force and effect, (v)
the current annual Basic Rent, the current monthly installments of Basic Rent and the date on which
Tenant's obligation to pay Basic Rent commenced, (vi) the current monthly installment of Additional
Rent for Taxes and Operating Expenses, (vii) the date to which Basic Rent and Additional Rent have been
paid, (viii) the amount of the security deposit, if any, (ix) that, to the best of Tenant's knowledge, neither
party to this Lease is in default in the keeping, observance or performance of any covenant, agreement,
provision or condition contained in this Lease and no event has occurred which, with the giving of notice
or the passage of time, or both, would result in a default by either party, except as specifically provided in
the estoppel certificate, (x) that, to the best of Tenant's knowledge, Tenant has no existing defenses,
offsets, liens, claims or credits against the Basic Rent or Additional Rent or against enforcement of this
Lease by Landlord, (xi) that Tenant has not been granted any options or rights of first refusal to extend the
Term, to lease additional space, to terminate this Lease before the Termination Date or to purchase the
Property, except as specifically provided in this Lease, and (xii) such other reasonable matters as the
person or entity requesting the certificate may request. Tenant acknowledges and agrees that any estoppel
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certificate may be relied upon by any mortgagee, or any prospective purchaser, Tenant, subtenant,
mortgagee or assignee of any mortgage, of the Property or any part thereof. If Tenant fails or otherwise
refuses to execute an estoppel certificate in accordance with Article 15, then Tenant shall be deemed to
have appointed Landlord an irrevocable power of attorney, coupled with an interest, and Landlord shall
be authorized to execute and deliver the required certificate for and on behalf of Tenant, but the exercise
of such power shall not be deemed a waiver of Tenant's default.
16. ASSIGNMENT AND SUBLETTING.
16.1 Prohibition. Except as otherwise expressly provided in this Article 16, Tenant shall not
sell, assign, transfer, hypothecate, mortgage, encumber, grant concessions or licenses, sublet, or otherwise
dispose of any interest in this Lease or the Premises, by operation of law or otherwise, without the prior
written consent of Landlord. Any consent granted by Landlord in any instance shall not be construed to
constitute a consent with respect to any other instance or request. If any portion of the Premises is sublet,
used, or occupied by anyone other than Tenant, or if this Lease is assigned by Tenant, Landlord shall have
the right to collect rent from the assignee, subtenant, user or occupant, but no such assignment, subletting,
use, occupancy or collection shall be deemed a waiver of any of Landlord's rights under the provisions of
this Section 16. 1, a waiver of any of Tenant's covenants contained in this Article 16, the acceptance of the
assignee, subtenant, user or occupant as tenant, or a release of Tenant from further performance by Tenant
of Tenant's obligations under the Lease.
16.2 Tenant's Notice. If Tenant desires to sublet the Premises or to assign this Lease, it shall
first submit to Landlord a written notice ("Tenant's Notice") setting forth in reasonable detail: (a) the
name and address of the proposed subtenant or assignee; (b) the terms and conditions of the proposed
subletting or assignment (including the proposed commencement date of the sublease or the effective date
of the assignment, which shall be at least thirty (30) days after Tenant's Notice is given); (c) the nature
and character of the business of the proposed subtenant or assignee; (d) banking, financial, and other
credit information relating to the proposed subtenant or assignee, in reasonably sufficient detail, to enable
Landlord to determine the proposed subtenant's or assignee's financial responsibility; and (e) in the case
of a subletting, complete plans and specifications for any and all work to be done in the Premises to be
sublet.
16.3 Landlord's Response. Within thirty (30) days after Landlord's receipt of Tenant's
Notice, Landlord shall notify Tenant whether Landlord (i) consents to the proposed sublet or assignment,
(ii) does not consent to the proposed sublet or assignment, or (iii) elects to exercise its recapture right, as
described in Section 16.5. Landlord shall have the right to withhold consent to the proposed sublease or
assignment if, without limitation of other reasons, (1) the assignee's or subtenant's financial condition, in
the sole judgment of Landlord, is not comparable to that of Tenant, (2) the quantity or location of the
space proposed to be sublet or assigned is inappropriate, in the sole judgment of Landlord, (3) Tenant is
offering to sublet or assign space at a rate that is below the then market rate being charged for space of
like availability and quantity by the Landlord, (4) Tenant's proposed sublease or assignment would be to
any existing tenant, subtenant or other occupant of the Building (or to a subsidiary or affiliate), (5)
Tenant's proposed sublease or assignment would be to any prospective tenant (or to a subsidiary or
affiliate) with whom Landlord (or an affiliate of Landlord) has negotiated for the leasing of space in the
Building or any other building owned by Landlord (or an affiliate of Landlord) during the six (6) month
period prior to receipt of Tenant's Notice, (6) the business of such proposed subtenant or assignee is not
compatible with the type of occupancy of the Building, or such business will create increased use of the
facilities of the Building, (7) the assignment or sublease may adversely affect the quality or marketability
of either the rentable area or the Building, or (8) the proposed assignee or subtenant will or is likely to
demean the character of the Building, or its environment, in Landlord's sole judgment.
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16.4 Requirements. In addition to the foregoing requirements, no assignment or sublease shall
be permitted (a) if, at the effective date of such assignment or sublease, Tenant is in default under this
Lease; or (b) unless Tenant agrees, at the time of the proposed assignment or sublease and in Tenant's
Notice, to pay to Landlord, immediately ;upon receipt thereof, one hundred percent (100%) of all Net
Rental Proceeds, of whatever nature, payable by the prospective assignee or subtenant to Tenant pursuant
to such assignment or sublease.
16.5 (a) Recapture. Landlord shall have the right, to be exercised by giving written notice
(the "Recapture Notice") to Tenant within thirty (30) days after receipt of Tenant's Notice, to recapture
the space described in Tenant's Notice (the "Recapture Space"). The Recapture Notice shall cancel and
terminate this Lease with respect to the Recapture Space as of the date stated in Tenant's Notice for the
commencement of the proposed assignment or sublease, as if that date was the Termination Date, and
Tenant shall surrender possession of the Recapture Space as of such date. Thereafter, the Basic Rent and
Additional Rent shall be equitably' adjusted based upon the square footage of the Premises then
remaining, after deducting the square footage attributable to the Recapture Space.
(b) Landlord's Exercise. If Landlord elects to exercise its recapture right, and the
Recapture Space is less than the entire Premises, then Landlord, at its sole expense, shall have the right to
make any alterations to the Premises required, in Landlord's reasonable judgment, to make such
Recapture Space a self-contained rental unit. Landlord agrees to perform all such work, if any, with as
little inconvenience to Tenant's business as is reasonably possible; provided, however, Landlord shall not
be required to perform such work after normal business hours or on weekends; and provided further,
Landlord shall not be deemed guilty of an eviction, partial eviction, constructive eviction or disturbance
of Tenant's use or possession of the Premises, and shall not be liable to Tenant for same.
16.6 Sublease Requirements. In addition to the foregoing requirements, any sublease must
contain the following provisions: (a) the sublease shall be subject and subordinate to all of the terms and
conditions of this Lease; (b) at Landlord's option, in the event of cancellation or termination of this Lease
for any reason or the surrender of this Lease, whether voluntarily, involuntarily, or by operation of law,
prior to the expiration of such sublease, including extensions and renewals of such sublease, the subtenant
shall make full and complete attornment to Landlord for the balance of the term of the sublease. The
attornment shall be evidenced by an agreement in form and substance satisfactory to Landlord which the
subtenant shall execute and deliver at any time within five (5) days after request by Landlord or its
successors and assigns; (c) the term of the sublease shall not extend beyond a date which is one day prior
to the Termination Date; (d) no subtenant shall be permitted to further sublet all or any portion of the
subleased space or to assign its sublease without Landlord's prior written consent; and (e) the subtenant
shall waive the provisions of any law now or subsequently in effect which may give the subtenant any
right of election to terminate the sublease or to surrender possession of the space subleased if any
proceeding is brought by Landlord to terminate this Lease.
16.7 Events Constituting Assignment. Each of the following events shall be deemed to
constitute an assignment of this Lease and each shall require the prior written consent of Landlord: (a)
any assignment or transfer of this Lease by operation of law; (b) any hypothecation, pledge, or collateral
assignment of this Lease; (c) any involuntary assignment or transfer of this Lease in connection with
bankruptcy, insolvency, receivership, or similar proceeding; (d) any assignment, transfer, disposition, sale
or acquisition of a controlling interest in Tenant to or by any person, entity, or group of related persons or
affiliated entities, whether in a single transaction or in a series of related or unrelated transactions; or (e)
any issuance of an interest or interests in Tenant (whether stock, partnership interests, or otherwise) to any
person, entity, or group of related persons or affiliated entities, whether in a single transaction or in a
series of related or unrelated transactions, which results in such person, entity, or group holding a
controlling interest in Tenant. For purposes of the immediately foregoing, a "controlling interest" of
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Tenant shall mean fifty percent (50%) or more of the aggregate issued and outstanding equitable interests
(whether stock, partnership interests, membership interests or otherwise) of Tenant.
16.8 Assumption. It is a further condition to the effectiveness of any assignment otherwise
complying with this Article 16 that the assignee execute, acknowledge, and deliver to Landlord an
agreement in form and substance satisfactory to Landlord assuming all of the obligations of Tenant under
this Lease agreeing that the provisions of this Article 16 shall continue to be binding upon it with respect
to all future assignments and deemed assignments of this Lease.
16.9 Tenant Remains Liable. No assignment of this Lease nor any sublease of all or any
portion of the Premises shall release or discharge Tenant from any liability, whether past, present, or
future, under this Lease and Tenant shall continue to remain primarily liable under this Lease.
16.10 Landlord's Costs and Expenses. Tenant shall reimburse Landlord for all fees, costs and
expenses, including, but not limited to, reasonable attorneys' fees and disbursements, which Landlord
incurs in reviewing any proposed assignment of this Lease, any proposed sublease of the Premises, and
any permits, approvals, and applications for construction within the Premises.
16.11 Deadline for Consummation of Assignment or Sublease. If Landlord consents to any
proposed assignment or sublease and Tenant fails to consummate the assignment or sublease to which
Landlord consented within ninety (90) days after the giving of such consent, Tenant shall be required
again to comply with all of the provisions and conditions of this Article 16 before assigning this Lease or
subletting the Premises. If Tenant consummates the assignment or sublease to which Landlord consented
within said ninety (90) day period, Tenant agrees that it shall deliver to Landlord a fully executed,
duplicate original counterpart of the assignment or sublease agreement within ten (10) days of the date of
execution of such item.
16.12 No Liability. Tenant agrees that under no circumstances shall Landlord be liable in
damages or subject to liability by reason of Landlord's failure or refusal to grant its consent to any
proposed assignment of this Lease or subletting of the Premises. Tenant shall not claim any money
damages by way of setoff, counterclaim or defense, based upon any claim or assertion by Tenant that
Landlord unreasonably withheld any consent or approval. Tenant's sole and exclusive remedy shall be an
action or proceeding for specific performance, injunction or declaratory judgment.
16.13 Indemnification. If Landlord withholds its consent of any proposed assignment or
sublease, Tenant shall defend, indemnify, and hold Landlord harmless from and reimburse Landlord for
all liability, damages, costs, fees, expenses, penalties, and charges (including, but not limited to,
reasonable attorneys' fees and disbursements) arising out of any claims that may be made against
Landlord by any brokers or other persons claiming a commission or similar compensation in connection
with the proposed assignment or sublease.
16.14 (a) Bankruptcy. Notwithstanding anything to the contrary contained in this Lease, if
this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, any and
all monies or other consideration payable or otherwise to be delivered in connection with such assignment
shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and shall
not constitute property of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code.
Any and all monies or other consideration constituting Landlord's property under the preceding sentence
not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and be promptly paid to
or turned over to Landlord.
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(b) Adequate Assurance. If Tenant proposes to assign this Lease pursuant to the
provisions of the Bankruptcy Code to any person or entity who shall have made a bona fide offer to
accept an assignment of this Lease on terms acceptable to Tenant, then notice of such proposed
assignment shall be given to Landlord setting forth (i) the name and address of such person or entity, (ii)
all of the terms and conditions of such offer, and (iii) the adequate assurance to be provided by Tenant to
assure such person's or entity's future performance under this Lease, including, without limitation, the
assurance referred to in Section 365(b)(3) of the Bankruptcy Code (or any such successor or substitute
legislation or rule thereto). Such notice shall be given to Landlord no later than twenty (20) days after
Tenant's receipt of such bona fide offer, but in any event no later than ten (10) days prior to the date that
Tenant shall make application to the bankruptcy court for authority and approval to enter into such
assignment and assumption. After receipt of such notice, Landlord shall have the prior right and option,
to be exercised by notice given to Tenant at any time prior to the effective date of such proposed
assignment, to accept an assignment of this Lease to Landlord upon the same terms and conditions and
for the same consideration, if any, as the bona fide offer made by such person for the assignment of this
Lease. For the purposes of clause iii of this paragraph, the phrase "adequate assurance" shall mean the
deposit of cash security in an amount equal to the Basic Rent and Additional Rent payable under this
Lease for the next succeeding twelve (12) months (which annual Additional Rent shall be reasonably
estimated by Landlord). Any person or entity to which this Lease is assigned pursuant to the provisions
of the Bankruptcy Code shall be deemed, without further act or deed, to have assumed all of the
obligations arising under this Lease on or after the date of such assignment. Any such assignee shall,
upon demand, execute and deliver to Landlord an instrument confirming such assumption.
16.15 Landlord's Right to Negotiate. Landlord shall have the right, at any time, to negotiate
directly with any proposed subtenant or assignee, whether the identity of such party has been disclosed to
Landlord by Tenant or others, and Landlord shall have the right to enter into a direct lease with any
proposed subtenant, its parent, affiliate or subsidiary, either with respect to the sublet area or any other
premises or space in the Building upon such terms and upon such rentals and other provisions or
agreements as Landlord elects, including the same terms and conditions set forth in the proposed sublease
or assignment submitted to Landlord with Tenant's Notice.
17. CASUALTY.
17.1 Notice. If there is any damage to or destruction of the Premises, Tenant shall promptly
give notice thereof to Landlord, describing the nature and extent thereof.
17.2 Premises Not Untenantable. If the Premises are damaged, but no portion thereof is
rendered untenantable, and this Lease is not terminated pursuant to Section 17.4 or 17.5 hereof, Landlord
shall, at its own expense, cause Restoration to be completed as soon as reasonably practicable, but in no
event later than ninety (90) days from the occurrence, subject to any Excusable Delays, and the Basic
Rent and Additional Rent shall not abate.
17.3 Premises Untenantable. If the Premises are damaged or destroyed and are rendered
partially or wholly untenantable, and this Lease is not terminated pursuant to Section 17.4 or 17.5 hereof,
Landlord shall, at its own expense, cause Restoration to be completed as soon as reasonably practicable,
but in no event later than one hundred eighty (180) days from the occurrence, subject to any Excusable
Delays, and the Basic Rent and Additional Rent shall be equitably abated.
17.4 Termination. (a) If, in the sole opinion and discretion of Landlord, the Building is
damaged or destroyed and the total cost of Restoration shall amount to thirty percent (30%) or more of the
full insurable value of the Building, Landlord, in lieu of Restoration, may elect to terminate this Lease,
provided that notice of such termination shall be sent to Tenant within sixty (60) days after the occurrence
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of such casualty. If Landlord exercises its right to terminate this Lease, this Lease shall cease, terminate
and expire, and all Basic Rent and Additional Rent shall be prorated, as of the date of such damage or
destruction.
(b) If the Building is damaged or destroyed and, in the reasonable opinion of
Landlord, more than one hundred eighty (180) days are necessary to complete Restoration, or if during
the final year of the Term the Premises are damaged or destroyed and rendered partially or wholly
untenantable, Landlord may elect to terminate this Lease, provided notice of such termination shall be
sent to Tenant within sixty (60) days after the occurrence of such casualty. If Landlord exercises its right
to terminate this Lease, this Lease shall cease, terminate and expire, and all Basic Rent and Additional
Rent shall be prorated, as of the date of such damage or destruction.
17.5 Restoration. Landlord shall not be required to expend for Restoration an amount in
excess of (i) the Net Award received by it plus (ii) the amount of the deductible. If such amount is not
adequate, or the holder of an Underlying Encumbrance elects to retain the Net Award, Landlord shall
have the right to terminate this Lease; provided notice of such termination shall be sent to Tenant within
sixty (60) days after the amount of such Net Award is ascertained, or after the date on which the holder of
the Underlying Encumbrance notifies Landlord that it has elected to retain the Net Award, whichever the
case may be. If Landlord exercises its right to terminate this Lease, this Lease shall cease, terminate and
expire, and all Basic Rent and Additional Rent shall be prorated, as of the date of such damage or
destruction. Landlord's obligation to perform Restoration is subject to the Net Award being made
available to the Landlord by any Lender or Master Landlord whose interest may be superior to the
Landlord; and provided the destruction does not result in a termination or cancellation of an underlying
ground lease, if any; and provided that such damage or destruction has not been caused, directly or
indirectly by the act, omission or negligence of Tenant or Tenant's Visitors.
18. CONDEMNATION.
18.1 Taking. Tenant hereby irrevocably assigns to Landlord any award or payment to which
Tenant becomes entitled by reason of any Taking of all or any part of the Premises, whether the same
shall be paid or payable in respect of Tenant's leasehold interest hereunder or otherwise, except that
Tenant shall be entitled to any award or payment for the Taking of Tenant's trade fixtures or personal
property or for loss of business, relocation or moving expenses provided the amount of the Net Award
payable to Landlord with respect to the fee interest is not diminished. All amounts payable pursuant to
any agreement with any condemning authority which have been made in settlement of or under threat of
any condemnation or other eminent domain proceeding shall be deemed to be an award made in such
proceeding. Tenant agrees that this Lease shall control the rights of Landlord and Tenant in any Net
Award and any contrary provision of any present or future law is hereby waived.
18.2 Entire Premises. Upon a Taking of the whole of the Premises, then the Term shall cease
and terminate as of the date when possession is taken by the condemning authority and all Basic Rent and
Additional Rent shall be paid up to that date.
18.3 Portion of Premises. Upon a Taking of thirty percent (30%) or more of the Premises, if
Tenant determines in good faith, and certifies to Landlord, that the Taking will have a permanent,
material, adverse affect on Tenant's operations at the Premises, Tenant may elect to terminate this Lease
at any time up until the date which is sixty (60) days after the date when possession of such Premises is
acquired by the condemning authority. If this Lease is not terminated as a result of a Taking pursuant to
this Article 18, then. Landlord shall, subject to the provisions of Section 18.4, cause Restoration to be
completed as soon as reasonably practicable, but in no case later than ninety (90) days after the date the
condemning authority takes possession of such portion of the Premises, subject to any Excusable Delays,
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and the Basic Rent and Additional Rent thereafter payable during the Term shall be equitably prorated
based upon the square foot area of the Building actually taken.
18.4 Restoration. If (a) the Net Award is inadequate to complete Restoration of the Premises,
or (b) in the case of a Taking of thirty percent (30%) or more of the Premises, Tenant has not elected to
terminate this Lease pursuant to Section 18.3, then Landlord may elect either to complete such
Restoration or terminate this Lease by giving notice to Tenant within sixty (60) days after (x) the amount
of the Net Award is ascertained, or (y) the expiration of the sixty (60) day period within which Tenant
may terminate this Lease pursuant to Section 18.3, whichever the case may be. In such event, all Basic
Rent and Additional Rent shall be apportioned as of the date the condemning authority actually takes
possession of the Premises. Landlord's obligation to perform Restoration is subject to the Net Award
being made available to the Landlord by any Lender or Master Landlord whose interest may be superior
to the Landlord.
19. EVENTS OF DEFAULT.
19.1 Events of Default. Any of the following occurrences, conditions or acts shall constitute
an "Event of Default" under this Lease:
(a) If Tenant fails to pay any Basic Rent, Additional Rent or other amount payable
by Tenant hereunder when due, and such default continues for five (5) days; or
(b) if Tenant fails to take actual occupancy of the Premises within ninety (90) days
after the Commencement Date, or thereafter vacates the Premises for a period in excess of sixty (60) days;
provided, however, if Tenant is required to vacate the entire Premises as a result of a casualty, an Event of
Default shall not be deemed to have occurred unless Tenant fails to take actual occupancy of the Premises
within ninety (90) days after the Restoration has been substantially completed; or
(c) if Tenant files a petition in bankruptcy pursuant to the Bankruptcy Code or under
any similar federal or state law, or is adjudicated a bankrupt or becomes insolvent, or commits any act of
bankruptcy as defined in any such law, or takes any action in furtherance of any of the foregoing; or if a
petition or answer is filed proposing the adjudication of Tenant as a bankrupt pursuant to the Bankruptcy
Code or any similar federal or state law, and (i) Tenant consents to the filing thereof, or (ii) such petition
or answer is not discharged or denied within sixty (60) days after the filing thereof; or
(d) if a receiver, trustee or liquidator (or other similar official) of Tenant or of all or
substantially all of its business or assets or of the estate or interest of Tenant in the Premises is appointed
and is not discharged within sixty (60) days thereafter or if Tenant consents to or acquiesces in such
appointment; or if the estate or interest of Tenant in the Premises is levied upon or attached in any,
proceeding and such process is not vacated or discharged within sixty (60) days after such levy or
attachment; or
(e) if Tenant (i) uses, or suffers or permits the use of, any part of the Premises for
any purpose other than the Permitted Use t; (ii) fails to comply with any of the provisions of Article 11;
(iii) fails to discharge any Lien within the time period set forth in Article 12; (iv) fails to maintain the
insurance required pursuant to Article 14, or fails to deliver to Landlord the insurance certificates required
by Article 14 within the time periods set forth in Section 14.1(c); (v) fails to deliver to Landlord the
estoppel certificate required by Article 15 within the time period set forth therein; (vi) assigns this Lease
or sublets all or any portion of the Premises without complying with all the provisions of Article 16; or
(vii) fails to deliver to Landlord the subordination agreement required by Section 23.1 within the time
period set forth therein; or
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(f) if Tenant fails to comply with any Legal or Insurance Requirement, and such
failure continues for a period of ten (10) days after Landlord gives notice to Tenant specifying such
default; or
(g) if Tenant defaults in the observance or performance of any provision of this
Lease, other than those specified in Section 19.1(a through (f), and such default continues for thirty (30)
days after Landlord gives notice to Tenant specifying such default (unless such default cannot be cured by
the payment of money and cannot, with due diligence, be wholly cured within thirty (30) days, in which
case, Tenant shall have such longer period as is reasonably necessary to cure the default, so long as
Tenant commences to cure the same within such thirty (30) day period, diligently prosecutes the cure to
completion and advises Landlord from time to time, upon Landlord's request, of the actions which Tenant
is taking and the progress being made).
Notwithstanding anything contained in this Section 19.1 to the contrary, each provision of this
Section regarding the time period within which to correct a non-monetary default shall not apply if an
emergency condition, or threat thereof, exists. The term "emer eg ncv" or "emergency condition" shall
mean a condition or circumstance which (i) presents manifest threat of injury or damage to a person
and/or property, or (ii) requires immediate action intended to preserve safety of persons, or (iii) requires
immediate action intended to prevent damage to structures or the interruption or suspension of service(s)
deemed critical to the operation of all or a portion of the Building, or (iv) requires immediate action to
avoid or correct a violation of Legal or Insurance Requirements. It is understood and agreed that
wherever notice is required with respect to action(s) to be taken (including the cessation of an activity),
the period of time otherwise provided for in the Lease for performance compliance shall not apply where
an emergency or emergency condition shall exist, and in such circumstances, the time for compliance
shall be deemed "as soon as possible" with diligent, continuous prosecution of corrective action.
20. CONDITIONAL LIMITATIONS; REMEDIES.
20.1 Termination. This Lease and the Term and estate hereby granted are subject to the
limitation that whenever an Event of Default shall occur and be continuing, Landlord shall have the right,
at its election, then or thereafter while any such Event of Default shall continue and notwithstanding the
fact that Landlord may have some other remedy hereunder or at law or in equity, to give Tenant written
notice of Landlord's intention to terminate this Lease on a date specified in such notice, which date shall
be not less than five (5) days after the giving of such notice, and upon the date so specified, this Lease and
the estate hereby granted shall expire and terminate with the same force and effect as if the date specified
in such notice was the Termination Date, and all right of Tenant hereunder shall expire and terminate, and
Tenant shall be liable as set forth in this Article 20. If any such notice is given, Landlord shall have, on
such date so specified, the right of re-entry and possession of the Premises and the right to remove all
persons and property therefrom and to store such property in a warehouse or elsewhere at the risk and
expense, and for the account, of Tenant. Should Landlord elect to re-enter as herein provided or should
Landlord take possession pursuant to legal proceedings or pursuant to any notice provided for by law,
Landlord may from time to time re-let the Premises or any part thereof for such term or terms and at such
rental or rentals and upon such terms and conditions as Landlord may deem advisable, with the right to
make alterations in and repairs to the Premises.
20.2 Remedies. Upon any termination of this Lease as set forth in this Article 20, or as
required or permitted by law, Tenant shall immediately quit and surrender the Premises to Landlord, and
Landlord may, without further notice, enter upon, re-enter, possess and repossess the same by summary
proceedings, ejectment or otherwise, and again have, repossess and enjoy the same as if this Lease had
not been made, and in any such event Tenant and no person claiming through or under Tenant by virtue of
any law or an order of any court shall be entitled to possession or to remain in possession of the Premises
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but shall immediately quit and surrender the Premises, and Landlord at its option shall, notwithstanding
any other provision of this Lease, be entitled to recover from Tenant, as and for liquidated damages, the
sum of:
(a) all Basic Rent, Additional Rent and other amounts payable by Tenant hereunder
then due or accrued and unpaid; and
(b) for loss of the bargain, an amount equal to the aggregate of all unpaid Basic Rent
and Additional Rent which would have been payable if this Lease had not been terminated prior to the
end of the Term then in effect, discounted to its then present value in accordance with accepted financial
practice using a rate equal to six percent (6%) per annum; and
(c) all other damages and expenses (including attorneys' fees and expenses), which
Landlord shall have sustained by reason of the breach of any provision of this Lease.
20.3 Liquidated Damages. Nothing herein contained shall limit or prejudice the right of
Landlord, in any bankruptcy or insolvency proceeding, to prove for and obtain as liquidated damages by
reason of such termination an amount equal to the maximum allowed by any bankruptcy or insolvency
proceedings, or to prove for and obtain as liquidated damages by reason of such termination, an amount
equal to the maximum allowed by any statute or rule of law whether such amount shall be greater or less
than the excess referred to above.
20.4 Abandonment. If Tenant abandons the Premises, Landlord may, at its option and for so
long as Landlord does not terminate Tenant's right to possession of the Premises, enforce all of its rights
and remedies under this Lease, including the right to recover all Basic Rent, Additional Rent and other
payments as they become due hereunder. Additionally, Landlord shall be entitled to recover from Tenant
all costs of maintenance and preservation of the Premises, and all costs, including attorneys' and
receiver's fees, incurred in connection with the appointment of or performance by a receiver to protect the
Premises and Landlord's interest under this Lease.
20.5 Indemnity Survives. Nothing herein shall be deemed to affect the right of Landlord to
indemnification pursuant to Section 14.4 of this Lease.
20.6 Re-Entry. At the request of Landlord upon the occurrence of an Event of Default, Tenant
will immediately quit and surrender the Premises to Landlord or its agents, and Landlord may without
further notice enter upon, re-enter and repossess the Premises by summary proceedings, ejectment or
otherwise. The words "enter," "re-enter," and "re-entry" are not restricted to their technical legal
meanings.
20.7 Fees and Expenses. If either Landlord or Tenant is in default in the observance or
performance of any provision of this Lease, and an action is brought for the enforcement thereof in which
it is determined that said party was in default, the defaulting party shall pay to the non-defaulting party all
reasonable fees, costs and other expenses incurred by the non-defaulting party in connection therewith,
including reasonable attorneys' fees and expenses. If it is determined that said party was not in default,
then the party alleging said default shall pay to the other party all the aforesaid reasonable fees, costs and
expenses incurred by said party.
20.8 Landlord's Cure Rights. If Tenant defaults in the keeping, observance or performance of
any covenant, agreement, term, provision or condition herein contained, Landlord, without waiving such
default, may perform the same for the account and at the expense of Tenant (a) immediately or at any
time thereafter and without notice in the case of emergency or in case such default will result in a
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violation of any Legal or Insurance Requirement, or in the imposition of any Lien against all or any
portion of the Premises, and (b) in any other case if such default continues after thirty (30) days from the
date of the giving by Landlord to Tenant of notice of Landlord's intention so to perform the same. All
costs and expenses incurred by Landlord in connection with any such performance by it for the account of
Tenant and also all costs and expenses, including attorneys' fees and disbursements incurred by Landlord
in any action or proceeding (including any summary dispossess proceeding) brought by Landlord to
enforce any obligation of Tenant under this Lease and/or right of Landlord in or to the Premises, shall be
paid by Tenant to Landlord upon demand.
20.9 Remedies Not Exclusive. Except as otherwise provided in this Article 20, no right or
remedy herein conferred upon or reserved to Landlord or Tenant is intended to be exclusive of any other
right or remedy, and every right and remedy shall be cumulative and in addition to any other legal or
equitable right or remedy given hereunder, or now or hereafter existing. No waiver by Landlord or by
Tenant of any provision of this Lease shall be deemed to have been made unless expressly so made in
writing. Landlord and Tenant shall be entitled, to the extent permitted by law, to injunctive relief in case
of the violation, or attempted or threatened violation, of any provision of this Lease, or to a decree
compelling observance or performance of any provision of this Lease, or to any other legal or equitable
remedy.
21. ACCESS: RESERVATION OF EASEMENTS.
21.1 Landlord's Access. (i) Landlord and Landlord's agents and representatives and parties
designated by Landlord as having an interest in the Property shall have the right to enter into or upon the
Premises, or any part thereof, at all reasonable hours for the following purposes: (1) examining the
Premises; (2) making such repairs or alterations therein as may be necessary in Landlord's sole judgment
for the safety and preservation of the Premises; (3) erecting, maintaining, repairing or replacing wires,
cables, ducts, pipes, conduits, vents or plumbing equipment running in, to or through the Building; (4)
showing the Premises to prospective new tenants during the last twelve (12) months of the Term; or (5)
showing the Premises during the Term to any mortgagees or prospective purchasers of the Premises.
Landlord shall give Tenant three (3) Business Days prior written notice before commencing any non-
emergency repair or alteration.
21.2 Landlord, its agents and employees shall have the right at any time, (1) to change the
arrangement and/or location of public entrances, passageways, doors, doorways, corridors, elevators,
stairs, toilets or any other public parts of the Building; (2) to make repairs, alterations or improvements to
any portion of the Building; (3) to designate portions of the Building and the Property as Common Areas
and to change such designations from time to time in Landlord's sole discretion, (4) to change the name,
number or designation by which the Building may be known; or (5) to change any lawns, sidewalks,
driveways, parking areas or streets adjacent to or around the Building.
21.3 Emergency Access. Landlord may enter upon the Premises at any time in case of
emergency without prior notice to Tenant.
21.4 No Liability. Landlord, in exercising any of its rights under this Article 21, shall not be
deemed guilty of an eviction, partial eviction, constructive eviction or disturbance of Tenant's use or
possession of the Premises and shall not be liable to Tenant for same.
21.5 Minimum Inconvenience. All work performed by or on behalf of Landlord in or on the
Premises pursuant to this Article 21 shall be performed with as little inconvenience to Tenant's business
as is reasonably possible.
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21.6 Locks. Tenant shall not change any locks or install any additional locks on doors
entering into the Premises without immediately giving to Landlord a copy of any such lock key. If in an
emergency Landlord is unable to gain entry to the Premises by unlocking entry doors thereto, Landlord
may force or otherwise enter the Premises, without liability to Tenant for any damage resulting directly or
indirectly therefrom. Tenant shall be responsible for all damages created or caused by its failure to give
Landlord a copy of any key to any lock installed by Tenant controlling entry to the Building.
21.7 Reservation of Rights. Landlord reserves the right, from time to time, to make changes,
alterations, additions, improvements, repairs or replacements in or to, (i) those portions of the Premises
which Landlord is obligated to maintain and repair pursuant to Section 7.2, (ii) the other portions of the
Premises, the Building, and the Property, and (iii) to the fixtures and equipment in the Building as
Landlord may reasonably deem necessary to comply with any applicable Legal Requirements and/or to
correct any unsafe condition; provided, however, that there be no unreasonable obstruction of the means
of access to the Premises or unreasonable interference with Tenant's use of the Premises. Nothing
contained in this Article shall be deemed to relieve Tenant of any duty, obligation or liability of Tenant
with respect to making any repair, replacement or improvement or complying with any applicable Legal
Requirements.
22. ACCORD AND SATISFACTION. The receipt by Landlord of any installment of Basic Rent or
of any Additional Rent with knowledge of a default by Tenant under the terms and conditions of this
Lease shall not be deemed a waiver of such default. No payment by Tenant or receipt by Landlord of a
lesser amount than the rent herein stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any
check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other
remedy in this Lease provided.
23. SUBORDINATION.
23.1 Subordination. This Lease and the Term and estate hereby granted are and shall be
subject and subordinate to the lien of each mortgage which may now or at any time hereafter affect all or
any portion of the Premises or Landlord's interest therein and to all ground or master leases which may
now or at any time hereafter affect all or any portion of the Property (any such mortgage or ground lease
being herein called an "Underlying Encumbrance"). The foregoing subordination provisions shall be self-
operative and no further instrument shall be required to effect any such subordination; provided, however,
at any time and from time to time, upon not less than ten (10) days' prior notice by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord any and all reasonable instruments that may be necessary
or proper to effect such subordination, or to confirm or evidence the same.
23.2 Conveyance by Landlord. If all or any portion of Landlord's estate in the Property is sold
or conveyed to any person, firm or corporation upon the exercise of any remedy provided for in any
mortgage or by law or equity, such person, firm or corporation and each person, firm or corporation
thereafter succeeding to its interest in the Property (a) shall not be liable for any act or omission of
Landlord under this Lease occurring prior to such sale or conveyance, (b) shall not be subject to any
offset, defense or counterclaim accruing prior to such sale or conveyance, (c) shall not be bound by any
payment prior to such sale or conveyance of Basic Rent, Additional Rent or other payments for more than
one (1) month in advance (except prepayments in the nature of security for the performance by Tenant of
its obligations hereunder), and (d) shall be liable for the keeping, observance and performance of the other
covenants, agreements, terms, provisions and conditions to be kept, observed and performed by Landlord
under this Lease only during the period such person, firm or corporation shall hold such interest.
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23.3 Cure Rights. If an act or omission by Landlord would give Tenant the right to terminate
this Lease or to claim a partial or total eviction, Tenant will not exercise any such right until it has given
written notice of such act or omission, or, if any portion of the Premises becomes untenantable as the
result of damage from fire or other casualty, written notice of the occurrence of such damage, to the
holder of any Underlying Encumbrance whose name and address has previously been furnished to Tenant
in writing, and thereafter, until a reasonable period for remedying such act, omission or damage has
elapsed following such giving of such notice (but not less than thirty (30) days, or such longer period
afforded to Landlord under this Lease); provided that any such holder, with reasonable diligence
following the giving of such notice, commences and continues to remedy such act, omission or damage.
23.4 Reasonable Modifications. If, in connection with obtaining financing for the Property or
refinancing any mortgage encumbering the Property, the prospective Lender or Master Landlord requests
reasonable modifications to this Lease as a condition precedent to such financing or refinancing, then
Tenant hereby covenants and agrees not to unreasonably withhold, delay or condition its consent to such
modifications, provided such modifications do not increase the Basic Rent or Additional Rent, do not
increase the Security, do not reduce the length of the Term, do not affect the termination, extension and/or
expansion options, do not materially and adversely affect the leasehold interest created by this Lease and
do not materially and adversely affect the manner in which Tenant's operations are conducted at the
Premises.
24. TENANT'S REMOVAL.
24.1 Surrender. Upon the Termination Date, Tenant shall surrender the Premises to Landlord
in the condition same is required to be maintained under Article 7 of this Lease, and broom clean. Any
personal property which shall remain in any part of the Premises after the Termination Date shall be
deemed to have been abandoned, and either may be retained by Landlord as its property or may be
disposed of in such manner as Landlord may see fit; provided, however, that, notwithstanding the
foregoing, Tenant will, upon request of Landlord made not later than thirty (30) days after the
Termination Date, promptly remove from the Premises any such personal property.
24.2 Holding Over. If Tenant, or any assignee or subtenant of Tenant, holds over possession
of the Premises beyond the Termination Date, such holding over shall not be deemed to extend the Term
or renew this Lease but such holding over shall continue upon the terms, covenants and conditions of this
Lease except that Tenant agrees that the charge for use and occupancy of the Premises for each calendar
month or portion thereof that Tenant holds over (even if such part shall be one day) shall be a liquidated
sum equal to one-twelfth (1/12th) of two (/2) times the Basic Rent and Additional Rent required to be paid
by Tenant during the calendar year preceding the expiration or earlier termination of this Lease. The
parties recognize and agree that the damage to Landlord resulting from any failure by Tenant to timely
surrender possession of the Premises will be extremely substantial, will exceed the amount of the monthly
Basic Rent and Additional Rent payable hereunder and will be impossible to accurately measure. If the
Premises are not surrendered upon the Termination Date, Tenant shall indemnify, defend and hold
harmless Landlord against any and all losses and liabilities resulting therefrom, including, without
limitation, any claims made by any succeeding tenant founded upon such delay, so long as Landlord has
notified Tenant that Landlord has executed a lease or other occupancy agreement for all or any portion of
the Premises. Nothing contained in this Lease shall be construed as a consent by Landlord to the
occupancy or possession by Tenant of the Premises beyond the Termination Date, and Landlord, upon
said Termination Date, shall be entitled to the benefit of all legal remedies that now may be in force or
may be hereafter enacted relating to the immediate repossession of the Premises. Tenant shall, at its sole
cost and expense, take all actions required to remove any assignee or subtenant of Tenant, or other party
claiming rights to the Premises under or through Tenant upon the expiration or earlier termination of the
Term. The provisions of this Article shall survive the Termination Date.
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25. BROKERS. Tenant represents to Landlord that Tenant has not dealt with any real estate broker
or sales representative in connection with this transaction other than the Broker; the phrase "real estate
broker or sales re resentative" shall be deemed to include any finder/consultant retained by Tenant, but
whose fees are to be paid by Landlord. Tenant agrees to indemnify and hold harmless Landlord,
Landlord's managing agent, and the respective directors, officers, employees and partners of the
foregoing entities, or of any partner of the foregoing entities, from and against any threatened or asserted
claims, liabilities, losses or judgments (including reasonable attorneys' fees and disbursements) by any
real estate broker or sales representative (other than those set forth above) based on alleged contacts
between such broker or sales representative and Tenant which have resulted in allegedly providing such
broker or sales representative with the right to claim a commission or finder's fee in connection with this
Lease. The provisions of this Article shall survive the Termination Date.
26. NOTICES. All notices, demands, requests, consents, approvals, offers, statements and other
instruments or communications required or permitted to be given hereunder shall be in writing and shall
be delivered by (a) certified mail, postage prepaid, or (b) a nationally recognized overnight delivery
service (such as Federal Express), addressed to the addresses set forth in the Basic Lease Provisions.
Notices or other communications required or permitted by this Agreement or by law to be served on,
given to or delivered to either party by the other party to this Agreement shall be deemed duly served,
given or delivered when delivered to the party to whom it is addressed (or when delivery is first refused
or rejected). Either party may designate, by similar written notice to the other party, any other address for
such purposes. Notwithstanding anything to the contrary contained herein, all bills, statements and
building communications from Landlord to Tenant may be served by ordinary mail or otherwise delivered
to Tenant or left at the Premises.
27. NATURE OF LANDLORD'S OBLIGATIONS. Anything in the Lease to the contrary
notwithstanding, no recourse or relief shall be had under any rule of law, statute or constitution or by any
enforcement of any assessments or penalties, or otherwise or based on or in respect of this Lease (whether
by breach of any obligation, monetary or non-monetary), against Landlord, it being expressly understood
that all obligations of Landlord under or relating to this Lease are solely obligations payable out of the
Property and are compensable solely therefrom. All such liability is and is being expressly waived and
released as a condition of, and in consideration for, the execution of this Lease, and Tenant expressly
waives and releases all such liability as a condition of, and as in consideration for, the execution of this
Lease by Landlord. Notwithstanding anything to the contrary set forth in this Lease, Tenant agrees that
there shall be absolutely no personal liability on the part of Landlord or on the part of any individual or
entity comprising Landlord, including, without limitation, the members, partners, directors, trustees,
and/or officers of Landlord or of such members, partners or trustees of Landlord, with respect to any of
the terns, covenants and conditions of this Lease. Tenant shall have no right and shall not assert any
claim against or have recourse to Landlord or any individual or entity comprising Landlord, and no other
property or assets of Landlord shall be subject to levy, execution or other enforcement procedures for the
satisfaction of Tenant's remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder, or Tenant's use and occupancy of the Premises; such exculpation of personal liability
to be absolute and without any exception whatsoever. If Landlord transfers its interest in the Building,
the Landlord named herein (and in case of any subsequent transfer, the then assignor) shall be
automatically freed'and relieved from and after the date of such transfer of all liability as respects the
performance of any of Landlord's covenants and agreements thereafter to be performed, and such
transferee shall be thereafter automatically bound (and as further evidence thereof shall promptly execute
a document to said effect) by all of such covenants and agreements, it being intended that Landlord's
covenants and agreements shall be binding on Landlord, its successors and assigns only during and in
respect of their successive periods of such ownership. The term "Landlord," as used in this Lease, shall
mean only the owner of the title to the Premises as of the date in question.
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28. SECURITY DEPOSIT.
28.1 Security. (a) Concurrently with the execution of this Lease, Tenant shall deposit with
Landlord the Security, which shall be held by Landlord as security for the full and faithful performance
by Tenant of the terms and conditions by it to be observed and performed hereunder. If any Basic Rent,
Additional Rent or other sum payable by Tenant to Landlord becomes overdue and remains unpaid, or if
Landlord makes any payments on behalf of Tenant, or if Tenant fails to perform any of the terms and
conditions of this Lease, then Landlord, at its option, and without prejudice to any other remedy which
Landlord may have on account thereof, may appropriate and apply said Security, or so much thereof as
may be required to compensate or reimburse Landlord, as the case may be, toward the payment of Basic
Rent, Additional Rent or other such sum payable hereunder, or loss or damage sustained by Landlord due
to the breach or failure to perform on the part of Tenant. In no event shall Landlord be obligated to apply
the Security; and the Landlord's right to bring an action or special proceeding to recover damages or
otherwise to obtain possession of the Premises before or after Landlord's declaration of the termination of
this Lease for nonpayment of rent, or for any other reason, shall not be affected by reason of the fact that
Landlord holds the Security. The Security will not be a limitation on the Landlord's damages or other
rights and remedies available under this Lease, or at law or equity; nor shall the Security be a payment of
liquidated damages. The Security will not be an advance of the Basic Rent or Additional Rent. If
Landlord uses, applies, or retains all or any portion of the Security, Tenant will restore the Security to its
original amount immediately upon demand from Landlord. Tenant shall be in default if Tenant fails to
strictly comply with this requirement to restore the used portion of the Security. Landlord shall not be
required to keep the Security separate from its own funds, and may commingle the Security with its own
funds. Landlord shall have no fiduciary responsibilities or trust obligations whatsoever with regard to the
Security and shall not assume the duties of a trustee for the Security. Landlord shall have no obligation to
pay interest on the Security to Tenant nor shall Landlord be required to keep the Security in an interest
bearing account. The Security shall not be mortgaged, assigned, or encumbered by Tenant, and neither
Landlord nor its successors or assigns shall be bound by any such mortgagee, assignment or
encumbrance. The acceptance by Landlord of the Security submitted by Tenant shall not render this
Lease effective unless and until Landlord shall have executed and delivered to Tenant a fully executed
copy of this Lease.
(b) If Tenant is in default under this Lease more than two (2) times within any
twelve (12)-month period, irrespective of whether or not such default is cured, then, without limiting
Landlord's other rights and remedies provided for in this Lease or at law or equity, the Security shall
automatically be increased by an amount equal to the greater of. (i) one hundred fifty percent (150%) of
the original Security, or (ii) three (3) months then current Basic Rent, which shall be paid by Landlord on
demand.
28.2 Return of Security. Upon the full compliance by Tenant of all of the terms of this Lease,
and the prompt payment of all sums due hereunder, as and when they fall due, any part of the Security not
used, applied, or retained by Landlord shall be returned in full, without interest, to Tenant within thirty
(30) days after the end of the Term, subject to Landlord's final inspection of the Premises. However, if
Landlord, in its sole discretion, has sufficient evidence that the Security has been assigned to an assignee
of this Lease, Landlord may return the Security to the assignee and Landlord shall thereupon be released
by Tenant from all liability for the return of the Security to Tenant.
28.3 Ba_nkruptcv. In the event of bankruptcy or other debtor-creditor proceeding against
Tenant, such Security shall be deemed to be applied first to the payment of rent and other charges due
Landlord for all periods prior to filing of such proceedings.
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28.4 Transfer of ??curity. Upon: (i) a sale of the Building or any part of Property of which
the Premises forms a part (including to a mortgagee upon foreclosure of its mortgage), or a lease of the
Building, (ii) any transfer of title to the Property, or any assignment of Landlord's interest under this
Lease (including to a mortgagee upon foreclosure of its mortgage), Landlord shall have the right to
transfer the Security to the purchaser, building Tenant, transferee, or assignee of its interests, as the case
may be, and Landlord shall provide Tenant with the name and address of such purchaser, Tenant,
transferee, or assignee and shall thereupon be released by Tenant from all liability for the return of the
Security; and Tenant agrees to look solely to the said purchaser, Tenant or assignee for the return of the
Security. It is hereby agreed that the provisions of this Section shall apply to every transfer or assignment
made of the Security to a new Landlord.
29. MISCELLANEOUS.
29.1 Amendments in Writin . This Lease may not be amended or modified, nor may any
obligation hereunder be waived, orally. No such amendment, modification, termination or waiver shall be
effective unless in writing and signed by the party against whom enforcement thereof is sought.
29.2 N Waiver of Future Performance. No waiver by Landlord of any obligation of Tenant
hereunder shall be deemed to constitute a waiver of the future performance of such obligation by Tenant.
9.3 Provisions Severable. If any provision of this Lease or any application thereof shall be
invalid or unenforceable, the remainder of this Lease and any other application of such provision shall not
be affected thereby.
29.4 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto, except as provided in Article
16.
29.5 Quiet Eniovment. Upon due performance of the covenants and agreements to be
performed by Tenant under this Lease, Landlord covenants that Tenant shall and may at all times
peaceably and quietly have, hold and enjoy the Premises during the Term, without molestation or
hindrance by Landlord or any party claiming through or under Landlord.
29.6 Table of Contents and Article Headings. The table of contents and the article headings
are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
29.7 Counterparts. This Lease may be executed in several counterparts, each of which when
so executed and delivered, shall constitute an original, fully enforceable counterpart for all purposes, all
of which, taken together, shall constitute one single instrument.
29.8 No Surrender. No act or thing done by Landlord or Landlord's agents during the Term
shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender
shall be valid unless in writing and signed by Landlord. No employee or agent of Landlord shall have
any authority to accept the keys to the Premises prior to the Termination Date and the delivery of keys to
any employee or agent of Landlord shall not operate as an acceptance of a termination of this Lease or an
acceptance of a surrender of the Premises.
29. Statements and ills. Landlord's failure during the Term to prepare and deliver any of
the statements, notices or bills set forth in this Lease shall not in any way cause Landlord to forfeit or
surrender its rights to collect any amount that may have become due and owing to it during the Tenn.
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29.10 Tenant's Financials. Tenant shall keep proper books and records of account in
accordance with generally accepted accounting principles consistently applied. Tenant shall deliver to
Landlord, within one hundred eighty (180) calendar days after the close of each of its fiscal years, a
balance sheet and statement of income and expense for such year (separately setting forth the expenses of
the Premises). In addition, Tenant shall provide to Landlord, within ten (10) days after request, with such
other information with respect to Tenant as Landlord may reasonably request from time to time. All
financial statements shall include a complete comparison with the figures for the preceding year, and shall
be certified by (a) the chief financial officer of Tenant or, (b) if prepared by any accounting firm, by such
accounting firm.
29.11 No Offer. The submission of this Lease to Tenant for examination does not constitute an
offer to lease the Premises on the terms set forth herein, and this Lease shall become effective as a lease
agreement only upon the execution and delivery of the Lease by Landlord and Tenant.
29.12 Access. Subject to all applicable Legal Requirements and to Landlord's rules and
regulations, Tenant shall be permitted keyed access to the Premises twenty-four (24) hours per day, seven
(7) days per week.
29.13 Arbitration. In any case in which it is provided by the terms of this Lease that any matter
be determined by arbitration, the same shall be settled by arbitration in the County seat of the County in
which the Property is located in accordance with the Rules of the American Arbitration Association (or its
successor then existing) by a panel of three (3) arbitrators with the non-prevailing party responsible for all
legal fees and expenses. The determination in such arbitration proceeding shall be conclusive upon the
parties, and judgment upon any award or decision may be entered in any court having jurisdiction thereof.
The costs, fees, and expenses of the arbitrator or arbitrators, and/or the American Arbitration Association
shall be shared equally by the parties thereto unless otherwise provided in the arbitrators' decision.
29.14 (a) Relocation. Landlord hereby reserves the right, at its sole option, to relocate Tenant
to other space within the Building (the "New Space") at any time during the Term so long as the
following preconditions are satisfied:
(i) The rentable square footage of the New Space is the same as, or within
100 square feet of (plus or minus), the rentable square footage of the Premises; and
(ii) Landlord, at its sole cost and expense, completes the New Space and
prepares the same for Tenant's occupancy so that the level of finish therein is reasonably comparable to
the level of finish of the Premises. If Landlord elects to exercise its relocation right, Landlord shall notify
Tenant of said exercise and of the estimated date of the relocation, which date shall not be less than sixty
(60) days after the date of Landlord's notice.
(b) Landlord's Reimbursement. Within twenty (20) days following notice given by
Landlord stating that the rentable square footage of the New Space satisfies that requirement of clause
a i above, and that the New Space is substantially completed in accordance with the requirements of
clause (a) ii) above, Tenant shall vacate the Premises and move into the New Space. Landlord agrees to
reimburse Tenant for all reasonable costs and expenses incurred by Tenant in connection with (i) moving
its equipment, furniture and other personal property from the Premises to the New Space, (ii) installing its
telephone and computer systems in the New Space and (iii) installing its identification sign at the entrance
to the New Space; said reimbursement shall be made within thirty (30) days following Landlord's receipt
of evidence reasonably satisfactory to it setting forth in reasonable detail the costs and expenses incurred
by Tenant and a description of services performed.
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(c) Amendments to Lease. If Landlord exercises its right to relocate Tenant,
Landlord and Tenant hereby agree, within twenty (20) days after Tenant takes possession of the New
Space, to promptly amend those provisions of this Lease which are affected by the relocation and the
change, if any, in the rentable square footage. If the amount of the Basic Rent and Tenant's Share are
affected, the Basic Rent and Additional Rent payable or paid for the calendar month in which Tenant
moves into the New Space shall be equitably adjusted, and Tenant shall pay to Landlord any balance
owing to Landlord within five (5) Business Days after the date Tenant takes possession of the New Space,
or alternatively, Landlord shall reimburse to Tenant any monies owing to Tenant within five (5) Business
Days after the date Tenant takes possession of the New Space.
(d) After Tenant takes possession of the New Space, the term "Premises," as used in
this Lease, shall be deemed to refer to and include the New Space.
30. USA PATRIOT ACT. Tenant represents, warrants and covenants that neither Tenant nor any of
its partners, officers, directors, members or shareholders (i) is listed on the Specially Designated
Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the
Treasury ("OFAC") pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
("Order") and all applicable provisions of Title III of the USA Patriot Act (Public Law No. 107-56
(October 26, 2001)); (ii) is listed on the Denied Persons List and Entity List maintained by the United
States Department of Commerce; (iii) is listed on the List of Terrorists and List of Disbarred Parties
maintained by the United States Department of State, (iv) is listed on any list or qualification of
"Designated Nationals" as defined in the Cuban Assets Control Regulations 31 C.F.R. Part 515; (v) is
listed on any other publicly available list of terrorists, terrorist organizations or narcotics traffickers
maintained by the United States Department of State, the United States Department of Commerce or any
other governmental authority or pursuant to the Order, the rules and regulations of OFAC (including
without limitation the Trading with the Enemy Act, 50 U.S.C. App. 1-44; the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701-06; the unrepealed provision of the Iraq Sanctions Act, Publ.
L. No. 101-513; the United Nations Participation Act, 22 U.S.C. § 2349 as-9; The Cuban Democracy Act,
22 U.S.C. §§ 60-01-10; The Cuban Liberty and Democratic Solidarity Act, 18 U.S.C. §§ 2332d and 233;
and The Foreign Narcotic Kingpin Designation Act, Publ. L. No. 106-120 and 107-108, all as may be
amended from time to time); or any other applicable requirements contained in any enabling legislation or
other Executive Orders in respect of the Order (the Order and such other rules, regulations, legislation or
orders are collectively called the "Orders"); (vi) is engaged in activities prohibited in the Orders; or (vii)
has been convicted, pleaded nolo contendere, indicted, arraigned or custodially detained on charges
involving money laundering or predicate crimes to money laundering, drug trafficking, terrorist-related
activities or other money laundering predicate crimes or in connection with the Bank Secrecy Act (31
U.S.C. §§ 5311 et sec.).
31. RIGHT OF FIRST REFUSAL
31.1 Right of First Refusal.
(a) If at anytime Landlord receives from a prospective tenant a letter of intent or
other letter containing an offer to lease the remaining space in "Area C" (the "Expansion Space") which
Landlord intends to accept, Landlord agrees to deliver to Tenant a notice setting forth all of the terms
upon which Landlord would lease the Expansion Space to such prospective tenant (the "Offer Notice")
and an offer to Tenant to lease such Expansion Space on such terms (the "Expansion Space Option").
(b) Provided that Tenant is not in default of any of the terms and provisions of this
Lease and is in occupancy of the entire Premises as of the date Landlord delivers the Offer Notice to
Tenant, Tenant shall have the right to exercise the Expansion Space Option by delivering to Landlord a
29
notice accepting the offer contained in the Offer Notice (the "Acceptance Notice") within ten (10) days
after receipt of the Offer Notice, time being of the essence with the delivery of such notice. If Tenant
fails to timely exercise the Expansion Space Option, Tenant shall be deemed to have waived its
Expansion Space Option. If Tenant shall timely deliver the Acceptance Notice, Landlord shall, in its sole
and absolute discretion, have the option of leasing the Expansion Space to Tenant for the lease term set
forth in the Offer Notice or for a term expiring on the date of the Expiration Date of the Premises.
32. EXTENSION OPTION.
32.1 Extension Period. Provided Tenant is not in default of any of the terms and conditions
contained in this Lease, either on the date of its exercise, or on the effective date thereof, Tenant shall
have one (1) option to extend the Term for a period of three (3) years, from and after the date upon which
this Lease would otherwise expire (the "Extension Period").
32.2 Tenant's Exercise. Tenant's exercise of the Extension Period shall be by notice to
Landlord given on or before the date which is six (6) months (but no earlier than twelve (12) months)
prior to the scheduled Termination Date, time being of the essence. Tenant agrees that it shall have
forever waived its right to exercise the Extension Period if it fails, for any reason, to give such notice to
Landlord by the time provided herein for the giving of such notice.
32.3 Determination of Basic Rent. The Extension Period shall be upon the same terms and
conditions as are in effect immediately preceding the commencement of Extension Period; provided,
however, that Tenant shall have no right or option to extend the Term for any period of time beyond the
expiration of the Extension Period, and, provided further, that during the Extension Period, Basic Rent
shall be determined as follows:
(a) The Basic Rent during the Extension Period shall be at the greater of (a) $3.54
per square foot of the Premises per annum, or (b) the Market Rent.
(b) Market Rent shall be determined by mutual agreement of the Landlord and
Tenant. If the parties are unable to agree on the Market Rent within thirty (30) days after Tenant's
exercise of the Extension Period, the parties shall choose a single licensed real estate appraiser who shall
determine the Market Rent. The cost of said real estate appraiser shall be borne equally by the parties. If
the parties are unable to agree on a licensed real estate appraiser within forty-five (45) days after Tenant's
exercise of the Extension Period, each party shall select one licensed real estate appraiser to determine the
Market Rent (each party being responsible for the costs and expenses of the appraiser it selects). All
appraisals shall be rendered within thirty (30) days after appointment of the respective appraiser. If the
difference between the two appraisals is twenty percent (20%) or less of the lower appraisal, then the
Market Rent shall be the average of the two appraisals. If the difference between the two appraisals is
greater than twenty percent (20%) of the lower appraisal, the two appraisers shall select a third licensed
real estate appraiser to appraise the Market Rent. The Market Rent shall, in such case, be the average of
the three (3) appraisals. The cost of the third appraisal shall be borne equally by the parties. All
appraisers selected shall have at least ten (10) years' relevant experience with leasing of industrial and
warehouse space in the Harrisburg, Pennsylvania submarket. The parties shall work in good faith to
cause any appraisal process to be completed at least thirty (30) days prior to the commencement date of
the Extension Period.
32.4 Loss of Extension Period. Any termination, expiration, cancellation or surrender of this
Lease shall terminate any right or option for the Extension Period if it has not yet been exercised.
Landlord shall have the right, for thirty (30) days after receipt of notice of Tenant's election to exercise
the Extension Period, to reject Tenant's election if Tenant gave such notice while Tenant was in default in
30
the performance of any of its obligations under the Lease, and such rejection shall automatically render
Tenant's election to exercise such option null and void and of no effect.
32.S Confirmation of Extension Period. If Tenant duly exercises the Extension Period, the
"Term" shall be automatically extended for the Extension Period. Within thirty (30) days after request of
either party following the effective exercise of the Extension Period, Landlord and Tenant shall execute,
acknowledge and deliver to each other duplicate originals of an instrument confirming the extended
Term, and the new Termination Date.
32.6 No Severance Extension Period. The Extension Period may not be severed from the
Lease or separately sold, assigned or otherwise transferred.
31
written.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above
WITNESS:
LANDLORD:
MECHANICSBURG 2007, LP
By: Hampshire Partners Fund VII, L.P.,
a Delaware limited partnership
By: Hampshire Partners VII, LLC,
its General Partner
By:
WITNESS:
TENANT:
SMART OK SO IONS, INC.
By:
N me: J es Soule
T tle: President
SCHEDULE A
DESCRIPTION OF LAND
First Described:
All that oostain lot at vim of wound sitaate in do Xowndt of Lwar Allen, County of Cutcbarlemd and
_C?unomarerhkhP?yl?ada..lxntttdod.?t? _.....>!!__.._ --.-_-._ --
Beginning at a point =dwd by a rarlmed spfloo- in the centr line of SiateR FNighway..Rouae.No.414lradiag_....
ihr lteohtmiordraig io Shophnrddowm somotj= Banana a Andasor-Rcad; -aid Poiot-boiag et-the
Northern right of way lino of the Pauuyhror" Twup0m; Wawa =aft elm the center line of Route
No. 114 North 20' 23' Wad 592.89 feet to a pout of owiv; Waroo od timing elm$ add neuter Has in a
Northerly direction on a outve to rise K having a radius of 1910.08 that fir the am distaoae of 530.06
feat to a, nail in line of lead farzowlly of L. ti. Andason, now of R,. G. Mayberry thsrruo alacg neat lsrd__...__.__......
North 66° MEW 401.47 foot to a at k9 thanca will dM said land North 2313V West 100 abut to apips
in *a of load of the Christian B. Hen Estate; bow elo t; seal land of the Flan Blots for the four
%B wog causes and•distanoes: (1) North 66' Beat 1458.83 he to a ssoa; (2) North 66° 0 300 Beat
203.23 feet to a post; (3) South 60 1' Baal 432.03 fast to a de* and (4) south 42' 17` But 670.34 foot to
a pits at a comet of lard now or late of CM warm; thence slang aid land of Warns the three folluwlag
conies and distamm (1) Sotath 53° dW Wat 764,26 feat to a point; (2) Sash 28' 44' Be* 760.52 fed to
a stone and a cherry tree, and (3) south 36" 42' Wee 6439 he to a delve on the Northerly right of way
line of the Paosylvania Tlaapilm; thence along aid right of way litre in a Weaterly direction on a carve
to the left having a radius of 115$9.19 ibat for the am distance of 1059.04 he to a point of tltaoew
thaaoe owdoidog aloof said tight of way lion North 86" 25' Wen 544-52 feet to the point or place of
beginning.
Ali that caw<taln lot or piece of ground aitedc in the Towaahip of Upper Allen, County of Cumberland and
ConmoawealthofPaamylvania bounded-anddesosibsdiafollewa:_._____._._...._.._.__...__.__...._....._.._..__.---........_.._...__..........._.._._....__
Begiming at a point in the Northern right of way line of Penmsyl nle TYumpilte at corner of lands of the
Huri&n Ana bftbial Davdopnaont Comm am; thence ato odiog along the une of said lend of the
Harrisbarg Arai hu lastr6d DwMopox* Corporation North 360 4T Bast 64.39 feet to a point; dww by
the same North 28" 44' West 760.52 feet to a pin dmw still by lands of the mw North 530 46' Bad
76426 feat tom inch pin in the line of loads of the Beroaadn Pbaiy Blots; thence along the Una of W&
of the Bamyamin Eberly Bataw South 42" or 30" Bast 178.20 feet to a bib; thence by the cams south 57°
(W 40" Bad 715.09 to to a cub; d mw by tho ammo North 490 IT 05" Bast 30029 loot to a pin; thaws
by the sure South I P IT SO" End 496.58 loot to a h* thaws by the sumo Nodh- 73° 19120" Bak 33
fact to a mere; tlhetwe still by said kids of the B@*w du Healy Estate South 10" 191300 Bak 683.92 ieet
to a palm in the Northern right of way Una of the Penuyiva k Tltmpiloe atx=A thence along the
Northam right of way line of the Pesmsylvsmis Tumpiice North 77° 43,250 Wed 831.20 feat to a point;
thence coudo lag along too Northern Nine of the Pawaylvtmia TumpOw by the arc of a circle, vxft to
the lad in a Wedward direction, nerd circle hsvbg a radiae d-11359.19 trot, the am dManoe of 691.79
fed to a point in acid hi& of way line of the Petmaylvaoia TtinWft at comer of land of the Hwdsburg
Aron bb* W Devnlop,ned Corporation, athresaid, at the point and place of bagb ft
Fins Described and Second Daoribed being together dedg MW u Tax Map Pared No. 42-10-0646"
in the Tax Asseasmeat Office of Ctmabaisnd Cowry, Pamuylvania.
A-1
MMM32
A-1
SCHEDULE B
DEMISED PREMISES
B-1
SCHEDULE C
CONFIRMATION OF COMMENCEMENT AGREEMENT
THIS CONFIRMATION AGREEMENT
(the "Landlord"), a
. and
address at
(this "Agreement") made as of ,
having an
(the "Tenant"), a
WITNESSETH
200, between
address at
_, having an
WHEREAS, Landlord and Tenant have previously entered into that certain Lease Agreement
dated (the "Lease") covering certain premises located in , located in the
City of , State of as more particularly described in the Lease, and
WHEREAS, Landlord and Tenant wish to set forth their agreements as to the commencement of
the term of the Lease:
NOW THEREFORE, in consideration of the foregoing, the Parties hereto mutually agree as
follows:
1) For the purpose of confirming the establishment of the Commencement Date, as required
by the provisions of the Lease, Landlord and Tenant hereby agree that:
a) The date of is hereby established as the Commencement Date
referred to in the Lease.
b) The date of is hereby established as the "Termination Date" of the
Term referred to in the Lease (unless extended or sooner terminated in accordance with the Lease).
C) The date of is hereby established as the "Rent Commencement
Date" upon which Tenant's obligations to pay Basic Rent shall commence pursuant to the Lease.
Tenant's obligations to pay Additional Rent pursuant to Sections of the Lease shall commence
effective as of 7
2) The Rentable Size of the Premises is square feet and the Rentable Size of the
Building as of the Commencement Date is square feet.
3) Tenant's Share, as defined in the Lease, as of the Commencement Date is %.
4) This Agreement and each and all provisions hereof shall inure to the benefit of, or bind,
as the may require, the Parties hereto and their respective heirs, successors and assigns.
C-1
written.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
WITNESS:
WITNESS:
LANDLORD:
By:
Name:
Title:
TENANT:
[Smart Book Solutions, Inc. ]
By:
Name: James Soule
Title: President
C-2
SCHEDULE D
LANDLORD'S WORK
1. Landlord will provide the Premises in "as-is", "broom-swept" condition, subject to
Landlord performing the work (the "Lanldord's Work") described on Schedule D-1 attached hereto. The
Landlord's Work shall be performed at Landlord's sole cost and expense. Landlord shall perform
Landlord's Work in a good and workmanlike manner and in compliance with all Legal Requirements.
2. If any Legal Requirements require the removal of the "spaghetti" type pipes from the
ceiling of the Premises, Landlord agrees to remove such pipes, at its sole cost and expense, and shall
perform such removal in such a manner so as to prevent any unreasonable disruption to Tenant's
business..
D-1
SCHEDULE D-1
Remove outside enclosure to door 3 to the Premises and repair the dock plate on same.
Fill in pit in warehouse portion of the Premises with concrete.
3. All mechanical systems in the Building shall be in good working order and in compliance
with Legal Requirements (including the sprinkler system).
ADDENDUM 1
DEFINITIONS
As used in this Lease, the following terms have the following respective meanings:
Acceptance Notice: defined in Section 31(b).
2. Additional Rent: defined in Section 3.2.
3. Alterations: Tenant's alterations, improvements, additions and/or modifications in, on or
about the Premises.
4. Basic Rent: defined in Section 3.1 and specified in the Basic Lease Provisions.
Term.
Basic Rent Payment Dates: the first day of each consecutive calendar month during the
Buildin : defined in the Basic Lease Provisions.
7. Business Days: shall mean any day other than a Saturday, Sunday or Federal or State of
Pennsylvania legal holiday.
Commencement Date: defined in Section 2.2(b).
9. Common Areas: shall mean those areas of the Property, wherever located, which have
been designated and improved from time to time for the common use by or for the benefit of more than
one occupant of the Property or which are used in connection with the maintenance or operation of the
Property, including, without limitation, all parking areas, drive lanes and access roadways, curbs,
sidewalks, medians, landscaped areas and planters; all porch and lobby areas; corridors; hallways;
passageways; public restrooms; security stations; storage, equipment, machine, meter, mechanical,
plumbing, computer, telephone and electrical rooms, stations, conduit, shafts, raceways and the like;
stairs, ramps, elevators, truck serviceways; loading areas; garbage, trash and refuse disposal facilities; and
with respect to all the foregoing, all equipment and appurtenances thereto; but excluding all portions of
the Property which are designated and intended for the use by a single occupant of the Property. The
definition of Common Areas shall not be construed as a representation or warranty that any such areas are
or from time to time will be available at the Property.
10. Discharge: defined in Section 11.1.
11. Environmental Laws: all statutes, regulations, codes and ordinances of any governmental
entity, authority, agency and/or department relating to (i) air emissions, (ii) water discharges, (iii) noise
emissions, (iv) air, water or ground pollution or (v) any other environmental or health matter, including,
but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et M. and the regulations promulgated thereunder.
12. Estimated Operating Expenses: defined in Section 4.2.
13. Events of Default: defined in Article 19.
14. Excusable Delay: any delay caused by governmental action, or lack thereof; shortages or
unavailability of materials and/or supplies; labor disputes (including, but not limited to, strikes, slow
downs, job actions, picketing and/or secondary boycotts); fire or other casualty; delays in transportation;
acts of God; directives or requests by any governmental entity, authority, agency or department; any court
or administrative orders or regulations; adjustments of insurance; acts of declared or undeclared war, acts
of terrorism, public disorder, riot or civil commotion; or by anything else beyond the reasonable control
of Landlord, including delays caused directly or indirectly by an act or a failure to act by Tenant or
Tenant's Visitors.
15. Expansion Space: defined in Section 31(a).
16. Expansion Space Option: defined in Section 31(a).
17. Expense Statement: defined in Section 4.2.
18. Extension Period: defined in Section 32.1.
19. Fair Market Value: the amount a willing and independent buyer would pay for the
Property to a willing and independent seller (neither party being forced to buy or sell) if the Building were
being used for the purposes permitted by this Lease.
20. Insurance Requirements: all terms of any insurance policy maintained by Landlord with
respect to the Property and all requirements of the National Board of Fire Underwriters (or any other body
exercising similar function) applicable to or affecting all or any part of the Premises.
21. Land: defined in the Basic Lease Provisions.
22. Landlord: the party defined as such in the first paragraph of this Lease, including at any
time after the date hereof, the then owner of Landlord's interest in the Premises.
23. Landlord's Insurance Costs: defined in Section 14.2.
24. Lease Year: each calendar year, or partial calendar year, during the Term.
25. Legal Requirements: all statutes, codes, ordinances, regulations, rules, orders, directives
and requirements of any governmental entity, authority, agency and/or department, which now or at any
time hereafter may be applicable to the Property or any part thereof, including, but not limited to, all
Environmental Laws.
26. Lender: the holder of any mortgage or deed of trust which may now or hereafter
encumber the Property, including all renewals, modifications, consolidations, replacements and
extensions thereof.
27. License. defined in Section 8.3(a).
28. Lien: any mortgage, pledge, lien, charge, encumbrance or security interest of any kind,
including any inchoate mechanic's or materialmen's lien.
29. Major Work: defined in Section 7.5(b).
30. Master Landlord: shall mean the Landlord under any ground lease or lease of all or any
portion of the Property, subject to the space leases, which may now or hereafter affect all or any portion
of the Property.
11
31. Monthly Expense Payment: defined in Section 4.3.
32. Monthly Tax Payment: defined in Section 4.3.
33. Net Award: any insurance proceeds or condemnation award payable in connection with
any damage, destruction or Taking, less any expenses incurred by Landlord in recovering such amount.
34. Net Rental Proceeds: (a) in the case of a sublease, the amount by which the aggregate of
all rents, additional charges or other consideration payable under a sublease to Tenant by the subtenant
(including sums paid for the sale or rental of Tenant's fixtures, leasehold improvements, equipment,
furniture or other personal property) exceeds the sum of (i) the Basic Rent plus all amounts payable by
Tenant pursuant to the provisions hereof during the term of the sublease in respect of the subleased space,
(ii) actual brokerage commissions, providing same are at prevailing rates, due and owing to a real estate
brokerage firm, and (iii) the then net unamortized or undepreciated cost of the fixtures, leasehold
improvements, equipment, furniture or other personal property included in the subletting; and (b) in the
case of an assignment, the amount by which all sums and other consideration paid to Tenant by the
assignee of this Lease for or by reason of such assignment (including sums paid for the sale of Tenant's
fixtures, leasehold improvements, equipment, furniture or other personal property) exceeds the sum of (i)
actual brokerage commissions, provided same are at prevailing rates due and owing to a real estate
brokerage firm, and (ii) the then net unamortized or undepreciated cost of the fixtures, leasehold
improvements, equipment, furniture or other personal property sold to the assignee.
35. New Space: defined in Section 29.14.
36. Occupant: defined in Section 11.4.
37. OFAC: defined in Section 31.1.
38. Offer Notice: defined in Section 31(a).
39. Operating Expenses: those costs or expenses paid or incurred by Landlord in connection
with the ownership, operation, management, maintenance, repair and replacement of the Property or any,
portion thereof, including, but not limited to, the cost of Common Area electricity and other utilities;
sewer meter charges; water, exterminating; Landlord's Insurance Costs; snow and ice removal;
maintenance and cleaning of the parking lots and driveways (including resurfacing and restriping);
regulation of traffic; landscape and grounds maintenance; maintenance, repair and replacement of utility
systems; maintenance, repairs and replacements of any kind for which Landlord is not reimbursed;
painting and/or sealing of the exterior of the Building and the Common Areas; maintenance, repair and
replacement of worn out mechanical or damaged equipment; management fees (which shall be at least
three percent (3%) of the aggregate basic rent and additional rent of the Property); costs of maintenance
and service agreements; any costs, expenses or other amounts incurred under any easement, reciprocal
easement agreement, declaration of covenants or other similar encumbrance which are allocable to
Landlord or the Property or any portion thereof; security services and/or alarm and fire protection systems
and equipment; wages, salaries, fringe benefits and other labor costs of all persons engaged for the
operation, maintenance, repair and replacement of the Property; payroll taxes and workers' compensation
for such persons; legal and accounting expenses (except legal expenses incurred in preparing leases or
enforcing the terms of leases); licenses, permits and other governmental charges; rentals of machinery and
equipment used in the operation and maintenance of the Property; removal of garbage and refuse; and any
other expense or cost, which, in accordance with generally accepted accounting principles and the
standard management practices for buildings comparable to the Building, would be considered as an
expense of operating, managing, maintaining or repairing the Property or any portion thereof; plus a sum
III
equal to fifteen percent (15%) of the aggregate of the foregoing, for general overhead. Tenant
acknowledges that the above definition of Operating Expenses shall not be construed as a representation
or warranty that the items of equipment, facilities or services listed therein are or from time to time will
be in existence or available at the Property and said definition is intended only to define such items that
may exist or may be available from time to time. Excluded from Operating Expenses are Taxes; costs
reimbursed by insurance; costs in connection with preparing space for a new tenant; advertising expenses;
real estate brokers' commissions; franchise, transfer, inheritance or capital stock taxes or other taxes
imposed upon or measured by the income or profits of Landlord; and administrative wages and salaries.
All accounting for Operating Expenses shall be on the accrual basis. If, at any time during the Term, the
Building is not fully leased and occupied by tenants, Operating Expenses shall be projected as if the
Building were fully occupied at all times.
40. Order: defined in Section 30.1.
41, Orders: defined in Section 30.1.
42. Parking Spaces: defined in the Basic Lease Provisions.
43. Premises: defined in the Basic Lease Provisions.
44. Prime Rate: the prime commercial lending rate publicly announced from time to time by
Citibank N.A. or successor bank.
45. Projected Taxes: defined in Section 4.2.
46. Prp rty: the Land and the Building and all other buildings or improvements constructed
on the Land from time to time.
47. Restoration. the restoration, replacement or rebuilding of the Building (excluding any
alterations, additions and improvements installed by Tenant and any trade fixtures and personal property
owned by Tenant) or any portion thereof as nearly as practicable to its value, condition and character
immediately prior to any damage, destruction or Taking.
48. Statement(s): means, collectively, Landlord's Expense Statement and Landlord's Tax
Statement.
49. Taking: a taking of all or any part of the Property, or any interest therein or right
accruing thereto, as the result of, or in lieu of, or in anticipation of, the exercise of the right of
condemnation or eminent domain pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of the Property or any part thereof, by any governmental authority,
civil or military.
50. Tax Statement: defined in Section 4.2.
51. Taxes: shall be defined to mean with respect to each governmental authority levying or
imposing the same, all taxes and assessments (general, special, betterment, ordinary or extraordinary,
foreseen and unforeseen) levied, charged, assessed, imposed upon or which become due and payable out
of or in respect of and become a lien on the Land and all improvements constructed on the Land from
time to time, including, without limitation, charges imposed in respect of the ownership, operation,
management, use, leasing or alteration of the Property and/or Premises, or any portion thereof; the various
estates in and to the Property and/or Premises, or any portion thereof; the Basic Rent and Additional Rent
IV
payable to Landlord pursuant to this Lease; all water and sewer rents and charges; and all franchise,
income, profit or other taxes, fees and charges, however designated, which, due to a future change in the
method of taxation, may be levied or imposed on Landlord in substitution in whole or in part for, or in
lieu of, or in addition to, any tax which would otherwise constitute Taxes, as heretofore defined. Nothing
contained in this Lease shall require Tenant to pay any estate, inheritance, succession, corporate franchise
or income tax of Landlord, nor shall any of same be deemed Taxes, except as provided in the immediately
preceding sentence.
52. Tenant: the party defined as such in the first paragraph of this Lease.
53. Tenant's Notice: defined in Section 16.2.
54. Tenant's Visitors: Tenant's agents, servants, employees, officers, subtenants,
contractors, invitees, licensees and all other persons invited by Tenant onto the Property and/or into the
Premises as guests or doing lawful business with Tenant.
55. Tenn: defined in Section 2.2.
56. Termination Date: defined in the Basic Lease Provisions.
57. Underlying Encumbrance: defined in Section 23.1.
V
VERIFICATION
I, Dave Jarvis, verify that the statements made in the foregoing Complaint are true
and correct to the best of my knowledge, information and belief, and that I am authorized to
make this verification on behalf of Mechanicsburg 2007, L.P. This verification is made subject
to the penalties of 18 Pa. Cons. Stat. Ann. § 4904 relating to unsworn falsification to authorities.
DAVE JARVIS, Managing Agent for
Mechanicsburg 2007, LP
Dated: April tO, 2010
#12464061 v1