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Home My WebLink About04-6477 , u HERSHEY FOODS CORPORATION Plaintiff : THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. No. [l-f--G Lf-71 ~ NEWKIRK DAUTEC LIMITED PARTNERSHIP, CIVIL ACTION - LAW Defendant DECLARATORY JUDGMENT NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 717-249-3166 800-990-91 08 NOTICIA Le han demandado a usted en la corte. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notificacion. Usted debe presentar una apariencia escrita 0 en persona 0 por abogado y archivar en la corte en forma escrita sus defensas 0 sus objeciones alas demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso notificacion y por cualquier queja 0 alivio que es pedido en la peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABOGAGO INMMEDIATAMENTE. SI NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE , ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 717-249-3166 800-990-91 08 McNEES WALLACE & NURICK LLC By Ow ellrt: David E. Lehman 1.0. No. 15243 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 237-5285 Counsel for Plaintiff Dated: December 27,2004 ~ HERSHEY FOODS CORPORATION Plaintiff THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. No. NEWKIRK DAUTEC LIMITED PARTNERSHIP, CIVIL ACTION - LAW Defendant DECLARATORY JUDGMENT COMPLAINT ACTION FOR DECLARATORY JUDGMENT Hershey Foods Corporation, by and through its attorneys, McNees Wallace & Nurick LLC, hereby makes the following complaint against Defendant Newkirk Dautec Limited Partnership. I. PARTIES 1. Plaintiff Hershey Foods Corporation is a corporation formed under the laws of the state of Delaware, maintaining its principal offices at Hershey, Dauphin County, Pennsylvania (hereinafter "Hershey"). 2. Defendant Newkirk Dautec Limited Partnership is a limited partnership formed under the laws of the state of Delaware, maintaining its registered office at 211 Centerville Road, Suite 400, Wilmington, Delaware. Defendant Newkirk Dautec Limited Partnership (hereinafter "Newkirk") has duly registered itself with the Commonwealth of Pennsylvania, Department of State as a foreign limited partnership doing business in Pennsylvania. It maintains its registered office for those purposes c/o Corporation Service Company, 2704 Commerce Drive, Suite B, Harrisburg, P A 17110. 3. Defendant Newkirk is successor in interest to a Delaware Corporation known as Cumber Leasing Corporation. Prior to its dissolution, Cumber Leasing Corporation maintained its registered office at Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware (hereinafter "Cumber Leasing Corp."). Cumber Leasing ~ Corp. also registered as a foreign business corporation doing business in the Commonwealth of Pennsylvania through registration with the Department of State. 4. Cumber Leasing Corp. was a corporation formed for the special purpose of the transaction more fully identified below, having been formed in the state of Delaware on or about September 29, 1983. 5. Defendant Newkirk has succeeded fully to all rights, privileges and obligations of Cumber Leasing Corp. in the matter and transactions set forth below. II. VENUE 6. Venue is proper in the Court of Common Pleas of Cumberland County because the site of the premises which are the subject of the parties' Sublease Agreement, and of the parties' dispute, identified below, is in Silver Spring Township, Cumberland County. III. THE LEASE TRANSACTION 7. In connection with certain financing and property transactions among related parties on October 15, 1983, Plaintiff and Newkirk's predecessor in interest, Cumber Leasing Corp., entered into a "Sublease Agreement" of certain "Premises" more fully described in the said Sublease Agreement. The Premises consisted of land, warehouse facilities and other rights under the control of Newkirk's predecessor, Cumber Leasing Corp. (hereinafter the "Premises"). A copy of relevant portions of the Sublease Agreement is appended hereto as Exhibit 1. The remainder of the document, and associated related transaction documents, are in the custody of both parties. Should Defendant require copies of those documents, they are available on request from Plaintiff's counsel. For the convenience of the Court and its filing office, those documents are not copied or appended hereto. 2 .. 8. The warehouse facilities which are the subject of the Sublease Agreement are situate on ground owned by Hershey and subject to a ground lease between Hershey and an entity affiliated with Cumber Leasing Corp., known as Dautec Associated Limited Partnership ("Dautec"). The rights of Dautec passed to Cumber Leasing Corp. pursuant to a Master Lease Agreement. 9. Further, in connection with the transaction described generally above, improvements on the land were sold by Hershey to Dautec. Thereafter, those improvements were also leased to Hershey, through Cumber Leasing Corp., all in accordance with detailed agreements setting forth the several parties' rights and interests in the matter. IV. NOTICE OF ECONOMIC TERMINATION 10. In accordance with its rights under the Sublease Agreement, Hershey provided notice to Newkirk of its exercise of rights granted under Section 3.6 of the Agreement, relating to "Uneconomic Use." 11. Such notice included the requisite certificate by Hershey, that Hershey has determined that the premises had become uneconomic or unsuitable for continued use and occupancy for the business conducted by Hershey on the premises and that Hershey has discontinued use thereof. 12. Such notice triggered communications between the parties in accordance with the Lease Agreement, relating to determination of the appropriate sum due to Newkirk, in compensation for the termination for uneconomic use, 13. A dispute has arisen between the parties concerning the appropriate methodology and formula for calculating the sum to which Newkirk is entitled. 3 . V. THE DISPUTE 14. As averred in the foregoing paragraphs, Plaintiff Hershey, in the exercise of its rights under the Agreement, and particularly Section 3.6, has made its election to terminate the Sublease Agreement and to purchase the Lessor's interest in the Premises. 15. Section 3.6 of the Agreement provides both the right of election and mechanism for determining the amount to be paid for exercise of the election in the following language: Such Notice shall also include.... (iii) an election by Lessee to Lessor to purchase the Premises (including, without limitation, Lessors' and Master Lessor's interests therein) on the Economic Termination Date at a price equal to the greater of the fair market value of the interests of Master Lessor and Lessor in the Premises on the Economic Termination Date as unencumbered by this Lease, or an amount determined in accordance with Schedule C. Such fair market value shall be determined in accordance with the provisions of Paragraph 3.5(b) and 3.5(e). (See Exhibit at Tab 1, pp. 31-32.) 16. Further, Section 3.5(e) explicitly provides that: (e) As used in this Lease, the term "fair market value," as such term relates to the Premises shall not include the ... value of the Land or Lessor's interest under the Ground Lease. . . . (See Exhibit at Tab 1, p. 31.) 17. Hershey and Newkirk as Lessee and Lessor respectively, have agreed that an amount determined in accordance with Schedule C is not the applicable value, inasmuch as the fair market value of the interests of the Master Lessor and the Lessor in the Premises is a greater amount. 18. Newkirk, as Lessor, has asserted that the said "market value" must be calculated by including the value of the land. Appended hereto and marked as Exhibit 2 is a notice from Newkirk's counsel, dated October 11, 2004, asserting that Hershey's approach 4 to the valuation is in error, violates the language of the Agreement, and constitutes an event of breach. 19. By letter of October 12, 2004, Hershey's counsel stated Hershey's position that in the calculation of fair market value, the value of the Land must be excluded. Accordingly, Hershey cannot be in breach of any obligation under the Sublease Agreement. A copy of counsel's October 12, 2004 letter is appended hereto as Exhibit 3. 20. Newkirk's counsel, by letter of October 20, 2004, persisted in its claim that Hershey's interpretation and understanding of the language of the Agreement is wrong, and a persistent breach of the Lease Agreement, which has not been cured. A copy of that letter is appended hereto as Exhibit 4. 21. The parties' positions have been further stated and restated in letters of November 2, 2004, from Hershey's counsel to Newkirk's counsel, and November 4, 2004 from Newkirk's counsel to Hershey's counsel. Those letters are appended hereto and marked Exhibits 5 and 6. 22. There exists a serious and substantive dispute between the parties concerning the interpretation of the valuation provision of Section 3.6 of the Agreement. 23. The impact of that disagreement is material. Hershey believes that if the value of Land is included in the determination of fair market value, Newkirk would receive payment of a sum in excess of several million dollars to which it is not entitled. 24. The assertion by Newkirk that Hershey is in breach and that if the breach is not cured will lead to a declaration of default by Newkirk is a serious assertion which could lead to other claims, actions and assertions by Newkirk, which assertions are insupportable and in error. 25. The parties' dispute must be adjudicated by a court of competent jurisdiction in order to be resolved. 5 WHEREFORE, Plaintiff Hershey Foods Corporation requests that this Court enter its Order and Judgment determining that the "Fair Market Value" of the interests held by Newkirk in the Premises as of the "Economic Termination Date," and including any interests which must be compensated by Hershey under the Sublease Agreement, does not include the value of Land. or any interest owned or controlled by Lessor in connection with that Land, including the ground lease. Further, Hershey requests that the Court determine, order and adjudicate that it is not in any default under the Lease Agreement, and that the attempt by Newkirk to declare a "breach" or a "default" is in error, arbitrary and capricious. Further, Hershey requests it be awarded costs and attorneys' fees to the fullest extent permitted by law. Respectfully submitted, McNEES WALLACE & NURICK LLC By (kL{/;L 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 237-5285 ---- Counsel for Plaintiff Dated: December 27,2004 6 r- " ' " SUBLEASE AGREEMENT, dated as of October 15, 1983 (this Lease), between CUMBER LEASING CORP., a Delaware corporation (herein, together with any corporation succeeding thereto by consolidation, merger or acquisition of its assets substantially as an entirety, called Lessor) having an addr~ss c/o Integrated Resources, Inc., 666 Third Avenue, New York, Ne.... York 10017 and HERSHEY FOODS CORPORATION, a Delaware corporation (herein, together with any corporation succeeding thereto by consolidation, merger or acquisition of its assets substantially as an entirety, car-led Lessee), having an address at 100 Mansion Road East, Hershey, Pennsylvania 17033. ARTICLE! 1.1. Lease of Premises; Title and Condition. In consideration of the rents and covenants herein stipulated to be paid and performed by Lessee and upon the terms and conditions herein specified, Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the premises (the Premises) consisting of (i) the land .described in Schedule A, together with Lessor's use and occupancy rights derived from a certain Ground Lease dated as of Oct.ober 15, 1983 from Lessee to Dau tec Assoc ia tes Limi ted Par tnersh i p ( the Ground Lease), as granted pursuant to the terms of that certain Master Lease Agreement, dated as of October 15, 1983 (the Master Lease) between Dautec Associates Limited Pa r tn~ r sh i p (he re in, toge ther wi th its successors and assigns as lessor under the Master Lease, called Master Lessor), and Lessor, as lessee said land and said rights being hereafter sometimes collectively referred to as the Land, subject, nevertheless, to the right of Lessee to cause to be withdrawn and released from this Lease, at the sole cost and expense of Lessee, the portion of the Land identified _as the Release Tract (Release Tract) in Schedule 39095-564 093 510.152 P""- I j 1 ~ I J ~ J i I i ~ L.. A hereto (with such changes in said parcel as may be required' for subdivision approval and which are not unac- ceptable to Lessor or to Lessee), prov ided tha t pr i or to such withdrawal and release, Lessee shall cause to be recorded in the Office of the recorder of Deeds of Cumberland County, Pennsylvania, a duly approved subdivision plan iden- tifying the Release Tract as a separate zoning lot, and provided further that all easements or equivalent rights of access are granted to Lessor. or in favor of the remaining Land (as the dominant estate) to preserve all access utility coftnections, parking rights or the like required for the continued use, maintenance or operation of the Improvements and the remaining land and that Lessee, at its own cost and expense, provides Lessor with title insurance satisfactory to Lessor and its counsel as to the enforceabili ty of such easemen ts or r igh ts of access, (i i) all bu i ld i ngs and othe r improvements (including, without limitation, the attachments and other affixed property), now or hereafter located on the Land (the Improvements), and (iii) the respective easements, rights and appurtenances relating to the Land and the Improvements, including, without limitation, the a.greements, if any, set forth in Schedule A hereto. Notwithstanding the foregoing, the Premises shall not include Lessee's Equipment (as hereinafter defined), which shall be and remain the property of Lessee, or any personal property of sublessees of Lessee. The term "Les- see1s Equipment" shall mean Lessee's furnishings, machinery, business and trade fixtures and equipment placed or installed, 10 or on the Premises at any time or from time to time at Lessee's cost or expense, without any contribution or reimbursement therefor by Lessor and without regard to whether the same may be affixed in any manner to the Premises, provided that, Lessee, at its sole cost and expense, shall repair any damage to the Premises caused by 39095-564 093 510.152 2 r i 1 I I i 1 1 I i l , j .l 1iW:.. -- the removal of Lessee's Equipment from the Premises. The _term.~Lessee's Equipment" shall not include any item now or hereafter installed in or on the Premises that is an in- tegral part of the Improvements, including without limita- tion heating, ventilating, air conditioning and sprinkler systems, ele~trical and plumbing fixtures and systems, ele- vators and escalators and other similar equipm,:nt and fix- tures. The Premises are leased to Lessee in their present condition without representation or warranty by Lessor and subject to the rights of parties in possession, to the e:iisting state of title, to all applicable Legal Require- ments (as hereinafter defined) now or hereafter in effect and to Permitted Exceptions listed in Schedule A. Lessee has examined the Premises and ti'tle to the Premises and has found all of the same sa tisfactory for all purposes. If Lessor becomes the lessee of any unimproved land which is contiguous to the Land ("Additional Land"), Lessor will, subject to the following provisions of this Section 1.1, lease Add i ti anal Land to Lessee, and Lessee wi 11 lease the same from Lessor I upon the terms and subject to the condi- tions of this Lease. If Additional Land is so leased, the same shall become a part of the Premises with full force and effect as of the date of transfer. Lessee's undertakings with respect to Additional Land shall be identical to Lessee's undertakings with respect to the Land, however, Lessee shall not be obligated to pay additional Rent or other sums hereunder on account of Additional Land. 1.2. Use. Lessee may use the Premises for any lawful pu rpose. Lessor and its agents and des ignees may enter upon and examine the Premises at reasonable times and show the Premises to prospective purchasers, mortgagees or lessees as long as such examination or showing is subject to Lessee's security regulations in effect from time to time 39095-564 093 510.152 3 r..e ~ '0 J~ ;j and shall not unreasonably interfere with the business opera- tions of Lessee on the Premises. 1.3. Terms. The Premises are leased for an interim term (the Interim Term), a primary term (the Primary Term), and, at Lessee's option, for up to six (6) consecutive additional terms of five years each (the Extended Terms), unless and until the term of this Lease shall expire or be terminated pursuant to any provision hereof. The Interim Term, the Primary Term and each Extended Term shall commence and expire on the dates set forth in Schedule B. Lessee shall exercise its option to extend the term of this Lease for an Extended Term by giving notice thereof to Lessor not less than 360 days prior to the expiration of the then- existing term. I 1.4. Rent. (a) Fixed rent for the Premises during the term of this Lease shall accrue as set forth in Schedule B (such accrued fixed rent is hereinafter referred to as Fixed Rent). Amounts in respect of Fixed Rent during the term of this Lease shall be paid by Lessee to Lessor in immediately available funds in the amounts set forth in Schedule B (which payments "are hereinafter referred to as Rent Payments) on the dates set forth therein (Payment Dates), at Lessor's address as set forth above, or at such other address or to such other person as Lessor from time to time may designate. Lessee shall remain fully and uncondi- tionally liable for the difference between (i) the Fixed Rent which has accrued under this Lease and (i i) Rent Pay- ments actually made in accordance wi th Schedule B (the ag- gregate amount of such difference, from time to time, is hereinafter referred to as Deferred Rent). At such time as any Rent Payment is in excess of Fixed Rent for the period in respect of -which such Rent Payment is made, the amount of Deferred Rent shall thereupon be reduced by the amount oJ ~ ; 39095-564 093 510.152 4 A.. .,..- t. ;;-. . I 1 , 'j 1 i I t . ..., --- such excess. In no event shall any amounts payable here- under be reduced or be subject to reduction by reason of the wi thdrawal and release of the Release Tract from the provisions of this Lease as provided in paragraph 1.1 hereof. If for any reason this Lease shall terminate prior to the date on which the Primary Term is to' expire, then, unless Lessee attorns to Master Lessor and this Lease continues in f~~l force and effect as a direct lease between Lessee and Master Lessor pursuant to the provisions of paragraph 7.3 hereof (in which case, Lessee shall rema in fully and uncond i t ionally liable ."': for Deferred Rent), on the date of such termination Lessee shall pay to Lessor in immediately available funds, in addi- t i on to any 0 the r amoun ts Lessee may be requ i red to pay to Lessor by the terms and provisions of this Lease, all De- ferred Rent. (b) All amounts which Lessee is required to pay pursuant to this Lease (other than Fixed Rent, amounts payable upon purchase of the Premises, amounts payable for additions to and alterations of the Improvements pursuant to paragraph 3.4, amounts payable for" restoration of the Improvemen ts pursuant to paragraph 3.2 and amoun ts payable as liquidated damages pursuant to paragraph 5.1), together with every fine, penalty, interest and cost which may be added for non-payment or late payment thereof, shall consti- tute additional rent. If Lessee shalL fail to pay any such additional rent or any other sum due hereunder when the same shall- become due, Lessor shall have all rights, powers and remedies wi th respect thereto as are provided herein or by law in the case of non-payment of any Rent Payment or Defer- red Rent which is then due and payable and shall, except as expressly provided herein, have the right to pay the same on behalf of Lessee. Lessee shall pay to Lessor interest at the rate of 1% 'above the then rate of interest per annum on Master Lessor's financing of the Premises, which is secured 39095-564 093 510.152 5 ....... by a first mortgage lien on Master Lessor's interest in the Premises (or the maximum amount which is not prohibi ted by law, whichever is less) on all overdue Rent Payments and De- ferred Rent from the due date t~ereof until paid, and on all overdue additional rent and other sums due hereunder, in each case paid by Lessor on behalf of Lessee, from the date of payment by Lessor until repaid by Lessee. .Lessee shall per form all its obI iga t ions under th is Lease at its sole cost and expense, and shall pay all Fixed Rent, additional rent and any other sum due hereunder when due and payable, .Jt:. , without notice or demand. ARTICLE II 2.1. Net Lease. (a) This Lease is a net lease and, any present or future law to the contrary notwithstand- ing, shall not terminate except as otherwise expressly pro- vided herein, nor shall Lessee be entitled to any abatement or reduction (except as otherwise expressly provided here- in), set-off, counterclaim, defense or deduction with re- spect to any Fixed Rent, Deferred Rent, Rent Payment, addi- tional rent or other sums payable hereunder, nor shall the obligations of Lessee hereunder be affected, except as expressly provided herein, by reason of: any damage to or destruction of the Premises; any taking of the Premises or any part thereof by condemnation or otherwise; any prohibi- tion, limitation, restriction or prevention of Lessee's use, occupancy or enjoyment of the Premises, or any interference wi th such use, occupancy or enjo'yment by any person; any eviction by paramount title or otherwise; any default by Lessor hereunder or under any other agreement; the impossi- bili ty or illegali ty of performance by Lessor, Lessee or both; any action of any governmental authority; or any other cause whether similar or dissimilar to the foregoing. The parties intend that the obligations of Lessee hereunder 39095-564 093 510.152 6 r Lessee may exercise default hereunder. shall expire upon Lease. such rights ._only if Lessee is -not in The options assigned and created hereby the termination or expiration of this .. 3.5. Purchase Option; Riqht of First Refusal; Fair Market Value. (a) Lessor hereby irrevocably assigns to Lessee all of Lessor's right, title and interest in and to Lessor's option to purchase Master Lessor's interests in the Premises pursuant to paragraphs 3.5(a) and 3.5(c) of the ~ Master Lease, subject to all the terms and conditions there- of. Upon any purchase by Lessee of Master Lessor's inter- ests in the Premises in accordance with this subparagraph, Lessor shall assign its interests in the Premises to Lessee. (b) I f Lessor shall then own Mas ter Les- sor I S interests in the Premises, then Lessor hereby grants to Lessee the option to purchase Lessor's interests in the Premises on the last day of the Primary Term, or on the last day of any of the first, second or fourth Extended Terms, if exercised by Lessee upon at least 365 days' prior notice to Lessor, at a price equal to the fair market value of Lessor's interests in the Premises (as of the date the Premises are to be transferred), as encumbered by this Lease (i.e., taking into account the rights and obligations of Lessor and Lessee under this Lease and assuming for that purpose the exercise of all Extended Terms). Such fair market value shall be determined by Lessee and Lessor or, if they fail to agree within thirty days, as determined by appraisers selected in the following manner: Lessor and Lessee shall each appoint an appraiser within ten days thereafter, and the fair market value shall be as determined by the two appraisers so appointed. If the two appraisers so appo in.ted are unable to ag ree upon fa i r ma rke t value within thirty days of the appointment, fair market value 39095-564 093 510.152 28 , ~ -.,-. L shall be determined by a third appraiser s~lected within ten days thereafter by the two appraisers appointed by the parties hereto. Such third appraiser shall determine fair market value within thirty days of the appointment. All appraisers shall be members in ~ood standing of the American Institute of Real Estate Appraisers or any organization suc- ceeding thereto. Lessor and Lessee shall share equally the costs of all such appraisals. On the date of purchase, Lessor shall convey its interests in the Premises to Lessee or its designee pursuant to and upon compliance with para- g r ~ph 3 .1. (c) The options assigned and created hereby are exercisable only as long as this Lease is in effect. Lessee may exe rc i se such r igh ts only if Lessee is not in default hereunder. The options assigned and created hereby shall expire upon the termination or expiration of this Lease. (d) Lessor hereby irrevocably assigns to Lessee all of Lessor's r igh t, title and in terest ~ in and to Lessor's right to purchase the interests of the Master Les- sor in the Premises pursuant to paragraph 3.5{a) and para- graph 3.5{c) of the Master Lease, except that Lessee shall not have such right in connection with any offer required to be made by Lessor under the Master Lease. The right assigned hereby is exercisable only as long as this Lease is 1n effect and such right shall expire upon the termination or expiration of this Lease, and Lessee may exercise it only if Lessee is not then in default hereunder. If at any time, or from time to time, during the term of this Lease, Lessor shall receive and be willing to accept a bona fide offer from a third party to purchase Lessor's interest in the Premises, or if Lessor shall offer to sell its interest in the Premises to any third party (in each case, other than a 39095-564 093 510.152 29 J l, ,'I -.it -l! j. 1 bid or offer to purchase such interest at any sale inci- dental to the exercise of any remedy provided for in the Mortgage and other than an offer to Lessor from a third party), Lessor shall, if Lessee is not then in default here- under, promptly transmit to Lessee its written offer to sell its interest. in the Premises to Lessee upon the same terms and conditions as are set forth in the third party offer or its offer to a third party, as the case may be, together wi th a true copy of such offer, and shall give Lessee 30 days to accept such offer. I f Lessee shall accept such of~r by written notice to Lessor within such time, the of- fer and acceptance shall consti tute a contract between them for the sale by Lessor and the purchase by Lessee of Les- sor's interest in the Premises. Any conveyance to Lessee of Lessor's interest in the Premises pursuant to this subpara- graph 3.5(d) shall be made subject to this Lease, and this Lease shall continue in full force and effect. If Lessee shall not accept such offer In accordance with this para- graph 3.5(d), then Lessor may sell its interests in the Premises to such third party upon the terms and condition~ contained in such offer. Notwithstanding anything to the contrary contained herein, in the event Lessee shall accept such offer in accordance with this paragraph 3.5(d) and on the date fixed for purchase Lessee shall fail to complete such purchase, the right assigned pursuant to this paragraph 3.5(d) shall expire and Lessor shall be free from and after such time, to sell its interest in the 'Premises to any third party.as if the right assigned hereby had not been assigned, except that Lessor and/or Master Lessor shall not be pre- cluded from electing any other remedies available to them with respect to the failure by Lessee to complete such pur- chase. . (e) As used in this Lease the term "fair market value", as such term relates to the Premises shall 39095-564 093 510.152 30 ~ , I I 1 tL not include the value of any addi tions to the Improvements or any additional improvements made to the Premises pursuant to Section 3.4 hereof at Lessee's' cost and expense, or value of the Land or Lessor's interest under the Ground Lease, prov ided ho....ever' that in exclud ing such value for purposes of computation of fair market value such exclusion shall occur prior to taking into account the encumbrance of the Premises by this Lease and not subsequent to taking into account such encumbra~ce. .. &. 3.6 Uneconomic Use. (a) If the Premises shall have become uneconomic or unsui table for continued use and occupancy in Lessee's bus iness, and if Lessee has d i scon- tinued use thereof or decided to discontinue use thereof, then Lessee may on or after the first day of the sixteenth year of the Primary Term give notice to Lessor of its inten- tion to terminate this Lease on any Payment Date (the Eco- nomic Termination Date) during the Primary Term specified in such notice ....hich occurs not less than 240 days after the giving of such notice. Such notice shall also include (i) a certificate by Lessee and dated currently stating that Les- see has determined that the Premises have become uneconomic or unsuitable for continued use and occupancy for the busi- ness conducted by Lessee on the Premises and that Lessee has discontinued use thereof, or will discontinue conduct of such business on the Leased Premises, within 110 days, for a period of at least five years thereafter; (ii) documentation to the effect that termination of this Lease will not be in violation of any operating agreement then in effect, if any; and (i i i) an election by Lessee to Lessor to purchase the Premises (including, without limitation, Lessor's and Master Lessor's interests therein) on the Economic Termination Date at a price equal to the greater of the fair market value of the interests of Master Lessor and Lessor in the Premises on the Economic Termination Date as unencumbered by this Lease, 39095-564 093 510.152 31 r .~ L...... or an amount determined in accordance with Schedule C. Such fair market value shall be determined in accordance with the provisions of Paragraph 3.S(b) and 3.S(e). (b) This Lease shall terminate on the Eco- nomic Termination Date, except with respect to obligations and liabilities of Lessee hereunder, actual or contingent, which have arisen on or prior to the Economic Termination Date, upon payment by Lessee of all Rent Payments, addition- al rent and all other sums then due and payable hereunder to q-nd including the Economic Termination Date, and all Deferred Rent to and including the Economic Termination Date. On the Economic Termination Date, there shall be as- signed and conveyed to Lessee or its des i gnee the Premi ses (including, without limitation, Master Lessor's and Lessor's interest$ therein) pursuant to and upon compliance with par- agraph 3.1. (c) If the Premises are assigned and con- veyed to Lessee or its designee as provided in this para- graph 3.6, neither Lessee nor any subsidiary or affiliate of lessee shall use the Premises for a period of five years thereafter, which obligation shall survive the termination of this Lease. ARTICLE IV 4.1. Assignment and Subletting. Lessee may ass ign this Lease or sublet the Premises for the Pr imary Term or any Extended Term of this Lease. Each such assign- ment or sublease shall expressly be made subject to the pro- visions hereof. No such assignment or sublease shall modify or limit any right or power of Lessor hereunder or affect or reduce any obligation of Lessee hereunder, and all such ob- ligations shall be those of Lessee and shall continue in 39095-564 093 510.152 32 L' I 1 I , l k... IN WITNESS WHEREOF, the part ies hereto have caused this Lease to be executed as of the date first above written. [SEALj CUMBER LEASING CORP., Lessor A'rTEST: -BY ~~ As~t~n~ Secretary By ~- ..- 1. . ice p sident HERSHEY FOODS CORPORATION, Lessee [SEAL) By Ll ~ - -- - Treasurer ATTEST: /~ / 7 ./" /' t.: t:' '<, 0--:"1' ,/' _. " --"<<-._ . Assistant Secretary 39095-564 093 614.73 52 -------- I. All provisions contained in this Lease shall be binding upon the successors and assigns of Lessee and shall inure to the benef i t of and be enforceable by the permi t ted successors and assigns of Lessee in each case to the same extent as if each such successor and. assign were named as a party hereto. This Lease may not be modified or terminated except as ex- pressly prov ided here in or except by a wr i t ing signed by Lessor .and Lessee and consented to by Haster Lessor. Any such modification or termination made otherwise than as expressly permi t ted by this paragraph shall be void. This Ltase shall be governed by and interpreted in accordance with the laws of the State in which the Premises are located. I ! I I 7.6. Table of Con ten ts and Head inqs. The table of contents and the headings of the various paragraphs and Schedules of this Lease have been inserted for reference only and shall not to any extent have ~he effect of modify- ing the express terms and provisions of this Lease. , , I r 7.7. Counterparts. This Lease may be executed in two or more counterparts and shall be deemed to have become effective when and only when one or more of such counter- parts shall have been signed by or on behalf of each of the parties hereto (although it shall not be necessary that any single counterpart be signed by or on behalf of each of the parties hereto, and all such counterparts shall be deemed to constitute but one and the same instrument), and shall have been delivered by each of the parties to the other. 7.8. Schedules. The following are Schedules A, B and C referred to in this Lease, which Schedules are hereby incorporated by reference herein. 39095-564 093 510.152 53 ~t.. :"'~h"'''''''.' :._,,:.~,..:.: ......,-:~J;.lI~1.~~....~~-~~~:s..4,J.......J ~,',:.:............ :'.J, ".;.L..t..t...:":;M...;"'1':~','~-"''''l':''-:~~ .-:... .~ ;"':'..: .':... i...4,"..: .:,:~... '. .I'~t'~:'~~-l'"'''' '.: .,::.:..1...;.."""'....,-..::.:,,:-.:;.:_. "':'.of ;:...~ ;.':'-J . ~~ . 'I ~~ "~ ',;.' ~ .f (' ~ . .:V ~ w l COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN ) ) SS.: ) On this day of October, 1983, before me, a Notary Public in and fbr said County and Commonwealth, personally appeared William Lehr, Jr. and Richard P. Horn , who acknowledged themselves to'be Treasurer and Assistant Secretary of Hershey Foods Corporation, and that they, as such officers, being au~horized to do so, executed the fore- going agreement for the purposes therein contained .by signing the name of the corporation by themselve~ as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. N~td)t'lJ~~f:~l/1 ~r~,;~,,~.~"" .,:';:;; l:;~ ~,'~l ,;:;.,:,C;~~';~g~, , ~f ~ ,.', -" "<.()^I..iIC;~ C' t,.".2f1fS I#.!!m~::; r:..,~:~)'~'.':':",*, - ... (SEAL) Address: 14 East Chocolat~ Avenue, P.O. Box 814 Hershey, PA 17e33-0814 "P'- ..... STATE OF NEW YORK ) ) ss.: COUNTY OF lJEW YORr: .) On this 2~M day of October, 1983, before me, a Notary Public in and for said County and State, personally appeared . Arn'f flJtfkc-t(' and f./er!:.t...N TW~/"'SIr!,,?_, who acknowledged themselves to be a Vice President and an Assistant Secretary, respectively, of Cumber Leasing Corp., and that they, as such officers, being authorized to do so, executed the foregoing agreement for the purposes therein contained by signing the name of the corporation by themselves as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. 'b~-J~ Notary Public -- (SEAL) Address: 300 Park Avenue New York, New York 10022 DEN!SE L. SHANE NOTARY puaLlC, Stete of New Yone. No. 41-477-6665 Qualified in Queens County CommisSion bwires Morch 30, 1964 .,. (Dautec) ~ ;1 II ;1 SCHEDULE A Part I Legal pescription ~ ~ ALL that certain tract or parcel of land situate in the Township of Silver Spring, County of Cumberland, Common- wealth of Pennsylvania, bounded and described in accordance with a survey of John C. Brilhart, Surveying and Mapping Services, bearing seal of Charles W. Junkens, Registered Surveyor, designated "Eastern Distribution Center, Hershey Foods Corporation", dated October 19, 1983, as follows: BEGINNING at a Railroad Spike in the centerline of LR 21012 (Locust Point Road), said Spike being located at the northwest corner of lands of E1dorado Properties, Corp. (t~rmerly United Refining Co.): THENCE along the centerline of Locust Point Road, North 200 56' 30" West, a distance of 8.00 feet to a Spike: thence along lands now or formerly of Keller Adams, North 650 10' East, a distance of 578.34 feet to a point: thence along lands now or formerly of Norman C. Eshelman (under sales agreement to George Lee Souder), North 430 28' 30" West, a distance of 52.23 feet to a point at corner of other lands of George Souder: thence along lands of George Souder, North 650 14' 30" East, a distance of 35.59 feet to a point; thence continuing along the same, by a curve to the left having a radius of 910.72 feet, an arc length of 193.92 feet, the chord of which is North 590 08' 30" East, 193.55 feet to an iron pin; thence continuing along th~ same, North 530 02' 30" East, a distance of 128.18 feet to an Iron Pin: thence continuing along the same, North 400 38' 20" West, a distance of 145.92 feet to an Iron Pin; thence continuing along the same, North 470 46' 10'" East, a distance of 41.00 feet to an Iron Pin; thence continuing along the same, North 400 31' 20" West, a distance of 526.52 feet to an Iron Pin; thence along lands of S. S. Potteiger and Cumberland County Industrial Development Authority, North 640 23' 10" East, a distance of 617.41 feet to a Railroad Spike in Dauphin Drive; thence along lands of Max C. Hempt, North 660 05' 30" East, a distance of 905.32 feet to an Iron Pin; thence continuing along the same, South 480 44' 45" East, a distance of 875.00 feet to an Iron Pin; thence con- tinuing along ,the same, South 480 27' East, a distance of 403.81 feet to a Stone at a Post; .thence continuing along the same, South 520 33' West, a distance of 542.47 feet to an Oak Tree; thence along lands of J. P. Minnich South 520 42' 10" West, a distance of 1,050.42 feet to an Iron Pin; thence continuing along the same, South 130 10' 10" East, a distance of 244.13 feet to an Iron Pin in the northerly line l 39095-564880614/7.16 .1 ~ of lands now or formerly of Penn Central; thence along the northerly line of lands now or formerly of Penn Central, North 790 32' West, a distance of 597.24 feet to an Iron Pin at corner of lands of Eldorado Properties Corp.; thence along lands of Eldorado Properties Corp. North 380 07' 50" West, a distance of 668.98 feet to an Iron Pin; thence continuing along the same, South 650 10' West, a distance of 565.93 feet to a Ra.ilroad Spike, the point of Beginning. BEING the same premises which John M. Elliot e~ al t/d/b/a The New Kingston Quartet a/k/a New Kingston Quartet, a Pennsylvania partnership by deed dated November 10, 1982 and recorded in Cumberland County in Deed Book Y, Volume 29, page 742 conveyed unto Hershey Foods Corporation, a Delaware corporation. TOGETHER with right of ingress, egress and regress to use 1n common with others a right of way more particularly described and recorded in Misc. aook 259, page 797, Cumberland County Records and ~ 1 J TOGETHER with right of ingress, engress and regress over that certain easement and right of way as more specifically se~ forth in Easement Agreement between Dauphin Distribution Services Co. and Hershey Foods Corporation dated November 10, 1982 and recorded in Misc. Book 284, page 802. 2 L ..,. (Dautec - Release Tract) SCHEDULE A Part I-A Release Tract ! ( l i ! ALL that certain tract or parcel of land situate in the Township of Silver Spring, County of Cumberland, Commonwealth of Pennsylvania, bounded and described in accordance with a survey of John C. Brilhart, Surveying and Mapping Services, bearing seal of Charles W. Junkens, .Registered Surveyor, designated "Eastern Distribution Center, Hershey Foods Corporation", dated October 19, 1983, as follows: BE6INNING at a Railroad Spike in the centerline of LR 21012 (Locust Point Road), said spike being located at the north- west corner of lands of E1dorado Properties Corp. (formerly lands of United Refining Company), THENCE along the center- line of Locust Point Road, North 20056'30" West, a distance of B.OO feet to a Spike~ thence along lands now or formerly of Keller Adams, North 65010' East, a distance of 578.34 feet to a point: thence along lands now or formerly of Norman C. Eshelman, North 43028'30" West, a distance of 52.23 feet to a point~ thence along other lands of George Souder, North 65014'30" East, a distance of 35.59 feet to a point: thence continuing along the same, by a curve to the left having a radius of 910.72 feet, an arc length of 193.92 feet, the chord of which is North 59008'30" East, 193.55 feet to a Pin~ thence continuing along the same, North 53002'30" East, a distance of 128.18 feet to an Iron pin; thence along Tract No.1, South 21033'50" East, a distance of 385.00 feet to a point; thence continuing along the same, the following six (6) courses: (1) North 89010' East, a distance of 209.35 feet to a point; (2) North 64024'10" East, a distance of 1,380.18 feet to a point: (3) North 01050'40" West, a distance of 297.84 feet to a point: (4) North 48044'45" West, a distance of 827.07 feet to a point; (5) South 66005'30" West, a distance of 857.40 feet to a point; (6) North 23054'30" West, a distance of 75.00 feet to a Railroad Spike in Dauphin Drive; thence along lands of Max C. Hempt, North 66005'30" East, a distanc~ of 905.32 feet to an Iron Pin; thence continuing along the same, South 48"044'45" East, a distance of 875.00 feet to an Iron Pin; thence continuing along the same, South 48027' East a distance of 403.81 feet to a Post and Stone: thence continuing along the same, South 52033' West, a distance of 542.47 feet to an Oak; thence along lands of J. P. Minnich, South 52042'10" West, a distance of 1,050.42' i 39095-564880614.54 10/15/83 .... ,. feet to an Iron Pin: thence continuing along the same, South 13010'10" East, a distance of 244.13 feet to the northerly line of lands now or formerly of Penn Central Railroad; thence along the northerly line of lands now or formerly of Penn Central, North 79032' West, a distance of 597.24 feet to an Iron Pin; thence along lands of Eldorado Properties Corp., North 38007'50" West, a distance of 668.98 feet to an Iron Pin; thence continuing along the same, South 65010' West, a distance of 565.93 feet to a Railroad Spike, the point of Beginning. CONTAINING 21.782 Acres of land. BEING the same premises which John M. Elliot et a1 t/d/h/e The New Kingston Quartet a/k/a New Kingston Quartet, a .Pennsy1vania partnership by deed dated November 10, 1982 and ~'recorded in Cumberland County in Deed Book Y, Volume 29, page 742 conveyed unto Hershey Foods Corporation, a Delaware corporation. TOGETHER with right of ingress, egress and regress to use in common with others a right of way more particularly described and recorded in Misc. Book 259, page 797; and TCGETHER with right of ingress, engress and regress over that certain easemen~ and right of way as more specifically set forth in Easement Agreement between Dauphin Distribution Services Co. and HerShey Foods Corporation dated November 10, 1982 and recorded in Misc. Book 284, page 802. 2 ...... SCHEDULE A PART II AGREEMENTS Together with -the interests, including without limitation the rights-of-way and easements relating to the above-described land in the following instruments: NONE. i'" ... ~ ..; ~ o ... , t i 1 ~ 1 1 I Ii i\ 1 ,t, l " , tI 7 a, .a... ,.. R.OS3l3,17 (Sublease-Dautec) SCHEDULE A Part III Permitted Exceptions 1. Furnishings, machinery, business and trade fixtures and equipment owned by Hershey Foods Corporation and used in connection with its business without reaard to whether the same may be affixed in any manner to~ the Improvements but not any item that is an integral part of the Improvements, including without limitation heating, ventilating, air conditioning and sprinkler .. systems,. electrical and plumbing fixtures and syste~~, elevators and escalators. 2. Rights of possession of Commonwealth Security Systems, Inc. and Dauphin Distribution Services Company as set forth in agreements dated July 1, 1983 and March 17, 1983, respectively. , I r I t i i }: ~ I ~ 3. Sewer and water rents due but not yet payable; municipal and state taxes due and not yet payable. or which are bein con~es~ec in good faith by ap~=opriate proceedings diligently prosecu~ed. 4. Slope and fill rights, if any, appurtenant to the rail- road right of way, now or formerly of Penn Central Rail- road Company. 5. Rights granted to Laurel Pipe tine Company by Right of Way Agreement from Samuel S. Potteiger, et al., dated August 14, 1950, of record in the aforesaid Office in Miscellaneous Book 136, page 270. 6. Rights granted to Laurel Pipe Line Company by Right of Way Agreement from Harry B. Blouch, et al., dated Novem- ber 14, 1957, of record in the aforesaid Office in Miscellaneous Book 131, page 136. Rights granted to Pennsylvania Power & Light Company by Right of Way Agreement from Hershey ~oods Corporation dated December 10, 1982, of record in the aforesaid Office in Miscellaneous Book 282, page 417. i . ~ i 8. Rights granted to Dauphin Distribution Service Company by Deed of Easement from Daniel E. Beren, et aI., dated January 8, 1981, of record in the aforesaid Office in Miscellaneous Book 260, page 864. l I Rights granted to William G. Magaro, et. a1., by Deed of: Easement from D~niel E. Beren, et al., dated June 16, I 1981, of record' in the aforesaid Office in Miscellaneou~ Book 266, page 276. 9 . .... " ~ ~ ; , t j ; ~, , -, ,. '1 'i ...L... (cont'd) (Sub1ease-Dautec) SCHEDULE A Part III Permitted Exceptions 10. Rights granted to Russell L. Potteiger, et ux., by Agree- ment from George Lee Souder, et al., dated November 13, 1980, of record in the aforesaid Office in Miscellaneous Book 259, page 797. 11. .~ights granted to New Kingston Quartet by Deed from Russell L. Potteiger, 'et ux., dated November 13, 1980, of record in the aforesaid Office in Deed Book F, Volume 29, page 339. 12. Reservation to use right of way accessible to public road leading from New Kingston to Trinc1e Road, of record in the aforesaid Office in Deed Book Volume S, Vol. 22, page 1015. 13. Ground Lease Agreement dated as of October 15, 1983 between Hershey Foods Corporation, as Lessor, and Oautec Associates Limited Partnership, as Lessee, a memorandum of which has been recorded. 14. '''''' Master Lease Agreement dated 'as of October 1St 1983 between Dautec Associates Limited Partnership, as Lessor, and Cumber Leasing Corp., as Lessee, a memorandum of which has been recorded. .0 I J , r t ~ I ! I . ~ . ! . 2 OCT 1 2 2004 POST HEYMANN & KOFFLER LLP David J. Heymann Admitted in NY and NJ Phone: (516) 681-3636 Fax; (516) 433-2777 e-mail: djh@phklaw.com AITOllNEYS AT LAw 1\vo Jericho Plaza Wing A Jericho, New York 11753 October 11, 2004 FEDERAL EXPRESS Burton H. Snyder Senior Vice President, General Counsel and Secretary Hershey Foods Corporation 100 Crystal A Drive Hershey, P A 17033-0810 Re: Sublease Agreement between Cumber Leasing Corp., as Lessor, and Hershey Foods Corporation, Lessee, Dated as of October 15, 1983 ("Lease") Dear Mr. Snyder: We have been retained in connection with the above captioned Lease by Newkirk Dautec, L.P. ("Newkirk Dautec"), the successor in interest to Lessor Cumber Leasing Corp. Pursuant to Section 5.1 of the above captioned Lease, we write to provide notice to Lessee Hershey Foods Corporation ("Hershey") that Hershey has committed material breaches of the Lease that will, if uncured, constitute events of default under the Lease. Hershey has specifically breached those provisions of the Lease relating to Hershey's election under the Lease of August 25,2004.1 On August 25, 2004, Hershey provided notice to Lessor that it was exercising its right of economic discontinuance under the Lease, as well as its concomitant mandatory election to purchase the leased Premises at a price equal to the greater of (i) the fair market value of the interests of the Master Lessor and Lessor in the Premises on the Economic Termination Date as unencumbered by the Lease and (ii) an amount to be determined in accordance with Schedule C to the Lease. The parties have been in agreement that the fair market value will exceed the amount to be determined in accordance with Schedule C, and Unless otherwise defined in this letter, capitalized terms used herein have the meaning ascribed to them in the Lease. F:\USERS\DA VlD\Ncll'kirk Jnformation\daulec ddaull lelter,doc Burton H. Snyder October 11, 2004 Page 2 therefore fair market value is the relevant figure for detem1ining the price Hershey would pay. As a result of Hershey's exercise of its purchase option, pursuant to Section 3.5(b) of the Lease the parties were required to seek to agree upon a determination of the aforementioned fair market value within 30 days of Hershey's notice, i.e. by September 24. In this regard, the Lease explicitly sets forth a methodology for the parties to use to determine the fair market value. Among other components of this methodology, as required by Section 3.5(e) of the Lease, the fair market value shall "not include" the "value of the Land." According to the Lease, the defined term "Land" means the land described in Schedule A to the Lease as subject to a certain Ground Lease dated as of October 15, 1983. Presumably motivated by a desire to lower the price it would be required to pay, Hershey materially breached the Lease by wrongly insisting that fair market value be calculated by excluding the value of the land described in Schedule A free and clear of, rather than subject to, the Ground Lease. Hershey's calculations are thus contrary to the required methodology and its actions in violation of the provisions of the Lease requiring that the parties seek to agree to a fair market value. Nor was this innocent error, as Lessor unequivocally informed Hershey during the relevant 30 day period that its methodology contradicted that mandated by the Lease. So blatant is this breach that even if "Land" were not an explicitly defined term, which it is, Hershey's fair market value calculations would be wholly unreasonable and a breach of the required methodology given that with respect to other aspects of the methodology the Lease expressly state that other lease encumbrances should be ignored for purposes of the calculations. Thus, when the methodology calls for the parties to calculate a component of fair market value free and clear of an existing encumbrance, it so states explicitly. On the contrary the Lease, for the obvious reason that it would defy its own explicit definition of "Land", methodology format, industry practice, and common sense, does not permit Hershey to ignore the applicable Ground Lease in valuing the "Land." Obviously, in light of these events of default the determination of fair market value can not proceed further and Lessor reserves all of its rights under the Lease and specifically with respect to events of default should a full and complete cure not be timely made. Please advise us at your earliest convenience whether Hershey will cure its breach. Sincerely, / A~, ~_.., ~-- A'" David . 'eym .11 . DJH/pj cc: Stephen Kastenberg, Esq., of Ballard Spahr Andrews & Ingersoll LLP . . (C(Q)(P)V H Hershey Foods Hershey Foods Corporation Law Department 100 Crystal A Drive Hershey, Pennsylvania 17033-0810 Direct Dial: (717) 534-7541 Telefax: (717) 534-7549 STEVEN J. HOLSINGER, Senior Counsel October 12, 2004 David J. Heymann, Esquire Post Heymann & Koffler LLP . Two Jericho Plaza WingA Jericho, NY 11753 Re: Sublease Agreement between Cumber Leasing Corp., as Lessor, and Hershey Foods Corporation, Lessee, Dated as of October 15, 1983 ("Lease") Dear Mr. Heymann: Your letter of October 11, 2004, addressed to Burton H. Snyder, has been referred to me for response. After reading your letter and reviewing again the terms of the Lease, I continue to believe that Hershey's calculation of fair market value is in conformity with the clear language of the Lease. I agree with your statement that the Lease explicitly sets forth the methodology for the parties to use to determine the fair market value of the Premises. I also agree that, pursuant to Section 3.5(e) of the Lease, the value of the Land must not be included in the calculation of fair market value. I disagree with your conclusion that the term "Land" means the land described in Schedule A to the Lease as subject to the Ground Lease. Section 1.1 of the Lease defines the Land as "the land described in Schedule A, together with Lessor's use and occupancy rights derived from [the] Ground Lease...." When Section 3.5(e) provides that the term fair market value "shall not include the. .. value of the Land...," it means that fair market value shall not include the value of the land described in Schedule A nor the value of lessor's use and occupancy rights derived from the Ground lease. Contrary to your assertion in the penultimate paragraph of your letter that Section 3.5(e) somehow differs in form from other provisions that expressly state exclusions, the language of Section 3.5(e) leaves little question that Hershey's interpretation is correct in that the above- quoted language goes on to state expressly that the term fair market value "shall not include the... value of the Land or Lessor's interest under the Ground Lease.... JJ This additive language makes even clearer the parties' intent at the outset of this transaction to exclude the value of the Land and Lessor's interest under the Ground Lease from the calculation of fair market value. Hershey has been a good tenant of the Premises, and has endeavored in good faith to comply strictly with the express terms of the Lease. Accordingly, Hershey does not believe that it is in breach of the Lease. I strongly encourage you and your client to proceed with obtaining an appraisal of the fair market value of the Premises in accordance with the lease terms. Very truly yours, /-I",J:;.. / /4'.<-. -0- Steven J. Holsinger SJH:djf:50838.1 cc: Burton H. Snyder, Senior Vice President, General Counsel and Secretary Jeffrey S. Edleman, Director, Corporate Development OCT 2 1 2004 POST HEYMANN & KOFFLER LLP David J. Heymann Admitted in NY and NJ Phone: (516) 681-3636 Fax: (516) 433-2777 ATTORNEYS AT LAw e-mail: djh@phklaw.com Two Jericho Plaza Wing A Jericho, New York 11753 October 20, 2004 FEDERAL EXPRESS Steven J. Holsinger, Esquire Senior Counsel Hershey Foods Corporation 100 Crystal A Drive Hershey, PA 17033-0810 Re: Sublease Agreement between Cumber Leasing Corp., as Lessor, and Hershey Foods Corporation, Lessee, Dated as of October 15, 1983 (the "Lease") Dear Mr. Holsinger: Thank you for you letter of October 12, 2004. Your letter observes that Hershey Foods Corporation ("Hershey" or "Lessee") has been a good tenant of the Premises, and we should assure you that we agree. Respectfully, however, that fact, and Hershey's statement that its position is held in good faith, does not alter the fact that Hershey remains in breach of the Lease. Although your letter informs Lessor that Hershey will not cure its breach, we will as a courtesy continue to wait the full 26 day cure period before considering any further actions permitted under the Lease once an event of default occurs. What we cannot do is agree to Hershey's request to proceed with an appraisal process involving a methodology that is in violation of the Lease. With respect to the rationale for Hershey's position, we must, as we said in our October 11 letter to Hershey, disagree in the strongest terms. Although we have no desire to engage in argumentation, we will as courtesy and in a further effort to have Hershey cure its breach provide some additional background as to why we believe that Hershey's suggested interpretation of the methodology for arriving at a fair market value for the premises is just not correct. F:\USERS\DA VID\Newkirk Information\dautec letter lO-20.doc Steven 1. Holsinger, Esquire October 20, 2004 Page 2 As you may know, the Lease is one lease among hundreds of triple net leases originally entered into by affiliates of Integrated Resources, and many of those affiliates today are currently, as is Lessor here, affiliates of The Newkirk Master Limited Partnership. Those leases commonly contained an economic discontinuance option which allowed lessees to terminate their leases if the property became uneconomic or unsuitable for continued use. The materially identical economic discontinuance terms in these leases provide at a minimum that repayment of the lessor's debt on the property in issue would be funded by requiring lessee to offer to repurchase the property at a price (set forth on schedule C to each lease) established to cover the debt on the property. Importantly, the lessor retained the right to reject that offer so that it - as the owner of the property, and not the discontinuing lessee, could at lessor's option obtain the benefit of an appreciation in the property during the lease. In drafting the Lease at issue here, to accommodate Hershey's desire to own the Property following any exercise by it of the economic discontinuance option, Hershey's required offer to repurchase the Property was made non-rejectable, but the intention that Lessor - as owner of the Property during the Lease period - should obtain the benefit of an appreciation in the Property was in no way changed. In order to protect Lessor while accommodating Hershey's desire, the Lease was intended to, and does, require that Lessee purchase the Property at the greater of the Schedule C price or the fair market value of Lessor's interest in the Property. The value of Lessor's interest is, of course, the value of the improvements less Lessor's ongoing rent obligations under the Ground Lease. Accordingly, the Lease provides that fair market value be determined as the fair market value of the Property less the value of the encumbered land, and also less any arbitrage "interest" Lessor may have obtained as a result of the Ground Lease rent being below market rates. Moreover, not only was this the parties' intent here, this arrangement is typical of industry practice. Not surprisingly, the Lease embodies the parties' intention, with its use of the defined term "Land;" in Section 3.5(e) to describe the exclusion from fair market value; its use of the term "interest" in Section 3.5(e) to describe that separate exclusion;1 Section 3.5(e)'s failure to refer to the Land as "unencumbered" by the Ground Lease; and, notably, the last clause of Section 3.5(e), which unquestionably demonstrates the parties' intent to provide Lessor with the value of Lessor' s interest without the Lease. Contrary to your suggestion, the "interest" exclusion in Section 3.5(e) clearly refers to the potential arbitrage interest contemplated by the Ground Lease, and cannot be intended to cancel out the definition of Land in Section 1.1, as different language was used in each place. Moreover, for your reading to be correct that the reference to Lessor's "interest" cancels out the reference to the Ground Lease in Section 1.1, the parties would have to have chosen to use wholly unnecessary verbal contortions when they could have simply used the term "land" rather than "Land" in the relevant clause of Section 3 .5( e). Steven 1. Holsinger, Esquire October 20, 2004 Page 3 Thus, it is Hershey here who, whether purposefully or not, is seeking to deprive Lessor of the benefit of its bargain, and to obtain for itself more than the accommodation that Lessor in fact went out of its way to provide to Hershey originally. We sincerely hope that Hershey will reconsider its position, cure its breach of the Lease, and thereby avoid an event of default. DJH/pj Sincerely, J , -_/'~ ~-~"/-' - _/~/.- -' / ' (" /'(~ . --"'~ ~ L'David J ,>ley a.rnr---- // cc: Stephen J. Kastenberg, Esq., of Ballard Spahr Andrews & Ingersoll, LLP H Hershey Foods Hershey Foods Corporation Law Department 100 Crystal A Drive Hershey, Pennsylvania 17033-0810 Direct Dial: (717) 534-7541 Telefax: (717) 534-7549 STEVEN J. HOLSINGER, Senior Counsel November 2,2004 David J. Heymann, Esquire Post Heymann & Koffler LLP Two Jericho Plaza Wing A Jericho, NY 11753 Re: Sublease Agreement between Cumber Leasing Corp., as Lessor, and Hershey Foods Corporation, Lessee, Dated as of October 15, 1983 (the "Lease") Dear Mr. Heymann: I have read and reread your letter of October 20, 2004. While I can appreciate your argument that many deals are structured in the way that you describe in your letter and that you believe the parties intended this deal to be structured in a similar fashion, the fact remains that the express language of the Lease does not support your interpretation or reflect such an intention. Your assertions that "the value of Lessor's interest is, of course, the value of the improvements less Lessor's ongoing rent obligations under the Ground Lease," and that "the Lease provides that fair market value be determined as the fair market value of the Property less the value of the encumbered land, and also less any arbitrage 'interest' Lessor may have obtained as a result of the Ground Lease rent being below market rates," are unsupported by the language of the Lease. The Lease provides that, upon termination for uneconomic use pursuant to Section 3.6, the Lessee is obligated to pay to the Lessor on the Economic Termination Date the greater of the fair market value of Lessor's interest in the Premises on the Economic Termination Date as unencumbered by the Lease, or an amount determined in accordance with Schedule C. Fair market value is to be determined in accordance with the provisions of paragraphs 3.5(b) and 3.5(e). Section 3.5(e), which defines "fair market value," makes clear that the fair market value of the Premises does not include the value of improvements constructed during the Lease term at Lessee's cost, the value of the Land (defined under the Lease as the land described in Schedule A together with Lessor's use and occupancy rights derived from the Ground Lease) or Lessor's interest under the Ground Lease. In other words, the determination of fair market value of the Premises must exclude, among other things, the value of the land described in Schedule A, the value of Lessor's use and occupancy rights derived from the Ground Lease and any other interest of Lessor under the Ground Lease. Accordingly, Hershey continues to believe that it is not in breach of the Lease, and requests that you proceed with obtaining an appraisal of the fair market value of the Premises in accordance with the Lease terms. Very truly yours, s~i~ SJH:djf:50980.1 cc: Burton H. Snyder, Senior Vice President, General Counsel and Secretary Jeffrey S. Edleman, Director, Corporate Development LAW OF'F'ICe:S BALLARD SPAHR ANDREWS & INGERSOLL, LLP 1735 MARKET STREET. 51sT FLOOR PHilADELPHIA, PENNSYLVANIA 19103-7599 215-665-8500 FAX: 215-864-8999 WWW.BALLARDSPAHR.COM BALTIMORE. MD DENVER. CO SALT LAKE CITY. UT VOORHEES, NJ WASHINGTON. DC STEPHEN J. KASTENBERG DIRECT DIAL 215.864.8122 PERSONAL FAX: 215.864.9751 KASTEN S E RG@SALLARDSPAHR.COM November 4, 2004 Bv Federal Ex])ress Steven J. Holsinger, Esquire Senior Counsel Hershey Foods Corporation 100 Crystal A Drive Hershey, PA 17033-0810 Re: Sublease Agreement between Cumber Leasing Corp., as Lessor, and Hershey Foods Corporation, Lessee, Dated as of October 15, 1983 ("Lease") Dear Mr. Holsinger: Thank you for your letter of November 2 to David Heymann, Esquire, regarding the above captioned Lease. Lessor has asked us to write you insofar as (i) Hershey has clearly advised at this point that it will not cure its breach of the Lease; and (ii) Hershey is in default of the Lease as a result of its failure timely to cure its breach. As a result, Lessor has asked Ballard Spahr Andrews & Ingersoll, LLP to consider and pursue all appropriate recourse. Should there be anything further to discuss, please give me a call. Ve~lY yours, St~h~.;l~ cc: David J. Heymann, Esq. VERIFICATION Subject to the penalties of 18 Pa. C.S.A. 94904 relating to unSWQrn falsification to authorities, I hereby certify that I am an Assistant Secretary of Hershey Foods Corporation. In that capacity, I am authorized to make this Verification on its behalf. I further certify that the facts set forth in the foregoing document are true and correct to the best of my information and belief. HERSHEY FOODS CORPORATION BY~~'~~~ Dated: December 27, 2004 ~! f ~'v 0'\ ~ ~cl CX")<-..J' ~ -- ~ E;"""' . ~~ c..../\ c- ( ) t'-' ,,-j ,; ~ < 1 --j 1 ..;..,..'.. (", :-;:1 I fl'1 7~ l~"; I --, ;.~l r~ , : - - .. (':' ~~-I ( 1 ~""-:: ..,...~, ~. BALLARD SPAHR ANDREWS & INGERSOLL, LLP By: Stephen J. Kastenberg Damian L. DiNicola Attorney LD. Nos. 70919 & 89821 1735 Market Street, 51 st Floor Philadelphia, P A 19103 (215) 665-8500 Attorneys for Defendant HERSHEY FOODS CORPORATION, COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiff, Civ. A. No. 04-6477 v. CIVIL ACTION - LAW NEWKIRK DAUTEC LIMITED PARTNERSHIP, DECLARATORY JUDGMENT Defendants. DEFENDANT'S ANSWER AND NEW MATTER TO COMPLAINT - ACTION FOR DECLARATORY JUDGMENT OF HERSHEY FOODS CORPORATION Defendant Newkirk Dautec L.P. ("Defendant"), by its undersigned counsel Ballard Spahr Andrews and Ingersoll, LLP respectfully answers the complaint and avers as follows: 1. Defendant admits the averments of Paragraph I of the complaint. 2. Defendant admits the averments of Paragraph 2 of the complaint except Defendant's registered name is Newkirk Dautec L.P. and the address of its registered office in Delaware is 2111 Centerville Road, Suite 400, Wilmington, Delaware. 3. Defendant admits the averments of Paragraph 3 of the complaint except Cumber Leasing Corp. is known as Cumber Leasing Corp. and not Cumber Leasing Corporation. PHL_A #1957383 v3 4. Defendant admits the averments of Paragraph 4 ofthe complaint set forth a partial, but not complete, description of Cumber Leasing Corp. as set forth in its Certificate of Incorporation. Defendant admits that Cumber Leasing Corp. was formed in the state of Delaware on or about September 29,1983. 5. Defendant admits the averments of Paragraph 4 of the complaint. 6. Paragraph 6 of the complaint contains conclusions oflaw to which no response is required. To the extent that Paragraph 6 contains averments of fact, Defendant admits that Silver Spring Township, Cumberland County is the site of the premises which is the subject of the Sublease Agreement between Cumber Leasing Corp. and Hershey Foods Corporation dated as of October 15, 1983 (the "Sublease Agn:ement"). 7. Defendant admits the averments of Paragraph 7 of the complaint except to the extent Paragraph 7 limits its description of the "Premises" to consisting of "land, warehouse facilities and other rights under the control of Newkirk's pred(:cessor," Defendant denies this averment as stated. The "Premises" is fully defined in the Sublease Agreement which is in writing and speaks for itself. (Ex. I PI's. Compl., pp. 1-2.) 8. Paragraph 8 of the complaint sets forth legal conclusions to which no response is required. By way of further answer, the ownership, rights and agreements described in Paragraphs 8 are conveyed in writings which speak for themselves. To the extent Paragraph 8 sets forth averments of fact, Defendant admits those averments. 9. Paragraph 9 of the complaint sets forth kgal conclusions to which no response is required. By way offurther answer, the ownership, rights and agreements described in Paragraph 9 are conveyed in writings and speak for themselves. To the extent Paragraph 9 sets forth averments of fact, Defendant admits those averments. PHL_A #1957383 v3 2 10. Defendant admits the averments of Paragraph 10 of the complaint. II. Defendant admits that the averments of Paragraph II of the complaint contain a partial description of the notice to Defendant under section 3.6 of the Agreement. By way of further answer, the notice also included an election by Plaintiff to purchase the Premises pursuant to sections 3.5 and 3.6 of the Sublease Agreement. 12. Defendant admits the averment of Paragraph 12 that the notice triggered communications between the parties in accordance with the Sublease Agreement relating to the determination of the appropriate sum due to Defendant, but Defendant denies that this averment is complete as stated. By way of further answer, the communications also related specifically to the appropriate sum to be paid by Plaintiff to Defendant to purchase the Premises from Defendant pursuant to sections 3.5 and 3.6 of the Sublease Agreement. 13. Defendant denies the averments of Paragraph 13 as stated. By way of further answer, a dispute has arisen between the parties concerning the appropriate methodology and formula under the terms of the Sublease Agreement for purposes of determining the sum to be paid by Plaintiff to Defendant. 14. Defendant admits the averments of Paragraph 14 of the complaint except, by way or further answer, Defendant asserts that Plaintiff has breached the Sublease Agreement by failing to apply the required methodology. 15. Paragraph 15 of the complaint contains conclusions of law to which no response is required. To the extent Paragraph 15 contains averments of fact, Defendant admits that Paragraph 15 of the complaint sets forth, in part, the language contained in Section 3.6 of the Sublease Agreement. By way of further answer, the Sublease Agreement is in writing and speaks for itself. PHL_A #1957383 v3 3 16. Paragraph 16 ofthe complaint contains conclusions oflaw to which no response is required. To the extent Paragraph 16 contains averments of fact, Defendant admits that Paragraph 16 of the complaint sets forth, in part, the language contained in Section 3.5(e) of the Sublease Agreement. By way offurther answer, the Sublease Agreement is in writing and speaks for itself. 17. Defendant admits the averments of Paragraph 17 of the complaint. 18. Defendant denies the averments of Paragraph 18 as stated. By way of further answer, Defendant has asserted that under section 3.5(e) of the Sublease Agreement, the fair market value shall "not include" the value of the "Land" as that term is explicitly defined in the Sublease Agreement and, as defined by the Sublease Agr'~ement, "Land" means the land described in Schedule A to the Sublease Agreement together with and therefore, encumbered by, a certain Ground Lease dated as of October 15, 1983 (the "Ground Lease"). As a result, the "fair market price" cannot exclude the value of the land described in Schedule A free and clear ofthe Ground Lease encumbrance. Defendant admits that it has asserted that Plaintiffs approach to the valuation is in error, violates the language of the Sublease Agreement, and constitutes an event of breach. 19. Defendant admits that Plaintiff s counsel stated that Plaintiff s position is, in part, that when calculating the fair market value of the Premises under the terms of the Sublease Agreement, the value of the Land must be excluded. By way of further answer, in the October 12,2004 letter, Plaintiffs counsel also states Plaintiffs position that "fair market value" excludes the value of the land described in Schedule A apart from and unencumbered by the Ground Lease, not withstanding the definition of Land and intent ofthe parties. The remaining PHL_A #1957383 v3 4 averments contained in Paragraph 19 of the complaint contain legal conclusions to which no response is required. 20. Defendant admits the averments of Paragraph 20 of the complaint. 21. Defendant admits the averments of Paragraph 21 of the complaint. 22. Defendant admits the averments of Paragraph 22 of the complaint. 23. Defendant denies the averments of Paragraph 23. Defendant, after reasonable investigation, does not have sufficient information to admit or deny the truth of what Plaintiff"believes," and the same is therefore denied. By way of further answer, Defendant denies that, even if the land free and clear of the Ground Lease encumbrance were excluded from the Fair Market Value of the Premises, the difference should be material. 24. Paragraph 24 contains legal conclusions to which no response is required. To the extent that paragraph 24 contains assertions offact, it is admitted that Defendant could at this point declare an event of default, which in turn could lead to other actions or assertions by Defendant. It is denied that such assertions would be in error" as they would be properly based on the Sublease Agreement. 25. Defendant admits the averments of Paragraph 25 of the complaint. WHEREFORE, Defendant respectfully prays that this Court enter judgment in its favor against Plaintiff and issue a Declaratory Judgment in favor of Defendant that the "Fair Market Value" of the Premises as of the "Economic Termination Date" excludes the value of the land described in Schedule A ofthe Sublease Agreement as encumbered by the Ground Lease. Further, Plaintiff requests that the Court award its costs and attorneys' fees, and all other relief that the Court deems just and equitable. PHL_A #1957383 v3 5 NEW MATTER l. The Sublease Agreement was entered into by Plaintiff and Defendant's predecessor in interest Cumber Leasing Corp. ("Cumber"). 2. Both Plaintiff and Cumber intended to and did provide that the lessor would obtain the benefit of any appreciation in the property during the lease in the event that the lessee exercises its option to terminate the lease for uneconomic or unsuitable continued use and purchases the leased premises. 3. The Plaintiff and Cumber knowingly embodied their intent in the language of the Lease, including but not limited to by defining the term "Land" in the Sublease Agreement as the land, together with and as subject to a Ground Lease encumbrance and then excluding the "Land" from the fair market value of the Premises. Plaintiff s interpretation is inconsistent with the Lease because it would substitute into the lease the undefined term "land" in lieu of the defined term "Land," and because it would be directly contrary to the intentions of the parties. 4. For this reason, plaintiff has materially breached the Sublease Agreement by failing to comply with the explicit terms of the Sublease Agreement, which dictate the methodology for calculating the sum due Defendant under th,~ Sublease Agreement in compensation for Plaintiff s termination for uneconomic use and option to purchase the Premises. PHL_A #1957383 v3 6 WHEREFORE, Defendant respectfully prays that this Court enter judgment in its favor against Plaintiff and issue a Declaratory Judgment in favor of Defendant that the "Fair Market Value" of the Premises as of the "Economic Termination Date" excludes the value of the land described in Schedule A of the Sublease Agreement as e:ncumbered by the Ground Lease. Further, Plaintiff requests that the Court award its costs and attorneys' fees, and all other relief that the Court deems just and equitable. Date: February 14,2005 L1.L ~J. astenberg Damian L. DiNicola I.D. Nos. 70919 & 89821 Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street, 5 I st Floor Philadelphia, PA 19103 Telephone: 215-665-8500 Fax: 215-864-9836 Attorneys for Defendant PHL_A #1957383 v3 7 Rece1ved: 2/10/05 12:56PM; 2158648399 -> AOZN; Page 10 . FEB-10-05 13.43 FROM.BALLAROSPAHR 10_2158648399 PAGE 10/10 VERIFICATION John D. Alba verifies that he is Senior Vice President ofMLP Manager Corp., the manager of Newkirk Dautec GP LLC, which is the general partner of Newkirk Dautec L.P. ("Newkirk"), that he is authorized to submit this verification on its behalf and is the pt:rson with sufficient knowledge to submit this verification on its behalf, that he has reviewed the foregoing Defendant's Answer and New Matter to Complaint - Action for Declaratory Judgment of Hershey Foods Corporation ("Answer"), and that based on personal knowledge and infonnation andlor personal knowledge and jnformation provided by other employees of Newkirk, all facts set forth in the Answer are true and correct to the best of his knowledge and belief. He also verifies that he understands that the statements herein are made pursuant to the penalties of 18 Pa.C.S. ~ 4904, relating to unswom falsification to authorities, Dated: February _~ 2005 Newkirk Dautec L.P., a Delaware limited partnership By: Newkirk Dautec OP LLC, a Delaware limited liability company, iL~ general partne:r By: By: PHl_A#19S73S3 v3 BALLARD SPAHR ANDREWS & INGERSOLL, LLP By: Stephen J. Kastenberg Damian 1. DiNicola Attorney J.D. Nos. 70919 & 89821 1735 Market Street, 5 I st Floor Philadelphia, PA 19103 (215) 665-8500 Attorneys for Defendant HERSHEY FOODS CORPORATION, COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiff, Civ. A. No. 04-6477 v. CIVIL ACTION - LAW NEWKIRK DAUTEC LIMITED PARTNERSHIP, DECLARATORY JUDGMENT Defendants. CERTIFICATE OF SERVICE I, Damian 1. DiNicola, Esquire certify that on this 14th day of February, 2005, I caused to be served a copy of the foregoing Defendant's Answer and New Matter to Complaint- Action for Declaratory Judgment of Hershey Foods Corporation upon the following: VIA First Class Mail David E. Lehman, Esquire I 00 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 237-5285 Counsel for Plaintiff A:L--~~~ Damian 1. DiNicola PHL_A #1957383 v3 . HERSHEY FOODS CORPORATION Plaintiff THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. No. 04-6477 NEWKIRK DAUTEC LIMITED PARTNERSHIP, CIVIL ACTION - LAW Defendant DECLARATORY JUDGMENT REPLY TO NEW MATTER Plaintiff, Hershey Foods Corporation, by and through its attorneys, McNees Wallace & Nurick LLC, hereby makes the following reply to New Matter, as filed by Defendant in the above-referenced action. 1. Admitted. 2. Denied as stated. The averments of paragraph 2 of New Matter set forth conclusions of law to which no reply is required. However, by way of further response, it is averred that the parties' Agreement sets forth the commitments, intentions and obligations of the parties and cannot be modified or expanded by declarations of the Defendant in this pleading. 3. Denied for the reasons set forth in paragraph 2, above. 4. Denied. It is denied that Plaintiff has in any respect breached the sublease agreement. By way of further response, the averments of paragraph 2, above, are incorporated herein by reference as thought set forth at length. MC7J:~/ aR1CK LLC By ~ David E. Lehman 1.0. No. 15243 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 237-5285 Dated: February 28,2005 Counsel for Plaintiff . CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date a true and correct copy of the foregoing document was served by first-class mail upon the following: Stephen J. Kastenberg, Esquire Damian L. DiNocola 1735 Market Street, 51st Floor Philadelphia, PA 19103 IJwcf~ David E. Lehman Counsel for Plaintiff Dated: February 28, 2005 - ./'-"} ? -:t:-" ?j, -:;. ~ \ -- -0 ~ -- ,. t=> -- - ~----- \( , SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2004-06477 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND HERSHEY FOODS CORPORATION VS NEWKIRK DAUTEC LIMITED PART R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: NEWKIRK DAUTEC LIMITED but was unable to locate Them in his bailiwick. He therefore deputized the sheriff of DAUPHIN County, Pennsylvania, to serve the within COMPLAINT & NOTICE On January 11th , 2005 , this office was in receipt of the attached return from DAUPHIN Sheriff's Costs: Docketing Out of County Surcharge Dep Dauphin County 18.00 9,00 10.00 30.00 .00 67.00 01/11/2005 MCNEES WALLACE S ~ -,-:.>.-/ _~__~~~~:~~:> ~ ,,,>c;:~::-':~:...',?:.:._.~~"--_/-- '->~"""'-.~~.?--_:::%'- /~ oK 7"'C >...~ .~._ ~ k::..'::::---~ R. Thomas Kl~ine -- Sheriff of Cumberland County NURICK Sworn and subscribed to before this :L<{ <C- day Of~AA7 me <) ,/ OttV::J A.D. L)2V\-1~ ;)ov..{' I Pro onotary .. In The Cou.rt of Common Pleas of Cumberland County, Pennsylvania Hershey Foods Corporation VS. Newkirk Dautec LTInited Partnership No. 04-6477 civil N December 30, 2004 ow, , I, SHERIFF OF CUMBERLAND COUNTY, P A, do hereby deputize the Sheriff of Dauphin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. ~CZt'!/.' ~~. ;r ';'7~~.e<s<1",.t: ,/ ?:::?-..-.",..." ~ . .~ ~I ~""..._~,,,. .....-or Sheriff of Cumberland County, P A Affidavit of Service Now, ,20_, at o'clock M. served the within upon at by handing to copy of the original a and made lmown to the contents thereof. So answers, Sheriff of County, P A Sworn and subscribed before me this day of , 20_ COSTS SERVICE MILEAGE AFFIDA VIT $ $ . @Hict of tlf~ ~4priff William T. Tully Solicitor J. Daniel Basile Chief Deputy Mary Jane Snyder Real Estate Deputy Michael W, Rinehart Assistant Chief Deputy Dauphin County Harrisburg, Pennsylvania 1710 1 ph: (717) 255-2660 fax: (717) 255-2889 Jack Lotwick Sheriff Commonwealth of Pennsylvania HERSHEY FOODS CORPORATION vs County of Dauphin NEWKIRK DAUTEC LIMITED PARTNERSHIP Sheriff's Return No. 0027-T - -2005 OTHER COUNTY NO. 04 6477 AND NOW:January 6, 2005 at 11:10AM served the within NOTICE & COMPL. IN DECLARATORY JUDGEMENT upon NEWKIRK DAUTEC LIMITED PARTNERSHIP by personally handing to WENDY SMITH-CUSTOMER SERVICE ASSOCIATE 1 true attested copy(ies) of the original NOTICE & COMPL. IN DECLARATORY JUDGEMENT and making known to him/her the contents thereof at CORPORATION SERVICE COMPANY 2704 COMMERCE DRIVE, SUITE B HARRISBURG, PA 17110-0000 Sworn and subscribed to before me this 7TH day of JANUARY, 2005 So Answers, JK~ NOTARIAL SEAL MARY JANE SNYDER, Notary Public Highspire, Dauphin County My Commission Expires Sept. 1, 2006 Sheriff's Dauphin County, Pa. ....... t\A " f\\ ,f\-Q ~ n J 1.,...~.)'.. \,} """, 1 \ \J;'\ puty Sheriff Costs:$30.00 PD 01/05/2005 RCPT NO 202849 Sheriff of ~ By GM . HERSHEY FOODS CORPORATION, Plaintiff COURT OF COMMON PLEAS OF CUMBERLAND COUNTY v. Civ. A. No. 04-6477 NEWKIRK DAUTEC LIMITED PARTNERSHIP, Defendant CIVIL ACTION - LAW DECLARATORY JUDGMENT PRAECIPE TO DISCONTINUE Please mark the above-captioned matter as settled, discontinued and withdrawn, with prejudice. MC~WA~KLLC B/~ David E. Lehman 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Counsel to Plaintiff Dated: September 7,2005 . CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date a true and correct copy of the foregoing document was served by first class mail upon the following: Stephen J. Kastenberg, Esquire Damian L. DiNocola 1735 Market Street, 51 st Floor Philadelphia, PA 19103 IJrxMd~ David E. Lehman Counsel for Plaintiff Dated: September 7, 2005 (') l"'" 0 c:::, c: "':;:) .T) en , :yJ" (/) I"'~ . -\,J nl;= 1"-1 I CJ \.D --ri ""-",," <,,? '" r" ~...... .,-,....~_M"_""~c._mwv"...,"'I!l!~.D,'b~,~!, ~ l' F"~'''IHI!\'''~,,<~ W! i1j::;'1; ;v;;~!:HUHlW !f~t!')TI' +t:~-i/_~.,.,_/._< W',', . _ ",,:'"'!'''