Loading...
HomeMy WebLinkAbout05-0650 , COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. OS"~l.So C-u.;:.e 1/2.....-...- THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, a copy of which is attached to the Complaint filed in this action, I appear for the Defendants and confess judgment in favor of the Plaintiff and against Defendants as follows: Unpaid Rents Alteration Payments Insurance and Real Estate Taxes Late Charges Alterations/Major Repairs Attorney's Fees of 5% $1,427,068.00 $24,083.54 $286,780.10 $4,482.33 $135,000.00 $93,870.70 BALANCE DUE FROM DEFENDANTS $ 1,971,284.67, together with costs and interest at the lawful rate until payment. Respectfully submitted, FENSTERMACHER AND ASSOCIATES, P.C. By: C5---~' r ~ John R. Fensterma r Supreme Court 1.0. #29940 Shane F. Crosby Supreme Court I.D. #92530 5115 East Trindle Road Mechanicsburg, PA 17050 (717) 691-5400 Attorneys for Plaintiff COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. OS-("Sb ~ Tv.- THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : COMPLAINT IN CONFESSION OF JUDGMENT AND NOW, comes Plaintiff, by its undersigned attorneys, the Offices of Fenstermacher and Associates, P.C., and files the within Complaint upon a cause of action of which the following is the statement: 1. Plaintiff, Cocoa Enterprises, Inc., is a Pennsylvania Corporation with offices at4718 Old Gettysburg Road, Mechanicsburg, Pennsylvania 17055. 2. Defendant, The Fitness Company Ownership Group, is a Delaware Corporation with a last known address of 70 Wood Avenue South, Iselin, New Jersey 08830. 3. Defendant, The Fitness Company Holdings Group, Inc., is a Delaware Corporation with a last known address of 70 Wood Avenue South, Iselin, New Jersey 08830. 4. Plaintiff is the owner and lessor of the premises located at 1249 Cocoa Avenue, Hershey, Dauphin County, Pennsylvania known as the Cocoa Court Club. 5. On or about February 1, 1998, Plaintiff and Defendant, The Fitness Company Ownership Group, executed a written lease (the "Lease") for the Cocoa Court Club (the "Premises"). A true and correct copy of the Lease is attached hereto as "Exhibit A," incorporated herein by reference and made a part hereof. 6. Defendant, The Fitness Company Holdings Group, Inc., executed a written Guaranty on February 18, 1998 (a true and correct copy of which is attached to the Lease as Exhibit C), guaranteeing the payment and performance of all liabilities, obligations and duties imposed upon Defendant, The Fitness Company Ownership Group, under the terms of the Lease. 7. Defendant, The Fitness Company Ownership Group, took possession of the Premises on or about February 1, 1998. 8. The Lease term was for a period of fifteen (15) years beginning February 1, 1998, and ending December 31,2012. 9. By an Amendment to Lease (hereinafter the "Amendment") dated November 30, 2000, a true and correct copy of which is attached and incorporated herein as "Exhibit S," Defendants are obligated to expend a minimum of $15,000 per year for alterations or major repairs to the Premises, commencing with fiscal year 2002 and throughout the lease term. 1 O. Defendants are also obligated under the Amendment to make monthly alteration payments to Plaintiff in the amount of $926.29, commencing on January 1, 2001 and ending on December 1, 2006. 11. Defendants have failed to pay rent and other sums payable by Defendants in accordance with the Lease and the Amendment. 12. On information and belief, the attached Lease has not been assigned. 13. Judgment has not been entered for money or in ejectment on the lease in any jurisdiction. 14. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 15. Plaintiff is advised, believes and therefore avers that Defendants have directly and materially breached the terms and conditions of the lease as follows: a. By failing to pay all rental and other sums payable by Defendants under the terms of the lease and the Amendment for more than five (5) days after the due date for the months of November and December 2004 and January 2005. b. By failing to expend a minimum of $15,000 for alterations or major repairs to the Premises for the year 2004 as required by the Amendment. 16. Defendants have refused to perform their covenants under the lease, despite written demand by Plaintiff. 17. By virtue of Defendants' default, Plaintiff is entitled to and does hereby declare the rent and all other sums payable by Defendants for the months of November and December 2004 and January 2005, in addition to the rent and all other sums payable by Defendants for the entire unexpired balance of the term of the lease, to be due and payable. 18. The lease entitles Plaintiff to a five (5%) percent late payment charge per month as additional rent, as well as reasonable attorney's fees and court costs. 19. As a consequence of the foregoing, Defendants are in default under the lease and the Amendment and are liable to Plaintiff for the following amounts: Unpaid Rents Alteration Payments Insurance and Real Estate Taxes Late Charges $1,427,068.00 $24,083.54 $286,780.10 $4,482.33 Alterations/Major Repairs Attorney's Fees of 5% $135,000.00 $93,870.70 BALANCE DUE FROM DEFENDANTS $1,971,284.67 WHEREFORE, Plaintiff demands judgment in the sum of $1 ,971 ,284.67 authorized in the warrant appearing in the attached Lease, together with costs and interest at the lawful rate until payment. Respectfully submitted, FENSTERMACHER AND ASSOCIATES, P.C. By: S- -=1-. C' %=== John R. Fenstermacher Supreme Court I.D. #29940 Shane F. Crosby Supreme Court 1.0. #92530 5115 East Trindle Road Mechanicsburg, PA 17050 (717) 691-5400 Attorneys for Plaintiff DATED: February 4,2005 --. ... ---- --,-- --- .-. -"- -~-- ~........... VERIFICATION I, .:J'l5L.. ()(+-t',,~ . have read the foregoing Complaint and hereby affirm and verify that it is true and correct to the best of my personal knowledge, information and belief. I verify that all of the statements made in the foregoing are true and correct and that false statements made therein may subject me to the penalties of 18 Pa. C.SA Section 4904, relating to unsworn falsification to authorities. Cocoa Enterprises, Inc. By: DATED: "2-- ~- OS- Article 1: Article 2: Article 3: Arlicle 4: ArticleS : Article 6: Article 7: Article 8: Article 9: Article 10: Article 11: Article 12: Article 13: Article 14: Article 15: Article 16: Article 17: Article 18: Article] 9: Arlicle 20: Article 21: Article 22: Article 23: Article 24: Article 25: Article 26: Article 27: Artic]e 28: Article 29: Arlicle 30: Article 31: Arlicle 32: Article 33: Article 34: Exhibit A: Exhibit B: Exhibil C: Cocoa Lease February 6, 1998 t~(PY Table of Contents Premises Tenn Delivery of the Premises to Tenant Acceptance of the Premises by Tenant Rental Real Estate Taxes Intentionally Deleted Operating Expenses. Use of Premises and Operation of Ten ant's Business. Laws~ Ordinances, and Requirements of Public Authorities Consent Alterations and Major Repairs Liens Repairs Insurance Damage by Fire or Other Casualty Condemnation Assignment and Subletting Indemnification Surrender of the Premises Estoppel Certificates Subordination Default and Remedies Waiver by Tenant Security Deposit Attorneys' Fees and Leg1l1 Expenses Notices Miscellaneous Tem1ination Option Surrender at End ofTenn: Waiver Opt~on to Purchase Non - Competition Memberships Confession of Judgment Legal Description of the Property Equipment List Guaranty I YZ,O,Oi) - {"iff. ;;2 I, DD D - Cj 2. {". ... i /fl-I-'J\"i-j. FEllRUn\\'J'~~ THIS LEASE, dated ~ I~t, 1998, fsl made between Cocoa Enterprises, Inc. ("Landlord") and The Fllness Company Ownership Group, a Delaware Corporation ("Tenant"). ARTICLE 1 PREMISES Landlord is the owner in fee simple of the real property designated on the attached ExhibitA and made a pari hereof, and outlined in red on the Boundary Survey Drawing allached hereto as Exhibit A, together with the improvements lhereon known as Cocoa Court Club, located at 1249 Cocoa Avenue, Hershey, PA 17033, and the personal property (hereinafter referred to as the "Personal Property") listed on Exhibit B allached hereto (which land, building, improvements and Personal Property are hereinafter collectively referred to as the "Premises"). Landlord leases the Premises 10 Tenant, and Tenant leases the Premises from Landlord, for the Term (as defIned below) and subject to the provisions hereof, to each of which Landlord and Tenant mutually agree. ARTICLE 2 TERM Section 2 01. The term of this Lease (the "Tenn") shall begin on 2/\198 (the "Lease Commencement Dale"). Unless sooner terminaled, the Tenn shall end at midnight on 12J31112(the "Lease Expiration Date"). S;ection 2.02. Provided Tenant perfonns all of Tenant's obHgations undt:r this Lease, including the payment of Rental (as defined below), Tenant shall, during the Tenn, enjoy Ihe Premises without disturbance from Landlord or any other persons acting by, through. or under Landlord~ subject. however, to the terms of this Lease. This covenant and all other covenants of Landlord now or hereafter in this Lease shall be binding upon Landlord and ils successors only with respect to breaches occurring during its and their respective ownership of Landlord's interest hereunder. ARTICLE 3 DELIVERY OF THE PREMISES TO TENANT Landlord shall deliver the Premises in an "As-Is" condition. Tenant agrees to take the space as-is, illcluding all furnllure, fixtures and equipment in the Premises. Landlord will make no further improvements. Tenant will have the use of all furniture, fitness and other equipment without additional cost except for the ongoing maintenance and repair, and if necessary, replacement of such equipment. Tenallt may use Landlord's equipment for trade-ill or sale, provided all trade-in value or proceeds are remilled to Lalldlord provided the trade in value is equal to fair market value. Tenant will notify Landlord in writing prior to any disposition of equipment. Tenant will own any equipment acquired by Tenant after the commencement date ofthe Lease. As soon as practicable, Tenant and Landlord willjoinlly prepare Exhibit B, a detailed list of personal property currently in the Premises and whether it is owned or leased by Landlord or Tenant. ARTICLE 4 ACCEPTANCE OF THE PREMISES BY TENANT e......t............ 2 Taking posse' of the Premises by Tenant shaU be conclusive idence that Tenant: (a) accepls the Premises as suitable for the purposes [or which they are leased; (b) accepts the building and every part and appurtenance thereof as being in a good and satisfactory condition; and (c) waives any defects in the Premises. Landlord shaH not be liable, except for gross negligence or willful misconduct, to Tenant or any of its agents, employees, licensees, servants, or invitees for any injury or damage to person or property due to the condition or design of or any defect in the building or its mechanical systems and equipment which may exist or occur, and Tenant, for itself and its agents, employees, licensees, servants, and invitees, expressly assumes all risks of injury or damage to person or property, either proximate or remote, resulting . from the condition of the Premises or the building. ARTICLE 5 RENTAL Section 501. Tenant shall pay to Landlord monthly, in advance, without demand, on the first day of each calendar month (the Rental Due Date), an annual rental (the "Annual Rental") in an amount equal to 1/12 of $132,000 per year ($1 ],000 per monlh) "the Original Annual Base Rental", subject to adjustment as provided in Section 5.02 hereof. Section 5 02. During the Term, Tenant shall pay to Landlord Percentage Rental in the amount and manner as hereinafter set forth: (a) Within ninety (90) days aller the end of every calendar year (December 31) during the Term (including the calendar year in which the Lease Expiration Date occur), Tenant shall (i) submit to Landlord a statement certified by an authorized officer of Ten ant sel- ling forth in accurate detail satisfactory in scope to Landlord the Total Income (as defined in Section 5.02(c)) (including an itemization of all claimed deduclions therefrom) for such calendar year, and (ii) pay to Landlord as Percentage Rental the amount, equal to (A) 18% (the "Percenlage Rental Rate") multiplied by the aggregate Total Income for such calendar year less (B) Annual Rental for that calendar year. (b) For at least one hundred eighty (180) days aller lhe expiration of each calendar year during the Term and after the end of lhe Term, Tenant shall deliver 10 lhe Premises within five (5) business days aller notice and/or keep and maintain (and shall cause all subtenants, concessionaires and licensees to keep and maintain) in the Premises full and accurate books of account and records from which Total Income can be determined for the period in question. Records of Tenant, any subtenant, concessionaire or licensee shall include, but not be limited to, all federal, slate and local tax returns, records of daily bank deposits of the entire receipts from transactions of or from the Premises, bank statements, sales slips, sales checks, mail order records, inventories, records of goods received, records of daily receipts, and records of transactions between Tenant and any subtenant. concessionaire or licensee of Tenant. Landlord shall have the right from time to time during the one hundred eighty (180) day period aforesaid to inspect and audit aU such books and records relating to Total Income, and TellJl1lt, each subtenant, concessionaire and licensee will produce lhe same on request by Landlord upon at least len (10) business days' notice. If any such inspection and audit discloses that Total Income was understated, Tenant shall forthwith pay to Landlord any additional Percentage Rental shown 10 be payable, and if Total Income for any Calendar year or partial Calendar year was understated by more than live percent (5%), Tenant shall also immediately pay the cost of Landlord's inspection and audit. IfTenanl fails to cooperale fully in such inspection and audit, or if such inspection and audit discloses that actual Total Income exceeded those reported by Tenant by five percent (5%) or more, an event of default hereunder shall exist and Landlord shall be entitled to exercise all of Landlord's rights and remedies under this Lease. including those set forth in Section 23.02 hereof. (c) For purposes of this Section 5.02, the tem1 "Total Income" shall mean the dollar aggregate of all income generated based 011 Generally Accepted Accounting Principals (GAAP) in the operation of the Premises, including, but not limited to all initiation fees, joining c_............ 3 fees, lem1 mcmbersh., .ces, membership dues received monthly or mOI\:" or less ollen, late or administrative or other fees charged to members or customers, special fees (court rental, usage or guest fees, class fees), instruction or training fees (less compensation paid to instructors for such instruction or training or less dired fees paid to instructors who are not compensated at the same time as employees of Tenant), fees for use of the nursery, pro shop or other sales of merchandise of any lype including only the usage or fee received from independent contractors for use of space e.g. periodic ciolhing displays, etc.), equipmenl rental, club rental of any type, including functions, parties, etc., special event income, racquetball or other tournament fees, lesson income .less direct fees paid to instructors who are not compensated at the same time as employees of Tenant, rental income or any other revenue received for use of the facility or for services rendered to third parties. II is intended that Total Income shall be detennined in the same manner as has been during the period Tenant has assisted Landlord in the management of the Premises. The actual financial statement showing Total Income for 1996, for example, is included as Exhibit D. Seclion 5 03. Beginning on the first day of the third (3rd) Lease Year and on the first day of each Lease Year thereafter, the Annual Base Rent then in effect shall be increased by three percent (3%) oflhe Annual Base Rental in effect immedialely prior to such increase. Section 5 04. AU Rental shall be paid to Landlord by Tenant when due, without deduction or offset, in lawful money of the United States, al Landlord's Address for Notices as specified in Article 2&, or such other place as Landlord may from time to time designate. The tenn "Renlal" as used herein means the lhen-applicable Annual Base Rental, Percentage Rental, and aU other sums payable by Tenant under Illis Lease. Tenant shall pay to Landlord, as a "late charge," five percent (5%) of any paymenl herein required to be made by Tenant which is more than ten (10) days late. Section 5 OS. It is agreed by Landlord and Tenant that no Rental for the use, occupancy or utilization of the Premises shall be, or is, based in whole or part on the net income or profits derived by any person from Ille building or the Premises, and the Tenant further agrees lhat it will not enter into any sublease, license, concession or other agreement for any use, occupancy or utilization of the Premises which provides for a rental or other payment for such use, occupancy or utilization based in whole or in part on Ihe net income or profits derived by any person from the Premises so leased, useu, occupied or utilized. Nothing in the foregoing sentence) however, shall be construed as pemlHting or constituling Landlord's approval of any sublease, license, concession, Or other use. occupancy, or utilization agreement not otherwise approved by Landlord in accordance with the provisions of Article 18 hereof. ARTICLE 6 REAL ESTATE TAXES Tenant shall be responsible for the timely payment of real estale taxes. Taxes shall be escrowed and payable in monthly installments. Taxes shall be pro-rated at the termination of Lease. Landlord agrees that with respect to assessmenls and special assessments, Landlord will elect to pay the assessment over the longest permissible period and only those installments applicable to the term of the Lense, along with inlerest, if charged, shall be Ille responsibility of Tenant. ARTICLE 7 Intentionally Deleted. c............II<o. 4 ARTICLE 8 OPERA TfNG EXPENSES Tenant will be responsible for all costs and expenses relaled to the Premises and its operalion, including but nol limited to slructural and other capital improvements, repairs and replacement, utilities, major or minor repairs and maintenance, replacement of equipment and fixtures, insurance anti bonding, equipment leases, labor and related costs, etc. Tenant agrees to ,meet with Landlord at least quarterly to review operating statistics, membership activity, financial results and a list of major repairs, improvements and equipment expenditures made during the quarter. ARTICLE 9 USE OF PREMISES AND OPERATION OF TENANT'S BUSINESS Section 9 0 I. Tenant shall use and occupy the Premises solely for lhe purpose of operating a Heallh and Racquetball Club and uses incidental thereto, such as the sale of clothing, vitamins and refreshments and for no other purpose not incidenlal thereto. Section 902. Throughout the term of this Lease, Tenant covenants and agrees to: 0) keep the Premises in a neat and clean condition; (ii) pay before delinquency any and all taxes, except [or real estate taxes, which are the responsibility of the Landlord, assessments and public charges levied, assessed or imposed upon Tenant's business or upon Tenantls fixtures, furnishings or equipment in the Premises; (iii) pay when and as due all license fees, permit fees and all registration, bonding. licensing or other charges of a similar naLure for lhe conduct by Tenant of any business or undertaking authorized hereunder to be comlucted in the Premises; (iv) not permit vemlin or other pests to breed or permit the accumulation (unless in concealed waterproof containers) or burning of any rubbish or garbage in, on or about .the Premises or any other part of the building; (v) not use any space outside the Premises for display, sale or any other similar undertaking; (vi) not use any advertising medium inside the Premises which may be heard oulside the Premises; (vii) not use the plumbing facilities for any purposes other than that [or which they were constructed, or dispose of any foreign substances therein; (viii) not pennit any obnoxious or objectionable odors to emanate from the Premises; and (ix) not inslall any additional awnings or canopies on the exterior of the Premises without the prior written consent of Landlord. Tenant shall remove all trash and garbage from the Premises and arrange and pay for its disposal. Secl;on 9 03. The Premises shall operate continuously before and al1.er the Lease Commencement Dale. Tenant shall proceed wilh due dispatch and diligence 10 remain open for business on the Premises and Tenant shall thereal1.er continuously, actively and diligently operate its business ill a commercially prudent and reasonable manner. ARTICLE 10 LAWS, ORDINANCES, AND REQUIREMENTS OF PUBLIC AUTHORITIES Tenant shall, at its sole expense, (i) comply with all laws, orders, ordinances, and regulations of federal. state. county. municipal and other authorities having jurisdiction over the Premises, (ii) comply with any direction made pursuant to law by any public officers requiring abatement of any nuisance, or whicn imposes upon Landlord or Tenant any duty or obligation arising from Tenantls occupancy or use of the Premises or from conditions whien have been crealed by or at the insistence of Tenant, and (iii) indemnify Landlord and hold Landlord hannies5 Crom any loss. cost, claim. or expense which Landlord may incur or suffer by reason of Ten~t's [allure to comply with its obligations under clauses (i) or (ii) above. If Tenant receives notice of any such direction or of violation of any such law, order, ordinance. or regulation. it shall promptly notify Landlord thereof. ""_..w...._ 5 Any alterolioL .' additions to the Premises required by law or o. ~;nance to comply with the current use of the Premises shall be subject to the cost sharing provisions contained in Article 12. ARTICLE 11 CONSENT Landlord and Tenant agree that consent as required in this agreement shall not be .unreasonably withheld or delayed. ARTICLE 12 ALTERATIONS AND MAJOR REPAIRS Section 1201. Tenant may not, at any time during the Term, without Landlord's prior written consent, which consent will not be unreasonably withheld, make any alterations or major repairs to the Premises. For purposes hereof, an alteration or major repair is defined as any change or repair in excess of $5,000 each. Should Tenant desire any alteralions or major repairs, Tenant agrees to submit all plans and specificalions for same to Landlord for Landlord's wriuen approval before beginning such work. Upon Tenant's receipt of Landlord's written approval and for any alteralion or major repair in excess of $5,000, upon Tenant's payment to Landlord of the charge of one (l %) of any project of $25,000 or more, the costs of perfonning such work, which shall be in consideralion for the work of Landlord and its employees and representatives in reviewing and approving such plans and specifications, Tenant may proceed to th~ construction of the approved alterations, but only so long as they are in substantial compliance with the plans and specifications and with the provisions or this Article 12. All alterations shall be made at Tenant's expense, either by Tenant's contractors which have: been approved by Landlord. or, at Tenant's option, by Landlord's contractor on tenns rcasonably salisfactory 10 Tenant. All such construction, allerations, and maintenance work done by, or for, Tenant shall (a) be perfonned in such a manner as 10 maintain hannonious labor relations, (b) not alter the exterior appearance of the building, (c) not affect the structure or safety of the building, (d) comply with all building, safely, fire, plumbing) electrical, and ether codes and governmental and insurance requirements. (e) be completed promptly and in a good and workmanlike manner, and (I) be perfomled in compliance with Article 13 hereof. Section 1202. Except as provided for below in Seclion ii, Tenant shall be responsible for (a) all improvements to the Premises, including but not limited to replacing, recarpeting, painting surfaces, demising walls and any additions other than those required by law or ordinance and (b) aU maintenance of the Premises including but not limited to equipment. furniture, computers, and Building system Components. (ii) Tenant and Landlord agree to share the cost of repairing or replacing Building System Components in lhe following manner. Building System Components are defined as HV AC, plumbing, electrical, roofing, parking lot and slructural lighting items. ""Y expenditures for repairing or replacing Building Syslem Component Repairs over $5,000 must be approved beforehand in writing by Landlord and Tenant. Any Building System Component Repair over $10,000 will be managed by Landlord and subject to a 5% mark-up payable to Landlord for project management services. Any single project repair that will extend beyond one calendar year will be amalgamated and treated as ifit had occurred in a single year. Tenant's responsibility for the cost orBuilding System Component repairs and replacements is as follows: A. Tenant wjJI pay the first $25,000 of such cost plus the "Fonnula Amount," as hereinaIler defined, in anyone calendar year. Landlord shall pay the remaining amount of such repair or replacement. B. The Formula Amounl shall be an amounl equal to (a) $17,000 multiplied by (b) the number of years oflhe Lease Tenn preceding the then-current year, up to a maximum "- .....e...... 6 oflhree years; howe, a no event shall the amount for any calendar yec. Je less than zero (0), minus (c) lhe total amount expended during those years by Tenant for Building System Component repairs and replacements. C. Tenant's share ofthe cost of Building System Component repairs and maintenance shall be reduced during the laslfive (5) years of the LeaseTenn 10 Ille following percentages of what such amount would otherwise be: Lease Year II 12 13 14 15 Percentage 90% 75% 65% 60% 50% Sample Calculations: Lease Year 1 2 3 4 5 6 Cost Incurred $50,000 o $10,000 $10,000 $90,000 $25,000 Tenant's Tenant Cost Share of Cost Carry-Forward $25,000 0 o $17,000 $10,000 $17,000+7,000= $24,000 $10,000 $17,OOO+7,000+7,OOO~$31,000 $56,000 115,ool1+JI.OllllotI:rJf~ 0 $25,000 0 Section 12 03. All allerations, major repairs, improvements, and other physical additions made or installed by or for, Tenant in or to lhe Premises shall be and remain Landlord's property, except Tenant's furniture, furnishings, equipment, personal property, and movable lrade fixtures, and shaH not be removed without Landlord's written consent. Tenant agrees to remove, at Tenant's expense, all of its fumilure, furnishings. equipment, personal property, and movable trade fixtures by the Lease Expiration Date, and shall promptly reimburse Landlord for the cost of repairing all damage done to the Premises or the building by such removal. Landlord shall not be responsible for any loss of or damage to Tenant's furniture or furnishings remaining in the Premises after the Lease Expiration Date or in the event tha.t Tenant vacates the Premises prior to the Lease Expiration Date. Section 12.04. Under no circumstances whatsoever will Tenant, Tenant's authorized representative or agent, ever alter or modify in any mBImer disturb any system or installation of the building, including, but nOllimited to, plumbing system, electrical syslem, heating, ventilat- ing, and air conditioning system, fire protection and fire alert syslems, building maintenance systems, and stnlctural systems, unless under Landlord's express written pennission and under direct supervision of Landlord or Landlord's auUlorized representative. ARTICLE I3 LIENS Tenant shall keep Ihe Premises free from any liens arising from any work perfonned, materials furnished, or obligations incurred by or at the request of Tenant. All persons either conlracling with Tenant or furnishing or rendering labor and materials to Tenant shall be notified in writing by Tenant that they must look only to Tenant for payment for such labor or malerials. Nothing contained in Ihis Lease shall be construed as Landlord's consent to any contractor, subcontractor. laborer. or materialman for the performance of any la.bor or the furnishing of any materials for any specific improvement. alterations. or repair of, or to. the Premises. nor as giving Tenant any right to contract for. or permit the performance of, any services or the furnishing of c_~..~..... 7 any materials that W~ result in any liens against the Premises. If an} .,en is filed against the Premises or Tenant's leasehold interest therein which arises out of any purported act or agreement of Tenant, Tenant shall discharge the lien by paying the amount claimed to be due, by obt<1inillg the discharge by deposit with a court Dr a tille company, Of by bonding within thirty (30) days aller its filing. If Tenant fails \0 take such action within such period, then, in addition 10 any other right or remedy of Landlord, Landlord may, at its eleclion, discharge the lien by paying the amount claimed \0 be due, by obtaining the discharge by deposit with a court or a title company, or by bonding. Tenanl shall pay on demand any amount paid by Landlord for the .discharge or satisfaction of any such lien, and all reasonable attorneys' fees and other cosls and expenses of Landlord incurred in defending any such action or in oblaining the discharge of such lien. together with all necessary disbursements in connection therewith. ARTICLE 14 REPAIRS Section 1401. Tenant shall keep the Premises and every part thereof in good condition and repair, at all times during the Term and at Tenant's sole cost and expense. At the end ofthe Term, Tenant shall surrender to Landlord the Premises and all alterations, additions, and improvements thereto in the same condition as when received, subject to the provisions of Arlicie 20 hereof. If Tenant fails to make such repairs promptly, Landlord, at its option, may make such repairs, and Tenant shall pay Landlord on demand Landlord's actual costs in making such repairs plus a fee of len percent (10%) to cover Landlord's overhead. Landlord has no obtigation and has made no promise to alter, remodel, improve, repair, redecorate, or paint the Premises or any part thereof. No representations respecting the condilion of the Premises have been made by Landlord to Tenant except as specifically herein set forth. ARTICLE 15 INSURANCE Section 1501. During the term, Landlord. at Tenant's sole expense, shall obtain and keep in force the following insurance: (a) Special Property Form upon properly of every description and kind owned by Tenant and Landlord and located in lhe Building or for which Tenant is legally liable or installed by or on behalf of Tenant including, without limitation, furniture, fittings, installations. fixtures and any other personal property, leasehold improvements and alterations, in an amount equal to the full replacement costs thereof. All such insurance policies shall name Tenant and Landlord as named insureds thereunder and shall name Landlord's mortgagees and any ground or primary lessors as Joss payees thereunder. all as their respective interests may appear. (b) Commercial Comprehensive general liability insurance coverage including personal injury, bodily injury, broad fonn property damage, operational hazard, owner's protective coverage, conlractualliability, fire legal liability, and products and compleled operations liability, in limits not less than $1,000,000 inclusive. All such insurance policies shall name Tenant and Landlord as named insureds thereunder and shall name Landlord's mortgagees (and, if requested by Landlord, ground or primary lessors) as additional insureds \hereunder, all as their respective interests may appear. (c) Worker's Compensalion and Employer's Liability insurance, with limits of at least $100,000 - $500,000 -$100,000 and in fonn satisfactory to Landlord. (d) Any other foml or fomls of insurance as Tenant, Landlord, or Landlord's mortgagees or ground or primary lessors may reasonably require from time to time in form, in amount, and for insurance risks against which. a prudent tenant of a comparable size and in a comparable business would protect itself. (e) Tenant sball have in place an umbrella liability policy in limits not less -~............. 8 than $5,000,000 with dlord named as an additional insured party. All policies shall be issued by insurers with an A.M. Best rating of A or better and in fOIm satisfactory from time to time to Tenant. Landlord will deliver certificates of insurance on a standard foml as soon as practicable aRer the placing of the required insurance. Tenant shall reimburse Landlord from time to time for the cost ofthe insurance described above within ten (10) days aller written request therefor. . If Tenant obtains a proposal for the insurance required by this Article 15 at a lower cost from an insurance company with at least the same A.M. Best rating as that of the insurance company chosen by the Landlord, Landlord may, at Landlord's discretion) (1) accept the lower cost as the full reimbursement required under lhis Article 15, or (2) allow Tenant to obtain such coverage directly. Section 15.02. During the tenn, Landlord shall, at Tenant's expense, insure the Building (excluding any property which Tenant is obligated to insure under Section 15.0\ hereof) against damage with All-Risk insurance and public liability insurance, all in such amounts and with such deductions as Landlord considers appropriate. Landlord may, but shall not be obligaled to obtain and carry any other form or fonns of insurance as it or Landlord's mortgagees may reasonably detennine advisable. Section 15 03. Tenant will not keep, use, sell, or offer for sale in, or upon, the Premises any article which may be prohibited by an insurance policy periodically in forcc covering the Building. Section 15 04. If any of Landlord's insurance policies shall be canceled or cancellation shall be threatened or the coverage thereunder reduced or threatened to be reduced in any way because of the use of the Premises or any part thereof by Tenant or any assignee or subtenant of Tenant or by anyone Tenant pemlits on the Premises and, if Tenant fails to remedy the condition giving rise to such cancellation, threatened cancellation, reduction of coverage Or threatened reduction of coverage with 48 hours after notice thereof, Landlord may, at its option, either temlinate this Lease or enler upon the Premises and attempt lo remedy such condition, and Tenant shall promptly pay the cost thereof to Landlord as additional Renlal. Landlord shall not be liable for any damage or injury caused to any property of Ten ant, or of others located 011 the Premises resulting from such entry. If Landlord is unable, or elects no I, 10 remedy such condition, then Landlord shall have all of the remedies provided for in this Lease in the event of a default by Tenant. Notwilhstanding the foregoing provisions of this Section 15.04, if Tenant fails to remedy as aforesaid, Tenant shall be in default of its obligalion hereunder and Landlord shall have no obligalion to remedy such default. Section 15 05. All policies covering real or personal properly which Landlord obtains affecting the Premises shall include a clause or endorsement denying the insurer any rights of subrogation against lhe other parly to the exlenl rights have been waived by the insured before the occurrence of injury or loss. Landlord and Tenant waive any rights of subrpgation or recovery against the other for damage or loss to their respective property due to hazards covered Of which should be covered by policies of insurance obtained or which should be or have been obtained pursuant to this Lease, to the exlent of the injury or loss covered or which should have been covered thereby, assuming that any deductible shall be deemed 10 be insurance coverage. ARTICLE 16 DAMAGE BY FIRE OR OTHER CASUALTY ~eclion 1601 Tenant aud Landlord shall immediately notify the other party of any damage to the Premises. In the event that lhe Premises or any portion thereof, is damaged by any casualty not required to be insured against by Landlord under Section 15.02, and the cost to repair Ole damage exceeds $50,000. Landlord shall have lhe right to tenninale lhis Lease by _t...._._ 9 wriUen notice to Tel. given within sixty (60) days after the date of _yoh damage, provided, however, that those provisions oflhis. Lease which are designated to cover malters of termination and lhe period thereafter shall survive the temlination hereof. Subject to Sections 16.02, 16.03, and 16.04 hereof, if the Premises is damaged so as to affect the Premises by fire or other casualty against which Landlord is required 10 be insured under Section 15.02, Tenant shall immediately notify Landlord, who shall, only if the proceeds from Landlord's insurance available to Landlord and free from collection by Landlord's mortgagee or any ground or primary lessor are sufficient, have the damage repaired with reasonable speed at lhe expense of Landlord, subject to delays . which may arise by reason of adjustment of loss under insurance policies and to other delays beyond Landlord's reasonable control. An abatement in the Rental hereunder shall be allowed as to that portion of the Premises rendered untenantable by such damage until such time as Landlord determines that such damaged portion of the Premises has been made tenantable. If Landlord has not restored lhe Premises within one hundred eighty (180) days after the date of such damage, Tenant shall have the right at its option to tenninate this lease by sending written notice of such election 10 Landlord within thirty (30) days after the expiration of the one hundred eighty (180) day period. Section 16 02. If all or any portion of the Premises is damaged or destroyed by any casualty against which Landlord is required to be insured under Section 15.02, and if, in Landlord's reasonable opinion, Ihe Premises cannot be rebuilt or made fit for Tenant's purposes within one hundred eighty( 180) days of the damage or destruction, or if the proceeds from insurance remaining after payment of any such proceeds to Landlord's mortgagee or any ground or primary lessor are insufficient to repair or restore the damage or destmclion, La:ldlord may, at its option, terminate this Lease by giving Tenant, within sixly (60) days after such damage or destruction, notice of lenninalion, and thereupon Rental and any other payments for which Tenant is liable under this Lease shall be apportioned and paid to the date of such damage, and Tenant shall immediately vacate Ule Premises, provided, however, thai those provisions of this Lease which are designated to cover mailers oflennination and lhe period thereafter shall survive the tem1ination hereof. Section 1603. If the Premises or any p0l1ion thereof is damaged or deslroyed by any cause whatsoever, to the extenl that <a) in Landlord's reasonable judgmenl, it would not be economically feasible to repair Of restore such damage or destmction, or (b) in Landlord's reasonable judgment, the damage or destnlction to the Premises cannot be repaired or restored within one hundred eighty (180) days after such damage or destruction, Landlord may, at its option, terminate this Lease by giving Tenant, within sixly (60) days after such damage or deslruclion, notice of such temlinalion requiring Tenant to vacate the Premises sixty (60) days after delivery of the notice o[ tennination, and thereupon Rental and any other payments shall be apportioned and paid 10 the date on which possession is relinquished and Tenant shall immediately vacate the Premises according to such notice of termination. provided, however, that those provisions of this Lease which are designated 10 cover matters of termination and the period thereafier shall survive the temlination hereof. Section 1604. If the Premises, or any substantial portion of it, is substantially destroyed by fire or other cause at any time during the last two (2) years of lhe Tenn, Landlord may terminate this Lease upon wriUen notice to Tenant given within sixty (60) days after the date of such destruction, provided, however, that those provisions of this Lease which are designated to cover matters of tenllination and the period thereafter shall survive the tennination hereof. NotwiUlstanding the foregoing. if Tenant exercises its Option to Extend as described in Article 32 hereof, Landlord will restore the premises in accordance with Article 16.02 and 16.03. Section 1605. No damages, compensation, or claim shall be payable by Landlord for inconvenience, loss of business, or annoyance arising from any repair or restoration of any portion of the Premises. Landlord shall use its best efforts to have such repairs made promptly so as not to unnecessarily interfere with Tenant's occupancy. S~c.lion 16.06. The provisions of this Article shall be considered an express agreement "................ 10 governing any case ot .tlage or destruction of the Premises by fire or Ohh...I- casually_ ARTICLE 17 CONDEMNATION ~ection 17 01. In the event the whole or substantially the whole of the Premises are taken or condemned for any public purpose, this Lease and the leasehold estate created hereby shall . cease and lenninate as of the date of such taking, provided, however, that those provisions of this Lease which are designated to cover matters oftennination and the period thereafter shall survive the temlination hereof. Section 17 02. In the event that any porlion of the Premises shall be taken or condemned for any public purpose, and as a resull of such laking the Premises cannot be restored in an economically feasible manner so as to not interfere with Tenant's use or operation of the Premises, lhen Landlord shall have Ihe option to tenninale this Lease, effective as of the dale specified by Landlord in its notice of termination, provided, however, that those provisions of this Lease which are designateu to cover matters of tennination and the period thereafter shall survive the temlination hereof. In the event ten percent (10%) or more of the Premises is taken or condemned for any public purpose and the balance of the Premises is in Tenant's or Landlord's good faith judgment, unusable for the conduct of its business, Tenant or Landlord shall have the righl at ils oplion to lenninate this Lease by sending written nolice of such election to Landlord wilhin thirty (30) days of such laking. Section 17.03. In the event that a portion, but less than substantially the whole, of the Premises should be taken or condemned for any public purpose, then this Lease shall be tenninated as of the dale of such taking as to dIe portion of the Premises so taken, and, unless Landlord or Tenant exercises its option to tenninate lhis Lease pursuant to Section 17.02 above, this Lease shall remain in full force and effect as 10 Ihe remainder of the Premises. In such event, the Annual Base Rental will be diminished by an amount representing the part of such amounts properly applicable 10 dIe portion of the Premises so taken. Section 17 04. In the event of the temlination of Ihis Lease pursuant to the provisions of Sections 17.01, 17.02, or 17.03, this Lease and the Tenn and the eslate hereby granted shall expire as of the date of such termination in the same manner and with the same effect as if that were the dale set for the nonnal expiration of Ihe Tenn of this Lease, and the Rental shall be apportioned as of such date. The provisions oflhis Section 17.04 shall apply in the same manner to any partiallennination of this Lease pursuanllo the provisions of this Article. Section 1705. Except as othelWise provided in Section 17.06 below, Landlord shall be entitled to receive the entire awned in any condemnation proceeding or action for taking, without deduction therefrom for any estate vested in Tenant by Ihis Lease; provided that nothing herein contained shall prohibit Tenant from seeking severance damages or moving expenses so long as such awards do not in any manner reduce the award payable to Landlord. Seclion 17.06. If the Temporary use or occupancy of all or any part of the Premises shall be condemned or laken for any public or quasi-public use during the Tenn, this Lease shall be and remain unaffected by such condemnation or taking and Tenant shall continue 10 pay in full Ihe Rental payable hereunder for any period during such temporary use or occupancy during the Tenn. In the event of any such condemnation or taking, Tenant shall be enlitled to appear, claim, prove and receive the portion of the award for such laking that represents compensation for use or occupancy of the Premises during dIe Tenn, and Landlord shall be entitled 10 appear, claim, prove and receive lhe portions of the award that represent the cost of restoration of the Premises and the use or occupancy of the Premises after the end of the Tenn. Any award to which Tenant is entitled under this Section 17.06 shall be deposited in escrow with a bank or other institution C....L.....d.. 11 approve~ by Lan~lor d Tenant and held as security for lhe perfonTI~. ; of all obligalions of Tenant hereunder. Such deposit shall be invested in an interest~bearing account. money market fund or other liquid investment approved by Landlord ami Tenant and any interest or earnings thereon shall be paid to Tenant so long as Tenant is not in defaull under this Lease. Such escrow fund shall be disbursed to Tenanl in equal monthly installments over the period of months during the TenTI which has been taken by the condemning authority, provided that Tenant is not in defaull at the lime of any such monthly disbursement. ARTICLE 18 ASSIGNMENT AND SUBLETTING Seclion 1&.01. Tenant may not sell, assign, transfer, or hypothecate this Lease or any interest herein (either volnnlarily or by operation of law, including, if Tenant is a corporation, Ihe sale or transfer of a controlling interest in Tenant) or sublet the Premises or any part thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed, except as hereinafter provided. Tenanl may assign or transfer this Lease or sublet the Premises to entities owned or controlled by Tenant. If Tenant should desire to assign this Lease or sublet lhe Premises (or any part thereol) and provided that Tenanl is not then in default hereunder, Tenanl shall give Landlord a copy of the proposed assignment or sublease, together with written notice, at least sixly (60) days in advance of the date on which Tenant desires to make such assignment or sublease. Landlord shall then have a period of thirty (30) days following receipt of such notice within which 10 noti fy Tenanl in writing that Landlord elects either (a) to tenninate this Lease as to the space so affected as of the date specified by Tenant in ilS nOlice, in which evenl Tenanl, subject to the provisions of Articles 19 and 20 and such other provisions of this Lease which expressly survive the tenl1ination hereof, shall have the right for thirty (30) days to withdraw its request for Landlord's consent 10 assignment or sublet, or shall be relieved of all [urther obligations hereunder as to such space; (b) to permit Tenant to assign or sublel such space, subject, however, to dIe subsequent written approval of lhe proposed assignee or ~uhtenant by Landlord, provi~ed, however, that if the proposed assignment or sublease is for more than five thousand (5,000) useabte square feet if the rental rate agreed upon between Tenant and its proposed subtenant under any proposed sublease of the Premises (or any part thereof) is grealer lhan the rental rate payable by Tenant to Landlord hereunder for that portion of the Premises lhat is subject to such proposed sublease, or if any consideration shall be received by Tenant in connection with such proposed assignment or sublease (in addition to rental as provided in such proposed sublease), then such excess rental or such consideration, as the case may be (or both), after deducting Tenant's ~ocumenled costs of improvements, brokerage costs and other reasonable costs relate~ to such assignment or subletting, shall be considered additional Rental owed by Tenant to Landlord, and shall be paid by Tenant to Landlord, in the case of excess rentals, in the same manner that Tenant pays Annual Base Rental and, in the case of the any other consideration, immediately upon receipt thereof by Tenant; or (c) to refuse, in Landlord's sole and absolute discretion, to consent to Tenant's assignment or subletting of such space and to continue this Lease in full force and effecl as to dIe entire Premises. If Landlord should fail to notify Tenant in wriling of such election within such thirty- (30-) day period, Landlord shaH be deemed 10 have elected oplion (c) above. No assignment, transfer, or subletting by Tenant shall relieve Tenant of Tenant's obligations under this Lease. Any allempted assignment or subletting by Tenant in violalion of the terms and provisions of this Section 1&.01 shall be void. In the event Landlord consents to an assignment or sublease pursuanl to this Section 18.01, Tenant shall provide Landlord with an executed copy of such assiglUllent or sublease with three (3) days after its execution. Tenant shaU reimburse Landlord for the payment of Landlord's reasonable attorney's fee incurred in connection with the review of these documents. Section 1 R 02. Landlord may sell. transfer. assign, and convey. all or any part of the Premises and any and an of its dghts under this Lease. and in the event Landlord assigns its rights under this Lease, Landlord shall be released from any further obligations hereunder. and Tenant agrees to look solely to Landlord's successor in interest for perfonnance of such "'''''...''''....4.... 12 obligations. ARTICLE 19 INDEMNIFICATION Tenant waives all claims against Landlord for damage to any property or injury to, or death of~ any person in, upon or about the Premises arising at any time and from any cause other . than solely by reason of the gross negligence or willful misconduct of Landlord, its agenls or employees, and Tenant shall indemnify Landlord and shall hold Landlord harmless from any damage to any property or i'1iury to, or death of, any person arising from the use of the Premises by Tenant or its agents, employees. representatives, contractors, or invitees, except such as is caused solely by the gross negligence or willful misconduct of Landlord, its agents or employees. Without limiting the generality of the foregoing, Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain, flood, snow, or leaks from any part of the Premises or from the pipes, appliances, equipment, plumbing works, roof, or subsurface of any fioor or ceiling, or from the street or any other place, or by dampness or by any other cause whatsoever. Landlord shall not be liable for any such damage caused by other tenants or persons in or about the Premises or by occupants of adjacent property thereto, or by Ihe public, or caused by any private, public, or quasi-public construction or other work, including, but not limited to, any construction, modification~ or operation of underground. ground-level, Of above-ground pedestrian tunnels, bridges. walkways, or similar items. Tenant's foregoing indemnity obligatlon shall include reasonable attorneys' fees, investigation costs. and all other reasonable costs and expenses incurred by Landlord from the first notice that any claim or demand has been made or may be made. The provisions of this Article 19 shall survive the termination of this Lease with respect to any damage, iItiury, or death occurring before such temlinalion. If Landlord is made a party to any litigation commenced by or against Tenant or relating to this Lease or to the Premises, and provided thai in any such litigation Landlord is not finally adjudicaled to be at fault, then Tenant shall pay all costs and expenses, including anomeys' fees and court costs, incurred by or imposed upon Landlord because of any such litigation, and the amount of all such costs and expenses, including attorneys' fees and court costs, shall be a demand obligation owing by Tenant to Landlord. ARTICLE 20 SURRENDER OF THE PREMISES Upon the ex.piration of the Term or other tennination of this Lease for any cause whatsoever, Tenant shall peacefully vacate the Premises in as good order and condition as the same were at the beginning of Ole Tern1 or may lhereafter have been improved by Landlord or Tenant, reasonable use and wear lhereof and damage to the Premises the alterations or Landlord's equipment by fire or other casualty or condemnation only excepted. Should Tenant continue to hold lhe Premises aner the tem1inalion of this Lease, whether lhe tennination occurs by lapse of time or othetwise, such holding over, unless othetwise agreed to be Landlord in writing, shall constitute and be construed as a tenancy at will at a daily Rental equal to I130th of an amount equal to two (2) times the monthly Rental charged at the time of expiration or termination and subject to all of the other ternlS set forth herein except any right to renew this Lease, butlhe foregoing shall not constitute a consent by Landlord to such holding over and shall not prevent Landlord from exercising any of its remedies under this Lease or applicable Jaw by reason of such holding over. Tenant shall be liable \0 Landlord for all damage which Landlord suffers because of any holding over by Tenant, and Tenant shall indemnify Landlord against all claims made by any other tenant or prospective lenant against Landlord resulling from delay by Landlord in delivering possession of lhe Premises to such other tenant or prospective tenant. ARTICLE 21 ESTOPPEL CERTIFICATES c_.....u.._ 13 (When request' J Landlord, any ground or primary lessor, or th, Jlder of any deed of trus.t or mortgage covering the Premises, or any interest of Landlord therein), Tenant agrees to furnish periodically, wilhin ten (10) days of receipt of written request therefor, a certificate signed by Tenanl certifying (to the exlenl same is true) that this Lease is in full force and effect and unmodified; that the Tenn has commenced and the full Rental is then accruing hereunder; that Tenant has accepted possession of the Premises and that any improvements required by the lenns of this Lease to be made by Landlord have been compleled to the salisfaclion of Tenant; that no Rental under this Lease has been paid more than thirty (30) days in advance of its due dale; that the address for notices to be senlto Tenant is as set forth in this Lease (or has been changed by notice duly given and is as set forth in lhe eertificate); that Tenant, as of the date of such certificate, has no charge, lien, or claim of offset under this Lease or otherwise against Rentals or other charges due or to become due hereunder; that Landlord is not then in default under this Lease; and such other matters as may be requested by Landlord, any such ground or primary lessor, or the holder of any such deed of trust or mortgage. If Tenant is unable to so certify as to one or more of the foregoing items, Tenant shall specify its reason therefor in writing. Any such certificate may be relied upon by any prospective purchaser, ground or primary lessor, mortgagee, or any beneficiary under any deed of trust on the building or the Land or any part thereof. If Tenant fails 10 timely deliver such statement, Tenant shall be deemed to have acknowledged that this Lease is in full force and effect, without modification except as may be represented by Landlord and that there are no uncured defaults in Landlord's perfonnance. Landlord agrees periodically to furnish, when reasonably requested in writing by Tenant, certificates signed by Landlord containing substantially the same infonnalion as described above. ARTICLE 22 SUBORDINATION Section 22 0 I. This Lease is subject and subordinate to any first deeds of trust, first mortgages~ or other first security instruments which may from time to time during the Term cover the Premises, or any interest ofLandloro therein. and to any advances made on the security thereof, and to any refinancings, increases, renewals, modifications. consol.idations, replacements, and extensions of any of such first deeds of trust, mortgages. or security instruments, This provision is declared by Landlord and Tenant to be self-operative and no further instrument shall be required to effect such subordinalion of this Lease. Upon demand, however, Tenant shall execute, acknowledge, and deliver to Landlord any further instruments and cerlificates evidencing such subordination as Landlord, or the holder of any first deed of lrust or first mortgage covering the building, the Land, or any interest of Landlord therein, may reasonably require, and Tenanl hereby irrevocably appoints Landlord as Tenant's agent and attorney-in-fact for the purpose of executing, acknowledging, and delivering any such instruments and certificates. Section 22 02. Notwithstanding the generality of the foregoing provisions of Section 22.01 hereof, any such first mortgagee shall have the right, unilaleraIly, at any time 10 subordinate fully or partially any such first deeds of trusl, mortgages, or other security instruments to this Lease on snch terms and subject to such conditions as such first mortgagee may consider appropriate in its discretion. Upon request Tenant shall execute an instrument confim1ing any such full or partial subordination by any first mortgagee. At any lime, before or aner the institution of any proceedings for lhe foreclosure of any such deeds of trust, mortgages, Dr other security instruments, or sale ofthe Premises under any such first deed oftrust, mortgage, or other security instruments, or upon the termination of any ground lease. Tenant shall aHom to such purchaser upon any such sale or the grantee under any deed in lieu of such foreclosure or to any ground lessor in the event of a tennination of a ground lease, and shall recognize such purchaser, grantee or ground lessor, as the case may be, as Landlord under this Lease, Tenant hereby waives the right, if any, to elect to terminate this Lease or to surrender possession of the Premises in the event of the judicial or non-judicial foreclosure of any first deed of trust, mortgage, or security agreement (or any lransfer in lieu thereof) or tennination of a ground lease. TIle foregoing agreement of Tenant to attorn shall survive any such foreclosure sale, trustee's sale, or conveyance in lieu tbereor, or tennination of a ground lease. Tenant shall upon demand c................ 14 at any time, before or c any SHch foreclosure sale, trusteets sale, or con'. .nce in lieu thereof, or tenninatioll of a ground lease, execute, acknowledge, nnd deliver to Landlord's mortgagee or any successor thereof or any then owner of the Premises or to the ground lessor (as the case may be), any written instruments ami certificates evidencing such attornment as Landlord1s mortgagee or groun~ lessor (as lhe case may be) may reasonably, require, and Tenant bereby irrevocably appoints Landlord's mortgagee or ground lessor (as the case may be) as Tenant's agent and attorney-in-fact for the purpose of executing, acknowledging, and delivering any such instruments and certificates. Section 22 03. Should any ground lease be ternlinated, or any first deed of trust, 'mortgage, or security instrument be foreclosed, the Iiabilily of the ground lessor, mortgagee, trustee, or purchaser, as the case may be, as "Landlord" hereunder, shall exist only so long as such person or entity is Ihe owner of lhe Premises, and such liability shall not c.ontinue or survive after further transfer of ownership. Further, Tenant agrees that any such ground lessor, mortgagee, tmstee, or purchaser shall not be liable for (i) any Rental paid more Ulan thirty (30) days in advance of its due dale; (ii) any amendment or modificalion of lhis Lease without the prior wrillen approval of such ground lessor, mortgagee, trustee, or purchaser; or (iii) any default by or any claim against any prior landlord. Section 22 04. Landlord shall use commercially reasonable efforts \0 obtain a so-called non-disturbance agreement from ils current lender. Landlord shall use commercially reasonable efforts to obtain a so-called non-disturbance agreement from any future lender in form and substance reasonably acceplable to Tenant. ARTICLE 23 DEFAULT AND REMEDIES Section 23 0 I. The occurrence of anyone or more of the following events shall constitute an event of default under this Lease: (a) if Tenant shall fail to pay any Rental or other sums payable by Tenant hereunder as and when such Rental or other sums become due and payable and such failure shall conlinue for more than five (5) days after it is due and payable; (b) if Tenant shaH fail to perform or observe any other covenant or obligation hereunder and such failure shall continue for more limn ten (10) days after notice thereof from Landlord, or, if such failure cannot be corrected within such ten- (10.) day period, if Tenant does not commence to COlTecl same within said ten. (10.) day period and lhereaner diligently prosecute the correction of same to completion; (c) if Tenant deserts or vacates any substantial portion of the Premises; (d) ifany petilion is filed by or against Tenant or any guarantor ofTellant's obligalions under lhis Lease under any section or chapter of the present or any future Federal Bankruptcy Code Of under any similar law or slatute of the United States or any state thereof; (e) if Tenant or any guarantor of Tenant's obligations under this Lease becomes insolvent or makes a transfer in fraud of creditors; (I) if Tenant or any guarantor of this Lease makes an assignment for the benefit of creditors; or (g) if a receiver, custodian, or tmstee is appointed for Tenant or for any of the assets of Tenant which appointment is not vacated within sixty (60) days of the date of such appointment. Section 23.02. If an event of default occurs then at any time thereafter while Tenant remains in default, Landlord may do anyone or more of the following without any notice or demand: (a) Temlinate this Lease, in which event Tenant shan immediately surrender the Premises to Landlord. If Tenant fails to do so, Landlord may, without notice and without prejudice to any other remedy Landlord may have, enter upon and take possession of the Premises and expel or remove Tenant and its effects without being liable to prosecution or any claim for damages therefor; and Tenant shall indemnify Landlord for all loss and damage which Landlord may suffer by reason of such termination. whether through inability to relet the Premises or otherwise. including any loss ofRentnl for the remainder ofthe Term. ca~u ~......c 15 (b) 'J ..._.l1inale this Lease, in which event Tenant's evem of default should be considered a total breach of Tenanl's obligations under this Lease and Tenant immediately shall become liable for such damages for such breach, in an amount equal 10 the total of (1) lhe costs of recovering the Premises; (2) the unpaid Rental earned as of the date of termination, plus inleresllhereon at a rate per annum from the due date equal to five percent (5%) over the Prime Rate, provided, however, that such interest shall never exceed lhe Highest Lawful Rate; (3) the amount of the excess of (i) the total Rental and other benefils which Landlord would have received unuer this Lease for the remainder of the Term. at the rates then in effect, together with ~1I other expenses incurred by Landlord in connection with Tenant's default, over (ii) the Fair Market Value Rate (defined below) of the balance of the Teml as of the time of such breach, discounted at the rate of four percent (4%) per almum to the then-present value; and (4) all olher sums of money and damages owing by Tenanl to Landlord. For purposes of Ihis Section 23.02(b), the term "Fair Market Value Rale" means the fair market value rental rate for a comparable lease term commencing at a comparable time for comparable tenants leasing space of comparable size and equivalent quality and located within twenty (20) mile radius of the Premises. (c) Enter upon and take possession of the Premises as Tenant's agent without tenninating this Lease and without being Hable to prosecution or any claim for damages therefor. and Landlord may relet the Premises as Tenant's agent and receive the Rental therefor, in which event Tenant shaH pay to Landlord on demand any and all costs of releasing. renovating, repairing, and altering lhe Premises (including, but not limited to advertising costs, commissions, finders fees and other similar costs) for a new tenant or tenants ami any deficiency that may arise by reason of such reletting, provided, however, that Landlon! shall have no duty to relet the Premises and Landlord's failure to relet the Premises shall nol release or affect Tenant's liability for Rental or for damages. (d) Do whatever Tenant is obligated to dq under this Lease and may enter the Premises without being liable to prosecution or any claim for damages therefor, to accomplish this purpose. Tenant shall reimburse Landlord immedialely upon demand for any expenses which Landlord incurs in thus effecting compliance with this Lease on Tenant's behalf, and Landlord shall not be liable for any damages suffered by Tenant from such action, whether caused by the negligence of Landlord or otherwise. Section 23.03. No act or thing done by Landlord or its agents during the Ternl shall constitute an acceptance of an attempted surrender of the Premises. and no agreement to accept a surrender of the Premises shall be valid unless made in wriling and signed by Landlord. No re-entry or taking possession of the Premises by Landlord shall constitute an election by Landlord to temlinate this Lease~ unless a written notice of such intention is given to Tenant. Notwithstanding any such relelling or re-entry or taking possession, Landlord may at any time thereafter temlinate this Lease for a previous default. Landlord's acceptance of Rental following an event of default hereunder shall not be construed as a waiver of such event of default. No waiver by Landlord of any breach of III is Lease shall constitule a waiver of any other violation or breach of any of lhe terms hereof. Forbearance by Landlord to enforce one or more of the remedies herein provided upon a breach hereof shall not constitute a waiver of any other breach of the lease. Seclion 23 04. No provision of this Lease shall be deemed 10 have been waived by Landlord unless such waiver is in writing and signed by Landlord. Nor shall any custom or practice which may evolve between the parties in tile administration of the terms of this Lease be construed to waive or lessen Landlord's right 10 insist upon strict performance of the tenns of this Lease. The rights granted to Landlord in this Lease shall be cumulative of every other right or remedy which Londlord may otherwise have at raw or in equity or by statute, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. ~..&I.&&.&.- 16 ARTICLE 24 WAIVER BY TENANT To the extent permitted by applicable law, Tenanl waives for ilself and all claiming by, through, and under it, including creditors of all kinds: (a) any right and privilege which it or any of them may have under any present or future constitution. statute, or rule of law to redeem the Premises or to have a continuance of this Lease for the Tenn after termination of Tenant's right . of occupancy by order or judgment of any court or by any legal process or writ, under the lemlS of this Lease, or afier the tennination of the Tenn as herein provided; (b) the benefits of any present or future constitution, slatute, or rule of law which exempts property from liability for debt or for distress for rent; and I!} the provisions of law relating to notice andlor delay in levy of execution in case of eviction of a tenant for nonpayment of rent ARTICLE 25 SECURITY DEPOSIT The Security Deposit (herein so called) shall be equal to one months rent, eleven thousand dollars ($11,000.00). ARTICLE 26 ATTORNEYS' FEES AND LEGAL EXPENSES In any action or proceeding brought by either party against the other under this Lease, the prevailing party shall be entitled to recover from the other party a\lomeys' fees, investigation costs, and other legal expenscs and court costs incurred by such party in such action or proceeding. ARTICLE 27 NOTICES Any notice or document required to be delivered hereunder shall be considered delivered, whether actually received or nOl, sevenly-two (72) hours after deposited in the United States mail, postage prepaid, registered or certified mail. return receipt requested. addressed to the parties hereto at the respective addresses below, Qr at such other address as they have subsequently specified by written notice. Landlord: Tenant: Cocoa Enterprises, Inc. C/O Select Capital Corp. P.O. Box 2034 4718 Old Gettysburg Road Mechanicsburg, P A 17055 AUn: Michael E. Salerno Stephen J. Smilh, CEO The Fitness Company Ownership Group 70 Wood Avenue South Iselin, NJ 08830 Additional copies sent to: Gerald P. Lally, Esq. Giordano, Halleran & Ciesla P.O. Box 190 125 Half Mile Road Middletown, NJ 07748 ARTICLE 28 MISCELLANEOUS C_.Lo...."". 17 Section 28.0 I. nere this Lease requires Tenant to payor to rein.....urse directly Landlord for any item, such payment or reimbursement will be the customary charge therefor periodically established by Landlord (which charge may include, at lhe discrelion of Landlord, a reasonable allocation of Landlord's overhead. administrative. and related costs and a reasonable fee to Land\onl associated with the service in question). Failure to pay any such charge shaH be considered as a failure to pay Rental, and, as a result, Landlord shall be entitled to all applicable rights and remedies. Section 28 02. Tenant represents and warrants that it has not entered into any agreement . with. nor otherwise had any dealings with. any broker or agent in connection with the negotiation or execution of this Lease which CQuld form the basis of any claim by any such broker or agent for a brokerage fee or commission, finder's fee. or any other compensation of any kind or nature in connection herewith, and Tenant shall indemnify and hold Landlord harmless from any costs (including. but not limited to, court costs. investigation costs) and attorneys. fees), expenses. or liability for commissions or other compensation claimed by any brok.er or agent with respect to this Lease which arise out of any agreement or dealings, or alleged agreemenl or dealings. between Tenant and any such agent or brok.er. Section 28 03. As used herein, "business days" means Monday through Sunday (except holid.ays)~ .'normal business hours" means 6:00 a.m. to 10:00 p.m. on business days; and '.holidays" means those holidnys designated by Tenant. Section 28.04. Every agreement contained in this Lease is, and shall be construed as, a separate and independenl agreement. If any tenn of this Lease or the application thereof to any person or circumstances shaH be invalid and unenforceable, the remainder of this Lease, or the application of such tenn to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected. Section 2805. There shall be no merger of this Lease or of the leasehold estate hereby created with the fee estate in lhe Premises or any part thereof by reason of the fact tllOlthe same person may acquire or hold, directly or indirectly, this Lease or the leasehold eslate hereby created or any interest in this Lease or in such leasehold estate as well as the fee estate in the Premises or any interest in such fee estate. In the event of a volunlary or other surrender of this Lease, or a mutual cancellation hereof. Landlord may, at its option, terminate all subleases, or treal such surrender or cancellation as an assigrunent of such subleases. Section 28 06. Any and all covenants. undertakings and agreements herein made on the part of Landlord are made and intended not as personal covenants, undertakings and agreements or for the purpose of binding Landlord personally or the assets of Landlord except Landlord's interest in the Premises, but are made and intended for the purposes of binding only the Landlord's interest from time to time in the Premises. No personal liability or personal responsibility is assumed by, nor shall at any time be asserted or enforceable against, Landlord or its agent or agents, beneficiaries, partners, or their respective heirs, legal representatives, successors. and assigns on account of this Lease or on account of any covenant, undertaking, or agreement of Landlord contained in this Lease, aU such liability being specifically waived by Tenant. This clause shall not limit or deny any remedies which Tenant may have in lhe event of default by Landlord hereunder which do not involve the personalliabilily of Landlord. Section 2807. Whenever a period of time is herein prescribed for action to be taken hy Landlord, Landlord shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time any delays due to strikes, riots, acts of God, shortages of labor or materials. war, govemmentallaws, regulations, or restrictions, or any other cause of any kind whatsbever which is beyond the reasonable control of Landlord. ~ection 28 08. The article headings contained in this Lease are for convenience only and shall not enlarge or limit the scope or meaning of the various ilnd several articles hereof. Words of any gender used in this Lease shaH be held to include the pluraJ. unless the context otherwise ""...1.<00....... 18 requires. Rection 28 09. If there is more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several, and all agreements and covenants herein contained shall be binding upon the respective heirs, personal representatives, successors~ and, to the extent permitted under lhis Lease, assigns of the parties hereto. Section 28 10. Neither Landlord nor Landlord's agents or brokers have made any . representations or promises with respect to the Premises except as herein expressly set forth and all reliance with respect to any representations or promises is based solely on those contained herein. No rights, easements, or licenses are acquired by Tenant under this Lease by implication or otherwise except as expressly set forth in this Lease. ~ectjon 28 1 L This Lease sets forth the entire agreement between the parties and cancels an prior negotiations, arrangements, brochures, agreements, and understandings, if any. between Landlord and Tenant regarding the subject matter of this Lease. No amendment or modification of this Lease shall he binding or valid unless expressed in a writing execuled by both parties hereto. Section 28.12. The submission of this Lease to Tenant shaH not be construed as an offer, nor shall Tenant have any righls with respect thereto unless Landlord executes a copy of this Lease and delivers the same to Tenant. Section 28 13. Tenant signs as a corporation, and consequently, each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant is a duly organized and existing corporation, lhat Tenant has been and is qualified 10 do business in the State of Pennsylvania, that the corporation has full righl and authority to enter into this Lease, and that all persons signing on behalf of the corporalion were authorized to do so by appropriate corporate actions. Section 28 14. If. in connection with obtaining financing for the Premises (including syndications or sale/leasebacks), any lender or grollnu lessor shall request reasonable modifications to this Lease as a condition for such financing, Tenant will not unreasonably withhold, delay. or defer its consent thereto, provided that such modifications do not increase the obligations of Tenant hereunder or materially adversely affect either the leasehold inlerest hereby created or Tenant's use and enjoyment of the Premises. Section 2815. This Lease shall be governed by and construed under Ihe laws of the State of Pennsylvania. Any aClion brought to enforce or interpretlhis Lease shall be brought in the court of appropriate jurisdiction in Cumberland County. Should any provision of lhis Lease require judicial interpretation. it is agreed that the court interpreting or considering same shall not apply the presumption that the temlS hereof shall be more strictly conslnled against a party by reason of the rule or conclusion that a document should be construed more strictly against the party who itself or through its agent prepared the same, it being agreed that all parties hereto have participated in the preparation of this Lease and that legal counsel was consulted by each party herelo before the execution of this Lease. Section 28.16. Intentionally Omitted. Section 28 17. Any elimination or shulting off of Iighl, air, or view by any structure which may be erected on lands adjacent to the Premises shall in no way affect this Lease or impose any liability on Landlord. Seclion 28.18. The exhibits referred to in the Table of Contents are by this reference incorporated fully herein. The teml nUl.is Lease" shall be considered to include all such exhibits. ~ection 28 19. Landlon.l and Tenant waive trial by jury in any action or proceeding brought by either oflhe parties hereto against the other or on any counterclaim in respect thereof C...D.too....dDD 19 on any matters what", er arlsmg Qut of. or in any way connected .lith this Lease, the relationship of Landlord and Tenant. Tenant's use or occupancy of the Premises. and/or any claim or injury or damage under this Lease. Section 28 20. A maximum weight of one hundred (100) pounds per square foot is building load capacity and Tenant is responsible for compliance. ARTICLE 29 TERMINATION OPTION Landlord reserves the right to terminate lhis Lease if Tenant fails to maintain the club within guidelines and standards set by the (lHRSA) Inlemational Health and Racquet Sports Association or any successor body. ARTICLE 30 SURRENDER AT END OF TERM: WAIVER Tenant shall immediately sUITender possession of {he Leased Premises at the expiration of the Primary Term or of any Renewal Tenn hereof or upon its prior termination. Tenant shall return the Leased Premises clean and free of debris, ami in good order and condition, reasonable wear and tear and damage by fire or other hazard not occurring through any willful or illegal act or omission of Tenant. its employees. agents or invitees. alone excepted. In addition, Tenant shall deliver 10 Landlord or its Managing Agent, if above named, all keys, plastic cards or other entry devices for the Leased Premises, the Building and its appurtenances. Tenant waives all right to any notice which may be required under any laws now or hereafter enacted and in force in Pennsylvania, including the Landlord and Tenant Act of 1951, Act of April 6, 1951, as amended. Tenant agrees to give up quiet and peaceable possession of the Leased Premises at the end of the primary tenn or of any renewal term without further notice from Landlord. ARTICLE 31 OPTION TO PURCHASE At the expiration of lhis Lease, provided Tenant is not in defaull under any of the tenns and conditions of this lease, Tenant, may, at its option purchase the intangible assets of landlord for a lump sum payment of six hundred thousand dollars ($600,000). The intangibles shall include membership lists, trade names, processes and logos. It shall nol include any part of the Premises, improvements, or equipment owned by landlord. Tenant shall provide Landlord written nolification to exercise this option at least one year prior to the expiration of the Lease. ARTICLE 32 NON. COMPETITION Tenant agrees that for a period of one (1) year period following the expiration or termination of this Lease, Tenant or its affiliates. assignees or any entity in which it owns 5% or more will not own, operate or manage a facility that is competitive with the Club within a three (3) mile radius of the Premises. ARTICLE 33 MEMBERSHIPS Landlord shall for the term of the lease be entitled to 10 family VIP memberships al no charge. c.... ~......... 20 ARTICLE 34 CONFESSION OF JUDGMENT If any base rent and/or llny additional rent is not paid when due and payable hereunder anu shall remain unpaiu for a period often (10) days after wrillen nolice of Landlord's intention to file a confession of judgmenllhereofllas been given to Tenanl by Landlord, Tenant hereby empowers any prothonotary or aUomey of any court of record to appear for Tenant in any and all . actions which may be brought for rent and/or to sign for Tenant an agreement for entering in any competent court an amicable action or actions for the recovery of rent or other charges or expenses, and in said suits or in said amicable actions or actions to confess judgment against Tenant for all or any part of the rent specified in this Lease and then unpaid including, at Landlord's option, the rent for the entire unexpired balance ofthe term ofthis lease and/or charges. payments, costs and expenses agreed to be paid by the Tenant, and for interest and costs together wilh reasonable allomeys' fees. Such aUlhority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any of said rent shall fall due or be in arrears, and such powers may be exercised as wen after the expiration of the original tenn and/or <.luring any extension or renewal of this lease. Tenant further. at the option of LandI on I. authorizes and empowers any such attorney, either in addition to or without such judgment for the amount due according to the terms of this Lease, to. appear for Lessee and confess judgment forthwith against Tenant, and in favor of Landlord, in an amicable action of ejectment for the Premises above described, with aU condition, fees. releases, waivers of stay or execution anel waiver of exemption to accompany said confession of judgment in ejcclment as are set forth herein for confession of judgment for said sum or sums due; and authorizes the entry of such action, confession of judgment therein, and immediate issuing of a writ of possession, without leave of court, and Lessor may without notice re-enter and expel Lessee from the Premises, and also any person holding under him or them, and in each case, this Lease or a lrue copy thereof shall be a sufficient warrant of any person. Such authority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any of said rent shaH fall due or be in arrears, and such powers may be exercised as. well after the expiration ofthe original term anc1'or during any extension or renewal of this Lease. Tenant acknowledges that it has read and understood the provisions ofthis section, including the Conression of Judgment Provisions. Tenant further acknowledges and agrees that (i) it is familiar with Confession ofJudgments, (Ii) il has consulted, or had an opportunity to consult, counsel of its choice for a further explanation of, and advice concerning, the Confession of JUlJgment Provisions, (iii) Tenant understands that the Confession of Judgment Provisions. jf and when enforced by Lessor, may result in a court judgment against Tenant and the seizure and loss of Tenant's property) including Tenant's interest in this Lease and other assets or property. wilhout a prior hearing or notice, and (iv) Tenant knowingly, intentionally, voluntarily and freely waives any right to notice or opportunity for a hearing before Landlord exercises any powers under the Confession of Judgmcnt Provisions, including entering a court judgment against Lessee and executing and seizing assets or property of Lessee (including, but not limited to, the premises) pursuant to any confessed judgment. ""..........- 21 . . EXECUTED u. .. seal as ofthe date first written above. TENANT TL~ F. in"., fofTI!"'^;r ~J.Jn~r.sl...n &=1\ Witness: By: !3~ JJ+ By: ~b\.-~ .~~ S'~~F'k" T. ~,+L (print) Name: Its: CEO (Corporate Seal) LANDLORD Witness: (Oc. oc..... en ~/rv/J~~~ ~( ,,~f JJ- By: Kfi If aT] Its: (It (t &"JIPr~ 'f- c...~. t.....d.. 22 Exhibit A Legal Description of the Property Cocoa Conrt Clnb All that certain lot or piece ofland situate in Derry Township, Dauphin County, Commonweallh of Pennsylvania, identified as Lot No.3 on Subdivision Plan litled "Cocoa .Avenue Commercial Tract," prepared by John C. Brilhart Surveying and Mapping Services, of Mechanicsburg, Pennsylvania, and bearing soul of Charles W. Junkins, Regislered Surveyor No. 11804-E, and dated April 14, 1978, revised October 16, 1978, and recorded in the Recorder's Office in and for Dauphin County aforesaid in Plan Book E, Volume 3, Pages 14 and IS, bounded and described in accordance with said Plan as follows: Beginning at a point on the Easterly right-of-way line of Cocoa Avenue (pennsylvania Legislative Roule No. 22007, Pennsylvania Traffic Route No. 743), which point is five hundred forty-nine and ninety-seven hundredths (549.97) feet Northwardly from the Northerly righl-of- way line of Fishburn Road (also Pennsylvania Legislative Roule No. 22007, Pennsylvauia Traffic Route No. 743), said beginning point being also the Northwesterly comer of Lot No.2 on aforesaid Subdivision; thence extending along the Easterly right-of-way line of Cocoa Avenue, North five (5) degrees, zero (00) minutes East, for a distance of three hundred (300.00) feet to a concrele monument; thence extending along remaining lands of Milton Hershey School, in and through a twenty-five (25) feet wide utility easement and crossing a twenty-five (25) feet wide drainage easemenl, South eighty-five (85) degrees, zero (00) minutes Easl, for a dislance of two hundred filly (250.00) feet to a concrete monument; lhence eXlending along said remaining lands of Milton Hershey School, South five (5) degrees, zero (00) minutes West, for a distance of three hundred (300.00) feet to a point, the Northeasterly comer ofLol NO.2; and thence extending along line of said Lot No.2, crossing the aforesaid drainage easement and a thirty (30) feet wide utility easement, North eighty-five (85) degrees, zero (00) minutes West, for a distance oftwo hundred fifty (250.00) feet to a point on tile Easterly right-of-way line of Cocoa Avenue (Pennsylvania Legislative Route No. 22007, Pennsylvania Traffic Route NO. 743), the place of beginning. Containing 1.722 acres. Being part of the same premises which Emma J. Hess, widow, by deed dated December 31, 1951, recorded in the Recorder's Office in and for Dauphin County aforesaid in Deed Book R, Volume 35, Page 449, granted and conveyed to Hershey Trust company, as Trustee for Milton Hershey School, party ofthe first part hereto, its successors and assigns. Subject. however~ to easements visible or of record and as shown on the aforementioned Subdivision. The premises above described have been sold and are now being conveyed in fee simple, and this deed is executed and delivered with the approval of the Managers of Milton Hershey School, free and discharged from alllrusts and wilhout obligation on Ihe part of lhe purchaser or purchasers to look to the application of the purchase money, pursuanllo a Resolulion of the Managers of Milton Hershey School, duty adopted at a meeling held November 28, 1983. H being in their judgment advisable and advantageous to sell the same, and by authority ofa Resolution ofthe Directors of Hershey Trust Company, Trustee, adopted at a meeting held November 28, 1983, authorizing and directing the sale and conveyance of the premises described, and the execution and delivery of this deed. t_.""........ 23 .' . Exhibit B Cocoa Court Club Cardiovascular Equipment t2 Bikes: 10 Lifefitness (4 recumbent, 6 uprighl); 2 Randal Windracers . 6 Treadmills: Lifefitness 6 Stairrnasters 4000 3 Stairrnaster Gaunllet 1 Versaclimber 3 Nordic Tracks Free Weights 2 Smith Machines \ Squat Rack I Power Rack 1 Leg Press I Hack Squat 2 Preacher Benches with 3 EZ Curl Bars \ Calf Raise Machine I Military Shoulder Press Bench \ Cable Crossover Machine with attachments I Decline Bench I Paramount T -Bar Row 1 Incline Bench 2 Lal Pulldown Machines with attachments 3 Flat Benches 4 Flat, 2 Incline, 1 Decline Utility Benches 7 Olympic Bars Weight Plates: (2) \00 Ibs; (26) 45 Ibs; (\8)35 Ibs; (18) 25 Ibs; (20) 101 bs; (\4) 5 lbs; (7) 2.5 lbs; (6) 1.25 Ibs Dumbbells: (2) 2.5lbs; (6) Sibs; (6) 8 lbs; (6) \0 lbs; (6) 12tbs; (6) 15lbs; (4) 201bs; (4) 25 lbs; (4) 30-80 Ibs; (2) 85 Ibs; (2) 90 Ibs; (2) \00 Ibs Lifefitness Strength Equipment Horizontal Leg Press Seated Leg Curl Hip Abduction Seated Rowing Seated Chest Press Lateral Raise Tricep Machine Abdominal Machine Leg Extension Hip Adduction Lat Pull Down Rear Deltoid/Pectoral Fly Shoulder Press Bicep Curl Low Back Dip/Chin Assist Nautilis Strength Equipment 4 Way Neck Machine Multi-Exercise (Calf-Raise) Conquest Total Hip Double Chest Rotary Torso 2 Ab Trainers _I.un."" 24 Exhibit C Guaranty WHEREAS, The Fitness Company Ownership Group, Inc., a Delaware Corporation, desires to enler inlo the Lease mentioned below, as Tenant (the "Tenant"); and WHEREAS, the undersigned 111e Fitness Company Holdings Group, Inc., a Delaware 'Corporation (hereinafter referred to as "Guarantor'') has requested Cocoa Enterprises, Inc. (the "Landlord"), to enter inlo a lease (the "Lease") with Tenant, for celtain space in lhe Building known as Cocoa Court Club, 1249 Cocoa Avenue, Hershey, PA 17033; and WHEREAS, Landlord has refused to consent to and enter inlO the Lease unless Guarantor guarantees the Lease in lhe mallller stated below. NOW, THEREFORE, in consideration of the direct and material benefits that will accrue to Guarantor, and for the purpose of inducing Landlord to execute the Lease, Guarantor hereby agrees as follows: t. Guarantor unconditionally and ilTcvocably guarantees the payment and performance of, and agree 10 pay and perfornl as primary obligor, all liabilities, obligations and duties (including but not limited to payment of rent) imposed upon the Tenant under the ternlS of the Lease. This is a continuing guaranty and shall apply to any and all Lease amendments, extensions and modifications whatsoever. Guarantor expressly consents to any extension of time, leniency. modification. waiver, forbearance, or any change which may be made in any tenn and condition of (he Lease, and no such change, modificalion, extension. waiver, or forbearance shall release Guarantor from any liability or obligation hereby incurred or assumed. 2. Guarantor expressly waives notice of acceptance ofthis Guaranty. demand, all offsets and counterclaims, notice of dishonor, protest or notice of pro lest of every kind. each and every notice to which Guarantor may be entitled under the Lease or otherwise, natke of default in or under any of the tenns of the Lease, notice and demand of any and all proceedings in connection with the Lease (including demand for performance of the Lease), diligence in coJleclion any sums due under the Lease or enforcing any of the obligations under the Lease, bring of suit and diligence in taking any action with reference thereto or in handling or pursuing any of Landlord's rights under the Lease. 3. Gnarantor agrees that any and all judgments resulting from the liabilities, obligations and duties (including but not limited \0 payment of rent) imposed upon the Tenant under the terms of the Lease shall be binding upon Guarantor. 4. Without notice to or consent by Guarantor, Landlord and Tenant may at any time, modify, extend. amend or make other covenants respecting the Lease as may be appropriate. including subleasing and assigning the Lease to third parties. Guarantor shall not be released but shall continue to be fully liable for payment and perfornlance of all liabilities, obligations and duties of Tennnt under the Lease as modified, extended or amended. The obligations and duties of Ten ant under the Lease as modified, extended or amended. The obligations of the Guarantor hereunder shall not be released by Landlord's receipt, application or release of security given for the perfonnance and observance of covenants and conditions in the Lease to be perfonned or observed by Tenant. 5. Guarantor recognizes tha.t (he obligations under this Guaranty are absolute and uncondilional, and that in the event of a defaull by Tenant of the lerros and provisions of the Lease and after expiration of any applicable grace period in the Lease, Landlord and its successors and assigns shall have the right to demand performance from and proceed against 0.....1..0......... 25 Guarantor or alherwis,- _.ercise any available remedy allaw or in equity t.... enforce the provisions of this Guaranty without lhe necessity of first proceeding against or demanding perfonnance by Tenant of or with respecllo any obligation under the Lease, it being expressly agreed by the Guarantor that their liability under this Guaranty shall be primary. Landlord may maintain successive actions for other defaults under the Lease. Landlord's rights hereunder shall not be exhausted by its exercise of any of its rights or remedies or by any such action or by any number of successive actions, until and unless all obligations hereby guaranteed have been paid and fully performed. 6. Any act of Landlord consisting ofa waiver of any of the tenns or conditions of the Lease, or the giving of any consenl to any manner or thing related tot the Lease, or the granting of any indulgences or extensions of time to the Tenant, may be done without notice to Guarantor and without releasing the obligations of Guarantor hereunder. 7. In the evenlthat any action is commenced by Landlord to enforce the provisions of this Guaranty, Landlord shall be enliUed, if it shall prevail in such action or proceeding, to recover from Guarantor all reasonable costs incurred in connection therewith, including reasonable attorney's fees. 8. Until all the covenants and conditions in the Lease on the Tenant's. part to be performed and observed are fully perfonned and observed, Guarantor: (a) shall have no right of subrogation against the Tenant by reason of any payments or acts of performance by the Guarantor, in compliance with Ihe obligations of the Guarantor hereunder; (b) waive any right to enforce any remedy that the Guarantor now or hereafter shall have against the Tenant by reason of anyone or more payments or acts ofperfonnance in compliance with the obligation s oflhe Guarantor hereunder; and (c) subordinate any liability or indebledness ofthe Tenanl now or hereafter held by lhe Guaranlor to the obligations of the Tenant to the Landlord under the Lease. 9. Guarantor acknowledges that Guarantor are financially interested in Tenant. 10. Guarantor's liability shall not be affected by any indulgence, compromise or setllement agreed upon by Tenant and Landlord, or any Lease termination to Ihe extent Tenant continues to be liable. 11. The liability of the Guarantor hereunder shall in no way be affected by, and Guarantor expressly waive any defenses that may arise by reason of (a) the release or discharge of the Tenant in any creditors' receivership, bankruptcy or other proceedings; (b) the impainnent, limitation or modification of the liability of the Tenant or the eslate ofthe Tenant in bankruptcy, or of any remedy for the enforcement of Ten ant's liability under the Lease, resulting frem 1l1e operation of any present or future prevision of the National Bankruptcy Act or olher statue or form the decision in any court; (c) the rejection or disaffinnance of the Lease in any such proceedings; (d) the modification, assignment or transfer of the Lease by the Tenant ee) any disability or other defense ofthe Tenant; or c..................... 26 (f) the cessation from any cause whatsoever of the liability of the Tenant 12. Guarantor agrees that in the event Tenant shall become insolvent or shall be adjudicated a bankrupt, or shall file a petition for reorganization. arrangement or similar relief under any present or future provisions of the Federal Bankruptcy Code, or any similar law or statute of the United Slales or any Slate thereof, or ifsuch a petition filed by eredilors of Tenant shall be approved by a Court, or ifTenanl shall seek ajudicial readjustment of the rights of its eredilors .under.any present or future Federal or ~tate law, or if a receiver orall or part of Tenant's property and assets is appointed by any State or Federal court: (a) if the Lease shall be terminated or rejected, or the obligations of Ten ani thereunder shall be modified, Landlord shall have the option either (i) to require Guarantor, and Guarantor hereby so agrees, to execute and deliver to Landlord a new lease as tenet for the balance of the term then remaining as provided in the Lease and upon the same tenus and conditions as set forth therein, or (iI) to recover from Guarantor that which Landlord would be entilled to recover from Tenant under the Lease in the event ofa termination orthe Lease by Landlord because of a default by Tenant, and such shalt be recoverable from Guarantor without regard to whether Landlord is enlilled to recover the same from Tenant in any such bankruptcy or olher proceeding. (b) if any obligalion under the Lease isperfomled by Tenant ad all or any part of such perfonnance is avoided or recovered from Landlord as a preference. fraudulent transfer or otherwise, in any bankruptcy, insolvency, liquidation, reorganization or other proceeding involving Tenant, the liability of Guarantor under this Guaranty shall remain in fulnorce and effecl. (c) as further securily for payment of amounts under this Guaranty, Guarantor shall file all claims against Tenant upon any indehtedness of Tenant to Guarantor in any bankruptcy or olher proceeding in which the filing of claims is required by law, and Guarantor shall assign to Landlord all rights of Guarantor thereunder, to lhe extent of Guarantor's obligations under this Guaranly. If Guarantor does not file any such claim, Landlord, as attorney-in-fact for Guarantor, is hereby authorized to do so in the name of Guarantor or. in Landlord's discretion. to assign the claim and to cause proof of claim to be file IN the name of Landlord's nominee. In all such case, whether in administration. bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay 10 Landlord the full amountlhereof, and, to the full ex lent necessary for lhat purpose, Guarantor hereby assigns to Landlord all of Guarantor's rights to any such payments or distributions to which Guaranlor would olherwise be enlitied. 13. All payments by Guarantor hereunder shall be made to Landlord at the address of Landlord set for in the Lease. 14. In the event any condilion of this Guaranty shall be found illegal or invalid for any reason, the reaming provisions shall be interpreted and construed as if the illegal or invalid provision was not a part of this Guaranty. each provision hereof being entirely severable. 15. This Guaranty shall insure to the benefit of Landlord, its heirs, personal representative, successors. and assigns and shall be binding upon the heirs. executors, administrators. personal representatives, successors. and assigns of Guarantor. 16. GUARANTOR AGREES THAT THIS AGREEMENT IS PERFORMABLE IN PENNSYLVANIA AND W AlVE THE RIGHT TO BE SUED ELSEWHERE. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE c....ol.oo.o.._ 27 UNITED STATES A _ICABLE TO TRANSACTIONS IN PENNSYL , ANIA . 17. The rights granted Landlord under this Guaranty shall be in addition to any rights available to Landlord under common law or statute against Guarantor pursuant to the Lease. EXECUTED this (8 day of Fe h ,1998. By: The Fitness Company Holdings Group, Inc. fJ~~>> Attest S'~L~ V~ Stephen Smitll, PreoiaDnt CEe> ""......L.o.6....... 28 I .. ". t~(PY AMENDMENT TO LEASE THIS AGREEMENT is made this 1- day of rJovemw by and between COCOA ENTERPRISES, INC., a Pennsylvania corporation ("landlord"), and THE FITNESS COMPANY OWNERSHIP GROUP, a Delaware corporation ("Tenant"). WITNESSETH: WHEREAS landlord and Tenant entered into a lease dated February 1, 199B (the "lease") pursuant to which landlord leases to Tenant the real property and improvements thereon commonly known as Cocoa Court Club, located at 1249 Cocoa Avenue, Hershey, Pennsylvania 17033, as well as certain personal property; and WHEREAS landlord and Tenant desire to amend the lease with respect to the making of and payment for capital improvements. NOW, THEREFORE, intending to be legally bound and for good and valuable consideration, landlord and Tenant do by these presents covenant and agree as follows: 1. The follOWing provision is substituted for the words "Intentionally Deleted" in Article 7 of the lease: FINANCIAL COVENANT r> r ~'" e,^"'..e...~~1\.. 'IF<: 00, TN;:. Tenant shall provide to landlord income statements, balance sheets, and cash flow $ statements on (a) a quarterly basis for the operation of the Cocoa Court Club and (b) on an annual basis for Tenant's corporation within 120 days of the end of its fiscal year. 2. The following sentence is added to the end of Section 12.01 of the lease: "Commencing with fiscal year 2002 and throughout the Term, Tenant agrees to expend a minimum of$15,000 per year for alterations or major repairs (as defined in Section 12.01 hereof) to the Premises." )0504823 . , -- 3. The followin9 Section 12.05 is inserted into the Lease: Section 12.05. Notwithstanding Sections 12.01 and 12.02 of this Lease, Landlord shall be responsible for making Building System Component Repairs (as defined in Section 12.02) to the roof and HVAC system of the Premises ("Landlord's Alterations"); provided, however, that the cost of Landlord's Alterations shall not exceed $50,000. Landlord's Alterations shall be managed by Landlord's manager, Select Capital Corporation ("Select"). Landlord's Alterations shall be complete by January 1, 2001. Tenant shall reimburse Landlord for the total cost of Landlord's Alterations (the" Alterations Payments") commencing on January 1, 2001 and ending December 1, 2006 by making equal monthly installment payments to Landlord, together with interest at the rate of ten (10%) percent per annum, in the manner provided for payment of the Annual Rental in Section 5.01. Tenant's obligation to pay the Alterations Payments to Landlord shall be in addition to its obligation to pay Rental (as defined in Section 5.04), real estate taxes, and all other charges, costs, and expenses payable by Tenant to Landlord under this Lease. 4. The following Section 12.06 is inserted into the Lease: Section 12.06. Provided that Tenant is not in default and is in compliance with all of the terms and conditions of this Lease, Landlord shall apply the Alterations Payments to Tenant's share of the Building System Component Repairs for the third year of the Term (2000) as set forth in Section 12.02. 5. The following sentence is inserted at the end of Article 26: "In addition, Tenant shall reimburse Select for Select's legal expenses incurred as they relate to the preparation of the Amendment to Lease dated (\CN _ :c , 2000 up to a maximum amount of $1 ,500." [SIGNATURES TO FOLLOW ON THE NEXT PAGE) - 2- ^ . . WITNESS the duly authorized signatures of Landlord and Tenant on the day and year first above written. ~.~~ LANDLORD: Cocoa Enterprises, Inc. A Pennsylvania corporation By ~~ JJ Title: flJ,,/J1 FlJJ( 61.-/1714./ ATTEST: ATTEST: TENANT: The Fitness Company Ownership Group A Delaware corporation By: ~G -~) Title: c.ff) J'4.LUl~ J<<f~ o - 3 - COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. (),')-I.o SlJ ~;;) IL..-- THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : NOTICE OF ENTRY OF JUDGMENT BY CONFESSION TO: The Fitness Company Ownership Group 70 Wood Avenue South Iselin, New Jersey 08830 The Fitness Company Holdings Group, Inc. 70 Wood Avenue South Iselin, New Jersey 08830 Gerald P. Lally, Esquire P.O. Box 190 125 Half Mile Road Middletown, NJ 07748 NOTICE IS HEREBY GIVEN that judgment by confession was entered against you in the above-captioned case on 1.J,.." A. 'f , 2005, in the amount of $1,971,284.67, together with costs and interest at the lawful rate until payment. Prothonotary of Cumberland County ~Q)}~/~. ~ . . t") ':"0 -. -n T r--';"1 ;'11 t;;.:j .r:"' ('",l (:';) C.) 0-1 -0 ~.;... - COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. {Js'. {,,~lJ G;;:J T;y-- THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : CERTIFICATE OF RESIDENCE I hereby certify that the address of the Plaintiff in the foregoing matter is: Cocoa Enterprises, Inc. 4718 Old Gettysburg Road Mechanicsburg, Pennsylvania 17055 I further certify that the last known address of the Defendants in the within proceeding is: The Fitness Company Ownership Group 70 Wood Avenue South Iselin, New Jersey 08830 The Fitness Company Holdings Group, Inc. 70 Wood Avenue South Iselin, New Jersey 08830 FENSTERMACHER AND ASSOCIATES, P.C. DATED::-/ ~-,- By: .::s -:j:1- c-' ~ John R. Fenstermacher Supreme Court 1.0. #29940 Shane F. Crosby Supreme Court 1.0. #92530 5115 East Trindle Road Mechanicsburg, PA 17050 (717) 691-5400 Attorneys for Plaintiff \ ~ <:> i '" " -- r.:> ~ c;/" t;',:;:} .;.>"l ~ ~ -<I ,n ~ c(; \:; \ "- .". '" (' "'"" c:: Iv ... ::~< '" " ---- (,~~: -r:. "" ~ ~ -'-\ ,~) --"- cr' @ - COCOA ENTERPRISES, INC. Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA NO. 05-650 CIVIL TERM v. IN CONFESSION OF JUDGMENT THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS : GROUP, INC. Defendants PETITION TO STRIKE OR OPEN JUDGMENT BY CONFESSION AND NOW, comes the Defendants, The Fitness Company Ownership Group and the Fitness Company Holdings Group, Inc., by and through their undersigned attorneys, Anderson, Gulotta & Hicks, P.c., and files the within Petition to Strike or Open Judgment by Confession, and in support thereof, avers as follows: 1. Plaintiff, Cocoa Enterprises, Inc. by information and belief is a Pennsylvania Corporation with offices at 4718 Old Gettysburg Road, Mechanicsburg, PA 17055. 2. Defendant, The Fitness Company Ownership Group (hereinafter the "Ownership Group"), is a Delaware Corporation with offices located at 118 Headquarters Plaza, Morristown, NJ 07960. 3. Defendant, The Fitness Company Holdings Group, Inc. (hereinafter the "Holdings Group"), is a Delaware Corporation with offices located at 118 Headquarters Plaza, Morristown, NJ 07960. 4. Plaintiff is the owner and lessor of certain real property located at 1249 Cocoa Avenue, Hershey, PA known as the Cocoa Court Club. 5. On February I, 1998, Plaintiff and Defendant, The Fitness Company Ownership Group, executed a written lease for the Cocoa Court Club ("The Lease") with a term beginning February 1, 1998 and ending December 31, 2012. A true and correct copy of the Lease is attached hereto as "Exhibit A" , incorporated herein by reference and made a part hereof. 6. The Plaintiff and the Ownership Group also executed a written amendment to the Lease dated November 30, 2000. A true and correct copy of the Lease Amendment is attached hereto and marked "Exhibit B", incorporated herein by reference and made a part hereof. 7. Defendant Ownership group took possession of the leased premises on February I, 1998 and has occupied the premises continually thereafter. 8. Beginning in November, 2004, Defendant Ownership Group began negotiating with Plaintiff for a buyout of the remaining term of the lease period. 9. On February 4, 2005, Plaintiff filed a Complaint for Confession of Judgment in this court, alleging that the Defendants 1) failed to pay rent and other sums due for the months of November 2004, December 2004, and January, 2005, and 2) failing to expend a minimum of $15,000 for alterations or major repairs to the Cocoa Court Club. 10. On February 4, 2005 attorney John R. Fenstermacher appeared for the Defendants and confessed judgment against the Defendants in the amount of $1,971,284.67, relying on an unspecified warrant of attorney attached to the Complaint in Confession of Judgment as authorization for confessing judgment against the Defendants. A true and correct copy of the Complaint for Confession of Judgment is attached hereto and marked "Exhibit C", incorporated herein by reference and made a part hereof. 11. On February 7, 2005 Plaintiff served Defendants, by first class mail, with a Notice Under Rule 2958.1 of Judgment and Execution Thereon, a true and correct copy of which is attached hereto and marked "Exhibit D", incorporated herein by reference and made a part hereof. I. Petition to Strike Based on Matters Evident on the Record 12. The Confession of Judgment entered against Defendants Holdings Group and Ownership Group is invalid based on defects appearing on the face of the record and should be stricken for the following reasons: A. Neither the Lease Agreement nor the Guaranty contain terms that authorize the Plaintiff to enter Judgment by Confession against Defendant Holdings Group, and as such, Plaintiff has no authority to confess judgment against Defendant Holdings Group. B. Article 34 of the Lease requires the Plaintiff to deliver written notice of an intention to file a confession of judgment 10 days prior to judgment by confession being entered against the Defendant Ownership Group. The Plaintiff did not deliver such written notice of intention to file a confession of judgment to the Defendant Ownership Group, nor did the Plaintiff even aver that such written notice of intention to file a confession of judgment was ever delivered. The delivery of written notice of the intention to file a confession of judgment is a condition precedent to the Lease's grant of authority to confess judgment against Defendant Ownership Group. Absent the delivery of a written notice of intention to file a confession of judgment, neither Plaintiff nor its attorney has authority to enter judgment against Defendant Ownership Group. Plaintiff's failure to deliver notice of such intention and failure to aver such delivery makes Plaintiff's Complaint for Confession of Judgment invalid, and it should be stricken. II. Petition to Open Based on Matters Outside the Record 13. In the alternative, if the Confession of Judgment is not stricken, the Judgment against Defendants Holdings Group and Ownership Group should be opened because of considerations not apparent on the face of the record. In support thereof, Defendants aver as follows: A. The Guaranty attached to Plaintiff's Complaint does not validly bind Defendant Holdings Group. Plaintiff relies on a "Guaranty" executed by Defendant Holdings Group as grounds for confessing judgment against Defendant Holdings Group. As stated above, the Guaranty does not contain terms that authorize the Plaintiff to enter Judgment by Confession against Defendant Holdings Group. Even if it did, however, the Guaranty document is invalid as to the Holdings Group because it was not executed by an officer with the authority to bind the Holdings Group. The Guaranty document attached to Plaintiff's Complaint was signed by "Stephen Smith", however, under the Bylaws of the Holdings Group, Stephen Smith is not authorized to bind the Holdings Group as a guarantor without prior Board of Directors approval, and no such approval was granted by the Board. B. The Damages calculation against Defendant Ownership group requires consideration of numerous factors that require information not evident on the record, including total actual costs of alterations/ major repairs, tenant carry-forward for alterations/major repairs, calculation of Base Rental rate, and calculation of Supplemental Rental Rate based on total income generated by the premises. Because the damages cannot be properly calculated without examining evidence outside the record, the judgment must be opened. C. Entry of Judgment by Confession was improper on the grounds that the waiver of due process rights of notice and hearing was not voluntary, intelligent and knowing. The Confession of Judgment clause appears in a lease that was drafted by the Plaintiff in this case, and Defendants were not able to adequately consult with counsel prior to execution of the lease. Defendants sent a draft of the Lease to outside counsel, but were not able to receive comments on the draft prior to execution. WHEREFORE, for the reasons set forth above, Defendants The Fitness Company Ownership Group and The Fitness Companies Holdings Group, Inc. respectfully request that this Court enter a rule upon Plaintiff to show cause why: a. the Confession of Judgment entered against the Defendants should not be stricken, or in the alternative; b. the Confession of Judgment entered against the Defendants should not be opened. The Defendants further request that the Rule to be entered by the Court include a stay of execution of the Confessed Judgment pending resolution of the validity of the Judgment. Respectfully Submitted, "- ,Mil .f A (,/IA1/'\~ 3')6/05 Michael A. G~q. PAID 78625 Anderson Gulotta & Hicks, P.c. 121 State Street Harrisburg, Pa 17101 717-541-1194 Fax 717-541-5434 Attorneys for Defendants DOkturU C OUiVJ~ 0 lid.!. 3"1 e Ie? Darrin C. Oinello, Esq. PA ID 78157 5405 Jonestown Rd Suite 102 Harrisburg, PA 17112 Co-Counsel for Defendants EXHIBIT "A" " ' ~. Article I: Article l: A.rlicle3: Article 4: Artiele 5: Articl.6: Articl.7: Articlc S: Artiole 9: Artiole 10: Article 1\: Article 12: Article 13: Article 14: Articlc 15: MIcle 16: Article 17: Article 18: Article 19: Article 20: Mic\c 21: Article 22: Miele 23: Article 14: Article 25: Article 26: Article 27: Arlicle 28: Artiele 29: Article 30: Article 31: Artiele 32: Article 33: Artiele 34: Exhibit A: Exhibit D: ExhibitC: Cocoa Lease February 6, 19ge tOr?l Table of Contents Premises Tonn Delivery of fi,e P=i5es to Ten.nl Ae.cepl:ance of the 'Premises. by Tenlont Rental Reoll!state Tau. Inlenn/Jlllllly Deleted Operating Expenses Use ofPremises and Operation oficnanr, Business 1.aws, OIdinan..., andR<'luiremen'" of Public Aulhorities Corn:eat Alteratlo~s and Major Repairs Liens Repairs InSUl'%lDet Oall\alle by Fire or Otbet' ellS"ally Co~demnQtion Assignment Illd Sybletnng Indemnilieat\on Surrender of the Premises Estoppel Certificates" Subordination DcIalJlt and Remedies Waiver by Tenant Security Deposit Atlorney" Fees and Legll\ ExJ>ense. Nolicos Misoe1lane01l$ Tewinadon OpLlon SlllTenderatEnd oiTem: W~iver Option to Purcbase Non.. CompeLltion Memben:lIips Confession ofludgment I, Legal DeS1>riplion of tho ProPert)' E~uiFment Li.t Guaranty l ~2., O!J(} - f<'"I,A.. . :2 1, ODU - ,. '1ZG,/ '" /.m"",ii. INHb:ll cnnl 'Q '~:l, l~ ' ~<.,. ,~ . i:' F~UIll\'t~~ " TIllS LEASE, dated. ~ 1 ~~ 1998, E1 m.de between Cocoa. Enterprises, In.. ("Landlord") and The FilDes. Company OWnership Omup, a Delaware Corporation ("'tenant"). MTICLE 1 PREMIsES Landlord ;. the OWIler in fee simple of th. real property designated on the attached ExhibitA a11l1 made a part hereof, and outlined i,l red 011 the Boundnry SnlVeyDrawing attached hereto as Exhibit A, togeUler wiUt the improvements lhmon known a< Coco> Conrl Club, loeatad at 1249 Cocoa Avenue, Hernbey, PA 17033, .nd lhe personal property (hereioaller referred to os th. "Person.1 Property") lisle<:! 00 Exhibit B .troche<! hereto (which land, building, improvements and Personal Property are hereinafter collectively referred to ..Ille "Premises"). Landlord lease.s the F=ises to T =4 and Tenant leases the l'remises from Landloo:l, for \he Term (as defmed below) and subj""t to the pro"isions hereo~ to each of whieh Landlord and Tenant m.tually 'gree. ARTICLE 2 TERM Section 2.01. The term of tbi. Lease (Ute "Term") sholl begin on. 211/98 (Ute "L","e Commencement Date"). Unless sooner terminated, the Term. shall end at' midnight on I2I31112(lhe "Lease ExpiIl.Uon. Date"). Section 1.02. Provided Tenant performs aJ1 ofTecant's obligations nndO! tbis Le..e, including the p.yment of Renttl! (llS defmed below), Tenant shan, during tIle Term, enjoy the Premises wilbout disturbance from Landlord or any other persons acting by, through. or under Landlord; subject, bow...,,,,_ to Ule terms oflhis Lease. 'This co.enant and aU oUler co.enants of Landlord onw or I(oreafler in lhls Leaae shall be binding 1ljlon Landlord and its Sl!coesSO!1l only witlt respect \0 breaehes 00CU!rl11g dnring its and tbeir ~eclive ownership ofLandlonl'a interest hereunder. ARTICLE 3 DELIVERY OF THE PREMISES TO TENANT Landlord shall doli.or !he Premises in an "As-Is' condition. TenAnt agrees to take !he space a.-i:;, ineluding all Inmiture, lixtures and equipment in LIle Premi.... Londlord will make no funher improvements. Tenant will ltll'/e the use of all furniture, fitness and other equipment without addilional on"t except Cor the on.going mo.intenanoe and rep.ir, Ilnd if necessary, replat.ement oC suoh equipment. Ten.nt may l3$e Lnndlord'. equipment for tradt>in or sale, provided all tmde-in v.lue or proceeds life remitted to Landlord Pll",ided the trade in value i. equal to fair morket value. Tenant will notil)> Londlord in writing prior 10 any disposition of equipment Tenant will own any equipment acquired by Tenant after U" commencement datc oC Ute Lease. As soon as practicable, Tenant and Landlord will jointly prepare Exhibit 13, . detailerllist of personal property currently iI. Ute Premise.:; and wheUter it is owned err leased by Landloul err Tenimt ARTICLE 4 ACCEPTANCE OF THE FRIiMlSES BY ttNANT _\-wOo,d'" 2 WAlt:ll ~nnl 'R 'R~4 ,. 1\ I (\ 'r"\ ~I Taking poss",' of the Premi.es by Tenanl shall be condn,iv, ,idenee that Tea..,t: :<> - (a) acoeptS the, Yran;sci; as aahoble for tho pUlJ'oses for whiob they ore leased; (b) .coopt. the building and every part ond appurtenance thereof as bdng in a good and ..tIsfael"')' eondltion; .nd (c) w.>iV05 any defect. in lbe Promises. Landlord shall nol be lichle, exC.pl for gra.. negligelme or-willful misconduct, to Tenal'll or any Qf its ll.gcnts, employee:s~ lice.nsees; servants~ or invitees for any injury or dnm.ge 10 person or property due to lbe condition Or design of or any defect in the building or ii, mechnnienl system. and, equipment which may exist or occur, ond Tenan~ for itself and its agents, employe.., licen.eeS. servants, and invitee:;, expressly . "'Urnes aU ri.ks ofinjut)' or damage to person or property, either proximate or remote, resulting from the condition'ofthe "Premises or the building. ARTICLE 5 RENTAL Section 5.01. Tenant shall poy [t> Landlord monthly, in advance, withoul demond, on the first doy of each calendar month (the Rental Due Date), on !!Imua! rental (tl>e "Annuol Rental") in ~n amount eqllllllo 1112 of $132,000 per year ($ll,OOO per munlh) "\he Original Armual Bll!!e Rentlll", aubjecllo adjustment as provided in Section 5.02 hereof. Section 502 During lhe Term, Tenant shall poy to L811dloro Percentage Rental in the ""'01lOt and m8Dller lIS hereinafter set forth: (a) Within ninety (90) days aner llle end of every calendar yoar (December 3\) during lhe Term (iacludtng the calendor year in which the Lease Expiration Dale 0=), Tenant shal1 (1) submit It> Landlord a statement certified by an authorized officer ofTenanl aet- ting forth in aeeurnle detail satisfaCtory in scope t1l Landlord tbe Tota] IMam. (as defined in Seclion 5.02(c)) (including an itemization of all elnimed declUClio~ therefrom) for such calendar yeor, OlId (ii) 'psy to LancUonl as Peroenlllge Rental the amount, equal to (Al 18% (tlte "Percentoge Rental Rale") multiplied by the aggreggte Totallncome ror suth coJendnr ym Jess (B) ArmUlll R.en~l for that calendar yent. (b) For at le""t one hundred eighty (l80) dsys aner the expiration of ..eh eolendar year during the Tetm and after !he end of !he T.on, rouant sh.ll deliver to the Premises. within five (5) business doys after noli~ and/or keep and maintain (and shall cause all subtenants, coocessionzires' md licensees to keep and nu.intain) in the Premises full and accunle books of account and, recotds from which 70tal Ineome can be determined for the period in question. Record> of Tenant, any subtenant, concessionaire or licensee shall inolude, but not be limited la, nIl fcdeI?J, stnte and local lax returns, records of daily bank deposits of \he entire receipts from tnw.clions of or from the Premises, bank statements, sales slips, sales checks, mail older records, inventories, teCOrds of goods received, records of daily meipls, snd record. of lmnsactions between TC>lIant and any .ublenon~ concessionaire or licensee of Tennnl l.:.ndlord shall have tho rigl\t frCllll time to time during the one hundred eighty (180) day penod aforesaid to i!l!Jlocl and audit all such books and records relating to Total 10<:0010, ond 7enan~ each sublenanl, con=ionaire and licensee will ptoduce Ihe Same on request by Landlord upon at le!lStten (10) busi~sa days' notice. If any IlUcl, iMpecl;on and audit di.close. that To\8\ Income W!lS understated, Tel\ant shall forthwith pay to L:mdlord ony addiliorutl Percentage Rental shown to be payable, an<11fToUtII1,come for lUly Calendar year or partial Calendaryesr WllS lJI\t!etsLaled by more thai, Iiv. percent (5%), Tea:mt shon olao immediately pay the cost of Lancllord's inspect!oa ant! .owl 1fTenant fails IQ coopernte fully in such inepection and audit, or if ouch inspection and audit discloses dill! actual Totol income exceeded those reported by Tenant by Jive percent (5%) or OlO"", an event of default hereunder shall exiat and Landlord shnl1 be entitled to exercise all of Landlord's rights nnd remedies llnder this Le""e, including those set lorth in ScctIon 23.02 hereof. (el For pUlJ'oa.. of this Section 5.02, the lerm "Totall.come" shall mesn the donar aggregate of all income gCllerated b..ed o. Generally fuocepted Ar:eounting Principals (GAM) in the operation of the Premises, including, but not limited to all initiation fees. joinin$ ~_.W"'d... 3 WAlt:ll G00l 'R 'R~j 7 I 'I .AI Q 'ml ~ , fee;. lenll memb!:~1iI... _Ce8) membership clues received monthly or mo)~ or less o!t.ea. late or administrative or other.fees charged to membem or customers, special feeS (court rental,. us.g. or guest fee<, cl""o fees), instruction or trainlllg fees (I... cornpens.lioll paid to inslruetots (o!Such instructioa Of tI1l\ning or less direct fees paid to jnstructor:~ who are not compensated at the sam,e thue as elnploye"" ofTen\Ult), fees fOrll.. of the nUrsery, pro .hop or other sales of merchandise of "'y type including only the usage or fee received from independent contracto,," for use of space e.g. p~iodic. clothing di"l'mys, elc.), equipment l"Clltal. club rental of IlllY type, including fMotions, pactles, etc., speciol evclll il1come, racquetball or other tournament fees, lesson income .less c1itect feell paid to instructoli who are not compensated ,at U,e wne time.. e'"llployees of Tenant, rental income or any other revenue received for use of the facility or for services rendered to third parties. It ill intended that Totol Income shall be determined in the same 'Milner lIS has b..., during lhe period Tellant l1aa assisted Landlord in Ihe ffi1l1lagement of lIIe Premises. The actual nnmcial statement showhlg Total Income for 1996, for example, is included M Exhibit D. Section 5 03. Beginning on the !irst day of the Ihird (3rd) Lease Year and en the !iI1tday of each Loose Year thelllafler, U,e Annual BllSe Rent then in e!feet shall be increased by three percent (3%) of lbe Anslual BllSe Rental in etrect immediately prior to sueh mcrense. SectiOtl 5.04. All Ren~a1 shall be paid 10 Lundlerd by Tennnt when due, witbout deduction or offset, in lawful o,oney of the United Stole" at Landlord's Add,,"s for Nolices as specified in Anicle 28, er sucb other place as Landlord roay from Ume 10 lime designate. The leml "Rental" a. used berein me:ms the U,en-applitobl. Annual Base Renlal, Percentage Rental, ,nd aU other sum! payablt by Tenant under Ibis lesse. Tenant sh.lI PIlY to Lsndlord, as a "late , chnrge," five percent (5%) of urJ payment herein requited to be made by Tennnt wl,ich is more than ten (10) days lale., Section 5 05, It is agreed by Landlord and Tenant dial no Rental for the 1l0e, eccupancy or utilization of the P=ises shall be, or is, based in whole or part on the net income or profits derived by any person from the boilding or ille Premises, and ilie Tenant further sgrees that it willllOt ""1eT into any sublease, license, conce;sion or other agreement fat any use, occupancy or utilization of lhe Premises which provides ror . rental or other payment far such use, oCCllj>aney or \llilization based in whole or in part cn the net income or profits derived by my person from Ibe Premises so 1elllled, "sed, occupied or utilized. NoUling 10 U1e foregoing sentence, however, shall be conslrued, as permitting or coaslitutlng I..ondlo,"!\'s npplovsl of any ,ublea.., license, coru:eosion, or nther use, occupancy, or utilization agreement not otherwise .pproved by Landlord in accordance with'the provjsioM of Article I B hereof. ' AATICLE 6 REAL ESTATE TAXES Tenant sholl be respoIlSlble for U,e timely payment of real eslale t=. Taxes shall b. escrowed end payable in monUlly mstallments. Taxes shall be procrated at the lerminalion of !.ease. . I..oudlard agrees ">at wilb respeat to nssessments and specie! asseosment:, Landlord will elect to pay Ule ",S=mOIl! over the longest pewlssible period lUlU only those installments appli""ble to lbe term of lhe Leose, along with intcres~ if charged, sball be the responsibility of '!ellOSl\. ARTICLB 7 IntentionaUy Deleted. --"'...- 4 i^\J(j,:71 G~~7'0 'OJJ '0 . >OJ" ARTICLE g OPERATING EXP~SES Tenant will DC responsible for all costs and exp""s.. rel.led to the P=ises Il!\d its opcration, including but net limited to stnictural ond oU,er capital improveID<mts, repairs. ""d replaCem~111~ utilitieS;. major:or mInor repairs mld majnt~onnQe., replatemen1. of equipmel\t and fixture" inSurunce <md bending, equipmellt leases, hlbor and related costs, etc. Tenant "grees to .meet with Landlord at least quarterly to review operating sIJlli,tics, membership activity, linancifol results and a list of major repairs, improvements and equipment e:xpenditures made during the qunrter. . ARTICLE 9 USE OF PREMISES AND OPERATION OF TENANT'S BUSrNESS Section 901. Tenant sMn use "ud occupy tlle Premises solely for the purpose of opsrating a Health lIOd Racquetb.ll Club and uses incidental Ultreto, such as \he sale of cloUting, vitamins!Uld refreshments ""d for no othor purpose notincidental Ulereto. &ection ~.Q). Throughout thc term of tlus Lease, Tsn,nt covenants and agrees to: (i) keep the !'remises in a neat and clean condition; (ii) pay berore deliuquency any.od all taxes, except for ret1l eslale tiIltes, which are the responsibility of UIC Landlord, "'scssmenls and public oharges levied, assessed eT imposed upon Tenant's business or upon Tenant's fixtures. furnishings or equipment ill the Premises; (Hi) pry when and os due all licem;e feos, pennit rees and all regi'lration, bonding, lieensing or other charges of a similar nalure for the conduct by Tenant'of any business er undertaking auUlOrit.ed hereunder 10 be conducted in lne Premises; (i'V) not permit vermin or other pests to breed.arponnit the occutllUlation (unless in cOnoealod watClpIOof containers) or burning ofany robbish or garbage in, on or about lbe Prerni5e, crany olhsrpart of the building; (v) not use any spaoe outside U,e P=ises fOT di,plsy, sale or any other simililr IlrIQertaldng; (vi) not use ""y .dvertising meQium inside the Premises which may be beo:d outside Ihe Premi,es; (vii) not use lhe plumbing facilitie, fur any pIl.lpose. other thml that for which tMy were eenstructed; or dispose of .ny foreign oubstanoes therein; (viii) not pennit any obnmdous or objectionable odors to emanate from the Premiseo; and (Ix) not install any . additional awnings or oanopies on the e>tterior of the Premises WithtlUt the prior written consent of Landlord. Tenant shall remove all tIssh and gm-bage from the Premises and =il" and P'Y for its dispo,al. . Reotion 9.03 The Premises shall opetllte continnously befare and .lIer the Leaoe Commencement Pale. Tenant shan prooeed with due dispatch llI\d Qiligencs to remcin open fat business on Ibe Premises and Tenant ,hall thcreaf\et continuou,ly, sclively and diligently operate its busines, in a eommercially pnldent and reasonable manner. ARTICLE 10 tAWS, ORDINANCES, AND REQUJREMENTS OF PUllUC AUffiORlTIES TemUll shall, at its sole ""pens", (i) eomply with 'II laws, onlers, ordinllnces, ,nd regnlations of federal, slate, counly, municipal and other ,uthorities having jurisdiction over Ihe Premises, (ii) oomply with ;my ~irection made plllSuanl to law by any public officers roquiring llbatement of any nuisance, or whioh impos.. upon LllIldlord or Tenant any duty or obligotion arising from Tensnes occupanoy or use of the Premises or from conditions whieh have been ere.led by or et Ibe in,istence of Tenant, and (iii) indel\lnify Landlord and hold Landlord hnmtlcss from any loss, eo,t, cl.im, or c:xpen,e which Landlord may incur or ,.ffer by re,",on of Ten~t'. fanure to comply wilh its obligations under claus.. (I) Dr (ii) above. UTenant r"".ives notlce of any stich direction or of violation of any such law~ order. ordinance) or regulatiQ~ it shaU promptly ootify Landlord \heTcof. _t......- 5 IMJ>b:71 GM7'Q 'Q:]J " ~ , f'I 'A11 AnyalteGl(iai. I addi,ioll' (0 Ule Premi... reqaired.hy law or b..,naIlce to comply wifu -, . the cunent u.e OfUle Premises shaU be suhject to U\e cost 8haring ptovisions conllllncd in Article 12. ARTICLE 11 CONSENT Landlotd and Tenanl agree that consolt lIS required in this agreement shall not be .unreaSonl1b\y withheld or delayed. ARTICLE 12 ALTERATIONS AND MAJOR REPAIRS Seclion 11,Q1. Tenant =y not, at any time during the Term, without Landlord's prior written consen~ whicb consent will not be unreasonably withheld, make any alterations or major rep.irs to Ule Premises, For pUlpOS" hereof, an alteration or major repair is defined as any ch.nge or r"Pair in excess of 15,000 el\ch. Should Tellllnt desire any alteraUons or major repairs, Tenant agrees to submit all pllll1S and specifications for sme to Landlord for L~ndlord's written approval before beginning Buch work. Upon Ten.anrB receipt of Landlord's written approval and for any alteration Or major repair in ,,",cess of $5,000, upon Tenan~s payment to Landlord of tIle charge of one (10/0) of .ny project of 1>25,000 or more, the costs of performing sneh work, which shall be in cOllSideration for tbe work of Landlord and its employees and represClltatives in reviewing and approving such plans md specificauons, Tenant may proceed to tbe consttuClion Q[the approved nlterations, but ol1ly so !\lIlg C8 tbey are in substanliol complianre with the plans and specifications and w,ilh the provisions or this Article 12. All a1temtions shall be mllde at Tenllllt's expen.'le. eUher hy Tennn(s cQl1trnelor. whicll hsve been approved by Laodlord, or, at Tenant's option, hy 1.andlord's-conlr1ll:1or On terms reasonllbly satisfactory \0 Ten.nl All suon construction, all=tiOll!, and maintenance war'" done by, or for, Tcnlll1t shall (a) b. perfonned in such a mOMer as. to maintain hannowou, l.bor rel.tions, (b) not alter the exterior appearance of the building, (c) not aJfect the structnre or safety of the building, (d) eomply wilh all building, weLy, fire, plUl11bing, electrical, and other codes and governmental and insurance "'quilomOnlS, (e) be completed promptly lI!>d In a good Illld workmanlike manner, IIIld (I) be perfumed ;n compliance wifu Arlie!e 13 hereof. Scolion 1202. Except C8 provided for below in Section ii, Tenant shall be responsihle for (s) an improvements to the Prel1\i.ea, including but not limited to replaeing, recarpeling, painting surfu:es, demising walls and any additions other than those r"'luired py Jawor ordinance and (b) all maiDtenanoe oftbe Premises inoluding hut not limited to equipment, furniture, computen;, lllld Building syslem Componenlll. (ii) Tennnl and Landlord agree to shore the cost of repairing or replacing Building System CompoD<:nls in the following manner. Building System Components are defi!\Od as av AC, plumbing. electrical, roofing, parking lot and .tructurnt lighling hems. Any e:l(penditures fotrepaiclng Dr replacing Building System Compouenl Rep.irs over $5,000 nlust be approved berorehand in writing by Landlord and Tenan~ Any Building System Component Repair ovcr $10,000 wlll be managed by L:mdlDrd lUld subject to a 5% nwI<..up payable to Lnndlord for project management services. MY Bingle project repair thnt will exlend beyond ene eolendar year will be omalgsmated and treated as if it had occurred in s single year. Tenant's responsibility for the cost of Building System Component repa;" nnd rcplaoemeDIs is as follows: . A. Tenant will pay ilie first $25,000 ofsucb cost plus tbe "Formula AmQUnt," as hereinnIler defined, in anyone calendar year. Landlord shall p.y the r"",aining omaunt of auch repair Or replacernenl B. . The I'onnula Amount shall be an amoun\ "'lua! to (ll) $17,000 mulLlplied by (b) thellumber aryears of the Le..e Term preceding !he then-current y=, up to. maximum 9K<o>'I4_.~.. 6 IMJCb:71 G~~7 'Q '0" ( ^ I f\ 'f\~\ ...... of three years; howe, a no event 'ilatl tbeamount [or any calend", yo... .e less lhan uro (D), minus (c) the totalllDlount expOllded during U,ose years by Tenant for Building By.tern . Component rep.irs and replacements: C. Ten,.,I's share of the Cost ofllolldiog System Coll1pooent repairs and maintenance shall be reduced during Ule InSt five (5) y..... oftlle Lease Term to the following percentages of what ,ueh amDuot wou1d.othetw'se be: . . Le.ASe Year 11 12 13 14 15 Petcent.ee 90% 75% 65% 60% 50% Sample Calculation.: Lease Yen.r I 2 3 4 5 6 Cost lncmred $50,000 o $10,000 S10,000 $90,000 S25,OOO Tenant's Ten.nt Cost C:hare of Cost Corrv-Porwatd $25,000 0 o $17,000 S10,OOO $17,000+7,000.. $24-,000 $10,000 $17,000+7,000+7,000"$31,000 $56,000.-"......,..... 0 $25,000 0 Section 12.03_ Allallt:ralions, major;repaim, improvements, Olld otherphysieal addifions made or illstolled by or for, Tenmll in at to the Premi$es sball bo and remain Landlord's properly, except Tenant's furniture, fnrnishings, equipment, personlll property, and movable trade fixtures, and sball not be removed without Landlord's wrlllen consent. Tenant ~grees to remove, at Tenanr. expense. all of its flltuiture, furnishing', equipment, pomonal property, 1l!ld movable lrnde fixtures by the Lease E1<piration Date, nnd sl1all promptly reimburse 1.andlord for the eost ofrepairing all damage dOllet., lhe Premise, or the building by ,nch IeffiOVal. Landlord sball not be respon,ible for any loss .,f or damage tn Tellllnt's furniture or furnlshings remaining in Ure' Premises after the Lease EJOpiration Dale or in the event that Ten:m.t vaoates ale Premises prior to tho Lease EXpiration Dale. . Section 12.0,\. Ullder no circumstances whatsoever will Tenant, Ten'llt'. authorized representative or agent, over alter (lr modify in any manner disturb any syOlem or ins!n1l.tion of the building, including, but nOI limited to, plumbing system, eleotric.l system, heating, ventilat- Ing, and air conditioning system, fire protection mid fire alert systems, building maintell!nce systams, and structural systems, unless under Landlord's express written pennission IllId uDder direct supervision ofLlllIdlord or Landlord's outllorized representative. ARTICLE 13 LIENS Tenant shall keep the Premi,es free from any lien, ari.ing from any work performed, l!1llterial, furnished, or obligations in=ed by or at the request of Tenant. All persons either conmoting with Tenont or furnishing or rendering labor and materials to Tenant shall be notified in wriling by Tenant Umt Uley must look only 10 Tenant for pll}'lOent for such labor or materials, Nothing cortlain.d in this Lease shall be conslOled as LAndlord's consent to my Colltraclor, subcontractor, laborer, or malerialman for the perfonnanoe of ouy Jabor or the furnishing of:JllY materials for my speeifio improvemen~ fLItemtio~ Or -re.pair of, or \0. the Premise-st nor as givi.n~ TerumlllllY right to COn!nlct for, or pennit the performance o~ any services or the furnishing at $o_~,"...d1lC i ""l J_' 7 I r^ ^7'''' .t'1" I '1:' ~ any m..teri.~ Ulot we . result In MY liens against U,e Prenlises. If any. .",n is filed against the Premises or Tenan~s leasehold intere~t therein whicl\ ari,es out of any putported act or agreement of Tenant, Ten.nt sh.U discl\arge tho lien by paying the 3m"""t claimed to be due, by obtaining Ule discharge by dopo.i! wllh a court '" a tille company, or by bonding within Ihirty (30) days allet its /iling. IfTel1.l1t fails to take such action wililin such period, then, in addition to any other right Or remedy of Landlord, Landlord m.y, at its electioll, discharge the lien by paying iIle arnountclaimed to be due, by obtaining flIe discharge by deposit witn a coUT!. or a tiUe compnny, or by bonding. Terumt shan pay on demand at'y .mount paid by Landl"rd for Ihe ,discharge or satisfaction of IlllY such lien, and all r..son~le attorneys' fees and other costs and expenses o[Laodlord incurred in defendlng any SUC\l action or In Obtaining tlle discharge o[such lien, togethorwltil all n",essary disbursements in connection \herewith. ARTICLE 14 REPAIRS Section \4.01 Tenant shall keep the Premises and every part thereof in good condition and repair, at all times during tile TBll'n and ot Tennnt's sole cost ltnd ""pense. At Ute end o[the Temt, Tenant shnll surrender to Landlord lhe Premises DUd aU alterations, additions, and improvements tilerele in the same condition as when received. subject (0 the provisions ot Article 20 hereof. If Tenant fails to make such repairs promptly, Landlord, at its option, may ltIako such repaili, and Tenant shall pay Landlord On demond Landlnrd's actual costs in making such repairs plus a fee of ten peroent (10%) to cover Landlord's overhead. Laudlord has no obligation and has made no promi,.. to alter, remodel, il"Uprove, repair, rodecorae, or pllint tl10 Premises or any part thereof. No representations respecting the condition of Ill. Premises have b= made by Landlord to Tenllnl except as specifically herein set forth. ARTICLE 15 INSURANCE Hection 1501. During Ute term, Landlord, at Tenant's sole expense, shall obtain and keep In torce the ~ollowing in:mnmee: (a) Special Properly Form upon property o[ every deseripti"" and kind Owned by TellW\t nud Landlord and located in the Building or for which' Tenant is legally liable or i""lall.d by or "n behalf of Tenant inciuding, without limitation, furnilllre, .tittings, iostaHati"n..' ll1ttl.lres and any other pers011aI property, leos.hold improvemeals and aItern\iODS, in an ..nount equal to the l.il.Il replacement costs theren! All such ilIsuranc. policieuhall name Tenznt and' Lanolord as named insureds thereunder and sbJill name Land.lord's mortgagees and any ground Or primary Ies""" ..loss payees thereunder, an os their Iespeotive lnteresm may appear. (b) COllllllercial Comprehensive generalliabillly insurance coverage including personal injury. bodily ifli\lI1, brond fonn property damage, operationnl hazard, owner's protective covernse, contracmalliabilily, fire legal liability, nnd prod~ and completed operations liability, in limits not less !hart $1,000,000 inclusive. All such insurance policies ,hall name Tenant and Landlord .. named insureds thereunder and shall name Landlord's mortgagees (and, if tequested by Landlord, grouod or ptilllJl.ry I...ors) as additional insureds thereunder, all as !heir respectlve inte~ts may appear. . (c) Worker's Compensation and En,player's Liability insurance, with.limils of at Ie..! $100,000 - $500,000 -..\>100,000 llIld in form salistnclo<y to Landlord. (d) MY otiler form or fom1S ofinsumnce ss Tenant, Landlord, or Landlord'. mortgagees Or grouud or primary le..o" m;l.y rellllonably require from time to time in form, in amount, and for insurance risks against which a prudent tenDUt of" compnrable size and in a comparable busin.... would protect itself; (e) Tenanl sbull hove in place an umbrella liability polic.y in limit. noli... -".......... B \,,]~~:7\ (M7 'Q '0]] I ^ I r'1 '{\~I . . Ulan $$,000,000 with, dlom namod.. an additional insured party. "" ,_ ' All policies s(\all be i....ued by insure... 'with an A.M. Be't raling of A or better and in form,aU,faolory from time to time to TeDanL LondJonl will deliver certiftoatcs of insurance on astarulord fOml .. soon as pr'clic.ble enor the pl.oing ofthe required insurance. Teollllt shall reimburn. Lllndlord from time to time for the cost of the insurance described abovewiUlin \eo (10) dll.ysafter written request therefor. ' - ' . !f Tenant obt.ins a propoS11l for the insurance required by this Artiole 15 at a lower cost from an ill$urance company with at lenst UIO samo A.M. Best ....ling ss Ulal of the insurance compsny cbosen by thc Landlord, Lilndlord may, at L'l\dlord's diseretion, (I) accept the lower oost as the full rcimburlleme"t required under lhis Artiole IS, or (2) ellow Teuant to obtain S\1tb oovernge <lirectty. Section 1502. Dunng the lerm, Lllndlord shall, at Tenant', expense. insure the Building (excluding any property whioh Tenant is oh1igated to \Illlure under gection 15.01 hereof) against damage with All.l'Jsk insuranoc and public liability insurance, .11 in such amounts and with suc:lt deduclions "" Landlord considers .pproptiate. Landlord may, but ,hall not bc obligated to obtain and carry any other form or fouo. of insurance as it Of Landlord's mortgagees may reasonably detenuiIle advisable. Section 1503 Tenant will not keep, me, sell, or offer for sale in, Or upon, the Premises any article which may be prohibited by an insurance polioy periodically in foroc covering the BmIWn~ ' Seelion 15 04. If any of Landlor(]'s insulllllce polioie, ,hnll be canceled or cancellation shall be threatened or the covemge thereunder reduced or thm.tenet! to be reduoed in any way beenu.. oflile uso otthe Prom;.es or any part thercofby lenan! or any a,signee or subtenant of Tenant or by anyone Tenant permits on Ule Premises nnd, itTcnant fails to remedy the condition giving rise to such canoellation, liuealeMd cancellation. reduction of coverage Or thxealened reduction of coveroge with 48 hours after notice thereof. Lllndlord may. at ita option, either temlinate !his Lcase 01: enter upon the Premises 1lO<l altempt to remedy suell condition, llDd Tenllnt sh.ll promptly pay Ibe eo.t thereof to Landlord as additional Rental. Landlord shall not belhble for any damage or injury oaused 10 -any property otTenan~ or of oU,.ts located on the Premises resulting from such ~nlty. If Landlord is unable, or elects not, to remedy' sucb condition, then Landlord shall h.ve all of the realedi"" provided for in this Lease in the event of a default by Tellll!\t. Notwitbstnnding -the foregoing provisions of Ihis Section 15,04. i[Tenant faila 10 re,medy as ..ror;saiil. lenant shall be In default of its obligation hereunder end Landlord .shall have no obligation to remedy such default, Section 15 05. All policies covering reol Qr personal property which Landlord obtains affecting lbe Premises .hall include a clause or endorsement denying the insurer any rigbts of Sllbrognlion again't Ule oU,er party to UlC extent rights have been waived by the insured befOre Ibe oceurreoce of injury or loss. Landlord.nd TeMllt waive any rights of ,ubIPsation or recovery" against tho other for damage or loss 10 Lheir respectivo property due to hlrZllrds covered Or which should be covered by policies of ins\lrlUlce obtained or whic:lt should be or have been obtained p=t to Ul;S Lease, to ilie e~tent of the injury or 10$$ eovere<l ot which ,hould have been covered thereby, osSllming that any deduotible shall be deemed to be insurance cover'llo. lIR'I1CLE 10 DAMAGE BY FIRE OR OTHER CASUALTY Secl;o" 1601. lenant ood Landlor<l shall immedialely notify tbe other party of any damage to the Premises, In ilie event fuallhe Premises or ooy portioh thereof, is demaged by ~ny casualty not required to be insured .gains! by Landlord under Section 15.02, lll1d U,e cost to repair the dornage exceeds $50,000, Landlord shall have Ihe right to lermiha\e this Lease by c:o.....~.._ 9 1I.Il.l.,+.' 7 I r^^7 ,() '(11 I ~. millen nouce to Tei. ~iven wilhin sixty (60) days after lhe d~te 01 ...ch damage, provided. ' howevet. that thOse provisions of Ibis Le..ewhich are designated i<> cover matters of tennination and the period thereafter sht1l\ survive the lennina.tion hereof. Subject to Section, 16.02, 16.Q3; and 16.04 hereot. if !he Premises is damaged sO '" to affect the Premi,es ,by fir. or otiler c..ualty ngains! which Landlo<d is required to be iMUred under Section 15.02, Tenlnlt shll!! immediately no!ify Lmd!Qrd, who ,hall, only if Ule proeeetls from Landlord', inlurance availeble 10 Landlord and free from collection by Landlord', mortgogee or any gtoun>l or priniary losoor are sufficien~ have dIe damage repaired with reosonoble speed at tlle expense of Landlord, subject to dela~ . which may .ri,e by reason of adjustnlent of loss under insurance policies and to other delays beyond Landlord', reasonable conlrol. Au abatemenl in the Rent~l hereunder shall be allow"" as to \lml portion of tl,e Premises rendeted untenantable by such d'mage until such time lIS L.ndlonJ delermines lhot such damaged portion of U,e Premi,es has been made tenantable. If Lnndlord has not restored the Premises wilhitl one huodred eighly (180) daYI lIlIer the date of such danmgo, Tetlllllt shall bave the right at its option to terminate d,is lease hy sending written notice of such election to bndlot1l wiU,m Ihitiy (30) days alter the expiration oflhe one hundred eighty (180) day period. Section 1602. If aU or any portion of lhe Premises is d"",aged or destroyed by any c'SlImly against which Landlord is required 10 be insured u\\der Stction 15.02, and i~ in Landloed's reason.ble opinion, the Premises cannol be rebuilt or made fit for Tenant's purposes wilhin one hundred eighty(l &0) days of tne damage or destrUction, or if !he proceeds from insuttluce reOlllining aner payment of any such proceeds to Landlord's mortgagee or any ground or primary lessor are insufficient to repair or restore lhe d""'ose or destnlcUol\, Landlord may, at its option, lermin.le lh\s Lease by giving Tenan~ wilhin sixty (60) days alter such damage or destruction, notice of \e!m1nation, and thereupon Rental ~nd any otber payments for which Termnt m liable under Ibm Lease shall be apportioned aud paid to the date of such damage, and TenSllt shall immediately vacate U,e Premises, ptrlvided, however. that Utose provisions of this Le..e which are designated to cover malters of termination and the period lheceafter shaU survive d,e termination hereof. Section 1603. Ilthe Premises or any portion !hereoCis damaged or destroyed by any cause whatsoever, 10 tlIe extent that (al in Landlott!'s tellSonable judgment, it ,",ould not be economically fensible tG repair or res lore sucll daIDllge 01' dsstr1lCtion, or (b) in Landlord's reasonable jud1!D'cut, the damage or deslnlction 10 lbe 1'r.m\!:e. cannot be repaired or re,tored within One handred eighty (180) days nller such d=!ie or desiruction, Lnndloro may, at its option, leuninate this Lease by giving Tenant, within sixty (60) days ailer snch damage or destruction. notice of ,uch terminntion requiring Tenant 10 vaeate the Pramises sixty (60) days aner delivery of the notice of tcmtinotion, nnd !hereupon Relltaland any other payments shall be apportioned and paid to Ihe date on which possession is relinquished and Tenant BhaU Immediately vacate tha Premises according 10 such notice of termination,. providcd, however, Ullltlhose prov\!:ions of this L...lSe which are design.ted to cover matters of tennin,lion and the period therealler shall survive Ule termination hereof. Scclion 16.04. If lhe Premi,es, or ony subSlantial portion of it, \!: .ubsllUltiaily destroyed by lire or nther c.use at any'lirne during tilO last two (2) y= of the Term, Landlord may termin.te this Lease upon wolten nolioe 1.0 Tenant given wiUlin sixly (60) day. aner tile date of such destruelioll, provided, however, Ih~t thoffi' provisionS of this Lease which are d..ign~~ed to cover matletS or termination and the period tilerenfter shall survive tile termination hereof. Notwill1,tandlng the forogning, if Tenant exe,,;\!:.. its Option to Exteud as deseribed ill Article 32 hereof, Landlord will re,tore the premises in allCordll1lCt wiU, Altiele 16.02 and 16.03. SectiO\\ t 605. No da,.,ages, compensation, Or claim ahall b. payable by Landlord for inconvenience, lo.s of bu.iness, or annOYllllee wing f,om MY rcpair or restoration of any portion of tile 1'remi.es. Landlord shall use its best ~orls to have .uch repairs made promptly '0 os not to unncccss.,.i1y interfere with Tenanr. oocnpaney. .~",lion \6.06. TIle provisio.. of thi, Article shall be CO<1Jlidered an "'pres. agreement _...100......... 10 1~IJ(.+,:71 ('ilil7 '0 'OJJ ,. governinpnyenseo! . .nage or destruction ofth. Prem;ses by fire or ot,'"fcasually.. ARTICLE 17 CONDEMNATION Section 17 OL tn the .vent the Whole orsubstaollally the whole of the Premises are laken. Or condemned for Ill\Y puhlic purpose, tius Lease and Ihe leasehold estate crr.ated hereby shall . CellSS and lemlinsle as of the dllle of 81lch laking, provided, however, that those provisions of this LeBse which are designated to cover malters ortenninatioll aDd the period thereafter shall survive the termination hereof, S~ction 17 02. In the event that any portion of the Premises .hell be tak"" Or condemned for any public pUlJlOSe, ond ll.'l a result of such laking the Premises cannot be restored in an e'onotllically feasible manner so os 10 no! interfere \ViUl Ten\\llt's llSO or operation of the Premise" then Landlord shall have the option to te.nninnle tills Lease, effective.. of the dat. specified by Landlord in il.s notice of termination, provided, however, !hat thost provisions of thi. tease which ere designated to cover matters of termination and llle period thereafter shan survive the termln.tion hereof: In the event ten percr:nt (10%) or more of the P=iscs is taken or condemned for "1Y public purpose and the balance of \he Premises is in Tenant's or Landlord', good fDiUljudgment, unusable fur \he conduct of its bugines,,- Tooont or Landlord shall have !he right .t its option to terminate this Lease by sending written notice of such election to Landlord within thirty (30) days of such taking. Section 17.03. In the event that. portion, butles. than substantially the whole, of the Premises should be taken 0< condemned for llIlY public purpose, then thi, Lease shan be t&minoted :u; of the daLe of such taking OS to the portion of ale Premises so mken, and, unless Landlord or Temmt exercises its option 10 tenninale this Lea:se pursuant to Section 17.02 ahov., Ibis Lease shsll remain in full rDIce and effect as to th. remainder of the PTemis.... 111 such event, the Annual Bose Rental will be diminished by on lIJlIounl representing lhe part of such amounts properly applicable to the portion of the Premises so taken. Soclion 17.04: In theevent o{llie tenninatiOIt of Ibis Lense pursuant to the provisions of Sections 17.01, 11.02., or n.03, this LeBSe and the Tenn and dIe estale hereby granted shall expire as oflbe date' or such temililotion in the same manner ond with the same effect as ifUt,t were the date set for th.' normal ""pir.tion of Ihe T elm of this Lease, lltld the Rental shall be apportioeed.. o{such date. TIle provisiotlS ofthi. Se1>lion 17,04 sballapply in the ,ame manner to any portial tecrnination of Ibis Leue pUrBUllIlt La the provisiollll of this Article. Section 1105. Except as otherwise provided in Section 11.06 'below, Lwdlord shall be entitled to receive tlle entire award in arry condemnation proceeding ot action for taking. wilhaut deduction therefrom for any eslate veSted in Tenant hy Ibis Lease; provided that DOlmng herein conlained .hall prohibit Tenant from seeking severance damages or moving expense. So long 113 'ueh awards do not in any mllnner reduce dIe awan;! payable to LllIldloru. Sf'Ction 17.06. lf llle Tempor;llj' u.e or occup.ney ofoll or any part oflbe Pre!l\i,eashall be Condemned or lnken for any public or qoasi'pubJic woe during the Term, Ibis Lease shnll bo and ~lnain unaffected by such condemn.lion or laking and Tenant ,ball eontiuue to pay in full the Rental payable hmunder for any period during sach lemporary use or occupancy duting the Term. 10 lbe event of OIly such condemnation or taking, Tenant shall be entitled to appear, claim, prove and receive the portion of lhe award for such ll1ldng that represents compensation for use or occupancy of the Premises during the Toml, and Landlord sllaU b. entlUed tu appear, claim. prove Md receive the portions of the award that represent Lbe cost ofrestoraliou ofthe Premises and lhe u.e Or oCCllp.ncy of a,e Premise. after the end of the Term. Any award to which Tenant Is ennUed under this Section 17,06 .hall b. deposited in ""erow with a bank or o!her in.tirotion __J.oo.......~ 11 IhlJ (.+,: 7\ (,11117 '0 'a~ J ,,,,1'\ '(\\1 ~. approved by Landlnr _d Tel~.nl and hdd as security [or Ihe p",fotm.. ; of aU obligalions of Tenant hereunder. Suoh deposit-sball be inVtstetl in- an intlorest-1>earing .ccoun~ nloney market fund or other liq\\id investment approved by Landlord and Tenant and ;my interest nr eamings thereon shall be paid to Tenant so long lIS Tenant is not in default under tilis Lease. Snell escrow fund sh.1l be disbursed to Tenant in equ.1 monUlly instalbnentS over tbe pt'(iod of months during the Tenn which has been taken by thtl condemning autliority, provided that Ten.nt is_ ~ot in default.t the time of BXry such monthly disbunornenL ARTICLE 18 ASSIGNMENT AND SUBLETlTNG Section 1801. Tenant n"y not sell, assign, !ransfer, or hyPothecate this Lease or any inlerest bsrei\l (either vnluntr.rily or by. operation ofl.w, iru:luding, ifTenant is a corporation, lhe ..Ie or transfer of. eontrolling interest in Tenant) or sublet the Premises or any part thereof willlOU! Ille prior wntlOll consent of Landlord, which conscnt sball not be unreasonably withheld or delayed, .xceplllS hercinaller provided. Tenant may assign or transfer this LOllSe or sublet the Prom,s.. b;> cntilies owned or ""ntrolled by TeI,"n!. IfTenan! should desire 10 assign this Lease or S\lbletthe Premises (or nny part U,.reo!) and provided that Ten1llll is not dlen in default bereunder, Tenant shall give Landlord a copy of the proposed assignment or sublease, together with written nOlice, at least sixty (60) days itl advance or Ille date 00 which Tenant desires Ie make sucll ..signmeo~ or Sllblense. Landlord sholl then have a period of thirty (30) days following r<<;eipt of such notice witllin which 10 notify Tenant in writing lh.t Landlord elt<:ts eiUler (:1) 10 1000ninote !his Lease as to the space so affected as ofthe date specified by Tenollt in its notice, in whicb event Tenant, subject to the provisions of Articles 19 and:W and suolt other provisions of Ibis Lease which expressly survive tile tennwtlon hereof, shall hav.e the right for thirty" (30) days to WiUldraW its request for Landlord's consent to assignment or sublet, or shall be ,elieved of all further obligations heteundcr as to such apace; (b) ta pemit Tenant to assign or sublet such space, subjec~ however, 10 the subsequent mittell approvsl of the proposed assignee or yubtenaul by Landlord, provided, however, that if the proposed as.ignmClll or suble... is for mOle thM five thousand (5,000) useoh1e square feel if llie rental rale ns,eed llpOn between Tenant and ilS proposed subtermnt under any proposed sublease of the Premises (or any parr thereof) i. greater than tbe reutal [lite \loyablc by Tenant 10 Landlord herellllde\' for thai portiOll of \he Promise. that is subject to such proposed sublease, or if any consideration shall be received by Tenant in connecd~n with such proposed assignment or suble... (in addition 10 rental as provided in such proposed sublease), then such excess rontli! or sucb consideration, as the cnse may be (or bolh), after deducling Tenant's documetlted coats ofimprovcments,-broket1lgo costs 'nd other re.sollllble costs related to such assignmenl or subletting, shall be considered additional R.ental owed by Tellant to Landlord. and sh.1I b. paid by Tcmmt to Landlord, in \he cas. of excess rentals, in tile same manner U,nl Tenant pays Annual Base Rental and, in Ille case of the IIIIY other consideration, i1l\l\"lediately upon leceipt the=f by Tenan~ or (c) to refuse, in Landlord's sol. and absolute discretion, to consent to Tenanrs sssignm.nt or subletting of such space:md 10 continue this Leose ill full forte and effect as lO the entire Premises. -If Landlord sbould fail to notify Tenont in writing of such electioll within such thirty- (30-) day period, Landlord shall be deemed to have elected option (c) abov._ No assignment, transfer, or sublelling by Ten.nt shull relieve Tenant of Tenanl's obligations under this LeMe. Any attempted IISsignment nr subletling by Tenant in violation of the term. aud provisions of this Section 18.01 shall be void. In the event LandlQrd consents to an assignment or suble.se pursuant to tilis Seclion 18.01, TenllIlt shall provide Lan<ltord with au executed eopy of such IlSsignment or $Ublease with three (3) d.ys after its execution. Tenant shall reimbuo;e Landlord for the payment of Landlmd'. rwonable attorney's ree i~curred in coIlllecuon willt the review of these documents. ;;~liOl; 1 g,02. Landlord may aell, tmnsfer, assign, and convey. alt or eny pm of the Premis.. and any and all o[ its ,ights under tlli. Lease, and in tile event Landlord assigns its rights under this Lease, Landlord shnll be released from any fumer obligation. bereunder, eIl~ TenlUlt agrees to look solely to Londlord'. successor in interest for performance of such co..~ 1.0......"" 12 III I ('I.l..' 7 I r ^ (\7 '/"l 'r1i I obUS.lions, , . ARTICLE 19 INDEMNIFICATION Tenant waives all claims against Londlotd for damage to any property' or. injury to, or d..tll of, any person in, upon or about the Premises arising at any time and from any cause otber . than solely by reason of the gross negligence or willful misconduct of La.dlord, ils agents or employees, and Tenant sball indenmiJY Landlord and shall hold LllI1dlotd harmless from any damage to any properly or inju')" 10, or de,UI of, any person arising from the use oflbe Premises by TellCn! or its agents, employees, representatives, contractors, or invitee., except such as is caused .olely by the gm.. negligence or willful misconduct of Londlord, it/; agents or employees. Without limiting the generality of the foregoing, Landlord sh.llllDt be liable for any injury Or dmage to persons or property res\llting from fire, explosion, flllling plal;te:r, steam, gos, electricity, water, rain, flood, snow, or leaks from any part of the Premises or from the pipes, appliances, equipmen~ plumbing works, roof, or subsurface of any floor or ceiling, or from the street or any other place, or by dampness or by any other cause whatsoever. Landlord shall not be liable for any ..,ch damage caused by other tenants or persons in or ahout the Premises or by occupants of adjucent property thereto, or by the public, or caused by any priva!e, pUblic, or quasi-public con'ttuclion or oU,er work, including, but not limited to, any construction, modification, or operation of underground, ground-level, or above-ground pedestriall tunnels, briJges, w.lkways, or similar ilems. Tenont's foregoing indemnity obligation sball include reasoMble aUomuya' fees, investigation costs, BIld all otbe.: reasonable tosts and <::xpenses incurred by landlord from the first notice thai rmy claim or demand has been made or may be made. The provioiore oflbis Article 19 s!laIl't1Ivive the termination of this Lease willi respect to my damage, injury, 0,,- death occutting before stICh tern1inatiOll. IfLandiord ia made a party to any litigalion commenced by Or again.t Tenant or relating to this Lease or to tbe Premises, and provilleJ that in any such litigation Landlord ia nOloo.lly adjudicate<! to be at raul~ U,en Tenant shall pay all costs lUld expenses, ineluding attorneys' fees lUld court cosls, incurred by or imposed upon LllIldlotd bec.use of any ,uch litigation, anU the amount of all such cosm and ""pens.., lttcluding altOrneys' fees and court tOSl$, shell be a demand obligation owing by Tenant to Landlord. . ARTICLE 20 S uromroER OF THE P:RElvllSES Upon ~le expiration of the Term or other 1ermino.lion of this Lease ror auy cause wh.tsoever, Te=t s!:lall peacefully vacate the Premises in as good order and condition as the Sanle were at the begiruting of lhe Term OT may thereafler have been improved by Landlord or Tenant, reasonablo use Md wesr the.:eof and damage to the Premises the alteratiollS or Landlord's equipment by fire or othe.: casualty or condemnation only excepted. Should Tenant continuo to hold lhe Premises a!tor U,e termination of Ulis Lease, whether \he tennination occurs by lapse or lime or oUlerwisc, such holding over, unless otherwise agreed to be Landlord in writin8, ,hall constitute and be tonstrued as a tenancy at will al a daily Rental equal to mOth of an mnount eqUlll to two (2) times lhe monthly Rental charged .t the time of expiration or terminallon and subject to all of the other lerms set forth herein except allY right to renew this Lease, but the foregoing shall not coJlStit~te a con'ent by Landlord to s~ch holding over ,nd shall not prevent Landlord from exercising any of its remedies under this Lease or appli"hle law by reason of such 1l0lJing over. TenllIlt shaH be liable to Laodlord for aU damnge which Lsndlord surrers because of MY holding ova; by Tenant, and Tenant ,hall Indemnify Landlord against all claimg made by DOY oUter tenant or prospective tenant against Landlord resulting from delay by r..al1dlord in deliveringpossossion oflhe hernisos to such other tenant or prospeotIve tenant, ARTICLE 21 ESTOPPEL CERTlFlCATES ~..t-......., 13 I>lJO":71 r.~~7 '0 'OJJ (When request! -, ) Landlord, any gro\1!ld or primllI}/lessor, or ill. Jlder of any deed of trust or mortgage coveting the Premises, or any interest of Landlord therein), Teoant agrees to furnish periodically, wiU,;n ten (10) days of receipt of written req'lllSt therefor. . certificate signed by Tenant certifying (10 U,e e<tent s.me i. tnIe) that ti,i. Le.se is in full fon:;e ""d effect and unmodified; that the Tenn hilS commenced and the fu 11 Rental is (hen accroing hereunder; that Tenant,!lOs ~cceplcd possession of \he Premises ~nd that any improvemenlS required by the terms of this Lease to be tn.tie by Landlord have been cornplele<llo the satisfactioll of Tenont; that no Rental under this Lelllle has been paid more than thirty (}O) days in advance oUts due date; th.tlhe address for nol;ces lo be sentle Tenant is as sel forth in this tease (or hll1l been changed by notice duly given nnd is as set forth in tile certificate); that Ten.n\, as of the <i~te of such cerlific~le, hIlS no charge, lien, or cloim of olrset under this Lellse or otherwise .goinst Rental. or other charges due or 10 become due hereunder; that Landlord is not U\eJ\ in default ul\der this Lease; ADd such other matters as may be requested by Landlord, any such ground or primary lessor, Or the holder of any such deed of trust or mongage. If Tenant is unable to so certiFy as to one or more of tile foregoing ilems, Ten."t shall specifY il3 reason therefor ill writing. Any such certificate may be ",lied upon by tmy prospective purchaser, ground or primary lessor, mortgagee, or any beneficiary under any ~ of tl1.lst on the building or the Lond or .ny pan thereof. If Tenant fails to timely deliver sUell stalemellt, Tenant shall be deemad to have acknowledged \hat this LellSe is in full force and effect, wilhout m<Xlilication except ns may be represented by Landlord and [bllt there are no unoured defaults in L>ndlord', perfuInlll1lce. Landlord agrees periodically to l\lrniBh, when re....on.bly requested in writing by Tenant, oertiljcates signed by Londlord eonWning subslantially tbe sam,e infonnauon as descn'bed above. ARTIC:r..E 22 SUBORDINATION Seclion 22 01. This Leose is subject and subordinate to any first deeds of INst, first mortgages, or oilier fiISt seourity instruments which may :trom time to time during tlle Teem cover tl,e Premises, or IlI1Y interest of Landlord Iherein. anti to any advonces made on the iecurity thC1:cot; and to any refinancings, inerease.. renlm'.l., modilic.tiom, consolidalions, replaoements, and ""tensions of any of such first deeds of lrIl't, mortgages, or security iostrumenls. 'This provision is declstetl by Londlotd and Tenant 10 be self-operotive and no further instrumenl sball be required to .ffect such sUbortiination of Ibis Lease. Upon demand, however, Tenollt shall execute, ackoowledge, and deliver ~o ~andlord any further instruments and <erti fiCalel1 'evidencing such SUbordination .s Landlord, or the holder of lIIlY Iirat deed of \roit or first mortgage covering the building, the Land, or any il;t.etest of Landlord therein. may reasonahly require, and Tenant hereby irrevocably appoints Landlord as r en.nrs .gent ,00 attorney-in-fact for the plltpose of executing, acknOWledging, lllld delivering any sncb instruments and cCltificates. Section 22 02. Notwitllsl>ndlng Ihe generality of U,e foregoing provisions of Seclion 22.01 hereof, any &1lch first mortgagee ihall have Ule right, unilaterally, .t any time to , subotdinale fully or partially any such first deeds of trust, mortgages, or othor securilY instruments to Ulls Le3Se on :mch lenns and subject to such conditions as suoh first mortgagee nlRY consider appropriale in its discrelio.. Upon request Tenllllt shall execute an ;,lSlrument confirming any such full or partial subordination by a1\Y lirst mortgagee. At any time, belore or allerlhe institution of any prooeedinJlS for tile forecl05ure of any such dwls of INs!, olortgnge., or other seourity inst(\llnent.. or sal e of the Premises \Il"1der .ny such firsl deed of trust, t\1ortgago, or other security illStruments, or upon the tennination of any ground lease, Tenant shall attorn to such purchaser upon arry iUcb. sBle or tile grantee under !U\y deed in lieu at such foreclosure or to MY ground lessor in the evellt of a termination of a ground lease, snd ih.ll recognize such purchaser, grantee or ground lessor, as the case m.y be, as Lalldlord. under this Lease. Tenant hereby waives the right, if any, to eleot to tennlnole this LeMe or .to surrender possession of the Premises ill Ille event of tlle jUdicia! Or non.,judicial foreclo.ure of "'y first deed of trust, mortgage. or security agreement (onny Iransfer ill lieu thereof) or termilllltion of a ground 1..... The foregoing agreemen!. of Tenant to altom shall survive any such foreclosure 51lle, trustee's sale, or con'Yeyance in lieu tl1ercof, ot termination or a ground leMe. Tenant shaH upon demand _........Ilot<. 14 !AI I ().l-,' 7 I r fL(\ 7 '('1 '(111 , ~ , " ,^ >I at any time] before or ~ any s\\ch foreclosure. sale, trustee's sale, or con.\ .nee in lieu thereuf2 or lenninntion of. ground Jease, exeoute, ackilowledge, "1ll1 deliver to LOlldlord's roongage. or any successor thertOr or nny ~lenowner of uie Premises or to the ground I.'sor (OIl the caSe may be), any wrilten instruments \llld certificates evidencing such at!omment as LandlorU's mortgagee or ~round less<>r (os tbe cose may be) m.y reasonably, requke, and Tenl1l1t hol'eby irrevocably .ppoints Landlord's mortgngee or ground lessor (as ute eaSe may be) as Teitan~s agent and attorney-in-f.ct for Ibe purposc. of ""..,uting, acknOWledging, and delivering any such instruments and certificates. .. . . Seclion n,D3. Sbould any ground lease be terminated, or any filSt deed of trus~ 'mortgage, or security inslrument be foreclosed. the liability of the gli>und I",sor, mortgagee, trustee, or putcllaser, as the eose may be, lIS "Lllndlord" hereunder, shall ""is! only so long as such person or entity is tlie owner of Ule Premises,.""d such liability shan not ~ODtinue or survive aUe< further tr,msfer of ownership. Further, Ten.ot agrees that any iuch ground leSllOr, mortgagee, trustee, or purchaser shon not be liable fur (i) any Rent'l pold mOre than thitly (~O) doys in sdvence o[ its due dale; (ii) any amendment or modilie.lion of U,is Lease witbou! the prior written approval o[such ground les.or, mortgagee, lnl.tee, or purchaser; or (Hi) any default by or any claim against any prior landlord. Section 22 04. Landlord shall use cnmmercially rellsolUlhle efforts 10 obtain a so-called non-disturbllllce,agreement fron, its cucrent lender. Landlord shall Use commmcially reason.ble efforts !o obtnin a !lo-called lton-disturoance agt<:emen! ftom any future lender in [onn and substance reasonably aeeeptJ\ble \0 Tenant ARTICLE 23 PEP AULT AND RElI1EDlES Section 23 01. The occurrence of anyone or tnote of the following eVents shall ""DstiMe an event of default utlliet this ulISe: (a) if 'tenant sluill faillo pay any Rental or other sums PllYable by Tenant hereWlder as and wbett such Rental or otber sums become due and pllyBble and such f.illlIe~halJ continue for more than fiverS) ljays after it is due and payable; (b) if Tenant shall foil to perform or observe any other coveoant Or obligation h.reWlder and such lllilu~ shall continue fOr more tlJllIltell (10) days allor notice thereof from Landlord, or, if such fallure CEUll\OI be eorrected within such ten- (10-) day period, if Tenant does not coltlmence to correct s.me wilbin said ten- (10-) day period and thereaner diligently prosecllle the cOlTeetion o[same to complelion; (c) if Team! deserts or vacales ooy sabstlll1lial portion of the Premises; (d) if ""y petition is filed by or agllinst Teoont or any guarantor of1'enant'. obligations under this Lease under !l1lY section or chapter of the present or any future Federul Bankruptcy Code or under any similar law or SlatUle of lbe United St.tes or any state tbereof, (e) if Tenant or any guarantor of Tenant's obligations under this Lease becomes insolvent or makes a transfer in fmud of eredilon; (ll ifT<manl or any guarantor of this Lease rook"" en assignment for the benefit of creditors; or (g) if a receiv",", custodian, or trustee is appoint.dIor Tensnt or fur any of the assets of TellJ!DI which appointment is not vacated within sixty (60) days of the date of such appointment. Section 23 O~. If an event of default OCCllfS then at any time therealler while Tenant remains in default, Landlord may do any onc or marc of the following without any notle. Or demand: (a) Terminale this Lease, in which eveat Tenant slizll immediately surrender lhe Premises to Landlord, II Tenant fails to do so, Landiord may, without notice and without prejudice 10 any allier remedy Landlord may have, enter upon <rod take possession of the Premises and expel or remove Tenant ."d its elfecta WiUloul being lioble to proseeatioo or !illY e!aim for damages therefor; and Tenant shall indemnifY Landlord for an 105. and. damage which Landlord may sutTer by reason of sueb termination, whether through inability to relet the Premise, or otberwise, including any loss of Rent>.! for the remainder cftlle Term. 0.". "-....~" 15 Iii 1 I'\'" 7 I rrof17 '1'1 'Cll I ( ^ I r'i '(\~l , ()l) 'l,".nin~te this Le<lSe. in which e.ent Ten'n~s evem .of default should \le eon,idered a 101,1 breacll ofTeoont's obligations under this LClIse. alld Tenallt immediately shall become liable tor such damages for such br.each, in on amount equat to the total of (I) the costs of recovering the Premises; (2) U,e unpaid. Rental =ed. M.of the dsle of termination, pillS. illleresllhereon at a rate per annum from the due date equ~l to five percent (5%) 0'''' the Prime Rate, provided, hDwever, that such interest shall n= e,<<:eed the B.ig11est Lawful Rale; (3) Ihe amount of Ihe e>:ces.< of (i) the total Renlol and other benefits which Llllldlon! would have received under thi& Lellile for the remaincler of the Teun, at U,e rates !hen ill effee~ togelh..- with .all ether expenses incurred by Landlord in connection willi Tenant's default, over (il) \he Fair Market Value Rale (defined below) of the balance of the Term as of U,e time of such breach, discouuted at the 1'llte of four percent (4%) per "mum to the then-present value;'and (4) all other sunts of money end damages owing by Tenant to Landlord. For P\UjlOses of this Section 23.02(b), !he term "Fair Market Value Rate" moans the !\lir nwket value rent.1 rate for D comparable lease teon commencing alacomparable titne for comp,rable lenants l.aGing spaoe of comparnble size and equivalent quality and iocated within lWt"llty (20) mile rndius of the Premises. (e) Enter upon aod take possession of the Premi,es as Ten.nes agent without terminuting lI,i. Lease and wilbout being noble to prosecution or any claim ror damages therefor, and Landlord may re\etUte Premises .. Ten.nr. agent and receive the Rental Umefor, in which ..cnt Tenant ,hall pay t<> Landlord on demunu ony and all cost, of releasing, renovating, repairing, and altering the Premises (including, but not limited to advertising costs, commissions, finders fee. lllIu other similar costs) for a new tenMt or tenOl\lS >nil MY deUeiency that may arise by reason of such relelling, pnwided, however, that L'llldlord shall have no dllty to relet the P=is.. and Landlord'. r.,1ure 10 relet the Premises shall not release or affect Tenant's liability for Rental or for ~ages. . (d) Do whatever Tenant is obligated to dQ under Qli~ Lease and may enter the Premises without being liable to prosecution or a!t/ claim for damages U,erefor, 10 accomplish this pucpose. Tensnt shall reimburse L,"dlord ilJllnediately upon demand for IlnY expe..es which Landlord incurs in lhus e!reeling compliance with this Lease on Tenan~s beh.l~ Bncl Landlord shall not be liable for any ~ag.s auffered by Tenant from such ""tion, whelher co\!Sed hy Ihenegligeo.ce ofLomUon! oroU,erwise. SOOliOll 7.103. No llCt or ihiog done by Lnndlord or its agenlli during. the Term shall ~onsUtute OIl .eceptance of an attempted surrender of the Premis.., and no agreeltlenl to accopt a sutrendcr ef the Premises shall be vlllid unless made in writing and signed by Landlord. No re-entry or taking possession .of the Premises by Landlord shan constitute an election by Londlord In teoninate Ihis Leaso, unless a written notice of such intention is. given to TenanL NotwithstlUlding ony sucb reletling or re-enlIy or taking poesession, Landlord may at any fune thetea!\er terminale this Lease for a pmiou. demulL Landlord's aoceptance of Rental following an event of default hereunder shall not be cDnalrued .~ a w:rlver of such event of def.ult. No waiver by LOlldlord of allY br=h of \:his Lease sh.1I constitute a waiver ahny olher violation or breach of any of the leuns bereof. Forhealllllce by Landlord to enforce one er more of the remedies herein provided upon a breach hereof shall not constitute a Wtliver ofany otber breach of Ute lease. Section 23.04. No provision of this Lease shall be deemed to I10ve been waived by LlUldlord unless such waiver is in writing and signed by Landlord. Nor shull any custom or pmclice which may evolve between U,e parties in !he adminislraUOl\ of the terms ofU,i, Lease be conslrued to waive er lessen Landlo,d's right to insist upon .irlot perfoIIllsnce of the tenns of this Lease, The riglJts granted to Landlord in this Lease shan be oumulative of f:oJery oU,er rigbt or romedy wbicb L.lIdlord moy oU1erwj~e have at iaw or in equity orby statute, .nd the exercise of one or mote rights or 'emedies shan not prejudice or impair the concu<<ent or subsequent excroise of other rights or rerneclies. 1IO"_J,o....."" 16 IMJI\,,)I G~~) '0 '01~ /^If\ '(HI ~ . ....'" "". ARTICLE 24 WATVERBYTENANr To the ex~ent permil1ed by applicable law, Tenant waives for itself...d all <*.iming by, lhrouBh. and under it, including credilors of all kinds: (a) any right and privilege which ,it or my of them may have U1lder auy present or future cOll$tilulion, st.lulli, or rule of laW to redeem the l.'ren,ises or to hove a continu""ce otthis Lem;e for the Term aner termination ofTenanrs right . of occupancy by order or judgment of any court or by any legnl process or wril, under the tenus of this Lease, or aIler the termill:ltion of !he Term ns herein provided; (1)) the benefits of any pt..ent or future constilution, ,(atule, ot rule of law which exempts property from liability for debt or for disire.s far To:nt; and IIi the provisions oflaw relating to nOlice andlor delay in levy of eXeClluon in case of eviction of a tenant fornonpayment of renl ARTICLR 25 SECURl1'Y DEPOSlT The Security Deposit (herein so called) shall be equal lo oue months tent, eleven thou,"ud dol\ars ($11.000.00). ARTICLE 26 ATTORNEYS' FEES AND LEGAL EXPENSES In any action or prooeeding brought by either l'arty against the o\her under Ulis Lease, the pW'ailing party shall be entitlecl to recover from ~he oUler party attorney" fees, investigation costs, and other legal expenses and court CQsts incuned by such party in such. aotion or proceeding. ARTlCL1l27 NOTICES N:JY notice Or document required 10 be delivered hereundcr shllll be considered delivered, whether nclulllly received or no~ oevCllty-two (72) hours after deposited in !he United Stales mail, poslagc prepaid, regilltelCd 'or certifiecl mail, return receipt requested, .ddre,sed 10 lhe parties hereto at the respective addreo.es below, or at such u!her address as they have subsequently specified by written notice. Landlord: . renllIU: Cocoa Enterprises, !n.. C/O Select Capital Corp. P.O. Box 2034 4718 Old Gettysburg Road Mechanicsburg, P A 17055 Atln: Michoel B. Salemo Stephen J. Smith, CF.O The Fitnw: Company Ownership Group 70 Wood A.venue South Iselin, NJ 08830 Additional copies .ent to: Gen>.ld P. LaUy, Esq. Giordano, Halleran & Ciesla P.O. Box 190 125 HalfMi1e Road Middletown, NJ 07748 ARTICLE 28 MlSCEl.LANEOUS un. Lo~.....w:. l1 1l,1JD1-,'71 r.flf11 'D 'all, I ^ I r'1 '(\M , ~ ...< ,'~ Section ?8 01 \ Ilere this Lease reqlllres Tenant to payor lQ rein."ollSe directly Landlord [or any item, such payment Or reimbtmemeIlt will be the cusloml!r}' charge therefor periodically established by Landlord (Which charge may include, at the discretion of Landlord, a retsonoble allocation of Landlord's overh...d, administrative, and related cosls and a reasonable fee '\0 Landlord associated with the service in question). Failure 10 p~y any .ueh chargo shall be consiOered as a foilureto pay Rental, and. as a result, Landlord sholl be entitled to ,all applicable rights .nd remedie,. ' Section 28.02. Teaant represents and wammts that it II.. not <mtered inlo any ngreement with, MT o\herwise had any dealings with. any broker or agent in connection with tile negotialion or execution of tIIis Lease which could fot1tt the basis or any claim by any sueh broker or agent for a brokerage fe. or commission, finder'. fee, or any atller compensalion otany kind or nature in connection herewith, ond Tenont shall indemnify and bold Landlord h=le.. from any costs (inclUding, but not limited to, court costs, inve'tigation CO'ls, and nUomeys' rees), cxpenses, or liahili!y for cammi..!o,", or other comp.nsadon eleimed by any broker or agent with re<pcct to Ihi, Lease Which arne out of !mY agreement or dealings, or alleged agreement or dealings, between Tenant and any soch agent or beoker. Section 78.03. As used herein, "bosiness dnys" means Monday lhroogh Sunday (except hn!iday')~ "nonn.! bosine.. hours" means 6:00 a.m. to 10:00 p.m, on business days; and "holidays" mean. those holidays desigllJlted by Tenanl. Section 28,04, Every agreement contained in lhis Lease is, and shall be construed as, a separate and independent agreemenL If anY tetlll of this Lease or !he application thereof to any p.raon or cirCUII1l<tances shall be invalid and unenforceable, the =inder of this Lease, or the applioalion of such tenn to persons or cireumstallces oLher than those as to which it is invalid or u,enforceable, shall not be affOOled. Section 2805. Th.rec shall be no merger of ali. Loo.e oc of (he lellSehold ..tate hereby crealed with lhe fee estJIte in the Premi,es or any part thereof by reason of the fact Ulllt the same pcr50n tnay acquire or l'old, directly or indireclly. tl).i. Lme or Ihe leasehold estate berehy creeled or any interest in this !..ells. or in soch leasehold estOle ~~ well as !he fee eslste in the Premises or ~y interest in such fee estate. In th. ~ent of ~ volunll!r)' or other s\mend.r of this t...o, or a mot\\al cancellation hereof, Landlord mAY, at ils option. termlJlllle aU subl.ases, or !reat such .urrender or ClIncellation M an assignment of such subleases. Section 2806. Asly and all covenanls. undertakings and agreements herein made on \he parl of Landlord ore made I\Ild inlended not as personal covenants, undertakings and agreements or foe the purpose of binding Landlord per'onally Or the assets of Landlord except Landlord's inlete,t in tll. Premises, but are made and intended for Il,. purposes of binding only the Landlonl's interest from lime to lime in the Premises. No personal lishility or personal responsibility is assumed by, nor shall at any time be asserted or enforceable again,~ Landlord or its agoot nr agents, beneficiaries, partners, or their rtSpective heir,. legsl representatives, succ....ors, and assigns on account of this LellS. Or on accouut at any C\lVenan~ undertaking, Or agreement of Landlord cooWned in Utis Lease, all such liability being 'pccillc~lly weh,ed by TenanL TIlls ctause shall not limit or deny any ramedies which TenMt may have in the event of d.fault by Landlord hereunder which do not involve the personallinbllily of Landlord. Section 28.0"(. Whenever. period of tinle i. herein prescrib.d for action 10 be tak.n by L~nd\ord, Landlord shall not b. lia1>le or responsible lor, and there, shall be excluded from the computation fonny suctl period of time ~ny d.lay' due lo s\.tlJcd, riols, acts of God, .hortages of labor or materials, war, governmental law" re~uls.tions, or restrictio"" or any o !her cau'e of any kind wbatsbeverwhich i, beyond U,e t"""onoble conllol of Landlord. Section 2& OS. The .micle headings contained in this Lease are for convenience only and shaH nol enlarge or limit lhe scop.e or m.eaning or the various :::md s.everal articles herwt Words of any g<;Ll<1ec u,ed in Ulis Lease shall be held to inelude Ihe plural, U1\less the COnle>:1 otherwise ~.u........... l8 '" ,I'\.l.. ,7 I r f\ ^.,. 'r. ,,,., 1 . ~ '" ';; ",',. req~tires~ Seetion 28 09. If there is more than one Ten",,!, the obIigatiQ!Ul hereunder imposed upon Tenant shall he joint and several, and an agreements ond covenants herein conWned shall be binding upon the respec!ive hei.., pmQnal repre.,onlatives, suc.....ors, awl, to the ext~t permitted under this Leose, assigns oHhe parties hereto. . ~ecliQn 28 10_ Neither Landlord nor Landlord's agents or brokers have madc any .represeotallons Or promises Wilh respect to the Premises IttceptllS herein expressly set forth and all reliance witlt respect to any represantations or promises is base<l solely on those conlllined hereln. NQ rights, easements, Qr licenses ore acquired by Tenant UMer this Lease by implication or oUletwi.e ""cept lIS expressly set forth in tillS Leas.. Scction 2811. This Lease sets forth the entire agreement between the parties and caru:ek all prior uegotialions, ormngements, brocbures, .gree>nenl$, and understandings, if any, between unction:! and Tenant regarding Ibe subjecl msUer of this Lease. No amendment or modification of Utis Lease shall be binding or ..lid unlOlls expressed in a writing el<ecMed by both parti.. hereto. Section 28 1~. The submission OfUlis Lease to Tenant .hall not be conslmed as I!!\ ofrer, nor shall Tenant have any righls with tespeet \hereto unless Landlord ex""n!.. . copy of this Lease and delivers the s>rlle to Tenant. Section 28.13. Tenant signs as a cOIJloralion, and conseqnently, SlIl;h of lbe peliOllS executing Utis Lease on behalf ofTenant tepresenlS llIld wammls Blat Tenant is a duly organized and exi.ting corpOIauon, U\at Tenltnt hns been and is qualified to do business in the State of Pennsylvonln, that Ihe corporation has full right and authority to OlIter into Illis Lease, and that all persons signing on behalf of tile corporation ww> 8Ilthorl2ed 10 do so by appropriate corporale actions. SooHoo 28.14. If; in cOMcolion with obtaining !inancing for Ule Premiaes (inctudiIlg S)'lldic.tiolIs or salelleasehacks), ltny lender or ground l..."r shall request re<!Sonable modilications to !his Lease as a condition for suoh financing, TCIl~nt will Dot unreasonably wiLhhold, delay, or defer its consent-thereto, provided that such modifieaUons do not in=e Ibe obligations o!Tenant hn<eunder ormalerially advel$ely affect either the leasehold interllSt hereby creal.ed or Tenant'. use and enjoyment of the !'rami.os. Section 7815. This Leas. sball be governed by andCO!lstrlled under the laws o(the Stale ofPtnnsylvania. Any action broughlto enforce or interpret this Lease shall be brought in Ut. court of appropriate jurisdiction in Cumberland Connty. Should any provir,ion of this Le.se require judicial intcIJlretation, it is agreed !hat the court inlcIJlreting or considering same shall nol apply lhe presumption Utat the ICtllls hereof .ball be more strictly construed againsl a party by reason of the rule or cOllolusion !hat a document should be conSlnled more strictly against the party who itself or through il$ ngent prepared lhe same, it being agreed that all parties hereto hove participated in lhe preparation of this Lease and tllatlegal cOllnsel was consulted by each patly hereto beforelh. execution olllli. Lesse. Seclion 2&,16. intentiQDally Omitted. Section 28 17. Any elimitUluoo or shutting off of lIgbt, air, or view by arrj structure which may be erected ou lands adjacent to Ute Premises shall in 00 way affect thi. Lease or impose nny liability on Landlo11l, Sectinn 28.18. The exJ\ibits referred to in the Table of ConteJlts are by this reference incorporated fully herein. The term .Ulis L...e" shall be considered to i""lude all SllCh exhibit<. section 28 19. Lo.ndlord and Tenant waive lOa! by Jury in any acLion or proecediog brougltt by either Qfthe parties hereto against the Qlller or Oll any counterclaim iu respect lh...eof "'-...,..-~ lS 1,IJPt:71 ,GG7'P 'Q<< "'7 'J ,n I Q '(\~ . '- ,,~ '., On .oy mailers whau... .or adsing OUI of, or in .ny way COIlllecletl ....ith this Le.... the relationship of Lmldlotd and Tenaot, Tenan~s use 01' occupancy of the !'remises, .ndlor any claim or injury or damage \lnder tl,is Lcase. Secti'lll18 20. A. maximum weight of one hundred (100) pounds per squme fOOl i. building load capacity lll\d Tenaot is responsible for compliance. ARTICLE 19 TERMlNATION O:PTION Landlord reserves Ule righllo terminate !his Lease if Tenanl fails to maintain the club within guideline, Il!ld standards sel by the (lHRSA) 1nlem'lional Health and Racquet Spot!> A.lsociation or ony suecessorbody. ARTICLE 30 surotEl<IDRR AT END OF TERM: W AlVER Tenant shall immedi.lely surrender possession of \he Leased Premises at t\,e expiration of the Primary T= or ofDny Renewal Term hereof or upon ils priortennination. rerumt shllll ,eturn !he Leased Premises cleun and !'ree of debris, Me in good oroer and Condition, reasonable Wear and te., and damage by fire or oU,er h=d not occuning tlrrough ll/lywiUful at illegal act or omission ofTenan~ its employees, agents or invitees, alone ,",cepted. In addition, Tenant shall deliver to Landlord Or its Mll!laging Agent, if above uamed,.11 keys, plastic cards or otller entry devices for the Leased Premises. the Building and its appurtenances. Tenant waives all right to Il!lY nolice which lllll.Y be required III!der nn.y Illws !lOW or btreafter enacted and in force in Pennsylvania, inoluding the w,llord and TenMt Act of 1951, Act of April 6, 1951, lIS amended. Tenant agrees to give up quiet and peaceable possession of the Lessed.l'remises at lbe end Of the primary t.nn Of of any renewal term. without further notice from Landlord, ARTICLE 31 omON TO l'URCHASE . At U,e expimtion of this Lense, provided Tenam is not io deflWlt under any of the terms and conditions of Ihls lease, T=l~ may, at its oplion purclUlSe U,e intSIlgi.ble asset. of landlord for a lump aum. payment of she hundred lhousand dollaIs ($000,000). The intangibles shall inolude memhCl;Ship lists, trade names, processcs and loil".. 11 shall not include any part of the l'romises, improvements, or equipme>lt owned by landlord. Tenent shall provide Landlord written notification to exercise this option at lea.t one year prior to the ""p,,,tion of the Lease. ARTICLE 32 NON - COMPETITION Tenant agrees tho! for a period of one (I) yw period following the expiration or l.nnination of this Lease, Tenant Or irs ..mJjates, assignees or 1<11'1 entity in which it owns S% or more will not own, opmte orll'anage a fncllity that is competitive with tlle Club within a three (3) mile radius of Ule Premise.. ARTICLE 33 MEMBER.SHJPS Landlo,d .l,aU for lhe [erm o[the l_e be entiUed to 10 fumily VlP 'noznbemhips .t no c!mrge. -',""~.... 20 lilll C. +,' 7 1 fAf17 ,() '!1ll F^ ," '^\\ ~. .... ..... ARTICLE 34 CONFESSlON OF JUDGMENT If al\y'b$se fent and/or any additional rent is not paid when due and payable llereunder and sholl remain unpaid for a period of ten (10) days alter written notice ofLandlord'. intention to file a confession ofjudgrn,ent thereofhus been given to Tenant by Landlord, '!en.ot hereby empowers any prothonotary or a!lomey of my court ofrecordlo appear fof. Tenant in any and all . aclions which may be brought for rent and/or to sign Ior Tenant an agreement for entering in any eGmpetent court an amicable acU01\ or actions for tile recovery of rent or other charges or expenso.s, and ill said suits or in said amicable actions or actiolls to confess judgment against Tenant for all or any partofth. rent speciiied in tMs Lease and thell unpaid ineluding, at Landlord's option, the rent for the entire unexpired balance of the term oflhis lease andior charges, p,,-y.nents, eosts and expenses agreed to bc paid by lhc Tenanl and far interest mld costs togelher with re",anable altomoys' fees. Such authority shall not be exhll11Sted by one exercise thereof, but judgment may becontessed ns aforesaid from time to time lIS often as any of said renl sball fall due Or be in ane.",. and such powelS may be exercised as well aIler the ""pir.tion of Ule anginal tenn and/or during any extellsion or renewal of this leas.. Ten""t further, at the optionofLOlldlord, lUlthorizes and empowers any such a!lomey, either in addilion to or without such judgment for tbe \lIDount dlle according to Ule teons oflhis Lease. to appear for Lessee and confess judgment forthwith against Tenan~ and in fuvor of Landlord, in an amicahle action otejeclmet1t for the "remises above described, with all condition, fet.$, releases. waivers o[stay or execution and waiver of ""em pLio" to a<:compMY sai~ confession oCjudgment in ejectment as are set forth herein for confession of judgment for said Slllll Or SUulS due; and anthor~ the entry oI such action, romession of judgment therein, and imtnediate issuing ofa writ of possession, wilhout leave of court, and l.essor :may without notice re-enter and expel Lessee frolll tile PremIses, and also MY person holding under him or them, and in each case, this l.ease or a Ime c.opy thereof shall be a snfficicnt Wilmllll. of MY person. Sucll authority sballllot be exhausLed by one exeroue thereof; but judgment alay be eomessed '" aforesaid Irom time to time lIS o!lon as any of said rent shall faU due or be in arrears, and such powers may be exeroised as welJ ailer Ute expiration of llIe original term andlor during any extension orrenewal ofthis I.ense. Tenant oekIlowledgllS !hat it bas read and understood the provisIons of thi. section, i.\duding tile Confession of Judgment Provisions. Tenant further acknowledges and agrees dUtt 0) it is familiar willi Confession o[Judgments, (ill it h.. eonsulted, or had an oppoltunity to consul!, counsel ofits choice for. further expl.""tion or, !lDd advice coucerning, the Confession Of Judgment Provision.. (iU) 'tenant understands \hat.ihe Confession of Judgment \'rovisio"", if aod when ertforeed by Lessor, may result in a court judgment against Tenant and the seizure and loss ofTenanl'. property, inclnding Tenant'. u\terest in this Lense >lid other asset. or property. WiUluut a prior hearing or notice, and (Iv) Tenant kIlowingly, intentionally, VOluntarily and freely waives any right to notice or opportunity for a he.ring berore l.andlord exercises any powelS under the Confession of Judgment Provisions, including entering a courijudgmtIlt against L..see and execuling lUId seizing Mse\s or property ofLessee (inCluding, hut not limited to, the premises) pOliuant to any confe"edjudgmelll. C.C............d" 21 III I {l..' 7 I r f\ 1\7 'f\ 'n, I I ^ I f'\ '/"\<( , _ _,1 EXECUTED u. , .eal as oOhe date rlISt wotlen above. 'l'ENA.N1: Tf.. [, ~.<"., (,;"'P"^ Y CWn.,J'f' &~ Witness: By: !J~.JJ+- By: ~b~ -~~ 2\~k",:t. ~rf\\'lil (print) Name: It:;: CEo (Corporate Soal) LANDI om Wi tness: (6"- 0<-. en. ~'f"'''''_ ];.,c. 'r. ~f 1b- By: Kj)4 ()7:) Its: L/:' r' &<"j/p" 'f- _~..f"" 22 IMJhb:71 Ghh7'0 'OJ~ , f\ I r- 'f\ ~I ., J '\-~' Exhibit A Legal Description 'of tile Properly Coeo~ C()Urt. Club All that eertain lot or piece ofland .huute in Derry Township" Dauphin County, Commonwealth orPe_ylven;., identified IlS Lol No.3 on SUbdivision Plan titlcd "Cocoa .Avenue Commercial T",c~. prepared by John C. Brilhmt Surveying .nd Mapping Services, of Mechanicsburg, Penn!ylvilllia, and beoring soul ofChades W_ Junkins, Registered Surveyor No. i 1804.E, and dated April 14, 197&, revised October 16, 1978, and ret:orded in the Recordcr's Ollicein OIIld for Dauphin County aforesaid 111 Plan Book B. Volume3,P.g~ 141lr\d 15, bOUMed lllJd described in accordance with ,aid Plan aa follows: Beginnlng at a point on the Easterly right-of-way line of Cocoa Avenue (pennsylvania Legislative Route No. 22007, PennsylV2nia Traffic Route No. 743), whIch point is fiVe hundl:ed My-nine and ninety-seven hundredths (549.97) feet Northwardly from the Northerly right-ot- way line oIFi<hbum RoaD (also Peonsylvl\!li. Legislative Route No. 22007, Pennsylvania Traffic Route No. 743), said begi[ll1ing point being also the NorlhwCSl.erly cOrner of Lot No.2 on nforesaid Suhdivision; llience extending along the Easterly righl-or.way line of Coco. Avenue, North five (5) deerees, zero (00) minute. Eas~ rOt a distance oftlu:e. hundred (300.00) feet 10 a eom:rele monument; Ihenee extending along remaining lands o[Milton Hershey School, in and through a twenty-five (25) feel wide utility easement llIld crossing a twenty-live (25) feet wide droinage ....ement, South eighty-five (85) degrees, zero (00) minutes Hast, for a distllIlce 01 two hundred fifty (250.00) feet to a concrete monument; thence ClI:teodingalong said remaining lands of Millo" Rerobey So.hoo1, SouU, ave (5) degrees, zero (00) minutes West, Iora distance oflhree hundred (300.00) reet to a point, the Norlheasterly comer of Lot NO.2; and thence extending along line of said Lot No. 2, crossing the afor..,ud drainsge easement ,rod a U,irty (30) feet wide utility easement, Nol'll, eighty-Jive (85) degr~, zero (00) minules WCJ'~ for a distance of two hundred Jil\y (250.00) feet to a point on Ute Ell3terly right-otway line of Coeoa Avenue (?eMS}'lvania Legis\alive Route No. 22007, Pennsylvania Tralli.c Root. 1'10.743), \he piace of beginning. Containing 1.722 acres. eeingpDIt OrU,esllmeprernises wbicb.Emmal. Hess, widow, by deed dated December : 31, 195J,recorded in the Recorder's Office in and for Dauphin County aforesaid in Deed Book R, Volu.me 35, Page 449, grfl/lted and conYe"jed to Flemhey Trust company, as TruslBe for Milton Hershey School, parly of the Jirst part hereto, its suneessotS and assigns. Subject, however, to easements visible orofreconl and.. show.n on theaforemennoned Subdivision. Tbe premises above described have been sold and are now beins: conveyed in fee simple, and this deed is executed and delivered with the approval of the Manag"l'O o(Milton Hershey School, free and discharged from oUtrus", Illld without obligatio" on am part ofU" porch'IseT or purcltasetS to look to the appllcotian oflhe purchase money, pursuant to a Rc,oloilon af\he Managet:l ofMUton Hershey School, duty adopted at a mec\iI\g held November 2&, 1983. It being in their judgment advisable and aDvantageous to seU the some, and by authority ofa Resolution of the Di~!or' of!iersbey Trust Compnny, Trustee, adtlpted at a meeting held Nov.mber 28, 1983, authorizing and directing the sale and conveyance of the premise, described, and the execution and delivery of !his deed. _""....w.. 23 I" ,/.l.. '71 rf\ 117 'f'I '(1"1 I " .. ~ ,.1- ExbibitJ3 Cocoa Court Club Cardiovascular Equipment \2 Bikes: \ 0 Lifolitness (4 tecumbent, 611J)right); 2lUndal Win'~ers '6 Tml-dmills: Life[i\neSS 6 Stahm..tm 4000 3 Stainn..ter Gauntlet I Versaclimber J Nordic T....1cs Free Weights 2SmiU1MachiDes \ SquatRaok I Power lUck 1 Leg Press J liack Squllt 2 Preacher Bench.s with 3 EZ Curl Bors I CalfR.;se Machine 1 Mllilllry Shoulder Press Bench I Cable Cro&ovtf Machin. with alr.cllmenlli 1 Decline Bench 1l:'ammoontT-B~Row I Incline Bench 2 La( Pulldown Machines with attachments 3 Flat B cnebes 4 Flat, 2 Incline, I Peetine Utility Benches 7 Olympic liars Weight Plates; (2) 1001bs; (26) 45 lb.; (18) 35 lb,; (18) 251bs; (2Q) 101 bs; (14) 5 Ib$; (7) 2.5 Ibs; (6) 1.251bs , Dumbbells: (2) 2.5 Ibs; (6) SIbs; (6) & IllS; (is) 10 lbs; (6) 121b&; (6) lSlbS; (4) 20Ths; (4) 25lb.. (4) 30-80 lbs; (2) 85Th.; (2) 90 lb.; (2) 100 Ibs Lifefitness Strength Equipment Horl:Wntal Leg Press Seated Leg Curl Rip Abduction SeatO<! Rowing Seated Chest Press Lateral PJU.e Tricep Machine Abdominal Machine Leg Extension Hip Adduction Lat Pull Down Rear DeItoidIPectDtal Fly Shoulder Pl;SS' ' Bicep Curl Low Back Dip/Chin Assillt Nautilis Strength Equipment 4 Way Neck Maohine Multi-Exercise (c.Jf.Raise) Conquest Total Hip Double Chest Rotnry Torso 1. Ab'I\'ainm t:M.."'...."- 24 f 1\ 1 () '(\~I lMJ fir.: 7 I (,"(\7 '0 'C] 'J J ',' ~ ,_'" :t" \exhibit C Guaranty WHEREAS, The Fitness Company Ownership Group. lnc" . Delaware CorporatiAn, desires to Cl1terinto the: Lease mentioned,below) as Tenant (th~ "Tennntl~; and WHER1!AE, the undersigned 111e Fitness Company Baldini' Group, 10c.;a Delaware . Corporation (hereinafier referred to il.! "Guarantor") has rcque'ilcd Coco. Enletprises, Inc. (Ule "Loodlord'."), to enter into a lease (U,e "Lease") with Tenanl, fnr c"1om '.pace in the Building knowll"" Cocoa Court Club, 1249. Cocoa "'venue, Hershey, P A 17033: and WHEREAs, Landlord has refused to cousentto lll1d enter into the Le.." unless Guarantor guamnlees the Lense in the manner slated beloW. NOW, THEREFORE, ill coosidetlltion of the direelaud material benelit. that wTIlacCl.'\le to GUllIantor, a1ld for the purpose of inducing Landlord to execute the Lease, GUarl!Iltor hereby agrees.. follaws, I. GUar;lntorllDCondilioDllUy and irrevocably guarantees the payment and perfonnance o~ mld agree to pay and perfOmt os primary obligor, aJlliabilities, obligationa ond duties (including but not limiled to payment of rent) imposed UpOll tbe 'IenantUllller the terms of the Lease. This is a continuing g\l1ltllIlty and shnll apply to any and all Leose amelldmenls. extensions 6lId modificalions V{hatsoever. GutlrantDr expIeSsly consents t<l any tlItension oftillle, lenieney, mOdification, waiver, forbearance, or any cllllI1ge which may be ""de in any tenn sod eortditlon or the Lea,e, tIld no IlUcb chllnge. modilication, extension, waiver, or furbeanmce .han release Guarantor from any liability or obligation hereby incotred or ....;umed. 2, Guarantor expressty waives notice of ~tlU1c. OfU,i. Guaranty., dentlllld, all oflSets and ooUlltet'Cloims, uoliee of dishonor, protest or netiee of protest of e:very kind, ..ch and every notioe to whioh Guatantor mny be enUtlod under dlO Lellse or o\hermse, :~otice of defaull in Or under ooy of the tanns of the Lease, notice and demand of any snd all p"",eedillgs in conneetion with the Lease (including denmnd for performance nfthe Lease), diligence in Collection any sums due under the Lease or enforcing &,y Dr Ule obligelions untler the Lease, bring of suit and diligenee in taking any aetion with tel'etence thereto or in handling or pursuing any ofLsndlord's rights under the lease. 3. GU9Illulor agree. that any and an judgments resulting from lbe liabilities, obligalions lUld duties (inclnding but not limited to payment of rent) imposed upon the T,:nan.l under lhe tenns of \he L= shall b. binding npon Guaral'ltor. 4, Witl,out untieeto or consent by Gunr.mtor, Landlord ond Tenant may at IlllY time, modify, exlend, amend or make other covenant. respeeling the !.ease as may be appropriate, ineluding s\lbltllSing and llSSigning the l.e<1se lolhird parties. GUlIDllllor shall not ba released but sholl eontinue t.o be rully liable ror payment and performance or allliabiJilies, obligatio"" and duties orTcnant under the le..e as ",edified, e~leodod or amended. Tlte obligations and duties ofTenal\!: und"" lhe L.... os modified, exlended or amended. ihe obIigalions ofllte Guarantor bereunder shall not he released by Landlord's receipt, application or rsJ"""e of security given ror Ule performance and observance of covenants and conditions in the Leue to be perl'olUlcd or ob,erved by Tenant. 5. Guarantor recognizes Ih.tlhe obligations under Uris GUdranly are absolute and unconditional, and that in the C\'ent of a derault by Tonanl otthe teons and. provisiom of U,e Lease and n1\er expmuon of any appticnble grace period in the Leose, Landlord ll1lcl its ""c.<:ssm. and 115.igns shall have the right 10 demlllld perfolIIUUlCe from and proceed against """..1......._ 25 IMJ(\(,:71 (.(\1\7 '0 'OJJ ,r 'I 0\ I 0 '(\~I , ." Gunmnlor or olherwu:l.. ...erci~e any avaiinble remedy at law or in equ,~ty 'I..... ~nrorce 'the provisions ofU"iis GUUrnllty without the nec~sily of first proceeding against or d~rne.nd}ng perronnanoc by Tenllnl of onvilh reopecl LO any obligation under tho Leos., il being expressly agree<l by Ih. Guarnntor that their liabilily under this Guaranty shall bo primaI)'. Landlord may rnaiMaln su","",sive actions for oU,er default' under Ihc Lease, Landlord'. rillhtihereundor shall not \>eelChausted by its eMrei.. ofany ofils rights onemedies or by any sucb action or by any number of successive acUons, until znd imlOlls all oblillatioD8 heteby ll\lll\"anteed have been paid and fully perf ann ed, 6, MY act of Landlord eonsiating ota waiver of ""y of the terms ,jr conditions of/he Lease, or Ihc giving of any consent to any maruler or thing related tot the LoMe, or fua granting of MY indulgences or ",tensions ofoln. to the Tenant, may be done without notice to Guarnntor and without releasing the obligations of Guarantornereonder, 7. In the event that any ",tion. is commenced by Landlord 10 enforce the proVisions of this Gtmr>nty, Landlord shall be entitled, iflt Shall ptevail in such aeticn or proceeding, to recover from Guarantor aU rel!SOtlable costs incurred in eonnection therewith, iilcludinllteasonable attomey's fees:. 8. Unm allth. covenanl! and cDndilinns in lhe Lease on the TeuaIlt's part to be performed and observed are fUlly performed and observed, Guarantor: (a) shan have no right of subrogaoon against the Tenant by reason of any payments Or ""Is of performance by the Guarnntor, in compliance wilh the oblill1lljDns oIlhe Guarantor hereunder; (\>) wmve anynght 10 enfOtce any-rernedy Ibat the QuaranlOtnow othereafter shall haY' againstlhe Tenant by reoson of anyone or more pa)'meuls or acts ofperfoll11ance in compliance with the Obligation s of the Guanmlor hereunder; and (c) 'nbordinale any liability or indebtedness of the Tenlll1t now or hereafter held by the Guarantor to the obligmlons 01 the Tenant to the Landlord under lbe, tease. 9. GU!lr1ll1tor ilckIlowledges that Cluarnulor are financially interested in Tenant. 10. GlWalllor'. liability shall not be affected by any indUlgence, colopromise or settlement . agreed upon by Tenant and Landlord, or any Lease termination to the ex.tent Tenant continues to be liable. 1 L The liability oHhe Guat1lnlor hereunder ,hall in no way be affected by, and Guamntor ""proaly waive eny defenses that may arise byr....on of (0) the release or discharge of the Tenant in any cre<lltors' receivership, bankruptcy Or other proceedings; (b) the impainnen~ IhnilRtion or modification of tile liability oftl,e Tenant or lbe estale of the Ten,"tin bankruptcy, 0' o[8Oy remedy for Ule enforcement ofTenant's liability \lndet the Le..e, resulullS from Ule operation ohny present or More provision of the NatiolIJll Banlctuptcy Act or otber statue or fonn the decision in 'Mly court; (c) the rej ..liou or di..lfllIUllIlc~ of th~ Lease in any such pr<loeedings; (d) the modification, assiglllllent or transfer ofilic Leas. by the Tenant (oj any disability or oilier defen.. oCthe Tenlllll; or _I.t......... 26 111</1,..71 rlli\"1.fI ,,..,.,, r!\ ," ,"'" '. ~ r 'I{".. rn the e<:ssalion frOM any ca..e whatsoever ofthe liability oHIl. TenlUlI 12... GIWllntor .grees that in Ihe event Tenant shaU becnme msolv"nt or sholl be adjlldlc.led . bankrupt, or shall me a petition for reorganiZlltion, ","",gement Or similar reliefuuder any present or future provisions of ihe Federal Bunkruptey Code, or any similar law.or statute oflhe United State. or any Stole thereof, Or ifsueh. petition filed by credito", ofTen..t ,hall be appf?ved by a Court, Or ;fTenant shall ,eel<. .judicial reaflju.tmcnt oflhe rights of its creditors 'underouy present or future Federat or State 1.1'1, Dr ifa recelver ofall orp.rt DfTenanl's property and assets is appointed by any Stat. Or Federal court: (n) if the Lease shall be tenninatod or rejected, Dr \he obligations of Tenant thereundcr shall be modified, Landlord shall have the option either (I) to require Guarantor, and GU8rnltor hereby SO agrees, to exeoute and deliver to Landlord. new lease os tenet for the balance of the ternt Jhell re!llll.ining 2S provided in the Le,se and upon the sam. tmos and conditions .. set forth therein, or (ii) to recover from GlllltOntor tbat whiel, Landlord would b. entilled to recover from Teoant under the Lease in the event of alerminauon ofthe Lease by L!lldlord because of a defaull by Tenant, ond such shall be recoverable from GU:ll'llolorwithout regard to whether LandlDnl is entitled to recover \he same from Tenant in any such bankruptcy or ollier proceeding. (b) if any obligation under the Lea.. is l'erfonnod by Teuan.l ad all Dr any ~art of $tIcb p<rformanc. is avoided Dr recovered from Landlord ns,a preference, fn\udulent IIallBf~ or otherwise, in:>.rrJ bankruptcy, insolvency, liquidation, reorganization or other proceoding involving Tenant, the liability of GunrnntDr under this GIlMan\)'.bull r"main in fult'ro'Celllld effutt. (c) as fmther security for payment of amounts under this G~.....nly, Gulltlmtor <hall file all claims agaiost Tennnt upon any indebtedness ofTellllllt to Guarantor in my banbuplcy or other proceediog in whiclY UlO filing of claims is required by law, and Guarantor shall assign to L",dlord all rigb\! of Guarontor thereunder, to lhe extent of Guaxantor' ~ obligations under this Guornnty. If G\lamolor doos not file any sueh claim, Landlord, as sttonlSy-in-fact fOT GUar1lntor, iB hereby authorized 10 do So in lI'e name of Guarantor or, in Llll1(llDrd'" discrelion, to assign the claim llDd to C1Iaseproofofelaill) to b. fileJN the name of Landlord's nominee. In all sucltcase, whether in adnlinislratlon, bankru~ley Dr otherwise, the petSon or peroOOB aulhori~d to pay'uch claim shall pay to Landlord U,e full amount !hereof, and. 10 ilie full ext.ent neeessary for that. putpose~ Guarontor hereby assigns to Landlotd all of Guarnolar' a rights to any oueh payment' or distrihutiOD.> to which G=tor would otherwise b. entitled. 13. All payments by Guarantor hereunder shall be made to Landlord at the address of Landlord set for in llie Lease, 14. in the event any condition at !hi! GOflnll\ty ,hall be found lIlegal Dr invalid for MY reasort, !he reaming provisions shall be interpreted >Jld construed as if lhe meg.l or invalid provision was not. part of this Gunranty, ellch provision heteDtbeing er,lorely sevo",hle. 15. This Guaranty shall insure to the benelil of Landlord, its heirs, p'roon.l represClltlltive. ""ceossDr>, and assigns and shall be binding upon lhe heirs, e~eeulors, atlminislrato"l, personal repC'e6ent-atives. suecessoTS1 and assigns ofOuarantor. 16. c;UARANTORAc;REES THAT THiS AGREEMENT IS l'ERFORMABLE IN l'ENNSYL V ANlA AND W AlVE nIB RIGHT TO BB SUED :eLSEWHERE. THIS GUARANTY SHALL BE CONS>:RUED IN ACCORDANCE wrm TIm LAWS OF THE ""...~'-oa.._ 27 1~llj('71 U\1\7'(1 '/1'1 rlr 'j (..(\10 'ml " "~ I ~- - UNITED STATES A ~ICABLE TO TRANSACDONS IN PENNSYL. MIA, 17. The lights graoted Landlord under tbis GU!lrnIlty shall be in addition to ally rights available to Landlord OlIdor COOlman Jawor staltlte against Guarantor pursuant to the Lease. EXllCD1'ED this (8 fJ~~ Allest 9o_l,.o...._ I r 'I (.{\ 11"1 '(HI dayor F" h ,1998. By; The Fitoess Company Holdings Group. Ine. ~~L-r ';::~ Stephen Smith, 1l!<~ CEe> 29 mil r '7 I r ^^ 7 -(1 'f1" I EXHIBIT "B" :";';'~' (C(Q)ry AMENDMENT TO LEAS~ THIS AGREEMENT is made this 2 day of J1 O\lern~ by and between COCOA ENTERPRISES, INC., a Pennsylvania corporation ("Landlord"), and THE FITNESS COMPANY OWNERSHIP GROUP, a Delaware corporation ("Tenant} WITNESSETH: WHEREAS Landlord and Tenant entered into a Lease dated February 1,1998 (the "Lease") pursuant to which Landlord leases to Tenant the real property and improvements thereon commonly known as Cocoa CourtClub,looated at 1249 Cocoa Avenue, Hershey, Pennsylvania 17033, as well as certain personal property; and WHEREAS Landlord and Tenant desire to amend the Lease with respect to the making of and payment fer capital improvements. NOW, THEREFORE, intending to be legally bound and for good and valuable consideration, Landlord and Tenant do by these presents covenant and agree as follows: 1. The following provision is substituted for the words "Intentionally Deleted' in Article 7 of the Lease: FINANCIAL COVENANT ('> I t"'c~d...J....1J" 'TfC %,1",,- Tenant shall provide to Landlord income statements, balance sheets. and cash flow sss statements on (8) a quarterly basis for the operation of the COCOCl Court Club Clnd (b) on an annual basis for T enent's corporation within 120 days of the end of its fiscal year. 2, The following sentence is added to the end of Section 12.01 ofthe Lease: "Commencing with fiscal year 2002 and throughout the Term, Tenant agrees to expend a minimum of $15,000 per year for alterations or major repairs (as defined in Section 12.01 hereof) to the Premises.' ,Q5<l4823 1^IJIG:71 GAA7 '0 'O]j [ fl 1 f1 '(\~I {' ).~, 3. The following Section 12.05 Is inserted into the Lease: Section 12,05. Notwithstanding Sections 12.01 and 12.02 of this Lease, Landlord shall be responsible for making Building System Component Repairs (as defined in Section 12.02) to the roof and HV AC system of the Premises ("Landlord's Alterations'); provided, however, that the cpst of Landlord's Alterations shall not exceed $50,000. Landlord's Alterations shall be managed by Landlord's manager, Select Capital Corporation ('Select'). La'ndlord's Alterations shall be complete by January 1, 2001. Tenant shall reimburse Landlord for the total cost of Landlord's Alterations (the 'Alterations Payments') commencing on January 1,2001 and ending December 1, 2006 by making equal monthly installment payments to Landlord, together with interest at the rate of ten (10%) percent per annum, in the manner provided for payment of the Annual Rental in Section 5.01. Tenant's Obligation to pay the Alterations P~ments to Landlord shall be in addition to its obliSlation to pay Rental (as defined ;n Section 5,04), real estate taxes, and all other charges, costs, and expenses payable by Tenant to Landlord under this Lease. 4, The following Section 12.06 is inserted inlo the Lease: Seelion 12.06. Provided that Tenant is not in default and is in compliance with all of the terms and conditions of this Lease, Landlord shall apply the Alterations Payments to Tenant's share ofthe Building System Component Repairs for the third year of the Term (2000) as set forth in Section 12,02. 5, The following sentence is inserted at the e,nd of Article 26: 'In addition, Tenant shall reimburse Select for Seleel's legal expenses incurred as they relate to the preparatiol1 of the Amendment to Lease dated flCy.?J:; . 2000 up to a maximum amount of $1.500.' [SIGNATURES TO FOLLOW ON THE NEXT PAGE] -2- 1.1.111 (.' 7 \ rflli7 'tJ '(ll I ;^," '^ll .~ '. ~'; ,,~... WITNESS the duly authorized signatures of L~\ndlord and Tenant on the day and year first above written, ~0Nh~ LANDLORD: Cocoa Enterprises, Inc. A Pennsylvania corporation ",~.A:nf TItle:--1.1J""i Fm< 0,../1-1')1'/ ATIEST: ATIEST: TENANT: The Fitness Company Ownership Group A Delawam corporation By:~~Q ~~ Title:..J:,fO J'4U4) f{lw/ -3- IliJ7c:7\ (,AA7 '0 'QJJ ,^Ir"1 'Akl EXHIBIT "C" .~" ~~~;" COCOA ENTERPRISES, INC., Plaintiff v. THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., Defenda nts : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 0.5. 's'b Ci;;..fTd.- IN CONFESSION OF JUDGMENT CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, a copy of which is attached to the Complaint filed in this action, 1 appear for the Defendants and confess judgment in favor of the Plaintiff and against Defendants as follows: Unpaid Rents Alteration Payments Insurance and Real Estate Taxes Late Charges Alterations/Major Repairs Attorney's Fees of 5% $1,427,068.00 $24,083.54 :$286,780,10 $4,482.33 $135,000.00 $93,870.70 BALANCE DUE FROM DEFENDANTS $ 1,971,284.67, together with costs and interest at the lawful rate until payment. .,11:tUE COpy FROM RECORD /Ill T6stlmollY wherellf. I ~,~re u!1l(l !;et my haOO / >/lij tl'!Iil ~l of sal:! ~ ;tl CMiisle. PL / ~ This <I 'C/:l (I _ :~ ~~ r;2bn ~ , - , ,,,' K \ ~ .[ProthonatDv '. . -', : DATED: ~1~s- f '! hnlR ml Respectfully submitted, FENSTERMACHER AND ASSOCIATES, P.C. By: C5---=r- ~ John R. Fensterma r Supreme Court 1.0. #29940 Shane F. Crosby Supreme Court 1.0. #92530 5115 East Trindle Road Mechanicsburg, PA 17050 (717) 691-5400 Attorneys for Plaintiff ~~Ov:7.l ~OO7. '8 '81j ~ COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. OS. I,Sb C;;J 1__ THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : COMPLAINT IN CONFESSION OF JUDGMENT AND NOW, comes Plaintiff, by its undersigned attorneys, the Offices of Fenstermacher and Associates, P.C., and files the within Complaint upon a cause of action of which the following is the statement: 1. Plaintiff, Cocoa Enterprises, Inc., is a Pennsylvania Corporation with offices al4718 Old Gettysburg Road, Mechanicsburg, Pennsylvania 17055, 2, Defendant, The Fitness Company Ownership Group, is a Delaware Corporation with a last known address of 70 Wood Avenue South, Iselin, New Jersey 08830. 3. Defendant, The Fitness Company Holdings Group, Inc., is a Delaware Corporation with a last known address of 70 Wood Avenue South, Iselin, New Jersey 08830. 4. Plaintiff is the owner and lessor of the premises IOGated at 1249 Cocoa Avenue, Hershey, Dauphin County, Pennsylvania known as the Cocoa Court Club. 5. On or about February 1, 1998, Plaintiff and Defendant, The Fitness Company Ownership Group, executed a written lease (th19 "Lease') for the Cocoa f, 'J t:(\IO'ml IAIJ I+,: 7 I (.(\(\ 7 '0 'OJ J . Court Club (the "Premises"). A true and correct copy oftl'le Lease is attached hereto as "Exhibit A," incorporated herein by reference and made a part hereof. 6. Defendant, The Fitness Company Holdings Group, Inc., executed a written Guaranty on February 18, 1998 (a true and correct copy I)f which is attached to the Lease as Exhibit C), guaranteeing the payment and perfo,rmance of all liabilities, obligations and duties imposed upon Defendant, The Fitness Company Ownership Group, under the terms of the Lease. 7. Defendant, The Fitness Company Ownership Group, took posse$sion of the Premises on or about February 1, 1998. 8. The Lease term was for a period of fifteen (15) yeElrs beginning February 1, 1998, and ending December 31,2012. 9. By an Amendment to Lease (hereinafter the "Amendmenf') dated November 30, 2000, a true and correct copy of which is attached and incorporated herein as "Exhibit B," Defendants are obligated to expend a minimum of $15,000 per year for alterations or major repairs to the Premises, commencing with fIScal year 2002 and throughout the lease term. 1 o. Defendants are also obligated under the Amendml~nt to make monthly alteration payments to Plaintiff in the amount of $926.29, commencing on January 1,2001 and ending on December 1, 2006. 11. Defendants have failed to pay rent and other sums; payable by Defendanls in accordance with the Lease and the Amendment. 12, On information and belief, the attached Lease has not been assigned. r. 'I t..flIO'1'U1 IAUlb:71 Gnn7 'Q 'Q1j . 13. Judgment has not been entered for money or in ejectment on the Lease in any jurisdiction, 14. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 15. Plaintiff is advised, believes and therefore avers that Defendants have directly and materially breached the terms and conditions; of the Lease as follows: a. By failing to pay all rental and other ,sums payable by Defendants under the terms of the Lease and the Amendment for more than five (5) days after the due date for the months of November and December 2004 and January 2005. b. By failing to expend a minimum of $15,000 for alterations or major repairs to the Premises for the year 2004 as required by the Amendment 16. Defendants have refused to perform their covenants under the Lease, despite written demand by Plaintiff. 17. By virtue of Defendants' default, Plaintiff is entitled to and does hereby declare the rent and all other sums payable by Defendants for the months of November and December 2004 and January 2005, in addition to the rent and all other sums payable by Defendants for the entire unexpired balance of the term of the Lease, to be due and payable. 18. The Lease entitles Plaintiff to a five (5%) percent late payment charge per month as additional rent, as well as reasonable attorney's fees and court costs. 19. As a consequence of the foregoing, Defendants are in default under the Lease and the Amendment and are liable to Plaintiff for the following amounts: Unpaid Rents Alteration Payments Insurance and Real Estate Taxes Late Charges $"1,427,068,00 $:14,083,54 $286,780.10 $4,482.33 (l , J (., (\ I 0 '(\ ~I IAIJI';"'71 ((\(\,7 ,() '(1ll . AlterationslMajor Repairs Attomey's Fees of 5% $135,000.00 $93,870.70 BALANCE DUE FROM DEFENDANTS $1,971,284.67 WHEREFORE, Plaintiff demands judgment in the sum of $1,971,284.67 authorized in the warrant appearing in the attached Lease, together with costs and interest at the lawful rate until payment. Respectfully submitted, FENSTERMACHER AND ASSOCIATES, P.C. By: ~~7~ c::>- ('- John R. Fenste~aCher Supreme Court I.D. #29940 Shane F. CroiSby Supreme Court 1.P.#~2530 5115 East Tril1dle Road Mechanicsburg, PA 17050 (717) 691-5400 Attorneys for Plaintiff DArED: February 4, 2005 I 'ri nOl R 'ON ~ldlHI SOOG '881J ~~, ~ ,.- DATED: 2.- 7'- oS r'\ 'I rAI('o. '(\11 By: IAI 17...' 71 r ('o.f', 7 '('0. '11 1 I ..~: L::.~ ~; COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA. v, NO. 65.' S/J C~ T.e...- THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, lNG" IN CONFESSION OF JUDGMENT Defendants : NOTICE OF ENTRY OF JUDGMENT BY CONFESSION TO: The Fitness Company Ownership Group 70 Wood Avenue South Iselin, New Jersey 08830 The Fitness Company Holdings Group, Inc. 70 Wood Avenue South Iselin, New Jersey 08830 Gerald P. Lally, Esquire P.O. Box 190 125 Half Mile Road Middletown, NJ 07748 NOTICE IS HEREBY GIVEN that judgment by confession was entered against you in the above-captioned case on 1= <I _, 2005, iJ'tthe afP,.ount of $1,971,284.67, together with costs and inte est at the lawfullGlte until'payment. . :"" "',;;. Prothonotary of Cumberland County ; ~a '7kr..~ II fda, r5i , '~T'" . . < wm:7.1 ~OO7. 'R 'R1~ Jt; 'J "hiP ml COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v, NO. 05- C 5?J Cu-,;.; 7~ THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INC., IN CONFESSION OF JUDGMENT Defendants : () ~ c: ~ CERTIFICATE OF RESIDENCE ""'~ ~ t~'f.~' m ~.-.... CC' I hereby certify that the address of the Plaintiff in the foregoing m~,r is:).. ~t:. .~ ~ <~:8 :!l: ~;,(- :2 ~ =< ...-- oS:"" Cocoa Enterprises, Inc. 4718 Old Gettysburg Road Mechanicsburg, Pennsylvania 170155 I further certify that the last known address of the Defendants in the within proceeding is: The Fitness Company Ownership Group 70 Wood Avenue South Iselin, New Jersey 08830 The Fitness Company Holdings Group, Inc. 70 Wood Avenue South Iselin, New Jersey 08830 FENSTERMACHER AND ASSOCIATES, P.C. DATED: ~/ ~;'.;l- .:s -:;2- ~ . By: ~ John R. Fenstermacher Supreme Court I.D. #29940 Shane F. Crosby Supreme Court 1.0. #92530 5115 EastTrindle Road Mechanicsburg, PA 17050 (717) 691.5400 Attorneys for Plaintiff Q -1'1 ::;1 ffi:IJ -",h; ."'~ 6 ';1 , .""'-....1 96 13'" 0.' ::.. :n -.: r-h 'I (.(\ I 0 'ml WJ7C:71 cnn7 'Q 'qlJ EXHIBIT "D" " ~ t ? '" COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY; PENNSYLVANIA v. NO. 05-650-Civil TI~ffi1 THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP,INC., IN CONFESSION OF JUDGMENT Defendants : - -- ---- -"-. - .....-.-- . ,- --~.-._........,--..........-. --,-...,-- NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THEREON Notice of Defendants' Rights To: The Fitness Company Ownership Group 70 Wood Avenue South Iselin, New Jersey 0'8830. ' .... . , , ,'The FithessCompanY Holdings Group~' In6> .,. ;, 70 Wood Avenue South . . . Iselin; New Jersey 08830 ',. ,. ,.. '.' \~. ", ',,: " Gerald P. Lally, Esquire P,O, Box 190 125 Half Mile Road Middletown, NJ 07748 A judgment in the amount of $1 ,971 ,284.67, together with costs and interest, has been enter.ed against you and in- favo~f the plaintiff withournny prior notice or hearing based- n. - - . -, - "- on a confession of judgment contained in a written agreement or other paper allegedly signed by you, The sheriff may take your money or other property to pay the judgment at any time after thirty (30) days after the date on which this notice is served on you. You may have legal rights to defeat the judgment or to prev,ent your money or property from being taken. YOU MUST FILE A PETITION SEI;:.K1NG RELIEF FROM THE JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH THIS NOTICE IS SERVED ON YIDU OR YOU MAY LOSE . YOUR RIGHTS. YOU SHOULD TAKE THIS PAPER TO YOUR CAWYER A'r ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A ( 'J +,(.70 'ml W~Qf:h ~OOl 'II '~1~ LA.WYER. IF YOU CA.NNOT AFFORD TO HIRE A LAWYER, THIS OIFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY BAR ASSOCIATION 32 SOUTH BEDFORD STREET CARLISLE, PA 17013 (717) 249-3166 -. _-"~C-'-"__~__~' .-. -.-'- .._._ . "--,---_. _-..f~S.JE..e.MAG.);igE~.ASSOCIATES< P-C--.____ . ...... ". .."- By: 0- -:r-- John R. Femltermacher Supreme Court 1.0. #29 Shane F. Crosby Supreme Court 1.0. #92530 5115 East Trindle Road MechanicsbLlrg, PA 17050 (717) 691-540Q Attorneys for P1l'intlff DATED: February 7,2005 ""----, t', tm 'ON ~V9l: 6 SOOl '( t '8ll , >, , CERTIFICATE OF SERVICE: AND NOW, on this 7th day of February, 2005, I, Shane! F. Crosby, Esquire, hereby certify that I have served the foregoing Notice under Rule 2fI58.1, by mailing a true and correct copy by United States certified mail, addressed as follows: " -.--,..-.----" The Fitness Company Ownership Gmup 70 Wood Avenue South ---_. - . - h __-~elin,.Jll.ew.J.ersey.,.QB.B30. ~ .~,__' .,_ The Fitness Company Holdings Group, Inc, 70 Wood Avenue South Iselin, N!!w Jersey 08830 Gerald F'. Lally, Esquire P.O. Bbx 190 1-~fdtalf Mile Road Middletown, NJ 07748 FENSlERMACHER AND ASSOCIATES, P.C. ~.-......--~-,;...~.~..- By: ;sr- 7-' '.. r-. __-c, '--..'," _..~--__~S./:lao..~.!,.C~,' .-,..;. "-"'~~-'-''''_''_.r~. Sd me 'ON ~V9E: 6 SOO~ 'II '~lJ VERIFICATION I have read the foregoing Petition on.behal1 of the Dl!fendant. I hereby affirm that I have personal knowledge of information disclosed. herein and thatI have the authority to make this Verification on behalf of the Defendant. The factual statements contained herein are true and correct to the best of my knowledge, information, and belief. This verification is made subject to the penalties of 18 P A. Cons. Stat. Section 4904 relating to unsworn falsification to authorities, which provides that if I knowingly make false averments, I may be subject to criminal penalties. DATE: Jhlo) DATE: ~hl v~ CERTIFICATE OF SERVICI~ Michael A. Gruin hereby certifies that copies of the within Petition to Strike or Open Judgment By Confession were served by United States certified mail, return receipt requested, postage prepaid, the 1St}., day of {'1W< ~, 2005, upon the following parties: John R. Fenstermacher Fenstermacher & Associates Attorneys for Cocoa Enterprises, Inc. 5115 East Trindle Road Mechanicsburg, P A 17050 DATE: J /8(1)5' , By: ~~{Jr;/[ MIchael A. Gruin, Esq. COCOA ENTERPRISES, INC. Plaintiff S MAR 0 9 200?\{' IN THE COURT OF COMMON PEAS OF CUMBERLAND COUNTY, PE SYLVANIA ~ , NO. 05-650 CIVIL TERM v. IN CONFESSION OF JUDGMEN THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS: GROUP, INe. Defendants RULE TO SHOW CAUSE WHY CONFESSED UDGMENT SHOULD NOT BE STRICKEN R OPENED AND NOW, this :1 '0 ~ day of Nl J. 2005, a rule s entered upon the Plaintiff, Cocoa Enterprises, Inc., to show cause why the judgment by confession of February 4, 2005 in the above-captioned matter should not be stricken or opened. Rule Returnable the ~F- /:]0 f'''' . daYOf~ - 4" i...~ ,). .2005 at the following place and time It is further ordered that a stay is issued on the execution of the abo e referenced Judgment by Confession pending final resolution of this Rule. ~\'-.<~'~ \''. ~' V~~'0 , (, C\,U .,h'~ OJ -./-;.----------'" Bet Court: " ~.-/" ........ .~ ......-: ~. ,,~ ,',~" T:"l~ IV SO :6 H'l 82 ~~H ~anz 1.8V1.0;\:C.j.Ll)~b 3J-li dO j:)t:HO-Q311::l " COCOA ENTERPRISES, INC., : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. NO, 05-650 Civil Term THE FITNESS COMPANY OWNERSHIP GROUP, THE : IN CONFESSION OF JUDGMENT FITNESS COMPANY HOLDINGS: GROUP, INC., Defendants : ORDER JA. AND NOW, this II day of April, 2005, counsel has requested a continuance of the hearing scheduled for April 8, 2005 because there are outstanding factual issues that need to be resolved prior to the presentation to the Court. Therefore, it is so Ordered that the matter is continued generally until /'..--'......-.__._~'-~ such time either party requests a hearing on this m er. /' / // J. ~\ m.o~ "? CL\C~ /\~~ (--00 , \ - \ \ - () "\ V'i\!\-i,"\"i}, S,\'\i:;,.~ I ! 1\.Jr~;;".::,\<)~",...- "".;' '::;'::;',\\')<",\ .I\.d' - :\_"" _,' ,0',' -,"';~'~! IV lJ 2 : II Wi I I l.JdHDOl AUlflONOHLOdd 3Hl .:10 3:)/330-031Ij ----------- FENSTERMACHER AND ASSOCIATES, P.C. AITORNEYS AND COUNSELORS AT LAW t..",.~~:~~: ',., ~,*,.'" >:t"",~ ,~':~),r"..:".,i,.";: I'-,~.~,'~ \>:\_'~t~--l,' ~{,,~..!'..i1:'.,_. ~^".~f'\)l ,/11<")";' #;: I' . ,~-,.~ '... f'. . " rf/E JONAS RUPP IIOUtE *.~EM.BER PENNSYLVANIA AND NEW JERSEY BAR: JOHN R. FENSTERMACHER DIRECT DIAL (717) 691-5420 April 6, 2005 VIA FACSIMILE 240-6460 Hon. Edward E. Guido Cumberland County Courthouse One Courthouse Square Carlisle, PA 17050 RE: Cocoa Enterprises, Inc. v. The Fitness Company Ownership, et al Dear Judge Guido: As I discussed with Sandy, counsel for the Defendant, The Fitness Company, et ai, has agreed with this office that discovery is necessary in this matter prior to formal presentation to the Court. Accordingly, I have enclosed a proposed Order continuing this matter generally until we have completed discovery. We will then, if a hearing is necessary, request a hearing with you. If you have any questions regarding the foregoing, please feel free to telephone me, Thank you. Very truly yours, FENSTERMACHER AND ASSOCIATES, P.C. \f'/ E!~~ . . John R. Fenstermacher rac Enclosures cc: Michael A. Gruin, Esquire Cocoa Enterprises, Inc. ( \ PLEASE RESPOND TO: THE JONAS HUPP HOUSE 5115 EAST TRINDLE ROAD MECHANICSBURG, PENNSYLVANIA 17050 MECHANICSBURG OFFICE: (717) 691-5400 FAX (717) 691-5441 www.fenstermacher.cc john@fenstermacherandassociates.com OCEAN CITY OFFICE: 26 BAY AVENUE OCEAN CITY, NJ 08226 (609) 391-9461 04/07/2005 11:11 71 75915441 FENSTERI'IACHER&ASSOC, PAGE [12 r ".,. FENSTERMACHER AND ASSOCIATES, P.C. ATIORNEYS AND COUNSELORS AT LAW rH~ JONAS IN'PP HOII.!' ,JOHN R, FENSTF.J~MAC1-lF.R DIRECT Dl^L (717) 691-5q,ZO . MEMBn rENN5YlVANlJI ANQ NEW JERSEY D~R April 6, 2005 VIA FACSIMILE 240-6460 Hon, Edward E, Guido Cumberland County Courthouse One Courthouse Square Carlisle, PA 17050 RE: Cocoa Enterprises, Inc. v. The Fitness Company Ownership, etal Dear Judge Guido: As I discussed with Sandy, counsel for the Defendant, The Fitness Company, et ai, has agreed with this office that discovery is necessary in this matter prior to formal presentation to the Court. Accordingly, I have enclosed a proposed Order continuing this matter generally until we have completed discovery. We will then, if a hearing is necessary, request a hearing with you, If you have any questions regarding the foregoing, please feel free to telephone me, Thank you, Very truly yours, FENSTERMACHER AND ASSOCIATES, P,C. rac Enclosures cc: Michael A. Gruin, Esquire Cocoa Enterprises, Inc. ,. John R. Fenstermacher '............. PLEASE RESPOND TO: THE: JONAS RUPP HOUSE !:>115 EAST TRlNPl.E ROAD M"ECHANfCSBtlRC. PENNSYLVANIA 17050 ME:CHANICSBl.JRC Orr-Tee: /'37) 691-5400 FAA [717) 691.5441 \I.1l,IoIt,VJEn!lte.rmacher.cc john@fe:n$l;efrrl;,cheTilInd;]$sodatea.com OCEAN CIty OFFICE:, 2G BAV ^VENUE OCeAN Cl"N; N.J 08226 (6091 391-94151 04/01/2005 11:11 11 75g15441 FENSTERf1ACHER8,ASSOC. PAGE 03 , .-- COCOA ENTERPRISES, INC" : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 05-650 Civil Term THE FITNESS COMPANY OWNERSHIP GROUP, THE : IN CONFESSION OF JUDGMENT FITNESS COMPANY HOLDINGS: GROUP,INC., Defendants : ORDER AND NOW, this _ day of April, 2005, counsel has requested a continuance of the hearing scheduled for April 8, 2005 because there are outstanding factual issues that need to be resolved prior to the presentation to the Court Therefore, it is so Ordered that the matter is continued generally until such time either party requests a hearing on this matter. J. 0q!07/2005 11:11 7175915441 FENSTERr,IACHER&ASSOC, PAGE 01 ,... .-- FENSTERMACHER AND ASSOCIATES, P.C. ATTORNEYS AND COUNSELORS AT LAW r,.If JOflM (NIPP /JOt/IE .liIu\BER PEN!'l:StWANIA AND NElli JUSnllAJI JOHN R. FENSTERMACHER OIRE.CT DIAL (717) 691.5'1020 FAX TRANSMITTAL Date: April 7, 200S TO: Hon. Edward E. Guido FROM: John R. Fenstermacher COMPANY: FAX: 240-6460 PAGES (including cover): 3 NOTESICOMMENTS: The information contained in this telefacsimile message is transmitted by an attorney, and is priVileged and confidential intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any disseminalion, distribution or copy of this communication is strictly prohibited. If this communication was received in error, please immediately notify us by telephone, collect if necessary, and return the original message to us al the above address via the U.S. Postal Service (we will reimburse oostaael Thank. you Pl..Ef\SE. J:l..ESPOND TO~ THE JONAS RUPP HOUSE 51:15 EAST TRINDU!. ROAD MECHAl'''oUC!;B(,JRG, PENNS'Yl.,VJll.NLA 17050 :~"'Ui:;:CHANICSBUAC Of1"1CE; 171.7) 69J..s400 F.....x (717) 691-5441 l,Io.I'\IJW,f4hst"rmac:het".cc lohn@fv.r\l:tI!rm8.ehtil[llnd~socta_.com OC.EI\l'\I CITY OFFlCE: 25 DAY AV'E:..f\lUE Oc;:::EAN ClT'{, NJ O~226 (rjo09) :391-9461 COCOA ENTERPRISES, INe., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 05-650 CIVIL TERM THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS GROUP, INC., IN CONFESSION OF JUDGMENT Defendants MOTION TO SET DATE FOR HEARING AND NOW comes the Plaintiff, Cocoa Enterprises, Inc., by and through its attorneys, the Offices of Fenstermacher and Associates, P,C., and files this Motion to Set Date for Hearing, as follows: 1. On or about February 4, 2005, Plaintiff filed a Complaint in Confession of Judgment for the sum of$I,971,284.67, together with costs and interests, in reference to an alleged breach of a commercial lease between Plaintiff and Defendant. 2. On or about March 8, 2005, Defendants responded by filing a Petition to Strike or Open Judgment by Confession. 3. On or about March 26, 2005, this Court issued a Rule to Show Cause Why Confessed Judgment Should Not Be Stricken or Open, staying execution of the Judgment by Confession pending a final resolution, and scheduling a hearing for April 8, 2005. 4. On or about April I!, 2005, this Court, upon the request of both parties, issued an Order granting a continuance because of factual issues that needed to be resolved prior to presentation to the Court. The Order , granted the right to request a hearing on this matter to either counsel. 5. At this time, the aforementioned matter has progressed to such a point that a hearing is now appropriate. WHEREFORE, Plaintiff, Cocoa Enterprises, Inc, respectfully requests that the abovementioned matter be set for hearing in front of this Court. Respectfully submitted, FENSTERMACHER AND ASSOCIATES, P.C. By: J hn R. Fe acher upreme Court J.D. #29940 Matthew Aaron Smith Supreme Court J.D. #94603 5115 East TrindIe Road Mechanicsburg, P A 17050 (717) 691-5400 Attorneys for Plaintiff DATED: ~:l.~ 2t1(){. CERTIFICATE OF SERVICE AND NOW, on this .;;J,~ day of February, 2006, I, Matthew Aaron Smith, Esquire, hereby certifY that I have served the foregoing Plaintiffs Motion to Set Date for Hearing by mailing a true and correct copy by United States first class mail, addressed as follows: Michael A, Gruin, Esquire Stevens & Lee 17 North Second Street 16th Floor Harrisburg, PA 17101 7l7.234.1090 FENSTERMACHER AND ASSOCIATES, P.C. By:i~~ atthew Aaron mt -" -, - ,- "'-.nf'- r-~ "7 r COCOA ENTERPRISES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v, NO. 05-650 CIVIL TERM THE FITNESS COMPANY OWNERSHIP GROUP, THE FITNESS COMPANY HOLDINGS GROUP, INC" IN CONFESSION OF JUDGMENT Defendants ORDER AND NOW, this Jl"day of f~ , 200/', upon consideration of the attached Plaintiff's Motion to Set Date for Hearing, IT IS HEREBY ORDERED AND DECREED that the Motion is GRANTED and a hearing for the above-captioned action is set for n~aYOf MJ- ,200-'-,atZ:~A.M.~.in Courtroom No. 3 of the Cumberland County Courthouse, High and Hanover Streets, Carlisle, Pennsylvania, /' // ], " --, ""I- .....', r- t C, ,~i, " r."~ "- ..",.~ i ~'i: r ~ " R', t.-. , ^'<. } ~ ~ c. '- r , r-.:--_ ><1) p <i i~ \" '-' t;::. i~ "--; I ~'< ,,\ =-" . ;1 "J.r ,;;i ,~, -" ,1