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HomeMy WebLinkAbout94-04733 .~ ~ j ~ , " " " " , , ~ I J c!J ! , ( ~ j , ' ~ C' :t -r::r' en ,~ - ~ '" .'l ,.../ -~ '.4? t; = " , , BARON II, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. 94-4733 Civil Term TECHNICAL SERVICES ASSOCIATES, : INC. I Defendant ACTION FOR DECLARATORY JUDGMENT ANSWER WITH NIW MATIR AND NOW, comes Techni.cal Services Associates, Inc. by and through its attorneys, Saidis, Guido, Shuff & Masland, and answers the Complaint as followa: 1. Admitted. 2. Admitted. 3. Denied as stated. It is admitted that the parties entered into a Lease Agreement for the property on April 18, 1991. 1991. It is denied that the effectuation date was April 18, To the contrary, the effective date of the Lease was governed by paragraph 3 thereof. 4 . Admit ted. 5. Admitted. 6. Denied. To the contrary, the parties intended Section 29.2.1 to calculate increases for operating expenses by multiplying the sum of the annual base rent and the previous year's additional rent times 3%. SAIDIS, GUIDO, SHUFF " MASLAND 26 W, Hl,h 5',.., Culillt, PA 7. Admitted in part and denied in part. It is admitted that the calculation set forth therein is Plaintiff's calculation. It is denied that said calculation reflects either the intention of the parties or the clear language of the Agreement. To the contrary, the correct calculation is that as set forth in Defendant's answer to paragraph 6 above. CIRTIrICATI or SIRVICI .' .fit Esquire certify that on the /~ day of I/,Edward E. Guido, <: '~L:"'.l.--7 .~~ ,1994, I served a true and correct copy of the within Answer with New Matter upon counsel for Plaintiff in this matter by depositing same in the United States mail, first class, postage prepaid addressed as follows: DATED: NOrman P. Hetrick, Esquire Anthony J. Nestico, Esquire HETRICK, ZALESKI, ERNICO & PIERCE 10 South Market Street P.O. Box 1265 Harrisburg, PA 17108-1265 cr/t~ /1/-1 Respectfully submitted, & MAS LAND 4 BARON II, a Pennsylvania Partnership, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. DOCKET NO. 94-4733 TECHNICAL SERVICES ASSOCIATES, INC., ACTION FOR DECLARATORY JUDGMENT Defendant PLAINTIFF'S Re~PON$E TO 12.Ef.ENDANT'S MOTION FOR JUDGMENT ON THe PLEADINGS AND NOW, Baron II, by and through Its attorneys, Hetrick, Zaleski & Pierce, P.C., flies this Response to Defendant's Motion for Judgment on the Pleadings and offers In support thereof the following: 1. On or about October 14, 1994, Defendant flied a Motion for Judgment on the Pleadings and listed the matter for the December 7, 1994 Argument Court. 2. Defendant alleges in Its Motion that no genuine issues of material fact exist in this case. 3. In Paragraph 15 of Its New Matter, Defendant alleges that the Lease Agreement which underlies this action Is substantially the same as all of the leases used by Plaintiff for the other tenants located In the office building occupied by the Defendant. 4. Defendant has therefore made the terms of the leases used by the Plaintiff for the other tenants located in the office building occupied by the Defendant material to the disposition of this case. " SAlOIS, GUIDO, SHUFF It MASLAND 26 w, Hlah 5'..., CIIII.I., PA BARON II, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. I I I ASSOCIATES, I I 94-4733 Civil Term TECHNICAL SERVICES INC., Defendant ACTION FOR DECLARATORY JUDGMENT DIFBNDANT'S MOTION FOR JUDQMINT ON THI PLIADING& Defendant, Technical Services Aseociates, Inc. by and through its at tOrllt!y , SAIDIS, GUIDO, SHUFF & MASLAND, respectfully moves this Court pursuant to Pa. R.C.P. No. 1034 for judgment on the pleadJ.ngs and in support thereof avers as follows: 1. The pleadings are closed and time exists within which to dispose of this Motion before trial. 2. No genuine issues of material fact exist. 3. Based upon the admitted facts in the pleadings, and the law of this Commonwealth, Defendant's interpretation of Section 29.2.1 of the Lease Agreement is appropriate. WHEREFORE, Defendant prays this Honorable Court to enter an Order granting its Motion for Judgment on the Pleadings and declaring that its interpretation of Section 29.2.1 of the Lease Agreement between the parties is appropriate. Date: i ell"; I <i t.-{ Respectfully submitted, SAIDIS, GU~~~-'~'& MASLAND ~ By: L<, Edward E. Guido, Esquire Supreme Ct. I.D. * 21206 26 West High Street Carlisle, FA 17013 (717) 243-6222 Attorney for Defendant -~.,-,.,-,-""",,'",""""..._...........,...,....'"'''''''''' 1M The Court or C::mmO;1 Ple::s of C:.Jt".;:':::ilrl:nd C;,:::u:-;~'Y, Psnr::syl'lr::r:l:: Beron II, e Pennsylvania Partnership V'S. Technical ServiceB AB&ociateB. Inc. ~o. 94-4733 Civil Term .~ --.-, ---- ~ow. AIl~IIRt 71 lQQ.4 :9---. !, S:~~::' O? C~[3:=::"!"A..'I'D COt.~'=Y. ?.:~ co h=-.by c!.;;Ue::: c!:c 51='.3 01 Vn,..lI Co:lW1l'f 10 =.ne :!:.is W:!:, :!::s e..-puc:icn :ebJ :=C.: ~t == ~ :.::d ::.s.k of :he ?t..:_::!,. ;"~~<~ Sl2L.~ o( S==ubl:cl Co:lllllrr. ?o. ,., , , c.:, Afiidavit or Sem= September 7th :-;ow, . ... Complaint for :.:.: ~t::n :!? 94 8:40 A_M. o':.!cc: ',(. s::".-.:-:i . .- Declaratory Judgment 'Jpoa Technical SerVices Associates, 'Inc. n Vnrlr f"nl1nty "nl1",,"hnlH:~;p. ?A Po Markp-t. St.. York Countv~. by ::.:u:cib.i:o n~v,::) Wi hum. Pr~!=t;ri~nr. of Technical Services Associates, Inc. I. true and attested c:::pr oi :::= ,:it=.! Complaint " md -~,.;. k::owa :0 him =: .:::ttC::3 :::::::r. So :u:.swc::l, \ ',",',.. < -:,;~. .('..~, .. '" ."'-..'" Shc::d" 01 York Kenneth L. Markel ',";.,\), COWlrr. 1:a. =: ....: --2t.t:l 6., OJ! c::~pt~~r . , /~l / i " ~ . r; ,_ :9~4 ccsn S!:l.....'1CZ ~!!I.!....G Z S14.00 3.92 2.00 5wor-:me r.li=:-:bd beiore N01AAIAl. SEAL .>.: " A ",TI WALl,IS W, IIHINE. Notary PubllO YOI1\, Yo'" Counly. Fon"v"onla wry e..........on Expl'" Maleh 2~. 101~ --""-----. $19.92 TBCHNICAL SBRVICBS ASSOCIATBS, INC., Defendant BARON II, a I Pennsylvania Partnership, I Plaintiff I I I I I I I v. IN THB COURT OF COMMON PLEAS OF CUMBBRLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 94-4733 CIVIL TERM IN REI DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS BEFORE SHEELY. P.J.. HOFFER and OLER. JJ. OPINION and ORDER OF COU~ Oler., J. This case arises out of a conflict over the interprotation of a commercial lease. Baron II, a Pennsylvania partnership (Plaintiffl, the lessor, has filed an action for declaratory judgment against Technical Services Associates, Inc. (Defendant), the lessee, asking the Court to interpret a provision of the lease. Presently before the Court is a motion for judgment on the pleadings filed by Defendant. For the reasons stated in this Opinion, Defendant's motion will be DENIED. STATEMENT OF FACTS AND PROCEDURAL HISTORY Statement of Facts. Plaintiff is a partnership with its principal place of business at 93l North Front Street, Harrisburg, Dauphin County, Pennsylvania. 1 Defendant is a corporation with its principal office located at 360 Wire Road, York, York County, pennsy 1 vania. 2 Plaintif f' s Complaint, paragraph 11 Defendant's Answer with New Matter, par~graph 1. 2 Plaintiff's Complaint, paragraph 21 Defendant's Answer with New Matter, paragraph 2. r.. No. 94-4733 CIVIL TERM On or about April 18, 1991, the parties entered into a lease agreement in which Defendant agreed to lease space from Plaintiff in a building Plaintiff owned at 2 Market Plaza Way, Mechanicsburg, Upper Allen Township, Cumberland County, Pennsylvania.) Section 29.2.1 of the lease agreement governs the calculation and payment of Defendant's portion of the operating expenses of the building,' and provides as follows I Tenant shall pay Tenant's proportionate Share for increases in Operating Expenses during each Operating Year to the extent that said Operating Expenses shall exceed the Operating Expenses incurred by Landlord during the Base Period; however, this amount due and payable is limited to three (3') percent of the average base rent payable under this Lease plus any previous year's additional rent.' This lease agreement is similar to the leases used by Plaintiff for other tenants located in the same building.' On May 4, 1994, Plaintiff mailed Defendant a letter requesting Defendant's portion of the operating expenses for 1993, in the ) Plaintiff's Complaint, paragraphs 1, 3; Exhibit A; Defendant's Answer with New Matter, paragraphs 1, 3. · Plaintiff's Complaint, paragraph 4; Defendant's Answer with New Matter, paragraph 4. , Plaintiff's Complaint, Exhibit A; Defendant's Answer with New Matter, paragraph 5. , Defendant's Answer with New Matter, paragraph 15; Plaintiff's Answer to Defendant's New Matter, paragraph 15. 2 No. 94-4733 CIVIL TBRM (capped) amount of $3,880.00, to be paid by June 1, 1994.' Defendant responded with a letter dated May 18, 1994, disputing the way in which Plaintiff calculated the capped amount of the operating expenses, and offered to pay $1,992.00.' Defendant haG yet to make any actual payment.' According to Plaintiff, the language of Section 29.2.l relevant to the calculation of the cap amount of operating expenses chargeable to Defendant is to be interpreted as providinq for the multiplication of the annual base rent by .03, and the addition of the prior year's additional rent to that amount to equal the total cap amount. 10 According to Defendant, the languago of Section 29.2.1 provides for calculation of the cap amount by adding the annual base rent to the previous year's additional rent, and then multiplying this sum by .03.11 A larger figure for rent each year will result from Plaintiff's method of calculation. procedur.al Historv. Plaintiff initiated this action by filing , Plaintiff's Complaint, paragraph 10; Defendant's Answer with New Matter, paragraph 10. a Plaintiff's Complaint, paragraph 11; Defendant's Answer with New Matter, paragraph 11. . Plaintiff's Complaint, paragraph 12; Defendant's Answer with New Matter, paragraph 12. 10 Plaintiff's Complaint, paragraph 6; Defendant's Answer with New Matter, paragraph 7. II Plaintiff's Complaint, paragraph 8; Defendant's Answer with New Matter, paragraph 8. 3 No. 94~4733 CIVIL TERM a complaint on August 22, 1994, requesting the Court to i..ue an order requiring Defendant to pay operational costs in the amount of $3,823.001~ and to provide that Plaintiff's interpretation of Section 29.2.1 of the lease agreement will be implemented throughout the remainder of the lease term. Defendant responded by filing an answer with new matter on September 15, 1994. Plaintiff replied to Defendant's new matter on October 6, 1994. Defendant's motion for judgment on the pleadings, asserting that no genuine issue of material fact exists and that Defendant's interpretation of Section 29.2.1 of the lease agreement is correct, was filed on October 14, 1994. STATEMENT OF LAW The standard of review for a motion for judgment on the pleadings is well-settled I A motion for judgment on the pleadings should be granted only where the pleadings demonstrate that no genuine iBBue of fact exists, and that the moving party is entitled to judgment as a matter of law. Pa. R.C.P. 1034. Thus, a trial court must confine its consideration to the pleadings and relevant documents and accept as true all well pleaded statements of fact, admissions, and any documents properly attached to the pleading_ presented by the party against whom the motion is filed. The court may grant judgment on the pleadings only whore the moving party's right to succeed is certain and the case is so free from doubt that trial would clearly be a fruitless exercise. l~ It is unclear why the amount requested in the MAY 4, 1994 letter to Defendant differs from this amount. 4 No. 94-4733 CIVIL TBRM HcAllister v. Hl11ville Hut. Ins. Co., 433 Pa. Super. 330, 334, 640 A.2d 1283, 1285 (1994). In CU8smano v. Anthony H. DiLucia, Inc., 281 Pa. Super. 8, 421 A.2d 1120 (1986), the rules of contract construction were discussed in the context of a landlord-tenant lease. We begin with the observation that leases are in the nature of contracts and are thus controlled by principles of contract law, including the well settled rules of interpretation and construction. As in the cass of other written contracts, the purpose in interpreting a lease is to ascertain the intention of the parties, and such intention is to be gleaned from the language of the lease. Such intention is not to be determined merely by reference to a single word or phrase, but rather by giving every part of the document its fair and legitimate meaning. CUSaJRano v. Anthony H. DiLucla, Inc., 281 Pa. Super. 8, 13, 42l A.2d 1120, 1122 (1980) (citations omitted). Additionally, as the Commonwealth Court has noted, '[w)hen a written contract is clear and unequivocal, its meaning must be determined by its contents alone. It speaks for itself and a meaning cannot be given to it other than that expressed. Where the intention of the parties is clear, there is no need to resort to extrinsic aids or evidence.' Hence, where the language is clear and unambiguous, the focus of interpretation is upon the terms of the agreement as manifestly expressed, rather than as, perhaps, silently intended. Steuart v. McChesney, 498 Pa. 45, 49, 444 A.2d 659, 661 (1982), quoting East Crossroads Ctr., Inc. v. Hellon-Stuart Co., 416 Pa. 229, 230-31, 205 A.2d 865, 866 (1965). 5 No. 94-4733 CIVIL TBRM However/ "where an ambiguity existD, parol evidence i. admissible to explain or clarify or resolve the ambiguity, irre.peotive of whether the ambiguity is created by the language of the instrument or by extrinsic or collateral ciroumstances." In re Herr Estate, 400 Pa. 90, 94, 161 A.2d 32, 34 (1960). A contraot is ambiguous if it is reasonably susceptible of different oonstructions and capable of being understood in more than one sense. Hutchinson v. Sunbeam Coal Corp., 513 Pa. 192, 201, Sl9 A.2d 385, 390 (19861. "The court, as a matter of law, determinlls the existence of an ambiguity and interprets the contract whereas the resolution of conflicting parol evidence relevant to what the parties intended by the ambiguous provision is for the trier of fact." Id. As a general rule, however, when an ambiguity does exist, it is to be construed most strongly against the party who drafted the contract. Cusamano v. Anthony M. DiLucia, Inc., 28 Pa. Super. 8, 14, 421 A.2d 1120, 1123 (1980). APPLICATION OF LAW TO FACTS In the present case, Section 29.2.1 of the lease agreement between the parties is arguably ousceptible to the interpretation given to it by each of the parties. Moreover, Plaintiff has averred that a certain history exists with respect to the provision in question in similar leases. At this time, it appears to be premature to resolve the case in favor of either party. For these reasons, the following Order will be entered I 6 BARON II, plaintiff IN THE COURT OF COMMON PLEAS OF CUM ERLAND COUNTY, PENNSYLVANIA V. TECHNICAL SERVICES ASSOCIATES, INC., Dehndant CIVIL ACTION - LAW NO. 94-4733 CIVIL TERM '" ----- TECHNICAL SERVICES ASSOCIATES, INC., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. BARON II, CIVIL ACTION - LAW Defendant NO. 95-1602 CIVIL TERM IN RE: CASES CONSOLIDATED FOR TRIAL ORDER OF COURT AND NOW, this 15th day of August, 1995, the Court directs that the above two cases be consolidated for trial and that the argument scheduled for tomorrow bo cancelled. The parties are directed to appear for a pretrial conference on Wednesday, August 23rd, 1995, at a time scheduled by the Court Administrator's Office. By the court, 11 (lC.) f. S/V--_.. Harold E. Sheely, P.J. Alvin H. Blitz, Esquire For Baron II e..ok.""", ~L.(. ,,/ ~ IjqS ~ -u ....!.',... - Timothy M. Anstine, Esquire For Technical Services Associates, Inc. Court Administrator :lfh ., I I \ I .:1 4. TSA flied a Motion for Judgment on the Pleadings and a Praecipe listing the Motion for argument on October 14, 1994. 5. On December 30, 1994, a Court Order denying the Motion for Judgment was granted by Judge J. Wesley Oler, Jr. 6. Thereafter, TSA commenced an separate action for Declaratory Judgment against Baron II in this Court on March 29, 1995, for excess rental payments paid by TSA to Baron II pursuant to the Lease Agreement. Said action is docketed in this Court at No. 95.1602. 7. Baron II filed an Answer with New Matter to TSA's Complaint on May IS, 1995. 8. On June 7, 1995, TSA filed a Praecipe Listing the Case for Trial. 9. Baron II, through its Complaint, avers that TSA owes operational costs in the amount of $3,823.00, pursuant to section 29.2.1 of the l.ease Agreement. 10. TSA, through its complaint, avers that Baron II owes a refund in the amount of $9,088.35 plus excess operating expenses in the amount of $1,184.00, basr.d on the amount of square feet actual leased since 1991. 11. A consolidation of these two actions will not prejudice any substantial rights of any party to the actions and will be desirable for the following reasons: (a) the actions pending involve the same transaction, a Lease Agreement voluntarily entered into by both parties; (b) consideration of these two actions concurrently will eliminate duplication of efforts which would otherwise arise as a result of the nexus between the two actions; (c) consolidation of these two actions will eliminate the need for two jury trails at which, as a result of the same t~ansaction, witnesses called and testimony presented will be substantially similar, if not identical. 2 LAW CJPPlCl!8 SAIDIS, GlJIDO, SHurr II MASLAND 26 W HIOH STRBIlT CARLlRLB, pdlNA. 1701) PHONB (717) Z43-6m CERTIFIED COPY, @ A~~' ~! ~e86 IIAf{ON i I. Plaintiff I N THE COURT 01" COMMON Pl,E;AS CUMBERLAND COUN'l'Y, PENNSYLVANIA NO. Y4-4773 ClVlL TERM j' TKt:HNlCAL SERVICES A:>SOCII\'rES, INC., Oflfendant AC'l'ION ~'OR DECLARATORY JUDGMENT DEFENDANT. S.. PRETRIA~ ~TATEME~ 1. STATEMENT OF FACTS 'l'his dispute involves the construct ion of a Commercial Lease entered into by the Plaintiff as Landlord, and the Defendant as Tenant, for 6,293 square feet of of tic" space on the first floor of d building situate in Upper Allen Township, Cumberland County, Pennsylvania. The Commercial Lease was executed Oil t\pril 18, 1991, and 11a'l an initial term of five (~) years followi.ng the .Cummencement Date", as defined in the Lease. The Commercial Lease wau pI"epared by the Plaintiff, and is attached to the Plaintiff's Complaint as Exhibit "1\". The Plaintiff .initiated this action seeking a declaratory, judgment regar.ding the interpretation of the pl'l)Visions of the Lease I"equiring the Tenant to pay as additional rent a share of the hu i ld i ng operat ing expenses, paragraph 7.9. The operative provision df pat.agI'aph 29 is paragraph 29.2.1, wh iell reads as follows: Tenant shall pay Tenant's proportionate Share for increases in Operating Expenses dudng each Operating Year to the extflnt that sa id Operating Expenses sha I J exceed tile Operating Expenses incurred by Landlord during the Base Period; however, this amount due nnd payable is limited to three (]'l percent of the average base rent payable under tl1 is Lease plus <lny previou~; year's additional rent. tf v. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA DOCKET NO. 1994 q 'I" 1/ 1-1 -:J (' I C" e. j, ll/I"'-" ACTION FOR DECLARATORY JUDGMENT BARON II, a Pennsylvania partnarshlp, Plaintiff TECHNICAL SERVICES ASSOCIATES,INC" Defendant NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth In the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing In writing with the Court your defenses or objections to the claims set forth against you. You are warned that If you fall to do so the case may proceed without you and a Judgment may be entered against you by the Court without further notice for any money claimed In the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights Important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: Dauphin County Court Administrator Dauphin County Courthouse Harrisburg, PA 17101 NOTICIA Le han demandado a usted en la corte. SI usted qulere defenderse de estas demandas expuestas en las paglnas sigulentes, usted tiene vlente (20) dlas de plazo al partir de la fecha de la demanda y la notiflcaclon, Usted debe presentar una aparlencla escrlta 0 en persona 0 por abogado y archlvar en la corte en forma escrlta sus defensas 0 sus obJeclones alas demandas en contra de su persona. Sea avlsado que sl usted no se deflende, la corte tomara medidas y puede entrar una orden contra usted sin prevlo avlso o noliflcacion y por cualquier quaja 0 allvlo que as pedido en la petlclon de demanda. Usted puede perder dlnero 0 sus propiedades 0 otros derechos Importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO IMMEDIATAMENTE, SI NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO. VAYA EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUEN:rRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL Dauphin County Lawyer Referral Service 213 North Front Street Harrisburg, PA 17101 5. Seotlon 29.2.1 of the lease agreement provides: Tenant shall pay Tenant's proportionate Share for increases in Operating Expenses during each Operating Year to the extent that said Operating Expenses shall exceed the Operating Expenses Incurred by Landlord during the Base Period; however, this amount due and payable Is limited to three (3%) pElrcent of the average base rent payable under this Lease plus any previous year's additional rent. e. The parties Intended ~ 29.2,1 to calculate InO{eases for operating expenses by "- multiplying the annual base rent by .03, and addl~ls product to the prior years' addlllonal rent to equal the total amount due and payable. (This amount Is hereafter referred to as the "Plaintiff's calculation'). 7, The Plaintiff's calculation can be illustrated as follows: + Base period rent ($5,376.oo/month x 12) = $64,512,00 x .03 (cap) = $1,935.00 Prior year's additional rent of $1,888,00 New calculated rent cap of ($1,935,00 + $1,888.00) = $3,823.00 8. TSA asserts that under ~ 29.2.1, Increases for operating expenses are calculated by adding the annual base rent to the previous years' additional rent and this sum Is then multiplied by .03 to equal the total amount due and payable. (The amount Is hereafter referred to as the 'Defendant's calculation'). 2 9. The Defendant's calculation can be Illustrated as follows: Base period rent ($5,376.00/month x 12) = $64,512.00 + Prior year's additional rent of $1,888.00 New calculated rent cap of ($66,400.00 x .03) = $1,992.00 10. By letter dated May 4, 1994, Baron II provided TSA with a detailed analysis of the 1993 actual operating costs for the premises and requested that a fee of $3,880.00 representing TSA's portion of these expenses be paid by June 1, 1994. 11. By letter dated May 18, 1994, TSA refused to pay the amount Baron II requested, and offered instead to pay only $1,992.00 of the operational costs. 12. Because the operational cost fee Is past due and the parties have expressed differing Interpretations of Section 29,2.1, there exists an actual controversy which requires Judicial Interpretation from this Honorable Court. 13. The Interpretation of ~ 29.2,1 will affect the amount of rent due under the lease for the several remaining years of the lease. WHEREFORE. Baron II respectfully requests that this Honorable Court enter an order awarding Baron II operational costs contribution from TSA In the amount of $3,823.00; providing that Baron II's Interpretation of Section 29.2.1 of the lease agreement shall be Implemented throughout the remainder of the lease agreement; 3 VERIFICATION I verify that the statements made in the fOlegoing Complaint are true and correct. I understand that false statements made herein are subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. ()f; Ie CARL J. O'A VIS Date: tlltl'!" , , , ' , " I I. I awarding of counsel fees, Interest, and costs to Baron II; and directing such other and further relief as may be appropriate. , , ; j , , " Respectfully submitted, HETRICK, ZALESKI, ERNICO .' 10 South Market Square P.O. Box 1265 Harrisburg, PA 17108-1265 ATTORNEYS FOR PLAINTIFF Date:t:'rl /~ /f1'! 4 . , , - . . . COMMERCIAL LEASE THIS COMMERCIAL LEASE ("Lease"), made this l..11!!:.. day of April, 1991, by and between BARON IX ("Landlord"), a Pennsylvania partnership with a principal office at 931 North Front street, Harrisburg, Dauphin County, Pennsylvania and TECHNICAL SERVXCES ASSOCIATES, INC. ("Tenant"), a corporation with their principal ottice at 360 Wire Road, York, PA 17402. WIT N E SSE T H: WHEREAS, Landlord is the owner of Lot No.1, Final subdivision Plan of The Baron Group, which said real estate is situate in Upper Allen Township, Cumberland County, Pennsylvania; and WHEREAS, Landlord has constructed on said Lot No. 1 a two (2) story commercial office building ("Building"); and WHEREAS, Tenant desires to lease 6293 square feet situate on the first tloor of the Building under and subject to the terms and conditions hereinafter provided; and WHEREAS, Landlord desires to let to Tenant the same under and subject to the terms and conditions hereinafter provided; and WHEREAS, the parties desire to confirm their understanding in writing. NOW, THEREFORE, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Recitals. The recitals set forth above are incorporated herein by reference. 2. Description of Leased Premises. Landlord hereby leases to Tenant and Tenant hereby lets from Landlord 6293 square feet situated on the first floor of the Building, hereinafter referred to as the "Leased Premises", a plan of which is outlined in red on Exhibit "A" attached hereto and made a part hereof, together with the rights, privileges and appurtenances belonging thereto, including, without limitation, the right of ingress and egress thereto, the right in common with others to use the lobbies, elevators, common passageways, stairs, vestibules and parking al-eas of the Building. The Building contains 20,000 rentable square feet, in the aggregate. IXHIIIT "A" M....'.". ""'__ " 3. Term. The term of this Lease ("Lease Term") is approximately five (5) years commencing on the commencement date ("Commencement Datell) which shall be the later ':Jf: (i) July 1, 1991, or (ii) the tenth (loth) calendar day following the date of written notice to Tenant of Substantial Completion (as defined in section 5.4 below) and ending on the last day of the sixtieth (60th) full calendar month thereafter (e.g. if the Commencement Date is during July, 1991, the Lease Term will terminate on August 31, 1996) unless extended or sooner terminated as provided heroin. Upon the actual determination by Landlord of Commencement Date and, consequently, the Lease Term, Landlord and Tenant shall confirm in writing the Commencement Date and the termination date of the Lease and Tenant's acceptance of the Leased Premises by the execution of Exhibit "B" attached hereto and made part hereof. 4. Fixed Annual Rent; Refundable Deposit; Upgraded Improvements. Tenant shall, during the Lease Term, pay to Landlord as fixed annual rent in accordance with the following schedule (the "Fixed Annual Rent") and payable in consecutive equal monthly installments as indicated, in advance, on the first day of each month during Lease Term at the principal office of Landlord, 931 North Front Street, Harrisburg, Pennsylvania, 17102, or such other address as Landlord may, from time to time, designate in writing. ~ First Second Third Fourth Fifth ANNUAL RENT $62,930.00 64,503.00 66,077.00 67,650.00 69,223.00 MQRTHLY RENT $ 5,245.00 5,376.00 5,507.00 5,638.00 5,769.00 If the Lease Term commences on a date other than the first day of a calendar month, the Fixed Annual Rental for such first fractional month shall be such proportion on the monthly installment as the number of days in such fractional month bears to the total number of days in the calendar month. Each consecutive monthly installment of Fixed Annual Rental shall be payable to Landlord without demand, deduction or set-off except as specifically provided herein. Landlord acknowledges receipt of a sum of Eleven Thousand Fourteen Dollars ($11,014.00) paid by Tenant which said sum shall be considered a security deposit. 5. Improvements. 5.1 Landlord shall provide space planning services for the Leased Premises. As a condition to the commencement of the Lease Term, Landlord shall, at its sole cost and expense, provide and construct the perimeter walls, floors, ceilings and other improvements in quantity as set forth on Exhibit "A", attached hereto, (collectively the "Building Standard Improvemonts" or "Improvements"). The quality of said Improvements would be similar to those finished levels as on the second floor of the Building. 2 5.2 Landlord shall commence work on the Improvements promptly upon the execution of this Lease and will substantially complete said work by June 30, 1991 (the "Scheduled Completion Date") . Any substantial deviation from the Building Standard Improvements of the Plans and Specifications shall be permitted only upon the prior written authorization of Tenant. Notwithstanding the foregoing, Landlord reserves the right, in its discretion, to make changes in Specifications provided that thG substituted material is equal to or better than the material for which it is being substituted. 5.3 Engineering services rendered with respect to the Improvements and any changes therein shall be performed by Landlord's engineer. The construction of the Improvements shall be done by Landlord's general contractor or, in the case of computers, telephones and other communication systems, by contractors Relected by Tenant and reasonably satisfactory to Landlord, the cost of which shall be paid by Tenant. Landlord shall be responsible for obtaining all permits and approvals in connection with the construction of the Improvements. Notwithstanding the foregoing, Tenant shall pay for all engineering fees required in connection with a special HVAC zoning specifications requested by Tenant. 5.4 The Leased Premises shall be deemed to be Substantially Completed ("Substantially Completed" or "Substantial Completion") when: (a) all utility services to be furnished hereunder are available for use; and (b) all of the improvements have been completed, except for (i) minor items as identified in a "punch list" created pursuant to Section 5.6 hereof or items of construction or furnishing by Landlord of a nature not necessary to make the Leased Premises reasonably tenantable for Tenant's use as stated herein, or (ii) office or computer equipment to be installed or furnished by Tenant; and (c) Landlord shall have obtained and delivered to Tenant a copy of the Certificate of Occupancy relc.ting to the Leased Premises issued by Upper Allen Township. 5.5 All construction work performed in connection with the Improvements shall be done in a good and workmanlike manner and in compliance with all applicable laws, ordinances, regUlations and orders of governmental authority having jurisdiction over the BUilding with all applicable codes of all insurers of the Building. 5.6 Prior to occupancy of the Leased Premises by Tenant and within ten (10) days after the Leased Premises are Substantially Completed, Tenant shall identify, in writing, the minor items of construction yet to be completed by Landlord of a nature commonly found on a "punch list" (as that term is commonly used in the construction industry), which Landlord shall correct or complete promptly and diligently. After the Commencement Date, Landlord, its agents or contractors may enter the Leased Premises from time to time to complete unfinished details and adjustments and shall do so with reasonable dispatch and without material interference with the conduct of Tenant's business. 3 5.7 Tenant shall be entitled to enter upon the Leased Premises during the course of Landlord's construction for the purpose of inspection, taking measurements and doing whatever may be appr.opriate to prepare the Leased Premises for Tenant's occupancy, provided, however, that such entry shall not substantially interfere with or delay Landlord's work. No such entry shall be deemed an acceptance of possession by Tenant. 5.8 Landlord warrants and shall be responsible for arid shall make any repairs made necessary be defects in the workmanship, material or design of the Leased Premises and the Building, provided that Tenant shall promptly give notice to Landlord of any such defect upon Tenant's having knowledge thereof. This warranty shall expire one (1) year from the Commencement Date or, if later, the date on which such work was completed and except for any such warranties received from Landlord's contractors, subcontractors, vendors or suppliers that by their terms are enforceable beyond such time. Landlord shall retain all warranties received from the contractors, subcontractors, vendors and suppliers; and Landlord shall be responsible for enforcing such warranties if they have been breached. 5.9 Prior to the Commencement Date, Landlord shall cooperate with any contractors engaged by Tenant for the installation of computers, telephones or other services for the Leased Premises. To the extent necessary or appropriate, Landlord shall coordinate its work with the work of such contractors, provided, however, that such contractors do not SUbstantially interfere with or delay Landlord's work. 6. Use. The Leased Premises may be used and occupied by Tenant for general office and administrative purposes and any other lawful use in connection therewith. Tenant shall not use or permit any use of the Leased Premises which creates any safety or environmental hazard or which would be dangerous to the Leased Premises, the Building or other tenants or occupants of the Building. Tenant shall not cause any equipment, file cabinets or any other item to be placed in any portion of the Leased Premises beyond the safe carrying capacities of the Building. 7. Alterations; Trade Fixtures. 7.1 During the Lease Term, including any renewal thereof, Tenant may make improvements to the Leased Premises and install trade fixtures and the electrical and plumbing connections to service trade fixtures, provided, however, that structural alterations, additions and improvements shall not be made without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. 7.2 Tenant shall use its best efforts to prevent any liens or obligations from being created against or imposed upon the Leased Premises, the Building or Lot No. 1 and agrees to discharge or bond all liens or charges created or imposed for services 4 rendered or materials furnished for which Tenant has contracted promptly after Tenant acquires knowledge of such liens or promptly after such charges become due and payable. 7.3 Upon the expiration or sooner termination of this Lease, to include the renewal, any additions, alterations or improvements made by Tenant to the Leased Premises shall be and remain Landlord's property lmless at the time that such alterations, additions or improvements are approved by Landlord, in writing, at Tenant I s request and Landlord agrees that upon the expiration or sooner termination of this Lease that said alteration, addition or improvement may be removed by Tenant, provided that Tenant, at its expense, repair any damages done to the Leased Premises as a result of said removal. 8. Signs; Directory. Tenant may, with Landlord's prior written consent, place business identification signs within the Building. Landlord shall, at its expense, construct an exterior business identification sign which said sign shall be constructed in accordance with the Upper Allen Township Zoning Ordinance. 9. Serviceu Provided by Landlord. Landlord shall, at its expense, provide the following services for the Leased Premises and the Building in accordance with services provided in similar buildings in the community: (A) Electricity, heat, ventilation, air conditioning, oil (electricity shall be separately metered and up to $1.60 per square foot per year of the electric costs shall be paid by the Landlord and Landlord shall supply all equipment for such electricity) and elevator service; each said service shall be provided each day during each calendar year on a 24-hour basis. (B) Snow and ice removal from the pavements, walkways, porches and parking areas. (C) Trash removal (of municipal waste - any hazardous waste shall be removed by Tenant at its expense), water and sewer. (D) Maintenance of any planters and planting in or outside the Building. With respect to the $1.60 cap on electricity costs whjch are paid by Landlord, costs over the $1.60 will be billed annually on the anniversary date of the Lease. The Tenant shall pay these costs with the next monthly rent payment. These costs are not included in the three (3%) percent cap of additional operating costs covered in Section 29. 10. Repairs and Maintenance. Landlord shall promptly make all repairs as and when required in and about the Leased Premises, including, without limitation, mechanical, electrical, HVAC, 5 plumbing and structural repairs, except for repairs which are required as a result of the fault or negligence of Tenant, its agents, employees, contractors, servants or invitees. Landlord shall commence and complete such repairs promptly and diligently and in any case within thirty (30) days, after written notice from Tenant, provided, however, that if the items requiring repair are of such a nature that failure to make such repair renders the Leased Premises untenantable, Landlord shall commence and complete such repair within forty-eight (48) hours after notice. If Landlord fails to make such repairs within the foregoing periods, Tenant may elect: Ca) to undertake such repairs and deduct the reasonabla cost thereof from the next monthly installment or installments of Fixed Annual Rent or Additional Rent due from Tenant to Landlord, provided, however, that Tenant shall not undertake such repairs if such condition reasonably cannot be cured within such thirty (30) day period and Landlord diligently commences such repairs within said thirty (30) day period and pursues completion of such repairs with diligence; or (b) if the failure to make such repairs renders the Leased Premises or any part thereof untenantable, to abata the rent in an amount equal to the rentable square feet affected thereby from the date that the Leased Premises become untenantable until such time as the Leased Premises become tenantable. In the event that rent is abated in good faith, Tenant shall not be considered in default of this terms of the Lease. 11. Insurance; Waiver of Subrogation. 11.1 The Landlord will insure the Leased Premises and the Building against fire and other casualties that are normally covered under standard comprehensive casualty insurance policies for similar buildings in the area where the Leased Premises are situated. All such policies shall be in an amount equal to the then full replacement value of. the Building. During the entire Lease Term, Landlord shall also maintain general public liability insurance against claims for personal injury, death or property damage occurring in, on or about the Leased Premises (to include the Building), such insurance to be in an amount of not less than One Million dollars ($1,000,000.00) combined for both bodily injury and physical damage as a result of anyone occurrence. 11.2 Tenant will, at all times during the Lease Term, maintain, at its sole cost and expense, general public liability insurance against claims for personal injury, death or property damage occurring in, on or about the Leased Premises, such insurance to be in an amount of not less than One Million dollars ($1,000,000.00) combined for both bodily injury and physical damage as a result of anyone occurrence. 11.3 All policies referred to in this Article 11 shall include a waiver by the insurer of all rights of subrogation against Tenant or Landlord, as the case may be, in connection with any loss or damage thereby insured against. In case of damage or injury or loss of use to personal property of Landlord or Tenant (in either case, the "Insured") by any cause within the scope of 6 such insurancQ, whether such damage be caused by negligence of the other party or by any party for whom such other party may be responsible or invitees for reimbursement to its insurer or to any third party against whom the Insured mar have a claim therefor. The foregoing provisions shall be effect ve only during such time as both of the Insured's insurance policies shall permit an executory waiver of subrogation without additional premium therefor. Each party shall use its best efforts to locate an insurer who will allow such a waiver of subrogation and this provision shall be effective until ten (10) days after written notice of the impossibility of obtaining or maintaining such insurance. 12. Personal Property. All personal property of every kind and description which may at any time be in the Leased Premises shall be at the Tenant's risk or of those claiming under Tenant, except that Landlord shall be liable for loss of or damage to such property if due to the negligence of Landlord, its agents, contractors, servants, employees or representatives or due to any default in Landlord's obligation to make repairs hereunder. 13. Damage to Persons and Property. Except as otherwise provided in Section 11 of this Lease, Tenant and Landlord covenant at all times to hold the other harmless from liability for damage and losses suffered by any person, persons or corporation for personal injury, including death, or damage to tangible property occurring at or in the Leased Premises and Building as a result of any act or omission on the part of the other, its agents, servants, employees or invitees and from all reasonable costs and expenses incurred by the other in connection therewith, provided that such damages are not, in whole or in part, caused by or attributable to negligence on the part of the other, its agents, servants, contractors, employees or invitees. Landlord or Tenant shall promptly notify the other, in writing, of any claim made for any such damage of loss and afford the other and its counsel the opportunity to contest, compromise or settle such claim. 14. Damage to Leased Premises. 14.1 In the event that all or part of the Leased Property is materially damaged by fire or other casualty, Landlord shall, with reasonable dispatch, repair the damage and restore the Leased Premises to substantially its condition prior to the occurrence of such damage. If the damage renders the Leased Premises untenantable in whole or in such part so that it is impracticable for Tenant to conduct its business therein, the Fixed Annual Rent and Additional Rent shall abate until the damage has been repaired. If the damage renders the Leased Premises untenantable in part but Tenant continues to occupy them in part, the Fixed Annual Rent and Additional Rent shall be proportionately reduced according to the nature and extent of the damage sustained until the damage has been repaired. 7 , ' 14.2 Notwithstanding anything to the contrary contained herein, if (1) the damage occurs less than one (1] year prior to the expiration of the Lease Term or the renewal term; or (2) if the damage is of such a nature or extent that, in the written opinion of an independent architect or engineer selected by Landlord and approved by Tenant (and received within thirty [30] days from the date of such casualty), more than 120 consecutive days from the date of such casualty would be required (with normal work crews and hours) to repair and restore the damaged portion of the Leased Premises, including such delays as might be reasonably anticipated for adjustment of insurance c:i:aims, planning, permitting and bidding before commencement of the work, then Tenant shall have the right to terminate this Lease by written notice to Landlord within thirty (30) days after receipt of such opinion, whereupon this Lease shall terminate on the date specified in such notice and Tenant and Landlord shall thereafter be relieved of all further obligations and liability hereunder. 15. Condemnation. In the event that the entire Leased Premises or any part thereof shall be taken or condemned by any governmental authority for public use or in the event that a portion of the Building necessary to the operation of Tenant I s business at the Leased Premises shall be so taken or condemned, then upon vesting of title to the same for such public use, this Lease shall terminate; and Tenant shall have no right to any proceeds of such condemnation, except that Tenant shall have the right to prove and collect from the condemning authority the value of the trade fixtures installed by it, for moving expenses and for other special damages. In the event of such termination of this Lease, all Fixed Annual Rent and Additional Rent paid in advance shall be apportioned as of the date of such termination. Notwithstanding the foregoing, in the event that only a part of the Leased Premises shall be so taken, there shall be a proportional reduction in the Fixed Annual Rent and Additional Rent based on the amount of square feet not so taken. 16. Subordination. This Lease is and shall be subordinate to a mortgage by and between Landlord and The York Bank ("Lender") which said Mortgage is recorded in the Office of the Recorder of Deeds of Cumberland County in Mortgage Book , Page ; and further, this Lease is and shall be subordinate to any and all future mortgages which encumber the Building (to include Lot No. 1 and the Leased Premises); and Tenant agrees to execute and delivery any instrument which may be required to reflect or affect such subordination, provided, with the exception of the above described construction/permanent mortgage by and between Landlord and Lender, for any future subordination each such mortgagee shall execute a written non-disturbance agree~ent in a form reasonably acceptable to Tenant which shall provide that so long as Tenant is not in default in the payment of any Annual Fixed Rent or Additional Rent or in the performance of any other obligations under this Lease beyond any applicable period of grace, such mortgagee shall recognize this Lease and in the event of any such default under such mortgage or foreclosure action, forced sale or other proceeding in connection therewith, the rights of Tenant under this 8 , , Lease and Tenant's possession of the Leased Premises shall not be disturbed and Tenant shall not be named as a defendant in any such proceeding in the event the holder of such mortgage or anyone claiming through such holder becomes owners of the Leased Premises, such holder or other owner shall accept Tenant as Tenant under this Lease. 17. Default 17.1 Tenant's Default The occurrence of any of the following shall constitute an Event of Default by Tenant: (i) Failure to pay a monthly installment of Fixed Annual Rent or Additional Rent or any other sum of money when due if the failure continues for ten (10) days after written notice has been given to Tenant by Landlord. (ii) Failure to perform any other provision of this Lease if the failure to perform is not cured within thirty (30) days after written notice has been given to Tenant. If the default cannot reasonably be cured within thirty (30) days, Tenant shall not be in default of this Lease if Tenant commences to cure the default within the thirty (30) day period and diligently and in good faith continues to cure the default, provided, however, that Landlord's interests in the Leased Premises are not prejudiced in the interim. Notices given under this Section shall specify the alleged default and shall demand that Tenant perform the provisions of this Lease or pay the re~t that is in arrears, as the case may be, within the applicable period of time. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord so elects in the notice. 17.2 Landlord's Remedies. Upon the occurrence of any Event of Default by Tenant, in addition to any other rights or remedies that Landlord may have under this Lease or at law or in equity, Tenant covenants and agrees that Landlord shall have the following rights: (i) To re-enter the Leased Premises and remove all persons and all or any property therefrom, either by summary dispossess proceedings or by any suitable action or proceeding at law or by force or otherwise, without being liable to indictment with all additions, alterations and improvements. Upon recovering possession of the Leased Premises by reason of or based upon or arising out of a default on the part of Tenant, Landlord may, at Landlord's option, either terminate this Lease or make such alterations and repairs as may be necessary in order to relet and/or operate the Leased Premises or any part or parts thereof, either in Landlord's name or otherwise, for a term or terms which may, at Landlord's option, be less than or exceed the period which 9 '., would otherwise have constituted the balance ot the Lease Term ot this Lease or renewal term and other terms and conditions as in Landlord's sole discretion seem bestl upon each such reletting all rents received by Landlord trom such reletting shall be applied: tirst to the payment ot any costs and expense ot such reletting, including brokerage tees and attorney's fees and all costs ot such alterations and repairs I second to the payment ot rent due and unpaid hereunder, and third to the payment of any indebtedness other than rent due hereunder trom Tenant to Landlord I and the residue, if any, shall be held by I,andlord and applied in payment of future rent as it may become due and payable hereunder. If such rentals received from such reletting during any month shall be less than that to be paid during that month by Tenant hereunder (including Additional Rent), Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of the Leased Premises or the making ot alterations and/or improvements thereto or the reletting thereof shall be construed as an election on the part of Landlord to terminate this Lease unless written notice of such intention be given to Tenant. Landlord shall in no event be liable in any way whatsoever for failure to relet the Leased premises or, in the event that the Leased Premises or any part or parts thereof are relet, for failure to collect the rent thereof under such reletting. ~enant, or Tenant and Tenant's successors and assigns, hereby irrevocably constitute and appoint Landlord as its or their agent to collect the rents due and to become due under all subleases of the Leased Premises or any parts hereof without in any way affecting Tenant's obligation to pay any unpaid balance of rent due or to become due hereunder. Notwithstanding any such reletting without termination, Landlord may, at any time thereafter, elect to terminate this Lease for such previous breach. (ii) To cure any default by Tenant at Tenant's cost. If Landlord at any time, by reason ot Tenant's default, pay any sum or does any act that requires the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid and if paid at a later date, shall bear interest at the rate of twelve (12%) perc~nt per annum from the date the sum is paid by Landlord until Landlord is reimbursed in full by Tenant. The sum, together with interest on it, shall be Additional Rent. (iii) To terminate this Lease and the Lease Term or the renewal term hereby created without any right on the part of Tenant, to waive the forteiture by payment of any sum due or by other performance of any condition, term or covenant broken, whereupon Landlord shall be entitled to recover, in addition to any and all sums and damages for violation of Tenant's obligations hereunder in existence at the time of such termination, damages for Tenant's default in an amount equal to the amount of the Annual Fixed Rent reserved for the balance of the term of this Lease, as well as all other charges, payments, costs and expenses herein agreed to be paid by Tenant, all discounted at the rate of six (6%) percent per annum to their then present worth, less the fair rental value of the Leased Premises for the remainder of said term, also 10 discounted at the rate of six (6%) percent per annum to its then present worth, all of which amount shall be immediately due and payable from Tenant to Landlord. (iv) When this Lease and the Lease Term or the renewal term hereof shall have been terminated on account of any default by Tenant hereunder and also when the Lease Term hereby created or the renewal term thereof shall have expired, it shall be lawful for any attorney of any court of record to appear as attorney for Tenant as well as for all persons claiming by, through or under Tenant and to sign any agreement for entering in any competent court an amicable action in ejectment against Tenant and all persons claiming by, through or under Tenant and herein confess judgment for the recovery by Landlord of possession of the Leased Premises so desired, an appropriate writ of possession may issue forthwith, without any prior writ or proceeding whatsoevet', provided that if for any reason after such action shall have been commenced, it shall be determined that possession of the Premises remain in or be restored to Tenant, Landlord shall have the right for the same default and upon any SUbsequent default or defaults or upon the termination of this Lease or Tenant's right of possession as hereinbefore set forth, to bring on a more further amicable action or actions as hereinbefore set forth to recover possession of the Leased Premises and confess judgment for the recovery of possession of the Leased Premises as hereinbefore provided. (v) In any amicable action of ejectment and/or for rent and/or other sums brought hereon, Landlord shall first cause to be filed in such action an affidavit made by Landlord or someone acting for Landlord setting forth the facts necessary to authorize the entry of judgment or which facts such affidavit shall be prima facie evidence, and if a true copy of this Lease (and of the truth of the copy such affidavit shall be sufficient evidence) shall be filed in such suit, action or actions, it shall not be necessary to file the original as a warrant to attorney, any rule of Court, custom or practice to the contrary notwithstanding. (vi) No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter at law or in equity or by statute. (vii) Tenant hereby waives and releases all errors and defects which may intervene in the Landlord's exercise of any of its remedies hereunder, including the summary remedies; Tenant further waives the right of inquisition on any real estate levied on, and Tenant voluntarily condemns the same and consents to an immediate execution upon any judgment obtained by Landlord; Tenant also waives and releases all relief from any and all appraisement, stay or exemption law of any state now in force or hereafter enacted; Tenant waives any notice to quit required by any law now in force or hereafter enacted; and Tenant waives its right to trial by jury. 11 18. Default by Landlord. If default is made by Landlord in the performance of the conditions or covenants of this Lease subjoct to Landlord's right to notice and cure, Tenant, in addition to all other remedies now or hereafter afforded or provided by law, may, at its election, perform such covenant or agreement for or on behalf of Landlord or make good any such default and any amount or amounts which Tenant shall advance pursuant thereto shall be repaid by Landlord to Tenant on demand; and if Landlord shall not repay any such amount or amounts upon demand, Tenant shall have the privilege of deducting the same from the next monthly installment together with interest at a rate of twelve (12\) percent per annum or installments of Fixed Annual Rent to be accrued under this Lease untll Tenant is reimbursed in full. 19 . Non-Waiver of Defaults. Any failure or neglect by either party to assert or enforce any rights or remedies because of any breach or default by the other hereunder shall not (except as when express time limited are provided for the taking of action) prejudice or affect their respective rights or remedies with respect to any subsequent breaches or defaults and shall not be construed as a waiver of their respective rights to assert and enforce any rights or remedies for subsequent breaches or defaults. 20. Notices. All notices or demands given or required to be given hereunder shall be in writing and shall be personally delivered or sent by Certified or Registered Mail, return receipt requested, postage prepaid, or by Federal Express or other overnight courier addressed to the parties at the respective addresses set forth below or at such other address as shall be designed in writing by the party to receive notice. Any such notice shall be deemed to have been given (a) if delivered or sent by any overnight mail service on the date received or Cb) three (3) days from receipt of delivery by certified or registered mail. For Landlord: Baron II 931 North Front street Harrisburg, PA 17102 Attention: Carl J. Davis For Tenant: Technical Services Associates, Inc. 360 wire Road York, PA 17402 Attention: David Wilson 21. Quiet Enjoyment. Landlord agrees that upon compliance with the terms and conditions of this Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the Lease Term, including the renewal term (if exercised). 22. Assignment and Slililetting. Tenant shall not assign this Lease or sublet all or any part of the Leased Premises without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed, provided that any proposed assignment shall be conditioned on Landlord reasonably determining that the proposed assignee possesses the financial capability of 12 assuming Tenant's obligations hereunder. Notwithstanding the foregoing, without Landlord's consent, Tenant shall be permitted from time to time to sublet up to twenty (20%) percent, in the aggregate, of the Leased Premises and shall have the right, at any time during the last year of the Lease Term, including the last year of the renewal term, to assign this Lease or sublet all or any portion of the Leased Premises. Any value received by Tenant for such assignment or sublease in excess of the sum of the prorated Fixed Annual Rent and Additional Rent payable hereunder shall be the sole property of Tenant. Notwithstanding anything in this section 22 to the contrary, in the event Tenant assigns this Lease or subleases more than fifty (50%) percellt of the Leased Premises, Landlord shall be entitled to enter into a direct lease (the "New Lease") with such assignee or sublessee for the Leased Premises or portion thereof to be subleased by Tenant, as the case may b$, in which case (1) Tenant shall be relieved of all further obligations to Landlord under this Lease with respect to the portion of the Leased Premises covered by the New Lease; (2) Landlord shall be entitled to all rents, issues and profits arising under such New Lease; and (3) if Tenant has already entered into a new sublease with the sublessee, Landlord shall assume all of Tenant's obligations as sublessor under such new sublease and indemnify and hold harmless Tenant from and against all claims, damages, costs and suites arising under such new sublease. Landlord shall notify Tenant in writing of its election to enter into a New Lease within fifteen (15) business days after receipt of written notice from Tenant of its proposed assignment or sublease. A sublease from Tenant by a SUbsidiary or successor corporation, partnership or other entity in which Tenant or its principals are an owner shall not be deemed to be a sublease hereunder and is hereby approved by Landlord. 23. Binding Effect. This Lease shall be binding upon and shall insure to the benefit of the parties hereto, their respective successors, personal representatives and permitted assignees. 24. Entry by Landlord. Landlord, its employees, agents and contractors shall have the right to enter the Leased Premises at reasonable hours and upon reasonable notice for the purposes of performing the work and services required of Landlord under this Lease and of making inspections of the Leased Premises, provided, however, that such entry shall not unreasonably interfere with 'renant's use and enjoyment of the Leased Premises or the conduct of Tenant's business. Entry to the Leased Premises may be made at any time in the event of emergency. 25. Holding over. Should Tenant continue in possession of the Leased premises after the expiration of the Lease Term or the renewal term, Tenant shall become a Tenant from month-to-month and shall pay to Landlord for rent for each month during such tenancy a sum equal to the then-current monthly installment of the Fixed Annual Rent. Said month-to-month tenancy shall be terminable by either Landlord or Tenant upon thirty (30) days prior written notice. 13 '.. 26. Renewal option. 26.1 Tenant is granted the right and option (the "Renewal option") to extend the term of this Lease for one (1) additional period of three (3) years I and if such renewal is effectively exercised, such renewal term (the "Renewal Term") shall commence upon the expiration of the previous term of this Lease, provided that: 26.1.1 Such option must be exercised, if at all, by written notice from Tenant to Landlord giving at least 180 days prior to the expiration of the then current terml and 26.1.2 At the time of exercising such option, this Lease shall be in full force and effect, and there shall exist no default by Tenant which remains uncured beyond any applicable period of grace. 26.2 exercised, all shall continue In the event the foregoing option is effectively of the terms and conditions contained in this Lease to apply except that: 26.2.1 There shall be no further right of renewal beyond the period referred to above; and 26.2.2 the Fixed Rent applicable to the Demised PremJ,ses during any Renewal Term shall equal the then "Market Rate" of the Leased Premises determined as follows: At least sixty (60) days prior to the commencement of the Renewal Term, Landlord shall notify Tenant in writing of the Fixed Rent payable for the Renewal Term. Tenant shall have thirty (30) days thereafter to advise Landlord in writing if it does not agree to pay the Fixed Rent set forth in the Landlord's notice, in which event the Fixed Rent shall be determined as otherwise provided herein below. If Tenant fails to notify Landlord of its nonacceptance of the Fixed Rent within the prescribed time period, Tenant shall be deemed to have agreed to pay the Fixed Rent. In the event Landlord and Tenant are not able to agree on the Market Rate, the Market Rate shall be determined as follows: (a) Prior to the commencement date of the Renewal Term, Landlord and Tenant shall (i) each notify the other in writing of their determination of the Market Rate of the Demised Premiss and (ii) Landlord shall provide Tenant with the names and qualifications of three (3) appraisers who are acceptable to Landlord. Each appraiser shall be MAI certified and have a minimum of five (5) years experience in the same geographical area as that in which the Demised Premiss is located and in real estate leasing and appraisal with respect to real estate which is of similar kind to the Demised Premises. Tenant shall, within ten (10) days thereafter, 14 (0) (d) (b) select one of the three (3) appraisers and shall notify Landlord in writing of this selection. The parties shall share equally the cost of the appraiser. The "Market Rate" shall be the prevailing renewal rate for the Building as of the commencement of the Renewal Term for tenancies of space of similar size and term and adjusted on a square foot basis and inclUding a market determination of additional rent on account of taxes and operating expenses (to be paid throughout the Renewal Term in accordance with the general formulations contained in this Lease), it being the intention that the Market Rate shall be net to Landlord of taxes and operation expenses allocable to the space in question. It is the intent of the parties that the Base Period for the Renewal Term be 1996. The appraiser selected under clause 2 (a) above shall determine whether the Landlord's or the Tenant's determination of the Market Rate so determined to be the most correct by the appraiser shall be used for purposes of calculating the Fixed Rent during the Renewal Term, provided that in no event shall the Fixed Rent be reduced below that previously payable hereunder immediately prior to the Renewal Term. The foregoing determination shall be final, conclusive and binding on Landlord and Tenant. Tenant shall pay as Fixed Rent during the Renewal Term an amount equal to the Market Rate so determined. In the event either Tenant or Landlord is not satisfied with the appraised rate, either Tenant or Landlord may terminate the Lease within 180 days written notice of either Tenant or Landlord's dissatisfaction. 26.3 If the Market Rate is not determined prior to the commencement of the Renewal Term, then Tenant shall continue to pay to Landlord the Fixed Rent applicable to the Demised Premises immediately prior to such Renewal Term until the Market Rate is determined; and when it is determined, Tenant shall pay to Landlord, within ten (10) days after receipt of such notice, the difference between the rent actually paid by Tenant to Landlord and the new rent determined hereunder. This determination shall be final, conclusive and binding on Landlord and Tenant. 26.4 In the event Tenant fails to exercise the foregoing option in the manner and withi.n the time period set forth herein, this Lease shall automatically terminate at the end of the then current term, this Renewal Option shall lapse and Tenant shall have no further right or option to extend the term of this Lease. 15 .. 27. Surrender. upon the expiration or sooner termination of the Lease Term or the Renewal Term, Tenant's right of possession shall terminate, and Tenant shall quit and surrender the Leased Premises to Landlord in as good a state and condition as existed as of the Commencement Date, ordinary wear and tear accepted. 28. Severability. If any term or provision of this Lease shall to any extent be held invalid, illegal or otherwise unenforcoable, the remaining tenns and provisions of this Lease ~hall not be affected thereby; but each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 29. Additional Rent. shall be payable by Tenant Section 29. 29.1 The following terms shall have the meanings set forth in this Section 29: Additional Rent ("Additional Rent") under this Lease as set forth in this 29.1.1 "Base Costs" shall mean the actual Operating Expenses (as hereinafter defined) and the actual Taxes (hereinafter defined) incurred during the Base Period (as hereinafter defined), provided, however, in the event that the Building is not fully occupied during any portion of the Base Period, the actual operating Expenses incurred shall be adjusted to equal to the operating Expenses that Landlord would have incurred had the Building been fully occupied during the Base Period. 29.1.2 "Base Period" shall mean the calendar year 1991 or the first full calendar year after occupancy should the Commencement Date be after July 1, 1991. The "Base Period" for the Renewal Term, in the event that Tenant shall exercise its right to renew, shall be the calendar year 1996. 29.1. 3 "operating Expenses" shall mean the aggregate of all reasonable actual out-of-pocket cost expenses incurred by Landlord in repairing, maintaining and operating the Building and shall include but not be limited to: (1) charges for water, sewer, gas, steam fuel, electricity and other utilities furnished to the Building (excluding utilities paid for by Tenant or other tenants such as may be sub-metered or separately metered pursuant to this Lease or other tenant leases); (2) all insurance premiums; (3) the reasonable cost of building management, labor, superintendents and other administrative costs (not to exceed, in the aggregate, four [4%] percent of the gross rental income at full occupancy of the Building); (4) equipment engineers and (5) materials, supplies and labor for maintenance, cleaning, repair and operation of the Building, to include, but not be limited to, snow removal, lawn care, window cleaning and janitorial service. 16 , 29.1. 4 "Operating Year" shall mean each calendar year or such other period of twelve (12) months as hereinafter may be adopted by Landlord as its fiscal year occurring during the Lease Term or, in the event that Tenant shall exercise its option to renew, during the Renewal Term. 29.1.5 "Taxes" shall mean all taxes actually paid, assessments and governmental charges, whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building of the land or their operation (without giving effect to any existing tax abatement). Taxes shall not include income taxes, excess profit taxes, franchise taxes or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or Lot No.1, provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included within Taxes as defin~d herein to the extent of such substitution. Landlord agrees that for and with respect to any special taxes or special assessments: (1) Landlord shall elect the longest period of time allowed by the authority imposing the tax or assessment in which to pay installments thereof, and (2) the amount of such special taxes or special assessments shall be capitalized over the useful life of the improvements to which the special tax or special assessment is attributable, and (3) Tenant shall not be required to pay as Additional Rent the capitalized amount of such special taxes or special assessments which extends beyond the Lease Term (inClUding the Renewal Term). 29.1.6 "Tenant's Proportionate Share" shall mean a fraction, the numerator of which shall be the rentable square feet of the Leased Premises (being 6293 rentable square feet) and the denominator of which is 20,000 rentable square feet, which is the aggregate rentable square feet in the Building, and, expressed as a percentage, shall be thirty-two (32%) percent. 29.2 There shall be no Additional Rent payable with respect to the period between the Commencement Date and July 31, 1992. From and after July 1, 1992: 29.2.1 Tenant shall pay Tenant I s proportionate Share for increases in Operating Expenses during each Operating Year to the extent that said operating Expenses shall exceed the Operating Expenses incurred by Landlord during the Base Period; however, this amount due and payable is limited to three (3%) percent of the average base rent payable under this Lease plus any previous year's additional rent. 29.2.2 As soon as available in each Operating Year after the Base Period during the Lease Term or Renewal Term, J.f applicable, Landlord shall provide Tenant with the line item comparison of the Base Period Base Costs and a projection of Tenant's Proportionate Share of Operating Expenses for such 17 Operating Year. commencing on the first day of the first month following receipt of such line item comparison (in each case a "Payment Adjustment Date") and continuing until receipt by Tenant of Landlord's statement of the next proj ected Tenant's proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Annual Rent an amount equal to one-twelfth (1/12th) of the excess of such projected Tenant's Proportionate Share of operating Expenses over the Base Period Base Costs. In addition on each Payment Adjustment Date, Tenant shall pay to Landlord a lump sum amount equal to that portion of the excess of Tenant's Proportionate Share of Operating Expenses over the Base Period Base Costs attributable to the period commencing from the first day of the current Operating Year and ending on the relevant Payment Adjustment Date, less any amount already paid by Tenant during such period on account of Tenant's Proportionate Share of Operating Expenses. 29.2.3 Landlord shall, as soon as possibl~ after the clol3e of each such Operating Year, provide Tenant with a statement of the actual operating Expenses for such period. Any underpayment by Tenant during such Operating Expenses shall be paid to Landlord within thirty (30) days after Tenant I s receipt of a statement for such deficiency. Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant hereunder. 29.3 In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year or was not in operation during such entire year, the Operating Expenses shall be adjusted by Landlord to reflect the amount that such expense would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been one hundred (100%) percent occupied and operational throughout such year; but in no case shall the Additional Rent be greater than the actual Operating Expenses incurred by LanQlord. 29.4 Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then prorated on the basis of the number of days of occupancy. 29.5 Landlord agrees to keep and maintain books and records showing the Base Period and subsequent Taxes and Operating Expenses for each year in accordance with generally accepted accounting principles consistently applied, and the same shall be retained intact throughout the Lease Term, inclUding the renewal thereof. Tenant shall have the right, at all reasonable times and at its sole expense, to audit Landlord's books and records relating to this Lease for any year or years for which Additional Rent payments become due. 18 29.6 If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant shall be made promptly after its determination. 29.7 with respect to Taxes, the Base Period for county and township (to include library and other miscellaneous taxes) shall be the calendar year 1991 or the first full calendar year after occupancy should the Commencement Date be after July 1, 1991. The Base Period for school district real estate taxes shall be the fiscal year commencing July 1, 1991, and terminating June 30, 1992. Upon receipt of the county and township real estate tax notice after the Base Period, Landlord shall pay the same during the face period; and Tenant shall pay Tenant's proportionate Share of the increase over the Base Period for such taxes. Likewise, when Landlord shall receive the school district real estate tax notice after the Base period, which shall be paid during the face period, Tenant shall be billed and shall pay Tenant's proportionate Share of the increase of such school district real estate taxes over the Base Period. Tenant shall pay Tenant's Proportionate Share of the increases in county and township real estate taxes and school district real estate taxes within thirty (30) days after Landlord shall bill Tenant for such increase. In the event that the county and township real estate taxes or school district real estate taxes or both are decreased, there shall be no reduction in the amount of Fixed Annual Rent, Additional Rent or Operating Expenses or otherwise. The real estate tax adjustment, as herein provided, shall be prorated, based on the calendar or fiscal year of the taxing authority, during the final year of the Lease Term or Renewal Term, if applicable. The real estate tax adjustment, as herein provided, shall be payable as Additional Rent and shall be in addition to the adjustment for Operating Expenses. 30. Late Charges. Any monthly installment of Fixed Annual Rent or any installment or payment due with respect to Additional Rent not paid within fifteen (15) days of the date when due shall be subject to a late charge in the amount of four (4%) percent of such late payment and if not paid within thirty (30) days from the date due, shall bear interests at the rate of twelve (12%) percent per annum until p~id in full. 31. Rules and Regulations. Landlord may, from time to time, establish reasonable rules and regulations for the safety, care and operation of the Building. Such rules and regulations shall form a part of this Lease from and after the date Tenant receives notice thereof. Rules and regulations established by Landlord shall not be arbitrary and shall be enforced equally against all tenants in the Building. 32. Memorandum of Lease. Landlord and Tenant shall execute a Memorandum of Lease setting forth the provisions of this Lease which said Memorandum of Lease shall be recorded in the Office of the Recorder of Deeds of Cumberland County at Landlord's expense. 19 ': 33. Parking Spaces. Landlord shall provide, in connection with the construction of the Buildinq, a total of one hundred (100) striped and paved parking spaces which shall be available for use by Tenant in common with other tenants and occupants of the Building. Said parking spaces shall not be assigned to any tenant except that Landlord reserves the right, at its option, to designate ten (10) parking spaces as "visitors parking". 34. Entire Agreement. This Lease, including all Exhibits attached hereto each of which is incorporated in this Lease, contains the entire agreement of the parties hereto and any representations, inducements, promises or agreements, oral or otherwise, not embodied herein shall be of no force or effect. This Lease and the Exhibits may be altered, amended or revoked only by a subsequent instrument in writing signed by duly authorized representatives of Landlord and Tenant. 35. Headings. Headings in this Lease are inserted for convenience only and are not to be construed as a part of this Lease and shall not, in any way, be construed as definitive of or limited to the scope or intent of the provisions hereof. 36. Governing Law. This Lease shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have caused this Commercial Lease to be executed the day and year first above written. WITNESS: LANDLORD: Baron II, a Pennsylvania general partnership The Baron Group, General Partner i \~ Mlli"1 /iJn1.10il/,\' (SEAL) By: Carl . Davis, Managing Partner of The Baron Group WITNESS: , TENANT: Technica~l. Se vices /...-:: ,- / / /, Associates, Inc. ," / .' / ' / / / ~,'.("."" ';//(/11 ,~ATTEST) David Wilson, }'secretary, TSA, Inc. David Wilson, 'r-/I,jr;/ President By: 20 " " COMMERCIAL LEASE BETWEEN BARON II (LANDIDRD) AND TECHNICAL SERVICES ASSOCIATES, INC. (TENANT) EXHIBIT "c" BUILDING STANDARD IMPROVEMENTS PLANS AND SPECIFICATIONS The Building Standard improvements Plans and Specitications consist of the following: //"11) ,L ; I//:- 1'1 C:-')\, 7 J Cylvlf LI r,/ ) (/~/I::.- .fl'/-f-IE CF ).j F0i( 1.-1/'\ r2 h' IIV /) . I!-/II/) uvN . C:'e;.1JJ'C:/t:IlICC 1M '-'72 LV i-/) //1......\ VI 0 , /!:, vi 1.-/) I Ale. 4 7- which shall be initialled and dated by Landlord and Tenant and shall be incorporated in this Commercial Lease by this reterence. 23 TECHNICAL SERVICES ASSOCIATES,INC" PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V, BARON II, DEFENDANT 95-1602 CIVIL TERM .......... -................ .................... ---- ...... ............ ................-....................-........ ............. ............................ ............................................. ................... BARON II, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V, TECHNICAL SERVICES ASSOCIATES, INC., DEFENDANT 94-4733 CIVIL TERM / ORDER OF COURT AND NOW, this 30th day of January, 1996, upon agreement of counsel for all parties, the non-jury trial scheduled for February 1, 1996, IS CANCELLED and rescheduled for Wednesday, June 12, 1996, at 8:45 a.m" in COlJrtroom Number 2. By the court?' ~ Edgar B, Bayley, J ~ Edward E, Guido, Esquire For Plaintiff/Defendant ,/jlhrc . ' ,,~ 1 ' - t\,~"-,,,,~~l. ,l Anthony J. Nestico, Esquire For Defendant/Plaintiff :saa . " '>. c:> ;- r'" c.:' '. " .1 . . , t:! . '- l:f" .., '. , Ci ., r.,.: .. "'. c.-' " , r.:", ~ ("1 " I t",_. ., ..... , .' I '.:.) c Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 94 4733 BARON II, v. TECHNICAL SERVICES ASSOCIATES, INC., ACTION FOR DECLARATORY JUDGMENT Defendant PRAECIPE TO DlSl\JISS TO THE PROfHONOTARY: Please dismiss the above-captioned matter with prejudice. ECKERT SEAMANS CHERIN " MELLOTT /L~. ] Anthony J, ico, squire Supreme Ct. 1.0. #58868 One South Market Square Building 213 Market Street Harrisburg, PA 17101 (717) 237.6000 Attorneys for Plaintiff, Baron II DATED: ,. J... ,~ ., t~ ,. ., iY; t'::) c.; I',: .,. ::: ; .s " "I " Ul.-, . ~i' g. "I: t'" ,~j 1.._" '.J.. ~jf; '1"-' ": ,~;'i ~( 'I-~ I I ".f::;. , I'-HIJ [1:;1' V: . '.n a.. -, 1''' ." 5 ::1 ".., c... ~ 0