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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.
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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
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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 .~
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TBCHNICAL SBRVICBS
ASSOCIATBS, INC.,
Defendant
BARON II, a I
Pennsylvania Partnership, I
Plaintiff I
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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 '"
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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 ~
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-
Timothy M. Anstine, Esquire
For Technical Services Associates, Inc.
Court Administrator
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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'!"
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awarding of counsel fees, Interest, and costs to Baron II; and directing such other and
further relief as may be appropriate.
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Respectfully submitted,
HETRICK, ZALESKI, ERNICO
.'
10 South Market Square
P.O. Box 1265
Harrisburg, PA 17108-1265
ATTORNEYS FOR PLAINTIFF
Date:t:'rl /~ /f1'!
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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.
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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.
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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
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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.
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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
/...-::
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Associates, Inc.
," /
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/ / /
~,'.("."" ';//(/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:
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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
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Anthony J. Nestico, Esquire
For Defendant/Plaintiff
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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... ,~
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