EXHIBIT 10.47
BUILD-TO-SUIT OFFICE LEASE AGREEMENT
BETWEEN ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
AND
PENNSYLVANIA CELLULAR TELEPHONE CORP.
BUILD-TO-SUIT OFFICE LEASE AGREEMENT
BY AND AMONG
▇▇▇▇▇ ▇▇▇▇▇▇▇ NO. 33, L.P., A PENNSYLVANIA LIMITED PARTNERSHIP, LANDLORD
PENNSYLVANIA CELLULAR TELEPHONE CORP., A NORTH CAROLINA CORPORATION AUTHORIZED
TO TRANSACT BUSINESS IN PENNSYLVANIA, TENANT
▇▇▇▇▇, ▇▇▇▇▇▇▇ & COMPANY, AN ILLINOIS CORPORATION, CONTRACTOR
SUSQUEHANNA TOWNSHIP, DAUPHIN COUNTY, PENNSYLVANIA
DATED AS OF SEPTEMBER 26, 1997
TABLE OF CONTENTS
ARTICLE 1 TERM OF LEASE 2
Section 1.1 Initial Term 2
Section 1.2 Initial Term Commencement Date 3
Section 1.3 Options to Renew 3
Section 1.4 Exercise of Options to Renew 3
Section 1.5 Land Acquisition Contingency 4
ARTICLE 2 CONSTRUCTION OF LANDLORD'S IMPROVEMENTS 4
Section 2.1 Construction of Building and Interior Improvements 4
Section 2.2 Approval of Final Plans and Specifications 6
(a) Preliminary Plans for Base Building 6
(b) Delivery of Final Plans for Base Building,
Initial Interior Build-Out and Expansion Improvements
(if any), Approval of Components 6
Section 2.3 Scope of Work 8
Section 2.4 Changes in Work 9
Section 2.5 Completion of Improvements 10
(a) Completion Dates 10
(b) Permitted Delays 11
(c) Effect of Permitted Delays 12
(d) Substantial Completion 12
Section 2.6 Tenant's Remedies for Landlord Delay in
Completion of Initial Improvements 12
Section 2.7 Warranty 13
Section 2.8 Punch List 14
Section 2.9 Indemnity 14
(a) Indemnity for Liens 14
(b) Indemnity for Personal Injury and Property Damage 15
(c) Required Notification by Tenant 15
Section 2.10 Early Access 15
(a) Early Access 15
(b) Tenant Cooperation 16
(c) Tenant Indemnity 16
ARTICLE 2A EXPANSION OF DEMISED PREMISES 17
Section 2A.1 Option to Expand 17
(a) Exercise of Right to Expand 17
(b) Exercise of Right to Expand; Delivery of Expansion Notice 17
(c) Specifications of Expansion Improvements 18
(d) Contents of Expansion Notice 18
(e) Landlord's Proposal 18
(f) Tenant's Notice to Proceed 18
(g) Automatic Election to Exercise Renewal Terms 19
Section 2A.2 Preparation of Expansion Plans 19
Section 2A.3 Expansion Commencement Date 19
Section 2A.4 Scope of Work; Expansion Improvements 20
Section 2A.5 Expansion Change Orders 20
Section 2A.6 Warranty as to Expansion Improvements 20
Section 2A.7 Expansion Punch List 20
Section 2A.8 Limitation on Landlord's Obligations 20
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ARTICLE 2B OPTION TO PURCHASE DEMISED PREMISES 20
Section 2B.1 Purchase Option 21
Section 2B.2 Exercise of Purchase Option 21
Section 2B.3 Examination of Title 21
Section 2B.4 Conveyance of Title 22
Section 2B.5 Purchase Option Closing 23
Section 2B.6 Restriction on Transfer; Time of the Essence 23
Section 2B.7 Condemnation During Purchase Option Period 23
Section 2B.8 Other Closing Documents 23
Section 2B.9 Casualty Loss During Purchase Option Period 24
ARTICLE 3 RENT 24
Section 3.1 Base Rent 24
(a) Payment of Base Rent) 24
(b) Initial Improvements Base Rent During Initial Term 24
(c) Initial Improvements Base Rent During Renewal Terms 25
(d) Expansion Improvements Base Rent During Initial Term 25
(e) Expansion Improvements Base Rent During Renewal Terms 25
(f) Determination of Fair Market Base Rent 25
(g) Determination of Expansion Improvements Base Rent
During Initial Term and Renewal Term 26
(h) Definition of Expansion Costs 27
Section 3.2 Proration of Base Rent; Absolute Net 27
Section 3.3 Additional Rent 27
Section 3.4 Rent Payable Without Prior Demand; Maximum
Rate of Interest 28
ARTICLE 4 PAYMENT OF TAXES, ASSESSMENTS, ETC. 28
Section 4.1 Additional Rent 28
Section 4.2 Taxes on Rent 29
Section 4.3 Receipts for Impositions 30
Section 4.4 Additional Rent Escrow 30
Section 4.5 Landlord's Right to Contest Impositions 30
ARTICLE 5 INSURANCE 31
Section 5.1 Landlord's Insurance 31
(a) Property Insurance 31
(b) Commercial Liability Insurance 32
(c) Business Interruption Including Extra Expense
(Loss of Rents and Extra Expense 32
(d) Insurance Companies 32
Section 5.2 Tenant's Insurance 32
(a) Property Insurance 32
(b) General Liability Insurance 33
(c) Worker's Compensation Insurance 33
(d) Insurance Approval 33
(e) Cancellation Notice 33
Section 5.3 Contractor's Insurance 33
(a) Landlord's Contractors 33
(b) Tenant's Contractors 34
Section 5.4 Waiver of Subrogation 34
Section 5.5 Requirements in Event of Loss 34
Section 5.6 Proceeds, Payment and Policy Provisions 34
ARTICLE 6 USE, MAINTENANCE AND MANAGEMENT OF DEMISED PREMISES 35
Section 6.1 Premises Use 35
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Section 6.2 Tenant's Repairs, Maintenance and Replacements 35
Section 6.3 Prohibition Against Waste 36
Section 6.4 Misuse or Neglect 36
Section 6.5 Management of Demised Premises 37
Section 6.6 Limitation on Tenant's Repairs and Maintenance;
Capital Replacements 37
ARTICLE 7 COMPLIANCE WITH LAWS AND ORDINANCES 37
Section 7.1 Compliance 38
Section 7.2 Other Compliance 38
Section 7.3 Environmental Matters 38
(a) Landlord, Contractor and Tenant Mutual Covenants 38
(b) Definitions 38
(c) Landlord Representation; Landlord Indemnity 39
(d) Contractor Indemnity 40
(e) Tenant Covenant; Tenant Indemnity 40
(f) Notice 40
(g) Exclusive Remedy and Survival 41
(h) Compliance with Other Laws 41
(i) Storage of Hazardous Materials 41
(j) Environmental Audits 41
ARTICLE 8 MECHANIC'S LIENS AND OTHER LIENS 42
Section 8.1 Liens and Right of Contest 42
Section 8.2 Liens on Landlord's and Contractor's Work 43
Section 8.3 Other Liens 43
ARTICLE 9 INTENT OF PARTIES 43
Section 9.1 Net Rent 43
Section 9.2 Landlord's Performance for Tenant 43
Section 9.3 Payment for Landlord's Performance for Tenant 44
ARTICLE 10 DEFAULTS AND LANDLORD'S REMEDIES 44
Section 10.1 Default 44
Section 10.2 Rent After Default 45
Section 10.3 Re-Letting After Default 45
Section 10.4 Acceptance After Default; No-Waiver 46
Section 10.5 Remedies Cumulative 46
Section 10.6 Landlord Default 46
ARTICLE 11 DESTRUCTION AND RESTORATION 47
Section 11.1 Restoration 47
Section 11.2 Insurance Proceeds 47
Section 11.3 Continuance of Tenant's Obligations 48
ARTICLE 12 CONDEMNATION 48
Section 12.1 Total Condemnation 48
Section 12.2 Partial Condemnation 48
Section 12.3 Restoration After Condemnation 49
Section 12.4 Base Rent Reduction 49
ARTICLE 13 ASSIGNMENT, SUBLETTING, ETC. 49
Section 13. Permitted Transferee of Tenant 49
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Section 13.2 Subsequent Assignments 49
Section 13.3 Profit 50
Section 13.4 Ineffective Assignment 50
ARTICLE 14 SUBORDINATION, NON-DISTURBANCE, NOTICE TO
MORTGAGEE AND ATTORNMENT 50
Section 14.1 Subordination 50
Section 14.2 Mortgagee Protection Clause 50
Section 14.3 Attornment 51
Section 14.4 Costs 51
ARTICLE 15 SIGNS 51
Section 15.1 Signs 51
ARTICLE 16 TRADE FIXTURES 51
Section 16.1 Trade Fixtures 51
ARTICLE 17 CHANGES AND ALTERATIONS 52
Section 17.1 Changes and Alterations 52
ARTICLE 18 SURRENDER OF PREMISES 54
Section 18.1 Surrender of Possession 54
Section 18.2 No Surrender Without Acceptance 55
Section 18.3 Removal of Tenant's Property; Holdover Rent 55
ARTICLE 19 MISCELLANEOUS PROVISIONS 56
Section 19.1 Right of Inspection 56
Section 19.2 Display of Demised Premises 56
Section 19.3 Indemnities 56
(a) Tenant 56
(b) Landlord 57
Section 19.4 Notices 57
Section 19.5 Authorized Individuals 58
Section 19.6 Quiet Enjoyment 58
Section 19.7 Landlord and Successors 58
Section 19.8 Limitation on Landlord's Liability 59
Section 19.9 Estoppels 59
Section 19.10 Severability; Governing Laws 59
Section 19.11 Binding Effect 59
Section 19.12 Captions 59
Section 19.13 Landlord - Tenant Relationship 59
Section 19.14 Merger of Agreements 60
Section 19.15 Landlord's Property 60
Section 19.16 Survival 60
Section 19.17 Tenant's Claims 60
Section 19.18 Reasonableness 60
Section 19.19 Real Estate Broker 60
Section 19.20 Delivery of Corporate Documents 61
Section 19.21 Exhibits; Rider Provisions 61
Section 19.22 Attorneys' Fees 61
Section 19.23 Time is of the Essence 61
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GLOSSARY OF TERMS
Defined Term Section/Paragraph
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ADA Section 2.2(b)
Additional Rent Section 4.1(a)
Arbitrator Section 2.11
Architect Section 2.1
Base Rent Section 3.1(a)
Building Components Section 2.2(b)
Business Interruption Insurance Section 5.1(c)
Capital Replacement Section 6.7
Change Order Section 2.4
Change Order Base Rent Section 2.4
Change Order Cost Section 2.4
Commercial Liability Insurance Section 5.1(b)
Compliance with Laws Section 7.1
Contractor Introductory Paragraph
CPI Index Section 3.1(g)
Default Section 10.1
Demised Premises Paragraph D
Delivery Date Section 1.2
Design Team Section 2.1
Early Access Section 2.10(a)
Environmental Condition(s) Section 7.3(b)(i)
Environmental Laws Section 7.3(b)(ii)
Environmental Liability(ies) Section 7.3(b)(iii)
Estoppel Letter Section 19.9
Expansion Architect Section 2A.2
Expansion Commencement Date Section 2A.3
Expansion Costs Section 3.1(h)
Expansion Delivery Date Section 3.1(g)
Expansion Improvements Section 2A.1(a)
Expansion Improvements Base Rent Section 3.1(a)
Improvements Warranty Period Section 2A.6
Expansion Land Cost Section 3.1(h)
Expansion Notice Section 2A.1(b)
Expansion Option Section 2A.1(a)
Fair Market Base Rent Section 3.1(f)
Fair Market Escalator Section 3.1(c)
Final Expansion Plans Section 2A.2
Final Plans Section 2.1
First Renewal Term Section 1.3
Fourth Renewal Term Section 1.3
Hazardous Substances Section 7.3(b)(iv)
Impositions Section 4.1
Improvements Paragraph D
Initial Improvements Paragraph B
Initial Improvements Base Rent Section 3.1(a)
Initial Improvements Warranty Period Section 2.7
Initial Improvements Warranty Work Section 2.7
Initial Interior Build-Out Paragraph D
Initial Term Section 1.1
Initial Term Commencement Date Section 1.1
Initial Term Termination Date Section 1.1
Land Paragraph A
Land Development Plans Section 2.1
Landlord Introductory Paragraph
Landlord's Improvements Paragraph B
Landlord's Manager Section 6.6(a)
Landlord's Proposal Section 3.1(f)
Landlord's Repairs and Maintenance Section 6.3
Lease Introductory Paragraph
Lease Year Section 3.1(b)
Lender's Architect Section 2.5(d)
Management Fee Section 6.6(a)
Maximum Rate of Interest Section 3.4
Mortgage Section 14.1
Mortgagee Section 14.2
New Work Section 17.1
Notice to Proceed Section 2A.1(f)
Park Paragraph A
Park Assessments Section 4.1
Permit Date Section 1.5
Permits and Approvals Section 1.5
Permitted Delay Section 2.5(b)
Permitted Encumbrances Paragraph A
Permitted Use Section 6.1
Preliminary Plans and Specifications Section 2.1
Premises Use Section 6.1
Proceedings Section 12.1
Property Insurance Section 5.1(a)
Punch List Items Section 2.8
Purchase Option Section 2B.1
Purchase Option Closing Section 2B.5
Purchase Option Closing Date Section 2B.5
Purchase Option Deposit Section 2B.2
Purchase Option Exercise Notice Section 2B.2
Purchase Option Price Section 2B.1
Real Estate Agreement Section 1.5
Real Estate Date Section 1.5
Recovery Period Section 6.6
Renewal Cut-Off Section 1.4
Renewal Notice Section 1.4
Renewal Term(s) Section 1.3
Rent Section 3.3
Restoration Section 11.1
Scope Change Section 2.4
Second Renewal Term Section 1.3
Special Assessments Section 4.1
Submitted Resolution Section 2.11
Subordination Agreement Section 14.1
Substantially Complete/Substantial Completion Section 2.5(d)
Tenant Introductory Paragraph
Tenant Extension Section 2.5(b)(i)
Tenant Work Section 2.10(a)
Tenant's Broker Section 19.19
Tenant's Repair Costs Section 6.6(a)
Tenant's Repairs and Maintenance Section 6.2
Term Section 1.3
Third Renewal Term Section 1.3
Township Paragraph A
Trade Fixtures Paragraph D
BUILD-TO-SUIT OFFICE LEASE AGREEMENT
------------------------------------
This Build-To-Suit Office Lease Agreement ("Lease") is made this 26/th/ day
of September, 1997, by and among ▇▇▇▇▇ ▇▇▇▇▇▇▇ NO. 33, L.P., a Pennsylvania
limited partnership ("Landlord"), PENNSYLVANIA CELLULAR TELEPHONE CORP., a North
Carolina corporation authorized to transact business in Pennsylvania ("Tenant"),
and ▇▇▇▇▇, ▇▇▇▇▇▇▇ & COMPANY, an Illinois corporation ("Contractor"). Anything
in this Lease to the contrary notwithstanding, (a) Contractor's obligations
hereunder are strictly limited to those set forth in paragraphs B and E hereof
and in Sections 1.5, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 5.3,
7.3(a), 7.3(b), 7.3(d), 7.3(f), 19.4, 19.5, 19.10, 19.11, 19.12, 19.13, 19.14,
19.16, 19.18, 19.21, 19.22 and 19.23 hereof, with respect to the design and
construction of the Initial Improvements (as such term is defined in paragraph B
hereof), those certain warranty obligations with respect to such construction,
those certain indemnification obligations in connection with environmental
matters, and certain miscellaneous matters; and (b) Contractor shall not be
liable under this Lease, directly or indirectly, except as and to the extent
specifically set forth in the foregoing enumerated Sections hereof (although
Contractor shall be entitled to all of its rights as set forth under such
Sections and elsewhere in this Lease), provided that nothing herein shall be
construed as limiting the Tenant from bringing an action or pursuing a remedy
under this Lease, at law or in equity, against the Landlord regardless of
whether (i) Tenant has a direct right under the Lease to pursue an action
against the Contractor or (ii) the Landlord is deemed to have waived its rights
against the Contractor under the terms of the foregoing provisions.
Recitals
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A. Tenant desires to lease from Landlord that certain parcel of vacant
land comprised of approximately 10.5 acres, located in Susquehanna Township,
Dauphin County, Pennsylvania ("Township"), which parcel is legally described in
Exhibit A-1 attached hereto and made a part hereof ("Land"), together with those
certain improvements to be constructed thereon in accordance with this Lease.
The Land is situated in that certain business park located in the Township and
known as Commerce Park ("Park"). Title to the Land is, and shall be, subject to
the encumbrances and other matters set forth in Exhibit A-2 attached hereto and
made a part hereof ("Permitted Encumbrances").
B. The parties have agreed that Landlord shall cause Contractor to
construct, and that Contractor shall construct, initial improvements on the Land
consisting of a four (4)-story office facility to be comprised of approximately
81,859 square feet ("Initial Improvements"). The parties have also agreed that
Tenant will have the option, pursuant to this Lease, to cause Landlord to
construct (or to cause to be constructed) the Expansion Improvements (as such
term is defined in Section 2A.1(a) hereof). The Initial Improvements and the
Expansion Improvements (if any), together, are hereinafter collectively referred
to as "Landlord's Improvements." Construction of the Initial Improvements, and
Landlord's and Contractor's respective obligations with respect thereto, shall
be as set forth in this Lease. Construction of the Expansion Improvements, and
Landlord's obligations with respect thereto (Contractor having no obligations
with respect to the Expansion Improvements), shall also be as set forth in this
Lease. Further, the parties have agreed that Tenant shall have certain rights to
renew the term of this Lease, as also set forth herein.
C. Landlord, for and in consideration of the rents, covenants and
agreements hereinafter contained, hereby leases, rents, lets and demises unto
Tenant, and Tenant does hereby take and hire, upon and subject to the conditions
and limitations hereinafter expressed, the Land, together with all improvements
located thereon and to be constructed thereon from time to time pursuant to the
terms, provisions and conditions hereof (including, without limitation,
Landlord's Improvements), subject to the Permitted Encumbrances.
D. Landlord's Improvements and all other improvements, machinery,
equipment, fixtures and other property, real, personal or mixed, from time to
time installed or located on the Land (except those items of Tenant's attached
or unattached personalty which are deemed to be trade fixtures, as described in
Article 16 hereof ("Trade Fixtures")), together with all additions, alterations
and replacements thereof, are hereinafter collectively referred to as
"Improvements." The Land and the Improvements are hereinafter collectively
referred to as "Demised Premises." The initial interior improvements to be
constructed in the Initial Improvements, as described further in Section 2.1
hereof, are hereinafter referred to as "Initial Interior Build-Out." Anything in
this Lease to the contrary notwithstanding, (i) "Landlord's Improvements" and,
therefore, "Improvements" and "Demised Premises," shall include, without
limitation, the "Initial Improvements" and the "Expansion Improvements," if any,
and (ii) the "Initial Improvements" shall include, without limitation, the
"Initial Interior Build-Out."
E. Tenant acknowledges that Landlord has contracted to purchase, but as
of the date of this Lease, does not own fee title to the Land. Accordingly,
anything in this Lease to the contrary notwithstanding, in the event that
Landlord does not acquire fee title to the Land, or in the event that Landlord's
acquisition of fee title to the Land is delayed, and (i) such failure or delay
is not a direct result of any breach by Landlord of its contract to purchase the
Land, and (ii) Landlord is diligent in pursuing its rights and remedies under
the terms of said contract, then neither Landlord nor Contractor shall be liable
for any damages or other remedies as a result of any failure or delay in their
respective obligations to Tenant under this Lease.
ARTICLE 1
TERM OF LEASE
SECTION 1.1 INITIAL TERM. Except as otherwise provided in this Lease, the
term of this Lease ("Initial Term") shall be for ten (10) years (subject to
renewal thereof as described in Section 1.3 hereof), commencing on the Initial
Term Commencement Date (as such term is defined in Section 1.2 hereof), and
ending on the date which is ten (10) years, less one (1) day, after the Initial
Term Commencement Date ("Initial Term Termination Date"). As of the date of this
Lease, Landlord and Tenant anticipate that the Initial Term Commencement Date
will be September 1, 1998, and that the Initial Term Termination Date will
therefore be August 31, 2008; provided, however, that nothing in this Lease
shall prevent the Initial Term Commencement Date from occurring prior to
September 1, 1998 (and the Initial Term Termination Date thereby occurring
earlier than August 31, 2008), but the Delivery Date (as described in Section
1.2) shall not be earlier than July 1, 1998. The Initial Term Commencement Date
and the Initial Term Termination Date are subject to adjustment as set forth in
this Article 1 and in Section 2.5 hereof, but in no instance shall the Initial
Term be less than ten (10) years, unless sooner terminated as provided herein.
The
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Initial Term shall commence ("Initial Term Commencement Date") on the Delivery
Date.
SECTION 1.2 DELIVERY DATE; INITIAL TERM COMMENCEMENT DATE. The "Delivery
Date" shall be the date on which all of the foregoing have occurred: (i) the
Landlord's Improvements have been Substantially Completed (as defined in Section
2.5(d)); (ii) a Certificate of Use for the Demised Premises has been obtained
from the Commonwealth of Pennsylvania Labor and Industry; (iii) a Certificate of
Occupancy for the Demised Premises has been obtained from the Township; (iv) the
Landlord and Tenant have (and to the extent they do not agree, the Architect, as
such term is defined in Section 2.1 hereof, has) established the Punch List
Items (as defined and provided in Section 2.8); and (v) Landlord has provided
Tenant with a Subordination, Non-Disturbance and Attornment Agreement, in the
form attached hereto as Exhibit 1.2, executed by each mortgagee or other
lienholder included in the Permitted Encumbrances. However, anything in this
Lease (including, without limitation, anything in this Section 1.2 or in Section
2.5 hereof) to the contrary notwithstanding, in the event that (a) Initial
Improvements have not been Substantially Completed, and (b) the Architect has
certified that, as of a date certain set forth in such certification, the
Initial Improvements would have been Substantially Completed, but for a Tenant
Extension (as such term is defined in Section 2.5(b)(i) hereof), then the
Initial Term Commencement Date shall nonetheless be deemed to have occurred on
the date certain set forth in the Architect's aforesaid certification.
Regardless of any other provision herein, the Delivery Date shall not be earlier
than July 1, 1998.
SECTION 1.3 OPTIONS TO RENEW. Subject to the terms, provisions and
conditions of this Lease, Tenant shall have four options to renew the term of
this Lease beyond the end of the Initial Term, the first three such renewal
options being for one five (5)-year period and the fourth renewal option being
for one four (4) year, eleven (11) month period, each, running consecutively
from the end of the prior period. In the event that Tenant exercises any or all
of such options to renew, and except as provided in Section 2A.1(g) hereof, the
time period from the day after the last day of the Initial Term through the date
which is five (5) years, less one (1) day, thereafter, is hereinafter referred
to as the "First Renewal Term," the time period from the day after the First
Renewal Term through the date which is five (5) years, less one (1) day,
thereafter, is hereinafter referred to as the "Second Renewal Term," the time
period from the Second Renewal Term through the date which is five (5) years,
less one (1) day, thereafter, is hereinafter referred to as the "Third Renewal
Term," and the period from the day after the Third Renewal Term through the date
which is four (4) years and eleven (11) months thereafter, is hereinafter
referred to as the "Fourth Renewal Term." The First Renewal Term, the Second
Renewal Term, the Third Renewal Term and the Fourth Renewal Term are sometimes
hereinafter individually referred to as a "Renewal Term," and are sometimes
hereinafter collectively referred to as "Renewal Terms." The Initial Term and
any and all Renewal Terms are sometimes hereinafter collectively referred to as
the "Term."
Except for modifications of Base Rent (as such term is defined in Section
3.1(a) hereof) pursuant to Section 3.1 hereof, and except as otherwise
specifically provided herein, the terms, provisions and conditions of this Lease
shall apply during each Renewal Term exercised by Tenant as hereafter provided
as and to the same extent as they apply during the Initial Term.
SECTION 1.4 EXERCISE OF OPTIONS TO RENEW. Subject to Section 3.1(c) hereof,
if Tenant wishes to exercise its options for any of the Renewal Terms, it shall
give written notice thereof ("Renewal Notice") to Landlord not later than twelve
(12) months prior to the expiration of the Initial Term or the Renewal Term then
in effect, as applicable, provided, however, that if Tenant
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shall fail to give any such notice within the aforesaid time limit, Tenant's
right to exercise its renewal option shall nevertheless continue until ("Renewal
Cut-Off") the first to occur of (i) thirty (30) days after Landlord shall have
given Tenant notice of Landlord's election to terminate such option, and (ii)
one hundred and twenty (120) days prior to the expiration of that portion of the
Term then in effect, and Tenant may exercise such option at any time until the
Renewal Cut-Off. It shall be a condition to the exercise and effectiveness of
each option for a Renewal Term that Tenant shall not be in Default (as such term
is defined in Section 10.1 hereof) of any of the terms, provisions or conditions
of this Lease, either at the time of delivery of the Renewal Notice in question,
or at the commencement of the Renewal Term in question; provided, however, that
Landlord shall have the right, in its sole discretion, to waive any such Default
for purposes of Tenant's exercise of the subject Renewal Term. Notwithstanding
the foregoing, Tenant shall not be permitted to exercise its right to the Second
Renewal Term and to each succeeding Renewal Term unless Tenant has exercised its
right to the First Renewal Term and the Renewal Term preceding the one Tenant is
then electing to exercise.
Anything in this Lease to the contrary notwithstanding, in the event Tenant
exercises its Expansion Option (as such term is defined in Section 2A.1(a)
hereof), then Tenant shall automatically and conclusively be deemed to have
exercised an option to renew as provided in Section 2A.1(g), provided that
Tenant shall have the right to withdraw its exercise of the Renewal Term, as
provided in Section 2A.1(g) in the event that the Landlord defaults in its
obligations under Section 2A.1 to construct the Expansion Improvements.
SECTION 1.5 LAND ACQUISITION CONTINGENCY. Landlord and Tenant acknowledge
and agree that Landlord has entered into that certain purchase and sale
agreement ("Real Estate Agreement"), pursuant to which Landlord has contracted
to acquire fee title to the Land from the current owner thereof, but the closing
of the purchase and sale thereunder as of the date hereof has not yet occurred.
Landlord shall diligently (i) proceed to close on the Real Estate Agreement, and
(ii) submit applications for subdivision approval, land development plan
approval, sewer and water permits, highway occupancy permits, a building permit
and all other governmental permits and approvals (the "Permits and Approvals")
required for the construction of the Demised Premises, and shall thereafter
diligently pursue receipt of such Permits and Approvals in final, nonappealable
form. In the event, (a) on or before December 31, 1997 ("Real Estate Date"),
Landlord fails to acquire fee title to the Land in accordance with the
provisions of the Real Estate Agreement as a result of a default of the seller
thereunder, or (b) on or before December 31, 1997 ("Permit Date") Landlord fails
to receive, after extending diligent efforts in respect thereto, the Permits and
Approvals (in final, nonappealable form) necessary to commence construction of
the Demised Premises, then, in either instance, Landlord shall advise Tenant of
the same, in writing, delivered by overnight delivery service within three (3)
business days thereafter. If Landlord has acquired title to the Real Estate
pursuant to the terms of the Real Estate Agreement prior to Real Estate Date,
but has not then acquired the all of the necessary Permits and Approvals prior
to the Permit Date, the Permit Date shall be deemed extended to January 31,
1998, and such extension shall be deemed a Permitted Delay. If fee title to the
Real Estate has not been acquired as aforesaid prior to the Real Estate Date or
the Permits and Approvals have not been received as aforesaid prior to the
Permit Date (extended, if at all, as aforesaid), then either Landlord or Tenant
shall have the right to terminate this Lease within thirty (30) days following
the receipt of Landlord's notice as aforesaid. Notwithstanding the foregoing, if
either the Real Estate Date or the Permit Date (extended, if at all, as
aforesaid) have lapsed without Landlord, respectively, acquiring fee title to
the Real Estate or
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receiving the Permits and Approvals, each as aforesaid, solely because of the
failure of the Landlord to diligently pursue fulfillment thereof, then the
Landlord shall pay to the Tenant the amount of Five Hundred Thousand Dollars
($500,000.00), as liquidated damages incurred by Tenant resulting from such
failure of the Landlord, if either Landlord or Tenant Terminate this Lease as
above provided. The parties hereto have fully negotiated the provisions of this
Section 1.5 with respect to liquidated damages, as well as the balance of the
terms, provisions and conditions of this Lease, free from any duress or other
undue influence. Having determined that the actual amount of any losses which
Tenant would incur as a result of the unwillingness of the Landlord to extend
diligent efforts to close on the Real Estate Agreement and obtain the Permits
and Approvals prior to, respectively, the Real Estate Date and Permit Date
(extended, if at all, as aforesaid) would be difficult, if not impossible to
ascertain, the parties have, independently and in good faith, determined that
the foregoing liquidated damages are a fair and reasonable estimation of and
basis for any losses. The foregoing liquidated damages shall be in lieu of (and
not in addition to) any other rights or remedies which Tenant would otherwise
have at law or in equity.
ARTICLE 2
CONSTRUCTION OF LANDLORD'S IMPROVEMENTS
SECTION 2.1 PRELIMINARY PLANS - CERTAIN REIMBURSEMENTS. As set forth in
paragraph B of the Recitals, the Initial Improvements shall consist of a four
(4)-story office facility to be comprised of approximately 81,859 square feet.
Attached hereto and made a part hereof as Exhibit 2.1 is a list describing or
identifying certain plans and specifications comprised of (i) final civil
engineering plans (that, as a component of the Final Plans, as hereafter
defined, have been approved by Landlord, Tenant and Contractor, which component
is hereafter referred to as "Land Development Plans"), (ii) preliminary base
building plans for the Initial Improvements, including structural engineering
plans, building elevations, interior and exterior architectural plans, and
specifications, and (iii) outline performance specifications with respect to the
Initial Improvements, including specifications for the civil, architectural,
structural, electrical systems, plumbing systems, heating, ventilating and air
conditioning systems, fire protection systems, and landscaping in and around the
Initial Improvements (collectively, in respect to clauses (ii) and (iii),
"Preliminary Plans and Specifications"). The Preliminary Plans and
Specifications are in detail satisfactory (given the fact that they are only
preliminary) to Landlord, Contractor and Tenant, and depict the Initial
Improvements which Landlord will cause Contractor to construct, and which
Contractor will construct, on the Land for the benefit of Tenant, subject to
finalization and preparation of the Final Plans and all in accordance with this
Article 2.
Landlord shall cause all of the remaining components of the Final Plans to
be prepared by VOA Associates, Inc. of Washington, DC (the "Architect"), ▇. ▇.
▇▇▇▇▇▇ & Associates, Inc. and/or Environmental Systems Design, Inc., as
applicable (collectively, "Design Team"). Each of the Components of the Final
Plans shall be delivered to Tenant for approval, in accordance with Section 2.2
hereof.
Within ten (10) days of the date of this Lease, Landlord shall reimburse
Tenant for (i) Twenty-Three Thousand One Hundred Forty-Two and 23/100 Dollars
($23,142.23) previously paid by Tenant to the Architect, and (ii) Fifteen
Thousand and No/100 Dollars ($15,000.00) previously paid by Tenant to Tenant's
Broker (as defined in Section 19.19). Within thirty (30) days after the
5
Initial Term Commencement Date, Landlord shall pay to Tenant the amount of
$84,000.00 as a reimbursement of Tenant's moving and related expenses.
SECTION 2.2 APPROVAL OF FINAL PLANS AND SPECIFICATIONS.
(a) Land Development and Preliminary Plans Approval. As of the date
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hereof, Tenant has reviewed and approved the Land Development Plans and all of
the Preliminary Plans and Specifications.
(b) Delivery of Final Plans and Expansion Improvements (if any); Approval
---------------------------------------------------------------------
of Components. Landlord shall deliver to Tenant each of the remaining
-------------
components of the Final Plans as soon as practicable after they have been
prepared, but in any event in that sequence set forth on the Schedule of Final
Plan Components attached hereto and made a part hereof as Exhibit 2.2(b). All of
the remaining components of the Final Plans consisting of plans and
specifications for architectural, structural engineering, landscaping, plumbing,
fire protection, heating, ventilating and air conditioning, and electrical shall
initially be delivered to Tenant for its approval or disapproval on or before
November 28, 1997. Those components of the Finals Plans described in the
preceding sentence are hereafter referred to as "Building Components."
Landlord shall cause the Design Team, as applicable, to deliver to Tenant,
the balance of the Final Plans as soon as practicable after they have been
prepared, but in any event not later than sixty (60) days following the approval
by Tenant of all of the components comprising the Building Components.
Landlord shall cause the Design Team to prepare all of the components of
the Final Plans in compliance with the provisions of Section 2.1 hereof and also
in accordance with (i) any and all laws, codes, ordinances, requirements,
standards, plats, plans, criteria, orders, directives, rules and regulations of
any and all applicable governmental authorities affecting the improvement,
alteration, use, maintenance, operation, occupancy, security, health, safety and
environmental condition of the Demised Premises, or any portion thereof,
including, without limitation, the Americans With Disabilities Act of 1990, as
amended from time to time, and any and all rules and regulations promulgated
pursuant thereto ("ADA"), except as provided in Section 2.3 hereof, (ii) any and
all covenants, restrictions, conditions, easements and other agreements of
record with respect to the Demised Premises, or any portion thereof, including,
without limitation, Park covenants, and any and all rules, regulations,
standards or criteria set forth or referenced therein or promulgated by the Park
association or any other governing body or entity exercising jurisdiction over
the Park, and (iii) all permits, licenses, certificates, authorizations and
approvals required in connection with any of the foregoing. All of the Final
Plans shall be consistent with the Preliminary Plans and Specifications, and
shall be reasonably satisfactory to Landlord. Notwithstanding the foregoing, in
the event there is a change in any law, code, ordinance, requirement, standard,
plat, plan, criteria, order, directive, rule or regulation of any or all
applicable governmental authority having jurisdiction over the Initial
Improvements that is passed, enacted or otherwise enforced for the first time
subsequent to the date of this Lease that requires a modification to either the
Final Plans or a substantial deviation from the Preliminary Plans and
Specifications (if the Final Plans are not yet approved), the reasonable cost
thereof shall be deemed a Change Order Cost (as hereafter defined), the time to
effectuate such change shall be a Permitted Delay and Landlord and Tenant shall
execute Change Order in respect thereto.
6
Within five (5) business days after Landlord's initial delivery to Tenant
of each component of the Final Plans, Tenant shall either approve or disapprove
each such component, provided that Landlord has provided such component, in the
sequence provided in the Schedule of Final Plan Components attached hereto as
Exhibit 2.2(b). If at any time Tenant disapproves a component, it shall notify
Landlord thereof in writing, detailing with reasonable specificity that portion
or element of the component disapproved and the reasons for such disapproval.
Tenant shall not withhold its approval of any submitted component, unless such
submitted component fails to comply substantially with the Preliminary Plans and
Specifications. Further, Tenant shall not act in an arbitrary or capricious
fashion with respect to any disapproval of such components.
Upon Tenant's disapproval, if any, of a component, Landlord shall undertake
to have such disapproved component modified and shall resubmit the same to
Tenant. In each instance of disapproved components, Landlord shall have five (5)
business days to revise and resubmit each such component to Tenant. In each
instance of resubmitted components, Tenant shall have three (3) business days
within which to approve or disapprove (as aforesaid) each such resubmittal. Such
respective five (5)- and three (3)- business day sequences of resubmission and
approval or disapproval shall continue until all of the components comprising
the Final Plans (or of the Final Expansion Plans, as such term is defined below
in this Section 2.2(b), if applicable) have been approved by both Landlord and
Tenant. In the event that Tenant fails to approve or disapprove any component of
the Final Plans (or of the Final Expansion Plans, if applicable) within the
applicable time period set forth herein, then such failure shall constitute a
Tenant Extension hereunder.
When each component of the Final Plans has been approved in accordance with
this Section 2.2(b) Landlord and Tenant shall affix their respective signatures
or initials to a schedule or summary setting forth a description of such
component. Such approved components shall constitute all or a portion of the
"Final Plans" and shall be deemed to become a part of this Lease, as identified
on Exhibit 2.2(b)-1.
With respect to the Expansion Improvements (if any), Landlord shall cause
the Expansion Architect (as defined in Section 2A.2 hereof) to prepare
components of the base building and interior plans therefor ("Final Expansion
Plans"), and shall submit them to Tenant for its approval or disapproval, in
accordance with Section 2A.2 hereof and this (b). The Final Expansion Plans
shall be consistent with the Expansion Notice (as such term is defined in
Section 2A.1(b) hereof), and shall be reasonably satisfactory to Landlord.
Any revision to a submitted component of the Final Plans, which revision is
required to obtain Tenant's approval of the submitted component, and which, in
the Architect's reasonable opinion, would be a substantial deviation from the
Preliminary Plans and Specifications with respect to the Initial Improvements
(or the Expansion Notice with respect to the Expansion Improvements, if
applicable), shall be deemed to be a request by Tenant for a Change Order (as
such term is defined in Section 2.4 hereof). Landlord shall notify Tenant, in
writing, of any such determination by the Architect, and in such written
notification shall inform Tenant of Landlord's estimate of the change in
schedule, if any, in the completion of construction of the Initial Improvements
(or the Expansion Improvements, if applicable), and of any extra cost (or
savings) to Tenant resulting from the requested revision. Then, within ten (10)
business days after such notification, and if Tenant has not theretofore
withdrawn, in writing, its requested revision, a Change Order (as provided in
Section
7
2.4 hereof) shall automatically and conclusively be deemed to have been
approved. Provided, however, Landlord shall not be required to curtail any of
the construction of the Initial Improvements (or, as applicable, Expansion
Improvements) during the pendancy of Tenant's right to withdraw its requested
revisions, if such curtailment would have an adverse impact on the critical path
schedule for the Substantial Completion of the Initial Improvements.
SECTION 2.3 SCOPE OF WORK. Commencing promptly after the execution and
delivery of this Lease by all of the parties hereto, and continuing thereafter
following Landlord's and Tenant's approval of the remaining components of the
Final Plans, Landlord shall cause Contractor to furnish, and Contractor shall
furnish, at Landlord's sole cost and expense, all of the material, labor and
equipment as may be necessary for the commencement and completion of
construction of the Initial Improvements, as specified in the Land Development
Plans and, when approved as aforesaid, the remaining components of the Final
Plans. The Initial Improvements shall be constructed in a good and workmanlike
manner substantially in accordance with the Final Plans. In addition, Landlord
shall cause Contractor to complete, and Contractor shall complete all such
construction in substantial compliance with all applicable laws in effect as of
the date of this Lease. In the event that any materials specified in the Final
Plans are not reasonably available to Contractor, Landlord and Contractor
reserve the right to substitute materials of higher or equal quality.
Because compliance with ADA requirements is predicated, in part, on
specific user requirements, Landlord, Contractor and Tenant acknowledge and
agree that all three of them bear certain responsibility, as described in this
Section 2.3, for assuring that the Final Plans are in compliance with the ADA.
As an integral part of Tenant's review of the Land Development Plans and the
Preliminary Plans and Specifications, and also during the review, submittal and
revision procedure set forth herein with respect to the remaining components of
the Final Plans, Tenant has informed Landlord and Contractor, and shall inform
Landlord and Contractor of Tenant's intended use of the Demised Premises. Among
other things, the preparation of the Land Development Plans, Preliminary Plans
and Specifications and the remaining components of the Final Plans by Design
Team is and will be based on the ADA requirements for the specific use of the
Demised Premises which Tenant shall make and of which Tenant advises Landlord
and Contractor, in writing. As a result of the foregoing, to the extent Tenant
changes the specific use of the Demised Premises from that which, in writing, it
advises Landlord and Contractor, Tenant shall be responsible for the Demised
Premises (to the extent, but only to the extent, required as a result of or in
connection with Tenant's changed use of the Demised Premises) being in
compliance with the ADA.
SECTION 2.4 CHANGES IN WORK. Although the same may constitute Tenant
Extensions hereunder, subject to this Section 2.4, Tenant, without invalidating
this Lease, may order changes in the work (or may be deemed to have ordered
changes in the work) consisting of additions to or deletions from, or other
revisions in, the Final Plans or a material deviation from the Preliminary Plans
and Specifications, if the Final Plans are not yet fully approved (or the Final
Expansion Plans, as such term is defined in Section 2A.2 hereof) with an
appropriate adjustment, if any, to the Delivery Date (or the Expansion Delivery
Date, as such term is defined in Section 2A.3 hereof), if applicable, or the
time for the preparation of components of the Final Plans (or the Final
Expansion Plans, if applicable), and with appropriate provisions for increases
or decreases in the Base Rent or the establishment of a payment obligation by
Tenant as herein provided. Such changes in the work consisting of the foregoing
addition or deletions or other revisions shall hereafter be referred to a
8
"Scope Change" or "Scope Changes." Any changes in work shall be authorized by a
written change order ("Change Order") which shall be executed as hereinafter
provided. Notwithstanding the foregoing, for the Initial Improvements only,
those Scope Changes requested by Tenant as aforesaid that have a Change Order
Cost (as hereafter defined) (i) not in excess of Five Thousand Dollars
($5,000.00) for any single Change Order, or (ii) not in excess of Ten Thousand
Dollars ($10,000.00) in the aggregate for all Change Orders shall be performed
by Landlord and Contractor at no additional charge or expense to Tenant.
A Change Order is a written order signed by Tenant (by an authorized
individual as provided in Section 19.5) and accepted in writing by Landlord or
Contractor (if applicable), stating in detail, among other things (as
appropriate) the change in the work, any adjustment in the Delivery Date (or the
Expansion Delivery Date, if applicable), or the time for the preparation of
components of the Final Plans (or the Final Expansion Plans, if applicable),
and, if appropriate, the additional payment obligation of the Tenant or the
increase or decrease in the Base Rent as a result thereof.
If a Change Order in respect to the Initial Improvements results in a
credit to Tenant, meaning that the Change Order Cost (as such term is defined
below in this Section 2.4) is less than the original charge for the work being
changed, the annual Base Rent for the Initial Term shall be decreased by an
amount calculated as follows: Change Order Cost multiplied by ten and 50/100ths
percent (10.50%). If a Change Order in respect to the Expansion Improvements
results in a Change Order Cost of less than the original charge for the work
being changed, Landlord shall pay to Tenant, within thirty (30) days following
the Expansion Commencement Date, the amount by which the Change Order Cost is
less than the original charge for the work being changed.
If a Change Order in respect to the Initial Improvements results in an
additional charge to Tenant greater than the original charge for the work being
changed, then for the first Seventy-Five Thousand and No/100 Dollars
($75,000.00) (except as provided in the first grammatical paragraph of this
Section 2.4) of the Change Order Costs (except as hereafter provided in respect
to compliance with ADA), in the aggregate, of all such additional Change Orders,
the annual Base Rent for the Initial Term shall be increased by an amount
calculated as follows: the applicable Change Order Cost multiplied by one
hundred seven percent (107%) which product shall be further multiplied by ten
and 50/100ths percent (10.50%). Such increase in the annual Base Rent is
hereafter referred to as "Change Order Base Rent." Notwithstanding the
foregoing, commencing in the second year of the Initial Term and for each year
thereafter in the Initial Term, the Change Order Base Rent shall be increased by
an amount equal to two percent (2%) of the preceding year's Change Order Base
Rent. Prior to the Delivery Date, Landlord and Tenant shall each execute a
written statement setting forth the amount, if any of Change Order Base Rent.
For Change Order Costs pertaining to compliance with ADA prior to the
Initial Term Commencement Date, the fee of seven percent (7%) of the Change
Order Costs in respect such compliance shall not be applicable or charged to
Tenant.
For all Change Order Costs (i) in respect to the Initial Improvements that
are additional charges to Tenant as aforesaid that are, in the aggregate, in
excess of Seventy-Five Thousand and No/100 Dollars ($75,000.00) (except as
provided in the first grammatical paragraph of this Section 2.4), and (ii) in
respect to the Expansion Improvements that are additional charges to Tenant as
aforesaid, Tenant, in the instance of clause (i) and (ii) above, shall pay to
Contractor such excess
9
Change Order Cost, plus a fee equal to seven percent (7%) of such excess Change
----
Order Costs (except for Change Order Costs pertaining to compliance with ADA in
respect to the Initial Improvements as provided above), within thirty (30) days
following the date Contractor invoices Tenant for the same, provided the work in
respect to such invoiced Change Order Costs has been satisfactorily completed in
respect to the amount invoiced. In the event of a dispute as to whether the
invoiced portion of the subject excess Change Order Costs have been
satisfactorily completed, the determination of the Architect, in the instance of
the Initial Improvements, and the Expansion Architect, in the instance of the
Expansion Improvements, in respect to such dispute shall be binding on Landlord,
Tenant and Contractor, as applicable.
A "Change Order Cost" shall be equal to the total increase or decrease in
costs resulting from the subject change (including, without limitation, any and
all design, permitting and other so-called "soft costs"). The actual costs of
the subject change shall be the aggregate of all payment obligations under those
contracts or modifications to contracts entered into by Landlord or Contractor
(if applicable), or their respective subcontractors, plus applicable general
conditions, which are necessary to effectuate the specific Change Order.
Anything in this Lease to the contrary notwithstanding, no Change Orders
which increase the scope of any work hereunder with respect to any of Landlord's
Improvements (i.e., either the Initial Improvements or the Expansion
Improvements) shall be effective, unless Landlord gives its prior written
consent thereto. Such consent may be given or withheld in Landlord's sole and
absolute discretion.
SECTION 2.5 COMPLETION OF IMPROVEMENTS.
(a) Completion Dates. It is anticipated that, subject to Permitted Delays
----------------
(as such term is defined in Section 2.5(b) hereof), the Initial Improvements
shall be Substantially Completed not later than September 1, 1998.
(b) Permitted Delays. The date for the Substantial Completion of any of
----------------
Landlord's Improvements, the Initial Term Commencement Date, the Expansion
Commencement Date, and any and all other intermediate target dates set forth in
this Lease, shall be extended if Landlord or Contractor, or any of their
respective employees, agents, contractors (including the Design Team),
subcontractors, sub-subcontractors or representatives, is delayed as a result of
any one or more of the following:
(i) any act, omission or neglect of Tenant, or of any employee, agent,
contractor, subcontractor, sub-subcontractor, agent or representative
of Tenant, including, without limitation, the failure to approve or
disapprove components of the Final Plans (or the Final Expansion
Plans, if applicable) in accordance with this Lease; the requesting or
negotiating of Change Orders; or the failure to timely complete the
Tenant Work ("Tenant Extension");
(ii) subject to Section 1.5 hereof, any failure or delay in Landlord's
acquisition of fee title to the Land, which failure is not a direct
result of
10
any breach by Landlord of the Real Estate Agreement;
(iii) any failure of or delay in the availability of any one or more public
utilities on the Land for the use of Landlord, Contractor or their
respective employees, agents, contractors, subcontractors, sub-
subcontractors or representatives subsequent to the commencement of
construction of the Demised Premises, other than due to the
negligence of the Landlord, Contractor or their respective employees,
agents, contractors, subcontractors or representatives;
(iv) any national strikes, labor disputes; or any delays or shortages
encountered in transportation, fuel, material or supplies that in the
instance of such delays or shortages are commercially unreasonable;
(v) any governmental embargo restrictions, or actions or inactions of
local, state or federal governments (including, without limitation,
any extraordinary delays in issuing building permits, certificates of
occupancy or other similar permits or certificates); or
(vi) any casualties, acts of God or the public enemy, or other acts or
occurrences beyond the reasonable control of Landlord or Contractor,
or their respective employees, agents, contractors, subcontractors,
sub-subcontractors or representatives, provided, any delays due to
inclement weather are not within the foregoing matters, unless such
weather conditions are in the form of extraordinary events such as
hurricanes, tornadoes or record breaking snowfalls in respect to
frequency or accumulation.
The Landlord and Contractor shall use their diligent efforts to prevent or
minimize any delays resulting from any one or more of the matters described in
clauses (i) through (vi), above. Any delays resulting from any one or more of
the matters described in clauses (i) through (vi) above, except as may be due to
the negligence of the Landlord or the Contractor, or their respective employees,
agents, contractors, subcontractors, or representatives, are hereinafter
individually referred to as a "Permitted Delay," and are hereinafter
collectively referred to as "Permitted Delays."
(c) Effect of Permitted Delays. Promptly following Landlord's becoming
--------------------------
aware that an occurrence will result in a Permitted Delay hereunder, Landlord
shall notify Tenant, in writing, of such occurrence and of Landlord's estimate
of the effect, if any, such occurrence will have on the time within which the
subject Landlord's Improvements shall be Substantially Complete, or on such
other target dates set forth herein (and, as noted below, in the case of a
Tenant Extension, the additional cost as a result thereof, if any, which will be
borne by Tenant), and shall provide Tenant with reasonable evidence as to the
Permitted Delay. If Landlord, Contractor and Tenant are able to agree on the
effect of any delays which result from a Permitted Delay or the cost to Tenant,
if any, in the instance of a Tenant Extension, such agreement shall be the
subject of a Change Order. If Landlord, Contractor and Tenant are unable to
agree on the effect of any delays which result from a Permitted Delay or the
cost to Tenant, if any, in the instance of a Tenant Extension (but excluding, in
the instance of cost, a Scope Change), the matter in respect to duration of the
delay or such cost shall be subject to resolution by binding arbitration of the
Arbitrator as provided in Section 2.11
11
hereof, which resolution shall likewise be the subject of a Change Order.
Landlord and Tenant are hereby required to execute a Change Order as shall agree
as aforesaid, or, absent such agreement, as determined by the Arbitrator
pursuant to Section 2.11 hereof. In the case of continuing Permitted Delays,
only one such notice from Landlord shall be necessary.
(d) Substantial Completion. The Initial Improvements (and the Expansion
----------------------
Improvements, if applicable) shall, for purposes of this Lease, be deemed to be
"Substantially Complete" (or "Substantially Completed" or "Substantial
Completion") on the date on which (i) the Architect (or the Expansion Architect,
as applicable) certifies to the Tenant that the Initial Improvements (or
Expansion Improvements, if applicable) in question have been completed in
substantial conformity with the Final Plans (or the Final Expansion Plans, if
applicable), subject to landscaping and other Punch List Items (as such term is
defined in Section 2.8 hereof); and (ii) the Township (or other governmental
authority having jurisdiction) has issued with respect thereto a certificate of
occupancy (or other consent to or approval of Tenant's use and occupancy
thereof). In the event of any disagreement between Landlord and Tenant as to
whether Substantial Completion has been achieved under clause (i) above, the
decision of the Architect (or Expansion Architect, if applicable) shall be final
and binding on the parties.
SECTION 2.6 TENANT'S REMEDIES FOR LANDLORD DELAY IN COMPLETION OF INITIAL
IMPROVEMENTS. Subject to the conditions herein set forth, the anticipated
Delivery Date is September 1, 1998, meaning that, as provided in Section 1.2(a),
the Initial Improvements are to be Substantially Completed by such date. In the
event that, due to causes other than Permitted Delays, the Initial Improvements
are not Substantially Completed on September 1, 1998, then Contractor, but not
Landlord, shall be liable to Tenant for liquidated damages in the amount of Two
Thousand Five Hundred and 00/100ths Dollars ($2,500.00) for each day between (i)
September 1, 1998, and (ii) the first to occur of (y) the Delivery Date, and (z)
June 1, 1999. The effect of a Permitted Delay (determined pursuant to Section
2.4 hereof) shall cause the Delivery Date and the aforesaid June 1, 1999 date to
be extended by the duration so determined. The parties hereto have fully
negotiated the provisions of this Section 2.6 with respect to liquidated
damages, as well as the balance of the terms, provisions and conditions of this
Lease, free from any duress or other undue influence. Having determined that the
actual amount of any losses which Tenant would incur as a result of any delay in
the Initial Term Commencement Date, would be difficult, if not impossible, to
ascertain, the parties have, independently and in good faith, determined that
the foregoing liquidated damages are a fair and reasonable estimation of and
basis for any such losses, and that the liability thereof shall be borne solely
by Contractor, and not by Landlord. Accordingly, in the event of any such delay,
subject to the conditions set forth above, and anything in this Lease to the
contrary notwithstanding, the foregoing liquidated damages shall be the sole
obligation of Contractor (and Landlord shall have no liability) in the event of
any such delay, and shall be in lieu of any other rights or remedies which
Tenant would otherwise have at law or in equity. Anything in this Lease to the
contrary notwithstanding, Landlord shall have no liability or obligation in the
event of any such delay. Notwithstanding the foregoing, if the Initial
Improvements are not Substantially Completed prior to August 31, 1999 (which
date shall be subject to extensions resulting only from a Tenant Extension,
only, and not for other Permitted Delays), Tenant, pursuant to written notice
thereafter to Landlord and Contractor, may terminate this Lease, in which event
this Lease shall thereafter become null and void and of no further force and
effect, except for the obligation of Contractor to pay the liquidated damages
provided in this Section 2.6 shall survive such termination.
12
SECTION 2.7 WARRANTY. Subject to Section 2.3 hereof with respect to
compliance with the ADA and Tenant's obligations in regard thereto, Landlord and
Contractor warrant to Tenant, for a period of one (1) year from the Delivery
Date ("Initial Improvements Warranty Period"), that the Initial Improvements
shall be constructed in accordance with the provisions of section 2.3, and in
substantial compliance with the Final Plans, and shall be free from defects in
workmanship or materials. After the conclusion of the Initial Improvements
Warranty Period, Landlord or Contractor, as the case may be, shall assign and
transfer to Tenant all assignable (without cost to Landlord or Contractor)
warranties then in effect which were given to Landlord or Contractor in the
first instance. Landlord and Contractor shall use their respective reasonable
commercial efforts to furnish to Tenant three (3) copies of any and all service
contracts, warranties, equipment specifications, manufacturers' information and
operating instructions in connection with the Initial Improvements, as the same
may be reasonably available to Landlord or Contractor from their respective
suppliers. If, during the Initial Improvements Warranty Period, Tenant notifies
Landlord and Contractor, in writing, of defective workmanship or materials in
the construction of the Initial Improvements, Landlord and Contractor shall
promptly cause such defect to be corrected by the repair or replacement thereof,
as reasonably necessary.
The warranty which is provided hereunder is limited in certain respects,
and is conditioned on the following:
(a) Tenant shall use the Initial Improvements only in accordance with the
design capacities and criteria established therefor. Tenant
acknowledges that any misuse thereof may void the warranty hereunder,
and may void any manufacturers' or other warranties which may be
assigned to Tenant hereunder.
(b) In addition to the foregoing, the warranty hereunder shall not extend
to the electrical systems, plumbing systems, heating, ventilating and
air conditioning systems, fire protection systems or other mechanical
systems servicing the Initial Improvements, unless such systems are
maintained and operated in compliance with the manufacturers'
specifications therefor by those professionals specified by such
manufacturers' specifications.
(c) Any and all work required to be performed under this Section 2.7
("Initial Improvements Warranty Work") shall not in any way include,
or require Landlord or Contractor to perform, any routine or
appropriate regular maintenance of Landlord's Improvements required to
be performed by Tenant during the Initial Improvements Warranty Period
as part of Tenant's Repairs and Maintenance (as such term is defined
in Section 6.2 hereof).
(d) The warranty hereunder specifically excludes (and Tenant waives any
claims, and shall cause its insurer to waive any and all subrogation
claims, with respect to) any and all indirect or consequential
damages, including, without limitation, damages to Tenant's products,
equipment or other personal property which may be located within the
Demised Premises. Tenant hereby acknowledges and agrees that it has
acquired, or will acquire,
13
and will maintain, appropriate amounts of insurance in order to manage
such risks.
SECTION 2.8 PUNCH LIST. As a condition of and prior to the Architect
issuing a certificate to Tenant of the Substantial Completion of the Initial
Improvements (or of the Expansion Improvements by the Expansion Architect, if
applicable), Landlord, ten (10) days prior to the date Landlord reasonably
believes the Initial Improvements (or Expansion Improvements, if applicable)
will be Substantially Complete, shall so advise Tenant, in writing. Promptly
following such notice, Landlord, Contractor, Tenant and Architect (or the
Expansion Architect in the instance of the Expansion Improvements, if
applicable) shall make a joint physical inspection of the Initial Improvements
(or of the Expansion Improvements, if applicable) to list the items of punch
list work to be completed ("Punch List Items") and the duration of time that
shall be afforded to complete the same, subject to Permitted Delays. Punchlist
List Items shall include minor corrective or minor incomplete items in respect
to the Initial Improvements (or Expansion Improvements, if applicable). In the
event Landlord, Contractor and Tenant are unable to agree on the Punch List
Items or the time within which they shall be completed, the Architect's (or that
of the Expansion Architect, if applicable) determination shall be binding on the
Landlord, Contractor and Tenant, which determination in respect to which items
are included shall based solely on the determination of whether the item in
question was constructed in substantial conformity with the Final Plans (or the
Final Expansion Plans, if applicable). When the list of Punchlist List Items are
determined as aforesaid, Contractor, in the instance of the Initial
Improvements, and the Landlord, in the instance of the Expansion Improvements,
shall deliver, in writing, its unconditional promise to complete, subject to
Permitted Delays, the applicable Punch List Items within thirty (30) days
thereafter, or such longer period of time determined as aforesaid. In the event
that the Contractor fails to complete the Punch List Items within the times
determined as aforesaid, then the Tenant, following fifteen (15) days prior
written notice to the Landlord, shall have the right to complete the Punch List
Items and deduct from the Base Rent a sum equal to Tenant's direct, out of
pocket costs incurred in completing such incomplete Punch List Items, plus an
administrative fee equal to ten percent (10%) of such costs.
SECTION 2.9 INDEMNITY.
(a) Indemnity for Liens. Landlord and Contractor (however, in the case of
-------------------
Contractor, with respect to the Initial Improvements only) shall indemnify and
save Tenant, and its partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, agents and employees, harmless from and
against any and all direct (but not indirect or consequential) liability, loss,
cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with any claim, lien, charge,
encumbrance or action brought, maintained or filed by any party for any labor
performed or materials furnished for or in connection with the Initial
Improvements (or the Expansion Improvements, if applicable), who claim through
or under Landlord or Contractor.
(b) Indemnity for Personal Injury and Property Damage. Further, Landlord
-------------------------------------------------
and Contractor (however, in the case of Contractor, with respect to the Initial
Improvements only) shall indemnify and save Tenant, and its partners, directors,
officers, shareholders, contractors, subcontractors, sub-subcontractors, agents
and employees, from and against all direct (but not
14
indirect or consequential) liability, loss, cost or damage, including, without
limitation, reasonable attorneys' fees, incurred or sustained by any of them,
except to the extent caused in whole or in part by the negligence or willful
misconduct of Tenant, or its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents, employees or invitees,
arising out of or resulting from the performance of any work in connection with
the construction of the Initial Improvements (or the Expansion Improvements, if
applicable); provided, however, that any such loss, cost or damage must be (i)
attributable to bodily injury, sickness, disease or death, or due to injury to
or destruction of tangible property (other than Landlord's Improvements), and
(ii) caused in whole or in part by the negligent or intentional act of
Contractor (with respect to the Initial Improvements only) or Landlord, or any
of their respective partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, Mortgagees (as such term is defined in
Section 14.2 hereof), agents or employees, or anyone for whose acts any of them
may be liable. Notwithstanding the foregoing, except to the extent caused in
whole or in part by the negligence or willful misconduct of Tenant or its
partners, directors, officers, shareholders, contractors, subcontractors, sub-
subcontractors, agents, employees or invitees, if Tenant suffers a liability,
loss, cost or damage to an unrelated third party that is caused in whole or in
part by the negligence or intentional act of those parties set forth in clause
(ii) above, the scope of Landlord's or Contractor's liability hereunder shall
not be limited as provided in clause (i) above.
(c) Required Notification by Tenant. Tenant shall promptly notify
-------------------------------
Contractor (with respect to the Initial Improvements only) and Landlord of any
claim under an indemnity contained in this Section 2.9 of which Tenant has
knowledge, in such time so as to avoid prejudice to Contractor or Landlord.
SECTION 2.10 EARLY ACCESS.
(a) Early Access. Prior to the Substantial Completion of the Initial
------------
Improvements (or the Expansion Improvements, if applicable), and provided that
the Township or other governmental authority having jurisdiction does not
prohibit the same, Landlord shall provide Tenant with early access to the
Initial Improvements (or the Expansion Improvements, if applicable), including,
without limitation, access to and the use of loading docks, elevators,
construction hoists, electrical service and the like, for the purposes of
allowing separate contractors engaged by Tenant to install or construct therein
(to the extent then completed) such items for which Landlord and Contractor are
not responsible hereunder (together, "Tenant Work"); provided, however, that no
Tenant Work may be performed without the prior written consent of Landlord,
which consent may be conditioned on the submission of plans, specifications,
acceptable arrangements for security and other safety precautions, and other
details regarding the proposed Tenant Work, and other reasonable arrangements in
connection with scheduling, but shall not be otherwise unreasonably withheld or
delayed. Further, any and all Tenant Work shall be prosecuted and shall in all
instances be subject to the conditions and covenants pertaining to New Work (as
such term is defined in Section 17.1 hereof) which are set forth in Section 17.1
hereof. The terms, provisions and conditions of Section 2.5(b)(i) hereof and all
other terms, provisions and conditions of this Lease pertaining to Tenant
Extensions shall apply in connection with Tenant's exercise of its rights of
early access under this Section 2.10 and any Tenant Work. In the event Tenant's
prosecution of any Tenant Work unreasonably interferes with any work being
performed by or on behalf of Landlord, Landlord (or Contractor, in the instance
of the Initial Improvements) shall give written notice to Tenant of such
interference as provided in Section 2.5(c) hereof.
15
The rights of Tenant to early access pursuant to this Section 2.10 are
hereinafter referred to as "Early Access." Landlord may, at any time, suspend
Tenant's rights to Early Access hereunder, in the event that Landlord or
Contractor reasonably determines that such Early Access or any Tenant Work is
unreasonably interfering with the construction of Landlord's Improvements, is
creating security or safety risks or is otherwise not in substantial conformance
with the conditions on which the Early Access was granted in the first instance.
As part of Tenant Work, Landlord acknowledges and agrees that Tenant, by
separate contractors, shall be installing cables, wiring, and certain other
equipment and facilities for Tenant's voice data fiber optics, security systems
and other systems which are required to be, or are most efficiently, installed
during the pendancy of construction of the Initial Improvements (or Expansion
Improvements). Landlord shall coordinate with Tenant such installations by
Tenant of the foregoing systems pursuant to a schedule that Contractor (or
Landlord, in the instance of the Expansion Improvements) shall timely provide to
Tenant. Such schedule will permit Tenant to reasonably complete such
installations in as an efficient, timely manner in respect to the ongoing
construction of the Landlord's Improvements as is reasonably possible without
unreasonable interference to the Contractor (or Landlord, as aforesaid) or
unreasonable interference from the Contractor (or Landlord, as aforesaid). In
addition, as part of Tenant Work, Landlord acknowledges and agrees that Tenant,
by separate contractors, shall be installing furniture, assembling work station
partitions and performing associated work station partition electrical work,
which Tenant shall be permitted to undertake, without interference from the
Contractor (or Landlord, as aforesaid), not less than thirty (30) days prior to
the Delivery Date (or Expansion Delivery Date).
Anything in this Section 2.10 to the contrary notwithstanding, Tenant shall
not commence the conduct of any business from the Initial Improvements prior to
the Delivery Date, or from the Expansion Improvements until the Expansion
Delivery Date.
(b) Tenant Cooperation. As a condition precedent to exercising its right
------------------
to Early Access hereunder and to entering into contracts with any separate
contractors described in Section 2.10(a) hereof, Tenant shall (i) provide to
Ticor Title Insurance Company, or other title insurer selected by Landlord, such
indemnities, hold harmless agreements or other similar undertakings or
reasonable assurances with respect to such separate contractors' lien claims, as
Landlord may reasonably require from time to time in order to induce such title
insurer to issue its interim and final certifications to Landlord's lender(s)
providing construction financing, if any, and to insure over possible lien
claims which such title insurer may otherwise raise as exceptions to title on an
owner's or lender's title insurance policy; and (ii) provide to Landlord and its
Mortgagees and insurers, such certificates of insurance, waivers of subrogation
and other documentation from Tenant and from Tenant's contractors,
subcontractors and sub-subcontractors as Landlord or its Mortgagees or insurers
may, from time to time, reasonably request. Tenant shall also comply with such
other reasonable requests as Landlord, Contractor or such title insurer or other
insurers may require in connection with any such separate contract(s).
(c) Tenant Indemnity. Tenant shall indemnify, defend and save Landlord,
----------------
Contractor and their respective partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, Mortgagees, agents and
employees, harmless from and against any and all liability, loss, cost or
damage, including, without limitation, reasonable attorneys' fees and court
costs, incurred or sustained by any of them in connection with any claim, lien,
charge, encumbrance or action brought, maintained or filed by any party for any
labor performed or materials furnished for or in connection with the Land, the
Building or the Demised Premises, or any portion thereof, who claim by, through
or under Tenant. Further, Tenant shall, to the fullest extent permitted by
applicable law, indemnify, defend and save Landlord, Contractor and their
respective partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, Mortgagees, agents and employees, harmless
from and against any and all liability, loss, cost or damage, including, without
limitation, reasonable attorneys' fees and court costs,
16
incurred or sustained by any of them, except to the extent caused in whole or in
part by the negligence or willful misconduct of Landlord, Contractor or their
respective partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, Mortgagees, agents or employees, arising out
of or resulting from the performance by Tenant, or its partners, directors,
officers, shareholders, contractors, subcontractors, sub-subcontractors, agents
or employees, of any work in connection with the construction of any of the
Improvements; provided, however, that any such loss, cost or damage must be (i)
attributable to bodily injury, sickness, disease or death, or due to injury or
destruction of tangible property, and (ii) caused in whole or in part by the
negligent or intentional act of Tenant or its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, agents or
employees, or anyone directly or indirectly employed by any of them, or anyone
for whose acts any of them may be liable. Landlord or Contractor shall promptly
notify Tenant of any claim under an indemnity contained in this Section 2.10(c)
of which Landlord or Contractor, as applicable, has knowledge, in such time so
as to avoid prejudice to Tenant. Notwithstanding the foregoing, except to the
extent caused in whole or in part by the negligence or willful misconduct of
Landlord or Contractor or their partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents, employees or invitees,
if Landlord or Contractor or Mortgagee suffers a liability, loss, cost or damage
to an unrelated third party that is caused in whole or in part by the negligence
or intentional act of those parties set forth in clause (ii) above, the scope of
Tenant's liability hereunder shall not be limited as provided in clause (i)
above.
SECTION 2.11 ARBITRATION OF CERTAIN MATTERS. Landlord, Tenant and
Contractor hereby appoint any one of those individuals set forth on Exhibit 2.11
hereof ("Arbitrator") to act as the arbitrator in respect to those disputes
specifically set forth in Sections 2.5(c) and 4.1 of this Lease. To the extent
that disputes arise among the parties that are not specifically provided in this
Lease as being the subject for resolution pursuant to provisions of this Section
2.11, the parties shall be permitted to pursue their respective remedies at law
or in equity, except as otherwise limited herein. Landlord and Tenant shall
each, in good faith, agree on the substitution (if any) of those individuals set
forth on Exhibit 2.11 that Landlord and Tenant desire to act as the Arbitrator
in respect to the Expansion Improvements. Such substitution(s) shall be
determined by Landlord and Tenant within thirty (30) days following Landlord's
receipt of the Expansion Notice, if any. Such substitute individual(s) that may
act as the Arbitrator shall have those qualifications and experience (duration,
scope and geographic familiarity) that are reasonably similar to that of the
individual(s) listed on said Exhibit 2.11 for whom a substitution is being made.
When any disputing party desires to submit a dispute set forth in Section 2.5(c)
hereof to the Arbitrator for the Arbitrator's binding determination, such
disputing party shall notify, in writing, the other party(ies) thereto of such
intention and shall identify the individual from Exhibit 2.11 such noticing
party selects to act as the Arbitrator. Within five (5) days following such
notice, each of the disputing parties shall submit to the Arbitrator and the
other
17
disputing party(ies) such party's determination of the manner in which such
dispute should be resolved ("Submitted Resolution"). Within five (5) days
following the Arbitrator's receipt of the Submitted Resolutions, the Arbitrator
shall select one of the Submitted Resolutions that the Arbitrator, in his sole
and exclusive judgment, determines appropriate. Such selection shall be binding
on the parties to the subject dispute. The party whose Submitted Resolution was
not selected shall pay for all of the charges of the Arbitrator in respect to
such dispute.
ARTICLE 2A
EXPANSION OF DEMISED PREMISES
SECTION 2A.1 OPTION TO EXPAND.
(a) Exercise of Right to Expand. Subject to Section 2A.8 hereof, and
---------------------------
provided that Tenant is not then in Default hereunder, Tenant shall have the
right to cause Landlord to expand the Initial Improvements, by means of the
Expansion Improvements, in accordance with this Article 2A ("Expansion Option").
The Expansion Option shall be exercised, if at all, and shall be effective only
if exercised in accordance with the terms, provisions and conditions of this
Article 2A. The "Expansion Improvements" shall mean that additional office
space, if any, consisting of not less than 40,000 gross square feet and nor more
than a maximum of 90,000 gross square feet, together with required parking
therefor to be built onto the parking for the Initial Improvements, contiguous
to the Initial Improvements and as depicted on Exhibit 2A.1(a) attached hereto
and made a part hereof. Landlord shall construct the Expansion Improvements, or
cause the Expansion Improvements to be constructed, on the Land in accordance
with this Article 2A, pursuant to Tenant's exercise of the Expansion Option.
(b) Exercise of Right to Expand; Delivery of Expansion Notice. Provided
---------------------------------------------------------
that Tenant is not then in Default hereunder, Tenant may exercise the Expansion
Option by delivering to Landlord written notice ("Expansion Notice") of Tenant's
direction to Landlord to prepare the components of the Final Expansion Base
Building Plans in accordance with the provisions of Section 2.2(b) hereof. In
order to be effective, and as a strict condition precedent to Tenant's rights
under this Article 2A, Tenant's Expansion Notice must be received by Landlord on
or before the last business day of the ninety-sixth (96th) month of the Initial
Term.
(c) Specifications of Expansion Improvements. In addition to the
----------------------------------------
requirements set forth in Section 2A.1(d) hereof, Tenant's Expansion Notice
shall contain Tenant's specifications for the Expansion Improvements, which
shall be consistent with the depiction of the Expansion Improvements set forth
on Exhibit 2A.1(a) attached hereto and made a part hereof and shall otherwise be
reasonably satisfactory to Landlord and Tenant. Such specifications, among other
things, must be in compliance with all then-applicable Park covenants and all
federal, state, Township or other local statutes, laws, ordinances, rules and
regulations.
(d) Contents of Expansion Notice. Tenant's Expansion Notice to Landlord
----------------------------
shall contain the following information:
(i) Such relevant data concerning the desired Expansion Improvements
(provided that the Expansion Improvements shall be in conformity with,
among other things, the clear height of the Initial Improvements, and
in
18
conformity with the architecture, engineering and general aesthetics
of the Initial Improvements), in sufficient detail, all as may be
necessary to enable Landlord to determine the Expansion Costs (as such
term is defined in Section 3.1(h) hereof), provided that in the event
that the Landlord advises the Tenant that Tenant's Expansion Notice
does not provide sufficient detail, as required hereunder, the
timeliness of the Tenant's Expansion Notice shall not be invalidated,
if Tenant promptly provides Landlord with additional detail reasonably
necessary for Landlord to determine the Expansion Costs; and
(ii) The date on which Tenant requests that the Expansion Improvements be
completed and ready for occupancy for Tenant's use, which date shall
in no case be earlier than twelve (12) months after Tenant's approval
of the Final Expansion Plans and shall not be later than the last day
of the Initial Term.
(e) Landlord's Proposal. Within sixty (60) days after Landlord's receipt
-------------------
of Tenant's Expansion Notice, Landlord shall consult with Tenant concerning
Tenant's specific requirements in regard to its desired expansion, and within
such sixty(60)-day time period shall notify Tenant, in writing, of the non-
binding, total estimated Expansion Costs which will be incurred in planning and
constructing the Expansion Improvements.
(f) Tenant's Notice to Proceed. Within sixty (60) days after receipt of
--------------------------
Landlord's written notification as to the Expansion Costs, as provided in
Section 2A.1(e) hereof, Tenant shall notify Landlord in writing, either that (i)
Tenant authorizes Landlord to proceed with the preparation of the components of
the Final Expansion Base Building Plans, and the commencement of construction of
the Expansion Improvements ("Notice to Proceed"); or (ii) Tenant desires to
revise the specifications for the Expansion Improvements to reduce the estimated
Expansion Costs to an amount satisfactory to the Tenant (in which event the
Tenant shall submit revised specifications within sixty (60) days from the
receipt by Landlord of Tenant's notice under this item (ii), and Landlord shall
thereafter consult with Tenant and provide revised estimated Expansion Costs
within sixty (60) days in accordance with Section 2A.1(e), and Tenant shall
thereafter provide notice to Landlord in accordance with this Section
2A.1(f));or (iii) Tenant elects not to expand. If Tenant fails to deliver its
Notice to Proceed to Landlord within the aforesaid sixty (60)-day period, then
Tenant shall be automatically and conclusively deemed to have elected not to
expand. Anything in this Lease to the contrary notwithstanding, Tenant may not
give an Expansion Notice more than three (3) times, nor more than once during
each calendar year, and Tenant shall not be permitted to request, more than
twice in respect to any Expansion Notice, the revisions of the specifications
for the Expansion Improvements in order to reduce the estimated Expansion Cost
as provided in clause (ii) above.
(g) Automatic Election to Exercise Renewal Terms. Anything in this Lease
--------------------------------------------
to the contrary notwithstanding, in the event that Tenant delivers its Notice to
Proceed, then, depending on the date on which of the resulting Expansion
Commencement Date occurs, Tenant shall automatically and conclusively be deemed
likewise to have exercised its option for such full or partial Renewal Terms
such that as of the Expansion Commencement Date, the remaining Term of this
Lease shall be ten (10) years and shall expire at 11:59 P.M., prevailing time,
on the day preceding the tenth (10th) anniversary of the Expansion Delivery
Date, provided, however, the
19
Tenant shall continue to have the right to exercise its option for any remaining
Renewal Terms (or portions thereof) which remain beyond said ten (10) year
additional Term which shall come into effect as provided under this Section
2.A.1(g); provided, further, that if the remaining portion of a Renewal Term
after the extension of the Term of this Lease for ten (10) years from the
Expansion Delivery Date shall be less than one (1) year, then the ten (10) year
term from the Expansion Delivery Date shall be further extended to include the
remaining portion of the Renewal Term which is less than one (1) year. For
example, if the Tenant delivers its Notice to Proceed and the resulting
Expansion Delivery Date is the sixth anniversary date of the Initial
Commencement Date, then the Term of the Lease as of the Expansion Delivery Date
shall be for a period of ten (10) years and the Tenant shall thereafter have
remaining a Second Renewal Term of four (4) years, a Third Renewal Term of five
(5) years and a Fourth Renewal Term of four (4) years and eleven (11) months.
SECTION 2A.2 PREPARATION OF EXPANSION PLANS. Promptly after Landlord's
receipt of the Notice to Proceed, and subject to Section 2A.8 hereof, Landlord
shall cause to be prepared and delivered to Tenant all of the components of the
Final Expansion Base Building Plans, prepared by a licensed Pennsylvania
architect and one or more licensed Pennsylvania engineers, reasonably acceptable
to Tenant ("Expansion Architect"), and in substantial conformity with the
Expansion Notice and in substantial conformity with the style, design and
exterior colors and materials as the Final Plans. The Final Expansion Base
Building Plans shall be in a form sufficiently complete to enable the issuance
of a building permit by the Township for the construction of the base building
portion of the Expansion Improvements. In addition, as soon as practicable,
after Tenant's delivery of the Notice to Proceed, Landlord shall cause the Final
Expansion Plans to be delivered to Tenant, which shall contain the same
components as the Final Initial Interior Build-Out Plans, shall be in
substantial conformity with the Expansion Notice, and shall be reasonably
satisfactory to Tenant.
When each of the components of the Final Expansion Base Plans has been
prepared and approved in accordance with this Section 2A.2 and Section 2.2(b)
hereof, Tenant and Landlord shall each affix their respective signatures or
initials to each page comprising such component. Thereafter, such approved
components shall constitute the "Final Expansion Plans" and shall be deemed to
become attached to and made a part of this Lease as identified in Exhibit 2A.2.
SECTION 2A.3 EXPANSION COMMENCEMENT DATE. The "Expansion Commencement
Date" and the "Expansion Delivery Date" shall be the later of (a) the date set
forth in Tenant's Expansion Notice (in accordance with Section 2A.1(d)(ii)
hereof), or (b) the date on which the Expansion Improvements are Substantially
Completed. Notwithstanding the foregoing, if the Expansion Architect has
certified in writing that, as of a date certain set forth in such written
certification, the Expansion Improvements would have been Substantially
Completed, but for a Tenant Extension, then the Expansion Improvements shall
nevertheless be deemed to be Substantially Completed for purposes of determining
the Expansion Commencement Date and the payment of the Expansion Improvements
Base Rent (as such term is defined in Section 3.1(a) hereof) hereunder on the
date certain set forth in the aforesaid certification.
SECTION 2A.4 SCOPE OF WORK; EXPANSION IMPROVEMENTS. Weather permitting,
promptly following the completion of all components of the Final Expansion
Plans, Landlord shall furnish or cause to be furnished, at Landlord's sole cost
and expense, all the material, labor and equipment necessary for the
commencement and completion of construction of the Expansion Improvements.
20
The Expansion Improvements shall be constructed in a good and workmanlike manner
in substantial accordance with the Final Expansion Plans. In the event that any
materials specified in the Final Expansion Plans are not reasonably available to
Landlord or its contractor, Landlord and such contractor reserve the right to
substitute materials of higher or equal quality.
SECTION 2A.5 EXPANSION CHANGE ORDERS. Tenant shall be allowed to request
Change Orders, and shall be deemed to have requested Change Orders, with respect
to the Expansion Improvements as provided in Section 2.4 hereof.
SECTION 2A.6 WARRANTY AS TO EXPANSION IMPROVEMENTS. Landlord shall
warrant to Tenant, for a period of one (1) year after Expansion Commencement
Date of the Expansion Improvements ("Expansion Improvements Warranty Period"),
that the Expansion Improvements shall be constructed in substantial compliance
with the Final Expansion Plans, and shall be free from defects in workmanship or
materials. After the conclusion of the Expansion Improvements Warranty Period,
Landlord or its contractor, as the case may be, shall assign and transfer to
Tenant all assignable (without cost to Landlord or its contractor) warranties
then in effect with respect to the Expansion Improvements which were given to
Landlord or its contractor in the first instance. If during the Expansion
Improvements Warranty Period, Tenant notifies Landlord, in writing, of defective
workmanship or materials in the construction of the Expansion Improvements,
Landlord shall promptly cause such defect to be corrected by the repair or
replacement thereof, as reasonably necessary. The foregoing warranty is subject
to same terms, conditions, undertakings and limitations as set forth in Section
2.7 hereof.
SECTION 2A.7 EXPANSION PUNCH LIST. The inspection of the Expansion
Improvements and the determination of Punch List Items with respect thereto
shall be conducted and determined in the manner set forth in Section 2.2 hereof,
to the extent applicable.
SECTION 2A.8 LIMITATION ON LANDLORD'S OBLIGATIONS. Anything in this
Article 2A or elsewhere in this Lease to the contrary notwithstanding,
Landlord's obligations under this Article 2A are expressly made contingent on
(a) Tenant's accepting Landlord's proposal as to the Expansion Costs; and (b)
all necessary approvals, consents and permits being issued or obtained in
connection with the Expansion Improvements, which approvals, consents and
permits at the time of the proposed expansion are required by the Township or
any and all other governmental authorities then having jurisdiction over the
Demised Premises. In the event that Landlord is not able to obtain one or more
of the aforesaid approvals, consents or permits, Landlord shall notify Tenant
thereof, in writing, as promptly as practicable.
ARTICLE 3
RENT
SECTION 3.1 BASE RENT.
(a) Payment of Base Rent. Tenant shall pay to Landlord's agent, ▇▇▇▇▇,
--------------------
▇▇▇▇▇▇▇ & Company, Suite 800, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
at such other place as Landlord may from time to time designate in writing, in
coin or currency which, at the time of payment, is legal tender for private or
public debts of the United States of America, annual base rent ("Base Rent")
during the Term, as set forth in this Section 3.1. Base Rent shall be comprised
of (i)
21
Base Rent with respect to the Initial Improvements ("Initial Improvements Base
Rent"), (ii) Base Rent with respect to the Expansion Improvements ("Expansion
Improvements Base Rent"), and (iii) Change Order Base Rent, if any. Base Rent
shall be payable in equal monthly installments, each in advance, on or before
the first day of each and every calendar month during the Term.
(b) Initial Improvements Base Rent During Initial Term. The annual Initial
--------------------------------------------------
Improvements Base Rent during each twelve (12)-month period ("Lease Year")
during the Initial Term and the monthly Initial Improvements Base Rent during
the first twelve (12) months of the Initial Term is set forth on Exhibit 3.1(b)
attached hereto and made a part hereof. After the first twelve (12) months of
the Initial Term, the Initial Improvements Base Rent shall be paid in equal
monthly installments. In addition, the Initial Improvements Base Rent shall
include any Change Order Base Rent determined in accordance with the provisions
of Section 2.4 hereof.
(c) Initial Improvements Base Rent During Renewal Terms. If Tenant elects,
---------------------------------------------------
or is deemed hereunder to have elected, to renew this Lease for any of the
Renewal Terms, then the Initial Improvements Base Rent payable hereunder during
each Lease Year in each such Renewal Term shall be equal to ninety-three percent
(93%) of the Fair Market Base Rent (as such term is defined in Section 3.1(f)
hereof) multiplied times fair market periodic increases ("Fair Market
Escalator"). In no instance however, shall the Initial Improvements Base Rent
plus Change Order Base Rent during the applicable Renewal Term be less than the
Initial Improvements Base Rent plus Change Order Base Rent paid by Tenant during
the Initial Term or during the preceding Renewal Term, as applicable.
(d) Expansion Improvements Base Rent During Initial Term. The Expansion
----------------------------------------------------
Improvements Base Rent during the Initial Term shall be determined in accordance
with Section 3.1(g) hereof.
(e) Expansion Improvements Base Rent During Renewal Terms. The Expansion
-----------------------------------------------------
Improvements Base Rent during the Renewal Terms shall be determined in
accordance with Section 3.1(g) hereof.
(f) Determination of Fair Market Base Rent. As noted in Section 3.1(c)
--------------------------------------
hereof, the Initial Improvements Base Rent during any of the Renewal Terms shall
be equal to ninety-three percent (93%) of the fair market base rent ("Fair
Market Base Rent"), as determined in accordance with this Section 3.1(f),
multiplied by the Fair Market Escalator, if any. At least one hundred twenty
days (120) days prior to the last day of the Initial Term or the last day of the
First Renewal Term, as applicable, Landlord shall notify Tenant in writing of
Landlord's proposed Fair Market Base Rent and Fair Market Escalator, if any, for
the Demised Premises for the applicable Renewal Term ("Landlord's Proposal").
Within thirty (30) days after the receipt of Landlord's Proposal, Tenant shall
advise Landlord, in writing, either that (i) Tenant accepts Landlord's Proposal,
or (ii) Tenant chooses to have the Initial Improvements Base Rent plus Change
Order Base Rent for the applicable Renewal Term determined by appraisal. If
Tenant chooses Landlord's Proposal, the Initial Improvements Base Rent and
Change Order Base Rent for the applicable Renewal Term shall be that set forth
in Landlord's Proposal. If Tenant fails so to notify Landlord within thirty (30)
days after Tenant's receipt of Landlord's Proposal, Tenant shall be
automatically and conclusively deemed to have accepted Landlord's Proposal.
22
If Tenant chooses to have the Initial Improvements Base Rent and Change
Order Base Rent determined by appraisal, such appraisal shall be determined as
hereinafter provided based upon such criteria as the appraisers (described
below) deem appropriate, which determination shall be binding on Landlord and
Tenant. Such criteria shall include, without limitation, (i) the current use of
the Demised Premises; (ii) the location, quality and age of the Building; (iii)
the size and condition of the Demised Premises; (iv) the extent of the
improvements within the Demised Premises; (v) the extent of the services and
amenities provided to Tenant under this Lease; (vi) lease concessions, such as
lease takeovers/assumptions, so-called expense stops, rental abatements and
commissions (paid or not required to be paid) that are being offered by other
first-class office buildings in the geographic area in which the Demised
Premises are located; (vi) the duration of the applicable Renewal Term; (vii)
the distinction between a "gross" and a "net" lease; and (viii) rental rates and
escalation thereto, if any, then being charged for comparable premises in the
geographic area in which the Demised Premises are located. Further, if Tenant is
obligated to continue the payment of Special Assessments pursuant to Section 4.1
hereof during any of the Renewal Terms, or such obligation arises prior to a
Renewal Term and the obligation for Tenant to pay Special Assessments is known
prior to the commencement of the subject Renewal Term, then any appraisal to
determine the Initial Improvements Base Rent and Change Order Base Rent during
such Renewal Term shall not include, in the establishment of such Rents, the
value or benefit to the Demised Premises resulting from the public improvements
or benefits which are the subject of the subject Special Assessment.
If Tenant elects to have the Initial Improvements Base Rent and Change
Order Base Rent determined by appraisal, Tenant's notice to Landlord thereof
shall also designate Tenant's independent appraiser. Within fifteen (15) days
after Tenant's designation, Landlord shall designate its independent appraiser
and shall notify Tenant thereof in writing. Within fifteen (15) days after
Landlord's designation, both appraisers shall mutually agree on the designation
of a third appraiser. Landlord shall pay all costs associated with the appraiser
designated by Landlord; Tenant shall pay all costs associated with the appraiser
designated by Tenant; and Landlord and Tenant shall share equally in all costs
associated with the appraiser designated by the other two appraisers. All three
appraisers shall be reputable, independent MAI certified real estate appraisers,
each of whom shall be knowledgeable and experienced in the appraisals of rents
for office buildings in the Harrisburg, Pennsylvania area.
After their appointment, the appraisers shall be directed to determine
independently the Fair Market Base Rent and Fair Market Escalator for the period
for which the determination is being made. Within thirty (30) days after the
designation of the third appraiser, all three appraisals of the Fair Market Base
Rent and Fair Market Escalator, as applicable, shall be submitted, in writing,
to Landlord and Tenant. If two or all three of the appraisals shall be identical
in amount, the Initial Improvements Base Rent plus Change Order Base Rent for
the applicable Renewal Term shall be computed as aforesaid using such identical
amount. In the event no two of the appraisals are identical, the highest and the
lowest appraisal shall be disregarded and the Initial Improvements Base Rent
plus Change Order Base Rent for the applicable Renewal Term shall be computed as
aforesaid using such middle appraisal.
If the Initial Improvements Base Rent plus Change Order Base Rent for the
applicable Renewal Term is not determined until after the commencement of the
applicable Renewal Term, Tenant shall continue to pay the Initial Improvements
Base Rent plus Change Order Base Rent
23
equal to the Initial Improvements Base Rent plus Change Order Base Rent paid
during the Initial Term or during the preceding Renewal Term, as applicable.
When the Fair Market Base Rent and Fair Market Escalator, if applicable, are
determined as provided above, and if such determination is greater than the
Initial Improvements Base Rent plus Change Order Base Rent paid during the
Initial Term or during the preceding Renewal Term, as applicable, within thirty
(30) days following such determination, Tenant shall pay to Landlord the
deficiency of the Initial Improvements Base Rent plus Change Order Base Rent
theretofore paid, prorated from the commencement of the applicable Renewal Term
to the date of the determination of the Fair Market Base Rent and Fair Market
Escalator.
(g) Determination of Expansion Improvements Base Rent During Initial Term
---------------------------------------------------------------------
and Renewal Term. The Expansion Improvements Base Rent shall be an annual
----------------
amount equal to the product of (i) the Expansion Costs, multiplied by (ii) 1.07
(representing a combined general contractor's and developer's fee), multiplied
by (iii) the greater of (A) ten and 50/100ths percent (10.50%), or (B) an annual
interest rate equal to three hundred seventy-five (375) basis points in excess
of the ten (10)-year United States Treasury Note Rate then most recently
announced by the United States Treasury as of the Expansion Commencement Date.
The Expansion Improvements Base Rent shall be in effect during the first twelve
(12) months after the Expansion Commencement Date. Thereafter, during the
balance of the Term (including any Renewal Terms that are elected by Tenant
after the expiration of the ten (10) years period subsequent to the Expansion
Delivery Date), the Expansion Improvements Base Rent shall be increased annually
by the lesser of (a) five percent (5%) per annum, and (b) seventy-five percent
(75%) of the percentage by which the United States, Bureau of Labor Statistic,
Consumer Price Index for All Items - All Urban Wage Earners and Clerical Workers
for the Philadelphia Area ("CPI Index") published nearest to the expiration of
each twelve (12) month period subsequent to the Expansion Commencement Date is
greater than the CPI Index most recently published prior to the Initial Term
Commencement Date.
(h) Definition of Expansion Costs. The "Expansion Costs" shall be the
-----------------------------
aggregate of all payment obligations of those contracts for "hard costs" and
"soft costs" identified on Exhibit 3.1(h) attached hereto and made a part hereof
in connection with the development and construction of the Expansion
Improvements, which are incurred by or on behalf of Landlord in connection with
the construction of the Expansion Improvements. The Expansion Costs shall be
based on not less than three competitive bids obtained by the Landlord from
general contractors bidding the Expansion Improvement work on a lump sum basis.
The contract for the design and construction shall be awarded to the most
qualified bidder as mutually selected by Tenant and Landlord. Landlord shall
cause the construction of the Expansion Improvements on an "open-book" basis so
that Tenant shall have the opportunity to review and verify all of the component
elements that comprise the Expansion Costs. In addition, the Expansion Costs
shall include a sum ("Expansion Land Cost") equal to $264,000.00 escalated by
two percent (2%) per year, cumulatively, for each twelve (12)-month period, or
portion thereof, between the Initial Commencement Date and the date on which
Landlord receives Tenant's Notice to Proceed. Based upon the foregoing
computations, within fifteen (15) days after the Expansion Commencement Date,
Landlord shall advise Tenant, in writing, of the amount of the Expansion
Improvements Base Rent and its calculation thereof as provided above.
SECTION 3.2. PRORATION OF BASE RENT; ABSOLUTE NET. If the Initial Term or
any Renewal Term commences other than on the first day of a calendar month or
ends other than on the last day
24
of a month, or if the Expansion Commencement Date is other than the first day of
a calendar month, the Initial Improvements Base Rent (or Expansion Improvement
Base Rent, as applicable) for such month shall be prorated accordingly. Except
as specifically provided herein, the Base Rent and the Expansion Improvement
Rent shall be absolutely net to Landlord so that this Lease shall yield, net to
Landlord, the Base Rent specified in Section 3.1 hereof.
SECTION 3.3. ADDITIONAL RENT. Except as expressly provided herein, and as
further provided in Section 4.1 hereof, in each year of the Term, all
Impositions (as such term is defined in Section 4.1 hereof), insurance premiums,
utility charges, maintenance, repair and replacement expenses, all expenses
relating to Compliance with Laws (as such term is defined in Section 7.1
hereof), and all other costs, fees, charges, expenses, reimbursements and
obligations of every kind and nature whatsoever relating to the Demised
Premises, which may arise or become due during the Term, or by reason of events
then occurring, shall be paid or discharged by Tenant as additional rent
(together, "Additional Rent"). Except as expressly provided herein, Tenant shall
indemnify and save Landlord, and its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, Mortgagees,
agents and employees, harmless from and against any and all loss, cost or
damage, including, without limitation, reasonable attorneys' fees, incurred or
sustained by any of them in connection with any and all of such Impositions,
insurance premiums, utility charges, maintenance, repair and replacement
expenses, all expenses relating to Compliance with Laws, and all other costs,
fees, charges, expenses, reimbursements and obligations. Base Rent and
Additional Rent are sometimes hereinafter collectively referred to as "Rent."
SECTION 3.4 RENT PAYABLE WITHOUT PRIOR DEMAND; MAXIMUM RATE OF INTEREST.
Except as set forth herein, all payments of Base Rent and Additional Rent shall
be payable without previous demand therefor. In case of nonpayment by Tenant of
any item of Additional Rent payable to Landlord when the same is due, Landlord
shall have, in addition to all its other rights and remedies, all of the rights
and remedies available to Landlord under the provisions of this Lease or by law
as if in the case of nonpayment of Base Rent. The performance and observance by
Tenant of all the terms, covenants, conditions and agreements to be performed or
observed by Tenant hereunder shall be performed and observed by Tenant, at
Tenant's sole cost and expense.
Except as provided in this Section 3.4, any installment of Base Rent or
Additional Rent payable to Landlord or any other charges payable by Tenant to
Landlord under the provisions hereof which shall not be paid within five (5)
days when due, shall bear interest at an annual rate equal to three (3)
percentage points per annum in excess of the rate of interest from time to time
announced by ▇▇▇▇▇▇ Trust and Savings Bank, Chicago, Illinois (or similar
institution if such bank shall cease to exist or to publish such a rate) as its
corporate base rate of interest, but in no event in excess of the maximum lawful
rate permitted to be charged by Landlord against Tenant. Such rate of interest
is hereinafter referred to as the "Maximum Rate of Interest." Notwithstanding
the foregoing, Tenant shall be permitted, not more than once each calendar year
during the Term, to be late by not more than ten (10) days in the payment of
Base Rent or Additional Rent hereunder before interest shall commence to accrue
thereon as aforesaid.
ARTICLE 4
PAYMENT OF TAXES, ASSESSMENTS, ETC.
25
SECTION 4.1 ADDITIONAL RENT. Subject to the terms, provisions and
conditions of this Section 4.1, and except as expressly provided elsewhere in
this Lease, Tenant covenants and agrees to pay as Additional Rent, before any
fine, penalty, interest or cost may be added thereto for the nonpayment thereof,
all real estate taxes, special assessments, Tenant's allocable share of regular
and special assessments with respect to the Park for items such as, without
limitation, common area maintenance ("Park Assessments"), water rates and
charges, sewer rates and charges, including, without limitation, any sum or sums
payable for sewer or water capacity, charges for public utilities, insurance
premiums, street lighting, excise levies, licenses, permits, governmental
inspection fees (incurred after Substantial Completion of either or both of the
Initial Improvements or the Expansion Improvements, if applicable), other
governmental charges and all other charges or burdens of whatsoever kind and
nature (including, without limitation, costs, fees and expenses of complying
with any restrictive covenants or similar agreements to which the Demised
Premises are subject), incurred in the use, occupancy, operation, leasing or
possession of the Demised Premises (excluding any income taxes on the Base Rent
imposed on Landlord, it being the intent of the parties hereto that any tax on
the net income derived from the Base Rent payable in respect to the Demised
Premises imposed by any governmental authority shall be paid by Landlord),
without particularizing by any known name or by whatever name hereafter called,
and whether any of the foregoing be general or special, ordinary or
extraordinary, foreseen or unforeseen, which at any time during the Term may be
payable (together, "Impositions"). It is the intention of Landlord and Tenant
that Tenant will pay all Impositions directly to the person, entity, utility,
municipality or other body which is owed the Imposition; provided, however, that
upon Landlord's request from time to time, Tenant shall deliver receipts and
other reasonable evidence of its payment of any and all Impositions and other
items of Additional Rent paid to third parties. Except with respect to the
payment of real estate taxes (as provided below), if any Additional Rent is to
be paid by Tenant to Landlord (as opposed to being paid by Tenant to a third
party), then such payments shall be due thirty (30) days after Landlord has
invoiced Tenant therefor.
All special (or similar) assessments or installments thereof (including,
without limitation, interest thereon) for public improvements or benefits which,
during the Term, shall be laid, assessed, levied or imposed upon or become a
lien upon the Demised Premises and which are payable at any time during the Term
shall hereafter be collectively referred to as "Special Assessments." In respect
to the public improvements or benefits that are the subject of a Special
Assessment(s), Landlord and Tenant shall agree on the useful life of such
improvements or benefits. In the event Landlord and Tenant cannot agree on such
useful life, the useful life shall be determined by the Arbitrator as provided
in Section 2.11 hereof, which determination shall be binding on Landlord and
Tenant. If such useful life is determined as aforesaid to be less than ten (10)
years or greater than twenty (20) years, notwithstanding such determination, the
useful life nonetheless shall be deemed to be, respectively, ten (10) years and
twenty (20) years. The aggregate amount of the subject Special Assessment that
has all or any portion thereof due and payable during the Term shall be
apportioned evenly over the number of years of the determined useful life.
Tenant shall pay, as part of the Additional Rent, those apportioned parts of the
subject Special Assessment (or prorated portion thereof) that are within the
Term. If the subject Special Assessment is due on a lump sum basis Landlord
shall pay such lump sum amount or if the subject Special Assessment has been
fully paid by Landlord, Tenant's apportioned part applicable thereto shall be
due and payable on the date (in the instance of any apportioned part being due
in the first year of the Initial Term) that is thirty (30) days subsequent to
the Delivery Date and each anniversary such date during the Term in which such
apportioned part is
26
applicable. If the subject Special assessment is payable in installments,
Tenant's apportioned part shall be due and payable fifteen (15) days prior to
the date the applicable installment is due. Landlord shall pay all installments
of Special Assessments (including, without limitation, interest accrued on the
unpaid balance) which are payable prior to the commencement and after the
termination of this Lease.
Except as hereinafter provided, Tenant shall pay all real estate taxes,
whether heretofore or hereinafter levied or assessed upon the Demised Premises,
or any portion thereof, which are due and payable during the Term (regardless of
the period to which such taxes relate).
Anything in this Lease to the contrary notwithstanding, during each
calendar year during the Term (prorated as appropriate), Tenant shall from time
to time be obligated to pay its allocable share of the Park Assessments.
SECTION 4.2 TAXES ON RENT. Except for any tax on the net income derived
from the Base Rent, if at any time during the Term, any method of taxation shall
be such that there shall be levied, assessed or imposed on Landlord, or on the
Base Rent or Additional Rent, or on the Demised Premises, or any portion
thereof, in lieu of real property taxes, a capital levy, gross receipts tax or
other tax on the rents received therefrom, or a franchise tax, or an assessment,
gross levy or charge measured by or based in whole or in part upon such gross
Rents, Tenant, to the extent permitted by law, covenants to pay and discharge
the same. Anything in this Lease to the contrary notwithstanding, it is the
intention of the parties hereto that the Base Rent to be paid hereunder shall be
paid to Landlord absolutely net without deduction or charge of any nature
whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or of any
nature, kind or description, except as otherwise expressly provided in this
Lease. Nothing contained in this Lease shall require Tenant to pay any
municipal, state or federal net income or excess profits taxes assessed against
Landlord, or any municipal, state or federal business privilege, mercantile,
capital levy, estate, succession, inheritance or transfer taxes of Landlord, or
corporation franchise taxes imposed upon any corporate owner of the fee of the
Demised Premises.
SECTION 4.3 RECEIPTS FOR IMPOSITIONS. Tenant covenants to furnish
Landlord, within thirty (30) days of written request from Landlord, official
receipts of the appropriate taxing authority, or other appropriate proof
satisfactory to Landlord, evidencing the payment of any Imposition or other tax,
assessment, levy or charge payable by Tenant hereunder. The certificate, advice
or ▇▇▇▇ of the appropriate official designated by law to make or issue the same,
or to receive payment of any Imposition or other tax, assessment, levy or
charge, may be relied upon by Landlord as sufficient evidence that such
Imposition or other tax, assessment, levy or charge is due and unpaid at the
time of the making or issuance of such certificate, advice or ▇▇▇▇. The Landlord
shall notify all taxing authorities to deliver tax bills, assessment, and/or
levies directly to Tenant during the Term, at the address provided by Tenant to
Landlord. Notwithstanding such notice to the taxing authorities, if any tax
bills, assessments or levies are nonetheless delivered to the Landlord, Landlord
shall promptly provide such documents to Tenant. Landlord shall be responsible
for any penalties and/or interest imposed by taxing authorities resulting from
the failure of the Landlord to promptly deliver to Tenant any bills, assessments
and/or levies that were delivered to Landlord (and not Tenant) by the applicable
taxing authority. For purposes of this Section 4.3, "promptly deliver" shall
mean Landlord's obligation to deliver to Tenant such tax bills, assessments
and/or levies within five (5) days of Landlord's receipt thereof, if such tax
▇▇▇▇, assessment and/or levy is payable
27
within thirty (30) days or less from the date of Landlord's receipt thereof.
SECTION 4.4 ADDITIONAL RENT ESCROW. Should Tenant default in the timely
payment of any Imposition or other Additional Rent and thereafter fail to make
payment within fifteen (15) days of written demand by Landlord, at Landlord's
further written demand, Tenant shall pay to Landlord the known or estimated
yearly real estate taxes, assessments and Park Assessments payable with respect
to the Demised Premises, in monthly payments equal to one-twelfth (1/12) of the
known or estimated yearly real estate taxes, assessments and Park Assessments
next payable with respect to the Demised Premises. From time to time, Landlord
may re-estimate the amount of real estate taxes, assessments and Park
Assessments, and in such event, Landlord shall notify Tenant, in writing, of
such re-estimate and fix future monthly installments for the remaining period
prior to the next tax and assessment due date in an amount sufficient to pay the
re-estimated amount over the balance of such period, after giving credit for
payments made by Tenant on the previous estimate. If the total monthly payments
made by Tenant pursuant to this Section 4.5 shall exceed the amount of payments
necessary for said taxes and assessments, such excess shall be promptly paid to
Tenant, and the balance shall be credited on subsequent monthly payments of the
same nature. However, if the total of such monthly payments so made under this
Section 4.5 shall be insufficient to pay such taxes and assessments when due,
then Tenant shall immediately pay to Landlord such amount as may be necessary to
make up the deficiency. If under this Section 4.5, Tenant is making periodic
deposits of funds with Landlord for the purposes of paying taxes and assessments
as aforesaid, then Landlord covenants and agrees with Tenant that it will pay
all such taxes and assessments as they become due, to the extent possible out of
such deposits.
SECTION 4.5 LANDLORD'S AND TENANT'S RIGHT TO CONTEST IMPOSITIONS. Tenant
shall have the right, at Tenant's expense, to contest the amount or validity, in
whole or in part, of any Impositions by appropriate proceedings conducted in the
name of the Landlord or in the name of Landlord and Tenant. Landlord shall
cooperate with Tenant in executing documents or other actions as may be required
for Tenant to pursue challenges to the Impositions. To the extent that the
Tenant achieves a reduction in the Imposition, Tenant shall have the sole right
to any refunds of amounts of such Impositions previously paid by the Tenant. In
the event that the Landlord recommends to the Tenant that Tenant contest an
Imposition, and the Tenant fails to notify the Landlord, within sixty (60) days
that Tenant intends to contest the Imposition as recommended by the Landlord,
then Landlord shall have the right, but not the obligation, to contest the
amount or validity, in whole or in part, of any Impositions by appropriate
proceedings conducted in the name of Landlord or in the name of Landlord and
Tenant. If Landlord elects to contest the amount or validity, in whole or in
part, of any Impositions, such contests by Landlord shall be at Landlord's
expense; provided, however, that if the amounts payable by Tenant for
Impositions are reduced (or if a proposed increase in such amounts is avoided or
reduced) by reason of Landlord's contest of Impositions, Tenant shall reimburse
Landlord for costs incurred by Landlord in contesting Impositions (including,
without limitation, reasonable attorneys' fees), but such reimbursements shall
not be in excess of the amount saved by Tenant by reason of Landlord's actions
in contesting such Impositions. Tenant shall reasonably cooperate with Landlord
in regard to any and all such contests.
ARTICLE 5
INSURANCE
28
SECTION 5.1 LANDLORD'S INSURANCE.
(a) Property Insurance. Landlord, at Tenant's sole cost and expense (such
------------------
cost and expense being a part of Tenant's Additional Rent hereunder), shall
obtain and continuously maintain in full force and effect at all times during
the Term, policies of insurance covering all of the Improvements, which
insurance shall be for the benefit of Landlord and its Mortgagees, as the named
insureds, against (i) loss or damage by fire; (ii) loss or damage from such
other risks or hazards now or hereafter embraced by a "Special Cause of Loss"
form, including without limitation, windstorm, hail, explosion, vandalism, riot
and civil commotion, damage from vehicles and aircraft, smoke damage, water
damage and debris removal; (iii) loss from flood if the Demised Premises are in
a federally designated flood area; (iv) loss from earthquake (if appropriate);
and (v) loss or damage from such other risks or hazards of a similar or
dissimilar nature which are now or may hereafter be customarily insured against
with respect to improvements similar in construction, design, general location,
use and occupancy to the Demised Premises ("Property Insurance"). The Property
Insurance shall not be subject to a deductible less than One Thousand and
00/100ths Dollars ($1,000.00) or greater than Ten Thousand and 00/100ths Dollars
($10,000.00).
At all times, the Property Insurance coverage shall be in an amount equal
to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements (except from the peril of flood in the event the Demised Premises
is located in a flood zone as identified by PEMA, in which event flood insurance
will be provided as an actual cash value basis),and shall include a so-called
"Agreed Amount Endorsement." Full Replacement Cost shall be interpreted to mean
the cost of replacing the Improvements, without deduction for depreciation,
obsolescence, or wear and tear, and shall include a reasonable sum for
architectural and engineering fees connected with the restoration or replacement
of the Improvements in the event of damages thereto or destruction thereof. Full
Replacement Cost shall be determined from time to time (but not more often than
once every three years), at the request of Tenant, or of Landlord or its
Mortgagees, by an appraiser, engineer, architect or contractor designated by the
party requesting such determination and at Tenant's expense. No omission on the
part of Landlord or Tenant to request any such determination shall relieve
Tenant of any of its obligations under this Article 5, nor shall it relieve
Tenant of any of its obligations in this Lease. Promptly after the construction
of any Tenant Work or any New Work (which Tenant Work and New Work by definition
is included, among other things, in the Improvements), Tenant shall inform
Landlord in writing of the fair market value and the Full Replacement Cost
thereof.
(b) Commercial Liability Insurance. Landlord, at Tenant's sole cost and
------------------------------
expense (such cost and expense being a part of Tenant's Additional Rent
hereunder), shall obtain and continuously maintain in full force and effect at
all times during the Term, Commercial Liability insurance covering claims for
bodily injury, personal injury or property damage for any loss, liability or
damage on, about or relating to the Demised Premises, or any portion thereof,
having limits of not less than Five Million and 00/100ths Dollars
($5,000,000.00) combined single limit on any occurrence basis ("Commercial
Liability Insurance"). Such policy shall name Landlord and Mortgagee as named
insureds and Tenant as an additional insured.
(c) Business Interruption Including Extra Expense (Loss of Rents and Extra
----------------------------------------------------------------------
Expense).
--------
29
Landlord, at Tenant's sole cost and expense (such cost and expense being a part
of Tenant's Additional Rent hereunder), shall obtain and continuously maintain,
in full force and effect, at all times during the Term, rental interruption
insurance, insuring against loss of all or any portion of the Rent due and
payable hereunder, for up to twelve (12) months ("Business Interruption
Insurance). Such policy shall name Landlord and its Mortgagees as insureds
thereunder. The Business Interruption Insurance limit shall include a reasonable
extra expense limited as determined by Landlord from time to time.
(d) Insurance Companies. The Property Insurance, the Commercial Liability
-------------------
Insurance and the Business Interruption Insurance provided under this Section
5.1 shall, as applicable, (i) be written with reputable companies licensed to do
business in the Commonwealth of Pennsylvania, having a Best's "General Policy
Holding Rating" of A- or better and a financial rating class of X or better;
(ii) cite the interest of Landlord and its Mortgagees in standard mortgagee
clauses effective as of the Initial Term Commencement Date (or as of the date on
which Landlord provides Tenant with Early Access, if applicable); (iii) be
maintained continuously throughout the Term; and (iv) if requested by Landlord,
provide for cancellation or material change thereto only upon at least thirty
(30) days' prior written notice to Landlord and its Mortgagees.
(e) Procurement by Tenant. Landlord shall advise Tenant, annually and in
---------------------
writing, of the cost, scope and carrier from whom Landlord proposes to procure
the insurance required of Landlord to be procured and maintained pursuant to
this Section 5.1. Within fifteen (15) days following Tenant's receipt of such
notice, Tenant may elect, by written notice to Landlord, to procure equal or
better coverage from an equal or better carrier, in each instance reasonably
acceptable to Landlord, provided, however, Landlord shall be the owner of such
coverage, regardless of whether the premiums therefor is paid directly by
Tenant. If Tenant fails to notify Landlord of such election within said fifteen
(15) days, Landlord shall procure the coverage, at Tenant cost as part of
Additional Rent, required to be procured and maintained by Landlord pursuant to
this Section 5.1.
SECTION 5.2 TENANT'S INSURANCE.
(a) Property Insurance. Tenant shall maintain insurance coverage upon all
------------------
personal property and Trade Fixtures of Tenant (including, without limitation,
boiler and pressure vessel and machinery peculiar to Tenant's use of the Demised
Premises), and the personal property of others kept, stored or maintain on the
Demised Premises on a "Special Cause of Loss" property insurance form, for the
full replacement cost thereof.
(b) General Liability Insurance. Tenant shall obtain and continuously
---------------------------
maintain in full force and effect commercial general liability insurance
covering claims for bodily injury, personal injury or property damage for any
loss, liability or damage on, about or relating to the use and occupancy of the
Demised Premises, or any portion thereof, having limits of not less than Five
Million and 00/100ths Dollars ($5,000,000.00) combined single limit on an
occurrence basis. Such policy shall name Tenant as named insured and Landlord
and its Mortgagees as additional insureds.
(c) Worker's Compensation Insurance. Tenant shall obtain and continuously
-------------------------------
maintain
30
in full force and effect Worker's Compensation and Employer's Liability
Insurance with statutory benefits, voluntary compensation coverage and
Employer's Liability limits of Five Hundred Thousand and 00/100ths Dollars
($500,000.00) each accident, Five Hundred Thousand and 00/100ths Dollars
($500,000.00) each employee for disease, and Five Hundred Thousand and 00/100ths
Dollars ($500,000.00) policy limit for disease.
(c) Insurance Approval. All policies of insurance required of Tenant under
------------------
this Article 5 shall be written in such form and by such companies licensed to
do business in Pennsylvania as shall be reasonably satisfactory to Landlord, and
its Mortgagees. Certificates of insurance reasonably acceptable to Landlord
shall be delivered to Landlord, and its Mortgagees, on or before the earlier of
the Initial Term Commencement Date or the date on which Tenant exercises its
rights to Early Access, if applicable. A new or replacement certificate of
insurance reasonably acceptable to Landlord, and its Mortgagees, shall be
delivered to Landlord, and its Mortgagees, within thirty (30) days' prior to the
expiration of the then current policy term.
(d) Cancellation Notice. Each policy of insurance required of Tenant under
-------------------
this Article 5 shall have attached thereto (i) an endorsement that such policy
shall not be canceled or materially changed without at least thirty (30) days'
prior written notice to Landlord and its Mortgagees, and Tenant, and (ii) an
endorsement to the effect that the insurance as to the interests hereunder of
Landlord, and Landlord's partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, Mortgagees, agents or employees
shall not be invalidated by any act or neglect of any person.
SECTION 5.3 CONTRACTOR'S INSURANCE.
(a) Landlord's Contractors. During any period of construction of
----------------------
Landlord's Improvements, Landlord shall cause Contractor or its other
contractors to obtain and continuously maintain in full force and effect,
general liability insurance (including, without limitation, contractual
liability coverage) with minimum limits of liability of Three Million and
00/100ths Dollars ($3,000,000.00) each occurrence and Two Million and 00/100th
Dollars ($2,000,000) combined single limit for bodily injury, personal injury
and property damage, builders' risk insurance, and worker's compensation
insurance with statutory benefits, voluntary compensation coverage and
Employer's Liability limits of One Hundred Thousand and 00/100ths Dollars
($100,000.00) each accident, One Hundred Thousand and 00/100ths Dollars
($100,000.00) each employee for disease, and Five Hundred Thousand and 00/100ths
Dollars ($500,000.00) policy limit for disease. Landlord shall require
Contractor to issue a certificate of insurance with Landlord and Tenant listed
as additional insured under general liability policy. Landlord and/or Contractor
shall carry builders risk insurance until the Delivery Date.
(b) Tenant's Contractors. During any period of construction by Tenant,
--------------------
Tenant shall cause Tenant's contractors to obtain and continuously maintain in
full force and effect (i) General Liability insurance with minimum limits of
liability of One Million and 00/100ths Dollars ($1,000,000.00) each occurrence
and Two Million and 100/100th Dollars ($2,000,000.00) combined single limit for
bodily injury, personal injury and property damage and including Landlord and
Landlord's Mortgagee as additional insureds, and (ii) workers compensation
insurance.
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SECTION 5.4 WAIVER OF SUBROGATION. Subject to this Section 5.4,
Landlord and Tenant each hereby waive any and every claim for recovery from the
other for any and all loss or damage to the Demised Premises or to the contents
thereof, which loss or damage is covered by the provisions of any property
insurance policy carried, or would have been covered by the provisions of any
property insurance policy required to be carried, by either party pursuant to
this Lease. Inasmuch as this mutual waiver will preclude (subject to this
Section 5.4) the assignment of any such claim by subrogation (or otherwise) to
an insurance company (or any other person), Landlord and Tenant each agree to
have such insurance policies properly endorsed, if necessary, to prevent the
invalidation of such insurance coverage by reason of such waiver. Anything in
this Section 5.4 to the contrary notwithstanding, if at any time during the Term
the waiver of subrogation clause required to be maintained by Landlord and
Tenant, respectively, is no longer available on terms which are commercially
reasonable, then Landlord and Tenant shall, in good faith, find a mutually
acceptable alternative to the benefits afforded each other as a result of such
mutual waiver of subrogation.
SECTION 5.5 REQUIREMENTS IN EVENT OF LOSS. In the event of loss or
damage to the Demised Premises or in the event of a claim in connection with the
injury or death of any person at the Demised Premises or by reason of operations
at the Demised Premises, Tenant shall (i) promptly notify Landlord thereof in
writing; (ii) prepare and present timely claims to the appropriate insurers on
behalf of Tenant, Landlord, Landlord's designated agent and the Mortgagee; and
(iii) adjust and settle such claim, provided, however, that if Tenant has failed
to settle such claims within six (6) months of the event of loss or damage,
injury or death, then, upon ten (10) days' prior written notice to Tenant,
Landlord, Landlord's designated agent and/or the Mortgagee shall have the right
to adjust and settle such claims. In the case of property damage claims
involving net insurance proceeds of more than Ten Thousand and 00/100ths Dollars
($10,000.00), no settlement shall be made without Landlord's written consent,
which will not be unreasonably withheld or delayed, and Landlord (and its
designated agent and/or the Mortgagee) shall be entitled, at Landlord's cost, to
participate in the adjustment process.
SECTION 5.6 PROCEEDS, PAYMENT AND POLICY PROVISIONS. The Property
Insurance and the Commercial Liability Insurance required by Section 5.1 hereof
shall provide that the proceeds thereof shall be jointly payable to Landlord, or
its Mortgagees, and shall be applied, if applicable, to the repair, replacement
or Restoration (as such term is defined in Section 11.1 hereof) of Landlord's
Improvements.
ARTICLE 6
USE, MAINTENANCE AND MANAGEMENT OF DEMISED PREMISES
SECTION 6.1 PREMISES USE. Tenant shall use and occupy the Demised
Premises as an office facility and any use related to Tenant's
telecommunications business and for customer services and retail sales of
telecommunications products, provided Tenant, at its sole cost and expense
obtains the necessary approvals so the same is permitted by and consistent with
all zoning and other applicable statutes, rules, orders ordinances,
requirements, regulations or laws and the Park covenants ("Premises Use"). The
Premises Use shall also include the right of Pennsylvania Cellular Telephone
Corp. or any company resulting from a merger of or into Pennsylvania Cellular
Telephone Corp. or any company to which Pennsylvania Cellular Telephone Corp.
assigned all or
32
substantially all of its assets (including this Lease) to use and locate
switching equipment or transmission satellite dishes or towers in or about the
Demised Premises, provided the related telecommunications business and
installations is permitted by and consistent with all zoning and other
applicable statutes, rules, orders, ordinances, requirements, regulations or
laws and the Park covenants, and such installation(s) (i) are done at Tenant's
sole cost and expense in a good workmanlike manner without detriment to any
structural component of the Demised Premises, (ii) are maintained by Tenant in
good condition and repair, (iii) do not increase the scope of Landlord's Repairs
and Maintenance (as defined in Section 6.3 hereof), and (iv) do not void or make
voidable any warranties affecting the Demised Premises. Any permitted sublessee
or assignee of Tenant shall be permitted to use any such switching equipment or
transmission satellite dishes or towers installed by Pennsylvania Cellular
Telephone Corp. as above provided, but shall not be permitted, as part of the
Premises Use, to constructed any additional switching equipment or transmission
satellite dishes or towers, unless such sublessee or assignee is a company
resulting from a merger of Pennsylvania Cellular Telephone Corp. as aforesaid or
is an assignee of all or substantially all of the assets (including this Lease)
of Pennsylvania Cellular Telephone Corp. Notwithstanding the foregoing, Tenant
shall not use or occupy the Demised Premises, or knowingly permit them to be
used or occupied, contrary to any statute, rule, order, ordinance, requirement
or regulation applicable thereto, or in any manner which would violate any
certificate of occupancy affecting the same, or which would make void or
voidable any insurance then in force with respect thereto or which would make it
impossible to obtain fire or other insurance thereon required to be furnished
hereunder by Landlord or Tenant, or which would cause structural injury to the
Improvements or cause the value or usefulness of the Demised Premises, or any
portion thereof, to diminish substantially, or which would constitute a public
or private nuisance or waste. Tenant shall promptly, upon discovery of any such
use, compel the discontinuance of such use.
Tenant shall not use, suffer or permit the Demised Premises, or any portion
thereof, to be used by Tenant, any third party or the public (as such), without
restriction or in such manner as might reasonably tend to impair Landlord's
title to the Demised Premises, or in such manner as might reasonably make
possible a claim or claims of adverse usage or adverse possession by the public
(as such), or third persons, or of implied dedication of the Demised Premises,
or any portion thereof. Nothing contained in this Lease and no action or
inaction by Landlord shall be deemed or construed to mean that Landlord has
granted to Tenant any right, power or permission to do any act or make any
agreement that may create, or give rise to or be the foundation for any such
right, title, interest, lien, charge or other encumbrance upon the estate of
Landlord in the Demised Premises.
SECTION 6.2 TENANT'S REPAIRS, MAINTENANCE AND REPLACEMENTS. Except for
the obligations of the Landlord as expressly provided in Section 6.3 hereof,
Tenant, at its sole cost and expense, throughout the Term, shall keep in good
order, condition and repair, and shall make and perform all routine maintenance
and necessary repairs, ordinary and extraordinary, foreseen and unforeseen, of
every nature, kind and description shall take good care of the Demised Premises
and shall keep the same in good order, condition and repair, and shall make and
perform all routine maintenance thereof and all necessary repairs thereto,
ordinary and extraordinary, foreseen and unforeseen, of every nature, kind and
description. When used in this Article 6 "repairs" shall specifically include,
without limitation, all necessary replacements, renewals and alterations. All
repairs made by Tenant, except as hereinafter provided, shall be at least equal
in quality to the original work and, in all events, shall be made by Tenant in
Compliance with Laws. The necessity for or adequacy of maintenance and repairs
shall be measured by the standards which are
33
appropriate for improvements of similar construction and class; provided,
however, that in all events, Tenant shall make all repairs necessary to avoid
any structural damage or other damage or injury to the Improvements.
In addition, except for the obligations of the Landlord provided in Section
6.3, herein, Tenant shall timely and properly repair and maintain all of the
Demised Premises, including, without limitation, electrical systems, plumbing
systems, heating, ventilating and air conditioning systems, fire protection
systems, other mechanical systems, and landscaping, in accordance with the
highest of the following standards: (a) the manufacturer's recommended
maintenance schedule which is necessary so as not to void, diminish or impair
any warranty for such item from time to time in effect; or (b) that which is
generally recognized as the industry standard for the required maintenance and
repair of each such item. Tenant shall also keep all portions of the Demised
Premises in a clean and orderly condition, free of snow, ice, dirt, rubbish,
debris and unlawful obstructions. All of Tenant's obligations and requirements
described in this Section 6.2 are herein collectively referred to as "Tenant's
Repairs and Maintenance." The time permitted for Tenant to effectuate Tenant's
Repairs and Maintenance shall be extended for such period as may reasonably be
necessary; provided, however, that Tenant shall continuously, diligently and in
good faith prosecute the same. In addition, Landlord, not more frequently than
annually during the Term, upon five (5) days written notice (except in the event
of an emergency or extraordinary condition), may cause, at Landlord's sole cost
and expense, independent private building inspectors, qualified in the specific
discipline, to make inspections of the Demised Premises, and the systems or
segments thereof, to determine Tenant's compliance under this Section 6.2.
If Tenant does not timely or properly perform Tenant's Repairs and
Maintenance as herein provided, Landlord may, but need not, after thirty (30)
days' notice to Tenant, make such repairs, replacements or maintenance in a
reasonably diligent fashion. Tenant shall pay to Landlord all of Landlord's
actual costs incurred in connection therewith, plus a fee of ten percent (10%)
of such cost, forthwith upon being billed therefor. Landlord may, but shall not
be required to, enter the Demised Premises at all reasonable times upon
reasonable notice (except in the instance of an emergency) to make such repairs,
alterations, improvements and additions to the Demised Premises or to any
equipment, fixtures or landscaping located on the Demised Premises, as Landlord
deems reasonably necessary and which Tenant failed to do as required in this
Lease after written notice from Landlord. However, any and all repairs,
replacements or maintenance made by Landlord pursuant to this Lease shall be
done in a reasonably diligent manner and so as to minimize any disruption to
Tenant's business operations.
SECTION 6.3 LANDLORD'S REPAIRS, MAINTENANCE AND REPLACEMENTS. Landlord,
at its sole cost and expense, throughout the Term, shall (i) keep in good order,
condition and repair, and shall make and perform all routine maintenance and
necessary repairs and replacements, ordinary and extraordinary, foreseen and
unforeseen, of every nature, kind and description, to the roof, floor slabs,
foundation walls and footings, structural steel, exterior walls, driveways,
roadways, sidewalks, curbs, parking areas, and loading areas (including, in the
instance of driveways, roadways, sidewalks, parking areas, and loading areas,
repaving and striping the same, as applicable) forming a part of Landlord's
Improvements, and (ii) make all Capital Replacements (as defined in Section 6.7)
of all or any portion of the heating, ventilating and air conditioning,
electrical, plumbing, fire protection and other mechanical systems forming a
part of Landlord's Improvements (collectively, in respect to clause (i) and (ii)
above, "Landlord's Repairs and
34
Maintenance"). Because Landlord shall not have any regular on-site presence at
the Demised Premises, Tenant agrees to timely advise Landlord, in writing, of
any Landlord's Repairs and Maintenance Tenant reasonably believes Landlord must
undertake.
SECTION 6.4 PROHIBITION AGAINST WASTE. Tenant shall not do or suffer
any waste or damage, disfigurement or injury to the Demised Premises (including,
without limitation, any and all improvements now or hereafter erected thereon,
and any and all fixtures or equipment now or hereafter located therein), or
permit or suffer any overloading of the floors or other use of the Improvements
that would place an undue stress on the same or any portion thereof beyond that
for which the same was designed.
SECTION 6.5 MISUSE OR NEGLECT. Anything in this Lease to the contrary
notwithstanding, Tenant shall be responsible for all repairs to the Demised
Premises which are made necessary by any misuse or neglect by Tenant, or any of
its partners, directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors, employees, agents or invitees, in or upon the Demised
Premises. Notwithstanding anything to the contrary contained in Section 6.3
hereof or elsewhere in this Lease, Landlord's Repairs and Maintenance shall not
impose any duty on the Landlord in respect to those Landlord's Improvements that
are the subject of Landlord's Repairs and Maintenance that are (a) damaged or
destroyed by the misuse or intentional acts of Tenant or any of its partners,
directors, officers, shareholders, contractors, subcontractors, sub-
subcontractors, employees, agents or invitees, in or upon the Demised Premises,
or (b) in disrepair or are damaged as a result of Tenant's failure to timely and
properly perform Tenant's Repairs and Maintenance.
SECTION 6.6 MANAGEMENT OF DEMISED PREMISES.
(A) Anything in this Lease to the contrary notwithstanding, Landlord
shall perform, or shall cause to be performed, all of Landlord's obligations
under this Lease in connection with Landlord's Repairs and Maintenance by an
independent third party property manager in a manner consistent with the first-
class standards of commercial property managers in the geographic area in which
the Demised Premises are located ("Landlord's Manager"). As of the Delivery
Date, Landlord's Manager shall be a property management entity with offices
locally in the Harrisburg area. Notwithstanding the foregoing, in the event any
successor Landlord determines that such local Landlord's Manager is not
performing Landlord's Repairs and Maintenance in to the standards required by
this Lease or at a commercially reasonable cost, such successor Landlord shall
be permitted to terminate such local Landlord's Manager and replace the same
with any other property management entity (regardless of whether located locally
in this Harrisburg area) that is reasonably acceptable to Tenant. During the
Term, Tenant shall pay to Landlord, as part of the Additional Rent, (i) a
monthly fee equal to the actual out-of-pocket cost to Landlord paid to the
Landlord's Manager, but in no instance and amount greater than one and one
quarter percent (1.25 %) of the monthly Base Rent required by Tenant to be paid
at the subject time during the Term ("Management Fee").
In the event that, at any time during the Term, Tenant reasonably
determines that Landlord has failed to properly perform Landlord's Repairs and
Maintenance, then Tenant shall give the Landlord written notice thereof setting
forth, with reasonable specificity, the type and nature of the subject
deficiencies. Following the receipt of such notice of deficiency, Landlord shall
35
have a period of thirty (30) days in which to cure such noticed deficiencies and
advise Tenant of the actions taken by Landlord to cure the same, provided,
however, if a deficiency is not susceptible to cure within such thirty (30)
period, Landlord shall nonetheless be deemed curing, if Landlord commences such
cure within said thirty (30) day period and thereafter diligently prosecutes the
same to completion. If the Landlord fails to take reasonable actions to cure the
noticed deficiencies, then Tenant shall have the right to direct Landlord to
terminate the Landlord's Manager and replace it with a substitute Landlord's
Manager reasonably acceptable to Tenant.
During the Term, Tenant shall be permitted to retain, at Tenant's sole cost
and expense, such other property management entity Tenant reasonably chooses to
perform Tenant's Repairs and Maintenance and/or any of Tenant's other
performance obligations under the terms of this Lease.
(b) Landlord shall maintain or cause the Landlord's Manager to
maintain a temperature range for all office areas within the Demised Premises
between 68 Fahrenheit and 76 Fahrenheit and FDB relative humidity at a level of
not greater than fifty percent (50%) from 7:00 A.M. to 7:00 P.M. (Saturdays 8:00
A.M. to 1:00 P.M.), Sundays and holidays excepted, and shall maintain the air
quality within the Demised Premises within ASHRAE standards. Notwithstanding the
foregoing, Landlord shall not be responsible for such standards during
emergencies or when a Tenant's or Landlord's Repairs and Maintenance is being
undertaken that, in either instance, affect the heating, ventilating and air
condition systems of the Demised Premises. A reasonable period of time at the
beginning of the heating and cooling season shall be allocated for adjustments
to the HVAC system by Landlord. The relocation of Tenant's personnel within the
Demised Premises (or a change in use of any area of the Demised Premises,
provided it is nonetheless a Permitted Use) shall not diminish Landlord's
obligation to meet the temperature, humidity, and air quality standards
hereunder, so long as a reasonable period of time is afforded to the Landlord
after notice from the Tenant for the Landlord to adjust or modify the HVAC
system as may be necessary to accommodate such relocation or change in use.
SECTION 6.7 CAPITAL REPLACEMENT. "Capital Replacement," for purposes of
this Lease, shall mean the replacement of a capital item (as defined in the
United States Internal Revenue Code, 1984, as amended) comprising a part of
Landlord's Improvements having a cost in excess of $5,000.00, which $5,000.00
amount shall be increased over the Term by the percentage by which the CPI Index
published nearest to the expiration of each twelve (12) month period subsequent
to the Initial Term Commencement Date is greater than the CPI Index most
recently published prior to the Initial Term Commencement Date
ARTICLE 7
COMPLIANCE WITH LAWS AND ORDINANCES
SECTION 7.1 COMPLIANCE. Tenant shall, throughout the Term and at Tenant's
sole cost and expense, promptly comply or cause compliance with or remove or
cure any violation of any and all present and future laws, ordinances (zoning or
otherwise), orders, rules, regulations and requirements, as are now, or may from
time to time hereafter, be in effect, of all federal, state, municipal and other
governmental bodies having jurisdiction over the Demised Premises, and the
appropriate departments, commissions, boards and officers thereof (subject only
to Section 7.3 hereof), and the orders, rules and regulations, as are now, or
may from time to time hereafter, be in effect, of the Board of Fire Underwriters
where the Demised Premises are situated, or of any other body now or hereafter
constituted exercising lawful or valid authority over the Demised Premises,
36
or any portion thereof, or the sidewalks, curbs, roadways, alleys or entrances
adjacent or appurtenant thereto, or exercising authority with respect to the use
or manner of use of the Demised Premises, and whether the compliance, curing or
removal of any such violation and the costs and expenses necessitated thereby
shall have been foreseen or unforeseen, ordinary or extraordinary, and whether
the same shall be presently within the contemplation of Landlord or Tenant or
shall involve any change of governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and irrespective of
the costs thereof ("Compliance with Laws"). Regardless of the foregoing
provisions, Tenant's obligations with regard to Compliance with Laws shall not
extend to any compliance with or removal or cure of any violation of any laws,
ordinances, zoning or otherwise, orders, rules, regulations and requirements of
federal, state, municipal or governmental bodies which results from the
construction of the Demised Premises or other circumstances, facts, conditions
or events which occurred or were in existence as of or prior to the Initial
Commencement Date.
SECTION 7.2 OTHER COMPLIANCE. Tenant, at its sole cost and expense, shall
comply with all agreements, contracts, easements, restrictions, reservations or
covenants, if any, running with the Land, or hereafter created by Tenant or
consented to, in writing, by Tenant, or requested, in writing, by Tenant. Tenant
shall also comply with, observe and perform all provisions and requirements of
all policies of insurance at any time in force with respect to the Demised
Premises and required to be obtained and maintained under the terms of Article 5
hereof, and shall comply with all development permits issued by governmental
authorities issued in connection with development of the Demised Premises.
SECTION 7.3 ENVIRONMENTAL MATTERS.
(a) Landlord, Contractor and Tenant Mutual Covenants. In addition to the
------------------------------------------------
compliance requirements set forth herein, and not by way of limitation thereof,
Landlord, Contractor and Tenant mutually covenant and agree as set forth in this
Section 7.3.
(b) Definitions. As used in this Section 7.3, the following terms shall
-----------
have the following meanings:
(i) "Environmental Condition(s)" means the presence on, in or under the
Demised Premises of any Hazardous Substance(s) except as are in
compliance with Environmental Laws, whether such presence is in
ambient air, surface water, groundwater, land surface or subsurface
strata.
(ii) "Environmental Laws" means all federal, state or local environmental
laws, and any and all policies, rules and regulations thereunder,
which are, at any time and from time to time, applicable to the
Demised Premises, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., the Solid Waste Disposal Act and Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; the
Clean Water Act, 33 U.S.C. Section 1251, et seq.; the Clean Air Act,
42 U.S.C. Section 7401, et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601, et seq.; and the Safe
37
Drinking Water Act, 42 U.S.C. Section 300f through 300j, and the
Clean Streams Law, as amended (35 P.S. Section 681.101, et seq.; the
Solid Waste Management Act, as amended (35 P.S. Section 6801.101, et
seq.; and the Hazardous Sites Clean Act (35 P.S. Section 6020.101, et
seq., and the regulations adopted and publications promulgated
pursuant thereto.
(iii) "Environmental Liability(ies)" means any Environmental Conditions
with respect to which there are effective and applicable
Environmental Laws pursuant to which any regulatory authorities
having jurisdiction over the Demised Premises would have authority to
require remediation activities. Designation of a condition as an
Environmental Liability by any regulatory authorities or other third
parties, shall not be construed as an admission thereof by either
Landlord, Contractor or Tenant.
(iv) "Hazardous Substances" means (A) any material or substance (1) which
is defined as a "hazardous substance," "hazardous waste," "chemical
mixture or substance," or "air pollutant" under any Environmental
Laws, (2) containing petroleum, crude oil or any fraction thereof,
(3) containing polychlorinated biphenyls PCB's, (4) containing
asbestos, or (5) which is radioactive; (B) any other material or
substance displacing toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their respective
broadest senses, or are defined or become defined under any
Environmental Laws; or (C) any materials which cause a nuisance upon
or waste to the Demised Premises or any portion thereof.
(c) Landlord Representation; Landlord Indemnity. To Landlord's actual
-------------------------------------------
knowledge (being the actual knowledge of those representatives of Landlord
identified in Section 19.5 hereof), and except as may be set forth in that
certain environmental site assessment report entitled "Commerce Park Lots 1,2
and 7 Phase I Environmental Site Assessment Final Report," dated as of August,
1997, and prepared by ▇▇▇▇▇▇ and ▇▇▇, Inc., as of the date of this Lease, no
Environmental Conditions exist on the Land. To the extent, if any, and only to
the extent, that (i) Landlord is in breach of the first sentence of this Section
7.3(c), or (ii) Landlord, or its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, Mortgagees, agents or
employees, directly cause any Environmental Conditions on the Demised Premises,
or any portion thereof, then Landlord shall indemnify and save Tenant, and its
partners, directors, officers, shareholders, contractors, subcontractors, sub-
subcontractors, agents and employees, harmless from and against the direct out-
of-pocket costs and expenses (and not any indirect or consequential loss, cost
or damage or any other direct loss, cost or damage) incurred by any one or more
of them in order to clean-up or remediate the Demised Premises to the extent
required by applicable Environmental Laws), and from and against any and all
other direct liability, loss, cost or damage, including, without limitation,
reasonable attorneys' fees and court costs, incurred or sustained by any one or
more of Tenant and its partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, agents and employees as a result of such
breach or of such Environmental Conditions.
(d) Contractor Indemnity. To the extent, if any, and only to the extent,
--------------------
that Contractor,
38
or its partners, directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors, agents or employees, directly cause any Environmental
Conditions on the Demised Premises, or any portion thereof, then Contractor
shall indemnify and save Tenant, and its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, agents and
employees, harmless from and against the direct out-of-pocket costs and expenses
(and not any indirect or consequential loss, cost or damage or any other direct
loss, cost or damage) incurred by any one or more of them in order to clean-up
or remediate the Demised Premises to the extent required by the governmental
authorities having jurisdiction and responsibility for the enforcement of the
applicable Environmental Laws, and from and against any and all other direct
liability, loss, cost or damage, including, without limitation, reasonable
attorneys' fees and court costs, incurred or sustained by any one or more of
them as a result of such of such Environmental Conditions.
(e) Tenant Covenant; Tenant Indemnity. To the extent, if any, and only to
---------------------------------
the extent, that Tenant, or its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents or employees, (i) are in
breach of any of its covenants, agreements or obligations under this Article 7,
or (ii) directly cause any Environmental Conditions on the Demised Premises, or
any portion thereof, then Tenant shall indemnify and save Landlord, Contractor
and each of their respective partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, Mortgagees, agents and
employees, harmless from and against the direct out-of-pocket costs and expenses
(and not any indirect or consequential loss, cost or damage or any other direct
loss, cost or damage) incurred by any one or more of them in order to clean-up
or remediate the Demised Premises to the extent required by the governmental
authorities having jurisdiction and responsibility for the enforcement of the
applicable Environmental Laws, and from and against any and all other direct
liability, loss, cost or damage, including, without limitation, reasonable
attorneys' fees and court costs, incurred or sustained by any one or more of
them as a result of such of such breach or of such Environmental Conditions.
Upon the expiration or earlier termination of this Lease, Tenant shall cause all
Hazardous Substances (to the extent such Hazardous Substances are generated,
stored, released or disposed of during the Term by Tenant) to be removed from
the Demised Premises and transported for use, storage or disposal in accordance
and in compliance with all applicable Environmental Laws.
(f) Notice. If a claim by a third person (including, without limitation,
------
any governmental entity) is made against any person or entity indemnified
hereunder, and such person or entity intends to seek indemnification with
respect to such claim under this Section 7.3, such person or entity seeking such
indemnification shall promptly give notice of such claim to the indemnifying
party. In addition, if a person or entity indemnified under this Section 7.3
comes into possession of facts which could reasonably lead to a claim for
indemnification under this Section 7.3, such party shall promptly give notice of
such facts to the indemnifying party. If Tenant is notified or cited for any
violation (or possible violation) of any Environmental Liability, Environmental
Laws or other hazardous materials laws, by any governmental body having
jurisdiction of the Demised Premises, with regard to any Environmental
Condition, Tenant shall promptly notify Landlord thereof, and shall include with
such notification copies of such governmental notification or citation and such
other documents as may be reasonably necessary to describe the alleged violation
(or possible violation).
(g) Exclusive Remedy and Survival. Notwithstanding any other indemnities
-----------------------------
set forth herein, the parties agree that the foregoing indemnifications shall
exclusively define their rights and
39
obligations with respect to Environmental Liabilities arising from or related to
the Demised Premises. The provisions of this Section 7.3 shall survive the
termination of the Lease and be effective for so long as Landlord, Contractor or
Tenant may have any liability whatsoever with respect to the Demised Premises.
(h) Compliance with Other Laws. Subject to Section 7.1 hereof and the
--------------------------
foregoing provisions of this Section 7.3, Tenant, at its sole cost and expense,
shall fully comply with (as part of its obligations hereunder as to Compliance
with Laws), and provide to Landlord all information needed from time to time in
regard to, all provisions of all applicable federal, state and local
environmental protection acts, responsible property transfer laws, and any other
applicable federal, state or local environmental liability or protection or
cleanup responsibility laws, either currently in effect or hereafter enacted,
which affect Tenant's operations at the Demised Premises.
(i) Storage of Hazardous Materials. Tenant shall not install, handle,
------------------------------
generate, store, treat, use, dispose of, discharge, release, manufacturer,
refine, emit, ▇▇▇▇▇, remove, transport or conduct any other activity with
respect to, on, in or around the Demised Premises (collectively, "handle"), any
Hazardous Substances or any material deemed to be toxic or hazardous by any
governmental authority having jurisdiction over the Demised Premises; provided,
however, that notwithstanding the foregoing, (i) Tenant may handle, or cause to
be handled, normal quantities of Hazardous Substances or other materials as
aforesaid, customarily used in (i) the conduct of general administrative and
executive office activities (e.g., copier fluids and cleaning supplies), and
(ii) connection with the operation, repair and/or replacement of the back-up
generator or back-up temporary stand-by battery power generator. Any and all
such Hazardous Substances or other materials, regardless of whether customarily
used in the conduct of general administrative and executive office activities or
back-up diesel generator or back-up temporary stand-by battery power generator,
shall be handled in accordance with any and all applicable Environmental Laws.
(j) Environmental Audits. Upon Landlord's request, prior to the exercise
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of any option to renew for a Renewal Term and prior to Tenant's vacation of the
Demised Premises, Tenant shall undertake and submit to Landlord an environmental
audit from an environmental company reasonably acceptable to Landlord, which
audit shall be conducted in accordance standards reasonably imposed by Landlord,
and shall otherwise evidence Tenant's compliance with this Article 7. If
Tenant, at any time prior to Landlord's request for an environmental audit, has
been cited for violation of any Environmental Laws, such environmental audits
shall be at Tenant's sole cost and expense. In all other instances, Landlord
shall pay the cost and expense of such requested environmental audits.
ARTICLE 8
MECHANIC'S LIENS AND OTHER LIENS
SECTION 8.1 LIENS AND RIGHT OF CONTEST. Tenant shall not suffer or permit
any mechanic's lien or other lien to be filed against the Demised Premises, or
any portion thereof, by reason of work, labor, skill, services, equipment or
materials supplied or claimed to have been supplied to the Demised Premises at
the request of Tenant, or anyone holding the Demised Premises, or any portion
thereof, by, through or under Tenant. If any such mechanic's lien or other lien
shall at any time be filed against the Demised Premises, or any portion thereof,
Tenant shall cause the same to be
40
discharged of record within thirty (30) days after the date of filing the same.
However, in the event Tenant desires to contest the validity of any lien, it
shall (a) on or before thirty (30) days prior to the due date thereof, notify
Landlord, in writing, that Tenant intends so to contest the same, and (b) on or
before the due date thereof, if Landlord reasonably deems Tenant to be
financially insecure or if any Mortgagee of Landlord so requires, deposit with
Landlord security (in form and content reasonably satisfactory to Landlord or
Landlord's Mortgagees) for the payment of the full amount of such lien and, from
time to time, deposit additional security or indemnity so that, at all times,
adequate security or indemnity will be available for the payment of the full
amount of the lien together with all interest, penalties, costs and charges
accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in good faith,
to contest the validity of such lien by appropriate legal proceedings which
shall operate to prevent the collection thereof and the sale or forfeiture of
the Demised Premises, or any part thereof, to satisfy the same, Tenant shall be
under no obligation to pay such lien until such time as the same has been
decreed, by court order, to be a valid lien on the Demised Premises. Any surplus
deposit retained by Landlord, after the payment of the lien shall be repaid to
Tenant. Provided that nonpayment of such lien does not cause Landlord to be in
violation of any of its contractual undertakings, Landlord agrees not to pay
such lien during the period of Tenant's contest. However, if Landlord pays for
the discharge of a lien or any part thereof from funds of Landlord, any amount
paid by Landlord, together with all costs, fees and expenses in connection
therewith (including, without limitation, reasonable attorneys' fees of
Landlord), together with interest thereon at the Maximum Rate of Interest, shall
be repaid by Tenant to Landlord on demand by Landlord. Tenant shall indemnify
and save Landlord, and its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, Mortgagees, agents and
employees, and the Demised Premises, harmless from and against any and all loss,
cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with the assertion, filing,
foreclosure or other legal proceedings with respect to any such mechanic's lien
or other lien or the attempt by Tenant to discharge the same as above provided.
All materialmen, contractors, artisans, mechanics, laborers and any other
person now or hereafter furnishing any labor, services, materials, supplies or
equipment to Tenant with respect to the Demised Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Demised Premises, or any
portion thereof.
SECTION 8.2 LIENS ON LANDLORD'S AND CONTRACTOR'S WORK. The provisions of
Section 8.1 hereof shall not apply to any mechanic's lien or other lien for
labor, services, materials, supplies, machinery, fixtures or equipment furnished
to the Demised Premises in the performance of Landlord's or Contractor's
obligations to construct Landlord's Improvements, or to provide Warranty Work or
Punch List Item work required herein. Landlord shall indemnify and save Tenant,
and its partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, agents and employees, harmless from and
against any and all direct (but not indirect or consequential) loss, cost or
damage, including, without limitation, reasonable attorneys' fees, incurred or
sustained by any of them in connection with the assertion, filing, foreclosure
or other
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legal proceedings with respect to any such mechanic's lien or other lien.
Landlord shall cause the Contractor to enter into and duly record a waiver of
mechanics' liens pursuant to a Pennsylvania Mechanics' Lien law in such form and
substance, so as to result in an effective waiver of mechanics' liens pursuant
to said law.
SECTION 8.3 OTHER LIENS. Tenant shall not create, permit or suffer, and,
subject to the provisions of Section 8.1 hereof, shall promptly discharge and
satisfy of record, any other lien, encumbrance, charge, security interest, or
other right or interest which, as a result of Tenant's action or inaction
contrary to the provisions hereof, shall be or become a lien, encumbrance,
charge or security interest upon the Demised Premises, or any portion thereof,
or the income therefrom.
ARTICLE 9
INTENT OF PARTIES
SECTION 9.1 NET RENT. Landlord and Tenant do each state and represent that
it is their respective intention that this Lease be interpreted and construed as
an absolute net lease and that all Base Rent and Additional Rent shall be paid
by Tenant without abatement, deduction, diminution, deferment. suspension,
reduction, set off, defense or counterclaim with respect to the same. Except as
otherwise provided herein, the obligations of Tenant shall not be affected by
reason of damage to or destruction of the Demised Premises from whatever cause,
nor shall the obligations of Tenant be affected by reason of any condemnation,
eminent domain or like proceedings.
SECTION 9.2 LANDLORD'S PERFORMANCE FOR TENANT. If Tenant shall at any time
fail to pay any Additional Rent in accordance with the provisions hereof, or
shall fail to make any other payment or perform any other act on its part to be
made or performed, then Landlord, after fifteen (15) days' prior written notice
to Tenant (or without notice in case of emergency), and without waiving or
releasing Tenant from any obligation of Tenant contained in this Lease, may, but
shall be under no obligation to do so, (a) pay after such fifteen (15) days'
written notice to Tenant, any such Additional Rent payable by Tenant pursuant to
the provisions hereof; or (b) make any other payment or perform any other act on
Tenant's part to be paid or performed hereunder, except that any time permitted
to Tenant to perform any act required to be performed by Tenant hereunder shall
be extended for such period as may be necessary to effectuate such performance,
provided Tenant is continuously, diligently and in good faith prosecuting such
performance. Landlord may enter upon the Demised Premises for any such purpose
and take all such action therein or thereon as may be necessary therefor and all
such action taken by Landlord shall be in a reasonably diligent fashion.
SECTION 9.3 PAYMENT FOR LANDLORD'S PERFORMANCE FOR TENANT. All sums so paid
by Landlord and all costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Maximum Rate
of Interest from the respective dates of Landlord's making of each payment of
such cost and expense, shall be paid by Tenant to Landlord on demand.
Landlord shall not be limited in the proof of any damages which Landlord
may claim against Tenant arising out of or by reason of Tenant's failure to
provide and keep in force insurance as aforesaid, to the amount of the insurance
premium or premiums not paid or not incurred by Tenant, and which would have
been payable upon such insurance. Rather, Landlord shall also be
42
entitled to recover, as damages for such breach, the uninsured amount of any
loss (to the extent of any deficiency between the dollar limits of insurance
required by the provisions of this Lease and the dollar limits of the insurance
actually carried by Tenant), damages, costs and expenses of suit, including,
without limitation, reasonable attorneys' fees, suffered or incurred by reason
of damage to or destruction of the Demised Premises, or any portion thereof, or
other damage or loss which Tenant is required to insure against hereunder,
occurring during any period when Tenant shall have failed or neglected to
provide insurance as aforesaid.
ARTICLE 10
DEFAULTS AND LANDLORD'S REMEDIES
SECTION 10.1 DEFAULT. The following events, after the expiration of the
applicable cure periods in this Article 10 (except as otherwise provided in this
Lease), are sometimes referred to as an event of "Default":
(a) If default shall be made by Tenant under the provisions of Article 13
hereof relating to assignment, sublease, mortgage or other transfer of
Tenant's interest in this Lease or in the Demised Premises or in the
income arising therefrom;
(b) If default shall be made in the due and punctual payment of Base Rent
or any installment thereof, or if default shall be made in the payment
of Additional Rent or in the payment of any other sum required to be
paid by Tenant under this Lease, after five (5) days' written notice,
except that Tenant shall be permitted, not more than once each
calendar year during the Term, to be late by not more than ten (10)
days in the payment of any installment of Base Rent or Additional Rent
hereunder before Landlord shall be permitted to declare a Default by
Tenant;
(c) If default shall be made in the observance or performance of any of
the other covenants or conditions in this Lease which Tenant is
required to observe and perform, and such default shall continue for
thirty (30) days after written notice to Tenant, or if a default
involves a hazardous or emergency condition and is not cured by Tenant
immediately, provided, however, that the time allowed Tenant (except
in the instance of hazardous or emergency conditions) within which
Tenant is permitted to cure the same shall be extended for such
reasonable period as may be necessary for the curing, provided Tenant
is continuously, diligently and in good faith prosecuting such cure;
and
(d) If, during the Term, (i) Tenant shall make an assignment for the
benefit of creditors, (ii) a voluntary petition shall be filed by
Tenant under any law having for its purpose the adjudication of Tenant
a bankrupt, or Tenant shall be adjudged a bankrupt pursuant to an
involuntary petition in bankruptcy, (iii) a receiver shall be
appointed for the property of Tenant, or (iv) any
43
department of the state or federal government, or any officer thereof
duly authorized, shall take possession of the business or property of
Tenant, Landlord may treat the occurrence of any one or more of the
foregoing events of Default as a breach of this Lease.
In any such event, Landlord, at any time thereafter during the continuance
of any such event of Default, may give written notice to Tenant specifying such
event of Default or events of Default and stating that this Lease and the Term
hereby demised shall expire and terminate on the date specified in such notice,
and upon the date specified in such notice, this Lease and the Term hereby
demised, and all rights of Tenant under this Lease, including, without
limitation, all rights of renewal whether exercised or not, shall expire and
terminate, or in the alternative or in addition to the foregoing remedy,
Landlord may assert and have the benefit of any and all other remedies and
rights provided at law or in equity.
SECTION 10.2 RENT AFTER DEFAULT. In the event of an uncured Default,
Landlord may terminate this Lease and the Term created hereby, in which event
Landlord may forthwith repossess the Demised Premises and be entitled to recover
as damages, in addition to any other sums or damages for which Tenant may be
liable to Landlord hereunder, a sum of money equal to the excess of the value of
the Rent provided to be paid by Tenant for the balance of the Term over the fair
market rental value of the Demised Premises, after deduction of all anticipated
expenses of re-letting for said period, and discounting the amount to a present
value using an interest rate equal to the prime rate of interest published in
the Wall Street Journal at the time such present value is determined, but if
-------------------
such rate of interest shall exceed the highest rate allowed by law, such rate
shall be reduced to the highest rate allowed by law. Should the fair market
rental value of the Demised Premises, after deduction of all anticipated
expenses of re-letting, for the balance of the Term, exceed the value of the
Rent provided to be paid by Tenant for the balance of the Term, Landlord shall
have no obligation to pay Tenant the excess or any part thereof, or to credit
such excess or any part thereof against any other sums or damages for which
Tenant may be liable to Landlord.
SECTION 10.3 RE-LETTING AFTER DEFAULT. To the extent permitted by law,
in the event of a Default, Landlord may terminate Tenant's right of possession
and may repossess the Demised Premises by forcible entry and detainer suit, by
taking peaceful possession or otherwise, without terminating this Lease. In such
event, Landlord shall use good faith efforts to relet the same for the account
of Tenant, for such rent and upon such terms as may be satisfactory to Landlord.
For the purpose of such re-letting, Landlord is authorized to repair, remodel or
alter the Demised Premises. If Landlord shall fail to relet the Demised
Premises, Tenant shall pay to Landlord, as damages, a sum equal to the amount of
Rent reserved in this Lease for the balance of the Initial Term or the Renewal
Term, as the case may be, as the same becomes due and payable. If the Demised
Premises are relet and a sufficient sum shall not be realized from such re-
letting, after paying all of the costs and expenses of all decoration, repairs,
remodeling, alterations and additions and the expenses of such re-letting and of
the collection of the rent accruing therefrom, to satisfy the Rent provided for
in this Lease, Tenant shall satisfy and pay the same upon demand therefor from
time to time. Tenant agrees that Landlord may file suit to recover any sums
failing due under the terms of this Article 10 from time to time, and that no
suit or recovery of any portion due to Landlord hereunder shall be any defense
to any subsequent action brought for any amount not theretofore reduced to
judgment in favor of Landlord.
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SECTION 10.4 ACCEPTANCE AFTER DEFAULT; NO WAIVER. No failure by Landlord or
Tenant, as the case may be, to insist upon the performance of any of the terms
of this Lease or to exercise any right or remedy consequent upon a breach
thereof, and no acceptance by Landlord of full or partial Rent from Tenant or
any third party during the continuance of any such breach, shall constitute a
waiver of any such breach or of any of the terms of this Lease. None of the
terms of this Lease to be kept, observed or performed by either party hereunder,
and no breach thereof, shall be waived, altered or modified except by a written
instrument executed by both Landlord and Tenant. No waiver of any breach shall
affect or alter this Lease, but each of the terms of this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
breach of this Lease. No waiver of any Default of Tenant herein shall be implied
from any omission by Landlord to take any action on account of such Default. If
such Default persists or is repeated, no express waiver shall affect any Default
other than the Default specified in the express waiver, and then only for the
time and to the extent therein stated. One or more waivers by Landlord or by
Tenant, as the case may be, shall not be construed as a waiver of a subsequent
breach of the same covenant, term or condition.
SECTION 10.5 REMEDIES CUMULATIVE. Upon a default by Tenant of any of the
terms contained in this Lease, Landlord shall be entitled to invoke any right or
remedy allowed at law or in equity or by statute or otherwise as though entry,
reentry, summary proceedings and other remedies, as the case may be, were not
provided for in this Lease. Each remedy or right of Landlord provided for in
this Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease, or now or hereafter existing at law or in
equity or by statute or otherwise. The exercise or the beginning of the exercise
by Landlord of any one or more of such rights or remedies, except as otherwise
provided herein, shall not preclude the simultaneous or later exercise by
Landlord of any or all other rights or remedies.
SECTION 10.6 LANDLORD DEFAULT. Subject to Section 14.2 hereof, if at any
time during the Term, Landlord has failed to perform any of its limited
obligations under this Lease, then Tenant shall provide written notice of such
default to Landlord. If, within thirty (30) days after Landlord's receipt of
Tenant's notice (or such shorter time as is reasonable, in the case of an
emergency), Landlord has not cured such default, or has not commenced and
diligently pursued the cure thereof, then Tenant shall provide an additional
written notice to Landlord. Then, if Landlord does not cure such default, or
does not commence and diligently pursue such cure, within ten (10) days (or such
shorter time as is reasonable, in the case of an emergency) after Landlord's
receipt of such additional notice, then Tenant may, in Tenant's sole discretion
take such steps to cure such default as may be reasonably required. Landlord
shall reimburse Tenant for the reasonable costs and expenses of such cure,
including reasonable attorneys fees, with interest at the Maximum Rate of
Interest from the date of the invoices to the date of payment by Landlord, and a
ten percent (10%) administrative fee within thirty (30) days after Tenant has
provided Landlord with a written statement thereof, together with reasonable
supporting documentation. However, anything in this Section 10.6 or elsewhere in
this Lease to the contrary notwithstanding, no actions taken by Tenant to cure
any default of Landlord under this Lease shall ever be deemed (a) to constitute
an eviction or disturbance of Tenant's use and possession of the Demised
Premises, (b) to relieve Tenant from any of its obligations to pay Rent when
due, without abatement (except as otherwise expressly provided in this Lease),
or (c) to perform any of Tenant's other obligations under this Lease.
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ARTICLE 11
DESTRUCTION AND RESTORATION
SECTION 11.1 RESTORATION. In the event of any damage to or destruction of
Landlord's Improvements, upon the occurrence thereof, Tenant shall forthwith
give Landlord written notice (except in cases of emergency when Landlord may be
notified by telephone, with a written notification to follow promptly) of such
damage or destruction, and shall specify in such notice, in reasonable detail,
the extent thereof. If any such damage or destruction occurs, the restoration,
repair, replacement, rebuilding (including, without limitation, the cost of
temporary repairs) of Landlord's Improvements or any portion thereof to the
condition (as is reasonably practical) existing immediately prior to such damage
or destruction are sometimes hereinafter referred to as the "Restoration." In
all instance of Restoration, Landlord shall employ its diligent efforts to
reasonably promptly complete the Restoration required of it with as little
disruption of the Premises Use as is reasonably practicable.
Except as hereafter provided, in case of damage to or destruction of all or
a portion of Landlord's Improvements by fire or otherwise during the Term,
Landlord, at the cost and expense hereafter provided, shall, within sixty (60)
days after the date of the damage or destruction, commence and thereafter
diligently complete the Restoration for which the Property Insurance set forth
in Section 5.1 hereof was procured. Notwithstanding the foregoing, Landlord
shall not be obligated to undertake the Restoration in the event any such damage
or destruction (i) occurs at any time during the last twelve (12) months of the
then current Term (including any renewals hereunder), or (ii) is of such a
degree that no reasonable portion of Landlord's Improvements can be occupied for
the Premises Uses and the damage or destruction occurs at such a time of the
year, taking into account seasonal weather conditions, that the Restoration
cannot be reasonably completed within three hundred and sixty-five (365) days.
In any of the foregoing instances, Landlord shall provide Tenant with notice,
within forty-five (45) days of such damage or destruction, of Landlord's
decision whether Landlord will undertake the Restoration. If Landlord has failed
to deliver the foregoing notice, it shall be conclusively presumed that Landlord
has elected to undertake the Restoration. If Landlord has elected, as aforesaid,
not to undertake the Restoration, then Tenant may terminate this Lease by
providing Landlord with notice thereof within fifteen (15) days of the notice
from Landlord.
Regardless of the foregoing, in the instance of any destruction of
Landlord's Improvements in respect to which Landlord has elected (or is deemed
to have elected, as aforesaid) to undertake the Restoration, Tenant may
nonetheless terminate this Lease, if Landlord does not commence the Restoration
within sixty (60) days after the date of such destruction. For purposes of this
Section 11.1, Landlord shall be deemed to have "commenced" the Restoration, if
Landlord has commissioned the preparation of plans and specifications necessary
for such Restoration or undertaken other meaningful measures necessary, in a
commercially reasonable context, to effectuate such Restoration. If Landlord
commences the Restoration more than sixty (60) days after the subject
destruction, and Tenant has not yet then delivered to Landlord Tenant's notice
of termination of this Lease, Tenant shall be deemed to have waived the
immediately foregoing right of termination on the date Landlord commenced the
subject Restoration. If the Restoration is
46
commenced, Tenant may nonetheless thereafter elect to terminate this Lease, if,
(i) in the instance of a complete destruction of Landlord's Improvements
resulting in the inability of Tenant to reasonably occupy any of the Landlord's
Improvements for the Premises Uses, Landlord does not complete the Restoration
within three hundred sixty-five (365) days after the date of such destruction,
or (ii) in the instance of a partial destruction of Landlord's Improvements
resulting in Tenant being able to continue to reasonably occupy a material
portion of Landlord's Improvements for the Premises Uses, Landlord does not
complete the Restoration within two hundred seventy (270) days after the date of
such destruction.
If Landlord's Improvements are damaged or destroyed so that no portion
thereof can be reasonably occupied for the Premises Uses, the Base Rent and
Additional Rent shall ▇▇▇▇▇ as of the date of the damage until the Restoration
is complete and an occupancy permit and all other permits and approvals are
issued such that the Tenant can reoccupy the Demised Premises. If the damage or
destruction is or such a degree so that Tenant can continue to use the Demised
Premises in a manner that permits the Tenant to continue to conduct its business
operations in a useful and efficient manner, as determined in the reasonable
discretion of the Tenant, then the Base Rent and Additional Rent shall be fairly
and equitably reduced to reflect the limited use of the Demised Premises by the
Tenant until the Restoration is complete as aforesaid.
SECTION 11.2 INSURANCE PROCEEDS. All insurance moneys recovered by Landlord
on account of such damage or destruction, less the costs, if any, to Landlord of
such recovery, shall be applied by Landlord to the payment of the costs of the
Restoration and shall be paid out from time to time as the Restoration
progresses. If the net amount of the insurance proceeds (after deduction of all
costs, expenses and fees (including, without limitation, attorneys' fees)
related to recovery of the insurance proceeds) recovered by Landlord is
insufficient to complete the Restoration (exclusive of Tenant's personal
property and Tenant's Trade Fixtures, all of which shall be restored, repaired
or rebuilt out of Tenant's separate funds), Landlord shall pay, any deficiency
necessary to cause the completion of Restoration. In all events, the full amount
of any deductible under the applicable insurance policies shall be paid by
Tenant within thirty (30) days after Landlord's invoice therefor.
SECTION 11.3 CONTINUANCE OF TENANT'S OBLIGATIONS. Regardless of the
foregoing provision of Sections 11.1 and 11.2, Tenant shall not be liable for
Rent in the event of damage or destruction of the Demised Premises, to the
extent (if any) that such Rent obligations of Tenant are paid by Landlord's
receipt of proceeds under any Business Interruption Insurance.
ARTICLE 12
CONDEMNATION
SECTION 12.1 TOTAL CONDEMNATION. If during the Term, the entire Demised
Premises shall be taken as the result of the exercise of the power of eminent
domain ("Proceedings"), this Lease and all right, title and interest of Tenant
hereunder shall terminate on the date of vesting of title pursuant to such
Proceedings, and Landlord shall be entitled to and shall receive the total award
made in such Proceedings. Tenant hereby assigns any interest in such award,
damages, consequential damages and compensation to Landlord. Landlord agrees
that it will not object to the petition of Tenant for a separate award as set
forth herein; provided, however, that any such petition or award shall in no way
diminish the award otherwise payable to Landlord hereunder.
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SECTION 12.2 PARTIAL CONDEMNATION. If during the Term, less than the entire
Demised Premises shall be taken in any such Proceedings, then this Lease shall,
upon vesting of title in the Proceedings, terminate as to the portion of the
Demised Premises so taken. If the portion of the Demised Premises taken shall
substantially and materially interfere with or inhibit Tenant's Premises Use of
the Demised Premises, Tenant may, at its option, terminate this Lease as to the
remainder of the Demised Premises. Tenant shall not have the right to terminate
this Lease pursuant to the preceding sentence, however, if that portion of the
Demised Premises not taken can reasonably be utilized by Tenant with
substantially the same utility and efficiency as prior to the taking. Such
termination as to the remainder of the Demised Premises shall be effected by
Tenant's written notice to Landlord, given not more than sixty (60) days after
the date of vesting of title in such Proceedings, and shall specify a date not
more than sixty (60) days after the giving of such notice as the date for such
termination. Upon the date specified in such notice and Landlord's determination
as aforesaid, the Term, and all right, title and interest of Tenant hereunder,
shall cease and terminate. If this Lease is terminated as provided in this
Section 12.2, Landlord shall receive the award as is provided in Section 12.1
hereof. In the event that Tenant elects not to terminate this Lease as to the
remainder of the Demised Premises, the rights and obligations of Landlord and
Tenant shall be governed by the provisions of Section 12.3 hereof.
SECTION 12.3 RESTORATION AFTER CONDEMNATION. If, in the case of a partial
taking, this Lease is not terminated as provided in Section 12.2 hereof, this
Lease shall, upon vesting of title pursuant to the Proceedings, terminate as to
the parts so taken, and, except as provided in Section 12.1 hereof, Tenant shall
have no claim or interest in the award, damages, consequential damages and
compensation, or any part thereof. Landlord, in such case, covenants and agrees
promptly to restore that portion of the Demised Premises not so taken to a
complete architectural and mechanical unit for Tenant's Premises Uses as
provided in this Lease. In the event that the net amount of the award (after
deduction of all costs and expenses, including, without limitation, attorneys'
fees) that may be received by Landlord in any such Proceedings as a result of
such taking, is insufficient to pay all costs of such restoration work, Landlord
shall pay such "shortfall."
SECTION 12.4 BASE RENT REDUCTION. In the event of a partial taking of the
Demised Premises under Section 12.2 hereof, followed by Tenant's election not to
terminate this Lease, the fixed Base Rent payable hereunder during the period
from and after the date of vesting of title pursuant to such Proceedings to the
earlier of the termination of this Lease or until the next date upon which Rent
is determined under Section 3.1 hereof, shall be determined by multiplying the
applicable Base Rent then being paid by Tenant, by a fraction, the numerator of
which is the square footage of Landlord's Improvements after such taking and
after the same has been restored to a complete architectural unit, and the
denominator of which is the square footage of Landlord's Improvements
immediately prior to such taking.
ARTICLE 13
ASSIGNMENT, SUBLETTING, ETC.
SECTION 13.1 PERMITTED TRANSFEREE OF TENANT. Tenant shall not sublet the
Demised Premises, or any portion thereof, nor assign, mortgage, pledge, transfer
or otherwise encumber or dispose of this Lease, or any interest herein, or in
any manner assign, mortgage, pledge, transfer or otherwise encumber or dispose
of its interest or estate in the Demised Premises, or any portion
48
thereof, without obtaining Landlord's prior written consent, which consent shall
not be unreasonably withheld provided, however, that such consent shall not be
required if (i) such assignment results from the merger of Tenant into another
entity (provided that the majority of the assets of Tenant are owned by the
entity resulting from such merger) or an assignment to an entity which purchases
all or substantially all of the assets of the Tenant, or (ii) Tenant shall
remain principally liable thereafter, and shall not thereby be relieved of
principal liability, for the due and faithful performance of all of terms of
this Lease. Tenant shall pay, on behalf of Landlord, any and all costs of
Landlord, including, without limitation, reasonable attorneys' fees, occasioned
in connection with any proposed sublease, assignment, mortgage, pledge, transfer
or other encumbrance or disposal of this Lease, or any interest herein, by
Tenant.
SECTION 13.2 SUBSEQUENT ASSIGNMENTS. Anything in this Lease to the contrary
notwithstanding, and notwithstanding any consent by Landlord to any sublease of
the Demised Premises, or any portion thereof, or to any assignment of this Lease
or of Tenant's interest or estate in the Demised Premises, or any other
permitted sublease or assignment hereunder, no sublessee shall assign its
sublease nor further sublease the Demised Premises, or any portion thereof, and
no assignee shall further assign its interest in this Lease or its interest or
estate in the Demised Premises, or any portion thereof, nor sublease the Demised
Premises, or any portion thereof, without Landlord's prior written consent in
each and every instance, which consent may be given or withheld in Landlord's
sole discretion. No such subsequent assignment or subleasing shall relieve
Tenant from any of Tenant's obligations in this Lease.
SECTION 13.3 PROFIT. If Landlord consents to an assignment or subletting as
provided above, or if the consent of Landlord to the assignment is not required,
or if Tenant remains principally liable on the Lease and Landlord's consent is
therefore not required, and if the sums of money or compensation paid by a
sublessee or assignee exceed the sums required to be paid by Tenant hereunder,
all of such excess shall be retained by Tenant.
SECTION 13.4 INEFFECTIVE ASSIGNMENT. Tenant's failure to comply with all of
the foregoing provisions and conditions of this Article 13 shall (regardless of
whether Landlord's consent is required under this Article 13), at Landlord's
sole option, render any purported assignment or subletting null and void and of
no force and effect.
SECTION 13.5 LANDLORD'S CONVEYANCE OR OTHER DISPOSITION. The Landlord shall
not convey or otherwise dispose of its interest in the Demised Premises (other
than assignments or mortgages in connection with the financing of the Demised
Premises), until the Initial Term Commencement Date has passed. If there is a
dispute between Landlord and Tenant in respect to whether all of the Punchlist
Items have been completed substantially in accordance with the Final Plans, the
Architect's determination of such completion shall be binding on Landlord and
Tenant.
ARTICLE 14
SUBORDINATION, NON-DISTURBANCE, NOTICE TO MORTGAGEE AND ATTORNMENT
SECTION 14.1 SUBORDINATION. This Lease and all rights of Tenant herein, and
any and all
49
interest or estate of Tenant in the Demised Premises, or any portion thereof,
shall be subject and subordinate to the lien of any and all mortgages, deeds of
trust, security instruments, ground or underlying leases or other documents of
like nature, which at any time may be placed upon the Demised Premises, or any
portion thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof (herein individually referred
to as a "Mortgage," and collectively herein referred to as "Mortgages"), and to
each and every advance made under any and all Mortgages. Tenant agrees at any
time hereafter, and from time to time on demand of Landlord, to promptly execute
and deliver to Landlord any and all reasonable instruments, releases or other
documents which may reasonably be required for the purpose of subjecting and
subordinating this Lease to the lien of any and all such Mortgages, and which do
not alter the terms, provisions or conditions of this Lease (hereinafter
individually referred to as a "Subordination Agreement," and hereinafter
collectively referred to as "Subordination Agreements"). So long as there exists
no Default, no such Subordination Agreement shall interfere with, hinder or
reduce Tenant's right to quiet enjoyment under this Lease, nor the right of
Tenant to continue to occupy the Demised Premises, and all portions thereof, and
to conduct its business thereon, all in accordance with the covenants,
conditions, provisions, terms and agreements of this Lease. Each such
Subordination Agreement shall provide for the non-disturbance of Tenant's rights
hereunder, provided that Tenant attorns to the holder of the Mortgage which is
the subject thereof.
SECTION 14.2 MORTGAGEE PROTECTION CLAUSE. Tenant shall deliver to each and
every holder of a Mortgage ("Mortgagee"), whose identify and address have been
provided to Tenant, a copy of any notice from Tenant to Landlord in which Tenant
advises Landlord of any act or omission on the part of Landlord which, after the
expiration of the applicable cure period, would constitute a default by Landlord
of its obligations under this Lease. After the expiration of all applicable cure
periods afforded Landlord in respect to such act or omission, Tenant shall
advise the Mortgagee, in writing, of the same as a condition precedent to Tenant
initiating any action under this Lease against Landlord, and Tenant, for an
additional thirty (30) days after the date of Mortgagee's receipt of such
notice, shall allow Mortgagee the option to remedy such act of omission of the
Landlord.
SECTION 14.3 ATTORNMENT. If any Mortgagee shall succeed to the rights of
Landlord under this Lease or to ownership of the Demised Premises, whether
through possession or foreclosure or the delivery of a deed to the Demised
Premises in lieu of foreclosure, then, upon the written request of such
Mortgagee so succeeding to Landlord's rights hereunder, and provided that such
Mortgagee assumes, in writing, the obligations of Landlord hereunder accruing on
and after the date such Mortgagee acquires title to the Demised Premises, Tenant
shall attorn to and recognize such Mortgagee as Tenant's landlord under this
Lease, and shall promptly execute and deliver any and all reasonable instruments
which such Mortgagee may reasonably request to evidence such attornment. In the
event of any other transfer of Landlord's interest hereunder, upon the written
request of the transferee and Landlord, and provided that such transferee
assumes, in writing, the obligations of Landlord hereunder accruing on and after
the date of such transfer, Tenant shall attorn to and recognize such transferee
as Tenant's landlord under this Lease, and shall promptly execute and deliver
any and reasonable instruments which such transferee and Landlord may reasonably
request to evidence such attornment.
SECTION 14.4 COSTS. Landlord agrees to reimburse Tenant for its reasonable
fees of outside counsel incurred in connection with the review of any
Subordination Agreements or Estoppel Letter, which Landlord may request Tenant
to execute.
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ARTICLE 15
SIGNS
SECTION 15.1 SIGNS. During the first one hundred eighty (180) days of
the Term, without Landlord's prior written consent, Tenant may erect signs
depicting the name and/or corporate logo of Tenant on the exterior or interior
of the Improvements or on the landscaped area adjacent thereto ("Original
Signage"); provided, however, that the Original Signage (a) does not cause any
structural damage or other damage to any of the Improvements or landscaping; (b)
does not violate applicable governmental laws, ordinances, rules or regulations;
and (c) does not violate any existing restrictions affecting the Demised
Premises, including, without limitation, Park covenants. Any changes to the
Original Signage that Tenant wishes to make shall require Landlord's prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed; provided, however, Landlord's consent to a change in the Original
Signage shall not be required, if such change complies with the foregoing
Original Signage requirements and is consistent changes to the Tenant's name
and/or corporate logo.
ARTICLE 16
TRADE FIXTURES
SECTION 16.1 TRADE FIXTURES. It is the intent of the parties that Trade
Fixtures shall include only those items of Tenant's furniture, equipment,
machinery, partitions and other personal property (including any items which are
affixed to the Demised Premises in a manner that can be readily detached without
significant damage to the Demised Premises) which are specifically used by
Tenant in the conduct of its business. Regardless of the foregoing, the Landlord
acknowledges that the items of property set forth on Exhibit 16.1 attached
hereto and made a part hereof, are Trade Fixtures and can be replaced and
disposed of by the Tenant, in Tenant's sole discretion.
ARTICLE 17
CHANGES AND ALTERATIONS
SECTION 17.1 CHANGES AND ALTERATIONS. Tenant shall have the right, at
any time and from time to time during the Term, to make such changes and
alterations, structural or otherwise, to the Initial Interior Build-Out (or the
interior build-out hereunder for the Expansion Improvements, if applicable), as
Tenant shall reasonably deem necessary in connection with the requirements of
its business; provided, however, that any and all such changes, other than
changes or alterations of Tenant's Trade Fixtures ("New Work"), shall be made,
in all cases, subject to the following conditions, which Tenant covenants to
observe and perform:
(a) No New Work shall be undertaken until Tenant shall have
first procured and paid for, so far as the same may be
required from time to time, all municipal, state and federal
permits and authorizations of the various governmental
bodies and departments having jurisdiction of the Demised
Premises or the proposed changes or alterations. Landlord
shall join in the application for
51
such permits or authorizations whenever such action is
necessary, all at Tenant's sole cost and expense; provided,
however, that (i) no such applications shall cause Landlord
to become liable for any cost, fees or expenses, and (ii) at
Landlord's direction, and in Landlord's sole discretion, any
and all such permits or authorizations shall be terminated
at the expiration of the Term.
(b) In any undertaking of Tenant pursuant to this Article 17,
except in the instance of either (i) interior decorating,
painting, carpentry or similar interior work, or (ii) New
Work which (A) will not, in Landlord's reasonable judgment,
impact the structure, or the mechanical, heating,
ventilating, air conditioning, plumbing, electrical, or fire
or health safety systems, of any of the Improvements or any
other portion of the Demised Premises, and (B) in the
aggregate will not cost in excess of One Hundred Thousand
and 00/100ths Dollars ($100,000.00), no New Work shall be
undertaken until detailed plans and specifications therefor
have been first submitted to and approved in writing by
Landlord, which approval shall not unreasonably be withheld;
provided, however, that if, in Landlord's reasonable
judgment, any such New Work would tend to impair the value
or usefulness to Landlord of the Demised Premises, or any
substantial portion thereof, or would tend to alter
unreasonably the aesthetics of the Demised Premises, then
Landlord shall not, under any circumstances, be obligated to
approve such plans and specifications. Among other things,
Landlord may condition its approval of any such New Work on
Tenant's agreement to restore or remove all or any portion
thereof at the expiration of the Term. Further, before the
commencement of any New Work (including, without limitation,
New Work falling within the exception set forth in the first
paragraph of this Section 17.1(b)), Tenant shall (i)
guarantee to Landlord (and demonstrate to Landlord's
reasonable satisfaction, Tenant's financial status and
creditworthiness sufficient to secure such guarantee) the
completion thereof within a reasonable time thereafter, (A)
free and clear of all mechanic's liens or other liens,
encumbrances, security interests and charges, and (B) in
accordance with the plans and specifications approved by
Landlord; and (ii) Tenant shall promptly upon the completion
of the New Work deliver to Landlord two (2) complete sets of
"as built" drawings for the New Work.
(c) Any change or alteration shall not, when completed, reduce
the area or cubic content of the Improvements, nor change
the character of the Demised Premises as to use, without
Landlord's express written consent (which may be withheld,
as aforesaid).
(d) All New Work shall be done promptly and in a good and workmanlike
manner and in Compliance with Laws and in accordance with the orders,
rules and regulations of the Board of Fire Underwriters where the
Demised Premises are located, or any other body exercising similar
functions. The cost of any and all such changes or alterations shall
be paid by Tenant, so that the Demised Premises and all portions
thereof shall at all times be free of liens for labor and materials
supplied to the
52
Demised Premises, or any portion thereof. The New Work shall be
prosecuted with reasonable dispatch, delays due to strikes, lockouts,
acts of God, inability to obtain labor or materials, governmental
restrictions or similar causes beyond the reasonable control of Tenant
excepted. Tenant shall obtain and maintain, and shall cause its
contractors, subcontractors and sub-subcontractors to obtain and
maintain, at Tenant's or their sole cost and expense, during the
performance of the New Work, workers' compensation insurance covering
all persons employed in connection with the New Work and with respect
to which death or injury claims could be asserted against Landlord or
Tenant or against the Demised Premised, or any interest therein,
together with comprehensive general liability insurance for the mutual
benefit of Landlord, Landlord's Mortgagees and Tenant, with limits of
not less than Two Million and 00/100ths Dollars ($2,000,000.00) in the
event of injury to one person, Two Million and 00/100ths Dollars
($2,000,000.00) in respect to any one accident or occurrence, and Two
Million and 00/100ths Dollars ($2,000,000.00) for property damage. The
fire insurance with "extended coverage" endorsement required by
Section 5.1 hereof shall be supplemented with "builder's risk"
insurance on a completed value form or other comparable coverage on
the New Work. All such insurance shall be in a company or companies
which are authorized to do business in the Commonwealth of
Pennsylvania and which are reasonably satisfactory to Landlord. All
such policies of insurance or certificates of insurance shall be
delivered to Landlord endorsed "Premium Paid" by the company or agency
issuing the same, or with other evidence of payment of the premium
satisfactory to Landlord, prior to the commencement of any New Work.
From time to time from and after the date of this Lease, and within
ten (10) days after Landlord's reasonable request therefor, Tenant
shall provide Landlord with reasonable written evidence of the
insurance required hereunder being in full force and effect.
(e) All improvements and alterations (other than Tenant's Trade Fixtures)
made or installed by Tenant shall immediately, upon completion or
installation thereof, become the property of Landlord, without payment
therefor by Landlord, and shall be surrendered to Landlord on the
expiration of the Term (unless the parties agree in writing to the
contrary).
(f) No New Work shall be in, or connect the Demised Premises with, any
other space, property, building or improvement, nor shall the same
obstruct or interfere with any then existing easement.
(g) If Landlord requires Tenant, in Landlord's reasonable discretion, to
restore or remove any New Work, Landlord shall so notify Tenant by
written notice, given at the time of Landlord's approval of such
requested change or alteration. If Landlord so notifies Tenant, then
at the expiration of the Term, Tenant shall remove any such New Work
and, at Tenant's sole cost and expense, restore any damage caused to
the Demised Premises as a result of such removal.
53
ARTICLE 18
SURRENDER OF PREMISES
SECTION 18.1 SURRENDER OF POSSESSION. Tenant shall, upon termination of
this Lease for any reason whatsoever, surrender to Landlord the Demised
Premises, together with any and all buildings, structures, fixtures and building
equipment or real estate fixtures upon the Demised Premises and any and all
additions, alterations and replacements thereof (except Tenant's personalty and
Trade Fixtures), in good order, condition and repair, with all electrical
systems, plumbing systems, heating, ventilating and air conditioning systems,
fire protection systems, and other mechanical systems in good working order and
repair, reasonable wear and tear excepted (provided that such exception shall in
no way be deemed to relieve Tenant from its obligations to make all necessary
Tenant Repairs and Maintenance as and when required hereunder).
SECTION 18.2 NO SURRENDER WITHOUT ACCEPTANCE. No surrender to Landlord
of this Lease or of the Demised Premises, or any portion thereof, or any
interest therein, prior to the expiration of the Term, shall be valid or
effective unless agreed to and accepted in writing by Landlord (which agreement
Landlord may give or withhold in its sole discretion), and consented to in
writing by all Mortgagees and contract purchasers, if any (which consent may be
given or withheld in their respective sole discretion). Further, no act or
omission by Landlord, or any representative or agent of Landlord, other than
such a written acceptance by Landlord, which is consented to by all Mortgagees
and contract purchasers, if any, shall constitute an acceptance of any such
surrender.
SECTION 18.3 REMOVAL OF TENANT'S PROPERTY; HOLDOVER RENT. Except as
otherwise provided herein, at the expiration of the Term, Tenant shall surrender
the Demised Premises, and shall surrender all keys to the Demised Premises, to
Landlord at the place then fixed for the payment of Rent, and shall inform
Landlord of all combinations on locks, safes and vaults within the Demised
Premises, if any. Except as otherwise provided herein, Tenant shall, at such
time, also remove all of its property (including, without limitation, its
personalty and all Trade Fixtures) therefrom and all New Work placed thereon by
Tenant, if so requested by Landlord pursuant to Section 17.1 hereof. Tenant
shall repair any damage to the Demised Premises caused by such removal, and any
and all such property not so removed when required shall, at Landlord's option,
become the exclusive property of Landlord, or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant.
If Tenant fails to surrender possession as required under this Section
18.3, then, for each month, or portion thereof, after the termination of the
Term or of Tenant's rights of possession hereunder, whether by lapse of time or
otherwise, during which Tenant remains in possession of the Demised Premises, or
any portion thereof, after such termination, Tenant shall pay to Landlord, in
addition to Additional Rent, a sum equal to one hundred fifty percent (150%) of
the Base Rent herein provided for the month immediately prior to such
termination. The provisions of this Section 18.3 shall not be deemed to limit
or constitute a waiver of any other rights or remedies of Landlord provided
herein at law or at equity, and Landlord's acceptance of the additional rent in
the event of a holdover by Tenant shall not act as a waiver or limitation on any
such other rights or remedies
54
(including, without limitation, any direct, indirect or consequential damages).
All property of Tenant not removed on or before the last day of the Term
shall be deemed abandoned. Tenant hereby appoints Landlord as its agent to
remove all property of Tenant from the Demised Premises upon the termination of
this Lease, and to cause the transportation and storage thereof for Tenant's
benefit, all at the sole cost and risk of Tenant. Landlord shall not be liable
for damage, theft, misappropriation or loss thereof, and Landlord shall not be
liable in any manner in respect thereto. Tenant shall pay all costs and
expenses of such removal, transportation and storage. Tenant shall reimburse
Landlord, immediately upon demand, for any expenses incurred by Landlord with
respect to any removal or storage of abandoned property and with respect to
restoring the Demised Premises to good order, condition and repair.
ARTICLE 19
MISCELLANEOUS PROVISIONS
SECTION 19.1 RIGHT OF INSPECTION. Upon reasonable advance notice to
Tenant (except for emergency situations), Tenant agrees to permit Landlord and
its authorized representatives to enter upon the Demised Premises at all
reasonable times during ordinary business hours for the purpose of inspecting
the same and, pursuant to the terms of this Lease, making any necessary repairs
to comply with any laws, ordinances, rules, regulations or requirements of any
public body, or the Board of Fire Underwriters, or any similar body. Except as
otherwise provided herein, nothing shall imply any duty upon the part of
Landlord to do any such work which, under any provision of this Lease, Tenant
may be required to perform, and the performance thereof by Landlord shall not
constitute a waiver of Default in failing to perform the same. Landlord shall
not unreasonably interfere with the use and occupancy of the Demised Premises
pursuant to the provisions of this Section 19.1.
SECTION 19.2 DISPLAY OF DEMISED PREMISES. Upon reasonable advance notice
to Tenant, Landlord may, at any time during normal business hours during the
Term, enter upon the Demised Premises and exhibit the same for the purpose of
mortgaging or selling the same; provided, however, that during the final twelve
(12) months of the then-current Term, Landlord shall be entitled to display the
Demised Premises for sale or lease upon twenty-four (24) hours prior notice, and
shall be allowed to post appropriate signage in or about the Demised Premises,
so long as the same does not unreasonably interfere with Tenant's business.
SECTION 19.3 INDEMNITIES.
(a) Tenant. To the fullest extent allowed by law, except to the extent
------
the same is otherwise expressly waived by Landlord under this Lease (including,
without limitation, in Section 5.4 hereof), Tenant shall, at all times,
indemnify and save Landlord, and its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, Mortgagees,
agents and employees, harmless from and against any and all loss, cost or
damage, including, without limitation, reasonable attorneys' fees, incurred or
sustained by any of them in connection with the conduct or management, or from
any work or things whatsoever done in or about the Demised Premises during the
Term, and will further indemnify and save them harmless from and against any and
all loss, cost or damage, including, without limitation, reasonable attorneys'
fees, arising during
55
the Term, from any condition of the Demised Premises, or arising from any breach
or default on the part of Tenant in the performance of any covenant or agreement
on the part of Tenant to be performed, pursuant to the terms of this Lease, or
arising from any negligence of Tenant, its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors (other than
Landlord, Contractor or their respective subcontractors or sub-subcontractors),
agents, employees or invitees, or arising from any accident, injury or damage
whatsoever caused to any person or entity during the Term, in or about the
Demised Premises. The indemnity obligations of Tenant under this Section 19.3
which relate directly or indirectly to death, bodily or personal injury or
property damage, shall be insured by contractual liability endorsement on
Tenant's policies of insurance required under the provisions of Article 5
hereof. Anything in this Section 19.3(a) to the contrary notwithstanding,
Tenant's indemnification obligations as aforesaid shall not apply to any claims,
costs, liabilities, actions and damages which arise as a result of (i) the
negligence or wrongful acts or omissions of Landlord or Contractor (or their
respective partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, agents or employees); or (ii) the failure of
either Landlord or Contractor to comply with a provision of this Lease.
(b) Landlord. To the fullest extent allowed by law, except to the extent
--------
the same is otherwise expressly waived by Tenant under this Lease (including,
without limitation, in Section 5.4 hereof), Landlord shall at all times shall
indemnify and save Tenant, and its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents and employees, harmless
from and against any and all loss, cost or damage, including, without
limitation, reasonable attorneys' fees, incurred or sustained by any of them in
connection with the conduct of or the failure to conduct any of Landlord's
obligations hereunder, or any negligence in the performance thereof. Anything
in this Section 19.3(b) to the contrary notwithstanding, Landlord's
indemnification obligations as aforesaid shall not apply to any claims, costs,
liabilities, actions and damages which arise as a result of (i) the negligence
or wrongful acts or omissions of Tenant (or its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors (other than
Landlord, Contractor or their respective contractors, subcontractors or sub-
subcontractors), agents, employees or invitees); or (ii) the failure of Tenant
to comply with a provision of this Lease.
SECTION 19.4 NOTICES. All notices, demands and requests which may be or
are required to be given, demanded or requested by any party to the other shall
be in writing. All transmittals by Landlord or Contractor to Tenant shall be
delivered by private messenger, or sent by United States registered or certified
mail, postage prepaid, or by Federal Express or similar overnight courier
service (provided, however, that billing and invoicing may be sent to Tenant by
United States first class mail), addressed to Tenant as follows:
All notices, except ▇▇▇▇▇▇▇▇ and invoices:
Vanguard Cellular Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
With a Copy to: Pennsylvania Cellular Telephone Corp.
Mid-Atlantic Central Regional Office
56
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Business Manager
All billing and invoices:
Vanguard Cellular Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Accounts Payable
With a Copy to: Pennsylvania Cellular Telephone Corp.
Mid-Atlantic Central Regional ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Business Manager
and after the Initial Term Commencement Date, copies of all notices shall be
addressed to the Demised Premises, or at such other place as Tenant may from
time to time designate by written notice to Landlord and Contractor.
Any such transmittals by Tenant to Landlord or Contractor shall be
delivered by private messenger, or sent by United States registered or certified
mail, postage prepaid or by Federal Express or similar overnight delivery
service, addressed to Landlord or Contractor at the following address:
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
or at such other place as Landlord or Contractor may from time to time designate
by written notice to Tenant. Except as otherwise provided herein, notices,
demands and requests which shall be served upon Landlord or Contractor by
Tenant, or upon Tenant by Landlord or Contractor, in the manner aforesaid, shall
be deemed to be sufficiently served or given for all purposes hereunder three
(3) days after the time such transmittals shall be mailed (except for notices of
late payment as provided in Section 10.1(a) hereof which, when mailed, shall be
effective upon delivery or refusal to accept delivery, if delivery is not
accepted), or upon the actual date of delivery to the addressee if sent by
private messenger, or overnight courier.
SECTION 19.5 AUTHORIZED INDIVIDUALS. Whenever in or in connection with
this Lease, the consent or approval of any party hereto is required or desired
(including, without limitation, in connection with the approval of components of
the Final Initial Interior Build-Out Plans), any one or more of the following
named persons shall be authorized to act on behalf of, and bind, the parties as
set forth below, until any party shall deliver written notice to the others of
the termination of such
57
authorization:
For Landlord: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
For Tenant: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ (limited to any changes and approved
plans should not result in an increase in costs of greater than One Hundred
Thousand Dollars ($100,000.00) or result in a delay in construction of more than
five (5) business days, and which does not involve the approval of the Final
Plans).
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
For Contractor: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
At any time or from time to time, any party may add or delete names of
authorized individuals to the aforesaid list, by providing written notice of
such additions to the other parties hereto.
SECTION 19.6 QUIET ENJOYMENT. Landlord covenants and agrees that Tenant,
upon paying the Rent, and upon observing and keeping the covenants, agreements
and conditions of this Lease on its part to be kept, observed and performed,
shall lawfully and quietly hold, occupy and enjoy the Demised Premises during
the Term without hindrance or molestation.
SECTION 19.7 LANDLORD AND SUCCESSORS. The term "Landlord," as used in
this Lease, so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or owners at the
time in question of the fee of the Demised Premises, and in the event of any
transfer or transfers or conveyance (provided that such grantee assumes in
writing the obligations of Landlord hereunder on and after the date of such
conveyance), the then grantor shall be automatically freed and relieved, from
and after the date of such transfer or conveyance, of all liability with respect
to any covenants or obligations on the part of Landlord contained in this Lease,
the performance of which first accrues on or after the date of such transfer;
provided, however, that any funds in the hands of such landlord or the then
grantor at the time of such transfer, in which Tenant has an interest, shall be
turned over to the grantee, and any amount then due and payable to Tenant by
Landlord or the then grantor under any provision of this Lease shall be paid to
Tenant. It is intended that the covenants and obligations contained in this
Lease on the part of Landlord shall, subject to the aforesaid, be binding on
Landlord, its successors and assigns, only during and in respect of their
respective successive periods of ownership.
SECTION 19.8 LIMITATION ON LANDLORD'S LIABILITY. Tenant acknowledges and
agrees that (a) Tenant is entitled only to look to Landlord's interest in the
Demised Premises for recovery of any judgment from Landlord; and (b) Landlord
(and if Landlord is a partnership, its partners, whether general or limited, and
if Landlord is a corporation, its directors, officers or shareholders) shall
never be personally liable for any personal judgment or deficiency decree or
judgment against it.
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SECTION 19.9 ESTOPPELS. Tenant shall, without charge, at any time and
from time to time, within ten (10) business days after written request by
Landlord, certify by written instrument in substantially the form set forth as
Exhibit 19.9 attached hereto and made a part hereof, duly executed, acknowledged
and delivered to any actual or proposed Mortgagee, assignee or purchaser, or to
any other person or entity dealing with Landlord or the Demised Premises as to
the matters set forth in Exhibit 19.9 ("Estoppel Letter"). Landlord shall,
without charge, at any time and from time to time, within ten (10) business days
after written request by Tenant, certify by written instrument in substantially
the form set forth in Exhibit 19.9, duly executed, acknowledged and delivered to
any proposed lender, purchaser of Tenant's stock or assets, or any other person
dealing with Tenant or the Demised Premises as to the matters set forth in
Exhibit 19.9, provided that "Landlord" shall be substituted for "Tenant" and
"Tenant" shall be substituted for "Landlord" as is logical and reasonable.
SECTION 19.10 SEVERABILITY; GOVERNING LAWS. If any covenant, condition,
provision, term or agreement of this Lease shall, to any extent, be held invalid
or unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Lease shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Lease shall be valid and in
force to the fullest extent permitted by law. This Lease shall be construed and
be enforceable in accordance with the laws of the Commonwealth of Pennsylvania.
SECTION 19.11 BINDING EFFECT. The covenants and agreements herein
contained shall bind and inure, respectively, to the benefit of Landlord, its
successors and assigns, Contractor, and its successors and assigns, and Tenant,
and its permitted successors and assigns.
SECTION 19.12 CAPTIONS. The caption of each Article and Section of this
Lease is for convenience of reference only, and in no way defines, limits or
describes the scope or intent of such Article or Section of this Lease.
SECTION 19.13 LANDLORD - TENANT RELATIONSHIP. This Lease does not create
the relationship of principal and agent, or of partnership, joint venture or any
other association or relationship, between or among one or more of Landlord,
Contractor and Tenant, the sole relationship between Landlord and Tenant being
that of landlord and tenant, and the relationship between Contractor and Tenant
being that of master and servant. Further, except as otherwise provided herein,
no person or entity shall be entitled to claim any rights as a third party
beneficiary hereof.
SECTION 19.14 MERGER OF AGREEMENTS. All preliminary and contemporaneous
negotiations are merged into and incorporated in this Lease, including, but not
limited to the merger of the Letter of Indemnification, dated April 9, 1997
between the parties (it is agreed that such letter is null and void and Tenant
has no obligation to Landlord for any payment pursuant to that Letter of
Indemnification). This Lease contains the entire agreement between the parties
and shall not be modified or amended in any manner, except by an instrument in
writing executed by the parties hereto. Submission of the form of the Lease for
examination shall not bind Landlord in any manner, and no Lease or obligations
of Landlord shall arise until this instrument is executed and delivered by all
three of Landlord, Contractor and Tenant.
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SECTION 19.15 LANDLORD'S PROPERTY. Tenant acknowledges that the Demised
Premises will be the property of Landlord, and that Tenant will have only the
right to possession and use thereof upon the covenants, conditions, provisions,
terms and agreements set forth in this Lease.
SECTION 19.16 SURVIVAL. All obligations of the parties hereunder
(together with interest on Tenant's monetary obligations at the Maximum Rate of
Interest) accruing prior to expiration of the Term shall survive the expiration
or other termination of this Lease.
SECTION 19.17 CLAIMS. Any claim which Tenant may have against Landlord or
Landlord may have against Tenant for default in the performance of any of their
respective obligations herein contained to be kept and performed shall be deemed
waived unless (a) such claim is asserted by written notice thereof to Landlord
or Tenant, as the case may be within one hundred eighty (180) days after the
later of (i) the commencement of the alleged default or of the accrual of the
cause of action, or (ii) the date the claiming party had actual knowledge of the
default or fact on which the claim is based, and (b) unless suit is brought
thereon within one (1) year after the later of (i) the accrual of such cause of
action, or (ii) the date the claiming party had actual knowledge of the default
or fact on which the cause of action is based.
SECTION 19.18 REASONABLENESS. Except as otherwise provided herein, any
consent, action or inaction required to be given (or which may be withheld),
done or not done, by any of the parties hereto shall be given (or not withheld),
done or not done in a commercially reasonable fashion.
SECTION 19.19 REAL ESTATE BROKER. Tenant represents that Tenant has not
dealt with any broker, other than ▇▇▇▇▇▇/▇▇▇▇▇▇, Ball & ▇▇▇▇▇, Inc. in
cooperation of Gelcor Realty, Inc. (collectively, Tenant's Broker"), in
connection with this Lease, and that no other broker (or other person or entity)
negotiated this Lease or is entitled to any commission in connection herewith.
Landlord shall pay the commission due Tenant's Broker that is evidenced by that
certain registration letter dated September 19, 1997, agreed to and accepted by
Tenant's Broker. In addition, Landlord shall pay Tenant's Broker the commission
provided in such registration letter in respect to Tenant's exercise of the
Expansion Option.
Tenant shall indemnify and save Landlord, and its partners, directors,
officers, shareholders, contractors, subcontractors, sub-subcontractors,
Mortgagees, agents and employees, harmless from and against any and all loss,
cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with claims made by any
broker or finder, other than Tenant's Broker, for a commission or fee in
connection with this Lease, provided that Landlord has not in fact retained such
broker or finder. Landlord shall indemnify and save Tenant, and its partners,
directors, officers, shareholders, contractors, subcontractors, sub-
subcontractors, agents and employees, harmless from and against any and all
loss, cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with any claims made by
Tenant's Broker, in respect to Landlord's failure to pay any commission required
of Landlord under the terms of the foregoing registration letter, or any other
broker or finder claiming by, through or under Landlord, for a commission or fee
in connection with this Lease.
SECTION 19.20 DELIVERY OF CORPORATE DOCUMENTS. Tenant shall, without
charge to Landlord, not more than once each calendar year during the Term,
within ten (10) days after written
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request by Landlord, deliver to Landlord in connection with any proposed bona
fide sale or mortgage of the Demised Premises, copies, certified by Tenant's
chief financial officer, of Tenant's balance sheet, income statement and
statement of sources and uses for Tenant's then most recently ended fiscal year,
and Tenant's immediately preceding two (2) fiscal years.
SECTION 19.21 EXHIBITS; RIDER PROVISIONS. Any Exhibits attached hereto
are an integral part hereof, and this Lease shall be construed as though such
Exhibits were set forth in full herein. In the event that there are one or more
Riders attached to this Lease, then the provisions of such Rider(s) shall take
precedent over any conflicting provisions contained herein.
SECTION 19.22 ATTORNEYS' FEES. In the event of any litigation or judicial
action in connection with this Lease or the enforcement hereof, the prevailing
party in any such litigation or judicial action shall be entitled to recover all
costs and expense of any such judicial action or litigation (including, without
limitation, reasonable attorneys' fees) from the other party.
SECTION 19.23 TIME IS OF THE ESSENCE. Subject to the required notice and
applicable cure periods contained in this Lease, time is of the essence with
respect to the performance of every provision of this Lease in which time of
performance is a factor.
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to be
duly executed as of the day and year first above written.
Landlord:
▇▇▇▇▇ ▇▇▇▇▇▇▇ NO. 33, L.L.C., a
Pennsylvania limited partnership
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Its:__________________________________
Tenant:
PENNSYLVANIA CELLULAR TELEPHONE CORP.,
a North Carolina corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Its: Vice President
----------------------------------
Contractor:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & COMPANY, an Illinois
corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Its:__________________________________
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