Exhibit 10.1
AGREEMENT OF
LEASE
FOR AND IN CONSIDERATION of the
mutual covenants herein contained, as of this 30
th
day of June, 2005, the
parties hereto do hereby agree as follows:
1. Incorporated Terms
. The following terms are incorporated by reference into this
Agreement of Lease (this “Lease”):
(a) NAME AND ADDRESS OF
LANDLORD:
1005 VIRGINIA ASSOCIATES,
L.P.
c/o First Evergreen
101 Eisenhower Parkway
Roseland, New Jersey
07068
(b) NAME AND ADDRESS OF
TENANT:
KULICKE AND SOFFA INDUSTRIES,
INC.
2101 Blair Mill Road
Willow Grove, Pennsylvania
19090
(c) DESCRIPTION OF
PREMISES:
The entire building known as 485
Delaware Avenue a/k/a 1005 Virginia Drive, Fort Washington,
Pennsylvania.
(d) AREA OF
PREMISES:
For the purposes of this Lease, the
content of the Premises is deemed to be 88,000 rentable square
feet.
(e) TERM OF LEASE:
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Subject to
Section 3, the Term shall be twelve (12) “lease years”
(as hereinafter defined in Section 3), commencing as set forth in
Section 3 and expiring twelve (12) lease years
thereafter.
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(f) PERMITTED USE:
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The Tenant
named herein, and any assignee or sublessee pursuant to a
“Permitted Transfer” (as hereinafter defined in Section
18(a)), shall have the right to use the Premises for any lawful
purpose, including but not limited to, general office and
administrative, light industrial, and other uses ancillary thereto.
Any other assignee or sublessee shall only have the right to use
the Premises for general office and administrative, light
industrial, and other uses ancillary thereto, provided that the
square footage of the listed non-office uses, in the aggregate,
does not exceed the square footage thereof that exists upon
Tenant’s completion of the “Initial Work” (as
defined in the Initial Work Rider).
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(g) SECURITY
DEPOSIT:
See Section 33
(h) TENANT’S
SHARE:
100%
(i) BASE EXPENSE
YEAR:
Calendar year 2006
(j) BASE TAX YEAR:
Calendar year 2006
(k) BROKER:
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Collectively,
Binswanger and Tactix Advisory Services, Inc.; commission to be
paid by Landlord pursuant to a separate agreement between Broker
and Landlord.
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(l) RIDERS TO
LEASE:
Initial Work Rider
Annual Rent Rider
Extension Options Rider
Rules and Regulations
Rider
(m) LANDLORD’S
CONTRIBUTION:
As defined in the Initial Work
Rider
2. Description of Premises;
Property Rights . (a) Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, the building (the
“Building”) described in Section 1(c) (the
“Premises”) (the Building, the land upon which the
Building is located and the other improvements located on the land
are hereinafter collectively called the “Property”). A
site plan of the Property is attached hereto as Exhibit A
and made a part hereof. Tenant shall have access to the Property
from the Delivery Date until the Expiration Date or earlier
termination of the Term of this Lease, twenty-four (24) hours a
day, seven (7) days a week.
(b) The parties acknowledge that
there are multiple methods of computing rentable area and hereby
agree for the purposes of this Lease that the rentable area of the
Premises and the Building is the number of square feet set forth in
Section 1(d).
(c) Landlord shall have no
obligation to do any work in and to the Premises or the Building to
render them ready for Tenant’s initial occupancy, other than
as described in Section 3(a) below. Tenant has inspected the
Premises and agrees to take the Premises in “as is”
condition, except as otherwise expressly provided
herein.
(d) Tenant shall have the right,
without interference or hindrance by Landlord, to utilize such
portions of the Property for purposes, and in locations, as Tenant
determines are necessary or desirable for the operation of
Tenant’s business upon the Premises. Landlord reserves the
right to utilize portions of the Property (but not the Premises) so
long as such utilization does not interfere with Tenant’s
use, occupancy and enjoyment of the Premises and the Property
(“Landlord’s Reserved Property Rights”), such as,
by way of example, installation of a cell tower or satellite dish,
or similar device. Any such cell towers, satellite dishes, and the
like, shall be properly secured, fenced off and/or screened from
view, and shall not transmit in a manner which interferes with any
satellite dish (or technical evolution thereof) previously
installed upon the Premises by Tenant for Tenant’s use;
provided, however, that any such cell tower erected by Landlord
pursuant to Landlord’s Reserved Property Rights shall be
located within that portion of the Property mutually agreed to by
Landlord and Tenant. Landlord and Tenant agree to act in good faith
in determining the location of said cell tower. In no event shall
Landlord or Tenant be permitted to install billboards upon the
Property.
(e) In the event that at any time
during the Term, any space in the adjacent building located at 1015
Virginia Drive, Fort Washington, Pennsylvania (the “1015
Building”) shall become available for lease (the
“Available Space”), then provided that (i) Tenant is in
possession of the Premises and there is no uncured “Event of
Default” (as hereinafter defined in Section 25(a)) then
outstanding under this Lease, (ii) Tenant’s financial
condition and creditworthiness are reasonably satisfactory to
Landlord, and (iii) Landlord, or affiliates of Landlord, shall be
the owner(s) (or controlling interest holder(s)) of both the
Building and the 1015 Building, Landlord shall notify Tenant of the
availability of the Available Space and the terms and conditions
upon which Landlord proposes the same to be leased. Landlord
represents and warrants
to Tenant that an affiliate of Landlord is
currently the fee owner of the 1015 Building. Subject to prior
rights granted to any other tenants or other parties to lease the
Available Space, Tenant shall have a period of twenty (20) days
from the date of delivery of such notice within which to notify
Landlord of its election to lease the Available Space on the same
terms and conditions as set forth in Landlord’s notice to
Tenant. In the event that Tenant does not so notify Landlord of its
election to lease the Available Space within the aforesaid twenty
(20) day period, time being of the essence, Landlord shall be free
to lease the Available Space to any party as Landlord may elect
upon such terms as Landlord and any proposed tenant of the
Available Space may agree upon. In the event Tenant elects to lease
the Available Space as aforesaid, the Available Space shall
thereafter be deemed part of the Premises and Tenant shall
thereafter pay the Annual Rent and Additional Rent for such space
and otherwise comply with the other terms and conditions set forth
in Landlord’s notice. In the event Tenant elects to lease the
Available Space as aforesaid, a lease amendment shall be prepared
by Landlord and shall be executed by Tenant within five (5)
business days of receipt thereof, or Tenant’s right to lease
the Available Space shall, at Landlord’s option, be rendered
null and void.
3. Term . (a) For
purposes hereof, the “Delivery Date” shall mean the
date on which Landlord delivers possession of the Premises to
Tenant in a structurally sound condition, broom-clean, free of all
equipment, furniture, trade fixtures, and personal property (except
as set forth in Section 42), and free of all rights or claims of
possession of prior tenants and occupants, with the HVAC system and
all other Building systems in good working condition. The term of
this Lease (the “Term”) shall commence on the date (the
“Commencement Date”) which shall be the earlier to
occur of (i) the date which shall be one hundred fifty (150) days
after the Delivery Date, or (ii) the date on which Tenant commences
business operations at the Premises, and shall expire on the date
(the “Expiration Date”) which shall be twelve (12)
lease years after the Commencement Date. Notwithstanding anything
to the contrary contained in this Lease, the installation, set up,
testing and operating (for migration purposes only) of
Tenant’s information technology systems within the Premises
shall not be deemed to be commencing business operations within the
Premises. Tenant shall have the option to extend the Term as set
forth in the Extension Options Rider attached hereto.
(b) Should the Delivery Date be
delayed by reason of Tenant’s delay, Event of Default, lack
of cooperation, or failure or delay in delivering any matter or
detail required to be supplied by Tenant, the Delivery Date shall
nonetheless occur on the date which is the earlier of (i) the date
when Landlord delivers possession of the Premises to Tenant as
herein provided, or (ii) the date when Landlord would have
delivered possession of the Premises to Tenant but for the
occurrence of any event of Tenant’s delay referred to
above.
(c) Intentionally
omitted.
(d) The first “lease
year” shall be the period commencing on the Commencement Date
and ending twelve (12) full calendar months after the “Rent
Commencement Date” (as hereinafter defined in Section 4(c));
provided, however, that if the Rent Commencement Date is not the
first day of a month, the first lease year shall commence on the
Commencement Date and end on the last day of the twelfth (12
th
) full calendar month
immediately following the Rent Commencement Date. Each succeeding
twelve (12) calendar month period thereafter shall be a lease year.
Landlord and Tenant acknowledge that the first lease year shall be
for a period greater than twelve (12) calendar months.
(e) Within ten (10) days after the
request of either Landlord or Tenant after the occurrence of the
Commencement Date, the parties hereto shall execute and deliver to
the other party a written confirmation of the Commencement Date,
the Rent Commencement Date and Expiration Date of this
Lease.
4. Annual Rent; Additional
Rent . (a) Tenant shall pay to Landlord at the address set
forth in Section 1(a), or to such other person or at such other
place as the Landlord may from time to time designate, without
previous demand therefor and without counterclaim, deduction or
set-off, the annual rent (“Annual Rent”) set forth on
the Annual Rent Rider attached hereto. Annual Rent shall be payable
in monthly installments as set forth on the Annual Rent Rider in
advance on the first day of each month during the Term of the Lease
commencing upon the Rent Commencement Date. If the Rent
Commencement Date shall be other than the first day of a calendar
month, Tenant shall pay Landlord on the Rent Commencement Date the
proportionate amount of Annual Rent for the balance of such month
computed by dividing the monthly Annual Rent by thirty (30) and
then multiplying the result by the number of days beginning with
and including the Rent Commencement Date and ending with and
including the last day of the month in which the Rent Commencement
Date occurs. The first full monthly installment of Annual Rent
shall be paid by Tenant upon Tenant’s execution of this
Lease.
(b) All sums other than Annual Rent
payable by Tenant under this Lease shall be deemed to be
“Additional Rent” regardless of to whom such sums may
be payable. Additional Rent shall be payable without counterclaim,
deduction or set-off. In the event of an Event of Default by Tenant
hereunder in payment of any item of Additional Rent, Landlord shall
have available to it all rights and remedies provided by this Lease
and by law as for non-payment of Annual Rent. The term
“rent” in the Lease means Annual Rent and Additional
Rent.
(c) Notwithstanding anything to the
contrary contained herein, Tenant shall not be obligated to pay
Annual Rent until the date (the “Rent Commencement
Date”) which shall be five (5) months following the
Commencement Date. Tenant shall otherwise be required to comply
with all of the other terms and provisions of this Lease from and
after the Commencement Date. The first full monthly installment of
Annual Rent payable by Tenant upon the execution of this Lease
shall be for the sixth (6 th ) full calendar month of the Term
hereof.
5. Operating Expenses
. (a) Commencing on January 1, 2007 (the “Expense Rent
Commencement Date”), Tenant shall pay, as Additional Rent,
Tenant’s Share referred to in Section 1(h) of the Lease of
the “expenses” (as hereinafter defined) of the Property
for any calendar year which occurs wholly or partially during the
Term of this Lease in excess of the expenses of the Property for
the calendar year referred to in Section 1(i) of this Lease (the
“Base Expense Year”) (such Additional Rent is
hereinafter called the “Expense Rent”). The term
“expenses” shall mean any and all costs incurred by
Landlord in connection with the ownership, operation, maintenance,
care and repair of the Property, including, but not limited to,
gardening and landscaping; snow removal; repairing, resurfacing or
repaving the parking areas, roads or driveways on the Property ;
maintaining, repairing and replacing the roof of the Building;
maintaining, repairing and replacing
the heating, ventilating and air conditioning
system and other mechanical systems serving the Building; premiums
for fire and other casualty insurance, rent insurance, liability
insurance, workers compensation insurance and other insurance with
respect to the Property ; wages, medical insurance, pension
payments and other fringe benefits of all employees servicing the
Property ; payroll taxes; labor and materials for repairs and
replacements for the Building and its components and other
improvements on the Property ; trash removal; all cleaning except
for cleaning performed by Tenant in accordance with the terms of
this Lease; service contracts; electricity, gas, water, sewer and
other utility charges and rents unless payable by Tenant in
accordance with the terms of this Lease; licenses and permits
required for the ownership and operation of the Property ; sales
and use taxes payable by Landlord, or its agents or contractors in
connection with tangible personal property and services purchased
exclusively for and used exclusively in the management, operation,
maintenance, care and repair of the Property ; fuel oil; painting;
security; professional fees; administrative expenses; management
fees paid to third parties in connection with the management of the
Property, which management fees shall not exceed four (4%) percent
of the Annual Rent payable by Tenant for each calendar year during
the Term; and alterations and improvements made by reason of
governmental or insurance company requirements. To the extent any
expenses are shared with any other properties owned or managed by
Landlord or is affiliates (including, without limitation, the 1015
Building), only the pro-rated portion of such expense relating to
the Property shall be included in “expenses.” The term
“expenses” shall include all capital improvements
(subject to Section 5(b) below) provided that the cost for such
capital improvements shall be amortized on a straight-line basis
over a useful life period, and Tenant shall reimburse Landlord for
the portion of such costs allocable to the applicable amortization
period which falls within the Term hereof. At Tenant’s
option, Expense Rent with respect to capital expenditures shall be
paid by Tenant either (i) in a lump sum without interest within
twenty (20) days of its receipt of Landlord’s invoice
therefor, or (ii) in monthly installments, as Additional Rent, at
the same time and in the same manner as Annual Rent, which
installments shall be paid together with annual interest on the
outstanding amount at a rate equal to the “Prime Rate”
reported in the “Money Rates” column of the Wall
Street Journal from time to time (or such other reasonably
equivalent journal should the Wall Street Journal cease
publication) (the “Prime Rate”) plus six (6%) percent.
Notwithstanding anything to the contrary contained herein, in the
event that the Building is less than one hundred percent (100%)
occupied during the Base Expense Year (including any portion of the
Base Expense Year occurring prior to the Commencement Date) and/or
any calendar year of the Term, the expenses of the Property for the
Base Expense Year and/or such calendar year, as the case may be,
shall be appropriately adjusted so that the expenses of the
Property shall reflect such costs as would have been incurred in
the operation of a fully occupied office building in the
Philadelphia, Pennsylvania area similar to the Building. In
addition to the foregoing, expenses for the Base Expense Year shall
also be adjusted to exclude any extraordinary expense of a one time
nature incurred during the Base Expense Year.
(b) Notwithstanding any provision
contained in this Lease to the contrary, the term
“expenses” shall not include mortgage debt or ground
rents incurred by Landlord as owner of the Property; leasing
commissions; accountants, consultants or attorneys fees; costs of
construction of the Building and related facilities; costs of any
items or services sold or provided to Tenant for which Landlord is
otherwise reimbursed; fees and higher interest charges caused by
Landlord’s refinancing the Property costs and expenses
related to violations of laws, statutes, ordinances, rules or
regulations of any governmental or quasi-governmental authority
which were in effect on the
date of this Lease; costs incurred due to a
violation by Landlord of the terms and conditions of this Lease;
overhead and profit increment paid to subsidiaries or affiliates of
Landlord, or to any party as a result of a non competitive
selection process, for management or other services on or to the
Property or for supplies or other materials, to the extent that the
costs of such services, supplies or materials exceed the costs that
would have been paid had the services, supplies or materials been
provided by unaffiliated parties on a competitive basis;
commissions, advertising and promotional expenditures; costs or
expenses related to any “Structural Elements” (as
hereinafter defined in Section 13(b)); and costs or expenses
related to Landlord’s exercise of Landlord’s Reserved
Property Rights.
(c) Commencing on the Expense Rent
Commencement Date, Tenant shall pay its Expense Rent in monthly
installments on the first day of each month on an estimated basis
as reasonably determined by Landlord. Landlord may adjust such
estimate at any time and from time to time based upon
Landlord’s experience and anticipation of costs. Within
ninety (90) days following the end of each calendar year during the
Term, Landlord shall deliver to Tenant a statement (the “End
of Year Expense Rent Statement”) setting forth the actual
expenses of the Property for such calendar year, the amount paid by
Tenant as Expense Rent on account thereof, Tenant’s Share of
such expenses, and the amount due to or from Tenant. If Tenant has
paid less than the actual amount due, Tenant shall pay the
difference to Landlord within twenty (20) days after
Landlord’s request therefor. Any amount paid by Tenant which
exceeds the amount due shall be credited to the next succeeding
payments due as Expense Rent hereunder, unless the Term has then
expired in which event such excess amount shall be refunded to
Tenant within thirty (30) days after the Expiration Date. If the
Expense Rent Commencement Date is other than the first day of a
calendar year, or the Expiration Date is prior to the last day of a
calendar year, the Expense Rent shall be apportioned so that Tenant
shall pay only such portion of the expenses of the Property
attributable to the period of such calendar year occurring after
the Expense Rent Commencement Date or prior to the Expiration Date,
as the case may be.
(d) Without limiting any of
Tenant’s obligations pursuant to this Section 5, Tenant shall
have the right, at its cost and expense, to audit the Expense Rent
for the immediately preceding calendar year only in order to verify
the accuracy of any expense which was charged to Tenant pursuant to
this Section 5 provided that (i) such audit shall be conducted at
the office where Landlord maintains its records and only after
Tenant gives Landlord at least thirty (30) days’ prior
written notice, (ii) Tenant shall deliver to Landlord a copy of the
results of such audit within one (1) year following Tenant’s
receipt of the End of Year Expense Rent Statement; (iii) no
assignee shall conduct an audit for any period during which such
assignee was not in possession of the Premises; (iv) Tenant shall
keep the results of such audit strictly confidential and shall not
disclose the same to any other party (except to Tenant’s
attorneys, accountants, consultants, or as required by law or
pursuant to court order); (v) no subtenant, except a subtenant
pursuant to a Permitted Transfer, shall have any right to conduct
an audit; (vi) no audit shall be conducted at any time that an
uncured Event of Default is outstanding under this Lease; and (vii)
such audit shall only be conducted by a certified public accountant
not compensated on a contingent fee basis. Tenant may not remove
any of Landlord’s expense records or other documents from the
office where Landlord maintains the same. In the event that
Tenant’s audit alleges that an error was made by Landlord,
Landlord shall have ninety (90) days following receipt of the
results of such audit to obtain an audit from an accountant of
Landlord’s choice, at Landlord’s cost and expense, or
Landlord shall be
deemed to have accepted the results of
Tenant’s audit. In the event that Landlord’s and
Tenant’s accountants shall be unable to reconcile the
results, both accountants shall mutually agree upon a third
accountant whose determination shall be conclusive. The cost of any
such third accountant shall be shared equally between Landlord and
Tenant. If it is determined that Tenant has paid less than the
actual amount due, Tenant shall pay the difference to Landlord
within thirty (30) days after the date of such determination. If it
is determined that Tenant has paid any amount in excess of the
amount due, such excess amount shall be refunded to Tenant within
thirty (30) days after the date of such determination.
6. Real Estate Taxes .
(a) Commencing on January 1, 2007 (the “Tax Rent Commencement
Date”), Tenant shall pay as Additional Rent Tenant’s
Share referred to in Section 1(h) of the Lease of all real estate
taxes assessed against the Property for any tax fiscal year which
occurs wholly or partially during the Term of this Lease in excess
of the real estate taxes assessed against the Property for the tax
fiscal year referred to in Section 1(j) (the “Base Tax
Year”) (such Additional Rent is hereinafter called the
“Tax Rent”). The term “real estate taxes”
shall mean (i) any tax or assessment levied, assessed or imposed at
any time by any governmental authority on or against the Property
or any part thereof; (ii) any assessment for public betterments or
improvements levied, assessed or imposed upon or against the
Property ; (iii) any legal fees and other costs incurred by
Landlord in connection with evaluating and/or contesting the
assessed valuation of the Property for real estate tax purposes;
and (iv) any tax levied, assessed or imposed at any time upon or
against the receipt of income or rents or any other tax upon
Landlord as a substitute or supplement in whole or in part for a
real estate tax or assessment. Except as set forth in item (iv) of
this Section 6(a), the term “real estate taxes” shall
not include income taxes, gift taxes, rent taxes, estate taxes,
inheritance taxes, or any taxes (or increases thereof) resulting
from Landlord’s exercise of Landlord’s Reserved
Property Rights. In the event that Landlord receives a
reimbursement, refund, credit or other retroactive adjustment of
real estate taxes after Tenant has paid same, an appropriate
adjustment shall be made in the amount of Tax Rent payable by
Tenant to Landlord and Landlord shall promptly remit to Tenant any
amounts due as a result of such reimbursement, refund, credit or
other retroactive adjustment, which obligation shall survive the
Expiration Date of this Lease. Tenant shall not be responsible for
any late fees, charges, penalties or interest due to
Landlord’s delinquency or delay in the payment of real estate
taxes, unless such delinquency or delay is solely as a result of
Tenant’s delinquency or delay in remitting such sums to
Landlord.
(b) Commencing on the Tax Rent
Commencement Date, Tenant shall pay its Tax Rent in monthly
installments on the first day of each month on an estimated basis
as reasonably determined by Landlord. Landlord may adjust such
estimate at any time and from time to time based upon
Landlord’s anticipation of the real estate taxes which may be
assessed against the Property. Within ninety (90) days after the
real estate taxes for any tax fiscal year shall be fixed by the
appropriate governmental authorities, Landlord shall deliver to
Tenant a statement (the “End of Year Tax Rent
Statement”) setting forth the actual real estate taxes
assessed against the Property for such tax fiscal year, the amount
paid by Tenant as Tax Rent on account thereof, Tenant’s Share
of such real estate taxes, and the amount due to or from Tenant.
The End of Year Tax Rent Statement shall include copies of all
bills, invoices and/or receipts for real estate taxes covered by
such End of Year Tax Rent Statement. If Tenant has paid less than
the actual amount due, Tenant shall pay the difference to Landlord
within twenty (20) days after Landlord’s request therefor.
Any
amount paid by Tenant which exceeds the actual
amount due shall be credited to the next succeeding payments due as
Tax Rent hereunder, unless the Term has then expired in which event
such excess amount shall be refunded to Tenant within thirty (30)
days following the Expiration Date. Real estate taxes for any tax
fiscal year beginning before the Tax Rent Commencement Date or
terminating after the Expiration Date shall be apportioned so that
Tenant shall pay only such portion of the increase in real estate
taxes as shall be attributable to the period of such tax fiscal
year occurring after the Tax Rent Commencement Date or prior to the
Expiration Date, as the case may be. Unless Tenant, within one (1)
year after the End of Year Tax Rent Statement is furnished, shall
give notice to Landlord that Tenant disputes said End of Year Tax
Rent Statement, specifying in reasonable detail the basis for such
dispute, the End of Year Tax Rent Statement furnished to Tenant by
Landlord shall be conclusively binding upon Tenant.
(c) Tenant shall have the privilege,
before delinquency occurs, of contesting the legality or amount of
any real estate taxes levied against the Property in the name of
Landlord or Tenant, or both. Any such contest, in the first
instance, shall be at the cost and expense of Tenant. Tenant shall
indemnify and hold harmless Landlord and Landlord’s managing
agent from and against all liability, claims or costs, including
reasonable legal fees, arising from any such contest. Tenant shall
continue to pay all Tax Rent due and owing hereunder pending the
outcome of any such contest.
(d) Landlord shall deliver to Tenant
copies of all notices relating to the imposition of new real estate
taxes, or the increase in real estate tax rates or assessments, at
least thirty (30) days prior to any deadline for the filing of a
contest to such imposition or increase as a matter of right so that
Tenant may have ample time to contest the same.
7. Insurance . (a)
Tenant shall provide, at its own expense, and keep in force during
the Term:
(1) Commercial General Liability
Insurance, including contractual liability coverage, insuring
against and saving harmless Landlord, any “Landlord’s
Mortgagee” (as hereinafter defined in Section 30(c)) and
Tenant against any liability which arises from any occurrence on or
about the Premises, or which arises from any liability, claims or
costs indicated in Section 16 against which Tenant is required to
indemnify Landlord. The coverage limits of said commercial general
liability insurance policy shall be at least $3,000,000.00 in
combined single limit with respect to bodily injury, death or
property damage arising out of any one occurrence. Such amount
shall be subject to periodic increase as reasonably required by
Landlord, but no more frequently than semi-annually (which shall be
maintained from and after the Delivery Date).
(2) Fire and casualty insurance with
broad form extended coverage, including, but not limited to,
coverage for vandalism and malicious mischief, in an amount
reasonably determined by Tenant, covering Tenant’s trade
fixtures, equipment, inventory and other contents of the Premises
(which shall be maintained from and after the Delivery
Date).
(3) Business interruption insurance
in an amount at least sufficient to pay Tenant’s obligations
as to payment of Annual Rent and Additional Rent under this Lease
for a period of no less than eighteen (18) months.
(4) Workers’ Compensation
insurance in accordance with the laws of the state in which the
Premises are located.
(5) Such other insurance as Landlord
may from time to time require, in Landlord’s good faith and
commercially reasonable judgment.
(b) All such policies shall be
issued by insurance companies selected by Tenant with an A.M. Best
rating of A-/VIII or better and duly licensed and authorized to
transact business in the state in which the Premises are located.
Tenant agrees to deliver to Landlord, prior to the commencement of
the Term, and thereafter not later than ten (10) days after request
by Landlord, a certificate of insurance as to any such policy of
insurance, together with proof of the payment of the initial or
renewal premiums therefor. Such insurance shall be non-cancelable
without ten (10) business days’ prior written notice to
Landlord and Landlord’s Mortgagee and any loss shall be
payable notwithstanding any act or negligence of Tenant or Landlord
or any agent or employee thereof. Any insurance coverage maintained
by Tenant may be included under Tenant’s
“blanket” insurance policies provided such policies
identify the Premises and allocate to the Premises not less than
the required coverage contained herein.
(c) Tenant and Landlord each hereby
releases the other party from any and all liability in the event of
damage to or destruction of the Premises or the contents thereof,
whether or not caused by the negligence or other act, omission to
act or fault of either party hereto, or their agents, servants or
employees to the extent that such liability is covered by any
insurance required to be carried by either party hereunder or any
other insurance actually carried by either party. It is the intent
of Landlord and Tenant that the releasing party shall look to its
own insurance policies for compensation in the event of any damage
to or destruction of the Premises or the contents thereof. In the
event that the insurance required to be maintained or actually
maintained by the releasing party does not cover such damage or
destruction, and if the other party’s insurance does cover
such damage or destruction, the releasing party shall be entitled
to seek compensation from the other party’s insurance
policies for such damage or destruction. In addition to the
foregoing, the party responsible for the damage or destruction
shall be obligated to reimburse the other party for any insurance
deductible required to be paid in connection with such damage or
destruction. All property insurance policies carried by Tenant and
Landlord covering the Premises, or the contents thereof, or in any
manner relating thereto, shall expressly provide that the foregoing
release shall not affect or reduce the coverage or the
insurer’s obligations thereunder and shall also expressly
waive any right of subrogation on the part of the insurer against
the Landlord or Tenant (as applicable).
(d) Tenant shall comply with the
requirements of any insurance policy carried by Landlord or Tenant
covering the Property or the Premises, all requirements of the
issuer of any such policy, and the applicable regulations and
requirements of the National Board of Fire Underwriters, any
applicable local board of fire underwriters, and any other body
exercising a similar function.
(e) Landlord shall maintain,
throughout the Term: (i) commercial general liability insurance
coverage written on an occurrence form with a contractual liability
endorsement
covering Landlord’s indemnity obligations
under this Lease, with a combined single limit of not less than
$2,000,000 per occurrence and $3,000,000 annual aggregate covering
all claims for bodily injury (including death), (ii) all risk fire
and casualty insurance with broad form extended coverage,
including, but not limited to, coverage for vandalism and malicious
mischief, in the amount of full replacement cost, from time to
time, of the Building (but excluding foundations and excavation),
(iii) flood hazard insurance as required by law up to the maximum
limits of insurance available under the National Flood Insurance
Program authorized by the Flood Disaster Protection Act of 1973, as
amended. The costs of such premiums for the aforesaid policies
shall be included in the Expense Rent hereunder.
8. Utilities and
Services . (a) Tenant agrees to pay, as Additional Rent,
directly to the appropriate supplier, all charges for electricity,
light, heat or other utility supplied to the Property, including
without limitation, all lighting of the parking areas. Tenant shall
arrange with the public utility companies serving the Property for
such utilities to be provided and billed to Tenant. Tenant shall
have the right to install electrical equipment using current in
excess of 110 volts or otherwise increase the amount of electricity
furnished to the Property, provided that Tenant, at Tenant’s
sole cost and expense, provides any upgrades to the electrical
systems at the Property which may be necessary as a result thereof.
Notwithstanding anything to the contrary contained herein, Tenant
shall not be responsible for any costs or expenses of any utilities
supplied, consumed or used in connection with Landlord’s
exercise of Landlord’s Reserved Property Rights.
(b) Landlord covenants and agrees,
throughout the Term, to operate, maintain, repair and replace the
HVAC and all other mechanical systems serving the Building (or
cause same to occur), in good condition and repair, commensurate
with other office buildings similar to the Premises in the
geographic area of Fort Washington and Horsham, Pennsylvania,
including, without limitation, provision of the following services:
(i) automatically operated elevator service; (ii) landscaping;
(iii) parking lot maintenance (together with the “Right of
Way” (as defined in Section 34, below)); (iv) snow and ice
removal (together with removal from the Right of Way); and (v) all
of the services described in Sections 5 and 13(b), and Schedule 1
hereof. Tenant shall be responsible for Tenant’s Share of the
cost of such services in accordance with Section 5
hereof.
(c) Landlord shall not be liable for
any damages to Tenant resulting from the quality, quantity,
failure, unavailability or disruption of any services beyond the
reasonable control of Landlord and the same shall not constitute a
termination of this Lease or an actual or constructive eviction or
entitle Tenant to an abatement of rent. Landlord shall not be
responsible for providing any services not specifically provided
for in this Lease. Landlord reserves the right to temporarily
suspend any of the services agreed to be supplied by Landlord
hereunder when reasonably necessary by reason of accident or for
repairs, alterations, replacements or improvements reasonably
necessary or desirable in the reasonable judgment of Landlord for
as long as shall be reasonably required by reason thereof, and
Landlord shall not be liable to Tenant and Tenant shall not be
entitled to any abatement or reduction of rent by reason thereof;
provided, however, Landlord shall not unreasonably interfere with
Tenant’s operation of its business at the Premises in
performing any such repairs, alterations, replacements or
improvements.
9. Permitted Uses .
(a) Tenant may use the Premises only for the uses set forth in
Section 1(f) above. Notwithstanding the foregoing, Tenant shall not
use or permit the Premises
to be used for any unlawful purpose or in
violation of any certificate of occupancy covering the Property or
which may constitute a public or private nuisance or void any
insurance in force relating to the Property.
(b) Notwithstanding anything to the
contrary contained herein, in the event that Tenant vacates or
abandons the Premises for a period of sixty (60) days or more,
Landlord shall have the right to terminate this Lease upon thirty
(30) days’ prior written notice to Tenant and neither party
shall have any further rights or obligations hereunder thereafter.
Tenant shall not be deemed to have vacated or abandoned the
Premises if Tenant is not in possession as a result of a Casualty
or Condemnation, or in connection with a change in possession of
the Premises resulting from an assignment or sublet of the Premises
in accordance with Section 18 hereof.
10. Parking . Landlord
hereby confirms to Tenant that Tenant and its employees and
invitees shall have the right to use the parking areas provided by
Landlord on the Property for the parking of passenger automobiles,
trucks and vans, and storage of trailers. Without limiting the
foregoing, Landlord represents and warrants to Tenant that there
currently is, and subject to Force Majeure, will continue to be
during the Term, paved parking at the Property to provide Tenant
with a minimum of 4.2 parking spaces per 1,000 square feet of
rentable area contained within the Premises, subject to Section 22
hereof. Vehicles shall not be parked in driveways, access roads or
fire lanes. Landlord shall not be required to keep parking spaces
clear of unauthorized vehicles or to otherwise supervise the use of
the parking areas. Landlord shall not be responsible for any damage
to or theft of any vehicles in the parking areas. Landlord reserves
the right from time to time to make any alterations or repairs that
it reasonably deems necessary to the parking areas, roads or
driveways, and to temporarily revoke or modify the parking rights
granted to Tenant without any abatement or reduction of rent by
reason thereof; provided, however, that Landlord shall provide
Tenant with at least thirty (30) days’ notice prior to
commencement thereof except in the event of an emergency in which
event Landlord shall only be required to give such notice, if any,
including telephonic notice, as is reasonably practical under the
circumstances, and, in all events, shall use all commercially
reasonable efforts to coordinate with Tenant to minimize disruption
to the operation of Tenant’s business at the
Premises.
11. No Representations
. Tenant acknowledges that Landlord has not made any representation
with respect to any matter or thing affecting or related to the
Premises, other than expressly provided herein.
12. Compliance with
Law . (a) Tenant shall take all necessary action to conform
to and comply with all laws, orders and regulations of any
governmental authority or Landlord’s or Tenant’s
insurers, now or hereafter applicable to Tenant’s manner of
use or occupancy of the Premises, including the federal
Occupational Safety and Health Act. Tenant shall obtain all permits
and certificates of occupancy necessary for Tenant’s
occupancy or use of the Premises. Landlord shall comply with all
other laws, orders and regulations of any governmental authority or
Landlord’s insurers and Landlord’s Mortgagee in the
performance of Landlord’s obligations under this
Lease.
(b) Tenant shall not cause or permit
the release, discharge, or disposal nor the presence, use,
transportation, generation, or storage of any Hazardous Materials
(as hereinafter
defined) in, on, under, about, to, or from the
Premises by either Tenant, Tenant’s employees, agents,
contractors, or invitees (for this Section 12 only, all of the
foregoing shall be collectively referred to as
“Tenant”) other than the use of such materials in
normal and customary quantities reasonably necessitated by the
Tenant’s regular business activities (“Permitted
Substances”). Permitted Substances include (i) office
supplies (such as glue and copier toner), (ii) cleaning materials,
supplies and solutions, and (iii) certain substances used from time
to time by Tenant for manufacturing, research and development so
long as all of the foregoing are used and stored in quantities and
in a manner in compliance with applicable “Environmental
Laws” (as hereinafter defined).
(c) Tenant further agrees and
covenants to Landlord, its agents, employees, affiliates and
shareholders (for this Section 12 only, all of the foregoing shall
be collectively referred to as “Landlord”) the
following:
1. To comply with all Environmental
Laws in effect, or which may come into effect, applicable to the
Tenant or Tenant’s use and occupancy of the
Premises;
2. To the extent Tenant obtains
notice or knowledge of the following with respect to the Premises
and/or the Property, to promptly notify Landlord, in writing, of
any existing, pending or threatened (a) investigation, inquiry,
claim or action by any governmental authority in connection with
any Environmental Laws; (b) third party claims; (c) regulatory
actions; and/or (d) contamination of the Premises and/or the
Property;
3. To, at Tenant’s expense,
investigate, monitor, remediate, and/or clean up any Hazardous
Materials or other environmental condition on, about, or under the
Premises and/or the Property required as a result of the manner of
Tenant’s use or occupancy of the Premises;
4. To keep the Premises free of any
lien imposed pursuant to any Environmental Laws arising out of
Tenant’s breach of this Section 12; and
5. To indemnify, defend, and save
Landlord harmless from and against any and all claims (including
personal injury, real, or personal property damage), actions,
judgments, damages, penalties, fines, costs, liabilities, interest,
or attorney’s fees that arise, directly or in directly, from
Tenant’s violation of any Environmental Laws or the presence
of any Hazardous Materials on, under or about the Premises and/or
the Property present as a result of the acts or omissions of
Tenant.
(d) Tenant’s obligations,
responsibilities, and liabilities under this Section 12 shall
survive the Expiration Date of this Lease.
(e) For purposes of this Section 12
the following definitions apply: “Hazardous Materials”
shall mean (1) any “hazardous waste” and/or
“hazardous substance” defined pursuant to any
Environmental Laws; (2) asbestos or any substance containing
asbestos; (3) polychlorinated biphenyls; (4) lead; (5) radon; (6)
pesticides; (7) petroleum or any other substance containing
hydrocarbons; (8) any substance which, when on the Premises, is
prohibited by any Environmental
Laws; and (9) any other substance, material, or
waste which (i) by any Environmental Laws requires special handling
or notification of any governmental authority in its collection,
storage, treatment, or disposal or (ii) is defined or classified as
hazardous, dangerous or toxic pursuant to any legal
requirement.
“Environmental Laws”
shall mean: any and all federal, state and local laws, statutes,
codes, ordinances, regulations, rules or other requirements,
relating to human health or safety or to the environment,
including, but not limited to, those applicable to the storage,
treatment, disposal, handling and release of any Hazardous
Materials, all as amended or modified from time to time.
(f) Landlord covenants and agrees
that it shall not cause or permit the release, discharge, or
disposal nor the presence, use, transportation, generation, or
storage of any Hazardous Materials in, on, under, about, to, or
from the Premises and/or the Property by Landlord other than the
use of such materials in normal and customary quantities reasonably
necessary for Landlord to perform its obligations under this Lease,
provided such materials are used and stored in quantities and in a
manner which complies with applicable Environmental Laws. Landlord
hereby represents and warrants to Tenant, to Landlord’s
knowledge, that except as shown in the Phase I Environmental Site
Assessment Report prepared by IT Corporation, dated February 21,
2001 , (i) as of the date hereof the Premises and the
Property are, and upon the Delivery Date the Premises and the
Property shall be in compliance with all Environmental Laws, and as
of the date hereof the Premises and the Property are, and upon the
Delivery Date the Premises and the Property shall be free of
Hazardous Materials (other than Permitted Substances), including,
without limitation, asbestos-containing materials, and (ii) the
Building was stripped down to its structural steel frame during
1998. Landlord further agrees and covenants to Tenant, its agents,
employees, affiliates and shareholders the following:
1. To comply with all Environmental
Laws in effect, or which may come into effect, applicable to
Landlord’s obligations under this Lease unless required to be
complied with by Tenant in accordance with the terms
hereof;
2. To the extent Landlord obtains
notice or knowledge of the following with respect to the Premises,
to promptly notify Tenant, in writing, of any existing, pending or
threatened (a) investigation, inquiry, claim or action by any
governmental authority in connection with any Environmental Laws;
(b) third party claims; (c) regulatory actions; and/or (d)
contamination of the Premises and/or the Property;
3. To, at Landlord’s expense,
investigate, monitor, remediate, and/or clean up any Hazardous
Materials or other environmental condition on, about, or under the
Premises required as a result of Landlord’s performance of
its obligations under this Lease;
4. Subject to item 4 of Section
12(c) above, to keep the Premises free of any lien imposed pursuant
to any Environmental Laws; and
5. To indemnify, defend, and save
Tenant harmless from and against any and all claims (including
personal injury, real, or personal property damage),
actions,
judgments, damages, penalties, fines, costs,
liabilities, interest, or attorney’s fees that arise,
directly or in directly, from Landlord’s violation of any
Environmental Laws, or the presence of any Hazardous Materials on,
under or about the Premises which existed as of the Delivery Date,
or are otherwise present as a result of any act or omission of
Landlord.
(g) Landlord’s obligations,
responsibilities, and liabilities under this Section 12 shall
survive the Expiration Date of this Lease.
13. Care and Repair of
Premises; No Waste . (a) Tenant shall, throughout the Term
and at Tenant’s sole cost and expense, make all interior and
exterior repairs to the Premises which Landlord is not obligated to
make pursuant to the provisions of this Lease and shall keep and
maintain the Premises in a neat and orderly condition; and, upon
expiration of the Term, Tenant shall leave the Premises in good
order and condition, ordinary wear and tear, damage by
“Casualty” (as hereinafter defined in Section 21) alone
excepted. Landlord represents and warrants to Tenant that the
heating, ventilating and air-conditioning equipment serving the
Premises shall be in good to excellent working condition upon the
Delivery Date.
(b) Landlord shall, throughout the
Term, operate, maintain, repair and replace, in good condition and
repair, and in accordance with other office buildings similar to
the Premises in the geographic area of Fort Washington and Horsham,
Pennsylvania: (i) the structural elements of the Premises
including, without limitation, the footings, foundation, structural
beams and supports, floor slabs and load-bearing walls
(collectively, “Structural Elements”); (ii) the roof,
together with the gutters and downspouts; (iii) the HVAC and other
mechanical systems serving the Building; and (iv) all parking lots
(including resurfacing), driveways, roadways, sidewalks, pathways,
walkways and retaining walls located upon the Premises; provided,
however, that Landlord shall have no responsibility to make any
repairs unless and until Landlord receives written notice of the
need for such repair, or otherwise has actual knowledge of the need
therefor. Landlord shall keep and maintain all sidewalks, parking
areas, curbs and access ways adjoining the Property in a clean and
orderly condition, free of accumulation of dirt and rubbish and
shall keep and maintain all landscaped areas within the Property in
a neat and orderly condition. All costs incurred by Landlord in
performing its obligations pursuant to this Section 13(b), other
than costs and expenses with respect to Structural Elements, shall
be included in the term expenses and passed through to Tenant
pursuant to the terms and conditions of Section 5. Notwithstanding
the foregoing, repairs and replacements to the Property and the
Premises arising out of or caused by Tenant’s use or
occupancy of the Premises, by Tenant’s installation of
alterations, additions, improvements, trade fixtures or equipment
in or upon the Premises or by any act or omission of Tenant or any
employee, agent, contractor or invitee of Tenant shall be made at
Tenant’s sole cost and expense and Tenant shall pay Landlord
the cost of any such repair or replacement, as Additional Rent,
within ten (10) days after demand.
(c) Tenant shall not permit any
waste, damage or injury to the Property and/or the
Premises.
(d) Tenant shall be responsible, at
its sole cost and expense, for providing janitorial service to the
Premises to the reasonable satisfaction of Landlord.
14. Alterations, Additions and
Improvements . (a) After completion of the “Initial
Work”, Tenant shall not make any alterations, additions or
improvements to the Premises (“Alterations”) without
Landlord’s prior written consent. Landlord shall not
unreasonably withhold, condition or delay its consent to any
Alterations which do not adversely impact the structure, mechanical
systems or exterior of the Building or result in a material
impairment of the value of the Premises and/or the Property.
Notwithstanding the foregoing, Landlord’s consent shall not
be required (i) for any Alterations of a cosmetic nature only,
and/or (ii) for any Alterations having an estimated cost equal to
or less than $75,000.00 in the aggregate per project which do not
adversely impact the structure, mechanical systems or exterior of
the Building or result in a material impairment of the value of the
Premises and/or the Property ((i) and (ii) above being collectively
referred to as the “Minor Alterations”), provided that
Tenant shall provide Landlord with thirty (30) days’ written
notice prior to making any Minor Alterations except for Minor
Alterations of a cosmetic nature only and Minor Alterations having
an estimated cost equal to or less than $5,000.00 in the aggregate
per project. Prior to making any Alterations for which
Landlord’s consent is required hereunder, Tenant shall submit
to Landlord detailed plans and specifications for such Alterations
and reimburse Landlord for all reasonable expenses incurred by
Landlord in connection with its review thereof, and Tenant shall
also provide to Landlord for its reasonable approval the identity
of the contractor Tenant proposes to employ to construct the
Alterations. All Alterations shall be accomplished in accordance
with the following conditions:
(i) Tenant shall procure all
governmental permits and authorizations for the Alterations, and
obtain and provide to Landlord a certificate of occupancy upon
completion of the Alterations, if appropriate.
(ii) Tenant shall arrange for
extension of the liability insurance provided for in Section 7 to
apply to the construction of the Alterations.
(iii) Intentionally
omitted.
(iv) Intentionally
omitted.
(v) Tenant shall construct the
Alterations in a good and workmanlike manner utilizing materials of
first quality and in compliance with all laws and governmental
regulations.
(vi) Upon completion of any
Alterations, Tenant shall provide Landlord with either a waiver of
liens prior to the commencement of any Alterations, or a final
construction lien release after final completion of Alterations,
from Tenant’s general contractors, subcontractors or
sub-subcontractors, suppliers of materials and all other persons or
entities acting for, through or under any of the foregoing;
provided, however, that Tenant shall only be required to provide
Landlord with such waiver of liens or final construction lien
release from Tenant’s general contractors if such waiver of
liens or final construction lien release from Tenant’s
general contractors also covers and binds Tenant’s
subcontractors or sub-subcontractors, suppliers of materials and
all other persons or entities acting for, through or under
Tenant’s general contractors or any of the foregoing. Such
final construction lien releases, if applicable, shall be
accompanied by a copy of the canceled check for final payment or
“paid” receipt.
(vii) Within twenty (20) days after
completion of the Alterations, Tenant shall provide Landlord with a
copy of any “as built” plans of the Alterations which
Tenant has produced for its own use, or, if no as-built plans have
been produced, a “redline” copy of the plans for such
Alterations.
(b) All Alterations shall be the
property of Landlord and shall remain on and be surrendered with
the Premises upon termination of the Lease, unless Landlord shall
notify Tenant at the time it consents to a proposed Alteration,
that it desires that such Alteration be removed at the expiration
of the Lease, in which event Tenant agrees to remove such
Alterations on or prior to the Expiration Date, restore the
Premises to its existing condition prior to construction of the
Alterations and repair any damage to the Premises or the Building
caused by such removal. Notwithstanding the foregoing sentence or
anything else contained in this Lease, subject to the last sentence
of Section 23(a) hereinbelow, (i) in no event shall Tenant be
required to remove (A) any of the Initial Work, (B) any Minor
Alterations, or (C) any Alterations Landlord has agreed may remain
upon the Premises; and (ii) Tenant shall be required to remove
cabling and wiring in accordance with the terms and provisions of
Section 23(b) hereinbelow.
(c) Notwithstanding anything to the
contrary contained herein, Tenant, and any assignee or sublessee
pursuant to a Permitted Transfer, but no other assignee or
sublessee, shall have the right to make roof penetrations for
hoods, HVAC and other mechanical systems, and other equipment that
Tenant desires to place upon the roof (including, without
limitation, satellite dishes or technological evolutions thereof)
(collectively referred to as the “Roof Equipment”),
provided that Tenant does so in a manner which does not void any
warranty covering the roof, and provided further that none of the
Roof Equipment shall transmit in a manner which interferes with any
satellite dish (or technological evolution thereof) previously
installed upon the Property by Landlord. Prior to installing the
Roof Equipment, Tenant shall provide Landlord with plans and
specifications therefor, as well as structural calculations and
such other information pertaining to the Roof Equipment as Landlord
may reasonably require. Landlord’s prior written consent to
such plans and specifications, as well as the location and manner
of installation of the Roof Equipment shall be required, such
consent not to be unreasonably withheld, conditioned or delayed.
Tenant shall, within twenty (20) days of being billed therefor by
Landlord, reimburse Landlord for all reasonable expenses incurred
by Landlord in connection with its review of the foregoing. Tenant
shall obtain, at its sole cost and expense, all governmental
permits and approvals required for the installation and use of the
Roof Equipment. Tenant shall install the Roof Equipment in a good
and workmanlike manner using a roofing contractor reasonably
approved by Landlord. Once installed, the Roof Equipment shall be
deemed to be part of the Premises and all references in this Lease
to the Premises shall include said Roof Equipment. Without
limitation, Tenant shall,
