EXHIBIT 10.3
N E T L E A S
E
between
RUDY'S THERMO-NUCLEAR DEVICES,
Landlord
and
TDL MANUFACTURING, INC.,
TULIP DEVELOPMENT LABORATORY, INC.
jointly and severally, Tenant
Premises:
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1765 Walnut Lane,
Quakertown,
Milford Township,
Bucks County,
Pennsylvania
<PAGE>
ii
i
TABLE OF CONTENTS
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ARTICLE 1 DEMISED PREMISES; TERM OF LEASE; POSSESSION
1
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ARTICLE 2 RENT
2
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ARTICLE 3 PAYMENT OF TAXES, ASSESSMENTS, ETC.
5
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ARTICLE 4 SURRENDER; REMOVAL OF PERSONALTY
7
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ARTICLE 5 INSURANCE
8
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ARTICLE 6 RIGHT TO PERFORM OTHER PARTIES' COVENANTS
10
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ARTICLE 7 REPAIRS, MAINTENANCE AND CONDITION OF THE DEMISED
PREMISES 11
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ARTICLE 8 COMPLIANCE WITH LAWS
12
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ARTICLE 9 CHANGES, ALTERATIONS, ADDITIONS
15
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ARTICLE 10 DISCHARGE OF LIENS
16
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ARTICLE 11 NO WASTE
17
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ARTICLE 12 USE OF DEMISED PREMISES
17
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ARTICLE 13 ENTRY ON DEMISED PREMISES BY LANDLORD
18
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ARTICLE 14 INDEMNIFICATION OF LANDLORD AND TENANT
19
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ARTICLE 15 DAMAGE OR DESTRUCTION
20
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ARTICLE 16 CONDEMNATION
21
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ARTICLE 17 INTENTIONALLY OMITTED
23
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ARTICLE 18 ASSIGNMENTS, MORTGAGES AND SUBLEASES OF TENANT'S INTEREST
23
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ARTICLE 19 CONDITIONAL LIMITATIONS--DEFAULT PROVISIONS
25
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ARTICLE 20 SECURITY DEPOSIT
30
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ARTICLE 21 CONDITION OF DEMISED PREMISES
30
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ARTICLE 22 NOTICES
31
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ARTICLE 23 HOLDOVER
31
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ARTICLE 24 QUIET ENJOYMENT
31
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ARTICLE 25 EXCAVATION AND SHORING
32
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ARTICLE 26 NO RENT ABATEMENT
32
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ARTICLE 27 [INTENTIONALLY OMITTED]
33
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ARTICLE 28 ESTOPPEL CERTIFICATES
33
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ARTICLE 29 SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
34
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ARTICLE 30 WAIVER OF JURY TRIAL AND COUNTERCLAIMS
35
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ARTICLE 31 DEFINITION OF CERTAIN TERMS
35
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ARTICLE 32 BROKERS
36
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ARTICLE 33 CONSENT OF LANDLORD
36
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ARTICLE 34 PAYMENTS UNDER PROTEST
37
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ARTICLE 35 GOVERNING LAW; NON-RECORDATION
37
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ARTICLE 36 NO ORAL MODIFICATION
37
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ARTICLE 37 COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES
37
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ARTICLE 38 CAPTIONS, TABLE OF CONTENTS AND
INVALIDITY OF PARTICULAR PROVISIONS
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37
ARTICLE 39 CONSTRUCTION OF THIS LEASE
38
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<PAGE>
NET LEASE
THIS
NET LEASE (the "Lease") is made as of this
__ day of ________, 2005
between RUDY'S THERMO-NUCLEAR DEVICES, a
Pennsylvania limited partnership having
an address of
("LANDLORD") and TDL
--------
MANUFACTURING, INC. AND TULIP DEVELOPMENT
LABORATORY, INC., each a Pennsylvania
corporation having its principal place of business at 1765 Walnut Lane,
Quakertown, Pennsylvania 18951 (each, and jointly and severally,
"TENANT").
------
This
Lease is granted and accepted upon the foregoing and upon the
following covenants and conditions, and subject to the
following restrictions,
and each of the parties hereby expressly
covenants and agrees to keep, perform
and observe all the terms, covenants and
conditions herein contained on its part
to be kept, performed and observed.
ARTICLE 1
DEMISED PREMISES; TERM OF LEASE; POSSESSION
-------------------------------------------
SECTION1.1
Except
for that portion of the premises identified as
----------
Landlord's Storage (as defined below), Landlord hereby demises
and leases to
--
Tenant, and Tenant hereby leases from
Landlord, the following described premises
(the "DEMISED PREMISES"): all that certain plot,
piece or parcel of land known
-----------------
by the street number 1765 Walnut Lane,
Quakertown, Pennsylvania, lying and being
in Milford Township, Bucks County, Commonwealth of Pennsylvania, as more
particularly bounded and described on Exhibit A annexed
hereto and made a part
---------
hereof (the "LAND"), together with all of the buildings and improvements
----
constructed or to be constructed thereon
(the "IMPROVEMENTS"), and together with
------------
all the right, title and interest, if
any, of Landlord in and to any strips and
gores of land adjoining the Demised
Premises on any side thereof; any land lying
in the bed of any street or avenue
abutting the Demised Premises to the center
line thereof; any easements or other rights in adjoining
property inuring to
Landlord by reason of ownership of the Demised
Premises; and all fixtures and
any replacements thereof, attached to or used in connection with the use,
occupation and operation of the Demised
Premises and all alterations, additions
and improvements hereafter made to the
Demised Premises, title to which may vest
in Landlord; excepting however, approximately
1,200 square feet of the Demised
Premises, currently occupied by Landlord, for continued storage of any
maintenance materials and equipment as Landlord may designate, as more
particularly described on Exhibit B annexed hereto and made a part hereof
----------
("LANDLORD'S STORAGE").
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SUBJECT, however, to the following (the "PERMITTED ENCUMBRANCES"):
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(a) All of the easements, covenants
restrictions and other matters of
record, to the extent that the same are in full force and
effect, listed on
Exhibit C attached hereto and made a part hereof; and
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(b) Present
and future zoning
laws, ordinances, resolutions and regulations
of the Township of Milford and all present and future ordinances, laws,
regulations and orders of all boards, bureaus, commissions
and bodies of any
municipal, county, state or federal sovereigns now or hereafter having or
acquiring jurisdiction of the Demised Premises and the use and improvement
thereof.
SECTION1.2
The
term of this Lease (the "TERM") shall begin on
----------
----
_______________, 2005 (the "COMMENCEMENT DATE") and shall end
the last day of
-----
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the calendar month in which shall occur the fifth (5th) anniversary
of the
Commencement Date (the "FIXED EXPIRATION DATE"), unless sooner
terminated or
----------------------
extended as provided herein (the "EXPIRATION DATE").
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ARTICLE 2
RENT
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SECTION2.1
A.
Tenant shall
pay to Landlord, in
lawful money of the
----------
United States which shall be legal tender for
payment of all debts, public and
private, at the time of payment, in the manner and
at the address of Landlord
specified in this Article 2, during the Term an
annual rent (the "NET RENT"),
---------
--------
over and above the other payments to be made
hereunder by Tenant, as follows:
(i) From
the Commencement Date through and including the
last day of
the calendar month in which shall occur the first anniversary of the
Commencement Date, at the rate of $109,200.00,
in equal monthly installments of
$9,100.00;
(ii) From the first
day of the calendar month immediately following the last
day of the calendar month in which such
first anniversary occurred through and
including the last day of the calendar month in which
shall occur the second
anniversary of the Commencement Date, at the rate of $111,384.00, in
equal
monthly installments of $9,282.00;
(iii) From
the first day of the calendar month immediately
following the
last day of the calendar month in which
such second anniversary occurred through
and including the last day of the
calendar month in which shall occur the third
anniversary of the Commencement Date at the rate of $113,616.00, in equal
monthly installments of $9,468.00;
(iv) From the first
day of the calendar month immediately following the last
day of the calendar month in which
such third anniversary occurred, through and
including the last day of the calendar month in which
shall occur the fourth
anniversary of the Commencement Date, at the annual rate of $117,024.00,
in
equal monthly installments of $9,752.00; and
(v) From
the first day of the
calendar month immediately following the last
day of the calendar month in which the
fourth anniversary occurred, through and
including the last day of the Term, at the
annual rate of $120,528.00, in equal
monthly installments of $10,044.00.
B. Such
Net Rent shall be paid, except as otherwise
provided herein,
without notice or demand, and without set-off, offset, credit,
abatement or
deduction of any kind whatsoever, in advance
on the first day of each and every
month of the Term.
C. All Net Rent and all other sums due from Tenant
to Landlord under this
Lease (collectively, "RENT") shall be payable, at
Tenant's election, either by
----
(a) wire transfer of funds to an account designated by
Landlord from time to
time or (b) a check drawn on a bank which is a member of the
Pennsylvania
Clearinghouse Association or a successor
thereto. Until Tenant
shall have been
given notice otherwise by Landlord, Tenant
shall pay Rent by check to Landlord
at its address set forth in Article 22.
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SECTION2.2
If
the Term hereof shall commence on any
day other than the
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first day of a calendar month, Tenant shall pay
Landlord on the Commencement
Date proportionate amount of Net Rent due
for the balance of such current month.
SECTION2.3
It is the
purpose and intent of Landlord and Tenant that this
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is a net lease which shall yield to
Landlord the Net Rent specified in Section
-------
2.01.A hereof in each year during the Term of this Lease
and that all costs,
-----
expenses and obligations of every kind and nature whatsoever
relating to the
--
maintenance, operation and repair of the Demised Premises which may
arise or
--
become due during or out of the Term of this Lease shall be
paid by Tenant,
--
except as herein otherwise specifically provided; provided, however, that
--
nothing herein contained shall be construed to require Tenant to
pay (i) the
--
principal of, or interest on, or any other payments with respect to any
--
indebtedness secured by any mortgage which
may now or hereafter affect the Land,
--
the Improvements or any superior lease and the leasehold interest created
thereby, and all renewals, extensions,
supplements, amendments, modifications,
consolidations and replacements thereof or
thereto, substitutions therefor, and
advances made thereunder (each, a "FEE MORTGAGE"), any rent
on any underlying
------------
lease, or any other indebtedness of Landlord
of any kind, or (ii) any tax, fee
or other amount not payable by Tenant pursuant to
Section 3.2 hereof, all of
-----------
which amounts shall be payable by Landlord.
SECTION2.4
A.
All
Impositions
(as hereinafter defined) and other
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sums payable by Tenant pursuant to the terms of
this Lease (collectively, the
"ADDITIONAL RENT") shall constitute
additional rent and shall be due and payable
--------------
under this Lease at the time and in the
manner herein provided for the payment
of Net Rent, and in the event of nonpayment of
same by Tenant, Landlord shall
have all rights and remedies with
respect thereto as Landlord has hereunder for
the nonpayment of the Net Rent. The extension of time for payment of any
installment of Rent, or the acceptance by Landlord of any money other
than
current legal tender of the United States of America, shall
not be deemed a
waiver of the rights of Landlord to insist upon having
all other payments of
Rent made in the manner and at the time herein specified.
B. In the event Tenant shall fail to pay
in good funds any installment
of Rent on or before the tenth (10th) day after same is due, in order
to
partially defray Landlord's administrative expenses
resulting therefrom, which
Tenant acknowledges shall be difficult to
measure, Tenant shall pay to Landlord
a late charge of three (3%) percent of the amount
then due. This late charge
shall be deemed Additional Rent and shall,
at Landlord's option, be added to the
Rent for the month in which the Rent shall
be due. The demand for and collection
of the aforesaid late charges shall in no way be
construed as a waiver of any
and all remedies that Landlord may have, either by summary proceedings
or
otherwise, as a result of an Event of Default in payment of Rent.
C. No payment by Tenant or receipt by Landlord
of a lesser amount than the
Rent herein stipulated shall be deemed to be other than on account of
the
earliest stipulated Rent, nor shall any
endorsement or statement on any check or
any letter accompanying any check or payment as Rent be deemed
an accord and
satisfaction, and Landlord may accept such
check or payment without prejudice to
Landlord's right to recover the balance of
such Rent or pursue any other remedy
in this Lease.
SECTION2.5
Tenant
shall have the option to extend the term of this Lease
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for one (1) additional period of five (5) years from and after the Fixed
Expiration Date (the "OPTION TERM"), by written notice to Landlord at
least
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ninety (90) days prior to the Fixed
Expiration Date. In
the event the option is
so exercised, the term of the Lease shall be extended on the
same terms and
conditions, except that the Net Rent during
the Option Term shall be as follows:
(i) From
the first day of the
calendar month immediately following the
last day of the calendar month in which
such fifth anniversary occurred through
and including the last day of the
calendar month in which shall occur the sixth
anniversary of the Commencement Date, at the rate of $122,938.56, in
equal
monthly installments of $10,244.88;
(ii) From the first
day of the calendar month immediately following the last
day of the calendar month in which such
sixth anniversary occurred through and
including the last day of the calendar month in which
shall occur the seventh
anniversary of the Commencement Date, at the rate of $125,397.33, in
equal
monthly installments of $10,449.78;
(iii) From
the first day of the calendar month immediately
following the
last day of the calendar month in which such seventh anniversary
occurred
through and including the last day of the calendar month
in which shall occur
the eighth anniversary of the Commencement
Date at the rate of $127,905.28, in
equal monthly installments of $10,658.77;
(iv) From the first
day of the calendar month immediately following the last
day of the calendar month in which such
eighth anniversary occurred, through and
including the last day of the calendar month in which shall
occur the ninth
anniversary of the Commencement Date, at the annual rate of $131,742.44,
in
equal monthly installments of $10,978.54; and
(v) From
the first day of the
calendar month immediately following the last
day of the calendar month in which the
ninth anniversary occurred, through and
including the last day of the Option Term,
at the annual rate of $135,694.71, in
equal monthly installments of $11,307.89.
ARTICLE 3
PAYMENT OF TAXES, ASSESSMENTS, ETC.
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SECTION3.1
A.
Tenant shall
pay or cause to be paid (except as
set
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forth in Section 3.2 hereof), before any
fine, penalty, interest or cost may be
-----------
added thereto for the non-payment thereof, all taxes,
assessments, water and
sewer rents, rates and charges, vault license
fees or rentals, levies, license
and permit fees and other governmental charges,
general and special, ordinary
and extraordinary, foreseen and unforeseen, of any kind and
nature whatsoever
which at any time during Tenant's lease of the
Demised Premises or during the
Term of this Lease may be assessed, levied, imposed upon or
become due and
payable out of, or become a lien upon, the
Demised Premises or any part thereof
or appurtenance thereto (collectively, the
"IMPOSITIONS", and individually, an
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"IMPOSITION"). If, by law, any Imposition may be paid in
installments, Tenant
----------
may pay the same in the minimum installments permitted by the applicable
-
governmental entity. Tenant shall pay only such installments as
shall become
-
due during Tenant's lease of the Demised
Premises during the Term of this Lease.
-
All Impositions for the fiscal or tax years
in which the Term of this Lease ends
shall be apportioned so that Tenant shall pay only the
portion thereof which
corresponds with the portion of said year as is within the Term.
B. Notwithstanding
Section 3.1.A, following an Event of Default
--------------
hereunder, or in the event any trustee,
mortgagee or holder of any Fee Mortgage
(each, a "FEE MORTGAGEE") shall require the
following, then following receipt by
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Tenant from Landlord of notice to such effect, Tenant
shall pay to Landlord,
with each monthly installment of Net Rent, commencing with the next
monthly
installment of Net Rent coming due after
said notice is received, a sum equal to
one-twelfth (1/12th) of the annual amount of
each Imposition next coming due as
determined by Landlord, which such sums shall be adjusted by Landlord
periodically to reflect actual increases or
decreases in such Impositions next
coming due, so that on the next date on
which any installment of such Imposition
shall be due by Landlord to the appropriate taxing
authority, Landlord shall
have previously collected from Tenant sufficient sums on account of such
Imposition to enable Landlord to pay as and when same is due.
If the actual
amount of an Imposition is unknown, upon
discovering the actual amount of such
Imposition, Landlord shall make appropriate adjustments to
the amount of such
monthly installments. If at any time Landlord shall
determine that the amount
collected from Tenant on account of the next
installment of a Imposition shall
be deficient, then Tenant shall deposit with Landlord
within ten (10) days of
demand therefore, the amount of such deficiency. If
at any time Landlord shall
determine that the amount collected or
estimated to be collected from Tenant on
account of the Impositions next coming due is
in excess of the amount actually
due, Landlord shall apply the excess to the next monthly installment of
Impositions coming due.
C. Tenant
shall be responsible for and shall pay,
before delinquency, all
municipal, county, state and federal taxes assessed during the term of
this
Lease against any personal property of any kind
owned by or placed in, upon or
about the Demised Premises by Tenant.
SECTION3.2
Nothing
herein contained shall require Tenant to
pay any of
----------
the following (and the following shall not be deemed
included within the term
"Imposition"): municipal, state or federal income taxes, capital
levy, gift,
estate, succession or inheritance taxes of Landlord, corporate profit or
franchise taxes imposed upon any corporate owner of the fee of the
Demised
Premises, income, profit, or revenue taxes,
assessments or charges imposed upon
the Rent payable by Tenant under this Lease, or transfer
taxes imposed upon
Landlord by reason of transfer of any interest of Landlord in the
Demised
Premises. Notwithstanding the foregoing, if
at any time during the Term of this
Lease the methods of taxation prevailing
at the commencement of the Term hereof
shall be altered so that in lieu of, in
addition to or as a substitute for the
whole or any part of the Impositions
payable upon the date hereof, there shall
be levied, assessed or imposed a tax, assessment,
levy, imposition or charge,
wholly or partially as a capital levy or otherwise, on the Rents
received
therefrom, or measured by or based in whole
or in part upon the Demised Premises
and imposed upon Landlord, then all such
taxes, assessments, levies, impositions
or charges or the part thereof so
measured or based, computed as if the Demised
Premises was Landlord's only property,
shall be deemed to be included within the
term "Impositions". Tenant shall, in addition to the
foregoing, pay any new tax
of a nature not presently in effect but
which may be hereafter levied, assessed,
or imposed upon Landlord or the
Demised Premises, if such tax shall be based on
or arise out of the ownership, use or operation
of the Demised Premises. For
the purpose of computing Tenant's liability for
such type of tax, the Demised
Premises shall be deemed the only property of Landlord.
SECTION3.3
Upon
request, Tenant shall
furnish to Landlord no later than
----------
the date when any Imposition would become
delinquent, official receipts of the
appropriate taxing authority or other evidence
satisfactory to Landlord or such
Fee Mortgagee, evidencing the payment thereof.
SECTION3.4
A.
Tenant may,
subject to Section
3.5, seek a reduction
----------
-----------
in the valuation of the Demised Premises for tax
purposes and may contest in
good faith by appropriate proceedings, at Tenant's expense, the amount or
validity in whole or in part of any
Imposition for any tax year during or prior
to the Term of this Lease, and may defer payment
thereof during such contest
(except that Tenant shall not defer payment
of real estate taxes and assessments
and sewer rents), provided that (i) Tenant is diligently and in good
faith
contesting such Imposition by appropriate
legal proceedings which shall operate
to prevent the enforcement or
collection of the same or the sale of the Demised
Premises or any part thereof to satisfy such
Impositions, (ii) Landlord would
not be, by reason of such post-ponement or
deferment, subject to any actual or
threatened criminal sanctions or penalties or personal
liability, as Landlord
shall determine in its reasonable judgment, and
(iii) no Fee Mortgage would by
reason of such postpone-ment or deferment be, in the reasonable
judgment of
Landlord, in danger of being put in default
or foreclosure, and provided further
that if, in the reasonable opinion of
Landlord, the Demised Premises or any part
thereof or interest therein may be in danger of being sold, forfeited,
foreclosed, terminated, cancelled or lost as a
result of the nonpayment of such
Imposition, Tenant shall promptly upon request of Landlord pay same.
Tenant
shall not, without the consent of Landlord, whose consent shall not be
unreasonably withheld or delayed, settle any such claim or
proceeding (i) in
respect of any fiscal year on or after the
fiscal year in which the Term of this
Lease commences or (ii) the outcome of
which will adversely affect the taxes due
on the Demised Premises for any fiscal year
on or after the fiscal year in which
the Term of this Lease commences. As long as no Event of Default is then
continuing, Landlord hereby designates Tenant as Landlord's
attorney-in-fact,
coupled with an interest, to the extent
necessary to commence and prosecute to
completion any such contest, and Landlord
agrees to cooperate with Tenant in any
such contest to the extent necessary, including
signing any documents, all at
Tenant's sole cost and expense.
B. Tenant hereby
assigns to Landlord all claims and proceedings arising
from such attempts to reduce the valuation of the Demised Premises
for tax
purposes, provided that so long as no Event of Default is then
continuing
Landlord shall not exercise, and shall permit Tenant to exercise, all
such
rights in connection therewith.
SECTION3.5
Landlord
shall have the right to seek a reduction in the
----------
valuation of the Demised Premises assessed
for tax purposes and to prosecute any
action or proceeding theretofore commenced
by Tenant, if such assessed valuation
or valuations shall in whole or in part
relate and pertain to any period of time
subsequent to the expiration or termination of this Lease.
To the extent to
which any tax refund payable as a result of
any such proceeding which Landlord
or Tenant may institute, or payable by
reason of compromise or settlement of any
such proceeding, is based upon a payment made by anyone
other than Landlord,
Landlord shall be authorized to collect the same, subject, however, to
Landlord's obligation to reimburse Landlord and Tenant forthwith for any
reasonable expenses incurred by Landlord or
Tenant in connection therewith, and,
provided no Event of Default is then continuing
hereunder, the net
amount of
such refund shall be apportioned between Landlord and Tenant based
upon the
portion of the fiscal period to which the
refund relates which occurred during
the Term.
SECTION3.6
If
any person or entity to whom any sum
is directly payable
----------
by Tenant under any of the provisions of this Lease shall
refuse to accept
payment of such sum from Tenant, Tenant shall
thereupon give written notice of
such fact to Landlord and shall pay such
sum directly to Landlord at the address
specified in Article 22 hereof, and Landlord shall
thereupon pay such sum to
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such person or entity.
ARTICLE 4
SURRENDER; REMOVAL OF PERSONALTY
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SECTION4.1
Tenant
shall on the last day
of the Term or upon any earlier
----------
termination of this Lease, surrender and deliver up
possession of the Demised
Premises to Landlord in good order, condition and
repair, reasonable wear and
tear and casualty pursuant to Article 15 excepted, free and clear of all
-----------
tenancies and occupancies other than permitted subleases pursuant
to Section
-------
18.3, and free and clear of all liens
and encumbrances other than the Permitted
-
Encumbrances and those, if any, created or suffered by
Landlord, without any
payment or allowance whatever by Landlord on
account of any improvements which
may have been made to the Demised Premises by or on behalf of Tenant.
SECTION4.2
All
furnishings, moveable trade fixtures, equipment and other
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personal property shall be removed by Tenant at or
prior to the termination of
this Lease. Tenant shall repair any damage to the Demised
Premises caused by
such removal or pay or cause to be paid to
Landlord the cost of repairing any
damage arising from such removal and restoration. Any personal property of
Tenant or any subtenant which shall remain in the Demised
Premises after the
termination of this Lease may be deemed to
have been abandoned by Tenant or such
subtenant and may be retained by Landlord as its
property or be disposed of in
such manner as Landlord may see fit, at Tenant's sole cost
and expense. All
Alterations made by Tenant and its subtenants in and to the
Demised Premises
shall remain on the Demised Premises upon the
termination of this Lease unless
Tenant, in its sole discretion, removes such Alterations at or
prior to the
Expiration Date. Tenant shall repair any damage
caused to the Demised Premises
caused by such removal.
SECTION4.3
If
this Lease shall terminate pursuant to
Article 15 or 16
----------
----------------
hereof, then, notwithstanding Sections 4.2 and 4.3 hereof, Tenant or any
-----------------------
subtenant shall have a reasonable time thereafter, not to
exceed thirty (30)
days, to remove any property which it shall be
entitled to remove pursuant to
Section 4.2 hereof.
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SECTION4.4 The provisions of this Article 4 shall
survive any termination of
----------
---------
this Lease.
ARTICLE 5
INSURANCE
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SECTION5.1
A.
Tenant, at
its sole cost and
expense, shall maintain
----------
during the Term:
(a) property
insurance insuring the Building and
Improvements against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, special
extended peril (all risk), boiler, flood,
earthquake, glass breakage and sprinkler leakage, and building ordinance
coverage, with a deductible not in excess
of $10,000 and in an amount sufficient
to prevent the Landlord or the Tenant from becoming
co-insurers, but in any
event in an amount not less than the full insurable value thereof,
naming
Landlord as an additional insured and naming each Fee Mortgagee, as their
respective interests may appear. Such insurance will provide, to the
extent
permissible under applicable laws, that no act or omission of Tenant
shall
affect or limit the obligation of the
insurance company to pay the amount of the
loss sustained. The term "full insurable value" shall be deemed
to mean the
actual replacement value less physical
depreciation, with such extended coverage
as shall from time to time be customary for
premises similarly situated in Bucks
County, Pennsylvania;
(b) commercial
general liability insurance including
contractual liability
coverage and coverage for bodily injury, property damage and
personal injury
occurring upon, in or about the Demised
Premises and the adjoining sidewalks and
passageways under which Tenant is named as
the insured and Landlord and each Fee
Mortgagee whose name has been provided by Landlord to Tenant are named
as
additional insureds, as their interests may appear. The minimum limits of
liability shall be a combined single limit with
respect to each occurrence of
$1,000,000 with a $2,000,000 annual aggregate and a $2,000,000 umbrella;
B. Landlord,
at its sole cost and expense, shall
maintain during the
term:
(a) property
insurance insuring Landlord's Alterations,
equipment and
personal property located in the Landlord's Storage Area
against all perils,
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended peril (all risk), boiler, flood,
earthquake, glass breakage and sprinkler leakage, with a deductible not in
excess of $70,000 and in an amount
sufficient to prevent Landlord or the Tenant
from becoming co-insurers, but in any
event in an amount not less than the full
insurable value thereof.
(b) commercial
general liability insurance including
contractual liability
coverage and coverage for bodily injury, property damage and
personal injury
occurring upon, in or about the Demised
Premises and the adjoining sidewalks and
passageways under which Landlord is named
as the insured and Tenant and each Fee
Mortgagee whose name has been provided by Tenant to Landlord are named
as
additional insureds, as their interests may appear. The minimum limits of
liability shall be a combined single limit with
respect to each occurrence of
$1,000,000 with a $2,000,000 annual aggregate and a $2,000,000 umbrella;
SECTION5.2
A.
All
insurance provided for
in this Article 5 shall be
----------
---------
effected under valid and enforceable
policies, issued by insurers licensed to do
business in the Commonwealth of
Pennsylvania and having a general policy holder
rating of "A" or better and a financial rating of at least
vii A+ in Best's
------
Insurance Guide or any successor thereto (or if Best's
Insurance Guide shall
------------
----------------------
cease to exist, any equivalent standard generally
accepted in the real estate
community). All policies of insurance (or in lieu thereof certificates of
insurance [form Accord 27 or Accord 25, as
appropriate] unless any Fee Mortgage
requires that policies be delivered to it)
which evidence Tenant's insurance and
evidence of the payment of all premiums of such
policies will be delivered to
Landlord prior to Tenant's occupancy of the Demised
Premises and from time to
time at Landlord's request made not more often than once per Lease Year.
Evidence of each renewal or replacement of a policy (and certificates of
insurance shall be deemed sufficient evidence thereof) shall
be delivered by
Tenant to Landlord at least thirty (30) days prior to
the expiration of each
such policy. All certificates obtained by Tenant
will provide that should the
policies be canceled prior to the respective expiration dates
thereof, the
issuing insurer will endeavor to mail thirty (30) day's
written notice to the
certificate holder. All commercial general liability and property
insurance
policies maintained by Tenant will be written as primary policies, not
contributing with and supplemental to the coverage that Landlord or any
Fee
Mortgagee may carry.
B. Nothing
in this Article 5 shall prevent Tenant from taking out
----------
insurance of the kind and in the amounts
provided for under this Article under a
blanket insurance policy or policies covering other
properties as well as the
Demised Premises, provided, however, that
any such policy or policies of blanket
insurance (i) shall specify therein the
amounts of the total insurance allocated
to the Demised Premises, which amounts shall not be less than the amounts
required by Section 5.1 hereof, and (ii) such amounts
shall be sufficient to
------------
prevent Landlord or any Fee Mortgagee from becoming a
co-insurer within the
terms of the applicable policy or policies.
C. The insurance policies required under this Lease to be furnished by
Tenant to Landlord may, at the election
of Tenant, be furnished and/or paid for
by any subtenant or other person having an insurable
interest in the Demised
Premises, and Landlord shall accept such insurance as though it had been
furnished by Tenant.
SECTION5.3
Except
with respect to the insurance required by Section
----------
-------
5.1(b) hereof, neither Landlord nor Tenant shall take out separate
insurance
--
concurrent in form or contributing in the event of loss with the
insurance
required by this Article unless the other party is included therein as
an
additional insured, with loss payable as provided in this Lease.
Each party
shall immediately notify the other of the
placing of any such separate insurance
and shall cause the same to be delivered as required by
Section 5.2 hereof.
-----------
SECTION5.4
Upon the
expiration of this Lease, the unearned premiums upon
----------
any such transferable insurance policies shall be
apportioned if (a) Landlord
requests an assignment of such insurance policies and such policies are
transferred to Landlord, and (b) no Event of
Default under this Lease shall be
then continuing.
SECTION5.5 So long as both Landlord's and Tenant's policies
then in force
----------
include mutual waivers of subrogation, Landlord and Tenant, to the fullest
---
extent permitted by law, each waive all
right of recovery against the other and
---
agree to release the other from liability
for loss or damage, to the extent such
loss or damage is covered by valid and
collectible insurance in effect at the
time of such loss or damage. Landlord and Tenant shall use
their best efforts
to obtain waiver of subrogation clauses in
all policies of insurance required by
this Lease.
ARTICLE 6
RIGHT TO PERFORM OTHER PARTIES' COVENANTS
-----------------------------------------
SECTION6.1
If
Tenant shall at any time fail to pay any
Imposition in
----------
accordance with the provisions of Article 3 hereof, or to take
out, pay for,
---------
maintain or deliver any of the insurance policies or
certificates therefor as
provided for in Article 5 hereof, or shall fail to make
any other payment or
----------
perform any other act on Tenant's part to be performed as in this Lease
provided, then Landlord, after thirty (30) days' notice to Tenant (or
such
lesser notice as may be required under any
other Section of this Lease, provided
that no such notice shall be required
in the event of an emergency) and without
waiving or releasing Tenant from any obligation of Tenant contained
in this
Lease or from any default by Tenant, and without
waiving Landlord's right to
take such action as may be permissible under this Lease as
a result of such
default, may (but shall be under no obligation to):
(a) pay any Imposition, including any interest and penalties due
thereon, payable by Tenant pursuant to the provisions
of Article 3 hereof, or
---------
(b) take
out, pay for and maintain any of the
insurance policies provided
for in Article 5 hereof, or
----------
(c) make
any other payment or perform any other
act on Tenant's part to be
made or performed as in this Lease provided, and may enter
upon the Demised
Premises for any such purpose, and take all such action thereon, as
may be
necessary therefor.
SECTION6.2
All
reasonable
sums so paid by Landlord and all
reasonable
----------
costs and expenses incurred by Landlord,
including reasonable attorneys' fees,
in connection with the performance of any such act in this Article 6
shall
---------
constitute Additional Rent payable by Tenant
under this Lease and shall be paid
by Tenant to Landlord within thirty
(30) days of Landlord's notice to Tenant of
payment accompanied by reasonably itemized receipts for all such payments.
SECTION6.3
Tenant
shall have the right to make such repairs
which are
----------
required to be made by Landlord under the terms of this Lease on
behalf of
Landlord, and to be reimbursed by Landlord for
the reasonable cost thereof, if
Landlord fails to make such repairs pursuant to subsection (a) below.
A. Landlord
agrees to make repairs
as required under the terms of this
Lease and as follows:
(i) If Landlord fails to undertake and commence the
repairs required
under this Lease, Tenant shall immediately notify Landlord
in writing of the
required and outstanding repairs.
(ii) Landlord
shall undertake and commence the
required repairs within ten
(10) days after receipt of written notice from Tenant and shall make all
diligent efforts to complete such repairs in a timely manner.
(iii) Anything
in this Lease to the contrary notwithstanding,
Landlord
agrees that in the event of an emergency which:
(a) poses
the threat of imminent, severe damage to Tenant,
Tenant's
employees, Tenant's business or Tenant's property; and
(b) necessitates
prompt maintenance, repair, or
replacement of items which
are otherwise required by this Lease
to be maintained, repaired, or replaced by
Landlord,
then
Tenant may at its option proceed forthwith to make repairs.
B. If Landlord
fails to reimburse Tenant for such repair costs incurred
by Tenant within ten (10) days after
written request from Tenant therefor (which
request must be supported by paid
receipts), Tenant may deduct the cost thereof
from the Rent otherwise payable hereunder.
ARTICLE 7
REPAIRS, MAINTENANCE AND CONDITION OF THE DEMISED PREMISES
----------------------------------------------------------
SECTION7.1
Throughout
the Term of this Lease, except to the
extent of
----------
Landlord's obligations hereunder, Tenant, at its sole cost and
expense, shall
take good care of the Demised Premises and
shall keep the same in good order and
condition, except for reasonable wear and
tear. Tenant shall not
be responsible
for structural repairs to the Demised Premises
(including, without limitation,
the roof, walls and foundation) or for replacements of the HVAC,
plumbing,
mechanical, electrical and other building system.
SECTION7.2
Tenant
shall put, keep and maintain all portions of the
----------
Demised Premises and the sidewalks, curbs,
alleyways and passageways adjoining
the same in a clean and orderly
condition, free of dirt, rubbish, snow, ice and
unlawful obstructions.
SECTION7.3
Landlord shall not be required to furnish to Tenant any
----------
facilities or services of any kind whatsoever
during the Term, such as, but not
limited to, water, sewer, steam, heat, gas, hot
water, electricity, light and
power, and Tenant shall, at its sole cost
and expense, pay or cause to be paid,
prior to the imposition of any penalty or
late charge, all charges for gas, oil,
fuel, steam, sewer, electricity, telephone,
heat, air conditioning, ventilation,
refuse pickup, janitorial and maintenance service, security and all other
utilities, materials, supplies and services consumed, furnished,
used or made
available in, at or upon the Demised Premises during
the Term of this Lease,
together with all taxes thereon, if any.
Tenant shall keep and maintain in good
repair all utility meters measuring utilities and services consumed at the
Demised Premises. Tenant shall establish accounts in Tenant's name with
the
utility companies responsible for supplying utilities to the
Demised Premises
and Tenant shall be responsible for all deposits required by the utility
companies to establish such accounts,
provided that Tenant shall be entitled to
receive such deposits back at the end of the Term.
SECTION
7.4 Landlord, at is sole cost and expense, agrees to
keep in
good order, repair and condition and to: (i) make all necessary repairs
and
replacements to all structural components of the
Demised Premises, including,
without limitation, the walls, roof and foundation;
(ii) replace all necessary
components of the HVAC, plumbing, mechanical, electrical and other
building
systems; (iii) make all repairs and replacements to any part of
the Demised
Premises necessitated by Landlord's negligence or willful
misconduct; (iv) to
the extent not the obligation of the utility company,
repair and replace, as
necessary, all utility lines, pipes, ducts,
conduits and the like in the Demised
Premises or which serve the Demised
Premises and (v) make all necessary repairs,
replacements and alterations to comply with all Legal Requirements (as
hereinafter defined) pursuant to the requirements of Article 8 herein.
ARTICLE 8
COMPLIANCE WITH LAWS
--------------------
SECTION8.1
Throughout
the Term, Tenant, at its sole cost and
expense,
----------
shall promptly comply with all present and future laws,
ordinances, orders,
rules, regulations and requirements of all federal, state and municipal
governments, departments, commissions, boards and officers, and all orders,
rules and regulations of the National Board
of Fire Underwriters, or any other
body or bodies exercising similar functions
("LEGAL REQUIREMENTS"), which may be
------------------
applicable to the Demised Premises,
occurring after the Commencement Date herein
and due solely to Tenant's particular use of the Demised Premises and
the
sidewalks, alleyways, passageways, curbs and vaults adjoining the same.
SECTION8.2
Tenant
shall observe and
comply with the requirements of all
----------
policies of insurance required to be supplied
by Tenant at any time during the
Term with respect to the Demised Premises, whether or
not such observance or
compliance is required by reason of any condition, event or circumstance
existing prior to or after the commencement of the term of this
Lease, and
Tenant shall, in the event of any violation or any
attempted violation of the
provisions of this Section by any
subtenant, take steps, promptly upon knowledge
of such violation or attempted violation,
to remedy or prevent the same as the
case may be.
SECTION8.3
Tenant
shall have the right, after prior written
notice to
----------
Landlord, to contest by appropriate legal proceedings
diligently conducted in
good faith, in the name of Tenant or Landlord
or both, without cost or expense
to Landlord, the validity or application of
any Legal Requirement, provided that
(i) Tenant is diligently and in good faith
contesting the same by appropriate
legal proceedings which shall operate to
prevent the enforcement of the same or
the sale of the Demised Premises or any
part thereof to satisfy the same, (ii)
Landlord would not be, by reason of such
post-ponement or deferment, subject to
any actual or threatened criminal
sanctions or penalties or personal liability,
as Landlord shall determine in its reasonable judgment, and (iii) no Fee
Mortgage would by reason of such postpone-ment or deferment be, in the
reasonable judgment of Landlord, in danger of being put in default or
foreclosure, and provided further that if, in the reasonable opinion of
Landlord, the Demised Premises or any part
thereof or interest therein may be in
danger of being sold, forfeited,
foreclosed, terminated, cancelled or lost as a
result of such contest, Tenant shall
promptly upon request of Landlord pay same.
SECTION8.4
Landlord
represents
and warrants to Tenant
that it has full
----------
right and authority to enter into this Lease and it has a current, valid
certificate of occupancy for the Demised Premises permitting
Tenant's use as
contemplated herein. Landlord represents that the Demised Premises is in
compliance with all Legal Requirements. Except to the extent of Tenant's
obligations pursuant to Section 8.1 herein,
Landlord shall, at its sole cost and
-----------
expense, promptly comply with all present and future Legal Requirements.
SECTION8.5 Tenant covenants not to discharge from the Demised
Premises or
----------
suffer the discharge of, nor to store upon the Demised
Premises or suffer the
---
storage of, any Hazardous Materials (as hereinafter defined) in amounts
in
--
excess of those permitted or recommended by any governmental or
--
quasi-governmental authority having jurisdiction thereof. In addition to and
--
not in limitation of the foregoing, Tenant covenants that (a) the Demised
--
Premises shall be kept free of all
Hazardous Materials, whether placed, stored,
--
used, generated or disposed of in, on, under, within, or about the
Demised
Premises, in excess of amounts permitted by appropriate governmental
authorities, and (b) all Hazardous Materials shall be handled in the
manner
required by any governmental. The Demised Premises shall not be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce, process, or in any manner to deal
with, Hazardous Materials
in excess of amounts permitted, or in a manner other than required,
by any
governmental authority. The Tenant shall comply with, and
ensure compliance by
all Tenant's agents, servants, employees and invitees with, all applicable
Hazardous Materials Laws and shall keep the Demised
Premises free and clear of
any violations and liens imposed
pursuant to such Hazardous Materials Laws. In
the event Tenant receives any written notice from any governmental or
quasi-governmental agency, or from any other person or entity with
regard to
health, safety, environment or Hazardous
Materials on, under, from or affecting
the Demised Premises, then Tenant
shall immediately notify the Landlord. Tenant
shall conduct and complete all investigations,
studies, sampling, and testing
and all remedial, removal, and other actions necessary to clean, remove
or
encapsulate all Hazardous Materials on, under, from or affecting the
Demised
Premises in accordance with all applicable Hazardous Materials
Laws, to the
extent that such Hazardous Materials are present at
the Demised Premises as a
result of the actions or omissions of Tenant.
Tenant shall
immediately, upon
request of Landlord, provide unhampered access to all
portions of the Demised
Premises to all governmental and quasi-governmental authorities
charged with
inspecting the Demised Premises or charged with enforcing or
concerned with
Hazardous Materials Laws. Tenant shall protect, indemnify
and save harmless the
Landlord from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs, and expenses (including reasonable
attorney's fees and expenses, investigation and
laboratory fees, court costs,
and litigation expenses) ("Claims") imposed upon or incurred by or
asserted
against the Landlord by reason of (1) the
presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release
("Release") by Tenant of any Hazardous
Material on, under, from or affecting the
Demised Premises; (2) any personal injury
(including wrongful death) or property
damage (real or personal) arising out of or related to the Release of
such
Hazardous Materials by Tenant; (3) any lawsuit brought or threatened or
settlement reached in connection with the foregoing, provided,
however, that
Tenant will be given the opportunity, if available with
no adverse effect to
Landlord, to contest any such settlement or
governmental order relating to such
Hazardous Materials; or (4) any violation by
Tenant of Hazardous Materials Laws
which are based upon or in any way are related to such
Hazardous Materials.
Landlord shall protect, indemnify and save
harmless Tenant from and against all
Claims incurred by or asserted against Tenant by
reason of (1) the Release of
any Hazardous Material on, under, from or
affecting the Demised Premises prior
to the Commencement Date; (2) any
personal injury (including wrongful death) or
property damage (real or personal) arising out of
or related to the Release of
such Hazardous Materials prior to the
Commencement Date; (3) any lawsuit brought
or threatened or settlement reached
in connection with the foregoing, provided,
however, that Landlord will be given the opportunity, if available with
no
adverse effect to Tenant, to contest any such
settlement or governmental order
relating to such Hazardous Materials; or (4) any violation of Hazardous
Materials Laws by Landlord which are based upon or in any way
are related to
such Hazardous Materials. This Section 8.5 shall survive the termination
or
------------
expiration of this Lease. As used herein, the term
"HAZARDOUS MATERIALS" shall
-------------------
include, but is not limited to, any flammable
explosives, gasoline, petroleum
products, polychlorinated biphenyl, radioactive materials, hazardous wastes,
hazardous or toxic substances, or related or
similar materials, asbestos or any
material containing asbestos, or any other substance
or material as defined by
any federal, sta
