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Lease Agreement

LEASE | Document Parties: REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION | TOLLGRADE COMMUNICATIONS, INC. You are currently viewing:
This Lease Agreement involves

REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION | TOLLGRADE COMMUNICATIONS, INC.

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Title: LEASE
Governing Law: Pennsylvania     Date: 9/7/2005
Industry: Communications Equipment     Sector: Technology

LEASE, Parties: regional industrial development corporation , tollgrade communications  inc.
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LEASE

between

LANDLORD:

REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION
OF SOUTHWESTERN PENNSYLVANIA

and

TENANT:

TOLLGRADE COMMUNICATIONS, INC.

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

1. Definitions

 

 

1

 

 

 

 

 

 

2. Premises

 

 

3

 

2.1 Description

 

 

3

 

2.2 Demise

 

 

3

 

 

 

 

 

 

3. Term

 

 

3

 

3.1 Initial Term

 

 

3

 

3.1.1 Commencement/Termination

 

 

3

 

3.2 Renewal Term(s)

 

 

3

 

3.2.1 Renewal Option

 

 

3

 

3.2.2 Exercise

 

 

4

 

3.2.3 Terms

 

 

4

 

3.3 Holdover

 

 

4

 

 

 

 

 

 

4. Base Rent

 

 

4

 

4.1 Amount

 

 

4

 

4.1.1 Initial Term Base Rent

 

 

4

 

4.1.2 Renewal Term Base Rent

 

 

4

 

4.2 Place and Method of Payment

 

 

5

 

4.3 Late Charge

 

 

5

 

 

 

 

 

 

5. Additional Rent

 

 

5

 

5.1 Payment

 

 

5

 

 

 

 

 

 

6. Taxes, Utilities and Operation and Maintenance Costs

 

 

6

 

6.1 Taxes

 

 

6

 

6.1.1 Change in Method of Taxation

 

 

6

 

6.1.2 Tax Assessment Appeal Rights

 

 

6

 

6.1.3 Prorated Taxes

 

 

7

 

6.2 Utilities

 

 

7

 

6.3 Maintenance and Operations

 

 

7

 

 

 

 

 

 

7. Use and Occupancy

 

 

7

 

7.1 Use

 

 

7

 

7.2 Equipment and Personal Property

 

 

8

 

 

 

 

 

 

8. Compliance with Laws and Other Obligations

 

 

8

 

8.1 Compliance with Laws

 

 

8

 

8.2 Rules and Regulations

 

 

8

 

 

 

 

 

 

9. Indemnification

 

 

8

 

9.1 Tenant Indemnification

 

 

8

 

i


 

 

 

 

 

 

 

 

Page

9.2 Landlord Indemnification

 

 

9

 

 

 

 

 

 

10. Insurance

 

 

9

 

10.1 Tenant’s Insurance

 

 

9

 

10.1.1 Coverages

 

 

9

 

10.1.1.1 Liability Insurance

 

 

9

 

10.1.1.2 All Risk Insurance

 

 

9

 

10.1.1.3 Workers’ Compensation

 

 

10

 

10.1.1.4 Builder’s Risk

 

 

10

 

10.1.1.5 Terrorist Acts

 

 

10

 

10.2 Requirements

 

 

10

 

10.3 Waiver of Subrogation

 

 

10

 

10.4 Landlord’s Fire and Casualty Insurance

 

 

10

 

 

 

 

 

 

11. Utilities and Building Services

 

 

10

 

11.1 Services and Utilities

 

 

10

 

11.2 Snow Removal

 

 

10

 

11.3 Landscaping

 

 

11

 

 

 

 

 

 

12. Maintenance and Repairs

 

 

11

 

12.1 Landlord’s Obligations

 

 

11

 

12.2 Tenant’s Obligations

 

 

11

 

12.3 No Liability

 

 

12

 

12.4 Mold

 

 

12

 

 

 

 

 

 

13. Improvements

 

 

12

 

13.1 Tenant’s Improvements

 

 

12

 

13.2 Damage to Systems

 

 

13

 

13.3 Mechanics Liens

 

 

13

 

 

 

 

 

 

14. Assignment and Subletting

 

 

14

 

14.1 Consent Required

 

 

14

 

 

 

 

 

 

15. Rights of Landlord

 

 

14

 

15.1 Access

 

 

14

 

15.2 Changes

 

 

15

 

 

 

 

 

 

16. Surrender

 

 

15

 

 

 

 

 

 

17. Damage to or Destruction of Leased Premises

 

 

16

 

17.1 Landlord’s Duty to Repair and Restore

 

 

16

 

17.2 Repairs

 

 

16

 

17.3 Landlord’s Right to Terminate

 

 

16

 

17.4 Notice of Termination

 

 

17

 

ii


 

 

 

 

 

 

 

 

Page

18. Default; Remedies of Landlord

 

 

17

 

18.1 Tenant’s Defaults

 

 

17

 

18.2 Landlord Remedies

 

 

17

 

18.3 Remedies Cumulative

 

 

18

 

18.4 Additional Costs

 

 

18

 

18.5 Landlord’s Defaults

 

 

18

 

 

 

 

 

 

19. Eminent Domain

 

 

18

 

19.1 Total or Partial Taking

 

 

18

 

19.2 Award

 

 

19

 

 

 

 

 

 

20. Subordination of Lease/Attornment

 

 

19

 

20.1 Subordination

 

 

19

 

20.2 Attornment

 

 

19

 

 

 

 

 

 

21. Estoppel Certificate/Reporting Requirements

 

 

20

 

21.1 Estoppel Certificate

 

 

20

 

 

 

 

 

 

22. Environmental Matters

 

 

20

 

22.1 Definitions

 

 

20

 

22.2 Tenant’s Obligations

 

 

20

 

 

 

 

 

 

23. Miscellaneous

 

 

22

 

23.1 Force Majeure

 

 

22

 

23.2 Quiet Enjoyment

 

 

22

 

23.3 Non-Waiver by Landlord

 

 

22

 

23.4 No Acceptance of Surrender

 

 

22

 

23.5 No Waiver of Payment

 

 

22

 

23.6 Brokers

 

 

22

 

23.8 Governing Law

 

 

23

 

23.9 Severability

 

 

23

 

23.10 Interpretation

 

 

23

 

23.11 Entire Agreement

 

 

23

 

23.12 Notices

 

 

23

 

23.13 Successors and Assigns

 

 

24

 

23.14 Captions

 

 

24

 

23.15 Lease Not an Offer

 

 

24

 

23.16 Counterparts

 

 

24

 

iii


 

EXHIBITS

A — Legal Description of Leased Premises
B — Drawing of Leased Premises
C — Capital Items
D — Rules and Regulations
E — Tenant Lease Estoppel Certificate

iv


 

EXHIBIT 10.1

LEASE

     THIS LEASE (this “Lease”) is made and entered into this 31 st day of August, 2005 (the “Execution Date”), by and between REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTHWESTERN PENNSYLVANIA, a Pennsylvania nonprofit corporation (“Landlord”), and TOLLGRADE COMMUNICATIONS, INC., a Pennsylvania corporation (“Tenant”), but shall be deemed to be effective as of January 1, 2005.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated August 5, 1993, as amended (the “Original Lease”), pursuant to which Tenant occupies the entirety of that certain building known as Harmar Industrial Manor located as 493 Nixon Road, Cheswick, PA 15024 (the “Building”); and

     WHEREAS, in order to reflect numerous desired changes to the Original Lease, Landlord and Tenant desire that this Lease supersede and replace the Original Lease in its entirety.

     NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound hereby, Landlord and Tenant covenant and agree as follows:

1. DEFINITIONS

As used in this Lease, the following terms shall have the meanings set forth below or in the Section of this Lease referred to, unless the context otherwise requires:

Additional Rent : As defined in Section 5.1.

Base Rent : As defined in Section 4.1.1.

Building : As defined in the Recitals hereto.

Capital Items : As defined in Section 2.2.

Casualty : As defined in Section 17.1.

CERCLA : As defined in Section 22.1.1.

Commencement Date : As defined in Section 3.1.1.

Environmental Laws : As defined in Section 22.1.1.

Event of Default : As defined in Section 18.1.

 


 

Final Walk-Through : As defined in Section 16.

Hazardous Substances : As defined in Section 22.1.2.

HSCA : As defined in Section 22.1.1.

Initial Term : As defined in Section 3.1.1.

Initial Term Base Rent : As defined in Section 4.1.1.

Initial Walk-Through : As defined in Section 16.

Land : As defined in Section 2.1.

Late Rate : As defined in Section 4.3.

Laws : As defined in Section 8.1.

Leased Premises : As defined in Section 2.1.

Mold Conditions : As defined in Section 12.4.1.

Obligation : As defined in Section 23.3.

Operation and Maintenance Costs : As defined in Section 6.3.

Original Lease : As defined in the Recitals hereto.

Prepaid Taxes : As defined in Section 6.1.3.

Punch List Items : As defined in Section 16.

RCRA : As defined in Section 22.1.1.

Renewal Notice : As defined in Section 3.2.2.

Renewal Term : As defined in Section 3.2.1.

Renewal Term Base Rent : As defined in Section 4.1.2.

Rent : As defined in Section 5.1.

Rentable Square Feet : As defined in Section 2.1.

Rules and Regulations : As defined in Section 8.2.

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Taxes : As defined in Section 6.1.1.

Tenant’s Improvements : As defined in Section 13.1.

Term : As defined in Section 3.1.1.

Termination Date : As defined in Section 3.1.

Utility Costs : As defined in Section 6.2.

2. PREMISES

2.1 Description . The leased premises shall consist of the Building together with all appurtenances thereto including, without limitation, the land upon which the Building is situated (the “Land” and together with the Building, the “Leased Premises”). The Building contains One Hundred Eleven Thousand Six Hundred (111,600) square feet of space (“Rentable Square Feet”). The legal description of the Land is attached hereto and incorporated herein as Exhibit A. A drawing depicting the Leased Premises is attached hereto and incorporated herein as Exhibit B.

2.2 Demise . For and in consideration of payment of Rent and performance of other obligations hereunder and intending to be legally bound, Landlord does hereby lease and demise unto Tenant, and Tenant does hereby lease and take from Landlord, the Leased Premises. No personal property or equipment of Landlord shall be part of the Leased Premises. Except for Landlord’s obligations as set forth in Section 12.1, the items described on Exhibit C attached hereto and incorporated herein and any latent defects related thereto (“Capital Items”) and any latent defects otherwise related to the Leased Premises, and to the extent the Leased Premises are in compliance with applicable Laws, Tenant hereby accepts the Leased Premises in its “AS IS, WHERE IS” condition “WITH ALL FAULTS”.

3. TERM

3.1 Initial Term .

3.1.1 Commencement/Termination . The initial term of this Lease (the “Initial Term”) shall be deemed to have commenced as of 12:01 A.M. on January 1, 2005 (the “Commencement Date”) and shall expire as of 11:59 P.M. on June 30, 2007 (the “Termination Date”), unless the Initial Term is extended as provided in Section 3.2.1 hereof. The Initial Term and the Renewal Term (as defined herein) are sometimes hereinafter collectively referred to as the “Term.”

3.2 Renewal Term .

3.2.1 Renewal Option . Tenant shall have the option to renew this Lease for two (2) years following expiration of the Initial Term (the “Renewal Term”), provided: (i) that this Lease is in full force and effect immediately prior to the date of the commencement of the Renewal Term; and (ii) that there is no then-existing Event of Default under any of the provisions herein.

3


 

3.2.2 Exercise . Such renewal option shall be exercised by Tenant serving on Landlord written notice to that effect not later than six (6) months prior to the expiration of the Initial Term (the “Renewal Notice”). The Renewal Notice given by Tenant shall be irrevocable and shall constitute an agreement between the parties for a renewal of this Lease. If Tenant fails to exercise its renewal option on or before such time period, Tenant waives its renewal option. Subject to Section 3.3 below, if this Lease or the right of occupancy of Tenant hereunder shall have expired or come to an end pursuant to any of the provisions of this Lease, all rights of Tenant to renew shall be deemed terminated automatically.

3.2.3 Terms . Said renewal shall be upon the same terms, covenants, conditions and limitations as provided in this Lease, except that the Renewal Term Base Rent shall be the amount set forth in Section 4.1.2.

3.3. Holdover . If Tenant occupies the Leased Premises after the expiration of (a) the Initial Term, absent an exercise of its renewal rights hereunder, or (b) the Renewal Term, as the case may be, this Lease and all of its terms, provisions, conditions, covenants, waivers, remedies and any and all of Landlord’s rights herein specifically given and agreed to, shall be in force for one month thereafter and thereafter from month to month.

4. RENT

4.1 Amount .

4.1.1 Initial Term Base Rent . Tenant shall pay Base Rent to Landlord during the Initial Term beginning on the Commencement Date and on the first business day of each successive calendar month, in advance and without demand. The Base Rent for the Initial Term (“Initial Term Base Rent”) shall be Four Hundred Eighteen Thousand Five Hundred Dollars and No Cents ($418,500.00) per year, payable in equal monthly installments of Thirty-Four Thousand Eight Hundred Seventy-Five Dollars and No Cents ($34,875.00). Landlord acknowledges that for the period January 1, 2005 to September 30, 2005 (the “Stub Period”), it has received Base Rent payments from Tenant in an amount equal to Four Hundred Ninety Seven Thousand One Hundred Seventy-Eight Dollars and No Cents ($497,178.00) which represents an overpayment of Base Rent of One Hundred Eighty-Three Thousand Three Hundred Three Dollars and No Cents ($183,303.00) during the Stub Period. Tenant shall be credited such amount less the amount of Prepaid Taxes (as defined in Section 6.1.3), Insurance Costs (as defined in Section 10.1.1.2) and Operation and Maintenance Costs (as defined in Section 6.3) incurred by Landlord as set forth herein. Such credit amounts to Seventy-Nine Thousand Eighty-Four Dollars and Ninety-Eight Cents ($79,084.98) which will be applied to the Base Rent for the months of October, November and December of 2005. Accordingly, the next Base Rent payment due to Landlord shall be Twenty-Five Thousand Five Hundred Forty Dollars and Two Cents ($25,540.02) which shall be due and payable on December 1, 2005.

4.1.2 Renewal Term Base Rent . Tenant shall pay Base Rent to Landlord on the first day of each month during the Renewal Term, in advance and without demand. The Base Rent for the Renewal Term (“Renewal Term Base Rent”) shall be an amount equal to Four Hundred Twenty-Six Thousand Eight Hundred Seventy Dollars and No Cents ($426,870.00) per each twelve (12)

4


 

month period of the Renewal Term, payable in equal monthly installments of Thirty-Five Thousand Five Hundred Seventy-Two Dollars and Fifty Cents ($35,572.50).

4.2 Place and Method of Payment . Tenant agrees to pay Base Rent (whether for the Initial Term or for the Renewal Term), in monthly installments, on or before the first business day of each month throughout the Term. Base Rent must be received by Landlord, on the first business day of each month by either (a) wire transfer to Landlord’s account at Dollar Bank, account # 266-587-7127, Dollar Bank, ABA # 243-074-385, or (b) by check made payable to Landlord, which shall be delivered or mailed, postage prepaid, to Regional Industrial Development Corporation of Southwestern Pennsylvania, Post Office Box 3830, Pittsburgh, PA 15230-3830, or to such other account or address as Landlord may specify from time to time.

4.3 Late Charge . If any installment of Rent, or any other sum due from Tenant shall not be received by Landlord within ten (10) days after the due date, then Tenant shall pay Landlord a late charge for each month or partial month that such amount is overdue equal to the overdue amount of any Rent or other sum that is due and payable to Landlord multiplied by FIVE PERCENT (5%) (the “Late Rate”). Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder.

5. ADDITIONAL RENT

5.1 Payment . In addition to Base Rent, Tenant shall pay all Taxes, Utility Costs, insurance costs and Operation and Maintenance Costs related to the Leased Premises (collectively, the “Additional Rent”). To the extent that Tenant is required to pay any items of Additional Rent directly to Landlord, following receipt of appropriate documentation of such items from Landlord, Additional Rent shall be payable by Tenant in the same manner as Base Rent pursuant to Subsection 4.2 above without demand. Tenant’s failure to pay any such Additional Rent shall entitle Landlord to the same remedies available for non-payment of Base Rent. Base Rent and Additional Rent are herein collectively referred to as “Rent”. Additional Rent shall not include: (a) depreciation, interest, or amortization on any mortgage encumbering the Leased Premises, (b) legal fees incurred in negotiating and enforcing this Lease or any sublease or assignment hereof, (c) expenses incurred in leasing or procuring new lessees including, real estate brokers’ leasing commissions and advertising, (d) costs of any items to the extent Landlord receives reimbursement for same from insurance proceeds or a third party, (e) interest, principal, attorney fees, costs of environmental investigations or reports, points, fees, and other lender costs and closing costs on any mortgage or mortgages or other debt instrument encumbering any portion of the Leased Premises, (f) costs of (i) Landlord’s accounting and legal matters which may, include, without limitation, (A) defending or prosecuting any lawsuit with any mortgagee, lender, broker, tenant, occupant, or prospective tenant or occupant, (B) selling or syndicating any of Landlord’s interest in the Leased Premises, and (C) disputes between Landlord and Landlord’s property manager, if any; (g) wages, salaries, and other compensation paid to any employee or independent contractor of Landlord, including Landlord’s property manager, if any; (h) costs or penalties incurred by Landlord because the Leased Premises violates any valid, applicable building code, regulation, or law in effect and as interpreted by government authorities before the date hereof; and (i) fines, penalties, interest, and the costs of repairs, replacements, alterations, or

5


 

improvements necessary to make all or any portion of the Leased Premises comply with applicable past laws in effect and as interpreted by government authorities before the date hereof, such as sprinkler installation or requirements under the Americans With Disabilities Act of 1990 (42 USC ss. 12101-12213). Tenant shall have the right to audit Landlord’s books and records relating to the calculation of Additional Rent and Landlord shall reimburse Tenant for any overcharge. In the event it is determined as a result of such audit that Landlord overcharged Tenant by more than five percent (5%), Landlord will reimburse Tenant for the cost of such audit.

6. TAXES, UTILITIES AND OPERATION AND MAINTENANCE COSTS

6.1 Taxes . “Taxes” shall mean all taxes pertaining to the Leased Premises, including all federal, state and local governmental ad valorem real estate taxes, assessments and charges of every kind or nature, including, but not limited to, any municipal Business Privilege Tax, Neighborhood Improvement District Tax, and Business Improvement District Tax, which Landlord shall pay or become obligated to pay because of or in connection with the ownership, leasing, management, control or operations of the Leased Premises. For purposes hereof, Taxes for any year shall be Taxes which are assessed for such year. Taxes in any year shall be reduced by the net amount of any tax refund received by Landlord with respect to such year and all payments in such year shall be paid so as to take advantage of any discount. In the event that Landlord receives a tax refund, Landlord shall immediately notify Tenant in writing of such tax refund. Taxes shall not include any federal, state or local use, franchise, capital stock, inheritance, general income, gift or estate taxes except as provided below.

6.1.1 Change in Method of Taxation . If at any time during the Term hereof the methods of taxation prevailing at the commencement of the Term hereof shall be altered so that in lieu of or as a supplement to or a substitute for the whole or any part of the real estate taxes or assessments now levied, assessed, or imposed upon the Leased Premises, there shall be levied, assessed, or imposed any form of assessment, tax, license fee, license tax, business license fee, business license tax, excise tax, commercial rental tax, levy, charge, penalty, or other imposition by the federal or state government, any political subdivision, municipality, school district, or other taxing or assessing body or assessing body, which constitutes (1) a tax, levy, assessment, fee, imposition or other charge upon the Rent payable hereunder, the Landlord’s right to rent or other income from the Building or upon the Landlord’s business of leasing the Leased Premises; or (2) a tax, levy, assessment, fee, imposition or other charge allocable to or measured, in whole or in part, by the area of the Building or the Leased Premises or the Rent payable hereunder; or (3) a tax, levy, assessment, fee, imposition or other charge upon this transaction or any document related thereto, or upon the status of Landlord or Tenant as such; or (4) any tax, levy, assessment, fee, imposition or other charge upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy of the Building or the Leased Premises; then all such taxes, assessments, levies, impositions and charges or the part thereof so measured or based, which are in lieu of or a substitute for the whole or any part of the real estate taxes or assessments now levied, assessed or imposed on the Leased Premises or the Leased Premises shall also be included in the definition of the term “Taxes.”

6


 

6.1.2 Tax Assessment Appeal Rights . In the event that the Leased Premises is reassessed for Tax purposes during the Term, Landlord hereby authorizes Tenant to appeal any tax reassessment for and on its behalf using counsel of Tenant’s choice. If Tenant elects not to appeal a tax reassessment, Landlord shall have the right to do so at its sole cost and expense provided that Landlord periodically provide Tenant with information relating to the appeal. In the event a governmental authority institutes proceedings for the purposes of challenging the current assessment or any reassessment, Landlord shall immediately notify Tenant and shall give Tenant the option of either jointly defending the challenge with Landlord or defending the challenge for and on behalf of Landlord.

6.1.3 Prorated Taxes . Tenant acknowledges and agrees that prior to the Execution Date, Landlord has paid Seventy-Seven Thousand Eight Hundred Eighty-Nine Dollars and Sixteen Cents($77,889.16) for certain Taxes applicable to the years 2005 and 2006 which were not payable or paid by Tenant under the Original Lease (“Prepaid Taxes”). In order to comply with Section 5.1 hereof, Tenant shall reimburse Landlord for the amount of Prepaid Taxes in accordance with Section 4.1.1 above.

6.2 Utilities . “Utility Costs” shall mean the cost of all utilities serving the Leased Premises, including, without limitation, gas, steam, water, sewer, electricity, power, heating, lighting, air-conditioning and ventilation consumed by the Leased Premises and the servicing thereof.

6.3 Maintenance and Operations . The expenses for maintaining and operating the Leased Premises (hereinafter referred to as “Operation and Maintenance Costs”) shall be deemed to mean any and all expenses, costs and disbursements incurred during such operating year in respect of the operation, maintenance, servicing and repair of the Leased Premises except for expenses related to (i) improvements, repair or maintenance to the exterior walls, roof and foundation of the Building (ii) Capital Items (as described in Exhibit C hereto), and (iii) the items stated in the last sentence of Section 5.1 hereof. Landlord shall be solely responsible for the expenses related to items (i), (ii) and (iii). Tenant acknowledges and agrees that prior to the Execution Date, Landlord has paid Eight Thousand Eight Hundred Thirteen Dollars and Eighty-Six Cents ($8,813.16) for certain Operation and Maintenance Costs applicable to the calendar year 2005 which were not payable by Tenant under the Original Lease. In order to comply with Section 5.1 hereof, Tenant shall reimburse Landlord for said amount of Operation and Maintenance Costs in accordance with Section 4.1.1 above.

7. USE AND OCCUPANCY

7.1 Use . Tenant will not engage nor will Tenant permit any person, corporation or other entity to engage upon the Leased Premises in any trade or occupation which is in violation of law. Tenant shall use the Leased Premises for the purpose of conducting its business operations which includes light manufacturing operations and adjunct uses, such as storage and related office activities. Tenant shall not use or occupy the Leased Premises for any other purpose or business without the prior written consent of Landlord which such consent shall not be unreasonably withheld, conditioned or delayed. The Leased Premises shall not be used for retail sales or displays for such purposes, nor shall Tenant install an automated teller machine within the Leased Premises. Product displays will be permitted provided the same cannot be seen from

7


 

the outside of the Leased Premises. Tenant covenants and agrees that no more than the maximum number of occupants allowed by applicable Law shall occupy the Leased Premises at any time.

7.2 Equipment and Personal Property . Tenant may bring such equipment, furniture, trade fixtures or other personal property into the Leased Premises as may be required for its business, including, without limitation, special HVAC units (including Liebert temperature and humidity control system or the equivalent thereof). Title to such personal property shall at all times be vested in Tenant. Such personal property shall not be of an unusual size, type, or weight so as to adversely affect the Leased Premises.

8. COMPLIANCE WITH LAWS AND OTHER OBLIGATIONS

8.1 Compliance with Laws . Tenant will, at Tenant’s expense, observe and comply with all laws, orders, regulations, rules, and requirements of federal, state and local governments or any subdivision, agency or authority thereof, including, but not limited to, the Americans with Disabilities Act (the “Laws”), applicable to the Leased Premises to the extent such Laws pertain to the manner in which Tenant uses the Leased Premises; provided, however, Tenant shall have no obligation to make structural changes to the Leased Premises required as a result of any change in Law enacted or becoming effective prior to or during the Term. Without limiting the foregoing, Tenant agrees that it shall not, nor shall it permit or suffer any subtenant, occupant or other user of the Leased Premises to engage in any activity that could result in any liability, cost or expense under any Environmental Laws (as hereinafter defined) or any other law or regulation. Except for, and to the extent of, Landlord’s gross negligence, willful misconduct or failure to comply with the terms of this Lease, Tenant will indemnify and save harmless Landlord from any liability, damage or expense (including reasonable attorney’s fees and expenses) arising from Tenant’s failure to comply with this Section 8.

8.2 Rules and Regulations . Tenant will observe and comply with the Rules and Regulations for the Building (the “Rules and Regulations”) contained on Exhibit D attached hereto and made a part hereof by reference and as the same may be amended from time to time. The Rules and Regulations standards shall apply to Tenant and its employees, agents, licensees, invitees, permitted subtenants and contractors.

9. INDEMNIFICATION

9.1 Tenant Indemnification . Tenant shall indemnify, hold harmless and defend Landlord from and against any and all costs, expenses (including reasonable attorney’s fees and court costs), liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any kind asserted by or on behalf of any person or governmental authority, arising out of or in any way connected with, and Landlord shall not be liable to Tenant on account of, (i) any failure by Tenant to perform any of the agreements, terms, covenants or conditions of this Lease required to be performed by Tenant, (ii) any failure by Tenant to comply with any statutes, ordinances, regulations or orders of any governmental authority relating to the use and occupancy of the Leased Premises, or (iii) any accident, death or personal injury, or damage to, or loss or theft of, property, which shall occur in or about the Leased Premises, except as the same may be caused

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solely by the gross negligence or intentional wrongdoing of Landlord, its employees or agents or failure of Landlord to observe its covenants hereunder.

9.2 Landlord Indemnification . Landlord shall indemnify, hold harmless and defend Tenant from and against any and all costs, expenses (including reasonable attorney’s fees and court costs), liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any kind asserted by or on behalf of any person or governmental authority, arising out of or in any way connected with, and Tenant shall not be liable to Landlord on account of, (i) any failure by Landlord to perform any of the agreements, terms, covenants or conditions of this Lease required to be performed by Landlord, (ii) any failure by Landlord to comply with any statutes, ordinances, regulations or orders of any governmental authority relating to the use and occupancy of the Leased Premises, or (iii) any accident, death or personal injury, or damage to, or loss or theft of, property, which shall occur in or about the Leased Premises, except as the same may be caused solely by the gross negligence or intentional wrongdoing of Tenant, its employees or agents or failure of Tenant to observe its covenants hereunder.

10. INSURANCE

10.1 Tenant’s Insurance .

10.1.1 Coverages . Tenant will, at Tenant’s cost and expense, maintain with insurance companies satisfactory to Landlord during the Term:

10.1.1.1 Liability Insurance . Commercial general public liability insurance on an occurrence basis insuring against claims for bodily injury, death or property damage occurring on, in or about the Leased Premises with minimum combined limits of One Million Dollars ($1,000,000.00) for bodily injury liability and property damage liability. This policy shall be written on a comprehensive basis to provide all major divisions of coverage, including, but not limited to, the following: (1) Leased Premises operations, (2) products and complete operations, (3) personal injury liability, (4) broad form property damage, and (5) fire legal liability.

10.1.1.2 All Risk Insurance . Insurance covering the Leased Premises, all trade fixtures and personal property in or on the Leased Premises, in an amount not less than one hundred percent (100%) of their actual replacement cost, providing protection against all risks of direct physical loss. Notwithstanding the foregoing, the parties acknowledge and agree that prior to the Execution Date, Landlord has solely maintained insurance coverage on the Leased Premises and in connection therewith, Landlord has paid Seventeen Thousand Five Hundred Fifteen Dollars and No Cents ($17,515.00) for said insurance coverage for the period January 1, 2005 to September 1, 2005 which was not payable by Tenant under the Original Lease (“Insurance Costs”). In order to comply with Section 5.1 hereof, Tenant shall reimburse Landlord for said Insurance Costs in accordance with Section 4.1.1 above. Additionally, beginning on September 1, 2005, Tenant shall obtain and maintain the insurance described in this Section 10.1.1.2 at its sole cost and expense.

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10.1.1.3 Workers’ Compensation . Worker’s compensation insurance in the amounts required by law and employer’s liability insurance in the amount of Five Million Dollars ($5,000,000).

10.1.1.4 Builder’s Risk . During any period of construction by Tenant on the Leased Premises, builder’s risk insurance on a completed value, non-reporting basis for the total cost of such alterations and improvements providing protection against all risks of direct physical loss.

10.1.1.5 Terrorist Acts . Coverage for terrorist acts, if such coverage is commercially, reasonably available, with limits and deductibles satisfactory to Landlord. Such coverage will be deemed commercially, reasonably available if a majority of similarly situated (or comparable) Tenants in the county in which the Leased Premises is located maintain such coverage.

10.2 Requirements . Such insurance coverage (other than workers’ compensation) shall name Landlord as loss payee and an additional insured and shall contain a provision that the same may not be cancelled or reduced without providing Landlord at least thirty (30) days’ prior written notice. All policies shall be procured for periods of not less than one (1) year. Tenant shall deposit with Landlord certificates of such insurance (or copies of policies upon Landlord’s request) at or prior to the commencement of this Lease and thereafter not less than ten (10) days prior to the expiration of such policy or policies. In the event that the Tenant fails to comply with any of the foregoing requirements, and after ten (10) business days notice allowing Tenant an opportunity to cure, Landlord shall be entitled, but not obligated, to procure such insurance. Any sums expended by Landlord in procuring such insurance shall be deemed Additional Rent and shall be paid by Tenant immediately upon written demand therefor by Landlord.

10.3 Waiver of Subrogation . Landlord and Tenant each waives any and all rights of recovery that such party, or any party claiming by, through or under such party by subrogation or otherwise, may have against the other party, or against the officers, employees, agents and representatives of the other party, for loss of, or damage to, such waiving party or its property or the property of others under its control, to the extent any such loss or damage is insured against (or should be insured against pursuant to the terms of this Lease) under any insurance policy in force at the time of such loss or damage. Landlord and Tenant shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carriers that the foregoing mutual waiver of subrogation is contained in this Lease and such insurance policies shall contain a provision by which the insurance company specifically waives its right of subrogation with respect to any loss or losses paid thereunder.

11. UTILITIES AND BUILDING SERVICES

11.1 Services and Utilities . Tenant shall promptly pay, as the same become due, all Utilities Costs related to the Leased Premises during the Term, including without limitation, meter, use and/or connection fees, hook-up fees, or standby fees and penalties for discontinued or interrupted service caused by Tenant.

11.2 Snow Removal . Tenant shall be responsible for arranging and paying for snow and ice removal services for the parking lot, roadways, sidewalks and walkways of the Leased Premises.

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11.3 Landscaping . Tenant shall be responsible for arranging and paying for landscaping services at the Leased Premises.

12. MAINTENANCE AND REPAIRS

12.1 Landlord’s Obligations . Landlord shall be responsible to maintain and repair the roof, the exterior walls and the foundation of the Leased Premises and shall also be responsible for the maintenance and repair of Capital Items as provided in Exhibit C. If Landlord refuses or neglects to perform the maintenance and repair obligations for which it has responsibility under this Lease, or fails to diligently prosecute the same to completion, after written notice from Tenant of the need therefore, and after a reasonable time thereafter in which to make the same, Tenant may make such repairs at the expense of Landlord and such expense shall be credited against the next payable installment of Rent.

12.2 Tenant’s Obligations . Except as the Landlord is obligated for repairs as provided in Section 12.1, Tenant shall make, at its sole cost and expense, all repairs and replacements necessary to maintain the Leased Premises and shall keep the Leased Premises and fixtures therein, and the parking lots, roadways, sidewalks and walkways which are part of the Leased Premises in neat, clean, and orderly condition. Tenant’s repair and maintenance obligations shall include, but shall not be limited to, all HVAC, plumbing and sewerage facilities within the Leased Premises, fixtures, interior walls and ceiling, floors, windows (including the repairing, resealing, cleaning and replacing of both interior and exterior windows), interior and exterior doors, entrances, plate glass, showcases, skylights, all electrical facilities and equipment, including lighting fixtures, lamps, fans and any exhaust equipment and systems, electrical motors and all other appliances and equipment of every kind and nature located in, upon or about the Leased Premises. Tenant shall also be responsible for all pest control within the Leased Premises, and for all trash removal and disposal for the Leased Premises. Tenant shall obtain HVAC systems preventive maintenance contracts in accordance with manufacturer recommendations and paid for by Tenant, and which shall provide for and include replacement of filters, oiling and lubricating of machinery, parts replacements, adjustment of drive belts, oil changes and other preventive maintenance, including maintenance of duct work interior unit drains and caulking at sheet metal, and recaulking of jacks and vents on an as-needed basis. Tenant shall have the benefit of all warranties available to Landlord regarding the equipment in such HVAC systems. Tenant shall also be responsible for any repairs needed due to Tenant’s negligence or misuse. If Tenant refuses or neglects to make any such repairs which are its responsibility hereunder, or fails to diligently prosecute the same to completion, after written notice from Landlord of the need therefor, and a reasonable time thereafter in which to make the same, Landlord may make such repairs at the expense of Tenant and such expense shall be collectible as Additional Rent. Notwithstanding the foregoing, the parties acknowledge and agree that certain portions of the parking lots and roadways on the Leased Premises are in need of replacement as of the date of execution hereof. Landlord further acknowledges and agrees that Tenant shall not be obligated to replace all or any portion of the parking lots and roadways or improve the same beyond their current condition, provided that Tenant shall maintain the condition of the same in at least the same condition as they are in as of the date of execution hereof using methods similar to those used by Landlord for the maintenance thereof prior to the date hereof.

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12.3 No Liability . Landlord shall not be liable by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations, additions or improvements in or to the Leased Premises or the Building or to any appurtenances or equipment therein except for injuries or interference with Tenant’s business relating to Landlord’s repairs of the items it is required to repair hereunder, including Capital Items.

12.4 Mold .

Tenant shall not install any Tenant’s Improvements or conduct any


 
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