Confidential Treatment
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LEASE AGREEMENT
THIS
AGREEMENT OF LEASE, ( the "Lease") made as of the last date
endorsed
hereon ("Effective Date"), by and between
NAPPEN & ASSOCIATES, A PENNSYLVANIA
LIMITED PARTNERSHIP, T/A 309 DEVELOPMENT
COMPANY ("Lessor")
A N D
ESW
AMERICA, INC., A DELAWARE CORPORATION, DULY REGISTERED TO DO
BUSINESS
IN THE COMMONWEALTH OF PENNSYLVANIA
("Lessee").
Lessee and
Lessor, in consideration of the mutual covenants herein
contained and other good and valuable
consideration, receipt of which is hereby
acknowledged and intending to be legally
bound hereby, agree as follows:
1. LEASE
AND PREMISES.
A. Lessor hereby demises and leases to Lessee and Lessee hereby
hires from Lessor that certain premises
situate in Montgomery Township,
Montgomery County, Pennsylvania, known and
numbered Lot No. 2, Bethlehem Pike
Industrial Center, together with the
building ("Building"), as shown on layout
plan marked Exhibit "A", containing
approximately 40,220 sq. ft., more or less,
and improvements constructed thereon, such
ground, Building and improvements
being hereinafter called the
"Premises".
B. Lessee acknowledges that it has inspected the Premises and
leases
the same in the condition existing on the
Effective Date. Notwithstanding
anything set forth herein to the contrary,
Lessor, at Lessor's sole cost and
expense, shall, prior to the Lease
Commencement Date, provide the leasehold
improvements shown on Exhibit "B". ("LR
Tenant Improvements")in accordance with
all applicable laws and regulations. Lessor
warrants and agree that HVAC system
of the Building has sufficient capacity to
heat and cool the building as
represented on Exhibit "C" attached to
reasonably established standards.
C. The Premises shall be occupied and used for office, warehouse
and
light manufacturing, in accordance with
applicable laws, ordinances and
regulations. Under no circumstances
whatsoever may the Premises be used in whole
or in part for personal, family,
residential or household purposes.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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2.
TERM.
A. The term of this Lease shall be five (5) years,16 days
commencing
December 15th, 2004 ("Lease Commencement
Date") and expiring at 11:59 p.m. on
December 31st, 2009, unless extended,
renewed or previously terminated, as
hereinafter set forth. For purposes of this
Lease the date of expiration of the
latest term, Renewal Term (as hereinafter
defined) or Extension Term (as
hereinafter defined) of this Lease shall be
termed the "Lease Termination Date".
B. If Lessee remains in possession of the Premises, (including
failure to restore the same to the
condition required hereunder being deemed to
constitute possession of the Premises)
after the Lease Termination Date, (a
"Holding Over"), without the prior written
consent of Lessor, such Holding Over
shall create a Holding Over tenancy from
month to month, commencing on the day
after the Lease Termination Date (the
"Holdover Term"), with respect to the
Premises on all of the same terms and
conditions as are in effect on the last
day of the preceding term, except that the
monthly installment of Minimum Annual
Rent payable during each Holdover Term
shall be increased to an amount equal to
three times the monthly installment of
Minimum Annual Rent in effect on the last
day of the preceding term (the "Holdover
Rent"). Notwithstanding anything set
forth to the contrary, Lessor may cancel
the Holdover Term at any time within
such Holding Over tenancy upon five (5)
days prior notice to Lessee, but such
cancellation notwithstanding, Holdover Rent
shall accrue and shall be payable by
Lessee until such time ("Restoration Date")
as Lessee vacates fully the Premises
and restores the same to the condition
required hereunder.
C. Lessor shall not be liable to Lessee in any respect in the
event
that Lessor is unable to complete the LR
Tenant Improvements by December 15th
2004, provided Lessee shall not be required
to pay any installment of Minimum
Annual Rent (as hereinafter defined) or
Additional Rent (as hereinafter defined)
until such time as Lessor substantially
completes the LR Tenant Improvements
(i.e., the LR Tenant Improvements are
completed to the extent, Lessee can use
the Premises for the purposes set forth in
Sub-Article 1(C)).
D. Lessee is hereby granted a license to occupy the Premises for
the
period commencing November 1, 2004, and
ending December 14th, 2004 at Midnight.
("License Period"). During the License
Period, all of the terms and conditions
of this Lease shall be in full force and
effect with the exception of Paragraph
3, INFRA., so that no Minimum Annual Rent
will be payable during the License
Period, and Paragraph 4, INFRA., so that no
Additional Rent will be payable
during the License Period.
3. MINIMUM
ANNUAL RENT.
The minimum rent for the period commencing December 15th 2004
and
ending December 31st 2004 shall be ***
Dollars to be paid at the time of signing
this Lease. The minimum annual rent
thereafter, ("Minimum Annual Rent") payable
by Lessee to Lessor shall be *** per year,
lawful money of the United States of
America, payable in monthly installments in
advance during the balance of the
term of this Lease in sums of *** on the
first day of each month, commencing
January 1st, 2005.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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4.
ADDITIONAL RENT.
As Additional Rent ("Additional Rent") hereunder, Lessee shall
pay
Lessor the following on or before the date
such additional payment shall become
due, but not later than ten (10) days from
rendition of a bill therefor (unless
otherwise set forth herein):
A. All "Taxes" (as hereinafter defined) assessed or imposed upon
the
Premises during the term of this Lease and
any Extension Term or Renewal Term or
applicable to the Premises during the term
of this Lease, including penalties
thereon, as indicated by bills of taxing
authorities. The amount due hereunder
on account of such Taxes shall be
apportioned for that part of the first and
last calendar years covered by the original
term, Renewal Term or Extension Term
hereof as regards county and township real
estate taxes and for that part of the
first and last July 1st fiscal years
covered by the original term, Renewal Term
or Extension Term hereof regarding school
real estate taxes. On or before the
Lease Commencement Date, Lessee shall pay
Lessor the pro rated portion of the
township and county taxes on the Premises
for the calendar year in which the
Lease Commencement Date occurs and the pro
rated portion of school real estate
taxes on the Premises for the July 1st
fiscal year in which the Lease
Commencement Date occurs. Lessor shall
promptly forward to Lessee all bills
received by Lessor for such Taxes and the
amount of such Taxes shall be paid by
Lessee to Lessor at least one (1) month
before the expiration of the net payment
period for said Taxes and before penalties
are assessed. In the event Lessee
desires to take advantage of any early
payment discount, said tax payment shall
be paid by Lessee to Lessor at least one
(1) month before the expiration of any
discount period. A bill submitted by Lessor
to Lessee shall be conclusive
evidence of the amount of Taxes assessed or
levied as well as the items taxed.
"Taxes" as utilized in this Lease shall mean all taxes,
assessments
and charges of whatsoever nature levied
upon or with respect to the Premises or
Lessor's ownership interest in the
Premises. "Taxes" shall include, without
limitation, all general real property taxes
and general and special assessments,
charges, fees, or assessments for transit,
housing, police, fire or other
governmental services or purported benefits
inuring to the Premises, service
payments in lieu of taxes, and any tax, fee
or excise on the act of entering
into and/or maintaining this Lease or any
other lease of space on the Premises,
or the use or occupancy of the Premises or
any part thereof, or on the rent
payable under any lease or in connection
with the business of leasing the
Premises, including, but not limited to,
business privilege taxes that have
been, or are now, or hereafter levied or
assessed against Lessor by the United
States of America, the Commonwealth of
Pennsylvania or any political
subdivision, political corporation,
district or other political or public
entity, whether quasi in nature or
otherwise, but not including any federal or
state income tax levied solely on Lessor's
income generally. "Taxes" does not
include transfer taxes of any nature
whatsoever arising from the purchase, sale
or lease of any real property or taxes
levied on any other property owned by
Lessor.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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Confidential Treatment
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Lessee at all times shall be responsible for and shall pay
before
delinquency, all municipal, county, state
or federal taxes assessed against any
leasehold interest or any personal property
of any kind, owned, installed or
used by Lessee.
Lessee, at its sole cost and expense, and after having given
twenty
(20) days prior written notice to Lessor,
may contest by appropriate legal
proceedings, promptly instituted and
thereafter conducted in good faith with due
diligence, the amount or validity, in whole
or in part of any Taxes; provided,
however, Lessee shall have at the time of
giving notice to Lessor,
contemporaneously deposited with Lessor
such financial security, by certified
funds or an irrevocable letter of credit,
for payment of the contested Taxes,
said amount deposited with Lessor to equal
one hundred twenty percent (120%) of
the total contested Taxes, including
interest and penalties, or other security
as may reasonably be required by
Lessor.
B. All sums which may become due by reason of the failure of
Lessee
to comply with any of the terms, covenants
and conditions of this Lease to be
kept and observed by Lessee, and any and
all damages and costs and expenses
(including without limitation thereto,
reasonable attorney's fees) which Lessor
may suffer or incur by reason of any
default of Lessee and any damages to the
Premises caused by any act or omission of
Lessee together with interest to the
date of payment at a rate per annum equal
to five hundred (500) basis points
above the prime interest rate (Prime + 5%)
of First Union National Bank,
Philadelphia, Pennsylvania, or its
successor, in effect during the period said
payment is due.
C. The premiums for insuring the Premises, including
alterations,
additions and improvements other than
Lessee's fixtures and equipment against
loss or damage by fire, all extended
coverage, and rental value insurance
(covering twelve (12) months' rental on a
fully gross basis) for the full, fair
and insurable value thereof, exclusive of
foundations, excavations, and
pavement, and insuring Lessor against
liability for bodily injury (including
death), personal injury and property
damage. The premiums shall be pro-rated for
such portion of the term of the Lease that
is included within any period in
which an insurance policy is in effect.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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Confidential Treatment
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D. Upon the written request of Lessor's mortgagee, Lessee will
pay
to Lessor, together with each monthly
installment of Minimum Annual Rent, an
amount equal to one-twelfth of the
aggregate annual amount of (I) the taxes
referred to in subparagraph A hereof and
(ii) the insurance premiums referred to
in subparagraph C hereof, all as estimated
by Lessor; such amounts shall be held
in escrow by Lessor or transmitted to any
Mortgagee requiring such payments and
applied on account of the taxes and
insurance premiums as and when payments
therefor are due. Without limitation of the
foregoing, Lessee shall also pay to
Lessor such additional amounts as Lessor's
Mortgagee may request from time to
time to provide a sufficient fund, at least
thirty (30) days prior to the due
date (or, in the case of any tax which may
be paid in installments, the due date
of the next installment thereof) for
payment of such taxes and premiums. Any
amounts held in escrow by Lessor pursuant
to this paragraph may be deposited in
a non-interest bearing account. Lessor may
apply such deposit against any
arrearage by Lessee in the payment of
Minimum Annual Rent and/or Additional
Rent. In the event Lessor assigns its
interest in this Lease, Lessor shall have
the right to pay the balance of such
amounts then in its possession to the
assignee, and Lessor shall thereupon be
completely released from any liability
with respect to such amounts.
E. Lessee shall pay Lessor a management fee of *** per Lease
Year,
payable on the Lease Commencement Date and
each anniversary thereof during the
term of this Lease and any Extension Term
or Renewal Term. Lessor shall provide
Lawn mowing and shrubbery trimming at
Lessee's sole cost and expense, as
Additional Rent; providing in no event,
however, shall Lessor be liable to
Lessee for damages, including consequential
damages, for any loss or damage
sustained by Lessee due to, or alleged to
be due to, failure to perform such
work in a timely or proper manner.
F. In the event Lessee requests any consents or approvals of
Lessor
and Lessor is obliged to expend counsel
fees and costs by reason thereof, Lessee
will reimburse Lessor for the counsel fees
and costs incurred, as Additional
Rent, within ten (10) days of submission of
bills therefor.
G. If Lessee does not pay any installment of Minimum Annual Rent
or
any item of Additional Rent on the day when
the same shall become due and
payable, and such failure shall continue
for a period of ten (10) days, Lessee
shall pay Lessor as Additional Rent a
service charge at the rate of One and
One-Half Percent (1-1/2%) per month (or
such lesser charge as may be the legal
maximum for a debtor of the same nature and
character as Lessee in the
jurisdiction which the Premises is located)
on the amount of such installment of
Minimum Annual Rent or item of Additional
Rent or all of the same for each month
or a portion of a month that the same shall
remain unpaid; provided, however,
that such charge shall in no event be less
than *** for any month or a portion
of a month that any installment of Minimum
Annual Rent or item of Additional
Rent shall remain unpaid. Such charge shall
be in the form of Additional Rent
for the purposes of defraying
administrative expenses of Lessor and is not
intended as a penalty against Lessee. The
provision of this paragraph shall not
preclude Lessor from exercising its options
as set forth in any other sections
of this Lease, or as provided by law.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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5.
UTILITIES.
Lessee shall heat the Premises at its own expense and shall also
pay
all charges of utility companies or public
authorities for electricity, gas,
telephone, water, steam, sewer service or
other services or utilities furnished
to the Premises. Under no circumstances
shall Lessor be required to furnish or
be responsible for the furnishing of or the
failure of any utility companies or
public authorities to furnish any utilities
or any other service of any kind to
the Premises or any part thereof.
6.
REPAIRS.
A. Except as otherwise set forth herein, Lessee shall be
responsible
for all maintenance to the Premises and at
Lessee's sole expense, shall make all
necessary or appropriate repairs,
replacements, renewals, and additions,
interior and exterior, ordinary and
extraordinary, foreseen and unforeseen,
required to keep and maintain the Premises,
including the Building and all
Systems therein(as hereinafter defined),
equipment and apparatus appurtenant
thereto or used in connection therewith, in
good order and condition including,
but not limited to, parking lot and
driveway repair, and maintenance, cleaning
and snow and ice removal, but not
replacement, in its entirety, of the parking
lot and driveway macadam. Lessor shall be
responsible, only, for maintenance to
the roof and Structural (defined as "load
bearing elements but not, exterior
walls and window and door jambs and sills)
portions of the Building, and
replacement, in its entirety, of the
parking lot and driveway macadam, if
un-repairable by Lessee, not arising from
the act or neglect of Lessee, its
agents, servants, and business visitors, in
accordance with the provisions of
subparagraph B hereof. Pertaining to
Lessee's responsibility to maintain the
heating, air-conditioning, plumbing,
electrical and sprinkler systems of the
Premises ("Systems"), in addition to all
required repairs and replacements,
Lessee agrees that it shall, to the extent
generally available, at its cost and
expense, enter into a service contract or
contracts with responsible service
companies providing for at least two (2)
semi-annual periodic inspections, and
complete maintenance including all
necessary parts and labor, commencing upon
the Lease Commencement Date, which contract
or contracts shall continue during
the term of this Lease and any Renewal Term
or Extension Term thereof and will
be subject to the approval of Lessor, which
Lessor agrees not to unreasonably
withhold. A copy of said service contract
shall be deposited with Lessor prior
to the Lease Commencement Date and said
contract must provide for at least
fifteen (15) days' notice to Lessor prior
to cancellation thereof. True and
correct copies of all inspection reports
received from the service contractor
shall be furnished to Lessor no later than
ten (10) days after receipt of same.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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B. Upon receipt of written notice from Lessee, Lessor agrees to
proceed with due diligence to repair at its
own cost and expense, any leaks in
the roof, or make any repairs and
replacements to the roof of the Building or
make any repairs to the Structural portions
of the Building, and replace, if
un-repairable by Lessee,, the parking lot
and driveway macadam, in its entirety,
provided such repairs and replacement are
not necessitated by any act or neglect
on the part of Lessee, its agents, servants
or business visitors. In no event,
however, shall Lessor be liable to Lessee
for damages, including consequential
damages, for any loss or damage sustained
by Lessee due to, or alleged to be due
to, failure to make such repairs or
replacement in a timely or proper manner. In
the event Lessor fails to make said repairs
or replacement within a reasonable
time and in a proper manner, after notice
by Lessee, Lessee may proceed to
effect said repairs or replacement and
Lessor shall repay Lessee the reasonable
costs of said repairs or replacement, but
Lessee may not set off the amount of
such costs against any rent due to Lessor
pursuant to the terms of this Lease.
Provided, however, that within ten (10)
days of receipt of any such bill for
repairs, Lessor may submit the questions of
the reasonableness of said bills
and/or Lessor's responsibility to pay for
same to arbitration before the
American Arbitration Association in
Philadelphia, Pennsylvania, and in
accordance with the rules and regulations
of the American Arbitration
Association in Philadelphia, Pennsylvania.
The decision of the arbitrators shall
be final and binding upon the parties and
shall be unappealable. The cost of
arbitration shall be borne equally by the
parties. Each party shall bear its own
costs.
C. Any repairs, replacements, renewals and additions, and any
labor
performed or materials furnished in, on or
about the Premises shall be performed
and furnished by Lessee and/or Lessor, as
the case may be, in strict compliance
with all applicable laws, regulations,
ordinances and requirements of all duly
constituted municipal authorities or other
governmental bodies having
jurisdiction over the Premises and the
requirements of any board of underwriters
having jurisdiction thereof.
7.
INSURANCE.
A. LIABILITY.
Lessee shall provide and keep in force at its own cost and
expense:
(I) Commercial General Liability Insurance, including Personal
Injury, Bodily Injury Including Death, and
Property Damage covering premises
liability, independent contractors
liability, and contractual liability, with
minimum limits of coverage of One Million
Dollars ($1,000,000.00) per occurrence
and Two Million Dollars ($2,000,000.00)
aggregate applicable to the Premises
only.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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(ii) Worker's Compensation Insurance in the full statutory
amount.
(iii) All policies carried hereunder, providing liability
coverage, will include Lessor as an
additional named insured with respect to
ownership of the Premises.
B. LESSEE'S PERSONAL PROPERTY. Lessee shall keep its personal
property and trade fixtures in the Premises
insured with "all risks" insurance
in an amount to cover 100% of the
replacement cost of the property and fixtures.
C. Insurance policies required by this Lease shall:
(I) Be issued by insurance companies licensed to do business
in the State of Pennsylvania, with general
policyholder's ratings of at least A
and a financial rating of at least XI in
the most current Best's Insurance
Reports available on the date of issuance.
If the Best's ratings are changed or
discontinued, the parties shall agree to an
equivalent method of rating
insurance companies;
(ii) Provide that the insurance not be cancelled or materially
changed in scope or amount of coverage
unless thirty (30) days advance notice is
given to the Lessor;
(iii) Be primary policies -- not contributing with, or in
excess of the coverage that the Lessor may
carry;
(iv) Be permitted to be carried under a "blanket policy".
However, a specific minimum limit must be
listed which is applicable to the
Premises and acceptable to the Lessor.
(v) Be maintained during the entire term and any Extension
Term or Renewal Term of this Lease.
D. By the Lease Commencement Date and prior to Lessee entering
possession of the Premises, and upon each
renewal of its insurance policies,
Lessee shall provide certificates of
insurance to Lessor by notice hereunder.
The certificates shall specify amounts,
types of coverage, the waiver of
subrogation, specified in Paragraph 16
hereof, and the insurance criteria listed
in this paragraph 7. The policies shall be
renewed or replaced and maintained by
Lessee. If Lessee fails to give any
required certificate within the time
provided herein, Lessor may obtain and pay
for that insurance and receive
reimbursement from Lessee as Additional
Rent, any other provision of this Lease
notwithstanding.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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8.
DESTRUCTION OF PREMISES.
A. TOTAL DESTRUCTION OF BUILDING. In the event the Building is
totally destroyed or so damaged by fire or
other casualty covered by a policy or
policies of insurance maintained by Lessor
that the same cannot be repaired and
restored within ninety (90) days from the
happening of such injury, the current
term of this Lease shall absolutely cease
and terminate and the Minimum Annual
Rent and Additional Rent shall abate for
the balance of the term. Nothing
contained herein shall be construed to
affect Lessor's right to collect the
proceeds of rental value insurance on the
Building.
B. PARTIAL DESTRUCTION OF BUILDING. If the damage covered by a
policy or policies of insurance maintained
by Lessor, be only partial and such
that the Building can be restored to
approximately its former condition within
ninety (90) days from the date of the
casualty loss, Lessor may, at Lessor's
option, restore the same with reasonable
promptness, reserving the right to
enter upon the Premises for that purpose or
terminate the current term of this
Lease. Lessor also reserves the right to
enter upon the Premises whenever
necessary to repair damage caused by fire
or other casualty to the building of
which the Premises is a part if the
building is a multi-tenant building, even
though the affect of such entry be to
render the Premises or part thereof
untenantable. The rent shall be apportioned
and suspended during the term that
any portion of the Premises is
untenantable, taking into account the ratio of
the untenantable portion to the total
Premises and the duration of such
untenantability. Nothing contained herein
shall affect or limit Lessor's right
to collect the proceeds of any rental value
insurance on the Premises. If a
dispute arises as to the amount of rent due
under this clause, Lessee agrees to
pay the full amount claimed by Lessor, but
Lessee shall have the right to
proceed by law to recover the excess
payment, if any.
C. In the event of a total casualty loss of the Building,
Lessor
shall, within a reasonable time thereafter,
give Lessee notice in writing of
other un-rented space owned by Lessor in
proximity to the Premises("Offer
Notice").Within ten (10) days of the date
of receipt by Lessee of Lessor's Offer
Notice (" Acceptance Period"), Lessee shall
have the first option to lease any
space specified in the Offer Notice by
giving notice to Lessor of acceptance of
the Offer Notice and the space accepted
("Substituted Space"). If Lessee accepts
the Offer Notice, by written acceptance
received by Lessor on or before the end
of the Acceptance Period, the parties shall
execute a Lease Amendment Agreement,
substituting the Substituted Space for the
Premises, for the balance of the term
of this Lease, with the same provisions,
except that the Minimum Annual Rent
shall be adjusted by the square footage of
the Substituted Space multiplied by
the per square foot Minimum Annual Rent
applicable to the Premises, hereunder.
Notwithstanding anything set forth herein
to the contrary, this right of first
refusal shall terminate absolutely in the
event Lessee has not properly
exercised this option by written acceptance
received by Lessor on or before the
end of the Acceptance Period.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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D. Lessor shall not be liable for any damage, compensation or
claim
by reason of the necessity of repairing any
portion of the Premises, the
interruption of the use of the Premises,
any inconvenience or annoyance arising
as a result of such repairs or interruption
or the termination of this Lease by
reason of damage or destruction of the
Premises or any part thereof.
9.
CONDEMNATION.
A. TOTAL CONDEMNATION. In the event the entire Premises is taken
or
condemned by any public or quasi-public
authority exercising the right of
eminent domain, the term of this Lease
shall terminate as of the date the
condemning authority takes possession of
the Premises, with the same force and
effect as though such date were the date
fixed herein for expiration of the
term. The entire amount of any award for
such taking shall belong to the Lessor,
except for moving, business interruption
expenses, and damages to Lessee's
personal property, if any, awarded directly
to Lessee and Lessee hereby waives
any other right it may have to any portion
of such award.
B. PARTIAL CONDEMNATION. In the event that a portion of the
Premises, but not the entire Premises is
taken or condemned for a public or
quasi-public use, the Minimum Annual Rent
herein shall abate equitably in
proportion to the area of the building on
the Premises condemned as of the date
on which the condemning authority shall
take possession of the condemned
property. Provided, however, that if the
condemnation was so extensive that the
Premises is not suitable for Lessee's use
as set forth herein, the taking shall
be considered a total taking and
subparagraph A above will apply. The entire
amount of any award for such taking shall
belong to Lessor except for moving,
business interruption expenses and damages
to Lessee's personal property, if
any, awarded directly to Lessee and Lessee
hereby waives any other right it may
have to any portion of such award. If the
parties are unable to agree as to
whether any taking is so substantial as to
constitute a total taking for the
purposes of this Lease, or as to the amount
of abatement of rent after a partial
taking, the matter shall be submitted to
arbitration in Philadelphia,
Pennsylvania, in accordance with the rules
of the American Arbitration
Association then in force and the decision
of the arbitrators shall be final and
binding on both parties.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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C. If the condemning authority should take only the right to
possession for a fixed period of time or
for the duration of an emergency or
other temporary condition, then,
notwithstanding anything hereinabove provided,
this Lease shall continue in full force and
effect without any abatement of rent
and the amounts payable by the condemning
authority with respect to any period
of time prior to the expiration or sooner
termination of this Lease (not
exceeding the Minimum Annual Rent and
Additional Rent paid by Lessee to Lessor
during said period of time) shall be paid
by Lessor to Lessee out of the amount
of any condemnation award received by
Lessor.
10. USE
AND COMPLIANCE WITH REGULATIONS.
A. Lessee hereby covenants and agrees that it will at no time
use
the Premises for any other use or purpose
than lawful purposes. Lessee further
agrees that it will at no time use the
Premises in any manner which may be
deemed a violation of any municipal
(including but not limited to township
authorities, regulatory agencies and water
and sewer authorities), state or
federal law, rules, regulations or
requirements. Lessee shall comply at its sole
cost and expense with any and all
municipal, state and federal rules,
regulations, requirements or laws,
including additional installations which may
be required, covering Lessee's specific use
and occupancy of the Premises;
Lessor shall comply, at its sole cost and
expense with any and all municipal,
state and federal rules, regulations,
requirements or laws, and/or additional
installations covering buildings and
property generally, without regard to
Lessee's specific use and occupancy
thereof. Lessor represents and warrants that
the applicable zoning ordinances permit
Lessee's intended use of the Premises as
specified in Paragraph 1(C) hereof. The
applicable use and occupancy regulations
of Montgomery Township, Montgomery County,
Pennsylvania, require a tenant to be
in possession of its space and set up for
operation before making application
for a certificate of occupancy ("CO") and
the necessary township inspection.
Accordingly, Lessee shall take possession
of the Premises, set up its operation
and promptly thereafter, make application
to Code Enforcement Officer of
Montgomery Township for a CO for the
Premises and obtain any required CO. Lessee
shall provide Lessor with a true and
correct copy of its CO promptly after
issuance, by notice hereunder. In the event
issuance of a CO is withheld by
reason of any condition of the Premises not
related to Lessee's specific use and
occupancy, Lessor, at its sole cost and
expense, shall promptly use its best
efforts to rectify this condition and
otherwise will cooperate with Lessee and
render reasonable assistance to Lessee for
issuance of the CO. Lessee hereby
agrees to protect, indemnify and save
Lessor harmless from and against any and
all loss, damage, expense, cause of action,
suits, demands, judgments and claims
of any nature whatsoever arising as a
result of Lessee's breach of the covenants
contained in this paragraph, in addition to
any other indemnification provisions
set forth in this Lease. Lessee shall
deposit no process wastes into the
sanitary sewer system serving the Premises
and agrees that only sanitary waste
shall be inserted into the sanitary sewer
system. Two (2) EDU(s) of sanitary
sewer capacity has been allocated to the
Premises and Lessee shall not exceed
said allocation. Without limiting the
generality of the foregoing, Lessee, at
its sole cost and expense shall comply with
U.S. Department of Health and Human
Services GUIDELINES FOR PROTECTING BUILDING
ENVIRONMENTS FROM AIRBORNE CHEMICAL,
BIOLOGICAL OR RADIOLOGICAL ATTACKS, (PUB.
NO. 2002-139). See www.cdc.gov/niosh.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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Confidential Treatment Requested
by Environmental Solutions Worldwide, Inc.
B. As used herein, "Hazardous Substance" means any substance
which
is toxic, ignitable, reactive or corrosive
and which is regulated by any local
government, the State of Pennsylvania or
the United States Government. Hazardous
Substance includes any and all materials or
substances which are defined as
'hazardous waste', 'extremely hazardous
waste' or 'hazardous substance' pursuant
to state, federal or local governmental
laws or regulations. "Hazardous
Substance" includes, but is not restricted
to asbestos, polychlorinated
biphenyls (PCBs) and petroleum. Lessee
shall not cause or permit any Hazardous
Substance to be used, stored, generated or
disposed of on or in the Premises by
Lessee, Lessee's agents, employees,
contractors or invitees, without first
obtaining Lessor's written consent, which
may be withheld , delayed or
conditioned at Lessor's sole and absolute
discretion. If Hazardous Substances
are used, stored, generated or disposed of
on or in the Premises or if the
Premises become contaminated in any manner
for which Lessee is legally liable,
Lessee shall indemnify, defend and hold
harmless the Lessor from any and all
claims, damages, fines, judgments,
penalties, costs, liabilities or losses
(including without limitation, a decrease
in value of the Premises or the
Building or the Lot, damages because of
adverse impact on marketing of the
Premises and any and all sums paid for
settlement of claims, attorneys',
consultant and expert fees) arising during
or after the term hereof and arising
as a result of such contamination by
Lessee. This indemnification includes,
without limitation, any and all costs
incurred because of any investigation of
the Lot or any clean-up, removal or
restoration mandated by a federal, state or
local agency or political subdivision. In
addition, if Lessee causes or permits
the presence of any Hazardous Substance on
the Premises and this results in
contamination, Lessee shall promptly, at
its sole expense, take any and all
necessary actions to return the Premises to
the condition existing before the
presence of any such Hazardous Substance on
the Premises, provided, however,
that Lessee shall first obtain Lessor's
approval for any such remedial action.
Within ten (10) days after receipt, Lessor
and Lessee shall advise the other
party in writing and provide the other
party with copies of (as applicable), any
notices alleging violation of any law or
regulation relating to any Hazardous
Substance upon any portion of the Premises,
the Building or the Lot; any claims
made or threatened in writing regarding
non-compliance with any law or
regulation involving the presence of any
Hazardous Substance on any portion of
the Premises, the Building or the Lot; or
any governmental or regulatory actions
or investigations instituted or threatened
regarding non-compliance with any law
or regulation involving any Hazardous
Substance upon any portion of the
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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Confidential Treatment
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Premises, the Building or the Lot. If
Lessor has reasonable cause to believe
that the Premises is in violation of any of
the provisions of this Article 10
(B) , Lessor shall, upon prior notice to
Lessee, have the right, but no
obligation, at any time that is reasonable
under the circumstances: (i)to enter
upon the Premises, take samples, review
Lessee's books and records for any
notices related to environmental
violations, interview Lessee's employees and
officers; (ii) either, cause environmental
site assessments in accordance with
ASTM Standard E-1527-97 (as amended, from
time to time, (the "ESA's") to be
performed, or require Lessee to cause the
ESA's to be performed and provided to
Lessor within a reasonable time; and (iii)
conduct such other activities as
Lessor, in its sole and absolute
discretion, deems appropriate, ((i),(ii) and
(iii) being referred to herein as the
"Audit". Lessee shall cooperate fully in
the conduct of the Audit. Lessor shall not
unreasonably disturb the normal
operation of the Premises in the course of
the Audit. Lessee shall, upon demand,
pay, as Additional Rent all costs and
expenses of Lessor connected with the
Audit if it discloses the need for any
remedial work. Prior to the Lease
Commencement Date, and thereafter,
promptly, following notice from Lessor,
Lessee shall provide Lessor with true and
correct copies of all documents
concerning Hazardous Substances which are,
or will be, stored, used, consumed or
generally are, or will be, present on the
Premises, including, but not limited
to, all material safety data sheets,
manifests, programs, manuals, reporting
procedures, warnings, instructions or other
documents. Where materials generated
by Lessee are disposed of off of the
Premises, Lessee agrees that Lessor is not
the owner of the materials, and indemnifies
and holds Lessor harmless for any
costs incurred in defending and paying for
any action where it is alleged that
Lessor is the owner of the materials.
C. Within ten (10) days after receipt, Lessor and Lessee shall
advise the other party in writing and
provide the other with copies of (as
applicable), any notices alleging violation
of the Americans with Disabilities
Act of 1990 ("ADA") relating to any portion
of the Premises, the Building or the
Lot; any claims made or threatened in
writing regarding non-compliance with the
ADA and relating to any portion of the
Premises, the Building or the Lot; or any
governmental or regulatory actions or
investigations instituted or threatened
regarding non-compliance with the ADA and
relating to any portion of the
Premises, the Building or the Lot.
10.1
LESSOR'S ENVIRONMENTAL REPRESENTATION
A. Lessor warrants and represents that to the best of its
knowledge
information, and belief, no Hazardous
Substances exist upon the Premises, as of
the Effective Date.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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<PAGE>
Confidential Treatment
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B. Lessor shall reimburse Lessee for all out of pocket costs
incurred by Lessee as a result of a breach
of Lessor's environmental warranty
and representation set forth in
Subparagraph A.
11.
INDEMNIFICATION.
A. The Lessee shall keep, save and hold harmless the Lessor from
any
and all losses, damages and liability for
anything and everything whatsoever (i)
arising from or out of the occupancy of the
Premises and use of abutting and
nearby common areas or any part thereof or
any sidewalks, streets, driveways,
right of way or roadways, adjacent or
nearby thereto, during the term of this
Lease, or any Renewal Term or Extension
Term thereof, by or under the Lessee,
the Lessee's agents, servants, contractors,
sub-contractors, or business
visitors, and (ii) from any loss or damage
or liability ,as above described,
arising from any fault or negligence by the
Lessee or any failure on the
Lessee's part to comply with any of the
covenants, terms and conditions
contained in this Lease, or regardless of
Lessee's fault, except as otherwise
provided in Article 16 , INFRA.
B. Notwithstanding anything set forth herein to the contrary, in
the
event Lessor is held liable to an employee
of Lessee (either an actual employee
or one deemed to be an employee by
operation of law) on account of work-related
injuries sustained by such employee, Lessee
shall be liable to Lessor for
damages, contribution and indemnity in any
action at law or otherwise. This
subparagraph 11(B) shall constitute "a
written contract" between Lessor and
Lessee pursuant to Section 303(b) of the
Workmen's Compensation Act, 77 P.S.
(section)481(b).
12.
MECHANIC'S LIENS.
Lessee shall not permit any mechanic's, materialmen's or
similar
liens to remain upon the Premises for labor
or material furnished to Lessee or
claimed to have been furnished to Lessee in
connection with work of any
character performed or claimed to have been
performed on the Premises by, or at
the direction of, or with the consent of
Lessee, whether such work was performed
or materials furnished before or after the
commencement of the term of this
Lease. Lessee may, however, contest the
validity of any such lien or claim,
provided Lessee shall give Lessor such
reasonable security to insure payment and
to prevent any sale, foreclosure or
forfeiture of the Premises by reason of such
non-payment as Lessor may require. Upon
final determination of the validity of
any such lien or claim, Lessee shall
immediately pay any judgment or decree
rendered against Lessee or Lessor with all
proper costs and charges and shall
cause such lien to be released of record
without cost to Lessor.
Certain information in this document
denoted by the symbol *** has been omitted
and filed separately with the Securities
and Exchange Commission. Confidential
treatment has been requested with respect
to the omitted portions.
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Confidential Treatment
Requested by Environmental Solutions Worldwide, Inc.
13.
SUBORDINATION.
A. This Lease shall be subordinate in all respects to the lien
of
any mortgage now or hereafter encumbering
the Premises or any part thereof, with
the same force and effect as if such
mortgage had been executed, acknowledged,
delivered and recorded prior to the
execution of this Lease. The subordination
contained in this Paragraph 13 is and shall
be effective without the necessity
of any further act or writing by either
party hereto, but Lessee agrees that it
will, immediately upon Lessor's request,
and at no additional charge to Lessor,
deliver such additional documents as any
mortgagee may require to confirm such
subordination. Lessee, at the request of
any mortgagee or any one acquiring
title to Lessor's estate or the Premises by
foreclosure, deed in lieu of
foreclosure or otherwise, shall attorn to
the then owner and recognize such
owner as Lessor for the balance of the term
of this Lease, subject to all of the
terms and provisions hereof. Such mortgagee
or purchaser at said foreclosure
sale shall not be:
(1) Liable for any act or omission of Lessor;
(2) Subject to any offsets or defenses which Lessee may have
against
the Lessor;
(3) Bound by any rent or Minimum Annual Rent which the Lessee
may
have paid to the Lessor for more than the
current month; or
(4) Bound by any amendment or modification of the Lease made,
without its consent.
B. At Lessee's request, by notice hereunder, Lessor shall obtain
a
Subordination, Non-Disturbance and
Attornment Agreement from Lessor's mortgagee
in the mortgagee's standard form. Any fee
charged for this agreement by the
mortgagee shall be paid by Lessee as
Additional R
