EXHIBIT 10.86
SUBLEASE AGREEMENT
This Sublease
Agreement (the “Agreement”) is made and effective
August 15,2008,
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Lithium
Technology Corporation (the "Sublessor"), a corporation organized and
existing under the laws of the state of Delaware with offices
located at: 5225 Campus Drive, Plymouth Meeting, PA
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Porous Power
Technologies, LLC (the
"Sublessee"), a limited liability company organized and existing
under the laws of the state of Colorado, with offices located at:
2765 Dagny Way, Suite 200, Lafayette, CO 80026
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RECITALS
In
consideration of the covenants and agreements hereinafter set forth
to be kept and performed by the parties hereto, Sublessor, hereby
subleases to Sublessee and Sublessee does hereby take, lease, and
hire from Sublessor the Leased Premises hereinafter described for
the period, and at the rental, subject to, and upon the terms and
conditions hereinafter set forth, as follows:
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Sublessor has
leased a building from PMP Whitemarsh Associates, lessor, of P.O.
Box 797, Gwynedd Valley, PA 19437.
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Sublessor shall
demise to Sublessee the portion of the building fully described in
Exhibit A, which is attached to and made a part of this sublease
agreement, and is in accordance with the Asset Purchase
Agreement.
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This Sublease
agreement terminates on March 31, 2009, which is the termination of
the lease between Sublessor and Lessor.
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Lessor concurs
that Sublessee may remain in possession of the demised premises for
the full term of this sublease agreement, despite any change that
may occur in the status of lessee or the lease agreement between
lessee and lessor.
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Sublease
Agreement
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Page 1 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
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ACCEPTANCE
OF LEASED PREMISES
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Sublessee’s occupancy of the Leased
Premises shall be conclusive evidence of Sublessee's acceptance of
all improvements constituting the Leased Premises, in good and
satisfactory condition and repair. Sublessee shall accept
possession and use of the Leased Premises “as is” in
their condition existing as of the date hereof with all faults.
Sublessee, at Sublessee’s sole cost and expense, shall
promptly comply with all applicable laws, ordinances, codes, rules,
orders, directions and regulations of governmental authority
governing and regulating the use or occupancy of the Leased
Premises as may now or hereafter be in effect during the Term
hereof and shall if so required make any alterations, additions or
changes to the Leased Premises as may be required by said laws,
ordinances, codes, rules, directions and regulations.
Since
Sublessor’s lease terminates on March, 31, 2009, Sublessee is
free to negotiate its own lease with Lessor beyond that
date.
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SUBLEASE
TERMINATION AND CONDITION OF PREMISES
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Upon the
termination of this Sublease for any reason whatsoever, Sublessee
shall return possession of the Leased Premises to Sublessor or
Sublessor’s authorized agent in a good, clean and safe
condition, reasonable wear and tear excepted. On or before, and in
any event no later than 10 days following the date Sublessee
vacates the Leased Premises and returns possession of same to
Sublessor, Sublessee and Sublessor, or authorized agents thereof,
shall conduct a joint inspection of the Leased Premises. Sublessee
at its cost shall thereafter promptly repair or correct any defects
or deficiencies in the condition of the Leased Premises which
occurred during the period of the sublease, reasonable wear and
tear excepted.
Sublessee shall
pay to lessee as basic rent $5,000 per month through December 31,
2008 and $7,000 per month beginning January 1, 2009 and continuing
through March 31, 2009, on the 1st day of each month, commencing
September 1, 2008 and continuing each month thereafter during the
term of this sublease agreement. Sublessee shall pay all other sums
due as additional rental under the provisions of this sublease
agreement on the basic rental payment due date first occurring
after the additional rental payment arises. For the
month of August, 2008, rent shall be prorated for the percentage of
days Sublessee takes possession of the demised premises and shall
be paid with the mutual signing of this Sublease.
Sublessee
hereby covenants and agrees to pay rent to Sublessor, without
offset or deduction of any kind whatsoever, in the form and at the
times as herein specified. All rent shall be paid to Sublessor at
the address specified in this Sublease unless and until Sublessee
is otherwise notified in writing. Base Minimum Rent payments in the
monthly amount set forth below shall be payable monthly, in
advance, due on the first (1st) day of each calendar month
commencing on the Commencement Date hereof and delinquent if not
paid on or before the tenth (10th) day of the month throughout the
Term of this Sublease. Rent for any period which is for less than
one month shall be a pro rata portion of the monthly installment.
The required payments under Article 6 and all other charges payable
by Sublessee shall be deemed to be additional rent.
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Sublease
Agreement
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Page 2 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
In the event
Sublessee shall fail to pay the rent or any installment thereof, or
any other fees, costs, taxes or expenses payable under this
Sublease within 15 days after the said payment has become due,
Sublessee agrees that Sublessor will incur additional costs and
expenses in the form of extra collection efforts, administrative
time, handling costs, and potential impairment of credit on loans
for which this Sublease may be a security. Both parties
agree that in such event, Sublessor, in addition to its other
remedies shall be entitled to recover a late payment charge against
Sublessee equal to 5% of the amount not paid within said 15 day
period. Additionally, any past due amounts under this
Sublease shall bear interest at the rate of 2% per
month. Sublessee further agrees to pay Sublessor any
cost incurred by Sublessor in effecting the collection of such past
due amount, including but not limited to attorneys' fees and/or
collection agency fees. Sublessor shall have the right to require
Sublessee to pay monies due in the form of a cashier's check or
money order. Nothing herein contained shall limit any other remedy
of Sublessor with respect to such payment delinquency.
On execution of
this Sublease, Sublessee shall deposit with Sublessor a sum equal
to $1,000 (the “Security Deposit”) in order to provide
security for the performance by Sublessee of the provisions of this
Sublease. If Sublessee is in default, Sublessor may, but shall not
be obligated to use the Security Deposit, or any portion of it, to
cure the default or to compensate Sublessor for damage sustained by
Sublessor resulting from Sublessee's default. Sublessee shall
immediately on demand pay to Sublessor a sum equal to the portion
of the Security Deposit expended or applied by Sublessor as
provided in this paragraph so as to maintain the Security Deposit
in the sum initially deposited with Sublessor. At the expiration or
termination of this Sublease, Sublessor shall return the Security
Deposit to Sublessee or its successor, less such amounts as are
reasonably necessary to remedy Sublessee's defaults, to repair
damages to the Leased Premises caused by Sublessee or to clean the
Leased Premises upon such termination, as soon as practicable
thereafter. In the event of the sale or other conveyance of the
Leased Premises, the Security Deposit will be transferred to the
purchaser or transferee and the Sublessor will be relieved of any
liability with reference to such Security Deposit. Sublessor shall
not be required to keep the Security Deposit separate from its
other funds, and (unless otherwise required by law) Sublessee shall
not be entitled to interest on the Security Deposit.
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Permitted
Use: The Leased Premises
are to be used by Sublessee for the sole purpose of research and
development, pilot plant production and other activities associated
with Sublessee’s business. Sublessee shall not use or occupy
the Leased Premises or permit the same to be used or occupied for
any use, purpose or business other than as provided in this Section
a) during the Term of this Sublease or any extension
thereof.
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Prohibited
Activities: During the
Term of Sublease or any extension thereof, Sublessee shall
not:
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Use or permit
the Leased Premises to be used for any purpose in violation of any
statute, ordinance, rule, order, or regulation of any governmental
authority regulating the use or occupancy of the Leased
Premises.
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Cause or permit
any waste in or on the Leased Premises.
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Sublease
Agreement
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Page 3 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
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Use or permit
the use of the Leased Premises in any manner that will tend to
create a nuisance or tend to adversely affect or injure the
reputation of Sublessor or its affiliates.
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Store any
explosive, radioactive, dangerous, hazardous or toxic materials in
or about the Leased Premises.
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Use or allow
the Leased Premises to be used for sleeping quarters, dwelling
rooms or for any unlawful purpose.
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Build any
fences, walls, barricades or other obstructions; or, install any
radio, television, phonograph, antennae, loud speakers, sound
amplifiers, or similar devices on the roof, exterior walls or in
the windows of the Leased Premises, or make any changes to the
interior or exterior of the Leased Premises without Sublessor's
prior written consent.
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Operational
Permits: Sublessee, prior to the Commencement
Date, shall obtain and thereafter continuously maintain in full
force and effect for the Term of this Sublease or any extension
thereof, at no cost or expense to Sublessor, any and all approvals,
licenses, or permits required by any lawful authority as of the
Commencement Date or imposed thereafter, for the use of Leased
Premises, including but not limited to business
licenses.
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Compliance
With Laws: Sublessee shall comply with all federal, state,
county, municipal, or other statutes, laws, ordinances,
regulations, rules, or orders of any governmental or
quasi-governmental entity, body, agency, commission, board, or
official applicable to the Leased Premises and Sublessee’s
business.
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Utility
Charges: Sublessee shall pay to Sublessor one
half (1/2) of the water, sewer, gas and electric bills for the
entire building covered in Sublessor’s
Lease. Assuming the cost for the electricity needed for
the operation of the dry room can be determined, the Sublessee
shall pay the Sublessor for the daily cost of the electricity when
operated solely for the benefit of the Sublessee. On
days of operation that are for the sole benefit of the Sublessor,
the Sublessor shall be solely responsible for these electricity
costs.
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Personal
Property Taxes: Sublessee shall be responsible for
and shall pay before they become delinquent all taxes, assessments,
or other charges levied or imposed by any governmental entity on
the equipment transferred to Sublessee through the Asset Purchase
Agreement.
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MAINTENANCE
AND ALTERATIONS
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Maintenance
by Sublessee: Sublessee shall, at its sole cost
and expense, keep in good and safe condition, order and repair all
portions of the Leased Premises and all facilities appurtenant
thereto and every part thereof which Sublessor has subleased to
Sublessee.
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Damage;
Abatement of Rent: Notwithstanding anything in this Sublease to the
contrary, Sublessee at its own cost and expense shall repair and
replace as necessary all portions of the Leased Premises damaged by
Sublessee, its employees, agents, invitees,
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Sublease
Agreement
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Page 4 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
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Alterations
and Liens: Sublessee
shall not make or permit any other person to make any structural
changes, alterations, or additions to the Leased Premises or to any
improvement thereon or facility appurtenant thereto without the
prior written consent of Sublessor first had and obtained.
Sublessee shall keep the Leased Premises free and clear from any
and all liens, claims, and demands for work performed, materials
furnished, or operations conducted on the Leased Premises at the
instance or request of Sublessee. As a condition to
giving its consent to any proposed alterations, Sublessor may
require that Sublessee remove any or all of said alterations at the
expiration or sooner termination of the Sublease term and restore
the Leased Premises to its condition as of the date of Sublessee's
occupation of the Leased Premises. Prior to construction
or installation of any alterations, Sublessor may require Sublessee
to provide Sublessor, at Sublessee's sole cost and expense, a lien
and completion bond in an amount equal to one and one-half times
the estimated cost of such alterations, to insure Sublessor against
any Liability for mechanic's and material men's liens and to insure
completion of the work. Should Sublessee make any alterations
without the prior written consent of Sublessor, Sublessee shall
remove the same at Sublessee’s expense upon demand by
Sublessor.
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Inspection
by Sublessor: Sublessee
shall permit Sublessor or Sublessor’s agents,
representatives, designees, or employees to enter the Leased
Premises at all reasonable times for the purpose of inspecting the
Leased Premises to determine whether Sublessee is complying with
the terms of this Sublease and for the purpose of doing other
lawful acts that may be necessary to protect Sublessor’s
interest in the Leased Premises under this Sublease, or to perform
Sublessor’s duties under this Sublease, or to show the Leased
Premises to insurance agents, lenders, and other third parties, or
as otherwise allowed by law.
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Plans and
Permits: Any alteration
that Sublessee shall desire to make in or about the Leased Premises
and which requires the consent of Sublessor shall be presented to
Sublessor in written form, with proposed detailed plans and
specifications therefore prepared at Sublessee's sole expense. Any
consent by Sublessor thereto shall be deemed conditioned upon
Sublessee’s acquisition of all permits required to make such
alteration from all appropriate governmental agencies, the
furnishing of copies thereof to Sublessor prior to commencement of
the work, and the compliance by Sublessee with all conditions of
said permits in a prompt and expeditious manner, all at Sublessee's
sole cost and expense.
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Construction
Work Done by Sublessee: All construction work required or
permitted to be done by Sublessee shall be performed by a licensed
contractor in a good and workmanlike manner and shall conform in
quality and design with the Leased Premises existing as of the
Commencement Date, and shall not diminish the value of the Leased
Premises in any way whatsoever. In addition, all such
construction work shall be performed in compliance with all
applicable statutes, ordinances, regulations, codes and orders of
governmental authorities and insurers of the Leased Premises.
Sublessee or its agents shall secure all licenses and permits
necessary therefore.
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Title to
Alterations: Unless
Sublessor requires the removal thereof, any alterations which may
be made on the Leased Premises shall upon installation or
construction thereof on the Leased Premises become the property of
Sublessor and shall remain upon and be surrendered with the Leased
Premises at the expiration or sooner termination of the term of
this Sublease. Without limiting the generality of the
foregoing, all heating, lighting, electrical (including all wiring,
conduits, main and sub panels), air conditioning, partitioning,
drapery, and carpet installations made by Sublessee, regardless of
how affixed to the Leased Premises, together with all other
alterations that have become a part of the Leased Premises, shall
be and become the property of Sublessor upon installation, and
shall not be deemed trade fixtures, and shall remain upon and be
surrendered with the Leased Premises at the expiration or sooner
termination of this Sublease.
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Sublease
Agreement
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Page 5 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
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Removal of
Alterations: In addition
to Sublessor's right to require Sublessee at the time of
installation or construction of any alteration to remove the same
upon expiration or sooner termination of this Sublease, Sublessor
may elect, by notice to Sublessee at least 30 days before
expiration of the Term hereof, or within 30 days after sooner
termination hereof, to acquire Sublessee to remove any alterations
that Sublessee has made to the Leased Premises. If Sublessor so
elects, Sublessee shall, at its sole expense, upon expiration of
the Term hereof, or within 30 days after any sooner termination
hereof, remove such alterations, repair any damage occasioned
thereby, and restore the Leased Premises to the condition existing
as of the Commencement Date or such other condition as may
reasonably be designated by Sublessor in its election.
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Hold-Harmless Clause: Sublessee agrees to indemnify, defend and hold
Sublessor, the property of Sublessor, and the Leased Premises, free
and harmless from any and all claims, liability, loss, damage, or
expenses incurred by reason of this Sublease or resulting from
Sublessee’s occupancy and use of the Leased Premises (other
than as a result of the direct gross negligence of Sublessor),
specifically including, without limitation, any claim, liability,
loss, or damage arising by reason of:
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The death or
injury of any person or persons, including Sublessee, any person
who is an employee or agent of Sublessee, or by reason of the
damage to or destruction of any property, including property owned
by Sublessee or any person who is an employee or agent of
Sublessee, and caused or allegedly caused by either the condition
of the Leased Premises, or some act or omission of Sublessee or of
some agent, contractor, employee, or invitee of Sublessee on the
Leased Premises;
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Any work
performed on the Leased Premises or materials furnished to the
Leased Premises at the instance or request of Sublessee or any
agent or employee of Sublessee; and
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Sublessee's
failure to perform any provision of this Sublease or to comply with
any requirement of law or any requirement imposed on the use by
Sublessee of the Leased Premises by any governmental agency or
political subdivision.
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Maintenance of
the insurance required under this Article shall not relieve
Sublessee of the obligations of indemnification contained in this
Section.
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Liability
Insurance: Sublessee
shall, at its own cost and expense, secure and maintain during the
term of this Sublease, a comprehensive broad form policy of
Combined Single Limit Bodily Injury and Property Damage Insurance
issued by a reputable company authorized to conduct insurance
business in the State of Pennsylvania insuring Sublessee against
loss or liability caused by or connected with Sublessee’s use
and occupancy of the Leased Premises in an amount not less than
$100,000 per occurrence.
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Workers'
Compensation Insurance: During the term of this Sublease,
Sublessee shall comply with all Workers' Compensation laws
applicable on the date hereof or enacted thereafter and shall
maintain in full force and effect a Workers’ Compensation
Insurance policy covering all employees in any way connected with
the business conducted by Sublessee pursuant to this Sublease and
shall pay all premiums, contributions, taxes and such other costs
and expenses as are required to be paid incident to such insurance
coverage, all at no cost to Sublessor.
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Sublease
Agreement
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Page 6 of 19
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© Copyright Envision SBS. 2004.
All rights reserved. Protected by the copyright laws of the United
States & Canada and by international treaties. IT IS ILLEGAL
AND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE,
LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY, THIS
PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN
A COURT OF LAW.
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Policy
Form: The policies of
insurance required to be secured and maintained under this Sublease
shall be issued by good, responsible companies, qualified to do
business in the State of Pennsylvania with a general policy
holders’ rating of at least
“A”. Executed copies of such policies of
insurance or certificates thereof shall be delivered to Sublessor
and to the Master Lessor under the Master Lease not later than 15
days after the commencement of business operations of Sublessee at
the Leased Premises.
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Installation
of Trade Fixtures: For so long as Sublessee is not in
default of any of the terms, conditions and covenants of this
Sublease, Sublessee shall have the right at any time and from time
to time during the Term of this Sublease and any renewal or
extension of such term, at Sublessee's sole cost and expense, to
install and affix in, to, or on the Leased Premises such items
(hereinafter called “trade fixtures”), for use in
Sublessee's trade or business as Sublessee may, in its reasonable
discretion, deem advisable.
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Signs: Subject to any and all requirements
now or hereinafter enacted by any municipal, county, or state
regulatory agency having jurisdiction thereover and subject to
Sublessor’s written consent, Sublessee may erect at
Sublessee's cost, a sign on the Leased Premises identifying the
Leased Premises. Sublessee shall maintain, at
Sublessee's sole cost and expense, said sign.
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Removal of
Signs and Trade Fixtures: In addition to Sublessor’s
right to require Sublessee at the time of installation of any sign
or trade fixtures to remove the same upon expiration or sooner
termination of this Sublease, Sublessor may elect, by notice to
Sublessee at least 30 days before expiration of the Term hereof, or
within 15 days after sooner termination hereof, to require
Sublessee to remove any sign or trade fixture owned by Sublessee.
If Sublessor so elects, Sublessee shall at its sole cost and
expense, upon expiration of the Term hereof, or within 15 days
after any sooner termination hereof, remove such sign or trade
fixture owned by Sublessee. If Sublessor so elects, Sublessee
shall, at its sole cost and expense, upon expiration of the Term
hereof, or within 15 days after any sooner termination hereof,
remove such sign or trade fixture, repair any damage occasioned
thereby, and restore the Leased Premises to the condition existing
as of the Commencement Date or such other condition as may
reasonably be designated by Sublessor in its election.
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CONDEMNATION
AND DESTRUCTION
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Total
Condemnation: Should, during the Term of this Sublease or any
renewal or extension thereof, title and possession of all of the
Leased Premises be taken under the power of eminent domain by any
public or quasi-public agency or entity, this Sublease shall
terminate as of the date actual physical possession of the Leased
Premises is taken by the agency or entity exercising the power of
eminent domain and both Sublessor and Sublessee shall thereafter be
released from all obligations under this Sublease.
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Termination
Option for Partial Condemnation: Should, during the Term of this
Sublease or any renewal or extension thereof, title and possession
of more than 10% of the floor area of the Leased Premises, and/or
more than 15% of the parking area of the L
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