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Exhibit 10.1(i)
AGREEMENT OF LEASE
by and between
ZEUNER ENTERPRISES, INC.
and
CONTROL CONCEPTS, INC.
Dated: February 18, 1994
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TABLE OF CONTENTS
Section Page
------- ----
1. Premises....................................................... 1
2. Term........................................................... 1
3. Minimum Rent................................................... 1
4. Taxes and Other Impositions.................................... 2
5. Insurance...................................................... 3
6. Lessee's Fixtures.............................................. 5
7. Signs.......................................................... 6
8. Care, Improvement and Restoration of the Premises.............. 6
9. Lessor's Right of Entry........................................ 8
10. Non-Abatement of Rent.......................................... 8
11. Net Lease...................................................... 8
12. Utility Charges................................................ 9
13. No Services by Lessor.......................................... 9
14. Governmental Regulations....................................... 9
15. Use of Premises................................................ 10
16. Mechanic's Liens, etc.......................................... 10
17. Indemnification................................................ 11
18. Waiver of Claims Against Lessor................................ 12
19. Quiet Enjoyment................................................ 12
20. Condemnation................................................... 13
21. Assignment and Subletting...................................... 14
22. Subordination.................................................. 14
23. Certificates................................................... 15
24. Curing Lessee's Defaults....................................... 15
25. Notices; Payment of Rent....................................... 15
26. Adverse Possession............................................. 16
27. Environmental Compliance....................................... 16
28. Condition of Title and of Premises............................. 18
29. Surrender...................................................... 19
30. Defaults - Remedies............................................ 19
31. Grace Period and Notice of Default............................. 21
32. Lessor's Waiver................................................ 21
33. Brokers........................................................ 22
34. Captions....................................................... 22
35. Entire Agreement; Interpretation............................... 22
36. Definition of "Lessor"......................................... 22
37. Definition of "Lessee"......................................... 22
38. Option to Purchase............................................. 23
39. Memorandum of Lease............................................ 26
40. Consent........................................................ 26
41. Performance.................................................... 26
42. Abatement...................................................... 26
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AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE ("Lease") made as of the ___ day of February,
1994, by and between ZEUNER ENTERPRISES, INC., a Pennsylvania corporation
(hereinafter called "Lessor") and CONTROL CONCEPTS, INC., a Pennsylvania
corporation (hereinafter called "Lessee").
WHEREAS, Lessor and Lessee were parties to a certain Lease Agreement dated
September 19, 1986 (as amended, the "Prior Lease"), with respect to the
Premises (as hereinafter defined); and
WHEREAS, all of the shares of Lessee are being acquired by
Xxxxx-Sundstrand Company pursuant to a Stock Purchase Agreement of even date
herewith (the "Stock Purchase Agreement"); and
WHEREAS, the Prior Lease has expired in accordance with its terms, and in
substitution therefore and as a condition of the Stock Purchase Agreement the
parties have agreed to enter into this Lease, the terms and conditions of which
shall hereinafter govern the leasing of the Premises by Lessee in all respects.
NOW THEREFORE, for and in consideration of the rents, covenants and
agreements herein contained, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. Premises. Lessor does hereby demise and let unto Lessee and Lessee does
hereby hire and lease from Lessor, for the term and upon the conditions and
covenants set forth herein, all that certain piece or parcel or land, together
with the buildings and improvements thereon, as more particularly described on
Exhibit "A" attached hereto and made a part hereof (the "Premises");
2. Term. The Lease shall be for a term commencing as of the date of this
Lease (the "Commencement Date") and expiring at midnight on February 28, 1999
unless sooner terminated as hereinafter provided (the "Initial Term"). Lessee
shall have the right to extend the term of this Lease for one additional period
of five (5) years (the "Extended Term") to begin immediately upon the expiration
of the Initial Term. Except as otherwise expressly provided herein, all of the
terms, covenants and provisions of this Lease shall apply to such Extended Term.
If Lessee shall elect to exercise the aforesaid option, it shall do so by giving
Lessor notice in writing of its intention to do so not later than twelve (12)
months prior to the expiration of the Initial Term. If Lessee gives such notice,
the extension of this Lease shall be automatically effected without the
execution of any additional documents. The Initial Term and the Extended Term
are hereinafter collectively called the "Term".
3. Minimum Rent. During the Initial Term, Lessee shall pay to Lessor as
minimum rent the sum of Five Hundred Thirty-Four Thousand Dollars ($534,000)
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per annum payable in advance, without demand and without set-off (except as
hereinafter expressly provided), in equal monthly installments of Forty-Four
Thousand Five Hundred Dollars ($44,500) on the first day of each calendar month
during the Initial Term, provided that, for the first month of the term, the
minimum rent shall be apportioned pro rata on a per diem basis for the period
between the Commencement Date and the first day of the following calendar month
and such apportioned sum shall be paid on such Commencement Date.
During the Extended Term, Lessee shall continue to pay Lessor the minimum
rent in accordance with the preceding paragraph, but the minimum rent payable
during each year of the Extended Term shall be the greater of: (a) the minimum
rent per annum during the Initial Term; or (b) the minimum rent per annum during
the Initial Term multiplied by a fraction, the numerator of which is the United
States Bureau of Labor Statistics Consumer Price Index for All Urban Customers
for The Philadelphia Region (the "CPI") for December 31, 1998, and the
denominator of which is the CPI for December 31, 1993.
If the minimum rent cannot be adjusted as provided at the commencement of
the Extended Term because the relevant CPI has not yet been released, Lessee
shall pay rent at the then existing minimum rent level pending such adjustment.
Upon publication of the relevant CPI, the minimum rent shall be increased
effective as of the commencement of the Extended Term and Lessee shall
immediately pay Lessor the increase in minimum rent for the period commencing on
the commencement of the Extended Term and ending on the last day of the month of
the date of publication of the relevant CPI.
4. Taxes and Other Impositions.
(a) Payment. In addition to the minimum rent referred to above,
Lessee shall pay throughout the term hereof, as additional rent hereunder, at
least thirty (30) days before any fine, penalty, interest or cost may be added
thereto for the non-payment thereof (or sooner if elsewhere herein required),
all levies, taxes, assessments, water and sewer rents and charges, liens,
license and permit fees, charges for public utilities and all other charges,
imposts or burdens of whatsoever kind and nature, whether or not particularized
by name, and whether general or special, ordinary or extraordinary, foreseen or
unforeseen, which at any time during the term of this Lease may be created,
levied, assessed, confirmed, adjudged, imposed or charged upon or with respect
to the Premises or any improvements made thereto, or on any part of the
foregoing or any appurtenances thereto, or directly upon this Lease or the rent
payable hereunder or amounts payable by any subtenants or other occupants of the
Premises, or upon this transaction or any documents to which Lessee is a party
or successor in interest, or against Lessor because of Lessor's estate or
interest herein, by any federal, state, municipal or other authority, or under
any law, ordinance or regulation of any such authority, including, among others,
all special tax bills and general, special or other
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assessments and liens or charges made on local or general improvements or under
any governmental or public power or authority whatsoever (all of which are
hereinafter referred to as "impositions"); provided, however, if any imposition
shall be created, levied, assessed, adjudged, imposed, charged or become a lien
with respect to a period of time which commences before or ends after the
commencement and expiration dates, respectively, of the term of this Lease
(other than by reason of breach of any of the terms hereof by Lessee), then
Lessee shall only be required to pay that proportion of such imposition which is
equal to the proportion of said period which falls within the term of this Lease
and/or any period during which Lessee owns the Premises, and Lessor shall be
obligated to pay the balance thereof; and provided further that as of the date
hereof Lessor has received no notice of and has no actual knowledge of any
impositions which are presently due or overdue and which remain unpaid, or which
may hereinafter be due or imposed upon the Premises, other than general ad
valorem real estate taxes. Lessor and Lessee shall be permitted to pay (to the
extent permitted by the assessing and collecting authorities) and may elect to
pay any assessment in installments, and to the extent such installment payments
represent a customary deferral of the obligation over a period of time (as
provided for in the preceding sentence), Lessee shall be obligated to make all
such installment payments attributable to periods within the term of this Lease
(or within any period of Lessee's ownership of the Premises), and Lessor shall
be obligated to pay the balance thereof. Nothing herein contained shall require
Lessee to pay any income or excess profits taxes assessed against Lessor, or any
corporation capital stock and franchise taxes imposed upon Lessor.
(b) Contest. Lessee shall furnish Lessor, no later than ten (10)
days prior to the last day upon which they may be paid without any fine, penalty
or interest, evidence satisfactory to Lessor of the payment of all impositions.
Lessee may, without postponement of payment, bring proceedings for contesting
the validity or amount of any imposition, or to recover payments therefor, and
Lessee agrees to save Lessor harmless from all costs and expenses in connection
therewith. Lessor shall cooperate with Lessee with respect to such proceedings
to the extent reasonably necessary, but all costs, fees and expenses incurred in
connection with such proceedings shall be borne by Lessee. Lessee will give
Lessor written advance notice of Lessee's intention to make any such contest.
5. Insurance.
(a) Types. Lessee, at Lessee's sole cost and expense, shall maintain
and keep in effect throughout the term:
i. insurance against loss or damage to the building and all
other improvements now or thereafter located on the demised land by fire and
such other casualties as may be included in "all risk" insurance from time to
time available as reasonably specified by Lessor, in an amount equal to the full
insurable
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replacement value of such building and improvements, and with a deductible not
to exceed $15,000;
ii. insurance against claims for personal injury (including
death) or property damage, under a policy of general public liability insurance,
with such limits as may be reasonably requested by Lessor from time to time, but
not less than $1,000,000 in respect of bodily injury (including death) and
$1,000,000 for property damage or in such other amounts as reasonably specified
by Lessor;
iii. nothing contained in this Section 5(a) shall be deemed to
prevent Lessee from providing the foregoing insurance coverage through "blanket"
policies covering other properties of Lessee or any affiliate of Lessee,
provided the same are reasonably satisfactory to Lessor.
(b) Insured Parties. The policies of insurance described in Section
(a)i. above shall name Lessor and Lessee as the insured parties, and in addition
shall contain a standard mortgagee endorsement in favor of the holder of any
mortgage which may at any time be a lien upon the Premises or any part thereof.
The policies of the insurance described in subsection (a)ii. above shall name
Lessor, Lessee (and, if requested by Lessor, the holder of any mortgage
("Mortgagees") as the insured parties.
(c) Insurers; Replacement. Each policy shall provide that it shall
not be cancelable without at least ten (10) days' prior written notice to Lessor
(and, if requested by Lessor, the Mortgagees). Forthwith upon the execution of
this Lease, each policy shall be delivered by Lessee to Lessor unless Lessor
requests that it be delivered to one of the Mortgagees, in which case Lessee
shall deliver the policy to such holder and shall deliver to Lessor and any
other Mortgagees a certificate of the insurance carrier certifying that the
policy so delivered has been issued and is in effect and the duration thereof.
At least ten (10) days before any policy shall expire, Lessee shall deliver to
Lessor a replacement policy or certificate. If available, each policy shall have
attached thereto an endorsement to the effect that no act or omission of Lessee
shall affect the obligation of the insurer to pay the full amount of any loss
sustained. Each policy shall be in such form as Lessor may from time to time
reasonably require.
(d) Payment. If Lessee shall fail, refuse or neglect to obtain such
insurance or maintain it, Lessor shall have the right, at Lessor's option, to
purchase such insurance and to pay the premiums thereon or to pay the premiums
on insurance which Lessee should have paid for. All such payments made by Lessor
shall be recoverable by Lessor from Lessee on demand as additional rent
hereunder together with interest, at the rate of six percent (6%) per annum if
Lessee is an individual, partnership or joint venture and at the rate of twelve
percent (12%) per annum if Lessee is a corporation, from the respective dates of
Lessor's making of the payments.
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(e) Uninsured Loss. If Lessee fails to provide and keep in force
insurance as aforesaid, Lessor shall not be limited in the proof of any damages
which Lessor may claim against Lessee to the amount of the insurance premium or
premiums not paid or incurred and which would have been payable upon such
insurance; but Lessor shall also be entitled to recover as damages for such
breach the uninsured amount of any loss, to the extent of any deficiency in the
insurance required by the provisions of this Lease, and damages, expenses of
suit and costs, including without limitation reasonable cancellation fees,
suffered or incurred during any period when Lessee shall have failed or
neglected to provide insurance as aforesaid.
(f) Other Insurance Obtained by Lessee. Lessee shall not take out
separate insurance concurrent in form or contributing, in the event of loss,
with that required to be furnished by Lessee, or increase the amounts of any
then existing insurance by securing an additional policy or additional policies,
without including Lessor and, if requested by Lessor, the Mortgagees as an
insured party.
(g) Waiver of Subrogation; Rights under Insurance Policies. Each of
the parties hereto hereby releases the other, to the extent of each party's
insurance coverage, from any and all liability for any loss or damage which may
be inflicted upon the property of such party even if such loss or damage shall
be brought about by the fault or negligence of the other party, its agents or
employees; provided, however, that this release shall be effective only with
respect to loss or damage occurring during such time as the appropriate policy
of insurance shall contain a clause to the effect that this release shall not
affect said policy or the right of the insured to recover thereunder. If any
policy does not permit such a waiver, and if the party to benefit therefrom
requests that such a waiver be obtained, the other party agrees to obtain an
endorsement to its insurance policies permitting such waiver of subrogation if
it is available and if such policies do not provide therefor. If an additional
premium is charged for such waiver, the party benefitting therefrom, if it
desires to have the waiver, agrees to pay the other the amount of such
additional premium promptly upon being billed therefor.
6. Lessee's Fixtures. Lessee shall have the right to install trade
fixtures required by Lessee or used by it in its business and, if installed by
Lessee, to remove any or all such trade fixtures from time to time during and
upon termination of this Lease, provided, however, that Lessee shall repair and
restore any damage or injury to the Premises caused by the installation and/or
removal of any such trade fixtures. The parties acknowledge that all
manufacturing and processing equipment and other personal property and trade
fixtures presently located on or installed in the Premises, other than central
heating, cooling, and ventilation systems and the electrical system to the point
of the master distribution panel, are Lessee's property.
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7. Signs. Lessee may to the extent and manner allowed by law or public
regulation place, erect, maintain, or paint signs upon the Premises provided
that they are maintained by Lessee in good condition during the term hereof, and
Lessee shall remove all signs at the termination of this Lease, repairing any
damage caused by the installation and/or removal thereof.
8. Care, Improvement and Restoration of the Premises.
(a) Maintenance and Repair. Lessor agrees that it shall, at its sole
cost and expense, cause those "punch list" items shown on Exhibit "B" attached
hereto and made a part hereof, to be repaired and/or replaced within 180 days of
the Commencement Date. Lessee shall, throughout the term of this Lease and at
its sole cost and expense, take such care of the building and the other
improvements now or hereafter located upon the demised land, and any sidewalks,
parking areas, curbs and access ways upon or adjoining the Premises, and keep
them in at least as good order and condition as they now are and otherwise in an
order and condition as is sufficient for their intended use and promptly at
Lessee's own cost and expense make all repairs necessary to maintain such order
and condition, whether such repairs be interior or exterior, structural or
nonstructural, ordinary or extraordinary, foreseen or unforeseen. When used in
this Lease, the term "repairs" shall include replacements and renewals when
necessary to maintain such building and other improvements in the prescribed
order and condition, and all such repairs made by Lessee shall be at least equal
in quality and usefulness to the building and such other improvements as may
from time to time be located upon the demised land. Lessee shall keep and
maintain all portions of the Premises and any sidewalks, parking areas, curbs
and access ways adjoining them in a clean and orderly condition, free of
accumulation of dirt, rubbish, snow and ice. Lessor agrees, to the extent
permitted by the terms thereof, to make available to Lessee the benefit of any
third party warranty or guarantee held by Lessor which may cover any of the
foregoing repairs.
(b) Major Repairs. Notwithstanding the foregoing, if the useful life
of any repairs to be performed by Lessee under this Lease would extend beyond
the end of the lease term, then with respect to any such item or items the cost
of which (after deducting any insurance proceeds available with respect thereto)
would exceed $50,000, Lessor shall promptly reimburse Lessee for Lessor's share
of the excess cost of such repairs, to the extent hereinafter provided. Lessor's
share shall equal the unamortized balance of the excess cost which would remain
as of the end of the lease term after amortizing the excess cost on a
straight-line basis over the useful life of such repairs. As a condition to
Lessor's obligation to contribute to the excess cost of repairs, Lessee agrees
that it shall not undertake any such repairs without first submitting a proposal
to Lessor, which shall include an estimate of costs and of Lessor's share
thereof. Lessor shall have no obligation to share in the cost of any repairs
undertaken without its prior written consent.
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(c) Alterations. Lessee shall not, without on each occasion first
obtaining Lessor's prior written consent (which consent shall not be
unreasonably withheld), make or permit to be made any alterations, improvements
or additions to the Premises; except that Lessee may, without the consent of
Lessor, make minor alterations and improvements to the interior of the building
on the demised land provided that they do not impair the structural strength of
the building or reduce its value, and provided further that Lessee shall take or
cause to be taken all steps that are required or permitted by law in order to
avoid the imposition of any mechanics' liens upon the Premises, and provided
further that the occupants of any adjoining real estate owned by Lessor are not
disturbed or annoyed by reason thereof. Except as otherwise provided in Section
6 (Lessee's Fixtures), all alterations, improvements, additions, repairs and all
other property attached to or used in connection with the building or any part
thereof made or installed on the Premises by or on behalf of Lessee shall
immediately upon completion or installation thereof be and become part of the
Premises and the property of Lessor without payment therefor by Lessor and shall
be surrendered to Lessor upon the expiration or earlier termination of the term
of this Lease.
(d) Restoration of Fire Damage. If the building or other
improvements on the demised land shall be damaged or destroyed by fire or other
casualty, Lessee, at Lessee's sole cost and expense, shall promptly and
diligently proceed to repair, rebuild or replace such building and other
improvements, so as to restore the Premises to the condition in which they were
immediately prior to such damage or destruction. The net proceeds of any
insurance recovered by reason of such damage or destruction in excess of the
cost of adjusting the insurance claim and collecting the insurance proceeds
(such excess being hereinafter called the "net insurance proceeds") shall be
held in trust by Lessor or, if requested by Lessor, any of the Mortgagees and
released for the purpose of paying the fair and reasonable cost of restoring
such building and other improvements. Such net insurance proceeds shall be
released from time to time as the work progresses to Lessee or to Lessee's
contractors. Prior to the commencement of the work, Lessee shall deliver to
Lessor reasonable proof that such net insurance proceeds are adequate to pay the
cost of such restoration. If such net insurance proceeds are not adequate,
Lessee shall pay, out of funds other than such net insurance proceeds and shall
furnish proof to Lessor of the payment of such excess for work performed before
Lessor or any such Mortgagee shall release any part of such net insurance
proceeds. If such net insurance proceeds are more than adequate, the amount by
which such net insurance proceeds exceed the cost of restoration (the "Excess
Proceeds") will be retained by Lessor or at Lessor's request, applied to
repayment of any mortgage secured by the Premises; provided, however, that if
Lessee is able to demonstrate to Lessor's reasonable satisfaction that the
quality of the restoration equals or exceeds the quality of the Premises as
constructed prior to the destruction or damage, and that the payment of the
Excess Proceeds does not otherwise reflect compensation for any diminution in
the value of the Premises as restored, then, subject to the prior written
consent
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of the Mortgagees, Lessee shall be entitled to receive one-half of the Excess
Proceeds. If more than fifty percent (50%) of the building located on the
Premises (measured in terms of value immediately prior to and immediately
following the destruction) shall be destroyed or damaged by fire or other
casualty, and if the unexpired portion of the term of this Lease shall be two
(2) years or less at the date of the damage, then Lessee may, by giving written
notice within forty-five (45) days after such occurrence, elect to terminate
this Lease, in which case Lessor shall be entitled to the net insurance
proceeds.
9. Lessor's Right of Entry. Lessee agrees to permit Lessor and the
authorized representatives of Lessor and any of the Mortgagees or any
prospective mortgagee to enter the Premises at all reasonable times for the
purpose of inspecting them and making any necessary repairs thereto and
performing any work therein that may be necessary by reason of Lessee's failure
to make such repairs or perform any such work required of Lessee under this
Lease; provided that, if reasonable under the circumstances, Lessor shall give
Lessee prior written notice of its intent so to enter. Nothing herein shall
imply any duty upon the part of Lessor to do any such work which under any
provision of this Lease Lessee may be required to perform and the performance
thereof by Lessor shall not constitute a waiver of Lessee's default in failing
to perform it. During the progress of any work in the Premises Lessor may keep
and store in the Premises all necessary materials, tools and equipment. Lessor
shall not in any event be liable for inconvenience, annoyance, disturbance or
other damage to Lessee by reason of making such repairs or the performance of
such work in the Premises or on account of bringing materials, supplies and
equipment into or through the Premises during the course thereof and the
obligations of Lessee under this Lease shall not thereby be affected in any
matter whatsoever, and the cost of each of such repairs or the performance of
such work shall be payable by Lessee to Lessor pursuant to and in accordance
with Section 24 hereof (Curing Lessee's Defaults). Lessor also shall have the
right to enter the Premises at all reasonable times to exhibit the Premises to
any prospective purchaser, tenant and/or mortgagee thereof.
10. Non-Abatement of Rent. It is understood and agreed that, except
as expressly provided in this Lease, damage to or destruction of all or any
portion of the Premises by fire or by any other cause shall not terminate this
Lease nor entitle Lessee to surrender the Premises nor in any way affect
Lessee's obligation to pay the minimum rent, additional rent and other sums
payable hereunder, and, except as expressly provided in this Lease, there shall
be no abatement, diminution or reduction of the minimum rent, additional rent or
other sums payable hereunder for any cause whatsoever.
11. Net Lease. It is the intention of the parties hereto that this
Lease is a "triple net lease" and that Lessor shall receive the minimum rent
hereinabove provided as net income from the Premises, not diminished by (a) any
imposition of any public authority of any nature whatsoever during the entire
term
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of this Lease notwithstanding any changes in the method of taxation or raising,
levying or assessing any imposition, or any changes in the name of any
imposition, or (b) any expenses or charges required to be paid to maintain and
carry the Premises or to continue the ownership of Lessor, other than payments
under any mortgage now existing or hereafter created by Lessor, and any income
or excess profits taxes assessed against Lessor, and any corporation capital
stock and franchise taxes imposed upon Lessor, and except as otherwise expressly
provided in this Lease.
12. Utility Charges. Lessee shall be solely responsible for and
shall promptly pay all rents and charges for water and sewer services and all
costs and charges for gas, steam, heat, light, electricity, power, telephone and
any other utility or service used or consumed in or servicing the Premises and
all other costs and expenses involved in the care, management and use thereof.
13. No Services by Lessor. It is expressly agreed that Lessor is not
and shall not be required to render any services of any kind to Lessee, except
as expressly provided in this Lease.
14. Governmental Regulations. The term "Legal Requirements" means
all laws and ordinances and notices, orders, rules, regulations and requirements
of all federal, state and local governments and appropriate departments,
commissions, boards and officers thereof, and notices, orders, rules and
regulations of the National Board of Fire Underwriters, or any other body now or
hereafter constituted exercising similar functions, relating to all or any part
of the Premises, exterior as well as interior, foreseen or unforeseen, ordinary
as well as extraordinary, structural as well as non-structural, or to the use or
manner of use of the Premises or the sidewalks, parking areas, curbs and access
ways adjoining the Premises. Lessor shall at its expense comply with and be
responsible for all Legal Requirements relating to or arising out of the use of
the Premises by Lessor, Lessor's prior occupants or lessees, or any prior owner
or operator of the Premises and all Legal Requirements enacted before the
commencement date of the Term requiring any repairs to the Premises. Lessee
shall at its expense comply with and be responsible for all Legal Requirements
relating to or arising out of Lessee's use of the Premises during the Term
requiring any repairs to the Premises, provided that, if the useful life of any
major repairs to be performed by Lessee hereunder would extend beyond the end of
the Term, Lessor shall reimburse Lessee for Lessor's share of the cost of such
repairs, to the extent provided for with respect to major repairs under Section
8(b). Without limiting the generality of the foregoing, Lessee shall keep in
force at all times all licenses, consents and permits necessary for the lawful
use of the Premises for the purpose herein provided and Lessee shall pay all
personal property taxes which are or may be assessed, levied or imposed upon
Lessee in connection with Lessee's use and occupancy of the Premises or the
operation of its business upon the Premises. Lessee shall likewise observe and
comply with the requirements of all policies of
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public liability, fire and other policies of insurance at any time in force with
respect to the Premises. Lessee's obligations with respect to costs attributable
to the Term, as hereinbefore provided, shall survive termination of the Lease.
Notwithstanding anything to the contrary in this Section 14 or elsewhere in this
Lease, Lessor's liability with respect to Environmental Laws shall be governed
by and subject to the limitations provided in Sections 27(i) and 27(j) of this
Lease.
15. Use of Premises. The Premises may be used and occupied by Lessee for
the conduct of its business, including office, warehouse, manufacturing and for
any other lawful purpose which complies with applicable zoning ordinances and
private restrictions (the "Permitted Uses").
16. Mechanic's Liens, etc.
(a) No Liens. Lessee will not create or permit to be created or
remain, and will discharge, any lien, encumbrance or charge (levied on account
of any imposition or any mechanic's, laborer's or materialman's lien) which
might be or become a lien, encumbrance or charge upon the Premises or any part
thereof or the income therefrom, having any priority or preference over or
ranking on a parity with the estate, rights and interest of Lessor in the
Premises or any part thereof or the income therefrom, and Lessee will not suffer
any other matter or thing whereby the estate, rights and interest of Lessor in
the Premises and any part thereof might be impaired; provided that any
mechanic's, laborer's or materialman's lien may be discharged in accordance with
subsection (b) of this Section.
(b) Discharge of Liens. If any mechanic's, laborer's or
materialman's lien shall at any time be filed against the Premises or any part
thereof, Lessee, within fifteen (15) days after notice of the filing thereof,
will cause it to be discharged of record by payment, deposit, bond, order of the
court of competent jurisdiction or otherwise. If Lessee shall fail to cause such
lien to be discharged within the period aforesaid, then in addition to any other
right or remedy, Lessor may, but shall not be obligated to, discharge it either
by paying the amount claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings, and in any such event, Lessor shall
be entitled, if Lessor so elects, to compel the prosecution of any action for
the foreclosure of such lien by the lienor and to pay the amount of the
judgment in favor of the lienor with interest, costs and allowances. Any amount
so paid by Lessor and all costs and expenses incurred by Lessor in connection
therewith, together with interest thereon, at the rate of six percent (6%) per
annum if Lessee is an individual, partnership or joint venture and at the rate
of twelve percent (12%) per annum if Lessee is a corporation, from the
respective dates of Lessor's making of the payments and incurring of the costs
and expenses, shall constitute additional rent payable by Lessee under this
Lease and shall be paid by Lessee to Lessor on demand.
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(c) Waiver of Liens. Notwithstanding anything to the contrary set
forth in this Section, prior to the making of any alterations, additions or
improvements to the Premises, Lessee shall cause to be filed in the Office of
the Prothonotary of the County in which the Premises are located a Waiver of
Mechanics' and Materialmen's Liens in form reasonably satisfactory to Lessor's
counsel, such waivers to be binding on all subcontractors and materialmen.
(d) No Consent of Lessor Intended. Nothing in this Lease contained
shall be deemed or construed in any way as constituting the consent or request
of Lessor, express or implied by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for the performance of any labor or the
furnishing of any materials for any specific alteration, addition, improvement
or repair to the Premises or any part thereof, nor as giving Lessee any right,
power or authority to contract for or permit the rendering of any services or
the furnishing of any materials that would give rise to the filing of any lien
against the Premises or any part thereof.
17. Indemnification.
(a) Indemnification of Lessor. Lessee agrees to indemnify and save
harmless Lessor and any Mortgagee from and against any and all claims by or on
behalf of any person or persons, firm or firms, corporation or corporations,
arising from the occupancy, conduct, operation or management of the Premises or
from any work or thing whatsoever now or hereafter done or which was not done by
Lessee in or on the Premises, or arising from any breach or default on the part
of Lessee in the performance of any covenant or agreement on the part of Lessee
to be performed pursuant to the terms of this Lease, or under the law, arising
from any act, neglect or negligence of Lessee, or any of its agents,
contractors, servants, employees, or licensees, or arising from any accident,
injury or damage whatsoever caused by any person, firm or corporation other than
Lessor or Lessor's agents, contractors, servants, employees, or licensees,
occurring during the term of this Lease, in or about the Premises, and from and
against all costs, expenses and liabilities incurred in connection with any such
claim or action or proceeding brought thereon (including without limitation the
fees of attorneys, investigators and experts); and in case any action or
proceeding be brought against Lessor by reason of any such claim, Lessee upon
notice from Lessor covenants at Lessee's cost and expense to resist or defend
such action or proceeding or to cause it to be resisted or defended by an
insurer.
(b) Indemnification of Lessee. Lessor agrees to indemnify and save
harmless Lessee from and against any and all claims by or on behalf of any
person or persons, firm or firms, corporation or corporations, arising from any
work or thing whatsoever now or hereafter done or which was not done by Lessor
in or on the Premises, or arising from any breach or default on the part of
Lessor in the performance of any covenant or agreement on the part of Lessor to
be performed
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pursuant to the terms of this Lease, or under the law, arising from any
negligence of Lessor, or any of its agents, contractors, servants, employees, or
licensees, or arising from any accident, injury or damage whatsoever caused by
any person, firm or corporation occurring during any period prior to or after
the term of this Lease (not including any period after the term when Lessee owns
the Premises), in or about the Premises, and from and against all costs,
expenses and liabilities incurred in connection with any such claim or action or
proceeding brought thereon (including without limitation the fees of attorneys,
investigators and experts), but only to the extent Lessee has not waived such
claims pursuant to Section 18 hereof; and in case any action or proceeding be
brought against Lessee by reason of any such claim, Lessor upon notice from
Lessee covenants at Lessor's cost and expense to resist or defend such action or
proceeding or to cause it to be resisted or defended by an insurer. The
provisions of this Section 17(b) shall not apply to the Losses, as defined in
Section 27(j) of this Lease.
18. Waiver of Claims Against Lessor. Except to the extent that Lessor has
expressly assumed obligations under the terms of this Lease, Lessor and Lessor's
agents, servants, and employees shall not be liable for, and Lessee, to the full
extent it may do so, hereby releases and relieves Lessor, its agents, servants,
and employees for, all liability to Lessee in connection with any and all loss
of life, personal injury, damage to or loss of property, or loss or interruption
of business occurring to Lessee, its agents, servants, employees, invitees,
licensees, visitors, or any other person, firm, corporation or entity, in or
about or arising out of the Premises, from, without limitation, (a) any fire,
other casualty, accident, occurrence or condition in or upon the Premises; (b)
any defect in or failure of (i) plumbing, sprinkling, electrical, heating or air
conditioning systems or equipment, or any other systems and equipment of the
Premises, and (ii) the elevators, stairways, railings or walkways of the
building located on the Premises; (c) any steam, gas, oil, water, rain or snow
that may leak into, issue or flow from any part of the Premises from the drains,
pipes or plumbing, sewer or other installation of same, or from any other place
or quarter; (d) the breaking or disrepair of any installations and equipment;
(e) the falling of any fixture or wall or ceiling materials; (f) broken glass;
(g) latent or patent defects; (h) the exercise of any rights by Lessor under the
terms and conditions of this Lease unless in connection therewith Lessor acts in
a manner which constitutes negligence or willful or wanton misconduct; (i) any
acts or omissions of the other tenants or occupants of the building located on
the Premises or of nearby buildings; (j) any acts or omissions of other persons;
(k) any acts or omissions of Lessor, its agents, servants and employees unless
such acts or omissions constitute negligence or willful or wanton misconduct;
and (l) theft, Act of God, public enemy, injunction, riot, strike, insurrection,
war, court order, or any order of any governmental authorities having
jurisdiction over the Premises.
19. Quiet Enjoyment. Lessee, upon paying the minimum rent, additional rent
and other charges herein provided for and observing and keeping all
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covenants, agreements and conditions of this Lease on its part to be kept, shall
quietly have and enjoy the Premises during the term of this Lease without
entrance or molestation by anyone claiming by or through Lessor, subject,
however, to the exceptions, reservations and conditions of this Lease.
20. Condemnation.
(a) Condemnation of Entire Premises. Except as provided in
Subsection (b) of this Section, if all or any part of the Premises is taken or
condemned for a public or quasi-public use, this Lease shall terminate as of the
date title to the condemned real estate vests in the condemnor and the rent
herein reserved shall be apportioned and paid in full by Lessee to Lessor to
that date and all rent prepaid for periods beyond that date shall forthwith be
repaid by Lessor to Lessee and neither party shall thereafter have any liability
hereunder.
(b) Partial Condemnation. If any part of the Premises is taken or
condemned for a public or quasi-public use and Lessee's ability to conduct
business in the remaining part of the Premises (after restoration as hereinafter
provided) is not substantially diminished, Lessor shall restore the building and
other improvements upon the demised land to a condition and to a size as nearly
comparable as reasonably possible to the condition and size thereof immediately
prior to the taking provided the cost of the same as reasonably estimated by
Lessor does not exceed the amount of the condemnation award, or $2,000,000,
whichever is less, and there shall be an equitable abatement of the minimum rent
according to the value of the Premises before and after the taking. In the event
that the parties are unable to agree upon the amount of such abatement, either
party may submit the issue for arbitration pursuant to the rules then obtaining
of the American Arbitration Association and the determination or award rendered
by the arbitrator/s/ shall be final, conclusive and binding upon the party and
not subject to appeal, and judgment thereon may be entered in any court of
competent jurisdiction.
(c) Award. Lessee shall have the right to make a claim against the
condemnor for moving and related expenses which are payable to tenants under
Section 1-601A of the Eminent Domain Code of Pennsylvania. Except as aforesaid,
Lessee hereby waives all claims against Lessor and all claims against the
condemnor, and Lessee hereby assigns to Lessor all claims against the condemnor
including, without limitation, all claims for leasehold damages and diminution
in the value of Lessee's leasehold interest.
(d) Temporary Taking. If the condemnor 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, but the amounts payable by the condemnor with respect to any period of
time prior to
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the expiration or sooner termination of this Lease shall be paid by the
condemnor to Lessor and the condemnor shall be considered a subtenant of Lessee.
If the amounts payable hereunder by the condemnor are paid in monthly
installments, Lessor shall apply the amount of such installments, or as much
thereof as may be necessary for the purpose, toward the amount of rent due from
Lessee as rent for the period, and Lessee shall pay to Lessor any deficiency
between the monthly amount thus paid by the condemnor and the amount of the
rent, while Lessor shall pay over to Lessee any excess of the amount of the
award over the amount of the rent.
21. Assignment and Subletting. Lessee shall not assign, mortgage, pledge
or encumber this Lease, or sublet the whole or any part of the Premises, without
on each occasion first obtaining the prior written consent of Lessor, which
consent Lessor may not unreasonably withhold. In the event of any assignment of
this Lease made as aforesaid with Lessor's consent, Lessee shall, nevertheless,
remain liable for the performance of all of the terms, conditions and covenants
of this Lease and Lessee shall require and cause at the time of such assignment
any assignee to execute and deliver to Lessor an assumption of liability
agreement in form satisfactory to Lessor, including an assumption by the
assignee of all of the obligations of Lessee and the assignee's ratification of
and agreement to be bound by all of the provisions of this Lease.
Notwithstanding the provisions of this Section 21, Lessee may sublet or assign
this Lease, without the consent of Lessor, to any corporation or partnership
that controls or is controlled by, or is in under common control with Lessee, or
any corporation resulting from the merger or consolidation with Lessee, or to
any entity that acquires all of the assets as a going concern of the business
that is being conducted on the Premises, provided (i) Lessee gives Lessor at
least thirty (30) days prior written notice of any such assignment, and (ii)
such assignee's intended use of the Premises is substantially similar to
Lessee's then current use, and will not materially increase any environmental
hazards with respect to the Premises.
22. Subordination. This Lease shall be prior in right and shall not be
subordinate to any mortgages, deeds of trust or other encumbrances that may now
or hereafter be in existence against all or any part of the Premises; provided,
however, at the option of Lessor, Lessee shall subordinate this Lease to any
such encumbrance if Lessor provides the agreement (the "Nondisturbance
Agreement") of the holder of such encumbrance in the form of Exhibit "C"
attached as a part of this Lease. Lessee further agrees to execute and deliver
upon demand such further instrument or instruments evidencing such subordination
of this Lease to the lien of any such mortgage and/or other encumbrance and such
further instrument or instruments of attornment as shall be desired by any
mortgagee or proposed mortgagee or by any other person. Notwithstanding the
foregoing, any holder of any mortgage may at any time subordinate its mortgage
to this Lease, without Lessee's consent, by notice in writing to Lessee, and
thereupon this Lease shall be deemed prior to such mortgage without regard to
their respective dates of
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execution and delivery and in that event such mortgagee shall have the same
rights with respect to this Lease as though it had been executed prior to the
execution and deliver of the mortgage and had been assigned to such mortgagee.
23. Certificates. Lessee and Lessor each agrees at any time and from time
to time, within fifteen (15) days after written request of the other, to
execute, acknowledge and delivery to the other a written instrument in
recordable form certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that it is in full force and effect
as modified and stating the modifications), and the dates to which minimum rent,
additional rent and other charges have been paid in advance, if any, and stating
whether or not to the best knowledge of the signer of such certificate the other
party is in default in the performance of any covenant, agreement or condition
contained in the Lease and, if so, specifying each such default of which the
signer may have knowledge, it being intended that any such statement delivered
pursuant to this Section may be relied upon by a prospective purchaser of the
fee or any mortgagee thereof or any assignee of Lessor's or Lessee's interest in
this Lease or of any mortgage upon the fee of the Premises, or any part thereof.
24. Curing Lessee's Defaults. If Lessee shall be in default in the
performance of any of its obligations hereunder, Lessor may (but shall not be
obligated to do so), in addition to any other rights it may have in law or
equity, cure such default on behalf of Lessee, and Lessee shall reimburse Lessor
upon demand for any sums paid or costs incurred by Lessor in curing such
default, including interest at the rate of twelve percent (12%) per annum from
the respective dates of Lessor's making of the payments and incurring of the
costs, on all sums advanced by Lessor as aforesaid, which sums and costs
together with interest thereon shall be deemed additional rent payable
hereunder.
25. Notices; Payment of Rent. All notices, demands, requests, consents,
certificates and waivers from either party to the other shall be in writing and
shall be deemed to have been duly given if hand delivered against receipt or
sent by United States registered or certified mail return receipt requested,
postage prepaid, addressed to Lessor at 00 Xxx Xxx Xxxxx, Xxx Xxxx, Xxxxxxxxxxxx
00000, and addressed to Lessee at the Premises, with a copy to Xxxxx-Sundstrand
Company, 0000 Xxxx 00xx Xxxxxx, Xxxx, Xxxx 00000, Attention: Xxxxxxx X.
XxXxxxxx, or to such other address as the party to receive the notice, demand,
request, consent, certificate or waiver may hereafter designate by written
notice to the other. All payments of rent hereunder shall be made without any
right of set-offs whatsoever to Lessor at the address from time to time
designated as aforesaid for the giving of notice. All notices, demands,
requests, consents, certificates and waivers shall be deemed to have been given
when deposited in the United States mail as aforesaid.
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26. Adverse Possession. Lessee shall not suffer or permit the Premises or
any portion thereof to be used by the public, as such, without restriction or in
such manner as might reasonably tend to impair Lessor's title to the Premises or
in such manner as might reasonably make possible a claim or claims of adverse
usage or adverse possession by the public, as such or of implied dedication of
the Premises or any portion thereof.
27. Environmental Compliance. Without limiting the generality of any
provisions set forth elsewhere in this Lease, Lessee agrees as follows:
(a) Lessee shall not (either with or without negligence) cause or
permit the escape, disposal or release of any Hazardous Substances, as
hereinafter defined, on, in or under the Premises. Lessee shall not allow the
storage or use of such substances in any manner not sanctioned by law or by the
reasonable standards prevailing in the industry for the storage and use of such
substances, nor allow to be brought onto the Premises any such substances except
to use in the ordinary course of Lessee's business. Lessee covenants and agrees
that the Premises will, at all times during its use or occupancy thereof, be
kept and maintained so as to comply with all now existing or hereafter enacted
or issued statutes, laws, rules, ordinances, orders, permits and regulations of
all state, federal, local, and other governmental and regulatory authorities,
agencies and bodies applicable to the Premises, pertaining to environmental
matters, or regulating, prohibiting or otherwise having to do with Hazardous
Substances or asbestos and all other toxic, or hazardous, wastes (collectively
called "Environmental Laws"). Lessee agrees to clean up all spills and
discharges of Hazardous Substances on the Premises which occur during the Term,
in a manner which shall comply with all applicable Environmental Laws. Lessee
shall notify Lessor in writing of all such incidents.
(b) Lessee shall immediately deliver to Lessor a copy of any
summons, citation, directive, notice, complaint, letter or other communication
from any federal, state or local environmental agency, concerning any alleged
violations of any Environmental Laws or regulations on the Premises, or
concerning any investigation or request for information relating to the use,
generation, handling, treatment, storage or disposal of Hazardous Substances in
connection with the Premises.
(c) Upon request, Lessee shall cooperate in obtaining evidence of
compliance with any environmental law, regulation, order of any governmental
authority, which cooperation may include, without limitation, providing
affidavits, reports or responses to questions.
(d) Lessor and its engineers, technicians, and consultants
(collectively the "Auditors") may, at Lessor's sole cost and expense, and from
time to time as Lessor deems appropriate, conduct periodic tests and
examinations
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("Audits") of the Premises to confirm and monitor Lessee's compliance with the
Lease. Such Audits shall be conducted in such a manner as to minimize the
interference with Lessee's permitted activities on the Premises; however, in all
cases, the Audits shall be of such nature and scope as shall be reasonably
required by then existing technology to confirm Lessee's compliance with this
Lease. Lessee shall fully cooperate with Lessor and its Auditors in the conduct
of such Audits.
(e) Lessee shall indemnify, defend and hold Lessor, its partners,
affiliates, parents, officers, directors and employees, and other occupants of
the Premises (collectively, the "Indemnitees"), free, harmless and indemnified
from any expenses, penalties, fines, claims, demands, liabilities, costs,
personal injuries, property damage, actions and causes of action, suits, debts,
judgments, demands or charges whatsoever which the Indemnitees shall or may
incur, or which any such party would otherwise incur, by reason of Lessee's
failure to comply with Section 27 of this Lease.
(f) For the purposes of this Section, the Premises shall include the
real estate covered by this Lease; all improvements; all personal property used
in connection with the Premises (including that owned by Lessee); and the soil,
groundwater and surface water of the Premises.
(g) The covenants contained in this Section shall survive the
expiration or termination of this Lease, and shall continue for so long as
Lessor and its successors and assigns, and the Indemnitees, may be subject to
any expenses, obligations, penalties, fines, claims, demands, liabilities,
costs, personal injuries, property damage, actions and causes of action, suits,
debts, judgments, demands or charges whatsoever against which Lessee has agreed
to indemnify the Indemnitees under this Lease.
(h) All terms, except as otherwise defined herein, shall have the
meanings as set forth in the Lease. For purposes hereof, Hazardous Substances
shall mean:
i. any "Hazardous Substance," "Pollutant" or "Contaminant" (as
defined in Section 101(14) and (33) of the Comprehensive Environmental Response
and Compensation and Liability Act ("CERCLA"), 42 U.S.C.A. Section 9601(14) and
(33)) or 40 C.F.R. Part 302;
ii. any hazardous substance, hazardous waste or solid waste,
as those terms are defined in applicable state or local law;
iii. any substances containing petroleum as that term is
defined in Section 9001(8) of the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.A. Section 6991(8) or 40 C.F.R. 280.1; or
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iv. any other substance for which any governmental entity
requires special handling in its collection, storage, treatment or disposal.
(i) Lessor represents and warrants to Lessee as follows: except as
provided in Schedule 5(u) to the Stock Purchase Agreement, which is hereby
incorporated into this Lease as if it were a schedule hereto, the Premises are
not currently in violation of, and are not subject to any existing, pending or
threatened investigation or inquiry by any governmental authority or to any
remedial obligations under, any Environmental Laws, and this representation and
warranty would continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Premises; except as provided in
Schedule 5(u) to the Stock Purchase Agreement, (i) no hazardous substances,
pollutants, contaminants or solid wastes have been disposed of or otherwise
released in, on or under the Premises and (ii) all Hazardous Substances utilized
in connection with the Premises have been properly managed, transferred and
transported and disposed of; and, except as provided in Schedule 5(u) to the
Stock Purchase Agreement, all facilities of the Premises when operated under
normal conditions and at their maximum rated capacity, will not violate any
existing standard, or proposed standard as to which public notice has been
given, relating to the environment, including, without limitation, any such
standards relating to clean air, clean water or the treatment, storage or
disposal of hazardous or toxic substances, including, without limitation, any
constituent thereof.
(j) Subject to the terms and conditions of this Section 27(j),
notwithstanding the execution or the delivery of this Lease, and regardless of
any investigation at any time made by or on behalf of Tenant or of any
information Tenant may have in respect thereto, Lessor shall indemnify and save
and hold Tenant harmless from and against any damage, liability, loss,
deficiency, settlement, fees, penalties or expenses (including without
limitation, reasonable attorneys' fees and other reasonable costs and expenses
incident to any suit, action proceeding, demand, assessment, judgment, penalty,
or investigation or defense of any claim) (collectively "Losses") arising out of
or resulting from Losses relating to any of the matters referred to in Section
11(a)(ii) of the Stock Purchase Agreement, the provisions of which are hereby
incorporated by reference in this Section 27(j) as if they were set forth at
length herein, or the inaccuracy or breach of any representation or warranty set
forth in Section 27(i). Provided, however, that Lessor shall not be obligated to
indemnify Lessee until the aggregate amount of the Losses exceed $60,000 and the
Lessee's sole right of indemnification with respect to the Losses shall be to
offset such Losses against the rent payments due Lessor from Lessee under this
Lease.
28. Condition of Title and of Premises. Lessor represents and warrants
that Lessor is owner of the Premises free and clear of any claims, liens or
encumbrances except as set forth in Exhibit "D" attached as a part of this
Lease;
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that the Premises have direct and unencumbered access to Xxxxx Drive, which is a
publicly dedicated thoroughfare; that all public utilities necessary for the
operation of Lessee's current business activities are available at the Premises;
that the zoning laws, any private restrictions applicable to the Premises and
the physical condition of the Premises permit and are suitable for the operation
of Lessee's current business activities and related uses without unusual
requirements or undue burdens or risk; that Lessor will keep the Premises free
of any private restrictions which prohibit these uses; and that Lessor has good
and sufficient right to make this Lease for the term and upon the conditions
stated in this Lease.
29. Surrender. Lessee agrees at the expiration or earlier termination of
the term hereof promptly to yield up, reasonably neat, and in the same condition
of order and repair in which they are required to be kept throughout the term
hereof, the Premises and all improvements, alterations and additions thereto.
30. Defaults - Remedies. Subject to the provisions of section 31 hereof
(Grace Period and Notice of Default), in the event Lessee shall at any time be
in default in the payment of rent herein reserved, or of any other sum required
to be paid by Lessee under this Lease, or in the performance of or compliance
with any of the terms, covenants, conditions or provisions of this Lease, or if
Lessee shall be adjudicated a bankrupt, or shall make an assignment for the
benefit of creditors or shall file a xxxx in equity or otherwise initiate
proceedings in bankruptcy or for reorganization or an arrangement under any
federal or state law, or if any proceedings in bankruptcy or for the appointment
of a receiver shall be instituted by any creditor of Lessee under any state or
federal law, or if Lessee is levied upon and is about to be sold out upon the
Premises under execution or other legal process (the occurrence of any such
event to constitute an event of default and a breach under this Lease), then and
in addition to any other rights or remedies Lessor may have under this Lease or
at law or in equity, Lessor shall have the following rights:
(a) To re-enter the Premises and remove all persons and all or any
property therefrom, either by summary dispossess proceedings or any suitable
action or proceeding at law, and repossess and enjoy the Premises, together with
all additions, alterations and improvements. Upon recovering possession of the
Premises by reason of or based upon or arising out of a default on the part of
Lessee, Lessor may, at Lessor's option, either terminate this Lease or make such
alterations and repairs as may be necessary in order to relet the Premises and
relet the Premises or any part or parts thereof, either in Lessor's name or
otherwise, for a term or terms which may at Lessor's option be less than or
exceed the period which would otherwise have constituted the balance of the term
of this Lease and at such rent or rents and upon such other terms and
conditions, and to such person or persons as may be available through the
exercise of commercially reasonable efforts; upon each such reletting all rents
received by Lessor from such reletting shall be applied: first, to the payment
of any indebtedness other than rent
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due hereunder from Lessee to Lessor; second, to the payment of any costs and
expenses of such reletting, including brokerage fees and attorney's fees and all
costs of such alterations and repairs; third, to the payment of "rent" (which
shall be deemed to include, without limitation, all charges, payments, costs and
expenses herein agreed to be paid by Lessee) due and unpaid hereunder; and the
residue, if any, shall be held by Lessor and applied in payment of future rent
as it may become due and payable hereunder. If such rental is to a person or
entity controlling or controlled by Lessor at a rate that is less than market
rate, then the Lessor shall be deemed to have received rent equal to the market
rate. If such rentals received from such reletting during any month shall be
less than that to be paid during that month by Lessee hereunder, Lessee shall
pay any such deficiency to Lessor. Such deficiency shall be calculated and paid
monthly, or at the option of the Lessor, the total of all projected monthly
deficiencies, through the entire unexpired balance of the term of this Lease,
shall be accelerated and shall be deemed due and payable immediately by Lessee
as if, by the terms and provisions of this Lease, such accelerated rent and
other charges, payments, costs and expenses were on that date payable in
advance. No such re-entry or taking possession of the Premises or the making of
alterations and/or improvements thereto or the reletting thereof shall be
construed as an election on the part of Lessor to terminate this Lease unless
written notice of such intention be given to Lessee. Lessor shall in no event be
liable in any way whatsoever for failure to relet the Premises or, in the event
that the Premises or any part or parts thereof are relet, for failure to collect
the rent thereof under such reletting. Lessee, for Lessee and Lessee's
successors and assigns, hereby irrevocably constitutes and appoints Lessor
Lessee's and their agent to collect the rents due and to become due under all
subleases of the Premises or any parts thereof without in any way affecting
Lessee's obligation to pay any unpaid balance of rent due or to become due
hereunder. Notwithstanding any such reletting without termination, Lessor may at
any time thereafter elect to terminate this lease for such previous breach.
(b) If, after using its reasonable efforts for a commercially
reasonable time, Lessor is unable to relet the Premises to a suitable tenant
after taking possession of the Premises in accordance with the foregoing Section
30(a), Lessor may, at its option, accelerate the whole or any part of the rent
for the entire unexpired balance of the term of this Lease, as well as all other
charges, payments, costs and expenses herein agreed to be paid by Lessee, and
any rent or other charges, payments, costs and expenses if so accelerated shall,
in addition to any and all installments of rent already due and payable and in
arrears, and/or other charge or payment herein reserved, included or agreed to
be treated or collected as rent and/or any other charge, expense or costs herein
agreed to be paid by Lessee which may be due and payable and in arrears, be
deemed due and payable immediately as if, by the terms and provisions of this
Lease, such accelerated rent and other charges, payments, costs and expenses
were on that date payable in advance.
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(c) If, at any time or from time to time after Lessee's payment of
accelerated rent in accordance with the provisions of either Section 30(a) or
30(b) above, it is determined that the projected rental deficiency upon which
such accelerated payment was based was incorrect in any material respect, either
because Lessor was subsequently able to relet the Premises for some portion of
the unexpired term, or because Lessor's new tenant failed to pay the rental
projected to be paid for any reason, then the accelerated rent shall be
redetermined, and if there was a deficiency therein Lessee shall pay such
further amount to Lessor, and if there was an overpayment, Lessor shall
reimburse Lessee to the extent of the overpayment, provided that Lessor shall be
entitled to offset against that amount the costs of collection thereof
(including reasonable attorney's fees).
(d) No right or remedy herein conferred upon or reserved to Lessor
is intended to be exclusive of any other right or remedy herein or by law
provided but each shall be cumulative and in addition to every other right or
remedy given herein or now or hereafter existing at law or in equity or by
statute.
(e) No waiver by Lessor of any breach by Lessee of any of Lessee's
obligations, agreements or covenants herein shall be a waiver of any subsequent
breach or of any obligation, agreement or covenant, nor shall any forbearance by
landlord to seek a remedy for any breach by Lessee be a waiver by Lessor of any
rights and remedies with respect to such or any subsequent breach.
31. Grace Period and Notice of Default. Notwithstanding anything
hereinabove stated, Lessor agrees that Lessor will not exercise any right or
remedy provided for in this Lease or allowed by law because of any default of
Lessee, unless Lessor shall have first given written notice thereof to Lessee,
and Lessee, within a period of fifteen (15) days thereafter shall have failed to
pay money, or if the default consists of something other than the failure to pay
money, Lessee shall have failed, within thirty (30) days thereafter to begin the
correction of the default or fails to fully correct the default within ninety
(90) days thereafter; provided, however, that no such notice from Lessor shall
be required nor shall Lessor be required to allow any part of the said notice
period if Lessee shall have filed a petition in bankruptcy or for reorganization
or a xxxx in equity or otherwise initiated proceedings for the appointment of a
receiver of Lessee's assets, or if a receiver or trustee is appointed for Lessee
and such appointment and such receivership or trusteeship is not terminated
within ninety (90) days, or if Lessee makes an assignment for the benefit of
creditors or if Lessee is levied upon and is about to be sold out upon the
Premises by any sheriff, marshal or constable.
32. Lessor's Waiver. At the request of Lessee, Lessor shall execute, in
form reasonably acceptable to Lessor, subordination of Lessor's lien in favor of
any bona fide third party financial institution which supplies funds for the
purchase of furniture, inventory or equipment used in the demised premises
(whether by
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lease or by loan) or a bona fide third party supplier of furniture, inventory or
equipment used in the demised premises who leases the same pursuant to a bona
fide lease or retains a security interest.
33. Brokers. Lessee represents and warrants to Lessor that Lessee has had
no dealings, negotiations or consultations with respect to the Premises or this
transaction with any broker or finder and that no broker or finder called the
Premises to Lessee's attention for lease or took any part in any dealings,
negotiations or consultations with respect to the Premises or this Lease, except
as otherwise disclosed to Lessor in writing prior to the execution hereof. In
the event that any broker or finder claims to have submitted the Premises to
Lessee, to have induced Lessee to lease the Premises or to have taken part in
any dealings, negotiations or consultations with respect to the Premises or this
Lease, Lessee will be responsible for and will indemnify and save Lessor
harmless from and against all costs, fees (including, without limitation,
attorney's fees), expenses, liabilities and claims incurred or suffered by
Lessor as a result thereof.
34. Captions. The captions in this Lease are for convenience only and are
not a part of this Lease and do not in any way define, limit, describe or
amplify the terms and provisions of this Lease or the scope or intent thereof.
35. Entire Agreement; Interpretation. This Lease represents the entire
agreement between the parties hereto with respect to the subject matter hereof,
and without limiting the foregoing is intended to supersede the Prior Lease, and
there are no collateral or oral agreements or understandings. This Lease shall
not be modified in any manner except by an instrument in writing executed by the
parties. The masculine (or neuter) pronoun and singular number shall include
the masculine, feminine and neuter genders and the singular and plural number.
36. Definition of "Lessor". The word "Lessor" is used herein to include
the Lessor named above and any subsequent owner of the Premises, as well as
their respective heirs, personal representatives, successors and assigns, each
of whom shall have the same rights, remedies, powers, authorities and privileges
as he would have had had he originally signed this Lease as Lessor, including
the right to proceed in his own name to enter judgment against Lessee.
37. Definition of "Lessee". The word "Lessee" is used herein to include
each and every person named above as Lessee as well as their heirs, personal
representatives, successors and assigns, each of whom shall be under the same
obligations, liabilities and disabilities and have only such rights, privileges
and powers as he would have possessed had he originally signed this Lease as
Lessee. Each and every of the persons named above as Lessee shall be bound
jointly and severally by the terms, covenants and agreements contained herein.
Any notice required or permitted by the terms of this Lease may be given by or
to any one of
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the persons named above as Lessee, and shall have the same force and effect as
if given by or to all thereof.
38. Option to Purchase. Lessor hereby grants to Lessee, upon and subject
to the terms and conditions hereinafter set forth, an option (the "Option") to
purchase the Premises at any time on or before February 28, 1999 (the "Option
Expiration Date"). If the Option is exercised as hereinafter provided, the
purchase price for the Premises shall be the fair market value of the Premises
as of the Closing (as hereinafter defined), but with appropriate adjustments to
account for any deficiencies in the condition of the Premises resulting from any
breach by Lessee of the terms of this Lease. Such adjusted fair market value
shall be determined by mutual agreement of Lessor and Lessee, or if the parties
are unable to agree on such fair market value within sixty (60) days of the
effective date of Lessee's exercise of the Option, then by a recognized and
qualified independent appraiser chosen by agreement of the parties, who shall be
experienced in evaluating properties similar to the Premises (a "Qualified
Appraiser"). If following expiration of the foregoing sixty (60) day period the
parties are unable to agree on a mutually acceptable Qualified Appraiser within
an additional thirty (30) days, then within ten (10) days thereafter each shall
nominate one (1) Qualified Appraiser, and those nominees shall together select a
third Qualified Appraiser within twenty (20) days following their selection,
which Qualified Appraiser shall thereupon conduct the appraisal and determine
the purchase price within sixty (60) days. Except as otherwise provided herein,
each party shall pay the fees of its own Qualified Appraiser, and one-half (1/2)
the fees of the third Qualified Appraiser. Subject to the limitations
hereinafter provided, the Option may be exercised by Lessee at any time during
the option period, provided further that Lessee shall have given Lessor at least
twelve (12) months, prior written notice of its intent to so exercise, as
provided in Section 25, which notice shall include a statement of the proposed
purchase price.
If this purchase option is exercised as aforesaid, the purchase of
the Premises shall be upon terms and conditions customary to such transactions,
including without limitation the following conditions and provisions:
(a) If the purchase price determined by the Qualified Appraiser is
more than 110% of Lessee's original good faith offer (as stated in the notice
of exercise), Lessee may elect to cancel its exercise of the Option by written
notice to Lessor given within thirty (30) days after the purchase price has been
determined as set forth above, in which case (and except as hereinafter
provided) the obligations of Lessor and Lessee with respect to the purchase of
the Premises created by Lessee's exercise of the Option shall be null and void,
and the Option shall expire. If the Purchase Price determined by the Qualified
Appraiser is less than $3,200,000, Lessor may elect to reject Lessee's offer to
purchase the Premises by written notice to Lessee given within thirty (30) days
after the purchase price has been determined as set forth above, in which case
(and except as hereinafter
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provided) the obligations of Lessor and Lessee with respect to the purchase of
the Premises as aforesaid shall be null and void, and the Option shall expire.
Notwithstanding the foregoing, if Lessee cancels its exercise of the Option
because the purchase price exceeds 110% of the offered price, Lessee shall
nevertheless be required to purchase the Premises hereunder if Lessor agrees to
accept a purchase price equal to 110% of the offered price; and if Lessor
rejects the offer because the purchase price is less than $3,200,000, Lessor
shall nevertheless be required to sell the Premises hereunder if Lessee agrees
to purchase the Premises for $3,200,000; in either case, the party seeking to
reinstate the purchase/sale as aforesaid shall give written notice of its
election to do so within fifteen (15) days of receiving the foregoing notice of
cancellation. If either party cancels the purchase and sale as aforesaid, the
cancelling party shall reimburse the other for fees it paid to all appraisers in
connection with this Option.
(b) The closing of the purchase of the Premises shall take place on
a day specified by Lessee, which shall be at least thirty (30) days after the
purchase price for the Premises has been determined, but not later than the last
day of the Initial Term.
(c) Rent on the Premises and other charges provided for in this
Lease shall be prorated as of the date of closing. The parties shall each pay
one-half of any realty transfer taxes.
(d) Lessee intends to obtain a report on the title to the real
estate constituting the Premises and a commitment from a title insurance company
selected by Lessee (the "Title Company"), in which the Title Company shall
agree, subject to the conditions of the commitment, which shall not be
inconsistent with Lessor's obligations hereunder, to issue to Lessee forthwith
after Lessor's Special Warranty Deed shall be placed of record an owner's policy
of title insurance in the form then used by the Title Company, in an amount not
less than the purchase price specified above.
(e) On or before the closing date, Lessor shall deliver to the Title
Company Lessor's Special Warranty Deed from Lessor to Lessee, properly executed
and conveying the Premises in marketable fee simple to Lessee free and clear of
all liens and encumbrances whatsoever, except for existing building
restrictions, ordinances, easements of roads, easements visible on the ground,
privileges or rights of public service companies, if any, items listed on
Exhibit "D" to this Lease, and any liens or encumbrances created or existing in
violation of Lessee's obligations under this Lease. Lessor shall provide Lessee
the documentation required by the Internal Revenue Service under the Foreign
Investment in Real Property Tax Act and all documentation required by the Title
Company for the deletion from its owner's policy of any exception pertaining to
mechanic's liens arising from labor or materials furnished to the Premises at
the instance of Lessor. Lessee shall then and there pay to the Title Company for
the
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account of Lessor the cash payment due on delivery of the deed provided for
above.
(f) When the Title Company shall be ready to deliver its title
insurance policy to Lessee, the purchase of the Premises shall be deemed to be
consummated and Lessor shall at such time be entitled to receive the money held
by the Title Company for delivery to Lessor and Lessee shall at such time be
entitled to receive the Title Company's title insurance policy. Lessee shall pay
the cost of the title insurance policy. The Special Warranty Deed shall be
delivered to Lessee as soon as it has been recorded.
(g) If at the Closing the commitment for title insurance is not in
conformity with the provisions of Section 38(e), then subject to the following
provisions Lessee may elect to cancel its exercise of the Option by written
notice to Lessor, in which case the obligations of Lessor and Lessee with
respect to the purchase of the Premises created by Lessee's exercise of the
Option shall be null and void, and the Option shall expire; provided, however,
that if there is a deficiency in the title commitment as aforesaid and Lessee
elects to terminate as a result thereof, Lessor shall have the option but not
the obligation to extend the Closing for a period of no more than sixty (60)
days, in order to correct such deficiency. If Lessee fails to exercise its
rights under this subsection (g), it shall take title to the Premises "as is,"
and without abatement of the purchase price.
(h) The parties acknowledge and agree that the Option Expiration
Date may be accelerated if there is an event of default under Lessor's loan
arrangements with the Mortgagees, under the circumstances and subject to the
terms and conditions set forth in the Nondisturbance Agreement, which terms and
conditions are incorporated by reference in this Section 38, subject to the
following agreements. Notwithstanding any provision of the Nondisturbance
Agreement to the contrary, if Lessor's default under its loan arrangements with
the Mortgagees is the direct result of a default by Lessee under the terms of
this Lease, then Lessee shall not have the right to exercise the Option and
purchase the Premises for $3,200,000. In such event, and notwithstanding any
provision of the Nondisturbance Agreement to the contrary, the purchase price
for the Premises shall be its market value, determined in accordance with the
foregoing provisions of this Section 38, but with the time periods for fixing
market value accelerated as follows: within fifteen (15) days of their receipt
of the notice of default from Mortgagees (as provided for in the Nondisturbance
Agreement), Lessor and Lessee shall choose the Qualified Appraiser; if following
expiration of the foregoing fifteen (15) day period the parties are unable to
agree on a mutually acceptable Qualified Appraiser, then within five (5) days
thereafter each shall nominate one (1) Qualified Appraiser, and those nominees
shall together select a third Qualified Appraiser within an additional five (5)
days following their selection, which Qualified Appraiser shall thereupon
conduct the appraisal and determine the purchase price within forty-five (45)
days.
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If Lessee shall fail to exercise the Option in accordance with the
foregoing provisions and in a timely manner, i.e., at least twelve (12) months
prior to the Option Expiration Date, or having properly exercised the Option
shall (i) fail to fulfill its agreements set forth herein or (ii) fail to cure
any existing or subsequent payment default at or prior to Closing, or if this
Lease shall be terminated in accordance with its terms (or if Lessor shall have
taken possession of the Premises as a result of a default of Lessee) at any time
prior to the Option Expiration Date, then the Option shall terminate without
further action of the parties, and the provisions of this Section 38 shall be
null and void.
39. Memorandum of Lease. This Lease should not and shall not be filed for
record, but in lieu thereof, Lessor and Lessee shall execute a Memorandum of
Lease in the form of Exhibit "E" attached hereto to be recorded for the purpose
of giving record notice of the appropriate provisions of this Lease.
40. Consent. Lessor shall not unreasonably withhold its consent with
respect to any matter for which Lessor's consent is required or desirable under
this Lease. Lessor shall exercise its discretion with respect to all matters
provided for in this Lease in a manner which reasonably recognizes the
legitimate business interests and concerns of Lessee as well as Lessor,
including but not limited to Lessee's need to utilize the Premises in a
commercially feasible fashion.
41. Performance. If Lessor fails to perform any payment obligation under
Sections 4(a), 8(b), or 14 of this Lease, and such failure continues more than
thirty (30) days after notice in writing from Lessee to Lessor specifying the
failure, Lessee may, at its option and without affecting any other remedy
hereunder, perform such obligation and deduct the reasonable cost thereof from
the next accruing installment or installments of rent payable hereunder until
Lessee shall have been fully reimbursed for such expenditures, together with
interest thereon at a rate equal to the lesser of twelve percent (12%) per annum
or the then highest lawful rate. If this Lease terminates prior to Lessee's
receiving full reimbursement, Lessor shall pay the unreimbursed balance plus
accrued interest to Lessee on demand.
42. Abatement. If, as a result of any cause (unless such cause is the
result of any action or inaction by Lessee, including without limitation,
negligence or default of Lessee, or is governed by or anticipated by Section
8(c) or Section 20 or any other provision of this Lease) the whole or any
material part of the Premises shall become untenantable, dangerous, or
unavailable for Lessee's use, and if the condition continues for more than sixty
(60) days, after written notice thereof to Lessor, Lessee may, at its option,
terminate this Lease by written notice to Lessor, in which event the rent shall
be abated as of the date of such election, or as of the date Lessee shall have
removed its property and vacated the Premises, whichever is later.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement under
seal the day and year first above written.
ATTEST: ZEUNER ENTERPRISES, INC.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
-------------------------- --------------------------
Title: Secretary Title: President
[CORPORATE SEAL]
ATTEST: CONTROL CONCEPTS, INC.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
-------------------------- --------------------------
Title: [ILLEGIBLE] Title: Vice President
[CORPORATE SEAL]
The undersigned CoreStates Bank, N.A. hereby consents to the execution of the
foregoing Agreement of Lease:
CORESTATES BANK, N.A.
By: /s/ [ILLEGIBLE]
--------------------------
Title:
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EXHIBIT A
to
LEASE AGREEMENT
ALL THOSE THREE CERTAIN lots or tracts of land herein described as one situate
in the Township of Newtown, County of Bucks Commonwealth of Pennsylvania being
known as Lots 9 and 10 as shown on the Final Plan of Section 0, Xxxxxxx
Xxxxxxxxxx Xxxxxxx dated January 13, 1969 and Lot 5 as shown on the Final Plan
of Section 0, Xxxxxxx Xxxxxxxxxx Xxxxxxx dated March 16, 1970 and revised April
1, 1970, both of the above referenced Final Plans being prepared by Tri-State
Engineers and Land Surveyors, Inc., 000 X. Xxxxxx Xxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx bounded and described as follows:
BEGINNING at a point a corner of a Lot 8 on the Westerly side of Xxxxx Drive
(varying width, being 60.00 feet in width at this point) said point being in the
middle of a 100.00 feet wide easement, said point also being measured along the
Westerly side of the said Xxxxx Drive the two following courses and distances
from the Westerly point of reverse curve of the Northwesterly radius corner at
the intersection of the said Xxxxx Drive and Pheasant Run (50 feet wide) viz:
(1) by a curve to the left in a Northeasterly direction having a radius of 50.00
feet and for the arc distance of 75.82 feet to a point of compound curve; thence
(2) by a curve to the left in a Northerly direction having a radius of 3000.00
feet and for the arc distance of 319.19 feet; thence from the said point of
beginning, along the said Lot 8, along Lots 7 and 6, and passing through the
middle of the said 100.00 foot wide easement South 73 degrees 51 minutes 00
seconds West 974.03 feet to a point a corner of the Northeasterly side of Penn
Street (60 feet wide); thence along the Northeasterly side of the said Penn
Street by a curve to the left in a Northwesterly direction having a radius of
300.00 feet and for the arc distance of 126.53 feet to a point a corner of Lot
4; thence along the said Lot 4 and crossing the Southerly half of another 100.00
foot wide easement North 24 degrees 00 minutes 00 seconds East 572.60 feet to a
point in the middle thereof, a corner in line of Lot 2; thence along line of the
said Lot 2, passing through the middle of the said 100.00 foot wide easement and
crossing the Westerly half of a third 100.00 foot wide easement South 85
degrees 24 minutes 00 seconds East 140.32 feet to a point in the middle thereof,
a corner of Lot 11; thence along the said Lot 11 and crossing the Easterly half
of the last mentioned 100.00 foot wide easement North 67 degrees 10 minutes 00
seconds East 520.00 feet to a point a corner on the Westerly side of Xxxxx Drive
aforesaid, thence along the Westerly side of the said Xxxxx Drive, South 22
degrees 50 minutes 00 seconds East 196.45 feet to a point of curve; thence
continuing along the Westerly side of the said Xxxxx Drive by a curve to the
right in a Southerly direction having a radius of 3000.00 feet and for the arc
distance of 346.46 feet to the point and place of beginning.
CONTAINING 10.4533 Acres.
COUNTY PARCEL NUMBER 00-00-000
31
EXHIBIT B
to
AGREEMENT OF LEASE
"Punch List" Items
1. Repair existing roof leak over the current engineering and accounting
departments and conference room.
2. Repair or replace air conditioner in the current manufacturing,
engineering and inspection departments.
3. Service, and if necessary, repair or replace air conditioner in current
engineering department.
32
EXHIBIT C
TO LEASE AGREEMENT
ASSIGNMENT, SUBORDINATION, ATTORNMENT
AND NONDISTURBANCE AGREEMENT
THIS ASSIGNMENT, SUBORDINATION, ATTORNMENT AND NONDISTURBANCE AGREEMENT
(the "Agreement") is made effective as of the ______________ day of February,
1994, among CONTROL CONCEPTS, INC., a Pennsylvania corporation having an address
at 00 Xxxxx Xxxxx, Xxxxxxx Industrial Commons, Xxxxxxx, Xxxxxxxxxxxx 00000
("Lessee"), ZEUNER ENTERPRISES, INC., a Pennsylvania corporation having an
address at __________________________, ("Borrower") and CORESTATES BANK, N.A., a
national banking association, which also conducts business as "Philadelphia
National Bank", as "CoreStates First Pennsylvania Bank" and as "Xxxxxxxx Bank",
having an address at 0000 Xxxxxx Xxxxxx, X.X. Xxx 0000, X.X. 0-0-00-00,
Xxxxxxxxxxxx, XX 00000-0000, Attention: Credit Support Division ("Bank").
BACKGROUND
A. Borrower, Lessee and Bank have entered into a certain Amended and
Restated Loan and Security Agreement dated November 21, 1991, pursuant to which
Bank has extended certain credit facilities to Borrower consisting of, inter
alia, a loan in the amount of $2,702,581.35 (the "Loan"), which loan is
evidenced by a Promissory Note executed by Borrower payable to Bank in the
principal amount of $2,702,581.35 (the "Note").
B. Pursuant to the terms of that certain lease dated September 19, 1986
between Borrower and Lessee (the "Initial Lease"), Lessee leased from Borrower
that certain land and building situate at 00 Xxxxx Xxxxx, Xxxxxxx Industrial
Commons, Newtown Township, Bucks County, Pennsylvania, as more particularly
described in the Initial Lease and in Exhibit "A" attached hereto (the
"Premises").
C. The Note is secured by, inter alia, a Fourth Open-End Mortgage and
Security Agreement which constitutes a lien against the Premises (which
Mortgage, and all other Mortgages previously granted by Borrower to Bank
encumbering the Premises, are collectively referred to as the "Mortgage"), and
an assignment to Bank of all right, title and interest of Borrower in and to all
leases of the Premises.
D. Pursuant to a Stock Purchase Agreement dated February ______, 0000,
Xxxxx-Xxxxxxxxxx Company, a Delaware corporation, intends to acquire all of the
capital stock of Lessee, and in connection therewith, Borrower and Lessee desire
to terminate the Initial Lease and to enter into a new lease dated
_________________, 1994 pursuant to the terms of which Lessee shall lease the
Premises from Borrower (the "Lease").
E. Bank desires that Borrower specifically assign to Bank all of
Borrower's right, title and interest in and to the Lease, that the Lease be
subordinated to the lien of the Mortgage and that Lessee agree to attorn to the
purchaser at foreclosure of the Mortgage in the event of such foreclosure or to
Bank in the event of collection of the rent by Bank, and Lessee is willing to
agree to so attorn.
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33
F. Notwithstanding a foreclosure by Bank, Lessee desires to obtain Bank's
agreement not to disturb Lessee's peaceful use and enjoyment of the Premises in
accordance with the terms of the Lease so long as Lessee is in compliance with
all of its obligations thereunder.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein made, the parties, intending to be legally bound hereby, agree
as follows:
1. Assignment of Lease: As security for the payment of Borrower of the
sums secured by the Mortgage and the performance by Borrower of its other
obligations under the Mortgage and all other documents and agreements executed
in connection therewith or as security for the Note, Borrower hereby conveys,
transfers and assigns unto Bank its successors and assigns, all right, title,
interest and privilege which Borrower has or may hereafter have in, to and under
the Lease and all renewals or extensions thereof, together with all rents,
income and profits due and becoming due therefrom, and Lessee hereby consents to
and acknowledges such assignment to Bank of the Lease and all rents, income and
profits therefrom.
2. Subordination of Lease. The only outstanding obligations of Borrower to
Bank which are secured by the Mortgage or any other lien in favor of Bank on the
Premises consist of: (a) indebtedness of Borrower to Bank in the outstanding
principal amount of $2,511,761.31; and (b) the obligations of Borrower to Bank
as a guarantor of certain loans from Bank to Xxxxxxx X. Xxxxxx in the aggregate
outstanding principal amount of $479,762.02. The Lease and the estates,
interests and rights created thereby, are and shall be subject and subordinate
to the provisions and lien of the Mortgage and to all renewals, modifications,
consolidations, replacements and extensions thereof to the full extent of the
principal amount secured thereby, all interest thereon, and all other
indebtedness secured thereby. Except for advances made by Bank to protect its
collateral for repayment of sums evidenced by the Note or to cure defaults of
Borrower thereunder, no other amounts advanced by Bank to Borrower will be
deemed indebtedness secured by the Mortgage to which the Lease is hereby made
subject and subordinate. The lien of the Mortgage is and shall be made prior to
the Lease, with the same force and effect as if the Lease had been executed and
delivered after the execution, delivery and recording of the Mortgage.
3. Option to Purchase. The interest of Lessee in any option to purchase
all or any part of the Premises contained in the Lease is specifically
subordinated to the rights of Bank under the Mortgage and, except as set forth
in this paragraph, such option shall not be binding upon Bank, its successors or
assigns. In the event that Borrower shall be in default of any of its
obligations to Bank in connection with the Note, Bank shall notify Lessee in
writing of the existence of such default and of Bank's intent to commence
foreclosure proceedings under the Mortgage (such notice being referred to as
"Bank's Notice"). Within ninety (90) days following Lessee's receipt of Bank's
Notice, Lessee may exercise its option to purchase the Premises set forth in
Paragraph 38 of the Lease by notifying Bank in writing of its desire to exercise
the option. The purchase price shall not be less than Three Million Two Hundred
Thousand Dollars ($3,200,000.00). So long as Borrower delivers to Bank within
such ninety (90) day period a deed to the Premises in form and content required
by Paragraph 38 of the Lease, Bank shall hold the Deed in escrow pending
settlement of the sale of the Premises to Lessee, which shall occur within
forty-five (45) days after Lessee's exercise of the option, and Bank shall
postpone the Sheriff's Sale of the Premises for a sufficient length of time to
permit Lessee to purchase the Premises. At settlement Bank shall deliver the
deed to Lessee for recording and Lessee shall deliver the purchase price to
Borrower, whereupon
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34
Borrower shall repay all indebtedness to Bank secured by the Mortgage and all
customary closing costs, and shall be permitted to retain the balance of any
sales proceeds. If Borrower fails to deliver the Deed to Bank within ninety (90)
days following Lessee's receipt of Bank's Notice, Bank shall proceed with the
Sheriff's Sale of the Premises and settlement of Lessee's purchase of the
Premises shall occur within thirty (30) days after the Sheriff's Sale or such
later date as a Sheriff's Deed shall have been issued in respect of the
Premises.
Instead of exercising its option to purchase the Premises as set forth in
paragraph 38 of the Lease, Lessee shall have the option, exercisable within
ninety (90) days following Lessee's receipt of Bank's Notice, to purchase the
Loan from Bank for a purchase price equal to all sums due and payable to Bank
under the Loan (the "Loan Purchase Option"). Lessee shall exercise the Loan
Purchase Option by notifying Bank in writing of its exercise of its intent to do
so within ninety (90) days following Lessee's receipt of Bank's Notice. Within
fifteen (15) days after Lessee's exercise of the Loan Purchase Option, Lessee
shall make a cash payment to Bank in an amount equal to the entire amount then
due under the Loan and Bank shall then and there transfer, endorse, assign and
deliver, without recourse, to Lessee the Note, the Mortgage and all other
documents relating to the Loan and any and all further documents and instruments
reasonably required to complete the full transfer to Lessee of the Note, the
Mortgage and all other documents relating to the Loan and all rights of Bank
with respect thereto.
4. Attornment by Lessee. Lessee agrees with Bank that if the interests of
Borrower in the Premises shall be transferred to and owned by Bank or by any
purchaser at a foreclosure sale by reason of foreclosure or other proceedings
brought by Bank, or by any other manner, Lessee shall be bound to Bank or to
such purchaser under all of the terms, covenants and conditions of the Lease for
the balance of the term thereof remaining and any extensions or renewals thereof
which may be effected in accordance with any option therefor in the Lease, with
the same force and effect as if Bank or such purchaser were the lessor under the
Lease, and Lessee hereby attorns to Bank or such purchaser as its lessor, said
attornment to be effective and self-operative without the execution of any
further instruments on the part of any of the parties thereto immediately upon
Bank's or such purchaser's succeeding to the interest of Borrower in the
Premises, as though the interest of Borrower had not terminated or such
foreclosure proceedings had not been brought. If Bank shall, pursuant to any
assignment of lessor's interest in the Lease, elect to require Lessee to pay to
Bank the rental and other charges payable to Lessee under the Lease, Lessee
shall, until Bank shall have cancelled such election, be similarly bound to Bank
as its lessor and shall similarly attorn to Bank as its lessor.
5. Restoration of Fire Damage. Bank agrees to be bound by the provisions
of paragraph 8(d) of the Lease regarding restoration of fire damage; provided,
however, that Borrower and Lessee hereby agree that notwithstanding the
provisions of such paragraph 8(d): (a) Bank shall be entitled to hold and
advance all net insurance proceeds; and (b) Lessee shall have no right to
receive any "Excess Proceeds" (as defined in such paragraph 8(d)) during any
period when the Mortgage is in existence.
6. Insurance. Borrower and Lessee hereby agree to cause: (a) Bank to be
named as a mortgagee and loss payee under all property and casualty insurance
and as an additional named insured under all public liability insurance
maintained by Borrower and/or Lessee in respect of the Premises and Borrower's
and Lessee's operations thereon; and (b) all insurers to deliver to Bank
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35
copies of all notices of cancellation required to be given to Borrower under any
and all such policies and copies of all replacement policies issued in respect
of Borrower, Lessee or their operations on the Premises.
7. Assignment and Subletting. Bank agrees to be bound by the provisions of
paragraph 21 of the Lease; provided, however, that notwithstanding the
provisions of such paragraph 21, Lessee may only sublet or assign the Lease to a
corporation or partnership that controls or is controlled by, or is under common
control with, Lessee, or any corporation resulting from the merger or
consolidation with Lessee, or to any entity that acquires all of the assets as a
going concern of the business that is being conducted on the Premises by Lessee,
so long as:
(a) Lessee provides Bank with thirty (30) days' prior written notice
of such proposed subletting or assignment setting forth the name and intended
use of the proposed assignee or sublessee; and
(b) The use of the Premises by such corporation, partnership or
entity: (i) is not substantially different in use or character from that of
Lessee; and (ii) does not materially increase any environmental or other
hazards, dangers or risks to the Premises or the building situated thereon.
8. Limited Liability of Bank. Lessee agrees with Bank that it as assignee
hereunder and if it or any purchaser at a foreclosure sale shall succeed to the
interest of Borrower under the Lease, Bank or such purchaser shall not be:
(a) liable for any action or omission of any prior lessor (including
Borrower) under the Lease;
(b) subject to defenses or offsets which Lessee might have against
any prior lessor (including Borrower);
(c) bound by any rent or additional rent which Lessee might have
paid for more than the current month to any prior lessor (including Borrower);
(d) bound by any amendment or modification of the Lease made without
its written consent; or
(e) liable for the return of any security deposit not actually
received by Bank.
Lessee further agrees with Bank that Lessee will not voluntarily
subordinate the Lease to any lien or encumbrance other than the Mortgage without
Bank's consent.
Lessee hereby agrees that any person or entity which at any time
hereafter becomes the lessor under the Lease, including, without limitation,
Bank and such purchaser at a foreclosure sale, shall be liable only for the
performance of the obligations of the lessor under the Lease which arise during
the period of their ownership of the Premises and shall not be liable for any
obligations of the lessor under the Lease which arise prior to or subsequent to
such ownership.
-4-
36
9. Nondisturbance. Bank agrees that, notwithstanding a foreclosure or
other actions by Bank under the Mortgage, Bank shall not disturb Lessee in its
quiet use and enjoyment of the Premises for the balance of the term of the Lease
and any extension or renewal thereof provided by the terms thereof so long as
Lessee abides by the terms of and in all respects performs its obligations under
the Lease.
10. Authority of Lessee. Lessee hereby represents and warrants to Borrower
and Bank that Lessee is the sole entity entitled to the use and enjoyment of the
Premises under the Lease and that no other person or entity is entitled to such
use or enjoyment during the term of the Lease. Lessee acknowledges and agrees
that Borrower and Bank are relying on such foregoing representation and warranty
by Lessee.
11. Additional Documentation. Lessee, Borrower and Bank hereby agree to
execute and deliver, in recordable form if necessary, any and all further
documents and instruments reasonably requested by any other party hereto or by
any title insurance company to give effect to the terms and provisions of this
Agreement.
12. Payment of Rent Directly to Bank. Borrower hereby directs that all
rent payable under the Lease be paid directly to Bank at the address set forth
in the heading of this Agreement and hereby directs Bank to deduct from such
rental payments all sums then due to Bank under the Loan before remitting any
balance of such payments to Borrower.
13. Lessee's Fixtures. Bank acknowledges the presence within the Premises
of manufacturing and processing equipment and other personal property and trade
fixtures of Lessee and acknowledges that such equipment, personal property and
trade fixtures are not subject to the lien of the Mortgage. Bank further
acknowledges the provisions of Paragraph 6 of the Lease which permit Lessee to
remove all such equipment, personal property and trade fixtures provided that
Lessee shall repair and restore any damage or injury to the Premises caused by
the installation and/or such removal thereof.
14. Notices. Lessee agrees to give Bank at the address set forth in the
heading of this Agreement: (a) written notice of any defaults by Borrower under
the Lease and to give Bank, at the sole option of Bank, the right to cure any
defaults by Borrower under the Lease within thirty (30) days (or such longer
time, if any, as permitted in the Lease for the curing of any defaults) after
receipt by Bank of written notice of such default; and (b) true and correct
copies of all notices given by Lessee to Borrower under the Lease or otherwise
contemporaneously with the delivery of such notices to Borrower.
15. Standards of Bank's Consent. Wherever under the Lease Lessee is
required to obtain the consent of Borrower, Lessee shall also be required to
obtain the consent of Bank, and in each such instance Bank's consent will be
subject to the same standards to which Borrower's consent is subject.
16. No Modification, Assignment. Lessee and Borrower covenant and warrant
that the Lease is unmodified and in full force and effect, that, subject to the
provisions of Paragraph 7 hereof, Lessee will not assign (nor shall Borrower
consent to any such assignment) its rights and obligations under the Lease or
consent to any amendment, modification, cancellation or termination
-5-
37
of the Lease without the prior written consent of Bank, and that Lessee will not
pay to Borrower rent more than one (1) month in advance.
17. Agreement Controlling. To the extent that any provision of this
Agreement is inconsistent with any provision of the Lease, the provisions of
this Agreement shall supersede inconsistent provisions of the Lease relating to
subordination of the Lease and the interest and estates created thereby to the
lien or charge of the Mortgage.
18. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute
only one agreement. It shall not be necessary, when making proof of this
Agreement, to produce or account for more than one counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
properly executed and sealed, effective as of the day and year first above
written.
ZEUNER ENTERPRISES, INC.
By:
-----------------------------
Name/Title:
---------------------
[CORPORATE SEAL]
Attest:
-------------------------
Name/Title:
---------------------
CORESTATES BANK, N.A.
By:
-----------------------------
Name/Title:
---------------------
CONTROL CONCEPTS, INC.
By:
-----------------------------
Name/Title:
---------------------
[CORPORATE SEAL]
Attest:
-------------------------
Name/Title:
---------------------
-6-
38
EXHIBIT "A"
LEGAL DESCRIPTION OF PREMISES
-7-
39
EXHIBIT "A"
ALL THOSE THREE CERTAIN lots or tracts of land herein described as one situate
in the Township of Newtown, County of Bucks, Commonwealth of Pennsylvania being
known as Lots 9 and 10 as shown on the Final Plan of Section 0, Xxxxxxx
Xxxxxxxxxx Xxxxxxx dated January 13, 1969 and Lot 5 as shown on the Final Plan
of Section 0, Xxxxxxx Xxxxxxxxxx Xxxxxxx dated March 16, 1970 and revised April
1, 1970, both of the above referenced Final Plans being prepared by Tri-State
Engineers and Land Surveyors, Inc., 000 X. Xxxxxx Xxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx bounded and described as follows:
BEGINNING at a point a corner of a Lot 8 on the Westerly side of Xxxxx Drive
(varying width, being 60.00 feet in width at this point) said point being in the
middle of a 100.00 feet wide easement, said point also being measured along the
Westerly side of the said Xxxxx Drive the two following courses and distances
from the Westerly point of reverse curve of the Northwesterly radius corner at
the intersection of the said Xxxxx Drive and Pheasant Run (50 feet wide) viz:
(1) by a curve to the left in a Northwesterly direction having a radius of 50.00
feet and for the arc distance of 75.82 feet to a point of compound curve; thence
(2) by a curve to the left in a Northerly direction having a radius of 3000.00
feet and for the arc distance of 319.19 feet; thence from the said point of
beginning; along the said Lot 5, along Lots 7 and 6, and passing through the
middle of the said 100.00 foot wide easement South 73 degrees 51 minutes 00
seconds West 974.03 feet to a point a corner of the Northeasterly side of Penn
Street (60 feet wide); thence along the Northeasterly side of the said Penn
Street by a curve to the left in a Northwesterly direction having a radius of
300.00 feet and for the arc distance of 126.53 feet to a point a corner of Lot
4; thence along the said Lot 4 and crossing the Southerly half of another 100.00
foot wide easement North 24 degrees 00 minutes 00 seconds East 572.60 feet to a
point in the middle thereof, a corner in line of Lot 2; thence along line of the
said Lot 2, passing through the middle of the said 100.00 foot wide easement and
crossing the Westerly half of a third 1001.00 foot wide easement South 85
degrees 24 minutes 00 seconds East 140.32 feet to a point in the middle thereof,
a corner of Lot 11, thence along the said Lot 11 and crossing the Easterly half
of the last mentioned 100.00 foot wide easement North 67 degrees 10 minutes 00
seconds East 520.00 feet to a point a corner on the Westerly side of Xxxxx Drive
aforesaid, thence along the Westerly side of the said Xxxxx Drive, South 22
degrees 50 minutes 00 seconds East 196.45 feet to a point of curve; thence
continuing along the Westerly side of the said Xxxxx Drive by a curve to the
right in a Southerly direction having a radius of 3000.00 feet and for the arc
distance of 346.46 feet to the point and place of beginning.
CONTAINING 10.4533 Acres.
COUNTY PARCEL NUMBER 00-00-000
40
COMMONWEALTH OF PENNSYLVANIA :
: SS.
COUNTY OF :
On this, the _______ day of ________________________ 19__ before me, a
Notary Public, personally appeared ________________________, who acknowledged
himself/herself to be the _______________________ of CoreStates Bank, N.A., a
national bank, and that he/she as such _________________________, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the national bank by himself/herself as
________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
--------------------------------------
Notary Public
My commission expires:
-8-
41
STATE OF :
: SS.
COUNTY OF :
On this, the _______ day of ________________________ 19__ before me, a
Notary Public, personally appeared ________________________________, who
acknowledged himself/herself to be the _____________________ of Zeuner
Enterprises, Inc., a Pennsylvania corporation, and that he/she as such
__________________________, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself/herself as _____________________.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
--------------------------------------
Notary Public
My commission expires:
-9-
42
STATE OF :
: SS.
COUNTY OF :
On this, the _______ day of _______________________ 19__ before me, a
Notary Public, personally appeared _________________________________, who
acknowledged himself/herself to be the _____________________ of Control
Concepts, Inc., a Pennsylvania corporation, and that he/she as such
__________________________ being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself/herself as __________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
--------------------------------------
Notary Public
My commission expires:
-10-
43
STATE OF :
: SS.
COUNTY OF :
On this, the _______ day of _______________________ 19__ before me, a
Notary Public, personally appeared _________________________________, who
acknowledged himself/herself to be the _____________________ of Control
Concepts, Inc., a Pennsylvania corporation, and that he/she as such
__________________________ being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself/herself as _________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
--------------------------------------
Notary Public
My commission expires:
-11-
44
EXHIBIT D
to
AGREEMENT OF LEASE
Title Exceptions
1. Unrecorded easements, discrepancies or conflicts in boundary lines,
shortages in area and encroachments which an accurate and complete survey
would disclose.
2. Restrictions affecting title as in Deed Book 1840 page 612.
3. Unsettled taxes due the Commonwealth of Pennsylvania by mortgagor
corporation, not presently a lien, all of which taxes when assessed or
settled, if not paid will constitute a prior lien against any fund created
at a judicial sale. (none due and owing to date)
4. Declaration of Easement as in Deed Book 1875 page 366.
5. Deed of Dedication as in Deed Book 1895 page 1079.
6. Agreements as in Deed Book 1895 page 51 and 1958 page 1021.
7. Rights granted to Xxxx Telephone Company in Deed Book 1831 page 1037.
8. Rights granted to Philadelphia Suburban Gas and Electric Company in Deed
Book 511 page 22, 522 page 515 and 516 page 275.
9. Rights granted to Philadelphia Electric Company in Deed Book 2438 page 62.
10. Conditions disclosed by survey made by Tri-State Engineers and Land
Surveyors, Inc. dated 3/16/1970 revised 4/1/1970 and recorded in Plan Book
75 page 16: - 75 foot building set back line; 50 foot wide easement.
11. Possible additional assessments for taxes for new construction or for any
major improvements pursuant to provisions of Acts of Assembly relating
thereto, not yet due and payable.
12. Financing Statement 32334 filed 7/24/1984 in Recorder of Deeds Office in
Secure Transaction Docket 8 page 261 block 2 - TRW, Inc. A Division of
Rossgear to General Electric Credit Corporation. Equipment: fixtures,
equip.
13. Mortgage and Security Agreements, and amendments thereto, granted to
Philadelphia National Bank ("Bank") securing $2,702,581.35 loan to Lessor
("Loan").
14. Assignments of Rents, Leases and Agreements, and amendments thereto,
granted to Bank to secure Loan.
15. UCC Financing Statements filed by Bank in connection with Loan.
16. Utility Easement Agreement to Xxxxxx Xxxx & Sons, Inc., dated April 2,
1990.
45
EXHIBIT E
to
LEASE AGREEMENT
MEMORANDUM OF LEASE
This Memorandum of Lease is made February __, 1994 between ZEUNER
ENTERPRISES, INC., a Pennsylvania corporation, having an address at 00 Xxx Xxx
Xxxxx, Xxx Xxxx, Xxxxxxxxxxxx 00000 ("Landlord"), and CONTROL CONCEPTS, INC., a
Pennsylvania corporation, having an address at 00 Xxxxx Xxxxx, Xxxxxxx
Industrial Commons, Xxxxxxx, Xxxxxxxxxxxx 00000, ("Tenant"), who agree as
follows:
1. Term and Premises. Landlord leases to Tenant and Tenant leases from
Landlord the real property commonly known as 00 Xxxxx Xxxxx, Xxxxxxx Industrial
Commons, Newtown Township, Bucks County, Pennsylvania (the "Premises"), which is
more fully described in Exhibit A attached as a part of this Memorandum for a
term commencing February __, 1994 and ending February 28, 1999 in accordance
with that certain Agreement of Lease entered into between Lessor and Lessee,
dated February __, 1994 (the "Lease"). Lessor grants Lessee the option to extend
the term for one (1) additional period of five (5) years, under the provisions
and conditions of the Lease.
2. Option to Purchase. Lessor grants Lessee the option to purchase the
Premises, under the provisions and conditions of the Lease.
3. Purpose of Memorandum of Lease. This Memorandum of Lease is prepared
for the purpose of recordation, and it in no way modifies the provisions of the
Lease. The provisions of the Lease are incorporated into this Memorandum of
Lease by reference.
(SEAL) CONTROL CONCEPTS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
TENANT
(SEAL) ZEUNER ENTERPRISES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
LANDLORD
46
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
On this, the ____ day of February, 1994, before me, a notary public, the
undersigned officer, personally appeared ______________________, who
acknowledged himself to be the ___________________ of CONTROL CONCEPTS, INC., a
Pennsylvania corporation, and that as such officer, being duly authorized to do
so, executed the foregoing instrument for the purposes therein contained by
signing on behalf of such corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------------
NOTARY PUBLIC
My Commission Expires:
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
On this, the ____ day of February, 1994, before me, a notary public, the
undersigned officer, personally appeared ______________________, who
acknowledged himself to be the ___________________ of ZEUNER ENTERPRISES, INC.,
a Pennsylvania corporation, and that as such officer, being duly authorized to
do so, executed the foregoing instrument for the purposes therein contained by
signing on behalf of such corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------------
NOTARY PUBLIC
My Commission Expires:
47
APPENDIX D (AMENDED)
AMENDMENT TO FACTORY LEASE CONTRACT
THIS AMENDMENT to the Factory Lease Contract for the establishment of
Xxxxx Shanghai Hydrostatic Transmission Co. Ltd. dated February 16, 1995 (the
"Contract") is entered into by and between Shanghai Hydraulic Pump Company,
formerly Shanghai Hydraulics and Pneumatics Corporation Pudong Branch and Xxxxx
Shanghai Hydrostatic Transmission Co. Ltd. on First of March, 1996, in
accordance with relevant laws and regulations of the People's Republic of China,
after negotiations based on the principles of equality and mutual benefits (the
"Amendment").
NOW, THEREFORE, the parties agree to amend the Contract as follows:
AGREEMENT
1. Capitalized Terms.
Capitalized terms used in the Amendment, if not otherwise defined herein,
shall have the same meaning as they are defined in the Contract.
2. Amendment to General Statement 4.
General Statement 4. of the Contract which originally reads as follows:
4. Lessor agrees to lease a part of the Site and a part of the
entire Factory to Lessee pursuant to the terms and conditions
of this Contract.
is hereby replaced in its entirety by the following paragraph:
4. Lessor agrees to lease a part of the Site and the entire
Factory and related facilities to Lessee pursuant to the terms
and conditions of this Contract.
3. Amendment to Article 1.02.
Article 1.02 of the Contract which originally reads as follows:
1.02 For purposes herein, the "Leased Premises" shall mean the part
of the Site and part of the Factory as described in more
detail in Appendix 1 hereto.
is hereby replaced in its entirety by the following paragraph:
1.02 For purposes herein, the "Leased Premises" shall mean the part
of the Site and the entire Factory and related facilities as
described in more detail in Appendix 1 (Amended) hereto.
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48
4. Amendment to Article 2.01.
Article 2.01 of the Contract which originally reads as follows:
2.01 Subject to the provisions of this Contract, Lessor agrees to
lease to Lessee the Leased Premises and Lessee agrees to pay
rent for the Leased Premises to Lessor. Lessor shall also
permit Lessee use of all roads, public and private, adjacent
to circumventing and/or leading to the Leased Premises, and
allow Lessee other activities pertinent to the reasonable use
of the Leased Premises without interfering with the business
of Lessor.
is hereby replaced in its entirety by the following paragraph:
2.01 Subject to the provisions of this Contract, Lessor agrees to
lease to Lessee the Leased Premises and Lessee agrees to pay
rent for the Leased Premises to Lessor. Lessor and Lessee can
both use part of the Site of the Leased Premises where Lessor
shall allow Lessee activities pertinent to the reasonable use
of the Leased Premises without interfering with the business
of Lessor and Lessee shall allow Lessor activities pertinent
to the reasonable maintenance of the Leased Premises without
interfering with the business of Lessee. Furthermore, Lessor
shall not permit any employees, agents or contractors to
occupy or enter the Leased Premises without the advance
written consent to the Lessor's designated authority by the
designee of the Lessee.
5. Amendment to Article 3.01.
Article 3.01 of the Contract which originally reads as follows:
3.01 In consideration of Lessor's lease of the Leased Premises and
other services as provided herein, Lessee shall pay Xxx 000000
per month to Lessor (hereinafter referred to as the "Rent")
for the term of this Contract subject to the following
adjustments:
At the end of 2003, 7% of the Rent shall be adjusted by a
percentage change equal to the percentage change in an index,
publicly available and mutually agreed between Lessor and
Lessee to be representative of industrial rents in Shanghai,
over the period from the Effective Date of this Contract to
the date of adjustment. The amount of Rent in Rmb so
calculated shall be called the Adjustable Rent Amount and
shall be further adjusted each five years thereafter in the
same manner using the same or a similar mutually agreed index.
At the end of 2003, 93% of the Rent shall be converted from
Rmb into U.S. dollars (U.S. $) at the average of the rates of
exchange for buying and selling published by the Bank of
China. The amount of Rent in
2 of 5
49
U.S. dollars so calculated shall be called the Fixed Rent
Amount and shall remain fixed in U.S. $ for the remaining term
of the Contract.
Each month thereafter, the Rent paid by Lessee shall be the
sum of the Adjustable Rent Amount in Rmb and an amount of Rmb
equal to the Fixed Rent Amount converted to Rmb at the average
of the rates of exchange for buying and selling published by
the Bank of China on the first day of the month in which the
payment is made.
is hereby amended to read as follows:
3.01 In consideration of Lessor's lease of the Leased Premises and
other services as provided herein, Lessee shall pay Rent each
month to Lessor calculated as follows:
(i) Rmb 196,393 of the Rent shall be fixed until the end of
1998. At the end of 1998. the Rmb 196,393 shall be
adjusted by a percentage change in an index, publicly
available and mutually agreed upon between Lessor and
Lessee to be representative of industrial rents in
Shanghai for the most recent twelve (12) months (the
Index). The amount so calculated shall be called the
Indexed Rent Amount and shall be adjusted each year
thereafter in a similar manner but in no year shall the
percentage increase exceed six percent (6%).
(ii) Rmb 13,720 of the Rent shall be fixed until the end of
2003. At the end of 2003, the Rmb 13,720 shall be
adjusted by a percentage change in the Index over the
period from the Effective Date of this Contract to the
date of the adjustment. The amount so calculated shall
be called the Adjustable Rent Amount and shall be
adjusted in a similar manner each five (5) years
thereafter.
(iii) Rmb 182,280 of the Rent shall be fixed until the end of
2003. At the end of 2003, the Rmb 182,280 shall be
converted from Rmb into US Dollars (US$) at the average
of the rates of exchange for buying and selling
published by the Bank of China. The amount of Rent in US
Dollars so calculated shall be called the Fixed Rent
Amount and shall remain fixed in US Dollars for the
remaining term of the Contract.
Each month until the end of 2003 the Rent shall be the sum of
the Rmb amounts in (i), (ii) and (iii). Thereafter, the Rent
shall be the amount of Rmb in (i) and (ii) plus an amount of
Rmb equal to the Fixed Rent Amount of (iii) converted into Rmb
from US Dollars (US$) at the average of the rates of exchange
for buying and selling published by the Bank of China on the
first day of the month in which the payment is made.
3 of 5
50
Lessee agrees, without written approval from Lessor, not to
use for production purposes any of the related facilities
housing equipment.
6. Amendment to Article 3.04
Article 3.04 of the Contract which originally reads as follows:
3.04 Lessee shall pay Lessor simple interest at the rate of 0.04%
per day on all money which is due and payable to Lessor
hereunder but is unpaid on the due date, provided however,
that Lessee shall not be held responsible for any delays in
the payment of Rent pursuant to Article 3.02 and Article 3.03
where such delays are caused by the banks involved.
is hereby amended to read as follows:
3.04 Lessee shall pay Lessor simple interest per day on all money
which is due and payable to Lessor hereunder but is unpaid on
the due date at the daily rate calculated from the annual
Industry and Commercial Bank of China enterprise loan rate
plus 5% divided by 365 days, provided however, that Lessee
shall not be held responsible for any delays in the payment of
Rent pursuant to Article 3.02 and Article 3.03 where such
delays are caused by the banks involved.
7. Amendment to Article 5.02(e).
Article 5.02(e) of the Contract which originally reads as follows:
5.02(e) making repairs to the Leased Premises which are required
as the result of misuse or abuse of the Leased Premises by
Lessee.
is hereby amended to read as follows:
5.02(e) making repairs to the Leased Premises which are required
as the result of misuse or abuse of the Leased Premises by
Lessee, undertaking all normal daily repair, operation and
maintenance of the Leased Premises such that Lessor has no
requirement to have employees of Lessor undertake such work
and, for the remaining life of the lease after the first
twenty-five (25), undertaking all repairs or replacements to
the equipment of the Leased Premises.
8. Amendment to Appendix 1, Exhibits 1(b) and 1(c).
Appendix 1, together with exhibits 1a, 1b, 1c and 1d, are entirely replaced by
Appendix 1 (Amended), together with exhibits 1a, 1b (Amended) and 1d (Amended).
4 of 5
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IN WITNESS WHEREOF, each of the Parties hereto have caused this Amendment
to the Contract to be executed by their duly authorized representatives on the
first date set forth above.
PARTY A:
SHANGHAI HYDRAULIC PUMP
COMPANY, formerly known as
SHANGHAI HYDRAULICS & PNEUMATICS
CORPORATION PUDONG BRANCH
By: /s/ Bao Xxx Xxxx
--------------------------------------
Name: Bao Xxx Xxxx
Title: Legal Representative
Nationality: Chinese
PARTY B:
XXXXX SHANGHAI HYDROSTATIC TRANSMISSION CO., LTD.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: General Manager Officer
Nationality: American
5 of 5
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APPENDIX 1 (Amended)
Appendix 1(a)
Site
On the attached Exhibit 1a, the Site is the shaded area of block 76 of the
Jinqiao Export Processing Zone, measuring 205m x 135m and labeled 76-III, but
modified total hectares.
Appendix 1(b)(Amended)
Leased Premises
On Exhibit 1b (Amended) the area shown as the area of length B and width of the
Site is the part of the Site and the shaded area is the entire Factory, together
making the Leased Premises.
The construction drawings, which specify the standards and specification of the
Leased Premises, are contained in Exhibit 1d (Amended). The standards of
workmanship and materials are generally expected to be:
Workmanship that finishes all details of the task.
A Factory floor that not only meets the construction drawings, but uses
high quality steel reinforcement, strong aggregate, and cement all mixed,
poured and finished, to provide the strength and surface smoothness to
accept highly precise machine tools.
Utilities distribution components of high quality.
A roof quality that has no leaks and sheds rainwater successfully.
Heating, ventilating, and air conditioning (HVAC) materials and component
selection to provide comfortable air quality for the people.
An outside wall material that is energy efficient and attractive.
Windows that are clean and maintainable, upon receipt of the building.
As an overall standard, the selection of materials and components must have
suitable applied life (MTBF) and be acceptable to the Shanghai Pudong climate.
53
Exhibit 1(b)(Amended)
[Floor Plan Omitted]
54
Exhibit (d)(Amended)
As further explanation of the construction drawings, the utilities provided to
meet the needs that were jointly provided by Xxxxx, Inc. and the Design
Institute of Bengbu are generally known as following:
1. Electrical supply from an adequate on-site sub-station with proper
switch gear and safety devices;
2. Water service for both process and people that is sized to provide
cooling water and toilet service for the Factory;
3. Sanitary and waste water treatment on-site that meets all
regulations and specifications;
4. Security house (Gate Room) for the use of security staff;
5. Adequate heating and air conditioning system;
6. Air compressors that are quiet, reliable and efficient; and
7. Telephone supply system that meets the regulations and provides
service as defined.
55
Appendix D
Factory Lease Contract
