Exhibit 10.2
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "Amendment") is entered into this 28th
day of October, 1999, between TEACHERS INSURANCE AND ANNUITY ASSOCIATION
("Landlord"), and NUTRI/SYSTEM LP ("Tenant").
Background
Landlord and Tenant are parties to a Lease dated December 11, 1997 (the
"Lease"), between Landlord's predecessor-in-interest, Teachers Pennsylvania
Realty, Inc. ("TPR"), and Tenant, pursuant to which Landlord agreed to lease to
Tenant and Tenant agreed to lease from Landlord premises described in the Lease
(the "Existing Space") located in that certain building known as 000 Xxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxx (the "Building"), as more particularly described in the
Lease, upon the terms and conditions set forth in the Lease. Landlord has
succeeded to the interests of TPR as landlord under the Lease.
Landlord and Tenant desire to extend the term of the Lease and for Tenant
to lease from Landlord additional space located in the Building in accordance
with the terms and conditions of the Lease and this Amendment.
Agreement
In consideration of the foregoing and of the mutual promises contained in
this Amendment, and for other good and valuable consideration the receipt and
sufficiency of which is acknowledged by Landlord and Tenant, and intending to be
legally bound hereby, Landlord and Tenant agree as follows:
l. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
in addition to the Existing Space currently leased by Tenant under the Lease,
the portion of the Building shown by cross-hatching on the Building floor plan
attached to this Amendment as Exhibit A (the "Expansion Space"), in accordance
with the terms and conditions of this Amendment. The Expansion Space shall be
deemed to consist of 15,855 square feet of rentable floor area.
2. Tenant is fully familiar with the Expansion Space, and shall accept
possession of the Expansion Space under this Amendment as of the date of
execution of this Amendment by Landlord and Tenant in their then-current "as is"
condition. Notwithstanding the foregoing, promptly after the execution of this
Amendment by Landlord and Tenant, Landlord shall, at Landlord's sole cost and
expense, perform all work necessary to cause the electricity (including but not
limited to the electricity used to power the heating, ventilation and air
conditioning equipment ("HVAC") serving the Expansion Space) and gas consumed
in the Expansion Space separately metered. In performing such work, Landlord
shall make reasonable efforts not to cause undue interference with Tenant's
business operations in the Expansion Space. Except for the work described in
this Section 2, Landlord shall not be required to make any improvements in the
Expansion Space.
3. The term of the Lease (currently scheduled to expire under the Lease on
December 31, 2000), is hereby extended so as to run through the last day of the
month in which the fifth (5th) anniversary of the date of execution of this
Amendment by Landlord and Tenant occurs. All references in the Lease to the
"Original Term" shall be deemed to be references to the term of the Lease as
extended pursuant to the immediately preceding sentence.
4. As of the date of execution of this Amendment by Landlord and Tenant
(the "Expansion Commencement Date"), the Expansion Space shall be deemed to be a
part of the Demised Premises under the Lease, and all provisions of the Lease
relating to the Demised Premises generally (but not any provisions of the Lease
applicable specifically to the Existing Space or any portion thereof), except as
modified by this Amendment (and except with respect to Landlord's obligation to
perform or pay for any alterations or improvements in the Demised Premises,
other than as provided under this Amendment), shall thereafter be applicable to
the Existing Space and the Expansion Space. As of the Expansion Commencement
Date, the Demised Premises (i.e., the Existing Space and the Expansion Space)
shall be deemed to consist of 48,555 square feet of rentable floor area.
5. Effective as of the Expansion Commencement Date, Tenant shall pay to
Landlord during the remainder of the term of the Lease (as amended by this
Amendment) Annual Base Rent (as defined in the Lease) for the Demised Premises
(i.e., the Existing Space and, as of the Expansion Commencement Date, the
Expansion Space) in the following amounts for the following Lease Years (as
defined in the Lease):
(i) for the period from the Expansion Commencement Date through the
day immediately preceding the first (1st) anniversary of the Expansion
Commencement Date, Annual Base Rent shall equal $305,947.56 per annum
payable in monthly installments of $25,495.63;
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(ii) for the period from the first (1st) anniversary of the Expansion
Commencement Date through December 31, 2000, Annual Base Rent shall equal
$313,875.00 per annum payable in monthly installments of $26,156.25;
(iii) for the period from January 1, 2001, through the day immediately
preceding the second (2nd) anniversary of the Expansion Commencement Date,
Annual Base Rent shall equal $333,495.00 per annum payable in monthly
installments of $27,791.25;
(iv) for the period from second (2nd) anniversary of the Expansion
Commencement Date through December 31, 2001, Annual Base Rent shall equal
$341,422.56 per annum payable in monthly installments of $28,451.88;
(v) for the period from January 1, 2002, through the day immediately
preceding the third (3rd) anniversary of the Expansion Commencement Date,
Annual Base Rent shall equal $348,289.56 per annum payable in monthly
installments of $29,024.13;
(vi) for the period from the third (3rd) anniversary of the Expansion
Commencement Date through December 31, 2002, Annual Base Rent shall equal
$356,217.00 per annum payable in monthly installments of $29,684.75;
(vii) for the period from January 1, 2003, through the day immediately
preceding the fourth (4th) anniversary of the Expansion Commencement Date,
Annual Base Rent shall equal $364,065.00 per annum payable in monthly
installments of $30,338.75; and
(viii) for the period from the fourth (4th) anniversary of the
Expansion Commencement Date through the last day of the term, as extended
by this Amendment, Annual Base Rent shall equal $371,992.56 per annum
payable in monthly installments of $30,999.38.
6. Effective as of the Expansion Commencement Date, Lessee's Pro Rata
Share, as referred to in the Lease, for all periods from and after the Expansion
Commencement Date, shall equal 31.5292%.
7. The Security Deposit (as defined in the Lease) is hereby increased to
$50,991.26. Upon the execution of this Amendment, Tenant shall deliver to
Landlord funds in the amount of $25,103.76 to increase the Security Deposit to
such amount.
8. Section 1 of Article XXV of the Lease is deleted in its entirety.
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9. Tenant represents and warrants to Landlord that Tenant has not dealt
with any party to whom a commission might be owing in connection with this
Amendment, except for The Xxxxx Company ("Broker"), and shall indemnify, defend
and hold harmless Landlord from and against the claim of any party other than
Broker claiming a commission owing due to its dealings with Tenant in connection
with this Amendment. Landlord shall pay any commission payable to Broker in
connection with this Amendment under a separate agreement or agreements.
10. If there is any conflict between the terms and provisions of the Lease
and the terms and provisions of this Amendment, the terms and provisions of this
Amendment shall prevail. Landlord and Tenant ratify and affirm the Lease as
modified by this Amendment. Except as modified by this Amendment, the Lease
shall remain unmodified, in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment on the
day and year first above written.
WITNESS/ATTEST: TEACHERS INSURANCE AND ANNUITY ASSOCIATION
/s/ Xxxxxxx X. Xxxxxxxx BY: /s/ Xxxxx X. Taal
--------------------------------- ---------------------------------
XXXXXXX X. XXXXXXXX XXXXX X. TAAL
ITS: ASSOCIATE DIRECTOR
---------------------------------
NUTRI/SYSTEM LP
/s/ Xxxxxxx X. Xxxx BY: /s/ Xxxxx X. Xxxxxxx
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ITS: PRESIDENT
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EXHIBIT A
[GRAPHIC]
In the printed version of the document a floor plan appears.
LEASE SUMMARY
This summary shall not be construed as a part of the subject Lease, but
rather is intended as a guide to essential terms of the subject Lease for the
convenience and reference of Lessor and Lessee.
1. BUILDING AND LOCATION:
000 Xxxxx Xxxx
Xxxxxxx, XX
2. LESSOR:
Teachers Pennsylvania Realty, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
3. LESSEE:
Nutri/System LP
4. USE OF PREMISES: QUIET ENJOYMENT:
The premises may only be used for offices, and for the warehousing,
distribution and storage of non-hazardous and nonflammable materials.
Lessee shall procure any government licenses and permits from time to time
required for such permitted uses, and Lessor, at no expense to itself,
shall cooperate in procuring such licenses or permits. Without limiting the
generality of the foregoing, it is agreed that Lessee, and not Lessor,
shall be responsible for ascertaining whether Lessee's proposed use of the
Premises complies with the local zoning ordinance. The Premises may not be
used for any use that would cause the Demised Premises to be deemed a
"place of public accommodation" under the Americans with Disabilities Act
(ADA) of 1990.
5. LEASED AREA: 32,700 s.f.
6. LEASE TERM: 3 years
7. OPTIONS: One, 2 year option at a renewal rate of $5.35 s.f. triple net or
annual rent of $174,945.00 Year 1 of option period and a rental rate of
$5.56 s.f. triple net or an annual rent of $181,812.00 year 2 of option
period.
8. NO. OF. DAYS' NOTICE REQUIRED TO EXERCISE OPTION(S):
180 days
9. ANTICIPATED LEASE COMMENCEMENT DATE: January 1, 1998
10. ANTICIPATED LEASE EXPIRATION DATE: December 31, 2000
11. ANTICIPATED RENT COMMENCEMENT DATE: January 1, 1998
12. RENT STRUCTURE:
Rate/S.F. Annual Monthly
Period Per Year Base Rent Base Rent
-------- --------- ----------- ----------
Year 1-3 $4.75 NNN $155,325.00 $12,943.75
13. FREE RENT: None
14. LESSEE'S PRO RATA SHARE OF BUILDING AREA: 22% - 32,700 s.f. premises in a
150,000 s.f. building.
15. LESSEE'S INITIAL MONTHLY ESTIMATED PAYMENT TOWARDS REAL ESTATE TAXES,
OPERATING EXPENSES, AND INSURANCE ("ADDITIONAL RENT"):
Real Estate Taxes: $1,771.25
Operating Expenses: $1,607.75
Insurance: $ 218.00
Total: $3,597.00
16. LESSEE'S CONTRIBUTION TO COST OF IMPROVEMENTS: Lessee is taking space "as
is". Any improvements to the space are at Lessee's sole cost and
responsibility including the certificate of occupancy.
17. LESSEE'S RIGHT OF TERMINATION: None.
18. RIGHT OF FIRST REFUSAL: None.
19. SECURITY DEPOSIT: $25,887.50 (Two months rent).
20. ADDITIONAL PROVISIONS: None.
21. SEWERAGE (MUNICIPAL SEWER, SEPTIC, MDC INDUSTRIAL USER PERMIT):
Building is on public water and sewer.
22. AUTHORIZED BROKER(S): The Xxxxx Company and Xxxx Realty.
23. LESSEE'S REPRESENTATIVE TO BE CONTACTED IN AN
EMERGENCY (NAME, ADDRESS, TELEPHONE NUMBER):
Xxxxxx Xxxxxxx (000) 000-0000
STANDARD FORM INDUSTRIAL LEASE
Lease made this day of December, 1997 by and between Teachers Pennsylvania
Realty, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter with their
successors and assigns called the "Lessor") and Nutri/System LP (hereinafter
with its successors and permitted assigns called the "Lessee").
WITNESSETH:
Article I
Basic Lease Provisions
Section 1. The following sets forth basic data for this Lease. Each reference in
this Lease to any of the following subjects shall be construed to incorporate
the data stated for that subject in this Section:
Lessor: Teachers Pennsylvania Realty, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Lessee: Nutri/System LP, 000 Xxxxx Xxxx, Xxxxxxx, XX
Lessee's Address:
Demised Premises: Approximately 32,700 square feet of floor area on the first
floor of the building (the "Building") thereon erected and situated at 000 Xxxxx
Xxxx in the Town of Horsham, Pennsylvania on the parcel of land (the "Land")
described in Exhibit A attached hereto.
Original Term: Three (3) years from the "Commencement Date" of this Lease, as
defined in Article II, Section 5 hereof; provided, however, if the Commencement
Date is other than the first day of a calendar month then the Original Term
shall expire three (3) years after the last day of the calendar month in which
the term hereof commences.
Original Annual Base Rent:
YIELDING AND PAYING an Annual Base Rent during the Original Term hereof in the
amount of: $155,325.00 payable in advance in equal monthly installments of
$12,943.75.
All rates are triple net.
Anticipated Lease Commencement Date: January 1, 1998
Anticipated Rent Commencement Date: January 1, 1998
Anticipated Lease Expiration Date: December 31, 2000
Use of Premises: Quiet Enjoyment: The Premises will be used for general offices.
Lessor shall procure any government licenses and permits from time to time
required for such permitted uses, and Lessor, at no expense to itself, shall
cooperate in procuring such licenses or permits. Without limiting the generality
of the foregoing, it is agreed that Lessee, and not Lessor, shall be responsible
for ascertaining whether Lessee's proposed use of the Premises complies with the
local zoning ordinance. The Premises may not be used for any use that would
cause the Demised Premises to be deemed a "place of public accommodation" under
the Americans with Disabilities Act (ADA) of 1990.
Lessee's Pro Rata Share: 22%, based on 32,700 square feet of floor area in the
Demised Premises and 150,000 square feet of total leasable area in the building.
Authorized Broker: The Xxxxx Company and Xxxx Realty
Security Deposit: $25,887.50 (two months rent)
Section 2. The Exhibits listed below are incorporated this Lease by reference
and are to be construed as part of this Lease:
Exhibit A - Description of the Land
B - Intentionally omitted
C - Floor Plan of the Demised Premises
D - Lessor's Initial Estimate of Lessee's Monthly
Pro Rata Share of Real Estate Taxes, Operating
Expenses and Insurance
E - HVAC Maintenance Schedule
F - Signage Standards
G - Subordination Agreement
H - Approved Hazardous Substances
Article II
Demised Premises; Term and Commencement
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Section 1. In consideration of the rents and covenants herein contained on the
part of the Lessee to be paid, performed and observed, the Lessor hereby leases
to the Lessee and the Lessee hereby leases from the Lessor, subject to the terms
and provisions hereinafter set forth, the Demised Premises; together with the
nonexclusive right to use, in common with others lawfully entitled thereto, the
common areas of the Building, the parking areas on the Land as same may exist
from time to time, for parking purposes only, and the driveways and walkways on
the Land, as same may exist from time to time, for roadway and walkway purposes
only. The Demised Premises shall be constructed substantially in accordance with
the outline specification attached hereto as Exhibit B and the floor plan
attached hereto as Exhibit C.
Section 2. The Demised Premises are leased subject to the reservation to the
Lessor of the roof and exterior walls of the Demised Premises and of the
Building, and subject to the Lessor's reservation of the right (without thereby
assuming the obligation) to install, maintain, use, repair and replace (in such
manner as to reduce to a minimum to the extent reasonably practicable the
interference with Lessee's use of the Demised Premises) all pipes, ducts, wires,
meters, utility lines and the like which are in the judgment of the Lessor,
required to be in the Demised Premises. The Lessor reserves the right to alter,
reduce, increase and relocate such parking areas, driveways and walkways from
time to time and any common facilities within the Building. The Lessor reserves
the right to make additions to the Building, to erect additional buildings and
structures on the Land, and to continue to do construction work on the Building
and the Land following delivery of the Demised Premises to Lessee.
Section 3. TO HAVE AND TO HOLD the Demised Premises for the original term unless
sooner terminated as herein provided.
Section 4. Lessor shall engage an architect or engineer to prepare a detailed
plan of improvements (the "Engineered Plan", which term shall also be deemed to
include the improvements specified in Exhibits B and C to this Lease) to be made
to prepare the Demised Premises for Lessee's occupancy. Lessor shall submit the
Engineered Plan for Lessee's approval and Lessee shall respond within five (5)
business days. Upon Lessee's written approval of the Engineered Plan, Lessor
shall promptly commence and shall use diligent efforts to complete all work
("Lessor's Work") specified in the Engineered Plan by the Lessor's Work
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Completion Date provided in Article I, Section 1 of this Lease.
Section 5. The term "Commencement Date" as used in this Lease shall be deemed to
refer to the earlier to occur of (i) the date on which Lessor has completed
Lessor's work (except for punch-list items), or (ii) the date on which the
demised premises or any portion thereof are first used for the conduct of
Lessee's business. Lessor shall complete all punch-list items as soon as
conditions permit and Lessee shall afford Lessor reasonable access to the
Demised Premises for such purposes. "Punch-list" items shall mean minor items of
work (and, if applicable, adjustment of equipment and fixtures) which can be
completed after Lessee has taken occupancy of the Demised Premises without
causing undue interference with Lessee's use of the Demised Premises. At any
time after the Commencement Date is determined as aforesaid, Lessee agrees upon
demand of Lessor to execute, acknowledge and deliver a written statement in
recordable form satisfactory to Lessor stating the Commencement Date hereunder.
Section 6. Lessor shall have no obligation to change the Engineered Plan of the
Demised Premises as approved by Lessee, but shall use good faith efforts to
accommodate any requests by Lessee for modifications thereof ("Changes"),
provided (i) each such Change shall be described in a written Change Order
signed by Lessor and Lessee and any additional cost shall be payable by Lessee
in full upon the execution of such Change Order, and (ii) there shall be no
delay or extension of the Commencement Date on account of Lessor's failure to
complete any work described in a Change Order, although Lessor shall use
diligent efforts to complete such work as soon as practicable.
Article III
Rent
Section 1. YIELDING AND PAYING an annual base rent during the Original Term
hereof in the amount of the Original Annual Base Rent. All such rent shall be
payable in advance on the first day of each calendar month during the term
hereof commencing on the Rent Commencement Date. If the Rent Commencement Date
is other than the first day of a calendar month, base rent for the first
incomplete month, prorated at the rate set forth above, shall be paid on the
Rent Commencement Date.
Section 2. The Original Annual Base Rent shall, during the Original Term, be
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Section 3. The Lessee shall pay, as additional rent hereunder, during the
Original Term hereof and any extension hereof, Lessee's Pro Rata Share of any
and all real estate taxes and betterments and other assessments (ordinary and
extraordinary), water rents, sewer and other charges which shall be imposed,
assessed or levied upon the Building and the Land. In addition, the Lessee shall
pay 100% of real estate taxes, betterments and other assessments due to any
alterations or improvements made by the Lessee to the Demised Premises. If any
betterment assessment is payable in installments, Lessee shall only be obligated
to pay its Pro Rata Share of the installments (including interest) which are
allocable to the term of this Lease or any extension of the term hereof. If this
Lease shall commence on a date other than the first day of a tax year, or
terminate on a date other than the last day of a tax year, the Lessee for that
tax year shall pay to the Lessor only such portion of such additional rent for
the whole tax year as shall be proportionate to the portion of the tax year
contained within the term of this Lease.
Section 4. The term "real estate taxes" shall mean all taxes and special
assessments of every kind and nature assessed by a governmental authority on the
Land or the Building which the Lessor shall become obligated to pay because of
or in connection with the ownership, leasing and operation of the Land or
Building. The foregoing provisions are predicated upon the present system of
taxation in the Commonwealth of Pennsylvania. If taxes upon rentals or otherwise
pertaining to the Demised Premises shall be substituted, in whole or in part,
for the present ad valorem real estate taxes or assessed in addition thereto,
then Lessee's obligation to pay such taxes shall be based upon such substituted
taxes, to the extent to which the same shall be a substitute for present ad
valorem real estate taxes, together with such additional taxes, and such
substitute or additional taxes shall be deemed to be included within the term
"real estate taxes." Except as hereinabove provided, nothing herein contained
shall otherwise require or be construed to require Lessee to reimburse Lessor
for any inheritance, estate, succession, transfer, gift, franchise, income or
earnings, profit, excess profit tax, capital stock, capital levy or corporate or
other similar tax which is or may be imposed upon Lessor or upon Lessor's
business.
Section 5. During the Original Term and any extensions or renewals thereof,
Lessee shall pay to Lessor, as additional rent, Lessee's Pro Rata Share of the
costs paid or incurred
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by Lessor in managing, operating, maintaining and repairing the Building, and
any additions to the Building (except only for structural repairs set forth in
Article VI, Section 2) and in maintaining and repairing the Land, including,
without limitation, parking areas, driveways, walkways, and landscaping thereon.
Such costs shall include, without limitation: (1) all costs of providing
utilities, (including, without limitation, where applicable, heat, cooling, and
light), for maintaining and repairing the common areas of the Building, the
parking areas, driveways and walkways on the Land (including, without
limitation, resurfacing, striping and sweeping) and removing snow and ice from
the parking areas, driveways and walkways on the Land and from the roof of the
Building; (2) all costs of maintaining and repairing all drainage, sewage and/or
septic systems and utility facilities and equipment on the Land whether above or
underground; (3) all costs of operating, maintaining and repairing the Building
and any additions thereto (structural repairs set forth in Article VI, Section 2
excepted), including without limitation, security and traffic control,
maintenance and repair of all fixtures and equipment and utility facilities,
including sewer and/or septic systems not serving exclusively the Demised
Premises nor serving exclusively any other tenant; (4) reasonable management,
legal, accounting and other professional fees (including management fees)
incurred in connection with the operation, maintenance and management of the
Building and the Land. The Tenant's cost of legal, accounting, or professional
fees shall not exceed five cents ($.05) per square foot in any given year.
Section 6. During the Original Term and any extensions or renewals thereof,
Lessee shall pay Lessor, as additional rent hereunder, Lessee's Pro Rata Share
of Lessor's cost of the following insurance on the Building and the Land: fire,
extended coverage, flood, earthquake, boiler and machinery, and such other
insurance covering all hazards included within customary "all risks" coverage,
including without limitation insurance covering fire, lightning, vandalism,
malicious mischief, and sprinkler leakage, said insurance to be on a full value,
repair, or replacement basis as determined by Lessor; loss of rents insurance;
and such other insurance as may be requested by Lessor's mortgagee. In addition,
notwithstanding the foregoing, Lessee shall pay as additional rent, 100% of
Lessor's cost of any insurance with respect to the Building or the Land which is
attributable solely to Lessee's particular use of the Demised Premises.
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Section 7. During the original term and any extensions or renewals thereof,
Lessee shall pay Lessor, as additional rent hereunder, Lessee's Pro Rata Share
of Lessor's cost for comprehensive liability insurance indemnifying the Lessor
against all claims and demands for any injury to persons or property which may
be claimed to have occurred in or upon the Building or the Land in such amounts
as Lessor shall from time to time determine.
Section 8. Lessee's Pro Rata Share of Lessor's costs relating to real estate
taxes, operating expenses and insurance, referred to in Sections 3 through 7 of
this Article III, shall be paid in advance in 12 equal monthly estimated
installments (based on an amount estimated by Lessor) due and payable on the
same dates as the monthly installments of annual base rent payable hereunder.
Lessee's obligation to pay its Pro Rata Share of Lessor's costs relating to real
estate taxes, operating expenses, and insurance (and ail other charges in the
nature of additional rent provided in this Lease) shall begin as of the
Commencement Date of this Lease and shall not be affected by any "free rent" or
other concessions relating to Lessee's obligation to pay the Original Annual
Base Rent provided in Section 1 of this Article III. As of the end of each
fiscal year of Lessor (meaning the twelve-month period used by the Lessor
preparing its annual financial statements), Lessor shall furnish to Lessee a
statement in reasonable detail setting forth the computation of such costs;
thereupon Lessee shall pay any deficiency, and any overpayment shall be refunded
to Lessee. If the Lease shall commence on a date other than the first day of
Lessor's fiscal year, or terminate on a date other than the last day of Lessor's
fiscal year, the Lessee for that respective fiscal year shall pay to the Lessor
only a proportionate share of Lessor's costs for the whole fiscal year as shall
be proportionate to the portion of the fiscal year contained within the term (as
extended or renewed) of this Lease. Lessor's initial estimate of the monthly
installments payable by Lessee hereunder is attached hereto as Exhibit D.
Section 9. This is, and is intended to be, a NET LEASE, and accordingly, except
as expressly otherwise provided for herein, all charges, assessments and
impositions made upon the Land and the Building and all costs, expenses and
other obligations paid or incurred by Lessor of any kind or nature whatsoever in
insuring, maintaining and/or repairing the Demised Premises or the Building or
the Land or any additions to the Building, (other than costs of maintaining or
repairing the interior of space leased to others or available for lease to
others and other than structural
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repairs set forth in Article VI, Section 2 hereof) shall be included in
determining Lessor's costs of which Lessee is obligated to pay a pro rata share
or the entirety, as the case may be, as provided hereinabove.
Section 10. All payments of base rent and additional rent hereunder shall be
mailed or delivered to the Lessor, when due as set forth herein without offset
or deduction and without previous demand therefore and if other than cash be
made payable to the order of Teachers Pennsylvania Realty, Inc. (Lessor), c/o
The Xxxxx Company (Rental Agent for Lessor) at 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx,
XX 00000, or otherwise as Lessor may notify Lessee from time to time.
Article IV
Covenants
Lessee covenants and agrees as follows:
(a) To pay when due the said base rent and additional rent at the times and in
the manner set forth herein.
(b) To procure any and all licenses and permits required for any use to be made
of the Demised Premises by Lessee, to keep the Demised Premises equipped
with all safety appliances required by law or ordinance because of any use
of the Demised Premises by Lessee and to make any alterations or changes
which may be necessary to meet the obligations and standards promulgated
under the Occupational Safety and Health Act of 1970 which are related to
Lessee's use and occupation of the Demised Premises.
(c) To pay promptly when due the entire cost of any work to the Demised
Premises undertaken by Lessee so that said premises shall at all times be
free of liens for labor and materials; to procure all necessary permits
before undertaking such work; to do all of such work in a good and
workmanlike manner, employing new materials of good quality and complying
with all governmental and insurance requirements; and to save Lessor
harmless and indemnified from all injury, loss, claims or damage to any
person or property occasioned by or growing out of such work including,
without limitation, reasonable attorneys' fees. If so requested by Lessor,
Lessee shall take over Lessor's defense in any action related to work
undertaken by Lessee on the Demised Premises.
(d) To permit Lessor and anyone claiming under Lessor at reasonable times to
enter into and examine the Demised
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Premises and to show the Demised Premises to prospective purchasers or
tenants, provided that Lessor shall not thereby unreasonably interfere with
the conduct of Lessee's business; to permit Lessor to enter said premises
to make such repairs, improvements, alterations or additions thereto as may
be required in order to comply with the requirements of any public
authority having jurisdiction of the Demised Premises, or as may be
required of Lessor under the terms of this Lease, provided that such entry
shall not unreasonably interfere with the conduct of Lessee's business; and
to permit the affixing to any suitable part of the Demised Premises
reasonable notice for letting or selling the Demised Premises or the
Building; to permit Lessor to enter the Demised Premises at any time to
make emergency repairs.
(e) To pay when due any and all State, Federal or local taxes based upon
Lessee's personal property or resulting from any permitted alteration,
additions or improvements made by Lessee to the Demised Premises.
(f) To conform to and comply with all laws, orders and regulations of any
governmental authorities and any public body or officer having jurisdiction
over the Demised Premises.
(g) To comply with any rules, regulations or recommendations of the National
Board of Fire Underwriters, any rating bureau, or any similar association
performing such function, and any insurance company insuring the Demised
Premises with respect to the Demised Premises and/or Lessee's use and
occupation thereof, so long as Lessee shall not be required to make
structural changes unless required by Lessee's particular use of the
premises.
(h) To keep the Demised Premises adequately heated for the protection of the
plumbing herein.
(i) To permit no waste with respect to the Demised Premises.
(j) To permit no storage of materials outside of the Demised Premises except
for such temporary storage as may be required for reasonable periods of
time due to unforeseen circumstances or emergencies.
(k) To comply with such reasonable rules and regulations now or hereafter made
by Lessor for and with respect to
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the care and use of the Building, the Land and their facilities and
approaches, it being understood that Lessor shall not be liable to Lessee
for the failure of any other tenants of the Building to conform to such
rules and regulations.
(1) Not to do, or suffer to be done, or to keep, or suffer to be kept, or omit
to do anything in, upon or about the Demised Premises which may prevent the
obtaining of any insurance on the Building or the Demised Premises or which
may make void or voidable any insurance on the Building or the Demised
Premises.
Article V
Use of Demised Premises
Section 1. The Lessee shall have the right to use the Demised Premises only for
Permitted Uses and for no other purpose whatsoever, but in no event shall Lessee
conduct at the Demised Premises any use or do anything which is offensive,
constitutes a nuisance or violates any provisions of any zoning, building or
other applicable laws, ordinances or regulations.
Section 2. Lessee further agrees to conform to the following provisions during
the entire term of this Lease or any extension thereof;
(a) Lessee shall always conduct its operations in the Demised Premises under its
present trade name or any future trade name which is not offensive or in
violation of law, unless Lessor shall otherwise consent in writing, which
consent shall not be unreasonably withheld;
(b) Lessee shall not permit any auction, fire, going-out-of-business, or
bankruptcy sales or any retail sales whatsoever to be conducted within the
Demised Premises, without the prior written consent of the Lessor;
(c) Lessee shall not use the sidewalks, parking areas or other outside areas for
advertising or business purposes or otherwise obstruct the same;
(d) Lessee shall, at its own cost and expense, be responsible for the prompt
regular removal of all trash, refuse, and the like, from the Demised Premises
and shall insure that same be kept in covered containers at all times;
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(e) All curtains and other window treatments visible from the exterior of the
Demised Premises shall be white in color;
(f) Lessee shall take whatever measures are necessary to insure that floor load
limitations are not exceeded in the Demised Premises; and
(g) Lessee shall not cause any offensive odors or loud noise (including, but
without limitation, the use of loudspeakers), nor take nor permit any action
which constitutes a nuisance or menace to any other occupant of other premises
in the Building, and in no event shall any loud noises or offensive odors be
emitted from the Demised Premises.
Article VI
Repairs and Alterations
Section l. The Lessee shall keep the Demised Premises in a neat, clean, sanitary
condition and in good order and repair and in good working condition, including
all electrical, plumbing, gas, sprinkler, and equipment within or serving the
Demised Premises (including without limitation the maintenance, repair and/or
replacement of the HVAC system serving the Demised Premises), and all fixtures
and interior walls, floors, ceilings, signs (including exterior signs where
permitted) and all interior building appliances and similar equipment and the
exterior and the interior portions of all windows, window frames, doors, door
frames, and all other glass or plateglass thereon. In connection therewith, and
without limiting Lessee's obligations hereunder, Lessee shall perform the
maintenance as set forth on the HVAC maintenance schedule attached hereto as
Exhibit E and made a part hereof. Lessor shall use reasonable efforts to assign
to Lessee or to enforce on Lessee's behalf any written warranties from
contractors or manufacturers applicable to repairs and replacements to be
performed by Lessee.
Section 2. The Lessor shall, at its own expense, promptly after receipt of
written notice from the Lessee, make any necessary repairs to the roof,
foundations, beams, girders, mullions and exterior walls of the Demised Premises
only (exclusive of glass, window frames, windows, doors, door frames, and signs,
which repairs shall be made by the Lessee) except where such repairs are
required by reason of any act or negligence of the Lessee, its employees,
agents, licensees, suppliers, contractors, or guests ("structural repairs"). The
Lessor shall commence repairs to be made by it as promptly as practicable after
the receipt of such
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notice; provided, however, that the Lessor (without limiting Section 15 of
Article XXII hereof) shall not be liable for a delay in commencement of the
making of such repairs or for a delay or failure to complete such repairs where
such delay or failure is attributable to strikes or other labor conditions,
inability or difficulty in obtaining materials or services, wars, delays due to
the weather, or other cause beyond the reasonable control of the Lessor.
Section 3. Lessor shall be responsible for the maintenance of the grass and
shrubs located on the Land and shall be responsible for maintaining, repairing
and lighting of common areas of the Building and maintaining, repairing,
lighting and removing snow from the parking areas, driveways and walkways on the
Land, except where the necessity thereof is due to the willful or negligent acts
of Lessee or its agents, employees, licensees, suppliers, contractors or guests.
Section 4. All costs paid or incurred by Lessor in performing any of its
obligations under this Article VI (except for structural repairs set forth in
Section 2 hereof) shall be included in Lessor's costs of maintaining and
repairing as set forth in Article III, Section 5.
Section 5. The Lessee shall at the expiration or earlier termination of this
Lease remove its goods and effects and peaceably yield up the Demised Premises,
clean and in the same order, repair and condition as at the Commencement Date of
the term hereof, or as the same may be put in during the term hereof, reasonable
wear and tear excepted (provided good maintenance practices are employed),
except for repairs which the Lessor agrees to make as herein provided, and
except for damage by fire or insured casualty, and Lessee shall promptly repair
any injury done to the Demised Premises, the Building or the Land by the
installation or removal of the Lessee's fixtures or other property.
Section 6. The Lessee shall have the right at its expense to make alterations,
improvements or additions to the interior of the Demised Premises, provided
that;
(a) No such alteration, addition or improvement shall lessen the fair market
value of the Demised Premises or the Building, and any such alteration, addition
or improvement shall be done in accordance with all applicable laws, in a good
and workmanlike manner with good quality material, and shall not impair the
safety of the structure of the Building.
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(b) Any such alteration, addition, or improvement shall be made in accordance
with previously prepared plans and specifications, and such plans and
specifications must have the written approval of the Lessor before any work
thereon shall be commenced, such approval with respect to non-structural
alterations, not to be unreasonably withheld. With respect to structural
alterations, improvements or additions, Lessor shall have absolute discretion to
withhold or grant its consent.
(c) Prior to the commencement of work on any such alteration, addition, or
improvement, the plans and specifications covering the same shall have been
submitted to and approved by:
1. All municipal or other governmental departments or agencies having
jurisdiction over the subject matter thereof, and
2. Any mortgagee having an interest in or lien upon the Building or the Land, if
required by the terms of the mortgage, it being understood that the Lessor will
join in any application to any such mortgagee to obtain such approval with
respect to any alteration, addition, or improvement which the Lessor shall have
approved under subparagraph b above.
(d) The Lessee shall pay the increased premium, if any, for the insurance
coverage of the Demised Premises or the Building resulting from any additional
risk during the course of construction or installation of any such alteration,
addition, or improvement or resulting from such alteration, addition or
improvement.
All additions, improvements and fixtures (other than the usual trade fixtures,
furniture and equipment installed by the Lessee which may be removed from the
Demised Premises without injury thereto) which may be made or installed by
either the Lessor or the Lessee and which are attached to a floor, wall or
ceiling, including any linoleum or other floor covering of similar character,
shall remain upon the Demised Premises, and at the expiration or earlier
termination of this Lease shall be surrendered with the Demised Premises as a
part thereof. However, the Lessor upon termination of this Lease may require the
Lessee at Lessee's expense to restore the Demised Premises to their condition at
the commencement of this Lease in whole or in part.
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Any trade fixtures, furniture and equipment owned by the Lessee which may be
removed from the Demised Premises without injury thereto shall remain the
property of the Lessee and shall be removed by the Lessee from the Demised
Premises without injury thereto prior to the expiration or earlier termination
of this Lease. In the event Lessee fails to remove said fixtures, furniture
and/or equipment prior to the expiration or earlier termination of this Lease
they shall be deemed abandoned and may be disposed of by Lessor in any way it
sees fit, and Lessor shall not be liable to Lessee for any such disposal.
Section 7. Without limiting Lessee's obligations in this Lease or elsewhere,
Lessee shall promptly, after notice from the Lessor, repair at its own expense
any damage to the exterior of the Demised Premises, the Building or to the
utilities serving the Demised Premises (including the HVAC system), or to the
Land (including without limitation the parking areas, driveways, walkways, and
grass and shrubs located on the Land) caused by any act or negligence of the
Lessee, its agents, employees, licensees, suppliers, contractors, or guests.
Section 8. It is understood that Lessor's obligations under this Article VI are
subject to the provisions and limitations set forth in Article XV and XVI.
Article VII
Utilities
The Lessee shall pay when due all charges for utility services provided to the
Demised Premises including, without limitation, electricity, gas, water,
telephone, and the cost of fuel to heat or air condition the Demised Premises.
If water consumed by the Demised Premises is not metered separately from water
consumed by the remainder of the Building, Lessee shall pay to Lessor, in
accordance with the provisions of Section 8 of Article III, Lessee's Pro Rata
Share of the aforesaid. The aforementioned share is based on the assumption that
water in the Demised Premises will be used only for ordinary drinking and
lavatory purposes. If water is consumed in the Demised Premises for other
purposes or in excessive quantities or if Lessee's heating and/or cooling
requirements are materially greater than that of other tenants or prospective
tenants, then Lessee shall pay to Lessor, on demand from time to time, charges
for said additional water as reasonably estimated by Lessor. Lessor reserves the
right to install a water meter to measure water consumption in the Demised
Premises if not installed at the
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Commencement Date. The Lessor shall not be liable for any interruption of
electricity, gas water, telephone, sewage and/or septic system or other utility
service supplied to the Demised Premises, when in Lessor's judgment it is deemed
necessary by reason of accident, emergency, repair work, or otherwise. No such
interruption or stoppage of utility service shall be deemed to be an eviction of
the Lessee or relieve Lessee from any of the Lessee's obligations under this
Lease.
Article VIII
Indemnity and Public Liability Insurance
Section 1. The Lessee shall assume exclusive control of the Demised Premises,
and all tort liabilities with respect to the control or occupancy thereof and
shall save the Lessor harmless and indemnified from all injury, loss, claims or
damage of whatever nature to any person or property in or about the Demised
Premises, the Building and/or the Land, arising from any act, omission or
negligence of the Lessee or Lessee's subtenants or concessionaires or the
employees, agents, contractors, suppliers, licensees, invites, or customers of
any of the foregoing or otherwise resulting from Lessee's use, maintenance and
occupancy of the Demised Premises or any thing or facility kept or used thereon.
Upon request of Lessor, the Lessee shall take over the Lessor's defense in any
action related to such matter for which Lessee has agreed to indemnify Lessor.
Section 2. Lessee agrees to maintain in full force during the term hereof, and
any extensions thereof, a policy of public liability and property damage
insurance under which the Lessor (and such other persons as are in privity of
estate with Lessor as may be set out in notice from the Lessor from time to
time) and Lessee are named as insureds, and under which the insurer agrees to
indemnify and hold Lessor and those in privity of estate with Lessor harmless
from and against all cost, expense and/or liability arising out of or based upon
any and all claims, accidents, injuries, and damages mentioned in Section 1 of
This Article VIII. Each such policy shall be non-cancellable with respect to the
Lessor and Lessor's said designees without ten (10) days' prior written notice
to Lessor, and a duplicate original or certificate thereof shall be delivered to
Lessor upon execution of this Lease. The minimum limits of liability of such
insurance shall be One Million Dollars ($1,000,000) for injury (or death) to any
one person, and Two Million Dollars ($2,000,000) for injury (or death) to
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more than one person, and Five Hundred Thousand Dollars ($500,000) with respect
to damage to property.
Section 3. Neither the Lessor nor any agent or employee of the Lessor shall be
liable for any loss or damage to the person or property of the Lessee, or of any
subtenant, or concessionaire, or of any employee, customer, licensee, invitee,
contractor or supplier, or guest of any of the foregoing, except where such
damage is attributable solely to the negligence of the Lessor its agents or
employees. Without in any way limiting the generality of the foregoing, Lessor,
its agents or employees shall not be liable, in any event, for any such damage
resulting;
(a) from the interruption to business resulting from theft, fire, explosion,
falling plaster, steam, gas, electricity, water, rain or snow or leaks from any
part of said Demised Premises, or from the pipes, appliances or plumbing or from
dampness or any other cause;
(b) from any hidden defect in, under or upon the Demised Premises, the Building
or the Land; and/or
(c) from acts or omissions or persons occupying adjacent premises or otherwise
entitled to use the Building and/or Land.
Section 4. Lessor shall not be liable to Lessee for any compensation or
reduction of rent by reason of inconvenience or annoyance or for loss of
business arising from power losses or shortages or from the necessity of
Lessor's entering the Demised Premises for any of the purposes in this Lease
authorized, or for repairing the Demised Premises or any portions of the
Building or Land in accordance herewith, nor shall any such entry, interruption
or similar event give rise to a claim in Lessee's favor that such event
constitutes actual or constructive, total or partial, eviction from the Demised
Premises.
Article IX
Fire and Extended Coverage Insurance
Section 1. The Lessor shall obtain the insurance for which Lessee makes required
payments to Lessor under Article III, Section 6.
Section 2. The Lessee shall not acquire, by being named, at the election of
Lessor, as insured under any fire or extended coverage insurance on the Demised
Premises or the Building, any right to participate in the adjustment of loss or
to receive insurance proceeds and agrees upon request
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promptly to endorse any checks or other instruments in payment of loss in which
the Lessee is named as payee.
Section 3. The Lessee shall, at its own expense, maintain fire and comprehensive
casualty insurance of adequate amounts with respect to its own fixtures,
merchandise, equipment and other property contained in the Demised Premises, it
being understood that all merchandise, furniture, fixtures, effects and property
of every kind of the Lessee which may be in the Demised Premises, or the
Building or on the Land shall be at the sole risk and hazard of the Lessee.
Article X
Signs
The Lessee shall submit to the Lessor, for Lessor's prior approval, the design
and specifications for any signs to be installed by Lessee. All Lessee's signs
shall conform to Lessor's signage standards attached hereto as Exhibit F and to
any applicable municipal or other law, rules, ordinance or code. If a building
permit is required to install Lessee's sign, Lessee shall furnish Lessor with a
copy of such permit prior to installation. Lessee shall maintain and keep in
good repair any signs erected by it. Lessee shall be responsible for any repairs
to the Demised Premises or the Building related to the erection of said signs.
Lessee shall remove all of its signs upon expiration of the term or earlier
termination of this Lease and shall promptly repair any damage related to the
erection or removal of said signs.
Article XI
Assignment or Subletting
A. Lessee shall not have the right to assign or pledge this Lease or to sublet
the whole or any part of the Premises, whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Lessee, or assign this Lease for security purposes, without the prior
written consent of Lessor, and such restrictions shall be binding upon any
assignee or sublessee to which Lessor has consented. In the event Lessee
desires to sublet the Premises, or any portion thereof, or assign this
Lease, Lessee shall give written notice thereof to Lessor at least 90 days
but no more than 180 days prior to the proposed commencement date of such
subletting or assignment, which notice shall set forth the name of the
proposed sublessee or assignee, the relevant terms
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of any sublease, and copies of financial reports and other financial
information of the proposed sublessee or assignee. Notwithstanding any
permitted assignment or subletting, Lessee shall at all times remain
directly and primarily responsible and liable for the payment of the rent
herein specified and for compliance with all of its other obligations under
this Lease. Upon the occurrence of an "event of default" (as hereinafter
defined), if the Premises or any part thereof are then sublet,
Lessor, in addition to any other remedies provided herein or by law, may
collect directly from such sublessee all rents due and becoming due to
Lessee under such sublease and apply such rent against any sums due to
Lessor from Lessee hereunder. No such collection directly from an assignee
or sublessee shall be construed to constitute a novation or a release of
Lessee from the further performance or Lessee's obligations hereunder.
B. In addition to Lessor's right to approve any sublessee or assignee, Lessor
shall have the option, in its sole discretion, in the event of any proposed
subletting or assignment, to terminate this Lease, or in the case of a
proposed subletting of less than the entire Premises, to recapture the
portion of the Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised by Lessor's
giving Lessee written notice thereof within sixty (60) days following
Lessor's receipt of Lessee's written notice as required above. If this
Lease shall be terminated with respect to the entire Premises the Term
shall end on the date stated in Lessee's notice as the effective date of
the sublease or assignment as if that date had been originally fixed in
this Lease for the expiration of the Term. If Lessor recaptures only a
portion of the Premises, the rent during the unexpired Term shall xxxxx,
proportionately, based on the rent as of the date immediately prior to
such recapture. Lessee shall, at Lessee's own cost and expense, discharge
in full any outstanding commission obligation or the part of Lessor with
respect to this Lease, and any commissions which may be due and owing as a
result of any proposed assignment or subletting, whether or not the
Premises are captured pursuant hereto and rented by Lessor to the proposed
lessee or any other lessee.
C. Consent by Lessor to any assignment or subletting shall not include consent
to the assignment or
18
transferring of any lease renewal option rights or space option rights of
the Premises, special privileges or extra services granted to Lessee by
this Lease, or addendum or amendment thereto of letter or agreement (and
such options, rights, privileges or services shall terminate upon such
assignment), unless Lessor specifically grants in writing such options,
rights, privileges or services to assignee or sublessee. Any sale,
assignment, mortgage, transfer of this Lease or subletting which does not
comply with the provisions or this Article shall be void.
D. In the event that Lessee sells, sublets, assigns or transfers this Lease
and at any time receives periodic rent and/or other consideration which
exceeds that which Lessee would at that time be obligated to pay to Lessor,
Lessee shall pay to Lessor 100% of the gross increase in such rent as such
rent is received by Lessee and 100% of any other consideration received by
Lessee from such sublessee in connection with such sublease, or in the
case of an assignment of this Lease by Lessee, Lessor shall receive 100% of
any consideration paid to Lessee by such assignee in connection with such
assignment.
E. Should Lessor agree to authorize and execute an assignment or sublease
agreement, Lessee will pay to Lessor on demand a sum equal to all of
Lessor's costs, including attorneys' fees, incurred in connection with such
assignment or transfer.
F. The nature of the occupancy, the use and the manner of use of the Premises
by the proposed subtenant or assignee shall not impose on Lessor any
requirements of the Americans with Disabilities Act (ADA) of 1990 in excess
of those requirements imposed on Lessor in the absence of such proposed
subtenant or assignee or such occupancy, use or manner of use, unless such
proposed subtenant or assignee shall have agreed to comply with each of
such excess requirements and, at Lessor's option, shall have furnished
Lessor with such security as Lessor may require to assure that such
subtenant or assignee shall so comply.
Article XII
Subordination
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Section 1. The Lessee shall from time to time, within ten (10) days after
written demand of Lessor, either (as demanded by Lessor) subordinate this Lease
or make this Lease superior to any existing and/or future Mortgage heretofore or
hereafter placed upon the Land and to any renewal, modification, replacement or
extension of such Mortgage, and to any and all advances made to or to be made
thereunder, provided that said Mortgagee enter into an agreement with Lessee by
the terms of which the Mortgagee under said Mortgage will agree that in the
event of foreclosure thereof, said Mortgagee will not disturb the possession of
the Lessee under the Lease so long as the Lessee is not in default hereunder and
the Lessee will agree to recognize the holder of such Mortgage as the Lessor in
such event, which agreement shall be made expressly binding upon the successors
and assigns of the Lessee, and the Mortgagee and upon anyone purchasing said
Demised Premises or Building at any foreclosure sale. Notwithstanding the
foregoing if requested by Lessor or a Mortgagee of the Demised Premises, Lessee
agrees to promptly execute a Subordination and Attornment Agreement
substantially in the form attached hereto as Exhibit G, or in the mortgagee's
standard form containing its usual terms and conditions, and failure to execute
such an agreement promptly upon request shall be a default under this Lease. The
Lessee and the Lessor agree to execute and deliver any instruments necessary to
carry out the agreements contained in this Section. Any such Mortgage to which
this Lease shall be subordinated or be made superior may contain such other
terms, provisions and conditions as the Mortgagee deems usual or customary. The
Lessee hereby irrevocably appoints the Lessor and any successor or assigns its
attorney-in-fact (which appointment is coupled with an interest) to execute and
deliver any such instrument of subordination for and on behalf of the Lessee and
its successors and assigns.
Section 2. If any Mortgagee elects by written notice given to the Lessee, to
have this Lease and the interest of the Lessee hereunder superior to any such
Mortgage then this Lease and the interest of the Lessee hereunder shall be
deemed superior to any such Mortgage, whether this Lease was executed before or
after such Mortgage.
Section 3. Lessee will, upon request by Lessor or any Mortgagee, from time to
time, execute and deliver to such party (a) an "estoppel Letter", so called, in
form satisfactory to such party and/or (b) a copy of every notice of default
delivered by Lessee to Lessor at the same time
20
and in the same manner as to Lessor and/or (c) an agreement consenting to an
assignment of this Lease to such party and acknowledging such assignment.
Section 4. For purposes hereof, the term "Mortgage" shall mean any real estate
mortgages, ground leases, deeds of trust, security agreements or indentures
affecting the Land or the Building; the term "Mortgagee" shall include the
holder of any such real estate mortgage, any ground lessor or any trustees or
holders of any such security agreements or indentures.
Article XIII
Self-Help
If the Lessee shall default in the performance or observance of any agreement or
condition in this Lease contained on its part to be performed or observed, and
shall not cure such default within thirty (30) days after notice from Lessor
specifying the default (or, if said default cannot reasonably be expected to be
cured within such thirty-day period, shall not within said period commence to
cure such default and thereafter prosecute the curing of such default to
completion with due diligence) Lessor may, at its option, without waiving any
claim for breach of agreement, at any time thereafter cure such default for the
account of Lessee, and make all necessary payments in connection therewith,
including but not limiting the same to reasonable counsel fees, costs or charges
of or in connection with any legal action which may have been brought, and any
amount paid by Lessor in so doing shall be deemed paid for the account of Lessee
and Lessee agrees to reimburse Lessor therefore with interest thereon at 18% per
annum, such sums payable by Lessee to Lessor to be deemed additional rent;
provided that Lessor may cure any such default as aforesaid prior to the
expiration of any waiting or cure period but after Lessor has exerted best
efforts to give actual notice (by telephone or otherwise), if the curing of such
default prior to the expiration of said waiting or cure period is reasonably
necessary to protect the real estate or Lessor's interest therein, or to prevent
injury or damage to persons or property.
Article XIV
Waiver of Subrogation
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Lessor and Lessee each hereby releases the other from any and all liability or
responsibility to the other (or anyone claiming through or under them by way of
subrogation or otherwise) for any loss or damage to the Demised Premises or
property thereon against which the waiving party is protected by insurance, even
if such loss or damage shall have been caused by the fault or negligence of the
other party, or anyone for whom such party may be responsible; provided,
however, that this release shall be applicable and in force and effect only with
respect to loss or damage occurring during such time as the releasors policies
shall contain a clause or endorsement to the effect that any such release shall
not adverselv affect or impair said policies or prejudice the right of the
releasor to recover thereunder. Lessor and Lessee each hereby agree that it
shall cause such clause or endorsement to be included in its insurance policies
with respect to the Demised Premises, if available, and, if necessary, pay any
additional premium, that may be charged therefore.
Article XV
Damage by Fire, Etc.
Section 1. If the Demised Premises or the Building shall be damaged or destroyed
by fire, windstorm or any other insured casualty, the Lessee shall immediately
give notice thereof to the Lessor and unless this Lease is terminated as
hereinafter provided, the Lessor at his own expense shall repair or rebuild the
same so as to restore the Demised Premises (but not any leasable improvements,
alterations, additions or improvements made by or for Lessee) to substantially
the same condition they were in immediately prior to such damage or destruction,
subject, however, to zoning and building laws then in existence, provided that
the Lessor shall not be responsible for any delay in such repair or
reconstruction which may result from any cause beyond its reasonable control,
and provided further that Lessor shall not be required to expend more than the
net amount of insurance proceeds, if any, received by Lessor for such purposes,
it being understood that the application of insurance proceeds is subject to the
right of any first mortgagee of the Demised Premises.
Section 2. If either the Demised Premises or the Building shall be damaged or
destroyed to the extent of twenty-five percent (25%) or more on a square footage
basis by any cause (whether insured against by the Lessor or not), the Lessor
may elect by written notice to the Lessee either to
22
terminate this Lease or to repair or rebuild on the conditions set forth in
Section 1.
Section 3. If the Demised Premises or the Building shall, within the last year
of the Original term of this Lease or the last year of any extended term hereof,
be damaged or destroyed by any cause to such extent that the same cannot be
reasonably expected to be restored to substantially the same condition as prior
to such damage or destruction within ninety (90) days from the time that such
repair or restoration work would be commenced, then the Lessor shall have the
right to terminate this Lease by notice to the Lessee given within sixty (60)
days after the occurrence of such damage or destruction.
Section 4. In the event that the Demised Premises or the Building are damaged or
destroyed by any cause, then, unless this Lease is terminated as above provided,
the Lessee, at its own expense and proceeding with all reasonable dispatch,
shall repair or replace suitably all trade fixtures, equipment, signs or other
property installed by or belonging to the Lessee which shall be damaged or
destroyed.
Section 5. If this Lease is not terminated as above provided, then from and
after such damage which is material and until the Demised Premises are restored
as above provided, the rent reserved herein shall xxxxx, either wholly or
proportionately, according to the nature and extent of the injury.
Article XVI
Eminent Domain
Section 1. If as a result of any taking by eminent domain which shall be deemed
to include a voluntary conveyance in lieu of a taking, the total floor area
remaining in the Demised Premises shall be reduced to less than fifty (50%)
percent of the total floor area in the Demised Premises at the commencement of
the term hereof, then at the election of the Lessor, exercisable by written
notice given to the Lessee within ninety (90) days after the date of the filing
of the notice of such taking, this Lease may be terminated as of the date when
the Lessee is required to vacate the Demised Premises or the portion thereof so
taken, notwithstanding that the entire interest of the Lessor may have been
divested by such taking, and if following any such taking the Lessor does not
terminate this Lease, then the Lessor at the Lessor's expense, but only to the
extent of the award actually received by the Lessor for any such taking,
(subject to the rights of any first mortgagee of the
23
Demised Premises) and proceeding with all reasonable dispatch shall do such
work as may be required to put what may remain of the Demised Premises in proper
condition for the conduct of the Lessee's business, and the Lessee, at the
Lessee's expense and proceeding with all reasonable dispatch, shall make such
alterations, repairs and replacements of the trade fixtures, equipment, signs or
other property installed by or belonging to the Lessee as may be necessary to
put the remainder of the Demised Premises in proper condition for the Lessee's
business. From and after the date on which the Lessee is required to vacate the
portion of the Demised Premises so taken, a just proportion of the rent reserved
herein according to the nature and extent of the taking of the Demised Premises,
shall be abated until the Demised Premises are restored to such condition that
the Lessee can commence business therein, and from and after the date on which
the Lessor shall restore the Demised Premises in the manner above provided the
rent shall be reduced in the proportion that the floor area of the portion of
the Demised Premises so taken bears to the floor area of the Demised Premises at
commencement of the term hereof.
Section 2. In the event of a taking, as defined herein, of 25% or more of the
Land or the Building and even though such taking leaves at least fifty (50%)
percent or more of the floor area of the Demised Premises remaining, the Lessor
shall nonetheless have the right to terminate this Lease by notifying the Lessee
of the Lessor's election to terminate within ninety (90) days after the final
determination of the amount of the award, or to restore any part of the Demised
Premises so remaining and in the case of such restoration, the rent shall be
abated to the extent provided above.
Section 3. The Lessor reserves and excepts all rights to damages to the Land,
the Building, the Demised Premises and the leasehold hereby created, or awards
with respect thereto, then or thereafter accruing, by reason of any taking by
eminent domain or by reason of anything lawfully done or required by any public
authority, and the Lessee grants to the Lessor all the Lessee's rights, if any,
to such damages except with respect to the value of its personal property and
its relocation expenses, which may be compensable by a separate award and shall
execute and deliver to the Lessor such further instruments of assignment thereof
as the Lessor may from time to time request.
Article XVII
24
Default
Section 1. This Lease is made on the condition that if the Lessee shall
fail to perform any obligation hereunder in payment of base rent, additional
rent, or in payment of any other sums due under this Lease, and such failure
shall continue for ten (10) days after receipt of written notice from Lessor, or
for thirty (30) days after receipt of written notice of default in the case of
any other obligation (or, if said default cannot reasonably be expected to be
cured within such thirty-day period, Lessee shall not within such thirty-day
period promptly commence to cure such default and thereafter prosecute the
curing of such default to completion with due diligence), or if the estate
hereby created shall be taken on execution or other process of law, or if the
Lessee shall be declared bankrupt or insolvent according to law, or if the
Lessee shall make or offer to make, in or out of bankruptcy, a composition with
the Lessee's creditors, or if the Lessee shall make an assignment for the
benefit of its creditors, or if the Lessee shall commit any act of bankruptcy,
or if a receiver, trustee or other officer shall be appointed to take charge of
all or any substantial part of the Lessee's property by a court, or if a
petition shall be filed by or against the Lessee for the reorganization of the
Lessee or for an "arrangement" under the Bankruptcy Code or under any other
provisions of the Bankruptcy Code or any successor or similar State or Federal
statute or regulation now or hereafter in effect, and the same, if filed against
but not by Lessee, shall not be dismissed within thirty (30) days after the date
on which it is filed, then and in any of the said cases, notwithstanding any
prior waivers or consent the Lessor lawfully may, in addition to and not in
derogation of any remedies for any preceding breach of covenant, immediately or
at any time thereafter and without prior demand or prior notice (1) terminate
this Lease by notice in writing forthwith, or on a date stated in said notice,
(2) with or without process of law (forcibly, if necessary) enter into and upon
the Demised Premises or any part thereof in the name of the whole and repossess
the same as of the Lessor's former estate, and (3) expel the Lessee and those
claiming through or under the Lessee and remove its and their effects (forcibly,
if necessary without being deemed guilty of any manner of trespass and without
prejudice to any remedies which might otherwise be used for arrears of rent or
preceding breach of covenant, and upon entry as aforesaid this Lease shall
terminate, the Lessee hereby waiving all statutory rights; and in case of such
termination, or termination by reason of default on the part
25
of the Lessee, the Lessee shall at the election of the Lessor, which election
may be changed at any time:
(a) pay to the Lessor in equal monthly installments, in advance, sums
equal to the aggregate rent herein provided for or, if the Demised
Premises have been relet, sums equal to the excess of the aggregate
rent herein provided for over the sums actually received by the Lessor
from such reletting, as well as any reasonable expenses incurred by
the Lessor as a consequence of such default or in such reletting,
including but not 1imited to, attorneys' fees, brokers' fees and
expenses of repairing and putting the Demised Premises in good order
and condition, and repairing the same for re-rental, such sums being
payable, as liquidated damages for the unexpired term hereof; or
(b) pay to the Lessor as damages a sum which, at the time of such
termination or at the time to which installments of liquidated damages
shall have been paid represents the amount by which the then rental
value of the Demised Premises is less than the aggregate rent herein
provided for the residue of the term and pay from time to time to the
Lessor upon demand such additional sums as are equal to the excess, if
any, of the aforesaid rental value of the Demised Premises over the
rent actually received by Lessor for the Demised Premises for the
period from such termination, or from the time to which installments
of liquidated damages shall have been paid, or from the time to which
these additional sums may have been paid by Lessee under this
paragraph, whichever the case may be, to the time for which the Lessor
may specify in its demand hereunder (but in no event to the time later
than the expiration of the term hereof), plus, in any case, reasonable
expenses of the Lessor by way of attorneys' fees, or otherwise, in
connection with such default; or
(c) indemnify the Lessor against loss of the aggregate rent herein
provided for from the time of such termination or from the time to
which installments of liquidated damages shall have been paid to the
expiration of the term hereof as above set forth, plus, in any case,
reasonable expenses of the Lessor by way of attorneys' fees, or
otherwise, in connection with such default.
For the purposes of this Article, the phrase "aggregate rent" as used herein,
shall include the annual base rent as adjusted from time to time, and all
additional rent payable hereunder.
26
In the event of a default by the Lessee as above provided, if the Lessor shall
elect not to terminate this Lease, it may relet the Demised Premises or any part
or parts thereof in the name of either the Lessor or the Lessee, for a term or
terms which may, at the Lessor's option, extend beyond the balance of the term
of this Lease and may remove and store the Lessee's effects at the Lessee's
expense, and the Lessee agrees that in the event of such reletting the
Lessee shall pay Lessor any deficiency between the aggregate rent to be paid
hereunder and the net amount of the rents collected during such reletting, as
well as any expenses reasonably incurred by the Lessor as a consequence of such
default or in such reletting, including but not limited to, attorneys' fees,
brokers' fees and expenses of repairing and putting the Demised Premises in good
order and preparing the same for re-rental. Such deficiency shall be paid in
monthly installments upon statements rendered by the Lessor to the Lessee.
Section 2. All rights and remedies which the Lessor may have under this Lease
shall be cumulative and shall not be deemed inconsistent with each other, and
any two or more of such rights and remedies may be exercised at the same time
insofar as permitted by law.
Section 3. The Lessor shall not be deemed to be in default hereunder unless its
default shall continue for thirty (30) days or such additional time as is
reasonably required to correct its default, after written notice thereof has
been given by the Lessee to the Lessor specifying the nature of the alleged
default. In no event shall Lessor be liable for consequential or incidental
damages, nor shall damages exceed the reasonable costs of performing the
obligations of Lessor hereunder.
Article XVIII
Notices
Any notice, request, demand or other communication required or permitted by this
Lease shall, until either party notifies the other in writing of a different
address in accordance herewith, be deemed to be duly given if in writing and
sent by registered or certified first class mail, postage prepaid, return
receipt requested, addressed as follows: If to Lessor: addressed to the Lessor
c/o The Xxxxx Company, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000. If to the
Lessee, at Lessee's Address, as stated in Article I, Section 1 of this Lease.
27
Article XIX
Brokerage
Lessor and Lessee each warrants and represents to the other that it has not
dealt with any broker in connection with this Lease or the Demised Premises,
except the Authorized Broker named in Article I, Section 1 hereof, and each
agrees to defend, indemnify and hold the other harmless from and against any and
all claims for brokerage fees and commissions (except with respect to the
Authorized Broker) by any broker claiming to have dealt with it in connection
with this Lease.
Article XX
Term "Lessee's Pro Rata Share"
As used in this Lease the term "Lessee's Pro Rata Share" shall mean the
percentage stated in Article I, Section 1 of this Lease, so long as there are no
additions to the Building. If any additions are made to the Building, then such
term shall mean a fraction of the respective item, the numerator of which
fraction shall be the then total leasable square footage of the Demised Premises
and the denominator or which shall be the then total leasable square footage of
floor area of the Building.
Article XXI
Security Deposit
At the time of the execution hereof, Lessee shall pay to Lessor a Security
Deposit in the amount provided in Article I, Section 1 of this Lease, to be held
by Lessor without interest during the term hereof, and any extensions, and for
so long thereafter as Lessee is in possession of the Demised Premises or has
unsatisfied obligations hereunder to Lessor, which deposit the Lessor may apply
from time to time against outstanding obligations of Lessee hereunder. Each time
that the monthly installment of annual base rent shall increase Lessee shall
promptly pay Lessor as additional Security Deposit the amount of any increase in
the same monthly installment of annual base rent, said additional sums to be
added to the Security Deposit held hereunder. Lessee shall have no right to
require the Lessor to so apply said Security Deposit, nor shall Lessee be
entitled to credit the same against rents or other sums payable hereunder. If
and to the extent that Lessor makes such use of the Security Deposit, or any
part thereof, the sum so applied by Lessor shall be restored to the Security
Deposit by Lessee upon notice from Lessor, and failure to pay to Lessor the
amount to be so restored (within the grace period applicable to
28
rents hereunder) shall be a default hereunder giving rise to all of the Lessor's
rights and remedies applicable to a default in the payment of rent. Any portion
of said Security Deposit which has not been applied as aforesaid by Lessor shall
be repaid by Lessor to Lessee at the end of the term and any extensions hereof,
or as soon thereafter as all obligations of Lessee hereunder have been performed
in full. Upon any conveyance by Lessor of its interest under this Lease the
Security Deposit may be turned over by the Lessor to Lessor's grantee or
transferee, and upon any such delivery of the deposit, Lessee hereby releases
Lessor herein named of any and all liability with respect to the Security
Deposit, its application and return, and Lessee agrees to look solely to such
grantee or transferee, and it is further understood that this provision shall
also apply to subsequent grantees and transferees.
Article XXII
Miscellaneous Provisions
Section 1. No consent or waiver, express or implied, by the Lessor to or of any
breach in the performance by the Lessee of its agreements hereunder shall be
construed as a consent or waiver to or of any other breach in the performance by
the Lessee of the same or any other covenant or agreement. No acceptance by the
Lessor of any rent or other payment hereunder, even with the knowledge of any
such breach, shall be deemed a waiver thereof nor shall any acceptance of rent
or other such payment in a lesser amount than is herein required to be paid by
the Lessee, regardless of any endorsement or any check or any statement in any
letter accompanying the payment of the same, be construed as an accord and
satisfaction or in any manner other than as a payment on account by the Lessee.
No reference in this Lease to any sublessee, licensee or concessionaire, or
acceptance by the Lessor from other than the Lessee of any payment due hereunder
shall be construed a consent by the Lessor to any assignment or subletting by
the Lessee, or give the Lessee any right to permit another to occupy any portion
of the Demised Premises except as herein expressly provided. No waiver by the
Lessor in respect of any one tenant shall constitute a waiver with respect to
any other tenant. Failure on the part of the Lessor to complain of any action or
non-action on the part of the Lessee or to declare the Lessee in default, no
matter how long such failure may continue shall not be deemed to be a waiver by
the Lessor of any of its rights hereunder.
29
Section 2. In no case shall mention of specific instances under a more general
provision be construed to limit the generality of said provisions.
Section 3. The delivery of keys to Lessor or any employees of Lessor or the
Lessor's agent or any employee thereof shall not operate as a termination of
this Lease or surrender of the Demised Premises.
Section 4. If any installment of rent, base or additional, is paid more than 10
days after the due date thereof, at Lessor's election, it shall bear interest at
18% per annum from such due date of payment, which interest shall be immediately
due and payable as additional rent.
Section 5. If the Lessee continues to occupy the Demised Premises after the
termination hereof, it shall have no more rights than a tenant by sufferance,
but shall be liable for 150% of the aggregate rental as above determined during
such occupancy, and shall be liable for any loss or expense due to such holding
over. Nothing in this section shall be construed to permit such holding over.
Suction 6. If any provision of this Lease or the application thereof to any
person of circumstances shall be to any extent invalid or unenforceable the
remainder of this Lease and the application to persons or circumstances other
than those as to which it is invalid or unenforceable shall not be affected
thereby and each term and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
Section 7. Lessor agrees that upon Lessee's paying rent and performing and
observing the agreements, conditions and other provisions on its part to be
performed and observed, Lessee shall and may peaceably and quietly have, hold
and enjoy the Demised Premises during the term of this Lease and any extension
thereof without any manner of hindrance or molestation from Lessor or anyone
claiming under Lessor, subject, however, to rights of holders of present and
future Mortgages and to the terms and provisions of this Lease.
Section 8. The conditions and agreements in this Lease contained to be kept and
performed by the parties hereto shall be binding upon and inure to the benefit
of said respective parties, their legal representatives, successors and assigns,
and the same shall be construed as covenants running with the land. Wherever in
this Lease reference is made to either of the parties, it shall be held to
include
30
and apply to the successors and assigns of such party as if in each case so
expressed, unless the context requires otherwise and regardless of the number or
gender of such party; provided, however, that the term "Lessor" as used in this
Lease means only the owner for the time being of the Land, so that in the event
of any sale or sales of the Land and Demised premises or of this Lease the
Lessor shall be and hereby is entirely released of all covenants and obligations
of the Lessor hereunder.
Section 9. This Lease shall constitute the only agreement between the parties
relative to the Demised Premises and no oral statements and no prior written
matter not specifically incorporated herein shall be of any force or effect. In
entering into this Lease, the Lessee relies solely upon the representations and
agreements contained herein. This agreement shall not be modified except by
writing executed by both parties.
Section 10. The section and article headings throughout this instrument are for
convenience and reference only and shall in no way be held to limit, define or
describe the scope or intent of this Lease or in any way affect this Lease.
Section 11. If the Lessor shall at any time be an individual, joint venture,
tenancy in common, joint regency, firm or partnership (general or limited), or a
trust or trustee of a trust, it is specifically understood and agreed that there
shall be no personal liability of any individual or any joint endure, tenant,
partner (general or limited), trustee, shareholder, beneficiary or holder of a
beneficial interest under any of the provisions hereof or arising out of the use
or occupation of the Demised Premises by Lessee. The obligations of Lessor shall
in all events be binding upon Lessor's equity in the Building and Land only, all
in accordance herewith. It is further understood and agreed that the liability
of any party who is a Lessor (whether the original Lessor or any successor
Lessor) shall be limited to defaults occurring or arising during the period for
which such party shall have been a Lessor, and such party shall not be liable
for defaults occurring or arising at any time before such party obtained its
interest as Lessor or after such party disposed of its interest as Lessor.
Section 12. In the event that prior to the Commencement Date any actual or
proposed holder of a first mortgage on the Building or Land shall demand that
this Lease be modified or amended in any respect (other than those
31
provisions relating to rental, term, size, or location of the Demised Premises)
and if Lessee shall fail to so modify or amend this Lease within fifteen (15)
days after such demand, Lessee shall be deemed in default under this Lease.
Lessee agrees to give within ten (10) days of written request such reasonable
statements and certificates as may be requested by Lessor in connection with a
mortgage closing or the sale of the Building or Land, or any portion thereof.
Section 13. This Lease shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
Section 14. In any case where either party hereto is required to do any act,
delays caused by or resulting from Acts of God, war, civil commotion, fire,
flood or other casualty, labor difficulties, shortages of labor, materials or
equipment, government regulations, unusually severe weather, or other causes
beyond such party's reasonable control shall not be counted in determining the
time during which work shall be completed, whether such time be designated by a
fixed date, a fixed time, "promptly" or "a reasonable time", and such time shall
be deemed to be extended by the period of such delay. For the purpose hereof,
inability to pay normal charges incurred in connection with performance of an
obligation hereunder (including, without limitation, payment of base rent or
additional rent hereunder) does not constitute a cause beyond such party's
reasonable control.
Section 15. Lessee shall provide Lessor with annual certified financial
statements within ninety (90) days after the close of Lessee's fiscal year.
Section 16. Lessee shall not record this Lease, but upon request of either
party, both parties shall execute and deliver a notice of lease, in form
satisfactory to Lessor and appropriate for recording; the costs of such notice
shall be borne by the requesting party.
Section 17. Lessee shall not do, and shall not permit Persons Within Lessee's
Control to do, any act or thing in or upon the Premises or the Building which
will invalidate or be in conflict with the Certificate of Occupancy for the
Premises or the Building or violate any Requirements. Lessee shall, at Lessee's
sole cost and expense, take all action, including any required Alterations
necessary to comply with all Requirements (including, but not limited to,
applicable terms of Local Laws Xx. 0 xx 0000, Xx. 00 xx 0000, Xx. 00 of 1985,
No. 58 of 1987, and the Americans with
32
Disabilities Act of 1990 (the "ADA"), each as modified and supplemented from
time to time) which shall with respect to the Premises or with respect to any
abatement of nuisance, impose any violation, order or duty upon Lessor or Lessee
arising from, or in connection with, the Premises, Lessee's occupancy, use or
manner of use of the Premises (including, without limitation, any occupancy, use
or manner of use that constitutes a "place of public accommodation" under the
ADA, or any installations in the Premises, or required by reason of a breach of
any of Lessee's covenants or agreements under this Lease, whether or not such
Requirements shall now be in effect or hereafter enacted or issued, and whether
or not any work required shall be ordinary or extraordinary or foreseen or
unforeseen at the date hereof. Notwithstanding the preceding sentence, Lessee
shall not be obligated to perform any Alterations necessary to comply with any
Requirements, unless compliance shall be required by reason of (i) any cause or
condition arising out of any Alterations or installations in the Premises
(whether made by Lessee or by Lessor on behalf of Lessee), (ii) Lessee's
particular use, manner of use or occupancy of the Premises (as opposed to mere
use as executive, general and administrative offices, (iii) any breach of any of
Lessee's covenants or agreements under this Lease, or (iv) any wrongful act or
omission by Lessee or Persons Within Lessee's Control, or (v) Lessee's use or
manner of use or occupancy of the Premises as a "place of public accommodation"
within the meaning of the ADA.
Article XXIII
Prohibition of Lessee Abandonment
Lessee shall not vacate the Demised Premises or abandon part or all of the
Demised Premises during the Original Term, and any extension thereof. At all
times during the Original Term, and any extension thereof, Lessee agrees (i) to
keep the Demised Premises adequately heated to the extent necessary to prevent
the pipes from freezing and to prevent deterioration of the Demised Premises,
(ii) to keep the Demised Premises adequately secure so as to prevent the entry
of unauthorized persons, and (iii) to fully and completely occupy the Demised
Premises.
Article XXIV
Hazardous Waste; Hazardous Material; Oil
Section 1. As used herein, the terms "Hazardous Material" shall mean material or
waste, in whatever form, which because of its quantity, concentration, physical,
chemical,
33
corrosive, flammable, reactive, toxic, infectious or radioactive
characteristics, either separately or in combination with any substance or
substances, constitutes a present or potential threat to human health, safety,
welfare, or to the environment or any other substance that is defined or listed
as hazardous, toxic, or dangerous under any present or future environmental law
or regulation or which is otherwise regulated, prohibited, or subject to
investigation under any present or future environmental law or regulation
including, without limitation, those substances which are included under 42 USC
Section 9601 (14), and insoluable or partially soluable oils of any kind or
origin or in any form (including, without limitation, crude or fuel oils, lube
oil or sludge, asphalt, insoluable or partially insoluable derivatives of
mineral, animal or vegetable oils).
Section 2. Except as provided in Section 5 hereof, Lessee shall not use,
maintain, generate or bring on the Demised Premises, the Building or the Land or
transport or dispose of or from the Demised Premises, the Building or the Land
(whether through the sewer or septic system or into the ground or by removal
off-site or otherwise) any Hazardous Material and shall not voilate the
provisions of any environmental law or regulation; and Lessee shall prevent any
agent, servant, employee, contractor, supplier, guest, visitor, customer or
invitee of Lessee, and of such parties, and any other party claiming under
Lessee, from using, maintaining, generating or bringing on the Demised Premises,
the Building or the Land or transporting or disposing of on or from the Demised
Premises, the Building or the Land (whether through the sewer or septic system
or into the ground or by removal off-site or otherwise) any Hazardous Material
or from violating the provisions of any environmental law or regulation.
Section 3. Lessee shall deliver to Lessor, within ten (10) days after Lessee
receives same, copies of all letters, inquiries, summons, subpoenas,
complaints, restraining orders and any other written communication received by
Lessee, and written notice of any oral communication received by Lessee, which
written or oral communication relates to Lessee's compliance or noncompliance,
the compliance or noncompliance of any activities being conducted on or from the
Demised Premises, with any laws, orders, regulations and the like of any
governmental authorities or any public body relating to Hazardous Materials or
which writen or oral communication otherwise relates to the use, maintenance,
generation, storage,
34
treatment, transport or disposal of Hazardous Material on, from, or to the
Demised Premises, the Building or the Land.
Section 4. Lessee shall be solely responsible for becoming informed of any new
environmental laws and regulations and of any amendments made from time to time
to existing environmental laws and regulations; the Lessor shall not be
obligated to notify Lessee of any said amendments. In addition, Lessee shall
execute affidavits, representations and the like from time to time at Lessor's
request concerning Lessee's best knowledge and belief regarding the presence of
Hazardous Materials on the property.
Section 5. In accordance with Exhibit H of the Lease, Lessee may engage in the
activities described in Section 2 hereof provided (a) such activities are
performed in a manner consistent with the highest standards of the industry, (b)
such activities are performed in strict compliance with applicable statues,
ordinances and regulations, including without limitation any applicable
statutes, ordinances and regulations of the State where the building is located
dealing with Hazardous Materials and (c) and except for those items listed on
Exhibit H which Lessor has pre-approved as a condition of this Lease, Lessor
gives its prior written consent to any such activities. Any request for Lessor's
consent shall be in writing and shall include a list of particular Hazardous
Materials to be used and a description of their purpose and intended
applications and any other information that Lessor requests. Lessor shall not
unreasonably withhold its consent provided that Lessee demonstrates strict
compliance with requirements (a) and (b) above and provided further that in
Lessor's reasonable judgment, Lessee's proposed use wi11 not pose a present or
potential hazard to the health, safety or welfare of the occupants of the
Demised Premises, the Building or Land or any other persons or a substantial
present or potential risk or damage to the Demised Premises, the Building or the
Land or any other property or pose a risk of potential liability on Lessor. As a
condition of its consent, Lessor may require such alterations to the Demised
Premises, the Building or the Land as may be reasonably necessary or appropriate
to mitigate hazards associated with Lessee's proposed use. Any such alterations
shall be at Lessee's sole expense upon Lessor's prior approval of the plans for
such alterations. In consideration of Lessee's use of the Premises and Lessee's
use of the pre-approved Hazardous Materials and substances as outlined in
Exhibit H, Lessor agrees that no such alterations are required of Lessee as of
the Lease Commencement Date.
35
Section 6.
a. (a) Lessee shall, at Lessee's sole expense, indemnify, defend and hold Lessor
and Lessor's officers, trustees, employees, and agents harmless from any and all
claims, judgments, damages, penalties, fines, costs, 1iabilities, obligations,
defenses, 1iens or losses (including without limitation, diminution in value of
the Property, damages for the loss or restriction on use of rentable or usable
space or of any amenity of the Property, damages arising from any adverse impact
on marketing of space in the Building, and sums paid in settlement of claims,
actual attorneys' fees, consultation fees and expert fees) which arise during or
after the Lease Term as a result of any of the activities by Lessee its
employees, agents, contractors, or licensees or sublessees described in Section
2 hereof or as a result of any violation of the provisions of this Article HM by
Lessee its employees, agents, contractors, or licensees or sublessees. This
indemnification of Lessor by Lessee includes, without limitation, costs incurred
in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work, damages for personal injury and property
damage, and claims for damages or rent offset by other tenants. The indemnity
and hold harmless obligations of Lessee under this Article shall survive any
termination of this Lease. Without limiting the foregoing, if the presence of
any Hazardous Material on the Property caused or permitted by Lessee results in
any contamination of the Property, Lessee shall promptly take all actions at its
sole expense as are necessary to return the Property to the condition existing
prior to the introduction of any such Hazardous Material to the Property;
provided that Lessor's approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as such actions, in Lessor's
sole and absolute discretion, would not potentially have any material adverse
long-term or short-term effect on the Property. If Lessee fails to take such
actions, Lessor may take such actions, and Lessee shall reimburse Lessor, for
Lessor's expense in taking such actions no later than ten (10) days after each
request for such reimbursement.
36
b. It shall not be unreasonable for Lessor to withhold its consent to any
proposed Assignment or Sublease if (i) the proposed Assignee's or
Sublessee's anticipated use of the Premises involves the generation,
storage, use, treatment, maintenance or disposal of Hazardous Material
or any other activities described in Section 2 hereof; (ii) the
proposed Assignee or Sublessee has been required by any prior
landlord, lender or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the
contamination resulted from such Assignee's or Sublessee's actions or
use of the property in question; or (iii) the proposed Assignee is
subject to an enforcement order issued by any governmental authority
in connection with the use, disposal or storage of a Hazardous
Material.
c. Any increase in the premiums for necessary insurance on the Property
which arises from Lessee's use and/or storage of Hazardous Materials
shall be solely at Lessee's expense. Lessee shall procure and maintain
at its sole expense such additional insurance as may be necessary to
comply with any requirement of any Federal, State or local
governmental agency with jurisdiction.
Section 7. In all events, Lessee shall indemnify Lessor in the manner
provided elsewhere from any release of hazardous materials on the Premises
occurring while Lessee is in possession, or elsewhere if caused by Lessee or
persons acting under Lessee. The within covenants of this Article XXIV shall
survive the expiration or earlier termination of the lease term.
Section 8. Any breach of the provisions of this Article XXIV shall be
deemed to be a breach and default of a material obligation of Lessee under this
Lease; and Lessor shall have with respect thereto all remedies provided in this
Lease for defaults of Lessee.
Article XXV
Additional Provisions
Section 1.
The Lessee shall have the option to extend the term of this Lease for an
additional period of two (2) years (the "Extended Term") provided that Lessee is
not in default and
37
has given Lessor written notice of its election to extend the term no later than
one hundred eighty (180) days prior to the expiration of the Original Term of
this Lease. In the event that Lessee shall extend the term as aforesaid, such
extension shall be upon the same terms and conditions as set forth herein,
except that no further right to extend shall be deemed to be included, and
except for the rental which shal1 be $5.35 s.f. triple net or an annual rent of
$174,945.00 in year one of the option period and $5.56 s.f. triple net or an
annual rent of $181,812.00 in year two of the option period.
Section 2. LESSOR'S MANAGEMENT AND INCOME TAX PROVISIONS
A. Any services which Lessor is required to furnish pursuant to the provisions
of this Lease may at Lessor's option be furnished from time to time, in
whole or in part, by employees of Lessor or by the Managing Agent of the
Building and Land or by one or more third persons, and Lessor further
reserves the right to require Lessee to enter into reasonable agreements
with such persons in form and content approved by Lessor for the
furnishing of such services.
X. Xxxxxx shall have the right, at any time and from time to time, to
unilaterally amend the provisions of the Lease if Lessor is advised by its
Counsel that all or any portion or the monies paid by Lessee to Lessor
hereunder are, or may be deemed to be, unrelated business income within the
meaning of the United States Internal Revenue Code, regulation issues
thereunder, and Lessee agrees that it will execute all documents or
instruments necessary to effect such amendment or amendments, provided that
no such amendment shall result in Lessee having to pay in the aggregate
more money on account of its occupancy of the Demised Premises under the
terms of this Lease as so amended, and provided further that no such
amendment or amendments shall result in Lessee having less rights than it
has prior to any such amendments or receiving under the provisions of this
Lease less services than it is entitled to receive, nor services of a
lesser quality, and provided further that Lessee's taxes do not increase as
a result of such amendment or amendments.
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EXECUTED under seal on the date first above written.
LESSEE: Nutri/System LP
By: /s/ Xxxxx X. Xxxxxxx
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Title: President
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Dated: 12/11/97
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Lessee's Signature Witnessed By: [SIGNATURE APPEARS HERE]
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LESSOR: Teachers Pennsylvania Realty, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: [SIGNATURE APPEARS HERE]
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Xxxxxxxx X. Xxxxxxxx
Assistant Secretary
Title:
Dated:
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Lessor's Signature Witnessed By: [SIGNATURE APPEARS HERE]
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Exhibit A
[GRAPHIC]
In the printed version of the document a floor plan appears.
Exhibit D
Lessor's Initial Estimate of Lessee's Monthly Pro-Rata Share of Real
Estate Taxes, Operating Expenses and Insurance.
Real Estate Taxes: $1,771.25
Operating Expenses: $1,607.75
Insurance: $ 218.00
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Total: $3,597.00
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Exhibit E
HVAC Maintenance Schedule
PERIODIC MAINTENANCE:
Perform the following inspections and service routine at the beginning of each
cooling season:
1. Clean the condenser coil by hosing with cold water. Do not use hot water
which can cause excessive pressure within the coil.
2. Remove any accumulation of dust and dirt from the casing of the unit.
3. Clean or replace the air filters.
4. Inspect the condensate drain pan and piping to make sure they are clear and
will carry away all water.
At the beginning of the heating season, perform the following inspection and
service routine:
1. Add a few drops of SAE. No. 10 non-detergent oil to the combustion blower
motor. WARNING: The use of a heavier grade oil may cause operating difficulties
during cold weather.
2. Clean or replace the air filters.
3. Inspect the control panel wiring and the heating controls to make sure
connections are tight and wiring insulation is intact.
4. Check the operation of the gas ignition system and the spark electrode, and
the setting of the limit control; make sure the evaporator-furnace fan is cycled
at the correct cut-in and cut-out points.
MONTHLY INSPECTIONS:
It is recommended that, once a month, the following inspections be performed:
1. Clean or replace air filters.
2. Inspect and clean, if necessary, the condensate drain piping during the
cooling season.
3. Inspect the control panel wiring and the heating controls to make sure
connections are tight and wiring insulation is intact.
4. Check the operation of the gas ignition system and the spark electrode, and
the setting of the limit control; make sure the evaporator-furnace fan is cycled
at the correct cut-in and cut-out points.
Exhibit F
Signage Standards
Tenant's proposed signage must first be submitted to Landlord for approval.
Such approval shall not be unreasonably withheld. Any proposed signs must
conform with those that presently exist at the building.
Exhibit G
Subordination and Attornment Agreement
THIS AGREEMENT made as of the ______ day of _______, 19___, by and between
Teachers Pennsylvania Realty, Inc. with a principal place of business c/o The
Xxxxx Company, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (hereinafter "Lessor"),
and _____________ with a place of business at _____________ (hereinafter
"Lessee"), and ___________________, with a place of business at
____________________________ (hereinafter "Mortgagee").
W I T N E S S E T H:
WHEREAS, Mortgagee is committed to lend certain sums to Lessor which sums shall
be secured by a Mortgage Deed (hereinafter referred to as the "Mortgage) on
certain property (hereinafter referred to as the "Property") in _______________
more particularly described therein and which shall be recorded in the County
Registry of Deeds, ________________ concurrently with the recording of his
agreement; and
WHEREAS, Lessee has entered into a Lease (hereinafter referred to as "said
Lease" which term shall mean and include all amendments and modifications
thereto through the date hereof or which have been approved by Mortgagee with
Lessor dated the _______ day of _______, 19___, covering a part of the premises
subject to said Mortgage as therein more particularly described; and
WHEREAS, in order to induce the Mortgagee to make the loan as evidenced by the
Mortgage, Lessor and Lessee have offered to enter into this Agreement in order
to, inter alia, establish the prior right, claim and lien of the Mortgagee with
respect to all matters concerning condemnation and casualty as set forth in said
Lease.
NOW, THEREFORE, for and in consideration of One Dollar ($1.00) and other good
and valuable consideration, the receipt whereof the parties hereto hereby
acknowledge, and to induce the Mortgagee to make the loan evidenced by said
Mortgage, the parties hereto covenant and agree as follows:
1. The said Mortgage and the lien thereof, shall be, and the same is hereby
made, SUBJECT AND SUBORDINATE to the said Lease with the same force and effect
if said Lease had been executed, delivered and recorded prior to execution,
delivery and recording of the said Mortgage, EXCEPT HOWEVER that the Lease and
the rights of Lessor and Lessee thereunder shall be expressly subject and
subordinate in all respects to:
(a) The right, claim and lien of said Mortgage in, to and upon any award or
other compensation heretofore or hereafter to be made for any taking by eminent
domain of any part of the said Property, and to the right of disposition thereof
in accordance with the provisions of said Mortgage,
(b) The right, claim and lien of said Mortgage in, to and upon any proceeds
payable under all policies of fire, casualty and rent insurance upon the said
Property and as to the right of disposition thereof in accordance with the terms
of said Mortgage,
(c) Any lien, right, power or interest, if any, which may have arisen or
intervened between the date of execution of said Lease, the date of recording of
the Mortgage, or any lien or judgment which may arise at any time, under the
terms of such Lease, it being expressly further understood and agreed that with
respect to the matters referred to in subsections 1(a) through and including
1(c), the Mortgage and the lien thereof shall be, and the same is hereby made,
prior in right to the said Lease and the rights of Lessor and Lessee thereunder
with the same force and effects as if said Mortgage had been executed, delivered
and recorded prior to the execution, delivery and recording of the Lease.
2. Lessee agrees that it shall not alter, modify, amend, change, surrender or
cancel the Lease, nor pay the rent due thereunder in advance for more than
thirty (30) days except as may be required by said Lease, without the prior
written consent of the mortgagee, and will not seek to be made an adverse or
defendant party in any action or proceeding brought to enforce or foreclose the
Mortgage. Lessee further agrees that it shall not subordinate its interest in
the Lease to the lien of any mortgage, security agreement or lease affecting the
Premises demised under the Lease.
3. In the event of a default by Lessor under the terms of the Lease which is of
such a nature as to give Lessee the right to terminate the Lease or reduce the
rent payable thereunder by credit, offset or otherwise, then, and in any such
event, Lessee agrees that concurrently with giving notice of default to Lessor,
Lessee shall deliver a copy thereof to Mortgagee. Lessee further agrees that if
Lessor does not cure the default specified in such notice of default within
thirty (30) calendar days after notice thereof, then Lessee shall give further
notice of that fact to Mortgagee and Mortgagee shall thereupon, if it shall so
elect, have the right, but not the obligation, to cure the default of Lessor
within twenty (20) calendar days after the giving of such further notice by
Lessee, and in case of a default which cannot, with due diligence, be cured
within said twenty (20) days, then the twenty (20) days shall be extended for
such period as my be necessary to complete the curing of the same with all due
diligence and continuity.
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4. In the event of entry to foreclose the Mortgage and/or foreclosure thereof,
or a conveyance in lieu of, or subsequent to, foreclosure and if the Lease shall
not have been terminated under the provisions hereof or of the Lease:
A. The Mortgagee will not interfere with or disturb Lessee's possession of the
Premises demised under the Lease, so long as Lessee pays the rent stipulated in
the Lease and performs all other terms and conditions thereof;
B. The Lease will remain in full force and effect, as modified hereby, and the
Lessee will attorn to and be bound after the Lease to the Mortgagee and its
successors and assigns including any purchaser of the Property in foreclosure or
any grantee under a conveyance in lieu of or subsequent to foreclosure, and
Lessee will perform and observe all of its obligations thereunder to the same
effect as through the Lease had been executed prior to the execution and
delivery of the Mortgage, and Lessee agrees to execute and deliver, upon the
request of the mortgagee or other owner of the Demised Premises, any instrument
which may be necessary or appropriate to evidence such attornment.
PROVIDED, HOWEVER, that the Mortgagee shall not be:
(i) Liable for any act or omission of the Lessor; or
(ii) subject to any off-sets or defenses which the Lessee might have
against Lessor; or
(iii) bound by any rent or additional rent which Lessee might have paid for
more than the current rental period of the Lease; or
(iv) bound by an amendment or modification of the Lease made without its
written consent.
5. All notices, demands or other communications which any party hereto is
required or may desire to give to another party hereto may be delivered in
person or shall be mailed by certified or registered mail, postage prepaid,
return receipt requested, addressed to the other party at the address first set
forth hereinabove or at such other addresses as any party hereto may hereafter
specify by notice in writing to the others. Any such notice or demand shall be
deemed given and received seventy-two (72) hours after deposit in the United
States mail as aforesaid.
6. Lessor hereby authorizes Lessee to rely on any written notice of demand
received from Mortgagee to make rent and other payments, to which Lessor may be
entitled, to Mortgagee instead of Lessor whenever so demanded by Mortgagee,
whether or not the Mortgage shall have been foreclosed.
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7. Lessee agrees that in the event Mortgage shall succeed to the rights of
Lessor as Lessor under the Lease, then Lessee shall look solely to Mortgagee's
interest in the Property in the enforcement of any claims against Mortgagee. The
provisions hereof shall expressly inure to the benefit of any successors and
assigns of Mortgagee.
8. The provisions of this Agreement shall be deemed to be covenants running with
the land, shall be binding upon and shall inure to the benefit of the parties
hereto, their respective successors and assigns, and shall specifically be
binding upon any purchaser of said Property at a sale foreclosing the said
Mortgage.
9. This Agreement may be executed in three or more counterparts by one or more
of the parties hereto and each such counterpart shall be deemed to be an
original and shall have the same force and effect as an original, and all such
counterparts in the aggregate shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals,
as of the day and year first above written.___________________________________
as Trustee of ____________________ REALTY TRUST UNDER Declaration of Trust dated
__________________ and recorded in the ____________________ County, __________
Registry of deeds in Book _________________ at Page ____.
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as Trustee, for self and not
individually
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