Exhibit 10.31
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LEASE AGREEMENT
This Lease Agreement ("Lease") is entered into this 21st day of
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February 2003 ("Effective Date"), by and between Triple Net Investments XIII,
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L.P., a New Jersey limited partnership or its assigns ("Landlord"), whose
mailing address is 000 Xxxxx 000, Xxxxx 000, Xxxxxx, XX 00000 and Paragon
Technologies, Inc., a Delaware corporation, ("Tenant"), whose mailing address is
000 Xxxxxxx Xxxx, Xxxxxx, XX 00000.
1. LEASE OF BUILDING; TERM. Landlord hereby leases to Tenant all that
certain office space comprised of approximately 25,000 square feet ("Leased
Premises") in that certain 173,000 square foot building ("Building") known as
000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx and further described on the attached
Exhibit A, which is incorporated herein by reference (the "Property") (the
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Building and the Property are sometimes herein collectively called the
"Premises") to be used and occupied for the purpose of operating a commercial
office for Tenant's business for the term of five (5) years (the "Term"),
commencing on the Effective Date of the Lease. The parties agree to execute a
memorandum expressing the commencement and termination dates and the renewal
term dates upon the determination thereof.
2. RENTAL. The rental to be paid by Tenant during the Term of this Lease
(the "Rent") shall be payable, without any prior demand therefore, monthly as
follows:
Lease Years Sq. Ft. Rate Annual Rent Monthly Rent Total Rent
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Year 1 25,000 $8.25 $206,250.00 $17,187.50 $206,250.00
Year 2 25,000 $8.50 $212,437.50 $17,703.12 $212,437.50
Year 3 25,000 $8.75 $218,810.62 $18,234.21 $218,810.62
Year 4 25,000 $9.01 $225,374.94 $18,781.24 $225,374.94
Year 5 25,000 $9.28 $232,136.19 $19,344.68 $232,136.19
TOTAL $1,095,009.25
payable in advance on the first day of each month to Landlord, at the address
set forth above, or to such other party or at such other place as Landlord may
from time to time in writing designate. The Rent shall be adjusted upwards or
downwards based upon the square footage leased hereunder.
3. OPERATING EXPENSES.
a. In addition to Rent, Tenant shall pay to Landlord, commencing on
the Effective Date and continuing throughout the Term, Tenant's Proportionate
Share of Operating Expenses (as hereinafter defined), which payment shall
otherwise be due and payable at the same time and in the same manner as Rent.
Tenant shall pay monthly in advance an estimated Tenant's Proportionate Share of
Operating Expenses, as determined by Landlord from time to time, in accordance
with the balance of this Section.
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b. "Tenant's Proportionate Share" shall mean a fraction, the
numerator of which shall be the leasable floor area of the Leased Premises and
the denominator of which shall be the leasable floor area of the Building.
Tenant's Proportionate Share, based upon the square footage of the Leased
Premises leased by Tenant, is currently 14.45%.
c. "Operating Expenses" shall mean the following expenses incurred or
paid by Landlord in connection with the operation, repair and/or maintenance of
the Property, but not including expenses incurred or paid that benefit one
particular tenant and no others: (i) real property taxes and other taxes and
charges levied in lieu thereof, general and special public assessments, taxes or
other non-capital charges imposed by any governmental authority pursuant to
anti-pollution or environmental legislation, and taxes or other charges on
rentals or the use, occupancy or renting of space; (ii) premiums and fees for
fire and extended coverage insurance, insurance against loss or rentals for
space and public liability insurance, all in amounts and coverages (with
additional policies against additional risks) as may be reasonably required by
Landlord or the holder of any mortgage encumbering the Property or any part
thereof; (iii) water and sewer connection and service charges, common area
electricity and other utility charges not separately metered to tenants of the
Property; (iv) all maintenance and repair costs including, but not limited to,
repairs and replacements of supplies and equipment, snow, ice and debris and
rubbish removal, paving and striping, lawn and general grounds upkeep,
maintenance, repair and replacement of all HVAC, electrical, plumbing and
sprinkler systems and equipment, and the costs of all labor, materials and
supplies incidental thereto; (v) management fees payable to the managing agent
of the Property (such fee shall be capped at 4.5% of gross rents); and (vi) any
and all other expenditures of Landlord incurred in connection with the
operation, repair or maintenance of the Property which are properly expensed in
accordance with generally accepted accounting principles consistently applied.
All service related contracts shall be negotiated by Landlord at arms length.
d. Within thirty (30) days of the date hereof, Landlord shall advise
Tenant in writing of the estimated Operating Expenses for the first Lease Year
(as hereinafter defined) and any interim period, if any, Tenant's Proportionate
Share and Landlord's initial monthly estimate of Tenant's Proportionate Share of
Operating Expenses for the first Lease Year. Tenant shall pay the first
installment of the monthly estimated Tenant's Proportionate Share of Operating
Expenses within thirty (30) days of notice of the amount thereof.
e. Within ninety (90) days following the end of each Lease Year,
Landlord shall advise Tenant in writing of the actual Operating Expenses for the
preceding Lease Year. If the actual Tenant's Proportionate Share of Operating
Expenses for any calendar year, or other period of twelve (12) months as may
hereafter be adopted by Landlord as its fiscal year, during the Term (each a
"Lease Year") are greater than the total estimated Tenant's Proportionate Share
of Operating Expenses paid for such Lease Year, Tenant shall pay the difference
to Landlord with the next installment of Base Rent. If the actual Tenant's
Proportionate Share of Operating Expenses for such Lease Year are
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less than the total estimated Tenant's Proportionate Share of Operating Expenses
paid for such Lease Year, Tenant shall receive a credit in the amount of the
difference which shall be applied against the next installment(s) of estimated
Tenant's Proportionate Share of Operating Expenses until a credit for the full
amount is received. If the term expires before credit for the full amount is
received Landlord shall pay Tenant any remaining balance on the termination
date. Landlord's failure to provide such statement within the time frame
provided under this provision shall not constitute a waiver of Landlord's right
to xxxx and collect Tenant's Proportionate Share of Operating Expenses for such
Lease Year(s). If Tenant occupies the Leased Premises, or any portion thereof,
for less than a full Lease Year, Tenant's liability for Tenant's Proportionate
Share of Operating Expenses for such period shall be calculated in proportion to
the amount of time in such Lease Year that Tenant occupied the Leased Premises.
f. With respect to the annual determination by Landlord of Tenant's
Proportionate Shared Operating Expenses, Tenant, or its designee shall have the
one time annual right, pursuant to the terms and conditions herein, to review
all of Landlord's bills, records and invoices related to the Operating Expenses.
Such review shall occur at such reasonable location designated by Landlord
during normal working hours. As a condition precedent to Tenant's right to
review the Operating Expenses billed by Landlord pursuant to this Xxxxxxxxx 0,
Xxxxxx must pay the total amount billed by Landlord. This paragraph shall not
limit Tenant's right to review all of Landlord's bills, records and invoices for
any extraordinary charges or capital expenditures not related to such
calculation of Tenant's Proportionate Share of Operating Expenses or pursuant to
subparagraph h herein.
g. In the event that Tenant reviews an Operating Expenses Statement
and discovers a discrepancy in its favor, the amount of the discrepancy shall
be, at Landlord's election, either credited by Landlord against future Operating
Expenses owed by Tenant until a credit for the full amount is received (if the
term expires before credit for the full amount is received Landlord shall pay
Tenant any remaining balance on the termination date) or reimbursed by Landlord
directly to Tenant. In the event the discrepancy in Tenant's favor is greater
than ten (10) percent of the total Operating Expense Statement for the year in
question, then Landlord shall pay Tenant's reasonable costs for such review.
h. Landlord shall have the right, two times per year including the
annual adjustment, throughout the Term, and during any one or more Lease Years,
to adjust, by written notice to Tenant, the monthly estimate of Tenant's
Proportionate Share of Operating Expenses. Pending any such adjustment, Tenant
shall continue to pay the then existing monthly estimate of Tenant's
Proportionate Share of Operating Expenses, but shall pay the adjusted monthly
estimate of Tenant's Proportionate Share of Operating Expenses upon receipt of
notice thereof.
4. SECURITY DEPOSIT. The Tenant shall provide a security deposit of
$200,000.00 in the form of a Letter of Credit to the Landlord when the Tenant
signs this Lease.
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5. LICENSES AND PERMITS. Tenant shall be responsible to obtain the licenses
or permits that may be required by any governmental agency or authority in order
for Tenant to lawfully occupy the Leased Premises and conduct its business,
which Tenant shall obtain at its sole cost and expense.
Tenant shall comply with all applicable laws, ordinances, rules,
regulations and orders of all duly constituted authorities, present or future,
with regard to Tenant's business being conducted in the Leased Premises.
6. LANDLORD'S SERVICES.
(a) Landlord shall furnish cooled or heated air in season for
comfortable occupancy of the Leased Premises under normal business operations;
washroom facilities for use by Tenant in common with other tenants in the
Building, snow and ice removal from all driveways parking areas and sidewalks
and maintenance of landscaped areas. Landlord shall maintain the Premises, all
structural elements of the Building and all Common Areas in good condition and
repair, free from obstructions and safety hazards.
In the event Landlord fails to maintain the Premises as provided above,
Tenant may, at Tenant's option, but shall not be obligated to, perform such
maintenance or repair to the Premises and shall deduct the cost of such expense
from Rent.
(b) Tenant Access. Landlord shall provide an oversized double-door or
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garage door for delivery and removal of demonstration machinery and equipment
for Tenant's operations and access to Tenant's space.
7. DELIVERY OF POSSESSION. Except as provided for in Section 6(b) above,
Landlord shall deliver possession of the Property to Tenant in "as-is" and
"where-is" condition.
8. AFFIRMATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it
will without demand:
a. Pay Rent, its proportionate share of Operating Expenses and all
other charges herein on the days and times that the same are made payable
without fail, and without setoff, deduction or counter-claim, except as
hereinafter set forth. If Tenant defaults in the payment of Rent or any other
financial obligation hereunder and such default continues for ten (10) days
after Tenant receives Landlord's notice thereof, or if Tenant defaults in the
prompt and full performance of any other provision of this Lease and such
default continues for thirty (30) days after Tenant receives Landlord's written
notice thereof to Tenant, Landlord may forthwith terminate this Lease and
Tenant's right to possession of the Leased Premises, and may seek any legal
remedies available. Tenant shall pay a late charge at the rate of two percent
(2%) of each dollar of Rent, or any other sum collectible under this Lease, not
paid within ten (10) days after the same is due. If Landlord shall at any time
or times accept said Rent or Rent charges after the same shall have become due
and payable, such acceptance shall not excuse any future delays, or
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constitute, or be construed as a waiver of any of Landlord's rights. Tenant
agrees that any charge or payment herein reserved, included or agreed to be
treated or collected as Rent may be proceeded for and recovered by Landlord in
the same manner as Rent due and in arrears.
b. Comply with the reasonable rules and regulations from time to time
made by Landlord for the safety, care, upkeep and cleanliness of the Leased
Premises. Tenant agrees that such rules and regulations shall, when written
notice thereof is given to Tenant, form a part of this Lease, effective upon
receipt of same.
c. Keep the Leased Premises in good order and condition, ordinary
wear and tear, damage by fire or casualty and damages which are Landlord's
obligation to repair excepted, and upon termination of this Lease to deliver up
to Landlord the Leased Premises in the same condition as Tenant has herein
agreed to keep them.
d. Keep nothing which is explosive or which might increase the risk
of fire or other casualty at the Leased Premises.
e. Keep trash within covered dumpsters or containers.
f. Give to Landlord prompt written notice of any accident, fire or
damage occurring on or to the Leased Premises within ninety six (96) hours of
occurrence thereof.
g. Peaceably deliver up and surrender the Leased Premises to Landlord
at the expiration or sooner termination of this Lease and promptly deliver to
Landlord at its office all keys for the Leased Premises.
h. Conduct its business in the Leased Premises during normal business
hours or at Tenant's option twenty-four (24) hours each day, seven days a week
and use the Leased Premises without disturbing the possessions or quiet
enjoyment of any other occupants.
9. OCCUPANCY AND ASSIGNMENT. All assignments or subleases shall require the
Landlord's prior written approval, which shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding anything to the contrary herein, Tenant
shall be permitted to assign this Lease without Landlord's consent in the event
Tenant is acquired or merges with another entity. For purposes herein,
acquisition or merger shall be of more than fifty (50) percent of Tenant's
assets or common stock.
10. NEGATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it will
do none of the following without the written consent of Landlord, which consent
shall not be unreasonably withheld, or delayed.
a. Except such signs as are in existence at the Effective Date,
Tenant shall not place or allow to be placed a sign upon the Property or on the
outside of the Building.
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Signage that is permitted by local ordinance is excepted. In case of the breach
of this covenant (in addition to all other remedies given to Landlord
hereunder), Landlord shall have the right of removing such sign, projection or
device and restoring the Premises to their former condition.
b. Make any structural alterations, improvements or additions to the
Building or Property without the written consent, not to be unreasonably
withheld, conditioned or delayed, of the Landlord. Landlord shall designate
ninety (90) days prior to the expiration of the then current lease term, whether
said alterations, improvements, additions or fixtures and equipment shall remain
on the Leased Premises or be removed by Tenant at the expiration or earlier
termination of this Lease.
c. Use, operate or maintain any machinery, equipment or fixture that,
in Landlord's reasonable opinion, is harmful to the Building and appurtenances
of which the Building is a part, or is disturbing to the other occupants of the
Building, if any.
d. Place any weights in any portion of the Building beyond the safe
carrying capacity of the Building.
11. LANDLORD'S RIGHT TO ENTER. Tenant shall permit Landlord, Landlord's
agents, cleaners or employees or any other person or persons authorized by
Landlord, to inspect the Leased Premises during normal business hours upon
reasonable notice, and if Landlord shall so elect, for making reasonable
alterations, inspections, improvements or repairs to the Building or for any
reasonable purpose in connection with the operation and maintenance of the
Building. Notwithstanding the foregoing, in the event of an emergency Landlord
shall not be obligated to notify Tenant of its intention to enter the Leased
Premises.
12. RELEASE AND INDEMNIFICATION OF LANDLORD.
(a) Tenant releases Landlord and agrees to defend, indemnify and hold
Landlord harmless from any claim by any person for any injury, death, damage,
loss, liability or expense which arises upon, about, or in connection with the
Leased Premises due to an occurrence during the Term or any period of occupancy
by the Tenant, and arises due to:
(i) the gross negligence of Tenant, its employees, agents or
invitees; or
(ii) the willful misconduct or criminal acts of Tenant, its employees,
agents or invitees; or
(iii) a breach by Tenant, its employees, agents or invitees of any
environmental law that applies at any time during the Lease
Term; or
(iv) the stoppage, malfunction or breakdown of any of the systems
serving the Leased Premises or the Building, including without
limitation, the water system, the plumbing system, the sewer
system, the drainage system, the sprinkler system, the electric
system, the lighting, the gas system, or the heating, ventilating
and air system for less than forty-eight (48) hours,
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unless said stoppage, malfunction or breakdown is due to improper
installation or construction by Landlord, its contractors or is
covered by contractors' warranties; or
(v) the stoppage or reduction of utility service for less than
forty-eight (48) hours, unless due to improper or faulty
installation by Landlord or its contractors.
(b) Notwithstanding anything to the contrary contained in this
clause, Tenant's agreement to release, defend, indemnify and hold Landlord
harmless shall not apply to the gross negligence or willful misconduct of the
Landlord, its employees, or its agents. Landlord agrees to release, defend,
indemnify and hold Tenant harmless from any claim by any person for any injury,
death, damage, loss, liability or expense which arises from the gross negligence
or willful misconduct of Landlord, its employees or agents.
13. FIRE OR OTHER CASUALTY.
If during the term of this Lease or any renewal or extension thereof,
the Building is totally destroyed or is so damaged by fire or other casualty
that the same cannot be repaired or restored within two hundred seventy (270)
days from the date such casualty occurs, then this Lease shall absolutely cease
and terminate and the rent shall xxxxx for the balance of the term. In such
case, Tenant shall pay the rent apportioned to the date of damage and Landlord
may enter upon and repossess the Leased Premises upon thirty (30) days written
notice to Tenant. If the damage caused as above can be repaired or restored
within the timeframe identified above, Landlord shall promptly restore the
Leased Premises to the condition it was in prior to such casualty and all rent
and Tenant's proportionate share of Operating Expenses shall be abated or
apportioned during the time Landlord is in possession. If the damage caused as
above is only slight, Landlord shall repair whatever portion, if any, of the
Leased Premises that may have been damaged by fire or other casualty. During
such repair, Tenant shall pay rent only for that portion of the Leased Premises
that is undamaged by such fire or other casualty.
14. INSURANCE. Tenant shall provide property, business interruption and
liability insurance throughout the Term as follows:
(a) Tenant shall maintain in force with respect to the Leased
Premises and the improvements Landlord and, or Tenant makes to the Leased
Premises all risk property insurance. The policy by which Tenant provides that
insurance shall name as an additional insured parties, Landlord and those of
Landlord's mortgagees as Landlord designates to Tenant and must contain a
mortgagee clause in favor of Landlord's designated mortgagees.
(b) Tenant shall maintain in force all risk property insurance
covering personal property Tenant places upon or installs within the Leased
Premises in an amount equal to the replacement cost of that personal property.
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(c) Tenant shall maintain in force with respect to the Leased
Premises and to the improvements Tenant makes to the Leased Premises a policy of
general liability insurance. The policy by which Tenant provides that insurance
shall name, as additional insureds, the Landlord and Landlord's designated
mortgagees against liability arising from Tenant's use, occupancy or maintenance
of the Leased Premises and appurtenant areas. The limit of that insurance must
be at least One Million Dollars ($1,000,000.00) per occurrence for bodily injury
to or death of any persons or property damage. Tenant must cause the policy by
which Tenant provides that general liability insurance to be endorsed to order
to confirm that insurance is primary insurance.
(d) Tenant shall maintain in force workmen's compensation
insurance in accordance with the applicable laws and regulations.
(e) Each policy of insurance that Tenant maintains in accordance
with the terms of this Agreement must be written by insurance companies licensed
to do business in the state where the Leased Premises are located, must be in
form and substance reasonably satisfactory to Landlord and must provide that the
insurer will cancel, terminate or materially change the policy only after it has
given Landlord and Tenant written notice of the anticipated cancellation
termination or material change at least thirty (30) days in advance of the time
at which the cancellation, termination or material change becomes effective.
(f) As soon as practicable but prior to occupancy, Tenant shall
furnish to Landlord certificates of insurance reflecting that the policies
Tenant has agreed to maintain are in force and it shall also provide
certificates evidencing all renewals of those policies.
(g) Each party waives and releases, to the extent of the proceeds
that are or would be payable to it in respect of the policies of property
insurance and business interruption insurance required by virtue of this
Section, any and all rights of recovery, claim, action or cause of action that
it may now or later have against the other or the other's agents, officers and
employees by virtue of (i) any loss or damage that may occur to the Leased
Premises, improvements to the Leased Premises or personal property within the
Leased Premises or (ii) any diminution in the rent derived from the operation of
the Leased Premises or in the revenue derived from the conduct of business
within the Leased Premises, regardless of cause or origin, including, without
limitation, the negligence of Landlord or Tenant or any of their respective
representatives, agents, employees, contractors and invitees.
15. REPAIRS AND MAINTENANCE.
a. Tenant, at its sole cost and expense and throughout the term
of this Lease, shall keep and maintain the Leased Premises in good order and
condition, free of accumulation of dirt and rubbish, and shall promptly make all
repairs that are necessary to keep and maintain the Leased Premises in good
order and condition. All repairs and replacements made by Tenant shall utilize
materials and equipment that are equal in
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quality and usefulness to those originally used in constructing the Building
and the Leased Premises.
b. Landlord shall have the right to inspect the Leased Premises
from time to time as it deems, in its sole opinion, necessary, and request that
Tenant comply with the terms of this provision. Landlord shall not unreasonably
interfere with Tenant's use of the Leased Premises or interrupt Tenant's
business operations during inspections. Within thirty (30) days of written
notice from Landlord, Tenant shall make, or diligently pursue to completion, all
repairs and replacements that are necessary to keep the Leased Premises in the
condition provided in (a) above and that it is instructed to make pursuant to
Landlord's notice.
c. In the event Tenant fails to perform its obligations under
this Section, Landlord may, after giving the appropriate written notice and cure
period, perform on Tenant's behalf and recover the reasonable costs and expenses
of said performance from Tenant within ten (10) business days of receipt of an
invoice for such costs and expenses from Landlord.
d. At the expiration or other termination of this Lease, Tenant
shall leave the Leased Premises, and during the Term shall keep the same in good
order and condition, ordinary wear and tear excepted, to the end that Landlord
may again have and repossess the same not later than midnight on the date upon
which this Lease or any renewal thereof or extension ends.
16. ADDITIONAL COSTS. Tenant shall pay, in addition to the Rent
herein reserved, any and all sums which may become due by reason of the failure
of Tenant to comply with any and all covenants of this Lease.
17. DEFAULTS AND REMEDIES. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Tenant (each, an
"Event of Default"):
a. If Tenant fails to pay the Rent or make any other payment
required to be made by Tenant under this Lease as and when due and such failure
continues for ten (10) days after written notice thereof is received by Tenant;
or
b. If Tenant materially violates or fails to perform or otherwise
materially breaks any covenant or agreement herein contained and does not cure
said violation or failure within thirty (30) days after receipt of written
notice or if said condition cannot reasonably be cured within such time period,
commences said cure and proceeds diligently to completion; or
c. If Tenant abandons the Leased Premises; or
d. If Tenant fails to vacate and surrender the Leased Premises as
required by this Lease upon the expiration of the Term or sooner termination of
this Lease; or
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e. If Tenant makes an assignment for the benefit of creditors; or
whenever Tenant seeks or consents to or acquiesces in the appointment of any
trustee, receiver or liquidator of Tenant or of all or any substantial part of
its properties; or whenever permanent or temporary receiver of Tenant for
substantially all of the assets of Tenant shall be appointed; or an order,
judgment or decree shall be entered by any court of competent jurisdiction on
the application of a creditor.
18. LANDLORD'S REMEDIES. If there shall occur an Event of Default,
and after running of all notice and cure periods, then in addition to any other
remedies available to Landlord at law or equity, Landlord may at its option:
a. Declare due and payable and xxx for recovery, all unpaid Rent
for the unexpired period of the Term as if by the terms of this Lease the same
were payable in advance, together with reasonable legal fees and other
reasonable expenses incurred by Landlord in connection with the enforcement of
any of Landlord's rights and remedies hereunder; and/or
b. Distrain, collect or bring action for such Rent as being rent
in arrears, or may enter a money judgment by confession or proceed by an action
in ejectment as herein elsewhere provided for in case of rent in arrears, or may
file a proof of claim in any bankruptcy or insolvency proceedings for such Rent
and other sums due and payable hereunder, or institute any other proceedings,
whether similar or dissimilar to the foregoing, to enforce payment thereof;
and/or
c. Landlord, or anyone acting on Landlord's behalf may, pursuant
to legal process, and after giving reasonable prior notice to Tenant, enter the
Leased Premises; and,
(1) may remove from the Leased Premises all goods and chattels
found therein to any other place or location as Landlord may desire and any cost
incurred for said removal and any charges made for storage of said goods and
chattels at the location to which they are removed Tenant agrees to pay; or
(2) take immediate possession and may lease the Leased Premises or
any part thereof to such person, company, firm or corporation as may in
Landlord's reasonable business discretion seem best and Tenant shall be liable
for the difference between any such Rents collected and the Rent for the
then-current Term under this Lease.
d. Collect or bring action for such Rent as being rent in arrears
or proceed by an action in ejectment as herein elsewhere provided for in case of
rent in arrears or institute any other proceedings, whether similar or
dissimilar to the foregoing, to enforce payment thereof; and/or
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e. Terminate this Lease and recover from Tenant upon demand
therefor, unless Tenant has paid the whole of accelerated Rent, as liquidated
and agreed upon final damages for Tenant's default and in lieu of all current
damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), an amount equal
to the excess, if any, of (a) Rent which would be payable under this Lease for
the remainder of the Term from the date of such demand for what would have been
the then unexpired Term of this Lease in the absence of such termination,
discounted at the rate of 5% per annum, over (b) the then fair market rental
value of the Leased Premises as reasonably determined by an independent third
party appraiser for the same period, discounted at a like rate. If any statute
or rule of law shall validly limit the amount of such liquidated final damages
to less than the amount above agreed upon, Landlord shall be entitled to the
maximum amount allowable under such statute or rule of law.
19. REMEDIES CUMULATIVE. All of the remedies hereinbefore given
and all rights and remedies under law and equity shall be cumulative and
concurrent. No termination of this Lease or the taking or recovering of the
Leased Premises shall deprive Landlord of any of its remedies or actions against
Tenant for any and all sums due at the time, or which under the terms hereof,
would in the future become due, nor shall the bringing of any action for Rent or
breach of covenant, or the resort to any other remedy herein provided for the
recovery of Rent be construed as a waiver of the right to obtain possession of
the Leased Premises. The rights and remedies given to Landlord in this Lease are
distinct, separate and cumulative remedies, and not one of them, whether or not
exercised by Landlord, shall be deemed to be in exclusion of any of the others.
20. RIGHT OF ASSIGNEE OF LANDLORD. The right to enforce all of the
provisions of this Lease may be exercised by an assignee of all of Landlord's
right, title and interest in this Lease in its, his, her or their own name,
provided such assignee also agrees to perform and be responsible for all of the
obligations imposed upon Landlord in this Lease.
21. ATTORNMENT. In the event of the sale or assignment of
Landlord's interest in the Leased Premises or in the event of exercise of the
power of sale under any mortgage made by Landlord covering the Leased Premises,
Tenant shall attorn to the purchaser and recognize such purchaser as Landlord
under this Lease, provided said Purchaser agrees to perform and be responsible
for all of the obligations imposed upon Landlord in this Lease and agrees to
enter into an Attornment, Subordination and Non-Disturbance Agreement.
22. SUBORDINATION. At the option of Landlord or Landlord's
permanent lender, or both of them, this Lease and Tenant's interest hereunder
shall be subject and subordinate at all times to any mortgage or mortgages, deed
or deeds of trust, or such other security instrument or instruments, including
all renewals, extensions, consolidations, assignments and refinances of the
same, as well as all advances made upon the security thereof, which now or
hereafter become liens upon the Landlord's fee and/or leasehold interest in the
Leased Premises, and/or any and all of the buildings now and hereafter erected
to be erected and/or any and all of the land comprising the Property,
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provided, however, that in each such case, the holder of such other security,
the trustee of such deed of trust or holder of such other security instrument
shall agree that this Lease shall not be divested or in any way affected by
foreclosure or other default proceedings under said mortgage, deed or trust, or
other instrument or other obligations secured thereby, so long as Tenant shall
not be in default under the terms of this Lease; and Tenant agrees that this
Lease shall remain in full force and effect notwithstanding any such default
proceedings.
23. EXECUTION OF DOCUMENTS. The above subordination shall be
self-executing, but Tenant agrees upon demand to execute such other reasonable
document or documents as may be required by a mortgagee, trustee under any deed
of trust, or holder of similar security interest or any party to the types of
documents enumerated herein for the purpose of subordinating this Lease in
accordance with the foregoing. Tenant shall respond to all requests hereunder
for Attornment and Subordination Agreements within ten (10) business days of its
receipt of written request from Landlord.
24. ESTOPPEL AGREEMENTS. Tenant shall execute an estoppel
agreement in favor of any mortgagee or purchaser of Landlord's interest herein,
if requested to do so by any mortgagee. Such estoppel agreement shall be in a
form reasonably satisfactory to Tenant. Landlord agrees to execute an estoppel
agreement, in favor of any assignee or subtenant of Tenant's as permitted
hereunder, if requested to do so by Tenant. Such estoppel shall be in the form
reasonably requested by such assignee or subtenant and reasonably satisfactory
to Landlord.
25. CONDEMNATION. If the whole of the Premises shall be acquired
or condemned by eminent domain, or if part of the Leased Premises are taken so
that it is impossible for Tenant, in its sole but reasonable opinion, to use the
Leased Premises efficiently and economically for the conduct of its business,
then the term of this Lease shall cease and terminate as of the date on which
possession of the Premises is required to be surrendered to the condemning
authority. All Rent shall be paid up to the date of termination.
If part of the Leased Premises is taken so that the conduct of Tenant's
business in Tenant's sole but reasonable opinion is not materially impaired,
Landlord shall promptly restore the Building to a complete architectural unit
and this Lease shall cease as to the part taken and shall continue as to the
part not taken. In that event, the Rent shall be adjusted on a square footage
basis to reflect the new size of the Leased Premises.
Any award for the taking of all or any part of the Premises shall be
the property of Landlord whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Tenant shall be entitled to any
separate award paid by the condemning authority for loss of or damage to the
value of Tenant's Leasehold Interest, Tenant's trade fixtures, removal of
personal property, relocation expenses, loss of goodwill, and the value of any
unamortized improvements made by Tenant on or to the Leased Premises.
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26. NOTICES. All notices required to be given by either party to the other
shall be in writing and addressed as indicated below. All such notices shall be
deemed to have been properly given if either (i) served or delivered personally,
(ii) if sent United States certified mail, return receipt requested, postage
prepaid, or (iii) sent by Federal Express or other reputable and customarily
used overnight delivery service, costs prepaid and deposited with such service
prior to the deadline time for next day delivery. Any notice or demand shall be
effective and deemed received on the actual day of receipt or refusal thereof.
Notices must be addressed as follows:
Landlord: Triple Net Investments XIII, L.P.
c/o X.X. Xxxxxxxx Co, Inc.
000 Xxxxx 000, Xxxxx 000
Xxxxxx, XX 00000 Phone: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx Fax: 000-000-0000
Tenant: Paragon Technologies, Inc.
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000 Phone: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxx Fax: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxxx LLP
000 Xxxxxx Xxxx
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000 Phone: 000-000-0000
Attention: Xxxxxx X. Xxxxxx Fax: 000-000-0000
or to such other address which either party may hereafter request in writing by
notice given in a like manner.
27. RETURN OF LEASED PREMISES. By the end of the Term, or upon rightful
termination of this Lease, the Tenant, at its own expense, shall return the
Leased Premises to the Landlord in the same condition as at the beginning of the
Term, excluding normal wear and tear and damages which result from a casualty or
are the responsibility of Landlord. The Tenant shall perform all acts necessary
to comply with the terms of this clause, including, without limitation: (a)
removing all of the Tenant's property, (b) removing or leaving, in accordance
with the Landlord's written instructions, changes or additions made by the
Tenant, (c) repairing all interior partition walls, (d) removing all trash, and
(e) leaving the Leased Premises in broom clean condition. The Tenant shall
notify the Landlord two (2) weeks in advance of the termination of any utility
service.
If the Term ends, or if this Lease is rightfully terminated, and if the
Tenant has not substantially complied with the terms of this clause, then the
Tenant shall continue to pay rent at the rate of 1.75 times the Rent rate in
effect when the Term expired until the
13
Tenant effects compliance, without any right to possession of the Leased
Premises.
If the Tenant leaves any of the Tenant's property at the Leased
Premises after the end of the Term or after the rightful termination of this
Lease, then such property shall be deemed to be abandoned. The Landlord may keep
and use the Tenant's abandoned property or may sell, store, or dispose of that
property, in which case the costs related hereto shall be payable to Landlord
within ten (10) business days of receipt of an invoice therefore by Tenant.
28. BINDING EFFECT. All rights and liabilities herein given to, or imposed
upon the respective parties hereto, shall extend to and bind the several and
respective heirs, executors, administrators, successors and assigns of said
parties.
29. QUIET ENJOYMENT. Landlord represents and warrants that it is legally
empowered to enter into and to execute this Lease and that Tenant, upon paying
the Rent, and other charges herein provided for, and observing the keeping all
covenants, agreements and conditions of this Lease on its part to be kept, shall
quietly have and enjoy the Leased Premises during the term of this Lease and any
extension or renewal thereof with all rights, privileges and for the uses
provided herein, subject, however, to the exceptions, reservations and
conditions of this Lease.
30. NONEXCLUSIVE USE OF COMMON AREAS. Landlord hereby grants to Tenant the
nonexclusive license to use all designated common areas, including, but not
limited to, parking areas, kitchens, cafeterias, common hallways, restrooms,
HVAC equipment rooms, telephone equipment rooms and telephone equipment and
systems, security systems, halon systems, power panels and circuit breaker
panels and equipment.
31. MECHANICS LIEN. Tenant shall promptly pay any contractors and
materialmen who supply labor, work or materials to Tenant at the Leased Premises
or the Property so as to minimize the possibility of a lien attaching to the
Property. Tenant shall take all steps permitted by law in order to avoid the
imposition of any mechanic's, laborer's or materialmen's lien upon the Property.
Should any such lien or notice of lien be filed for work performed for Tenant,
other than by Landlord, Tenant shall bond against or discharge the same within
thirty (30) days after the lien or claim is filed or formal notice of said lien
or claim has been issued regardless of the validity of such lien or claim.
Nothing in this Lease is intended to authorize Tenant to do or cause any work or
labor to be done or any materials to be supplied for the account of Landlord,
all of the same to be solely for Tenant's account and at Tenant's risk and
expense.
32. SEVERABLE TERMS. If any provision in this Lease is contrary to any law,
declared unenforceable or unconstitutional, then the remainder of this Lease
shall remain in effect.
33. ENTIRE AGREEMENT. This Lease and any riders and exhibits and addendum
that may be attached hereto, set forth all the promises, agreements, conditions
and understandings between Landlord or its agents and Tenant relative to the
Premises and
14
the Leased Premises, and there are no promises, agreements, conditions or
understandings, either oral or written, between them other than are herein set
forth. Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon Landlord or Tenant unless
reduced to writing and signed by them.
34. MEMORANDUM OF LEASE. The parties hereto agree to execute a Memorandum of
Lease Agreement in the form attached hereto as Exhibit B to set forth the legal
---------
description of the Leased Premises, the Term, and Effective Date and no other
terms or conditions of this Lease. Tenant shall at its option, record said
Memorandum of Lease Agreement in the applicable jurisdiction at its own cost and
expense.
35. REAL ESTATE BROKER'S COMMISSION. Landlord and Tenant represent to one
another that there were no brokerage firms or other individuals claiming a
commission for this lease transaction. The parties shall indemnify and hold each
other harmless against any brokerage claims by any other broker or other person
or entity who claims its services were utilized or consulted by the indemnifying
party and who claims a commission for any reason.
36. TRASH REMOVAL, JANITORIAL SERVICE AND UTILITIES. Tenant shall contract
with a certified hauler and assume all costs associated with trash removal and
recycling for waste generated by Tenant at the Leased Premises. Tenant shall pay
for all janitorial services furnished to the Leased Premises. If utilities are
separately metered, Tenant shall pay for all such services to the Leased
Premises, including, but not limited to electric, gas, oil, phone, cable, water
and sewer.
37. COMPLIANCE WITH ENVIRONMENTAL LAWS. Landlord represents that to the best
of its knowledge the Premises is in compliance with all federal, state and local
environmental laws and regulations. Landlord will hold Tenant harmless from any
liability, including clean up costs, resulting from environmental conditions
that existed on the Premises prior to the Effective Date of the Lease including
without limitation legal costs associated with defending itself against any
action taken against it as a result of such condition.
Tenant agrees that it shall not use, release, discharge, deposit or
introduce any hazardous materials or substances including petroleum products or
derivatives to the Premises except to the extent that such products are in
compliance with all applicable laws, ordinances and regulations, and Tenant
shall indemnify, defend and hold Landlord harmless from any loss, damage or
liability resulting from Tenant's breach of the foregoing including legal costs
associated with defending itself against any action taken against it pursuant to
the acts or omissions of Tenant.
Tenant shall immediately supply Landlord with any correspondence from
any governing authority regarding environmental matters at the Premises. Prior
to Tenant's execution of this Lease, Landlord has supplied Tenant with a copy of
a recent Phase One Environmental Audit of the Premises by an environmental
consultant reasonably
15
acceptable to Tenant that sets forth an evaluation of the property.
38. WAIVER OF TRIAL BY JURY
In the event any issue related to this Lease between Landlord and
Tenant results in litigation, both Landlord and Tenant waive the right to a
trial by jury.
39. CONFESSION OF JUDGMENT.
(a) CONFESSION OF JUDGMENT FOR RENT. TENANT HEREBY EMPOWERS ANY
-------------------------------
PROTHONOTARY OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR TENANT AFTER AN
EVENT OF DEFAULT IN ANY AND ALL ACTIONS WHICH MAY BE BROUGHT FOR RENT AND/OR THE
CHARGES, PAYMENTS, COSTS AND EXPENSES HEREIN RESERVED AS RENT, OR HEREIN AGREED
TO BE PAID BY TENANT AND TO SIGN FOR TENANT AN AGREEMENT FOR ENTERING IN ANY
COMPETENT COURT AN ACTION OR ACTIONS FOR RECOVERY OF SUCH RENT OR OTHER CHARGES
OR EXPENSES, AND IN SAID SUIT OR IN SAID ACTION OR ACTIONS TO CONFESS JUDGMENT
AGAINST TENANT FOR ALL OR ANY PART OF THE RENT SPECIFIED IN THIS LEASE THEN DUE
AND UNPAID, AND OTHER CHARGES, PAYMENTS, COSTS AND EXPENSES RESERVED AS RENT,
TOGETHER WITH AN ATTORNEY'S COMMISSION OF FIVE (5%) PERCENT OF THE AMOUNT DUE
(BUT NOT LESS THAN $5,000.00). SUCH AUTHORITY SHALL NOT BE EXHAUSTED BY ONE
EXERCISE THEREOF BUT JUDGMENT MAY BE CONFESSED AS AFORSAID FROM TIME TO TIME
AFTER SUBSEQUENT EVENTS OF DEFAULT.
(b) CONFESSION OF JUDGMENT FOR POSSESSION. UPON AN EVENT OF DEFAULT OR
-------------------------------------
THE EXPIRATION OF THE TERM, IT SHALL BE LAWFUL FOR ANY ATTORNEY OF ANY COURT OF
RECORD TO APPEAR AS ATTORNEY FOR TENANT AS WELL AS FOR ALL PERSONS CLAIMING BY,
THROUGH OR UNDER TENANT AND TO SIGN AN AGREEMENT FOR ENTERING IN ANY COMPETENT
COURT AN ACTION IN EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING BY, THROUGH
OR UNDER TENANT AND THEREIN CONFESS JUDGMENT FOR THE RECOVERY BY LANDLORD OF
POSSESSION OF THE LEASED PREMISES, FOR WHICH THIS LEASE SHALL BE ITS SUFFICIENT
WARRANT, WHEREUPON, IF LANDLORD SO DESIRES, A WRIT OF POSSESSION OR OTHER
APPROPRIATE WRIT UNDER THE PENNSYLVANIA RULES OF CIVIL PROCEDURE THEN IN EFFECT
MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS; PROVIDED, HOWEVER,
IF THIS LEASE IS TERMINATED AND POSSESSION OF THE LEASED PREMISES REMAIN IN OR
BE RESTORED TO TENANT, LANDLORD SHALL HAVE THE RIGHT FOR THE SAME EVENT OF
DEFAULT AND UPON ANY SUBSEQUENT EVENT OF DEFAULT OR EVENTS OF DEFAULT, TO BRING
16
ONE OR MORE FURTHER ACTION OR ACTIONS AS HEREINBEFORE SET FORTH TO RECOVER
POSSESSION OF THE LEASED PREMISES AND CONFESS JUDGMENT FOR THE RECOVERY OF
POSSESSION OF THE LEASED PREMISES AS HEREINABOVE PROVIDED.
(c) PROCEEDINGS. IN ANY ACTION OF EJECTMENT AND/OR RENT, LANDLORD SHALL
-----------
FIRST CAUSE TO BE FILED IN SUCH ACTION AN AFFIDAVIT MADE BY IT OR SOMEONE ACTING
FOR IT, SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF JUDGMENT,
AND, IF A TRUE COPY OF THIS LEASE (AND OF THE TRUTH OF THE COPY OF SUCH
AFFIDAVIT SHALL BE SUFFICIENT EVIDENCE) BE FILED IN SUCH ACTION, IT SHALL NOT BE
NECESSARY TO FILE THE ORIGINALS AS A WARRANT OF ATTORNEY, ANY RULE OF COURT,
CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING. TENANT RELEASES TO LANDLORD
AND TO ANY AND ALL ATTORNEYS WHO MAY APPEAR FOR TENANT, ALL PROCEDURAL ERRORS IN
SAID PROCEEDINGS AND ALL LIABILITY THEREOF. IF PROCEEDINGS SHALL BE COMMENCED BY
LANDLORD TO RECOVER POSSESSION UNDER THE PENNSYLVANIA ACTS OF ASSEMBLY AND RULES
OF CIVIL PROCEDURE UPON AN EVENT OF DEFAULT, TENANT SPECIFICALLY WAIVES THE
RIGHT TO THE THREE (3) MONTHS' NOTICE AND TO THE FIFTEEN (15) OR THIRTY (30)
DAYS, NOTICE REQUIRED BY THE PENNSYLVANIA LANDLORD AND TENANT ACT OF 1951, AND
AGREES THAT FIVE (5) DAYS NOTICE SHALL BE SUFFICIENT IN EITHER OR ANY SUCH CASE.
(d) ACKNOWLEDGEMENT OF CONFESSION OF JUDGMENT. TENANT CONFIRMS TO
-----------------------------------------
LANDLORD THAT (i) THIS LEASE AND THE FOREGOING WARRANTS OF ATTORNEY HAVE BEEN
NEGOTIATED AND AGREED UPON IN A COMMERCIAL CONTEXT; (ii) TENANT IS A BUSINESS
ENTITY AND ITS PRINCIPALS ARE KNOWLEDGEABLE IN COMMERCIAL MATTERS; (iii) TENANT
HAS CONSULTED WITH ITS OWN SEPARATE COUNSEL REGARDING THIS LEASE; (iv) ON THE
ADVICE OF ITS OWN SEPARATE COUNSEL, TENANT HAS AGREED TO THE AFORESAID WARRANTS
OF ATTORNEYS TO CONFESS JUDGMENT AGAINST TENANT; AND (v) TENANT UNDERSTANDS THAT
IT IS WAIVING CERTAIN RIGHTS WHICH IT WOULD OTHERWISE POSSESS.
17
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
to the terms of this Lease, have caused this Lease to be executed the day and
year first above written.
TENANT: LANDLORD:
PARAGON TECHNOLOGIES, INC. TRIPLE NET INVESTMENT XIII, L.P.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------ ---------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: /s/ Xxxxx X. Xxxxxxxx
Title: President & CEO -----------------------------
Title: /s/ Op. Manager of
-----------------------------
The General Partner
-----------------------------
Date: /s/ 2-21-03 Date: /s/ 2-21-03
---------------------------- -----------------------------
Attest: /s/ Xxxxxx X. Xxxxxxxx Attest: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- -----------------------------
Title: /s/ CFO Title: /s/ Counsel
-------------------------- -----------------------------
18
EXHIBIT A
LEASED PREMISES
Diagram of leased office space.
19
EXHIBIT B
MEMORANDUM OF LEASE
N/A
20
