SURRENDER AND ACCEPTANCE AGREEMENT
1.0 PARTIES
1.1 THIS AGREEMENT made this 31st day of December, 2003 is between
TRIAD REALTY ASSOCIATES L.L.C. ("Landlord") whose address is
c/o Xxxx-Xxxx Realty Corporation, 00 Xxxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000 and OWOSSO CORPORATION ("Tenant"), whose
address is 0000 Xxxxxxxxxxx Xxxxxxxxx, Xxxx xx Xxxxxxx,
Xxxxxxxxxxxx 00000.
2.0 STATEMENT OF FACTS
2.1 Landlord's predecessor in interest, Philadelphia Freedom
Partners, L.P., and Tenant entered into a lease dated
September 6, 1996 (the "Lease") covering approximately 12,715
gross rentable square feet on the first (1st) floor (the
"Premises") in the building located at 0000 Xxxxxxxxxxx
Xxxxxxxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx (the "Building"); and
2.2 Tenant has been in default under the Lease; and
2.3 Tenant wishes to avoid any future defaults under the Lease and
surrender and vacate the Premises prior to the Lease
expiration date of September 30, 2006 (the "Lease Expiration
Date"); and
2.4 Landlord shall agree to waive its further rights, except those
rights exercised in this Agreement, with respect to any prior
default by Tenant under the Lease and agree to an early
termination of the Lease, provided that Tenant complies with
the provisions set forth herein; and
2.5 The parties desire to amend certain terms of the Lease as set
forth below.
3.0 AGREEMENT
NOW, THEREFORE, in consideration of the Premises and the covenants
hereinafter set forth, Landlord and Tenant agree as follows:
3.1 The above recitals are incorporated herein by reference.
3.2 All capitalized and non-capitalized terms used in this
Agreement which are not separately defined herein but are
defined in the Lease shall have the meaning given to any such
term in the Lease.
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3.3 Tenant hereby acknowledges that Tenant has been in default
under the Lease. In consideration for Landlord's waiver of any
further rights that Landlord may have under the Lease in
connection with such default, except those rights exercised in
this Agreement, Tenant hereby agrees to deposit with Landlord
additional security upon Tenant's execution and delivery of
this Agreement, in an amount equal to $51,618.42. On the first
(1st) day of each of the calendar months of January, 2004,
February, 2004 and March 2004, Landlord shall withdraw from
such security deposit the monthly installment of Base Rent and
Additional Rent payable by Tenant under the Lease. In
consideration for Landlord's waiver of its rights under the
Lease with respect to any prior default by Tenant, except
those rights exercised in this Agreement, and provided that
Tenant complies with the terms of this Agreement and otherwise
is not in default under the Lease, the Lease shall expire on
the earlier of (i) the date a successor tenant occupies the
entire portion of the Premises not currently subject to the
Sublease (as hereinafter defined) and begins paying rent or
(ii) March 31, 2004 (the "Termination Date"). If Tenant fails
to comply with this Agreement or is otherwise in default under
the Lease prior to the Termination Date, then the Lease shall
expire on September 30, 2006, and Landlord shall have all of
its rights and/or remedies under the Lease and at law and/or
equity and no waiver or impairment of any of Landlord's rights
and/or remedies shall occur. Notwithstanding anything
contained herein or in the Lease to the contrary, as of the
date that Tenant shall vacate and surrender the Premises,
Tenant shall have no further obligation to maintain the
Premises or maintain insurance covering the Premises.
3.4 In addition to the foregoing and as additional consideration
for this Agreement, Tenant agrees that Landlord shall have the
right to negotiate the letter of credit currently being held
by Landlord as security under the Lease and retain the
proceeds therefrom in the amount of $191,000.00 on the
Termination Date. Landlord's right to use and apply any or all
of the security provided for in this Agreement and/or any
amounts paid by Tenant to the Landlord under this Agreement
shall not in any way be impaired or waived by the early
surrender and/or termination under the terms of this
Agreement.
3.5 As additional consideration for this Agreement, Landlord
grants to the Tenant the right to assign or sublet the entire
Premises excluding the portion of the Premises that is subject
to the sublease to Communications Media Incorporated ("CMI")
upon the conditions, limitations, and terms set forth herein
and is also subject to all terms of the Lease. The Tenant's
right to assign or sublet referred to in this paragraph shall
only be to a single subtenant or assignee. Any assignment or
sublet under this paragraph shall only be made to an assignee
or subtenant for the same use of the Premises as that of the
Tenant and, further provided, that the assignee's term and
assumption of obligations under the Lease shall commence on
April 1, 2004 subject to the assignee giving to the Landlord
and the Landlord being satisfied with same, adequate assurance
of future performance under said Lease. The parties agree that
both the Landlord and the Tenant shall have the concurrent
right to obtain a tenant or assignee, as the case may be. In
the event Landlord shall obtain a tenant, Landlord shall give
written notice thereof to Tenant, and the Tenant's right to
obtain an assignee shall terminate and the Tenant shall have
no further claim or rights hereunder including but no limited
to a refund of any monies or claim for damages. Tenant's right
to assign or sublet referred to in this paragraph shall expire
at 5:00 pm on March 31, 2004. Tenant's right to assign or
sublet referred to in this paragraph is also conditioned upon
the complete absence of any future defaults by the Tenant
under the Lease and this Agreement. Any such default shall
constitute a waiver by the Tenant of the right to assign or
sublet, as discussed in this paragraph, except that Tenant's
failure to maintain insurance or maintain the Premises
accruing subsequent to the Tenant's surrender and/or vacating
of the Premises shall not be considered a default for purposes
of this paragraph only.
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3.6 Tenant acknowledges that its agreement to pay Landlord for
November 2003 rent and December 2003 rent served as partial
consideration for the Landlord's consent to amend certain
terms of the Lease as set forth in this Agreement and based on
the conditions set forth herein, to permit continued
possession of the Premises through January 15, 2004 under the
terms of this Agreement despite the Tenant's prior default,
and to permit early surrender and early termination of the
Lease under the terms of this Agreement and based on the
conditions set forth herein.
3.7 As additional consideration for this Agreement, Tenant shall
procure from the subtenant occupying the Premises, CMI, an
attornment agreement, satisfactory to Landlord, whereby CMI
agrees to attorn to and accept Landlord as sublandlord under
the sublease dated June 1, 2000 between Tenant and CMI
("Sublease") for the balance of the Sublease term. Tenant
shall deliver the fully executed attornment agreement to
Landlord within ten (10) days after the date hereof and shall
be effective immediately upon CMI's execution of the
attornment agreement. Tenant shall transfer custody of the
entire security deposit in the amount of $19,800 ("CMI
Security Deposit") of CMI for the Premises immediately upon
attornment. As part of the attornment agreement discussed in
this paragraph, Tenant shall make and obtain from the CMI a
representation that CMI is not in default under the Sublease
or Lease. In addition, as part of the attornment agreement
discussed in this paragraph, Tenant consent to and shall
obtain CMI's consent to an assignment of the CMI Security
Deposit to Landlord.
3.8 Tenant agrees that under P. 14 of the Consent to Sublease,
Landlord shall, upon notice to CMI, be permitted to receive
directly from CMI all sums due or payable to the Tenant by
CMI, pursuant to the Sublease until such time as an attornment
is effected, in which case payments will be made by CMI to
Landlord by virtue of the attornment.
3.9 Provided that Tenant has complied with each of its obligations
hereunder and under the Lease and in consideration for the
Landlord's covenants herein, Tenant shall surrender, and
Landlord agrees to accept Tenant's surrender, of the Premises
on January 15, 2004 ("Surrender Date") and to release Tenant
from any obligations as set forth in the Lease with respect to
the Premises for the period subsequent to the Termination Date
as if such date were date that the term of the Lease was
originally to expire, provided: (i) Tenant is not in default
of the Lease; and (ii) the Premises, except the CMI sublease
space is delivered to Landlord in the condition required by
the Lease, as if the Surrender Date was the last day of the
term; and (iii) on or before the Surrender Date, Tenant shall
remove its exterior signs, inventory, trade fixtures,
equipment and other personal property from the Premises, in
accordance with the Lease; except that as additional
consideration for this Agreement, Tenant shall relinquish all
of its right, title and interest in and to the furniture and
telephone equipment in the Premises listed on Exhibit A
attached hereto and made a part hereof. Tenant acknowledges
that all of the consideration provided to the Tenant as set
forth in this Agreement, provides the Tenant with new value
inuring to the net financial benefit of the Tenant.
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3.10 Tenant hereby represents to Landlord that (i) there exists no
default under the Lease by Landlord; (ii) Tenant is entitled
to no credit, free rent or other offset or abatement of the
rents due under the Lease; and (iii) there exists no offset,
defense or counterclaim to Tenant's obligation under the
Lease.
3.11 Landlord shall not pay or be obligated to pay any commission
or other fee related to this Agreement, and Tenant agrees to
pay any such commission or fee and indemnify and hold Landlord
harmless from any and all claims of any broker(s) related to
this Agreement and any and all costs incurred by Landlord,
including but not limited to legal fees, due to such claims.
3.12 Except as expressly amended herein, the Lease shall remain in
full force and effect as if the same had been set forth in
full herein, and Landlord and Tenant hereby ratify and confirm
all the terms and provisions thereof.
3.13 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective legal
representatives, successors and permitted assigns.
3.14 Each party agrees that it will not raise or assert as a
defense to any obligation under the Lease or this Agreement or
make any claim that the Lease or this Agreement is invalid or
unenforceable due to any failure of this document to comply
with ministerial requirements including, but not limited to,
requirements for corporate seals, attestations, witnesses,
notarizations, or other similar requirements, and each party
hereby waives the right to assert any such defense or make any
claim of invalidity or unenforceability due to any of the
foregoing.
3.15 If Tenant fails to comply with any of the terms of this
Agreement or the Lease as amended herein, Landlord at its
discretion, may exercise any and all rights that they may have
against the Tenant, including but not necessarily limited to
seeking to enforce this agreement or to declare this agreement
null, void, and rescinded, in whole or in part. In addition,
if Tenant fails to comply with any of the terms of this
Agreement or the Lease as amended herein, the Lease shall
expire on September 30, 2006, and Landlord shall have all of
its rights and/or remedies under the Lease and at law and/or
equity and no waiver or impairment of any of Landlord's rights
and/or remedies shall occur regardless of any purported
waivers herein.
IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands
and seals the date and year first above written, and acknowledge one to the
other that they possess the requisite authority to enter into this transaction
and to sign this Agreement.
LANDLORD: TENANT:
TRIAD REALTY ASSOCIATES L.L.C. OWOSSO CORPORATION
By: Triad Realty Holding L.L.C., member
By: Xxxx-Xxxx Realty , L.P., member
By: Xxxx-Xxxx Realty Corporation, its
general partner
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx, Xx.
Vice President - Leasing President
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