Exhibit 10.1
AGREEMENT OF LEASE
BETWEEN
BALANCED CAPITAL LLC
Landlord
AND
WORLDGATE COMMUNICATIONS, INC.
Tenant
TABLE OF CONTENTS
LEASE
Section Page
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1. REFERENCE DATA 1
2. DEMISE 4
3. TERM 4
4. OPTION TO RENEW - HOLDING OVER 5
5. RENT 6
6. OPERATING EXPENSE 6
7. AS IS 13
8. ALTERATIONS OR IMPROVEMENTS BY TENANT 13
9. PERMITTED USES 13
10. BUILDING OPERATION AND SERVICES; ELECTRICITY 14
11. INTERRUPTION OF SERVICES 15
12. REPAIRS 15
13. INTENTIONALLY OMITTED 16
14. QUIET ENJOYMENT 16
15. LANDLORD'S RIGHT OF ENTRY 16
16. SURRENDER OF LEASED PREMISES 17
17. MISCELLANEOUS COVENANTS 17
18. RULES AND REGULATIONS 18
19. PERFORMANCE OF COVENANTS 19
20. EMINENT DOMAIN 19
21. CASUALTY DAMAGE 20
22. HOLD HARMLESS; PUBLIC LIABILITY INSURANCE; WAIVER OF SUBROGATION 22
23. MORTGAGEE AND OTHER AGREEMENTS 23
24. SUBORDINATION AND ATTORNMENT 23
25. ASSIGNMENT AND SUBLETTING 24
26. DEFAULT 25
27. LANDLORD'S REMEDIES 26
28. LEGAL FEES AND OTHER COSTS 29
29. LATE CHARGE 30
30. SUCCESSORS AND ASSIGNS 30
31. WAIVERS 30
32. WAIVER OF TRIAL BY JURY 30
33. SEVERABILITY 30
34. NOTICES; PAYMENT OF RENTS 30
35. AMENDMENT AND MODIFICATIONS 32
36. SECURITY DEPOSIT; OPTION TO USE LETTER OF CREDIT 32
37. ENVIRONMENTAL MATTERS 33
38. BROKERS 36
39. FINANCIAL STATEMENTS 36
40. PARKING 36
41. OPTION TO PURCHASE. 36
42. HEADINGS AND TERMS 40
43. GOVERNING LAW 40
44. PRESENT LEASE 40
45. SIGNS 40
46. MEMORANDUM OF LEASE 41
47. ANTENNA(S) INSTALLATION 41
48. LANDLORD'S WAIVER 42
49. MOVING COSTS 42
50. LANDLORD'S CONDITION 42
EXHIBITS
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Exhibit "A" Rules and Regulations
Exhibit "B" Tenant Estoppel Letter
Exhibit "C" Janitorial Specifications
Exhibit "D" Form of Landlord's Waiver
Exhibit "E" Representations from Seller in Sale Agreement
Lease Dated: October 7, 1998
1. REFERENCE DATA
Any reference in this Lease to the following subjects shall
incorporate therein the data stated for the subject(s) in this Section:
LANDLORD: Balanced Capital LLC
LANDLORD'S ADDRESS: 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000
TENANT: WorldGate Communications, Inc.
TENANT'S ADDRESS: Glenview Corporate Center
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxxx 00000
LEASED PREMISES: Building known as 0000 Xxxxxxx Xxxxxx in Bensalem,
Bucks County, PA, provided that until possession of
entire Building has been delivered to Tenant, the
term "Leased Premises" shall refer only to that
portion of the Building which has been delivered.
RENTABLE AREA OF LEASED PREMISES:72,000 Rentable Square Feet, anticipated to be
delivered in two phases as described below. Within 15 days after execution of
this Lease, the Building is to be measured according to BOMA standards and
methodology; if the actual rentable square feet varies by 1,000 feet or more,
Rent and other charges shall be revised to reflect actual rentable square
footage, and references in this Lease to 72,000 shall be deemed amended to refer
to the actual square footage of the Building.
LEASE TERM: Ten (10) years plus the partial year ("Commencement Partial Year")
beginning when the first space is delivered and ending on the last day of the
calendar month in which the Last Delivery Date occurs (or if the Last Delivery
Date is the first day of a calendar month, then the Commencement Partial Year
shall end on the last day of the calendar month preceding Last Delivery Date).
COMMENCEMENT DATE: February 15, 1999 as to at least 40,000 rentable square feet,
and July 1, 1999 as to the remainder of the Building.
LAST DELIVERY DATE: July 1, 1999 or such other date as the parties may agree.
ANNUAL FIXED RENT: From the Commencement Date through the last day of the
Commencement Partial Year, Annual Fixed Rent shall be $12.00 per square foot of
space delivered. For the balance of the Lease Term, Annual Fixed Rent shall be
as follows:
Annual Monthly
Lease Year 1 (7/1/1999 through 6/30/2000) 864,000. 72,000
Lease Year 2 (7/1/2000 through 6/30/2001) 882,000. 73,500
Lease Year 3 (7/1/2001 through 6/30/2002) 882,000. 73,500
Lease Year 4 (7/1/2002 through 6/30/2003) 900,000. 75,000
Lease Year 5 (7/1/2003 through 6/30/2004) 918,000. 76,500
Lease Year 6 (7/1/2004 through 6/30/2005) 936,000. 78,000
Lease Year 7 (7/1/2005 through 6/30/2006) 954,000. 79,500
Lease Year 8 (7/1/2006 through 6/30/2007) 972,000. 81,000
Lease Year 9 (7/1/2007 through 6/30/2008) 990,000. 82,500
Lease Year 10 (7/1/2008 through 6/30/2009) 990,000. 82,500
The dates used for each Lease Year assume that the balance of the Building is
delivered in June 1999 or on July 1, 1999. If delivery of the balance of the
Building is not in June 1999 or on July 1, 1999, then the rent change dates
listed above shall be adjusted to reflect actual Lease Years.
If Tenant exercises the applicable renewal options pursuant to Section 4(a),
Annual Fixed Rent for the Lease Years of the option periods shall be as follows:
Annual Monthly
Lease Year 11 990,000. 82,500
Lease Year 12 999,900. 83,325
Lease Year 13 1,009,899. 84,158
Lease Year 14 1,019,998. 85,000
Lease Year 15 1,030,198. 85,850
Lease Year 16 1,040,500. 86,708
Lease Year 17 1,050,905. 87,575
Lease Year 18 1,061,413. 88,451
Lease Year 19 1,072,027. 89,336
Lease Year 20 1,082,748. 90,229
OPERATING EXPENSE ESTIMATE: $324,000 per year ($4.50 per square foot), subject
to adjustment as provided in Section 6 below.
LEASE YEAR: "Lease Year" shall mean the 12 month period beginning on the Last
Delivery Date if the Last Delivery Date is the first day of a calendar month, or
beginning on the first day of the next succeeding calendar month if the Last
Delivery Date is not the first day of a month ("Lease Year 1"), and each
succeeding 12 month period, provided however that the Commencement Partial Year
shall be part of Lease Year 1.
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TENANT'S PROPORTIONATE SHARE: 100.00% following delivery of entire Building;
until delivery of entire Building, calculated by dividing rentable square feet
delivered by 72,000
PERMITTED USES: general office, together with associated incidental uses
including miscellaneous assembly and testing of electronic parts, Channel
HyperLinking and WorldGate Service Operations.
SECURITY DEPOSIT: $1,026,000 until the last day of the sixth month of Lease Year
2, then reducing as follows:
990,000 until the last day of the sixth month of Lease Year 3;
864,000 until the last day of the sixth month of Lease Year 4;
750,000 until the last day of the sixth month of Lease Year 7
(i.e., for 3 years);
612,000 until the last day of the sixth month of Lease Year 8;
432,000 until the last day of the sixth month of Lease Year 9;
288,000 until the last day of the sixth month of Lease Year 10
ADVANCE RENTAL PAYMENT: $-0-
BROKER: Xxxxxx & Associates, Inc.
LANDLORD:
BALANCED CAPITAL LLC
By: /s/ Xxxxxx X. Brand By: /s/ Xxxxx Xxxxxxx
----------------------------- -----------------------------
Xxxxxx X. Brand, Manager Xxxxx Xxxxxxx, Manager
TENANT:
WORLDGATE COMMUNICATIONS, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
-------------------------------- ----------------------------
Attest Name:
Title:
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2. DEMISE. Landlord hereby demises and lets to Tenant and Tenant takes
and hires from Landlord, for the term and subject to the provisions hereof, the
existing building (hereafter referred to as the "Building" or the "Leased
Premises") containing approximately 72,000 rentable square feet located on the
parcel of land (the "Lot") commonly known as 0000 Xxxxxxx Xxxxxx in Bensalem
Township, Bucks County, Pennsylvania, together with the use of all existing
parking spaces on the Lot for itself and its employees and invitees, such use of
parking to be subject to common use and occupancy by Landlord's agents and
invitees in the exercise of Landlord's rights and responsibilities under this
Lease. The Building and Lot are sometimes collectively called the "Property".
3. TERM.
(a) This demise shall be for the term (hereinafter referred to
as "the Term") beginning on the date when possession of any portion of the
Building is delivered to Tenant (the "Commencement Date") and ending, without
the necessity of notice from either party to the other, on the last day of the
calendar month in which occurs the tenth (10th) anniversary of the Last Delivery
Date (unless the Last Delivery Date is the first day of the month, in which
event the Term shall end on the last day of the calendar month preceding such
tenth anniversary), subject to the renewal options set forth in paragraph 4
below. Upon delivery of any part of the Building, the parties shall sign a
letter confirming the Commencement Date; upon delivery of the balance of the
Building, they shall sign a letter confirming the expiration date.
(b) Landlord shall use all reasonable efforts to deliver not
less than 40,000 square feet of the Premises by February 15, 1999, and the
balance of the Building no later than July 1, 1999 (the respective "Delivery
Deadlines"). The parties acknowledge that the Building is occupied and that the
current occupant is required by the governing documentation to vacate prior to
the Delivery Deadlines. Landlord shall use prompt, diligent efforts to enforce
the timely surrender of the Building. However, if Landlord fails to meet a
Delivery Deadline for any reason not within Landlord's control, Landlord shall
not be subject to any liability to Tenant, and failure to deliver the Premises
to Tenant by the respective Delivery Deadline or any other date shall not in any
respect affect the validity or continuance of this Lease or any obligation of
Tenant hereunder.
(c) Tenant shall have the right to terminate this Lease as of
the end of Lease Year 1 or the last day of any calendar month thereafter, in any
such case upon 12 full calendar months' prior written notice (the date
designated in said written notice as the termination date being referred to
herein as the Early Termination Date), provided that Tenant pays an early
termination fee (the "Early Termination Fee") that is to be calculated as
follows, and further provided that Tenant pays such Early Termination Fee no
later than the dates set forth in clause (c)(iv) below.
(i) If the Tenant elects to terminate as of the last
day of Lease Year 1, the Early Termination Fee will be $2,052,000. Thereafter,
if Tenant elects to terminate as of the last day of the sixth month of any
subsequent Lease Year, the Early Termination Fee will the amount set forth
below:
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EARLY TERMINATION DATE EARLY TERMINATION FEE
----------------------- ---------------------
Last Day of sixth month of Lease Year 2 1,980,000.
Last Day of sixth month of Lease Year 3 1,728,000.
Last Day of sixth month of Lease Year 4 1,476,000.
Last Day of sixth month of Lease Year 5 1,188,000.
Last Day of sixth month of Lease Year 6 864,000.
Last Day of sixth month of Lease Year 7 612,000.
Last Day of sixth month of Lease Year 8 432,000.
Last Day of sixth month of Lease Year 9 288,000.
Last Day of sixth month of Lease Year 10 0
(ii) The last day of the sixth month of each Lease
Year is referred to herein as the "Change Date." If the Tenant elects to
terminate as of the last day of a calendar month which is not a Change Date,
then the Early Termination Fee shall be the sum of the two following numbers:
(A) multiply the fixed early termination fee set forth above for the Change Date
preceding the Early Termination Date times a fraction, the denominator of which
is 12 and the numerator of which is the number of calendar months remaining
after the Early Termination Date until the next Change Date; and (B) multiply
the early termination fee set forth above for the Change Date next succeeding
the Early Termination Date times a fraction, the denominator of which is 12 and
the numerator of which is the number of calendar months from the last Change
Date to (and including) the Early Termination Date.
FOR EXAMPLE, if Tenant gives notice of its election to
terminate as of the last day of the fourth month of Lease Year
6, the early termination fee would be $918,000, calculated as
follows: (A) $1,188,000 [the fee for the preceding Change Date
- the last day of the sixth month of Lease Year 5] times
2/12ths [the number of months remaining after termination
until the next Change Date - the last day of the sixth month
of Lease Year 6 - divided by 12] = $198,000, plus (B) $864,000
[the fee for the next Change Date - the last day of Lease Year
6] times 10/12ths [the number of months until termination from
the last Change Date, divided by 12] = $720,000. (A) $198,000
plus (B) $720,000 = $918,000.
(iii) This subparagraph 3(c)(iii) applies only if
Landlord and Tenant (each in their sole and absolute discretion) sign and
deliver a written agreement (the "New Agreement") for Landlord to develop or
purchase a replacement facility (the "Replacement Facility") for Tenant to
occupy instead of the Leased Premises. The Early Termination Fee will not be
payable under this Lease if Tenant takes occupancy of the Replacement Facility
under the New Agreement. The Early Termination Fee will not be payable if by
agreement of the parties the New Agreement is terminated, Tenant's notice of
early termination is rescinded, and Tenant remains in the Leased Premises under
this Lease. If Tenant shall have paid the Early Termination Fee (or any portion
thereof) and it is subsequently waived, the amount paid for the Fee shall be
returned to Tenant within ten business days after Tenant takes possession of the
Replacement Facility.
(iv) The Early Termination Fee payment dates are as
follows: one fourth shall be paid concurrently with the Tenant's notice of early
termination; one fourth shall
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be paid in four equal monthly installments with Tenant's payment of Fixed Rent
on the first day of the sixth, seventh, eighth and ninth months of the 12-month
notice period (but if Tenant shall vacate the Leased Premises, that second
fourth shall be payable in one installment no later than the date Tenant vacates
the Leased Premises); the remaining one-half shall be paid no later than thirty
(30) days prior to the Early Termination Date, Upon due exercise of the early
termination right and payment of the Early Termination Fee required herein, this
Lease shall expire on the date set forth in Tenant's notice as if such date were
the scheduled expiration date of the Term.
4. OPTION TO RENEW - HOLDING OVER.
(a) Tenant is hereby granted the option(s) to renew the Term
of this Lease for two (2) additional periods of five (5) years on each such
option provided that there shall not be an uncured Event of Default hereunder
(as hereinafter defined) by Tenant either at the time Tenant exercises the
option or on the Commencement Date of the renewal term and further provided that
Tenant shall exercise such option in writing not later than nine (9) months
prior to the expiration of the initial Term or the first renewal Term, as the
case may be, said renewal term to be upon the same terms and conditions of this
Lease except that the Annual Fixed Rent during the renewal Term shall be in the
amount set forth for the respective Lease Years in Section 1 above.
(b) If Tenant retains possession of the Leased Premises or any
part thereof after the termination of this Lease by expiration of the Lease Term
or otherwise without the consent of Landlord, Tenant shall pay Landlord (a) as
rent for such holding over, an amount, calculated on a per diem basis for each
day of such unlawful retention, equal to the greater of (i) 150% of the Annual
Fixed Rent, or (ii) the established market rental for the Leased Premises, for
the time Tenant thus remains in possession, plus, in each case, all Additional
Rent and other sums payable hereunder, and (b) all other damages, costs and
expenses sustained by Landlord by reason of Tenant's holding over. Without
limiting any rights and remedies of Landlord resulting by reason of the wrongful
holding over by Tenant (such as eviction proceedings), or creating any right in
Tenant to continue in possession of the Leased Premises, all Tenant's
obligations with respect to the use, occupancy and maintenance of the Leased
Premises shall continue during such period of unlawful retention.
5. RENT. Rent is payable by Tenant beginning on the Commencement Date
in monthly installments of one-twelfth (1/12th) of the Annual Fixed Rent and
one-twelfth (1/12th) of the Operating Expense Estimate, without prior notice or
demand, and without any set-off or deduction whatsoever, in advance, on the
first day of each month at Landlord's office or at such other place as Landlord
may direct in writing.
If the Lease Term commences on a day other than the first day
of a calendar month, Annual Fixed Rent and Annual Operating Expenses for the
partial month shall be apportioned pro rata using a fraction the numerator of
which is the actual number of days in the month in which the Lease Term
commences and the denominator of which is 365.
Tenant hereby covenants and agrees to pay the Annual Fixed
Rent, Operating Expense Estimate, Additional Rent and other sums payable to
Landlord hereunder when due, and to pay interest to Landlord at the Overdue
Interest Rate (a) on all overdue installments of Fixed
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Rent and the Operating Expense Estimate from the due date thereof to the date
of payment and (b) on all payments of Additional Rent or other sums payable
to Landlord hereunder from the tenth business day after demand for payment
until the date of payment. Upon default by Tenant in the payment of such
Additional Rent or other sums payable hereunder, Landlord shall be entitled
to all rights and remedies to which it would be entitled in default of the
payment of Fixed Rent and Operating Expense Estimate. As used herein, the
term "Overdue Interest Rate" shall mean and equal three percent (3%) per
annum over the prime interest rate announced from time to time by the largest
commercial bank whose principal office is located in Philadelphia or
Xxxxxxxxxx County, Pennsylvania as being its "prime" or benchmark rate of
interest.
6. OPERATING EXPENSE. Tenant shall pay to Landlord as Additional Rent
an amount equal to Tenant's Proportionate Share of Operating Expense for each
Operating Year. Commencing with the first month of the Lease Term, Tenant shall
pay to Landlord, on account of the Operating Expense for such Operating Year,
monthly installments in advance equal to one-twelfth (1/12th) of the Tenant's
Operating Expense Estimate for such Operating Year. If Tenant occupies the
Leased Premises or portion thereof for less than a full Operating Year, the
Operating Expense will be allocated proportionately to the amount of time in
such Operating Year that Tenant so occupies such space.
Within one hundred twenty (120) days following the end of each
Operating Year, Landlord shall furnish Tenant an Operating Expense Statement
setting forth (i) the Operating Expense for the preceding Operating Year, (ii)
Tenant's Proportionate Share, (iii) the Operating Expense Estimate paid by
Tenant, and (iv) the amount overpaid or underpaid by Tenant on account of
Operating Expense for such Operating Year (referred to herein as the "Operating
Expense Adjustment"). Within fifteen (15) days following the receipt of such
Operating Expense Statement (the "Expense Adjustment Date") Tenant shall pay to
Landlord as Additional Rent any underpaid Operating Expense Adjustment for such
Operating Year, or Landlord shall credit any overpaid Operating Expense
Adjustment against the next installments of Annual Fixed Rent and Operating
Expense Estimates becoming due under this Lease. The Operating Expense Statement
shall also set forth a revised Operating Expense Estimate for the then current
Operating Year (which revised estimate shall be based on the actual Operating
Expense for the preceding Operating Year, adjusted by reasonable changes, such
as changes in taxes or service contracts known to Landlord as of the date of the
issuance of the Operating Expense Statement). The new Operating Expense Estimate
shall be retroactive to the first day of the then current Operating Year, and
any credits or adjustments shall be handled in the same manner as overpayments
and underpayments for the preceding Operating Year.
As used in this Section 6 and Section 1 where applicable, the
following words and terms shall be defined as hereinafter set forth:
(a) "OPERATING YEAR" shall mean each calendar year occurring
during the Lease Term.
(b) "OPERATING EXPENSE ESTIMATE" shall mean and equal the
amount set forth in Section 1 of this Lease multiplied by the rentable area of
the Leased Premises.
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(c) "OPERATING EXPENSE STATEMENT" shall mean a statement in
writing signed by Landlord, setting forth in reasonable detail (i) the Operating
Expense for the preceding Operating Year, (ii) Tenant's Proportionate Share,
(iii) the Operating Expense Estimate paid by Tenant, and (iv) the Operating
Expense Adjustment for such Operating Year, or portion thereof. If requested by
Tenant no later than December 31 of any Operating Year, the Operating Expense
for such Operating Year shall be audited and certified by Landlord's independent
certified public accountant whose report thereon shall be available for
inspection by Tenant at Landlord's office during normal business hours, provided
that the cost thereof shall be included in Operating Expenses payable by Tenant.
Tenant shall have the right, at its own cost and expense, to
audit or inspect Landlord's records (but not more than once in any calendar
year) with respect to Taxes and Operating Expenses, as well as all other
additional rent payable by Tenant hereunder. Tenant shall give Landlord not less
than 30 days prior written notice of its intention to conduct any such audit.
Landlord shall cooperate with Tenant during the course of such audit, which
shall be conducted during normal business hours in Landlord's office. Landlord
agrees to make such personnel available to Tenant as is reasonably necessary for
Tenant, or for Tenant's employees or agents to conduct such audit, but in no
event shall such audit last more than five business days in duration. If such
audit discloses that the amount paid by Tenant as Tenant's Proportionate Share
or of other additional rental payable by Tenant hereunder has been overstated by
more than four (4) percent, then, in addition to immediately repaying such
overpayment to Tenant, Landlord shall also pay the reasonable cost incurred by
Tenant in connection with such audit.
(d) "OPERATING EXPENSE" shall mean the following expenses
incurred by Landlord in connection with the operation, repair and maintenance of
the Building and the Lot which expenses shall be consistent with those incurred
by other owners and operators of first class office buildings in the same
geographical area in which the Building is located:
(i) Wages, salaries, fees and other compensation and
payments and payroll taxes and contributions to any social security,
unemployment insurance, welfare, pension or similar fund and payments for other
fringe benefits required by law or by union agreement (or, if the employees or
any of them are non-union, then payments for benefits comparable to those
generally required by union agreement in first class office buildings in the
Philadelphia suburban area, which are unionized) made to or on behalf of all
employees of Landlord performing services rendered in connection with the
operation and maintenance of the Building and the Lot, including, without
limitation: window cleaners; janitors; miscellaneous handymen; watchmen; persons
engaged in patrolling and protecting the Building and the Lot; carpenters;
engineers; mechanics; electricians; plumbers; persons engaged in the operation
and maintenance of the Building and the Lot; building superintendent and
assistants; building manager; and clerical and administrative personnel.
(ii) The uniforms of all such employees, and the
cleaning, pressing and repair thereof.
(iii) Cleaning costs for the Building and the Lot,
including the windows and sidewalks, all snow and rubbish removal (including
separate contracts therefor) and the costs of all labor, supplies, equipment and
materials incidental thereto.
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(iv) Premiums and other charges incurred by Landlord
with respect to all insurance relating to the Building and the Lot and the
operation and maintenance thereof, including, without limitation: fire and
extended coverage insurance, including windstorm, hail, explosion, riot, rioting
attending a strike, civil commotion, aircraft, vehicle and smoke insurance;
public liability; elevator; workmen's compensation; boiler and machinery; rent;
use and occupancy; and health, accident and group life insurance of all
employees.
(v) All taxes, charges, imposts and burdens and
special assessments of every kind and nature imposed by any governmental
authority on and/or with respect to the Lot or Building which Landlord shall
become obligated to pay because of or in connection with the ownership, leasing
or operation of the Lot or the Building. Notwithstanding anything to the
contrary contained in the Lease, Landlord and Tenant agree that the following
items are specifically excluded from the definition of taxes:
o Landlord's personal and corporate income taxes
(whether local, state or federal).
o Franchise taxes, gift taxes, transfer taxes and
gross receipt taxes.
(vi) The cost of water and sewer and any and all
other utility services used in connection with the operation and maintenance of
the Building and the Lot, excluding, however, electricity which shall be billed
monthly to tenants pursuant to Section 10 hereof.
(vii) Costs incurred for operation, service,
maintenance, inspection, repairs and alterations of the Building, the Lot and
the heating, air-conditioning, ventilating, plumbing, electrical, security and
elevator systems of the Building (including any separate contract therefor) and
the costs of labor, materials, supplies and equipment used in connection with
all of the aforesaid items.
(viii) Gross receipts taxes, sales taxes and excise
taxes and the like upon any of the expenses enumerated herein.
(ix) Management fees of the managing agent for the
Building not to exceed in any one (1) year four percent (4%) of the Fixed Rent
and Operating Expense Estimate payable for such year.
(x) The cost of replacements for tools and equipment
used in the operation and maintenance of the Building and the Lot.
(xi) Cost of repainting or otherwise redecorating the
common areas of the Building.
(xii) Christmas decorations for the lobby and other
public portions of the Building below the second floor.
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(xiii) The cost of telephone service, postage, office
supplies, maintenance and repair of office equipment and similar costs related
to operation of the Building Superintendent's office.
(xiv) The cost of licenses, permits and similar fees
and charges related to operation, repair and maintenance of the Building.
(xv) Auditing fees necessarily incurred in connection
with the maintenance and operation of the Building, and accounting fees incurred
in connection with the preparation and certification of a real estate tax
escalation and the operating expense escalation statements pursuant to this
Section 6.
(xvi) All costs incurred by Landlord to retrofit any
portion or all of the Building to comply with a change in existing legislation
or introduction of new legislation, whether Federal, State or Municipal;
repairs, replacements and improvements which are appropriate for the continued
operation of the Building as a first class building.
(xvii) All expenses associated with the installation
of any energy, labor or cost saving devices for the Building not to exceed the
savings realized from the installation of the energy, labor or cost saving
device.
(xviii) The pro rata share of all costs and expenses
reasonably allocated to the Building and the Lot relating to the maintenance,
operation and repair of any common atrium or other facilities connecting the
Building or any of its facilities to any other building or facilities on
adjacent lots.
(xix) Any and all other expenditures of Landlord in
connection with the operation, repair or maintenance of the Lot or the Building
which are properly expensed in accordance with generally accepted accounting
principles consistently applied with respect to the operation, repair and
maintenance of first-class office buildings in the Philadelphia suburbs.
If Landlord shall purchase any item of capital equipment or
make any capital expenditure as described in subsections (xvi) and (xvii) above,
then the costs for the same shall be included in Operating Expenses in the year
of installation and in subsequent years amortized on a straight line basis, over
an appropriate period, but not more than ten (10) years, with an interest factor
equal to the prime interest rate, as defined in Section 5 hereof. If Landlord
shall lease such item of capital equipment, then the rentals or other operating
costs paid pursuant to such leasing shall be included in Operating Expenses for
each year in which they are incurred.
Tenant shall have the right to contest or review all such
Taxes by legal proceedings or in such other manner as it may deem suitable
(which, if instituted, Tenant shall conduct promptly at its own cost and
expense, and free of any expense to Landlord, and, if necessary, in the name of
and with the cooperation of Landlord, and Landlord shall execute all documents
necessary to accomplish the foregoing). Notwithstanding the foregoing, Tenant
shall promptly pay all such Taxes prior to penalties being assessed thereon
(unless Tenant posts adequate security with Landlord), or if Landlord shall be
subject to any criminal liability arising out of the nonpayment thereof. The
legal proceedings shall include appropriate proceedings and
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appeals from orders therein and appeals from any judgments, decrees or orders.
In the event of any reduction, cancellation or discharge, Tenant shall pay the
amount finally levied or assessed against the Leased Premises or adjudicated to
be due and payable on any such contested Taxes. Landlord covenants and agrees
that if there shall be any refund or rebate on account of the Taxes paid by
Tenant under the provisions of this Lease, such refund or rebate shall belong to
Tenant. Any refunds received by Landlord shall be deemed trust funds and as such
are to be received by Landlord in trust and paid to Tenant forthwith. Landlord
will, upon the request of Tenant, sign any receipts which may be necessary to
secure the payment of any such refund or rebate, and will pay over to Tenant
such refund or rebate as received by Landlord.
Notwithstanding the foregoing, "Operating Expense" shall not
include expenditures for any of the following:
(i) The cost of any capital addition made to the
Building (other than that specified as part of Operating Expense as provided
above), including the cost to prepare space for occupancy by a new tenant.
(ii) Repairs or other work occasioned by fire,
windstorm or other insured casualty or hazard, to the extent that Landlord shall
receive proceeds of such insurance.
(iii) Repairs or rebuilding necessitated by
condemnation.
(iv) Depreciation and amortization of the Building,
other than
(a.) capital expenditures which under
generally applied real estate practice are expensed or regarded as deferred
expenses;
(b.) capital expenditures appropriate to a
first class office building or required by law as described in subsection (xvi)
above; and
(c.) capital expenditures designed to result
in savings or reductions in Operating Expenses as described in subsection (xvii)
above.
(v) Marketing costs, leasing commissions, brokerage
fees, attorney's fees, costs and disbursements and other expenses incurred in
connection with negotiations or disputes with tenants, other occupants, or
prospective tenants.
(vi) The costs of tenant improvements performed for
tenants in the Building.
(vii) Costs incurred by Landlord due to a violation
by Landlord or any tenant of the terms and conditions of any lease.
(viii) Amounts paid to any party, including a
division or affiliate of Landlord, providing materials, services, labor, or
equipment to the extent that such costs exceed the competitive costs of such
materials, services, labor or equipment when provided by an independent party in
an arms-length transaction.
11
(ix) Payment of principal, interest, points and fees
on any mortgages, deeds of trust or other financing instruments relating to the
financing of the Property, or rental payments under any ground or underlying
lease.
(x) Any costs, fines or penalties imposed due to
Landlord's actions or omissions with respect to any governmental rule or
authority.
(xi) Wages, salaries, or other compensation or
benefits for any officers or employees of Landlord above the grade of Building
Manager.
(xii) Costs of installing, maintaining and operating
any specialty service, such as an athletic club.
(xiii) Any cost for which Landlord is entitled to
reimbursement from tenants, insurers, or any third party.
(xiv) The costs of any additions to the Property
after the original construction of the Building and its parking facility, except
for operating expenses attributable thereto (provided that Tenant's pro rata
share is equitably adjusted to reflect the addition).
(xv) Any costs attributable to any parking facility
(e.g., underground or decked parking) owned or operated by Landlord.
(xvi) The cost of any environmental clean-up of the
Land ordered by any applicable environmental authority or agency unless caused
by Tenant.
Operating Expense shall be "net" and, for that purpose, shall
be reduced by the amounts of any reimbursement or credit received or receivable
by Landlord with respect to an item of cost that is included in Operating
Expense (other than reimbursements to Landlord by tenants of the Building
pursuant to Operating Expense escalation provisions).
The Operating Expense for any Operating Year or portion
thereof during which less than one hundred percent (100%) of the Rentable Area
of the Building is leased to tenants shall be increased to include an imputed
cost for unoccupied portions of the Building in an amount with respect to each
such area equal to the product of (i) the Landlord's estimate of the marginal
Operating Expense saving resulting from such vacancy, times (ii) a fraction, the
numerator of which is the number of days during such Operating Year such portion
of the Building was unoccupied and the denominator of which is three hundred
sixty-five (365), times, (iii) the Rentable Area of such unoccupied space. In
the time that more than one such portion of Rentable Area shall be unoccupied on
separate dates within a relevant Operating Year, then a separate computation
shall be made with respect to each unoccupied portion, and the products of such
computations shall be added together, and the total thereof shall be the amount
of Operating Expense imputed to such unoccupied portions for such Operating
Year.
(e) "TENANT'S PROPORTIONATE SHARE" shall mean a fraction, the
numerator of which shall be the Rentable Area of Leased Premises, and the
denominator of which is 72,000 rentable square feet (subject to adjustment only
by reason of any substantial
12
addition to the Building made after the date of the initial completion of
construction of the Building), and shall equal, with respect to the Leased
Premises, the percentage set forth in Section 1 of this Lease.
7. NO LEASEHOLD IMPROVEMENTS BY LANDLORD.
(a) Tenant acknowledges that Landlord has not yet acquired the
Property and is not familiar with its condition, and that the only
representations as to the condition of the Property which are in the current
drafts of the Sale Agreement (defined in subsection 7(b) below) are those set
forth on Exhibit "E" hereto. Tenant further acknowledges the intent of both
parties that the term of this Lease shall commence immediately following
surrender of the Property by the current owner [subject to Tenant's option to
defer occupancy until February 1, 1999 if for any reason the current owner
surrenders the Property before that date], and agrees that Landlord shall have
no obligation to make any leasehold improvements prior to commencement of the
Term. Tenant agrees to accept the Leased Premises on the Commencement Date in
their condition at that time, provided they are in substantially the same
condition as at the time of this Lease, subject to ordinary wear and tear and
further subject in any case to the provisions of Paragraphs 20 and 21 regarding
condemnation and damage by fire or other casualty, and subject to Landlord's
obligations under this Lease with respect to operation and maintenance of the
Building during the Term.
(b) As part of its due diligence investigations of the
Property prior to acquisition of the Property, Landlord may obtain written
reports regarding title to and physical condition of the Property, including
without limitation engineering and environmental reports (collectively,
"Landlord's Reports"). As an accommodation to Tenant, Landlord agrees to furnish
to Tenant copies of Landlord's Reports received prior to the Commencement Date,
provided, however, that (i) this does not constitute an agreement by Landlord to
obtain any reports other than those Landlord receives from the seller or chooses
to obtain itself as part of its own due diligence investigations of the
Property, and (ii) the delivery of copies of Landlord's Reports shall not be
deemed to constitute the making of any representations or warranties to Tenant
by Landlord or any of its agents or representatives (including without
limitation the person or entity generating a Report). Upon written notice to
Landlord, Tenant shall also be entitled to have its representatives inspect the
Property during the twenty-day period beginning when Landlord notifies Tenant
that an agreement for the sale and purchase of the Property has been signed with
Osiris Holding Corporation (the "Sale Agreement"), such inspections to be done
at Tenant's cost and expense, subject to the same conditions as are imposed upon
Landlord under the Sale Agreement (which conditions shall be copied to Tenant
upon notice from Tenant that it desires to undertake inspections). If any
material adverse condition is disclosed in any of Landlord's Reports or in any
written report generated pursuant to any of Tenant's inspections ("Tenant's
Reports") (and for purposes of this paragraph a material adverse condition is
defined as a condition which would lead a reasonably prudent mortgage lender to
decline to finance the Property), then Tenant, by written notice to Landlord
given no later than December 7, 1998 specifying the material adverse condition
with detailed reference to the relevant Report (and a copy of the applicable
Report if it is one of Tenant's Reports), may terminate this Lease by reason of
such material adverse condition. If Tenant issues a termination notice pursuant
to the preceding sentence, Landlord may nullify Tenant's termination notice by
giving Tenant written
13
notice within ten days that Landlord will cause the cure of the material adverse
condition prior to February 1, 1998.
8. ALTERATIONS OR IMPROVEMENTS BY TENANT. Tenant shall not make during
the Lease Term any alterations or additions to the Leased Premises which
materially affect the Building's structure or mechanical, electrical, plumbing
or HVAC systems without Landlord's prior written approval, such approval not to
be unreasonably withheld or delayed. Any such alterations or additions which may
be approved by Landlord and made by Tenant shall be deemed part of the Building
(provided that Tenant shall at all times have the right to remove any equipment,
fixtures or other improvements installed by Tenant) and shall not thereafter be
removed by Tenant unless Landlord shall require removal of same either in
conjunction with its approval or by notice to Tenant given prior to the
termination of this Lease, in which case Tenant shall remove any such
alterations or additions and repair any damage to the Building or the Leased
Premises occasioned by their installation or removal (including, without
limitation, repairing and patching holes, replacing ceiling, wall and floor
surfaces and repainting), and restore the Leased Premises to substantially the
same condition as existed prior to the time which any such alterations or
additions were made, reasonable wear and tear excepted; provided, however, that
if in connection with alterations or improvements for which Landlord's consent
is required hereunder, Tenant shall at the time Landlord's consent is requested,
express its desire that same shall remain on the Premises upon the expiration of
the Term and Landlord agrees thereto in writing, then removal of such
alterations and improvements shall not be required.
All alterations and additions by Tenant and installation of
furnishings following occupancy shall be coordinated with any work being
performed by Landlord and performed in such manner as not to disrupt harmonious
labor relations and so as to not damage the Building or interfere with its
operation or with the activities of other tenants and, except for installation
of furnishings only, by contractors or workmen first approved by Landlord, which
approval will not be unreasonably withheld or delayed..
As further conditions to Landlord's approval of any proposed
alterations or additions by Tenant which are to be made after the beginning of
the Lease Term, Tenant shall: secure all necessary licenses and permits; deliver
to Landlord a waiver, executed by all general contractors who will be furnishing
labor or materials waiving the right to file any mechanic's lien against the
Building, the Lot or the estate or interest of Landlord or Tenant therein; cause
the contractor(s) and subcontractor(s) to carry Workmen's Compensation insurance
in statutory amounts and also comprehensive public liability insurance with
limits as approved by Landlord, and deliver to Landlord certificates of all such
insurance.
9. PERMITTED USES. Tenant covenants and agrees to use and occupy the
Leased Premises only in conformity with law and for the uses specified in
Section 1 hereof and not to use or permit any use of the Leased Premises which
creates any safety hazard, which would be dangerous to the Leased Premises, the
Building or the occupants of the same, which would be disturbing to other
tenants or occupants of the Building, or which would cause any increase in
premium for any insurance which Landlord may then have in effect with respect to
the Building generally.
10. BUILDING OPERATION AND SERVICES; ELECTRICITY. Landlord shall
furnish, through Landlord's employees or independent contractors, such services,
facilities and supplies equal in
14
scope, quality and frequency to those being customarily provided by landlords in
high quality office buildings in the Philadelphia suburbs.
Heating, ventilating, and air conditioning shall be provided
as normal seasonal changes may require to provide reasonably comfortable space
temperature and ventilation for occupants of the Building during normal business
operation, daily from 8:00 a.m. to 6:00 p.m. (Saturdays to 1:00 p.m.), except
Sundays and holidays. Heating, ventilating and air conditioning service shall be
subject to such regulations as the Department of Energy or other governmental
agency shall adopt from time to time.
Maintenance and cleaning shall be provided Monday through
Friday (excluding holidays), after business hours, as follows: janitor service,
consisting of the removal of customary office trash, dusting of furniture, desks
and pictures, and vacuuming; maintenance and service of the toilet rooms in the
Building; and cleaning and maintenance of common areas in the Building, all as
more particularly set forth in the specifications attached hereto as Exhibit
"C".
Fully automatic elevator service shall be provided for the use
of all tenants and the general public for access to and from all floors of the
Building.
Elevator service for freight shall be supplied by a
passenger/freight elevator in common with service to other tenants at reasonable
times during business hours and at other times.
Hot and cold water for normal lavatory and drinking purposes
shall be provided.
Electricity, water, telephone, and other utilities serving the
Building shall be arranged and paid for by Tenant as a direct customer of the
applicable utility. If for any reason any required utility cannot be arranged
directly by Tenant, then Landlord shall contract for the applicable utility
service and Tenant shall pay the cost thereof within 15 days after invoicing
from Landlord. Any utility invoices issued by Landlord to Tenant shall be based
upon actual cost to Landlord and, if they cover any period or any space occupied
by another tenant, shall be appropriately apportioned between the space users
for the relevant periods.
Landlord shall not be liable in any way to Tenant for any
failure or defect in the supply or character of electric energy furnished on the
Leased Premises by reason of any requirement, act or omission of the public
utility serving the Building with electricity. Tenant's use of electric energy
in the Leased Premises shall not at any time exceed the capacity of any of the
electric conductors and equipment in or otherwise serving the Leased Premises.
In order to insure that such capacity is not exceeded and to avert possible
adverse effect upon the Building's electric service, Tenant shall not, without
Landlord's prior written consent in each instance, which consent shall not be
unreasonably withheld or delayed, connect to the Building's electric
distribution system any fixtures, appliances or equipment other than
minicomputers, terminals, duplicating machines, lamps, typewriters and similar
small office machines which operate on a voltage not in excess of 110 volts or
make any alterations or additions to the electric system of the Leased Premises.
Should Landlord grant such consent, all additional risers or other
15
equipment required therefor shall be provided by Landlord and the reasonable
cost thereof shall be paid by Tenant upon Landlord's demand.
Landlord shall furnish and install at Tenant's expense all
replacement lighting tubes, lamps, bulbs, and ballasts required in the Leased
Premises.
11. INTERRUPTION OF SERVICES. In case Landlord is prevented or delayed
in furnishing any service as set forth in Section 10 herein or otherwise by
reason of any cause beyond Landlord's reasonable control, Landlord shall not be
liable to Tenant therefor nor shall Tenant be entitled to any abatement or
reduction in rent by reason thereof unless the delay is directly caused by
Landlord's negligence, willful actions or omissions and Tenant is materially
impaired in its use of the Leased Premises for more than three (3) consecutive
business days, nor shall the same give rise to a claim in Tenant's favor that
such absence of building services constitutes actual or constructive, total or
partial eviction or renders the Leased Premises untenantable.
Landlord reserves the right to stop any service or utility
system, when necessary by reason of accident or emergency, or until necessary
repairs have been completed, provided, however, that in each instance of
stoppage, Landlord shall exercise reasonable diligence to eliminate the cause
thereof. Except in case of emergency repairs, Landlord will give Tenant
reasonable advance notice of any contemplated stoppage and will use reasonable
efforts to avoid unnecessary inconvenience to Tenant by reason thereof.
12. REPAIRS. Landlord shall make, as an Operating Expense of the
Building, all repairs necessary to maintain the plumbing, heating, ventilating,
air conditioning, electric systems, external windows and floors (excluding
carpeting and floor coverings), provided, however, that Landlord shall not be
obligated to make any such repairs until the expiration of a reasonable period
of time after receipt of written notice from Tenant that such repair is needed.
Landlord shall make, at its own expense (except for repairs which are expensed
in accordance with GAAP, the cost of which shall be an Operating Expense), all
repairs necessary to maintain the structure of the Building, the roof, all
exterior walls and the building floor slabs. Landlord will repair any damage
caused by any act, omission or negligence of Tenant or its employees, agents,
invitees, licensees, subtenants, or contractors, and Tenant will reimburse
Landlord for the cost of such repair within thirty (30) days after receipt of an
invoice. If Tenant requires maintenance, servicing, repair or replacement of any
special plumbing, heating or air conditioning systems installed specifically for
Tenant's benefit in the Leased Premises, whether or not such systems are tied
into the standard Building systems, such maintenance, servicing, repair or
replacement shall be made at the sole expense of Tenant, unless the need for
such repairs is caused, in whole or in part, by the negligence or willful
misconduct of Landlord, its agents or employees.
Tenant shall maintain the Leased Premises and the fixtures and
appurtenances therein in good repair at all times, reasonable wear and tear
excepted. Except to the extent released by Landlord pursuant to the waiver of
subrogation provision in Section 22 hereof, Tenant shall reimburse Landlord for
all costs and expenses of repairing and replacing all damage or injury to the
Leased Premises and the Building and to fixtures and equipment caused by Tenant
or its employees, agents, invitees, licensees, subtenants, or contractors, or as
the result of all or any of them moving in or out of the Building or by its or
their installation or removal of
16
furniture, fixtures or other property. Such costs and expenses shall be
collectible as Additional Rent and paid by Tenant within fifteen (15) days after
rendition of a xxxx therefor.
Landlord shall not be liable by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations, additions or improvements in or to the Leased Premises or the
Building or to any appurtenances or equipment therein unless Landlord or its
agents, employees or contractors are negligent in performing such repairs, etc.
There shall be no abatement of rent because of such repairs, alterations,
additions or improvements or because of any delay by Landlord in making the same
except that Landlord shall reimburse Tenant for any actual damages (but not
consequential damages) in the event Landlord is negligent in performing such
repairs, etc..
Tenant shall give to Landlord prompt written notice of any
accidents to, or defects in plumbing, electrical, heating and air conditioning
systems and apparatus located in the Leased Premises. Landlord shall give Tenant
written notice of any repairs, alterations, additions or improvements which
Landlord intends to undertake either in the Leased Premises or the Building.
13. INTENTIONALLY OMITTED.
14. QUIET ENJOYMENT. Tenant, upon paying the Annual Fixed Rent, all
Additional Rent and all other sums and charges herein provided for and, upon
observing, keeping and performing all covenants, agreements and conditions of
this Lease on Tenant's part to be observed, kept and performed, shall quietly
have and enjoy the Leased Premises throughout the Lease Term without hindrance
or molestation by Landlord or by anyone claiming by, through or under Landlord,
subject, however, to the exceptions, reservations and conditions of this Lease.
15. LANDLORD'S RIGHT OF ENTRY. Landlord, any ground lessor, mortgagee
or any agent thereof, shall have the right to enter the Leased Premises at
reasonable times: to perform Landlord's covenants as set forth in this Lease,
for purposes of inspection and to insure Tenant's compliance with the provisions
of this Lease, to make any repairs, replacements or alterations to the Building
or do any work which Landlord may deem necessary, or to show the Leased Premises
to prospective purchasers of the Building, and also, during the last six (6)
months of the Lease Term, to show the Leased Premises to prospective tenants;
PROVIDED, HOWEVER, that except for emergencies, Landlord shall (a) give Tenant
at least 24 hours' prior notice of such entry, and (b) enter upon the Leased
Premises only during normal business hours. With the exception of emergency
repairs by Landlord, its agents, employees and contractors, no persons shall
enter the Leased Premises unless accompanied by a representative of Tenant.
Landlord also shall have the right to enter the Leased Premises at any
reasonable times after giving prior notice to Tenant to exhibit the Leased
Premises to any prospective purchaser, tenant and/or mortgagee thereof provided
that a representative of Tenant shall accompany any prospective purchaser,
tenant and/or mortgagee inspecting the Leased Premises and further provided that
Tenant may restrict access to certain portions of the Leased Premises in order
to safeguard the confidentiality of proprietary equipment.
In the event Tenant abandons the Leased Premises prior to the
expiration of the Lease Term, Landlord shall have the right to enter the Leased
Premises at any time thereafter to show
17
the Leased Premises to prospective tenants and to retrofit all or a portion
thereof for new tenants. No such entry and construction work shall be deemed to
be an acceptance of surrender by landlord of all or a portion of the Leased
Premises until a replacement tenant actually occupies the same for its business
purposes. Acceptance of surrender shall be deemed to occur upon the occupancy by
a replacement tenant, but only as to such portion of the Leased Premises which
such replacement tenant occupies. Notwithstanding any such acceptance of
surrender, Tenant shall remain liable for the difference between the rent
reserved hereunder and the rent Landlord receives under a lease with the
replacement tenant.
16. SURRENDER OF LEASED PREMISES. Any alterations, improvements or
additions to the Leased Premises made by or at the request of Tenant shall
remain upon the Leased Premises at the expiration or earlier termination of this
Lease and shall become the property of Landlord unless Landlord shall, in
accordance with Article 8, give written notice to Tenant to remove such
alterations, improvements and additions. Tenant shall repair any damage caused
by the installation and/or removal (including, without limitation, repairing and
patching holes, replacing ceiling, floor and wall surfaces and repainting), and
restore the Leased Premises to substantially the same condition in which it
existed prior to the time that any such alterations, improvements or additions
were made, reasonable wear and tear excepted. Tenant shall have the right to
remove any of its fixtures, equipment or furnishings from the Leased Premises
provided that Tenant shall repair any damage to the Leased Premises or the
Building resulting from such removal. Should Tenant fail to remove any such
alterations, improvements or additions or to repair such damage when required or
requested by Landlord so to do pursuant to this Section 16, Landlord may do so,
and the cost and expense thereof shall be paid by Tenant to Landlord as
Additional Rent.
Any personal property which shall remain in the Leased
Premises or any part thereof after the expiration or earlier termination of this
Lease shall be deemed to have been abandoned and either may be retained by
Landlord as Landlord's property or may be disposed of in such manner as Landlord
may see fit, provided that notwithstanding the foregoing Tenant shall, upon
request of Landlord made no later then ten (10) days after the expiration or
earlier termination of this Lease, promptly remove from the Building any such
personal property at Tenant's own cost and expense. Should Tenant fail so to do,
Landlord may do so, and the cost and expense thereof shall be paid by Tenant to
Landlord as Additional Rent. If such personal property or any part thereof shall
be sold by Landlord, Landlord may receive and retain the proceeds of such
sale(s) as Landlord's property. The covenants contained in this Section 16 shall
survive the expiration or earlier termination of this Lease.
17. MISCELLANEOUS COVENANTS. In addition to those covenants and
conditions which are set forth elsewhere herein, Tenant agrees:
(a) To secure and maintain in effect any governmental
approvals, licenses and permits as may be required for Tenant's use and
occupancy of the Leased Premises.
(b) To comply with all applicable laws, codes and regulations
of governmental authorities applicable to Tenant's use and occupancy of the
Leased Premises and all rules and regulations of insurers of the Leased Premises
and the National Board of Fire Underwriters as they apply to Tenant's use and
occupancy of the Leased Premises.
18
Notwithstanding anything to the contrary in this paragraph (b), if any such
laws, ordinances, regulations or orders shall require structural alterations to
be made in or to the Leased Premises (such as the installation of sprinklers),
and provided that such alterations are required generally in all office
buildings in Bensalem Township and are not required as a result of the specific
nature of Tenant's design, layout, configuration or use of the Leased Premises
or caused by Tenant or any of its employees, agents, contractors or subtenant's,
then it shall be Landlord's responsibility to make such structural alterations,
the cost of which shall be included in Operating Expenses after being amortized
over the useful life of such alterations, but in no event over a period of less
than ten (10) years.
(c) If the Leased Premises include less than an entire floor
of the Building, to not place, erect, maintain or display any sign or other
marking of any kind whatsoever on the exterior surface of the walls of the
Leased Premises or on any door which faces any common corridor or hallway,
without the prior written approval of Landlord, which approval shall not be
unreasonably withheld for a single sign, provided that the same conforms to the
sign standards as are then established by Landlord generally for the Building,
and to not install or replace any entrance door or other door facing on any
common corridor or hallway other than the standard door supplied by Landlord,
without the prior written approval of Landlord.
(d) Not to use or place any curtains, blinds, drapes,
coverings or signs over any exterior windows or upon the window surfaces as
would be visible from the outside of the Building without the prior written
approval of Landlord.
(e) Without the prior written consent of Landlord, not to
place within the Leased Premises or bring into the Building any machinery,
equipment or other personality other than customary office furnishings and small
machinery such as typewriters and other similar items of office equipment, and
customary kitchen equipment to be used exclusively by Tenant's employees, or any
machinery or other personality having a weight on the average in excess of the
floor bearing capacity of one hundred (100) pounds per square foot. Landlord in
its sole discretion, may condition any consent given pursuant to this
sub-section 17(e) upon the requirement that Tenant pay all costs of all
structural and other alterations, changes or additions reasonably required to be
made to the Leased Premises and the Building, in the sole judgment of Landlord,
for the safe support of such machinery, equipment or personality, together with
all costs of engineering or other studies required in the sole judgment of
Landlord, to determine the required structural and other alterations, changes or
additions.
18. RULES AND REGULATIONS. Tenant covenants and agrees that Tenant, its
servants, employees, agents, invitees, licensees and other visitors shall
observe faithfully, and comply strictly with, the Rules and Regulations
contained in Exhibit "A", attached hereto and made a part hereof, and such other
and further reasonable Rules and Regulations as Landlord or Landlord's agents
may, after written notice to Tenant, from time to time adopt. Nothing in this
Lease contained shall be construed to impose upon Landlord any duty or
obligation to enforce the Rules and Regulations or terms, covenants or
conditions in any other lease as against any other tenant, and Landlord shall
not be liable to Tenant for violation of the same by any other tenant, its
servants, employees, agents, invitees, licensees or other visitors. Landlord
agrees that the Rules and Regulations shall not be enforced so as to
discriminate against Tenant or unreasonably interfere with Tenant's use of the
Leased Premises and that the Rules and Regulations shall be
19
enforced uniformly against all tenants in the Building; PROVIDED, HOWEVER, that
Landlord shall not be liable to Tenant for Landlord's failure to enforce the
Rules and Regulations against any other tenants. Tenant shall not be obligated
to comply with any Rules and Regulations or amendments thereto until Tenant has
received a written copy of such Rules and Regulations.
19. PERFORMANCE OF COVENANTS.
(a) If Tenant fails to perform any covenant or observe any
condition to be performed or observed by Tenant hereunder or acts in violation
of any covenant or condition hereof, Landlord may, but shall not be required to
on behalf of Tenant, perform such covenant and/or take such steps, including
entering upon the Leased Premises, as may be necessary or appropriate to meet
the requirements of any such covenant or condition, provided that Landlord shall
have given Tenant at least five (5) business days prior written notice of
Landlord's intention to do so, unless an emergency situation exists, in which
case Landlord shall have the right to proceed immediately after telephonic
notice to Tenant; and all costs and expenses incurred by Landlord in so doing,
including reasonable legal fees, shall be paid by Tenant to Landlord upon
demand, plus interest at the Overdue Interest Rate from the date of
expenditure(s) by Landlord, as Additional Rent. Landlord's proceeding under the
rights reserved to Landlord under this Section shall not in any way prejudice or
waive any rights as Landlord might otherwise have against Tenant by reason of
Tenant's default.
(b) In the event of the failure by Landlord, after thirty (30)
days' prior written notice thereof, to perform any of the provisions, covenants,
agreements or conditions of this Lease on its part to be performed the
non-performance of which affect Tenant's use and occupancy of the Leased
Premises, Tenant may, in addition to any remedies available to it at law or in
equity, perform the same for and on behalf of Landlord, the cost of which
performance, upon the proper payment thereof, shall be paid to Tenant by
Landlord upon demand plus interest at the Overdue Interest Rate from the date of
demand, provided, however that nothing herein shall require Landlord to
reimburse Tenant for any cost which is payable by Tenant as an Operating Expense
pursuant to Section 6 of this Lease.
20. EMINENT DOMAIN. In the event of the exercise of the power of
eminent domain (a) whereby such portion of the Building is taken such that
access to the Leased Premises is permanently impaired thereby and reasonable
alternate access is not provided by Landlord within a time period which is
reasonable under the circumstances, (b) all or substantially all of the Leased
Premises or the Building is taken, (c) if less than substantially all of the
Building is taken but Landlord, acting in good faith, determines that it is
economically unfeasible to continue to operate the uncondemned portion as a
first-class office building, or (d) if less than substantially all of the Leased
Premises is taken, but Tenant, acting in good faith, determines that because of
such taking it is economically unfeasible to continue to conduct its business in
the uncondemned portion of the Leased Premises, then in the case of (a) or (b),
either party, and in the case of (c), Landlord, and in the case of (d), Tenant,
shall have the right to terminate this Lease as of the date when possession of
that part which was taken is required to be delivered or surrendered to the
condemning authority; and in such case all rent and other charges shall be
adjusted to the date of termination. Notwithstanding that the entire Leased
Premises are not condemned or taken for any public or quasi-public use or
purpose, Tenant shall have the right to terminate this Lease in the event that
(i) vehicular access to the parking lot servicing the Leased Premises is taken,
or (ii)
20
more than ten percent of the existing parking spaces servicing the Leased
Premises are taken (unless Landlord replaces the lost parking spaces with new
parking spaces within reasonable proximity to the Leased Premises). The
foregoing right of termination shall be applicable to the taking of any estate
or interest whatsoever which, as a matter of law, would deprive Landlord or
Tenant of any right to possession (in common with others, as to common areas of
the Building) for any period in excess of sixty (60) consecutive days from the
date of taking, whether or not the taking be in fee, for a term of years or of
any other estate or interest; and a taking shall include the transfer of title
or of any interest in the Building by deed or other instrument in settlement of
or in lieu of transfer by operation of law incident to condemnation proceedings.
Tenant shall have no right to participate or share in any
condemnation claim, damage award or settlement in lieu thereof with respect to
any taking of any nature; provided, however, that Tenant shall not be precluded
from claiming or receiving payment for Tenant's relocation and moving expenses
and the unamortized cost of any improvements installed by Tenant as may be
specifically permitted under applicable law to tenants generally so long as the
amount of the same is not subtracted from the award which Landlord is entitled
to receive.
21. CASUALTY DAMAGE. In the event of damage to or destruction of the
Leased Premises caused by fire or other casualty, or of the entrances and other
common facilities necessary to provide normal access to the Leased Premises, or
to other portions of the Building or its equipment which portions and equipment
are necessary to provide services to the Leased Premises in accordance herewith,
Landlord shall undertake to make and complete repairs and restorations as
hereafter provided, unless this Lease be terminated by Landlord or Tenant or
unless any mortgagee which is entitled to receive casualty insurance proceeds
fails to make available to Landlord a sufficient amount of such proceeds to
cover the cost of such repairs and restoration.
If (a) the damage is of such nature or extent, in Landlord's
sole judgment, that more than one hundred and eighty (180) consecutive days,
after commencement of the work, would be required (with normal work crews and
hours) to repair and restore the part of the Leased Premises or the Building
which has been damaged, or (b) a substantial portion of the Leased Premises or
the Building is so damaged that, in Landlord's sole judgment, it is uneconomic
to restore or repair the Leased Premises or the Building, as the case may be, or
(c) less than two (2) years remain on the Lease Term (unless there are renewal
right(s) available to Tenant, and Tenant elects to exercise such available
renewal right), Landlord shall so advise Tenant promptly, and either party, in
the case described in clause (a) above, or Landlord, in the case described in
clauses (b) or (c) above, for a period of ten (10) days thereafter, shall have
the right to terminate this Lease by written notice to the other, as of the date
specified in such notice, which termination date shall be no later than thirty
(30) days after the date of such notice.
In the event of such fire or other casualty, if this Lease is
not terminated pursuant to the terms of this Section 21, if sufficient casualty
insurance proceeds are available for use for such restoration or repair, and if
this Lease is then in full force and effect, Landlord shall proceed diligently
to restore the Leased Premises (including the Improvements) to substantially its
condition prior to the occurrence of the damage, provided that Landlord shall
not be obligated to repair or restore any alterations, additions or fixtures
which Tenant may have installed (whether or not Tenant has the right or the
obligation to remove the same or is required to leave the same
21
on the Leased Premises as of the expiration or earlier termination of this
Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in
full of all cost as may be incurred by Landlord in connection therewith.
Landlord is not required hereunder to insure any improvements or alterations
made by Tenant, to the Leased Premises, or any fixtures, equipment or other
property of Tenant. Tenant shall have the right, at its sole expense, to insure
the value of its leasehold improvements, fixtures, equipment or other property
located in the Leased Premises, for the purpose of providing funds to Landlord
to repair and restore the Leased Premises to substantially its condition prior
to the occurrence of the damage. If there be any such alteration, fixtures or
additions and Tenant does not assure or agree to assure payment of the cost of
restoration or repair as aforesaid, Landlord shall have the right to determine
the manner in which the Leased Premises shall be restored so as to be
substantially as the Leased Premises existed prior to the damage occurring, as
if such alterations, additions or fixtures had not then been made or installed.
The validity and effect of this Lease shall not be impaired in any way by the
failure of Landlord to complete repairs and restoration of the Leased Premises
or of the Building within one hundred eighty (180) consecutive days after
commencement of work, even if Landlord had in good faith notified Tenant that
the repair and restoration could be completed within such period, provided that
Landlord proceeds diligently with such repair and restoration, further provided
that in the event Landlord fails to complete the repairs and restoration within
two hundred ten (210) consecutive days after commencement of work for any reason
other than a delay caused by Tenant, Tenant shall have the right to terminate
this Lease upon thirty (30) days prior written notice to Landlord, in which
event this Lease shall terminate automatically at the end of such 30-day period
unless Landlord has completed the repairs and restorations prior to the end of
the 30-day period.
In the case of damage to the Leased Premises which is of a
nature or extent that Tenant's continued occupancy is substantially impaired as
reasonably determined by Tenant, the Annual Fixed Rent otherwise payable by
Tenant hereunder shall be equitably abated or adjusted for the duration of such
impairment. Anything to the contrary in this Lease notwithstanding, expressed or
implied, Landlord shall have no liability to Tenant for and shall have no duty
to repair, replace or restore any damage whatsoever, occurring as a result of
leakage or seepage of water or any other liquid from any source whatsoever, or
breakage of any pipes, mains or other plumbing located in or about the Building,
or snow, frost, steam, excessive heat or cold, falling plaster, sewage, gas,
odors, noise, or by air conditioning or heating apparatus. Provided, however,
Landlord shall repair, replace and restore as an Operating Expense (unless
Landlord receives insurance proceeds for the cost of such repair) of the
Building, all damage to the Building structure, systems and fixtures. Tenant
shall be responsible to insure and/or repair all of Tenant's leasehold
improvements and all equipment, fixtures and personal property located in the
Leased Premises.
22. HOLD HARMLESS; PUBLIC LIABILITY INSURANCE; WAIVER OF
SUBROGATION.
(a) Tenant covenants and agrees to exonerate, indemnify,
defend, protect and save Landlord, owner of the Lot and Landlord's managing
agent, if any, harmless from and against any and all claims, demands, expenses,
losses, suits and damages as may be occasioned by reason of (a) any accident or
matter occurring on the Leased Premises, causing injury to persons or damage to
property (including, without limitation, the Leased Premises), unless such
accident or other matter resulted from the negligence or otherwise tortious act
of Landlord or
22
Landlord's agents or employees, or (b) the negligence or otherwise tortious act
of Tenant or anyone in or about the Building on behalf or at the invitation or
right of Tenant.
(b) Tenant shall keep in force at its own expense
comprehensive general liability insurance (including a contractual liability
insurance endorsement) in companies acceptable to Landlord sufficient to cover
such indemnification and naming as additional insured Landlord, owner of the
Lot, Landlord's managing agent, if any, and Tenant against claims for personal
injury, including bodily injury, death or property damage in amounts not less
than $1,000,000 (or such higher limits as may be determined by Landlord), and
Tenant will further deposit the policy or policies of such insurance, or
certificates thereof, with Landlord. Said policy or policies of insurance or
certificates thereof shall have attached thereto an endorsement that such policy
shall not be canceled without at least ten (10) days prior written notice to
Landlord and Landlord's managing agent, if any, and that no act or omission of
Tenant shall invalidate the interest of Landlord under said insurance.
(c) Landlord covenants and agrees to exonerate, indemnify,
defend, protect and save Tenant harmless from and against any and all claims,
demands, expenses, losses, suits and damages as may be occasioned by reason of
(a) any accident or matter occurring on the Lot outside of the Leased Premises,
causing injury to persons or damage to property (including, without limitation,
the Leased Premises), unless such accident or other matter resulted from the
negligence or otherwise tortious act of Tenant or Tenant's agents or employees,
or (b) the negligence or otherwise tortious act of Landlord or anyone in or
about the Building on behalf or at the invitation or right of Landlord.
(d) Landlord shall keep in force as an Operating Expense 100%
replacement value "all-risk" property insurance and comprehensive general
liability insurance (including a contractual liability insurance endorsement)
sufficient to cover such indemnification against claims for personal injury,
including bodily injury, death or property damage in amounts not less than
$2,000,000.
(e) Landlord and Tenant hereby release 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 property
covered by any insurance then in force, even if such fire or other casualty
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 to the extent of and with
respect to any loss or damage occurring during such time as the policy or
policies of insurance covering said loss shall contain a clause or endorsement
to the effect that this release shall not adversely affect or impair said
insurance or prejudice the right of the insured to recover thereunder.
23. MORTGAGEE AND OTHER AGREEMENTS. In the event any person, firm,
corporation or other entity who is a party to any instrument to which this Lease
is subject or subordinate (including, without limitation, any mortgage now or
hereafter placed upon the Building or Lot or on any interest created therein) or
their successor(s), succeeds thereunder to the interest of Landlord hereunder in
the Building or the Lot, or acquires the right to possession of the Building or
the Lot, such person, firm, corporation or other entity shall not be (a) liable
for any act or omission of the party named above as Landlord under this Lease;
(b) liable for the performance of
23
Landlord's covenants hereunder which arise and accrue prior to such person,
firm, corporation or other entity succeeding to the interest of Landlord
hereunder or acquiring such right to possession; (c) subject to any offsets or
defenses which Tenant may have at any time against Landlord; (d) bound by any
rent which Tenant may have paid previously for more than one (1) month in
advance; and (e) shall not be bound by any amendment or modification hereof
relating to the reduction of rent, shortening of term, or effecting a
cancellation or surrender hereof and made without the consent of such person,
firm, corporation or other entity.
The parties hereto agree, from time to time as may be
requested, to execute, acknowledge and deliver an estoppel letter certifying to
such party as may be designated in the request, including any mortgagee, that
this Lease is in full force and effect and has not been amended, modified or
superseded, that Landlord has satisfactorily completed all construction work
required by this Lease, that Tenant has accepted the Leased Premises and is now
in possession thereof, that Tenant has no defense, offsets or counterclaims
hereunder or otherwise against Landlord with respect to this Lease or the Leased
Premises and neither Landlord nor Tenant is in default hereunder (or if any of
the foregoing not be the case, specifying in reasonable detail the extent and
nature thereof), that Tenant has no knowledge of any pledge or assignment of
this Lease or rentals hereunder, that rent is accruing under this Lease but has
not been paid more than one (1) month in advance and the date to which rent has
been paid; and any other instrument as may be reasonably requested to be
executed by Tenant by any mortgagee of the Lot or the Building or any interest
therein, so long as the rights of Tenant as provided for by this Lease are not
materially affected by any such other instrument. Tenant's estoppel letter shall
be in the form of Exhibit "B" attached hereto and made a part hereof, or in such
other form as Landlord or its mortgagee shall hereafter proscribe.
24. SUBORDINATION AND ATTORNMENT. This Lease and the estate, interest
and rights hereby created are subordinate to any mortgage now or hereafter
placed upon the Lot, the Building or any estate or interest therein, including,
without limitation, any mortgage on any leasehold estate, and to all renewals,
modifications, consolidations, replacements and extensions of the same as well
as any substitutions therefor. Tenant agrees that in the event any person, firm,
corporation or other entity acquires the right to possession of the Lot and the
Building including any mortgagee or holder of any estate or interest having
priority over this Lease, Tenant shall, if requested by such person, firm,
corporation or other entity, attorn to and become the tenant of such person,
firm, corporation or other entity, upon the same terms and conditions as are set
forth herein for the balance of the Lease Term. Notwithstanding the foregoing,
any mortgagee may, at any time, subordinate its mortgage to this Lease, without
Tenant's consent, by notice in writing to Tenant, and thereupon this Lease shall
be deemed prior to such mortgage without regard to their respective dates of
execution and delivery, and in that event, such mortgagee shall have the same
rights with respect to this Lease as though it had been executed prior to the
execution and delivery of the mortgage.
Landlord shall, as an express condition to Tenant's agreement
to subordinate this Lease to any mortgage or other encumbrance now or hereafter
placed upon the Building, obtain a non-disturbance agreement from the holder of
such mortgage or other encumbrance now or hereafter placed upon the Building
providing that (i) the holder of such mortgage or other encumbrance shall not
disturb Tenant's possession under this Lease in the event of foreclosure,
transfer in lieu thereof, and other enforcement proceedings, provided that
tenant shall not be in
24
default hereunder, (ii) the holder of such mortgage or other encumbrance agrees
that a foreclosure will not terminate or void any option to renew or purchase,
and (iii) provided Tenant leases more than 50% of the Building's rentable area
the holder of such Mortgage or other encumbrance shall permit insurance proceeds
and condemnation award to be used to restore the Leased Premises and Building.
25. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, pledge,
mortgage or otherwise transfer or encumber this Lease, nor sublet all or any
part of the Leased Premises or permit the same to be occupied or used by anyone
other than Tenant or its employees without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed. It will not be
unreasonable for Landlord to withhold its consent if the reputation, financial
responsibility, or business of a proposed assignee or subtenant is
unsatisfactory to Landlord in the exercise of its reasonable business judgment.
Anything contained herein to the contrary notwithstanding, Tenant may assign
this Lease or sublet the Leased Premises or any portion thereof, without
Landlord's consent, to any corporation which controls, is controlled by or is
under common control with Tenant, or to any corporation resulting from a merger
or consolidation with Tenant, or to any person or entity which acquires all the
assets of Tenant's business as a going concern, provided that (i) the assignee
or sublessee assumes, in full, the obligations of Tenant under this Lease, (ii)
Tenant remains fully liable under this Lease, (iii) the use of the Leased
Premises remains unchanged, and (iv) provided that the surviving corporation or
acquirer has a "net worth" (excluding intangible assets) in excess of that of
Tenant at the time of the merger, consolidation or acquisition.
Tenant's request for consent shall be in writing and contain
the name, address, and description of the business of the proposed assignee or
subtenant, its most recent financial statement and the other evidence of
financial responsibility, its intended use of the Leased Premises, and the terms
and conditions of the proposed assignment or subletting.
Within fifteen (15) days from receipt of such request,
Landlord shall either: (a) grant or refuse consent; or (b) elect to require
Tenant (i) to execute an assignment of lease or sublease of Tenant's interest
hereunder to Landlord or its designee upon the same terms and conditions as are
contained herein, together with an assignment of Tenant's interest as sublessor
in any such proposed sublease, or (ii) if the request is for consent to a
proposed assignment of this Lease, to terminate this Lease and the term hereof
effective as of the last day of the second month following the month in which
the request was received.
Each assignee hereunder shall assume and be deemed to have
assumed this Lease and shall be and remain liable jointly and severally with
Tenant for all payments and for the due performance of all terms, covenants,
conditions and provisions herein contained on Tenant's part to be observed and
performed. No assignment shall be binding upon Landlord unless the assignee
shall deliver to Landlord an instrument in recordable form containing a covenant
of assumption by the assignee, but the failure or refusal of assignee to execute
the same shall not release assignee from its liability as set forth herein.
All the foregoing notwithstanding, Tenant shall not enter into
any lease, sublease, license, concession or other agreement for the use,
occupancy or utilization of the Leased Premises or any portion thereof, which
provides for a rental or other payment for such use,
25
occupancy or utilization based in whole or in part on the income or profits
derived by any person from the property leased, used, occupied or utilized
(other than an amount based on a fixed percentage or percentages of receipts or
sales). Any such purported lease, sublease, license, concession or other
agreement shall be absolutely void and ineffective as a conveyance or any right
or interest in the possession, use or occupancy of any part of the Leased
Premises.
Any consent by Landlord hereunder shall not constitute a
waiver of strict future compliance by Tenant of the provisions of this Section
25 or a release of Tenant from the full performance by Tenant of any of the
terms, covenants, provisions, or conditions in this Lease contained.
26. DEFAULT. Any other provisions in the Lease notwithstanding, it
shall be an Event of Default under this Lease if Tenant fails to pay any
installment of Fixed Rent, Additional Rent or other sum payable by Tenant
hereunder when due and such failure continues for a period of ten (10) days
after written notice given by or on behalf of Landlord to Tenant, provided,
however, Landlord need not give any such written notice, for non-payment of rent
and Tenant shall not be entitled to any such period of grace, more than twice in
any twelve (12) month period, Tenant abandons the Leased Premises or uses or
occupies the Leased Premises otherwise than as permitted by Sections 1 and 9
hereof, or assigns or sublets, or purports to assign or sublet, the Leased
Premises or any part thereof otherwise than in the manner and upon the
conditions set forth in Section 25 hereof, Tenant fails to observe or perform
any other covenant or agreement of Tenant herein contained and such failure
continues after written notice given by or on behalf of Landlord to Tenant for
more than thirty (30) days and such additional time, if any, as is reasonably
necessary to cure such failure, provided Tenant commences to cure such failure
within such thirty (30) day period and diligently thereafter prosecutes such
cure to completion, without Landlord's prior written consent, Tenant removes or
attempts to remove or manifests an intention to remove any or all of Tenant's
property from the Leased Premises otherwise than in the ordinary and usual
course of business, Tenant makes any assignment for the benefit of creditors;
Tenant commits an act of bankruptcy or files a petition or commences any
proceeding under any bankruptcy or insolvency law; a petition is filed or any
proceeding is commenced against Tenant under any bankruptcy or insolvency law
and such petition or proceeding is not dismissed within thirty (30) days; Tenant
is adjudicated a bankrupt; Tenant by any act indicates its consent to, approval
of or acquiescence in, or a court approves, a petition filed or proceeding
commenced against Tenant under any bankruptcy or insolvency law; a receiver or
other official is appointed for Tenant or for a substantial part of Tenant's
assets or for Tenant's interests in this Lease; any attachment or execution
against a substantial part of Tenant's assets or of Tenant's interest in this
Lease remains unstayed or undismissed for a period of more than ten (10) days; a
substantial part of Tenant's assets or of Tenant's interest in this Lease is
taken by legal process in any action against Tenant, or any of the foregoing
occur as to any guarantor or surety of Tenant's performance under this Lease, or
such guarantor or surety defaults on any provision under its guaranty or
suretyship agreement.
If Landlord should be in default in the performance of any of
its obligations under this Lease, which default continues for a period of more
than thirty (30) days after receipt of written notice from Tenant specifying
such default, or if such default is of a nature to require more than thirty (30)
days for remedy and continues beyond the time reasonably necessary to cure (and
Landlord has not undertaken procedures to cure the default within such thirty
(30) day
26
period and diligently pursued such efforts to complete such cure), Tenant may,
in addition to any other remedy available at law or in equity at its option,
upon written notice, incur any expense necessary to perform the obligation of
Landlord specified in such notice and Landlord shall reimburse Tenant promptly
after receipt of a statement therefor from Tenant.
27. LANDLORD'S REMEDIES.
(a) If an Event of Default hereunder shall have happened and
be continuing, Landlord may, at its option:
(i) declare due and payable and xxx for and recover,
all unpaid Fixed Rent for the unexpired period of the Lease Term (and also all
Additional Rent as the amounts(s) of same can be determined or reasonably
estimated) as if by the terms of this Lease the same were payable in advance,
together with all legal fees and other expenses incurred by Landlord in
connection with the enforcement of any of Landlord's rights and remedies
hereunder, such sum to be discounted at the prevailing yield to maturity on
United States Treasury Notes having the closest maturity to the expiration date
of the Lease Term; provided, however, that the remedies set forth in this
subparagraph (i) shall only be available to Landlord in the event Tenant
defaults by failing to pay any installment of Fixed Rent or Operating Expense
Estimate or Operating Expense Adjustment in accordance with Section 26 above,
and/or
(ii) collect or bring action for such Fixed Rent and
Additional Rent as being rent in arrears, or may enter judgment therefor in an
amicable action as herein elsewhere provided for in case of rent in arrears, or
may file a Proof of Claim in any bankruptcy or insolvency proceeding for such
Fixed Rent and Additional Rent, or institute any other proceedings, whether
similar or dissimilar to the foregoing, to enforce payment thereof, and/or
(iii) terminate the Lease Term by giving written
notice thereof to Tenant and, upon the giving of such notice, the Lease Term and
the estate hereby granted shall expire and terminate with the same force and
effect as though the date of such notice was the date hereinbefore fixed for the
expiration of the Lease Term, and all rights of Tenant hereunder shall expire
and terminate, but Tenant shall remain liable as hereinafter provided, and/or
(iv) exercise any other rights and remedies available
to Landlord at law or in equity.
(b) If any Event of Default shall have happened and be
continuing, Landlord may, whether or not the Lease Term has been terminated as
herein provided, re-enter and repossess the Leased Premises or any part thereof
by summary proceedings, ejectment or otherwise and Landlord shall have the right
to remove all persons and property therefrom. Landlord shall be under no
liability for or by reason of any such entry, repossession or removal; and no
such re-entry or taking of possession of the Leased Premises by Landlord shall
be construed as an election on Landlord's part to terminate the Lease Term
unless a written notice of such intention be given to Tenant pursuant to Section
26(a)(ii) or unless the termination of this Lease be decreed by a court of
competent jurisdiction.
27
(c) At any time or from time to time after the repossession of
the Leased Premises or any part thereof pursuant to Section 26(b), whether or
not the Lease Term shall have been terminated pursuant to Section 26(a)(ii),
Landlord will attempt to relet all or any part of the Leased Premises for the
account of Tenant for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Lease Term) and
on such conditions (which may include concessions or free rent) and for such
uses as Landlord, in its absolute discretion, may determine, and Landlord may
collect and receive any rents payable by reason of such reletting; provided that
Landlord shall not be obligated to relet the Leased Premises so long as Landlord
has other comparable space available for lease in the Building. Landlord shall
not be required to accept any tenant offered by Tenant or observe any
instruction given by Tenant about such reletting, or do any act or exercise any
care or diligence with respect to such reletting or to the mitigation of
damages. For the purpose of such reletting, Landlord may decorate or make
repairs, changes, alterations or additions in or to the Leased Premises or any
part thereof to the extent deemed by Landlord desirable or convenient, and the
cost of such decoration, repairs, changes, alterations or additions shall be
charged to and be payable by Tenant as Additional Rent hereunder, as well as any
reasonable brokerage and legal fees expended by Landlord.
(d) No expiration or termination of the Lease Term pursuant to
Section 26(a)(ii), by operation of law or otherwise, and no repossession of the
Leased Premises or any part thereof pursuant to Section 26(b), or otherwise, and
no reletting of the Leased Premises or any part thereof pursuant to Section
26(c) shall relieve Tenant of its liabilities and obligations hereunder, all of
which shall survive such expiration, termination, repossession or reletting.
(e) In the event of any expiration or termination of this
Lease or repossession of the Leased Premises or any part thereof by reason of an
occurrence of an Event of Default, and Landlord has not elected to accelerate
rent pursuant to Section 27(a)(i), Tenant shall pay to Landlord the Fixed Rent,
Additional Rent and other sums required to be paid by Tenant to and including
the date of such expiration, termination or repossession; and, thereafter,
Tenant shall, until the end of what would have been the expiration of the Lease
Term in the absence of such expiration, termination or repossession, and whether
or not the Leased Premises or any part thereof shall have been relet, be liable
to Landlord for, and shall pay to Landlord, as liquidated and agreed current
damages, the Fixed Rent, Additional Rent and other sums which would be payable
under this Lease by Tenant in the absence of such expiration, termination or
repossession, less the net proceeds, if any, of any reletting effected for the
account of Tenant pursuant to Section 26(c), after deducting from such proceeds
all of Landlord's reasonable expenses in connection with such reletting
(including, without limitation, all related reasonable repossession costs,
brokerage commissions, legal expenses, attorneys' fees, employees' expenses,
alteration costs and expenses of preparation for such reletting). Tenant shall
pay such current damages on the days on which the Fixed Rent would have been
payable under this Lease in the absence of such expiration, termination or
repossession, and Landlord shall be entitled to recover the same from Tenant on
each such day.
(f) At any time after such expiration or termination of this
Lease or repossession of the Leased Premises or any part thereof by reason of
the occurrence of an Event of Default, whether or not Landlord shall have
collected any current damages pursuant to Section 26(e), Landlord shall be
entitled to recover from Tenant, and Tenant shall pay to Landlord on
28
demand, unless Tenant has paid the whole of accelerated rent pursuant to Section
27(a)(i), as and for liquidated and agreed 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 Fixed Rent, Additional Rent
and other sums which would be payable under this Lease for the remainder of the
Lease Term from the date of such demand (or, if it be earlier, the date to which
Tenant shall have satisfied in full its obligations under Section 26(e) to pay
current damages) for what would have been the then unexpired term of this Lease
in the absence of such expiration, termination or repossession, discounted at
the prevailing yield to maturity on United States Treasury Notes having the
closest maturity to the expiration date of the Lease Term, over the then fair
rental value of the Leased Premises 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.
(g) Tenant, in consideration for the execution of this Lease
by Landlord and for the covenants and agreements on the part of Landlord herein
contained, and fully comprehending the relinquishment of certain rights
including rights of pre-judgment notice and hearing, hereby expressly authorizes
any attorney of any Court of Record to accept service of process for, to appear
for, and to confess judgment against Tenant in any and all actions brought
hereunder by Landlord against Tenant to recover possession from time to time of
the Leased Premises in accordance with the terms hereof (and Tenant agrees that
upon the entry of each judgment for said possession a Writ of Possession or
other appropriate process may issue forthwith).
(h) In any action for ejectment or for distraint, 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, of which facts such affidavit shall be conclusive evidence, and if a
true copy of this Lease be filed in such action, it shall not be necessary to
file the original as a warrant of attorney, any rule of court, custom or
practice to the contrary notwithstanding. The authority to confess judgment
against Tenant hereunder shall not be exhausted by one (1) exercise thereof, but
judgment may be confessed as provided herein from time to time as often as any
Event of Default occurs under this Lease, and such authority may be exercised as
well after the expiration of the Lease Term and/or during or after the
expiration of any extended or renewal term.
(i) No right or remedy herein conferred upon or reserved to
either party is intended to be exclusive of any other right or remedy herein by
law provided, but each shall be cumulative and in addition to every right or
remedy given herein or now or hereafter existing at law or in equity or by
statute.
(j) No waiver by either party of any breach by the other of
any of the other's obligations, agreements or covenants herein shall be a waiver
of any subsequent breach or of any obligation, agreement or covenant, nor shall
any forbearance by either party to seek a remedy for any breach by the other be
a waiver by either party or any rights and remedies with respect to such or any
subsequent breach.
29
(k) In the event of a breach or threatened breach by either
party of any of the covenants or provisions hereof, the other shall have the
right of injunction and right to invoke any remedy allowed at law or in equity
as if re-entry summary proceedings and other remedies were not herein provided
for.
(l) Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event of Tenant
being evicted or dispossessed for any cause, or in the event of Landlord
obtaining possession of the Leased Premises, by reason of the violation by
Tenant of any of the covenants and conditions of this Lease, or otherwise.
28. LEGAL FEES AND OTHER COSTS. The prevailing party in any enforcement
proceeding shall be entitled to reimbursement of all reasonable legal fees and
expenses by the non-prevailing party.
29. LATE CHARGE. If any installment of Fixed Rent, Additional Rent or
other sums payable by Tenant to Landlord under this Lease shall not be paid on
the due date thereof, Tenant shall pay to Landlord a "late charge" of three
percent (3%) of the amount so due for the purpose of defraying the expense
incident to handling such delinquent payment.
30. SUCCESSORS AND ASSIGNS. The obligations of this Lease shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that Landlord and each successive owner of the
Building and/or the Lot shall be liable only for obligations accruing during the
period of its ownership or interest in the Building or the Lot; and from and
after the transfer by Landlord or such successive owner of its ownership or
other interest in the Building or the Lot, Tenant shall look solely to the
successors in title for the performance of Landlord's obligations hereunder. The
liability of Landlord or any successive owner of the Building and/or the Lot
hereunder and all of its officers, employees, shareholders or joint venturers or
partners, if any, whether general or limited, shall be limited to Landlord's
estate or other title or interest in the Building and/or the Lot.
31. WAIVERS. No delay or forbearance by either party in exercising any
right or remedy hereunder or in undertaking or performing any act or matter
which is not expressly required to be undertaken by such party shall be
construed, respectively, to be a waiver of such party's rights or to represent
any agreement by such party to undertake or perform such act or matter
thereafter.
32. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between
Landlord and Tenant that the respective parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matter whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use of or occupancy of the Leased Premises and/or any claim of
injury or damage and any emergency statutory or any other statutory remedy.
33. SEVERABILITY. Each covenant and agreement in this Lease shall for
all purposes be construed to be a separate and independent covenant or
agreement. If any provision in this Lease or the application thereof shall to
any extent be invalid, illegal or otherwise unenforceable, the remainder of this
Lease, and the application of such provision other than as invalid, illegal or
30
unenforceable, shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.
34. NOTICES; PAYMENT OF RENT.
(a) Each notice, demand, request or other communication
required or permitted under the terms of this Lease shall be in writing and,
unless and until otherwise specified in a written notice by the party to receive
it, shall be sent to the parties at the following respective addresses:
if intended for Tenant:
WorldGate Communications, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, V.P. and General Counsel
FAX NO.: (000) 000-0000
If intended for Landlord:
c/o Balanced Capital LLC
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
FAX NO.: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxx, Esquire
000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
FAX NO.: (000) 000-0000
Notices may be given on behalf of any party by its legal counsel.
(b) Each such notice, demand, request or other communication
shall be deemed to have been properly given for all purposes if (i) hand
delivered or (ii) mailed by registered or certified mail of the United States
Postal Service, return receipt requested, postage prepaid or (iii) delivered to
a nationally recognized overnight courier service for next business day (or
sooner) delivery or (iv) delivered via telecopier or facsimile transmission to
the facsimile number listed in this Section, provided, however, that if such
communication is given via telecopier or facsimile transmission, an original
counterpart of such communication shall concurrently be sent in the manner
specified in either clause (iii) of this subsection (b) or be hand delivered by
the next business day.
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(c) Each such notice, demand, request or other communication
shall be deemed to have been received by its addressee, and to have been
effectively given, upon the earlier of (i) actual delivery, (ii) refusal of
acceptance at the proper address or (iii) three business days after deposit
thereof at any main or branch United States post office, if sent in accordance
with clause (ii) of subsection (b) of this Section and (iv) one business day
after delivery to the courier, if sent pursuant to clause (iii) of subsection
(b) of this Section; provided that in the case of delivery by telecopier or
facsimile transmission, any transmission not received by 5:00 p.m. on a business
day shall be deemed to have been given on the next business day after receipt.
(d) All payments of rent and any other charges under this
Lease shall be paid to Landlord at the address of Landlord provided in this
Section or at such other address as Landlord may specify in written notice given
pursuant hereto.
35. AMENDMENT AND MODIFICATIONS. This Lease contains the entire
agreement between the parties hereto, and shall not be amended, modified or
supplemented unless by agreement in writing signed by both Landlord and Tenant.
36. SECURITY DEPOSIT; OPTION TO USE LETTER OF CREDIT.
(a) Tenant shall deposit the sum of $1,026,000 with Landlord
as a security deposit (the "Security Deposit") to be held by Landlord as
security for Tenant's performance of all of Tenant's obligations under this
Lease. Landlord shall deposit the Security Deposit in a segregated
interest-bearing account, and all interest earned on the account shall be paid
to Tenant at such time as the Security Deposit is returned to Tenant. Landlord,
in its sole discretion, may apply the Security Deposit to cure any Event of
Default under this Lease. If any such application is made, upon notice by
Landlord to Tenant, Tenant shall promptly replace the amount so applied. Within
thirty (30) days after expiration or earlier termination of this Lease, Landlord
shall return the Security Deposit (less any portion thereof applied to reimburse
Landlord for amounts due by reason of an Event of Default) to Tenant. Tenant
will not look to any foreclosing mortgagee on the Lot or Building or any
interest therein for the return of the Security Deposit unless the mortgagee has
expressly assumed Landlord's obligations under this Lease or has actually
received the balance of the Security Deposit. In the event Landlord sells the
Lot and Building and transfers the Security Deposit to a new owner of the Lot
and Building, Tenant shall look solely to such new owner for the return of the
balance of the Security Deposit.
(b) As long as Tenant has not exercised its right of
termination under Section 3(c) of this Lease and there is no uncured monetary
Event of Default, the amount of the Security Deposit shall be reduced at the end
of the sixth month of each Lease Year as provided in Section 1, and any excess
Security Deposit shall be returned to Tenant within ten (10) business days after
Tenant's written request therefor. The Security Deposit shall be waived (and
returned to Tenant within ten (10) business days after Tenant's written request
therefor) if Tenant becomes a public company characterized as investment grade
by Standard & Poors, and in the latter event, the requirement of a Security
Deposit shall be waived as long as Tenant remains an Standard & Poors investment
grade company. Upon cancellation of this Lease by Tenant under Section 3(c) and
payment of the early termination payment set forth therein (to the extent not
waived as set
32
forth therein), the Security Deposit shall be returned to Tenant, within ten
(10) business days after Tenant's written request therefor.
(c) In lieu of a cash Security Deposit, Tenant may replace the
Security Deposit required under Section 1 with a letter of credit (referred to
in this Agreement as the "Letter of Credit." If Tenant elects to deliver a
Letter of Credit, then the Letter of Credit, the following provisions shall
apply:
(i) The Letter of Credit shall be irrevocable, shall
be drawn on a commercial bank reasonably acceptable to Landlord, shall name the
Landlord as Beneficiary, shall have a term of at least twelve months at a time
and shall initially be in the amount of $1,026,000. No later than thirty five
(35) days prior to the then scheduled expiration date of the Letter of Credit,
Tenant shall deliver a new letter of credit or an amendment extending the
expiration date of the existing letter for at least twelve additional months. If
and when Tenant is entitled to a reduction in the amount of the Security Deposit
as provided in Section 1 and Section 36(b), Landlord will accept an amendment to
the Letter of Credit reducing the amount thereof to the reduced amount permitted
hereunder.
(ii) The Letter of Credit shall state that it may be
drawn by the Landlord upon presentation to the issuing bank of the original
letter of credit and a letter referencing this Lease by date and names of the
parties, signed by a partner, member or officer of the Landlord, certifying that
(A) "This letter of credit expires less than
thirty five (35) days from the date of this draw, and WorldGate Communications,
Inc. (Tenant) has failed to deliver to the undersigned a new letter of credit or
amendment of the existing letter of credit extending the expiration date for at
least twelve additional months" OR
(B) "An Event of Default has occurred under
the Lease which has not been cured as of the close of business on the business
day preceding presentation of this Letter of Credit."
(iii) If Landlord draws upon the Letter of Credit
under this Section 36(c), the cash proceeds of the Letter of Credit shall be
held and disposed of in accordance with the provisions of this Lease applicable
to the cash Security Deposit. Nothing in this Section shall be deemed a waiver
of any rights Tenant may have against Landlord if Landlord makes a certification
under clause (ii) which is false when made.
(iv) If Tenant elects to secure its obligations with
a Letter of Credit, (A) upon transfer of the Property by Landlord, Landlord may
require amendment of the Letter of Credit to name the new owner as Beneficiary;
and (B) upon change in the amount of the required Security Deposit under
Subsection 36(b) above, Landlord shall accept a modification reducing the amount
in accordance with Section 36(b).
(d) Tenant shall deliver the Security Deposit to Landlord no
later than December 15, 1998 (the "Security Deposit Delivery Date"), provided,
however, that if settlement on Landlord's acquisition of the Property is
scheduled for a date later than December 17, 1998,
33
Landlord shall so notify Tenant and in that event, the Security Deposit Delivery
Date shall be extended by Landlord to the date which is two business days before
Landlord's scheduled settlement. If the Security Deposit is cash, Tenant shall
deliver immediately available funds by wire transfer on the Security Deposit
Delivery Date, to an account designated by Landlord. If the Security Deposit is
to be a Letter of Credit, then Tenant shall deliver a draft of the proposed
letter for Landlord's approval no later than December 5th, and shall delivery
the signed original Letter of Credit at Landlord's offices by 5:00 p.m. on the
Security Deposit Delivery Date. Tenant acknowledges that Landlord will not
acquire the Property without the Security Deposit, and accordingly that time for
delivery is strictly of the essence of this Agreement. Notwithstanding any other
provision of this Lease, there shall be no notice and cure period for failure to
deliver the Security Deposit on time. If Tenant fails to deliver the Security
Deposit on time, it shall be an immediate Event of Default entitling Landlord to
cancel this Lease at Landlord's option.
37. ENVIRONMENTAL MATTERS.
(a) Tenant shall promptly deliver to Landlord copies of any of
the following documents that Tenant receives or prepares:
(i) applications or other materials regarding the
Land, Building, or Leased Premises submitted to any governmental agency in
compliance with Environmental Statutes;
(ii) any notifications regarding the Land, Building,
or Leased Premises submitted to any person pursuant to Environmental Statutes;
(iii) any permit, license, approval, amendment or
modification thereto granted regarding the Land, Building, or Leased Premises
pursuant to Environmental Statutes;
(iv) any record or manifest required to be maintained
regarding the Land, Building, or Leased Premises pursuant to Environmental
Statutes; and
(v) any correspondence, notice of violation, summons,
order, complaint or other document received by Tenant or its lessees, sublessees
or assigns (if permitted), pertaining to the Land, Building, or Leased Premises
and to compliance with any Environmental Statutes.
"Environmental Statutes" shall mean all statutes,
ordinances, regulations, orders and requirements of common law regulating
environmental matters concerning (a) activities at the Land, Building or Leased
Premises, (b) repairs or construction of any improvements located on the Land,
(c) handling of any materials, (d) discharges to the air, soil, surface water or
ground water, and (e) storage, treatment or disposal of any waste at or
connected with any activity at the Land, Building or Leased Premises.
(b) In the event that Landlord or Landlord's mortgagee
performs or causes to perform an investigation of the Lot or Building for any of
the below matters, Tenant shall cooperate with Landlord or Landlord's mortgagee
with respect to such investigation:
34
(i) compliance at the Land, Building, or Leased
Premises with Environmental Statutes;
(ii) the presence of hazardous substances or
contamination at the Land, Building, or Leased Premises;
(iii) the presence at the Land, Building, or Leased
Premises of polychlorinated biphenyls, substances containing polychlorinated
biphenyls, asbestos, materials containing asbestos, or unreaformaldehyde foam
insulation;
(iv) the presence at the Land of (A) a wetland or
other "water of the United States" for purposes of Section 404 of the federal
Clean Water Act, 33 U.S.C. Section 1344, or any similar area regulated under
any state law, (B) a flood plain or other flood hazard area as defined
pursuant to the Pennsylvania Flood Plain Management Act, Pa. Stat. tit. 32,
Sections 679.101 to .601 (Xxxxxx Sup. 1989), (C) a portion of the coastal
zone for purposes of the federal Coastal Zone Management Act, 16 U.S.C.
Sections 1451-1464, or (D) any other area development of which is
specifically restricted under applicable law by reason of its physical
characteristics or prior use;
(v) the presence at the Land, Building, or Leased
Premises of radon products; or
(vi) the presence at the Land, Building, or Leased
Premises of tanks presently or formerly used for the storage of any liquid or
gas above or below ground.
(c) Intentionally omitted.
(d) In the event any present or future Federal, State or
municipal statute, ordinance, law, rule or regulation requires Landlord or
Tenant to obtain a clearance certificate or Declaration of Non-Applicability,
similar or dissimilar to those required by the New Jersey Environmental Clean-Up
Responsibility Act, upon the expiration or earlier termination of the Lease
Term, or upon the sale of the Lot or Building by Landlord, Tenant will apply
therefor, or execute and deliver an application therefor to Landlord without
delay, and take such action as may be necessary under such applicable statute,
ordinance, law, rule or regulation to obtain such clearance certificate or
Declaration of Non-Applicability.
(e) Landlord shall defend, indemnify and hold harmless Tenant
and its directors, officers, employees, contractors, agents, parents,
subsidiaries, successors and assigns from and against any and all loss, damage,
cost, expense or liability (including attorneys' fees and actual litigation
costs) directly or indirectly arising out of or attributable to the use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a Hazardous Substance on, under or about the
Leased Premises prior to Tenant's taking possession of the Leased Premises, or a
breach of any representation, warranty, covenant or agreement contained herein
including, without limitation, (i) all actual damages, and (ii) the costs of any
required or necessary repairs, cleanup, remediation or detoxification of the
Leased Premises.
35
(f) Tenant will not engage in activities in or about the
Property which involve the generation, manufacturing, refining, transportation,
treatment, storage, emission, release, disposal or handling of hazardous
substances, hazardous wastes or hazardous materials (hereinafter collectively
called "Hazardous Substances") as such terms are defined under applicable
Environmental Statutes except that materials routinely used in office buildings
(such as toner for copiers and printers, and maintenance materials) and
materials routinely used in the manufacturing and design of circuit boards and
similar electronic hardware (such as cleaning solutions) that are or contain
Hazardous Substances may be used and stored on the Leased Premises, provided
such is incident to and reasonably necessary for the operation and maintenance
of the Leased Premises as permitted under the provisions of this Lease and is in
compliance with applicable laws, and further provided that the quantity of
Hazardous Substances is not such as would trigger reporting requirements (other
than routine requirements under OSHA and other workplace safety laws) under any
Environmental Statutes. Should any release of Hazardous Substances or solid
waste occur at the Leased Premises or elsewhere on the Property by reason of any
act or omission of Tenant, its agents, employees or invitees, the Tenant shall
immediately take all measures necessary to contain, remove and dispose off of
the Property of all materials released or contaminated by the release and remedy
and mitigate all threats to public health or the environment relating to such
release. When conducting any such measures the Tenant shall comply with
Environmental Statutes. Tenant agrees to indemnify, defend and hold Landlord
harmless of, from and against any and all expense, loss, cost or liability
incurred or suffered by reason of Tenant's breach of this Section 37(f), but
nothing herein shall be deemed to render Tenant liable for actions or omissions
of Landlord or for any contamination pre-existing at the Commencement Date. The
obligations of Tenant under this Section 37 shall survive any expiration or
termination of this Lease.
38. BROKERS. Landlord and Tenant each represent and warrant to the
other that it has not engaged any broker, finder or other person other than the
broker, if any, listed in Section 1 hereof, who would be entitled to any
commission or fees in respect of the negotiation, execution or delivery of this
Lease. Landlord and Tenant each agree to indemnify and hold harmless the other
against any loss, cost, liability or expense incurred by the other as a result
of any claim asserted by any other broker, finder or other person on the basis
of any arrangements or agreements made or alleged to have been made by or on
behalf of the other. Landlord shall be responsible for the payment of a
brokerage fee to the broker listed in Section 1 at Landlord's scheduled
commission rate or as otherwise agreed in writing between Landlord and such
broker.
39. FINANCIAL STATEMENTS. Within ninety (90) days following the end of
Tenant's fiscal year, Tenant shall deliver to Landlord a copy of Tenant's
financial statements (consisting, at a minimum, of Tenant's balance sheet and
income statement) for Tenant's fiscal year just ended, certified by an
independent certified public accountant as presenting fairly, in all material
respects, the financial position of Tenant and the results of its operations in
accordance with generally accepted accounting principles. Landlord shall keep
any information provided to Landlord in accordance with this Section 39
confidential and shall not disclose such information to any third party. In the
event at any time in the future Tenant's stock becomes publicly traded, Tenant
may satisfy the requirements of this Section 39 by providing to Landlord the
financial information which Tenant files with the Securities and Exchange
Commission.
40. INTENTIONALLY OMITTED.
36
41. OPTION TO PURCHASE.
(a) GRANT; EXERCISE. Tenant shall have the option to purchase
the Property (the "Purchase Option") at any time after Landlord's acquisition of
the Property at the purchase price set forth below provided it gives Landlord at
least thirty (30) days prior written notice of its desire to exercise the
Purchase Option, provided Tenant is not in default of this Lease at the time of
such exercise, and further provided that Tenant may not exercise its Purchase
Option after the occurrence of a casualty or condemnation which would give
either party the right to terminate this Lease unless and until both sides have
elected to waive their option to terminate this Lease and any applicable
restoration has been completed:
(i) The purchase price for the Property shall be an
amount determined by capitalizing the aggregate Annual Fixed Rent payable for
the Lease Year in which settlement will occur under the Purchase Option using a
nine percent (9%) capitalization rate.
(b) SETTLEMENT. Closing shall take place at the offices of
Tenant's attorney or title company in the county in which the Leased Premises
are located and shall take place no sooner than thirty (30) days and no more
than one hundred twenty (120) days after Tenant gives notice of exercise of the
Purchase Option and no later than the date on which this Lease is then scheduled
to expire by its terms, or as otherwise agreed between the parties. The purchase
price shall be paid at closing in cash or by bank certified, treasurer's or
cashier's check or by plain check of the title insurance company insuring
Tenant's title to the Leased Premises.
(c) PROPERTY; TITLE.
(i) The Property shall include the Lot, together with
the Building and other buildings, structures and improvements thereon erected
and together with all easements, rights and privileges appurtenant thereto,
being all of the real property owned by landlord at the location of the Leased
Premises. The Property is to be conveyed subject to all easements, conditions,
covenants and restrictions of record when Landlord acquires title and otherwise
free and clear of all liens, restrictions, encumbrances, and easements of every
kind, excepting only: (1) easements and other matters of record that do not
affect the use of the Leased Premises as contemplated under this Lease, and (2)
such matters as may have been consented to be Tenant between the date of this
Lease and the date of closing on the Purchase Option; otherwise, title to the
Property shall be good and marketable and such as will be insured by a reputable
title company of Tenant's election at regular rates.
If Landlord is unable to give a good and
marketable title and such as will be so insured, as required in the preceding
paragraph, then Tenant shall have the option of (1) accepting such title as
Landlord is able to convey, with no deduction from or adjustment of the
purchase price except for deduction of the amount of the then principal,
accrued interest and penalties of any encumbrance or other lien or the amount
of any outstanding money judgment (with accrued interest and penalties, if
applicable) so encumbering the Property, or (2) declining to consummate this
purchase; and in the latter event Tenant shall be reimbursed forthwith for
all title insurance charges actually incurred in searching title to the
Property, there shall be no
37
further obligation or liability on either of the parties hereunder with respect
to the Purchase Option and this Lease shall continue in accordance with its
terms.
(ii) Provided there is a closing hereunder, Tenant
will be responsible for and shall comply, at Tenant's expense, with the
requirements of any and all notices or orders served upon Landlord after the
date of this Lease and for the payment of any assessments and charges thereafter
made for any public improvements, if work in connection therewith is thereafter
begun in or about the Leased Premises or adjacent thereto.
(d) LOSS OR CASUALTY; CONDEMNATION.
(i) Loss or damage to all or any portion of the
Leased Premises caused by fire or other casualty shall not nullify, cause a
termination of or otherwise affect the Purchase Option, except as follows: If
neither party would have been entitled to cancel this Lease under Section 21 by
reason of such casualty, then the Purchase Option shall remain in effect but
closing thereunder shall be extended until the date which is 10 business days
after Landlord gives notice to Tenant that the damage has been repaired or
restored. If the casualty damage is such that either or both parties have a
right to cancel this Lease under Section 21, then the following shall apply. If
Tenant exercises a right granted in Section 21 to cancel this Lease by reason of
the casualty, then the Tenant shall be deemed to have automatically canceled its
exercise of the Purchase Option concurrently with the exercise of notice of
termination under Section 21. If Tenant has not elected to terminate this Lease
under Section 21 but Landlord exercises a right of termination of this Lease
under Section 21, then by written notice given to Landlord within 10 business
days after Tenant's receipt of Landlord's notice of election to terminate under
Section 21, Tenant shall notify Landlord as to whether or not Tenant elects to
cancel this Purchase Option. If Tenant elects not to cancel the Purchase Option,
then the parties shall proceed to closing hereunder on a date selected by Tenant
no sooner than five business days and no later than 15 business days after
Tenant's notice of election. At closing, Tenant shall pay the entire purchase
price, Landlord shall assign to Tenant all of Landlord's rights under the
property insurance policy for the Building arising out of such casualty, and
Landlord shall pay to (or credit Tenant in the amount of) insurance proceeds
theretofore received by Landlord arising out of the casualty, less any
out-of-pocket costs incurred by Landlord to collect such proceeds, to make and
to pay for repairs (including demolition, debris removal and related
restoration) completed by Landlord prior to closing, and also net of any rent
loss or business interruption proceeds applicable to rent and business losses
prior to the date of closing.
(ii) Any taking or condemnation for public or
quasi-public purpose or use by any competent authority in appropriate
proceedings or by any right of eminent domain of all or any part of the Leased
Premises between the date of Tenant's exercise of the Purchase Option and the
time of closing hereunder shall not affect the purchase option except as
follows. The property conveyed shall be net of any land taken by the condemning
authority (or subject to the notice of taking) and all of Landlord's rights with
respect thereto shall be assigned to Tenant at settlement. However, if the
extent of the taking or condemnation is such that Tenant would have the right to
cancel this Lease under Section 20 hereof, and Tenant elects to exercise such
termination right under Section 20, then the cancellation of this Lease by
Tenant under Section 20 shall be deemed to effect an automatic cancellation of
the Purchase Option.
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(e) FIXTURES, TREES, SHRUBBERY, ETC. All plumbing, heating,
air conditioning, ventilating, electrical and lighting fixtures and systems
appurtenant to and forming a part of the Leased Premises; all other fixtures of
whatever nature or description now in or located on the Leased Premises; any
remaining heating fuels stored on the Leased Premises; and all trees, shrubbery
and plants in or on the Leased Premises on the date of this Lease are included
in the sale and purchase price and shall become the property of Tenant at
closing hereunder. None of the foregoing shall be removed or permitted to be
removed by Landlord from the Leased Premises after the date of Tenant's exercise
of this Option to Purchase provided that settlement takes place.
(f) DEFAULT BY TENANT. Should Tenant violate or fail to
fulfill or perform any of the terms or conditions of this Lease insofar as they
relate to the Purchase Option and if as a result of such breach a closing
hereunder shall not occur, then Landlord, as its exclusive remedy for such
breach, shall be entitled to receive forthwith from Tenant the sum of $10,000,
which sum shall be treated as liquidated damages (and not as a penalty) for such
breach; and upon such remittance by Tenant of said sum mentioned herein,
Landlord and Tenant shall each be released from all liability or obligation
hereunder relating to the Purchase Option and the Purchase Option shall become
null and void; provided, however, all other provisions of this Lease shall
continue in full force and effect as if Tenant had never exercised the Purchase
Option.
(g) APPORTIONMENTS; EXPENSES.
(i) All rent for the month in which closing takes
place shall be apportioned at closing. Utilities, taxes and other Operating
Expenses shall not be apportioned, it being acknowledged that Tenant is
responsible for all such costs under this Lease. Landlord shall use all
reasonable efforts to make final calculations of any amounts due from Tenant or
credits owing to Tenant by reason of Operating Expenses as of the date of
closing, and preliminary credits or payments shall be made at closing based on
such numbers, subject to post settlement adjustment with respect to any items
for which Landlord is reasonably unable to obtain final numbers by closing. All
adjustments shall be completed no later than 60 days after closing.
(ii) All realty transfer taxes, if any, imposed by
any governmental authority on the conveyance of the Leased Premises by the deed
contemplated hereby shall be divided equally between Landlord and Tenant.
(iii) Each party shall pay all its own expenses
incurred in connection with the Purchase Option and the transactions
contemplated hereby.
(iv) A survey will be secured and paid for by
Landlord if (1) the title insurer shall reasonably reason require such a survey,
or (2) there has been a physical change in the metes or bounds of the Leased
Premises by subdivision, highway or road changes or improvements on or bounding
the Leased Premises which would render the existing legal description
incomplete, incorrect or inadequate to describe properly the Property to be
conveyed hereunder.
39
(h) TENDER. Formal tender of an executed deed and purchase
money is hereby waived; but nothing herein shall be deemed a waiver,
concurrently with a settlement hereunder, of the obligation of Landlord to
execute, acknowledge and deliver (or cause to be executed, acknowledged and
delivered) a special warranty deed for the Property or the concurrent obligation
of Tenant to pay the purchase price.
(i) RIGHT OF FIRST OFFER. In the event Landlord receives an
expression of serious interest from a third party to purchase the Leased
Premises which Landlord is willing to accept, Landlord shall notify Tenant of
such offer and Tenant shall then have the right for a period of ten (10)
business days following receipt of Landlord's notice to decide if Tenant desires
to purchase the Leased Premises in accordance with the terms and conditions set
forth in the offer. If Tenant does not notify Landlord within ten (10) business
days after receipt of Landlord's notice of Tenant's desire to purchase the
Leased Premises, or if Tenant fails to execute an Agreement of Sale within ten
(10) days after receipt of the Agreement of Sale for any reason other than
delays caused by Landlord, then Landlord shall be free to sell the Leased
Premises to the offering party or its assignee or nominee, and this right shall
be of no further force or effect with respect to the Leased Premises unless
Landlord fails to complete the sale of the Leased Premises to the offering party
or its assignee or nominee; provided, however, that Landlord agrees not to sell
the Leased Premises upon terms materially more favorable to the purchaser than
those offered to Tenant. "Materially more favorable" shall mean changes which,
in the aggregate, effectively reduce the purchase price set forth in the offer
by more than two percent (2%). If Landlord complies with the provisions of this
Section 41(i) and the Property is sold, all of Tenant's rights under this
subparagraph (i) terminate absolutely and become void.
42. HEADINGS AND TERMS. The title, headings and table of contents of
this Lease are for convenience of reference only and shall not in any way be
utilized to construe or interpret the agreement of the parties as otherwise set
forth herein. The term "Landlord" and the term "Tenant" as used herein shall
mean, where appropriate, all persons acting by or on behalf of the respective
parties, except as to any required approvals, consents or amendments,
modifications or supplements hereunder when such terms shall only mean the
parties originally named on the first page of this Lease as Landlord and Tenant,
respectively, and their agents so authorized in writing.
43. GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
44. PRESENT LEASE. With respect to Tenant's three existing leases for
space at 3220 and 0000 Xxxxxxx Xxxxx in Glenview Corporate Center between
Pitcairn Properties, Inc., as Landlord and Tenant as Tenant (collectively the
"Glenview Lease"), the parties agree as follows: As of the date of the beginning
of Annual Fixed Rent payments under this Lease, Landlord will contribute up to
$363,000 ("Landlord's Contribution") towards the payment of minimum and
additional rent due from Tenant under the Glenview Lease from time to time.
Payments of Landlord's Contribution shall be made on a monthly basis, by check
payable to Tenant on the first day of each month (except that if the
Commencement Date of this Lease is not the first day of the month, then the
first payment of Landlord's Contribution, apportioned for that month, shall be
made on the Commencement Date concurrently with Tenant's first payment of rent
under this Lease). The amount of each monthly installment of Landlord's
Contribution shall not
40
exceed 79.25% of the applicable monthly payment due from Tenant under the
Glenview Lease for minimum rent and any additional rent that is collected in
monthly installments under the Glenview Lease. The balance of the monthly
payment due under the Glenview Lease shall be the responsibility of Tenant.
After Tenant surrenders its space under the Glenview Lease, Landlord and Tenant
shall use joint efforts to mitigate the expense under the Glenview Lease by
subleasing or negotiating a buyout of the Glenview Lease. Any savings obtained
by reason of such efforts shall be shared by Landlord and Tenant in the same
proportion (that is 79.25% to Landlord and 20.75% to Tenant).
45. SIGNS. So long as Tenant is paying Fixed and Additional Rent due
under this Lease, Tenant shall have the right to erect signage exterior to the
Building exclusive to Tenant at Tenant's own expense provided that (i) such
signage is in conformity with all governmental statutes, ordinances and
regulations, and (ii) until July 1, 1999, signage shall be subject to Landlord's
approval, which will not be withheld as long as the other tenant of the Building
does not object.
46. MEMORANDUM OF LEASE. Landlord agrees, upon Tenant's request, to
execute a short form of this Lease within thirty (30) days after the execution
and delivery of this Lease. Tenant may record such short form lease at its sole
cost and expense. The provisions of this Lease shall control, however, with
regard to any omissions from said short form, or with respect to any provisions
hereof which may be in conflict with such short form.
47. ANTENNA(S) INSTALLATION. Should Tenant wish to install an
antenna(s) and associated equipment on property belonging to Landlord, including
on the roof of the Building, Landlord agrees that said property may be used for
such purposes at no additional cost to Tenant, subject to such reasonable
approvals, rules and regulations as Landlord may adopt. Landlord grants Tenant
the right in common with Landlord and other tenants, subject to the following
provisions of this Section, to install, operate and maintain for use by Tenant
and any affiliated company (but not to transferred or assigned to a third
party), at Tenant's expense and risk, a lawfully permitted antenna(s) and
associated equipment (the "Antenna Leased Premises"):
(a) Tenant shall submit, at Tenant's expense, a full set of
engineering plans and specifications of the proposed antenna(s) installation to
Landlord for approval, such approval not to be unreasonably withheld,
conditioned or delayed;
(b) Tenant shall make all connections by conduit or cable as
required between Tenant's equipment in the Leased Premises and the Antenna
Leased Premises utilizing Building services, subject to Tenant's payment for
reasonable costs of such services, as necessary to effect the operation of the
antenna(s). Said connections shall be approved by Landlord, which approval shall
not be unreasonably withheld, conditioned or delayed;
(c) Any antenna(s) installed by Tenant shall be erected and
operated so as not to interfere with the operation of any previously erected
antenna(s). Tenant agrees to remedy at Tenant's expense any interference with
other tenants or third parties caused by the operation of Tenant's antenna(s),
and Tenant agrees to indemnify and hold harmless Landlord from all liability and
claims, including, without limitation, court costs, attorneys' fees and costs of
investigation, related to or arising from the operation and/or maintenance of
Tenant's antenna(s);
41
(d) Tenant or Tenant's representatives shall, at all
reasonable times, have the unrestricted right to enter or leave the Antenna
Leased Premises where the antenna(s) and equipment are located;
(e) Landlord agrees that it will not give unauthorized persons
access to Tenant's Antenna Leased Premises or equipment;
(f) Tenant shall obtain all necessary municipal, state and
federal permits and authorizations required to install, maintain and operate an
antenna(s) and associated equipment and pay any charges levied by government
agencies annually or otherwise which are the sole result of Tenant's having an
antenna(s);
(g) Tenant agrees to maintain the Antenna Leased Premises and
associated equipment in a good state of repair, to save Landlord harmless from
any loss, costs or damages as a result of the erection, operation, maintenance,
existence or removal of said antenna(s);
(h) At the conclusion of the Term, unless Landlord permits
otherwise, Tenant shall remove the antenna(s) and surrender and restore the
Antenna Leased Premises to Landlord in as good order and same condition as when
received;
(i) The liability insurance to be carried by Tenant pursuant
to the provisions of this Lease shall include coverage for the activity of
Tenant on the Antenna Leased Premises. Tenant shall pay any increase in rates
for insurance which Landlord is required to carry under the Lease because of the
installation and use of the antenna(s) by Tenant; and
(j) Any notice or demand required or permitted to be given
hereunder shall be made in accordance with the terms of this Lease.
48. LANDLORD'S WAIVER. Landlord agrees to execute landlord's waivers in
conjunction with the financing of Tenant's fixtures, machinery, inventory and/or
equipment in form attached hereto as Exhibit "C" and made a part hereof. Tenant
shall have the right at all times to remove and/or replace any fixtures,
machinery and/or equipment owned by Tenant.
49. MOVING COSTS. Within ten days after receipt of an invoice therefor
(but not prior to Tenant taking possession of the Leased Premises), Landlord
shall pay Eighteen Thousand Dollars ($18,000) toward Tenant's costs to move its
property to the Leased Premises.
50. LANDLORD'S CONDITION. The parties acknowledge that Landlord has not
yet acquired fee title to the Property, and that it is presently contemplated
that Landlord's purchase of the Property from Osiris Holding Corporation
("Existing Owner") is anticipated to proceed to settlement on or prior to
December 31, 1998. If for any reason whatsoever [including without limitation an
election by Landlord to terminate the agreement prior to expiration of
Landlord's due diligence period], the purchase by Landlord (or its assignee or
nominee) of the Property from the Existing Owner is not consummated, this Lease
shall lapse and become void. Landlord shall respond promptly to inquiries from
Tenant as to the status of the proposed acquisition. If the Sale Agreement is
not signed by October 15, 1998, or if settlement on the sale and purchase does
42
not occur by January 31, 1999, either party may cancel this Lease by written
notice to the other, provided however that Landlord may not exercise its right
of termination of this Lease unless and until negotiations and proceedings with
the Existing Owner have been terminated.
43
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the date first mentioned.
LANDLORD:
BALANCED CAPITAL LLC
By: /s/ Xxxxxx X. Brand By: /s/ Xxxxx Xxxxxxx
----------------------------- ---------------------------
Xxxxxx X. Brand, Manager Xxxxx Xxxxxxx, Manager
TENANT:
WORLDGATE COMMUNICATIONS, INC.
/s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------- ---------------------------
Attest Name: Xxxxxxx X. Xxxx
Title: V.P. Corporate Affairs
Title:
44
FIRST AMENDMENT TO LEASE
This First Amendment to Lease is made as of the 7th day of December
1998 by and between BALANCED CAPITAL LLC, a Pennsylvania limited liability
company ("Landlord") and WORLDGATE COMMUNICATIONS, INC., a corporation
("Tenant").
Whereas, Landlord and Tenant entered into an agreement dated October 7,
1998 (the "Lease") pursuant to which Landlord agreed to lease to Tenant, on the
terms and conditions set forth in the Lease, a building containing approximately
72,000 square feet of space located at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxxxx; and
Whereas, Landlord and Tenant desire to amend the Lease in certain
respects;
Now therefore, in consideration of the mutual promises contained in
this Amendment, and intending to be legally bound, Landlord and Tenant agree as
follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this
Amendment shall have the meaning given to such terms in the Lease.
2. CONFIRMATION OF SQUARE FOOTAGE. Landlord and Tenant confirm that
the gross square footage of the Building is approximately 72,000 square feet,
and they hereby agree, notwithstanding any measurement right or other provision
of the Lease to the contrary, to use 72,000 square feet as the size of the
Leased Premises (after delivery of the entire Building) for all purposes under
the Lease, including calculation of Rent and other charges under the Lease.
0. XXXXXXX XXXXXX.
(a) The definition of Operating Expense set forth in subsection
6(d) of the Lease is hereby amended to include costs incurred for snow and ice
removal, maintenance, repairs and repaving of Tremont Avenue, the private street
abutting the Lot, until the date (if any) when Tremont Avenue is dedicated to
the Township of Bensalem.
(b) Section 10 of the Lease is hereby amended to add to the
following to the services to be furnished by Landlord: snow and ice removal,
maintenance, repairs and repaving of Tremont Avenue, the private street abutting
the Lot, until the date (if any) when Tremont Avenue is dedicated to the
Township of Bensalem.
4. PRESENT LEASE. Section 44 of the Lease is hereby amended and, as
amended, restated in its entirety as follows:
44. PRESENT LEASE. Landlord will contribute Three Hundred Sixty
Three Thousand Dollars ($363,000) ("Landlord's Contribution") toward
Tenant's obligations
for minimum rent and additional rent under Tenant's three existing leases
for space at 3220 and 0000 Xxxxxxx Xxxxx in Glenview Corporate Center
between Pitcairn Properties, Inc. as landlord and Tenant as tenant
(collectively the "Glenview Lease"). Landlord's Contribution shall be paid
to Tenant in its entirety by check delivered to Tenant within five days
after the date Tenant takes possession of the first 40,000 square feet of
space in the Building and begins paying Annual Fixed Rent under this Lease.
Any savings generated by the sublease, buyout or other early disposition of
Tenant's obligations under the Glenview Lease shall belong solely to Tenant.
5. RATIFICATION OF LEASE. Landlord and Tenant hereby confirm that the
Lease remains in full force and effect, unmodified except as amended in this
First Amendment.
In witness whereof, Landlord and Tenant have executed and delivered
this First Amendment as a sealed instrument as of the date first written above.
LANDLORD:
BALANCED CAPITAL LLC
By: /s/ Xxxxxx X. Brand By: /s/ Xxxxx Xxxxxxx
-------------------------- ---------------------------
Xxxxxx X. Brand, Manager Xxxxx Xxxxxxx, Manager
TENANT:
WORLDGATE COMMUNICATIONS, INC.
/s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
----------------------------- ---------------------------
Attest Name: Xxxxxxx X. Xxxx
Title: Vice President - Corporate Affairs
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease is made as of the 17th day of December
1998 by and between BALANCED CAPITAL LLC, a Pennsylvania limited liability
company ("Landlord") and WORLDGATE COMMUNICATIONS, INC., a corporation
("Tenant").
Whereas, Landlord and Tenant entered into an agreement dated October 7,
1998 and previously amended December 7, 1998 (collectively, the "Lease")
pursuant to which Landlord agreed to lease to Tenant, on the terms and
conditions set forth in the Lease, a building containing approximately 72,000
square feet of space located at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxxxx, and Landlord and Tenant desire to amend the Lease in certain
respects;
Now therefore, in consideration of the mutual promises contained in
this Amendment, and intending to be legally bound, Landlord and Tenant agree as
follows:
1. DEFINITIONS. Capitalized terms not otherwise defined in this
Amendment shall have the meaning given to such terms in the Lease. "GMAC
Mortgage" means the first mortgage on the Property which will be granted
concurrently with the acquisition of the Property, presently anticipated to
occur in December 1998, to secure the purchase money loan (the "GMAC Loan")
which will be used to acquire the Property. "GMAC Loan Documents" means the GMAC
Mortgage and the other documents evidencing and securing the GMAC Loan. "Lender"
means the then holder of the GMAC Mortgage and the other GMAC Loan Documents.
2. AMENDMENT OF PERMITTED USES. In Section 1 of the Lease, the
definition of Permitted Uses is hereby revised to read as follows:
PERMITTED USES: general office, engineering research and
development, assembly and testing of electronic parts, Channel
HyperLinking and WorldGate service operations.
3. SECURITY DEPOSIT. Subsection 36(c) is hereby amended to clarify
that the Tenant may at any time and from time to time replace a cash Security
Deposit with a Letter of Credit or a Letter of Credit Security Deposit with a
cash Security Deposit. In such event, Tenant shall give Landlord at least three
business days' notice that the form of Security Deposit will be changed, and in
the case of an exchange from cash to Letter of Credit, the notice shall be
accompanied by a draft of the proposed Letter of Credit for Landlord's review
for compliance with the requirements of Subsection 36(c). Landlord shall
cooperate with Tenant's efforts to arrange simultaneous exchange of the cash
Security Deposit for the approved Letter of Credit, or the
simultaneous surrender the Letter of Credit in exchange for the required cash
Security Deposit, provided that Landlord shall not at any time be without one or
the other form of Security Deposit.
4. AMENDMENT OF PURCHASE OPTION. Section 41 of the Lease, captioned
"Option to Purchase," is hereby amended to add the following new subsection (j):
(j) EARLY EXERCISE OF PURCHASE OPTION. If Tenant exercises the
Purchase Option and the settlement date for the Purchase Option (the
"Option Settlement"), as determined under subsection Section 41(b),
would occur prior to THE EARLIER OF February 15, 2002 or the date when
prepayment of the GMAC Loan is permitted under the terms of the GMAC
Loan Documents, then at Landlord's request the purchaser will either
(A) defer the Option Settlement until after the date when prepayment of
the GMAC Loan is permitted under the terms of the GMAC Loan Documents,
or (B) take title to the Property subject to the GMAC Loan Documents.
If the purchaser elects to take title subject to the GMAC Loan
Documents:
(1) The transfer will be subject to the approval of
the Lender, and Tenant will furnish such information as the Lender may
reasonably require to identify the purchaser and evaluate its
creditworthiness.
(2) At least thirty (30) days prior to the Option
Settlement Landlord will deliver to the purchaser (A) copies of the
GMAC Loan Documents certified as accurate and complete by the Landlord,
and (B) an estoppel signed by the Lender confirming the then
outstanding principal balance of the GMAC Loan, the amount of any other
charges that may be due and unpaid as of the settlement date, the
amount of any escrow funds (for insurance, taxes or otherwise) then
held by the Lender or its servicing agent, and further confirming that
there are then no uncured monetary defaults under the GMAC Loan
Documents and further that the Lender has not issued any notice of a
non-monetary default under the GMAC Loan Documents which remains
uncured.
(3) At the Option Settlement the seller and the
purchaser will sign and deliver an assignment and assumption of the
GMAC Loan Documents, pursuant to which purchaser will assume the
obligation to pay the GMAC Loan, in such form as may be required by the
Lender.
(4) At the Option Settlement, seller will pay any
additional fees and costs incurred because of the fact that the
Property is being transferred subject to the GMAC Loan (including
without limitation Lender's transfer fee). Accrued and unpaid charges
then due to the Lender will be paid by the seller, the seller will
receive a credit for escrow funds then held by Lender for use in
payment of costs of the Property (such as real estate taxes) and the
purchaser will receive credits against the Purchase Price for the then
outstanding principal balance of the GMAC Loan, and for seller's share
of interest on the GMAC Loan for the calendar month in which the Option
Settlement occurs.
5. RATIFICATION OF LEASE. Landlord and Tenant hereby confirm that the
Lease remains in full force and effect, unmodified except as amended in this
Second Amendment.
In witness whereof, Landlord and Tenant have executed and delivered
this Second Amendment as a sealed instrument as of the date first written above.
BALANCED CAPITAL LLC
By: /s/ Xxxxxx X. Brand By: /s/ Xxxxx Xxxxxxx
---------------------------- ----------------------------
Xxxxxx X. Brand, Manager Xxxxx Xxxxxxx, Manager
WORLDGATE COMMUNICATIONS, INC.
/s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ ----------------------------
Attest Name: Xxxxxxx X. Xxxx
Title: V.P.
