AMENDED AND RESTATED
OFFICE LEASE
BETWEEN
BELLEVUE ASSOCIATES, LANDLORD
AND
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, TENANT
PREMISES:
- ---------
PORTION OF BUILDING
SITUATED AT:
200 SOUTH BROAD STREET
PHILADELPHIA, PA 19102
AMENDED AND RESTATED OFFICE LEASE
THIS AMENDED AND RESTATED OFFICE LEASE (the "LEASE") is made effective
as of July 12, 1999, by and between BELLEVUE ASSOCIATES ("LANDLORD"), and
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST ("TENANT"), Landlord and Tenant having
the following notice addresses on the date of this Lease.
RECITALS
A. Landlord and Richard I. Rubin & Co., Inc. ("RIR") entered into that
certain Office Lease dated December 9, 1988 (the "LEASE 1") pursuant to which
RIR leased from Landlord approximately 19,487 rentable square feet of space
located on the third floor of the Building (defined herein).
B. Landlord and RIR subsequently entered into that certain Office Lease
dated June 30, 1989 (the "LEASE 2") pursuant to which RIR leased from Landlord
approximately 3,588 additional rentable square feet of space located on the
third floor of the Building.
C. Landlord and RIR entered into that certain Office Building Amendment
to Lease dated November 1, 1990 (the "1990 AMENDMENT") pursuant to which RIR
leased from Landlord approximately 4,989 additional rentable square feet of
space located on the third floor of the Building. The space covered by Lease 1,
Old Lease 2 and the 1990 Amendment constituted all of the rentable square feet
of space located on the third floor of the Building.
D. RIR, as sublandlord, and Strouse, Greenberg & Co., Inc. (which by
name change became known as The Rubin Organization) (hereinafter, "TRO"), as
subtenant, entered into that certain Sublease Agreement dated December 31, 1992
(the "SUBLEASE") pursuant to which TRO subleased from RIR all of the space
covered by Lease 1 (as amended by the 1990 Amendment and Lease 2).
E. Landlord and TRO entered into that certain Office Lease dated
September 1, 1993 (the "LEASE 3") pursuant to which TRO leased from Landlord
approximately 6,647 rentable square feet of space located on the fourth floor of
the Building.
F. Tenant is the successor in interest to TRO.
G. Subject to the conditions set forth herein, Landlord and Tenant
desire to amend and restate Lease 1, Lease 2 and Lease 3 (as each has been
amended from time to time) (i) to relocate a portion of and to expand the
Premises by moving tenant from the portion of the Premises it occupies on the
fourth floor of the Building to space located on the second floor of the
Building, (ii) to provide for certain improvements of the space located on the
second floor of the Building, and (iii) to adjust and amend the Term, Minimum
Rent and other terms of said leases.
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AGREEMENT
LANDLORD: BELLEVUE ASSOCIATES
c/o PREIT-RUBIN, Inc.
The Bellevue
200 South Broad Street
Philadelphia, PA 19102
Attention: General Counsel
TENANT: PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
The Bellevue
200 South Broad Street
Philadelphia, PA 19102
Attention: Jonathan B. Weller
WITH A COPY TO: Howard A. Blum, Esquire
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
1. FUNDAMENTAL LEASE PROVISIONS. Lease 1, Lease 2 and Lease 3, each as amended
from time to time, are hereby restated in their entirety by this Lease. Certain
Fundamental Lease Provisions are presented in this Section 1 and represent the
agreement of the parties hereto, subject to the further definition and
elaboration in the respective referenced Sections and elsewhere in the Lease:
A. Building: 200 South Broad Street
Philadelphia, PA 19102 (See Section 2)
B. Floors or Portions
Thereof Leased: The Third (3rd) floor and a portion of the Second (2nd)
floor of the Building (See Section 2)
C. Area of Premises: Approximately 39,485 rentable square feet (See Section 2)
plus approximately 296 rentable square feet
depicted on EXHIBIT "A" and located on the
fourth floor of the Building
D. Use: General office (as to the third floor space) (See Section 2)
and a telephone equipment room (as to the
fourth floor space)
E. Term:
(1) Commencement Date: July 12, 1999
(2) Length of Lease Term: ten (10) years. (See Section 3)
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F. Minimum Rent: $19.50 per rentable square foot per year, which
is $775,729.50 per year, at a rate of $64,644.13 per
month as provided herein.
G. Place of Rent Payments: Bellevue Associates
200 S. Broad Street, Sixth Floor
Philadelphia, PA 19102 (See Section 4.D)
H. Agent to Whom Rent
Payable: PREIT-RUBIN, Inc. (See Section 4.D)
I. Security Deposit: None. (See Section 4.H)
J. Base Year Operation &
Maintenance Charge: Calendar Year 1999. (See Section 6.B)
K. Tenant's OMC Percentage: 14.58% (See Section 6.B)
L. Base Year Taxes: Calendar Year 1999. (See Section 6.B)
M. Tenant's Tax Percentage: 14.58% (See Section 6.B)
References appearing in this Section 1 are to designate some of the other places
in this Lease where additional provisions applicable to the particular
Fundamental Lease Provisions appear. Each reference in this Lease to any of the
Fundamental Lease Provisions shall be construed to incorporate all of the terms
provided for under such provisions, and such provisions shall be read in
conjunction with all other provisions of this Lease applicable thereto. If there
is any conflict between any of the Fundamental Lease Provisions set forth in
this Section and any other provisions of this Lease, the latter shall control.
The listing in this Section 1 of monetary charges payable by Tenant shall not be
construed to be an exhaustive list of all monetary amounts payable by Tenant
under this Lease.
2. PREMISES; USE.
A. PREMISES. Landlord, for and in consideration of the rent
(hereinafter defined in subsection 4.D.) to be paid and the covenants and
agreements to be performed by Tenant does hereby demise and lease unto Tenant,
and Tenant hereby leases and takes from Landlord for the Term, at the rent and
upon the terms and conditions hereinafter set forth that space (the "PREMISES")
situated on the floor(s) of the Building and consisting of the square footage
identified and otherwise set forth in subsections 1.A., 1.B. and 1.C. (which
Premises is outlined on the diagram marked EXHIBIT "A" annexed hereto and made a
part hereof), together with the right, in common with other occupants of the
Building, to use the lobbies, hallways and other Common Area facilities.
B. [INTENTIONALLY DELETED.]
C. USE. The Premises shall be used for the purpose specified in
subsection 1.D. and no other purpose without the prior written consent of
Landlord. For the purpose of this Lease, the terms "square footage" or "square
feet" shall mean the square footage of the Premises as measured from the
exterior face of exterior walls and the exterior face of corridor walls, and the
center line of any walls Tenant shares with other tenants or occupants of the
Building, plus the product of the square footage of the Premises multiplied
by Tenant's proportionate share of the "COMMON AREAS" (as defined in subsection
30.B.) of the Building. Landlord and Tenant agree that the square footage of the
Premises set forth in subsection 1.C. is approximately accurate and shall be
used for the purpose of making all computations under this Lease except as
otherwise stated.
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3. TERM.
A. DURATION. The term of this Lease and Tenant's obligation to pay rent
hereunder shall commence upon the date set forth in Section 1.F ("COMMENCEMENT
DATE"). Said term shall continue from the Commencement Date for the period
specified in subsection 1.E.(2) plus, the partial month, if any, if the term
begins other then on the first day of any month, so that the term shall expire
on the last day of the month in which the above period ends, unless sooner
terminated as hereinafter provided or extended by the parties (the "TERM").
B. MEMORANDUM. When the Commencement Date has been established,
Landlord and Tenant shall execute and deliver an instrument in form satisfactory
to Landlord specifying the Commencement Date.
4. RENT.
A. MINIMUM RENT. The Tenant shall pay to Landlord as annual minimum
rent ("MINIMUM RENT") the sum set forth in subsection 1.F. payable in advance on
the first business day of each calendar month in equal monthly installments in
the sum specified in subsection 1.F. beginning on the July 12, 1999 (the "RENT
COMMENCEMENT DATE").
B. [INTENTIONALLY DELETED.]
C. PARTIAL MONTH. If the Term commences on a day other than the first
day of a calendar month, Tenant shall pay to Landlord on or before the Rent
Commencement Date a pro rata portion of the Minimum Rent to be based on the
number of days remaining in such partial month after the Commencement Date.
D. PAYMENTS. All payments of Minimum Rent, additional rent and any
other sums due to Landlord hereunder shall be due without demand, notice,
set-off, deduction or counterclaim at the office set forth in subsection 1.G. or
at such other place as Landlord may from time to time direct. All checks shall
be made payable to the person specified in subsection 1.H. or such other person
as Landlord may direct. All sums due to Landlord under this Lease whether or not
stated to be Minimum Rent or additional rent are herein collectively called
"RENT."
E. ACCEPTANCE OF PAYMENTS. If Landlord, at any time or times, shall
accept rent after the same shall become due and payable, such acceptance shall
not excuse any such delay upon subsequent occasions, or constitute, or be
construed as, a waiver of any of Landlord's rights or remedies hereunder.
F. ADDITIONAL RENT. Whenever under the terms of this Lease any sum is
required to be paid by Tenant in addition to the Minimum Rent herein reserved,
such additional sum so to be paid shall be deemed additional rent and if not
designated as "additional rent", then such sum shall nevertheless, at the option
of the Landlord if not paid when due, be deemed "additional rent" which shall be
collectible with any installment of Minimum Rent thereafter falling due
hereunder. Nothing hereunder contained shall be deemed to suspend or delay the
payment of any sum at the time the same became due and payable hereunder or
limit any other right or remedy of Landlord. Minimum Rent and additional rent
are something collectively referred to herein as "rent."
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G. LATE CHARGE. In the event that any sum due to Landlord under the
provisions of this Lease shall not be paid within ten (10) days after due,
Tenant shall, upon demand, pay as additional rent a late charge to Landlord of
$.05 for each dollar so overdue to defray Landlord's administrative expenses in
collecting and processing that sum.
H. SECURITY DEPOSIT. Upon the execution of this Lease, Landlord
acknowledges receipt from Tenant of the sum set forth in subsection 1.I. to be
held as collateral security for the payment of any rent payable by Tenant under
this Lease, and for the faithful performance of all other covenants and
agreements of Tenant hereunder. The amount of such deposit, without interest,
shall be repaid to Tenant after the termination of this Lease and any extension
thereof, provided Tenant shall have made all payments of all sums due Landlord
and performed all covenants and agreements hereunder. Upon any Event of Default
by Tenant hereunder, all or part of such deposit may, at Landlord's option, be
applied on account of the resulting deficiency and Tenant shall immediately
restore such deposit to its original sum. The deposit shall be deemed to be the
property of Landlord.
I. USE AND OCCUPANCY TAX. Tenant shall pay to Landlord any use and
occupancy tax (or its equivalent) imposed on the Premises. Landlord shall have
the same rights and remedies for the non-payment of such use and occupancy tax
that it has upon Tenant's failure to pay rent hereunder. Landlord agrees to pay
the sums collected by it to the appropriate governmental authorities in a timely
manner, and will be solely responsible to pay any penalties or interest
occasioned by Landlord's delay in remitting such sums.
5. DEFINITIONS: OPERATION AND MAINTENANCE CHARGE; TAXES.
In this Lease, the following terms shall have the meanings hereinafter
provided:
A. Operations and Maintenance Charge Sum ("OMC SUM") shall mean all
sums incurred (even if not yet payable) in connection with the operation and
maintenance of the Building as deemed by Landlord to be reasonable, appropriate
and in the best interests of the Building including, without limitation, sums
incurred for the following items: storm drainage, water (domestic and fire
protection) and sewer, electric, steam, gas, telephone and other utility
services and systems; heating, ventilating, air conditioning, plumbing,
electrical, fire detection and suppression, life safety, security protection,
illumination, vertical transportation, and other Building services and systems;
salaries, wages, benefits and other compensation to or for personnel engaged in
the cleaning, care, management or other operation and maintenance of the
Building and payments and other charges for taxes, contributions, assessments,
worker's compensation, unemployment compensation, health, accident and life
insurances and other impositions or charges related thereto; outfitting and
otherwise providing building service personnel; service, repair, replacement and
other maintenance to or of the Building floors, doors, walls ceilings, roofs,
windows, skylights and other elements, systems and amenities; charges for
utilities or utility services; rentals for provision of Building services; snow,
ice, trash and garbage removal and pest control; identification and directional
signs and other traffic control items; parking, loading and unloading areas and
other Common Areas, facilities or equipment; fire and other casualty, liability,
plate glass, theft, worker's compensation, pressure vessel and rent insurances;
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depreciation of machinery and other equipment for Building services and interior
and exterior Common Area finishes and amenities; janitorial services, cleaning
the property including maintenance of windows and other glass surfaces, Building
facade, sidewalks, parking, loading and unloading areas; sales, use excise taxes
and fees; management fees and charges; costs required by the application or
enforcement of federal, state and local statutes, codes, regulations and
rulings; modifications of the HVAC and other Building systems by which Landlord
provides Building services; the fair rental value of any office space in the
Building used as an office for the on-site property manager; legal fees and
other fees of consultants, engineers and other design professionals, appraisers,
accountants and auditors; gazebos, fountains, sculptures, art features, fencing,
screening and similar items located within or outside the Building, interior and
exterior planting, replanting and replacing flowers, shrubbery, plants trees and
other landscaping, awnings and other Building amenities; fees, licenses, permits
and charges by governmental and quasi-governmental bodies or agencies; supplies,
tools, reserve, parts, postage, deliveries, business machines and office
equipment; all other sums necessarily and reasonably incurred by Landlord in the
proper operation and maintenance of a first-class Building EXCLUDING, HOWEVER,
depreciation (other than as above specified), the cost of any utilities which
are directly metered or submetered to tenants of the Building, the cost of any
repair or replacement required of Landlord pursuant to the reconstruction
obligations of subsection 13.A., the expenses incurred in leasing or procuring
new tenants, legal expenses in enforcing the terms of any lease, interest or
amortization payments on any mortgage or mortgages, capital improvements
specifically for a tenant within such tenant's space (other than as specified
below). Additionally, if Landlord shall purchase any item of capital equipment
or make any capital expenditure as described above, then the costs for same
shall be amortized on a straight line basis beginning in the year of
installation and continuing for the useful life thereof, but not more than ten
(10) years, or such shorter time as may be hereinafter provided, with a per
annum interest factor equal to Two Hundred (200) basis points above the "Prime
Rate" announced by PNC Bank, Philadelphia, Pennsylvania, for the date any such
item is placed in service. The amount of amortization for such costs shall be
included in OMC Sum for each year to which the amortization relates. Tenant
agrees that the determination by Landlord's accountant of the useful life of the
subject of such capital expenditures shall be binding on Tenant. If Landlord
shall lease such item of capital equipment, then the rental or other operating
costs paid pursuant to such lease shall be included in the OMC Sum for each year
in which they are incurred. Notwithstanding the foregoing, as an alternative
cost recovery method, if Landlord shall effectuate savings in labor or
energy-related costs as a result of the installation of new devices or
equipment, then Landlord may elect to include up to the full amount of any such
savings in each year (beginning with the year in which the equipment is placed
in service) as an operating expense until Landlord has recovered thereby the
cost of installation of said devices or equipment and interest thereon as above
provided, even if the result of such application will result in the amortization
of such costs over a period shorter than the useful life of such installation.
Landlord shall notify Tenant in writing if Landlord elects to apply such savings
to the cost of such equipment and shall include a statement of the amount of
such savings in the OMC statement for each applicable year.
B. "TAXES" or "TAX" shall mean all taxes, assessments and governmental
charges, whether federal, state, county or municipal, including any special
services district fees or levies, and whether general or special, ordinary or
extraordinary, foreseen or unforeseen, imposed upon the Building (to the extent
allocable to the office portion of the Building), all computed in accordance
with the terms and conditions of this Lease, including the reasonable cost and
expenses (including attorney and appraisal fees) of contesting Taxes. It is
agreed between Landlord and Tenant that Taxes shall not include any taxes,
including income taxes (other than business privilege taxes and gross receipts
taxes), imposed on the gross or net income of Landlord from the operation of the
Building. It is further agreed between Landlord and Tenant that Taxes shall be
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allocable to the office portion of the Building by means of a written appraisal
of the Building to be prepared at Landlord's request. Additionally, in the event
that the Building or the uses thereof are substantially altered or modified at
any time during the Term or extension thereof so that the original allocation of
total Taxes assessed against the Building among the retail portion, office
portion, and hotel portion of the Building becomes inequitable, Landlord shall
equitably determine a reallocation of Taxes in light of such alteration or
modification. If at any time during the Term the present system of taxation of
property shall be changed or supplemented so that in lieu of or in addition to
the tax on property there shall be assessed on Landlord or the Building any tax
of any nature which is imposed in whole or in part, in substitution for or in
lieu of any tax which would otherwise constitute a Tax, such shall be deemed to
be included within the term Taxes, but only to the extent that the same would be
payable if the Building was the only property of Landlord.
C. "TENANT'S OMC PERCENTAGE" is that percentage specified in subsection
1.K.
D. "TENANT'S OMC" means the OMC Sum for a calendar year included within
the Term and any extension thereof, less the OMC Sum for the Base Year specified
in subsection 1.J., multiplied by Tenant's OMC Percentage.
E. "TENANT'S TAX PERCENTAGE" is that percentage specified in subsection
1.M.
F. "TENANT'S TAX CHARGE" means the Taxes for a calendar year included
within the Term or any extensions thereof, less the Base Year Taxes specified in
subsection 1.L., multiplied by Tenant's Tax Percentage.
G. "TAX YEAR" shall mean each calendar year, or such other period of
twelve (12) months, which may be duly adopted as the fiscal year for payment of
Taxes by the governmental unit in which the Building is located.
6. TENANT'S OMC AND TENANT'S TAX CHARGE.
A. ANNUAL ADJUSTMENT. During each calendar year or portion thereof
included in the Term and any extension thereof, Tenant shall pay Landlord as
additional rent Tenant's OMC and Tenant's Tax Charge.
B. PROCEDURES.
(1) During December of each calendar year, or as soon
thereafter as practicable, Landlord shall give Tenant written notice of its
estimate of the amounts of Tenant's OMC payable for the ensuing calendar year.
On or before the first day of each month during each calendar year, Tenant shall
pay to Landlord one-twelfth (1/12) of the amounts estimated as aforesaid,
provided that if such notice is not given in December, Tenant shall continue to
pay on the basis of one hundred three percent (103%) of the then applicable sums
of Tenant's OMC until the month after such notice is given. If at any time or
times it appears to Landlord that the sums payable under subsection 6.A. above
for the current calendar year will vary from its estimate by more than five
percent (5%), Landlord shall, by notice to Tenant, revise its estimate for such
year, and subsequent payments by Tenant for such year shall be based upon such
revised estimate.
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(2) If Taxes for any Tax Year occurring during the term of
this Lease shall be greater than the Base Year Taxes, Tenant shall pay to
Landlord as additional rent, an amount equal to Tenant's Tax Charge with respect
to said Tax Year. If less than a full twelve (12) month period of a Tax Year is
included within the term of this Lease, Tenant's Tax Charge shall be prorated on
a per diem basis for such partial Tax Year. Tenant's Tax Charge for each Tax
Year shall be paid as follows:
(a) After receipt of a bill for Taxes, Landlord shall
furnish Tenant a statement detailing the amount of the bill and the Base Year
Taxes. Within thirty (30) days following the receipt of such statement, Tenant
shall pay to Landlord the amount, if any, by which the Tenant's Tax Charge for
such Tax Year exceeds the total amount, if any, of payments made pursuant to
subsections (b) and (c) below on account of the Tenant's Tax Charge. Tenant's
obligations hereunder shall survive the expiration of the Term or termination of
the Lease.
(b) Notwithstanding the foregoing subsection (a), if
at any time after execution of this Lease, Landlord receives a bill for Taxes in
excess of the Base Year Taxes, Landlord may notify Tenant that Landlord elects
to receive payment in installments in advance as an estimate on account of
Tenant's Tax Charge or to increase installments presently being paid by Tenant
if Tenant is required to make monthly payments pursuant to subsection (c) below.
Landlord's notice shall be in writing and shall specify the amount due, or
estimated to become due, and the amount of each installment or increased
installment to be paid by Tenant. Payments in the amount of the installment (or
increase in installment) set forth in Landlord's notice shall be due monthly as
additional rent concurrently with payments of minimum rent beginning with such
first payment due after the date of Landlord's notice, and shall continue on the
first day of each month until and including the month in which Tenant makes
payment in full of Tenant's Tax Charge.
(c) After payment of the full amount of Tenant's Tax
Charge (less any payments made pursuant to subsection (b) above or this
subsection (c) on account of the Tax Charge) for any Tax Year, Tenant shall
continue to pay one-twelfth (1/12) of the Tax Charge monthly, together with
payments of minimum rent as an estimate and on account of the Tax Charge for the
following Tax Year, which payments shall continue until receipt by Tenant of a
statement which revises the amount of Tax Charge or receipt of a notice from
Landlord pursuant to subsection (b) above increasing the amount of monthly
estimated payments.
(3) Within ninety (90) days after the close of each calendar
year or as soon after such ninety (90) day period as practicable, Landlord shall
deliver to Tenant a statement of the adjustments to be made pursuant to
subsection 6.A. If on the basis of such statement Tenant owes sums less than the
payments for such calendar year previously made by Tenant on account of Tenant's
Tax Charge or Tenant's OMC, Landlord shall credit such excess to Tenant against
the next ensuing installments of Rent. If on the basis of such statement Tenant
owes sums more than the estimated payments for such calendar year previously
made by Tenant, on account of Tenant's Tax Charge or Tenant's OMC, Tenant shall
pay the deficiency to Landlord within thirty (30) days after delivery of the
statement. Tenant's obligations hereunder shall survive the expiration of the
Term or the termination of the Lease.
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(4) In determining Tenant's OMC payable pursuant to
subsection 6.A for any calendar year during the Term:
(a) if less than ninety-five percent (95%) of the
Building rentable area shall have been occupied by tenants and fully used by
them, at any time during the year, the OMC Sum shall be deemed to be an amount
equal to the OMC Sum which would normally be expected to be incurred had such
occupancy been ninety-five percent (95%) and had such full utilization been made
during the entire period; and,
(b) if Landlord is not furnishing any particular work
or service (and such work or service is by agreement to be furnished by a tenant
and the cost of which if furnished by Landlord would constitute an item within
the OMC Sum) then the OMC Sum shall be deemed to be increased by the sum for the
items which would reasonably have been incurred during such period by Landlord
if Landlord had at its own expense furnished such work or service to such
tenant.
(5) Notwithstanding anything contained in this Lease to the
contrary, in calculating the OMC Sum and/or Taxes, Landlord, in its sole
discretion, may make allocations of certain items between the office building
portion of the Building of which the Premises is a part and, if applicable, the
retail portion, and hotel portion, which calculations need not be based on
relative size or use.
7. IMPROVEMENT OF THE PREMISES.
A. Landlord's Construction Obligations. Landlord hereby agrees to
perform certain construction work in order to prepare the Premises for the
initial occupancy by Tenant ("Landlord's Work"). The nature and extent of such
Landlord's Work shall be set forth on construction drawings and specifications
prepared at the direction of Tenant and in accordance with Exhibit "C" hereof
(collectively, the "Final Plans") to be approved by Landlord and attached to the
Lease as Exhibit "C", subsequent to the date hereof. It is acknowledged that the
Final Plans will be based upon the preliminary "nickel" plan attached to this
Lease as Exhibit "D" ("Nickel Plan").
B. Costs of Plans/Landlord's Work. Landlord agrees to pay the costs of
completing the Landlord's Work in accordance with the Final Plans and the cost
of the preparation, modification and revision of all plans and specifications
for the Premises including the Nickel Plan, Final Plans, electrical, mechanical,
lighting and space design plans.
C. Access by Tenant. Landlord shall afford Tenant and its employee's,
agents and contractors access to the Premises prior to the Commencement Date, at
reasonable times and at Tenant's sole risk and expense, for purposes of
inspecting and verifying the performance of Landlord's Work. Tenant shall
inspect the performance of Landlord's Work regularly and diligently and shall
advise Landlord promptly of any objection in the performance of such Work.
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D. Alterations. Tenant shall not make any alterations, additions,
decorations or other improvements to the Premises or install any fixtures or
equipment thereto (collectively "Alterations"), without the Landlord's prior
written approval, which approval shall not be unreasonably withheld, delayed or
conditioned. All Alterations to the Premises shall be performed at Tenant's sole
cost and expense by Landlord or, at Landlord's option, by Tenant in accordance
with drawings and specifications prepared at Tenant's sole cost and expense,
which drawings and specifications shall be consistent with the standards
applicable thereto set forth in Exhibit "D" attached hereto. So long as Tenant
is not in default hereunder, Tenant shall have the right with the consent of
Landlord, not to be unreasonably withheld, but not the obligation, to remove any
of said Alterations which constitute trade fixtures during and at the expiration
of the Term and any extension thereof, provided that Tenant repairs any damage
caused by said removal. All of the Alterations remaining on the Premises after
the date on which the Term ends, or at such sooner termination date, shall
become the property of Landlord. In doing any work of installation, removal,
alteration or relocation, Tenant shall not harm the Premises or the Building and
shall repair all damage or injury that may occur to the Premises or the Building
in connection with such work and shall otherwise comply with Exhibit "D"
attached hereto. Tenant agrees in doing any such work in or about the Premises
to engage only such labor as will not conflict with or cause strikes or other
labor disturbances among the Building service employees. Any contractors
employed by Tenant for such work shall comply with the requirements of Exhibit
"D" annexed hereto and hereby made a part hereof and shall further be approved
by Landlord in writing before the commencement of such work, but Landlord shall
not unreasonably withhold its approval or consent. In all events all such
contractors shall be required to employ only union labor in the performance of
such work, carry worker's compensation insurance, public liability insurance and
property damage insurance in amounts, form and content and with companies
satisfactory to Landlord. Prior to the commencement by Tenant of any work as set
forth in this subsection 7.D., Tenant must obtain, at its sole cost and expense,
all necessary permits, authorizations, licenses and other approvals required by
the various governmental authorities. Upon completion of any such work, Tenant
shall pay to Landlord an amount equal to five percent (5%) of the cost of such
work, to reimburse Landlord for the cost of coordination and final inspection of
the work.
E. Liens. Prior to Tenant performing any construction or other work to,
on or about the Premises for which a lien or claim could be filed against
Landlord, the Premises, the Building or Landlord's interest therein, Tenant
shall have its contractor execute a Waiver of Liens satisfactory to Landlord and
provide Landlord with the original of the same. Landlord shall file such Waiver
of Liens and Tenant shall reimburse Landlord for the cost of doing so. Tenant
shall not start any work in the Premises until Landlord has advised Tenant that
such Waiver of Liens has been filed. Notwithstanding the foregoing, if any
mechanics' or other lien or claim shall be filed against Landlord, the Premises,
the Building or Landlord's interest therein purporting to be for labor or
material furnished or to be furnished at the request of Tenant, then Tenant
shall, at its sole cost and expense cause same to be discharged by payment, bond
or otherwise within thirty (30) days after the filing thereof. If Tenant shall
fail to cause same to be discharged of record within such thirty (30) day
period, Landlord may cause same to be discharged by payment, bond or otherwise,
without investigation as to the validity thereof or as to any counterclaims,
offsets or defenses thereto. Tenant shall defend, indemnify and hold Landlord
harmless against any and all claims, costs, damages, liabilities and expenses
(including reasonable attorneys' fees) which may be brought or imposed against
or incurred by Landlord by reason of any such lien or claim or the discharge
thereof. Landlord and Tenant acknowledge that all Alterations performed by
Tenant in the Premises are for the benefit of Tenant only and not for the
immediate use and benefit of Landlord and no consent by Landlord to such work
shall be deemed a consent to subject the Building, the Premises or Landlord's
interest in either to liability for any mechanic's lien relating to such
Alterations.
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F. Condition. Tenant acknowledges and agrees that, except as expressly
set forth in this Lease, there have been no representations or warranties made
by or on behalf of Landlord with respect to the Premises or the Building or with
respect to the suitability of either for the conduct of Tenant's business. The
taking of possession of the Premises by Tenant shall conclusively establish that
the Premises and the Building were at such time substantially completed and,
except as set forth in Section 3.B. hereof, in satisfactory condition, order and
repair.
G. Tenant Contractors. Any work permitted to be completed by, or at the
direction of Tenant hereunder shall be subject to the provisions of Exhibit "D"
hereof.
8. BUILDING SERVICES. Landlord shall provide, within its standards for each
item, the following services and facilities ("BUILDING SERVICES"):
A. HVAC. Heating, ventilation and air conditioning ("HVAC"), Monday to
Friday from 8:00 A.M. to 6:00 P.M. and Saturdays from 8:00 A.M. to 1:00 P.M.
(excluding, however, all federal, state and municipal holidays). The cost of
HVAC service after the foregoing time periods shall be paid by Tenant as
additional rent. Tenant agrees to cooperate fully with Landlord and any
governmental agency regulating such matters as maximum and minimum temperature
or energy conservation matters, and to abide by all the regulations and
requirements which Landlord may reasonably prescribe for the proper functioning
and protection of the HVAC systems. Such regulations and requirements include a
prohibition against the use of the Premises or equipment or fixtures which would
generate heat from loads in excess of four (4) watts per usable square foot of
total connected loan without the prior consent of Landlord, which consent may be
withheld unless Tenant reimburses Landlord for all costs and expenses relating
to the installation and supply of supplemental HVAC and electrical systems;
B. ELECTRICITY. Electric current for (1) Building standard level of
illumination using standard fixtures of Landlord's choice; and (2) normal small
business machines connected to Building Standard 120-volt single phase outlets
during the normal hours of operation set forth in subsection 8.A.; however,
Landlord's agreement to furnish electricity does not include electricity in
excess of four (4) watts per usable square foot for any use, equipment or
fixture requiring a greater voltage than specified in this subsection 8.B.(2).
Such additional electrical service will be furnished, if reasonably available,
upon Tenant's tendering all costs of installation, including wiring and separate
metering, and agreeing in writing to pay the cost of electricity and such
service as additional rent. Additionally, the cost of replacement light bulbs,
tubes, lamps and ballasts, plus the labor cost for such replacement shall be
paid by Tenant as additional rent ("LIGHTING EXPENSE"). It is acknowledged that
the Lighting Expense shall not be included in the OMC Sum.
C. ANCILLARY MAINTENANCE:
(1) Maintenance of service of the public toilet rooms in the
Building;
(2) Maintenance of Building standard door hardware installed
in the Premises by Landlord;
(3) Maintenance of floor coverings in the Common Area;
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(4) Cleaning of outside and inside of exterior window panes;
and
(5) Cleaning and maintenance of Common Areas of the Building
and the Garage.
D. ELEVATORS. Elevator service during the Building's business days and
hours, and service via at least one (1) car at all other times.
E. JANITORIAL. Janitor service, including cleaning of space, dusting of
furniture and vacuuming, as described in EXHIBIT "F" attached hereto. Tenant
shall reimburse Landlord for all additional cleaning expenses incurred,
including, without limitation, for garbage and trash removal expenses, over and
above the normal cleaning and other janitorial service provided by Landlord due
to the presence of an eating area within the Premises; the installation of food
and beverage dispensing machines or otherwise.
F. WATER. Hot and cold water for lavatory purposes.
9. LIMITATION REGARDING SERVICES. Landlord does not warrant that the Building
Services specified in Section 8 hereof shall be free from any slow-down,
interruption or stoppage pursuant to voluntary agreement by and between Landlord
and governmental bodies and regulatory agencies, or caused by the maintenance,
repair, substitution, renewal, replacement or improvements or any of the
equipment involved in the furnishing of any such Building Services, or caused by
changes of services, alterations, strikes, lockouts, labor controversies, fuel
shortages, accidents, acts of God or the elements or any other cause whatsoever.
Specifically, no such slow-down shall be construed as an eviction, actual or
constructive, of Tenant, nor shall same cause any abatement of rent payable
hereunder or in any manner or for any purpose relieve Tenant from any of its
obligations hereunder. In no event shall Landlord be liable for damage to
persons or property or be in default hereunder as a result of such slow-down,
interruption or stoppage. Notwithstanding anything to the contrary in this
Lease, if: (a) any services or utilities provided by Landlord are interrupted or
discontinued for reasons or causes directly within the Landlord's control, and
Tenant is unable to use and ceases to use the Premises as a result of such
interruption or discontinuance, and (b) Tenant shall have given written notice
respecting such interruption or discontinuance to Landlord, and Landlord shall
have failed to cure such interruption or discontinuance within five (5)
consecutive business days after receiving such notice, Rent hereunder shall
thereafter be abated until such time as such services or utilities are restored.
10. CARE OF PREMISES.
A. LANDLORD MAINTENANCE. Landlord shall make, at its sole cost and
expense (except to the extent included in the OMC Sum), all repairs necessary to
maintain the plumbing, HVAC and electrical systems, windows, floors and all
other Building Standard items which constitute a part of the Premises and are
installed or furnished by Landlord. Landlord shall not be obligated for any of
such repairs until the expiration of a reasonable period of time after written
notice from Tenant that such repair is needed. In no event shall Landlord be
obligated under this Section 10 to repair Tenant's personal property or any
damage caused by any act, omission, accident or negligence of the Tenant or its
invitees or subtenants. Landlord shall not be liable by reason of any damage or
injury to or interference with Tenant's business arising from any repairs,
alterations, additions, improvements or other work, in accordance with this
Lease in or to the Premises or the Building or to any appurtenances or equipment
therein. Landlord shall interfere as little as reasonably practicable with the
conduct of Tenant's business. There shall be no abatement of rent because of
such repairs or alterations, additions, improvements or other work, except as
provided in Section 13 hereof.
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B. TENANT MAINTENANCE. Except for repairs which Landlord is obligated
to make under subsection 10.A., Tenant shall perform all work, at Tenant's sole
cost and expense, necessary to maintain the Premises and shall keep the Premises
and the fixtures therein in good, clean, neat and orderly condition. All such
work shall be in quality at least equal to the original work and installations.
If the Tenant refuses or neglects to do such work, or fails to diligently
prosecute the same to completion after written notice to Tenant of the need
therefor, Landlord may do such work at the sole cost and expense of Tenant and
such cost and expense shall be collectible as additional rent, together with a
ten percent (10%) supervisory charge.
11. NEGATIVE COVENANTS OF TENANT. Tenant agrees that it will not do or suffer to
be done any act, matter or thing objectionable to the fire and casualty
insurance companies whereby the fire and casualty insurance and other insurance
now in force or hereafter to be placed on the Premises or the Building (or any
portions thereof) shall become void or suspended, or whereby the same shall be
rated as a more hazardous risk than at the Commencement Date. In case of a
breach of this covenant, in addition to all other remedies of Landlord
hereunder, Tenant agrees to pay to Landlord as additional rent any and all
increases in premiums on insurance carried by Landlord on the Premises or the
Building (or any portions thereof) so caused by Tenant. Tenant shall not commit
or allow to be committed any waste upon the Premises or any public or private
nuisance or other act or thing which disturbs the quiet enjoyment of any other
occupant of the Building. Tenant shall not without the prior written consent of
Landlord install any equipment, machinery or fixtures which will overload the
Building or any portion thereof or which will cause any substantial noise,
vibration or fumes. If any of Tenant's office machines and equipment should
create noise, vibration, fumes or otherwise disturb the quiet enjoyment of any
other occupant in the Building, Tenant shall provide adequate insulation or take
such other action as may be necessary to eliminate the disturbance. Further,
Tenant will not permit foreign substances to be thrown within any laboratories
contained within the Premises; will not place trash or refuse or other articles
in any halls or Common Areas; will not ship or receive articles outside of
designated loading and receiving areas and/or times.
12. SUBLETTING AND ASSIGNING.
A. GENERAL RESTRICTION. Except as expressly permitted pursuant to this
Section 12, Tenant shall not, without the prior written consent of Landlord,
assign or hypothecate this Lease or any interest herein or sublet the Premises
or any part thereof. Any of the foregoing acts without such consent shall be
void and shall, at the option of Landlord, terminate this Lease. The Lease shall
not, nor shall any interest herein, be assignable as to the interest of Tenant
by operation of law without the written consent of Landlord.
B. CONSENT. If, at any time or from time to time during the Term and
any extensions thereof, Tenant desires to sublet all or any part of the
Premises, or assign this Lease, Tenant shall give written notice to Landlord
thereof, which notice shall contain the name, address and description of the
business of the proposed assignee or subtenant, its most recent financial
statement and other evidence of financial responsibility, its intended use of
the Premises, and the terms and conditions of the proposed assignment or
subletting. Landlord shall have the option, exercisable by notice given to
Tenant within thirty (30) days after receipt of Tenant's notice of reacquiring
the portion of the Premises proposed to be sublet or assigned and terminating
the Lease with respect thereto. If Landlord does not exercise such option,
provided that Tenant is not in default, Tenant shall be free to sublet such
space or assign this Lease to such proposed assignee or subtenant, subject to
the following:
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(1) the consent of Landlord, it being understood and agreed by
the parties hereto that it will not be unreasonable for Landlord to withhold
consent if the reputation, financial responsibility, or business of a proposed
assignee or subtenant is unsatisfactory to Landlord, or if Landlord deems such
business to not be consistent with the other occupants in the Building, or if
the intended use by the proposed assignee or subtenant conflicts with any
commitment made by Landlord to any other occupant in the Building;
(2) if the space is not subleased or assigned within thirty
(30) days from the expiration of Landlord's option as set forth above, or any
subsequent option as provided in this subsection 12.B.(2), Tenant shall, prior
to entering into a sublease or an assignment of said space, once again give
Landlord written notice and Landlord shall have thirty (30) days after the
receipt thereof of reacquiring that portion of the Premises and terminating the
Lease with respect thereto;
(3) no sublease or assignment shall be valid and no subtenant
or assignee shall take possession of the space subleased or assigned until an
executed counterpart of agreement of sublease or assignment has been delivered
to and approved by Landlord;
(4) no subtenant or assignee shall have a right further to
sublet or assign this Lease;
(5) any sums or other economic consideration received by
Tenant as a result of such subletting or assignment whether denominated rentals
under the sublease or otherwise, which exceed, in the aggregate, the total sums
which Tenant is obligated to pay Landlord under this Lease (pro-rated to reflect
obligations allocable to that portion of the Premises subject to such sublease
or assignment) shall be payable to Landlord as additional rent under this Lease
without affecting or reducing any other obligation of Tenant hereunder;
(6) such assignee 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 contained in this Lease and no such assignment shall be binding upon
Landlord unless the assignee shall deliver to Landlord an agreement acceptable
to Landlord containing a covenant of assumption by the assignee; and
(7) Tenant's payment to Landlord, on demand, of Landlord's
reasonable costs, including attorney's fees, in responding to any requests by
Tenant for Landlord to consent.
C. FUTURE COMPLIANCE. Regardless of Landlord's consent, no subletting
or assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment or subletting shall not be deemed consent to any
subsequent assignment or subletting. In the Event of Default by any assignee of
Tenant or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against such assignee or successor. Landlord may consent to subsequent
assignment or subletting or may execute amendments or modifications to this
Lease with assignees of Tenant without notifying Tenant or any successor of
Tenant, and without obtaining its or their consent thereto and such action shall
not relieve Tenant of liability under this Lease, except as set forth above.
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D. OTHER ASSIGNMENTS OR SUBLETTINGS.
(1) If Tenant is a corporation, any dissolution, liquidation,
merger, consolidation or other reorganization of such corporation or any
transfer of a controlling percentage of the corporate stock of Tenant (whether
in a single transaction or cumulatively) shall constitute an assignment of this
Lease for all purposes of this Section 12. This subsection 12.D.(1) shall not
apply whenever Tenant is a corporation, the outstanding voting stock of which is
listed or traded on a recognized securities exchange.
(2) If Tenant is a partnership and if, at any time, during the
Term or any extension thereof the person or persons who, at the time of the
execution of this Lease, own the partners' interest cease to own the partners'
interest (except as a result of transfers by bequest or inheritance), such
cessation of ownership shall constitute as assignment of this Lease for all
purposes of this Section 12.
13. FIRE OR OTHER CASUALTY.
A. GENERAL. Subject to the provisions of this subsection 13.A. and
subsections 13.B. and 13.C, if the Premises are damaged by fire or other
casualty, the damaged areas shall be repaired by and at the expense of Landlord
to at least as good a condition as that which existed immediately prior to such
damage, (i.e. the Landlord's Work) provided that Landlord receives adequate
insurance proceeds including without limitation, the proceeds of the "LEASEHOLD
IMPROVEMENT INSURANCE" (as hereinafter defined). In no event shall the Landlord
be obligated to repair or restore to a condition in excess of that required by
Landlord's Work. The rent until such repairs shall be made shall be apportioned
from the date of such fire or other casualty according to the part of the
Premises which is usable by Tenant. Landlord agrees to repair such damage within
a reasonable period of time after receipt from Tenant of written notice of such
damage. Landlord's obligation to repair as aforesaid is subject to any delays
caused by Acts of God, labor strikes or other events beyond Landlord's control,
including without limitation, the failure of any mortgagee to release insurance
proceeds to Landlord sufficient to pay the costs of any such repairs and
Landlord's receipt of the proceeds of the Leasehold Improvement Insurance.
Landlord shall not be liable for any inconvenience or annoyance to Tenant or
injury to the business of Tenant resulting in any way from such damage or the
repair thereof. Tenant acknowledges notice that (1) Landlord shall not obtain
insurance of any kind on Tenant's furniture, furnishings, equipment or fixtures,
alterations, improvements and additions, (2) it is Tenant's obligation to obtain
such insurance at Tenant's sole cost and expense, and (3) Landlord shall not be
obligated to repair any damage thereto, replace the same or otherwise do any
work thereto except as set forth in this subsection 13.A. with respect to those
improvements insured with the Leasehold Improvement Insurance.
B. RECONSTRUCTION. If, in the sole opinion of Landlord, (1) the
Premises are rendered substantially untenantable by reason of such fire or other
casualty, or (2) twenty percent (20%) or more of the Premises is damaged by said
fire or other casualty and less than six (6) months would remain of the Term or
any extension thereof upon completion of the required repairs thereto, Landlord
shall have the right, to be exercised by notice in writing delivered to Tenant
within thirty (30) days from and after such occurrence, to elect not to repair
the Premises and, in such event, this Lease, the Term and the tenancy hereby
created shall cease as of the date of such occurrence, the rent to be adjusted
as of such date.
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C. SUBSTANTIAL DAMAGE. If the Building, in the sole opinion of the
Landlord, shall be substantially damaged by fire or other casualty (regardless
of whether or not the Premises were damaged by such occurrence), Landlord shall
have the right, to be exercised by notice in writing delivered to Tenant within
sixty (60) days from and after such occurrence, to terminate this Lease and, in
such event, this Lease, the Term and the tenancy hereby created shall cease as
of the date of such termination unless terminated as of the date of such
occurrence in accordance with subsection 13.B hereof, the rent to be adjusted as
of the date of such termination.
D. CONTRIBUTION. Anything in this Section 13 to the contrary
notwithstanding, if the damage resulted from or was contributed directly or
indirectly by the fault, neglect or other conduct of Tenant or its subtenants or
invitees, there shall be no abatement of rent except and to the extent Landlord
received proceeds from Landlord's rental income insurance policy, if any, to
compensate Landlord for loss of rent.
14. LIABILITY.
A. DAMAGE IN GENERAL. Landlord, Agent and their respective agents,
servants, and employees shall not be liable for, and Tenant hereby releases and
relieves Landlord, Agent and their respective agents, servants, and employees
from, all liability in connection with any and all loss of life, personal and
bodily injury, damage to or loss of property, consequential damages loss or
interruption of business occurring to Tenant, subtenants, invitees or any other
person in or about or arising out of the Premises from, without limitation, (1)
any fire, other casualty, accident, occurrence or condition in or upon the
Premises or the Building; (2) any defect in or failure of: (a) plumbing,
sprinkler, electrical, HVAC systems, or any other equipment or systems of the
Premises or the Building, and (b) the vertical transportation, stairways,
railings or walkways of the Building; (3) any steam, fuel, oil, water, rain or
snow that may leak into, issue or flow from any part of the Premises or the
Building from the drains, pipes or plumbing, sewer or other installation of
same, or from any other place or quarter; (4) the breaking or disrepair of any
installations, equipment and other systems; (5) the falling of any fixture or
well or ceiling materials; (6) broken glass; (7) latent or patent defects; (8)
the exercise of any rights by Landlord or Agent under the terms and conditions
of this Lease; (9) any acts or omissions of the other tenants or occupants of
the Building or of nearby buildings; (10) any acts or omissions of other
persons; (11) theft, Act of God, public enemy, injunction, riot, strike,
insurrection, war, court order, or any order of any governmental authorities
having jurisdiction over the Premises. The generality of the foregoing
notwithstanding, Tenant's release and relief of Landlord pursuant to this
Section shall not apply where such loss of life, personal and bodily injury,
damage to or loss of property, consequential damages loss or interruption of
business Landlord's is caused by the negligence or other wrongful act or
omission on the part of Landlord or any of its agents, contractors,
subcontractors, servants, employees, subtenants or licensees.
B. INDEMNITY. Tenant shall defend, indemnify and hold harmless
Landlord, Agent and their respective agents and employees from and against all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable attorneys' fees, which may be imposed upon or
incurred by or asserted by reason of any of the following which shall occur
during the Term, or during any period of time prior to the Commencement Date
when Tenant may have been given access to or possession of all or any portion of
the Premises:
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(1) any work or act done in, on or about the Premises or any
part thereof at the direction of Tenant, its agents, contractors,
subcontractors, servants, employees, licensees or invitees, unless such work or
act is done or performed by Landlord or its agents or employees;
(2) any negligence or other wrongful act or omission on the
part of Tenant or any of its agents, contractors, subcontractors, servants,
employees, subtenants, licensees or invitees;
(3) Tenant's use and occupancy of the Premises and/or any
accident, injury or damage to any person or property occurring in, on or about
the Premises or any part thereof unless caused by the negligence of Landlord,
its employees or agents; and
(4) any failure on the part of Tenant to perform or comply
with any of the covenants, agreements, terms, provisions, conditions or
limitations contained in this Lease on its part to be performed or complied
with.
Landlord shall defend, indemnify and hold harmless Tenant and its
agents and employees from and against all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including reasonable attorneys'
fees, which may be imposed upon or incurred by or asserted by reason of any of
the following which shall occur during the Term:
(1) any work or act done in, on or about the Building outside
of the Premises at the direction of Landlord, its agents, contractors,
subcontractors, servants, employees or licensees, unless such work or act is
done or performed by Tenant or its agents, contractors, subcontractors,
servants, employees, licensees or invitees;
(2) any negligence or other wrongful act or omission on the
part of Landlord or any of its agents, contractors, subcontractors, servants,
employees, subtenants or licensees;
(3) any accident, injury or damage to any person or property
occurring in, on or about the Building outside of the Premises unless caused by
the negligence or other wrongful act or omission of Tenant or its agents,
contractors, subcontractors, servants, employees, licensees or invitees;
(4) any failure on the part of Landlord to perform or comply
with any of the covenants, agreements, terms, provisions, conditions or
limitations contained in this Lease on its part to be performed or complied
with.
The aforesaid indemnity obligations shall survive the expiration of the Term or
the termination of the Lease.
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15. INSURANCE.
A. INSURANCE REQUIREMENTS. During the Term and any extension thereof,
Tenant shall obtain and maintain and promptly pay all premiums for the following
types of insurance in the amounts specified and in the form heretofore provided
for:
(1) Public Liability and Property Damage. General Public
Liability Insurance covering the Premises and Tenant's use thereof against
claims for bodily or personal injury or death, and property damage occurring
upon, in or about the Premises, such insurance to afford protection to the limit
of not less than $3,000,000.00 combined single limit in respect of injury or
death to any number of persons arising out of any one occurrence. The insurance
coverage required under this Section shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 14. The general
aggregate limits under the General Public Liability Insurance policy or policies
must apply separately to the Premises and to tenant's use thereof. Accordingly,
if Tenant obtains General Public Liability Insurance hereunder in the Commercial
General Liability form of policies, or its equivalent as determined by Landlord,
Tenant shall also obtain Insurance Services Office ("ISO") Endorsement
CG-25-04-11-85, Amendment-Aggregate Limit of Insurance (Per Location) or its
equivalent as determined by Landlord (the "ENDORSEMENT"). The certificate of
insurance evidencing the Commercial General Liability form of policies and the
Endorsement shall specify on the face thereof that the limits of such policies
apply separately to the Premises.
(2) Tenant Leasehold Improvements and Property. Insurance
covering: (a) all leasehold improvements in the Premises (such insurance is
hereinafter referred to as the "LEASEHOLD IMPROVEMENT Insurance"); (b) all
Tenant's leasehold improvements performed by, or at the direction of Tenant
including heating, ventilating and air conditioning equipment and other
alterations and additions made by Tenant pursuant to this Lease; and (c) trade
fixtures, merchandise and personal property from time to time in, on or upon the
Premises. All such insurance coverage shall be in amounts not less than one
hundred percent (100%) of the full replacement cost from time to time during the
Term, providing protection against perils included within the standard state
form of fire and extended coverage insurance policy, together with insurance
against sprinkler damage, vandalism and malicious mischief. The policy required
by subsection (a) above shall name Landlord as loss Payee. All other policy
proceeds from insurance coverage carried by Tenant pursuant to (b) and (c) above
shall be held in trust by Tenant's insurance company for the repair,
reconstruction and restoration or replacement of the property damaged or
destroyed unless this Lease shall cease and terminate under the provisions of
Article 13.
(3) Workers' Compensation and Employer's Liability. Workers'
Compensation and Employer's Liability insurance affording statutory coverage and
containing statutory limits with the Employer's Liability portion thereof to
have minimum limits of $1,000,000.00.
B. ADDITIONAL REQUIREMENTS.
All policies of insurance provided for in this Section 15
shall be issued in form acceptable to Landlord by insurance companies with a
financial size of not less than A+ as rated in the most current available
"BEST'S INSURANCE REPORTS," and qualified to do business in the state in which
Landlord's Building is located. Each and every such policy:
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(1) Except for Worker's Compensation, Employer's Liability
insurance, and casualty insurance covering Tenant's personal property, furniture
and equipment shall be issued in the name of Tenant with Landlord and Agent and
Landlord's mortgagee, if requested, as additional insureds and any other parties
in interest from time to time designated in writing by notice from Landlord to
Tenant;
(2) Except for Worker's Compensation, Employer's Liability
insurance, and casualty insurance covering Tenant's personal property, furniture
and equipment shall be for the mutual and joint benefit and protection of
Landlord and Tenant and any such other parties in interest;
(3) shall (or a certificate thereof shall) be delivered to
each of Landlord and any such other parties in interest within ten (l0) days
after delivery of possession of the Premises to Tenant and thereafter within
thirty (30) days prior to the expiration of each such policy, and, as often as
any such policy shall expire or terminate. Renewal or additional policies shall
be procured and maintained by Tenant in like manner and to like extent;
(4) shall contain a provision that the insurer will give to
Landlord and such other parties in interest at least thirty (30) days notice in
writing in advance of any material change, cancellation, termination or lapse,
or the effective date of any reduction in the amounts of insurance; and
(5) shall be written as a primary policy which does not
contribute to and is not in excess of coverage which Landlord may carry.
C. BLANKET INSURANCE. Any insurance provided for in this Section may be
maintained by means of a policy or policies of blanket insurance, covering
additional items or locations or insureds, provided, however, that:
(1) Except for Worker's Compensation, Employer's Liability
insurance, and casualty insurance covering Tenant's personal property, furniture
and equipment, Landlord and any other parties in interest from time to time
designated by Landlord to Tenant shall be named as an additional insured
thereunder as its interest may appear;
(2) the coverage afforded Landlord and any such other parties
in interest will not be reduced or diminished by reason of the use of such
blanket policy of insurance;
(3) any such policy or policies except any covering the risks
referred to in subsection 15.A.(1) shall specify therein (or Tenant shall
furnish Landlord with a written statement from the insurers under such policy
specifying) the amount of the total insurance allocated to the Tenant's
improvements and property more specifically detailed in subsection 15.A.(2); and
(4) the requirements set forth in this Section are otherwise
satisfied.
D. INSPECTION OF POLICIES. Tenant agrees to permit Landlord at all
reasonable times to inspect the policies of insurance of Tenant with respect to
the Premises for which policies or copies thereof are not delivered to Landlord.
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E. LANDLORD INSURANCE. During the term of this Lease, Landlord
covenants that it will maintain comprehensive general liability insurance with
broad form extended coverage with a minimum coverage of combined single limit of
Three Million Dollars ($3,000,000). In addition, Landlord shall maintain and
keep in effect throughout the term of this Lease insurance against loss or
damage to the Building by fire or such other casualties as may be included
within all-risk insurance, such insurance to be in an amount equal to the full
replacement value of the Building. Upon Tenant's written request, Landlord shall
provide Tenant with current certificates evidencing these policies.
F. WAIVER. Each party hereby waives any and all rights of recovery
against the other party hereto and its officers, agents, employees, or
representatives, and Tenant hereby waives any rights it may have against any
mortgagee, for the loss, damage, or injury to property arising from any event
which is covered by insurance against fire, vandalism, malicious mischief, and
extended coverage, and such other perils as are from time to time included in
the "all risk" insurance policy(ies) carried by Landlord and Tenant pursuant to
this Section 15 provided that such waiver shall apply only to the extent of any
recovery by the injured party under such insurance. In the event the other party
is a self-insurer (as may be permitted herein), such waiver shall be to the
limit of that insurance required to be carried hereunder. Each party hereto, on
behalf of its respective insurance companies hereby waives, to the extent of any
recovery under any such insurance policies, any right of subrogation that one
may have against the other, and Tenant on behalf of its insurance companies,
hereby waives any right of subrogation which such insurer may have against any
mortgagee. Each party hereto shall cause its respective insurance policies to
contain endorsements evidencing such waivers of subrogation. The foregoing
releases and waivers of subrogation shall be operative only so long as same
shall neither preclude the obtaining of insurance nor diminish, reduce or impair
the liability of any insurer. In the event that a waiver of subrogation cannot
be obtained, the other party is relieved of the obligation to obtain a waiver of
subrogation rights with respect to the particular insurance involved.
16. EMINENT DOMAIN.
A. TOTAL OR PARTIAL TAKING. If the whole of the Premises shall be
condemned or taken either permanently or temporarily for any public or
quasi-public use or purpose, under any statute or by right of eminent domain, or
by private purchase in lieu thereof, then, in such event, the Term shall cease
and terminate from the date when possession is taken thereunder pursuant to such
proceeding or purchase. The rent shall be adjusted as of the time of such
termination and any rent paid for the period thereafter shall be refunded. If a
portion only of the Premises or a portion of the Building containing same shall
so be taken (even though the Premises may not have been affected by the taking
of some other portion of the Building containing same), Landlord may elect to
terminate this Lease from the date when possession is taken thereunder pursuant
to such proceeding or purchase or Landlord may elect to repair and restore, at
its own expense, the portion not taken and thereafter the rent shall be reduced
proportionate to the portion of the Premises taken.
B. AWARD. In the event of any total or partial taking of the Premises
or the Building, Landlord shall be entitled to receive the entire award in any
such proceeding and Tenant hereby assigns any and all right, title and interest
or Tenant now or hereafter arising in or to any such award or any part thereof
and hereby waives all rights against Landlord and the condemning authority,
except that Tenant shall have the right to claim and prove and to receive any
award which may be made to Tenant, if any, specifically for damages for loss of
good will, movable trade fixtures, equipment and moving expenses, provided that
such award in no way diminishes or adversely affects Landlord's award.
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17. DEFAULT AND REMEDIES.
A. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute a material breach of the Lease and default by Tenant under the Lease
(herein called an "EVENT OF DEFAULT"):
(1) failure of Tenant to take possession of the Premises
within fifteen (15) days after written notice to Tenant that the same are
substantially completed or ready for occupancy;
(2) the vacation, desertion or other abandonment of the
Premises by Tenant; or Tenant's removal or manifestation of an intention to
remove its property from the Premises;
(3) a failure by Tenant to pay, when due, any installment of
rent hereunder or any such other sum herein required to be paid by Tenant to
Landlord and the continuation of such failure for five (5) days after written
notice thereof to Tenant; provided that Landlord shall not be obligated to give
such notice more than twice in any twelve (12) month period;
(4) a failure by Tenant to observe and perform any other
provision or covenant of this Lease to be observed or performed by Tenant, where
such failure continues for twenty (20) days after written notice thereof to
Tenant provided, however, that if the nature of the failure is such that the
same cannot reasonably be cured within such period, Tenant shall not be deemed
to be in default if Tenant shall immediately after such written notice commence
to cure the same, shall continuously and diligently prosecute such curing
thereafter to completion; and
(5) the filing of a petition by or against Tenant for
adjudication as a bankrupt or insolvent or for its reorganization or for the
appointment pursuant to any local, state or federal bankruptcy or insolvency law
of a receiver or trustee of Tenant's property; or, an assignment by Tenant for
the benefit of creditors; or, the taking possession of the property of Tenant by
any local, state or federal governmental officer or agency or court-appointed
official for the dissolution or liquidation of Tenant or for the operating,
either temporary or permanent, of Tenant's business, provided, however, that if
any such action is commenced against Tenant the same shall not constitute a
default if Tenant causes the same to be dismissed or discharged within sixty
(60) days after the filing of same.
(6) the maintenance by Tenant of any waste, waste products,
radioactive waste, polychlorinated byphenyls, asbestos, toxic or hazardous
material or any other substance of any kind which is regulated by any law,
statute, ordinance, rule, or regulation (collectively "WASTE") in the Premises.
(7) the failure to comply with the provisions of Article 12 of
the Lease.
B. REMEDIES OF LANDLORD.
(1) Upon the occurrence of any Event of Default Landlord, at
its option and without notice or other act, may exercise any and all rights and
remedies at law and/or in equity and/or under the Lease including, without
limitation, all or any one or more of the following:
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(a) Landlord may cure for the account of Tenant any
such default of Tenant and immediately recover, as additional rent from Tenant
any expenditures made and the amount of any obligations incurred in connection
therewith, plus interest equal to four (4) point(s) above the prime rate of PNC
Bank, Philadelphia, Pennsylvania (as the same may exist from time to time)
("PRIME RATE") from the date of any such expenditure.
(b) Landlord may, without notice or other act,
accelerate the whole or any part of the Minimum Rent and additional rent for the
entire unexpired balance of the Term, as well as all other charges, payments,
costs and expenses herein agreed to be paid by Tenant (collectively the
"ACCELERATED RENT"). Any Accelerated Rent shall be due and payable on the date
Landlord demands payment thereof as if by the terms of the Lease the same were
due and payable on that date. To determine the amounts of the additional rent
component of the Accelerated Rent, Landlord may fix those amounts based upon the
highest monthly amounts thereof in or after the calendar year during which the
Event of Default occurred.
(c) Landlord may terminate the Lease by written
notice to Tenant stating that the Lease is terminated. If such notice is given
to Tenant, the Lease, the then unexpired Term and all of Tenant's estate,
rights, title and interest in and to the Premises and the Lease shall cease and
expire on the date specified in such notice, to be no less than five (5) days
after the date of such notice, without any right on the part of the Tenant
thereafter to nullify such termination by payment of any sum due or by the
performance of any term, provision, covenant, agreement or condition broken
except that Tenant shall be and remain liable to Landlord under the Lease
through the date on which the Term would otherwise have expired. If Landlord
terminates this Lease, Tenant shall immediately quit and surrender to Landlord
the Premises and remove itself and all other occupants thereof and, at
Landlord's option, any property thereon without Landlord being liable to
indictment, prosecution or damages therefor. No termination of the Lease shall
relieve Tenant of Tenant's liability to Landlord or Tenant's obligations under
the Lease, whether or not the Premises shall be relet, all of which shall
survive such termination.
(d) Landlord may, at any time after the occurrence of
any Event of Default, whether or not the Lease has been terminated, re-enter and
repossess the Premises and any part thereof with or without process of law,
provided no undue force shall be used, and shall have the option without the
need of any notice or other act (but not the obligation) in its own name or as
agent for Tenant if the Lease has not been terminated or in its own behalf if
the Lease has been terminated, to relet all or any part of the Premises;
provided that Landlord shall not be required to accept any tenant proposed by
Tenant or observe any instruction given by Tenant about such reletting. The
failure of Landlord to relet the Premises or any part or parts thereof shall not
release Tenant or affect Tenant's liability hereunder, nor shall Landlord be
liable for failure to relet, or in the event of reletting, for failure to
collect the rent thereof. In no event shall Tenant be entitled to receive any
excess of net rents collected over sums payable by Tenant to Landlord hereunder.
No such re-entry or taking possession of the Premises shall be construed as an
election on the Landlord's part to terminate the Lease unless a written notice
of such election by Landlord is given to Tenant. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect to
terminate the Lease for any previous Event of Default. For the purpose such
reletting, Landlord may decorate or make repairs, changes, improvements,
alterations or additions (collectively the "RELETTING WORK") in or to the
Premises to the extent deemed by Landlord desirable or convenient, and the cost
of the Reletting Work shall be charged to and payable by Tenant as additional
rent hereunder, as well as any brokerage and legal fees expended by Landlord. If
Landlord relets, all rents collected by Landlord from such reletting shall be
applied first to the payment of any Tenant indebtedness not set forth in the
immediately ensuing provisions of this sentence, second to the payment of any
costs and expenses of such reletting including, without limitation, brokerage
fees, attorneys' fees and costs and costs of the Reletting Work, third to unpaid
rent other than Accelerated Rent, fourth to unpaid Accelerated Rent, if any, or
if none, then to future Minimum Rent, additional and other rent as the same
becomes due and payable hereunder. If the rents collected by Landlord from such
reletting during a month are less than that to be paid during that month by
Tenant hereunder, Tenant shall pay such deficiency to Landlord. Such deficiency
shall be calculated and paid monthly on the days when the rent would have been
payable under the Lease.
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(e) Landlord may commence one or more actions to
recover all unpaid rent including, without limitation, the Accelerated Rent
and/or recover possession of the Premises.
(f) All inventory, equipment, machinery, trade
fixtures, contents and other personal property of any kind no nature whatsoever
at any time or from time to time within the Premises, whether owned by Tenant or
others (collectively the "SUBJECT PROPERTY") is and throughout the Term as well
as thereafter shall be subject to the lien of Landlord and distraint for any and
all rent not paid when due, and Tenant hereby grants to Landlord such lien on
the Subject Property and the right and remedy of distraint thereof together with
the right and remedy of "SELF-HELP" (hereinafter defined). Such lien of Landlord
shall be conclusively presumed to have been perfected and distraint of the
Subject Property to have occurred by and on the date of a written notice of
distraint given to Tenant or a written notice given to Tenant of the occurrence
of an Event of Default (whichever written notice is first given). The term
"SELF-HELP" means and shall be any action or other conduct by Landlord, any
agent of or anyone else acting for Landlord, by which Tenant is deprived of
possession or control over the Subject Property and includes, without
limitation, the changing of locks of the Premises, denying Tenant entry to the
Premises, terminating or otherwise ceasing Building Services to the Premises
(including, without limitation, electricity, gas and/or water), entering the
Premises, removing any, some or all of the Subject Property therefrom and/or
storing the same, all at Tenant's sole cost and expense, proceeding with or
without writ or process, assistance or involvement of constables or other
officers and selling at private or other sale, by auction or otherwise, the
Subject Property. Tenant hereby irrevocably authorizes and empowers Landlord and
any agent of and/or anyone else acting for Landlord to exercise the right and
remedy of Self-Help, Tenant agreeing that the exercise thereof is absolutely
privileged and shall not constitute a breach or default of the Lease by Landlord
or grounds for damages or other relief in favor of Tenant or any one directly or
indirectly claiming by, through or under Tenant and Tenant shall defend,
protect, indemnify and hold harmless Landlord, all agents of and anyone else
acting for Landlord, therefrom.
(2) Landlord shall have the right of injunction (including,
without limitation, specific performance) in the event of an Event of Default or
threat thereof, or other default or breach or threat thereof by Tenant of any of
the agreements, conditions, covenants or terms hereof to restrain the same and
the right to invoke any remedy allowed by law or in equity, whether or not other
remedies, indemnity or reimbursements are herein provided. The rights and
remedies given to Landlord in the Lease or at law or in equity are distinct,
separate and cumulative remedies, and no one of them, whether or not exercised
by Landlord, shall be deemed to be the exclusion of any other.
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(3) Tenant expressly waives the benefits of all laws, now or
hereafter in force, exempting any of Tenant's property on the Premises or
elsewhere from distraint, levy or sale in any proceedings taken by Landlord to
enforce any rights under the Lease. Tenant further waives the right of
inquisition on any real estate that may be levied upon to collect any amount
which may become due under the terms and conditions of the Lease, and does
hereby voluntarily condemn the same and authorize the Prothonotary to enter a
writ of execution or other process upon Tenant's voluntary condemnation, and
further agrees that said real estate may be sold on a writ of execution or other
process. Tenant specifically waives the right to the three (3) months notice
and/or the fifteen (15) or thirty (30) days notice required under certain
circumstances by the Landlord and Tenant Act of 1951, as amended, and agrees
that the notice or notices period or periods set forth in the Lease shall be
sufficient in either or any such case. The right to confess or otherwise enter
judgment against Tenant and to enforce all of the other provisions of the Lease
herein provided for may be exercised by any assignee of Landlord's right, title
and interest in the Lease, in such assignee's own name, notwithstanding the fact
that any or all assignments of said right, title and interest may not be
executed and/or witnessed in accordance with any Act of Assembly and any and all
laws regulating the manner and/or form in which such assignments shall be
executed and witnessed.
(4) CONFESSION OF JUDGMENT - RENT. TENANT COVENANTS AND AGREES
THAT IF THERE IS AN EVENT OF DEFAULT, THEN LANDLORD MAY, WITHOUT LIMITATION AND
WITHOUT NOTICE OR OTHER ACT, CAUSE JUDGMENTS FOR MONEY TO BE ENTERED AGAINST
TENANT AND, FOR THOSE PURPOSES, TENANT HEREBY GRANTS THE FOLLOWING WARRANT OF
ATTORNEY: (I) TENANT HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF
ANY COURT OF RECORD AND/OR LANDLORD (AS WELL AS SOMEONE ACTING FOR LANDLORD), IN
ANY AND ALL ACTIONS COMMENCED AGAINST TENANT FOR RECOVERY OF THE RENT AND/OR
OTHER AMOUNTS TO BE PAID TO LANDLORD BY TENANT, TO APPEAR FOR TENANT AND TO
CONFESS OR OTHERWISE ENTER JUDGMENT AGAINST TENANT AND ASSESS DAMAGES AGAINST
TENANT FOR ALL OR ANY PART OF THE RENT AND/OR OTHER AMOUNTS TO BE PAID TO
LANDLORD BY TENANT INCLUDING, WITHOUT LIMITATION, ACCELERATED RENT, TOGETHER
WITH INTEREST, COSTS AND AN ATTORNEYS' COMMISSION OF FIVE PERCENT (5%) OF THE
FULL AMOUNT OF SUCH RENT, AMOUNTS AND SUMS, AND THEREUPON WRITS OF EXECUTION FOR
LEVY AND ATTACHMENT MAY FORTHWITH ISSUE AND BE SERVED, WITHOUT ANY PRIOR NOTICE,
WRIT OR PROCEEDING WHATSOEVER; AND (II) THE WARRANT OF ATTORNEY HEREIN GRANTED
SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF BUT SUCCESSIVE ACTIONS
MAY BE COMMENCED AND SUCCESSIVE JUDGMENTS MAY BE CONFESSED OR OTHERWISE ENTERED
AGAINST AND DAMAGES ASSESSED AGAINST TENANT FROM TIME TO TIME AS OFTEN AS ANY OF
THE RENT AND/OR OTHER AMOUNTS AND SUMS SHALL FALL OR BE DUE OR BE IN ARREARS,
AND THIS WARRANT OF ATTORNEY MAY BE EXERCISED BEFORE AND/OR AFTER THE
TERMINATION OR EXPIRATION OF THE TERM AND/OR DURING OR AFTER ANY EXTENSIONS OF
THE TERM OR RENEWALS OF THE LEASE.
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(5) CONFESSION OF JUDGMENT - POSSESSION. TENANT COVENANTS AND
AGREES THAT IF THERE IS AN EVENT OF DEFAULT OR THE LEASE IS TERMINATED OR THE
TERM OR ANY EXTENSIONS OR RENEWALS THEREOF IS EXPIRES, THEN AND IN ADDITION TO
THE RIGHTS AND REMEDIES SET FORTH IN SECTION 17.B(4), LANDLORD MAY, WITHOUT
LIMITATION AND WITHOUT NOTICE OR OTHER ACT, CAUSE JUDGMENTS IN EJECTMENT FOR
POSSESSION OF THE PREMISES TO ENTERED AGAINST TENANT AND, FOR THOSE PURPOSES,
TENANT HEREBY GRANTS THE FOLLOWING WARRANT OF ATTORNEY: (I) TENANT HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD AND/OR
LANDLORD (AS WELL AS SOME ONE ACTING FOR LANDLORD) IN ANY AND ALL ACTIONS
COMMENCED FOR RECOVERY OF POSSESSION OF THE PREMISES TO APPEAR FOR TENANT AND
CONFESS OR OTHERWISE ENTER JUDGMENT IN EJECTMENT FOR POSSESSION OF THE PREMISES
AGAINST TENANT WHICH JUDGMENT SHALL BE ENFORCEABLE AGAINST TENANT AND ALL
PERSONS CLAIMING DIRECTLY OR INDIRECTLY BY, THROUGH OR UNDER TENANT, AND
THEREUPON A WRIT OF POSSESSION MAY FORTHWITH ISSUE AND BE SERVED, WITHOUT ANY
PRIOR NOTICE, WRIT OR PROCEEDING WHATSOEVER; AND (II) IF, FOR ANY REASON AFTER
THE FOREGOING ACTION OR ACTIONS SHALL HAVE BEEN COMMENCED, IT SHALL BE
DETERMINED THAT POSSESSION OF THE PREMISES SHOULD REMAIN IN OR BE RESTORED TO
TENANT, LANDLORD SHALL HAVE THE RIGHT TO COMMENCE ONE OR MORE FURTHER ACTIONS AS
HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE PREMISES INCLUDING, WITHOUT
LIMITATION, APPEARING FOR TENANT AND CONFESSING OR OTHERWISE ENTERING JUDGMENT
IN EJECTMENT AGAINST TENANT FOR POSSESSION OF THE PREMISES AS HEREINBEFORE SET
FORTH.
(6) IN ANY ACTION OR PROCEEDING DESCRIBED IN SUBSECTION
17.B(4) AND/OR SUBSECTION 17.B(5) OR IN CONNECTION THEREWITH, IF A COPY OF THE
LEASE IS THEREIN VERIFIED BY LANDLORD OR SOMEONE ACTING FOR LANDLORD TO BE A
TRUE AND CORRECT COPY OF THE LEASE (AND SUCH COPY SHALL BE CONCLUSIVELY PRESUMED
TO BE TRUE AND CORRECT BY VIRTUE OF SUCH VERIFICATION), THEN IT SHALL NOT BE
NECESSARY TO FILE THE ORIGINAL OF THE LEASE, ANY STATUTE, RULE OF COURT OF LAW,
CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING. TENANT HEREBY RELEASES TO
LANDLORD, ANYONE ACTING FOR LANDLORD AND ALL ATTORNEYS WHO MAY APPEAR FOR TENANT
ALL ERRORS IN PROCEDURE REGARDING THE ENTRY OF JUDGMENT OR JUDGMENTS BY
CONFESSION OR OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THE
LEASE, AND ALL LIABILITY THEREFOR. THE RIGHT TO ENTER JUDGMENT OR JUDGMENTS BY
CONFESSION OR OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THE
LEASE AND TO ENFORCE ALL OF THE OTHER PROVISIONS OF THE LEASE MAY BE EXERCISED
BY ANY ASSIGNEE OF LANDLORD'S RIGHT, TITLE AND INTEREST IN THE LEASE IN SUCH
ASSIGNEE'S OWN NAME, ANY STATUTE, RULE OF COURT OR LAW, CUSTOM OR PRACTICE TO
THE CONTRARY NOTWITHSTANDING.
(7) Tenant, for itself and on behalf of any and all persons
claiming through or under it (including creditors of all kinds), does hereby
waive and surrender all right and privilege which they or any of them might have
under or by reason of any present or future law, to redeem the premises or to
have a continuance of this Lease for the Term, as it may have been extended,
after having been dispossessed or ejected therefrom by process of law or under
the terms of this Lease or after the termination of this Lease as herein
provided.
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(8) Neither this Lease nor any rights or privileges hereunder
shall be an asset of Tenant in any bankruptcy, insolvency or reorganization
proceeding. If Landlord shall not be permitted to terminate this Lease because
of the provisions of the United States Bankruptcy Code, Tenant or any trustee
for it shall, within fifteen (15) days upon request by Landlord to the
Bankruptcy Court, assume or reject this Lease unless all defaults hereunder
shall have been cured, Landlord shall have been compensated for any monetary
loss resulting from such default and Landlord shall be provided with reasonably
adequate assurance of full and timely performance of all provisions, terms and
conditions of this Lease on the part of Tenant to be performed.
(9) The failure or delay on the part of either party to
enforce or exercise at any time any of the provisions, rights or remedies in the
Lease shall in no way be construed to be a waiver thereof, nor in any way to
affect the validity of this Lease or any act hereof, or the right of the party
to thereafter enforce each and every such provisions, right or remedy. No waiver
or any breach or default of this Lease shall be held to be a waiver of any other
or subsequent breach or default. The receipt by Landlord of rent at a time when
the rent is in default under this Lease shall not be construed as a waiver of
such default. The receipt by Landlord of a lesser amount than the rent due shall
not be construed to be other than a payment on account of the rent then due, nor
shall any statement on Tenant's check or any letter accompanying Tenant's check
be deemed an accord and satisfaction, and Landlord may accept such payment
without prejudice to Landlord's right to recover the balance of the rent due or
to pursue any other remedies provided in this Lease. No act or thing done by
Landlord or Landlord's agents or employees during the Term and any extension
thereof shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such a surrender shall be valid unless in writing and signed
by Landlord.
18. SUBORDINATION.
A. GENERALLY. This Lease shall be subject and subordinate at all times
to the lien of any mortgagees and/or ground rents and/or other encumbrances now
or hereafter placed on the Premises or the Building without the necessity of any
further instrument or act on the part of the Tenant to effectuate such
subordination, but the Tenant covenants and agrees to execute and deliver upon
demand such further instrument or instruments evidencing such subordination of
this Lease to the lien of any such mortgage or mortgages and/or ground rent
and/or other encumbrances as shall be desired by any mortgagee or proposed
mortgagee or by any person. Tenant hereby appoints the Landlord attorney-in-fact
of Tenant irrevocably to execute and deliver any such instrument for and in the
name of Tenant.
B. RIGHTS OF MORTGAGEE. In the event of any act or omission of Landlord
which would give Tenant the right, immediately or after lapse of a period of
time, to cancel or otherwise terminate this Lease, or to claim a partial or
total eviction, Tenant shall not exercise such right:
(1) Until it has given written notice of such act or omission
to the holder of each such mortgage or ground Lease whose name and address shall
previously have been furnished to Tenant in writing; and
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(2) Until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice (which
reasonable period shall in no event be less than the period to which Landlord
would be entitled under this Lease or otherwise, after similar notice, to effect
such remedy).
C. TENANT'S ATTORNMENT. In the event of any foreclosure of, or the
exercise of a power of sale under, any mortgage or deed of trust referred to in
this Section or in the event of the termination of any ground lease pursuant to
which Landlord is the lessee, Tenant, upon the purchaser or lessor's request,
shall attorn to and recognize the purchaser or Landlord's lessor as Landlord
under this Lease. Tenant agrees that, upon the request of Landlord or any
lessor, mortgagee or trustee, Tenant shall execute and deliver any instruments
which may be required for the purposes of carrying out the intention of this
Section 18.
19. SURRENDER AND HOLDING OVER.
A. SURRENDER. The Lease shall terminate and Tenant shall deliver up and
surrender possession of the premises on the last day of the Term hereof, and
Tenant waives the right to any notice of termination or notice to quit. Tenant
covenants that upon the expiration or sooner termination of this Lease, Tenant
shall deliver up and surrender possession of the Premises in the same condition
in which Tenant has agreed to keep the same during the continuance of the Lease
and in accordance with the terms hereof, normal wear and tear and, subject to
Section 13 hereof, damage by casualty excepted.
B. HOLD OVER. Upon the failure of the Tenant to surrender possession of
the Premises upon the expiration or sooner termination of this Lease, Tenant's
continued occupancy may be treated by Landlord as a month-to-month tenancy and
during such occupancy, Tenant shall pay to Landlord, an amount equal to two
hundred percent (200%) of the rent required to be paid under this Lease as
applied to any period in which Tenant shall remain in possession after
expiration or sooner termination of this Lease. If Landlord requires Tenant to
timely vacate the Premises and Tenant fails to do so within thirty (30) days, in
addition to being responsible for the rent set forth above, Tenant shall pay to
Landlord an amount equal to all damages, consequential as well as direct,
sustained by reason of Tenant's retention of possession.
20. DELAY IN POSSESSION. In the event that the Premises are not ready for
Tenant's occupancy at the time herein fixed for the beginning of the Term
because of any alterations or construction now or hereafter being performed
either to the Premises or to the Building of which the Premises form a part
(unless such alterations are being done by Tenant or Tenant's contractor, or
unless the delay in completing such alterations was caused by Tenant in which
case there shall be no suspension or proration of rent or other sums), or
because of the non-completion of the Building of which the Premises form a part,
or because Landlord being itself a tenant of the same Premises has not received
possession thereof from its landlord for any reason whatsoever, or because of
the failure or refusal of the occupant of the Premises who is or may be in
possession immediately before the beginning of the Term hereof to vacate and
surrender up the same, or because of any restrictions, limitations or delays
caused by government regulations or governmental agencies, this Lease and the
Term hereof shall not be affected thereby, nor shall Tenant be entitled to make
any claim for or receive any damages whatsoever from Landlord, and the Term
hereof shall nevertheless end on the date herein originally fixed, but no rent
herein provided to be paid by Tenant shall become due until the Premises are
substantially completed, and until that time the rent shall be suspended and
pro-rated.
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21. CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights:
A. BUILDING NAME. To name the Building and to change the names or
street addresses of the Building.
B. EXTERIOR SIGNS. To install and maintain a sign or signs on the
exterior of the Building.
C. REDECORATION. During the last six (6) months of the Term, if during
or prior to that time Tenant has vacated or otherwise abandons the Premises, to
decorate, remodel, repair, alter or otherwise prepare the Premises for
reoccupancy, without affecting Tenant's obligation to pay rent for the Premises.
D. PASS KEYS. To constantly have pass keys to the Premises.
E. ADJOINING AREAS. To have the use of and reasonable access through
the Premises for the purposes of operation, maintenance, decoration and repair
of all walls, windows and doors bounding the Premises (including exterior walls
of the Building, core corridor walls and doors and any core corridor entrance)
except the inside surfaces thereof, any terraces or roofs adjacent to the
premises used for shafts, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other facilities are reserved to Landlord.
F. ACCESS TO PREMISES. Landlord, Agent and their respective employees
and agents shall have the right to enter the Premises at all reasonable times
during normal business hours and at any time in case of an emergency for the
purpose of examining or inspecting the same, showing the same to prospective
purchasers, mortgagees or tenants of the Building and making such alterations,
repairs, improvements or additions or doing other work to the Premises or to the
Building as Landlord may deem necessary or desirable. If representatives of
Tenant shall not be present to open and permit entry into the Premises at any
time when such entry is necessary or permitted hereunder, Landlord and Agent may
enter by means of a master key or card (or forcibly in the event of an
emergency) without liability to Tenant and without such entry constituting an
eviction of Tenant or termination of this Lease.
22. SPRINKLER SYSTEM; LIFE SAFETY SYSTEM. If there now is or shall be installed
in the Building a "sprinkler system" or "life safety system" and if such systems
or any of their appliances shall be damaged or injured or not in proper working
order by Tenant or its agents, servants, employees, invitees, licensees or
visitors, Tenant shall forthwith restore the same to good working condition at
its own expense; and if the Board of Fire Underwriters or Fire Insurance
Exchange or any governmental bureau, department or official requires or
recommends that any changes, modification, alterations or additional sprinkler
heads or other equipment be made or supplied by reason of Tenant's business, or
the location of partitions, trade fixtures, or other contents in the Premises,
or for any other reason attributable to Tenant, or if any such changes,
modification, alterations, additional sprinkler heads or other equipment,
becomes necessary to prevent the imposition of a penalty or charge against the
full allowance for a sprinkler system or life safety system under the fire
insurance rate as fixed by said Exchange, or by any fire insurance company,
Tenant, shall, at Tenant's sole cost and expense, promptly make and supply such
changes, modifications, alterations, additional sprinkler heads or other
equipment.
23. ENVIRONMENTAL CONSIDERATIONS.
(A) For purposes of this Section 23, the following definitions shall
apply:
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(1) "ENVIRONMENTAL RELEASE": The term Environmental Release
shall mean any intentional or unintentional releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing, abandoning, discarding or dumping of any Toxic Substance
(hereinafter defined) from, on, into or about the land, water or air of the
Premises, the Building, the Common Areas in the Building or the real property
surrounding the Building.
(2) "TOXIC SUBSTANCE": The term Toxic Substance shall mean a
hazardous substance, hazardous waste, pollutant or contaminant, as such terms
are now or hereafter defined in all applicable federal, state, and local laws,
ordinances or regulations now or hereafter enacted or amended, and any and all
other terms which are or may be used in any or all applicable laws now or
hereafter enacted to define prohibited or regulated substances.
(B) Tenant shall not use the Premises, the Building, the Common Areas
in the Building or the real property surrounding the Building (or any part of
the Premises, the Building, the Common Areas or real property) for the purpose
of treating, producing, handling, transferring, processing, transporting,
disposing, using or storing a Toxic Substance in violation of applicable laws.
(C) Tenant and its agents, employees, contractors, licensees and
invitees shall not cause or permit to exist, as the result of an action or
omission by one or more of them, an Environmental Release. The occurrence of an
Environmental Release, or a violation of any covenant, representation or
warranty of this Section 23, shall be deemed an Event of Default under this
Lease.
(D) Notwithstanding the foregoing, Tenant may use cleaning materials
and office supplies in the ordinary course of Tenant's business, in reasonable
quantities and provided that such materials and supplies are used, stored and
disposed of in compliance with any and all applicable laws, ordinances and
regulations, as now or hereafter enacted.
(E) Except as provided in Section 8.E., Tenant shall dispose, remove
and/or arrange for the disposal and/or removal of its trash by a trash disposal
company, approved by Landlord, which shall be operated in accordance with
applicable laws, ordinances and regulations. Tenant and its agents, employees,
contractors, licensees and invitees shall not place or permit the placement of
any Toxic Substance in any waste receptacle located in the Premises, the
Building, the Common Areas in the Building, the plumbing or sewer systems of the
Building or the real property surrounding the Building.
(F) Tenant shall comply with all applicable laws, ordinances and
regulations of all governmental authorities, as now or hereafter enacted,
including, without limitation, all laws, ordinances and regulations governing a
Toxic Substance.
(G) The covenants, representations and warranties provided in this
Section 23 shall survive the expiration or earlier termination of this Lease.
(H) Tenant shall pay, defend, indemnify, and hold harmless Landlord
from and against any and all claims, losses, costs, damages liabilities and
fines arising from or relating to Environmental Releases to the extent caused by
the acts, negligence, misconduct or other fault of Tenant, its agents,
employees, contractors, licensees, invitees or subtenants or failure of Tenant,
or its agents employees, contractors, licensees, invitees or subtenants to
comply with the provisions of this Section 23.
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(I) Landlord shall remove from or encapsulate within the Premises any
Toxic Substances which exist in violation of applicable laws, provided that (i)
the Toxic Substances were located within the Premises prior to the date on which
Tenant took possession of the Premises, or were brought into the Premises by
Landlord or its employees, contractors or licensees, and (ii) Tenant delivers to
Landlord written notice of the existence of the Toxic Substances within
forty-eight (48) hours of discovering such substances.
24. SUBSTITUTE PREMISES. Landlord, at its sole expense and upon at least sixty
(60) days prior written notice, may require Tenant to move from the Premises to
another suite of comparable size in order to permit Landlord to consolidate the
Premises with other adjoining space leased or to be leased to another tenant in
or coming into the Building. The failure of Tenant to relocate in accordance
with this Section 24 shall constitute an Event of Default hereunder and Tenant
shall be additionally liable to Landlord for all consequential damages suffered
by Landlord on account thereof. In the event of any such relocation, Landlord
will pay all the expenses of preparing and decorating the other suite so that
the same will be substantially similar to the Premises. In addition, Landlord
shall pay the reasonable expenses of moving Tenant's furniture and equipment to
the other suite. Occupancy of the other suite shall be under and pursuant to the
terms of this Lease. Notwithstanding the foregoing, if at the time such
relocation is required, there is, in Landlord's sole opinion, not sufficient
remaining time within the Term of this Lease to fully amortize Landlord's cost
of relocating Tenant, Landlord shall have the right to terminate this Lease upon
sixty (60) days prior written notice to Tenant.
25. ESTOPPEL STATEMENT. Tenant shall, at any time and from time to time within
ten (10) business days after written request by Landlord, execute, acknowledge
and deliver to Landlord a statement in writing duly executed by Tenant (A)
certifying that this Lease is in full force and effect without modification or
amendment (or, if there have been any modifications and amendments, the nature
thereof), (B) certifying the dates to which annual Minimum Rent and additional
rent have been paid, and (C) either certifying that no default exists under this
Lease or specifying each such default, it being the intention and agreement of
Landlord and Tenant that if Tenant shall fail to respond within the aforesaid
ten (10) day period, Tenant shall be deemed to have given such statement as
above provided, that this Lease is in full force and effect, that no default in
Landlord's performance remains uncured, that the security deposit, if any, is as
stated in this Lease and that not more than one (1) month's rent has been paid
in advance.
26. QUIET ENJOYMENT. Upon payment by Tenant of rent and upon the observance and
performance by Tenant of all the terms, covenants, conditions, provisions and
agreements of this Lease on Tenant's part to be observed and performed, Tenant
shall peaceably and quietly hold and enjoy the Premises for the Term of this
Lease without hindrance or interruption by Landlord or by any person or persons
lawfully claiming or holding by, through or under Landlord, subject,
nevertheless, to the terms, covenants, conditions and provisions of this Lease,
to all other agreements, conditions, restrictions and encumbrances of record and
to all mortgages, installment sale agreements and underlying leases of record to
which this Lease is, or shall become subject and subordinate.
30
27. BROKERS; AGENT. Tenant warrants to Landlord that Tenant dealt and negotiated
solely and only with Agent (or Landlord) for this Lease and with no other
broker, firm, company or person. Tenant (for good and valuable consideration)
shall indemnify and hold Landlord and Agent harmless from and against any and
all claims, suits, proceedings, damages, obligations, liabilities, counsel fees,
costs, losses, expenses, orders and judgments imposed upon, incurred by or
asserted against Landlord and/or Agent by reason of the falsity or error of the
aforesaid warranty. It is expressly understood and agreed by Landlord and Tenant
that Agent is acting as agent only, and shall not in any event be liable to
either Landlord or Tenant for the fulfillment or non-fulfillment of any of the
terms, covenants, conditions or provisions of this Lease, or for any action or
proceeding taken by Landlord against Tenant or by Tenant against Landlord.
Within three (3) business days after the full execution of the Lease, Landlord
shall pay to PREIT-Rubin, Inc. a leasing commission in the amount of
$155,146.00.
28. LANDLORD STATUS. Landlord's obligations hereunder shall be binding upon
Landlord only for a period of time that Landlord is in ownership of the
Building; and, upon termination of that ownership, Tenant, except as to any
obligations which have then matured, shall look solely to Landlord's successor
in interest in the Building for the satisfaction of each and every obligation of
Landlord hereunder. Landlord shall have no personal liability under any of the
terms, conditions or covenants of this Lease and Tenant shall look solely to the
equity of the Landlord in the Building of which the Premises form a part and no
other assets for the satisfaction of any claim, remedy or cause of action
accruing to Tenant.
29. NOTICES. Wherever in this Lease it shall be required or permitted that
notice or demand be given or served by either party to this Lease to or on the
other party, such notice or demand shall be in writing and shall be given by
either registered or certified mail (postage prepaid), or by courier
guaranteeing overnight delivery or by personal delivery addressed in accordance
with the notice addresses specified on page one (1) of this Lease. Additionally,
all notices shall be deemed effectively given if sent by Landlord and Tenant's
respective counsel. Each notice shall be deemed to have been given to or served
upon the party to which addressed on the date the same is received or rejected
if sent in accordance herewith. Each party may change its address to which any
notice shall be delivered or sent by giving written notice of such change to the
other party hereto in the manner herein provided. Notices by Landlord may also
be sent by Agent on Landlord's behalf.
30. MISCELLANEOUS PROVISIONS.
A. FORCE MAJEURE. Landlord shall be excused for the period of any delay
in the performance of any obligations hereunder when prevented from so doing by
cause or causes beyond Landlord's control which shall include, without
limitation, all labor disputes, inability to obtain any material or services,
civil commotion or Acts of God. With the exception of the obligation to pay any
sum due under this Lease, including without limitation Tenant's obligation to
pay Rent, Tenant shall be excused for the period of any delay in the performance
of any obligations hereunder when prevented from so doing by cause or causes
beyond Tenant's control, which shall include, without limitation, all labor
disputes, inability to obtain any material or services, civil commotion or Acts
of God, provided that Tenant has given written notice of the delay to Landlord
within forty-eight (48) hours of the date on which Tenant first acquires
knowledge of the delay.
B. COMMON AREAS. All parking areas, walkways, vertical transportation,
stairs, driveways, alleys, public corridors and fire escapes, and other areas,
facilities and improvements as may be provided by Landlord from time to time for
the general use in common of Tenant and other tenants, which may be extended to
their employees, agents, invitees and licensees, shall at all times be subject
to the exclusive control and management of Landlord, and Landlord shall have the
right from time to time to establish, modify and enforce reasonable rules and
regulations with respect to all such areas, facilities and improvements, and to
change the location of or otherwise alter or modify any or all of the
aforementioned Common Areas, facilities, and improvements so long as Landlord
continues to provide adequate passageways to the Premises.
31
C. RULES AND REGULATIONS. Tenant shall observe and comply with the
Rules and Regulations annexed hereto as EXHIBIT "E" and made a part hereof. All
such Rules and Regulations shall apply to Tenant and its invitees and
subtenants.
D. CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of that corporation represents and warrants that
he or she is duly authorized to execute and deliver this Lease on behalf of the
corporation in accordance with the duly adopted resolution of the Board of
Directors of the corporation, and that this Lease is binding upon the
corporation in accordance with its terms.
E. NO RECORDATION. This Lease shall not be filed of record; however,
upon request of Landlord, a memorandum of the Lease in compliance with law shall
be executed by Landlord and Tenant and recorded, with recordation costs paid by
Landlord.
F. SUCCESSORS. The respective rights and obligations provided in this
Lease shall bind and shall inure to the benefit of the parties hereto, their
legal representatives, heirs, successors and assigns, provided, however, that no
rights shall inure to the benefit of any successors of Tenant unless Landlord's
written consent for the transfer to such successor has first been obtained as
provided in Section 12.
G. GOVERNING LAW. This Lease shall be construed, governed and enforced
in accordance with the laws of the state in which the Premises is located.
H. SEVERABILITY; SEPARATE COVENANTS. If any provisions of this Lease or
portions thereof shall be held to be invalid, void or unenforceable, the
remaining provisions of this Lease or portions thereof shall in no way be
affected or impaired and such remaining provisions or portions thereof shall
remain in full force and effect. Furthermore, each covenant, agreement,
obligation and other provision contained in this Lease is, and shall be deemed
and construed as a separate and independent covenant of the party bound by,
undertaking or making the same, and not dependent on any other provision of this
Lease unless expressly so provided.
I. CAPTIONS. Any heading preceding the text of the several Sections and
subsections hereof are inserted solely for the convenience of reference and
shall not constitute a part of this Lease, nor shall they affect its meaning,
construction or effect.
J. CERTAIN DEFINITIONS. As used in this Lease, the word "person" shall
mean and include, where appropriate, an individual, corporation, partnership or
other entity; the plural shall be substituted for the singular, and the singular
for the plural where appropriate; and words of any gender shall mean and include
any other gender. The parcel of land on which the Building is located is
hereinafter referred to as the "LAND". For purposes of this Lease, the term
"BUILDING" includes the Land and other improvements on which the Building is
constructed and "PROPERTY" shall mean "the Land and Building" or "either the
Land or the Building".
32
K. EXECUTION. The submission by Landlord to Tenant of this Lease shall
have no binding force or effect, shall not constitute an option for the leasing
of the Premises nor confer any rights or impose any obligations upon either
party until the execution thereof by Landlord and the delivery of an executed
original copy thereof to Tenant.
L. WAIVER OF JURY TRIAL. It is mutually agreed that Landlord and Tenant
hereby waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other as to any matters arising out of
or in any way connected with this Lease.
M. FINANCIAL STATEMENTS. Within ten (10) days after request in writing
therefor from Landlord, Tenant agrees to deliver to Landlord Tenant's financial
statements filed with the Securities and Exchange Commission.
N. ENTIRE AGREEMENT. This Lease (including the Exhibits and any Riders
hereto) contains all the agreements, conditions, understandings, representations
and warranties made between the parties hereto with respect to the subject
matter hereof and supersedes all prior negotiations and proposals (either
written or oral). This Lease may not be modified or terminated orally or in any
manner other than by an agreement in writing signed by both parties hereto or
their respective successors in interest. The submission of this Lease by
Landlord, its attorneys or agents, for examination or execution by Tenant, does
not constitute a reservation of (or option for) the Premises in favor of Tenant
and Tenant shall have no right or interest in the Premises and Landlord shall
have no liability hereunder, unless and until this Lease is executed and
delivered by Landlord.
31. MISCELLANEOUS/COMPLIANCE WITH LAWS AND THE AMERICANS WITH DISABILITIES ACT.
Tenant agrees to comply with all applicable federal, state and local laws,
rules, regulations, guidelines, judgments and orders which now or in the future
enact requirements as to the use and occupancy of the Premises, including the
requirements imposed by the Americans with Disabilities Act ("ACT") which
imposes requirements relating to the design and use of the Premises. The Act
requires, among other things, that the Premises be designed to remove
architectural barriers so that the Premises will be readily accessible to people
with disabilities, on the same basis as the Premises are accessible to those
without such disabilities. The foregoing obligation of Tenant however shall not
permit Tenant to make any changes to the Premises which otherwise would require
Landlord's approval by virtue of this Lease. Tenant shall instruct its architect
or designer to prepare Tenant's plans for the Premises so as to assure that the
Premises will be in compliance with such Act.
THE UNDERSIGNED TENANT ACKNOWLEDGES THAT IT FULLY UNDERSTANDS THE CONFESSIONS OF
JUDGMENT CONTAINED IN SECTION 17B HEREOF AND THAT THE LANDLORD-TENANT
RELATIONSHIP CREATED HEREBY IS COMMERCIAL IN NATURE AND THAT THE UNDERSIGNED
WAIVES ANY RIGHT TO A HEARING WHICH WOULD OTHERWISE BE A CONDITION TO LANDLORD'S
OBTAINING THE JUDGEMENTS AUTHORIZED BY SECTION 17B.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by
their duly authorized officers or representatives as of the day and year first
above written.
LANDLORD:
BELLEVUE ASSOCIATES
By: BELLEVUE INC.,
a Pennsylvania corporation,
Its General Partner
By: /s/ George F. Rubin
---------------------
Name: GEORGE F. RUBIN
Title: Treasurer/Secretary
TENANT:
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
By: /s/ Jonathan B. Weller
-----------------------
Name: Jonathan B. Weller
Title: President
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SCHEDULE OF EXHIBITS
EXHIBIT CONTENTS
- ------- --------
"A" Floor Plans
"B" [INTENTIONALLY DELETED.]
"C" Final Plans
"D" Plan Requirements and other Tenant Construction Standards
"E" Rules and Regulations Definitions
"F" Janitorial Requirements
35
ADDENDUM TO LEASE
THIS ADDENDUM is hereby made part of that certain Lease (the "Lease")
between BELLEVUE ASSOCIATES, as Landlord, and PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST, as Tenant, for those Premises shown on Exhibit "A" of the
Lease at "The Bellevue" and is executed on even date with the Lease.
In the event a conflict arises between the provisions of this Addendum
and any other part of the Lease, the provisions of this Addendum shall modify
and supersede such other part of the Lease to the extent necessary to eliminate
any such conflict but no further. All terms which are defined in the Lease shall
have the same meaning when used herein.
SECTION 4.B Section 4.B of this Lease is hereby
RENT/INDEXED deleted and the following Section 4.B
INCREASES/OTHER entitled "Other Rent" substituted therefor:
RENT
B. Other Rent. Landlord is the owner
of the "Parking Facility" (hereinafter
described). Landlord hereby agrees to make
available to Tenant such number of
designated parking spaces the "Parking
Spaces") as Landlord and Tenant shall agree
upon in certain multi-level enclosed parking
facility (the "Parking Facility") located at
220-228 South Broad Street, Philadelphia,
Pennsylvania. During the Term and, if
applicable, the Extended Term, Tenant shall
be entitled to twelve (12) Parking Spaces.
The designated Parking Spaces will be
numbered by Landlord. All of the Parking
Spaces will be furnished on a monthly basis
at market rates (as the same may exist from
time to time) so long as there is not then
existing an uncured event of default under
this Lease. If Tenant fails to pay all
charges in connection with the Parking
Spaces, Landlord shall have the right to
terminate all of Tenant's rights with
respect to said spaces and deactivate the
applicable gate access cards as its sole and
exclusive remedy.
SECTION 4.G In the second (2nd) line of Section 4-G of
RENT/LATE CHARGE this Lease entitled "Rent/Late Charge" the
word "when" is hereby deleted and the words
"within ten (10) days after" substituted
therefor.
SECTION 4.H Section 4.H of this Lease entitled
RENT/SECURITY "Rent/Security Deposit" is hereby deleted
DEPOSIT and the following is substituted therefore:
SECTION 4.I In the eighth (8th) line of Section 4-1 of
RENT/USE AND this Lease entitle "Rent/Use and Occupancy
OCCUPANCY TAX Tax" the words "be solely responsible to"
are hereby inserted after the word "will".
SECTION 5 Section 5 of this Lease entitled
DEFINITIONS: "Definitions Operation and Maintenance
OPERATION AND Charge ("OMC") Sum; Taxes" is hereby deleted
MAINTENANCE and the following substituted therefor:
CHARGE ("OMC")
SUM; TAXES
In this Lease, the following terms shall
have the meanings hereinafter provided:
A. "Operation and Maintenance Charge
("OMC") Sum" shall mean all of Landlord's
operating costs and expenses paid or
incurred (even if not yet payable) in the
operation and maintenance of the Building
and the Common Areas, but only to the extent
that such costs and expenses are allocable,
as provided below, to the Office Portion of
the Building, all computed on an accrual
basis and in accordance with the terms of
this Lease.
Landlord's costs and expenses in the
operation and maintenance of the Building
and the Common Areas shall be allocated to
the Office Portion of the Building on the
following basis:
First: (i) if electricity is
separately metered to the Office Portion, to
the extent so metered, those costs shall be
allocated to the Office Portion. Electricity
separately metered to either the Retail
Portion or Hotel Portion or any parts
thereof shall not be allocated, in whole or
in part, to the Office Portion.
(ii) Services provided to or
costs incurred exclusively for the Office
Portion shall be allocated to the Office
Portion; services provided to or costs
incurred exclusively for the Retail Portion
or the Hotel Portion or any parts hereof
shall not be allocated, in whole or part, to
the Office Portion.
2
Second. After the above described
determinations and calculations are made,
the services provided to or costs incurred
for the Building as a whole but which are
demonstrably utilized by the tenants,
occupants and invitees of the Office Portion
and also the Retail Portion and/or the Hotel
Portion (such as, for example, the freight
elevator) may be reasonably allocated by
Landlord to the Office Portion based on the
experienced utilization (which may change
from time to time) between the tenants,
occupants and invitees of the office Portion
and those of the Retail Portion and/or the
Hotel Portion.
Third. After the above described
determinations and calculations are made,
the services provided to or costs incurred
for the Building that have not been thus
allocated shall be allocated to the Office
Portion of the Building on the basis of the
comparative square footage of the Office
Portion, the Retail Portion and Hotel
Portion of the Building; and for purposes of
such allocation, Landlord and Tenant agree
that (based upon the configuration of the
Office Portion, Retail Portion and Hotel
Portion of the Building as of the date of
this Lease) the square footage of the Office
Portion of the Building constitutes 46.39%
of the total square footage of the Building.
The OMC Sum shall include, without
limitation, but subject to allocation in
conformity with the foregoing procedures,
the following:
(1) to the extent not
separately metered or submetered for the use
of other tenants occupying or who would
occupy the Building (it being agreed that
Landlord shall separately meter or submeter
the Ballroom, the Retail Portion and the
Hotel Portion of the Building), all gas,
electricity, steam, fuel, water (domestic
and fire protection), sewer and other
utility charges (including surcharges) of
whatever nature; provided that in the event
that Landlord elects to separately meter or
submeter Tenant's utility usage at the
Premises, but Landlord does not separately
meter or submeter the utility usage of all
tenants occupying the Office Portion of the
Building, the OMC Sum shall not include the
utility usage of tenants occupying the
Office Portion who are not separately
metered or submetered;
(2) insurance premiums
respecting the insurance coverage maintained
by Landlord, and the amounts of any
deductible losses not covered by such
insurance that are paid by Landlord;
3
(3) reasonable Building
personnel costs, including, without
limitation, salaries, wages, fringe
benefits, taxes, insurance and other direct
and indirect costs, for personnel assigned
exclusively to the Office Portion and for
personnel assigned to the Building
generally;
(4) reasonable costs of
service and maintenance contracts,
including, without limitation cleaning and
security services;
(5) all other maintenance
and repair expenses (excluding repairs and
general maintenance to the interior of any
tenant space or respecting improvements and
alterations made by or for tenants of the
Building other than Tenant) and the cost of
materials, tools and supplies relative
thereto;
(6) to the extent not
otherwise excluded by this Subsection 5.A,
any other reasonable costs and expenses
incurred by Landlord in operating and
maintaining the Building and Common Areas;
(7) the cost of any
additional services not provided to the
Building on the Commencement Date but
thereafter provided by Landlord in prudent
management of the Building;
(8) Landlord's central
office accounting costs and overhead
reasonably incurred and allocable to the
Building;
(9) legal, accounting and
other fees of consultants, engineers and
other design professionals allocable to the
Building [excluding, fees related to leasing
space in the Building, collecting delinquent
rents from other tenants of the Building,
and the costs of capital improvements to the
Building (unless specifically permitted and
described in this Subsection 5.A)];
(10) costs of repairing and
maintaining vertical transportation systems,
including the costs of service and
maintenance contracts in connection
therewith allocable to the Building;
(11) costs of uniforms for
Building service personnel allocable to the
Building;
4
(12) costs of rent
insurance allocable to the Building;
(13) reasonable management
fees and charges allocable to the Building
(not to exceed as to the Office Portion four
percent (4%) of gross rents to the Office
Portion);
(14) costs of snow, ice,
trash and garbage removal and pest control
allocable to the Building;
(15) to the extent not
covered by warranty or reimbursed by
insurance, costs of repairing the HVAC and
other systems of the Building, it being
understood that the foregoing shall not
include expansions or improvements of the
HVAC or other such systems due to Capital
Improvements made by Landlord;
(16) costs of interior and
exterior planting, replanting and replacing
flowers, shrubbery, plants, trees and other
landscaping for the Building;
(17) costs of maintaining,
repairing and replacing Building and Common
Areas amenities including, without
limitation, awnings, railings and floor mats
of the Building;
(18) sales, use, excise
taxes and fees allocable to the Building;
(19) costs required by the
application or enforcement of federal, state
and local statutes, codes, regulations and
rulings allocable to the Building (other
than structural repairs or costs of
compliance with requirements of statutes,
codes, regulations and rulings that apply to
the Building or the improvement of any space
in the Building for tenant use or
occupancy);
(20) costs of installing
energy cost saving equipment or systems that
materially will reduce or de-accelerate,
over a reasonable period of time, the energy
costs of the Building, but only to the
extent of the savings realized as estimated
by the Building's engineer;
5
(21) costs of maintaining,
repairing, and replacing sidewalks, loading
and unloading areas and surrounding common
Areas of the Building;
(22) costs of routine
repairing and cleaning the Building facade
(other than sandblasting or chemical
cleaning of the entire Building);
(23) costs of painting the
exterior of the Building; and
(24) costs of maintaining,
repairing and clearing fountains,
sculptures, art features, fencing, screening
and similar items located within or outside
of the Building.
Operating Expenses shall not
include:
(1) special cleaning or
other services not provided to substantially
all tenants of the Office Portion of the
Building;
(2) the cost of any items,
whether purchased or leased, which, under
generally accepted accounting principles,
would be considered to be a capital item or
improvement (unless such item is
specifically permitted under Subparagraphs
(10), (15), (17), (19), (20) or (21) above,
and then only to the extent of an annual
charge which results in such cost being
amortized over the actual useful life of the
item based on established accounting rules
to calculate the useful life of the item)
and described in this Subsection 5.A),
depreciation, interest, debt service, (or
any other financing charge, fee or cost) or
rents (including ground rents) paid or
incurred by Landlord;
(3) any charge or fee paid
by, or for which Landlord is reimbursed by,
the proceeds of insurance or by Tenant or
any other tenant occupying the Building;
(4) leasing commissions;
(5) cost relating to
maintaining Landlord's existence as a
partnership, corporation, or other entity;
(6) structural repairs to
the Building;
6
(7) costs relating to the
operation and maintenance of the Ballroom;
(8) marketing costs,
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;
(9) the costs of tenant
improvements performed for tenants in the
Building;
(10) 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;
(11) wages, salaries, or
other compensation or benefits for any
officers or employees of Landlord above the
grade of Building Manager;
(12) any cost for which
Landlord is entitled to reimbursement from
tenants, insurers, or any third party;
(13) except as otherwise
expressly permitted in this Lease, the costs
of any additions to the Property after the
original construction of the Building;
(14) any costs attributable
to any parking facility owned or operated by
Landlord;
(15) repairs or other work
occasioned by an insured casualty or by
exercise of eminent domain;
(16) costs incurred by
Landlord due to a violation by Landlord or
any tenant of the terms and conditions of
such tenant's lease except to the extent
such costs are otherwise included within the
definition of operating expenses;
(17) amounts paid to any
division or affiliate of Landlord providing
materials, services, labor or equipment to
the extent that such costs exceeds the
competitive costs of such materials,
services, labor or equipment when provided
by an independent party in an arms-length
transaction;
7
(18) any costs, fines or
penalties imposed upon Landlord because of
Landlord's violation of any governmental
statute, regulation or rule;
(19) costs of installing,
maintaining and operating any specialty
service which is not otherwise offered to
all tenants in the Building free of charge;
(20) the cost of any
environmental clean-up ordered by any
applicable environmental authority or agency
to the extent the cost thereof exceeds
$100,000.
B. "Base Year OMC Sum" shall mean
the OMC Sum for the OMC Sum Base Year of
1999 computed by Landlord in conformity with
Subsection 5.A; provided that in the event
the Building's rentable square footage shall
not have been occupied by tenants and fully
used by them at any time during the OMC Sum
Base Year, the Base Year OMC Sum shall be
increased to an amount equal to that which
would have resulted if the Building
occupancy had been ninety-five percent (95%)
and had full Building utilization been made
during the entire OMC Sum Base Year.
Landlord and Tenant agree that the purpose
of increasing the Base Year OMC Sum to
reflect ninety-five percent (95%) occupancy
and full utilization of the Building is to
approximate the actual cost of operating and
maintaining the Building under such
conditions when, in fact, the Building may
not be so occupied and utilized during the
OMC Sum Base Year. On or before May 1, 2000,
or as soon thereafter as practicable,
Landlord shall notify Tenant in writing of
the Base Year OMC Sum, which notice shall
also set forth the method by which Landlord
computed the Base Year OMC Sum and show all
allocations of costs and expenses to the
Office Portion as expressed in Subsection
5.A. When the Base Year OMC Sum shall have
been established, Landlord and Tenant shall
thereupon execute a Supplement to this Lease
confirming the amount of the OMC Base Year
Sum.
8
C. "Taxes" shall mean all taxes,
assessments and governmental charges,
whether federal, state, county or municipal,
and whether general or special, ordinary or
extraordinary, foreseen or unforeseen,
imposed upon the Building (to the extent
allocable to the Office Portion of the
Building), all computed in accordance with
the Terms of this Lease. It is agreed
between Landlord and Tenant that Taxes shall
not include any taxes, including income
taxes (other than business privilege taxes
and gross receipts taxes), imposed on the
gross or net income of Landlord from the
operation of the Building. It is further
agreed between Landlord and Tenant that
Taxes shall be allocable to the Office
Portion of the Building by means of a
written appraisal of the Building prepared
or to be prepared for the entity which has
leased the Hotel Portion of the Building,
which appraisal reasonably shall allocate
the total Taxes assessed against the
Building among the Retail Portion, Office
Portion, and Hotel Portion of the Building
on the basis of the comparative assessment
values of each such portion of the Building.
Additionally, in the event that the Building
or the uses thereof are substantially
altered or modified at any time during the
Term of this Lease so that the original
allocation of total Taxes assessed against
the Building among the Retail Portion,
Office Portion, and Hotel Portion of the
Building becomes inequitable, Landlord shall
equitably determine a reallocation of Taxes
in light of such alteration or modification.
On or before May 1, 2000, or as soon
thereafter as practicable, Landlord shall
notify Tenant in writing of the extent to
which total Building Taxes are allocable to
the Office Portion. If at any time during
the Term the. present system of taxation of
property shall be changed or supplemented so
that in lieu of or in addition to the tax on
property there shall be assessed on Landlord
or the Building any tax of any nature which
is imposed in whole or in part, in
substitution for or in lieu of any tax which
would otherwise constitute a Tax, such shall
be deemed to be included within the term
Taxes, but only to the extent that the same
should be payable if the Building was the
only property of Landlord.
D. "Base Year Taxes" shall mean the
Taxes for the Taxes Base Year of 1999
computed by Landlord in conformity with
Subsection 5.C. On or before May 1, 2000, or
as soon thereafter as practicable, Landlord
shall notify Tenant in writing of the Base
Year Taxes, which notice shall also set
forth the method by which Landlord computed
the Base Year Taxes. When the Base Year
Taxes shall have been established, Landlord
and Tenant shall thereupon execute a
Supplement to this Lease confirming the
amount of the Base Year Taxes.
E. "Tenant's OMC Percentage" is that
percentage specified in Subsection 1.K. It
is agreed between Landlord and Tenant that
Tenant's OMC Percentage is that percentage
computed by dividing the square footage of
the Premises by the total square footage of
the Office Portion of the Building.
9
F. "Tenant's OMC" for a calendar
year included within the Term shall be
computed as Tenant's OMC Percentage
multiplied by the result of the subtraction
of the Base Year OMC Sum from the OMC Sum
for such calendar year.
G. "Tenant's Tax Percentage" is
that-percentage specified in Subsection l.M.
It is agreed between Landlord and Tenant
that Tenant's Tax Percentage is that
percentage computed by dividing the square
footage of the Premises by the total square
footage of the Office Portion of the
Building.
H. "Tenant's Tax Charge" for a
calendar year included within the Term shall
be computed as Tenant's Tax Percentage
multiplied by the subtraction of the Base
Year Taxes from the Taxes for such calendar
year.
SUBSECTION 6.B(3) At the end of the first (lst) sentence of
this TENANT'S OMC AND Subsection 6.B(3) of Lease entitled
TAX CHARGE/ "Tenant's OMC and Tax Charge/Procedures"
PROCEDURES insert the following:
which statement shall include a copy of all
tax bills for such calendar year and the
allocation thereof between the Retail
Portion, Office Portion and Hotel Portion of
the Building as well as an itemization of
the OMC Sum for such calendar year.
SUBSECTION 6.B(5) Subsection 6.B(5) of this Lease entitled
TENANT'S OMC AND "Tenant's OMC and Tax Charge/Procedures" is
TAX CHARGE/ hereby deleted.
PROCEDURES
SUBSECTION 7.A Subsection 7.A of this Lease entitled
IMPROVEMENT OF "Improvement of the Premises" is hereby
THE PREMISES deleted and the following substituted
therefor:
"Landlord and Tenant agree that Tenant shall
take the Premises in their "AS-IS",
"WHERE-IS" condition. Subject to Section 7.B
of the Lease, any work that Tenant performs
in the Premises shall be at Tenant's sole
cost and expense and in accordance with
EXHIBIT "D" of the Lease.
SUBSECTION 7.B Subsection 7.B of this Lease entitled
IMPROVEMENT OF "Improvement of the Premises" is hereby
THE PREMISES deleted and the following substituted
therefor:
10
Landlord shall reimburse Tenant on account
of the cost of performing Tenant's
improvement of the Premises (the "TENANT'S
WORK") in the amount and manner hereinafter
provided, the amount of such reimbursement
being referred to herein as "TENANT'S
ALLOWANCE."
A. Amount of Allowance. Tenant's Allowance
shall be $840,000.00. In addition to the
foregoing amount, Landlord shall reimburse
Tenant for the actual cost incurred by
Tenant to change and upgrade the Kastle
Security System located within the Premises
at a total cost to Landlord not to exceed
$10,000.00. Notwithstanding the foregoing,
to the extent that the cost and expense in
doing the work set forth and otherwise
specified in the Tenant Plans exceeds
$840,000.00 (plus the cost (not to exceed
$10,000.00) to change and upgrade the Kastle
Security System), then to the extent such
excess is not paid by Landlord, Tenant shall
pay all of such excess.
B. Payment of Allowance. Provided no Event
of Default exists, Landlord shall pay
$200,000 of the Tenant's Allowance to Tenant
within three (3) business days following
full execution of this Lease and after the
completion of Tenant's Work, as certified by
Tenant's architect; subject, however, to
Landlord's verification that Tenant's Work
has been completed, but in no event shall
Tenant's Allowance be paid to Tenant prior
to the Tenant having furnished to Landlord,
in form and substance acceptable to
Landlord, all of the following:
1. Tenant's affidavit that Tenant's
Work has been completed in complete
accordance with the Tenant's plans
as approved by Landlord.
2. The affidavit of the general
contractor performing Tenant's Work
that the Tenant's Work has been
fully completed in accordance with
the Tenant's plans, as approved by
Landlord, and that all
subcontractors, laborers and
materialmen engaged in or supplying
materials for Tenant's Work have
been paid in full.
3. An executed and acknowledged
Release of Mechanics's Liens
executed by Tenant's general
contractor and by every
subcontractor and supplier of labor
and/or materials engaged in or
supplying materials to Tenant's Work
specifying that such contractor has
been paid in full.
11
4. Properly issued certificates
evidencing acceptance or approval of
the demised premises by appropriate
governmental authorities, including
the underwriter's approval
certificate for the electrical work
done by Tenant and acceptance of the
sprinkler system.
Provided that no Event of Default exists,
the balance of the Tenant's Allowance, after
payment of the aforementioned sum of
$200,000, shall be credited against monthly
installments of Minimum Rent due and payable
commencing on January 1, 2001.
SUBSECTION 7.C Subsection 7.C of this Lease entitled
IMPROVEMENT OF "Improvement of the Premises" is hereby
THE PREMISES deleted.
SECTION 7.D Notwithstanding anything to the contrary
IMPROVEMENT OF contained in Section 7.D of this Lease
THE PREMISES/ entitled "Improvement of the Premises/
ALTERATIONS Alterations", during the Term of this Lease
or any extensions or renewals thereof,
Tenant shall have the right to make
non-structural interior alterations to the
Premises without Landlord's consent provided
(i) such non-structural interior alterations
do not exceed in any single calendar year
the sum of Two Hundred Thousand Dollars
($200,000.00), and (ii) such non-structural
interior alterations are made in accordance
with any and all statutes, ordinances, codes
or regulations of all governmental
authorities having jurisdiction over the
Premises.
The tenth (10th) sentence of Subsection 7.D
of this Lease entitled "Improvement of the
Premises/Alterations" is hereby deleted and
the following substituted therefor:
In all events, all such contractors
shall be required to employ only
such labor that will not cause labor
disturbances in the performance of
such work, carry workers'
compensation insurance, public
liability insurance and property
damage insurance in amounts, form
and content and with companies
reasonably satisfactory to Landlord.
SUBSECTION 7.F Subsection 7.F of this Lease entitled
IMPROVEMENT OF "Improvement of the Premises" is hereby
THE PREMISES deleted and the following substituted
therefor:
12
F. Condition. Tenant acknowledges and agrees
that, except as expressly set forth in this
Lease, there have been no representations or
warranties made by or on behalf of Landlord
with respect to the Premises or the Building
or with respect to the suitability of either
for the conduct of Tenant's business. The
taking of possession of the Premises by
Tenant conclusively establishes that the
Premises and the Building were at such time
in the condition required by this Lease and
in satisfactory condition, order and repair,
excepting only latent defects.
SECTION 8.A Section 8.A of this Lease entitled
BUILDING "Building Services/HVAC" is hereby deleted
SERVICES/HVAC and the following substituted therefor:
A. HVAC. During Normal Building Hours
(defined below), heating, ventilation and
air conditioning ("HVAC"). Tenant agrees to
cooperate fully with Landlord and to abide
by all the regulations and requirements
which Landlord may reasonably prescribe for
the proper functioning and protection of the
HVAC systems, which regulations and
requirements necessarily include a
prohibition against the use of the Premises
or equipment or fixtures which would
generate heat from loads in excess of four
(4) watts per square foot of total connected
load without the prior consent of Landlord,
which consent may not be unreasonably
withheld. As used herein, "Normal Building
Hours" shall mean Monday to Friday 8:00 A.M.
to 6:00 P.M. and Saturdays from 8:00 A.M. to
1:00 P.M. (excluding, however, Building
holidays). Upon Tenant's written request,
Landlord shall provide heating ventilation
and air conditioning after normal business
hours, and Tenant's cost for heating,
ventilation and air conditioning service
after Normal Building Hours shall be equal
to twenty dollars ($20.00) per hour per
floor, increased annually after the first
Lease Year in proportion to increases in the
Consumer Price Index (Philadelphia Area -
All Urban Consumers 1982-84=100) using a
base month and year of the commencement date
(the "CPI").
SECTION 8.B Section 8.B of this Lease entitled "Building
BUILDING SERVICES/ Services/Electricity" is hereby deleted and
ELECTRICITY the following substituted therefor:
13
B. Electricity. Electric current for
(1) the level of illumination and fixtures
required under the Tenant's Plans; and (2)
normal small business machines (including,
without limitation, word processors,
desk-top computers, and duplication
machines), connected to building standard
120-volt single phase outlets. However,
Landlord's agreement to furnish electricity
does not include electricity in excess of
six (6) watts per square foot for any use,)
equipment or fixture requiring a greater
voltage than 120 volt single phase. Landlord
shall have the right, but not the
obligation, at any time during the Term to
separately meter or submeter Tenant's
consumption of electricity at the Premises;
provided that Landlord shall pay all costs
of installation, including wiring and
separate metering. In such event, Tenant
shall pay the cost (at the "General Service"
rate, as the same exists from time to time,
of Philadelphia Electric Company) of
Tenant's measured electric consumption in
excess of six (6) watts per square foot as
additional rent. Landlord hereby covenants
with Tenant that six (6) watts per square
foot is sufficient for normal general office
use.
SECTION 10.A In the second (2nd) sentence of Section 10.A
CARE OF PREMISES/ of this Lease entitled "Care Premises/
LANDLORD'S Landlord's Maintenance" the parenthetical
MAINTENANCE "(under the circumstances)" is hereby
inserted after the word "time".
The fourth (4th) sentence of Section 10.A of
this Lease entitled "Care of
Premises/Landlord's Maintenance" is hereby
prefaced with the following words:
Provided Landlord proceeds with reasonable
diligence to make necessary repairs,
SECTION 12 Section 12 of this Lease entitled
SUBLETTING AND "Subletting and Assigning" is hereby deleted
ASSIGNING and the following substituted therefor:
14
A. General Restriction. Except as
permitted pursuant to this Section 12,
Tenant shall not assign or hypothecate this
Lease or sublet the Premises or any part
thereof. Notwithstanding the foregoing,
Landlord recognizes that Tenant may desire
to assign this Lease or sublet a portion of
the Premises, and Landlord herewith approves
any such transfer provided an event of
default does not exist at the time of such
transfer and, further provided (1) Tenant
shall have given to Landlord at least ten
(10) days advance written notice of such
transfer, which notice contains all of the
information and documentation referred to in
Subsection 12.B; and (2) Landlord shall have
the right to approve Tenant's transferee,
which approval shall not be unreasonably
withheld or delayed; and (3) Tenant shall
continue to remain fully liable for the
performance of all the terms, conditions and
obligations to be performed by Tenant under
this Lease; and (4) in the event Tenant
assigns this Lease or sublets more than
14,415 rentable square feet of the Premises,
Landlord shall have the right and option,
exercisable by written notice to Tenant
within ten (10) days after Landlord's
receipt of Tenant's notice referred to in
Subsection 12.B, of reacquiring the portion
of the Premises proposed to be assigned or
sublet and of terminating the Lease with
respect to such portion (the "Take-back
Option"), and, in the event that Landlord
fails to exercise such option, Tenant shall
pay Landlord the net rents or other
consideration Tenant receives from such
transferee (i.e., net of costs and expenses
incurred by Tenant including, without
limitation, broker's commissions, legal fees
and expenses, fit-up costs, payments to any
assignee or subtenant or assumption of third
party obligations owing by such subtenant or
assignee) in excess of the rents reserved
under this Lease, as consideration for the
right to so assign or sublet.
B. Notice to Landlord. If, at any
time or from time to time during the Term,
Tenant desires to assign this Lease or
sublet all or any portion of the Premises,
Tenant shall give written notice to Landlord
thereof, which notice shall contain (i) the
name, address and description of the
business of the proposed assignee or
subtenant, (ii) if other than a Permitted
Transferee, its most recent financial
statement and other evidence of financial
responsibility, (iii) its intended use of
the Premises, and (iv) the terms and
conditions of the proposed assignment or
subletting.
C. Permitted Transferee. Anything in
Subsections 12.A and 12.B to the contrary
notwithstanding, (i) Tenant, free of the
Take-back Option, without notice to Landlord
and without Landlord's consent or approval,
may sublet all or portions of the Premises
to one or more "Affiliates" (hereinafter
defined), any of the foregoing herein
referred to as a "Permitted Transferee"; and
(ii) an assignment of this Lease which
occurs by operation of law as a result of
merger or consolidation shall not be in
violation of this Lease, shall not require
Landlord's consent and shall not be subject
to the Take-back Option. "Affiliate" means
any entity controlled by, under the common
control with or controlling Tenant (or the
persons controlling Tenant) and includes any
entity whose building Tenant operates or
manages.
15
D. Future Compliance. Regardless of
Landlord's consent, no assignment or
subletting shall release Tenant of Tenant's
obligation or alter the primary liability of
Tenant to pay the rent and to perform all
other obligations to be performed by Tenant
hereunder. The acceptance of rent by
Landlord from any other person shall not be
deemed to be a waiver by Landlord of any
provision hereof. Consent to one assignment
or subletting shall not be deemed consent to
any subsequent assignment or subletting. In
the event of default by any transferee of
Tenant in the performance of any of the
terms hereof, Landlord may proceed directly
against Tenant without the necessity of
exhausting remedies against such transferee.
SECTION 13 Section 13 of this Lease entitled "Fire or
FIRE OR OTHER Other Casualty" is hereby deleted and the
CASUALTY following substituted therefor:
A. General. Subject to the
provisions of Subsections 13.B and 13.C, if
the Premises and/or any portion(s) or
components of the Building outside the
Premises which are reasonably necessary to
provide Tenant with normal access to and
from the Premises or which provide Building
Services to the Premises and the Office
Lobby, such as, for example, the Building
entrances, lobbies, elevators, stairways,
hallways and electrical, plumbing and HVAC
systems and equipment, (together or
separately, the "Significant Building
Components") is damaged by fire or other
casualty, the damaged areas shall be
repaired by and at the expense of Landlord
to at least as good a condition as that
which existed immediately prior to such
damage and the rent until such repairs shall
be made shall be apportioned from the date
of such fire or other casualty according to
the part of the Premises which is usable by
Tenant in a manner substantially similar to
that which prevailed before the damage.
Landlord agrees to commence the repair of
such damage within sixty (60) days after the
occurrence of such damage and complete such
repair in an expeditious manner, but in any
event (subject to the provisions of
Subsection 30.A) within twelve (12) months
after the occurrence of such damage. In the
16
event Landlord does not so repair such
damage, Tenant shall have the right to
terminate this Lease provided, however, that
Tenant's right to terminate this Lease must
be exercised no later than the last day of
the month following the month in which the
twelve (12) month period, as it may have
been extended by application of the
provisions of Subsection 30.A, expires.
Notwithstanding anything in this Subsection
13.A to the contrary, if Landlord does not
restore the Premises or the affected portion
to tenantability within two hundred seventy
(270) days after the date of said casualty,
Tenant may then terminate this Lease,
retroactive to the date of the casualty. If
Tenant does not so exercise its right, such
right to cancel this Lease shall
automatically end and be of no further force
or effect, it being understood that time is
of the essence in connection therewith.
Landlord shall not be liable (but Tenant
shall be entitled to rent abatement as
aforesaid) for any inconvenience or
annoyance to Tenant or injury to the
business of Tenant resulting in anyway from
such damage or the repair thereof. Tenant
acknowledges notice that (1) except for
alterations and improvements to be paid for
by Landlord pursuant to the terms and
conditions of this Lease, Landlord shall not
obtain insurance of any kind on Tenant's
furniture or furnishings, equipment,
fixtures, alterations, improvements and
additions ("Tenant's Fixtures and
Improvements"), (2) it is Tenant's
obligation to obtain such insurance at
Tenant's sole cost and expense, and (3)
Landlord shall not be obligated to repair
any damage to Tenant's Fixtures and
Improvements, replace the same or otherwise
do any work thereto unless (i) such) damage
is caused by the negligence or willful
misconduct of Landlord, its agents, servants
or employees and (ii) such damage is not
covered by insurance which Tenant is
required to maintain under this Lease.
B. Reconstruction. If, (1) the
Premises are rendered substantially
untenantable or any Significant Building
Component is rendered substantially unusable
or inoperable by reason of such fire or
other casualty and the same reasonably could
not be repaired and restored within one (1)
year from the occurrence of the damage or
(2) twenty percent (20%) or more of the
Premises is damaged by said fire or other
casualty and less than six (6) months would
remain of the Term or any extension thereof
upon completion of the required repairs
thereto, Landlord or Tenant shall have the
right, to be exercised by notice in writing
delivered to the other within thirty (30)
days after such occurrence, to elect to
terminate this Lease and, in such event,
this Lease, the Term and the tenancy hereby
created shall cease as of the date, unless
Tenant shall have remained in occupancy of
the Premises for its general business
purposes beyond the date of the occurrence
of the damage, in which case rent shall be
adjusted to the later date on which such
occupancy ended.
17
C. Substantial Damage. If the
Building, in the sole reasonable opinion of
the Landlord, shall be substantially damaged
by fire or other casualty (regardless of
whether or not the Premises were damaged by
such occurrence), Landlord shall have the
right, to be exercised by notice in writing
delivered to Tenant within sixty (60) days
from and after such occurrence, to terminate
this Lease as of a date, if the Premises
have not been damaged and Tenant has been
able to use and occupy same substantially as
before the damage, at least ninety (90) days
after the notice; and, in such event, this
Lease, the Term and the tenancy hereby
created shall cease as of the date of such
termination unless terminated as of the date
of such occurrence in accordance with
Subsection 13.B hereof, the rent to be
adjusted as of the date of such termination.
SECTION 17.A Section 17.A. of this Lease entitled
DEFAULT AND "Default and Remedies/Events of Default" is
REMEDIES/EVENTS hereby deleted and the following substituted
OF DEFAULT therefor:
A. Events of Default. The occurrence
of any of the following shall constitute a
material breach of the Lease by Tenant and
an "Event of Default":
(1) [Deleted.]
(2) a failure by Tenant to
pay, when due, any installment of
rent hereunder or any such other sum
herein required to be paid by Tenant
where such failure continues for ten
(10) days after written notice
thereof is received by Tenant:
(3) a failure by Tenant to
observe and perform any other
provision or covenant of this Lease
to be observed or performed by
Tenant, where such failure continues
for thirty (30) days after written
notice thereof is received by Tenant
provided, however, that if the
nature of the default is such that
the same cannot reasonably be cured
within such thirty (30) day period,
there shall be no event of default
if Tenant shall within such period
commence such cure and thereafter
diligently prosecute the same to
completion;
(4) the filing of a
petition by or against Tenant for
adjudication as a bankruptcy or
insolvency or for its reorganization
or for the appointment pursuant to
any local, state or federal
bankruptcy or insolvency law of a
receiver or trustee of Tenant's
property; or, an assignment by
Tenant for the benefit of creditors;
or, the taking possession of the
property of Tenant by any local,
state or federal governmental
officer or agency or court-appointed
official for the dissolution or
liquidation of Tenant or for the
operating, either temporary or
permanent, of Tenant's business,
provided, however, that if any such
action is commenced against Tenant
the same shall not constitute a
default if Tenant causes the same to
be dismissed or discharged within
ninety (90) days after the filing of
same; and
18
(5) the maintenance or
storage by Tenant of any waste,
waste products, radioactive waste,
polychlorinated biphenyls, asbestos,
toxic or hazardous material or any
other substance of any kind which is
regulated by any law, statute,
ordinance, rule or regulation
(collectively "Waste") in the
Premises, except in compliance with
governmental regulations applicable
to such maintenance or storage.
SECTION 17.B. Section 17.B of this Lease entitled "Default
DEFAULT AND and Remedies/Remedies of Landlord" is
REMEDIES/ hereby deleted and the following substituted
REMEDIES OF therefor:
LANDLORD
B. Remedies of Landlord.
(1) Upon the occurrence of
any event of default as defined in Section
17.A which is not cured with Landlord's
approval:
(a) Landlord may cure
for the account of Tenant, after notice is
received by Tenant setting forth the
curative acts Landlord intends to undertake,
any such event of default and immediately
recover as additional rent any expenditures
reasonably made and the amount of any
obligations reasonably incurred in
connection therewith, plus per annum
interest equal to three (3) points above the
prime rate of Continental Bank of
Norristown, Pennsylvania as the same may
exist from time to time (the "Prime Rate"),)
from the date of any such expenditure;
(b) Landlord, at its
option, may serve notice upon Tenant that
this Lease and the then unexpired Term
hereof shall cease and expire and become
absolutely void on the date specified in
such notice, to be no less than thirty (30)
days after the date of such notice, without
any right on the part of the Tenant
thereafter to save the forfeiture by payment
of any sum due or by the performance of any
term, provision, covenant, agreement or
condition broken; and, thereupon and at the
expiration of the time limit in such notice,
this Lease and the Term hereof granted, as
well as the right, title and interest of the
Tenant hereunder, shall wholly cease and
expire and become void in the same manner
and with the same force and effect as if the
date fixed in such notice were the date
herein stated for expiration of the Term.
Thereupon, Tenant shall immediately quit and
surrender to Landlord the Premises by
summary proceedings, detainer, ejectment or
otherwise and remove itself and all other
occupants thereof and, at Landlord's option,
any property thereon without being liable to
indictment, prosecution or damages therefor.
No such expiration or termination of this
Lease shall relieve Tenant of liability for
damages arising because of Tenant's breach
of this Lease;
19
(c) Landlord may, upon
at least thirty days (30) days notice after
the occurrence of any event of default,
re-enter and repossess the Premises and any
part thereof with or without process of law,
provided no undue force shall be used; and
in such case, Landlord shall attempt in its
own name, as agent for Tenant, to relet all
or any part of the Premises for and upon
such terms and conditions to such persons,
firms or corporations and for such period or
periods as Landlord, in its reasonable
discretion, shall determine. The failure of
Landlord to relet the Premises or any part
or parts thereof shall not release or affect
Tenant's liability hereunder, nor shall
Landlord be liable for failure to relet, or
in the event of reletting, or for failure to
collect the rent thereof. No such re-entry
or taking possession of the Premises shall
be construed as an election on Landlord's
part to terminate this Lease unless a
written notice of such election by Landlord
is given to Tenant. For the purpose of such
reletting, Landlord may decorate or make
repairs, changes, alterations or additions
in or to the Premises to the extent deemed
by Landlord desirable or convenient. Any
reasonable brokerage and legal fees expended
by Landlord shall be charged to and be
payable by Tenant as additional rent
hereunder. Any sums collected by Landlord
from any new tenant obtained on account of
the Tenant shall be credited against the
balance of the rent due hereunder as
aforesaid. Tenant shall pay to Landlord
monthly, on the days when the rent would
have been payable under this Lease, the
amount due hereunder less the amount
obtained by Landlord from such new tenant.
(2) Landlord shall have the
right of injunction, in the event of a
breach or default or threat thereof by
Tenant of any of the agreements, conditions,
covenants or terms hereof, to restrain the
same and the right to invoke any remedy
allowed by law or in equity, whether or not
other remedies, indemnity or reimbursements
are herein provided. The rights and remedies
given to Landlord in this Lease are
distinct, separate and cumulative remedies;
and no one of them, whether or not exercised
by Landlord, shall be deemed to be in
exclusion of any other.
20
(3) If proceedings shall be
commenced by Landlord to recover possession
under the Acts of Assembly, either at the
end of the Term or any extension thereof or
on sooner termination thereof, or for
non-payment of rent or any other reason,
Tenant specifically waives the right to the
three (3) months notice and/or the fifteen
(15) or thirty (30) days notice required by
the Act of April 5, 1957, No. 20, and agrees
that thirty (30) days notice shall be
sufficient in either or any such case. The
right to enforce all of the provisions of
this Lease herein above provided for may be
exercised by any assignee of Landlord's
right, title and interest in this Lease, in
such assignee's own name, notwithstanding
the fact that any or all assignments of said
right, title and interest may not be
executed and/or witnessed in accordance with
the Act of Assembly and any and all laws
regulating the manner and/or form in which
such assignments shall be executed and
witnessed.
(4) Tenant, for itself and
on behalf of any and all persons claiming
through or under it (including creditors of
all kinds), does hereby waive and surrender
all right and privilege which they or any of
them might have under or by reason of any
present or future law, to redeem the
Premises or to have a continuance of this
Lease for the Term, as it may have been
extended after having been dispossessed or
ejected therefrom by process of law or under
the terms of this Lease or after the
termination of this Lease as herein
provided.
(5) Neither this Lease nor
any rights or privileges hereunder shall be
an asset of Tenant in any bankruptcy,
insolvency or reorganization proceeding. If
Landlord shall not be permitted to terminate
this Lease because of the provisions of the
United States Bankruptcy Code, Tenant or any
trustee for it shall, within ninety (90)
days from the commencement of the
proceeding, assume or reject this Lease
unless all defaults hereunder shall have
been cured, Landlord shall have been
compensated for any monetary loss resulting
from such default and Landlord shall be
provided with reasonably adequate assurance
of full and timely performance of all
provisions, terms and conditions of this
Lease on the part of Tenant to be performed.
21
(6) The failure or delay on
the part of either party to enforce or
exercise at any time any of the provisions,
rights or remedies in the Lease shall in no
way be construed to be a waiver thereof, nor
in any way to affect the validity of this
Lease or any act hereof, or the right
provision, right or remedy. No waiver of any
breach or default of this Lease shall be
held to be a waiver of any other or
subsequent breach or default. The acceptance
by Landlord of rent at a time when the rent
is in default under this Lease shall not be
construed as a waiver of such default. The
acceptance by Landlord of a lesser amount
than the rent due shall not be construed to
be other than a payment on account of the
rent then due, nor shall any statement on
Tenant's check or any letter accompanying
Tenant's check be deemed an accord and
satisfaction, and Landlord may accept such
payment without prejudice to Landlord's
right to recover the balance of the rent due
or to pursue any other remedies provided in
this Lease. No act or thing done by Landlord
or Landlord's agents or employees during the
Term and any extension thereof shall be
deemed an acceptance of a surrender of the
Premises, and no agreement to accept such a
surrender shall be valid unless in writing
and signed by Landlord. Nothing contained in
this Lease shall, however, preclude or limit
such defenses, rights or remedies as Tenant
may have in law or in equity or by rule of
Court.
SECTION 18 Section 18 of this Lease entitled
SUBORDINATION "Subordination" is hereby deleted and the
following substituted therefor:
A. Generally. Subject to the
provisions of Subsection 18.C, this Lease
shall be subject and subordinate at all
times to the lien of any mortgages and/or
ground rents now placed on the Premises or
the Building without the necessity of any
further instrument or act on the part of the
Tenant to effectuate such subordination, but
the Tenant covenants and agrees to execute
and deliver upon demand such further
instrument or instruments evidencing such
subordination of this Lease to the lien of
any such mortgage or mortgages and/or ground
rents as shall be desired by any such
mortgagee or other person.
B. Rights of Mortgagee. In the event
of any act or omission of Landlord which
would give Tenant the right to cancel or
otherwise terminate this Lease, or to claim
a partial or total eviction, Tenant shall
not exercise such right:
22
(1) Until it has given
written notice of such act or omission to
the holder of each such mortgage or ground
lease whose name and address shall
previously have been furnished to Tenant in
writing; and
(2) Until a reasonable
period for remedying such act or omission
shall have elapsed following the giving of
such notice (which reasonable period shall
in no event be less than the period to which
Landlord would be entitled under this Lease
or otherwise, after similar notice, to
effect such remedy).
C. Non-Disturbance Agreement.
Landlord covenants and agrees to use
Landlord's best efforts to obtain and
furnish to Tenant, within thirty (30) days
of the date of this Lease, agreement(s)
("Non-Disturbance Agreement") executed and
acknowledged in proper recordable form
except for execution on behalf of Tenant,
from (i) the holder(s) of any mortgage now
encumbering the Building, and (ii) from the
lessor(s) of any underlying leasehold estate
or fee owner under an installment purchase
agreement pursuant to which Landlord
directly or indirectly derives its authority
to execute this Lease (in either or any of
such cases, an "Existing Holder") whereby
each Existing Holder agrees to not disturb
Tenant in its rights, use and possession of
the Premises and Building under this Lease
or to terminate this Lease, except to the
extent permitted to Landlord by the terms of
this Lease, notwithstanding the foreclosure
or the enforcement of the mortgage or
termination or other enforcement of an
underlying lease or installment purchase
agreement. Failure of the Landlord to so
timely furnish the Non-Disturbance
Agreement(s) to Tenant shall be a material
default by Landlord under this Lease, and
Tenant as Tenant's sole right and remedy,
shall be entitled to terminate this Lease
because of such default, by written notice
to Landlord.
D. Future Mortgages. Tenant further
agrees that this Lease shall be subject and
subordinate to the lien of any mortgages
hereafter placed upon the Premises or the
Building, provided that the holder thereof
shall have entered into a Non-Disturbance
Agreement with Tenant as described in
Subsection 18.C, which Non-Disturbance
Agreement shall be recorded and which
Non-Disturbance Agreement also may provide
for the subordination of this Lease and
Tenant's agreement to attorn as part of its
terms.
23
SECTION 19.B In the first (1st) sentence of Section 19.B
SURRENDER AND of this Lease entitled "Surrender and
HOLDING OVER/ Holding Over/Hold Over" the words "two
HOLD OVER hundred percent (200%)" are hereby deleted
and the words "one hundred fifty percent
(150%)" substituted therefor.
SECTION 20 Section 20 of this Lease entitled "Delay in
POSSESSION Possession" is hereby deleted and the
following substituted therefor:
20. POSSESSION. Tenant acknowledges that
Tenant is presently in possession of the
Premises as of the date of this Lease.
SECTION 21.F The following is hereby added to the end of
CERTAIN RIGHTS Section 21.F: Notwithstanding anything to
RESERVED TO the contrary contained in Section of this
LANDLORD/ Lease entitled "Certain Rights Reserved to
ACCESS TO Landlord/ Access to Premises", Landlord,
PREMISES agents and their respective employees and
shall not have the right to show the
Premises to prospective tenants of the
Building without the prior consent of Tenant
first obtained, except that no such consent
need be obtained by Landlord during the last
six (6) months of the Term or any extensions
or renewals thereof.
SECTION 24 Section 24 of this Lease entitled
SUBSTITUTE "Substitute Premises" is hereby deleted.
PREMISES
SECTION 25 The provisions of Section 25 of this Lease
ESTOPPEL entitled "Estoppel Statement" are hereby
STATEMENT made reciprocal so that Landlord shall
execute, acknowledge and deliver to Tenant
such a statement within ten (10) days after
written request by Tenant therefor.
SECTION 32 The following Section 32 entitled "Storage
STORAGE SPACE Space" is hereby added to this Lease:
32. STORAGE SPACE.
A. Definitions.
(1) "Storage Space" means
and shall be what Landlord and Tenant agree
shall be Tenant's portion of the storage
area set aside by Landlord for storage by
Office Portion tenants of files and other
materials (the "Building Storage Space"),
but Tenant shall have the right to at least
two thousand sixty-seven (2,067) square feet
of Building Storage space.
24
(2) "Storage Space Rent"
means and shall be the product of Seven and
No/100 Dollars ($7.00) per square foot of
Storage Space per Year multiplied by the
square footage of the Storage Space.
(3) "Storage Space
Commencement Date" shall be the later of:
(a) the Commencement Date; or (b) the date
Tenant first uses the Storage Space.
(4) "Storage Space Term"
means the period commencing on the Storage
Space Commencement Date but otherwise
coterminous with the Term.
B. Storage Space Leasing. Landlord
hereby leases to Tenant, and Tenant hereby
accepts, the Storage Space for the Storage
Space Term at the Storage Space Rent and
otherwise upon the same terms and conditions
during the Storage Space Term as apply to
the Premises (including without limitation
the provisions of Section 17 of this Lease)
except as herein below stated:
(1) the Storage Space shall
not be included within the square footage of
the Premises for the purposes of computing
Tenant's OMC and Tenant's Tax Charge but
Tenant shall pay to Landlord the
proportionate share (based on the ratio of
Storage Space to the square footage of
Building Storage Space) of increases in
operating and maintaining the Building
Storage Space over the first (1st) full
calendar year in which the Storage Space is
available for use by Tenant.
(2) the Storage Space Rent
shall be no more than Twelve and 70/100
Dollars ($12.70) per square foot of Storage
Space during the "Extended Term" (defined in
Section 32 of this Lease).
SECTION 33 Section 33 entitled "Extension Right" is
EXTENSION RIGHT hereby added to this Lease:
25
33. EXTENSION RIGHT.
A. Tenant shall have the right (the
"Extension Right") to extend the Term for
three (3) periods of five (5) years
following the expiration of the Term (the
"Extension Period") on the condition that:
(1) Tenant shall exercise
the Extension Right by giving Landlord
written notice (the "Extension Notice") of
Tenant's election to extend at least six (6)
months prior to the commencement of the
applicable Extension Period (an "Extension
Period"), and there exists no event of
default under the Lease; and
(2) if the Extension Right
is exercised by Tenant as set forth in
Subsection 33.A(l) hereof, the Extension
Period shall commence on the expiration of
the Tenth (10th) Year or the Fifth (5th)
Year of the prior Extension Period; and
(3) all terms and
conditions of the Lease, including those
containing the right and remedy of Landlord
to confess judgment for possession, shall be
applicable during the Extension Periods
except that Minimum Rent for the Extension
Periods shall be determined as provided in
Section 33.B hereof.
B. If the Tenant exercises the
Extension Right as provided in this Section
33, then during each Extension Period the
Minimum Rent shall be equal to the product
of the "Fair Rental Value" (hereinafter
defined) on a square footage basis
multiplied by the then square footage of the
Premises (exclusive of any Storage Space).
"Fair Rental Value" means what Landlord and
Tenant agree to be the fair rental value of
the Premises during the subject Extension
Period taking into consideration (i)
prevailing rental market conditions
(including concessions such as "free rent"
and other allowances) for commercial office
space comparable to the Premises located in
the Building and elsewhere in the Center
City area of Philadelphia, Pennsylvania;
(ii) the fact that Tenant would remain in
occupancy of the Premises (e.g., no "down
time" or loss of rental income, no payment
of brokerage commissions for a new tenant,
no construction or fit-up expense to prepare
the space for a new tenant, and no moving or
other expenses incurred by Tenant in
connection with a relocation); and, (iii) a
step up of the Base Years for the OMC Sum
and Taxes (i.e., Subsections l.J(2) and
l.L(2)] to the most recent calendar year
prior to the commencement of the subject
Extension Period. If Landlord and Tenant are
unable to agree on the Minimum Rent for the
Extension Period within thirty (30) days
after Tenant gives Landlord the Extension
26
Notice, the Minimum Rent for the Extension
Period shall be determined by appraisal as
hereinafter set forth; provided that Tenant
shall have the right to revoke its exercise
of the Extension Right for the Extension
Period by written notice to Landlord at any
time during such thirty (30) day period and,
in which event, the Term shall expire on the
expiration date of the Term. In the event
the Minimum Rent for the Extension Period is
required to be established by appraisal, if
Landlord and Tenant cannot agree on an
appraiser, then Landlord and Tenant each
shall nominate one (1) real estate appraiser
(MAI or equivalent) located in the) City of
Philadelphia to appraise and determine the
air Rental Value of the Premises during the
Extension Period. If the two (2) appraisers
nominated and appointed by the parties shall
differ in judgment as to such Fair Rental
value, then they shall appoint a third (3rd)
reputable and impartial real estate
appraiser MAI or equivalent) located in the
City of Philadelphia to determine such Fair
Rental Value. If the appraisers selected by
Landlord and Tenant are unable to agree on a
third (3rd) appraiser, the third appraiser
shall be selected by the President of the
American Institute of Real Estate Appraisers
or if not in existence at the time in
question, an equivalent successor person and
organization). The determination of the
appraisers as to the Fair Rental Value of
the Premises for the Extension Period shall
be final and binding on Landlord and Tenant,
and the Minimum Rent during the Extension
Period shall be so determined. The cost of
the appraisal shall be borne equally by
Landlord and Tenant. In the event the
Minimum Rent for the Extension Period has
not been determined pursuant to this Section
33.B prior to the commencement of the
Extension Period, Tenant shall continue to
pay Landlord the rent payable for the
Premises pursuant to this Lease for the Year
immediately preceding until the Minimum Rent
for the Extension Period is determined. The
Minimum Rent for the Extension Period shall
be payable retro-actively from the
commencement of the Extension Period
notwithstanding the fact that the Minimum
Rent for the Extension Period may not be
determined as of that time. Within thirty
(30) days after the determination is made
and Tenant has received notice thereof [or,
if later, on or before the first day of the
month following the end of the thirty (30)
day period] Tenant shall pay to Landlord, if
the Minimum Rent for the Extension Period is
determined to be higher than that payable
during the preceding Year, the amount of the
difference; but if the same is lower, the
amount of the resulting overpayment in the
interim shall be credited against the next
succeeding installments of Minimum Rent
payable by Tenant.
27
C. If Tenant does not exercise the
Extension Right at all or does not properly
exercise the Extension Right, the Extension
Right shall automatically be null, void and
of no force or effect whatsoever. The terms
"Premises" and "Extended Term" as used
herein include the Additional Space and
Additional Space Term if the Additional
Space is part of the Premises.
SECTION 34 The following Section 34 entitled
LANDLORD'S "LANDLORD'S CONSENT" is hereby added to this
CONSENT Lease:
Wherever in this Lease the consent of the
Landlord is required, such consent shall not
be unreasonably withheld or delayed unless
otherwise stated.
SECTION 35 The following Section 35 entitled
RENTABLE VERSUS "R/U FACTOR" is hereby added to this Lease:
USEABLE SQUARE
FOOTAGE Landlord and Tenant acknowledge and agree
that the rentable square footage of the
Premises as currently contemplated by this
Lease is the amount set forth in Section
1.C., and the usable square footage of the
Premises as contemplated by this Lease is
_____________ square feet (which when
multiplied by __________ produces the
square footage set forth in Section 1.C
hereof). All calculations made pursuant to
this Lease have been computed on rentable
square footage, except when expressly based
on usable square footage.
28
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed by their duly authorized officers or representatives as of the day and
year first above written.
LANDLORD:
BELLEVUE ASSOCIATES,
a Pennsylvania limited partnership
WITNESS: By: BELLEVUE INC.,
a Pennsylvania corporation
its general partner
/s/ xxxxxxxxxxxxxxxx By: /s/ George F. Rubin
- ------------------------- -----------------------------
Name: GEORGE F. RUBIN
Title: Treasurer/Secretary
TENANT:
WITNESS: PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST,
a Pennsylvania corporation
/s/ Margaret M. Small By: /s/ Jonathan B. Weller
- ------------------------- --------------------------------------
Name: Jonathan B. Weller
Title: President
29
FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE ("AMENDMENT") is made effective as
of June 18, 2002 by and between BELLEVUE ASSOCIATES ("LANDLORD") and
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST ("TENANT").
BACKGROUND
A. Under an Office Lease dated December 9, 1988, as amended and
restated by that certain Amended and Restated Office Lease dated July 12, 1999
(as amended, the "LEASE"), Tenant, as successor in interest to Strouse,
Greenberg & Co., Inc., leased the entire third floor and a portion of the fourth
floor of the building known as "The Bellevue," located at Broad Street at
Walnut, Philadelphia, Pennsylvania (the "BUILDING"). Except as otherwise
provided in this Amendment, or as the context may require, the capitalized terms
used in this Amendment shall have the same meanings given to them in the Lease.
B. Tenant desires to lease from Landlord all that certain space
consisting of approximately two thousand nine hundred (2,900) rentable square
feet located on the 2nd floor of the Building and depicted on EXHIBIT "A"
attached hereto (the "EXPANSION SPACE").
C. In this Amendment, Landlord and Tenant desire to set forth the terms
and conditions under which the Lease is to be amended with respect to the
Expansion Space.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals, which by
this reference thereto are hereby incorporated into the body of this Amendment,
the mutual promises set forth below, and other good and valuable consideration,
the receipt, sufficiency and fairness of which are hereby acknowledged, Landlord
and Tenant, intending to be legally bound, agree as follows:
1. LEASE CERTIFICATION.
1.1 Landlord and Tenant each reaffirm and certify as follows:
(i) The Lease is in full force and effect.
(ii) Except as provided in this Amendment, the Lease, as defined
above, has not been further supplemented, modified or amended.
(iii) Tenant has no defenses, counterclaims or offsets under the
Lease or against rent or other charges due or to become due under
the Lease.
(iv) Except as may be expressly provided for in this Amendment,
Tenant is not entitled to any free rent, rental rebates or other
concessions under the Lease which have not been exhausted.
(v) Landlord is not in default under the Lease, and no event has
occurred which, with the giving of notice or passage of time, or
both, would constitute a default by Landlord under the Lease.
-1-
(vi) Tenant is not in default under the Lease, and no event has
occurred which with the giving of notice or passage of time, or
both, would constitute a default by Tenant under the Lease.
(vii) Tenant has not assigned the Lease or any interest therein, or
subleased any portion of the Premises, and has not entered into any
agreement for these purposes.
(viii) Tenant has no rights of refusal, offer, expansion or
extension with respect to the Lease, the Premises or the Building
except as expressly set forth in the Lease or this Amendment.
1.2 RELIANCE. Tenant agrees that Landlord and its mortgagees may rely
upon the statements made in the preceding subparagraph.
2. EXPANSION OF PREMISES.
2.1 Effective as of the date Landlord delivers to Tenant possession of
the Expansion Space (said date being referred to herein as the "EXPANSION SPACE
COMMENCEMENT DATE"), Landlord hereby demises and leases unto Tenant, and Tenant
hereby leases and takes the Expansion Space from Landlord, for the Term, at the
rent and upon the terms and conditions hereinafter set forth. Landlord shall
endeavor to deliver possession of the Expansion Space to Tenant on or before
June 1, 2002 (the "EXPANSION SPACE DELIVERY TARGET DATE"). Landlord shall not,
however, be liable for any loss, liability, cost, damage or expense of any kind
or type (including without limitation attorneys' fees) resulting from Landlord's
failure to deliver possession of the Expansion Space on or before the Expansion
Space Delivery target Date by reason of any holding over or wrongful retention
of possession by any current or previous tenants or occupants of the same or of
other space within the Building, or due to any other cause beyond the reasonable
control of Landlord, nor shall such failure impair the validity of the Lease or
this Amendment.
2.2 Subject to the terms of Section 5 of this Amendment which defines
the date on which Tenant is obligated to commence paying Rent for the Expansion
Space, from and after the Expansion Space Commencement Date through the
expiration of the Lease or the earlier termination thereof: (i) the term
"Premises" wherever it appears in the Lease, shall include the Expansion Space
and such space shall be subject to the terms of the Lease as modified by this
Amendment; and (ii) Section 1.C of the Lease shall be amended so that the area
of the Premises set forth in such Section shall be increased by two thousand
nine hundred (2,900) rentable square feet of space.
3. CONDITION OF SPACE. Tenant acknowledges and agrees that there have been no
representations or warranties made by or on the behalf of Landlord with respect
to the Expansion Space, either with respect to the suitability of the Expansion
Space for the conduct of Tenant's business or otherwise. Landlord and Tenant
agree that Tenant shall take the Premises "AS-IS", "WHERE-IS" condition.
4. TERM. The Term of the Lease shall not be modified by this Amendment and shall
expire for the entire Premises (including the Expansion Space) on the date set
forth in the Lease or effective as of any earlier termination thereof as
provided by the Lease.
5. RENT. In addition to the Rent and other charges Tenant is obligated to pay
pursuant to the Lease, commencing on August 1, 2002, Tenant agrees to pay
Landlord annually (in the manner required by the Lease) Minimum Rent for the
Expansion Space at the rate and in the amounts set forth in the table below:
-2-
Base Rent Per Base Rent Per Base Rent for
Period Rentable Square Foot Month Year
------ -------------------- ----- ----
7/1/02 - 6/30/03 $18.00 $4,350.00 $52,200.00
7/1/03 - 6/30/04 $18.00 $4,350.00 $52,200.00
7/1/04 - 6/30/05 $18.50 $4,470.83 $53,650.00
7/1/05 - 6/30/06 $19.00 $4,591.67 $55,100.00
7/1/06 - 6/30/07 $19.50 $4,712.50 $56,550.00
7/1/07 - 6/30/08 $20.00 $4,833.33 $58,000.00
7/1/08 - 7/31/09 $20.50 $4,954.17 $59,450.00
6. TENANT'S OMC AND TAX PERCENTAGE.
6.1 ADJUSTMENT FOR CHANGES TO AREA OF PREMISES. Commencing on August 1,
2002, Tenant's OMC Percentage and Tenant's Tax Percentage shall be adjusted
accordingly so that Tenant's OMC Percentage is 15.64% and Tenant's Tax
Percentage is 15.64%. All applicable terms of the Lease are hereby amended
accordingly.
6.2 BASE YEAR OPERATION AND MAINTENANCE CHARGE. Effective as of the
Expansion Space Commencement Date, the OMC Sum Base Year for the Expansion Space
is 2002 as finally determined. All references within the Lease to the OMC Sum
Base Year shall be amended in the same manner. There shall be no change to the
OMC Sum Base Year for the portion of the Premises that excludes the Expansion
Space.
6.3 BASE YEAR TAXES. Effective on the Expansion Space Commencement
Date, the term "Base Year Taxes" shall mean, with respect to the Expansion
Space, the Taxes for the Taxes Base Year of 2002 computed by Landlord in
conformity with the Lease. All references within the Lease to the Base Year
Taxes shall be amended in the same manner. There shall be no change to the Base
Year Taxes for the portion of the Premises that excludes the Expansion Space.
7. TENANT IMPROVEMENT OF EXPANSION SPACE; ALLOWANCE. Tenant shall be solely
responsible for completing the improvement of the Expansion Space (the "TENANT
WORK") and the Tenant Work shall be completed in compliance with Sections 7.D.,
7.E. and 7.G. of the Lease. Landlord shall reimburse Tenant an allowance equal
to Twenty-Nine Thousand ($29,000.00) Dollars (the "BUILD-OUT ALLOWANCE") for
costs incurred by Tenant in connection with the Tenant Work. Tenant shall submit
an application for reimbursement upon completion of the Tenant Work, together
with such other commercially standard documentation as Landlord may reasonably
require and the same shall be subject to reasonable verification and approval by
Landlord. Tenant shall sign the application for reimbursement, which shall
include a statement that all of the Tenant Work has been substantially completed
in accordance with the plans approved by Landlord as provided in Section 7 of
the Lease. Within thirty (30) days after the date on which Landlord receives a
completed application for reimbursement and all required supporting
documentation, Landlord shall pay to Tenant the amount requested in the
application for reimbursement, not to exceed the Build-Out Allowance. Landlord
shall have no obligation to (i) advance more than the total amount of the
Build-Out Allowance or (ii) make an advance of any part of the Build-Out
Allowance so long as an Event of Default has occurred or an event has occurred
which, with the giving of notice or the passage of time or both, would
constitute an Event of Default, and in either case remains uncured. Any costs,
fees, disbursements, or amounts relating to the Tenant Work in excess of the
Build-Out Allowance shall be paid by Tenant.
-3-
8. CONFESSION OF JUDGMENT. Tenant hereby restates the warrants of authority
originally set forth in Section 17.B.4, 17.B.5 and 17.B.6 of the Lease for an
attorney to confess judgment against Tenant.
(4) CONFESSION OF JUDGMENT - RENT. TENANT COVENANTS AND AGREES THAT IF
THERE IS AN EVENT OF DEFAULT, THEN LANDLORD MAY, WITHOUT LIMITATION AND
WITHOUT NOTICE OR OTHER ACT, CAUSE JUDGMENTS FOR MONEY TO BE ENTERED
AGAINST TENANT AND, FOR THOSE PURPOSES, TENANT HEREBY GRANTS THE
FOLLOWING WARRANT OF ATTORNEY: (I) TENANT HEREBY IRREVOCABLY AUTHORIZES
AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD AND/OR LANDLORD (AS
WELL AS SOMEONE ACTING FOR LANDLORD), IN ANY AND ALL ACTIONS COMMENCED
AGAINST TENANT FOR RECOVERY OF THE RENT AND/OR OTHER AMOUNTS TO BE PAID
TO LANDLORD BY TENANT, TO APPEAR FOR TENANT AND TO CONFESS OR OTHERWISE
ENTER JUDGMENT AGAINST TENANT AND ASSESS DAMAGES AGAINST TENANT FOR ALL
OR ANY PART OF THE RENT AND/OR OTHER AMOUNTS TO BE PAID TO LANDLORD BY
TENANT INCLUDING, WITHOUT LIMITATION, ACCELERATED RENT, TOGETHER WITH
INTEREST, COSTS AND AN ATTORNEYS' COMMISSION OF FIVE PERCENT (5%) OF
THE FULL AMOUNT OF SUCH RENT, AMOUNTS AND SUMS, AND THEREUPON WRITS OF
EXECUTION FOR LEVY AND ATTACHMENT MAY FORTHWITH ISSUE AND BE SERVED,
WITHOUT ANY PRIOR NOTICE, WRIT OR PROCEEDING WHATSOEVER; AND (II) THE
WARRANT OF ATTORNEY HEREIN GRANTED SHALL NOT BE EXHAUSTED BY ONE OR
MORE EXERCISES THEREOF BUT SUCCESSIVE ACTIONS MAY BE COMMENCED AND
SUCCESSIVE JUDGMENTS MAY BE CONFESSED OR OTHERWISE ENTERED AGAINST AND
DAMAGES ASSESSED AGAINST TENANT FROM TIME TO TIME AS OFTEN AS ANY OF
THE RENT AND/OR OTHER AMOUNTS AND SUMS SHALL FALL OR BE DUE OR BE IN
ARREARS, AND THIS WARRANT OF ATTORNEY MAY BE EXERCISED BEFORE AND/OR
AFTER THE TERMINATION OR EXPIRATION OF THE TERM AND/OR DURING OR AFTER
ANY EXTENSIONS OF THE TERM OR RENEWALS OF THE LEASE.
(5) CONFESSION OF JUDGMENT - POSSESSION. TENANT COVENANTS AND AGREES
THAT IF THERE IS AN EVENT OF DEFAULT OR THE LEASE IS TERMINATED OR THE
TERM OR ANY EXTENSIONS OR RENEWALS THEREOF IS EXPIRES, THEN AND IN
ADDITION TO THE RIGHTS AND REMEDIES SET FORTH IN SECTION 17.B(4),
LANDLORD MAY, WITHOUT LIMITATION AND WITHOUT NOTICE OR OTHER ACT, CAUSE
JUDGMENTS IN EJECTMENT FOR POSSESSION OF THE PREMISES TO ENTERED
AGAINST TENANT AND, FOR THOSE PURPOSES, TENANT HEREBY GRANTS THE
FOLLOWING WARRANT OF ATTORNEY: (I) TENANT HEREBY IRREVOCABLY AUTHORIZES
AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD AND/OR LANDLORD (AS
WELL AS SOME ONE ACTING FOR LANDLORD) IN ANY AND ALL ACTIONS COMMENCED
FOR RECOVERY OF POSSESSION OF THE PREMISES TO APPEAR FOR TENANT AND
CONFESS OR OTHERWISE ENTER JUDGMENT IN EJECTMENT FOR POSSESSION OF THE
PREMISES AGAINST TENANT WHICH JUDGMENT SHALL BE ENFORCEABLE AGAINST
TENANT AND ALL PERSONS CLAIMING DIRECTLY OR INDIRECTLY BY, THROUGH OR
UNDER TENANT, AND THEREUPON A WRIT OF POSSESSION MAY FORTHWITH ISSUE
AND BE SERVED, WITHOUT ANY PRIOR NOTICE, WRIT OR PROCEEDING WHATSOEVER;
AND (II) IF, FOR ANY REASON AFTER THE FOREGOING ACTION OR ACTIONS SHALL
HAVE BEEN COMMENCED, IT SHALL BE DETERMINED THAT POSSESSION OF THE
PREMISES SHOULD REMAIN IN OR BE RESTORED TO TENANT, LANDLORD SHALL HAVE
THE RIGHT TO COMMENCE ONE OR MORE FURTHER ACTIONS AS HEREINBEFORE SET
FORTH TO RECOVER POSSESSION OF THE PREMISES INCLUDING, WITHOUT
LIMITATION, APPEARING FOR TENANT AND CONFESSING OR OTHERWISE ENTERING
JUDGMENT IN EJECTMENT AGAINST TENANT FOR POSSESSION OF THE PREMISES AS
HEREINBEFORE SET FORTH.
-4-
(6) IN ANY ACTION OR PROCEEDING DESCRIBED IN SUBSECTION 17.B(4) AND/OR
SUBSECTION 17.B(5) OR IN CONNECTION THEREWITH, IF A COPY OF THE LEASE
IS THEREIN VERIFIED BY LANDLORD OR SOMEONE ACTING FOR LANDLORD TO BE A
TRUE AND CORRECT COPY OF THE LEASE (AND SUCH COPY SHALL BE CONCLUSIVELY
PRESUMED TO BE TRUE AND CORRECT BY VIRTUE OF SUCH VERIFICATION), THEN
IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THE LEASE, ANY
STATUTE, RULE OF COURT OF LAW, CUSTOM OR PRACTICE TO THE CONTRARY
NOTWITHSTANDING. TENANT HEREBY RELEASES TO LANDLORD, ANYONE ACTING FOR
LANDLORD AND ALL ATTORNEYS WHO MAY APPEAR FOR TENANT ALL ERRORS IN
PROCEDURE REGARDING THE ENTRY OF JUDGMENT OR JUDGMENTS BY CONFESSION OR
OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THE LEASE,
AND ALL LIABILITY THEREFOR. THE RIGHT TO ENTER JUDGMENT OR JUDGMENTS BY
CONFESSION OR OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED
IN THE LEASE AND TO ENFORCE ALL OF THE OTHER PROVISIONS OF THE LEASE
MAY BE EXERCISED BY ANY ASSIGNEE OF LANDLORD'S RIGHT, TITLE AND
INTEREST IN THE LEASE IN SUCH ASSIGNEE'S OWN NAME, ANY STATUTE, RULE OF
COURT OR LAW, CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING.
9. MISCELLANEOUS PROVISIONS.
9.1 BROKERS; AGENT. Tenant warrants to Landlord that Tenant dealt and
negotiated solely and only with Agent (or Landlord) for this Lease and with no
other broker, firm, company or person. Tenant (for good and valuable
consideration) shall indemnify and hold Landlord and Agent harmless from and
against any and all claims, suits, proceedings, damages, obligations,
liabilities, counsel fees, costs, losses, expenses, orders and judgments imposed
upon, incurred by or asserted against Landlord and/or Agent by reason of the
falsity or error of the aforesaid warranty. It is expressly understood and
agreed by Landlord and Tenant that Agent is acting as agent only, and shall not
in any event be liable to either Landlord or Tenant for the fulfillment or
non-fulfillment of any of the terms, covenants, conditions or provisions of this
Lease, or for any action or proceeding taken by Landlord against Tenant or by
Tenant against Landlord.
9.2 ORIGINAL LEASE. Except as otherwise provided in this Amendment, the
Lease shall remain in full force and effect in accordance with its original
terms. In the event of a conflict between the provisions of this Amendment and
the original terms of the Lease, the provisions of this Amendment shall control.
9.3 BINDING EFFECT. This Amendment shall be binding upon and inure to
the benefit of Landlord and Tenant, and their respective successors and assigns.
-5-
9.4 ENTIRE AGREEMENT. The parties acknowledge that this Amendment
contains the entire agreement between the parties with respect to the
modification of the Lease and supersedes and replaces any prior agreement and
understandings between the parties, either oral or written, concerning this
Amendment.
9.5 NO THIRD-PARTY BENEFICIARIES. There are no third-party
beneficiaries to this Amendment, either express or implied. Nothing herein
contained shall be construed to grant or confer upon any party other than the
parties hereto and their permitted successors and assigns, any right, claim or
privilege by virtue of any provision contained in this Amendment.
9.6 DRAFTING OF AMENDMENT. This Amendment is the product of
negotiations between the parties. As such, the Amendment shall not be construed
against one party or another merely because one party drafted some part or all
of this Amendment.
9.7 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which will be considered one and the same Amendment
notwithstanding that all parties hereto have not signed the same counterpart.
Signatures on this Amendment which are transmitted by facsimile shall be valid
for all purposes. Any party shall, however, deliver an original signature on
this Amendment to the other party upon request.
9.8 SUBMISSION OF AMENDMENT. Submission of this Amendment for
examination and negotiation does not constitute an offer. This Amendment shall
become effective only upon the execution and delivery hereof by all of the
parties to this Amendment.
9.9 AUTHORITY. Landlord and Tenant hereby mutually represent and
warrant to the other that all consents or approvals required of third parties
(including, but not limited to, any lenders, Board of Directors, partners or
governors) for the execution, delivery and performance of this Amendment (other
than any required of Landlord's lender) have been obtained and that Landlord and
Tenant each have the right and authority to enter into and perform its covenants
contained in this Amendment and that this Amendment is binding upon them in
accordance with its terms.
[Signatures follow on the next page.]
-6-
IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to
be executed as of the day and year first above written.
WITNESS OR ATTEST: LANDLORD:
- ------------------ ---------
BELLEVUE ASSOCIATES,
a Pennsylvania Limited Partnership
By: BELLEVUE INC.,
a Pennsylvania corporation,
Its General Partner
By: /s/ George F. Rubin
-----------------------
Name: GEORGE F. RUBIN
Title: Treasurer/Secretary
WITNESS OR ATTEST: TENANT:
- ------------------ -------
PENNSYLVANIA REAL ESTATE INVESTMENT
TRUST
By: /s/ Joseph F. Coradino
--------------------------------
Name: Joseph F. Coradino
Title: Executive Vice President
-7-
EXHIBIT "A"
"EXPANSION SPACE"
SECOND AMENDMENT TO OFFICE LEASE
--------------------------------
THIS SECOND AMENDMENT TO OFFICE LEASE ("AMENDMENT") is made effective
as of June 1, 2004 (the "EFFECTIVE DATE") by and between BELLEVUE ASSOCIATES
("LANDLORD") and PENNSYLVANIA REAL ESTATE INVESTMENT TRUST ("TENANT").
BACKGROUND
----------
A. Under an Office Lease dated December 9, 1988, as amended and
restated by that certain Amended and Restated Office Lease dated July 12, 1999,
as further amended by that certain First Amendment to Office Lease dated June
18, 2002 (collectively, the "LEASE"), Tenant, as successor in interest to
Strouse, Greenberg & Co., Inc., leases 42,681 rentable square feet of space (the
"CURRENT PREMISES") located on the second, third and fourth floors of the
building known as "The Bellevue," located at Broad Street at Walnut,
Philadelphia, Pennsylvania (the "BUILDING"). Except as otherwise provided in
this Amendment, or as the context may require, the capitalized terms used in
this Amendment shall have the same meanings given to them in the Lease.
B. Tenant desires to lease from Landlord all that certain space
consisting of (i) approximately fifteen thousand four hundred and one (15,401)
rentable square feet located on the eighth (8th) floor of the Building and
depicted on EXHIBIT "A-1" attached hereto (the "EIGHTH FLOOR SPACE"), and (ii)
approximately ten thousand (10,000) rentable square feet located on the ninth
(9th) floor of the Building and depicted on EXHIBIT "A-2" attached hereto (the
"NINTH FLOOR SPACE"). The Eighth Floor Space and the Ninth Floor Space
collectively are referred to herein as the "EXPANSION SPACE".
C. In this Amendment, Landlord and Tenant desire to set forth the terms
and conditions under which the Lease is to be amended with respect to the
Expansion Space and otherwise.
AGREEMENTS
----------
NOW, THEREFORE, in consideration of the foregoing recitals, which by
this reference thereto are hereby incorporated into the body of this Amendment,
the mutual promises set forth below, and other good and valuable consideration,
the receipt, sufficiency and fairness of which are hereby acknowledged, Landlord
and Tenant, intending to be legally bound, agree as follows:
1. LEASE CERTIFICATION.
1.1 Landlord and Tenant each reaffirm and certify as follows:
(A) The Lease is in full force and effect.
(B) Except as provided in this Amendment, the Lease, as defined above,
has not been further supplemented, modified or amended.
(C) Tenant has no defenses, counterclaims or offsets under the Lease or
against rent or other charges due or to become due under the Lease.
(D) Except as may be expressly provided for in this Amendment, Tenant
is not entitled to any free rent, rental rebates or other concessions under the
Lease which have not been exhausted.
1
(E) Landlord is not in default under the Lease, and no event has
occurred which, with the giving of notice or passage of time, or both, would
constitute a default by Landlord under the Lease.
(F) Tenant is not in default under the Lease, and no event has occurred
which with the giving of notice or passage of time, or both, would constitute a
default by Tenant under the Lease.
(G) Tenant has not assigned the Lease or any interest therein, or
subleased any portion of the Premises, and has not entered into any agreement
for these purposes.
(H) Tenant has no rights of refusal, offer, expansion or extension with
respect to the Lease, the Premises or the Building except as expressly set forth
in the Lease or this Amendment.
1.2 RELIANCE. Tenant agrees that Landlord and its mortgagees may rely upon
the statements made in the preceding subparagraph.
2. EXPANSION OF PREMISES.
2.1 Effective as of (a) June 1, 2004 (with respect to the 6,343 rentable
square feet of the Eighth Floor Space depicted on EXHIBIT A-3 attached hereto),
(b) July 15, 2004 (with respect to the balance of the Eighth Floor Space
consisting of 9,058 rentable square feet), and (c) the date Landlord delivers to
Tenant possession of the Ninth Floor Space in the condition required by this
Amendment (each date, as applicable, being referred to herein as an "EXPANSION
SPACE COMMENCEMENT DATE", and as applicable to the Ninth Floor Space, the
"COMPLETE DELIVERY DATE"), Landlord hereby demises and leases unto Tenant, and
Tenant hereby leases and takes the applicable Expansion Space from Landlord, for
the Term, at the rent and upon the terms and conditions hereinafter set forth.
Landlord shall endeavor to deliver possession of the Ninth Floor Space promptly
after the Effective Date of this Amendment, however Landlord shall not be liable
for any loss, liability, cost, damage or expense of any kind or type (including
without limitation attorneys' fees) resulting from Landlord's delay in
delivering possession of the Ninth Floor Space by any date certain by reason of
any holding over or wrongful retention of possession by any current or previous
tenants or occupants of the same or of other space within the Building, or due
to any other cause beyond the reasonable control of Landlord, nor shall such
delay impair the validity of the Lease or this Amendment.
2.2 From and after the applicable Expansion Space Commencement Date through
the expiration of the Lease or the earlier termination thereof: (i) the term
"Premises" wherever it appears in the Lease, shall include the applicable
Expansion Space then delivered to Tenant and such space shall be subject to the
terms of the Lease as modified by this Amendment; and (ii) Section 1.C of the
Lease shall be amended so that the area of the Current Premises set forth in
such Section shall be increased by the area of the Expansion Space then
delivered to Tenant. Landlord and Tenant acknowledge that Landlord has delivered
to Tenant, and Tenant has accepted, possession of the portion of the Eighth
Floor Space depicted on EXHIBIT A-3 attached hereto as of June 1, 2004; and
further that Landlord has delivered to Tenant, and Tenant has accepted,
possession of the balance of the Eighth Floor Space as of July 15, 2004.
3. CONDITION OF SPACE. Tenant acknowledges and agrees that (a) there have been
no representations or warranties made by or on the behalf of Landlord with
respect to the Expansion Space, either with respect to the suitability of the
Expansion Space for the conduct of Tenant's business or otherwise and (b) Tenant
shall take the Expansion Space in their "AS-IS", "WHERE-IS" condition.
2
4. TERM.
4.1 EXTENSION OF TERM. The Term of the Lease is hereby extended for a
period of ten (10) years commencing on the Complete Delivery Date. For purposes
of this Amendment, the last day of said term shall be referred to herein as the
"EXPIRATION DATE." When the Complete Delivery Date and Expiration Date have been
established, Landlord and Tenant shall promptly execute and acknowledge a
confirmation of Lease Term in a form mutually acceptable to Landlord and Tenant.
4.2 OPTION TO EXTEND TERM. Tenant is hereby granted two (2) options (each,
an "EXTENSION OPTION" and collectively, the "EXTENSION OPTIONS") to extend the
Term of the Lease (as extended by this Amendment), with respect to all of the
Premises as then constituted, each for a consecutive additional period of five
(5) years (each of which periods is hereinafter referred to as an "EXTENSION
TERM"), on the following terms and conditions:
(A) EXERCISE OF EXTENSION OPTION. Tenant shall exercise an Extension
Option by delivering to Landlord written notice (the "EXTENSION NOTICE") on or
before the date ("EXTENSION DECISION DATE") that is two hundred seventy (270)
days prior to the expiration date of the Term (as the same previously may have
been extended), time being of the essence. Each Extension Term shall begin on
the day immediately following the date that, prior to the exercise of the
applicable Extension Option, previously had been the Expiration Date.
(B) CONDITION TO EXERCISE. The extension of the Term by Tenant's
exercise of an Extension Option shall be contingent upon there being no uncured
Event of Default on the date Tenant exercises the Extension Option or any time
thereafter until the commencement of the respective Extension Term. For purposes
of this Section, an uncured Event of Default shall not be deemed to have
occurred by Tenant if Tenant has commenced to cure such default within the time
period required by the Lease and at all times thereafter has been and continues
to diligently to effect such cure. Should an uncured Event of Default exist at
the time Tenant exercises the Extension Option, or should such an Event of
Default occur following Tenant's exercise of the Extension Option, such Event of
Default shall not nullify or void Tenant's exercise of the Extension Option, but
instead shall suspend the commencement of an Extension Term until such time as
the Event of Default is cured. At any time prior to or following Tenant's
exercise of an Extension Option, Tenant shall have the right to request that
Landlord deliver to Tenant written notice of any Event of Default of which
Landlord then has actual knowledge and Landlord shall respond to such request
within ten (10) business days. If Landlord fails to respond within said ten (10)
business day period, then Tenant's exercise of the applicable Extension Option
shall be deemed effective.
(C) TERMS OF LEASE DURING EXTENSION TERM. In the event that Tenant
exercises an Extension Option, each Extension Term shall be on the same terms
and conditions as specified for the Term of this Lease, except that (a) the
Annual Rent during each Extension Term shall be adjusted, for and during the
renewal term, to the "Fair Market Rental" (as defined below) of the Premises in
effect at the commencement of that Extension Term, (b) there shall be no tenant
improvement allowance or other tenant concessions, except as otherwise a part of
Fair Market Rental, and (c) there shall be no further right of extension other
than the unexercised second Extension Option.
(D) DETERMINATION OF FAIR MARKET RENTAL. Promptly after the
determination by Landlord of the Fair Market Rental, but in no event later than
thirty (30) days after receipt of Tenant's Extension Notice, Landlord shall send
written notice to Tenant thereof and shall advise Tenant of the adjustment to
the Annual Rent. In the event Tenant disagrees with Landlord's determination of
Fair Market Rental or if Landlord fails to deliver said notice, Landlord and
Tenant shall have thirty (30) days to negotiate in good faith the determination
of the Fair Market Rental. In the event the parties cannot agree on such
determination, then either party may, by written notice to the other party,
3
require that the determination of the Fair Market Rental be made by an
independent M.A.I. appraiser having substantial experience with leasing of
similar office space in Center City Philadelphia. Such M.A.I. appraiser shall be
mutually agreed to by Landlord and Tenant within fifteen (15) days. If Landlord
and Tenant cannot agree on an appraiser, Landlord shall select one, Tenant shall
select one and the two appointed parties shall jointly select a third appraiser
(the "panel of appraisers"), provided each of the appraisers shall have
substantial experience with leasing of similar office space in Center City
Philadelphia. Such M.A.I. appraiser (or panel of appraisers) shall be chosen
within thirty (30) days after Tenant's notice requiring determination by
appraisal. Within thirty (30) days after the selection of the appraiser (or
panel of appraisers) Landlord and Tenant shall each present to the appraiser (or
the panel of appraisers) a written proposal specifying their belief as to the
Fair Market Rental. The appraiser (or the panel of appraisers by majority vote)
shall accept either the Landlord's proposal or the Tenant's proposal for Fair
Market Rental, which decision shall be binding upon Landlord and Tenant.
Landlord and Tenant shall separately pay any fees and expenses of any separate
counsel and witnesses selected by them, and shall divide equally the fees and
expenses charged by the appraiser (or the panel of appraisers).
(E) DEFINITION OF FAIR MARKET RENTAL. For the purpose of this
Amendment, the term "FAIR MARKET RENTAL" is understood to mean the minimum base
rental (with (x) associated prevailing market base year/escalation formulations,
and (y) if fair market conditions would otherwise include free rent,
construction allowances, special concessions or any other leasing concessions
(collectively, "CONCESSIONS"), an associated adjustment in minimum base rental
to account for said Concessions) which a landlord would receive annually by then
renting the space in question (using the same square footages/floor factor set
forth in this Lease), assuming the Landlord to be a prudent person willing to
lease but being under no compulsion to do so, assuming the Tenant to be a
prudent person willing to lease but being under no compulsion to do so, and
assuming a lease containing the same terms and provisions as those contained in
the Lease. Fair Market Rental shall take into consideration all relevant factors
including the condition, size and location of the space as well as security for
Landlord's undertakings. Landlord and Tenant agree that bona fide written offers
to lease comparable office space located in the Building from third parties (as
adjusted for size, condition and location) may be used as a factor in
determining the Fair Market Rental.
4.3 TENANT'S EARLY TERMINATION RIGHT. Tenant shall have the right on one
occasion to terminate the Lease as to all or a portion of the Premises and its
remaining term (the "TERMINATION OPTION"), which termination, if properly
exercised, only shall be effective on a date (the "TERMINATION DATE") that is
between the seventh (7th) and eighth (8th) anniversaries of the Complete
Delivery Date.
(A) EXERCISE OF TERMINATION OPTION. Tenant shall exercise the
Termination Option by delivering to Landlord written notice of termination (the
"TERMINATION NOTICE") at least two hundred seventy (270) days prior to the
Termination Date.
(B) TERMINATION FEE. As a condition to the effective exercise of the
Termination Option, Tenant shall pay to Landlord on or before the Termination
Date a fee (the "TERMINATION FEE") equal to the sum of (i) unamortized portion
as of the Termination Date of the Build-Out Allowances and all leasing
commissions actually paid by Landlord to brokers in connection with this
Amendment (the "COMMISSIONS") plus (ii) six (6) months of Annual Minimum Rent
proportionately attributable to the portion of the Premises so terminated. The
amortization period for the Build-Out Allowance and the Commission shall be the
period commencing on Complete Delivery Date and ending on the Expiration Date.
The amortization shall be calculated on an annual basis using an interest rate
of eight percent (8%) per annum. The effective exercise of the Termination
Option by Tenant shall be contingent upon Tenant's timely delivery of the
Termination Fee, time being of the essence.
4
(C) CONDITION TO EXERCISE. The effective termination of the Lease by
Tenant shall be contingent upon there being no uncured Event of Default existing
on the date on which Tenant delivers the Termination Notice or any time
thereafter until and including the Termination Date. For purposes of this
Section, an uncured Event of Default shall not be deemed to have occurred by
Tenant if Tenant has commenced to cure such default within the time period
required by the Lease and at all times thereafter has been and continues to
diligently to effect such cure. At any time prior to Tenant's delivery of the
Termination Notice, Tenant shall have the right to request Landlord to deliver
to Tenant written notice of any Event of Default of which Landlord then has
actual knowledge and Landlord shall respond to such request within ten (10)
business days. If Landlord fails to respond within said ten (10) business day
period, then no such Event of Default, if one exists, shall prevent the
effectiveness of Tenant's election of the Termination Option. Should an uncured
Event of Default exist at the time Tenant exercises the Termination Option, or
should an Event of Default occur following Tenant's exercise of the Termination
Option, such Event of Default shall not nullify or void Tenant's exercise of the
Termination Option, but instead shall suspend the termination from becoming
effective until such time as such Event of Default is cured.
(D) VACATING SPACE. If Tenant exercises the Termination Option, then on
or before 11:59 p.m. on the Termination Date, Tenant shall vacate the Premises
(or the portion thereof that is the subject of the Termination Notice), remove
all personal property therefrom and deliver possession of the same to Landlord
in the condition required by Section 19.A of the Lease.
5. RENT; U&O.
5.1 RENT. Commencing (a) June 1, 2004 (with respect to the Current Premises
and with respect to 6,343 rentable square feet of the Eighth Floor Space, (b) on
July 15, 2004 for the balance of the Eighth Floor Space consisting of 9,053
rentable square feet, and (c) on the date on which Landlord delivers to Tenant
possession of the Ninth Floor Space (with respect to the Ninth Floor Space),
Tenant agrees to pay Landlord annually (in the manner required by the Lease)
Minimum Rent for the Premises (including the Expansion Space as the same is
added thereto by operation of this Amendment) at the rate and in the amounts set
forth in the table below:
ANNUAL
MINIMUM ANNUAL MONTHLY
PERIOD RENT/RSF MINIMUM RENT MINIMUM RENT
------ -------- ------------ ------------
June 1, 2004 - June 30, 2004 $21.23 ---- $86,736.93
July 1, 2004 - July 14, 2004* $21.23 ---- $86,736.93*
July 15, 2004 - Complete
Delivery Date * $21.23 ---- $102,762.05*
Lease Years 1 - 5 $21.23 $1,445,380.86 $120,448.41
Lease Years 6 - 10 $21.75 $1,480,783.50 $123,398.63
* Any monthly Minimum Rent stated in the foregoing chart that is for a
period other than a full month shall be prorated on a per diem basis.
5
As used in this Amendment, the term "LEASE YEAR" shall mean the period
commencing on the Complete Delivery Date and ending on the last day of the
twelfth full calendar month thereafter, and each succeeding twelve-month period.
5.2 U&O REPORTS AND TAX. Tenant shall continue to be responsible for paying
all City of Philadelphia Use and Occupancy tax in connection with its occupancy
of the Premises (including without limitation the Expansion Space) and shall pay
all such amounts to Landlord. Provided that Landlord has received said sums from
Tenant, Landlord shall remit the same to the City of Philadelphia as and when
the same come due and payable.
6. TENANT'S OMC AND TAX PERCENTAGE.
6.1 ADJUSTMENT FOR CHANGES TO AREA OF PREMISES. Commencing on June 1, 2004,
Tenant's OMC Percentage and Tenant's Tax Percentage shall be adjusted
accordingly so that Tenant's OMC Percentage is 24.941% and Tenant's Tax
Percentage is 24.941% based upon the addition of the Expansion Space to the
Current Premises for a total square footage of 68,082 which equals 24.941% of
272,972, the total square footage of the Office Portion of the Building. All
applicable terms of the Lease are hereby amended accordingly.
6.2 BASE YEAR OPERATION AND MAINTENANCE CHARGE. Effective as of June 1,
2004, the OMC Sum Base Year for the Premises (including the Expansion Space) is
2004 as finally determined. All references within the Lease to the OMC Sum Base
Year shall be amended in the same manner.
6.3 BASE YEAR TAXES. Effective on June 1, 2004, the term "Base Year Taxes"
shall mean, with respect to the Premises (including the Expansion Space), the
Taxes for the Taxes Base Year of 2004 computed by Landlord in conformity with
the Lease. All references within the Lease to the Base Year Taxes shall be
amended in the same manner.
7. TENANT IMPROVEMENT OF EXPANSION SPACE; ALLOWANCE. Tenant shall improve the
Expansion Space in accordance with Tenant's plans and specifications, to the
extent the same have been (or, after the Effective Date, will be) approved by
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned. Tenant shall be solely responsible for completing the improvement
of the Expansion Space (the "TENANT WORK") and the Tenant Work shall be
completed in compliance with Sections 7.D., 7.E. and 7.G. of the Lease. Landlord
shall reimburse Tenant an allowance equal to Seven Hundred Twenty Thousand
Dollars ($720,000.00), less the sum of Twenty-One Thousand Three Hundred
Twenty-Six and 60/100 Dollars ($21,326.60) for demolition costs that Landlord
has paid on Tenant's behalf for the improvement of the Expansion Space (the
"BUILD-OUT ALLOWANCE") for costs incurred by Tenant in connection with the
Tenant Work. Tenant shall submit an application for reimbursement upon
completion of the Tenant Work, together with such other commercially standard
documentation as Landlord may reasonably require and the same shall be subject
to reasonable verification and approval by Landlord. Tenant shall sign the
application for reimbursement, which shall include a statement that all of the
Tenant Work has been substantially completed in accordance with the plans
approved by Landlord as provided in Section 7 of the Lease. Within thirty (30)
days after the date on which Landlord receives a completed application for
reimbursement and all required supporting documentation, Landlord shall pay to
Tenant the amount requested in the application for reimbursement, not to exceed
the Build-Out Allowance. Landlord shall have no obligation to (i) advance more
than the total amount of the Build-Out Allowance or (ii) make an advance of any
part of the Build-Out Allowance so long as an Event of Default has occurred or
an event has occurred which, with the giving of notice or the passage of time or
both, would constitute an Event of Default, and in either case remains uncured.
Any costs, fees, disbursements, or amounts relating to the Tenant Work in excess
of the Build-Out Allowance shall be paid by Tenant. Tenant may apply any unused
portion of the Build-Out Allowance toward the incidental costs of this Amendment
transaction and/or as an offset against Minimum Rent.
6
8. RIGHT OF FIRST OFFER.
8.1 GRANT OF RIGHT. Tenant shall have the first and prior right ("RIGHT OF
OFFER"), subject only to the rights of other tenants of the Building that are in
effect as of the Effective Date, during the Term to elect to lease any part or
all of the Building not included in the Premises (said Total Rentable Area of
the Building excluding the Premises being referred to herein as the "ROFO
SPACE") to the extent that such space is or becomes Available Space (defined
herein).
8.2 DEFINITION OF AVAILABLE SPACE. For purposes of this Amendment, the term
"AVAILABLE SPACE" shall include the following: (a) any ROFO Space that is not
leased to a third party as of the Effective Date of this Amendment; (b) any ROFO
Space that is leased to a third party as of the Effective Date of this Amendment
upon the expiration of the occupancy rights of the existing tenants as are
contained in their leases as of the Effective Date of this Amendment, or upon
any earlier termination or expiration of such occupancy rights, including
without limitation any rights or options of the tenant thereunder to renew or
extend such lease as are existing as of the Effective Date of this Amendment by
virtue of options contained in such lease, but excluding any renewal or
extension of such lease and occupancy rights first granted after the Effective
Date of this Amendment; (c) any ROFO Space that is leased to a third party as of
the Effective Date of this Amendment if, after the Effective Date of this
Amendment, Landlord desires to renew or extend the lease term or occupancy
rights of a tenant leasing said space.
8.3 LANDLORD'S PROPOSAL. At such time as (a) Landlord decides to lease,
sublease, license or enter into any other form of occupancy agreement with
respect to any Available Space, or (b) Landlord receives from a third party an
offer to lease Available Space on terms and conditions acceptable to Landlord,
in its sole discretion, and in either case of (a) or (b) before leasing,
licensing or offering any Available Space to a third party, Landlord shall
deliver to Tenant a written proposal identifying the Available Space, the term
for the Available Space lease, Landlord's determination of the Fair Market
Rental with respect to the applicable Available Space and the date on which
Tenant may first take occupancy of said Available Space (the "LANDLORD'S
PROPOSAL"). Similarly, if Landlord desires to renew or extend the lease term or
occupancy rights of a tenant leasing space located within the ROFO Space, before
renewing or extending such lease term or occupancy rights, Landlord shall
deliver to Tenant a Landlord's Proposal for the entirety of such space. The term
"OFFER SPACE" shall mean such space as is identified in the Landlord's Proposal.
8.4 TENANT ACCEPTANCE. Following the delivery of Landlord's Proposal,
Landlord will meet with Tenant, at Tenant's request, to discuss Landlord's
Proposal and to refine the same if mutually agreed by Landlord and Tenant. If
Tenant agrees to the terms, provisions and conditions set forth in the
Landlord's Proposal, Tenant may elect to lease the Offer Space identified in the
Landlord's Proposal by giving Landlord written notice of such election (the
"ACCEPTANCE NOTICE") within thirty (30) days after receipt of the Landlord's
Proposal. If Tenant does not give the Acceptance Notice within such thirty (30)
day period, the Right of Offer for the Offer Space identified in the Landlord's
Proposal thereupon automatically shall be suspended, and Tenant thereafter
temporarily shall not have any right to lease said Offer Space, except that (a)
Landlord shall not enter into a lease for the Offer Space on terms substantially
more favorable to a third party tenant than are specified in Landlord's
Proposal, without first re-offering the space in question to Tenant in a revised
Landlord's Proposal in accordance with the foregoing procedures; and (b) should
Landlord enter into a lease for said Offer Space and thereafter said Offer Space
meets the definition of "Available Space", said Offer Space shall again be
considered Available Space and subject to Tenant's Right of Offer.
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8.5 DETERMINATION OF FAIR MARKET RENTAL. Landlord and Tenant shall have
fifteen (15) days after Landlord's receipt of the Acceptance Notice to negotiate
in good faith the determination of the Fair Market Rental. In the event the
parties cannot agree on such determination, either party may require by written
notice to Landlord that the determination of the Fair Market Rental be made
pursuant to the procedures set forth in Section 4.2.D of this Amendment.
8.6 OFFER SPACE ADDED TO PREMISES. If Tenant exercises the Right of Offer
as provided above, the Annual Rent for the Offer Space shall be the Fair Market
Rental in effect on the date of the applicable Acceptance Notice. If Tenant so
exercises the Right of Offer, and if either (a) the parties subsequently agree
to the Fair Market Rental or (b) the Fair Market Rental is established pursuant
to the preceding paragraph, then the Offer Space identified in the Landlord's
Proposal shall become part of the Premises, and the leasing of the Offer Space
shall be on the same terms and conditions as the leasing of the Premises
pursuant to the Lease (including without limitation the Extension Option and the
Termination Option), except that the Annual Rent for the Offer Space shall be
the Fair Market Rental (as so agreed upon or determined), and Tenant's
obligation to pay the same shall commence on the date on which Landlord delivers
to Tenant possession of the Offer Space.
8.7 AMENDMENT. If Tenant exercises the Right of Offer for the Offer Space
as provided above, then within thirty (30) days after the later of (a) the date
on which Landlord received the Acceptance Notice and (b) the date on which
Landlord and Tenant agree upon the Fair Market Rental for the Offer Space,
Landlord and Tenant shall enter into a mutually acceptable written amendment to
the Lease adding the Offer Space to the Premises, and confirming the terms,
conditions and provisions applicable to the Offer Space in accordance herewith.
8.8 DELIVERY OF OFFER SPACE. Landlord shall deliver to Tenant possession of
any Offer Space added to the Premises pursuant to this Section free of all
personal property, garbage and debris, and removable trade fixtures to the
extent specified by Tenant.
9. CONFESSION OF JUDGMENT. Landlord and Tenant hereby acknowledge and agree that
the warrants of authority originally set forth in Section 17.B.4, 17.B.5 and
17.B.6 of the Lease for an attorney to confess judgment against Tenant were
deleted by the Addendum to Lease dated as of July 12, 1999 and are of no further
force or effect.
10. MISCELLANEOUS PROVISIONS.
10.1 BROKERS; AGENT. Tenant warrants to Landlord that Tenant dealt and
negotiated solely and only with The Rubenstein Brokerage Group, Inc. and the
Binswanger Companies (collectively, the "Brokers") for this Lease and with no
other broker, firm, company or person. Tenant (for good and valuable
consideration) shall indemnify and hold Landlord and Agent harmless from and
against any and all claims, suits, proceedings, damages, obligations,
liabilities, counsel fees, costs, losses, expenses, orders and judgments imposed
upon, incurred by or asserted against Landlord and/or Agent by reason of (i) the
falsity or error of the aforesaid warranty and (ii) any fee or commission owed
to The Rubenstein Brokerage Group, Inc., which Tenant agrees to pay.
10.2 ORIGINAL LEASE. Except as otherwise provided in this Amendment, the
Lease shall remain in full force and effect in accordance with its original
terms. In the event of a conflict between the provisions of this Amendment and
the original terms of the Lease, the provisions of this Amendment shall control.
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10.3 BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of Landlord and Tenant, and their respective successors and assigns.
10.4 ENTIRE AGREEMENT. The parties acknowledge that this Amendment contains
the entire agreement between the parties with respect to the modification of the
Lease and supersedes and replaces any prior agreement and understandings between
the parties, either oral or written, concerning this Amendment.
10.5 NO THIRD-PARTY BENEFICIARIES. There are no third-party beneficiaries
to this Amendment, either express or implied. Nothing herein contained shall be
construed to grant or confer upon any party other than the parties hereto and
their permitted successors and assigns, any right, claim or privilege by virtue
of any provision contained in this Amendment.
10.6 DRAFTING OF AMENDMENT. This Amendment is the product of negotiations
between the parties. As such, the Amendment shall not be construed against one
party or another merely because one party drafted some part or all of this
Amendment.
10.7 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which will be considered one and the same Amendment
notwithstanding that all parties hereto have not signed the same counterpart.
Signatures on this Amendment which are transmitted by facsimile shall be valid
for all purposes. Any party shall, however, deliver an original signature on
this Amendment to the other party upon request.
10.8 SUBMISSION OF AMENDMENT. Submission of this Amendment for examination
and negotiation does not constitute an offer. This Amendment shall become
effective only upon the execution and delivery hereof by all of the parties to
this Amendment.
10.9 AUTHORITY. Landlord and Tenant hereby mutually represent and warrant
to the other that all consents or approvals required of third parties
(including, but not limited to, any lenders, Board of Directors, partners or
governors) for the execution, delivery and performance of this Amendment (other
than any required of Landlord's lender) have been obtained and that Landlord and
Tenant each have the right and authority to enter into and perform its covenants
contained in this Amendment and that this Amendment is binding upon them in
accordance with its terms.
[Signatures follow on the next page.]
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to
be executed as of the day and year first above written.
WITNESS OR ATTEST: LANDLORD:
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BELLEVUE ASSOCIATES,
a Pennsylvania Limited Partnership
By: BELLEVUE INC.,
a Pennsylvania corporation,
Its General Partner
By: /s/ George F. Rubin
------------------------------
Name: GEORGE F. RUBIN
Title: Treasurer/Secretary
WITNESS OR ATTEST: TENANT:
------------------ -------
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By: /s/ Jonathan B. Weller
------------------------------
Name: Jonathan B. Weller
Title: Vice Chairman
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List of Exhibits
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Exhibit "A-1" - Eighth Floor Space
Exhibit "A-2" - Ninth Floor Space
Exhibit "A-3" - Initial Portion of Eighth Floor Space
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