LEASE AGREEMENT
AGREEMENT OF LEASE made this 8th day of November, 1996 by and between
Carriage Group with its principal place of business at 467 Creamery Way, Exton,
PA 19341 (Landlord), party of the fist part, and Petroleum Heat & Power Co.,
Inc. with its principal place of business at 2187 Atlantic Street, Stamford, CT
06902 ("Tenant"), party of the second part.
WITNESSETH THAT, for and in consideration of the rents, covenants and
agreements herein contained and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:
1. Reference Data
As used in this Lease, the following terms shall be defined as
indicated and refer to the data set forth in this Section 1.
TENANT'S ADDRESS: 2187 Atlantic Street
Stamford, CT 06902
PREMISES: Approximately 30,000 Rentable Square Feet (inclusive of Tenant's
Pro-rata Share of Mechanical Room) located at 467 Creamery Way, Oaklands
Corporate Center, Exton, PA 19341, as detailed in the Site Plan attached hereto
as Exhibit "A".
TERM: The term of this Lease shall be Ten (10) years. The term of the Lease
shall commence on the Commencement Date and shall expire on the last day of the
One Hundred Twentieth (120th) fully calendar month thereafter.
COMMENCEMENT DATE: March 1, 1997.
BASE RENT: Due on the first day of each calendar month of the Term. See
Paragraph 34 of Addendum "Base Rent Schedule".
OPERATING EXPENSE ALLOWANCE: $5,625.00 per month as further detailed in
Estimated Operating Expenses breakdown attached hereto as Exhibit "C".
FIXED RENT: Base Rent plus Operating Expenses Allowance.
ADDITIONAL RENT: Sums not including Base Rent which Tenant is obligated to pay
to Landlord from time to time pursuant to the terms of this Lease.
SECURITY DEPOSIT: $35,625.00.
TENANT'S PROPORTIONATE SHARE: 71.4% (determined by dividing the area of the
Premises by the area of the Building).
PERMITTED USES: Tenant shall use and occupy the Premises for General Office use
and for no other purpose.
2. Demise
Landlord hereby demises and lets to Tenant and Tenant hereby hires and
leases from Landlord the Premises for the Term, upon the conditions and
limitations set forth herein.
3. Construction by Landlord
Such construction shall be performed expeditiously in a good and
workmanlike manner and in accordance with all applicable laws, rules and
regulations.
(A) Landlord shall, without cost to Tenant, complete, alter or improve
the Premises in accordance with the plans and specifications attached hereto as
Exhibit "B" and made a part hereof (the "Plans and Specifications"). Tenant
hereby approves the Plans and Specifications attached hereto as Exhibit "B".
(B) If Landlord deems any changes, additions or alterations in the
Plans and Specifications necessary in connection with the construction of the
Premises, such changes, additions or alterations shall be submitted to Tenant
for approval which approval shall not be unreasonably withheld or delayed and
shall be deemed to be given if not disapproved in writing within ten (10) days
after Landlord's submission of the same to Tenant. Any dispute as to the content
of such changes, additions or alterations may, at the option of either party
hereto, be conclusively determined by the independent architect or engineer
retained by Landlord for the construction of the Building.
(C) The Premises shall be substantially completed on or before the
Commencement Date, provided that the Commencement Date shall be extended for the
time equivalent to any time lost by Landlord due to strikes, labor disputes,
governmental restrictions or limitations, scarcity of or inability to obtain
labor or materials, accidents, fire or other casualties, weather conditions, or
any cause similar or dissimilar to the foregoing beyond the reasonable control
of Landlord. All the aforesaid work shall be done in compliance with applicable
law and lawful ordinances. In the event the commencement date is postponed
beyond July 31, 1997, Tenant shall have the right to cancel this Lease and
recover all monies paid hereunder.
(D) Landlord shall be responsible to make any repairs necessitated by
defective workmanship or materials in the aforesaid
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work, provided that such defect appears and Tenant gives Landlord written notice
thereof during the first 365 days of the Term.
4. Term
The Term shall commence on the earlier of (the "Commencement Date"):
(i) the date when Tenant, with Landlord's consent, assumes possession of the
Premises or any part thereof, or (ii) the fifth consecutive business day
following Landlord's notice to Tenant that the Premises are substantially
completed and may be legally occupied. The Premises shall be substantially
completed when the construction work and other items of work for which Landlord
is responsible under Section 3 hereof have been completed to the extent that the
Premises may be fully and legally occupied by Tenant for its intended use,
subject only to completion of minor finishing and adjustment of equipment. The
commencement and expiration dates of the Term, when determined as above
provided, shall be confirmed in writing by Landlord to Tenant.
5. Base Rent
(A) Tenant shall pay to Landlord during the Term of the Lease the Base
Rent, without notice or demand, in the monthly installments specified in Section
1, in advance on the first day of each calendar month of the Term. The first
month's installment of the Base Rent shall be payable upon the execution of this
Lease. If the Term commences other than on the first day of a calendar month,
then the installments of Base Rent for the first calendar month of the Term
shall be adjusted proportionately, and the aforesaid first installment paid by
Tenant upon the execution of this Lease shall be initially applied to the first
partial month of the Term, and the balance to the next month.
(B) Base Rent, Additional Rent and all other sums payable by Tenant to
Landlord hereunder shall be paid, without set-off or deduction, in lawful
currency of the United States of America to Landlord at the address set forth in
Section 1 hereof, or at such other address as Landlord may from time to time
designate in writing to Tenant. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges, and late charges which may
be imposed upon Landlord by terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any sum due from Tenant
shall not be received by Landlord or Landlord's designee within ten (10) days
after said amount is due, then Tenant shall pay to Landlord a late charge of
five (5%) percent of such overdue amount, plus any attorney's fees and court
costs incurred by Landlord by reason of Tenant's failure to pay rent and/or
other charges when due to
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Landlord by reason of Tenant's failure to pay rent and/or other charges when due
hereunder. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the cost that Landlord will incur by reason of the late
payment by Tenant. Acceptance of such late charges by the Landlord shall in no
event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
6. Rental Adjustments
(A) Operating Expense. Tenant shall pay to Landlord the Operating
Expense Allowance in equal monthly installments, the first of which shall be
payable upon execution of this Lease. If the term commences other than ont he
first day of the calendar month, then the Operating expense Allowance for the
first calendar month of the Term shall be adjusted to the succeeding month.
Tenant's Proportionate Share of Operating Expense
If Landlord's Operating Expense for any Operating Year shall be
greater than the Operating Expense Allowance, Tenant shall pay to Landlord as
additional rent an amount equal to Tenant's Proportionate Share of the
difference (the amount of Tenant's Proportionate Share of such difference is
hereinafter referred to as the "Operating Expense Adjustment"). If Tenant
occupies the Premises or portion thereof for less than a full Operating Year,
the Operating Expense Adjustment will be calculated in proportion to the amount
of time in such Operating Year that Tenant occupied the Premises.
Such Additional Rent shall be paid in the following manner: within 120
days following the end of the first and each succeeding Operating Year, Landlord
shall furnish Tenant an Operating Expense Statement certified as true and
correct setting forth (i) the Operating Expense for the preceding Operating
Year, (ii) the Operating Expense Allowance and (iii) Tenant's Operating Expense
Adjustment for such Operating Year. Within 10 days following the receipt of such
Operating Expense Statement (the "Expense Adjustment Date") Tenant shall pay to
Landlord as Additional Rent the Operating Expense Adjustment for such Operating
Year.
Commencing with the first month of the second Operating Year, Tenant
shall pay to Landlord, in addition to the Operating Expense Allowance, on
account of the Operating Expense Adjustment for such Operating Year, monthly
installments in advance equal to one-twelfth (1/12) of the estimated Operating
Expense Adjustment for such Operating Year.
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As used in this Section 6(A) and Section 1 where applicable, the
following words and terms shall be defined as hereinafter set forth:
(i) "Operating Year" shall mean each calendar year, or other
period of 12 months as hereafter may be adopted by Landlord as its fiscal year,
or other period of 12 months as hereafter may be adopted by Landlord as its
fiscal year, occurring during the Term.
(ii) "Operating Expense Allowance" shall mean and equal the
amount set forth in Section 1 of this Lease.
(iii) "Operating Expense Statement" shall mean a statement in
writing signed by Landlord, setting forth in reasonable detail (a) the Operating
Expense for the preceding Operating Year, (b) the Operating Expense Allowance
and (c) the Tenant's Operating Expense Adjustment for such Operating Year, or
portion thereof. The Operating Expense for each Operating Year shall be
available for inspection by Tenant at Landlord's office during normal business
hours. Operating expenses are as follows:
(a) Real estate taxes and other taxes or charges levied in lieu
of such taxes, general and special public assessments, charges imposed by any
governmental authority pursuant to anti-pollution or environmental legislation,
taxes on the rentals of the Building or the use, occupancy or renting of space
therein;
(b) Premiums and fees for fire and extended coverage insurance,
insurance against loss of rentals for space in the Building and public liability
insurance, all in amounts and coverages (with additional policies against
additional risks) as may be required by Landlord or the holder of any mortgage
on the Building;
(c) Water and sewer service charges, and common area electric
charges. (provided same are not above prevailing market rates)
(d) Common Area Maintenance and repair costs, including repairs
and replacements described in Section 8 below, repairs and replacements of
supplies and equipment, snow removal and paving, lawn and general grounds
upkeep, maintenance and repair, and the costs of all labor, material and
supplies incidental thereto;
(e) Wages, salaries, fees and other compensation and payments and
payroll taxes and contributions to any social security, unemployment insurance,
welfare, pension or similar fund and payments for other fringe benefits required
by law, union agreement or otherwise made to or on behalf of all employees of
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Landlord performing services rendered in connection with the operation and
maintenance of the Building and/or Land, including without limitation, payments
made directly to or through independent contractors or performance of such
services;
(f) Management fees payable to the managing agent for the
Building, provided that, if the managing agent is affiliated with Landlord, same
shall be at prevailing market rates;
(g) Assessments paid by Landlord for the actual repair,
maintenance and upkeep of common facilities located in the Business Park; and
(h) Any and all other expenditures of Landlord incurred in
connection with the operation, repair or maintenance of the Premises, and the
Building or the Land which are properly expensed in accordance with generally
accepted accounting principles consistently applied in the operation,
maintenance and repair of a first-class office building facility.
The term "Operating Expense" shall not include depreciation of the
Building or equipment therein, interest, net income, franchise or capital stock
taxes payable to Landlord, executive salaries, real estate brokers' commissions
or the costs of services provided specially for any particular tenant at such
tenant's expense and not uniformly available to all tenants of the Building or
any expenses otherwise attributable to any tenanted or tenantable space.
(B) During the calendar year in which the Term ends, Landlord shall
have the right to submit to Tenant a statement of Landlord's reasonable estimate
of the Operating expense Adjustment during the period (the "final period")
beginning on the first day of the final Operating Year of the Term. Upon the
earlier to occur on the thirtieth day following Tenant's receipt of such
statement or the final day of the Term, Tenant shall pay to Landlord said
estimate Operating Expense Adjustment minus the total amount of payments
previously made by Tenant pursuant to subsection (A) above during the final
period. If requested by Tenant, Landlord shall submit to Tenant a statement
setting forth the actual amount of said Operating Expense Adjustment after
Landlord's final calculation for same and within fifteen days after Tenant's
receipt of such statement, Tenant shall pay to Landlord any deficiency, or, as
the case may be, Landlord shall refund to Tenant any overpayment occasioned by
Tenant's payment of the aforesaid estimate.
7. Security Deposit
Upon the date hereof Tenant shall pay to Landlord a security deposit
in the amount set forth in Section 1 hereof which Landlord will hold as security
for the faithful performance by Tenant of all its covenants and agreements under
this Lease, but in
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no event shall Landlord be obliged to apply same to rents or other charges in
arrears or damages for Tenant's default hereunder, but Landlord may so apply the
security deposit at its option. Landlord's right to possession of the Premises
for Tenant's default or any other reason shall not be affected by the fact that
Landlord holds said security deposit. The security deposit, if not so applied by
Landlord, shall be returned to Tenant within thirty (30) days after this Lease
terminates, provided that Tenant shall have vacated the Premises and delivered
the same to Landlord, as herein provided. In the event of any transfer of
Landlord's interest in the Premises, Landlord shall have the right to transfer
its interest in the security deposit, whereupon Tenant's receipt of the
transferee's acknowledgement of receipt of the security deposit, Landlord shall
be released of all liability with respect to such security deposit, and Tenant
shall look solely to such transferee for the return of the same.
8. Landlord's Services
So long as Tenant is not in default hereunder, Landlord shall:
(A) Arrange for all required utility services to the Premises:
PROVIDED, HOWEVER, the Landlord shall not be liable to Tenant for any loss or
damage arising from interruption in such utility service, unless occasioned by
the acts or omissions of Landlord or its Agents.
(B) Make all structural repairs to the foundations, concrete floor
slabs, exterior metal panel or masonry walls, steel frame (including columns)
and roof deck required for safety, tenant ability and compliance with proper
orders or governmental authorities, PROVIDED, HOWEVER, that 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 paragraph to repair any damage caused by
any act, omission or negligence of Tenant or its employees, agents, invitees,
licensees, subtenants, or contractors.
Tenant shall, throughout the Term and at its sole cost and expense,
take good care of the Premises and the fixtures and appurtenances therein, and
maintain the same in good order and condition, and promptly at Tenant's own cost
and expense make all repairs necessary to maintain such good order and
condition, except for building exterior and structural repairs necessary for the
reasonable use and enjoyment of the Premises which Landlord agrees to make.
Tenant shall at its sole cost and expense repair and replace all damage or
injury to the Premises and the building and to fixtures and equipment caused by
Tenant or its employees, agents, invitees, licensees, subtenants, or
contractors, or as the result of all or any of them moving in or out of the
Building or by
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installation. If Tenant fails to make such repairs or replacements the same may
be made by Landlord and such expense shall be collectible as Additional Rent and
paid by Tenant within fifteen (15) days after rendition of a bill thereof within
a reasonable time. Landlord shall not be liable by reason of any injury to or
interference with tenant's business arising from the making of any repairs,
alterations, additions or improvements in or to the Premises or the Building or
to any appurtenance or equipment therein, unless occasioned by the acts or
omissions of Landlord or its Agents.
9. No Other Services by Landlord
Landlord shall not be required to render any services to Tenant or to
make any repairs or replacements to the Premises, except as provided in Section
3, 8, 11 and 12 hereto. Without limiting the generality of the foregoing, it is
specifically understood and agreed that Tenant shall be solely responsible for
all charges for the following or services used, rendered or supplied to, upon or
in connection with the Premises throughout the Term: electric; gas or any other
utilities; telephone and/or communication services; security system or services;
janitorial services; trash removal.
Tenant agrees to indemnify Landlord and save it harmless against any
liability or damages on the account of the foregoing and, in the event that any
such utilities or services are supplied or furnished by any governmental
corporation or authority, tenant shall pay all bills for same promptly when they
become due and shall at all times during the term hereof keep the Premises free
and clear from any lien that may attach thereto by reason of the non-payment of
said bills.
(A) Tenant, at Tenant's expense, shall maintain in effect throughout
the Term, through insurance carriers reasonably satisfactory to Landlord; (i)
insurance against claims for personal injury (including death) and $100,000 for
property damage; and (ii) such other insurance as may reasonably be required by
the holder of a mortgage on the Building. The insurance policy referred to in
subsection (i) above shall name both Landlord and Tenant as insured parties.
(B) Prior the commencement of the Term, Tenant shall provide Landlord
with certificates of the insurance policies herein required of Tenant. All
policies shall provide that coverage thereunder may not be reduced or terminated
without at least thirty days' prior written notice to Landlord, Tenant shall
furnish to Landlord throughout the Term replacement certificates at least thirty
days prior to the expiration date of the then current polices and, upon requires
of Landlord, shall supply to Landlord copies of all policies herein required of
Tenant.
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(C) Each of the parties hereto hereby releases the other from all
liability for all injury, loss or damage which may be inflicted upon persons or
the property of such party, even if such liability results from the negligence
of the other party; PROVIDED, HOWEVER, that this release shall not affect said
policy or the right of the insured to recover thereunder, and (ii) to the extent
of the coverage of such policy. If any policy does not permit such a waiver, and
if the party to benefit therefrom requests that such a waiver be obtained, the
other party agrees to obtain an endorsement to its insurance policies permitting
such waiver of subrogation, if available, and if an additional premium is
charged for such waiver, the party benefiting therefrom shall pay same promptly
upon being billed therefor. Nothing in the foregoing is intended to require a
tenant to reduce for deductible amounts of its insurance below such amounts as
of the date of execution of this Lease.
10. Insurance
(A) Tenant, at Tenant's expense, shall maintain in effect throughout
the Term, through insurance carriers reasonably satisfactory to Landlord; (i)
insurance against claims for personal injury (including death) and property
damage, under a policy of general public liability insurance, in amounts not
less than $1,000,000 combined single limit in respect of bodily injury
(including death) and $100,000 for property damage; and (ii) such other
insurance as may reasonably be required by the holder of a mortgage on the
Building. The insurance Policy referred to in subsection (i) above shall name
both Landlord and Tenant as insured parties.
(B) Prior to the commencement of the Term, Tenant shall provide
Landlord with certificates of the insurance policies herein required of Tenant.
All policies shall provide that coverage thereunder may not be reduced or
terminated without at least thirty days' prior written notice to Landlord.
Tenant shall furnish to Landlord throughout the Term replacement certificates at
least thirty days prior to the expiration date of the then current policies and,
upon request of Landlord, shall supply to Landlord copies of all policies herein
required of Tenant.
(C) Each of the parties hereto hereby releases the other from all
liability for all injury, loss or damage which may be inflicted upon persons or
the property of such party, even if such liability results from the negligence
of the other party; PROVIDED, HOWEVER, that this release shall be effective only
(i) during such time as the applicable insurance policy carried by such party
names the other party as a co-insured or contains a clause to the effect that
this release shall not affect said policy or the right of the insured to recover
thereunder, and (ii) to the extent of the coverage of such policy. If any policy
does not permit such a waiver, and if the party to benefit therefrom requests
that such
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a waiver be obtained, the other party agrees to obtain an endorsement to its
insurance policies permitting such waiver of subrogation, if available, and if
an additional premium is charged for such waiver, the party benefiting therefrom
shall pay same promptly upon being billed therefor. Nothing in the foregoing is
intended to require the tenant to reduce for deductible amounts of its insurance
below such amounts as of the date of execution of this Lease.
11. Casualty
(A) If the Premises are damaged by fire or other casualty, Tenant
shall promptly notify Landlord and Landlord shall repair the damaged portions of
the Premises (but not any of Tenant's property therein or improvements or
alterations made by Tenant), except that if, in Landlord's reasonable judgment,
the damage would require more than sixty days of work to repair, or if the
insurance proceeds (excluding rent insurance) which Landlord anticipates
receiving must be applied to repay any mortgages encumbering the Building or are
otherwise inadequate to pay the cost of such repair, the Landlord shall have the
right to terminate this Lease by so notifying Tenant, which notice shall specify
a termination date not less than fifteen days after its transmission. If
Landlord is so required to repair, the work shall be commenced promptly and
completed with due diligence, taking into account the time required for Landlord
to procure said insurance proceeds, and construction delays due to shortages of
labor or material or other causes beyond Landlord's reasonable control.
(B) During the period when Tenant shall be deprived of possession of
the Premises by reason of such damage, Tenant's obligation to pay Base Rent
under Section 5 and Operating Expense Allowance under Section 6 shall abate in
the proportion which the damaged area of the Premises bear to the entire
Premises, Landlord represents to Tenant that at all times of this Lease it will
carry insurance covering the loss of the Fixed Rent payable under the terms of
this Lease.
12. Condemnation
(A) If all the Premises is taken through the exercise of the power of
eminent domain, this Lease shall terminate on the date when possession of the
Premises is required by the condemning authority. If only part of the Premises
is taken, then (i) if the condemnation award is insufficient to restore the
remaining portion of the Premises or if such award must be applied to repay any
mortgages encumbering the Building, or (ii) if, in addition to a portion of the
Premises, a portion of the Building or Land is taken and Landlord deems it
commercially unreasonable to continue leasing all or a portion of the remaining
space in the Building, or (iii) if a substantial portion of the Premises is to
taken, and it is commercially impossible for Tenant to continue its business
within
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the Premises, then Landlord in the case of (i) and (ii) above and Tenant in the
case of (iii) above, shall have the right to terminate this Lease on the date
when the condemned portion of the premises, Building or Land is required to be
delivered to the condemning authority, which right shall be exercisable by the
exercising party so notifying the other party no later than thirty (30) days
prior to such date.
(B) If this Lease is not so terminated after a partial condemnation,
then after the date when the condemned portion of the Premises is delivered to
the condemnor, the Fixed Rent shall be reduced in the proportion which the
condemned area bears the entire area of the Premises, and Tenant's Proportionate
Share shall be reduced by the same portion.
(C) Tenant shall have the right to claim against the condemnor only
for removal and moving expenses and business dislocation damages which may be
separately payable to tenants in general under Pennsylvania law, provided such
payment does not reduce the award otherwise payable to Landlord, Subject to the
foregoing. Tenant hereby waives all claims against Landlord with respect to a
condemnation, and hereby assigns to Landlord all claims against the condemnor
including, without limitation, all claims for leasehold damages and diminution
in the value of Tenant's leasehold estate.
13. Tenant's Fixtures
Tenant shall have the right to install trade fixtures, office
machinery and equipment (excluding alterations, improvements and additions which
are governed by Section 14) required by Tenant or used by it in its business,
provided that same do not impair the structural strength of the Building and
further provide that such trade fixtures, office machinery and equipment shall
be limited to items normally used in an office/laboratory building. Without
limiting the generality of the foregoing, it is specifically understood and
agreed that Tenant shall not have the right to install or operate any electrical
equipment or machinery in the Premises (other than normal office machinery and
equipment such as typewriters, adding machines, and copiers) without Landlord's
prior written consent, such consent not be unreasonably withheld or delayed.
Tenant shall remove all such trade fixtures, office machinery and equipment
prior to the end of the Term, and Tenant shall repair and restore any damage to
the Premises and Building caused by such installation or removal.
14. Alterations
Tenant shall not, without on each occasion first obtaining Landlord's
prior written consent, such consent not to be unreasonably withheld or delayed,
make any alterations, improvements or additions to the premises, except that
Tenant may, without
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consent of Landlord but with prior written notice to Landlord, make minor
improvements to the interior of the Premises provided that: (i) they do not
impair the structural strength, operation or value of the Building, and (ii)
Tenant shall, prior to the commencement of the work and to the extent
applicable, (and excluding any personal property therein or trade fixtures
installed therein shall) deliver to Landlord waivers of liens, in form
acceptable to Landlord, from all contractors, subcontractors and materialmen
performing such work, and shall take all steps required or permitted by law to
avoid the imposition of any mechanics' lien upon the Premises, Building and
Land. All alterations, improvements and additions, except for minor alterations
and improvements (and excluding any personal property therein or trade fixtures
installed therein shall) become part of the Premises and the property of
Landlord without payment therefor by Landlord and shall be surrendered to
Landlord at the end of the Term; PROVIDED, HOWEVER, if so notified by Landlord,
Tenant shall, prior to the end of the Term, remove all and any such alterations
and improvements made by Tenant after initial occupancy, or the parts thereof
specified by Landlord, from the Premises and shall repair all damages caused by
installation and removal. For purposes of this Section 14, "minor improvements"
shall be defined as those improvements costing no more than $25,000.
15. Mechanics' Liens
Tenant shall not, in the making of any repairs or alterations pursuant
to the provisions of Section 14 hereof, suffer or permit any mechanic's,
laborer's or materialman's lien to be filed against the Premises, Building, Land
or any part thereof by reason of labor or materials supplied or claimed to have
been supplied to Tenant; and if any such lien shall be filed, Tenant, within
fifteen days after notice of filing, shall cause it to be discharged of record.
16. Use of Premises
Tenant may use and occupy the Premises only for the express and
limited purpose listed in Section 1 of this Lease, and the Premises shall not be
used or occupied, in whole or in part, for any other purpose without the prior
written consent of Landlord. Tenant shall not commit or suffer any waste upon
the Premises or building, or any nuisance or any other act which may disturb the
quiet enjoyment of any other tenant in the Building. Landlord represents to
Tenant that the Premises may be used for the purpose specified in this Lease.
17. Rules and Regulations
Tenant covenants and agrees that Tenant, its employees, agents,
invitees, licensees and other visitors, shall observe faithfully, and comply
strictly with, such reasonable Rules and
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Regulations as Landlord's agents may, after notice to Tenant, from time to time
adopt with respect to the Building.
18. Governmental Regulations
Tenant shall, in the use and occupancy of the Premises, comply with
all applicable laws, ordinances, notices and regulations of all governmental and
municipal authorities, and with regulations of the insurers of the Premises.
Tenant shall keep in force at all times all licenses, consents and permits
necessary for the lawful conduct of Tenant's business at the Premises. Nothing
in the foregoing shall require the Tenant to perform any work or make any
improvement or repairs which the Landlord is required to make pursuant to other
provisions of this Lease.
19. Signs
Landlord, at Tenant's expense, shall construct one standard building
identification sign for Tenant upon the Land at a location to be selected by
Landlord. Except for signs which are located wholly with the interior of the
Premises and which are not visible from the exterior thereof, no signs shall
erected by Tenant anywhere upon the Premises, Building or Land.
20. Landlord's Entry
Landlord and its agents, contractors and invitees shall have the right
to enter the Premises at all reasonable times with reasonable notice to inspect
the same, to exhibit same to prospective purchasers, tenants and mortgagees, and
to make any necessary repairs thereto. During the last six (6) months of the
terms; Landlord shall have the right for a reasonable number of times to show
the Premises to prospective tenants. Landlord shall not be liable in any manner
to Tenant by reason of such entry or the performance of repair work in the
Premises provided reasonable care is exercised by Landlord and for its agents or
representatives, and the obligation of Tenant hereunder shall not thereby be
affected; however, Landlord agrees (except in the case of Tenant's default
hereunder) that all repair work (excepting only emergency work or work which
must, in Landlord's reasonable judgment, be performed on an urgent basis) by
Landlord shall be performed in a reasonable manner at reasonable times.
21. Indemnification
Tenant shall indemnify Landlord from and against any and all losses,
costs (including reasonable counsel fees), claims, sits, actions and causes of
action, whether legal or equitable, sustained or arising by reason of Tenant's
default in any of its obligations hereunder, or of the fault or neglect of
Tenant or of the failure by Tenant or any of its officers, agents, employees or
invitees to fulfill any duty toward the public, or any person or
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persons whomsoever, which Tenant, by reason of its occupancy or use of the
Premises, may owe.
22. Curing Tenant's Defaults
If Tenant shall default in performing any of its obligations
hereunder, Landlord may (but shall not be so obliged), in addition to Landlord's
other rights and remedies and without waiver of such default, cure such default
on behalf of Tenant, thereby entering and possessing the Premises if deemed
reasonable by Landlord, provided that Landlord shall have first given Tenant
notice of such default and Tenant shall have failed within ten (10) days
following said notice to cure or diligently to pursue the cure of said default
(which notice and opportunity to cure shall not be required in case of
emergency), Tenant, upon demand of Landlord, shall reimburse Landlord for all
reasonable costs (including reasonable counsel fees) incurred by Landlord with
respect to such default, and, if Landlord so elects, Landlord's efforts to cure
the same, which costs shall be deemed Additional Rent hereunder.
23. Default
(A) If (i) Tenant fails to pay any installment of Base Rent when due,
(ii) Tenant fails to pay any Additional Rent when due and such failure continues
for a period of ten (10) days after written notice from Landlord, (iii) Tenant
vacates the Premises, (iv) Tenant fails to observe or perform any of Tenant's
other obligations herein contained and such failure continues for more than
fifteen (15) days after written notice from Landlord, (v) Tenant commits an act
of bankruptcy or files a petition or commences any proceeding under any
bankruptcy or insolvency law, (vi) a petition is filed or any proceeding is
commenced against Tenant under any bankruptcy or insolvency law and is not
dismissed within ninety (90) days, (vii) Tenant is adjudicated a bankrupt,
(viii) a receiver or other official is appointed for Tenant or for a substantial
part of Tenant's assets or for Tenant's interest in this Lease, or (ix) any
attachment or execution is filed or levied against a substantial part of
Tenant's assets or Tenant's interests in this Lease or any of Tenant's property
in the Premises, then in any such event, an Event of Default shall be deemed to
exist and Tenant shall be in default hereunder, and, at the option of Landlord:
(a) the balance of the Base Rent and all Additional Rent and all other sums to
which Landlord is entitled hereunder shall be deemed to be due payable in
accordance with the terms hereto and in arrears, as if payable in advance
hereunder; or (b) this Lease and the Term shall, without waiver of Landlord's
other rights and remedies, terminate without any right of Tenant to save the
forfeiture. Any acceleration of the rent by landlord shall not constitute a
waiver of any right or remedy of Landlord, and if Tenant shall fail to pay the
accelerated rent when due, then Landlord may thereafter terminate this Lease, as
aforesaid. Immediately upon such termination by Landlord, Landlord shall have
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the right to recover possession of the Premises with or without legal process,
breaking locks and replacing locks, and removing Tenant's and any third party's
property therefrom, and making any disposition thereof as Landlord may deem
commercially reasonable.
(B) Following such termination, Landlord shall have the unrestricted
right to lease the Premises or any part thereof to any person and pursuant to
any terms as Landlord may elect, but Landlord shall have no obligations to rent
the Premises so long as Landlord (or any related entity) has other comparable
vacant space available for leasing in the general geographic area of the
Premises.
(C) No act or forbearance by Landlord shall be deemed a waiver or
election of any right or remedy by Landlord with respect to Tenant's obligations
hereunder, unless and to the extent that Landlord shall execute and deliver to
Tenant a written instrument to such effect, and any such written waiver by
Landlord shall not constitute a waiver or relinquishment for the future of any
obligation of Tenant. Landlord's acceptance of any payment from Tenant
(regardless of any endorsement on any check or any writing accompanying such
payment) may be applied by Landlord to Tenant's obligations then due hereunder
in any priority as Landlord may elect, and such acceptance by Landlord shall not
operate as an accord and satisfaction or constitute a waiver of any right or
remedy of Landlord with regard to Tenant's obligations hereunder.
24. Quiet Enjoyment
So long as Tenant is not in default under the covenants and agreements
of this Lease, Tenant's quiet and peaceful enjoyment of the Premises shall not
be disturbed or interfered with by Landlord or by any person claiming by,
through or under Landlord.
25. Assignment and Subletting
Tenant shall not assign, pledge, mortgage or otherwise transfer or
encumber this Lease, nor sublet all or any part of the Premises or permit the
same to be occupied or used by anyone other than Tenant or its employees without
Landlord's prior written approval, which Landlord agrees not unreasonably to
withhold or delay. It will not be unreasonable for Landlord to withhold consent
if the reputation, financial responsibility, or business of a proposed assignee
or subtenant is reasonably unsatisfactory to Landlord, or if Landlord deems such
business not to be consonant with that of other tenants in the Building, or if
the intended use by the proposed assignee or subtenant conflicts with any
commitment made by landlord to any other tenant in the Building.
Tenant's request for approval shall be in writing and contain the name,
address, and description of the business of the proposed assignee or subtenant,
its most recent financial statement
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and other evidence of financial responsibility, its intended use of the
Premises, and the terms and conditions of the proposed assignment or subletting.
Within thirty (30) days from receipt of such request Landlord shall
either: (a) grant or refuse consent; or (b) elect to require Tenant (i) to
execute an assignment of lease or sublease of Tenant's interest hereunder to
Landlord or its designee upon the same terms and conditions as are contained
herein, together with an assignment of Tenant's interest as sublessor in any
such proposed sublease, or (ii) if the request is for consent to a proposed
assignment of this Lease, to terminate this Lease and the term hereof effective
as of the last day of the third month following the month in which the request
was received.
Each assignee or sublessee of Tenant's interest hereunder shall assume
and be deemed to have assumed this Lease and shall be and remain liable jointly
and severally with Tenant for all payments and for the due performance of all
terms, covenants, conditions and provisions herein contained on Tenant's part to
be observed and performed. No assignment or refusal of an assignee to execute
the same shall not release assignee from its liability as set forth herein.
Any consent by Landlord hereunder shall not constitute a waiver of
strict future compliance by Tenant of the provisions of this Section 25 or a
release of Tenant from the full performance by Tenant of any of the terms,
covenants, provisions, or conditions in this Lease contained.
26. Subordination
This Lease is and shall be subject and subordinate at all times to any
lease under which landlord is in control of the Premises, to the rights of the
owners of the Building and Land, and to all mortgages and other encumbrances now
or hereafter placed upon the Premises or the Building and Land without the
necessity of any further instrument or act on the part of Tenant to effectuate
such subordination. Tenant shall from time to time execute and deliver within
ten days following the request of Landlord or Landlord's mortgagee, grantee or
lessor, recordable instruments evidencing such subordination and Tenant's
agreement to attorn to the holder of such priority right. Notwithstanding the
foregoing, any mortgagee may at any time subordinate its mortgage to this Lease,
without Tenant's consent, by notice in writing to Tenant, whereupon this Lease
shall be deemed prior to such mortgage without regard to their respective dates.
27. Tenant's Certificate
Tenant shall from time to time, within fifteen (15) days after
Landlord's request, execute and deliver to Landlord a
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recordable written instrument(s) certifying that this Lease is unmodified and in
full effect (or if there have been modifications, that it is in effect as
modified), and the dates to which rental charges have been prepaid by Tenant, if
any, and whether or not Landlord is in default of any of its obligations
hereunder, Tenant agrees that such statement may be relied upon by any
mortgagee, purchaser or assignee of Landlord's interest in this Lease, the
Building or Land.
28. Acceptance; Surrender
By entry and possession of the Premises, Tenant thereby acknowledges
that Tenant has examined the Premises and accepts the same as being in the
condition called for by this Lease subject to completion of Landlord's work and
completion of "punch-list" items. Tenant, shall, at the end of the Term,
promptly surrender the Premises in the order and condition called for by this
Lease. Tenant, shall, at the end of the Term, promptly surrender the Premises in
the same order and condition as on the date hereto and in conformity with the
applicable provisions of this Lease, excepting only reasonable wear and tear
damage by fire or other casualty.
29. Holding Over
This Lease shall expire absolutely and without notice on the last day
of the Term, provided that if Tenant, with the prior written consent of
Landlord, retains possession of the Premises or any part thereof after the
termination of this Lease by expiration of the Term or otherwise, a
month-to-month tenancy shall be deemed to exist, and Tenant shall continue to
pay the Base Rent and Additional Rent due hereunder. If such holding over exists
without Landlord's prior written consent, Tenant shall pay Landlord, as partial
compensation for such unlawful retention, an amount calculated on a per diem
basis for each day of such continued unlawful retention, equal to one and
one-half the Base Rent and Additional Rent for the time Tenant thus remains in
possession. Such payments for unlawful retention shall not limit any rights or
remedies of Landlord resulting by reason of the wrongful holding over by Tenant
or create any right in Tenant to continue in possession of the Premises.
30. Notices
All notices, requests and consents herein required or permitted from
either party or the other shall be in writing and shall be deemed given when
deposited with the Unites States Postal Service, registered or certified mail,
return receipt requested, postage prepaid, addressed to Landlord at its address
aforesaid, with a copy to any mortgagee designated by Landlord, or, as the case
may be, addressed to Tenant at its address aforesaid, or to
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such other address as the party to receive same may designate by notice to the
other.
31. Broker
Each of the parties represents and warrants that there are no claims
for brokerage commissions or finder's fees in connection with the execution of
this Lease, except for Oakmont Realty Corp. & Grubb & Ellis Company for whose
commission Landlord is solely responsible, and each party agrees to indemnify
the other against, and hold it harmless from, all liability arising from any
such claim including, without limitation, the cost of reasonable counsel fees in
connection therewith.
32. Definition of Parties
The word "Landlord" is used herein to include the Landlord named above
and any subsequent person who succeeds to the rights of Landlord herein, each of
whom shall have the same rights and remedies as he would have had had he
originally signed this Lease as Landlord, but neither Landlord nor any such
person shall have any liability hereunder after he ceases to hold a free or
leasehold interest in the Premises, except for obligations which may have
theretofore accrued; and in all events, Tenant shall look solely to the Premises
and rents derived therefrom for enforcement of any obligation hereunder or by
law assumed or enforceable against Landlord or such other person. The word
"Tenant" is used herein to include the party named above as Tenant as well as
its or their respective heirs, personal representatives, successors and assigns,
each of whom shall be under the same obligations, liabilities and disabilities
and have only such rights, privileges and powers as he would have possessed had
he originally signed this Lease as Tenant.
33. Entire Agreement; Interpretation
This Lease constitutes the entire agreement between the parties hereto
with respect to the Premises and there are no other agreements or
understandings. This Lease shall not be modified except by written instrument
executed by both parties. The captions used herein are for convenience only, and
are not part of the Lease. This Lease shall be construed in accordance with the
laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease, under
seal, as of the day and year first above written.
TENANT: Petroleum Heat &
Power Co., Inc.
WITNESS: /s/ By: /s/
_________________________ ________________________________
Date: November 1, 1996
LANDLORD: Carriage Group
WITNESS: /s/ By: /s/
_________________________ ________________________________
Date: November 8, 1996
Addendum to Lease Agreement attached hereto and made a part hereof.
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ADDENDUM TO LEASE AGREEMENT
ADDENDUM made this 8th day of November, 1996 to Lease Agreement dated
______________________, 199_ by and between Carriage Group ("Lessor") and
Petroleum Heat & Power Co., Inc. ("Lessee").
Anything in the printed form of the Lease or elsewhere to the contrary
notwithstanding, the parties hereto further expressly agree as follows:
34. Base Rent Schedule:
Base Rent shall be due and payable on the first day of each calendar month
of the term in accordance with the following schedule:
1st - 60th Month: $30,000 per month net of all Operating
Expenses
61st - 120th Month: $33,000 per month net of all Operating
Expenses
35. Option to Renew:
Tenant shall have the option of extending the initial Lease Term for two
(2) additional periods of five (5) years each (said five year periods are
referred to as the "First Renewal Term" and the "Second Renewal Term"). In
order to exercise the Tenant's option to renew this Lease for the First
Renewal Term, the Tenant must provide Landlord with written notice of
Tenant's intention to renew at least 180 days prior to the expiration of
the Initial Lease Term and, at such time, Tenant shall not be in default of
any of its obligations under the Lease beyond any applicable cure or grace
period. The Base Rent during the First Renewal Term shall equal Thirty Six
Thousand Three Hundred Dollars ($36,300.00) per month. In order to exercise
the Tenant's option to renew this Lease for the Second Renewal Term, the
Tenant must have previously exercised its option to renew the Lease for the
First Renewal Term and Tenant must provide the Landlord with written notice
of its intention to renew at least 180 days prior to the expiration of the
First Renewal Term and, at such time, the Tenant shall not be in default of
any of its obligations under this Lease beyond any applicable care or grace
period. The Base Rent during the Second Renewal Term shall equal Thirty
Nine Thousand Nine Hundred Thirty Dollars ($39,930.00) per month. If the
Tenant does elect to renew this Lease as aforesaid, all the terms and
conditions of this Lease shall remain in full force and effect with the
Base Rent being increased as set forth herein. If the Tenant fails to
provide Landlord with written notice of its intention to renew as and
at the times required herein (said times being of the essence of this
Lease), Tenant's option(s) to renew shall automatically terminate without
the need for additional notice. Tenant shall provide Landlord with written
notice of its intention to renew by certified mail, return receipt
requested, to Carriage Group or to such address as may hereafter be
designated in writing by Landlord to Tenant for such purpose. Any notice
sent in accordance with the aforesaid shall, for the purpose of this Lease,
be deemed received on the date received by Landlord as evidenced by the
return receipt signed by Landlord or Landlord's authorized agent.
36. Modular Furniture:
Landlord and Tenant agree that all Centercore Systems Furniture that is
currently located within the 30,000 SF demised premises shall become the
property of Tenant upon occupancy of Premises by Tenant.
37. Back-Up Generator:
Landlord owns a gas fired back-up generator currently located outside the
southwest corner of the Premises. Landlord and Tenant agree that the
generator shall remain the property of Landlord, however, Tenant shall have
the right to use this back-up generator during the term of this Lease and
any renewal periods exercised by Tenant pursuant to Paragraph 34. Landlord
makes no representations concerning the condition of the generator. Tenant
shall, at Tenant's cost, maintain the generator throughout Tenant's
occupancy of the premises (if it continues to elect to use same) and
Landlord shall at no time be obligated to repair or replace the generator.
38. Nondisturbance Agreement:
Tenant's agreement to subordinate this Lease to all present and future
leases, rights, mortgages and other encumbrances, as provided in Article 26
hereof, is expressly subject to and conditioned upon Landlord obtaining a
nondisturbance agreement from the holder of the present and any future
ground, master or operating Leases of the Premises or the Building and any
and all present and future mortgages, security instruments or other
security interests upon or affecting the Building and to all advances
thereunder and all renewals, replacements, modifications, amendments,
consolidations and extensions thereof. Each such future nondisturbance
agreement shall be in form and substance reasonably satisfactory to Tenant
provided that Landlord shall pay all costs, fees and expenses imposed on
Landlord in connection with obtaining such non-disturbance agreement.
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39. Available Space Notice:
Notwithstanding anything to the contrary contained herein, if and when any
other space in the Building becomes available for lease, Landlord shall
notify Tenant thereof in writing, and within five (5) days of Tenant's
receipt of such written notice (the "Five (5) Day Period"), Tenant shall
have the exclusive right (but not the obligation), by giving written notice
thereof to Landlord within the Five (5) Day Period, to lease such
additional space, failing which Tenant shall no longer have the exclusive
right to lease the additional space. If Tenant leases the additional space
by written notice given within the Five (5) Day Period, all lease terms and
conditions shall be mutually agreed upon by Landlord and Tenant.
IN WITNESS WHEREOF the parties hereto have executed these presents the day
and year first above written and intent to be legally bound thereby.
LANDLORD: Carriage Group
WITNESS: /s/ By: /s/
_________________________ ________________________________
Date: November 8, 1996
TENANT: Petroleum Heat &
Power Co., Inc.
WITNESS: /s/ By: /s/
_________________________ ________________________________
Date: November 1, 1996
- 3 -
EXHIBIT "B"
CONSTRUCTION SPECIFICATION
PETRO at 467 CREAMERY WAY, EXTON, PENNSYLVANIA
Landlord, at Landlord's sole cost and expense, shall construct the following
improvements to the Premises. Any modifications to these improvements must be
agreed upon by Landlord and Tenant. Any additional improvements required by
Tenant shall be at Tenant's sole cost and expense. All improvements will be in
accordance with the following:
1) Landlord shall repaint all drywall surfaces with one coat of flat latex
paint.
2) Landlord shall demise the premises with a fire rated drywall demising wall
pursuant to the Construction Plan attached hereto.
3) Landlord will provide Tenant with a recarpeting allowance of $2.00/SF to
recarpet the premises. Allowance shall be paid to Tenant within sixty (60)
days of Tenant's occupancy of the Premises.
4) Landlord will separately meter the gas and electric service to Tenant's
demised premises.
5) Landlord shall add two (2) additional toilets in each of the restroom
facilities (total of 4 additional toilets). Pursuant to the attached
Construction Plan no other plumbing is included.
EXHIBIT "C"
467 CREAMERY WAY
EXTON, PENNSYLVANIA
ESTIMATED 1996 OPERATING EXPENSE BUDGET
COMMON AREA SERVICE COST/SQ. FT.
------------------- ------------
REAL ESTATE TAXES $1.15
PROPERTY & LIABILITY INSURANCE .11
LANDSCAPE MAINTENANCE .15
SNOW REMOVAL .13
WATER & SEWER .08
BUILDING MAINTENANCE .10
TRASH REMOVAL .09
WINDOW CLEANING .03
SPRINKLER MAINTENANCE .03
PARK ASSESSMENT .03
HVAC MAINTENANCE .20
PARKING LOT MAINTENANCE .05
Administrative Fee (15%) .10
-----
TOTAL ESTIMATED EXPENSES $2.25
Janitorial to be paid by Tenant directly to Tenant's janitorial company.
Electric/Gas - To be paid by Tenant directly to the utility company.