Document:

Exhibit 10.13

 

THE CORPORATE CAMPUS AT SPRING RIDGE

 

SUMMARY OF LEASE TERMS

 

The terms of this Lease (the “Lease”) set forth on these summary pages (the
“Summary”) are for convenience and are subject to further explanation in the
Lease.  All terms defined on these
summary pages are incorporated by reference into the Lease as if set forth
in their entirety therein.

 

	
   

  	
   

  	
  Reference

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Landlord’s
  Name and Address:

  	
   

  	
  ¶38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Corporate Campus at Spring Ridge 1250,
  L.P.

  	
   

  	
   

  	
   

  
	
   

  	
  Limited Partnership

  	
   

  	
   

  	
   

  
	
   

  	
  (the “Landlord”)

  	
   

  	
   

  	
   

  
	
   

  	
  825 Berkshire Boulevard

  	
   

  	
   

  	
   

  
	
   

  	
  Suite 203

  	
   

  	
   

  	
   

  
	
   

  	
  Wyomissing, Pennsylvania 19610

  	
   

  	
   

  	
   

  
	
   

  	
  Attention: Mr. Stephen J. Najarian

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Tenant’s
  Name and Address:

  	
   

  	
  ¶38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Penn National Gaming, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
  (the “Tenant”)

  	
   

  	
   

  	
   

  
	
   

  	
  825 Berkshire Boulevard, Suite 200

  	
   

  	
   

  	
   

  
	
   

  	
  Wyomissing, Pennsylvania 19610

  	
   

  	
   

  	
   

  
	
   

  	
  Attention: Mrs. Susan Montgomery

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Leased
  Premises:

  	
   

  	
  ¶1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The area shown on Exhibit “A” attached
  hereto and made a part hereof (the “Premises”), containing approximately
  1,042 square feet of rentable floor area, situate on the ground floor of a
  building (the “Building”) constructed on the land. The building contains
  approximately 10,042 square feet of rentable floor area.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Building
  Location:

  	
   

  	
  ¶1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Building is located on a tract of land
  (the “Land”) consisting of approximately 15 acres, located on the North side
  of Berkshire Boulevard, and the East side of Paper Mill Road in the Borough
  of Wyomissing, Berks County, Pennsylvania.

  	
   

  	
   

  	
   

  

 

1

 

	
  5.

  	
  Building
  Common Area:

  	
   

  	
  ¶4(c)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The area shown on Exhibit “F” attached
  hereto and made a part hereof (the “Building Common Area”).

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Parking
  Spaces:

  	
   

  	
  ¶1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  In connection with its use of the Premises,
  Tenant shall have the right to use 4 undesignated parking spaces
  (collectively, the “Parking Spaces”) in the parking area adjacent to the
  Building.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Date of
  Lease:

  	
   

  	
  ¶2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  August 22, 2003

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Commencement
  Date:

  	
   

  	
  ¶2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The term of this Lease shall commence on
  the first to occur of (a) the date on which Tenant takes occupancy of or
  commences business at the Premises, or (b) the date of substantial
  completion, being the date when a certificate of occupancy for the Premises
  is issued by the applicable municipal authority (the “Commencement Date”).
  The anticipated Commencement Date is September 1, 2003.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Term:

  	
   

  	
  ¶2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Three (3) years from the first day of
  the first full month of occupancy after the Commencement Date (the “Term”).

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Fixed Annual
  Minimum Rent:

  	
   

  	
  ¶3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Starting rent based on $10.00 per rentable
  square foot. Rent to be pro rated during any partial months. 2% annual
  increase over prior year’s Annual Minimum Rent.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Premises size:

  	
  1,042 RSF

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Starting
  Rate/RSF:

  	
  $10.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annual
  Escalation:

  	
  2.0%

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease

  Yr.

  	
   

  	
  Rentable

  SF

  	
   

  	
  Annual Rent per

  Rentable SF

  	
   

  	
  Annual Rent (the

  “Annual

  Minimum Rent”)

  	
   

  	
  Monthly Rent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
   

  	
  1,042

  	
   

  	
  $

  	
  10.00

  	
   

  	
  $

  	
  10,420.00

  	
   

  	
  $

  	
  868.33

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
   

  	
  1,042

  	
   

  	
  $

  	
  10.20

  	
   

  	
  $

  	
  10,628.40

  	
   

  	
  $

  	
  885.70

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
   

  	
  1.042

  	
   

  	
  $

  	
  10.40

  	
   

  	
  $

  	
  10,840.97

  	
   

  	
  $

  	
  903.41

  	
   

  	
   

  	
   

  
																			

 

2

 

	
  11.

  	
  Tenant’s
  Share of Expenses (“Premises Expenses”):

  	
   

  	
  ¶4(c)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Tenant to pay full pro rata share of all
  operating expenses. First year budget based on $3.75 per SF of rentable floor
  area not including janitorial expenses.

  	
   

  	
  Exhibit “B”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease

  Yr.

  	
   

  	
  Rentable

  SF

  	
   

  	
  CAM est per

  RSF

  	
   

  	
  Monthly CAM

  	
   

  	
  Annual CAM

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
   

  	
  1,042

  	
   

  	
  $

  	
  3.75

  	
   

  	
  $

  	
  325.63

  	
   

  	
  $

  	
  3,907.50

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Building Standard Work Allowance:

  	
   

  	
  ¶10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  $0.00 per square foot of usable floor area
  of the Premises (the “Building Standard Work Allowance”). Landlord, at its
  cost, will complete improvements to the Premises set forth in Exhibit “E”
  attached hereto. Tenant to provide funding for any additional interior
  improvements within the Premises.

  	
   

  	
  Exhibit “E”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Security
  Deposit:

  	
   

  	
  ¶5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Waived

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Use of
  Premises:

  	
   

  	
  ¶6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Storage of general office and marketing
  materials (the “Permitted Use”).

  	
   

  	
   

  	
   

  
																			

 

3

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord
and Tenant have caused this Summary of Lease Terms to be duly executed this 22nd
day of August, 2003.

 

THIS LEASE MUST BE EXECUTED FOR TENANT, IF A
CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY
OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF
DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE
BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LESSOR.

 

 

	
   

  	
   

  	
  THE CORPORATE CAMPUS AT SPRING RIDGE 1250,
  LIMITED PARTNERSHIP, a Pennsylvania limited partnership, by its General
  Partner, THE CORPORATE CAMPUS AT SPRING RIDGE 1250, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Stephen J. Najarian

  
	
   

  	
   

  	
   

  	
  Stephen J.
  Najarian, President

  
	
   

  	
   

  	
   

  	
  (“Landlord”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Susan M. Montgomery

  	
   

  	
  By:

  	
  /s/ Robert S. Ippolito

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Susan M. Montgomery

  	
   

  	
  Name:

  	
  Robert S. Ippolito

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Office Mgr/Asst to the Chairman

  	
   

  	
  Title:

  	
  Vice President/Secretary, Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
  August 22, 2003

  
	
   

  	
   

  	
   

  	
   

  	
  (“Tenant”)

  
											

 

4

 

TABLE OF CONTENTS

 

	
  1.

  	
  PREMISES

  	
   

  
	
  2.

  	
  TERM

  	
   

  
	
  3.

  	
  RENT

  	
   

  
	
  4.

  	
  TENANT’S SHARE OF EXPENSES

  	
   

  
	
  5.

  	
  SECURITY DEPOSIT

  	
   

  
	
  6.

  	
  USE

  	
   

  
	
  7.

  	
  SERVICES AND FACILITIES

  	
   

  
	
  8.

  	
  UTILITIES

  	
   

  
	
  9.

  	
  CONSTRUCTION OF BUILDING

  	
   

  
	
  10.

  	
  BUILDING STANDARD WORK ALLOWANCE

  	
   

  
	
  11.

  	
  SIGNS

  	
   

  
	
  12.

  	
  AFFIRMATIVE COVENANTS OF TENANT

  	
   

  
	
  13.

  	
  NEGATIVE COVENANTS OF TENANT

  	
   

  
	
  14.

  	
  NO MECHANICS’ LIENS

  	
   

  
	
  15.

  	
  LANDLORD’S RIGHT TO ENTER

  	
   

  
	
  16.

  	
  RELEASE OF LANDLORD

  	
   

  
	
  17.

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
  18.

  	
  ENVIRONMENTAL COMPLIANCE

  	
   

  
	
  19.

  	
  INDEMNIFICATION

  	
   

  
	
  20.

  	
  LIABILITY INSURANCE

  	
   

  
	
  21.

  	
  FIRE OR OTHER CASUALTY

  	
   

  
	
  22.

  	
  WAIVER OF SUBROGATION

  	
   

  
	
  23.

  	
  NO IMPLIED EVICTION

  	
   

  
	
  24.

  	
  CONDEMNATION

  	
   

  
	
  25.

  	
  LANDLORD’S RIGHT TO PAY TENANT EXPENSES

  	
   

  
	
  26.

  	
  EVENTS OF DEFAULT

  	
   

  
	
  27.

  	
  LANDLORD’S REMEDIES

  	
   

  
	
  28.

  	
  CONFESSION OF JUDGMENT FOR DAMAGES

  	
   

  
	
  29.

  	
  CONFESSION OF JUDGMENT IN EJECTMENT

  	
   

  
	
  30.

  	
  RIGHT OF ASSIGNEE OF LANDLORD

  	
   

  
	
  31.

  	
  REMEDIES CUMULATIVE

  	
   

  
	
  32.

  	
  TENANT’S WAIVERS

  	
   

  
	
  33.

  	
  ATTORNMENT

  	
   

  
	
  34.

  	
  SUBORDINATION

  	
   

  
	
  35.

  	
  EXECUTION OF DOCUMENTS

  	
   

  
	
  36.

  	
  ESTOPPEL AGREEMENTS

  	
   

  
	
  37.

  	
  CONDOMINIUM CONVERSION

  	
   

  
	
  38.

  	
  NOTICES

  	
   

  
	
  39.

  	
  BINDING EFFECT

  	
   

  
	
  40.

  	
  SURVIVAL OF VALID TERMS

  	
   

  
	
  41.

  	
  ENTIRE AGREEMENT

  	
   

  
	
  42.

  	
  PROHIBITION AGAINST RECORDING

  	
   

  
	
  43.

  	
  INTERPRETATION

  	
   

  

 

i

 

	
  44.

  	
  LIABILITY OF LANDLORD

  	
   

  
	
  45.

  	
  CAPTIONS AND HEADINGS

  	
   

  
	
  46.

  	
  NO BROKERAGE COMMISSION

  	
   

  
	
  47.

  	
  QUIET ENJOYMENT

  	
   

  
	
  48.

  	
  WAIVER OF TRIAL BY JURY

  	
   

  
	
  49.

  	
  OWNERS’ ASSOCIATION

  	
   

  

 

ii

 

LEASE
AGREEMENT

 

IN CONSIDERATION of the mutual promises contained herein, and intending
to be legally bound hereby, Landlord and Tenant, in addition to the foregoing
Summary, agree as follows:

 

1.                                       PREMISES.
 Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the Premises.  In connection with its use of the Premises,
Tenant shall have the right to use the Parking Spaces.

 

2.                                       TERM.

 

(a)                                  The Term of this
Lease shall commence on the Commencement Date, unless construction is delayed
as provided in Paragraph 9(b).

 

(b)                                 within thirty (30)
days after the Commencement Date, Landlord and Tenant shall execute a letter
agreement specifying the Commencement Date. 
Failure to execute such letter agreement shall in no way cause this
Lease not to remain in full force and effect.

 

(c)                                  Tenant shall surrender and
deliver up the Premises at the end of the Term of this Lease in good order and
condition as of the date of execution hereof, reasonable use and natural wear
and tear excepted.  If Tenant fails to
surrender the Premises to Landlord on the date as required herein, Tenant shall
hold Landlord harmless from all damages, direct and indirect, resulting from
Tenant’s failure to surrender the Premises as herein provided, including but
not limited to claims made by a succeeding tenant resulting from Landlord’s
inability to deliver the Premises, or any part thereof, due to Tenant’s failure
to surrender the Premises.  Should the
Tenant, without the express written consent of the Landlord, continue to hold
and occupy the Premises after the expiration of the Term of this Lease, such
holding over shall be considered a tenancy at sufferance, and not for any other
term whatsoever, which may be terminated by the Landlord at the will of the
Landlord by giving Tenant written notice thereof, and at any time thereafter
the Landlord may re-enter and take possession of the Premises, by force or
otherwise.  Rent during any such holding
over shall be charged and paid by Tenant at the rate of 150% of the monthly
rent reserved herein as the monthly rental due for that month immediately
preceding the holding over.

 

(d)                                 Definition of Lease Year: A “Lease
Year,” as herein referred to, shall consist of that full twelve (12) month
period commencing on the first day of the first full month during which this
Lease is in full force and effect and of each full twelve (12) month period
thereafter.  If the Commencement Date of
this Lease, as provided aforesaid, is a day not the first day of the month, the
first lease year shall consist of the remainder of that first month and the
first full twelve (12) months thereafter.

 

3.                                       RENT.

 

(a)                                  During the term of this Lease,
Tenant shall pay Landlord the Annual Minimum Rent in equal monthly
installments.  To the extent that the
actual rentable floor

 

1

 

area of the Premises is different from the
area shown on the Summary, as certified by Landlord’s architect, the Annual
Minimum Rent shall be adjusted accordingly.

 

(b)                                 All rent shall be payable in
advance, without demand, on the first day of each calendar month during the
term of this Lease, except the first monthly installment shall be paid upon the
signing of this Lease.  The first and
last monthly payments shall be prorated on a per diem basis for any period less
than a full calendar month.

 

(c)                                  All rent and additional rent
shall be payable without any deduction, offset or counterclaim.  All rent and additional rent due hereunder
shall be payable in immediately available funds at Landlord’s address set forth
in the Summary or at such other place as may be designated by Landlord.

 

(d)                                 Tenant shall also pay as rent
any sums which may become due by reason of the failure of Tenant to comply with
any covenants of this Lease and any damages, costs, expenses and reasonable
attorneys’ fees which Landlord may incur by reason of any failure on Tenant’s
part to comply with any covenants of this Lease.

 

(e)                                  Tenant shall pay a late charge
at the rate of five percent (5%) on each dollar of rent, or any other sum
collectible as rent under this Lease, which is not paid within ten (10) days
after the same is due.

 

(f)                                    This Lease shall be deemed and
construed to be a “net-net-net” lease, so that the Annual Minimum Rent provided
for herein shall be an absolute net return to Landlord throughout the term of
this Lease, free of any expense, charge or other deduction whatsoever, with
respect to the Premises and/or the ownership, leasing, operation, maintenance,
repair, rebuilding, use or occupation thereof, or of any portion thereof, or
with respect to any interest of Landlord therein, except as may be expressly
provided for otherwise herein.

 

4.                                       TENANT’S
SHARE OF EXPENSES.

 

(a)                                  In addition to the payment of
Annual Minimum Rent as provided herein, Tenant shall pay as additional rent
hereunder its proportionate share (as described in Paragraph 4(c)) of all
Expenses (as hereinafter defined) incurred during each calendar year of the
term of this Lease, as provided herein. 
For purposes hereof “Expenses” shall mean all real estate taxes, real
estate assessments, insurance premiums (other than Tenant’s liability
insurance), and other costs and expenses of every type and character incurred
by Landlord in operating and maintaining the Building and the Land (or portion
of the Land relating to the Building), including without limitation, the common
areas thereof, all Fixtures and equipment therein or thereon, water and sewer charges
as metered, repair and maintenance of fixtures, equipment and utility systems
relating to the Premises, janitorial services (if any) provided to Tenant,
trash removal costs pertaining to the Building, grass cutting, landscape
maintenance, snow removal and parking area repair, maintenance, repaying,
cleaning and striping, costs of lighting the parking area, and all fees,
charges and expenses imposed or assessed against the Building and its owner(s)
by any applicable owners association. 
Expenses shall be pre-paid on a monthly basis during each calendar year
of the term of this Lease as provided herein. 
Attached hereto as Exhibit “B” and made a part hereof is the
current budget estimate and operating description for

 

2

 

the operation of the Building and the
Land.  All items on the budget shall be
included as Expenses, but other Expenses may be incurred from time to time.

 

(b)                                 For purposes hereof, “Expenses”
shall not include:

 

(i)                                     Costs for which Landlord is
reimbursed or indemnified (either by an insurer, condemnor, tenant, warrantor
or otherwise) or, in the event Landlord fails to properly insure the Building,
then Expenses shall not include expenses for which Landlord would have been
reimbursed if Landlord had adequately insured the Building.

 

(ii)                                  Expenses incurred in leasing or
procuring tenants, including lease commissions, advertising expenses,
management and leasing offices, lease negotiation and review, expenses and
renovating space for tenants, and legal expenses incurred in enforcing the
terms of any tenant leases.

 

(iii)                               Interest or amortization
payments on any mortgages.

 

(iv)                              Costs representing an amount
paid to an affiliate of Landlord which is in excess of the amount which would
have been paid in the absence of such relationship.

 

(v)                                 Costs specifically billed to and
paid by specific tenants, including, without limitation, expenses for work
performed for other tenants in the Building and expenses to be billed to other
tenants for excess utility use or other services that are beyond normal office
use.  There shall be no duplication of
costs or reimbursement.

 

(vi)                              Depreciation and costs incurred
by Landlord for alterations that are considered capital improvements and
replacements under generally accepted accounting principles consistently
applied, except that the annual amortization of these costs shall be included
in the following two instances:

 

(A)                              The
annual amortization over its useful life (not to be less than ten (10) years)
with a reasonable salvage value on a straight line basis of the cost of any
improvement made by Landlord and required by any changes in applicable laws,
rules, or regulations of any governmental authority enacted after the Building
was fully assessed as a completed and occupied unit and the Lease was signed.

 

(B)                                The
annual amortization over its useful life (not to be less than ten (10) years)
with a reasonable salvage value on a straight line basis of the cost of any
equipment or capital improvements made by Landlord after the Building was fully
assessed as a completed and occupied unit and the Lease was signed, as a
labor-saving measure or to accomplish other savings in operating, repairing,
managing, or maintaining of the Building or Land, but only to the extent of the
savings realized.

 

(vii)                           Salaries other than salary for a
building manager and/or maintenance personnel or salary reimbursement to the
Landlord equal to $0.35 per rentable square foot of floor area annually.

 

3

 

(viii)                        Landlord’s personal property and
Landlord’s own occupancy costs, if any, in the Building.

 

(c)                                  The portion of Expenses which
are applicable to  the Premises (the “Premises
Expenses”) shall be determined by multiplying the Expenses by a fraction, the
numerator of which is the rentable floor area of the Premises as shown on the
Summary and the denominator of which is the aggregate number of rentable floor
area in the Building as shown on the Summary. 
In addition, Tenant shall have responsibility for the entire amount of
Expenses relating directly to the cost of operating the Premises, which does
not include any other portion of the Building Common Area, such as janitorial
services or the repair, maintenance, or Tenant required modification of the heating,
ventilating or air-conditioning (“HVAC”) system relating directly to the
Premises.  Tenant shall be responsible
for its proportionate share of the entire amount of janitorial services and
maintenance costs relating directly to the Building Common Area, on an occupied
area basis.

 

(d)                                 Tenant agrees to pay Landlord as
additional rent hereunder all Premises Expenses incurred during the term of
this Lease, including any and all increases in the Premises Expenses.

 

(e)                                  Tenant shall pay Landlord
monthly, in advance, on the first day of each calendar month during the term of
this Lease, and pro rata for the fraction of any month, the sum estimated by
Landlord to be one-twelfth 1/12th) of Tenant’s share of all Premises
Expenses.  If at any time and from time
to time it is determined by Landlord that Tenant’s estimated payments will be
insufficient to pay Tenant’s share of such Premises Expenses, the Landlord
shall have the right to adjust the amount of Tenant’s estimated payments upon
thirty (30) days prior written notice, and Tenant agrees to thereafter pay the
adjusted estimated payment on a monthly basis.

 

(f)                                    Within one hundred twenty (120)
days after the end of each calendar year, Landlord shall deliver to Tenant (i) a
written itemization of Expenses for the prior Lease year and (ii) an
estimate of the then current Lease year’s Expenses and Tenant’s share of the
Premises Expenses.  An adjustment shall
be made between the aggregate total of Tenant’s share of estimated Premises
Expenses actually paid by Tenant during the prior Lease year, and Tenant’s
share of Premises Expenses actually incurred during the prior Lease year, so
that Landlord shall reimburse Tenant for any excess paid by Tenant, and Tenant
shall pay any deficiency to Landlord within ten (10) days of demand.  If Tenant disagrees with the accuracy of the
Expenses as set forth in Landlord’s itemization statement, Tenant shall give
written notice to Landlord to that effect, but shall nevertheless make payment
in accordance with the terms of this Paragraph.

 

(g)                                 Landlord shall permit Tenant to
inspect its records with respect to the Expenses at a mutually convenient time
and place.  Any information obtained by
Tenant pursuant to the provisions of this Paragraph shall be treated as
confidential, except in any litigation between the parties.

 

(h)                                 If due to a change in the laws
presently governing taxation, any franchise tax or tax on income, profit,
rentals or occupancies from or of the Premises shall be

 

4

 

levied or imposed against the Landlord (other
than business privilege tax, which is considered an Expense) in lieu of any tax
or assessment that would otherwise constitute a real estate tax, such
franchise, income, profit tax or tax on rentals shall be deemed to be a real
estate tax and included as part of the Expenses.

 

5.                                       SECURITY
DEPOSIT.  Waived

 

6.                                       USE.
 The Premises shall be used only for the
Permitted Use and shall not be used for any other purpose.  Tenant will not use, and will not permit the
use of, the Premises for any purpose which is unlawful or in violation of any
statute, ordinance, rule, regulation or restriction governing the use of the
Premises.

 

7.                                       SERVICES
AND FACILITIES.  The following
services and facilities shall be supplied by Landlord to Tenant in connection
with Tenant’s use of the Premises, in common (where applicable) with other
tenants of the Building:

 

(a)                                  The cost of the services
described in this Paragraph are to be included as part of the Premises
Expenses, except for electricity and gas, which shall be billed directly to the
Tenant from the utility companies.

 

(b)                                 Landlord shall furnish and
maintain HVAC equipment and facilities for the Premises, in accordance with
Tenant’s layout and specifications, for the comfortable occupancy of the
Premises.  Comfortable occupancy shall
mean temperatures of 68°-74°F throughout the Premises on a year-round
basis, provided Tenant does not exceed an electrical load of six (6) warts
per square foot and an occupancy level of one person for each 150 square
feet.  HVAC shall be under Tenant’s
control with respect to the hours of operation. 
Tenant shall pay directly for the electricity and gas it consumes for
HVAC.

 

(c)                                  Landlord shall maintain and
repair the HVAC, electrical and plumbing systems servicing the Premises, the
ceiling and lighting in the Premises, and the Building, its common areas,
exterior, and all of the Building systems in a first class manner.  The costs of this maintenance shall be included
as part of the Expenses.

 

(d)                                 Landlord shall provide lamping
of all lighting fixtures in the Premises.

 

(e)                                  Landlord shall have no
responsibility or liability to Tenant, nor shall there be any abatement in
rent, for any failure to supply any services or facilities as provided herein
during such period as Landlord deems advisable or necessary in order to make
repairs, alternations or improvements or because of labor disturbances,
strikes, accidents or any other causes beyond Landlord’s control.

 

(f)                                    Landlord shall be responsible,
at Landlord’s sole cost and expense, for structural repairs and replacement of
HVAC units installed in the Building. 
Except as otherwise provided in Paragraph 7(c) hereof, these
repairs shall not be included as part of the Expenses.

 

5

 

8.                                       UTILITIES.
 Landlord shall install meters for
measuring Tenant’s electric and gas usage and all other utility services to the
Premises, and Tenant shall pay the utility company directly for such usage,
which shall be in addition to the Expenses as defined herein.

 

9.                                       CONSTRUCTION
OF BUILDING.

 

(a)                                  Landlord  has 
constructed  the  Building on 
the  Land substantially in
accordance with its plans and specifications for the Building.

 

(b)                                 If the Landlord is delayed at
any time in the progress of constructing the Building or interior improvements
by changes requested by Tenant, by labor disputes, unavailability of materials
or supplies, fire, war or civil disobedience, unusual delay in transportation,
unavoidable casualties, acts of God, or any other cause beyond the Landlord’s
control, the Commencement Date shall be extended for a period of time equal to
the period of such delay.

 

(c)                                  Landlord warrants and represents
to Tenant that no part of the Premises or Building (including the walls, ceilings,
structural steel, flooring and pipes) shall be wrapped, insulated or
fireproofed with any asbestos, asbestos-containing material or other hazardous
material.

 

(d)                                 Landlord agrees to deliver  possession of the Premises to Tenant in
compliance with all zoning and all other municipal, county, state and federal
governmental laws, codes and requirements, including the Americans with
Disabilities Act.

 

10.                                 BUILDING
STANDARD WORK ALLOWANCE.

 

(a)                                  Tenant will be entirely
responsible for the cost of interior improvements to be made to the Premises
that are in addition to those specified as Landlord’s work in Exhibit “E”
attached hereto (the “Additional Improvements”).  All such Additional Improvements shall be
made in accordance with Tenant’s plans and specifications, subject to Landlord’s
review and approval from an engineering standpoint.  All such work shall be performed by Landlord’s
contractors and billed at the rate of the subcontractor’s or supplier’s cost
plus a total of 15% for construction management fee, overhead, and builder’s
profit.

 

(b)                                 Tenant agrees to pay for the
entire amount of the cost of the work performed to complete the Additional
Improvements promptly upon billing therefore.

 

11.                                 SIGNS.
 Landlord agrees to provide or allow
exterior signage as follows: Exterior signage consisting of a building
directional sign on the interior campus road frontage, and a building tenant
directory at the exterior of the building.

 

12.                                 AFFIRMATIVE
COVENANTS OF TENANT.  Tenant
covenants and agrees that it will without demand:

 

(a)                                  Comply with all requirements of
any governmental authorities which apply to Tenant’s use of the Premises.  Promptly comply, or cause compliance, with
all laws and ordinances and the orders, rules, regulations and requirements of
all federal, state,

 

6

 

county and municipal governments and
appropriate departments, commissions, boards and officers thereof, foreseen or
unforeseen, ordinary or extraordinary, and whether or not within the present
contemplation of the parties hereto or involving any change of governmental
policy and irrespective of the cost thereof, which may be applicable to the
Premises, including, without limitation, the fixtures and equipment thereof and
the use or manner of use of the Premises.

 

(b)                                 Comply with the rules and
regulations from time to time made by Landlord for the safety, care, upkeep and
cleanliness of the Premises, the Building and the Land.  Tenant agrees that such rules and
regulations shall, when written notice thereof is given to Tenant, form a part
of this Lease.

 

(c)                                  Keep the Premises and Building
Common Area in good order and condition, excepting only ordinary wear and tear
and damage by accidental fire or other casualty not occurring through the
action or negligence of Tenant or its agents, employees and invitees.

 

(d)                                 Peaceably deliver up and
surrender possession of the Premises to Landlord at the expiration or sooner
termination of this Lease, in the same condition in which Tenant has agreed to
keep the Premises during the term of this Lease, and promptly deliver to
Landlord at its office all keys for the Premises.

 

(e)                                  Give to Landlord prompt written
notice of any accident, fire or damage occurring on or to the Premises within
twenty-four (24) hours of occurrence thereof.

 

(f)                                    Give to Landlord a copy of any
written notice concerning the Premises within twenty-four (24) hours of Tenant’s
receipt thereof.

 

(g)                                 Cause its employees and visitors
to park their cars only in those portions of the parking area as may be
designated for that purpose by Landlord, and not use or permit the use of any
more parking spaces in the parking area than are permitted in Paragraph 1
herein.

 

(h)                                 Promptly upon Landlord’s
request, deliver to Landlord’s lender copies of Tenant’s annual financial
statements for the past two (2) years.

 

13.                                 NEGATIVE
COVENANTS OF TENANT.  Tenant
covenants and agrees that it will do none of the following without the prior
written consent of Landlord:

 

(a)                                  Place or allow to be placed any
sign, projection or device upon the Premises or on the inside or outside of the
Building contrary to the provisions of this Lease.

 

(b)                                 Make any alterations,
improvements or additions to the Premises. 
All alterations, improvements, additions or fixtures, whether installed
before or after the execution of this Lease, shall remain upon the Premises at
the expiration or sooner termination of this Lease and become the property of
Landlord, unless Landlord, prior to the termination of this Lease, shall have
given written notice to Tenant to remove the same, in which event Tenant shall
remove such alterations, improvements and additions or fixtures, and restore
the Premises to the same good order and condition in which they were upon
initial occupancy.

 

7

 

(c)                                  Do or suffer to be done any act
objectionable to any insurance company whereby the insurance or any other
insurance now in force or hereafter placed on the Premises or the Building
shall become void or suspended, or whereby the same shall be rated as a more
hazardous risk than at the date of the signing of this Lease.  In case of a breach of this covenant (in
addition to all other remedies herein given to Landlord) Tenant agrees to pay Landlord
as additional rent any and all increases of premiums on insurance reasonably
carried by Landlord on the Premises or the Building caused in any way by the
use or occupancy of the Premises by the Tenant.

 

14.                                 NO
MECHANICS’ LIENS.

 

(a)                                  Subsequent to the Commencement
Date, any construction work performed by or at the direction of Tenant within
the Premises shall be performed in a good and workmanlike manner, and in
accordance with the requirements of all applicable laws.  Tenant, at its sole cost and expense, shall
apply for and provide with reasonable diligence all necessary permits and
licenses required for any such construction work.  Prior to the commencement of any work or
delivery of any materials to the Premises, Building or Land, Tenant shall cause
each contractor to sign a Waiver of Right to File Mechanics’ Liens and
Mechanics’ Lien Claims, which shall be filed in the Office of the Prothonotary
in the Court of Common Pleas of Berks County, Pennsylvania.  Tenant shall keep the Premises, Building and
Land free from any and all liens arising out of any work performed, materials
furnished or obligations incurred by or for Tenant, and agrees to bond against
or discharge any mechanic’s or materialmen’s lien within ten (10) days
after the filing or recording of any such lien. 
Tenant shall reimburse Landlord for any and all costs and expenses which
may be incurred by Landlord by reason of the filing of any such liens and/or
the removal of same, such reimbursement to be made within ten (10) days
after Landlord has given Tenant a statement setting forth the amount of such
costs and expenses. The failure of Tenant to pay any such amount to Landlord
within such 10-day period shall carry with it the same consequences as
failure to pay any installment of rent hereunder.

 

(b)                                 Prior to the commencement of any
work hereunder, Tenant shall cause each of its contractors to indemnify
Landlord and hold it harmless from and against all personal injury and property
damage liability incurred during the course of its work and to provide a
builder’s “all-risk” insurance policy, which policy will be in force during the
entire term of the work being performed on the Premises.  The insurance shall be in an amount
acceptable to the Landlord and the Tenant, and shall name the Tenant, the
Landlord and the Landlord’s lender, as their respective interests may appear,
as additional insureds.  The insurance
coverage shall provide for at least thirty (30) days’ notice of cancellation,
non-renewal or change.  A certificate of
insurance satisfactory to the Tenant, Landlord and Landlord’s lender, shall be
submitted to the Landlord and the Landlord’s lender prior to the commencement
of any work in the Premises.

 

(c)                                  Within thirty (30) days after
completion of any construction in the Premises, Tenant shall deliver to
Landlord a complete set of “as built” plans of such work, including without
limitation, architectural, mechanical, plumbing and electrical plans, certified
to Landlord by a duly licensed Pennsylvania engineer.

 

8

 

15.                                 LANDLORD’S
RIGHT TO ENTER.  Tenant shall permit
Landlord, Landlord’s agents, servants, employees, and prospective buyers or any
other persons authorized by Landlord, to inspect the Premises at any time, and
to enter the Premises for the purposes of cleaning and, if Landlord shall so
elect, for making reasonable alterations, improvements or repairs to the
Building, or for any reasonable purpose in connection with the operation and
maintenance of the Building, and during the last one (1) year of the term
of this Lease, for the purpose of exhibiting the same for sale or lease.  Landlord or its agents shall have the right
(but shall not be obligated) to enter the Premises in any emergency at any time
without prior notice to Tenant, but Landlord shall notify Tenant by telephone
of such entry either during or immediately following such emergency.

 

16.                                 RELEASE
OF LANDLORD.

 

(a)                                  Unless caused by the negligence
of Landlord, or unless Landlord fails to perform its duties under this lease,
Tenant shall be responsible for and hereby relieves Landlord from any and all
liability by reason of any injury, loss, or damage to any person or property in
the Premises, whether the same be due to fire, breakage, leakage, water flow,
gas, use, misuse, or defects therein, or condition anywhere in the Premises,
failure of water supply or light or power or electricity, wind, lightning,
storm, or any other cause whatsoever, whether the loss, injury or damage be to
the person or property of Tenant or any other persons.

 

(b)                                 Tenant acknowledges that Tenant
has inspected the Premises and that, except for the Landlord’s work set forth
in attached Exhibit “E”, the Premises are being leased “AS IS” as a result
of such inspection and not as a result of any representations made by
Landlord.  Landlord makes no
representation or warranty to Tenant, express or implied, that the Premises are
free from hazardous or toxic substances, materials or wastes which are or
become regulated by any federal, state or local governmental authority or that
the Premises are in compliance with any federal, state or local environmental
laws or regulations.  Tenant acknowledges
that the Premises are in a reasonable and acceptable condition of habitability
for their intended use, and the agreed rental payments are fair and reasonable.

 

OR FOR NEW CONSTRUCTION

 

Landlord makes no warranty to Tenant, express
or implied, that the Premises are free from hazardous or toxic substances,
materials or wastes which are or become regulated by any federal, state or
local governmental authority or that the Premises are in compliance with any
federal, state or local environmental laws or regulations.  However, to the best of its knowledge,
Landlord represents that the Building and/or Premises are free of hazardous
substances.  Upon execution of a
Commencement Agreement, Tenant will acknowledge that the Premises are in a
reasonable and acceptable condition of habitability for their intended use, and
the agreed rental payments ate fair and reasonable.

 

(c)                                  Tenant acknowledges and agrees
that Landlord shall not be liable to Tenant for any loss to Tenant or injury to
its property or to the property of any other person by reason of the
construction of the Building and other improvements located upon the Premises,
the materials used in said construction, the design thereof, the condition
thereof, any defects therein, or any alterations, additions, improvements,
changes or replacements thereto and thereof.

 

9

 

(d)                                 Landlord shall not be liable to
Tenant for any damages, compensation, or claim by reason of the inconvenience
or annoyance arising from the necessity of repairing any portion of the
Premises or the Building or improvements erected thereon, interruption in the
use or occupancy thereof, or the termination of this Lease by reason of the
partial or total destruction of the Premises or the Building and improvements
erected thereon.

 

Without limiting the effect of the release stated in Paragraphs 16(a) through
(d) above, Landlord shall not be deemed in breach of this Lease for any
reason whatsoever unless (i) Tenant shall have delivered to Landlord
written notice setting forth the specific details of all facts, events or
occurrences upon which Tenant relies in asserting such breach, and (ii) Landlord
shall have failed to cure the alleged breach within thirty (30) days of receipt
of such written notice, it being agreed that any breach which is of a type that
reasonably requires longer than thirty (30) days to cure shall be deemed cured
within such 30-day period if Landlord commences to cure such breach
within such 30-day period and diligently proceeds to complete the cure of
such breach thereafter.

 

17.                                 ASSIGNMENT
AND SUBLETTING.

 

(a)                                  Except as otherwise provided in
the immediately following sentence, Tenant shall not assign, mortgage or pledge
this Lease, or sublet the Premises or any part thereof, or permit any other
person to occupy the Premises or any part thereof, without the prior written
consent of Landlord.  Such prior consent
shall not be required if Tenant makes an assignment or sublease to (i) any
corporation or other legal entity which owns directly or indirectly all or
substantially all of the stock of Tenant, (ii) any corporation or other
legal entity of which more than one-half the stock is owned by Tenant, or (iii) any
corporation into which Tenant may be converted or with which Tenant may be
merged, provided that prior to taking possession of any part of the Premises,
such corporation or other legal entity shall sign an assumption agreement in form
satisfactory to Landlord, whereby such corporation or other legal entity agrees
to be bound by the terms and conditions of this Lease.

 

(b)                                 Landlord shall not withhold its
consent to any assignment or subletting to any corporation or other legal entity
having financial strength the same as or greater than the present financial
strength of Tenant.

 

(c)                                  Any assignment or subletting,
even with the consent of Landlord, shall not release Tenant from liability for
payment of rent or any other charges hereunder or from any of the other
obligations under this Lease, and any additional consideration resulting from
such assignment or subletting in excess of the rent specified herein shall be
additional rent hereunder, due and payable to Landlord.  The acceptance of rent from any other person
shall not be deemed to be a waiver of any of the provisions of this Lease or to
be a consent to any assignment or subletting. 
Upon any assignment of this Lease or subletting of the Premises, a
change in any respect of the use of the Premises from the use actually employed
by the original Tenant shall require the prior written consent of Landlord.

 

18.                                 ENVIRONMENTAL
COMPLIANCE.  Tenant shall not cause
or permit any hazardous substance, material or waste (as defined in any applicable
environmental law, rule or regulation) to be brought upon or used in or
about the Premises.  Tenant shall cause
the

 

10

 

Premises to be used at all times in compliance with all applicable
environmental laws, rules and regulations. 
Any failure of Tenant to comply with the covenants contained in this
Paragraph shall be covered by the indemnification provisions of Paragraph 19
herein and shall be subject to all other rights and remedies available to
Landlord.  In no event shall Landlord be
responsible for any damage resulting from any contamination to the Premises or
otherwise, unless caused by Landlord.

 

19.                                 INDEMNIFICATION.
 Tenant agrees to indemnify Landlord
against loss and save Landlord harmless from and against (a) any breach or
default in the performance of any covenant or agreement to be performed by
Tenant under the terms of this Lease, (b) any and all claims, damages, and
liabilities arising from anything done in or about the Premises during the term
of this Lease by Tenant or any of its agents, contractors, servants, employees,
invitees or licensees, (c) any act or negligence of Tenant or any of its
agents, contractors, servants, employees, invitees or licensees, including any
accident, injury or damage whatsoever caused to any person, in or about the
Premises, and (d) all costs, reasonable counsel fees, expenses and
liabilities incurred in connection with any such claim for which
indemnification has been provided under this Paragraph.  In case any action or proceeding shall be
brought against Landlord by reason of any such claim, Tenant, upon notice from
Landlord, shall reimburse Landlord for its counsel fees incurred in defending
such action or proceeding. Tenant shall, within ten (10) days following
notice to it of any claim of a third party relating to Tenant’s use or
occupancy of the Premises or to the performance or non-performance by Tenant of
its obligations under this Lease, give written notice to the Landlord of such
claim.  The provisions of this Paragraph
shall survive the expiration or termination of this Lease.

 

20.                                 LIABILITY
INSURANCE.

 

(a)                                  Tenant, at its own cost and
expense, shall obtain during the term of this Lease, and any renewals or
extensions thereof, commercial general liability insurance in companies
acceptable to Landlord, naming Landlord and Tenant as the insureds, in an
amount not less than One Million Dollars ($1,000,000.00), and providing for at
least thirty (30) days’ prior written notice to Landlord of cancellation, nonrenewal,
or modification.

 

(b)                                 Upon the signing of this Lease,
Tenant shall deliver to Landlord a copy of the policy evidencing such
insurance.  At least thirty (30) days
before the expiration of such policy and any renewal policies, Tenant shall deliver
to Landlord a copy of the renewal policy.

 

21.                                 FIRE
OR OTHER CASUALTY.

 

(a)                                  If during the term of this Lease
or any renewal or extension thereof, the Premises or the Building is totally
destroyed or is so damaged by fire or other casualty not occurring through the
fault or negligence of Tenant or those employed by or acting for Tenant to the
extent that the same cannot be repaired or restored within one hundred eighty
(180) days from the date of the happening of such damage, or if such damage or
casualty is not included in the risks covered by Landlord’s fire insurance,
then Landlord shall have the option to terminate this Lease upon written notice
to Tenant, whereupon this Lease shall absolutely cease and terminate and the
rent shall abate for the balance of the term.  In such case, Tenant shall pay

 

11

 

the rent apportioned to the date of damage
and Landlord may enter upon and repossess the Premises without further notice.

 

(b)                                 If Landlord chooses to restore
the Premises, Landlord shall repair whatever portion of the Premises that may
have been damaged by fire or other casualty insured as aforesaid, and the rent
shall be apportioned during the time Landlord is in possession, taking into
account the proportion of the Premises rendered untenantable and the duration
of Landlord’s possession.

 

(c)                                  If said damage by fire or other
casualty was caused by the action or negligence of Tenant or its agents,
employees or invitees, Tenant shall not be entitled to any abatement or
apportionment of the rent.

 

(d)                                 Tenant, at its own cost and
expense, shall obtain during the term of this Lease, and any renewals or
extensions thereof, content insurance for the full replacement value of its
personalty used in Tenant’s daily operations of the Permitted Use.

 

22.                                 WAIVER
OF SUBROGATION.  Landlord and Tenant
shall each endeavor to procure an appropriate clause in, or endorsement on, any
fire and extended coverage insurance covering the Premises and Building and
personal property, fixtures, and equipment located thereon or therein, pursuant
to which the insurance companies waive subrogation or consent to a waiver of
right of recovery.  Each party hereto
hereby agrees that it will not make any claim against or seek to recover from
the other for any loss or damage to its property or the property of others
resulting from fire or other hazards covered by such fire and extended coverage
insurance except as expressly provided in this Lease; provided, however, that
the release, discharge, exoneration, and covenant not to sue herein contained
shall be limited by the terms and provisions of the waiver of subrogation
clauses and/or endorsements consenting to a waiver of right of recovery and
shall be coextensive therewith.

 

23.                                 NO
IMPLIED EVICTION.  Notwithstanding
any inference to the contrary herein contained, it is understood that the
exercise by Landlord of any of its rights hereunder, including (without
limitation) cessation of services as described in Paragraph 27(c)(ii), shall
never be deemed an eviction (constructive or otherwise) of Tenant, or a
disturbance of its use of the Premises, and shall in no event render Landlord
liable to Tenant or any other person, so long as such exercise of rights is in
accordance with the foregoing terms and conditions.

 

24.                                 CONDEMNATION.
 If the whole of the Premises shall be
acquired or condemned by eminent domain, then the term of this Lease shall
cease and terminate as of the date on which possession of the Premises is
required to be surrendered to the condemning authority.  All rent shall be paid up to the date of
termination.  A partial condemnation
shall not be cause for termination of this Lease.  Tenant hereby expressly waives any right or
claim to any part of any condemnation award or damages and hereby assigns to
Landlord any such right or claim to which Tenant might become entitled.

 

25.                                 LANDLORD’S
RIGHT TO PAY TENANT EXPENSES.  If
Tenant shall at any time fail to pay any utility or other charges or to take
out, pay for, maintain or deliver any of the insurance policies provided for
herein, or shall fail to make any other payment or perform

 

12

 

any other act which Tenant is obligated to make or perform under this
Lease, then without waiving, or releasing Tenant from, any obligations of
Tenant contained in this Lease, Landlord may, but shall not be obligated to,
pay any such charge, effect any such insurance coverage and pay premiums
therefor, and may make any other payment or perform any other act which Tenant
is obligated to perform under this Lease, in such manner and to such extent as
shall be necessary.  In exercising any
such rights, Landlord may pay any necessary and incidental costs and expenses,
employ counsel and incur and pay reasonable attorneys’ fees.  All sums so paid by Landlord and all
necessary and incidental costs and expenses in connection with the performance
of any such act by Landlord, together with interest thereon at the rate of
twelve percent (12%) per annum from the date of the making of such expenditure
by Landlord, shall be deemed additional rent hereunder and, except as otherwise
expressly provided in this Lease, shall be payable to Landlord after ten (10) days’
written notice thereof, Tenant covenants to pay any such sum or sums with interest
as aforesaid and Landlord shall have (in addition to any other right or remedy
of the Landlord) the same rights and remedies in the event of nonpayment
thereof by Tenant as in the case of default by Tenant in the payment of rent.

 

26.                                 EVENTS
OF DEFAULT.  The occurrence of each
of the following events shall be an “Event of Default” hereunder:

 

(a)                                  Tenant does not pay in full when
due any installment of rent, additional rent or any other charges, expenses or
costs herein agreed to be paid by Tenant for a period of five (5) days
after receipt of notice that same has not been paid when due; provided that in
the event Tenant shall have received three (3) such written notices within
any period of twelve (12) consecutive months, then during the remainder of the
twelve (12) consecutive month period after Tenant shall have received its first
written notice from Landlord, Tenant shall thereafter be in default hereunder
whenever Tenant shall fail to pay any sum owing under this Lease when due,
without the necessity of sending any written notice of nonpayment;

 

(b)                                 Tenant violates or fails to
perform or comply with any nonmonetary term, covenant, condition, or agreement
herein contained and fails to cure such default within thirty (30) days of
notice thereof from Landlord, provided, however, if such default cannot be
cured with reasonable diligence within such thirty (30) day period, the time
for cure of same shall be deemed extended for such additional time as is
reasonably necessary to cure same with due diligence for an additional period
not to exceed thirty (30) days;

 

(c)                                  Tenant vacates the Premises;

 

(d)                                 Tenant shall file a voluntary
petition in bankruptcy or shall be adjudicated a bankrupt or insolvent or shall
file any petition or answer seeking any reorganization, arrangement,
recapitalization, readjustment, liquidation or dissolution or similar relief
under any present or future bankruptcy laws of the United States or any other
country or political subdivision thereof, or shall seek or consent to or acquiesce
in the appointment of any trustee, receiver, or liquidator of all or any
substantial part of Tenant’s properties, or shall make an assignment for the
benefit of creditors, or shall admit in writing Tenant’s inability to pay
Tenant’s debts generally as they become due; or

 

13

 

(e)                                  If an involuntary petition in
bankruptcy shall be filed against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future bankruptcy laws of the United States or any
other state or political subdivision thereof, and if within sixty (60) days
after the commencement of any such proceeding against Tenant, such proceedings
shall not have been dismissed, or if, within sixty (60) days after the
appointment, without the consent or acquiescence of Tenant, or any trustee,
receiver or liquidator of the Tenant or of all or any substantial part of
Tenant’s property, such appointment shall not have been vacated or stayed on
appeal or otherwise, or if, within sixty (60) days after the expiration of any
such stay, such appointment shall not have been vacated.

 

27.                                 LANDLORD’S
REMEDIES.

 

(a)                                  Upon the occurrence of any Event
of Default, Landlord may, at its option and without any further notice to
Tenant, terminate this Lease, whereupon the estate hereby vested in Tenant
shall cease and any and all other right, title and interest of Tenant hereunder
shall likewise cease without notice or lapse of time, as fully and with like
effect as if the entire term of this Lease had elapsed, but Tenant shall
continue to be liable to Landlord as hereinafter provided.

 

(b)                                 Upon the occurrence of any Event
of Default, or at any time thereafter, Landlord, in addition to and without prejudice
to any other rights and remedies Landlord shall have at low or in equity, shall
have the right, without terminating this Lease, to change the locks on the
doors to the Premises and exclude Tenant therefrom until all of such defaults
shall have been completely cured.

 

(c)                                  Upon the occurrence of any Event
of Default, or at any time thereafter, Landlord, in addition to and without
prejudice to any other rights and remedies Landlord shall have at law or in
equity, shall have the right to re-enter the Premises, either by force or
otherwise, and recover possession thereof and dispossess any or all occupants
of the Premises in the manner prescribed by the statute relating to summary
proceedings, or similar statutes, but Tenant in such case shall remain liable
to Landlord as hereinafter provided.

 

(d)                                 In case of any Event of Default,
re-entry, expiration and/or dispossession by summary proceedings, whether or
not this Lease shall have been terminated as aforesaid:

 

(i)                                     All delinquent rent, additional
rent and all other sums required to be paid by Tenant hereunder shall become
payable thereupon and shall be paid up to the time of such reentry, expiration
and/or dispossession, and all accelerated payments due under subparagraphs 10(a) and
(b) hereof shall become immediately due and payable;

 

(ii)                                  Landlord shall have the right,
in its sole discretion, to terminate immediately and without any notice to
Tenant, all services which are to be supplied by Landlord pursuant to the terms
of this Lease, including without limitation, all janitor service and the
maintenance and repair responsibilities described in Paragraph 7 hereof;

 

14

 

(iii)                               Landlord shall have the right,
but not the obligation, to relet the Premises or any part or parts thereof for
the account of Tenant, either in the name of Landlord or otherwise, for a term
or terms which may, at Landlord’s option, be less than or exceed the period
which would otherwise have constituted the balance of the term of this Lease
and on such conditions (which may include concessions or free rent) as
Landlord, in its reasonable discretion, may determine and may collect and
receive the rents therefor; Landlord shall in no way be responsible or liable
for any failure to relet the Premises or any part thereof, or for any failure
to collect any rent due upon any such reletting; and

 

(iv)                              Tenant shall reimburse Landlord
for any expenses that Landlord may incur in connection with recovering
possession of the Premises and any reletting thereof, such as court costs,
attorneys’ fees, brokerage fees, and the costs of advertising and the costs of
any alterations, repairs, replacements and/or decorations in or to the Premises
as Landlord, in Landlord’s sole judgment, considers advisable and necessary for
the purpose of such reletting of the Premises; and the making of such
alterations, repairs, replacements and/or decorations shall not operate or be
construed to release Tenant from liability hereunder as aforesaid.

 

(e)                                  If this Lease is terminated by
Landlord pursuant to Paragraph 27(a) hereof, Tenant nevertheless shall
remain liable for all rent and damages which may be due or sustained prior to
such termination, together with additional damages (the “Liquidated Damages”)
which, at Landlord’s option, shall be either:

 

(i)                                     an amount equal to (A) the
rent and all other sums required to be paid by Tenant hereunder during the
period which would otherwise have constituted the balance of the term of this
Lease, and all damages, costs, fees and expenses incurred by Landlord as a
result of such Event of Default, including without limitation, reasonable
attorneys’ fees, costs and expenses incurred by Landlord in pursuit of its
remedies hereunder, less (B) the rent, if any, received by Landlord,
pursuant to any reletting of the Premises during the period which would
otherwise have constituted the balance of the term of this Lease; such amount
calculated pursuant to this Paragraph 27(d)(i) shall be payable in monthly
installments, in advance, on the first day of each calendar month following the
occurrence of such Event of Default and continuing during the period which
would otherwise have constituted the balance of the term of this Lease; or

 

(ii)                                  an amount equal to the Annual
Minimum Rent, Premises Expenses, and all other additional rent which was due
and payable for the two (2) year period immediately proceeding Tenant’s
default.

 

(f)                                    In the event Tenant commits a
default, or suffers a default to exist, within ten (10) days after written
demand, Tenant shall reimburse Landlord for Landlord’s attorneys’ fees incurred
by Landlord in the enforcement of this Lease, regardless whether legal
proceedings are or are not instituted, which fees shall include any actions
taken in connection with any bankruptcy proceeding filed by or against Tenant.

 

(g)                                 Tenant shall pay Landlord
interest at twelve percent (12%) per annum on all failures to pay timely the
rent, additional rent or any other sums required to be paid

 

15

 

by Tenant hereunder from the date such
payment is due until the date such payment is made to Landlord.  Any judgment obtained by the Landlord as a
result of the exercise of its rights and remedies under this Lease shall bear
interest at the rate of twelve percent (12%) per annum from the date of entry
of such judgment through the date such judgment is paid in full.

 

(h)                                 Upon any termination of this
Lease, whether by lapse of time, by the exercise of any option by Landlord to
terminate the same, or in any other manner whatsoever, or upon any termination
of Tenant’s right to possession without termination of this Lease, Tenant shall
immediately surrender possession of the Premises to Landlord and immediately
vacate the same, and remove all effects therefrom, except such as may not be
removed under other provisions of this Lease. 
If Tenant fails to surrender and vacate as aforesaid, Landlord may
forthwith re-enter the Premises, with or without process of law, and repossess
itself thereof as in its former estate and expel and remove Tenant and any
other persons and property therefrom, using such force as may be necessary,
without being deemed guilty of trespass, eviction, conversion or forcible entry
and without thereby waiving Landlord’s rights to rent or any other rights given
Landlord under this Lease or at law or in equity.  If Tenant shall not remove all effects from
the Premises as hereinabove provided, Landlord may, at its option, remove any
or all of said effects in any manner it shall choose and either dispose of the
same at Landlord’s sole discretion, or store the same without liability for
loss thereof, and Tenant shall pay Landlord, on demand, any and all expenses
incurred in such removal and also storage on said effects, if applicable, for
any length of time during which the same shall be in Landlord’s possession or
in storage.

 

28.                                 CONFESSION
OF JUDGMENT FOR DAMAGES.  THIS
PARAGRAPH SETS FORTH A WARRANT OF ATTORNEY FOR AN ATTORNEY TO CONFESS JUDGMENT
AGAINST THE TENANT. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT
AGAINST THE TENANT, TENANT HEREBY KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY,
AND, ON THE ADVICE OF SEPARATE COUNSEL OF TENANT, UNCONDITIONALLY WAIVES ANY
AND ALL RIGHTS TENANT HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY
FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES
AND THE COMMONWEALTH OF PENNSYLVANIA.

 

TENANT HEREBY AUTHORIZES ANY ATTORNEY OF ANY COURT OF RECORD, UPON THE
OCCURRENCE OF ANY EVENT OF DEFAULT, TO APPEAR IMMEDIATELY THEREAFTER AS ATTORNEY
FOR THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT IN ANY COMPETENT COURT
AND TO CONFESS JUDGMENT OR JUDGMENTS AND SUCCESSIVE JUDGMENTS BY CONFESSION
(WITHOUT STAY OF EXECUTION OR APPEAL) IN FAVOR OF THE LANDLORD AND ALL PERSONS
CLAIMING UNDER THE LANDLORD AND AGAINST THE TENANT AND ALL PERSONS CLAIMING
UNDER THE TENANT FOR ALL AMOUNTS THEN DUE UNDER THIS LEASE, TOGETHER WITH AN
ATTORNEY’S COLLECTION COMMISSION EQUAL TO TEN PERCENT (10%) OF THE TOTAL OF
SUCH AMOUNTS, WITHOUT ANY LIABILITY ON THE PART OF THE SAID ATTORNEY, FOR
WHICH THIS SHALL BE A SUFFICIENT WARRANT, AND THEREUPON A WRIT OF EXECUTION
WITH CLAUSE FOR COSTS, OR OTHER PROCESS FOR SIMILAR PURPOSES, MAY ISSUE
FORTHWITH WITHOUT ANY PRIOR WRIT OR PROCEEDING

 

16

 

WHATSOEVER, AND THE TENANT AND ALL PERSONS
CLAIMING UNDER THE TENANT HEREBY WAIVE ALL EXEMPTION LAWS AND INQUISITION ON
REAL PROPERTY AND RELEASE TO THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE
LANDLORD ALL ERRORS AND DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT,
OR IN CAUSING SUCH WRIT OF EXECUTION OR OTHER PROCESS TO BE ISSUED, OR IN ANY
PROCEEDING THEREON OR CONCERNING THE SAME, AND HEREBY AGREE THAT NO WRIT OF
ERROR OR OBJECTION OR EXCEPTION SHALL BE MADE OR TAKEN THERETO, IF A COPY OF
THIS LEASE, VERIFIED BY AFFIDAVIT, IS FILED IN SAID ACTION, IT SHALL NOT BE
NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY LAW OR RULE OF
COURT TO THE CONTRARY NOTWITHSTANDING. 
THIS WARRANT OF ATTORNEY SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF,
AND SHALL REMAIN IN FORCE AND SHALL BE OPERATIVE FOR SUCCESSIVE EXERCISES
THEREOF, FROM TIME TO TIME AS THE NEED MAY ARISE, NOT ONLY WITH RESPECT TO
THE TENANT BUT ALSO WITH RESPECT TO ALL PERSONS CLAIMING UNDER THE TENANT.

 

29.                                 CONFESSION
OF JUDGMENT IN EJECTMENT.  THIS
PARAGRAPH SETS FORTH A WARRANT OF ATTORNEY FOR AN ATTORNEY TO CONFESS JUDGMENT
AGAINST THE TENANT, IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT
AGAINST THE TENANT, TENANT HEREBY KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY,
AND, ON THE ADVICE OF SEPARATE COUNSEL OF TENANT, UNCONDITIONALLY WAIVES ANY
AND ALL RIGHTS TENANT HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY
FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES
AND THE COMMONWEALTH OF PENNSYLVANIA.

 

TENANT HEREBY AUTHORIZES THE PROTHONOTARY, CLERK OF COURT OR ANY
ATTORNEY OF ANY COURT OF RECORD, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR
IN THE EVENT THAT TENANT FAILS TO SURRENDER POSSESSION OF ALL OR ANY PART OF
THE PREMISES AS REQUIRED HEREIN, TO APPEAR FOR THE TENANT AND ALL PERSONS
CLAIMING UNDER THE TENANT IN ANY COMPETENT COURT AND CONFESS JUDGMENT FN
EJECTMENT (WITHOUT STAY OF EXECUTION OR APPEAL) IN FAVOR OF THE LANDLORD AND
ALL PERSONS CLAIMING UNDER THE LANDLORD AND AGAINST THE TENANT AND ALL PERSONS
CLAIMING UNDER THE TENANT FOR POSSESSION OF THE PREMISES, WITHOUT ANY LIABILITY
ON THE PART OF THE SAID ATTORNEY, FOR WHICH THIS SHALL BE A SUFFICIENT
WARRANT, AND THEREUPON A WRIT OF POSSESSION WITH CLAUSE FOR COSTS, OR OTHER
PROCESS FOR SIMILAR PURPOSES, MAY ISSUE FORTHWITH WITHOUT ANY PRIOR WRIT
OR PROCEEDING WHATSOEVER, AND THE TENANT AND ALL PERSONS CLAIMING UNDER THE
TENANT HEREBY RELEASE TO THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE
LANDLORD ALL ERRORS AND DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT,
OR IN CAUSING SUCH WRIT OF POSSESSION OR OTHER PROCESS TO BE ISSUED, OR IN ANY
PROCEEDING THEREON OR CONCERNING THE SAME, AND HEREBY AGREE THAT NO WRIT OF
ERROR OR OBJECTION OR EXCEPTION SHALL BE MADE OR TAKEN THERETO. IF A COPY OF

 

17

 

THIS LEASE, VERIFIED BY AFFIDAVIT, IS FILED
IN SAID ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF
ATTORNEY, ANY LAW OR RULE OF COURT TO THE CONTRARY NOTWITHSTANDING. THIS
WARRANT OF ATTORNEY SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF, AND SHALL
REMAIN IN FORCE AND SHALL BE OPERATIVE FOR SUCCESSIVE EXERCISES THEREOF, FROM
TIME TO TIME AS THE NEED MAY ARISE, NOT ONLY WITH RESPECT TO THE TENANT BUT
ALSO WITH RESPECT TO ALL PERSONS CLAIMING UNDER THE TENANT.

 

30.                                 RIGHT
OF ASSIGNEE OF LANDLORD.  The right
to enforce all of the provisions of this Lease may be exercised by any assignee
of the Landlord’s right, title and interest in this Lease in its, his, her or
their own name, and Tenant hereby expressly waives the requirements of any and
all laws regulating the manner and/or form in which such assignments shall be
executed and witnessed.

 

31.                                 REMEDIES
CUMULATIVE.  All remedies given to
Landlord herein and all rights and remedies given to Landlord by law and equity
shall be cumulative and concurrent.  No
termination of this Lease, or taking or recovering of possession of the
Premises, or entry of any judgment either for possession or for any money claimed
to be due Landlord, shall deprive Landlord of any other action against Tenant
for possession, or for any money due Landlord hereunder, or for damages
hereunder.  The exercise of or failure to
exercise any remedy shall not bar or delay the exercise of any other remedy.

 

32.                                 TENANT’S
WAIVERS.

 

(a)                                  If proceedings shall be
commenced by Landlord to recover possession of the Premises, either at the end
of the term hereof or by reason of an Event of Default or otherwise, Tenant
expressly waives all rights to notice in excess of five (5) days required
by any Act of Assembly, including the Act of April 6, 1951, P.L. 69, Art.
V, Sec. 501, as amended, and agrees that in either or any such case five (5) days’
notice shall be sufficient.  Without
limitation of or by the foregoing, Tenant hereby waives any and all demands,
notices of intention, and notice of action or proceedings which may be required
by law to be given or taken prior to any entry or re-entry by summary
proceedings, ejectment or otherwise, by Landlord, except as hereinbefore
expressly provided with respect to five (5) days’ notice.

 

(b)                                 Any notice to quit required by
law previous to proceedings to recover possession of the Premises or any notice
of demand for rent on the day when such is due and the benefit of all laws
granting stay of execution, appeal, inquisition and exemption are hereby waived
by Tenant; provided, however, that nothing in this paragraph shall be construed
as a waiver of any notice specifically mentioned or required by any other part of
this Lease.

 

In the event of a termination of this Lease prior to the date of
expiration herein originally fixed, Tenant hereby waives all right to recover
or regain possession of the Premises, to save forfeiture by payment of rent due
or by other performance of the conditions, terms or provisions hereof, and,
without limitation of or by the foregoing, Tenant waives all right to reinstate
or redeem this Lease notwithstanding any provisions of any statute, law or
decision now or hereafter in force or effect and Tenant waives all right to any
second or further trial in

 

18

 

summary proceedings, ejectment or in any
other action provided by any statute or decision now or hereafter in force or
effect.

 

33.                                 ATTORNMENT.
In the event of the sale or assignment of Landlord’s interest in the Premises
or in the event of a foreclosure under any mortgage made by Landlord covering
the Premises, Tenant shall attorn to the purchaser and recognize such purchaser
as Landlord under this Lease.

 

34.                                 SUBORDINATION.
 At the option of Landlord or Landlord’s
lender, or both of them, this Lease and the Tenant’s interest hereunder shall
be subject and subordinate at all times to any mortgage or mortgages, deed or
deeds of trust, or such other security instrument or instruments, including all
renewals, extensions, consolidations, assignments and refinances of the same,
as well as all advances made upon the security thereof, which now or hereafter
become liens upon the Landlord’s fee and/or leasehold interest in the Premises,
and/or any and all of the buildings now or hereafter erected or to be erected
and/or any and all of the Premises, provided, however, that in each such case,
the holder of such other security, the trustee of such deed of trust or holder
of such other security instrument shall agree that this Lease shall not be
divested or in any way affected by foreclosure or other default proceedings
under said mortgage, deed of trust, or other instrument or other obligations
secured thereby, so long as Tenant shall not be in default under the terms of
this Lease; and shall agree that this Lease shall remain in full force and
effect notwithstanding any such default proceedings.

 

Notwithstanding anything herein to the contrary, any holder of any
mortgage may at any time subordinate its mortgage to this Lease, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution and delivery and
in that even such mortgage shall have the same rights with respect to this
Lease as though this Lease had been executed and delivered prior to the
execution and delivery of the mortgage.

 

35.                                 EXECUTION
OF DOCUMENTS.  The above
subordination shall be self-executing, but Tenant agrees upon demand to execute
such other document or documents as may be required by a mortgagee, trustee
under any deed of trust, or holder of a similar security interest, or any party
to the types of documents enumerated herein for the purpose of subordinating
this Lease in accordance with the foregoing. 
Upon the expiration often (10) days after a formal written notice,
Tenant shall be deemed to have appointed Landlord and Landlord may execute and
deliver the required documents for and on behalf of Tenant.

 

36.                                 ESTOPPEL
AGREEMENTS.  Tenant shall execute an
estoppel agreement in favor of any mortgagee or purchaser of Landlord’s
interest herein, within ten (10) days after requested to do so by Landlord
or any such mortgagee or purchaser.  Such
estoppel agreement shall be in the form requested by Landlord or such mortgagee
or purchaser.

 

37.                                 CONDOMINIUM
CONVERSION.  Tenant acknowledges that
Landlord has informed Tenant that Landlord, at any time in Landlord’s sole
discretion, may by recorded declaration, convert the fee ownership of the
Building and the Land to a condominium in accordance with the provisions of the
Pennsylvania Uniform Condominium Act (the “Act”).  In such event, the common areas of the
Building and the Land shall become Common Elements

 

19

 

and/or Limited Common Elements, as defined in the Act and as designated
by Landlord, and the Common Expenses pertaining thereto (as defined in the
Act), as applicable, shall be included as part of the Premises Expenses, Tenant
agrees upon demand to execute such document or documents as may be required by
Landlord in connection with any such condominium conversion.

 

38.                                 NOTICES.
 All notices required to be given by
either party to the other shall be in writing. 
All such notices shall be deemed to have been given upon delivery in
person, or upon depositing in the United States mail, by certified mail, return
receipt requested, postage prepaid, or by delivery by telefax, facsimile or
telegraph, or by Federal Express or other nationally recognized overnight
delivery service, addressed to the parties at the addresses shown in the
summary pages at the front of this Lease or to such other address which
either party may hereafter designate in writing by notice given in a like
manner.

 

39.                                 BINDING
EFFECT.  All rights and liabilities
herein given to, or imposed upon the respective parties hereto, shall extend to
and bind the several and respective heirs, personal representatives, successors
and permitted assigns of said parties.

 

40.                                 SURVIVAL
OF VALID TERMS.  If any provision of
this Lease shall be invalid or unenforceable, the remainder of the provisions
of this Lease shall not be affected thereby, and each and every provision of
this Lease shall be enforceable to the fullest extent permitted by law.

 

41.                                 ENTIRE
AGREEMENT.  This Lease and any
exhibit, rider or addendum that may be attached hereto set forth all the
promises, agreements, conditions and understandings between Landlord and Tenant
relative to the Premises, and there are no promises, agreements, conditions or
understandings, either oral or written, between them other than are herein set
forth.  Except as herein otherwise
provided, no subsequent alteration, amendment, change or addition to this Lease
shall be binding upon Landlord or Tenant unless reduced to writing and signed
by them.

 

42.                                 PROHIBITION
AGAINST RECORDING.  This Lease shall
not be recorded and any attempted recording of this Lease shall constitute an
Event of Default hereunder.

 

43.                                 INTERPRETATION.
 As used in this Lease and when required
by context, each number (singular or plural) shall include all numbers, and
each gender shall include all genders. 
Time is and shall be of essence of each term and provision of this
Lease.  The term “person” as used herein
means person, firm, association or corporation, as the case may be.  If Tenant is more than one person, all
agreements, conditions, obligations, covenants, warrants of attorney, waivers
and releases made by Tenant shall be joint and several, and shall bind and
affect all persons who are defined as “Tenant” herein.

 

44.                                 LIABILITY
OF LANDLORD.  The term “Landlord” as
used herein means the fee owner of the Premises from time to time.  In the event of the voluntary or involuntary
transfer of such ownership to a successor-in-interest of the Landlord, the
Landlord shall be automatically discharged and relieved of and from all liability
and obligations hereunder

 

20

 

which shall thereafter accrue, and Tenant shall look solely to such
successor-in-interest for the performance and obligations of the Landlord
hereunder which shall thereafter accrue. 
The liability of Landlord and its successors-in-interest under or with respect
to this Lease shall be strictly limited to and enforceable solely out of its or
their interest in the Premises and shall not be enforceable out of any other
assets.

 

45.                                 CAPTIONS
AND HEADINGS.  The captions and
headings of the paragraphs contained herein are for convenience of reference only
and in no way define, limit, describe, modify or amplify the interpretation,
construction or meaning of any provision of or the scope or intent of this
Lease nor in any way affect this Lease. 
All Exhibits are an integral part of this Lease and are attached hereto.

 

46.                                 NO
BROKERAGE COMMISSION.  Landlord and
Tenant represent and warrant that no brokerage commission or similar
compensation is due to any party by reason of this Lease.  Each party hereby agrees to indemnify and
hold the other party harmless from and against any and all claims, costs,
damages, expenses, judgments or liability resulting from any claim for
brokerage commissions or similar compensation made by any party in connection
with this Lease.

 

47.                                 QUIET
ENJOYMENT.  Upon Tenant’s compliance
with the provisions of this Lease, including the payment of all rent hereunder,
Tenant shall peaceably hold and enjoy the Premises during the term hereof
without hinderance or interruption by Landlord or any person claiming under
Landlord.

 

48.                                 WAIVER
OF TRIAL BY JURY.  Each party to this
Lease agrees that any suit, action, or proceeding, whether claim or
counterclaim, brought or instituted by any party hereto or any successor or
assign of any party hereto or with respect to this Lease or which in any way
relates, directly or indirectly, to the Premises or any event, transaction, or
occurrence arising out of or in any way in connection with the Premises, or the
dealings of the parties with respect thereto, shall be tried only by a court
and not by a jury.  EACH PARTY HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING.  TENANT ACKNOWLEDGES AND
AGREES THAT THIS PARAGRAPH 48 IS A SPECIFIC AND MATERIAL ASPECT TO THIS LEASE
BETWEEN THE PARTIES AND THAT LANDLORD WOULD NOT LEASE THE PREMISES TO THE
TENANT IF THIS WAIVER OF JURY TRIAL SECTION WERE NOT A PART OF THIS
LEASE.

 

49.                                 OWNERS’
ASSOCIATION.  This Lease and all
terms and provisions hereof shall be under and subject, in all respects, to: (a) the
Declaration of Covenants, Easements, Conditions and Restrictions for The
Corporate Campus Owner’s Association, be, which is recorded in the Recorder of
Deeds Office of Berks County, Pennsylvania, and (b) the Articles of
Incorporation and the Bylaws of The Corporate Campus Owners Association, Inc ,
copies of which are available upon request Tenant covenants and agrees to
comply with the terms of such written instruments insofar as they pertain to
any tenant of the Building and such tenant’s agents, servants, employees,
invitees, and business visitors.

 

21

 

TENANT ACKNOWLEDGES THAT THIS LEASE CONTAINS,
AT PARAGRAPHS 28 AND 29 HEREOF, PROVISIONS FOR THE CONFESSION OF JUDGMENT
AGAINST TENANT FOR MONEY AND FOR POSSESSION OF REAL PROPERTY AND HAS REVIEWED
AND UNDERSTANDS THE CONTENTS THEREOF.

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
to the terms of this Lease, have caused this Lease to be duly executed this 22nd
day of August, 2003.

 

THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE
PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT
SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL
OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR
RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LESSOR.

 

	
   

  	
   

  	
  THE CORPORATE CAMPUS AT SPRING RIDGE 1250,
  LIMITED PARTNERSHIP, a Pennsylvania limited partnership, by its General
  Partner, THE CORPORATE CAMPUS AT SPRING RIDGE 1250, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Stephen J. Najarian

  
	
   

  	
   

  	
   

  	
  Stephen J.
  Najarian, President

  
	
   

  	
   

  	
   

  	
  (“Landlord”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Susan M. Montgomery

  	
   

  	
  By:

  	
  /s/ Robert S. Ippolito

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Susan M. Montgomery

  	
   

  	
  Name:

  	
  Robert S. Ippolito

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Office Manager/Assistant

  	
   

  	
  Title:

  	
  Vice President/Secretary, Treasurer

  
	
   

  	
  to the Chairman

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
  August 22, 2003

  
	
   

  	
   

  	
   

  	
   

  	
  (“Tenant”)

  
									

 

22

 

CONSENT

 

INTENDING to be legally bound hereby, The Corporate Campus Property
Owners’ Association hereby joins in and consents to the above Lease insofar as
any of the above provisions concern the parking area and any other common areas
maintained by it.

 

	
   

  	
   

  	
  THE CORPORATE CAMPUS PROPERTY

  OWNERS’ ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen J. Najarian

  	
   

  

 

 

Exhibits

 

“A”  - 
Leased Premises

 

“B”  - 
Expense Budget

 

“C”  - 
Building Location

 

“D”  -  Left
Blank Intentionally

 

“E”  - 
Tenant Plans and Specifications

 

“F”  - 
Building Common Area

 

“G”  -  Left
Blank Intentionally

 

23Exhibit 10.14

 

AGREEMENT

 

between

 

SPORTS ARENA
EMPLOYEES’

 

LOCAL 137,
AFL-CIO

 

Affiliated
with Laborers’ International Union

of North America

 

and

 

PENN NATIONAL
TURF CLUB, INC.

 

 

October 1, 2001 to September 30, 2005

 

 

Table of Contents

 

 

	
  ARTICLE 1

  	
  UNION RECOGNITION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  UNION SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  NOTIFICATION TO THE UNION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  SENIORITY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  MANAGEMENT RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  WORK BREAKS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  CHECK-OFF

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  WAGES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  DEATH IN FAMILY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  VALIDITY OF CONTRACT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  STRIKES AND LOCKOUTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  UNION VISITATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  ILLNESS AND INJURY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  PREMIUM PAY AND HOLIDAYS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  SETTLEMENT OF GRIEVANCES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
  NOTICE OF DISCHARGE OR SUSPENSION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
  TICKET ERRORS, OVERAGES AND SHORTAGES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
  RULES, REGULATIONS AND PERFORMANCE
  STANDARDS AND INCENTIVE STANDARDS OR PLANS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  	
  VACATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20

  	
  LEAVES OF ABSENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21

  	
  WORK NOT AVAILABLE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22

  	
  UNIFORMS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23

  	
  MEDICAL BENEFITS

  	
   

  

 

 

	
  ARTICLE 24

  	
  PAID SICK LEAVE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25

  	
  SLOT MACHINE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27

  	
  DURATION OF AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit “A”

  	
   

  	
   

  

 

 

This agreement made by and between
Mountainview Thoroughbred Racing Association and Penn National Turf Club, Inc.,
(hereinafter referred to as the “Employer”) and Sports Arena Employees’ Union,
Local 137, affiliated with the Laborers’ International Union of North America,
AFL-CIO, (hereinafter referred to as the “Union”).

 

ARTICLE 1

UNION RECOGNITION

 

1.1                               The Employer hereby recognizes
the Union as the sole and exclusive collective bargaining agent for all
tellers, admission employees and program sellers at the employer’s non-primary
location, and excluding all other employees. 
Guards, maintenance, audio video, customer service, money room, clerical
and supervisory employees shall not be bargaining unit employees as defined in
the National Labor Relations Act.  In the
event the business activity of the Employer warrants, the Employer shall employ
a money room counter specifically for the purpose of counting teller receipts
only.  Any such position shall be
included in the bargaining unit and be paid at the appropriate teller rate.

 

ARTICLE 2

UNION SECURITY

 

2.1                               All present unit employees who
are members of the Union on the effective date of this Agreement shall remain
members of the Union in good standing as a condition of employment.

 

2.2                               All new unit employees shall be
required as a condition of employment to become and remain members of the Union
upon completion of thirty-one (31) calendar days.

 

 

ARTICLE 3

NOTIFICATION TO THE UNION

 

3.1                               The Employer shall furnish
official notices to the Union at the following addresses:  Sports Arena Employees’ Local 137, AFL-CIO, Suite 203,
1012 Haddonfield Road, Cherry Hill, NJ 
08002.

 

ARTICLE 4

SENIORITY

 

4.1                               Seniority shall be defined as
the employee’s total length of continuous uninterrupted employment with the Employer.  Except as otherwise provided herein, the
seniority referred to in this Article is Departmental seniority only.

 

4.2                               Seniority shall be based upon
the employee’s total hours worked from employee’s last date of employment.  In the event that two or more employees have
the same seniority, ranking shall be determined by a drawing.

 

4.3                               Employees shall accrue seniority
only in the department and at the facility in which they are employed except
that bargaining committee members shall be credited with time worked for all
hours, except for pay.

 

4.4                               There shall be separate
Admissions and Mutuel Teller seniority lists in each facility.  Employees shall accrue seniority credit on
only one list even if they have worked at a position on the other list.

 

4.5                               The Employer will provide each
month current seniority lists by department for each facility and productivity
lists quarterly for each facility to the Shop Steward and shall post same.

 

2

 

4.6                               Any employee who seeks to
dispute anything regarding Seniority or these lists must file a grievance
within the time limitations and pursuant to the grievance procedure or it is
waived.  Nothing herein shall intend to
change the past practice of the frequency at each facility of the periods that
seniority lists are utilized to create schedules.

 

4.7(A)              All new unit
employees shall be required to complete a probationary period which shall be
defined as three (3) calendar months. 
Upon completion of the probationary period, seniority credit shall be
given for days worked during the probationary period.

 

4.7(B)              There shall be no
seniority among probationary employees.

 

4.7(C)              During the
probationary period the Employer may terminate an employee’s employment for any
reason without recourse to the grievance procedure by either the union or
employees.  During the probationary
period, an employee shall have no right to file grievances of any kind nor
shall the Union have the right to file grievances on behalf of the employee.

 

4.8                               All unit employees are expected
to work when scheduled.

 

4.9                               The parties agree that
scheduling will continue to be done at each facility in accordance with the
past practice at each.  However, if an
employee chooses to reduce their availability as to the number of shifts over
the scheduling term, then management shall not be obligated, for up to three (3) calendar
months, to reschedule in order to accommodate the employee to reinstate
the prior number of shifts.

 

4.10                        Employees may not demand to work
over forty (40) hours per week, however, any scheduled or foreseen overtime,
(i.e., work over forty (40) hours) , shall be offered in the Department by
seniority.

 

4.11                        Unforeseen work opportunities
during that shift shall be offered first to employees in the department and on
that shift by seniority.

 

3

 

4.12                        All Admissions department shifts
shall be offered to Admissions department employees before being offered, to
any Mutuel department employees. 
Admission-qualified Mutuel employees who are utilized to fill a vacancy
in an Admissions position will carry their pay rate and accrue such hours as
hours worked within the Mutuel Department for all purposes.  However, as with the hours worked in the
Customer Service position, time worked in Admissions by Mutuel employees shall
not be used against them for the productivity formula or any other purpose.

 

It is
understood, that if the Employer is without an Admissions employee, and cannot
reduce the number of tellers needed for a particular shift, no offer of “open”
Admissions Department work need be made to already scheduled
Admissions-qualified mutuel employees. 
An offer of such work to scheduled and/or to unscheduled tellers shall
be made before a work opportunity is provided to a non-bargaining unit employee
where there are sufficient Admissions-qualified Mutuel Department employees.

 

4.13                        Upon an approved medical leave
or a Family Medical Leave Act leave, seniority shall accrue, but only for hours
one would normally be work eligible, up to six (6) months while on an
approved leave of absence.  However, no
one on such leave may accrue greater hours then he could have been eligible but
for the leave.  After six (6) months
the employees status arid accumulated hours shall be maintained or frozen, but
no further hours will accrue.

 

4.14                        Seniority shall be lost in the
following instances:

 

a.                                       Quit;

 

b.                                      Discharge for cause;

 

c.                                       Retirement;

 

4

 

d.                                      Failure to report for work within
three (3) working days after being notified by the Employer or the Union
to report for work.

 

e.                                       Unexcused absence.  An unexcused absence shall consist of any
absence without justifiable cause.

 

f.                                         Layoff in excess of twelve (12)
months.

 

4.15(A)                                                       Department
seniority will be the determining factor in layoff and recall.

 

4.15(B)                                                       Department
layoff and recall rights shall be based on (accrued hours) seniority.

 

4.16                        All current bargaining unit
employees at Penn National Racecourse shall be considered for employment as
non-primary locations.  Management shall
have sole discretion as to who is qualified, in their opinion, to perform
duties at all non-primary locations.

 

4.17                        All current bargaining unit
employees at non-primary location shall be considered for transfer of
employment to another non-primary location. 
Should such a transfer occur, the employee shall carry their original
date of hire and their then current pay rate, but only up to the highest rate
in effect at the facility into which they transfer.  Such employee who chooses to be transferred
shall not carry any seniority credit from their previous location and would be
placed at the bottom of the seniority roster, but ahead of all probationary
employees.

 

ARTICLE 5

MANAGEMENT RIGHTS

 

5.1                               Subject to the terms of this
Agreement, the Employer retains the right to manage and direct the work force
including, but not limited to, the right to control the number of employees to
be employed, the right to schedule work and assign and change locations at
which work will be performed, the right to designate the equipment to be used
and the methods of

 

5

 

operation, and the right to establish, implement and change reasonable
standards of performance, incentive standards or plans, and other rules or
regulations, and the right to discipline or discharge for cause.  Managerial functions or prerogatives not in
conflict with a specific term of this Agreement are retained.  It is further understood that management has
the right to promote, demote or transfer employees when, in its opinion, such
movement is necessary for the proper operation of its business.

 

ARTICLE 6

WORK BREAKS

 

6.1                               There shall be one 15-minute
break for any employee whose work shift is from zero to six hours.  There shall be one 15-minute break and
one 30-minute break for any employee whose work shift is in excess of six
hours.  Any and all breaks shall be
scheduled at the discretion of management. 
An additional 15 minute break will be due to any employee who works 8
and 1/2 hours.  However, time to “count-out”
not included to ‘trigger’ a break.

 

ARTICLE 7

CHECK-OFF

 

7.1                               The Employer shall deduct from
the pay of the employees represented by the Union, their established Union
dues, fees, and assessments and turn them over to the authorized agent of the
Union, by check, after first having received a copy of the signed check-off
authorization form executed by the employees, from the Union.  Remittance of union dues, fees, and
assessments shall be made on a monthly basis. 
In addition to the deduction of daily working dues, the annual per
capita dues, fees and assessments of the Union shall be deducted each year.

 

6

 

7.2                               The Employer agrees to “deduct
and transmit to Sports Arena Employees’ Local 137 Political Action Committee
contributions for each shift worked from wages of those employees who have
voluntarily authorized such contributions on the forms provided for that
purpose by the Union.  These transmittals
shall occur monthly and shall be accompanied by a list of the names of those
employees and the amount deducted for each such employee.

 

The Employer
further agrees to deduct deposits to the Sports Arena Employees’ Local 137
Union Federal Credit Union upon presentation of an employees signed
authorization.  These transmittals shall
be made weekly to the Credit Union and shall be accompanied by a list of
employees from who payroll deductions have been made and the amount deducted
for each such employee.

 

ARTICLE 8

WAGES

 

Admissions and
Mutuels

 

8.1                               All employees in the bargaining
unit shall receive increases to their current pay rate as follows:

 

a.                                       Effective October 1, 2002,
all employees shall receive an increase of + $.35/hr. retroactively for
all hours worked.

 

b.                                      Upon ratification all hours
worked thereafter by any employees making less than $8.20/hr. in Mutuels and
$6.75 in Admissions shall immediately receive the necessary increases so as to
be at that hourly rate.  Thereafter, the
starting rates may not be below those rates.

 

c.                                       Effective October 1, 2002
all employees in the bargaining unit shall receive an additional increase of
+ $.20/hr for all hours worked thereafter.

 

7

 

d.                                      Effective October 1, 2003,
all employees in the bargaining unit shall receive an additional increase of
+ $.35/hr. for all employees for all hours worked thereafter.

 

e.                                       Effective October 1, 2004,
all employees in the bargaining unit shall receive an additional increase of
+ $.35/hr. for all hours worked thereafter.

 

8.2                               If the Employer, but only upon
ten (10) days advance notice to the Union Business Manager, raises the
initial base rate of pay for newly hired employees (under 8.1 or 8.6 above)
then, the base pay for each employee in the same department who has less that
none (1) year of service shall also be increases so as to maintain their
relative wage against the starting rate. 
In addition, no unit employee in that department shall receive a base
rate of pay which is lower than that of someone hired after them and shall
receive such adjustments to assure same. 
Once such new employee rates and/or the rate for any affected employees
are raised, such “raised” rates may not be reduced.

 

8.3                               All pay calculations for tellers
shall be based upon sign-on and/or sign-off at the nearest quarter hour to the
time shown on the Wagering Terminal Voucher. 
All pay calculations for admissions employees shall be based upon
sign-on and/or sign-off at the nearest quarter hour to the time shown on the
payroll computer terminal.  Employees
shall be paid for all time for which the Employer requires their time.

 

8.4                               If employees are requested to
work two shifts in the same day and there is less than one (1) hour
between the end of the first shift and the beginning of the second, the
employees shall be paid for that time. 
However, if there is more than one (1) hour between shifts, the
Employer may require that the employees go on unpaid time off for that period.

 

8.5                               The Employer will clear the
record of any employee who has not committed an offense in 24 months.  Should the Employer request to interview an
employee under

 

8

 

circumstances which
are likely to lead to that employee being disciplined, the Employer will permit
any immediately available shop steward or union representative to be present
during the interview.  In the event of a
flagrant breach of customer service or productivity standards, the Employer shall
have the right to terminate such employee immediately, subject to Article 15
and 16 hereof.

 

Mutuels

 

8.6                               The employer retains the right
to discipline or terminate the employment of any employee that fails to meet
the Employer’s standard for customer service. 
To this end, it is specifically noted that customer service evaluations
will occur throughout the year and will not be announced.  The Employer will use its best efforts to
inform employees of their evaluations within ten (10) working days.  Discipline for failure to meet customer service
standards shall be as follows:

 

1.                                       Documented
verbal warning;

 

2.                                       Formal
written warning;

 

3.                                       3
day suspension & final warning;

 

4.                                       “Review
for Termination” procedure (see attached).

 

8.7                               Line supervisors/tellers shall
receive an additional one dollar and twenty five cents ($1.25) per hour
premium, which has been the compensation for some time.

 

8.8                               Customer Service Representatives
shall receive an additional $1.25 per hour premium, which has been the
compensation for some time, for all time worked.  Selection for such positions shall be as in
the past practice at each facility. 
Anyone performing the Customer Service Representative duties shall be
paid the additional $1.25 per hour over their base pay except this shall not be
paid in addition to the incentive.  All
such hours shall not count

 

9

 

negatively for an
employees productivity formula, but shall count as hours worked for all
purposes including seniority.

 

ARTICLE 9

DEATH IN FAMILY

 

9.1                               Any non-probationary employee
who, during the racing meeting, suffers a death in the family as hereinafter
defined, shall be entitled to three (3) work days off within, a 7 calendar
day period and a member of the family is defined as wife or husband, child,
natural, adopted or foster, stepchild, sister, brother, parent or
parent-in-law.

 

ARTICLE 10

VALIDITY OF CONTRACT

 

10.1                        The parties hereto agree that
should any Article, part or section of this Agreement be declared by a
federal or state court of competent and final jurisdiction to be unlawful,
invalid, ineffective or unenforceable, said Article, part or section shall
not affect the validity and enforceability of any other Article, part or
paragraph hereof and the remainder of this Agreement shall continue in full force
and effect.

 

10.2                        Moreover, anything herein to the
contrary notwithstanding, this entire contract is subject to the regulations of
the Pennsylvania State Horse Racing Commission, the provisions whereof take
precedence over and supplant any provision of this Agreement which may be in
conflict therewith.

 

ARTICLE 11

STRIKES AND LOCKOUTS

 

11.1                        This Agreement provides definite
means for settling all disputes which may arise between the parties concerning
its interpretation and application. 
Therefore, there shall be no

 

10

 

lockout of Union
members by the Employer and no strike, walkout, sitdown, sympathy strike, or
any action or inaction that may interfere with or interrupt the Employer’s
operations shall be called, authorized, sanctioned or permitted by the Union
during the term of this Agreement, unless either party hereto shall fail to
comply fully with the grievance and arbitration provisions and procedures set
forth in this Agreement.

 

ARTICLE 12

UNION VISITATION

 

12.1                        The Union representatives shall
be permitted entry for Union business upon the Employer’s premises where the
Union’s members are employed.

 

12.2                        It is agreed that such Union
representative will not interfere in any way with the Employer’s business.

 

12.3                        The Employer shall provide the
Union with a bulletin board in a bargaining unit work area at each facility for
the posting of notices and such other information dealing with contract
administration and Union membership.  The
Union agrees that the board will only be used for official union business upon
the approval of the Business Manager, and that the Union will not post anything
which unfairly depicts the Employer.  The
Employer agrees not to interrupt, delay, or in any way interfere with Union
communications to its members through its designated representatives, including
information communicated via the Employer’s facility facsimile machine.

 

ARTICLE 13

ILLNESS AND INJURY

 

13.1                        Employees who are absent from
work for one (1) year or less due to bona fide illness, accident or
official leave of absence, shall be entitled to return to their employment when

 

11

 

available to do so,
without loss of seniority accrued prior to absence.  The one (1) year period may be extended
by mutuel agreement.

 

13.2                        Where legitimate cause exists,
employees shall be required to submit to Company-paid physical examinations.

 

ARTICLE 14

PREMIUM PAY AND HOLIDAYS

 

14.1                        The Employer shall pay all
employees who do not qualify for 14.2 below, and who
perform work on any of the following holidays at one and one half (1 1/2)
times their regular hourly rate of pay:

 

New Year’s Day

 

Good Friday

 

Easter Sunday

 

Memorial Day

 

July 4

 

Labor Day

 

Thanksgiving

 

Christmas

 

14.2                        Effective October 1, 2002
and thereafter, all employees who average 35 hours/week in the prior
calendar year and who work on a Holiday shall receive, at their choice, the
greater of either:

 

a.                                       Double time for all hours worked
on the calendar day of that Holiday, or;

 

b.                                      Straight time pay for all hours
worked that day plus an additional 6 hours of additional pay.

 

12

 

If such
employee choose not to work, or otherwise does not work, then they shall
receive a paid holiday allowance of one additional regular shift at their
straight time rate in their regular paycheck for the pay period including the
holiday.  The Holidays shall include:

 

New Year’s Day

 

Memorial Day

 

July 4th

 

Labor Day

 

Thanksgiving

 

Christmas

 

14.3        All Hours paid for Holidays, whether
worked or not, and whether under 14.1 or 14.2 shall be counted for all purposes
of employment effective January 1 2003. 
(If the 2002 Thanksgiving Holiday credit for hours would effect anyone
qualifying solely for vacation, sick, holiday or benefits then same shall be
credited.)  (Also, anyone who worked
greater than or equal to an average of 35 hours per week in the 2002 and has
worked either for all hours worked on those days as well Thanksgiving 2002 or
New Years 2003, then they shall be paid and credited hours at time and one half
(1 1/2) times for all hours worked on those days plus an additional 6
hours paid & credited for each of those two dates that were worked.)

 

ARTICLE 15

SETTLEMENT OF GRIEVANCES

 

15.1                        Should any grievance arise
between the parties, whether it deals with the meaning, application or
interpretation of this Agreement or otherwise, the same shall be resolved as
follows:

 

a.                                       Any employee having a grievance
shall present it to the Steward, in writing, within seven (7) working days
after exhausting the Employer’s dispute resolution

 

13

 

procedure.  The Steward shall refer the grievance to the
business representative of the Union. 
Grievances may be initiated by the Union or the Employers if they so
desire.

 

b.                                      The business representative or
his designee shall take up the grievance with the department manager.  If a satisfactory settlement cannot be
reached at the time of this meeting with the department manager, the business
representative or his designee shall take up the unsettled grievance with the
General Manager, who shall, within ten (10) days after presentation to him
of the grievance, submit an answer to the Union’s representative.  In the event that the General Manager fails
to give his answer within the aforesaid ten-day period or if the Union is not
satisfied with the answer that is given, the Union shall have the right to
submit said grievance to arbitration as set forth below.  The Employer has the right to submit
Employer-initiated grievances to arbitration.

 

c.                                       The Union may, after the
expiration of the ten (10) day period or after receipt of the General
Manager’s answer, whichever is later, but not later than five (5) days
thereafter, give management notice of its desire to have the grievance
submitted to impartial arbitration.

 

d.                                      The Union and the Employer shall
attempt to agree upon the appointment of an impartial arbitrator.  If the parties are unable to agree within ten
(10) calendar days after the notification from the Union or Employer of
its desire to arbitrate, the parties shall request that the American
Arbitration Association submit to each of them a list of arbitrators from its
panel of impartial arbitrators.

 

e.                                       The decision of the arbitrator
shall be final and binding on the parties to this Agreement and shall not be
subject to appeal to any court or board.

 

14

 

f.                                         Neither party shall be
responsible for the expenses of witnesses called by the other party.  The arbitrator’s fees and expenses will be
paid one half (1/2) by the Union and one-half (1/2) by the Employer.

 

ARTICLE 16

NOTICE OF DISCHARGE OR SUSPENSION

 

16.1                        The business representative of
the Union shall be notified, in writing, immediately after a discharge or
suspension takes place, which notice shall contain the name of the employee
involved and the reason for such discharge or suspension.

 

ARTICLE 17

TICKET ERRORS, OVERAGES AND SHORTAGES

 

17.1                        Shortages shall be settled daily.

 

17.2                        Overages shall be returned to
the employees as soon as possible after the end of the calendar year.

 

17.3                        Those employees responsible for
accepting bets, and all those employees in any way responsible for money or
tickets shall be fully accountable to the Employers for any loss or shortage
therein except when such loss or shortage is caused by:

 

a.                                       force or threat of bodily harm;

 

b.                                      acceptance of counterfeit money
which is not clearly detectible; and,

 

c.                                       theft – the burden or proving a
loss as a result of theft is placed on the employee and such proof must be more
than a surmise or suspicion but must clearly establish that the employee’s
shortage is due to theft, and not his own negligence.

 

15

 

ARTICLE 18

RULES, REGULATIONS AND PERFORMANCE

STANDARDS AND INCENTIVE STANDARDS OR PLANS

 

18.1                        As set forth in Article 5,
the Employer shall have the right to establish, implement and change reasonable
rules, regulations, performance and incentive standards for the conduct of
their business as they may deem necessary and advisable, and all employees
shall be obligated to comply with same.

 

18.2                        Before such rules, regulations
or standards become effective, they shall be in writing and a copy shall be
given to the business representative of the Union and sufficient copies shall
be posted and/or distributed not less than one (1) week prior to their
becoming effective in order to apprise the clerks of their obligations
thereunder.

 

ARTICLE 19

VACATIONS

 

19.1                        Employees who have worked 1,560
hours in the previous calendar year will be given one week off with pay.  Work week will be defined as the average
number of hours worked per week in the previous calendar year.

 

19.2                        Employees who have worked 1000
hours but less than 1250 hours in the prior calendar year shall have two (2) paid
personal days for use in the following year. 
Employees who have worked 1250 hours but less than 1560 hours in the
prior calendar year shall have three (3) paid personal days for use in the
following year.  A personal day shall be
defined as a “shift” which is 6 hours as per past practice.

 

19.3                        All approved time off such as
vacation or personal days, family leave (approved FMLA standards), medical
leave, military leave, bereavement leave or jury duty leave shall be

 

16

 

used in the
calculations for qualifying for vacation and personal days.  In addition, all hours for which any employee
is paid including but not limited to sick pay and holiday pay shall all count
as hours worked for all purposes of employment.

 

19.4                        Vacation pay will be equal to
the employee’s average number of hours worked per week in the previous calendar
year multiplied by the employee’s regular hourly rate of pay.

 

19.5                        Any vacation request must be
approved at least 15 days in advance.  It
is understood that the Employer shall have the right at all times to determine
the number of employees to be granted vacation at any one time.  In the event of a conflict in vacation requests,
seniority shall control, provided the 15 days notice has been given.  However, the employees request to utilize an
available individual vacation day or to receive vacation pay shall not be
unreasonably withheld.

 

19.6                        Commencing on January 1,
2003 and thereafter, in addition to the above, any employee with five (5) or
more years of service who has worked 1820 hours in the previous calendar year
shall be entitled to an additional 5 shifts of vacation time at a shift length
of 6 hours.

 

ARTICLE 20

LEAVES OF ABSENCE

 

20.1                        No employee shall be granted a
leave of absence without the prior written approval of the Employer and the
Union.  Unless extended by mutuel
agreement, leaves of absences shall be limited to no more than one (10) year.  At the end of such leave of absence, such
clerk shall be reemployed in the same classification in which he was employed
at the commencement of his leave, without loss of pay status and without
impairment of his seniority

 

17

 

rights.  Except as provided in Article 4 herein,
seniority credit shall not accrue during an approved leave of absence.

 

20.2                        Military Leave – Any employee
represented by this Union heretofore or hereafter separated from his employment
due to military service shall be reinstated in his prior position with the
Employer, provided he applies for reinstatement within twelve (12) months of
his honorable discharge from the military service or the first day of racing of
the next racing season, whichever is later.

 

20.3                        Any such leaves shall be without
pay or benefits except as may be required by law.

 

ARTICLE 21

WORK NOT AVAILABLE

 

21.1                        Any employee reporting for work
who begins to perform any duties of his job shall be entitled to three (3) hours
pay at straight time rates.

 

21.2                        In case of closure of a
facility, employees who have not been notified at least one and one-half
(1 1/2) hours before scheduled start time shall, if they report, receive
one (1) hour’s pay at straight time rates.

 

21.3                        If an employee works at least an
average of eleven (11) hours of weekend shift work per week for the prior
calendar quarter, then all hours for which that employee is scheduled and for
which the employee shows up to work, (excluding any hours for which the
employee volunteers to leave early) shall be credited as hours worked for that
employee for all purposes except pay.

 

21.4                        Once the employer has posted the
completed schedule for the employees work shifts and the employer
thereafter either closes on a scheduled day or cancels any scheduled shift

 

18

 

(except for weather
or other situations beyond the employers ability to control) then the employer
must immediately re-post and, in effect, re-bid by seniority all remaining days
and shifts in the applicable scheduling period.

 

ARTICLE 22

UNIFORMS

 

22.1                        Employees will be required to
purchase shirt and pants designated by the Employer.  Shirt and pants shall be of standard style
and materials.

 

22.2                        Employer shall supply at their
costs any accessories, such as ties, vests, jackets and any other items that
they may require employees to wear.  The
Employer shall have, the right to require the employee to wear such Employer
supplied accessories.

 

22.3                        The employer shall create reasonable
specifications for sweaters which the employees shall be permitted to purchase
and wear if they choose to do so.

 

ARTICLE 23

MEDICAL BENEFITS

 

23.1                        Commencing February of each
year, the Employer agrees to provide Capital Blue Cross, Custom Blue PPO, Basic
Option, as currently provided to other Penn National employees or the best
medical plan offered to any of the management, and in no event shall the unit
employees receive a lesser benefit plan than provided to any other Penn
National employee.  The employer will pay
70% of the cost of said program for one full year of single coverage for any
unit employee who has averaged 35 hours per week in the prior calendar
year.  Effective on October 1, 2002,
the employer will thereafter pay 80% of the cost of these benefits.

 

23.2                        The employee may choose to pay
the difference between the “basic plan” or the “enhanced plan” and for coverage
for dependents as defined by the insurance carrier.

 

19

 

23.3                        The Employer shall take the
necessary and appropriate actions to ensure that the employee’s portion of any
contributions to the above coverage is deducted from the employee’s pay and is
done before tax, i.e., non-taxable, dollars.

 

23.4                        Coverage shall commence on February 1,
for those qualifying based on the prior calendar year qualification (excluding
Horseman’s Shutdown).

 

23.5                        The Employer agrees to allow
employees covered by this Agreement, to buy into the below referenced medical
plan provided the employee accepts the provider’s minimum term of coverage.

 

23.6                        Approved time off as per 19.3
shall be used in the calculations for qualifying for medical benefits.

 

ARTICLE 24

PAID SICK LEAVE

 

24.1                        Effective October 1, 2002
and thereafter, all full-time employees, i.e. those who have worked an average
of 35 hours per week in their prior calendar year, shall be eligible for paid
sick leave benefits for use in the succeeding year as follows:

 

a.                                       For employees with less than
five (5) years of seniority, but who have completed probation, shall be
entitled to use up to six (6) paid sick days per calendar year due to
sickness or injury to themselves.  Such
payments shall commence on the third consecutive day of an absence.

 

b.                                      For employees with five (5) years
or more of seniority, shall be entitled to use up to six (6) paid sick
days per calendar year due to sickness or injury to themselves.  Such payments shall commence on the second
consecutive day of absence.

 

20

 

24.2                        If an employee is absent for
three or more consecutive days, a physicians certificate may be required to
verify the illness or injury and its beginning and end dates in order to
receive paid sick leave pay.

 

24.3                        Sick leave benefits will be
calculated based on the employee’s earnings that the employee would have made
for the time scheduled had they worked on the date of absence.  A day for purposes of this section only
shall mean a calendar day whether a single or a double shift.

 

24.4                        Sick leave benefits are intended
solely to provide income protection and may not be used for any absence but the
employee’s personal illness or injury.

 

24.5                        Unused sick leave benefits will
not be “paid out” nor can unused days be “cashed out” to employees while they
are employed or upon cessation of their employment.

 

ARTICLE 25

SLOT MACHINE AGREEMENT

 

25.1                        The parties agree that in
consideration for the active assistance of Sports Arena Employees Local Union No. 137,
AFL-CIO, LIUNA (The Union), the undersigned licensee and Employer (The
Employer) agrees to amend their collective bargaining agreement at both
on-track and off-track as follows if the Legislature shall pass legislation
permitting the operation of any slot machines at any of their or their or their
subsidiaries licensed facilities in the Commonwealth of Pennsylvania:

 

a.                                       The operators agree to
participate and to contribute to Local 137 Health and Welfare Fund one-half of
the cost of an HMO plan or single coverage for an HMO plan to be offered for
all full-time employees (on-track or off-track) who do no otherwise have
coverage provided to them by the Employer-operator.  Full time equates to any employee who has
averaged 35 hours per week off-track, or 190 shifts on-track during the
previous calendar year

 

21

 

inclusive of all approved
time-off such as:  leave of absences,
vacation, jury duty, bereavement or worker’s compensation.  This obligation by the Employer is by this
Agreement limited to either contributions of fifty percent (50%) of the costs
for single, two people, or three and above, at the monthly rates of $150.00,
$286.00, and $408.00, respectively.  The
alternative obligation regarding single coverage shall include an employee co-payment
of 7.5% of the monthly premium.

 

b.                                      The operators agree to provide a
401K plan to all employees (on-track or off-track) who are members of this
Union with a provision for the Employer contribution of 20% of employee
contributions on up to a maximum of 10% of employees gross pay.

 

c.                                       Should any new form of gambling
or gaming be introduced into the operations of the operators herein, including “gaming
devices”, then all current employees of the operator (represented by Local 137)
shall be permitted 90 days to train and work in the new positions created, and
to carry their seniority to the new position.

 

d.                                      The Employers agree as a minimum
that the personnel who will be employed by any company or entity engaged to
perform the work of handling money, providing change, redeeming coins, or otherwise
in any way related to such operations, except managerial, supervisory,
electrical installation and/or repair personnel and warranty repair personnel,
and food and beverage personnel will come under the work jurisdiction of Sports
Arena Employees’ Local 137, AFL-CIO, 1012 Haddonfield Road, Cherry Hill, New
Jersey.

 

All such jobs
associated with the new gambling or gaming shall be considered part of the
on-track bargaining unit, and will be subject to the terms and conditions of
the current on-track agreement, except that the Union and the Employer shall
negotiate rates of pay for the

 

22

 

new
positions.  Further, the Union agrees to
execute a separate document at the expiration of the then current contract.

 

e.                                       Should the operator “lease”,
sub-contract, or sell any portion of the current operations or “new” gaming or
gambling operations involving the work of the bargaining unit, the provisions
of this agreement, as well as their current collective bargaining agreement, as
well as their current collective bargaining agreement, shall become a condition
of and execution of same shall be a pre-requirement of any lease, sub-contract
or sale of said operations.

 

f.                                         All pari-mutuel teller operated
machines shall be able to accept the exact same type of bets with regard to
racetrack, dollar amount, type and format of bet, as the self- service
machines.

 

g.                                      Implementation of slot-machines
at a facility is a condition precedent for implementation or activation of obligations
on Employer to provide or comply with paragraphs 1, 2 and 6 of this Agreement.

 

h.                                      Parties agree that the above
items will be included in both the current and the next successor Agreements at
both primary and non-primary locations (C.B.A.’s).

 

ARTICLE 26

MISCELLANEOUS

 

26.1                        The Employer shall allow Tellers
to take a “cash position” any time during their shift with a Manager’s approval
and/or participation.

 

26.2                        Tellers will be permitted to
cancel tickets with the approval and/or authorization of a manager.  Without specific authorization, the Teller
will be able to cancel up to the last ten (10) tickets created for the
employees then current customer, but only provided that the hub remains at Penn
National.

 

23

 

26.3                        The Employer shall notify the
Union’s Business Manager of and shall post a notice in all the Turf Club
facilities of all job opportunities within the bargaining unit.

 

26.4                        The parties hereby incorporate
by reference all the terms and contents of the “Slot Machine Agreement” between
the parties and dated May 5, 1997 into this collective bargaining
agreement.

 

26.5                        The employer shall permit the
Tellers to choose their windows, from those designated and available, based on
seniority among those scheduled to work within one hour of the report
time.  The goal of all parties shall be
to permit the senior employees to obtain an opportunity at their preference of
available windows within the reasonable confines of the employers interest to
serve its customers.

 

26.6                        Any period of eligibility
established for any reason under this agreement shall be prorated so as to
discount for the full amount of any period of time that an individual facility
is or was not operating once it has not operated for an aggregate of six (6) days
in a calendar year.

 

26.7                        All teller operated machines
shall be able to accept at least the same type of bets, same racetracks, same
dollar amounts, and formats at the same time as any self-service machine so as
not to disadvantage the use of tellers.

 

ARTICLE 27

DURATION OF AGREEMENT

 

27.1                        This Agreement shall take effect
and continue in full force and effect from the 1st day of October through September 30,
2005 and shall continue from year to year thereafter unless either party shall
give the other party at least sixty (60) days notice prior to the expiration
date of any continuation of the Agreement, of its desire to amend, change or
terminate same.

 

24

 

Intending to be legally bound hereby, the
parties affix their signatures
as of the 14th day of July 2003.

 

 

	
  FOR THE EMPLOYER:

  	
  FOR THE UNION:

  
	
   

  	
   

  
	
  PENN NATIONAL TURF CLUB, INC.

  	
  SPORTS ARENA EMPLOYEES’ UNION

  LOCAL NO. 137

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard Orbann

  	
   

  	
  By:

  	
  /s/ Robert Liguori  

  	
   

  
	
   

  	
  Richard Orbann

  	
   

  	
   

  	
  Robert Liguori

  	
   

  
	
   

  	
  President, Racing Division

  	
   

  	
   

  	
  Business Manager

  	
   

  

 

 

25

 

EXHIBIT “A”

 

Production
Standard

 

Minimum
average number of shifts and/or hours worked shall be 22 hours including one (1) weekend
shift or two (2) weekend shifts per calendar quarter.

 

Weekend shift
is defined as any shift from Friday night through Sunday day and peak holiday
shifts.

 

	
  Amount of
  dollars sold per hour

  	
   

  	
  60

  	
  %

  
	
  Number of
  tickets sold per hour

  	
   

  	
  20

  	
  %

  
	
  Number of
  tickets cashed per hour

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
  100

  	
  %

  

 

PRODUCTION
STANDARD

 

Amount
of dollars sold per hour – $915

[(Amount of
dollars sold – amount of dollars cancelled – amount of vouchers sold)/hours
worked]

 

Number
of tickets sold per hour – 115

[(Number of
tickets sold – number of tickets cancelled – number of vouchers sold)/hours
worked]

 

Number
of tickets cashed per hour – 15

[(Number of
tickets cashed – number of tickets cancelled – number of vouchers cashed) hours
worked]

 

FORMULA

 

	
  Net amount
  of dollars sold per hour

  	
   

  	
   

  	
  x

  	
  60

  	
  %

  	
  =

  	
   

  	
   

  	
   

  	
  +

  	
   

  
	
  Net number
  of tickets sold per hour

  	
   

  	
   

  	
  x

  	
  20

  	
  %

  	
  =

  	
   

  	
   

  	
   

  	
  +

  	
   

  
	
  Net number
  of tickets cashed per hour

  	
   

  	
   

  	
  x

  	
  20

  	
  %

  	
  =

  	
   

  	
   

  	
   

  	
  =

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(WEIGHTED
STANDARD 1.00 OR GREATER QUALIFIES)

 

Example:

 

	
  $

  	
  926/915

  	
  =

  	
  1.012

  	
  x

  	
  60%

  	
  =

  	
  .607

  
	
  #107/115

  	
  =

  	
  0.930

  	
  x

  	
  20%

  	
  =

  	
  .186

  
	
  # 17/15

  	
  =

  	
  1.133

  	
  x

  	
  20%

  	
  =

  	
  .226

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  .607

  	
  +

  	
  .186

  	
  +

  	
  .226

  	
  =

  	
  1.019

  

 

A-1

 

Any teller
with two or more disciplinary memos on file during a quarter shall be subject
to the following:

 

	
  first offense

  	
  –

  	
  documented verbal warning

  
	
  second offense

  	
  –

  	
  written warning

  
	
  third offense

  	
  –

  	
  written warning with loss of one (1) quarter
  incentive raise starting the following quarter

  

 

Any teller
that fails to meet .80 of the standard (1.00) shall be subject to the following:

 

	
  first quarter

  	
  –

  	
  documented verbal warning

  
	
  second consecutive quarter

  	
  –

  	
  written warning

  
	
  third consecutive quarter

  	
  –

  	
  written warning with a two (2) day
  suspension and mandatory retraining

  
	
  fourth consecutive quarter

  	
  –

  	
  termination

  

 

With management
and union approval the standard and/or standards weight can be adjusted
independently at each OTW facility as necessary each quarter.

 

If less than
50% of the tellers make the standard, (without disqualification for
disciplinary reasons), then the top 50% will be given the incentive pay.  Ranking for the top 50% as follows:  First qualified by time and standard.  Second by time (excluding tellers below .80
of standard).  Third by teller with the
highest performance rating working a minimum average of 10 hours per week.

 

The employer
will clear the record of any employees who have not committed an offense in 24
months.

 

A-2

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