The following contains the main points of the lease.
LEASE AGREEMENT made this day of , 2003, by and between HORSHAM TOWNSHIP, a Home Rule Charter Township in the Commonwealth of Pennsylvania (“Lessor”) and HORSHAM PRESERVATION AND HISTORICAL ASSOCIATION, a Pennsylvania non-profit corporation and HISTORICAL PROPERTY PRESERVATION INSTITUTE, a Pennsylvania non-profit corporation (collectively the “Lessee”).
1. Lessor is the owner of certain property comprised of approximately one hundred two acres (102 ac.) commonly referred to as the “Strawbridge Property”, being Tax Parcel No. 36-00-04774-005 (“Property”), which property contains certain improvements consisting of a stone farm house, tenant house/spring house, two barns, two horse sheds, a stone well house and assorted sheds and ruins.
2. The stone farmhouse located on the property is commonly referred to as the “Strawbridge House”.
3. The Lessor has requested and received from Lessee a proposal to lease the Strawbridge House, the surrounding outbuildings and the surrounding portion of the Property consisting of ten acres (10 ac.) of ground, as more fully depicted on the plan attached hereto and made part hereof as Exhibit “A” from the HPHA proposal of 1/31/03.
4. Lessees are Pennsylvania non-profit corporations, duly registered under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
5. Lessor and Lessee desire to set forth their respective rights and obligations regarding the leasing of the Demised Premises by Lessee from Lessor, as more fully set forth below.
NOW THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants and promises contained herein the parties agree as follows
1. Description of Demised Premises.
Lessor does hereby lease to Lessee, and Lessee does hereby lease from Lessor, the entire Demised Premises as depicted on Exhibit “A” hereto, situate on Governor Road, Horsham Township, Pennsylvania, together with the Strawbridge House and all surrounding outbuildings. The Demised Premises shall include the ten acre (10 ac.) parcel depicted on Exhibit “A” and all of the aforesaid improvements located thereon. Lessee agrees to accept the Demised Premises in their “as-is ----” condition and Lessor shall be required to make no improvements or repairs (Except for public water installation) to the Demised Premises prior to the commencement of occupancy by Lessee.
Lessee shall pay one dollar per year as consideration for the use and occupancy of the Demised Premises for the term of this Lease.
3. Lease Term.
(a) The initial term of this Lease shall be for ten (10) years, commencing on __________________ (the ”Commencement Date”) and ending on __________________.
(b) Lessee shall have the right to renew this Lease for an additional term of fifteen (15) years provided notice of such renewal is given by Lessee to Lessor at least six (6) months prior to the end of the initial term. In default of such notice this Lease shall automatically terminate, without any further notice, at the end of the initial term.
(a) Lessee shall use and occupy the Demised Premises solely for the following purposes, or other similar purposes related to the mission of the associations:
(i) A living history farm or other historic use with public access.
(ii) A museum of Horsham area history with public access.
(iii) Administrative offices for either or both of the named Lessees, provided that such administrative office use not exceed ____% of the total square footage of the Strawbridge House. (Also sublet to Millbrook or other similar non-profit groups?)
(iv) Residence for caretaker/s or farmer
(b) All revenues generated from the aforesaid uses of the Demised Premises shall be and remain the sole property of Lessee.
Lessee shall have the right to immediate occupancy of the Demised Premises as of the Commencement Date, except that Lessee shall not have the right to occupy the Spring House located on the Demised Premises until such time as Lessor has provided notice of lease termination to the current occupants of that building and such occupants vacate that building. If not vacated within thirty (30), days, Lessee has the right to-------- Notice to be given by the township pto the Springhouse tenant within seven days of the lease effective date.
6. Lessee’s Improvements to Demised Premises.
(a) Lessee shall be obligated to rehabilitate and restore the Strawbridge House and surrounding outbuildings to their original architecture and furnishings, with the architecture of such improvements based on Historic Architect’s archeological research and expected to be from the era of the early 1700’s to early 1900’s.
(b) Lessee may convert a portion of the Strawbridge House and/or associated out buildings into a public museum.
(c) The renovation and rehabilitation of the improvements located on the Demised Premises shall (may) include both interior and exterior improvements, including any necessary structural repairs, upgrades to the electrical, heating and waste treatment systems located on the Demised Premises, exterior improvements and renovations and interior upgrades to bring the property into compliance with all applicable laws, codes, rules and regulations and to render the Demised Premises architecturally fitting for the late 19th century. (There is a prior agreement for the Lessor to provide public water to the buildings at the time of installation of the water line through the property. This has not been done yet.)
(d) The cost of all repairs, renovations and improvements to be undertaken by Lessee under this Lease Agreement shall be born solely by Lessee and Lessor shall have no responsibility, directly or otherwise, to bear any of the costs or expense associated with such work. However, Lessor may contribute materials, labor or funds to help the restoration of their property. Lessor may also contribute by means of use of township facilities for events or fund raising. Lessee anticipates raising the funds necessary to pay for these renovations and repairs through grants, donations, fund raising events and volunteer efforts. Lessor is entering into this Lease Agreement on the basis that Lessee has the means to obtain the necessary funds to accomplish the repair and renovation objectives set forth in this Lease Agreement. Lessor agrees to assist Lessee, as necessary, in applying for and/or obtaining grants.
(e) Lessee shall present to Lessor for Lessor’s prior approval a general master plan showing the renovations to be made to the Demised Premises during the term of this Lease. It is anticipated by the parties that the plans will change from time to time as Lessee refines it plans to renovate the Demised Premises. In the event the plans are significantly changed, (changes exceeding more than 20% of the current years budget) Lessee shall present such changed plans to Lessor for its approval. Approval will be automatic if no written notice of exception is received by Lessor within thirty (30) days of Lessor’s receipt of the change notice. No such work, repairs or renovations shall be commenced without the issuance of a valid building permit for such work, to be issued by Horsham Township and the Commonwealth of Pennsylvania in accordance with the then applicable Building Code. Lessor agrees to waive any building permit fees. The Lessor’s agent for approval is Parks and Rec, Council, Manager???
(f) Lessee agrees to comply with all Federal ADA regulations regarding the use of the Demised Premises by the public in historic structures as defined by the Secretary of the Interior’s Historic Structures Specifications. In addition, Lessee agrees to supply all necessary security systems and security related devices on the Demised Premises to ensure public safety. The current security and fire alarm system can be reused and assigned to the lessee by the lessor.
(g) Within six months of the execution of this Lease, Lessee shall present to Council, for its approval, a schedule of proposed objectives for the improvement and renovation of the Property. (If not approved?) Notwithstanding anything contained herein regarding the Lease Term, Lessee agrees that the work and renovations anticipated to be made by Lessee at the Demised Premises shall be substantially completed per the AIA definition, or the funds available to complete within five (5) years from the date of this Lease Agreement. In the event Lessee fails to substantially complete the anticipated work and renovations at the Demised Premises within such time period, Lessor shall have the right, upon ninety (90) days advance notice to Lessee, to terminate this Lease in which event Lessee shall have the obligation to vacate the Demised Premises and all improvements, installations, fixtures and additions made thereto or installed therein by Lessee, shall become the sole property of Lessor. (Detail on arbitration if Lessor and Lessee disagree on “substantially complete”) and (reimbursement of major contributors if the lease is terminated prematurely and the property SOLD or leased to an individual or for-profit corporation for more than one dollar a year to prevent undue enrichment of the township, buyer or other entity at the expense of restoration contributors)
(h) Lessee shall present the following to Lessor on an annual basis beginning one year from the date of this Lease:
(i) A recap of all work, renovations and projects completed in the prior year.
(ii) A written report of Lessee’s financial condition for the current year.
(iii) Lessee’s plans for the upcoming year. v (iv) A request for written feedback from Lessor on the work, renovations and future plans for the Demised Premises within 60 days of the report to the lessor if there are any questions or problems.
7. Utility and Taxes.
(a) Lessee shall pay all charges for electricity, gas, telephone, sewer and water, and all utilities furnished to, and serving the Demised Premises.
8. Lessee’s Conduct of Renovations and Repairs.
All work conducted by Lessee on the Demised Premises shall be performed in a good and workmanlike manner. Lessee agrees to keep the Demised Premises substantially free of refuse and rubbish during the course of any construction on the Demised Premises and thereafter during Lessee’s occupancy and use of the Demised Premises. In view of the extensive work anticipated to be conducted by Lessee under this Lease Agreement, Lessee shall not be required to restore the Demised Premises to the condition in which they were prior to such alterations and/or installations. At the expiration or earlier termination of this Lease Agreement Lessee shall return the Demised Premises to the Lessor in their then condition and Lessor agrees to accept the Demised Premises in such condition. All improvements, renovations, additions, fixtures and other components, of whatever nature (furniture of caretakers, farmers and donated items), added to or installed in the Demised Premises by Lessee during the term of this Lease shall become the property of Lessor at the expiration or earlier termination of this Lease Agreement. (reimbursement of major contributors if the lease is terminated prematurely and the property SOLD or leased to an individual or for-profit corporation for more than one dollar a year to prevent undue enrichment of the Lessor, buyer or other entity at the expense of restoration contributors)
Lessor covenants and agrees that throughout the term of this Lease it will insure the improvements located on the Demised Premises against damage by fire including extended coverage, vandalism and malicious mischief and comprehensive general liability insurance in such amounts as is customarily carried by Lessor on other buildings of a like nature owned by it within Horsham Township. (As owner of the property, the township must be responsible for fire and liability insurance, perhaps a % of completion sliding premium scale? We have no insurable interest at the start)
Lessor and lessee shall mutually maintain and pay for public liability insurance also covering Lessor as an additional insured, as its interests may appear, which insurance shall remain in effect during the entire Lease term, with coverage as follows: bodily injury $1,000,000.00 for each person; $2,000,000.00 for each occurrence and for property damage in the amount of $500,000.00. Lessee further covenants and agrees that throughout the term of this Lease it will insure the Demised Premises, all improvements and all contents against damage by fire, extended coverage, theft, vandalism and malicious mischief, also covering Lessor as an additional insured, as its interests may appear, with limits of at least $1,000,000.00 for each person; $2,000,000.00 for each occurrence and for property damage or loss in the amount of $500,000.00. Such insurance shall include insurance covering all of Lessee’s personal property and other contents located at or on the Demised Premises. In addition, any contractors or subcontractors performing work at the Demised Premises shall be required to be fully? insured before commencing any work, such insurance to be in the foregoing amounts and to include worker’s compensation insurance when applicable. Lessee will produce the necessary certificate or certificates of insurance to Lessor to indicate compliance with these provisions. Lessor and Lessee hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. All such insurance policies shall also provide that they may not be cancelled without at least thirty (30) days prior written notice to Lessor.
10. Mutual Indemnification.
(a) Each party agrees to indemnify and hold the other harmless from and against all claims, demands, suits, actions, costs and expenses, including reasonable attorney’s fees for the defense thereof, arising from any of the following: (a) the conduct, occupancy or management of that party’s business at the Demised Premises, including its use of the Demised Premises; (b) construction of improvements by that party at the Demised Premises, (c) any failure of that party to comply with any statutes, regulations, ordinances or orders of any governmental authority; and (d) for any accident, death, injury or damage, loss or theft of property in or about the Demised Premises resulting from any cause whatsoever, unless such accident, death, injury, damage, loss or theft is caused by the sole negligence of that party.
(b) In addition, notice is hereby given to Lessee that the Demised Premises are located adjacent to the Joint Military Reserve Base of Willow Grove and that it has been determined that several sites exist on the Base which are contaminated with hazardous substances. As part of a program of remediation the Federal Government may require certain easements over the Demised Premises in connection with such remediation. In such event Lessor shall be permitted to grant such easement rights to the Federal Government, or its related agencies, in connection with such remediation, and Lessee does hereby grant such right to Lessor and will not in any way impede the grant of such easements or the exercise of rights by the Federal Government, or its agencies, in connection therewith. The Lessee does hereby agree to release and hold Lessor harmless of and from any liabilities, claims, demands or actions, which may or do arise as a result of contamination on the Demised Premises from the Joint Military Reserve Base of Willow Grove. (Clarification on current site of contamination and possible migration, as well as remediation efforts. There are environmental, insurance and financing problems that need clarification. A “Carte Blanche” release is probably not possible. A legal definition of all parties responsibilities is necessary.)
11. Ongoing Maintenance and Repair.
(a) It shall be the sole responsibility and obligation, financial and otherwise, of the Lessee to provide all necessary maintenance and care of the Demised Premises and associated improvements and equipment to enable Lessee to operate the Demised Premises without hazard to the health and safety of all occupants and the general public.
(b) It shall be the sole responsibility and obligation, financial and otherwise, of the Lessee to perform all necessary maintenance, repair or replacement of equipment, alterations or changes to existing facilities as may be required by the state or local health officials, or other recognized governmental official in complying with requirements for the use of the Demised Premises by the public. It shall also be the obligation of the Lessee to secure the actual licenses that may be necessary for the operation of the Demised Premises by Lessee.
(c) Lessee shall provide at its sole cost and expense, necessary maintenance to the grounds located within the Demised Premises, including, but not limited to, all necessary grass cutting, , general lawn maintenance and maintenance of trees and shrubs. The Lessor is to maintain Governor’s Road area, including utility poles, lighting and snow plowing. Clarify pasture use!
12. Lead Hazard Disclosure Requirements. (not shown)
Lessee shall have the right to install appropriate signs indicating the various uses of the Demised Premises, however, all such signs shall be in accordance with all Sign Ordinances of Horsham Township, and shall be installed only after prior approval of Lessor and the obtaining of an appropriate permit from Horsham Township. Township signs made be posted on the leased property if they meet legal requirements and are approved by the lessor.
14. Casualty Loss. (not shown)
In the event that the Demised Premises are damaged by fire or other casualty, Lessee shall forthwith proceed to repair and restore the Demised Premises to its original condition, as expeditiously as possible, with Lessee to be responsible for such repairs up to but not exceeding the amount of insurance proceeds available to Lessee for such purpose. Lessee shall have available to it for this purpose all insurance proceeds of Lessee. In the event insurance proceeds are available from Lessor’s insurance carrier, Lessor shall, to the extent permissible under applicable State law and under Lessor’s Charter, proceed to utilize available insurance funds towards the restoration of the damaged property. In the event it is determined that the damaged improvements within the Demised Premises cannot be repaired so as to substantially restore the Demised Premises to their former condition within one hundred eighty (180) days after such fire or other casualty, then Lessee shall have the right to terminate this Lease Agreement provided that all insurance proceeds payable as a result of such fire or other casualty are made available to Lessor, less what reimbursements may be due to pay back to contributors if the property is demolished. There is to be no “windfall” to the Lessor.
In the event the Demised Premises shall be taken for public use by the city, state, federal government, public authority or other corporation having the power of eminent domain, then this Lease shall terminate as of the date on which possession thereof shall be taken for such public use, or, at the option of Lessee, as of the date on which the Demised Premises shall become unsuitable, for Lessee's regular business by reason of such taking; provided, however, that if only a part of the Demised Premises shall be so taken, such termination shall be at the option of Lessee only. Lessee shall not have the right to participate, directly, or indirectly, in any award for such public taking on account of such public taking, all such proceeds being payable solely to Lessor, less what reimbursements may be due to pay back to contributors if the property is demolished. There is to be no “windfall” to the Lessor.
The occurrence of any of the following shall constitute a material default and breach of this Lease by Lessee:
(a) The abandonment of the Demised Premises by Lessee. Abandonment shall be defined as leaving the Strawbridge House without a caretaker/s or without significant work completion for a period in excess of one year, or failing to properly maintain and repair the Demised Premises. Lessor shall provide Lessee thirty (90) days notice of its intent to declare the property abandoned under this clause.
(b) A failure by Lessee to obtain, or to keep current and in full force and effect, free of violation during the entire term hereof, any licenses, permits or other approvals required to be obtained or maintained by Lessee, at any and all times during the term of this Lease, from any agency, department or regulatory body having jurisdiction over Lessee or Lessee's use of the Demised Premises, including, without limitation, its non-profit status and registration under Section 501(c)(3) of the Internal Revenue Code.
(c) A failure by Lessee to observe and perform any other terms or conditions of this Lease ?? to be observed or performed by Lessee, where such failure continues for thirty (90) days after written notice thereof from Lessor to Lessee, provided, however, that if the nature of the default is such that the same cannot reasonably be cured within such period, Lessee shall not be deemed to be in default if within such period Lessee shall commence such cure and thereafter diligently prosecute the same to completion.
(d) The making by Lessee of any assignment for the benefit of creditors; an adjudication that Lessee is bankrupt, insolvent, or unable to pay its debts; the filing by or against Lessee of a petition in bankruptcy or of a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days after the filing thereof); the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located in the Demised Premises or of Lessee's interest in this Lease (unless possession is restored to Lessee within thirty (30) days after such appointment); or the attachment, execution or levy against or other judicial seizure of, substantially all of Lessee's assets located in the Demised Premises or of Lessee's interest in this Lease (unless the same is discharged within thirty (30) days after issuance thereof). (Dissolution of either corporation?)
Upon the occurrence of any event of default:
(a) Lessor may perform for the account of Lessee any such default of Lessee and immediately recover any expenditure made and the amount of any obligations incurred in connection therewith;
(b) Lessor, at its option, may serve notice upon Lessee that this Lease and the then unexpired term hereof shall cease and expire and become absolutely void on the date specified in such notice, to be not less than thirty (30) days after the date of such notice without any right on the part of the Lessee to save the forfeiture by the performance of any term or condition broken; and, thereupon and at the expiration of the time limit in such notice, this Lease and the term hereof, as well as the right, title and interest of the Lessee hereunder, shall wholly cease and expire and become void in the same manner and with the same force and effect (except as to Lessee's liability) as if the date fixed in such notice were the date herein granted for expiration of the term of this Lease. Thereupon, Lessee shall immediately quit and surrender ?? to Lessor the Demised Premises, and Lessor may enter into and repossess the Demised Premises by summary proceedings or ejectment and remove all occupants thereof and, at Lessor's option, without being liable to indictment, prosecution or damages therefore;
(c) Lessor may, at any time after the occurrence of any event of default, re-enter and repossess the Demised Premises and any part thereof and attempt in its own name, as agent for Lessee if this Lease not be terminated, or in its own behalf of this Lease be terminated, to release all or any part of the Demised Premises for such period or periods as Lessor, in its sole discretion, shall determine, including the term beyond the termination of this Lease; and Lessor shall not be required to accept any tenant offered by Lessee or observe any instruction given by Lessee about such reletting. For the purpose of such reletting, Lessor may decorate or make repairs, changes, alterations or additions in or to the Demised Premises to the extent reasonably deemed by Lessor to be necessary; and the cost of such decoration, repairs, changes, alterations or additions shall be charged to and be payable by Lessee, as well as any reasonable brokerage and attorney fees expended by Lessor; and any sums collected by Lessor from any new tenant obtained on account of the Lessee shall be credited against the balance due hereunder as aforesaid;
(d) Lessor shall have the right of injunction, in the event of a breach or threatened breach by Lessee of any of the terms and conditions hereof, to restrain the same and the right to invoke any remedy allowed by law or in equity, whether or not other remedies, indemnity or reimbursements are herein provided. The rights and remedies given to Lessor in this Lease are distinct, separate and cumulative remedies; and no one of them, whether or not exercised by Lessor, shall be deemed to be in exclusion of any of the others.
18. Lessor's Right to Enter Demised Premises
Lessee shall permit Lessor or its agent to enter at all reasonable times and upon reasonable notice (and in case of emergency at any time) to make such alterations or repairs therein as may be necessary for the safety or the preservation thereof, or for any other reasonable purposes.
Lessee shall not assign this Lease or sublet the whole or any part of the Demised Premises without prior approval of Lessor. (Unless sublet to a local non-profit such as Celestial Arts, H-H Educational Assn, Millbrook Society or Montgomery County Conservancy, etc. or to a farmer, sheep herder or horse trainer?)
20. Quiet Enjoyment. (not shown)
21. Notice. (not shown)
22. Hazardous Materials. (not shown)
(a) This Lease shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, and if any provisions of this Lease shall to any extent be invalid, the remainder of this Lease shall not be affected thereby.
(b) There are no oral or written agreements between Lessor and Lessee affecting this Lease. This Lease may be amended only by instruments in writing executed by Lessor and Lessee. (
c) The titles of the several paragraphs contained herein are for convenience only and shall not be considered in construing this Lease.
(d) Unless repugnant to the context, the words “Lessor” and “Lessee” appearing in this Lease shall be construed to mean those named above and their respective heirs, executors, administrators, successors and assigns and those claiming through or under them respectively.