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GREAT LOCATIONS INC. and
B&H JOINT VENTURE and
SEAN BAROWSKI
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
Petitioner
V
98- 1106 Equity
PAUL BEALE and HIS AGENTS
Respondents
MOTION FOR INJUNCTION
1
Plaintiff has filed a oomplaint against the above named Defendants
alleging that Defendants have wrongfully evioted Plaintiff from the
premises at 3721 Market Street, Camp Hill, Pa. A oopy of said
oompliant is attaohed hereto and marked Exhibit "A" and the
allegations in the said oomplaint are inoorporated by referenoe
thereto.
2
Plaintiff is suffering irreparable harm and severe loss of business
goodwill and monetary gain as a resul t of Defendant's wrongful
seizure of the premises at 3721 Market Street, Camp Hill, PA.
3
Plaintiffs request a preliminary injunotion to restore the status
quo and reinstate Plaintiffs to possession of the real estate at
3721 Market Street, Camp Hill, PA.
Q.. . 'L,~n,/
'.'~"'<'V-~- ;;C-, 'r/o.=
JosephJl. Metz
At'torney for Sean Barowski
I.V. No. 32958
214 Pine Street
Harrisburg, PA 17101
717-232-0879
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GREAT LOCATIONS INC. and
B&H JOINT VENTURE and
SEAN BAROWSKI
: IN THE COURT OF COMMON PLEAS
: OF CUMBERLAND COUNTY, PENNSYLVANIA
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V
Petitioner
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98- 1106 Equity
PAUL BEALE and HIS AGENTS
Respondents
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NOTICE TO PLEAD
You have been sued in Court. If you wish to defend against the
olaims set forth in the following pages, you must take aotion
within (20) days after this oomplaint and notioe are served, by
entering a written appearanoe personally or by attorney and filing
in writing with the Court your defenses or objeotions to the olaims
set forth against you. You are warned that if you fail to do so
the oase may prooeed without you and a jUdgment may be entered
against you by the Court without further notioe for any money
olaimed in the oomplaint or for any other olaim or relief requested
by the Plaintiff. You may lose money or property or other rights
important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWl'ER AT ONCE. IF YOU
DO NOT HAVE A LAWl'ER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL
HELP.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania
717-249-3166
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EXHIBIT
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Defendant has failed to give notioe of any violations on the Lease
Agreement to tJle Plaintiff.
WHEREFORE, Plaintiff requests the following relief:
A. Entry of an injunotion pursuant to a separate motion
granting Plaintiff possession of the mentioned premises.
B. Award of damages to Plaintiff as a result of Defendant's
violation of the Lease Agreement.
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Barowski c. '
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Joseph U}' tz
Attorney for Sean
I.D. No. 32958
214 Pine Street
Harrisburg, PA 17101
717-232-0879
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LEA S E
A G R E E MEN T
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THIS LEASE AGREEMENT is made and ente~ed into by and bet~een D.
Paul Beale and Kildred E. Beale, husband and wife, of 4409 Royal Oak
Road, (Hampden To~nship) , Camp Hill, Pennsylvania, he~einafter
~efe~~ed to as .Lesso~, and"13 "& B Joint Venture, a joint ventu~e
o~ganized unde~ the la~s of the Commonwealth of Pennsylvania, having
its office at 3721 Ma~ket St~eet, (Hampden Township), Camp Hill,
Pennsylvania, he~einafter refer~ed to as "Lessee", and is as follows:
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WHEREAS, Lessee is in the business of operating hotels and
restau~ants: and
WHEREAS, Lessee desi~es to lease from Lesso~ a certain tract of
real p~operty as mo~e fully described belolJ, IJith the improvements
thereon erected: and
,
WHEREAS, Lessor eesi~es to lease the said tract of real p~ope~ty
to Lessee under the terms, cone i t ions and p~ov is ions as set out
he::ein:
NOW THEREFORE, fo~ anc in consiee~ation of the premises and .
othet' good and v.aluable consige~ation, the ~eceipt and sufficiency o"f-
\lhich is het'eby ackno\lledged by -both pa~ties, and intending to - be.
legally bound, the pa~ties het'eby agree as follo\ls:
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ARTICLE I
DEMISE OF LEASED PREMISES
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1.01 Leased Premises. Lessor, fo~ and in considet'ation of the
~ents, covenants and conditions het'ein contained to be kept,
performed and observed by Lessee, does lease and demise to Lessee,
and Lessee does rent and accept f~om Lesso'~, the real arid pe~sonal
p~ope~ty, ~efer~ed to he~ein as. "Leased Premises", known as the
Hampton Inn, located at 3721 Market St~eet, (Bampden To~nship), Camp
Hill, Pennsylvania; fu~ther desc~ibed in Exhibit "A", attached he~eto
and inco~po~ated herein by ~eference the~eto, IJhich Leased Premises
shall inc lude the land and all impt'ovem.en ts thereon erected as
desc~ ibed in tha t certain Sher iff '.s Deed to the Lessors ~ecorded in
the Office of the Reco~der of Deeds in and fo~ Cumbe~land County, at
carlisle, Pennsylvania, in Deed Book "C", Volume 25, Page 127, and
which shall include the business known as the Bampton Inn and all
pe~sonal p~operty and fixtures associated there~ith, including the
right to the use of the name Hampton Inn.
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1.02 Lesso~'s Wa~ranty of Title. Lesso~ hereby represents and
wa~~ants that Lessor is the olo'ner in fee simple absolute of the
Leased P~emises subject to covenants, conditions, restrictions,
easements and other matters of reco~d or on the ground.
1.03 Lessor's Warranty o"f Quiet Enjoyment. Lesso~ covenants
and agrees that Lessee on paying the rent and other cha~ges herein
provided for and observing and keeping the covenants, conditions and
terms of this Lease on Lessee I s part to be kept or performed, shall
lawfully and quietly hold, occupy and enjoy the Leased Premises
du~ing the te~m of this Lease vi thout hind~ance or molestation of
Lessor or any pe~son claiming under Lesso~.
1.04 Lessor's Right to Mortgage. Lessor does not have a
current mo~tgage, or other lien, against the Leased Premises. Lesso~
rese~ves the ~ight to encumber the p~ope~ty in any amounts as Lessor
in its sole discretion shall decide. Should Lessor default in making
any payment on any such mo~tgase or encumb~ance, Lessee shall have
the ~ight to make such payment and deduct the amoun~ paid from rent
due o~ to become due unde~ this Lease,
ARTICLE II
LEASE TE~
2 .01 Te~m. The term of this Lease shall be fo~ a pedod of
t~enty (20) years beginning on the I day of /<UO'
1991, Io'hich shall be referred to he~ein as the "Beginning pate".
2.02 Termination options. Lessee may Te~minate this Lease at
the end of the first five years from the Beginning Da~e, and the end
of the second or third five year periods from the Beginning Date, by
sendins ~ritten notice to Lessor of such intention at least ninety
(90) days p~ior to the expiration of said five year period.
2.03
expi~ation of
tenancy shall
conditions of
Bold Over. If Lessee shall hold over after
the Lease Term, Io'ith the consent of the Lessor,
be from month to month on all terms, covenants,
this Lease.
the
such
and
2.04 Lease. Yea~. -The te~m Lease Year shall mean any tlo'elve.
month pe~iod beginning on the Beginning Date o~ an anniversary of the
Beginning Date.
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ARTICLE III
RENT, TAXES, AND UTILITIES
3.01 Kinimum Rent-Initial Five Years. (a) Dut'ing the first
five (5) years of this Lease, Lessee ag~ees to pay to Lesso~ as ~ent
fo~ the Leased Premises the sum of One Hundred Eighty Thousand
( S180, 000.00) Dollars pe~ year; in advance, in monthly installments
of Fifteen Thousand (S15,000.00) Dolla~s each, beginning on the
Beginning Date, and each successive month thereafter, except that Ten
Thousand ($10,000.00) Dollars of the ~ent for the eleventh (11th) and
t~elfth (12th) months of this Lease, (S5,000.00 per month), shall be
?~epaid as p~ovided in section 3.09 of this Lease.
(b) Second, Thi~d, and Fourth Five Year Periods. (1)
On the fi~st day of the sixth Lease Yea~ of this Lease (~hich Lease
'{ea~ shall begin in the calenda~ yea~ 1996), the basic annual ~ent
set fo~th in section 3.01 hereof shall be inc~eased or decreased fo~
the ensuing five year period in the same p~oponion that the
~holesale Price Index figure Indust~ial Commodities (1967=100)
?ublished by the Bureau of Labor Statistics, United Sta:~s De?at':ment
of Labo~, fo~ the month of August 1996, shall have increased or
=ecreased over the said index figu~e fo~ the month of August 1991.
(2) On the first day of- the eleventh Lease '{ea~ of this
~ase '(~hich Lease '{ear shall begil'!:'in 'the. calendar year 2001), the
oasic annual ~ent set fo~th in section 3.01 he~eof shall be increased
or dec~eased for the ensuing five yea~ pe~iod in the same p~oportion
that the said index fo~ the month of August 2001 shall have increased
or dec~eased ove~ the said index figure for the month of August 1996.
(3) On the fi~st day of the sixteenth Lease '{ea~ of this
Lease (lIhich Lease Year shall begin in the calendar year 2006), the
basic annual rent set forth in section 3.01 he~eof shall be increased
o~ dec~eased fo~ the ensuing five yea~ period in the same proportion
that the said index fo~ the month of August 2006 shall have inc~eased
o~ decreased ove~ the said index flgure fo~ the month of August 2001.
(4) The said annual rent as dete~mined above shall then be
divided by tllelve, and the amount shall be paid monthly fo~ the said
five yea~ pe~iod. Bo~ever, in no even t aha 11 the increase in annual
~ent appli'cable to any five year pe~iod -exceed t~enty-five' (25',)
pe~cent and in no event shall the annual ,~ent eve~ be less ,than the
original annual rent.
(5) Lesso~
advance notice of the
the said Index used to
shall give Lessee at least sixty
revised ~ental amount, sho~ing the
a~rive at the nell ~ental amount.
(60) days
levels of
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3.02 Substitute Indicator. If at any time prior to the fi~st
day of the second, thi~d, o~ fou~th five year period" of this Lease
the said Index referred to in section 3.0l(b) of this Lease shall
cease to be published, the~e 15hall be substituted the~efor the most
15imilar economic indicato~ ,t;hell publ i15hed, if any. If Les150r and
Les15ee cannot ag~ee as to such substitute, then the matte~ 15hall be
15ubmitted to arbitration as he~einafte~ p~ovided fo~.
3 .03 Pe~centage Rental. (a) (1) In addi tion to the payment
of the minimum rent as hereinbefo~e pro v ided, Lessee shall pay to
Lesso~ as percentage rental, 7' of the annual g~oss sales made in,
on, o~ f~om the restaurant po~tion of the Premises over $900,000.00.
(2) Fo~ pu~poses of determining percentage rentals unde~
this Lease, the end of an annual periOd and a lease year shall be
deemed to occur each June 30 du~ing the o~iginal term of this Lease
and any ~ene~al term.
(b) Said percentage ~ent for each lease year shall
become due and payable thirty (30) days afte~ the month in ~hich
oross sales exceed the dolla~ amount in section (a) (1) and
thereafte~ shall be paid monthly on all additional gross sales made
during the ~emainder'of. such lease yea~ on all additional gross ~ares
made during. the remaind~~ of such lease yea~. ,Whethe~ !?r_-not'
pe~centage ~ent is due for any-such month, Lessee covenants to suomit
to Lesso~ wi thin thi rty (30) days afte~ the end of eve~y month a
statement setting forth g~oss sales made du~ing such month signed by
Lessee and certified to be complete and correct. Further, Lessee
covenants to submit to Lessor within sixty (60) days after the end of
each lease year, an annual statement setting fo~th gross sales made
du~ing such lease yea~ signed by Lessee and ce~tified to be complete
and co~~ect. Any period of less than tIJelve (12) full months within
the te~m of this Lease shall be adjusted fo~ percentage rent, which
shall be based on the amount I if any, by ....hich the g~oss sales fo~
.!laid p~riod exceeds the p~o-~ata po~tion of the dollar amount in
section (a)( 1) . The pro-~ata po~tion shall be calculated ~i th the
nume~ator 'equal to the numbe~ of days in the said period and the
denominator equal to 365 days times the said dolla~ amount.
(c) .G~oss sales., as ~sed her::ein, sha,ll mean the
amount of sales of all merchandise o~ se~vices sold or rendered in,
'on, about or from the restaurant po~tion of the P~emises by Lessee or
any subtenants, licensees o~ concessionaires. ....hether for cash o~ on
a cha~ge, credit or time basis IJithout ~ese~ve or deduction for
inability or failure to collect, inclUding but not limited to such
rentals, sales and services (1) ~here o~ders o~iginate and/or a~e
accepted by Lessee in the P~emises but delivery or pe~formance
thereof is made from 9~ at any place other than the Premises. (2)
pursuan t to ma il. te legraph, telephone or other s imi lar orders
rece i ved or filed at or in the Premises, (3) by means of mechanica 1
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and othe~ vending machines in o~ on the Premises, (4) ~hich Lessee in
the normal and customary course of business would credit o~ attribute
to its business upon the restau~ant portion of the Premises or any
pa~t o~ pa~ts the~eof. There shall be deductible f~om g~oss sales:
(1) amount of refunds, allowances o~ discounts to customers, p~ovided
they have been included in g~.oss.. sales and provided further that if
such refunds, allowances o~ discounts are in the form of c~edits to
custome~s, such c~edits shall be included in g~oss sales when used,
(2) retu~ns to shippe~s and manufacturers fo~ c~edit, (3) sales of
t~ade fixtures o~ operating equipment afte~ use thereof in the
conduct of Lessee's business in o~ on the Premises, (4) all sums and
credits received in settlement of claims fo~ loss or damage to
me~chandise, (5) amounts of any excise o~ sales tax levied upon
retail sales and payable oVe~ to the approp~iate governmental
autho~ity, provided that specific ~ecord is made at the time of each
sale of the amount of sales tax, and the amount the~eof is exp~essly
cha~ged to the customer.
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(d) Lessee covenants and ag~ees to keep upon the
P~emises at all tiones during the te~m of this Lease, becks and
reco~ds in accordance ~ith generally accepted accounting p~actices of
all business conduc:ec at the P~emises in which shall be ~eco~ded
g~oss sales. The bock~ and reco~ds of account sh~ll also include all
fede~al, -state and lccal tax returns of Lessee .relatinc to Lessee 's
sales, as '\.rell as all pertinent ot'iginal sa"1e;' ~ecorcs ~hich 'shall
include but not be limited to the follolo'ing: (1) daily dated cash
~egiste~ tapes, (2) catec serially numbe~ed sales slips, (3) daily
bank deposit slips. (4) bank statements, Io'hich can be conveniently
seg~ega ted f~om other business ma t tet's of Lessee, (5) set tlemen t
repo~t sheets of t~ansactions with subtenants, concessionai~es, and
licensees, (6) detailed o~iginal ~eco~ds of any exclusions o~
deductions f~om g~oss sales, (7) such other records, if any, which
would normally be examined by an independent accountant pursuant to
accepted auditing standards in pe~fo~ming an audit of Lessee's sales.
Such books and recorcs shall be open to the inspection of Lesso~ and
Lesso~'s duly authorized agents at all ~easonable times du~ing
business hours at any time du~ing the te~m of this Lease and for a
period of at least one (1) yea~ after the te~mination of this Lease.
If Lesso~ should make an audit of Lessee's records and Lessee's g~oss
sales statements should be found to, be unde~stated by mo~e than 1%,
then Lessee in additio'n to paying the pe~centage rentaf'due fo~ such
unde~statement shall pay to Lesso~ the cost of the audit. If any
governmental tax authority shall inc~ease g~oss sales as ~epo~ted by
Lessee on any such tax return aftet' audit, for any lease o~ fiscal
year, o~ any portion thereof, fo~ Io'hich gross sales have been
repo~ted, then the Lessee shall not i fy the Lessor p~ompt1 y of such
inc~ease and pay any acditional pet'centage rental due Lesso~.
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(e) If Lessee shall fail to P~epa~e l.Jd de1!,Jv .......;I{.{;.,'"
the time hereinafter specified any ~tatement of 9~cS'; Sa.Qe., ru;~.<<..
he~eunde~, Lesso~ may elect to trea t Lessee's said -e~ILL.l'c.. 0....."-
bL.each of this Lease, entitling Lessor to te~minate this I,ta.So!..o->-
Lessee's right to possession of the Premises, or both, but only att~
Le~sor has given Lessee notTce- in ~riting as hereinafte~ provided.
If Lessee fails to p~epare and deliver said ~tatement within fifteen
(15) days after receiving said notice, Lesso~ may also, in the
alternative, elect to make an audit of all books and records of
Lessee, including Lessee's bank accounts which in any way pertain to
o~ show gross sales and to p~epare the statement or statements which
Lessee has failed to p~epa~e and de1ive~. Such audit shall be made
and such statement o~ statements shall be p~epared by an accountant
selected by Lesso~. The statement or statements so p~epared shall be
conclusive on Lessee, and the Lessee shall pay on demand all expenses
of such audit and of the p~eparation of any such statements and all
sums as may be sho~n by such audit to be due as pe~centage ~ental.
(f) In computing damages o~ ~ental due under this
Lease the value of pe~centage ~ental for any pe~iod Subsequent to the
te~mination of this Lease or the termination of Lessee 's right of
pOssession shall be an amount pe~ yea~ equal to one thi~d of the
total.. pe~centage ~ent paid by - Lessee for the last -th~ee (3) full
lease yea~s immediately p~ece-9,ing ,such te~mination, and if less than
th~ee (3) full _-yea~s shan have elapsed, sllch value shall be an
amount per year equal to the average yea~ly pe~centage rental
the~etofore paid.
3.04 Lesso~ to Pay Taxes. Lessor ag~ees to pay all ~eal
p~ope~ty taxes, special taxes, or assessments, including st~eet
imp~ovement liens, if any, levied o~ assessed upon o~ against the
Leased P~emises and any imp~ovements o~ fixtures e~ected or situate
the~eon, du~ing the Lease Te~m. Lessee ag~ees to pay all p~operty
taxes on its pe~sonal p~operty located on the Leased P~emises.
3.05 Installment Payment. In the event any special tax or
assessment is levied o~ assessed on the Leased P~emises which becomes
due and payable during, and the delinquency date for which falls
Io'ithin, the Lease re~m, o~ any extension, Io'hich tax or assessment may
be legally paid in installments (whethe~ by subjecting ,the, demised
p~ope~ty to bond or otherwise), Lessee shall have the option' to pay
such tax or assessment in, installments. In the event of stich
election, Lessee shall be liable only fo~ those installments of such
tax o~ assessment vhich become due and payable during, and the
del inc;uency date fo~ Io'hich falls ~i th in, the Lease Term, o~ any
extension. Lessor agrees to execute any instrument that may be
necessa~y to pe~mit the payment of such special tax or assessment in
installments.
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3.06 Excluded Taxes. Lessee shall not be required to pay any
~ranchise, estate, inheritance, succession, capital levy or transfer
~ax of Lessor, o~ any income, excess p~of i ts, or ~evenue tax, or any
~ther tax, assessment, charge or levy upon the ~ent payable by Lessee
Jnde~ this Lease, and all such taxes, assessments, charges and levies
shall be payable by Lessor. Lessor shall not, without consent of
Lessee, do any act which ~i 11 ,c;ause the taxes and assessments on the
~eased Premises to be increased.
3.07 Contest. Lessee shall have the right to contest the
assessment, account or validity of any tax ~hich is Lessee 's
obligation under the terms of this Lease by app~opriate legal
?roceeding:J. Lessor shall, upon ~eGuest, join in any such
oroceedings if Lessee determines that it shall be necessary o~
convenient for Lesso~ to do so in o~de~ for Lessee to prosecute such
proceedings prope~ly.
3.08 Utility Charges. Lessee shall payor cause to be paid
all cha~ges for water, heat. gas, electricity, se~ers. and any and
all other utilities used upon the Leased P~emises throughout the term
of this Lease, including any connection fees.
3. 0 Security Deposit. A secu~ity deposit in'~ "..~, t of
"'en Thousano ,000.00) Dolla~s shall be paid essee to Lessor,
52,500.00 upon exec _ hereof, and 5'"2,5 with each of the _fi~st
three monthly":rease payment . er ~er, for the payment of' rents to
become due to Lessor unde~ 1 s eemen t, and for the fai thful
perfo~mance by Lessee -. all the other 0 _' ations hereunder and fo~
the payment of a and all sums of moneys fo~ Lessee may be or
become lia e~eunder, provided, ho~eve~, that the : security
deposi all be applied to rent due and payable in the e nth
(11 and tIJelfth (12th) months of the fi~st year of this Leas~;nd
ereafte~ there shall be no security deposit. c:;Jt...(5
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ARTICLE IV
USE OF PREMISES
4.01 Permitted Use. Lessee shall have the ~i9ht to use the
Leased Premises fo~ the continuation of the hotel and restaurant and
bar uses fo~ which it is currently being uS,ed, and for any and all
natural extensions or 'renovations of those uses. All uses described
in this section shall be permitted" but none shall be required,
except as set forth in section 4,06 of this Agreement.
4.02 Signs. Lessee shall have the ~ight to erect and maintain
upon the improvements and on the Leased Premises such si9ns as it
deems approp~iate to the conduct of its business. Lessee shall have
no ~ight to erect or maintain any sign used for the purpose of
advertising any business. activity, o~ position other than the
business or businesses o~ Lessee carried on on the Leased Premises.
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4.03 Waste and Nuisance. Lessee shall not commit, o~ suffer
to be committed, any vaste on the Leased Premises or any improvements
erected or situate thereon, no~ shall it maintain, commit, or pe~mit
the maintenance or commission of any nuisAnce on the Leased Premises
o~ use the Leased Premises o~ improvements for any unla~ful purpose.
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4.04 Termination if Use Becomes Unlawful or Impossible. If it
is or becomes unla~ful fo~ Lessee, o~ anyone holding under Lessee
directly o~ indi~ectly, to conduct the business described and
anticipated in section 4.01 of this Agreement on the Leased Premises,
so that it becomes impossible to use the Leased Premises for the
pu~pose described in section 4.01 of this Ag~eement, or such use is
decla~ed unla~ful, then Lessee shall have the right at any time
the~eafte~ to te~minate this Lease by giving Lesso~ one hund~ed
eighty (180) days notice in writing of such termination.
4.05 Rent Abatement if Premises a~e Tempo~a~ily Unusable. If,
as a result of fire, flood, o~ insurrection, the Leased Premises
shall become unusable for Lessee I s pu~poses, from a practical
standpoint, fo~ a pe=ioc of thi~ty (30) consecutive cays or longe~,
then Lessee may, by notice in w~iting from Lessee to Lesso=, at any
time prio~ to the cate ~hen this Lease IJould otherllise terminate,
extend this Lease, ~ithout the requi~ement of the payment of ~ent,-
fo~' the pe~iod of time which, the Leased -Et:emises was unusable from a
pract:ic"al standpoint for the purposes -desc~ibed - in section 4.01 of
this Ag~eement.
4.06 Continuous Use. Should Lessee fail to ope=ate the hotel
o~ restaurant situate on the Leased P~emises fo~ a period of thi~ty
(30) days, unless prevented by damage to the Leased P=e!l1ises, (e. g. ,
by fire o~ flood, repairs, acts of God o~ othe~ causes beyond the
cont~ol of Lessee), then Lessor shall have the option to terminate
this Lease Ag~eement afte~ giving t~enty (20) days ~ritten notice of
its intention to terminate to the Lessee.
4.09 Illegal Activity. Lessee shall not engage in, permit,
nor suffe~ anyone else to permit, any illegal o~ criminal activity or
status to be carried on or exist at the p~emises. Should Lessee not
cease any such i llegal O~ criminal act i v i ty, o~ correct any such
illegal o~ crim,inal status, then Lessee shall be in default and,
Lessor shall be entitled to the remedies set forth at section 11.01
of this Ag~eement upon giving the thirty (30) day notice provided for
the~ein.
4.10 Arbitration. Any dispute betIJeen Lesso~ and Lessee as to
~hat constitutes a permitted o~ p~ohibited use, o~ waste or nuisance,
or cause fo~ termination or ~ent abatement, all as provided in this
Article IV of this Asreement, shall be submitted to arbitration as
he~einafter p~ovidec f6r.
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ARTICLE V
LESSEE IMPROVEMENTS AND PROPERTY
5.01 Ovnership of Lessee Improvements. All fixtures. and any
replacements of existing pe~sonal prope~ty, installed in or placed
upon the Leased Premises by Less-ee, shall be and remain the prope~ty
of Lessee until transfe~~ed to Lesso~ pu~suant to the te~ms of this
Agreement, and pa~ticularly, pursuant to the te~ms of section 12.03
of this Ag~eement. Any pe~sonal property placed in the Leased
p~emises by the Lessee which is not a ~eplacement of existing
personal p~ope~ty shall remain Lessee's p~ope~ty and shall remain so
upon the te~mination of this Lease for any ~eason.
5.02 Lessee' s Mortgage. Lessee ag~ees to execute a mortgage
o~ financ:ng statement in favo~ of Lesso~ in an amount equal to the
total sum expended by Lessee fo~ all alterations. changes and
additions to the Leased premises. The sole purpose of such financing
statement and mo~tgage is to secu~e Lesso~'s inte~est in the event of
execution, levy, bankruptcy or other actions adverse to Lessee o~
Lesso~,
ARTICLE VI
. RIGHT OF rIRST REFUSAL
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6.01 Transfer. In the event of any p~oposed transfer of any
interest in the Leased P~emises by Lesso~, Lessee shall have the
right of fi~st refusal to pu~chase on the same te~ms and conditions
as offe~ed by o~ to the p~oposed t~ansfe~ee, p~ovided. ho~ever, that
this Right of First Refusal shall not apply to any transfer to any
lineal descendant (and spouse of any lineal desc,endant) of the
Lessor. The right of fi~st refusal must be exercised, in ~riting,
within ten (10) business days afte~ receipt of v~itten notices of the
proposed t~ansfe~ (to include all te~ms and conditions thereof and
the identity of the proposed t~'ansfe~ee), with settlement to take
place within ninety (90) days thereafte~. Should any of the terms o~
conditions of any p~oposed t~ansfe~ involve ci~cumstances other than
the amount and timing of moneta~y payments, then Lessee may provide
the reasonable equivalent the~eof in cash.
6.02 Additional Terms. Lessor hereby consents .to the
assignment of this right of fi~st refusal f~om Lessee to one of the
joint venturers of the Lessee. No IJritten notice of a proposed
trans fe~ shall be effect i ve if any of the terms of the proposed
t~ansfe~ shall change. in vhich event, a ne~ notice shall be sent.
No failu~e to exercise the ~ight of fi~st ~efusal shall act as an
election to vaive the right of first ~efusal, o~ right to notice from
Lessor, in the event of any future p~oposed t~ansfer. or in the event
of any change in terms 'of a proposed t~ansfe~.
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ARTICLE VII
REPAIRS AND RESTORATION
7.01 Lessee's Duty to Repair. Lessee, at Lessee's o~n cost
and expense at all times during the term of this Lease, agrees to
keep and maintain; ,or cause t.a be kept and maintained, all buildings
and imp~ovements e~ected Upon the Leased Premises in a good state of
appea~ance and repair, ~easonable ~ea~ and tear excepted, provided,
ho~eve~, that Lesso~ shall be Solely ~esponsible for all parking lot
~epai~s.
7.02 Sixty Pe~cent Damage - Termination Option. If, by fire,
flood, explosion, pUblic enemy, ~iot, civil commotion, or act of God,
the premises du~ing the term shall be damaged in excess of sixty
(60\) pe~cent, this Lease, at the option of Lessee, to be exercised
by notice to Lesso~ in ~riting, shall cease and terminate. The te~m
"damaged in excess of sixty (60\) percent" shall be construed to mean
Such damage to the bUildings 0:: imp::ovements occupied by Lessee
(excluding damage caused solely by water used in extinguishing fire),
as will ~equi~e an ex;>enditure in excess of sixty (60\) pe:-cent of
the ma~ket value (;>rior to t"e damage) of the bUildings or
im;>rovements, in order to make repcirs.
7 :03 Damage Less than Sixty Pe~cen t - Repairs., r f, by fire,
flood,- explosion-, pUblic'enemy, rict, civil commotion, 'or act of God,
the premises du~ing the term shall be damaged to an extent less than
sixty (60\) pe~cent (or in excess of sixty (60\) percent and Lessee
shall not exercise its option to te~minate this Lease) Lessee shall
repai~ (~ith Lessee's funds or any insu~ance funds) the premises ~ith
due diligence, and this Lease shall continue in full force and
effect.
7.04 Inspection by Lesso~. Lessee shall permi t Lessor and its
agents to ente~ into and Upon the Leased Premises and any
improvements e~ected thereon at all ~eascnable times for the purpose
of inspecting the same or for the pU~pose of maintaining or making
~epairs to the imp~ovements ~hich Lesso~ elects to do pursuant to
this A~ticle.
7.05 DeliVery of Prope~ty. I,essee shall, th~oughout the Lease
Te~m, maintain tl1e Leased. Premises and all improvements erected or
situate thereon as provided in section 7.01 of this Agreement and
shall, at the te~mination of this Lease, delive~ up the premises in a
clean and sanita~y condition in substantially the same condition that
existed on the Beginning Date, reasonable ~ear and tear, damage by
the elements, acts of God, war and any act of war excepted, provided,
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ho~eve~, that any insurance p~oceeds for any such casualty not used
to repai~ or ~eplace the Leased Premises o~ improvements shall be
paid ove~ to the Lesso~ and Lessee shall be responsbile to Lessor for _-
any deficiencies in insu~ance o~ lack of cove~age or deductible.
7.06 Lessor's Right to Repair. In the event Lessee should
neglect to reasonably maintain the Leased P~emises and all
improvements erected or situate the~eon, Lessor shall have the right,
but not the obligation, to cause repairs or cor~ections to be made,
and any reasonable costs the~efo~ shall be payable by Lessee to
,'Lessor as additional rental on the next monthly rental payment due
after notice f~om Lesso~ to Lessee of the cost of such ~epairs o~
corrections, p~ovided, ho~ever, that p~ior to making or causing to be
made any such ~epai~s, maintenance, or co~rections, Lesso~ shall give
Lessee thirty (30) days ~~itten notice, within vhich time Lessee
shall have the opportunity to pe~form such repai~s, maintenance, o~
correct ions, o~ object to the necess i ty of des irability of such
repai~s, maintenance or coc-~ections. and if Lesso~ and Lessee shall
be unable to ag~ee on the extent of ~epai~s, maintenance. o~
co~~ections to be mace, if any, within thirty (30) days fo!lo~ing
notice of such objection, then the dispute shall be submit~ed to
a~bitration as p~ovided in section 7.07 of this Ag~eement.
,7.07 Arbitration.. Any dispute betIJeen ~esso~ and
Yhat constitutes. sufficient ~epaic- and maintenance shall
to arbitration as hec-einafter p~ovided fo~.
Lessee _-as. to
be submitted
ARTICLE VIII
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KECBANIC'S LIENS
8.01 Prohibition of Liens on Fee or Leasehold Interest.
Lessee shall not suffe~ or pe~mit any mechanic's liens o~ othec- liens
to be filed against the fee of the Leased P~emises nor against
Lessee' s leasehold interest in the Leased Premises, by reason of any
work, labo~, services or materials supplied o~ claimed to have been
supplied to Lessee or anyone holding the Leased P~emises or any part
thereof through or under Lessee.
8.02 Removal of Lien~ by. Lessee. If any such mechanic's liens
o~ mate~ialman's lien shall be recorded against the Leased Premises,.
or any imp~ovements thereof, Lesse'e shall cause the same to be
~emoved o~, in the alte~native, if Lessee in good faith desires to
contest the same, Lessee shall be privileged to do so but in such
case Lessee he~eby agrees to insure, defend, indemnify and save
Lesso~ harmless from all liability for damages occasioned thec-eby and
shall, in the event of a judgmen t of fo~eclosu~e upon said mechanic's
lien, cause the same, to be discha~ged and ~emoved p~ior to the
execution of such judgment.
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ARTICLE IX
CONDEKNATION
9.01 Interests of part.ieo on Condemnation. In the event the
Leased Premises or any pa~t thereof shall be taken fo~ public
pu~poses by condemnation as a result of any action or proceeding in
eminent domain, or shall be transfe~~ed in lieu of condemnation to
any authority entitled to exe~cise the powe~ of eminent domain, the
interests of Lessor and Lessee in the award o~ consideration for such
transfer and the effect of the taking o~ t~ansfe~ upon this Lease
shall be as p~ovided by this Article.
9.02 Total Taking - Termination. In the event the enti~e
Leased P~emises is taken o~ so t~ansfe~red, this Lease and all of the
~ight, title, and interest the~eunde~ shall cease on the date title
to such Leased Premises vests in the condemning authority, and the
proceeds of such condemnation shall be divided as follo~s:
(a) Lesse~ shall ~ece i ve any and all a....a:-ds for the
unexpi~ed Lease Te:-m, plus moving expenses, and any othet' sums to
which a Lessee would be pt'ope~ly and lalo'fully entitled (except any
a~a~ds,o~"proceeds allocated pu~suant to sub-section (b) hereafter).
(b'i Lessot' shall r"ece i ve all of the - sa"id. othe::- condemnat ion
,
proceeds.
9.03 Partial Taking - Condemnation. In the event of ,the
taking o~ transfer of only a pa~t of the Leased P~emises leaving the
remainde~ of the premises in such location, or in such form, shape,
or reduced size as to be not effectively and p~acticably usable fo~
the pu~pose of operation thereon of Lessee's business, this Lease and
all right, title, and interest the~eunder s.hall cease on the date
title to the Land or the porticm thereof so taken o~ t~ansfe~red
vests in the condemning autho~ity. On or before the date of said
vest ing in the condemning autho~i ty, Lessee shall notify Lesso~ that
it conside~s the partial taking to rende~ the Leased Premises
practicably unusable in its opinion and that it will consider the
Lease to be terminated upon said vesting. Should Lesso~ disagree
with Lessee's determination that the' taking renders tile Leased
Premises practicably unusable, [.esso~ shall in tu~n notify Lessee
wi th in twenty (20) 'days of receipt of Lessee's notice and thereafte~
the matte~ may be submitted by eithe~ of the pa~ties to a~bit~ation
as hereinafte~ provided. The p~oceeds of such condemnation shall be
divided acco~ding to the provisions of section 9.02 of this Lease.
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9.04
the event
Premises,
in such
Partial Taking - continuation with Rent Abatement. In
of a taking ot' transfer of only a part of the Leased
leaving the t'emainder of the p~emises in such location and
form, shape. or size as to be used effectively and
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practicably in the opinion of the Lessee fo~ the purpose of operation
the~eon of Lessee's business, this Lease shall te~minate and end as
to the po~tion of the p~emises so taken o~ t~ansfer~ed as of the date
title to such po~tion vests in the condemning authority, but shall
continue in full force and effect as to the po~tion of the Leased
Premises not 110 taken o~ t~anGfe~red. From and after lIuch date, the
rental required to be paid by Lessee to Lellso~ shall be reduced in
the p~oportion to which the value of the a~ea and improvements so
taken or t~ansfe~red bea~s to the total value of the area and
imp~ovements of the Leased P~emises and easement a~ea. The proceeds
of such condemnation llhall be divided according to the p~ovisions of
section 9.02 of this Lease.
9.05 Voluntary Conveyance. A vol un ta~y conveyance by Lessor
to a public utility, agency, o~ autho~ity unde~ th~eat of a taking
unde~ the po~er of eminent domain in lieu of fo~mal proceedings shall
be deemed a taking ~ithin the meaning of this A~ticle IX.
9.06 Arbit~ation. If any condemnation a~ard does not
distinguish bet~een the classes of prope~ty and interests as
described in section 9.02 of this Ag~eement, the parties shall
negotiate and ag~ee as to such allocation and, fuiling such agreement
IJithin forty-five (45) days, the matte~ shall be submitted t_o
arbit~ation. __
ARTICLE X
ASSIGNMENT AND SOB LEASE
10.01 Consent of Lesso~ Required. Lessee, or any subsequent
Lessee, may assign, convey o~ t~ansfe~ Lessee I s interest in this
Lease and the leasehold estate created he~eby, or a portion of said
inte~est, only ~ith the ~~itten consent of Lessor to such assignment.
ARTICLE XI
DEFAULT AND REMEDIES '.".............
11.01 Default by Lessee. If Lessee shall a1101l.---!!.D.Y~1y
rent.to be in a~~ears for a period of th i r,t;:.y (30) daYU-f!:er ~ri tt1!fi">-----,
,:"'not"i'2e=::f,131I1L-Lesso,~ o~ shall remai-n--i-n~efault under ~
conditiglL~o.f_,this'--L.!la,s_e _ for. ,a pe.~,;od Of_thirty ;n'O/~ays, afr::er
vritten notice f~om Lessot.,:...or".should.__any,- othe~ Pers,on, than Lessee
secu~e posses6i6n~of the __p~mises, or anYI"artth~~,eof, by operation---
of' .law in any manner whatsoeve~1 roessor may at its opt'ion, without
notice, o~ fu~ther n.12tice, to .Lessee:
damages
(a) termina te
as provided for. in this
this Lease and ~ecove~ from Less~'
section 11.01 of this Agreement: or"
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(b)
Lease and recover
damages, including
continue to hold the Lessee obligated to this
by suit o~ otherwise from the Lessee any and all
all rent due fo~ the remainde~ of the Term: or
(c) enter upon the Leased Premises and any
improvements erected or si tua te thereon to cause repairs or
corrections to be made, or co~~ect o~ rectify any breach, and any
reasonable costs therefore shall be payable by Lessee to Lessor as
additional rental on the next monthly ~ental payment due afte~ notice
from Lessor to Lessee of the cost of such actions: or
(d) otherwise satisfy the b~each of Lessee's duty o~
obligation by the payment of money due o~ the taking of action and
any reasonable costs thereof shall be payable by Lessee to Lesso~ as
additional ~ental on the nex: monthly ~ental payment due after notice
from Lessor to Lessee of the cost of such actions: o~
(e) re-en:er and take possession of said premises and
remove all persons and prope~ty' the~,e,f~om, without being deemed
guilty of any manner of,-trespass, and ~elet the p~emises or any pa~t
the~eof, fo~ all or any part of the"r;'!l.ID,ain'cfer_,of said term. to a
party satisfactory-to' Lessor, and at such monthly ren:al as Lesso~
may with ~eas,onable diligence be able to" secure. _S"n,o.uld Lesso~ be
unable to rljfl~t-- after' reasO,niLb_fe-:_~e-t~o~ts_to do sQ...., or should such
'monthly ~ental:-be less'''than the ~ental Lessee ~'as 'obligated to pa'y
unde~ this Lease, plus the expense of reletting, then Lessee shall
pay ~he amount of such deficiency to Lesso~: o~
(f) avail itself of any othe~ ~emedy at la~ or equity.
The said rights and remedies of Lessor shall be cumulative and not in
the alte~native. Lessor shall have the right to effect the ~emedies
set fo~th in sub-section (c) and (d) of this section 11.01 of this
Lease upon less than thirty (30), days notice if a sho~ter period is
requi~ed so as to prevent i~~eparable inju~y to the Leased Premises
or the motel and restaurant business conducted thereon.
11.02 Landlord's Lien-Sale of Lessee's Prope~ty. It is
exp~essly agreed that in the event of default by Lessee hereunde~,
Lesso~'shall have a lien o~ all goods, chattels, or personal property
of any desc~iption belonging to Lessee o~ to eithe~ joint venture~ of,
Lessee Io'hich are placed in, o~ become a pa~t of, the Leased premises,
as securi ty for rent due and to become due for the remainder of the
then current Lease Term, which lien shall not be in lieu of or in any
Io'ay a ffect the statutory Lessor's lien given by la", but shall be
cumulative the~eto: and Lessee hereby g~ants to lessor a secu~ity
interest in all such personal p~operty placed in or on said Leased
Premises for such purposes, p~ovided, ho"ever, that no secu~ity
interest o~ Financinc S:atement shall be filed nor shall such lien be
perfected in any manner, until default by Lessee and thirty (30) days
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w~itten notice from Lessor to Lessee of Lesso~ls intent to so file or
perfect. This shall not prevent the sale by Lessee of any
merchandise or invento~y in the ordinary cou~se of business f~ee of
such lien to Lessor. In the eVent Lessor eXe~cises the option
provided in sub-sections (a), (b), (e), or (f) of section 11.01 of
this Agreement, then Lesso~ may. take possession of all of Lessee's
P~operty and the p~ope~ty of either jOint ventu~e~ of Lessee on the
Leased Premises and sell same at pUblic or private sale after giving
Lessee reasonable notice of the time and place of any public sale o~
of the time afte~ IIhich any p~ i va te sale is to be made, fo~ cash o~
on credi t, o~ for such p~ices and te~ms as Lesso~ deems best, wi th or
without having the p~operty P~esent at such sale. The p~oceeds of
such sale shall be applied first to the necessary and proper expense
of ~emoving, sto~ing, and selling such P~ope~ty, then to the payment
of any ~ent due o~ to become due under this Lease, or any damages as
calculated unde~ sections 11.01 o~ 11.02 of this Ag~eement, ~ith the
balance, if any, to be paid to Lessee. The P~o'lisicns of this
section shall not prevent, no~ shall they P~ohibit, the Lessee o~ its
Ope~ation Manage~ frcm disposing of any assets free and clear of any
lien p~ovidec'! fo~ in this section, until such time as the said lien
should be pe~fected.
11.03 Remedies Cumulative. All rights and remedies 'of' Lesso~
unde~. this- Lease shall be cumula!;ive,. and none shall exclude- any
othe~ right o~ ~e!Dedy at law. - Such rIghts and remedies may be
eXe~cised and enforced concur~ently and whenever and as often as
occasion the~efore arises.
11.04
Hi tigation of Damages.
In the event of any default,
Lessee shall be given credit against any damages, for any ~ent
actually received upon the re-~ental of the ~estaurant or hotel, o~
the fair ma~ket ~ental value of the restaurant o~ hotel in the event
that Lesso~ ~esumes ope~ation of one o~ both faCilities.
ARTICLE XII
TERMINATION AND SURRENDER
12.01 No Right to Terminate. Neither Lessor nor Lessee shall
have the right tc;> terminate this Lease fo~ any ~eason during the
L~ase Te~m' except as specifically p~ovided i:n this Agreement.
12.02 Automatic Termination. This Lease shall automatically
te~minate at the end of the Lease Te~m or any five year period if
Lessee has exercised its option to te~minate the Lease pursuant to
section 2.02 of this Ag~eement.
12. 03 SUrrende~ of Possession. Unless othe::\dse mutually
ag~eed in l.I~iting by the pa~ties p~io~ to the termination of the
Lease, eithe~ PU~suant to section 12.02 o~ any option expressly
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p~ovided for in this Agreement, Lessee agrees to redeliver possession
of the Leased P~emises, and the imp~ovements, fixtu~es and property
the~eon which are to become the prope~ty of the Lesso~ PU~suant to
section 5.01 of this Agreement, in sUbstantially the same condition
that existed on the Beginning Date, reasonable wear and tear, damage
by the elements, acts of God, war and any act of wa~ excepted, all as
p~ovided in section 7.05 of this Ag~eement.
12.04 Other Acts and Effects of Termin~tion. Upon te~mination:
(a) If applicable, all financing statements and
mortgages executed by Lessor or Lessee shall be satisfied, terminated
and ~eleased in full by Lessee:
(b) This Ag~eement shall be of no furthe~ force and
effect except as to those ~igh ts, obl iga t ions and remedies as may
have a~isen p~io~ to te~mination o~ ~hich may a~ise thereafter as a
result of acts or events occu~~ing prio~ to te~mination.
ARTICLE XIII
WARRANTIES, INDEMNITY, LIABILITY' INSURANCE
13.01 Indeii'Ln.ity, of Lesso~. Lessee agrees to insure, de.fend,
indenjnify and notd LesS'O~ ha~mIess against any and all claims,
demands, damages, costs and expenses, including atto~ney's fees for
the defense thereof, a~ising f~om the conduct or management of
Lessee I s bus iness at the Leased Premises, o~ from any b~each on the
pa~t of ::'essee of any conditions of this Lease, o~ condition c~eated
by the Lessee, or f~om any act o~ negligence of Lessee, its agents,
cont~acto~s, employees, subtenants, concessionai~es, o~ licensees in
or abou t the Leased P~emises, o~ in connection wi th any accident,
pe~sonal inju~y o~ damage to pe~sonal property a~ising from or out of
any occu~~ence in, upon or at tJ:1e Leased Premises during the Lease
Te~m, unless same shall ~esult from negligence on the pa~t of Lessor.
In case of any action or p~oceeding brought against Lessor by ~eason
of any such claim, Lessee, on notice f~om Lessor, Covenants to defend
such action o~ proceeding by Counsel acceptable to Lessor.
. 13.02 Insurance. Lessee' agrees that .at all times during the
Te~m of this Lease o~ any el:tensions, it shall keep in eftect a
policy of public liability and prope~ty damage insu~ance insuring the
demised p~emises against any and all claims of pe~sonal injury o~
p~ope~ty damage, and shall keep in effect liability insurance, Fi~e
Legal Liability Insurance, Imp~ovements and Bette~ments Insurance, in
such amounts as the pa~ties may agree to f~om time to time, or,
failing such ag~eement, in ~easonable amounts dete~mined by
a~bitration. Lessee may, at Lessee's option, obtain and carry any
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other insurance Lessee may deem to be necessa~y or desirable. All
said insu~ance policies shall p~ovide fo~ the payment for any losses
to either Lesso~ or Lessee as thei~ interest may appea~ under this
Lease.
13.03 Insurance-proof o-f Coverage. The original policies may
be retained by the Lessee, but the Lesso~ shall have the right to
inspect and copy any and all such pol ic ies, and Lessee, on demand,
agrees to furnish the Lessor with p~oof of payment of the premium or
premiums on any policies provided fo~ in this Agreement.
13.04 Other Insu~ance.
insurance on any prope~ty o~
Ag~eement IJithout also naming
thei~ interests may appear.
Lessee shall not obtain any othe~
matte~ which is the subject of this
Lesso~ as an additional insured as
13. 05 Insurance-P~otection Against Cancellation. Each
insurance policy provided fo~ in this Ag~ee!l1ent shall exp~essly
p~ovide that the policy shall not be canceled o~ altered ~ithout
thi~ty (30) days prior written notice to all parties having an
inte~est in the coverage.
13 .06 Insurance-Failu~e to Secure. If Lessee at any time
,du~ing the Te~m hereof should fail to secu~e. or maintain- the
_ fo~eg'oing insurance, Lessee shall be in default under the terms"; of
this Agreement, and Lessor shall have the ~ight but not the
obligation, to obtain such insurance in Lessee's name or as the Agent
of the Lessee, and any reasonable costs the~efo~ shall be payable by
Lessee to Lessor as additional rental on the next monthly ~ental
payment due date afte~ notice f~om Lessor to Lessee of the cost of
such insurance.
13.07 Compliance with Insurance Requirelllents. Lessee, at its
sole cost, shall effect compl iance wi th all requests of any fire
insurance carrier of Lessee o~ L.esso~ conce~ning Leased prelllises or
opera t ions modi f ications. All insurance p~oceeds recei ved by any
pa~ty he~eto arising out of damage to the prope~ty shall be utilized
fo~ the p~ompt ~estoration of the p~ope~ty to its pre-existing, or
bette~, condition.
13.06 Representations: L~ssor rep~esents and warrants that the,
real estate and personal prope~ty, utility services and facilities
appu~tenant the~eto are and IJill be adequate, sufficient and in
ope~ating condition for the conduct of both motel and restaurant
ope~ations upon the Leased P~emises and that the~e is no condition
that does o~ will adversely affect the legality of the business to be
conducted o~ impair o~ limit the operation of the business by the
Lessee. As to the electric se~vice, Lesso~ represents and warrants
only that it has been adequate for p~io~ restaurant operations on the
Leased Premises: any additional costs to upg~ade the electric service
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for Lf!ssee's additional requirements shall be the responsibility of
Lessee. Lessor will have a continuing re8ponsibility for damages o~
loss to Lessee arising from latent conditions existing on the Leased
premises and will indemnify, save, hold harmless and defend Lessee
against any 8uch "liability, 10sS1ls o~ damage8.
ARTICLE XIV
ARBITRATION
14.01 Agreement to Submit. In the event Lessor and Lessee
cannot ag~ee on any point in this Lease that is expressly subject to
arbit~ation, or should they he~eafte~ stipulate in ~riting that any
dispute between them be submitted to a~bit~ation, such controve~sy
bet~een the parties involving ~ights and obligations arising unde~
the te~ms of this Agreement shall be subject to arbitration. except
controve~sies involving less than $2,500.00, p~ovided, ho~ever, that
eithe~ pa~ty shall have the right to appeal any arbitration a~ard to
Cou~t. de~. The a~bitration shall comply IJith and be governed by
the provisions of this Agreement and the pennsylvania unifo~m
Arbitration Act, Sections 7301 through 7320 of Title 42 of the
Pennsylvania Consolidated Statutes.
14'.02 Demand fo~ Arbitration. . In the elie.':lt Lessor and Lessee
'cannot agree on any point in-. this Lease that is -expressly subject to
arbit~ation, eithe~ party may make a demand for a~bitration by filing
a demand in w~iting with the othe~.
14.03 Appointment of Arbitrators. The pa~ties may agree on one
arbi t~a to~. Boweve~, if they cannot so agree, three arbitrators
shall be appointed as follo~s: Within tIJenty (20) days of a Demand
fo~ A~bitration, each pa~ty shall name one arbitrator in ~riting and
give notice to the other pa~ty of the name and address of the
arbitrator. In case of the failu~e of eithe~ party he~eto to name an
a~bi tra tor, the other pa~ty shall have the right to apply to the
Court of Common pleas fo~ the County of Cumberland, Pennsylvania, to
appoint an arbitrator to rep~esent the defaulting pa~ty. The t~o
arbi t~a tors thus appointed (in e i the~ manner) shall select and
appoint in w~iting a third a~bit~ator and give written notice to
Lessor anp Lessee, or if within tIJenty (20) days a;ter the
appointment of said second arbitrator, the two a~bitrators shall fail
to appoint a thi~d,' then eithe~ pa~ty he~eto shall have the right to
make application to the Cou~t of Common pleas for the County of
Cumbe~land, Pennsylvania, to appoint such third arbitrator.
14.04 Qualifications of Arbitrators. All of the arbitrato~s
appointed must have no financial o~ pe~sonal interest in the result
of the a~bitration.
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14.05 Vacancies and Substitutions. If an appointed arbitrator
fails to act or is unable to act, the pa~ties may appoint a SUccessor
as follows: whethe~ o~ not a single arbitrator vas chosen initially,
the pa~ties may agree on another single arbitrator: or if the parties
cannot agree on a single arb~~~a~or, the successor shall be appointed
by the pa~ty or by the arbitrato~s who selected the arbitrator who is
no longe~ pa~ticipating. If the method provided in this section
14.05 or section 14.03 of this Ag~eement fails or cannot be follo~ed,
one o~ mo~e a~bit~ato~s may be appointed by II cou~t having
ju~isdiction on application of eithe~ pa~ty.
14.06 Time and Place of Bearing. All a~bitration hearings
conducted under this Ag~eement shall take place in Cumberland County,
Pennsylvania. The a~bit~ators shall set the time and place of the
a~bit~ation headngs and they shall delive~ to each party, by
personal se~vice or ce~tified mail, Io'~itten notice stating the ,time,
location, and subject matter of the a~bit~ation hea~ing.
14.07 Powers of Arbi t~a tors. The a~bi t~a tors shall have the
po~er to: decide all procedural issues: interpret and dete~mine
questions of both la'J and fact: base conclusions on thei~ ~eading of
the Ag~eement: adjourn or pos tpone the hea ~ ing for good cause to a
time not late~ than "the date fo~ making the, alo'a~d unless the pa~ties
consent to !1 later "date: anq I}ea~ and dete~mine the c:.ontrove~sy. 0-0-
the evidence p~esented even though a duly notified pa~ty fails to.
appea~. All pO'Jers of the a~bitrators shall be exercised only by a
majority of the a~bitrato~s.
14.08 Evidence. The a~bitrato~s may issue subpoenas fo~ the
attendance of 'Jitnesses and the production of othe~ evidence, pe~mit
depositions to be taken of Io'itnesses Io'ho cannot be se~ved ~ith a
subpoena or Io'ho cannot attend the hea~ing, and administe~ oaths as
p~ov ided by la.'.
14.09 Avard. The a~bit~ation alo'a~d shall be valid if made by II
majo~ity of the arbit~ators. It shall be in w~iting and signed by
the a~bitrators joining in the alo'a~d. The arbitrators shall delive~
a copy of their a~ard to each pa~ty by the method provided fo~ notice
by one party to anothe~ in this Ag~eement. The a~ard shall be made
within ninety (90) days f~om the date of toe appointment of the' last
a~bitrator unless the parties consent in v~iting to extend this
period before or afte~ it expires. The a'Jard may be confi~med by any
cou~t having jurisdiction on application of either party.
14.10 Ne~ Arbitrators. If the a~bit~ators appointed pU~suant
to section 14.03 of this Ag~eement fail to make an a'Jard 'Jithin
ninety (90) days from the date of the appointment of the last
arbit~ator, they shall ,be discha~ged unless the' parties consent in
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shall be appointed and shall p~oceed
in this Agreement. The p~ocess shall
is made.
arbitrato~s (or an arbitrator)
in the same manner as spec i f i ed
be repeated until a final a~ard
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14.11 Costs of Arbitration. The costs and expenses of
arbitration, including the fees of the arbitrators and any attorney's
!ees, shall be paid by the losing pa~ty o~ by both parties in the
p~opo~tions dete~mined by the arbit~ators in their award.
ARTICLE XV
THIRD PARTY BENEFICIARIES
15.01 No Thi~d Party Beneficiaries. It is the intention of the
parties hereto that no provision of this Lease Agreement shall in any
way inu~e to the benefit of any thi~d person (including the public at
la~ge) so as to constitute any such pe~son a third party beneficia~y
of such Lease Agreement or of any one o~ more of the te,ms the,eof o~
othe~vise give ~ise to any cause of action in any pe,son not a pa~ty
,I to such Agreement. For purposes of this section, the corporations
which constitute B & H Joint Venture shall be considered parties to
this Agreement.
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ARTICLE XVI
GENERAL PROVISIONS
16.01
.ase shall
hough the
tlnditions
Conditions and Covenants. All of the provisions of this
be construed to be "conditions" as well as 'covenants" as
words specifically exp~essing or impa~ting covenants and
we~e used in each sepa~ate p~ovision.
16.02 No Waiver of Breach. No failure by either Lessor o~
".see to insist upon the strict pe~formance by the other of any
e1l1enant, agreement, term, or condi tion of this Lease or to exercise
y right o~ ~emedy consequent upon a b~each thereof, shall
hlltitute a waiver of any such' b~each o~ of such covenant,
~Qement, te~m, or condition. No ~aiver of any breach shall affect
alte~ this Lease, byt each. and every covenant, c?ndition,
~.ement, and term of this Lease shall con tinue in full fo~ce and,
f.ct with respect to any other then existing or subsequent b~each.
Time of Essence. Time is of the essence of this Lease,
p~ovision.
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16.04 computation of Time. Except where this Lease gives a
date upon which an act is to be perfo~med, the time in which any act
provided by this Lease is to be done is computed by excluding the
first day and including the last, unless the last day is a Saturday,
Sunday, o~ legal holiday, an~~hen it is also excluded.
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16 .05 successo~s in Interest. Each and all of the covenants,
conditions, and restrictions in this Lease shall inure to the benefit
of and shall be binding upon the pa~ties hereto and their ~espective
heirs, executors, administrators, legal representatives, successo~s,
assigns, or other successors in interest.
16.06 Entire Agreement. This Lease contains the entire
agreement of the pa~ties ~ith respect to the matters cove~ad by this
Lease, and no other ag~eement, statement, o~ promise made by any
pa~ty, o~ to any employee, office~, o~ agent of any party, ~hich is
not contained in this Lease shall be binding o~ valid.
,
16.07 Partial Invalidity. If any te~m, covenant, condition, or
provision of this Lease is held by a cou~t of compete~~ jurisdiction
to be invalid, void, or unenforceable, the re;;,aincer of the
provisions shall re",ain in full fo~ce and effect and shall in no IJay
be affected, impaired, or invalid~tea.
16.08 Relationship of partle;: Nothing conta'ined in this Lease
shall be deemed or construed by the pa~ties o~ by any third person to
create the relationship of principal and agent or of partnership or
joint ventu~e o~ of any association bet....een Lessor and Lessee, and
neithe~ the method of computation of rent no~ any other p~ovisions
contained in this Lease nor any acts of the pa~ties shall be deemed
to c~eate any relationship between LessO~ and Lessee, other than the
relationship of Lessor and Lessee.
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16.09 Interp~etation of Language. The language in all parts of
this Lease shall in all cases be simply const~ued according to its
fai~ meaning and not strictly fo~ o~ against Lesso~ or Lessee.
16.10 pennsylvania Lav to Apply. This Agreement shall be
construed under and in accordance with the la~s of the Common~ealth
of pennsylvania, and all obligations of the parties created he~eunde~
are pe~formable in cumberland county, pennsylvania.
16.11 Definitions-construction. Unless other~ise provided in
this Lease, or unless the context otherlJise rec;ui~es, the follolJing
definitions and rules of const~uction shall apply to this Lease,
rega~dless of ~hether the te~ms are capitalized o~ not in any given
instance:
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(a) Numbe~ and Gender. In this Lease, the neuter
gender includes the feminine and masculine, and the sin9ula~ number
includell the plural, and the wo~d "pe~son" includes co~poration,
partne~lIhip, firm, O~ allllociation whe~eve~ the context 110 requires.
. .
(b) Mandatory and Permissive.
"agrees" a~e mandatory: "may" is permissive.
"Shall", .~ill., and
(c) Term Includes Extens ions. All references to the
te~m of thin Lease or the Lease Term shall include any extensions of
such'Term.
(d) Land and Premises. Leased P~emilles, Land, or
P~emises shall have one and the same meaning and shall include, vhere
the context so ~equires, the imp~ovements to the Land. In the event
of a pa~tial taking or condemnation, these te~ms shall be redefined
as p~ovided in section 9.07 of this Ag~eement.
(e) Parties. Pa~ties shall include the Lessor and
Lessee named in this Lease and successo~s in interest to them.
(f) Sublessee. As used he~e in, the ~ord "sublessee"
shall mean and incl-ude in addition to a ,sublessee and subtenant, a
licensee, concessionaire, or othe~ occupan~ o~ user of any po~tion ~f
the l:.eased Premrse-s- or building o~. imp~ovements the~eon. -.
16.12 Captions. Captions of the a~ticles, sections, and
parag ~aphs of this Lease are fo~ convenience and referenct! only, and
the \lords contained the~ein shall in no vay be held to explain,
modify, amplify, or aid in the inte~pretation, const~uction, or
meaning of the p~ovisions of this Lease.
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16.13 Attorney's Pees. In the event eithe~ Lessor O~ Lessee
shall b~ing any action or proceeding fo~ damages for an alleged
breach of any p~ovlslon of th is Lease, to recover rents, o~ to
enforce, protect, or establish any right or remedy of eithe~ pa~ty,
the p~evailing pa~ty shall be entitled to ~ecove~ as a part of such
action or proceedings reasonable atto~ney's fees and court costs.
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16.14 Interest. Any sum accruing to Le~so~, or Lessee unde~ the
provisions of this Lease which shal~ not be paid when due IIhall bea~
inte~est at the rate hereinafte~ specified from the dat'e such payment
was first due, until paid. Inte~est shall be at the rate of fifteen
(15\) pe~cent per annum.
16.15 Modification. No amendment, modification, or alteration
of the terms hereof shall be binding unless the same be in ~riting,
dated subsequent to the'date hereof, and duly executed by the parties
hereto.
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16.16 Notices-Method and Time. All not ices, demands, or
requests f~om one pa~ty to another shall be either personally
delive~ed or sent by United States or private mail, certified or
registered, with provision for the execution of a receipt by the
recipient, postage prepaid, t~ the add~e55 stated in section 16.17 of
this Ag~eement and shall be deemed to have been given at the time of
pe~sonal delive~y or at the time of mailing o~ sending. '
16.17 Notices-Add~esses. All notices to be given under this
Ag~eement shall be addressed to the addresses of the parties set
forth in the preamble to this A9~eement, o~ at any othe~ address that
may subsequently be specified by IJritten notice delivered in
acco~dance ~ith section 16.16 he~of. Any assignee or successo~ of
any inte~est in this Lease Ag~eement shall immediately notify the
othe~ pa~ty of its address for the pU~pose of ~eceipt of notice.
16.18 Payment of Rent. All ~ents and othe~ sums payable 'by
Lessee to Lessor shall be by check payable to Lessor, delivered ln
person o~ mailed to Lessor at the address set forth in the preamble.
Lesso~ may at any time change the provisions of this section by
notice to the Lessee.
16.19 Broke~'s Commissions. Each of the pa~ties represents and
-~ar~ants that there a~e no claims fo~ broker's 'commissions or
-{inde~ I s fees ih connection \lith the execut-ion of this Lease, =anc
each of the parties agrees to indemnify the other against all
liabilities arising from any such claim.
16.20 Recording. At the request of e i the~ party, the pa~ties
shall execute, ackno~ledge, and reco~d a memorandum of lease.
Contem?o~aneously ~ith any such memo~andum, Lessee shall prepa~e and
execute an ackno~ledgement of the termination of the Lease, in
reco~dable fo~m, which shall be held by Lesso~ and not ~ecorded until
such time as this Lease is final;J.y dete~mined to be te~minated. The
pa~ty so ~equesting the memo~andum shall bea~ the cost of prepa~ing
~and ~ecorqi~g the same and th~,ack~o\lledgeme~t of the termination.
16.21 Counterpa~ts. This Lease has been executed by the
pa~ties in several counterparts, each of \lhich shall be deemed to be
an o~iginal copy.
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GREAT LOCATIONS. INC,. AND
B&H JOINT VENTURE AND
SEAN BAROWSKI,
Peti tioners
V.
PAUL BEALE AND HIS AGENTS.
Respondents
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
NO. 98-1106 EQUITY
DRDER OF CillJ.RI
AND NOW, this 4th day of March, 1998, this matter
having been called on a hearing for a preliminary injunction,
the matter is taken under advisement. The temporary relief
granted by the order of February 27, 1998, is continued until
the issuance of an order on the relief requested of a
preliminary injunction,
Hubert X, Gilroy, Esquire
For Petitioners
Henry F, Coyne, Esquire
For Respondents
:prs
~ ~ .3/9/98'
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GREAT LOCATIONS,INC, and
B & H JOINT VENTURE and
SEAN BAROWSKI,
Petitioner
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYL VANIA
vs,
: NO, 98-1106 EQUITY
PAUL BEALE and HIS AGENTS,
Respondents
DEFENDANTS' ANSWER TO PETITION TO ADD MILDRED E. BEALE
AS AN ADDITIONAL DEFENDANT
AND NOW COMES Defendants, by his legal counsel, Henry F. Coyne, Esquire, and files the
following Answer:
1. Admitted,
2, Admitted.
3. Denied, Defendant lacks sufficient knOWledge upon which to fonnulate an Answer,
4, Admitted,
5. Denied, It is averred that if Mildred E, Beale is added as an additional Defendant such
action will be very prejudicial to Mildred E, Beale because it would expose any jointly held property with
Defendant to be subject to execution in satisfaction of any award of damages, By way of further answer, it
is averred the Plaintiff file two (2) Complaints in this Action and neglected to designate Mildred E, Beale
as an additional Defendant in each Complaint, Further, on March 4, 1998, the Court held an extensive
hearing on this Action and Plaintiff, at the hearing, made no motion or effort to add Mildred E. Beale as an
additional Defendant, Finally the avennent that Mildred E, Beale is a lessor without allegations in
pleadings or testimony of her participated on the participation of an agcnt lcgally acting on her behalf is
legally insufficicnt to include Mildrcd E, Bcale as a Defendant.
WHEREFORE, Defendant prays your Honorablc Court to dcny Plaintiffs' Petition To Add
Dated:-! ~ ~ Il SJ
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Mildred E, Beale as an Additional Defendant.
HENRY F. COYNE, SQUIRE
3901 Market Street
Camp Hill, PA 17011-4227
(717) 737-0464
Pa, S, Ct. No, 06250
Counsel For Paul Beale
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GREAT LOCATIONS INC, and
B & II JOINT VENTURE and
SEAN BAROWSKI,
Petitioner
: IN TilE COURT 011 COMMON PI.EAS OF
: CUMIIEIU.ANU COUNTY,I'ENNSYLVANIA
vs.
: NO, 98-1106 EQUITY
PAUL BEALE and HIS AGENTS,
Respondents
NOTICE
YOU HAVE BEEN SUED IN COURT, If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this complaint and notice arc served,
by entering a written appearance personally or by attorney and filing in writing with the court your
defenses or objections to the claims set forth against you. You are warned that if you fail to do so the
case may proceed without you and a judgment may be entered against you by the court without further
notice for any money claimed in the complaint or for any other claim or relief requested by the Plaintiff,
You may lose money or property or other rights important to you,
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YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT
HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET
FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP,
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Court Administrator, Third Floor
Cumberland County Courthouse
Hanover and High Streets
Carlisle, I' A 17013
(717) 240,6200
Dated: tQ L{~9 8"
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4, Denied, It is denied Defendllnt violllted the Lellse Agreement by forcibly tllking
possession of the lellsed premises IInd ellusing dllmllges 10 I'llIintiff. By WilY of further Answer, it is
IIverred I'llIintiffs ell used events of defllult to occur which eulminllted in terminlltion of the Lellse
Agreementllnd Joint Venture Agreement,
S. I'ursuantto a Court Order, dated February 27, 1998, Defendant returned possession of
the premises to Great Location, Ine, and B & H Joint Venture, The said action was performed in
response to an Ex Parte Preliminary Injunction which thc Court Ordcr granted,
6. Dcnied, Defendant gave notice of numcrous even Is to default Great Locations, Inc,
which is a joint venturer in B & H Joint Venture as well as to legal counsel for Great Location, Inc.
WHEREFORE, Defendant prays your Honorable Court to dissolve its Preliminary Injunction;
deny Plaintiffs possession of premises owned by Defendant and terminate the said Lease Agreement and
Joint Venture Agreement.
DEFENDANT'S ANSWER TO PLAINTIFF'S MOTION FOR IN.JUNCTION
I. Defendants' Answer to Plaintiffs Complaint, paragraphs No, I through 6 arc
incorporated herein by reference,
2. Denied, It is denied Plaintiffs suffered irreparable harm and severe loss of business,
goodwill and monetary gain, By way of further answer, it is averred Plaintiffs continued to operate
Kokomo's from February 27, 1998 to date, Proofofloss is demanded at trial.
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3. Denied, By way of answer to a Preliminary Injonetion, Defendant prays your Honorable
Court to deny Plainlifrs a Preliminary Injunction to restore the status quo; reinstate Defendants to
possession of real estate known as Kokomo's and situate at 3721 Market Street, Hampden Township,
Cumberland County, Pennsylvania, because Plaintiffs caused to occur many events of default as it
pertains to the said Lease Agreement and Joint Venture Agreement.
WHEREFORE, for the reasons stated above, Defendants pray your Honorable Court to deny
Plaintifrs request for a Preliminary Injunction, and return possession of the premises to Defendant.
DEFENDANTS' NEW MA TIER AND EOUlT ABLE DEFENSE ASSERTED
IN RESPONSE TO PLAINTIFF'S COMPLAINT
AND NOW COMES Defendant, Paul Beale, by his counsel and asserts the following
affinnative defenses in accordance w/Pa, R,C,P. 1030 as \Veil as other equitable defenses,
I. A Lease Agreement, dated September 5, 1991, and referred to as Exhibit "A" in
Plaintifrs Complaint For Injunctive Relief is incorporated herein.
2. A Joint Venture Agreement, dated July 22, 1991, between Beale Enterprises, Ine, and
Club Management, Ine, is allaehed hereto and marked as Exhibit "13".
3, An Assignment of Joint Venture Interest, dated October 10, 1993, between Club
Management, Inc. and Great Location, Jne, is attached hereto and marked as Exhibit "C",
4, Defendant avers that Plaintiff, Great Locations, Inc., eommilled certain events of default
to occur pertaining to said Lease, namely:
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Defendant, in order 10 proteel his interesls, engaged the professional services of
the Law Firm of Rhoads and Sinon, As the result of such litigation, my clients
incurred expenses for legal fees in the amount of $6,462.17 which my clients
paid in full, Despite numerous demands by Lessors, you refuse to reimburse
Lessor the sum of Six Thousand Dollars ($6,000,00) they expended which is in
violation of Article XVI, General Provisions, paragraph 16,13 of said Agreement
of Lease and is an event of default,
g, Under Article XVI, General Provisions, paragraph 16,13 of said Agreement of
Lease, you arc responsible for legal fees incurred by Lessor for the professional
services of Henry F. Coyne in order to address the events of default which Great
Location, Ine, caused and i~ involved in this litigation,
5, Defendant avers that Plaintiff, Great Location, Ine, committed certain events pertaining
to said Joint Venture Agreement and Ass!l!"w'~nt of Joint Venture Interest, namely:
a, Mr, Donald J..., Brown as a stockholder, director and officer of Great Location,
Ine, elected not to manage the restaurant portion of the premises and took action
to attempt to transfer his interest in Great Location, Ine, and in Ihe Joint Venture
to Mr, Sean Barowski as per public notice and application to PLCB to
accomplish such transfer. Such proposed action is in violation of paragraph 14
of said Joint Venture Agreement and is an event of default,
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Greal Location, Ine, did not pay to Hampden Township the Sewer Rental for the
months of October, November and December, 1997 for the sum of Four
Thousand One Hundred Ninety-nine and 06/100 Dollars ($4,199,06) plus
penally which is in violation of paragraph 15 of said Joint Venture Agreement
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and is an event of default,
c,
Great Location, Inc. did not pay Hampden Township for additional Equivalent
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Dwclling Units (E,D.U, 's) as the result of increased water consumption, The
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principal sum of E1cven Thousand Ninc Hundred Dollars ($11,900.00) is due
Hampden Township and remains unpaid which is in violation of paragraph 15 of
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said Joint Venture Agreement and is an event of default,
d,
As a result of Great Location, Ine, 's operation of the Kokomo's Restaurant, it
caused a civil lawsuit to be filed against my clients which is captioned s follows:
Event Entertainment vs, B & H Joint Venture tla Hampton Inn
and Don Brown, Jr. and Bealc Enterprises, Ine, and D, Paul
Beale and Hench Enterprises and Jack K, Hench, individually
and as principal owners ofB & H Joint Venture tla Hampton Inn
et al; U,S, District Court, Eastern District of Pennsylvania, Civil
Action No, 1:97-CV-3288,
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Eventually the case was transferred to the U,S, Middle District Court and
indexed as follows:
Event Entertainment vs, B & H Joint Venture tla Hampton Inn
and Don Brown, Jr, and Beale Enterprises, Inc, and D, Paul
Beale and Hench Enterprises and Jack K, Hench, individually
and as principal owners of B & H Joint Venture tla Hampton Inn
et al; U,S. District Court, Middle District of Pennsylvania; Civil
Action No, 1:97-CV,OI630 (Chief Judge Rambo),
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Entertainment the sum of Two Thousand Five Hundred Dollars ($2,500,00).
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The litigation was concluded by Great Location, Ine, paying to Event
Defendant, in order to protect his interests, engaged the professional services of
the Law Finn of Rhoads and Sinon, As the result of such litigation, my clicnts
incurred expenses for legal fees in the amount of $6,462.17 which my clients
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paid in full. Despite numerous demands by Lessors, you refuse to reimburse
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Lessor the sum of Six Thousand Dollars ($6,000,00) they expended which is in
violation of paragraph I of said Joint Venture Agreement and is an event of
default.
g.
Under paragraph 19 of said Joint Venture Agreement, Great Location, Inc. is
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responsible for legal fees incurred by Lessor for the professional services of
Henry F, Coyne in order to address the events of default which Great Location,
Inc. caused and is involved in this litigation,
6. Defendant's counsel, by memo, dated January 28, 1998, advised Great Location, Inc. and
its legal counsel, Attorney Chernicoff, of the events of default, noted above, The said memo is" attached
hereto and incorporated herein by reference, (See Exhibit "D")
7, The efforts by Plaintiffs to seek a temporary injunction as well as a pennanent injunetion
are illegal and void due to the events of default, noted above,
8, Due to the events of default, noted above, Defendant has the license, privilege and
authority under Article XI of the Lease to take appropriate action to resume possession and control of
Kokomo's,
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15. The Plaintifrs demand for damages is vague IInd is not in compliance with the Rules of
Procedure and should be stricken,
(}~F~NDANTS' COI1NT~ltCI,AIM AGAINST I'I,AINTIFFS
IN ACCOR(}ANC~ WITIII'A. R.C.I'. 1031
16, Defendants' IIverments contained in Defendants' Answer and Ncw Matter and Equitable
Defense, paragruphs I to 15, arc ineorporuted herein,
17, In vicw of the events of default Delendant avers the Plaintiffs owe him for:
II. Legal services provided by Rhoads and Sinon for defense in the litigation recited
in parugruph 4(1) and 5(d) abovc, 111e amount of fees for professional services is
Six Thousand Four Hundrcd Sixty,two and 17/1 00 Dollars ($6,462.17),
b,
Rcnt due Defendant on percentage of gross sales,
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c, Delinquent sewer rental in the amount of Four Thousand One Hundred Ninety-
nine and 06/100 Dollars ($4,199,06) for which Defendant's premises con be
exposed to 0 municipal lien,
d, Delinquent EDU's in the amount of $11,900.00 for use of water beyond the
established number of EDU's for sewage treatment for which Defendant's
premises can be exposed to a municipal lien,
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Counsel fee which Defendant incurred for legal services in this action.
f.
Other damages which :he Court may deem appropriate,
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17. The Defendanls arc in violation oflhe Agreel11enlof l.ease lInd Joinl Yenture Agreement
and therefore Ihe Court is justified in directing dissolution of the I'relil11inury Injunction; terminulion of
Ihe l.euse Agreement und Joint Yenlure Agreemenlund directing possession of Kokomo's be returned to
Defendant.
WHEREFORE, Defendant prays for monetary damuges as reflected in puragraph 16 ubove and
dissolution of the Preliminary Injunction; termination of the Lease Agreement and Joint Yenlure
Agreement and return Kokomo's to the possession of Defendant.
Dated: ,TtJ 4 ~ 9 8'
HENRY F, COYNE, 'S UlRE
390/ Market Street
CampHill,l'A 17011,4227
(7/7) 737,0464
I'a, S, Ct, No, 06250
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VERIFICATION
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The factp set forth in the foregoing are true and
correct to the best of the undersigned's knowledge,
information and belief and are verified subject to the
penalties for unsworn falsification to authorities under 18
Pa. C.S.A. Section 4904.
Dated: ."3/'1/113
P,YaAJlr:? o/~~
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PAUL BEALE
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LEA S E
A G R E E MEN T
THIS LEASE AGREEMENT is made and ente~ed into by and between D.
Paul Beale and Kild~ed E. Beale, husband and wi fe, of 4409 Royal Oak
Road, (Hampden Township), Camp Hill, Pennsylvania, he~einafter
refe~~ed to as "Lessor, and B & B Joint Venture, a joint venture
organized unde~ the la~s of the Common~ealth of Pennsylvania, having
its office at 3721 Market St~Elet, (Hampden To~nship), Camp Hill,
Pennsylvania, he~einafter refe~~ed to as "Lessee", and is as follows:
WHEREAS, Lessee is in the business of ope~ating hotels and
restaurants: and
WHEREAS, Lessee desires to leaso f~om Lesso~ a certain tract of
~eal prope~ty as more fully desc~ibod belolo', ~ith the imp~ovements
thereon erected: and
WHEREAS, Lessor des i res to lease the sa id t~act of ~eal prope~ty
to Lessee under the tet'ms, conditions and p~ovisions as set out
he~ein:
NOW THEREFORE, for arid in conside~ation of the premises and -
othe~ good and v.aluable consige~ation, ,the receipt and sufficiency o-f-
which is hereby ackno~ledged by -both pa~ties, and intending to - be-
legally bound, the parties hereby ag~ee as follows:
ARTICLE I
DEMISE OF LEASED PREMI~P.S
1.01 Leased Premises. Lesso~, fo~ and in considet'ation of the
rents, covenants and conditions he~ein contained to be kept,
pe~fo~med and observed by Lessee, does lea~e and demise to Lessee,
and Lessee does rent and accept f~om Lesso~, the ~eal arid personal
prope~ty, refe~~ed to here in as "Leased P~emises", known as the
Hampton Inn, located at 3721 Ma~ket St~eet, (Hampden Township), Camp
Hill, Pennsylvania, further desc~ ibed in Exhibi t "A", att~ched hereto
and incorporated herein by refe~ence the~eto, which Leased P~emises
shall include the land and all imp~ovel\lentD thereon erected as
described in that cet'tain Sheriff '.s Deed to the Lessors ~eco~ded in
the Office of the Recot'der of Deeds in and fo~ cumbe~land County, at
Ca~l is le, Pennsylvania, in Deed Book "C", Volume 25, Page 127, and
Io'hich shall include the business knolo'n as the Hampton Inn and all
pe~sonal p~ope~ty and fixtures associated the~ewith, including the
right to the use of the name Hampton Inn.
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1.02 Lessor's Warranty of Title. Lesso~ hereby represents and
wa~~ants that Lessor is the oIJne~ in fee simple absolute of the
Leased P~emises subject to covenants, conditions, rest~ictions,
easements and othe~ matters of ~eco~d or on the g~ound.
1.03 Lessor's Warranty of Quiet Enjoyment. Lesso~ covenants
and agrees that Lessee on paying the rent and other cha~ges herein
p~ovided for and observing and keeping the covenants, conditions and
te~ms of this Lease on Lessee I s pa~t to be kept o~ pp.~formed, shall
lalJfully and quietly hold, occupy and enjoy the Leased P~emises
du~ing the te~m of this Lease wi thout hind~ance o~ molestation of
Lessor or any pe~son claiming under Lesso~.
1.04 Lesso~'s Right to Mortgage. Lesso~ does not have a
cU~rent mo~tgage, o~ othe~ lien, against the Leased Premises. Lessor
~eserves the right to encumbe~ the p~ope~ty in any amounts as Lessor
in its sole disc~etion shall decide. Should Lesso~ default in making
any payment on any such mOt'tgage o~ encumb~ance, Lessee shall have
the right to make such payment and deduct the amount paid f~om rent
due or to become due under this Lease.
ARTICLE II
LEASE TER!!
2.01 Term. The tet'm of this Lease shall b'e for a pedod of
tIJenty (20) yea~s beginning on the { day of Au 0' ,
1991, which shall be ~efe~red to herein as the "Beginning pate".
2.02 Termination Options. Lessee may Terminate this Lease at
the end of the fi~st five yea~s from the Beginning Date, and the end
of the second or thi~d five year pe~iods f~om the Beginning Date, by
sending IJritten notice to Lesso~ of such intention at least ninety
(90) days p~io~ to the expi~ation of said five yea~ period.
2.03 Bold Over. If Lessee shall hold ove~ afte~ the
expiration of the, Lease Te~m, IJith the consent of the Lesso~, such
tenancy shall be f~om month to month on all te~ms, covenants, an~
conditions of this Lease.
2.04 Lease, Year. '.The term Lease Year shall mean any twelve.
month period beginning on the Beginning Date or an annive~sary of the
Beg inning Date.
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ARTICr.E III
RENT, TAXES, AND UTILITIES
3.01 Kinimum Rent-InitiOl rivo Yoorn. (a) During the fi~st
five (5) yea~s of th is Leose, LOll800 og roes to pay to Lesso~ as ~ent
fo~ the Leased Premi:les tho 8Um of One Hund~ed Eighty Thousand
($180,000.00) Dollars per year, in advance, in monthly installments
of Fifteen Thousand ($15,000.00) Dolla~s each, beginning on the
Beginning Date, and each auccessive month the~eafter, except that Ten
Thousand ($10,000.00) Dollors of tho ~ent fo~ the eleventh (11th) and
tlo'elfth (12th) months of this Lease, ($5,000.00 per month), shall be
p~epaid as p~ovided in section 3.09 of this Lease.
(b) Second, Thi~d, and Fourth Five Yea~ Periods. (1)
On the fi~st day of the /Sixth Lease Yea~ of this Lease (~hich Lease
Yea~ shall begin in the ca1enda~ year 1996), the basic annual ~ent
set forth in section 3.01 hereof shall be inc~eased or decreased fo~
the ensuing five year pet'iod in the same p~opo~tion that the
Wholesale Price Index figure Ind\lst~ial Commodities (1967=100)
published by the BU~eau of Labor Statistics, United States Department
of r.abo~, fo~ tho month of August 1996, shall have inc:-eased o~
dec~eased ove~ the said index figu~e fo~ the month of August 1991.
(2) On the first day of. the eleventh Lease Year of this
L.ease "(which Lease Year shall begil'l:'in 'the, calenda~ year 2001), the
basic annual ~ent set forth in section 3.01 he~eof shall be increased
o~ dec~eased fo~ the ensuing five yea~ pe~iod in the same propo~tion
that the said index for the month of August 2001 shall have increased
o~ decreased over the said index f igu~e fo~ the month of August 1996.
(3) On the first clay of the sixteenth Lease Yaar of this
Lease (Io'hich Lease Year shall begin in the calendar yea:- 2006), the
basic annual ~ent set forth in section 3.01 he~eof shall be increased
o~ dec~eased for the ensuing five yea~ pe~iod in the same proportion
that the said index for the month of August 2006 shall' have increased
o~ dec~eased over the said index figure fo~ the month of August 2001.
(4) The said annual ~ent as dete~mined above shall then be'
divided by twelve, and the amount shall be paid monthly for the said
five yea~ pe~iod. Ho~ever, in no event shall the inc~ease in annu.al
rent appli'cable to any five year period -exceed twenty-five' (25%)
pe'~cent and in no event shall the annual .~ent eve~ tie less ,than the
o~iginal annual rent.
(5) Lessor shall give Lessee at least sixty (60) days
advance notice of the revised ~ental amount, showing the levels of
the said Index used to arrive at the new rental amount.
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3.02 Substitute Indicator. If at any time prior to the fi~st
day of the second, thi~d, o~ fou~th five yea~ pe~iods of this Lease
the said Index referred to in section 3.01(b) of this Lease shall
cease to be published, there shall be substituted therE<for the most
similar economic, indicator then pUblished, if any. If Lesso~ and
Lessee cannot agree as to such sUbstitute, then the matter shall be
submitted to arbitration as he~einafte~ p~ovided fo~.
3. 03 Pe~cent'.lge Rental. (a) (1) In addi tion to the payment
of the minimum ~ent as hereinbefo~e p~ovided, Lessee shall pay to
Lessor as pe~centage ~ental, 7 % . of the annual g~oss sales made in,
on, or from the ~estau~ant po~tion of the Premises over ~900,000.00.
(2) For purposes of dete~mining pe~centage rentals under
this Lease, the end of an annual pe~iod and a lease year shall be
deemed to occu~ each June 30 during the o~iginal term of this Lease
and any reneIJal term.
(b) Said pe~centage ~ent fo~ each lease year shall
become due and payable thi~ty (30) days afte~ the month in which
g~oss sales exceed the dolla~ amoun t in section (a) (1) and
the~eafte~ shall be pai~ monthly on all additional gross sales made
du~ing the ~emainder' of, such lease yea~ on all add.itional g~oss ~al-es
made during_ the remaind~~ of such lease yea~. ~ Whethe~ g~ _ -not.
pe~centage rent is due fo~ any-such month, Lessee Co.venants to suomit
to Lessor within thirty (30) days after the end of every month a
statement setting fo~th gross sales made du~ing such month signed by
Lessee and ce~tified to be complete and co~~ect. Furthe~, Lessee
COvenants to submit to Lesso~ IJithin sixty (60) days after the end of
each lease yea~, an annual statement setting fo~th gross sales made
during such lease yea~ signed by Lessee and ce~tified to be complete
and correct. Any pedod of less than tIJelve (12) full months within
the term of this Lease shall be adjusted fo~ pe~centage rent, which
shall be based on the amount, if any, by IJhich the g~oss sales for
said period exceeds the pro-rata po~tion of the dollar amount in
section (a)( 1). The pro-~ata portion shall be calculated with the
numerator equal to the numbe~ of days in the said period and the
denominator equal to 365 days times the said dolla~ amount.
(c) "Gross sales", as .~sed het:ein, shall mean the
amount of sales of all me~chandise o~ se~vices sold or rende~ed in,.
. on, about or f~om the restaurant po~tion of the Premises by Lessee or
any subtenants, licensees or concessionai~es, whether for cash o~ on
a' charge, credit or time basis IJithout ~ese~ve or deduction fo~
inability o~ failure to collect, inClUding but not limited to such
rentals, sales and services (I) whe~e o~de~s o~iginate and/o~ a~e
accepted by Lessee in the P~emises but delive~y or perfo~mance
thereof is made from or at any place other than the Premises, (2)
pursuant to mail, telegraph, telephone o~ other similar o~c;Jers
~eceived o~ filed at or in the Premises, (3) by means of mechanlcal
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and othe~ vending machines in or on the I?~emises, (4) IIhich Lessee in
the no~mal and customary course of business would credit o~ att~ibute
to its business upon the restau~ant po~tion of the Premises o~ any
pa~t o~ pa~ts the~eof. The~e shall be deductible from 9~OSS sales:
(1) amount of ~efunds, allollances o~ discounts to customers, p~ovided
they have been included in 9~OSS sales and p~ovided furthe~ that if
such refunds, allo~ances or discounts a~e in the form of credits to
customers, such c~edits shall be included in g~oss sales when used,
(2) returns to shippe~s and manufacture~s fo~ c~edit, (3) sales of
t~ade fixtu~es o~ ope~ating equipment afte~ use thereof in the
conduct of Lessee I s business in o~ on the Premises, (4) all sums and
c~edits received in settlement of claims fo~ loss o~ damage to
me~chandise, (5) amounts of any excise or sales tax levied upon
~etail sales and payable over to the app~op~iate 90ve~nmental
autho~ity, p~ovided that specific reco~d is made at the time of each
sale of the amount of sales tax, and the amount the~eof is exp~essly
cha~ged to the custome~.
(d) Lessee covenants and ag~ees to keep upon the
I?~emises at all times dudng the te~m of this Lease, books and
~eco~ds in acco~dance lIith gene~ally accepted accounting practices of
all business conducted at the Premises in which shall be ~eco~ded
g~oss sales. The books, and ~eco~ds of account shall also include all
. fede~al, -state and local tax ~et.u~ns of Lessee _relatinc to Lessee 's
sales, as :Well as all pe~tinent o~iginal sa1e;' ~ecords ~hich shall
include but not be limited to the following: (1) daily dated cash
~egister tapes, (2) dated se~ially numbered sales slips, (3) daily
bank deposit slips, (4) bank statements, Io'hich can be conveniently
seg~egated f~om othe:- business matte~s of Lessee, (5) settlement
~epo~t sheets of t~ansactions Io'ith subtenants, concessionai~es, and
licensees, (6) detailed odginal ~ecords of any exclusions or
deductions f~om g~oss sales, (7) such othe~ ~ecords, if any, which
would normally be examined by an independent accountant pursuant to
accepted auditing standards in pe~forming an audit of Lessee I s sales.
Such books and records shall be open to the inspection of Lesso~ and
Lessor I s duly authodzed agents at all reasonable times du~ing
business hours at any time du~ing the te~m of this Lease and fo~ a
pe~iod of at least one (1) yea~ afte~ the te~mination of this Lease.
If Lessor should make an audit of Lessee' s reco~ds and Lessee's gross
sales statements should be found to, be unde~stated by more than 1%,
then Lessee in additici-n to paying the percentage rentar-due fo~ such
understatement shall pay to Lesso~ the cost of the audit. If any
gove~nmental tax authodty shall inc~ease g~oss sales as ~epo~ted by
Lessee on any such tax return afte~ audit, fo~ any lease o~ fiscal,
yea~, or any po~tion thereof, fo~ Io'hich g~oss sales have been
repo~ted, then the Lessee shall not i fy the Lesso~ p~ompt1y of such
inc~ease and pay any additional percentage ~ental due Lesso~.
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(e) If Lessee shall fail to p~epare e'ld d~'';i~ \":il\-t~,,, \
the time he~einafter specified any statement of gre.S':' ..,.i!.~~ (tlf~....:t.
he~eunder, Lessor may elect to treat Lessee's said f(~J",,''- o.....,\.
b~each of this Lease, entitling Lesso~ to te~minate this L,iQ."'l!..0'>""
Lessee's right to possession of the P~emises, o~ both, but only aft".
Lessor has given Lessee notice in w~iting as he~einafter provided.
If Lessee fails to prepa~e and delive~ said statement within fifteen
(15) days after receiving said notice, Lesso~ may also, in the
alte~native, elect to make an audit of all books and records of
Lessee, incl uding Lessee's bank accoun ts which in any way perta in to
o~ show g~oss sales and to p~epa~e the statement or statements which
Lessee has failed to prepare and delive~. Such audit shall be made
and such statement ot' statements shall be p~epared by an accountant
selected by Lesso~. The statement o~ statements so prepa~ed shall be
conclusive on Lessee, and the Lessee shall pay on demand all expenses
of such audit and of the p~epa~ation of any such statements and all
sums as may be sho~n by such audit to be due as pe~centage ~ental.
(f) In computing damages or ~ental due unde~ this
Lease the value of percentage ~ental fo~ any pe~iod subsequent to the
te~mination of this Lease o~ the te~mination of Lessee's ~ight of
possess ion shall be an amount pe~ yea~ equal to one thi~d of the
total.. percentage ~ent paid by - Lessee for the last .tht'ee (3) full
lease yea~s immediately p~eceging .such termination, and if less than
th~ee (3) full _yea~s shall. have el-apsed, stich value shall be an
amount pe~ yea~ equal to the ave~age yearly pet'centage rental
theretofo~e paid.
3. 04 Lesso~ to Pay Taxes. Lessor ag~ees to pay all real
p~operty taxes, special taxes, o~ assessments, including st~eet
imp~ovement liens, if any, levied o~ assessed upon or against the
Leased Premises and any imp~ovements o~ fixtures et'ected o~ situate
thereon, du~ing the Lease Te~m. Lessee agrees to pay all prope~ty
taxes on its pe~sonal p~operty located on the Leased Premises.
3.05 Installment Payment. In the event any special tax or
assessment is levied o~ assessed on the Leased P~emises which becomes
due and payable during I and the del inquency date fo~ which falls'
within, the Lease Term, o~ any extension, which tax ot' assessment may
be legally paid in installments (whether by subjecting .the. demised
p~operty to bond or otherwise), Lessee shall have the option' to pay
such tax o~ assessment in. installments. In the event of stich
election, Lessee shall be liable only for those installments of such
tax or assessment which become due and payable dut'ing, and the
delinquency date for which falls within, the Lease Term, o~ any
extension. Lessot' ag~ees to execute any inst~ument that may be
necessary to permit the payment: of such special tax ot' assessment in
installments.
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3.06 Excluded Taxes. Lessee shall not be required to pay any
f~anchise, estate, inheritance, succession, capital levy or transfe~
tax of Lessor, o~ any income, excess profits, or ~evenue tax, or any
othe~ tax, assessment, charge or levy upon the ~ent payable by Lessee
unde~ th is Lease, and all such taxes, assessments, charges and levies
shall be payable by Lessor. Lesso~ shall not, without consent of
Lessee, do any act ~hich ~ill cause the taxes and assessments on the
Leased P~emises to be increased.
3.07 Contest. Lessee shall have the right to contest the
assessment, account or validity of any tax which is Lessee's
obligation unde~ the tet'ms' of this Lease by appropdate legal
p~oceedings. Lessor shall, upon ~equest, join in any such
proceedings if Lessee determines that it shall be necessary o~
convenient for Lessor to do so in o~de~ fo~ Lessee to prosecute such
p~oceedings p~ope~ly.
3.08 Utility Cha~ges. Lessee shall pay o~ cause to be paid
all charges fo~ wate~, heat, gas, elect~icity, se~ers, and any and
all othe~ utilities used uoon the Leasad P~emises throughout the te~m
of this Lease, including a~y connection fees.
3. 0 Security Deposit. A secu~ity deposit in ~'- .." u. t of
Ten Thousano ,000.00) Dolla~s shall be paid essee to Lesso~,
$2,500.00 upon exec ' hereof, and $'2,5 wi th each of the _fi~st
t,h~ee monthly--Iease payment." ~ e~ e~, fo~ the payment of rents to
become due to Lessor unde lS eement, and fo~ the faithful
pe~fo~mance by Lessee ~:; all the othe~ 0 :' ations hereunder and fo~
the payment of a and all sums of moneys fo~ Lessee may be o~
become lia e~eunder, provided, hOlo'eve~1 that the _: - secu~ity
deposi all be applied to t'ent due and payable in the el. nth
(11 and tlo'elfth (12th) months of the fi~st yea~ of this Leas7'-\~nd
e~eafte~ the~e shall be no secu~ity deposit. .(:d(.6
ARTICLE IV
USE OF PREMISES
4.01 Permitted Use. Lessee shall have the right to use the
Leased Premises fo~ the continuation of the hotel and restaurant and
bar uses fo~ Io'hich it is cu~rently being us.ed, and for any and all
natu~al extensions or' 'renovations of those uses. All uses described
in this section shall be pet'mitted" but none shall be ~equired,
except as set fo~th in section 4.06 of this Ag~eement.
4.02 Signs. Lessee shall have the right to erect and mainta in
upon the imp~ovements and on the Leased I?~emises such signs as it
deems app~op~iate to the conduct of its business. Lessee shall have
no ~ight to e~ect 0:'- maintain any sign used fot' the purpose of
adve~tising any busir:ess, activity, o~ position othe:.- than the
business o~ businesses of Lessee ca~ried on on the Leased Premises.
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4.03 Waste and Nuisance. Lessee sha 11 not commi t, or suf fe~
to be committed, any vaste on the Leased Premises or any improvements
e~ected o~ situate thereon, no~ shall it maintain, commit, or pe~mit
the maintenance or commission of any nuisance on the Leased Premises
o~ use the Leased Premises o~ imp~ovements fo~ any unla~ful purpose.
4. 04 Te~mination if Use Becomes Unlawful o~ Impossible. If it
is or becomes unla~ful for Lessee, o~ anyone hold ins under Lessee
di~ectly o~ indi~ectly, to conduct the business described and
anticipated in section 4.01 of this Ag~eement on the Leased Premises,
so that it becomes impossible to use 'the Leased Premises fo~ the
purpose desc~ibed in section 4.01 of this Ag~eement, or such use is
declared unlawful, then Lessee shall have the right at any time
thereafte~ to te~minate this Lease by giving Lessor one hund~ed
eighty (180) days notice in writing of such te~mination.
4.05 Rent Abatement if Premises are Tempo~a~ily Unusable. If,
as a result of fire, flood, o~ insu~~ection, the Leased Premises'
shall become unusable for Lessee I s pu~poses, from a practical
standpoint, fo~ a pe::-iod of thi~ty (30) consecutive cays or 10nge~1
then Lessee may, by notice in w~iting f~om Lessee to Lesso~, at any
time p~io~ to the cate when this Lease 1oI0uld other...ise terminate,'
e'xtend this Leas~h ~ithout the requi~ement::" of the payment of ~ent,-
fo;" the pe~iod of time ~hich. the Leased -~t:emises was unusable f~om a
p~ac€ic~l standpoint for the purposes -described' in section 4.01' of
this Agreement.
4.06 Continuous Use. Should Lessee fail to operate the hotel
o~ restau~ant situate on the Leased P~emises for. a period of thi~ty
(30) days, unless prevented by damage to the Leased P::-emises, (e.g.,
by fire o~ flood, repairs, acts of God o~ othe~ causes beyond the
cont~ol of Lessee), then Lesso~ shall have the option to terminate
this Lease Ag~eement afte~ g i v ing tIJenty (20) days \/ritten notice of
its intention to terminate to the Lessee.
4.09 Illegal Activity. Lessee shall not engage in, pe~mi t,
no~ suffer anyone else to pe~mit, any illegal o~ criminal activity or
status to be ca~~ied on or exist at the p~emises. Should Lessee not
cease any such illegal or c~iminal activity, o~ cor~ect any such
illegal o~ c~iminal st",tus, then Lessee shall be in default and.
Lessor shall be' entitled to the remedies set foith at section 11.01
of this Ag~eement upon giving the thirty (30) day notice provided for
the~ein.
4.10 Arbitration. Any dispute betIJeen Lessor and Lessee as to
IJhat constitutes a pe::-mitted O~ prohibited use, or waste or nuisance,
O~ cause fo~ te~mination or ~ent abatement, all as p::-ovided in this
Article IV of this Agreement, shall be submitted to a::-bit~ation as
hereinafte~ p~ovided for.
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ARTICLE V
LESSEE IMPROVEMENTS AND PROPERTY
5.01 Ownership of Lessee Impr.ovements. All fixtures, and any
replacements of existing pe~sonal p~ope~ty, installed in o~ placed
upon the Leased p~emises by Lessee, shall be and ~emain the prope~ty
of Lessee until t~ansfe~~ed to Lesso~ pu~suant to the terms of this'
Ag~eement, and pa~ticula~ly, pu~suant to the te~ms of section 12.03..
of this Agreement. Any pe~sonal p~operty placed in the Leased
I?~emises by the Lessee which is not a ~eplacement of existing
pe~sonal p~ope~ty shall ~emain ,Le,ssee '13 p~ope~ty and shall remain so
upon the te~mination of this Lease fo~ any reason.
5.02 Lessee t 13 Mo~tgage. Lessee agrees to execute a mortgage
O~ financing statement in favo~ of Lesso~ in an amount equal to the
total sum expended by Lessee fo~ all alte~ations, changes and
addi tions to the Leased P~emises. The sole purpose of such financing
statement and mo~tgage is to secu~e Lesso~'s inte~est in the event of
execution, levy, bankruptcy o~ othe~ actions adverse to Lessee o~
Lesso~.
ARTICLE VI
, _ RIGHT 'OF fIRST REF.USAL
.,
6 .01 Transfe~. In the event of any p~oposed transfe~ of any
inte~est in the Leased p~emises by Lesso~, Lessee shall have the
right of fi~st refusal to pu~chase on the same te~ms and conditions
as offered by o~ to the p~oposed t~ansferee, p~ovided, ho~eve~, that
this Right of First Refusal shall not apply to any transfer to any
lineal descendant (and spouse of any lineal desc.endant) of the
Lessor. The right of fi~st refusal must be exe~cised, in writing,
IJithin ten (10) business days after receipt of w~itten notices of the
proposed t~ansfe~ (to include all te~ms and conditions thereof and
the identity of the p~oposed tr'ansfe~ee), IJith settlement to take
place wi thin ninety (90) days thereafte~. Should any of the terms or
conditions of any p~oposed t~ansfe~ involve ci~cumstances othe~ than
the amount and timing of monetary payments, then Lessee may p~ovide
the reasonable equivalent thereof in cash.
6.02 Additional Terms. Lessor' hereby consents ,to the
assignment of this right of first refusal f~om Lessee to one of the
joint ventu~ers of the Lessee. No IJ~itten notice of a proposed
t~ansfer shall be effective if any of the te~ms of the proposed
t~ansfer shall change, in which event, a new notice shall be sent.
No failure to exe~cise the ~ight of fi~st ~efusal shall act as an
election to IJaive the right of fi~st ~efusal, o~ right to notice f~om
Lesso~, in the event of any futu~e p~oposed t~ansfe~, or in the event
of any change in terms of a p~oposed t~ansfe~.
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ARTICLE VII
REPAIRS AND RESTORATION
7.01 Lessee's Duty to Repair. Lessee, at Lessee's o~n cost
and expense at all times during the te~m of this Lease, agrees to,
keep and maintain; or cause to be kept and maintained, all buildings
and imp~ovements erected upon the Leased P~emises in a good state of
appea~ance and ~epair, reasonable \Jea~ and tea~ excepted, p~ovided,':
howeve~, that Lesso~ shall be solely ~esponsible fo~ all parking lot
~epai~s.
7.02 Sixty Pe~cent Damage .;.. Te~mina tion Option. If, by fi~e,
flood, explosion, public enemy, ~iot, civil commotion, or act of God,'
the p~emises during the term shall be damaged in excess of sixty
(60%) pe~cent, this Lease, at the option of Lessee, to be exe~cised,
by notice to Lesso~ in wd ting, shall cease and te~minate. The te~m
"damaged in excess of sixty (60%) pe~cent" shall be construed to mean
such damage to the buildings o~ imp~ovements occupied by Lessee
(excluding damage caused solely by wate~ used in extinguishing fi~e),
as will requi~e an expenditure in excess of sixty (60%) percent of
the ma~ket value (prior to the damage) of the buildings o~
imp~ovements, in o~der to make ~epai~s.
7 :0] Damage Less than Sixty Percent - Repairs.. If, by fi~e,
flood,- explosion-, public' enemy, ~iot, civil commotion,' or act of God,'
the p~emises du~ing the te~m shall be damaged to an extent less than
sixty (60%) pe~cent (or in excess of sixty (60%) pe~cent and Lessee
shall not exercise its option to te~mina te this Lease) Lessee shall
repai~ (with Lessee's funds o~ any insu~ance funds) the premises with
due diligence, and this Lease shall continue in full force and
effect.
7.04 Inspection by Lessor. Lessee shall pe~mit Lessor and its
agents to ente~ into and upon the Leased P~emises and any
imp~ovements e~ected the~eon at all reasonable times for the pu~pose,'
of inspecting the same or fo~ the pu~pose of maintaining o~ making
repai~s to the imp~ovements which Lessor elects to do pursuant to
this Article.
7.05 Delivery of Property. Lessee shall, th~oughout the Lease'
Term, maintain t'he Leased, P~emises and all imp~ovements erected o~
situate thereon as provided in section 7.01 of this Agreement and
shall, at the te~mination of this Lease, delive~ up the premises in a
clean and sanita~y condition in substantially the same condition that
existed on the Beginning Date, ~easonable \Jea~ and tear, damage by
the elements, acts of God, wa~ and any act of wa~ excepted, provided,
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howeve~, that any insut"ance P~Oceeds fo~ any such casualty not used
to ~epai~ o~ ~eplace the Leased P~emises o~ improvelJents shall be
paid ove~ to the Lessor and Lessee shall be ~esponsbi1e to Lesso~ fo~ .._
any deficiencies in insu~ance o~ lack of Cove~age or deductible.
7. 06 Lesso~ I s Right to Repai~. In the event Lessee should
neglect to ~easonably maintain the Leased P~emises and all
imp~ovements e~ected o~ situate the~eon, Lessot" shall have the ~ight,
but not the obligation, to cause ~epai~s o~ co~~ections to be made,
and any t"easonable costs the~efot" shall, be payable by Lessee to
Lessor as additional ~ental on t,he next monthly ~ental payment due
afte~ notice f~om Lesso~ to Lessee of the cost of such ~epai.~s or
cO~~ections, p~ovided, however, that p~io~ to making o~ causing to be
made any such ~epairs, maintenance, o~ corrections, Lesso~ shall give
Lessee thi~ty (30) days Il~itten notice, within which time Lessee
shall have the oppot"tuni ty to perfo~m such ~epai~s, maintenance, o~
co~~ections, o~ object to the necess i ty of desi~ability of SUch
~epairs, maintenance or co~~ections, and if Lesso~ anc Lessee shall
be unable to ag~ee on the extent of repai~s, maintenance, o~
cO~~ections to be mace, if any, IJithin thi~ty (30) days follolJing
notice of SUch objection, then the diSPute shall be submitted to
a~bit~ation as p~oviced in section 7.07 of this Ag~eement.
. 7.07 Arbitration.' Any dispute betIJeen .Lessot" and Lessee_-as. tEl
what constitutes' sufficient ~epair and maintenance shall be submit:ted
to arbitration as het"einaftet" p~ovided fo~.
ARTICLE VIII
MECHANIC'S LIENS
8.01 Prohibition of Liens on Pee or Leasehold Inte~est.
Lessee shall not suffe~ or pe~mit any mechanic's liens o~ other liens
to be filed against the fee of the Leased' P~emises no~ against
Lessee's leasehold inte~est in the Leased Premises, by ~eason of any
wo~k, labor, se~vices o~ mate~ials supplied or claimed to have been
supplied to Lessee or anyone hOlding the Leased P~emises o~ any part
the~eof through o~ unde~ Lessee.
8.02 Removal of Lien:? by. Lessee. If any such mechanic's liens
or materialman's lien shall be recorded against the Leased P~emises,.
o~ any improvements thet"eof, Lesse'e shall cause the same to be
removed or, in the alte~native, if Lessee in good faith desires to
contest the same, Lessee shall be p~ivileged to do so but in such
case Lessee he~eby ag~ees to insu~e, defend, indemnify and save
Lessor harmless f~om all liabili ty for damages occasioned the~eby and
shall, in the event of a judgment of for:eclosu~e upon said mechanic 's
lien, cause the same to be discha~ged and ~emoved prior: to the
execution of such jucgment.
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ARTICLE IX
CONDEMNATION
9.01 Interests of Parties on Condemnation. In the event the
Leased Premises or any pa~t the~eof shall be taken fo~ public
pU~poses by condemnation as a ~esult of any action or proceeding in
eminent domain, or shall be t~ansfe~~ed in lieu of condemnation to
any authority entitled to exe~cise the pOIJe~ of eminent domain, the
interests of Lessor and Lessee in the aIJard o~ consideration fo~ such
transfer and the effect of the ,taking o~ t~ansfe~ upon this Lease
shall be as p~ovided by this Article.
9.02 Total Taking - Termination. In the event the enti~e'
Leased Premises is taken o~ so t~ansfe~red, this Lease and all of the
~ight, title, and interest the~eunde~ shall cease on the date title
to such Leased Premises vests in the condemning authority, and the
p~oceeds of such condemnation shall be divided as follolls:
(a) Lessee shall ~ece i ve any and all a'.;ards fo~ the
unexpired Lease Term, plus moving expenses, and any other sums to
Ilhich a 'Lessee Ilould be prope~ly and la...fl.1lly entitled (except any
alla~ds . or. p~oceeds allocated pu~suant to sub-section (b) hereafte~).
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p~oceeds.
(b'j Lessor shall r'ecei ve all of the - sa:id' other condemnation
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9.03 Partial Taking - Condemnation. In the event of the
taking or transfer of only a part of the Leased P~emises leaving 'the
~emainder of the premises in such location, o~ in such form, shape,
o~ reduced size as to be not effectively and p~acticably usable fo~
the purpose of ope~ation thet'eon of Lessee's business, this Lease and
all right, title, and inte~est the~eunder shall cease on the date
title to the Land ot' the po~tiqn thereof so taken or t~ansferred
vests in the condemning autho~ity. On or befo~e the date of said
vesting in the condemning authori ty, Lessee shall notify Lessor that
it conside~s the partial taking to render the Leased P~emises
p~acticably unusable in its opinion and that it Ilill conside~ the
Lease to be te~minated upon said vesting. Should Lesso~ disag~ee
wi th Lessee'l? determination that the' taking rendet's tl:le Leased
~remises practicably unusable, Lessor shall in turn notify Lessee
IIi th in tventy (20) 'days of receipt of Lessee's notice and the~eafter
the matter may be submitted by eithe~ of the pa>:ties to a~bit~ation
as hereinafte~ provided. The p~oceeds of such condemnation shall be
divided acco~ding to the p~ovisions of section 9.02 of this Lease.
9.04
the even t
P~emises,
in such
Partial Taking - Continuation with Rent Abatement. In
of a taking ot' t~ansfe~ of only a pa~t of the Leiised
leaving the remainde~ of the premises in such location and
form, sha;:e, or size as to be used effectively and
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p~acticably in the opinion of the Lessee fo~ the pu~pose of ope~ation
the~eon of Lessee's business, this Lease shall terminate and end as
to the po~tion of the p~emises so taken o~ t~ansfe~~ed as of the date
title to such po~tion vests in the condemning authority, but shall
continue in full force and effect as to the portion of the Leased
Premises not so taken o~ t~ansfe~~ed. F~om and after such date, the
rental requi~ed to be paid by Lessee to Lesso~ shall be ~educed in
the p~opo~tion to ~hich the value of the a~ea and improvements so
taken or t~ansfe~red bears to the total value of the a~ea and
imp~ovements of the Leased Premises and easement a~ea. The p~oceeds
of such condemnation shall be divided acco~ding to the provisions of
section 9.02 of this Lease.
9.05 Voluntary Conveyance. A volunta~y conveyance by Lessor
to a public utility, agency, o~ autho~ity unde~ threat of a taking
unde~ the powe~ of eminent domain in lieu of formal p~oceedings shall
be deemed a taking within the meaning of this A~ticle IX.
9.06 Arbitration. If any condemnation awa~d does not
distinguish between the classes of p~ope~ty and inte~ests as
desc~ibed in section 9.02 of this Agreement, the pat'ties shall
negotiat~ and ag~ee a~ to such allocation and, failing such ag~eement
IJithin fo~ty-five (45) days, the matter shall Qe submitted t_o
a~bitration. __
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ARTICLE X
ASSIGNMENT AND SUBLEASE
10.01 Consent of Lessor Required. Lessee, o~ any subsequent
Lessee, may assign, convey o~ t~ansfer Lessee's interest in this
Lease and the leasehold estate c~eated he~eby, o~ a po~tion of said
interest, only with the w~itten consent of Lesso~ to such assignment.
ARTICLE XI
DEFAULT AND REMEDIES \,./"-
11.01 Default by Lessee. If Lessee shall allol/ any monthly
rent to be in arrea~s fo~ a pe~iod of thirty (30) days afte~ written
notice from Lesso~, o~ shall remain in default unde:- any other
condition of this Lease fo~ a pe~iod of thi~ty (30) days after
",~itten notice f~om Lesso~, o~ should any othe~ pe:-son than Lessee _
secure possession of the p~emises, o~ any pa~t the~eof, by ope~atio~
of lalJ in any manner whatsoever, Lesso~ may at its option, without
notice, o~ fu~the~ notice, to Lessee:
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(a) tet'minate this Lease and recove:- ft'om Lessee ....
damages as p~ovided for in this section 11.01 of this Ag~eement: o~c
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(b)
Lease and ~ecove~
damages, including
continue
by su i t
all rent
to hold the Lessee obligated to this
o~ othe~wise from the Lessee any and all
due fo~ the ~emainde~ of the Te~m: o~
(c) ente~ upon the Leased Premises and any
improvements erected o~ si tua te thereon to cause ~epai~s or
co~~ections to be made, o~ co~rec::t o~ rectify any breach, and any
~easonable costs therefo~e shall be payable by Lessee to Lesso~ as
additional ~ental on the next monthly ~ental payment due afte~ notice
from Lesso~ to Lessee of the cost of such actions: or
(d) otherwise satisfy the b~each of Lessee's duty or
obligation by the payment of money due o~ the taking of action and
any reasonable costs thereof shall be payable by Lessee to Lesso~ as
additional ~ental on the next monthly rental payment due afte~ notice
f~om Lesso~ to Lessee of the cost of such actions: o~
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(e) re-ente~ and take possess ion of said p~emises and
~emove all persons and p~ope~ty the~efrom, without being deemed
guilty of any manner of t~espass, and ~elet the p~emises o~ any part
the~eof, fo~ all or any pa~t of the ~emainde~ of said term, to a
pa~ty satisfactory to Lesso~, and at such monthly ~ental as Lessor
may with ~easonable diligence be able to secu~e. Should Lesso~ be
. unable to rEflet after ~easonable ef'fo~ts to do s'Q.... o~ should such
monthly rentaF be less than the rental Lessee w-as 'obligated to pay
under this Lease, plus the expense of reletting, then Lessee shall
pay the amount of such deficiency to Lessor: o~
(f) avail itself of any othe~ remedy at la~ o~ equity.
The said rights and remedies of Lesso~ shall be cumulative and not in
the' alte~native. Lesso~ shall have the right to effect the ~emedies
set forth in sub-section (c) and (d) of this section 11.01 of this
Lease upon less than thirty (30). days notice if a shorter period is
required so as to prevent i~~eparable inju~y to the Leased P~emises
or the motel and restau~ant business conducted the~eon.
11.02 Landlo~d's Lien-Sale of Lessee's Prope~ty. It is
exp~essly ag~eed that in the event of defaul t by Lessee he~eunder,
Lesso~'shall have a lien on all goods, chattels, o~ pe~sonal prope~ty
of any description. belonging to Lessee or to eithe~ joint ve'ntu~er of.
Lessee Io'hich are placed in, o~ become a pa~t of, the Leased P~emises,
as security fo~ rent due and to become due fo~ the remainde~ of the
then current Lease Term, which lien shall not be in lieu of o~ in any
Io'ay affect the statuto~y Lesso~ I s lien given by 1 a loT , but shall be
cumulative the~eto: and Lessee hereby grants to lessor a secu~ity
inte~est in all such pe~sonal p~ope~ty placed in or on said Leased
Premises for such purposes, p~ovided, howeve~, that no securi ty
inte~est o~ Financinc Statement shall be filed nor shall such lien be
pe~fected in any man;er, until default by Lessee and thirty (30) days
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w~itten notice from Lessor to Lessee of Lesso~'s intent to so file o~
pe~fect. This shall not p~event the sale by Lessee of any
me~chandise o~ inventory in the o~dina~y COU~se of business free of
such lien to Lessor. In the event Lesso~ exercises the option
p~ovided in sub-sections (a), (b), (e), or (f) of section 11.01 of
this Agreement, then Lessor may take possession of all of Lessee's
p~ope~ty and the property of eithe~ joint ventu~er of Lessee on the
Leased Premises and sell same at public or p~ivate sale afte:- giving
Lessee reasonable notice of the time and place of any public sale o~
of the time afte~ which any p~ivate sale is to be made, for cash or
on c~edi t, o~ fo~ such pC'ices and te~ms as Lesso~ deems best, wi th o~
without having the prope~ty p~.es'ent at such sale. The proceeds of
such sale shall be applied fi~st to the necessa~y and pt"oper expense
of removing, sto~ing, and selling such p~ope~ty, then to the payment
of any rent due o~ to become due unde~ this Lease, Ot" any damages as
calculated unde~ sections 11.01 o~ 11.02 of this Agreement, ~ith the
balance, if any, to be paid to Lessee. The p~ovisicns of this
section shall not p~event, no~ shall they p~ohibit, the Lessee o~ its
Ope~ation Manage~ ft"cm disposing of any assets f~ee and clea~ of any
lien p~ovided for in this section, until such time as the said lien
should be pe~fected.
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11.03 Remedies Cumulative. Al:l ~ights and ~er.:edies 'of" Lessor'
unde~. this Lease shall be cumula'tive" and none shall exclude'" any
othe~ right o~ ~emedy at lalJ. - -Such rrghts ana ~emedies may be
exe~cised and enfo~ced concu~~ently and IJheneve~ and as often as
occasion the~efo~e arises.
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11.04 Mitigation of Damages. In the event of any default,
Lessee shall be glven credit against any damages, for any rent
actually received upon the ~e-~ental of the ~estau~ant or hotel, or
the fair ma~ket ~ental value of the restaurant o~ hotel in the event
that Lessor ~esumes ope~ation of one o~ both facilities.
ARTICLE XII
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TERMINATION AND SURRENDER
12.01 No Right to Terminate. Nei the~ Lesso~ nor Lessee shall
have the right tq terminate this Lease fo~ any reason during the
L~ase Term" except as specifically p~ovided i:n this Agreement.
12.02 Automatic Termination. This Lease shall automatically
te~minate at the end of the Lease Te~m or any five year period if
Lessee has exercised its option to te~minate the Lease pUt"suant to
sect ion 2.02 of this Ag~eement.
12.03 Surrendet" of I?ossession. Unless othe::...ise mutually
ag~eed in writing by the pa~ties p~io~ to the tet"mination of the
Lease, eithe~ pursua::t to section 12.02 or any option expressly
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p~ovided fo~ in this Ag~eement, Lessee ag~ees to redeliver possession
of the Leased Premises, and the imp~ovements, fixtu~es and p~operty
the~eon which are to become the p~ope~ty of the Lessor pu~suant to
section 5.01 of this Agreement, in subs tan t ially the same condition
that existed on the Beginning Date, ~easonable wea~ and tear, damage
by the elements, acts of God, '.;a~ and any act of wa~ excepted, all as
p~ovided in section 7.05 of this Ag~eement.
12.04 Other Acts and Effects of Termination. Upon termination:
(a) If applicable, all financing statements and
mo~tgages executed by Lesso~ o~ Lessee shall be satisfied, terminated
and released in full by Lessee:
(b) This Ag~eement shall be of no furthe~ force and
effect except as to those ~ights, obligations and ~emedies as may
have arisen prio~ to te~mination o~ IJhich may a~ise thereafte~ as a
~esult of acts or events occu~~ing p~ior to te~mination.
ARTICLE XIII
WARRANTIES, INDEMNITY, LIABILITY & INSURANCE
13.01 Indemn.ity. of Lessor. Lessee agrees to insu~e, de.fend,
indemnify and -h01'd LesS'O~ ha~mless against any and all claims,
demands, damages, costs and expenses, including atto~ney' s fees for
the defense the~eof, a~ising from the conduct o~ management of
Lessee's business at the Leased Premises, o~ from any b~each on the
part of Lessee of any conditions of this Lease, o~ condition c~eated
by the Lessee, o~ f~om any act or neg ligence of Lessee, its agents,
cont~actors, employees, subtenants, concessionai~es, o~ licensees in
o~ about the Leased P~emises, o~ in connection IJith any accident,
pe~sonal inju~y o~ damage to pe~sonal p~ope~ty a~ising from or out of
any occur~ence in, uoon o~ at the Leased P~emises du~ing the Lease
Term, unless same shail result f~om negligence on the pa~t of Lessor.
In case of any action o~ proceeding brought against Lesso~ by ~eason
of any such claim, Lessee, on notice f~om Lessor, covenants to defend
such action o~ p~oceeding by counsel acceptable to Lesso~.
. 13.02 Insurance. Lessee ag~ees that .at all times du~ing the
Term of this Lease or any extensions, it shall keep in effect a
policy of public liability and p~ope~ty damage insurance insu~ing the
demised premises against any and all claims of pe~sonal injury o~
pr.operty damage, and shall keep in effect liability insu~ance, Fire
Legal Liabi 1 i ty Insurance, Imp~ovements and Bette~ments Insurance, in
such amounts as the parties may ag~ee to from time to time, o~,
failing such agreement, in reasonable amounts dete!:mined by
a~bit~ation. Lessee may, at Lessee's option, obtain and carry any
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othe~ insu~ance Lessee may dsem to be necessary or desirable. All
said insu~ance policies shall p~ovide fo~ the payment for any losses
to eithe~ Lesso~ or Lessee as thei~ ir.te~est may appea~ under this
Lease.
13.03 Insurance-Proof of Coverage. The original policies may
be ~etained by the Lessee, but the Lesso~ shall have the right to
inspect and copy any and all such pol ic ies, and Lessee, on demand,
ag~ees to fu~nish the Lessor ~ith p~oof of payment of the premium or
p~emiums on any policies provided fo~ in this Ag~eement.
13. 04 othe~ Insu~ance.
insurance on any prope~ty o~
Ag~eement without also naming
thei~ interests may appear.
Lessee shall not obtain any othe~
matte~ which is the subject of' this
Lesso~ as an additional insu~ed as
13 .05 Insu~ance-Protection Against Cancellation. Each,
insurance policy provided fo~ in this Ag~eement shall exp~essly
p~ovide that the policy shall not be canceled o~ altered without
thi~ty (30) days prior written notice to all parties having an
inte~est in the coverage.
13 .06 Insurance-Failu~e to Secure. If Lessee at aIIY time
-durin,g the Te~m hereof should fail to secu~e. or maintain- the
foregoing insurance, Lessee shall be in default under the te~ins-; of
this Agreement, and Lesso~ shall have the right but not the
obl igation, to obtain such insurance in Lessee's name or as the agent
of the Lessee, and any ~easonable costs the~efo~ shall be payable by
Lessee to Lesso~ as additional rental on the next monthly ~ental
payment due date after notice from Lessor to Lessee of the cost of
such insurance.
13.07 Compliance with Insurance Requirelllents. Lessee, at its
sole cost, shall effect compliance with all requests of any fire
insurance carrie~ of Lessee or Lesso~ conce~ning Leased P~emises o~
ope~ations modifications. All insurance p~oceeds ~eceived by any
pa~ty hereto a~ising out of damage to the prope~ty shall be utilized
for the p~ompt resto~ation of the p~operty to its p~e-existing, or
better, condition.
13.06 Representations: Lessor represents and wa~rants that the.
real estate and p'e~sonal property, utili ty se~vices and facilities
appurtenant the~eto a~e and will be adequate, suffici~nt and in
ope~ating condition fo~ the conduct of both motel and restaurant
ope~ations upon the Leased P~emises and that the~e is no condition
that does o~ will adversely affect the legality of the business to be
conducted o~ impair or limit the operation of the business by the
Lessee. As to the electric se~vice, Lesso~ rep~esents and warrants
only that it has been adequate for p~io~ restaurant opel:."ations on the
Leased Premises: any additional costs to upg~ade the elect~ic se~vice
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fo~ Lessee's additional requirements shall be the responsibility of
Lessee. Lessor will have a continuing responsibility for damages o~
loss to Lessee arising from latent conditions existing on the Leased
P~emises and will indemnify, save, hold ha~mless and defend Lessee
against any such "liability, losses o~ damages.
ARTICLE XIV
ARBITRATION
14.01 Agreement to Submit. In the event Lessor and Lessee
cannot ag~ee on any point in this Lease that is exp~essly subject to
a~bitration, or should they he~eafte~ stipulate in writing that any
dispute between them be submitted to a~bitration, such controversy
between the parties involving rights and obligations arising under
the terms of this Agreement shall be subject to arbitration, except.
controve~sies involving less than $2,500.00, p~ovided, hoveve~, that'
either party shall have the ~ight to appeal any a~bitration ava~d to
Court, de.!!.2:!2' The a~bitration shall comply with and be governed by
the p~ovisions of this Ag~eement and the Pennsylvania Uniform
A~bitration Act, Sections 7301 through 7320 of Title 42 of the
Pennsylvania Consolidated Statutes.
14".02 Demand fo~ Arbitration. " In the ejie"~t Lesso~ and Lessee
"cannot ag~ee on any point in-' this Lease that is -expressly subject to
..'" arbitration, eithe~ party may make a demand fo~ a~bit~ation by filing
a demand in IJ~iting vith the other.
14.03 Appointment of Arbitrators. The pa~ties may ag~ee on one
a~bi trato~. However, if they cannot so ag~ee, th~ee arbit~ators
shall be appointed as follows: wi thin tIJenty (20) days of a Demand
for Arbitration, each pa~ty shall name one a~bitrator in v~iting and
give notice to the other party of the name and add~ess of the
a~bitrator. In case of the failure of either party he~eto to name an
a~bitrator, the othe~ pa~ty shall have the right to apply to the
Court of Common Pleas fo~ the County of Cumbe~land, Pennsylvania, to
appoint an a~bit~ato~ to ~epresent the defaulting party. The two
a~bi tra tors thus appointed (in ei the~ manne~) shall select and
appoint in writing a thi~d a~bitrato~ and give written notice to
Lessor ang Lessee, o~ if wi thin tIJenty (20) days a;te~ the
appointment of 'said second a~bit~ato~1 the tIJO a~bitrators shall fail
to appoint a third," then eithe~ party he~eto shall have the right to
make application to the Cou~t of Common Pleas for the County of
Cumberland, Pennsylvania, to appoint such third a~bitrator.
14.04 Qualifications of Arbitrators. All of the arbitrators
appointed must have no financial or pe~sonal inte~est in the result
of the arbit~ation.
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14.05 Vacancies and Substi tutions. If an appointed arbi tra to~
fails to act o~ is unable to act, the pa~ties may appoint a successo~
as follolJs: whether or not a single a~bitrato~ was chosen initially,
the parties may agree on another single a~bit~ator: or if the pa~ties
cannot ag~ee on a single a~bit~ato~, the successo~ shall be appointed
by the pa~ty o~ by the arbit~ato~s who selected the arbit~ato~ who is
no longer pa~ticipating. If the method p~ovided in this section
14.05 or section 14.03 of this Agreement fails o~ cannot be follolJed,
one or mo~e a~bitratot's may be appointed by a court having
ju~isdiction on application of eithe~ pa~ty.
14.06 Time and Place of Bearing. All a~bitration hea~ings
conducted unde~ this Agreement shall take place in Cumbet'land County,
Pennsylvania. The arbit~ato~s shall set the time anc place of the
a~bitration hearings and they shall delive~ to each party, by
pe~sonal se~vice or certified mail, w~itten notice stating the time,
location, and subject matte~ of the a~bit~ation hea~ing.
14.07 Pove~s of Arbit~ators. The a~bit~ators shall have the
pOio'er to: decide all p~ocedural issues: inte~p~et and dete~mine
questions of both lal/ and fact: base conclusions on their ~eading of
the Agreement: adjourn o~ postpone the hea~ing for gcod cause to a
time not' late~ than ,the date for making the, awa~d unl,ess the pa~tie_s
consent to a later .date: ancr hea~ and dete~mine the cont~ove~sy 00-
the evidence p~esented even though a duly notified party fails. to-
appear. All pOIJers of the a~bi trators shall be exercised only by a
majority of the a~bitrato~s.
14.08 Evidence. The a~bi trato~s may issue subpoenas fo~ the
attendance of IJitnesses and the production of othe~ evidence, pe~mit
depositions to be taken of IJitnesses IJho cannot be served with a
subpoena o~ who cannot attend the hearing, and administe~ oaths as
p~ovided by law.
14.09 Avard. The a~bit~ation award shall be valid if made by a
majority of the a~bit~ato~s. It shall be in w~iting and signed by
the arbitrators joining in the award. The a~bit~ators shall deliver,
a copy of thei~ al/ard to each party by the method provided fo~ notice
by one party to anothe~ in this Ag~eement. The award shall be made
IJithin ninety (90) days f~om the date of tpe appointment of the. last
a~bi trato~ unless the parties consent in w~iting to extend this
period befo~e or after it expires. The award may be confirmed by any
cou~t having ju~isdiction on application of eithe~ party.
14.10 New Arbitrators. If the arbit~ators appointed pu~suant
to section 14.03 of this Ag~eement fail to make an al/a~d IJithin
ninety (90) days ft'om the date of the appointment of the la:;;t
arbit:rato~, they shall be discha~ged unless the' pat'ties consent 1n
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IJ~iting to extend this period. Ne~ a~bit~ato~s (o~ an arbit~ator)
shall be appointed and shall p~oceed in the same manne~ as specified
in this Ag~eement. The process shall be repeated until a final awa~d
is made.
14.11 Costs of Arbitration. The costs and expenses of
a~bitration, inclUding the fees of the a~bitrato~s and any atto~ney's
fees, shall be paid by the losing pa~ty or by both parties in the
p~opo~tions dete~mined by the a~bit~ato~s in thei~ awa~d.
ARTICLE XV
TSIRD PARTY BENEFICIARIES
15.01 No Thi~d Party Beneficiaries. It is the intention of the
pa~ties hereto that no provision of this Lease Ag~eement shall in any
way inu~e to the benefit of any thi~d pe~son (including the public at
la~ge) so as to constitute any such pe~son a thi~d party beneficiary
of such Lease Agreement or of any one o~ more of the terms the~eof or
otherlJise give ~ise to any cause of action in any pe~son not a pa~ty
to such Ag~eement. E'o~ pu~poses of this section, the corpo~ations
IJhich constitute B & H Joint Ventu~e shall be considered parties to
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ARTICLE XVI
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GENERAL PROVISIONS
16.01 Conditions and Covenants. All of the p~oVlslons of this
Lease shall be construed to be "conditions" as well as .covenants" as
though the wo~ds specifically exp~essing or imparting covenants and
conditions we~e used in each separate p~ovision.
16.02 No Waiver of Breach. No failure by either Lesso~ or
Lessee to insist upon the strict. performance by the other of any
covenant, agreement, te~m, o~ condi tion of this Lease or to exe~cise
any right or remedy consequent upon a b~each the~eof, shall
constitute a IJaive~ of any such' b~each o~ of such covenant,
agreement, te~m, o~ condition. No IJaiver of any b~each shall affect
o~ alter this Lease, byt each _ and eve~y covenant, c.ondition',
ag~eement, and te~m of this Lease shall continue in full fo~ce and.
effect with respect to any othe~ then existing o~ subsequent breach.
16.03 Time of Essence. Time is of the essence of this Lease,
and of each provision.
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16.04 computation of Time. Except ~he~e th is Lease gives a
date upon lJhich an act is to be pe~fo~med, the time in ~hich any act
provided by this Lease is to be done is computed by excluding the
fi~st day and including the last, unless the last day is a saturday,
sunday, or legal holiday, and then it is also excluded.
16.05 successors in Inte~est. Each and all of the covenants,
condi t ions, and ~estrict ions in this Lease shall inure to the benef it
of and shall be binding upon the pa~ties he~eto and their ~espective
hei~s, executo~s, administ~ato~s, legal representatives, successO~S,
assigns, or other successors in interest.
16.06 Entire Agreement. This Lease contains the entire
ag~eement of the parties ~ith respect to the matters cove~ed by this
Lease, and no other ag~eement, statement, or p~omise made by any
pa~ty, or to any em?loyee, off ice~, or agent of any party, Ilhich is
not contained in this Lease shall be binding o~ valid. '
16.07 Partial Invalidity. If any te~m, covenant, condition, or
p~ovis ion of this Lease is held by a cou~t of competent jurisdiction
to be invalid, void, o~ unenfo~ceable, the ~e:nalncer of the
p~ovis ions shall ~emain in full fo~ce and effect and shall in no IJay
be affected, impai~ed, or invalida_tea. -
16.08 Relationship of partle;: Nothing conta"ined in this, Lease
shall be deemed o~ construed by the parties o~ by any thi~d person to
c~eate the relationship of p~incipal and agent or of partne~ship o~
joint ventu~e o~ of any association betIJeen LessO~ and Lessee, and
neither the method of computation of rent no~ any othe~ p~ovisions
contained in this Lease no~ any acts of the parties shall be deemed
to create any ~elationship betlJeen Lessor and Lessee, other than the
relationship of Lessor and Lessee.
16.09 Interpretation of Language. The language in all pa~ts of
this Lease shall in all cases be simply const~ued acco~ding to its
fair meaning and not strictly for or against LessO~ o~ Lessee.
16.10 pennsylvania Law to Apply. This Agreement shall be
construed unde~ and in accordance with the lalJs of the commonllealth
of pennsylvania, and all obligations of the pa~ties created hereunC!er
are performable in cumbe~land County, pennsylvania. '
16.11 Definitions-construction. Unless othe~llise provided in
this Lease, o~ unless the context otherwise requi~es, the following
definitions and rules of construction shall apply to this Lease,
regardless of IJhether the te~ms are ca!?italized o~ not in any given
instance:
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(a) Number and Cende~. In 'this Lease, the neute~
gender includes the feminine and masculine, and the singula~ number
includes the plural, and the wo~d "person" includes corporation,
pa~tnership, fi~m, or association \oIhe~eve~ the context so requires.
(b) Mandatory and Permissive.
"ag~ees" a~e mandatory: "may" is permissive.
"Shall", "~ill", and
(c) Term Includes Extension's. All refel:ences to the
term of this Lease or the Lease Te~m shall include any extensions of
sucn'Term.
(d) Land and Premises. Leased Premises, Land, or
P~emises shall have one and the same meaning and shall include, whe~e
the context so ~equil:es, the imp~ovements to the Land. In the event
of a partial taking o~ condemnation, these te~ms shall be ~edefined
as p~ovided in section 9.07 of this Ag~eement. '
(e) Pa~ties. Pa~ties shall include the Lesso~ and
Lessee named in this Lease and successo~s in inte~est to them.
(f) Sublessee. As used he~ein, the Ilord "sublessee"
shall mean and inc!-ude in addition to a ,sublessee ,and subtenant, a
licensee, concessionail;e, o~ othe~ occupanl: o~ user of any po~ti_on o-f
the Leased Premrse-s- or bui.1ding or" improvements the~eon. :."
16.12 Captions. Captions of the a~ticles, sections, and
parag~aphs of this Lease a~e fo~ convenience and refe~ence only, and
the words contained the~ein shall in no way be held to explain,
modify, amplify, or aid in the inte~pretation, const~uction, or
meaning of the p~ovisions of this Lease.
16.13 Attorney's Fees. In the event eithe~ Lessor o~ Lessee
shall bring any action o~ proceeding for damages for an alleged
breach of any p~OV1Slon of this Lease, to recover rents, o~ to
enfo~ce, protect, or establish any ~ight or remedy of eithe~ party,
the p~evailing pa~ty shall be entitled to recove~ as a pa~t of such
action or proceedings ~easonable at to~ney I s fees and court costs.
16.14 Interest. Any sum accruing to Le~so~. or Lessee unde~ the
provisions of this Lease vhich shall not be paid when due shall bear
interest at the ~ate hereinafte~ spe'cified 'f~om the dat'e such payment
was first due, until paid. Inte~est shall be at the rate of fifteen
(15%) percent pe~ annum.
16.15 Modification. No amendment, modification, 01: alte~ation
of the te~ms he~eof shall be binding unless the same be in Il~iting,
dated subsequent to the date he~eof, and duly executed by the pa~ties
he~eto.
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16.16 Notices-Method and Time. A 1'1 notices, demands, o~
requests f~om one party to anothe~ shall be either: personally
delive~ed o~ sent by United States o~ p~ivate mail, certified o~
registe~ed, with provision fo~ the execution of a r:eceipt by the
~ecipient, postage pr:epaid, to the add~ess stated in section 16.17 of
this Ag~eement and shall be deemed to have been given at the time of
pe~sonal delive~y or at the time of mailing or: sending. .
16.17 Notices-Add~esses. All notices to be given under this
Ag~eement shall be addressed to the addresses of the pa~ties set
fo~th in the preamble to this A9~E;!emen t, o~ a t any other add~ess that
may subsequently be specified by ~~itten notice delive~ed in
acco~dance with section 16.16 he~of. Any assignee o~ successo~ of
any interest in this Lease Ag~eement shall immediately notify the
othe~ party of i ts ac:id~ess fo~ the pU~pose of ~ece ipt of notice.
16.18 Payment of Rent. All rents and othe~ sums payable by'
Lessee to Lessor shall be by check payable to Lesso~, delive~ed l.n
pe~son or mailed to Lesso~ at the add~ess set fo~th in the p~eamble.
Lesso~ may at any time change the p~ovisions of this section by
notice to the Lessee.
16.19 Broke~'s Commissions. Each of the parties ~epresents and
- warrants that there a'~e no. claims fo~ b~oker 's 'commissio.fis o~
-finde~ I s fees ih connection wi th the execution of this Lease, =ano
each of the pa~ties ag~ees to indemnify the othe~ against all
liabilities a~ising fr:om any such claim.
16. 20 Reco~ding. At the request of ei the~ pa~ty, the pa~ties
shall execute, acknowledge, and reco~d a memo~andum of lease.
Contempo~aneously with any such memo~andum, Lessee shall prepa~e and
execute an ackno~ledgement of the te~mination of the Lease, in
recordable fo~m, which shall be held by Lesso~ and not ~ecorded until
such time as this Lease is finally dete~mined to be te~minated. The
party so requesting the memo~andum shall bear the cost of prepa~ing
and recording the same and the acknolJledgement of the termination.
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16.21 Counterparts. This Lease has been executed by the
pa~ties in seve~al counte~pa~ts, each of which shall be deemed to be
an o~iginal copy.
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JOINT VENTURE AGREEMENT
THIS AGREEME:NT, made this 1.. ~ day of
and between:
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, 1991, by
Beale Enterp~ises, Inc., a Pennsylvania business corporation, whose
registered office accress is 3721 Ma~ket St~eet, (Rampden To~nship),
Camp Hill, Pennsylvania 17011, he~einafte~ sometimes ~eferred to as
"Beale Ente~p~ises", a joint ventu~e~, or a pa~ty to this Agreement,
AND
Club Management, Inc., a Pennsyl vania bus iness corporation, whose
registez:oed office accress is
he~einafte~ ~efer~ec to as "Club Management", a joint venture~, o~,
paz:oty to this Ag~eeUlent,
and is as follows:
1. E'ORI1ATION. The pa~ties volunta~ily associate themselves as
joint ventu~e~~ f9~ the pu~pose of conducting a hotel and ~estau~ant
business at 3721 Market St~eet, (Ham,pden, TOIJnship'), Camp ,Hill;
Pennsy1vania, 'known as the "Hampton Inn". - -:
2. NAME. The name of the Joint Ventu~e shall be B & 8 Joint
Venture. This name ',till be ~egiste~ed in the office of the Sec~eta~y
of Sta te of the Commonwealth of pennsyl vania as the fictitious name
of the Joint Ventu~e.
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4. CONTRIBUTIONS. Each of the paz:oties shall contribute the,~-i,
propoz:otion of working capital IJhich ~elal:es to the aspects of the Ii .
business of the Joint: Ventu~e for which such party is the principal :( ,
manage!::' as p~ovided in sections 7 and 8 of this Agreement. Neither , .
pa~ty shall be ~equ!.red to cont~ibute any other O~ additional working !;
capital. The funds to be conl:~ibuted by Club Management for ~o~king
capital shall be 5500.00. The funds to be contributed by Beale
Enterp!::'ises fo~ IJor:<!.ng capital shall be $500.00.
3. TERM. The Joint Ventu~e shall commence on the date of this
Ag~eement and shall continue fo~ a te~m of twenty (20) yea~s f~om the
Beginning Date established pursuant to section 2.01 of the Lease
Ag~eement: attached hereto as Exhibit "A", p~ovided, howeve~, that the
Joint Ventu~e may be te~minated by Club Management at the end of the
first five yea~s after the date of this Agreement, and at the end of
the second and third five year pe~ iods afte~ the date of this
Agreement, by sending written notice to Beale of such intention at
least one hUnd~ed t;;enty (120) days p~io~ to the expi~ation of the
" then cur~ent five 'year period. .,
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5. LIQUOR LICENSE. The Joint Venture is the o~ner of
Pennsylvania Liquor control Boa~d (PLCB) hotel liquor license number
TH 4949. This Joint Ventu~e Ag~eement is contingent upon the
app~oval by the PLCB of the amendment of the Joint Venture for
pu~poses of substitution of Club Management fo~ Hench Enterp~ises,
Inc., a p~ io~ joint ventu~e~, and app~oval by the PLCB of the change
of manager to Club Management or its designee. Upon termination of
the Joint Ventu~e, the pa~ties agree to transfe~ the license to Beale
Enterprises, o~ its designee, fo~ nominal conside~ation.
6 ~ LEASE OF PROPERTY. The joint venturers agree to lease the
hotel and restau~ant from O. paul' Beale and Mildred E. Beale uoon the
terms and conditions of the Lease Agreement attached hereto as
Exhibit "A", he~einafter ~efe~~ed to as the "Lease". In the event of
an election to terminate by B & H Joint Venture as provided in
section 3 of this Agreement, B & H Joint Ventu~e shall give notice to
te~minate the Lease as p~ovided in section 2.02 of the Lease. Club
Management shall pay the secu~ity deposit p~ovided for in section
3.09 of the Lease. In the event the said Lease expires or is
te~minated, B & H Joi:lt Ventu~e shall terminate. In the event that
the Joint Ventu~e or either of the joint ventu~e~s ~eceives a notice
conce~nir\g the right of first ~efusal contained in Article VI of the
.said Lease, the party receiving said notice shall immediately confirm
by writing that the othe~ "joint ven~turer has, received a copy,of the
said notice. Any"exercise of the safd -right of fi~st refusal shall
requi re the unanimous consent of the tIJO joint venturers. In the
event that the Joint Ventu~e does not exe~cise the said right of
first refusal, either of the joint venture~s shall have the right to
exercise the ~ight of fi~st refusal individually. In the event that
both joint venturers desire to exe~cise the ~ight of fi~st refusal
individually, then Club Management shall have the first opportunity
to 50 exe~cise, pro'lided, hOIJeve~, that the ~ight of fi~st refusal
does not apply to any t~ansfer to any lineal descendant, and spouse
of any lineal descendant, of O. paul Beale o~ Mildred E. Beale.
7. JOINT VENTURE MANAGEMENT: OVERALL. B & H Joint Venture
shall retain overall management responsibility fo~ all of the
business of the Joint Venture. In ~egard to any decision concerning
the operation o~ improvement of the hotel, Beale Ente~prises shall
,have sixty (60t) percent of the votes of the Join.t Ventur,e, and Club
Management shall have forty (40t) percent of the votes of the Joint
Venture.' In regard to any decision conce~ning the operation or
imp~ovement of the restaurant, Club Management shall have sixty (60t)
pe~cent of the votes of the Joint Venture, and Beale Enterp~ises
shall have fo~ty (40%) percent of the votes of the Joint Venture. In
the event of any dis?ute between the parties as to the classification
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of management decisions for:- PU~poses of
matte~ shall be submitted to a~bit~ation,
fo~, and the a~bitr:-ator:- shall be authorized
decisions into thei~ constituent parts
percentages accordingly.
voting per:-centages, the
as hereinafter provided
to b~eak do~n any sUch
and allocate voting
8. JOIN1' VENTURE MANAGEMEN1' ~ DAY-1'O-DAY. (a) Beale En tet"p~ i sea
shall have P~incipal management ~esponsibility fo~ the hotel po~tion
of the Joint Venture's business. Club Management shall have
P~incipal management ~esponsibility fo~ the restau~ant portion of the
Joint Ventu~e's business.
(b) Notwithstanding any other P~ovision in this Joint
Ventu~e Ag~eement, with respect to the ope~ation of the po~tion of
the jOint ventu~e~'s business which cOnstitutes the ~estau~ant at the
Leased Premises licensed by the PennsYlvania Liquo~ Cont~ol Boa~d,
both Beale Ente~Pt"ises and Club Management shall at all times have,
such rights as a~e r:-eC;;ui~ed by a licensee unde~ the Pennsylvania
Liquor Code, the regulations P~omulgated PU~suant ther:-eto, and the
di~ections of the PennsYlvania Liquo~ Control Boa~d.
9. MANAGEMENT COMPENSATION. In conside~ation of each joint
venturer' assuming' pdncipal management of the hotel and t"estau~ant
respectively, each .-joint venture~ shall re<;:eive a manasement fee
equal to all of the net .P~ofits of the portion of the JoInt- Ventu~e 's
business fo~ which they have p~incipal management ~esponsibility up
to a maximum of Six !lund~ed Thousand ($600,000.00) dolla~s per year.
Any net P~ofits of a por:-tion of the Joint Ventu~e's business in
excess of Six HUndr:-ed Thousand ($600,000.00) dolla~s pe~ yea~ shall
be distributed to the joint ventu~ers in P~opo~tion to their
interests in the Joint Ventu~e. In consideration of each jOint
venture~ receiving the fo~egoing management fee, each joint ventu~er
shall bear sole responsibility fo~ any net losses of the por:-tion of
the Joint Venture's business for IJhich it has P~incipal management
responsibility, and shall insure, defend and indemnify the Joint
Venture and the othe~ jOint venture~ f~om any such losses.
10. ACCOON1'ING. Fo~ PU~poses of section 9 of this Ag~eement,
net profi ts o~ losses fo~ each portion of the Joint Ventu~e 's
business shall be dete~mined by allocating all of the expenses, and
income, of the Joint Venture to ei ther the hotel o~ restau~ant. 1'en
thousand dollars ($10,000.00) of the ini t ial minimum monthly ~ent
(but none of the pe~centage ~en tal) fo~ the P~emises as set fo~th in
section 3.01 of the Lease attached here to as Exhibi t "A" shall be
att~ibuted to the hotel po~tion of the bUsiness. Afte~ the fifth
lease Yea~, two-thir:-ds (2/3) of the minimum monthly ~ent (but none of
the percentaoe ~ental) p~ovided fo~ in Article III of said Lease
shall be allocated to Beale Ente~p~ises and one-thi~d 0/3) of said
rent shall be allocated to Club Management. The ~emaining po~tion of
said ~ent fo~ the premises, inclUding any inc~eases in ~ent as
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calculated in said Lease, shall be att~ibuted to the ~estau~ant
po~tion of the business. In addition, all salaries, lIithholding
taxes, unemployment and ~orkman' s compensa tion insurance payments,
and any and all other expenses associated with employees of B & H
Joint Ventu~e, shall be allocated to the po~tion of the Joint
Ventu~e I s business to ~hich each employee' s se~vices ~elate. All
utilities and maintenance costs, pu~chases of supplies, invento~y,
and equipment, and any imp~ovements to the premises, shall be
allocated to the portion of the business to which they ~elate. Any
govecnmental fees o~ licenses relating to the ~estaucant business
shall be allocated to Club Management and any such fees or licenses
~elating to the hotel business shall be allocated to Beale
Enterp~ises. The enti~e $10,000 .00 secu~ity deposit pcovided fo~ at
section 3.09 of the said Lease shall be allocated to Club Management.
Any and all losses, depreciation, o~ othe~ expenses, shall be
allocated to the portion of the business to which they relate. It is
the exp~ess intent of this section that the~e will be no income O~',
expenses not allocated to eithe~ the hotel o~ the restau~ant portion
of the Joint Ventuce's business. All employees se:-vices, and all
expenses and income, shall be deemed to apply only to one aspect of B
& H Joint Venture's business (Le., hotel or ~estau~ant), unless the
pa~ties ente~ into a lI~itten statement to the contrary. In o~de~ to
,facilitate ca~rying out these accounting p~ovisions, the Jo-inl:-
Ve!}tu~e may ,establish sepa~ate checking ~nd o,the~ financial accounts
fo~ each portion of its business. In the' event of any dfspute as to
whether a pa~ticular item o~ income o~ expense is att~ibutable to one
portion of the business or the other, the matter shall be resolved by
arbitration as he~eafte~ p~ovided.
11. INSURANCE. Liability Insu~ance, Fi~e Legal Liability
Insu~ance, Imp~ovements and Betterments Insu~ance, all as ~elates to
the ~estau~ant portion of the Joint Ventu~e' s business and leased
premises, shall be allocated to Club Management as its expense. Club
Management shall provide, at its sole cost, a minimum of $100,000.00
of D~am Shop Insurance. All other insu~ance, including fire and
extended coverage on all motel and res taurant buildings, shall be
allocated to Beale Enterp~ise as its expense. Each party shall be
~esponsible for compliance with all requests of any insu~ance ca~rie~
concerning p~emises or ope~ations modifications to the po~tion of the
business o~ p~emises fOI; IJhich the respective pa~ty is ~esponsible,
fo~ day, to day management, and any costs of such .compliance shall be
allocated to the party so responsible. All insurance p~oceeds
~eceived by the Joint Ventu~e arising out of damage to the p~operty
shall be utilized fo~ the pcompt ~esto~ation of the pcope~ty to its
p~e-existing, or better, condition. All insurance shall be in the
name of B & H Joint Ventu~e, IJith Beale Ente~?rises and Club
Management as additional insu~ed as the i r interests may appear, and
IJith the lesso~s under the Lease as additional insuceds IIhe~e
necessa~y o~ appropriate.
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12. BOOKS AND RECORDS. All books and ~ecords of the Jo int
Venture, and all books and ~eco~ds of Beale Enterprises and Club
Management, shall be made available fo~ inspection and copying at any
~easonable time to the Joint Ventu~e and to Beale Enterprises and
Club Management, or to anyone of them. The Joint Ventu~e shall
designate office~s of one o~ both of the parties as signatories on
any checking o~ other financial accounts..
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13. INTERESTS IN JOINT VENTURE. Beale Ente~prises shall have a
fifty (50%) pe~cent interest in the Joint Ventu~e and Club Mi',nagement
shall have a fifty (50%) percent inte~est in the Joint Ventu~e.
14. FAILURE TO OPERATE. Should eithe~ pa~ty fail to manage the
day to day business of the port ion of the Joint Venture I s bus iness
fo~ IJhich it has prima~y ~esponsibility, fo~ a period of thirty (30)
days or mo~e, unless prevented by damage to that po~tion of the
premises, (e.g., by fire o~ flood, ~epai~s, acts of God o~ othe~,
causes beyond the cont~ol of the pa~ty), then the othe~ pa~ty shall
have the immediate right to ope~ate the po~tion of the business which
the defaulting pa~ty had the p~imary ~esponsibility to manage, and
shall have the option to terminate this Ag~eement after giving tIJenty
(20) days w~itten notice of its intention to terminate to the pa~ty
failing to so manage.
15. FAILURE TO 'SAffSFY EXPENSES AND CONDITIONS. In the event ..
that eithe~- pa~ty fails to ~eimburse B & H Joint Venture fo~ any loss
o~ expense allocated to it under this Agreement, o~ fails to take any
action or ca~~y out any duty ~equi~ed of it unde~ the terms of this
Agreement, the other party shall have the immediate ~ight to make up
such loss o~ expense and/o~ to take such action, and shall have the
option to te~minate this Ag~eement afte~ giving twenty (20) days
w~itten notice of its intention to te~minate to the defaulting party.
..In addi tion to any other ~emedy ava i lable to the non-defaul ting
pa~ty, the non-defaulting pa~ty shall be entitled to ~eimbursement
fo~ any and all out of pocket expenses associated ~ith making up any
such loss o~ expense o~ taking any such action.
16. EFFECT OF DEFAULT. In the event of the termination of this
Ag~eement fo~ reason of the default of one pa~ty he~eto:
(a) The defaulting party shall remain - obligated to the
othe~ party fo~ the po~tion of the rent due unde~ the te~ms of the
lease attached hereto as Exhibit "A" IJhich IJould be payable f~om that
pa~ty as p~ovided in section 10 of this Ag~eement, until the end of
the five (5) yea~ oeriod du~ing IJhich the b~each occurs, and the
fOllolJing five (5) yea~ period if the te~mination occurs ~ithin the
last ninety (90) davs of a five (5) yea~ pe~iod and no notice of
te~mination of the Liase had been sent as provided in section 2.02 of
the said Lease.
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(b) The non-defaulting pa~ty shall have the right to have
the said Lease assigned to it, to continue to operate the enti~e
business of the Joint Venture, to sole possession and control of the
p~emises, and to any and all invento~y, financi'al accounts,
imp~ovements, supplies, fixtu~es, o~ othe~ assets of the Joint
Venture, rega~dless of which port ion of the Joint Venture I s business
they relate to.
(c) The defaul ting pa~ty 'shall insu~e, defend and
indemnify the non-defaulting pa~ty against any loss attributable to
the defaulting pa~ty's po~tion of the Joint Ventu~e's business, as of
the date the te~mination becomes .ffective.
(d) The defaulting pa~ty shall be solely responsible to
the lessor fo~ any damages pu~suant to A~ticle XI of the Lease.
(e) A defaulting joint ventu~er shall be given the benefit
of section 11.04 of the Lease.
17. TERMINATION. Neithe~ pa~ty shall have the right to
terminate this Joint Venture, o~ this Joint Ventu~e Agreement, except
as exp~essly p~ovided fo~ in this Ag~eement.
18.- MAINTENANCE RESPONSIBILITIES. (a) Club Manacement shall be
~espons ible for, the carrying out and cost of all 'jn-aintenance and ~
~epair requi~ed to the inte~io~ of the restau~ant, including all
fixtures and pe~sonal prope~ty therein, and any alterations I
addi tions o~ changes made to the restaurant st~uctu~e by B & 8 Joint
Venture. Club Management shall also keep the a~ea surrounding the
restaurant reasonably neat and clean. Beale Ente~prises shall be
~esponsible fo~ all other maintenance and ~epairs, specifically
including all those ~equired fo~ motel operations and parking a~eas.
(b) In the event of damage or dest~uction to any po~tion
of the premises, the joint venturer ~esponsible fo~ maintaining that
po~tion of the p~emises shall be required to repair o~ ~ebuild
IJi thin a reasonable time.
19. ATTORNEY'S FEES. In the event of b~each of this Ag~eement
by one pa~ty, the non-breaching par,ty shall be entitled to ~easonable
attorney's fees ~ctually Jncurred in enforci~g its rights hereunde~.
20. NOTICES. All notices ~equired to be sent unde~ this
Ag~eemen t shall be sent by ce~ti fied Uni ted States mail, return
~eceipt requested, or by private mail providing fo~ a similar return
receipt, to the addresses of the parties given in the preamble to
th is Agreement, o~ such othe~ add~ess given by one party to the othe~
by notice conforming to the requi~ements of this section.
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21. WITBDRAWAL OF CAPITAL. No joint vent:ure~ shall ~ithdraIJ the
portion of the capital of the Joint Venture equal to its initial
contribution of capital provided fo~ at section 4 of this Agreement
without the exp~ess written consent of the othe~ joint venture~.
22. PROFITS AND LOSSES. Any net profits o~ losses that may
acc~ue to the Joint Ventu~e after payment of the management fees
p~ovided fo~ in section 9 of this Ag~eement, and after payment by the
individual joint ventu~ers to the Joint Venture of any net losses
which are the sole obligation of a joint ventu~er as provided fo~ in
section 9 of this Acreement, shall be dist~ibuted to or borne by the
join t ventu~e~s in equal p~opo~t ions.
23. FISCAL YEAR. The fiscal year of the Joint Ventu~e shall end
on the last day of Decembe~ of each yea~.
24. TIME DEVOTED TO JOINT VENTURE. Each Pa~tner shall devote
such time, attention, skills and ability in fu~the~ance of the Joint
Ventu~e' s business as are reasonably necessary for the success of
said business.
25. POWER TO BIND JOINT VENTURE. Neither joint ventu~er shall
have authority to bind the Joint Ventu~e o~ the oth~~ joint ventur~r
in making cont~acts and incu~ring obligations in thellame and ,on the
credit' of the Joint Venture if" the value of t-he7 cont~act o~
obligation shall exceed $1,000.00, without the express w~itten
consent of both joint venture~s. Any obligation incurred in
violation of this provision shall be charged to and collected from
the individual joint ventu~e~ incurring the obligation.
26. DISSOLUTION. On dissolution of the Joint Venture othe~ than
as a result of a default by one of the parties, the affairs of the
Joint Ventu~e shall be \/ound up, the assets of the Joint Venture
liquidated, the debts paid, and the surplus distributed pu~suant to
sections 9 and 22 of this Ag~eement.
27. SOLE AGREEMENT. This inst~ument contains the sole ag~eement
of the pa~ties ~elating to their Joint Venture and co~rectly sets
fo~th the rights, cuties, and obligations of each to the othe~ in
connection IJi th it as of its date. Any p~io~ ag~eements, p~omises,
negotiations, or' representations not expressly set fo~t;h in t1ils
Ag~eement are of no force O~ effect.
28. REAL ESTATE: TAXES. Pursuant to section 3.04 of the Lease
Agreement attached hereto as Exhibit "A", the parties do not
anticipate the payment of any ~eal estate taxes by the Joint Ventu~e.
29.
attached
thereto
ARBITRATION. The p~ovisions of Article XIV of the Lease
hereto as Exhibit "A" a~e inco~po~ated herein by refe~ence
as the arbitration p~ovisions of this Joint Ventu~e
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Narket street, Camp Hill, Cumberland County, Pennsylvania known as
the "Hampden Inn". Club Management has determined that it no
longer wishes to be part of the Joint Venture and the Assignee is
willing to replace club Management as the joint venturer.
Accordingly, Club Management has agreed to assign all of its
interest in the Agreement to the Assignee. This document is
intended to set 'forth the understanding of the parties hereto with
respect to such Assignment.
KNOW ALL MEN BY THESE PRESENTS that Club Management, as
Assignor, in consideration of the terms and, conditions set forth
herein,
together with One Dollar
( $1. 00) and other good
consideration, receipt and sufficiency of which is acknowledged,
from Assignee, does hereby grant, bargain, warrant, sell, transfer,
convey and assign unto Assignee all of its right, title and
interest as a joint venturer in and to that Joint Venture Agreement
dated July 22, 1991 referenced, above, together with any right to
utilize any trade names of the Joint Venture or the t~ade name
Kokomo's.
Further:
1. Club Management will indemnify, defend and hold harmless
Assignee and its officers, directors, shareholders, employees,
attorneys and agents, and all of its and their respective heirs,
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legal representatives, successors and assigns from and against any
and all claims, demands, suits, actions, proceedings, damages,
liabilities, penalties, costs, expenses and fees (including
reasonable attorneys I fees). arising from any failure of Club
Management to make any payments and to keep and perform all
agreements and obligations to be made, kept or performed on or
prior to' the date hereof by Club Management under the terms and
provisions of the Joint Venture Agreement hereinabove assigned.
Further, as part of this Assignment, Assignee agrees to perform all
of the obligations contained in the Joint Venture Agreement,
including all obligations referenced in a certain Lease Agreement
by and between D. Paul Beale and Mildred E. Beale, as lessor, and B
& H, as lessee, with respect to the premises located at 3721 Harket
street, Camp Hill, Cumberland County, Pennsylvania ("Lease
Agreement") from and after the date hereof and nothing contained
herein is intended to extend any terms and conditions of the Joint
Venture Agreement or of the Lease Agreement except as expressly set
forth herein.
2. B & H is the owner of a Pennsylvania Liquor Control Board
(" PLCB") Hotel Liquor License #H4 94 9. This Assignment is
contingent upon the approval of the PLeB as to this Assignment, for
purposes of substitution of Assignee for Club Management under the
Joint Venture Agreement, and approval by the PLCB of the change of
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Management, Inc. of its rights and obligations under the Joint
Venture Agreement to Great Location, Inc., upon the terms and
conditions set forth above in this Assignment by and between Club
Management, Inc. and Great Location, Inc.
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Beale EnterprIL!':es, Inc. agrees to cooperate and take all steps
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necessary with ~espect to the approval of the Pennsylvania Liquor
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Control Board 1.;0 the substitu~ion of j oint venturer and manager as
set forth above.
BEALE ENTERPRISES, INC.
Co-Venturer
ATTEST:
C/)1-;t/~./l E' :12--,-lL-
D. !J'&"d-
By:
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EXHIBIT "A"
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JOINT VENTURE AGREEMENT
THIS AGREEMENT, made this .1.. ~ day of
and betIJeen:
JuLy
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, 1991, by
Beale Enterprises, Ioc., a pennsyl vania bus iness cOt"po~ation, IJhose
registered office add~ess is 3721 Ma~ket St~eet, (Hampden To~nship),
Camp Hill, Pennsylvania 17011, hereinafte~ sometimes ~efer~ed to as
"Beale Entet'p~ises., a joint ventu~e~, o~ a pa~ty to this Agreement,
A'N D
Club Managemer.:;, Inc., a Pennsylvania business co~po~ation, IIhose
registered office ~dd~ess is
he~einafte~ refe~~ed to ~.s "Club Management", a joint venture~, o~
pa~ty to this AgreeMent,
and is as fo1lolls:
1. FOR11ATION. :'he ?at"ties volunta~ily associate themse!'les as
joint ven'tu~e~~ fpt" the r/ut"pose of conducting a hotel and restau~ant
business at 3721 Markee: St~eet, (Hampden' TOIJnship'), Camp ,Hill;
Pennsy1van ia, knolln as the . Hampton. Inn". - -
2. NAME. The naml~ of the ,Joint Ventu~e shall be B & H Joint
Ventu~e. This name lIi11 be registe~ed in the office of the Sec~eta~y
of State of the Common~e,llth of Pennsylvania as the fictitious name
of the Joint Venture.
3. TERM. The Joint Ventu~e shall commence on the date of this
Ag~eement and shall continue for a te~m of tIJenty (20) years f~om the
Beginning Date established put;.,~tant to section 2.01 of the Lease
Agreement attached hereto as Exhibit "A", provided, hOllever, that the
Joint Venture may be te~minated by Club Management at the end of the
first five years after the date of t."Jis Agreement, and at the end of
the second and third five yea~ peti,ods afte~ the date of this
Ag~eement, by sending IIritten notice tC' Beale of such intention at
least one hund~ed tllenty (120) days p~i,,~ to the expi~ation of the
" then cur7'ent five 'year period.
4. CONTRIBOTIOflS. Each of the pa~ties shall contribute the
propo~tion ,of lIorking capital IJhich ~e1ates to the aspects of the
business of the Joint 'V'entu~e fo~ IJhicll such party is the principal
manage~ as provided in sections 7 and 8 of this Ag~eement. Neithe~
pa~ty shall be requi~ed to cont~ibute a~y other o~ additional lIo~king
capital. The funds to be contributed ':JY Club Management for lIorking
capital shall be ~500.00. The fun~s to be contributed by Beale
Enterp~ises for vo~king capital shaJl be ~500.00.
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5. LIQUOR LICENSE. The Joint '1entut'e is the o'''ne~ of
P ennsy 1 van ia L iquo~ Con t~ol Boa t'd (PLCB) ho tel 1 iquot' 1 icense numbe~
TH 4949. This Joint Ventu~e Ag~eement is contingent upon the
app~oval by the PLCB of the amendment of the Joint Ventu~e fo~
purposes of substitution of Club Management fo~ Hench Ente~p~ises,
Inc., a prio~ joint ventu~e~, and app~oval by the PLCB of the change
of manager to Club Management or its designee. Upon tet'mination of
,the Joint Ventu~e, the pa~ties ag~ee to t~ansfe~ the license to Beale
Ente~p~ises, o~ its designee, fo~ nominal considet'ation.
6. LEASE OF' PROPERTY. The joint ventu~e~s agt'ee to lease the
hotel and restau~ant f~om O. Paul Beale and Mildred E. Beale upon the
te~ms and conditions of the Lease Ag~eement attached he~eto as
Exhibit "if", hereinafter- ~efe~~ed to as the "Lease". In the event of
an election to terminate by B & H Joint Ventu~e as p~ovided in
section 3 of this Agreement, B & H Joint Ventu~e shall give notice to'"
te~minate the Lease as p~ovided in section 2.02 of the Lease. Club
Managemen t shall pa:l the secu~ i ty depos i t pr:ov ided for- in sect ion
3.09 of the Lease, !n the event the said Lease expi~es or: is
te~minated, B & H Joi~:: Ventu~e shall ter-minate. In the e'/ent that
the Joint Ventur-e ot' eithe~ of the joint ventul:e~s ~eceives a notice
conce~ning the ~igh:: cf fir:st r:efusal contained in Ar:ticle VI of the
.said Lease, the pa~ty ~eceiving said notice shall immediately confirm
by IJ~ i t i ng tha t the other:' joint ven~tu~e ~ has ~ece i ved a copy of the
said notice. Any' exer-cise of the sai'd -~ight of fi~st re'fusal shall
~equi~e the unanimous consent of the tIJO joint ventu=e~s. In the
event that the Joint Ventu~e does not exe~cise the sa'id right of
fi~st ~efusal, either: of the joint venturers shall have the right to
exe~cise the ~ight of first refusal individually. In the event that
both joint ventu~ers desi~e to exe~cise the ~ight of fi~st ~efusal
individually, then Club Management shall have the first opportunity
to so exe~cise, p~ovided, hOIJever, that the right of fi~st ~efusal
does not apply to any transfe~ to., any lineal descendant, and spouse
of any lineal descendant, of O. Paul Beale or Mildred E. Beale.
7.. JOINT VENTURE MANAGEMENT: OVERALL. B & H Joint Ventu~e
shall retain ove~all management responsibility for: all of the
bus iness of the Joint Ven tu~e. In ~ega~d to any decision conce~ning
the opera t ion o~ ilDp~ovement of the hotel, Beale Enterprises shall
,have sixty (60%) percent of the votes of the Joi':l.t Ventu~e, and Club
Management shall have fo~ty (40\) pe~cent of the votes of the Joint:
Venture.' In ~egard to any decision conce~ning the operation or
imp~ovement of the ~estau~ant, Club Management shall have sixty (60\)
pe~cent of the votes of the Joint Venture, and Beale Ente~p~ises
shall have fo~ty (40%) per:cent of the votes of the Joint Venture. In
the event of any dispute betyeen the pa~ties as to the classification
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voting peccentages, the
as hereinaftec pt'ovided
to break do~n any such
and allocate voting
of management decisions fot' pu~poses of
matte~ shall be subr.littec to a~bit~ation,
for, and the a~bitrato:: shall be autho~ized
decisions into thei~ constituent pacts
percentages acco~dingly.
8. JOINT VENTURE KANAGEKENT: DAY-TO-DAY. (a) Beale Ente~prises
shall have principal management ~esponsibility fo~ the hotel po~tion
of the Joint Ventu~e's business. Club Management shall have
. p~incipal management t'esponsibility fo~ the ~estau~ant po~tion of the
Joint Venture's business. .
(b) Notllithstanding any other p~ovision in this Joint
Ventu~e Agreement, with respect to the ope~ation of the po~tion of
the jo int yen tu~e~ I s bcs iness IJhich cons tit utes the restaut'ant at the
Leased P~emises licensed by the Pennsylvania Liquo:: Control Boa~d';
both Beale Ente~p~ises and Club Management shall at all times have
such cights as a~e t'ec;ui~ed by a licensee undet' the Pennsylvania
Liquo~ Code, the ~esulat.ions p~omulgated pu~suant theceto, and the
di~ections of the Pennsylvania Liquo~ Cont~ol Bcat'd.
9. MANAGEMENT COMPENSATION. In conside~ation of each joint
ventu~er assuming' pdncipal management of the hotel and ~estau~ant
respectively, each :joint ventu~e~ shall ~eceive a man~sement fee
equal to all of the net 'p~ofits of the po~tioci of the Joint'Ventu~e's
business for which they have p~incipal management res;>onsibility up
to a maximum of six Hundt'ed Thousand ($600,000.00) dollat's per year.
Any net p~ofits of a pot'tion of the Joint Ventut'e's business in
eltcess of Six Hunct'ed Thousand ($600,000.00) dolla~s pe~ yea~ shall
be distributed to the joint venturers in p~oportion to their
inl:e~ests in the Joint Ventu~e. In conside~ation of each joint
venturer receiving the fo~egoing manag<:ment fee, each joint ventu~er
shall bear sole responsibility for any net losses of the po~tion of
the Joint Ventu~e's business forlJhich it has p~incipal management
responsibility, and shall insure; defend and indemnify the Joint'
Ventu~e and the other joint venturer f~om any such losses.
10. ACCOUNTING. Fo~ pu~poses of section 9 of this Agt'eement,
net profits o~ losses for each po~tion of the Joint Ventu~e 's
bus iness shall be determined by alloca t i ng all of the expenses, and
income, of the Joint Ven,tu~e to 'eithe~ the hotel o~ restaurant. Ten
thousand dollars ($10,000.00) of the initial minimum monthly ~ent
(but none of the pet'centage ~ental) fo~ the p~emises as set fo~th in
section 3.01 of the Lease attached he~eto as Exhibit "A" shall be
atl:~ibuted to the hotel pot'tion of the business. Afte~ the fifth
lease year, two-thirds (2/3) of the minimum monthly rent (but none of
the percentage ~ental) pt'ovided for in Article III of said Lease
shall be allocated to Beale Enterp~ises and one-third (1/3) of said
cent shall be allocated to Club Management. The remaining portion of
said rent for the pcemises, including any increases in rent as
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calculated in said Lease, shall be attributed to the restaurant
po~tion of the business. In addition, all sala~ies, \/ithholding
taxes, unemployment and \/orkman I s compensation insu~ance payments,
and any and all othe~ expenses associated IJith employees of B & H
Joint Venture, shall be allocated to the po~tion of the Joint
Ventu~e I s business to IJhich each employee I s se~vices relate. All
utilities and maintenance costs, pu~chases of supplies, invento~y,
and equipment, and any imp~ovements to the p~emises, shall be
allocated to the po~tion of the business to IJhich they ~elate. Any
'gove~nmental fees o~ licenses ~elating to the ~estau~ant business
shall be allocated to ,Club Management and any such fees o~ licenses
relating to the hotel business shall be allocated to Beale
Ente~p~ises. The entire .s10,000.00 security deposit pt'ovided fo~ at
section 3.09 of the said Lease shall be allocated to Club Management.
Any and all losses, dep~eciation, o~ othe~ expenses, shall be
allocated to the pot'tion of the business to which they relate. It is'
the express intent:' of this section that the~e IJill be no income o~
expenses not alloca::ec to eithe~ the hotel o~ the ~estaut'ant po~tion
of the Jo i n t 'Ien tut'e I s bus iness . All employees seE:"V ices, and all
expenses and income, shall be deemed to apply only to one aspect of B
& H Jointventu~e's b\:siness (i.e., hotel o~ ~estau~ant), unless the
pa~ties ente~ into a '.'ritten statement to the cont~at'Y. In o~det' to
facilitate cat'rying out these accounting p~ovisions" the Join!:
Ventu~e may ,establish sepat'ate checking "1!n,d othe~ financial accounts
fo~ eactJ po~tion of its business. In the event of any dfspute as to
whethe~ a pa~ticulat' item o~ income o~ expense is attE:"ibutable to one
po~tion of the business o~ the othe~, the matte~ shall be resolved by
a~bit~ation as he~eafte~ pt'ovided.
11. INSURANCE. Liabili ty Insu~ance, Fi~e Legal Liabili ty
Insu~ance, Imp~ovements and Betterments Insu~ance, all as ~elates to
the restaurant portion of the Joint Ventu~e I s business and leased
premises, shall be allocated to Club Management as its expense. Club
Management shall p~ovide, at its ':Sole cost, a minimum of $100,000.00
of Dram Shop Insu~ance. All other insu~ance, inClUding fi~e and
extended coverage on all motel and ~estaurant buildings, shall be
allocated to Beale Ente~pdse as its expense. Each pa~ty shall be
~esponsible for compliance with all ~equests of any insut'ance ca~~ie~
conce~ning premises o~ ope~ations modifications to the po~tion of the
business or premises for; ~hich the respective party is responsible,
for day, to day management, and any costs of such "compliance shall be
allocated to the party so ~esponsible. All insurance p~oceeds
received by the Joint Venture a~ising out of damage to the p~ope~ty
shall be utilized for the p~ompt resto~ation of the pE:"ope~ty to its
p~e-existing, o~ bette~" condition. All insurance shall be in the
name of B & H Joint Ventu~e, IJith Beale Enterpdses and Club
Management as additional insu~ed as thei~ inte~ests may appear, and
IJil:h the lessors under the Lease as additional insut'eds ~here
necessary o~ appropriate.
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12. BOOKS AND RECORDS. All books and ::eco::cs of the Joint
Venture, and all books and records of Beale Enterpdses and Club
Management, shall be made available for inspection and copying at any
reasonable time to the Joint Venture and to Beale Enterprises and
Club Management, or to anyone of them. The Joint Venture shall
designate officers of one or both of the parties as signatories on
any checking or other financial accounts.,
13. INTERESTS IN JOINT VENTURE. Beale Enterpdsas shall have a
. fifty (50%) percent intecest in the Joint Ventur:e and Club Management
shall have a fifty (50~) per:cent inter:est in the Joint Venture.
14. FAILURE TO OPERATE. Should e i t.her: party fail to manage the
day to day business of the portion of the Joint Ventur:e's business
for: 'Which it has pdmacy responsibility, for a pedod of thir:ty (30)
days or more, unless pr:evented by damage to that por:tion of the
premises, (e.g., by fice or: flood, repair:s, acts of God or: other:
causes beyond the control of the par:ty), then t.he othe:: part.y shall
have the immediate ::iSht to oper:ate the .,ort.ion of the business ...hich
t.he defaulting .,arty had t.he .,rimar:y r:es.,onsibility to manage, and
shall have' the o.,tion t.o ter:minate this Agreement after giving t....enty
(20) days IoIrit.t.en notice of its int.ent.ion to ter:minate to the .,ar:t.y
failing to so manage.
15. FAILURE TO SATfSFY EXPENSES AND CONDITIONS. In the event
that either- .,arty fails to ceimburse B & H Joint. Venture for: any loss
or: ex.,ense allocat.ed t.o it under: this Agr:eement, or fails t.o t.ake any
action or car:r:y out any dut.y r:equir:ed of it under: the terms of this
Agreement, the other: party shall have the immediate right. to make up
such loss or ex.,ense and/or: to take such action, anc shall have the
option to terminate t.his Agr:eement after giving t'Jenty (20) days
'Written notice of its intention to terminate to the defaulting party.
In addition to any other remedy available. to the non-defaulting
party, the non-defaulting par:ty shall be entitled to r:eimbursement
for: any and all out of pocket expenses associated \lith making up any
such loss or expense or: taking any such action.
16. EFFECT OF DEFAULT. In the event of the termination of this
Agr:eement for r:eason of the default of one par:ty hereto:
(a) The defaulting party sha;l.l remain' obl'igated to the
other party for the por:tion of the rent due under the ter:ms of the
lease attached her:eto as Exhibit "A" ...hich 'Would be payable fr:om that
.,arty as pr:ovided in section 10 of this Agreement, until the end of
the five (5) yeac pedod dur:ing ...hich the bceach occur:s, and the
follo...ing five (5) year: pedod if the termination occur:s \lit.hin the
last ninety (90) days of a five (5) year .,eriod and no notice of
tet"mination of the Lease had been sent as pr:ovided in section 2.02 of
the said Lease.
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(b) The non-defaulting .,ar:ty shall have the r:ight to have
the said Lease assigned to it, to continue to oper:ate the entir:e
business of the Joint Ventur:e, to sole possession and contr:ol of the
premises, and to any and all inventor:y, financial accounts,
impr:ovements, supplies, 'fixtures, or: other assets of the Joint
v~nture, regardless of \lhich portion of the Joint Venture's business
they relate to.
(c) The defaulting pacty shall insur:e, defend and
. indemnify the non-defaulting party against any loss attdbutable to
the defaulting .,arty's por:tion of the Joint Venture's business, as of
the da~e the termination becomes effective.
(d) The defaulting party shall be solely responsible to
the lessor for: any damages pursuant t.o Ar:ticle XI of the Lease.
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(e) A defaulting joint ventur:er: shall be given the benefit
of section Il.04 of the Lease.
17. TERMINATION. Neit.her: pact.y shall have the r:ight to
terminate this Joint Ventur:e, or this Joint Venture Agceement, except.
as expressly pcovided for: in this Agceement.
18.- MAINTENANCE RESPONSIBILITIES. (a) Club Man~geme!lt shall be
responsrble fot". the carrying out and cost of all maint.enance and
repair required to the intecior of the restaur:ant, including all
fixtures and' personal pr:opet"ty t.herein, and any alter:ations,
additions or changes made to the rest.aurant structure by B & B Joint
Venture. club Management shall also keep the at"ea sur:r:ounding the
restaurant reasonably neat and clean. Beale Enterpdses shall be
responsible for all ot.her: maintenance and repairs, specifically
including all those requir:ed fot" motel operations and parking aceas.
(b) In the event of damage or destt"uction to any por:tion
of the premises, the joint venturer r:es.,onsible fot" maintaining that
portion of the premises shall be required to repair or: r:ebuild
...ithin a reasonable time.
19. ATTORNEY'S FEES. In the event of ,breach of this Agceement
by one party, the non-br:eaching pa~ty shall be entitled to ceasonable
attorney's fees ~ctually ~ncurre~ in enforci~g its rights her:eunder.
20. NOTICES. All notices requi t"ed to be sent under: this
Agreement shall be sent. by certified United States mail, r:eturn
receipt request.ed, or by pdvatemail pt"oviding for a similar: return
rece ipt, to the addresses of the par:ties given in the pr:eamble to
this Agreement, or such other: address given by one party to the other
by notice confot"ming to the r:equirements of this section.
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21. WITHDRAWAL 0.. CAPITAL. No joint ventur:er: shall \lithdra.... the
.,ortion of the capital of the Joint Venture equal to its initial
contribution of capital provided for at section 4 of this Agr:eement
'Without the expr:ess vdtten consent of the othet" joint ventur:er.
22. PROFITS AND LOSSES. Any net profits or: losses that may
accrue to the Joint Venture after payment of the management fees
provided fot" in section 9 of this Agreement, and after: payment by the
individual joint ventur:er:s to the Joint Ventur:e of any net losses
. which are the sole obligation of ,a joint ventur:er: as pr:ovided for in
section 9 of this Agr:eement, shall be distributed to or: borne by the
joint venturers in equal pr:opor:tions.
23. FISCAL YEAR. The fiscal year of the Joint Ventur:e shall end
on the las t day of CeceUloer: of each year.
24. TIME DEVOTED TO JOINT VENTURE. Each Par:tne:: shall devote
such time, attentico:, s:dlls and ability in fur:ther:anceof the Joint
Ventut"e' 05 bus iness as a::a r:easonably necessar:y for: the success of
said business.
25. POWER TO BIND JOINT VENTURE. Neither joint ventur:ec shall
have authority to bind the Joint Venture or the other: joint venturer
in making contr:acts anc incur:ring obligations in the-name and ,on the
credit. of the Joint Ventur:e if" the value of t'he: contr:act or
obligation shall exceed SI,OOO.OO, 'Without the expr:ess \lr:itten
consent of both joint venturers. Any obligation incun'ed in
violation of this pr:o'lision shall be charged to anc collected from
the individual joint ventur:er: incurring the obligation.
26. DISSOLlJTION. On dissolution of the Joint Venture other than
as a result of a default by one of the parties, the affair:s of the
Joint Venture shall be \lound up, the assets of the Joint Venture
liquidated, the debts paid, and the surplus distr:ibuted pur:suant to
sections 9 and 22 of this Agt"eement.
27. SOLE AGREEMENT. This instrument contains the sole agreement
of the parties relating t.o theit" Joint Venture and cor:r:ectly sets
forth the rights, dut.ies, and obligations of each to the other in
connection wi th it as of its da te. Any pt"ior agreements, pr:omises,
'. negotia!:ions, or' r:epr:esentations not expressly set forl;:h in tnis
Agreement are of no for:ce or: effect.
.28. REAL ESTA~E TAXES. Pursuant to section 3.04 of the Lease
Agreement attached 'heteto as Exhibit "A", the par:ties do not
anticipate the payment of any real estate taxes by the Joint Venture.
29.
attached
thet:'eto
ARBITRATION. The provisions of Article XIV of the Lease
hereto as Exhibit "A" are incorpot"ated her:ein by r:efer:ence
as the a::bitr:ation provisions of this Joint. Venture
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Agreement. This incorporation by refet"ence is made solely for the
economy of not having to repeat those provisions in this document.
Wherever the context so requires, the references to Lessor and Lessee
in said Article XIV shall be interpreted to mean the parties to this
Agreement, and the references to the Lease shall be interpr:eted' to
mean this Joint Venture Agreement.
IN WITNESS WHEREOF, the parties set their hands and seals vith
o intent to be legally bound hereby, as of the day and date ficst above
vritten.
BEALE ENTERPRISES, INC.
Co-Venturer
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Secretary
~y: [J.V~~
D. Paul Beale, Pr:esident
ATTEST:
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CLUB' MANAGEMENT, INC.
Co-Venturer
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Secre ary' ,
By:
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ATTEST:
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Great Location, Inc,
January 28, 1998
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Based upon information received from my client, Great Location, loc, is in violation of
the following provisions of the said Joint Venture Agreement:
1.' You as a stockholder, director and officer of Great Location, loc, elected not to
manage the restaurant portion of the premises and took action to attempt to
transfer your interest in Great Location, Inc, and in the Joint Venture to Mr, Sean
Barowski as per public notice and application to PLCB to accomplish such
transfer, Such proposed action is in violation of paragraph 14 of said Joint
Venture Agreement and is an event of default.
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2, You did not pay to Hampden Township Sewer Rental for the months of October,
November and December, 1997 for the sum of One Thousand Seven Hundred
Eighty-sL"( and 25/100 Dollars (51,786,25) plus penalty which is in violation of
paragraph IS of said Joint Venture Agreement and is an event of default,
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3. You did not pay Hampden Township for additional Equivalent Dwelling Units
(E,D,U.'s) as the result of increased water consumption, The principal sum of
Eleven Thousand Nine Hundred Dollars (511,900,00) is due Hampden Township
and remains W1paid which is in violation of paragraph IS of said Joint Venture
Agreement and is an event of default.
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4, As a result of your operation of the Kokomo' s Restaurant, it caused a civil
lawsuit to be filed against my c~!ents which is captioned as follows:
Event Entertainment vs, B & H Joint Venture tla Hampton Inn and Don
BrOv.ll, Jr, and Beale Enterprises, Ine, and D, Paul Beale and Hench
Enterprises and Jack K, Hench, individually and as principal owners ofB &
H Joint Venture tla Hampton Inn et al; U ,S, District Court, Eastem District
of pennsylvania; Civil Action No, 1:97-CV-3288
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Eventually the case was transferred to the U,S, Middle District Court and
indexed as follows:
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Great Location, [nc,
January 28, 1998
Page 5
Event Entertainment vs, B & H Joint Venture tla Hampton Inn and Don Brown,
Jr. and Beale Enterprises, Inc, and D, Paul Beale and Hench Enterprises and Jack
K, Hench, individually and as principal owners of B & H Joint Venture tla
Hampton Inn et al; U.S, District Court, Middle District of Pennsylvania; Civil
Action No, 1:97.CV-01630 (Chief Judge Rambo),
The litigation was concluded by Great Location, Inc. paying to Plaintiffs the sum
of Two Thousand Five Hundred Dollars ($2,500,00), My clients, in order to
protect their interests engaged the professional services of the Law Finn of
Rhoads and Sinon, As the result of such litigation, my clients incurred expenses
for legal fees in the amount of Six Thousand Dollars ($6,000,00) which my
clients paid in full, Despite numerous demands by Lessors, Great Location, Inc,
refuses to reimburse Lessor the sum of SLx Thousand Dollars (56,000,00) they
expended for legal fees which is in violation of paragraph I of said Joint Venture
Agreement and is an event of default,
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Under paragraph 19 of said Joint Venture Agreement, Great Location, !nc, is
responsible for legal fees incurred by Lessor for the professional services of
Henry F, Coyne in order to address the events of default which Great Location,
Inc, caused,
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It is apparent that numerous events of default did occur, Therefore, my clients demand
you pay to them the following sums of money i~ediately,
Hampden Township:
$ 1,786,25
11.900,00
$13,686,25
Sewer Rent
Additional E,D,U, 's
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$6,000,00
6,462,17
13,686,25
January 1998 Rent
Rhoads & Sinon Fees
Sewer Fees to Hampden TO\\l1Ship
$26,148.42
TOTAL
Further, my clients demand payment from Great Location, [nc, for the cost of
professional services incurred by them by engaging my services,
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Great Location, Inc,
Janl11U)' 28, 1998
Page 6
My clients demand Great Location, Inc, and B & H Joint Venture vacate the premises,
My clients formally advise you as stockholder, director and officer of Great Location, Inc, they
terminate the involvement of Great Location, Inc, in the B & H Joint Venture; they suggest
appropriate documentation be executed to memorialize the termination; and confirm transfer of
all Great Location, Inc, interest in B & H Joint Venture to Beale Enterprises, Inc,
Mr. Brown, I request you or your legal counsel contact me as soon as possible in order to
execute the appropriate documents to formally conclude the B & H Joint Venture,
If you elect to ignore my client's demands, they will consider legal options which are
available to them in order to protect their interest,
. ta.ur-
HFeters
cc: Mr. & Mrs, D, Paul Beale
Robert E, Chemicoff, Esquire
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Defendant has failed to give notice of any violations on the Lease
Agreement to the Plaintiff.
WHEREFORE, Plaintiff requests the following relief:
A. Entry of an injunction pursuant to a separate motion
granting Plaintiff possession of the mentioned premises.
'. Award of damages to Plaintiff as a result of Defendant's
violation of the Lease Agreement.
0,,,, '/L-k~g :-
Jos~ph \ U ,- tz ~
Aft'orney for Sean Barowsk~
I.D. No. 32958
214 Pine Street
Harrisburg, PA 17101
717-232-0879
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LEA S E
A G R E E " E N T
THIS LEASE AGREEMENT is made and entered into by and bet\leen D.
Paul Beale and Mildred E. Beale, husband and wife, of 4409 Royal Oak
Road, (Hampden Township) , Camp Hill, Pennsylvania, hereinafter
referred to as "Lessor, and''1I "Ii B Joint Venture, a joint ventuce
or:ganized undec the laws of the Commonwealth of Pennsylvania, having
its office at 3721 Market Street, (Hampden Township), Camp Hill,
Pennsylvania, hereinaftec refecred to as "Lessee", and is as follows:
WHEREAS, Lessee is in the business of opecating hotels and
restaurants: and
WHEREAS, Lessee des i r:es to lease fr:om Lessor: a cectain tract of
real propecty as moce fully desccibed belo..., \lith the improvements
thereon erected: and
WHEREAS, Lessor: desices to lease th~ said tr:act of ceal property
to Lessee under the terms, conoitions and provisions as set out
herein:
NOW THEREFORE, for: anc in consideration of the pcemises and .
other: good and valuable consiger:ation, ,the receipt and sufficiency o-f_
...hich is her:eby ackno\lledged by -both pat"ties, and intending to - be.
legally bound, the parties hereby agree as follo\ls:
ARTICLE I
DEMISE OF LEASED PREMISES
1.01 Leased premises. Lessor, for: and in consider:ation of the
rents, covenants and conditions her:ein contained to be kept,
pecformed and observed by Lessee, does lea~e and demise to Lessee,
and Lessee does rent and accept from Lessor, the real arid personal
property, refereed to hecein as' "Leased Premises", kno\ln as the
Hampton Inn, located at 3721 Market Street, (Hampden TO\lnship), Camp
Hill, Pennsylvania; further: described in Exhibit "A", attached hereto
and incorporated her:ein by r:eference thereto, \lhich Leased Premises
shall include the land and all improve!!lents thereon er:ected as
described in that cer:tain sher:iff',s Deed to the Lessor:s recor:ded in
the Office of the Recor:der: of Deeds in and for Cumbecland County, at
car:l is Ie, Pennsylvania, in Deed Book "C", Volume 25, Page 127, and
\lhich shall include the business kno...n as the Hampton Inn and all
personal property and fixtur:es associated there\lith, including the
r:ight to the use of the name Hampton Inn.
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1.02 Lessor's Warranty of Title. Lessor her:eby represents and
warrants that Lessor is the owner in fee simple absolute of the
Leased Premises subject to covenants, condi tions, restrictions,
easements and other mattecs of record or on the ground.
1.03 Lessor's Warranty o"f Quiet Enjoyment. Lessor: covenan ts
and agrees that Lessee on paying the rent and other char:ges herein
provided for and obsecving and keeping the covenants, conditions lInd
terms of this Lease on Lessee I s part to be kept or per:formed, shl.\ll
laWfully and quietly hold, occupy and enjoy the Leased Premisel!l
during the term of this Lease without hindrance or molestation of
Lessor or any person Claiming under Lessor.
l.04 Lessor's Right to Mortgage. Lessor does not have a
current mortgage, or: other: lien, against the Leased Pr:emises. Lessor
reserves the r:ight to encumber: the property in any amounts as Lessor
in its sole discr:etion shall decide. Should Lessor: default in making
any payment on any such mortgage or encumbrance, Lessee shall have
the right to make such payment and deduct the amoun~ paid fr:om rent
due or: to become due under this Lease.
ARTICLE II
LEASE TERM
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2.0l Term. The term of this Lease shall b'e for a per:iod of
t\lenty (20) years beginning on the { day of AcJo
1991, 'Which shall be refer:r:ed to herein as the "Beginning pate".
2.02 Ter:mination Options. Lessee may Terminate this Lease at
the end of the fir:st five yeat"s from the Beginning Date, and t.he end
of the second or: thir:d five year periods from the Beginning Date, by
sending written notice to Lessor of such intention at least ninety
(90) days prior: to the expiration of said five yeac per:iod.
2.03 Bold Over. If Lessee shall hold over after: the
expiration of the Lease Term, ...ith the consent of the Lessor, such
tenancy shall be from month to month on all terms, covenants, and
conditions of this Lease.
2.04 Lease, Year. -The tet"ni Lease Year shall mean any twelve.
month period beginning on the Beginning Date or an anniversary of the
Beginning Date.
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ARTICLE III
RENT, TAXES, AND UTILITIES
3.01 Minimum Rent-Initial Five Years. (a) Dur:ing the ficst
five (5) years of this Lease, Lessee agrees to pay to Lusoc as rent
for the Leased Premises the sum of One Hundred Eighty Thousand
($IBO,OOO.OO) Dollars pet' year; in advance, in monthly installments
of Fifteen Thousand ($15,000.00) Dollars each, beginning on the
Beginning Date, and each successive month thereafter:, except that Ten
Thousand ($10,000.00) Dollacs of the r:ent for the eleventh (llth) and
twelfth (12th) months of this Lease, ($5,000.00 per month), shall be
pcvpaid as provided in section 3.09 of this Lease.
(b) Second, Third, and Fourth Five Year Periods. (I)
On the first day of the sixth Lease Year of this Lease (\lhich Lease
Yeac shall begin in the calendar yeac 1996), the basic annual cent
set forth in section 3.01 her:eof shall be increased or decreased for:
the ensuing five year period in the same pr:oportion that the
Wholesale Price Index figure Industr:ial Commodities (l967=100)
published by the Bur:eau of Labor Statistics, United States Department
of Labor:, for the month of August 1996, shall have inc::eased oc
decreased over: the said incex figure for: the month of August 1991.
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(2) On the first day of. the eleventh Lease Year of this
Lease '( \lhich Lease Year: shall beg iti;' in 'the, calendar: year 2001), the
basic annual rent set. for:th in section 3.01 hereof shall be increased
or decr:eased foe the ensuing five year: period in the same pr:opor:tion
that the said index for: the month of August 2001 shall have increased
or decreased over: the said index figure for the month of August 1996.
(3) On the fir:st. day of the sixteenth Lease Yeac of this
Lease (which Lease Year shall beg in in the calendar year 2006), the
basic annual rent set for:th in section 3.01 hereof shall be increased
or decreased foe the ensuing five year period in the same pr:opor:tion
that the said index for the month of August 2006 shall have increased
oc decreased over: the said index figure for the month of August 2001.
(4) The said annual r:ent as detet"mined above shall then be
divided by twelve, and the amount shall be paid monthly for the said
five year per:iod. BOllever:, in no event shall the increase in annu,al
rent appl i'cable to any five year period -exceed t\lenty-fi ve' (25\)
per:cent and in no event shall the annual ,rent evec be less ',than the
or:iginal annual rent.
(5) Lessor shall give Lessee at least sixty (60) days
advance notice of the revised cental amount, sho\ling the levels of
the said Index used to ar:r:ive at the ne\l rental amount.
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3.02 Substitute Indicator. If at any time pdor to the first
day of the second, thir:d, or foucth five year periods of this Lease
the said Index referred to in section 3. Ol (b) of this Lease shall
cease to be pUblished, thece shall be substituted thuefor the most
similar economic indicator .t;heJl published, if any. If Lessor and
Lessee cannot agree as to such substi tute, then the matter shall be
submitted to arbitration as hereinafter provided for.
3.03 Percentage Rental. (a) (1) In addition to the payment
of the minimum rent as her:einbefore provided, Lessee shall pay to
Lessor as percentage rental, 7' of the annual gross sales made in,
on, or from the restaurant portion of the Premises over: $900,000.00.
(2) For pur:poses of detecmining percentage rentals under:
this Lease, the end of an annual period and a lease year: shall be
deemed to occur: each June 30 during the original teem of this Lease
and any renewal ter:m.
(b) Said peccentage r:ent foe each lease year: shall
become due and payable thicty (30) days aft.ec the month in wh ich
gr:oss sales exceed the dollar amount in section (a) (I) and
ther:eafter shall be paid monthly on all additional gross sales made
dur: ing the remainder:, of, such lease year on all addi tional gross ~a1"es
made during, the cemaind~r: of such lease year. .' Whether: !?r:_.flot'
percentage r:ent is due for: any-such month, Lessee covenants to sucmit
to Lessor within thir:ty (30) days aftet" the end of every month a
statement setting for:th gr:oss sales made dur:ing such month signed by
Lessee and cer:tified to be complete and correct. Fur:ther:, Lessee
covenants to submit to Lessoc within sixty (60) days aft.er: the end of
each lease yeac, an annual statement setting for:th gross sales made
during such lease yeac signed by Lessee and certified to be complete
and correct. Any period of less than twelve (12) full months within
the term of this Lease shall be adjusted foe percentage rent, which
shall be based on the amount, if any, by which the gr:oss sales foe
said period exceeds the pr:o-ratil. portion of the dollar: amount in
section (a) (1) . The pr:o-rata pot"tion shall be calculated \Ii th the
numerator equal to the number of days in the said per:iod and the
denominator: equal to 365 days times the said dollar amount.
(c) "Gcoss sales", as used hecein, shall mean the
amount of sales of all mer:chandise or services sold or 'rendered in,
'on, about or fr:om the r:estaur:ant portion of the Premises by Lessee or
any subtenants, licensees or concessionaires, whether for cash or on
a charge, credit or: time basis without reserve or deduction for:
inability or failure to collect, including but not limited to such
rentals, sales and ser:vices (1) ...here order:s or:iginate and/or: are
accepted by Lessee in the Premises but deliver:y or: perfor:mance
thereof is made from pr at any place other than the Premises, (2)
pursuant to mail, telegraph, telephone or: other: similar or:ders
rece i ved or: filed at or in the Pr:emises, (3) by means of mechanical
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and other vending machines in or on the Premises, (4) \lhich Lessee in
the normal and customacy course of business would cr:edit or attcibute
to its business upon the restaurant portion of the Pcemises oc any
part or parts thereof. Thece shall be deductible fcom gross sales:
(1) amount of refunds, allo\lances or discounts to customecs, pcovided
they have been included in gt:oss.. sales and provided further that if
such I:e~unds, allo\lances or: discoun ts are in the form of cr:edi ts to
customers, such cr:edits shall be included in gross sales \lhen used,
(2) returns to shippecs and manufacturers for credit, (3) sales of
trade fixtures oc operating equipment after use theceof in the
conduct of Lessee I s business in or on the Premises, (4) all sums and
credits received in settlement of claims for loss or damage to
merchandise, (5) amounts of any excise or sales tax levied upon
retail sales and payable over to the appropriate governmental
authority, provided that specific recor:d is made at the time of each
sale of the amount of sales tax, and the amount theceof is expr:essly
chacged to the custome::.
(ci) Lessee covenan t s and agrees to keep upon the
Pr:emises at all times ducing the term of this Lease, becks and
r:ecor:ds in accordance .ith gener:ally accepted accounting pr:actices of
all business concuc:ec a: the pr:emises in \lhich shall be r:ecor:ded
gt"oss sales. The boo~s, and r:ecorcis of account sh~ll also include all
, federal, -state and local tax r:eturns of Lessee ,relatino to Lessee's
sales, as ....ell as all pertinent original sa1e;' r:ecords \lhich 'shall
include but not be limited to the follo...ing: (1) daily dated cash
r:egister tapes, (2) cated sedally numbered sales slips, (3) daily
bank deposit slips I (4) bank statements, ...hich can be conveniently
segregated from othe:: business matters of Lessee, (5) settlement
report sheets of tr:ansactions \Ii th subtenants, concessiona ir:es, and
licensees, (6) det.ailed or:iginal records of any exclusions or
deductions from gr:oss sales, (7) such other recocds, if any, vhich
\lould normally be examined by an independent accountant pur:suant to
accepted auditing standar:ds in performing an audit of Lessee's sales.
Such books and records shall be open to the inspection of Lessor and
Lessor I s duly author:ized agen ts a t all reasonable times during
business hours at any time during the term of this Lease and for a
periOd of at least one (I) year after: the termination of this Lease.
If Lessor should make an audit of Lessee's recocds and Lessee's gt"oss
sales statements should be found to, be understated by mor:e than 1%,
then Lessee in additici'n to paying the percentage rental"due for such
understatement shall pay to Lessor: the cost of the audit. If any
governmental tax authodty shall incr:ease gross sales as r:epor:ted by
Lessee on any such tax r:et.ur:n after: audit, foe any lease or: fiscal
year, or any por:tion ther:eof, for: vhich gcoss sales have been
reported, then the Lessee shall not i fy the Lessor: pr:omptly of such
increase and pay any additional percentage rental due Lessor:.
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(e) If Lessee shall fail to prepare l,ld deQ,Jv .....;I{.t~.... "
the time heceinafter specified any statement of gr:CS'; C;~e.\ iU;~O-<<...
her:eunder, Lessoc may elect to treat Lessee's said -jl~h.....c. o....<\,
breach of this Lease, entitling Lessor to terminate this 1.&Q....l/..0"""
Lessee's right to possession of the Premises, or both, but only att~
Lessor has given Lessee notlce- in \lriting as hereinafter provided.'
If Lessee fails to prepare and deliver said statement within fifteen
(IS) days after ceceiving said notice, Lessor may also, in the
alternative, elect to make an audit of all books and records of
Lessee, including Lessee's bank accounts which in any way pectain to
or: show gross sales and to prepare the statement oc statements which
Lessee has failed to prepar:e and deliver. Such audit shall be made
and such statement cc statements shall be prepaced by an accountant
selected by Lessor. The statement or: statements so prepar:ed shall be
conclusive on Lessee, and the Lessee shall pay on demand all expenses
of such audit and of the pceparation of any such statements and all
sums as may be sho\ln by such audit to be due as per:centage cental.
(f) In comput.ing damages or: r:ent.al due under: this
Lease the value of per:centage t"ental for: any per:iod subsequent to the
ter:mi na t ion of this Lease or: the ter:mina tion of Lessee 's cigh t of
possession shall be an amount pee year equal to cna thir:d of the
tot.al.. per:centage r:ent paid by - Lessee for the last .three (3) full
lease year:s immediately pr:ece-f1ing ,such termination, and if ,less than
thcee (3) full :year:s shan have elapsed, sllch value shall be an
amount per yeac equal to the aver:age year:ly pe::centage r:ental
theretofor:e paid.
3.04 Lessor to Pay Taxes. Lessor agr:ees to pay all real
pr:operty taxes, special taxes, or: assessments, including street
impt"ovement liens, if any, levied or assessed upon or against the
Leased Premises and any improvements or: fixtur:es er:ected or situate
thereon, ducing the Lease Term. Lessee agrees to pay all pr:oper:ty
taxes on its personal property located on the Leased Premises.
3.05 Installment Payment. In the event any special tax or
assessment is levied or: assessed on the Leased Premises which becomes
due and payable dur:ing, and the delinquency date for \lhich falls
'Within, the Lease Ter:m, or any extension, which tax or: assessment may
be legally paid in installments (\lhether by subjecting .the, demised
property to bond oc other:vise), Lessee shall have the option' to pay
such tax or: assessment in. installments. In the event of such
election, Lessee shall be liable only for those installments of such
tax or assessment \lhich become due and payable during, and the
delinquency date for: ...hich falls \lithin, the Lease Ter:m, or any
extension. Lessor: agr:ees to execute any instrument that may be
necessar:y to per:mit the payment of such special tax or: assessment in
installment.s.
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3.06 Excluded Taxes. Lessee shall not be r:equ ired to pay any
fcanchise, estate, inhedtance, succession, capital levy or tr:ansfer
tax of Lessor, oc any income, excess pcof i ts, or: revenue tax, or any
other tax, assessment, chacge oc levy upon the rent payable by Lessee
under this Lease, and all such taxes, assessments, chacges and levies
shall be payable by Lessoc. Lessor shall not, without consent of
Lessee, do any act \lhich \Ii 11 .c;aWle the taxes and assessments on the
Leased Premises to be increased.
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3.07 Contest. Lessee shall have the dght to contest the
assessment, account oc validity of any tax which is Lessee's
obligation under the terms' of this Lease by appr:opr:iate legal
proceedings. Lessoc shall, upon request, join in any such
proceedings if Lessee detet'mines that it shall be necessacy or
convenient for Le~sor: to do so in order for Lessee to pcosecute such
proceedings proper:ly.
3.08 Utility Charges. Lessee shall payor cause to be paid
all charges foe \lat.e:.-, heat. gas, electricity, se\ler:s, and any and
all othe:.- utilities used upon the Leased Premises thcoughout the ter:m
of this Lease, including any connection fees.
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Security Deposit. A security deposit in'- cu., t of
Ten Thousano ,000.00) Dollacs shall be paid essee to Lessor:,
S2,SOO.00 upon exec her:eof, and S'2,5 with each of the ,first
thcee monthly-:j,ease payment . er ~er, for the payment of rent.s to
b'ecome due to Lessor unde 1S eement, and for: the faithful
performance by Lessee _ all the other: 0 _' ations her:eunce:: and for
the payment of a and all sums of moneys for Lessee may be oc
become lia ereunder, provided, ho...ever, that the : secur:ity
deposi all be applied to r:ent due and payable in the e nth
(ll and twelfth (12th) months of the first yeac of this Leas~,nd
eceafter there shall be no security depos it. c:d(.1.3
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ARTICLE IV
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DSE OF PREMISES
4.01 Permitted Use. Lessee shall have the dght. to use the
Leased Premises for the continuation of the hotel and restaurant and
bar uses for which it. is cur:r:ently being uS,ed, and for: any and all
natural extensions or'r:enovat.ions of those uses. All uses descr:ibed
in this section shall be pecmitted" but none shall be r:equired,
except as set for:th in section 4.06 of this Agreement.
4.02 Signs. Lessee shall have the right to erect and maintain
upon the impr:ovements and on the Leased Premises such signs as it
deems appropt"iate to the conduct of its business. Lessee shall have
no eight to er:ect or maint.ain any sign used foe the purpose of
adver:tising any business, activity, or position othe:: than the
business oc businesses of Lessee carried on on the Leased Premises.
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4.03 Waste and Nuisance. Lessee shall not commit., or: suffer
to be committed, any vaste on the Leased Premises or any impr:ovements
er:ected or situate thereon, noc shall it maintain, commit, or permit
the maintenance or commission of any nuisance on the Leased pcemises
or use the Leased Premises or improvements for any unla\lful purpose.
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4.04 Termination if Use Becomes Unlavful or Impossible. If it
is or becomes unla\lful foe Lessee, or anyone holding under Lessee
directly oc indirectly, to conduct the business described and
anticipated in section 4.01 of this Agreement on the Leased Premises,
so that it becomes impossible to use the Leased pr:emises for: the
purpose desccibed in section 4.01 of th is Agreement, oc such use is
declared unla\lful, then Lessee shall have the right at any time
ther:ea!ter to terminate this Lease by giving Lessoc one hundced
eighty (ISO) days notice in \lriting of such termination.
4.05 Rent Abatement if Premises are Temporarily Unusable. If,
as a result of fire, flood, or insurrect ion, the Leased pr:emises
shall become unusable for: Lessee's purposes, fcom a practical
standpoint, for: a pedoc of thit"ty (30) consecutive cays or longer,
then Lessee may, by notice in \lriting from Lessee to Lesso::, at any
time prioc to the cate \lhen this Lease ...ould other:\lise ter:minate,
extend this Lease, \lithout the requirement:' of the payment of rent,-
fo~' the period of time \lhlch, the Leased -Et:emises \las unusable from a
prac€ic'al standpoint for: the purposes -described' in section 4.01 of
this Agreement.
4.06 Continuous Use. Should Lessee fail to ope::ate the hotel
or: restaurant situate on the Leased premises for a per:iod of thirty
(30) days, unless pr:evented by damage to the Leased Premises, (e. g.,
by fire or flood, r:epairs, acts of God or other causes beyond the
control of Lessee), then Lessor shall have the option to terminate
this Lease Agreement after: giving twenty (20) days \ldtten notice of
its intention to terminate to the Lessee.
4.09 Illegal Activity. Lessee shall not engage in, pecmi t,
nor suffer anyone else to per:mit, any illegal or criminal activity or
status to be cacried on or exist at the premises. Should Lessee not
cease any such illegal or criminal acti vi ty, or: correct any such,
illegal or criminal status, then Lessee shall be in default and.
Lessor shall be. entitled to the remedies set forth at section 11.01
of this Agceement upon giving the thirty (30) day notice pcovided for
therein.
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4.10 Arbitration. Any dispute between Lessor: and Lessee ~s to
what constitutes a pecmitted or: prohibited use, or \laste oc nuisance,
or: cause for: tecmination oc r:ent abatement, all as provided in this
Article IV of this Asceement, shall be submitted to arbitr:at.ion as
her:einafter: pr:ovided f6r.
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ARTICLE V
LESSEE IMPROVEMENTS AND PROPERTY
5.01 ownership of Lessee Improvements. All fixtures, and any
replacements of existing personal property, installed in oc placed
upon the Leased Premises by [,ess-ee, shall be and remain the property
of Lessee until transferred to Lessor pursuant to the teems of this
Agreement, and pacticularly, pursuant to the terms of section 12.03
of this Agreement. Any personal property placed in the Leased
premises by the Lessee which is not a replacement of existing
personal property shall remain Lessee's property and shall ce~ain so
upon the termination of this Lease for: any reason.
5.02 Lessee's Mortgage. Lessee agrees to execute a moctgage
or financing statement in favor of Lessor in an amount equal to the
total sum expended by Lessee foe all alterations, changes and
additions to the Leased Premises. The sole purpose of such financing
stat.ement anc mor:tgage is to secure Lessor's interest in the event of
execu t ion, levy, bankruptcy or: other: act ions adver:se to Lessee or
Lessor.
ARTICLE VI
-RIGBT OF ?IRsT REFOSAL
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6.01 Transfer:. In the even t of any proposed tr:ansfer of any
inter:est in the Leased Premises by Lessor, Lessee shall have the
right of first refusal to purchase on the same terms and conditions
as offered by or to the pr:oposec transferee, pcovided, hO\lever:, that
this Right of First Refusal shall not apply to any transfer: to any
lineal descendant (and spouse of any 1 ineal desc,endant l of the
Lessor. The right of first refusal must be exercised, in \lriting,
within ten (10) business days after receipt of written notices of the
proposed transfer (to include all terms and conditions thereof and
the identity of the proposed tr'ansferee), ...ith settlement to take
place within ninety (90) days thereafter. Should any of the ter:ms or
conditions of any pr:oposed tt"ansfet" involve cir:cumstances other: than
the amount and timing of monetary payments, then Lessee may pr:ovide
the reasonable equivalent thereof in cash.
6.02 Additional Terms. Lessor' her:eby consents -to the
assignment of this dght of first refusal from Lessee to one of the-
joint venturer:s of the Lessee. No written notice of a proposed
transfer shall be effective if any of the terms of the pr:oposed
transfer shall change, in which event, a new notice shall be sent.
No failure to exe!:'cise the eight of first refusal shall act. as an
election to waive the right of first cefusal, or: right to notice from
Lessot", in the event of any futur:e pr:oposed tt"ansfer:, or: in the event
of any change in ter:ms 'of a pr:oposed tt"ansfer.
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ARTICLE VII
REPAIRS AND RESTORATION
7.01 Lessee's Duty to Repair. Lessee, at Lessee's o\ln cost
and expense at all times dudng the term of this Lease, agc.es to
keep and maintain; ,or cause t.o. be kept and maintained, all buildings
and improvements ecected upon the Leased Premises in a good state of
appearance and repaic, ceasonable wear and tear excepted, pcovided,
hO\lever, that Lessor shall be solely cesponsible foe all packing lot
repairs.
7.02 Si:I:ty Percent Damage - Termination Option. If, by fire,
flood, explosion, public enemy, riot, civil commotion, or act of God,
the premises during the teem shall be damaged in excess of sixty
(60\) percent, this Lease, at the option of Lessee, to be execcised
by notice to Lessor in wr:iti~g, shall cease and terminate. The term
"damaged in excess of sixty (60\) per:cent" shall be constcued to mean
such damage to the buildings or: impr:ovements occupiec by Lessee
(excluding damage caused solely by ...ater: used in extinguishing fir:e),
as \lill require an expenditur:e in excess of sixty (60\) pe::cent of
the macket value (prior to the damage) of the builcings or
impr:ovements, in or:de:: to make r:epair:s.
7 :03 Damage Less than Sixty Percent - Repairs., If, by fi re,
flood, explosio~, public'enemy, rict, civil commotion, 'oc act of God,
the premises during the ter:m shall be damaged to an extent less than
sixty (60\) percent (or: in excess of sixty (60\) peccent and Lessee
shall not exercise its option to ::.er:minate this Lease) Lessee shall
repair (with Lessee's funds or any insur:ance funds) the premises \lith
due diligence, and this Lease shall continue in full for:ce and
effect.
7.04 Inspection by Lessor. Lessee shall permit Lessor and its
agents to enter into and upon the Leased Premises and any
impr:ovements erected ther:eon at all reasonable times for: the pur:pose
of inspecting the same or: for: the purpose of maintaining or: making
repairs to the improvements \lhich Lessor elects to do pursuant. to
this Article.
7.05 Delivery of Proper:ty. ~essee shall, thcoughout the Lease
Ter:m, maintain t'he Leased. pr:emises and all improvements erect.ed or
situate thereon as pr:ovided in section 7.01 of this Agreement and
shall, et the termination of this Lease, deliver up the pr:emises in a
clean and sanitary condition in substantially the same condition that
existed on the Beginning Date, reasonable wear: and teac, damage by
the elements, acts of God, \lar and any act of war excepted, provided,
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however, that any insurance pcoceeds for any such casual ty not used
to repair: oc replace the Leased Premises ot" impcovements shall be
paid over to the Lessor and Lessee shall be responsbile to Lessor: for --
any deficiencies in insurance or lack of coverage oc deductible.
7.06 Lessor's Right td Repair. In the event Lessee should
neglect to reasonably maintain the Leased Premises and all
improvements erected or situate thereon, Lessor shall have the right,
but not the obligation, to cause repairs or corrections to be made,
and any reasonable c~sts therefor shall be payable by Lessee to
Lessor as additional rental on the next monthly rental payment due
after notice from Lessor to Lessee of the cost of such cepairs or
corrections, pcovided, hO\levec, that prior to making or: causing to be
made llny such repairs, maintenance, or corrections, Lessoc shall give
Lessee thirty (30) days \lri t ten notice, wi thin which time Lessee
shall have the oppoctuni ty to per for:m such repairs, maintenance, or
corrections, or: object to the necess i ty of des icability of such
repairs, maintenance or corrections, and if Lessor: anc Lessee shall
be unable to agree on the extent of repairs, maintenance, or
corrections to be mace, if any, ...ithin thirty (30) cays follo\ling
notice of such objection, then the dispute shall be submitted to
arbitration as proviced in section 7.07 of this Agr:eement.
7.07 Arbitration." Any dispute bet\leen ~essoc and Lessee:a~ to
what 'constitutes. sufficient. repait" and maintenance shall be submi~ted
to arbitration as her:einafter: provided fot".
ARTICLE VIII
MECHANIC'S LIENS
8.01 Prohibition of Liens on Pee or Leasehold Interest.
Lessee shall not suffer or permit any mechanic's liens or: other: liens
to be filed against the fee of the Leased Premises nor: against
Lessee's leasehold interest in th'e Leased Premises, by reason of any
work, labor, services or materials supplied or claimed to have been
supplied to Lessee or: anyone holding the Leased Premises or: any part
thereof through or: under: Lessee.
8.02 Removal of Lien~ by, Lessee. If any such mechanic's liens
or materialman's lien shall be recor:ded against the Leased pcemises,.
or any improvements thereof, Lesse'e shall cause the same to be
removed or, in the alternative, if Lessee in good faith desires to
contest the same, Lessee shall be pr:ivileged to do so but in such
case Lessee hereby agcees to insure, defend, indemnify and save
Lessor harmless from all liability for damages occasioned theceby and
shall, in the event of a judgment of for:eclosure upon said mechanic's
lien, cause the same, to be discharged and removed pdor: to the
execution of such judgment.
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ARTICLE IX
CONDEMNATION
9.01 Interests of part..ieo on Condemnation. In the event the
Leased Premises oc any part thereof shall be taken foe public
purposes by condemnation all a result of any action oc proceeding in
eminent domain, oc llhall be transferred in lieu of condemnation to
any authority entitled to exercise the power of eminent domain, the
interests of Lessoc and LeSllee in the award or consideration for: such
transfer and the effect of the taking or transfer upon this Lease
shall be as provided by this Article.
9.02 Total Taking - Termination. In the event the entire
Leased premilles is taken oc so transferred, this Lease and all of the
right, title, and intecest thereunder shall cease on the date title
to such Leased Premises vests in the condemning author:ity, and the
pr:oceeds of such condemnation shall be divided as follo~s:
(a) Lessee shall receive any and all a..a::ds for: the
unexpired Lease Term, plus moving expenses, and any other sums to
\lhich a 'Lessee \loulc be pcoperly and la...fl1lly entitled (except any
a\lards,or"proceeds allocated pursuant to sub-section (b) her:eaftee).
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(b'i Lessor shall r:"eceive all of the -sa'id"othe:: condemnation
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pcoceeds.
9.03 Partial Taking - Condemnation. In the event of .the
taking or trans fee of only a part of the Leased Premises leaving the
remainder of the pr:emises in such location, or in such for:m, shape,
or reduced size as to be not. effectively and practicably usable for
the purpose of oper:ation theceon of Lessee's businesll, this Lease and
all right, title, and inter:est thereunder s.hall cease on the date
title to the Land or the portion thereof so taken or: tr:ansferred
vests in the condemning authority. On or befor:e the date of said
vesting in the condemning authority, Lessee shall notify Lessor: that
it considers the par:tial taking to render the Leased pr:emises
pr:acticably unusable in its opinion and that it will consider the
Lease to be terminated upon said vesting. Should Lessor disagree
wi th Lessee 'liS determination that the' taking renders toe Leased
Premises practicably unusable, Lessor shall in turn notify Lessee
~ithin twenty (20) 'days of receipt of Lessee's notice and ther:eafter
the matter may be submitted by either of the partiell to arbitration
as hereinafter provided. The peoceeds of such condemnation shall be
divided according to the pr:ovisions of section 9.02 of this Lease.
9.04 Partial Taking - Continuation with Rent Abatement. In
the event of a taking or transfer of only a part of the Leased
Premises, leaving the remainder of the premises in such locat.ion and
in such form, shape, or: size as to be used effectively and
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practicably in the opinion of the Lessee for the purpose of opecation
thereon of Lessee's business, this Lease shall terminate and end as
to the portion of the pr:emises so taken or transferred as of the date
title to such portion vests in the condemning authodty, but shall
continue in full force and effect as to the portion of the Leased
Premises not so taken or tcansferred. From and after such date, the
rental required to be paid by Lessee to Lessor shall be reduced in
the proportion to which the value of the area and impr:overaents so
taken or tr:ansferred bears to the total value of the area and
improvements of the Leased Premises and easement area. The proceeds
of such condemnation shall be divided according to the provisions of
section 9.02 of this Lease.
9.05 Voluntary Conveyance. A voluntary conveyance by Lessor
to a public utility, agency, or authority under thr:eat of a taking
under the pO\ler: of eminent domain in lieu of formal pr:oceedings shall
be deemed a taking \lith in the meaning of this Article IX.
9.06 Arbitration. If any condemnation a~ard does not
distinguish between the classes of pr:operty and inter:ests as
described in section 9.02 of this Agreement, the par:ties shall
negot.iate and agcee as to such allocation and, failing such agr:eement
\lithin forty-five (45) days, the matter shall be submitted t_o
arbitration. --
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ARTICLE X
ASSIGNMENT AND SUBLEASE
10.01 Consent of Lessor Required. Lessee, or any subsequent
Lessee, may ass ign, conveyor teansfer Lessee 's inter:est in this
Lease and the leasehold estate created hereby, or a por:tion of said
interest, only with the \lritten consent of Lessor to such assignment.
ARTICLE XI
DEPAULT AND REMEDIES
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11.01 Default by Lessee. If Lessee shall alloW' any monthly
rent _to be in arrears for: a peeiod of thir~y (30) day:; after: wr1t-~., --..,
no:c:il:-e j_~1lL Lessor_, or shall remain default under any atk..".
condition~of this_~as.e_ for a per:iod o..!.-thl.rty ,- -- a-ys~after_._,
vri t ten notice . from LessoiJ~or__-shoiild_any,- other peI:S_o!l_ _t,ha.~.l-essee ~.
.--secure possess-ion _of the__p~emises, oc any ~'aet there.of, by operation-
o!--la... in any manner: \lhatsoever;-t;ess-or'-'may at its -o-p'tioni- without
notice, or further notice, to Lessee:
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(a) ter:minate this Lease and recover: fr:om Less~
damages as pr:ovided fo~ in this section 11.01 of this Agr:eementl or'
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(b)
Lease and recover
damages, including
continue to hold the Lessee obligated to this
by suit or other\lise from the Lessee any and all
all rent due for the remainder of the Term: or:
(c) enter upon the Leased Premises and any
improvements erected or situate thereon to cause repairs or
corrections to be made, or: correct or rectify any breach, and any
reasonable costs therefore shall be payable by Lessee to Lessor as
additional rental on the next monthly rental payment due after notice
from Lessor: to Lessee of the cost of such actions: oc
(d) othec\lise satisfy the br:each of Lessee's duty or
obligation by the payment of money due or the taking of action and
any reasonable costs theceof shall be payable by Lessee to Lessor: as
additional rental on the next monthly rental payment due after: notice
fr:om Lessor: to Lessee of the cost of such actions: or
(e) re-enter: and ta,)<;e possession of said'pr:emises and
r:emove all per:sons and pcoper:ty thee.e.irom,.\lithout beinS' deemed
guilty of any -mallner of-tr:esp-ass, an'd relet the pr:emises or any pact
t.her:eof, for alL_~ any part ~f.. th~_!;'iriLain-aeL_of .said.. t,erm, to a
par:ty satisfactor:y to--r;essor:, and at such monthly r:ental as Lessor
may with reas_onable dTligence!;le able to"secure.,_Sh.o_uld Lessor be
uriClble to r~J.~-.r-after-i-easo_nabl?-enCirts_to do ,s'Q.... or: should suc,h
'monthly rental' b'e 'les's-.than the rental Lessee \las 'obligated to pay
under this Lease, plus the expense of reletting, then Lessee shall
pay ~he amount of such deficiency to Lessor: or
(f) avail itself of any other remedy at la\l or: equity.
The said rights and remedies of Lessor shall be cumulative and not in
the alternative. Lessor shall have the right. to effect the remedies
set forth in SUb-section (c) and (d) of this section 1l.01 of this
Lease upon less than thir:ty (30), days notice if a shor:ter: per:iod is
required so as to pr:event ir:reparable injury to the Leased Premises
or the motel and cestaurant business conducted thereon.
11.02 Landlord's Lien-Sale of Lessee's Property. It is
expressly agreed that in the event of defaul t by Lessee her:eunder,
Lessor'shall have a lien o~ all goods, chattels, or: pecsonal property
of any description belonging to Lessee or to either joint venturer of,
Lessee which are placed in, or become a part of, the Leased Premises,
as security for rent due and to become due for the remainder of the
then current Lease Ter:m, which lien shall not be in lieu of or: in any
way affect the statutor:y Lessor's lien given by la\l, but shall be
cumulative thereto: and Lessee hereby grants to lessor a secur:ity
interest in all such per:sonal proper:ty placed in or: on said Leased
Premises for such purposes, provided, hO\lever, that no security
interest or Financinc Statement shall be filed nor: shall such lien be
perfected in any man~er, until default by Lessee and thir:ty (30) days
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written notice from Lessor to Lessee of Lessor's intent to so file or
perfect. Th is shall not prevent the sale by Lessee of any
merchandise or inventocy in the ordinary course of business free of
such lien to Lessor. In the event Lessor execcises the option
provided in sub-sections (a), (b), (e), or (f) of section 11.01 of
this Agreement, then Lessor may. take possession of all of Lessee's
property and the property of either joint venturer of Lessee on the
Leased Premises and sell same at public: or private sale after giving
Lessee reasonable notice of the time and place of any public sale or
of the time after which any private sale is to be made, for cash or
on credi t, or for such pr:ices and terms as Lessor deems best, with or
without having the pr:oper:ty present at such sale. The proceeds of
such sale shall be applied first to the necessary and proper: expense
of removing, storing, and selling such property, then to the payment
of any rent due or: to become due under this Lease, oc any damages as
calcula ted under: sections 11.01 or 11.02 of this Agr:eement, \Ii th the
balance, if any, to be paid to Lessee. The previsicns of this
section shall not pr:event, nor: shall they prohibit, the Lessee or its
Operation Manager: fr:cm disposing of any assets free anc clear: of any
lien providec for: in this section, until such time as the said lien
should be per:fectec.
11.03 Remedies Cumulative. Al:I rights and remedies 'of' Lessor
under, this Lease shall be cumula'~ive" and none shall exclude- any
other r.ight or ce!lledy at la.... - Such rtghts ana remedies may be
exercised and enfor:ced concur:r:ently and whenever and as often as
occasion therefor:e ar:ises.
11.04 Mitigation of Damages. In the event of any defaul t,
Lessee shall be given credit against any damages, foe any rent
actually received upon the re-rental of the restaur:ant oc hotel, or
the fair market rental value of the restaurant oc hotel in the event
that Lessor resumes oper:ation of one or both facilities.
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ARTICLE XII
TERMINATION AND SURRENDER
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12.01 No Right to Terminate. Neither Lessor: nor Lessee shall
have the right tq ter:minate this Lease for any reason dur:ing the
L~ase Ter~' except as specifically provided ~n this Agreement.
l2.02 Automatic Termination. This Lease shall automatically
terminate at the end of the Lease Term or any five year pedod if
Lessee has exer:cisec its option to terminate the Lease pur:suant to
section 2.02 of this Agreement.
12.03 Surrendec of Possession. Unless othe::\:ise mutually
agr:eed in ...riting by the parties prior to the termination of the
Lease, either: pursuant. to section 12.02 or any option expr:essly
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provided for in this Agr:eement, Lessee agrees to redeliver: possession
of the Leased Pcembes, and the impcovements, fixtures and pr:opecty
thereon which are to become the property of the Lessor pursuant to
section S.OI of this Agreement, in substantially the same condition
that existed on the Beginning Date, reasonable wear and tear, damage
by the elements, acts of God, war and any act of war excepted, all as
provided in section 7.05 of this Agreement.
12.04 Other Acts and Effects of Termination. Upon termination:
(a) If applicable, all financing statements and
mortgages executed by Lessor: oc Lessee shall be satisfied, ter:minated
and released in full by Lessee:
(b) This Agceement shall be of no further: force and
effect except as to those right.s, obligations and r:emedies as may
have arisen pr:ior: to terminat.ion or: \lhich may arise the::eaft.er as a
result of acts oc events occur:ring pr:ior to termination.
ARTICLE XIII
WARRANTIES, INDEMNITY, LIABILITY & INSURANCE
l3.01 Indeu'tn.ity, of Lessor. Lessee agrees to insur:e, de,fend,
indenfni fy and nol'd Lessee harmless against any and all claims,
demands, damages, costs and expenses, including attor:ney's fees for
the defense ther:eof, arising from the conduct or: management. of
Lessee I s bus iness at the Leased Premises, or from any bceach on the
part of Lessee of any conditions of this Lease, or condition created
by the Lessee, or from any act or negligence of Lessee, its agents,
contractors, employees, subtenants, concessionaires, or licensees in
or: about the Leased premises, or in connection with any accident,
personal injucy or damage to per:sonal property arising fcom or out of
any occurrence in, upon or at t~e Leased pcemises dudng the Lease
Term, unless same shall result from negligence on the part of Lessor.
In case of any action or pr:oceeding brought against Lessor: by reason
of any such claim, Lessee, on notice from Lessor, covenants to defend
such action or proceeding by counsel acceptable to Lessor:.
. 13.02 Insurance. Lessee agrees that .at all times dudng the
Term of this Lease or any extensions, it shall keep in effect a
policy of public liability and property damage insurance insuring the
demised premises against any and all claims of personal injury or:
property damage, and shall keep in effect liability insurance, Fire
Legal Liability Insurance, Improvements and Bettecments Insurance, in
such amounts as the parties may agr:ee to from time to time, or,
failing such agreement, in reasonable amounts deter:mined by
arbitration. Lessee may, at Lessee's option, obtain and carry any
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other insucance Lessee may deem to be necessar:y or: desir:able. All
aaid inaurance policies shall provide for the payment foe any losses
to .ithec Lessor or: Lessee as their interest may appear undec this
Lease.
13.03 Inaurance-proof of Coverage. The orig inal policies may
be retained by the Lessee, but the Lessor shall have the right to
inapect and copy any and all such polic ies, and Lessee, on demand,
agr.es to furnish the Lessor: \Ii th proof of payment of the pr:emium or
premiums on any policies pcovided for in this Agceement..
13.04 Other Insurance. Lessee shall not obtain any other
insurance on any pr:oper:ty or matter which is the subject of this
Agreement without also naming Lessor as an additional insur:ed as
their interests may appear:.
13.05 Insucance-protection Against Cancellation. Each
insurance policy provided foe in this Agr:eement shall expcessly
pr:ovide that the policy shall not be canceled or alter:ed \lithout
thicty (30) days pelot" liritten notice to all pa::ties having an
intecest in the cove::age.
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13.06 Insurance-P'ailur:e to Secure. If Lessee at any time
,during the Ter:m her:eof should fail to secur:e or: maint.ain.- the
_ foreg'oing insurance, Lessee shall be in default unde:: the teems':' of
this Agreement, and Lessor: shall have the right but not the
obligation, to obtain such insurance in Lessee's name oc as the agent
of the Lessee, and any r:easonable costs ther:efoc shall be payable by
Lessee to Lessor: as additional rental on the next monthly r:ental
payment due date after: notice from Lessor to Lessee of the cost of
such insurance.
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13.07 Compliance with Insurance Requi~eDents. Lessee, at its
sole cost, shall effect compl iance wi th all requests of any fire
insurance carriec of Lessee or L'essor concerning Leased pr:emises or
operations modifications. All insurance proceeds received by any
party hereto ar:isin9 out of damage to the proper:ty shall be utilized
for the prompt restoration of the property to its pr:e-p.;';l~':ing, or
better, condition.
13.06 Representations: Lessor represents and \lar:ca~ts t~.at the,
real estate and personal property, utility ser:vices and facilities
appurcenant thereto ar:e and will be adequate, sufficient and in
operating condition foe the conduct of both motel and rest.aurant
operations upon the Leased Premises and that ther:e is no condition
that does or will adver:sely affect the legality of the business to be
conducted or impair: oc limit the operation of the business by the
Lessee. As to the electric service, Lessoc repr:esents and \lar:rants
only that it has been adequate for prior restaur:ant ope::ations on the
Leased Premises; any additional costs to upgrade the electr:ic service
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for Lessee's additional requirements shall be the responsibility of
Lessee. Lessoc vill have a continuing responsibility foe damages or
loss to Lessee arising from latent conditions existing on the Leased
Premises and vill indemnify, save, hold harmless and defend Lessee
against any such-liability, los$es or damages.
ARTICLE XIV
ARBITRATION
l4.0l Agreement to Submit. In the event Lessoc and Lessee
cannot agree on any point in this Lease that is expcessly subject to
acbitration, or: should they hereafter stipulate in \lriting that any
dispute bet\leen them be submitted to arb i tration, such controversy
bet\leen the par:ties involving rights and obligations adsing under
the ter:ms of this Agreement shall be subject to arbitr:ation, except
controversies involving less than $2,500.00, provided, ho~eve::, that
either party shall have the eight to appeal any arbitcation award to
Court, de~. The ar:bitration shall comply vith and be governed by
the pr:ovisions of this Agreement and the Pennsylvania Uniform
Acbitr:ation Act, Sections 7301 through 7320 of Title 42 of the
Pennsylvania Consolidated Statutes.
14'.02 Demand for Arbitration. ' In the eiie.t:lt Lessor: and Lessee
. cannot agr:ee on any point in" this Lease that is -expcessly subject to
'_ acbitration, either: party may make a demand for arbitration by filing
a demand in vriting \lith the other.
14.03 Appointment of Arbitrators. The parties may agr:ee on one
acbi tra tor. Bovever:, if they cannot so agree, thr:ee ar:bitcators
shall be appointed as follo\ls: within t...enty (20) days of a Demand
foe Arbitration, each party shall name one arbitrator in \lr:iting and
give notice to the other: party of the name and address of the
acbitrator. In case of the failure of either party her:eto to name an
arbi tra tor, the other par:ty shall have the right to apply to the
Court of Common Pleas foe the County of Cumberland, Pennsylvania, to
appoint an arbitcator: to represent the defaulting par:ty. The t\lO
ar:bitrators thus appointed (in either manner) shall select and
appoint in vriting a thir:d arbitrator and give vr:itten not.ice to
Lessor anp Lessee, or: if vithin twenty (20) days af:tet' the
appointment of said second ar:bitrator, the tvo arbitrators shall fail
to appoint a third,' then either pacty hereto shall have the right to
make application to the Court of Common Pleas for the County of
Cumberland, Pennsylvania, to appoint such third arbitr:ator:.
14.64 Qualifications of Arbitrators.
appointed must have no financial or personal
of the arbitration.
All of the arbitr:ator:s
interest in the result
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14.05 Vacancies and substi tutions. If an appointed arbi trator
fails to act oc is unable to act, the parties may appoint a successor
as follows: whether or not a single arbitrator was chosen initially,
the parties may agcee on another single arbitrator: or if the parties
cannot agree on a single arb~~ra~or, the successor shall be appointed
by the party or by the arbitrato~s who selected the arbitrator who is
no longer par:ticipating. If the method provided in this section
14.05 or section 14.03 of this Agreement fails or cannot be followed,
one or more arbitcator:s may be appointed by a court having
jurisdiction on application of either party.
14.06 Time and Place of Bearing. All acbitr:ation hearings
conducted under: this Agreement shall take place in Cumber:lanc County,
Pennsylvania. The ar:bitcatocs shall set the time and place of the
arbi tra t ion headngs and they shall del i ver to each par:ty, by
pecsonal service oc certified mail, written notice stating the ,time,
location, and subject matte:: of the arbitration hearing.
14.07 power:s of Arbi trators. The arbi trator:s shall have the
po...er to: decice all procedural issues; inter:pr:et and det.ermine
questions of both la\l and fact; base conclusions on their: ceadin9 of
the Agreement; adjour:n or: postpone the hearing for: good cause to a
time not later than ,the date for making the, a...ard unless the partie_s
consent to a late:: 'date; and:' hear: and determine the contr:oversy Oll-
the evidence pr:esented even thou"gh a duly notifiec par:ty fails. to'
appear. All pO\ler:s of the ar:bitrators shall be exe::cised only by a
major:ity of the arbitrator:s.
14.08 Evidence. The arbitrators may issue subpoenas for the
attendance of witnesses and the production of other: evidence, permit
depositions to be taken of witnesses ...ho cannot be ser:ved with a
subpoena or vho cannot. attend the hearing, and administer oaths as
provided by lay.
14.09 Avard. The acbitration award shall be valid if made by a
majority of the ar:bitrator:s. It shall be in vr:iting and signed by
the arbitrator:s joining in the a...ard. The arbitrators shall deliver
a copy of their a\lar:d to each party by the method pr:ovided for: notice
by one party to another in this Agr:eement. The avard shall be made
within ninety (90) days fcom the date of ttle appointment of the. last
arbitrator unless the par:ties consent in writing to extend this
period before or after it expires. The a'Ward may be confirmed by any
court having jurisdiction on application of either par:ty.
14.10 New Arbitrator:s. If the arbitrator:s appointed pursuant
to sect ion 14. 03 of this Agreement fa i 1 to make an a\lard \lithin
ninety (90) days fr:om the dat.e of the appointment of the last
ar:bitr:ator, they shall ,be diSCharged unless the' par:ties consent in
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\lri ting to extend this pedod. New
shall be appointed and shall proceed
in this Agreement. The process shall
is lIIade.
arbitrators (or an arbitrator)
in the same manner: as specified
be repeated until a final award
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14.ll Costs of Arbitration. The costs and expenses of
arbitration, including the fees of the arbitrators and any attorney's
fees, shall be paid by the losing party or by both parties in the
pcoportions determined by the arbitrators in their a\lard.
ARTICLE XV
THIRD PARTY BENEFICIARIES
15.01 No Third Party Beneficiaries. It is the intention of the
par:ties hereto that no pr:ovision of this Lease Agreement shall in any
way inure to the benefit of any thir:d person (inClUding the public at
lar:ge) so as to constitute any such person a thir:d par:ty beneficiary
of such Lease Agreement or: of anyone or: more of the terms the::eof or
othec...ise give r:ise to any cause of action in any person not a par:ty
to such Agreement. For: pur:poses of this section, the cor:porat.ions
which constitute B & H Joint Venture shall be consider:ed par:ties to
'this Agreement. _
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ARTICLE XVI
GENERAL PROVISIONS
16.01
ease shall
hough the
tlnditions
Conditions and Covenants. All of the Pr:OV1Slons of this
be construed to be .conditions" as well as .covenants" as
words specifically expeessing or imparting covenants and
wer:e used in each separate peovision.
16.02 No Waiver of Br.each. No fai lure by ei ther Lessor or
'asee to insist upon the st.rict performance by the other of any
'''enant, agreement, term, or condition of this Lease or: to exercise
V right or remedy consequent upon a breach ther:eof, shall
h.titute a waiver: of any such' breach or of such covenant,
to.ement, term, or condition. No waiver of any breach shall affect
al ter this Lease, b~t each. and every covenant, c.ondi tion,
".ement, and ter:m of this Lease shall continue in full for:ce and,
I.ct with respect to any other: then existing or subsequent breach.
Time of Ellllence. Time ill of the essence of this Lease,
provision.
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16.04 Computation of Time. Except where this Lease gives a
date upon which an act is to be performed, the time in which any act
provided by this Lease is to be done is computed by excluding the
first day and including the last, unless the last day is a Saturday,
Sunday, or legal holiday, and.~hen it is also excluded.
16.05 Successors in Interest. Each and all of the covenants,
conditions, and cestrictions in this Lease shall inuce to the benefit
of and shall be binding upon the parties hereto and their respective
heirs, executors, administrators, legal representatives, succesSOrS,
assigns, or other successocs in interest.
l6.06 Entire Agreement. This Lease contains the entire
agreement of the pacties with respect to the mat tees covered by this
Lease, and no othec agreement, statement, or: promise made by any
party, or to any employee, officer, or agent of any par:ty, \lhich is
not contained in this Lease shall be binding or valid.
16.07 Partial Invalidity. If any term, covenant, condition, or:
pr:ovision of this Lease is held by a COllet of compete~t jurisdiction
to be invalid, void, 0:: unenfor:ceable, the re:;.alncec of the
provisions shall remain in full for:ce and effect and shall in no way
be affected, impaiced, oc invalid~tea. -
: 16.08 Relationship of partIe;: Nothing contained in this Lease
shall be deemed or construed by the pacties or by any thicd per:son to
create the relationship of principal and agent or of pactnecship or
joint venture or: of any association between Lessoc and Lessee, and
neither the method of computation of rent nor any othec pr:ovisions
contained in this Lease nor: any acts of the pacties shall be deemed
to create any relationship bet...een Lessor and Lessee, other: than the
relationship of Lessor: and Lessee.
16.09 Interpretation of Language. The language in all parts of
this Lease shall in all cases be simply construed accor:ding to its
fair meaning and not strictly for or against Lessor or: Lessee.
16.10 Pennsylvania Law to Apply. This Agreement shall be
construed under and in accor:dance ...ith the laws of the Commonwealth
of pennsyl.vania, and all obligations of the, parties created hereunqer
are performable in Cumbecland county, pennsylvania. '
16.11 Definitions-construction. Unless other:\lise provided in
this Lease, or unless the context otherwise requires, the following
definitions and cules of construction shall apply to this Lease,
regardless of \lhethe:: the ter:ms are capitalized or not in any given
instance:
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(a) Number and Gender:. In this Lease, the neuter
gender includes the feminine and mascul ine, and the singular number
includes the plural, and the word "person" includes corporation,
partnership, firm, oc association wherever the context so requires.
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(b) l1andator:y and Permissive.
"agrees" are mandator:y: "may" is permissive.
"Shall", "\lill", and
(c) Term Includes Extensions. All references to the
term of this Lease or: the Lease Term shall include any extensions of
such" Term.
(d) Land and Premises. Leased Premises, Land, or
Peemises shall have one and the same meaning and shall include, where
the context so reCjuir:es, the impeovements to the Land. In the event
of a paetial taking or: condemnation, these ter:ms shall be redefined
as pr:ovided in section 9.07 of this Agreement.
(el Par:ties. Paeties shall include the Lessor: and
Lessee named in this Lease and SUccessor:s in inter:est to them.
(f l Sublessee. As used her:ein, the \lord "sublessee"
shall mean and inc!-ude in addition to a .sublessee anc SUbtenant, a
licensee, concessionair:e, or other occupan~ or user: of any port~on ~f
the L_eased Premrse-s- or: bui.lding or' improvements thereon. '
16.l2 Captions. Captions of the artiCles, sections, and
par:agraphs of this Lease ace for convenience and reference only, and
the words contained therein shall in no way be held to explain,
modify, amplify, or: aid in the interpretation, construction, or
meaning of the provisions of this Lease.
16.13 Attorney's Pees. In the event either Lessor: or Lessee
shall bring any action or: proceeding for damages for an alleged
breach of any pr:OVlslon of this Lease, to recover r:ents, or to
enfoece, protect, or: establish any right or remedy of either: party,
the prevailing par:ty shall be entitled to recover as a part of such
action or proceedings r:easonable attoeney's fees and cour:t costs.
16.14 Interest. Any sum accruing to Le~sor, or Lessee under the
provisions of this Lease which shall not be paid when due shall bear
interest at the rate her:einaftee spe'cified from the dat'e such payment
was first due, Until paid. Interest shall be at the rate of fifteen
(IS') percent per annum.
16.15 MOdification. No amendment, mOdification, or alteration
of the terms her:eof shall be bind ing unless the same be in \lri ting,
dated subsequent to the'date her:eof, and duly executed by the par:ties
heeeto.
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16.16 Notices-Method and TilDe. All notices, demands, or
requests from one party to anothec shall be eithe!:' personally
delivered oc sent by United States or private mail, cectified or
registered, with pcovision for the execution of a receipt by the
recipient, postage prepaid, t~ the address stated in section 16.17 of
this Agreement and shall be deemed to have been given at the time of
personal delivery or: at the time of mailing or sending. '
l6.17 Notices-Addresses. All notices to be given under this
Agreement shall be addr:essed to the addresses of the par:ties set
forth in the pceamble to this Agreement, or at any other: addr:ess that
may subsequently be specified by written notice deliver:ed in
accordance \Ii th section 16.16 heeof. Any ass ignee oc successor of
any interest. in this Lease Agreement shall immediately notify the
other party of its addr:ess for: the purpose of receipt of notice.
l6.l8 Payment of Rent. All rents and othec sums payable by
Lessee to Lessor: shall be by check payable to Lesso::, delive:.-ed 1n
per:son or mailed to Lessoc at the addr:ess set focth in the p:.-eamble.
Lessor may at any time change the pr:ovisions of this section by
notice to the Lessee.
l6.19 Broker's CODllllissions. Each of the par:ties r:epr:esents and
-\larrants that there are no claims for broker's 'commissiops or
-findee's fees ih connection ...ith the execut-ion of t.his Lease, =anc
each of the par:ties agrees to indemnify the othe:.- against all
liabilities arising fcom any such claim.
16.20 Recording. At the request of either par:ty, the par:ties
shall execute, ackno\lledge, and record a memorandum of lease.
Contemporaneously \lith any such memorandum, Lessee shall pr:epare and
execute an ackno\lledgement of the termination of the Lease, in
recordable form, which shall be held by Lessor and not r:ecor:ded until
such time as this Lease is final;Ly determined to be tecminated. The
party so requesting the memorandum shall bear the cost of pceparing
and recoeding the same and the ackno\lledgement of the tecmination.
~. . . ..' . ..... ....
16.21 Counterparts. This Lease has been executed by the
parties in several counterparts, each of which shall be deemed to be
an original copy.
- 23 -
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I verify that the statements made in the foregoing document are
true and correct. I understand that false statements herein are
made subject to the penalties of 18 PA. c.s. Section 4904 relating
to unsworn falsification to
authorities.
(\ rp Q
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I N TilE COURT OF cmll,ION PLEAS
OF CUNBERLAND COUNTY. PErmSYLVMllA
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SEArl BARDI/SKI. d/b/a KOKONO' S
Petitioner
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vs.
PAUL BEALE and HIS AGENTS
Respondents
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,REQUEST FOR SPECIAL RELIEF AND INJUNCTION
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1. Comes the petitioner.' Sean Barowski. owner of Great Locations,
Inc., the owner of Kokomo's Bar and Grfll of 3721 Market Street, Camp
Hill, Pennsylvania,
2. Respondents are Paul Beale and unknown agents of his at 4409
Royal Oak Road, Camp Hill. Pennsylvania.
3. Barows:d is the owner of the company that uwns Kokomo I s Bar
and Grill, an entity which has a lease for its premises until the year
2011 (see attached Exhibit A).
4. Beale is the landlord of the premises of Kokomo's, leasing
it to Barowski by that same document.
5. At about 9:00 a.m. this morning. the manager of Kokomo's,
Scott Crouse, went to the door and found that the locks had been changed.
Crouse had a conversation with those persons inside who announced they
were agents of Beale and that they were "taking over" the premises
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GREAT LOCATIONS INC. and
B&H JOINT VENTURE and
SEAN BAROWSKI
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
Petitioner
V
PAUL BEALE and HIS AGENTS
Respondents
98- 1106 Equity
STIPULATED FACTS
1
Paul Beale and Mildred E. Beale (Beale) are the owners of real
estate at 3721 Market Street, Camp Hill, PA (Real Estate).
2
The Beales entered into a 20 year lease agreement in September,
1991 whereby the Real Estate was leased to B&H Joint Venture (B&H).
3
B&H is a joint venture organized pursuant to a Joint Venture
Agreement dated July 22, 1991 between Beale Enterprises, Inc. and
Club Management, Inc.
4
Pursuant to assignment of Joint Venture interest dated October 10,
1993, Club Management, Inc. assigned it's interest in the Joint
Venture Agreement to Great Location, Inc., which assignment was
agreed to by Beale Enterprises, Inc.
5
Beale Enterprises, Inc. is a Pennsylvania Business Corporation.
6
Great Locations, Inc. is a Pennsylvania Business Corporation.
"
EXHIBIT
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L E ^ S E
^ G R E E " E N T
THIS LEASE AGREEMENT is made and enter:ed into by and bet\leen D.
Paul Beale and Mildred E. Beale, husband and wife, of 4409 Royal Oak
Road, (Hampden Township), Camp Hill, Pennsylvania, heceinafter
refer:red to as "Lessor, and''1I"' B Joint Venture, a joint ventuce
organized under the laws of the Commonwealth of Pennsylvania, having
its office at 3721 Market. Str:eet, (Hampden TO\lnship), Camp Hill,
Pennsylvania, heceinafter referr:ed to as "Lessee", and is as follo\ls:
WHEREAS, Lessee is in the business of oper:atinq hotels and
restaucants: and
WHEREAS, Lessee desir:es
ceal pr:opecty as mor:e fully
thereon er:ected: and
to lease fr:om Lessor: a cectain tract of
descr:ibed below, with the impr:ovements
WHEREAS, Lessor: cesir:es
to Lessee under: the teems.
he:-ein:
to lease the said tr:act of r:eal p~operty
concitions and pr:ovisions as set out
NOW THEREFORE. for a:lc in consice::ation of the p::emises and'
other good and valuable consige::ation. the receipt and sufficiency 0[_
...hich is her:eby acknol.'ledgec by -both parties. and intending to - be'
legally bound. the pa~ties he::eby ag~ee as follo\ls:
ARTICLE I
DEMISE OF LEASED PREMISES
1.01 Leased Premises. Lessor, for: and in conside~ation of the
rents, covenants and condition~ her:ein contained to be kept,
pee formed and obser:ved by Lessee, does lease and demise to Lessee,
and Lessee does rent and accept from Lessor, the real arid per:sonal
pr:ope ety, referred to here in as "Leased Premises", kno\ln as the
Hampton Inn, locatec at 3721 Mar:ket str:eet, (Hampden TOl/nship), Camp
Hill, Pennsylvania; furthe~ described in Exhibit "A", attached hereto
. and incocpor:ated herein by refeeence ther:eto, \lhich Leased Premises
shall include the land and all impr:ovel!lents tlter:eon er:ected as
descr:ibed in that certain Sheriff ',s Deed to the Lessor:s recorded in
the Office of the Recor:der of Deeds in and for: Cumber:land County, at
Car:lisle, Pennsylvania, in Deed Book "C", Volume 25, Page 127, and
...hich shall incluce the business kno\ln as the Hampt.on Inn and all
per:sonal pr:operty and fixtures associated ther:e\lith. including the
right. to the use of the name Hampton Inn.
EXHIBIT
P;A
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1.02 Lessoc's Warranty of Title. Lessor her:eby represents and
warrants that Lessor is the ollner in fee simple absolute of the
Leased Premises subject to covenants, conditions, restrictions,
easements and othec matters of record or on the ground.
1.03 Lessor:' s Wacranty 0"1. Quiet EnjoYlllent. Lessor covenants
and agrees that Lessee on paying the rent and other charges herein
pro v ided for: and observing and keeping the covenants, condi tions and
terms of this Lease on Lassee I s part to be kept or: perfocmed, shall
la\lfully and quietly hold, occupy and enjoy the Leased Premises
during the term of this Lease IIi thout hindrance or: molestation of
Lessor or any per:son claiming under Lessor.
1.04 Lessor:' s Right to "ortgage. Lessor: does not have a
cucrent moetgage, or: other lien, against the Leased Premises. Lessor
reserves the right to encumber: the pr:operty in any amounts as Lessor:
in its sole discretion shall decide. Should Lessor: cefault in making
any payment on any such mo::tgage or: encumbrance, Lesse2 shall have
the r:ight to make such payment and deduct the amoun: paic from r:ent
due or: to become due under this Lease.
ARTICLE II
LEASE TERM
"
2.01 Term. The term of this Lease shall be fo:: a period of
t\lenty (20) years beginning on the { day of ~c)0'
1991, 'Which shall be r:eferr:ed t.o herein as the "Beginning pate".
2.02 Termination Options. Lessee may Terminate this Lease at
the end of the fi rst fi ve year:s from the Beg inning Date, and the end
of the second or: third five yeae periods fcom the Beg inning Oa te, by
sending IIritten notice to Lessor of such intention at least ninety
(90) days prior to the expiration of said five year: periOd.
2.03
expiration of
tenancy shall
conditions of
Bold Over:. If Lessee shall hold over aft.er
the Lease Term, \Ii th the consent of the Lessor,
be fr:om month to month on all terms, covenants,
this Lease.
the
such
and
2.04 Lease, Year:. "The term Lease Year: shall mean any t\lelve.
month period beginning on the Beginning Date or: an anniversary of the
Beg inning Date.
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ARTICLE III
RENT, TAXES, AND UTILITIES
3.01 Minimum Rent-Initial Pive Years. (a) During the fir:st
Eive (5) years of this Lease, Lessee agrees to pay to Lessoc as r:ent
for the Leased Premises the, .sum of One Hundred Ei9hty Thousand
($IBO,OOO.OO) Dollars per year, in advance, in monthly installments
:If Fifteen Thousand ($15,OOO.00) Dollars each, beginning on the
ae9inning Date, and each successive month thereafter, except that Ten
Thousand ($IO,OOO.OO) Dollacs of the r:ent for the eleventh (lIth) and
tvelfth (12th) months of this Lease, ($5,000.00 per month), shall be
?r:epaid as provided in section 3.09 of this Lease.
(b) Second, Third, and Pourth Five Year Pedods. (I)
::ln the fir:st day of the sixth Lease Year: of this Lease (lIhich Lease
'feae shall begin in the calendac year 1996), the basic annual rent
set forth in section 3.01 her:eof shall be incr:eased or dec::eased foe
the ensuing five year period in the same pr:oponion that t.he
iiholesale Pdce Incex figure Industeial Commodities (IS67=100)
?ublished by the Bur:eau of Labor: Statistics, United States De?ar:ment
~f Labor:, for: the mon th of Augus:: 1996, sha II have increasec or:
=ecreased over: t.he said incex figure foe the month of Acgcst 19~1.
(2) On the ficst day of, the eleventh Lease Yea~ of this
:...ease' (\lhich Lease 'fear: shall beg in :'in 'the. calendar: year 2001), the
:lasic annual r:ent set forth in section 3.01 her:eof shall be increased
~r decr:eased for: the ensuing five year: period in the salUe pr:opor:tion
that the said index for the month of August 2001 shall have increased
~r: decreased over the said index figure for the month of August 1996.
(3) On the first day of the sixteenth Lease Year of this
:'ease (vhich Lease Year: shall begin in the calendar: year 2006), the
basic annual rent set forth in section 3.01 hereof shall be increased
c:: decr:eased for the ensuing five year period in the same pr:opoction
that the said index for the month of August 2006 shall have increased
or decreased over the said index figure foe the month of August 2001.
(4) The said annual r:ent as deter:mined above shall then be
civided by t\lelve, and the alUount shall be paid monthly for the said
five year: peciod. BO\lever:, in no event shall the incr:ease in annual
rent appli'cable to any five year period -exceed twenty-five' (25'%)
percent and in no event shall the annual ,rent ever: be less ,than the
or:iginal annual rent.
!
(5) Lessor: shall give Lessee at least sixty (60) days
advance notice of the r:evised rental amount, sho\ling the levels of
the said Index used to ar:rive at the ne\l r:ental amount.
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3.02 Substitute Indicator. If at any time pdor to the first
day of the second, third, or foucth five year periods of this Lease
the said Index refured to in section 3.01(b) of this Lease shall
cease to be published, thece shall be substituted therefor: the most
similar economic indicator: .';hen pub I ished, if any. If Lessor and
Lessee cannot agree as to such substitute, then the matter shall be
submitted to arbitration as hereinafter pr:ovided for:.
3.03 Percentage Rental. (a) (1) In addition to the paymen t
of the minimum rent as hereinbefoce peov ided, Lessee shall pay to
Lessor: as per:centage r:ental, 7' of the annual gross sales made in,
on, or: from the restaurant por:tion of the Premises over $900,000.00.
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(2) For pur:poses of determining percentage rentals under:
this Lease, the end of an annual peciod and a lease year Shall be
deemed to Occur each June 30 during the original teem of this Lease
and any r:ene\lal term.
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(b) Said per:centage cent for: each lease yea:: shall
become due and payable thirty (30) days after: the month in ...hich
gross sales exceeo t.he dollar: amount in section (al (l) and
thet'eafter: shall be paid monthly on all additional gross sales made
dur:ing the r:emainder,of such lease year on all additional gross ~ares
made dueing, the remaind~r of such lease year:. ,Whether: !?t'_.not'
percentage rent is due for: any.such month, Lessee covenants to suomit
to Lessor \lithin thir:ty (30) days after the end of every month a
statement setting fOt't.h gross sales made during such month signed by
Lessee and cer:tified to be complete and cocrect. Further, Lessee
covenants to submit to Lessor: Yithin sixty (60) days after the end of
each lease year, an annual statement setting for:th gr:oss sales made
during such lease year signed by Lessee and cer:tified to be complete
and correct. Any period of less than t\lelve (12) full months \lithin
the term of this Lease shall be adjusted for: per:centage rent, Yhich
shall be based on the amount, if any, by \lhich the gross sales for:
said period exceeds the pro-rata por:tion of the dollar amount in
section(a) (1). The pro-rata portion shall be calculated \lith the
numerator equal to the number of days in the said period and the
denominator: equal to 365 days times the said dollar amount.
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(c) "Gr:oss sales., as used hel:ein, shall mean the
amount of sales of all mer:chandise or secvices sold Ot' rendet'ed in,
'on, about or: from the restaurant portion of the Premises by Lessee or:
any subtenants, licensees or: concessionaires, \lhether for cash or on
a char:ge, credit or: time basis \lithout r:eser:ve or deduction for
inability or: failure to collect, including but not limited to such
rentals, sales and services (1) where or:der:s originate and/or are
accept.ed by Lessee in the Pr:emises but delivery Ot' perfor:mance
ther:eof is made from pr at any place other: than the Premises, (2)
pursuant to mail, telegr:aph, telephone or: ot.her similar: orders
r:ece i ved or: filed at or in the pr:emises, (3 l by means of mechan ica 1
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and other: vending machines in or: on the Pr:emises, (4) vhich Lessee in
the nocmal and cUstoma~y course of business would credit or attribute
to its business upon the restaurant portion of the Pcemises o~ any
pa~t or par:ts the~eof. Thece shall be deductible fcom gross sales:
(1) amount of refunds, allovances or discounts to customer:s, pr:ovided
they have been included in gc:oss.. sales and provided further that if
such refunds, allo\lances o~ discounts are in the fo~m of credits to
Customer:s, such credits shall be included in gross sales \lhen Used,
(2) r:eturns to shippers and manufactur:ees for: ccedit, (3) sales of
trade fixtur:es or: opecating equipment after Use the~eof in the
conduct of Lessee's business in or: on the Premises, (4) all sums and
credits r:eceived in settlement of claims for: loss or damage to
merchandise, (5) amounts of any excise or: sales tax levied upon
retail sales and payable over: to the aPpr:opciate gover:nmental
authority, provided that specific r:ecord is made at the time of each
sale of the amount of sales tax, and the amount theceof is expr:essly
charged to the Custome::,
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(d) Lessae covenants and agrees to keep upon the
Premises at all times dU::ing the tet'm of this Lease, books and
~eco~ds in accor:dance ~ith gene::ally accepted accounting p~actices of
all business concuc:ec a~ the Premises in "'hich shall be recorded
gr:oss sales. The books, anc t'ecords of account shall also include all
fede~al, -state and local tax returns of Lessee .relatinc to Lessee's
sales, as '\.tell as all pertinent or:iginal sale~. t'eco~c~ \lhich .shall
include but not be limitec to the fOllo...ing: (1) caily dated cash
:-egistee tapes, (2) cated se::ially number:ed sales slips, (3) daily
bank deposit slips, (4) bank statements, \lhich can be conveniently
segregated from other business matters of Lessee, (5) settlement
repor:t sheet.s of tr:ansactions IJith Subtenants, concessionai~es, and
licensees, (6) detailed o~iginal records of any exclusions or:
deduct.ions fr:om gr:oss sales, (7) such other records, if any, \lhich
\lould normally be examined by an independent accountant pursuant to
accepted aUditing stancards in perfor:ming an audit of Lessee's sales.
Such bOOks and recorcs shall be open to the inspection of LeSsor and
Lessor:'s dUly author:ized agents at all reasonable times dur:ing
business hour:s at any time during the term of this Lease and for a
period of at least one (1) year aft.er: the termination of this Lease.
If Lessor should make an audit of Lessee's recor:ds and Lessee's gross
sales statements should be found to be under:stated by more than l%,
then Lessee in additio'n to paying the percentage rental"due for Such
undeestatement shall pay to Lessor: the cost of the audit. If any
gover:nmental tax author:ity shall incr:ease gross sales as reported by
Lessee on any such tax ~eturn after audit, foe any lease o~ fiScal
year, oe any portion thereof, for: ...hich gr:oss sales have been
reported, then the Lessee shall notify the Lessor promptly of SUch
increase and pay any additional per:centage rental due LeSsor.
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(e) If Lessee shall fail to prepare '"d d&,.;Uo .....:'U~"-
the time heceinaftec specified any statement of gre's'; C;~e., ftJj..........Q!...
hereunder:, Lessoc may elect to treat Lessee's said .f~I......(. ().c,C\.
breach of this Leue, entitling Lessor to terminate this ~e4"'t.o-r
Lessee's right to possession of the Premises, or both, but only att~
Lessor has given Lessee notice- in writing as her:einafter provided.
If Lessee fails to pr:epare and deliver: said statement within fifteen
(IS) days aftec receiving said notice, Lessor may also, in the
alternative, elect to make an audit of all books and recor:ds of
Lessee, including Lessee's bank accounts which in any \lay pertain to
or sho\l gr:oss sales and to pr:epare the statement oc statements which
Lessee has failed to pr:epare and deliver. Such audit shall be made
and such statement cc statements shall be prepaced by an accountant
selected by Lessor:. The statement or: statements so prepared shall be
conclusive on Lessee, and the Lessee shall pay on demand all expenses
of such audit and cf the prepar:ation of any such statements and all
sums as may be sho\ln by such audit to be due as per:centage rental.
(f) In comput. ing damages or r:ental due under: th is
Lease the value of percent.age rental for any period subsequent to the
ter:mination of this Lease or: the termination of Lessee's r:ight of
possession shall be an amount per: year equal to cn: third of the
total.. percentage r:ent paid by - Lessee for the last .three (3) full
lease year:s immediately prece9,j,ng ,such ter:mination, and if less than
thr:ee (3) full :year:s shan have e1epsed, sllch value shall be an
amount per: year: equal to the average year:ly pe::centage rental
ther:etofor:e paid.
3.04 Lessor: to Pay Taxes. Lessor agrees to pay all eeal
pr:operty taxes, stlecial taxes, or assessments, including steeet
impr:ovemen t liens, if any, lev ied or: assessed upon or: agains t the
Leased pr:emises and any impr:ovements or fixtures erected or si tuate
ther:eon, dur: ing the Lease Teem. Lessee agrees to pay all prope rty
taxes on its personal pr:operty located on the Leased Premises.
3.0S Installment Payment. In the event any special tax or
assessment is levied or assessed on the Leased pr:emises \lhich becomes
due and payable dur:ing, and the delinquency date for: \lhich falls
within, the Lease Ter:m, or: any extension, \lhich tax or: assessment may
be legally paid in installments (\lhether by subjecting ,the, demised
propecty to bond or other:\lise), Lessee shall have the option' to pay
such tax or: assessment in. installments. In the event of stich
election, Lessee shall be liable only for those installments of such
tax or: assessment \lhich become due and payable during, and the
delinquency date for: \lhich falls \lithin, the Lease Ter:m, or any
extension. Lessor agr:ees to execute any instr:ument that may be
necessar:y to permit the payment of such special tax or assessment in
installment.s.
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3.06 Ellcluded Taxes. Lessee shall not be required to pay Any
'ranchise, estate, inheritance, succession, capital levy or transfer:
,ax of Leasoc, oc any income, excess pr:of i ts, oc revenue tax. oc any
)ther tax, assessment. chacge or levy upon the rent payable by Lessee
lnder thia Lease, and all such taxes, assessments, charges and levies
shall be payable by Lessoc. Lessor: shall not, without consent of
.eallee, do any act which vill .c;au.se the taxes and assessments on the
.ealled Pcemiaes to be incr:eased.
3.07 Contest. Lessee shall have the dght to contest the
~ssessment, account or validity of any tax \lhich is Lessee's
:lbl iga tion under the terms of th is Lease by appropda te legal
?coceedings. Lessor shall, upon cec;uest, join in any such
proceedings if Lessee determines that it shall be necessacy oc
=onvenient for Lessor: to do so in order for Lessee to prosecute such
?coceedings pr:opecly.
ARTICLE IV
3.0B Utility Charges. Lessee shall payor cause to be paid
:ll charges for: \late::-. he:::, gas, electr:icity, se\lers. anc any and
:11 othe::- utilities usec upon the Leased Premises thr:oughout the ter:m
::f this Lease. including any connection fees.
Security Deposit, A security deposit in.- ",,~,:: of
7en Thousano ,000.00) Dellars shall be paid essee to Lessor:,
52,500.00 upon exec hereof, and S'2,5 with each of the ,first
::hcee monthly-~ease payment. . er ~er:, for the payment of' rents to
:,eCClme due to Lessor unee~ ~ lS eement, and for the faithful
?erfor:mance by Lessee ~_ all the other: 0 .' ations her:eunce::- ane foe
::he payment of a and all sums of moneys for Lessee Illay be or:
become 1 ia ere under , pro v idee, ho...ever, that the :... secur i ty
deposi all be appliec to r:ent due and payable in the e nth
(II and twelfth (12th) months of the fir:st. year of this Leas~,nd
ereafter: there shall be no security deposit. c:::Jl...d
DSE OF PREMISES
4.01 Permitted Dse. Lessee shall have the r:ight to use the
Leased Premises for the continuation of the hotel and restaurant. and
bar uses for: \lhich it is cur:rently being us.ed, and for any and all
natural extensions or 'renovations of those uses. All uses descr:ibed
in this section shall be permitted" but none shall be r:equired,
except as set forth in section 4.06 of this Agr:eement.
4.02 Signs. Lessee shall have the right to erect and Illaintain
upon the impr:ovements and on the Leased Premises such signs as it
deems appr:opr:iate to the conduct of its business. Lessee shall have
no eight to erect or maintain any sign used for the purpose of
advertising any business, activity, or: position othe:: than the
business or businesses of Lessee car:ried on on the Leased Premises.
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-1.03 Waste and Nuisance. Lessee shall not commit., or suffer
to be committed, any vaste on the Leased Premises oc any improvements
erected or situate thereon, noc shall it maintain, commit, oc pecmit
the maintenance or commission of any nuisance on the Leased pr:emises
or use the Leased Premises oc improvements for: any unla\lful purpose.
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4.04 Termination if Dse Becomes Dnlavful or Impossible. If it
is or becomes unlavful foe Lessee, or anyone holding under Lessee
directly or indirectly, to conduct the business described and
anticipated in section 4.01 of this Agceement on the Leased Premises,
so tha tit becomes imposs ible to use the Leased Premises foe the
purpose described in section 4.01 of this Agr:eement, or such use is
declared unla\lful, then Lessee shall have the right at any time
ther:ea~ter to ter:minate this Lease by giving Lessoc one hundred
eighty (180) days notice in \lr:iting of such termination.
4.05 Rent Abatement if Premises are Temporarily Unusable. If,
as a r:esult of fire, flood, or: insurrection, the Leased Premises
shall become unusable for Lessee's purposes, from a practical
standpoint, for: a pe::ioc of thir:ty (30) consecutive cays or longer,
then Lessee may, by notice in \lr:iting fr:om Lessee to Lesso::, at any
time pr:ior: to the cate vhen this Lease would otherlo'lse terminate,
ex tend th is Lease, IIi thout the requ i r:emen ~ of the payment of r:e-n t,'
fo~' the period of time \lhich, the Leased 'Et:emises vas unusable fr:om a
pracfic"al standpoint for the purposes 'described. in section 4.01 of
this Agreement.
4.06 Continuous Dse. Should Lessee fail to ope::ate the hotel
or restaurant situate on the Leased pr:emises for a period of thir:ty
(30) days, unless prevented by damage to the Lea.sed P::e!llises, (e. g. ,
by fir:e or flood, repairs, acts of God or: other: causes beyond the
control of Lessee), then Lessor: shall have the option to terminate
this Lease Agr:eement after giving t\lenty (20) days \lritten notice of
its intention to te::minate to the Lessee.
4.09 Illegal Activity. Lessee shall not engage in, permi t,
nor suffer anyone else to per:mit., any illegal or: cr:iminal activity or:
stat.us to be car:r:ied on or: exist at the premises. Should Lessee not
cease any such illegal or: criminal act i v i ty, or correct any such
illegal or: crim.inal status, then Lessee shall be in default and,
Lessor shall be entitled to the remedies set forth at section 11.01
of this Agr:eement upon giving the thirty (30) day notice provided for
ther:ein.
4.10 Arbitration. Any dispute bet...een Lessor and Lessee as to
\lhat constitutes a permitted or: pr:ohibited use, or: \laste or nuisance,
or: cause for termination or r:ent abatement, all as pr:ovided in this
Article IV of this Ac;reement., shall be submitt.ed to arbit.r:at.ion as
her:einafter: pr:ovided f6r.
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ARTICLE V
LESSEE IMPROVEMENTS AND PROPERTY
5.01 Ownership of Lessee Improvements. All fixtures, and any
replacements of existing personal pr:operty, installed in or placed
upon the Leased premises by Less-ee, shall be and remain the property
of Lessee until transferred to Lessor: pursuant to the ter:ms of this
Agreement, and par:ticularly, pursuant. to the teems of section 12.03
of this Agreement. Any personal property placed in the Leased
Premises by the Lessee \lhich is not a replacement of existing
personal pcoperty shall remain Lessee's propecty and shall cemain so
upon the tecmination of this Lease for: any reason.
S.02 Lessee I s Mortgage. Lessee agrees to execute a mor:tgage
or financing statement in favor: of Lessor in an amount equal to the
total sum expended by Lessee for: all alterations, changes and
additions to the Leased premises. The sole purpose of such financing
statement anc mortgage is to secure Lessor:'s int.er:est in the event of
execution, levy, banl<ruptcy or: othe:: actions adver:se to Lessee or:
Lessor:.
ARTICLE: VI
,RIGBT OF fIRST REFUSAL
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6.01 Transfer:. In the event of any proposed transfer of any
interest in the Leased pcemises by Lessor:, Lessee shall have the
right of fir:st refusal to pur:chase on the same ter:ms and conditions
as offered by or to the pr:oposec tr:ansferee, pcovided, hO\lever, that
this Right. of First Refusal shall not apply to any transfer to any
lineal descendant (and spouse of any lineal desc,endant) of the
Lessor. The right of first refusal must be exer:cised, in \lriting,
~ithin ten (10) business days after: receipt of \lr:itten notices of the
proposed transfer: (to include all ter:ms and conditions theceof and
the identity of the pr:oposed tr'ansferee), ...ith settlement to take
place within ninety (90) days thereafter. Should any of the terms or:
conditions of any proposed transfer: involve circumstances other than
the amount and timing of monetar:y payments, then Lessee may provide
the r:easonable equivalent ther:eof in cash.
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6.02 Additional Terms. Lessor' hereby consents ,to the
assignment of this right. of first refu:>al fr:om Lessee to one of the
joint venturers of the Lessee. No ...ritten notice of a proposed
tcansfer: shall be effective if any of the ter:ms of the proposed
transfer shall change, in \lhich event, a ne... notice shall be sent.
No failure to exercise the r:ight of fir:st r:efusal shall act as an
election to \laive the right. of first refusal, or: right to notice fr:om
Lessor:, in the event of any fut.ur:e pr:oposed tr:ansfer:, or in the event
of any change in terms 'of a proposed tr:ansfer:.
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ARTICLE VII
REPAIRS AND RESTORATION
7.01 Lessee's Duty to Repair. Lessee, at Lessee's own cost
and expense at all times dudng the term of this Lease, agrees to
keep and maintain; ,or cause t.a be kept and maintained, all buildings
and improvements ecected upon the Leased Pre~ises in a good state of
appeacance and cepaic, ceasonable \lear and tear excepted, pcovided,
hO\levee, that Lessor: shall be solely cesponsible foe all packing lot.
repaics.
7.02 sixty Percent Damage - Termination Option. If, by fire,
flood, explosion, public enemy, ciot, civil commotion, oc act of God,
the pcemises dudng the term shall be damaged in excess of sixty
(60') peccent, this Lease, at the option of Lessee, to be eXHcised
by not i ce to Lessor: in wd ti ng, sha 11 cease and tecminate. The ter:m
"damaged in excess of sixty (60\) percent" shall be construed to mean
such damage to the buildings 0:: imtJr:ovements occupiec by Lessee
(excluding damage caused solely by wat.er: used in extinguishing fir:e),
as \lill requir:e an expenditut'e in excess of sixty (60\) pe::-cent of
the ma::-ket value (pdo:: to t~,e damage) of the builcings or
im?covemen.ts, in oree:: to make ce?=.i::-s.
7 :03 Damage Less than Siict~l Percent - Repairs., If, by fi r:e,
flood~ ei~losio~, public'enemy, rict, civil commotion,'ot' act o~ God,
the pr:emises ducing the ter:m shall be damaged to an extent less than
sixty (60') peecent (ot' in excess of sixty (60') per:cent and Lessee
shall not exercise its option t.o terminate this Lease) Lessee shall
repair: (\lith Lessee's funds or any insur:ance funds) the premises with
due diligence, and this Lease shall continue in full fot'ce and
effect.
7.04 Inspection by Lessor. Lessee shall permit Lessot' and its
agents to enter into and upon the Leased pr:emises and any
impr:ovements erected thereon at all r:easonable times foe the pur:pose
of inspecting the same oc for: the pucpose of maintaining ot' making
repair:s to the impr:ovelllents \lhich Lessor elects to do put'suant to
this Art.icle.
7.05 Delivery of pr:operty. ~essee shall, thcoughout the Lease
Ter:m, maintain tne Leased, Premises and all impr:ovements et'ected or:
situate ther:eon as pt'ovided in section 7. Ol of this Agreement. and
shall, at the ter:mination of this Lease, deliver up the premises in a
clean and sanitary condition in substant.ially the same condition that
existed on the Beginning Date, r:easonable vear and teac, damage by
the elements, acts of God, \lar: and any act of var: excepted, provided,
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howevec, tha t any insucance pr:oceeds for any such casual ty not used
to repair or replace the Leased pr:emises or: improvements shall be
paid ovec to the Lessor and Lessee shall be responsbile to Lessoc for --
any deficiencies in insucance or: lack of coverage or deductible.
7.06 Lessor's Right td Repair. In the event Lessee should
neglect to reasonably mainta in the Leased Premises and all
improvements erected or: situate theceon, Lessor shall have the right,
but not the obligation, to cause repairs or corrections to be lIIade,
and any reasonable costs therefor shall be payable by Lessee to
Lessor as additional rental on the next monthly rental pai'1llent due
after notice from Lessor to Lessee of the cost of such repairs oc
corrections, pcovided, hO\lever:, that prior to making oc causing to be
made any such repair:s, maintenance, or corrections, Lessor: shall give
Lessee thir:ty (30) days \lr:itten notice, within \lhich time Lessee
shall have the oppor:tunity to perfor:m such repairs, maintenance, or
corcections, or: object to the necessity of desirability of such
cepairs, maintenance or corrp.ctions. and if Lessor: and Lessee shall
be unable to agr:ee on the extent of repairs. m~intenance, or:
corr:ect ions to be mace, if any, ...i thin th i rty (30) days follolJing
notice of such objection, then the dispute shall be submitted to
arbitr:ation as proviced in section 7.07 of this Agr:eement.
7.07 Arbitration.' Any dispute bet\leen .Lessoc and Lesseeo-as, to
what 'constitutes' sufficient r:epair: and maintenance shall be submitted
to ar:bitcation as hereinafter: providec for:.
ARTICLE VIII
MECBANIC's LIENS
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8.01 Prohibition of Liens on Pee or Leasehold Interest.
Lessee shall not suffec or per:mit any mechanic's liens or other liens
to be filed against the fee of the Leased Premises nor against
Lessee's leasehold interest in th'e Leased Premises, by reason of any
work, labor, services or mat.eeials supplied or claimed to have been
supplied to Lessee or: anyone holding the Leased Premises or any part
thereof through or: under Lessee.
8.02 Removal of Lien~ by, Lessee. If any such mechanic's liens
or materialman I s lien shall be r:ecorded against the Leased Premises"
or any impr:ovements theceof, Lesse'e shall cause the same to be
removed or, in the al ter:nati ve, if Lessee in good faith desires to
contest the same, Lessee shall be pr:ivileged to do so but in such
case Lessee her:eby agr:ees to insur:e, defend, indemnify and save
Lessor harmless fr:om all liability for damages occasioned thereby and
shall, in the event of a judgment of foreclosur:e upon s~id mechanic's
lien, cause the same, to be dischar:ged and removed prior to the
execution of such judgment.
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ARTICLE IX
CONDEKNATION
9.01 Interests of Partieo on Condemnation. In the event the
Leased Premises or any part thereof shall be taken foe publ ic
purposes by condemnation as a result of any action or proceeding in
eminent domain, or shall be teansferred in lieu of condemnation to
any authority entitled to exer:cise the power of eminent domain, the
interests of Lessor and Lessee in the award or consideration for: such
transfer and the effect of the taking or transfer: upon this Lease
shall be as pcovided by this Ar:ticle.
9.02 Total Taking - Termination. In the event the entire
Leased Pr:emises is taken or: so transferred, this Lease and all of the
right, title, and interest theceunder shall cease on the date title
to such Leas~d Premises vests in the condemning authority, and the
pr:oceeds of such concemnation shall be divided as follo~s:
(a) Lesse~ shall r:eceive any and all ao,;a:-e!s for: the
unexpir:ed Lease Te:-m, plus moving expenses. and any other: sums to
\lhich a Lessee \loulc be proper:ly and la"'fully entitlee! (except any
a\lar:ds.or:,pr:oceeds allocatee! pur:suant to sub-section (b) her:eafter:).
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(b') Lessor: shall r:'ece i ve all of the - sa'id' othe:- condemna t ion
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9.03 Par:tial Taking - Condemnation. In the event of .the
taking or transfer: of only a part of the Leased pr:emises leaving the
cemainder of the pr:e:lises in such location, or in such for:m, shape.
or reduced size as to be not effectively and pr:acticably usable for:
the purpose of oper:ation theceon of Lessee's business, this Lease and
all right, title. and inter:est thereunder shall cease on the date
ti tle to the Land or the portion thereof so taken or: transferred
vests in the condemning authority. On or befor:e the date of said
vesting in the condemning authority, Lessee shall notify Lessor: that
it considers the par:tial taking to render the Leased Premises
practicably unusable in its opinion and that it \1111 consider: the
Lease to be ter:minated upon said vesting. Should Lessor: disagree
wi th Lessee' ~ deter:mination tha t the. taking r:enders tl:le LeaseO
Premises practicably unusable, Lessor shall in turn notify Lessee
within twenty (20) 'days of receipt of Lessee's notice and ther:eafter:
the matter may be submitted by either of the parties to arbitration
as hereinafter: provic!ed. The pr:oceeds of such condemnation shall be
divided accor:ding to the provisions of section 9.02 of this Lease.
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9.04
the even t
Premises,
in such
Partial Taking - Continuation With Rent Abatement. In
of a taking or tr:ansfer of only a par:t of the Leased
leaving the r:emainder: of the pr:emises in such location and
for:m, shape. or: size as to be used effectively and
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practicably in the opinion of the Lessee foe the purpose of oper:ation
ther:eon of Lessee's business, this Lease shall ter:minate and end as
to the por:tion of the premises so taken or tr:ansfecred as of the date
title to such por:tion vests in the condemning authodty, but shall
continue in full force and effect as to the portion of the LeaselS
Premises not so taken or tr:ansferred. From and after such date, the
rental required to be paid by Lessee to Lessor shall be reduced in
the proportion to \lhich the value of the ar:ea and impcovements so
taken or: tr:ansfer:red bear:s to the total value of the area and
impr:ovements of the Leased Premises and easement area. The pcoceeds
of such condemnation shall be divided according to the pr:ovisions of
section 9.02 of this Lease.
9.05 Voluntary Conveyance. A voluntary conveyance by Lessor
to a public utility, agency, or: authority under threat of a taking
undec the pO\lec of eminent dOIDain in lieu of formal proceedings shall
be deemed a taking \lithin the meaning of this Article IX.
9.06 Arbitration. If any condemnat.ion a~ard does not
distinguish bet\leen the classes of pr:oper:ty and inte::ests as
descr:ibed in section 9.02 of this Agreement, the parties shall
negotiate anc agr:ee as to such allocation and, failing such agreement
\lithin forty-five (45) days, the matter shall be submitted t_o
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ARTICLE X
ASSIGNMENT AND SUBLEASE
10.01 Consent of Lessor Required. Lessee, or any subsequent
Lessee, may assign, conveyor: transfer Lessee's interest in this
Lease and the leasehold estate cr:eated her:eby, or: a por:tion of said
interest, only \lith the \lritten consent of Lessor: to such assignment.
ARTICLE XI
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11.01 Default by Lessee. If Lessee shall allol{ any monthly
rent, to be in arrears for: a per:iod of thie~y (30) daYLilftec \lr:it~----.,
n01:'ic'e:::::U3:JllL-LessQJ;:J or shall remai-n--i-n___default undeTa~
c~ndiUo.!L_rof this.~as_e.. for:. a pedod of thir:ty '('3'O~a.ys a,~ter .
",-dtten notice .,(com Les5ciG__or:_,.shouliL,anY....2J:~.ll.!!r:s_OJl. than, Lessee ~.
secure posses6lon_of the..p..Femises, or any .E'ar:t ther:~?f, by operation-"---
of la... in any manner \lha t.soever:, L.-es=r" may at its opfion, \lithout
notice, or: fur:ther notice, to Lessee:
DEPAULT AND REMEDIES
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(a) ter:mina t.e
damages as provided fo~ in this
this Lease and r:ecover from Less~'
section 11.01 of this Agreement; or'
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(b)
Lease and r:ecovec
damages, including
continue to hold the Lessee obligated to this
by suit oc other:wise from the Lessee any and all
all rent due for the remainder: of the. Term: or
(c) entec upon the Leased Premises and any
impcovements erected oc si tua te thereon to cause repairs or
corrections to be made, or cor:rect or rectify any bceach, and any
reasonable costs therefor:e shall be payable by Lessee to Lessor as
additional rental on the next monthly rental payment due after notice
from Lessoc to Lessee of the cost of such actions: or:
(d) othet'\lise satisfy the br:each of Lessee's duty or:
obligation by the payment of money due or: the taking of action and
any reasonable costs thereof shall be payable by Lessee to Lessoe as
additional r:ental on the next monthly rent.al payment. due aft.er: notice
fcom Lessor to Lessee of t.he cost of such actions; or:
(e) ce-enter: and take possession of said premises and
r:emove all per:sons and pro!,er:ty thece.fr:om, wit.hout being deemed
guilty of any -mal\ne:: of-tr:espass, and r:elet the premises or any part
ther:eof, for: all ~ any part of the. r:.~!ll_ainder___of said term. to II
party satisfactory to Lessor, and at such monthly rental as Lessor:
may \lith reas.onable dlJigence b~._. able to' secuce.._Sl'Lo.uld Lessor: be
unable to r:.fl it 'afte:: reaso_n.!l_b_l_!l.~]~f6r:ts__to do sQ.~ or: should such
monthly rental::-be les's--.than the rental Lessee w'as "obligatec to pa"y
under this Lease, plus the expense of reletting, then Lessee shall
pay ~he amount of such deficiency to Lessor:: or:
(fl avail itself of any other: remedy at la\l or equity.
The said rights and remedies of Lessor shall be cumulative and not in
the alter:native. Lessor shall have the right to effect the r:emedies
set forth in sub-section (cl and (d) of this section ll.Ol of this
Lease upon less than thir:ty (30), days notice if a shortec pedod is
required so as to prevent irreparable injur:y to the Leased pr:emises
or: the motel and restaurant business conducted ther:eon.
ll.02 Landlor:d's Lien-Sale of Lessee's Property. It is
expr:essly agreed that in the event of default by Lessee hereunder:,
Lessor: shall have a lien on all goods, chattels, or: personal pr:oper:ty
of any description belonging to Lessee or: to either joint venturer of,
Lessee which are placed in, or: become a pact of, the Leased Premises,
as securi ty for rent due and to become due for: the remainder of the
then current Lease Ter:m, \lhich lien shall not be in lieu of oc in any
\lay affect the statutor:y Lessor's lien given by la\l, but shall be
cumulative ther:eto: and Lessee hereby grant.s to lessor: a secur:ity
interest in all such per:sonal pr:operty placed in or on said Leased
pr:emises for: such purposes. provided. hO\lever:, that no secur: i ty
inter:est or: Financinc Statement shall be filed nor: shall such lien be
per:fected in any manner, until default by Lessee and thirty (30) days
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wr:itten notice fcom Lessor to Lessee of Lessoc's intent to so file or
perfect. Th is shall not prevent the sale by Lessee of any
merchandise oc inventory in the ordinary course of business fcee of
such lien to Lessor. In the event Lessor execcises the opt ion
provided in sub-sections (a), (b), (e), or (f) of section lLOI of
this Agreement. then Lessoc llIay- take possession of all of Lessee's
property and the proper:ty of either joint venturer of Lessee on the
Leased Premises and sell same at public or private sale afte:: giving
Lessee reasonable notice of the time and place of any public sale oc
of the time aftec IIhich any private sale is to be made, for: cash or
on credit, oc for such pr:ices and terms as Lessor deem~ best, \lith or
without having the pr:oper:ty present at such sale. The proceeds of
such sale shall be applied first to the necessary and proper: expense
of removing, storing, and selling such proper:ty, the:! to the payment
of any rent due or to become due under this Lease, or any damages as
calculated undec sections 1l.01 or 11.02 of this Agr:eement, \lith the
balance, if any, t.o be paid to Lessee. The pr:c'/isicns of this
section shall not prevent, nor: shall they prohibit, the Le~see or its
Oper:ation Manager: from disposing of any assets free a:!c clear of any
lien pr:ovidec foe in this section, until such time as the said lien
should be per:fectec,
11.03 Remedies Cumulative. All rights and r:emedies 'of' Lessor
under:, this Lease shall be cumu lat i ve" and none shall exc1 ude - any
other: right or r:emedy at la\l. - -Such rights and remedies may be
exer:cised and enforced concur:cently and 'Whenever: and as often as
occasion therefor:e arises.
11.04 Mitigation of Damages. In the event of any default,
Lessee shall be given credit against any damages, for any rent
actually received upon the r:e-rental of the restaur:ant or hotel, or
the fair market cental value of the restaurant or: hotel in the event
that Lessor resumes oper:ation of one oe both facilities.
ARTICLE XII
TERMINATION AND SURRENDER
l2.01 No Right to Terminate. Ne i ther Lessor: nor Lessee shall
have the right tc? terminate this Lease for any reason during the
Lease Term. except as specifically provided in this Ac:;reement.
12.02 Automatic Tet'lllination. This Lease shall automatically
tecminate at the end of the Lease Term or any five year per:iod if
Lessee has exer:ci~ec its option to terminate the Lease pursuant to
section 2.02 of this Agr:eement.
12.03 surr:ender of Possession. Unless ot.he:-.ise mutually
agr:eed in \lr:iting by the par:ties pr:ior to the termination of the
Lease, either: pursuant to section 12.02 or any option expressly
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pr:ovided for: in this Agreement, Lessee agrees to redelive~ possession
of the Leased Premises, and the improvements, fixtures and pr:opecty
thereon which are to become the pcoperty of the Lessoc pucsuant to
section 5.01 of this Agreement, in substantially the same condition
that existed on the Beginning Date, reasonable weac and tear, damage
by the elements, acts of God, war and any act of war excepted, all as
provided in section 7.05 of this Agreement.
12.04 Other Acts and Effects of Termination. Upon termination:
(a) If applicable, all financing statements and
mortgages executed by Lessor or: Lessee shall be satisfied, ter:minated
and released in full by Lessee:
(b) This Agreement shall be of no further: for:ce and
effect except as to those dghts, obligations and remedies as may
have ar:isen pr:ior to ter:mination or: \lhich may arise thereafter as a
result of acts or events occur:r:ing prior: to ter:mination.
ARTICLE XIII
WARRANTIES, INDEMNITY, LIABILITY' INSURANCE
13.01 Indeiitn.ity,of Lessor. Lessee agr:ees to insuce, de.fend,
indenfnify and nold LesS'Or: har:m!ess against any and all claims,
demands, damages, costs and expenses, incl uding attorney I s fees for:
the de fense the::eof, ar: is ing fr:om the conduct or management of
Lessee I s bus iness at the Leased Premises, or: fr:om any breach on the
par:t of Lessee of any conditions of this Lease, or: condition created
by the Lessee, or: fr:om any act or negligence of Lessee, its agents,
contractoes, employees, subtenants, concessionair:es, or: licensees in
or: about the Leased pr:emises, or in connection \lith any accident,
personal injur:y or: daMage to per:sonal pr:operty ar:ising from or out of
any occurrence in, upon or: at tl:1e Leased pr:emises dur:ing the Lease
Term, unless same shall r:esult from negligence on the part of Lessor:.
In case of any action or pr:oceeding brought against Lessor by r:eason
of any such claim, Lessee, on notice from Lessor:, covenants to defend
such action or proceeding by counsel acceptable to Lessor.
. 13.02 Insurance. Lessee agr:ees that .at all times during the
Term of this Lease or: any extensions, it shall keep in effect a
policy of public liability and proper:ty damage insur:ance insur:ing the
demised premises against any and all claims of personal injury or
proper:ty damage, and shall keep in effect liability insurance, Fir:e
Legal Liability Insurance, Impr:ovements and Better:ments Insur:ance, in
such amounts as the parties may agree to from time to time, or,
failing such agreement, in reasonable amounts deter:mined by
ar:bitr:ation. Lessee may, at Lessee's opt.ion, obtain and carr:y any
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other: insucance Lessee may deem to be necellsary or: desirable. All
said insurance policies shall provide foe the payment foe any losses
to eithec Lessor or Lessee as their interest may appear: undec this
Lease.
13.03 Insurance-proof of Coverage. The orig inal policies Ulay
be retained by the Lessee, but the Lessor llhall have the right to
inspect and copy any and all such policies, and Lessee, on demand,
agrees to furnish the LeSSOr: wi th proof of payment of the premium or
premiums on any policies provided for in this Agr:eement.
13.04 Other: Insurance.
insurance on any property or
Agreement without also naming
their inter:ests Ulay appeac.
13.05 Insucance-protection Against Cancellation. Each
insurance policy p::ovided for: in this Agreement shall expcessly
pr:ovice that the policy shall not be canceled or alte::ed ...ithout
thir:ty (30) days prior Io'r:itten notice to all parties having an
interest in the cove::age.
Lessee shall not obtain any othec
matter: which is the subject of this
Lessor: as an additional insured as
13.06 Insur:ance-Failur:e to Secure. If Lessee at any time
,ducin,g the Ter:m hereof should fail to seCUr:e. or maintain- the
for:egoing insurance, Lessee shall be in default under the tecms7 of
this Agreement, and Lessor shall have the eight but not the
obligation, to obtain such insurance in Lessee's name or as the agent
of the Lessee, and any r:easonable costs thecefor shall be payable by
Lessee to LeSSOr: as additional rental on the next monthly rental
payment due date after: notice fr:om Lessor to Lessee of the cost of
such insurance.
13.07 compliance with Insurance Requirements. Lessee, at its
sole cost, shall effect compl iance with all requests of any fire
insurance carriec of Lessee or LeSSOr: concerning Leased Premises or
operations modifications. All insurance proceeds r:eceived by any
party heceto arising out of damage to the proper:ty shall be utilized
for the prompt restoration of the property to its pre-existing, or
bettec, condition.
13.06 Repr:esentationll: Lessor: represents and \lacrants that the,
real estate and personal property, utility services and facilities
appurtenant thereto are and will be adequate, sufficient and in
oper:ating condition foe the conduct of both motel and r:estaurant
operations upon the Leased pr:emises and that there is no condition
that does or: ...ill adver:sely affect the legality of the business to be
conducted or: impair or limit. the operation of the business by the
Lessee. As to the electr:ic ser:vice, LessOC r:epr:esents and \larrants
only that it has been adequate for pr:ior restaurant ope::ations on the
Leased pcemises: any additional costs to upgrade the electr:ic service
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for Lessee's additional cequir:ements shall be the responsibility of
Lessee. Lessoc \lill have a continuing responsibility for damages oc
loss to Lessee acising from latent conditions existing on the Leased
Premises llnd will indemnify, aave, Il.Clld harmless and defend Lessee
,against any such "liability, losln!s or damages.
ARTICLE XIV
ARBITRATION
14.0l Agreement to Submit. In the event Lessoc and Lessee
cannot agree on any point in this Lease that is expcessly subject to
arbitcation, or: should they her:eafter: stipulate in \It'iting that any
dispute bet\leen them be submi t ted to arb i tration, such contcovecsy
bet\leen the parties involving rights and obligations at'ising under:
the ter:ms of t.his Agreement shall be subject to acbitration, except
contr:oversies involving less than $2,500.00, pr:ovided, howeve::, that
either: par:ty shall have the eight to appeal any ar:bitr:ation awar:d to
Court, de~. The ar:bitration shall comply ...ith and be governed by
the pr:ovisions of this Agreement and the Pennsylvania Unifor:m
Arbitr:ation Act, Sections 7301 t.hrough 7320 of Title 42 of the
Pennsylvania Consolidated Statutes.
14'.02 Demand foe Arbi tra tion. ' In the eiieDt Lessor anc Lessee
. cannot. agr:ee on any point in" this Lease that. is "expcessly subject to
arbitr:ation, either: party may make a demand foe ar:bitration by filing
a demand in \lriting \lith the other.
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14.03 Appointment of Arbitrators. The parties may agree on one
ar:bitr:ator:. Bowever, if they cannot so agree, thr:ee arbitrator:s
shall be appointed as follo\ls: Within t\lenty (20) days of a Demand
for: Ar:bitration, each par:ty shall name one arbitrator in \It'iting and
give notice to the other par:ty of the name and addcess of the
arbitr:ator. In case of the failure of either party hereto to name an
arbi tr:a tor, the other: par:ty shall have the right to apply to the
Court of Common Pleas for: the County of Cumberland, Pennsylvania, to
appoint an arbitrator to r:epresent the defaulting par:ty. The t\lO
ar:bit.r:ators thus appoint.ed (in either: manner) shall select and
appoint in writing a third ar:bitrator: and give wt'itten notice to
Lessor: anS! Lessee, or if \lithin t\lenty (20) days a~ter the
appointment of said second ar:bitrator:, the two arbitrator:s shall fail
to appoint a thir:d,' then either pacty hereto shall have the r:ight to
make application to the Court of Common Pleas for the County of
Cumberland, Pennsylvania, to appoint such third ar:bitrator.
l4.04 Qualifications of Arbitrators. All of the arbitr:at.ors
appoint.ed must have no financial or: per:sonal inter:est in the result
of the ar:bitr:ation.
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14.05 Vacancies and substitutionl!l. If an appointed acbitrator
fails to act or is unable to act, the parties may appoint a successor
as follows: \lhether oc not a single arbitrator was chosen initially,
the parties may agcee on another single arbitrator: oc it the parties
cannot agree on a single acb~~rator, the l!IUccessor shall be appointed
by the party or by the arbitratocs who selected the acbitrator \lho is
no longer pacticipating. It the method provided in this section
14.05 or section 14.03 of this Agr:eement fails or cannot be followed,
one or more acbitrators may be appointed by a couct having
jurisdiction on application of either party.
14.06 'rime and Place of Bearing. All acbitr:ation hearings
conducted under this Agr:eement shall take place in Cumberland County,
Pennsylvania. The arbitr:ator:s shall set the time and place of the
acbi tra t ion hear:ings and they shall de liver: to each party, by
pecsonal secvice or cer:tified mail, wr:itten notice stating the ,time,
location, and subject matte:: of the ar:bitr:ation hear:ing.
14.07 Power:s of Ar:bitr:ators. The arbitcators shall have the
pO\ler to: decice all procedu::al issues: interpre~ and determine
questions of both la'ol anc fact: base conclusions on their- r:eacing of
the Agreement: acjou::n or- postpone t.he hearing for: good cause to a
time not later: than ~he date for making the. a\lard unless the parties
consent to ~ late:: 'date: anC: I:!ear: and determine the c::ontr:over:sy, O-D_
the evidence presented even though a duly notifiec party fails t.o'
appear:. All pO\lers of the acbitrators shall be exe::cised only by a
major:ity of the ar:bitrators.
14.08 Evidence. The arbi tra tor:s may issue subpoenas for the
attendance of \litnesses and the peoduction of ot.her evidence, per:mit
depositions to be taken of witnesses ...ho cannot be ser-ved vith a
subpoena or \lho cannot attend the hearing, and administer oaths as
pr:ovided by la\l.
14.09 Avard. The acbitr:ation a\laed shall be valid if made by a
majority of the ar:bitr:ators. It shall be in vdting and signed by
the arbitrators joining in the a\lard. The arbitrators shall deliver
a copy of their: avar-d to each party by the method pr:ovided for notice
by one party to another: in this Agreement. The a\lard shall be made
vithin ninety (90) days fr:om the date of toe appointment of the' last
ar:bitrator unless the par:ties consent in writing to extend this
period befor:e or after it expires. The a...ard may be confirmed by any
cour:t having jucisdiction on application of either party.
14.10 Nev Ar:bitrator:s. If the arbitrator:s appointed pur:,suant
to section 14.03 of this Agr:eement. fail to make an a\lar:d \lithin
ninety (90) days fr-om the date of the appointment of the last.
arbiteator, they shall ,be dischar:ged unless the' par:ties consent in
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\lriting to extend this period. Ne\l
shall be appointed and shall pr:oceed
in this Agr:eement. The process shall
is made.
arbitratocs (or: an arbitrator:l
in the same mannec as specified
be repeated until a final a\lard
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14.11 Costs of Arbitration. The costs and expenses of
acbitration, including the fees of the arbitrators and any attocney's
fees, shall be paid by the losing party or by both parties in the
proportions determined by the arbitrators in their a\lard.
ARTICLE XV
TBIRD PARTY BENEFICIARIES
15.01 No Thir:d par:ty Beneficiaries. It is the intention of the
pacties hereto that no provision of this Lease Agceement shall in any
vay inure to the benefit of any thir:d person (including the public at
lar:gel so as to constitute any such per:son a thir:d party beneficiaey
of such Lease Agr:eement or of anyone or: more of the te~ms the::eof or:
othec\lise give r:ise to any cause of action in any pe::son not a par:ty
to lIuch Agr:eement. For purposes of this section, the corporations
\lhich constitute B & H Joint Vent.ur:e shall be considered parties to
. this Agreement.
ARTICLE XVI
GENERAL PROVISIONS
16.0l
tase shall
hough the
tlnditions
Conditions and Covenants. All of the provIsions of this
be construed to be "conditions" as veIl as .covenants" as
vords specifically expr:essing or impar:ting covenants and
ver:e used in each separate provision.
16.02 No Waiver of Breach. No fai lure by ei ther Lessor: or:
'asee to insist upon the strict performance by the other of any
'\tenant, agreement, term. or: condition of this Lease or to exercise
il\y right or remedy consequent upon a breach ther:eof, shall
l\atitute a vaiver of any such' breach oc of such covenant,
t-eement, term, or: condition. No vaiver of any br:each shall affect
alter: this Lease, byt each. and every covenant, c~lndition,
to.emerat, and ter:m of this Lease shall con tinue in full for:ce and,
r.ct vith respect to any other then existing or subsequent br:each.
Time of Essence. Time is of the essence of this Lease,
pr:ovision.
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16.04 Computation of Time. Except vher:e this Lease gives a
date upon \lhich an act is to be perfor:med, the time in \lhich any act
provided by this Lease is to be done is computed by excluding thO!!
first day and including the last, unless the last day is a Saturday,
Sunday, or legal holiday, and.~hen it is also excluded.
16.05 Successors in Interest. Each and all of the covenants,
conditions, and cestcictions in this Lease shall inure to the benefit
of and shall be binding upon the pacties hereto and their: r:espective
heir:s, executors, administcators, legal representatives, successors,
assigns, or: other successocs in intecest.
16.06 Entice Agr:eement. This Lease contains the entire
agreement of the parties \lith respect to the mattecs cover:ed by this
Lease, and no other agr:eemen t, s ta tement, or: pr:omise made by any
par:ty, or to any employee, officer:, or: agent. of any party/ \lhich is
not contained in this Lease shall be binding or: valid.
16.07 pactial Invalidity. If any ter:m, covenant, condition, or:
pcovision of this Lease is helc by a cour:t of compete~: ju::isciction
to be invalid, 'Ioic, 0:: unenforceable, the re:::aince:: of the
pr:ovisions shall re:nain in full for:ce anc effect and shall in no \Jay
be affected, impairec, or invalida_ted.
: 16.08 Relationship of PartIe;: Nothing contained in this Lease
shall be deemed or: construec by the par:ties or: by any third per:son to
cr:eate the relationship of pr:incipal and agent or: of partner:ship or:
joint ventur:e or: of any association betveen Lessor: and Lessee, and
neithee the met.hod of computation of rent nor: any other: pr:ovisions
cont.ained in this Lease nor: any acts of the pacties shall be deemed
to create any relationship bet...een Lessor and Lessee, other than the
relationship of Lessor and Lessee.
16.09 Interpretation of Language. The language in all par:ts of
this Lease shall in all cases be simply construed accor:ding to its
fair: meaning and not strictly for or against Lessor or: Lessee.
16.10 Pennsylvania La\l to Apply. Th is Agreel:lent shall be
construed under and in accocdance vith the la\ls of the Common\lealth
of Pennsy~vania, and all obligations of th~ par:ties created her:eunder
are performable in Cumberland County, Pennsylvania.
16.11 Definitions-Construction. Unless other:\lise provided in
this Lease, or unless the context ot.hervise requir:es, the follo\ling
definitions and r:ules of constr:uction shall apply to this Lease,
cegardless of \lhethe:: the terms are capitalized or: not in any given
inst.ance:
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(a) Number and Gender. In this Lease, the neuter
gender includes the feminine and masculine, and the singulac number
includes the plucal, and the word "person" includes cocporation,
pactnership, firm, oc association wherevec the context so requir:es.
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(bl Mandator:y and Per:missive.
"agrees" are mandatory: "may" is permissive.
"Shall", "\lill", and
(c) Teem Includes Extens ions. All references to the
teem of this Lease or the Lease Term shall include any extensions of
such' Term.
(d) Land and pr:emises. Leased pr:emises, Land, or
pr:emises shall have one and the same meaning and shall include, ~here
the context so requi::es, the impr:ovements to the Land. In the event
of a par:tial taking or condemnation, these teems shall be r:edefined
as provided in section 9.07 of this Agr:eement.
,
(el pa::ties. paeties shall include the Lessor: and
Lessee named in this Lease and successor:s in interest to them.
(f l Sublessee. As used her:ein, the \lord "sublessee"
shall mean and incl-ude in adc i t. i on to a ,subl essee anc subtenan t, a
licensee, concessionaice, or other: occupan't or: user: of any por:ti_on o.f
the L_eased Premrse-s- or bu~lding oe'impr:ovements ther:eon. '
16.12 Captions. Captions of the ar:ticles, sections, and
par:agr:aphs of this Lease ar:e for: convenience and r:efecence only, and
the ...ords contained therein shall in no \lay be held to explain,
modify, amplify, or: aid in the interpr:etation, construction, or:
meaning of the provisions of this Lease.
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16.13 Attorney's Pees. In the event either: Lessor or Lessee
shall bring any action or pr:oceeding for: damages for an alleged
breach of any provls lon of this Lease, to recover rents, or to
enfor:ce, protect, or establish any right or: remedy of either: party,
the pr:evailing party shall be entitled to r:ecover: as a part of such
action oe proceedings reasonable attor:ney's fees and cour:t costs.
16.14 Interest. Any sum accruing to Le~soc,or: Lessee under: the
provisions of this Lease \lhich shall not be paid when due shall bear
inter:est at the r:ate hereinafter: spe'cified fr:om the dat'e such payment
~as first due, until paid. Intecest shall be at the rate of fifteen
(IS\) peecent per: annum.
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l6.15 Modification. No amendment, modification, or alter:ation
of the t.erms her:eof shall be binding unless the same be in \lriting,
dated subsequent to the'date her:eof, and duly executed by the par:ties
heret.o.
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16.16 Notices-Method and Time. All notices, demands, oc
requests from one pacty to anothec shall be either personally
deliveced or: sent by united States or private mail, certified or
register:ed, \lith provision for the execution of a receipt by the
recipient, postage pcepaid, t~ t~e address stated in section 16.17 of
this Agreement and shall be deemed to have been given at the time of
personal deliver:y or at the time of mailing or sending. '
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16.1? Notices-Addresses. All notices to be given undec this
Agreement shall be addressed to the addresses of the parties set
focth in the pceamble to this Agreement, or: at any othec addr:ess that
may subsequently be specified by written notice deliveced in
accordance \I i th section 16.16 herof. Any ass ignee or successor of
any intecest in this Lease Agr:eement shall immediately notify the
other: pacty of its addcess for the purpose of receipt of notice.
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16.IS Payment of Rent. All r:ents and other sums payable ~y
Lessee to Lessor shall be by check payable to Lesso::, delivered J.n
pecson or: mailed to Lessoc at the addr:ess set focth in the p::eamble.
Lessor: may at any time change the provisions of this section by
notice t.o the Lessee.
16.19 Broker: I s COmJIlis6 ions. Each of the par:t ies represents and
'\lar:rants that there ar:e no claims for br:oker's 'commissiops or
-finder's fees ih connection \lith the execut'ion of this Lease, =anc
each of the pa::ties agrees to indemnify the other against all
liabilities ar:isin9 fcom any such claim.
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16.20 Recording. At the request of either pa::ty, the parties
shall execute, ackno\lledge, and recor:d a memorandum of lease.
Contem?or:aneously \lith any such memor:andum, Lessee shall prepar:e and
execute an ackno\lledgement of the t.ermination of the Lease, in
recordable form, which shall be held by Lessor: and not recorded until
such time as this Lease is finally determined to be terminated. The
party so requesting the memor:andum shall bear: the cost of pr:eparing
and r:ecor:qin9 the same and the ack~ololledgement of the termination.
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16.21 Counterpar:ts. This Lease has been executed by the
par:ties in several counterpart.s, each of ...hich shall be deemed to be
an or:iginal copy.
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Execution. This Lease has been executed by the Lessor: on
day of ,(' f>" ,. , 1991, and by the Lessee on the
of S~f) " , 1991.
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LESSOR:
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D. Paul Beale
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Mildred E. Beale
LESSEE:
B & H JOINT VENTURE
Attest:
By: Beale Enter:pr-ises, Inc.
CO-Ventur-er-
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D. Paul Beale,'Pr-esident
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Secr:etary
Attest:
By: Club Management, Inc.
Co-Ventur:er-
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secr-etar-y
, Q C'- ($ 5-1L.... ~ " p~ (
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JOINT VENTURE AGREEMENT
TH IS AGREEMENT, made th is .1. ~ day of
and bet...een:
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, 1991, by
Beale Entecpr:ises, Inc., a Elenll'Sylvania business corpor:ation, \lhose
cegister:ed office addcess is 3721 Macket Street, (Hampden TO\lnship),
Camp Hill, Pennsylvania 170ll, her:einaftee sometimes refer:ced to as
"Beale Enterpcises., a joint venturer:, or a pacty to this Agreement,
AND
Club Management, Inc., a Pennsylvania business cor:por:ation, \lhose
r:egister:ed office address is
her:einafter: r:eferr:eci to as "Club Management", a joint venturec, or:
par:ty to this Agreement,
and is as follo\ls:
1. FORMATION, The par:t.ies voluntar:ily associate themselves as
joint ventucer:~ f9r: the pur:pose of conducting a hotel and r:estaur:ant
business at 3721 Market Street, (Hampden. Township'l, Camp ,Hill;
Pennsy1vania, kno\ln as the "Hampton Inn". ' .,
2. NAME. The name of the Joint Ventur:e shall be B & B Joint
Venture. This name \lill be register:ed in the office of the Secr:etary
of State of the Common\lealth of Pennsylvania as the fictitious name
of the Joint Venture.
3. TERM. The Joint Venture shall commence on t.he date of this
Agceement and shall continue for: a ter:m of t...enty (20) year:s from the
Beginning Date established pursuant to section 2.01 of the Lease
Agreement attached her:eto as Exhibit "A", provided, hO\lever:, that the
Joint Venture may be tecminated by Club Management at the end of the
first five year:s afte:: the date of this Agreement, and at the end of
the second and thir:d five year per:iods after the date of this
Agr:eement, by sending \lr:itten notice to Beale of such intention at
least one hundr:ed twenty (120) days pr:ior: to the expiration of the
then current five 'year per:iod.
4. CONTRIBUTIONS. Each of the parties shall contr:ibute the
pr:opor:tion of \lor:king capital \lhich r:elates to t.he aspects of the
business of the Joint Venture for \lhich such par:ty is the principal
manager: as pr:ovided in sections 7 and 8 of this Agr:eement. Neither
par:ty shall be r:equired to contr:ibute any other: or additional wor:king
capital. The funds to be cont.r:ibuted by Club Management for wor:king
capital shall be S500.00. The funds to be contr:ibuted by Beale
Enter:pr:ises for: working capital shall be S500.00.
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EXHIBIT
t}
.;',l
5. LIQUOR LICENSE. The Joint Ventur:e is the ol./ner: of
Pennsylvania Liquot' Contt'ol Boar:d (PLCB) hot.el liquor license number
TH 4949. This Joint Ventur:e Agreement is contingent upon the
appcoval by the PLCB of the amendment of the Joint Venture for
pucposes of substitution of Club Management for: Hench Enter:pr:ises,
Inc., a pr:ior: joint ventur:er:~. and approval by the PLCB of the change
of manager: to Club Management or its designee. Upon termination of
the Joint Ventur:e, the par:ties agree to teansfer: the license to Beale
Enterprises, oc its designee, for nominal consideration.
6. LEASE OF PROPERTY. The joint ventur:er:s agt'ee to lease the
hotel and restaur:ant fr:om o. Paul Beale and Mildred E. Beale uoon the
teems and conditions of the Lease Agreement attached he'-et.o as
Exhibit "An, her:einafter: refer:r:ed to as the "Lease". In the event of
an election to tet'minate by B & H Joint Ventur:e as pt'ovided in
section 3 of this Agreement, B & H Joint Ventur:e shall give notice to
ter:minate the Lease as provided in section 2.02 of the Lease, Club
Managemen t sha II pay the secur: i t Y depos i t pr:ov iced for in sect ion
3.09 of the Lease. In the event the said Lease expi::es or is
ter:minated, B & H Joi:lt Ventur:e shall tec-minate. In the event that
the Joint Venture ct' eithet' of the joint ventur:ers r:eceives a notice
concer:ning the r:ight cf fi::st r:efusal contained in At'tic!e VI of the
,said Lease, the pat'ty r:eceiving said notice shall immediately confirm
by ...riting that t~e other: 'joint ve~turer has r:eceived a copy.of the
said notice. Any exe::cise of the sai:'d -right of fir:st refusal shall
requir:e the unanimous consent of the t...o joint venturers. In the
event that the Joint Ventur:e does not exer:cise the said right of
fir:st r:efusal. eithe:: of the joint venturer:s shall have the dght to
exer:cise the r:ight of fir:st r:efusal individually. In the event that
both joint ventut'ers desir:e to exer:cise the dght of fir:st t'efusal
individually, then Club Management shall have the fit'st oppo::tunity
to so exer:cise, pr:ovided, however:, that the r:ight of first refusal
does not apply to any transfer: to any I ineal descendant, and spouse
of any lineal descendant, of o. Paul Beale or: Mildr:ed E. Beale.
7. JOINT VENTURE MANAGEMENT: OVERALL. B & R Joint. Venture
shall retain overall management responsibility for all of the
business of the Joint Ventur:e. In r:egard to any decision concer:ning
the opeeation or: impt'ovement of the hotel, Beale Enter:pdses shall
,have six ty (60%) percent of the votes of the Jo in,t Ventur:e, and Cl ub
Management. shall have for:ty (40%) percent of the votes of the Joint
Venture.' In regar:d to any decision conce::ning the opet'ation or:
impr:ovement of the r:estaur:ant, Club Management shall have sixty (60%)
per:cent of the votes of the Joint Venture, and Beale Entet'pr:ises
shall have for:ty (40%) percent. of the votes of the Joint Venture. In
the event of any cispute between the par:ties as to the classification
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of management. decisions for pueposes of
matter: shall be submitted to ar:bitr:ation,
for:, and the ar:bitr:ator shall be authorized
decisions into their constituent pacts
per:cent.ages accor:dingly.
voting percentages, the
as hereinafter provided
to break dO\ln any SUch
and allocate voting
8. JOINT VENTURE MANAGEMENT: DAY-TO-DAY. (a) Beale Enter:pcises
shall have pr:incipal management responsibility for: the hotel por:tion
of the Joi n t Ventur:e I s bus iness. Cl ub Management. -.shall have
pdncip~l_ management r:esponsibility for the rest.a~r:al'lt ,I?o,r:~.~o~ of the
JOlnt--Venture I s business. _____
'"
(b) Notwithstanding any ot.her provision in this Joint
Ventur:e Agr:eement, with r:espect to the operation of the por:tion of
the joint ventur:er:'s business \lhich constitutes the restaur:ant at the
~eased Pr:emises licensed by the Pennsylvania Liquor Contcol Board,
both Beale Ent.er:pr:ises and Club Management shall at all times have
such r:ight.s as ar:e requir:ed by a licensee under the t'ennsylvania
Liquor: Code, the r:egulations promulgated pursuant therato, and the
dir:ections of the Pennsylvania ~iquor: Control Boar:d.
9. MANAGEMENT COMPENSATION. In cons idera t ion of each join t.
ventur:e:: assuming pr:incipal management of the hotel anc r:estaurant
cespectillely, each :-joint venturer shall r:eceive a manasement fee
equal to all of the net 'pr:ofits of the portion of the JoInt. Venture 's
business for: ...hich they have pr:incipal management responsibility up
to a maximum of Six Eiundr:ed Thousand ($600,000.00) dollars per: yeae.
Any net pr:ofits of a portion of the Joint Venture's business in
excess of Six Hundr:ec Thousand ($600,000.00) dollar:s per year shall
be distribut.ed to the joint venturers in pr:opor:tion to their:
inter:ests in the Joint Venture. In consider:ation of each joint
ventur:er: receiving the for:egoing management fee, each joint ventur:er
shall bear: sole responsibility for any net. losses of the portion of
the Joint Venture's business for \lhich it has pr:incipal management
r:esponsibility, and shall insure, defend and indemnify the Joint
Venture and the ot.her: joint ventu~er: fr:om any such losses.
10. ACCOUNTING. For: purposes of section 9 of this Agreement,
net pr:o fits or losses for: each por:t ion of the Joint Venture's
business shall be deter:mined by allocating all of the expenses, and
income, of the Joint Vent.ur:e to 'either the hotel or: restaurant. Ten
thousand dollars ($IQ,QQO.OQ) of the initial minimum monthly r:ent
(but none of the percentage r:ental) for: the pr:emises as set for:th in
sect ion 3. Ol of the ~ease att.ached heee to as Exh ibi t "An shall' be
attr:ibuted t.o the hotel portion of the business. After the fifth
lease yea r:, t...o-thi rds (2/3) of the min imum mon thly r:ent (but none of
the per:cent.age r:ental) pr:ovided for: in Ar:ticle III of said Lease
shall be allocat.ed to Beale Enterpr:ises and one-thirc (1/3) of said
rent shall be allocate? to Club Management. The r:emainin9 pOt'tion of
said r:ent for: the pt'emises, including any inct'eases in t'ent as
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calculated in said Lease, shall be attribut.ed to the restaurant
portion of the business. In addition, all salaries, lIithholding
taxes, unemployment and \lor:kman' s compensation insurance payments,
and any and all other: expenses associated \lith employees of B & H
Joint Ventur:e, shall be allocated to the por:tion of the Joint
Ventuce's business to \lhich each employee's secvices r:elate. All
utilities and maintenance costs, purchases of supplies, inventor:y,
and equipment, and any impr:ovements to the pr:emises, shall be
allocated t.o the portion of the business to \lhich t.hey' relate. Any
governmental fees or: licenses relating to the r:estaurant business
shall be allocated to Club Management and any such fees or licenses
r:elating to the hotel business shall be allocated to Beale
Enter:pr:ises. The entir:e SIO,oOO.OO secur:ity deposit provided for: at
section 3.09 of the said Lease shall be allocated to Club Management..
Any and all losses, depr:eciation, or: other expenses, shall be
allocated to the portion of the business to \lhich they r:elate. It is
the expr:ess intent of this sect.ion that. ther:e \lill be no income or
expenses not allocated to eit.her: the hotel or: the r:astaurant portion
of the Joint Venture's business. All employees sa::'lices, and all
expenses and income, shall be deemed to apply only to cne aspect of B
& H Joint Venture's business (I.e., hotel or restau::a:l::), unless the
parties enter: into a lI::itten statement to the cont::ary, In order to
facilitate car:r:ying out these accounting Pr:ovisions, the Join~
Venture may ,establish separate CheCking -i!n.d ot.her: financial accounts
fo~ each por:tion of its business. In the event of any cfspute as t.o
IIhether: a par:ticula:: item or: income or: expense is attributable to one
por:tion of the business or: the other, the matter shall be resolved by
ar:bitr:ation as hereafter pr:ovided.
II. INsORANCE. Liability Insur:ance, Fir:e Legal Liability
Insur:ance, Impr:ovements and Better:ments Insur:ance, all as relates to
the r:estaur:ant por:tion of the Joint Venture's business and leased
premises, shall be allocated to Club Management as its expense. Club
Management shall provice, at its sole cost, a minimum of SlOO,Ooo.OO
of Dr:am Shop Insur:ance. All other: insur:ance, incLUding fir:e and
extended cover:age on all mot.el and r:estaur:ant bUildings, shall be
allocated to Beale Enter:pr:ise as its expense. Each par:ty shall be
r:esponsible for compliance \lith all r:equests of any insurance carr:ier:
concer:ning premises or: oper:ations modifications to the por:tion of the
business or: pr:emises for: \lhich the respective par:ty is r:esponsible
for: day, to day management, and any costs of such 'compl iance shall be
allocat.ed to the par:ty so r:esponsible. All insurance pr:oceeds
received by the Joint Ventur:e ar:ising out of damage to the pr:operty
shall be utilized for: the prompt restor:ation of the prope!:'ty t.o its
pr:e-exist.ing, or better, condition. All insur:ance shall be in the
name of B & H Joint Venture, ...ith Beale Enter:pdses and Club
Management as additional insured as thei:: interests may appear:, and
lIith the lessor:s under: the Lease as additional insu!:'eds IIhere
necessar:y or appropriate,
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12. BOOKS AND RECORDS. All books and recocds of the Joint
Venture, and all books and recor:ds of Beale Enterprises and Club
Management, shall be made available for: inspection and copying at any
reasonable time to the Joint Ventur:e and to Beale Entecpr:ises and
club Management, or: t.o anyone of them. The Joint Ventur:e shall
designate officecs of one oJ:.:. b~th of the parties as signatodes on
any checking or other: financial accounts..
13. INTERESTS IN JOINT VENTURE. Beale Enter:prises shall have a
fifty (50%) per:cent inter:est in the Joint Ventur:e and Club Management
shall have a fifty (50\) peccent intecest in the Joint Ventur:e.
14. FAILURE TO OPERATE. Should either: par:ty fail to manage the
day to day business of the poetion of the Joint Ventut'e's business
for: ...hich it has primary r:esponsibility, for: a per:iod of thir:ty (30)
days OJ:' mor:e, unless pr:evented by damage to that por:t.ion of the
premises, (e.g., by fire or flood, r:epair:s, acts of God or: other:
causes beyond the c:lntrol of the par:ty), then the other par:ty shall
have the immediat.e t'ight to oper:ate the por:tion of the business which
the defaulting party had the pr:imar:y r:esponsibility to manage, and
shall have the opticn to te::minate this Agt'eement after giving twenty
(20) days wr:itten ncdce of its intention to ter:minate to the par:ty
failing to so manage.
IS. FAILURE TO 'sATISFY EXPENSES AND CONDITIONS. In the event.
that eithei par:ty fails t.o r:eimbur:se B & H Joint Ventut'e for: any loss
or: expense allocated to it under: this Ageeement, or: fails to taKe any
action or: car:r:y out any duty r:equir:ed of it under: the ter:ms of this
Agr:eement, the othe:: pat'ty shall have the immediate dght to make up
such loss or: expense and/or: to take such action, anc shall have the
option to terminate this Agr:eement after: giving t'Jenty (20) days
wr:itten notice of its intent.ion to ter:minate to the defaulting party.
In addition to any other: r:emedy available to the non-defaulting
par:ty, the non-default.ing par:ty shall be entitled to r:eimbut'sement
for: any and all out of pocKet expenses associated \lith making up any
such loss or: expense or taking any such action.
16. EFFECT OF DEFAULT. In the event of the tet'mination of this
Agr:eement for r:eason of the default of one party het'eto:
(a) The defaulting par:ty shall remain' obl'igated t.o the
ot.her party for: the pot't.ion of the rent due undet' the ter:ms of the
lease attached het'eto as Exhibit "A" which \lould be payable ft'om that
par:ty as pr:ovided in section 10 of this Agr:eement, until the end of
the five (5) yeat' pedod dur:ing which t.he br:each occur:s, and the
following five (5) year pedod if the ter:mination occurs \lithin the
last ninety (90) days of a five (5) year: period and no notice of
tet'minat.ion of t.he Lease had been sent as pr:ovided in section 2.02 of
the said Lease.
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(b) The non-defaulting pat:'t.y shall have the dght. to have
the said Lease assigned to it, to continue to opet:'ate the entire
business of the Joint Ventuce, to sole possession and contr:ol of the
pr:emises, and to any and all inventor:y, financial accounts,
impcovements, supplies, fixtures, or: other asset.s of the Joint
Ventuce, regar:dless of \lhich, ,portion of the Joint Venture's business
they relate to.
(c) The defaulting par:ty shall insure, defend and
indemnify the non-defaulting paety against any loss attdbutable to
the defaulting pacty's por:tion of the Joint Ventur:e's business, as of
the date the ter:mination becomes effective.
(d) The default.ing par:ty shall be solely cesponsible to
the lessor for: any damages pur:suant to Ar:ticle XI of the Lease.
(e) A defaulting joint ventur:er: shall be given the benefit
of section 11.04 of the Lease.
l7. TERMINATION. Neit.her: pat:'ty shall have the right to
terminate t.his Joint Ventut:'e, or: this Joint Venture Asreement, except
as expcessly pr:ovidec for: in this Agr:eement.
18.- MAINTENANCE RESPONSIBILITIES. (a) Club Man~gement shall be
responsible for: the carr:ying out and cost of all maintenance and
r:epair: requir:ed to the inter:ior: of the eestaur:ant, including all
fixtur:es and per:sonal proper:ty t.her:ein, and any alter:ations,
additions or: changes made to the restaur:ant str:uctut:'e by B & B Joint
Vent.ure. Club Management shall also k.eep the ar:ea sut:'t:'ounding the
r:estaur:ant reasonably neat and clean. Beale Entet:'pdses shall be
cesponsible for all other: maintenance and r:epair:s, specifically
including all those r:equir:ed for: motel operations and pat:'king ar:eas.
(b) In the event. of damage or destruction to any portion
of the premises, the joint venturer r:esponsible for maintaining that
por:tion of the pr:emises shall be r:equir:ed to r:epait:' or: rebuild
\lithin a reasonable time.
19. ATTORNEY'S FEES. In the event of breach of this Agreement
by one party, the non-br:eaching par.ty shall be entitled to r:easonable
att.oeney's fees ~ctually incurred in enforcing its right.s her:eunder:.
20. NOTICES. All not.ices required to be sent under this
Agr:eement shall be sent by cer:tified United St.ates mail, return
receipt requested, ot:' by private mail providingfot:.asimilat:. return
r:eceipt, to the addt:'esses of the par:ties given in the pr:eamble to
this Ageeement., or: such othet:' addr:ess given by one pat:'ty to the other:
by notice confot:'ming to t.he r:equir:ements of this section.
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21. WITHDRAWAL OF CAPITAL. No joint vcnturec shall ~ithdca\l the
portion of the capital of the Joint Vcntur:e equal to its initial
contcibution of capital pr:ovided for: at section 4 of this Agreement
~ithout the expcess \lritten consent of the other: joint ventucec.
22. PROFITS Atm LOSSES. Any net pcofits or losses that may
accrue to the Joint Ventur:e" 'after payment of the lDanagement fees
pr:ovided for: in section 9 of this Agceement, and after payment by the
individual joint venturers to the Joint Ventur:e of any net losses
which ace the sole obligation of a joint ventur:er: as provided for: in
section 9 of this Ag::eement, shall be distr:ibuted to or bor:ne by the
joint ventur:er:s in equal pr:opoctions.
23. FISCAL YEAR. The fiscal yeac of the Joint Vent.ur:e shall end
on the last day of December: of each year.
24. TIME DEVOTED TO JOINT VENTURE. Each Par:tnet" shall devote
such time, attenticn, skills and ability in furtherance of t.he Joint
Ventur:e's bus iness as a::e reasonably necessary for the success of
said business.
25. POWER TO BIND JOINT VENTURE. Neit.her joint 'Jenturer shall
have authorit~ to binc the Joint: Ventur:e or: the othe:: joint ventur:er:
in making contr:acts and incur:r:ing obligat:ions in the Ilame and ,on the
cr:edit of the Joint Venture if' the value of t-he' contract or
obligation shall exceed $1,000.00, ...ithout the express \lr:itten
consent of both joint ventur:ees. A";\y obligation inclJrr:ed in
violation of this provision shall be cha::ged to and collected from
the individual joint ventur:er: incurr:ing the obligation,
26. DISSOLOTION. On dissol u t ion 0 f the Jo int Ventur:e othec t.han
as a result of a default by one of the parties, the affair:s of the
Joint Ventur:e shall be \lound up, the assets of the Joint Ventur:e
liquidated, the debts paid, and the sur:"lus distributed pursuant to
sections 9 and 22 of this Agr:~ement.
27. SOLE AGREEMENT. This instrument: contains the sole agr:eement
of the pacties relating to their Joint Ventur:e and cor:r:ectly sets
forth the rights, cuties, and obligations of each to t.he other: in
connec t ion ... i th it as of i t.s da te. Any pr: ior agreements, pr:omises,
negotiations, or' cepresentations not expressly set forth in th'is
Agr:eement ar:e of no force or effect.
28. REAL ESTATE TAXES. pur:suant to section 3.04 of the Lease
Agr:eement attached her:eto as Exhibit: "A", the pa::ties do not:
anticipate the payment of any real estate taxes by the Joint Ventur:e.
29.
att:ached
thereto
ARBITRATION. The provisions of Ar:ticle XIV of the Lease
her:eto as Exhibit "A" ar:e incorpor:ated herein by reference
as the arbitration pr:ovisions of this Joint Venture
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Agr:eement. This incorpocation by reference is made solely for: the
economy of not having to cepeat those provisions in this document.
Wherever the context so requires, the ref~rences to Lessoc and Lessee
in said Article XIV shall be interpr:eted to mean the par:ties to this
Agreement, and the r:eferences to the Lease shall be interpreted to
mean this Joint Venture Agr:ee~en~.
IN WITNESS WHEREOF, the parties set their hands and seals \lith
intent to be legally bound hereby, as of the day and dat.e ficst above
\lritten.
BEALE ENTERPRISES, INC.
Co-Venturer
ATTEST:
(
By: [}y!)~~
D. Paul Beale, p::esident
/
.,
CLUB'MANAGEMENT, INC.
Co-Venturer
"
ATTEST:
D~ (J-~ " ~~-
Secre~ar:y
By: C)~ ~/l,~ ~
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,
Market street, Camp Hill, Cumberland County, Pennsylvania known as
the "Hampden Inn".
Club Management has determined that it no
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longer wishes to be part of the Joint Venture and the Assignee is
willing to replace club Management as the joint venturer.
Accordingly, Club Management has agreed to assign all of its
interest in the Agreement to the Assignee.
This document is
intended to set 'forth the understanding of the parties hereto 'With
respect to such Assignment.
KNOW ALL MEN BY THESE PRESENTS that Club Management, as
Assignor, in consideration of the terms and conditions set forth
herein,
together with One Dollar
( $1 . 00) and other good
consideration, receipt and SUfficiency of which is acknowledged,
from Assignee, does hereby grant, bargain, 'Warrant, sell, transfer,
convey and assign unto Assignee all of its right, title and
interest as a joint venturer in and to that Joint Venture Agreement
dated July 22, 1991 referenced, !l-bove, together with any right to
utilize any trade names of the Joint Venture or the trade name
Kokomo's.
Further:
].. Club Management will indemnify, defend and hold harmless
I
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Assignee and its officers, directors, shareholders, employees,
attorneys and agents, 'and all of its and their respective heirs,
"
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legal representatives, successors and assigns from and against any
and all claims, demands, suits, actions, proceedings, damages,
.-
liabilities, penalties, costs, expenses and fees (including
reasonable attorneys I fees). arising from any failure of Club
Management to make any payments and to keep and perform all
agreements and obligations to be made, kept or performed on or
prior to' the date hereof by Club Management under the terms and
provisions of the Joint Venture Agreement hereinabove assigned.
Further, as part of this Assignment, Assignee agrees to perform all
of the obligations contained in the Joint Venture Agreement,
including all obligations referenced in a certain Lease Agreement
by and between D. Paul Beale and Mildred E. Beale, as lessor, and B
& H, as lessee, 'With respect to the premises located at 3721 Market
street,
Camp Hill, Cumberland County, Pennsylvania ("Lease
Agreement") from and after the date hereof and nothing contained
herein is intended to extend any terms and conditions of the Joint
Venture Agreement or of the Lease Agreement except as expressly set
"
forth herein.
2.
B & H is the o...ner of a Pennsylvania Liquor Control Board
~.
"
i I
, ,
( "PLCB" )
Hotel Liquor License #H4949.
This Assignment is
contingent upon the approval of the PLCB as to this Assignment, for
purposes of substitution of Assignee for Club Management under the
Joint Venture Agreement, and approval by the PLCB of the change of
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.,
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Management, Inc. of its rights and obligations under the Joint
Venture Agreement to Great Location, Inc., upon the teI'llls and
conditions set forth above ~n ~his Assignment by and between club
Management, Inc. and Great Location, Inc.
Beale Enterprises, Inc. agrees to Cooperate and take all steps
necessary with respect to the approval of the Pennsylvania Liquor
Control Board to the substitution of joint venturer and manager as
set forth above.
ATTEST:
BEALE ENTERPRISES, INC.
CO-Venturer
t::}}1;:tlb.(/;:: ,11:r-tL-
By:
[), {J ~YiedL_
)
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STOCK PURCHASE AND SALE AGREEHENT
~IS STOCK PURCHASE AGREEMENT (the "Agreement") made as of
J~ v(' ' , 199~between Donald L. Brown, Jr.
and T na Br wn, husband and wife, as tenants in the entireties
(collectiv ly the "Sellers"),
AND
Sean Barowski, an adult individual, of Dauphin County,
Pennsylvania (the "Buyer").
BACKGROUND
A. Sellers own 100 shares of the duly issued and
outstanding shares (the "Shares") of common stock (the "Common
Stock"), of Great Location, Inc. ("GL"), a Pennsylvania
corporation. Sellers own all of the outstanding Common Stock of
GL.
B. Sellers has agreed to sell the Shares to Buyer, and
Buyer has agreed to purchase the Shares from Sellers, for the
purchase price and on the terms and conditions stated herein.
A G R E E MEN T
NOW, THEREFORE, in consideration of the Background, herein
incorporated by reference, and the covenants hereinafter set
forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK:
GRANT OF SECURITY INTEREST.
Subject to the terms and conditions of this Agreement,
Buyer shall purchase, and Sellers shall sell, the Shares (which
Sellers warrants, constitute all of the duly issued and validly
outstanding common stock of GL) for a total Purchase Price of
Two Hundred Fifty Thousand Dollars ($250,000.00), payable as set
forth herein:
a. The sum of $100,000.00 shall be paid upon the
signing of this Agreement. Such sum shall be payable in cash,
certified check, cashiers check or wire transfer in lawful money
of the United States of America, and shall be held by Cunningham
& Chernicoff, P.C. (the "Escrow Agent"), in escrow for delivery
at Closing, or as otherwise provided herein. Sellers and Buyer
acknowledge that the Escrow Agent is acting as an escrow holder
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at said parties' mutual request and for their convenience, and
that the Escrow Agent shall not be liable to either of the
parties for any act or omission on its part unless taken or
suffered in willful disregard of this Agreement or involving its
negligence. In the event of any dispute or disagreement in
connection with the deposit, Escrow Agent shall not be required
to take any action but may await Closing of such dispute or
disagreement, or may file suit in interpleader with the proper
court for the purpose of having the rights of the parties
adjudicated and may deposit with the court the deposit.
b. The sum of $25,000.00 shall be paid by Buyer to
Sellers on or before January 10, 1998.
c. The balance of the Purchase Price of $125,000.00
shall be paid to Sellers with interest at the rate of eight
percent (8%) per annum on the outstanding principal balance, in
forty eight (48) equal consecutive monthly installments of Three
Thousand Fifty-One Dollars and 62/100 ($3,051.62) each,
commencing on the first day of the first calendar month following ,
the date of Closing (the "Initial Payment Date"),,(iihd contJ.nuiny vi/ICI,
on the same day of each calendar month thereafter, with the r7~' I
principal to be amortized over the forty eight (48) month term, 6' p
and with the final payment due and owing no later than the forty- , ~
seventh (47th) month anniversary of the Initial Payment Date. t-e6~~!
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All payments hereunder shall be made without set off, Iy (/
deduction, credit, recoupment or other reduction of any sort
whatsoever, except as provided herein, and shall be due and
payable in the then-current lawful tender of the United States of
America. Any installment that is not paid within fifteen (15)
days of the due date shall bear a late charge of five percent
(5%) of such installment. Nothing contained herein shall
prohibit prepayment, without penalty, of any or all of the
outstanding amounts.
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d. Notwithstanding the foregoing, and without waiving
or limiting any other remedies available hereunder or at law or
in equity, should there occur or be discovered a breach of
Sellers's covenants, representations or warranties herein, then
Buyer may set off against payments of the Purchase Price owed by
Buyer to Sellers the amount of damages sustained by Buyers.
Effective upon the Closing Date (hereinafter defined),
and as security for Buyer'S obligations hereunder, Buyer hereby
grants to Sellers a security interest in the Shares, and all
proceeds, cash dividends, stock dividends, replacements, prOfits,
substitutions and replacements thereof, thereunder and/or thereon
and all amounts accrued, earned or paid thereon. So long as any
amount is due and owing by Buyer to Sellers under this Agreement,
the Shares shall remain as collateral for any such amount owed,
provided, however, that Buyer shall have all rights to vote such
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stock, and all other incidents of such stock, including but not
limited to distributions.
In consideration of certain loans by Sellers to GL and
in consideration of non-payment of such funds owed by GL to the
Sellers, and as further security and collateral to the Sellers
for the payments and under the Note, the Buyer shall cause GL to
grant to Sellers a security interest and lien in and to and on
all furniture, equipment, trade name, receivables, accounts,
papers, and general intangibles of GL, now owned or hereinafter
acquired, and all products, substitutions and proceeds thereof.
If Buyers fail to make any payment of principal or
interest when due hereunder that remains uncured for a period of
fifteen (15) business days after written notice thereof by
Sellers, or any other Event of Default occurs under the Note
referenced in the following paragraph, or under a stock Pledge to
be entered into by Buyer, or under any Security Agreement or
other document entered into as part of the transaction set forth
in this Agreement, Sellers may enforce their rights against the
Shares as provided in this Agreement, the Stock Pledge or the
Note.
e. All the foregoing obligations shall be
memorialized in a Judgment Note ("Note") from Buyer to Sellers
and delivered at Closing.
f. The parties hereto agree to enter into a Stock
Pledge Agreement with respect to the Shares, contemporaneously
herewith, to be delivered by Buyer to Sellers at Closing and
whereby Buyer pledges the Shares as collateral as set forth
above.
g. The Buyer shall cause GL to execute such further
security agreements and financing statements at Closing as might
be necessary to perfect the security interest in the assets of GL
being granted herein.
h. Notwithstanding the sale of the Shares and
notwithstanding the fact that GL utilizes the name "Kokomos",
Sellers shall retain the right to utilize the name "Kokomos", or
its logo individually or in any other entity, provided,
nevertheless, that Sellers shall not utilize the name "Kokomos",
or its logo, in any area within ten (10) miles of the present
location of the GL business premises on the Carlisle Pike, Camp
Hill, Pennsylvania, provided further, however, that such ten (10)
mile radius shall end at the Susquehanna River. It is the
intention of the parties that notwithstanding the restrictions
set forth in this subparagraph that Sellers retain the right to
use "Kokomos", or its logo, on what is known as the East Shore of
the Harrisburg, Pennsylvania, area, including but not limited to
Dauphin County, Pennsylvania.
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2. CLOSING.
a. Closina Date. Closing of the transactions
contemplated by this Agreement ("Closing") shall occur at the
offices of Cunningham & Chernicoff, P.C., 2320 North Second
Street, Harrisburg, Pennsylvania 17110, during usual business
hours, before January 2, 1998, or at such earlier date as shall
be mutually agreed upon by the parties, or, if a later date is
necessary, within ten (10) days after the approval (if any) by
the Pennsylvania Liquor Control Board of the change of management
and/or ownership of GL as contemplated by this Agreement. It is
understood that if closing occurs before January 2, 1998, that
such closing shall be effective as of the beginning of business
on January 1, 1998. The time and date of such Closing is
referred to herein as the "Closing Date".
b. Documents to be Delivered to Buvers. On the Closing
Date, Sellers shall deliver to Buyers the following:
i. The certificates for the Shares of GL Common
Stock together with all required assignments and stock transfer
powers with appropriate signatures;
ii. The resignations, effective as of the Closing
Date, of all officers and directors of GL;
iii. A subsistence certificate as to GL issued on
or about the Closing Date by the Secretary of the Commonwealth of
Pennsylvania;
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iv. A corporate tax lien certificate as to GL
issued by the Pennsylvania Department of Revenue within 30 days
prior to the Closing Date, and in substance acceptable to Buyer;
v. The corporate minute book, to the extent such
exists, of GL which shall include all annual, special and other
meetings (or written consents in lieu thereof) of the directors
and shareholders, respectively, of GL;
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vi. Such other docUlllents or instrUlllents as may be
necessary to carry out and effectuate the terms of this
Agreement; and
c. Documents to be Delivered to Sellers. On the
Closing Date, Buyer shall deliver to Sellers the following:
i. The duly executed Note;
ii. A duly executed Stock Pledge Agreement,
together with such stock certificates and proxies as necessary
for the Shares, which shall be in form and substance satisfactory
to Sellers' counsel.
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iii. The security Agreement and such UCC-1
Financing statements of GL setting forth the security interest
granted in paragraph 1 above as to the assets of GL.
iv.
necessary to carry
Agreement.
3. SELLERS' REPRESENTATIONS AND WARRANTIES:
BUYER ACKNOWLEDGMENTS.
Such other documents or instruments as may be
out and effectuate the terms of this
In order to induce Buyer to enter into this Agreement,
Sellers hereby represent and warrant to Buyer as follows:
a. CaDacitv. Sellers are persons ~ aeneris and
have the full power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated hereby.
Sellers are the sole owner of and have the right to sell, the
Shares and that such Shares are free and clear of any liens or
encumbrances.
b. oraanization. GL is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. GL has all requisite corporate
power and authority to 0'.1'0 and lease its property and to carry
out its business as presently conducted. GL is qualified or
authorized as a foreign corporation in all such other
jurisdictions, if any, in which the conduct of its business or
its ownership or leasing of property requires such qualification
or authorization, except where the failure to qualify would not
have a material adverse effect on its business, property or
condition (financial or otherwise). Sellers have provided to
Buyer true and correct copies of the GL Articles of Incorporation
and By-laws, in each case as amended to date, and of all minutes
of the proceedings of the GL shareholder(s) and Board of
Directors, respectively. '
c. Liauor License. GL is a joint venturer in B&H
Joint Venture (ltB&H") under an agreement hereinafter known as the
Joint Venture Agreement. The Joint Venture Agreement continues
through July 31, 2011. B&H validly owns and holds all rights in
Pennsylvania Liquor Control Board (ltPLCBIt) Liquor License No. H-
4949 and related permits (collectively the "Liquor License"). As
of the Closing Date, there shall be no lien, encumbrance, pledge
or other claim against the Liquor License or any substitution,
replacement or proceeds thereof. There is not now pending, or to
the knowledge of Sellers, threatened, any action by the
Pennsylvania Liquor Control Board to revoke, cancel, suspend,
modify or refuse to renew the Liquor License and B&H is in full
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compliance with its licenses. There is not now issued or
outstanding, or to the knowledge of Sellers, threatened, any
notice or violation to a Complaint or citation against GL with
respect to such License.
d. Restaurant Lease. B&H is the Lessee under that
certain Lease Agreement dated September 5, 1991 with a Lease Term
beginning August 1, 1991 and terminating July 31, 2011 (the
"Lease"), for the premises located at 3721 Market Street (the
"Restaurant"). Under the Lease, and under the Joint Venture
Agreement between GL and Beale Enterprises, Inc., GL is
responsible for the operations of the restaurant premises wherein
the business of GL is located. The Lease and the Joint Venture
Agreement are in good standing and in full force and effect; all
duties and obligations thereunder have been performed in full in
a timely manner; there are no, and as of the closing Date, there
shall not be any, claims, defenses, set offs, defaults, or events
or non-events that may constitute a default thereunder, but for
the passage of time; and to the best of the knowledge of GL, all
rent are and has been paid in full.
e. caoitalization. The authorized capital stock of
GL consists of 10,000 shares of Common Stock, of which 100 shares
have been validly issued and are outstanding, fully paid and non-
assessable. There are no outstanding warrants, options,
agreements, convertible securities or other commitments pursuant
to which GL is or may become obligated to issue any shares of its
capital stock or other securities. There is no agreement or
restriction with respect to the sale or voting of any shares of
GL's capital stock. Sellers has not pledged, granted a security
interest in or lien against, contracted to sell, or given any
other interest or right in or to the Shares, except as provided
hereunder and in favor of Buyers. The Shares have been duly
issued and are o'.l'Oed as are described in Paragraph A of the
Background.
f. Eauitv Investments. As of the date of this
Agreement, GL does not have, and as of the closing Date GL will
not have, any subsidiaries or 0'.1'0 any capital stock or other
proprietary interest, directly or indirectly, in any corporation,
association, trust, partnership, joint venture or other entity.
g. Bindina Effect. This Agreement and each
instrument executed and to be executed by Sellers in connection
herewith are and will be the legal, valid and binding obligations
of Sellers, enforceable against them in accordance with their
respective terms.
h. Authorization. Seller's execution, delivery and
performance of this Agreement and each instrument executed and to
be executed by Sellers in connection herewith, and consummation
of the transactions herein contemplated, do not and will not
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~ontravene any law, regulation, judgment, decree, order or award
binding upon or applicable to Sellers. Furthermore, the same
shall not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default
under, GL's Articles of Incorporation or By-Laws or any
indenture, mortgage, lease or other agreement to which GL or the
Sellers is a party or by which GL or the Sellers is bound.
i. Financial Information: Absence of Undisclosed
Liabilities. GL has maintained its books and records in the
usual, regular and ordinary manner in accordance with accounting
principals applied on a consistent basis. Sellers further
represent and warrant that they have delivered or caused to be
delivered to Buyer financial information relating to GL as
requested by Buyer. Any financial information delivered by
Sellers to Buyer as to GL is true and correct and fairly
represents the results of operations of GL for the period or
periods indicated. To the best of Sellers' knowledge, since the
date of the last tax return of GL, there has been no material
adverse change in the assets or liabilities or in the business or
conditions, financial or other'Wise, of GL, whether it is the
result of any known legislative regulatory change, revocation of
any license, or right to do business, fire, explosion, accident,
casualty, labor trouble, flood, drought, riot, storm,
condemnation, or act of God or other public force or other'Wise.
Further, since such date, there has been no change that would
materially or adversely affect the ability of GL to carry on its
business as now being conducted. To the knowledge of Sellers, no
fact or condition exists, or is contemplated or threatened that
might cause a material or adverse change in the business of GL
after the Closing Date hereunder. The only changes which have
occurred have occurred in the ordinary course of business and the
only assets which have changed is with respect to consumerable or
perishable assets, in the ordinary course of business.
GL has no liabilities or obligations, absolute or
contingent, except as incurred in the ordinary course of
business, or as set forth on the balance sheet contained in the
tax return of GL dated as of December 31, 1996, or as set forth
in Exhibit 3(i) hereto. Exhibit 3(i) sets forth payables of GL
believed to be accurate as of the date of this Agreement. It is
understood and agreed that unless other'Wise set forth on Exhibit
3(i), that GL shall pay the payables listed on Exhibit 3(i) in
the ordinary course and Sellers shall not be responsible for such
payables nor shall Buyer have any right to set off the amount of
any such payables against any sums owed to Sellers hereunder.
j. Encumbrances. Except as set forth in Exhibit
3(j), the Lease or the Joint Venture Agreement hereto, GL owns
outright or has a valid leasehold interest in or all of the
property and equipment reflected in the said balance sheet as of
December 31, 1996, or acquired by GL since then, and utilized in
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the Business (other than assets disposed of in the ordinary
course of business since December 31, 1996), all of which are not
subject to any mortgages, liens, security interest, pledges,
charges or other encumbrances of any kind. Except as set forth
in the "Leases", the Joint Venture Agreement, or in Exhibit 3(j)
hereto, none of the properties and assets reflected in said
balance sheet are held by GL as lessee under any lease or as a
vendee under a conditional sales agreement. Exhibit 3(j) hereto
contains a description of each lease to which GL is a party.
k. Patents. Trademarks. Licenses. Etc.
i.
persons by reason
trademarks, trade
licenses.
No royalties are payable by GL to other
of the ownership or use of any copyrights,
names, franchises, patents, patent rights or
ii. GL has received no notice that any
copyrights, trademarks, trade names, franchises, patents or
licenses or the operation of GL's Business conflicts, or will
conflict, with the asserted rights of others.
1. Litiqation. There is no action, suit, customer
claim or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending, or to
the best of Sellers's knowledge threatened, against or affecting
GL, which if adversely determined, individually or in the
aggregate, would impair the right of GL to carry on its business
as presently conducted, or would adversely affect the business,
properties, assets, prospects or condition (financial or
otherwise) of GL nor, to the best of the knowledge of Sellers,
does there exist any basis therefor.
m. Asset Representations. The accounts and notes
receivable, claims and causes of action of GL, as the same are
reflected in the financial statements referred to in Section 3(i)
of this Agreement, represent bona fide indebtedness incurred by
account debtors and third parties and arose in the ordinary
course of business of GL.
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n. No Defaults. GL is not in default or in violation
of (1) its Articles of Incorporation or its By-Laws, or any
indenture, mortgage, lease, agreement, contract, or other legally
binding instrument to which GL is a party or by which it or any
of its property is bound or affected; or (2) any order, writ,
injunction or decree of any court of any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, to which
GL is a party. To the best of Sellers' knowledge, there exists
no condition, event or act that constitutes, or that after
notice, lapse of time or both, could constitute, a default under
any of the foregoing.
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o. Taxes. GL has filed all federal, state, and local
tax returns that are required to be filed by it, and all such
returns are true and correct; and GL has paid all taxes pursuant
to such returns or pursuant to any assessments received by it or
that it is obligated to withhold from amounts owing to any
employee, creditor or third party. To the best of Sellers's
knowledge, the reserve for taxes on the said balance sheet of GL
as of December 31, 1996 (if required) is sufficient for the
payment of all accrued and unpaid federal, state and local taxes
and trust funds.
p. Officers and Directors. Bank Accounts. Etc.
Exhibit 3(p) hereto contains true, correct and complete lists of
(1) the names and addresses of all of GL's officers and
directors, and (2) the name of each bank in which GL has an
account or safety deposit box and the names of all persons
authorized to draw checks thereon or have access thereto.
q. Emplovee Benefit Plans. Exhibit 3(q) hereto
identifies all pension, retirement, stock purchase, savings,
profit-sharing, deferred compensation and collective bargaining
agreements, group insurance contracts and any other incentive,
welfare or employee benefit plans or vacation policies or other
fringe benefits (collectively the "Employee Benefit Plans") under
which employees of GL participate or had or have the right to
receive benefits. All contributions have been made, and reserves
adequate for the purposes of providing the benefits required by
the Employee Benefit Plans through November 30, 1997, have been
set aside therefor. GL does not have any liabilities with
respect to the Employee Benefit Plans that are not fully provided
for in the aforesaid balance sheet of GL.
r. Disclosure. Neither this Agreement nor any other
document, financial statement, certificate, schedule or written
statement furnished to Buyer by or on behalf of Sellers in
connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein
or therein not misleading.
4. BUYER REPRESENTATIONS AND WARRANTIES.
In order to induce Sellers to enter into this
Agreement, Buyer represent, warrant and covenant as follows:
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a. Capacitv. The Buyer is a person 2Yi aeneris and
has the full power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated hereby.
Buyer is a citizen of the United States, and has not been
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arrested, indicted or convicted of any crime or accused of
violating any law which would disqualify Buyer as a shareholder
or manager of a licensee for beer, wine and liquor sales for on
premises consumption, or for any other license with respect to
the operation of GL's business.
b. Bindina Effect. This Agreement and each
instrument executed and to be executed by Buyer in connection
herewith are and will be the legal, valid and binding obligations
of Buyer, enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or other laws
affecting generally the enforcement of creditors' rights and
doctrines of equity relating to the availability of specific
performance as a remedy.
c. Authorization. Buyer's execution, delivery and
performance of this Agreement and each instrument executed and to
be executed by Buyer in connection herewith, and consummation of
the transactions herein contemplated, are and will be within the
power of Buyer; require no governmental approval; and do not and
will not contravene any law, regulation, judgment, decree, order
or award relating to Buyer, or conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, lease, security agreement
or other agreement to which Buyer, or either of them, is a party
or by which Buyer, or either of them, is bound.
d. continued Business. For so long as Buyer and/or
GL owe any money to Sellers under this Agreement, Buyer (i) shall
use their best efforts to cause GL, its successors and assigns,
to continue to operate GL's Business in the ordinary course of
business; and (ii) Buyer shall not cause a sale or transfer of
more than 51% of the Shares, nor allow or suffer GL to issue any
additional stock, nor allow GL to issue stock to, or merge with,
or transfer 51% or more of its assets to, any other person or
entity, or to dissolve or declare bankruptcy.
e. continued Insurance Policies. For so long as
Buyer owes any money to Sellers under this Agreement, Buyer shall
cause GL, its successors and assigns, to continue in full force
and effect all insurance pOlicies necessary or appropriate to
insure, protect and maintain GL's tangible property and business
operations.
f. Disclosur~. Buyer has reviewed such books and
records of GL as it desires and is not relying upon any
representation of the Sellers, except for such representations as
may be set forth in Paragraph J above.
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g. Dividends. For so long as Buyer owes any money to
Sellers under this Agreement, Buyer shall not permit GL, its
successors and assigns, to issue any dividends to Buyer or to any
other holder of stock in Buyer.
5. CONDUCT OF GL'S BUSINESS PENDING THE CLOSING.
Sellers covenant that from the date hereof until the
Closing Date or until this Agreement is terminated in accordance
with its terms:
a. Conduct Business in ordinarv Course. The business
of GL will be conducted only in the ordinary course with no
unusual or novel changes; and none of the GL properties or assets
will be sold or otherwise disposed of, mortgaged, pledged, or
otherwise hypothecated except in the ordinary course of business
or as otherwise contemplated by this Agreement.
b. No Chanae in Charter of Bv-Laws. No change will
be made in the Articles of Incorporation or By-Laws of GL.
c. ~Chanae in CaDitalization. No change will be
made by reclassification, subdivision, reorganization or
otherwise in the authorized or issued capitalization of GL; and
no options, warrants or rights to acquire or securities
convertible into any shares of capital stock of GL will be issued
or granted.
d. No Dividends or Other PaYments. No dividend or
other distribution or payment will be declared or made in respect
of GL's outstanding shares of capital stock. GL will not
purchase or redeem or otherwise acquire any of its stock in
exchange for cash or other property, nor prepay any notes or
other debt, except as contemplated by this Agreement. No
management or other fees or charges shall be imposed upon GL by
Sellers or any affiliate thereof.
e. Maintenance of Prooertv. GL will maintain its
properties in good operating condition and repair, as exists as
of the date of this Agreement, reasonable wear and tear excepted.
f. Insurance. GL shall continue in full force and
effect at its expense all present policies of insurance.
g. Business Intact. GL will use its best efforts to
preserve its business organization intact; to retain the services
of its key Officers, employees, agents and consultants; and to
preserve for Buyer the good will of its employees, customers and
others having business relations with it.
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6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
Buyor's obligation to proceed with the transactions
contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Buyer:
a. ComDliance and ReDresentations Correct. All of
the terms and conditions contained in this Agreement and to be
complied with and performed by GL and Sellers on or before the
Closing Date shall be complied with and performed in a timely
manner and in all material respects; and the representations and
warranties made by GL and Sellers in this Agreement shall be
correct in all material respects at and as of the Closing Date
with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except
for changes contemplated by this Agreement.
b. Litiqation. There shall not have been instituted
any action or proceeding before any court, governmental agency or
commission by any governmental or private person challenging any
of the transactions herein contemplated; provided that, in the
case of an action or proceeding by a private person, counsel to
Buyer shall have opined in writing to Buyer that such action or
proceeding raises serious substantive issues of law and/or fact,
the determination of which may result in a judgment in favor of
such private person.
c. Governmental Action. There shall not have been
any action taken by any court, government or governmental agency,
rendering any party to this Agreement unable to consummate the
transactions contemplated hereby, other'Wise making such
transactions illegal or limiting in any material manner the right
of Buyer to exercise, directly or indirectly, control over any
aspect of the business of GL.
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d. PLCB ADDrovals. The LCB shall have issued any and
all consents, permits or other approvals as may be necessary for
the change in management of GL and the change of ownership of GL
contemplated by this Agreement. It is not contemplated that such
approvals are necessary prior to closing.
7. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
Sellers' obligations to proceed with the transactions
contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Sellers:
a. ComDliance and ReDresentations Correct. All of
the terms and conditions contained in this Agreement and to be
complied with and performed by Buyer on or before the Closing
Date shall be complied with and performed in a timely manner and
in all material respects; and the representations and warranties
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made by Buyer in this Agreement shall be correct in all material
respects at and as of the closing Date with the same force and
effect as though such representations and warranties had been
made on and as of the closing Date, except for changes
contemplated by this Agreement.
b. Litiaation. There shall not have been instituted
any action or proceeding before any court, governmental agency or
commission by any governmental or private person challenging any
of the transactions herein contemplated; provided that, in the
case of an action or proceeding by a private person, counsel to
Sellers shall have opined in writing to Sellers that such action
or proceeding raises serious substantive issues of law and/or
fact, the determination of which may result in a judgment in
favor of such private person.
c. Governmental Action. There shall not have been
any action taken by any court, government or governmental agency,
rendering any party to this Agreement unable to consummate the
transactions contemplated hereby or otherwise making such
transactions illegal.
8. ACCESS TO INFORMATION.
Prior to the Closing Date or until the termination of
this Agreement, GL and Sellers will give Buyer' representatives
full access (during normal business hours and upon reasonable
notice and at GL's principal place of business) to all of GL's
books, records, agreements and commitments, and will furnish
Buyer' representatives during such period with all such
information concerning GL's affairs as Buyer may reasonably
request (except for such information as GL or Sellers are
prohibited by law from furnishing); provided, however, that Buyer
will hold in strict confidence all documents and information
concerning GL so furnished (except that such documents and
information may be disclosed to Buyer's independent accountants
and counsel), and, if the transactions contemplated by this
Agreement shall not be consummated, such confidence shall be
maintained (except to the extent that such information can be
shown to be previously known to Buyer or any of their affiliates,
in the public domain or later acquired by Buyer or any of their
affiliates from other legitimate sources); and upon written
request from GL or Sellers to Buyer, all such documents shall
immediately thereafter be returned to the party that furnished
the particular document to Buyer.
9. SURVIVAL OF REPRESENTATIONS. WARRANTIES AND COVENANTS.
Notwithstanding any investigation at any time conducted
by either of the parties hereto, each of the parties hereto shall
be entitled to rely on the representations and warranties of the
other party set forth herein, or in any Exhibit attached hereto
13
,
,
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and in any certificate or any instrument delivered by the parties
pursuant to this Agreement, in connection with the transactions
contemplated by this Agreement, or any other document delivered
pursuant hereto. The representations, warranties and covenants
set forth in this Agreement shall survive closing under this
Agreement for a minimum of a period of five (5) years.
10. INDEMNIFICATION BY SELLERS.
a. Riaht to Indemnification. Sellers agree to and
shall indemnify Buyer, his heirs, successors and assigns, and
hold them harmless in respect of:
i. All liabilities of, or claims against GL,
which arise out of the conduct of GL and its business, or are
incurred by GL, prior to Closing. Notwithstanding the foregoing,
as set forth in Paragraph 3(i), all payables of GL set forth on
Exhibit 3(i) are to be paid by GL. Buyer assumes the
responsibility to ensure that GL will pay such payables, and
Sellers have no responsibility for such payables. Further, Buyer
shall have no right to be indemnified by Sellers for any payables
or liabilities set forth on Exhibit 3(i).
ii. Any damage or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any
agreement on the part of Sellers under this transaction, or from
any misrepresentation in, or omissions from, any certificate or
any instrument furnished or to be furnished to Buyer hereunder.
Buyer shall use reasonable efforts to assert each claim for
indemnification hereunder with written notice to Sellers within a
reasonable time after Buyer shall know of the facts with respect
thereto.
iii. All actions, suits, proceedings, demands,
assessments, judgments, costs and expenses (including reasonable
legal expenses and costs, original and appellate) incident to any
of the foregoing.
b. Notice of Claims. In the event that Buyer shall
have any claim against Sellers hereunder and that does not
involve an assertion against Buyer by a third party, Buyer shall
notify Sellers of such claim within sixty (60) days after Buyer
have knowledge of the facts giving rise to such claim. In the
event that Buyer shall have any claim against Sellers hereunder
that involves an assertion against Buyer by a third party, Buyer
shall notify Sellers in writing within fourteen (14) days after
receipt of the written assertion against Buyer by such third
party. In either case, the notice of claim given by Buyer to
Sellers shall state the nature of the event, claim, demand, loss,
liability, damage or deficiency giving rise to the notice, the
amount or estimated amount thereof (if known or feasible), and a
particularized description or documentation of the facts that
14
.~
Buyer believe to support or establish such claim. Buyer shall
provide Sellers with reasonable access to and the right to
inspect, validate and photocopy (where applicable) all books,
records, testing reports, inspection reports, papers, documents,
insurance policies and other physical evidence as Sellers may
require to determine the validity and extent of any claim for
indemnity hereunder.
c. Defense of Claims. In the event that any legal
proceedings shall be instituted or that any claim or demand shall
be asserted by Buyer in respect to which indemnification may be
claimed from Sellers under the provisions of this Section 10,
Buyer shall cause prompt written notice thereof to be given to
Sellers. Except as set forth below, the defense of any such
claim or claims shall be undertaken by Buyer; provided, however,
that Sellers shall have the right, at his option, (1) jointly to
control the defense of any such claim at Sellers's own expense if
Buyer determine to defend the same; or (2) solely to control the
defense of any such claim, at Sellers's expense, if Buyer
determine not to defend the same. Buyer shall not settle or
compromise such action without the Sellers's prior written
consent. Participation in the defense of any claim by Sellers in
any action or proceeding in which Sellers shall not have been
joined by the claimant as a party to such action or proceeding
shall not be deemed an admission on the part of Sellers of an
obligation for indemnification in connection with such claim as
provided in this Agreement. The defense of any claim or claims
relating to or arising out of any federal, state, local or
foreign tax returns for GL prepared, or filed, or to have been
filed on behalf of GL for any period before the Closing Date
(including any audit or audits with respect to any such returns)
shall be undertaken by Sellers at his own expense.
d. Time Limit. Notwithstanding anything expressed in
this Section 10 to the contrary, any right of indemnification
asserted or sought by Buyer under this Section 10 must be
exercised by written notice to Sellers no later than four (4)
years after the Closing Date.
11. INDEMNIFICATION BY BUYER.
(a) Riaht to Indemnification. Buyer agrees to and
shall indemnify Sellers, their heirs, successors and assigns, and
hold them harmless in respect of:
i. All liabilities of, or claims against GL,
which arise out of the conduct of GL and its business, or are
incurred by GL, subsequent to the date of Closing.
ii. All liabilities or claims against Sellers
under and pursuant to the Note or the Security Agreement.
15
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iii. Any damage or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any
agreement on the part of Buyer under this transaction.
iv. Any actions, suits, proceedings, demands,
assessments, judgments, costs and expenses (including reasonable
legal expenses, original and appellate) incident to any of the
foregoing.
b. Notice of Claims. In the event that Sellers shall
have any claim against Buyer hereunder and that does not involve
an assertion against Sellers by a third party, Sellers shall
notify Buyer of such claim within sixty (60) days after Sellers
has knowledge of the facts giving rise to such claim. In the
event that Sellers shall have any claim against Buyer hereunder
th~t involves an assertion against Sellers by a third party,
Sellers shall notify Buyer in writing within fourteen (14) days
after receipt of the written assertion against Sellers by such
third party. In either case, the notice of claim given by
Sellers to Buyer shall state the nature of the event, claim,
demand, loss, liability, damage or deficiency giving rise to the
notice, the amount or estimated amount thereof (if known or
feasible), and a particularized description or documentation of
the facts that Sellers believes support or establish such claim.
Sellers shall provide Buyer with reasonable access to and the
right to inspect, validate and photocopy (where applicable) all
books, records, testing reports, inspection reports, papers,
documents, insurance policies and other physical evidence as
Buyer may require to determine the validity and extent of any
claim for indemnity hereunder.
c. Defense of Claims. In the event that any legal
proceedings shall be instituted or that any claim or demand shall
be asserted by Sellers in respect to which indemnification may be
claimed from Buyer under the provisions of this Section 11,
Sellers shall cause prompt written notice thereof to be given to
Buyer. Except as set forth below, the defense of any such claim
or claims shall be undertaken by Sellers; provided, however, that
Buyer shall have the right, at their option, (1) jointly to
control the defense of any such claim at Buyer' own expense if
Sellers determines to defend the same; or (2) solely to control
the defense of any such claim, at Buyer' expense, if Sellers
determines not to defend the same. Sellers shall not settle or
compromise such action without the Buyer' prior written consent.
Participation in the defense of any claim by Buyer in any action
or proceeding in which Buyer shall not have been joined by the
claimant as a party to such action or proceeding shall not be
deemed an admission on the part of Buyer of an obligation for
indemnification in connection with such claim as provided in this
Agreement. The defense of any claim or claims relating to or
arising out of any federal, state, local or foreign tax returns
for GL prepared, or filed, or to have been filed on behalf of GL
16
for any period after the Closing Date (including any audit or
audits with respect to any such returns) shall be undertaken by
Buyer at their own expense.
d. Time Limit: Limited Recourse. Notwithstanding
anything expressed in this Section 11 to the contrary, any right
of indemnification asserted or sought by Sellers under this
Paragraph 11 must be exercised by written notice to Buyer no
later than four (4) years after the Closing Date.
12. TERMINATION.
a.
be terminated
time prior to
Termination bv Mutual Consent. This Agreement may
by the mutual consent of Sellers and Buyer at any
Closing Date (as may be extended).
b. Termination bv Buver. This Agreement may be
terminated at any time prior to the Closing Date if the
conditions set forth in Sections 5 and 6 hereof shall not have
been complied with or performed in any material respect and such
non-compliance or non-performance shall not have been cured by
Sellers or eliminated upon ten (10) days prior written notice
thereof (or by its nature cannot be cured or eliminated) or
waived by Buyer.
c. Termination bv Sellers. This Agreement may be
terminated by Sellers at any time prior to the Closing Date if
the conditions set forth in Section 7 hereof shall not have been
complied with or performed in any material respect and such non-
compliance or non-performance shall not have been cured by Buyer
or eliminated upon ten (10) days prior written notice thereof (or
by its nature cannot be cured or eliminated) or waived by
Sellers.
d. Effect of Proper Termination. The obligations of
the parties hereto (other than the terms respecting confidential
treatment of information set forth in Section 8 hereof, which
expressly survive) shall terminate if, at any time prior to the
Closing Date, this Agreement shall be terminated in accordance
with its terms.
13. NOTICES.
All notices, requests, demands and other communications
that are required or that may be given under the provisions of
this Agreement shall be in writing and shall be deemed given at
the time of delivery or mailing if mailed by hand or mailed by
registered or certified mail, return receipt requested, postage
prepaid as follows:
17
with a copy to:
If to Sellers: Donald L. Brown, Jr.
and Tina Brown
5234 Meadowbrook Drive
Mechanicsburg, PA 17055
Cunningham & Chernicoff, P.C.
2320 North Second Street
Harrisburg, PA 17110
Attn: Robert E. Chernicoff, Esq.
If to Buyer:
Sean Barowski
2300 Scarborough Road
Harrisburg, PA 17112
14. BROKER'S FEE.
Sellers represent that they will be responsible for the
payment of any commission, broker's fee or other finder's fee, or
similar charge in connection with the transaction provided for in
this Agreement as is being charged by Eugene Costello. Except as
disclosed herein, Sellers and Buyer represent that, to the best
of their knowledge, there is no obligation to pay any other
commission, broker's fee or other finder's fee, or similar charge
in connection with the transaction provided for in this
Agreement.
15. PARTIES IN INTEREST.
This Agreement shall inure solely to the benefit of,
and shall be binding upon, the parties' and their respective
heirs, successors and proper assigns.
16. COMPLETE AGREEMENT.
This Agreement sets forth the entire agreement and
understanding between the parties and shall supersede all prior
agreements, documents or other instruments with respect to the
matters covered hereby. This Agreement may not be orally
changed, altered, modified or amended in any respect; to effect
any change, modification, alteration or amendment, the same must
be in a writing signed by all parties hereto.
17. COUNTERPARTS.
This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
18. OTHER DOCUMENTS.
The parties hereto shall execute and deliver all such
other and further documents as may be reasonably required or
~
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18
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requested in order to perfect the transaction contemplated
herein. Sellers agree to cooperate with Buyer and to execute and
complete such documents as are necessary to cause Buyer to be
approved by the PLCB as a shareholder and officer.
19. NON-ASSIGNABILITY.
Buyer shall not assign his rights, nor delegate his
responsibilities hereunder without the express written consent of
Sellers.
20. WAIVER.
The failure of any party to insist, in anyone or more
instances, on performance of any of the terms and conditions of
this Agreement, shall not be construed as a waiver or
relinquishment of any rights granted hereunder or of the future
performance of any such term, covenant or condition, but the
obligation of the parties with respect thereto shall continue in
full force and effect.
21. CONSTRUCTION.
This Agreement has been executed in the Commonwealth of
Pennsylvania and shall be construed in accordance with the laws
of the Commonwealth of Pennsylvania. The headings contained in
this Agreement have heen inserted for the convenience of
reference only and shall in no way restrict or modify any of the
terms or provisions hereof. The masculine shall include the
feminine and the singular shall include the plural herein, where
applicable.
22. MERGER.
This Agreement, and all other documents
contemporaneously executed in connection herewith, constitutes
the entire Agreement between the parties with respect to the
subject matter hereof and supersedes all negotiations,
representations, warranties, commitments, offers, contracts and
writings prior to the date hereof.
23. AMENDMENT.
Neither this Agreement nor any term or provision
hereof, including this Paragraph 23, may be changed, waived,
discharged or terminated orally, or in any manner, other than by
an instrument in writing signed by the party against which the
enforcement of the change, waiver, discharge or termination is
sought.
19
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LIST OP EXHIBITS
3(i) Payables of Great Location, Inc.
3(j) Leases and Encumbrances
3(p) Officers; Directors; Bank Accounts
3(q) Employee Benefit Plans
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GREAT LOCATION. INC.
Kokomos
Pavables
Amount Owed
Bell Atlantic Ad
Bell Atlantic
USA Waste
WNCE - Radio
Patriot
Daniel Krieg - Line Painting
ASCAP
UGI
PP&L
Penn American - Water
NTN
Acri
Kint corp.
BMI
Assoc. Products
Tri County Bev
Suburban Cable
Dept of Labor - Back Wages
Harrisburg Senators
Direct TV
Phillips
Hershey Wildcats
Commonwealth 'Telephone
Harrisburg Dairy
Shenk Athletic
Payroll - Current
AFCO Insurance (last payment)
Hampden Township - Sewer
Hampden Township -
Permits (disputed)
$ 401.51
2,137.53
884.42
3,715.00
1,100.00
365.00
637.22
1,851.21
3,181.65
1,116.66
1,747.10
111.02
71.55
436.00
522.00
125.00
240.71
1,333.90
2,050.00
29.58
1,200.00
900.00
1,455.10
320.82
2,500.00
8,000.00
2,418.00
3,200.00
11.900.00
TOTAL
$53,930.98
Hamilton & Musser _
Year End Accounting
Unknown
Accrued and Current Sales Tax
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BXBIBIT 3 (j) .
Leases and Encumbrances
Lease of Cash Register system
with Phillips Office Products
$468.00/month
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~~~ F. cOYNE
ji(i;; ;iARIE cOYNE
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Allomcys at Law
3901 Market Street
Camp Hill, PA 17011.4227
(717) 737.0464
January 28, 1998
(Via Certified Mail No, P843 068 787 & First Class Mail)
Great Location, Inc.
ATTN: Mr. Donald L. Brown
3721 Market Street
Camp Hill, PA 17011
{Via Certified Mail No. P843 068 786 & First Class Mail}
Great Location, Inc.
ATTN: Mr. Donald L. Brown
5234 Meadowbrook Drive
Mechanicsburg, PA 17055
Re:
B & H Joil/t Vell/ure, a/k/a Kokomo 's
Restaural/t, 3721 Market Street, Camp
Hill, PA
Dear Mr. Brown:
I submit this memo to you as a stockholder, officer and director of Great Location, Inc.
in accordance with Article XVI, paragraph 16.17 of Leasement Agreement, dated September 5,
1991; between D. Paul Beale and Mildred E. Beale, his wife, Lessors, and B & H Joint Venture,
Lessee.
I also submit this memo to you as a siockholder, officer and director of Great Location,
Inc. in accordance with paragraph 20 of Joint Venture Agreement, dated July 22, 1991, between
Beale Enterprises, Inc., a joint venturer, and Club Management, Inc., a joint venturer. The said
Joint Venture was the subject of an Assignment Of Joint Venture Interest from Club
Management, Inc. to Great Location, Inc. and the said Assignment is dated October 10, 1993.
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This memo supplements the memo, dated January 23, 1998, which I forward to you. A
copy of said memo is enclosed.
Based upon information received from my client, Great Location, Inc. are in \;olation of
the following provisions of said Agreement of Lease:
nXHIBIT
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Great Location, Inc.
January 28, 1998
Page 2
1. Article ill: Rents. Taxes and Utilities: Specifically in accordance with
paragraph 3.03 you are obligated to pay clients Six Thousand Dollars
(56,000.00) per month commencing January 1997. You are in arrears for
payment of Six Thousand Dollars (56,000.00) for the month of January 1998
which is an event of default as noted in Article XI: Default and Remedies of said
Agreement of Lease.
2. You did not provide \'-Titten data, regarding gross sales, to my clients for the
percentage of rent. The period of non-compliance is July I, 1996 to June 30,
1997 and such non-performance is an event of Default under said Article XI of
the Lease Agreement. Further such non-compliance is a breach of the
Agreement of Lease and is an event of said default as per Article Ill, paragraph
3.03(1)(2)(e).
3. You did not pay to Hampden Township the Sewer Rental for the months of
October, November and December, 1997. The sum of One Thousand Seven
Hundred Eighty-six and 25/100 Dollars (51,786.25) plus penalty is due
Hampden TO\\l1ship which is in violation of Article ill, paragraph 3.08 of said
Agreement of Lease and is an event of default.
4. You did not pay to Hampden Township the additional Equivalent Dwelling
Units (E.D.U.'s) as the result of increased water consumption. The principal
sum of Eleven Thousand Nine Hundred Dollars (511,900.00) is due Hampden
Township and remains unpaid which is in violation of Article Ill, paragraph 3.08
of said Agreement of Lease and is an event of default.
5. As noted in a Public Notice, which is required to be posted on premises by
PLeB, bearing the date of January 7, 1998, Great Location, Inc. stated its
interest in B & H Joint Venture is proposed to be transferred to Mr. Sean
Barowski. You did not obtain the written consent of the Lessor, who is Mr. and
Mrs. Beale, as required in Article X, paragraph 10.Q1 of said Agreement of
Lease and is an event of default.
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Great Location, Inc,
January 28, 1998
Page 6
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My clients demand Great Location, Inc. and B & H Joint Venture vacate the premises.
My clients formally advise you as stockholder, director and officer of Great Location, Inc. they
tennmate the involvement of Gr:at Location, Inc. in the B & H Joint Venture; they suggest
appropriate documentation be executed to memorialize the termination; and confmn transfer of
all Great Location,lnc. interest in B & H Joint Venture to Beale Enterprises, Inc.
,
Mr. Bro\\n, I request you or your legal counsel contact me as soon as possible in order to
execute the appropriate documents to formally conclude the B & H Joint Venture.
If you elect to ignore my client's demands, they \vill consider legal options which are
available to them in order to protect their interest.
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cc: Mr. & Mrs. D. Paul Beale
Robert E. Chemicoff, Esquire
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January 26, 1990
Henry F. Coyne, Esq.
3901 Market Street
Camp Hfll, PA 17011
Re: Kokomo's Bar and Grill
Dear Mr. Coyne:
1 am wrftfng to let you know 1 am representfng Sean Barowski in
thfs matter. IIhen you get a chance could we get together to discuss
thfs?
Thanks for your consfderatfon.
Very truly yours,
KILLION & MElZ
Joseph U. Hetz
.....
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EXHIBIT
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HERSHEY mEPHOm
(717) 534-2833
IRS NO. 23-2274135
FAX
(717) 238-4809
LUNN I NllHHI1 l!. l.Hl:fo<N I LU/-I-
'(1'( <!JI:l 4Bij~ P. J'I/J'I
JORDAN D, CtINNINCHMi
IlOBEII.T E. CHElINICOFF
OEBORAH l. P^o:!R
P,\\(;E M.\CDON^\.OoM.\tTHES
MMCW. WITZIG
mWIN ^.O, SCHWAATZ
CUNNINGHAM &c CHERNICOFF, P.C.
ATTORNEYS AT LAW
2320 NORTH SECOND STREET
P,O. BOX 60457
HARRISBURG, PENNSYLVANIA 17106-0457
TELEPHONE
(717) 238-6570
June 13, 1997
Todd J. Shill. Esquire
llho.ds & Sinon
Post Offic8 1146
Harrisburg, PA 17108-1146
ae, B & H Joint Venture
Dear Todd,
Thank you for your telephone call this morning and for the information that
you shared as concerns the lawsuit recently commenced by Event Entertainment
and pending in the U. S. District Court for the Eastern District of Pennsylvania.
Pursuant to our conversaiton, I have enclosed a photocopy of the
Joint Venture Agree=ent, and a photocopy of the underlying Lease Agree=ent.
Becanse his company Great Locations, Inc. has pri=ary responsibility for,
and the majority vote concerning, the restaurant. Donald Brown, Jr. has
directed our firm to represent the Joint Venture in this case.
We also will represent him in his capacity as a na=ed defendant. (Mr, Brown
was served the su~ons and complaint yesterday.) Because Paul Beale was
served on June 3rd, we may have to regard that as the operative date as
concerns the Joint Venture.
Hr. Brown has asked that our firm represent Mr. Beale and Beale Enterprises, Inc.
in this litigation, belieVing that to be most efficient and consistent with his
duttes as regards the rest.urant. Of course, to the extent that Mr. Beale and
his co=pany wish to have separate counsel, they may do so, but Mr. Brown does
not wish to have the Joint Venture pay twice for what may be duplicative
legal services. Please call to discu,s. In the meantime, we will work on a
Rule l2(b) motion and companion brief to be filed on June 23rd.
Sincerely yours,
~~
Marc W. Witzig
Enclosures
cc "/0 encl. R. E. Chernicoff. Esq.
,
EXHIBIT
If
.
TOTAL P.37
HERSHEY TELEPHONE
(717) 534-2833
IRS NO. 2.3-2274135
F^X
(717)~809
.....
)ORDMI D. Cl1NNINGH^M
ROBERT E. CHERNlCOFF
DEBOWi L P^CKER
P^lGE M^CDON^LD-M^TI1iES
"MRC W. WITZIG
EDWIN ^.D. SCHW^RTZ
CUNNINGHAM & CHERNICOFF, P.c.
ATTORNEYS AT LAW
2320 NORTH SECOND STREET
P.O. BOX 60457
HARRISBURG, PENNSYLVANIA 17106-0457
-
TELEPHONE
(717) 238-6570
February 19, 1998
Henry F. Coyne, Esquire
390l Market Street
Camp Hill PA 17011-4227
VIA FAX 737-5161
end FIRST CLASS HArl
RE: Kokomo1s Restaurant; Great Location, Inc.;
Beale
Dear Mr. Coyne:
We spoke approximately one week ago relative to the status of
the above matter. As I informed you, all that has occurred here is
that there has been a sale of the stock of Great Location, Inc.
There is the same tenant in the same premises and the same operated
restaurant, together with the same holder of the liquor license.
I indicated to you that Mr. Brown and Mr. Barowski might be Willing
to consider some accommodation in order to satisfy your Clients.
I have ndt yet heard back from you. I would appreciate hearing
from you as soon as Possible.
The purpose of this letter is so that there is no prejUdice by
a failure to respond to your detailed previous correspondence on
these issues. That is to say, we do dispute the issues set forth
therein, however, we are attempting to resolve this matter by an
amicable settlement.
Also, please feel free to touch base with Joe Metz, who
represents the corporation now on this matter.
I look forward to hearing
from you.
-'.
~I . "
SinCeF~~Y:;:s,
C N G~~HERNICOFF,
Robert E. Che
-
REC: lbd
cc: Donald L. Brown, Jr.
Joseph U. Metz, Esquire
EXHIBIT
If/)
HAMILTON & MUSSER, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
1820 L1NOLIJSI'OWN ROAD
',^RRlSIlURO, PA 17110
I'AX (717) 234-7020
(717) 234-7000
-
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Dlvld A IIlmllton, CPA
DonyBMUiler,CPA
Jim.. A Krimmel, CPA, MIlA
Mlrtln I Lowy, CPA
Thomu P Lon.. PA
July 1996
August 1996
September 1996
October 1996
November 1996
December 1996
January 1997
February 1997
March 1997
May 1997
April 1997
June 1997
Total
KOKOMO'S SALES
$ 93,292.99
94,604.95
112,946.91
116,205.07
121,630.01
126,463.45
143,312.94
120,568.83
14l,112.30
121,171.86
127,584.90
120,433.61
-------------
$1,439,387.82
-------------
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Comp 1111I 763-1499
lIenhey 5J.l.6892
MeehlnlabuII 697.3888
Memben 01 the Amerfcon Ind
Penl1l)'lYlnl1 Inslllul.. at CPA',
Prepared by: .:1:..- ....~~t.-/'
Francine J. ouglass, Accountant
EXHIBIT
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Gross Sales over $900,000 for $539,387.82
year ending June 30, 1997
7% additional rent as per lease $ 37,757.14
Credit on additional rent paid on
aooount sinoe July, 1997 $ 13,000.00
Net Payable D. Paul Beale and
Mildred E. Beale $ 24,757.14
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~ F. COYNE
LISA MARIE COYNE
Attorneys at Law
"'~.-..._...
3901 Market Street
Camp Hili, PA 17011-4227
/717) 737.0464
January 29, 1998
Joseph U. Metz, Esquire
Killion & Metz
214 Pine Street
Harrisburg, PA 17101
Re: B & H Joint Vel/ture, alk/a Kokomo's
Restaurant, 3721 Market Street,
Camp Hill
Dear Attorney Metz:
As per our telconfthis date, I understand you represent Mr. Sean Barowski.
Therefore, r enclose the following documents:
.. 1. . Petition By Lessor And Partner To Intervene Regarding Stock and Ownership
Transfer Of A Restaurant Liquor License, filed January 26, 1998; with the PLCB
2. My Memo, dated January 23, 1998, to Mr. Donald 1. Brown of Great Location,
Inc.;
3. My Memo, dated January 28, 1998, to Mr. Donald 1. Brown of Great Location,
Inc.
If you have any questions or commen~, please contact me.
HFC/ers
Enclosures
~yyours,
Heruy F. Coyne
cc: Mr. D. Paul Beale (Via Fa;t)
Mr. Jeffrey Beale (Via Fa.'()
GREAT LOCATIONS INC, nnd
B & H .JOINT VENTURE nnd
SEAN BAROWSKI,
Pelltloner
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
vs.
: NO. 98-1106 EQUITY
PAUL BEALE nnd HIS AGENTS,
Respondents
PRAECIPE
Dear Sir:
Please enter my appearance as attorney of record for Paul Beale, the Defendant in the above-
referenced matter.
Respectfully submitted,
if; 4 ~tfa
HENR F. COYN ,ESQUIRE
3901 Market Street
Camp Hill, P A 17011-4227
(717) 737-0464
Pa. S. Ct. No. 06250
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GREAT LOCATIONS, INC. unll
B&H JOINT VENTURE uno
SEAN BAROWSKI,
:IN TIlE COURT OF COMMON I'LEAS OF
:CUMIlERLAND COUNTY, PENNSYLVANIA
Pctitioncr
v
:NO. 9H - 1106 EQUITY
PAUL BEALE uno HIS AGENTS,
Responocnts
PRAECIPE
TO THE PROTHONOTARY:
On behulf of the Petitioners/Plaintiffs in the ubove action, please discontinue all claims filed
,
against the Respondents/Defendants and mark this case settled and discontinued. Please make
$1.00 Bond psysble to Hubert X. Gilroy, Esquire.
'7(~1/98
DATE
Hubert X. Gilroy, uire
Attorney for Petitioners/Plaintiffs
Please enter my appearance on behalf of Respondents/Defendants Paul Beale und his agents in
the above captioned case. On behalf of the Defendallt's/Rcspondents, please discontinue any
7 )'5/ ''f(
DATE
( i' 0 // /i)
V_Vv~CY/t Y, ,~,/
Michael L. Bangs, ~quire
Attorney for RespondentsfDefendants
Counter-Claims filed against the Petitioners/Plaintiffs and please mark all c1aim~ settled and
discontinued.
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